(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
only (as permitted by Rule 14
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
BOK FINANCIAL CORPORATION
-----------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A (Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6 (i) (4) and 0-12.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value or transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined);
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11 (a) (2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
March 28, 2003
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 29, 2003, 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, 2002.
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.
Sincerely,
/s/ George B. Kaiser
George B. Kaiser, Chairman of the
Board of Directors
/s/ Stanley A. Lybarger
Stanley A. Lybarger, President and
Chief Executive Officer
IF YOU PLAN TO ATTEND THE 2003 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 WILLIAMS SECURITY DESK ON THE PLAZA LEVEL OF THE TOWER. YOU WILL
BE REQUIRED TO SURRENDER YOUR DRIVER'S LICENSE IN EXCHANGE FOR A VISITOR PASS.
YOUR DRIVER'S LICENSE WILL BE RETURNED TO YOU WHEN YOU DEPART THE BUILDING AND
RETURN THE VISITOR PASS.
BOK FINANCIAL CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 29, 2003
Each Shareholder:
Notice is hereby given that the Annual Meeting of Shareholders of BOK
Financial Corporation, 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 29, 2003, at 11:00 am. local time, for the following purposes:
1. To fix the number of directors to be elected at twenty-six (26) and to
elect twenty-six (26) persons as directors for a term of one year or
until their successors have been elected and qualified;
2. To approve the BOKF 2003 Stock Option Plan and the existing BOKF 1993,
1994, 1997, 2000 and 2001 Stock Option Plans;
3. To approve the Executive Performance-Based Compensation Plan; and
4. To transact such other business as may properly be brought before the
Annual Meeting or any adjournment or adjournments thereof.
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 the director nominees named
in the accompanying proxy statement and FOR proposals two and three.
Only shareholders of record at the close of business on March 14, 2003
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 74172.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Frederic Dorwart
FREDERIC DORWART, SECRETARY
MARCH 28, 2003
BOK FINANCIAL CORPORATION
BANK OF OKLAHOMA TOWER
TULSA, OKLAHOMA 74172
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 29, 2003
GENERAL
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 29, 2003, 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 28, 2003 to holders
of record of common stock as of the close of business on March 14, 2003.
VOTING BY PROXY
You may vote at the annual meeting by completing, signing and returning the
enclosed proxy card. 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 as follows:
o FOR the election of the twenty-six (26) nominees for director listed
in this Proxy Statement,
o To approve the BOKF 2003 Stock Option Plan and the existing BOKF 1993,
1994, 1997, 2000 and 2001 Stock Option Plans, and
o To approve the Executive Performance-Based Compensation Plan.
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 deem advisable. The Board of Directors
does not know of any other matter that is expected to be presented for
consideration at the annual meeting.
VOTING AND QUORUM REQUIREMENTS AT THE MEETING
Only holders of shares of common stock at the close of business on March
14, 2003 (the "record date") are entitled to notice of and to vote at the annual
meeting. On the record date, there were 55,222,789 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 one-third 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 to approve proposals two and three. Directors
are elected by a plurality vote, meaning that the twenty-six (26) nominees
receiving the highest number of votes FOR will be elected as directors.
George B. Kaiser currently owns approximately 68.2% 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.
ANNUAL REPORT
Our Annual Report to Shareholders, covering the fiscal year ended December
31, 2002, 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of March 14, 2003, there were 55,222,789 shares of common stock issued
and outstanding. Mr. Kaiser is the only shareholder known by BOK Financial to be
the beneficial owner of more than five percent (5%) of its outstanding common
stock. The following table sets forth, as of March 14, 2003, the beneficial
ownership of common stock of BOK Financial, by each director and nominee, the
chief executive officer (Mr. Lybarger) and the four other executive officers
named in the Summary Compensation Table appearing at page 19 below, and, as a
group, all of such persons and other executive officers not named in the table.
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(2)
------------------------ -------------------- ----------------
C. Fred Ball, Jr. 62,432(3) *
Sharon J. Bell 79,824(4) *
Peter C. Boylan, III 1,220 *
Joseph E. Cappy 2,315 *
Luke R. Corbett 1,482 *
William E. Durrett 133,564(5) *
Paul M. Elvir 28,918(6) *
James O. Goodwin 693 *
Robert G. Greer 61,276(7) *
David F. Griffin 36,568 *
V. Burns Hargis 35,654(8) *
E. Carey Joullian, IV 5,542(9) *
George B. Kaiser 42,071,773(10) 68.2%
David L. Kyle 1,490 *
Robert J. LaFortune 137,517 *
Philip C. Lauinger, Jr. 3,689(11) *
John C. Lopez 2,313 *
Stanley A. Lybarger 264,723(12)(13) *
Steven J. Malcolm 230 *
Paula Marshall-Chapman 0 *
Frank A. McPherson 3,776 *
Steven E. Moore 1,658 *
J. Larry Nichols 1,991 *
Robert L. Parker, Sr. 4,696(14) *
W. Jeffrey Pickryl 35,559(15) *
James A. Robinson 34,559 *
L. Francis Rooney, III 714,609(16) 1.3
Scott F. Zarrow 4,322(17) *
All directors, nominees and 43,732,393 70.5
executive officers as a group
(28 persons including the above)
* Less than one percent (1%)
(1) Except as otherwise indicated, all shares are beneficially owned and the
sole investment and voting power is held by the person named.
(2) All percentages are rounded to the nearest tenth, and are based upon the
number of shares outstanding as of the date set forth above. For purposes
of computing the percentages of the outstanding shares owned by the persons
described in the table, any shares such persons are deemed to own by having
a right to acquire such shares by exercise of an option are included, but
shares acquirable by other persons by the exercise of stock options are not
included.
(3) Includes options to purchase 46,987 shares of BOKF common stock immediately
exercisable. Also includes 4,120 shares owned by C. Fred Ball, Jr. and
Charlotte Ball, 4,966 shares owned by C. Fred Ball, Jr. IRA, and 3,339
shares held in the BOk Thrift Plan.
(4) Includes 2,632 shares owned by spouse. Also includes (i) 17,382 shares
owned by the J. A. Chapman and Leta M. Chapman Trust (1949), of which Ms.
Bell is individual trustee, and 20,105 shares owned by the Leta McFarlin
Chapman Trust (1974), of which Ms. Bell is co-trustee.
(5) Includes 125,747 shares indirectly owned by American Fidelity Assurance
Company, 1,058 shares indirectly owned by CPROP, INC., 189 shares
indirectly owned by CELP, and 1,485 shares indirectly owned by CAMCO.
(6) Includes options to purchase 24,262 shares of BOKF common stock immediately
exercisable. Also includes 2,624 shares held in the BOk Thrift Plan.
(7) Includes 19,479 shares indirectly owned by Robert G. Greer, IRA, and 5,934
shares owned by Mr. Greer's spouse, Joan Philen Greer.
(8) Includes options to purchase 31,503 shares of BOKF common stock immediately
exercisable. Also includes 880 shares held in the BOk Thrift Plan.
(9) Includes 2,552 shares owned by Joullian & Co., Inc. Also includes 562
shares indirectly owned as trustee for E. C. Joullian V, 562 shares
indirectly owned as trustee for Laura L. Joullian and 562 shares indirectly
owned as trustee for Ann P. Joullian.
