PROXY STATEMENT
INDEX
ii
RENASANT CORPORATION
PROXY STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, APRIL 23, 2013
We are furnishing this proxy statement to the shareholders of Renasant Corporation in connection with the solicitation of
proxies by its board of directors for use at the Annual Meeting of Shareholders of Renasant Corporation to be held at 1:30 p.m., Central time, on Tuesday, April 23, 2013 at the principal offices of Renasant Bank, 209 Troy Street, Tupelo,
Mississippi 38804-4827, as well as in connection with any adjournments or postponements of the meeting. In this proxy statement, Renasant Corporation is referred to as Renasant, we, our, us, or the
Company, and Renasant Bank is referred to as the Bank.
As permitted by Securities and
Exchange Commission, or SEC, rules, we are making this proxy statement, our proxy card and our Annual Report on Form 10-K for the year ended December 31, 2012 (which serves as our annual report to shareholders) available to our
shareholders electronically via the Internet. On March 8, 2013, we posted these materials on our Internet website, http://www.cfpproxy.com/5439. On the same date, we mailed to our institutional shareholders who own our stock in their name as
well as other shareholders who previously elected to receive our proxy materials over the Internet a notice containing instructions on how to access our proxy materials and vote online (referred to as the Notice). We also mailed this
proxy statement, our proxy card and Annual Report on Form 10-K for the year ended December 31, 2012 to our shareholders who are individuals and own our stock in their own name on the same date.
The Notice contains instructions on how to access and review all of the important information contained in the proxy
statement and annual report. The Notice also explains how you may submit your proxy over the Internet. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions in the Notice
for requesting such materials. If you received a paper copy of the proxy card and other proxy materials and would like to receive these materials over the Internet in the future, you should follow the instructions on the proxy card for requesting
electronic delivery of our proxy materials.
VOTING YOUR SHARES
Who is soliciting proxies from the shareholders?
Our board of directors is soliciting your proxy. The proxy provides you with the opportunity to vote on the proposals
presented at the annual meeting, whether or not you attend the meeting.
What will be voted on at
the annual meeting?
Our shareholders will vote on two proposals at the annual meeting:
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1.
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The election of five Class 2 directors, who are each to serve until the expiration of their respective three-year terms or until their successors
are elected and qualified; and
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2.
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The ratification of the appointment of HORNE LLP as our independent registered public accountants for 2013.
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Your proxy will also give the proxy holders discretionary authority to vote the shares represented by the proxy on any
matter, other than the above proposals, that is properly presented for action at the annual meeting.
Who bears the cost of proxy solicitation?
We generally bear all costs of soliciting proxies. We have
retained and pay a fee to Registrar and Transfer Company to perform services in connection with our common stock, including assistance with the solicitation of proxies, but we pay no separate compensation to Registrar and Transfer Company solely for
the solicitation of proxies. Our directors, officers and employees may solicit proxies by telephone, mail, facsimile, via the Internet or by overnight delivery service. Our directors, officers and employees do not receive separate compensation for
these services. We will also, in accordance with SEC regulations, reimburse brokerage firms and other persons representing beneficial owners of our common stock for their reasonable expenses in forwarding solicitation materials to such beneficial
owners.
Who can vote at the annual meeting?
Our board of directors has fixed the close of business on Friday, February 22, 2013, as the record date for our
annual meeting. Only shareholders of record on that date are entitled to receive notice of and vote at the annual meeting. As of February 22, 2013, our only outstanding class of securities was common stock, $5.00 par value per share. On that
date, we had 75,000,000 shares authorized, of which 25,184,637 shares were outstanding.
You (if you, rather
than your broker, are the record holder of our stock) can vote either in person at the annual meeting or by proxy, whether or not you attend the annual meeting. You may vote your shares by proxy via a toll-free telephone number or on the Internet.
If you received a paper copy of the proxy card, you may sign, date and mail the accompanying proxy card in the envelope provided. Instructions regarding the three methods of voting by proxy are contained on the proxy card, and instructions regarding
voting on the Internet are contained on the Notice.
If you would like to attend the annual meeting in person
and need driving directions, please contact Kevin D. Chapman, our Chief Financial Officer, by e-mail to KChapman@renasant.com or by phone at (662) 680-1450.
How many votes must be present to hold the annual meeting?
A quorum must be present to hold our annual meeting. The presence, in person or by proxy, of a majority of the votes entitled to be cast at the annual meeting constitutes a quorum. Your
shares, once represented for any purpose at the annual meeting, are deemed present for purposes of determining a quorum for the remainder of the meeting and for any adjournment, unless a new record date is set for the adjourned meeting. This is true
even if you abstain from voting with respect to any matter brought before the annual meeting.
How many votes does a shareholder have per share?
Our shareholders are entitled to one vote for each share held.
What is the required vote on each proposal?
Directors are elected by plurality vote; the candidates in each class up for election who receive the highest number of
votes cast, up to the number of directors to be elected in that class, are elected. Shareholders do not have the right to cumulate their votes.
The affirmative vote of a majority of the votes cast at the annual meeting is required for the ratification of our appointment of HORNE LLP as our independent registered public accountants for 2013.
How will the proxy be voted, and how are votes counted?
If you vote by proxy (either by properly completing and returning a paper proxy card or voting by telephone or on the
Internet), the shares represented by your proxy will be voted at the annual meeting as you instruct, including any adjournments or postponements of the meeting. If you return a signed proxy card but no voting instructions are given, the proxy
holders will exercise their discretionary authority to vote the shares represented by the proxy at the annual meeting and any adjournments or postponements as follows:
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1.
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FOR
the election of nominees John M. Creekmore, Jill V. Deer, Neal A. Holland, Jr., E. Robinson McGraw and Theodore S. Moll as
Class 2 directors.
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2.
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FOR
the ratification of the appointment of HORNE LLP as our independent registered public accountants for 2013.
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If you hold your shares in a brokers name (sometimes called street name
or nominee name), you must provide voting instructions to your broker. If you do not provide instructions to your broker, your shares will not be voted on any matter on which your broker does not have discretionary authority to vote,
which generally includes non-routine matters. A vote that is not cast for this reason is called a broker non-vote. Broker non-votes will be treated as shares present for the purpose of determining whether a quorum is present at the
meeting, but they will not be considered present for purposes of calculating the vote on a particular matter, nor will they be counted as a vote FOR or AGAINST a matter or as an abstention on the matter. The ratification of our appointment of our
independent registered public accountants is generally considered a routine matter for broker voting purposes, but the election of directors is not considered a routine matter.
Under Mississippi law, an abstention by a shareholder who is either present in person at the annual meeting or
represented by proxy is not a vote cast and is counted neither for nor against the matter subject to the abstention.
2
How are shares in our 401(k) and employee stock ownership
plans voted?
If you are an employee of Renasant or the Bank and participate in our 401(k) plan or our
employee stock ownership plan, or our ESOP, you can vote the number of shares of common stock equal to your units in the Renasant stock fund maintained in the 401(k) plan and the number of shares allocated to you under the ESOP, each
determined as of the close of business on February 22, 2013. On that date, our 401(k) plan held an aggregate of 699,403 shares, or 2.78%, of our common stock, and our ESOP held an aggregate of 278,000 shares, or 1.10%, of our common stock.
The Bank is the trustee of both plans and acts as the proxy. In that capacity, the Bank votes your shares. If
you do not timely furnish voting instructions, the trustee will vote your shares or units in a manner that mirrors how the shares or units for which it receives instructions have been voted.
Can a proxy be revoked?
Yes. You can revoke your proxy at any time before it is voted, including a proxy you have granted for shares or units
held for your benefit in our 401(k) plan or ESOP. You revoke your proxy (1) by giving written notice to our Secretary before the annual meeting, (2) by granting a subsequent proxy either by telephone or on the Internet or (3) by
delivering a signed proxy card dated later than your previous proxy. If you, rather than your broker, are the record holder of our stock, a proxy can also be revoked by appearing in person and voting at the annual meeting. Written notice of the
revocation of a proxy should be delivered to the following address: Secretary, Renasant Corporation, 209 Troy Street, Tupelo, Mississippi 38804-4827.
STOCK OWNERSHIP
Does any person own more than 5% of our common stock?
As of March 6, 2013, we had approximately 7,100 shareholders of record. The following table sets forth information
regarding the beneficial ownership of our common stock as of March 6, 2013, by each person or entity, including any group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, or the Exchange
Act), known to us to be the beneficial owner of 5% or more of our outstanding common stock. Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act and is based upon the number of shares of our common
stock outstanding as of March 6, 2013, which was 25,197,069 shares.
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Name and Address
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Number of Shares
Beneficially
Owned
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Percent
Of Class
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BlackRock, Inc.
40 East 52
nd
Street
New York, New York 10022
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1,497,766
(1)
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5.94%
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Dimensional Fund Advisors LP
Palisades West, Building One
6300 Bee Cave Road
Austin, Texas 78746
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1,636,103
(2)
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6.49%
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Heartland Advisors, Inc. and William J. Nasgovitz
789 North Water Street
Milwaukee, Wisconsin 53202
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1,737,532
(3)
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6.90%
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The Vanguard Group
100 Vanguard Boulevard
Malvern, Pennsylvania 19355
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1,317,066
(4)
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5.23%
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(1)
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The amount shown in the table and the following information are based on a Schedule 13G (Amendment No. 3) filed with the SEC on
February 8, 2013 by BlackRock, Inc. (BlackRock) reporting beneficial ownership as of December 31, 2012. BlackRock has sole voting and sole dispositive power with respect to all 1,497,766 shares of our common stock covered by
the Schedule 13G. The shares reported are held in trust accounts for the economic benefit of the beneficiaries of those accounts. No one persons interest in our common stock is more than 5% of our total outstanding common shares.
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(2)
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The amount shown in the table and the following information are based on a Schedule 13G (Amendment No. 3) filed with the SEC on
February 11, 2013 by Dimensional Fund Advisors LP (Dimensional) reporting beneficial ownership as of December 31, 2012. Of the 1,636,103 shares covered by the Schedule 13G, Dimensional has sole voting power with respect to
1,598,597 shares and sole dispositive power with respect to all of the shares. Dimensional is a registered investment advisor that furnishes investment advice to four registered investment companies and serves as investment manager to certain other
commingled group trusts and separate accounts (these companies, trusts and accounts are referred to as the Funds). The Funds are the owners of the shares covered by the Schedule 13G; to the knowledge of Dimensional no single Fund owns
more than 5% of our common stock. Dimensional disclaims beneficial ownership of the shares of our common stock owned by the Funds.
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(3)
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The amount shown in the table and the following information are based on a Schedule 13G (Amendment No. 1) jointly filed with the SEC on
February 7, 2013 by Heartland Advisors, Inc. (Heartland) and William J. Nasgovitz reporting beneficial
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3
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ownership as of December 31, 2012. Heartland and Mr. Nasgovitz share voting and dispositive power over all 1,737,532 shares of our common stock covered by the Schedule 13G. Heartland is
a registered investment adviser, and Mr. Nasgovitz is the president and a control person of Heartland. The various accounts managed by Heartland are the owners of the shares covered by the Schedule 13G; The Heartland Value Plus Fund, a series
of the Heartland Group, Inc., a registered investment company, owns 1,700,000 shares, 6.75%, of our common stock. Mr. Nasgovitz disclaims beneficial ownership of the shares of our common stock covered by the Schedule 13G.
