SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

 

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Preliminary Proxy Statement

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Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

BancFirst Corporation

(Name of Registrant as Specified In Its Charter)

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BancFirst Corporation

101 North Broadway

Oklahoma City, Oklahoma 73102

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

DATE

May 24, 2018.

 

 

 

TIME

9:00 a.m., local time.

 

 

 

PLACE

Skirvin Hilton Hotel, 1 Park Avenue (the corner of Park Avenue and Broadway), Oklahoma City, Oklahoma 73102.

 

 

 

ITEMS OF BUSINESS

1.   

To elect the 21 directors nominated by our board of directors and named in the accompanying proxy statement;

 

 

 

 

2.  

To ratify the appointment of BKD, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018; and

 

 

 

 

3.  

To transact such other business as may properly come before the meeting or any adjournments or postponements thereof.

 

 

 

RECORD DATE

In order to vote, you must have been a shareholder at the close of business on April 6, 2018.

 

 

 

PROXY VOTING

Whether or not you attend the meeting in person, it is important that your shares be represented and voted.  Please vote by completing, signing and dating your proxy card and returning it as soon as possible in the enclosed, postage−paid envelope. This proxy is revocable. You can revoke this proxy at any time prior to its exercise at the meeting by following the instructions in the proxy statement.

 

 

 

 

By Order of the Board of Directors:

 

 

 

 

Randy Foraker

Secretary

 

Oklahoma City, Oklahoma

April 10, 2018

PLEASE SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE.

 


 

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BANCFIRST CORPORATION

2018 ANNUAL MEETING

PROXY STATEMENT

TABLE OF CONTENTS

 

 

Page

About the Annual Meeting

1

How Do I Vote?

4

Matters to be Voted On

5

Proposal 1:  Election of 21 Directors

5

Proposal 2:  Ratification of Selection of Independent Registered Public Accounting Firm

6

Corporate Governance Principles and Board Matters

6

Code of Ethics

7

Director Independence

7

Director Nominees

8

Directors of BancFirst Corporation

8

Board Structure and Committee Composition

13

Board Leadership Structure and Risk Oversight

13

Executive Committee

14

Audit Committee

14

Compensation Committee

14

Independent Directors’ Committee

14

Board Issues Committee

15

Senior Loan Committee of the Bank

15

Asset/Liability Committee of the Bank

15

Administrative Committee of the Bank

15

Shareholder Communications with the Board

15

Compensation Committee Report

16

Compensation Committee Interlocks and Insider Participation

16

Audit Committee Report

16

Transactions with Related Persons

17

Management

18

Executive Compensation

19

Compensation Discussion and Analysis

19

Objectives of our Compensation Program

19

Executive Participation in Committee Discussions

19

Executive Compensation Program

20

Base Salary

20

Annual Performance-Based Incentive Pay

20

Long-Term Awards

23

Benefits Available to All Employees

24

Perquisites

24

Employment Arrangements

24

Tax and Accounting Information

24

Summary Compensation Table

25

Grants of Plan-Based Awards

26

Outstanding Equity Awards at Fiscal Year-End

26

Option Exercises

26

Equity Compensation Plan Information

26

Supplemental Retirement Benefits

27

Potential Payments upon Termination or Change-in-Control

27

Pay Ratio Disclosure

27

Director Compensation

27

Stock Ownership

30

Certain Beneficial Owners

30

Directors and Management

30

Section 16(a) Beneficial Ownership Reporting Compliance

32

Proposals for the 2018 Annual Meeting of Shareholders

32

Other Matters

32

Appendix A: Audit Committee Charter

A-1

Appendix B: Compensation Committee Charter

B-1

Appendix C: Independent Directors’ Committee Charter

C-1

 

 

 


 

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BancFirst Corporation

101 North Broadway

Oklahoma City, Oklahoma 73102

 

PROXY STATEMENT

 

We are providing these proxy materials in connection with the solicitation by the Board of Directors of BancFirst Corporation of proxies to be used at our 2018 Annual Meeting of Shareholders.  In this proxy statement, we refer to the Board of Directors as the “Board”, to BancFirst Corporation as “we,” “us,” “our” or the “Company” and to our wholly-owned subsidiary, BancFirst as the “Bank.”  This proxy statement, the accompanying proxy card or voter instruction card and our 2017 Annual Report on Form 10−K were first mailed to shareholders on or about April 20, 2018.  This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the Annual Meeting.  Please read it carefully.

ABOUT THE ANNUAL MEETING

What matters will be voted on at the Annual Meeting?

You will be voting on:

 

Proposal 1: To elect the 21 directors nominated by our board of directors and named in this proxy statement;

 

Proposal 2: To ratify the selection of BKD, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018; and

 

Such other business as may properly come before the meeting or any adjournments or postponements thereof.

What are the Board’s recommendations?

The Board recommends a vote:

 

for the election of the 21 directors nominated by our board of directors and named in this proxy statement; and

 

for the ratification of the selection of BKD, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018.

Who is entitled to vote at the Annual Meeting?

The Board set April 6, 2018 as the record date for the Annual Meeting (the “record date”).  You are entitled to vote if you were a shareholder of record of our common stock as of the close of business on April 6, 2018.  Your shares can be voted at the Annual Meeting only if you are present in person or represented by a valid proxy.

How many votes do I have?

You will have one vote for each share of our common stock you owned at the close of business on the record date, provided those shares are either held directly in your name as the shareholder of record or were held for you as the beneficial owner through a broker, bank or other nominee.

What is the difference between holding shares as a shareholder of record and beneficial owner?

Most of our shareholders hold their shares through a broker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

Shareholder of Record. If your shares are registered directly in your name with our transfer agent, BancFirst Trust and Investment Management, you are considered the shareholder of record with respect to those shares, and these proxy materials are being sent directly to you by the Company.  As the shareholder of record, you have the right to grant your voting proxy directly to us or to vote in person at the Annual Meeting.  If this is the case, we have enclosed a proxy card for you to use.

Beneficial Owner. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name,” and these proxy materials are being forwarded to you by your broker, bank or

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nominee, who is considered the shareholder of record with respect to those shares.  As the beneficial owner, you have the right to direct your broker, bank or nominee on how to vote and are also invited to attend the Annual Meeting.  However, since you are not the shareholder of record, you may not vote these shares in person at the Annual Meeting, unless you request, complete and deliver a proxy from your broker, bank or nominee. Your broker, bank or nominee has enclosed a voting instruction card for you to use in directing the broker, bank or nominee how to vote your shares.

What will happen if I do not vote my shares?

Shareholders of Record. If you are the shareholder of record of your shares and you do not vote by proxy card or in person at the Annual Meeting, your shares will not be voted at the Annual Meeting.

Beneficial Owners. If you are the beneficial owner of your shares, your broker or nominee may vote your shares only on those proposals on which it has discretion to vote. If no voting instructions are provided, these record holders can vote your shares only on discretionary, or routine, matters and not on non-discretionary, or non-routine, matters. Uninstructed shares whose votes cannot be counted on non-routine matters result in what are commonly referred to as “broker non-votes.”

The election of directors (Proposal No. 1) is considered a non-routine matter under the rules and regulations promulgated by Nasdaq and approved by the Securities and Exchange Commission (“SEC”). Consequently, brokers may not vote uninstructed shares on this proposal. The ratification of BKD, LLP as our independent registered public accounting firm for the fiscal year ended December 31, 2018 (Proposal No. 2) is considered a routine matter under the rules and regulations promulgated by Nasdaq and approved by the SEC. Consequently, brokers may vote uninstructed shares on this proposal, and we do not expect any broker non-votes on this proposal.

 

Abstentions and broker non-votes are treated as shares that are present for purposes of determining whether a quorum is present at the Annual Meeting. However, for purposes of determining whether a proposal is approved, abstentions and broker non-votes are tabulated separately. The effect of abstentions and broker non-votes depends on the vote required for a particular proposal. See “What vote is required to approve each proposal," below, for a description of the effect of abstentions and broker non-votes on such proposal.

If you do not give your broker voting instructions, your broker will only be entitled to vote your shares on Proposal 2.  We urge you to provide instructions to your broker, bank or other nominee so that your votes may be counted on all of these important matters.

How many votes can be cast by all shareholders?

Each share of BancFirst Corporation common stock is entitled to one vote.  There is no cumulative voting.  We had 32,708,215 shares of common stock outstanding and entitled to vote on the record date.

How many votes must be present to hold the Annual Meeting?

A majority of our outstanding shares of common stock as of the record date must be present at the Annual Meeting in order to hold the Annual Meeting and conduct business. This is called a “quorum.” Shares that are present and entitled to vote on one or more of the matters to be voted upon at the Annual Meeting are counted as present for establishing a quorum.  Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum.  If a quorum is not present, we expect that the Annual Meeting will be adjourned until we obtain a quorum.

What vote is required to approve each proposal?

Proposal 1: Election of 21 Directors

The election of directors requires the affirmative vote of the holders of at least a majority of the common stock issued and outstanding and entitled to vote. Each director nominee who receives at least a majority of the common stock outstanding will be elected as a director for the ensuing one year. Withheld votes will have the same effect as votes “against” this proposal, and broker non-votes will have no effect on the vote for this proposal.

Proposal 2: Ratification of the selection of BKD, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018

This proposal requires the affirmative vote of a majority of the shares of common stock represented in person or by proxy at the Annual Meeting and eligible to vote.  Abstentions will have the same effect as a vote “against” this proposal.

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Can I change or revoke my vote after I return my proxy card or voting instruction card?

Yes.  Even if you sign the proxy card or voting instruction card in the form accompanying this proxy statement, you retain the power to revoke your proxy or change your vote. You can revoke your proxy or change your vote at any time before it is exercised by giving written notice specifying such revocation to the Secretary of the Company.  You may change your vote by timely delivery of a valid, later-dated proxy or by voting by ballot at the Annual Meeting.  However, please note that if you would like to vote at the Annual Meeting and you are not the shareholder of record, you must request, complete and deliver a proxy from your broker, bank or nominee.

What does it mean if I receive more than one proxy or voting instruction card?

It generally means your shares are registered differently or are in more than one account.  Please provide voting instructions for all proxy and voting instruction cards you receive.

Who can attend the Annual Meeting?

All shareholders as of the record date, or their duly appointed proxies, may attend.

The Annual Meeting will be held at the Skirvin Hilton Hotel, 1 Park Avenue (the corner of Park Avenue and Broadway), Oklahoma City, Oklahoma 73102.

Who pays for the proxy solicitation and how will the Company solicit votes?

We will bear the expense of printing and mailing proxy materials.  In addition to this solicitation of proxies by mail, our directors, officers and other employees may solicit proxies by personal interview, telephone, facsimile or email. They will not be paid any additional compensation for such solicitation. We will request brokers, banks and nominees who hold shares of our common stock in their names to furnish proxy materials to beneficial owners of the shares. We will reimburse such brokers, banks and nominees for their reasonable expenses incurred in forwarding solicitation materials to such beneficial owners.

How can I access the Company’s proxy materials and annual report electronically?

The proxy statement and our 2017 Annual Report on Form 10−K are available on the BancFirst website at http://www.BancFirst.bank and the website of the Securities and Exchange Commission (“SEC”) at http://www.sec.gov.  The Company provides these documents on its website and also provides links to the SEC’s website where these reports can be obtained.  The Company’s annual report on Form 10-K for the year ended December 31, 2017 (other than the exhibits thereto), as well as copies of other filings or exhibits to filings made with the SEC, are also available without charge upon written request.  Such requests should be directed to: Randy Foraker, Executive Vice President and Secretary, BancFirst Corporation, 101 North Broadway, Oklahoma City, Oklahoma 73102.  The public may read and copy any materials that the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Is a list of shareholders available?

The names of shareholders of record entitled to vote at the Annual Meeting will be available to shareholders entitled to vote at this meeting for ten days prior to the meeting for any purpose relevant to the meeting.  This list can be viewed between the hours of 9:00 a.m. and 5:00 p.m., local time, at our principal executive offices at 101 N. Broadway, Oklahoma City, Oklahoma.  Please contact Randy Foraker, Executive Vice President and Secretary, BancFirst Corporation, 101 North Broadway, Oklahoma City, Oklahoma 73102, to make arrangements.

How do I find out the voting results?