(10) Mr. Kaiser's address is P. O. Box 21468, Tulsa, OK 74121-1468. Includes
6,510,586 shares which Mr. Kaiser may acquire through conversion of
249,490,880 shares of BOK Financial Series A Preferred Stock. Shares of
Series A Preferred Stock may be converted to Common Stock at any time at
the option of the holder, at a ratio of 1 share of Common Stock for each
38.32 shares of Series A Preferred Stock which has been adjusted to account
for the two for one stock split which was issued February 22, 1999 and also
gives effect to the 1 for 100 reverse stock split of Common Stock effected
December 17, 1991 and the November 18, 1993, November 17, 1994, November
27, 1995, November 27, 1996, November 26, 1997, November 25, 1998, October
18, 1999, May 18, 2001 and May 13, 2002 BOKF 3% Common Stock Dividends
payable by the issuance of BOKF Common Stock.
(11) Includes 142 shares indirectly owned by Mr. Lauinger and Claire F.
Lauinger.
(12) Includes 21,737 shares indirectly owned by Marcia Lybarger Living Trust;
includes 7,300 shares indirectly owned by Stanley A. Lybarger, IRA;
includes 2,231 shares held in the BOk Thrift Plan.
(13) Includes options to purchase 169,704 shares of BOKF Common Stock
immediately exercisable.
(14) Includes 462 shares indirectly owned by Mr. Parker as Co-Trustee for the
Robert L. Parker Trust dated February 10, 1967.
(15) Includes options to purchase 24,074 shares of BOKF common stock immediately
exercisable.
(16) Includes 166,766 shares indirectly owned by Rooney Brothers Company, 492
shares held in L. F. Rooney IRA, 540,855 shares indirectly owned by L. F.
Rooney Trust and 2,525 indirectly owned by Kathleen Rooney Trust, L. F.
Rooney Trust 2 of which Kathleen Rooney is individual trustee.
(17) Includes 4,263 shares indirectly owned by Scott F. Zarrow and Hilary I.
Zarrow, Co-Trustees for the Scott F. Zarrow Revocable Trust, dated
September 29, 1995.
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES AND VOTE REQUIRED TO ELECT NOMINEES
A board of twenty-six (26) directors is to be elected at the annual
meeting. The twenty-six (26) nominees for director who receive the highest
number of affirmative votes of the shares voting shall be elected as directors.
You may vote the number of shares of common stock you own for up to twenty-six
(26) 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 twenty-six (26) nominees named below.
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 successor has been elected
and qualified.
FAMILY RELATIONSHIPS
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, 2003. 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.
PRINCIPAL OCCUPATION, BUSINESS FIRST YEAR
EXPERIENCE DURING LAST 5 YEARS, AND BECAME A
NAME AGE DIRECTORSHIPS OF OTHER PUBLIC COMPANIES DIRECTOR
---- --- --------------------------------------- ----------
C. Fred Ball, Jr. 58 Chairman of BOT; previously, Mr. Ball served as Executive Vice 1999
President of Comerica Bank-Texas and later President of Comerica
Securities, Inc., where he was employed from 1991 until joining
Bank of Texas in 1997.
Sharon J. Bell 51 Attorney and Managing Partner, Rogers and Bell (Tulsa, Oklahoma); 1993
Trustee and General Counsel, Chapman-McFarlin Interests; formerly a
Director and President of Red River Oil Company (oil and gas
exploration and development).
Peter C. Boylan, III 39 Director, President and Chief Operating Officer of Liberty 2000
Broadband Interactive Television, Inc. (broadband interactive
television technology company providing services and products to
cable and satellite television operators worldwide), former
Co-President, Co-Chief Operating Officer, Member of the Office of
the Chief Executive Officer, and Director of Gemstar-TV Guide
International, Inc. (media, entertainment, technology and
communications company). Prior to the merger of Gemstar
Development Limited and TV Guide, Inc., in 2000, Mr. Boylan served
as President, Member of the Office of the Chairman and Director of
TV Guide, Inc. TV Guide, Inc. was formed in 1999 when United Video
Satellite Group, Inc., acquired TV Guide Magazine. Mr. Boylan had
served as President, Chief Operating Officer, Member of Executive
Committee and Director of United Video Satellite Group, Inc.
Joseph E. Cappy 68 Chairman and Chief Executive Officer of Dollar Thrifty Automotive 2001
Group (holding company that rents automobiles to leisure travelers
through its subsidiaries, Dollar Rent A Car Systems, Inc. and
Thrifty Rent-A-Car System, Inc.); former Vice President of
DaimlerChrysler Corporation beginning in August 1987 with
responsibility for rental car operations from June, 1993 until
December, 1997. Formerly, President, Chief Executive Officer and
Director of American Motors Corporation and General Marketing
Manager of Ford Motor Company's Lincoln-Mercury Division.
Paula Marshall-Chapman 49 Chief Executive Officer, The Bama Companies, Inc. (manufacturer and Nominee
marketer of food products); Ms. Marshall-Chapman is also a director
of Helmerich and Payne, Inc. (oil and gas drilling contractor) and
American Fidelity Corporation (insurance holding company). She is
also a former director of the Federal Reserve Bank of Kansas City.
Luke R. Corbett 56 Chairman and Chief Executive Officer of Kerr-McGee Corporation 1999
(energy and inorganic chemical company). Mr. Corbett was formerly
President and Chief Operating Officer of Kerr-McGee Corporation.
William E. Durrett 72 Senior Chairman of the Board and Director of American Fidelity 1991
Corporation (insurance holding company), and American Fidelity
Assurance Company (a registered investment advisor). Mr. Durrett is
also a director of Oklahoma Gas & Electric Company and past Chairman
of the Board of Integris Health.
James O. Goodwin 63 Chief Executive Officer, The Oklahoma Eagle Publishing Co. (a 1995
publishing company); Sole Proprietor, Goodwin & Goodwin Law Firm
(Tulsa, Oklahoma).
Robert G. Greer 69 Vice Chairman, Bank of Texas, N.A.; formerly Chairman of the Board, Nominee
Bank of Tanglewood, N.A., since 1996; Chairman of the Board of
Tanglewood Bank, N.A. and Vice Chairman of the Board of Northern
Trust Bank of Texas.
David F. Griffin 38 President, Griffin Communications, L.L.C. (owns and operates CBS Nominee
affiliated television stations in Oklahoma); formerly President and
General Manager, KWTV-9 (Oklahoma City).
V. Burns Hargis 57 Vice Chairman, BOK Financial and BOk and Director of BOSC, Inc.; 1993
formerly, Attorney and Shareholder of the law firm of McAfee & Taft
(Oklahoma City, Oklahoma).
E. Carey Joullian, IV 42 President and Chief Executive Officer of Mustang Fuel Corporation 1995
and subsidiaries; President and Manager, Joullian & Co., L.C.
George B. Kaiser 60 Chairman of the Board of BOK Financial and BOk; President and 1990
principal owner of Kaiser-Francis Oil Company (independent oil and
gas exploration and production company), and Fountains Continuum of
Care, Inc., (senior housing communities).
