BOK Financial DEF 14A 2010
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
BOK FINANCIAL CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
March 18, 2010
To Each Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of BOK Financial Corporation to be held this year in the Tulsa Room on the ninth floor of the Bank of Oklahoma Tower, One Williams Center, Tulsa, Oklahoma on Tuesday, April 27, 2010, at 11:00 a.m. local time. Details of the business to be conducted at the annual meeting are given in the attached Notice of Annual Meeting and Proxy Statement. Also enclosed is our Annual Report to Shareholders, covering the fiscal year ended December 31, 2009.
We hope that you will be able to attend this meeting, but all shareholders, whether or not they expect to attend the meeting, are requested to complete, date and sign the enclosed proxy and return it in the enclosed envelope as promptly as possible.
We look forward to seeing you at the meeting.
IF YOU PLAN TO ATTEND THE 2010 ANNUAL MEETING OF SHAREHOLDERS OF BOK FINANCIAL CORPORATION, PLEASE TAKE NOTE OF THE FOLLOWING: Due to security measures in place at the Bank of Oklahoma Tower, it will be necessary for you to check in at the security desk on the plaza level of the Tower. You will be required to provide identification to receive a visitor pass.
TABLE OF CONTENTS
BOK FINANCIAL CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on April 27, 2010
Notice is hereby given that the Annual Meeting of Shareholders of BOK Financial Corporation (the Company or BOK Financial), an Oklahoma corporation, will be held in the Tulsa Room on the ninth floor of the Bank of Oklahoma Tower, One Williams Center, Tulsa, Oklahoma on April 27, 2010, at 11:00 a.m. local time, for the following purposes:
The meeting may be adjourned from time to time and, at any reconvened meeting, action with respect to the matters specified in this notice may be taken without further notice to shareholders unless required by the Bylaws.
The Board recommends that shareholders vote FOR (i) the director nominees named in the accompanying proxy statement, (ii) the approval of the Amended and Restated BOK Financial Corporation 2003 Executive Incentive Plan, and (iii) the ratification of Ernst & Young LLP as the Companys independent auditor for the fiscal year ending December 31, 2010.
Only shareholders of record at the close of business on March 1, 2010, shall be entitled to receive notice of, and to vote at, the annual meeting. A complete list of shareholders entitled to vote will be available for inspection at our offices, Bank of Oklahoma Tower, One Williams Center, Tulsa, Oklahoma 74172.
March 18, 2010
BOK FINANCIAL CORPORATION
Bank of Oklahoma Tower
Tulsa, Oklahoma 74172
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
To be held April 27, 2010
The enclosed proxy is solicited on behalf of the Board of Directors of BOK Financial Corporation for use at our annual meeting of shareholders. The annual meeting will be held on Tuesday, April 27, 2010, at 11:00 a.m. local time in the Tulsa Room on the ninth floor of the Bank of Oklahoma Tower, One Williams Center, Tulsa, Oklahoma.
These proxy materials will be mailed on or about March 18, 2010 to holders of record of common stock as of the close of business on March 1, 2010.
Voting by Proxy
If you are the record holder of your shares (shares owned in your own name and not through a bank or brokerage firm), you may vote by phone, over the Internet, by mail, or in person at the meeting. We encourage you to vote by phone, mail or on the Internet even if you plan to attend the meeting.
If not revoked, your proxy will be voted at the annual meeting in accordance with your instructions marked on the proxy card. If you fail to mark your proxy with instructions, your proxy will be voted in accordance with the recommendations of the Board of Directors: FOR the election of the sixteen (16) nominees for director listed in this Proxy Statement, FOR the approval of the Amended and Restated BOK Financial Corporation 2003 Executive Incentive Plan and FOR the ratification of Ernst & Young, LLP as the Companys independent auditor for the fiscal year ending December 31, 2010. If you are voting shares held in the BOK Financial Thrift Plan and you fail to mark your proxy with instructions, your shares will be voted by the Trustee of the Thrift Plan in the same ratio as those shares credited to the account of the Thrift Plan members who do give instructions to the Trustee.
If you hold your shares in street name (shares held in the name of a bank or broker on a persons behalf), you must vote by following the instructions on the form that you receive from your broker or nominee. Without your instructions, your broker or nominee is permitted to use its own discretion and vote your shares on certain routine matters (such as Item 3 ratifying the selection of the auditor), but is not permitted to use discretion and vote your shares on non-routine matters (such as Items 1 and 2). Prior to 2010, the election of directors was considered a routine matter, but starting this year, brokers are no longer permitted to vote your shares for the election of directors, and those votes will constitute broker non-votes. Therefore, we urge you to give voting instructions to your broker on all three voting items.
As to any other matter that may be properly brought before the annual meeting, your proxy will be voted as the Board of Directors may recommend. If the Board of Directors makes no recommendation, your proxy will be voted as the proxy holder named in your proxy card deems advisable. The Board of Directors does not know of any other matter that is expected to be presented for consideration at the annual meeting.
Any shareholder executing a proxy retains the right to revoke it any time prior to exercise at the annual meeting. A proxy may be revoked by (i) delivery of written notice of revocation to Frederic Dorwart, Secretary, at 124 East Fourth Street, Tulsa, Oklahoma 74103, (ii) execution and delivery of a later proxy to the address indicated on the proxy card, or (iii) voting the shares in person at the annual meeting. If not revoked, all shares represented by properly executed proxies will be voted as specified therein.
Voting and Quorum Requirements at the Meeting
Only holders of shares of common stock at the close of business on March 1, 2010, (the record date) are entitled to notice of and to vote at the annual meeting. On the record date, there were 68,796,939 shares of common stock entitled to vote.
You will have one vote for each share of common stock held by you on the record date.
In order to have a meeting it is necessary that a quorum be present. The presence in person or by proxy of the holders of a majority of the outstanding shares of common stock is necessary to constitute a quorum at the annual meeting. Abstentions and broker non-votes will be counted for purposes of determining the presence or absence of a quorum. Abstentions and broker non-votes will not be counted as having voted either for or against a proposal.
The affirmative vote of the holders of a majority of the shares present or represented at the meeting in which a quorum is present that actually vote for or against the matter is required for approval of all matters other than election of directors. Directors are elected by a majority vote, meaning that in uncontested elections a nominee for director will be elected to the Board if the number of votes cast FOR the nominees election exceeds the number of votes cast AGAINST that nominees election.
George B. Kaiser currently owns approximately 61.2% of the outstanding common stock and plans to vote in person at the meeting.
Solicitation of Proxies
We are paying for all our costs incurred in soliciting proxies for the annual meeting. In addition to solicitation by mail, we may use our directors, officers and regular employees to solicit proxies by telephone or otherwise. These personnel will not be specifically compensated for these services. We will pay persons holding shares of common stock for the benefit of others, such as nominees, brokerage houses, banks, and other fiduciaries, for the expense of forwarding solicitation materials to the beneficial owner.
Our Annual Report to Shareholders, covering the fiscal year ended December 31, 2009, including audited financial statements, is enclosed. No parts of the Annual Report are incorporated in this Proxy Statement or are deemed to be a part of the material for the solicitation of proxies.
Principal Shareholders of the Company
To the extent known to the Board of Directors of the Company, as of March 1, 2010, the only shareholders of the Company having beneficial ownership of more than 5% of the shares of common stock of the Company are as set forth below:
Security Ownership of Certain Beneficial Owners and Management
As of March 1, 2010, there were 68,796,939 shares of common stock issued and outstanding. The following table sets forth, as of March 1, 2010, the beneficial ownership of common stock of BOK Financial, by each director and nominee, the chief executive officer (Mr. Lybarger), the chief financial officer (Mr. Nell), and the three other executive officers named in the Summary Compensation Table appearing at page 37, and, as a group, all such persons and other executive officers not named in the table.
ELECTION OF DIRECTORS
Nominees and Vote Required to Elect Nominees
A board of sixteen (16) directors is to be elected at the annual meeting. The nominees for director who receive a greater number of shares voting FOR their election than AGAINST shall be elected as directors. You may vote the number of shares of common stock you own for up to sixteen (16) persons. Unless you otherwise instruct by marking your proxy card, the proxy holders will vote the proxies received by them FOR the election of each of the sixteen (16) nominees named below, unless you hold your shares in street name, in which case your broker is not permitted to use its discretion and those votes will constitute broker non-votes.
If at the time of the annual meeting any of the nominees is unwilling or unable to serve, all proxies received will be voted in favor of the remainder of those nominated and for such substitute nominees, if any, as shall be designated by the board and nominated by any of the proxies named in the enclosed proxy form. We have no reason to believe that any of the nominees will be unable or unwilling to serve if elected.
Term of Office
The term of office of each person elected as a director will continue until the next annual meeting of shareholders or until his or her successor has been elected and qualified.
There are no family relationships by blood, marriage or adoption between any director or executive officer of the company and any other director or executive officer of the company.
Information about Nominees
Certain information concerning the nominees to the Board of Directors of the company is set forth below based on information supplied by the nominees. All information is as of March 1, 2010. All references in this Proxy Statement to BOK shall mean Bank of Oklahoma, National Association, and all references to BOT shall mean Bank of Texas, National Association, both of which are banking subsidiaries of BOK Financial Corporation.
The Board of Directors recommends that you vote FOR the sixteen nominees.
