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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement | |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ☒ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material under Rule 14a-12 | |
IBERIABANK CORPORATION
(Name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
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No fee required. | |||
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Fee paid previously with preliminary materials. | |||
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Notice of Annual Meeting and proxy statement 2019
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March 28, 2019
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of IBERIABANK Corporation to be held at the Windsor Court Hotel, 300 Gravier Street, New Orleans, Louisiana, on Tuesday, May 7, 2019, at 4:00 p.m., Central Time.
The matters to be considered by shareholders at the Annual Meeting are described in the accompanying materials. Also enclosed is an Annual Report to Shareholders for 2018. Directors, officers, and other associates of the Company, as well as representatives of the Company’s independent registered public accounting firm, will be present to respond to any questions shareholders may have.
The Board of Directors welcomes and appreciates the interest of all our shareholders in the Company’s affairs and encourages those entitled to vote at the Annual Meeting to take the time to do so. We hope you will attend the Annual Meeting. Whether or not you expect to attend, please vote your shares by signing, dating, and promptly returning the enclosed proxy card in the accompanying postage-paid envelope, by telephone using the toll-free telephone number printed on the proxy card, or by voting on the Internet using the instructions printed on the proxy card. This will ensure that your shares are represented at the Annual Meeting.
Even though you execute this proxy, vote by telephone or vote via the Internet, you may revoke your proxy at any time before it is exercised by giving written notice of revocation to the Secretary of the Company, by executing and delivering a later-dated proxy (either in writing, telephonically or via the Internet), or by voting in person at the Annual Meeting. If you attend the Annual Meeting, you will be able to vote in person if you wish to do so, even if you have previously returned your proxy card, voted by telephone or via the Internet.
Your vote is important to us. We appreciate your prompt attention to this matter and your continued support of and interest in IBERIABANK Corporation.
Sincerely,
Daryl G. Byrd
President and Chief Executive Officer
Phone 337-521-4003 • FAX 337-521-4021 • 200 West Congress Street • Post Office Box 52747 • Lafayette, LA 70505-2747
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IBERIABANK CORPORATION
200 WEST CONGRESS STREET
LAFAYETTE, LOUISIANA 70501
Notice of Annual Meeting of Shareholders
to be Held on May 7, 2019
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of IBERIABANK Corporation will be held at the Windsor Court Hotel, 300 Gravier Street, New Orleans, Louisiana, on Tuesday, May 7, 2019, at 4:00 p.m., Central Time, for the purpose of considering and acting on the following:
| 1. | Election of two directors, each for a three-year term expiring in 2022; |
| 2. | Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019; |
| 3. | Approval, on an advisory basis, of the compensation of the Named Executive Officers; |
| 4. | Approval of the IBERIABANK Corporation 2019 Stock Incentive Plan; and |
| 5. | Such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
Only shareholders of record at the close of business on March 19, 2019, are entitled to notice of, and to vote at, the Annual Meeting or any adjournments or postponements thereof.
By Order of the Board of Directors
Robert B. Worley, Jr.
Secretary
Lafayette, Louisiana
March 28, 2019
Important Notice Regarding the Availability of Proxy Materials for the
2019 Annual Meeting of Shareholders to be held on May 7, 2019
This Notice and Proxy Statement, the Company’s 2018 Annual Report to Shareholders and the Company’s
Annual Report on Form 10-K for the year ended December 31, 2018 are available electronically at
http://www.iberiabank.com/globalassets/proxy-2019.pdf
Whether or not you expect to attend the Annual Meeting, please vote by Internet or telephone, or complete the enclosed proxy and return promptly in the postage-paid envelope provided. If you vote by Internet or telephone, use the instructions on the enclosed proxy card. If you attend the Annual Meeting, you may vote either in person or by proxy. Any proxy previously executed may be revoked by you in writing or in person at any time prior to its exercise.
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2019 Proxy Statement i |
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Introduction
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Introduction
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2019 Proxy Statement 3 |
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Questions and Answers
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2019 Proxy Statement 5 |
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Questions and Answers
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Questions and Answers
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2019 Proxy Statement 7 |
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Proposal I—Election of Directors
A link to the Corporate Governance Guidelines is on the “Investor Relations” portion of the Company’s website, at http://www.iberiabank.com.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE COMPANY’S SHAREHOLDERS VOTE “FOR” EACH OF THE DIRECTOR NOMINEES BELOW.
Nominees for Terms to Expire in 2022
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2019 Proxy Statement 9 |
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Directors Whose Terms Expire in 2021
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2019 Proxy Statement 11 |
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Directors Whose Terms Expire in 2020
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2019 Proxy Statement 13 |
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Directors not Continuing in Office
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2019 Proxy Statement 15 |
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Corporate Governance
Board of Directors Independence
Shareholder Communications
Codes of Ethics
Preferred Stock Issuance Representation
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2019 Proxy Statement 17 |
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Corporate Governance
Corporate Governance Guidelines
Diversity and Inclusion
Set forth below is our Mission Statement, which has remained constant since we adopted it 20 years ago. It has served as the guiding principles of discipline, safety, and performance as we continue to grow and excel:
MISSION STATEMENT
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Stock Ownership of Certain Beneficial Owners and Management
The following tables include certain information as to the common stock beneficially owned by:
| • | persons or entities, including any “group” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, who or which was known to us to be the beneficial owner of more than 5% of our common stock; |
| • | our directors; |
| • | our Named Executive Officers identified in the Summary Compensation Table elsewhere herein; and |
| • | all of our directors and executive officers as a group. |
| Common Stock Beneficially Owned as of December 31, 2018 | ||||||||
| Name and Address of Beneficial Owner | Amount | Percentage | ||||||
| The Vanguard Group, Inc.(1) |
4,991,180 | 8.98 | % | |||||
| BlackRock,
Inc.(2) |
4,136,443 | 7.40 | % | |||||
| (1) | As reported on Schedule 13G/A, dated as of February 11, 2019, and filed with the SEC on February 12, 2019, The Vanguard Group, Inc., a Pennsylvania corporation, has sole voting power with respect to 54,582 shares, sole dispositive power with respect to 4,932,852 shares, shared voting power with respect to 9,257 shares and shared dispositive power with respect to 58,328 shares. Vanguard Fiduciary Trust Company and Vanguard Investments Australian, LTD, each a wholly owned subsidiary of The Vanguard Group, are the beneficial owners of 49,071 shares and 14,768 shares, respectively, as a result of serving as investment managers of collective trust accounts and Australian investment offerings, respectively. |
| (2) | As reported on Schedule 13G/A, dated as of February 4, 2019 and filed with the SEC on February 4, 2019, BlackRock, Inc., a Delaware corporation, has sole voting power with respect to 3,940,615 shares and sole dispositive power with respect to 4,136,443 shares. |
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Stock Ownership of Certain Beneficial Owners and Management
| Common Stock Beneficially Owned as of Record Date (1)(2)(3)(4) | ||||||||
| Amount | Percentage | |||||||
| Directors: |
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| Elaine D. Abell |
58,107 | * | ||||||
| Harry V. Barton, Jr. |
36,711 | (5) | * | |||||
| Ernest P. Breaux, Jr. |
27,647 | * | ||||||
| Daryl G. Byrd |
470,334 | (6)(7) | * | |||||
| John N. Casbon |
16,123 | * | ||||||
| Angus R. Cooper, II |
51,800 | * | ||||||
| William H. Fenstermaker |
69,390 | (6)(8) | * | |||||
| John E. Koerner, III |
11,300 | (9) | * | |||||
| Rick E. Maples |
7,100 | * | ||||||
| E. Stewart Shea, III |
83,498 | (6)(10) | * | |||||
| Rosa Sugrañes |
1,200 | * | ||||||
| Named Executive Officers who are not directors: |
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| Anthony J. Restel |
99,295 | (7) | * | |||||
| Michael J. Brown |
181,830 | (7) | * | |||||
| Fernando Perez-Hickman |
45,855 | * | ||||||
| Jefferson G. Parker |
99,864 | * | ||||||
| All directors and executive officers as a group (23 persons) |
1,454,348 | 2.65 | % | |||||
| * | Represents less than 1% of the outstanding common stock. |
| (1) | Unless otherwise indicated, shares are held with sole voting and dispositive power. |
| (2) | Includes shares of common stock owned directly by directors and executive officers, as well as shares held by their spouses, minor children, companies and trusts of which they are trustees. Also includes shares held under a power of attorney. |
| (3) | Includes all shares that may be acquired upon the exercise of stock options, including those vesting within 60 days of the record date: 224,044 shares by Mr. Byrd; 43,449 shares by Mr. Restel; 70,427 shares by Mr. Brown; 13,856 shares by Mr. Perez-Hickman; 63,939 shares by Mr. Parker and 515,707 shares by all directors and executive officers as a group. |
| (4) | Includes unvested restricted shares that may be voted by the following persons: 53,587 shares by Mr. Byrd; 25,366 shares by Mr. Restel; 26,102 shares by Mr. Brown; 33,818 shares by Mr. Perez-Hickman; 11,128 shares by Mr. Parker; and 210,828 shares by all directors and executive officers as a group. |
| (5) | Includes 3,140 shares held by a trust of which Mr. Barton is a trustee. |
| (6) | Includes the following shares of common stock pledged as security for loans from unaffiliated parties: 155,838 shares by Mr. Byrd; 22,339 shares by Mr. Fenstermaker; and 15,579 shares by Mr. Shea. |
| (7) | Includes the following shares of common stock allocated to participants in the Retirement Savings Plan as of March 19, 2019: 13,087 shares by Mr. Byrd; 3,584 shares by Mr. Restel; 4,287 shares by Mr. Brown; and 21,113 shares by all executive officers as a group. |
| (8) | Includes 22,500 shares held by C.H. Fenstermaker and Associates, LLC and 2,448 shares held by the William Fenstermaker Children’s Trust. |
| (9) | Includes 3,500 shares held by Koerner Capital, LLC. |
| (10) | Includes 66,669 shares held through the E. Stewart Shea III Delaware Trust and the E. Stewart Shea III Family LLC; as Managing Member of the LLC Mr. Shea exercises voting and dispositive authority of those shares. |
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Stock Ownership of Certain Beneficial Owners and Management
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Committees of the Board of Directors
Nominating and Corporate Governance Committee
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Committees of the Board of Directors
Compensation Committee
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Committees of the Board of Directors
Board Risk Committee
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Committees of the Board of Directors
Committee Interaction
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Proposal II—Ratification of Appointment of Independent Registered Public Accounting Firm
Audit Fees and Other Matters
The following table discloses the aggregate fees for professional services performed by Ernst & Young LLP in fiscal years 2018 and 2017.
| Fee Category | Fiscal Year 2018 | % of Total | Fiscal Year 2017 | % of Total | ||||||||||||
| Audit Fees(1) |
$2,416,313 | 85.8 | % | $2,522,330 | 88.3 | % | ||||||||||
| Audit-related Fees(1) |
75,000 | 2.7 | % | 100,000 | 3.5 | % | ||||||||||
| Tax Fees |
324,075 | 11.5 | % | 234,279 | 8.2 | % | ||||||||||
| All Other Fees |
- | - | % | - | - | % | ||||||||||
| Total Fees |
$2,815,388 | 100 | % | $2,856,609 | 100 | % | ||||||||||
(1) Fees include reimbursement of expenses incurred.
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Proposal II—Ratification of Appointment of Independent Registered Public Accounting Firm
Pre-approval Policy
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE COMPANY’S SHAREHOLDERS VOTE “FOR” RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY.
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The Audit Committee of the Board of Directors is composed of four non-employee directors. The Board has made a determination that the members of the Audit Committee satisfy the listing standards of NASDAQ as to independence, financial literacy, and experience. The responsibilities of the Audit Committee are set forth in the Charter of the Audit Committee, as adopted by the Board of Directors of the Company. This is a report on the Committee’s activities relating to fiscal year 2018.
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has primary responsibility for the financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements for fiscal year 2018 with the Company’s management, including a discussion of the quality, not just the acceptability, of the accounting principles, underlying estimates and significant judgments used in the financial statements. Management has the responsibility for the preparation of the Company’s financial statements. Management represented to the Audit Committee that the financial statements were prepared in accordance with generally accepted accounting principles.
The Audit Committee reviewed the audited financial statements with the independent registered public accounting firm, who is responsible for expressing an opinion on the conformity of those statements with generally accepted accounting principles, and discussed with the independent registered public accounting firm their judgments as to the quality, not just the acceptability, of the Company’s accounting principles. The Audit Committee also discussed with the independent accounting firm the matters required to be discussed by Auditing Standards (AS) 1301, “Communication with Audit Committees”, as currently in effect.
The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by Rule 3526, “Communication with Audit Committee Concerning Independence”, of the Public Company Accounting Oversight Board, as currently in effect, and the Audit Committee has discussed with the independent registered public accounting firm its independence.
The Audit Committee also considered the compatibility of non-audit services with the independent registered public accounting firm’s independence. In assessing requests for services by the independent registered public accounting firm, the Audit Committee considers whether the independent registered public accounting firm is likely to provide the most effective and efficient services based upon their familiarity with the Company and whether the services could enhance the Company’s ability to manage or control risk or improve audit quality.
The Audit Committee discussed with the Company’s internal auditors and the independent registered public accounting firm the overall scope and plans for their respective audits. The Committee met with the internal auditors and the independent registered public accounting firm, with and without management present, to discuss the results of their audits, their evaluations of the Company’s systems of internal controls and the overall quality and adequacy of the Company’s financial reporting. The Audit Committee discussed with management, the internal auditors, and the independent registered public accounting firm the internal audit function’s organization, responsibilities, budget, and staffing. Both the internal auditors and independent registered public accounting firm have unrestricted access to the Audit Committee. The Audit Committee held ten meetings during fiscal year 2018.
The Audit Committee received reports throughout the year on the Company’s internal controls for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the rules promulgated there under. The Audit Committee will continue to obtain updates by management on the process and has reviewed management’s and the independent registered auditors’ evaluation of the Company’s system of internal controls included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission (“SEC”).
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Report of the Audit Committee
The Audit Committee, or its Chairman, met with, or held telephonic discussions with, the independent registered public accounting firm and management prior to the release of the Company’s quarterly and annual financial information or the filing of any such information with the SEC. In reliance on the reviews and discussions referred to above, the Audit Committee also recommended that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2018, for filing with the SEC. Subject to shareholder ratification, the Audit Committee currently intends to appoint the independent registered public accounting firm Ernst & Young LLP for the fiscal year ending December 31, 2019.
THE AUDIT COMMITTEE:
Harry V. Barton, Jr., Chairman
John E. Koerner, III
Rick E. Maples
Rosa Sugrañes
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Proposal IV—Approval of the IBERIABANK Corporation 2019 Stock Incentive Plan
| Best Practice Provisions in the 2019 Plan
The 2019 Plan has many provisions designed to protect shareholder interests and promote effective corporate governance, including the following:
• the exercise price of options and share appreciation rights may not be less than the fair market value of a share of stock on the date of grant;
• the 2019 Plan prohibits the repricing of any option or share appreciation right without shareholder approval;
• participants holding stock options or share appreciation rights do not receive dividend equivalents for any period prior to the exercise of the award;
• the 2019 Plan uses an efficient fungible share design, under which each share subject to an appreciation award counts as 1 share against the plan limit and each share subject to a full value award counts as 2 shares against the plan limit;
• shares of common stock delivered or withheld in payment of the exercise price of a stock option, satisfaction of tax obligation with respect to stock options or SARS, or repurchased with the proceeds of an option exercise, may not be re-issued under the 2019 Plan;
• options and share appreciation rights are subject to a minimum one-year vesting requirement (except that 5% of the shares available under the 2019 Plan may be granted without compliance with these minimum vesting conditions); |
• the 2019 Plan contains limits on the number of shares subject to awards that may be granted to a participant each year;
• the 2019 Plan limits the value of awards (including fees) that may be awarded to non-management directors each year;
• payment of dividends or dividend equivalents on performance-based awards is conditioned on achievement of the same performance goals as the underlying award;
• the full number of all stock-settled share appreciation rights shall be counted against the plan limits;
• material amendments of the 2019 Plan require shareholder approval; and
• awards under the 2019 Plan are administered by the Compensation Committee, an independent committee of our Board.
Other Company policies that help align the interests of our directors and executive officers with those of our shareholders include our policies that prohibit our directors and executive officers from hedging or pledging our common stock, and our stock ownership guidelines for our directors and certain executive officers. See “Compensation Discussion and Analysis.” |
Description of the 2019 Plan
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Proposal IV—Approval of the IBERIABANK Corporation 2019 Stock Incentive Plan
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Proposal IV—Approval of the IBERIABANK Corporation 2019 Stock Incentive Plan
Description of Awards.
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Proposal IV—Approval of the IBERIABANK Corporation 2019 Stock Incentive Plan
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Proposal IV—Approval of the IBERIABANK Corporation 2019 Stock Incentive Plan
Expected Federal Income Tax Consequences.
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Proposal IV—Approval of the IBERIABANK Corporation 2019 Stock Incentive Plan
New Plan Benefits.
The Committee made equity awards in the first quarter of 2019 under the 2016 Plan. However, no awards pursuant to the proposed 2019 Plan have been, or will be, granted prior to the plan’s approval by the Company’s shareholders. If our shareholders approve the 2019 Plan at the Annual Meeting, grants of awards to eligible participants will be made in the future by the Compensation Committee as it deems necessary or appropriate.
Equity Compensation Plan Information as of December 31, 2018
The following table provides information concerning securities authorized for issuance under equity compensation plans, the weighted average price of such securities and the number of securities remaining available for future issuance, as of December 31, 2018.
| Equity Compensation Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants, and rights |
Weighted- exercise price of options, warrants, and rights (1) |
Number of securities remaining and available for |
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| Plans approved by shareholders |
1,414,699 | (3) | $61.42 | 1,162,931 | ||||||||
| Plans not approved by shareholders |
349 | (4) | $36.48 | - | ||||||||
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| Total |
1,415,048 | $61.41 | 1,162,931 | |||||||||
| (1) | Restricted stock awards and performance units were not included when calculating the weighted-average exercise price. |
| (2) | Remaining shares available for issuance include 1,162,931 shares under the 2016 Stock Incentive Plan. Shares remaining to be issued subsequent to December 31, 2018 can be issued either as stock option grants, or restricted stock awards or performance units. Shares available for issuance will be reduced by one share for each stock option share granted and by two shares for every one share issued as a restricted stock or a performance unit. |
| (3) | Number of securities includes 235, 2,483, 90,857, and 421,339 shares of unvested restricted stock granted under the 2005 Incentive Compensation Plan, 2008 Incentive Compensation Plan, 2010 Stock Incentive Plan, and 2016 Stock Incentive Plan, respectively. Number of securities also includes 79,385 and 106,329 shares of unvested performance units granted under the 2010 Stock Incentive Plan and 2016 Stock Incentive Plan, respectively. |
| (4) | Includes 349 shares available for issuance under the Florida Gulf Bancorp, Inc. Officers’ and Employees’ Stock Option Plan, which was assumed by the Company in its acquisition of Florida Gulf Bancorp, Inc. on July 31, 2012. |
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Proposal IV—Approval of the IBERIABANK Corporation 2019 Stock Incentive Plan
Updated Equity Compensation Plan Information as of March 19, 2019
In the first quarter of 2019, the Committee granted awards related to approximately 505,815 shares of our common stock under the Prior Plan. Thus, there are currently 672,414 shares remaining available for future grants under the Prior Plan. The following table provides information concerning securities authorized for issuance under equity compensation plans, the weighted average price of such securities and the number of securities remaining available for future issuance, as of March 19, 2019.
| Equity Compensation Plan Category | Number of issued upon exercise of outstanding options, warrants, and rights |
Weighted- exercise price of outstanding options, warrants, and rights (1) |
Number of securities remaining and available for future issuance (2) |
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| Plans approved by shareholders |
1,517,734 | (3) | $62.91 | 672,414 | ||||||||
| Plans not approved by shareholders |
349 | (4) | $36.48 | - | ||||||||
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| Total |
1,518,083 | (5) | $62.90 | 672,414 | ||||||||
| (1) | Restricted stock awards and performance units were not included when calculating the weighted-average exercise price. |
| (2) | Remaining shares available for issuance include 672,414 shares under the 2016 Stock Incentive Plan. Shares remaining to be issued subsequent to March 19, 2019 can be issued either as stock option grants, or restricted stock awards or performance units. Shares available for issuance will be reduced by one share for each stock option share granted and by two shares for every one share issued as a restricted stock or performance unit. |
| (3) | Number of securities includes 48, 1,008, 43,459, and 484,107 shares of unvested restricted stock granted under the 2005 Incentive Compensation Plan, 2008 Incentive Compensation Plan, 2010 Stock Incentive Plan, and 2016 Stock Incentive Plan, respectively. Number of securities also includes 173,238 shares of unvested performance units granted under the 2016 Stock Incentive Plan. |
| (4) | Includes 349 shares available for issuance under the Florida Gulf Bancorp, Inc. Officers’ and Employees’ Stock Option Plan, which was assumed by the Company in its acquisition of Florida Gulf Bancorp, Inc. on July 31, 2012. |
| (5) | The weighted average remaining life of the 816,223 outstanding stock options as of March 19, 2019 is 5.7 years. |
Vote Required
Pursuant to NASDAQ rules and our Bylaws, the affirmative vote of a majority of the votes actually cast is required for approval of Proposal IV.