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(4)
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The amount shown in the table and the following information are based on a Schedule 13G filed with the SEC on February 13, 2013 by The Vanguard
Group (Vanguard) reporting beneficial ownership as of December 31, 2012. Of the 1,317,066 shares covered by the Schedule 13G, Vanguard has sole voting power with respect to 34,607 shares and shares voting power with the remaining
shares, and has sole dispositive power with respect to 1,283,859 shares and shares dispositive power with respect to the remaining shares. The shares reported are held in trust accounts for the economic benefit of the beneficiaries of those
accounts. No one persons interest in our common stock is more than 5% of our total outstanding common shares.
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How much stock is beneficially owned by our directors and executive officers?
The following table includes information about the common stock owned by our directors, nominees and executive officers, as of March 6, 2013, including their name, position and the number of shares
beneficially owned. Each of the persons listed in the table below under the heading Directors and Nominees currently serve as a director of the Company. Unless otherwise noted, the persons below have sole voting power and investment
power with respect to the listed shares (subject to any applicable community property laws). The business address for each of the directors and executive officers listed below is 209 Troy Street, Tupelo, Mississippi 38804-4827.
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Amount and Nature of
Beneficial
Ownership
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Direct
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Options
Exercisable
Within 60
Days
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Other
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Total
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Percent of
Class
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Directors and Nominees:
(1)
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William M. Beasley
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50,718
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12,108
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(2)
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62,826
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*
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George H. Booth, II
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23,533
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23,533
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*
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Frank B. Brooks
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35,035
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35,035
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*
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John M. Creekmore
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11,577
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11,577
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*
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Albert J. Dale, III
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62,403
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62,403
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*
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Jill V. Deer
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3,545
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3,545
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*
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Marshall H. Dickerson
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6,334
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(3)
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6,334
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*
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John T. Foy
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28,721
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28,721
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*
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Richard L. Heyer, Jr.
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15,251
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6,238
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(4)
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21,489
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*
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Neal A. Holland, Jr.
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57,943
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(5)
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162,847
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(5)
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220,790
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*
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Jack C. Johnson
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33,032
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8,732
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(6)
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41,764
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*
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J. Niles McNeel
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48,541
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2,912
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(7)
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51,453
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*
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Theodore S. Moll
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26,648
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3,150
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(8)
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29,798
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*
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Michael D. Shmerling
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140,479
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(9)
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1,519
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(9)
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141,998
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*
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Named Executive Officers:
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E. Robinson McGraw
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118,047
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(10)
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187,500
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305,547
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1.21
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%
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Kevin D. Chapman
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12,274
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(11)
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23,500
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35,774
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*
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Stuart R. Johnson
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45,112
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(12)
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60,750
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105,862
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*
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C. Mitchell Waycaster
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29,062
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(13)
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63,250
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92,312
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*
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R. Rick Hart
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53,535
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(14)
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71,743
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125,278
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*
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Michael D. Ross
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18,329
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(15)
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32,500
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50,829
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*
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Other Executive Officers
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95,861
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244,792
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3,505
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344,158
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1.37
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%
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All directors, nominees and
executive officers as a group
(26 persons total)
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915,980
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684,035
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201,011
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1,801,026
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7.15
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%
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Less than 1% of the outstanding
common stock, based on 25,197,069 shares of our common stock issued and outstanding as of March 6, 2012.
(1)
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For each non-employee director, direct ownership includes 645 shares representing an award of time-based restricted stock under the 2011 Long Term
Incentive Compensation Plan (2011 LTIP).
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(2)
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Consists of 12,108 shares held by Mr. Beasleys spouse.
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(3)
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Of the 6,334 shares owned by Mr. Dickerson, 4,885 shares are pledged as collateral for a loan.
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(4)
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Consists of 2,804 shares held by Dr. Heyers spouse, 522 held in his childrens name of which he serves as custodian and 2,912 shares
held in a trust account for his children.
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4
(5)
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Of the 57,943 shares listed as directly owned, 49,818 shares are pledged as collateral for a loan. Other ownership consists of 1,303 shares held in
an individual retirement account owned by Mr. Hollands spouse, of which Mr. Holland is the beneficiary, 7,248 shares held by a family limited partnership, Holland Limited Partnership, 152,146 shares held by a family limited
partnership, Holland Holdings, LP, 2,000 shares held in a living trust of which Mr. Holland serves as trustee, and 150 shares in a trust for his children.
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(6)
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Consists of 8,732 shares held by Mr. Johnsons spouse.
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(7)
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Consists of 2,912 shares held by Mr. McNeels spouse.
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(8)
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Consists of 3,150 shares held by Mr. Molls children, for which Mr. Moll serves as custodian.
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(9)
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Of the 140,479 shares listed as directly owned 139,834 are pledged as collateral for a loan. Mr. Shmerlings other ownership consists of
1,519 shares held by his children.
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(10)
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Mr. McGraw is also the Chairman of our board of directors. His direct ownership includes an aggregate of 28,998 shares that are allocated to
his accounts under our 401(k) plan and ESOP, over which Mr. McGraw has voting power, 10,000 shares representing an award of time-based restricted stock under our 2011 LTIP and 10,000 shares representing a target award of performance-based
restricted stock under our 2011 LTIP.
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(11)
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Direct ownership includes an aggregate of 5,050 shares allocated to Mr. Chapmans account under our 401(k) plan, over which he has voting
power, and 3,250 shares representing a target award of performance-based restricted stock under the 2011 LTIP.
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(12)
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Direct ownership includes an aggregate of 40,265 shares that are allocated to Mr. Johnsons accounts under our 401(k) plan and ESOP, over
which he has voting power.
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(13)
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Direct ownership includes an aggregate of 13,888 shares that are allocated to Mr. Waycasters accounts under our 401(k) plan and ESOP,
over which he has voting power, and 5,700 shares representing a target award of performance-based restricted stock under the 2011 LTIP. Of the directly shares owned by Mr. Waycaster, 5,759 shares are pledged as collateral for a loan.
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(14)
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Mr. Hart is also a member of our board of directors. Direct ownership includes an aggregate of 649 shares that are allocated to his account
under our 401(k) plan, over which Mr. Hart has voting power, and 5,700 shares representing a target award of performance-based restricted stock under the 2011 LTIP.
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(15)
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Includes 5,700 shares representing a target award of performance-based restricted stock under the 2011 LTIP.
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The performance-based restricted stock awards under the 2011 LTIP described in notes 10-15 above provide that each recipient possesses
voting and dividend rights with respect to his target shares pending settlement at the end of the annual performance cycle. Under the terms of each performance award, the target number of shares is subject to increase or decrease based upon the
outcome of Company performance metrics during 2013. The directors also possess voting and dividend rights with respect to the award of the time-based restricted stock described in notes 1-10.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of
a registered class of our equity securities to file with the SEC and the NASDAQ Stock Market, LLC (Nasdaq) reports of ownership of our securities and changes in their ownership on Forms 3, 4 and 5. Executive officers, directors and
greater than 10% shareholders are required by SEC rules to furnish us with copies of all Section 16(a) reports they file.
Based solely upon a review of the reports on Forms 3 and 4 and amendments thereto furnished to us in 2012 and Forms 5 and amendments thereto furnished to us with respect to 2012, or written
representations from reporting persons that no Form 5 filing was required, we believe that in 2012 our executive officers, directors and greater than 10% owners timely filed all reports they were required to file under Section 16(a).
BOARD OF DIRECTORS
How many directors serve on the board, and who are the current directors?
Effective as of the annual meeting, a total of 16 directors serve on our board. T. Michael Glenn resigned from his position on the board effective December 31, 2012. There are three classes of
directors. Assuming that all of our nominees for director are elected, after the annual meeting there will be five directors in Class 1, five directors in Class 2 and six directors in Class 3. The current term of office for our Class 2 directors
expires at the 2013 annual meeting, while the current term of office for our Class 3 directors expires at the 2014 annual meeting and the current term of office for our Class 1 directors expires at the 2015 annual meeting.
The following lists each director currently serving on our board and includes a brief discussion of the experience,
qualifications and skills that led us to conclude that such individual should be and remain a member of our board.
We believe that our board of directors consists of a diverse collection of individuals who possess the integrity, education, work ethic and ability to work with others necessary to oversee our business
effectively and to represent the interests of all shareholders, including the qualities listed under the question
Who serves on the nominating and governance committee, and what are its responsibilities?
below. We have attempted
below to highlight certain notable experience, qualifications and skills for each director, rather than provide an exhaustive catalog of each and every qualification and skill that a director possesses.
5
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Name
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Age
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Class
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Background, Qualifications and Skills
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George H. Booth, II
Director since 1994
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59
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1
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Background:
Mr. Booth is co-owner of Tupelo Hardware Company, a closely-held family business primarily engaged
in wholesale and retail hardware sales. Mr. Booth has served as president of Tupelo Hardware Company since 2000.
Experience/Qualifications/Skills
: Mr. Booth brings a borrowers and depositors perspective to the board. He also
provides insight on whether our products and services are responsive to the needs of small business owners.
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Frank B. Brooks
Director since 1989
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69
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1
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Background:
Mr. Brooks has been a cotton farmer since 1959 and has served as president of Yalobusha Gin
Company, Inc., a cotton gin located in Yalobusha County, Mississippi, since 1992.
Experience/Qualifications/Skills
: Mr. Brooks has served as audit committee chairman for two other organizations. We use his leadership and knowledge to provide appropriate oversight of our
financial reporting and operational risks. In addition, Mr. Brooks experience running businesses servicing other farmers provides insight on the needs of small business owners and on our agricultural lending operations.
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Albert J. Dale, III
Director since 2007
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|
62
|
|
1
|
|
Background:
Mr. Dale has served as president of Dale, Inc., since 1985. Dale, Inc., located in Nashville,
Tennessee, is a specialty contractor and an authorized distributor of custom building products. He was appointed as a director of the Company upon the completion of our acquisition of Capital Bancorp, Inc., or Capital, in July, 2007.
Experience/Qualifications/Skills
: As a supplier
to businesses and consumers, Mr. Dales professional experience provides the Board with insight from the customers perspective on the needs and risks associated with business development. In addition, Mr. Dale brings to the board an
intimate knowledge of Nashville, Tennessee, one of our targeted growth markets. We rely on Mr. Dale for advice on where and how to serve the Nashville metropolitan area.
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John T. Foy
Director since 2004
|
|
65
|
|
1
|
|
Background:
Mr. Foy is retired. From February, 2004 until February, 2008 he served as president and chief
operating officer of Furniture Brands International, Inc. During that time, he was also a member of the board of directors of Furniture Brands International. Prior to 2004 he served as president and chief executive officer of Lane Furniture
Industries. Furniture Brands International and Lane Furniture Industries are engaged in the manufacture of upholstered and wooden furniture.