APPROVAL OF THE AMENDED AND RESTATED BOK FINANCIAL CORPORATION
2003 EXECUTIVE INCENTIVE PLAN
Section 162(m) of the Internal Revenue Code. Section 162(m) of the Internal Revenue Code generally limits to $1 million the amount that a publicly-held company is allowed to deduct each year for the compensation paid to each of the corporations chief executive officer and three most highly compensated executive officers other than the chief financial officer. However, performance-based compensation is not subject to the limit. In order to qualify as performance-based compensation, payments must be computed on the basis of an objective, performance-based standard determined by a committee that consists solely of two or more voting outside directors and the material terms under which the compensation is to be paid, including the performance goals, must be disclosed to and approved by the shareholders.
Independent Compensation Committee. In December 2002, the Board of Directors established an Independent Compensation Committee to administer a performance-based compensation plan for senior executives as required by the provisions of Section 162(m). The Independent Compensation Committee created a performance-based compensation plan called the 2003 Executive Incentive Plan which Company shareholders approved in 2003 (the Executive Incentive Plan).
Summary of the Executive Incentive Plan. Performance-based compensation awarded pursuant to the Executive Incentive Plan consists of annual and long term incentive compensation. The chief executive officer, executives who report directly to the chief executive officer, and other selected officers approved by the Independent Compensation Committee may participate in the Plan. A participant may earn (i) an annual incentive equal to a specified percentage of annual salary paid in cash, options and/or performance shares and (ii) long term incentive compensation payable in performance shares and/or stock options. Performance goals are based on the Companys earnings per share growth compared to peers and business unit performance. The maximum annual incentive compensation allowed under the Plan to any one executive is $2,000,000. The maximum restricted shares and stock options which may be issued annually to any one executive is 60,000 and 200,000 respectively. The exercise price for stock options awarded pursuant to the Plan is the fair market value of the Companys common stock on the date the stock options are granted. For a detailed description of annual and long term incentives and other terms of the Plan, see page 29, Components of Executive Compensation (including Annual Incentive and Long-Term Incentive).
Summary of Amendments. In 2009, the Compensation Committee directed the Chief Executive Officer to complete a full review of executive compensation. The Compensation Committee hired an external consultant to assist with its review. The Compensation Committee considered and approved the following amendments to the Executive Incentive Plan recommended by the consultant and management:
The foregoing is a summary of the terms of the Executive Incentive Plan and the amendments to the Executive Incentive Plan. Shareholders are encouraged to read the Executive Incentive Plan, which is attached to this proxy statement as Exhibit A, in its entirety. Shareholders should also review the Compensation Discussion and Analysis section of this proxy statement beginning on page 24, which outlines the Companys complete executive compensation program.
Vote Required. The affirmative vote of the holders of a majority of the shares of common stock, present in person or by proxy, voted at the meeting, is required for approval of the Executive Incentive Plan, as amended, under Section 162(m).
The Board of Directors recommends that you vote FOR the approval of the Amended and Restated BOK Financial Corporation 2003 Executive Incentive Plan.
RATIFICATION OF SELECTION OF AUDITOR
Ernst & Young LLP began serving as the Companys independent auditor since its inception on October 24, 1990. The Audit Committee has selected Ernst & Young LLP as our independent auditor for the fiscal year ending December 31, 2010.
While we are not required to do so, the Company is submitting the selection of Ernst & Young LLP to serve as our independent auditor for the fiscal year ending December 31, 2010, for ratification in order to ascertain the views of our shareholders on this appointment. If the selection is not ratified, the Audit Committee will reconsider its selection. Representatives of Ernst & Young LLP are expected to be present at the annual meeting, will be available to answer shareholder questions and will have the opportunity to make a statement if they desire to do so.
The Board of Directors recommends that you vote FOR ratification of the selection of Ernst & Young LLP as the independent auditor of BOK Financial and its subsidiaries for the fiscal year ending December 31, 2010.
All non-officer directors of BOK Financial and BOK receive a single retainer of $7,500 per year, payable quarterly in arrears in BOK Financial common stock in accordance with the BOK Financial Directors Stock Compensation Plan, whether serving on one or more of the boards of directors. Director compensation shares are issued to each director on or before the 15th day following the end of each calendar quarter during which such director served as a member of the Board of Directors of BOK Financial or BOK. The BOK Financial Directors Stock Compensation Plan further provides that the issuance price for the director compensation shares is the average of the mid-points between the highest price and the lowest price at which trades occurred on NASDAQ on the five trading days immediately preceding the end of the calendar quarter.
All non-officer directors also are paid $500 in cash for each board of directors or committee meeting attended (provided only one fee is paid when two or more committees meet contemporaneously) and $1,000 in cash for each committee meeting chaired. No such fees are paid for meetings not attended. In addition, the Chairman of the Risk Oversight and Audit Committee receives $250 for each quarterly earnings release conference and upon application to, and subject to the discretion of, the Risk Oversight and Audit Committee, $250 for each additional substantive conference with the Companys independent auditors.
Company Directors were paid the following amounts in 2009:
Attendance of Meetings
The entire Board of Directors of BOK Financial met four times during 2009. All directors of BOK Financial attended 75% of all meetings of the Board of Directors and committees on which they served, except Mr. Craft, who was unable to attend 75% of the meetings due to business and personal conflicts. Although BOK Financial does not have a policy with respect to attendance by the Directors at the Annual Meeting of Shareholders, Directors are encouraged to attend. Fourteen of the sixteen members of the Board of Directors attended the 2009 Annual Meeting of Shareholders. The Board of Directors intends to meet at least four times in 2010.
While the Board of Directors does not have a standing nomination committee, director candidates identified by management and members of the Board of Directors are discussed at virtually every Board of Directors meeting. The Board has no written policy on qualifications of directors; however, the understood expectation is that directors will have all of the following characteristics: (i) impeccable integrity; (ii) strong sense of professionalism, and (iii) capability of serving the interests of stockholders, and several of the following characteristics: (i) prominence in the community; (ii) significant relations with one of the Companys subsidiary banks, (iii) ability to represent the views of under-represented constituencies in the Companys market areas, (iv) financial analytical skill and expertise, and (v) vision for social trends.
While the Board of Directors does not have a diversity policy, the Board of Directors believes that the Board should encompass a diverse range of skill and expertise sufficient to provide prudent guidance to the Company, and have the right mix of characteristics and talents for the optimal functioning of the Board in its oversight of the Company. In considering a particular nominee, the Board will consider, in addition to the qualifications and characteristics described above, whether the potential director assists in achieving a mix of Board members that represents a diversity of background, perspective, and experience, including with respect to age, gender, race, place of residence, and specialized expertise.
The Board of Directors will consider director candidates recommended by stockholders if provided with the following: (i) evidence in accordance with Rule 14a-8 of compliance with stockholder eligibility requirements, (ii) the written consent of the candidate(s) for nomination as a director and verification as to the accuracy of the biographical and other information submitted in support of the candidate, (iii) a resume or other written statement of the qualifications of the candidate(s) for nomination as a director, and (iv) all information regarding the candidate(s) and the submitting stockholder that would be required to be disclosed in a proxy statement filed with the SEC if the candidate(s) were nominated for election to the Board of Directors. Any recommendations received from stockholders will be evaluated in the same manner that potential nominees suggested by board members, management or other parties are evaluated. The Board of Directors encourages shareholder director candidate recommendations.
Any stockholder that wishes to present a director candidate for consideration should submit the information identified above pursuant to the procedures set forth below under Communication with the Board of Directors on page 20.
The Board of Directors has determined that BOK Financial is a controlled company, as defined in Rule 4350(c)(5) of the NASDAQ listing standards, based on Mr. Kaisers beneficial ownership of approximately 61.2% of the outstanding common stock. Accordingly, BOK Financial is exempt from certain requirements of the NASDAQ listing standards, including the requirement to maintain a majority of independent directors on the Companys Board of Directors and the requirements regarding the determination of compensation of executive officers and the nomination of directors by independent directors. Nevertheless, the Company does maintain a substantial majority of independent directors, determines upper level management compensation through an independent board committee and nominates new board members through board consensus. Further, the Risk Oversight and Audit Committee is comprised solely of independent board members in accordance with NASDAQ Rule 4350(d). Further discussion regarding determination of independence may be found in the sections entitled Risk Oversight and Audit Committee and Independent Compensation Committee herein.
Compensation Committee Interlocks and Insider Participation
No voting member of the Compensation Committee has served as an officer of the Company, including its affiliates, at any time. None of the executive officers serve as a member of the Compensation Committee of any other company that has an executive officer serving as a member of the Companys Board of Directors. None of our executive officers serve as a member of the board of directors of any other company that has an executive officer serving as a member of our Boards Compensation Committee.
Committees of the Board of Directors
The Risk Oversight and Audit Committee, Independent Compensation Committee and Credit Committee are described below.
Risk Oversight and Audit Committee
During 2009, the Board of Directors of BOK Financial Corporation had a standing Risk Oversight and Audit Committee (the Audit Committee) comprised solely of independent directors. The Board of Directors has adopted an Audit Committee charter that complies with Rule 4350(d)(1) of the NASDAQ listing standards. The Audit Committee has the responsibility and authority set forth in Rule 4350(d)(3) of the NASDAQ listing standards under the revised charter. Among other things, the Audit Committee will be responsible for overseeing the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company. The Audit Committee is also directly responsible for the appointment, compensation, retention and oversight of the work of the Companys independent auditors, including the resolution of disagreements between management and the auditors regarding financial reporting.
