Item 10. Directors, Executive Officers and
Corporate Governance
DIRECTORS AND EXECUTIVE OFFICERS
The information under the heading “Executive Officers”
in Part I, Item 1 of the Original Form 10-K, other than with respect to Mr. Ghali, is incorporated by reference into
this Item 10.
Our Directors are as follows:
ARNAUD AJDLER has been a director since October 2018. Mr. Ajdler
has served as the managing partner for Engine Capital L.P., a value-oriented investment firm, since 2013. Mr. Ajdler, who was a
member of the Company’s Board of Directors from June 2006 to June 2009, currently sits on the boards of Stewart Information
Services Corporation (NYSE:STC) and StarTek, Inc. (NYSE:SRT). He earned a BS in Mechanical Engineering from the Free University
of Brussels, Belgium, an MS in Aeronautics from the Massachusetts Institute of Technology (MIT), and an MBA from Harvard Business School.
Age: 46
PAUL J. EVANS has been a director since August 2016 and served
as our Interim Chief Executive Officer from May 2017 to September 2018. From 2012-2015 Mr. Evans served as Vice President,
Chief Financial Officer and Treasurer of MYR Group, and President of MYR Real Estate Company. From 2010-2011, Mr. Evans was Chief
Executive Officer of Conex Energy Corporation, a privately-held company that developed renewable energy projects. From 2002-2009 he served
as Treasurer and Corporate Officer of NorthWestern Energy, a multi-state utility that provides electricity and natural gas. Prior to
NorthWestern Energy, Mr. Evans held corporate operational finance positions at Duke Energy North America, NRG Energy, and McLane
Company, Inc. Mr. Evans is a Certified Public Accountant and holds a B.B.A. in Accounting from Stephen F. Austin State University
and Masters of International Management from Thunderbird School of Global Management. Age: 54
RAOUF S. GHALI has been a member of our Board of Directors since August 2016
and our Chief Executive Officer since October 2018. Prior to that, he was our Chief Operating Officer from January 2015 to
October 2018, President of our Project Management Group (International) from January 2005 to January 2015, Senior Vice
President in charge of project management operations in Europe, North Africa and the Middle East from 2001 to 2004, and Vice President
from 1993 to 2001. Prior to joining us, he worked for Walt Disney Imagineering from 1988 to 1993. Mr. Ghali earned both a B.S. in
business administration and economics and an M.S. in business organizational management from the University of LaVerne. Age: 60
GRANT G. McCULLAGH has served as the Executive Chairman of BEK Building
Group since 2015, an Executive Vice President of Pernix Group, Inc. since 2014 and as Managing Director of TTWiiN, LLC since 2018.
Mr. McCullagh has served in numerous management roles within the engineering and construction industry including as Chairman and
CEO of LTC Corporation from 2012 to 2014, former Chairman and Chief Executive Officer of Global Integrated Business Solutions, LLC from
2005 to 2012, and previously co-founding McClier Corporation and serving as its CEO and Chairman. McClier was acquired by AECOM in 1996,
where Mr. McCullagh served as an Executive Vice President and later Vice Chairman until 2004. Mr. McCullagh has a Master of
Business Administration from the University of Chicago, a Master of Architecture from the University of Pennsylvania, and a Bachelor
of Science in Architecture from the University of Illinois at Champaign-Urbana. Age: 71
JAMES B. RENACCI represented the 16th District of the State of
Ohio in the United States House of Representatives from January 3, 2011 until January 3, 2019. Prior to serving in Congress,
in 2003 Mr. Renacci formed LTC Management Services, Inc., a management and financial consulting service that had partial ownership
of more than 60 businesses, including multiple auto dealerships. Mr. Renacci served as a managing board member of the Arena Football
League. Mr. Renacci is a current board member at Alithya Group, Inc. (NASDAQ: ALYA), Custom Glass, Inc. and the Franklin
Center for Global Policy Exchange. Mr. Renacci is a Certified Public Accountant and holds a B.S.B.A. from Indiana University of
Pennsylvania. Age: 63
DAVID SGRO has been our Chairman since October 2018 and a director
since August 2016. Mr. Sgro is a Senior Managing Director of Crescendo Partners, L.P. and has held various positions at Crescendo
Partners since May 2005. He is also a Managing Member and Head of Research for Jamarant Capital, a private investment fund. Mr. Sgro
also serves as an officer and the Chairman of Allegro Merger Corp. (NASDAQ:ALGRU). Mr. Sgro has been a director and a former chairman
of the audit committee of and Pangaea Logistics Solutions Ltd. (NASDAQ:PANL), since October 2014, and a director and chairman of
the audit committee of BSM Technologies Inc., since June 2016. He was previously a director of NextDecade Corporation and Imvescor
Restaurant Group Inc., a director, and chairman of the audit committee, of ComDev International, a director, and chairman of the audit
committee of SAExploration Holdings, Inc. (NASDAQ:SAEX), a director of Bridgewater Systems, Inc., and a director of Primoris
Services Corporation (NASDAQ:PRIM). Mr. Sgro also served as an officer and director of Harmony Merger Corp., from March 2015
until its merger with NextDecade in July 2017; Quartet Merger Corp., from October 2013 until its merger with Pangaea Logistics
Solutions Ltd. in October 2014; and as an officer and director of Trio Merger Corp., from March 2011 until its merger with
SAExploration Holdings in June 2013. Prior to joining Crescendo Partners, Mr. Sgro held analyst positions with Management Planning, Inc.