David L. Kyle 50 Chairman, President, Chief Executive Officer and Director of ONEOK, 2001
Inc. (energy company engaged in production, gathering, storage,
transportation, distribution and marketing of fuels); formerly,
president and Chief Operating Officer of ONG Transmission Company
and Oklahoma Natural Gas Company; Director, American Gas
Association and Southern Gas Association.
Robert J. LaFortune 76 Self-employed in the investment and management of personal 1993
financial holdings. Mr. LaFortune is also a director of Apco
Argentina, Inc.
Philip C. Lauinger, Jr. 67 Chairman and Chief Executive Officer of Lauinger Publishing Company 1991
(investment and advisory services to business publishing industry);
previously, Chairman of the Board and Chief Executive Officer of
PennWell Corporation (privately held business magazine and
information company).
John C. Lopez 63 Chairman, Chief Executive Officer and Controlling Owner of Lopez 1999
Foods, Inc. (processor of meat products for McDonald's and
Wal-Mart).
Stanley A. Lybarger 53 President and Chief Executive Officer of BOK Financial and BOk; 1991
previously President of BOk Oklahoma City Regional Office and
Executive Vice President of BOk with responsibility for corporate
banking.
Steven J. Malcolm 54 Chairman, President and Chief Executive Officer of The Williams 2002
Companies, Inc. (energy holding company); formerly, President and
Chief Executive Officer of Williams Energy Services after serving as
senior vice president and general manager of Midstream Gas and
Liquids for Williams Energy Services.
Frank A. McPherson 69 Retired Chairman of the Board and Chief Executive Officer of 1996
Kerr-McGee Corporation (energy and inorganic chemical company)
(1983-1997); Member, Board of Directors of Integris Health, Inc.,
ConocoPhillips, Inc., Tri-Continental Corporation, Seligman Quality
Fund, Inc., Seligman Select Municipal Fund, Inc., and Seligman
Group of Mutual Funds. Mr. McPherson is also a former director of
the Federal Reserve Bank of Kansas City.
Steven E. Moore 56 Chairman, President and Chief Executive Officer of OGE Energy Corp. 1998
(holding company for OG&E Electric Services, Enogex Inc. and
Origen, Inc.); Director, Oklahoma City Chamber of Commerce,
Oklahoma State Chamber of Commerce, and Edison Electric Institute.
J. Larry Nichols 60 Chairman of the Board, President and Chief Executive Officer Devon 1997
Energy Corporation; Director, Baker Hughes, Smedvig asa; Board of
Governors for American Stock Exchange, L.L.C.
Robert L. Parker, Sr. 79 Chairman and Director, Parker Drilling Co. (oil and gas drilling 1991
contractor); Director, Clayton Williams Energy, Inc. and Norwest
Bank of Texas-Kerrville.
James A. Robinson 74 Self-employed in the investment and management of personal 1993
financial holdings; formerly engaged in the practice of law,
general counsel for BOk, and banking.
L. Francis Rooney, III 49 Chairman of the Board and Chief Executive Officer, Manhattan 1995
Construction Company (construction and construction management).
Scott F. Zarrow 45 President of Foreman Investment Capital, L.L.C., (private venture 2001
capital investment firm). Mr. Zarrow previously served as Senior
Vice President for Sooner Pipe and Supply Corporation and held
numerous executive positions with its subsidiaries.
COMMITTEES; MEETINGS
During 2002, the Board of Directors of BOK Financial Corporation had a
standing Risk Oversight and Audit Committee comprised solely of outside
directors. The Audit Committee is responsible for recommending the selection of
independent auditors and supervising internal auditors. The Audit Committee also
reviews the results of internal and independent audits and reviews accounting
principles and practices. The Audit Committee was responsible for fulfilling the
trust audit requirements established by 12 CFR ss. 9.9. The Audit Committee
consisted of Messrs. Goodwin, Janzen, Joullian (Chairman), LaFortune and
Lauinger. The Audit Committee met five (5) times during 2002. The Audit
Committee intends to meet at least five (5) times in 2003. The Audit Committee
operates under a written charter adopted by the Board of Directors which was
published in the 2001 proxy statement.
In December 2002, the Board of Directors established an Independent
Compensation Committee, consisting of five 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 consists of Messrs. Cappy, Corbett, Kyle, Robinson and
Rooney. Except for performance based compensation which is intended to comply
with the requirements of Section 162(m), incentive compensation is administered
by the Chief Executive Officer and senior management as described in the Report
on Executive Compensation found on page 22 of this proxy statement.
The Board of Directors of BOK Financial does not have a standing nominating
committee. The Board of Directors will consider recommendations of shareholders
for director nominees, but there is no established procedure for such
recommendations.
The entire Board of Directors of BOK Financial met four (4) times during
2002. All directors of BOK Financial attended 75% of all meetings of the Board
of Directors and committees on which they served, except Messrs. Boylan,
Corbett, Lopez, Nichols and Robinson who were unable to attend 75% of the
meetings due to business conflicts.
REPORT OF THE RISK OVERSIGHT AND AUDIT COMMITTEE
The Risk Oversight and Audit Committee (the Audit Committee) oversees BOK
Financial Corporation's (the Company's) financial reporting process on behalf of
the Board of Directors. Management has the primary responsibility for the
financial statements and the reporting process including the systems of internal
controls. In fulfilling its oversight responsibilities, the Committee discussed
and reviewed the audited financial statements in the Annual Report with
management including a discussion of the quality, not just the acceptability, of
the accounting principles, the reasonableness of significant judgments, and the
clarity of the disclosures in the financial statements.
The Committee discussed and reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with accounting principles generally accepted in the United
States, their judgments as to the quality, not just the acceptability, of the
Company's accounting principles and such other matters as are required to be
discussed with the Committee under auditing standards generally accepted in the
United States, including Statement of Auditing Standards No. 61, Communications
with Audit Committees. In addition, the Committee has discussed with the
independent auditors the auditors' independence from management and the Company
including the matters in the written disclosures required by the Independence
Standards Board as required by Independence Standards Board Standard No. 1. The
Committee has also considered whether any non-audit services performed by the
independent auditors is compatible with maintaining the auditor's independence.
The Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Committee
meets with the internal and independent auditors with and without management
present, to discuss the results of their examinations, their evaluations of the
Company's internal controls, and the results of the Company's financial
reporting.
Each of the members of the Audit Committee qualifies as an "independent"
Director under the current listing standards of the National Association of
Securities Dealers (NASD).
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 financial statements be included in the Annual Report on Form 10-K for
the year ended December 31, 2002, for filing with the Securities and Exchange
Commission. The Committee and the Board have also recommended the selection of
the Company's independent auditors.
James O. Goodwin
Howard Janzen
E. Carey Joullian IV, Committee Chairman
Robert J. LaFortune
Philip C. Lauinger, Jr.
The following table provides the various fees and out-of-pocket costs
billed by Ernst & Young, LLP for the fiscal year ended December 31, 2002:
FINANCIAL INFORMATION SYSTEMS ALL OTHER
AUDIT FEES DESIGN AND IMPLEMENTATION FEES FEES*
---------- ------------------------------ ---------
$375,000 ___ $274,827
*Includes audit related fees of $196,050 and non-audit fees of $78,777.