The current members of the Audit Committee are Messrs. Joullian (Chairman), Allen, Boylan, Cadieux, Gibson and Malcolm. The Board of Directors has designated Mr. Joullian as its audit committee financial expert, as defined in Item 407(d) of Regulation S-K. All the members of the Audit Committee are independent as defined in Rule 4200(a)(15) of the NASDAQ listing standards. Director independence is determined through the procedures described under Related Party Transaction Review and Approval Policy herein. The Audit Committee held five meetings in fiscal 2009 and intends to meet at least five times in fiscal 2010. The Report of the Audit Committee is on page 20 of this proxy statement.
Independent Compensation Committee
In December 2002, the Board of Directors established an Independent Compensation Committee, consisting of independent directors, to administer a performance-based compensation plan for senior executives in accordance with the provisions of Section 162(m) of the Internal Revenue Code. The Independent Compensation Committee does not have a charter. The Independent Compensation Committee consists of Messrs. Allen (Chairman), Cadieux (non-voting), Griffin (non-voting), Kaiser (non-voting) and Malcolm. Compensation of the Chief Executive Officer, the direct reports to the Chief Executive Officer, and other officers participating in the Companys Executive Incentive Plan are approved by the Independent Compensation Committee. The Committee does not delegate this authority. Compensation for all other officers is, in practice, determined by the Chief Executive Officer and Mr. Kaiser, the Chairman of the Board. The Independent Compensation Committee Report on Executive Compensation and the Executive Compensation Discussion and Analysis may be found on pages 35 and 24 respectively.
The purpose of the Credit Committee is to review and report to the Board of Directors regarding the quality of the Companys credit portfolio and trends affecting the credit portfolio. It also oversees the effectiveness and administration of credit-related policies and reviews the adequacy of the allowance for loan losses and reserve for off-balance sheet credit losses. The members of the Credit Committee are Messrs. Griffin (Chairman), Boylan, Craft, Hargis, Kaiser, LaFortune, Lybarger, and Richards. The Credit Committee met eleven times during 2009 and plans to meet at least eleven times in 2010.
Independent Director Meetings
The Board of Directors has adopted a policy of regularly scheduled executive sessions where independent directors will meet separate from management. The independent Directors plan to meet in executive session after all regularly scheduled Board of Director meetings. The independent Directors held four executive sessions during 2009. The presiding Director at the executive sessions is Mr. Kaiser. Shareholders of the Company may communicate their concerns to the non-management Directors in accordance with the procedures described below under Communication with the Board of Directors.
Communication with the Board of Directors
The Board of Directors of BOK Financial believes that it is important for stockholders to have a process to send communications to the Board. Accordingly, stockholders who wish to communicate with the Board of Directors, or a particular Director, may do so by sending a letter to the Investor Relations Manager of BOK Financial at P.O. Box 2300, Tulsa, Oklahoma 74192. The mailing envelope should contain a clear notation indicating that the enclosed letter is a Stockholder-Board Communication or Stockholder-Director Communication. Such letters should identify the author as a stockholder and state whether the intended recipients are all members of the Board of Directors or certain specified individual Directors. The Investor Relations Manager and the General Counsel will independently review the content of the letters. Communications which are constructive suggestions for the conduct of the business or policies of the Company will be promptly delivered to the identified Director or Directors. Communications which are complaints about specific incidents involving banking or brokerage service will be directed to the appropriate business unit for review. Director nominations will be reviewed for compliance with the requirements identified in the section of this proxy entitled Director Nominations, and if meeting such requirements, promptly forwarded to the Director or Directors identified in the communication.
Report of the Risk Oversight and Audit Committee
The Risk Oversight and Audit Committee (the Committee) oversees BOK Financial Corporations financial reporting process on behalf of the Board of Directors. In fulfilling its oversight responsibilities, the Committee discussed and reviewed the Companys consolidated financial statements included in the Annual Report with management and reviewed internal control over financial reporting with management and the internal auditors. This review included discussions with management regarding the quality, not just the acceptability, of accounting policies. It also included the reasonableness of significant judgments, the clarity of disclosures in the consolidated financial statements and the effectiveness of internal control over financial reporting. Management has the primary responsibility for establishing and maintaining internal control over financial reporting and for assessing the effectiveness of internal controls over financial reporting. The Committee reviewed internal audit reports on the effectiveness of managements assessment process, discussed internal control matters with management and reviewed the Companys compliance with legal and regulatory requirements as necessary.
The Committee discussed and reviewed with Ernst & Young LLP, the independent registered public accounting firm, their opinion on the conformity of the Companys consolidated financial statements with accounting principles generally accepted in the United States. This discussion included their judgments as to the quality, not just the acceptability, of the Companys accounting policies. This discussion covered the required communications under audit standards established by the Public Company Accounting Oversight Board (PCAOB) and the American Institute of Certified Public Accountants (AICPA), including PCAOB Auditing Standard No. 5, An Audit of Internal Control over Financial Reporting that is Integrated with an Audit of Financial Statements and AICPA Auditing Standard No. 61, Communications with Audit Committees. The Committee has reviewed the auditors independence and obtained the written disclosures and the letter from Ernst & Young, LLP regarding independent auditor communications with audit committees concerning independence, in accordance with applicable requirements of the PCAOB. In conducting this review, the Committee considered whether any non-audit services were compatible with maintaining the auditors independence.
The Committee meets at least quarterly with the Companys internal auditors and the independent registered public accounting firm regarding the overall scope and plans for their respective audits. These meetings are conducted with and without management present and the Committee discusses the results of the audits, including the auditors evaluation of internal control over financial reporting.
Each of the members of the Audit Committee qualifies as an independent Director under the current NASDAQ listing standards. The Board of Directors has appointed E. Carey Joullian IV as the audit committee financial expert.
In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors (and the Board has approved) that the audited consolidated financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2009, for filing with the Securities and Exchange Commission.
E. Carey Joullian IV, Committee Chairman
Gregory S. Allen
Peter C. Boylan, III
Chester Cadieux, III
John W. Gibson
Steven J. Malcolm
Principal Accountant Fees and Services
Audit Fees. Fees paid to Ernst & Young LLP (EY) for the audit of the annual consolidated financial statements included in BOK Financials Annual Report on Form 10-K, for the review of the consolidated financial statements included in BOK Financials Forms 10-Q for the quarters included in the years ended December 31, 2009 and 2008 and various subsidiary audits were $1,006,039 and $1,081,505 respectively.
Audit-Related Fees. Fees paid to EY for SAS 70 reports and other audit-related functions were $61,665 and $67,500 respectively, for the years ended December 31, 2009 and 2008.
Tax Fees. Fees paid to EY associated with tax return preparation and tax planning were $52,001 and $4,430 respectively, for the years ended December 31, 2009 and 2008.
All Other Fees. Fees paid to EY for other services were $6,000 and $6,000 respectively, for each of the years ended December 31, 2009 and 2008.
The Audit Committee has adopted a formal policy on auditor independence requiring the approval by the Audit Committee of all professional services rendered by BOK Financials independent auditor prior to the commencement of the specified services. 100% of the services described in Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees were approved by the Audit Committee in accordance with BOK Financials formal policy on auditor independence and approval of fees.
Board Leadership Structure
The positions of Chief Executive Officer and Chairman of the Board are not held by the same person. Mr. Lybarger, the Chief Executive Officer, brings Company-specific experience and expertise to his role, while Mr. Kaiser, the Chairman of the Board, brings experience, oversight, and expertise from outside the Company and industry. Mr. Kaiser is also the majority shareholder of BOK Financial, giving him additional incentive to ensure the success of the Company. Keeping the positions of CEO and Chairman separate allows the CEO to focus on our day-to-day business, while allowing the Chairman to lead the Board in its fundamental role of providing advice to, and independent oversight of, management. The Board believes that having separate positions and having an independent outside director serve as Chairman is the appropriate leadership structure for the Company at this time, given the characteristics and circumstances of the Company, and demonstrates our commitment to good corporate governance. It provides the appropriate balance between strategy development and independent oversight of management.
Board Role in Oversight of Risk
The Board has an active role, as a whole and also at the committee level (as disclosed in the descriptions of the committees in this proxy statement), in overseeing management of the Companys risks. The full Board maintains responsibility for general oversight of risks, and regularly reviews information regarding the Companys credit, liquidity and operations, as well as the risks associated with each. The Companys Independent Compensation Committee is responsible for overseeing the management of risks relating to the Companys compensation policies and programs. The Risk Oversight and Audit Committee manages risks associated with accounting and financial reporting, internal controls, and compliance with legal and regulatory requirements. The Credit Committee manages risks associated with the Companys credit portfolio and credit-related policies. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors oversees overall strategic and reputational risks, and is regularly informed through committee reports and reports directly from officers responsible for oversight of various risks within the Company.
Certain information concerning the executive officers of BOK Financial and its subsidiaries, as determined pursuant to SEC rule 16a-1(f), is set forth below:
Norman P. Bagwell, age 47, is Chairman and Chief Executive Officer of BOT. Mr. Bagwell has over 24 years of banking experience in Texas. Prior to joining BOT, he served as President of the Dallas Region for JPMorgan Chase, and previously served as President of the Dallas Region for Bank One.
C. Fred Ball, Jr., age 65, is Senior Chairman of BOT. Mr. Ball was previously Chairman and Chief Executive Officer of BOT with responsibility for banking activities in Texas for BOK Financial. Before joining BOT in 1997, he was Executive Vice President of Comerica Bank-Texas and later President of Comerica Securities, Inc.
