This excerpt taken from the SMBC DEF 14A filed Sep 21, 2009.
COMPENSATION OF EXECUTIVE OFFICERS
Compensation Restrictions in TARP Capital Purchase Program.
In December 2008, we participated in the TARP Program, and the Treasury invested approximately $9.55 million in our preferred stock and received a warrant for 114,326 shares of our common stock for $12.53 per share. As a participant in the TARP Program, we have implemented the following restrictions and requirements on executive compensation and are subject to additional limits on our tax deductions for senior executive pay:
As part of the analysis and decision-making relating to our participation in the TARP Program, the Compensation Committee and the Board of Directors was apprised of these restrictions and requirements on executive compensation. Our participation in the TARP Program was a catalyst for several actions by our Compensation Committee and senior executive officers:
The economic stimulus bill, entitled the American Recovery and Reinvestment Act of 2009 (the "ARRA"), which became effective February 17, 2009 contains additional restrictions and requirements on the executive compensation paid by participants in the TARP Program, including the following:
ARRA also requires all participants in the TARP Program to submit a "say-on-pay" proposal to a non-binding vote of shareholders at future annual meetings, whereby shareholders vote to adopt a resolution approving our executives' compensation as disclosed in this Proxy Statement. As a result of the foregoing, the Board, Compensation Committee and management have ensured that executive compensation complies with the requirements of the ARRA. All of these TARP restrictions and requirements on executive compensation are in place so long as Treasury owns our preferred stock.