NAMED EXECUTIVE OFFICERS
This section discusses the compensation paid to the named executive officers (as defined by SEC rules) in 2021. The named executive officers are:
Name
|
Title
|
|
|
Joseph T. Hand
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President, Chief Executive Officer
|
Mark A. Wheeler
|
Chief Operating Officer
|
Matthew E. Poff, CPA
|
Chief Financial Officer
|
FINANCIAL PERFORMANCE HIGHLIGHTS IN 2021
•
|
Net income and earnings per share (EPS) were $17.0 million, and $1.30, respectively, compared to $16.6 million and $1.27 in 2020;
|
•
|
In 2021, the Board of Directors approved a 4% increase in the quarterly dividend to an annualized rate of $0.78 per share;
|
•
|
The Company is making significant investments to build and improve its communities’ infrastructure. Over the past three years, the Company has invested over $85 million in infrastructure improvements,
including system improvements and infrastructure to ensure a safe, adequate, and reliable supply of drinking water and to maintain proper handling and disposal of wastewater for all customers;
|
•
|
The Company’s long-term performance is strong with three-year average annual total shareholder return at 19.0% and three-year average annual return on equity of 11.1%.
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SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation paid by the Company to named executive officers or accrued by the Company for the named executive officers in 2021 and 2020.
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Non-Equity
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Nonqualified
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|
|
|
|
|
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Incentive Plan
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Deferred
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All Other
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|
Name and
|
|
|
Stock
|
Compensation
|
Compensation
|
Compensation
|
|
Principal Position
|
Year
|
Salary (1)
|
Awards (2)
|
(3)
|
Earnings (4)
|
(5)
|
Total
|
|
|
|
|
|
|
|
|
Joseph T. Hand
|
2021
|
$302,628
|
|
$102,800
|
$15,500
|
|
$57,329
|
|
$9,057
|
|
$487,314
|
President, Chief
|
2020
|
293,151
|
|
46,000
|
15,000
|
|
81,634
|
|
9,699
|
|
445,484
|
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark A. Wheeler
|
2021
|
197,862
|
|
39,000
|
10,300
|
|
19,396
|
|
30,375
|
|
296,933
|
Chief Operating
|
2020
|
187,870
|
|
12,000
|
9,750
|
|
-
|
|
11,759
|
|
221,379
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matthew E. Poff, CPA
|
2021
|
210,158
|
|
41,600
|
10,800
|
|
16,449
|
|
10,925
|
|
289,932
|
Chief Financial
|
2020
|
206,596
|
|
40,000
|
10,400
|
|
21,278
|
|
10,399
|
|
288,673
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
To assist the Company in establishing base salary in 2021, the Compensation Committee directed management to engage Mosteller & Associates, Reading, PA (“the Consultant”), to evaluate compensation for
senior management relative to the market. The Compensation Committee has concluded that the Consultant is an independent consultant after considering the factors relevant to the Consultant’s independence from management, including the
factors set forth in the NASDAQ and SEC rules regarding compensation consultant independence. The Consultant provides no other services to the Company other than serving as the Compensation Committee’s compensation consultant.
|
The Consultant compared the compensation package of the Company to a peer group of 11 companies consisting of organizations in the utilities industry as well as publicly traded financial services
organizations in similarly situated geographies, with sufficient similarity in terms of size and performance measures. These companies included similar water utility peer companies, Middlesex Water Company (MSEX) and Artesian Water Company (ARTNA).
The Consultant selected three publicly traded utilities for this comparison, Corning Natural Gas Holding Corporation (CNIG), Consolidated Water Co. Ltd. (CWCO), and Until Corporation (UTL). The Company also selected three locally based, publicly
traded financial institutions, Codorus Valley Bancorp (CVLY), Adams County National Bank (ACNB), and Traditions Bancorp, Inc. (TRBK), and three additional publicly traded financial institutions, AmeriServ Financial, Inc. (ASRV), Franklin Financial
Services Corporation (FRAF), and Juniata Valley Financial Corporation (JUVF). These companies were selected because they serve the same or a nearby geographic area, are similar sized, and operate in a highly regulated environment which is comparable
to a water company. In addition to the peer analysis, the Consultant also performed a compensation market survey. The analysis and comparisons were normalized based on scope factors. Based upon the work of the Consultant, it was deemed appropriate
that the Company’s base salary compensation goal should be approximately the 50th percentile of the market.
