UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Home BancShares, Inc.
(Name of Registrant as
Specified In Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which the transaction applies:
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(2)
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Aggregate number of securities to which the transaction applies:
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(3)
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Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of the transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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HOME BANCSHARES, INC.
719 Harkrider Street, Suite 100
Conway, Arkansas 72032
(501)
339-2929
Internet Site:
www.homebancshares.com
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 18, 2019
The Annual
Meeting of Shareholders of Home BancShares, Inc. (the Company) will be held on April 18, 2019, at 6:30 p.m. (CDT) at the Centennial Valley Country Club Events Center, located at 1600 Centennial Club Drive, Conway, Arkansas, for the
following purposes:
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(1)
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To elect directors for a term of one year.
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(2)
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To provide an advisory
(non-binding)
vote approving the Companys
compensation of its named executive officers.
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(3)
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To approve an amendment to the Companys Restated Articles of Incorporation, as amended, to increase the
number of authorized shares of common stock from 200,000,000 to 300,000,000.
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(4)
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To ratify the appointment of BKD, LLP as the Companys independent registered public accounting firm for
the next fiscal year.
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(5)
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To transact such other business as may properly come before the meeting or any adjournments thereof.
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Only shareholders of record on February 8, 2019, will be entitled to vote at the meeting or any adjournments thereof. A
list of shareholders will be available for inspection at the office of the Company at 719 Harkrider Street, Suite 100, Conway, Arkansas, 72032, beginning two business days after the date of this notice and continuing through the meeting. The stock
transfer books will not be closed.
The 2018 Annual Report to Shareholders is included in this publication.
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By Order of the Board of Directors
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C. RANDALL SIMS
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Chief Executive Officer and President
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Conway, Arkansas
February 15, 2019
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, DATE AND SIGN YOUR PROXY AND RETURN IT WITHOUT DELAY
HOW TO VOTE IF YOU ARE A SHAREHOLDER OF RECORD
Your vote is important. You can save the Company the expense of a second mailing by voting promptly. Shareholders of record can vote by
telephone, on the Internet, by mail or by attending the Annual Meeting and voting by ballot as described below. (Please note: if you are a beneficial owner of shares held in the name of a bank, broker or other holder, please refer to your proxy card
or the information forwarded by your bank, broker or other holder of record to see which options are available to you.)
The
Internet and telephone voting procedures are designed to authenticate shareholders by use of a control number and to allow you to confirm that your instructions have been properly recorded.
If you vote by telephone or on the Internet, you
do not need to return your proxy card.
Telephone and Internet voting facilities for shareholders of record will be available 24 hours a day and will close at 1:00 a.m. Central time on April 18, 2019.
VOTE BY TELEPHONE
You can vote by calling the
toll-free telephone number on your proxy card.
Easy-to-follow
voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded.
VOTE ON THE INTERNET
You also can choose
to vote on the Internet by visiting the website for Internet voting printed on your proxy card.
Easy-to-follow
prompts allow you to vote your shares and confirm that
your instructions have been properly recorded.
VOTE BY MAIL
If you choose to vote by mail, simply mark your proxy, date and sign it, and return it to Computershare in the postage-paid envelope provided.
If the envelope is missing, please mail your completed proxy card to Proxy Services, c/o Computershare Investor Services, P.O. Box 505000, Louisville, Kentucky, 40233.
VOTING AT THE ANNUAL MEETING
The method by
which you vote will not limit your right to vote at the Annual Meeting if you decide to attend in person. If your shares are held in the name of a bank, broker or other holder of record, you must obtain a legal proxy, executed in your favor, from
the holder of record to be able to vote at the Meeting.
All shares that have been properly voted and not revoked will be voted at the
Annual Meeting. If you sign and return your proxy card but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board of Directors.
HOME BANCSHARES, INC.
719 Harkrider Street, Suite 100
Conway, Arkansas 72032
(501)
339-2929
Internet Site:
www.homebancshares.com
PROXY STATEMENT
This Proxy
Statement and the accompanying proxy card are being mailed in connection with the solicitation of proxies by the Board of Directors (the Board) of Home BancShares, Inc. (the Company) for use at the Annual Meeting of
Shareholders to be held on April 18, 2019. This Proxy Statement and the accompanying proxy card are being first mailed to shareholders of the Company on or about March 5, 2019. The Notice of Annual Meeting of Shareholders was first mailed
on or about February 15, 2019, to shareholders of record as of February 8, 2019, the record date for the meeting.
The proxies
being solicited by this Proxy Statement are being solicited by the Company. The expense of soliciting proxies, including the cost of preparing, assembling and mailing the material submitted with this Proxy Statement, will be paid by the Company. The
Company will also reimburse brokerage firms, banks, trustees, nominees and other persons for the expense of forwarding proxy material to beneficial owners of shares held by them of record. Solicitations of proxies may be made personally or by
telephone, electronic communication or facsimile, by directors, officers and regular employees, who will not receive any additional compensation in respect of such solicitations.
Important Notice Regarding the Availability of Proxy Materials
for the Shareholder Meeting to be Held on April 18, 2019:
The Notice and Proxy Statement and the Annual Report on Form
10-K
are available at www.envisionreports.com/homb.
ABOUT THE ANNUAL MEETING
The questions and answers below contain summary information and may not contain all of the information that is important to you. To better
understand the nominees being solicited for directors and the proposals that are submitted for a vote, you should carefully read this entire document and other documents to which we refer.
When and Where Is the Annual Meeting?
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Date:
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Thursday, April 18, 2019
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Time:
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6:30 p.m., Central Daylight Time
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Location:
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1600 Centennial Club Drive, Conway, Arkansas
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What Matters Will Be Voted Upon at the Annual Meeting?
At our Annual Meeting, shareholders will be asked to:
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consider and vote on a proposal to elect the nominees listed in this proxy statement as directors for a term of
one year;
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consider and vote on a proposal to approve, on an advisory
(non-binding)
basis, the Companys compensation of its named executive officers;
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consider and vote on a proposal to an amendment to the Companys Restated Articles of Incorporation, as
amended to increase the number of authorized shares of common stock from 200,000,000 to 300,000,000;
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consider and vote on a proposal to ratify the appointment of BKD, LLP as the Companys independent
registered public accounting firm for the next fiscal year; and
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transact such other business as may properly come before the meeting or any adjournments thereof.
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Who Is Entitled to Vote?
Only shareholders of record at the close of business on the record date, February 8, 2019, are entitled to receive the Notice of Annual
Meeting and to vote the shares of common stock that they held on that date at the Meeting or at any postponement or adjournment of the Meeting. Each outstanding share entitles its holder to cast one vote on each matter to be voted on. As of the
close of business on February 8, 2019, there were 170,096,572 shares of the Companys common stock outstanding.
Who Can Attend the Meeting?
All shareholders as of the record date, or their duly appointed proxies, may attend the Meeting, and each may be accompanied by one
guest. Seating is limited and will be on a first-come, first-served basis. Registration will begin at 5:30 p.m., and seating will be available at approximately 6:00 p.m.
The use of cameras, videotaping equipment and recording devices will not be permitted at the Meeting.
Attendees may not bring large bags, briefcases or packages into the Meeting.
Please note that if you hold your shares in street name (that is, through a broker or other nominee), you will need to bring a
copy of a brokerage statement reflecting your stock ownership as of the record date and check in at the registration desk at the Meeting.
What
Constitutes a Quorum?
The presence at the Meeting, in person or by proxy, of the holders of a majority of the shares of common stock
outstanding on the record date will constitute a quorum, permitting the Company to conduct its business. As of the record date, 170,096,572 shares of common stock of the Company were outstanding. Proxies received, but marked as abstentions and
broker
non-votes,
will be included in the calculation of the number of shares considered to be present at the Meeting.
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Can a Shareholder Nominate a Director?
The Nominating and Corporate Governance Committee (Nominating Committee) of the Board of Directors will consider a candidate
properly and timely recommended for directorship by a shareholder or group of shareholders of the Company. The recommendation must be submitted by one or more shareholders that have beneficially owned, individually or as a group, 2% or more of the
outstanding common stock for at least one year as of the date the recommendation is submitted. Shareholder recommendations must be submitted to the Secretary of the Company in writing via certified U.S. mail not less than 120 days prior to the first
anniversary of the date of the Proxy Statement relating to the Companys previous Annual Meeting. Shareholder recommendations for the Annual Meeting of Shareholders in 2020 must be received by the Company by November 6, 2019.
Recommendations must be addressed as follows:
Home BancShares, Inc.
Attn: Corporate Secretary
P.O. Box 966
Conway,
Arkansas 72033
DIRECTOR CANDIDATE RECOMMENDATION
Generally, candidates for a director position should possess:
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relevant business and financial expertise and experience, including an understanding of fundamental financial
statements;
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the highest character and integrity and a reputation for working constructively with others;
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sufficient time to devote to meetings and consultation on Board matters; and
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freedom from conflicts of interest that would interfere with their performance as a director.
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The full text of our Policy Regarding Director Recommendations by Stockholders and Nominating and
Corporate Governance Committee Directorship Guidelines and Selection Policy are published on our website at
www.homebancshares.com
and can be found under the caption Investor Relations/Corporate
Profile/Governance Documents.
How Can I Communicate Directly with the Board?
Shareholder communications to the Board of Directors, any committee of the Board of Directors, or any individual director must be sent in
writing via certified U.S. mail to the Corporate Secretary at the following address:
Home BancShares, Inc.
Attn:
Corporate Secretary
P.O. Box 966
Conway, Arkansas 72033
Our
Stockholder Communications Policy is published on the Companys website at
www.homebancshares.com
and can be found under the caption Investor Relations/Corporate Profile/Governance
Documents.
How Do I Vote?
The
enclosed proxy card indicates the number of shares you own. There are four ways to vote:
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By Internet at the website shown on your proxy card;
we encourage you to vote this way
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By toll-free telephone at the number shown on your proxy card.
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By completing and mailing your proxy card.
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By written ballot at the Meeting.
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If you vote by Internet or telephone, your vote must be received by 1:00 a.m. Central time on April 18, 2019. If your shares are held in
street name, the instructions from your broker or nominee will indicate whether Internet or telephone voting is available and, if so, will provide details regarding how to use those systems. If you complete and properly sign the
accompanying proxy card and return it to the Company, or tender your vote via telephone or the Internet, it will be voted as you direct.
If you do not indicate your voting preferences, Brian S. Davis and Jennifer C. Floyd will vote your shares
FOR
all of the director nominees and
FOR
Proposals 2, 3 and 4.
3
If You Vote by Telephone or on the Internet, You Do
NOT
Need to Return Your Proxy
Card.
If you plan to attend the Meeting, you may deliver your completed proxy card in person. However, if your shares are held in
street name and you wish to vote your shares by written ballot at the Meeting, you will need to request and obtain a legal proxy from your broker, bank or other nominee (the stockholder of record) giving you the right to vote the shares
at the Annual Meeting, complete such legal proxy and present it to the Company at the Meeting. Even if you plan to attend the Meeting, we recommend that you submit your proxy card or voting instructions in advance so that your vote will be counted
if you later decide not to attend the Meeting.
A proxy duly executed and returned by a shareholder, and not revoked prior to or at the
Meeting, will be voted in accordance with the shareholders instructions on such proxy.
If My Shares Are Held By a Broker or Nominee, Do I Need
to Instruct the Broker or Nominee How to Vote My Shares?
Yes. If you hold shares in street name through a broker or other
nominee, your broker or nominee may not be permitted to exercise voting discretion with respect to some of the matters to be acted upon. Under current stock exchange rules, brokers who do not have instructions from their customers may not use their
discretion in voting their customers shares on certain specific matters which are not considered to be routine matters, including the election of directors, executive compensation and other significant matters. The proposals in
this Proxy Statement to elect directors and to approve on an advisory basis the Companys executive compensation are not considered to be routine matters.
Thus, if you do not give your broker or nominee specific instructions with respect
to each of these matters, your shares may not be voted on those matters and will not be counted in determining the number of shares necessary for approval.
Shares represented by such broker
non-votes
will, however, be counted in determining whether there is a quorum.
The approval
of an amendment to the Companys Restated Articles of Incorporation to increase the number of authorized shares of common stock and the ratification of BKD, LLP as the Companys independent registered public accounting firm are considered
routine matters, and therefore, if you do not give your broker or nominee specific instructions with respect to these proposals, your broker or nominee will have the discretionary authority to vote your shares on these proposals.
What Are the Boards Recommendations?
Unless you give other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The Boards recommendation is set forth together with each proposal in this Proxy Statement. In summary, the Board recommends a vote:
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FOR
the election of the nominated slate of directors (see pages
6-37).
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FOR
the approval, on an advisory
(non-binding)
basis, of
the Companys compensation of its named executive officers (see page 38).
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FOR
the approval of the amendment to the Companys Restated Articles of Incorporation, as
amended, to increase the number of authorized shares of common stock from 200,000,000 to 300,000,000 (see pages 39-40).
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FOR
the ratification of the appointment of BKD, LLP as the Companys independent registered
public accounting firm (see pages 41-43).
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What Other Business May Be Brought Before the Meeting?
As of the date of this Proxy Statement, the Board knows of no other business that may properly be, or is likely to be, brought before the
Annual Meeting. With respect to any other matter that properly comes before the Meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, at their own discretion.
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What Vote Is Required to Approve Each Proposal?
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Election of Directors
. The affirmative vote of a plurality of the votes cast in person or by proxy
at the Annual Meeting is required for the election of directors. A properly executed proxy marked WITHHOLD with respect to the election of one or more of the directors will not be voted with respect to the director or directors
indicated, although it will be counted for purposes of determining whether there is a quorum.
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Other Proposals
. For each other proposal, the affirmative vote of a majority of the votes cast in
person or by proxy at the Annual Meeting, assuming a quorum is present, will be required for approval. A properly executed proxy marked ABSTAIN with respect to any such matter will not be voted, although it will be counted for purposes
of determining whether there is a quorum. Accordingly, an abstention will have no effect on the outcome of the vote.
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The authorized common stock of the Company consists of 200,000,000 shares at $0.01 par value. As of the close of business on February 8,
2019, there were 170,096,572 shares eligible to vote.
Can I Change My Vote After I Return the Proxy Card?
Yes. Even after you have submitted your proxy, you may change your vote at any time before the proxy is exercised by filing with the Secretary
of the Company either a notice of revocation or a duly executed proxy bearing a later date. The powers of the proxy holders will be suspended if you attend the Meeting in person and so request, although attendance at the Meeting will not by itself
revoke a previously granted proxy.
What Should I Do If I Receive More Than One Set Of Voting Materials?
You may receive more than one set of voting materials, including multiple copies of this Proxy Statement and multiple proxies or voting
instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each brokerage account. If you are a registered owner and your shares are registered in more than one
name, you will receive more than one proxy card. Please vote each proxy and instruction card that you receive.
Where Can I Find The Voting Results Of
The Annual Meeting?
The Company will publish final voting results of the Annual Meeting in a Current Report on Form
8-K
filed with the Securities and Exchange Commission within four business days after the Annual Meeting on April 18, 2019.
What Do I Need To Do Now?
First, read
this Proxy Statement carefully. Then, if you are a registered owner of shares of our common stock as of February 8, 2019, you should, as soon as possible, submit your proxy by executing and returning the proxy card or by voting by telephone or on
the Internet. If you are the beneficial owner of shares held in street name, then you should follow the voting instructions of your broker or other nominee. Your shares will be voted in accordance with the directions you specify. If you
submit an executed proxy card to the Company but fail to specify voting directions, your shares will be voted in accordance with the recommendations of the Board of Directors.
You Should Carefully Read this Proxy Statement in its Entirety.
5
PROPOSAL ONE ELECTION OF DIRECTORS
Our Restated
Articles of Incorporation provide that the number of directors shall not be less than two nor more than fifteen, with the exact number to be fixed by the shareholders or the Board. The Board of Directors proposes that the nominees for directors
described below be elected for a term of one year and until their successors are duly elected and qualified. All nominees are currently serving as directors.
Each of the nominees has consented to serve the term for which he or she is nominated. If any nominee becomes unavailable for election, which
is not anticipated, the directors proxies will vote for the election of such other person as the Board may nominate, unless the Board resolves to reduce the number of directors to serve on the Board and thereby reduce the number of directors
to be elected at the meeting.
The Board of Directors Recommends that Shareholders Vote
FOR
Each of the
Nominees Listed Herein
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The names of the Companys directors and executive officers and their respective ages and positions as of February 8, 2019, are listed in
the table below.
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Name
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Age
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Positions Held with
Home BancShares, Inc.
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Positions Held with
Centennial Bank
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John W. Allison
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72
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Chairman of the Board
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Chairman of the Board
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C. Randall Sims
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64
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Chief Executive Officer, President and Director
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Director
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Brian S. Davis
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53
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Chief Financial Officer, Treasurer and Director
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Chief Financial Officer, Treasurer and Director
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Jennifer C. Floyd
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44
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Chief Accounting Officer
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Chief Accounting Officer
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Tracy M. French
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57
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Executive Officer, Director
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Chief Executive Officer, President and Director
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Kevin D. Hester
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55
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Chief Lending Officer
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Chief Lending Officer and Director
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J. Stephen Tipton
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37
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Chief Operating Officer
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Chief Operating Officer
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Donna J. Townsell
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48
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Senior Executive Vice President, Director of Investor Relations and Director
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Senior Executive Vice President and Director
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Russell D. Carter, III
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43
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Executive Officer
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Regional President
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Milburn Adams
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75
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Director
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Director
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Robert H. Adcock, Jr.
