SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
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(Amendment No. )
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SIMMONS FIRST NATIONAL CORPORATION
(Name of Registrant as Specified in Its Charter)
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SIMMONS FIRST NATIONAL CORPORATION
March 21, 2002
Dear Shareholder:
It is our pleasure to enclose the 2001 Annual Report for your Corporation. This
past year marked our 98th year of service to our customers and the communities
we represent. We are proud to be Arkansas' largest publicly traded financial
institution headquartered in Arkansas. More importantly, we're proud to have
built the State's premier community banking franchise. We hope you will find the
reading of this report another pleasing experience.
Our annual shareholders' meeting will be held on the evening of Tuesday, April
23, 2002, at the Pine Bluff Convention Center. As is our custom, you and your
spouse, or guest are cordially invited to join us for dinner, which will be
served at 6:30 p.m. The business meeting will follow at 7:45 p.m.
Your dinner reservation form is included with your proxy, which is also enclosed
with our proxy statement, and a return envelope for your convenience. Please
read the proxy statement and return your proxy and dinner reservations promptly.
We thank you again for your support, and we look forward to seeing you on April
23.
Sincerely,
/s/ J. Thomas May
J. Thomas May
Chairman, President and Chief Executive Officer
JTM/sm
enclosure
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF SIMMONS FIRST NATIONAL CORPORATION:
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of
Simmons First National Corporation will be held at the Banquet Hall of the Pine
Bluff Convention Center, Pine Bluff, Arkansas, at 7:45 P.M., on Tuesday, April
23, 2002 for the following purposes:
1. To fix at 7 the number of directors to be elected at the meeting;
2. To elect 7 persons as directors to serve until the next annual
shareholders' meeting and until their successors have been duly
elected and qualified; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on February 15, 2002,
will be entitled to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS:
/s/ John L. Rush
John L. Rush, Secretary
Pine Bluff, Arkansas
March 21, 2002
ANNUAL MEETING OF SHAREHOLDERS
SIMMONS FIRST NATIONAL CORPORATION
P. O. BOX 7009
PINE BLUFF, ARKANSAS 71611
PROXY STATEMENT
MEETING TO BE HELD ON APRIL 23, 2002
PROXY AND PROXY STATEMENT FURNISHED ON OR ABOUT MARCH 21, 2002
THE ENCLOSED PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SIMMONS FIRST NATIONAL CORPORATION (THE "COMPANY") FOR USE AT THE ANNUAL MEETING
OF THE SHAREHOLDERS OF THE COMPANY TO BE HELD ON TUESDAY, APRIL 23, 2002, AT
7:45 P.M., AT THE BANQUET HALL OF THE PINE BLUFF CONVENTION CENTER, PINE BLUFF,
ARKANSAS, OR AT ANY ADJOURNMENT OR ADJOURNMENTS THEREOF. When such proxy is
properly executed and returned, the shares represented by it will be voted at
the meeting in accordance with any directions noted thereon, or if no direction
is indicated, will be voted in favor of the proposals set forth in the notice.
REVOCABILITY OF PROXY
Any shareholder giving a proxy has the power to revoke it at any time
before it is voted.
COSTS AND METHOD OF SOLICITATION
The costs of soliciting proxies will be borne by the Company. In addition
to the use of the mails, solicitation may be made by employees of the Company by
telephone, telegraph and personal interview. These persons will receive no
compensation other than their regular salaries, but they will be reimbursed by
the Company for their actual expenses incurred in such solicitations.
OUTSTANDING SECURITIES AND VOTING RIGHTS
At the meeting, holders of the $1.00 par value Class A common stock (the
"Common Stock") of the Company, the only class of stock of the Company
outstanding, will be entitled to one vote, in person or by proxy, for each share
of the Common Stock owned of record, as of the close of business on February 15,
2002. On that date, the Company had outstanding 7,088,535 shares of the Common
Stock; 1,070,694 of such shares were held by Simmons First Trust Company
("SFTC"), and Simmons First Bank of El Dorado, N.A., in a fiduciary capacity, of
which 195,648 shares will not be voted at the meeting. Hence, 6,892,887 shares
will be deemed outstanding and entitled to vote at the meeting.
All actions requiring a vote of the shareholders must be taken at a meeting
in which a quorum is present in person or by proxy. A quorum consists of a
majority of the outstanding shares entitled to vote upon a matter. With respect
to each proposal subject to a stockholder vote, other than the election of
directors, approval requires that the votes cast for the proposal exceed the
votes cast against it. The election of directors will be approved, if each
director nominee receives a plurality of the votes cast. All proxies submitted
will be tabulated by SFTC.
With respect to the election of directors, a shareholder may withhold
authority to vote for all nominees by checking the box "withhold authority for
all nominees" on the enclosed proxy or may withhold authority to vote for any
nominee or nominees by checking the box "withhold authority for certain
nominees" and lining through the name of such nominee or nominees for whom the
authority to vote is withheld as it appears on the enclosed proxy. The enclosed
proxy also provides a method for shareholders to abstain from voting on each
other matter presented. By abstaining, shares will not be voted either for or
against the subject proposals, but will be counted for quorum purposes. While
there may be instances in which a shareholder may wish to abstain from voting on
any particular matter, the Board of Directors encourages all shareholders to
vote their shares in their best judgment and to participate in the voting
process to the fullest extent possible.