Recommendation of the Board of Directors
The Compensation Committee and our Board determined that approval of proposed 2019 Plan is appropriate and in the best interests of the Company and its shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE COMPANY’S SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE PROPOSED 2019 STOCK INCENTIVE PLAN.
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Compensation Discussion and Analysis
References to “the Company,” “we,” “our” or “us” in this Compensation Discussion and Analysis means IBERIABANK Corporation and its subsidiaries, unless the context requires otherwise.
This Compensation Discussion and Analysis (“CD&A”) section explains the 2018 compensation program for the Company’s Named Executive Officers, or “NEOs”, whose compensation information is provided in the tables following this discussion, and how those decisions reflect the achievements of the Company’s 2018 performance and strategic objectives. The Company’s 2018 NEOs are listed below:
| Daryl G. Byrd |
President and Chief Executive Officer (“CEO”) | |
| Anthony J. Restel |
Vice Chairman and Chief Financial Officer | |
| Fernando Perez-Hickman |
Vice Chairman and Director of Corporate Strategy | |
| Michael J. Brown |
Vice Chairman and Chief Operating Officer | |
| Jefferson G. Parker |
Vice Chairman and Director of Capital Markets, Energy Lending, and Investor Relations |
Executive Summary
The Company’s executive compensation programs have evolved over the past several years, culminating in significant changes in 2016 reflective of shareholder feedback. The Company’s executive compensation programs are designed to encourage our executives to execute on the Company’s short and long-term financial goals and to align our executives’ interests with those of our shareholders. The discussion below describes the Company’s recent business performance and demonstrates the linkage between 2018 performance and pay outcomes. Additionally, base salaries in 2018 for NEOs, including the CEO, were not increased and remained at 2017 levels.
Business Highlights
We are pleased to share with you some highlights of the Company’s performance at and for the year ended December 31, 2018:
| • | Acquired, converted, and assimilated Gibraltar, adding $1.4 billion in loans and $1.1 billion in deposits. |
| • | Net income available to common shareholders totaled $361.2 million, or $6.46 diluted EPS, up from $133.3 million, or $2.59 diluted EPS, in prior year. |
| • | Non-GAAP core EPS, which excludes merger-related costs, the impact of tax reform, and other one-time items, was $6.69 compared to $4.47 in prior year. |
| • | Returned $87.3 million, or 24%, of net income available to common shareholders through dividends. |
| • | Experienced a 24% positive total shareholder return ratio (TSR) for the three-year period ended December 31, 2018, which includes share price appreciation and dividends paid on our common stock. |
| • | Net interest income increased 25% to $1.0 billion, which was primarily volume-related due to the Sabadell United and Gibraltar acquisitions, and was also impacted by higher earning asset yields offset by higher funding costs. |
| • | Net interest margin on a taxable equivalent basis increased 11 basis points to 3.75%. |
| • | Non-interest income decreased 25% to $152.6 million, primarily due to losses on sales of available-for-sale securities and a decrease in mortgage income. |
| • | Non-interest expense increased 8% to $722.9 million, largely due to acquisition-related increases in salaries and employee benefits expense, branch consolidation and closure expenses, amortization of intangibles, net occupancy and equipment expenses, and other merger and conversion-related expenses. |
| • | Average total loans increased by $4.5 billion, or 26%, to $21.6 billion. |
| • | Average total deposits increased by $3.9 billion, or 21%, to $22.9 billion. |
| • | Average total non-interest-bearing deposits increased by $1.2 billion, or 21%. |
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| • | Asset quality and credit metrics improved as non-performing loans and leases to total loans and leases decreased to 0.62%, down from 0.76% in prior year. |
| • | Tangible book value per common share increased by 12% to $47.61. |
| • | Maintained a tangible common equity ratio of 8.84%. |
| • | Shareholders’ equity increased $359.5 million, or 10%, from 2017, primarily from undistributed income to common shareholders of $282.9 million, as well as the Company’s issuance of 2.8 million shares of common stock in March 2018 as part of consideration for the Gibraltar acquisition. This increase was partially offset by the repurchase of 1,972,500 common shares, at a weighted average price of $75.46 per common share. |
| • | Results in 2018 were favorably impacted by U.S. tax reform changes under the Tax Act, which was signed into law on December 22, 2017, and the acquisitions of Sabadell United on July 31, 2017 and Gibraltar on March 23, 2018. |
2018 Relative Performance Snapshot
For purposes of these charts, peer average is the average of the relevant metrics for the Company’s peer group. The peer group is listed in the “Competitive Benchmarking” section of this CD&A. As discussed in the Introduction to this Proxy Statement, the Company’s 2018 performance was significantly impacted by recent acquisitions and the enactment of the Tax Act. Merger-related expenses reduced EPS by $0.44 and the provisional impact of the Tax Act increased EPS by $1.06 in 2018. Balance sheet growth in 2018 was primarily acquisition-related.
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Source: S&P Global Intelligence
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Compensation Discussion and Analysis
Summary of 2018 Compensation Actions
Executive Compensation Program Overview
Significant changes were made to the executive compensation program in 2016. The shareholder advisory vote on the compensation of our NEOs (commonly known as “Say-on-Pay”) at our 2018 Annual Meeting of Shareholders, at which 88% of the vote was in support of the advisory proposal, clearly demonstrated approval of those changes and reaffirmed to us the alignment between our shareholders and executive compensation program.
A summary of the key changes made in 2016 that carried into 2018 include:
| Desired Principle/ |
Key Changes | |
| Alignment between performance results and executive pay
|
Overall Compensation Levels: ✓ 2018 annual incentive performance payouts were 137.51% of target for our NEOs, demonstrating alignment between the Company’s performance results and executive pay outcomes | |
| Improve transparency and strengthen alignment with financial results and annual incentive award payouts | Annual Incentives: ✓ Improvement was made around performance metric selection, design clarity, and goal setting in 2016 and there were no changes to this metric from the previous year.
* Three performance goals were selected to align incentives with key financial measures.
• One earnings measure constitutes 50% weight while two credit measures comprise the remaining 50% of the annual incentive opportunity. These metrics were chosen to balance the need to measure profitable growth with credit quality.
• In the first quarter of 2018, the Committee approved a specific performance range for each measure, including Threshold, Target, and Maximum performance goals, all of which were based on an approved budget. |
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| 2018 |
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| Performance Measure | Weight | |||||||||||||||||||||
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| Core Earnings | 50% | |||||||||||||||||||||
| Annual Net Charge-Offs to Average Loans | 25% | |||||||||||||||||||||
| Legacy Non-Performing Assets to Total Assets | 25% | |||||||||||||||||||||
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There were no changes to this metric from the previous year. |
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More emphasis on long-term focused performance metrics to encourage long-term value creation |
Long-Term Incentives (“LTI”): ✓ LTI were allocated between three vehicles with the greatest weight on long-term, performance based incentives:
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| 2018 |
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| LTI Vehicle | Weight | |||||||||||||||||||||
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| Performance-based RSUs | 60% | |||||||||||||||||||||
| Restricted Stock | 30% | |||||||||||||||||||||
| Stock Options | 10% | |||||||||||||||||||||
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There were no changes to this metric from the previous year. |
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| The table below demonstrates the Company’s strong commitment to ensuring long-term compensation opportunities for senior executives, including NEOs, are aligned with long-term performance and shareholder interests. | ||||||||||||||
| Long Term Incentive Structure - Equity Mix |
| |||||||||||
| Equity Type | 2013 | 2014 | 2016-2018 | |||||||||
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| Performance-based RSUs | 0 | % | 20 | % | 60 | % | ||||||
| Performance Units | 0 | % | 20 | % | 0 | % | ||||||
| Restricted Stock | 90 | % | 45 | % | 30 | % | ||||||
| Stock Options | 10 | % | 15 | % | 10 | % | ||||||
| Align financial interests between NEOs and shareholders | Stock Ownership: ✓ For 2018, the CEO’s stock ownership requirement remained at 5x his base salary.
✓ Other NEOs have had their stock ownership requirements remain at 3x base salary.
✓ All NEOs, including the CEO, are currently in compliance with the stock ownership requirements. |
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Compensation Discussion and Analysis
The significant changes made to our executive compensation programs in 2016 carried forward to 2018 and were very well received by our shareholders as evidenced by overwhelming support of our 2018 Say-on-Pay vote (88% favorable support). Our Compensation Committee believes that these voting results reflect our shareholders’ support for the structural changes made to, and the current direction of, our executive compensation program, and affirm alignment of our program with shareholder interests. We continue to maintain an open and active dialogue with our shareholders and advisors to identify ways to further refine and improve our executive compensation program. The Compensation Committee believes our current program adequately and effectively promotes the Company’s business strategies and aligns pay with performance and shareholder value.
Key Features of Our Executive Compensation Program
WHAT WE DO
WHAT WE DON’T DO
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Compensation Discussion and Analysis
PAY FOR PERFORMANCE PHILOSOPHY
Philosophy and Objectives of Our Executive Compensation Program
The Compensation Committee’s general philosophy is that all elements of target compensation (e.g., base salary, target annual incentive award opportunity, and target long-term incentive award opportunity) should be based on competitive market data, with incentive compensation targeted at the median of similarly situated executives among our peer group or other relevant industry benchmarks. The competitive positioning of target compensation levels for individuals may vary above or below the median based on individual, executive-specific factors such as tenure, experience, and proficiency in role or criticality to the Company. The Compensation Committee’s objective is to provide a program that:
| • | Attracts and retains high-performing executives; |
| • | Has a significant portion of pay tied to business performance; |
| • | Aligns compensation with shareholder interests, while rewarding long-term value creation; |
| • | Discourages excessive risk-taking by rewarding both short-term and long-term performance; |
| • | Reinforces high ethical conduct; and |
| • | Maintains flexibility to respond to industry dynamics. |
Unlike target compensation levels, which are set by the Compensation Committee near the beginning of the year, actual compensation is a function of our operational, financial, and stock price performance, as reflected through annual incentive payouts and the value of all long-term incentive awards at vesting. These factors may be considered in decisions to increase or decrease compensation materially. Actual compensation is intended to vary above or below target levels commensurate with our performance. Although not applied to any NEO in 2018, discretion can be exercised by the Committee to award compensation absent attainment of the relevant performance goals.
Compensation Mix
Our strategy for compensating our NEOs and other associates has been based on programs that emphasize performance-based variable compensation. During 2018, the Compensation Committee approved the following incentive plan designs for our NEOs, which included:
| • | Annual Incentive Awards: a transparent and formulaic plan, rewarding achievement of profitable growth and credit quality. |
| • | Long-Term Incentive Awards: granted three types of equity based awards that in combination balance alignment with shareholder interest (stock options), retention (restricted stock), and long-term performance accountability (performance shares). |
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Compensation Discussion and Analysis
The Company’s emphasis on performance-based compensation is best illustrated by the mix of 2018 compensation for NEOs which was as follows:
This illustrates that the majority of our NEO’s total direct compensation package is variable pay. Furthermore, it also shows our emphasis on long-term incentive compensation over short-term (annual) incentive compensation.
DECISION MAKING PROCESS
Role of Compensation Committee
The Compensation Committee administers the Company’s compensation program for the President and CEO and other NEOs. The Compensation Committee’s authority and responsibilities are set forth in its charter and include, but are not limited to:
| • | Reviewing and approving the compensation for the President and CEO and other executives; |
| • | Selecting and approving the performance metrics and goals for all executive officer compensation programs and evaluating performance at the end of each performance period; and |
| • | Approving annual incentive award and long-term incentive award opportunities. |
In making compensation decisions, the Compensation Committee uses multiple resources and tools, including the services of its independent compensation advisor.
Role of Executive Officers
Authority and responsibilities of executive officers in determining executive compensation are also set forth in the Compensation Committee charter including, but not limited to:
| • | The CEO and other members of management will consult, as necessary and appropriate, with the Committee. |
| • | To the extent appropriate, the Committee may delegate to the CEO power to create, terminate or amend Company plans. |
| • | The CEO may recommend to the Committee compensation arrangements for senior officers and other key associates. |
| • | Appropriate management will consult with the Committee regarding regulatory compliance with respect to compensation matters, including preparation of this CD&A. |
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Compensation Discussion and Analysis
Compensation Decisions for the Named Executive Officers
Individual compensation decisions (base salary adjustments and incentive awards) for all NEOs are based upon core performance, achievement of strategic initiatives, and individual performance. The Committee, in its sole discretion, determines any salary adjustments and approves the annual and long-term incentive awards for the President and CEO.
Independent Compensation Consultant
The Compensation Committee has retained FW Cook as its independent consultant reporting directly to the Compensation Committee.
In its role as the Committee’s independent advisor, FW Cook attends most Committee meetings and advises on matters including compensation program design, competitive benchmarking, and relative pay for performance. FW Cook also provides market data, analysis, and advice regarding compensation of our NEOs and other executive officers. FW Cook does not provide any services to the Company other than executive compensation consulting services to the Committee.
Competitive Benchmarking
Annually, the Compensation Committee reviews competitive data for comparable executive positions in the market. External market data is used by the Compensation Committee as a point of reference in its executive pay decisions in conjunction with financial and individual performance data.
The Committee also considers analysis from a comprehensive total compensation study, which delineates each compensation element for NEOs, competitive benchmarking, and other analysis, as further described below.
| Individual Performance | Company Performance | Intangibles | ||||||||||||
| • | NEO’s contributions to the development and execution of our business plans and strategies (including contributions that are expected to provide substantial benefit to the Company in future periods) | • | Overall financial performance of the Company, including balance sheet growth (assets), core return on tangible common equity, core earnings per share, credit related metrics, and relative TSR | • | Demonstrated commitment to the Company’s core values: | |||||||||
| |
- - - - - |
|
Leadership ability; Teamwork; Client focus; Shareholder focus; and Ability to attract, retain, and develop talent. | |||||||||||
| • | Performance of the NEO’s department or functional unit | |||||||||||||
| • | Level of responsibility | |||||||||||||
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Compensation Discussion and Analysis
During 2018, the Compensation Committee worked with the Committee’s independent compensation consultants to review and define an appropriate peer group of publicly traded commercial bank holding companies. As a result of this review and selection process, the peer group for 2018 was the same group used for 2017 and included the following 19 bank holding companies:
| Dollars in billions | ||||||||||||
| Bank Holding Company | Total Assets At 12/31/18 |
Bank Holding Company | Total Assets At 12/31/18 | |||||||||
| Associated Banc-Corp |
$ | 33.6 | PacWest Bancorp | $ | 25.7 | |||||||
| Bank of the Ozarks |
$ | 22.4 | People’s United Financial, Inc. | $ | 47.9 | |||||||
| BankUnited, Inc. |
$ | 32.2 | Prosperity Bancshares, Inc. | $ | 22.7 | |||||||
| Commerce Bancshares, Inc. |
$ | 25.5 | Synovus Financial Corporation | $ | 32.7 | |||||||
| Cullen/Frost Bankers, Inc. |
$ | 32.3 | Texas Capital Bancshares, Inc. | $ | 28.3 | |||||||
| East West Bancorp, Inc. |
$ | 41.0 | Umpqua Holdings Corporation | $ | 26.9 | |||||||
| First Horizon National Corporation |
$ | 40.8 | Valley National Bancorp | $ | 31.9 | |||||||
| F.N.B Corporation |
$ | 33.1 | Webster Financial Corporation | $ | 27.6 | |||||||
| Hancock Whitney Corporation |
$ | 28.2 | Wintrust Financial Corporation | $ | 31.2 | |||||||
| Investors Bancorp, Inc. |
$ | 26.2 | ||||||||||
| Peer Group Average |
$ | 31.1 | ||||||||||
| IBERIABANK Corporation |
$ | 30.8 | ||||||||||
Source: S&P Global Intelligence
In addition, the Compensation Committee reviewed compensation survey data for national commercial banking companies as provided by the independent compensation consultant. All of this national survey data was size-adjusted to reflect commercial banks with approximately $30 billion in assets, which was the approximate size of the Company at the time of the compensation review. This national industry perspective provides the Compensation Committee with both a broader view of the executive labor market and additional context from which to evaluate the competitiveness of the Company’s compensation program.
EXECUTIVE COMPENSATION PROGRAM ELEMENTS
The purpose and key characteristics of each element of our 2018 executive compensation program are summarized below:
| Element | Purpose | Key Characteristics | ||
| Base Salary |
Represents each NEO’s base level of responsibility, leadership, tenure, qualifications, and contribution to the success and profitability of the Company and the competitive marketplace for executive talent specific to our industry. | Fixed compensation that is reviewed annually and adjusted if and when appropriate. | ||
| Annual Incentive Awards |
Motivates NEOs to achieve our short-term business objectives that drive long-term performance while providing flexibility to respond to opportunities and changing market conditions. | Variable performance-based annual cash award. Awards are based on achieving pre-established performance goals. | ||
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Compensation Discussion and Analysis
| Element | Purpose | Key Characteristics | ||
| Performance-Based Restricted Share units (“RSUs”) |
Motivates NEOs to achieve our business objectives by tying incentives to our financial and key operational metrics over the performance period while continuing to reinforce the link between the interests of our NEOs and our shareholders. | Variable performance-based long-term award. The number of units earned is based on the achievement over a three year period of absolute ROTCE goals, coupled with ROTCE performance against banks in the KBW Regional Bank Index. The ultimate number of units may be calculated by applying an adjustment of +/- 25% based on TSR performance relative to the peer group. | ||
| Restricted Stock |
Motivates NEOs to achieve our business objectives by tying incentives to the performance of our common stock over the long-term; reinforces the link between the interests of our NEOs and our shareholders; motivates our NEOs to remain with the Company. | Long-term restricted stock award with a ratable vesting period over three years. The ultimate value realized varies with our common stock price. | ||
| Stock Options |
Motivates NEOs to achieve our business objectives by tying incentives to the appreciation of our common stock over the long term; reinforces the link between the interests of our NEOs and our shareholders. | Long-term option award with an exercise price equal to the fair market value on the date of grant and a ratable vesting period over three years; the ultimate value realized, if any, depends on the appreciation of our common stock price. | ||
| Other Compensation |
Provides benefits that promote employee health and work-life balance, which assists in attracting and retaining our NEOs. | Indirect compensation element consisting of health and welfare plans and minimal perquisites. | ||
| Post-Termination Compensation and Benefits | Agreements that attract and retain executives, promote continuity in management, and promote equitable separations between the Company and its executives. | Indirect compensation elements related to employment contracts as well as Change in Control Severance Agreements. | ||
Base Salary
We view annual base salary as an important component of compensation for attracting and retaining executive talent. Annual base salaries serve as the foundation for our employee pay structure. Executive base salaries are set after considering factors including external market competitiveness, individual performance, and internal equity. Prior to determining the base salary for each NEO, the Compensation Committee evaluates the results from the comprehensive total compensation study, along with competitive benchmarking discussed in this Compensation Discussion and Analysis.
After reviewing the total compensation targets for our NEOs against market peers, base salaries in 2018 for NEOs, including the CEO, were not increased and remained at 2017 levels.
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The below base salaries paid to each NEO in 2018 are disclosed in the Summary Compensation Table.
| Named Executive Officer | 2017 Base Salary | 2018 Base Salary | % Increase | ||||||||||||
| Daryl G. Byrd |
$ | 1,125,000 | $ | 1,125,000 | 0.0% | ||||||||||
| Anthony J. Restel |
$ | 575,000 | $ | 575,000 | 0.0% | ||||||||||
| Fernando Perez-Hickman |
$ | 650,000 | $ | 650,000 | 0.0% | ||||||||||
| Michael J. Brown |
$ | 650,000 | $ | 650,000 | 0.0% | ||||||||||
| Jefferson G. Parker |
$ | 518,000 | $ | 518,000 | 0.0% | ||||||||||
Annual Incentive Awards
The annual incentive award program focuses executive officers on key operating drivers of long-term success and strikes a balance between profitable growth and credit quality. The Compensation Committee approves specific targets for each performance metric and evaluates performance against these targets. All executive officers have a target award opportunity, as well as a maximum award, that may be paid under the annual incentive award program.