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70
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Vice Chairman of the Board
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Vice Chairman of the Board
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Richard H. Ashley
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63
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Director
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Director
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Mike D. Beebe
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72
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Director
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Jack E. Engelkes
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69
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Director
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Director
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Karen E. Garrett
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46
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Director
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James G. Hinkle
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70
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Director
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Alex R. Lieblong
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68
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Director
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Advisory Director
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Thomas J. Longe
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56
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Director
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Jim Rankin, Jr.
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51
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Director
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Director
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6
NOMINEES FOR DIRECTOR
The director nominees consist of the fifteen current members of the Board, one of which was appointed after the 2018 Annual Meeting. The
biography of each of the nominees below contains information regarding the persons service as a director, business experience, including but not limited to director positions held currently or at any time during the last five years, and the
experiences, qualifications, attributes or skills that caused the Nominating Committee and the Board to determine that the person should serve as a director.
During 2008 and 2009, the Company combined the charters of the Companys former bank subsidiaries First State Bank, Community
Bank, Twin City Bank, Marine Bank, Bank of Mountain View and Centennial Bank (of Little Rock) into a single charter and adopted Centennial Bank as the common name. As used in the following biographies and elsewhere in this Proxy Statement,
any reference to our former bank subsidiaries or to any of the six banks named in this paragraph refers to the Companys separately chartered bank subsidiary or subsidiaries as they existed prior to the merger of the banks into a
single charter.
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John W. Allison
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Director Since 1998
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John W. Allison
is the
co-founder
and has been Chairman of the
Board of Home BancShares since 1998. He also serves on the Asset/Liability Committee of Home BancShares. From 1998 to 2009, he served as Chief Executive Officer of Home BancShares. Mr. Allison has more than 35 years of banking experience,
including service as Chairman of First National Bank of Conway from 1983 until 1998, and as a director of First Commercial Corporation from 1985 (when First Commercial acquired First National Bank of Conway) until 1998. At various times during his
tenure on First Commercials board, Mr. Allison served as the Chairman of that companys Executive Committee and as Chairman of its Asset Quality Committee. Prior to its sale to Regions Financial Corporation in 1998, First Commercial
was a publicly traded company and the largest bank holding company headquartered in Arkansas, with approximately $7.3 billion in assets. Mr. Allison is a successful business owner with extensive experience in the management of banks and
bank holding companies. As the
co-founder
and former Chief Executive Officer of Home BancShares, he has intimate knowledge of the issues facing our management, and he has been a guiding figure in the
development of Home BancShares and its growth strategy. He is also the largest individual shareholder of Home BancShares, which the Board of Directors believes aligns his interests with those of our shareholders. Mr. Allison is the
brother-in-law
of Donna Townsell, one of our directors and executive officers.
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C. Randall Sims
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Director Since 1998
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C. Randall Sims is Chief Executive Officer and President of Home BancShares. Mr. Sims has served as Chief
Executive Officer of Home BancShares since 2009 and as a director of Home BancShares and Centennial Bank (formerly First State Bank) since 1998. From 1998 to 2009, he served as Secretary of Home BancShares. He currently serves as a member of the
Asset/Liability Committee. From 1998 to January 2015, Mr. Sims served as the Chief Executive Officer and President of Centennial Bank (formerly First State Bank). Prior to joining First State Bank, Mr. Sims was an executive vice president
with First National Bank of Conway. He holds a Juris Doctor degree from the University of Arkansas at Little Rock School of Law and a Bachelor of Arts degree in accounting and business administration from Ouachita Baptist University in Arkadelphia,
Arkansas. He attended the Graduate School of Banking at the University of Wisconsin and is an honor graduate of the American Bankers Association National Commercial Lending School held at the University of Oklahoma. Mr. Sims formerly served as
a Trustee at the University of Central Arkansas and was Chairman of the Conway Christian School Board for 17 years. He is currently serving on the Board of Trustees at Ouachita Baptist University. Mr. Sims educational background in
accounting, business, law and banking provides him a wide-ranging set of skills for the management of a public company such as Home BancShares. As Chief Executive Officer and President of Home BancShares and a long-time director and executive
officer of both Home BancShares and Centennial Bank, he has extensive banking and executive experience and knowledge of the Company as well as expertise in many areas, including financial, corporate governance, risk assessment, and operational
matters.
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Brian S. Davis
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Director Since 2015
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Brian S. Davis has served as the Chief Financial Officer and Treasurer of Home BancShares and Centennial Bank
and as a director of Home BancShares and Centennial Bank since July 2015. He also serves as Chairman of the Asset/Liability Committee of Home BancShares. Mr. Davis joined Home BancShares in 2004 as Director of Financial Reporting and added
Investor Relations Officer to his responsibilities in 2006. In 2010, he was promoted to Chief Accounting Officer while continuing to serve as Investor Relations Officer until his promotion to Chief Financial Officer and Treasurer in 2015. He is a
Certified Public Accountant and has 27 years of banking experience, which includes serving as Vice President of Finance for Simmons First National Corporation, Controller of Simmons First Mortgage Company, and Assistant Vice President of Finance for
Worthen Banking Corporation. Mr. Davis is a graduate of the University of Arkansas at Fayetteville. Mr. Davis has extensive experience in financial and accounting matters relating to banks and bank holding companies. Through his current
and previous roles with the Company, he provides an
in-depth
understanding of the Companys financial condition on a current and historical basis, as well as knowledge and experience with internal
controls, risk assessment, shareholder relations and management of the financial affairs of a public company.
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Milburn Adams
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Director Since 2011
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Milburn Adams has been a director of Home BancShares since October 2011 and a director of Centennial Bank
(formerly First State Bank) since 2004. He was appointed to the Audit Committee and the Compensation Committee of Home BancShares in January 2012. Prior to Mr. Adams service with First State Bank, he spent 13 years with the Arkansas
Department of Education, serving as an Area Supervisor of Special Education and Director of Evaluation and Admissions at the Arkansas School for the Deaf. This experience was followed by 19 years of service in the manufactured home business. From
1982 to 1986, he was responsible for the administration, sales, manufacturing, and distribution of manufactured homes throughout an eight state area as General Manager of Squire Homes. Mr. Adams was the President of Spirit Homes, Inc. of
Conway, Arkansas, from 1986 to 1997. He served as a Division President of Cavalier Homes, Inc. from 1997 to 2000, when Spirit Homes was acquired by Cavalier Homes, Inc. of Alabama. From 2005 to the present, Mr. Adams has been an Operations
Consultant for Reliance Health Care. Reliance, founded in 1998, provides administrative services to 41 skilled nursing facilities in Arkansas and Missouri. Mr. Adams is an experienced business person, managing and operating several businesses
in the central Arkansas area and has substantial knowledge of the banking business through his over 14 years of service on the board of our bank subsidiary.
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Robert H. Adcock, Jr.
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Director From 1998 to 2003 and Since 2007
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Robert H. Adcock, Jr. has been a director and Vice Chairman of Home BancShares since July 2007. He also serves
on the Audit Committee, Asset/Liability Committee and Nominating and Corporate Governance Committee of Home BancShares. Mr. Adcock is a
co-founder
of Home BancShares with Mr. Allison. He previously
served as a director and Vice Chairman of Home BancShares from 1998 to 2003. In June 2003, Mr. Adcock stepped down from the Board of Directors of Home BancShares to become the Arkansas State Bank Commissioner. He was reappointed as Vice
Chairman of Home BancShares in July 2007 upon completion of his four-year term as Arkansas State Bank Commissioner. Mr. Adcock retired from the First National Bank of Conway, Arkansas, in 1996 after more than 20 years of service. He presently
operates a farming operation in Gould (Lincoln County), Arkansas, and has many real estate holdings in the Conway, Arkansas, area. Mr. Adcock has an extensive background in banking, and as a
co-founder
of
Home BancShares, he has a vast knowledge of the Company and our markets. His experience as Arkansas State Bank Commissioner gives him particular insight into regulatory matters affecting the Company and the bank, as well as contacts in the banking
industry throughout Arkansas.
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Richard H. Ashley
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Director Since 2004
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Richard H. Ashley has been a director of Home BancShares since 2004 and served as Vice Chairman from 2006 to
July 2007. He also serves on the Asset/Liability Committee and the Compensation Committee of Home BancShares. He has served as a director of Centennial Bank since February 2009. He served as a director of the former Twin City Bank from 2000 until
its charter was merged into Centennial Bank in 2009, and as Chairman of Twin City Bank from 2002 to 2009. From 2007 to 2009, he was a director of Entergy Arkansas, Inc., an electric public utility company. Mr. Ashley is President and owner of
the Ashley Company, a privately held company involved in land development and investment in seven states throughout the United States since 1978. Mr. Ashley has extensive experience and knowledge with respect to real estate and real estate
financing, which is a significant part of our lending. He has substantial banking experience through his over 18 years of service on the boards of Centennial Bank and our former subsidiary bank, Twin City Bank. In addition, his service on the
Compensation Committee of Home BancShares has enhanced his knowledge of public company executive compensation matters.
8
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Mike D. Beebe
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Director Since 2016
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Mike D. Beebe was appointed to serve as a director of Home BancShares in April 2016. He is currently the
Chairman of the Compensation Committee and a member of the Asset/Liability Committee of Home BancShares. Mr. Beebe serves as a director of Tyson Foods, Inc. and a member of the Governors Council of the Bipartisan Policy Center in
Washington, D.C. He is also Of Counsel for the Roberts Law Firm, P.A. in Little Rock, Arkansas. Mr. Beebe was the Governor of the State of Arkansas from 2007 to 2015 and the states Attorney General from 2003 to 2007, prior to which he
served as a state senator for 20 years. Beebe began his law career in 1972, practicing law until 2002 at Lightle, Beebe, Raney, Bell and Simpson in Searcy, Arkansas. From 1974 to 1979, he was a member of the Board of Trustees at Arkansas State
University. After receiving a Bachelor of Arts degree in political science from Arkansas State University in 1968, Mr. Beebe completed law school at the University of Arkansas while serving in the U.S. Army Reserve from 1968 to 1974. His
extensive leadership experience, ability to collaborate and his long-time support and understanding of business bring an important perspective to the Board.
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Jack E. Engelkes
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Director Since 2004
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Jack E. Engelkes has been a director of Home BancShares since 2004 and a director of Centennial Bank (formerly
First State Bank) since 1998. He serves as Chairman of the Audit Committee and a member of the Compensation Committee of Home BancShares. He also serves as Chairman of the Audit Committee of Centennial Bank. From 1995 to 1998, he served as a
director of First National Bank of Conway. Mr. Engelkes served as managing partner in the accounting firm of Engelkes and Felts, Ltd. from 1990 through 2015. He was a director of the Conway Regional Medical Center from 2005 through 2016, and
served as Chairman of the Conway Regional Medical Center Board during 2011 and 2012. He also served as Chairman of the Board of Conway Regional Health Foundation in 2006. Mr. Engelkes holds a bachelors degree in Business and Economics
from Hendrix College in Conway. Mr. Engelkes is a Certified Public Accountant and has extensive knowledge and experience in accounting, auditing and financial reporting. He has a strong understanding of the banking business, and particularly
the Company, through his combined service over the past 23 years as a director of Home BancShares, our subsidiary bank and First National Bank of Conway. Based on that service and his other directorships, he offers valuable experience with respect
to corporate governance and compensation matters.
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Tracy M. French
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Director Since 2015
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Tracy M. French has served as a director of Home BancShares and as Chief Executive Officer and President of
Centennial Bank since January 2015. He also serves on the Asset/Liability Committee of Home BancShares. From 2009 to January 2015, Mr. French served as a Regional President for Centennial Bank. He was the President and Chief Executive Officer
and a director of our former bank subsidiary, Community Bank, from 2002 to 2009. Mr. French has over 34 years of banking experience. He is a graduate of the University of Arkansas at Fayetteville and the Southwestern Graduate School of Banking
at Southern Methodist University. Based on his extensive banking and management experience, Mr. French provides significant strategic and operational insights into the management of the Company and our bank subsidiary.
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Karen E. Garrett
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Director Since 2017
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Karen E. Garrett was appointed as a director of Home BancShares in April 2017. She serves on the Audit
Committee and the Asset/Liability Committee of Home BancShares. Mrs. Garrett currently serves as the Managing Partner of Hudson, Cisne & Co., LLP, a certified public accounting firm in Little Rock, Arkansas. Mrs. Garrett has been
a Certified Public Accountant with Hudson, Cisne & Co. since 1996 and previously served as the firms personnel and recruiting coordinator for ten years. She has been a member of the Accounting Advisory Board for both the University of
Central Arkansas and the University of Arkansas at Little Rock, and she served a five-year term on the Arkansas State Board of Accountancy from 2010 to 2015. She currently serves on the Advisory Board for the Arkansas Shakespeare Theatre.
Mrs. Garrett was the first female recipient of the Associated General Contractors of Arkansas annual Distinguished Service Award for 20 years of service to the construction industry in 2015. She is a graduate of the University of Central
Arkansas in Conway, Arkansas. Mrs. Garrett provides valuable leadership experience and expertise in tax accounting, auditing, financial statement analysis, leadership succession planning, business consulting and personnel management and
recruiting.
9
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James G. Hinkle
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Director Since 2005
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James G. Hinkle has been a director of Home BancShares since 2005. Mr. Hinkle currently serves as a
member of the Audit Committee of Home BancShares and has previously served on our Asset/Liability Committee. He has over 36 years of banking experience. He served as Chairman of the former Bank of Mountain View from 2005 until its charter was merged
into Centennial Bank in 2009. From 1995 to 2005, he served as President of Mountain View BancShares, Inc., until the companys merger into Home BancShares. He served as President of the Bank of Mountain View from 1981 to 2005. From 1996 to
2003, Mr. Hinkle served on the Arkansas Game and Fish Commission. Since 2003, Mr. Hinkle has been a director of the National Wild Turkey Federation, a national nonprofit conservation and hunting organization. Mr. Hinkle has a lengthy
background in banking and executive management through his long-time service as an officer and director of the former Bank of Mountain View and Mountain View Bancshares. In addition, he has particular knowledge of the Companys customer base in
North Central Arkansas.
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Alex R. Lieblong
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Director Since 2003
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Alex R. Lieblong has been a director of Home BancShares since 2003. He has served as an advisory director of
Centennial Bank (formerly First State Bank) since 2002, and he served as a director of First State Bank from 1998 to 2002. He also serves as Chairman of the Nominating and Corporate Governance Committee and a member of the Audit Committee of Home
BancShares. Mr. Lieblong currently serves on the board of directors of Ballard Petroleum, a privately held energy company. Since 1997, Mr. Lieblong has been an owner and general principal in the brokerage firm of Lieblong &
Associates, Inc. Prior to Lieblong & Associates, Inc., he held management positions with Paine Webber, Merrill Lynch, and E.F. Hutton. Mr. Lieblong was a founder and has been managing partner of Key Colony Fund, L.P., a hedge fund,
since 1998. He served as a director of Deltic Timber from 1997 to February 2007. He also served as a director of Lodgian, Inc., a publicly traded owner and operator of hotels, from 2006 to 2010. Mr. Lieblong has extensive experience in the
financial services industry and over a decade of experience as a director of other publicly traded and privately held companies. He has substantial knowledge of financial, regulatory, corporate governance and other matters affecting public companies
which the Board of Directors believes is valuable to the Company.
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Thomas J. Longe
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Director Since 2014
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Thomas J. Longe was appointed to serve as a director of Home BancShares in October 2014 and named to the
Audit Committee and the Nominating and Corporate Governance Committee in January 2015. Mr. Longe is the President and Chief Executive Officer of The Trianon Companies. For over 32 years he has been involved in the acquisition, development,
management and financing of commercial and residential real estate developments. He is the former Chairman, CEO and President of TIB Financial Corporation (TIB Financial), which was a publicly traded bank holding company in Florida with
$1.8 billion in assets. Mr. Longe directed the successful acquisition of a $500 million asset failed bank from the Federal Deposit Insurance Corporation and negotiated the recapitalization/sale of TIB Financial to North American
Financial Holdings. Mr. Longe began his career as a loan officer and credit analyst at Bank One, Columbus, N.A. and Comerica Bank. He graduated from Albion College with a Bachelor of Arts in Economics and from the University of Detroit with a
Masters of Business Administration. Mr. Longe brings a wealth of knowledge and experience in banking and real estate development, as well as experience managing a publicly held bank holding company and particular familiarity with our Florida
markets in Southwest and Southeast Florida and the Florida Keys.
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Jim Rankin, Jr.
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Director Since 2017
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Jim Rankin, Jr. was appointed as a director of Home BancShares in April 2017. He serves on the Compensation
Committee, the Nominating and Corporate Governance Committee and the Asset/Liability Committee of Home BancShares. Mr. Rankin has served as President of Trinity Development Company and Four Winds, Inc., two family-owned real estate development
and management companies with primary business interests in Faulkner County, Arkansas, since 1999. Mr. Rankin is also an attorney serving in private practice since 1993. Mr. Rankin has been a director of our bank subsidiary, Centennial
Bank, since 2001. He is a director of the Conway Regional Heath System and the Conway Development Corporation and a former chair of the board of directors of the Conway Regional Health System Foundation. He is a graduate of the University of
Arkansas at Fayetteville and received his Juris Doctor from the University of Arkansas at Little Rock School of Law. Mr. Rankin brings substantial experience and expertise in residential and commercial real estate, law and banking, in addition
to his knowledge and understanding of our business as a current director of Centennial Bank.