Experience/Qualifications/Skills
: Furniture manufacturing represents a major segment of the economy in our North Mississippi
markets. We believe that Mr. Foys broad experience in the furniture manufacturing industry gives us an advantage in soliciting these types of customers, as well as customers in the manufacturing industry in general. Also, Mr. Foys
experience as the president and a director of Furniture Brands International, Inc., a publicly-traded company, provides him with insights on corporate governance.
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6
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Name
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|
Age
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|
Class
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Background, Qualifications and Skills
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Jack C. Johnson
Director since 2004
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|
70
|
|
1
|
|
Background:
Mr. Johnson has served as president of Germantown Home Builders, Inc., located in Germantown,
Tennessee, since 1974. Since March, 2001, he has also served as the chief manager of Colonnade, LLC, a company engaged in the leasing of storage and office space in Memphis, Tennessee, and he has been the managing member of Germantown Storage, LLC
since May, 2009. Mr. Johnson was appointed as a director of the Company upon the completion of our acquisition of Renasant Bancshares, Inc. in 2004.
Experience/Qualifications/Skills
: The Memphis metropolitan area is another one of our key growth markets, and Mr. Johnsons
knowledge of this area helps us develop the appropriate strategy to expand our operations in Memphis. In addition, Mr. Johnsons business background is in commercial real estate. He gives the board an insight on trends in the commercial real
estate markets shaped by years of experience.
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John M. Creekmore
Director since 1997
|
|
57
|
|
2
|
|
Background:
Mr. Creekmore has engaged in the practice of law since 1987 as the owner of the law firm Creekmore
Law Office, PLLC.
Experience/Qualifications/Skills
: As a lawyer, Mr. Creekmore brings a legal point of view to the risks and challenges that we face.
He also provides us with insights regarding the legal implications of our plans and strategies. Finally, Mr. Creekmore lives and works in Amory, Mississippi, and helps shape our policies with respect to our smaller markets.
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Jill V. Deer
Director since 2010
|
|
50
|
|
2
|
|
Background:
Ms. Deer is a real estate consultant in Birmingham, Alabama. From 2001 until March, 2013 Ms. Deer
served as a principal of Bayer Properties, L.L.C., a full service real estate company based in Birmingham, Alabama, that owns, develops and manages commercial real estate. Ms. Deer joined Bayer Properties in 1999 to serve as an executive officer and
general counsel of the company. Prior to that time, she was a partner in a large regional law firm in Birmingham practicing in the area of commercial real estate finance.
Experience/Qualifications/Skills
: The Birmingham
metropolitan area is the largest metropolitan area in Alabama and one of our key growth markets. Ms. Deers knowledge and experience in this market helps us develop strategies to further expand our presence in Birmingham. Furthermore, Ms.
Deers professional experience gives the Board an additional resource in understanding the risks and trends associated with commercial and residential real estate.
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Neal A. Holland, Jr.
Director since 2005
|
|
57
|
|
2
|
|
Background:
Mr. Holland has been president of Holland Company, Inc., a diversified sand, stone and trucking
company in Decatur, Alabama, since 1980. He is also the chairman and CEO of Alliance Sand and Aggregates, LLC and owner and president of Cedar Ridge Golf Course, Inc. Mr. Holland was appointed as a director of the Company upon the completion of our
acquisition of Heritage Financial Holding Corporation, or Heritage, in 2005.
Experience/Qualifications/Skills
: Mr. Holland has given us valuable advice in shaping our policies and strategies in our Alabama markets. Mr. Hollands service on the board and executive
committee of Heritage has given him added experience and insight to the risks associated with serving on the board of a publicly-traded financial institution. As the owner of multiple businesses, he also is able to add a borrowers perspective
to the boards discussions.
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7
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Name
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Age
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Class
|
|
Background, Qualifications and Skills
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E. Robinson McGraw
Director since 2000
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|
66
|
|
2
|
|
Background:
Mr. McGraw has served as our and the Banks President and Chief Executive Officer since 2000.
Since June, 2005, Mr. McGraw has also served as Chairman of our and the Banks board of directors. Mr. McGraw served as Executive Vice President and General Counsel of the Bank prior to becoming our Chief Executive Officer.
Experience/Qualifications/Skills
: It is unlikely
that there is any individual that has a more intimate knowledge of our history, our current operations and our future plans than Mr. McGraw. His insight is an essential part of formulating our plans and strategies. Mr. McGraws legal background
and years of experience with the Company provides the board an additional resource on legal implications and the regulatory requirements specifically attributable to the banking industry and financial institutions.
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Theodore S. Moll
Director since 2002
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|
70
|
|
2
|
|
Background:
Mr. Moll has been with MTD Products, a company primarily engaged in the production of outdoor
power equipment, since 1965. Mr. Moll presently serves as chairman of its board of directors.
Experience/Qualifications/Skills
: In his professional experience, Mr. Moll has garnered a deep understanding of the financial and accounting aspects of large organizations, and he provides us with
an understanding of the impact of financial and accounting issues on our proposed strategies. He also helps guide the board regarding the oversight of large, multifaceted entities like Renasant. Mr. Moll also serves as our audit committee financial
expert.
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William M. Beasley
Director since 1989
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|
61
|
|
3
|
|
Background:
Mr. Beasley has been a partner in the law firm of Phelps Dunbar LLP since 1999 and has practiced
law since 1975.
Experience/Qualifications/Skills
: Like Mr. Creekmore, Mr. Beasley brings a legal perspective to our operations. His analysis of the
legal implications of our strategies is important to our mitigation of legal risk. In addition, Mr. Beasley invests and holds real estate in our Mississippi markets. His experience with these real estate investments provides the board with insight
on the trends and risks associated with residential and commercial real estate within all of our markets.
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Marshall H. Dickerson
Director since 1996
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|
64
|
|
3
|
|
Background:
Mr. Dickerson is the retired owner and manager of Dickerson Furniture Company, a company primarily
engaged in retail home furnishings sales, since 1978.
Experience/Qualifications/Skills
: Mr. Dickerson owned and operated his own business for over 33 years. As a former small business owner, he understands the capital needs and other challenges that
many of our small business customers face on a daily basis; he also understands the services that a small business owner requires from its banking relationship. We believe that Mr. Dickersons insights on these topics help us tailor our
products, as well as our customer service operations, to meet the needs of this important segment of our business.
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8
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|
|
|
|
Name
|
|
Age
|
|
Class
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|
Background, Qualifications and Skills
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|
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R. Rick Hart
Director since 2007
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|
64
|
|
3
|
|
Background:
Mr. Hart has served as an Executive Vice President of the Company and President of the Northern
Division of the Bank since October, 2011. He served as the President of the Tennessee Division and Middle Tennessee Division of the Bank from July, 2007 until October, 2011. Prior to our acquisition of Capital, Mr. Hart served as chairman, president
and chief executive officer of Capital Bank & Trust Company, in Nashville, Tennessee. Mr. Hart was appointed as a director of the Company upon the completion of our acquisition of Capital in July, 2007.
Experience/Qualifications/Skills
: Mr. Hart brings
the experience of a Nashville banker to the board, helping to formulate our plans for the Nashville market. Along with Mr. McGraw, Mr. Hart serves as a liaison between the board and our employees, keeping the board abreast of employee concerns and
morale.
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|
|
|
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Richard L. Heyer, Jr.
Director since 2002
|
|
56
|
|
3
|
|
Background:
Dr. Heyer has served as a physician and partner of Tupelo Anesthesia Group, P.A. since 1989. In
addition, Dr. Heyer has served as President of TAG Billing, LLC, a billing service provider in the medical industry.
Experience/Qualifications/Skills
: As the sole physician on our board, Dr. Heyer brings a different perspective to the challenges
that our board faces. Dr. Heyers background and experience is important in the formulation of board policy. Dr. Heyer is also a business owner and adds this perspective to board discussions.
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|
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J. Niles McNeel
Director since 1999
|
|
66
|
|
3
|
|
Background:
Mr. McNeel has engaged in the practice of law as a partner of the law firm of McNeel and Ballard
since 1983.
Experience/Qualifications/Skills
: Mr. McNeels practice is based in Louisville, Mississippi, giving him insight into the
issues facing our customers in our smaller markets. As an attorney, Mr. McNeel also brings a legal perspective to the boards deliberations and analysis.
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Michael D. Shmerling
Director since 2007
|
|
57
|
|
3
|
|
Background:
Mr. Shmerling has served as chairman of Choice Food Group, a manufacturer and distributor of food
products, since July, 2007. Mr. Shmerling served as a senior advisor to Kroll, Inc., a risk consulting company, from August, 2005 to June, 2007 and an executive vice president of Kroll, Inc. from August, 2000 to June, 2005. Effective as of May,
2001, he also served as Chief Operating Officer of Kroll. Mr. Shmerling was appointed as a director of the Company upon the completion of our acquisition of Capital in July, 2007. Mr. Shmerling is also a director for Healthstream, Inc., a
publicly-traded company.
Experience/Qualifications/Skills
: Mr. Shmerlings business and philanthropic endeavors in the Nashville market provide us with
opportunities to create new business relationships and grow market share in this key area. In addition, his 34 year professional history as a licensed CPA (inactive) in public and private practice provides the board with a broad range of financial
knowledge and business acumen. Mr. Shmerling is experienced in assessing and mitigating risk and formulating policies designed to minimize risk exposure. In addition, his experience as an officer and director of publicly-traded companies gives the
board another resource for issues specific to publicly-traded companies in the areas of financial reporting and corporate governance.
|
Are the directors independent?
Our board has determined that each of William M. Beasley, George H. Booth, II, Frank B. Brooks, John M. Creekmore, Albert
J. Dale, III, Jill V. Deer, Marshall H. Dickerson, John T. Foy, Richard L. Heyer, Jr., Neal A. Holland, Jr., Jack C. Johnson, J. Niles McNeel, Theodore S. Moll and Michael D. Shmerling is an independent director as defined under Rule
5605(a)(2) of the Nasdaq Marketplace Rules. Mr. Glenn was an independent director while he was a member of the board. Being Renasant employees, Mr. McGraw and Mr. Hart are not independent under the Nasdaq Marketplace
Rules.
9
The board considered the relationships between our directors and Renasant or
the Bank when determining each directors status as an independent director under Rule 5605(a)(2) of the Nasdaq Marketplace Rules. In addition to the relationships listed below under the questions
Are directors and officers
indebted to the Bank?
and
Are there any other related party transactions?
the board considered the following relationships:
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|
We and the Bank employ Phelps Dunbar LLP, a law firm of which William M. Beasley is a partner, to provide advice in various legal areas, including
employee benefits and general corporate and securities law.
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The Bank employs McNeel and Ballard, a law firm of which J. Niles McNeel is a partner, as local counsel for its community bank at Louisville,
Mississippi.