During the first quarter of 2018, the Compensation Committee established the target percentage of base salary for each of the NEOs. The Committee used the 2018 base salary in calculating the annual incentive award payments. The following chart shows the range of annual incentive award opportunities expressed as a percentage of base salary for the NEO.
| Target Bonus Opportunity | ||||||||
| Named Executive Officer | % of Salary | $ | ||||||
| Daryl G. Byrd |
100% | $ | 1,125,000 | |||||
| Anthony J. Restel |
75% | $ | 431,250 | |||||
| Fernando Perez-Hickman |
75% | $ | 487,500 | |||||
| Michael J. Brown |
75% | $ | 487,500 | |||||
| Jefferson G. Parker |
75% | $ | 388,500 | |||||
The following formula was used to calculate the payment that could be awarded to a NEO under the 2018 annual incentive award program:
Base Salary x Target Percentage of Base Salary x Total Weighted Performance Factor (0 - 200%)
For 2018, the Compensation Committee established the following metrics as the basis for the determination of payouts, if any, under the annual incentive plan. These financial metrics were selected to provide a holistic evaluation of Company performance with an emphasis on profitability, but not at the expense of growth or asset quality.
| Metric | Weighting | |||
| Core Earnings |
50% | |||
| Annual Net Charge Offs to Average Loans |
25% | |||
| Legacy Non-performing Assets/Total Assets |
25% | |||
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Compensation Discussion and Analysis
Annual Incentive Results for 2018
| Core Earnings 2018* |
Annual Net Charge Offs to Average Loans |
Legacy Non- Performing Assets / Total Assets ** |
Annual Incentive Award *** |
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| Target |
$ | 6.34 | 0.15% | 0.60% | ||||||||||||
| Weighting |
50% | 25% | 25% | |||||||||||||
| Performance to Target **** |
156% | 100% | 139% | |||||||||||||
| Total Weighted Performance |
78% | 25% | 35% | 137.51% | ||||||||||||
| * | Excludes special items as detailed in IBERIABANK Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018. |
| ** | Legacy loans are defined as loans that were originated directly or otherwise underwritten by the Company. Non-performing assets consist of non-accruing loans, accruing loans 90 days or more past due, and other real estate owned, including repossessed assets. |
| *** | Annual Incentive Award capped at 200% of target for each. |
| **** | Represents actual performance compared to a pre-determined range of acceptable outcomes approved by the Compensation Committee. |
Based on the core performance of the Company relative to the targets established for 2018, our NEO Total Weighted Performance Factor was 137.51%. The Compensation Committee reviewed the overall performance of the Company and concluded that no qualitative adjustments were required and that the Total Weighted Performance Factor fairly captured core performance for 2018. Accordingly, the Total Weighted Performance Factor used for the annual incentive payout was set at 137.51%. The Compensation Committee believes these incentive payments are aligned with the Company’s philosophy, market-based compensation practices, and the contribution of each NEO.
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Annual Incentive Payment Calculation for 2018
| Named Executive Officer | 2018 Annual Incentive Target |
Total Weighted Performance Factor |
2018 Annual Incentive Paid |
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| Daryl G. Byrd |
$ | 1,125,000 | 137.51% | $ | 1,546,990 | |||||
| Anthony J. Restel |
$ | 431,250 | 137.51% | $ | 593,013 | |||||
| Fernando Perez-Hickman |
$ | 487,500 | 137.51% | $ | 670,362 | |||||
| Michael J. Brown |
$ | 487,500 | 137.51% | $ | 670,362 | |||||
| Jefferson G. Parker |
$ | 388,500 | 137.51% | $ | 534,227 | |||||
2018 Long-Term Incentive (LTI) Plan
| Type of LTI | Vesting Time Frame | Performance Metrics | Percent of Total LTI Award Value |
|||||
| Performance-based RSUs |
3 Years - cliff vesting | Core ROTCE; Relative TSR | 60 | % | ||||
| Restricted Stock |
3 Years - 33% per year | None | 30 | % | ||||
| Stock Options |
3 Years - 33% per year | None | 10 | % | ||||
We consider long-term equity-based compensation to be critical to the alignment of executive compensation with shareholder value creation. Therefore, a market competitive, long-term equity-based incentive component is an integral part of our overall executive compensation program.
The total long-term incentive award in a given year is based on a multiple calculated as a percentage of base salary. The multiple is converted into an aggregate long-term incentive award. The following chart reflects the 2018 target award opportunities for each NEO:
| LTI Opportunity | ||||||||
| Named Executive Officer | % of salary | $ | ||||||
| Daryl G. Byrd |
210 | % | $ | 2,362,500 | ||||
| Anthony J. Restel |
120 | % | $ | 690,000 | ||||
| Fernando Perez-Hickman |
120 | % | $ | 780,000 | ||||
| Michael J. Brown |
120 | % | $ | 780,000 | ||||
| Jefferson G. Parker |
110 | % | $ | 569,800 | ||||
Target long-term incentive opportunities are established based on competitive market practices. The fair value of 2018 long-term incentive awards is reflected in the Summary Compensation Table. In 2018, our long-term equity incentive program consisted of the following components:
| • | Performance-based RSUs, which measure 60% of LTI award: Since 2016, a majority of the annual LTI award has been delivered via performance-based RSUs which measure three year performance against a combination of internally established ROTCE goals and our ROTCE relative to the KBW Regional Bank Index, as measured through the use of a matrix, and relative TSR performance. |
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| • | The Committee determined that the use of a matrix, measuring a combination of relative and absolute performance goals, addressed many issues associated with long-term performance plans. By establishing absolute goals, coupled with performance against banks in the KBW Regional Bank Index, a matrix mitigates some of the challenges associated with setting precise long-term goals in an uncertain economic environment and avoids the “best of the worst” outcome that is possible with the exclusive use of relative measurement. The matrix developed to measure ROTCE performance over the three-year-period spanning from January 1, 2018 through December 31, 2020 is presented below: |
| • | The column headings “A%”, “B%”, “C%”, and “D%” correspond to specific, absolute ROTCE targets set by the Committee based on the Company’s confidential business plan for the three-year performance period. Because these targets are based on the Company’s non-public business plan and may be misinterpreted as earnings guidance, the Company will not publicly disclose the actual target levels until the completion of the performance period. No payouts can be made unless the minimum threshold level of absolute ROTCE performance is achieved. |
| • | The calculated payout earned based on ROTCE performance outlined above, if any, can be modified by TSR performance relative to the peer group as follows: |
| TSR Percentile Rank (relative to KBW Regional Index)
|
Payout Adjustment
| |
|
Above 75th percentile |
+25% | |
| Between 25th and 75th percentile |
No adjustment | |
| Below 25th percentile |
-25% |
| • | Performance-based RSUs are eligible to receive dividends at the end of the performance period on the actual shares earned. Any shares earned will be determined in March 2020. |
| • | Stock Options, which measure 10% of LTI award: Stock options reward NEOs for increasing the market price above the exercise price. We maintain a policy against repricing stock options without shareholder approval. Stock options awarded to the NEOs during 2018 are detailed in the Grants of Plan-Based Awards table in the Executive Compensation section. |
| • | Restricted Stock, which measure 30% of LTI award: Restricted shares are awarded subject to transfer and vesting restrictions. Restricted share awards are intended to build stock ownership and foster executive retention. All of these restricted share awards have dividend and voting rights. Restricted shares awarded to the NEOs during 2018 are detailed in the Grants of Plan-Based Awards table in the Executive Compensation section. |
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2016-2018 Performance-based RSUs
During 2016, the NEOs received performance-based RSUs that are earned in shares based on meeting three-year absolute ROTCE goals, coupled with ROTCE performance against banks in the KBW Regional Bank Index. The final payout percentage for these awards was 99.3% of the target grant, as illustrated in the table below:
| TSR Percentile Rank (relative to KBW Regional Index)
|
Payout Adjustment
|
Muliplier
|
| |||
|
At or Above the 75th percentile |
+25% | 125% | ||||
| Between the 25th and 75th percentile |
No adjustment | 100% | ||||
| At or Below the 25th percentile |
-25% | 75% |
On March 1, 2019, the NEO’s cliff-vested in 99.3% of their performance-based RSU grant, settled in shares, for the 2016-2018 performance period. The calculation required no adjustment resulting from the TSR Modifier.
Other Benefits and Limited Perquisites
We provide our NEOs with a few perquisites, including club memberships, an annual physical examination, an automobile allowance, social dues, security alarm services, and corporate aircraft flight benefits. We also provide our NEOs a non-qualified deferred compensation plan and individual long-term disability insurance coverage.
Acknowledging our expanded footprint and desire to achieve greater travel efficiencies, the Company acquired a corporate aircraft in 2014. Personal use of the corporate aircraft is limited. However, any personal use will trigger imputed income to the NEO, calculated according to the IRS guidelines.
Personal use of the corporate aircraft is included under “Other Compensation” in the Summary Compensation Table.
Post Termination and Other Employment Arrangements
The Company provides benefits to our NEOs upon certain terminations of employment from the Company. These benefits are in addition to the benefits to which the executives would be entitled upon a termination of employment generally (i.e., vested retirement benefits accrued as of the date of termination, stock awards that have vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA). The incremental benefits payable to the executives are described below.
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Compensation Discussion and Analysis
Daryl G. Byrd—President and CEO
The Company has a three-year employment agreement with our President and CEO, Daryl G. Byrd, that automatically renews for an additional year on each anniversary of the agreement unless not earlier than 90 days before the anniversary, the Company gives notice that it will not be renewed. The purpose of this employment agreement is to help retain Mr. Byrd and to define severance benefits for various types of employment terminations. In addition to change in control payments consistent with those of the other NEOs except Mr. Perez-Hickman, Mr. Byrd’s employment agreement requires payment of compensation and/or benefits under various other termination of employment situations. Under the terms of this agreement, if Mr. Byrd’s employment is terminated other than for Cause (as defined), disability, retirement, or death, or if Mr. Byrd terminates his employment for Good Reason (as defined), then he would be entitled to severance benefits. Under this termination, he would be entitled to cash severance payments equal to the greater of one year’s base salary or his base salary for the remaining term of the agreement.
In the event that Mr. Byrd’s employment is terminated for disability, we would provide continued medical insurance for his benefit and the benefit of his spouse and minor children for the remaining term of the agreement. In the event of Mr. Byrd’s death during the term of the agreement, the Company would continue to provide medical insurance for his spouse and minor children for the remaining term. Also, in the event of his death, Mr. Byrd’s spouse, estate, legal representative, or named beneficiaries would be entitled to receive his annual compensation (including base salary and any discretionary cash bonus the Compensation Committee would then deem appropriate) for 12 months from his date of death.
If Mr. Byrd terminates his employment within 30 days of a Change in Control (as defined), or within 90 days of an event constituting Good Reason occurring within three years of a Change of Control, or within 30 days of the first anniversary of a Change in Control, or if the company terminates his employment without Cause within three years of a Change of Control, then he would be entitled to receive either the greater of his salary for the remaining term of the agreement, twice his salary, or Code Section 280G (“280G Maximum”) defined generally as 2.99 times his average compensation over the previous five years. If any payments to be made under the agreement are deemed to constitute “excess parachute payments,” and therefore are subject to an excise tax under Section 4999 of the Code, the Company would pay him the amount of the excise tax plus an amount equal to any additional federal, state, or local taxes that may result because of such additional payment. In addition to the cash severance benefits described, Mr. Byrd would be entitled to a continuation of benefits similar to those he was receiving at the time of such termination for the period otherwise remaining under the term of the agreement or until he obtains full-time employment with another employer, whichever occurs first. Additional details concerning these benefits can be found under the “Potential Payments Upon Termination or Change in Control” heading.
Fernando Perez-Hickman—Vice Chairman and Director of Corporate Strategy
Commencing as of the closing date of the Sabadell United acquisition, IBERIABANK entered into a 36-month employment agreement with Fernando Perez-Hickman, our Vice Chairman and Director of Corporate Strategy. The agreement may be renewed by Mr. Perez-Hickman for an additional 24 months (the “Renewal Term”). Under the terms of the employment contract Mr. Perez-Hickman received a retention bonus of $1,250,000, payable in increments of $750,000 at the execution of the agreement, and $250,000 due on each of the first and second anniversaries of the first payment if he is still employed at IBERIABANK, except as otherwise provided in the agreement. In addition, under the terms of the employment contract Mr. Perez-Hickman received a sign-on award of 40,000 shares of restricted stock. If Mr. Perez-Hickman elects to extend the term of the contract for an additional two years, he will receive a renewal award of 20,000 shares of restricted stock, which shall vest on the fourth and fifth anniversaries of the Sabadell United closing. The purpose of this employment agreement is to help retain Mr. Perez-Hickman and to define severance benefits for various types of employment termination. The employment agreement requires payment of compensation and/or benefits under various terminations of employment situations.
In connection with the closing, Mr. Perez-Hickman and IBERIABANK agreed that the Sabadell United acquisition constituted a change in control pursuant to his employment agreement with Sabadell United, entitling him to receive $3.6 million if he resigned following the closing. The parties agreed that in lieu of, and in full satisfaction of, his right to
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receive the severance payment, IBERIABANK would contribute on his behalf an equal amount into a Deferred Compensation Account under its Executive Nonqualified Excess Plan. The terms and conditions of the contribution are governed by the Plan, but the contribution is fully vested.
If Mr. Perez-Hickman’s employment is terminated with or without Just Cause (as defined), he will be bound by certain Restrictive Covenants (as defined, including non-competition, non-solicitation, and non-recruitment), and he will be entitled to the following severance benefits: the remaining unpaid portion of his Retention Bonus of $1,250,000 and an Annual Bonus with a target amount equal to 75% of Base Salary, but only if terminated for Just Cause. If without Just Cause, he will also receive his Base Salary of $650,000 per annum for 24 months from the date of termination and awards of restricted stock and long-term incentive awards would vest. If Mr. Perez-Hickman voluntarily resigns with Good Reason (as defined), he will be bound by the Restrictive Covenants and entitled to receive: the remaining unpaid portion of his Retention Bonus; the Annual Bonus; and his Base Salary for 24 months. In addition, unvested awards will vest. If Mr. Perez-Hickman resigns without Good Reason, he may be entitled to receive the remaining unpaid portion of his Retention Bonus, which would be subject to certain forfeiture repayment requirements, and, if due and payable on the resignation date, the Annual Bonus; unvested stock awards will be forfeited. Upon Mr. Perez-Hickman’s death, his estate would be entitled to receive: the remaining unpaid portion of his Retention Bonus and the Annual Bonus payable for 2017 and 2018; 200% of his Base Salary; and unvested stock awards. These amounts may be payable from life insurance proceeds of a policy, the costs of which are to be paid by IBERIABANK. In the event of Mr. Perez-Hickman’s disability (as defined), he would be bound by the Restrictive Covenants, and be entitled to receive the remaining unpaid portion of his Retention Bonus and the Annual Bonus, and all unvested awards and the Renewal Award, if applicable, would vest.
The Change in Control Severance Agreement for Mr. Perez-Hickman provides for severance pay and benefits in the event if within three months prior or two years after a Change in Control Mr. Perez-Hickman resigns for Good Reason, as defined, or is terminated by the Company or its successor without Just Cause, as defined. The severance payment is equal to a lump sum cash payment in an amount equal to the sum of a pro rata bonus (unless entitled to a guarantee bonus payment) in an amount determined by multiplying (1) his target bonus for the year of termination or, the average of the annual bonuses awarded, if he does not have a target bonus, for the three fiscal years immediately preceding the date of termination; provided, however, that if he is not employed during each of the three most recently completed fiscal years, then the amount shall be the average of the annual bonuses awarded to him for each fiscal year he was eligible to receive a bonus, by (2) the fraction obtained by dividing the number of days in the year through the date of termination by 365, plus an amount equal to 2.5 times the sum of (x) his base salary in effect at termination and (y) a bonus amount determined as follows in the stated order of priority: (A) if applicable, his guarantee bonus, (B) if not entitled to a guarantee bonus, the target bonus for the year, (C) if he does not have a target bonus, the average of the annual bonuses awarded to him for the three most recently completed fiscal years, or (D) that if he is not employed during each of the three most recently completed fiscal years, then the amount shall be the average of the annual bonuses awarded to him for each fiscal year he was eligible to receive a bonus. In addition, he will receive a lump sum cash payment in an amount equal to the sum of the aggregate monthly premium that would be paid by him and the Company to obtain group health plan coverage plus the aggregate monthly premium that would be paid by him and the Company to obtain group term life insurance, multiplied by 36, less applicable withholding taxes.
Mr. Perez-Hickman’s Change in Control severance agreement does not provide for a Section 280(g) gross up payment. The agreement stipulates that in the event severance benefits are subject to the excise tax under Code Section 4999, the amount payable to him would be reduced to the 280G Maximum if the reduction would result in him receiving a greater after-tax amount.
Change in Control Severance Agreements With Other Named Executive Officers
We have entered into Change in Control Severance Agreements with members of senior management, including each of our NEOs other than Mr. Byrd. The agreements for Mr. Restel, Mr. Brown, and Mr. Parker provide for severance pay and benefits to the individuals upon voluntary resignation within 30 days after a Change in Control of IBERIABANK Corporation, as defined, or if within three years of a Change in Control the individual resigns for Good Reason, as defined, or is terminated by the Company or its successor without Just Cause, as defined. The severance payment is equal to 100% of each individual’s 280G Maximum. In addition, each will be entitled to continued medical and life insurance benefits at the Company’s expense for 39 months following termination of employment. We will also make the individual
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whole for any excise tax imposed by the Internal Revenue Service with respect to any payments under the agreement. Each of these agreements was amended in 2008 to comply with the deferred compensation requirements of Code Section 409A.
OTHER COMPENSATION PROGRAM ASPECTS
Executive Stock Ownership Guidelines
We believe it is important for our NEOs and other senior executive officers to be significant shareholders so that their financial interests are aligned with our other shareholders. To foster executive stock ownership, we maintain executive stock ownership guidelines. We believe that these ownership guidelines, as well as our total long-term incentive program, have been effective in building an ownership culture. Thus, the financial interests of our executive leadership team are directly aligned with other shareholders. These ownership guidelines are stated as a multiple of base salary. NEOs have five years from the date the guideline applies to meet the target ownership level. The table below summarizes the share guidelines for NEOs expressed as a multiple of current base salary.
| Named Executive Officer | 2018 Ownership Guideline Multiple of Salary |
|||
| Daryl G. Byrd |
5x Base Salary | |||
| Anthony J. Restel |
3x Base Salary | |||
| Fernando Perez-Hickman |
3x Base Salary | |||
| Michael J. Brown |
3x Base Salary | |||
| Jefferson G. Parker |
3x Base Salary | |||
Currently, all NEOs are in compliance with the required stock ownership guidelines.
The Stock Ownership Guidelines are part of the IBERIABANK Corporation Corporate Governance Guidelines. A link to these guidelines is on the “Investor Relations” portion of our website at: http://www.iberiabank.com.
Equity Grant Practices
The Compensation Committee generally grants equity awards in February of each year. The Compensation Committee does not have any programs, plans, or practices of timing these awards in coordination with the release of material non-public information. We have never backdated, re-priced, or spring-loaded any of our equity awards.
Anti-Hedging Policy and Trading Restrictions
Our current policy limits the timing and types of transactions in our securities by “covered persons,” defined to include directors and officers of the Company and its subsidiaries and members of their immediate families. Among other restrictions, the policy:
| • | Allows covered persons to trade Company securities only during window periods following earnings releases and, as to a “pre-approval group” of covered persons (generally, Section 16 filers), only after they have pre-cleared transactions; |
| • | Prohibits covered persons from short-selling Company securities; |
| • | Prohibits covered person transactions in puts, calls, or other derivative securities regarding the Company; and |
| • | Prohibits covered persons from engaging in hedging or monetization transactions that involve Company securities. |
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Anti-Pledging Policy
In March 2016, the Board of Directors amended the Company’s insider trading policy to prohibit directors, executive officers, and other persons subject to such policy, subsequent to the date of adoption, from holding shares in margin accounts or pledging shares as collateral for a loan. These restrictions will not apply to shares of Company common stock held in a margin account or pledged as collateral for a loan prior to the date of adoption of amendments to such policy. Under certain limited circumstances, an exception to the prohibition on pledged common stock may be granted.
Compensation Recovery Policy
The Company maintains a written Compensation Recovery Policy. This policy applies to each of the NEOs and permits the recovery of incentive-based compensation paid to an officer if: (1) incentive-based compensation, bonuses, or equity awards were paid or vested during fiscal periods based on materially inaccurate financial statements, and (2) that officer engaged in fraud, willful misconduct, or a violation of Company policy that caused or otherwise contributed to the need for a material restatement of the Company’s financial results. The Board, considering the best interests of shareholders and the recommendation of the Compensation Committee, has sole discretion to determine whether the applicable standard of conduct has been met and whether any such recovery should be pursued.
The Compensation Recovery Policy is part of the IBERIABANK Corporation Corporate Governance Guidelines. A link to the Corporate Governance Guidelines is on the “Investor Relations” portion of our website at: http://www.iberiabank.com.
