| ● | Identify, screen and recommend to risk management, including cybersecurity risks, intended to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance stockholder value. Ourour Board of Directors individuals qualified to serve as members, and the Risk Committee are actively involved in establishing and refining our business strategy, including assessing management’s appetite for risk and determining the appropriate level of overall risk for the Company. The Company conducts continual assessments through its enterprise risk function.While the Board of Directors has the ultimate oversight responsibility for the risk management process, variouson committees, of the Board of Directors outside of the Risk Committee also have responsibility for risk management. In particular, the Audit Committee focuses on financial risk, including internal controls, and, from time to time, discusses and evaluates matters of risk, risk assessment and risk management with our management team. The Compensation Committee is responsible for overseeing the management of risk associated with our compensation policies and arrangements. The Nominating and Corporate Governance Committee ensures that the internal rule processes by which we are governed are consistent with prevailing governance practices and applicable laws and regulations. Finally, the Investment Committee ensures that our funds are invested in accordance with policies and limits approved by it. Our Senior Officer Code of Ethics, General Code of Ethics and Business Conduct, committee charters and other governance documents are reviewed by the appropriate committees annually to confirm continued compliance, ensure that the totality of our risk management processes and procedures is appropriately comprehensive and effective and that those processes and procedures reflect established best practices.
Board Performance
Our
| ● | Advise our Board of Directors conducts an evaluation of performance with a viewrespect to improving effectivenessthe composition, procedures and committees of the Board of Directors. In addition, the fullDirectors; |
| ● | Advise our Board of Directors reviews annuallywith respect to the qualificationscorporate governance principles applicable to the Company; and effectiveness of |
| ● | Oversee the Audit Committee and its members.Director Qualifications for Service
As described below, the Nominating and Corporate Governance Committee considers a variety of factors when evaluating a potential candidate to fill a vacancy on the Board of Directors or when nomination of an incumbent director for re-election is under consideration. The Nominating and Corporate Governance Committee and the Board of Directors strive to balance a diverse mix of experience, perspective, skill and background with the practical requirement that the Board of Directors will operate collegially, with the common purpose of overseeing our business on behalf of our stockholders. All of our directors possess relevant experience, and each of them approaches the businessevaluation of the Board of Directors and his or her our management.
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Each member of the Nominating and Corporate Governance Committee is independent in accordance with the listing standards of the NYSE. Risk Committee The purpose of the Risk Committee is to provide assistance to the Board of Directors in its oversight of: | ● | The Company’s risk governance structure; |
| ● | The Company’s risk tolerance; |
| ● | The Company’s risk management and risk assessment guidelines and policies regarding market, credit, operational, liquidity, funding, strategic, regulatory and such other risks as necessary; |
| ● | The Company’s capital and liquidity and funding; and |
| ● | The performance of the Company’s enterprise risk function. |
The duties assigned to the Risk Committee are meant to ensure that there is an effective system reasonably designed to evaluate and control risk throughout the Company. Investment Committee The Investment Committee is responsible for, among other things, reviewing investment policies, strategies and programs; reviewing the procedures that we utilize in determining that funds are invested in accordance with policies and limits approved by the Investment Committee; and reviewing the quality and performance of our investment portfolios and the alignment of asset duration to liabilities. Merger and Acquisition Committee The purpose of the Merger and Acquisition Committee is to review potential mergers, acquisitions or dispositions of material assets or a material portion of any business proposed by management and to report its findings and conclusions to the Board of Directors. Each member of the Merger and Acquisition Committee is independent in accordance with the listing standards of the NYSE. Executive Committee The Executive Committee, with certain exceptions, has the power and authority of the Board of Directors to manage the affairs of the Company between meetings of the Board of Directors.
Corporate Governance General We are committed to good corporate governance practices and, as such, we have adopted formal corporate governance guidelines to maintain our effectiveness. The guidelines govern, among other things, board member qualifications, responsibilities, education and executive sessions. A copy of the corporate governance guidelines may be found at our corporate website at ir.hilltop-holdings.com under the heading “Investor Relations — Overview — Governance Documents.” A copy also may be obtained upon request from our corporate Secretary at the address listed under “Questions” on page 71. Board Leadership Structure We have separated the offices of Chief Executive Officer and Chairman of the Board as a means of separating management of the Company from our Board of Director’s oversight of management. Separating these roles also enables an orderly leadership transition when necessary. We believe, at this time, that this structure provides desirable oversight of our management and affairs. We have in the past appointed, and will continue to appoint, lead independent directors as circumstances require. No lead independent director is appointed at this time. Risk Oversight Our Board of Directors and the Risk Committee of the Board of Directors oversee an enterprise-wide approach to risk management, including cybersecurity risks, intended to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance stockholder value. Our Board of Directors and the Risk Committee are actively involved in establishing and refining our business strategy, including assessing management’s appetite for risk and determining the appropriate level of overall risk for the Company. The Company conducts continual assessments through its enterprise risk function. While the Board of Directors has the ultimate oversight responsibility for the risk management process, various committees of the Board of Directors outside of the Risk Committee also have responsibility for risk management. In particular, the Audit Committee focuses on financial risk, including internal controls, and, from time to time, discusses and evaluates matters of risk, risk assessment and risk management with our management team. The Compensation Committee is responsible for overseeing the management of risk associated with our compensation policies and arrangements. The Nominating and Corporate Governance Committee ensures that the internal rule processes by which we are governed are consistent with prevailing governance practices and applicable laws and regulations. Finally, the Investment Committee ensures that our funds are invested in accordance with policies and limits approved by it. Our Senior Officer Code of Ethics, General Code of Ethics and Business Conduct, committee charters and other governance documents are reviewed by the appropriate committees annually to confirm continued compliance, ensure that the totality of our risk management processes and procedures is appropriately comprehensive and effective and that those processes and procedures reflect established practices. Board Performance Our Board of Directors conducts an evaluation of performance with a view to improving effectiveness of the Board of Directors. In addition, the full Board of Directors reviews annually the qualifications and effectiveness of the Audit Committee and its members. Director Qualifications for Service As described below, the Nominating and Corporate Governance Committee considers a variety of factors when evaluating a potential candidate to fill a vacancy on the Board of Directors or when nomination of an incumbent director for re-election is under consideration. The Nominating and Corporate Governance Committee and the Board of Directors strive to balance a diverse mix of experience, perspective, skill and background with the practical requirement that the Board of Directors will operate collegially, with the common purpose of overseeing our business on behalf of our stockholders. All of our directors possess relevant experience, and each of them approaches the business of the Board of Directors and his or her
responsibilities with great seriousness of purpose. The following describes, with respect to each director, his or her particular experience, qualifications, attributes and skills that qualify him or her to serve as a director: | | | Rhodes R. Bobbitt | | Mr. Bobbitt has an extensive investment background. This is particularly important given the investment portfolios at our subsidiaries. | | | | Tracy A. Bolt | | Mr. Bolt has significant experience concerning accounting and risk matters that is essential to our Audit Committee’s, Risk Committee’s and Board of Directors’ oversight responsibilities. | | | | J. Taylor Crandall | | Mr. Crandall has significant experience in finance and management and board governance, including his experience serving on the boards of directors of public and private companies. | | | | Charles R. Cummings | | Mr. Cummings has an extensive operational and accounting background. His expertise in these matters brings considerable strength to our Audit Committee and Board of Directors in these areas. | | | | Hill A. Feinberg | | Mr. Feinberg has extensive knowledge and experience concerning the broker-dealer segment and the industry in which it operates through his extended period of service to First Southwest and Hilltop Securities. | | | | Gerald J. Ford | | Mr. Gerald J. Ford has been a financial institutions entrepreneur and private investor involved in numerous mergers and acquisitions of private and public sector financial institutions over the past 45 years. His extensive banking industry experience and educational background provide him with significant knowledge in dealing with financial and regulatory matters, making him a valuable member of our Board of Directors. In addition, his service experience on the boards of directors and audit and corporate governance committees of a variety of public companies gives him a deep understanding of the role of the Board of Directors. | | | | Jeremy B. Ford | | Mr. Jeremy B. Ford has extensive executive officer experience and knowledge of our operations. Additionally, he has been actively involved in numerous acquisitions, including those consummated by Hilltop. | | | | J. Markham Green | | Mr. Green has an extensive background in financial services, as well as board service. His investment banking background also provides our Board of Directors with expertise surrounding acquisitions and investments. | | | | William T. Hill, Jr. | | Mr. Hill’s experience with legal and compliance matters, along with his management of a large group of highly skilled professionals, have given him considerable knowledge concerning many matters that come before our Board of Directors. Mr. Hill also serves on several civic and charitable boards, which has given him invaluable experience in corporate governance matters. | | | | Charlotte Jones | | Ms. Jones has significant managerial and executive officer experience with large entrepreneurial businesses and brand management. | | | | Lee Lewis | | Through his service on our Board of Directors and former service on PlainsCapital’s Board of Directors, Mr. Lewis has many years of knowledge of PlainsCapital and the challenges and opportunities that it is presented. The background of Mr. Lewis as an owner and chief executive officer of a Texas-based company also provides unique insight to the Board of Directors. | | | | Andrew J. Littlefair | | Mr. Littlefair has significant experience serving as a director:chief executive officer and as a director of publicly traded companies and provides the Board of Directors with the perspective of one of PlainsCapital’s customers. | | | | | | Charlotte Jones Anderson
| | Ms. Anderson has significant managerial and executive officer experience with large entrepreneurial businesses and brand management.
| | | | Rhodes R. Bobbitt
| | Mr. Bobbitt has an extensive investment background. This is particularly important given the investment portfolios at our subsidiaries.
| | | | Tracy A. Bolt
| | Mr. Bolt has significant experience concerning accounting matters that is essential to our Audit Committee’s and Board of Directors’ oversight responsibilities.
| | | | W. Joris Brinkerhoff
| | Mr. Brinkerhoff has participated, and continues to participate, in a number of business interests. Accordingly, he brings knowledge and additional perspectives to our Board of Directors from experiences with those interests.
| | | | J. Taylor Crandall
| | Mr. Crandall has significant experience in finance and management and board governance, including his experience serving on the boards of directors of public and private companies.
| | | | Charles R. Cummings
| | Mr. Cummings has an extensive operational and accounting background. His expertise in these matters brings considerable strength to our Audit Committee and Board of Directors in these areas.
| | | | Hill A. Feinberg
| | Mr. Feinberg has extensive knowledge and experience concerning the broker-dealer segment and the industry in which it operates through his extended period of service to First Southwest and Hilltop Securities.
| | | | Gerald J. Ford
| | Mr. Gerald J. Ford has been a financial institutions entrepreneur and private investor involved in numerous mergers and acquisitions of private and public sector financial institutions over the past 44 years. His extensive banking industry experience and educational background provide him with significant knowledge in dealing with financial and regulatory matters, making him a valuable member of our Board of Directors. In addition, his service experience on the boards of directors and audit and corporate governance committees of a variety of public companies gives him a deep understanding of the role of the Board of Directors.
| | | | Jeremy B. Ford
| | Mr. Jeremy B. Ford has extensive executive officer experience and knowledge of our operations. Additionally, he has been actively involved in numerous acquisitions, including those consummated by Hilltop.
| | | | J. Markham Green
| | Mr. Green has an extensive background in financial services, as well as board service. His investment banking background also provides our Board of Directors with expertise surrounding acquisitions and investments.
| | | |
|
TableW. Robert Nichols III
| | Mr. W. Robert Nichols III has broad experience in managing and leading enterprises. This significant experience provides our Board of Contents | 2019 PROXY STATEMENT
| Directors with additional perspectives on our operations. |
| William T. Hill, Jr.
| | Mr. Hill’s experience with legal and compliance matters, along with his management of a large group of highly skilled professionals, have given him considerable knowledge concerning many matters that come before our Board of Directors. Mr. Hill has also served on several civic and charitable boards, which has given him invaluable experience in corporate governance matters.
| | | | Lee Lewis
| | Through his service on our Board of Directors and PlainsCapital’s Board of Directors, Mr. Lewis has many years of knowledge of PlainsCapital and the challenges and opportunities that it is presented. The background of Mr. Lewis as an owner and chief executive officer of a Texas-based company also provides unique insight to the Board of Directors.
| | | | Andrew J. Littlefair
| | Mr. Littlefair has significant experience serving as a chief executive officer and as a director of publicly traded companies and provides the Board of Directors with the perspective of one of PlainsCapital’s significant customers.
| | | | W. Robert Nichols III
| | Mr. Nichols has broad experience in managing and leading enterprises. This significant experience provides our Board of Directors with additional perspectives on our operations.
| | | | C. Clifton Robinson
| | Mr. Robinson possesses particular knowledge and experience in the insurance industry, as we purchased NLC from him in 2007. Mr. Robinson provides our Board of Directors with expertise in regards to our insurance operations.
| | | | Kenneth D. Russell
| | Mr. Russell’s extensive background in accounting and operating entities provides valuable insight to our Board of Directors, including merger and acquisition activities.
| | | | A. Haag Sherman
| | Mr. Sherman has significant experience concerning investing, legal and accounting matters that is essential to our Board of Director’s oversight responsibilities.
| | | | Jonathan S. Sobel
| | Mr. Sobel has significant experience in the banking, mortgage and broker-dealer industries, as well as risk management. Given his previous work with the Company, Mr. Sobel already possesses extensive knowledge regarding the Company and its operations. Accordingly, this will make him a valuable member of the Board of Directors.
| | | | Robert C. Taylor, Jr.
| | Through his service on our Board of Directors and PlainsCapital’s Board of Directors, Mr. Taylor has many years of knowledge of PlainsCapital and the challenges and opportunities that it is presented. The background of Mr. Taylor as a manager of a Texas-based company also provides unique insight to the Board of Directors.
| | | | Carl B. Webb
| | | | Thomas C. Nichols | | Mr. Thomas C. Nichols has significant experience in managing and leading banking and other financial services enterprises, including merger and acquisition activities. This significant experience provides our Board of Directors with additional perspectives on our operations. | | | | Kenneth D. Russell | | Mr. Russell’s extensive background in accounting and operating entities provides valuable insight to our Board of Directors, including merger and acquisition activities. | | | | A. Haag Sherman | | Mr. Sherman has significant experience concerning investing, legal and accounting matters that is essential to our Board of Director’s oversight responsibilities. | | | | Jonathan S. Sobel | | Mr. Sobel has significant experience in the banking, mortgage and broker-dealer industries, as well as risk management. He also possesses extensive knowledge regarding the Company and its operations, which makes him a valuable member of the Board of Directors. | | | | Robert C. Taylor, Jr. | | Through his service on our Board of Directors and former service on PlainsCapital’s Board of Directors, Mr. Taylor has many years of knowledge of PlainsCapital and the challenges and opportunities that it is presented. The background of Mr. Taylor as a manager of a Texas-based company also provides unique insight to the Board of Directors. | | | | Carl B. Webb | | Mr. Webb possesses particular knowledge and experience in strategic planning and the financial industry, as well as expertise in finance, that strengthen the Board of Directors’ collective qualifications, skills and experience. | |
Executive Board Sessions The current practice of our Board of Directors is to hold an executive session of its non-management directors at least once per quarter. The individual who serves as the chair at these executive sessions is the Chairman of the Board of Directors. Executive sessions of the independent directors of the Board of Directors also are held at least once per fiscal year, and at each executive session the independent directors select the independent director to preside over such executive session. | | |
Executive Board Sessions
The current practice of our Board of Directors is to hold an executive session of its non-management directors at least once per quarter. The individual who serves as the chair at these executive sessions is the Chairman of the Board of Directors. Executive sessions of the independent directors of the Board of Directors also are held at least once per fiscal year, and at each executive session the independent directors select the independent director to preside over such executive session.
Communications with Directors Our Board of Directors has established a process to receive communications from stockholders and other interested parties. Stockholders and other interested parties may contact any member or all members of the Board of Directors, the non-management directors or any group or committee of directors by mail. To communicate with our Board of Directors, any individual director or any group or committee of directors, correspondence should be addressed to the Board of Directors or any such individual director or group or committee of directors by either name or title. The correspondence should be sent to Hilltop Holdings Inc., c/o Corporate Secretary, 2323 Victory6565 Hillcrest Avenue, Suite 1400, Dallas, Texas 75219.75205. All communications received as set forth in the preceding paragraph will be opened by the office of our General Counselcorporate Secretary or assistant corporate Secretary for the sole purpose of determining whether the contents represent a message to our directors. Any contents that are not in the nature of advertising, promotions of a product or service or patently offensive material will be forwarded promptly to the addressee(s). In the case of communications to the Board of Directors or any group or committee of directors, the General Counsel’scorporate Secretary’s office will make sufficient copies of the contents to send to each director who is a member of the group or committee to whom the communication is addressed. If the amount of correspondence received through the foregoing process becomes excessive, our Board of Directors may consider approving a process for review, organization and screening of the correspondence by the corporate Secretary or other appropriate person.
Code of Business Conduct and Ethics We have adopted a Senior Officer Code of Ethics applicable to our Chief Executive Officer, Chief Financial Officer and PrincipalChief Accounting Officer. We also have adopted a General Code of Ethics and Business Conduct applicable to all officers, directors and employees. Both codes are available on our website at ir.hilltop-holdings.com under the heading “Investor Relations — Corporate InformationOverview — Governance Documents.” Copies also may be obtained upon request by writing our corporate Secretary at the address listed under “Questions” on page 59.71. We intend to disclose any amendments to, or waivers from, our Senior Officer Code of Ethics and our General Code of Ethics and Business Conduct at the same website address provided above. Hedging and Other Securities Transaction Policy The Company has adopted a written Insider Trading Policy, or the Trading Policy, which sets forth the Company’s policies and procedures. Directors and executive officers are required to receive the permission of the General Counsel prior to entering into any transactions in our securities, including gifts, grants and those involving derivatives. Generally, trading is permitted only during announced trading periods for directors, executive officers and certain employees. Directors, executive officers and employees who are subject to trading restrictions, may enter into a trading plan under Rule 10b5-1 under the Exchange Act. These trading plans may be entered into only during an open trading period and must be approved by the General Counsel. We require trading plans to include a waiting period and the trading plans may not be amended during their term. Such director or employee bears full responsibility if he or she violates our policy by permitting shares to be bought or sold without pre-approval or when trading is restricted. All employees, executive officers and directors also are prohibited from entering into hedging, short sale and derivative transactions and are subject to restrictions on pledging our securities. Additionally, all employees, executive officers and directors are prohibited from hedging or pledging unvested RSUs. The Trading Policy is available on our website at ir.hilltop-holdings.com under the heading “Investor Relations — Corporate Information — Governance Documents.” Policies and Procedures for Approval of Related Party Transactions Transactions with related persons are governed by our General Code of Ethics and Business Conduct, which applies to all officers, directors and employees. This code covers a wide range of potential activities, including, among others, conflicts of interest, self-dealing and related party transactions. The Company also has adopted a written Related Party Transaction Policy, or the Related Party Policy, which sets forth the Company’s policies and procedures for reviewing and approving transactions with related persons – namely, our directors, executive officers, their respective immediate family members and 5% stockholders. The transactions covered by the Policy include any financial transaction, arrangement or relationship in which the Company is a participant, the related person has or will have a direct or indirect material interest and the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year. After becoming aware of any transaction which may be subject to the Related Party Policy, the related person is required to report all relevant facts with respect to the transaction to the Chief Executive Officer or General Counsel of Hilltop. Upon determination by the Company’s legal department that a transaction requires review under the Related Party Policy, the material facts of the transaction and the related person’s interest in the transaction are provided to the Audit Committee. The transaction is then reviewed by the disinterested members of the Audit Committee, who determine whether approval of the transaction shall be granted. In reviewing a transaction, the Audit Committee considers facts and circumstances that it deems relevant to its determination, such as: management’s assessment of the commercial reasonableness of the transaction; the materiality of the related person’s direct or indirect interest in the transaction; whether the transaction may involve an actual, or the appearance of, a conflict of interest; and, if the transaction involves a director, the impact of the transaction on the director’s independence. Certain types of transactions are pre-approved in accordance with the terms of the Related Party Policy. These include transactions in the ordinary course of business involving financial products and services provided by, or to, the Company, including loans, provided that such transactions are in compliance with the Sarbanes-Oxley Act of 2002, Federal Reserve Board Regulation O and other applicable laws and regulations.
Stockholder Rights and Protections The Company’s Amended and Restated Charter and By-laws provide stockholders with important rights and protections, including: | ● | The ability to call a special meeting by stockholders holding at least 15% of the outstanding shares of our common stock, subject to a one-year ownership requirement and certain other requirements. |
| ● | No “poison pill” in effect. |
| ● | No super-majority vote requirements in our Amended and Restated Charter or By-laws (other than for an action by written consent). |
The Company’s Amended and Restated Charter and By-laws are available as exhibits to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with SEC. Director Nomination Procedures The Nominating and Corporate Governance Committee believes that, at a minimum, candidates for membership on the Board of Directors should have a demonstrated ability to make a meaningful contribution to the Board of Directors’ oversight of our business and affairs and have a record and reputation for honest and ethical conduct. The Nominating and Corporate Governance Committee recommends director nominees to the Board of Directors based on, among other things, its evaluation of a candidate’s experience, knowledge, skills, expertise, integrity, ability to make independent analytical inquiries, understanding of our business environment and a willingness to devote adequate time and effort to board responsibilities. In making its recommendations to the Board of Directors, the Nominating and Corporate Governance Committee also seeks to have the Board of Directors nominate candidates who have diverse backgrounds and areas of expertise so that each member can offer a unique and valuable perspective. The Nominating and Corporate Governance Committee expects, in the future, to identify potential nominees by asking current directors and executive officers to notify the committee if they become aware of persons who meet the criteria described above. The Nominating and Corporate Governance Committee also, from time to time, may engage firms, at our expense, that specialize in identifying director candidates. As described below, the Nominating and Corporate Governance Committee also will consider candidates recommended by stockholders. Once a person has been identified by the Nominating and Corporate Governance Committee as a potential candidate, the committee expects to collect and review publicly available information regarding the person to assess whether the person should be considered further. If the Nominating and Corporate Governance Committee determines that the candidate warrants further consideration, and if the person expresses a willingness to be considered and to serve on the Board of Directors, the Nominating and Corporate Governance Committee expects to request information from the candidate, review the person’s accomplishments and qualifications, including in light of any other candidates that the committee might be considering, and conduct one or more interviews with the candidate. In certain instances, members of the Nominating and Corporate Governance Committee may contact one or more references provided by the candidate or may contact other members of the business community or other persons that may have greater first-hand knowledge of the candidate’s accomplishments. In addition to formally nominating individuals for election as directors in accordance with our Third Amended and Restated Bylaws, as summarized below on page 5970 under “Stockholder Proposals for 2020,2022,” stockholders may send written recommendations of potential director candidates to the Nominating and Corporate Governance Committee for its consideration. Such recommendations should be submitted to the Nominating and Corporate Governance Committee “c/o Corporate Secretary” at Hilltop Holdings Inc., 2323 Victory6565 Hillcrest Avenue, Suite 1400, Dallas, Texas 75219.75205. Director recommendations submitted by stockholders should include the following information regarding the stockholder making the recommendation and the individual(s) recommended for nomination: | ·
● | | name, age, business address and residence address; |
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● | | the class, series and number of any shares of Hilltop stock or other securities of Hilltop or any affiliate of Hilltop owned, beneficially or of record (including the name of the nominee holder if beneficially owned); |
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● | | the date(s) that shares of Hilltop stock or other securities of Hilltop or any affiliate of Hilltop were acquired and the investment intent of such acquisition; |
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● | | any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such stock or other security) in any securities of Hilltop or any affiliate of Hilltop; |
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● | | whether and the extent to which such person, directly or indirectly (through brokers, nominees or otherwise), is subject to or during the prior six months has engaged in, any hedging, derivative or other transaction or series of transactions or entered into any other agreement, arrangement or understanding (including any short interest, any borrowing or lending of securities or any proxy or voting agreement), the effect or intent of which is to (a) manage risk or benefit of changes in the price of Hilltop securities or any security of any entity listed in the peer group in the stock performance graph included in the materials distributed with this Proxy Statement or (b) increase or decrease the voting power of such person in Hilltop disproportionately to such person’s economic interest in Hilltop securities (or, as applicable, any security of any entity listed in the peer group in the stock performance graph included in the materials distributed with this Proxy Statement); |
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● | | any substantial interest, direct or indirect (including, without limitation, any existing or prospective commercial, business or contractual relationship with us), by security holdings or otherwise of such person in us or in any of our affiliates, other than an interest arising from the ownership of securities where such person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series; |
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● | | the investment strategy or objective, if any, of the stockholder making the recommendation and a copy of the prospectus, offering memorandum or similar document, if any, provided to investors, or potential investors, in such stockholder (if not an individual); |
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● | | to the extent known by the stockholder making the recommendation, the name and address of any other stockholder supporting the nominee for election or reelection as a director; |
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● | | a certificate executed by the proposed nominee that certifies that the proposed nominee is not, and will not, become a party to any agreement, arrangement or understanding with any person or entity other than us in connection with service or action as a director that has not been disclosed to us and that the proposed nominee consents to being named in a proxy statement and will serve as a director if elected; |
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● | | completed proposed nominee questionnaire (which will be provided upon request by writing or telephoning our corporate Secretary at the address or phone number listed under “Questions” on page 59)71); and |
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● | | all other information that would be required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act and the rules promulgated thereunder. |
The stockholder recommendation of potential director candidates and information described above must be delivered to the corporate Secretary not earlier than the 120th day and not later than 5:00 p.m., Dallas, Texas local time, on the 90th day prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting of stockholders; provided, however, that if the date of the annual meeting is advanced more than 30 days prior to, or delayed by more than 60 days after, the first anniversary of the date of the preceding year’s annual meeting, the stockholder recommendation and information must be delivered not earlier than the 120th day prior to the date of such annual meeting and not later than 5:00 p.m., Dallas, Texas local time, on the later of the 90th day prior to the date of such annual meeting of stockholders or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the date on which public announcement of the date of such annual meeting is first made. In the event, however, the number of directors to be elected to the Board of Directors is increased and there is no public announcement of such action at least 100 days prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting, a stockholder recommendation also will be considered timely, but only with respect to nominees for any new positions created by the increase, if it is delivered to the corporate Secretary not later than 5:00 p.m., Dallas, Texas local time, on the 10th day following the day on which the public announcement is first made. The Nominating and Corporate Governance Committee expects to use a similar process to evaluate candidates for nomination to the Board of Directors recommended by stockholders as the one it uses to evaluate candidates otherwise identified by the committee.
No fee was paid to any third party or parties to identify or evaluate, or assist in identifying or evaluating, potential nominees. The Nominating and Corporate Governance Committee did not receive the name of any stockholder recommendations for director nominees with respect to the Annual Meeting. The Nominating and Corporate Governance Committee did not receive any recommendations for director nominees from any non-management stockholder or group of stockholders that beneficially owns more than 5% of our common stock. SECURITY OWNERSHISECURITY OWNERSHIPP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Principal StockholderPrincipal Stockholderss The following table sets forth information regarding our common stock beneficially owned as of April 29, 201928, 2021 by any person or “group,” as that term is used in Section 13(d)(3) of the Exchange Act, known to us to beneficially own more than five percent of the outstanding shares of our common stock. | | | | | | | | | Amount and Nature of | | Percent of | | | | | | | | | | | | | Amount and Nature of | | Percent of | | Name and Address of Beneficial Owner | | Beneficial Ownership | | Class (a) | | | Beneficial Ownership | | Class (a) | | | | | | | | | Gerald J. Ford (b) | | 15,602,693 | | 16.6 | % | | 15,742,952 | | 19.1 | % | 200 Crescent Court, Suite 1350 | | | | | | | Dallas, Texas 75201 | | | | | | | The Vanguard Group (c) | | 6,434,588 | | 6.8 | % | | 6565 Hillcrest Avenue, 6th Floor | | | | | | | Dallas, Texas 75205 | | | | | | | BlackRock, Inc. (c) | | | 10,006,930 | | 12.1 | % | 55 East 52nd Street | | | | | | | New York, New York 10055 | | | | | | | The Vanguard Group (d) | | | 6,164,083 | | 7.5 | % | 100 Vanguard Boulevard | | | | | | | | | | | Malvern, Pennsylvania 19355 | | | | | | | | | | | FMR LLC (d) | | 6,318,289 | | 6.7 | % | | 245 Summer Street | | | | | | | Boston, Massachusetts 02210 | | | | | | | Dimensional Fund Advisors LP (e) | | 5,599,589 | | 6.0 | % | | 5,135,970 | | 6.2 | % | Building One | | | | | | | | | | | 6300 Bee Cave Road | | | | | | | | | | | Austin, Texas 78746 | | | | | | | | | | | BlackRock, Inc. (f) | | 5,143,781 | | 5.5 | % | | 55 East 52nd Street | | | | | | | New York, New York 10055 | | | | | | |
| (a) | (a)
| | Based on 93,983,24782,389,924 shares of common stock outstanding on April 29, 2019.28, 2021. Shares issuable under instruments to purchase our common stock that are exercisable within 60 days of April 29, 201928, 2021 are treated as if outstanding for computing the percentage ownership of the person holding these instruments, but are not treated as outstanding for purposes of computing the percentage ownership of any other person. |
| (b) | (b)
| | The shares of common stock beneficially owned by Mr. Gerald J. Ford include 50,15370,102 shares that are owned by Turtle Creek Revocable Trust, a revocable trust for the benefit of the members of Mr. Gerald J. Ford’s family, and indirectly by Mr. Gerald J. Ford as settlor and trustee of the trust. Mr. Gerald J. Ford disclaims beneficial ownership of the shares held by the trust except to the extent of his pecuniary interest therein. Also includes 15,544,674 shares owned by Diamond A Financial, LP. Mr. Gerald J. Ford is the sole member of Diamond HTH Stock Company GP, LLC, which is the sole general partner of Diamond HTH Stock Company, LP, which is the sole general partner of Diamond A Financial, LP. Mr. Gerald J. Ford is the sole limited partner of Diamond HTH Stock Company, LP. Each of Mr. Gerald J. Ford, Diamond A Financial, LP, Diamond HTH Stock Company, LP and Diamond HTH Stock Company GP, LLC may be deemed to have shared voting and dispositive power of these shares. Excludes 90,000 RSUs that will not vest within 60 days of April 28, 2021. |
| (c) | Based on the Schedule 13G (Amendment No. 3) filed with the SEC by BlackRock, Inc. on March 10, 2021. According to the Schedule 13G (Amendment No. 3), BlackRock, Inc. has sole voting power over 9,878,940 shares of our common stock and sole dispositive power over 10,006,930 shares of our common stock. According to the Schedule 13G (Amendment No. 3), BlackRock, Inc. is a parent holding company or control person, and various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of our common stock. The Schedule 13G (Amendment No. 3) reports that Blackrock Fund Advisors, a wholly owned subsidiary of Blackrock, Inc., is the beneficial owner of 5% or greater of the outstanding shares of the security class reported on the Schedule 13G (Amendment No. 3). |
| (d) | Based on the Schedule 13G (Amendment No. 5) filed with the SEC by The Vanguard Group on February 10, 2021. According to the Schedule 13G (Amendment No. 5), The Vanguard Group has shared voting power over 68,535 shares of our common stock, sole dispositive power over 6,036,631 shares of our common stock and shared dispositive power over 127,452 shares of our common stock. The Schedule 13G (Amendment No. 5) reports that Vanguard Asset Management, Limited, Vanguard Fiduciary Trust Company, Vanguard Global Advisors, LLC, Vanguard Group (Ireland) Limited, Vanguard Investments Australia Ltd, Vanguard Investments Canada Inc., Vanguard Investments Hong Kong Limited and Vanguard Investments UK, Limited, each wholly owned subsidiaries of The Vanguard Group, are the beneficial owners of 5% or greater of the outstanding shares of the security class reported on the Schedule 13G (Amendment No. 5). |
| (e) | Based on the Schedule 13G (Amendment No. 4) filed with the SEC by Dimensional Fund Advisors LP on February 12, 2021. According to the Schedule 13G (Amendment No. 4), Dimensional Fund Advisors LP has sole voting power over 5,042,063 shares of our common stock and sole dispositive power over 5,135,970 shares of our common stock. Dimensional Fund Advisors LP is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of |
| 1940, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, Dimensional Fund Advisors LP or its subsidiaries (collectively, “Dimensional”) may possess voting and/or investment power over the securities of Hilltop that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of Hilltop held by the Funds. However, according to the Schedule 13G (Amendment No. 4), all securities reported are owned by the Funds. Dimensional disclaims beneficial ownership of such securities. In addition, the Schedule 13G (Amendment No. 4) disclaims that the reporting person or any of its affiliates is the beneficial owner of any securities covered by the Schedule 13G (Amendment No. 4) for any purposes other than Section 13(d) of the Securities Exchange Act of 1934. |
Security Ownership of Management The following table sets forth information regarding the number of shares of our common stock beneficially owned as of April 28, 2021, by: | ● | each of our named executive officers; and |
| ● | all of our directors and executive officers presently serving, as a group. |
Except as otherwise set forth below, the address of each of the persons listed below is c/o Hilltop Holdings Inc., 6565 Hillcrest Avenue, Dallas, Texas 75205. Except as otherwise indicated in the footnotes to this table, the persons named in the table have specified that they have sole voting and investment power with respect to all shares of stock shown as beneficially owned by them, subject to any applicable community property law. | | | | | | | Common Stock | | | Amount and Nature of | | Percent of | Name of Beneficial Owner | | Beneficial Ownership | | Class (a) | Rhodes Bobbitt | | 126,059 | (b) | * | Tracy A. Bolt | | 36,486 | | * | J. Taylor Crandall | | — | | * | Charles R. Cummings | | 37,476 | | * | Hill A. Feinberg | | 711,812 | (c) | * | Gerald J. Ford | | 15,742,952 | (d) | 19.1% | 6565 Hillcrest Avenue, 6th Floor | | | | | Dallas, Texas 75205 | | | | | Jeremy B. Ford | | 867,621 | (e) | 1.1% | William B. Furr | | 57,894 | (f) | * | J. Markham Green | | 114,763 | | * | William T. Hill, Jr. | | 35,968 | (g) | * | Charlotte Jones | | 13,930 | | * | Lee Lewis | | 107,951 | (h) | * | Andrew J. Littlefair | | 16,902 | | * | W. Robert Nichols, III | | 16,000 | (i) | * | Thomas C. Nichols | | 16,180 | (j) | * | Kenneth D. Russell | | — | | * | Jerry L. Schaffner | | 144,479 | (k) | * | A. Haag Sherman | | 23,502 | | * | Jonathan S. Sobel | | 1,887 | (l) | * | Robert C. Taylor, Jr. | | 39,395 | | * | Stephen Thompson | | 16,413 | (m) | * | Carl B. Webb | | 121,058 | | * | M. Bradley Winges | | 716 | (n) | * | | | | | | All Directors and Executive Officers, | | | | | as a group (26 persons) | | 18,381,286 | (o) | 22.3% |
* Represents less than 1% of the outstanding shares of such class. | (a) | Based on 82,389,924 shares of common stock outstanding on April 28, 2021. Shares issuable under instruments to purchase our common stock that are exercisable within 60 days of April 28, 2021 are treated as if outstanding for computing the percentage ownership of the person holding these instruments, but are not treated as outstanding for purposes of computing the percentage ownership of any other person. |
| (b) | Includes 62,100 shares of common stock held in an IRA account for the benefit of Mr. Bobbitt. |
| (c) | Includes 25,776 shares of common stock held directly by Mr. Feinberg’s wife. |
| (d) | The shares of common stock beneficially owned by Mr. Gerald J. Ford include 70,102 shares that are owned by Turtle Creek Revocable Trust, a revocable trust for the benefit of the members of Mr. Gerald J. Ford’s family, and indirectly by Mr. Gerald J. Ford as settlor of the trust. Mr. Gerald J. Ford disclaims beneficial ownership of the shares held by the trust except to the extent of his pecuniary interest therein. Also includes 15,544,674 shares owned by Diamond A Financial, LP. Mr. Gerald J. Ford is the sole member of Diamond HTH Stock Company GP, LLC, which is the sole general partner of Diamond HTH Stock Company, LP, which is the sole general partner of Diamond A Financial, LP. Mr. Gerald J. Ford is the sole limited partner of Diamond HTH Stock Company, LP. Each of Mr. Gerald J. Ford, Diamond A Financial, LP, Diamond HTH Stock Company, LP and Diamond HTH Stock Company GP, LLC may be deemed to have shared voting and dispositive power of these shares. Excludes 90,000 restricted stock units, or RSUs, that will not vest within 60 days of April 29, 2019.28, 2021. |
| (e) | (c)
| | Based on the Schedule 13G (Amendment No. 3) filed with the SEC by The Vanguard Group on February 12, 2019. According to the Schedule 13G (Amendment No. 3), The Vanguard Group has sole voting power over 72,078 shares of our common stock, shared voting power over 9,980 shares of our common stock, sole dispositive power over 6,360,865 shares of our common stock and shared dispositive power over 73,723 shares of our common stock. The Schedule 13G (Amendment No. 3) reports that Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, is the beneficial owner of 63,743 shares of our common stock as a result of its serving as investment manager of collective trust accounts and that Vanguard Investments Australia, Ltd., a wholly owned subsidiary of The Vanguard Group, is the beneficial owner of 18,315 shares of our common stock as a result of its serving as investment manager of Australian investment offerings.