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|
|
The Bank employs Mr. Creekmores son at one of its Nashville branches (but this individual is not an executive officer, as
that term is defined in Rule 16a-1(f) under the Exchange Act).
|
The board determined that
none of these relationships affects the status of the relevant director as an independent director. Furthermore, we are not aware of any family relationships between any director, executive officer or person nominated to become a
director or executive officer.
What is the boards leadership structure, and why have we
selected this structure?
E. Robinson McGraw, our chief executive officer, serves as chairman of the board
of the Company and the Bank, while John M. Creekmore serves as lead director on our board of directors. The members of the board who meet the definition of independent director under the Nasdaq Marketplace Rules select our
lead director, except that no lead director is required to be selected if the chairman of the board qualifies as an independent director. The lead directors responsibilities are explained below.
We have chosen a board leadership structure with Mr. McGraw serving as our chairman because we believe this
structure results in a single voice speaking for the Company and presents a unified and clear chain of command. Also, the chairman of the board is expected to manage the board in performing its duties and lead board discussion. As our and the
Banks President and Chief Executive Officer, Mr. McGraw is ideally positioned to provide insight on the current status of our overall operations, our future plans and prospects and the risks that we and the Bank face. Thus, the individual
with the most knowledge about us and the Bank and our respective operations is responsible for leading the boards discussions. The board retains the authority to separate the positions of chairman and chief executive officer if it finds that
the boards responsibilities can be better fulfilled with a different structure.
We also have a lead
director. The lead director serves as an independent counterbalance to the chairman, ensuring that all of our directors concerns are addressed and otherwise facilitating robust discussions among the entire board (which, as noted above, is
comprised almost entirely of independent directors). In terms of board leadership, we view the lead director as essentially a co-equal with the chairman of the board. Mr. Creekmore has been a director since 1997, predating
Mr. McGraws service on the board, which we believe adds weight to his independent voice on the board. Also, at each meeting, if he deems it necessary, the lead director may call the board into executive session (that is, a meeting of only
those directors who are independent directors under the Nasdaq Marketplace Rules) to discuss matters outside the presence of the chairman and other non-independent directors.
Article III, Section 8, of our Restated Bylaws, as amended (our Bylaws), sets forth a complete
description of the lead directors responsibilities; in general, the lead director is responsible for:
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With Mr. McGraw, scheduling and setting the agenda for board meetings;
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Scheduling, setting the agenda for, and chairing all executive sessions of the independent directors of the board;
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Determining the appropriate materials to be sent to directors for all meetings;
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Acting as a liaison between the board and Mr. McGraw and our other executive officers;
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Assisting the compensation committee in evaluating Mr. McGraws performance;
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Assisting the nominating and governance committee in its annual assessment of the boards committee structure and each committees
performance; and
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Overseeing the boards communications with our shareholders.
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In addition to these specific duties, we expect the lead director to familiarize himself with the Company, the Bank and the banking
industry in general. He also is expected to keep abreast of developments in the principles of good corporate governance. The lead director is also a member of the executive committee of the board.
10
What is the boards role in risk oversight?
Although our full board of directors is ultimately responsible for the oversight of our risk management
processes, the board is assisted in this task by a number of its committees and committees of the Banks board of directors. These committees are primarily responsible for considering and overseeing the risks within their particular area
of concern. For example, our audit committee focuses on financial reporting and operational risk. As provided in its charter, the audit committee meets regularly with management, our independent registered public accountants and our internal
auditors, to discuss the integrity of our financial reporting processes and internal controls as well as the steps that have been taken to monitor and control risks related to such matters. Our Banks loan committee is primarily responsible for
credit and other risks arising in connection with our lending activities, which includes overseeing management committees that also address these risks. The Banks investment committee monitors our interest rate risk, with the goal of
structuring our asset-liability composition to maximize net interest income while minimizing the adverse impact of changes in interest rates on net interest income and capital. Finally, our compensation committee, whose duties are described in more
detail below, evaluates the risks that our executive compensation programs may generate.
Each committee meets
regularly with management to assist management in identifying all of the risks within such committees areas of responsibility and in monitoring, and where necessary taking appropriate action to mitigate, the applicable risks. At each board
meeting, the committee chairman provides a report to the full board of directors on issues related to such committees risk oversight duties. To the extent that any risks reported to the full board need to be discussed outside the presence of
management, the board will call an executive session to discuss these issues.
We believe the boards
approach to fulfilling its risk oversight responsibilities complements its leadership structure. In his capacity as chairman of the board, Mr. McGraw reviews whether board committees are addressing their risk oversight duties in a comprehensive
and timely manner. Since he is also our chief executive officer, Mr. McGraw is able to assist these committees in fulfilling their duties by (1) requiring that our management team provides these committees with all requested reports and
other information as well as with access to our employees and (2) implementing recommendations of the various board committees to mitigate risk. At the same time, Mr. Creekmore, as our lead director, is able to lead an independent review
of the risk assessments developed by management and reported to the committees.
How are
directors compensated?
The compensation committee recommends the compensation for our non-employee
directors; our full board of directors approves or modifies the recommendation. Any modifications are implemented May 1 after the annual meeting.
For the period May 1, 2011, through April 30, 2012, each non-employee director received an annual cash retainer in the amount of $22,500, paid in equal monthly installments, while the lead
director received an additional $6,500 paid in equal monthly installments. The chairman of the audit committee was paid $1,000 per meeting, while the other members of the audit committee were paid $500 for each audit committee meeting attended.
Except for audit committee meetings, our non-employee directors were paid $350 for each committee meeting they attended. We also paid our directors fees for service on our state bank boards. Each of our non-employee directors who served on one of
our state bank boards was paid a cash retainer of $3,000, paid in equal monthly installments, and a $200 fee for attendance at state bank board committee meetings.
Our board modified the compensation structure for our non-employee directors following the 2012 annual shareholders
meeting. Effective May 1, 2012, the annual cash retainer paid to each non-employee director in monthly installments was reduced to $15,000. Directors also received an annual award of time-based restricted stock with a value of $10,000, which
vests as of the date of the 2013 annual meeting. The additional amount paid to our lead director increased to $7,500, payable in monthly installments. The chairman of the audit committee is paid an annual retainer in the amount of $6,000, while the
chairman of each of the compensation committee, executive committee and loan committee receives an annual retainer in the amount of $3,000, each of which is paid in equal monthly installments. All other committee chairmen receive $750 for each
committee meeting chaired, while each other committee member receives $500 for each committee meeting attended. No change was made to the compensation paid for service on our state bank boards.
Directors who are also our employees receive no additional compensation for their service as directors, but they are
reimbursed for any direct expenses incurred to attend our meetings.
During 2012, the Bank maintained two
types of deferred compensation plans in which our non-employee directors were eligible to participate. Under one plan, the Deferred Stock Unit Plan, or the DSU Plan, deferred retainer and fees are deemed invested in units representing
shares of our common stock and are credited with dividend equivalent units as and when we pay dividends. Units are allocated to each participants account based on a quarterly average market price. Under the other plan, the Directors
Deferred Fee Plan, or the Deferred Fee Plan, deferred retainer and
11
fees are notionally invested in accordance with the instructions of each participating director. Investment alternatives offered under the Deferred Fee Plan include the Moodys Average
Corporate Bond Rate, or the Moodys Rate, which was a weighted average interest rate of 4.35% in 2012, as well as a limited number of publicly-traded mutual funds, all of which funds are also investment alternatives under our 401(k) plan. For
both the DSU Plan and the Deferred Fee Plan, deferral elections are made annually, before the beginning of each fiscal year, and all of the directors compensation is available for deferral. Amounts held under either plan are payable when a
director ceases to serve as a member of the board or attains a specified age. Under the DSU Plan, deferred amounts are paid in the form of shares of our common stock; under the Deferred Fee Plan, deferred amounts are paid in cash.
Our directors may elect coverage under the Banks group medical and dental plans for themselves and their eligible
dependents. Directors pay for coverage at the premium rates charged, from time to time, to active employees of the Company and the Bank. The Bank also provides term life and accidental death and dismemberment insurance to our directors, each with a
face amount equal to $10,000.
The following table summarizes the compensation paid to our non-employee
directors during the 2012 fiscal year:
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Director Compensation for 2012
|
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Name
|
|
Fees Earned or
Paid in
Cash
(1)
|
|
|
Stock
Award
(2)
|
|
|
Change in Pension Value
and Nonqualified Deferred
Compensation Earnings
(3)
|
|
|
All Other
Compensation
(4)
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Total
|
|
|
|
William M. Beasley
|
|
$
|
24,300
|
|
|
$
|
10,000
|
|
|
$
|
6,542
|
|
|
$
|
8,752
|
|
|
$
|
49,594
|
|
George H. Booth, II
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|
|
28,850
|
|
|
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10,000
|
|
|
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3,526
|
|
|
|
4,398
|
|
|
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46,774
|
|
Frank B. Brooks
|
|
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39,650
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|
|
|
10,000
|
|
|
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3,752
|
|
|
|
6,918
|
|
|
|
60,320
|
|
John M. Creekmore
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|
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38,317
|
|
|
|
10,000
|
|
|
|
3,243
|
|
|
|
245
|
|
|
|
51,805
|
|
Albert J. Dale, III
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48,275
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|
|
|
10,000
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|
|
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7,539
|
|
|
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5,685
|
|
|
|
71,499
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|
Jill V. Deer
|
|
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31,625
|
|
|
|
10,000
|
|
|
|
2,973
|
|
|
|
245
|
|
|
|
44,843
|
|
Marshall H. Dickerson
|
|
|
41,700
|
|
|
|
10,000
|
|
|
|
13,031
|
|
|
|
6,918
|
|
|
|
71,649
|
|
John T. Foy
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|
|
40,400
|
|
|
|
10,000
|
|
|
|
|
|
|
|
6,918
|
|
|
|
57,318
|
|
T. Michael Glenn
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|
|
26,250
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|
|
|
10,000
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(5)
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|
|
307
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|
|
|
245
|
|
|
|
36,802
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|
Richard L. Heyer, Jr.
|
|
|
24,450
|
|
|
|
10,000
|
|
|
|
2,197
|
|
|
|
245
|
|
|
|
36,892
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|
Neal A. Holland, Jr.
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|
|
48,000
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|
|
|
10,000
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|
|
|
|
|
|
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245
|
|
|
|
58,245
|
|
Jack C. Johnson
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|
|
29,800
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|
|
|
10,000
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|
|
|
364
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|
|
|
6,918
|
|
|
|
47,082
|
|
J. Niles McNeel
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|
|
24,800
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|
|
|
10,000
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|
|
|
|
|
|
|
6,918
|
|
|
|
41,718
|
|
Theodore S. Moll
|
|
|
32,550
|
|
|
|
10,000
|
|
|
|
12,344
|
|
|
|
245
|
|
|
|
55,139
|
|
Michael D. Shmerling
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|
|
30,600
|
|
|
|
10,000
|
|
|
|
16,815
|
|
|
|
11,991
|
|
|
|
69,406
|
|
(1)
|
Includes
amounts voluntarily deferred to either the DSU Plan or the Deferred Fee Plan.
|
(2)
|
Each director received an award of 645 shares of time-based restricted stock under the 2011 LTIP on April 24, 2012. The dollar amount reflects
the aggregate fair value determined as of the date of award, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation. Dividends payable on restricted stock awards
are not included in our fair value determination of such award. Please refer to Note N, Employee Benefit and Deferred Compensation Plans, in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and
Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2012 for details regarding the assumptions used to derive the fair value of our restricted stock and stock options.