Risk Management Considerations
The Compensation Committee reviews risks and rewards associated with our compensation programs, which include features that we believe mitigate risks without reducing incentives. Our compensation programs are intended to both encourage and reward prudent business judgment and appropriate long-term risk-taking. The Compensation Committee seeks to identify and remediate risk-taking incentives that may exist in these programs. The Chairman of the Board Risk Committee is also a member of the Compensation Committee.
Indemnification Agreements
The Company has indemnification agreements with Daryl G. Byrd and Michael J. Brown that provide for indemnification and advancement of expenses to the fullest extent permitted by law with respect to pending or threatened claims against them in their capacities as our officers. Following a Change in Control (as defined), all determinations regarding a right to indemnity and advancement of expenses are to be made by an independent legal counsel. In the event of a potential Change in Control, we must create a trust for the benefit of the indemnified executive officers, which upon a Change in Control may not be revoked or the principal thereof invaded without the indemnities’ written consent. While not requiring the maintenance of directors’ and officers’ liability insurance, the indemnification agreements require that the indemnities be provided with maximum coverage if there is such insurance.
Section 162(m)
Section 162(m) of the Code limits to $1 million a public company’s annual tax deduction for compensation paid to certain executive officers. Prior to the enactment of the Tax Act in December 2017, Section 162(m) provided an exemption from this deduction limitation for compensation that qualified as “performance-based compensation”. However, among other changes to Section 162(m), the exemption for performance-based compensation was repealed, effective for taxable years beginning after December 31, 2017, subject to transition relief for certain arrangements in place as of November 2, 2017. The Compensation Committee’s policy is to structure compensation awards that will be deductible, where doing so will further the purposes of our executive compensation programs. The Committee also considers it important to retain flexibility, to design compensation programs that recognize a full range of criteria important to our success, even where compensation payable under the programs may not be fully deductible. The elimination of the performance-based exemption from Section 162(m)‘s deduction limit has not altered the Committee’s commitment to a pay-for-performance executive compensation program. The Committee believes that the Section 162(m) related tax deduction is only one of
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several relevant considerations in setting compensation. The Committee also believes that the Section 162(m) tax deduction limitation should not be permitted to compromise its ability to design and maintain executive compensation arrangements that, among other things, are intended to attract, retain, and motivate talented, high-performing leaders. Therefore, it is not anticipated that the changes to Section 162(m) will significantly impact the design of our compensation program going forward.
The Committee will give careful consideration to the possible impact of other tax and accounting treatments of particular forms of consideration to NEOs, other executives, and other Company associates.
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The Compensation Committee of the Board of Directors of the Company is composed entirely of non-employee directors, each of whom has been determined in the Board’s business judgment to be independent. The Compensation Committee is responsible for oversight and review of the Company’s compensation and benefit plans.
The Compensation Discussion and Analysis is management’s report on the Company’s compensation programs and, among other things, describes material elements of compensation paid to the President and Chief Executive Officer and the other Named Executive Officers. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis as required by Item 402(b) of Regulation S-K with the management of the Company. Based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
THE COMPENSATION COMMITTEE:
Rick E. Maples, Chairman
John N. Casbon
Angus R. Cooper, II
William H. Fenstermaker
E. Stewart Shea, III
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Summary Compensation Table
The following table summarizes the compensation earned or awarded for services rendered in all capacities by the Company’s Chief Executive Officer, Chief Financial Officer, and by its three other most highly compensated Named Executive Officers for the years indicated.
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ||||||||||||||||||||||||
| Name and Principal Position |
Year | Salary(1) | Bonus(2) | Stock Award(s)(3) |
Option Award(s)(3) |
Non-Equity Plan |
All Other Compensation(5) |
Total | ||||||||||||||||||||||||
| Daryl G. Byrd | 2018 | $ | 1,125,000 | $ | - | $ | 2,126,267 | $ | 238,203 | $ | 1,546,990 | $ | 251,309 | $ | 5,287,769 | |||||||||||||||||
| President and CEO |
2017 | $ | 1,119,260 | $ | - | $ | 4,963,054 | $ | 207,368 | $ | 1,139,197 | $ | 248,761 | $ | 7,677,640 | |||||||||||||||||
| 2016 | $ | 1,095,150 | $ | - | $ | 1,971,275 | $ | 277,033 | $ | 860,245 | $ | 238,165 | $ | 4,441,868 | ||||||||||||||||||
| Anthony J. Restel | 2018 | $ | 575,000 | $ | - | $ | 620,939 | $ | 69,566 | $ | 593,013 | $ | 39,563 | $ | 1,898,081 | |||||||||||||||||
| Vice Chairman and CFO |
2017 | $ | 565,385 | $ | - | $ | 2,187,977 | $ | 55,688 | $ | 436,692 | $ | 27,682 | $ | 3,273,424 | |||||||||||||||||
| 2016 | $ | 525,000 | $ | - | $ | 519,761 | $ | 73,042 | $ | 343,658 | $ | 20,828 | $ | 1,482,289 | ||||||||||||||||||
| Fernando Perez-Hickman | 2018 | $ | 650,000 | $ | 250,000 | $ | 701,988 | $ | 78,636 | $ | 670,362 | $ | 73,795 | $ | 2,424,781 | |||||||||||||||||
| Vice Chairman, Director of Corporate Strategy |
2017 | $ | 247,500 | $ | 750,000 | $ | 3,943,974 | $ | 82,413 | $ | 500,000 | $ | 3,621,736 | $ | 9,145,623 | |||||||||||||||||
| Michael J. Brown | 2018 | $ | 650,000 | $ | - | $ | 701,988 | $ | 78,636 | $ | 670,362 | $ | 61,204 | $ | 2,162,190 | |||||||||||||||||
| Vice Chairman and COO |
2017 | $ | 645,192 | $ | - | $ | 2,296,041 | $ | 65,830 | $ | 493,652 | $ | 44,236 | $ | 3,544,951 | |||||||||||||||||
| 2016 | $ | 625,000 | $ | - | $ | 680,020 | $ | 94,862 | $ | 409,117 | $ | 37,543 | $ | 1,846,542 | ||||||||||||||||||
| Jefferson G. Parker | 2018 | $ | 518,000 | $ | - | $ | 512,846 | $ | 57,448 | $ | 534,227 | $ | 38,423 | $ | 1,660,944 | |||||||||||||||||
| Vice Chairman and Director of Capital Markets, Energy Lending, and Investor Relations |
|
2017
2016 |
|
$
$ |
514,539
500,000 |
|
$
$ |
-
- |
|
$
$ |
1,308,093
494,997 |
|
$
$ |
48,281
69,569 |
|
$
$ |
393,403
327,293 |
|
$
$ |
38,325
30,201 |
|
$
$ |
2,302,641
1,422,060 |
| ||||||||
| (1) | Amounts in column (c) include salaries deferred under the Company’s Non-Qualified Deferred Compensation plan in 2018, 2017, and 2016. For Mr. Restel the salaries deferred includes $85,000, $75,385, and $35,000 in 2018, 2017, and 2016, respectively. For Mr. Parker the salaries deferred include $103,600, $0, and $30,000 in 2018, 2017, and 2016, respectively. |
| (2) | Amounts in column (d) include retention bonus received in 2018 and 2017 for Mr. Perez-Hickman. |
| (3) | The amounts shown in columns (e) and (f) reflect the aggregate grant date value awarded and computed in accordance with FASB ASC Topic 718 for stock-based and option awards for each of the Named Executive Officers for the years ended December 31, 2018, 2017, and 2016. The assumptions used for the calculations can be found at Note 17 to our audited financial statements in the Company’s Annual Report on Form 10-K for the years ended December 31, 2018 and 2017 and Note 18 to our audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Pursuant to SEC rules, we disregarded the estimate of forfeitures related to service-based vesting conditions. |
| The amounts shown in column (e) reflect the grant date values of certain awards that are subject to performance conditions. Pursuant to SEC rules, the grant date values shown above are reported based upon the probable outcome of such conditions as of the date of grant. The table below shows the value of such awards at the grant date assuming that the highest level of performance is achieved. |
| (4) | Amounts in column (g) include bonuses deferred under the Company’s Non-Qualified Deferred Compensation plan in 2018, 2017, and 2016. For Mr. Restel the amounts deferred include $59,301, $43,669, and $51,549 in 2018, 2017, and 2016, respectively. For Mr. Parker the amounts deferred include $106,845, $0, and $32,729 in 2018, 2017, and 2016, respectively. |
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Executive Compensation
| Name | Year | Maximum Stock Awards |
||||||
| Daryl G. Byrd |
2018 | $ | 4,252,576 | |||||
| 2017 | $ | 7,089,358 | ||||||
| 2016 | $ | 3,942,574 | ||||||
| Anthony J. Restel |
2018 | $ | 1,241,878 | |||||
| 2017 | $ | 2,754,993 | ||||||
| 2016 | $ | 1,039,522 | ||||||
| Fernando Perez-Hickman |
2018 | $ | 1,403,935 | |||||
| 2017 | $ | 4,645,948 | ||||||
| Michael J. Brown |
2018 | $ | 1,403,935 | |||||
| 2017 | $ | 2,971,040 | ||||||
| 2016 | $ | 1,355,042 | ||||||
| Jefferson G. Parker |
2018 | $ | 1,025,651 | |||||
| 2017 | $ | 1,806,927 | ||||||
| 2016 | $ | 989,970 | ||||||
| (5) |
ALL OTHER COMPENSATION IN 2018
| Perquisites and Other Personal Benefits(i) |
Company Contributions to 401(k) Plan |
Company Contribution to Non-Qualified Deferred Compensation Plan |
Tax Reimbursement |
Total | ||||||||||||||||
| Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
| Daryl G. Byrd |
87,299 | 5,500 | 150,000 | 8,510 | 251,309 | |||||||||||||||
| Anthony J. Restel |
34,063 | 5,500 | - | - | 39,563 | |||||||||||||||
| Fernando Perez-Hickman |
56,127 | 5,500 | - | 12,168 | 73,795 | |||||||||||||||
| Michael J. Brown |
55,210 | 5,500 | - | 494 | 61,204 | |||||||||||||||
| Jefferson G. Parker |
32,387 | 5,500 | - | 536 | 38,423 | |||||||||||||||
| (i) | For a description of perquisites relating to personal use of the corporate aircraft for NEOs, see “Other Benefits and Limited Perquisites” within the Compensation Discussion and Analysis section. Other perquisites and personal benefits whose incremental cost is included in the amounts shown consist of the following: long-term disability premiums, annual physical examinations, automobile allowances, personal use of the corporate aircraft, social dues, and security alarm expenses. Mr. Byrd’s perquisites and other personal benefits include security alarm costs of $29,830 in 2018. Mr. Perez-Hickman’s perquisites and other personal benefits includes auto allowance and social dues costs of $35,000 in 2018. Mr. Parker’s perquisites and other personal benefits include social dues of $26,898 in 2018. |
| We estimate the aggregate incremental cost of the Company aircraft to be equal to the average operating cost for the year (which includes items such as fuel, maintenance, landing fees, and other direct costs) based on the number of hours flown each year. Direct incremental costs for charter flights is the amount of the charter. |
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Executive Compensation
Grants of Plan-Based Awards
The following table provides information concerning grants of awards made to our NEOs during the year ended December 31, 2018.
The 2018 stock option grants, restricted stock, and restricted share unit awards to the NEOs were issued from our 2016 Stock Incentive Plan. Under this plan, equity-based awards vest on a “change-in-control” occurrence. Dividends are payable on all unvested restricted stock at the same rate paid on all other outstanding shares of our common stock. Dividend equivalent units are added to all unvested restricted share unit grants. In 2018, we declared dividends payable in the amount of $1.56 per share.
|
Estimated Future Payouts |
Estimated Future |
All Other Stock Awards: Number of Shares or Units of Stock (#)(3) |
All Other Option Awards: Number of Securities Underlying Options (#)(3) |
Exercise or Base Price of Option Awards ($) |
Grant Date Fair Value of Stock and Option Awards ($)(4) |
|||||||||||||||||||||||||||||||
| Name | Grant Date | Target ($)(1) |
Maximum ($)(1) |
Target (#)(2) |
Maximum (#)(2) |
|||||||||||||||||||||||||||||||
| Daryl G. Byrd | 2/22/2018 | - | - | 8,622 | - | - | $ | 708,728 | ||||||||||||||||||||||||||||
| 2/22/2018 | 17,505 | 43,763 | - | - | - | $ | 1,417,539 | |||||||||||||||||||||||||||||
| 2/22/2018 | - | - | - | 12,974 | $ | 82.20 | $ | 238,203 | ||||||||||||||||||||||||||||
| $ | 1,125,000 | $ | 2,250,000 | |||||||||||||||||||||||||||||||||
| Anthony J. Restel | ||||||||||||||||||||||||||||||||||||
| 2/22/2018 | - | - | 2,518 | - | - | $ | 206,980 | |||||||||||||||||||||||||||||
| 2/22/2018 | 5,112 | 12,780 | - | - | - | $ | 413,959 | |||||||||||||||||||||||||||||
| 2/22/2018 | - | - | - | 3,789 | $ | 82.20 | $ | 69,566 | ||||||||||||||||||||||||||||
| $ | 431,250 | $ | 862,500 | |||||||||||||||||||||||||||||||||
| Fernando Perez-Hickman | ||||||||||||||||||||||||||||||||||||
| 2/22/2018 | - | - | 2,847 | - | - | $ | 234,023 | |||||||||||||||||||||||||||||
| 2/22/2018 | 5,778 | 14,445 | - | - | - | $ | 467,965 | |||||||||||||||||||||||||||||
| 2/22/2018 | - | - | - | 4,283 | $ | 82.20 | $ | 78,636 | ||||||||||||||||||||||||||||
| $ | 487,500 | $ | 975,000 | |||||||||||||||||||||||||||||||||
| Michael J. Brown | ||||||||||||||||||||||||||||||||||||
| 2/22/2018 | - | - | 2,847 | - | - | $ | 234,023 | |||||||||||||||||||||||||||||
| 2/22/2018 | 5,778 | 14,445 | - | - | - | $ | 467,965 | |||||||||||||||||||||||||||||
| 2/22/2018 | - | - | - | 4,283 | $ | 82.20 | $ | 78,636 | ||||||||||||||||||||||||||||
| $ | 487,500 | $ | 975,000 | |||||||||||||||||||||||||||||||||
| Jefferson G. Parker | ||||||||||||||||||||||||||||||||||||
| 2/22/2018 | - | - | 2,080 | - | - | $ | 170,976 | |||||||||||||||||||||||||||||
| 2/22/2018 | 4,222 | 10,555 | - | - | - | $ | 341,870 | |||||||||||||||||||||||||||||
| 2/22/2018 | - | - | - | 3,129 | $ | 82.20 | $ | 57,448 | ||||||||||||||||||||||||||||
| $ | 388,500 | $ | 777,000 | |||||||||||||||||||||||||||||||||
| (1) | Amounts included in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards column reflect the range of possible annual cash incentive payouts for 2018 performance. The maximum individual award for participants in 2018 was 200% of the target award. At the end of each plan year, the Compensation Committee evaluates the overall performance against targets to determine annual cash awards, which are reflected in the 2018 Summary Compensation Table under the Non-Equity Incentive Plan Compensation column. |
| (2) | Restricted share units were issued under our 2016 Stock Incentive Plan. Following the end of the three-year performance period, but prior to March 1, 2021, the Compensation Committee will determine the percentage of the target award value that will vest, which will be between 0% and 250% of the target award value. Payout of the vested RSUs will be effective on March 1, 2021. Any remaining unvested RSUs will be immediately forfeited. The value of the shares on the grant date of each of the RSUs awarded on February 22, 2018 was $82.20 per share. |
| (3) | Restricted stock awards and stock option grants were issued under our 2016 Stock Incentive Plan and vest over three years in equal increments on the anniversaries of the date of grant. |
| (4) | For option awards, this represents the grant date fair value based on Black Scholes model valuation of $18.36 per share for grants on February 22, 2018. For restricted stock awards, the fair value is based on the grant date fair value of our common stock. |
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Table of Contents
Executive Compensation
In 2018, associates, including all current officers who are not executive officers, as a group were granted restricted stock and option awards totaling 205,198 shares under the 2016 Stock Incentive Plans. The weighted average option exercise price was $81.90 per share. All executive officers as a group were granted restricted stock and option awards totaling 65,179 shares under the 2016 Stock Incentive Plan. The weighted average option exercise price was $82.20 per share. The Company issued a total of 53,699 restricted share units under the 2016 Stock Incentive Plan to certain executive officers, including the named executive officers, in 2018. The Company also issued a total of 4,608 restricted share units under the 2016 Stock Incentive Plan to certain officers who are not executive officers in 2018.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth the outstanding equity based awards held by NEOs as of December 31, 2018:
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date |
Number of Shares Underlying Unexercised Options (#) Exercisable |
Number of Shares Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
Grant Date |
Number of Shares or Units That Have Not Vested (#) |
Market Value of Shares That Have Not Vested ($)(1) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) |
||||||||||||||||||||||||||||||||||
| Daryl G. Byrd |
12/29/09 | (2) | 27,500 | - | $ | 54.43 | 12/29/19 | 2/18/16 | (4) | 4,626 | $ | 297,359 | ||||||||||||||||||||||||||||||||
| 5/4/10 | (2) | 29,964 | - | $ | 60.10 | 5/4/20 | 2/18/16 | (5) | 29,299 | $ | 1,883,340 | |||||||||||||||||||||||||||||||||
| 3/10/11 | (2) | 23,585 | - | $ | 55.64 | 3/10/21 | 2/15/17 | (4) | 5,520 | $ | 354,826 | |||||||||||||||||||||||||||||||||
| 2/22/12 | (2) | 33,885 | - | $ | 52.33 | 2/22/22 | 2/15/17 | (5) | 17,118 | $ | 1,100,345 | |||||||||||||||||||||||||||||||||
| 2/19/13 | (2) | 11,312 | - | $ | 52.36 | 2/19/23 | 8/1/17 | (7) | 35,000 | $ | 2,249,800 | |||||||||||||||||||||||||||||||||
| 2/17/14 | (3) | 14,690 | - | $ | 65.37 | 2/17/24 | 2/22/18 | (4) | 8,622 | $ | 554,222 | |||||||||||||||||||||||||||||||||
| 2/20/15 | (3) | 15,940 | - | $ | 62.57 | 2/20/25 | 2/22/18 | (5) | 17,505 | $ | 1,125,221 | |||||||||||||||||||||||||||||||||
| 2/18/16 | (3) | 17,657 | 8,828 | $ | 47.35 | 2/18/26 | ||||||||||||||||||||||||||||||||||||||
| 2/15/17 | (3) | 3,702 | 7,405 | $ | 85.60 | 2/15/27 | ||||||||||||||||||||||||||||||||||||||
| 2/22/18 | (3) | - | 12,974 | $ | 82.20 | 2/22/28 | ||||||||||||||||||||||||||||||||||||||
| Anthony J. Restel |
3/10/11 | (2) | 3,515 | - | $ | 55.64 | 3/10/21 | 2/18/16 | (4) | 1,220 | $ | 78,422 | ||||||||||||||||||||||||||||||||
| 2/22/12 | (2) | 10,001 | - | $ | 52.33 | 2/22/22 | 2/18/16 | (5) | 7,726 | $ | 496,627 | |||||||||||||||||||||||||||||||||
| 2/19/13 | (2) | 3,409 | - | $ | 52.36 | 2/19/23 | 2/15/17 | (4) | 1,349 | $ | 86,714 | |||||||||||||||||||||||||||||||||
| 2/17/14 | (3) | 3,796 | - | $ | 65.37 | 2/17/24 | 2/15/17 | (5) | 4,185 | $ | 269,012 | |||||||||||||||||||||||||||||||||
| 2/20/15 | (3) | 4,119 | - | $ | 62.57 | 2/20/25 | 3/28/17 | (4) | 135 | $ | 8,678 | |||||||||||||||||||||||||||||||||
| 2/18/16 | (3) | 4,655 | 2,328 | $ | 47.35 | 2/18/26 | 3/28/17 | (5) | 421 | $ | 27,062 | |||||||||||||||||||||||||||||||||
| 2/15/17 | (3) | 905 | 1,810 | $ | 85.60 | 2/15/27 | 8/1/17 | (7) | 20,000 | $ | 1,285,600 | |||||||||||||||||||||||||||||||||
| 3/28/17 | (3) | 91 | 182 | $ | 77.40 | 3/28/27 | 2/22/18 | (4) | 2,518 | $ | 161,857 | |||||||||||||||||||||||||||||||||
| 2/22/18 | (3) | - | 3,789 | $ | 82.20 | 2/22/28 | 2/22/18 | (5) | 5,112 | $ | 328,599 | |||||||||||||||||||||||||||||||||
| Fernando |
8/1/17 | (3) | 1,364 | 2,728 | $ | 81.05 | 8/1/27 | 8/1/17 | (4) | 28,592 | $ | 1,837,894 | ||||||||||||||||||||||||||||||||
| 2/22/18 | (3) | - | 4,283 | $ | 82.20 | 2/22/28 | 8/1/17 | (5) | 5,916 | $ | 380,280 | |||||||||||||||||||||||||||||||||
| 2/22/18 | (4) | 2,847 | $ | 183,005 | ||||||||||||||||||||||||||||||||||||||||
| 2/22/18 | (5) | 5,778 | $ | 371,410 | ||||||||||||||||||||||||||||||||||||||||
| Michael J. Brown |
12/29/09 | (2) | 12,500 | - | $ | 54.43 | 12/29/19 | 2/18/16 | (4) | 1,584 | $ | 101,820 | ||||||||||||||||||||||||||||||||
| 5/4/10 | (2) | 11,493 | - | $ | 60.10 | 5/4/20 | 2/18/16 | (5) | 10,032 | $ | 644,857 | |||||||||||||||||||||||||||||||||
| 3/10/11 | (2) | 7,988 | - | $ | 55.64 | 3/10/21 | 2/15/17 | (4) | 1,753 | $ | 112,683 | |||||||||||||||||||||||||||||||||
| 2/22/12 | (2) | 13,502 | - | $ | 52.33 | 2/22/22 | 2/15/17 | (5) | 5,435 | $ | 349,362 | |||||||||||||||||||||||||||||||||
| 2/19/13 | (2) | 4,424 | - | $ | 52.36 | 2/19/23 | 8/1/17 | (7) | 20,000 | $ | 1,285,600 | |||||||||||||||||||||||||||||||||
| 2/17/14 | (3) | 5,113 | - | $ | 65.37 | 2/17/24 | 2/22/18 | (4) | 2,847 | $ | 183,005 | |||||||||||||||||||||||||||||||||
| 2/20/15 | (3) | 5,548 | - | $ | 62.57 | 2/20/25 | 2/22/18 | (5) | 5,778 | $ | 371,410 | |||||||||||||||||||||||||||||||||
| 2/18/16 | (3) | 6,046 | 3,023 | $ | 47.35 | 2/18/26 | ||||||||||||||||||||||||||||||||||||||
| 2/15/17 | (3) | 1,175 | 2,351 | $ | 85.60 | 2/15/27 | ||||||||||||||||||||||||||||||||||||||
| 2/22/18 | (3) | - | 4,283 | $ | 82.20 | 2/22/28 | ||||||||||||||||||||||||||||||||||||||
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2019 Proxy Statement 65 |
Table of Contents
Executive Compensation
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date |
Number of Shares Underlying Unexercised Options (#) Exercisable |
Number of Shares Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
Grant Date |
Number of Shares or Units That Have Not Vested (#) |
Market Value of Shares That Have Not Vested ($)(1) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) |
||||||||||||||||||||||||||||||||||
| Jefferson G. Parker |
9/17/09 | (6) | 10,000 | - | $ | 47.67 | 9/17/19 | 2/18/16 | (4) | 1,162 | $ | 74,693 | ||||||||||||||||||||||||||||||||
| 5/4/10 | (2) | 9,304 | - | $ | 60.10 | 5/4/20 | 2/18/16 | (5) | 7,356 | $ | 472,844 | |||||||||||||||||||||||||||||||||
| 3/10/11 | (2) | 5,858 | - | $ | 55.64 | 3/10/21 | 2/15/17 | (4) | 1,285 | $ | 82,600 | |||||||||||||||||||||||||||||||||
| 2/22/12 | (2) | 11,002 | - | $ | 52.33 | 2/22/22 | 2/15/17 | (5) | 3,985 | $ | 256,156 | |||||||||||||||||||||||||||||||||
| 2/19/13 | (2) | 3,571 | - | $ | 52.36 | 2/19/23 | 8/1/17 | (4) | 6,667 | $ | 428,555 | |||||||||||||||||||||||||||||||||
| 2/17/14 | (3) | 3,757 | - | $ | 65.37 | 2/17/24 | 2/22/18 | (4) | 2,080 | $ | 133,702 | |||||||||||||||||||||||||||||||||
| 2/20/15 | (3) | 4,077 | - | $ | 62.57 | 2/20/25 | 2/22/18 | (5) | 4,222 | $ | 271,390 | |||||||||||||||||||||||||||||||||
| 2/18/16 | (3) | 4,434 | 2,217 | $ | 47.35 | 2/18/26 | ||||||||||||||||||||||||||||||||||||||
| 2/15/17 | (3) | 862 | 1,724 | $ | 85.60 | 2/15/27 | ||||||||||||||||||||||||||||||||||||||
| 2/22/18 | (3) | - | 3,129 | $ | 82.20 | 2/22/28 | ||||||||||||||||||||||||||||||||||||||
| (1) | The fair market value of the Company’s common stock at the end of the fiscal year was $64.28 per share. |
| (2) | Options will vest equally in one-fifth increments on the first five anniversaries of the date of grant. |
| (3) | Options will vest equally in one-third increments on the first three anniversaries of the date of grant. |
| (4) | Restricted stock awards will vest in one-third increments over a three-year period commencing with the first anniversary of the date of grant. |
| (5) | Following the end of the three-year performance period, but prior to March 1, the Compensation Committee will determine the percentage of the target award value of the restricted share units that will vest, which will be between 0% and 250% of the target award value. Payout of the vested RSUs will be effective on March 1 of the year following the three year performance. Any remaining unvested RSUs will be immediately forfeited. |
| (6) | Options will vest equally in one-seventh increments on the first seven anniversaries of the date of grant. |
| (7) | Restricted stock awards will vest upon the Compensation Committee’s determination that the Company has achieved its 2020 Strategic Goals on the third anniversary of the date of grant. |
Option Exercises and Stock Vested
The following table sets forth the amount realized by each Named Executive Officer as a result of the exercise of stock options and vesting of stock awards in 2018.