and MPI Securities, Inc. Mr. Sgro is a Chartered Financial Analyst (CFA) Charterholder and holds a B.S. in Finance from The
College of New Jersey and an M.B.A. from Columbia Business School. Age: 45
SUE STEELE has been the Chief Executive Officer of Steele &
Partners, a global management consulting firm, since January 2020. Ms. Steele served as the Chief Executive Officer of JMJ
Associates from April 2017 to December 2019. From May 2010 to April 2017, Ms. Steele served as Senior Vice President
Global Supply Management of Jacobs Engineering Group, Inc. Previously, she worked with several other major engineering and construction
firms including CH2MHill as Vice President Operations and BE&K as Vice President-Industrial Services (which is now part of Pernix).
Ms. Steele began her career at Florida Power & Light, after receiving her MBA from the University of Miami and BS from
Auburn University. Age: 69
DELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), requires our directors and executive officers and persons who beneficially own more than 10%
of our common stock to file initial reports of ownership and changes in ownership with the SEC. To the Company’s knowledge based
on a review of copies of such reports furnished to the Company and on written representations made by such persons, all of the Company’s
directors, executive officers and beneficial owners of more than 10% of our common stock have complied with all Section 16(a) filing
requirements with respect to 2021, except Forms 4 on behalf of Messrs. Ghali (3 transactions), Kardous (3 transactions), Weintraub (3 transactions) and Dengler (3 transactions)
related to equity grants made in 2019, 2020 and 2021 were not reported.
CODE OF ETHICS
All directors, officers and employees of the Company are expected
to act ethically at all times and in accordance with the policies comprising the Company’s Code of Ethics and Business Conduct
(the “Code”) which is available on our website at www.hillintl.com, in the “Investor Relations” section, and
is available in print to any stockholder upon request. Any waiver or any implicit waiver from a provision of the Code applicable to the
Company’s chief executive officer, chief financial officer, controller, or any amendment to the Code must be approved by the Company’s
Board of Directors (the “Board”). We will disclose on our website amendments to, and, if any are granted, any such waiver
of, the Code. The Company’s Audit Committee is responsible for applying the Code to specific situations in which questions are
presented to it and has the authority to interpret the Code in any particular situation. If, after investigating any potential breach
of the Code reported to it, the Audit Committee determines (by majority decision) that a breach has occurred, it will inform the Board.
Upon being notified that a breach has occurred, the Board (by majority decision) will take or authorize such disciplinary or preventive
action as it deems appropriate, after consultation with the Audit Committee and/or the Company’s General Counsel, up to and including
dismissal or, in the event of criminal or other serious violations of law, notification of the SEC or other appropriate law enforcement
authorities.
CORPORATE GOVERNANCE
Pursuant to the Delaware General Corporation Law and the Company’s
Amended and Restated Bylaws, the Company’s business, property and affairs are managed by or under the direction of the Board. Members
of the Board are kept informed of the Company’s business through discussions with the Chief Executive Officer and other officers,
by reviewing materials provided to them and by participating in meetings of the Board and its committees. We currently have seven members
serving on the Board.