10
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Donna J. Townsell
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Director Since February 2019
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Donna J. Townsell was appointed as a director of Home BancShares, Inc. and Centennial Bank in February 2019.
Ms. Townsell has served as the Senior Executive Vice President of Home BancShares and Centennial Bank since October 2015. Since May 2018, she has served as Director of Investor Relations for Home BancShares, and from August 2016 to May 2018,
she served as Director of Marketing for Centennial Bank. Prior to becoming Senior Executive Vice President, Ms. Townsell served as Project Manager for Centennial Bank and led the banks
Build-A-Better-Bank
(B3) campaign, which included the successful effort to improve the Companys efficiency ratio, a long-term corporate goal of the Company. Ms. Townsell joined the
Company in 2007. She is a graduate of the University of Central Arkansas in Conway, Arkansas, and is the
sister-in-law
of the Companys Chairman, John W. Allison.
Ms. Townsell provides significant knowledge of the Company and its operations, along with experience and understanding of shareholder and investor relations, which the Board believes are valuable to the Company.
EXECUTIVE OFFICERS
The
biography below of each of our executive officers who is not a member of our Board of Directors contains information regarding the persons business experience, including but not limited to positions held currently or at any time during the
last five years.
Russell D. Carter, III
Russell D. Carter, III was named Executive Officer of Home BancShares in January 2018 and has served as a Regional President for Centennial
Bank since 2013. He currently serves on the banks Executive Loan Committee and Executive Risk Committee and is Chairman of the banks regional board of directors for North Arkansas. Mr. Carter has over 19 years of banking experience
and is a licensed attorney. He holds a Juris Doctor degree with honors from the University of Arkansas at Little Rocks William H. Bowen School of Law and a bachelors degree in finance from Arkansas State University in Jonesboro,
Arkansas. He is an alumnus of the Graduate School of Banking at Louisiana State University in Baton Rouge. Mr. Carter served as a state representative in the Arkansas House of Representatives from January 2009 to January 2015 and served as the
Speaker of the House from January 2013 to January 2015.
Jennifer C. Floyd
Jennifer C. Floyd has served as the Chief Accounting Officer of Home BancShares and Centennial Bank since July 2015. From July 2015 to May
2018, she also served as Investor Relations Officer for Home BancShares. Ms. Floyd joined the Company in June 2015 as Director of Financial Reporting. She began her career with Deloitte & Touche, LLP, in 1997 primarily auditing public
and private financial institutions and served as Senior Manager until joining the Company. Ms. Floyd is a Certified Public Accountant and a graduate of Harding University in Searcy, Arkansas, where she received a bachelors degree in
accounting and marketing.
Kevin D. Hester
Kevin D. Hester joined Centennial Bank (formerly First State Bank) in 1998 as Executive Vice President of Lending, and became Chief Lending
Officer of Home BancShares in 2010. He has more than 33 years of banking experience. From 1985 to 1998, Mr. Hester held various positions at First Commercial Corporation, including Executive Vice President of Lending at First Commercials
Kilgore, Texas, affiliate. Mr. Hester is a graduate of the University of Central Arkansas with a bachelors degree in accounting and is an honor graduate of the National Commercial Lending School in Norman, Oklahoma. He is a former board
member of the National Association of Government Guaranteed Lenders (NAGGL) and is still active within the organization.
J. Stephen Tipton
J. Stephen Tipton was appointed to serve as the Chief Operating Officer of Home BancShares and Centennial Bank in August 2015. Mr. Tipton
most recently served as a Regional Vice President of Centennial Bank. He began his banking career in 2005 and joined Centennial Bank in 2006. Prior to becoming Regional Vice President, Mr. Tipton served as Director of Credit Risk Management
during 2013 and as Commercial Lender from 2009 to 2012. Mr. Tipton has a vast array of experience in retail, business development, lending and acquisitions. He is a graduate of the University of Arkansas at Fayetteville.
11
CORPORATE GOVERNANCE
Duties of the Board
The Board of
Directors has the responsibility to serve as the trustee for the shareholders. It also has the responsibility for establishing broad corporate policies and for the overall performance of the Company. The Board, however, is not involved in
day-to-day
operating details. Members of the Board are kept informed of the Companys business through discussion with the Chief Executive Officer, Chief Financial
Officer and other officers, by reviewing analyses and reports sent to them quarterly, and by participating in Board and Committee meetings.
Corporate
Governance Guidelines and Policies
We believe that good corporate governance helps ensure that the Company is managed for the
long-term benefit of its shareholders. We continue to review our corporate governance policies and practices, corporate governance rules and regulations of the Securities and Exchange Commission (the SEC), and the listing standards of
the NASDAQ Global Select Market on which our common stock is traded. The Board has adopted various corporate governance guidelines and policies to assist the Board in the exercise of its responsibilities to the Company and its shareholders. The
guidelines and policies address, among other items, director independence and director qualifications. You can access and print our corporate governance guidelines and policies, including the charters of our Audit Committee, Compensation Committee,
Nominating and Corporate Governance Committee, our Corporate Code of Ethics for Directors, Executive Officers and Employees and other Company policies and procedures required by applicable law or regulation, on our website at
www.homebancshares.com
under the caption Investor Relations/Corporate Profile/Governance Documents.
Director Independence
NASDAQ rules
require that a majority of the directors of NASDAQ-listed companies be independent. An independent director generally means a person other than an officer or employee of the listed company or its subsidiaries, or any other
individual having a relationship, which, in the opinion of the listed companys board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Certain categories of persons are
deemed not to be independent under the NASDAQ rules, such as persons employed by the listed company within the last three years, and persons who have received (or whose immediate family members have received) payments exceeding a specified amount
from the listed company within the last three years, excluding payments that are not of a disqualifying nature (such as compensation for board service, payments arising solely from investments in the listed companys securities, and benefits
under a
tax-qualified
retirement plan). NASDAQ rules impose somewhat more stringent independence requirements on persons who serve as members of the audit committee or the compensation committee of a listed
company.
Of the fifteen persons who currently serve on our Board of Directors, we believe that Messrs. Adams, Adcock, Ashley, Beebe,
Engelkes, Hinkle, Lieblong, Longe, Rankin and Mrs. Garrett are independent for purposes of NASDAQ rules. Messrs. Allison, Davis, French and Sims and Ms. Townsell are not considered independent because they are officers of Home
BancShares. The Board has also determined that no member of the Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee has any material relationship with the Company (either directly or indirectly as a partner,
shareholder or officer of an organization that has a relationship with the Company) and that all members of these committees meet the criteria for independence under the NASDAQ listing standards.
Board Structure and Role in Risk Oversight
The Board of Directors has since 2009 separated the positions of Chairman and Chief Executive Officer (CEO). The primary purpose of
installing a separate CEO in addition to the Chairman was to facilitate and strengthen the succession of management of the Company. This separation of Chairman and CEO also allows for greater oversight of the Company by the Board. The Board is
actively involved in oversight of risks that could affect the Company. This oversight is conducted primarily through committees of the Board, as disclosed in the description of each of the committees below and in the charters of each of the
committees, but the full Board has retained responsibility for general oversight of risks. The Board satisfies this responsibility through full reports by each committee chair regarding the committees considerations and actions, as well as
through regular reports directly from officers responsible for oversight of particular risks within the Company.
12
Code of Ethics
We have adopted a Code of Ethics that applies to all of our directors, officers, and employees. We believe our Code of Ethics is reasonably
designed to deter wrongdoing and to promote honest and ethical conduct, including the ethical handling of conflicts of interest, full, fair and accurate disclosure in filings and other public communications made by us, compliance with applicable
laws, prompt internal reporting of ethics violations, and accountability for adherence to the Code of Ethics. This Code of Ethics is published in its entirety on our website at
www.homebancshares.com
under the caption Investor
Relations/Corporate Profile/Governance Documents. We will post on our website any amendment to this code and any waivers of any provision of this code made for the benefit of any of our senior executive officers or
directors.
BOARD MEETINGS AND COMMITTEES OF THE BOARD
The business of the Company is managed under the direction of the Board of Directors, who meet on a regularly scheduled basis during the
calendar year to review significant developments affecting the Company and to act on matters that require Board approval. Special meetings are also held when Board action is required on matters arising between regularly scheduled meetings. Written
consents to action without a meeting may be obtained if the Company deems it more appropriate.
All members of the Board are strongly
encouraged to attend each meeting of the Board and meetings of the Board committees on which they serve, as well as the Annual Meeting. The Board of Directors held four regularly scheduled meetings and one special meeting during calendar year 2018.
During this period each of our current Board members participated in at least 75% of the aggregate of the meetings of the Board and the Board committees on which the director served during the period in which the member served as a director, with
the exception of Mr. Lieblong. In addition, all of the current Board members attended the Companys Annual Meeting in 2018. Our Director Attendance Policy is published on our website at
www.homebancshares.com
under the
caption Investor Relations/Corporate Profile/Governance Documents.
Our Board of Directors has four
standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee and the Asset/Liability Committee. Committee members are elected annually by the Board and serve until their successors are
elected and qualified or until their earlier resignation or removal.
The following table discloses the Board members who serve on each of
the Boards committees and the number of meetings held by each committee during calendar year 2018.
Committees of the Board
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Audit
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Compensation
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Nominating and
Corporate
Governance
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Asset/Liability
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Milburn Adams
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X
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X
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Robert H. Adcock, Jr.
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X
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X
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X
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John W. Allison
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X
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Richard H. Ashley
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X
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X
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Mike D. Beebe
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Chair
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X
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Brian S. Davis
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Chair
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Jack E. Engelkes
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Chair
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X
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Tracy M. French
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X
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Karen E. Garrett
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X
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X
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James G. Hinkle
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X
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Alex R. Lieblong
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X
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Chair
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Thomas J. Longe
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X
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X
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C. Randall Sims
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X
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Jim Rankin, Jr.
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X
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X
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X
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Number of Meetings
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8
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5
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2
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4
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13
Audit Committee
The Audit Committee assists the Board in fulfilling its oversight responsibility relating to the integrity of our accounting and financial
reporting processes and our financial statements, our compliance with legal and regulatory requirements, the independent auditors qualifications and independence, and the performance of our internal audit function and our independent auditors.
In fulfilling its duties, the Audit Committee, among other things:
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prepares the Audit Committee report for inclusion in the annual proxy statement;
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appoints, compensates, retains and oversees the independent auditors;
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pre-approves
all auditing and appropriate
non-auditing
services performed by the independent auditor;
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discusses with the internal and independent auditors the scope and plans for their respective audits;
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reviews the results of each quarterly review and annual audit by the independent auditors;
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reviews the Companys financial statements and related disclosures in the Companys quarterly and
annual reports prior to filing with the SEC;
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reviews the Companys policies with respect to risk assessment and risk management;
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reviews the Companys internal controls, the results of the internal audit program, and the Companys
disclosure controls and procedures and quarterly assessment of such controls and procedures;
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establishes procedures for handling complaints regarding accounting, internal accounting controls, and auditing
matters, including procedures for confidential, anonymous submission of concerns by employees regarding such matters; and
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reviews the Companys legal and regulatory compliance programs.
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The Board of Directors has adopted a written charter for the Audit Committee that meets the applicable standards of the SEC and NASDAQ. A copy
of the Audit Committee Charter is published on our website at
www.homebancshares.com
under the caption Investor Relations/Corporate Profile/Governance Documents.
The Audit Committee is comprised of Jack E. Engelkes, Chairman, Milburn Adams, Robert H. Adcock, Jr., James G. Hinkle, Karen E. Garrett,
Thomas J. Longe and Alex R. Lieblong. The Board has determined that each member of the Committee satisfies the independence requirements of the NASDAQ listing standards, that each member of the Committee is financially literate, knowledgeable and
qualified to review financial statements, and that Mr. Engelkes and Mrs. Garrett each has the attributes of an audit committee financial expert as defined by the regulations of the SEC.
Compensation Committee
The Compensation
Committee aids the Board in discharging its responsibility with respect to the compensation of our executive officers and directors. The Compensation Committee is responsible for evaluating and approving the Companys compensation plans and
policies and for communicating the Companys compensation policies to shareholders in our annual proxy statement. In fulfilling its duties, the Compensation Committee, among other things:
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reviews and approves corporate goals and objectives relevant to the compensation of our Chairman and our CEO;
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evaluates the performance and determines the annual compensation of the Chairman and the CEO in accordance with
these goals and objectives;
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reviews and approves the amounts and terms of the annual compensation for our other executive officers;
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reviews and approves employment agreements, severance agreements or arrangements, retirement arrangements, change
in control agreements/provisions and special supplemental benefits for the executive officers;
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reviews and makes recommendations to the Board with respect to incentive based compensation plans and equity
based plans, and establishes criteria for and grants awards to participants under such plans;
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reviews and recommends to the Board the compensation for our directors; and
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reviews and recommends to the Board that the Compensation Discussion and Analysis be included in the annual proxy
statement and Form
10-K
annual report.
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14
The Board of Directors has adopted a written charter for the Compensation Committee that meets
the applicable standards of the SEC and NASDAQ. The Compensation Committee Charter is published on our website at
www.homebancshares.com
under the caption Investor Relations/Corporate Profile/Governance
Documents.
The Compensation Committee is comprised of Mike D. Beebe, Chairman, Milburn Adams, Richard H. Ashley, Jack E. Engelkes
and Jim Rankin, Jr. The Board has determined that each member of the Committee satisfies the independence requirements of the NASDAQ listing standards and qualifies and as an outside director for purposes of Section 162(m) of the
Internal Revenue Code of 1986, as amended, and as a nonemployee director for purposes of Rule
16b-3
under the Securities Exchange Act of 1934, as amended.
The Compensation Committee charter authorizes the Committee to delegate to subcommittees of the Committee any responsibility the Committee
deems necessary or appropriate. The Committee shall not, however, delegate to a subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the Committee as a whole.
The Chairman, after consulting with executive officers and others, makes recommendations to the Committee regarding the form and amount of
compensation paid to each executive officer. Additionally, the Chairman, our Chief Operating Officer (COO) and the CEO of our bank subsidiary attend the Committee meetings and answer questions and provide information to the Committee as
requested. This normally includes a history of the primary compensation components for each executive officer, including an internal pay equity analysis. The Committee then considers the recommendations of the Chairman, the information provided by
the COO and the CEO of our bank subsidiary, historical compensation of each executive, and other factors. Based on this information, the Committee sets the compensation for the executive officers and reports its decisions to the Board of Directors.
The executive officers do not make any recommendations with regard to director compensation. Although the executive officers are involved in the process of evaluating compensation, including their own, the final decision is made by the Committee or
the Board. The Committee understands the inherent conflict in obtaining information from the Chairman and executive officers, but believes that this information is valuable in determining the appropriate compensation. The CEO is not present during
the Committees deliberations or voting regarding his compensation.
Historically, the Committee meets subsequent to year end to
finalize discussion regarding the Companys performance goals for the previous and current year with respect to performance-based compensation to be paid to executive officers and to approve its report for the annual proxy statement. These
goals are approved within 90 days of the beginning of the year. Each year in December and/or January, the Committee generally discusses any new compensation issues, the compensation, bonus and incentive plan award analyses and the engagement of a
compensation consultant for annual executive and director compensation. The Committee also meets in December and/or January to:
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review and discuss the recommendations made by the Chairman;
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review the performance of the Company and the individual officers;
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review the level to which the Companys performance goals were attained and approve short-term cash bonus
and long-term incentive awards; and
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determine the executive officers base salaries for the following year.
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Management also advises the full Board, including the Committee members, throughout the year of new issues and developments regarding
executive compensation.
Compensation Committee Interlocks And Insider Participation
During 2018, Messrs. Adams, Ashley, Beebe, Engelkes and Rankin served as members of the Compensation Committee. None of these five directors
during 2018 or at any previous time served as an officer or employee of Home BancShares or our bank subsidiary. During 2018, none of our executive officers served as a director or member of the compensation committee (or group performing equivalent
functions) of any other entity for which any of our independent directors served as an executive officer.
Nominating and Corporate Governance
Committee
The Nominating and Corporate Governance Committee develops and maintains the corporate governance policies of the Company.
The Committees responsibilities include, among other things:
15
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developing and maintaining the Companys corporate governance policies;
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identifying, screening and recruiting qualified individuals to become Board members;
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making recommendations regarding the composition of the Board and its committees;
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assisting the Board in assessing the Boards effectiveness;
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assisting management in preparing the disclosures regarding the Committees operations to be included in the
Companys annual proxy statement; and
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reviewing and approving all related party transactions required to be disclosed in our annual proxy statement.
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The Board of Directors has adopted a written charter for the Nominating and Corporate Governance Committee that meets
the applicable standards of the SEC and NASDAQ. The Nominating and Corporate Governance Committee Charter is published on our website at
www.homebancshares.com
under the caption Investor Relations/Corporate
Profile/Governance Documents.
The Nominating and Corporate Governance Committee is comprised of Alex R. Lieblong,
Chairman, Robert H. Adcock, Jr., Thomas J. Longe and Jim Rankin, Jr. The Board has determined that all members of the Committee satisfy independence requirements of the NASDAQ listing standards. The Nominating and Corporate Governance Committee met
on January 18, 2019, to select director nominees (except Ms. Townsell, who was subsequently nominated by the Board) to be voted on at the Annual Meeting.