| Option Awards | Stock Awards | |||||||||||||||
| Name | Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($) |
||||||||||||
| Daryl G. Byrd |
- | $ | - | 23,191 | (1) | $ | 1,932,248 | (1) | ||||||||
| Anthony J. Restel |
- | $ | - | 6,349 | (2) | $ | 529,336 | (2) | ||||||||
| Fernando Perez-Hickman |
- | $ | - | 14,295 | $ | 1,202,924 | ||||||||||
| Michael J. Brown |
- | $ | - | 8,264 | (3) | $ | 688,754 | (3) | ||||||||
| Jefferson G. Parker |
- | $ | - | 9,635 | (4) | $ | 805,923 | (4) | ||||||||
| (1) | Includes 3,706 shares of phantom stock awards at a value of $312,388 and 1,794 performance units at a value of $144,214. |
| (2) | Includes 1,117 shares of phantom stock awards at a value of $94,176 and 463 performance units at a value of $37,237. |
| (3) | Includes 1,449 shares of phantom stock awards at a value of $122,157 and 625 performance units at a value of $50,212. |
| (4) | Includes 1,204 shares of phantom stock awards at a value of $101,526 and 458 performance units at a value of $36,848. |
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Executive Compensation
Non-Qualified Deferred Compensation
We offer directors and a select group of management and highly compensated key associates the right to participate in a Non-Qualified Deferred Compensation Plan. Participants may elect to defer up to 90% of their annual base salary or incentive compensation, including incentive bonuses, service bonuses, and commissions. The Plan allows for discretionary employer contributions. The investment options available under the Non-Qualified Deferred Compensation Plan are similar to those available under the Company’s 401(k) plan. Earnings are credited to the account based on the performance of the investment options selected. Participants vest immediately in their deferrals. As a general rule, payment terms of deferred amounts and investment options are determined by the participant during enrollment and are subject to a deferral of at least two years, except under certain qualifying events, including the participant’s separation from service, a change in control, an unforeseeable emergency, or death. Payment shall be made in a single lump sum or, in the event of a separation from service after reaching age 65, disability, or scheduled in-service distribution, in equal annual installments over the period specified by the participant, not to exceed five years. The following table shows certain information for Named Executive Officers under the Corporation’s Non-Qualified Deferred Compensation Plan. Messrs. Byrd, Restel, Perez-Hickman, and Parker are the Named Executive Officers currently participating in the Company’s Non-Qualified Deferred Compensation Plan.
| Name | Executive Contributions in Last Fiscal Year ($) |
Registrant Contribution in Last Fiscal Year ($) |
Aggregate Earnings in Last Fiscal Year ($) |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Balance at Last Fiscal Year End ($) |
|||||||||||||||
| Daryl G. Byrd |
312,388 | (1) | 150,000 | (4) | (127,396 | ) | - | 3,466,527 | ||||||||||||
| Anthony J. Restel |
128,669 | (2) | - | (74,821 | ) | - | 838,891 | |||||||||||||
| Fernando Perez-Hickman |
- | - | (293,293 | ) | - | 3,527,491 | ||||||||||||||
| Michael J. Brown |
- | - | - | - | - | |||||||||||||||
| Jefferson G. Parker |
103,600 | (3) | - | (44,199 | ) | - | 482,280 | |||||||||||||
| (1) | Mr. Byrd’s contribution includes $312,388 from vested phantom stock payments. |
| (2) | Mr. Restel’s contribution includes $85,000 of his 2018 base pay deferred and $43,669 of his bonus earned in 2017 as set forth in the “Summary Compensation Table.” |
| (3) | Mr. Parker’s contribution includes $103,600 of his 2018 base pay deferred. |
| (4) | Company contribution in 2018 attributable to 2017 service. The Company’s contribution to the Non-Qualified Deferred Compensation Plan attributable to 2018 service was made after December 31, 2018 and is not reflected in the aggregate year-end balance for Mr. Byrd. These amounts are included in the “All Other Compensation” column of the Summary Compensation Table. |
Equity Compensation Plan Information
The following table provides information concerning securities authorized for issuance under equity compensation plans, the weighted average price of such securities and the number of securities remaining available for future issuance, as of December 31, 2018.
| Equity Compensation Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted- average exercise price of outstanding options, warrants and rights (1) |
Number of securities remaining and available for future issuance (2) |
|||||||||
| Plans approved by shareholders |
1,414,699 | (3) | $ | 61.42 | 1,162,931 | |||||||
| Plans not approved by shareholders |
349 | (4) | $ | 36.48 | - | |||||||
|
|
|
|
|
|
|
|||||||
| Total |
1,415,048 | $ | 61.41 | 1,162,931 | ||||||||
| (1) | Restricted stock awards and performance units were not included when calculating the weighted-average exercise price. |
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Executive Compensation
| (2) | Remaining shares available for issuance include 1,162,931 shares under the 2016 Stock Incentive Plan. Shares remaining to be issued subsequent to December 31, 2018 can be issued either as stock option grants, restricted stock awards or performance units. Shares available for issuance will be reduced by one share for each stock option share granted and by two shares for every one share issued as a restricted stock award or a performance unit. |
| (3) | Number of securities includes 235, 2,483, 90,857, and 421,339 shares of unvested restricted stock awards granted under the 2005 Incentive Compensation Plan, 2008 Incentive Compensation Plan, 2010 Stock Incentive Plan, and 2016 Stock Incentive Plan, respectively. Number of securities also includes 79,385 and 106,329 shares of unvested performance units granted under the 2010 Stock Incentive Plan and 2016 Stock Incentive Plan, respectively. |
| (4) | Includes 349 shares available for issuance under the Florida Gulf Bancorp, Inc. Officers’ and Employees’ Stock Option Plan, which was assumed by the Company in its acquisition of Florida Gulf Bancorp, Inc. on July 31, 2012. |
Potential Payments Upon Termination or Change in Control
The Company provides benefits to the Named Executive Officers upon certain terminations of employment from the Company. These benefits are in addition to the benefits to which the executives would be entitled upon a termination of employment generally (i.e., vested retirement benefits accrued as of the date of termination, stock awards that have vested as of the date of termination, and the right to elect continued health coverage pursuant to COBRA). The incremental benefits payable to the executives are described below.
We have entered into Change in Control Severance Agreements with members of senior management, including each of our Named Executive Officers other than Mr. Byrd. Except for these agreements, and our broad-based severance policy, none of our Named Executive Officers, other than President and CEO Byrd and Vice Chairman and Director of Corporate Strategy Perez-Hickman, have employment agreements.
Mr. Byrd’s employment agreement requires payment of compensation and/or benefits under various termination of employment situations. In addition to change in control payments consistent with those of the other Named Executive Officers, if Mr. Byrd’s employment had been terminated at December 31, 2018, he would have been entitled to (i) a salary of $2,812,500 and benefits of $77,531, in the event of termination other than for Cause, death or disability, (ii) annual compensation of $1,125,000, benefits of $43,888, and any appropriate bonus as determined by the Compensation Committee, in the event of termination due to death, and (iii) $43,888 in benefits in the event of termination due to disability. These agreements are described more fully in the “Compensation Discussion and Analysis” section.
Mr. Perez-Hickman’s employment agreement requires payment of compensation under various termination of employment situations. In addition to change in control payments under a separate agreement, if Mr. Perez-Hickman’s employment had been terminated at December 31, 2018, he would have been entitled to (i) a retention bonus of $250,000, in the event of termination due to Just Cause within two years of the Sabadell United acquisition closing date, (ii) a salary of $1,300,000, annual bonus of $670,362, retention bonus of $250,000, and unvested stock awards totaling $2,772,589, in the event of termination without Just Cause, (iii) annual compensation of $1,300,000, annual bonus of $670,362, retention bonus of $250,000, and unvested stock awards totaling $2,772,589, in the event of termination due to death, (iv) annual bonus of $670,362, retention bonus of $250,000, and unvested stock awards totaling $2,772,589, in the event of termination due to disability, (v) annual compensation of $1,300,000, annual bonus of $670,362, retention bonus of $250,000, and unvested stock awards totaling $2,772,589, in the event of resignation with Good Reason within three years of the Sabadell United acquisition closing date, and (vi) retention bonus of $250,000, in the event of resignation without Good Reason within two years of the Sabadell United acquisition closing date. These agreements are described more fully in the “Compensation Discussion and Analysis” section.
In 2017, commencing as of the closing date of the Sabadell United acquisition, we entered into a Change in Control Severance Agreement with Fernando Perez-Hickman. The Change in Control Severance Agreement for Mr. Perez-Hickman provides for severance pay and benefits if within two years of a Change in Control Mr. Perez-Hickman resigns for Good Reason, as defined, or is terminated by the Company or its successor without Just Cause, as defined. The severance payment is equal to a lump sum cash payment in an amount equal to the sum of a pro rata bonus (unless entitled to a guarantee bonus payment) in an amount determined by multiplying (1) his target bonus for the year of termination or, the average of the annual bonuses awarded, if he does not have a target bonus, for the three fiscal years immediately preceding the date of termination; provided, however, that if he is not employed during each of the three most recently completed fiscal years, then the amount shall be the average of the annual bonuses awarded to him for each fiscal year he was eligible to receive a bonus, by (2) the fraction obtained by dividing the number of days in the year through the date of termination by 365, plus an amount equal to 2.5 times the sum of (x) his base salary in effect at
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termination and (y) a bonus amount determined as follows in the stated order of priority: (A) if applicable, his guarantee bonus, (B) if not entitled to a guarantee bonus, the target bonus for the year, (C) if he does not have a target bonus, the average of the annual bonuses awarded to him for the three most recently completed fiscal years, or (D) that if he is not employed during each of the three most recently completed fiscal years, then the amount shall be the average of the annual bonuses awarded to him for each fiscal year he was eligible to receive a bonus. In addition, he will receive a lump sum cash payment in an amount equal to the sum of the aggregate monthly premium that would be paid by him and the Company to obtain group health plan coverage plus the aggregate monthly premium that would be paid by him and the Company to obtain group term life insurance, multiplied by 36, less applicable withholding taxes.
Mr. Perez-Hickman’s Change in Control severance agreement does not provide for a Section 280(g) gross up payment. The agreement stipulates that in the event severance benefits are subject to the excise tax under IRC Section 4999, the amount payable to him would be reduced to the 280G Maximum if the reduction would result in him receiving a greater after tax amount.
In 2000, we entered into a separate Change in Control Severance Agreement with Michael J. Brown providing for severance pay and benefits upon voluntary resignation within 30 days after a Change in Control of IBERIABANK Corporation, as defined, or if within three years of a Change in Control Mr. Brown resigns for Good Reason, as defined, or is terminated by the Company or its successor without Just Cause, as defined. In 2006, we amended and restated the 2005 Change in Control Severance Agreement with Anthony J. Restel, and in 2009, we entered into a separate Change in Control Severance Agreement with Jefferson G. Parker. The severance payment is 100% in the case of Mr. Brown, Mr. Restel, and Mr. Parker, of each individual’s 280G Maximum, defined generally as 2.99 times their average compensation over the previous five years. In addition, each will be entitled to continued medical and life insurance benefits at the Company’s expense for 39 months following termination of employment. We will also make the individual whole for any excise tax imposed by the Code with respect to any payments under the agreement. Each of these agreements was amended in 2008 to comply with the deferred compensation requirements of Code Section 409A.
As of December 31, 2018, NEOs held unexercisable options to purchase common stock and unvested shares of restricted common stock, restricted share units and performance units listed in the “Outstanding Equity Awards at Fiscal Year-End” table.
The following table quantifies the estimated Change in Control payment that would have been payable to each Named Executive Officer assuming a Change in Control occurred on December 31, 2018, and other requirements for payment had been met.
| Name | Cash Severance |
Stock Option Acceleration(1) |
Restricted Stock, RSUs and Performance Units Acceleration(2) |
Benefits(3) | Tax Payments(4) |
Total | ||||||||||||||||||
| Daryl G. Byrd |
$ | 11,729,404 | $ | 149,458 | $ | 7,565,113 | $ | 100,790 | $ | 5,488,240 | $ | 25,033,005 | ||||||||||||
| Anthony J. Restel |
$ | 4,450,210 | $ | 39,413 | $ | 2,742,570 | $ | 77,226 | $ | 2,147,514 | $ | 9,456,933 | ||||||||||||
| Fernando Perez-Hickman |
$ | 2,931,286 | $ | - | $ | 2,772,589 | $ | - | $ | - | $ | 5,703,875 | ||||||||||||
| Michael J. Brown |
$ | 5,899,556 | $ | 51,179 | $ | 3,048,736 | $ | 86,762 | $ | 2,729,584 | $ | 11,815,817 | ||||||||||||
| Jefferson G. Parker |
$ | 4,850,697 | $ | 37,534 | $ | 1,719,940 | $ | 98,186 | $ | 2,073,948 | $ | 8,780,305 | ||||||||||||
| (1) | Assumes the immediate vesting of all unvested in-the-money stock options and the associated cash proceeds resulting from a same day sale exercise of only those previously unvested stock options using the fair market value of our common stock at December 31, 2018, of $64.28. |
| (2) | Assumes the immediate vesting of all unvested restricted stock, restricted share units, and performance units upon a Change in Control using the fair market value of our common stock at December 31, 2018, of $64.28. |
| (3) | Represents the cost to continue medical insurance, life insurance, and other benefits for a period of 39 months following termination. |
| (4) | Represents taxes associated with “excess parachute payments.” These taxes include any excise tax imposed under Section 4999 of the Code as well as any federal, state or local tax resulting from the excise tax payment. |
CEO Pay Ratio
In August 2015 pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule requiring annual disclosure of the ratio of the median associate’s annual total compensation to the total annual compensation of the principal executive officer (“PEO”).
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Executive Compensation
Mr. Byrd, President and CEO, had 2018 annual total compensation of $5,287,769 as reflected in the Summary Compensation Table included in this Proxy Statement. Our median associate’s annual total compensation for 2018 was $62,049. The resulting ratio of our CEO’s pay to the pay of our median associate for fiscal year 2018 is approximately 85:1.
Based upon our determination that neither pay distribution nor the profile of our average associate had materially changed, we intended to use the same median associate that was used for purposes of our 2017 disclosure. It was determined that the individual identified as our median associate for purposes of our 2017 disclosure terminated from the company in October 2018. As a result, we believe it is not appropriate to use the same median associate for purposes of this year’s pay ratio calculation. Therefore, we selected a new median associate utilizing the same methodology and database that we used in selecting the median associate for our 2017 calculation. We identified the new median associate by examining the 2017 total cash compensation for all individuals, excluding the CEO, who were employed by us on October 2, 2017, and remained actively employed through December 31, 2018. We included all associates, whether employed on a full-time or part-time basis. We did not make any assumptions, adjustments, or estimates with respect to total cash compensation which, for purposes of this calculation, includes annualized base salary, annual cash bonus, incentives, and commissions. We believe the use of total cash compensation for all associates is a consistently applied compensation measure because we do not widely distribute annual equity awards to associates.
After identifying the median associate based on total cash compensation, we calculated annual total compensation for such associate using the same methodology we use for our Named Executive Officers as set forth in the 2018 Summary Compensation Table included in this Proxy Statement.