An abstention or a broker non-vote, (i.e., when a shareholder does not
grant his or her broker authority to vote his or her shares on non-routine
matters) will have no effect on any item to be voted upon by the shareholders.
In the event a shareholder executes the proxy but does not mark the ballot
to vote (or abstain) on any one or more of the proposals, the proxy solicited
hereby confers discretionary authority to the named proxies to vote in their
sole discretion with respect to such proposals. Further, if any matter, other
than the matters shown on the proxy, is properly presented at the meeting which
may be acted upon without special notice under Arkansas law, the proxy solicited
hereby confers discretionary authority to the namedproxies to vote in their sole
discretion with respect to such matters, as well as other matters incident to
the conduct of the meeting. On the date of the mailing of this Proxy Statement,
the Board of Directors has no knowledge of any such other matter which will come
before the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth all persons known to management who own,
beneficially or of record, more than 5% of the outstanding Common Stock, the
number of shares owned by the named Executive Officers in the Summary
Compensation Table and by all Directors and Executive Officers as a group.
Name and Address of Beneficial Owner Shares Owned Beneficially [a] Percent of Class
------------------------------------ ----------------------------- ----------------
Simmons First National Corporation
Employee Stock Ownership Trust [b] 579,001 8.17%
501 Main Street
Pine Bluff, AR 71601
Barry L. Crow [c] 33,573 *
Robert A. Fehlman [d] 4,602 *
J. Thomas May [e] 131,143 1.85%
James P. Powell [f] 17,127 *
All directors and officers as a group (12 persons) 297,883 4.20%
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* The shares beneficially owned represent less than 1% of the outstanding
common shares.
[a] Under the applicable rules, "beneficial ownership" of a security means,
directly or indirectly, through any contract, relationship, arrangement,
undertaking or otherwise, having or sharing voting power, which includes the
power to vote or to direct the voting of such security, or investment power,
which includes the power to dispose of or to direct the disposition of such
security. Unless otherwise indicated, each beneficial owner named has sole
voting and investment power with respect to the shares identified.
[b] The Simmons First National Corporation Employee Stock Ownership Plan
("ESOP") purchases, holds and disposes of shares of the Company's stock. The
Executive Compensation and Retirement Committee directs the trustees of the ESOP
trust concerning when, how many and upon what terms to purchase or dispose of
such shares, other than by distribution under the Plan. Shares held by the Trust
may be voted only in accordance with the written instructions of the plan
participants, who are all employees or former employees of the Company and its
subsidiaries.
[c] Mr. Crow owned of record 8,064 shares; 11,213 shares were held in his
fully vested account in the ESOP; 2,184 shares were held in his IRA account;
1,239 were held jointly with his wife; 1,273 shares were held in a trust created
by his wife; 300 shares were held in his wife's IRA and 9,300 shares were deemed
held through exercisable incentive stock options.
[d] Mr. Fehlman owned of record 707 shares; 300 shares were held in his
wife's IRA ; 1,275 shares were held in his fully vested account in the ESOP and
2,320 shares were deemed held through exercisable incentive stock options.
[e] Mr. May owned of record 54,340 shares; 9,253 shares were held in his
IRA account; 286 shares were owned by his wife; 140 shares were owned by his
stepchildren; 6,624 shares were held in his fully vested account in the ESOP;
and 60,500 shares were deemed held through exercisable stock options.
[f] Mr. Powell owned of record 5,131 shares; 78 shares were held jointly
with his wife; 418 shares were held by his wife; 7,560 shares were held in his
fully vested account in the ESOP and 3,940 shares were deemed held through
exercisable incentive stock options.
ELECTION OF DIRECTORS
The Board of Directors of the Company recommends that the number of
directors to be elected at the meeting be fixed at seven (7) and that the
persons named below be elected as such directors, to serve until the next annual
meeting of the shareholders and until their successors are duly elected and
qualified. Each of the persons named below is presently serving as a director of
the Company for a term which ends on April 23, 2002, or such other date upon
which a successor is duly elected and qualified.
The proxies hereby solicited will be voted for the election of the nominees
shown below, unless otherwise designated in the proxy. If at the time of the
meeting any of the nominees should be unable or unwilling to serve, the
discretionary authority granted in the proxy will be exercised to vote for the
election of a substitute or substitutes. Management has no reason to believe
that any substitute nominee or nominees will be required.
The table below sets forth the name, age, principal occupation or
employment during the last five years, prior service as a director of the
Company, the number of shares and percentage of the outstanding Common Stock
beneficially owned, with respect to each director and nominee proposed, as
reported by each nominee:
Principal Director Shares Percent
Name Age Occupation [a] Since Owned [b] of Class
---- --- -------------- -------- --------- --------
Lara F. Hutt, III 66 President, Hutt Building 1995 [c] 37,254 [d] *
Material Company, Inc.
George Makris, Jr. 45 President, M. K. 1997 8,450 [e] *
Distributors, Inc.