The base salary level of named executive officers will be reviewed annually to determine if the peer group described above, and the 50th percentile continue to be appropriate based on
changes relative to comparable companies, product line, the current regulatory environment, changes in water and wastewater quality standards, competition for competent management, and growth in the service territory, as well as other relevant
factors.
The Compensation Committee also considers subjective factors such as the value of the position to the Company, competition for executives, the performance of the executive, and the length of service
in the current position and with the Company when determining base salary levels.
The Company does not provide bonuses to senior management.
(2)
|
In 2016, shareholders approved a Long-Term Incentive Plan to advance the long-term success of the Company, and to increase shareholder value by providing the incentive of long-term stock-based awards to
officers, directors and key employees. The plan is administered by the Compensation Committee, which has complete and final authority to, among other things, select participants, to determine the goals and circumstances under which
incentive awards are granted, to grant awards and to construe and interpret the Plan. Decisions of the Compensation Committee with respect to the administration and interpretation of the Plan are final, conclusive and binding upon all
participants.
|
The Compensation Committee has based the awards for officers on a combination of metrics that link closely to shareholder value. Twenty-five (25) percent of the award is based on achieving a
three-year average total shareholder return of 9.5%, twenty-five (25) percent of the award is based on achieving a three-year average return on equity of 9.5%, twenty-five (25) percent of the award is based on achieving a three-year average
Pennsylvania Public Utility Commission (“PPUC”) justified complaint rate per 1,000 customers of less than the Pennsylvania water utility peer group average in the most recently published report, and twenty-five (25) percent of the award is based on
maintaining customer rates that are less than the Pennsylvania water utility peer group average. The grants will typically be made based on a three-year look back method of these metrics ending with the most recently completed fiscal year. The
awards vest ratably over three years for the participants. On May 3, 2021, the Compensation Committee determined that the Company met or exceeded all four metrics for the three-year period ended December 31, 2020. The Compensation Committee awarded
restricted stock to the named executive officers effective May 3, 2021 of 2,000 shares for Mr. Hand and at a rate of 20% of base salary for Mr. Wheeler and Mr. Poff, all to vest ratably over three years beginning May 3, 2021. Awards are subject to
the Company’s clawback policy. The value presented on the table was determined using the closing stock price on May 3, 2021.
(3)
|
The Company’s practice is to use cash awards to incentivize its senior managers in the short-term to create value for its customers and shareholders. To that end, the Company adopted a Cash Incentive Plan in
2005, pursuant to which the Compensation Committee sets annual performance objectives and target incentive payment amounts. All supervisors and managers participate in the plan, including the named executive officers.
|
The plan is administered by the Compensation Committee, which has complete and final authority to, among other things, select participants, to determine the goals and circumstances under which
incentive awards are granted, to grant awards and to construe and interpret the Plan. Decisions of the Compensation Committee with respect to the administration and interpretation of the Plan are final, conclusive, and binding upon all participants.
The Compensation Committee has discretion to determine all performance objectives. In addition, the Compensation Committee may specify that any incentive award be conditioned upon achievement or
satisfaction of business criteria or other measures of performance. One or more of the following business criteria or other measures of performance may be used by the Committee: (1) growth in revenues or assets; (2) earnings from operations; (3) net
income or earnings per common share; (4) return on investment or return on equity; (5) stock price or shareholder return; and (6) strategic business criteria, consisting of meeting specified water and wastewater quality standards, environmental or
safety standards, affordability of rates and customer satisfaction standards. The Compensation Committee may exercise its discretion to eliminate, reduce or increase the amounts payable as incentive, subject to such business criteria or other
measures of performance.