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The following table provides information concerning the fees earned and other compensation of the Board of Directors for the year ended December 31, 2018:
| Name | Fees Earned or Paid in Cash ($) |
Stock Awards ($) |
All Other Compensation ($) |
Total ($) |
||||||||||||
| William H. Fenstermaker |
96,996 | 96,840 | (2) | - | 193,836 | |||||||||||
| Harry V. Barton, Jr. |
80,004 | (1) | 96,840 | (2) | - | 176,844 | ||||||||||
| E. Stewart Shea, III |
77,496 | 96,840 | (2) | - | 174,336 | |||||||||||
| Elaine D. Abell |
77,496 | 96,840 | (2) | - | 174,336 | |||||||||||
| Ernest P. Breaux, Jr. |
77,496 | 96,840 | (2) | - | 174,336 | |||||||||||
| John N. Casbon |
77,496 | 96,840 | (2) | - | 174,336 | |||||||||||
| Rick E. Maples |
77,496 | 96,840 | (2) | - | 174,336 | |||||||||||
| Angus R. Cooper, II |
69,996 | 96,840 | (2) | - | 166,836 | |||||||||||
| John E. Koerner, III |
69,996 | (1) | 96,840 | (2) | - | 166,836 | ||||||||||
| David H. Welch |
46,664 | 96,840 | (3) | - | 143,504 | |||||||||||
| Rosa Sugrañes |
46,664 | 96,840 | (2) | 2,730 | (4) | 146,234 | ||||||||||
| (1) | Amounts include monthly board member fees deferred under the Company’s Non-qualified Deferred Compensation Plan. Mr. Barton and Mr. Koerner deferred $48,000 and $63,000, respectively, during 2018. |
| (2) | Directors were granted 1,200 shares of restricted stock on June 1, 2018 with a grant date fair value of $80.70 per share. Awards become vested and non-forfeitable on the first anniversary from the date of the award. At December 31, 2018, directors had 1,200 shares of unvested restricted stock outstanding. |
| (3) | Dr. Welch was granted 1,200 shares of restricted stock on June 1, 2018 with a grant date fair value of $80.70 per share. Awards became fully vested upon his death in August 2018. |
| (4) | Amounts include the costs associated with personal use of the company aircraft. |
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The following table sets forth the name of each current executive officer and the principal position he or she holds.
| Name | Age | Position | ||||
| Daryl G. Byrd |
64 | President and Chief Executive Officer | ||||
| Michael J. Brown |
55 | Vice Chairman and Chief Operating Officer | ||||
| Jefferson G. Parker |
66 | Vice Chairman and Director of Capital Markets, Energy Lending, and Investor Relations | ||||
| Fernando Perez-Hickman |
51 | Vice Chairman and Director of Corporate Strategy | ||||
| Anthony J. Restel |
49 | Vice Chairman and Chief Financial Officer | ||||
| Terry L. Akins |
55 | Senior Executive Vice President and Chief Risk Officer | ||||
| Elizabeth A. Ardoin |
50 | Senior Executive Vice President and Director of Communications, Corporate Real Estate, and Human Resources | ||||
| Robert M. Kottler |
60 | Executive Vice President and Director of Retail, Small Business, and Mortgage | ||||
| M. Scott Price |
41 | Executive Vice President, Corporate Controller, and Chief Accounting Officer | ||||
| Monica R. Sylvain |
50 | Executive Vice President and Chief Diversity Officer | ||||
| Robert B. Worley, Jr. |
59 | Executive Vice President, General Counsel, and Corporate Secretary | ||||
| Nicolas Young |
42 | Executive Vice President and Chief Credit Officer | ||||
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Management is not aware of any business to come before the Annual Meeting other than the matters described above in this Proxy Statement. However, if any other matters should properly come before the Annual Meeting as to which proxies in the accompanying form confers discretionary authority the persons named therein will vote such proxies as determined by a majority of the Board of Directors.
A COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2018, AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, IBERIABANK CORPORATION, 200 WEST CONGRESS STREET, 12TH FLOOR, LAFAYETTE, LOUISIANA 70501.
By Order of the Board of Directors
Robert B. Worley, Jr.
Secretary
Lafayette, Louisiana
March 28, 2019
Important Notice Regarding the Availability of Proxy Materials for the
2019 Annual Meeting of Shareholders to be held on May 7, 2019
This Notice and Proxy Statement, the Company’s 2018 Annual Report to Shareholders and the Company’s
Annual Report on Form 10-K for the year ended December 31, 2018, are available electronically at
http://www.iberiabank.com/globalassets/proxy-2019.pdf
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Exhibit A
IBERIABANK CORPORATION
2019 STOCK INCENTIVE PLAN
1. Establishment, Purpose, and Types of Awards.
IBERIABANK Corporation (the “Company”) hereby establishes this equity-based incentive compensation plan to be known as the “IBERIABANK Corporation 2019 Stock Incentive Plan” (the “Plan”), in order to provide incentives and awards to select employees, consultants, and directors of the Company and its Affiliates.
The Plan permits the granting of the following types of Awards, according to the Sections of the Plan listed here:
| Section 6 |
Option Awards | |
| Section 7 |
Share Appreciation Rights | |
| Section 8 |
Restricted Shares, Restricted Share Units, and Unrestricted Shares | |
| Section 9 |
Performance Units |
The Plan is not intended to affect, and shall not affect, any stock options, equity-based compensation, or other benefits that the Company or its Affiliates may have provided, or may separately provide in the future pursuant to any agreement, plan, or program that is independent of this Plan.
2. Defined Terms.
Terms in the Plan that begin with an initial capital letter have the defined meaning set forth in the Appendix, unless defined elsewhere in this Plan or an Award Agreement, or the context of their use clearly indicates a different meaning.
3. Shares Subject to the Plan.
(a) Number of Shares. Subject to adjustment as provided in Section 12, the maximum number of Shares reserved for issuance under the Plan shall be equal to the following: 3,472,414 Shares (which consists of 2,800,000 new Shares plus 672,414 Prior Plan Shares), less Shares subject to any Awards granted after March 19, 2019 under any Prior Plan, using the share counting provisions set forth in Section 3(b), and plus any Shares that are subject to outstanding awards under any Prior Plan as of the Effective Date that are subsequently canceled, expired, forfeited or otherwise not issued or are settled in cash. Any of the Shares reserved and available for issuance under the Plan may be used for any type of Award under the Plan. Upon approval of this Plan by the Company’s shareholders, the Company will cease making new Awards under any Prior Plan.
(b) Share Counting.
(i) The above authorized Plan limit shall be reduced by one (1) Share for every one Share subject to an Option or SAR granted under the Plan, and by two (2) Shares for every one Share subject to Awards granted under the Plan in a form other than Options or SARs.
(ii) To the extent any Shares covered by an Option or SAR granted under the Plan are not delivered to a Participant or permitted transferee because the Award is forfeited or canceled, or Shares are not delivered because an Award is paid or settled in cash, such Shares shall not be deemed to have been delivered for purposes of determining the maximum number of Shares available for issuance under this Plan and such Shares may again be issued under the Plan.
(iii) In the event that Shares issued as an Award under the Plan are forfeited or reacquired by the Company pursuant to rights reserved upon issuance thereof, such forfeited or reacquired Shares will again be available for issuance as Awards under the Plan. In addition, Shares delivered or withheld in satisfaction of tax obligations with respect to Awards other than stock options and SARs will again be available for issuance as Awards under the Plan.
(iv) The following Shares may not again be made available for issuance as Awards under the Plan: (1) Shares delivered or withheld in payment of the exercise price of an Option, (2) Shares delivered or withheld in satisfaction of tax obligations with respect to Options or SARs, and (3) Shares repurchased on the open market with the proceeds of the exercise price of an Option.
(v) With respect to SARs, if the SAR is payable in Shares, all Shares to which the SARs relate are counted against the Plan limits, rather than the net number of Shares delivered upon exercise of the SAR.
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(vi) Any Share that again becomes available for grant under the Plan shall be added back to the total number of Shares available for grant under the Plan as one (1) Share if such Share was subject to an Option or SAR, and as two (2) Shares if such share was subject to an Award other than an Option or SAR.
(c) Limitations on Awards. Subject to adjustments as provided in Section 12, the following additional limitations are imposed under the Plan:
(i) The maximum number of Shares that may be issued upon exercise of Options intended to qualify as ISOs under Section 422 of the Code shall be the maximum number of shares reserved for issuance under Section 3(a).
(ii) The following limits will apply to Awards of the specified type granted to any one Participant in any single fiscal year:
(1) Appreciation Awards (Options and SARs): 500,000 Shares; and
(2) Full Value Awards (Restricted Shares, Restricted Share Units, Unrestricted Shares and Performance Units that are denominated in Shares): 500,000 Shares.
In applying the foregoing limits, (a) all Awards of the specified type granted to the same Participant in the same fiscal year will be aggregated and made subject to one limit; (b) the limits applicable to Options and SARS refer to the number of Shares subject to the Award; (c) the Share limit under clause (2) refers to the maximum number of Shares that may be delivered under an Award or Awards of the type specified in clause (2) assuming the maximum payout; and (d) each of the specified limits in clauses (1) and (2) is multiplied by two (2) for Awards granted to a Participant in the year employment commences.
(iii) Participants who are granted Options and SARs will be required to continue to provide services to the Company (or an Affiliate) for not less than one-year following the date of grant in order for any such Option or SAR to fully or partially vest or be exercisable (other than in case of death, Disability or a Change in Control). Notwithstanding the foregoing, up to five percent of the available shares of Common Stock reserved for issuance under the Plan pursuant to Section 3(a) may provide for vesting of Options and SARs, partially or in full, in less than one-year.
(iv) The maximum number of Shares subject to Awards granted during a single fiscal year to any non-management director, taken together with any cash fees paid to such non-management director during the fiscal year, shall not exceed $400,000 in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes). This limit shall not apply to the non-executive Chairman of the Board, whose compensation will be approved by the other independent directors on the Board with the non-executive Chairman of the Board abstaining.
(d) Type of Shares. Shares issued under the Plan may be authorized and unissued Shares.
4. Administration.
(a) General. The Committee shall administer the Plan in accordance with its terms, provided that the Board may act in lieu of the Committee on any matter. The Committee shall hold meetings at such times and places as it may determine and shall make such rules and regulations for the conduct of its business as it deems advisable. In the absence of a duly-appointed Committee or if the Board otherwise chooses to act in lieu of the Committee, the Board shall function as the Committee for all purposes of the Plan.
(b) Committee Compositioni) . The Board shall appoint the members of the Committee. If and to the extent permitted by Applicable Law, the Committee may authorize one or more Reporting Persons (or other officers) to make Awards to Eligible Persons who are not Reporting Persons (or other officers whom the Committee has specifically authorized to make Awards). The Board has sole discretion, at any time, to appoint additional members to the Committee, to remove and replace members of the Committee for any reason, and to fill vacancies on the Committee however caused.
(c) Powers of the Committee. Subject to the provisions of the Plan, the Committee shall have the authority, in its sole discretion:
(i) to determine Eligible Persons to whom Awards shall be granted from time to time and the number of Shares, units, or SARs to be covered by each Award;
(ii) to determine, from time to time, the Fair Market Value of Shares;
(iii) to determine, and to set forth in Award Agreements, the terms and conditions of all Awards, including any applicable exercise or purchase price, the installments and conditions under which an Award shall become vested
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(which may be based on performance), terminated, expired, cancelled, or replaced, and the circumstances for vesting acceleration or waiver of forfeiture restrictions, and other restrictions and limitations;
(iv) to approve the forms of Award Agreements and all other documents, notices, and certificates in connection therewith, which need not be identical either as to type of Award or among Participants;
(v) to construe and interpret the terms of the Plan and any Award Agreement, to determine the meaning of their terms, and to prescribe, amend, and rescind rules and procedures relating to the Plan and its administration;
(vi) in order to fulfill the purposes of the Plan and without amending the Plan, modify, cancel, or waive the Company’s rights with respect to any Awards (including the time or manner of vesting), to adjust or to modify Award Agreements for changes in Applicable Law, and to recognize differences in foreign law, tax policies, or customs; and
(vii) to make all other interpretations and to take all other actions that the Committee may consider necessary or advisable to administer the Plan or to effectuate its purposes.
(d) Delegation of Authority. Subject to Applicable Law and the restrictions set forth in the Plan, the Committee may delegate administrative functions to individuals who are Reporting Persons, officers, or Employees of the Company or its Affiliates. With respect to Participants not subject to Section 16 of the Exchange Act, the Committee may delegate to appropriate officers of the Company its authority to designate Participants, to determine the size and type of Awards to be received by those Participants and to set and modify the terms of such Awards; provided, however, that all such Awards shall comply with the terms of this Plan. Any actions taken by the delegee shall be treated as actions by the Committee.
(e) Deference to Committee Determinations. The Committee shall have the sole discretion to interpret or construe ambiguous, unclear, or implied (but omitted) terms in any fashion it deems to be appropriate, and to make any findings of fact needed in the administration of the Plan or Award Agreements. The Committee’s prior exercise of its discretionary authority shall not obligate it to exercise its authority in a like fashion thereafter. The Committee’s interpretation and construction of any provision of the Plan, or of any Award or Award Agreement, shall be final, binding, and conclusive. The validity of any such interpretation, construction, decision, or finding of fact shall not be given de novo review if challenged in court, by arbitration, or in any other forum, and shall be upheld unless clearly arbitrary or capricious.
(f) No Liability; Indemnification. Neither the Board nor any Committee member, nor any Person acting at the direction of the Board or the Committee, shall be liable for any act, omission, interpretation, construction, or determination made in good faith with respect to the Plan, any Award, or any Award Agreement. The Company and its Affiliates shall pay or reimburse any member of the Committee, as well as any Director, Employee, or Consultant who takes action in connection with the Plan, for all expenses incurred with respect to the Plan, and to the full extent allowable under Applicable Law shall indemnify each and every one of them for any claims, liabilities, and costs (including reasonable attorney’s fees) arising out of their good faith performance of duties under the Plan. The Company and its Affiliates may obtain liability insurance for this purpose.
5. Eligibility.
(a) General Rule. The Committee may grant ISOs only to Employees (including officers who are Employees) of the Company or an Affiliate that is a “parent corporation” or “subsidiary corporation” within the meaning of Section 424 of the Code, and may grant all other Awards to any Eligible Person. A Participant who has been granted an Award may be granted an additional Award or Awards if the Committee shall so determine, if such Participant is otherwise an Eligible Person and if otherwise in accordance with the terms of the Plan.
(b) Grant of Awards. Subject to the express provisions of the Plan, the Committee shall determine from the class of Eligible Persons those individuals to whom Awards under the Plan may be granted, the number of Shares subject to each Award, the price (if any) to be paid for the Shares or the Award and, in the case of Awards subject to performance conditions, the specific objectives, goals and performance criteria that further define the Award. Each Award shall be evidenced by an Award Agreement signed by the Company and, if required by the Committee, by the Participant. The Award Agreement shall set forth the material terms and conditions of the Award established by the Committee.
(c) Replacement Awards. Subject to Applicable Laws (including any associated shareholder approval requirements), the Committee may, in its sole discretion and upon such terms as it deems appropriate, require as a condition of the grant of an Award to a Participant that the Participant surrender for cancellation some or all of the Awards that have previously been granted to the Participant under this Plan or otherwise. An Award that is conditioned upon such surrender may or may not be the same type of Award, may cover the same (or a lesser or greater) number of Shares as such surrendered
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Award, may have other terms that are determined without regard to the terms or conditions of such surrendered Award, and may contain any other terms that the Committee deems appropriate. In the case of Options and SARs, these other terms may not involve an exercise price that is lower than the exercise price of the surrendered Option or SAR (as was determined under Section 6(e) or 7(b), respectively) unless approved by the Company’s shareholders.
6. Option Awards.
(a) Types; Documentation. The Committee may in its discretion grant ISOs to any Employee and Nonqualified Stock Options to any Eligible Person, and shall evidence any such grants in an Award Agreement that is delivered to the Participant. Each Option shall be designated in the Award Agreement as an ISO or a Nonqualified Stock Option, and the same Award Agreement may grant both types of Options. Options granted under the Plan may contain such terms and provisions not inconsistent with the Plan that the Committee shall deem advisable in its sole and absolute discretion.
(b) ISO $100,000 Limitation. To the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as ISOs first become exercisable by a Participant in any calendar year (under this Plan and any other plan of the Company or any Affiliate) exceeds $100,000, such excess Options shall be treated as Nonqualified Stock Options. For purposes of determining whether the $100,000 limit is exceeded, the Fair Market Value of the Shares subject to an ISO shall be determined as of the Grant Date. In reducing the number of Options treated as ISOs to meet the $100,000 limit, the most recently granted Options shall be reduced first. In the event that Section 422 of the Code is amended to alter the limitation set forth therein, the limitation of this Section 6(b) shall be automatically adjusted accordingly.
(c) Minimum Vesting Requirements. Options granted under this Section 6 shall be subject to the vesting requirement set forth in Section 3(c)(iii).
(d) Term of Options. Each Award Agreement shall specify a term at the end of which the Option automatically expires, subject to earlier termination provisions contained in Section 6(f)(ii) hereof, provided, that, the term of any Option may not exceed ten years from the Grant Date. In the case of an ISO granted to an Employee who is a Ten Percent Holder on the Grant Date, the term of the ISO shall not exceed five years from the Grant Date.
(e) Exercise of Option.
(i) Exercise Price. The exercise price of an Option shall be determined by the Committee in its discretion and shall be set forth in the Award Agreement, provided that (1) if an ISO is granted to an Employee who on the Grant Date is a Ten Percent Holder, the per Share exercise price shall not be less than 110% of the Fair Market Value per Share on the Grant Date, and (2) for all other Options, such per Share exercise price shall not be less than 100% of the Fair Market Value per Share on the Grant Date, except as set forth in Section 15(b) in the case of an Option granted in assumption of or substitution for an outstanding award of a company acquired by the Company or with which the Company combines.
(ii) Terms and Conditions. The Committee shall in its sole discretion determine the times, circumstances, and conditions under which an Option shall be exercisable, and shall set them forth in the Award Agreement. The Committee shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any such leave approved by the Company.
(iii) Minimum Exercise Requirements. An Option may not be exercised for a fraction of a Share. The Committee may require in an Award Agreement that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent a Participant from purchasing the full number of Shares as to which the Option is then exercisable.
(iv) Methods of Exercise. Prior to its expiration pursuant to the terms of the applicable Award Agreement, each Option may be exercised, in whole or in part (provided that the Company shall not be required to issue fractional shares), by delivery of notice of exercise to the Company or its delegee, in such form as the Company shall determine, which notice shall be accompanied by the full exercise price of the Shares being purchased. In the case of an ISO, the Committee shall determine the acceptable methods of payment on the Grant Date and it shall be included in the applicable Award Agreement. The methods of payment that the Committee may in its discretion accept or commit to accept in an Award Agreement include:
(1) cash or check payable to the Company (in U.S. dollars);
(2) other Shares that (A) are owned by the Participant who is purchasing Shares pursuant to an Option, (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option
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is being exercised, (C) are all, at the time of such surrender, free and clear of any and all claims, pledges, liens and encumbrances, or any restrictions which would in any manner restrict the transfer of such shares to or by the Company (other than such restrictions as may have existed prior to an issuance of such Shares by the Company to such Participant), and (D) the certificates of which are duly endorsed for transfer to the Company or attestation of ownership and transfer to the Company is effected to the Company’s satisfaction;
(3) a cashless exercise program pursuant to which a Participant may concurrently provide irrevocable instructions (A) to such Participant’s broker to effect the immediate sale of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the exercise price of the Option plus all applicable taxes required to be withheld by the Company by reason of such exercise, and (B) to the Company to (upon receipt of payment from the broker) deliver the certificates for or electronic evidence of ownership of the purchased Shares directly to such broker in order to complete the sale;
(4) if approved by the Committee, through a net exercise procedure whereby the Participant surrenders the Option in exchange for that number of Shares with an aggregate Fair Market Value equal to the difference between the aggregate exercise price of the Option being surrendered and the aggregate Fair Market Value of the Shares subject to the Option;
(5) in such other manner as may be authorized from time to time by the Committee; or
(6) any combination of the foregoing methods of payment.
(v) Delivery of Shares. The Company shall not be required to deliver Shares pursuant to the exercise of an Option until payment of the full exercise price therefore is received by the Company.
(f) Effect of Termination of Continuous Service.
(i) The Committee may establish and set forth in the applicable Award Agreement the terms and conditions on which an Option shall remain exercisable, if at all, following termination of a Participant’s Continuous Service. The Committee may waive or modify these provisions at any time. To the extent that a Participant is not entitled to exercise an Option at the date of his or her termination of Continuous Service, or if the Participant (or other Person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified in the Award Agreement or below (as applicable), the Option shall terminate and the Shares underlying the unexercised portion of the Option shall revert to the Plan and become available for future Awards. In no event may any Option be exercised after the expiration of the Option term as set forth in the Award Agreement.