The Audit Committee of the Board of Directors has considered whether the
provision of Ernst &Young LLP of all other services included in the fees set
forth in the table above under "All Other Fees" is compatible with maintaining
the independence of Ernst & Young LLP.
The Audit Committee has also met and discussed with management and with its
legal and accounting advisors the new rules and regulations under the recently
adopted Sarbanes-Oxley Act of 2002 and related SEC and Nasdaq rules.
COMPENSATION OF DIRECTORS
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 BOKF 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 BOKF 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 $250 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 $500 in cash for each committee meeting chaired. No such
fees are paid for meetings not attended.
PROPOSAL TWO
APPROVAL OF THE BOKF 2003 STOCK OPTION PLAN AND
EXISTING BOKF 1993, 1994, 1997, 2000 AND 2001 STOCK OPTION PLANS
The Board of Directors is proposing for shareholder approval the BOKF 2003
Stock Option Plan (the "2003 Plan") and the existing BOKF 1993, 1994, 1997, 2000
and 2001 stock option plans (the "Existing Plans"). The 2003 Plan and the
Existing Plans, as amended, (collectively, the "Plans") are the same in all
material respects except with a few provisions of the 2001 Plan as noted below.
Certain of the principal features of the plans are described below. The full
text of the 2003 Plan is annexed as Appendix A and is incorporated herein by
reference. You may obtain a copy of the Existing Plans, as amended, by sending a
written request to our Chief Financial Officer at Bank of Oklahoma Tower, One
Williams Center, Tulsa, Oklahoma 74172.
The Company is seeking shareholder approval of the Plans to qualify
portions of the compensation paid under the plans as "qualified
performance-based compensation" as defined in Section 162(m) of the Internal
Revenue Code. The Board of Directors believes that the Plans benefit
shareholders by continuing the tradition of linking executive compensation to
Company performance and by qualifying amounts paid pursuant to the Plans for a
U.S. federal income tax deduction. SHAREHOLDERS ARE URGED TO READ THE PLANS IN
THEIR ENTIRETY BEFORE CASTING THEIR VOTES.
GENERAL TERMS OF STOCK OPTION PLANS
o RESERVED SHARES. A total of 2,000,000 shares of common stock are
reserved for issuance in connection with the exercise of stock options
granted under the 2003 Plan. As of March 1, 2003, no options have been
granted under the 2003 Plan. A total of 6,451,653 options have been
awarded under the Existing Plans of which 3,510,689 options are
outstanding as of March 1, 2003. A sufficient number of shares have
been reserved for issuance in connection with the exercise of stock
options granted under the Existing Plans.
o ADMINISTRATION. Except for performance-based compensation which is
intended to comply with the requirements of Section 162(m) as
discussed in Proposal Three, the stock options are administered by the
Chief Executive Officer and senior management.
o ELIGIBILITY. All employees of BOKF and its subsidiaries are eligible
to be designated as participants and awarded options under the Plans.
Participants are designated based upon a subjective determination of
the present and potential contributions of the employee to the success
of the Company. Except for options intended to comply with Section
162(m), those employees to whom stock option awards are made are
selected by the Chairman of the Board of Directors and the Chief
Executive Officer.
o PURCHASE PRICE. The per share option price is the fair market value of
the Company's common stock on NASDAQ on the date of the award letter.
o MAXIMUM SHARES. The maximum number of options which may be granted to
any one participant during a calendar year period is 100,000.
o VESTING. One-seventh of each award of options vests and becomes
exercisable on each anniversary of the award date, except with regard
to those options granted pursuant to the 2001 Plan which vest in their
entirety on the second anniversary of the award date.
o EXPIRATION. Options must be exercised within three years of vesting or
they expire, except with regard to the 2001 Plan which requires that
options must be exercised within 45 days of vesting or they expire.
o NON-TRANSFERABILITY. The options may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated, except by
will or by the laws of descent and distribution.
o TERMINATION. If the employment of the participant terminates for any
reason, including death, disability, retirement, resignation or
involuntary termination, the participant's options automatically
terminate except:
o if the Chairman of the Board and the Chief Executive Officer, in
their sole discretion, subject to approval by the Board, extend
the participants options;
o if termination is by reason of death or disability, the
participant (or the participant's personal representative) may
purchase any of participants option shares which the participant
had the right to purchase immediately preceding the date of the
participant's termination of employment; or
o if the participant is involuntarily terminated without cause
within one year of a change in control, as defined in the Plans,
the participant may purchase, within 90 days of participant's
termination of employment, all of participant's option shares.
o AMENDMENT. The Board of Directors may amend or terminate the Plan but
no amendment or termination shall affect the participant's rights
under a previously granted stock option without the consent of the
participant.
o TAX EFFECTS. The Plans are not qualified under Section 401(a) of the
Internal Revenue Code. The following is only a summary of the effect
of federal income taxation upon employees and the Company with respect
to compensation under the Plans. It does not purport to be complete
and does not discuss the tax consequences arising in the context of
the employee's death or the income tax laws of any municipality, state
or foreign country in which the employee's income or gain may be
taxable. Generally, the tax effects are:
o Provided that compensation (other than performance-based
compensation qualified under Section 162(m)) does not exceed $1
million for each of the corporation's chief executive officer and
four most highly compensated executive officers other than the
chief executive officer, the Company will be entitled to an
income tax deduction at the date of exercise of the options by
the participants. The amount of the deduction will be equal to
the spread between the fair market value of the option stock (as
quoted by NASDAQ) and the exercise price of the option.
o Participants will recognize income at the date of exercise of the
Options in an amount equal to the deduction allowed as stated
above. Income recognized due to the exercise of an option will be
subject to withholding and reported to the employee on form W-2.
Participants will not be subject to any further income
recognition until a taxable transaction occurs involving the
purchased stock. The basis in the stock is equal to the fair
market value at the date of exercise, and future transactions
will be subject to capital asset rules.
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 Plans.
PROPOSAL THREE
APPROVAL OF EXECUTIVE PERFORMANCE-BASED COMPENSATION PLAN
o 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 corporation's chief executive officer
and four most highly compensated executive officers other than the
chief executive 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 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.
o 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. Incentive compensation
that is intended to qualify as performance-based compensation under
Section 162(m) is administered by the independent compensation
committee discussed below. Except for options intended to comply with
Section 162(m), those employees to whom stock option awards are made
are selected by the Chairman of the Board of Directors and the Chief
Executive Officer.
o INDEPENDENT COMPENSATION COMMITTEE. In December 2002, the Board of
Directors established an Independent Compensation Committee,
consisting of five outside directors, to administer a performance
based compensation plan for senior executives as required by the
provisions of Section 162(m). The current members of the Committee are
Messrs. Cappy, Kyle, Rooney, Robinson, and Corbett. The Independent
Compensation Committee, with the assistance of a leading executive
compensation consulting firm, has developed a performance-based
compensation plan called the 2003 Executive Incentive Plan which the
shareholders are being asked to approve. You may obtain a copy of the
2003 Executive Incentive Plan by sending a written request to our
Chief Financial Officer at Bank of Oklahoma Tower, One Williams
Center, Tulsa, Oklahoma 74172.
o PERFORMANCE-BASED COMPENSATION. Performance-based compensation
consists of annual bonus and long term incentive compensation.