Director Candidate Qualifications
The Nominating and Corporate Governance Committee Directorship Guidelines and Selection Policy outlines the qualifications the Committee looks
for in a director nominee. Generally, the candidate should possess:
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relevant business and financial expertise and experience, including an understanding of fundamental financial
statements;
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the highest character and integrity and a reputation for working constructively with others;
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sufficient time to devote to meetings and consultation on Board matters; and
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freedom from conflicts of interest that would interfere with performance as a director.
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More specifically, the Nominating Committee seeks candidates who possess various qualifications, skills, or other factors it deems
appropriate. These factors may include leadership experience in business or other relevant fields, knowledge of the Company and the financial services industry, experience in serving as a director of another financial institution or public company
generally, education, wisdom, integrity, analytical ability, familiarity with and participation in the communities served by the Company and its subsidiaries, commitment to and availability for services as a director, and any other factors the
Committee deems relevant.
In addition, the Board of Directors has adopted a policy under which a director will not be eligible to stand
for
re-election
once he or she has reached 75 years of age or if he or she will reach the age of 75 during the first six months of the calendar year in which he or she is to stand for
re-election.
However, our Board of Directors has granted a waiver of this mandatory retirement age to Milburn Adams until the Companys 2020 Annual Meeting of Shareholders.
Director Nominations Process
After assessing and considering prevailing business conditions of the Company, legal and listing standard requirements for Board composition,
the size and composition of the current Board, and the skills and experience of current Board members, any of the Chairman, the Nominating Committee or any Board member may identify the need to add a Board member or to fill a vacancy on the Board.
The Committee identifies qualified director nominees from among persons known to the members of the Committee, by reputation or otherwise, and through referrals from trusted sources, including senior management, existing Board members, shareholders
and independent consultants hired for such purpose. The Committee may request that senior officers of the Company assist the Committee in identifying and assessing prospective candidates who meet the criteria established by the Board. The Committee
will consider director candidates recommended by shareholders in accordance with the procedures set forth in the Companys policy regarding director recommendations by shareholders. This policy is described above under the caption Can a
Shareholder Nominate a Director? and is published on our website at
www.homebancshares.com
under the caption Investor Relations/Corporate Profile/Governance Documents. The Committee intends to
evaluate any candidate recommended by a shareholder in the same manner in which it evaluates candidates recommended by other sources, according to the criteria described below.
16
The Nominating Committee evaluates candidates based upon the candidates qualifications,
recommendations, or other relevant information, which may include a personal interview. The Nominating Committee has determined that the Board as a whole must have the right diversity, mix of characteristics and skills for the optimal functioning of
the Board in its oversight of the Company. The Board believes it should be comprised of persons with skills in areas such as banking, finance, accounting, sales and marketing, law, strategic planning and leadership of large, complex organizations.
The Nominating Committee prefers a mix of background and experience among the Boards members but does not follow any ratio or formula to determine the appropriate mix. Rather, it uses its judgment to identify nominees whose backgrounds,
attributes and experiences, taken as a whole, will contribute to the high standards of Board service to the Company.
In addition to the
targeted skill areas, the Nominating Committee looks for a strong record of achievement in key knowledge areas that it believes are critical for directors to add value to a Board including:
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Strategy knowledge of the Companys business model, the formulation of corporate strategies,
knowledge of key competitors and banking markets;
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Leadership skills in coaching senior executives and the ability to assist in their development;
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Organizational issues understanding of strategy implementation, management processes, group effectiveness
and organizational design;
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Relationships understanding how to interact with investors, regulatory bodies, and communities in which
the Company operates;
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Functional understanding of finance matters, financial statements and auditing procedures, technical
expertise, legal issues, information technology and marketing; and
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Ethics the ability to identify and raise key ethical issues concerning the activities of the Company and
senior management as they affect the business community and society.
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The Committee meets to consider and approve the
candidates to be presented to the Board. The Committee then presents its proposed nominees to the full Board. The Board considers the recommendations of the Committee and approves candidates for nomination.
The Nominating and Corporate Governance Committee Directorship Guidelines and Selection Policy is published on our website at
www.homebancshares.com
under the caption Investor Relations/Corporate Profile/Governance Documents.
Asset/Liability Committee
Our
Asset/Liability Committee consists of Brian S. Davis, Chairman, Robert H. Adcock, Jr., John W. Allison, Richard H. Ashley, Mike D. Beebe, Tracy M. French, Karen E. Garrett, C. Randall Sims and Jim Rankin, Jr. The Asset/Liability Committee meets
quarterly and is primarily responsible for:
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development and control over the implementation of liquidity, interest rate and market risk management policies;
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review of interest rate movements, forecasts, and the development of the Companys strategy under specific
market conditions; and
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continued monitoring of the overall asset/liability structure of our bank subsidiary to minimize interest rate
sensitivity and liquidity risk.
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17
DIRECTOR COMPENSATION
The following table sets forth elements of compensation awarded to or paid by us to our directors, other than our directors who are named
executive officers, during the fiscal year ended December 31, 2018:
Director Compensation Table
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Name
|
|
Fees
earned
or paid in
cash
(1)
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Stock
awards
(2)(3)
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Option
awards
(2)(3)
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Non-equity
incentive plan
compensation
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Change in
pension value
and
nonqualified
compensation
earnings
|
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All other
compensation
(4)
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Total
|
|
Milburn Adams
|
|
$
|
39,075
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|
|
$
|
37,155
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|
|
|
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|
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|
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$
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5,510
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|
|
$
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81,740
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Robert H. Adcock, Jr.
|
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35,725
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|
|
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37,155
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|
|
|
|
|
|
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|
|
|
|
|
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6,818
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|
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79,698
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Richard H. Ashley
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126,050
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|
|
|
37,155
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|
|
|
|
|
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16,818
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|
|
|
180,023
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Mike D. Beebe
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27,100
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|
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37,155
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|
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6,278
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|
|
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70,533
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Jack E. Engelkes
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133,575
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|
|
|
37,155
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|
|
|
|
|
|
|
|
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16,818
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|
|
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187,548
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Karen E. Garrett
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|
35,100
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|
|
|
37,155
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|
|
|
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|
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5,208
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|
|
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77,463
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James G. Hinkle
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25,550
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|
|
|
37,155
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|
|
|
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|
|
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|
|
|
|
|
|
6,818
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|
|
|
69,523
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Alex R. Lieblong
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|
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13,500
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|
|
|
37,155
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,818
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|
|
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57,473
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Thomas J. Longe
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|
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118,850
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|
|
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37,155
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6,818
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|
|
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162,823
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Jim Rankin, Jr.
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|
|
112,150
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|
|
|
37,155
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|
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15,208
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164,513
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Donna J. Townsell
(5)
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583,000
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336,500
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|
|
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180,124
|
(6)
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1,099,624
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(1)
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Includes Company Board of Directors and committee retainers and fees, subsidiary bank director fees, subsidiary
bank advisory board fees and subsidiary bank committee fees.
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(2)
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Restricted stock awards and stock options are based on the grant date fair value and are calculated pursuant to
the provisions of FASB ASC Topic 718 Compensation Stock Compensation. On January 19, 2018, each of our then serving non-employee directors was granted 1,500 restricted shares of our common stock with a grant date fair value of
$24.77 per share. On April 19, 2018, Ms. Townsell was awarded 10,000 stock options with a grant date fair value of $5.85 per share. On July 19, 2018, Ms. Townsell was awarded 25,000 performance-based restricted shares of common stock and 50,000
performance-based stock options with grant date fair values of $23.32 per share and $5.56 per share, respectively.
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(3)
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As of December 31, 2018, each of our
non-employee
directors,
except Mr. Beebe, Mrs. Garrett and Mr. Rankin, held 4,500 restricted shares of our common stock and the following aggregate number of outstanding options to acquire our common stock: Mr. Ashley, 12,000; Mr. Engelkes, 17,425
and Mr. Lieblong, 1,425. Mr. Beebe held 3,666 restricted shares of our common stock as of December 31, 2018, and Mrs. Garrett and Mr. Rankin each held 1,500 restricted shares as of December 31, 2018. Mr. Adams,
Mr. Adcock, Mr. Beebe, Mrs. Garrett, Mr. Hinkle, Mr. Longe and Mr. Rankin each held no options to acquire our common stock as of December 31, 2018. Ms. Townsell held 58,333 restricted shares of our common
stock and 220,000 options to acquire our common stock as of December 31, 2018.
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(4)
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Includes director gifts for each
non-employee
director, special
director bonus of $10,000 for Mr. Ashley, Mr. Engelkes and Mr. Rankin and income realized from restricted stock dividends, $2,300 for each of our
non-employee
directors, except Mr. Beebe
who received $1,760, Mrs. Garrett and Mr. Rankin who each received $690. See footnote 6 below for information regarding Ms. Townsell.
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(5)
|
Ms. Townsell was appointed as a director of the Company and its bank subsidiary on February 5, 2019.
The 2018 compensation reported for Ms. Townsell was for her services as an executive officer. She does not receive any additional compensation for service as a director of the Company or its bank subsidiary.
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(6)
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Includes salary, $99,231; annual bonus, $40,000; the cash portion of Ms. Townsells Chairmans
award, $10,000; 401(k) contribution, $3,775; executive gifts, $3,518; and income realized from restricted stock dividends, $23,600.
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18
During 2018, we paid the following compensation to each of our
non-employee
directors and our Chairman for their service on the holding company Board and Board committees:
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an annual cash retainer of $8,000.
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an additional annual cash retainer of $2,500 to the chairmen of the Audit and Compensation Committees.
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$2,000 ($4,000 for our Chairman of the Board) for each Board meeting attended.
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$1,000 ($2,000 for the chairman) for the January Compensation Committee meeting.
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$500 ($1,000 for the chairman) for each other Compensation Committee meeting attended.
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$500 ($1,000 for the chairman) for each Audit Committee meeting attended.
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$500 for each Asset/Liability Committee meeting attended.
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$250 ($500 for the chairman) for each Nominating and Corporate Governance Committee meeting attended.
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Only our
non-employee
directors and our Chairman of the Board received
committee attendance fees during 2018. In addition, on January 19, 2018, we granted each of our then-serving
non-employee
directors 1,500 restricted shares of our common stock which will vest annually in
three equal installments beginning on January 19, 2019. The compensation paid to our Chairman of the Board and our other employee directors who are named executive officers of the Company is included in the Compensation Discussion and
Analysis and the related executive compensation tables in this Proxy Statement.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Banking Transactions.
Most of our directors and officers, as well as the firms and businesses with which they or members of
their immediate families are associated, are customers of our bank subsidiary. Our bank subsidiary has engaged in a variety of loan transactions in the ordinary course of business with individuals and their families and businesses, and it is
anticipated that such transactions will occur in the future. In the case of all such related party transactions in 2018, each transaction was approved by either the Audit Committee, the Nominating and Corporate Governance Committee, the Board of
Directors or the bank subsidiarys board of directors. These loans were made in the ordinary course of business on substantially the same terms, including interest rates and collateral requirements, as those prevailing at the time for
comparable loans with persons not related to us. In the opinion of our management, those loan transactions do not involve more than a normal risk of collectability or present other unfavorable features.
We believe that all extensions of credit by our bank subsidiary to its directors and officers and to directors and officers of the Company,
either directly or as guarantors, were made in conformity with the requirements of Federal Reserve Board Regulation O. As of December 31, 2018, the aggregate amount outstanding on these loans, including available borrowings, was approximately
$56.6 million, of which approximately $39.4 million was attributable to the largest borrowing relationship. None of these loans are
non-accrual,
past due 90 days or more, restructured or potential
problems.
Other Transactions.
We lease certain properties from persons who are members of our Board. During 2018, the aggregate
payments we made, directly or indirectly, to each of these directors for the various leases were less than $120,000. We believe the terms of each of these transactions are no less favorable to us than we could have obtained from an unaffiliated
third party.
We expect we will continue to engage in similar banking and business transactions in the ordinary course of business with
our directors, executive officers, principal shareholders and their associates. All proposed related party transactions are presented to the Nominating and Corporate Governance Committee of our Board of Directors for consideration and approval. The
Committee does not currently have any formal policies or procedures with respect to its review, approval, or ratification of related party transactions, but considers each related party transaction or proposed related party transaction on a
case-by-case
basis. According to its charter, the Committee follows the definition of related party transaction provided in the SECs regulations under the
Securities Act of 1933.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934, as amended (the Exchange Act), requires each director, officer, and any
individual beneficially owning more than 10 percent of the Companys common stock to file reports on Forms 3, 4, and 5 disclosing beneficial ownership and changes in beneficial ownership of the common stock of the Company with the SEC
within specified time frames. These specified time frames require Form 3 filings to be made within 10 days after the person becomes a reporting person. Changes in ownership generally must be filed on Form 4 within two business days of the
transaction. Based solely on information provided to the Company by individual directors and officers, we believe that all our Section 16 filers complied with the filing requirements during the fiscal year, except that one Form 4 to report the
purchase of shares of common stock by Milburn Adams and two Form 4 filings to report a sale and two purchases, respectively, of shares of common stock by Jim Rankin, Jr. were not filed timely.
19
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The following table sets forth certain information as of January 31, 2019, concerning the number and percentage of shares of our common
stock beneficially owned by our directors, our named executive officers, and all of our directors and executive officers as a group, and by each person known to us who beneficially owned more than 5% of the outstanding shares of our common stock.
Information in this table is based upon beneficial ownership concepts described in the rules issued under the Exchange
Act. Under these rules, a person is deemed to be a beneficial owner of any shares of our common stock if that person has or shares voting power, which includes the power to vote or direct the voting of the shares, or investment
power, which includes the right to dispose or direct the disposition of the shares. Thus, under the rules, more than one person may be deemed to be a beneficial owner of the same shares. A person is also deemed to be a beneficial owner of any
shares as to which that person has the right to acquire beneficial ownership within 60 days from January 31, 2019.
Except as
otherwise indicated, all shares are owned directly, and the named person possesses sole voting and investment power with respect to his or her shares. The address for each of our directors and named executive officers is c/o Home BancShares, Inc.,
719 Harkrider Street, Suite 100, Conway, Arkansas 72032.
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Name of Beneficial Owner
|
|
Amount and
Nature of
Beneficial
Ownership
|
|
|
Percent of Shares
Outstanding
(1)
|
|
5% or greater holders:
|
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|
|
|
|
|
|
BlackRock, Inc.
(2)
|
|
|
19,800,521
|
|
|
|
11.40
|
%
|
The Vanguard Group
(3)
|
|
|
14,464,710
|
|
|
|
8.36
|
%
|
T. Rowe Price Associates, Inc.
(4)
|
|
|
14,777,857
|
|
|
|
8.50
|
%
|
Directors and named executive officers:
|
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|
|
|
|
|
|
Milburn Adams
(5)
|
|
|
133,500
|
|
|
|
*
|
|
Robert H. Adcock, Jr.
(6)
|
|
|
1,481,382
|
|
|
|
*
|
|
John W. Allison
(7)(8)
|
|
|
6,731,541
|
|
|
|
3.92
|
%
|
Richard H. Ashley
(8
)
(9)
|
|
|
2,717,314
|
|
|
|
1.58
|
%
|
Mike D. Beebe
(10)
|
|
|
7,000
|
|
|
|
*
|
|
Brian S. Davis
(8)(11)
|
|
|
187,007
|
|
|
|
*
|
|
Jack E. Engelkes
(8)(12)
|
|
|
383,894
|
|
|
|
*
|
|
Tracy M. French
(8)(13)
|
|
|
526,287
|
|
|
|
*
|
|
Karen E. Garrett
(14)
|
|
|
10,000
|
|
|
|
*
|
|
Kevin D. Hester
(8)(15)
|
|
|
198,295
|
|
|
|
*
|
|
James G. Hinkle
(16)
|
|
|
591,752
|
|
|
|
*
|
|
Alex R. Lieblong
(8)(17)
|
|
|
1,014,314
|
|
|
|
*
|
|
Thomas J. Longe
(18)
|
|
|
18,500
|
|
|
|
*
|
|
Jim Rankin, Jr.
(19)
|
|
|
240,338
|
|
|
|
*
|
|
C. Randall Sims
(20)
|
|
|
342,747
|
|
|
|
*
|
|
Donna J. Townsell
(
8
)(21)
|
|
|
176,407
|
|
|
|
*
|
|
All directors and executive officers as a group (19 persons)
(8)
|
|
|
14,961,475
|
|
|
|
8.70
|
%
|
(1)
|
The percentage of our common stock beneficially owned was calculated based on 170,696,572 shares of our common
stock outstanding as of January 31, 2019. The percentage assumes that the person in each row has exercised all options that are exercisable by that person or group within 60 days of January 31, 2019.
|
(2)
|
Based on information as of December 31, 2018, obtained from a Schedule 13G/A filed with the SEC on or
about January 28, 2019, by BlackRock, Inc., located at 55 East 52nd Street, New York, New York 10055 (BlackRock). BlackRock reported in its Schedule 13G/A that it has sole voting power over 19,164,811 shares, sole dispositive power
over 19,800,521 shares and no shared voting power or shared dispositive power over any shares. The foregoing information has been included solely in reliance upon, and without independent investigation of, the disclosures contained in
BlackRocks Schedule 13G/A.
|
20
(3)
|
Based on information as of December 31, 2018, obtained from a Schedule 13G/A filed with the SEC on or
about February 12, 2019, by Vanguard Group, Inc., located at 100 Vanguard Boulevard, Malvern, Pennsylvania 19355 (Vanguard). Vanguard reported in its Schedule 13G/A that it has sole voting power over 194,801 shares, shared voting
power over 16,795 shares, sole dispositive power over 14,267,984 shares and shared dispositive power over 196,726 shares. The foregoing information has been included solely in reliance upon, and without independent investigation of, the disclosures
contained in Vanguards Schedule 13G/A.
|
(4)
|
Based on information as of December 31, 2018, obtained from a Schedule 13G/A filed with the SEC on or
about February 14, 2019, by T. Rowe Price Associates, Inc., located at 100 E. Pratt Street, Baltimore, Maryland 21202 (Price Associates). Price Associates reported in its Schedule 13G/A that it has sole voting power over 3,823,502
shares, sole dispositive power over 14,777,857 shares and no shared voting power or shared dispositive power over any shares. The foregoing information has been included solely in reliance upon, and without independent investigation of, the
disclosures contained in Price Associates Schedule 13G/A. These securities are owned by various individual and institutional investors for which Price Associates serves as investment adviser with power to direct investments and/or sole power
to vote the securities. For purposes of the reporting requirements of the Exchange Act, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner
of such securities.
|
(5)
|
Includes 4,500 shares of restricted stock.
|
(6)
|
Includes 79,426 shares held in Mr. Adcocks IRA account, 1,102,544 shares owned by the Robert H.
