Shareholder
Proposal & Nomination Deadlines
If you intend to present a shareholder proposal at the 2018 annual
meeting, it must be received by the Corporate Secretary, First Horizon National Corporation, P.O. Box 84, Memphis, Tennessee, 38101,
not later than November 13, 2017, for inclusion in the proxy statement and form of proxy relating to that meeting. In addition,
Sections 2.8 and 3.6 of our Bylaws provide that a shareholder
who wishes to nominate a person for election to the Board or submit
a proposal at a shareholders’ meeting must comply with certain procedures whether or not the matter is included in our proxy
statement. These procedures require written notification to us, generally not less than 90 nor more than 120 days prior to the
date of the shareholders’ meeting. If, however, we give fewer
than 100 days’ notice or public disclosure of the shareholders’
meeting date to shareholders, then we must receive the shareholder notification not later than 10 days after the earlier of the
date notice of the shareholders’ meeting was mailed or publicly disclosed. Shareholder proposals and nominations for election
to the Board must be submitted to the Corporate Secretary. The shareholder must disclose certain information about the nominee
or item proposed, the shareholder and any other shareholders known to support the nominee or proposal. Section 2.4 of our Bylaws
provides that our annual meeting of shareholders will be held each year on the date and at the time
fixed by the Board of Directors. The Board of Directors has determined
that our 2018 annual meeting will be held on April 24, 2018. Thus, shareholder proposals submitted outside the process that permits
them to be included in our proxy statement and director nominations must be submitted to the Corporate Secretary between December
25, 2017 and January 24, 2018, or the proposals will be considered untimely. Untimely proposals may be excluded by the Chairman
or our proxies may exercise their discretion and vote on these matters in a manner they determine to be appropriate.
Compensation
Discussion
and
Analysis
This CD&A section of our proxy statement discusses and analyzes
the compensation programs applicable to our senior executives. In particular, this section focuses on five of those executives,
referred to as the “Named Executive Officers” or “NEOs”:
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Named Executive Officer
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Position
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D. Bryan Jordan
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Chairman of the Board, President, and Chief Executive Officer
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William C. Losch III
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Executive Vice President – Chief Financial Officer
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Michael E. Kisber
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President – FTN Financial
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David T. Popwell
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President – Banking
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Charles T. Tuggle, Jr.
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Executive Vice President – General Counsel
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The Compensation Committee of the Board oversees compensation
for all NEOs. For more information see “The Compensation Committee” beginning on page 18 of this proxy statement.
CD&A
Executive Highlights
2016 Corporate Performance
Our strategic and operating results in 2016 were excellent. Consolidated
revenues grew 9%, while average loans and core deposits grew 10% and 11%, respectively, compared with 2015. Consolidated diluted
earnings per share available to common shareholders (EPS) for 2016 were 94 cents per share, substantially better than 2015. In
2016, we increased our common dividend rate by 17%, to 28 cents per year. Early in 2017, we announced a 29% increase, to 36 cents
per year. Total shareholder return (TSR) for 2016 was 40%, our fifth consecutive year of positive TSR.
Underlying our results were solid achievements in our core businesses
of regional banking and fixed income. Regional bank average loans in 2016 were up 15% (following a similar rise in 2015); net interest
income grew 13%; and total revenues grew 9%. Commercial lending growth was especially strong, enhanced by our acquisition of franchise
finance loan portfolios in the third quarter. Fixed income noninterest income was up 16% in 2016, in spite of adverse market conditions
late in the year. We continued to discipline our
deployment of resources based on economic profit (EP) principles
and risk-adjusted return on capital analytics.
The Federal Funds rate was increased in December 2015 and again
a year later. The first increase helped our net interest margin for 2016, and we expect the second increase will benefit our 2017
margin. Because we cannot control rate actions by the government, we continue to aggressively manage our net interest spreads and
to strive for strong loan growth across our commercial and consumer banking businesses.
The Compensation Committee used these actions and outcomes in
compensation decisions, as examined in more detail later in this CD&A section. Of particular note, pre-tax income was a major
driver of 2016 bonus outcomes. See “Annual MIP Bonus” beginning on page 49 for additional information. In addition,
although no decisions have been made, in fiscal 2017 the Committee expects to deliver value commensurate with the achievements
of the past five years.
Industry Operating Environment
The environment for the financial services industry in the United
States has been relatively stable for the past several years.
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The Federal Reserve raised rates late in 2015 and again in the fourth quarter of 2016, both times modestly. The unusually
long low-rate environment continues to compress loan
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margins. However, a higher level of interest rate volatility the past
two years has increased demand for many fixed income products.
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The current economic expansion in the U.S. continued for a seventh year, at a modest but positive pace.
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The unemployment rate in the U.S. remained relatively favorable during the year, though
labor participation continued to be low.
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Mortgage rates overall continued to be very low. Housing values and transaction activity
in many markets continued to strengthen.
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New regulatory burdens continued to weigh on the industry. Overall these costs are
substantial for all banks, but in many cases fall unevenly.
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Regulatory activism continued to increase, with unusual monetary and other penalties
reported by many banks in 2016 connected with a range of banking activities.
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Infrastructure costs challenged all banks, driven by new technologies and continuing
evolution in
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customer demand for them, as well as by constantly evolving security concerns.
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Banks continued to focus heavily on improving efficiency. Interest-spread revenues
have been limited by the rate environment while fixed costs have increased under the regulatory environment, leaving variable
cost control as a critical method to maintain profitability.
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Credit quality continued to be stable, and loan charge-offs continued to be unusually
low, for much of the industry.
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Consolidation within our industry, excluding the four largest U.S. banks, continued
at relatively moderate levels.
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Alignment of Pay with Performance
Our compensation policies and philosophies are designed to align
the interests of our employees with the interests of our shareholders. We seek to attract, retain, incent, and reward individuals
who contribute to our long-term success.
Key practices linking performance to compensation include:
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Significant weighting of at-risk and stock-based awards
. For our CEO, goal-based performance pay elements in 2016
represented 54% of his regular annual compensation package, measured at target. For most other named executives, the at-risk
performance portion represented about 40%. With respect to our CEO, 52% of his pay
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was linked directly to our stock price; for other NEOs, stock-linked pay ranged from 32% to 40%. See “Relative Sizing
& Mix” beginning on page 47 below for details.
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Share retention requirement.
Our stock ownership guidelines extend the effective time horizon of our stock awards
substantially. They require that executives hold 50% of their net after tax shares from awards until retirement after multiple-of-salary
minimum ownership levels are attained. For an executive holding less than the guideline minimum, the requirement is 75%.
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Details regarding these practices are discussed throughout this
CD&A section.
CEO Pay and Performance
Mr. Jordan was recruited as CFO in 2007, and promoted to CEO in
September 2008, to rebuild our company. Previous management embarked on a strategy to build national mortgage origination and servicing
businesses, along with related real estate lending. These legacy businesses were significantly impacted by the financial crisis;
they have resulted in large expenses for us in many years since 2007, most recently in 2015.
Mr. Jordan has led the restructuring of the company, the development
and implementation of new strategies, and the recruitment of the current management team. He has emphasized economic profit (EP)
and controlling cost. Our operating
results have improved significantly. The Compensation Committee
considered his significant contributions in turning around the company when making decisions about his pay for 2016. In each of
the past three years, Mr. Jordan has met or exceeded his personal goals. He has provided critical leadership in challenging times.
Mr. Jordan’s target-level pay is in line with the median
of FHN’s peer group. His pay mix—the structure of the various components of his pay—is also consistent with that
of company peers. Final amounts paid vary from target based on achievement of performance goals and changes in our stock price.
The following charts show total short-term compensation paid to
the CEO in recent years and year-end TSR over the same period, respectively. For this purpose, short-term pay is limited to cash
salary, salary stock units (SSUs) measured at
grant (2011-13), and total annual bonus measured when earned.
Those components have short time horizons and are sensitive to the annual changes in performance and environmental circumstances
which tend to impact TSR in the short term.
The two charts above show that over the five-year period our TSR
has risen consistently while short-term CEO pay has been up and down. TSR for the year 2016 was positive 40%. Setting the base
year at 100%, TSR for the entire five-year period was 269%.
From 2011 through 2013, we used the SSU program as a retention
incentive, reducing other pay components compared to current levels. After 2013, bonus opportunity increased as the SSU program
ended.
To provide context, the following two charts show regular annual
long-term and performance-based awards granted to the CEO over the same period. Values shown are those considered by the Committee
at grant, rather than those assigned by accounting guidance. The charts show that long-term and performance award levels recently
have trended upward, though less consistently and at a slower pace than our TSR has risen.
Our earnings during many of the years shown have been impacted
significantly by “non-strategic” obligations associated with mortgage businesses pursued by prior management. Earnings
in our regional banking business generally have improved
during this period even though lending margins have been squeezed
by the low rate environment and fee revenues have been curtailed by regulatory and market pressures. Earnings in our fixed income
business fell during much of this
period mainly due to the rate environment, though 2015 and 2016
showed significant improvement over earlier years.
Despite the headwinds and volatility overall, since 2011 our TSR
has grown consistently and vigorously, nearly tripling the value of an investment in our stock over the five years shown. TSR is
partly driven by dividends paid, which increased over this period, but is mainly driven by
our stock price, which is largely a reflection of investor expectations
for the company’s future. In 2016, our stock price experienced significant volatility but closed much higher for the year.
Mr. Jordan’s accomplishments at FHN have been recognized
outside our company. For 2016, he was recognized by
American Banker
as one of America’s top ten bank CEOs.
Alignment with Governance Principles
Our compensation practices embrace many best practice corporate
governance principles.
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Practices We Employ Include
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Practices We Avoid or Prohibit Include
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Performance-based (at-risk) and stock-based pay emphasized
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Tax gross-up features*
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Performance measures drive shareholder value
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Stock option repricings
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Performance measures emphasize controllable outcomes
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Discount-priced stock options
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Committee use of independent consultant on pay
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Single-trigger change in control payouts
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Meaningful share ownership requirements
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Employment agreements
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Require holding 50% of after-tax vested stock awards during career with the company, rising to
75% if multiple-of-salary minimum stock ownership levels are not met
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Hedging transactions in First Horizon stock (
e.g
.,
trading derivatives, taking short positions, or hedging long positions)
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Double-trigger on change in control features and agreements (CIC event plus qualifying termination)
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Personal use of corporate aircraft
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Clawbacks if financial results relevant to cash or stock performance
awards are restated under various circumstances
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An excise tax gross-up feature is grandfathered in certain older change-in-control severance agreements,
but has not been used in new agreements since 2008.
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Overview of Direct Compensation Components
Unchanged from 2015, the major components of executive compensation
in 2016 consisted of cash salary, annual bonus under our Management Incentive Plan (MIP), and annual stock awards granted under
our Equity Compensation Plan (ECP). Executive stock awards in 2016 consisted of performance stock units (PSUs), stock options,
and restricted stock units (RSUs).
The key corporate performance measure for 2016 cash bonuses was
adjusted pre-tax earnings (consolidated). The key performance measure for 2016 PSUs was adjusted return on equity (ROE) for our
core segments measured in relation to certain peer banks over three years.
The following presents an overview of the direct compensation
components for our NEOs.
Regular Direct Compensation Components
in 2016
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Component
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Primary Purpose
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Key Features
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Cash salary
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Provide competitive baseline compensation to attract and retain executive talent.
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Salaries are determined based on prevailing market levels with adjustments for individual factors such as performance, experience, skills, and tenure.
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Annual cash bonus under MIP
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Create a financial incentive for achieving or exceeding one-year company and/or executive team goals.
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For the CEO and other NEOs except Mr. Kisber, the key metric was adjusted pre-tax earnings (consolidated) coupled with several non-numeric factors, including the outcome of a balanced scorecard process, earnings quality, and risk management.
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Annual stock awards: PSUs, stock options, and RSUs
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Provide performance and service-vested equity-based long-term incentives which reward achievement of specific corporate goals, provide a retention incentive, and promote alignment with shareholders’ interests.
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For the PSUs, payout depends upon our core ROE ranking relative to peers during the performance period 2016-18. After final performance is determined in 2019, PSUs are paid in stock in 2021, following a mandatory two-year deferral period. Stock options are priced at market, vest annually over four years, and have seven year terms. RSUs vest after three years and are paid in shares of stock.
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Compensation Practices & Philosophies
Retention and Competition
Our compensation programs are designed to attract and retain a
talented workforce. We recruit from a broad talent pool. Our people in turn may be recruited by competitors, other financial services
firms, and firms in other industries.
The total compensation opportunity we provide at each level is
designed to be competitive so that over the long term we reduce the risk of losing our best people.
Use of Peer Bank Data
The Compensation Committee reviews the compensation practices
of a peer group of selected U.S. banks of roughly comparable size (“Peer Banks”). These are banks with whom we most
typically compete for talent, and the review helps our programs remain competitive. For many years the Committee has considered
specific data from
Peer Banks in setting the compensation components for our executives.
The Peer Banks used in 2016 were fourteen regional financial services companies selected by the Committee, listed below. The group
is adjusted periodically in response to changes in our company or the industry, but was unchanged in 2016.
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2016 Peer Banks
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Associated Banc-Corp
BOK Financial Corp.
City National Corp.*
Comerica Inc.
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Commerce Bancshares Inc.
Cullen/Frost Bankers Inc.
First Niagara Financial Group*
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Huntington Bancshares
M&T Bank Corp.
People’s United Financial
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Synovus Financial Corp.
TCF Financial Corp.
Webster Financial Corp.
Zions Bancorporation
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City National and First Niagara have been acquired. Pre-acquisition compensation data was included
in the peer data used for 2016, but these banks were not included in performance determinations made after year-end.
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The Committee uses peer and other market data to help establish
the size and terms of the components of direct compensation for executives. Salary is targeted at the median of the market for
each position. Actual salaries may be higher or lower than median based on individual factors—performance, experience, skills,
and tenure—or retention needs. Bonus opportunities and equity awards are targeted similarly: target-level compensation is
intended to be paid for median performance, and maximum compensation is intended to be paid for top-quartile performance.