Steven G. Bradshaw, age 50, is Senior Executive Vice President of BOK, Manager of Regional Banks, including Colorado State Bank and Trust, N.A. and Bank of Kansas City, N.A., International Banking, Treasury Services, Consumer Banking, Wealth Management, BOK Mortgage and Community Development, Business Banking, and Chairman of BOSC, Inc. Before joining BOK Financial, Mr. Bradshaw spent six years managing the brokerage operation at Sooner Federal. Mr. Bradshaw has been with BOK since 1991.
Charles E. Cotter, age 56, is Executive Vice President and Chief Credit Officer for BOK, and Manager of the Credit Administration Division. Previously, Mr. Cotter acted as a Credit Concurrence Officer responsible for the approval of commercial loans, the Manager of the Specialized Lending Department and the Merchant Banking Department. Mr. Cotter has accumulated over 30 years of banking experience at BOK and Fidelity Bank, a bank acquired by BOK.
Daniel H. Ellinor, age 48, is Senior Executive Vice President of BOK, Manager of Regional Banks, including Bank of Arizona, N.A., Bank of Albuquerque, N.A. and Bank of Arkansas, N.A., Commercial Real Estate and Energy Lending, Oklahoma Commercial Banking, Dealer Financial Services, Private Equity-Merchant Banking and TransFund. Mr. Ellinor joined BOK in 2003. Previously, he served as regional president for Compass Bank in Dallas, where he oversaw Compass North Texas operations. Prior to that time, Mr. Ellinor was Bank of Americas market executive for the North Texas Commercial Banking Division.
Stanley A. Lybarger, age 60, is President and Chief Executive Officer of BOK Financial and BOK. Mr. Lybarger joined BOK in 1974. Previously, he was President of BOKs Oklahoma City Regional Office and Executive Vice President of BOK with responsibility for corporate banking.
John C. Morrow, age 54, is Senior Vice President and Chief Accounting Officer. He joined BOK Financial in 1993. He was previously with Ernst & Young LLP for 10 years.
Steven E. Nell, age 48, is Executive Vice President and Chief Financial Officer for BOK Financial and BOK. Mr. Nell previously served as Senior Vice President and Corporate Controller for BOK Financial. Before joining BOK Financial in 1992, Mr. Nell was with Ernst & Young LLP for eight years.
Donald T. Parker, age 49, is Executive Vice President and Chief Information Officer of BOK Financial. Mr. Parker joined BOK Financial in 2005. He previously served as Senior Vice President and Director of Information Services of Comerica Bank, a position he held from 1999 to 2005. Prior to joining Comerica Bank, Mr. Parker was a Senior Vice President and General Manager of Consolidation Services at National City Incorporated in Cleveland, Ohio.
COMPENSATION DISCUSSION AND ANALYSIS
Executive Compensation Program Overview
In 2002, the Board of Directors established the Independent Compensation Committee (for purposes of this analysis the Committee) to administer performance-based compensation plans for senior executives in accordance with the provision of Section 162(m) of the Internal Revenue Code. The Committee, the voting members of which are independent within the meaning of 162(m), has responsibility for establishing, implementing and approving the Companys general compensation philosophy with regard to the senior executive officers who participate in the Companys Executive Incentive Plan which was approved by shareholders in 2003. The Committee receives guidance from the Chief Executive Officer (the CEO) , who assists in evaluating employee performance, recommending business performance targets and objectives and suggesting salary levels and awards for executives (other than himself).
The BOK Financial executive compensation program is designed to attract and retain executives whose judgment, leadership abilities and special efforts result in successful operations for the company and an increase in shareholder value. Various components of the program work together to:
The BOK Financial executive compensation program includes:
The Committee meets as often as necessary to perform its duties and responsibilities. The Committee met three times in 2009 and its members included Gregory S. Allen (Chairman), Chester E. Cadieux, III (non-voting), David F. Griffin (non-voting), George B. Kaiser (non-voting) and Steven J. Malcolm.
Throughout this proxy statement, the Chief Executive Officer, Chief Financial Officer and the other individuals included in the Summary Compensation Table on page 37, are referred to as the named executives. Because the Company did not participate in the Troubled Asset Relief Program (TARP), the Company is not subject to the various executive compensation restrictions, disclosures and certifications mandated by TARP.
Review of Executive Compensation
In 2009, the Compensation Committee directed the Chief Executive Officer to complete a full review of executive compensation. A search was conducted to select an external consultant that specialized in the area of executive compensation. The consultant was asked to provide an external and independent perspective, to identify issues and alternatives, and to serve as a sounding board.
The consultant was given the following principles to guide its review and recommendations:
The results of the consultants review confirmed that the Companys compensation was generally effective in meeting the Committees compensation goals. However, to refine and improve the Executive Incentive Plan, the Committee considered and approved the following recommendations made by the consultant and management:
For additional information regarding amendments to the Executive Incentive Plan see Proposal Two on page 14 and the revised Executive Incentive Plan attached as Exhibit A to this proxy statement.
Promoting Long-Term Growth and Discouraging Excessive Risk Taking
In 2009, the Committee considered whether the Executive Incentive Plan encourages long-term, sustained growth rather than excessive risk taking. The Committee reviewed the i) length of the performance period, ii) amounts of equity ownership, iii) vesting periods for stock options and restricted stock and iv) emphasis of shareholders and management on long-term growth. The Committee found these elements of compensation sufficient to discourage excessive risk taking and to emphasize long-term growth.
Five Year Performance Period
The Executive Incentive Plan creates a rolling five-year performance period. The earnings per share growth for annual incentive is measured by comparing the earnings per share growth of the median of the peer group for a trailing two-year period determined as of the end of the year in respect to which the annual incentive is to be paid (i.e. a two year look back from the date annual incentive is paid). The earnings per share growth for long-term incentive is determined for the trailing three-year period determined at the end of the three-year performance period (i.e. a three year look ahead from the dates long-term incentive awards are made).
Spreading the vesting of performance awards over a five year period creates a disincentive to inflate earnings or performance in any one year to the detriment of other years, encouraging consistent, long-term performance.
Significant Equity Ownership
All long-term executive compensation is paid in stock options or restricted stock. In 2009, 41% of compensation to named executives was awarded as equity. Stock ownership guidelines require the CEO to own 75,000 shares of BOK Financial stock. All other named executives must own 20,000 shares of BOK Financial stock. Executives may not sell any shares received as compensation until such time as the ownership guidelines are achieved. The result is that BOK Financial executive officers own, and must continue to hold, a significant amount of BOK Financial stock at all times. For a further accounting of BOK Financial named executive equity ownership positions see page 7.
Lengthy Vesting Period for Stock Options and Restricted Stock
Stock option grants vest over a seven year period and restricted stock grants vest in total after five years. According to a recent review of BOK Financials peer group, typical vesting periods for stock options is 3-4 years and restricted stock is 3-5 years. BOK Financials extended vesting periods create a long-term commitment to the Company and a motivation for ongoing success.
Shareholder and Chief Executive Officer Emphasis on Long-Term Success
Mr. George Kaiser, the largest BOK Financial shareholder and Chairman of the BOK Financial Board, and Mr. Stan Lybarger, BOK Financial President and Chief Executive Officer, emphasize a long-term approach to management, reducing pressure on executives to realize short-term gains to the detriment of overall long-term success.
Evaluating Executive Compensation Relative to Peer and Overall Earnings Performance
By basing the Executive Incentive Plan on Peer Group comparison, the Company avoids penalizing executives for general industry and economic downturns and encourages executives to produce the best possible results in good and bad economic times. Currently, all the named executive officers (other than the CEO and CFO) receive 40% of their annual incentive based on Company per share earnings growth compared to Peer Group per share earnings growth (EPS Growth) and 100% of their long-term incentive based on EPS Growth. The CEO and CFO annual and long-term incentive is based 100% on EPS Growth. In 2009, the Companys EPS Growth out performed the Peer Group earnings per share growth median by 154.72%.
The Compensation Committees goal has always been to provide competitive remuneration to executives to enable BOK Financial to hire and retain top talent. The Committee has reviewed previous years earnings per share performance relative to the peer group and compensation paid to named executive officers relative to compensation paid for similar positions at peer banks. In 2008, the earnings per share ranking for BOK Financial relative to the peer group was 75% and the total compensation paid ranking (for named executives) relative to the peer group was 66%. In 2007, the earning per share ranking for BOK Financial relative to the peer group was 84.2% and the total compensation paid ranking (for named executives) relative to peer group was 68.4%. For additional information regarding the determination of peer group see page 28.
The Compensation Committee is sensitive to the fact, based on experience during previous unfavorable economic cycles, that reducing executive compensation during a downturn could result in poor morale, diminished motivation and loss of high quality executives to other financial institutions and industries. Executives, like shareholders, are experiencing the effects of the economy and lower earnings on the BOK Financial stock price. By maintaining current compensation levels, the Company aims to better position BOK Financial to work through these difficult times and take full advantage of the eventual economic turnaround.
Factors Used for Establishing Executive Compensation
The following is an explanation of the primary data, metrics and criteria used by the Committee to determine compensation as more fully described in Components of Compensation below:
Earnings Per Share Growth Compared to Peers
Net Direct Contribution
Individual Performance Goals
Peer Group Compensation Data
BOK Financials peer group is determined annually and, for 2009, includes 20 bank holding companies (10 next largest and 10 next smallest). For 2009 the peer group (the Peer Group) included:
Components of Executive Compensation
Salary Executives receive a base salary which is paid in cash twice monthly. Each year the Compensation Committee reviews executive base salaries to determine if adjustments should be made in view of a change in executives roles and responsibilities, value added to the company, individual performance, experience, evaluation of peer data, and overall success of the company. The Committee considers the reports of performance and recommendations of the CEO, as well as peer data compiled by the Companys internal compensation group and the independent consultant. The Compensation Committee has historically sought to align executive compensation with the Peer Group average for related executive roles and experience.