Executives who report directly to the Chief Executive Officer and
other selected officers approved by the Independent Compensation
Committee may participate. For 2003, a participant may earn (i) an
annual bonus equal to a specified percentage (not to exceed 50%) of
annual salary paid in cash and (ii) long term incentive compensation
paid in the manner discussed below.
o A participant will earn an annual bonus based on a matrix
pursuant to which 33% of the targeted annual bonus compensation
will be earned if 80% of the goal is met, 100% of the targeted
bonus compensation earned if 100% of the goal is met, and 200% of
the targeted bonus compensation earned if 120% of the goal is
met.
o A participant will earn long term incentive based on a matrix
pursuant to which 25% of the targeted long term incentive
compensation will be earned if the goal less five percentage
points is met, 100% of the targeted long term incentive
compensation will be earned if 100% of the goal is met, and 150%
of the targeted long term compensation will be earned if the goal
plus five percentage points is met.
Except in the case of an award intended to qualify under Section
162(m), management may modify the performance goals and compensation
plan as deemed equitable or appropriate.
o PERFORMANCE MEASURES. The target compensation, annual performance
goals for bonus and long term incentive compensation, and manner of
payment of long term incentive compensation are set by the Independent
Compensation Committee for each participant on an individual basis.
The performance goals are currently based on a combination of (i)
Company earnings per share measured against peer group earnings per
share and (ii) business unit performance and attainment of individual
goals.
o By achieving 120% of the Annual Incentive Bonus measure, each
participant will earn 200% of her or his target bonus. The
earnings per share measure is the earnings per share growth of
the 50th percentile (or median) of a peer group of banks for the
trailing two-year period determined as of the end of the year in
respect of which the bonus is being paid. No participant may
receive an Annual Incentive Bonus of more than $2,000,000.
o By achieving the Long Term Incentive measure plus five percentage
points, each participant will earn 150% of her or his target
earnings per share incentive. The earnings per share measure is
the earnings per share growth of the 50th percentile (or median)
of a peer group of banks for the trailing three-year period
determined as of the second anniversary of the end of the year in
respect of which the compensation is being paid.
o The Chief Executive Officer will assign the Company earnings and
business unit weightings to participants on an individual basis.
With respect to compensation intended to qualify under Section
162m, the Committee will approve the weightings and any
individually established goals prior to March 31.
o Fifty percent of the bonus and fifty percent of any performance
shares issued for long term incentive compensation, calculated on
the foregoing basis, may be adjusted downward at the discretion
of the Independent Compensation Committee based upon
recommendations of the Chief Executive Officer.
Other objectives which may be used by the Independent Compensation
Committee are return on equity, total earnings, earnings growth,
return on capital, return on assets, share price (including, but not
limited to growth measures and total shareholder return), cash flow,
revenues, market share, overhead or other expense reductions, and
operating margins.
o ISSUANCE OF LONG TERM INCENTIVE COMPENSATION. Long Term Incentive
Compensation which is earned by a participant will be paid by the
award of options pursuant to the BOKF 2003 Stock Option Plan, by the
issuance of performance shares, or by a combination of options and
performance shares.
o Performance shares will be shares of BOKF Common Stock issued before
March 15 of the year in respect of which the long term incentive
compensation is being paid. Performance shares will vest only on the
fifth anniversary of the last day of the year for which the shares are
issued. If the employment of the Executive is terminated for any
reason prior to such vesting the shares will be forfeited. The shares
may not be sold for three years after the shares vest unless following
such sale, the Executive would 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. Additional performance
shares will be issued, or performance shares will be forfeited, in
accordance with the performance goals discussed above. No more than
30,000 performance shares may be issued in any year to a participant.
o Stock options will be options issued pursuant to the BOKF 2003 Stock
Option Plan. The Options may not be exercised prior to the expiration
of the three year performance period. Additional options will be
issued, or options will be forfeited, in accordance with the
performance goals discussed above.
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 Performance-Based Compensation Plan under Section
162(m).
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information about the Company's equity
compensations plans in effect at December 31, 2002, aggregated for two
categories of plans: those approved by shareholders and those not approved by
shareholders. Until such time as the Company's shareholders approve Proposals
Two and Three in this proxy statement, none of the Company's plans have been
approved by shareholders. Plans included in the following table consist of the
BOKF 1993, 1994, 1997, 2000 and 2001 Stock Option Plans, as well as the BOKF
Directors Stock Compensation Plan.
The material features of the BOKF Directors Stock Compensation Plan are
described in this proxy statement under "Proposal One - Compensation of
Directors." The material features of the BOKF 1993, 1994, 1997, 2000 and 2001
Stock Option Plans are described in this proxy statement under "Proposal Two -
General Terms of the Stock Options Plans."
Number of securities
remaining available for
future issuance under
Number of securities to Weighted-average equity compensation
be issued upon exercise exercise price of plans (excluding
of outstanding options, outstanding options, securities reflected( in
Plan Category warrants, and rights(2) warrants, and rights(2) the first column)(2)
------------- ----------------------- ----------------------- ------------------------
Equity compensation plans approved
by security holders None None None
Equity compensation plans not
approved by security holders 3,042,624 $20.90 2,558,308(1)
----------------------- ----------------------- ------------------------
Total 3,042,624 $20.90 2,558,308
(1) Includes 501,565 shares of common stock which may be awarded pursuant to the
BOKF Directors Stock Compensation Plan.
(2) As of December 31, 2002.
EXECUTIVE OFFICERS
Certain information concerning the executive officers of BOK Financial,
BOk, BOT, Bank of Albuquerque, NA and Bank of Arkansas, NA is set forth below:
C. FRED BALL, JR., age 58, is Chairman and Chief Executive Officer of the
Bank of Texas and is responsible for all banking activities in the State of
Texas for BOKF. Before joining Bank of Texas in 1997, he was Executive Vice
President of Comerica Bank-Texas and later President of Comerica Securities,
Inc.
STEVEN G. BRADSHAW, age 43, is Executive Vice President of BOk, manager of
the Consumer Banking Department and Chairman of BOSC, Inc., BOk's securities
firm. Before joining BOK Financial, Bradshaw spent six years managing the
brokerage operation at Sooner Federal. Mr. Bradshaw has been with BOK Financial
for 11 years.
JEFFERY R. DUNN, age 40, is Chairman, President and Chief Executive Officer
of Bank of Arkansas. Prior to becoming President of Bank of Arkansas, he served
as Senior Vice President of Commercial Lending. He has been with BOK Financial
for 14 years.
PAUL M. ELVIR, age 62, is Executive Vice President and Manager of the BOk
Operations and Technology Division. Mr. Elvir began working for BOk in July,
1997. Previously, Mr. Elvir was President of Liberty Payments Services, Inc.
("LPSI"), a subsidiary of Banc One Services Corporation. Prior to serving as
President of LPSI, Mr. Elvir served as an Executive Vice President of Banc One
Services Corporation.
MARK W. FUNKE, age 47, is President, BOk Oklahoma City and Commercial
Banking Manager, Oklahoma City. Mr. Funke is also responsible for BOk's Business
Banking Group, which manages BOk's statewide small business banking efforts, and
all of its Community Banking Offices. He joined BOk in 1984 as Vice President in
the financial institutions department and was named to his current position in
1997. Before joining BOk, he was a commercial lender with Republic Bank in
Houston for seven years.