During 2021, the Board held 11 meetings and the committees held a total
of 9 meetings. Each director attended more than 75% of the total number of meetings of the Board and the Board committees of which he
or she was a member during the period he or she served as a director in 2021. Although we do not have a policy requiring all directors
to attend annual meetings of stockholders, we expect all directors to attend, absent extenuating circumstances. All of our directors attended
our 2021 Annual Meeting of Stockholders.
Board Leadership Structure
Our Amended and Restated Bylaws provide that we will have a Chairman
who will chair Board meetings and perform such other duties as set forth in our Amended and Restated Bylaws or as otherwise assigned
to him by the Board. The Chairman and Chief Executive Officer may be the same person; however, the Board may separate these two positions
if it deems it to be in the best interests of our Company and our stockholders to do so. Presently, the Chairman and Chief Executive
Officer positions are held by two different individuals.
Role of the Board in Risk Oversight
The Board as a whole has responsibility for risk oversight, with
reviews of certain areas conducted by relevant Board committees that report on their findings to the Board. The Board performs its
risk oversight in several ways, including through the Board’s Risk Committee. The Risk Committee is responsible for, among
other matters, periodically reviewing and monitoring the Company’ enterprise risks, periodically reviewing the Company’s
approach to project risk management, periodically reviewing the risk management infrastructure and any material risk management
policies adopted by the Company, conducting an annual assessment regarding the Committee’s purpose, duties, and
responsibilities, monitoring best practices with respect to risk management and making recommendations as appropriate to management
and/or the Board and reading and providing input regarding risk disclosures in financial statements and other public statements
regarding risk. The oversight responsibility of the Board and the Board committees is also facilitated by management reporting
processes designed to provide information to the Board concerning the identification, assessment and management of critical risks
and management’s risk mitigation strategies and practices. These areas of focus include operational, economic, competitive,
financial (including accounting, reporting, credit, liquidity and tax), legal, regulatory, compliance, environmental, political and
strategic risks. The full Board (or the appropriate Board committee), in concert with the appropriate management within the Company,
reviews management reports to formulate risk identification, risk management and risk mitigation strategies. When a Board committee
initially reviews management reports, the Chairman of the relevant Board committee briefs the full Board on the specifics of the
matter at the next Board meeting. This process enables the Board to coordinate the risk oversight role, particularly with respect to
risks spanning more than one operational area. The Compensation Committee reviews compensation policies to ensure that they do not,
among other things, encourage unnecessary or excessive risk-taking.
Corporate Governance Guidelines
The Corporate Governance Guidelines adopted by the Board, which include
guidelines for determining director independence, are published on the Company’s website at www.hillintl.com, in the “Investors”
section, and are available in print to any stockholder upon request. That section of the website makes available the Company’s
corporate governance materials, including Board committee charters. Those materials are also available in print to any stockholder upon
request.
Committees of the Board of Directors
During 2021, the Board had standing Audit, Compensation, Risk and
Governance and Nominating Committees. All members of each committee have been determined by the Board to be “independent”
under applicable NYSE rules. In addition, the Board has determined that each member of the Audit Committee meets SEC independence requirements
which require that members of the Audit Committee may not accept directly or indirectly any consulting, advisory or other compensatory
fee from the Company or any of its subsidiaries other than their directors’ compensation. The charter of each committee is available
on our website at www.hillintl.com, in the “Investors” section.
Audit Committee
The Audit Committee currently consists of Paul Evans (Chair), Grant
McCullagh, James Renacci and Sue Steele. The Board has determined that each member of the Audit Committee is financially literate. The
Board has also determined that Paul Evans possesses accounting or related financial management expertise within the meaning of the NYSE
listing standards and qualifies as an “audit committee financial expert,” as defined by the rules of the SEC.
The Audit Committee assists the Board in fulfilling its oversight
responsibilities by (a) reviewing the financial reports and other financial information provided by the Company to its stockholders,
the SEC and others, (b) monitoring the Company’s financial reporting processes and internal control systems, including the
remediation of material weaknesses in internal control, (c) retaining the Company’s independent registered public accounting
firm, (d) overseeing the Company’s independent registered public accounting firm and internal auditors and (e) monitoring
the Company’s compliance with its ethics policies and with applicable legal and regulatory requirements. The Audit Committee also
reviews and approves any transactions between the Company and any related parties. During 2021, the Audit Committee met 7 times. The
Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act.