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(3)
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Consists of above-market earnings on retainer and fees deferred under the Deferred Fee Plan. Interest earned on deferred amounts is considered
above-market only if the interest rate exceeded 120% of the applicable federal long-term rate with compounding as prescribed by the Internal Revenue Service.
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(4)
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Consists of (a) the portion of medical and dental plan premiums paid by us for directors electing such coverage, (b) term life and
accidental death and dismemberment premiums in the amount of $25 for each director, and (c) cash dividends paid on restricted stock awards.
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(5)
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Mr. Glenns restricted stock award was forfeited on account of his resignation from the board on December 31, 2012.
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How
many meetings did the board hold during 2012?
Our board held nine meetings during 2012. All directors
attended at least 75% of the total number of board meetings and the meetings of the committees on which they served. The members of the board who are independent directors under Nasdaq Rule 5605(a)(2) met in executive session six times
during 2012.
We do not have a policy requiring director attendance at our annual meeting. All of our current
directors attended the 2012 annual meeting. We expect our entire board to attend this years annual meeting.
12
What committees has the board established?
The board of directors of the Company has established an audit committee, a compensation committee and a nominating and
governance committee, among others. The composition and responsibilities of the audit committee and the nominating and governance committee are described below. The composition and responsibilities of the compensation committee are described in the
Executive CompensationCompensation Discussion and Analysis section below under the question
Who is responsible for determining executive compensation?
Who serves on the audit committee, and what are its responsibilities?
Frank B. Brooks, Jill V. Deer, Marshall H. Dickerson, John T. Foy, Theodore S. Moll and Michael D. Shmerling are the
members of the audit committee. The board has determined that each member of the audit committee (1) is an independent director as defined in Rule 5605(a)(2) of the Nasdaq Marketplace Rules, (2) meets the criteria for
independence in Rule 10A-3 of the Exchange Act and (3) satisfies the other requirements for audit committee membership under the Nasdaq Marketplace Rules. The board has determined that Theodore S. Moll qualifies as an audit committee
financial expert under applicable SEC rules and regulations and satisfies the financial sophistication requirements under Rule 5605(c)(2)(A) of the Nasdaq Marketplace Rules. During 2012, the audit committee held 16 meetings.
The audit committee has adopted a written charter, a copy of which is available at www.renasant.com, by clicking on
Corporate Overview, and then Governance Documents, and then Audit Committee Charter.
The audit committee reviews our financial reporting process on behalf of the board of directors. The audit committees duties and responsibilities include the following:
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Appointing, compensating and overseeing our independent registered public accountants;
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Monitoring the integrity of our financial reporting process and system of internal controls;
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Monitoring the independence and performance of our independent registered public accountants and internal auditing department;
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Pre-approving all auditing and permitted non-audit services provided by our independent registered public accountants;
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Providing an avenue of communication among our independent registered public accountants, management, the internal auditing department and the board
of directors; and
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Establishing procedures for (1) the receipt, retention and treatment of complaints we receive regarding accounting, internal accounting
controls or auditing matters, and (2) the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters.
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Who serves on the nominating and governance committee, and what are its responsibilities?
The nominating and governance committee interviews, evaluates, nominates and recommends individuals for membership on our
board of directors and the boards committees. The members of the nominating and governance committee are John M. Creekmore, Marshall H. Dickerson, Neal A. Holland, Jr., Theodore S. Moll and Michael D. Shmerling (T. Michael Glenn was also a
member of this committee until his resignation from the board). Each of the current members of the nominating and governance committee is an independent director as defined under Rule 5605(a)(2) of the Nasdaq Marketplace Rules. During
2012, the nominating and governance committee held five meetings.
The nominating and governance committee has
adopted a written charter, a copy of which is available at www.renasant.com, by clicking on Corporate Overview, and then Governance Documents, and then Nominating and Governance Committee Charter.
The nominating and governance committee evaluates potential new directors based upon the needs of the board and the
Company. The committees objective is to craft a board composed of individuals with a broad mix of backgrounds and experiences and possessing, as a whole, all of the skills and expertise necessary to guide a publicly-traded company like us in
the prevailing business environment. The committee uses the same criteria to assess all candidates for director, whether proposed by the committee itself, by a shareholder or otherwise. In addition to the eligibility requirements in our Bylaws, the
criteria include, without limitation, whether the candidate possesses the following qualifications and qualities:
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Independence for purposes of Rule 5605(a)(2) of the Nasdaq Marketplace Rules and SEC rules and regulations;
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Experience in banking, or in marketing, finance, legal, accounting or other professional disciplines;
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Familiarity with and participation in the local communities in which we do business;
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Prominence and reputation in his or her profession;
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13
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Record of honest and ethical conduct, personal integrity and independent judgment;
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Ability to represent the interests of our shareholders; and
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Ability to devote time to the board of directors and to enhance their knowledge of our industry.
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Neither the board nor the nominating and governance committee has adopted a formal policy with regard to the consideration of diversity
when evaluating candidates for election to the board. However, the nominating and governance committee believes that board membership should reflect diversity in its broadest sense, and so it does consider a candidates gender, ethnicity
experience, education, geographic location and difference of viewpoint when evaluating his or her qualifications for election to the board. Whenever the nominating and governance committee evaluates a potential candidate, the committee considers
that individual in the context of the composition of the board as a whole.
Usually, nominees for election to
the board are proposed by the current members of the board. The nominating and governance committee also considers candidates that shareholders and others recommend. Shareholder recommendations should be addressed to: Secretary, Renasant
Corporation, 209 Troy Street, Tupelo, Mississippi 38804-4827. Your recommendations must be submitted to us no earlier than December 24, 2013, and no later than January 23, 2014, for consideration as a possible nominee for election to the
board at our 2014 annual meeting.
The specific requirements of our advance notice and eligibility provisions,
which apply to shareholder recommendations of candidates for director, are set forth in Article III, Section 9, of our Bylaws, a copy of which is available upon request. Among other things, a shareholders notice must include the following
information as to each nominee:
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The reason for making the nomination;
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All arrangements or understandings between or among the recommending shareholder(s) and the nominee, as well as any information that would have to
be disclosed under Item 404 of Regulation S-K if the recommending shareholder (and any beneficial owner on whose behalf the recommendation has been made) was the registrant;
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All information relating to the nominee that is required to be disclosed in solicitations of proxies for the election of directors in a contested
election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and
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The nominees written consent to being named in the proxy statement and to serve as a director if elected.
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The shareholders notice must also set forth the name and address of the nominating shareholder and information relating to, among
other things (1) all direct and indirect ownership interests (including hedges, short positions and derivatives) and economic interest in our stock (such as rights to dividends) and all proxies and other arrangements to vote our stock held by
the nominating shareholder, and (2) all other information that the shareholder would be required to disclose under Section 14 of the Exchange Act in connection with the solicitation of proxies by such shareholder. If a shareholder intends
to recommend a nominee for election as director on behalf of the beneficial owner of the shares that the recommending shareholder is the record owner of, the recommending shareholder must also provide the information described above with respect to
the beneficial owner.
How does the board respond to shareholder questions?
The board has not adopted a formal procedure that you must follow to send communications to it, but it does have informal
procedures, described below, which it believes adequately facilitate shareholder communications with the board.
Shareholders can send communications to the board by contacting Kevin D. Chapman in one of the following ways:
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By writing to Renasant Corporation, 209 Troy Street, Tupelo, Mississippi 38804-4827; Attention: Chief Financial Officer;
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By e-mail to KChapman@renasant.com; or
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By phone at (662) 680-1450.
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If you request information or ask questions that can more efficiently be addressed by management, Mr. Chapman will respond to your questions instead of the board. He will forward to the audit
committee any communication concerning employee fraud or accounting matters and will forward to the full board any communication relating to corporate governance or those requiring action by the board of directors.
14
Are directors and officers indebted to the Bank?
Certain of our directors and officers, businesses with which they are associated, and members of their
immediate families are customers of the Bank and have entered into loan transactions with the Bank. In the opinion of the board of directors, these transactions were made in the ordinary course of the Banks business, were made on substantially
the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Bank, and did not involve more than the normal risk of collectability or present other unfavorable
features.
Are there any other related party transactions?
The Bank employs the son of R. Rick Hart, an executive officer and a director, as a vice president. Mr. Harts
son was an employee of Capital prior to the merger and continues to work in the same capacity at a branch located in Nashville, Tennessee. His salary is consistent with the salary paid to similarly-situated employees of the Bank.
What are our policies and procedures for the review, approval and ratification of related party
transactions?
We expect our directors, officers and employees to act and make decisions that are in our
best interests and encourage them to avoid situations which present a conflict between our interests and their own personal interests. Under our code of ethics, our directors, officers and employees are prohibited from taking any action that may
make it difficult for them to perform their duties, responsibilities and services to us in an objective and fair manner. A copy of our Code of Ethics is available at www.renasant.com by clicking on Corporate Overview, and then
Governance Documents, and then Code of Ethics.
The entire board of directors is
responsible for reviewing and approving or ratifying all material transactions between us and our subsidiaries with any related party. To identify related party transactions, each year we require our directors and officers to complete Director and
Officer Questionnaires identifying any transactions with us in which the officer or director or their immediate family members have an interest. When the board reviews, approves or ratifies related party transactions, the director associated with
the matter must abstain from voting and, typically, is not present while discussions and deliberations are held. Related parties include any of our directors or executive officers, their immediate family members and businesses with which they are
associated. The types of transactions that must be reviewed and approved include extensions of credit and other business relationships.
We review related party transactions due to the potential for a conflict of interest. A conflict of interest occurs when an individuals private interest interferes, or appears to interfere, in any
way with our interests. Our Code of Ethics requires all directors, officers and employees who may have a potential or apparent conflict of interest to immediately notify the chairman of the audit committee. Other than our Code of Ethics, our related
party transaction policy is not in writing.
Are there any legal proceedings involving a
director or executive officer and Renasant or the Bank?
We are not aware of any current legal proceedings
involving any of our directors or executive officers and either the Bank or us.
EXECUTIVE
OFFICERS
Who are our executive officers?
The names, ages, positions and business experience of our principal executive officers, except for Mr. McGraw and
Mr. Hart, are listed below. Because they are also members of our board, information about Mr. McGraw and Mr. Hart appeared previously in the Board of Directors section above under the question
How many directors
serve on the board, and who are the current directors?
All of our executive officers are appointed annually by the board of directors and serve at the discretion of the board except for Mr. McGraw and Mr. Hart, each of whom is
party to an employment agreement.