ROBERT G. GREER, age 69, is Vice Chairman of BOT. Mr. Greer joined BOT as a
result of the acquisition of Bank of Tanglewood, N.A. Prior to the merger, Mr.
Greer was Chairman of the Board, Bank of Tanglewood, N.A., a position he held
beginning in 1996. Prior to 1996, Mr. Greer served as Chairman of the Board of
Bank of Tanglewood, N.A. and Vice Chairman of the Board of Northern Trust Bank
of Texas.
V. BURNS HARGIS, age 57, is Vice Chairman, BOK Financial and BOk and
Director of BOSC, Inc. Mr. Hargis joined BOk in November, 1997. Previously, Mr.
Hargis was an attorney with the law firm of McAfee & Taft (Oklahoma City,
Oklahoma).
EUGENE A. HARRIS, age 60, is a director and Executive Vice President of
BOk, Chief Credit Officer and Manager of the Credit Administration Division. Mr.
Harris has been with BOk for 22 years.
H. JAMES HOLLOMAN, age 51, is Executive Vice President of BOk and Manager
of the Trust Division. Before joining Bank of Oklahoma, he spent 12 years at
First Union National Bank in Charlotte, NC. Mr. Holliman has been with Bank of
Oklahoma since 1985.
JAMES L. HUNTZINGER, age 52, is Chief Investment Officer of BOK. Mr.
Huntzinger was previously Financial Manager, Capital Markets and Chief
Investment Officer of the Trust Division. He has been with BOk since 1982.
GEORGE B. KAISER, age 60, is Chairman of the Board of BOK Financial and
BOk; President and principal owner of Kaiser-Francis Oil Company, an independent
oil and gas exploration and production company, and Fountains Continuum of Care,
Inc., which holds interest in senior housing communities.
DAVID L. LAUGHLIN, age 50, is Senior Vice President and President of the
Mortgage Banking Division. He joined BOk in 1986 as the Secondary Marketing
Manager, in charge of retail production and secondary marketing, and became
President of Mortgage Banking in 1993. He has served two terms on the Fannie Mae
Advisory Board and is a past President of the Oklahoma Mortgage Bankers'
Association and the Tulsa Mortgage Bankers Association. Mr. Laughlin has been
with BOk for 17 years.
STANLEY A. LYBARGER, age 53, is President and Chief Executive Officer of
BOK Financial and BOk. Mr. Lybarger has been with BOk for 29 years. Previously,
he was President of Bank of Oklahoma's Oklahoma City Regional Office and
Executive Vice President of Bank of Oklahoma with responsibility for corporate
banking.
JOHN C. MORROW, age 47, is Senior Vice President and serves as Director of
Financial Accounting and Reporting. He joined BOk Financial in 1993. He was
previously with Ernst & Young LLP for 10 years.
STEVEN E. NELL, age 41, is Executive Vice President and Chief Financial
Officer for BOK Financial and BOk. He joined BOK Financial in 1992. He was
previously with Ernst & Young LLP for 8 years.
W. JEFFREY PICKRYL, age 51, is Executive Vice President responsible for
Commercial Banking in Tulsa, as well as statewide energy and real estate
lending. Before joining BOk in 1997, he was president and Chief Credit Officer
for Liberty Bancorp, Inc. where he worked for 14 years. He had previously worked
at Arizona Bank in Phoenix.
PAUL A. SOWARDS, age 51, is President of Bank of Albuquerque. Before
joining Bank of Albuquerque in March, 2000, Mr. Sowards was President of Bank of
America in New Mexico. Prior to his election as President in New Mexico, Mr.
Sowards was Executive Vice President and Commercial Banking Market Manager,
responsible for commercial lending, treasury management and capital markets.
THOMAS S. SWILEY, age 53, is President of Bank of Texas. Prior to joining
Bank of Texas in March, 2001, Mr. Swiley was Managing Director of Credit
Products, with responsibility for the Southwest region, for Bank of America.
GREGORY K. SYMONS, age 50, is Chairman and Chief Executive Officer of Bank
of Albuquerque and is responsible for commercial banking in New Mexico. He
previously served as BOk's Senior Vice President. Mr. Symons has been with BOK
Financial for 26 years.
VALERIE C. TOALSON, age 37, is Corporate Controller. She has been with BOK
Financial for 10 years. She was previously with Price Waterhouse Coopers for 6
years.
All executive officers serve at the pleasure of the Board of Directors.
Messrs. Hargis and Lybarger have employment agreements which are discussed below
on page 21.
EXECUTIVE COMPENSATION
The following table sets forth summary information concerning the
compensation of those persons who were, at December 31, 2002, (i) the Chief
Executive Officer and (ii) the four other most highly compensated executive
offices of the Company. These five offices are hereafter referred to
collectively as the "Named Executive Officers".
Summary Compensation Table (1)
Annual Compensation Long Term Awards (2)
Name and Other Annual Options/ All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($) SARs (#) Compensation (3)
------------------ ---- ---------- --------- ---------------- -------- -------------
Stanley A. Lybarger 2002 $625,000 $175,000 $1,311,889 16,086 $22,000
President & Chief Executive 2001 475,000 150,000 870,648 58,040 18,700
Officer, BOK Financial and 2000 425,000 125,000 368,756 50,000 18,700
BOk
C. Fred Ball, Jr. 2002 270,000 145,000 190,451 39,028 22,000
President & Chief Executive 2001 255,000 130,000 0 34,824 18,700
Officer, Bank of Texas, N.A. 2000 240,000 93,500 0 30,000 16,150
Paul M. Elvir 2002 247,000 135,000 68,448 18,171 23,000
Executive Vice President, 2001 240,000 120,000 25,422 14,412 19,550
Manager, BOk Operations and 2000 233,000 75,000 0 13,000 17,000
Technology
V. Burns Hargis 2002 273,500 65,000 84,271 19,026 19,800
Vice Chairman, BOK 2001 265,225 65,000 39,943 17,123 15,470
Financial and BOk 2000 253,380 50,000 0 15,000 15,470
W. Jeffrey Pickryl 2002 218,000 130,000 113,257 27,779 20,000
Executive Vice President, 2001 210,000 125,000 161,139 23,216 17,000
Commercial Banking 2000 200,000 278,027 0 22,000 14,450
1 No Restricted Stock Awards or Long Term Incentive Plan payouts were made in 2000, 2001 or 2002 and therefore no columns are
included for such items in the Summary Compensation Table. The Summary Compensation Table has been adjusted to reflect a
two-for-one Common Stock split in the form of a 100% stock dividend paid on February 22, 1999.
2 After giving effect to November 18, 1993, November 17, 1994, November 27, 1995, November 27, 1996, November 26, 1997,
November 25, 1998, October 18, 1999, May 1, 2001 and May 13, 2002 3% BOKF Common Stock Dividends Payable in Kind in BOKF
Common Stock.