Compensation Committee
The Compensation Committee consists of Arnaud Ajdler (Chair), James
Renacci and Grant McCullagh. Each member of the Compensation Committee is a “non-employee director” as defined in Rule 16b-3
of the Exchange Act and an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986,
as amended.
The Compensation Committee oversees the Company’s executive compensation
programs. The Compensation Committee reviews and recommends to the Board for approval the compensation arrangements for all of the Company’s
executive officers. During 2021, the Compensation Committee met 1 time. The processes of the Compensation Committee are described below
in “Executive Compensation.”
Governance and Nominating Committee
The Governance and Nominating Committee consists of Sue Steele (Chair),
Arnaud Ajdler and Paul Evans. The Governance and Nominating Committee oversees matters relating to the evaluation and recommendation
to the Board of the persons to be nominated for election as directors at any meeting of stockholders, and the persons to be appointed
by the Board to fill any vacancy on the Board.
The Governance and Nominating Committee is responsible for reviewing
and assessing with the Board the appropriate skills, experience, and background sought of Board members in the context of our business
and the then-current membership on the Board. This assessment includes a consideration of independence, diversity, age, skills, experience,
and industry backgrounds in the context of the needs of the Board and the Company, as well as the ability of current and prospective
directors to devote sufficient time to performing their duties in an effective manner.
The Governance and Nominating Committee carefully considers all director
candidates recommended by our stockholders, and the Governance and Nominating Committee does not and will not evaluate such candidate
recommendations any differently from the way it evaluates other candidates. The Company’s Amended and Restated Bylaws set forth
minimum qualifications for an individual to serve as a director of the Company. These minimum qualifications provide that no person shall
qualify for service or serve as a director of the Company: (a) unless such person is in compliance with all applicable laws and
regulatory requirements to which the Company’s directors may be subject in connection with such person’s service as a director,
(b) if such person has been convicted in, or entered a plea of nolo contendere with respect to, a criminal proceeding involving
fraud, misappropriation or other similar charge during the ten years preceding the date of election, or if such person has been found
responsible for or admitted responsibility for fraud, misappropriation or other similar charge in any governmental investigation or proceeding
or other civil judicial proceeding during the ten years preceding the date of election, or if such person has been found responsible
for or admitted responsibility for any material violation of any foreign, federal or state securities law or federal commodities law
during the ten years preceding the date of election, (c) if such person has been convicted of, or entered a plea of nolo contendere
with respect to, any felony, (d) if such person serves on the board of directors of more than three other public companies, (e) if
such person is a director, officer or holder of more than a five percent (5%) equity interest, directly or indirectly, in a business
that competes, directly or indirectly, with the Company, (f) if such person has made or makes any contribution or expenditure in
connection with the election of any candidate for political office, including any contribution to any committee supporting such a candidate
or to a political party, in any jurisdiction which results in the Company becoming ineligible to conduct its business or any portion
thereof, or (g) if such person has ever been the subject of a filing of personal bankruptcy in any jurisdiction, either voluntarily
or involuntarily (and in the case of an involuntary filing, if such filing was not dismissed within 60 days) during the ten years preceding
the applicable date of election.
Any stockholder who wishes to recommend an individual as a potential
nominee for election to the Board should submit such recommendation in writing by mail to Hill International, Inc., One Commerce
Square, 2005 Market Street, 17th Floor, Philadelphia, Pennsylvania 19103, Attn: Chair of Governance and Nominating Committee, together
with information regarding the experience, education and general background of the individual and a statement as to why the stockholder
believes such individual to be an appropriate candidate for the Board. Such recommendation should be provided to the Company no later
than the close of business on the 120th day prior to the one-year anniversary of the date the Company’s proxy statement was released
to stockholders in connection with the previous year’s annual meeting. During 2021, the Governance and Nominating Committee held
2 meetings.
Risk Committee
The Risk Committee consists of Paul Evans (Chair), David Sgro and
Grant McCullagh. The Risk Committee oversees matters regarding significant enterprise risks and other risks that may impact the Company’s
business and stockholder value as well as the processes that the Company uses to surface, understand and mitigate such risks. During
2021, the Risk Committee met 1 time.