|
| (d)
| | Based on the Schedule 13G filed with the SEC by FMR LLC on February 13, 2019. According to the Schedule 13G, FMR LLC has sole voting power over 579 shares of our common stock and sole dispositive power over 6,318,289 shares of our common stock, and Abigail P. Johnson has sole dispositive power over 6,318,289 shares of common stock. According to the Schedule 13G, Abigail P. Johnson is a Director, the Chairman, and the Chief Executive Officer of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act of 1940 advised by Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees.
|
| (e)
| | Based on the Schedule 13G (Amendment No. 2) filed with the SEC by Dimensional Fund Advisors LP on February 8, 2019. According to the Schedule 13G (Amendment No. 2), Dimensional Fund Advisors LP has sole voting power over 5,480,559 shares of our common stock and sole dispositive power over 5,599,589 shares of our common stock. Dimensional Fund Advisors LP is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-adviser and/or manager, Dimensional Fund Advisors LP or its subsidiaries (collectively, “Dimensional”) may possess voting and/or investment power over the securities of Hilltop that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of Hilltop held by the Funds. However,
|
according to the Schedule 13G (Amendment No. 2), all securities reported are owned by the Funds. Dimensional disclaims beneficial ownership of such securities. In addition, the Schedule 13G (Amendment No. 2) disclaims that the reporting person or any of its affiliates is the beneficial owner of any securities covered by the Schedule 13G (Amendment No. 2) for any purposes other than Section 13(d) of the Securities Exchange Act of 1934.
|
| (f)
| | Based on the Schedule 13G filed with the SEC by BlackRock, Inc. on February 8, 2019. According to the Schedule 13G, BlackRock, Inc. has sole voting power over 4,969,437 shares of our common stock and sole dispositive power over 5,143,781 shares of our common stock. According to the Schedule 13G, BlackRock, Inc. is a parent holding company or control person, and various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of our common stock. However, no single subsidiary of BlackRock, Inc. holds an interest in our common stock that is more than five percent of our total outstanding common shares.
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Security Ownership of Management
The following table sets forth information regarding the number of shares of our common stock beneficially owned as of April 29, 2019, by:
| ·
| | each of our directors and director nominee;
|
| ·
| | each of our named executive officers; and
|
| ·
| | all of our directors and executive officers presently serving, as a group.
|
Except as otherwise set forth below, the address of each of the persons listed below is c/o Hilltop Holdings Inc., 2323 Victory Avenue, Suite 1400, Dallas, Texas 75219. Except as otherwise indicated in the footnotes to this table, the persons named in the table have specified that they have sole voting and investment power with respect to all shares of stock shown as beneficially owned by them, subject to any applicable community property law.
| | | | | | | Common Stock | | | Amount and Nature of | | Percent of | Name of Beneficial Owner | | Beneficial Ownership | | Class (a) | Charlotte Jones Anderson | | 11,243 | | * | Rhodes Bobbitt | | 126,059 | (b) | * | Tracy A. Bolt | | 26,188 | | * | W. Joris Brinkerhoff | | 25,228 | | * | J. Taylor Crandall | | — | (c) | * | Charles R. Cummings | | 37,476 | | * | Hill A. Feinberg | | 826,496 | (d) | * | Gerald J. Ford | | 15,602,693 | (e) | 16.6% | 200 Crescent Court, Suite 1350 | | | | | Dallas, Texas 75201 | | | | | Jeremy B. Ford | | 716,929 | (f) | * | William B. Furr | | 21,847 | (g) | * | J. Markham Green | | 114,763 | | * | William T. Hill, Jr. | | 33,049 | (h) | * | Lee Lewis | | 656,199 | (i) | * | Andrew J. Littlefair | | 14,446 | | * | W. Robert Nichols, III | | 31,000 | (j) | * | C. Clifton Robinson | | 1,265,024 | | 1.3% | Kenneth D. Russell | | — | | * | Todd L. Salmans | | 29,339 | (k) | * | Jerry L. Schaffner | | 122,283 | (l) | * | A. Haag Sherman | | 17,196 | | * | Jonathan S. Sobel | | — | (m) | * | Robert C. Taylor, Jr. | | 36,708 | | * | Carl B. Webb | | 116,143 | | * | Alan B. White | | 1,519,553 | (n) | 1.6% | | | | | | All Directors and Executive Officers, | | | | | as a group (26 persons) | | 19,928,781 | (o) | 21.2% |
* Represents less than 1% of the outstanding shares of such class.
| (a)
| | Based on 93,983,247 shares of common stock outstanding on April 29, 2019. Shares issuable under instruments to purchase our common stock that are exercisable within 60 days of April 29, 2019 are treated as if outstanding for computing the percentage ownership of the person holding these instruments, but are not treated as outstanding for purposes of computing the percentage ownership of any other person.
|
| (b)
| | Includes 62,100 shares of common stock held in an IRA account for the benefit of Mr. Bobbitt.
|
| (c)
| | Excludes 1,488 shares held by Oak Hill Capital Management LLC, 69,014 shares held by Oak Hill Capital Management Partners III, L.P. and 2,101,418 shares held by Oak Hill Capital Partners III, L.P.
|
| (d)
| | Includes 25,776 shares of common stock held directly by Mr. Feinberg’s wife. Also includes 776 shares of common stock held by the Max McDermott Trust for the benefit of Mr. Feinberg’s stepson. Mr. Feinberg’s wife is the trustee of the trust. Excludes 28,417 shares of common stock deliverable upon the vesting of RSUs that will not vest within 60 days of April 29, 2019.
|
| (e)
| | The shares of common stock beneficially owned by Mr. Gerald J. Ford include 50,153 shares that are owned by Turtle Creek Revocable Trust, a revocable trust for the benefit of the members of Mr. Gerald J. Ford’s family, and indirectly by Mr. Gerald J. Ford as settlor of the trust. Mr. Gerald J. Ford disclaims beneficial ownership of the shares held by the trust except to the extent of his pecuniary interest therein. Also includes 15,544,674 shares owned by Diamond A Financial, LP. Mr. Gerald J. Ford is the sole member of Diamond HTH Stock Company GP, LLC, which is the sole general partner of Diamond HTH Stock Company, LP, which is the sole general partner of Diamond A Financial, LP. Mr. Gerald J. Ford is the sole member of Diamond HTH Stock Company, LP. Each of Mr. Gerald J. Ford, Diamond A Financial, LP, Diamond HTH Stock Company, LP and Diamond HTH Stock Company GP, LLC may be deemed to have shared voting and dispositive power of these shares. Excludes 90,000 RSUs that will not vest within 60 days of April 29, 2019.
|
| (f)
| | Jeremy B. Ford is a beneficiary of a trust that owns a 49% limited partnership interest in Diamond A Financial, LP (see footnote (e)(d)). Excludes 209,346398,296 shares of common stock deliverable upon the vesting of RSUs that will not vest within 60 days of April 29, 201928, 2021 and 15,544,674 shares of common stock held by Diamond A Financial, LP. |
| (f) | (g)
| | Excludes 62,80885,150 shares of common stock deliverable upon the vesting of RSUs that will not vest within 60 days of April 29, 2019. 28, 2021. |
| (g) | (h)
| | Includes 14,550 shares of common stock held in a SEP IRA account for the benefit of Mr. Hill. |
| (h) | (i)
| | Includes 603,41755,169 shares of common stock held by Lee Lewis Construction. Mr. Lewis is the sole owner of Lee Lewis Construction and may be deemed to have voting and/or investment power with respect to the shares owned by Lee Lewis Construction. |
| (i) | (j)
| | Includes 11,00016,000 shares of common stock held in an IRA account for the benefit of Mr. Nichols. W. Robert Nichols, III. |
| (j) | Includes 2,000 shares of common stock held in an IRA account for the benefit of Mr. Thomas C. Nichols. |
| (k) | | Includes 1,459 shares of common stock held in an IRA account for the benefit of Mr. Schaffner’s wife. Excludes 47,05359,325 shares of common stock deliverable upon the vesting of RSUs that will not vest within 60 days of April 29, 2019. 28, 2021. |
| (l) | (l)
| | Includes 1,459 shares of common stock held in an IRA account for the benefit of Mr. Schaffner’s wife. Excludes 43,78520,000 shares of common stock deliverable upon the vesting of RSUs that will not vest within 60 days of April 27, 2019.
28, 2021. |
| (m) | (m)
| | Mr. Sobel is a director nominee at the Annual Meeting.
|
| (n)
| | Mr. White retired effective April 1, 2019, from all positions with the Company, including as a member of the Board of Directors. Includes (a) 9,785 shares of common stock held directly by Mr. White’s wife, (b) 453 shares of common stock held in a self-directed individual retirement account of Mr. White’s wife, (c) 23,806 shares of common stock held by Double E Investments (“Double E”), (d) 12,883 shares of common stock held by EAW White Family Partnership, Ltd. (“EAW”), (e) 8,045 shares of common stock held by Maedgen, White and Maedgen (“MW&M”), and (f) 1,269,000 shares of common stock held by Maedgen & White, Ltd. As the manager of Double E, the managing partner of MW&M and the sole member of the general partner of EAW, Mr. White has exclusive authority to vote and/or dispose of the securities held by Double E, MW&M and EAW, respectively, and may, therefore, be deemed to have sole voting and dispositive power over the shares of common stock held by Double E, MW&M and EAW. Mr. White is the sole general partner of Maedgen & White, Ltd. and may be deemed to beneficially own the shares held by Maedgen & White, Ltd. As the sole general partner of Maedgen & White, Ltd., Mr. White has the power to vote the shares held by Maedgen & White, Ltd. The Agreement of Limited Partnership of Maedgen & White, Ltd. requires the approval of 80% of the limited partnership interests in Maedgen & White, Ltd. before its general partner may dispose of the shares held by Maedgen & White, Ltd. Mr. White, directly and indirectly, controls approximately 77% of the limited partnership interests of Maedgen & White, Ltd. and therefore may be deemed to share dispositive power over the shares held by Maedgen & White, Ltd. Excludes 14,36954,081 shares of common stock deliverable upon the vesting of RSUs that will not vest within 60 days of April 29, 2019.
28, 2021 |
| (n) | (o)
| | Represents 26 persons. Excludes 644,122143,356 shares of common stock deliverable upon the vesting of RSUs that will not vest within 60 days of April 29, 2019.
28, 2021. |
| (o) | Represents 26 persons. Excludes 952,815 shares of common stock deliverable upon the vesting of RSUs that will not vest within 60 days of April 28, 2021. |
MANAGEMENT
Executive Officers General We have identified the following officers as “executive officers,” consistent with the definition of that term as used by the SEC, as of April 29, 2019: 28, 2021: | | | | | | | | | | | | | | | | Name | | Age | | Position | | Officer
Since | | Age | | Position | | Officer
Since | Keith E. Bornemann | | 46 | | Executive Vice President, Principal Accounting Officer and Corporate Controller | | 2017 | | 48 | | Executive Vice President, Chief Accounting Officer | | 2017 | Hill A. Feinberg | | 72 | | Chairman of Hilltop Securities | | 2012 | | Jeremy B. Ford | | 44 | | President and Chief Executive Officer | | 2010 | | 46 | | President and Chief Executive Officer | | 2010 | William B. Furr | | 41 | | Executive Vice President, Chief Financial Officer | | 2016 | | 43 | | Executive Vice President, Chief Financial Officer | | 2016 | Darren E. Parmenter | | 56 | | Executive Vice President, Chief Administrative Officer | | 2007 | | 58 | | Executive Vice President, Chief Administrative Officer | | 2007 | Corey G. Prestidge | | 45 | | Executive Vice President, General Counsel and Secretary | | 2008 | | 47 | | Executive Vice President, General Counsel and Secretary | | 2008 | Todd L. Salmans | | 70 | | Chief Executive Officer of PrimeLending | | 2012 | | Jerry L. Schaffner | | 61 | | President and Chief Executive Officer of the Bank | | 2012 | | 63 | | President and Chief Executive Officer of PlainsCapital Bank | | 2012 | Stephen Thompson | | | 59 | | President and Chief Executive Officer of PrimeLending | | 2020 | M. Bradley Winges | | 51 | | President and Chief Executive Officer of Hilltop Securities | | 2019 | | 53 | | President and Chief Executive Officer of Hilltop Securities | | 2019 |
Business Experience of Executive Officers Information concerning the business experience of Messrs. Hill A. Feinberg andMr. Jeremy B. Ford is set forth above under “Proposal One — Election of Directors — Nominees for Election as Directors” beginning on page 5. Keith E. Bornemann. Mr. Bornemann has served as the Executive Vice President and Chief Accounting Officer of Hilltop since July 2020. Mr. Bornemann previously served as Executive Vice President and Principal Accounting Officer of Hilltop sincefrom November 2017 to July 2020 and Corporate Controller of Hilltop sincefrom February 2017.2017 to July 2020. He also served as Senior Vice President and Director of Accounting and Reporting of Hilltop from January 2016 to January 2017 and Vice President of Financial Reporting of Hilltop from January 2013 to January 2016. Prior to joining Hilltop in 2013, Mr. Bornemann was the Vice President and Corporate Controller at First Acceptance Corporation.Corporation and spent nine years working for the accounting firm Ernst & Young LLP.
William B. Furr. Mr. Furr has served as the Chief Financial Officer of Hilltop since September 2016. Prior to joining Hilltop, Mr. Furr served as Executive Vice President and Community Bank Chief Financial Officer for KeyCorp from November 2012 to August 2016. Before joining KeyCorp, Mr. Furr served in various financial leadership roles at Regions Financial Corporation and Bank of America Corporation. Darren E. Parmenter. Mr. Parmenter has served as Executive Vice President and Chief Administrative Officer of Hilltop since September 2016. Mr. Parmenter previously served as Executive Vice President and Principal Financial Officer of Hilltop from February 2014 to September 2016 and as Senior Vice President of Finance of Hilltop from June 2007 to February 2014. From January 2000 to June 2007, Mr. Parmenter was with Hilltop’s predecessor, Affordable Residential Communities Inc., and served as the Controller of Operations from April 2002 to June 2007. Prior to 2000, Mr. Parmenter was employed by Albertsons Inc. as an Assistant Controller. Corey G. Prestidge. Mr. Prestidge has served as an Executive Vice President of Hilltop since February 2014 and General Counsel and Secretary of Hilltop since January 2008. From November 2005 to January 2008, Mr. Prestidge was the Assistant General Counsel of Mark Cuban Companies. Prior to that, Mr. Prestidge was an associate in the corporate and securities practice group at Jenkens & Gilchrist, a Professional Corporation, which is a former national law firm. Mr. Prestidge is the son-in-law of our Chairman of the Board, Gerald J. Ford, and the brother-in-law of our President and Chief Executive Officer, Jeremy B. Ford. Todd L. Salmans. Mr. Salmans has served as Chief Executive Officer of PrimeLending since January 2011 and has continued in that position since our acquisition of PlainsCapital in November 2012. He also previously held the office of President of PrimeLending until August 2013. As Chief Executive Officer, Mr. Salmans is responsible for the strategic direction and day-to-day management of PrimeLending, including financial performance, compliance, business development, board and strategic partner communications and team development. He also serves as a member of PrimeLending’s Board of Directors. Mr. Salmans joined PrimeLending in 2006 as Executive Vice President and Chief Operating Officer, with responsibility over daily operations, loan processing and sales. He was promoted to President in April 2007. Mr. Salmans has over 41 years of experience in the mortgage banking industry. Prior to joining PrimeLending, he served as regional executive vice president of CTX/Centex, regional senior vice
president of Chase Manhattan/Chase Home Mortgage Corp., and regional senior vice president of First Union National Bank/First Union Mortgage Corp. Mr. Salmans is currently a board member of the Texas Mortgage Bankers Association.
Jerry L. Schaffner. Mr. Schaffner has served as the President and Chief Executive Officer of thePlainsCapital Bank since November 2010 and has continued in that position since our acquisition of PlainsCapital in November 2012.2010. He currently serves as a director of thePlainsCapital Bank and various other subsidiaries, and previously served as a director of PlainsCapital from 1993 until March 2009. Mr. Schaffner joined PlainsCapital in 1988 as part of its original management group. Stephen Thompson. Mr. Thompson has served as the President and Chief Executive Officer of PrimeLending since January 2020, a continuation of his previous role as President of PrimeLending since 2017. Mr. Thompson joined PrimeLending in 2011 and has held the roles of Regional Production Leader, Divisional Production Leader and National Production Leader. Mr. Thompson has over 30 years of mortgage banking experience. M. Bradley Winges. Mr. Winges has served as the President and Chief Executive Officer of Hilltop Securities since February 2019. Prior to joining Hilltop Securities, Mr. Winges most recently served as Senior Executive Managing Director at Piper Jaffray, where he hashad worked since February 1991. While at Piper Jaffray, he was a member of the firm’s leadership team and held the roles of Head of Fixed Income Services and Firm Investments and Trading, President of Piper Jaffray Investment Management, Firm Risk Management, Head of Hopewood Lane Trading, Co-Head of Piper Jaffray Financial Products, Head of Municipal Sales and Trading and Institutional Municipal Sales Representative. Mr. Winges also is a member of the Board of the Bond Dealers of America and a committee member of the Fixed Income Market Structure at the United States Securities and Exchange Commission.SEC. Terms of Office and Relationships Our executive officers are elected by our Board of Directors annually or, as necessary, to fill vacancies or newly created offices. Each executive officer holds office until his successor is duly elected and qualified or, if earlier, until his death, resignation or removal. Any officer or agent elected or appointed by our Board of Directors may be removed by our Board of Directors whenever, in its judgment, our best interests will be served, but any removal will be without prejudice to the contractual rights, if any, of the person so removed. Except as disclosed under “Proposal One — Election of Directors — Nominees for Election as Directors” commencing on page 5 and under “Management — Executive Officers — Business Experience of Executive Officers” on page 23,25, (a) there are no familial relationships among any of our current directors or executive officers and (b) none of our director nominees hold, or in the last five yearyears have held, directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or pursuant to Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940. Except as set forth in this Proxy Statement, there are no arrangements or understandings between any nominee for election as a director or officer and any other person pursuant to which that director was nominated or that officer was selected.
Compensation Discussion and Analysis This Compensation Discussion and Analysis, sectionor this CD&A, reviews the compensation program for our named executive officers, or NEOs, which include our principal executive officers,officer, principal financial officer and our three other most highly-compensated executive officers who served during the year ended December 31, 2018.2020. For 2018,2020, our NEOs were: | | | Named Executive Officer |
| Title/Role | Jeremy B. Ford | | President and Chief Executive Officer | Alan B. White (a)
| | Former Vice Chairman and Co-Chief Executive Officer
| William B. Furr | | Executive Vice President, Chief Financial Officer | Hill A. Feinberg (b)
| | Chairman of Hilltop Securities
| Jerry L. Schaffner | | President and Chief Executive Officer of thePlainsCapital Bank | Todd L. SalmansStephen Thompson
| | President and Chief Executive Officer of PrimeLending |
| (a)
| | Mr. White retired effective April 1, 2019, from all positions with the Company, including as a member of the Board of Directors.
|
| (b)
| | In February 2019, Mr. Feinberg was succeeded by M. Bradley Winges as
| | President and Chief Executive Officer of Hilltop Securities. Mr. Feinberg continues to serve as Chairman of Hilltop Securities.Securities |
2018 BusinessCOVID and FinancialEnvironmental, Social and Governance Response
Business Highlights During 2018, we hadHilltop reported record earnings in 2020. Pre-tax income from continuing operations increased 99.6% compared to 2019 and 264.1% compared to 2018.The implementation of our strategic initiatives over the following key accomplishments:past few years, several of which are described below, allowed us to capitalize on available opportunities. These robust financial results and continued enhancements position Hilltop for further growth.
| ·
| | Consummated the acquisition of The Bank of River Oaks;
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| ·
| | Continued deployment of shared services among the enterprise;
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| ·
| | Successful exit of loss share agreements with the Federal Deposit Insurance Corporation;
|
| ·
| | Favorable resolution of matter with the Department of Justice with respect to FHA loans; and
|
| ·
| | Realized positive return on an investment through our merchant bank.
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Key Financial highlights for fiscal year 2018 were as follows:Results | ·
| | Generated $121.4 million in income applicable to common stockholders, or $1.28 per diluted share, during 2018. Return on average equity was 6.33% and return on average assets was 0.93% for 2018.
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| | Maintained strong asset quality compared to peers with non-performing assets as a percentage of total assets of 0.45% as of December 31, 2018.
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| | Maintained strong capital ratios with a Tier 1 Leverage Ratio of 12.53% and a Common Equity Tier 1 Risk Based Capital Ratio of 16.58% at December 31, 2018.
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| | Distributed $26.7 million, or $0.28 per common share, of capital to stockholders, equating to a dividend payout ratio of 21.90%.
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These results contributed to an increaseThe charts below illustrate our strong financial and market performance in our book value per share from $19.92 at December 31, 2017 to $20.83 at December 31, 2018.2020. Additional detaildetails regarding our results and achievements can be found in our Annual Report on Form 10-K for the year ended December 31, 2018. 2020.
Leadership Succession
From October 2017 through April 2019,
In addition to the results shown above, we transitionedalso achieved the following in 2020: | ● | Average loans held for investment, net grew by $466 million, or 7% (PPP loan balance of $487 million at December 31, 2020), and average deposits grew 25% compared to December 31, 2019. | |
| ● | Mortgage origination volume increased by 47% to $23.0 billion, as the business capitalized on the rate environment. |
| ● | Hilltop Securities reported a pre-tax margin of 21.8% in 2020 compared to 19.7% in 2019, as Structured Finance and Fixed Income business lines realized net revenue growth. |
| ● | Book value per share at December 31, 2020 grew by 22% versus the prior year to $28.28. |
| ● | Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio of 12.64% and a Common Equity Tier 1 Capital Risk Based Ratio of 18.97% at December 31, 2020. |
| ● | Net charge-offs equated to $21.1 million for the full year 2020. |
Strategic Highlights During 2020, we had several key accomplishments in support of our business strategy: 
Additional highlights include: | ● | Launched our Platform for Growth and Efficiency in January 2019, designed to deliver $84 million in run-rate Pre-Provision Net Revenue (“PPNR”) improvements by the year end 2021, and we achieved our goal by year-end 2020 through actions including: | |
| Ø | Streamlining our mortgage operations; | |
| Ø | Enhancing our capital markets/securitized products platform; | |
| Ø | Executing on targeted leadership changes and succession planning; | |
| Ø | Implementing multiple enhanced programs for our strategic sourcing efforts; and | |
| Ø | Consolidating functions across our organization. | |
| ● | Completed the implementation of two new core platforms: | |
| Ø | Blue Sage – Mortgage Loan Origination System; and | |
| Ø | FIS Operation Platform – Securities Brokerage/Clearing System. | |
| ● | Implemented Current Expected Credit Loss, including governance structure. | |
| ● | Completed the integration of three general ledgers into one system (Hilltop, PrimeLending and PlainsCapital Bank). | |
Leadership 2020 was the first full year of our leadership withteam following the departurescompletion of Messrs. White, Huffines and Martin. With the departuresuccession planning. As a result of Mr. White, Mr. Jeremy Ford has become the sole Chief Executive Officer of the Company,executing on that plan and the Chief Operating Officer role was eliminated uponsale of National Lloyds Corporation, the departurefollowing is the reporting structure for our operating subsidiaries: 
Summary ofExecutive Compensation ChangesHighlights
| | Over the past several years, we have completed leadership transitions and streamlined our executive team. As illustrated in the graphs to the right, these changes have resulted, and are expected to continue to result, in a substantial reduction in executive base salary expense as compared to 2016 (38% decrease in 2020). With 2020 results triggering maximum annual incentive payouts at 185% (as compared to a maximum of 154% in 2016), and our award of discretionary bonuses, aggregate Section 16 officer compensation in 2020 was only 41% higher than aggregate Section 16 officer compensation in 2016. For reference, pre-tax earnings from continuing operations were $210 million and $564 million in 2016 and 2020, respectively (a 168% increase from 2016 to 2020). Additionally, these transitions resulted in the termination of certain legacy compensation arrangements and allowed us to fully align our executive team with our pay-for-performance compensation program, as evidenced by the chart and outlined in this CD&A. | ·
| | Anticipate a limited number of employment agreements (current total of five);
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| | New employment agreements entered into since* Reflects base salary for the beginning of 2013 do not contain gross-up provisions. The retention agreement with Mr. Schaffner isyear shown plus annual incentives paid at 185% and long-term incentives awarded the only employee-related agreement that contains gross-up provisionsfollowing year, as well as one-time and such provisions are not expecteddiscretionary awards and payments due to be triggered in the event of a termination; andrecord performance during pandemic.
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| | Beginning in 2019, all equity award agreements have “double trigger” change in control provisions, which require termination without cause within the six months preceding or twelve months following a change in control in order to vest.
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Our 20182020 Executive Compensation Program The Compensation Committee, or, as used in this Compensation Discussion and Analysis,CD&A, the Committee, has the responsibility to establish, implement and monitor adherence with our compensation philosophy. The Committee ensuresbelieves that the total compensation paid to executive officers isshould be fair, reasonable, market competitive, performance-based and aligned with stockholder interests. The Committee administers the Company’sour executive compensation program in light oftaking into consideration our unique business structure and acquisition activity. As a holding company that conducts its operations through its subsidiaries, we provide performance-based compensation to the chief executives of each of our business units that is based on both the results of the business unit and the consolidated Company.
Elements of Total Direct Compensation | | Base Salary ● Intended to compensate the individual fairly for the responsibility level of the position held. Annual Incentives ● Variable component of pay intended to motivate and reward the individual’s contributions to achieving our short-term/annual objectives; ● Payouts are determined based on financial results (weighted 70%) and each executive’s performance with respect to strategic and individual goals (weighted 30%); ● Financial results are based on our consolidated net income and, for executives of our subsidiaries, the net income of their respective business unit; and ● Discretionary bonuses are awarded only in exceptional circumstances. Long-Term Incentives ● Variable component of pay intended to retain, motivate and reward the individual’s contributions to achieving our long-term objectives and creating stockholder value; ● Delivered through an equal grant value mix of Performance-Based Restricted Stock Units, or PRSUs, and Time-Based Restricted Stock Units, or TRSUs; and ● The vesting of PRSUs varies based on performance results with respect to cumulative EPS goals over a three-year period, with a modifier based on our three-year total shareholder return, or TSR, relative to other banks in the KBW Regional Banking Index. | 
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As illustrated in the chart, total variable compensation represents 83% of the Chief Executive Officer’s target total direct compensation.
Governance Highlights The Committee maintains strong governance features for our executive compensation program as outlined below and further discussed in this CD&A. | | | | | What We Do | | What We Don’t Do | 2019 PROXY STATEMENTþ
| We tie a significant portion of NEO compensation to our performance through a balance of annual and long-term incentives with multiple performance measures | | ⌧ | Executive officers are prohibited from entering into hedging, short sale and derivative transactions and are subject to restrictions on pledging our securities | þ | We maintain robust stock ownership guidelines for executive officers and directors | | ⌧ | We do not provide for any excise tax gross-ups in any new employment agreements | þ | We require all equity awarded to executive officers to be held for one year following vesting | | ⌧ | We do not grant equity awards with single trigger vesting upon a change in control (commencing with 2019 awards) | þ | We maintain a clawback policy for incentive compensation | | ⌧ | We do not pay dividends on unvested equity awards | þ | We subject annual incentives to downward adjustment for improper risk taking or significant compliance issues | | ⌧ | We do not provide excessive perquisites | þ | We annually conduct a risk assessment of our compensation programs | | | | þ | We retain an independent compensation consultant reporting directly to the Committee | | | |
Role of Stockholder Say-on-Pay Votes and Stockholder Engagement We provide our stockholders with the opportunity to cast an annual non-binding advisory vote on executive compensation. At our annual meeting of stockholders held in July 2020, over 97% of the votes cast (excluding abstentions and broker non-votes) on the say-on-pay proposal were voted in favor of the proposal. | | In January 2021, we contacted a total of seventeen of our largest stockholders, other than the Chairman of the Board of Directors, who represented approximately 20% of our outstanding common stock at that time. In connection with this stockholder outreach, eight stockholders who represented approximately 12% of our outstanding common stock at that time scheduled and conducted calls with the Chairman of the Committee. In those calls, the Chairman specifically addressed the compensation of the Chairman of the Board of Directors of the Company. | 
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After the resulting discussion of the Chairman’s compensation, these stockholders understood the reasoning for his compensation and appreciate the value that he provides to the Company. We also committed to provide additional disclosure regarding the reasons supporting his compensation, which we have included in this CD&A and this Proxy Statement. With respect to our compensation program and philosophy in general, those stockholders were supportive. Some of these stockholders suggested other specific metrics for possible use in measuring executive compensation, including return on average assets, return on average equity and tangible book value per share growth. The Committee will continue to evaluate these metrics for inclusion. These stockholders also expressed that they view our executive compensation to be in line with our peers.