(Beverage Distributor)
J. Thomas May 55 Chairman, President and Chief 1987 131,143 [f] 1.85%
Executive Officer of the
Company; Chairman and Chief
Executive Officer of Simmons
First National Bank
David R. Perdue 67 Vice President, JDR, Inc. 1976 19,500 [g] *
(Investments)
Harry L. Ryburn 66 Orthodontist 1976 1,236 [h] *
Henry F. Trotter, Jr. 64 President, Trotter 1995 [i] 22,852 [j] *
Ford, Inc. and President,
Trotter Auto, Inc.
William E. Clark 58 Chairman and Chief Executive 2001 0 *
Officer, CDI Contractors, LLC
(Construction); President,
Bragg's Electric Construction
Company
------------------
* The shares beneficially owned represent less than 1% of the outstanding
common shares.
[a] All persons have been engaged in the occupation listed for at least
five years.
[b] "Beneficial ownership" of a security means, directly or indirectly,
through any contract, relationship, arrangement, undertaking or otherwise,
having or sharing voting power, which includes the power to vote or to direct
the voting of such security, or investment power, which includes the power to
dispose or to direct the disposition of such security. Unless otherwise
indicated, each beneficial owner named has sole voting and investment power with
respect to the shares identified.
[c] Prior to his election in 1995, Mr. Hutt had served as a director of the
Company from 1976 through 1992. He has served continuously since 1976 as a
director of Simmons First National Bank.
[d] Mr. Hutt owned of record 30,354 shares and 6,900 shares were owned by
his wife.
[e] Mr. Makris owned of record 4,600 shares; 1,700 shares were held as
custodian for his minor children; 1,150 shares were held in his wife's
Individual Retirement Account; 1,000 shares are held in the M-K Distributors,
Profit Sharing Trust of which Mr. Makris is a trustee with shared dispositive
and voting power.
[f] Mr. May owned of record 54,340 shares; 9,253 shares were held in his
IRA account; 286 shares were owned by his wife; 140 shares were owned by his
stepchildren; 6,624 shares were held in his fully vested account in the ESOP;
and 60,500 shares were deemed held through exercisable stock options.
[g] Mr. Perdue owned of record 17,685 shares and 1,815 shares were owned by
his wife.
[h] Dr. Ryburn and his wife are general partners in a family limited
partnership which owns 61, 812 shares pursuant to which 1,236 shares held by the
partnership are attributable to Dr. Ryburn.
[i] Prior to his election in 1995, Mr. Trotter had served as a director of
the Company from 1973 through 1992.
[j] Mr. Trotter owned of record 14,332 shares and 8,520 shares were owned
by Bluff City Leasing, Inc., of which Mr. Trotter is President.
Committees and Related Matters
Among the various committees of the Board of Directors of the Company are
the Audit and Security Committee and Executive Compensation and Retirement
Committee. The board of directors of the Company has no standing nominating
committee or other committee performing a similar function.
During 2001, the Audit and Security Committee was composed of David Perdue,
Lara F. Hutt, III, Louis L. Ramsay, Jr. (non-voting Advisory Director), Mary
Pringos (Director of Simmons First National Bank), Adam R. Robinson, Jr.
(Director of Simmons First National Bank) and George Makris, Jr. This committee
provides assistance to the Board in fulfilling its responsibilities concerning
accounting and reporting practices, by regularly reviewing the adequacy of the
internal and external auditors, the disclosure of the financial affairs of the
Company and its subsidiaries, the control systems of management and internal
accounting controls. During 2001, this Committee met 12 times.
The Executive Compensation and Retirement Committee, which was composed of
W. E. Ayres (non-voting Advisory Director), George Makris, Jr., Louis L. Ramsay,
Jr.(non-voting Advisory Director), Harry L. Ryburn, Henry F. Trotter, Jr. and
Jerry Watkins during 2001, fixes the compensation of executive officers of the
Company, adopts the salary programs for other personnel and administers the
retirement and employee benefit plans of the Company. During 2001, the Executive
Compensation and Retirement Committee met 5 times.
The Board of Directors of the Company met 12 times during 2001, including
regular and special meetings. No director attended fewer than 75% of the
aggregate of all meetings of the Board of Directors and of all committees on
which such director served.
Certain Transactions
From time to time Simmons First National Bank, Simmons First Bank of
Russellville, Simmons First Bank of South Arkansas, Simmons First Bank of
Jonesboro, Simmons First Bank of Searcy, Simmons First Bank of Northwest
Arkansas and Simmons First Bank of El Dorado, N.A., banking subsidiaries of the
Company, have made loans and other extensions of credit to directors, officers,
employees and members of their immediate families, and from time to time
directors, officers and employees and members of their immediate families have
placed deposits with these banks. These loans, extensions of credit and deposits
were made in the ordinary course of business on substantially the same terms
(including interest rates and collateral) as those prevailing at the time for
comparable transactions with other persons and did not involve more than the
normal risk of collectibility or present other unfavorable features.
Director Compensation
The outside Directors of the Company are paid a $300 monthly retainer plus
$400 for each meeting of the Board and its committees attended. The Directors of
the Company who also serve as officers of the Company are paid a $300 monthly
retainer plus $100 for each meeting of the Board attended.