Under the plan, annual performance objectives are established no later than ninety (90) days after the beginning of any annual incentive period, which is usually a calendar year. Each performance
objective carries with it a minimum score of five (5) points. Objectives of more significant value or that require more effort, may carry more than five (5) points. No points are awarded for partial achievement of performance objectives. Incentive
awards are granted only if an overall score of seventy-five (75) percent of the available performance objective points are achieved. The Compensation Committee believes that achieving performance objectives should be the shared responsibility of
management. Accordingly, if an overall score of seventy-five (75) percent of the available performance objective points is achieved, all participants receive their target incentive awards. If an overall score of less than seventy-five (75) percent
of the available performance objectives is achieved, no participant receives an award.
The Compensation Committee set the performance objectives and target incentive awards for 2021 on January 25, 2021. For 2021, the Compensation Committee determined that the amount of the target cash
incentive award would be 5% of the base salary as of December 31, 2021 for each management employee, including named executive officers. The Committee selected 5% as the target cash incentive award for 2021, and for all the previous years since the
plan’s inception in 2005, after considering various factors. One such factor was the range of other benefits already provided by the Company. Another factor was the comparison of the Company’s total salary and benefit package to the compensation
packages paid by other comparable companies. A third factor was the level of motivation needed to achieve the established goals of the Company. Finally, the Compensation Committee considered how the plan would be perceived by the regulators,
customers and shareholders. All these factors together contributed to the Committee’s decision to keep the target incentive relatively low as compared to other companies.
The 2021 performance objectives as determined by the Compensation Committee were, among other things: replace and reline 60,000 feet of pipe; replace all customer-owned lead service lines identified
at the end of 2020; complete a market compensation study; complete an upgrade to the enterprise software system; provide a water test to all customers with a customer-owned lead service line that requests such a test; review the corrosion control and
implement pipe loop study; establish a Company-wide records and document management program; receive approval of the final design and permit applications for the Lake Williams spillway replacement; conduct needs surveys for additional portions of the
current service territory without public water supply; finalize and implement the PPUC management audit recommendations; complete the West Manheim Township sewer integration; ensure compliance with the updated Lead and Copper Rule; implement
improvement opportunity from the customer satisfaction survey; implement additional cybersecurity defense mechanisms; implement an updated water loss accounting process; review the advisor and strategy for the pension plan assets; and develop a plan
to reduce carbon emissions and promote environmental stewardship.
On January 24, 2022, the Compensation Committee determined that management had achieved ninety-four (94) percent of the performance objectives listed above for 2021, as well as the set business
criterion for 2021, which was, earnings per common share of $1.12. The Committee awarded the named executive officers the amounts set forth in the table. Non-equity plan incentive plan compensation is shown in the year earned and is normally paid
in the following calendar year. Awards are subject to the Company’s clawback policy.
(4)
|
Amounts presented represent the change in the present value of the named executive officer’s benefit under the Company’s supplemental executive retirement plan described in the “Retirement Benefits” section
below. The change in supplemental executive retirement plan can vary from year to year due to changes in the discount rate used to calculate the present value. When the discount rate increases, the present value of the non-qualified
deferred compensation liability decreases. The change was lower in 2021 than in 2020 due to an increase in the discount rate to 2.65% in 2021 from 2.30% in 2020.
|
(5)
|
Amounts presented represent the Company contributions to the named executive officer’s 401(k) account described in the “Retirement Benefits” section below, credited earnings, tax savings and Company
contributions for non-qualified deferred compensation described in the “Retirement Benefits” section below, and personal use of company vehicles. The most common personal use of company vehicles by senior management is commuting to and
from work. No named executive officer receives perquisites valued in the aggregate at $10,000 or more. Named executive officers participate in the Company's other benefit plans on the same terms as other employees. These plans include
medical and health insurance, life insurance and employee stock purchase plan (“ESPP”). Under the ESPP, full-time employees with at least 90 days of service are eligible to purchase company stock through payroll deduction, up to 10% of
their regular salary, at a 5% discount from fair market value. The Compensation Committee considers the ESPP as a contributing factor to hiring and retaining employees, and as a way of aligning employee interests with those of
shareholders.