Majority Voting in Uncontested Elections of Directors
Our Bylaws provide for majority voting in uncontested elections of
directors. Plurality voting applies in contested elections. A contested election is one in which the number of nominees exceeds the number
of directors to be elected and other conditions are met. In an uncontested election, nominees will be elected directors if they receive
a majority of the votes cast (i.e., the number of shares voted “for” a director must exceed the number of votes cast “withheld”
from that director, without counting abstentions or broker non-votes); if a nominee is an incumbent director but is not elected, such
director is required to tender his or her resignation to the Board promptly following the date of the certification of the election results.
The Nominating and Governance Committee shall make a recommendation to the Board as to whether to accept or reject the tendered resignation,
or whether other action should be taken. The Board shall act on the tendered resignation, taking into account the Nominating and Governance
Committee’s recommendation, and publicly disclose (by press release, filing with the SEC or other manner reasonably calculated
to inform stockholders) its decision regarding the tendered resignation and the rationale behind the decision within 90 days from
the date of the certification of the election results. In a contested election, the nominees who receive a plurality of the votes cast
(i.e., more votes in favor of their election than other nominees) will be elected directors.
Communicating Concerns to Directors
The Company encourages all interested persons to communicate any concern
that an officer, employee, director or representative of the Company may have engaged in illegal, dishonest or fraudulent activity, or
may have violated the Company’s Code of Ethics and Business Conduct. Such persons may report their concerns or other communications
including suggestions or comments to the Board in one of the following ways: by mail sent to William H. Dengler, Jr., Corporate
Secretary, at the Company’s principal executive office: One Commerce Square, 2005 Market Street, 17th Floor, Philadelphia, Pennsylvania
19103; by telephone at (866) 352-2792; or by email addressed to hil@openboard.info. All such communications will be referred to Mr. Dengler
who will circulate them to the members of the Board, or in the case of potential violations of the Company’s Code of Ethics and
Business Conduct, to the Chairman of the Audit Committee. If the communication is directed to a particular director, Mr. Dengler
will forward the communication to that director. The Board does not screen stockholder communications.
Involvement in Certain Legal Proceedings
In October 2012, Gridiron Capital hired Grant G. McCullagh to
serve as Chief Executive Officer of LTC, a general contractor, headquartered in Detroit, Michigan. In May 2014, LTC and its related
companies filed for bankruptcy in the State of Delaware. All matters involving management, the board and Gridiron, including Mr. McCullagh
were resolved by mediation in 2016.
Item 11. Executive Compensation.
As a “smaller reporting company,” the Company has elected
to follow the scaled disclosure requirements for smaller reporting companies with respect to the disclosures required by Item 402
of Regulation S-K. Under such scaled disclosure, the Company is not required to provide a Compensation Discussion and Analysis,
Compensation Committee Report or certain other tabular and narrative disclosures relating to executive compensation.
Our Compensation Philosophy and Guiding Principles
In support of our business and our long-term success, the Company’s
compensation program is designed to attract, motivate, reward and retain high-quality executives necessary to continually improve financial
performance, achieve profitable growth and enhance stockholder value. To that end, our Compensation Committee (the “Committee”)
has developed a compensation philosophy designed to reflect the following principles:
| • | There should be a strong link between pay and performance; |
| • | The interests of our executives should be aligned with those of
our stockholders; and |
| • | Compensation programs should reinforce our business strategy, focus
the executive team on priorities and ultimately drive growth in stockholder value. |
Named Executive Officers for 2021
The information under the heading “Executive Officers”
in Part I, Item 1 of the Original Form 10-K with respect to each of our named executive officers is incorporated by reference
into this Item 10.
| • | Raouf S. Ghali, President and Chief Executive Officer. |
| • | Abdo E. Kardous, Regional President (Middle East). |
| • | Todd Weintraub, Chief Financial Officer. |
2021 Performance-Based Bonuses (Cash)
In 2021 we adopted Annual Incentive Awards for Messrs. Ghali,
Kardous and Weintraub that are tied to achieving a balance of metrics aligned with our 2021 financial and strategic priorities: (i) Earnings
Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) performance; (ii) sales; and (iii) gross collections
and days outstanding.
No sales and gross collections and days outstanding bonuses are achieved
unless the 2021 EBITDA exceeds $18 million.