For special compensation components, including retention awards
and individual retirement and severance arrangements, relevant market data often is not available. In those cases, the Committee
relies on recommendations from management (for awards other than to the CEO)
along with external advice from the Committee’s independent
consultant to determine the types, amounts, or terms of such benefits that are reasonable and appropriate for the circumstances.
The Total Shareholder Return Performance Graph (“TSR graph”)
that appears in our annual report to shareholders (on page 182 of that report) uses the published Keefe, Bruyette & Woods regional
banking index (ticker symbol KRX) against which to compare our total shareholder return, which consists of stock price performance
plus reinvested dividends. The KRX index encompasses fifty regional U.S. banks, including us. The annual PSU awards granted to
executives in 2016 used the KRX index banks as the group against which our core-segment ROE will be ranked over the three-year
performance period of those awards.
Impact of Shareholder Vote on Compensation
The Compensation Committee made nearly all key decisions regarding
2016 compensation for the named executives early in the year. At that time, the Committee was aware of the outcome of the vote
for the shareholder advisory resolution on executive compensation at the 2015 annual meeting. At the 2015 meeting, “For”
received 94.1% of the shares voted, similar to the results in 2014 and 2013. The 2015 outcome was part of the
mix of factors considered by the Committee early in 2016. Although
not considered by the Committee in relation to 2016 awards, at the 2016 annual meeting “For” received 98.2% of the
shares voted. We view these levels of shareholder support for our executive compensation program as indicative of broad shareholder
agreement with the philosophy and policies on which our executive compensation program is premised.
Stock Ownership Guidelines
Under our stock ownership guidelines all NEOs and directors are
required to retain 50% of the net after-tax shares received from stock awards. The retention level increases to 75% unless certain
minimum stock ownership levels are met. The retention requirement applies during the rest of their careers with us, except that
executives who reach age 55 are permitted to sell shares held at least three years to diversify ahead of retirement. Supportive
of the guidelines, a separate policy prohibits the hedging of positions in our stock.
The CEO’s minimum ownership level under the guidelines is
six times cash salary. The levels for the other named executives are two or three times their respective cash salaries, depending
upon position. Director levels are five times cash base
retainer. For this purpose, fully-owned shares, restricted stock,
RSUs paid in shares, and shares held in tax-deferred plans are counted, while PSUs, stock options, and RSUs paid in cash are not
counted.
We intend for the combined emphasis on corporate performance in
setting executive compensation and meaningful stock retention to strongly link the interests of our executives with those of our
shareholders.
Guideline ownership levels are assessed annually, in the third
quarter. In the 2016 assessment, all NEOs exceeded guideline ownership levels, and all complied with the retention requirement.
Clawback Policy & Practices
Performance compensation under the MIP, ECP, or otherwise which
is paid based on erroneous financial data is recoverable under our Compensation Recovery Policy if the recipient caused the error
or is responsible for the data’s
accuracy. Additional clawback provisions apply to most types of
stock awards if certain misconduct occurs, such as fraud or solicitation.
Starting in 2014, clawback provisions in our stock awards were
expanded to include the following
events: grant or payment of an award based on erroneous financial
data and termination for cause.
The look-back period for recovery generally is two years after
vesting.
Use of Compensation Consultants
The Committee continued its engagement of an independent consulting
firm, Frederic W. Cook & Co. (“FW Cook”), to provide analysis and advice on all executive compensation-related
matters (including assessment of peer groups, competitive market data, pay mix, and compensation design). Among other things, FW
Cook assists the Committee in its reviews of compensation program actions recommended by management. FW Cook has no other relationships
with the company or management. Key engagement items for FW Cook in 2016 were:
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Review written Committee meeting materials.
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Confer with the Committee chair and management regarding compensation matters.
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Annually meet with the Committee. This took place in July.
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Advise the Committee regarding the ECP and MIP, which were amended and submitted to shareholders at the 2016 annual meeting.
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In 2016 management engaged an external compensation consultant,
McLagan, mainly to conduct an updated competitive pay assessment for executives and for peer metrics.
Additional information concerning our use of compensation consultants
appears under the caption “The Compensation Committee—Use of Consultants” on page 19 of this proxy statement.
Role of Management in Compensation Decisions
Management administers our compensation plans, monitors compensation
programs used by other companies, and considers whether new or amended compensation programs are needed to maintain the competitiveness
of our executive compensation packages. Management presents recommendations to the Committee for approval. The CEO ultimately oversees
the development of
recommendations. If executive-level exceptions are appropriate,
such as approval of an executive’s early retirement, management generally reviews the facts of the situation and provides
a recommendation to the CEO and, ultimately, to the Committee for approval. The CEO does not participate in Committee deliberations
concerning his own compensation.
Tax Deductibility
Section 162(m) of the U.S. Internal Revenue Code generally disallows
a tax deduction to public companies for compensation exceeding $1 million paid during the year to the CEO and the three other highest-paid
executive officers at year-end (excluding the Chief Financial Officer). Certain performance-based compensation is not, however,
subject to the deduction limit. The Committee considered these tax implications in making compensation decisions for 2016.
Although deductibility is an important consideration, competitive
and other factors may outweigh it. As a result, although a substantial majority of NEO compensation is designed to be deductible
each year, typically a portion is not. That portion can vary from year to year, especially if non-performance retention awards
are made at the NEO level.
Direct
Compensation Components for NEOs
The direct components of NEO compensation in 2016 were cash
salary, annual bonus under the MIP, and annual stock awards consisting of RSUs, stock options, and PSUs under our shareholder-
approved Equity Compensation Plan. An overview of these components appears under “Overview of Direct Compensation Components”
beginning on page 43 of this proxy statement above.
Relative Sizing & Mix
In setting the size of the direct compensation components for
2016, the Compensation Committee considered the total compensation opportunity at target payout levels for each position. The
target total mix of the direct components is summarized in the following chart, which illustrates the regular annual pay packages
planned by the Committee early in the year. Special promotion
or retention awards are not included in the chart. See “Summary Compensation Table” beginning on page 58 for additional
information concerning amounts paid or earned in 2016.
2016 Direct Compensation Mix at Target
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Mr. Kisber’s compensation package differs from the
other NEOs’ to be competitive within the fixed income industry. His annual bonus opportunity has approximately double
the weighting of other NEOs, and the other components are relatively compressed. Also, unlike other NEOs, stock awards actually
granted to him in a given year depend significantly upon performance of our fixed income business the previous year. His stock
award mix shown in this chart reflects his total opportunity for grants early in 2017 based on 2016 performance. See “Stock
Awards—Fixed Income Award Practices” on page 52 below for additional information.
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The amount of each component usually is determined in relation
to cash salary. Salary levels are based largely on these factors: individual experience, individual performance, level of responsibility,
and competitive market levels. A specific need for retention also can play a role. No specific weighting is given to any one factor.
The size of each direct component for the named executives as a percentage of cash salary is shown in the chart below.
Sizing of 2016 Direct Compensation
Components
As a Percentage of Annual Cash Salary
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2016
Annual Stock Awards
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Annual
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Performance
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Bonus
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Restricted
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Stock Units
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Total Stock
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NEO
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(target)
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Stock
Units
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Stock
Options
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(target)
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Awards
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Mr.
Jordan
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140
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%
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63
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%
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63
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%
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125
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%
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250
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%
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Mr. Losch
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100
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%
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70
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%
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35
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%
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35
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%
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140
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%
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Mr. Kisber*
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583
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%
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83
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%
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93
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%
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140
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%
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317
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%
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Mr. Popwell
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100
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%
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70
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%
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35
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%
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35
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%
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140
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%
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Mr.
Tuggle
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90
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%
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55
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%
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28
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%
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28
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%
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110
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%
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Mr. Kisber’s compensation
package differs from the other NEOs’ to provide a compensation opportunity which is competitive within the fixed income
industry.
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Key factors considered when target levels were set are the appropriate
mix of base pay (salary) versus pay at risk for corporate performance or stock value performance, and the mix between short- and
long-term compensation. The chart and table above show that the CEO’s regular compensation package is more heavily weighted
in favor of performance-based pay than the other NEOs except Mr. Kisber. This practice is consistent with the greater responsibilities
of the CEO position, prevalent market practices among our Peer Banks, and our compensation philosophy which endeavors to link
a substantial portion of executive pay to performance.
In 2016, salaries for Messrs. Jordan, Losch, and Popwell increased,
as discussed in “Salary” below. Except for Mr. Jordan, the relative mix of the compensation components for the NEOs
did not change in 2016. Mr. Jordan’s salary and MIP bonus components decreased 3% and 5%, respectively, as a percentage
of target total direct compensation, while his equity awards increased a total of 8%.
Certain benefits such as life and disability insurance are also
related to cash salary. There is no other significant interdependence among the compensation components.
Valuation of Stock Awards
The percentages shown for all regular 2016 stock awards in the
table above are based upon 2016 salary rates and upon our closing stock price on the grant date, February 11, 2016, which was
$11.62 per share.
In 2016, for purposes of converting the percentages mentioned
above into specific share or unit numbers the Committee used the following valuation methods: for RSUs, 100% of market value at
grant; for stock options, 25% of market value at grant; and for PSUs, 82% of market value at grant.
RSUs and PSUs.
The valuation methods for RSUs and PSUs
are consistent with those used for financial reporting purposes. Neither award type is discounted for the risk of forfeiture due
to employment termination or non-performance. PSUs in 2016 were discounted 18% from target levels for the two-year post-vesting
holding period imposed on recipients.
Stock Options.
The actual value of a service-vested
option cannot be determined in any definitive way. Many commonly used estimation methods, including the method used for financial
reporting, were developed in connection with ordinary market trading of short-term options. The Committee believes that those
methods overstate the value that an executive generally would ascribe to our long-term, unmarketable options. That overstatement
partly is structural, given the original usage of those methods, and partly is due to the legacy and environmental factors noted
above under the headings “2016 Corporate Performance” and “Industry Operating Environment.” For those
reasons, the Committee believes that the relatively simple and stable 25% method it has used for several years provides a more
appropriate approximation of value for our option program.
Salary
Early in the year, the CEO develops a personal plan that contains
financial and strategic goals aligned with the Board-approved company plan for the year. The CEO submits that plan to the Committee
for review and approval. The Board of Directors also reviews the plan. The Committee reviews the CEO’s achievement of objectives
in his personal plan for the preceding year when assessing the CEO’s salary for the coming year. The Committee also weighs
competitive practices within the industry as well as corporate initiatives.
For other NEOs, the Committee approves salaries each year taking
the CEO’s recommendations into account.
In 2016, the Committee raised salary rates for Messrs. Jordan
(6%), Losch (12%), and Popwell (11%). For all three NEOs, based on analysis of 2015 compensation (the most recent available at
the time of the increases), these increases aligned their pay with our Peer Banks. The other two NEOs did not receive a salary
raise in 2016.
Annual MIP Bonus
Under our shareholder-approved Management Incentive Plan (MIP),
the annual bonus opportunity offered to each NEO other than Mr. Kisber (whose MIP bonus is discussed at the end of this section)
is based on targets that are approved by the Committee early in that year. Each MIP bonus is based on achievement of company and/or
business unit financial targets as well as individual personal plan objectives. For these NEOs, MIP bonus amounts can be adjusted
based on several corporate as well as individual performance factors.
For 2016, similar to the past several years, the Committee established
a maximum MIP bonus opportunity per person equal to 2% of adjusted 2016 pre-tax earnings. Pre-tax earnings for 2016 were required
to be adjusted for certain specific items, including changes in accounting principles and certain unusual or non-recurring items,
such as litigation settlements. Unlike recent years, which excluded results from our non-strategic segment, for 2016 consolidated
results were used. Subject to the 2% maximum, the Committee could exercise negative discretion to determine the final bonus amount.
Early in 2016, the Committee established a grid to guide the
exercise of negative discretion. Individual
bonuses were determined by applying a corporate rating, subject
to potential adjustments for various factors, along with an individual rating to individual target bonus levels set for each NEO.
The corporate rating was driven by actual adjusted versus budgeted
pre-tax earnings for 2016, as shown in the following table. The earnings levels used to create the grid were selected to provide
an incentive to achieve or exceed budget. Each NEO’s bonus was subject to further adjustments for the results of a multi-point
balanced scorecard process (rating the company against those Peer Banks which were independent at year-end 2016), risk management
results, quality of earnings, contributions to non-strategic results, and individual personal plan results. Under “quality
of earnings” the Committee intended, among other things, to take account of unusual shortfall or windfall in revenues associated
with interest rate movements during the year relative to budgetary expectations. All points on the grid and all calculated bonus
amounts were subject to further adjustment up or down by the Committee. However, the final bonus paid could not exceed 150% of
target.
2016 MIP Bonus Calculation Grid
Adjusted
2016
Pre-Tax
Earnings
|
Percent
of
Budget
|
Pre-Tax
Earnings
Rating*
|
Adjustment
Factors
|
Corporate
Rating
|
Bonus
Target
Amount
|
Calculated
MIP Bonus
Amount
|
Individual
Rating
Adjustment
|
Above
$358
million
|
Above
110%
|
110% to
max of
150%
|
• Balanced
scorecard
assessment
versus
peers
• Risk
management
results
• Quality of
earnings
• Contribution
to non-
strategic
outcomes
|
Corporate
rating of 0% to
150%
|
Bonus
target
amounts are
pre-set
percentages of
cash salary,
ranging from
90% to 140%
for the NEOs
|
Calculated
Bonus =
[corporate
rating] x [bonus
target amount]
|
Execution
of
personal
plan
goals
for
the
year
results
in
a
personal
plan
rating
of
0%
to
150%.
The
maximum
final bonus
amount
under the
Grid is 150%
of target.
|
$293-358
million
[Budget
= $325]
|
90%-
110%
|
90%-
110%
|
$244-292
million
|
75%-
90%
|
75%-
90%
|
$163-243
million
|
50%-
75%
|
50%-
75%
|
Less
than
$163
million
|
less
than
50%
|
0%
|
|
*
|
Consolidated Pre-Tax Earnings Rating is interpolated if results fall between two
points on the grid.
|
The balanced scorecard, used as one of the subjective adjustment
factors, ranked our company among Peer Banks on seventeen financial measures. The scorecard process used quantitative financial
measures and peer rankings but was not used in a quantitative manner to determine a specific numerical rating. Instead, the Committee
considered the scorecard results in a subjective manner.