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Name and Principal Position
|
|
Equity Incentive
Plan Awards: Number of Shares That Have Not Vested
|
Equity Incentive
Plan Awards:
Market Value of Shares That Have Not Vested
|
Joseph T. Hand
President, Chief Executive Officer
|
|
3,122
|
$155,413
|
Mark A. Wheeler
Chief Operating Officer
|
|
940
|
$46,793
|
|
Matthew E. Poff, CPA
Chief Financial Officer
|
|
1,781
|
$88,658
|
|
The December 31, 2021 closing price of the Company's Common Stock was $49.78.
The shares that have not vested for Mr. Hand and Mr. Poff consist of (i) one-third of the 2019 award that will vest on May 6, 2022, (ii) the 2020 award that will vest one-third each on September 18,
2022 and September 18, 2023, and (iii) the 2021 award that will vest one-third each on May 3, 2022, May 3, 2023, and May 3, 2024.
The shares that have not vested for Mr. Wheeler consist of (i) the 2020 award that will vest one-third each on September 18, 2022 and September 18, 2023, and (ii) the 2021 award that will vest
one-third each on May 3, 2022, May 3, 2023, and May 3, 2024.
Defined Benefit Pension Plan. The Company provides a traditional defined benefit pension plan covering employees hired before May 1, 2010. Messrs. Hand and
Poff are entitled to benefits under the defined benefit pension plan upon retirement after the age of 55 on the same terms as other pension-eligible employees. The pension benefit is based on the years of service multiplied by the sum of $19.25 and
1.50% of that portion of the final average monthly earnings which are in excess of $400. The final average monthly earnings are the average of the employee's earnings for the highest consecutive sixty (60) complete months during the last one hundred
and twenty (120) complete months immediately prior to the date the pension benefit calculation is made. Normal (full) retirement benefits are payable at age 65, or at age 62 with twenty-five years of service. Employees who terminate their
employment prior to the age of 55 may elect to collect reduced benefits upon attaining age 55, or full benefits at age 65. Early retirement benefits are reduced by 5/9 of a percent for each of the first 60 months by which the early
retirement date precedes the normal retirement date, and 5/18 of a percent for each month in excess of 60 months by which the early retirement date precedes the normal retirement date. There were no payments to named executives made under this plan
during the last fiscal year. Employees begin accruing benefits under the pension plan when they commence work at the Company.
Supplemental Executive Retirement Plan. The Company provides a supplemental retirement program, which provides senior management with a retirement benefit at
or after the age of 55 in addition to the defined benefit pension. The supplemental retirement program is designed to encourage senior management to stay with the Company until retirement. Generally, supplemental retirement benefits are made
available to senior management and are payable to the executive or his beneficiary, after retirement, over 15 years beginning no earlier than age 60. The annual benefit payable under the supplemental retirement program is calculated by multiplying
the number of years of eligible service subsequent to the plan commencement date by a predetermined annual retirement benefit unit. The estimated annual benefits payable at normal retirement age under the supplemental retirement program are as
follows: Mr. Hand, $53,333; Mr. Poff, $33,333; and Mr. Wheeler, $20,000. Benefits are paid monthly. Named executive officers who terminate their employment prior to the age of 55 forfeit their supplemental retirement benefits. Named executive
officers who terminate their employment between the ages of 55 and normal retirement age are subject to alternate annual retirement benefit units as provided in the plan agreements. If the following executive officers were to die before retirement,
their respective beneficiaries would receive the following death benefits: Mr. Hand, $800,000; Mr. Poff, $500,000; and Mr. Wheeler, $300,000. If a named executive officer were to die after retirement but prior to age 60, his beneficiary would
receive the benefit earned at retirement. There were no payments to named executives made under this plan during the last fiscal year. Employees do not become eligible for the supplemental retirement program until they become executives of the
Company.