Preliminary voting results will be announced at the Annual Meeting, and final voting results will be published within four business days of the annual meeting on Form 8-K, which we will file with the SEC.  After the Form 8-K is filed, you may obtain a copy by visiting our website, which provides links to the SEC’s website.  You may also obtain a copy by visiting the SEC’s website directly or by contacting Randy Foraker, Executive Vice President and Secretary, by calling (405) 270-1044, by writing to Mr. Foraker c/o BancFirst Corporation, 101 N. Broadway, Oklahoma City, Oklahoma 73102, or by sending an email to him at randy.foraker@bancfirst.bank.

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What if I have questions about lost stock certificates or I need to change my mailing address?

Shareholders of record may contact our transfer agent, BancFirst Trust and Investment Management, by calling (405) 270-4797 or writing to BancFirst Trust and Investment Management, P.O. Box 26883, Oklahoma City, Oklahoma 73126, to get more information about these matters.

HOW DO I VOTE?

Your vote is important.  You may vote by mail or attend the Annual Meeting and vote by ballot, all as described below.

Vote by Mail

If you choose to vote by mail, simply mark your proxy card or voting instruction card, sign and date it, and return it in the postage-paid envelope provided.

Voting at the Annual Meeting

The method or timing of your vote will not limit your right to vote at the Annual Meeting if you attend the meeting and vote in person.  However, if your shares are held in the name of a broker, bank or other nominee, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote at the Annual Meeting.  You should allow yourself enough time prior to the Annual Meeting to obtain this proxy from the holder of record.

The shares represented by the proxy cards or voting instruction cards received, properly marked, signed, dated and not revoked, will be voted at the Annual Meeting.  If you sign and return your proxy card but do not give voting instructions, the shares represented by that proxy card will be voted as recommended by the Board.  If you fail to return your proxy card, or if your shares are held in “street name” and you do not instruct your broker how to vote your shares by failing to complete the voting instruction card, the effect will be as though you cast a vote “against” Proposal 1.


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MATTERS TO BE VOTED ON

PROPOSAL 1

ELECTION OF 21 DIRECTORS

Our Board currently consists of 22 members. At the recommendation of the Independent Directors’ Committee, the Board has nominated 21 director nominees identified in this Proposal 1 to serve a one-year term, until the 2019 Annual Meeting of Shareholders and until their successors are duly elected and qualified, or until their earlier resignation or removal. For additional information about the director nominees and their qualifications, see “Corporate Governance Principles and Board Matters—Directors of BancFirst Corporation.” The nominees for the election of directors at the Annual Meeting are as follows:

 

Name

 

Age

 

 

Occupation

 

 

Year

First

Elected

Director

 

Dennis L. Brand

 

 

70

 

 

Vice Chairman, BancFirst Corporation

 

 

2000

 

C.L. Craig, Jr.

 

 

73

 

 

Private Investor

 

 

1998

 

James R. Daniel

 

 

78

 

 

Vice Chairman, BancFirst Corporation

 

 

1998

 

F. Ford Drummond

 

 

55

 

 

Owner/Operator, Drummond Ranch

 

 

2011

 

Joseph Ford

 

 

40

 

 

President, Shawnee Milling Company

 

 

2017

 

David R. Harlow

 

 

55

 

 

Chief Executive Officer, BancFirst Corporation

 

 

2017

 

William O. Johnstone

 

 

70

 

 

Vice Chairman, BancFirst Corporation

 

 

1996

 

Frank Keating

 

 

74

 

 

Partner, Holland & Knight LLP

 

 

2016

 

Dave R. Lopez

 

 

66

 

 

Former Secretary of State, State of Oklahoma

 

 

2013†

 

W. Scott Martin

 

 

68

 

 

Private Investor

 

 

2018

 

Tom H. McCasland, III

 

 

59

 

 

President, Mack Energy Co.

 

 

2005

 

Ronald J. Norick

 

 

76

 

 

Controlling Manager of Norick Investment Company, LLC

 

 

2002

 

David E. Rainbolt

 

 

62

 

 

Executive Chairman, BancFirst Corporation and BancFirst

 

 

1984

 

H.E. Rainbolt

 

 

89

 

 

Chairman Emeritus, BancFirst Corporation

 

 

1984

 

Michael S. Samis

 

 

64

 

 

Private Investor

 

 

2013

 

Darryl Schmidt

 

 

55

 

 

Chief Executive Officer, BancFirst

 

 

2017

 

Natalie Shirley

 

 

60

 

 

President and Chief Executive Officer, National Cowboy and Western Heritage Museum

 

 

2013

 

Robin Smith

 

 

46

 

 

Chief Executive Officer, WeGoLook

 

 

2017

 

Michael K. Wallace

 

 

64

 

 

President, Wallace Properties, Inc. and Mike Wallace Homes

 

 

2007

 

Gregory G. Wedel

 

 

57

 

 

Managing Partner, Wedel, Rahill and Associates, CPA’s

 

 

2014

 

G. Rainey Williams, Jr.

 

 

57

 

 

President, Marco Holding Corporation

 

 

2003

 

 

Mr. Lopez previously served as a director of the Company from 2005-2011.

Unless otherwise specified in the proxy, it is the intention of the persons named in the proxy to vote the shares represented by each properly executed proxy for the election of these nominees as directors of the Company. The nominees have agreed to stand for election and, if elected, to serve as directors. However, if any person nominated by the Board is unable or unwilling to serve, the proxies will be voted for the election of such other person or persons as the Independent Directors’ Committee and the Board may recommend.

The sections in this proxy statement entitled “Corporate Governance Principles and Board Matters—Directors of BancFirst Corporation” and “—Stock Ownership” provide certain information about each nominee based on data submitted by such persons, including the principal occupation of such person for at least the last five years and any public company directorships held by such person.

Vote Required

The affirmative vote of holders of a majority of the shares of common stock issued and outstanding and entitled to vote, is required for the election of each nominee as a director of the Company. Proxies cannot be voted for a greater number of persons than the number of nominees named.

The Board unanimously recommends a vote “FOR” the election of the nominees to the Board.  Proxies solicited by the Board will be voted for each of the nominees unless instructions to withhold or to the contrary are given.

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PROPOSAL 2

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BKD, LLP (“BKD”) was the Company’s independent registered public accounting firm for fiscal year 2017 and has been approved by the Audit Committee of the Board of Directors of BancFirst Corporation (the “Audit Committee”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018. Although ratification is not required by the Company’s certificate of incorporation, bylaws, Oklahoma law or otherwise, the Board is submitting the appointment of BKD to the Company’s shareholders for ratification because the Company values its shareholders’ views on the independent registered public accounting firm. If the Company’s shareholders fail to ratify the appointment, it will be considered as a non-binding recommendation to the Board and the Audit Committee to consider the appointment of a different firm for fiscal year 2018. Even if the appointment is ratified, the Board and the Audit Committee may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders.

Representatives of BKD are expected to attend the Annual Meeting and will have an opportunity to make a statement or to respond to appropriate questions from shareholders. BKD has advised the Company that they are independent with respect to the Company.

Pre-Approval Policies and Procedures

The Audit Committee has established a policy to pre-approve all audit services and non-audit services performed by our independent registered public accounting firm. The Audit Committee also considers whether such services are consistent with the SEC’s rules on auditor independence and considers whether our independent registered public accounting firm is positioned to provide us with effective and efficient audit services needed to properly manage risk or improve audit quality. In its review of any non-audit service fees, the Audit Committee considers, among other things, the possible effect of the performance of such services on the auditor’s independence.  No non-audit services were performed by BKD during 2017 or 2016. The Audit Committee pre-approved 100% of audit fees and audit-related fees during the year ended December 31, 2017.

The following table shows the fees billed for the audit provided by BKD during the years ended December 31, 2017 and 2016.

 

 

 

2017

 

 

2016

 

Audit fees

 

$

618,850

 

 

$

602,600

 

Audit-related fees

 

 

 

 

Tax fees

 

 

 

 

All other fees

 

 

 

 

Total

 

$

618,850

 

 

$

602,600

 

 

Audit Fees for professional services rendered by BKD include fees related to the audits of the Company and of certain of our subsidiaries, other attestation services, internal control audits and assistance with interpretation of accounting standards.

 

Additional information concerning the Audit Committee and its activities with BKD can be found in the following sections of this proxy statement: “Corporate Governance Principles and Board Matters—Audit Committee” and “Audit Committee Report.”

Vote Required

The affirmative vote of a majority of the shares of common stock represented in person or by proxy at the Annual Meeting and eligible to vote is required for the approval of this proposal.

 

The Board recommends a vote “FOR” the ratification of the appointment of BKD as the independent registered public accounting firm of the Company for 2018.  Proxies solicited by the Board will be voted for the proposal unless contrary instructions are given.

 

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

The Company is committed to maintaining the highest standards of business conduct and corporate governance, which we believe are essential to running our business efficiently, serving our shareholders well and maintaining our integrity in the marketplace.  We regularly monitor developments in the area of corporate governance and review our processes and procedures in light of such developments.  In those efforts, we review federal laws affecting corporate governance, such as the Sarbanes-Oxley Act of 2002, as well as rules adopted by the SEC and NASDAQ.  We believe that we have in place procedures and practices, including the following, which are designed to enhance our shareholders’ interests.

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Code of Ethics

We have adopted a Code of Ethics that applies to our principal executive officer and senior financial officers, including our principal financial officer and principal accounting officer, the purpose of which is to promote honest and ethical conduct and compliance with the law, particularly as related to the maintenance of the Company’s financial books and records and the preparation of its financial statements.  We have also adopted a Corporate Code of Conduct that sets forth the guiding principles and rules of behavior by which we operate our company and conduct our daily business with our customers, vendors and shareholders and with our fellow employees.  The Code of Conduct applies to all directors and employees of the Company.  Copies of the Code of Ethics and the Corporate Code of Conduct may be requested from the Secretary at the address on the cover of this proxy statement.

Director Independence

The NASDAQ’s listing standards require our Board to be comprised of at least a majority of independent directors.  For a director to be considered independent, the Board must determine that the director does not have any direct or indirect material relationship with the Company.  Based on the independence standards prescribed by NASDAQ, our Board has affirmatively determined that each of the following directors is independent:  C. L. Craig, Jr., F. Ford Drummond, Joseph Ford, Frank Keating, Dave R. Lopez, W. Scott Martin, Tom H. McCasland III, Ronald J. Norick, Natalie Shirley, Robin Smith, Michael K. Wallace, Gregory G. Wedel and G. Rainey Williams, Jr.  In addition, as prescribed by the NASDAQ Marketplace Rules, these independent directors have at least one scheduled meeting without management present.  See “Corporate Governance Principles and Board Matters —Independent Directors’ Committee.”

In determining independence, the Board reviews whether directors have any material relationship with the Company.  The Board considers all relevant facts and circumstances.  In assessing the materiality of a director's relationship to the Company, the Board considers the issues from the director's standpoint and from the perspective of the persons or organizations with which the director has an affiliation and is guided by the standards set forth below.  The Board reviews commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships.  An independent director must not have any material relationship with the Company, directly or as a partner, shareholder or officer of an organization that has a relationship with the Company, or any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

A director will not be considered independent in the following circumstances:

(1)

The director is, or has been in the past three years, an employee of the Company, or an immediate family member of the director is, or has been in the past three years, an executive officer of the Company.

(2)

The director has received, or has an immediate family member who has received during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Company, other than compensation for Board service, compensation received by the director's immediate family member for service as a non-executive employee of the Company, and pension or other forms of deferred compensation for prior service with the Company that is not contingent on continued service.

(3)

(A) The director or an immediate family member is a current partner of the firm that is the Company’s external auditor; (B) the director is a current employee of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and who participates in the firm's audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or an immediate family member is or was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on the Company’s audit within that time.

(4)

The director or an immediate family member is, or has been in the past three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or has served on that company's compensation committee.

(5)

The director is, or has an immediate family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the Company made, or from which the Company received, payments for property or services in the current or any of the past three fiscal years that exceed the greater of 5% of the recipient's consolidated gross revenues for that year, or $200,000.

For these purposes, an “immediate family member” includes a director's spouse, parents, children, siblings, mother-and father-in-law, sons-and daughters-in-law, brothers-and sisters-in-law, and anyone who shares the director's home.