Executive Incentive Compensation The Executive Incentive Plan allows the named executives, and certain executives that report directly to, or are designated by, the CEO, to earn i) an annual cash incentive, which has historically been paid in the first quarter of the year following that to which the service relates, and ii) long-term incentive, which is paid in stock options or performance shares, or a combination thereof (at the option of the executive). Stock options and performance shares are awarded on the second business Friday of January. The number of options and/or shares is subsequently adjusted at the end of the three year performance period discussed below.
Annual Incentive Annual incentive is based on a combination of EPS Growth and Net Direct Contribution, subject to downward adjustment for failure to meet individual performance goals. The Compensation Committee receives recommendations from the CEO and determines the allocation between EPS Growth and Net Direct Contribution to be used in calculating each named executives annual incentive. Currently, all named executive officers (other than the CEO and CFO) receive 60% of their annual incentive based on Net Direct Contribution and 40% of their annual incentive based on EPS Growth. Because the responsibilities of CEO and CFO are not tied to any one business unit but include the Company as a whole, their annual incentive is based only on EPS Growth.
The target annual incentive compensation has historically been 50% to 60% of the named executives annual salaries except the target has been 75% of annual salary for the CEO. A participant earns an annual incentive based on a matrix where 33% of the targeted annual incentive compensation is earned if 80% of the goal is met, 100% of the targeted incentive compensation is earned if 100% of the goal is met, and 200% of the targeted incentive compensation is earned if 120% of the goal is met, as illustrated in the following matrix:
EPS Growth for annual incentive is measured by comparing the earning per share growth of the median of the Peer Group for a trailing two-year period determined as of the end of the year in respect to which the annual incentive is to be paid. Shareholders are being asked to approve changes to the Annual Incentive Grid in Proposal Two Approval of the Amended and Restated Executive Incentive Plan.
The EPS Growth target for its named executives is 100% attained if the Companys EPS Growth is equal to the median of the Peer Group earnings per share growth for a trailing two-year period determined as of the end of the year in respect to which the annual incentive is to be paid. In 2009, the trailing two year EPS Growth of BOK Financial was -4%, compared to the median trailing two year EPS Growth of the peer banks identified herein of -40.5%. As a result, named executive officers attained 200% of their EPS Growth goal for 2009. Because Company EPS growth compared to peer EPS growth exceeded the maximum performance target of 120%, each named executive officer earned the maximum annual incentive payment of 200%.
The Net Direct Contribution target for the three named executives (other than the CEO and CFO whose annual incentive is based solely on EPS Growth), is 100% of the planned Net Direct Contribution for such executives respective area of responsibility. For 2009, the Net Direct Contribution targets were as follows (in thousands): Mr. Bradshaw $125,754,974; Mr. Ellinor $138,826,211; Mr. Parker $-(157,598,203). Mr. Parker, as Chief Information Officer, oversees business operations which include project execution, maintaining service standards and expense reduction. Unlike Mr. Bradshaw and Mr. Ellinor, whose Net Direct Contribution targets represent business unit revenue, Mr. Parkers Net Direct Contribution is tied to operational expenses, resulting in a negative Net Direct Contribution target amount. For 2009, the named executives attained their Net Direct Contribution targets as follows: Mr. Bradshaw attained 91.7%, Mr. Ellinor attained 101.44% and Mr. Parker attained 102.6%. When averaged with the 2008 results, the results of Net Direct Contribution performance equates to an annual incentive payment of approximately 135.4% of target for Mr. Bradshaw, 80% of target for Mr. Ellinor and 153.8 % for Mr. Parker.
Long-term Incentive Long-term incentive is based solely on EPS Growth, subject to downward adjustment for failure to meet individual performance goals. The target has historically been 100% of annual salary for all named executives other than the CEO whose target is 200% of annual salary.
An executive earns long-term incentive based on a matrix pursuant to which 25% of the targeted long-term incentive compensation is earned if the goal, less five percentage points, is met, 100% of the targeted long-term incentive compensation is earned if 100% of the goal is met, and 150% of the targeted long-term compensation is earned if the goal plus five percentage points is met, as illustrated in the following matrix:
EPS Growth for long-term incentive is measured by comparing the earnings per share growth of the median of the Peer Group for the trailing three-year period determined at the end of the three-year performance period.
The goal is equal to the median EPS Growth of the BOK Financial Peer Bank for the trailing three-year period determined at the end of the three-year performance period. In 2009, the trailing three year EPS Growth of the Company was -2.11% compared to the average trailing three year EPS Growth of the Peer Group of -29.2%. This resulted in an earned long-term incentive award of approximately 150% of base for each named executive officer. Shareholders are being asked to approve changes to the Long-Term Incentive grid in Proposal Two Approval of the Amended and Restated Executive Incentive Plan.
Long-term incentive awards are paid in stock options or performance shares, or a combination thereof, at the option of the named executive. This flexibility allows named executives to choose the kind of award best suited to their financial needs, age, time until retirement, and other personal factors.
Stock option grants vest over a seven year period. Performance shares vest only on the fifth anniversary of the last day of the year for which the performance shares were issued and must be held for three years unless company stock ownership guidelines are met.
Up to one hundred percent of the annual incentive compensation and one hundred percent of the long-term compensation may be adjusted downward at the discretion of the Committee. The CEO recommends downward adjustments based on the failure of named executives to obtain satisfactory results and attain individually assigned goals. Shareholders are being asked to increase the downward adjustment percentage for annual and long-term incentive to one hundred percent in Proposal Two Approval of the Amended and Restated Executive Incentive Plan.
The CEO establishes these individually assigned goals at the beginning of the fiscal year and reviews them with each named executive on a quarterly basis. The goals are related to specific business objectives in each individual executives area of responsibility. In 2009, there were no material adjustments made to any of the individual goals. The CEO did not recommend downward adjustments for any of the named executives. Neither the CEO nor the Committee has the authority to adjust the annual and long-term incentive target payments upwards once they have been established at the beginning of the year.
The Committee established higher annual incentive target and long-term incentive targets for Mr. Lybarger than for other named executives after reviewing peer data which reflected combined higher annual and long-term incentive compensation targets for CEOs compared to other named executives. Combined annual and long-term incentive targets for all named executives, including the CEO, are generally set to reflect the median of the BOK Financial Peer Group.
Thrift Plan Executives may contribute to the BOK Thrift Plan, a 401(k) eligible plan. Employee contributions are matched by the company up to 6% of the base compensation based on years of service. Participants may direct the investments of their accounts in a variety of options, including BOK Financial common stock.
Pension Plan The Pension Plan was established in 1987 as a cash balance defined benefit pension plan. Benefits are determined based on a hypothetical account balance that accumulates over time. The account balances grow based on a 5.25% interest credit on prior balances. In 2006, the company curtailed its contributions to the pension plan for all employees, including named executives; however, the hypothetical amounts continue to grow based on interest credit.
Special Grants In 2001, BOK adopted a plan to extend the life of stock options granted in 1997, 1998 and 1999 by two years. Each year, on the day that one-seventh of the 1997, 1998 and 1999 options expire, new stock options are granted in the same number (the Special Options). The Special Options vest two years after the grant date and expire 45 days after vesting. The exercise price for the Special Options is the market value for BOK Financial common stock on NASDAQ on the day of grant. The final Special Options were granted in 2009.
Deferred Compensation Four of the five named executives are party to an individual Deferred Compensation Agreement that permitted, until year-end 2004, the deferral of certain compensation. The CEO is the only named executive officer that is party to an Amended and Restated 409A Deferred Compensation Agreement which currently allows awards of performance shares and options to be deferred. The executive Deferred Compensation agreements are discussed in further detail under Nonqualified Deferred Compensation on page 51.
Perquisites and Other Personal Benefits Other than the participation in the plans and programs described above, benefits which are very immaterial in nature, or benefits which are provided to employees generally such as health and dental insurance, the Company does not provide perquisites or other personal benefits to named executive officers.
Compensation Philosophy and Objectives
The BOK Financial executive compensation program has many objectives, all of which are designed to enhance Company value. Because no single type of compensation award or performance criteria could achieve all objectives, several types of compensation performance criteria and awards are used to achieve the maximum benefit from executive compensation.
There is no pre-established policy or target for allocating executive compensation between cash and equity, long-term and short-term. Rather, the Committee considers its varied objectives, personal performance, company performance and data regarding Peer Group compensation to establish the appropriate level and mix of incentive compensation. The Committee has generally chosen not to consider the benefits to named executives from previously awarded compensation other than to establish a baseline for future compensation.
Company executive compensation objectives include:
Sustained, Above Peer Performance BOK Financial rewards sustained, above peer performance through a five year compensation continuum in the Executive Incentive Plan consisting of a two year EPS Growth look back for annual compensation and a three year forward-looking EPS Growth for long-term compensation.
Individual Performance and Teamwork Annual incentive compensation promotes individual performance with a percentage of annual incentive compensation being based on Net Direct Contribution (except for the CEO and CFO) and a percentage being based on EPS Growth, with potential downward adjustments for failure to meet individual performance goals. Long-term compensation, based entirely on EPS Growth, promotes teamwork by rewarding success of the Company as a whole.