The Committee also considered risk management, quality of earnings,
and contribution to non-strategic outcomes as potential adjustment factors.
In 2016, the CEO’s personal plan included six major performance
areas: strategic, financial (structural improvements and revenue growth), customer, shareholder value, employees, and risk management
& credit quality. These areas had no particular weighting and were not applied in a quantitative manner. Each NEO’s
personal plan substantially overlapped the CEO’s and also was related to operations managed by that NEO.
The outcomes of the bonus process for the NEOs other than Mr.
Kisber are summarized below.
2016 MIP Bonus Outcomes
|
|
|
|
|
Overall
|
|
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
PTE
|
|
Impact of
|
|
Corporate
|
|
Target
|
|
Calculated
|
|
Individual
|
|
Final
|
|
NEO
|
|
Rating
|
|
Adjustments
|
|
Rating
|
|
($)
|
|
Bonus ($)
|
|
Rating
|
|
Bonus ($)
|
|
Mr. Jordan
|
|
|
110
|
%
|
|
|
–2
|
%
|
|
|
108
|
%
|
|
|
1,225,000
|
|
|
|
1,323,000
|
|
|
|
100
|
%
|
|
|
1,323,000
|
|
|
Mr. Losch
|
|
|
110
|
%
|
|
|
–2
|
%
|
|
|
108
|
%
|
|
|
475,000
|
|
|
|
513,000
|
|
|
|
100
|
%
|
|
|
513,000
|
|
|
Mr. Popwell
|
|
|
110
|
%
|
|
|
–2
|
%
|
|
|
108
|
%
|
|
|
500,000
|
|
|
|
540,000
|
|
|
|
100
|
%
|
|
|
540,000
|
|
|
Mr. Tuggle
|
|
|
110
|
%
|
|
|
–2
|
%
|
|
|
108
|
%
|
|
|
427,500
|
|
|
|
461,700
|
|
|
|
100
|
%
|
|
|
461,700
|
|
Pre-tax earnings for 2016, after all required adjustments were
made, totaled $359.7 million. That resulted in an overall maximum bonus per person of $4 million (the plan maximum), and a pre-tax
earnings (PTE) rating of 110%.
The Committee determined that the PTE rating should be adjusted
down, a total of 2%, for certain small items: add back a litigation settlement taken out as a required adjustment; and remove
certain recoveries related to the non-strategic segment.
The litigation expense arose from circumstances controlled by
the current management team, which the Committee believed should be charged against management’s bonus rather than excluded.
The non-strategic recoveries, though positive for corporate earnings, were excluded to be consistent with past exclusions of similar,
but negative, non-strategic events in past years.
MIP Bonus for FTN Executive
Mr. Kisber is the president of our fixed income business unit
(FTN Financial). His bonus for 2016 was earned under the MIP, but was driven by the overall incentive pool created under the Capital
Markets Incentive Compensation Plan to provide a compensation opportunity consistent with that of competitors in that industry.
The incentive pool generally is funded as a specified percentage of divisional net profits, as defined, plus an additional percentage
if net profits exceed a specified return on expense.
Mr. Kisber’s 2016 compensation package generally was a
percentage of the pool approved by the Committee each year, not to exceed 15% and subject to certain limits imposed by the Committee.
The Committee imposed a $6 million overall limit on Mr. Kisber’s 2016 package. The first $2.5 million after salary was to
be paid in cash, the next $1.9 million in regular annual stock awards, and any amount over that, up to $1 million, was to be paid
in special RSUs (18-month vesting period, settled in cash). The regular stock awards, in turn,
were to be granted first in RSUs (first $0.5 million), with
any remainder ($1.4 million) granted 60% in PSUs and 40% in stock options. The Committee treats only the cash and the special
RSUs ($3.5 million total) as part of the MIP award, though in fact the entire package after salary is performance-based. The Committee
also retains the discretion under the MIP to reduce any calculated bonus amount for Mr. Kisber, but made no reduction for 2016.
Fixed Income’s contribution to our pretax earnings in
2016 was $50.2 million (net of all compensation expense). Mr. Kisber’s earned package for 2016 was $2,500,000 in cash (under
the MIP) and $1,258,000 in regular stock awards. The stock awards, granted in 2017 but driven by 2016 performance, consist of
RSUs ($500,000), PSUs ($455,000), and stock options ($303,000). Since those regular stock awards were granted in 2017 and are
not considered part of his 2016 MIP bonus, they are not reported as part of Mr. Kisber’s 2016 compensation.
Stock Awards
Overview
In 2016, the CEO’s annual stock award mix was one-half
PSUs, with RSUs and options comprising one-quarter each. For other NEOs except Mr. Kisber, the more heavily weighted component
consisted of RSUs. The Committee believes that these mixes provide appropriate incentives to focus on performance goals, especially
for the CEO, and to remain with our company.
Restricted Stock Units
Regular executive RSUs vest in March three years after grant
if the NEO remains employed with the company through the vesting date. They are settled in shares. Dividends accrue during the
vesting period and are paid in cash at vesting.
Stock Options
NEO stock option awards in 2016 vest in equal installments in
March of the first four years following grant if the NEO remains employed with the company through the vesting dates. There is
no accrual of cash dividends on options. Each option has a seven-year term and is priced at market at the time of grant. Options
will achieve value only to the extent market value on the exercise date exceeds the option price fixed on the grant date.
A stock option provides a retention incentive over its vesting
period directly linked to our stock price growth. Options inherently align compensation with the interests of shareholders.
Performance Stock Units
Consistent with competitive practice, the Committee makes annual
grants of performance equity awards with a three-year performance period. The financial goals established at the beginning of
each performance period are company-wide in focus and are uniform for all executives. Grants are annual, so financial results
in any given year can affect three outstanding awards. The Committee sets performance goals each year based on the company’s
objectives at that time, and may change the types and amounts of awards compared to prior years based on desired managerial focus,
competitive pressures, and other factors.
Payout of 2016 PSUs will be based on goal achievement as shown
in the following chart. Adjusted ROE of our core business segments, averaged over the three-year period 2016-2018, will be ranked
against the average ROE results of those banks which, at the end of the performance period, comprise the KBW Regional Bank Index
(ticker symbol KRX). Payout can range from 50% to 150% of the target amount granted, or payout can be zero if performance falls
below the 50%
threshold. Dividends accrue until payment but are paid only
to the extent the underlying units vest. Performance will be determined in 2018 but payment will be deferred until 2020.
Only whole-year ROE results count in the rankings. The adjustments
to our ROE consist of several exclusions including the non-strategic segment’s earnings and allocated equity, certain accounting
changes, litigation settlements, restructuring or right-sizing expenses, and items described under certain specific areas of accounting
guidance.
The KRX banks currently are fifty U.S. regional banks, a wider
range of institutions than those in our Peer Bank group used for other purposes. For PSU awards, the Committee believes that an
independently-selected basket of competitors like the KRX banks provides a larger, more stable group against which to measure
our performance over a three-year period. This rank structure was continued from recent years primarily because the use of a relative-rank
goal rather than an absolute measure should provide a better reflection of our results versus competitors. It was chosen in part
because of the volatile environment for us and our industry. The awards should self-adapt to industry events which will unfold
over a three-year time horizon and which cannot be predicted in advance.
Fixed Income Award Practices
The overall amount of annual stock awards granted to Mr. Kisber,
the head of our fixed income business, is impacted by the previous year’s results. Early each year, a maximum stock award
opportunity is approved by the Committee as part of his entire compensation package, as discussed in “Relative Sizing and
Mix” starting on page 47 above. Early in the next year, actual grants are approved which may be less than the opportunity
levels, as discussed in “MIP Bonus for FTN Executive” on page 51 above. The amounts actually granted are based on
an assessment of
fixed income results. Quantitative and qualitative factors are
considered.
Although Mr. Kisber’s opportunity for awards was substantial,
as mentioned above, only RSUs were granted to him in early 2016 (shown in the Summary Compensation Table on page 58). His awards
in 2016, though higher than in 2015, were well below the maximum possible due to the revenues and earnings achieved by our fixed
income business segment in 2015 in the face of unfavorable market conditions. As mentioned in “MIP Bonus for FTN Executive”
(page 51 above), Mr. Kisber’s stock awards in 2017, related to 2016 performance, were substantially larger than in 2016
or 2015.
2012 CEO Retention Award
In May 2012, the Committee granted our CEO a special performance-based
retention award. The award consists of PSUs covering $3 million of stock (valued at grant) with a highly challenging goal. The
award will vest and pay if our stock price achieves $20/share for an entire 60 trading-day (3 month) period before the fifth anniversary
of grant, or if the TSR value of a share of our stock measured at the end of those five years is at least $20/share. Our stock
value at grant was $9.22 per share, so to achieve either of those alternative goals our stock value had to more than double in
five years.
At the time of grant, the Committee considered these goals to
be appropriately challenging. The low interest rate and subdued economic environments, along with continued drag from our exited
“non-strategic” businesses, created substantial challenges to achieving the kind of sustained stock value growth necessary
to meet either of the goals.
The 2012 award has not yet vested or forfeited; the performance
period will end on May 7, 2017. It is no longer possible to achieve the $20-for-60-days goal; however, it is reasonably possible
that the TSR goal will be met.
TSR value is measured using a starting value ($9.22), a closing
value, and an assumed reinvestment of actual dividends since grant. For this award, the 20 trading-day (one month) average price
at the end of the performance period will be used in place of a single-day price.
As measured on March 1, 2017 (shortly before printing this proxy
statement), TSR value had improved substantially to $22.31. Our stock price then was $20.76/share. If the 20-day average stock
price used for this award turns out to be the
same as the March 1 price, performance will significantly exceed
the TSR goal.
As mentioned above in “CEO Pay and Performance,”
in the TSR chart on page 42, our TSR percentage for the five calendar years ending with 2016 is 269%. The Committee believes our
overall business performance over the past five years has been excellent, as reflected in the consistent rise in our stock value
each year and the outstanding TSR value that has produced to date. While the performance period for the 2012 award has not fully
run and final performance results cannot yet be determined, the Committee is pleased with the significant growth in shareholder
value, and the achievement of the award’s TSR performance goal, which we have achieved to date.
2016 CEO Retention Award
In February 2016, the Committee approved a special retention
award for our CEO. The award consists of 155,238 special retention stock units and 411,747 stock options.
The units have a 7-year service vesting and performance period.
The units’ performance goal is met if the TSR value of a share of our stock during the seven-year period is at least $11.63/share,
which is slightly higher than our shares’ market value on the grant date.
The stock options were granted at-market with service vesting
in 2020, 2021, and 2022. The options expire in 2023, seven years after grant.
The Committee wanted this award to have substantial retention
value as well as a strong linkage to shareholder value. In making this award to Mr. Jordan, the Committee wanted to close the
gap it perceived at that time in the competitiveness of his target compensation and the retention value of his outstanding awards
relative to the risk that another company might try to recruit him. The Committee believes that Mr. Jordan’s leadership
and experience have been critical to our company’s recent successes and will remain crucial in the years to come.
Deferral, Retirement, and Other
Benefits
Benefits other than Change in Control
We provide retirement and other post-employment benefits that
we believe are customary in our industry. We provide them to remain competitive in retaining and recruiting talent. The table
below summarizes the major types of benefits provided to
NEOs. Many of these benefits are broad-based, available to most
or all full-time employees, and many others are available generally to employees whose compensation levels exceed certain thresholds,
regardless of officer status.
Deferral, Retirement, and Other Benefits
Summary
|
Benefit
|
|
Type
|
|
Benefit Provided
|
|
Further Information
|
|
|
|
|
|
|
|
|
Savings Plan
(broad-based)
|
|
Tax-qualified defined contribution (retirement savings)
|
|
Participants may defer a portion of salary into a fully funded tax-advantaged savings account, up to IRS dollar limits. We provide a 100% match on the first 6% of salary deferred.
|
|
Match amounts for the NEOs are included in column (i) of the Summary Compensation Table on page 58, with additional information provided in the table captioned “All Other Compensation (Col (i)) for 2016” on page 58 and its explanatory notes.
|
Savings
Restoration Plan
|
|
Non-qualified deferral
|
|
Provides a restorative benefit to savings plan participants whose compensation exceeds IRS limits, as if the savings plan were not subject to those limits.
|
|
Restoration match amounts for the NEOs are included with savings plan match amounts; see the row above. Match amount and withdrawal information is provided under “Non- Qualified Deferred Compensation Plans” beginning on page 67.
|
|
Deferred Compensation Plan
|
|
Non-qualified deferral
|
|
Participants may defer payment of a portion of salary, bonus, and other cash compensation. Taxation is deferred until paid. There is no company match. The plan pays at-market returns indexed to the performance of certain mutual funds selected by the participant. We hedge this obligation by purchasing those funds.
|
|
Deferral and withdrawal information for the NEOs, along with other plan information, is provided under “Non-Qualified Deferred Compensation Plans” beginning on page 67.
|
|
Pension Plan (broad-based)
|
|
Tax-qualified defined benefit (retirement)
|
|
Participants earned a defined retirement benefit dependent mainly on salary level (up to IRS limits) and tenure. The plan was closed to new hires after August 31, 2007; the benefit was frozen at year-end 2012.
|
|
Pension benefit information for the NEOs, along with other plan information, is provided under “Pension Plans” beginning on page 66. Any change in pension value for the NEOs is included in column (h) of the Summary Compensation Table on page 58 and the related notes on page 59.
|
|
Pension Restoration Plan
|
|
Non-qualified defined benefit (retirement)
|
|
Provides a restorative benefit to pension plan participants. The two plans work together as if the IRS limits did not exist.
|
|
Restoration benefits and value changes are included with those of the pension plan; see the row above.
|
|
Benefit
|
|
Type
|
|
Benefit Provided
|
|
Further Information
|
|
|
|
|
|
|
|
|
|
Health & Welfare programs (broad- based)
|
|
Cafeteria benefit program
|
|
Employees may elect annually to participate in several programs such as health and dental insurance, vision, dependent care, etc. We provide an allowance for this purpose based on salary, tenure, and certain wellness incentives, subject to IRS limits. A participant may elect to use any leftover allowance for the savings plan.
|
|
The amounts of these broad- based benefits for the NEOs are not reported in other tables or charts of this proxy statement, except that any savings plan contributions made by the company are reported as part of the match amounts. See the “Savings Plan” row above.
|
|
Survivor Benefit Plan
|
|
Death benefit
|
|
Provides a benefit of 2.5 times base salary if death occurs during active service, which is reduced to 1.0 times salary if death occurs following departure due to disability or retirement. This executive benefit substitutes for a broad-based survivor benefit.
|
|
Cost amounts for the NEOs are included in column (i) of the Summary Compensation Table on page 58, with additional information provided in the table captioned “All Other Compensation (Col (i)) for 2016” on page 58 and its explanatory notes.
|
|
Executive disability program
|
|
Disability benefit
|
|
The executive benefit cap is $25,000 per month. An executive may elect to purchase, with personal funds, an additional disability benefit of up to $5,000 per month. This executive benefit substitutes for a broad-based survivor benefit.
|
|
Cost amounts for the NEOs are included in column (i) of the Summary Compensation Table on page 58, with additional information provided in the table captioned “All Other Compensation (Col (i)) for 2016” on page 58 and its explanatory notes.
|
|
Other Perquisites
|
|
Misc.
|
|
We provide a limited range of other executive perquisites which are customary in our industry, including financial counseling, imputed income for certain usage of corporate aircraft (for spousal attendance at business events), and executive wellness.
|
|
Cost amounts for the NEOs are included in column (i) of the Summary Compensation Table on page 58, with additional information provided in the table captioned “All Other Compensation (Col (i)) for 2016” on page 58 and its explanatory notes.
|
Change in Control (CIC)
Benefits
Since the mid-1980s the financial services industry has experienced
periods of significant consolidation. Merger activity abated substantially following the last recession, but activity excluding
the four largest U.S. banks has resumed in the past few years. Although these circumstances have created substantial business opportunities
for
us and others, they have also created substantial personal uncertainties
for employees. Our CIC severance agreements and CIC plan features were put in place a number of years ago in response to these
uncertainties.