Deferred Compensation Plan. The Company provides a deferred compensation program to management. For executives and managers hired before May 1, 2010,
including Messrs. Hand and Poff, the deferred compensation program permits a deferral of up to 5% of salary at the time the participant is eligible to enter the plan, over an eight (8) to eleven (11) year period, with the Company matching the
deferral up to 2.5% of salary. For executives and managers hired on or after May 1, 2010 who are not eligible for the defined benefit pension plan, including Mr. Wheeler, the deferred compensation program permits deferral of up to 5% of salary
through age 65, with the Company matching the deferral up to 5% of salary. For all participants, the Company annually credits participants’ accounts with interest on the existing balance at a rate selected by the Company, currently equal to the
December 15 rate of Moody’s AAA Corporate Bond Yield. The interest rate amounted to 2.67% for 2021. The Company also annually credits all participants’ deferred compensation balances with tax savings accruing to the Company. The tax savings do not
represent a gross up of the deferred compensation payout, but rather a pass-through of the tax benefit the Company will realize when benefits are paid to participants. The deferred compensation program does not provide above-market or preferential
earnings.
Following a named executive officer’s retirement, or if a named executive officer becomes disabled before his deferred income account has been distributed, a monthly retirement benefit will be paid
to him in one hundred and twenty (120) monthly installments.
If a named executive officer’s employment with the Company is terminated other than by death or disability before he is eligible for retirement (age 60) and attaining less than 10 years in the plan,
the amount of his contributions and the earnings thereon shall be distributed to such named executive officer immediately upon his termination in a lump sum. If a named executive officer’s employment with the Company is terminated before he is
eligible for retirement (age 60), but after attaining 10 years but less than 15 years in the plan, the amount of his vested account including his contributions and the earnings thereon, and the Company’s matching contributions and earnings thereon
shall be distributed to such named executive officer upon his or her attainment of age 60, in one hundred and twenty (120) monthly installments. If a named executive officer’s employment with the Company is terminated before he is eligible for
retirement (age 60), but after attaining 15 years of service under the plan, the amount of his contributions and the earnings thereon, the Company’s matching contributions and earnings thereon, and the future tax savings to be received by the Company
shall be distributed to such named executive officer upon his attainment of age 60, in one hundred and twenty (120) monthly installments. If a named executive officer’s employment with the Company is terminated after he is eligible for retirement
(age 60), the amount of his contributions and the earnings thereon, the Company’s matching contributions and earnings thereon, and the future tax savings to be received by the Company shall be distributed to such named executive officer in one
hundred and twenty (120) monthly installments.
If a named executive officer were to die before distribution of his deferred income account has commenced, his beneficiary would receive a death benefit in an amount equal to the higher of $150,000,
or the named executive officer’s deferred income account (including tax savings) immediately prior to his death. The death benefit will be paid to beneficiaries in a lump sum.
401(k) Plan. The named executive officers may participate in the 401(k) savings plan on the same terms as other employees. The Company provides an annual
maximum matching contribution of $2,800 per employee, for participating employees hired before May 1, 2010. Messrs. Hand and Poff received the maximum matching contribution during 2021.
Employees hired on or after May 1, 2010 who are not eligible for the defined benefit pension plan, are eligible for an enhanced 401(k) plan. The Company provides an annual matching contribution of
100% of the employee’s contribution up to a maximum 4% of the employee’s eligible compensation. In addition, the Company makes an annual contribution of $1,200 to each employee’s account whether or not they defer their own compensation. Mr. Wheeler
received a matching contribution of $9,103 during 2021.