7


 

Director Nominees

Director Qualifications

The Independent Directors’ Committee has no specified Board membership criteria that apply to nominees recommended for a position on the Company’s Board.  However, members of the Board should have the highest professional and personal ethics and values, consistent with the Company’s longstanding values and standards.  They should also have broad experience at the policy-making level in business, government, education, technology or public service. In addition, directors should represent a diversity of viewpoints, backgrounds, experiences and other demographics. They should be committed to enhancing shareholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience.  The Independent Directors’ Committee believes that directors’ service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties.

Identifying and Evaluating Candidates for Directors

The Board Issues Committee assists the Independent Directors’ Committee in identifying director candidates. Candidates may come to the attention of the Board Issues Committee and the Independent Directors’ Committee through current Board members, shareholders or other persons. Identified candidates are evaluated at regular or special meetings of the Independent Directors’ Committee and may be considered at any point during the year. As described below, the Independent Directors’ Committee will consider properly submitted shareholder recommendations for candidates for the Board to be included in the Company’s proxy statement. In making its nominations, the Independent Directors’ Committee seeks to achieve a balance of knowledge, experience and capability on the Board.

Shareholder Recommendations

The policy of the Independent Directors’ Committee is to consider properly submitted shareholder recommendations of candidates for membership on the Board as described above under “Identifying and Evaluating Candidates for Directors.”  In evaluating any such recommendations, the Independent Directors’ Committee will consider the balance of knowledge, experience and capability on the Board and will address the membership criteria set forth above under “Director Qualifications.” Any shareholder recommendations proposed for consideration by the Independent Directors’ Committee should include the candidate's name and qualifications for Board membership and should be addressed to the Secretary pursuant to the procedure described under the heading “Proposals for the 2019 Meeting of Shareholders.”

 

Directors of BancFirst Corporation

The following information about each nominee for director to our Board, includes their business experience, director positions held currently or at any time during the last five years, and the experiences, qualifications attributes or skills that caused the Independent Directors’ Committee and our Board of Directors to determine that each individual should serve as one of our directors. The following information is current as of April 6, 2018:

 

Name (Age)

 

Business Experience During Past 5 Years and Other Information

 

 

 

Dennis L. Brand (70)

 

Mr. Brand became Chairman of the Executive Committee in May 2017. Mr. Brand has been a Vice Chairman of the Company since 2013. Prior to that, he was Senior Executive Vice President of the Company starting in 2005. He was President and Chief Executive Officer of the Bank from 2005 to 2017. He was Executive Vice President and Chief Operating Officer of the Company from October 2003 to December 2004.  From 1999 to 2003 he was Executive Vice President of Community Banking.  He was a Regional Executive and President of BancFirst Shawnee from 1992 to 1999.

 

Mr. Brand’s executive experience in the banking industry specifically in lending and operations, along with his knowledge and awareness of the communities we serve, make him well qualified to serve as a director.

 

 

 

C. L. Craig, Jr. (73)

 

Mr. Craig is self-employed in the investment and management of personal financial holdings.  He served as Chairman of the Board of Directors of Lawton Security Bancshares, Inc. from 1983 until 1998.

 

Mr. Craig’s extensive business and investment experience, together with his prior experience serving as a bank director and his familiarity with community banking, make him well qualified to serve as a director.

 

 

 

8


 

Name (Age)

 

Business Experience During Past 5 Years and Other Information

James R. Daniel (78)

 

Mr. Daniel has been a Vice Chairman of the Company since 1997.  From 1994 to 1997, he was President, Chief Executive Officer and Chairman of the Board of Directors of Bank One Oklahoma Corporation. He also served in various executive offices at Friendly Bank, Oklahoma City, Oklahoma from 1964 to 1972, and was its President and Chief Executive Officer from 1972 to 1993.

 

Mr. Daniel’s extensive executive management experience in the banking industry, together with his prior experience as a bank director and his knowledge and awareness of the Oklahoma City market, make him well qualified to serve as a director.

 

 

 

F. Ford Drummond (55)

 

Mr. Drummond is currently the Owner/Operator of Drummond Ranch in Pawhuska, Oklahoma. He served as General Counsel for BMI-Health Plans from 1998 to 2008.  He has served on the Board of Trustees for Allianz Funds in New York since 2005. He was also a member of the Oklahoma Water Resources Board, an Oklahoma state government regulatory board, from 2006 to 2017. In addition, he was a director of The Cleveland Bank in Cleveland, Oklahoma, from 1998 to 2012.

 

Mr. Drummond’s business experience, together with his prior experience serving as a bank director and his knowledge and awareness of the communities we serve, make him well qualified to serve as a director.

 

Joseph Ford (40)

 

Mr. Ford has served as the President of Shawnee Milling Company, a family-owned milling company, since 2016. He was the Vice President of Operations of Shawnee Milling Company from 2005 to 2009, and then was the Senior Vice President of Operations from 2009 to 2016. From 2000 to 2003, Mr. Ford was an Information Consultant for Accenture Information Technology Consulting. He is also involved in a broad array of civic and community affairs.

 

Mr. Ford’s business and management experience and his knowledge and awareness of the communities we serve, makes him well qualified to serve as a director.

 

David R. Harlow (55)

 

Mr. Harlow became Chief Executive Officer of BancFirst Corporation in May 2017.  Mr. Harlow joined the Company in 1999 as Executive Vice President and Manager of Commercial Banking for BancFirst Oklahoma City.  He was President of BancFirst Oklahoma City from 2003 to 2017 and has been a Regional Executive since 2004.  He has also been a director of BancFirst since 2014.

 

Mr. Harlow’s banking experience, knowledge of the Oklahoma City market and the markets we serve make him well qualified to serve as a director.

 

William O. Johnstone (70)

 

Mr. Johnstone is the Chief Executive Officer of Council Oak Partners, LLC, a subsidiary of the Company.  He is also the Chief Executive Officer of Council Oak Investment Corporation and Council Oak Real Estate, Inc., both of which are subsidiaries of BancFirst.  He has been a Vice Chairman of the Company since 1996.  From 1996 to 2001, he served as Chairman and Chief Executive Officer of C-Teq, Inc., a company that provided data processing services to financial institutions.  From 1985 until 1996, Mr. Johnstone served as President and Chairman of the Board of City Bankshares, Inc. and its subsidiary, City Bank, Oklahoma City, Oklahoma.

 

Mr. Johnstone’s banking and investment experience specifically in private equity and commercial banking make him well qualified to serve as a director.

 

 

 

9


 

Name (Age)

 

Business Experience During Past 5 Years and Other Information

 

 

 

Frank Keating (74)

 

Governor Keating is a partner of the law firm of Holland & Knight LLP, a position he has held since February 2016. He is a former governor of the State of Oklahoma and retired CEO of the American Bankers Association. Governor Keating received a Bachelor of Arts in history from Georgetown University and a J.D. from the University of Oklahoma College of Law.  Governor Keating has a 30-plus year career in public service including his service as  U.S. Attorney for the Northern District of Oklahoma, Assistant Secretary of the U.S. Treasury Department, Associate Attorney General of the United States, and member of the Oklahoma state House and Senate. He currently serves on the boards of Stewart Title Company, a wholly-owned subsidiary of Stewart Information Services Corp., a publicly-held title insurance and real estate services company.

 

Mr. Keating’s extensive career in law and public service, and his experience as President and CEO of the American Bankers Association, make him well qualified to serve as a director.

 

 

 

Dave R. Lopez (66)

 

Mr. Lopez served as Secretary of State of the State of Oklahoma from March 2017 to March 2018. Prior to that he was an independent executive consultant. Mr. Lopez served as the Interim Superintendent of Oklahoma City Public Schools from 2013 to 2014. Mr. Lopez served as the Secretary of Commerce and Tourism for the State of Oklahoma from 2012 to 2013 and also as the Executive Director of the Oklahoma Department of Commerce from 2011 to 2012. He was the President of American Fidelity Foundation, a private foundation, from 2006 to 2011. Mr. Lopez was President of Downtown Oklahoma City, Inc., a non-profit organization, from 2004 to September 2006.  In 2003, he was Vice President of Development for the Oklahoma Arts Institute. From 1979 to 2001, Mr. Lopez held various officer positions with SBC Communications, Inc. (now AT&T Inc.), a publicly held telecommunications company, including as President of SBC’s Oklahoma and Texas operations. He is a National Association of Corporate Directors (NACD) Board Leadership Fellow. NACD Fellowship is a comprehensive and continuous study program for directors.

 

Mr. Lopez’s executive management experience, his public service, and his extensive civic involvement make him well qualified to serve as a director.

 

 

 

W. Scott Martin (68)

 

Mr. Martin was a principal shareholder and Chairman of the Board of both First Wagoner Corporation and First Chandler Corp., until their merger into BancFirst Corporation in January 2018. He is also a director of First Bank of Burkburnett, Texas. Mr. Martin is a director of First Chandler USA, Inc. and its subsidiary National American Insurance Company.

 

Mr. Martin’s executive management experience in banking, along with his knowledge and awareness of the communities we serve, make him well qualified to serve as a director.

 

 

 

Tom H. McCasland, III (59)

 

Mr. McCasland has been President of Mack Energy Co., a privately-owned exploration and production company, since 1996 and was a community director of BancFirst Duncan from 1998 to 2015.  Mr. McCasland has been a director of Investors Trust Company, an Oklahoma-chartered trust company, since 1984.  He previously served on the Board of Directors of Cache Road National Bank of Lawton, Oklahoma, and Charter National Bank of Oklahoma City, Oklahoma.

 

Mr. McCasland’s extensive business and management experience in the oil and gas industry, together with his prior experience as a bank director and his knowledge and awareness of the communities we serve, make him well qualified to serve as a director.

 

 

 

Ronald J. Norick (76)

 

Mr. Norick is the Controlling Manager of Norick Investment Company, LLC, a family financial management company.  He was the Mayor of Oklahoma City from April 1987 to April 1998.  He was also President of Norick Brothers, Inc. from 1981 to 1992.  Mr. Norick has formerly served as a director of two banks, including City Bank, Oklahoma City, Oklahoma.

 

Mr. Norick’s extensive business and management experience, together with his prior experience as a bank director, his political acumen, and his knowledge and awareness of the Oklahoma City market, make him well qualified to serve as a director.

 

 

 

10


 

Name (Age)

 

Business Experience During Past 5 Years and Other Information

David E. Rainbolt (62)

 

Mr. Rainbolt became Executive Chairman of both BancFirst Corporation and BancFirst in May of 2017.  He was elected Chairman of the Board of BancFirst Corporation in March 2017, and has served as Chairman of BancFirst since 2005. He was President and Chief Executive Officer of the Company from January 1992 to May 2017 and was Executive Vice President and Chief Financial Officer of the Company from July 1984 to December 1991.

 

Mr. Rainbolt’s executive management experience in banking, and specifically in bank acquisitions and corporate finance, along with his knowledge and awareness of the communities we serve, make him well qualified to serve as a director.

 

 

 

H. E. Rainbolt (89)

 

Mr. Rainbolt became Chairman Emeritus in March 2017, after having served as Chairman of the Board of the Company from 1984 to March 2017. He was its President and Chief Executive Officer from 1984 to 1991 and was the Chairman of BancFirst until 2005. From 1996 to 2014, Mr. Rainbolt was also a director of Sonic Corp., a publicly-held franchiser of fast-food restaurants.  H. E. Rainbolt is the father of David E. Rainbolt.

 

Mr. Rainbolt’s extensive business and management experience, together with his long career in the banking industry and his knowledge and awareness of the communities we serve, makes him well qualified to serve as a director.

 

 

 

Michael S. Samis (64)

 

Mr. Samis is a private investor. He was Chairman of M-D Building Products, Inc., a privately-owned manufacturer of building materials, from 2000-2007 and President and CEO of Macklanburg-Duncan Co., the predecessor company of M-D Building Products, Inc. from 1990-2000. He is co-founder and Chairman of Energy Financial Solutions, LLC, a privately-owned financial services company to the energy industry, and founder and Chairman of Energy Financial and Physical, LP., a privately-owned exploration and production company. Mr. Samis served as Chairman of the University Hospital Authority, University Hospitals Trust and Joint Governing Committee for OU Medical Center in Oklahoma City until January 2018. Mr. Samis served as director of the Oklahoma City Branch of the Federal Reserve Bank of Kansas City from 1995-2001.

 

Mr. Samis’s extensive business and investment experience, together with his prior experience serving as a director and a manager, make him well qualified to serve as a director.