The Committee remains committed to understanding the perspectives of our stockholders and being responsive to their feedback on our executive compensation program. The Committee will continue to consider the outcome of the Company’s say-on-pay votes and stockholder feedback when making future compensation decisions for the NEOs and directors, including the Chairman of the Board. Compensation Program Philosophy and Objectives of Our Executive Compensation Program Our compensation program continues to focus on performance-based pay that reflects our achievements on an annual basis and our ability to deliver long-term value to our stockholders. The Committee regularly reviews the Company’s compensation programs to ensure they are consistent with sound business practices, regulatory requirements, emerging industry trends and stockholder interests. With this in mind, the following principles help guide our decisions regarding compensation of our NEOs: | ·
● | | Compensation opportunities should be competitive with market practices.We are committed to providing competitive total annual compensation opportunities in order to attract and retain executives with the experience and skills necessary to lead our Company and motivate them to deliver strong performance to our stockholders. |
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● | | A significant portion of compensation should be performance-based.Our executive compensation program emphasizes pay-for-performance. Both our annual and long-term incentives are earned based on a combination of corporate, business unit and individual performance. Our annual incentive compensation also can be reduced based upon improper risk taking and non-compliance with applicable laws and regulations. |
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● | | Management’s interests should be aligned with those of our stockholders.Our long-term incentive compensation is delivered in the form of restricted stock units, or RSUs, to support our goals for alignment, ownership and retention. Half of the RSUs awarded vest upon achievement of predefined performance goals. The value of these performance-based RSUs ultimately depends upon our cumulative earnings per share calculated in accordance with generally accepted accounting principles, or EPS, over the three-year vesting period, modified by total stockholder return. The percentage of these awards that vest is based first on cumulative EPS over a three-year period and then multiplied by a modifier based on our total stockholder return, or TSR, relative to members of the KBW Regional Banking Index during the same period. The calculation for the vesting of performance RSUs is as follows: |
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● | | Compensation should be perceived as fair.We strive to create a compensation program that will be perceived as fair and equitable, both internally and externally. |
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● | | Our compensation program should be balanced and mitigate risk taking.We have a balanced approach to total compensation that includes a mix of fixed and performance-based pay, including cash and equity compensation and short- and long-term incentive compensation. We believe this approach effectively aligns our pay with performance, while discouraging inappropriate risk taking. |
Governance Highlights
The Committee maintains the following compensation best practices:
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| | Robust stock ownership guidelines for executive officers and directors;
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| | Clawback policy for incentive compensation;
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| | Anti-hedging and pledging policy;
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| | No excise tax gross-ups in new employment agreements;
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| | One year holding requirement on all vested equity awards; and
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| | Annual compensation risk assessment.
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Role of Stockholder Say-on-Pay Votes and Stockholder Engagement
The Company provides its stockholders with the opportunity to cast an annual advisory vote on executive compensation. At the Company’s annual meeting of stockholders held in July 2018, over 73% of the votes cast (excluding abstentions and broker non-votes) on the say-on-pay proposal were voted in favor of the proposal. The Committee recognized this result as a slight increase from the 71% support received in 2017 and continued to seek to understand stockholder perspectives on our executive compensation program. During 2018, we reached out to our top 25 stockholders, representing 57% of our outstanding common stock (excluding common stock owned by our directors and executives), to offer a conversation with Mr. Sherman, the chair of our Committee. Mr. Sherman had conversations with six stockholders, representing 24% of our outstanding common stock, during this process.
During these conversations, stockholders provided their perspectives on our executive compensation programs with our Committee Chair. Several stockholders expressed concerns with severance provisions in the retention agreement we entered into with Mr. White upon our acquisition of PlainsCapital Corporation in 2012 and subsequently amended in 2016 upon his promotion to Co-CEO of the Company. In these discussions, Mr. Sherman highlighted the origins of these provisions in Mr. White’s agreement, namely that they were designed to keep Mr. White whole for amounts which would have otherwise been due to him immediately upon any termination of his employment agreement following our acquisition of PlainsCapital Corporation, the company he founded. The Committee did not believe it was appropriate to revise these provisions when asking Mr. White to assume additional responsibilities, particularly given that the revised agreement did not provide for any increases in compensation. Mr. Sherman also discussed with stockholders the Committee’s intention to avoid similar provisions in any new employment arrangements going forward.
Stockholders generally conveyed that they were otherwise supportive of the design of our executive compensation program and provided several items to consider. As such, the Committee has evaluated the suggestions received and made changes, including, among others, the “double trigger” provision in equity awards. The Committee remains open to stockholder perspectives on our executive compensation programs and will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the NEOs.
Background on Our Executive Employment Arrangements
We completed the acquisition of PlainsCapital on November 30, 2012, and the compensation of our NEOs who were employed by PlainsCapital is, therefore, in part based upon the compensation they were paid by PlainsCapital prior to the acquisition. Four of our NEOs, Messrs. White, Feinberg, Schaffner and Salmans, were employed by PlainsCapital or its subsidiaries prior to the acquisition. As discussed above, in connection with the acquisition of PlainsCapital, and to ensure continuity following the closing, we entered into retention agreements with Messrs. White and Schaffner that were negotiated based upon the pre-existing rights in their employment agreements with PlainsCapital Corporation. All other existing employment agreements at PlainsCapital or its subsidiaries were amended to terminate on November 30, 2014. Following the expiration of the employment agreement with Mr. Salmans, we entered into a new employment agreement with him that is consistent with our current compensation philosophy. We entered into an employment agreement with Mr. Furr in connection with his appointment as our Chief Financial Officer effective September 1, 2016. For a more detailed discussion of these employment agreements and Messrs. White’s and Schaffner’s retention agreements, see “Executive Compensation — Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Employment Contracts and Incentive Plans — Employment Contracts.”
Elements of our Executive Compensation Program The basic elements of our executive compensation program are summarized below. Our compensation policies and programs are considered by the Committee in a total rewards framework, which considers both “pay” — base salary, annual incentive awards and long-term incentive awards — and “benefits” — perquisites and other benefits and compensation. Our executive compensation program consists primarily of the following components:
| | | Compensation Component
| | Purpose
| Base Salary
| | Fixed component of pay intended to compensate the individual fairly for the responsibility level of the position held.
| | | | Annual Incentive Awards
| | Variable component of pay intended to motivate and reward the individual’s contribution to achieving our short-term/annual objectives.
| | | | Long-term Incentive Awards
| | Variable component of pay intended to retain, motivate and reward the individual’s contribution to achieving our long-term objectives and creating stockholder value.
| | | | Perquisites and Other Benefits
| | Fixed component of pay intended to provide an economic benefit to us in attracting and retaining executive talent.
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Table of Contents
This section describes the 2020 compensation arrangements for our NEOs. Base Salary We provide a base salarysalaries for each NEO commensurate withbased on the services provided to us.Committee’s assessment of the scope of each individual’s responsibilities, performance and experience. We believe a portion of total direct compensation should be provided in a form that is fixed and liquid. In reviewing base salaries, the Committee evaluated the salaries of other executive officers of the Company and its peers and any increased level of responsibility, among other items. Except for the increases to the salaries of the Co-Chief Executive Officers and the Chief Financial Officer noted in the table below, the Committee determined to maintain the current salaries of all NEOs for 2018, as they were found to be competitive with the Company’s peers. The increase in the Co-Chief Executive Officers’ salaries was primarily the result of the departure of Mr. Huffines at the end of 2017 and the elimination of that position. Accordingly, the Co-Chief Executive Officers assumed additional responsibilities due to the elimination of that position. The following table lists the base salaries for our NEOs in 20172019 and 2018:2020: | | | | | | | | | | | | | | Base Salary | | | | | | | | | | | | | | | | | | | | | Base Salaries | | | | | Name | | 2017 | | 2018 | | % Increase | | | 2019 | | 2020 | | % Increase | | Jeremy B. Ford | | $ | 725,000 | | $ | 750,000 | (a) | | 3.4 | % | | $ | 750,000 | | $ | 775,000 | (a) | | 3.3 | % | Alan B. White | | $ | 1,400,000 | | $ | 1,450,000 | (b) | | 3.6 | % | | William B. Furr | | $ | 425,000 | (c) | $ | 450,000 | | | 5.9 | % | | $ | 485,000 | | $ | 500,000 | (a) | | 3.1 | % | Hill A. Feinberg | | $ | 500,000 | | $ | 500,000 | | | — | | | Jerry L. Schaffner | | $ | 525,000 | | $ | 575,000 | (d) | | 9.5 | % | | $ | 625,000 | | $ | 650,000 | (a) | | 4.0 | % | Todd L. Salmans | | $ | 750,000 | | $ | 750,000 | | | — | | | Stephen Thompson | | | $ | 650,000 | | $ | 725,000 | (b) | | 11.5 | % | M. Bradley Winges | | | $ | 500,000 | (c) | $ | 500,000 | | | — | |
| (a) | Base salary increases became effective on March 29, 2020. |
| (b) | Mr. Jeremy B. Ford’sThompson’s base salary increasedincrease became effective on January 1, 2020 upon being promoted to $750,000 on April 1, 2018.CEO of PrimeLending. |
| (b)
(c) | | Mr. White’s originalWinges’ base salary of $1,350,000 was set forthestablished in his retention agreement, which became effective upon the closing of the acquisition of PlainsCapital. An increase in base salary to $1,400,000 was approved and made effective on April 1, 2017, with a subsequent increase to $1,450,000 which was approved and made effective on April 1, 2018. As previously discussed, Mr. White retired effective April 1, 2019, from all positionsconnection with the Company, including as a membercommencement of the Board of Directors. his employment on February 20, 2019. |
| (c)
| | Mr. Furr’s base salary increased to $450,000 on April 1, 2018.
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| (d)
| | Mr. Schaffner’s base salary increased to $575,000 on April 1, 2018.
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In March 2019,February 2021, the Committee assessed base salaries of the NEOs and decided to provide the following increases beginning on April 1, 2019: $35,000March 28, 2021: $25,000 for Mr. Jeremy B. Ford (new salary $800,000); $50,000 for Mr. Furr (new salary $485,000) and $50,000$550,000); $10,000 for Mr. Schaffner (new salary $625,000)$660,000); and $75,000 for Mr. Thompson (new salary $800,000). These increases were determined to be appropriate given performance by these individuals, as well as the increased responsibility for Mr. Schaffner following the departure of Mr. White.individuals. Annual Incentive AwardsProgram Our NEOs and other employees are eligible to participate in the Annual Incentive Plan and receive annual cash incentive awards based upon our financial performance and other factors, including individual performance. The Committee believes that this element of compensation is important to focus management efforts on, and provide rewards for, annual financial and strategic results that are aligned with creating value for our stockholders.
Target Annual Incentive Opportunities Target incentive awards are defined at the start of the year in consideration of market data provided by the Committee’s consultant, each NEO’s total compensation package and the entity’sCompany’s budgetary considerations. The Committee increased the annual incentive targetstarget (as a percent of salary) in 2020 as compared to 2019 for Messrs. Furr, FeinbergSchaffner and SchaffnerWinges following a review of market practices and in order to place more emphasis on pay-for-performance. The following table sets forforth information concerning Annual Incentive Plan opportunities for 2018:2020: | | | | | | | | | | | | Annual Incentive Value | | | | | | Target | | | | | | Threshold | | Amount | | % of Annual | | Maximum | | | | | | | | | | | | | | | Annual Incentive Opportunity | | | | | | Target | | | | | | Threshold | | Amount | | % of | | Maximum | Name | | ($) | | ($) | | Base Salary | | ($) (b) | | ($) | | ($) | | Base Salary | | ($) (a) | Jeremy B. Ford | | 135,000 | | 750,000 | | 100 | % | 1,125,000 | | 387,500 | | 775,000 | | 100 | % | 1,433,750 | Alan B. White (a) | | — | | 1,450,000 | | 100 | % | — | | William B. Furr | | 72,000 | | 400,000 | | 89 | % | 600,000 | | 225,000 | | 450,000 | | 90 | % | 832,500 | Hill A. Feinberg | | 108,000 | | 900,000 | | 180 | % | 1,350,000 | | Jerry L. Schaffner | | 60,000 | | 500,000 | | 87 | % | 750,000 | | 292,500 | | 585,000 | | 90 | % | 1,082,250 | Todd L. Salmans | | 90,000 | | 750,000 | | 100 | % | 1,125,000 | | Stephen Thompson | | | 362,500 | | 725,000 | | 100 | % | 1,341,250 | M. Bradley Winges | | | 625,000 | | 1,250,000 | | 250 | % | 2,312,500 |
| (a) | | Mr. White’s annual incentive compensation is determined pursuant to his retention agreement for the achievement of specified performance criteria.
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| (b)
| | Awards are capped at 150%185% of the target amount. | |
Plan Structure and Performance Measures Each NEO had pre-defined performance objectives based upon measurable performance of both ourthe Company and the individual, other than Mr. White, whose pre-defined performance objectives are based solely upon Hilltop’s performance.individual. At least 70% of each executive’s incentive was based on the net income of ourthe Company and/or their relevant business unit. Our 2018 goals were intended to be realistic and reasonable but challenging in order to drive performance. The Committee and management believe that by using these metrics we are encouraging profitable top line growth and value for stockholders without creating excessive risk.
The measures and weights of the performance objectives for each NEO for 20182020 are summarized in the following table:graph: | | | | | | | | | | Hilltop | | Business Unit | | Strategic/ | | Name | | Net Income | | Net Income | | Individual Goals | | Jeremy B. Ford | | 70 | % | — | | 30 | % | Alan B. White (a) | | 100 | % | — | | — | | William B. Furr | | 70 | % | — | | 30 | % | Hill A. Feinberg | | 20 | % | 50 | % | 30 | % | Jerry L. Schaffner | | 20 | % | 50 | % | 30 | % | Todd L. Salmans | | 20 | % | 50 | % | 30 | % |
| (a)
| | Determined pursuant to Mr. White’s retention agreement for the achievement of earnings target.
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In addition to the above criteria, all payouts under the Annual Incentive Plan are subject to forfeiture and clawback in the event of any improper risk management or non-compliance with applicable laws and regulations. The individual strategic objectives for the NEOs are developed through an iterative process between the Committee2020 Goals and management. Management develops an initial set of recommendations based upon the business needs. The Committee reviews the proposed goals and revises/amends them at its discretion, ensuring that goals are aligned with the Board of Director’s strategic focus. The following strategic and individual goals, among others, were established for the NEOs in 2018:Results
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| | Mr. Jeremy B. Ford: execute the Company’s 2018 strategic plan, active pursuit and integration of strategic acquisition opportunities that complement the Company’s business mix and finalize our shared-services initiative.
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| | Mr. Furr: implementation of travel and expense programs and credit risk tools, execute our shared-services initiative, completion of model documentation and complete successful second year Dodd-Frank Act Stress Test submission with enhancements.
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| | Mr. Feinberg: support our shared-services initiative, select and finalize new broker-dealer technology and support system, improve municipal underwriting, improve capital markets and products, improve retail production and execute on liquidity facilities.
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| | Mr. Salmans: support our shared-services initiative, foster and drive organic growth in existing and new markets, oversee transition to new loan operating system, succession planning and development and growth of key successors.
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| | Mr. Schaffner: support our shared-services initiative, loan and deposit growth to targets, focus on SBA and food and agriculture loans and new deposit products, and branch optimization through multi-year plan
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Performance Results and Payouts
The Committee, in its sole discretion, determines the final amount of each participant’s annual cash incentive award based on attainment of the applicable performance goals and excluding Mr. White, assessments of individual and strategic performance. Each element of the annual cash incentive award is independent of the other. Accordingly, the executive officer may achieve certain performance goals, while at the same time failing to achieve others. In that case, the executive officer will be entitled to receive the award for the performance goal achieved, but not an award for a performance goal for which threshold performance is not achieved. Potential awards ranged from 50% for threshold performance to a maximum of 150%185% for stretch performance (with a 200% maximum for financial performance and a 150% maximum for strategic goals). Early in 2020, the Committee established earnings goals for Hilltop and each business unit. Our 2020 goals were intended to be realistic and reasonable but challenging in order to drive performance. At the end of the fiscal year, the Committee determined a payout based on net income performance. 20182020 performance goals and actual net income performance were as follows (dollars in millions): | | | | | | | | | | | | 2018 Performance Goal | | Threshold ($) | | Target ($) | | Stretch ($) | | Actual ($) | | Achievement | | Hilltop Adjusted Net Income | | 105.0 | | 175.0 | | 218.8 | | 131.2 | | 75 | % | | | | | | | | | | | | | PlainsCapital Pre-Tax Income | | 87.5 | | 145.9 | | 182.4 | | 155.5 | | 107 | % | | | | | | | | | | | | | Hilltop Securities Pre-Tax Income | | 31.5 | | 52.5 | | 65.6 | | 38.4 | | 73 | % | | | | | | | | | | | | | PrimeLending Pre-Tax Income | | 35.7 | | 59.4 | | 74.3 | | 22.4 | | — | % |
| | | | | | | | | | | | 2020 Performance Goal (a) | | Threshold ($) | | Target ($) | | Maximum ($) | | Actual ($) | | Achievement (b) | | Hilltop Adjusted Net Income | | 95.5 | | 158.6 | | 198.3 | | 411.0 | | 200 | % | | | | | | | | | | | | | PlainsCapital Adjusted Pre-Tax Income | | 90.8 | | 151.3 | | 189.1 | | 185.0 | | 122 | % | | | | | | | | | | | | | Hilltop Securities Adjusted Pre-Tax Income | | 44.0 | | 73.3 | | 91.6 | | 117.0 | | 160 | % | | | | | | | | | | | | | PrimeLending Adjusted Pre-Tax Income | | 21.7 | | 36.1 | | 45.1 | | 396.0 | | 200 | % |
| (a) | The Compensation Committee established goals and determines performance results based on adjusted non-GAAP results that exclude the impact of items including CECL, leadership changes, business realignment and disposition, and efficiencies that are not indicative of ongoing operations. | |
| (b) | Awards are capped at 200% of the target amount under the plan. | |
The individual and strategic objectives for the NEOs are developed through an iterative process between the Committee and management. Management develops an initial set of recommendations based upon the business needs. The Committee reviews the proposed goals and revises/amends them at its discretion, ensuring that goals are aligned with the strategic plan approved by the Board of Directors.
The following strategic and individual goals, among others, were established for the NEOs in 2020: | | | Executive | Key Objectives | Key Outcomes | Jeremy B. Ford | ● Execute strategic plan to drive revenue growth and manage expenses ● Continued execution on platform initiatives of enhanced business operations, strategic sourcing and shared services ● Execute capital management through M&A sourcing and stockholder returns ● Lead strategic projects ● Effectively manage business through the Coronavirus pandemic | ● Executed strategic plan and platform initiatives ● Completed platform initiatives ahead of schedule ● Delivered quantifiable benefits of efficiency initiatives and capital management ● Identified strategic projects completed ● Effectively managed business through pandemic with record earnings | William B. Furr | ● Effective delivery against operational priorities, including remediation of material weakness; launch of corporate profitability and performance management; manage financial risks, reporting and controls; support delivery of net interest margin budget ● Effective delivery against strategic priorities, including finance simplification; mortgage enhancement model; LIBOR readiness; and overall strategic planning ● Effectively manage the business through the pandemic | ● Remediated material weakness ● Effectively managed financial risks, reporting and controls ● Delivered quantifiable benefits through management of capital and liquidity during pandemic ● Delivered against strategic priorities | Jerry L. Schaffner | ● Meet strategic objectives for managed loan growth, deposit market share, treasury management verticals, private banking, expense and compensation Effectively manage the business through the pandemic Effectively manage credit portfolio Support customers through the pandemic | ● Effectively managed credit during the pandemic Supported those affected by pandemic through PPP loans and payment deferrals Effectively managed expense Provided effective leadership during pandemic | Stephen Thompson | ● Drive success across four strategic initiatives ● Direct the business and adapt as market conditions dictate to achieve targeted business and enterprise objectives ● Drive succession planning and talent management ● Protect and cultivate culture and high employee engagement Actively support Hilltop shared services initiatives Effectively manage the business through the pandemic | ● Provided effective leadership of PrimeLending ● Effectively assumed PrimeLending CEO position ● Fostered growth initiatives, drove culture improvements and oversaw implementation of strategic priorities ● Effectively managed the business through pandemic with record volumes |
M. Bradley Winges | ● U.S. Agency to-be-announced, or TBA, mortgage-backed securities business maturity ● Support and drive FIS core system conversion Continue to build Public Finance Services business line and focus on profitability Implement compensation plans Foster culture to grow the business ● Actively support Hilltop shared services initiatives Effectively manage the business through pandemic, including risk, liquidity and work from home | ● Effectively converted to FIS system during the pandemic ● Effectively managed risk during the conversion and delivered record financial results for the firm ● Implemented compensation plans, including mandatory deferral and garden leave ● Provided effective leadership during the pandemic ● Implemented improvements to the firm in line with long-term strategic plans |
The Committee evaluated the individual performance of each executive, including the factors noted in the table above, and recognized the results each executive achieved that drove the Company’s outstanding performance in 2020. Based upon evaluationthese evaluations of their respectiveeach NEO’s individual performance in 2018,2020, the Committee awarded each NEO the NEOs, other than Mr. White scores ranging from 100% to 140%maximum of 150% for theirhis strategic and individual goals. The Committee also assessed risk and compliance performance for each NEO and determined that no reductions were warranted. Based on the above financial and individual performance measures and the Committee’s discretion, the 20182020 annual cash incentive payments were awarded as follows relative to the 20182020 target value: | | | | | | | | 2018 Annual | | % of 2018 Target | | Name | | Incentive Payment ($) | | Annual Incentive | | Jeremy B. Ford | | 625,000 | | 83 | % | Alan B. White (a) | | 1,450,000 | | 100 | % | William B. Furr | | 390,000 | | 98 | % | Hill A. Feinberg | | 900,000 | | 100 | % | Jerry L. Schaffner | | 530,000 | | 106 | % | Todd L. Salmans | | 500,000 | | 67 | % |
| (a)
| | The amount was determined pursuant to his retention agreement for the achievement of earnings target.
|
| | | | | | | | 2020 Annual | | % of 2020 Target | | Name | | Incentive Payment ($) | | Annual Incentive | | Jeremy B. Ford | | 1,433,750 | | 185 | % | William B. Furr | | 832,500 | | 185 | % | Jerry L. Schaffner | | 789,750 | | 135 | % | Stephen Thompson | | 1,341,250 | | 185 | % | M. Bradley Winges | | 2,061,339 | | 165 | % |
See “Executive Compensation — Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Annual Incentive Plan” for more information with respect to our stockholder-approved Annual Incentive Plan. Discretionary Cash Bonuses As a result of the extraordinary and record performance achieved during 2020, especially in light of the ongoing pandemic, the Committee reviewed and evaluated the annual incentive bonus that may have been paid in the event the caps were removed. The Committee also evaluated the performance of these individuals in response to the pandemic. Further, the Committee recognized the special and annual bonuses paid to non-executive employees for their performance and the performance of the Company, which increased 99.6% on a pre-tax basis from the prior year. In particular, with respect to Mr. Thompson, PrimeLending had record mortgage origination volume of $23.0 billion (an increase of 47% from prior year) and adjusted pre-tax income of $396 million (an increase of 456% from prior year). Based upon that evaluation, the Committee determined it to be in the best interests of the Company to provide additional cash payments to the following NEOs. | | | | | 2020 Discretionary | Name |
| Bonus Payment ($) | Jeremy B. Ford | | — | William B. Furr | | 500,000 | Jerry L. Schaffner | | 140,000 | Stephen Thompson | | 2,225,000 | M. Bradley Winges | | 650,000 |
Each of the NEOs above that currently has an employment agreement with us (Messrs. Furr, Schaffner, Thompson and Winges) agreed and acknowledged that the discretionary bonus paid will not be included in the calculation of any termination or change in control payments under their respective agreement. The Committee believes these additional payments to be an extraordinary event in light of the record financial results in 2020, and considers them to be non-recurring. Accordingly, the performance criteria for compensation awards granted in 2021 were adjusted to reflect that such compensation earned will likely be more in line with prior incentive compensation levels. Long-Term Incentive AwardsIncentives As described above, we believe that a portion of each NEO’s compensation should be tied to the performance of our stock price, aligning the officer’s interest with that of our stockholders. In this regard, in 2020 the Committee determined that the award vehicle mix should be: | | | | | | Award Vehicle Mix
| | % of Award
| Time-Based Restricted Stock Units
| | 50%
| Performance-Based Restricted Stock Units
| | 50%
|
continue to provide an equal mix of PRSUs and TRSUs. Time-based RSUs cliff vest on the third anniversary of the date of grant. Performance-based RSUs are
PRSUs granted in 2020 will be earned and cliff vest subject to certain performance goals being met after the three-year performance period from January 1, 20182020 through December 31, 2020. Under the current form of RSU award agreement,2022. The PRSUs provide that the percentage of performance-based RSUsshares that will vest following aat the end of the performance period iswill be determined based on Hilltop’s three-year cumulative EPS relative to pre-established performance objectives, multiplied by a modifier that is determined based on Hilltop’s TSR relative to banks in the KBW Regional Banking Index. The EPS component of the performance calculation ranges from 50% at threshold (for results at 75% of the EPS goal) to 150% at maximum (for results at 125% of the EPS goal), and the TSR modifier ranges from 80% at threshold to 120% at maximum. Theas follows:
Accordingly, the total number of shares earned from the performance awards can range from 40% to 180% of the target number of RSUsPRSUs granted. No shares will be awarded if EPS results are below threshold. The calculation for the vesting of PRSUs is as follows: 
For example, if EPS is above stretch performance and Relative TSR is below threshold, the payout percentage would be as follows: 
TRSUs cliff vest on the third anniversary of the date of grant. All shares of common stock delivered pursuant to the RSUs are subject to a one-year holding period requirement after vesting. All equity-based awards, including those made to the NEOs, prior to July 2020 were made pursuant to the 2012 Equity Incentive Plan. Since July 2020, all equity-based awards have been made pursuant to the 2020 Equity Incentive Plan, which was adopted by stockholders at the 2020 Annual Meeting of Stockholders held in July 2020. All equity-based awards made to the NEOs are approved by the Committee and not pursuant to delegated authority. Further discussion of the 2012 Equity Incentive Plan and the 2020 Equity Incentive Plan pursuant to which such RSUs were awarded is found under “Executive Compensation — Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table” below.
2020 Long-Term Incentive Grants In 2018,2020, long-term incentive awards were made in consideration of each executive’s role, competitive market practice, and performance. Grants were made in the form of RSUs on March 5, 2018,February 20, 2020, to the following NEOs as set forth below: | | | | | | | | | | | | | Performance-Based | | | | | | | Time-Based RSUs | | RSUs Awarded | | Total RSUs | | | | | | | | | | | | | | | | PRSUs | | Total RSUs | | | | TRSUs | | Awarded | | Awarded | Name | | Awarded | | (at Target) | | Awarded | | | Awarded | | (at Target) | | (at Target) | Jeremy B. Ford | | 31,766 | | 31,766 | | 63,532 | | | 67,782 | | 67,781 | | 135,563 | Alan B. White | | 14,096 | | 14,096 | | 28,192 | | | William B. Furr | | 7,753 | | 7,752 | | 15,505 | | | 11,297 | | 11,297 | | 22,594 | Hill A. Feinberg | | 8,055 | | 8,055 | | 16,110 | | | Jerry L. Schaffner | | 6,645 | | 6,645 | | 13,290 | | | 9,603 | | 9,602 | | 19,205 | Todd L. Salmans | | 7,048 | | 7,048 | | 14,096 | | | Stephen Thompson | | | 6,779 | | 6,778 | | 13,557 | M. Bradley Winges | | | 13,557 | | 13,556 | | 27,113 |
In 2020, Mr. Thompson received an additional grant of 5,014 TRSUs that will cliff vest on the third anniversary of the date of grant. The additional TRSUs were granted in connection with Mr. Thompson’s promotion to Chief Executive Officer of PrimeLending. Additionally, in 2020 Mr. Jeremy Ford received a grant of 41,667 TRSUs that cliff vest on third anniversary of the date of grant. These TRSUs were awarded in connection with the successful, and resulting gain from, sale of National Lloyds Corporation on June 30, 2020. 2021 Long-Term Incentive Grants On February 27, 2019,23, 2021, the Committee continuedadjusted the same mix of long-term incentive awards to increase the allocation to PRSUs based upon performance during 2020 and approved a grant of RSUs to the NEOs, as set forth below: | | | | | | | | | | | | Performance-Based | | | | | | Time-Based RSUs | | RSUs Awarded | | Total RSUs | | Name | | Awarded | | (at Target) | | Awarded | | Jeremy B. Ford | | 45,173 | | 45,173 | | 90,346 | | Alan B. White (a) | | — | | — | | — | | William B. Furr | | 11,358 | | 11,358 | | 22,716 | | Hill A. Feinberg (b) | | — | | — | | — | | Jerry L. Schaffner | | 10,325 | | 10,325 | | 20,650 | | Todd L. Salmans | | 10,325 | | 10,325 | | 20,650 | |
| (a)
| | Mr. White retired effective April 1, 2019, from all positions with the Company, including as a member of the Board of Directors.
|
| (b)
| | In February 2019, Mr. Feinberg was succeeded by M. Bradley Winges as President and Chief Executive Officer of Hilltop Securities. Mr. Feinberg continues to serve as Chairman of Hilltop Securities.
|
| | | | | | | | | | | PRSUs | | Total RSUs | | | TRSUs | | Awarded | | Awarded | Name | | Awarded | | (at Target) | | (at Target) | Jeremy B. Ford | | 50,603 | | 80,117 | | 130,720 | William B. Furr | | 10,107 | | 16,133 | | 26,240 | Jerry L. Schaffner | | 7,284 | | 8,886 | | 16,170 | Stephen Thompson | | 9,917 | | 20,593 | | 30,510 | M. Bradley Winges | | 10,678 | | 12,202 | | 22,880 |
SinceIn determining the adoptiongrants for 2021, which generally had higher grant values than 2020 while maintaining similar share usage, the Committee gave consideration to the Company’s exceptional results in 2020 that were well above the maximum performance levels allowed for in the Annual Incentive Plan (which is capped at 185% of the 2012 Equity Incentive Plan, all equity-based awards, including those madetarget amount). In particular, the Committee gave special consideration to the NEOs, have been made pursuant toleadership of Messrs. Jeremy B. Ford, Furr, Winges and Thompson in driving the 2012 Equity Incentive Plan. All equity-based awards made to the NEOs are approvedCompany’s record financial performance and successful execution of multiple key strategic priorities. The consideration given by the Committee and not pursuant to delegated authority.increase 2021 grant values in recognition of outstanding performance is expected to be non-recurring; however, such considerations will be evaluated by the Committee as it deems necessary.