POTENTIAL PAYMENTS UPON TERMINATION OR A CHANGE IN CONTROL
The senior management of the Company has built it into the successful business that it is today. The Company believes it is important to protect them in the event of a change of control and to
protect the Company from the distractions senior managers often suffer as a result of the uncertainties that frequently surround changes in control. Accordingly, the Company entered into amended and restated agreements with each of the senior
managers. These agreements incentivize the senior managers to continue their employment amid the uncertainty that often follows changes in control and thereby promote stability for the Company during such times. The agreements are valid for an
initial term of five years and renew automatically for one-year periods after the first five years. The agreements terminate upon the employee reaching age 65 or terminating employment with the Company. The Company must provide 90 days’ notice to
terminate the agreements.
Description of Change in Control Agreements. The Company has entered into Amended and Restated Change in Control Agreements with each named executive officer
that provides for payments to them under certain circumstances in connection with a change in control in consideration of such named executive officers agreeing not to compete with the Company for a period of time following the termination of their
employment.
Under all agreements, generally a “change in control” will occur if:
•
|
Any person or affiliated group (with limited exceptions) becomes the beneficial owner in the aggregate of 50 percent or more of all of the voting securities;
|
•
|
A majority of the Board of Directors is involuntarily removed or defeated for re-election to the Board of Directors (for example, as a result of a proxy contest);
|
•
|
The Company is party to a merger or reorganization pursuant to which the holders of the voting securities prior to such transaction become the holders of 50 percent or less of the voting securities of the new
merged or reorganized company; or
|
•
|
The Company is liquidated or dissolved, or all its assets are sold to a third party.
|
In each circumstance described above, the Board of Directors may make a determination that the circumstances do not warrant the implementation of the provisions of the agreement, and in such case,
the change in control will not trigger any payments under the agreements.
All payments under the agreements are triggered by the occurrence of a change in control, and most payments also require that the relevant senior manager’s employment also be terminated. The amounts
of payments to the named executive officers under these agreements vary depending on the timing of the change in control and the timing and manner of the termination of employment. Generally, the manner of termination is divided into four
categories.
A “for cause” termination results from:
•
|
misappropriation of funds or any act of common law fraud;
|
•
|
habitual insobriety or substance abuse;
|
•
|
conviction of a felony or any crime involving moral turpitude;
|
•
|
willful misconduct or gross negligence by the senior manager in the performance of his duties;
|
•
|
the willful failure of the senior manager to perform a material function of his duties; or
|
•
|
the senior manager engaging in a conflict of interest or other breach of fiduciary duty.
|
A “good reason” termination occurs when the senior manager terminates his own employment following a change in control and after one or more of the following has occurred:
•
|
the Company has breached the change in control agreement;
|
•
|
the Company has significantly reduced the authority, duties or responsibilities of the senior manager or reduced his base compensation or annual bonus compensation opportunity;
|
•
|
the Company has reduced the senior manager from the employment grade or officer positions which he holds; or
|
•
|
the Company has transferred the senior manager, without his express written consent, to a location that is more than 50 miles from his principal place of business immediately preceding the change of control.
|
A voluntary termination is the termination by the senior manager of his own employment under circumstances that would not be a “good reason” termination. Examples are ordinary retirement or leaving
the Company to seek other job opportunities.
An involuntary termination is a termination in connection with a change in control that is not a “for cause” termination, a good reason termination or a voluntary termination.
Payouts under Change in Control Agreements. Under the agreements, the named executive officers are entitled to payment in the case of an involuntary
termination or a good reason termination within some time period surrounding a change in control (generally six months prior to or one year following a change in control). Payments are paid in lump sum and are based on a multiple of base salary and
cash incentive compensation earned by the named executive officer in the preceding 12 months. This amount is called “base pay.” Additionally, the named executive officers are entitled to payment of “stay bonuses” if they remain employed for one
year following a change in control, and smaller stay bonuses if they remain employed for at least three months following a change in control and then voluntarily terminate their employment more than three months but less than one year following a
change in control. Finally, the named executive officers are entitled to have their health and welfare benefits continue for periods of up to one year following the termination of their employment (subject to such benefits terminating or such named
executive officer becoming covered by the benefit plans of another employer).