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Name
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Age
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Position
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Kevin D. Chapman
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37
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Our Executive Vice President since January, 2011, and Chief Financial Officer since October, 2011. Mr. Chapman served as our Corporate Controller since May,
2006 until October, 2011. He has served as Senior Executive Vice President of the Bank since January, 2011 and, with Mr. Johnson, Chief Financial Officer of the Bank since October, 2011. Mr. Chapman served as Chief Strategy Officer of the Bank from
January, 2011, until October, 2011. He was a Senior Vice President of the Bank from January, 2005, until July, 2006, at which time he became an Executive Vice President and the Banks Chief Accounting Officer.
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15
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Name
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Age
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Position
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J. Scott Cochran
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49
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Our Executive Vice President since April, 2007, and President of the Western Division of the Bank since October, 2011. Mr. Cochran served as President of the
Mississippi Division of the Bank from April, 2007, to October, 2011; he served as Administrative Officer of the Banks Corporate Banking Division from March, 2005, to April, 2007. Prior to March, 2005, he served as Senior Commercial Lending
Officer of the Bank.
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Stephen M. Corban
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57
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Our Executive Vice President and General Counsel since July, 2003; he has also served as Senior Executive Vice President and General Counsel of the Bank since
July, 2003. Mr. Corban was a partner in the law firm Mitchell, Voge, Corban, and Hendrix LLP from 1998 until June, 2003.
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James W. Gray
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56
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Our Executive Vice President since February, 2003; he has also served as Senior Executive Vice President of the Bank since June, 2005. Mr. Gray has served as
Chief Revenue Officer of the Bank since October, 2011. He served as Chief Information Officer of the Bank from March, 2006, to October, 2011, and was Strategic Planning Director from January, 2001, until March, 2006. Prior to January, 2001, he
served as the Banks Chief Operations Officer.
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Stuart R. Johnson
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59
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Our Executive Vice President since February, 2003, and Treasurer since April, 2012. From April, 1996, until March, 2012, he served as our Chief Financial
Officer. Mr. Johnson has served as Senior Executive Vice President of the Bank since June, 2005 and as Cashier and Chief Financial Officer of the Bank since April, 1996, serving together with Mr. Chapman as Chief Financial Officer of the Bank since
2011.
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Harold H. Livingston
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64
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Our Executive Vice President since February, 2003, and Senior Executive Vice President and Chief Credit Officer of the Bank since June, 2005. He served as
Executive Vice President and Chief Credit Officer form January, 2002, until June, 2005. He served as Senior Vice President from January, 1983, until April, 1996.
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Michael D. Ross
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48
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Our Executive Vice President since September, 2007, and President of the Eastern Division of the Bank since October, 2011. From September, 2007, until
October, 2011, he served as President of the Alabama Division of the Bank.
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C. Mitchell Waycaster
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54
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Our Executive Vice President since February, 2003, and the Senior Executive Vice President since June, 2005. He has served as Chief Administrative Officer of
the Bank since April, 2007. Mr. Waycaster served as President of the Mississippi Division of Renasant Bank from January, 2005, to April, 2007; previously Mr. Waycaster served as Executive Vice President and Director of Retail Banking of the Bank
from 2000 until December, 2004.
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W. Mark Williams
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50
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Our Executive Vice President since July, 2010; he has also served as Senior Executive Vice President and Chief Information Officer of the Bank since October,
2011. Mr. Williams served as President of the Georgia Division of the Bank from July, 2010, to October, 2011; he served as the Banks Director of Credit Administration from March, 2008, to July, 2010. From March, 2002, until March, 2008, Mr.
Williams served as the Banks Community Bank Performance Lending Support Office.
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COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis section, or CD&A, describes the Companys compensation program for our
named executive officers, or NEOs. Generally speaking, under applicable SEC rules each person who served as our principal executive officer and our principal financial officer during 2012, plus our three most highly-compensated executives for 2012
other than our principal executive and principal financial officers, are our NEOs. Our NEOs for 2012 are Mr. McGraw, Mr. Chapman, Mr. Johnson, Mr. Hart, Mr. Waycaster and Mr. Ross. As more fully described below, our
compensation committee is charged with establishing, reviewing and administering our executive compensation program, including making recommendations to the board about the compensation of our named executive officers. Except as may be limited by
applicable law, stock exchange rules and its charter, the compensation committee may delegate its authority to the extent it deems necessary or appropriate. Responsibility for the ministerial or day-to-day administration of our executive
compensation program has been delegated to officers of the Bank.
16
Who is responsible for determining executive compensation?
The compensation committee recommends to our full board the amount and type of compensation for our NEOs
and our directors. The compensation committee consists of Frank B. Brooks, John M. Creekmore, Neal A. Holland, Jr., J. Niles McNeel and Albert J. Dale, III, who is the chairman (T. Michael Glenn was a member of this committee until his resignation).
Each member of the compensation committee is an independent director under the Nasdaq Marketplace Rules. Each member is also a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. The
compensation committee meets with the frequency necessary to perform its duties and responsibilities. The committee met a total of five times during 2012.
The compensation committee has adopted a written committee charter that details its authority, powers and responsibilities, a copy of which is available at www.renasant.com, by clicking on Corporate
Overview, and then Governance Documents, and then Compensation Committee Charter. The committee periodically reviews the charter and makes appropriate revisions.
The compensation committee usually determines its recommendations for our NEOs compensation for an upcoming year at
its December meeting. At this meeting, the committee evaluates the performance of our NEOs during the past year and recommends adjustments to base salaries and individual grants of stock options and awards of restricted stock to be made for the
upcoming year, including any performance objectives that must be satisfied as a condition of any grant or award. In addition, the committee determines the amount of our NEOs annual cash bonuses for the immediately completed fiscal year and, to
the extent any equity compensation for that year was contingent on the attainment of performance goals, determines whether and to what extent the goals have been satisfied.
Recommendations for our NEOs base compensation, grants and awards for our 2012 fiscal year were made at the
compensation committees December, 2011, meeting and approved by the board at its January, 2012, meeting.
Role of Our Officers.
Our executive officers compile and provide information, make recommendations, and assist in
the management and administration of our executive compensation plans. Their responsibilities may include, but are not limited to, the following:
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Recommending pay levels and option grants and restricted stock awards for key executive officers, other than our chief executive officer;
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Recommending changes to ensure that our compensation programs remain competitive and aligned with our objectives; and
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Providing information and data to the committee, including, but not limited to: (1) information concerning Company and individual performance;
(2) information concerning the attainment of our strategic objectives; (3) the common stock ownership of each executive and his option holdings; (4) information about equity compensation plan dilution; (5) quantification of all
forms of compensation payable to our executives; and (6) peer group compensation and performance data.
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Our executive officers may attend meetings at the request of the committee, except that Mr. McGraw is not present during the deliberations of his compensation. A portion of each of the five meetings
held during 2012 was in executive session during which none of our executive officers was present.
Using Compensation
Consultants
. For 2012, the compensation committee retained Pearl Meyer & Partners, LLC (Pearl Meyer) to provide advice regarding the amount and form of compensation for our NEOs. Among other matters, Pearl Meyer developed
market values for the salaries, bonuses and long-term incentives we pay or provide to our executive officers, including an analysis of the salaries, bonuses and long-term incentives paid by our peer group. The committee used this information to
assess the competitiveness of our pay practices for this group.
In connection with its retention of Peal
Meyer, the compensation committee assessed whether Pearl Meyer was independent of the Company and concluded that it was. In addition, the compensation committee determined that Pearl Meyers services to it did not create any conflicts of
interest among Pearl Meyer, the Company or any member of the compensation committee.
What are
the objectives of our compensation program?
The fundamental purpose of our executive compensation program
is to assist us in achieving our financial and operating performance objectives. Specifically, our compensation program has three basic objectives:
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To attract, retain and motivate our executive officers, including the named executive officers;
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To reward executives upon the achievement of measurable corporate, business unit and individual performance goals; and
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To align each executives interests with the creation of long-term shareholder value, without encouraging excessive risk taking.
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What are the specific elements of the compensation program, and what are they
intended to address and reward?
Our compensation program consists of five elements:
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Base salary
: This element is intended to directly reflect an executives job responsibilities and his value to the Company; we also use
this element to attract and retain our executives and, to some extent, reward each executive for his individual efforts in furthering our strategic goals.
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Annual short-term cash incentives
: The annual cash bonus is one of the performance-based elements of our compensation; it is intended to
motivate our executives and to provide a current or immediate reward for short-term (annual) measurable performance. Our cash bonus is paid based on the achievement of measureable performance goals; as a general matter, we do not pay discretionary
bonuses.
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Equity-based incentives
: Grants of stock options and awards of restricted stock are the most important methods we use to align the interests
of our named executive officers with the interests of our shareholders; they are also another element of performance-based compensation, which rewards measurable performance both on a long-term basis (stock options) and on a short-term basis
(restricted stock).
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Perquisites, welfare benefits and retirement plans
: These benefits and plans are intended to attract and retain qualified executives by
ensuring that our compensation program is competitive and provides an adequate opportunity for retirement savings; to a limited degree these programs tend to reward long-term service and loyalty to the Company.
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Change in control arrangements:
These arrangements provide a form of severance that is payable in connection with a change in control of the
Company. They are primarily intended to align the interests of our executives with our shareholders by providing a financial transition in the event of a separation from employment in connection with or following a change in control.
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Do we benchmark total compensation or any element of
compensation?
No. We do not believe it is appropriate to determine total compensation, or any element of
compensation, based primarily on benchmarking, which is the practice of setting compensation (or justifying the level of compensation) based upon the compensation of similarly-situated executives at other companies similar in size, industry and
other characteristics. We do, however, review information about compensation practices at similar companies to ensure that our compensation remains at competitive and responsible levels. In 2012, the peer group we used for these limited purposes
included 21 publicly-traded financial institutions located primarily throughout the southeastern United States, listed below. The following table provides information about the demographics of this peer group:
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Demographic
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Range
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Median
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Total assets
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$2.7 billion $12.1 billion
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$
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4.4 billion
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Market value of stock
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.36 billion 2.7 billion
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.8 billion
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Net income
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26 million 146 million
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58 million
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Peer group companies: BancFirst Corporation; Bank of the Ozarks, Inc.; Capitol Federal Financial, Inc.;
City Holding Company; Community Trust Bancorp, Inc.; First Financial Bankshares, Inc.; Home BancShares, Inc.; Iberiabank Corporation; Old National Bancorp; Pinnacle Financial Partners, Inc.; Prosperity Bancshares, Inc.; Republic Bancorp, Inc.; SCBT
Financial Corporation; Simmons First National Corporation; Southside Bancshares, Inc.; State Bank Financial Corporation; Texas Capital Bancshares, Inc.; Trustmark Corporation; United Bankshares, Inc.; ViewPoint Financial Group, Inc.; WesBanco, Inc.
How are the relative amounts of each element of compensation determined?