EXECUTIVE COMPENSATION
The tables below set forth the compensation for 1999, 2000 and 2001 of the
Chief Executive Officer and the three highest paid executive officers of the
Company, being the only executives whose total cash compensation exceeded
$100,000 during 2001.
Summary Compensation Table
--------------------------
Long Term
Annual Compensation Compensation
-------------------------------- --------------------------------------
Other
Annual Restricted Securities All Other
Name and Compen- Stock Underlying Compen-
Principal sation[b] Awards[c] Options/ sation[d]
Position Year Salary($) Bonus($)[a] ($) ($) SARs (#) ($)
--------- ---- --------- -------- --------- ---------- ---------- ---------
J. Thomas May, 2001 $308,000 $32,500 $ 9,600 $466,500 55,000 $107,899
Chief Executive 2000 $308,000 $32,500 $10,600 $ 79,500 0 $ 66,314
Officer 1999 $308,000 $60,000 $ 9,500 $ 94,500 0 $ 96,802
Barry L. Crow, 2001 $137,501 $17,500 $ 0 $ 24,490 9,000 $ 11,449
Executive Vice 2000 $132,851 $16,500 $ 0 $ 0 1,000 $ 12,267
President 1999 $128,982 $31,500 $ 0 $ 0 1,500 $ 11,229
James P. Powell, 2001 $ 98,051 $12,250 $ 0 $ 12,245 4,500 $ 8,287
Senior Vice 2000 $ 94,720 $11,500 $ 0 $ 0 500 $ 8,820
President & Auditor 1999 $ 91,961 $21,500 $ 0 $ 0 800 $ 8,300
Robert A. Fehlman, 2001 $ 92,022 $10,000 $ 0 $ 17,143 6,300 $ 6,759
Senior Vice President 2000 $ 85,582 $ 8,000 $ 0 $ 0 1,000 $ 6,971
& Controller 1999 $ 80,322 $10,000 $ 0 $ 0 1,000 $ 5,293
----------------------
[a] These amounts are earned and paid pursuant to the Simmons First
National Corporation Incentive Compensation Program, which is described in the
Compensation Committee Report on Executive Compensation.
[b] Fees paid to Directors for attendance at Board meetings of the Company
and its subsidiaries.
[c] Pursuant to terms of the SFNC Executive Stock Incentive Plan, Mr. May
was awarded a grant of 3,000 shares of restricted stock for purchase at $1.00
per share (Value at date of grant, $96,150, Value on December 31, 2001,
$93,450). The restricted shares in the grant vest over three (3) years. On May
7, 2001, after the adoption of the SFNC Executive Stock Incentive Plan - 2001,
the following executives were awarded restricted stock grants, requiring no
payment by the participant: J. Thomas May, 15,000 shares (Value at date of
grant, $367,350; Value on December 31, 2001, $482,250); Barry L. Crow, 1,000
shares (Value at date of grant, $24,490; Value on December 31, 2001, $32,150);
James P. Powell, 500 shares (Value at date of grant, $12,245; Value on December
31, 2001, $16,075); Robert A. Fehlman, 700 shares (Value at date of grant,
$17,143; Value on December 31, 2001, $22,505). The restricted shares in each
grant vest in installments over five (5) years commencing one year after grant,
except for the grant to Mr. May which vests in installments over seven (7)
years. The Corporation will pay dividends on all the restricted shares at the
same rate as all other outstanding shares of Class A Common Stock of the
Corporation.
[d] For 2001, this category includes for Mr. May contribution to the ESOP,
$9,551, the Company's matching contribution to the Section401(k) Plan, $2,125,
the accrual to his deferred compensation agreement, $71,861, benefit to Mr. May
of premiums under the split dollar life insurance program, $23,452, and other
life insurance premiums, $910; for Mr. Crow contribution to the ESOP, $8,959,
the Company's matching contribution to the Section401(k) Plan, $1,993, and life
insurance premiums, $497; for Mr. Powell contribution to the ESOP, $6,488, the
Company's matching contribution to the Section401(k) Plan, $1,444, and life
insurance premiums, $355; for Mr. Fehlman contribution to the ESOP, $5,529, and
the Company's matching contribution to the Section401(k) Plan, $1,230. Certain
additional personal benefits, including club memberships, are granted to
officers of the Company, including the named executive officers; however, in the
Company's estimation the value of such personal benefits to the named executive
officers does not exceed the lesser of $50,000 or 10% of the aggregate
compensation of any such officer.
Deferred Compensation and Change in Control Arrangements
One of the individuals named above, J. Thomas May, is a party to a deferred
compensation agreement, under the terms of which Simmons First National Bank,
agrees to pay to Mr. May, upon normal retirement at age 65, or upon death or
disability prior to age 65, a monthly sum of deferred compensation equal to one
twelfth (1/12) of fifty percent (50%) of the final average compensation (the
average compensation paid to him by the employer for the most recent five
consecutive calendar years), less the accrued monthly benefit to such individual
under the deferred annuity received upon the termination of the Company's
pension plan; such payments begin the month following retirement and continue
for 120 consecutive months or until the individual's death, whichever shall
occur later.