Bonus payout thresholds were as set forth below:
| | |
EBITDA | |
| Level | |
Performance
(% of
"Target
Performance") | | |
Payout
(% of Target
Pay Opportunity) | |
| Below Threshold | |
| <79.9 | % | |
| 0 | % |
| Threshold | |
| 79.9 | % | |
| 20 | % |
| Target | |
| 100.0 | % | |
| 100 | % |
| High Target | |
| 114.9 | % | |
| 200 | % |
| Maximum | |
| 129.9 | % | |
| 300 | % |
| | |
Sales | |
| Level | |
Performance
(% of
"Target
Performance") | | |
Payout
(% of Target
Pay Opportunity) | |
| Below Threshold | |
| <91.5 | % | |
| 0 | % |
| Threshold | |
| 91.5 | % | |
| 50 | % |
| Target | |
| 100.0 | % | |
| 100 | % |
| Maximum | |
| 115.9 | % | |
| 200 | % |
| | |
Gross
Collections / Days Outstanding - Company-wide | |
| Level | |
Average
Number of
Days Outstanding | | |
Performance
(% of
"Target
Performance") | | |
Payout
(% of Target
Pay Opportunity) | |
| Below Threshold | |
| >195 | | |
| >102.6 | % | |
| 0 | % |
| Threshold | |
| 195 | | |
| 102.6 | % | |
| 50 | % |
| Target | |
| 190 | | |
| 100.0 | | |
| 100 | % |
| Maximum | |
| 185 | | |
| 97.4 | | |
| 200 | % |
| | |
Gross
Collections / Days Outstanding - ME/APAC | |
| Level | |
Average
Number of
Days Outstanding | | |
Performance
(% of
"Target
Performance") | | |
Payout
(% of Target
Pay Opportunity) | |
| Below Threshold | |
| >200 | | |
| >104.7 | % | |
| 0 | % |
| Threshold | |
| 220 | | |
| 104.7 | % | |
| 50 | % |
| Target | |
| 210 | | |
| 100.0 | % | |
| 100 | % |
| Maximum | |
| 200 | | |
| 95.2 | % | |
| 200 | % |
Note: Payouts will be calculated linearly for achieving between the
threshold and the maximum percentage of the Target Performance.
For 2021, we set a target EBITDA of $25.734 million, with a threshold
of $20.587 million, a target sales amount of $395 million, with a threshold of $355 million, and a target of gross collections
/ days outstanding within the geographic area where each NEO has responsibility (“DSO”), with such amounts set forth in the
tables above. The target DSO applicable to Mr. Kardous is based on the ME/APAC DSO. The target DSO applicable to each of Messrs. Ghali
and Weintraub was the 2021 Company-wide DSO, as each such NEO is not assigned to a specific geographic area. The Annual Incentive Awards
for Messrs. Ghali, Kardous and Weintraub are based 70% on EBITDA, 20% on sales and 10% on DSOs.
2021 Performance-Based Bonuses: Metrics, Weight and Achievement
| | |
|
| |
Financial Objectives |
| |
| | |
| |
| Metric | |
Metric Weight |
| |
Threshold | | |
Target | | |
High Target |
| |
Maximum |
| |
2021 Metric | | |
Bonus Factor Payout(2) | |
| EBITDA | |
70% |
| |
| (1) | | |
| (1) | | |
(1) |
| |
| (1) |
| |
$ | 16.4
million | | |
0 | % |
| Sales Performance | |
20% |
| |
$ | 355.0 million | | |
$ | 395.0 million | | |
n/a |
| |
$ | 435.0 million |
| |
$ | 435.0
million | | |
0 | % |
| DSOs | |
|
| |
| | | |
| | | |
|
| |
| |
| |
| | | |
| |
| Raouf S. Ghali | |
10% |
| |
| 143 | | |
| 138 | | |
n/a |
| |
| 133 |
| |
| 118 | | |
0 | % |
| Abdo E. Kardous | |
10% |
| |
| 192 | | |
| 185 | | |
n/a |
| |
| 178 |
| |
| 164 | | |
0 | % |
| Todd Weintraub | |
10% |
| |
| 143 | | |
| 138 | | |
n/a |
| |
| 133 |
| |
| 118 | | |
0 | % |
| (1) | If EBITDA for 2021 exceeded the threshold but did not exceed
$21.75 million, then 75% of the difference between the EBITDA threshold and $21.75 million would have been contributed to the bonus pool.