Payout for 2016-2018 Performance-Based RSUsof the 2018-2020 PRSUs The following table provides the calculation of the payout for performance-based RSUsthe PRSUs granted in 2016. Payouts2018, which resulted in 180% of the target number of shares being earned. Similar to the 2020 awards described above, payouts for the 2016 awards werePRSUs granted in 2018 cliff vested in three years, or early 2021, based on our three-year cumulative EPS results and our three-year TSR relative to members of the KBW Regional Banking Index. Performance-based RSUs granted during 2016 are earned and cliff vest after three years based on EPS performance multiplied by a modifier of the payout based on our three-year TSR relative TSR. to the banks in the KBW Regional Banking Index. | | | | | | | | | | | | | | | | | | | | | Metric | | Threshold | | Target | | Maximum | | Actual Performance | | | Threshold | | Target | | Maximum | | Actual | Cumulative EPS | $ | 2.63 | $ | 3.50 | $ | 4.38 | $ | 4.12 | | $ | 3.75 | $ | 5.00 | $ | 6.25 | $ | 8.74 | Relative TSR percentile | | 25th | | 50th | | 75th | | 10th | | | % of Target Payout | | | 50% | | 100% | | 150% | | 150% | | | | | | | | | | | Relative TSR percentile ranking | | | 25th | | 50th | | 75th | | 89th | Modifier | | | 80% | | 100% | | 120% | | 120% | | | | | | | | | | | Final Payout | | | | | | | | | 180% |
Perquisites and Other Benefits We provide various perquisites and other benefits to certain NEOs. Mr. Jeremy B. Ford is and Alan B. White was, provided access to company aircraft. Messrs. White, Salmansaircraft for personal use and Schaffner are or were provided with a monthly car allowance and reimbursement for country club membership dues. In addition, Mr. White was, andsuch personal use is treated as income to him. Mr. Schaffner is provided bank-owned life insurance.with a company-owned vehicle for his use. Otherwise, our NEOs generally receive only medical benefits, life insurance and long-term disability coverage, as well as supplementalmatching contributions to the Company’s 401(k) program, on the same terms and conditions as generally available to all employeesemployees. See “Executive Compensation — All Other Compensation Table” below. Compensation of that entity. Gerald J. Ford, Chairman of the Board of Directors, provides us with significant value given his experience in the financial services industry, including mergers and acquisitions, capital and liquidity management and other operating matters, such as key personnel hires. On a daily basis, our Chairman and Chief Executive Officer discuss matters relating to the Company. Weekly, our Chairman also meets with the executive management of the Company to discuss matters related to the Company. In addition, our Chairman is instrumental in the sourcing, negotiation and completion of acquisitions and dispositions. Accordingly, our Chairman, in addition to his strategic input, spends considerable time and efforts in guiding our business and executive management in creating value for shareholders. In addition to the fees paid to our Chairman of the Board of Directors described above, we also grant the Chairman of the Board of Directors a restricted stock unit, or RSU, award representing 30,000 shares each year. This RSU award cliff vests on the third anniversary of the date of grant. The RSU award agreement also provides for pro rata vesting upon termination without cause, death or disability. Commencing in 2019, all equity award agreements, including the RSU awards granted to the Chairman of the Board of Directors, contain “double trigger” provisions, which require termination without cause within the six months preceding or the twelve months following a change in control in order for the equity awards to vest in connection with a change in control. The Compensation Committee evaluates the compensation of directors annually, including grants of RSUs to the Chairman of the Board of Directors. Given the experience and involvement of the Chairman of the Board of Directors, the Compensation Committee believes that the compensation paid to the Chairman of the Board of Directors is considerably less than the cost that we would incur to employ or retain someone else of his caliber to provide guidance and advice to us as frequently as he does. Severance and Other Post-Termination CompensationArrangements We generally do not currently maintain any severance or change in control programs other than the change in control provisions in our 2012 Equity Incentive Plan and 2020 Equity Incentive Plan (with exceptions noted below). However, weWe have, however, historically paid severance, the amount of which is generally determined based on both by length of tenure and level of compensation, when termination occurs other than for cause and pursuant to which certain benefits may be provided to the NEOs. Absent the negotiation of specific agreements with the NEOs, severance benefits would be provided on the same basis as provided to other employees of the Company. In connection with our acquisition of PlainsCapital in 2012, we entered into an employment agreement with Mr. Salmans. We subsequently entered into a new employment agreement with Mr. Salmans in 2014 following the expiration of his previous agreement. Mr. Salmans’ agreement was amended in November 2017 to extend the term of the agreement to December 31, 2019. A description of this employment agreement and the post-contractual benefits provided thereunder is discussed in further detail under “Executive Compensation — Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Employment Contracts and Incentive Plans — Employment Contracts” and “Potential Payments Upon Termination or Change-in-Control” below.
In connection with our acquisition of PlainsCapital in 2012, we entered into retention agreements with Messrs. White and Schaffner, which were approved by shareholders of PlainsCapital in connection with our acquisition of PlainsCapital. The summary of the severance terms for these retention agreements is set forth below:
Legacy White Retention Agreement
Pursuant to Mr. White’s retention agreement:
| (1)
| | we agreed to contribute an amount of cash equal to $6,430,890 as deferred compensation to Mr. White in satisfaction of Mr. White’s rights under Section 6 (Termination Upon Change in Control) of his previous employment agreement with PlainsCapital, which such amount accrues interest at the prevailing money market rate and is payable to Mr. White on the 55th day following termination of his employment; and
|
| (2)
| | upon a termination of his employment by us other than for cause or death or disability, or after non-renewal, cash severance of (i) the sum of Mr. White’s annual base salary and the average of the annual bonus amounts paid to him for the three most recently completed fiscal years ending immediately prior to the date of termination, multiplied by (ii) the greater of (A) two, and (B) the number of full and partial years from the date of termination through the end of the applicable employment period under the retention agreement. Such severance is payable over the “severance period,” which is the greater of two years from the date of termination and the number of full and partial years from the date of termination through the end of the applicable employment period under the retention agreement.
|
The foregoing cash amounts in subparagraph (1) represent “modified single trigger” benefits, payable assuming the termination of employment for any reason, and the foregoing cash amounts in subparagraph (2) represent “double trigger” benefits, payable assuming a qualifying termination of employment. With respect to the amounts described in subparagraph (1) that are paid in full satisfaction of Section 6 of Mr. White’s previous employment agreement with PlainsCapital, such amounts are payable upon any termination of employment at any time, subject to any delay required by Section 409A of the Internal Revenue Code, or the Code, and the execution of a release of claims. The cash severance amounts described in subparagraph (2) are payable upon a termination of employment other than for cause, death or disability or upon a termination due to non-renewal by Hilltop, subject to any delay required by Section 409A of the Code and the execution of a release of claims.
Mr. White’s retention agreement was amended in 2016 solely to recognize his promotion to Co-Chief Executive Officer of the Company and to specify that his annual incentive would be based on the consolidated results of Hilltop (as opposed to just the results of PlainsCapital). The amendment did not include any changes to his pay opportunity or the other terms of his employment. The Committee did not believe it was appropriate to alter other terms of the agreement given that it (a) increased his duties and responsibilities without providing Mr. White additional compensation and (b) was negotiated as part of our acquisition of PlainsCapital to secure Mr. White’s continued employment, including the amounts payable under subparagraph (1) above which would otherwise have been due to Mr. White immediately upon any termination of his employment following our acquisition of PlainsCapital. Further, Mr. White had the right to terminate his employment in the event other modifications were required in connection with the amendment.
On February 21, 2019, the Company entered into a Separation and Release Agreement, or the Separation Agreement, with Mr. White in connection with his termination of employment effective April 1, 2019, or the Retirement Date. Pursuant to the Separation Agreement, effective as of the Retirement Date, Mr. White resigned from all positions with the Company and its subsidiaries, including, without limitation, Vice-Chairman of the Board of Directors of the Company and Co-Chief Executive Officer of the
Company. The Separation Agreement also provided that the Retention Agreement by and between the Company and Mr. White, as amended, terminated on the Retirement Date, except for certain provisions that address, among other items, non-competition, non-solicitation, confidential information and arbitration.
Pursuant to the Separation Agreement, and in accordance with the Retention Agreement, Mr. White is entitled to receive, subject to any delay required under Section 409A of the Internal Revenue Code, the following:
| ·
| | Salary up to and including the Retirement Date;
|
| ·
| | $1,450,000 as a cash bonus based upon the Company’s 2018 performance;
|
| ·
| | Commencing 60 days following the Retirement Date, $5,770,000, which amounts to two times his annual base salary and average three year bonus, in installments over the next two years in accordance with current payroll practices of the Company;
|
| ·
| | $6,672,372 that constitutes the Prior Agreement Payment plus interest thereon, which has been held in a separate interest bearing account since the acquisition of PlainsCapital Corporation by the Company;
|
| ·
| | $23,000 for COBRA assistance; and
|
| ·
| | Continued payment of premiums with respect to a Split-Dollar Life Insurance Policy, which policy is for the benefit of Mr. White and the Company.
|
In addition, the Separation Agreement provided that all of Mr. White’s unvested restricted stock units continued to vest, or remain eligible for vesting on a pro rata basis, through April 1, 2019. The Separation Agreement also contained a mutual release between Mr. White and the Company.
Furr Employment Agreement Pursuant to our employment agreement with Mr. Furr, as amended, upon termination of his employment by us other than for cause, Mr. Furr is entitled to receive his base salary through the effective date of such termination, all earned and unpaid and/or vested, nonforfeitable amounts owed to him at such time under the employment agreement, RSU award agreements or under any compensation or benefit plans, and reimbursement for any unreimbursed business expenses incurred prior to the effective date of such termination (collectively, the “Furr Accrued Amounts”) and a lump-sum cash payment equal to the sum of (i) his annual base salary rate immediately prior to the effective date of such termination, and (ii) an amount equal to the annual incentive cash bonus paid to him in respect of the calendar year immediately preceding the year of the termination.termination, provided that Mr. Furr executes and delivers a release to the Company. If his employment is terminated without “cause” within the twelve months immediately following, or the six months immediately preceding, a “change in control,” he will be entitled to receive the Furr Accrued Amounts and a lump-sum cash payment equal to two times the sum of (i) his annual base salary rate immediately prior to the effective date of such termination and (ii) an amount equal to the annual incentive cash bonus paid to him in respect of the calendar year immediately preceding the year of the termination, provided that Mr. Furr executes and delivers a release to the Company. The immediately foregoing cash amount represents a “double trigger”
benefit. Finally, if any payment made as a result of a change in control would constitute a “parachute payment” as defined under Section 280G of the Internal Revenue Code, or the Code, the benefits payable will be reduced to $1 below the parachute limit. Mr. Furr’s employment agreement was amended on August 30, 2019, to extend the term of the agreement to August 31, 2022, add a customer non-solicitation provision and extend the employee non-solicitation provision, among other changes to be consistent with other employment agreements with the Company. Schaffner Retention Agreement On November 30, 2012, in connection with the Company’s acquisition of PlainsCapital, the Company entered into a retention agreement with Mr. Schaffner. If Mr. Schaffner’s employment contract is terminated by the Company for cause, by Mr. Schaffner or due to his death or disability (as such terms are defined below), he or his estate, as applicable, is entitled to: | ● | his annual base salary through the date of termination, to the extent not already paid and not deferred; |
| ● | any annual bonus earned for a prior award period, to the extent not already paid and not deferred; |
| ● | any business expenses he incurred that are not yet reimbursed as of the date of termination; and |
| ● | any other amounts or benefits, including all unpaid and/or vested, nonforfeitable amounts owing or accrued to him, required to be paid or provided or which he is eligible to receive under any plan, program, policy or practice or contract or agreement, to the extent not already paid and not deferred, through the date of termination. |
In addition, if Mr. Schaffner’s employment is terminated, he or his estate, as applicable, is entitled to a lump-sum cash payment equal to $2,448,000, which represents the amount Mr. Schaffner would have been entitled to receive under his prior employment agreement with PlainsCapital if his employment was terminated at the time of our acquisition of PlainsCapital, plus interest. Thompson Employment Agreement In connection with the promotion of Mr. Thompson as President and Chief Executive Officer of PrimeLending, on October 25, 2019, the Company and Mr. Thompson entered into an employment agreement that became effective as of January 1, 2020 and will remain in effect until December 31, 2022. If the employment agreement is terminated by the Company for “cause” (as such term is defined in the employment agreement), Mr. Thompson will be entitled to receive his base salary through the effective date of such termination, all earned and unpaid and/or vested, nonforfeitable amounts owed to him at such time under the employment agreement, RSU award agreements or under any compensation or benefit plans, and reimbursement for any unreimbursed business expenses incurred prior to the effective date of such termination (collectively, the “Thompson Accrued Amounts”), provided that Mr. Thompson executes and delivers a release to the Company. With respect to a termination resulting from Mr. Thompson’s death or disability, Mr. Thompson (or his estate) will be entitled to receive (i) the Thompson Accrued Amounts, (ii) any portion of the sign-on grant of RSUs with a market value of $125,000 or of any other long-term incentive plan that vests pursuant to the terms of the applicable award agreement, (iii) an amount equal to the cost of COBRA for Mr. Thompson and his immediate family for a period of twelve months following such termination of employment and (iv) a pro rata portion of his target Incentive Bonus for such period, provided that Mr. Thompson executes and delivers a release to the Company. If Mr. Thompson’s employment is terminated by the Company without “cause” (other than pursuant to a “Change in Control” (as such term is defined in the employment agreement)), Mr. Thompson will be entitled to receive the Thompson Accrued Amounts and, subject to his execution and delivery to the Company of a release, (i) a lump-sum cash payment equal to the sum of (A) his annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the Incentive Bonus paid to him in respect of the calendar year immediately preceding the year of the termination, (ii) an amount equal to the cost of COBRA for his immediate family and himself for a period of twelve months following such termination of employment, and (iii) any portion of the sign-on grant or any other long-term incentive plan award granted to Mr. Thompson that vests pursuant to the terms of the applicable award agreement. If Mr. Thompson’s employment is terminated without “cause” within the twelve months immediately following, or the six months immediately preceding, a “Change in Control,” Mr. Thompson will be entitled to receive the Thompson Accrued Amounts and (i) a lump-sum cash payment equal to two times the sum of (A) his annual base salary rate immediately prior to
the effective date of such termination and (B) an amount equal to the Incentive Bonus paid to him in respect of the calendar year immediately preceding the year of the termination and (ii) an amount equal to the cost of COBRA for his immediate family and himself for a period of twelve months following such termination of employment, provided that Mr. Thompson executes and delivers a release to the Company. Any unvested RSU awards, including the sign-on grant, also will vest if Mr. Thompson is terminated without “cause” within the twelve months immediately following, or the six months immediately preceding, a “Change in Control”. The foregoing benefits described in this paragraph represent “double trigger” benefits. Notwithstanding the above, any amounts payable to Mr. Thompson upon a “Change in Control” shall not constitute a “parachute payment” and will be reduced accordingly. Winges Employment Agreement The Company entered into an employment agreement with Mr. Winges effective upon his commencement of employment with us on February 20, 2019, which remains in effect until February 20, 2022. The employment agreement provides that if Mr. Winges had been terminated without “cause” or due to death or disability within one year of the effective date of his employment agreement, provided that Mr. Winges executed and delivered a release to the Company, he would have received his base salary through the effective date of such termination, all earned and unpaid and/or vested, nonforfeitable amounts owed to him at such time under the employment agreement, RSU award agreements or under any compensation or benefit plans, and reimbursement for any unreimbursed business expenses incurred prior to the effective date of such termination (collectively, the “Winges Accrued Amounts”) and (i) a payment of $2,000,000 less any salary and incentives received during his employment, and this payment would be in lieu of any shares vesting from the grant of any award under a long-term incentive program, (ii) the full vesting and acceleration of, and waiver of any restrictions on transfer, sale or other disposal with respect to, the equity grant of 83,000 TRSUs, and (iii) any portion of the sign-on grant of RSUs with a market value of $200,000 that vested pursuant to the terms of the applicable award agreement. Following the first anniversary of his employment, provided that Mr. Winges executes and delivers a release to the Company, if he is terminated without “cause” he will receive the Winges Accrued Amounts and (i) a lump-sum cash payment equal to one times the sum of (A) his annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the annual incentive cash bonus paid to him in respect of the calendar year immediately preceding the year of the termination, (ii) the full vesting and acceleration of, and waiver of any restrictions on transfer, sale or other disposal with respect to, the equity grant of 83,000 TRSUs, (iii) any portion of the sign-on grant of RSUs with a market value of $200,000 that vests pursuant to the terms of the applicable award agreement, and (iv) any other long-term incentive program award granted to Mr. Winges that vests pursuant to the terms of the applicable award agreement. If Mr. Winges’s employment is terminated without “cause” within the twelve months immediately following, or the six months immediately preceding, a “Change in Control,” Mr. Winges will be entitled to receive the Winges Accrued Amounts and the full vesting of the equity grant, sign-on grant and any other long-term incentive plan awards granted to him, provided that Mr. Winges executes and delivers a release to the Company. In the event the “Change in Control” is on or after the first anniversary of his employment and Mr. Winges is terminated without “cause,” Mr. Winges will be entitled to receive the Winges Accrued Amounts and (i) the full vesting of the equity grant, sign-on grant and any other long-term incentive plan awards granted to him, and (ii) a lump-sum cash payment equal to two times the sum of (A) his annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the annual incentive cash bonus paid to him in respect of the calendar year immediately preceding the year of the termination.termination, provided that Mr. Winges executes and delivers a release to the Company. The immediately foregoing cash amount represents abenefits described in this paragraph represent “double trigger” benefit. Finally, ifbenefits. Notwithstanding, any payment made asamounts payable to Mr. Winges upon a result of a change“Change in control wouldControl” shall not constitute a “parachute payment” as defined under Section 280G of the Code, then the benefits payableand will be reduced to $1 below the parachute limit.accordingly. Feinberg Retention Agreement
On February 19, 2019, the Company entered into a Retention Agreement with Hill A. Feinberg to set forth the terms of his ongoing role with Hilltop Securities. The Company appointed M. Bradley Winges to succeed Mr. Feinberg as President and Chief Executive Officer of Hilltop Securities, or HTS, effective February 20, 2019. The Retention Agreement provides that, as of February 20, 2019, Mr. Feinberg resigned as President and Chief Executive Officer of HTS and from all other positions with the Company and its subsidiaries, other than as Chairman of the Board of Directors of HTS, as a member of the Board of Directors of the Company and a member of Executive Committee of the Board of Directors of the Company. Pursuant to the Retention Agreement, Mr. Feinberg will continue to serve as the Chairman of the Board of Directors of HTS until June 30, 2019, at which time he will become Chairman Emeritus of HTS and resign from his membership on the Executive Committee of the Board of Directors of the Company.
For his services, Mr. Feinberg is entitled to receive an annual salary of $500,000 per year, plus the excess of commission payouts over his annual salary in any given calendar year. Mr. Feinberg also is entitled to receive one-time payments of $900,000 on or before March 15, 2019 and $500,000 on before March 15, 2020. Subject to the execution and delivery of a release, Mr. Feinberg would be entitled to receive these one-time payments earlier upon his termination, resignation or death. Mr. Feinberg may resign or be terminated at any time. Mr. Feinberg will no longer participate in the Annual Incentive Plan or be granted additional awards under the 2012 Equity Incentive Plan.
Salmans Employment Agreement
Pursuant to our employment agreement with Mr. Salmans, upon termination of employment by us other than for cause, Mr. Salmans is entitled to a lump-sum cash payment equal to the sum of (i) his annual base salary rate immediately prior to the effective date of such termination, and (ii) an amount equal to the annual incentive cash bonus paid to him in respect of the calendar year immediately preceding the year of the termination. If his employment is terminated without “cause” within the twelve months immediately following, or the six months immediately preceding, a “change in control,” he will be entitled to receive a lump-sum cash payment equal to two times the sum of (A) his annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the annual incentive cash bonus paid to him in respect of the calendar year immediately preceding the year of the termination. The immediately foregoing cash amount represents a “double trigger” benefit. Finally, if any payment made as a result of a change in control would constitute a “parachute payment” as defined under Section 280G of the Code, then the benefits payable will be reduced to $1 below the parachute limit. In November 2017, the term of Mr. Salmans’ employment agreement was extended until December 31, 2019.
The definitions of “cause” and “disability” under such arrangement, as well as potential payments made pursuant thereto may be found under the headings “Executive Compensation — Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table” and “Executive Compensation — Potential Payments Upon Termination or Change-in-Control” below.
Legacy Schaffner Retention Agreement
Pursuant to our retention agreement with Mr. Schaffner, the applicable executive is entitled to:
| (1)
| | $2,448,000, including interest thereon from November 30, 2012, in full satisfaction of Mr. Schaffner’s rights under Section 6 (Termination Upon Change in Control) of his previous employment agreement with PlainsCapital, dated January 1, 2009, payable in a cash lump-sum upon any termination of his employment;
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| (2)
| | upon termination of his employment by us other than for cause or death or disability, cash severance of (i) the sum of Mr. Schaffner’s annual base salary and the average of the annual bonus amounts paid to him for the three most recently completed fiscal years ending immediately prior to the date of termination, Such severance is payable in equal installments over a one-year period following the date of termination.
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The foregoing cash amounts in subparagraph (1) represent “modified single trigger” benefits, payable assuming the termination of employment for any reason, and the foregoing cash amounts in subparagraph (2) represent “double trigger” benefits, payable assuming a qualifying termination of employment. With respect to the amounts described in subparagraph (1) that are paid in full satisfaction of Section 6 of Mr. Schaffner’s previous employment agreement with PlainsCapital, such amounts are payable upon any termination of employment at any time, subject to any delay required by Section 409A of the Internal Revenue Code and the execution of a release of claims. The cash severance amounts described in subparagraph (2) are payable upon a termination of employment other than for cause, death or disability, subject to any delay required by Section 409A of the Internal Revenue Code and the execution of a release of claims.
Incentive Plans 2012 Equity Incentive Plan The 2012 Equity Incentive Plan, under which we have granted awards to the NEOs, contains specific termination and change in control provisions. We originally determined to include a change in control provision in the plan (i) to be competitive with what we believe to be the standards for the treatment of equity upon a change in control for similar companies and so that(ii) to ensure employees who remain after a change in control would be treated the same with regard to equity as the general stockholders who could sell or otherwise transfer their equity upon a change in control. Under the terms of the 2012 Equity Incentive Plan, if a change in control (as defined below in the discussion of the plan under “Executive Compensation — Potential Payments Upon Termination or Change-in-Control”) were to occur, all awards then outstanding would become vested and/or exercisable and any applicable performance goals with respect thereto would be deemed to be fully achieved. Commencing inFor equity grants after January 1, 2019, all equity award agreements contain “double trigger” provisions, which require termination without cause within the six months preceding or the twelve months following a change in control in order for the equity awards to vest in connection with a change in control. Further discussion of the change in control payments that may be made pursuant to the 2012 Equity Incentive Plan may be found in the “Executive Compensation — Potential Payments Upon Termination or Change-in-Control” section below. 2020 Equity Incentive Plan The 2020 Equity Incentive Plan was approved by the Board of Directors on April 30, 2020, and approved by our stockholders on July 23, 2020. Upon a change in control of Hilltop, awards will not vest unless the participant incurs a termination of service by us without cause or by the participant for good reason within six months prior to or twelve months following the change in control. A change in control generally includes (i) the acquisition by a third-party of 33% or more of the outstanding voting stock or equity securities of Hilltop, (ii) a merger, reorganization, consolidation, or similar transaction with a third-party after which the stockholders of Hilltop do not retain over 50% of the outstanding voting stock or equity securities following the transaction, (iii) a majority of the members of our Board of Directors are members who were not appointed by the then existing Board of Directors, or (iv) the complete liquidation or dissolution of Hilltop. In connection with a change in control, outstanding awards may be converted into new awards; exchanged or substituted for new awards; or canceled for no consideration, provided participants were given notice and an opportunity to purchase or exercise such awards, or cancelled and cashed out based on the positive difference between the per share amount to be received in connection with the transaction and the purchase/exercise price per share of the award, if any. Further discussion of the potential change in control payments that may be made pursuant to the 20122020 Equity Incentive Plan may be found in the “Executive Compensation — Potential Payments Upon Termination or Change-in-Control” section below. The Annual Incentive Plan, pursuant to which annual incentive bonuses are awarded, does not contain specific change in control provisions. Accordingly, the Committee, in its discretion, may determine what constitutes a change in control and what effects such an event may have on any awards made pursuant to such plan. Risk Considerations in Our Compensation Program
We do not believe that our compensation policies and practices for 2018 give rise to risks that are reasonably likely to have a material adverse effect on our Company. In reaching this conclusion for 2018, we considered the following factors:
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| | Base salary is fixed and the only compensation components that are variable are the annual incentives and performance-based RSUs awarded to NEOs, which were awarded based upon attainment of pre-determined levels of earnings.
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| | Annual Incentive Plan payments to the NEOs were determined or approved following the completion of the audit of the Company’s consolidated financial statements by the Company’s independent registered public accounting firm. Thus, the Committee had ample knowledge of the financial condition and results of the Company, as well as reports of other committees of the Board of Directors, upon which to base its decisions.
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| | We have a balanced program that includes multiple performance goals, rewards short-term and multi-year performance, pays in cash and equity and provides a meaningful portion of pay in stock, which is tied to our long-term performance.
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| | The Annual Incentive Plan awards are subject to clawback and adjustments for improper risk taking and significant compliance issues.
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| | Each year the Committee reviews all compensation programs to ensure existing programs are not reasonably likely to have a material adverse effect on the Company.
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Executive Compensation Process Programs and Policies Role of the Compensation Committee The Committee is responsible for reviewing and approving all aspects of the compensation programs for our NEOs and making all decisions regarding specific compensation to be paid or awarded to them. The Committee is responsible for, among its other duties, the following: | ·
● | | Review and approval of corporate incentive goals and objectives relevant to compensation; |
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● | | Evaluation of individual performance results in light of these goals and objectives; |
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● | | Evaluation of the competitiveness of the total compensation package; and |
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● | | Approval of any changes to the total compensation package, including, but not limited to, base salary, annual and long-term incentive award opportunities and payouts and retention programs. |
The Committee is responsible for determining all aspects of compensation of the Chief Executive Officer, as well as assessing his individual performance. In setting the compensation of our NEOs, the Committee, in its discretion, considers (i) the transferability of managerial skills, (ii) the relevance of each NEO’s experience to other potential employees, and (iii) the readiness of the NEO to assume a different or more significant role, either within our organization or with another organization. When the Committee makes pay-related decisions, the Committee considers our acquisition and growth strategy, our desire to attract, retain and motivate talent, and the importance of compensation in supporting the achievement of our strategic objectives. Information about the Committee and its composition, responsibilities and operations can be found under the “Board Committees” section.section above. Role of the Chief Executive Officer in Compensation Decisions The Chief Executive Officer provides input and recommendations to the Committee regarding compensation decisions for theirhis direct reports, including the other NEOs. These recommendations are made within the framework of the compensation programs approved by the Committee and based on market data provided by the Committee’s independent consultant. The input includes base salary changes, annual incentive and long-term incentive opportunities and payouts, specific individual performance objectives, and individual performance assessments. The Chief Executive Officer makes recommendations based on his assessment of the individual officer’s performance, performance of the officer’s respective business or function and employee retention considerations. The Committee reviews and considers the Chief Executive Officer’s recommendations when determining any compensation changes affecting our officers or executives. The Chief Executive Officer does not play any role with respect to his own compensation.executive officers. Role of Compensation Consultant Pursuant to its charter, the Committee is authorized to retain and terminate any consultant, as well as to approve the consultant’s fees and other terms of the engagement. The Committee also has the authority to obtain advice and assistance from internal or external legal, accounting or other advisors. In 2018,2020, the Committee continued its engagement of Meridian Compensation Partners, LLC, or Meridian, as its independent compensation consultant. Meridian is engaged directly by the Committee. Pursuant to its engagement, Meridian provides research, data analyses, survey information and design expertise in developing compensation programs for executives and incentive programs for eligible employees. In addition, Meridian keeps the Committee apprised of regulatory developments and market trends related to executive compensation practices. Meridian does not determine or recommend the exact amount or form of executive compensation for any of the NEOs. A representative of Meridian generally attends meetings of the Committee, is available to participate in executive sessions of the Committee and communicates directly with the Committee and the chairman of the Committee. Pursuant to the Committee’s charter, if the Committee elects to use a compensation consultant, the Committee must assess the consultant’s independence, taking into account the following factors: | ·
● | | The provision of other services to the Company by the consultant; |
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● | | The amount of fees the consultant received from the Company; |
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● | | The policies and procedures the consultant has in place to prevent conflicts of interest; |
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● | | Any business or personal relationships between the consulting firm and the members of the Committee; |
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● | | Any ownership of Company stock by the individuals at the firm performing consulting services for the Committee; and |
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● | | Any business or personal relationship of the firm with an executive officer of the Company. |
During 2018, the Company paid Meridian fees totaling $8,262 related to the valuation of performance-based RSUs. Meridian has provided the Committee with appropriate assurances and confirmation of its independent status pursuant to the charterthese and other factors. The Compensation Committee believesevaluated whether the work provided by Meridian raised any conflict of interest, and determined that Meridian has been independent throughout its service for the Committee and there is no conflict of interest betweenwas raised by the work of Meridian described in this Proxy Statement.
Peer Group and the Committee.Benchmarking Approach Benchmarking Compensation
The Committee regularly assesses the components of the executive compensation program with advice from its independent compensation consultant. In October 2017,2019, Meridian provided an analysis of base salary, annual incentive and long-term incentive practices of comparable companies in the financial industry. Meridian considered individual compensation elements as well as the total compensation package. This analysis was considered by the Committee when it established 20182020 pay opportunities for executives. In performing this analysis, Meridian developed market data using publicly-disclosedpublicly disclosed compensation information from a peer group of comparable financial institutions, as well as compensation surveys. Survey data reflected financial institutions of similar size to Hilltop and our operating subsidiaries. The Committee did not review the specific companies included in the survey data. The compensation peer group includes institutions of generally similar asset size and, to the extent possible, organizations with significant other operating segments.segments and non-interest income. In July 2017, the Committee determined thatevaluating the peer group, remained appropriate.the Committee considers that our combination of businesses adds complexity relative to other banks with similar asset sizes. The following financial institutionsbanks were included in the compensation peer group:group for Meridian’s market study in October 2019: | | | Cullen/Frost Bankers, Inc.Ameris Bancorp
| First Financial Bankshares, Inc.
| First MidwestFlagstar Bancorp, Inc.
| Hancock Holding Company
| IBERIABANK Corporation
| International Bancshares Corporation
| LegacyTexas Financial Group, Inc.
| MB Financial, Inc.
| Old National Bancorp
| Pinnacle Financial Partners, Inc.
| Prosperity Bancshares, Inc.
| Simmons First National Corporation
| South State Corporation | TCF FinancialBancFirst Corporation
| Hancock Whitney Corporation | Texas Capital Bancshares, Inc. | BancorpSouth Bank | Independent Bank Group, Inc. | TowneBank | Cadence Bancorporation | International Bancshares Corporation | Trustmark Corporation | Commerce Bancshares, Inc. | Prosperity Bancshares, Inc. | UMB Financial Corporation | First Financial Bancorp. | Renasant Corporation | Umpqua Holdings Corporation | UnionFirst Financial Bankshares, Inc.
| Simmons First National Corporation | WesBanco, Inc. | Wintrust Financial CorporationFirst Midwest Bancorp, Inc.
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Other Factors
With Meridian’s assistance, the Committee reviewed the peer group in July 2020 and determined to make changes to the group based upon merger and acquisition and other activity among the peers. The Committee makes executive compensation decisions following a review and discussionresulted in the removal of both the financial and operational performance of our businesses and the annual performance reviewsTexas Capital Bancshares, Inc. given its asset size exceeded two times that of the NEOsCompany. Risk Considerations in Our Compensation Program We do not believe that our compensation policies and other memberspractices for 2020 gave rise to risks that were reasonably likely to have a material adverse effect on our Company. In reaching this conclusion for 2020, we considered the following factors: | ● | Base salary is fixed and the only compensation components that are variable are the annual incentives and PRSUs awarded to NEOs, which were awarded based upon attainment of pre-determined levels of earnings. |
| ● | Annual Incentive Plan payments to the NEOs were determined or approved following the completion of the audit of the Company’s consolidated financial statements by the Company’s independent registered public accounting firm. Thus, the Committee had ample knowledge of the financial condition and results of the Company, as well as reports of other committees of the Board of Directors, upon which to base its decisions. |
| ● | We have a balanced program that includes multiple performance goals, rewards short-term and multi-year performance, pays in cash and equity and provides a meaningful portion of pay in stock, which is tied to our long-term performance. |
| ● | Annual Incentive Plan, 2012 Equity Incentive Plan and 2020 Equity Incentive Plan awards are subject to clawback and adjustments for improper risk taking and significant compliance issues. |
| ● | Each year the Committee reviews all compensation programs to ensure existing programs are not reasonably likely to have a material adverse effect on the Company. |
Executive Compensation Programs and Policies Stock Ownership RequirementsGuidelines In February 2014, the Committee recommended, and the Board of Directors adopted, a stock ownership policy applicable to our executive officers and directors. Within five years of the later of appointment or the date the policy was adopted, executive officers are required to achieve and maintain ownership of a defined market value of Company common stock equal to a minimum number of equity or equity-based securities as follows: | ·
● | | Six times annual base salary for the Chief Executive Officer; and |
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● | | Three times annual base salary for the other executive officers. |
Under this policy, directors are expected to own shares with a value greater than five times their annual retainer for serving on the Board of Directors of the Company, unless they are subject to certain restrictions on receiving director fees.fees, or fees in the form of stock. Our director compensation program permits directors to elect to receive their director compensation in cash, Company common stock or a combination of cash and Company common stock. In calculating equity ownership for purposes of this requirement,the stock ownership guidelines, we include all shares beneficially owned by an individual, such as shares owned by an individual in the Company’s benefit plans (e.g., 401(k)) and Employee Stock Purchase Plan), shares of restricted stock and shares with respect to which an individual has voting or investment power. Shares underlying unexercisedUnexercised stock options and unearned performance shares are excluded when determining ownership for these purposes. Executive officers are expected to hold 50% of any net shares received through compensatory equity-based grants until the ownership guidelines are achieved. Once such officer achieves the ownership requirement, he or she is no longer restricted by this holding requirement, provided his or her total stock ownership level does not fall below the ownership guidelines. In addition, all awards of RSUs granted since February 2014 to NEOs are, subject to certain exceptions, required to be held for one year after vesting. As of April 29, 2019,28, 2021, all NEOs are on track to meet the ownership guidelines. Clawback Policy Our compensation program also includes a clawback from any annual cash or long-term incentive award for improper risk taking and significant compliance issues. Annual Incentive Plan, 2012 Equity Incentive Plan and 2020 Equity Incentive Plan awards are subject to any clawback, recoupment or forfeiture provisions (i) required by law or regulation and applicable to Hilltop or its subsidiaries or (ii) set forth in any policies adopted or maintained by Hilltop or any of its subsidiaries. Tax Considerations
Section 162(m) of the Code imposes a $1.0 million limit on the tax-deductibility of compensation paid to certain named executive officers. Prior to the Tax Cuts and Jobs Act of 2017, or the Tax Legislation, exceptions were provided for compensation that is “performance-based” and paid pursuant to a plan meeting certain requirements of Section 162(m) of the Code. The Committee has historically considered the implications of Section 162(m) of the Code in the design of its executive compensation programs. The
Committee, however, reserved the flexibility, where appropriate, to approve compensation arrangements that may not have been tax deductible to the Company, such as base salary and awards of time-based RSUs.