Further, the deferred compensation agreement provides that, in the event of
a change of control of the Company and the subsequent separation from service of
Mr. May, eligibility to receive payments under the Agreement will be
accelerated. In such circumstance, if Mr. May has attained age 60, the officer
is entitled to commence receiving the specified monthly payments under the
agreement immediately after separation from service, without any actuarial
reduction due to age. If at such time he has not attained age 60, Mr. May will
be entitled to immediately commence receiving 72 monthly payments equal to one
welfth (1/12) of fifty (50%) percent of the final average compensation, less the
accrued monthly benefit to such individual then payable under the annuity
received pursuant to the termination of the Company's pension plan.
Option/SAR Grants During the 2001 Fiscal Year
The following table provides information on option/SAR grants to the named
executive officers during 2001.
Option/SAR Grants in Last Fiscal Year
-------------------------------------
Individual Grants
----------------------------------------------------- Potential Realized
Number of Value at Assumed
Securities % of Total Annual Rates of
Underlying Options Exercise Stock Price
Options/ Granted to or Base Appreciation For
SARs Employees in Price Expiration the Option Term [a]
Name Granted (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
---- ----------- ------------ -------- ---------- ----- ------
J. Thomas May 55,000 25.91% $24.25 5/6/11 838,788 2,125,654
Barry L. Crow 9,000 4.24% $24.25 5/6/11 137,256 347,834
James P. Powell 4,500 2.12% $24.25 5/6/11 68,628 173,917
Robert A. Fehlman 6,300 2.97% $24.25 5/6/11 96,079 243,484
------------------
[a] The sum in these columns result from calculations assuming 5% and 10%
growth rates as set by the SEC and are not intended to forecast future price
appreciation of Common Stock of the Company.
Aggregated Option/SAR Exercises in the Last Fiscal Year and Fiscal Year End
Option Values
The following table sets forth information with respect to the named
executive officers concerning unexercised options held as of December 31, 2001.
Aggregated Option/SAR Exercises
in Last Fiscal Year and Fiscal Year End Option/SAR Values
---------------------------------------------------------
Shares Number of Securities Underlying Value of Unexercised
Acquired Value Unexercised Options at FY-End In-the-Money Options
on Exercise Realized Options at FY-End (#) at FY-End ($) [a]
Name (#) ($) Exercisable/ Unexercisable Exercisable/ Unexercisable
---- ----------- -------- -------------------------- --------------------------
J. Thomas May 10,500 $204,141 60,500 / 53,000 $462,245 / $393,950
Barry L. Crow 1,800 $ 19,650 9,300 / 8,300 $ 74,524 / $ 66,591
James P. Powell 0 0 3,940 / 4,160 $ 23,483 / $ 33,297
Robert A. Fehlman 0 0 2,320 / 5,980 $ 17,636 / $ 48,596
--------------------
[a] The Value Realized is computed using the difference between the market
price upon the date of exerciseand the option price. The Value of Unexercised
In-the-Money Options at FY-End is computed using $32.15, the closing price on
December 31, 2001.
Compensation Committee Interlocks and Insider Participation
During 2001, the Executive Compensation and Retirement Committee was
composed of W. E. Ayres (non-voting Advisory Director), George Makris, Jr.,
Louis L. Ramsay, Jr. (non-voting Advisory Director) Harry L. Ryburn, Henry F.
Trotter, Jr. and Jerry Watkins. None of these individuals were employed as
officers or employees of the Company during 2001. Prior to retirement in 1983
and 1995, respectively, Louis L. Ramsay, Jr. and W. E. Ayres were previously
employed by the Company in various capacities, including Chief Executive
Officer.
Compensation Committee Report on Executive Compensation
The Executive Compensation and Retirement Committee issued the following
report on the general guidelines for executive compensation and the bases for
establishing the compensation of the Chief Executive Officer:
Review of Executive Compensation Program
----------------------------------------
During 2000, the Executive Compensation and Retirement Committee appointed
a subcommittee, consisting of W. E. Ayres, Harry L. Ryburn, Jerry Watkins, and
Louis L. Ramsay, Jr. (non-voting Advisory Director), to review the executive
compensation program of the Company. The subcommittee hired a consultant to
review the Company's executive compensation program and to recommend such
changes as the consultant deemed advisable. The Subcommittee made three (3)
recommendations to the Board:
1. The adoption of a new executive stock incentive plan under which
incentive stock options, non-qualified stock options, stock appreciation rights
and restricted stock could be granted to participants. The subcommittee
recommended that 300,000 shares be allocated to the new plan. Further, the
subcommittee recommended that in administering the new executive stock incentive
plan that the participants be given larger grants of shares on a less frequent
basis as compared to the Company's past practices in administering its stock
options plans.
2. The adoption of executive severance agreements for certain executives of
the Company, certain senior management of the subsidiary banks and certain
officers whose duties were deemed to put them at substantially higher employment
risk in the event of a change in control. The executive severance agreements are
intended to give executives additional assurances concerning their continued
employment in the event the Company were to engage in discussions concerning or
consummate a transaction which involved a change in control of the Company. The
subcommittee concluded that it is in the best interests of the Company and its
stockholders to provide certain assurances regarding continued employment of
selected key officers to better assure that the Company will be able to properly
evaluate any proposed transaction and to continue the Company's operations
during any transition period.