(ii) Unless otherwise provided in the Participant’s Award Agreement, the following provisions shall apply when there is a termination of a Participant’s Continuous Service. Notwithstanding the terms below, no Option may be exercised after the expiration of the Option term as set forth in the Award Agreement.
(1) Termination other than Upon Disability or Death or for Cause. In the event of termination of a Participant’s Continuous Service (other than as a result of Participant’s death, Disability, Retirement or termination for Cause), the Participant shall have the right to exercise an Option at any time within 90 days following such termination to the extent the Participant was entitled to exercise such Option at the date of such termination.
(2) Disability. In the event of termination of a Participant’s Continuous Service as a result of his or her being Disabled, the Participant shall have the right to exercise an Option at any time within one year following such termination to the extent the Participant was entitled to exercise such Option at the date of such termination.
(3) Retirement. In the event of termination of a Participant’s Continuous Service as a result of Participant’s Retirement, the Participant shall have the right to exercise the Option at any time within six months following such termination to the extent the Participant was entitled to exercise such Option at the date of such termination.
(4) Death. In the event of the death of a Participant during the period of Continuous Service since the Grant Date of an Option, or within 30 days following termination of the Participant’s Continuous Service, the Option may be exercised at any time within one year following the date of the Participant’s death by the Participant’s estate or by a Person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent the right to exercise the Option had vested at the date of death or, if earlier, the date the Participant’s Continuous Service terminated.
(5) Cause. If the Committee determines that a Participant’s Continuous Service terminated due to Cause, the Participant shall immediately forfeit the right to exercise any Option, and it shall be considered immediately null and void.
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(g) Reverse Vesting. The Committee in its sole and absolute discretion may allow a Participant to exercise unvested Options, in which case the Shares then issued shall be Restricted Shares having analogous vesting restrictions to the unvested Options.
(h) No Dividend Equivalent Rights. Participants holding Options shall not be entitled to any dividend equivalent rights for any period of time prior to the exercise of the Option.
7. Share Appreciation Rights (SARs).
(a) Grants. The Committee may in its discretion grant Share Appreciation Rights (SARs) to any Eligible Person, in any of the following forms:
(i) SARs related to Options. The Committee may grant SARs either concurrently with the grant of an Option or with respect to an outstanding Option, in which case the SAR shall extend to all or a portion of the Shares covered by the related Option. A SAR shall entitle the Option holder, upon exercise of the SAR and surrender of the related Option, or portion thereof, to the extent the SAR and related Option each were previously unexercised, to receive payment of an amount determined pursuant to Section 7(d) below. Any SAR granted in connection with an ISO will contain such terms as may be required to comply with the provisions of Section 422 of the Code.
(ii) SARs Independent of Options. The Committee may grant SARs which are independent of any Option subject to such conditions as the Committee may in its discretion determine, which conditions will be set forth in the applicable Award Agreement. Notwithstanding the above, SARs granted independent of any Options shall be subject to the vesting requirement set forth in Section 3(c)(iii).
(iii) Limited SARs. The Committee may grant SARs exercisable only upon or in respect of a Change in Control or any other specified event, and such limited SARs may relate to or operate in tandem or combination with or substitution for Options or other SARs, or on a stand-alone basis, and may be payable in cash or Shares based on the spread between the exercise price of the SAR, and (1) a price based upon or equal to the Fair Market Value of the Shares during a specified period, at a specified time within a specified period before, after or including the date of such event, or (2) a price related to consideration payable to the Company’s shareholders generally in connection with the event.
(b) Exercise Price. The per Share exercise price of a SAR shall be determined in the sole discretion of the Committee, shall be set forth in the applicable Award Agreement, and shall be no less than 100% of the Fair Market Value of one Share, except as set forth in Section 14(b) in the case of a SAR granted in assumption of or substitution for an outstanding award of a company acquired by the Company or with which the Company combines. The exercise price of a SAR related to an Option shall be the same as the exercise price of the related Option.
(c) Exercise of SARs. Unless the Award Agreement otherwise provides, a SAR related to an Option will be exercisable at such time or times, and to the extent, that the related Option will be exercisable. A SAR may not have a term exceeding ten years from its Grant Date. A SAR granted independently of any other Award will be exercisable pursuant to the terms of the Award Agreement. Whether a SAR is related to an Option or is granted independently, the SAR may only be exercised when the Fair Market Value of the Shares underlying the SAR exceeds the exercise price of the SAR.
(d) Payment.
(i) Upon exercise of a SAR related to an Option and the attendant surrender of an exercisable portion of any related Award, the Participant will be entitled to receive payment of an amount determined by multiplying—
(1) the excess of the Fair Market Value of a Share on the date of exercise of the SAR over the exercise price per Share of the SAR, by
(2) the number of Shares with respect to which the SAR has been exercised.
(ii) Notwithstanding Section 7(d)(i), a SAR granted independently of an Option:
(1) may limit the amount payable to the Participant to a percentage, specified in the Award Agreement but not exceeding one hundred percent (100%), of the amount determined pursuant to Section 7(d)(i), and
(2) shall be subject to any payment or other restrictions that the Committee may at any time impose in its discretion, including restrictions intended to conform the SARs with Section 409A of the Code.
(e) Form and Terms of Payment. Subject to Applicable Law, the Committee may, in its sole discretion, settle the amount determined under Section 7(d) above solely in cash, solely in Shares (valued at their Fair Market Value on the date of exercise of the SAR), or partly in cash and partly in Shares. In any event, no fractional Shares shall be issued and the
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Committee shall determine whether cash shall be paid in lieu of any fractional Shares, or whether such fractional Shares and the rights thereto shall be cancelled or eliminated without payment therefor. Absent a contrary determination by the Committee, all SARs shall be settled in cash as soon as practicable after exercise. Notwithstanding the foregoing, the Committee may, in an Award Agreement, determine the maximum amount of cash or Shares or combination thereof that may be delivered upon exercise of a SAR.
(f) Effect of Termination of Continuous Service. The Committee shall establish and set forth in the applicable Award Agreement the terms and conditions on which a SAR shall remain exercisable, if at all, following termination of a Participant’s Continuous Service. The provisions of Section 6(f)(ii) above shall apply to the extent an Award Agreement does not specify the terms and conditions upon which a SAR shall terminate when there is a termination of a Participant’s Continuous Service.
(g) No Dividend Equivalent Rights. Participants holding SARs shall not be entitled to any dividend equivalent rights for any period of time prior to the exercise of the SAR.
8. Restricted Shares, Restricted Share Units, and Unrestricted Shares.
(a) Grants. The Committee has the discretion to grant Awards of Restricted Shares, Restricted Share Units, and Unrestricted Shares under this Section 8.
(i) The Committee may in its discretion grant restricted shares (“Restricted Shares”) to any Eligible Person and shall evidence such grant in an Award Agreement that is delivered to the Participant and that sets forth the number of Restricted Shares, the purchase price for such Restricted Shares (if any), and the terms upon which the Restricted Shares may become vested.
(ii) The Committee may in its discretion grant the right to receive Shares after certain vesting requirements are met (“Restricted Share Units”) to any Eligible Person and shall evidence such grant in an Award Agreement that is delivered to the Participant which sets forth the number of Shares (or formula, that may be based on future performance or conditions, for determining the number of Shares) that the Participant shall be entitled to receive upon vesting and the terms upon which the Shares subject to a Restricted Share Unit may become vested.
(iii) The Committee may condition any Award of Restricted Shares or Restricted Share Units to a Participant on receiving from the Participant such further assurances and documents as the Committee may require to enforce the restrictions.
(iv) Subject to the limit set forth in Section 3(c)(ii), the Committee may grant Awards hereunder in the form of unrestricted shares (“Unrestricted Shares”), which shall vest in full upon the date of grant or such other date as the Committee may determine or which the Committee may issue pursuant to any program under which one or more Eligible Persons (selected by the Committee in its discretion) elect to receive Unrestricted Shares in lieu of cash bonuses that would otherwise be paid.
(b) Vesting and Forfeiture.
(i) Award Agreements for Restricted Shares and Restricted Share Units. The Committee shall set forth in an Award Agreement granting Restricted Shares or Restricted Share Units, the terms and conditions under which the Participant’s interest in the Restricted Shares or the Shares subject to Restricted Share Units will become vested and non-forfeitable.
(ii) Effect of Termination of Continuous Service. Except as set forth in the applicable Award Agreement or the Committee otherwise determines, upon termination of a Participant’s Continuous Service for any other reason, the Participant shall forfeit his or her unvested Restricted Shares and Restricted Share Units; provided that if a Participant purchases the Restricted Shares and forfeits them for any reason, the Company shall return the purchase price to the Participant only if and to the extent set forth in an Award Agreement.
(c) Issuance of Restricted Shares Prior to Vesting. The Company shall issue stock certificates that evidence Restricted Shares pending the lapse of applicable restrictions, and that bear a legend making appropriate reference to such restrictions. Alternatively, the Company may reflect such ownership and restrictions in electronic format. Except as set forth in the applicable Award Agreement or the Committee otherwise determines, the Company or a third party that the Company designates shall hold such Restricted Shares and any dividends that accrue with respect to Restricted Shares pursuant to Section 8(e) below.
(d) Issuance of Shares upon Vesting. As soon as practicable after vesting of a Participant’s Restricted Shares (or Shares underlying Restricted Share Units) and the Participant’s satisfaction of applicable tax withholding requirements, the
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Company shall release to the Participant, free from the vesting restrictions, one Share for each vested Restricted Share (or issue one Share free of the vesting restriction for each vested Restricted Share Unit), unless an Award Agreement provides otherwise. No fractional shares shall be distributed, and cash shall be paid in lieu thereof.
(e) Treatment of Dividends. Unless otherwise provided in the Award Agreement, whenever Shares are released to a Participant under Section 8(d) above pursuant to the vesting of Restricted Shares or the Shares underlying Restricted Share Units are issued to a Participant pursuant to Section 8(d) above, such Participant shall receive, with respect to each Share released or issued, an amount equal to any cash dividends (plus, in the discretion of the Committee, simple interest at a rate as the Committee may determine) and a number of Shares equal to any stock dividends, which were declared and paid to the holders of Shares between the Grant Date and the date such Share is released or issued. If the vesting of the Award is based upon the attainment of performance goals, any and all cash and stock dividends paid with respect to the Shares underlying the Award shall also be subject to the attainment of the performance goals.
(f) Section 83(b) Elections. To the extent permitted by the Committee, a Participant may make an election under Section 83(b) of the Code (the “Section 83(b) Election”) with respect to Restricted Shares. If a Participant who has received Restricted Share Units provides the Committee with written notice of his or her intention to make Section 83(b) Election with respect to the Shares subject to such Restricted Share Units, the Committee may in its discretion, if permitted by Section 409A of the Code, convert the Participant’s Restricted Share Units into Restricted Shares, on a one-for-one basis, in full satisfaction of the Participant’s Restricted Share Unit Award. The Participant may then make a Section 83(b) Election with respect to those Restricted Shares.
9. Performance Units.
Subject to the limitations set forth in Section 3(c)(ii), the Committee has discretion to grant Performance Units to any Eligible Person and shall evidence such grant in an Award Agreement that is delivered to the Participant which sets forth the terms and conditions of the Award. Performance Units shall vest based upon the attainment of performance goals as determined by the Committee.
10. Taxes.
(a) General. As a condition to the issuance or distribution of Shares pursuant to the Plan, the Participant (or in the case of the Participant’s death, the person who succeeds to the Participant’s rights) shall make such arrangements as the Company may require for the satisfaction of any applicable federal, state, local, or foreign withholding tax obligations that may arise in connection with the Award and the issuance of Shares. The Company shall not be required to issue any Shares until such obligations are satisfied. If the Committee allows the withholding or surrender of Shares to satisfy a Participant’s tax withholding obligations, the Committee shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates (or, if permitted by the Committee, such other rate as will not cause adverse accounting consequences and is permitted under applicable IRS withholding rules) for federal and state tax purposes, including payroll taxes.
(b) Surrender of Shares. If permitted or required by the Committee, in its discretion, and in accordance with Section 10(a), a Participant may satisfy the applicable tax withholding and employment tax obligations associated with an Award by surrendering Shares to the Company (including Shares that would otherwise be issued pursuant to the Award) that have a Fair Market Value determined as of the applicable Tax Date equal to the amount required to be withheld.
(c) Special Rules. In the case of (i) a Participant other than an Employee, (ii) an Employee where the next payroll payment is not sufficient to satisfy such tax obligations, with respect to any remaining tax obligations, (iii) a Participant who is an Executive Officer of the Company or a member of the Board, in the absence of any other arrangement and to the extent permitted under Applicable Law, the Participant shall be deemed to have elected to have the Company withhold from the Shares or cash to be issued pursuant to an Award that number of Shares having a Fair Market Value determined as of the applicable Tax Date (as defined below) or cash equal to the amount required to be withheld. For purposes of this Section 10, the Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined under the Applicable Law (the “Tax Date”).
(d) Income Taxes. Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including any taxes arising under Section 409A of the Code), and the Company shall not have any obligation to indemnify or otherwise hold any Participant harmless from any or all of such taxes.
(e) Section 409A of the Code. The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance
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therewith. Any payments described in the Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless any Applicable Law requires otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following a Participant’s termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant’s separation from service (or the Participant’s death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Participant under Section 409A of the Code and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.
11. Non-Transferability of Awards.
(a) General. Except as set forth in this Section 11, or as otherwise approved by the Committee, Awards may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution. The designation of a beneficiary by a Participant will not constitute a transfer. An Award may be exercised, during the lifetime of the holder of an Award, only by such holder, the duly-authorized legal representative of a Participant who is Disabled, or a transferee permitted by this Section 11.
(b) Limited Transferability Rights. Notwithstanding anything else in this Section 11, the Committee may in its discretion provide in an Award Agreement that an Award other than an ISO may be transferred, on such terms and conditions as the Committee deems appropriate, either (i) by instrument to the Participant’s “Immediate Family” (as defined below), (ii) by instrument to an inter vivos or testamentary trust (or other entity) in which the Award is to be passed to the Participant’s designated beneficiaries, or (iii) by gift to charitable institutions. Any transferee of the Participant’s rights shall succeed and be subject to all of the terms of this Award Agreement and the Plan. “Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.
12. Adjustments Upon Changes in Capitalization, Merger, or Certain Other Transactions.
(a) Changes in Capitalization. The Committee shall equitably adjust the number of Shares covered by each outstanding Award, all Share limitations contained herein and the number of Shares that have been authorized for issuance under the Plan but as to which no Awards have yet been granted or that have been returned to the Plan upon cancellation, forfeiture, or expiration of an Award, as well as the price per Share covered by each such outstanding Award, to reflect any increase or decrease in the number of issued Shares resulting from a stock-split, reverse stock-split, spin-off, stock or extraordinary cash dividend, combination, consolidation, recapitalization or reclassification of the Shares, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company. In the event of any such transaction or event, the Committee may provide in substitution for any or all outstanding Awards under the Plan such alternative consideration (including securities of any surviving entity) as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all Awards so replaced. In any case, such substitution of securities shall not require the consent of any person who is granted Awards pursuant to the Plan. Except as expressly provided herein, or in an Award Agreement, if the Company issues for consideration shares of stock of any class or securities convertible into shares of stock of any class, the issuance shall not affect, and no adjustment by reason thereof shall be required to be made with respect to the number or price of Shares subject to any award.
(b) Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company other than as part of a Change in Control, each Award will terminate immediately prior to the consummation of such action, subject to the ability of the Committee to exercise any discretion authorized in the case of a Change in Control.
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(c) Change in Control. Unless otherwise provided in an Award Agreement, Awards will automatically vest in full (and to the extent applicable, become exercisable) and any repurchase rights of the Company will automatically lapse upon a Change in Control of the Company. In addition, in the event of a Change in Control, the Committee may in its sole and absolute discretion and authority, without obtaining the approval or consent of the Company’s shareholders or any Participant with respect to his or her outstanding Awards, take one or more of the following actions:
(i) arrange for or otherwise provide that each outstanding Award shall be assumed or a substantially similar award shall be substituted by a successor corporation or a parent or subsidiary of such successor corporation (the “Successor Corporation”);
(ii) require that all outstanding Options and Share Appreciation Rights be exercised on or before a specified date (before or after such Change in Control) fixed by the Committee, after which specified date all unexercised Options and Share Appreciation Rights shall terminate;
(iii) arrange or otherwise provide for the payment of cash or other consideration to Participants representing the value of such Awards in exchange for the satisfaction and cancellation of outstanding Awards; provided, however, that the case of any Option or Share Appreciation Right with an exercise price that equals or exceeds the price paid for a Share in connection with the Change in Control, the Committee may cancel the Option or Share Appreciation Right without the payment of consideration therefor; or
(iv) make such other modifications, adjustments or amendments to outstanding Awards or this Plan as the Committee deems necessary or appropriate, subject however to the terms of Section 14(a) below.
(d) Certain Distributions. In the event of any distribution to the Company’s shareholders of securities of any other entity or other assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Committee may, in its discretion, appropriately adjust the price per Share covered by each outstanding Award to reflect the effect of such distribution.
13. Time of Granting Awards.
The date of grant (“Grant Date”) of an Award shall be the date on which the Committee (or its delegee pursuant to Section 4(d)) makes the determination granting such Award or such other later date as is determined by the Committee, provided that in the case of an ISO, the Grant Date shall be the later of the date on which the Committee makes the determination granting such ISO or the date of commencement of the Participant’s employment relationship with the Company.
14. Modification of Awards and Substitution of Options or SARs.
(a) Modification, Extension, and Renewal of Awards. Within the limitations of the Plan, the Committee may modify an Award to accelerate the rate at which an Option or SAR may be exercised (including without limitation permitting an Option or SAR to be exercised in full without regard to the installment or vesting provisions of the applicable Award Agreement or whether the Option or SAR is at the time exercisable, to the extent it has not previously been exercised), to accelerate the vesting of any Award, to extend or renew outstanding Awards in compliance with Section 409A, to the extent applicable, or to accept the cancellation of outstanding Awards to the extent not previously exercised. Notwithstanding the foregoing provision, no modification of an outstanding Award shall materially and adversely affect such Participant’s rights thereunder, unless either the Participant provides written consent or there is an express Plan provision permitting the Committee to act unilaterally to make the modification.
(b) Substitution of Options. Notwithstanding any inconsistent provisions or limits under the Plan, in the event the Company or an Affiliate acquires (whether by purchase, merger, or otherwise) all or substantially all of outstanding capital stock or assets of another corporation or in the event of any reorganization or other transaction qualifying under Section 424 of the Code, the Committee may, in a manner satisfying the provisions of Section 424(a) of the Code, substitute Options or SARs for options or stock appreciation rights under the plan of the acquired company.
(c) Limitations on Repricing. Except as permitted in Section 12(a) for a change in capitalization or Section 12(c) for a Change in Control, the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Options or SARs or cancel outstanding underwater Options or SARs in exchange for cash, other Awards, or Options or SARs with an exercise price that is less than the exercise price of the original Options or SARs without stockholder approval.
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15. Term of Plan.
The Plan shall continue in effect for a term of ten years from its effective date as determined under Section 19 below, unless the Plan is sooner terminated under Section 16 below.
16. Amendment and Termination of the Plan.
(a) Authority to Amend or Terminate. Subject to Applicable Laws, the Board may amend or discontinue this Plan at any time; provided, however, that no such amendment may:
(i) materially revise the Plan without the approval of the shareholders. A material revision of the Plan includes (1) except for adjustments permitted pursuant to Section 12 above, a material increase to the maximum number of Shares that may be issued through the Plan; (ii) a material increase to the benefits accruing to Participants under the Plan; (iii) a material expansion of the classes of persons eligible to participate in the Plan; (iv) an expansion of the types of Awards available for grant under the Plan; (v) a material extension of the term of the Plan and (vi) a material change that reduces the price at which Shares may be offered through the Plan;
(ii) amend Section 14(c) to permit repricing of Options or SARs without the approval of shareholders; or
(iii) materially impair, without the written consent of the Participant, an Award previously granted, except that the Company retains all of its rights under Section 12(c).
(b) Committee’s Authority. Notwithstanding the foregoing, the Committee may amend the Plan to eliminate provisions which are no longer necessary as a result of changes in tax or securities laws or regulations, or in the interpretation thereof.
17. Conditions Upon Issuance of Shares.
Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with Applicable Law, with such compliance determined by the Company in consultation with its legal counsel.
18. Reservation of Shares.
The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. Neither the Company nor the Committee shall, without shareholder approval, allow for a repricing within the meaning of the federal securities laws applicable to proxy statement disclosures.
19. Effective Date.
This Plan shall become effective on the date of its approval by the shareholders of the Company.
20. Controlling Law.
All disputes relating to or arising from the Plan shall be governed by the internal substantive laws (and not the laws of conflicts of laws) of the State of Louisiana, to the extent not preempted by United States federal law. If any provision of this Plan is held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions shall continue to be fully effective.