The performance-based exception from 162(m) deductibility limits have been repealed, effective for taxable years beginning after December 31, 2017. The Tax Legislation included certain transition relief for historical arrangements; however, it is currently uncertain how the transition relief will be interpreted and applied. The Committee continues to reserve flexibility to provide compensation arrangements that it believes are consistent with its compensation philosophy even if the arrangements will result in non-deductible compensation.
Trading Controls and Hedging, Short Sale and Pledging Policies Executive officers, including the NEOs, are required to receive the permission of the General Counsel prior to entering into any transactions in our securities, including gifts, grants and those involving derivatives. Generally, trading is permitted only during announced trading periods. Employees who are subject to trading restrictions, including the NEOs, may enter into a trading plan under Rule 10b5-1 under the Exchange Act. These trading plans may be entered into only during an open trading period and must be approved by the General Counsel. We require trading plans to include a waiting period and the trading plans may not be amended during their term. The NEO bears full responsibility if he or she violates our policy by permitting shares to be bought or sold without pre-approval or when trading is restricted. Executive officers are prohibited from entering into hedging, short sale and derivative transactions and are subject torestrictions on pledging our securities.securities. All employees are prohibited from hedging or pledging unvested RSUs.
Tax Considerations Section 162(m) of the Code imposes a $1.0 million limit on the tax-deductibility of compensation paid to certain named executive officers. Prior to the Tax Cuts and Jobs Act of 2017, or the Tax Legislation, exceptions were provided for compensation that is “performance-based” and paid pursuant to a plan meeting certain requirements of Section 162(m) of the Code. The Committee has historically considered the implications of Section 162(m) of the Code in the design of its executive compensation programs. The Committee, however, reserved the flexibility, where appropriate, to approve compensation arrangements that may not have been tax deductible to the Company, such as base salary and awards of TRSUs. The performance-based exception from 162(m) deductibility limits have been repealed, effective for taxable years beginning after December 31, 2017. The Tax Legislation included certain transition relief for historical arrangements that were in place as of November 2, 2017, so long as such arrangements were not materially modified after that date. To the extent that compensation is payable pursuant to such a historical arrangement, if the Company determines that Section 162(m) of the Code will apply to any such awards, the Company generally intends that the terms of those awards will not be materially modified and will be constructed so as to constitute qualified performance-based compensation and, as such, will be exempt from the $1,000,000 limitation on deductible compensation. The Committee continues to reserve flexibility to provide compensation arrangements that it believes are consistent with its compensation philosophy even if the arrangements will result in non-deductible compensation. Compensation Committee Report The Compensation Committee of the Board of Directors of Hilltop Holdings Inc. has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on its review, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Proxy Statement. The foregoing report has been submitted by the following members of the Compensation Committee: | | | | | A. Haag Sherman (Chairman)
| | Rhodes Bobbitt
| | W. Joris Brinkerhoff
| William T. Hill, Jr.
| Andrew Littlefair
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A. Haag Sherman (Chairman)Rhodes Bobbitt William T. Hill, Jr.Andrew Littlefair
Executive Compensation The following tables set forth information concerning the compensation earned for services performed during 2018, 20172020, 2019 and 20162018 by the NEOs, who were either serving in such capacities on December 31, 2018,2020, during 2018,2020, or are reportable pursuant to applicable SEC regulations. Summary Compensation Table Fiscal Years 2018, 20172020, 2019 and 20162018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change in Pension | | | | | | | | | | | | | | | | | | Non-Equity | | Value and | | | | | | | | | | | | | | Stock | | Option | | Incentive Plan | | Nonqualified Deferred | | All Other | | | | | | | | Salary | | Bonus (a) | | Awards (b) | | Awards | | Compensation (c) | | Compensation | | Compensation (e) | | | | Name and principal position | | Year | | ($) | | ($) | | ($) | | ($) | | ($) | | Earnings (d) ($) | | ($) | | Total ($) | | Jeremy B. Ford | | 2018 | | 729,327 | | — | | 1,576,229 | | — | | 625,000 | | — | | 91,923 | | 3,022,479 | | President and | | 2017 | | 718,500 | | — | | 1,582,502 | | — | | 790,000 | | — | | 70,310 | | 3,161,312 | | Chief Executive Officer | | 2016 | | 700,000 | | — | | 699,996 | | — | | 715,000 | | — | | 60,534 | | 2,175,530 | | | | | | | | | | | | | | | | | | | | | | Alan B. White | | 2018 | | 1,409,615 | | 1,450,000 | | 699,444 | | — | | — | | 77,795 | | 173,225 | | 3,810,079 | | Former Vice Chairman and | | 2017 | | 1,387,500 | | 1,450,000 | | 702,209 | | — | | — | | 44,519 | | 170,383 | | 3,754,611 | | Co-Chief Executive Officer (f) | | 2016 | | 1,350,000 | | 1,400,000 | | 699,996 | | — | | — | | 29,392 | | 126,848 | | 3,606,236 | | | | | | | | | | | | | | | | | | | | | | William B. Furr | | 2018 | | 435,096 | | — | | 384,679 | | — | | 390,000 | | — | | 11,230 | | 1,221,005 | | Executive Vice President and | | 2017 | | 425,000 | | — | | 351,119 | | — | | 425,000 | | — | | 117,270 | | 1,318,389 | | Chief Financial Officer (g) | | 2016 | | 143,438 | | 518,000 | (h) | 939,528 | | — | | — | | — | | 31,562 | | 1,632,528 | | | | | | | | | | | | | | | | | | | | | | Hill A. Feinberg | | 2018 | | 490,385 | | — | | 399,689 | | — | | 900,000 | | — | | 11,582 | | 1,801,656 | | Chairman and Former Chief Executive | | 2017 | | 500,000 | | — | | 351,119 | | — | | 900,000 | | — | | 25,176 | | 1,776,295 | | Officer of Hilltop Securities | | 2016 | | 500,000 | | — | | 299,994 | | — | | 750,000 | | — | | 18,177 | | 1,568,171 | | | | | | | | | | | | | | | | | | | | | | Jerry L. Schaffner | | 2018 | | 551,442 | | — | | 329,725 | | — | | 530,000 | | 27,069 | | 55,462 | | 1,493,698 | | President and Chief Executive | | 2017 | | 525,000 | | — | | 280,878 | | — | | 500,000 | | 16,431 | | 54,381 | | 1,376,690 | | Officer of the Bank | | 2016 | | 525,000 | | — | | 280,002 | | — | | 450,000 | | 11,203 | | 51,227 | | 1,317,432 | | | | | | | | | | | | | | | | | | | | | | Todd L. Salmans | | 2018 | | 735,577 | | — | | 349,722 | | — | | 500,000 | | — | | 47,318 | | 1,632,617 | | Chief Executive Officer of | | 2017 | | 750,000 | | — | | 351,119 | | — | | 825,000 | | — | | 43,095 | | 1,969,214 | | PrimeLending | | 2016 | | 750,000 | | — | | 349,998 | | — | | 1,100,000 | | — | | 55,122 | | 2,255,120 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change in | | | | | | | | | | | | | | | | | | | | Pension Value | | | | | | | | | | | | | | | | | | | | and Nonqualified | | | | | | | | | | | | | | | | | | Non-Equity | | Deferred | | | | | | | | | | | | | | Stock | | Option | | Incentive Plan | | Compensation | | All Other | | | | | | | | Salary | | Bonus | | Awards | | Awards | | Compensation | | Earnings | | Compensation | | | | Name and principal position | | Year | | ($) | | (a) ($) | | (b) ($) | | ($) | | (c) ($) | | (d) ($) | | (e) ($) | | Total ($) | | Jeremy B. Ford | | 2020 | | 768,269 | | — | | 2,911,894 | (f) | — | | 1,433,750 | | — | | 112,314 | | 5,226,227 | | President and | | 2019 | | 750,000 | | — | | 1,718,833 | | — | | 1,125,000 | | — | | 91,172 | | 3,685,005 | | Chief Executive Officer | | 2018 | | 729,327 | | — | | 1,576,229 | | — | | 625,000 | | — | | 91,923 | | 3,022,479 | | | | | | | | | | | | | | | | | | | | | | William B. Furr | | 2020 | | 495,962 | | 500,000 | | 485,319 | | — | | 832,500 | | — | | 10,530 | | 2,324,311 | | Executive Vice President and | | 2019 | | 475,577 | | — | | 757,212 | | — | | 652,500 | | — | | 10,580 | | 1,895,869 | | Chief Financial Officer | | 2018 | | 435,096 | | — | | 384,679 | | — | | 390,000 | | — | | 11,230 | | 1,221,005 | | | | | | | | | | | | | | | | | | | | | | Jerry L. Schaffner | | 2020 | | 643,269 | | 140,000 | | 412,524 | | — | | 789,750 | | 14,367 | | 58,556 | | 2,058,466 | | President and Chief Executive | | 2019 | | 611,539 | | — | | 392,866 | | — | | 670,000 | | 44,021 | | 56,537 | | 1,774,963 | | Officer of the Bank | | 2018 | | 551,442 | | — | | 329,725 | | — | | 530,000 | | 27,069 | | 55,462 | | 1,493,698 | | | | | | | | | | | | | | | | | | | | | | Stephen Thompson | | 2020 | | 722,115 | | 2,225,000 | | 416,204 | (h) | — | | 1,341,250 | | — | | 47,068 | | 4,751,637 | | President and Chief Executive | | 2019 | | 650,000 | | — | | 96,850 | | — | | 325,000 | | — | | 49,977 | | 1,121,827 | | Officer of PrimeLending (g) | | 2018 | | 637,500 | | — | | 75,015 | | — | | 525,000 | | — | | 39,703 | | 1,277,219 | | | | | | | | | | | | | | | | | | | | | | M. Bradley Winges | | 2020 | | 500,000 | | 630,000 | | 582,388 | | — | | 2,061,339 | | — | | 11,544 | | 3,785,271 | | President and Chief Executive | | 2019 | | 419,231 | | 2,500,000 | (j) | 1,801,906 | (k) | — | | 500,000 | | — | | 577,219 | | 5,798,356 | | Officer of Hilltop Securities (i) | | 2018 | | — | | — | | — | | — | | — | | — | | — | | — | |
| (a) | (a)
| | Represents discretionary bonuses paid for services during 2018, 20172020, 2019 and 2016,2018, as applicable. |
| (b) | (b)
| | Reflects the grant date fair value calculated in accordance with the provisions of the Stock Compensation Topic of the ASC, in accordance with the assumptions described in Note 2023 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.2020. The value of performance-based stock awards is based on the probable outcome of the applicable performance conditions. The following table presents the value of performance-based awards included in the table above based on the achievement of both probable and maximum outcomes: |
| | | | | | | | | | | Performance-Based Stock Awards | Name | | Year | | (Probable Achievement) ($) | | (Maximum Achievement) ($) | Jeremy B. Ford | | 2020 | | 1,411,878 | | 2,117,817 | | | 2019 | | 843,832 | | 1,265,747 | | | 2018 | | 787,479 | | 1,181,219 | | | | | | | | William B. Furr | | 2020 | | 235,317 | | 352,975 | | | 2019 | | 212,167 | | 318,251 | | | 2018 | | 192,172 | | 288,258 | | | | | | | | Jerry L. Schaffner | | 2020 | | 200,010 | | 300,014 | | | 2019 | | 192,871 | | 289,307 | | | 2018 | | 164,730 | | 247,094 | | | | | | | | Stephen Thompson | | 2020 | | 141,186 | | 211,779 | | | 2019 | | — | | — | | | 2018 | | — | | — | | | | | | | | M. Bradley Winges | | 2020 | | 282,371 | | 423,557 | | | 2019 | | — | | — | | | 2018 | | — | | — |
| | | | | | | | | | | Performance-Based Stock Awards | Name | | Year | | (Probable Achievement) ($) | | (Maximum Achievement) ($) | Jeremy B. Ford | | 2018 | | 787,479 | | 1,181,219 | | | 2017 | | 793,747 | | 1,190,621 | | | 2016 | | 349,998 | | 524,997 | | | | | | | | Alan B. White | | 2018 | | 349,440 | | 524,160 | | | 2017 | | 352,198 | | 528,297 | | | 2016 | | 349,998 | | 524,997 | | | | | | | | William B. Furr | | 2018 | | 192,172 | | 288,258 | | | 2017 | | 176,099 | | 264,148 | | | 2016 | | — | | — | | | | | | | | Hill A. Feinberg | | 2018 | | 199,683 | | 299,525 | | | 2017 | | 176,099 | | 264,148 | | | 2016 | | 149,997 | | 224,995 | | | | | | | | Jerry L. Schaffner | | 2018 | | 164,730 | | 247,094 | | | 2017 | | 140,868 | | 211,301 | | | 2016 | | 139,993 | | 209,989 | | | | | | | | Todd L. Salmans | | 2018 | | 174,720 | | 262,080 | | | 2017 | | 176,099 | | 264,148 | | | 2016 | | 174,991 | | 262,487 |
| (c) | (c)
| | For 2020, represents cash awards earned under the Annual Incentive Plan for services during 2020, but paid in March 2021. For 2019, represents cash awards earned under the Annual Incentive Plan for services during 2019, but paid in March 2020. For 2018, represents cash awards earned under the Annual Incentive Plan for services during 2018, but paid in March 2019. For 2017, represents cash awards earned under the Annual Incentive Plan for services during 2017, but paid in March 2018. For 2016, represents cash awards earned under the Annual Incentive Plan for services during 2016, but paid in March 2017. |
| (d) | (d)
| | Represents interest earned on non-qualified deferred compensation contributions to Mr. WhiteSchaffner during 2018, 20172020, 2019 and 2016,2018, as applicable. For additional information, see “— Non-Qualified Deferred Compensation.” |
| (e) | (e)
| | Includes amounts paid during 2018, 20172020, 2019 and 2016,2018, as applicable, for group life insurance premiums, auto allowance, gym and club expenses, use of a company car and aircraft, moving expenses and cellular phone reimbursement. The table following these footnotes sets forth a breakdown of all other compensation included |
| (f) | Includes 41,667 time-based RSUs granted to Mr. Jeremy B. Ford in the “Summary Compensation Table” for the NEOs. |
| (f)
| | Mr. White retired effective April 1, 2019, from all positionsconnection with the Company, including as a membersale of the Board of Directors.
National Lloyds Corporation. |
| (g) | (g)
| | Mr. FurrThompson began serving as our Executive Vice President and Chief FinancialExecutive Officer of PrimeLending effective SeptemberJanuary 1, 2016. 2020. |
| (h) | Includes 5,014 time-based RSUs granted to Mr. Thompson in connection with his promotion to CEO of PrimeLending. |
| (h)
| | Includes sign-on bonus of $143,000.
|
| | | | | | | | | | | | | | All Other Compensation | | | | | | | | Gross-Ups or | | | | | | | | | | | | | | Other | | | | | | | | | | | | | | Amounts | | Company | | | | | | | | | | | | Reimbursed | | Contributions | | | | | | | | | | Perquisites | | for the | | to Defined | | | | | | | | | | and Personal | | Payment of | | Contribution | | Insurance | | Total All Other | | Name | | Year | | Benefits (a) ($) | | Taxes ($) | | Plans ($) | | Policies (b) ($) | | Compensation ($) | | Jeremy B. Ford | | 2018 | | 81,893 | | — | | 9,250 | | 780 | | 91,923 | | | | 2017 | | 60,164 | | 366 | | 9,000 | | 780 | | 70,310 | | | | 2016 | | 50,754 | | — | | 9,000 | | 780 | | 60,534 | | | | | | | | | | | | | | | | Alan B. White | | 2018 | | 98,163 | | — | | 9,250 | | 65,812 | | 173,225 | | | | 2017 | | 95,699 | | 80 | | 9,000 | | 65,604 | | 170,383 | | | | 2016 | | 105,275 | | — | | 9,000 | | 12,573 | | 126,848 | | | | | | | | | | | | | | | | William B. Furr | | 2018 | | 1,200 | | — | | 9,250 | | 780 | | 11,230 | | | | 2017 | | 71,659 | | 36,161 | | 9,000 | | 450 | | 117,270 | | | | 2016 | | 19,572 | | 9,730 | | 2,125 | | 135 | | 31,562 | | | | | | | | | | | | | | | | Hill A. Feinberg | | 2018 | | — | | — | | 4,167 | | 7,415 | | 11,582 | | | | 2017 | | — | | 108 | | 9,000 | | 16,068 | | 25,176 | | | | 2016 | | — | | — | | 8,271 | | 9,906 | | 18,177 | | | | | | | | | | | | | | | | Jerry L. Schaffner | | 2018 | | 40,130 | | — | | 9,250 | | 6,082 | | 55,462 | | | | 2017 | | 39,090 | | 237 | | 9,000 | | 6,054 | | 54,381 | | | | 2016 | | 37,987 | | — | | 9,000 | | 4,240 | | 51,227 | | | | | | | | | | | | | | | | Todd L. Salmans | | 2018 | | 22,000 | | — | | 9,250 | | 16,068 | | 47,318 | | | | 2017 | | 22,000 | | 2,189 | | 9,000 | | 9,906 | | 43,095 | | | | 2016 | | 32,000 | | 4,216 | | 9,000 | | 9,906 | | 55,122 | |
| (i) | (a)
Mr. Winges began serving as President and Chief Executive Officer of Hilltop Securities effective February 20, 2019. |
| (j) | Includes sign-on bonus of $1.5 million and guaranteed annual cash incentive award for 2019 under his employment contract of $1.0 million. |
| (k) | Includes sign-on grants of equity of 10,363 time-based RSUs and 83,000 time-based RSUs to offset compensation forfeited by Mr. Winges for terminating his employment with his former employer. |
| | | | | | | | | | | | | | All Other Compensation | | | | | | | | Gross-Ups or | | Company | | | | | | | | | | | | Other Amounts | | Contributions | | | | | | | | | | Perquisites | | Reimbursed | | to Defined | | | | | | | | | | and Personal | | for the Payment | | Contribution | | Insurance | | Total All Other | | | | | | Benefits | | of Taxes | | Plans | | Policies | | Compensation | | Name | | Year | | (a) ($) | | ($) | | ($) | | (b) ($) | | ($) | | Jeremy B. Ford | | 2020 | | 101,394 | | — | | 9,750 | | 1,170 | | 112,314 | | | | 2019 | | 80,502 | | — | | 9,500 | | 1,170 | | 91,172 | | | | 2018 | | 81,893 | | — | | 9,250 | | 780 | | 91,923 | | | | | | | | | | | | | | | | William B. Furr | | 2020 | | — | | — | | 9,750 | | 780 | | 10,530 | | | | 2019 | | 300 | | — | | 9,500 | | 780 | | 10,580 | | | | 2018 | | 1,200 | | — | | 9,250 | | 780 | | 11,230 | | | | | | | | | | | | | | | | Jerry L. Schaffner | | 2020 | | 42,642 | | — | | 9,750 | | 6,164 | | 58,556 | | | | 2019 | | 40,941 | | — | | 9,500 | | 6,096 | | 56,537 | | | | 2018 | | 40,130 | | — | | 9,250 | | 6,082 | | 55,462 | | | | | | | | | | | | | | | | Stephen Thompson | | 2020 | | 33,964 | | — | | 9,750 | | 3,354 | | 47,068 | | | | 2019 | | 37,123 | | — | | 9,500 | | 3,354 | | 49,977 | | | | 2018 | | 27,099 | | — | | 9,250 | | 3,354 | | 39,703 | | | | | | | | | | | | | | | | M. Bradley Winges | | 2020 | | — | | — | | 9,750 | | 1,794 | | 11,544 | | | | 2019 | | 343,694 | | 222,990 | | 9,500 | | 1,035 | | 577,219 | | | | 2018 | | — | | — | | — | | — | | — | |
| (a) | Year 2018:2020: For Mr. Jeremy B. Ford, reflects $300 gym membership allowance and personal use of company airplane of $81,593.$100,988 and gym membership allowance of $406. For Mr. White,Schaffner, reflects a car allowance of $36,000,$24,000, club expenses of $23,818, personal use of company airplane of $37,057 and$12,525, personal use of company automobile of $1,288. For Mr. Furr, reflects a$4,917 and cellular phone reimbursement of $1,200. For Mr. Schaffner,Thompson, reflects car allowance of $24,000, club expenses of $11,706, cellular phone reimbursement of $1,200, and personal use of company automobile of $3,224. For Mr. Salmans, includes a car allowance of $12,000, and club expenses of $10,000.$20,764 and cellular phone reimbursement of $1,200. Personal use of company aircraft is calculated on a per mile basis utilizing SIFL rates published by the IRS. |
| (b) | (b)
| | Reflects group term life insurance premiums paid during 2017 and 2016, for Messrs. Ford, Furr, FeinbergThompson and Salmans,Winges, as applicable. Year 2020: For Mr. Schaffner, represents bank-owned life insurance of $934$1,016 and group term life insurance of $5,148. For Mr. White, represents bank-owned life insurance of $3,106, group term life insurance of $9,906 and key man life insurance of $52,800. Group term life insurance was not included in “All Other Compensation” during 2018 as this is a benefit that ismade available to all employees of the Company. employees. |
Grants of Plan-Based Awards Grants of Plan-Based Awards Table Fiscal Year 20182020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other | | | | | | | | | | | | | | | | | | | | | Stock Awards: | | Grant Date | | | | | | | Estimated Future Payouts Under Non-Equity | | Estimated Future Payouts Under Equity | | Number of | | Fair Value of | | | | | | | Incentive Plan Awards (a) | | Incentive Plan Awards (b) | | Shares of | | Share and | | | | | | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | Stock or Units | | Option Awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other | | | | | | | | | | | | | | | | | | | | | Stock Awards: | | Grant Date | | | | | | | Estimated Future Payouts Under Non-Equity | | Estimated Future Payouts Under Equity | | Number of | | Fair Value of | | | | | | | Incentive Plan Awards (a) | | Incentive Plan Awards (b) | | Shares of | | Share and | | | | | | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | Stock or Units | | Option Awards | | Name | | Grant Date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (c) (#) | | (d) ($) | | | Grant Date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (c) (#) | | (d) ($) | | Jeremy B. Ford | | 3/5/2018 | | | | | | | | | | | | | | 31,766 | | 788,750 | | | 2/20/2020 | | | | | | | | | | | | | | 67,782 | | 1,500,016 | | | | 3/5/2018 | | | | | | | | 15,883 | | 31,766 | | 47,649 | | | | 787,479 | | | | | 3/5/2018 | | 135,000 | | 750,000 | | 1,125,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Alan B. White | | 3/5/2018 | | | | | | | | | | | | | | 14,096 | | 350,004 | | | | | 3/5/2018 | | | | | | | | 14,096 | | 14,096 | | 14,096 | | | | 349,440 | | | | | 3/5/2018 | | — | | 1,450,000 | (e) | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2/20/2020 | | | | | | | | 33,891 | | 67,781 | | 101,672 | | | | 1,411,878 | | | | | 2/20/2020 | | 387,500 | | 775,000 | | 1,433,750 | | | | | | | | | | | | | | | 8/10/2020 | | | | | | | | | | | | | | 41,667 | | 868,757 | | | | | | | | | | | | | | | | | | | | | | | William B. Furr | | 3/5/2018 | | | | | | | | | | | | | | 7,753 | | 192,507 | | | 2/20/2020 | | | | | | | | | | | | | | 11,297 | | 250,003 | | | | 3/5/2018 | | | | | | | | 3,876 | | 7,752 | | 11,628 | | | | 192,172 | | | | | 3/5/2018 | | 72,000 | | 400,000 | | 600,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Hill A. Feinberg | | 3/5/2018 | | | | | | | | | | | | | | 8,055 | | 200,006 | | | | | 3/5/2018 | | | | | | | | 4,028 | | 8,055 | | 12,083 | | | | 199,683 | | | | | 3/5/2018 | | 108,000 | | 900,000 | | 1,350,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2/20/2020 | | | | | | | | 5,649 | | 11,297 | | 16,946 | | | | 235,317 | | | | | 2/20/2020 | | 225,000 | | 450,000 | | 832,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jerry L. Schaffner | | 3/5/2018 | | | | | | | | | | | | | | 6,645 | | 164,995 | | | 2/20/2020 | | | | | | | | | | | | | | 9,603 | | 212,514 | | | | 3/5/2018 | | | | | | | | 3,323 | | 6,645 | | 9,968 | | | | 164,730 | | | | | 3/5/2018 | | 60,000 | | 500,000 | | 750,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Todd L. Salmans | | 3/5/2018 | | | | | | | | | | | | | | 7,048 | | 175,002 | | | | | 3/5/2018 | | | | | | | | 3,524 | | 7,048 | | 10,572 | | | | 174,720 | | | | | 3/5/2018 | | 90,000 | | 750,000 | | 1,125,000 | | | | | | | | | | | | | | | | 2/20/2020 | | | | | | | | 4,801 | | 9,602 | | 14,403 | | | | 200,010 | | | | | 2/20/2020 | | 292,500 | | 585,000 | | 1,082,250 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stephen Thompson | | | 1/1/2020 | | | | | | | | | | | | | | 5,014 | | 124,999 | | | | | 2/20/2020 | | | | | | | | | | | | | | 6,779 | | 150,019 | | | | | 2/20/2020 | | | | | | | | 3,389 | | 6,778 | | 10,167 | | | | 141,186 | | | | | 2/20/2020 | | 362,500 | | 725,000 | | 1,341,250 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | M. Bradley Winges | | | 2/20/2020 | | | | | | | | | | | | | | 13,557 | | 300,016 | | | | | 2/20/2020 | | | | | | | | 6,778 | | 13,556 | | 20,334 | | | | 282,371 | | | | | 2/20/2020 | | 625,000 | | 1,250,000 | | 2,312,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | (a)
| | Represent the value of potential payments under the Annual Incentive Plan to the NEOs based on 20182020 performance. Management incentive award amounts shown above represent potential awards that may have been earned based on performance during 2018.2020. The actual amounts earned pursuant to Annual Incentive Plan awards for 20182020 are reported in the “Summary Compensation Table” above. For more information regarding the Annual Incentive Plan, see below and also refer to “Compensation Discussion and Analysis” in this Proxy Statement. |
| (b) | (b)
| | Represents performance-based RSUs that vest based upon the achievement of certain performance goals during the three-year period beginning January 1, 20182020 and ending December 31, 2020.2022. These RSUs were issued pursuant to the 2012 Equity Incentive Plan and the 2020 Equity Incentive Plan and a form of award agreement and are subject to forfeiture, accelerated vesting and other restrictions as more fully set forth in the 2012 Equity Incentive Plan and the 2020 Equity Incentive Plan and the form of award agreement. For additional information, see “Compensation Discussion and Analysis — Elements of our Executive Compensation Program — Long-Term Incentive Awards.” |
| (c) | (c)
| | Represents time-based RSUs that cliff vest upon the earlier of the third anniversary of the date of grant and a change of control.grant. These RSUs were issued pursuant to the 2012 Equity Incentive Plan and the 2020 Equity Incentive Plan and a form of award agreement and are subject to forfeiture, accelerated vesting and other restrictions as more fully set forth in the 2012 Equity Incentive Plan and the 2020 Equity Incentive Plan and the form of award agreement. For additional information, see “Compensation Discussion and Analysis — Elements of our Executive Compensation Program — Long-Term Incentive Awards.Incentives.” |
| (d) | (d)
| | Reflects the grant date fair value calculated in accordance with the provisions of the Stock Compensation Topic of the ASC. The value of the performance-based stock awards is based on the probable outcome of the applicable performance conditions. For more information regarding outstanding awards held by the NEO, refer to section “Outstanding Equity Awards at Fiscal Year-End” below. |
| (e)
| | Represents the amount Mr. White would be entitled to under his retention agreement.
|
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table Employment Contracts and Incentive Plans Set forth below is a summary of our retention agreement with Mr. White and our employment agreements with Messrs. Furr, Schaffner, FurrThompson and Salmans.Winges. We do not have an employment agreementsagreement with Messrs.Mr. Jeremy B. Ford or Feinberg.Ford. Also set forth below is a description of our incentive plans, pursuant to which the awards included in the “Outstanding Equity Awards at Fiscal Year-End Table” below were made to our NEOs. The Compensation Committee believes that the arrangements described below serve our interests and the interests of our stockholders because they help secure the continued employment and dedication of our NEOs prior to or following a change in control, without concern for their own continued employment.
Employment Contracts Mr. White
On November 30, 2012, in connection with our acquisition of PlainsCapital, we entered into a retention agreement with Mr. White. We amended the retention agreement on September 12, 2016 solely for the purpose of recognizing his promotion to Co-Chief Executive Officer of Hilltop, including a corresponding change to compensate him based upon the consolidated results of Hilltop, as opposed to PlainsCapital. The term of the retention agreement was for three years, with automatic one-year renewals at the end of the second year of the agreement and each anniversary thereof unless notice had been given otherwise. Pursuant to the agreement, Mr. White’s annual base salary was at least $1,350,000. He was also entitled to an annual bonus that varied based upon the performance of the Company. If Hilltop’s annual net income was less than or equal to $70,000,000 but greater than $15,000,000, Mr. White was entitled to a bonus equal to the average of his annual bonus in the prior three calendar years. If Hilltop’s annual net income exceeded $70,000,000, he was entitled to a bonus equal to 100% of his annual base salary. Additionally, in accordance with the agreement, Mr. White was entitled to participate in all of the Company’s employee benefit plans and programs. Further, the agreement provided that the Company would provide Mr. White with the use of a corporate aircraft and an automobile allowance, each at the same level that such benefits were available to Mr. White immediately prior to our acquisition of PlainsCapital. He continued to have bank-owned life insurance and access to the country club that was available to him through PlainsCapital’s membership prior to our acquisition of PlainsCapital. The agreement also included, among other things, customary non-competition, non-solicitation and confidentiality provisions. Mr. White’s non-competition and non-solicitation obligations would terminate thirty-six (36) months after his termination. On February 21, 2019, we entered into a Separation and Release Agreement with Mr. White in connection with his retirement effective April 1, 2019. For a description of the Separation and Release Agreement and the compensation and benefits to which Mr. White would have been entitled in the event of his termination or a change in control under his retention agreement, see “Potential Payments Upon Termination or Change-in-Control” below.
Mr. Furr In connection with the appointment of Mr. Furr as Chief Financial Officer of the Company, the Company and Mr. Furr entered into an employment agreement effective as of September 1, 2016. The employment agreement remainsremained in effect until the third anniversary of the effective date. In August 2019, the employment agreement was amended to extend its term until August 31, 2022. Pursuant to this amended agreement, Mr. Furr is entitled to ana minimum annual base salary of $425,000$485,000 and is eligible to participate in (1) an annual incentive bonus program adopted by the Compensation Committee of the Board of Directors of the Company, or whomever is delegated such authority by the Board of Directors, and (2) any long-term incentive award programs adopted by the Compensation Committee, or whomever is delegated such authority by the Board of Directors. With respect to calendar year 2016, the Employment Agreement provides that Mr. Furr was entitled to receive a minimum bonus of $325,000 under the Annual Incentive Plan and a long-term incentive plan award having a value of at least $300,000. Mr. Furr also is entitled to reimbursement of employment-related expenses and to participate in the employee benefit programs generally available to employees of the Company. Additionally, the employment agreement provides that Mr. Furr was entitled to receive a grant of RSUs having an aggregate fair market value of $200,000 on the date of grant. In addition, the employment agreement provides that Mr. Furr was entitled to receive a cash sign-on bonus of $143,000 and a grant of RSUs having a value of $739,519, in each case, which was based upon the value of KeyCorp stock. The employment agreement provides that Mr. Furr was entitled to be reimbursed for airfare and up to approximately $148,200 of out-of-pocket costs related to Mr. Furr’s relocation to Dallas, Texas. The agreement also includes, among other things, customary non-competition, non-solicitation and confidentiality provisions. Mr. Furr’s non-competition and non-solicitation obligations continue for twelve (12)24 months following the earlier of (i) his termination and (ii) the termination of his employment agreement. In consideration for the addition of the 24-month customer non-solicitation provision and the increased time period of the employee non-solicitation provision from twelve to 24 months, as well as other additional provisions, the employment agreement provided that Mr. Furr was entitled to receive a grant of RSUs having an aggregate fair market value of $325,000 on the date of grant. For a description of compensation and benefits to which Mr. Furr is entitled in the event of his termination or a change in control, see “Potential Payments Upon Termination or Change-in-Control” below. Mr. Feinberg
On February 19, 2019, the Company entered into a Retention Agreement with Hill A. Feinberg to set forth the terms of his ongoing role with Hilltop Securities. The Company appointed M. Bradley Winges to succeed Mr. Feinberg as President and Chief Executive Officer of HTS effective February 20, 2019. The Retention Agreement provides that, as of February 20, 2019, Mr. Feinberg resigned as President and Chief Executive Officer of HTS and from all other positions with the Company and its subsidiaries, other than as Chairman of the Board of Directors of HTS, as a member of the Board of Directors of the Company and a member of Executive Committee of the Board of Directors of the Company. Pursuant to the Retention Agreement, Mr. Feinberg will continue to serve as the Chairman of the Board of Directors of HTS until June 30, 2019, at which time he will become Chairman Emeritus of HTS and resign from his membership on the Executive Committee of the Board of Directors of the Company.
