Additional Information Regarding Prior Awards of SARs
Awards of SARs were included in our annual equity grants
prior to 2016. SARs granted in February 2014 vest 25% per year, while SARs granted in 2015 vest 33% per year, each beginning on the first anniversary of the grant date. Beginning with our 2011 annual equity grant, all grants of SARs have
been in the form of Capped SARs, which include a limit on the maximum value per share upon exercise, in order to reduce accounting expense through a reduced grant date fair value. The Capped SAR awards made in 2011 through 2015 have a maximum share
value of $75.00, which allowed us to realize significant expense savings without materially diminishing the incentive and reward for long-term stock price appreciation.
Awards of SARs are generally forfeited upon termination of
employment with the company prior to vesting, except for limited instances described in the Executive CompensationPotential Payments upon Termination or Change of Control section below. Net
after-tax shares acquired by executive officers through the grant or exercise of all company equity incentive awards are subject to a 50% retention ratio until stock ownership guidelines are met. Additionally,
shares acquired through the exercise of stock options (if outstanding from prior grant practices) or SARs are further subject to the companys nine-month net hold policy (see the Other Key Compensation and Governance PoliciesExecutive
Officer Stock Ownership Guidelines, Retention Ratio and Net Hold Policy section below).
Our Other Compensation and Benefits Programs
Retention Incentive Award For Mr. Bobitz
On September 15, 2016, the Compensation Committee awarded an additional cash-based retention incentive of $425,000 to
Mr. Bobitz, which became payable 100% on June 1, 2018, provided he was still employed by the company (or its successor) on such date, or earlier under certain limited circumstances, including a termination of employment without
cause, death or disability. This retention incentive was paid on June 1, 2018 and is reflected in the 2018 bonus column.
Severance BenefitsInvoluntary Termination without a Change of Control
The Compensation Committee annually reviews the provisions
and participants of executive-level severance benefits in order to monitor competitiveness and appropriate levels of benefits to meet the plan objectives. After such a review, we adopted the 2015 Key Employee Severance Plan (the 2015 Severance
Plan), effective as of January 1, 2015, in order to offer competitive termination benefits, promote retention of a selected group of key employees, including our continuing named executive officers, and to provide key protections to the
company in the form of restrictive covenants.
The
specific terms of the 2015 Severance Plan, and the potential payments and benefits upon a termination of employment without cause or by the executive for good reason for each of our continuing named executive officers are
described more fully in the Executive CompensationPotential Payments upon Termination or Change of Control section below.
Severance BenefitsInvoluntary Termination Following a Change of Control
The Compensation Committee annually reviews the provisions
and participants of our change in control plans to monitor competitiveness and appropriate levels of benefits to meet plan objectives. After such a review, we adopted the 2014 Change of Control Plan (the 2014 Change of Control Plan) in
order to provide change of control severance benefits for a select group of key executives, including our continuing named executive officers, in the event that the executives employment is terminated without cause or by the
executive for good reason within two years following a change of control of the company (each a Qualified Termination).
The change of control severance benefits are intended to keep participating key leaders neutral to the possibility of
corporate transactions in the best interests of stockholders by removing the fear of job loss and
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