earnings. The total asset growth performance goal was met on September 30, 2017, and therefore, these shares will vest on February 22, 2020. The restricted shares granted to
Mr. Allison in 2016 cliff vested on January 25, 2019. This award was based on his leadership in connection with our 2015 acquisitions, the formation of Centennial Commercial Finance Group, and the Companys overall
financial performance in 2015.
On January 18, 2019, the Committee awarded to Mr. Allison 150,000 restricted shares of our
common stock to vest in three equal annual installments beginning on January 18, 2020.
In July 2018, the Committee granted long-term
equity incentive awards to Messrs. Sims, Davis, French and Hester and other key Company and bank employees. The awards to our named executive officers consist of an aggregate of 125,000 restricted shares of our common stock subject to performance
conditions and an aggregate of 250,000 performance-based stock options. The performance goal for these awards will be met as of the end of the calendar quarter when the Company has achieved average adjusted diluted earnings per share of $0.50 per
share for four consecutive quarters or $2.00 total adjusted diluted earnings per share over a period of four consecutive quarters. In determining whether the performance goal has been met, the calculation of adjusted diluted earnings per share will
exclude
one-time
or
non-reoccurring
gains or losses. Once the performance goal has been met, the restricted shares will vest over five years in three equal annual
installments beginning on the third anniversary of the date that the performance goal is met, and the stock options will vest in five equal annual installments beginning on the first anniversary of the date that the performance goal is met. The
purposes of these awards were to provide an additional retention and performance incentive for these executives and to further align their interests with the interests of our shareholders. The restricted shares had a fair market value on the date of
grant of $23.32 per share, and the stock options had a fair market value on the date of grant of $5.56 per share based on the Black-Scholes valuation method for stock options.
Prior to the July 2018 awards, the Committee most recently granted performance-based awards to our executive officers, other than our
Chairman, in August 2015, when the Committee awarded an aggregate of 65,000 performance-based restricted shares and 350,000 performance-based stock options to Messrs. Davis, French and Hester. The performance goal for these awards consisted of
average diluted earnings per share of $0.3125 per share for four consecutive quarters or $1.25 total diluted earnings per share over a period of four consecutive quarters. This performance goal was met as of December 31, 2016. As a result, the
restricted shares will vest over five years in three equal annual installments beginning on December 31, 2019, and the stock options will vest in seven equal annual installments on each anniversary of the grant date, with the first installment
vesting on December 31, 2016, the date the performance goal was met. Additionally, on August 24, 2015, the Committee granted the same executives an aggregate of 65,000 restricted shares subject to time (or fixed) vesting, which vest over
five years in three equal annual installments, with the first installment vesting on August 24, 2018.
In April 2016, Mr. Hester
was also granted stock options representing 20,000 shares of our common stock as part of a Chairmans Award presented to him and other selected employees at the Companys 2016 Annual Meeting of shareholders. The Chairmans award also
included a cash award of $10,000. The Committee did not issue any additional equity awards to our named executive officers during 2016, 2017 or 2018.
Retirement and Insurance Benefits
Post-Termination Benefits
.
We do not have any employment, salary continuation, or severance agreements currently in effect
for any of our executive officers.
Chairmans Retirement Plan
.
In 2007, our Board of Directors, based on a
recommendation by the Compensation Committee, approved a Chairmans Retirement Plan for our Chairman, John W. Allison. The Chairmans Retirement Plan provides a supplemental retirement benefit to Mr. Allison of $250,000 per year for
10 consecutive years or until Mr. Allisons death, whichever occurs later.
The benefits under the plan became 100% vested and
commenced on Mr. Allison reaching age 65 in 2011. The vested benefits are payable over 10 years or Mr. Allisons life, whichever is greater. If Mr. Allison dies during the 10 year guaranteed benefit period, his beneficiary will
receive the remaining payments due during the guaranteed period. If he dies after the guaranteed benefit period, no further benefits will be paid. The annual benefit is paid in monthly installments.
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