For his services, Mr. Feinberg is entitled to receive an annual salary of $500,000 per year, plus the excess of commission payouts over his annual salary in any given calendar year. Mr. Feinberg also is entitled to receive one-time payments of $900,000 on or before March 15, 2019 and $500,000 on before March 15, 2020. Subject to the execution and delivery of a release, Mr. Feinberg would be entitled to receive these one-time payments earlier upon his termination, resignation or death. Mr. Feinberg may resign or be terminated at any time.
Mr. Schaffner On November 30, 2012, in connection with our acquisition of PlainsCapital, wethe Company entered into a retention agreement with Mr. Schaffner. The retention agreement provides for an initial term of two years, with automatic one-year renewals at the end of the first year of the agreement and each anniversary thereof unless notice has been given otherwise. Pursuant to the agreement, Mr. Schaffner’s minimum annual base salary is $525,000. He is also entitled to an annual bonus that varies based upon the performance of PlainsCapital. If PlainsCapital’s annual net income is greater than $15,000,000, Mr. Schaffner is entitled to a bonus equal to the average of his annual bonus in the prior three calendar years. Additionally, in accordance with the agreement, Mr. Schaffner is entitled to participate in all of the Company’s employee benefit plans and programs. Further, the agreement provides that the Company will provide Mr. Schaffner with the use of corporate aircraft and an automobile allowance, each at the same level that such benefits were available to Mr. Schaffner immediately prior to our acquisition of PlainsCapital. He continues to have bank-owned life insurance and access to the country club that was available to him through PlainsCapital’s membership prior to our acquisition of PlainsCapital. For a description of compensation and benefits to which Mr. Schaffner is entitled in the event of his termination or a change in control, see “Potential Payments Upon Termination or Change-in-Control” below. Mr. SalmansThompson On December 4, 2014, weIn connection with the promotion of Mr. Thompson as President and Chief Executive Officer of the PrimeLending, on October 25, 2019, the Company and Mr. Thompson entered into an employment agreement with Mr. Salmans, pursuant tothat became effective as of January 1, 2020, which Mr. Salmans will continue to serve as Chief Executive Officer of PrimeLending. Mr. Salmans’ previous employment agreement expired on November 30, 2014remain in accordance with its terms. In November 2017, the term of Mr. Salmans’ employment was extendedeffect until December 31, 2019.2022. Pursuant to thisthe employment agreement, Mr. SalmansThompson is entitled to ana minimum annual base salary of $750,000$725,000 and is eligible to participate in (1) an annual incentive bonus program adopted by the Compensation Committee of the Board of Directors of the Company, or whomever is delegated such authority by the Board, and (2) any long-term incentive award programs adopted by the Compensation Committee.Committee, or whomever is delegated such authority by the Board. With respect to calendar year 2020, the employment agreement provided that the value of his long-term incentive award granted in 2020 was at least $300,000. Mr. SalmansThompson also is also entitled to reimbursement of employment-related expenses and to participate in the employee benefit programs generally available to employees of the Company. Additionally, the agreement provides for a one-time cash bonus of $260,000, which was paid to Mr. Salmans upon execution of the agreement. The agreement also includes, among other things, customary non-competition, non-solicitation and confidentiality provisions. Mr. Salmans’Thompson’s non-competition obligations continue for 12 months following his termination, and Mr. Thompson’s non-solicitation obligations continue for twelve (12)12 months following the earlier of (i) his termination and (ii) the termination of his employment agreement. Additionally, pursuant to his employment agreement, Mr. Thompson received a sign-on grant of RSUs having an aggregate fair market value of $125,000 on the date of grant. For a description of compensation and benefits to which Mr. SalmansThompson is entitled in the event of his termination or a change in control, see “Potential Payments Upon Termination or Change-in-Control” below.
Mr. Winges The Company entered into an employment agreement with Mr. Winges effective upon commencement of his employment with us on February 20, 2019, which will remain in effect until February 20, 2022. Pursuant to the employment agreement, Mr. Winges is entitled to an annual base salary of $500,000 and is eligible to participate in (1) an annual incentive bonus program adopted by the Compensation Committee of the Board of Directors of the Company, or whomever is delegated such authority by the Board, and (2) any long-term incentive award programs adopted by the Compensation Committee, or whomever is delegated such authority by the Board. With respect to calendar year 2019, the employment agreement provided that Mr. Winges was entitled to a minimum annual cash incentive bonus of $1,000,000 and the value of his long-term incentive award to be granted in 2020 was at least $500,000. Additionally, pursuant to his employment agreement, Mr. Winges received a sign-on cash bonus of $1,500,000 on the effective date of his employment. This sign-on bonus was paid to offset bonus compensation forfeited at his prior employer. As discussed in more detail below, this sign-on bonus also would have offset any amounts payable if Mr. Winges had been terminated in the first year of his employment. Mr. Winges’s employment agreement also provided for the reimbursement of up to $400,000 of out-of-pocket costs related to Mr. Winges’s relocation to Dallas, Texas and a gross-up of any such expenses not deductible by him. We believed this amount to be reasonable given our requirement that he move to the Dallas, Texas metroplex on an expedited basis. Mr. Winges’s employment agreement also provided for a grant of 83,000 TRSUs to offset compensation forfeited from Mr. Winges’s prior employer. The employment agreement provided that if Mr. Winges had been terminated without “cause” or due to death or disability within one year of the effective date, he would have received a payment of $2,000,000 less any salary and incentives received during his employment, and this payment would be in lieu of any shares vesting from the grant of TRSUs. Following the first anniversary of his employment, if he is terminated without cause he will receive a lump-sum cash payment equal to one times the sum of (A) his annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the annual incentive cash bonus paid to him in respect of the calendar year immediately preceding the year of the termination. Any unvested portion of the 83,000 TRSUs also will vest in full if such termination, or a termination as a result of death or disability, occurs on or after the first anniversary of the effective date of his employment. For a description of compensation and benefits to which Mr. Winges is entitled in the event of his termination or a change in control, see “Potential Payments Upon Termination or Change-in-Control” below. Equity Incentive Plans On September 20, 2012, our stockholders approved the 2012 Equity Incentive Plan, which provides for the grant of equity-based awards, including restricted shares of our common stock, RSUs, stock options, grants of shares, stock appreciation rights, or SARs, and other equity-based incentives, to our directors, officers and other employees and those of our subsidiaries selected by our Compensation Committee. At inception, 4,000,000 shares were authorized for issuance pursuant to the 2012 Equity Incentive Plan. On June 15, 2017, our stockholders reapproved the performance goals contained in the 2012 Equity Incentive Plan. All shares granted and outstanding pursuant to the 2012 Equity Incentive Plan, whether vested or unvested, are entitled to receive dividends and to vote, unless forfeited. All other awards, including RSUs, are not entitled to dividends nor to vote. No participant in our 2012 Equity Incentive Plan may be granted performance-based equity awards in any fiscal year representing more than 500,000 shares of our common stock or stock options or SARs representing in excess of 750,000 shares of our common stock. The maximum number of shares underlying incentive stock options granted under the 2012 Equity Incentive Plan may not exceed 2,000,000. On July 23, 2020 our stockholders approved the 2020 Equity Incentive Plan, and as a result, our ability to grant new awards pursuant to the 2012 Equity Incentive Plan was terminated. However, all awards that were previously granted and outstanding under the 2012 Equity Incentive Plan remained in full force and effect according to their respective terms. The 2020 Equity Incentive Plan provides for the grant of incentive stock options, nonqualified stock options, or SARs, restricted stock, RSUs, performance awards, dividend equivalent rights and other equity-based awards, which may be granted singly or in combination, and may be paid in cash or shares of our common stock, to our directors, officers and other employees and those of our subsidiaries selected by our Compensation Committee. At inception, 3,650,000 shares were authorized for issuance pursuant to the 2020 Equity Incentive Plan. All shares granted and outstanding pursuant to the 2020 Equity Incentive Plan, whether vested or unvested, are entitled to receive dividends and to vote, unless forfeited. Generally, holders of restricted stock will be entitled to vote and receive dividends on their restricted shares, but our Compensation
Committee may determine, in its discretion, whether dividends paid while the shares are subject to restrictions may be reinvested in additional shares of restricted stock. All other awards, including RSUs, are not entitled to dividends nor to vote; however, an award of RSUs may provide for rights with respect to dividends or dividend equivalents. Stock options granted under the 2012 Equity Incentive Plan and the 2020 Equity Incentive Plan may be either “incentive stock options” within the meaning of Section 422 of the Code, or nonqualified stock options. All of the shares available for issuance as an award under the 2020 Equity Incentive Plan may be delivered pursuant to incentive stock options. Other than during the first calendar year in which a non-employee director has been elected to serve on the Board of Directors, no such director may be granted awards under the 2020 Equity Incentive Plan in any calendar year that, when taken together with all cash retainers and other fees paid to the director for services to Hilltop for the same calendar year, exceed $450,000 in the aggregate (with the value of any equity awards determined as of the date of grant; provided, however, the Chairman may be granted an award or awards each calendar year in an aggregate amount not to exceed 50,000 shares, which shall be in addition to the $450,000 annual limit on awards to non-employee directors described above. Five percent of the shares of our common stock that may be issued pursuant to awards under the 2020 Equity Incentive Plan may be granted with (or amended by the Compensation Committee to include) more favorable vesting conditions than those set forth in the 2020 Equity Incentive Plan. The 2012 Equity Incentive Plan was, and the 2020 Equity Incentive Plan is, administered by our Compensation Committee, which has the discretion to, among other things, determine the persons to whom awards will be granted, the number of shares of our common stock to be subject to awards and performance goals and other terms and conditions of the awards. Such performance goals may be applied to our Company as a whole, any of our subsidiaries or affiliates, and/or any of our divisions or strategic business units, and may be used to evaluate performance relative to a market index or a group of other companies. Further, the Compensation Committee has the authority to adjust the performance goals in recognition of unusual or non-recurring events. The 2012 Equity Incentive Plan providesand the 2020 Equity Incentive Plan each provide that in no event will the Compensation Committee be authorized to re-price stock options, or to lower the base or exercise price of any other awardSARs granted under such plan, without obtaining the approval of our stockholders. Stock options granted under the 2012 Equity Incentive Plan may be either “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code, or nonqualified stock options. Generally, holders of restricted stock will be entitled to vote and receive dividends on their restricted shares, but our Compensation Committee may determine, in its discretion, whether dividends paid while the shares are subject to restrictions may be reinvested in additional shares of restricted stock. Except as otherwise permitted by our Compensation Committee, awards granted under the 2012 Equity Incentive Plan and the 2020 Equity Incentive Plan will be transferable only by will or through the laws of descent and distribution, and each stock option will be exercisable during the participant’s lifetime only by the participant or, upon the participant’s death, by his or her estate. Director compensation paid in the form of our common stock, whether at our or the director’s election, is issued through the 2012 Equity Incentive Plan and the 2020 Equity Incentive Plan.
Annual Incentive Plan On September 20, 2012, our stockholders originally approved the Annual Incentive Plan. Our stockholders then reapproved the performance goals contained in the Annual Incentive Plan on June 15, 2017. The Annual Incentive Plan provides for a cash bonus to key employees who are selected by the Compensation Committee for participation in the plan. The Annual Incentive Plan is intended to permit the payment of “performance-based compensation” and is designed to reward executives whose performance during the fiscal year enabled us to achieve favorable business results and to assist us in attracting and retaining executives. A participant may receive a cash bonus under the Annual Incentive Plan based on the attainment, during each performance period, of performance objectives in support of our business strategy that are established by our Compensation Committee. These performance objectives may be based on one or more of the performance criteria outlined in the Annual Incentive Plan. The performance objectives may be applied with respect to Hilltop or any one or more of our subsidiaries, divisions, business units or business segments and may be applied to performance relative to a market index or a group of other companies. The Compensation Committee may adjust the performance goals applicable to any awards to reflect any unusual or non-recurring events. Participation in the Annual Incentive Plan does not guarantee the payment of an award. All awards payable pursuant to the Annual Incentive Plan are discretionary and subject to approval by our Compensation Committee. After the performance period ends, the Compensation Committee determines the payment amount of individual awards based on the achievement of the performance objectives. No participant in the Annual Incentive Plan may receive an award that exceeds $10,000,000 per year. Except as otherwise provided in a participant’s employment or other individual agreement, the payment of a cash bonus
to a participant for a performance period is conditioned upon the participant’s active employment on the date that the final awards are approved by the Compensation Committee.paid. We may amend or terminate the Annual Incentive Plan at any time. Outstanding Equity Awards at Fiscal Year End The following table presents information pertaining to all outstanding equity awards held by the NEOs as of December 31, 2018.2020. | | | | | | | | | | | | | Stock Awards | | | | | | | | | Equity Incentive | | Equity Incentive | | | | | | | | | Plan Awards: | | Plan Awards: | | | | | | | Market | | Number of | | Market or | | | | | Number of | | Value of | | Unearned | | Payout Value of | | | | | Shares or | | Shares or | | Shares, Units | | Unearned | | | | | Units of | | Units of | | or Other | | Shares, Units | | | | | Stock That | | Stock That | | Rights That | | or Other Rights | | | | | Have Not | | Have Not | | Have Not | | That Have Not | | | | | Vested | | Vested | | Vested | | Vested | | | | | | | | | | | | | | | | | Stock Awards | | | | | | | | | | | Equity Incentive | | | | | | | | | Equity Incentive | | Plan Awards: | | | | | | | | | Plan Awards: | | Market or Payout of | | | | | Number of | | Market Value of | | Number of Unearned | | Value of Unearned | | | | | Shares or Units | | Shares or Units | | Shares, Units or | | Shares, Units or | | | | | of Stock That | | of Stock That | | Other Rights That | | Other Rights That | | | | | Have Not Vested | | Have Not Vested | | Have Not Vested | | Have Not Vested | | Name | | (#) | | (a) ($) | | (a) (#) | | (a) ($) | | | (#) | | (a) ($) | | (a) (#) | | (a) ($) | | Jeremy B. Ford | | 21,971 | (b) | 391,743 | | 21,971 | (c) | 391,743 | | | 31,766 | (b) | 873,883 | | 31,766 | (c) | 873,883 | | | | 27,734 | (d) | 494,497 | | 27,734 | (e) | 494,497 | | | | | 31,766 | (f) | 566,388 | | 31,766 | (g) | 566,388 | | | | | 45,173 | (h) | 805,435 | | 45,173 | (i) | 805,435 | | | | | | | | | | | | | | Alan B. White | | 21,971 | (b) | 391,743 | | 21,971 | (c) | 391,743 | | | | | 12,307 | (d) | 219,434 | | 12,306 | (e) | 219,416 | | | | | 14,096 | (f) | 251,332 | | 14,096 | (g) | 251,332 | | | | | | | | | | | | | | | | | 45,173 | (d) | 1,242,709 | | 45,173 | (e) | 1,242,709 | | | | | 67,782 | (f) | 1,864,683 | | 67,781 | (g) | 1,864,655 | | | | | 41,667 | (h) | 1,146,259 | | — | | — | | | | | | | | | | | | | William B. Furr | | 13,922 | (j) | 248,225 | | — | | — | | | 7,753 | (b) | 213,285 | | 7,752 | (c) | 213,258 | | | | 8,965 | (k) | 159,846 | | — | | — | | | | | 6,154 | (f) | 109,726 | | 6,153 | (g) | 109,708 | | | | | 7,753 | (h) | 138,236 | | 7,752 | (i) | 138,218 | | | | | | | | | | | | | | Hill A. Feinberg | | 9,416 | (b) | 167,887 | | 9,416 | (c) | 167,887 | | | | | 6,154 | (d) | 109,726 | | 6,153 | (e) | 109,708 | | | | | 8,055 | (f) | 143,621 | | 8,055 | (g) | 143,621 | | | | | | | | | | | | | | | | | 11,358 | (d) | 312,459 | | 11,358 | (e) | 312,459 | | | | | 13,600 | (i) | 374,136 | | — | | — | | | | | 11,297 | (f) | 310,780 | | 11,297 | (g) | 310,780 | | | | | | | | | | | | | Jerry L. Schaffner | | 8,789 | (b) | 156,708 | | 8,788 | (c) | 156,690 | | | 6,645 | (b) | 182,804 | | 6,645 | (c) | 182,804 | | | | 4,923 | (d) | 87,777 | | 4,922 | (e) | 87,759 | | | | | 6,645 | (f) | 118,480 | | 6,645 | (g) | 118,480 | | | | | 10,325 | (h) | 184,095 | | 10,325 | (i) | 184,095 | | | | | | | | | | | | | | Todd L. Salmans | | 10,986 | (b) | 195,880 | | 10,985 | (c) | 195,863 | | | | | 6,154 | (d) | 109,726 | | 6,153 | (e) | 109,708 | | | | | 7,048 | (f) | 125,666 | | 7,048 | (g) | 125,666 | | | | | 10,325 | (h) | 184,095 | | 10,325 | (i) | 184,095 | | | | | | 10,325 | (d) | 284,041 | | 10,325 | (e) | 284,041 | | | | | 3,300 | (j) | 90,783 | | — | | — | | | | | 9,603 | (f) | 264,179 | | 9,602 | (g) | 264,151 | | | | | | | | | | | | | Stephen Thompson | | | 4,000 | (k) | 110,040 | | — | | — | | | | | 5,000 | (d) | 137,550 | | — | | — | | | | | 5,014 | (l) | 137,935 | | — | | — | | | | | 6,779 | (f) | 186,490 | | 6,778 | (g) | 186,463 | | | | | | | | | | | | | M. Bradley Winges | | | 83,000 | (m) | 2,283,330 | | — | | — | | | | | 10,363 | (n) | 285,086 | | — | | — | | | | | 13,557 | (f) | 372,953 | | 13,556 | (g) | 372,926 | |
| (a) | (a)
| | Value based upon the closing price of $17.83$27.51 for our common stock on December 31, 2018.2020. With respect to performance-based RSUs, the number of shares underlying each award was calculated based on the achievement of target level performance due to certain modifiers utilized in the performance calculation. |
| (b) | (b)
| | Represents time-based RSUs that cliff vested on February 23, 2019. March 5, 2021. |
| (c) | (c)
| | Represents shares underlying performance-based RSUs that vested on February 23, 2019March 5, 2021 upon the achievement of certain performance goals during the three-year period beginning January 1, 20162018 and ending December 31, 2018.2020. The amount disclosed in the table is based on applicable target performance during the noted period. Actual shares issued under performance awards were 108.3%180.0% of unvested shares reported in the table above at December 31, 2018,2020, as approved by the Compensation Committee on January 24, 2019. February 23, 2021. |
| (d) | (d)
| | Represents time-based RSUs that cliff vest upon the earlier of February 23, 202027, 2022 and a termination of employment without cause within the twelve months following or six months preceding a change of control. |
| (e) | (e)
| | Represents performance-based RSUs that vest upon the achievement of certain performance goals during the three-year period beginning January 1, 2017 and ending December 31, 2019.
|
| (f)
| | Represents time-based RSUs that cliff vest upon the earlier of March 5, 2021 and a change of control.
|
| (g)
| | Represents performance-based RSUs that vest upon the achievement of certain performance goals during the three-year period beginning January 1, 2018 and ending December 31, 2020.
|
| (h)
| | Represents time-based RSUs that cliff on February 27, 2022.
|
| (i)
| | Represents performance-based RSUs that vest upon the achievement of certain performance goals during the three-year period beginning January 1, 2019 and ending December 31, 2021. |
| (f) | (j)
Represents time-based RSUs that cliff vest upon the earlier of February 20, 2023 and a termination of employment without cause within the twelve months following or six months preceding a change of control. |
| (g) | | Represents outstanding time-basedperformance-based RSUs that vest upon the achievement of certain performance goals during the three-year period beginning January 1, 2020 and ending December 31, 2022. |
| (h) | Represents time-based RSUs that cliff vest upon the earlier of (i) four installmentsAugust 10, 2023 and a termination of 10,607; 8,618; 10,607; and 3,315 that commenced on February 15, 2017 and annually thereafteremployment without cause within the twelve months following or (ii)six months preceding a change of control. |
| (i) | (k)
| | Represents time-based RSUs that cliff vest upon the earlier of September 6, 20195, 2022 and a termination of employment without cause within the twelve months following or six months preceding a change of control. |
| (j) | Represents time-based RSUs that cliff vest upon the earlier of November 21, 2022 and a termination of employment without cause within the twelve months following or six months preceding a change of control. |
| (k) | Represents time-based RSUs that cliff vest upon the earlier of April 26, 2021 and a termination of employment without cause within the twelve months following or six months preceding a change of control. |
| (l) | Represents time-based RSUs that cliff vest upon the earlier of January 1, 2023 and a termination of employment without cause within the twelve months following or six months preceding a change of control. |
| (m) | 2019 PROXY STATEMENT
| | Represents time-based RSUs that cliff vest upon the earlier of February 20, 2022 and a termination of employment due to death or disability, a termination of employment without cause, and a termination of employment without cause within the twelve months following or six months preceding a change of control. |
| (n) | Represents time-based RSUs that cliff vest upon the earlier of February 20, 2022 and a termination of employment without cause within the twelve months following or six months preceding a change of control. |
Option Exercises and Stock Vested in 20182020 The following table presents information pertaining to any outstanding restricted stock unitRSU awards held by the NEOs that vested during 2018.2020. There were no option awards outstanding during 2018. 2020. | | | | | | | | | Stock Awards | | | | | Number of | | Value | | | | | Shares Acquired | | Realized on | | | | | | | | | | | | | Stock Awards | | | | | Number of | | Value | | | | | Shares Acquired | | Realized on | | Name | | on Vesting (#) | | Vesting ($) | | | on Vesting (#) | | Vesting ($) | | Jeremy B. Ford | | 31,507 | | 787,360 | (a) | | 61,015 | | 1,354,533 | (a) | | | | | | | | Alan B. White | | 31,507 | | 787,360 | (a) | | | | | | | | | | | | | | | | William B. Furr | | 8,618 | | 218,294 | (b) | | 16,853 | | 374,269 | (b) | | | | | | | | Hill A. Feinberg | | 11,253 | | 281,212 | (a) | | | | | | | | | | | | | | | | Jerry L. Schaffner | | 12,604 | | 314,974 | (a) | | 10,830 | | 240,426 | (a) | | | | | | | | Todd L. Salmans | | 15,754 | | 393,692 | (a) | | | | | | | | | Stephen Thompson | | | 2,893 | | 47,561 | (c) | | | | | | | | M. Bradley Winges | | | — | | — | |
| (a) | (a)
| | Value based upon the closing price of $24.99$22.20 for our common stock on February 23, 20182020 multiplied by the number of vested RSUs. |
| (b) | (b)
Value based upon the closing prices of $22.24 and $22.20 for our common stock on February 15, 2020 and February 23, 2020, respectively, multiplied by the respective number of vested RSUs. |
| (c) | | Value based upon the closing price of $25.33$16.44 for our common stock on February 15, 2018April 14, 2020 multiplied by the number of vested RSUs. |
Non-Qualified Deferred Compensation The following table shows the non-qualified deferred compensation activity for our NEOs during the fiscal year ended December 31, 2018.2020. | | | | | | | | | | | | | | | Executive | | Registrant | | Aggregate | | Aggregate | | Aggregate | | | | | Contributions | | Contributions | | Earnings in | | Withdrawals/ | | Balance at Last | | | | | in Last Fiscal | | in Last Fiscal | | Last Fiscal | | Distributions | | Fiscal Year End | | | | | | | | | | | | | | | | | | | Executive | | Registrant | | Aggregate | | Aggregate | | Aggregate | | | | | Contributions | | Contributions | | Earnings in | | Withdrawals/ | | Balance at Last | | | | | in Last Fiscal | | in Last Fiscal | | Last Fiscal | | Distributions | | Fiscal Year End | | Name | | Year ($) | | Year ($) | | Year (a) ($) | | ($) | | End (b) ($) | | | Year ($) | | Year ($) | | Year (a) ($) | | ($) | | End (b) ($) | | Jeremy B. Ford | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | Alan B. White | | — | | — | | 77,795 | | — | | 6,672,372 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | William B. Furr | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | Hill A. Feinberg | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jerry L. Schaffner | | — | | — | | 27,069 | | — | | 2,536,685 | | | — | | — | | 14,367 | | — | | 2,595,073 | | | | | | | | | | | | | | | Todd L. Salmans | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | Stephen Thompson | | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | M. Bradley Winges | | | — | | — | | — | | — | | — | |
| (a) | | Represents interest earned on 2012 deferred compensation contributions of $6,430,890 for Mr. White and $2,448,000 for Mr. Schaffner. All amounts reported as aggregate earnings in the last fiscal year are reported as compensation in the last completed fiscal year in the Summary Compensation Table. |
| (b) | | All amounts were reported as compensation in the Summary Compensation Table for the last completed fiscal year or prior fiscal years. |
In connection with our acquisition of PlainsCapital, we entered into a retention agreements with Messrs. White and Schaffner. Pursuant to these agreements, we agreed to contribute an amount in cash equal to $6,430,890 and $2,448,000 as deferred compensation to Messrs. White and Schaffner, respectively, in satisfaction of their rights under Section 6 (Termination Upon Change of Control) of their previous employment agreements with PlainsCapital. Such amounts accrue interest at the prevailing money market rate and are payable to Messrs. White and Schaffner following termination of their employment, subject to any delay required by Section 409A of the Internal Revenue Code. As of a result of the termination of Mr. White’s employment on April 1, 2019, Mr. White will receive such amount on or about October 1, 2019.
Potential Payments Upon Termination or Change-in-Control The 2012 Equity Incentive Plan and 2020 Equity Incentive Plan, under which we have granted awards to the NEOs, containscontain specific termination and change in control provisions. We determined to include a change in control provision in the planplans to be competitive with what we believe to be the standards for the treatment of equity upon a change in control for similar companies and so that employees who remain after a change in control would be treated the same with regard to equity as the general stockholders who could sell or otherwise transfer their equity upon a change in control. Under the terms of the plan,2012 Equity Incentive Plan, if a change in control (as defined below in the discussion of the plan)2012 Equity Incentive Plan) were to occur, all awards then outstanding would become vested and/or exercisable and any applicable performance goals with respect thereto would be deemed to be fully achieved. Commencing inHowever, for equity grants pursuant to the 2012 Equity Incentive Plan after January 1, 2019 and equity grants pursuant to the 2020 Equity Incentive Plan, all equity award agreements contain “double trigger” provisions, which require termination of employment within the six months preceding or the twelve months following a change in control in order for the equity awards to vest in connection with a change in control. Employment Contracts Mr. White
If Mr. White’s retention contract was terminated by us for cause, by him or due to his death or disability (as such terms are defined below), he or his estate, as applicable, was entitled to:
| (i)
| | his annual base salary through the date of termination, to the extent not already paid and not deferred;
|
| (ii)
| | any annual bonus earned by him for a prior award period, to the extent not already paid and not deferred;
|
| (iii)
| | any business expenses he incurred that are not yet reimbursed as of the date of termination; and
|
| (iv)
| | any other amounts or benefits, including all unpaid and/or vested, nonforfeitable amounts owing or accrued to him, required to be paid or provided or which he is eligible to receive under any plan, program, policy or practice or contract or agreement, to the extent not already paid and not deferred, through the date of termination.
|
In addition, Mr. White or his estate, as applicable, was entitled to a lump-sum cash payment equal to $6,430,890, which represents the amount Mr. White would have been entitled to receive under his prior employment agreement with PlainsCapital if his employment was terminated. Such amounts described in the preceding paragraph are referred to as the “White Accrued Amounts.”
If Mr. White’s employment was terminated by us other than for cause (as such term is defined below) or his death or disability, or if his employment terminates due to non-renewal by us, he is entitled to the White Accrued Amounts, including the lump-sum cash payment equal to $6,430,890 and interest thereon from November 30, 2012, as well as payments generally equal to the sum of the average of Mr. White’s prior annual bonuses over the preceding three years plus his annual base salary, multiplied by the greater of (i) the number of full and partial years remaining until the end of the term of his retention agreement and (ii) two. Mr. White will retain the right to be grossed-up for any excise tax relating to “excess parachute payments” (as defined in Section 280G of the Internal Revenue Code), which is set forth in his prior employment agreement, provided that the gross-up will only relate to any excise taxes arising in connection with our acquisition of PlainsCapital. These severance amounts were payable subject to Mr. White’s execution of a release of claims.
On February 21, 2019, the Company entered into a Separation and Release Agreement, or the Separation Agreement, with Mr. White in connection with his termination of employment effective April 1, 2019, or the Retirement Date. Pursuant to the Separation Agreement, effective as of the Retirement Date, Mr. White resigned from all positions with the Company and its subsidiaries, including, without limitation, Vice-Chairman of the Board of Directors of the Company and Co-Chief Executive Officer of the Company. The Separation Agreement also provided that the Retention Agreement by and between the Company and Mr. White, as amended, terminated on the Retirement Date, except for certain provisions that address, among other items, non-competition, non-solicitation, confidential information and arbitration.
Pursuant to the Separation Agreement, and in accordance with the Retention Agreement, Mr. White is entitled to receive, subject to any delay required under Section 409A of the Internal Revenue Code, the following:
| ·
| | Salary up to and including the Retirement Date;
|
| ·
| | $1,450,000 as a cash bonus based upon the Company’s 2018 performance;
|
| ·
| | Commencing 60 days following the Retirement Date, $5,770,000, which amounts to two times his annual base salary and average three year bonus, in installments over the next two years in accordance with current payroll practices of the Company;
|
| ·
| | $6,672,372 that constitutes the Prior Agreement Payment plus interest thereon, which has been held in a separate interest bearing account since the acquisition of PlainsCapital Corporation by the Company;
|
| ·
| | $23,000 for COBRA assistance; and
|
| ·
| | Continued payment of premiums with respect to a Split-Dollar Life Insurance Policy, which policy is for the benefit of Mr. White and the Company.
|
In addition, the Separation Agreement provided that all of Mr. White’s unvested restricted stock units continued to vest, or remain eligible for vesting on a pro rata basis, through April 1, 2019. The Separation Agreement also contained a mutual release between Mr. White and the Company.
Mr. Furr If Mr. Furr’s employment agreement is terminated (1) by Mr. Furr, (2) by the Company for “Cause”“cause” (as such term is defined in the employment agreement), or (3) in the event of Mr. Furr’s death or disability, Mr. Furr (or his estate, as applicable) will be entitled to receive his base salary through the effective date of such termination, all earned and unpaid and/or vested, nonforfeitable amounts owed to him at such time under the employment agreement or under any compensation or benefit plans, and reimbursement for any unreimbursed business expenses incurred prior to the effective date of such termination. With respect to a termination resulting from Mr. Furr’s death or disability, the unvested portion of the equity grants granted to him upon commencement of his employment also will also vest, subject to certain conditions. If Mr. Furr’s employment is terminated by the Company without “Cause”“cause” (other than pursuant to a “Change“change in Control”control” (as such term is defined in the employment agreement)), Mr. Furr will be entitled to receive the amounts in the foregoing paragraph and, subject to his execution and delivery to the Company of a release, a lump-sum cash payment equal to the sum of (A) his annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the incentive bonus paid to him in respect of the calendar year immediately preceding the year of the termination. Any unvested portion of the equity grants granted to him upon commencement of his employment also will also vest. If Mr. Furr’s employment is terminated without “Cause”“cause” within the 12twelve months immediately following, or the six months immediately preceding, a “Change“change in Control,control,” Mr. Furr will be entitled to receive the same amount upon a termination for “Cause”“cause” and a lump-sum cash payment equal to two times the sum of (A) his annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the incentive bonus paid to him in respect of the calendar year immediately preceding the year of the termination, provided that Mr. Furr executes and delivers a release to the Company. Any unvested portion of the equity grants made prior to 2019also will also vest. Notwithstanding, any amounts payable to Mr. Furr upon a Changechange in Controlcontrol shall not constitute a “parachute payment” and shall be reduced accordingly. Mr. Schaffner With respect to Mr. Schaffner, if his employment contract is terminated by us for cause, by the executiveMr. Schaffner or due to the executive’shis death or disability (as such terms are defined below), he or his estate, as applicable, is entitled to: | (i) | | his annual base salary through the date of termination, to the extent not already paid and not deferred; |
| (ii) | | any annual bonus earned by the executive for a prior award period, to the extent not already paid and not deferred; |
| (iii) | | any business expenses he incurred that are not yet reimbursed as of the date of termination; and |
| (iv) | | any other amounts or benefits, including all unpaid and/or vested, nonforfeitable amounts owing or accrued to him, required to be paid or provided or which he is eligible to receive under any plan, program, policy or practice or contract or agreement, to the extent not already paid and not deferred, through the date of termination. |
In addition, Mr. Schaffner or his estate, as applicable, is entitled to a lump-sum cash payment equal to $2,448,000, which represents the amount Mr. Schaffner would have been entitled to receive under his prior employment agreement with PlainsCapital if his employment was terminated.terminated, plus interest from November 30, 2012. Such amounts described in the preceding paragraph are referred to as the “Accrued Amounts.” If Mr. Schaffner’s employment is terminated by us other than for cause (as such term is defined below) or his death or disability, he is entitled to the Accrued Amounts, including the lump-sum cash payment equal to $2,448,000 and interest thereon from November 30, 2012, as well as payments generally equal to the sum of the average of Mr. Schaffner’s prior annual bonuses over the preceding three years plus his annual base salary. Mr. Schaffner will retain the right to be grossed-up for any excise tax relating to “excess parachute payments” (as defined in Section 280G of the Internal Revenue Code), which is set forth in his prior employment agreement, provided that the gross-up will only relate to any excise taxes arising in connection with our acquisition of PlainsCapital. These severance amounts are payable subject to Mr. Schaffner’s execution of a release of claims. Mr. SalmansThompson With respect toIf Mr. Salmans, if theThompson’s employment agreement is terminated (1) by the executive officer,Mr. Thompson, (2) by the Company for “cause” (as such term is defined below)in the employment agreement), or (3) in the event of the executive officer’sMr. Thompson’s death or disability, the executive officerMr. Thompson (or his estate, as applicable) will be entitled to receive his base salary through the effective date of such termination, all earned and unpaid and/or vested, nonforfeitable amounts owed to executive officerhim at such time under the employment agreement or under any compensation or benefit plans, and reimbursement for any unreimbursed business expenses incurred prior to the effective date of such termination (collectively, the “Officer Accrued Amounts”).termination.