Link Compensation to Operational Results By using EPS Growth and Net Direct Contribution as the metrics for performance, both annual and long-term compensation are directly tied to financial performance of the Company. The Committee also considers the financial success of the Company when determining salary.
Competition with Peer Banks To attract and retain superior executives, BOK Financial strives to provide levels of compensation comparable to competitor banks. The Committee considers peer compensation data when establishing salary and incentive compensation targets.
Align Executive Interests with Shareholder Interests While BOK Financial does not have a specific policy or target for determining the allocation between equity and cash awards, the Company does promote equity ownership to align executive interests with shareholder interests. All long-term executive compensation is paid in stock options or performance shares. Stock ownership guidelines require the CEO to own 75,000 shares of company stock. All other named executives must own 20,000 shares of company stock. Executives who fail to meet the stock ownership guidelines may not sell BOK Financial stock until such ownership amounts are attained.
Long-term Commitment to the Company BOK Financial values company experience and stability of operations. BOK Financial promotes loyalty through an extended seven year stock option vesting period and a five year performance share vesting period. Further, long-term incentive is earned after a three year performance period.
Change in Control and Termination Benefits
The Company has a limited number of changes in control benefits for executive officers. If an executive, or any employee of BOK Financial, is terminated within one year after a change in control (as defined in footnote 3 on page 54), and such termination is other than for cause (as defined in footnote 2 on page 54), then all unvested performance shares and stock options he or she has been granted vest. Stock options must then be exercised within 90 days of the change in control. Mr. Lybargers employment agreement provides that Mr. Lybarger may terminate his employment agreement upon a change in control (as defined in footnote 4 on page 51) and receive severance and other benefits more fully described on page 52. These change in control benefits have been in effect since the creation of the BOK Financial stock option plan and the initial employment agreement with Mr. Lybarger in 1991. The Company believes the provisions are generally in line with current market practices and has seen no reason, to this point, to provide additional change in control protection.
Executive officers receive the same severance benefits as other BOK Financial employees which are based upon the amount of time a person has been employed by the Company. Mr. Lybarger, Mr. Bradshaw, Mr. Ellinor and Mr. Parker are entitled to receive additional severance pursuant to their employment agreements as more fully described in Potential Payments Upon Termination found on pages 53-54. The Company believes that the severance and termination payments help recruit and retain senior executives by protecting them in the event their positions are adversely impacted by an unexpected change in circumstance and are consistent with those offered by competitors.
Stock Option Grant Policy
In 2004, BOK Financial initiated a policy of granting all Company stock options, to both named executives and all other Company employees, on the first business Friday in January (other than the Special Options described above). This date was chosen by the Chief Executive Officer and the Chairman of the Board and is also the date that performance shares are awarded pursuant to the Executive Incentive Plan. In 2006, the pre-established grant date was changed to the second business Friday in January to account for administrative challenges during the holiday season (the Grant Date).
All stock options awarded by BOK Financial are priced at the market value for BOK Financial common stock on NASDAQ as of the Grant Date. There is no program or policy to coordinate the granting of options with the release of material non-public information as all grants occur on the Grant Date, including those made to new executive officers.
Tax and Accounting Considerations
Section 162(m) of the Internal Revenue Code Both annual incentive and long-term awards made pursuant to the Executive Incentive Plan are designed to comply with Section 162(m) of the Internal Revenue Code. Section 162(m) of the Internal Revenue Code generally limits to $1 million the amount that a publicly-held company is allowed to deduct each year for the compensation paid to each of the corporations chief executive officer and three most highly compensated executive officers other than the chief financial officer. However, performance-based compensation determined in accordance with IRS regulations is not subject to the limit. In order to qualify as performance-based compensation, payments must be computed on the basis of an objective, performance-based standard determined by a committee that consists solely of two or more voting outside directors and the material terms under which the compensation is to be paid, including the performance goals, must be disclosed to and approved by the shareholders.
Section 409A of the Internal Revenue Code If an executive is entitled to nonqualified deferred compensation benefits that are subject to Section 409A of the Internal Revenue Code, and such benefits do not comply with Section 409A, then the benefits are taxable in the first year they are not subject to substantial risk of forfeiture. In such case, the Service Provider is subject to regular federal income tax, interest and an additional federal income tax of 20% of the benefit included in the income. The Company believes all deferred compensation benefits currently comply with 409A.
Compensation Committee Report
The Compensation Committee held three meetings during fiscal year 2009. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based upon such review, the related discussions and such other matters deemed relevant and appropriate by the Compensation Committee, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and delivered to shareholders.
INDEPENDENT COMPENSATION COMMITTEE
Gregory S. Allen (Chairman)
Chester E. Cadieux, III (non-voting)
David F. Griffin (non-voting)
George B. Kaiser (non-voting)
Steven J. Malcolm
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2009 about the Companys equity compensation plans in effect at December 31, 2009. Plans included in the following table consist of the BOKF 2000, 2001 and 2003 Stock Option Plans, as well as the 2003 Executive Incentive Plan, the 2009 Omnibus Incentive Plan and the BOKF Directors Stock Compensation Plan. The material features of the various stock-based compensation plans are described within Note 12 of the Companys Notes to Consolidated Financial Statements, which was included in the Companys Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2010.
EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLE
The following table sets forth summary information concerning the compensation for the past three fiscal years of those persons who were, at December 31, 2009, (i) the Chief Executive Officer (Mr. Lybarger), (ii) the Chief Financial Officer (Mr. Nell), and (iii) the three other most highly compensated executive officers of the Company. Because of the value of Mr. Lybargers pension benefit, which reflects 33 years of service, and the fact a greater portion of Mr. Lybargers compensation has been deferred, column (h) for Mr. Lybarger differs significantly from the other named executives. Executives who did not have the ability to defer income or who chose not to defer income are not required to disclose investment income on the Summary Compensation Table.
OPTION EXERCISES AND STOCK VESTED
The following table includes certain information concerning the exercise of stock options and the vesting of performance shares by the named executive officers during the fiscal year 2009:
GRANTS OF PLAN BASED AWARDS
The following table sets forth certain information with respect to (i) non-equity annual incentive awards made pursuant to the Executive Incentive Plan, (ii) the options and performance shares awarded as long-term compensation pursuant to the Executive Incentive Plan, and (iii) stock options awarded pursuant to the BOK Financial 2001 Stock Option Plan.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table includes stock options and performance shares outstanding as of December 31, 2009.
The normal retirement age under the Pension Plan is age 65. At that time, a participant may receive a lump sum equal to the account balance. The participant may also elect to receive an annuity payment from the Pension Plan. Various annuity forms are available.
The following table describes the present value of the named executive officers pension benefits:
NONQUALIFIED DEFERRED COMPENSATION
Pursuant to individual Deferred Compensation Agreements, the named executive officers were permitted, until year-end 2004, to defer certain compensation. In response to IRS guidance, these Deferred Compensation Agreements were amended in December of 2004 to preclude the deferral of future compensation and subsequently terminated. Future deferrals would require entry into a new agreement.
Mr. Lybarger is the only named executive officer who entered into an Amended and Restated 409A Deferred Compensation Agreement pursuant to which awards may be deferred. The Company maintains a record-keeping account that reflects the number of shares received upon exercise and the number of performance shares that are deferred. Mr. Lybarger may elect annually to convert all or a portion of the value measure of his deferred awards from Company stock to alternate investments. Benefits under the Amended and Restated 409A Deferred Compensation Agreement will be paid no earlier than six months after Mr. Lybargers retirement or termination. However, upon a showing of financial hardship, he may be allowed to access funds in his deferred compensation account. Benefits shall be paid in one lump sum.
The following table describes the current balance of deferral accounts:
POTENTIAL PAYMENTS UPON TERMINATION
Stanley A. Lybarger
The following tables show potential payments to the Chief Executive Officer under existing contracts, agreements, plans or arrangements for various scenarios involving a change-in-control or termination, assuming a December 31, 2009 termination date (except with regard to Normal Retirement and Early Retirement as described below) and, where applicable, using the closing price of BOK Financial common stock of $47.52 (as reported on NASDAQ as of December 31, 2009).
Steven E. Nell1
Mr. Nell is not subject to an employment agreement and upon termination would not be entitled to any additional payment or accelerated vesting except as provided to BOK employees generally. Pursuant to BOKs standard severance, if terminated without cause2 on December 31, 2009, Mr. Nell would have received $151,864.
Pursuant to BOK Financial employee stock option and performance share plans in place for BOK executives generally, in the event Mr. Nell was terminated without cause2 within twelve months following a Change of Control3, Mr. Nell would vest in his unvested performance shares and stock options and would have ninety days to exercise his stock options. As of December 31, 2009, Mr. Nell held $239,881 in unvested performance shares and $402,838 in unvested stock options.
Steven G. Bradshaw and Daniel E. Ellinor1
Both Mr. Bradshaw and Mr. Ellinor are subject to employment agreements which commenced October 15, 2003 and may be terminated by either BOK Financial or executive upon ninety days prior written notice. Pursuant to these agreements, if terminated on December 31, 2009 without cause2, Mr. Bradshaw and Mr. Ellinor would have been entitled to receive: i) BOKs standard severance plus an additional twelve months of annual salary for a total severance of $624,642 and $521,990 respectively and ii) ninety days of health, 401(k) and pension benefits4 equaling $10,728 and $6,205 respectively.