We have CIC severance agreements with each NEO other than Mr.
Kisber. These are not employment agreements. They provide significant benefits if employment is terminated in connection with a
CIC event, but otherwise provide no employment protection. Additional information about these contracts is provided under the caption
“Change in Control Severance Agreements” in the “Change in Control (CIC) Arrangements” section beginning
on page 69 of this proxy statement.
The primary objectives of our CIC severance agreements are to
allow us to compete for executive talent during normal times, mitigating the personal risk that a CIC would present. If a CIC situation
were to arise, the agreements also provide an incentive for our executive team to
remain with the company, focused on corporate objectives, during
the pursuit, closing, and transition periods that accompany CIC transactions in our industry.
Under many of our programs a CIC event can cause awards or benefits
to vest, be paid, or be calculated and paid at target payout levels. The main objective of these features is to allow us to offer
competitive compensation packages in an industry where robust periods of consolidation occur. Like our CIC severance agreements,
these program features have a double trigger, which means that vesting or payment is accelerated only when a CIC event occurs resulting
in termination of employment.
Compensation Committee Report
The Compensation Committee Report is located on page 21 of this
proxy statement under the caption “The Compensation Committee.”
Recent
Compensation
This Recent Compensation section provides detailed information
about the compensation paid to our named executive officers in 2016. This section should be read in conjunction with the immediately
preceding Compensation Discussion and Analysis section.
2016 Direct Compensation Actually Paid
A comprehensive Summary Compensation Table, along with detailed
footnotes and commentary, is presented in the next several sections. To provide context for that information, the following chart
shows direct compensation amounts actually paid in 2016 to our named executive officers, except that the 2016 bonus (which was
paid early in
2017) is included rather than any earlier bonus. Direct compensation
components include salary, bonus paid, and stock awards vested. For this purpose, amounts are considered “paid” if
they were paid or deferred on a fully-vested basis. All amounts are shown before reduction for withholding taxes and other payroll
deductions.
2016 Direct Compensation
Actually Paid
($ in millions
)
Key details regarding the segments in this chart follow:
|
•
|
Management Incentive Plan (MIP) Bonus
. Each annual bonus award under
the MIP for 2016 was paid in cash early in 2017.
|
|
|
|
|
•
|
Stock Awards Vested.
Awards vested in 2016 consisted of performance stock units
(PSUs), restricted stock shares (RS), RSUs, and stock
|
|
options. Values are based on the market price of our stock on the vesting date.
Stock options are valued based on the “spread” at vesting, which is the difference between market price at that
time and the option price; any negative spreads at vesting are ignored. Bonuses for 2012 were paid partly in RS, portions
of which vested in 2016 and are included in this segment.
|
Summary Compensation & Award Grant Tables
Summary Compensation Table
The amounts shown in the Summary Compensation Table include all
compensation earned for 2016, including amounts deferred by those persons for all services rendered in all capacities to us and
our subsidiaries. Compensation amounts from the past two years
are also included. Additional compensation information is provided
in the remainder of this section. No named executive officer who served as a director was separately compensated as a director.
Summary Compensation Table
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
Name and
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards*
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive
Plan
Compensa-
tion
($)
|
|
Change in
Pension
Value &
NonQualified
Deferred
Compensation
Earnings*
($)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D.B. Jordan
|
|
2016
|
|
$
|
868,654
|
|
|
—
|
|
$
|
2,736,995
|
|
|
$
|
1,768,560
|
|
|
$
|
1,323,000
|
|
|
$
|
225,014
|
|
|
$
|
88,227
|
|
|
$
|
7,010,450
|
|
|
Chairman,
|
|
2015
|
|
|
815,000
|
|
|
—
|
|
|
1,144,893
|
|
|
|
429,016
|
|
|
|
1,155,000
|
|
|
|
—
|
|
|
|
81,582
|
|
|
|
3,625,491
|
|
|
President, &
|
|
2014
|
|
|
760,000
|
|
|
—
|
|
|
1,054,486
|
|
|
|
418,371
|
|
|
|
904,400
|
|
|
|
243,395
|
|
|
|
97,485
|
|
|
|
3,478,137
|
|
|
CEO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
W.C. Losch
|
|
2016
|
|
$
|
468,654
|
|
|
—
|
|
$
|
498,804
|
|
|
$
|
168,685
|
|
|
$
|
513,000
|
|
|
$
|
—
|
|
|
$
|
42,329
|
|
|
$
|
1,691,472
|
|
|
EVP & CFO
|
|
2015
|
|
|
425,000
|
|
|
—
|
|
|
604,276
|
|
|
|
167,247
|
|
|
|
425,000
|
|
|
|
—
|
|
|
|
41,382
|
|
|
|
1,662,905
|
|
|
|
|
2014
|
|
|
425,000
|
|
|
—
|
|
|
398,415
|
|
|
|
158,080
|
|
|
|
361,250
|
|
|
|
—
|
|
|
|
47,732
|
|
|
|
1,390,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.E. Kisber
|
|
2016
|
|
$
|
600,000
|
|
|
—
|
|
$
|
352,992
|
|
|
$
|
—
|
|
|
$
|
2,500,000
|
|
|
$
|
65,990
|
|
|
$
|
50,347
|
|
|
$
|
3,569,329
|
|
|
President–
|
|
2015
|
|
|
600,000
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
2,500,000
|
|
|
|
—
|
|
|
|
48,917
|
|
|
|
3,148,917
|
|
|
FTN Financial
|
|
2014
|
|
|
600,000
|
|
|
—
|
|
|
509,994
|
|
|
|
404,684
|
|
|
|
2,124,000
|
|
|
|
185,746
|
|
|
|
109,308
|
|
|
|
3,933,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D.T. Popwell
|
|
2016
|
|
$
|
493,654
|
|
|
—
|
|
$
|
525,050
|
|
|
$
|
177,563
|
|
|
$
|
540,000
|
|
|
$
|
49,306
|
|
|
$
|
59,959
|
|
|
$
|
1,845,532
|
|
|
President–
|
|
2015
|
|
|
450,000
|
|
|
—
|
|
|
672,517
|
|
|
|
177,086
|
|
|
|
450,000
|
|
|
|
—
|
|
|
|
53,853
|
|
|
|
1,803,456
|
|
|
Banking
|
|
2014
|
|
|
450,000
|
|
|
—
|
|
|
421,860
|
|
|
|
167,375
|
|
|
|
400,000
|
|
|
|
144,163
|
|
|
|
67,663
|
|
|
|
1,651,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C.T. Tuggle
|
|
2016
|
|
$
|
475,000
|
|
|
—
|
|
$
|
391,905
|
|
|
$
|
132,539
|
|
|
$
|
461,700
|
|
|
$
|
9,750
|
|
|
$
|
40,883
|
|
|
$
|
1,511,777
|
|
|
EVP & General
|
|
2015
|
|
|
475,000
|
|
|
—
|
|
|
391,896
|
|
|
|
146,868
|
|
|
|
427,500
|
|
|
|
—
|
|
|
|
38,343
|
|
|
|
1,479,607
|
|
|
Counsel
|
|
2014
|
|
|
475,000
|
|
|
—
|
|
|
338,411
|
|
|
|
134,275
|
|
|
|
363,000
|
|
|
|
208,636
|
|
|
|
51,266
|
|
|
|
1,570,588
|
|
Explanations of certain columns follow:
Col (c) Salary.
Annual cash salary is shown.
Col (d) Bonus.
No discretionary bonuses were paid
to the named executive officers. Column (g) shows the annual MIP bonus awards earned.
Cols (e)-(f) Accounting Values.
Columns (e) and
(f) show the grant date fair value of the awards using the accounting method applicable to our financial statements. The accounting
valuation method makes assumptions about growth and volatility of our stock value, expected duration in the case of options, vesting,
forfeiture, future company performance, and other matters. A discussion of those assumptions appears in note 19 to our 2016 annual
report to shareholders. Actual future events may be substantially inconsistent with the assumptions. Accordingly, the actual values
realized by an award holder are
likely to differ substantially from these accounting values.
Col (e) Stock Awards.
Column (e) includes the accounting
values of RSU, PSU, and retention RS awards granted during each year. These do not represent amounts paid or earned; they are the
values attributed to awards under applicable accounting rules.
Col (e) Regular PSUs.
PSUs are performance-based,
using a three-year performance period. Eventual payout may be higher or lower than the accounting values used in column (e), and
may be zero. PSUs also have a service-vesting requirement. PSUs granted after 2014 also have a mandatory two-year deferral period
after vesting. Generally, PSU performance depends upon our adjusted core-segment ROE ranking relative to certain peer banks during
the performance period. For 2014, a second type of PSU was granted
(20% of the total that year), the performance of which depended
upon the Committee’s subjective assessment of total corporate performance as well as individual performance over that performance
period (2014-16). In all cases, a percentage of PSUs (50% to 150%) will vest if threshold or higher performance goals are achieved
during the performance period and if the holder remains employed with the company through the vesting date. PSUs settle with shares
rather than cash. In column (e) PSU amounts are shown at their original accounting values assigned at grant. Those accounting values
are less than the possible payouts if all performance conditions are maximally achieved. The following table provides a summary
of the maximum payouts of the regular annual PSU awards for each named executive, based on our stock values on the respective grant
dates.
Maximum Dollar Values* of Regular PSUs
(Based on Share Price at Grant Date)
|
Name
|
|
2014
|
|
2015
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Mr.
Jordan
|
|
$
|
1,054,486
|
|
|
$
|
1,144,996
|
|
|
$
|
1,641,213
|
|
Mr.
Losch
|
|
|
199,207
|
|
|
|
223,186
|
|
|
|
249,465
|
|
Mr.
Kisber
|
|
|
764,991
|
|
|
|
—
|
|
|
|
—
|
|
Mr.
Popwell
|
|
|
210,930
|
|
|
|
236,306
|
|
|
|
262,584
|
|
Mr.
Tuggle
|
|
|
169,194
|
|
|
|
195,993
|
|
|
|
196,000
|
|
*
|
Maximum dollar values = 150% of target unit levels for all years presented
valued at grant date fair value. Actual maximum values depend upon our actual stock price when paid.
|
Col (e) Regular RSUs.
Since 2014, the annual equity
award package has included RSUs which vest in three years and settle in shares.
Col (e)-(f) Retention Awards
. On occasion special
retention awards are made to selected individuals.
In 2015, retention RS awards were granted to Messrs. Losch and
Popwell. They vest five years after grant.
In 2016, retention stock units (col (e)) and stock options (col
(f)) were granted to Mr. Jordan. The stock units have a seven-year service-vesting and performance period. The option price was
set at our market price on the grant date. The retention options have a seven-year term and vest in equal parts four, five, and
six years after grant.
Col (f) Stock Options.
Column (f) includes the
accounting values of stock options granted.
Col (g) Annual MIP Bonus Awards.
This column shows
the annual bonus earned for each year under our MIP. For all three years, MIP bonuses (except for Mr. Kisber) were based upon achievement
in the following areas: pre-set levels of adjusted annual pre-tax earnings (core-segment earnings for 2014 and 2015, consolidated
for 2016); execution of personal plan goals; and individual contribution to risk management, quality of earnings, and objectives
for our non-strategic business segment; and the results of a balanced scorecard process ranking us among selected peer banks on
a matrix of balance sheet, capital, expense, earnings, and other measures. Mr. Kisber’s bonuses were based on the net profits
of our FTN Financial division, of which he is the President. For any given year, FTN net profits also drove stock awards granted
to Mr. Kisber the following year.
Col (h) Pension & Deferred Compensation
. Column
(h) includes changes in defined benefit pension actuarial values, which are the aggregate increase during the year in actuarial
value of both pension plans (qualified and restoration). Our pension plans were closed to new employees in 2007. Mr. Losch does
not participate. Pension benefits were frozen in 2012. Incremental changes in actuarial pension values occur after 2012 mainly
due to changes in discount rates used, changes in mortality tables, and changes to life expectancy due to the passage of time.
No above-market earnings on deferred compensation were accrued during the year for any of the named executives.
Col (i) All Other.