Adcock Trust, 228,928 shares owned by the Carol Adcock Trust, 61,480 shares owned by the Bunny Adcock Trust and 4,500 shares of restricted stock.
|
(7)
|
Includes 855,360 shares owned by Mr. Allisons spouse, 11,272 shares held in Mr. Allisons
IRA, 387,500 shares of restricted stock, 14,276 shares owned by Mr. Allisons 401(k) plan, and 67,328 shares owned by Capital Buyers, a company that is owned by Mr. Allison.
|
(8)
|
Includes shares that may be issued upon the exercise of vested common stock options, as follows:
Mr. Allison, 101,425 shares; Mr. Ashley, 4,000; Mr. Davis, 98,870 shares; Mr. Engelkes, 9,425 shares; Mr. French, 224,305 shares; Mr. Hester, 50,870 shares; Mr. Lieblong, 1,425 shares; Ms. Townsell, 90,870
shares; and all directors and executive officers as a group, 631,488 shares.
|
(9)
|
Includes 15,782 shares held in Mr. Ashleys IRA, 25,668 shares owned by Mr. Ashleys
spouse, 7,917 shares owned by the IRA of Mr. Ashleys spouse, 1,689,236 shares owned by RH Ashley Investments, LLC, 819,584 shares owned by Conservative Development Company, a corporation of which Mr. Ashley is president, 1,685 shares
owned by Square Associates, LLC, a company of which Mr. Ashley is a partner, 4,500 shares of restricted stock, 1,088 shares for which Mr. Ashley is custodian for his children and 837,312 shares pledged as security.
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(10)
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Includes 5,166 shares of restricted stock.
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(11)
|
Includes 2,350 shares owned by Mr. Daviss 401(k) plan, 43,333 shares of restricted stock and 7,128
shares held in Mr. Daviss IRA.
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(12)
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Includes 400 shares owned by the IRA of Mr. Engelkes spouse, 190,894 shares owned by
Mr. Engelkes spouse, 42,719 shares for which Mr. Engelkes is custodian for his children, and 4,500 shares of restricted stock.
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(13)
|
Includes 42,992 shares owned by Mr. Frenchs 401(k) plan, 29,222 shares held in
Mr. Frenchs IRA and 116,667 shares of restricted stock.
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(14)
|
Includes 3,000 shares of restricted stock.
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(15)
|
Includes 5,385 shares owned by Mr. Hesters 401(k) plan, 63,333 shares of restricted stock,7,128
shares held in Mr. Hesters IRA and 64,912 shares pledged as security.
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(16)
|
Includes 561,960 shares owned by the James G. Hinkle Revocable Trust and 4,500 shares of restricted stock.
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(17)
|
Includes 421,000 shares that are owned by Key Colony Fund L.P., a hedge fund of which Mr. Lieblong is the
managing partner and 4,500 shares of restricted stock.
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(18)
|
Includes 9,500 shares owned by Mr. Longes IRA and 4,500 shares of restricted stock.
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(19)
|
Includes 40,746 shares owned by the Patricia W. Ott Revocable Trust, 404 shares owned by the IRA of
Mr. Rankins spouse, 3,000 shares of restricted stock and 121,002.572 shares pledged as security.
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(20)
|
Includes 41,399 shares owned by Mr. Sims 401(k) plan, 55,162 shares held in Mr. Sims IRA
and 10,000 shares of restricted stock and 236,185.68 shares pledged as security.
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(21)
|
Includes 58,333 shares of restricted stock and 8,329 shares for which Ms. Townsell is custodian for her
child.
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21
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
The following
Compensation Discussion and Analysis provides information regarding the Companys compensation program for our named executive officers. Our named executive officers for 2018 are C. Randall Sims, CEO and President, Brian
S. Davis, CFO and Treasurer, John W. Allison, Chairman of the Board, Tracy M. French, CEO and President of our bank subsidiary, and Kevin D. Hester, Chief Lending Officer (CLO). Specific information regarding the compensation paid to
each named executive officer is disclosed in the Summary Compensation Table and the other compensation tables that follow beginning on page 31 of this proxy statement. All references to shares of our common stock and to our diluted earnings per
share in this Compensation Discussion and Analysis and in the tables and narrative that follow under Executive Compensation have been adjusted to reflect the
2-for-1
split of our common stock paid to our shareholders on June 8, 2016. The discussion below includes an overview of our compensation philosophy and guiding
principles, the components of our executive compensation, and a summary of our executive compensation awards for 2018.
Our compensation
program is designed to attract and retain key management for the Company and our bank subsidiary, motivate high performance with a view toward long-term growth and success of the Company, and align management with the interests of our shareholders.
Our executive compensation consists of base salary, short-term cash bonus incentive awards, long-term equity incentive awards, retirement and insurance benefit plans and certain perquisites. The short-term incentive awards are based on the
Companys or our bank subsidiarys financial performance compared with the Companys or the banks strategic goals for each year or on the executives contributions to other operational achievements during the year. Our
long-term incentive awards, which may be granted on a fixed basis or a performance basis tied to annual and/or multi-year cumulative performance goals of the Company or our bank subsidiary, encourage the alignment of senior managements goals
with those of our shareholders, with the ultimate goal of increasing overall shareholder value. The opportunity to earn annual cash bonus awards and long-term equity awards provides a mix of variable compensation that integrates the Companys
short-term and long-term goals, as well as helps to attract and retain executive officers.
Salary payments to our named executive
officers during 2018 ranged from $310,000 to $450,000, which compares to a range of $295,000 to $410,000 in 2017. For 2018, we paid annual cash bonuses to each of the named executive officers in amounts ranging from 8.1% to 111.5% of the
executives 2018 base salary. These cash bonus awards were based primarily on the officers contributions to the Companys substantial net income growth in 2018 of $165.3 million, or 122.4%, the completion of the acquisition of
Shore Premier Finance and being named the top bank on Forbes 2018 Best Banks in America list.
The Compensation
Committee utilizes the Companys Amended and Restated 2006 Stock Option and Performance Incentive Plan for issuing long-term equity incentive awards to our executive officers as a means to reward past performance, provide a long-term incentive
for future performance and align management with the interests of our shareholders. The Committee uses long-term equity incentive awards most frequently in the compensation of our Chairman, Mr. Allison, to maintain close alignment between his
interests and those of our shareholders and to reward his leadership in the growth and success of the Company. Mr. Allison remains the Companys largest individual shareholder, owning 3.92% of our outstanding common stock. The Compensation
Committee has historically issued annual awards of restricted shares of our common stock to our Chairman, including in each of the past three years. These awards have primarily reflected and provided incentive for Mr. Allisons continued
leadership in connection with the Companys successful bank acquisitions and strong financial performance during this period and the preceding years. In 2018, the Committee awarded Mr. Allison 125,000 restricted shares to vest in two
installments over a three-year period. In January 2019, the Committee granted Mr. Allison 150,000 restricted shares to vest in three annual installments over a three-year period.
22
The Compensation Committee also periodically issues long-term equity incentive awards to our
other named executive officers, with its recent practice being to issue such awards approximately every three years. The Committee utilizes both stock options and restricted shares subject to either time-based vesting or performance goals, or a
combination of performance-based and time-based vesting. In July 2018, the Committee granted equity incentive awards to Messrs. Sims, Davis, French and Hester and other key Company and bank employees. The awards to our named executive officers
represent an aggregate of 375,000 shares of our common stock consisting of 125,000 performance-based restricted shares and 250,000 performance-based stock options. Vesting of these awards is subject to the Companys achievement of 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 four consecutive quarters, with vesting to occur over a five-year period following attainment of the
performance goal. The Committee issued similar equity awards to Messrs. Davis, French and Hester in August 2015 representing an aggregate of 480,000 shares of our common stock consisting of restricted shares, performance-based restricted shares and
performance-based stock options. Vesting of these awards was subject to a specified diluted earnings per share goal, which was met on December 31, 2016, and additional fixed vesting over a five-year period following the achievement of the
performance goal. From time to time, the Committee grants additional restricted stock and stock option awards to our named executive officers, other than our Chairman, in certain circumstances. No such awards were granted in 2018.
The Committee believes its practices with respect to the issuance of equity awards to our named executive officers provide appropriate
long-term performance incentives and further align the interests of our executive officers with those of our shareholders.
Overview of Compensation
Philosophy and Program
The Compensation Committee, composed entirely of independent directors, administers the Companys
executive compensation program. The role of the Committee is to oversee the Companys compensation and benefit plans and policies, administer its stock plans, and review and approve annually all compensation decisions related to the named
executive officers and our Board members. The Committee reports its compensation decisions to the Board for their review or recommends such decisions for approval by the Board.
The Committee recognizes the importance of compensation and performance and seeks to reward performance with cost-effective compensation that
aligns employee efforts with the business strategy of the Company and with the interest of the shareholders. The Committee also recognizes that the compensation should assist the Company in attracting and retaining key executives critical to its
long-term success.
The following principles guide the Committee:
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Compensation levels should be sufficiently competitive to attract and retain key management for the bank and
holding company
. The Company hires experienced bank executives that have a track record in the market. Competition is strong for these talented and experienced people. The compensation package must be strong and competitive in that market.
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Compensation should relate directly to performance and responsibility.
Compensation should vary with the
performance and responsibility of the individual. It should always be proportional to the contribution to the Companys success.
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Short-term incentive compensation should motivate high performance.
The Company uses the cash bonus plan
to motivate individuals with roles and responsibilities that give them the ability to directly impact the Companys performance and strategic direction. The incentive compensation should not cause the individual to take excessive and
unnecessary risks that would threaten the institution.
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The Companys Stock Option and Performance Incentive Plan should align management with shareholders
interests.
Awards of stock options, restricted stock or other forms of long-term compensation should encourage management to focus on the long-term growth and success of the Company. It should provide management with a meaningful stake in the
Company and the prospects of a long-term career.
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23
The Committee receives updates on our business results from management and reviews historical and
projected financial information as necessary to assess whether executive compensation continues to be properly balanced with and supportive of our business objectives. The Committee may also review information, including reported revenue, profit
levels, market capitalization and disclosed governance practices, regarding
comparably-sized
bank holding companies in a peer group to assess our comparative performance and organizational structure. The
Committee uses management updates and peer information as tools to evaluate the connection between executive compensation and our performance as a business. This information is reviewed in a subjective manner. There is no implied direct or formulaic
linkage between peer information and our compensation decisions. The Committee takes the view that appropriate connections between compensation and performance objectives can encourage our executives to make decisions that will result in significant
positive short-term and long-term returns for our business and our shareholders without providing an incentive either to take unnecessary risks or to avoid opportunities to achieve long-term benefits even though they may reduce short-term benefits
for the named executive officers, the business or our shareholders.
Based on these reports and assessments, the Committee annually
evaluates both the short-term and long-term performance compensation for the named executive officers to ensure alignment with our business objectives. The Committee also works closely with management regarding long-term equity incentives, including
performance-based equity awards, which emphasize shareholder returns while providing enhanced retention value for key executives.
Benchmarking Against A Peer Group
The Committee in the past has compared total compensation levels for the executive officers to the compensation paid to executives in a peer
group. The Committee annually considers the need for a peer analysis and reviews peer compensation as the Committee deems necessary. The Committee did not perform a peer compensation review or engage a compensation consultant during 2018 to advise
the Committee on setting the compensation of our executive officers. For 2018, the Committee evaluated and considered the overall performance and achievements of the Company and our bank subsidiary, as well as each executives individual
performance and the Chairmans recommendation for such executive (other than himself).
Consideration of Shareholder Advisory
Say-on-Pay
Vote
At our Annual Meeting in
2018, the shareholders approved, on an advisory basis, the compensation of our named executive officers for 2017, as disclosed in last years proxy statement (91.4% of votes cast). We value this endorsement by our shareholders of our executive
compensation policies. The Committee has considered the results of this advisory vote on executive compensation, and we have followed the same philosophy in determining our current executive compensation of maintaining competitive executive pay that
rewards performance and encourages management to focus on the long-term growth and success of the Company by providing them an equity stake in the Company that aligns their interests with our shareholders. The Company has included in this Proxy
Statement a similar proposal providing for an advisory vote to approve the compensation of our executives in accordance with the shareholders recommendation.
See
PROPOSAL TWO ADVISORY
(NON-BINDING)
VOTE APPROVING EXECUTIVE COMPENSATION.
Components of Compensation
The key elements of the Companys executive compensation program are:
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Short-term incentives (bonuses)
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Long-term incentive compensation (options/restricted stock)
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Retirement and insurance benefit plans
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Certain defined perquisites
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The Company tries to determine the proper mix of base, short-term and long-term incentive compensation. In our markets there are a number of
national, regional and community banks. The competition for experienced executives in banking is strong. The Committee understands that being a public company that can offer equity incentives and a community banking philosophy puts the Company in a
competitive position for strong management. The public market for the stock and its easily accessible value is a positive factor in aligning managements interest with that of the shareholders and making them meaningful stakeholders.
24
Base Salary
Base salaries historically have been targeted at comparable levels for peer companies and adjusted to recognize varying levels of
responsibility, individual performance, individual banking region performance if appropriate and internal equity issues. The Committee reviews the base salaries of the executive officers annually. This base salary provides the foundation for a total
compensation package that is required to attract, retain and motivate the officers. Generally, base salaries are not directly related to specific measures of performance, but are determined by experience, the scope and complexity of the position,
current job responsibilities, and salaries of competing banks. The Committee did not use benchmarking in 2018. Base salaries for our named executive officers in 2018 ranged from $310,000 for Mr. Sims as CEO of the holding company to $450,000
for Mr. French as CEO of our bank subsidiary, which reflect increases of approximately 5% to 10% over our named executive officers base salaries in 2017. Base salaries for our named executive officers for 2019, approved by the Committee
in January 2019, reflect an increase of 12.5% for our Chairman and increases of approximately 2.0% for each other named executive officer.
Short-term Incentives
An annual cash bonus plan is intended to reward individual performance for that year. The Compensation Committee evaluates a number of
performance criteria for the Company or the bank and considers the overall profitability of the Company and our bank subsidiary before determining the awards. Specifically, the Committee reviews the individual performance of the officer, along with
the goals and performance of the Company and the bank relative to the officers role and responsibilities. For named executives who are officers of our bank subsidiary, the Committee reviews criteria such as return on assets, growth in assets
(including through acquisitions), asset quality, return on equity, gross margin, net income, operating income, net cash flow and regulatory examination results. In evaluating an executive officer of the parent, the Committee reviews the goals of the
parent company including shareholder return, earnings per share, and the other criteria noted above. The final consideration is the overall profitability of the Company. The Committee then determines the amount of the awards. In each case, the
Committee makes the determination at their discretion as to the issuance and amount of any award.
The Committee awarded annual cash
bonuses for 2018 to each of our named executive officers in amounts ranging from 8.1% to 111.5% of the executives 2018 base salary. These cash bonus awards were based primarily on the officers contributions to the Companys
substantial net income growth in 2018 of $165.3 million, or 122.4%, the completion of the acquisition of Shore Premier Finance and being named the top bank on Forbes 2018 Best Banks in America list.
Long-term Incentives
Consistent with the Companys philosophy that favors compensation based upon performance, long-term incentives comprise a significant
component of total compensation. In 2012, the Board of Directors adopted and the shareholders approved the Amended and Restated 2006 Stock Option and Performance Incentive Plan (the Plan). In 2016 and 2018, the shareholders approved
amendments to the Plan to increase the number of shares authorized for issuance under the Plan, and in 2017, the shareholders reapproved the material terms of the performance goals under the Plan. The purpose of the Plan is to attract and retain
highly qualified officers, directors, and key employees, and to encourage those employees to improve our business results. The Plan is administered by our Compensation Committee. Subject to the terms of the Plan, the Committee may select
participants to receive awards, determine the types, terms and conditions of awards and interpret provisions of the Plan.
It is the
policy of the Committee to award grants with an exercise price set at the fair market value on the date of the grant. The Company does not have a practice of timing option or restricted stock grants to coordinate with the release of material
non-public
information. The Committee evaluates opportunities under the Plan along with the annual setting of salaries and awarding bonuses. The Committee will also consider awards under the Plan if appropriate in
recruiting a new employee.