3. The adoption of a split dollar life insurance program for J. Thomas May
to expand his compensation program to include additional life insurance
protection. The split dollar program provides $1,000,000 of death benefit
coverage. The premiums paid by the Company for the insurance protection under
the recommended program will be repaid to the Company upon the earlier of the
death of Mr. May or December 7, 2016.
The subcommittee also suggested that additional review should be undertaken
regarding the (i) advisability and structure of a broad based long term
incentive plan for management officials of the Company and its subsidiaries, and
(ii) possible revisions to the existing deferred compensation plan for Mr. May.
The Board has acted on all three recommendations. First, the new executive
stock incentive plan was presented to and approved by the shareholders at the
2001 shareholders' meeting . After the approval of the plan, following the
subcommittee recommendation, the Board granted options for 212,300 shares and
21,700 shares of Restricted Stock under the new plan to key officers of the
Company and its subsidiaries.
Second, in June, 2001, the Company entered into Executive Severance
Agreements with twenty-one (21) of the key officers of the Company and its
subsidiaries. These agreements are intended to give executives additional
assurances concerning their continued employment in the event the Company were
to engage in discussions concerning or consummate a transaction which involved a
change in control of the Company. The subcommittee concluded that it is in the
best interests of the Company and its stockholders to provide certain assurances
regarding continued employment of selected key officers to better assure that
the Company will be able to properly evaluate any proposed transaction and to
continue the Company's operations during any transition period. The agreements,
which are only effective for a period of up to two years after a change in
control occurs, provide for severance benefits ranging from an amount equal to
one year's annual salary to an amount equal to twice the executive's annual
salary plus bonus but only if the executive separates from service under certain
circumstances within the two year period.
Third, in October, 2001, the Company adopted a split dollar life insurance
program for Mr. May providing $1,000,000 in coverage. The premiums for the life
insurance policies in the program are split between the Company and Mr. May. The
aggregate premiums paid by the Company for the policies will be re-paid to the
Company upon the earlier to occur of (i) the death of Mr. May, or (ii) December
7, 2016.
At the request of the subcommittee, the Executive Compensation and
Retirement Committee has undertaken further review of the (i) advisability of
adopting a long term incentive plan and (ii) revision of the deferred
compensation plan of Mr. May. This review has not been completed.
General Compensation Guidelines for Executive Officers
------------------------------------------------------
The Company currently utilizes a unitary compensation structure for its
executive officers and the executive officers of its subsidiaries. The
compensation program consists of four elements: Salary, Incentive Compensation,
Stock Related Compensation, and Retirement Compensation.
The Company, after consultation with a nationally recognized compensation
advisory firm, has established job grades and determined the value of each job
within the Company. Subject to adjustment for unique factors affecting the job
or the executive, the Company targets the midpoint of the market salary range
for each job grade, as adjusted annually, as the guide for salaries for
executive officers, who are satisfactorily performing their duties.
The Simmons First National Corporation Incentive Compensation Program
provides compensatory incentives for executive officers to reinforce achievement
of the financial goals of the Company, its subsidiary banks and the
participating executives. At the beginning of each year, participating
executives are allocated incentive points, which are the basis of the
executive's participation within the program. Annually, performance thresholds
are established for the Company (net income threshold), each of the subsidiary
banks (net income threshold) and each of the participating executive officers
(thresholds based upon actual department income and expense factors versus
budgeted items). Incentive compensation is payable under the incentive program
for a fiscal year if (1) the Company satisfied an applicable threshold, (2) the
entity employing the executive satisfied an applicable threshold and (3) the
executive satisfied at least 75% of the applicable individual threshold.
Performance by the Company and the subsidiary banks above the thresholds may
proportionately increase the compensation of each incentive point.
Stock related compensation may consist of incentive stock options,
non-qualified options (with or without stock appreciation rights) or restricted
shares of the Company's stock. Over the years the Company has maintained several
different stock option and stock incentive plans. The Company currently
maintains an executive stock incentive plan which authorizes the granting of
incentive stock options, non-qualified options (with or without stock
appreciation rights) or restricted shares of the Company's stock to certain
executive officers. The plans are designed to provide an incentive for the
participating executive officers to enhance the long term financial performance
of the Company and the value of the Common Stock. Participation under these
plans has been offered to those executive officers whose long term employment
and job performance can significantly affect the continued profitability of the
Company and its subsidiary banks.
The Company also maintains a Profit-Sharing/Employee Stock Ownership Plan
and a Section401(k) Plan to provide retirement benefits for substantially all of
its employees, including its executive officers.
Bases for the Chief Executive Officer's Compensation
----------------------------------------------------
The compensation of the chief executive officer is set by the Executive
Compensation and Retirement Committee and approved by the Board of Directors.
The committee and the Board examine the annual market analysis provided by the
compensation consultant retained by the Company prior to setting his
compensation. The committee emphasizes incentive compensation for the chief
executive officer, through the incentive compensation program and stock related
compensation. In analyzing the compensation of the chief executive officer, the
committee evaluates his performance in managing the operations as well as the
financial results of operations of the Company. Among the criteria examined are
management and leadership, revenue growth, expense control, net earnings, market
share, acquisition and expansion activities and other factors material to the
job performance of the chief executive officer.