Elements of “All Other
Compensation” for 2016 consist of the following:
All Other Compensation
(Col (i)) for 2016
|
(i)(a)
|
|
(i)(b)
|
|
(i)(c)
|
|
(i)(d)
|
|
|
|
|
Name
|
|
Perquisites
&
Other
Personal
Benefits
|
|
401(k)
Match
|
|
Life
Insur.
Prems.
|
|
Total
Col (i)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Jordan
|
|
$
|
26,522
|
|
|
$
|
52,859
|
|
|
$
|
8,846
|
|
|
$
|
88,227
|
|
|
|
Mr. Losch
|
|
|
8,001
|
|
|
|
28,892
|
|
|
|
5,435
|
|
|
|
42,328
|
|
|
|
Mr. Kisber
|
|
|
6,120
|
|
|
|
36,715
|
|
|
|
7,512
|
|
|
|
50,347
|
|
|
|
Mr. Popwell
|
|
|
23,802
|
|
|
|
30,335
|
|
|
|
5,822
|
|
|
|
59,959
|
|
|
|
Mr. Tuggle
|
|
|
22,175
|
|
|
|
13,142
|
|
|
|
5,565
|
|
|
|
40,882
|
|
|
Explanations of certain columns in the Col (i) table follow:
Col (i)(b) “Perquisites and Other Personal Benefits”
includes the following types of benefits: Flexible Dollars, Financial Counseling, Disability Insurance, and Aircraft Usage. Benefits
are valued at the incremental cost to us. “Flexible Dollars” represents our contribution to our broad-based benefits
plan, a qualified cafeteria-type benefit plan. “Financial Counseling” represents payments for the preparation of income
tax returns and related financial counseling. “Disability Insurance” represents insurance premiums with respect to
our disability program. “Aircraft Usage” represents imputed income to the executives when their spouses accompany them
on a business trip using non-commercial aircraft. This column also includes imputed taxable income from our company-wide
wellness program, and (for Mr. Jordan) the cost of participating
in the Mayo Clinic Executive Health Program. The Board of Directors requires Mr. Jordan to participate in the Mayo program.
Col (i)(c) “401(k) Match”
represents
our matching contribution to our 401(k) savings plan and to the related savings restoration plan. Any flexible benefits plan contributions
to the savings plan are included in column (i)(b).
Col(i)(d) “Life Insurance Premiums”
represents supplemental life insurance premiums. Under our survivor benefits plan, a benefit of 2.5 times annual base salary is
paid in a lump sum if the participant’s death occurs prior to retirement. The benefit is one times final salary, payable
in equal annual installments over ten years, if death occurs after retirement.
2016 Grants of Plan-Based
Awards
The following table provides information about the MIP bonus
opportunity established for, and the grants of PSUs, stock options, RSUs, and retention awards during, 2016. In this table the
MIP bonus opportunity is considered a “Non-Equity Incentive Plan Award,” PSUs are considered to be
“Equity Incentive Plan Awards,” while RSUs are considered
to be “All Other Stock Awards.” In the table, each row represents a separate award grant. A column for a row is blank
if it does not apply to the type of award listed in that row or if the dollar amount is $0.
Awards Granted in 2016
|
(a)
|
|
|
(b)
|
|
(c)
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
|
(i)
|
|
|
|
(j)
|
|
|
|
(k)
|
|
|
|
(l)
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts
under Non-Equity Incentive
Plan Awards
|
|
Estimated
Future Payouts
under Equity Incentive
Plan Awards
|
|
All Other
Stock
Awards:
Number
of Shares
of Stock
|
|
|
All Other
Option
Awards:
Number
of
Securities
Underlying
|
|
Exercise
price of
Option
|
|
Grant date
Fair Value
of Stock
|
|
|
Name
|
|
Award
|
|
Grant
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
|
|
Maximum
($)
|
|
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
or
Units
(#)
|
|
|
Options
(#)
|
|
Awards
($/sh)
|
|
and Option
Awards($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Jordan
|
|
MIP
|
|
2-11
|
|
$612,500
|
|
$
|
1,225,000
|
|
|
$
|
1,837,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
Opt
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
188,253
|
|
|
$
|
11.62
|
|
|
$
|
554,895
|
|
|
|
|
PSU
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
57,046
|
|
|
114,092
|
|
|
171,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,094,142
|
|
|
|
|
RSU
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,063
|
|
|
|
|
|
|
|
|
|
|
|
546,872
|
|
|
|
|
Ret SU
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
NA
|
|
|
155,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,095,980
|
|
|
|
|
Ret Opt
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
411,747
|
|
|
$
|
11.62
|
|
|
|
1,213,665
|
|
|
Mr. Losch
|
|
MIP
|
|
2-11
|
|
$237,500
|
|
$
|
475,000
|
|
|
$
|
712,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
Opt
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,228
|
|
|
$
|
11.62
|
|
|
$
|
168,685
|
|
|
|
|
PSU
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
8,671
|
|
|
17,342
|
|
|
26,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
166,310
|
|
|
|
|
RSU
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,614
|
|
|
|
|
|
|
|
|
|
|
|
332,495
|
|
|
Mr. Kisber
|
|
MIP
|
|
2-11
|
|
NA
|
|
|
NA
|
|
|
$
|
3,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
RSU
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,378
|
|
|
|
|
|
|
|
|
|
|
$
|
352,992
|
|
|
Mr. Popwell
|
|
MIP
|
|
2-11
|
|
$250,000
|
|
$
|
500,000
|
|
|
$
|
750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
Opt
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,240
|
|
|
$
|
11.62
|
|
|
$
|
177,563
|
|
|
|
|
PSU
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
9,127
|
|
|
18,254
|
|
|
27,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
175,056
|
|
|
|
|
RSU
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,120
|
|
|
|
|
|
|
|
|
|
|
|
349,994
|
|
|
Mr. Tuggle
|
|
MIP
|
|
2-11
|
|
$213,750
|
|
$
|
427,500
|
|
|
$
|
641,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA
|
|
|
|
|
Opt
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,965
|
|
|
$
|
11.62
|
|
|
$
|
132,539
|
|
|
|
|
PSU
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
6,813
|
|
|
13,625
|
|
|
20,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130,664
|
|
|
|
|
RSU
|
|
2-11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,482
|
|
|
|
|
|
|
|
|
|
|
|
261,241
|
|
Explanations of certain columns follow:
Col (b).
An award is effective for legal and
accounting purposes on its grant date. For each
award shown, the Compensation Committee took final action to
grant each award on that date.
Cols (c)-(e) MIP
Bonus Opportunities.
The Committee established performance criteria and set target
amounts early in 2016 for MIP bonus opportunities. Details about the opportunities, their
goals, and their limitations are discussed in “Annual MIP Bonus” beginning on
page 49.
Mr. Kisber’s compensation package, including annual MIP
bonus, is based on a percentage of net profits generated by the FTN fixed income division, without any threshold or target levels.
The Compensation Committee established an overall maximum of $6 million for Mr. Kisber’s 2016 package, payable in this order
if earned: first, $600,000 of salary; second, $2.5 million of MIP cash bonus; third, $1.9 million of regular annual stock awards
(RSUs, PSUs, and options) to be granted in 2017; and fourth, $1 million in cash-paid MIP-driven RSUs, also to be granted in 2017.
His entire MIP bonus opportunity was, therefore, $3.5 million. Correspondingly, all stock awards granted to Mr. Kisber in 2016,
whether or not connected to the MIP, relate back to FTN’s net profits in 2015.
The information in columns (c)-(e) shows 2016 MIP bonus opportunities.
Information concerning MIP bonuses actually earned for 2016 is shown in column (g) of the Summary Compensation Table and under
the caption “Annual MIP Bonus” beginning on pages 58 and 49, respectively.
Cols (f)-(h) Stock Incentives.
The performance
requirements for the 2016 PSU awards are discussed in the notes for column (e) of the Summary Compensation Table above. Performance
below the threshold level will result in 0% payout. Performance above threshold will result in payouts ranging from 50% (col (f))
to 100% (col (g)) to 150% (col (h)) of target levels. See “Performance Stock Units” beginning on page 51 for additional
information. The 2016 PSUs will vest
on May 12, 2019 if threshold performance is achieved, but payment
will be deferred for two years.
Also included in these columns is Mr. Jordan’s special
retention stock units. These have a performance goal based on total shareholder return for a seven-year performance period. If
the performance goal and the seven-year service requirements are met, payout is 100%; if not, payout is zero. There are no lesser
or greater payment levels for varying degrees of performance.
Col (i) Other Stock Awards.
Column (i) includes
RSUs granted in 2016.
Cols (j)-(k) Stock Options.
Column (j) shows
the number of shares granted under options to the named executives in 2016, and column (k) shows the exercise price per share
of those options. The exercise price was the market price of our stock on the grant date. Mr. Jordan received two option grants,
a regular annual award and a special retention award, which are shown in separate rows in the table. For additional information
regarding option awards see the discussion of column (f) of the Summary Compensation Table beginning on page 58 of this proxy
statement.
Col (l) Grant date fair values.
Column (l) reflects
the accounting value of the awards shown in columns (g), (i) and (j). Our stock price on the grant date, February 11, 2016, was
$11.62 per share. For stock options, the grant date fair value is based on the Black Scholes value on the grant date, which was
$2.9476 per share. For additional information see the discussion of columns (e) and (f) of the Summary Compensation Table beginning
on page 58.
Supplemental Disclosures
for Summary and Grant Tables
For information about the rationale behind, sizing of, and other
aspects concerning the major compensation elements, see “Overview of Direct Compensation Components,” “Relative
Sizing & Mix,” and “Salary” beginning on pages 43, 47, and 49, respectively.
The vesting and expiration schedules of equity-based awards
granted in 2016 are as follows:
|
•
|
Regular stock options vest in equal parts on March 2 of the first four years after grant, and expire
on March 2 seven years after grant.
|
|
|
|
|
•
|
PSUs vest on May 12 three years after grant if goals are achieved at the 50% payout level or greater.
|
|
•
|
RSUs vest on March 2 three years after grant.
|
|
|
|
|
•
|
Retention stock units vest on May 12 seven years after grant if the TSR goal is achieved.
|
|
|
|
|
•
|
Retention stock options vest in equal parts on March 2 four, five, and six years after grant, and expire on March 2 seven
years after grant.
|
Vesting information related to all equity awards held by the
named executives at year-end appears under the heading “Outstanding Equity Awards at Fiscal Year-End” beginning on
page 63, especially in the notes to the table in that section. For all awards, vesting will or may be accelerated or prorated
in the cases of death, disability, retirement, and qualifying termination after a change in control.
For performance awards, service-vesting may be waived, but performance
goals generally are not waived, following retirement, and awards may be pro-rated. Additional information concerning the acceleration
features of awards is set forth under the caption “Change in Control (CIC) Arrangements” on page 69.
Dividends or dividend equivalents accrue at normal declared
rates on stock awards other than options. Accrued dividends and equivalents are paid at vesting, or forfeit if the award is forfeited.
The Compensation Committee has approved a mandatory tax withholding
feature under which
vested shares are automatically withheld in an amount necessary
to cover minimum required withholding taxes. Starting in 2017, a supplemental feature allows the holder to elect withholding at
the maximum tax rate instead. Options have no mandatory or supplemental tax feature. Under our Equity Compensation Plan we do
not re-use, in new grants, shares withheld to cover taxes.
The Compensation Committee generally has the power to impose
deferral of payment as a term or condition of an award. The 2016 PSUs have a mandatory two-year payment deferral after vesting.
Outstanding Stock Awards at Fiscal
Year-End
The following table provides information about stock options,
all types of restricted stock and stock units, and all performance stock awards (at target levels) held at December 31, 2016 by
the named executive officers.
Outstanding Equity Awards at Fiscal Year-End 2016
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
|
(f)
|
|
(g)
|
|
(h)
|
|
|
(i)
|
|
(j)
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unearned
Options(#)
|
|
Option
Exercise
Price
($/sh)
|
|
|
Option
Expiration
Date
|
|
Number
of Shares
or Units
of Stock
Held that
Have Not
Vested(#)
|
|
Market
Value of
Shares
or
Units of
Stock that
Have Not
Vested($)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
that Have Not
Vested(#)
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights that
Have Not
Vested($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Jordan
|
|
139,075
|
|
46,359
|
|
—
|
|
$
|
10.82
|
|
|
2/12/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,728
|
|
59,728
|
|
—
|
|
|
11.77
|
|
|
2/12/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,720
|
|
80,160
|
|
—
|
|
|
14.28
|
|
|
3/2/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
188,253
|
|
—
|
|
|
11.62
|
|
|
3/2/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
411,747
|
|
—
|
|
|
11.62
|
|
|
3/2/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103,647
|
|
|
$2,073,976
|
|
|
717,678
|
|
|
$14,360,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Losch
|
|
48,607
|
|
—
|
|
—
|
|
$
|
11.85
|
|
|
2/11/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,134
|
|
15,712
|
|
—
|
|
|
10.82
|
|
|
2/12/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,568
|
|
22,568
|
|
—
|
|
|
11.77
|
|
|
2/12/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,416
|
|
31,250
|
|
—
|
|
|
14.28
|
|
|
3/2/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
57,228
|
|
—
|
|
|
11.62
|
|
|
3/2/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,078
|
|
|
$1,662,391
|
|
|
40,952
|
|
|
$ 819,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Kisber
|
|
10,025
|
|
—
|
|
—
|
|
$
|
28.27
|
|
|
7/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,846
|
|
—
|
|
—
|
|
|
36.09
|
|
|
7/1/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,312
|
|
—
|
|
—
|
|
|
27.46
|
|
|
7/1/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
166,358
|
|
55,453
|
|
—
|
|
|
10.82
|
|
|
2/12/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,774
|
|
57,774
|
|
—
|
|
|
11.77
|
|
|
2/12/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,513
|
|
—
|
|
—
|
|
|
23.49
|
|
|
7/2/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,156
|
|
—
|
|
—
|
|
|
15.84
|
|
|
7/1/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,378
|
|
|
$ 607,864
|
|
|
43,330
|
|
|
$ 867,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Popwell
|
|
49,907
|
|
16,636
|
|
—
|
|
$
|
10.82
|
|
|
2/12/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,896
|
|
23,896
|
|
—
|
|
|
11.77
|
|
|
2/12/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,029
|
|
33,088
|
|
—
|
|
|
14.28
|
|
|
3/2/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
60,240
|
|
—
|
|
|
11.62
|
|
|
3/2/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,078
|
|
|
$1,802,461
|
|
|
43,253
|
|
|
$ 865,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Tuggle
|
|
39,510
|
|
13,170
|
|
—
|
|
$
|
10.82
|
|
|
2/12/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,169
|
|
19,170
|
|
—
|
|
|
11.77
|
|
|
2/12/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,147
|
|
27,442
|
|
—
|
|
|
14.28
|
|
|
3/2/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
44,965
|
|
—
|
|
|
11.62
|
|
|
3/2/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,945
|
|
|
$1,199,499
|
|
|
34,033
|
|
|
$ 681,000
|
|
Explanations of certain columns in the table follow:
Col (c) Unvested Options.