 

 

 

Darryl Schmidt (55)

 

Mr. Schmidt was appointed Chief Executive Officer of BancFirst in May of 2017. Mr. Schmidt was Chief Credit Officer of the Company from 2002 to 2015.  Beginning in 2007 he served in a dual role as Chief Credit Officer and Director of Community Banking until late 2015, at which time these roles were again separated.  He has been a director of BancFirst since 2003.

 

Mr. Schmidt’s banking experience and knowledge of the markets we serve throughout Oklahoma make him well qualified to serve as a director.

 

 

 

Natalie Shirley (60)

 

Ms. Shirley has served as President and Chief Executive Officer of the National Cowboy and Western Heritage Museum since January 2018.  From 2011 to 2017 she was President of Oklahoma State University - Oklahoma City (OSU-OKC). Since 2015, Ms. Shirley has served as Secretary of Education and Workforce Development for the State of Oklahoma. She received a baccalaureate degree from Oklahoma State University and a law degree from the University of Oklahoma.  She served in Governor Brad Henry’s Cabinet as Oklahoma’s Secretary of Commerce and Tourism from 2007 to 2011. In this position, she was the liaison between the Governor, five major state agencies and more than 30 smaller agencies, authorities and institutions.  During this time, Ms. Shirley also served as the Executive Director of the Department of Commerce, the state’s leading economic development agency.

 

Ms. Shirley’s extensive business and management experience, along with her understanding of the state we serve, make her well qualified to serve as a director.

 

 

 

11


 

Name (Age)

 

Business Experience During Past 5 Years and Other Information

Robin Smith (46)

 

Ms. Smith is the Chief Executive Officer and a co-founder of WeGoLook, a company that combines technology with an on-demand workforce to provide field verifications. She is also Senior Vice President of Crawford and Company. In 2017, Crawford and Company, a publicly-held insurance administration company, acquired 85% of WeGoLook.  Ms. Smith serves on the board of Creative Oklahoma, a nonprofit organization dedicated to advancing creativity and innovation and is a member of the Women Presidents’ Organization, a non-profit membership organization for women presidents, CEOs, and managing directors of privately held, multimillion-dollar companies.

 

Ms. Smith’s extensive business and management experience make her well qualified to serve as a director.

 

 

 

Michael K. Wallace (64)

 

Mr. Wallace has been the President and owner of Wallace Properties, Inc. and Mike Wallace Homes, Inc., privately-owned real estate development and homebuilding companies, since 1994. Mr. Wallace has also served on the community board of the BancFirst Jenks branch since 1999.

 

Mr. Wallace’s extensive business and management experience, together with his knowledge and awareness of the communities we serve, makes him well qualified to serve as a director.

 

 

 

Gregory G. Wedel (57)

 

Mr. Wedel has been managing partner of Wedel Rahill & Associates, CPAs, PLC since 1984.  He received his bachelor’s degree in accounting from the University of Central Oklahoma and started his career in public accounting with Peat Marwick (now KPMG). Mr. Wedel is a member of the American Institute of Certified Public Accountants and the Oklahoma Society of Certified Public Accountants. He previously served on the Board of Directors and credit committee of Kirkpatrick Bank, Oklahoma City, from 2000 to 2014. He also serves on the boards of a number of regional, privately-owned companies.

 

Mr. Wedel’s extensive business and management experience, together with his accounting knowledge, makes him well qualified to serve as a director.

 

 

 

G. Rainey Williams, Jr. (57)

 

Mr. Williams has been President of Marco Holding Corporation, a private investment partnership, and its predecessors, since 1988.  He is a member of the Company’s Senior Trust Committee and was an advisory director from 2000 to 2003.  Mr. Williams was a director of American Trailer Works, a privately-held manufacturer of utility and cargo trailers, until its sale in 2016. He is a past Chairman of the Board of Trustees of the YMCA Retirement Fund, and serves on the boards of several other not-for-profit entities and other privately-owned for-profit companies.

 

Mr. Williams’ extensive business and investment experience, together with his prior experience serving as a director and his knowledge of private equity investments, make him well qualified to serve as a director.

 


12


 

Board Structure and Committee Composition

As of the date of this proxy statement, our Board has 22 directors and the following five standing committees: (1) Executive Committee, (2) Audit Committee, (3) Compensation Committee, (4) Independent Directors’ Committee, and (5) Board Issues Committee. The committee membership and meetings during the last fiscal year and the function of each of the standing committees are described below.  During fiscal 2017, the Board held 12 meetings.  Each current director attended at least 75% of all Board and applicable standing committee meetings.  Directors are encouraged to attend annual meetings of the Company’s shareholders.  All then-current directors, with the exception of Michael S. Samis, attended the previous annual meeting of shareholders.

 

 

 

Name of Board Committee

 

Name of Director

 

Executive

 

 

Audit

 

 

Compensation

 

 

Independent

Directors

 

 

Board

Issues

 

Dennis L. Brand

 

Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C. L. Craig, Jr.

 

 

 

 

 

 

 

 

 

 

 

 

Member

 

 

 

 

 

William H. Crawford (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

   Member

 

 

 

 

 

James R. Daniel

 

Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F. Ford Drummond

 

 

 

 

 

 

 

 

 

Member

 

 

Member

 

 

 

 

 

Roy C. Ferguson (2)

 

Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Joseph Ford

 

 

 

 

 

 

 

 

 

   Member

 

 

 

   Member

 

 

 

 

 

K. Gordon Greer (3)

 

Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David R. Harlow

 

Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

William O. Johnstone

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Frank Keating

 

 

 

 

 

 

 

 

 

 

 

 

 

Member

 

 

 

 

 

Dave R. Lopez

 

 

 

 

 

 

 

 

 

 

 

 

 

Member

 

 

 

 

 

W. Scott Martin

 

 

 

 

 

 

 

 

 

 

 

 

Member

 

 

 

 

 

Tom H. McCasland III

 

 

 

 

 

Member

 

 

 

 

 

 

Member

 

 

 

 

 

Ronald J. Norick

 

 

 

 

 

 

 

 

 

 

 

 

 

Member

 

 

 

 

 

David E. Rainbolt

 

Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Member

 

H. E. Rainbolt

 

Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chairman

 

Michael S. Samis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Darryl Schmidt

 

Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Natalie Shirley

 

 

 

 

 

Member

 

 

 

 

 

 

Member

 

 

 

 

 

Robin Smith

 

 

 

 

 

 

   Member

 

 

 

 

 

 

Member

 

 

 

 

 

Michael K. Wallace

 

 

 

 

 

 

 

 

 

 

 

 

 

Member

 

 

 

 

 

Gregory G. Wedel

 

 

 

 

 

 

   Chairman

 

 

 

 

 

 

Member

 

 

 

 

 

G. Rainey Williams, Jr.

 

 

 

 

 

 

 

 

 

Chairman

 

 

Chairman

 

 

Member

 

Meetings in fiscal 2017

 

 

15

 

 

 

13

 

 

 

1

 

 

 

1

 

 

 

2

 

 

(1)

Mr. Crawford, a director of the Company, is not standing for re-election at the Annual Meeting.

(2)

Mr. Ferguson is Executive Vice President and Chief Credit Officer of the Bank.

(3)

Mr. Greer is Executive Vice President of the Bank and former director of the Company.

Board Leadership Structure and Risk Oversight

The Company’s senior leadership is shared between two positions — the Chief Executive Officer and the Executive Chairman of the Board. Separating these positions allows the Company’s Chief Executive Officer to focus on the Company’s day-to-day business, while allowing the Executive Chairman of the Board to lead the Company’s Board in its fundamental role of oversight of management.  The Company believes that, generally, the separated role of Executive Chairman and Chief Executive Officer provides an appropriate balance between leadership and independent oversight.  However, the Company’s bylaws do not require separation of the offices of Executive Chairman and Chief Executive Officer, and the Board believes this determination should be made in the Company’s best interests based on the circumstances at the time.  

In deciding which board leadership structure it believes will provide the most effective leadership and board oversight for the Company, the Board considers a range of factors. The factors include, but are not limited to: the Company’s operating and financial performance under the existing board leadership structure; recent or anticipated changes in the CEO role; and the effectiveness of current processes and structures for Board interaction with and oversight of management. The Board will continue to exercise its judgment periodically to determine the board leadership structure that it believes will provide appropriate leadership, direction and oversight, while facilitating the effective functioning of both the Board and management.

13


 

The Board is charged with general oversight of the management of the Company’s risks. The Board considers risks, as appropriate, among other factors in reviewing the Company’s strategy, business plan, budgets and major transactions. Each of the Board’s committees assists the Board in overseeing the management of the Company’s risks within the areas delegated to the committee. In particular, the Executive Committee assists the Board by reviewing reports from management on at least an annual basis on the risks facing the Company, management’s actions to address those risks and the Company’s risk management processes. Following its reviews of the reports, the Executive Committee reports the results of its reviews to the full Board. The Audit Committee assists the Board with oversight of operational and compliance risk by reviewing internal audit reports from the Company’s Chief Internal Auditor. The Compensation Committee oversees risks related to the Company’s compensation programs and policies and meets at least annually with the Executive Chairman to discuss such risks. The Senior Loan Committee is responsible for the oversight of credit risk, on which they report monthly to the Board. The Administrative Committee assists the Board and executive management with the oversight of risks other than credit risk.

Executive Committee

The Executive Committee has the authority to exercise all the powers of the full Board during the intervals between Board meetings, except the power to amend the Bylaws and those powers specifically delegated to other committees of the Board.  Members of the Executive Committee in 2017 were Dennis L. Brand (Chairman), James R. Daniel, Roy C. Ferguson, K. Gordon Greer, David R. Harlow, David E. Rainbolt, H. E. Rainbolt and Darryl Schmidt.

Audit Committee

The Audit Committee of the Company also serves as the Audit Committee of the Bank.  The Audit Committee is responsible for conducting an annual examination of the Company and for ensuring that adequate internal controls and procedures are maintained.  An independent registered public accounting firm is engaged to conduct the annual examination and the Audit Committee meets with the independent registered public accounting firm to discuss the scope and results of the examination.  The Chief Internal Auditor and the Executive Vice President of Asset Quality report to the Audit Committee, and the Chief Risk Officer and Executive Vice President of Asset Quality meet with the Committee representing management.

Members of the Audit Committee in 2017 were J. Ralph McCalmont, Tom H. McCasland III, Natalie Shirley, Robin Smith and Gregory G. Wedel. J. Ralph McCalmont, who did not stand for re-election at the 2017 Annual Meeting of Shareholders, was Chairman of the Audit Committee until May 25, 2017, at which time Gregory G. Wedel was appointed Chairman. Robin Smith was appointed to the Audit Committee in June 2017.  The Board has determined that each such member of the Audit Committee was independent pursuant to applicable NASDAQ and SEC rules. The Board also determined that Mr. Wedel is an audit committee financial expert as defined by applicable SEC rules. The Audit Committee has a written Audit Committee Charter. The charter is not available on the Company’s website, but a copy is attached as Appendix A to this Proxy Statement. A free printed copy also is available to any shareholder who requests it from the Secretary at the address on the cover of this Proxy Statement. The report of the Audit Committee is included herein under the heading “Audit Committee Report”.

Compensation Committee

The Compensation Committee of the Company determines the compensation of the Chief Executive Officers of BancFirst Corporation and BancFirst, and reviews and approves the compensation of the other executive officers of the Company. During 2017, the Compensation Committee was composed of F. Ford Drummond, Joseph Ford and G. Rainey Williams, Jr. (Chairman), each of whom has been determined by the Board to be independent directors under applicable NASDAQ and SEC standards. The report of the Compensation Committee is included herein under the heading “Compensation Committee Report”.  The Compensation Committee has a written charter. The charter is not available on the Company’s website, but a copy is attached as Appendix B to this Proxy Statement.  A free printed copy is available to any shareholder who requests it from the Secretary at the address on the cover of this Proxy Statement.

Independent Directors’ Committee

The Independent Directors’ Committee meets at least annually in executive session to discuss significant matters and review the actions of management of the Company, and also serves as the Board’s nominating committee. The Independent Directors’ Committee consists of those directors who meet the applicable NASDAQ and SEC independence requirements, which during 2017 were C. L. Craig, Jr., William H. Crawford, F. Ford Drummond, Joseph Ford, Frank Keating, Dave R. Lopez, Tom H. McCasland III, Ronald J. Norick, Natalie Shirley, Robin Smith, Michael K. Wallace, Gregory G. Wedel and G. Rainey Williams, Jr. The Independent Directors’ Committee has a written charter. The charter is not available on the Company’s website, but a copy is attached as Appendix C to this Proxy Statement. A free printed copy is available to any shareholder who requests it from the Secretary at the address on the cover of this Proxy Statement.

