BancFirst Corporation (BANF) Earnings Call Transcript & Summary

Good morning. I'm David Rainbolt, the Executive Chairman, BancFirst Corporation. And welcome to the Special Shareholders' Meeting of BancFirst Corporation. Logistically, we have -- we believe 9 attendees on the phone. So...

This is -- Ron's on the phone.

What we're going to do is just leave each person to mute their own phone. With that view, people on the phone, we'll just let each of you handle your own muting. And that way, you can speak up whenever you wish. So to get underway. Randy, would you please provide proof for the notice of the meeting?

Yes. So I have a certified copy of the notice of this meeting. It was mailed on November 30 to the shareholders of record as of October 30. And on that date, there were 32,682,269 shares of common stock outstanding. And I also have the record list of shareholders as of that date.

Okay. And I would ask, is there anyone present on the call who intends to vote in person today? Okay. If not, then, Kevin, do we have a quorum present? By the way, Randy Foraker's our Corporate Secretary, Kevin Lawrence is our CFO, is in attendance, along with David Harlow, CEO, with the holding company. So Kevin, do we have a quorum present?

The number of shares represented by proxy or in person is 28,872,901 shares, which is to 88.34% of the shares outstanding. There is a quorum present.

Okay. Since there is a quorum present, the meeting is hereby declared convened. The proposal is to amend and restate the BancFirst Corporation stock option plan. Randy, would you touch on the principal changes to the plan being proposed?

Yes. And just a brief explanation, our stock option plan is not a qualified stock option plan under ERISA. So it is intentionally limited to officers of the company. And it is, by that nature, discriminatory. So it is not a broad-based ERISA-type employee plan. And our plan is administered by the Board of Directors who has delegated the authority for the day-to-day administration to the Executive Committee of our Board of Directors. The proposal to amend and restate the plan implemented several changes that I'll briefly describe. For one thing, it describes the specific authority of the committee in more detail. Our previous plan document was not as detailed regarding that authority as we would like. So we've expanded that. It also provides an exception to give the Committee the authority only through cancellation and regrant, to reestablish the option exercise price of stock options in specific circumstances. And that authority would be limited to a total of 300,000 shares in any rolling 12-month continuous period. The purpose of that is to provide a limitation on that authority, so that if a need arose or a reason arose to do a more broad reprize of stock options, then, of course, the company would have to request approval of the shareholders to exceed that limit. Another change is to authorize the company to retain shares of common stock in payment for the exercise price. Our plan currently does not permit that, and that is a desirable change so that we actually issue fewer numbers of shares for stock option exercises. Another change would be to provide a more explicit procedure for the stock option exercises. The description of that in our current plan document is not as detailed as we would like. Another change is to extend the exercise period after termination but just related to retirement and disability to 6 months. Currently, that period for exercise is within 3 months after retirement or disability, and we would like to provide a longer period for the optionees is to be able to exercise their options after termination for those reasons. It would also extend the exercise -- pardon me. It would also authorize the committee to reinstate a stock option that had been forfeited due to termination if the employee is rehired within 12 months following their termination, provided that the restatement -- or reinstatement does not extend the expiration of the stock option. So we have had situations in the past where an employee has lived to go to another job, and that hasn't worked out, and then they have come back and we've rehired them. And we would like the ability to reinstate their stock options as they were at the time that they terminated, but without extending the term of the option. So the option that was reinstated would still have the same 15-year term that it had before. Also, the changes add specific provisions for tax withholding and authorize the company to retain shares of common stock in order to satisfy the tax withholding. As I said, this is a nonqualified plan and so the options, the [indiscernible] are taxable at the time of exercise, and we have been collecting taxes on those exercises in cash. We would like the ability to be able to retain shares of stock from the exercise to satisfy that tax withholding. Again, that would result in us issuing fewer shares over time. And then finally, the changes expand the provision for amendments of the plan to clarify that the requirement for shareholder approval of material amendments conforms with the NASDAQ stock market rules. Our current plan document does not match as the NASDAQ stock market rules as explicitly as we would like. So those are the significant changes that we're proposing in this amended and restated plan.

Thank you, Randy. So are there any questions about the proposal, any discussion? Just speak up if you've got a question or point you want to make. Any comments, any questions? Hearing none, Kevin, will you please report on the results of the election?

Yes. 18,540,032 shares or 56.73% of the shares outstanding voted for the proposal. Of the shares voted, 64.21% voted for the proposal. Proposal has been approved.

Thank you. Are there any other questions or comments by anybody that's on the call? I want to be sure you've had an opportunity to speak up, so. All right. Well, hearing none. Thank you for being here. Happy holidays to each of you, and I hope you'll join our regular Annual Shareholders Meeting in May. I guess, vaccine-wise, there's a chance we'll even meet in person. Let's hope so for all of us. And I hope you have a -- I hope we all have a better 2021 than 2020. Is there any objection to adjournment? Hearing none, we'll stand adjourned. Thank you, again.

Merry Christmas, David.

Yes. Thank you.

Merry Christmas.