The Committee has historically used one or more of the following business criteria, on a consolidated basis
and/or with respect to specified banking regions (except with respect to the total shareholder return and earnings per share criteria), in establishing performance goals for performance-based awards:
25
Prior to 2018, the Companys stock option grants and certain restricted stock awards to covered employees were generally intended to
comply with Section 162(m) of the Internal Revenue Code. Section 162(m) places a limit of $1,000,000 on the compensation that a publicly held corporation may deduct in any one year with respect to its principal executive officer, principal
financial officer and the next three most highly compensated executive officers whose compensation is required to be disclosed in the companys annual proxy statement (referred to as covered employees). Historically, there was an exception to
this $1,000,000 limitation for performance-based compensation that meets certain requirements, and the principal financial officer was excluded from the definition of a covered employee. Effective January 1, 2018, the Tax Cuts and Jobs Act
amended Section 162(m) to eliminate the exception for performance-based compensation and to make compensation paid to the principal financial officer now subject to the $1,000,000 deduction limitation. The amendments to Section 162(m)
include a grandfather clause applicable to compensation paid pursuant to a written binding contract in effect on November 2, 2017 that is not materially modified after such date. The Compensation Committee does not have a specific policy with
regard to Section 162(m). However, the Amended and Restated 2006 Stock Option and Performance Incentive Plan contains certain provisions designed to facilitate the deductibility of performance-based compensation in accordance with
Section 162(m). The Company generally believes its stock option and performance-based restricted stock awards granted before November 2, 2017 have met those requirements and, as such, are deductible.
Historically, the Committee has granted both regular and performance-based nonqualified stock options. Awards granted on a regular (or fixed)
basis carry a set vesting schedule based on a certain time period as determined by the Committee. Performance-based awards are payable in recognition of achievement of certain annual and/or cumulative performance goals of the Company or our bank
subsidiary based on one or more of the criteria described above over a period of time longer than one year. The Committee may also grant restricted stock under the Plan based on the criteria described above. The restricted period for such shares may
be subject to the satisfaction of Company or individual performance objectives but may not be less than one year. If the restricted shares are not subject to any such performance objectives, the restricted period may not be less than three years.
Under the Plan, the Committee must certify in writing that all of the performance goals and other material terms of a performance-based
award have been met before the named executive officer may receive payment for such award. The performance-based awards have historically been based on quarterly, annual and/or cumulative diluted earnings per share or asset growth targets. The
Committee may confer with the Audit Committee as necessary when confirming achievement of performance goals. The equity awards (both fixed and performance-based) typically have been based on a vesting period of three to five years.
Generally, the Committee utilizes annual restricted stock awards in the compensation of our Chairman, Mr. Allison, who remains the
Companys largest individual shareholder, owning 3.92% of our outstanding common stock. The Committee believes these awards help maintain close alignment of our Chairmans interests with those of our shareholders and appropriately reward
his leadership in the growth and success of the Company. The Committee issues long-term equity incentive awards to our other named executive officers on a less frequent basis, with its recent practice being to issue substantial equity awards to the
executive group approximately every three years and selected awards from time to time to individual executives.
During the past three
years, the Committee has granted restricted shares of our common stock to Mr. Allison in the amounts of 125,000 shares in January 2018, 112,500 shares in February 2017 and 140,000 shares in January 2016. In addition, the Committee awarded
Mr. Allison 10,000 unrestricted bonus shares of our common stock in 2016 in lieu of a cash bonus for 2015. The restricted shares granted in 2018 vest over three years in two equal installments beginning on the second anniversary of the grant
date. This award was based primarily on the Companys completion of three acquisitions, including the largest in the Companys history, and strong adjusted earnings in 2017. The 2017 award is subject to both performance and time-based
conditions under which the shares will cliff vest on the third anniversary of the grant date if either the Companys total assets equal or exceed $12.5 billion at any fiscal quarter end within the three-year period or the
Company has averaged $0.315 diluted earnings per share for four consecutive quarters or $1.26 total diluted earnings per share over a period of four consecutive quarters within the three-year period. The alternative total asset growth and diluted
earnings per share goals were designed to provide incentive toward the successful completion of the Companys two then-pending acquisitions and the successful negotiation and completion of the Stonegate acquisition, along with maintaining
strong quarterly
26
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.
27
Supplemental Executive Retirement Plan
.
Prior to our acquisition of
Community Bank in 2003, Community Bank purchased life insurance policies on its President and Chief Executive Officer, Tracy M. French. The policies offset benefit expenses associated with a supplemental annual retirement benefit that grows on a
tax-deferred
basis. A portion of the benefit is determined by an indexed formula. The balance of the benefit is determined by crediting interest on the accrued balances. The calculation for the benefit expense
accrual is: insurance policy income minus opportunity cost plus interest. The opportunity cost is determined by the bank and is equal to the five year average of the one year Treasury Bill rate. The bank (now Centennial Bank) retains the opportunity
cost. Prior to Mr. Frenchs retirement, any earnings in excess of the opportunity costs are accrued to a liability reserve account for his benefit. At retirement, this liability reserve account is amortized with interest and paid out over
a period of 15 years. If Mr. French dies while there is a balance in his account, this balance will be paid in a lump sum to Mr. Frenchs beneficiaries.
The life insurance benefit for Mr. French is being provided by an endorsement split dollar life plan. Upon the death of the executive,
the death benefit payable is equal to 70% of the net
at-risk
life insurance portion (total benefit less cash value) of the policies insuring the life of Mr. French. The bank has all ownership rights in
the death benefits and surrender values of the insurance policy on Mr. French. Its obligations under the retirement benefit portion of this policy are unfunded; however, the bank has purchased life insurance policies on Mr. French that are
actuarially designed to offset the annual expenses associated with the benefit portion of the policy and will, given reasonable actuarial assumptions, offset all of the cost during Mr. Frenchs lifetime and provide a complete recovery of
costs at death.
401(k) Plan
.
All our full- and part-time employees over the age of 21 are eligible to participate in
our 401(k) Plan immediately. We contribute a matching contribution equal to 50% of the participants first 6% of deferred compensation contribution. In addition, we may make a discretionary contribution. No discretionary contributions were made
during 2018.
Health and Insurance Benefits
.
Our full-time officers and employees are provided hospitalization and
major medical insurance. We pay a substantial part of the premiums for these coverages. All insurance coverage under these plans is provided under group plans on generally the same basis to all of our full-time employees. Also, we provide other
basic insurance coverage including dental, life, and long-term disability insurance.
In 2004, First State Bank (now Centennial Bank)
adopted an endorsement split-dollar life insurance plan which provides for the purchase of life insurance policies insuring the life of Mr. Allison. Both the bank and Mr. Allison have an interest in each of the policies, and therefore,
this is classified as an endorsement split-dollar plan. Mr. Allisons beneficiaries will be entitled to an amount equal to 50% of the net
at-risk
insurance portion of the total proceeds. The net
at-risk
portion is the total proceeds less the cash value of the policy. Mr. Allison recognizes the economic value of this death benefit each year on his individual income tax return. The beneficiaries of the
policies are named by Mr. Allison and the bank will receive the remainder of the death benefit. The bank has all ownership rights in the death benefits and surrender values of the policies. The premium paid on June 4, 2004, for the
policies was $4.8 million. Effective December 22, 2006, the death benefits payable under these policies split between the bank and Mr. Allisons beneficiaries. If the death benefits were paid in 2018, approximately
$7.4 million would be paid to the bank and approximately $1.7 million would be paid to Mr. Allisons beneficiaries.
Perquisites
The
Company provided certain perquisites to executive management in 2018. These perquisites included:
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Gasoline for personal car
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Use of company owned car
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The Company owns a used airplane which it purchased in 2017 from Mr. Allisons company,
Capital Buyers. The Company also from
time-to-time
uses an additional airplane owned by Capital Buyers. An employee of the Company is a pilot and flies the airplanes.
Mr. Allison from
time-to-time
uses the airplanes and the pilot for personal travel, which may or may not occur during working hours. When the Company uses the
Capital Buyers plane, Capital Buyers charges the Company for out of pocket expenses and other expenses attributable to use and maintenance of the aircraft.
Director Fees
Mr. Allison receives additional fees for his service as Chairman of the Board of Directors of the Company, which for 2018 included an
annual retainer of $8,000 and a fee of $4,000 for each holding company Board meeting attended. The fees for his service as Chairman of the Board are set by the Board of Directors. In addition, Mr. Allison is Chairman of the board of directors
of the Companys bank subsidiary and serves on each regional board of directors of the bank. He receives fees for his service on the board of directors and each regional board of the bank. The fees for his service on each board are set by the
respective boards of the bank. Mr. Allison earned a total of $105,875 in fees for his service on the Board of Directors of the Company and the board of directors and regional boards of the bank during 2018, including fees for his service on
committees of the Company and bank boards. Mr. Allison is the only named executive officer who received fees for serving on the Companys or our bank subsidiarys boards of directors or on any committees of such boards during 2018.
29
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
The following Compensation Committee Report should not be deemed filed or incorporated by reference into any other document, including the
Companys filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report into any such filing by reference.
In accordance with its written charter, which was
re-adopted
in its current form by the Board of
Directors on January 19, 2018,
the Compensation Committee evaluates and approves the plans and policies related to the compensation of the Companys executive officers and directors. A copy of the Compensation Committee charter is
published on the Companys website at
www.homebancshares.com
under the caption Investor Relations/Corporate Profile/Governance Documents.
The Committee met five times in 2018 to discuss, among other items, the salaries, bonuses and other compensation of the senior executive
officers and other key employees of the Company.
In determining the compensation of the executive officers for 2018, the Committee, among
other things, evaluated the performance of the Chief Executive Officer and the other executive officers in light of corporate goals and objectives and reviewed the Chairmans compensation recommendations. The Committee also set the bonuses to
our named executive officers for their performance in 2018.
The Compensation Committee reviewed and discussed with management the
information provided in the preceding Compensation Discussion and Analysis section of this Proxy Statement. Based on its review and discussions with management, the Committee recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this Proxy Statement and our Annual Report on Form
10-K
for the calendar year ended December 31, 2018, for filing with the SEC.
Home BancShares, Inc.
Compensation Committee Members
Mike D. Beebe, Chairman
Milburn
Adams
Richard H. Ashley
Jack
E. Engelkes
Jim Rankin, Jr.
30
EXECUTIVE COMPENSATION
The following table sets forth various elements of compensation earned by, awarded or paid to the individuals who served as our CEO, our CFO,
and our three other most highly-compensated executive officers during the fiscal year ended December 31, 2018 (collectively, our named executive officers), for services rendered in each of the last three years.
Summary Compensation Table
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Name and principal
position
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|
Year
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|
|
Salary
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|
|
Bonus
|
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|
Stock
awards
(1)
|
|
|
Option
awards
(1)
|
|
|
Non-equity
incentive plan
compensation
|
|
|
Change in
pension value
and non-
qualified
deferred
compensation
earnings
|
|
|
All other
compensation
|
|
|
Total
|
|
C. Randall Sims,
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2018
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$
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309,423
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|
|
$
|
25,000
|
|
|
$
|
233,200
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|
|
$
|
111,200
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
25,118
|
(2)
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$
|
703,941
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Chief Executive
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2017
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|
|
294,618
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25,000
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|
|
|
|
|
|
|
|
|
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19,547
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339,165
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Officer and President
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2016
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285,000
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10,000
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|
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|
|
|
|
|
|
|
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|
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22,539
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|
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317,539
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Brian S. Davis, Chief
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2018
|
|
|
|
324,990
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|
|
|
135,000
|
|
|
|
233,200
|
|
|
|
111,200
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|
|
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|
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32,768
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(3)
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837,158
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Financial Officer and
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2017
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|
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324,030
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|
125,000
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|
|
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26,761
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|
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475,791
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Treasurer
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2016
|
|
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|
300,000
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|
|
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150,000
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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27,092
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477,092
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John W. Allison,
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2018
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399,039
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445,000
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3,096,250
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|
|
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139,107
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|
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589,173
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(4)
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4,668,570
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Chairman of the
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|
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2017
|
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|
|
373,280
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500,000
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3,179,250
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|
|
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147,606
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571,350
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4,771,486
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Board
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2016
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|
|
330,000
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|
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|
|
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2,559,750
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|
|
|
|
|
|
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155,453
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|
|
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520,386
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|
|
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3,565,589
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Tracy M. French,
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2018
|
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448,461
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|
|
|
205,000
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|
|
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1,749,000
|
|
|
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834,000
|
|
|
|
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|
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44,676
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|
|
|
62,816
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(5)
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3,343,953
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CEO & President of
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2017
|
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|
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409,027
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255,000
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|
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|
|
|
|
|
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42,492
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|
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40,576
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|
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747,095
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Centennial Bank
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|
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2016
|
|
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385,000
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|
|
|
192,000
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|
|
|
|
|
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39,372
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|
|
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42,689
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|
|
|
659,061
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Kevin D. Hester,
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2018
|
|
|
|
374,038
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|
|
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185,000
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|
|
|
669,600
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|
|
|
333,600
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|
|
|
|
|
|
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|
|
|
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32,774
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(6)
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1,625,012
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Chief Lending
|
|
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2017
|
|
|
|
349,032
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|
|
|
225,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,699
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|
|
|
595,731
|
|
Officer
|
|
|
2016
|
|
|
|
325,000
|
|
|
|
162,500
|
|
|
|
|
|
|
|
101,600
|
|
|
|
|
|
|
|
|
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|
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31,347
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|
620,447
|
|
(1)
|
Restricted stock and stock option awards are based on the grant date fair values and are calculated pursuant to
the provisions of FASB ASC Topic 718 Compensation Stock Compensation.
See
Note 14 of the consolidated financial statements in the Companys Annual Report on Form
10-K
for the
year ended December 31, 2018 for a discussion of the assumptions underlying the valuation of these stock option awards.
|
(2)
|
Includes gasoline for personal car, $83; personal use of Company car, $3,556; country club dues, $6,311; 401(k)
contribution, $8,250; executive gifts, $4,518; and income realized from restricted stock dividends, $2,400. The incremental cost of the car was determined by multiplying the percentage of personal miles times the annual lease value of the car.
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(3)
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Includes 401(k) contribution, $8,250; executive gifts, $4,518; and income realized from restricted stock
dividends, $20,000.
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(4)
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Mr. Allison used a pilot employed by the Company for personal trips in an airplane owned by Capital
Buyers, a company owned by Mr. Allison. The incremental cost of those services was determined to be $7,000, using $500 per trip, current rate for a commercial pilot, times 14 trips of personal travel. Other Compensation also includes Company
Board of Directors fees, $24,000; subsidiary bank director and advisory board fees, $15,600; committee fees, $66,275; auto allowance, $19,199; 401(k) contribution, $8,250; country club dues, $8,835; Company-owned life insurance ownership, $11,846;
income realized from supplemental retirement plan, $250,000; income realized from restricted stock dividends, $173,650; and executive gifts, $4,518.
|
(5)
|
Includes gasoline for personal car, $832; personal use of Company car, $7,698; 401(k) contribution, $8,250;
income realized from restricted stock dividends, $40,000; Company-owned life insurance ownership, $1,518; executive gifts, $4,518. The personal use of the car was determined the same as disclosed in Note 2 above.
|
(6)
|
Includes country club dues, $3,456; executive gifts, $4,518; and income realized from restricted stock
dividends, $24,800.
|
31
Employment Agreements
We currently do not have any employment, salary continuation or severance agreements in effect with any of our named executive officers.
Stock Awards and Stock Option Grants
The
number of shares authorized for issuance under the Home BancShares Amended and Restated 2006 Stock Option and Performance Incentive Plan, as amended (the Plan), is 13,288,000. In 2018, there were 1,581,000 options granted pursuant to the
Plan, and options to purchase 201,377 shares were exercised. The Company granted restricted stock awards representing a total of 1,010,050 shares of our common stock during 2018.
See
COMPENSATION DISCUSSION AND ANALYSIS
Components of Compensation for more information on the Plan and the awards granted under the Plan.
The following table contains
information about awards granted pursuant to the Plan to each of our named executive officers during the fiscal year ended December 31, 2018:
Grants of Plan-Based Awards Table
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Name
|
|
Grant
Date
|
|
|
Estimated future payouts
under
non-equity
incentive
plan awards
|
|
|
Estimated future payouts under
equity incentive plan awards
|
|
|
All other
stock
awards:
number
of shares
of stock
or units
|
|
|
All other
option
awards:
number of
securities
under-
lying
options
|
|
|
Exercise
or base
price of
option
awards
(per
share)
|
|
|
Grant date
fair value
of stock
and option
awards
(2)
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
(1)
|
|
|
Target
(1)
|
|
|
Maximum
(1)
|
|
C. Randall Sims
|
|
|
7/19/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,333
|
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
233,200
|
|
|
|
|
7/19/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
$
|
23.32
|
|
|
|
111,200
|
|
Brian S. Davis
|
|
|
7/19/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,333
|
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
233,200
|
|
|
|
|
7/19/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
23.32
|
|
|
|
111,200
|
|
John W. Allison
|
|
|
1/19/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000
|
|
|
|
|
|
|
|
|
|
|
|
3,096,250
|
|
Tracy M. French
|
|
|
7/19/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
75,000
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,749,000
|
|
|
|
|
7/19/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
150,000
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
23.32
|
|
|
|
834,000
|
|
Kevin D. Hester
|
|
|
7/19/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
30,000
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
699,600
|
|
|
|
|
7/19/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
60,000
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
23.32
|
|
|
|
333,600
|
|
(1)
|
The equity incentive plan awards set forth in the table above will be eligible to vest upon the achievement of
a specified performance goal, after which the awards will vest according to a time-based vesting schedule, subject to the named executive officers continued employment. The threshold column reflects the number of shares to vest in
the first installment following achievement of the performance goal. The target and maximum columns reflect the vesting of the entire award. More information regarding the vesting conditions for these awards is set forth in
the narrative discussion that follows.
|
(2)
|
Grant date fair value is calculated pursuant to the provisions of FASB ASC Topic 718 Compensation
Stock Compensation.