14


 

Executive sessions of Independent Directors Committee are held at least once a year. The sessions are scheduled and chaired by the lead independent director, who in 2017 was G. Rainey Williams, Jr. Any independent director may request that an additional executive session be scheduled.

Board Issues Committee

The Board Issues Committee is a committee that considers matters regarding membership, processes, education, and compensation of the Board of Directors.  The Board Issues Committee makes recommendations regarding these matters to the Independent Directors Committee and the full Board for approval. During 2017 the members of the Board Issues Committee were David E. Rainbolt, H.E. Rainbolt (Chairman) and G. Rainey Williams, Jr. (lead independent director). The Board Issues Committee met three times during 2017. The Board Issues Committee meets at least annually, but may meet more frequently as they consider necessary.

In addition to the foregoing standing committees of the Board of Directors of the Company, the Bank has the following standing management committees:

Senior Loan Committee of the Bank

The Senior Loan Committee of the Bank is a management committee that assists the Board and executive management with the administration of corporate credit policies and procedures, and evaluates loans within its designated policy guidelines. During 2017 the members of the Senior Loan Committee were Dennis L. Brand, James R. Daniel, Roy C. Ferguson (Chairman), K. Gordon Greer, David R. Harlow, David E. Rainbolt, H.E. Rainbolt and Darryl Schmidt. The Senior Loan Committee generally met weekly during 2017.

Asset/Liability Committee of the Bank

The Asset/Liability Committee (ALCO) of the Bank is a management committee that administers the corporate investment and asset/liability management policies and procedures, and manages the Bank’s liquidity, interest rate risk and market risk. During 2017, the members of the ALCO were Dennis L. Brand, Randy Foraker, David R. Harlow, Kevin Lawrence, Robert M. Neville, David E. Rainbolt (Chairman) and Darryl Schmidt. The ALCO generally meets monthly.

Administrative Committee of the Bank

The Administrative Committee of the Bank is a management committee that assists the Board and executive management with administration of corporate policies and procedures, oversight of risks other than credit risk, and with other matters concerning the management of the Bank’s business.  During 2017, the members of the Administrative Committee were Dennis L. Brand, Scott Copeland, James R. Daniel, Paul D. Fleming, Randy Foraker, Kelly Foster, D. Jay Hannah, David R. Harlow, Kevin Lawrence, Robert M. Neville, David E. Rainbolt (Chairman), J. Michael Rogers, Darryl Schmidt, Dara Wanzer, Jennifer Weast and David Westman. The Administrative Committee generally meets monthly.

Shareholder Communications with the Board

Shareholders and other interested parties may communicate with one or more members of the Board in writing by regular mail. The following address may be used by those who wish to send such communications:

Board of Directors

c/o Secretary

BancFirst Corporation

101 N. Broadway

Oklahoma City, Oklahoma 73102

Such communication should be clearly marked “Shareholder-Board Communication.” The communication must indicate whether it is meant to be distributed to the entire Board or to specific members of the Board, and must state the number of shares beneficially owned by the shareholder making the communication. The Secretary has the authority to disregard any inappropriate communications.  If deemed an appropriate communication, the Secretary will submit the correspondence to the Executive Chairman of the Board or to any specific director to whom the correspondence is directed.

15


 

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Company evaluates and recommends to the Board, the compensation of the Chief Executive Officers of BancFirst Corporation and BancFirst, considering any performance factors, market compensation information and management recommendations that it deems appropriate. The Compensation Committee also reviews and approves, at least annually, the compensation of the other executive officers of the Company. In connection with these duties, the Compensation Committee meets at least annually with the Executive Chairman to discuss, review and evaluate the relationship between our risk management policies and practices and executive compensation arrangements. This meeting includes a review of the structure and components of our compensation arrangements, the material potential sources of risk in our business lines and compensation arrangements and our various policies and practices that mitigate these risks. Within this framework, a variety of topics are discussed, including the parameters of acceptable and excessive risk taking (recognizing that some risk taking is an inherent part of operating any business) and the general business goals and concerns of the Company, including the need to attract, retain and motivate qualified executives and other personnel.

The Compensation Committee believes that our overall compensation practices for our executive officers, which include the following elements, limit the ability of executive officers to benefit from taking unnecessary or excessive risks:

 

executive compensation that is heavily weighted toward fixed salaries;

 

maximum payouts that limit the aggregate payout potential of cash incentive compensation;

 

a strong alignment of risk management goals and incentive pay;

 

balance between short-term and long-term incentive compensation opportunities; and

 

the Company’s historical emphasis on character and integrity at all levels of the organization.

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement under the heading “Executive Compensation”. Based on this review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10−K for the year ended December 31, 2017.

Submitted by the Compensation Committee of the Board of Directors:

F. Ford Drummond

Joseph Ford

G. Rainey Williams, Jr. (Chairman)

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Drummond, Ford and Williams currently serve on the Compensation Committee.  None of these individuals is or has been an officer or associate of the Company, or had any relationship with the Company required to be disclosed under “Transactions with Related Persons.”  No executive officer of the Company is, or was during 2017, a member of the board of directors or compensation committee (or other committee serving an equivalent function) of another company that has, or had during 2017 an executive officer serving as a member of our Board or Compensation Committee.

AUDIT COMMITTEE REPORT

The following report is for the Audit Committee’s activities regarding oversight of the Company’s financial reporting and auditing process for fiscal year 2017.

Members of the Audit Committee in 2017 were J. Ralph McCalmont, Tom H. McCasland III, Natalie Shirley, Robin Smith and Gregory G. Wedel. J. Ralph McCalmont, who did not stand for re-election at the 2017 Annual Meeting of Shareholders, was Chairman of the Audit Committee until May 25, 2017, at which time Gregory G. Wedel was appointed Chairman. Robin Smith was appointed to the Audit Committee in June 2017. All of the voting committee members are “independent directors” as defined in the Marketplace Rules of The NASDAQ Global Market.  Mr. Wedel has been designated as the audit committee financial expert by the Board. The Board has adopted an Audit Committee Charter, a copy of which is included as Appendix A to this Proxy Statement. The composition of the Audit Committee, the attributes of its members and the responsibilities of the Committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees.

16


 

As described more fully in its charter, the purpose of the Audit Committee is to assist the Board in its general oversight of the Company’s financial reporting, internal control and audit functions. Management is responsible for the preparation, presentation and integrity of the Company’s financial statements, accounting and financial reporting principles, internal controls and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. The Company’s independent registered public accounting firm is responsible for expressing an opinion on the conformity of the Company’s audited financial statements to generally accepted accounting principles.

The Audit Committee is not intended to duplicate or to certify the activities of management and the independent registered public accounting firm, nor can the Audit Committee certify that the independent registered public accounting firm is “independent” under applicable rules. The Audit Committee serves a board-level oversight role, in which it provides advice, counsel and direction to management and the independent registered public accounting firm on the basis of the information it receives, discussions with management and the auditor, and the experience of the Committee’s members in business, financial and accounting matters.

Among other matters, the Audit Committee monitors the activities and performance of the Company’s internal auditors and independent registered public accounting firm, including the audit scope, external audit fees, auditor independence matters and the extent to which the independent registered public accounting firm may be retained to perform non-audit services. The Audit Committee and the Board have ultimate authority and responsibility to select, evaluate and, when appropriate, replace the Company’s independent registered public accounting firm. The Audit Committee also reviews the results of the internal and external audit work with regard to the adequacy and appropriateness of the Company’s financial, accounting and internal controls.  Management’s and the independent registered public accounting firm’s presentations to, and discussions with, the Audit Committee also cover various topics and events that may have significant financial impact or are the subject of discussions between management and the independent registered public accounting firm.  In addition, the Audit Committee generally oversees the Company’s internal compliance programs.

The Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm.  Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the independent registered public accounting firm represented that its presentations to the Audit Committee included the matters required to be discussed with the independent registered public accounting firm by Public Company Accounting Oversight Board’s Auditing Standard No. 16 (Communications with Audit Committees).

The Company’s independent registered public accounting firm also provided the Audit Committee with a formal written statement describing all relationships between the Company and the auditors that might bear on the auditors’ independence consistent with Public Company Accounting Oversight Board Rule 3526, “Communication with Audit Committees Concerning Independence.” The Audit Committee discussed with the auditors any relationships that may have an impact on their objectivity and independence and satisfied itself as to the auditors’ independence.

Following the Audit Committee’s discussions with management and the independent registered public accounting firm, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2017.

Submitted by the Audit Committee of the Board of Directors:

Gregory G. Wedel (Chairman)

Tom H. McCasland III

Natalie Shirley

Robin Smith

TRANSACTIONS WITH RELATED PERSONS

BancFirst has made loans in the ordinary course of business to certain directors and executive officers of the Company and to certain affiliates of these directors and executive officers.  None of these loans outstanding are classified as nonaccrual, past due, restructured or potential problem loans. All such loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans made to persons not related to the Company, and did not involve more than the normal risk of collectability or present other unfavorable features.

The Company has adopted written policies to implement the requirements of Regulation O of the Federal Reserve Board, which restricts the extension of credit to directors and executive officers and their family members and other related interests.  Under these policies, extensions of credit that exceed regulatory thresholds must be approved by the Board of Directors of the Bank. All other

17


 

transactions involving the Company in which a director or executive officer or immediate family member may have a direct or indirect material interest are required to be approved by the Audit Committee.

 

A son of David E. Rainbolt, Executive Chairman, is employed by the Company’s commercial property and casualty insurance agency subsidiary as a licensed agent.  His total compensation for 2017, which is based on a standard commission schedule, was $349,850.  Since it is solely commission-based, this compensation will vary from year to year.

MANAGEMENT

Information with respect to our executive officers (including certain executive officers of BancFirst, our subsidiary bank) as of April 6, 2018 is set forth below.  Each officer serves a term of office of one year or until the election and qualification of his or her successor.

 

Name

 

 

Age

 

 

Officer

Since

 

Position

David E. Rainbolt

 

62

 

 

1984

 

Executive Chairman; Executive Chairman, BancFirst

David R. Harlow

 

55

 

 

1999

 

Chief Executive Officer

Dennis L. Brand

 

70

 

 

1992

 

Vice Chairman

James R. Daniel

 

78

 

 

1997

 

Vice Chairman

William O. Johnstone

 

70

 

 

1996

 

Vice Chairman

Scott Copeland

 

53

 

 

1992

 

Executive Vice President and Head of Operations, BancFirst

Roy C. Ferguson

 

71

 

 

1992

 

Executive Vice President and Chief Credit Officer, BancFirst

Paul Fleming

 

67

 

 

2006

 

Executive Vice President and Chief Internal Auditor

Randy Foraker

 

62

 

 

1987

 

Executive Vice President, Chief Risk Officer and Secretary

Kelly Foster

 

49

 

 

1998

 

Executive Vice President and Chief Compliance Officer

D. Jay Hannah

 

62

 

 

1984

 

Executive Vice President of Financial Services, BancFirst

Kevin Lawrence

 

39

 

 

2013

 

Executive Vice President, Chief Financial Officer and Treasurer

Robert M. Neville

 

62

 

 

1986

 

Executive Vice President of Investments, BancFirst

Kendal W. Starks

 

64

 

 

1986

 

Executive Vice President and Director of Community Banking, BancFirst

David Westman

 

62

 

 

2006

 

Executive Vice President and Chief Technology Officer, BancFirst

Darryl Schmidt

 

55

 

 

2002

 

President and Chief Executive Officer, BancFirst

Dara Wanzer

 

46

 

 

2017

 

Senior Vice President of Human Resources, BancFirst

Jennifer Weast

 

54

 

 

1995

 

Senior Vice President and Controller

John Anderson

 

62

 

 

2011

 

Regional Executive, BancFirst

John Barton

 

63

 

 

2017

 

Regional Executive, BancFirst

Mark Gish

 

63

 

 

2017

 

Regional Executive, BancFirst

Karen James

 

62

 

 

1984

 

Regional Executive, BancFirst

Marion McMillan

 

65

 

 

1998

 

Regional Executive, BancFirst

Harvey G. Robinson

 

59

 

 

1997

 

Regional Executive, BancFirst

David M. Seat

 

67

 

 

1995

 

Regional Executive, BancFirst

 

Each of the above-named executive officers has been employed by the Company for at least the last five years, with the exception of Dara Wanzer, who joined the Company in 2017. Prior to such date and for at least four years preceding her employment with the Company, Ms. Wanzer was legal counsel for Integris Health, Inc., Oklahoma City, Oklahoma.