If the executive officer’sMr. Thompson’s employment is terminated by the Company without “cause” (other than pursuant to a “change in control” (as such term is defined in the applicable employment agreement of such executive officer)agreement)), the executive officerMr. Thompson will be entitled to receive the Officer Accrued Amountsamounts in the foregoing paragraph and, subject to the executive officer’shis execution and delivery to the Company of a release, of claims, (1) a lump-sum cash payment equal to the sum of (A) the executive officer’shis annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the annual incentive cash bonus paid to the executive officerhim in respect of the calendar year immediately preceding the year of the termination, and (2) if the executive officer elects continuation of coverage under the Company’s group health plan pursuant to COBRA, reimbursement for the executive officer’s COBRA premiums for a period of twelve months following the date of such termination, or until the executive officer is otherwise eligible for health coverage under another employer group health plan.termination. Further, if the executive officer’sIf Mr. Thompson’s employment is terminated without “cause” within the twelve months immediately following, or the six months immediately preceding, a “change in control,” the executive officer, upon execution of a release,Mr. Thompson will be entitled to receive (1)the same amount upon a termination for “cause” and a lump-sum cash payment equal to two times the sum of (A) the executive officer’shis annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the annual incentive cash bonus paid to the executive officerhim in respect of the calendar year immediately preceding the year of the termination, provided that Mr. Thompson executes and (2) ifdelivers a release to the executive officer elects continuationCompany. Any unvested portion of coverage under the Company’s group health plan pursuant to COBRA, reimbursement forequity grants, including the executive officer’s COBRA premiums for a period of twelve months following the date of such termination, or until the executive officer is otherwise eligible for health coverage under another employer group health plan.sign-on grant, also will vest. Notwithstanding, the above, any amounts payable to the executive officerMr. Thompson upon a change ofin control shall not constitute a “parachute payment” and shall be reduced accordingly.
Mr. Winges If Mr. Winges’s employment agreement is terminated (1) by Mr. Winges, (2) by the Company for “cause” (as such term is defined in the employment agreement), or (3) in the event of Mr. Winges’s death or disability, Mr. Winges (or his estate, as applicable) will be entitled to receive his base salary through the effective date of such termination, all earned and unpaid and/or vested, nonforfeitable amounts owed to him at such time under the Employment Agreement, restricted stock unit award agreements or under any compensation or benefit plans, and reimbursement for any unreimbursed business expenses incurred prior to the effective date of such termination. With respect to a termination resulting from Mr. Winges’s death or disability, the unvested portion of the 83,000 TRSUs grant will vest, subject to certain conditions. If Mr. Winges’s employment is terminated by the Company without “cause” (other than pursuant to a “change in control” (as such term is defined in his employment agreement)), Mr. Winges will be entitled to receive the amounts set forth in the foregoing paragraph and, subject to his execution and delivery to the Company of a release, the following amount: (1) before the first anniversary of the effective date of his employment, $2,000,000, less the aggregate amount of any salary and Incentive Bonus paid to Mr. Winges prior to such date in lieu of the vesting of 83,000 TRSUs grant, which will forfeit in full; or (2) on or after the first anniversary of the effective date of his employment, a lump-sum cash payment equal to the sum of (A) his annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the incentive bonus paid to him in respect of the calendar year immediately preceding the year of the termination. Any
unvested portion of the 83,000 TRSUs grant also will vest in full if such termination occurs on or after the first anniversary of the effective date of his employment. If Mr. Winges’s employment is terminated without “cause” within the twelve months immediately following, or the six months immediately preceding, a “change in control,” Mr. Winges will be entitled to receive the amounts set forth in the first paragraph of this section and, if such change in control is on or after the first anniversary of the effective date of his employment, a lump-sum cash payment equal to two times the sum of (A) his annual base salary rate immediately prior to the effective date of such termination and (B) an amount equal to the incentive bonus paid to him in respect of the calendar year immediately preceding the year of the termination, provided that Mr. Winges executes and delivers a release to the Company. Any unvested RSU awards, including the specifically set forth in his employment agreement, also will vest if Mr. Winges is terminated without “cause” within the twelve months immediately following, or the six months immediately preceding, a “change in control.” Notwithstanding, any amounts payable to Mr. Winges upon a “change in control” shall not constitute a “parachute payment” and will be reduced accordingly. Definitions of “Cause” and “Disability” Under Employment Contracts For the purposes of Messrs. White and Schaffner’s retention agreements and the employment agreements of Messrs. Furr, Thompson and Salmans,Winges, “cause” means: (i) an intentional act of fraud, embezzlement or theft in connection with the executive’s duties or in the course of his employment with the Company or its affiliates; (ii) intentional wrongful damage to property of the Company or its affiliates; (iii) intentional wrongful disclosure of trade secrets or confidential information of the Company or its affiliates; (iv) intentional violation of any law, rule or regulation (other than traffic violations or similar offenses) or a final “Cease and Desist Order;” (v) intentional breach of fiduciary duty involving personal profit; or (vi) intentional action or inaction that causes material economic harm to the Company or its affiliates. In addition to items above, the definition of “cause” in Messrs. Furr and Salmans employment agreements includes (a) a material violation of the Company’s written policies, standards or guidelines applicable to the executive officer or (b) the failure or refusal of the executive officer to follow the reasonable lawful directives of the Board of Directors or the executive officer’s supervisors. | ● | an act of fraud, embezzlement or theft; |
| ● | the Company is required to remove or replace executive by formal order or formal or informal instruction, including a requested consent order or agreement, from the Federal Reserve or any other regulatory authority having jurisdiction; |
| ● | intentional wrongful damage to property of the Company; |
| ● | intentional wrongful disclosure of trade secrets or confidential information of the Company; |
| ● | intentional violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order; |
| ● | intentional breach of fiduciary duty involving personal profit; |
| ● | intentional action or inaction that causes material economic harm to the Company; |
| ● | a material violation of the Company’s written policies, standards or guidelines applicable to executive; or |
| ● | the failure or refusal of executive to follow the reasonable lawful directives of the Board or, in case of Messrs. Furr and Thompson, their respective supervisors. |
For the purposes of the employment agreement with Messrs. WhiteFurr, Thompson and Winges, “disability” is defined in accordance with our disability policy in effect at the time of the disability. For the purposes of Mr. Schaffner’s retention agreements,agreement, “cause” means: | ● | an intentional act of fraud, embezzlement or theft; |
| ● | intentional wrongful damage to property of the Company; |
| ● | intentional wrongful disclosure of trade secrets or confidential information of the Company; |
| ● | intentional violation of any law, rule or regulation (other than traffic violations or similar offenses) or a final cease and desist order; |
| ● | intentional breach of fiduciary duty involving personal profit; or |
| ● | intentional action or inaction that causes material economic harm to the Company. |
For the purposes of Mr. Schaffner’s retention agreement, “disability” means he shall have been absent from full-time performance of his duties for 180 consecutive days as a result of incapacity due to physical or mental illness that is determined to be total and permanent by a physician. For the purposes of the employment agreement with Mr. Salmans, “disability” is defined in accordance with our disability policy in effect at the time of the disability.
Set forth below are the amounts that Messrs. Jeremy B. Ford, White, Furr, Feinberg, SalmansSchaffner, Thompson and SchaffnerWinges would have received if the specified events had occurred on December 31, 2018:2020. | | | | | | | | | | | | | | | | | | | | Termination due | | | | | | | | | | | Termination for | | to Death��or | | Termination | | Change of | | | | | | | | | | | | | | | | | | | | | | | | Termination due | | | | | | | | | | | Termination for | | to Death or | | Termination | | Change of | | Jeremy B. Ford | | Cause | | Disability | | Without Cause | | Control | | | Cause | | Disability | | Without Cause | | Control | | Accrued amounts | | $ | — | | $ | — | | $ | — | | $ | — | | | $ | — | | $ | — | | $ | — | | $ | — | | Cash payment | | | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | Cash severance | | | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | Restricted stock units (a) | | | — | | | 390,058 | | | 390,058 | | | 2,905,256 | | | | — | | | 4,364,664 | | | 4,364,664 | | | 9,108,781 | | Welfare benefits | | | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | Total | | $ | — | | $ | 390,058 | | $ | 390,058 | | $ | 2,905,256 | | | $ | — | | $ | 4,364,664 | | $ | 4,364,664 | | $ | 9,108,781 | |
| (a) | (a)
| | RSUs vest ratably upon the death or disability of the participant or termination of the participant without cause. The foregoing assumes the death or disability or termination of the participant without cause on December 31, 2018.2020. If a change of control under the 2012 Equity Incentive Plan or the 2020 Equity Incentive Plan occurs and assuming participant is terminated without cause on the date of the change in control, all unvested RSUs vest upon such event, which for purposes of the foregoing assumes December 31, 2018.2020. In each case, it is assumed the target award is achieved or utilized to calculate vesting of performance awards. The form of award governing a portion of the RSUs includes a non-solicitation provision that is triggered upon the participant’s termination. For additional information, see “—Incentive Plans.” |
| | | | | | | | | | | | | | | | | | | Termination due | | Termination | | | | | | | | | | to Death or | | Without Cause | | | | | | | | | | Disability or by | | or Non-Renewal | | | | | | | Termination for | | Executive for any | | of Retention | | Change of | | Alan B. White | | Cause | | Reason | | Agreement | | Control | | Accrued amounts (a) | | $ | 1,450,000 | | $ | 1,450,000 | | $ | 1,450,000 | | $ | — | | Cash payment (b) | | | 6,672,372 | | | 6,672,372 | | | 6,672,372 | | | — | | Cash severance (c) | | | — | | | — | | | 5,700,000 | | | — | | Restricted stock units (d) | | | — | | | 196,171 | | | 196,171 | | | 1,724,999 | | Welfare benefits | | | — | | | — | | | — | | | — | | Total | | $ | 8,122,372 | | $ | 8,318,543 | | $ | 14,018,543 | | $ | 1,724,999 | |
| | | | | | | | | | | | | | | | | | | Termination due | | | | | | | | | | Termination for | | to Death or | | Termination | | Change of | | William B. Furr | | Cause | | Disability | | Without Cause | | Control | | Accrued amounts | | $ | — | | $ | — | | $ | — | | $ | — | | Cash payment | | | — | | | — | | | — | | | — | | Cash severance (a) | | | — | | | — | | | 1,152,500 | | | 2,305,000 | | Restricted stock units (b) | | | — | | | 1,123,678 | | | 1,123,678 | | | 2,047,157 | | Welfare benefits | | | — | | | — | | | — | | | — | | Total | | $ | — | | $ | 1,123,678 | | $ | 2,276,178 | | $ | 4,352,157 | |
| (a) | (a)
Cash severance calculation if Mr. Furr is terminated without cause is based upon the sum of: (i) Mr. Furr’s annual base salary rate and (ii) an amount equal to annual incentive cash bonus paid to Mr. Furr in respect of the calendar year immediately preceding the year of the date of termination. If his employment is terminated without cause upon a change of control, the cash severance calculation is based upon two times the sum of: (i) Mr. Furr’s annual base salary rate and (ii) an amount equal to annual incentive cash bonus paid to Mr. Furr in respect of the calendar year immediately preceding the year of the date of termination. |
| (b) | RSUs vest ratably upon the death or disability of the participant or termination of the participant without cause. The foregoing assumes the death or disability or termination of the participant without cause on December 31, 2020. If a change of control under the 2012 Equity Incentive Plan or the 2020 Equity Incentive Plan occurs and assuming participant is terminated without cause on the date of the change in control, all unvested RSUs vest upon such event, which for purposes of the foregoing assumes December 31, 2020. In each case, it is assumed the target award is achieved or utilized to calculate vesting of performance awards. The form of award governing a portion of the RSUs includes a non-solicitation provision that is triggered upon the participant’s termination. For additional information, see “—Incentive Plans.” |
| | | | | | | | | | | | | | | | | | Termination due | | | | | | | | | Termination for | | to Death or | | Termination | | Change of | Jerry L. Schaffner | | Cause | | Disability | | Without Cause | | Control | Accrued amounts (a) | | $ | 650,000 | | $ | 650,000 | | $ | 650,000 | | $ | — | Cash payment (b) | | | 2,595,073 | | | 2,595,073 | | | 2,595,073 | | | — | Cash severance (c) | | | — | | | — | | | 1,216,667 | | | — | Restricted stock units (d) | | | — | | | 871,998 | | | 871,998 | | | 1,552,802 | Welfare benefits | | | — | | | — | | | — | | | — | Total | | $ | 3,245,073 | | $ | 4,117,071 | | $ | 5,333,738 | | $ | 1,552,802 |
| (a) | Accrued amountsAmounts calculation based upon the sum of: (i) Mr. White’sSchaffner’s annual base salary through December 31, 2018,2020, to the extent not already paid and not deferred; (ii) any annual bonus earned, to the extent not already paid and not deferred; (iii) any business expenses incurred that have not yet been reimbursed as of the date of termination; and (iv) any other amounts or benefits, including all unpaid and/or vested, nonforfeitable amounts owing or accrued to Mr. White. Schaffner. |
| (b) | (b)
| | Cash paymentPayments refers to a lump-sum cash payment that represents the amount, including interest thereon, Mr. WhiteSchaffner would have been entitled to receive under his prior employment agreement with PlainsCapital if his employment had been terminated. |
| (c) | (c)
| | Cash severanceSeverance calculation based upon the sum of the average of Mr. White’sSchaffner’s prior annual bonuses for each of the preceding three years plus his annual base salary, multiplied by the greater of: (i) the number of full and partial years remaining until the end of the term of his employment agreement and (ii) two. salary. |
| (d) | (d)
| | RSUs vest ratably upon the death or disability of the participant or termination of the participant without cause. The foregoing assumes the death or disability or termination of the participant without cause on December 31, 2018.2020. If a change of control under the 2012 Equity Incentive Plan or the 2020 Equity Incentive Plan occurs and assuming participant is terminated without cause on the date of the change in control, all unvested RSUs vest |
| upon such event, which for purposes of the foregoing assumes December 31, 2018.2020. In each case, it is assumed the target award is achieved or utilized to calculate vesting of performance awards. The form of award governing a portion of the RSUs includes a non-solicitation provision that is triggered upon the participant’s termination. For additional information, see “—Incentive Plans.” |
| | | | | | | | | | | | | | | | | | | | Termination due | | | | | | | | | | | Termination for | | to Death or | | Termination | | Change of | | | William B. Furr | | Cause | | Disability | | Without Cause | | Control | | | | | | | | | | | | | | | | | | | | | | | | Termination due | | | | | | | | | | | Termination for | | to Death or | | Termination | | Change of | | Stephen Thompson | | | Cause | | Disability | | Without Cause | | Control | | Accrued amounts | | $ | — | | $ | — | | $ | — | | $ | — | | | $ | — | | $ | — | | $ | — | | $ | — | | Cash payment | | | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | Cash severance (a) | | | — | | | — | | | 850,000 | | | 1,700,000 | | | | — | | | — | | | 1,050,000 | | | 2,100,000 | | Restricted stock units (b) | | | — | | | 103,559 | | | 103,559 | | | 627,504 | | | | — | | | 331,448 | | | 331,448 | | | 758,478 | | Welfare benefits | | | — | | | — | | | — | | | — | | | | — | | | 16,952 | | | 16,952 | | | 16,952 | | Total | | $ | — | | $ | 103,559 | | $ | 953,559 | | $ | 2,327,504 | | | $ | — | | $ | 348,400 | | $ | 1,398,400 | | $ | 2,875,430 | |
| (a) | (a)
| | Cash severance calculation if Mr. FurrThompson is terminated without cause is based upon the sum of: (i) Mr. Furr’sThompson’s annual base salary rate and (ii) an amount equal to annual incentive cash bonus paid to Mr. FurrThompson in respect of the calendar year immediately preceding the year of the date of termination. If his employment is terminated without cause upon a change of control, the cash severance calculation is based upon two times the sum of: (i) Mr. Furr’sThompson’s annual base salary rate and (ii) an amount equal to annual incentive cash bonus paid to Mr. FurrThompson in respect of the calendar year immediately preceding the year of the date of termination. |
| (b) | (b)
| | The RSUs vest ratably upon the death or disability of the participant or termination of the participant without cause. The foregoing assumes the death or disability or termination of the participant without cause on December 31, 2018.2020. If a change of control under the 2012 Equity Incentive Plan or the 2020 Equity Incentive Plan occurs and assuming participant is terminated without cause on the date of the change in control, all unvested RSUs vest upon such event, which for purposes of the foregoing assumes December 31, 2018. In each case, it is assumed the target award is achieved or utilized to calculate vesting of performance awards. The form of award governing a portion of the RSUs includes a non-solicitation provision that is triggered upon the participant’s termination. For additional information, see “—Incentive Plans.”
|
| | | | | | | | | | | | | | | | | | | Termination due | | | | | | | | | | Termination for | | to Death or | | Termination | | Change of | | Hill A. Feinberg | | Cause | | Disability | | Without Cause | | Control | | Accrued amounts | | $ | — | | $ | — | | $ | — | | $ | — | | Cash payment | | | — | | | — | | | — | | | — | | Cash severance | | | — | | | — | | | — | | | — | | Restricted stock units (a) | | | — | | | 105,096 | | | 105,096 | | | 842,450 | | Welfare benefits | | | — | | | — | | | — | | | — | | Total | | $ | — | | $ | 105,096 | | $ | 105,096 | | $ | 842,450 | |
| (a)
| | The RSUs vest ratably upon the death or disability of the participant or termination of the participant without cause. The foregoing assumes the death or disability or termination of the participant without cause on December 31, 2018. If a change of control under the 2012 Equity Incentive Plan occurs, all unvested RSUs vest upon such event, which for purposes of the foregoing assumes December 31, 2018.2020. In each case, it is assumed the target award is achieved or utilized to calculate vesting of performance awards. The form of award governing a portion of the RSUs includes a non-solicitation provision that is triggered upon the participant’s termination. For additional information, see “—Incentive Plans.”
|
| | | | | | | | | | | | | | | | | | | | Termination due | | | | | | | | | | | | | | to Death or | | | | | | | | | | | | | | Disability or by | | | | | | | | | | | Termination for | | Executive for any | | Termination | | Change of | | | Todd L. Salmans | | Cause | | Reason | | without cause | | Control | | | | | | | | | | | | | | | | | | | | | | | | Termination due | | | | | | | | | | | Termination for | | to Death or | | Termination | | Change of | | M. Bradley Winges | | | Cause | | Disability | | Without Cause | | Control | | Accrued amounts | | $ | — | | $ | — | | $ | — | | $ | — | | | $ | — | | $ | — | | $ | — | | $ | — | | Cash payment | | | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | Cash severance (a) | | | — | | | — | | | 1,575,000 | | | 3,150,000 | | | | — | | | — | | | 1,000,000 | | | 2,000,000 | | Restricted stock units (b) | | | — | | | 98,086 | | | 98,086 | | | 862,508 | | | | — | | | 2,664,738 | | | 2,664,738 | | | 3,314,295 | | Welfare benefits | | | — | | | — | | | — | | | — | | | | — | | | — | | | — | | | — | | Total | | $ | — | | $ | 98,086 | | $ | 1,673,086 | | $ | 4,012,508 | | | $ | — | | $ | 2,664,738 | | $ | 3,664,738 | | $ | 5,314,295 | |
| (a) | (a)
| | Cash severance calculation if Mr. SalmansWinges is terminated without cause is based upon the sum of: (i) Mr. Salmans’Winges’ annual base salary rate and (ii) an amount equal to annual incentive cash bonus paid to Mr. SalmansWinges in respect of the calendar year immediately preceding the year of the date of termination. If his employment is terminated without cause upon a change inof control, the cash severance calculation is based upon two times the sum of: (i) Mr. Salmans’Winges’s annual base salary rate and (ii) an amount equal to annual incentive cash bonus paid to Mr. SalmansWinges in respect of the calendar year immediately preceding the year of the date of termination. |
| (b) | (b)
| | 83,000 time-based RSUs vest ratably upon the death or disability of the participant or termination of the participant without cause. Remaining RSUs granted to Mr. Winges vest pro rata upon his death or disability or termination without cause. The foregoing assumes the death or disability or termination of the participant without cause on December 31, 2018.2020. If a change of control under the 2012 Equity Incentive Plan or the 2020 Equity Incentive Plan occurs and assuming participant is terminated without cause on the date of the change of control, all unvested RSUs vest upon such event, which for purposes of the foregoing assumes December 31, 2018. In each case, it is assumed the target award is achieved or utilized to calculate vesting of performance awards. The form of award governing a portion of the RSUs includes a non-solicitation provision that is triggered upon the participant’s termination. For additional information, see “—Incentive Plans.” |
| | | | | | | | | | | | | | | | | | Termination due | | | | | | | | | Termination for | | to Death or | | Termination | | Change of | Jerry L. Schaffner | | Cause | | Disability | | Without Cause | | Control | Accrued amounts (a) | | $ | 575,000 | | $ | 575,000 | | $ | 575,000 | | $ | — | Cash payment (b) | | | 2,536,685 | | | 2,536,685 | | | 2,536,685 | | | — | Cash severance (c) | | | — | | | — | | | 1,041,667 | | | — | Restricted stock units (d) | | | — | | | 88,439 | | | 88,439 | | | 725,895 | Welfare benefits | | | — | | | — | | | — | | | — | Total | | $ | 3,111,685 | | $ | 3,200,124 | | $ | 4,241,791 | | $ | 725,895 |
| (a)
| | Accrued Amounts calculation based upon the sum of: (i) Mr. Schaffner’s annual base salary through December 31, 2018, to the extent not already paid and not deferred; (ii) any annual bonus earned, to the extent not already paid and not deferred; (iii) any business expenses incurred that have not yet been reimbursed as of the date of termination; and (iv) any other amounts or benefits, including all unpaid and/or vested, nonforfeitable amounts owing or accrued to Mr. Schaffner.
|
| (b)
| | Cash Payments refers to a lump-sum cash payment that represents the amount, including interest thereon, Mr. Schaffner would have been entitled to receive under his prior employment agreement with PlainsCapital if his employment had been terminated.
|
| (c)
| | Cash Severance calculation based upon the sum of the average of Mr. Schaffner’s prior annual bonuses for each of the preceding three years plus his annual base salary.
|
| (d)
| | RSUs vest ratably upon the death or disability of the participant or termination of the participant without cause. The foregoing assumes the death or disability or termination of the participant without cause on December 31, 2018. If a change of control under the 2012 Equity Incentive Plan occurs, all unvested RSUs vest upon such event, which for purposes of the foregoing assumes December 31, 2018.2020. In each case, it is assumed the target award is achieved or utilized to calculate vesting of performance awards. The form of award governing a portion of the RSUs includes a non-solicitation provision that is triggered upon the participant’s termination. For additional information, see “—Incentive Plans.”
|
Incentive Plans Each of the incentive plans has a complex definition of “change in control.” Generally speaking under the 2012 Equity Incentive Plan and the 2020 Equity Incentive Plan, a change in control occurs if: (i) with certain exceptions, any person becomes the owner of 33% or more of the outstanding shares of our common stock or the combined voting power of our outstanding stock and other voting securities; (ii) a majority of the directors serving on our Board of Directors are replaced other than by new directors approved by at least two-thirds of the members of our Board of Directors; (iii) we are not the surviving company after a merger or consolidation or sale of all or substantially all of our assets; or (iv) with certain exceptions, our stockholders approve a plan of complete liquidation or dissolution. Awards granted through 2018 under our 2012 Equity Incentive Plan were “single trigger” awards, meaning that accelerated vesting occurs upon a change in control even if the award holder remains with us after the change in control, regardless of whether awards are assumed or substituted by the surviving company. In 2019, the Compensation Committee of
the Board of Directors adopted new forms of award agreements that provide for a “double trigger”, which requires termination within the six months preceding or twelve months following a change in control in order for the equity awards to vest in connection with a change in control. We believe the “double trigger” is in line with current practices of public companies. We believe a “double trigger” change in control provision is appropriate because it allows management to pursue all alternatives for us without undue concern for their own financial security. In the event of a change in control, with respect to awards granted pursuant to the 2012 Equity Incentive Plan prior to 2019: (i) all outstanding stock options and SARs will become fully vested and exercisable; (ii) all restrictions on any restricted stock, RSUs or other stock-based awards that are not subject to performance goals will become fully vested; and (iii) all restrictions on any restricted stock, RSUs, performance units or other stock-based awards that are subject to performance goals will be deemed to be fully achieved. For awards granted in 2019 and going forward (whether pursuant to the 2012 Equity Incentive Plan or the 2020 Equity Incentive Plan), awards only vest upon a change in control if the grantee is terminated within the six months preceding or the twelve months following a change in control. Accordingly, grantees will not receive any additional benefit if their employment continues following a change in control. In addition to acceleration of benefits upon a change in control event, the non-qualified stock option agreements pursuant to which all option awards are granted provide for acceleration of vesting upon the death of the option holder. No other rights of acceleration are provided for under the terms of the Company’s benefit plans. However, in 2015, we revised our form of award for time-based and performance-based RSUs to include a non-solicitation provision that lasts for twelve months following a participant’s termination for any reason. In the event of a breach of the non-solicitation provision, the participant’s RSUs granted under the form of award will immediately cease vesting and any unvested RSUs or vested RSUs that have not been converted into shares of common stock will be forfeited. In order to avoid ambiguity, in 2020, we removed the non-solicitation provisions from the form agreement for time-based and performance-based RSUs as a result of obtaining separate non-solicitation agreements from our employees. Co-CEOCEO Pay RatiosRatio
Item 402(u) of Regulation S-K, implementing a requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act, requires that we disclose a ratio that compares the annual total compensation of our median employee to that of each of our co-CEOs for 2017 and future years.CEO. In order to determine the median employee, we prepared a list of all employees as of December 31, 2018,2020, along with their gross income as reported on IRS form W-2 for 2018.2020. We included all employees, whether employed on a full-time, part-time, or seasonal basis. Gross income as reported on IRS form W-2 for 20182020 was annualized for those employees that were permanent employees but were not employed for the full year. No assumptions, adjustments or estimates were made with respect to total compensation. We believe that W-2 income is a consistently applied compensation measure because we do not widely distribute annual equity awards to employees. The annual compensation for 20182020 for Jeremy B. Ford, who served as our President and Co-ChiefChief Executive Officer, was $2,353,504. The annual compensation for 2018 for Alan B. White, our former Vice Chairman and Co-Chief Executive Officer, was $3,714,553.$3,314,008. The annual compensation for the median employee for 20182020 was $60,960.$80,048. The resulting ratios of Mr. Jeremy B. Ford’s and Mr. White’s pay to that of our median employee for 2018 were 39:1 and 61:1, respectively.2020 was 41:1. We believe executive pay must be internally consistent and equitable to motivate our employees to create stockholder value. We are committed to internal pay equity, and the Compensation Committee monitors the relationship between the pay our executive officers receive and the pay our non-managerial employees receive. Compensation Committee Interlocks and Insider Participation During fiscal year 2018,2020, directors Rhodes R. Bobbitt, W. Joris Brinkerhoff, William T. Hill, Jr., Andrew J. Littlefair and A. Haag Sherman served on the Compensation Committee. Mr. Brinkerhoff resigned as a member of the Board of Directors effective July 23, 2020. During fiscal year 2018: 2020: | ·
● | | none of the members of our Compensation Committee is, or has ever been, one of our officers or employees; |
| ·
● | | none of the members of our Compensation Committee had any relationships with the Company requiring disclosure under “Certain Relationships and Related Party Transactions”; |
| ·
● | | none of our executive officers served as a member of the compensation committee of another entity, one of whose executive officers served on our Compensation Committee; |
| ·
● | | none of our executive officers served as a director of another entity, one of whose executive officers served on our Compensation Committee; and |
| ·
● | | none of our executive officersMr. Jeremy B. Ford served as Chairman of the Board and a member of the compensation committee of another entity, one of whose executive officersCompensation Committee at First Acceptance Corporation. Mr. Russell served as onea director of our directors.
Hilltop and Chief Executive Officer of First Acceptance Corporation. Neither Messrs. Jeremy B. Ford or Russell serve on the Compensation Committee at Hilltop, which approves compensation of Hilltop’s executive officers. First Acceptance Corporation is not a reporting company under the Exchange Act. |
During 2018, each of2020, Mr. Jeremy B. Ford, Hilltop’s then Co-Chief Executive Officer and President Mr. White, Hilltop’s former Vice Chairman and Co-Chief Executive Officer and Mr. Feinberg, Chairman and Chief Executive Officer, of Hilltop Securities, served as a director of Hilltop. Hilltop’s Compensation Committee is comprised of independent directors, reviews and sets the compensation of each of Messrs.Mr. Jeremy B. Ford White and Feinberg and does not believe that these interlocksthis interlock pose any risks that are likely to have a material adverse effect on us. Securities Authorized for Issuance under Equity Compensation Plans
The following table sets forth information at December 31, 2018 with respect to compensation plans under which shares of our common stock may be issued.
| | | | | | | | Equity Compensation Plan Information
| | | | | | | | Number of securities
| | | | | | | | remaining available
| | | | | | | | for future issuance
| | | Number of securities
| | | | | under equity
| | | to be issued upon
| | Weighted-average
| | compensation plans
| | | exercise of
| | exercise price of
| | (excluding securities
| | | outstanding options,
| | outstanding options,
| | reflected in first
| Plan Category
| | warrants and rights
| | warrants and rights
| | column)
| Equity compensation plans approved by security holders*
| | —
| | $
| —
| | 1,246,880
| Equity compensation plans not approved by security holders
| | —
| | | —
| | —
| Total
| | —
| | $
| —
| | 1,246,880
|
*In September 2012, our stockholders approved the 2012 Equity Incentive Plan, which allows for the granting of nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights and other awards to employees of Hilltop, its subsidiaries and outside directors of Hilltop. In the aggregate, 4,000,000 shares of common stock may be delivered pursuant to awards granted under the 2012 Equity Incentive Plan. At December 31, 2018, 3,128,011 awards had been granted pursuant to the 2012 Equity Incentive Plan, while 374,891 awards were forfeited and are eligible for reissuance. All shares outstanding under the 2012 Equity Incentive Plan, whether vested or unvested, are entitled to receive dividends and to vote, unless forfeited. No participant in our 2012 Equity Incentive Plan may be granted awards in any fiscal year covering more than 1,250,000 shares of our common stock.