3 Amounts shown in this column are derived from the following: (i) Mr. Lybarger, $10,200, 2000; $10,200, 2001; $12,000,
2002 - Company payment to the defined benefit plan ("DBP"); $8,500, 2000; $8,500, 2001; $10,000, 2002 - Company matching
contributions to 401(K) Thrift Plan ("DCP"); (ii) Mr. Ball, $12,750, 2000; $13,600, 2001; $16,000, 2002 - DBP; $3,400,
2000; $5,100, 2001; $6,000, 2002 - DCP; (iii) Mr. Elvir, $13,600, 2000, $14,450, 2001; $17,000, 2002 - DBP; $3,400, 2000;
$5,100, 2001; $6,000, 2002 - DCP; (iv) Mr. Hargis, $12,750, 2000; $12,750, 2001; $15,000, 2002 - DBP; $2,720, 2000; $2,720,
2001; $4,800, 2002 - DCP; and (v) Mr. Pickryl, $11,050, 2000; $11,900, 2001; $14,000, 2002 - DBP; $3,400, 2000; $5,100,
2001; $6,000, 2002 - DCP.
The following table sets forth certain information concerning stock options
granted to the Named Executive Officers during the 2002 fiscal year.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Exercise or % of Total Options/SARs Total Grant
Grant Options/SARs Base Price Granted to Employees Expiration Date Present
Name No. Granted (#)(1) ($/Sh)(2) in Fiscal Year Date Value $(3)
---- ----- -------------- ----------- ----------------------- ---------- -------------
Stanley A. Lybarger 1 8,281 $33.49 4.19 % (2) $34,697
2 7,805 32.89 4.16 (2) 32,469
3 0 -- -- -- --
C. Fred Ball, Jr. 1 4,969 33.49 6.01 (2) 20,820
2 4,059 32.89 5.00 (2) 16,885
3 30,000 32.75 5.27 (2) 251,100
Paul M. Elvir 1 2,485 33.49 3.01 (2) 10,412
2 2,186 32.89 2.69 (2) 9,094
3 13,500 32.75 2.37 (2) 112,995
V. Burns Hargis 1 3,216 33.49 3.89 (2) 13,475
2 2,810 32.89 3.46 (2) 11,690
3 13,000 32.75 2.28 (2) 108,810
W. Jeffrey Pickryl 1 3,313 33.49 4.01 (2) 13,881
2 2,966 32.89 3.65 (2) 12,339
3 21,500 32.75 3.78 (2) 179,955
1 Options related to compensation for services rendered in 2002 were awarded on three occasions. The dates of the Awards
were November 1, 2002 ("Grant #1"), December 2, 2002 ("Grant #2"), and January 3, 2003 ("Grant #3"). Grants # 1 and #2 were
awarded pursuant to the BOKF 2001 Stock Option Plan and Grant #3 was awarded pursuant to the BOKF 2000 Stock Option Plan.
2 o All Grant #1 options vest and become exercisable on November 1, 2004 and expire 45 days after vesting.
o All Grant #2 options vest and become exercisable on December 2, 2004 and expire 45 days after vesting.
o One-seventh of the Grant #3 options vest and become exercisable on January 3 of each year, commencing on January 3, 2004.
Grant #3 vested options expire three years after vesting.
3 Present value at date of grant is based on the Black-Scholes Option Pricing Model adopted for use in valuing exercise stock
options based on the following assumptions:
o Grant #1: 19.0 volatility factor, 1.53% risk free rate of return, $33.49 underlying price, no dividends;
o Grant #2: 19.0 volatility factor, 1.65% risk free rate of return, $32.89 underlying price, no dividends;
o Grant #3: 19.0 volatility factor, weighted average 3.34% risk free rate of return, $32.75 underlying price, no
dividends.
The actual value, if any, an executive may realize will depend on the excess of the stock price over the exercise price on the
date the option is exercised, so there is no assurance the value realized by the named executive will be at or near the value
estimated by the Black-Scholes Model.
The following table sets forth certain information concerning the exercise
of stock options by the Named Executive Officers during fiscal year 2002 and the
2002 fiscal year-end value of unexercised options.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Shares Value Number of Unexercised Value of Unexercised In the Money
Acquired on Realized Options/SARs Options/SARs
Name Exercise (#) ($) at FY-End (#) at FY-End ($)(1)
----------------------- ------------- ------------ --------------------------------- -------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Stanley A. Lybarger 56,840 $1,311,889 169,704 185,213 $2,954,566 $1,782,227
C. Fred Ball, Jr. 13,994 190,451 46,987 130,485 585,969 893,783
Paul M. Elvir 4,670 68,448 24,262 58,688 312,210 405,320
V. Burns Hargis 6,025 84,271 31,503 69,926 407,359 517,661
W. Jeffrey Pickryl 8,898 113,257 24,074 91,854 293,653 637,084
1 Values are calculated by subtracting the exercise or base price from the fair market value of the stock as of the exercise
date or fiscal year-end, as appropriate.
A perpetual employment agreement is in effect between BOk and Mr. Lybarger.
Generally, the agreement provides that Mr. Lybarger will continue to be employed
in his present position and at his current rate of compensation. BOk may
terminate the employment agreement and be liable for termination benefits not to
exceed regular compensation and benefit coverage for twelve months (with
termination benefits to be reduced by the amount of compensation received by Mr.
Lybarger from other sources during the seventh through twelfth months after
termination). In the event of a change of control of BOk, as defined in the
employment agreement, then Mr. Lybarger has the option, for a period of six
months after the change of control, to resign and receive the same termination
benefits as described in the preceding sentence in the event of termination by
BOk.
An employment agreement is in effect between BOK Financial and Mr. Hargis.
Generally, the agreement provides that Mr. Hargis will be employed by BOK
Financial in the position of Vice Chairman for five years from December 1, 2003.
BOK Financial may terminate the agreement without cause subject to payment of
the agreed annual compensation and benefits for the remaining contract term. If
such termination results within one year of a change of control, as defined in
the agreement, Mr. Hargis shall receive his current monthly salary times the
remaining months in the term of his contract divided by two. If such termination
is not within one year of a change of control, Mr. Hargis shall receive salary
and benefits for three months from the date of termination.
REPORT ON EXECUTIVE COMPENSATION
In December 2002, the Board of Directors established an Independent
Compensation Committee consisting of five 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 current members
of the committee are Messrs. Cappy, Kyle, Rooney, Robinson and Corbett. The
Independent Compensation Committee, with the assistance of a leading executive
compensation consulting firm, has developed a performance based compensation
plan which the shareholders are being asked to approve at the 2003 Annual
Shareholders Meeting.
In addition to the performance-based compensation which is intended to
comply with the requirements of Section 162(m), the company employs a wide range
of other incentive compensation for its employees including a combination of
annual salary, bonuses, pension plans and stock options. Such compensation is
designed to attract and retain quality management and reward long term
performance of the company. Compensation of the executive officers, other than
Mr. Lybarger, has in practice been determined by Mr. Lybarger, the President and
Chief Executive Officer, and Mr. Kaiser, the Chairman of the Board. Messrs.
Kaiser and Lybarger are directors of the Company and are herein sometimes
referred to collectively as the "Informal Compensation Committee".
With respect to the 2002 fiscal year, the compensation paid executive
officers was based on the evaluation by the Informal Compensation Committee of
the performance of the Company and the performance of the individual officer
(except that the evaluation of and compensation of Mr. Lybarger was determined
solely by Mr. Kaiser). The cash and noncash compensation awarded the executive
officers was based on the performance of the Company in meeting the corporate
goals established for business development, expansion of market coverage,
financial achievement and other areas. The responsibility of each executive
officer for the various established corporate goals and the performance in
meeting those goals were considered in establishing executive compensation.