The vesting dates
of options reported in column (c) are:
Stock Options
Unvested at Year-End
|
Grant
|
|
Vesting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
Date
|
|
Mr. Jordan
|
|
|
Mr. Losch
|
|
|
|
Mr.
Kisber
|
|
|
Mr. Popwell
|
|
|
Mr. Tuggle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/12/2013
|
|
2/12/2017
|
|
|
46,359
|
|
|
|
15,712
|
|
|
|
55,453
|
|
|
|
16,636
|
|
|
|
13,170
|
|
|
2/12/2014
|
|
2/12/2017
|
|
|
29,864
|
|
|
|
11,284
|
|
|
|
28,887
|
|
|
|
11,948
|
|
|
|
9,585
|
|
|
|
|
2/12/2018
|
|
|
29,864
|
|
|
|
11,284
|
|
|
|
28,887
|
|
|
|
11,948
|
|
|
|
9,585
|
|
|
2/12/2015
|
|
3/2/2017
|
|
|
26,720
|
|
|
|
10,416
|
|
|
|
—
|
|
|
|
11,029
|
|
|
|
9,147
|
|
|
|
|
3/2/2018
|
|
|
26,720
|
|
|
|
10,417
|
|
|
|
—
|
|
|
|
11,029
|
|
|
|
9,147
|
|
|
|
|
3/2/2019
|
|
|
26,720
|
|
|
|
10,417
|
|
|
|
—
|
|
|
|
11,030
|
|
|
|
9,148
|
|
|
2/11/2016
|
|
3/2/2017
|
|
|
47,063
|
|
|
|
14,307
|
|
|
|
—
|
|
|
|
15,060
|
|
|
|
11,241
|
|
|
(regular)
|
|
3/2/2018
|
|
|
47,063
|
|
|
|
14,307
|
|
|
|
—
|
|
|
|
15,060
|
|
|
|
11,241
|
|
|
|
|
3/2/2019
|
|
|
47,063
|
|
|
|
14,307
|
|
|
|
—
|
|
|
|
15,060
|
|
|
|
11,241
|
|
|
|
|
3/2/2020
|
|
|
47,064
|
|
|
|
14,307
|
|
|
|
—
|
|
|
|
15,060
|
|
|
|
11,242
|
|
|
2/11/2016
|
|
3/2/2020
|
|
|
137,249
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(retention)
|
|
3/2/2021
|
|
|
137,249
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
3/2/2022
|
|
|
137,249
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Col (g) Unvested Non-Performance Shares & Units.
Column (g) includes unvested RSUs and RS, specifically regular annual RSUs and special retention RS awards. The vesting
dates of those awards are shown below:
RS & RSU Awards Unvested at Year-End
|
Grant
|
|
Award
|
|
Vesting
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
Type
|
|
Date
|
|
Mr. Jordan
|
|
Mr. Losch
|
|
Mr. Kisber
|
|
Mr. Popwell*
|
|
Mr. Tuggle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/12/2014
|
|
RSU
|
|
2/12/2017
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
23,895
|
|
|
|
—
|
|
|
2/12/2014
|
|
RSU
|
|
3/2/2017
|
|
|
29,864
|
|
|
|
22,567
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,169
|
|
|
2/12/2015
|
|
RSU
|
|
3/2/2018
|
|
|
26,720
|
|
|
|
20,833
|
|
|
|
—
|
|
|
|
22,058
|
|
|
|
18,294
|
|
|
2/12/2015
|
|
Ret RS
|
|
3/2/2020
|
|
|
—
|
|
|
|
11,064
|
|
|
|
—
|
|
|
|
14,005
|
|
|
|
—
|
|
|
2/11/2016
|
|
RSU
|
|
3/2/2019
|
|
|
47,063
|
|
|
|
28,614
|
|
|
|
30,378
|
|
|
|
30,120
|
|
|
|
22,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Mr. Popwell’s 2014 award vests on February 12 rather than March 2.
|
|
|
|
|
|
|
|
|
|
Col (i) Performance Equity Awards.
Column (i)
reports PSU awards, and a special retention stock unit award, granted from 2012 through 2016 which are outstanding at year-end.
The performance periods for those awards are shown below. The performance period for the 2014 PSU awards has ended, but performance
(relative to peers) cannot be determined until all peer companies have reported 2016 earnings. Awards are reported in units at
target levels. In each case except two, the maximum is 150% of target.
For the special retention awards in 2012 and 2016, the maximum
is 100%. Those two are special
incentive/retention awards for the CEO. The 2012 award pays
nothing unless either (a) our stock maintains a $20 price level for a certain period before the 5th anniversary of grant, or (b)
the value of a share of our stock on the 5th anniversary, measured using total shareholder return from the grant date, is at least
$20. The 2016 award pays if the total shareholder return value of a share of stock is at least $11.63 on the 7th anniversary of
grant. Each special award also requires continuous employment with the company for the performance period.
Performance Equity Awards Unvested
at Year-End
(Stock Units at Target Level)
|
Grant
|
|
Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
Period
|
|
Mr. Jordan
|
|
Mr. Losch
|
|
Mr. Kisber
|
|
Mr. Popwell
|
|
Mr. Tuggle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/07/2012*
|
|
5/12-5/17
|
|
|
325,379
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
2/12/2014
|
|
2014-16
|
|
|
59,727
|
|
|
|
11,283
|
|
|
|
43,330
|
|
|
|
11,947
|
|
|
|
9,583
|
|
|
2/12/2015
|
|
2015-17
|
|
|
63,242
|
|
|
|
12,327
|
|
|
|
—
|
|
|
|
13,052
|
|
|
|
10,825
|
|
|
2/11/2016
|
|
2016-18
|
|
|
114,092
|
|
|
|
17,342
|
|
|
|
—
|
|
|
|
18,254
|
|
|
|
13,625
|
|
|
2/11/2016*
|
|
2/16-2/23
|
|
|
155,238
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Special retention awards in 2012 and 2016 pay all-or-none rather than on a scale.
|
|
Cols (h) & (j) Values.
Columns (h) and (j)
reflect year-end market values ($20.01/share) of the awards reported in columns (g) and (i),
respectively, with no discount for risk of forfeiture or time
delay until vesting. The values reported are not based on financial accounting methods.
Options Exercised and Stock Vested
The following table shows stock options exercised by the named
officers along with other stock awards that vested during 2016. The stock awards shown consist of regular PSUs granted in 2013
and RS awards granted as part of 2012 bonus. The PSUs were paid
in shares of stock. The values realized are based on market prices of our stock on the respective vesting dates.
Options Exercised and Stock Awards
Vested During 2016
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
Name
|
|
Number of
Shares
Acquired
on Exercise(#)
|
|
|
Value
Realized
on Exercise($)
|
|
|
Number of
Shares
Acquired or
Units Paid on
Vesting(#)
|
|
|
Value
Realized
on Vesting($)
|
|
|
Mr. Jordan
|
|
|
483,306
|
|
|
|
$2,277,264
|
|
|
|
79,207
|
|
|
|
$1,078,575
|
|
|
Mr. Losch
|
|
|
84,566
|
|
|
|
480,335
|
|
|
|
26,104
|
|
|
|
356,023
|
|
|
Mr. Kisber
|
|
|
456,230
|
|
|
|
2,190,161
|
|
|
|
79,710
|
|
|
|
1,096,810
|
|
|
Mr. Popwell
|
|
|
110,422
|
|
|
|
523,686
|
|
|
|
28,154
|
|
|
|
395,634
|
|
|
Mr. Tuggle
|
|
|
142,220
|
|
|
|
670,017
|
|
|
|
23,111
|
|
|
|
314,245
|
|
Post-Employment Compensation
Overview & Common Terms
We offer programs providing benefits after retirement and for
certain other terminations. Other programs have features that enhance, accelerate, reduce, shorten, or forfeit benefits if employment
terminates in various ways. Those programs and features are discussed in this section.
Common post-employment terms include:
|
•
|
Discharge or Resignation.
A termination of employment
by First Horizon or by the executive, respectively, other than disability or retirement.
|
|
|
|
|
•
|
Disability.
A permanent inability to work.
|
|
•
|
Retirement.
A termination of employment after meeting
certain age and service requirements specified in the applicable program. Some programs specify early and normal retirement
requirements; others specify only normal retirement or make no provision for retirement.
|
|
|
|
|
•
|
Change in Control, or CIC.
A corporate change in control of FHN
as defined in the program. The definition used in active programs is discussed in “CIC Definition” on page 69.
|
Pension Plans
We operate two defined benefit retirement plans: a broad-based
tax-qualified pension plan and an unfunded non-qualified pension restoration plan limited to employees for whom the qualified
benefit is limited by tax law. The restoration plan extends the benefit beyond that tax law limit. The two plans effectively provide
a single pension benefit.
The plans were closed to new hires in 2007, and benefits were
frozen at year-end 2012. Credited service years do not increase after 2012, and changes in compensation are ignored.
Pension benefits are based on average compensation for the highest
60 consecutive months of the last 120 months of service prior to 2013, length of service prior to 2013, and social security benefits.
Covered compensation includes cash salary reportable to the IRS plus pre-tax contributions under the savings plan and employee
contributions under the flexible benefits plan, and excludes bonuses, commissions, other deferred compensation, and incentives.
A “normal” pension benefit provides a monthly payment
to the employee for life beginning at retirement at age 65. Participants under age 65 who are at least age 55 with 15 years of
service may retire early with a reduced pension benefit. The reduction varies based on age at retirement. Similarly, a delay in
retirement will increase benefits. A participant may make other elections which change the benefit. Those include a spousal benefit
election, a minimum (certain) payment term, and a lump sum benefit (restoration plan only). Married participants often choose
a qualified
joint and survivor annuity with a surviving spouse receiving
50 percent of the participant’s benefit.
The following table shows estimated normal retirement benefits
under the pension plans as of December 31, 2016. Mr. Losch does not participate in these plans.
Pension Benefits
|
(a)
|
|
(b)
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
Name
|
|
Plan
|
|
Number of
Years of
Credited
Service (#)
|
|
Present
Value of
Accumulated
Benefit ($)
|
|
|
Payments
During Last
Fiscal Year ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Jordan
|
|
Qualified
Restoration
|
|
6 yrs
6 yrs
|
|
|
$244,835
752,848
|
|
|
—
—
|
|
Mr. Kisber
|
|
Qualified
Restoration
|
|
20 yrs
NA
|
|
|
826,557
NA
|
|
|
—
NA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Popwell
|
|
Qualified
Restoration
|
|
6 yrs
6 yrs
|
|
|
265,328
354,939
|
|
|
—
—
|
|
Mr. Tuggle
|
|
Qualified
Restoration
|
|
9 yrs
9 yrs
|
|
|
566,561
960,507
|
|
|
—
—
|
Explanations of certain columns follow:
Col (c).
This column shows full years of credited
service, unchanged since 2012.
Col (d).
Column (d) reflects the actuarial present
value of each named executive’s accumulated benefit, computed as of the same pension plan measurement date used for financial
statement reporting purposes with respect to 2016 except that retirement age is assumed to be the normal retirement age of 65.
Column (d) amounts were calculated by the pension plan actuary using the projected unit credit cost method. This method
recognizes cost in an increasing pattern as a participant approaches
retirement. The 2016 discount rates are 4.39% for the pension plan and 4.07% for the pension restoration plan and reflect the
expected average term until settlement of each of these plans. The assumptions on which the
amounts presented in the table are based are discussed in note
18 to our financial statements.
Col (e).
No pension benefit amounts were paid
during 2016 to any named executive officer.
Non-Qualified Deferred Compensation
Plans
We provide several plans allowing executives to defer receipt
and taxation of cash salary and bonus. Deferred amounts are credited to accounts and earnings accrue according to the provisions
of each plan. Participants have some discretion regarding the length of the deferral period, the investment criteria upon which
earnings are based, and whether payout will be lump sum or an annuity. A commonly selected deferral period lasts until employment
terminates. These plans are unfunded: no trust holds funds in the accounts, which legally are unsecured debt we owe participants.
In all plans each account is fully vested and non-forfeitable.
Except for the timing of payments, plan accounts are not reduced or enhanced by termination of employment, change in control,
or other event.
The qualified plan allows an employee to make contributions
of salary into a plan account, subject to limits imposed by tax laws. We provide a 100% match under the broad-based tax-qualified
savings plan for the first 6% of salary each eligible
participant (having at least one year of service) elects to
defer into the plan.
We have adopted a savings restoration plan for those employees,
including most executives, whose base salary exceeds the tax limits imposed on the qualified plan. The restoration plan provides
a nonqualified vehicle for highly-paid employees to continue to participate in a savings plan beyond the tax law limits. Unlike
the qualified plan, the restoration plan is unfunded. The restoration plan offers many of the same investment options as the qualified
plan, but our stock is not among those.
We reduce the risk of our obligations under the restoration
and other nonqualified deferred compensation plans by purchasing investments designed to track the performance of the investment
elections made by participants.
Information concerning account activities and balances of the
named executive officers with respect to non-qualified deferred compensation plans is presented below.