Additionally, for two years following termination for cause2 and one year following termination for any other reason (including expiration of the term), both Mr. Bradshaw and Mr. Ellinor are prohibited from soliciting customers or employees of BOK Financial or its affiliates for which they will receive $3,000 every year the non-solicitation terms are in effect.
Pursuant to BOK Financial employee stock option and performance share plans for BOK executives generally, in the event Mr. Bradshaw or Mr. Ellinor were terminated without cause2 within twelve months following a Change of Control3, they would vest in their unvested performance shares and stock options and would have ninety days to exercise their stock options. As of December 31, 2009, Mr. Bradshaw had $877,456 in unvested performance shares and $482,210 in unvested stock options and Mr. Ellinor had $916,518 in unvested performance shares and $427,386 in unvested stock options.
Donald T. Parker1
Mr. Parker is subject an employment agreement which commenced August 1, 2005 and may be terminated by either BOK Financial or executive upon ninety days prior written notice. Pursuant to this agreement, if terminated on December 31, 2009 without cause2, Mr. Parker would have been entitled to receive BOKs standard severance plus an additional twelve months of annual salary for a total severance of $419,790.
Additionally, for two years following termination for cause2 and one year following termination for any other reason (including expiration of the term), Mr. Parker is prohibited from soliciting customers or employees of BOK Financial or its affiliates for which he will receive $3,000 every year the non-solicitation terms are in effect.
Pursuant to BOK Financial employee stock option and performance share plans for BOK executives generally, in the event Mr. Parker was terminated without cause2 within twelve months following a Change of Control3, Mr. Parker would vest in his unvested performance shares and stock options and would have ninety days to exercise his stock options. As of December 31, 2009, Mr. Parker had $554,273 in unvested performance shares and $600,447 in unvested stock options.
RELATED PARTY TRANSACTION REVIEW AND APPROVAL POLICY
BOK Financial has a written related party transaction policy, approved by the Risk Oversight and Audit Committee (ROAC), which requires that all related party transactions reportable pursuant to SEC regulation S-K, Item 404(a) must be submitted to the Chief Financial Officer (CFO) for review. ROAC conducts appropriate review and oversight of such transactions for potential conflict of interest situations in accordance with NASDAQ Rule 4350(h).
The related-party transaction must be intended for the benefit of the Company and made on terms no less favorable than those terms for unrelated persons. The CFO must also consider whether the transaction is occurring at arms length and the impact of the related party transaction on financial statement accounting and disclosure.
If the CFO determines that the transaction would be material, he must present the details and his conclusion to the Chairman of ROAC. The Chairman of ROAC will submit the related party transaction to ROAC for approval based upon the same criteria as considered by the CFO, in addition to such criteria as may be deemed relevant by the members.
The Company annually requires each of its directors and executive officers to complete a directors and officers questionnaire that elicits information about related person transactions. The Companys Office of General Counsel reviews all transactions disclosed in the officer and director questionnaires and discusses any transactions not previously identified with the CFO and verifies compliance with independence requirements under NASDAQ Rule 4350 and Section 162(m) of the Internal Revenue Code.
Certain principal shareholders, directors of the Company and their associates were customers of and had loan transactions with BOK Financial or its subsidiaries during 2009. None of them currently outstanding are classified as nonaccrual, past due, restructured or potential problem loans. All such loans (i) were made in the ordinary course of business, (ii) were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Company, and (iii) did not involve more than normal risk of collectability or present other unfavorable features.
Certain related parties are customers of the Company for services other than loans, including consumer banking, corporate banking, risk management, wealth management, brokerage and trading, or fiduciary/trust services. The Company engages in transactions with related parties in the ordinary course of business and in compliance with applicable regulation.
BOK leases office space in the Copper Oaks and Lewis Center facilities located in Tulsa, Oklahoma, which are owned by Mr. Kaiser and affiliates. Lease payments for both facilities totaled $910,000 in 2009. BOK also leases office space in the Penn Park facility located in Oklahoma City, Oklahoma, which is owned by Mr. Kaiser and affiliates. Lease payments for this space totaled $125,000 in 2009.
Mr. Malcolm, a BOK Financial director, is the President and Chief Executive Officer for the Williams Companies, Inc., the parent company of the Williams Headquarters Building Company. In 2009, rent and other occupancy payments made to the Williams Headquarters Building Company were approximately $4.2 million. BOK began leasing the BOK Tower in 1974.
QuikTrip Corporation has entered into a fee sharing agreement with TransFund, BOKs automated teller machine (ATM) network, (TransFund) respecting transactions completed at TransFund ATMs placed in QuikTrip locations. In 2009, BOK paid QuikTrip $2.5 million pursuant to this agreement. Mr. Cadieux, a BOK Financial Director, is President, Chief Executive Officer, a director and a shareholder of QuikTrip Corporation.
Great Plains National Bank, located in Elk City, Oklahoma, received bank credit card and other merchant services from TransFund for which it paid approximately $453,883 in fees. Steven Nell, the Companys Chief Financial Officer, and certain family members own approximately 13.7% of Great Plains National Bank. Mr. Nells father, W.B. Nell, Jr., is Chairman of the Great Plains National Bank Board of Directors.
In 2009, Argonaut VPP, an affiliate of Mr. Kaiser, hedged 12,055,192 MMbtu of natural gas and 64,695 barrels of oil. On December 31, 2009, short fair value of these Argonaut VPP hedges was $556,978 due from Argonaut. The value of the hedges depends on the market price of the hedged commodities, varies from day to day, and could, on any given day, be a long or short fair value.
The Company conducts merchant banking activities through its BOK Financial Capital Services subsidiary (BOKF-CS). In 2007, BOKF-CS purchased a 10.4% ownership interest in Newco Valves, LLC for $7,000,000 at the same time an affiliate of Mr. Kaiser acquired a controlling interest in Newco Valves. In February 2010, BOKF-CS and the affiliate of Mr. Kaiser sold 51% of their respective equity interest in Newco Valves. In December 2008, a subsidiary of the Company invested $3.02 million to purchase a 6% equity holding in Global Holdings, LLC at the same time Mr. Kaiser acquired an equity position in Global Holdings LLC.
Effective December 2, 2009, the Company amended an unsecured revolving credit agreement with George B. Kaiser, its Chairman and principal shareholder. The terms of the amended credit agreement reduced the committed amount from $188 million to $100 million, changed the interest rate and facility fee to reflect current market terms and extended the maturity date from December 2, 2010 to December 2, 2012. Interest on outstanding balances due to Mr. Kaiser is based on one-month LIBOR plus 250 basis points and is payable quarterly. Additional interest in the form of a facility fee is paid quarterly on the unused portion of the commitment at 50 basis points. Previously, interest was due quarterly based on one-month LIBOR plus 125 basis points and the facility fee was paid quarterly on the unused portion of the commitment at 25 basis points. As with the original agreement, the amended agreement has no restrictive covenants. No amounts were outstanding under this credit agreement as of December 31, 2009.
Cavanal Hill Investment Management, Inc., a wholly-owned subsidiary of BOK, is the administrator to and investment advisor for the Cavanal Hill Funds. BOK is custodian and BOSC, Inc. is distributor. Cavanal Hill Funds is a diversified, open-ended investment company established in 1987 as a Massachusetts business trust under the Investment Company Act of 1940. Cavanal Hill Funds products are offered to customers, employee benefit plans, trust and the general public in the ordinary course of business. As of December 31, 2009, approximately 99% of Cavanal Hill Funds assets of $2.6 billion are held for BOK Financials clients. Scott Grauer, Vice President Wealth Management and President and Chief Executive Officer of BOSC, Inc., is a Trustee for Cavanal Hill Funds. James Huntzinger, Chief Investment Officer, is President of Cavanal Hill Funds.
On December 4, 2008, the Company entered into a $25,000,000 loan commitment with the Tulsa Community Foundation (TCF) to be secured by tax-exempt bonds purchased from the Tulsa Stadium Trust (an Oklahoma public trust of which the City of Tulsa is the sole beneficiary) by TCF. Stanley Lybarger, President and CEO of the Company, is Chairman of the Tulsa Stadium Trust.
Based upon a review of the filings with the Securities and Exchange Commission and written representations that no other reports were required, we believe that all of our directors and executive officers complied during fiscal year 2009 with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 with the exception of a late report in August 2009 relating to 4,823 shares acquired and 4,823 shares disposed through the exercise of stock options for Mr. Ball; a late report in February 2010 relating to 606 shares acquired and 461 shares disposed through the exercise of stock options for Mr. Cotter; a late report in February 2010 relating to 754 shares acquired through deferred compensation plan for Mr. Funke; a late report in February 2010 relating to 1,250 stock options acquired and 329 shares of restricted stock acquired for Mr. Morrow; and a late report in February 2010 relating to 865 shares acquired through purchase of stock for Mr. Richards. All late reports related to the disposal of shares through the exercise of options were reported within one day of the filing date.
PROPOSALS OF SHAREHOLDERS
The Board of Directors will consider proposals of shareholders intended to be presented for action at the Annual Meeting of Shareholders. According to the rules of the Securities and Exchange Commission, such proposals shall be included in the Companys Proxy Statement if they are received in a timely manner and if certain other requirements are met. For a shareholder proposal to be included in the Companys Proxy Statement relating to the 2011 Annual Shareholders Meeting, a written proposal complying with the requirements established by the Securities and Exchange Commission must be received at the Companys principal executive offices, located at Bank of Oklahoma Tower, Tulsa, Oklahoma 74172, no later than December 1, 2010.