21. Laws and Regulations.
(a) U.S. Securities Laws. This Plan, the grant of Awards, the exercise of Options and SARs under this Plan, and the obligation of the Company to sell or deliver any of its securities (including, without limitation, Options, Restricted Shares, Restricted Share Units, and Shares) under this Plan shall be subject to all Applicable Laws. In the event that the Shares are not registered under the Securities Act, or any applicable state securities laws prior to the delivery of such Shares, the Company may require, as a condition to the issuance thereof, that the persons to whom Shares are to be issued represent and warrant in writing to the Company that such Shares are being acquired by him or her for investment for his or her own account and not with a view to, for resale in connection with, or with an intent of participating directly or indirectly in, any distribution of such Shares within the meaning of the Securities Act, and a legend to that effect may be placed on the certificates representing the Shares.
(b) Other Jurisdictions. To facilitate the making of any grant of an Award under this Plan, the Committee may provide for such special terms for Awards to Participants who are foreign nationals or who are employed by the Company or any
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Affiliate outside of the United States of America as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. The Company may adopt rules and procedures relating to the operation and administration of this Plan to accommodate the specific requirements of local laws and procedures of particular countries. Without limiting the foregoing, the Company is specifically authorized to adopt rules and procedures regarding the conversion of local currency, taxes, withholding procedures and handling of stock certificates which vary with the customs and requirements of particular countries. The Company may adopt sub-plans and establish escrow accounts and trusts as may be appropriate or applicable to particular locations and countries.
22. No Shareholder Rights.
Neither a Participant nor any transferee of a Participant shall have any rights as a shareholder of the Company with respect to any Shares underlying any Award until the date of issuance of a Share certificate or other evidence of Share ownership to a Participant or a transferee of a Participant for such Shares in accordance with the Company’s governing instruments and Applicable Law. Prior to the issuance of Shares pursuant to an Award, a Participant shall not have the right to vote or to receive dividends or any other rights as a shareholder with respect to the Shares underlying the Award, notwithstanding its exercise in the case of Options and SARs. No adjustment will be made for a dividend or other right that is determined based on a record date prior to the date the stock certificate or other evidence of ownership is issued, except as otherwise specifically provided for in this Plan.
23. No Employment Rights.
The Plan shall not confer upon any Participant any right to continue an employment, service or consulting relationship with the Company, nor shall it affect in any way a Participant’s right or the Company’s right to terminate the Participant’s employment, service, or consulting relationship at any time, with or without Cause.
24. Deferral.
Payment of an Award may be deferred only if permitted in the Award Agreement. Any deferral arrangement shall comply with Section 409A of the Code.
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IBERIABANK CORPORATION
2016 STOCK INCENTIVE PLAN
APPENDIX: DEFINITIONS
As used in the Plan, the following definitions shall apply:
“Affiliate” means, with respect to any Person (as defined below), any other Person that directly or indirectly controls or is controlled by or under common control with such Person. For the purposes of this definition, “control,” when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person or the power to elect directors, whether through the ownership of voting securities, by contract or otherwise; and the terms “affiliated,” “controlling” and “controlled” have meanings correlative to the foregoing.
“Applicable Law” means the legal requirements relating to the administration of options and share-based plans under applicable U.S. federal and state laws, the Code, any applicable stock exchange or automated quotation system rules or regulations, and the applicable laws of any other country or jurisdiction where Awards are granted, as such laws, rules, regulations and requirements shall be in place from time to time.
“Award” means any award made pursuant to the Plan, including awards made in the form of an Option, a SAR, a Restricted Share, a Restricted Share Unit, an Unrestricted Share, and a Performance Unit, or any combination thereof, whether alternative or cumulative, authorized by and granted under this Plan.
“Award Agreement” means any written or electronic document setting forth the terms of an Award that has been authorized by the Committee. The Committee shall determine the form or forms of documents to be used, and may change them from time to time for any reason.
“Board” means the Board of Directors of the Company.
“Cause” for termination of a Participant’s Continuous Service will exist if the Participant is terminated from employment or other service with the Company or an Affiliate for any of the following reasons: (i) the Participant’s willful failure to substantially perform his or her duties and responsibilities to the Company or deliberate violation of a material Company policy; (ii) the Participant’s commission of any material act or acts of fraud, embezzlement, dishonesty, or other willful misconduct; (iii) the Participant’s material unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) the Participant’s willful and material breach of any of his or her obligations under any written agreement or covenant with the Company. Notwithstanding the foregoing, if a Participant is subject to an effective employment or change of control agreement with the Company or an Affiliate that contains a definition of “Cause,” then in lieu of the foregoing definition, for purposes of Awards under this Plan, “Cause” shall have the meaning specified in such other agreement.
The Committee shall in its discretion determine whether or not a Participant is being terminated for Cause. The Committee’s determination shall, unless arbitrary and capricious, be final and binding on the Participant, the Company, and all other affected persons. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting relationship at any time, and the term “Company” will be interpreted herein to include any Affiliate or successor thereto, if appropriate.
“Change in Control” means, unless otherwise defined in an Award Agreement,
(a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 25 percent of the combined voting power of the Company’s then outstanding securities; provided, however, that for purposes of this paragraph (a), of this definition the following acquisitions shall not constitute a Change in Control:
(i) any acquisition of securities directly from the Company,
(ii) any acquisition of securities by the Company,
(iii) any acquisition of securities by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or
(iv) any acquisition of securities by any corporation or entity pursuant to a transaction that does not constitute a Change of Control under paragraph (c) of this definition; or
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(b) Individuals who, as of the date this Plan was adopted by the Board of Directors (the “Approval Date”), constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Approval Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, unless such individual’s initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Incumbent Board; or
(c) consummation of a reorganization, merger ,or consolidation (including a merger, or consolidation of the Company or any direct or indirect subsidiary of the Company), or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination,
(i) all or substantially all of the individuals and entities who were the beneficial owners of the Company’s outstanding Common Stock and the Company’s voting securities entitled to vote generally in the election of directors immediately prior to such Business Combination have direct or indirect beneficial ownership, respectively, of more than 50 percent of the then outstanding shares of common stock, and more than 50 percent of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the corporation resulting from such Business Combination (which, for purposes of this subparagraph (c)(i) and paragraphs (c)(ii) and (c)(iii)shall include a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries), and
(ii) except to the extent that such ownership existed prior to the Business Combination, no person (excluding any corporation resulting from such Business Combination or any employee benefit plan or related trust of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 25 percent or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination or 25 percent or more of the combined voting power of the then outstanding voting securities of such corporation, and
(iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(d) approval by the shareholders of the Company of a plan of complete liquidation or dissolution of the Company.
Notwithstanding the above and solely with respect to any Award that constitutes “deferred compensation” subject to Section 409A of the Code and that is payable on account of a Change in Control (including any installments or stream of payments that are accelerated on account of a Change in Control), a Change in Control shall occur only if such event also constitutes a “change in the ownership”, “change in effective control”, and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms are defined under Treasury Regulation §1.409A-3(i)(5), but only to the extent necessary to establish a time or form of payment that complies with Section 409A of the Code, without altering the definition of Change in Control for purposes of determining whether a Participant’s rights to such Award become vested or otherwise unconditional upon the Change in Control.
“Code” means the U.S. Internal Revenue Code of 1986, as amended. All references to specific Sections of the Code include the applicable regulations or guidance issued thereunder, as those may be amended from time to time.
“Common Stock” means the common stock of the Company.
“Committee” means one or more committees or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 4 above. With respect to any decision relating to a Reporting Person, the Committee shall consist of two or more Directors who are disinterested within the meaning of Rule 16b-3.
“Company” means IBERIABANK Corporation, a Louisiana corporation; provided, however, that in the event the Company reincorporates to another jurisdiction, all references to the term “Company” shall refer to the Company in such new jurisdiction.
“Consultant” means any person, including an advisor, who is engaged by the Company or any Affiliate to render services and is compensated for such services.
“Continuous Service” means the absence of any interruption or termination of service as an Employee, Director, or Consultant. Continuous Service shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Committee, provided that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise
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pursuant to Company policy adopted from time to time; (iv) changes in status from Director to advisory director or emeritus status; or (iv) in the case of transfers between locations of the Company or between the Company, its Affiliates, or their respective successors. Changes in status between service as an Employee, Director, and a Consultant will not constitute an interruption of Continuous Service.
“Director” means a member of the Board, or a member of the board of directors of an Affiliate.
“Disabled” or “Disability” refers to a condition under which a Participant—
(a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or
(b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company.
“Eligible Person” means any Consultant, Director, or Employee and includes non-Employees to whom an offer of employment has been extended.
“Employee” means any person whom the Company or any Affiliate classifies as an employee (including an officer) for employment tax purposes. The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Executive Officer” has the meaning provided in Rule 3b-7 under the Exchange Act.
“Fair Market Value” means, as of any date (the “Determination Date”): (i) the closing price of a Share on the New York Stock Exchange, the NASDAQ Stock Market or the American Stock Exchange (collectively, the “Exchange”), on the Determination Date, or, if shares were not traded on the Determination Date, then on the nearest preceding trading day during which a sale occurred; or (ii) if such stock is not traded on the Exchange but is quoted on a quotation system, (A) the mean between the reported high and low sale prices on the Determination Date during the regular daily trading session or, (B) if selling prices are not reported for the Determination Date, the mean between the closing representative bid and asked prices for the stock on the Determination Date as reported by such quotation system; or (iii) if such stock is not traded on the Exchange or quoted but is otherwise traded over-the-counter, the mean between the representative bid and asked prices on the Determination Date; or (iv) if subsections (i)-(iii) do not apply, the fair market value as established in good faith by the Committee and in accordance with Section 409A of the Code.
“Good Reason” means any of the following (without the Participant’s express written consent): (1) a material diminution in the Participant’s base salary as of the day immediately preceding the Change in Control or (2) the Company’s requiring the Participant to be based at any office or location more than 50 miles from Participant’s principal office or location as of the day immediately preceding the Change in Control. Notwithstanding the foregoing, the Participant shall not have the rights described in Section 12(c) in connection with a termination of his employment with Good Reason unless (a) within 30 days of the initial existence of the condition or conditions giving rise to such right the Participant provides written notice to the Company of the existence of such condition or conditions, and (b) the Company fails to remedy such condition or conditions within 30 days following the receipt of such written notice (the “Cure Period”). If any such condition is not remedied within the Cure Period, the Participant must terminate his employment with the Company within a reasonable period of time, not to exceed 30 days, following the end of the Cure Period. Notwithstanding the foregoing, if a Participant is subject to an effective employment or change of control agreement with the Company or an Affiliate that contains a definition of “Good Reason,” then in lieu of the foregoing definition, for purposes of Awards under this Plan, “Good Reason” shall have the meaning specified in such other agreement.
“Grant Date” has the meaning set forth in Section 13 of the Plan.
“Incentive Share Option” or “ISO” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in the applicable Award Agreement.
“Nonqualified Stock Option” means an Option not intended to qualify as an ISO, as designated in the applicable Award Agreement.
“Option” means any stock option granted pursuant to Section 6 of the Plan.
“Participant” means any holder of one or more Awards, or the Shares issuable or issued upon exercise of such Awards, under the Plan.
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2019 Proxy Statement A-15 |
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“Performance Unit” means Awards granted pursuant to Section 9 of the Plan which may be paid in cash, in Shares, or such combination of cash and Shares as the Committee in its sole discretion shall determine.
“Person” means any natural person, association, trust, business trust, cooperative, corporation, general partnership, joint venture, joint-stock company, limited partnership, limited liability company, real estate investment trust, regulatory body, governmental agency or instrumentality, unincorporated organization, or organizational entity.
“Plan” means this IBERIABANK Corporation 2019 Stock Incentive Plan.
“Prior Plan” means each of the Company’s 2016 Stock Incentive Plan, the Amended and Restated 2010 Stock Incentive Plan and the 2008 Stock Incentive Plan.
“Reporting Person” means an officer, Director, or greater than ten percent shareholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.
“Restricted Shares” mean Shares subject to restrictions imposed pursuant to Section 8 of the Plan.
“Restricted Share Units” mean the right to receive Shares granted pursuant to Section 8 of the Plan.
“Retirement” Unless otherwise provided in the Participant’s Award Agreement, means a person has attained the age of 65.
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.
“Securities Act” means of the Securities Act of 1933, as amended.
“Share Appreciation Right” or “SAR” means Awards granted pursuant to Section 7 of the Plan.
“Share” means a share of Common Stock, as adjusted in accordance with Section 12 of the Plan.
“Ten Percent Holder” means a person who owns stock representing more than ten percent (10%) of the combined voting power of all classes of stock of the Company or any Affiliate.
“Unrestricted Shares” mean Shares awarded as unrestricted shares as described in Section 8 of the Plan.
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2019 Proxy Statement |
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200 West Congress Street Lafayette, Louisiana 70501 337.521.4012 wwe.iberiabank.com
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ext 000000000.000000 ext 000000000.000000 extiBERIABANK V^teCorporation™‘000004ENDORSEMENT_LINE SACKPACK“hlI“llliillllllhlhilil“hihllhiilllMR A SAMPLEDESIGNATION (IF ANY)ADD 1ADD 2ADD 3ADD 4ADD 5ADD 6MMMMMMMMMMMMC123456789000000000.000000 ext 000000000.000000 ext 000000000.000000 ext Your vote matters—here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be received by 1:00 a.m., Central Time, onMay 7, 2019.OnlineGoetotwww. investorvote.com/IBKC or scan the QRcode— loginl details are located in the shaded bar below. Annual Meeting Proxy Card Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/IBKC0234 5678 9012 345}q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ?a| Proposals — The Board of Directors recommend a vote FOR Proposals 1, 2, 3 and 4 listed hereon.1. Election of Directors: Nominees for a three-year term expiring in 2022:01—William H. Fenster maker 02—Rick E. Maples Mark here to vote FOR all nominees Mark here to WITHHOLD vote from all nominees For All EXCEPT—To withhold authority to vote for any nominee(s), write the name(s) of such nominee(s) below.2. Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019. For Against Abstain 4. Approval of the 2019 Stock Incentive Plan. For Against Abstain3. Approval, on an advisory basis, of the compensation of the 1—1 1—1 1—1 Note: Such other business as may properly come before the Named Executive Officers. u LI LI Annual Meeting or any adjournment or postponement thereof. | Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box./ / MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE ANDC 1234567890 J NT 1UPX 405001
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Annual Meeting Admission Ticket Annual Meeting of IBERIABANK Corporation Shareholders May 7, 2019, 4:00 PM, Central TimeWindsor Court Hotel300 Gravier StreetNew Orleans, Louisiana 70130Upon arrival, please present this admission ticketand photo identification at the registration desk. Small steps make an impact. Help the environment by consenting to receive electronicdelivery, sign up at www.investorvote.com/IBKCq IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. qProxy — IBERIABANK CorporationNotice of Annual Meeting of ShareholdersProxy Solicited by Board of Directors for Annual Meeting — May 7, 2019John N. Casbon and E. Stewart Shea, III, or either of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of IBERIABANK Corporation to be held on May 7, 2019, or at any postponement or adjournment thereof.Shares represented by this proxy will be voted as specified. If no such directions are indicated, this proxy will be voted FOR Proposals 1, 2, 3 and 4. If any other business is presented as to which this proxy confers discretionary authority, this proxy will be voted as determined by a majority of the Board of Directors. At the present time, the Company knows of no other business to be brought before the Annual Meeting. You may revoke this proxy at any time before it is voted at the Annual Meeting.The undersigned shareholder acknowledges receipt from the Company, prior to execution of this proxy, of Notice of the Annual Meeting, a Proxy Statement, and the Annual Report to Shareholders. The undersigned hereby revokes any and all proxies heretofore given with respect to shares of common stock of the Company which the undersigned is entitled to vote at the Annual Meeting.(Items to be voted appear on reverse side.)c| Non-Voting ItemsMeeting AttendanceMark box to the right if you plan to attend the Annual Meeting.Change of Address — Please print new address below.Comments — Please print your comments below.
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iBERIABANK V^te Corporation™ ’ MMMMMMMMMMMM Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. â–¼ a| Proposals — The Board of Directors recommend a vote FOR Proposals 1, 2, 3 and 4 listed hereon. 1. Election of Directors: Nominees for a three-year term expiring in 2022: 01—William H. Fenstermaker 02—Rick E. Maples â–¡ Mark here to vote FOR all nominees â–¡ Mark here to WITHHOLD vote from all nominees â–¡ For All EXCEPT—To withhold authority to vote for any nominee(s), write the name(s) of such nominee(s) below. 2. Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019.For â–¡Against 1 â–¡Abstain â–¡4. Approval of the 2019 Stock Incentive Plan.For â–¡Against â–¡Abstain â–¡ 3. Approval, on an advisory basis, of the compensation of the Named Executive Officers.â–¡1 â–¡â–¡Note: Such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. | Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box.Signature 2 — Please keep signature within the box. / / 1UPX 405001
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IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proxy — IBERIABANK Corporation Notice of Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting — May 7, 2019 John N. Casbon and E. Stewart Shea, III, or either of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of IBERIABANK Corporation to be held on May 7, 2019, or at any postponement or adjournment thereof. Shares represented by this proxy will be voted as specified. If no such directions are indicated, this proxy will be voted FOR Proposals 1, 2, 3 and 4. If any other business is presented as to which this proxy confers discretionary authority, this proxy will be voted as determined by a majority of the Board of Directors. At the present time, the Company knows of no other business to be brought before the Annual Meeting. You may revoke this proxy at any time before it is voted at the Annual Meeting. The undersigned shareholder acknowledges receipt from the Company, prior to execution of this proxy, of Notice of the Annual Meeting, a Proxy Statement, and the Annual Report to Shareholders. The undersigned hereby revokes any and all proxies heretofore given with respect to shares of common stock of the Company which the undersigned is entitled to vote at the Annual Meeting. (Items to be voted appear on reverse side.)
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IBERIABANK CORPORATION
CONFIDENTIAL IBERIABANK CORPORATION RETIREMENT SAVINGS PLAN (401K)
VOTING INSTRUCTIONS
SOLICITED ON BEHALF OF THE TRUSTEE OF THE
IBERIABANK CORPORATION RETIREMENT SAVINGS PLAN
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 7, 2019
Shares of common stock of IBERIABANK Corporation (the “Company”) are held by the Retirement Savings Plan (the “Plan”) in the participants’ accounts. In accordance with the Plan’s documents, shares of the Company’s common stock held by the Plan are eligible to be counted toward the shareholder vote at the Company’s Annual Meeting of Shareholders to be held at the Windsor Court Hotel, 300 Gravier Street, New Orleans, Louisiana, on Tuesday, May 7, 2019, at 4:00 p.m., local time (the “Meeting”). Therefore, as a participant in the Plan with an investment in shares of Company common stock as of March 19, 2019, the record date for the Meeting, you are eligible to direct the vote of your proportionate share of the Company common stock held in the Plan.
The 2019 Annual Meeting Proxy Statement of the Company is available at http://ir.iberiabank.com.
The Prudential Bank & Trust, FSB is the trustee of the Retirement Savings Plan. The Trustee is directed to vote those shares of the Company common stock held in the Plan proportionately in accordance with the timely voting instructions it receives from participants. The Company has retained Computershare as its agent to receive the Plan Vote Authorization Forms completed by participants in the Plan and to tabulate the results.
The Trustee is forwarding the Confidential Plan Voting Instructions and Plan Vote Authorization Form so that you may convey your individual voting instructions to the Trustee on the matters to be considered and voted upon at the Meeting and on such other business as may properly come before the Meeting or any adjournment thereof. The Company is not aware of any business to be brought before the Meeting other than as set forth in the accompanying proxy statement. Your individual vote will not be revealed to the Company. In order to direct the voting of your proportionate share of the Company common stock held in the Plan, your vote must be received by Computershare by 5:00 p.m., Central Time, on May 2, 2019. You can vote electronically by following the instructions on the enclosed Plan Vote Authorization Form or you can sign, date, and mail the enclosed Plan Vote Authorization Form to Computershare, the voting tabulator, at the following address: Computershare, P.O. Box 505000, Louisville, KY 40233.
Your vote and the votes of other participants will be tallied by Computershare and the results provided to the Trustee who will:
| 1. | vote the shares held in the Plan on the proposals specified on the Plan Vote Authorization Form, based on the timely voting instructions they have received from participants; and |
| 2. | vote the shares as to which participants have not given timely instructions in the same proportion as the shares for which they have received timely voting instructions to vote, so long as such vote is solely in the interests of the participants and beneficiaries and in accordance with the requirements of the Employee Retirement Income Security Act of 1974, as amended. The effect of the foregoing procedure is that all shares of the Company common stock held in the Plan will be voted on the proposals specified on the Plan Vote Authorization Form in the same proportion as the votes timely received from participants |
If you have any questions regarding these Voting Instructions, please contact Human Resources at (337) 521-4041.