See
Note 14 of the consolidated financial statements in the Companys Annual Report on Form
10-K
for the year ended December 31, 2018 for a discussion of the
assumptions underlying the valuation of these equity awards.
|
The restricted shares granted to Mr. Allison on
January 19, 2018, will vest over three years in 50% installments beginning January 19, 2020. The equity awards granted to Messrs. Sims, Davis, French and Hester on July 19, 2018, consist of restricted shares subject to performance
conditions (Performance Shares) and performance-based stock options (Performance Options). The Performance 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 Performance Options will vest in five equal annual installments beginning on the first anniversary of the date that the performance goal is met. 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.
32
As of February 8, 2019, options to purchase 3,621,203 shares remain outstanding under the
Plan, and 1,650,443 shares of common stock remain available for future awards under the Plan. The Company does not currently have a policy regarding repricing of stock options.
The following table contains information, on a stock dividend and stock split adjusted basis, about unexercised stock options previously
granted to each of our named executive officers that are outstanding as of December 31, 2018:
Outstanding Equity Awards at Fiscal
Year-End
Table No. 1
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Option Awards
|
|
|
Number of
securities
underlying
unexercised
options
exercisable
|
|
|
Number of
securities
underlying
unexercised
options
unexercisable
|
|
|
Equity
incentive plan
awards:
Number of
securities
underlying
unexercised
unearned
options
|
|
|
Option
exercise price
|
|
|
Option
expiration date
|
|
C. Randall Sims
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(1)
|
|
$
|
23.32
|
|
|
|
7/19/2028
|
|
Brian S. Davis
|
|
|
16,000
|
|
|
|
4,000
|
(2)
|
|
|
|
|
|
|
16.77
|
|
|
|
4/16/2024
|
|
|
|
|
30,000
|
|
|
|
20,000
|
(3)
|
|
|
|
|
|
|
16.86
|
|
|
|
3/11/2025
|
|
|
|
|
42,870
|
|
|
|
57,130
|
(4)
|
|
|
|
|
|
|
18.46
|
|
|
|
8/23/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(1)
|
|
|
23.32
|
|
|
|
7/19/2028
|
|
John W. Allison
|
|
|
1,425
|
|
|
|
|
|
|
|
|
|
|
|
2.66
|
|
|
|
12/31/2019
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
8.62
|
|
|
|
1/17/2023
|
|
Tracy M. French
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
|
8.62
|
|
|
|
1/17/2023
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
|
9.54
|
|
|
|
4/17/2023
|
|
|
|
|
60,000
|
|
|
|
40,000
|
(5)
|
|
|
|
|
|
|
14.71
|
|
|
|
1/15/2025
|
|
|
|
|
64,305
|
|
|
|
85,695
|
(4)
|
|
|
|
|
|
|
18.46
|
|
|
|
8/23/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
(1)
|
|
|
23.32
|
|
|
|
7/19/2028
|
|
Kevin D. Hester
|
|
|
42,870
|
|
|
|
57,130
|
(4)
|
|
|
|
|
|
|
18.46
|
|
|
|
8/23/2025
|
|
|
|
|
8,000
|
|
|
|
12,000
|
(6)
|
|
|
|
|
|
|
21.25
|
|
|
|
4/20/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(1)
|
|
|
23.32
|
|
|
|
7/19/2028
|
|
(1)
|
These performance-based options will vest in five equal annual installments beginning on the first anniversary
of the date that the performance goal is met. The performance goal 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.
|
(2)
|
These options will vest on April 17, 2019.
|
(3)
|
These options will vest in two equal annual installments beginning on March 12, 2019.
|
(4)
|
These options will vest in four equal annual installments beginning on August 24, 2019.
|
(5)
|
These options will vest in two equal annual installments beginning on January 16, 2019.
|
(6)
|
These options will vest in three equal annual installments beginning on April 21, 2019.
|
33
The following table contains information, on a stock split adjusted basis, about the restricted
stock awards previously granted to each of our named executive officers that are outstanding as of December 31, 2018:
Outstanding
Equity Awards at Fiscal
Year-End
Table No. 2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Stock Awards
|
|
|
Number
of shares
or units
of stock
that have
not
vested
|
|
|
Market
value of
shares or
units of
stock 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)
|
|
C. Randall Sims
|
|
|
|
|
|
$
|
|
|
|
|
10,000
|
(2)
|
|
$
|
163,400
|
|
Brian S. Davis
|
|
|
13,333
|
(3)
|
|
|
217,861
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(4)
|
|
|
326,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(2)
|
|
|
163,400
|
|
John W. Allison
|
|
|
140,000
|
(5)
|
|
|
2,287,600
|
|
|
|
|
|
|
|
|
|
|
|
|
112,500
|
(6)
|
|
|
1,838,250
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000
|
(7)
|
|
|
2,042,500
|
|
|
|
|
|
|
|
|
|
Tracy M. French
|
|
|
16,667
|
(3)
|
|
|
272,339
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(4)
|
|
|
408,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(2)
|
|
|
1,225,500
|
|
Kevin D. Hester
|
|
|
13,333
|
(3)
|
|
|
217,861
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(4)
|
|
|
326,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(2)
|
|
|
490,200
|
|
(1)
|
The market value applied to the unvested shares of the named executive officers restricted common stock
was $16.34 per share based upon the closing price as reported on the NASDAQ Global Select Market on December 31, 2018.
|
(2)
|
These performance-based shares will vest over five years in three equal annual installments beginning on the
third annual anniversary of the date that the performance goal is met. The performance goal 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.
|
(3)
|
These shares will vest in two equal annual installments beginning on August 24, 2019.
|
(4)
|
These shares will vest in three equal annual installments beginning on December 31, 2019.
|
(5)
|
These shares vested on January 25, 2019.
|
(6)
|
All of these shares will cliff vest on February 22, 2020.
|
(7)
|
These shares will vest over two years in two equal annual installments beginning January 19, 2020.
|
34
Option Exercises and Stock Awards Vested in 2018
The following table contains information about stock options exercised and restricted stock awards vested by each of our named executive
officers during 2018.
Option Exercises and Stock Awards Vested Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
Number of
shares
acquired on
exercise
|
|
|
Value realized
on exercise
|
|
|
Number of
shares
acquired on
vesting
|
|
|
Value realized
on vesting
|
|
C. Randall Sims
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
Brian S. Davis
|
|
|
13,200
|
|
|
|
239,198
|
|
|
|
6,667
|
|
|
|
158,275
|
|
John W. Allison
|
|
|
83,634
|
|
|
|
1,571,078
|
|
|
|
120,000
|
|
|
|
2,954,400
|
|
Tracy M. French
|
|
|
|
|
|
|
|
|
|
|
8,333
|
|
|
|
197,825
|
|
Kevin D. Hester
|
|
|
|
|
|
|
|
|
|
|
6,667
|
|
|
|
158,275
|
|
Pension and Other Benefits
The following table contains information about the actuarial present value, computed as of December 31, 2018, of the accumulated benefit
to each of our named executive officers under each plan in which the named executive officer participates that provides for the payment of specified retirement benefits or benefits that will be paid primarily following retirement:
Pension and Other Benefits Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Number of
years
credited
service
|
|
|
Present
value of
accumulated
benefit
|
|
|
Payments
during last
fiscal year
|
|
C. Randall Sims
|
|
N/A
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
Brian S. Davis
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
John W. Allison
|
|
Chairmans Retirement Plan
|
|
|
(1
|
)
|
|
|
1,678,044
|
|
|
|
250,000
|
|
Tracy M. French
|
|
Supplemental Executive Retirement Plan
|
|
|
(1
|
)
|
|
|
394,727
|
|
|
|
|
|
Kevin D. Hester
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The benefits under the Chairmans Retirement Plan and the Supplemental Executive Retirement Plan are not
dependent on credited years of service. The benefits under the Chairmans Retirement Plan became fully vested in 2011 when Mr. Allison reached age 65. Mr. French is fully vested in the balance accrued to the liability reserve account
for his benefit in connection with the Supplemental Executive Retirement Plan.
|
The present value of
Mr. Allisons accumulated benefit is calculated based on an 8.00% rate of return over 17.2 years and a $250,000 annual payment. The present value of Mr. Frenchs accumulated benefit is calculated based on 180 monthly payments to
be made once Mr. French retires, and the monthly payment amount will be determined based upon the amount that has been accrued in the corresponding reserve liability account on the banks books. Prior to Mr. Frenchs retirement,
this liability account will be increased or decreased based upon the performance of the two life insurance policies, in addition to 8% interest credited to this account. After the liability account has been paid out in full, Mr. French will
begin receiving the indexed retirement benefit payable for lifetime.
See
COMPENSATION DISCUSSION AND ANALYSIS Components of Compensation for more information regarding these retirement plans.
Nonqualified Deferred Compensation
We do
not currently have in effect any defined contribution or other plan that provides for the deferral of compensation to any of our named executive officers on a basis that is not
tax-qualified.
35
Payments Upon Termination or
Change-In-Control
We do not currently have in effect
any compensatory plan or other arrangement that provides for payments or the provision of benefits to any of our named executive officers upon their termination of employment with the Company or upon a change in control of the Company or a change in
the officers responsibilities. However, our equity incentive plan awards to our named executive officers are subject to accelerated vesting of the awards upon a termination of employment in certain circumstances and upon a change in control of
the Company.
Our Amended and Restated 2006 Stock Option and Performance Incentive Plan, as amended, generally provides that, unless the
Compensation Committee provides otherwise in the applicable award agreement, upon an employees death, any unvested stock options and unvested shares of restricted stock held by the employee at the time of his or her death will vest immediately
and any unvested shares of restricted stock subject to performance conditions will vest immediately to the extent the performance conditions have been met.
The award agreements for stock options granted to our named executive officers also generally provide that any unvested stock options will
vest immediately upon the executives death or disability, except that the stock options granted in 2018 that are subject to performance conditions will vest only to the extent the performance goal has been met as of the date of the
executives death or disability. For stock options granted before 2018, the stock option agreements also provide that any unvested options will vest immediately if the executives employment is terminated by the Company without cause. In
addition, each of the Companys outstanding stock option agreements also provides that any unvested options will vest immediately upon a change in control of the Company or a sale or merger of the Company in which the Company is not the
surviving entity.
With respect to shares of restricted stock granted to our named executive officers, the Companys outstanding
award agreements similarly provide that any unvested restricted shares will vest immediately upon the executives termination due to death or disability, except that any restricted shares that are subject to performance conditions will only
vest to the extent the performance goal has been met as of the date of death or disability. If the executives employment is terminated for any other reason, all unvested shares will be forfeited. The award agreements also provide that any
unvested shares will vest immediately upon a change in control of the Company, except that with respect to the performance-based restricted shares granted in 2018, the shares will vest only to the extent the performance goal has been met on the date
of the change in control.
The following table summarizes, on a stock split adjusted basis, the estimated value for each named executive
officer of the accelerated vesting of outstanding equity awards upon a termination of the named executive officers employment or upon a change in control of the Company. In accordance with SEC regulations, the table assumes that the
termination or change in control occurred on December 31, 2018, and the value applied to the shares of common stock is $16.34 per share based on the closing price as reported on that date on the NASDAQ Global Select Market.
Potential Accelerated Vesting of Equity Awards Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Type of Award
|
|
Death
|
|
|
Disability
|
|
|
Termination
Without
Cause
|
|
|
Other
Termination
(1)
|
|
|
Change in
Control
|
|
C. Randall Sims
|
|
Stock options
(2)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Restricted shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian S. Davis
|
|
Stock options
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted shares
|
|
|
544,661
|
|
|
|
544,661
|
|
|
|
|
|
|
|
|
|
|
|
544,661
|
|
John W. Allison
|
|
Stock options
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted shares
|
|
|
6,168,350
|
|
|
|
6,168,350
|
|
|
|
|
|
|
|
|
|
|
|
6,168,350
|
|
Tracy M. French
|
|
Stock options
(2)
|
|
|
65,200
|
|
|
|
65,200
|
|
|
|
65,200
|
|
|
|
|
|
|
|
65,200
|
|
|
|
Restricted shares
|
|
|
680,839
|
|
|
|
680,839
|
|
|
|
|
|
|
|
|
|
|
|
680,839
|
|
Kevin D. Hester
|
|
Stock options
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted shares
|
|
|
544,661
|
|
|
|
544,661
|
|
|
|
|
|
|
|
|
|
|
|
544,661
|
|
(1)
|
Includes, without limitation, termination for cause, voluntary resignation or retirement.
|
(2)
|
Assumes the immediate vesting of all unvested stock options, other than performance-based stock options granted
in 2018 for which the performance goal has not been met, and the associated cash proceeds resulting from a same day exercise and sale of only those previously unvested stock options that are
in-the-money
using the fair market value of our common stock at December 31, 2018, of $16.34.
|
36
Compensation Risk Assessment
The Compensation Committee and management conducted an assessment of the risks associated with our compensation policies and practices during
2018, including our compensation arrangements for both executives and
non-executive
employees. That assessment included a review of policies and procedures relating to the components of our compensation
program, a review of incentive-based equity and cash compensation features, identification of any compensation design features that could potentially encourage excessive or imprudent risk taking, and consideration of the presence or absence of
controls, oversight or other factors that mitigate potential risk.
During the review, the Committee and management concluded that several
factors and controls relating to our compensation policies and practices mitigate against the potential for risks that could materially and adversely affect the Company. These factors and controls include:
|
|
|
the Companys lack of involvement in activities regarded as having significant inherent risk, such as
mortgage-backed securities and proprietary trading;
|
|
|
|
managements review of compensation arrangements of employees of the Company or our bank subsidiary having
compliance, risk, credit quality, quality assurance and finance roles;
|
|
|
|
oversight of incentive compensation by the Compensation Committee, which is made up of independent directors;
|
|
|
|
effective internal controls over financial reporting for the Company;
|
|
|
|
appropriate segregation of duties; and
|
|
|
|
restrictions on awards that align the interests of the employee with the interests of the shareholders.
|
Based upon this assessment, we do not believe that our employee compensation policies and practices create risks that
are reasonably likely to have a material adverse effect on the Company.
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Act, we are providing the following information about the relationship of the annual total
compensation of our median employee and the annual total compensation of our CEO.
For 2018, our last completed fiscal year,
the median of the annual total compensation of all employees of the Company (other than our CEO) was $39,983, and the annual total compensation of our CEO was $703,941. Based on this information, for 2018 the ratio of the annual total compensation
of our CEO to the median of the annual total compensation of all employees was 17.6 to 1.
Item 402 of Regulation
S-K
generally requires us to identify the median employee only once every three years. For the proxy statement for our Annual Meeting in 2018, we determined the median of the annual total compensation of
all employees of the Company (other than our CEO) by identifying our total employee population as of December 31, 2017, which consisted of approximately 1,786 individuals. Of these employees, approximately 1,744 individuals were full-time
equivalent employees, with the remainder employed on a part-time (less than 40 hours per week) basis.
To identify the median
employee we conducted a full analysis of this employee population, without the use of statistical sampling. We determined our median employee using total compensation for the full year 2017. Total compensation consisted
of base pay, bonuses, commissions, fringe benefits, incentives, severance and vacation payout. Using this methodology, we determined that the median employee was a full-time customer service employee.
However, because our originally identified median employee was no longer employed by the Company at December 31, 2018, as permitted by
Item 402 we selected another employee whose total compensation, as described above, is substantially similar to the original median employees total compensation. The median employee for 2018 was a member of the Companys treasury
management staff.
With respect to the annual total compensation of the median employee, we identified and calculated the elements of such
employees compensation for 2018 in accordance with the requirements of Item 402(c)(2)(x) of Regulation
S-K.
37
PROPOSAL TWO ADVISORY
(NON-BINDING)
VOTE
APPROVING EXECUTIVE COMPENSATION
The Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act) enables our shareholders to vote to approve, on an advisory
(non-binding)
basis, the compensation of our named executive
officers as disclosed in this Proxy Statement in accordance with SEC rules. This vote is commonly known as a
say-on-pay
vote. At our Annual Meeting in 2018,
our shareholders voted to recommend that the Company hold future
say-on-pay
votes annually until the Company is next required to hold an advisory vote on the
frequency with which the Company will hold future
say-on-pay
votes, which will be in 2024. Accordingly, the Company presents the resolution set forth below
for approval by the shareholders in accordance with the Dodd-Frank Act and Section 14A of the Securities Exchange Act of 1934.
At
our Annual Meeting in 2018, our shareholders approved, on an advisory basis, the compensation of our named executive officers for 2017, as disclosed in last years proxy statement. We value the endorsement by our shareholders of our executive
compensation policies. We believe that our compensation policies and procedures are competitive, are focused on pay for performance principles and are strongly aligned with the long-term interests of our shareholders. The Compensation Committee,
which is comprised entirely of independent directors, oversees our executive compensation program and monitors our policies to ensure they continue to emphasize programs that reward executives for results that are consistent with shareholder
interests.