An NEOs total compensation is based on the compensation committees and the boards judgment regarding
the NEOs value to the Company, his past performance and his ability to help us achieve our financial and operating performance objectives. The committee does not use a specific formula to determine the amounts of each element of an NEOs
total compensation. Instead, the committee evaluates the total compensation proposed to be paid to each executive and makes individual compensation recommendations that provide for significant exposure to equity, a substantial performance-based
component and an appropriate mix of short-term and long-term rewards.
The committee has not adopted specific
stock ownership or holding guidelines that would affect its recommendations. Instead, in determining whether compensation should be paid in the form of our common stock or cash (both overall and with respect to performance-based compensation in
particular), the committee considers with respect to each executive: (1) amounts accumulated and payable in cash from our retirement plans; (2) amounts to be paid as cash severance under employment or change in control agreements; and
(3) current holdings of our common stock. For the 2012 fiscal year, an average of 14.70% of our NEOs total compensation was paid in the form of equity, as stock options and restricted stock.
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As to how much of each executives aggregate compensation should be
performance-based, the compensation committee attempts to create meaningful incentives that are intended to motivate our NEOs to achieve our financial and operating objectives while maintaining a reasonable level of compensation even if the
performance goals are not satisfied. The committee also considers the level of risk-taking that the performance-based compensation might encourage.
Finally, as to the balance between short-term and long-term rewards, the committee does not use a fixed percentage. Instead, the committee considers the various short-term and long-term goals that have
been set for the Company and the particular executives ability to impact such goals.
What
percentage of our named executive officers total compensation was subject to the attainment of performance goals?
Cash bonuses and restricted stock awards are subject to the attainment of short-term performance goals. The following table illustrates the percentages of each NEOs total compensation subject to
performance goals for the 2012 fiscal year; the percentages assume that target performance was achieved.
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Named
Executive Officer
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Performance Pay as
Percentage of 2012 Fiscal
Year Total
Compensation
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E. Robinson McGraw
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38.47
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%
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Kevin D. Chapman
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30.25
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%
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Stuart R. Johnson
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7.71
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%
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R. Rick Hart
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20.58
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%
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C. Mitchell Waycaster
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32.14
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%
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Michael D. Ross
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32.66
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%
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The committee concluded that these levels of performance-based compensation are
appropriate to align the interests of our NEOs with the Companys objectives, but are unlikely to motivate an NEO to take risks that might expose us to adverse consequences. The committee considers options as a form of longer-term performance
based compensation. However, since the vesting of options is based on service and not subject to the attainment of short-term performance goals, options are not included in the above percentages.
How have the results of the shareholder advisory vote on our executive compensation program affected our
decisions with respect to compensation?
At the 2011 annual meeting, as disclosed in our Current Report on
Form 8-K filed with the SEC on April 22, 2011, our shareholders overwhelmingly adopted a nonbinding resolution approving the compensation paid to our executive officers. Approximately 14.5 million votes (or about 95.7% of all votes cast)
were cast in favor of adopting this resolution, while only about 500,000 votes were cast against the resolution (there were also 160,000 abstentions). The compensation committee and the board consider this vote to be an endorsement of our
compensation philosophy, including our balance between cash and equity and between performance-based and non-performance-based compensation. Based upon the shareholders vote, the compensation committee believes that significant modifications
to our executive compensation program are not necessary at this time, although both the committee and the board intend to monitor our executive compensation program to ensure that it continues to further the programs objectives.
At the 2011 annual meeting, a majority of our shareholders recommended that the nonbinding shareholder advisory vote on
our executive compensation occur every three years. The next shareholder advisory vote will be held in 2014.
How is base salary determined and adjusted?
Considerations.
Unless adjustments are fixed under
an employment or similar agreement, the committee reviews and recommends the adjustment of base salary annually. Adjustments are based upon a review of a variety of factors, including the following:
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Individual, Company, Bank and division performance, measured against quantitative and qualitative goals;
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Duties and responsibilities; and
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Compensation paid by our peer group.
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2012 Fiscal Year Decisions.
The 2012 base salaries of our named executive officers are included in the Summary Compensation Table that follows this section. For 2012, base salaries increased an
average of $18,192, or an average of 5.97%, over the base salaries paid in 2011. In determining the increase in our NEOs base salary, other than Mr. Hart,
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the committee considered the Companys performance in relation to prior year results, whether and to what extent the Companys performance goals were achieved and the Companys
performance in relation to our peers and concluded that the Company had a successful year, especially in light of the economic climate. Additionally, the committee noted the contribution of each NEO to the Companys performance results. For
2012, Mr. Hart received the 5% annual increase provided in his employment agreement.
How
is the annual cash bonus determined?
Considerations.
Our annual bonus is made through our
Performance Based Rewards Plan, or our Bonus Plan, under which annual cash bonuses may be paid to all of our executives. Each year, the annual bonus for our named executive officers is determined using the following process:
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Before or at the beginning of each fiscal year, the compensation committee: (1) determines the performance goals for the year, which may relate
to our performance, Bank or division performance, the performance of each executive, or a combination thereof; (2) sets threshold, target and superior levels of performance; and (3) determines bonus amounts, expressed as a percentage of
base compensation, payable upon the attainment of each performance level.
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At the end of each fiscal year, the committee determines actual performance and the amount of the bonus payable to each executive. If actual
performance falls between performance levels, the committee prorates the amount to reflect partial performance. No incentive is paid if threshold levels are not attained. The board of directors reviews and approves (or modifies) the committees
recommendations regarding bonus payments.
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After the determination of bonus amounts, the compensation
committee may, in its discretion, adjust the amount to ensure that it accurately reflects performance.
2012 Fiscal Year Goals.
The committee adopted the performance goals below to reflect performance at threshold,
target and superior levels for our 2012 fiscal year, which it believed were measures likely to result in enhanced shareholder value (amounts in parenthesis represent negative growth goals):
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Company
Performance Goal
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Weight
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Threshold
Performance Level
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Target
Performance Level
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Superior
Performance Level
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Growth in diluted
earnings per share
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60% of incentive
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(.98%) growth
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3.92% growth
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8.82% growth
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Growth in net revenue
per share
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40% of incentive
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(.80%) growth
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(.11%) growth
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.52% growth
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As a percentage of each executives base salary, the committee also determined that
the amounts below would be paid for performance at the designated threshold, target, and superior levels. The committee believed that these amounts were appropriate in light of the corresponding level of Company growth required to achieve each goal.
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Named
Executive Officer
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Threshold
Performance Level
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Target
Performance Level
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Superior
Performance Level
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E. Robinson McGraw
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32.5% of base salary
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65% of base salary
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130% of base salary
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Each of the other NEOs
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15% of base salary
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30% of base salary
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60% of base salary
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2012 Fiscal Year Performance.
In determining the performance goals for 2012, the committee
recognized that our diluted earnings per share and net revenue per share were likely to decline from 2011 on account of the significant, one-time gains we recognized in 2011 as a result of our acquisition of certain assets and liabilities of
American Trust Bank in an FDIC-assisted transaction and the acquisition of the Alabama trust operations of RBC Bank. As a result, certain performance goals for 2012 were established which could reward negative growth. In the
committees opinion, negative growth was meaningful in light of the significance and one-time nature of the gains recorded in these transactions. For 2012, our diluted earnings per share increased 3.92%, which was at target level, while our net
revenue per share increased 3.95%, which exceeded superior level. Substantially all of our executives received payments determined under the formula; the committee also exercised negative discretion, decreasing the formula amount if it
determined that an individuals contributions to the Companys performance did not support full (or any) payment.
How is equity compensation determined and paid?
Considerations.
Equity compensation has been granted and awarded under our 2001 Long-Term Incentive Plan, or the
2001 LTIP, in the form of stock options and restricted stock. The 2001 LTIP expired in October, 2011, and was replaced with our 2011 Long-Term Incentive Compensation Plan, or the 2011 LTIP (the 2001 LTIP and the 2011 LTIP are sometimes referred to
as the LTIPs). All 2012 grants and awards of equity compensation were made under the 2011 LTIP. Except for the authorization for our non-employee directors to receive grants and awards from the plan, including an annual aware of shares of our stock
to these directors, and the inclusion of a recovery or clawback policy, the 2001 LTIP and the 2011 LTIP have substantially the same terms.
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The committee uses equity compensation to create both short-term and
long-term incentives that align the interests of our executives with the interests of our shareholders in a manner that does not encourage excessive risk-taking. The committee uses restricted stock to provide immediate alignment of executive and
shareholder interests. We believe this alignment occurs because our executives become shareholders from the date of award and thus immediately benefit from increases in our stock price. The committee uses options to incent longer-term performance
because options have value only to the extent our share price increases during the exercise period.
In
determining the overall amount of equity compensation, as well as the relative amounts of stock options and restricted stock to be granted and awarded, the committee considers the following criteria as to each named executive officer:
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The position, responsibility and prior performance of each executive;
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The executives ability to affect corporate performance on a long-term and short-term basis;
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The value of grants or awards in relation to other elements of total compensation; and
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The number of shares of our common stock that he currently owns, whether directly or beneficially.
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The committees practice is to recommend grants or awards for a fiscal year at the end of the immediately preceding
fiscal year or in January of such fiscal year, irrespective of whether or not we are in possession of material non-public information at that time. Ordinarily, our board reviews the recommendations and makes the final grants and awards early in each
fiscal year. The committee believes that the practice of making grants and awards about the same date each year precludes any inference that we are attempting to manipulate the timing of our stock option grants and restricted stock awards to take
advantage of non-public information. We do not backdate options or grant options retroactively.
Options.
Under our LTIPs, the exercise price for stock options cannot be less than fair market value, which is defined as the closing sales price of our common stock on the date immediately preceding the grant date. Unless the board otherwise
provides, options vest and become exercisable in equal installments over a three-year period, and lapse or expire ten years after the grant date. Unless otherwise provided by the board, the vesting of options is accelerated and an executives
options remain exercisable for not less than six months following a change in control of the Company.
Restricted Stock.
The committee utilizes both time-based and performance-based restricted stock. Performance-based
restricted stock awards to our named executive officers are typically subject to a one-year service vesting requirement and the attainment of performance goals during the one-year period. Shares are awarded in increasing amounts for threshold,
target and superior performance, using the same performance goals applicable to our annual cash bonus. Shares in the target amount are issued at the beginning of each fiscal year. The issued shares may not be sold, pledged or otherwise transferred
until the end of the fiscal year. The target shares are subject to forfeiture if threshold performance goals or the service condition is not satisfied; the number of target shares may be increased or decreased at the end of the fiscal year for
actual performance in relation to the target level. Unless otherwise provided by the board, the target shares vest, free of restrictions, in the event of a change in control of the Company. Time-based restricted stock awards are subject to vesting
based on service requirements established by the committee. Recipients of restricted stock awards are entitled to dividend and voting rights with respect to the target shares during the service vesting period.
Recovery Policy.