The chief executive officer was allocated 650 points in the incentive
compensation program. His threshold of performance was based upon the net income
of the Company (60%) and Simmons First National Bank (40%). The Company's income
for 2001 did not meet the Company's budgeted performance threshold for 2001.
However, the Company's performance was substantially affected by the declining
interest rate market, a factor beyond the control of the Company or its
executives. Based upon these events, the incentive compensation earned by the
chief executive officer under this Program was $50 per point, or $32,500.
The chief executive officer received stock option grants for 55,000 shares
at an option price of $24.25 per share. Fifteen thousand (15,000) of these
options are incentive stock options which become exercisable in installments of
3,000 shares annually commencing on the grant date. The options expire unless
exercised prior to May 6, 2011. Forty thousand (40,000) of these options are
non-qualified stock options with tandem stock appreciation rights ("SAR") which
become exercisable in installments of 8,000 shares annually commencing on the
grant date. The options expire unless exercised prior to May 6, 2011. Each
non-qualified stock option with a tandem SAR entitles the holder to either
exercise the stock option and acquire a share of stock at the option price or to
exercise the SAR and receive a cash payment in the amount of the difference
between the closing market price of the stock on the day before the exercise
less the option price. The participant can exercise the non-qualified stock
option or the SAR, but not both.
Mr. May also received restricted stock grants for 18,000 shares. He
received a grant of restricted stock under the new executive stock incentive
plan for 15,000 shares. These shares are issued immediately but his full
ownership of these shares is subject to vesting over seven (7) years, commencing
one year after the date of issuance. Three thousand (3,000) of the restricted
shares constituted the fifth and final grant of restricted stock under the
executive stock incentive plan adopted in 1997. The Board of Directors has
expressed its intention to grant the restricted stock to the chief executive
officer based upon the past performance of the Company under his leadership as
well as to provide an additional incentive for him to remain in his current
position and to enhance the future performance of the Company.
In addition, Simmons First National Bank maintains a deferred compensation
agreement for the chief executive officer, as a supplement to the retirement
benefits available under the other plans. This agreement provides for a monthly
benefit at age 65, or earlier upon death or disability, equal to 50% of the
average monthly compensation of the executive officer during the prior five
years and provides certain benefits, in the event of a change in control of the
Company and the subsequent separation from service by the chief executive
officer.
Executive Compensation & Retirement Committee
Harry L. Ryburn, Chairman W. E. Ayres George Makris, Jr.
David R. Perdue Louis L. Ramsay, Jr. Henry F. Trotter, Jr.
Jerry Watkins
Performance Graph
The graph below shows a comparison of the cumulative total shareholder
return (assuming reinvestment of dividends), as of December 31 of each year, for
the Common Stock, the S&P 500 Index and the NASDAQ Bank Stock Index, assuming a
$100 investment on December 31, 1996.
1996 1997 1998 1999 2000 2001
SFNC $100 $163 $142 $ 98 $ 92 $135
NASDAQ BANK INDEX $100 $167 $166 $160 $182 $197
S&P 500 INDEX $100 $133 $171 $208 $189 $166
Note: The results shown on the graph above is not indicative of future price
performance.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 and the
regulations issued thereunder require directors and certain officers of any
company registered under that Act to file statements on SEC Forms 3, 4 & 5 with
the Securities and Exchange Commission, showing their beneficial ownership in
securities issued by such company. Based upon a review of such statements by the
directors and officers of the Company for the preceding fiscal year, provided to
the Company by such person, the Company has identified the following person who
failed to timely file the required statements during the preceding fiscal year:
J. Thomas May reported in December, 2001 the purchase of 3,000 shares of stock
upon the exercise of an incentive stock option which should have been reported
on a Form 4 for October, 2001.
AUDIT AND SECURITY COMMITTEE
During 2001, the Audit and Security Committee was composed of Louis L.
Ramsay, Jr. (non-voting Advisory Director), Lara F. Hutt, III, George Makris,
Jr., David Perdue, Mary Pringos (Director of Simmons First National Bank) and
Adam Robinson, Jr. (Director of Simmons First National Bank). Each of the listed
committee members are independent as defined in Rule 4200 of the National
Association of Securities Dealers listing requirements. This committee provides
assistance to the Board in fulfilling its responsibilities concerning accounting
and reporting practices, by regularly reviewing the adequacy of the internal and
external auditors, the disclosure of the financial affairs of the Company and
its subsidiaries, the control systems of management and internal accounting
controls. During 2001, this Committee met 12 times.
The Audit and Security Committee issued the following report concerning its
activities related to the Company for the previous year:
The Audit and Security Committee has reviewed and discussed the audited
financial statements of the Company for the year ended December 31, 2001 with
management.
The Audit and Security Committee has discussed with BKD, LLP ("BKD"), its
independent auditors, the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards, AU 380).
The Audit and Security Committee has received the written disclosures and
the letter from independent accountants required by Independence Standards Board
Standard No. 1 (Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees) and has discussed with BKD its independence.
Based upon the foregoing review and discussions, the Audit and Security
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the last
fiscal year for filing with the Securities and Exchange Commission.