We encourage you to closely review our Compensation Discussion and Analysis and the tabular disclosure which follows it,
including the footnotes and narratives which accompany each table, as they describe our compensation policies and procedures and the components and amounts comprising the compensation paid to our named executive officers.
The following resolution gives you as a shareholder the opportunity to endorse or not endorse the compensation we pay to our named executive
officers by voting to approve or not approve such compensation as described in this Proxy Statement:
RESOLVED, that the
shareholders of Home BancShares, Inc. (the Company) approve the compensation of the Companys executives named in the Summary Compensation Table of the Companys Proxy Statement for the 2019 Annual Meeting of Shareholders, as
disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Executive Compensation tables and the related disclosure contained in the Proxy
Statement.
Because your vote is advisory, it will not be binding upon the Board of Directors and may not be construed as overruling
any decision by the Board. However, the Compensation Committee may, in its sole discretion, take into account the outcome of the vote when considering future executive compensation arrangements.
Our Board of Directors and our Compensation Committee believe that our commitment to responsible compensation practices as described in this
Proxy Statement justifies a vote by shareholders FOR the resolution approving the compensation of our executives as disclosed in this Proxy Statement.
The Board of Directors Recommends that Shareholders Vote
FOR
the
Advisory
(Non-binding)
Resolution Approving
the Companys Executive Compensation
38
PROPOSAL THREE APPROVAL OF AMENDMENT TO
THE COMPANYS ARTICLES OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES
Our Restated
Articles of Incorporation, as amended, currently authorize the issuance of up to 200,000,000 shares of common stock, $0.01 par value. As of the record date, 170,096,572 shares of common stock were issued and outstanding, 5,271,646 shares were
reserved for issuance pursuant to currently outstanding stock options, and 3,621,206 shares were reserved for future awards under our Amended and Restated 2006 Performance Incentive Plan, as amended, leaving 1,650,443 shares available for other
uses.
The Board of Directors is proposing an amendment to the Restated Articles of Incorporation, as amended, to increase the number of
authorized shares of common stock from 200,000,000 to 300,000,000. If the shareholders approve this proposal, the first sentence of Article THIRD in the Companys Restated Articles of Incorporation, as amended, will be amended to read as
follows:
The authorized capital stock (the Capital Stock) of this Corporation shall be 300,000,000 shares of
voting common stock (the Common Stock) having a par value of $0.01 per share, and 5,500,000 shares of $0.01 par value preferred stock (the Preferred Stock).
Purpose and Effect of the Proposed Amendment
The Board believes that the current number of authorized shares does not provide the Company with adequate flexibility to issue stock in
connection with any future acquisitions or for general corporate purposes. In particular, if the Board determines that it would be appropriate to effect a significant acquisition through the exchange of common stock, conduct a stock offering or
declare a stock dividend, the current number of unissued authorized shares might not be enough to complete such transaction. Although we cannot guarantee that any future acquisitions, stock offerings or dividends will occur, the Board believes that
the proposed increase in the number of authorized shares will provide the Company with the flexibility to issue future stock dividends or to issue shares in connection with an acquisition or for other corporate purposes, without incurring the
expense of convening a special shareholders meeting or the delay of waiting until the next annual meeting.
If this proposal is
approved, all authorized but unissued shares of common stock will be available from time to time for any proper purpose approved by the Board, including issuances in connection with stock-based benefit plans, future stock dividends and issuances to
raise capital or effect acquisitions. Neither the Company nor the Board currently has any arrangements or understandings with respect to the issuance or use of the additional shares of authorized common stock sought to be approved (other than
issuances permitted or required under the Companys Amended and Restated 2006 Stock Option and Incentive Plan, as amended, or awards made pursuant to that plan). If this proposal is approved, all or any of the shares may be issued without
further shareholder action, unless required by law or the rules of the NASDAQ Stock Market.
Existing shareholders do not have preemptive
or similar rights to subscribe for or purchase any additional shares of common stock that the Company may issue in the future. Therefore, issuances of common stock other than issuances on a pro rata basis to all shareholders would reduce each
shareholders proportionate interest in the Company.
An increase in the authorized number of shares of common stock could have an
anti-takeover effect. If we issue additional shares in the future, such an issuance could dilute the voting power of a person seeking control of the Company, thereby making an attempt to acquire control of the Company more difficult or expensive.
Neither the Board nor management is currently aware of any attempt, or contemplated attempt, to acquire control of the Company, and we are not presenting this proposal with the intent that it be used as an anti-takeover device.
39
Vote Required to Approve Proposal
Approval of the amendment to the Restated Articles of Incorporation, as amended, to increase the number of authorized shares requires the
affirmative vote of a majority of the votes cast in person or by proxy at the Annual Meeting, assuming a quorum is present.
The Board
of Directors Recommends that Shareholders Vote
FOR
the Approval of the Amendment to the Companys
Restated Articles of Incorporation to Increase the Number of Authorized Shares
40
PROPOSAL FOUR RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our
consolidated financial statements as of and for the fiscal year ended December 31, 2018, were audited by BKD, LLP, an independent registered public accounting firm. In 2018, the Audit Committee of the Board of Directors and our shareholders
approved the engagement of BKD, LLP to be our independent registered accounting firm for fiscal year 2018. The Audit Committee intends to approve the
re-engagement
of BKD, LLP to be our independent registered
public accounting firm for the fiscal year ending December 31, 2019, subject to the ratification of the appointment by our shareholders at the Annual Meeting and our formal acceptance of an engagement letter from BKD, LLP after the Annual
Meeting.
Shareholders ratification of the selection of BKD, LLP to be our independent registered public accounting firm for fiscal
year 2019 is not required by our Bylaws or otherwise. However, the Board is submitting the selection of the independent registered public accounting firm to the shareholders for ratification as a matter of good corporate practice. If the
shareholders fail to ratify the selection of BKD, LLP, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee may, at its discretion, direct the appointment of a different
independent registered accounting firm at any time during the year if it determines that such change is in the best interests of the Company and our shareholders.
Representatives of BKD, LLP are expected to attend the Annual Meeting, will have an opportunity to make a statement if they so desire, and
will be available to respond to appropriate questions.
The Board of Directors Recommends that Shareholders Vote
FOR
the
Ratification of the Appointment of BKD, LLP
as the Companys Independent Registered Public Accounting Firm
for the 2019 Calendar Year
41
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
In accordance with its written charter, the Audit Committee assists the Board in, among other things, oversight of our accounting and
financial reporting processes, our compliance with legal regulatory requirements, the qualifications and independence of the independent auditors and the performance of the internal and independent auditors. A copy of the Audit Committee charter is
published on the Companys website at
www.homebancshares.com
under the caption Investor Relations/Corporate Profile/Governance Documents.
Our Board of Directors has determined that all seven members of the Committee are independent based upon the independence requirements of the
SEC and NASDAQ, and that our Chairman, Mr. Engelkes, and Mrs. Garrett each satisfies the criteria of an audit committee financial expert as defined by the regulations of the SEC.
Management is responsible for the preparation, presentation, and integrity of our financial statements, for the appropriateness of our
accounting principles and reporting policies and for implementing and maintaining internal control over financial reporting. Our independent auditors are responsible for auditing the financial statements and internal controls over financial
reporting and for reviewing our unaudited interim financial statements. The Audit Committees responsibility is to monitor and review these processes and procedures. Except for Mr. Engelkes and Mrs. Garrett, the members of the Audit
Committee have not been engaged in the practice of accounting or auditing and are not professionals in those fields. The Audit Committee relies, without independent verification, on the information provided to us and on the representations made by
management that the financial statements have been prepared with integrity and objectivity and on the representations of management and the opinion of the independent auditors that such financial statements have been prepared in conformity with
accounting principles generally accepted in the United States.
During 2018, the Audit Committee held five regularly scheduled meetings
and three special meetings. The Audit Committees regular meetings were conducted in order to encourage communication among the members of the Audit Committee, management, the internal auditors, and our independent auditors, BKD, LLP. Among
other things, the Audit Committee discussed with our internal and independent auditors the overall scope and plans for their respective audits. The Audit Committee separately met with each of the internal and independent auditors, with and without
management, to discuss the results of their examinations and their observations and recommendations regarding our internal controls. The Audit Committee also discussed with our independent auditors all matters required by auditing standards
generally accepted in the United States of America, including those described in Public Company Accounting Oversight Board Auditing Standard 1301, Communications with Audit Committees.
The Audit Committee reviewed and discussed our audited consolidated financial statements as of and for the year ended December 31, 2018,
with management, the internal auditors, and our independent auditors. Managements discussions with the Audit Committee included a review of critical accounting policies.
The Audit Committee obtained from the independent auditors a formal written statement describing all relationships between us and our auditors
that might bear on the auditors independence consistent with Public Company Accounting Oversight Board Rule 3526, Communication with Audit Committees Concerning Independence. The Audit Committee discussed with the auditors any
relationships that may have an impact on their objectivity and independence and satisfied itself as to the auditors independence. The Audit Committee has reviewed and approved the amount of fees paid to BKD, LLP for audit and
non-audit
services. The Audit Committee concluded that the provision of services by BKD, LLP is compatible with the maintenance of BKDs independence.
Based on the above-mentioned review and discussions with management, the internal auditors, and the independent auditors, and subject to the
limitations on our role and responsibilities described above and in the Audit Committee Charter, the Audit Committee recommended to the Board of Directors that our audited consolidated financial statements be included in our Annual Report on Form
10-K
for the calendar year ended December 31, 2018, for filing with the SEC.
Home BancShares,
Inc.
Audit Committee Members
Jack E. Engelkes, Chairman
Milburn
Adams
Robert H. Adcock, Jr.
Karen E. Garrett
James G. Hinkle
Alex R. Lieblong
Thomas J.
Longe
42
AUDIT AND
NON-AUDIT
FEES
The following table represents aggregate fees billed for professional audit services rendered by BKD, LLP to provide the audit of our annual
consolidated financial statements for the years ended December 31, 2018, and December 31, 2017, respectively.
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2018
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2017
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Audit fees
(1)
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$
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910,513
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$
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794,846
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Audit-related fees
(2)
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17,556
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177,682
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Tax fees
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All other fees
(3)
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55,347
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28,672
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(1)
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Audit fees consisted of the annual audit and quarterly review services and consent for and review of a
registration statement filed by the Company with the SEC.
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(2)
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Audit related fees consisted primarily of other audit services provided in connection with acquisitions,
reporting and compliance matters.
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(3)
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Other fees related to fees paid by the Company on behalf of the Companys retirement plan for third-party
administration of the Companys defined contribution plan.
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Policy on Audit Committee
Pre-Approval
of Audit and Permissible
Non-Audit
Services of Independent Auditor
The Audit Committee has the responsibility of appointing, setting compensation for and overseeing the work of the independent auditor, and has
established a policy to
pre-approve
all audit and permissible
non-audit
services provided by the independent auditor.
Prior to engagement of the independent auditor for next years audit, management will submit an aggregate of services expected to be
rendered during that year for each of four categories of services to the Audit Committee for approval.
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(1)
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Audit
services include audit work performed in the preparation of our consolidated financial
statements, as well as work that generally only the independent auditor can reasonably be expected to provide, including comfort letters, statutory audits, and attest services, and consultation regarding financial accounting and/or reporting
standards.
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(2)
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Audit-related
services are for assurance and related services that are traditionally performed by
the independent auditor, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.
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(3)
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Tax
services include all services performed by the independent auditors tax personnel
except those services specifically related to the audit of the consolidated financial statements, and includes fees in the areas of tax compliance, tax planning and tax advice.
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(4)
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Other fees
are those associated with services not captured in the other categories. Other than
the services for the third-party administration of the Companys defined contribution plan, we generally do not request such services from the independent auditor.
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Prior to the engagement, the Audit Committee
pre-approves
these services by category of service. The
fees are budgeted and the Audit Committee requires the independent auditor and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become
necessary to engage the independent auditor for additional services not contemplated in the original
pre-approval.
In those instances, the Audit Committee requires specific
pre-approval
before engaging the independent auditor.
The Audit Committee may delegate
pre-approval
authority to one or more of its members. The members to whom such authority is delegated must report, for informational purposes only, the
pre-approval
decisions
to the Audit Committee at its next scheduled meeting.
43
SUBMISSION OF SHAREHOLDER PROPOSALS
In order for a proposal by a shareholder to be included in the Companys proxy statement and proxy form for an annual meeting of the
Companys shareholders, the proposal must: (1) concern a matter that may be properly considered and acted upon at the annual meeting in accordance with applicable laws, including our Bylaws and Rule
14a-8
of the Securities Exchange Act of 1934; and (2) be received by the Company at its home office, 719 Harkrider Street, Suite 100, Conway, Arkansas 72032, Attention: Holly A. McKenna, Secretary, not
less than 120 calendar days before the anniversary of the date of the previous years proxy statement, or November 6, 2019, in the case of the Annual Meeting of Shareholders in 2020. If no annual meeting was held the previous year and in
any year in which the date of the annual meeting is moved by more than 30 days from the date of the previous years annual meeting, the proposal will be considered timely if received within a reasonable time before the Company begins to print
and mail its proxy materials.
In connection with our Annual Meeting of Shareholders in 2020, if we do not receive notice of a matter or
proposal to be considered by January 20, 2020, then the persons appointed by our Board to act as proxy holders for such Annual Meeting (named in the form of proxy) will be allowed to use their discretionary voting authority with respect to any
such matter or proposal properly presented for a vote at such meeting.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements, and other information with the SEC. You may view and print reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC, including the Company, from the SEC website at
www.sec.gov
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SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE
MEETING ARE URGED TO VOTE BY TELEPHONE,
MAIL OR INTERNET.
IF YOU VOTE BY TELEPHONE OR THE INTERNET,
DO
NOT
RETURN YOUR PROXY CARD
By Order of the Board of Directors
C. RANDALL SIMS
Chief Executive Officer and President
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Your vote matters heres how to vote!
You may vote online or by phone instead of mailing this card.
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Votes submitted electronically must be received by 1:00 a.m.,
Central Daylight Time, on April 18, 2019.
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Online
Go to
www.envisionreports.com/HOMB
or scan the QR code login details are located in the shaded bar below.
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Phone
Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada
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Save paper, time and money!
Sign up for electronic delivery at
www.envisionreports.com/HOMB
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Using a
black ink
pen, mark your votes with an
X
as shown in this example. Please do not write outside the designated areas.
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☒
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q
IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
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A
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The Board of Directors recommends a vote
FOR
all the nominees listed and
FOR
Proposals 2, 3 and 4.
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1.
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Election of Directors:
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For
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Withhold
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For
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Withhold
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For
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Withhold
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+
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01 - John W. Allison
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☐
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☐
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02 - C. Randall Sims
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☐
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03 - Brian S. Davis
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☐
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☐
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04 - Milburn Adams
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☐
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☐
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05 - Robert H. Adcock, Jr.
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☐
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☐
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06 - Richard H. Ashley
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☐
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☐
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07 - Mike D. Beebe
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☐
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☐
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08 - Jack E. Engelkes
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☐
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☐
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09 - Tracy M. French
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☐
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☐
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10 - Karen E. Garrett
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☐
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☐
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11 - James G. Hinkle
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☐
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☐
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12 - Alex R. Lieblong
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☐
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☐
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13 - Thomas J. Longe
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☐
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☐
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14 - Jim Rankin, Jr.
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☐
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☐
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15 - Donna J. Townsell
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☐
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☐
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For
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Against
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Abstain
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For
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Against
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Abstain
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2.
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Advisory (non-binding) vote approving the Companys executive compensation.
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☐
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☐
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☐
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3.
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Approval of an amendment to the Companys Restated Articles of
Incorporation, as amended, to increase the number of authorized shares of common stock from 200,000,000 to 300,000,000.
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☐
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☐
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☐
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4.
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Ratification of appointment of BKD, LLP as the Companys independent registered public accounting firm for the next fiscal year.
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☐
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☐
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5.
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Transact such other business as may properly come before the meeting or any adjournments thereof.
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B
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Authorized Signatures This section must be completed for your vote to count. Please date and sign below.
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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.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box.
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Important notice regarding availability of proxy material for the annual meeting to be held on April 18, 2019:
The Notice and Proxy Statement and Annual Report on Form 10-K are available at www.envisionreports.com/HOMB
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Small steps make an impact.
Help the environment by consenting to receive electronic
delivery, sign up at www.envisionreports.com/HOMB
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q
IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.
q
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Proxy HOME BANCSHARES, INC.
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+
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719 Harkrider Street, Suite 100
Conway,
Arkansas 72032
(501) 339-2929
www.homebancshares.com
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON APRIL 18, 2019
The undersigned constitutes and appoints Brian
S. Davis and Jennifer C. Floyd or either of them, proxies for the undersigned, with full power of substitution, to represent the undersigned and to vote all of the shares of common stock of Home BancShares, Inc. which the undersigned is entitled to
vote at the Annual Meeting of shareholders of the Company to be held on April 18, 2019, at 6:30 p.m. (CDT) at the Centennial Valley Country Club Events Center, located at 1600 Centennial Club Drive, Conway, Arkansas, for the purposes stated on the
reverse side.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR
ALL DIRECTOR NOMINEES LISTED AND
FOR
PROPOSALS 2, 3 AND 4.
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, DATE
AND SIGN YOUR PROXY AND RETURN IT WITHOUT DELAY
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Change of Address
Please print new address below.
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