Management does not know of any matters to be presented for action at the meeting other than those listed in the Notice of Meeting and referred to herein. If any other matters properly come before the meeting, it is intended that the Proxy solicited hereby will be voted in accordance with the recommendations of the Board of Directors.
COPIES OF THE ANNUAL REPORT ON FORM 10-K AND OTHER DISCLOSURE STATEMENTS FOR BOK FINANCIAL CORPORATION MAY BE OBTAINED WITHOUT CHARGE TO THE SHAREHOLDERS BY WRITING TO THE CHIEF FINANCIAL OFFICER, BOK FINANCIAL CORPORATION, P. O. BOX 2300, TULSA, OKLAHOMA 74192, OR THROUGH THE INTERNET AT WWW.EDOCUMENTVIEW.COM/BOKF OR VIA E-MAIL TO SHINKLE@BOKF.COM.
THE COMPANY MAKES AVAILABLE ITS PERIODIC AND CURRENT REPORTS, FREE OF CHARGE, ON ITS WEB SITE AS SOON AS REASONABLY PRACTICABLE AFTER SUCH MATERIAL IS ELECTRONICALLY FILED WITH, OR FURNISHED TO, THE SEC AT HTTP://WWW.BOKF.COM.
EXHIBIT A BOK FINANCIAL CORPORATION 2003 EXECUTIVE INCENTIVE PLAN
BOK FINANCIAL CORPORATION
INDEPENDENT COMPENSATION COMMITTEE
2003 EXECUTIVE INCENTIVE PLAN
AS AMENDED AND RESTATED
(FOR THE CHIEF EXECUTIVE OFFICER AND FOR DIRECT REPORTS TO THE CHIEF EXECUTIVE OFFICER)
March 25, 2003
(amended and restated on April 29, 2008 and April 27, 2010)
Independent Compensation Committee. In December 2002, the Board of Directors of BOKF established an Independent Compensation Committee to administer a performance-based compensation plan for senior executives in accordance with the provisions of Section 162(m) of the Internal Revenue Code. The Independent Compensation Committee has developed a performance-based compensation plan for 2003 which is called the 2003 Executive Incentive Plan and is hereafter described.
Incentive Compensation Generally. The Company employs a wide range of incentive compensation for its employees. Except for performance-based compensation which is intended to comply with the requirements of Section 162(m), such incentive compensation is administered by the Chief Executive Officer and senior management. The Independent Compensation Committee administers the 2003 Executive Incentive Plan.
2003 BOKF Executive Incentive Plan. The 2003 BOKF Executive Incentive Plan consists of (i) annual incentive bonus and (ii) long term incentive compensation. The Chief Executive Officer and executives who report directly to the Chief Executive Officer and other officers designated by the Chief Executive Officer may participate in the Plan.
Annual Incentive Bonus. The Annual Incentive Bonus will be determined as follows:
Long Term Incentive. The Long Term Incentive will be determined as follows:
Performance-Based Compensation Measures. The measure against which each participants performance will be based is the weighted average of (i) Company earnings per share measured against peer group earnings per share and (ii) business unit actual net direct contribution measured against business unit planned net direct contribution and attainment of individually established goals. Net direct contribution is based upon the Companys standard methodologies.
Payment of Long Term Incentive Compensation. Long Term Incentive Compensation will be paid by the issuance of stock options and performance shares or a combination of stock options and performance shares pursuant to the BOK Financial Corporation 2009 Omnibus Incentive Plan and as described below:
If the target performance is exceeded at the end of the performance period, performance shares will be issued in an amount equal to the value of the additional performance shares earned. Such additional shares will vest only on the second anniversary of the last day of the year for which the shares are issued.
Performance shares, whether issued at the target issuance date or at the end of the performance period, will be forfeited if the employment of the Executive is terminated for any reason prior to vesting. In addition, the shares may not be sold if following such sale, the Executive would fail to own that number of shares of BOKF Common Stock provided for in any Executive Management BOKF Common Stock Ownership Guidelines which may be established from time to time by the Independent Compensation Committee.
Election by Participant Each participant will, immediately prior to the date of grant each year, specify the percentage of the Long Term Incentive that the participant desires to receive by the issuance of options and the percentage the participant desires to receive by the issuance of performance shares. The elections available to each participant will be (i) 100% options; (ii) 100% performance shares, or (iii) 50% options and 50% performance shares. The number of options or shares will be based on the value of each option or performance share and the total incentive intended to be granted.
Peer Group of Banks. The Independent Compensation Committee will select the peer group of bank holding companies in accordance with the following guidelines.
Determination of Performance-Based Compensation. The calculation of performance based compensation by the Independent Compensation Committee will be binding upon all participants provided only that the Independent Compensation Committee acts in good faith.
Time and Payment of Performance-Based Compensation. All performance-based compensation intended to comply with Section 162(m) must be certified by the Committee prior to payment. The Annual Incentive Bonus will be calculated and paid prior to March 15 of the year following the year for which the bonus was earned. The Long Term Incentive will be calculated, and options and shares earned or forfeited, prior to March 15 of the year following the end of the three year performance period. Additional shares of BOKF Common Stock issued for performance in excess of the target award shall be issued prior to March 15 of the year following the second anniversary of the end of the calendar year for which the compensation is being paid and shall be valued at the fair market value for BOKF Common Stock on NASDAQ on February 1 of such year.
Selected Officers. Selected officers will be paid discretionary performance-based compensation based upon achievement of individual objectives as determined by the Chief Executive Officer.
Recoupment of Incentive Compensation. In the event incorrect financial information or results were used as a basis for calculation of incentive compensation made pursuant to the Plan, the Independent Compensation Committee shall review the facts and circumstances giving rise to the incorrect information or results and may recommend to the Board of Directors, and the Board of Directors may direct, remedial action including the forfeiture of unpaid incentive compensation and/or the restitution of paid incentive compensation. The Board of Directors, in its discretion, may require that the foregoing forfeiture or restitution be made by any executive who is accountable for the incorrect financial information or results, as well as any executive who erroneously benefits from the incorrect financial information or results.
BOK FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
Tuesday, April 27, 2010
Bank of Oklahoma Tower
One Williams Center
Directions to the BOK Financial Corporation
Annual Meeting are available in the proxy
statement which can be viewed at
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to be Held on April 27, 2010.
Notice is hereby given that the Annual Meeting of Stockholders of BOK Financial Corporation will be held at Bank of Oklahoma Tower, One Williams Center, Tulsa, Oklahoma on Tuesday, April 27, 2010 at 11:00 a.m.
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting.
The Proxy Statement and Annual Report are available at www.ematerials.com/bokf
If you want to receive a paper copy or an e-mail with links to the electronic materials, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed on the reverse side of this notice on or before April 15, 2010 to facilitate timely delivery.
Matters intended to be acted upon at the meeting are listed below.
The Board of Directors recommends that you vote FOR the following proposals:
1. Election of Directors
2. Approval of the Amended and Restated BOK Financial Corporation 2003 Executive Incentive Plan
3. Ratify selection of Ernst & Young LLP as BOK Financial Corporations independent auditors for the fiscal year ending December 31, 2010
You may immediately vote your proxy on the Internet at:
Use the Internet to vote your proxy 24 hours a day, 7 days a week, until 12:00 p.m. (CT) on April 26, 2010.
Please have this Notice and the last four digits of your Social Security Number or Tax Identification Number available. Follow the instructions to vote your proxy.
Your Internet vote authorizes the Named Proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
To request paper copies of the proxy materials, which include the
proxy card, proxy statement and Annual Report, please contact us via:
The 3-digit company # and the 11-digit control # located in the box in the upper right hand corner on the front of this notice.
Your preference to receive printed materials via mail -or- to receive an email with links to the electronic materials.
If you choose email delivery you must include the email address.
If you would like this election to apply to delivery of material for all future meetings, write the word Permanent and include the last 4 digits of your Tax ID number in the email.
Address Change? Mark box, sign, and indicate changes below: o
TO VOTE BY INTERNET OR
TELEPHONE, SEE REVERSE SIDE OF
THIS PROXY CARD.
TO VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS BELOW, SIMPLY SIGN, DATE, AND RETURN THIS PROXY CARD.
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3.
(Instructions: To withhold authority to vote for any indicated nominee,
write the number(s) of the nominee(s) in the box provided to the right.)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL, UNLESS YOU ARE VOTING SHARES HELD IN THE BOK FINANCIAL THRIFT PLAN (THE PLAN), IN WHICH CASE, IF NO DIRECTION IS GIVEN FOR SHARES HELD IN THE PLAN, SUCH SHARES WILL BE VOTED BY THE TRUSTEE OF THE PLAN IN THE SAME RATIO AS THOSE SHARES CREDITED TO THE ACCOUNT OF THE PLAN MEMBERS WHO DO GIVE INSTRUCTIONS TO THE TRUSTEE.
Signature(s) in Box
Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.
BOK Financial Corporation
ANNUAL MEETING OF STOCKHOLDERS
Tuesday, April 27, 2010
Bank of Oklahoma Tower
One Williams Center
This proxy is solicited by the Board of Directors for use at the Annual Meeting on April 27, 2010.
The shares of stock you hold in your account or in a dividend reinvestment account will be voted as you specify on the reverse side.
If no choice is specified, the proxy will be voted FOR Items 1, 2 and 3.
By signing the proxy, you revoke all prior proxies and appoint Frederic Dorwart and Tamara R. Wagman, and each of them with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and all adjournments.
Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week
Your phone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card.