The foregoing report on executive compensation is made by Messrs. Kaiser
and Lybarger. The newly formed Independent Compensation Committee has nothing to
report with respect to the 2002 fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Independent Compensation Committee were at any
time officers or employees of the Company or any of its subsidiaries or had any
relationship with the Company requiring disclosure under the Securities and
Exchange Commission regulations. Messrs. Kaiser and Lybarger, who make up the
Informal Compensation Committee which administers all compensation not intended
to comply with Section 162(m), determine the majority of the compensation of the
executive officers. See "Report of Executive Compensation" and "Certain
Transactions".
SHAREHOLDER RETURN PERFORMANCE GRAPH
The BOKF Common Stock (with non-detachable rights to purchase fifteen
additional BOKF Common shares at $0.054625 per share) was registered pursuant to
the Securities Exchange Act of 1934 and listed for trading on NASDAQ on
September 5, 1991. The BOKF shares traded with the rights attached through
October 28, 1991. The BOKF shares traded ex-rights from and after the opening or
trading on October 29, 1991. Set forth below is a line graph comparing the
change in cumulative shareholder return on the Common Stock of BOK Financial
against the cumulative total shareholders return of the NASDAQ Index, the NASDAQ
Bank Index, and the KBW 50 Bank Index for the period commencing December 31,
1997 and ending December 31, 2002.*
Comparison of Cumulative Total Return Graph shown here. Data points reflected in
indexes below.
========================================================================================================================
12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001 12/31/2002
========================================================================================================================
BOKF $ 100.00 $ 125.17 $ 110.65 $ 116.38 $ 177.91 $ 188.53
------------------------------------------------------------------------------------------------------------------------
NASDQ Bank Stocks $ 100.00 $ 99.36 $ 95.51 $ 108.94 $ 117.96 $ 120.60
------------------------------------------------------------------------------------------------------------------------
KBW 50 Bank $ 100.00 $ 108.28 $ 104.52 $ 125.48 $ 120.31 $ 111.87
------------------------------------------------------------------------------------------------------------------------
NASDQ (CSP U.S. Company) $ 100.00 $ 140.99 $ 261.48 $ 157.42 $ 124.89 $ 86.34
========================================================================================================================
* Graph assumes value of an investment in the Company's Common Stock for each
index was $100 on December 31, 1996. The KBW 50 Bank index is the Keefe,
Bruyette & Woods, Inc. index, which is available only for calendar quarter
end periods. No dividends were paid on BOK Financial Common Stock except
(i) on November 17, 1993, the Company paid a 3% dividend on BOK Financial
Common Stock outstanding as of November 9, 1993 payable in kind by the
issuance of BOK Financial Stock, (ii) on November 17, 1994, the Company
paid a 3% dividend on BOK Financial Common Stock outstanding as of November
8, 1994 payable in kind by the issuance of BOK Financial Common Stock,
(iii) on November 27, 1995, the Company paid a 3% dividend on BOK Financial
Common Stock outstanding as of November 17, 1995 payable in kind by the
issuance of BOK Financial Common Stock, (iv) on November 27, 1996, the
Company paid a 3% dividend on BOK Financial Common Stock outstanding as of
November 18, 1996 payable in kind by the issuance of BOK Financial Common
Stock; (v) on November 26, 1997, the Company paid a 3% dividend on BOK
Financial Common Stock outstanding as of November 17, 1997, payable in kind
by the issuance of BOK Financial Common Stock, (vi) on November 25, 1998,
the Company paid a 3% dividend on BOK Financial Common Stock outstanding as
of November 13, 1998, (vii) on October 18, 1999, the Company paid a 3%
dividend on BOK Financial Common Stock outstanding as of October 5, 1999,
(viii) and on May 18, 2001, the Company paid a 3% dividend on BOK Financial
Common Stock outstanding as of May 7, 2001 and on May 29, 2002, the Company
paid a 3% dividend on BOK Financial Common Stock outstanding as of May 13,
2002. The graph has been adjusted to reflect a two-for-one Common Stock
split in the form of a 100% stock dividend paid on February 22, 1999.
INSIDER REPORTING
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 2002 with the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, with the exception of Mark Funke, who filed a late report
in August 2002 relating to 12,692 shares sold in March 2002, 100 shares sold in
April 2002, 531 shares acquired pursuant to 3% dividend in May 2002, 2,000
shares sold in June 2002, and who filed a late report in November 2002 for 100
shares sold in November 2002; Stanley Lybarger, who filed a late report in July
2002 relating to 1,142 shares sold in May 2002; L. Francis Rooney, who filed a
late report in July 2002 relating to 42,000 shares which were gifted by the
Rooney Brothers Company in May 2002; Gregory K. Symons, who filed a late report
in July 2002 relating to 530 shares gifted by Mr. Symons in May 2002; and James
Huntzinger, who filed a late report in September 2002 relating to 2,330 shares
sold in September 2002.
CERTAIN TRANSACTIONS
Certain principal shareholders, directors of the Company and their
associates were customers of and had loan transactions with BOK Financial or its
subsidiaries during 2002. 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 transactions with other persons, and (iii)
did not involved more than normal risk of collectibility or present other
unfavorable features at the time the loans were made.
BOK Financial borrowed $30 million during 2001 from George Kaiser by
issuing a subordinated debenture. The proceeds of this borrowing were used to
support asset growth, including the acquisition of CNBT Bancshares, Inc. This
debenture was to mature in March 2008. Interest was based on LIBOR plus 1.75%
payable quarterly. BOK Financial paid the debenture in full during 2002. BOk
leases office space in office buildings owned by Mr. Kaiser and affiliates. In
2002, an affiliate of BOK Financial sold Oklahoma State Income Tax Credits to a)
GBK Corporation, an affiliate of Mr. Kaiser, receiving $2,250,000, b) Mr.
Kaiser, receiving $7,646,850, and c) Stanley Lybarger, receiving $99,000 in
exchange for such credits.
All transactions described above between BOKF or a subsidiary and Mr.
Kaiser or a related entity were approved in advance by a majority of the entire
board of BOk or BOKF, as appropriate, (Mr. Kaiser not voting) after review by
the Chief Financial Officer.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP, independent public accountants, has been reappointed by
the Board of Directors of the Company as independent auditors for the Company to
examine and report on its financial statements for 2003. Ernst & Young LLP have
been auditors of the accounts of the Company since its inception on October 24,
1990. Representatives of Ernst & Young LLP are expected to be present at the
annual meeting, with the opportunity to make a statement if they desire to do
so, and will be available to respond to appropriate questions.
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 Company's 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 Company's Proxy Statement relating to the 2004 Annual
Shareholders' Meeting, a written proposal complying with the requirements
established by the Securities and Exchange Commission must be received at the
Company's principal executive offices, located at Bank of Oklahoma Tower, Tulsa,
Oklahoma 74172, no later than December 1, 2003.
OTHER MATTERS
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 VIA E-MAIL THROUGH THE
BOKF WEBSITE LOCATED AT HTTP://WWW.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.