Nonqualified Deferred Compensation
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
Name
|
|
Executive
Contributions in
Last Fiscal
Year ($)
|
|
Company
Contributions in
Last Fiscal
Year ($)
|
|
Aggregate
Earnings in
Last
Fiscal Year ($)
|
|
Aggregate
Withdrawals/
Distributions ($)
|
|
Aggregate
Balance at Last
Fiscal Year
End ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Jordan
|
|
|
$324,969
|
|
|
|
$36,959
|
|
|
|
$147,991
|
|
|
|
—
|
|
|
|
$1,810,094
|
|
|
Mr. Losch
|
|
|
12,219
|
|
|
|
12,992
|
|
|
|
7,912
|
|
|
|
—
|
|
|
|
122,157
|
|
|
Mr. Kisber
|
|
|
20,100
|
|
|
|
20,815
|
|
|
|
200,960
|
|
|
|
—
|
|
|
|
1,254,793
|
|
|
Mr. Popwell
|
|
|
13,719
|
|
|
|
14,435
|
|
|
|
9,458
|
|
|
|
—
|
|
|
|
135,136
|
|
|
Mr. Tuggle
|
|
|
12,600
|
|
|
|
13,142
|
|
|
|
32,683
|
|
|
|
—
|
|
|
|
457,634
|
|
Explanations of certain columns follow:
Col (b).
Traditional deferred compensation
plan.
Currently up to 80% of cash salary and 80% of annual cash bonus
may be deferred in the traditional deferred compensation plan for executives.
Col (b).
Savings restoration plan.
Column
(b) includes executive salary contributions to this plan.
Col (c).
Includes company matching contributions
under the savings restoration plan. We make no company contributions to the traditional deferred compensation plan.
Col (d).
Earnings reflect interest for those
accounts that earn interest. For accounts that are phantom shares of stock or mutual funds, earnings reflect increases and decreases
of account value throughout the year. Those amounts are netted as applicable to the individual.
Col (e).
Hardship withdrawals are allowed under certain
plans. Except under the savings restoration plan, an in-service distribution date may be selected when the deferral election is
made.
Col (f).
Certain plan accounts are denominated as numbers
of shares of stock or mutual funds. All
such accounts are valued based on the fair market value of those
shares at year-end.
The information above excludes the tax-qualified savings plan.
For additional information concerning deferred compensation plans see “Deferral, Retirement, and Other Benefits” beginning
on page 53.
Employment & Termination Arrangements
We have no employment agreement with any named executive. Many
plans and programs contain special provisions regarding termination of employment in various common situations, including in connection
with retirement or a change
in control. We also have certain other arrangements that deal
primarily with retirement and change in control situations. This section provides information concerning those provisions and
arrangements.
Termination Unrelated to Change in Control
The table below summarizes the impact upon the amounts of various
items of compensation of a termination of employment under certain circumstances, other than termination related to a change in
control event. Change in control
situations are discussed in the following section. In addition
to forfeiture of unpaid benefits, many awards provide for clawback of paid benefits if discharge “for cause,” as defined
in the applicable program, occurs within two years of payment.
Impact of Termination
Events on Unpaid Compensation Items
|
|
|
Resignation/Discharge
|
|
Death/Disability
|
|
Retirement
|
|
Key
Facts
|
|
|
|
|
|
|
|
|
|
|
|
MIP Bonus Opportunity
|
|
Forfeit
|
|
Generally forfeit, but discretionary payment is possible
|
|
Generally forfeit, but discretionary payment is possible
|
|
Committee can pro-rate or fully waive service requirement, still subject to performance conditions
|
|
PSUs
|
|
Forfeit
|
|
Pro-rated waiver of service requirement, no waiver of performance
|
|
For approved retirement, pro-rated waiver of service requirement, no waiver of performance
|
|
Committee may require covenants such as non-competes as a condition for retirement approval
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable Stock Options
|
|
Expire 3 months after termination
|
|
Expire 3 years after termination
|
|
Expire 3 years after termination
|
|
Option term is shortened to new expiration date, cannot be extended
|
|
Unexercisable Stock Options
|
|
Forfeit
|
|
Expire 3 years after termination
|
|
Expire 3 years after termination
|
|
Option term is shortened to new expiration date, cannot be extended
|
|
|
|
|
|
|
|
|
|
|
|
Restricted stock & RSUs
|
|
Forfeit
|
|
Pro-rated
|
|
Discretionary payment is possible, usually pro-rated if approved
|
|
Committee may accelerate vesting in normal retirement situations subject to compliance with covenants such as non-competes
|
|
Pension Plans, Qualified Savings Plan, NQ Def’d Comp Plans
|
|
No impact
|
|
No impact
|
|
No impact
|
|
Contributions, accounts, and benefits are fully vested
|
|
|
|
|
|
|
|
|
|
|
|
Savings Restoration Plan
|
|
Lump sum payment
|
|
Lump sum payment
|
|
Lump sum payment
|
|
Benefits are fully vested; any termination triggers payment
|
Change in Control (CIC) Arrangements
Special change in control (CIC) severance agreements are in
place with each named executive officer except Mr. Kisber. In addition, many of our compensation programs have special provisions
that apply if we experience a CIC event. This section provides information concerning arrangements and benefits that would apply
if a CIC occurs.
CIC Definition
In our plans and programs the term “change in control”
includes the following events:
|
•
|
A majority of the members of our Board of Directors changes, with certain exceptions.
|
|
|
|
|
•
|
A person or other entity becomes the beneficial owner of 20 percent or more of our
outstanding voting stock, with certain exceptions.
|
|
|
|
|
•
|
Our shareholders approve, and there is a consummation of, a merger or other business
combination, unless (i) more than 50% (60% in the CIC severance agreements) of the voting power resulting from the business combination
is represented by voting securities outstanding
|
|
|
immediately prior thereto, (ii) no person or other entity beneficially owns 20% or
more of the resulting corporation, and (iii) at least a majority (a two-thirds majority in the CIC severance agreements) of the
members of the board of directors of the resulting corporation were our directors at the time of board approval of the transaction.
|
|
|
|
|
•
|
Our shareholders’ approve a plan of complete liquidation or dissolution or a
sale of substantially all of our assets. In 2016, two major plans—Equity Compensation Plan and Management Incentive Plan—were
amended so that consummation of an asset sale, rather than mere approval, is a CIC event.
|
Summary of CIC Effects
The following table summarizes the impacts of a CIC event on
various items of compensation. Details about current dollar amounts of many of these items are provided in the “CIC Potential
Payout” section below.
Impact of CIC on Unpaid Compensation
Items
|
Item
|
|
Impact
|
|
Key Factors
|
|
|
|
|
|
|
|
MIP bonus opportunity
|
|
Pro-rate target amount of bonus if employment terminates
|
|
Performance at target is presumed; pro-rationing is based on % of performance period elapsed
|
|
PSUs
|
|
Award is paid at target if employment terminates; award may be adjusted, or converted to non-performance RSUs, if employment continues.
|
|
Committee has discretion to adjust or convert awards depending on the CIC context
|
|
|
|
|
|
|
|
Exercisable stock options
|
|
No impact
|
|
|
|
Restricted stock, RSUs, unexercisable stock options
|
|
Accelerate if employment terminates, otherwise no impact
|
|
Awards have a double-trigger feature
|
|
|
|
|
|
|
|
Qualified pension plan
|
|
Limited impact
|
|
Any excess funding is allocated to all plan participants
|
|
Pension restoration plan
|
|
Lump sum payment
|
|
See details below
|
|
|
|
|
|
|
|
Qualified savings plan
|
|
No impact
|
|
|
|
Savings restoration plan
|
|
No impact from CIC
|
|
Any separation results in lump sum payment; CIC itself has no effect on amount or timing of payment
|
|
|
|
|
|
|
|
NQ deferred compensation
|
|
Limited impact
|
|
Accounts are paid into rabbi trusts, inaccessible to FHN’s successor
|
|
CIC severance agreements
|
|
Cash payment & other benefits if employment terminates
|
|
CIC benefits are discussed in the next section
|
Under the pension restoration plan, a lump sum payment is made
to participants representing the present value, using a discount rate of 4.2% of the participant’s scheduled projected benefits
actuarially adjusted based on the participant’s age
at the time of the CIC event. For participants under age 55,
the CIC calculation is made assuming age 55 has been reached.
CIC Severance Agreements
We have CIC severance agreements with all of the named executives
except Mr. Kisber. The agreements provide a payment equal to three times annual base salary plus three times a “bonus amount”
if we discharge the officer other than for disability, retirement, or cause, or if the officer resigns for a predefined good reason,
in either case within 36 months after a CIC event. The “bonus amount” is the average actual annual cash bonus paid
over the preceding five years, excluding the years with the highest and lowest bonuses. Older agreements (Messrs. Jordan and Tuggle)
provide generally for a federal excise tax gross-up; newer agreements (Messrs. Losch and Popwell) have no such provision. Severance
payments are to be reduced if a small reduction in benefit (up to 5% or $50,000) would avoid the excise tax. The agreements provide
for continued healthcare and life insurance benefits for an 18-month period as allowed by tax laws. Non-disparagement, cooperation,
and non-solicitation covenants are included in the agreements. These agreements do not guarantee employment for any term or period;
they only apply if loss of employment occurs following a CIC event. Each
agreement can be terminated unilaterally upon three years’
prior notice.
CIC Potential Payout
The table below shows potential amounts payable to the named
executive officers if a CIC occurred and employment with us terminated on December 31, 2016. The closing stock price on December
30, 2016 of $20.01 per share is used when valuing stock based items. For purposes of the table, the following assumptions and adjustments
have been made: (1) the present value of future health and welfare and other non-cash benefits is calculated by using current costs;
(2) the value of non-forfeited stock options is based solely on the spread between the option price and our actual year-end stock
value; and (3) no forfeiture factors exist. Many of the amounts shown in the table accelerate the timing of payment of an amount
that would have been paid eventually without increasing the amount paid. Except as noted, the table shows all payment amounts affected
by the CIC and termination, whether or not increased by the CIC, for the sake of completeness.
Potential Dollar Value of Payments Upon
An Assumed
Termination of Employment at Year-End
2016 Related to a CIC Event
|
|
|
Cash
|
|
|
Pro Rata
|
|
|
Stock
|
|
|
Pension
|
|
|
Savings
|
|
|
Health &
|
|
|
|
|
|
Tax Gross-up
|
|
|
|
|
|
Name
|
|
Severance
|
|
|
Bonus*
|
|
|
Awards
|
|
|
Restoration**
|
|
|
Restoration
|
|
|
Welfare
|
|
|
Other
|
|
|
Payments***
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Jordan
|
|
$
|
5,393,400
|
|
|
$
|
922,800
|
|
|
$
|
23,355,216
|
|
|
$
|
689,527
|
|
|
$
|
310,830
|
|
|
$
|
27,981
|
|
|
$
|
25,000
|
|
|
$
|
13,124,141
|
|
|
$
|
43,848,895
|
|
|
Mr. Losch
|
|
|
2,326,250
|
|
|
|
300,417
|
|
|
|
3,531,635
|
|
|
|
NA
|
|
|
|
122,157
|
|
|
|
22,865
|
|
|
|
25,000
|
|
|
|
NA
|
|
|
|
6,328,324
|
|
|
Mr. Kisber
|
|
|
NA
|
|
|
|
3,500,000
|
|
|
|
2,495,112
|
|
|
|
NA
|
|
|
|
326,695
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
NA
|
|
|
|
6,321,807
|
|
|
Mr. Popwell
|
|
|
2,567,500
|
|
|
|
355,833
|
|
|
|
3,777,640
|
|
|
|
329,535
|
|
|
|
135,136
|
|
|
|
23,445
|
|
|
|
25,000
|
|
|
|
NA
|
|
|
|
7,214,089
|
|
|
Mr. Tuggle
|
|
|
2,420,500
|
|
|
|
331,833
|
|
|
|
2,739,944
|
|
|
|
NA
|
|
|
|
151,548
|
|
|
|
23,060
|
|
|
|
25,000
|
|
|
|
NA
|
|
|
|
5,691,885
|
|
|
*
|
|
For Messrs. Jordan, Losch, Popwell, and Tuggle, the amounts in this column reflect “the bonus amount” defined in their CIC severance agreements discussed above. For Mr. Kisber, who has no CIC severance agreement, the amount in this column reflects the amount that the MIP (annual bonus plan) would have required to be paid to him.
|
|
|
|
|
|
**
|
|
Absent a CIC event, a participant in the pension restoration plan can elect, at termination of employment, to receive a lump sum payment based on the present actuarial value of the expected pension payment stream. In a CIC context, participants will receive a lump sum payment in lieu of the payment stream. If a participant terminated in relation to a CIC is under age 55 or has less than 15 years of service, the CIC lump-sum payment would be enhanced to reflect that age and those service years. The amounts in the Pension Restoration column of the table for Messrs. Jordan and Popwell reflect an estimate of that enhancement measured at year-end. Due to his age and length of service, Mr. Tuggle would receive no such enhancement, so no amount is shown for him. Messrs. Losch and Kisber are not participants.
|
|
|
|
|
|
***
|
|
Messrs. Jordan and Tuggle have the right to receive an excise tax gross-up payment, an estimate of which is included in the table. Based on the assumptions of his hypothetical termination at year-end, Mr. Tuggle’s estimated gross-up amount would be zero. For Messrs. Losch and Popwell, who have agreements after 2008, no gross-up would be paid.
|
Director
Compensation
Non-Employee Director Compensation Programs
Mr. Jordan serves on the Board but is not paid for that service.
No program discussed in this “Director Compensation” section applies to him. No other director is an employee of ours.
Director compensation falls into two categories: base retainer
and additional retainers. For each director the base retainer is $130,000, paid half in cash and half in RSUs. Additional retainers
are paid in cash for particular assignments, such as Lead Director or Audit Committee chair. Audit Committee members who also serve
on the Trust Audit Committee of the Bank are not separately compensated for Trust Audit service. The pay year for our directors
starts April 1 and ends March 31, roughly synchronous with our annual meeting.
Director pay is summarized in this table:
Director Compensation 2016-17
|
Item
|
|
Annual Amt
|
|
|
|
|
|
Base Retainer –
cash portion:
|
|
$65,000
|
|
Base Retainer –
RSU portion:
|
|
65,000
|
|
|
|
|
|
Additional Retainers
(all cash):
|
|
|
|
Lead Director
|
|
20,000
|
|
|
|
|
|
Chairman – Audit
|
|
32,000
|
|
Chairman – Executive & Risk
|
|
28,000
|
|
|
|
|
|
Chairman – Compensation
|
|
17,500
|
|
Chairman – other committees
|
|
10,000
|
|
|
|
|
|
Non-chair service – Audit
|
|
8,000
|
|
Non-chair service – Exec & Risk
|
|
8,000
|
RSUs are granted under our Equity Compensation Plan following
election at the annual meeting. RSUs vest in the year following grant, accrue dividends while unvested, and are paid in stock.