18


 

EXECUTIVE COMPENSATION

Throughout this section, unless the context indicates otherwise, when we use the terms “we,” “our” or “us,” we are referring to BancFirst Corporation and its subsidiary BancFirst.

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) describes the compensation for the named executive officers in the Summary Compensation Table and for our executive officers generally.  SEC regulations require us to include our Chief Executive Officer, David R. Harlow (CEO), and our Chief Financial Officer, Kevin Lawrence (CFO), as named executive officers.  In addition, these regulations require us to include the three most highly compensated executive officers in 2017 other than the CEO and CFO.  In addition to Messrs. Harlow and Lawrence, our named executive officers are David E. Rainbolt (our former Chief Executive Officer), Dennis L. Brand and Darryl Schmidt, the CEO of our subsidiary bank, BancFirst.

Objectives of our Compensation Program

Overview

Our primary mission is to create long-term value for our shareholders consistent with our commitment to maintain the safety and soundness of the Bank. To accomplish this, we believe that we must provide competitive salaries and appropriate incentives to achieve long-term shareholder return. Our executive compensation practices are designed to achieve four primary objectives:

 

attract and retain qualified executives who will lead us and inspire superior performance; 

 

provide incentives for achievement of corporate goals and individual performance; 

 

provide incentives for achievement of long-term shareholder return; and 

 

align the interests of management and employees with those of the shareholders to encourage continuing increases in shareholder value.

Our goal is to effectively balance base salaries with short-term incentive compensation that is performance-based, and long-term compensation awards that are commensurate with an officer’s individual management responsibilities and potential for future contribution to corporate objectives. The portion of total compensation that is based on corporate performance and long-term shareholder return increases as an executive’s responsibilities increase.

The Compensation Committee of our Board of Directors is responsible for reviewing and recommending to the full Board of Directors for approval, our overall compensation and benefit programs in consultation with David E. Rainbolt, our Executive Chairman, and for determining the compensation of David R. Harlow, the Chief Executive Officer of BancFirst Corporation, and Darryl Schmidt, the Chief Executive Officer of our subsidiary bank, BancFirst. The Executive Chairman makes recommendations to the committee concerning his own compensation, but the Executive Chairman does not participate in the deliberations or decisions of the Compensation Committee concerning his compensation. Messrs. Harlow or Schmidt determines the compensation, including salary, performance-based incentive pay and other awards, for other executive officers, subject to the approval of the Compensation Committee. The Compensation Committee currently consists of three directors, F. Ford Drummond, Joseph Ford and G. Rainey Williams, Jr. (Chairman), all of whom are independent under applicable NASDAQ and SEC standards.

Our Compensation Committee relies on various factors when reviewing and evaluating our executive compensation policies, the performance of our named executive officers and the establishment of appropriate compensation levels and programs for such officers. These factors include an executive’s individual performance and contributions to our strategic objectives, recommendations from the Executive Chairman, internal pay equity and the results of our 2017 “say-on-pay” vote, in which the advisory vote on our executive compensation program was approved with over 95% of the votes cast in favor of the resolution. The Compensation Committee also considers the performance of the management team as a group, the Executive Chairman’s assessment of other executives’ individual performance and the Executive Chairman’s compensation recommendations with respect to the other executive officers as part of its process. The Compensation Committee considered all of these factors, including the 2017 “say-on-pay” vote result, as it evaluated whether any changes to our executive compensation program were warranted and it determined that no changes were warranted at that time.

Executive Participation in Committee Discussions

The executive officers who participate in the Compensation Committee’s compensation-setting process are the Executive Chairman and the Senior Vice President for Human Resources. Executive participation is meant to provide the Compensation Committee with

19


 

input regarding our compensation philosophy, process and decisions. In addition to providing factual information such as company-wide performance on relevant measures, these executives articulate management’s views on current compensation programs and processes, recommend relevant performance measures to be used for future awards, and otherwise supply information to assist the Compensation Committee. The Executive Chairman also provides information about individual performance assessments for executive officers, and expresses to the Compensation Committee his view on the appropriate levels of compensation for such executive officers for the ensuing year. Additionally, the Executive Chairman discusses and reviews the alignment between our risk management policies and practices and all of our employee incentive compensation arrangements, identifying and making efforts to limit any features in such compensation arrangements that might lead to employees taking unnecessary or excessive risks that could threaten our value.

These two executives participate in committee discussions purely in an informational and advisory capacity, but have no vote in the committee’s decision-making process. No executive officer other than the Executive Chairman and Senior Vice President for Human Resources attends those portions of Compensation Committee meetings during which the performance of the executive officers is evaluated or their compensation is being determined.

Executive Compensation Program

Our compensation structure primarily consists of the following components:

 

base salary;

 

performance-based incentive pay, which includes both profitability and risk management measurements;

 

long-term award(s)—including stock option grants, supplemental executive retirement agreements and survivor benefit agreements; and

 

benefits available to all employees, including a 401(k) plan and an employee stock ownership plan.

We consider market practices to achieve an overall compensation program that aims to provide a total compensation package for our executive officers that is generally competitive with the compensation paid to similarly situated executive and senior officers of comparable-sized financial institutions. We review the market practices by speaking to recruitment agencies and reviewing the data on financial institutions of similar size, growth potential and market area as reported in publicly available documents, such as proxy statements. We do not currently have a policy to recapture performance-based incentive pay or other compensation in the event that the metrics used to determine the compensation are later restated.

Base Salary

One of the objectives of our compensation program is to establish base salaries for executive officers that are competitive to those of comparable companies in our industry and our local market place. We believe that base salaries should be competitive to attract and retain talented senior management. We consult various sources to identify adequate and competitive base salary levels, including industry surveys, feedback from recruiters and information contained in publicly available documents. The base salary levels for David R. Harlow, the Chief Executive Officer of BancFirst Corporation, and Darryl Schmidt, the Chief Executive Officer of our subsidiary bank, BancFirst (together, the “CEOs”), are established annually by the Executive Chairman and submitted to the Compensation Committee for review and recommendation to the full Board of Directors for approval. The Compensation Committee’s review of the CEOs’ base salaries was based on the factors above, including the current financial performance of the Bank as measured by earnings, asset growth, and overall financial soundness. Base salary for the other executive officers is established by Messrs. Harlow or Schmidt, and is submitted for review and approval by the Compensation Committee. In setting base salaries, Messrs. Harlow or Schmidt consider the seniority and level of responsibility of each executive officer, taking into account competitive market compensation paid by other companies as described above. Salaries for executive officers are reviewed on an annual basis as well as at the time of a promotion or other change in level of responsibilities. Increases in base salary are based on the evaluation of factors such as the individual’s level of responsibility, performance and level of compensation. The salaries paid during fiscal year 2017 to our named executive officers are shown in the Summary Compensation Table.

Annual Performance-Based Incentive Pay

We believe that the payment of performance-based incentive compensation based on business and personal goals is important to focus our executive officers on the achievement of short-term corporate goals. Accordingly, all of our executive officers are eligible to receive an annual cash amount based on our performance-based incentive program. The performance-based incentive program is designed to reward our executive officers for the attainment of short-term business and/or personal performance goals that are established at the beginning of each fiscal year, and can be in amounts ranging from 10% to 20% of the executive officer’s base salary. Performance-based incentive compensation for the CEO’s is established by our Executive Chairman, subject to review and

20


 

approval by the Compensation Committee. Performance-based incentive compensation for our other executive officers is established by Messrs. Harlow or Schmidt, subject to review and approval by the Compensation Committee.  Messrs. Harlow or Schmidt and the Compensation Committee use judgment and discretion taking into account the business and economic environment, our overall performance, budgetary considerations, each executive officer’s performance in relation to the goals set for him, competitive factors within the industry, and retention of key executives.

Annual incentive payments under the plan for a particular year with respect to executive officers who are in bank senior management are based on a combination of financial and individual performance criteria established before the beginning of the year.  Such performance criteria generally will vary depending on the executive officer’s authority. Thus, for example, for those executive officers having authority or responsibility over the entire company, the performance criteria includes the attainment, on a company-wide basis, of budgeted earnings, budgeted levels of classified assets, results of our internal operational audits and results of regulatory compliance audits.  For executive officers having line authority over a particular group of branches, such as Regional Executives, the performance criteria includes the attainment of these same objectives, but only with respect to the particular branches over which the executive officer has responsibility. For executive officers having responsibility over various corporate administrative functions, annual incentive payments are based primarily on the attainment of individual performance objectives negotiated at the beginning of the year. Attainment of individual performance objectives is based on a subjective evaluation of each individual officer’s performance.  An executive officer’s potential cash incentive payment depends upon two factors: (x) the executive’s position with the bank, which establishes a maximum cash incentive award as a percent of base salary and (y) the extent to which the performance criteria have been achieved, with the concurrence of the Messrs. Harlow or Schmidt and the Compensation Committee. Whenever the specified performance criteria are not fully met, the Executive Chairman and the Compensation Committee determine the amount of incentive compensation paid, if any, based on their subjective evaluation of the extent to which the criteria were met and other factors. The Compensation Committee conducts an evaluation of the CEOs’ individual performances and determines the appropriate amount of performance-based incentive pay.  

The payment of performance-based incentive compensation generally occurs in December of each year in respect of achievements of the fiscal year then ending. For 2017, each of the named executive officers was eligible for performance-based incentive compensation from 10% to 20% of the respective executive’s base salary. As discussed in detail below, each of the named executive officers received the maximum performance-based incentive compensation totaling 20.0% of his base salary.

Mr. Harlow

For 2017, Mr. Harlow was eligible for a bonus of up to 20% of his base salary, based upon budgeted pre-tax income and budgeted classified assets for our principal bank subsidiary, BancFirst, and the results of the internal audits of the Bank’s branches, all determined on a company-wide basis. Each of these factors was weighted, as indicated in the following table:

 

Objectives for 2017

 

 

Maximum Percentage
of Base Salary

 

 

2017 Goal

 

 

Actual 2017

Performance

 

Budgeted pre-tax income for BancFirst

 

 

9.00

%

 

$

111,940,000

 

 

$

135,472,000

 

Budgeted classified assets for BancFirst

 

 

9.00

%

 

 

(1

)

 

 

(1

)

Internal audit

 

 

2.00

%

 

 

(2

)

 

 

(2

)

 

(1)

Federal and state banking regulations prohibit us from disclosing information contained in regulatory agency examination reports, such as amounts of classified assets.

(2)

Branches are assigned internal scores from 1 to 5, with 1 being the best, based on results of regulatory compliance audits as well as management’s subjective assessment of each branch’s performance in certain other categories, such as information technology, trust and insurance services.  The maximum incentive compensation of 2% available for the internal audit metric was based on an average score of 1.32, calculated by dividing the total of the scores for all branches by the total number of bank branches.

 

The budgeted pretax income goal and budgeted classified assets goal were fully attained, as was the branch internal audit goal.  Accordingly, the Executive Chairman recommended that the committee ratify his determination that Mr. Harlow be paid 100% of the maximum bonus amounts for each goal, which resulted in Mr. Harlow receiving a total cash incentive bonus for 2017 equal to 20% of his base salary.

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Mr. Schmidt

 

For 2017, Mr. Schmidt was eligible for a bonus of up to 20% of his base salary, based upon budgeted pre-tax income and budgeted classified assets for our principal bank subsidiary, BancFirst, and the results of the internal audits of the Bank’s branches, all determined on a company-wide basis. Each of these factors was weighted, as indicated in the following table:

 

Objectives for 2017

 

 

Maximum Percentage
of Base Salary

 

 

2017 Goal

 

 

Actual 2017

Performance

 

Budgeted pre-tax income for BancFirst

 

 

9.00

%

 

$

111,940,000

 

 

$

135,472,000

 

Budgeted classified assets for BancFirst

 

 

9.00

%

 

 

(1

)

 

 

(1

)

Satisfactory branch internal audits for BancFirst

 

 

2.00

%

 

 

(2

)

 

 

(2

)

 

(1)

Federal and state banking regulations prohibit us from disclosing information contained in regulatory agency examination reports, such as amounts of classified assets.