Payment of the lump sum payments under the change in control agreements is contingent upon the named executive officer executing a standard release. The change in control agreements also contain
non-competition provisions that generally require that, a named executive officer will not, while he is employed by the Company and for one year following the termination of his employment by the Company:
•
|
participate in the ownership, management, operation, control or financing of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with or use
or permit his name to be used in connection with, any business or enterprise engaged in by the Company within its franchised territory;
|
•
|
solicit or attempt to convert any account or customer of the Company to another supplier; or
|
•
|
solicit or attempt to hire any employee of the Company.
|
Any breach of this non-competition agreement can result in damages being awarded to the Company, including the amount of one-half of any lump sum payments described above.
Other Payouts. The named executive officers will also be entitled to the payouts of their pension and supplemental retirement accounts upon retirement and payout of their deferred
compensation accounts upon termination of their employment.
All restrictions applicable to any outstanding restricted stock awards will lapse upon a change in control and all shares of common stock will immediately vest.
Director
|
Fees
Paid in Cash
|
Stock Awards
|
Total
|
|
|
|
|
Cynthia A. Dotzel, CPA
|
$34,653
|
$5,397
|
$40,050
|
Michael W. Gang, Esq.
|
25,893
|
5,397
|
31,290
|
Jeffrey R. Hines, P.E.
|
25,893
|
4,523
|
30,416
|
George W. Hodges
|
30,113
|
5,397
|
35,510
|
George Hay Kain III
|
25,843
|
5,397
|
31,240
|
Jody L. Keller, SPHR
|
26,373
|
5,397
|
31,770
|
Erin C. McGlaughlin
|
31,323
|
5,397
|
36,720
|
Robert P. Newcomer
|
30,483
|
5,397
|
35,880
|
Steven R. Rasmussen, CPA
|
33,883
|
5,397
|
39,280
|
Ernest J. Waters
|
30,983
|
5,397
|
36,380
|
Director Fees Paid in Cash. In consideration of the services they provide to us, Directors who are not regular full-time employees are entitled to receive a
retainer of $20,000 per year, payable quarterly. In addition to the annual retainer, Board and Committee members are entitled to the fees in the table below for each meeting they attend. Directors who are also current employees of the Company
receive no additional compensation for Board service.
|
Board
|
Executive Committee
|
Audit Committee
|
Nomination & Corporate Governance Committee
|
Compensation Committee
|
Chairperson
|
$2,500
|
$1,200
|
$1,800
|
$1,090
|
$1,090
|
Directors/Members
|
$810
|
$890
|
$950
|
$840
|
$840
|
Stock Awards. The Board is authorized to grant equity-based compensation to non-employee Directors which vests immediately under a long-term incentive plan
approved by shareholders in 2016. The Board believes that director fees paid in equity will help to better align Board member objectives with those of shareholders. The equity compensation is determined as a percentage of the annual retainer, with
the number of shares based on the closing price of the stock on the grant date. The grant amount is prorated in the event a non-employee Director has not served on the Board for the entire year. On May 3, 2021, the non-employee Directors were
issued stock awards in the amount of 30% of the annual retainer, or $5,397, which amounted to 105 shares based on the closing price of the common stock of the Company of $51.40. The shares vested immediately. Director Hines was granted a prorated
award based on his service as a non-employee Director beginning in March 2020.
No perquisites are provided to Directors.
There were seven (7) Board of Directors' Meetings during calendar year 2021. All Directors attended more than 75% of the scheduled Board of Directors and committee meetings. In addition, all
Directors attended the 2021 Annual Meeting of Shareholders. All Directors are expected to attend the 2022 Annual Meeting of Shareholders, but attendance is not mandatory.
The notice of Annual Meeting of Shareholders calls for the transaction of such other business as may properly come before the meeting. The Board of Directors has no knowledge of any matters to be
presented for action by the shareholders at the meeting other than is hereinbefore set forth. In the event additional matters should be presented, however, the proxies will exercise their discretion in voting on such matters.