The 2011 LTIP includes a recovery or clawback provision that applies to any grant or
award made subject to the attainment of performance goals. If we are required to restate our financial statements or other financial measures, the committee possesses the authority to reduce, forfeit, recover or clawback all or any portion of an
incentive that was awarded based upon the statements or measures, whether or not the incentive is then vested or otherwise free of forfeiture restrictions. The committee possesses the authority to limit any clawback to our executive and accounting
officers and to the portion of the incentives granted, awarded or vested in excess of the amount that would have been granted, awarded or vested based upon the restated results.
2012 Fiscal Year Decisions.
The Summary Compensation Table and the Grants of Plan Based Awards table, which follow
this discussion, each provide specific information about the options granted and restricted stock awarded for the 2012 fiscal year and the number of shares of restricted stock issuable in the event of threshold, target or superior performance. With
respect to the options granted, the committee concluded that the number and three-year service-based vesting conditions, which were substantially consistent with our prior practice, provided an appropriate incentive not directly contingent upon the
Companys short-term performance or current market conditions.
The 2012 performance criteria applicable
to the restricted stock awards were the same as the performance criteria applicable to our annual cash bonuses, summarized above. Based upon our performance, which was between threshold
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and target with respect to diluted earnings per share and exceeded superior with respect to net revenue per share, an aggregate of 25,800 shares of common stock were awarded to our NEOs for 2012.
Mr.
McGraw was also awarded 7,500 shares of time-based restricted stock with a one-year service requirement.
How are perquisites and welfare and retirement plans integrated into our compensation program?
Perquisites
. Perquisites comprise a small part of our total compensation package. The main perquisites we provide
are the payment of country club dues and an automobile allowance or use of a company-owned automobile. Although these perquisites involve incidental personal value, we believe both are necessary to advance our business purposes. The compensation
committee annually reviews the level of perquisites that our named executive officers receive to ensure that the amount of perquisites remains at a reasonable level.
Welfare Benefits
. We maintain a number of broad-based benefit plans that are available to all of our employees,
including group medical, dental and life insurance plans, some of which are contributory. Our NEOs may participate in these plans.
Retirement Benefits
. We offer our eligible employees, including our NEOs, participation in a tax-qualified defined contribution 401(k) plan, which allows savings for retirement on a tax deferred
basis. We provide matching contributions, up to 4% of compensation deferred, and we contribute an additional 5% of each eligible employees plan compensation and an additional 5% of plan compensation in excess of the Social Security wage base,
subject to certain limits imposed under the plan and applicable law. Our contributions are subject to the completion of a six-year incremental vesting period. The plan provides for the distribution of account balances following separation from
employment, generally in the form of a single sum. The Summary Compensation Table includes information about our contributions for the benefit of our NEOs in the 2012 fiscal year.
We also sponsor a noncontributory tax-qualified defined benefit or pension plan. Prospective benefit accruals under the
plan ceased as of December 31, 1996. Messrs. McGraw, Johnson and Waycaster have vested benefits accrued under the plan. Messrs. Chapman, Hart and Ross are not eligible to and did not participate in the plan. Vested plan benefits are paid
monthly at either early or normal retirement. Mr. McGraw has satisfied the conditions for normal retirement because he has attained age 65. Mr. Johnson has satisfied the conditions for early retirement because he has attained age 55 and
completed 15 years of service. As of December 31, 2012, Mr. McGraws annual retirement benefit was $49,983, while Mr. Johnsons annual early retirement benefit was $15,813. The Pension Benefits table following this section
illustrates the value of benefits accrued under the plan.
We also maintain an ESOP, under which employer
contributions are held and invested in our common stock. This plan was amended in April, 2002, to provide that no additional participants would be added and no further employer contributions would be made. Mr. McGraw, Mr. Waycaster and
Mr. Johnson have vested account balances under the ESOP that will be distributed following separation from employment.
We also maintain two voluntary deferred compensation arrangements for our executives, the DSU Plan, in which our directors may also participate, and the Executive Deferred Income Plan, or the
Deferred Income Plan. The Nonqualified Deferred Compensation Table that follows this section reflects voluntary deferrals made to both of these plans made during our 2012 fiscal year. For each plan, deferral elections are made annually,
before the beginning of each year.
As described earlier, amounts deferred under the DSU Plan are invested in
units representing shares of our common stock and credited with dividend equivalents as and when dividends are paid on our shares. Units are allocated to each participants account based on a quarterly average market price. All cash
compensation is eligible for deferral, subject to the reservation of an amount necessary to satisfy applicable withholding obligations, any deferrals under our 401(k) plan and insurance premiums and similar payroll deductions. Account balances are
distributed in the form of shares of our common stock following separation from employment.
Under the
Deferred Income Plan, each executive annually elects to defer his base salary, subject to the requirement that base salary be currently paid in an amount sufficient for the payment of applicable insurance premiums, withholdings and similar payroll
deductions. Deferred amounts are credited to a bookkeeping account and notionally invested in accordance with the instructions of each executive from among designated investment alternatives, including an interest rate investment that is credited at
100% of the Moodys Rate, which was a weighted average rate of 4.35% for 2012. The Moodys Rate investment was the only investment alternative selected by our NEOs for 2012 deferrals. Amounts deferred before 1989 can remain invested in a
notional interest rate investment credited at 130% of the Moodys Rate, which was a weighted average interest rate of 5.65% for 2012. Benefits are equal to each participants account balance and are paid upon separation from employment.
Distributions are made in the manner elected by each participant at the time of deferral, but not more than 15 annual installments. Participants in the plan as of December 31, 2006, including Mr. McGraw, Mr. Johnson and
Mr. Waycaster, may receive a preretirement death benefit that is greater than their account balances.
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Mr. Hart remains a participant in two supplemental executive retirement
plans, or SERPs, adopted in connection with our merger with Capital. The SERPs provide for the payment of 15 equal annual installments upon his retirement at age 65 or death. The aggregate annual benefit payable from the SERPs is
$155,000 with a 3% annual cost of living adjustment, which accrues and vests upon his death, attainment of age 65 or his involuntary separation from employment without cause, constructive termination or in the event of a change in control.
Have we entered into employment, severance, change in control or other agreements with our
named executive officers?
Yes. We have entered into employment agreements with Messrs. McGraw and Hart,
which include change in control arrangements. We have entered into change in control agreements with Messrs. Chapman, Johnson, Waycaster and Ross. These individuals are our most senior executives and play an integral role in our success. We believe
these arrangements operate to create a retention device and to ensure that personal concerns do not impede transactions that may be in the best interests of our shareholders, such as a sale of Renasant to a third party. The material terms of these
arrangements are described in the Potential Payments Upon Termination or Change in Control section below.
How do tax, accounting and other statutes or regulations affect the compensation paid to our named executive officers?
Section 162(m)
. Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, limits to $1 million in any tax year the deduction a company may claim for
compensation paid to each of its chief executive and four other highest paid officers. For purposes of calculating the $1 million limit, compensation made subject to certain performance-based conditions may be excluded. Our base salary and annual
cash bonuses are subject to the Section 162(m) limit because they are not considered performance-based. Options granted and restricted stock awarded under our equity incentive plan may be structured as performance-based compensation that is not
subject to the limit, or the committee, in its discretion, may grant or award equity compensation that is not performance-based. The committee generally intends that amounts paid to our NEOs will be deductible and makes grants or awards of
equity-based compensation consistent with this intent.
Other Statutes, Regulations and Authorities
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Section 409A of the Code governs the taxation of deferred compensation. The rules apply to our deferred compensation plans, the SERPs, and certain payments and benefits under our employment and change in control agreements. We believe we have
operated our deferred compensation plans and arrangements in a manner consistent with the provisions of Section 409A and have timely amended our affected agreements and plans.
Topic 718.
Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock
Compensation (Topic 718), establishes accounting requirements for share-based compensation to employees and carries forward prior guidance on accounting for awards to non-employees. Under Topic 718, we are required to recognize
compensation expense for all share-based payments to our employees, including our named executive officers.
What are our policies and practices regarding the management of risks arising from our compensation program?
As discussed in this CD&A, the major components of our compensation program consist of base salary, annual short-term cash incentives and short- and long-term equity incentives. In our view, our
short- and long-term incentive programs, whether cash or equity, are the components most susceptible to creating risk that could have a material adverse effect on us. We also incent the majority of our non-executive officers through our incentive
programs, with both short-term cash incentives and equity incentives based on Company-wide earnings enhancement.
We recognize that under any incentive plan there is some risk that employees may attempt to manipulate payments by engaging in excessive risk taking. We believe that the structure of our incentives
mitigates this risk in the following ways:
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Company-wide performance metrics are used to measure performance, and incentive compensation is paid on the basis of such performance. In
particular, incentives for our lending employees are based on these metrics. This ensures that the outcome of any incentive is not likely to be affected by an employees own excessive risk taking.
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Multiple performance metrics are used, making it more difficult to manipulate results.
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Threshold, target and superior performance levels for incentives are based on a budget derived from balance sheet or product growth (i.e. loans,
deposits, margins, credit quality, fee income, expense control) projected by executive management, with the approval of the compensation committee. The projected balance sheet or product growth is based on conservative community banking models with
the necessary approval and monitoring processes to support this model.
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The committee has retained and exercised the authority to exercise discretion to reduce the amount of incentive compensation.
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In the fourth quarter of 2012, executive management and the compensation
committee undertook a comprehensive evaluation of our compensation policies and practices, including our incentive programs, to determine whether any policy or practice creates risk reasonably likely to have a material adverse effect on us.
Executive management and the compensation committee concluded that our compensation practices, including the incentive programs, did not create any risk reasonably likely to have such a material adverse effect on us, for the following reasons:
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The incentive components of our compensation structure are balanced and designed to align our structure with short- and long-term shareholder
interests;
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Base salary is the largest component of our compensation. Because base salary is a fixed amount that is inherently not subject to manipulation it
lessens the possibility that an employee will focus on incentives;
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All of our incentives are capped at a percentage of base salary, which mitigates against exposure to excessive risk;
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For lenders who participate in our incentive programs, loan quality thresholds must be met as a condition to payment. Our loan quality thresholds
are objective measures consistent with our overall goals regarding the performance of our loan portfolio, which are not readily subject to manipulation; and
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We have a code of ethics and business conduct applicable to all of our employees. We also have an ethics hotline which provides the caller a
confidential means to report suspected fraud directly to our chief risk officer and the chairman of the audit committee. We have also established internal controls that are designed to alert us prior to any action by an employee that might expose us
to an excessive risk. We believe these measures help to create an atmosphere that discourages excessive risk taking.
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What are the compensation committees conclusions with respect to the 2012 fiscal year?
The compensation committee has concluded that (1) the compensation paid to our NEOs for our 2012 fiscal year was
reasonable and was not excessive and (2) their actual compensation reinforced the primary objectives of our compensation program assisting the company in achieving its financial and operating performance objectives. This conclusion is
based upon a number of factors, including the following:
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Our financial performance, in particular considering the economic climate;
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That our financial performance occurred while we expanded our footprint in new and existing markets;
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The amount of our NEOs total compensation made subject to the achievement of performance goals; and
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The total compensation levels for our NEOs are comparable to the compensation levels in our peer group.
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