In its analysis of the independence of BKD, the Audit and Security
Committee considered whether the non- audit related professional services
rendered by BKD to the Company, were compatible with maintaining the principal
accountant's independence.
Audit and Security Committee
Louis L. Ramsay, Jr. Lara F. Hutt, III George Makris, Jr.
David Perdue Mary Pringos Adam Robinson, Jr.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
BKD, LLP ("BKD") served as the Company's auditors in 2001and has been
selected to serve in 2002. Representatives of BKD are expected to be present at
the shareholders meeting with the opportunity to make a statement if they so
desire and are expected to be available to respond to appropriate questions.
Audit Fees
----------
The aggregate fees billed to the Company for professional services rendered
by BKD for the audit of the Company's annual financial statements for the year
ended December 31, 2001 and the reviews of the financial statements included in
the Company's Form 10-Q's for 2001 was $169,300.
Financial Information Systems Design and Implementation Fees.
-------------------------------------------------------------
The Company did not retain BKD to provide any services related to financial
information systems design and implementation and accordingly no fees were paid
for this type of service.
All Other Fees
--------------
The aggregate fees billed to the Company for other professional services
(excluding audit fees and financial information systems design and
implementation fees) rendered by BKD to the Company for the year ended December
31, 2001 was $67,740. These services consisted of income tax services for the
Company ($22,790) and audits and income tax return preparation for employee
benefit plans and common trust funds sponsored or managed by the Company and its
subsidiaries ($44,950).
FINANCIAL STATEMENTS
The annual report of the Company and its subsidiaries for the year ended
December 31, 2001, including audited financial statements, is enclosed herewith.
Such report and financial statements contained therein are not incorporated into
this Proxy Statement and are not considered a part of the proxy soliciting
materials, since they are not deemed material for the exercise of prudent
judgment in regard to the matters to be acted upon at the meeting.
Upon written request by any shareholder addressed to Mr. John L. Rush,
Secretary, Simmons First National Corporation, P. O. Box 7009, Pine Bluff,
Arkansas, 71611, a copy of the Company's annual report for 2001 on Form 10-K
required to be filed with the Securities and Exchange Commission, including the
financial statements and schedules thereto, will be furnished without charge.
PROPOSALS FOR 2003 ANNUAL MEETING
Shareholders who intend to have a proposal considered for inclusion in the
Company's proxy materials for presentation at the 2003 Annual Meeting of
Shareholders must submit the proposal to the Company no later than November 21,
2002. Shareholders who intend to present a proposal at the 2003 Annual Meeting
of Shareholders without inclusion of such proposal in the Company's proxy
materials are required to provide notice of such proposal to the Company no
later than February 4, 2003. The Company reserves the right to reject, rule out
of order, or take other appropriate action with respect to any proposal that
does not comply with these and other applicable requirements.
OTHER MATTERS
Management knows of no other matters to be brought before this annual
meeting. However, if other matters should properly come before the meeting, it
is the intention of the persons named in the proxy to vote such proxy in
accordance with their best judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS:
/s/ John L. Rush
John L. Rush, Secretary
Pine Bluff, Arkansas
March 21, 2002
PROXY BALLOT
SIMMONS FIRST NATIONAL CORPORATION
April 23,2002
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS, APRIL 23, 2002
The undersigned hereby constitutes and appoints William C. Bridgforth, Lucille
R. Tlapek, and Dr. Simmie Armstrong as Proxies, each with the power of
substitution, to represent and vote as designated on this proxy card all of the
shares of common stock of Simmons First National Corporation held of record by
the undersigned on February 15, 2002, at the Annual Meeting of Shareholders to
be held on April 23, 2002, and any adjournment thereof.
This proxy, when properly executed, will be voted as directed. IF NO DIRECTION
IS GIVEN, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS.
(1) PROPOSAL TO FIX THE NUMBER OF DIRECTORS AT SEVEN.
__ FOR __ AGAINST __ ABSTAIN
(2) ELECTION OF DIRECTORS (mark only one box)
__ FOR ALL NOMINEES
__ WITHHOLD AUTHORITY FOR ALL NOMINEES
__ WITHHOLD AUTHORITY FOR CERTAIN NOMINEES below whose names have been
lined through
William E. Clark George A. Makris, Jr. J. Thomas May Henry F. Trotter, Jr.
Lara F. Hutt, III David R. Perdue Dr. Harry L. Ryburn
(3) Upon such other business as may properly come before the meeting or any
adjournment or adjournments thereof.
The undersigned acknowledges receipt of this ballot, Notice of Annual Meeting,
Proxy Statement, and Annual Report.
---------------------------------------------- -----------------
Date
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Signature(s) of Shareholder(s) Date
IMPORTANT: Please date this proxy and sign your name exactly as your name
appears and return promptly in the envelope provided.
SIMMONS FIRST NATIONAL CORPORATION
PINE BLUFF, ARKANSAS
DINNER RESERVATION CARD
Please make reservations for the shareholder's dinner on April 23, 2002, at
6:30 p.m., at the Pine Bluff Convention Center Banquet Hall.
________ I will attend.
________ A guest and I will attend.
________ I will NOT attend