Grants are pro-rated for anyone elected to the Board after the annual meeting.
Other Director Programs
Directors may serve as members of our Bank’s regional
boards and may be paid, as additional Board compensation, cash attendance fees up to $500 per regional board meeting. In addition,
directors may receive the following benefits: a personal account executive, a no fee personal checking account for the director
and his or her spouse, a debit card, a no-fee VISA card, no fee
for a safe deposit box, no fee for traveler’s checks and
cashier’s checks, use of tickets for marketing and other business events up to $5,000 in value, and, subject to certain restrictions
and limitations, the repurchase of shares of our common stock under a Board-approved repurchase program with no payment of any
fees or commissions. Directors may participate in a charitable gift matching program up to $25,000 per year.
Many directors have nonqualified deferred compensation accounts
that earn interest or returns indexed to the performance of certain mutual funds selected by the director.
Prior to 2006, directors could receive stock options in lieu
of fees under certain deferral plans, some of which remain outstanding.
From 1985 to 1995, directors could defer fees and receive an
accrual of interest at rates ranging from 17-22 percent annually. Although new deferrals under that old plan have not been permitted
since 1995, interest continues to accrue on outstanding accounts. The rate is re-set annually. For many years, the rate has been
set at 7 percentage points above a benchmark rate. For the 2016 plan year, the interest rate was 10.16% for all active participants
including two current directors, Ms. Palmer and Mr. Martin. For 2017, the rate has decreased to 9.28%, corresponding to an decrease
in the benchmark rate. The plan continues to provide a retention tool for us since the above-market rates of return are largely
forfeited in a case of early departure from Board service.
Stock Ownership Guidelines
Our stock ownership guidelines set a stock ownership benchmark
for directors of $325,000, or five times the cash portion of the base retainer. For this purpose, fully-owned shares, RSUs, and
any shares held in tax-deferred plans are counted, but stock options are not counted. If the ownership guideline is satisfied,
50% of the net after-tax shares received from stock awards must be retained. If the guideline is not satisfied, 75% must be retained.
The retention requirement applies during a director’s tenure on our Board, except that after age 60 directors are permitted
to sell shares held at least three years to diversify in preparation for retirement.
Non-Employee Director Compensation Table
The following table shows compensation earned by directors last
year, whether or not deferred.
Director Compensation 2016
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-stock
|
|
Deferred
|
|
|
|
|
|
|
|
Cash
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
|
|
|
Retainers
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Compton
|
|
$89,000
|
|
$64,944
|
|
—
|
|
—
|
|
|
—
|
|
|
|
$25,000
|
|
|
$178,944
|
|
Mr. Emkes
|
|
97,000
|
|
64,944
|
|
—
|
|
—
|
|
|
—
|
|
|
|
25,000
|
|
|
186,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Gilchrist
|
|
81,000
|
|
64,944
|
|
—
|
|
—
|
|
|
—
|
|
|
|
25,000
|
|
|
170,944
|
|
Ms. Gregg
|
|
18,250
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
18,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Martin
|
|
77,000
|
|
64,944
|
|
—
|
|
—
|
|
|
8,638
|
|
|
|
25,000
|
|
|
175,582
|
|
Mr. Niswonger
|
|
73,000
|
|
64,944
|
|
—
|
|
—
|
|
|
—
|
|
|
|
25,000
|
|
|
162,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Palmer
|
|
86,125
|
|
64,944
|
|
—
|
|
—
|
|
|
9,566
|
|
|
|
20,000
|
|
|
180,635
|
|
Mr. Reed
|
|
107,375
|
|
64,944
|
|
—
|
|
—
|
|
|
—
|
|
|
|
25,000
|
|
|
197,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Stewart
|
|
80,500
|
|
64,944
|
|
—
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
145,444
|
|
Mr. Subramaniam
|
|
36,500
|
|
48,607
|
|
—
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
85,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Yancy
|
|
83,000
|
|
64,944
|
|
—
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
147,944
|
Explanations of certain columns follow:
Col (c) Stock Awards.
Includes RSUs granted during
calendar year 2016. Amounts shown are the grant date fair values of awards using the accounting method applicable to our financial
statements. For additional information about valuation see the note for cols (e)-(f) to the Summary Compensation Table on page
58. Additional information about outstanding awards appears under the caption “Outstanding Director Equity Awards at Year-End”
below.
Col (f) Deferred Compensation.
Amounts consist
of above-market interest accrued during the year under a plan discontinued in 1995.
Col (g) All Other Compensation.
Amounts consist
of matching donations to eligible charitable organizations by First Horizon Foundation and cash attendance fees from regional board
meetings.
Outstanding Director Equity Awards at Year-End
Directors receive annual RSU awards, and hold option awards
from an old deferral program, as
presented in the following table. All options are vested. All
other awards were unvested at year-end.
Outstanding Equity Awards at Fiscal
Year-End 2016
Held by Non-Employee Directors
|
(a)
|
(b)
|
(c)
|
(d)
|
|
(e)
|
(f)
|
|
|
Stock Options
|
|
Restricted Stock or Unit Awards
|
|
|
Number of
|
|
|
|
|
|
|
|
Securities
|
|
|
|
Number of Shares
|
Market Value of
|
|
|
Underlying
|
Option
|
|
|
or Units of Stock
|
Shares or Units of
|
|
|
Unexercised
|
Exercise
|
Option
|
|
Held that Have Not
|
Stock that Have
|
|
Name
|
Options(#)
|
Price($/sh)
|
Expiration Date
|
|
Vested(#)
|
Not Vested($)
|
|
|
|
|
|
|
|
|
|
Mr. Compton
|
—
|
—
|
—
|
|
4,510
|
$90,245
|
|
Mr. Emkes
|
—
|
—
|
—
|
|
4,510
|
$90,245
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
|
|
Stock
Options
|
|
Restricted
Stock or Unit Awards
|
|
|
|
Number
of
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
Number
of Shares
|
|
Market
Value of
|
|
|
|
Underlying
|
|
Option
|
|
|
|
or
Units of Stock
|
|
Shares
or Units of
|
|
|
|
Unexercised
|
|
Exercise
|
|
Option
|
|
Held
that Have Not
|
|
Stock
that Have
|
|
Name
|
|
Options(#)
|
|
Price($/sh)
|
|
Expiration
Date
|
|
Vested(#)
|
|
Not
Vested($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Gilchrist
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
4,510
|
|
|
$
|
90,245
|
|
|
Ms. Gregg
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
55
|
|
|
$
|
18.28
|
|
|
4/26/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
70
|
|
|
|
18.24
|
|
|
4/26/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Martin
|
|
|
|
|
|
|
|
|
|
|
|
|
4,510
|
|
|
$
|
90,245
|
|
|
|
|
|
5,694
|
|
|
$
|
17.10
|
|
|
6/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
4,950
|
|
|
|
23.46
|
|
|
12/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
4,704
|
|
|
|
22.26
|
|
|
6/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
3,951
|
|
|
|
26.53
|
|
|
12/31/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
3,484
|
|
|
|
27.22
|
|
|
6/30/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
3,334
|
|
|
|
20.40
|
|
|
12/31/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
2,985
|
|
|
|
18.85
|
|
|
1/2/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
2,852
|
|
|
|
23.49
|
|
|
7/2/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
3,009
|
|
|
|
23.91
|
|
|
1/2/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
2,842
|
|
|
|
25.34
|
|
|
7/1/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
3,119
|
|
|
|
24.36
|
|
|
1/2/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
1,094
|
|
|
|
18.28
|
|
|
7/1/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
1,370
|
|
|
|
18.24
|
|
|
1/2/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Niswonger
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
4,510
|
|
|
$
|
90,245
|
|
|
Ms. Palmer
|
|
|
|
|
|
|
|
|
|
|
|
|
4,510
|
|
|
$
|
90,245
|
|
|
|
|
|
5,363
|
|
|
$
|
17.10
|
|
|
6/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
4,710
|
|
|
|
23.46
|
|
|
12/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
4,196
|
|
|
|
22.26
|
|
|
6/30/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
4,378
|
|
|
|
26.53
|
|
|
12/31/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
3,848
|
|
|
|
27.22
|
|
|
6/30/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
4,584
|
|
|
|
20.40
|
|
|
12/31/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
5,226
|
|
|
|
11.85
|
|
|
7/3/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
3,518
|
|
|
|
18.85
|
|
|
1/2/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
3,107
|
|
|
|
23.49
|
|
|
7/2/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
3,093
|
|
|
|
23.91
|
|
|
1/2/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
2,764
|
|
|
|
25.34
|
|
|
7/1/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
2,709
|
|
|
|
24.36
|
|
|
1/2/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
1,121
|
|
|
|
18.28
|
|
|
7/1/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
2,028
|
|
|
|
18.24
|
|
|
1/2/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
4,510
|
|
|
$
|
90,245
|
|
|
Ms. Stewart
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
4,510
|
|
|
$
|
90,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Subramaniam
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
3,327
|
|
|
$
|
66,573
|
|
|
Mr. Yancy
|
|
|
|
|
|
|
|
|
|
|
|
|
4,510
|
|
|
$
|
90,245
|
|
|
|
|
|
1,379
|
|
|
$
|
23.91
|
|
|
1/2/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
2,921
|
|
|
|
25.34
|
|
|
7/1/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
3,202
|
|
|
|
24.36
|
|
|
1/2/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
1,011
|
|
|
|
18.28
|
|
|
7/1/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
1,535
|
|
|
|
18.24
|
|
|
1/2/2024
|
|
|
|
|
|
|
|
|
Explanations of certain columns follow:
Cols (b)/(c).
Stock options include adjustments for stock
dividends distributed 2008-2011, the cumulative compound rate of which was 20.0380%.
Col (e).
All awards outstanding at year-end are unvested
RSUs which vest on April 2, 2017.
Col (f).
Values reflect the year-end market value of
our common stock ($20.01/share) with no discount for the risk that the award might be forfeited or for the time remaining before
vesting. Values shown here are not based on financial accounting assumptions or methods.
Details concerning the awards outstanding at year-end are provided
in the following table.
Details Concerning Director Full-Value
Stock Awards
Outstanding at Year-End 2016
|
Name
|
|
Grant
Date
|
|
Vesting Date
|
|
RSUs
Vesting (#)
|
|
|
|
|
|
|
|
|
|
Mr. Compton
|
|
4/26/2016
|
|
4/2/2017
|
|
4,510
|
|
Mr. Emkes
|
|
4/26/2016
|
|
4/2/2017
|
|
4,510
|
|
|
|
|
|
|
|
|
|
Mr. Gilchrist
|
|
4/26/2016
|
|
4/2/2017
|
|
4,510
|
|
Mr. Martin
|
|
4/26/2016
|
|
4/2/2017
|
|
4,510
|
|
|
|
|
|
|
|
|
|
Mr. Niswonger
|
|
4/26/2016
|
|
4/2/2017
|
|
4,510
|
|
Ms. Palmer
|
|
4/26/2016
|
|
4/2/2017
|
|
4,510
|
|
|
|
|
|
|
|
|
|
Mr. Reed
|
|
4/26/2016
|
|
4/2/2017
|
|
4,510
|
|
Ms. Stewart
|
|
4/26/2016
|
|
4/2/2017
|
|
4,510
|
|
|
|
|
|
|
|
|
|
Mr. Subramaniam
|
|
7/25/2016
|
|
4/2/2017
|
|
3,327
|
|
Mr. Yancy
|
|
4/26/2016
|
|
4/2/2017
|
|
4,510
|
Director Options Exercised and Stock Vested
The following table provides information about stock options
exercised during 2016 by our non-employee directors as well as stock units and
restricted shares that vested during 2016. Amounts in columns
(c) and (e) represent the market values of shares on the exercise or vesting dates.
Director Options Exercised and Stock
Vested During 2016
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Value
|
|
|
|
Number of
|
|
Value Realized
|
|
Acquired or Units
|
|
Realized
|
|
|
|
Shares Acquired
|
|
Upon Exercise
|
|
Paid Upon
|
|
Upon Vesting
|
|
Name
|
|
on Exercise(#)
|
|
($)
|
|
Vesting(#)
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Compton
|
|
|
—
|
|
|
|
—
|
|
|
|
4,548
|
|
|
$
|
60,216
|
|
|
Mr. Emkes
|
|
|
—
|
|
|
|
—
|
|
|
|
4,548
|
|
|
|
60,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Gilchrist
|
|
|
—
|
|
|
|
—
|
|
|
|
4,548
|
|
|
|
60,216
|
|
|
Ms. Gregg
|
|
|
—
|
|
|
|
—
|
|
|
|
4,548
|
|
|
|
60,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Martin
|
|
|
—
|
|
|
|
—
|
|
|
|
4,548
|
|
|
|
60,216
|
|
|
Mr. Niswonger
|
|
|
—
|
|
|
|
—
|
|
|
|
4,548
|
|
|
|
60,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Palmer
|
|
|
16,708
|
|
|
$
|
82,578
|
|
|
|
4,548
|
|
|
|
60,216
|
|
|
Mr. Reed
|
|
|
—
|
|
|
|
—
|
|
|
|
5,533
|
|
|
|
74,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Stewart
|
|
|
—
|
|
|
|
—
|
|
|
|
4,548
|
|
|
|
60,216
|
|
|
Mr. Subramaniam
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Yancy
|
|
|
—
|
|
|
|
—
|
|
|
|
4,548
|
|
|
|
60,216
|
|
Section
16(
a
) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our directors and officers to file with the SEC initial reports of ownership and reports of changes in ownership of our
stock and to furnish us with copies of all forms filed.
To our knowledge, based solely on a review of the copies of
such reports furnished to us and written representations that no other reports were required, during the past fiscal year our officers
and directors complied with all applicable Section 16(a) filing requirements.