(2)

Branches are assigned internal scores from 1 to 5, with 1 being the best, based on results of regulatory compliance audits as well as management’s subjective assessment of each branch’s performance in certain other categories, such as information technology, trust and insurance services.  The maximum incentive compensation of 2% available for the internal audit metric was based on an average score of 1.32, calculated by dividing the total of the scores for all branches by the total number of bank branches.

 

The budgeted pretax income goal and budgeted classified assets goal were fully attained, as was the branch internal audit goal.  Accordingly, the Executive Chairman recommended that the committee ratify his determination that Mr. Schmidt be paid 100% of the maximum bonus amounts for each goal, which resulted in Mr. Schmidt receiving a total cash incentive bonus for 2017 equal to 20% of his base salary.

Mr. Lawrence

For 2017, Mr. Lawrence was eligible for a bonus of up to 20% of his base salary.  The 2017 performance objectives for Mr. Lawrence included no specific financial objectives, but instead related to strategic and operational objectives in connection with Mr. Lawrence’s role throughout the year as Chief Financial Officer. Mr. Lawrence’s performance objective for 2017 included the following:

 

Ensuring the integrity and timeliness of financial and regulatory reporting;

 

Continuing to monitor actual financial performance as compared to budget;

 

Overseeing and monitoring our tax credit investments;

 

Evaluating and appropriately managing finance and accounting organizational structure, systems, workflow and staffing requirements;

 

Managing the budgeting and forecasting process; and

 

Overseeing the capital plan for us, including monitoring capital levels and recommending appropriate adjustments as needed.

 

In reviewing Mr. Lawrence’s attainment of those objectives, the Executive Chairman made a subjective determination that Mr. Lawrence was generally successful in achieving the objectives set for him. Accordingly, Mr. Harlow recommended that the committee ratify his determination that Mr. Lawrence be paid 100% of his maximum possible bonus, which resulted in Mr. Lawrence receiving a total cash incentive bonus for 2017 equal to 20% of his base salary.

Mr. Rainbolt

For 2017, Mr. Rainbolt was eligible for a bonus up to 20% of his base salary, based upon budgeted pre-tax income and budgeted classified assets for our principal bank subsidiary, BancFirst, and the results of the internal audits of the Bank’s branches, all determined on a company-wide basis. Each of these factors was weighted, as indicated in the following table:

 

Objectives for 2017

 

 

Maximum Percentage
of Base Salary

 

 

2017 Goal

 

 

Actual 2017

Performance

 

Budgeted pre-tax income for BancFirst

 

 

9.00

%

 

$

111,940,000

 

 

$

135,472,000

 

Budgeted classified assets for BancFirst

 

 

9.00

%

 

 

(1

)

 

 

(1

)

Internal audit

 

 

2.00

%

 

 

(2

)

 

 

(2

)

 

(1)

Federal and state banking regulations prohibit us from disclosing information contained in regulatory agency examination reports, such as amounts of classified assets.

22


 

(2)

Branches are assigned internal scores from 1 to 5, with 1 being the best, based on results of regulatory compliance audits as well as management’s subjective assessment of each branch’s performance in certain other categories, such as information technology, trust and insurance services.  The maximum incentive compensation of 2% available for the internal audit metric was based on an average score of 1.32, calculated by dividing the total of the scores for all branches by the total number of Bank branches.

The budgeted pretax income goal, budgeted classified assets goal and internal audit goal were fully attained. Accordingly, the Executive Chairman recommended that the committee ratify his determination that he be paid 100% of the maximum bonus amounts for each goal, which resulted in Mr. Rainbolt receiving a total cash incentive bonus for 2017 equal to 20% of his base salary.

Mr. Brand

 

For 2017, Mr. Brand was eligible for a bonus up to 20% of his base salary, based upon budgeted pre-tax income and budgeted classified assets for our principal bank subsidiary, BancFirst, and the results of the internal audit of the Bank’s branches, all determined on a company-wide basis.  Each of these factors was weighted, as indicated in the following table: 

 

Objectives for 2017

 

 

Maximum Percentage
of Base Salary

 

 

2017 Goal

 

 

Actual 2017

Performance

 

Budgeted pre-tax income for BancFirst

 

 

9.00

%

 

$

111,940,000

 

 

$

135,472,000

 

Budgeted classified assets for BancFirst

 

 

9.00

%

 

 

(1

)

 

 

(1

)

Internal audit

 

 

2.00

%

 

 

(2

)

 

 

(2

)

 

(1)

Federal and state banking regulations prohibit us from disclosing information contained in regulatory agency examination reports, such as amounts of classified assets.

(2)

Branches are assigned internal scores from 1 to 5, with 1 being the best, based on results of regulatory compliance audits as well as management’s subjective assessment of each branch’s performance in certain other categories, such as information technology, trust and insurance services.  The maximum incentive compensation of 2% available for the internal audit metric was based on an average score of 1.32, calculated by dividing the total of the scores for all branches by the total number of Bank branches.

The budgeted pretax income goal, budgeted classified assets goal and internal audit goal were fully attained. Accordingly, the Executive Chairman recommended that the committee ratify his determination that Mr. Brand be paid 100% of the maximum bonus amounts for each goal, which resulted in Mr. Brand receiving a total cash incentive bonus for 2017 equal to 20% of his base salary.

Long-Term Awards

Stock Option Grants

Executive officers receive equity compensation awards in the form of nonqualified incentive stock options under the BancFirst Corporation Stock Option Plan (the “Employee Plan”). The stock options are designed to align the interests of the executive officers with the shareholders’ long-term interests by providing them with equity awards that generally are exercisable beginning four years from the date of grant at the rate of 25% per year for four years. Historically, the Company has not granted equity awards to the same degree as its peers; typically, option grants have been made either as an employment incentive in connection with the Company’s efforts to employ an executive officer, as a retention device or to focus executive officers on the achievement of long-term corporate goals. The Employee Plan was adopted by the Board of Directors in 1986 and has been amended several times since its adoption to increase the number of shares issuable under the plan and to extend the term of the plan, which currently extends to December 31, 2019. The Company does not have stock ownership guidelines for its directors or executive officers. Given the Executive Chairman’s significant existing stock ownership in the Company, he has recommended to the Compensation Committee that he not be granted any additional stock options. Awards granted to our other executive officers are recommended by our Executive Committee and ratified by the full Board.

All stock options granted under the Employee Plan are made at the market price at the time of the award. The Company has never granted stock options with an exercise price that is less than the closing price of the Company’s common stock as reported by NASDAQ on the grant date, nor has it granted stock options which were priced on a date other than the grant date. The long-term incentive award information for the Company’s named executive officers during fiscal year 2017 is included in “— Executive Compensation—Option Grants in Last Fiscal Year” and additional information on the option awards is shown in “—Executive Compensation—Outstanding Equity Awards at Fiscal Year-End.”

Supplemental Executive Retirement Agreements

In 2007, the Company entered into supplemental retirement agreements with a number of the Company’s executive officers designated by the Executive Chairman. These agreements seek to encourage the executive officers who are parties to such agreements to remain employed with the Company. Under the terms of the agreements, which were approved by the Compensation Committee,

23


 

the signatory executive officer will receive a specified annual benefit paid in monthly installments for a specified number of years, typically 10 years, after retirement at age 65. If the executive officer’s employment is terminated by the Company for cause or by reason of voluntary early retirement, the executive officer will not receive any benefits under the agreement. The agreements also provide for specified benefits (generally, the discounted present value of the income stream) in the event of a change-in-control or involuntary early retirement. For details regarding the terms and payments under the supplemental retirement agreement for David R. Harlow and Darryl Schmidt, the only named executive officers receiving such a benefit, see “—Executive Compensation—Potential Payments on Termination or Change-in-Control.”

Survivor Benefit Agreements

The Company has also entered into survivor benefit agreements with a number of the Company’s executive officers designated by the Executive Chairman. In connection with these agreements, the Company purchased life insurance policies with respect to the relevant individuals. Under these agreements, the Company owns the insurance policies, is entitled to the cash value of the policies and is responsible for paying the associated premiums. Upon the executive officer’s death while still employed with the Company, a beneficiary selected by the executive officer is entitled to a specified amount of the death benefit under the policy. The survivor benefit agreement and any benefit from it terminates upon the executive officer’s termination of employment for any reason, including retirement or disability. David R. Harlow and Darryl Schmidt are the only named executive officers who participated in this benefit. The value of the benefit is included in All Other Compensation in the Summary Compensation Table.

Benefits Available to All Employees

The Company maintains a 401(k) employee savings and retirement plan, as well as an employee stock ownership plan (“ESOP”), both of which are broad-based plans covering all full-time employees, including the Company’s executive officers, who have attained the age of 21 years and who have completed six months of employment during the year. The Company’s matching contribution to the 401(k) plan equals 50% of the first 6% of pay that is contributed by a participating employee to the plan.  Benefits under the ESOP are based solely on the amount contributed by the Company, which is used to purchase the Company’s common stock. A participant’s allocation is the contribution percentage approved by the Board times the participant’s eligible compensation for that year. The total amount contributed by the Company to the ESOP for 2017 was $2,645,000, and the total amount contributed by the Company to the 401(k) plan in 2017 was $2,229,000. The contribution to the ESOP is based primarily on profits of the Company, but any contribution to the ESOP is within the sole discretion of the Board and there are no specific performance measures set forth in the ESOP. The Company’s contribution to these plans in 2017 is included as one of the components of compensation reported in “Summary Compensation Table – All Other Compensation.”

The Company offers group health and dental benefits to all full-time employees.  A specified amount of the premium is paid by the Company for all participating employees, and the employees pay the additional amount of the premium for their respective level of coverage. The Company also provides fully-paid group term life insurance and long-term disability insurance to all full-time employees. The benefits under these group plans are based on the annual salaries of the employees.

Perquisites

The Company generally limits perquisites that it makes available to executive officers to those that are available to all employees or are required for their efficient conduct of Company business. Three of the five named executive officers are furnished company-owned automobiles.  Certain of the named executive officers and other executive officers are also provided with club memberships and cell phones.  Pursuant to the Company’s Aircraft Policy, the named executive officers and other management employees are provided use of the Company’s aircraft for business purposes.  Generally, no named executive officer is provided use of the Company aircraft for personal travel.  Pursuant to the Aircraft Policy, any such use is fully charged against the individual, at a rate of $650 per flight hour plus pilot expenses.  The Company aircraft is owned jointly by the Company’s banking subsidiary and an entity affiliated with H.E. Rainbolt and David E. Rainbolt, whose personal use of the Company aircraft is governed by the terms of a Joint Ownership Agreement.  Information on the perquisites received by the named executive officers is included in “Summary Compensation Table – All Other Compensation.”

Employment Arrangements

The Company does not have employment arrangements with any of the named executive officers or any other executive officer.

Tax and Accounting Information

Deductibility of Executive Compensation. The qualifying compensation regulations issued by the Internal Revenue Service under Internal Revenue Code section 162(m) provide that no deduction is allowed for applicable employee remuneration paid by a publicly held corporation to a covered employee to the extent that the remuneration exceeds $1.0 million for the applicable taxable year, unless

24


 

specified conditions are satisfied. Currently, remuneration is not expected to exceed $1.0 million for any employee.  Therefore, the Company does not expect that compensation will be affected by the qualifying compensation regulations.

Summary Compensation Table

The following table sets forth information relating to all compensation awarded to, earned by or paid to the Company’s principal executive officer, principal financial officer, and three most highly compensated officers other than the principal executive officer and principal financial officer, collectively referred to as the named executive officers in this document, for services rendered in all capacities to the Company during the last three fiscal years ended December 31, 2017.