Delinquent Section 16(a) Beneficial Ownership Reporting Compliance Reports Section 16(a) of the Exchange Act requires officers, directors and persons who beneficially own more than ten percent of our stock to file initial reports of ownership and reports of changes in ownership with the SEC. Officers, directors and greater than ten percent beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of the copies furnished to usreports filed with the SEC and representations from our officers and directors, we believe that all Section 16(a) filing requirements for the year ended December 31, 2018,2020, applicable to our officers, directors and greater than ten percent beneficial owners were timely satisfied, except that (i) Mr. Bornemann, our Principal Accounting Officer, filedSobel, a director, failed to timely file two Forms 4, each reporting one late reporttransaction related to the vestinggranting of onean award for services provided during 2020, and (ii) Mr. Thompson, President and Chief Executive Officer of PrimeLending, failed to file a Form 3 and a Form 4 related to the corresponding withholdinggrant of sharesa time-based equity award during 2020. Mr. Thompson also failed to pay taxes.file a Form 4 in 2021 related to the grant of a time-based equity award. Mr. Lewis failed to file a timely Form 4 related to open market sales during 2021. Based on written representations from our officers and directors, we believe that allno Forms 5 for directors, officers and greater than ten percent beneficial owners that have beenwere required to be filed with the SEC are the only Forms 5 required to be filed for the period ended December 31, 2018.2020.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS General Transactions with related persons are governed by our General Code of Ethics and Business Conduct, which applies to all officers, directors and employees. This code covers a wide range of potential activities, including, among others, conflicts of interest, self-dealing and related party transactions. Related party transactions that would be required to be disclosed pursuant to federal securities laws must be reported to the Chief Executive Officer or General Counsel and are subject to approval by the Audit Committee of the Board of Directors. Waiver of the policies set forth in this code will only be permitted when circumstances warrant. Such waivers for directors and executive officers, or that provide a benefit to a director or executive officer, may be made only by the Board of Directors and must be promptly disclosed as required by applicable law or regulation. Absent a review and approval process in conformity with the applicable guidelines relating to the particular transaction under consideration, such arrangements are not permitted. The Company also has adopted the written Related Party Policy, which sets forth the Company’s policies and procedures for reviewing and approving transactions with related persons – namely, our directors, executive officers, their respective immediate family members and 5% stockholders. The transactions covered by the Related Party Policy include any financial transaction, arrangement or relationship in which the Company is a participant, the related person has or will have a direct or indirect material interest and the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year. After becoming aware of any transaction which may be subject to the Related Party Policy, the related person is required to report all relevant facts with respect to the transaction to the Chief Executive Officer or General Counsel of Hilltop. Upon determination by the Company’s legal department that a transaction requires review under the Related Party Policy, the material facts of the transaction and the related person’s interest in the transaction are provided to the Audit Committee. The transaction is then reviewed by the disinterested members of the Audit Committee, who determine whether approval of the transaction shall be granted. In reviewing a transaction, the Audit Committee considers facts and circumstances that it deems relevant to its determination, such as: management’s assessment of the commercial reasonableness of the transaction; the materiality of the related person’s direct or indirect interest in the transaction; whether the transaction may involve an actual, or the appearance of, a conflict of interest; and, if the transaction involves a director, the impact of the transaction on the director’s independence. Certain types of transactions are pre-approved in accordance with the terms of the Related Party Policy. These include transactions in the ordinary course of business involving financial products and services provided by, or to, the Company, including loans, provided such transactions are in compliance with the Sarbanes-Oxley Act of 2002, Federal Reserve Board Regulation O and other applicable laws and regulations. Hilltop Plaza Investment On July 31, 2018, HTH Diamond Hillcrest Land LLC, (“or Hillcrest Land LLC”)LLC, purchased approximately 1.7 acres of land in the City of University Park, Texas for $38.5 million. Hillcrest Land LLC is owned equally between Hilltop Investments I, LLC, a wholly owned entity of Hilltop, and Diamond Ground, LLC, an affiliate of Mr. Gerald J. Ford. Each of Hilltop Investments I, LLC and Diamond Ground, LLC contributed $19.3 million to Hillcrest Land LLC to complete the purchase. Trusts for which Jeremy B. Ford and the wife of Corey G. Prestidge are a beneficiary own 10.2% and 10.1%, respectively, of Diamond Ground, LLC. In connection with the purchase of the land, Hillcrest Land LLC entered into a 99-year ground lease of the land with three tenants-in-common: SPC Park Plaza Partners LLC, (“or Park Plaza LLC”),LLC, an unaffiliated entity which received an undivided 50% leasehold interest; HTH Hillcrest Project LLC, (“or HTH Project LLC”),LLC, a wholly owned subsidiary of Hilltop, which received an undivided 25% leasehold interest; and Diamond Hillcrest, LLC, (“or Diamond Hillcrest”),Hillcrest, an entity owned by Mr. Gerald J. Ford, which received an undivided 25% leasehold interest, (collectively,or collectively, the “Co-Owners”).Co-Owners. The ground lease is triple net. The base rent from the Co-Owners under the ground lease commences 18 months after the ground lease was signed at $1.8 million per year and increases 1.0% per year each January 1 thereafter. Concurrent with the ground lease, the Co-Owners entered into an agreement to purchase the improvements currently being constructed on the land, which is a mixed-use project containing a six-story building, (“or Hilltop Plaza”).Plaza. HTH Project LLC and Diamond Hillcrest each own an undivided 25% interest in Hilltop Plaza. Park Plaza LLC owns the remaining undivided 50% interest in
Hilltop Plaza. Park Plaza LLC has agreed to serve as the Co-Owner property manager under the Co-Owners Agreement; however, certain actions require unanimous approval of all Co-Owners. Hilltop Plaza will bewas funded through a $41.0 million construction loan from an unaffiliated third party bank, as well as cash contributions of $5.3 million from each of HTH Project LLC and Diamond Hillcrest. Hilltop and the Bank entered into leases for an aggregate of approximately 72,000a significant portion of the total 119,000 square feet of rentable corporate office space in Hilltop Plaza to serve as the headquarters for both companies. Affiliates of Mr. Gerald J. Ford also entered into leases for office space in the building. The two separate 129-month office and retail leases of Hilltop and the Bank, respectively, have combined total base rent of approximately $35 million with the first nine months of rent abated. Move-in is expected inHilltop Plaza has served as headquarters for both Hilltop and the fourth quarterBank since February 2020. These transactions were reviewed by the Audit Committee and approved by the disinterested members of 2019.the Board of Directors of Hilltop. Hilltop Sublease
On December 1, 2012, Hilltop entered into a sublease with Hunter’s Glen/Ford, Ltd., an affiliate of Gerald J. Ford, and the tenantChairman of the office space. Pursuant toBoard of Directors of Hilltop, is the sublease, until February 27, 2014,sole member of Diamond HTH Stock Company GP, LLC. Diamond HTH Stock Company GP LLC is the sole general partner of Diamond HTH Stock Company, LP and Mr. Gerald J. Ford is the sole limited partner of Diamond HTH Stock Company, LP. The sole general partner of Diamond A Financial, L.P. is Diamond HTH Stock Company, LP and Turtle Creek Revocable Trust is a 1% limited partner of Diamond A Financial, L.P. Diamond A Financial, L.P. owns 19.1% of the outstanding Hilltop leased 5,491 square feet for $219,640 annually, plus additional rent due under the base lease. On Februarycommon stock as of April 28, 2014, the parties amended the sublease to increase the square footage subleased to 6,902 square feet, increase the rent based on such additional square footage, and extend the term to July 31, 2018. Hilltop pays the same rate per square foot as Hunter’s Glen/Ford, Ltd. is required to pay under the base lease, as amended.
2021. Jeremy B. Ford, a director and the President and Co-ChiefChief Executive Officer of Hilltop, is the beneficiary of a trust that owns a 49% limited partnership interest in Diamond A Financial, L.P. Diamond A Financial, L.P. owns 16.2% of the outstanding Hilltop common stock as of April 29, 2019. He also is a director and the Secretary of Diamond A Administration Company, LLC, or Diamond A, an affiliate of Gerald J. Ford, the current Chairman of the Board of Directors of Hilltop and the beneficial owner of 16.2% of Hilltop common stock as of April 29, 2019. Diamond A is owned by Hunter’s Glen/Ford, Ltd., a limited partnership in which a trust for the benefit of Jeremy B. Ford is a 46% limited partner. The spouse of Corey G. Prestidge, Hilltop’s Executive Vice President, General Counsel and Secretary, is the beneficiary of a trust that also owns a 46% limited partnership interest in Hunter’s Glen/Ford, Ltd. and a trust that owns a 49% limited partnership interest in Diamond A Financial, L.P. Jeremy B. Ford is the son of Gerald J. Ford. Mr. Prestidge is the son-in-law of Gerald J. Ford. Accordingly, Messrs. Jeremy B. Ford and Prestidge are brothers-in-law. Employment of Certain Family Members
We currently employ, or during 2018 employed, certain family members of our officers and/or directors in the following capacities: Corey G. Prestidge, the brother-in-law of Jeremy B. Ford, our President and Chief Executive Officer, and the son-in-law of Gerald J. Ford, the Chairman of our Board, serves as Hilltop’s Executive Vice President, General Counsel and Secretary; Lee Ann White, the wife of Alan B. White, our former Vice Chairman and Co-Chief Executive Officer, formerly served as the Senior Vice President, Director of Public Relations of PlainsCapital; Logan Passmore, the son-in-law of Mr. White, serves as Commercial Relationship Manager of the Bank; Kale Salmans, the son of Todd Salmans, Chief Executive Officer of PrimeLending, serves as Manager, Strategic Sales of PrimeLending; Ty Tucker, the son-in-law of Mr. Salmans, serves as Project Manager, Joint Venture Strategy of PrimeLending; Robert Coke IV, the son-in-law of Mr. Salmans, serves as Manager, Appraisal Desk of PrimeLending. Pursuant to our employment arrangements with these individuals, during 2018, these individuals received total compensation for their respective services as employees as follows: Corey G. Prestidge $982,607, Lee Ann White $134,296, Logan Passmore $92,651, Kale Salmans $618,867, Ty Tucker $149,792 and Robert Coke IV $80,903.
Cowboys Stadium Suite In 2007, the Bank contracted with Cowboys Stadium, L.P., a company affiliated with the employer of Ms. AndersonJones and that is beneficially owned by Ms. AndersonJones and certain of her immediate family members, for the 20-year lease of a suite at Cowboys Stadium beginning in 2009. Pursuant to the lease agreement, the BankHilltop has agreed to pay Cowboys Stadium, L.P. annual payments of $500,000, subject to possible annual escalations, not to exceed 3% per year, beginning with the tenth year of the lease. Branch Construction
During 2018, the Bank utilized a company owned In 2019, that lease of suite was assigned to Hilltop by Mr. Lewis, Lee Lewis Construction, to construct a branch for the Bank. The Bank awardedHilltop paid $530,450 under this contract to Lee Lewis Construction following a bid process. During 2018, the Bank paid Lee Lewis Construction $4,138,880 to construct the Bank branch. The project was completedlease in the second half of 2018, and the Company expects to pay minimal trailing costs related to construction of the branch during 2019.2020.
During 2018, the Bank contracted with Lee Lewis Construction to construct a branch in Lubbock, Texas. The Bank awarded this contract to Lee Lewis Construction following a bid process. The contract provided for $1,585,000 in construction costs, and construction is expected to completed in the third quarter or 2019.
During 2018, the Bank contracted with Lee Lewis Construction to install a standalone interactive teller machine in Lubbock, Texas. The Bank awarded this contract to Lee Lewis Construction. The contract provided for $45,500 in construction costs.
Leases at The Star In 2016, the Bank contracted with Frisco HQ Operations, L.P. and Bluestar Frisco Retail L.P., each of which is affiliated with the employer of Ms. AndersonJones and beneficially owned by Ms. AndersonJones and certain of her immediate family members, for the 10-year lease of office space and a Bank branch. Following an initial rent abatement period, the leases provide for annual base rent of an aggregate of approximately $383,000, which increases on a yearly basis thereafter to a maximum annual base rent of an aggregate of approximately $433,000. Lee Lewis Construction During 2018, the Bank utilized a company owned by Mr. Lewis, Lee Lewis Construction, to construct a branch for the Bank. The Bank awarded this contract to Lee Lewis Construction following a bid process. This project was completed in the second half of 2018, and the Bank paid Lee Lewis Construction $5,883,629 for construction of this branch. During 2018, the Bank contracted with Lee Lewis Construction to construct a branch in Lubbock, Texas. The Bank awarded this contract to Lee Lewis Construction following a bid process. This project was completed in December 2019, and the Bank paid Lee Lewis Construction $1,638,735 for the construction of this branch. During 2018, the Bank contracted with Lee Lewis Construction to install a standalone interactive teller machine in Lubbock, Texas. The Bank awarded this contract to Lee Lewis Construction. This project was completed in March 2019, and the Bank paid Lee Lewis Construction $45,500 for this installation.
During 2019, the Bank contracted with Lee Lewis Construction to renovate a branch in Lubbock, Texas. The Bank awarded this contract to Lee Lewis Construction following a bid process. This project was completed in November 2019, and the Bank paid Lee Lewis Construction $925,617 for the renovation of this branch. On August 10, 2020, Hilltop Securities contracted with Lee Lewis Construction to construct tenant improvements at its new headquarters in Dallas, Texas. Hilltop Securities awarded this contract to Lee Lewis Construction following a bid process. This project is expected to be completed in June 2021 at an anticipated aggregate cost of $14.3 million. DTF Holdings, LLC Mr. Sobel, a director nominee,of Hilltop, is the managing member of DTF Holdings, LLC. DTF Holdings, LLC has provided investment management services to the Company and its subsidiaries since June 2009 pursuant to an Investment Management Services Agreement. In accordance with the Investment Management Services Agreement, DTF Holdings, LLC is paid an annual fee of $425,000 and reimbursed for its out-of-pocket expenses related to such services. The Investment Management Services Agreement was terminated on June 30, 2020 in connection with sale of National Lloyds Corporation. Mr. Sobel became Chairman of Hilltop Securities in July 2019. Beginning in July 2020, Hilltop Securities pays Mr. Sobel annual fees of $425,000 for his services as Chairman of Hilltop Securities. DTF Holdings, LLC also provides investment management services to other entities related to Gerald J. Ford. IndebtednessEmployment of Certain Family Members
We currently employ, or during 2020 employed, a single family member of our officers and/or directors in the following capacity: Corey G. Prestidge, the brother-in-law of Jeremy B. Ford, our President and Chief Executive Officer, and the son-in-law of Gerald J. Ford, the Chairman of our Board, serves as Hilltop’s Executive Vice President, General Counsel and Secretary. Pursuant to our employment arrangement with this individual, during 2020, Corey G. Prestidge received total compensation for his services as employee of $1,342,790. Indebtedness The Bank has had, and may be expected to have in the future, lending relationships in the ordinary course of business with our directors and executive officers, members of their immediate families and affiliated companies in which they are employed or in which they are principal equity holders. In our management’s opinion, our prior or current lending relationships with these persons were made in the ordinary course of business and on substantially the same terms, including interest rates, collateral and repayment terms, as those prevailing at the time for comparable transactions with persons not related to us and do not involve more than normal collection risk or present other unfavorable features.
PROPOSAL TWO — ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION Pursuant to Section 14A(a)(1) of the Exchange Act, we are asking stockholders to cast an advisory vote on the compensation of our named executive officers disclosed in “Management – Compensation Discussion and Analysis” and “Management – Executive Compensation” sections of this Proxy Statement. At our 2017 annual meeting of stockholders, our stockholders voted in favor of a proposal to hold an advisory vote on executive compensation each year. While this vote is a non-binding advisory vote, we value the opinions of stockholders and will consider the outcome of the vote when making future compensation decisions. An advisory vote to determine the frequency of future advisory votes on executive compensation will be conducted at our annual meeting held in 2023. We believe that our executive compensation programs effectively align the interests of our named executive officers with those of our stockholders by tying compensation to performance. This annual vote on this matter is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the policies and practices described in this Proxy Statement. The vote is advisory and, therefore, not binding on the Company, the Board of Directors or the Compensation Committee of the Board of Directors. We are asking our stockholders to indicate their support for this Proposal Two and the compensation paid to our named executive officers as disclosed commencing on page 2427 of this Proxy Statement by voting FOR, on ana non-binding advisory basis, the following resolution: “NOW, THEREFORE, BE IT RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to the named executive officers of the Company, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and the narrative discussion related thereto.” Vote Necessary to Approve, on ana Non-Binding Advisory Basis, Executive Compensation The affirmative vote of a majority of the votes cast on the matter is required to approve, on ana non-binding advisory basis, our executive compensation. The Compensation Committee of the Board of Directors will review the results of this matter and will take the results into account in making future determinations concerning executive compensation. For purposes of the non-binding advisory vote on executive compensation, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for purposes of determining a quorum. | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE
APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE
APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
PROPOSAL THREE — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP served as our independent registered public accounting firm during 20182020 and has been selected to serve in that capacity for 2019,2021, unless the Audit Committee of the Board of Directors subsequently determines that a change is desirable. While stockholder ratification is not required for the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm, the selection is being submitted for ratification at the Annual Meeting, solely with a view toward soliciting our stockholders’ opinion. This opinion will be taken into consideration by the Audit Committee in its future deliberations. A representative of PricewaterhouseCoopers LLP is expected to be at our Annual Meeting to respond to appropriate questions and, if PricewaterhouseCoopers LLP desires, to make a statement. Vote Necessary to Ratify the Appointment The appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 20192021 will be ratified if this proposal receives the affirmative vote of a majority of the votes cast on the matter. With respect to this proposal, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for purposes of determining a quorum. Under applicable rules, a broker will have the authority to vote on this proposal in the absence of instructions from the beneficial owner of the relevant shares. Report of the Audit Committee The Audit Committee of the Board of Directors of Hilltop Holdings Inc. currently consists of three directors and operates under a written charter adopted by the Board of Directors. Hilltop considers all members of the Audit Committee to be independent as defined by the applicable NYSE listing standards and SEC regulations. Management is responsible for Hilltop’s internal controls and the financial reporting process. PricewaterhouseCoopers LLP, Hilltop’s independent registered public accounting firm, is responsible for performing an independent audit of Hilltop’s consolidated financial statements in accordance with generally accepted auditing standards. The Audit Committee’s responsibility is to monitor and oversee the financial reporting process. In this context, the Audit Committee reviewed and discussed with management and PricewaterhouseCoopers LLP the audited financial statements for the year ended December 31, 2018,2020, management’s assessment of the effectiveness of the Company’s internal control over financial reporting and PricewaterhouseCoopers LLP’s evaluation of the Company’s internal control over financial reporting. The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters that are required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, issued bythe applicable requirements of the Public Company Accounting Oversight Board.Board and the SEC. The Audit Committee received from PricewaterhouseCoopers LLP the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board, in Rule 3526, and has discussed with PricewaterhouseCoopers LLP the issue of its independence from the Company. The Audit Committee also concluded that PricewaterhouseCoopers LLP’s provision of audit and non-audit services to the Company and its affiliates is compatible with PricewaterhouseCoopers LLP’s independence. Based upon the Audit Committee’s review of the audited consolidated financial statements and its discussion with management and PricewaterhouseCoopers LLP noted above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.2020. This report has been furnished by the members of the Audit Committee. | | | | | Charles R. Cummings (Chairman) | | Tracy A. Bolt | | J. Markham Green |
Independent Auditor’s Fees For the fiscal years ended December 31, 20182020 and 2017,2019, the total fees paid to our independent registered public accounting firm, PricewaterhouseCoopers LLP, were as follows: | | | | | | | | | | Fiscal Year Ended | | | | 2018 | | 2017 | | Audit Fees | | $ | 6,356,200 | | $ | 5,160,100 | | Audit-Related Fees | | | 391,500 | | | 261,000 | | Tax Fees | | | — | | | — | | All Other Fees | | | 2,700 | | | 2,700 | | Total | | $ | 6,750,400 | | $ | 5,423,800 | |
Audit Fees
Represents fees billed for the audits of our consolidated financial statements and effectiveness of internal control over financial reporting as of and for the years ended December 31, 2018 and 2017, reviews of our interim financial statements included in the Company’s Quarterly Reports on Form 10-Q, statutory and regulatory audits and related services required for certain of our subsidiaries, and consultations related to miscellaneous SEC and financial reporting matters.
| | | | | | | | | | Fiscal Year Ended | | | | 2020 | | 2019 | | Audit Fees | | $ | 6,097,000 | | $ | 5,792,550 | | Audit-Related Fees | | | In 2018 and 2017 these fees primarily related to attestation reports required under various services agreements. 1,270,750
| | | 638,000 | | Tax Fees | | | No tax fees were incurred during 2018 or 2017. —
| | | — | | All Other Fees | | | In 2018 and 2017, these fees related to an annual renewal of software licenses for accounting research software.2,700
| | | Audit Committee Pre-Approval Policy2,700
| | In accordance with applicable laws and regulations, the Audit Committee reviews and pre-approves any non-audit services to be performed by PricewaterhouseCoopers LLP to ensure that the work does not compromise its independence in performing its audit services. The Audit Committee also reviews and pre-approves all audit services. In some cases, pre-approval is provided by the full committee for up to a year, and relates to a particular category or group of services and is subject to a specific budget. In other cases, the Chairman of the Audit Committee has the delegated authority from the committee to pre-approve additional services, and such pre-approvals are then communicated to the full Audit Committee. The Audit Committee pre-approved all fees noted above for 2018 and 2017.Total
| | The pre-approval policy contains a de minimis provision that operates to provide retroactive approval for permissible non-audit services under certain circumstances. No services were provided by PricewaterhouseCoopers LLP during either 2018 or 2017 that fell under this provision.$
| 7,370,450 | | $ | 6,433,250 | |
Audit Fees Represents fees billed for the audits of our consolidated financial statements and effectiveness of internal control over financial reporting as of and for the years ended December 31, 2020 and 2019, reviews of our interim financial statements included in the Company’s Quarterly Reports on Form 10-Q, audits and related services required for certain of our subsidiaries, and consultations related to miscellaneous SEC and financial reporting matters. Audit-Related Fees In 2020 and 2019 these fees primarily related to procedures associated with recently issued accounting standards and attestation reports required under various services agreements and statutory and regulatory requirements. Tax Fees No tax fees were incurred during 2020 or 2019. All Other Fees In 2020 and 2019, these fees related to an annual renewal of software licenses for accounting research software. Audit Committee Pre-Approval Policy In accordance with applicable laws and regulations, the Audit Committee reviews and pre-approves any non-audit services to be performed by PricewaterhouseCoopers LLP to ensure that the work does not compromise its independence in performing its audit services. The Audit Committee also reviews and pre-approves all audit services. In some cases, pre-approval is provided by the full committee for up to a year, and relates to a particular category or group of services and is subject to a specific budget. In other cases, the Chairman of the Audit Committee has the delegated authority from the committee to pre-approve additional services, and such pre-approvals are then communicated to the full Audit Committee. The Audit Committee pre-approved all fees noted above for 2020 and 2019. The pre-approval policy contains a de minimis provision that operates to provide retroactive approval for permissible non-audit services under certain circumstances. No services were provided by PricewaterhouseCoopers LLP during either 2020 or 2019 that fell under this provision. | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR 2019. STOCKHOLDER PROPOSALS FOR 2020
Stockholder proposals intended to be presented at our 2020
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STOCKHOLDER PROPOSALS FOR 2022 Stockholder proposals intended to be presented at our 2022 Annual Meeting of Stockholders pursuant to Rule 14a-8 under the Exchange Act must be received by us at our principal executive offices no later than 5:00 p.m., Dallas, Texas local time, on February 8, 2022 and must otherwise comply with the requirements of Rule 14a-8 in order to be considered for inclusion in the 2022 Proxy Statement and proxy. However, pursuant to such rule, if the 2022 Annual Meeting is not held within 30 days of July 22, 2022, then a stockholder proposal submitted for inclusion in our Proxy Statement for the 2022 Annual Meeting must be received by us a reasonable time before we begin to print and mail our Proxy Statement for the 2022 Annual Meeting. In order for director nominations and proposals of stockholders made outside the processes of Rule 14a-8 under the Exchange Act to be considered “timely” for purposes of Rule 14a-4(c) under the Exchange Act and pursuant to our current bylaws, the nomination or proposal must be received by us at our principal executive offices not before December 30, 2021, and not later than 5:00 p.m. Dallas, Texas local time, on January 29, 2022; provided, however, that in the event that the date of the 2022 annual meeting is advanced by more than 30 days or delayed by more than 60 days from July 22, 2022, notice by the stockholder in order to be timely must be received no earlier than the 120th day prior to the date of the 2022 annual meeting and not later than 5:00 p.m. Dallas, Texas local time, on the later of the 90th day prior to the date of the 2022 annual meeting or, if the first public announcement of the 2022 Annual Meeting is less than 100 days prior to the date of the 2022 Annual Meeting, the 10th day following the day on which public announcement of the date of the 2022 annual meeting is first made. Stockholders are advised to review our charter and bylaws, which contain additional requirements with respect to advance notice of stockholder proposals and director nominations, copies of which are available without charge upon request to our corporate Secretary at the address listed under “Questions” below. OTHER MATTERS Our Board of Directors knows of no other matters that have been submitted for consideration at this Annual Meeting. If any other matters properly come before our stockholders at this Annual Meeting, the persons named on the enclosed proxy card intend to vote the shares they represent in their discretion. MULTIPLE STOCKHOLDERS SHARING ONE ADDRESS In accordance with Rule 14a-3(e)(1) under the Exchange Act, one set of proxy materials will be delivered to two or more stockholders who share an address, unless the Company has received contrary instructions from one or more of the stockholders. The Company will deliver promptly upon written or oral request a separate copy of the proxy materials to a stockholder at a shared address to which a single copy of the proxy materials was delivered. Requests for additional copies of the proxy materials, and requests that in the future separate proxy materials be sent to stockholders who share an address, should be directed by writing to Investor Relations, Hilltop Holdings Inc., 6565 Hillcrest Avenue, Dallas, Texas 75205, or by calling (214) 855-2177. In addition, stockholders who share a single address but receive multiple copies of the proxy materials may request that in the future they receive a single copy by contacting the Company at the address and phone number set forth in the prior sentence. ANNUAL REPORT A COPY OF OUR ANNUAL REPORT IS INCLUDED WITH THIS PROXY STATEMENT BUT SHALL NOT BE DEEMED TO BE SOLICITATION MATERIAL. A COPY OF THIS PROXY STATEMENT AND OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 ALSO IS AVAILABLE WITHOUT CHARGE FROM OUR COMPANY WEBSITE AT WWW.HILLTOP-HOLDINGS.COM OR UPON WRITTEN REQUEST TO: INVESTOR RELATIONS, HILLTOP HOLDINGS INC., 6565 HILLCREST AVENUE, DALLAS, TEXAS 75205.
QUESTIONS If you have questions or need more information about the Annual Meeting, you may write to the corporate Secretary at the following address of our principal executive office: Corporate Secretary Hilltop Holdings Inc. 6565 Hillcrest Avenue Dallas, Texas 75205 You may also call us at (214) 855-2177. We also invite you to visit our website at www.hilltop-holdings.com.
6565 Hillcrest Avenue Dallas, Texas 75205 Telephone: (214) 855-2177 Facsimile: (214) 855-2173
| VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on July 21, 2021 for shares held directly and by 11:59 P.M. Eastern Time on July 19, 2021 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. HILLTOP HOLDINGS INC. 6565 HILLCREST AVENUE DALLAS, TX 75205 ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on July 21, 2021 for shares held directly and by 11:59 P.M. Eastern Time on July 19, 2021 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. SHAREHOLDER MEETING REGISTRATION To vote and/or attend the meeting, go to the "Attend a Meeting" link at www.proxyvote.com. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D53756-P57885 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. HILLTOP HOLDINGS INC. The Board of Directors recommends you vote FOR the following: For Withhold For All AllAllExcept To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. 1. Election of Directors Nominees: ! ! ! 01) 02) 03) 04) 05) 06) 07) 08) 09) 10) Rhodes R. Bobbitt Tracy A. Bolt J. Taylor Crandall Charles R. Cummings Hill A. Feinberg Gerald J. Ford Jeremy B. Ford J. Markham Green William T. Hill, Jr. Charlotte Jones 11) Lee Lewis 12) Andrew J. Littlefair 13) Tom C. Nichols 14) W. Robert Nichols, III 15) Kenneth D. Russell 16) A. Haag Sherman 17) Jonathan S. Sobel 18) Robert C. Taylor, Jr. 19) Carl B. Webb For ! ! Against ! ! Abstain ! ! The Board of Directors recommends you vote FOR proposals 2 and 3. 2. Non-binding advisory vote to approve executive compensation. 3. Ratification of the appointment of PricewaterhouseCoopers LLP as Hilltop Holdings Inc.'s independent registered public accounting firm for the 2021 fiscal year. The proxies are authorized to vote in their discretion on such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
| Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice of Annual Meeting, Proxy Statement and Annual Report for the year ended December 31, 2020 are available at www.proxyvote.com. D53757-P57885 HILLTOP HOLDINGS INC. Annual Meeting of Stockholders July 22, 2021 10:00 AM This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Corey G. Prestidge and Jeremy B. Ford, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of HILLTOP HOLDINGS INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 AM, Dallas, Texas local time on January 26, 2020July 22, 2021, at 6565 Hillcrest Avenue, 5th floor, Dallas, TX 75205, and must otherwise complyany adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the requirementsrecommendations of Rule 14a-8 in orderthe Board of Directors. Continued and to be considered for inclusion in the 2020 Proxy Statement and proxy. However, pursuant to such rule, if the 2019 Annual Meeting is not held within 30 days of July 25, 2019, then a stockholder proposal submitted for inclusion in our Proxy Statement for the 2019 Annual Meeting must be received by us a reasonable time before we begin to print and mail our Proxy Statement for the 2019 Annual Meeting. In order for director nominations and proposals of stockholders made outside the processes of Rule 14a-8 under the Exchange Act to be considered “timely” for purposes of Rule 14a-4(c) under the Exchange Act and pursuant to our current bylaws, the nomination or proposal must be received by us at our principal executive offices not before January 2, 2020, and not later than 5:00 p.m. Dallas, Texas local time,signed on February 1, 2020; reverse sideprovided, however, that in the event that the date of the 2020 annual meeting is advanced by more than 30 days or delayed by more than 60 days from July 25, 2020, notice by the stockholder in order to be timely must be received no earlier than the 120th day prior to the date of the 2020 annual meeting and not later than 5:00 p.m. Dallas, Texas local time, on the later of the 90th day prior to the date of the 2020 annual meeting or, if the first public announcement of the 2019 Annual Meeting is less than 100 days prior to the date of the 2019 Annual Meeting, the 10th day following the day on which public announcement of the date of the 2020 annual meeting is first made. Stockholders are advised to review our charter and bylaws, which contain additional requirements with respect to advance notice of stockholder proposals and director nominations, copies of which are available without charge upon request to our corporate Secretary at the address listed under “Questions” below.
OTHER MATTERS
Our Board of Directors knows of no other matters that have been submitted for consideration at this Annual Meeting. If any other matters properly come before our stockholders at this Annual Meeting, the persons named on the enclosed proxy card intend to vote the shares they represent in their discretion.
MULTIPLE STOCKHOLDERS SHARING ONE ADDRESS
In accordance with Rule 14a-3(e)(1) under the Exchange Act, one set of proxy materials will be delivered to two or more stockholders who share an address, unless the Company has received contrary instructions from one or more of the stockholders. The Company will deliver promptly upon written or oral request a separate copy of the proxy materials to a stockholder at a shared address to which a single copy of the proxy materials was delivered. Requests for additional copies of the proxy materials, and requests that in the future separate proxy materials be sent to stockholders who share an address, should be directed by writing to Investor Relations, Hilltop Holdings Inc., 2323 Victory Avenue, Suite 1400, Dallas, Texas 75219, or by calling (214) 855-2177. In addition, stockholders who share a single address but receive multiple copies of the proxy materials may request that in the future they receive a single copy by contacting the Company at the address and phone number set forth in the prior sentence.
ANNUAL REPORT
A COPY OF OUR ANNUAL REPORT IS INCLUDED WITH THIS PROXY STATEMENT BUT SHALL NOT BE DEEMED TO BE SOLICITATION MATERIAL. A COPY OF THIS PROXY STATEMENT AND OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018 ALSO IS AVAILABLE WITHOUT CHARGE FROM OUR COMPANY WEBSITE AT WWW.HILLTOP-HOLDINGS.COM OR UPON WRITTEN REQUEST TO: INVESTOR RELATIONS, HILLTOP HOLDINGS INC., 2323 VICTORY AVENUE, SUITE 1400, DALLAS, TEXAS 75219.
QUESTIONS
If you have questions or need more information about the Annual Meeting, you may write to the corporate Secretary at the following address of our principal executive office:
Corporate Secretary
Hilltop Holdings Inc.
2323 Victory Avenue, Suite 1400
Dallas, Texas 75219
You may also call us at (214) 855-2177. We also invite you to visit our website at www.hilltop-holdings.com.
2323 Victory Avenue, Suite 1400
Dallas, Texas 75219
Telephone: (214) 855-2177
Facsimile: (214) 855-2173
| VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. SHAREHOLDER MEETING REGISTRATION To vote and/or attend the meeting, go to the “Register for Meeting” link at www.proxyvote.com. HILLTOP HOLDINGS INC. 2323 VICTORY AVENUE, 14TH FLOOR DALLAS, TX 75219 TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E48179-P10394 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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| Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice of Annual Meeting, Proxy Statement and Annual Report for the year ended December 31, 2018 are available at www.proxyvote.com. E48180-P10394
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