Summary Compensation Table

 

Name and Principal Position

 

 

Year

 

 

Salary

($)

 

 

Performance-based

Incentive Pay

($)

 

 

Option Awards

($)

 

 

Change in Pension

Value and

Non-qualified

Deferred Compensation

Earnings

($)

 

 

All Other

Compensation

($) (2)

 

 

Total

($)

 

David R. Harlow (7)

 

2017

 

 

$

412,662

 

 

$

90,640(6)

 

 

 

 

$        33,144(1)

 

 

$

23,888

(3)(4)

 

$

560,334

 

CEO

 

2016

 

 

$

364,000

 

 

$

112,970(6)

 

 

 

 

$        30,126(1)

 

 

$

22,006

(4)

 

$

529,102

 

 

 

2015

 

 

$

325,000

 

 

$

45,500

 

 

 

 

$        27,343(1)

 

 

$

21,240

(4)

 

$

419,083

 

Kevin Lawrence (5)

 

2017

 

 

$

250,000

 

 

$

50,000

 

 

 

 

 

 

 

$

16,416

 

 

$

316,416

 

Executive Vice President

 

2016

 

 

$

238,000

 

 

$

47,600

 

 

 

 

 

 

 

$

15,689

 

 

$

301,289

 

and CFO

 

2015

 

 

$

214,231

 

 

$

45,000

 

 

$

326,735

 

 

 

 

$

11,979

 

 

$

597,945

 

David E. Rainbolt (7)

 

2017

 

 

$

433,462

 

 

$

85,000

 

 

 

 

 

 

$

37,600

(3)

 

$

556,062

 

Executive Chairman

 

2016

 

 

$

445,000

 

 

$

48,950

 

 

 

 

 

 

$

35,283

(3)

 

$

529,233

 

 

 

2015

 

 

$

425,000

 

 

$

85,000

 

 

 

 

 

 

$

33,157

(3)

 

$

543,157

 

Dennis L. Brand (7)

 

2017

 

 

$

475,769

 

 

$

85,000

 

 

 

 

 

 

$

29,223

(3)(4)

 

$

589,992

 

Chairman of the Executive

 

2016

 

 

$

545,000

 

 

$

59,950

 

 

 

 

 

 

$

25,474

(3)(4)

 

$

630,424

 

Committee

 

2015

 

 

$

525,000

 

 

$

105,000

 

 

 

 

 

 

$

24,388

(3)(4)

 

$

654,388

 

Darryl Schmidt (7)

 

2017

 

 

$

412,662

 

 

$

87,000

 

 

 

 

$

32,865

(1)

 

$

21,784

(3)(4)

 

$

554,311

 

President and

 

2016

 

 

$

364,000

 

 

$

52,178

 

 

 

 

$

29,857

(1)

 

$

18,161

(4)

 

$

464,196

 

CEO of BancFirst

 

2015

 

 

$

350,000

 

 

$

73,500

 

 

 

 

$

27,096

(1)

 

$

18,526

(4)

 

$

469,122

 

 

(1)

Represents the change in the present value of accumulated benefit payable to Messrs. Harlow and Schmidt under the Supplemental Executive Retirement Agreement dated November 15, 2006.

(2)

Includes for each of the named executive officers contributions by the Company to the Retirement Plans and the values attributed to certain life insurance benefits.  The amounts of contributions to the Retirement Plans for 2017 for each of the named executive officers were: David R. Harlow - $16,362; David E. Rainbolt - $16,362; Kevin Lawrence - $16,362; Dennis L. Brand - $16,362; Darryl Schmidt - $16,362.

(3)

Includes directors’ fees paid to the respective named executive officers.

(4)

Includes the values attributed to the personal use of Company owned automobiles provided to the respective named executive officers (as calculated in accordance with Internal Revenue Service guidelines).

(5)

Mr. Lawrence was appointed CFO effective April 1, 2015.

(6)

Mr. Harlow was paid a bonus of $29,250 in February 2016 that related to his 2015 compensation package. In addition, he was paid $3,640 in January of 2017 related to his 2016 compensation package.

(7)

In May 2017, Mr. Rainbolt assumed the role of Executive Chairman, Mr. Harlow assumed the role of CEO, Mr. Brand became Chairman of the Executive Committee and Mr. Schmidt assumed the role of CEO of BancFirst.

 

 

25


 

Grants of Plan-Based Awards

No stock option grants were made to any of the named executive officers during 2017.

Outstanding Equity Awards at Fiscal Year-End

The following table includes certain information with respect to the value of all unexercised options previously awarded to the named executive officers at December 31, 2017.

 

Option Awards

 

Name

 

Number of Securities

Underlying Unexercised Options (#) Exercisable

 

 

Number of Securities

Underlying Unexercised Options

(#) Unexercisable

 

 

Option

Exercise

Price ($)

 

 

Option

Expiration Date

 

David R. Harlow

 

 

20,000

 

 

 

 

 

$

18.23

 

 

 

2/18/2020

 

 

 

 

20,000

 

 

 

 

 

$

20.18

 

 

 

3/6/2021

 

David E. Rainbolt

 

 

 

 

 

 

 

 

 

 

 

 

Kevin Lawrence

 

 

12,500

 

 

 

37,500

(1)

 

$

21.43

 

 

5/31/2028

 

 

 

 

 

 

 

50,000

(2)

 

$

32.30

 

 

6/19/2030

 

Dennis L. Brand

 

 

 

 

 

 

 

 

 

 

Darryl Schmidt

 

 

42,500

 

 

 

 

 

$

12.50

 

 

5/2/2018

 

 

(1)

Mr. Lawrence’s options will vest at various dates through May 13, 2020.

(2)

Mr. Lawrence’s options will vest at various dates through June 19, 2022.

 

Option Exercises

The following table shows the number of shares acquired and the value realized on the exercise of stock options during 2017 for each of the Company’s named executive officers.

 

Option Awards

 

Name

 

Number of Shares

Acquired on Exercise

(#)

 

 

Value Realized

on Exercise

($)

 

David R. Harlow

 

 

 

 

 

 

David E. Rainbolt

 

 

 

 

 

 

Kevin Lawrence

 

 

 

 

 

 

Dennis L. Brand

 

 

25,000

 

 

$

734,382

 

Darryl Schmidt

 

 

17,500

 

 

$

665,303

 

 

Equity Compensation Plan Information

The following table provides certain information, as of December 31, 2017, concerning certain compensation plans under which the Company’s equity securities are authorized for issuance.

 

Plan Category

 

(a)

Number of Securities

to be Issued Upon

Exercise of

Outstanding Options,

Warrants, and Rights

 

 

(b)

Weighted Average

Exercise Price of

Outstanding

Options, Warrants

and Rights

 

 

(c)

Number of Securities

Remaining

Available for Future Issuance

Under Equity Compensation

Plans (Excluding Securities

Reflected in Column(a))

 

Equity compensation plans approved by security holders

 

 

1,412,393

 

 

$

25.59

 

 

 

421,146

 

Equity compensation plans not approved by security holders

 

 

 

 

 

 

 

 

 

Total

 

 

1,412,393

 

 

$

25.59

 

 

 

421,146

 

 

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Supplemental Retirement Benefits

The table below shows the present value of accumulated benefit payable to David R. Harlow and Darryl Schmidt under the Supplemental Executive Retirement Agreement dated November 15, 2006. None of the other named executive officers are covered by a supplemental retirement agreement. The number of years of credited service for Messrs. Harlow and Schmidt is their total years of service with the Company.  The present value of accumulated benefit payable to Messrs. Harlow and Schmidt was determined using a retirement age of 65 and a discount rate of 6%.

 

Name

 

Plan Name

 

Number of Years

of Credited Service

(#)

 

 

Present Value of

Accumulated Benefit

($)

 

 

Payments During

Last Fiscal Year

($)

 

David R. Harlow

 

Supplemental Executive Retirement Agreement

 

 

18.3

 

 

$

234,185

 

 

 

 

Darryl Schmidt

 

Supplemental Executive Retirement Agreement

 

 

14.6

 

 

$

232,097

 

 

 

 

 

Under the terms of the Supplemental Executive Retirement Agreement, if Messrs. Harlow or Schmidt remains continually employed with the Bank until age 65, Mr. Harlow and Mr. Schmidt will be entitled to a supplemental retirement benefit of $100,000 per year for ten years, irrespective of whether they then retire or continue to be employed by the Bank beyond age 65.  If Messrs. Harlow or Schmidt dies during the ten-year period, their surviving spouse or other designated beneficiary will receive the remaining payments over the remainder of the ten-year period. A lump-sum distribution, equal to the discounted present value of the aggregate supplemental payments, is payable upon separation from service following a change of control of the Bank or if Messrs. Harlow or Schmidt is terminated without cause between the ages of 59 and 65.  No benefits are payable under the agreement if Messrs. Harlow or Schmidt (i) ceases to be employed by the Bank for any reason (other than death) prior to reaching age 59 or (ii) is terminated by the Bank for “cause,” as such term is defined in the agreement, prior to reaching age 65. If Messrs. Harlow or Schmidt dies before age 65 while still employed with the Bank, his surviving spouse or other designated beneficiary will receive a lump sum distribution equal to a percentage of the total lump sum amount of Messrs. Harlow or Schmidt supplemental retirement income, calculated on the percentage that the total number of months between the effective date of the agreement and the executive’s death represents of the total months between the effective date of the agreement and the date the executive would have reached age 65.  Messrs. Harlow or Schmidt will forfeit any non-distributed benefits payable under the agreement if he violates certain non-compete and confidentiality restrictions in the agreement.

Potential Payments upon Termination or Change-in-Control

Except for the Supplemental Executive Retirement Agreement of David R. Harlow and Darryl Schmidt described above, the Company has no agreements with any other named executive officer providing for potential payments upon termination of employment or a change-in-control of the Company.

Pay Ratio Disclosure

This year, new rules enacted by the SEC require us to disclose the ratio of the annual total compensation of our CEO, David R. Harlow, to the median employee’s annual total compensation. For 2017, Mr. Harlow’s annual total compensation was $560,334 and the median employee’s annual total compensation was $37,567. Based upon this information, the ratio of the annual total compensation of Mr. Harlow to the median employee was 15 to 1. Until Mr. Harlow’s appointment as CEO in May 2017, David E. Rainbolt served as CEO. For 2017, Mr. Rainbolt’s annual total compensation was $556,062. Accordingly, the annual total compensation of Mr. Rainbolt to the median employee was also 15 to 1.

In identifying our median employee, we examined our employee population as of December 31, 2017. Our median employee was determined by reviewing wages, tips and other compensation on payroll records for our employee population, as reported to the IRS on Form W-2. We calculated the ratio based on total employees of 1,832 on this date.

The pay ratio identified above is a reasonable estimate calculated in a manner consistent with SEC rules. Pay ratios that are reported by our peers may not be directly comparable to ours because of differences in the composition of each company’s workforce, as well as the assumptions and methodologies used in calculating the pay ratio, as permitted by SEC rules.

DIRECTOR COMPENSATION

The Company provides the following elements of compensation for its non-employee directors, each of whom is also a director of the Bank:

 

A retainer of $1,500 per quarter to each non-employee director for serving on the Board.

 

A retainer of $1,500 per month to each non-employee director for serving on the Bank Board of Directors.

27


 

 

A retainer of $1,500 per month to each member of the Audit Committee.

 

A retainer of $3,750 per quarter to the chairman of the Audit Committee.

 

A fee of $1,500 per meeting to each member of the Compensation Committee.

 

A fee of $12,125 per quarter to the Lead Independent Director.

 

A grant of 10,000 options to each non-employee director at the time of their initial appointment or election to the Board.

The Company pays employee directors each a retainer of $500 per quarter for their services as directors.

The option grants are provided under the BancFirst Corporation Non-Employee Directors’ Stock Option Plan (the “Directors’ Stock Plan”) and are exercisable at the rate of 25% per year beginning one year from the date of grant.  If a director is terminated for cause, all options will be forfeited immediately.  If a director ceases to be member of the Board for any other reason, unvested options will terminate and only previously vested options may be exercised for a period of 30 days following termination (or 12 months in the case of termination on account of death).

Non-employee directors can elect to defer all or any portion of their cash compensation through Deferred Stock Compensation Plan.  Under the Deferred Stock Compensation Plan, directors of the Company and members of the community advisory boards of the Bank may defer up to 100% of their Board fees.  They are credited for each deferral with a number of stock units based on the current market price of the Company’s stock, which accumulate in an account until such time as the director or community board member terminates service as a Board member.  Shares of the Company’s common stock are then distributed to the terminating director or community board member based upon the number of stock units accumulated in his or her account.  Because stock units are not actual shares of the Company’s common stock, they do not have any voting rights.

Additionally, non-employee directors may be reimbursed for their expenses in connection with attending Board meetings.

The following table provides compensation information for the Company’s directors who served during fiscal 2017.

Director Compensation

 

 

 

Earned or

 

 

Stock

 

 

Option

 

 

All Other

 

 

 

 

 

 

 

Paid in Cash

 

 

Awards

 

 

Awards

 

 

Compensation

 

 

Total