In addition, if EBITDA for 2021 exceeded $21.75 million, then 50% of the amount of EBITDA in excess of $21.75 million would have been
contributed to the bonus pool. |
| (2) | 0% bonus factor payout for the sales performance and DSO-based bonuses since the Company did not achieve the $18 million minimum EBITDA
required. |
2021 Performance-Based Bonuses: Threshold, Target, Maximum and Actual
Payouts
| Name | |
2021 Target
Award | | |
2021
Threshold
Award | | |
2021
Maximum
Award | | |
Total
Weighted
Bonus
Payout
Factor | |
2021 Actual
Award | |
| Raouf S. Ghali | |
$ | 675,000 | | |
$ | 195,750 | | |
| (1) | | |
0% | |
$ | 0 | |
| Abdo E. Kardous | |
| 100,000 | | |
| 29,000 | | |
| (1) | | |
0% | |
| 0 | |
| Todd Weintraub | |
| 205,000 | | |
| 59,450 | | |
| (1) | | |
0% | |
| 0 | |
(1) If EBITDA for 2021 exceeded
the threshold but did not exceed $21.75 million, then 75% of the difference between the EBITDA threshold and $21.75 million would have
been contributed to the bonus pool. In addition, if EBITDA for 2021 exceeded $21.75 million, then 50% of the amount of EBITDA in excess
of $21.75 million would have been contributed to the bonus pool. Messrs. Ghali, Kardous and Weintraub would have been entitled to 33.27%,
4.92% and 10.09%, respectively, of the amount of the bonus pool.
2021 Long-Term Incentive Awards (Equity)
The Long-Term Incentive Awards granted to Messrs. Ghali, Kardous
and Weintraub in 2021 were comprised of deferred stock and restricted stock units in an amount equal to a fixed cash value based
upon the closing trade price on the date such restricted stock units are granted. These Long-Term Incentive Awards will vest in two
tranches. The first tranche will vest over time in three equal portions on the first, second and third anniversaries of the grant date,
provided the officer is then an employee of the Company. The second tranche of the restricted stock units is performance based and
will vest if the Company achieves certain target EBITDA amounts (as set forth in the second table below) in each of fiscal years
2021, 2022 or 2023; once the Company achieves the specified EBITDA amount, the number of deferred stock units ("DSUs"; according
to the payout column in the second table below) vest and will be issued when the NEO leaves the Company and the number of restricted stock units
("RSUs"; according to the payout column in the second table below) vest and will be issued on the third anniversary of the grant
date, regardless of whether the NEO remains an employee of the Company.
2021 Long-Term Incentive Award Opportunity Value
| Name | |
Long-Term
Incentive
Award
Amount
Fixed Cash
Value | | |
Target
Number of
Shares to be
Issued Upon
Settlement
of
DSUs/RSUs | | |
Aggregate
Grant Date
Fair Value
of Time-
Based DSUs/RSUs | | |
Total
Number of
Shares to be
Issued Upon
Settlement
of Time-
Based DSUs/RSUs | | |
Aggregate
Grant Date
Fair Value of
Performance-
Based
DSUs/RSUs (1) | | |
Total Number
of Shares to
be Issued
Upon
Settlement of
Performance-
Based DSUs/RSUs | |
| Raouf S. Ghali | |
$ | 451,914 | | |
| 382,978 | | |
$ | 451,914 | | |
| 191,489 | | |
$ | — | | |
| 191,489 | |
| Abdo E. Kardous | |
| 112,976 | | |
| 63,829 | | |
| 112,976 | | |
| 47,871 | | |
| — | | |
| 15,958 | |
| Todd Weintraub | |
| 110,467 | | |
| 93,616 | | |
| 110,467 | | |
| 46,809 | | |
| — | | |
| 46,808 | |
| (1) | The amounts reported in this column reflect the aggregate grant date fair value of the performance-based DSUs/RSUs calculated in accordance
with ASC 718. |
| Level |
|
|
Performance
(EBITDA over Vesting
Period) |
|
Payout (% of
Restricted Stock
Opportunity) |
| Below Threshold |
|
$ |
<33,000,000 |
|
0% |
| Threshold |
|
|
33,000,000 |
|
50% |
| Target |
|
|
38,000,000 |
|
100% |
| Maximum |
|
|
43,000,000 |
|
200% |
Note: Payouts will be calculated linearly for achieving an EBITDA between
$33 million and $43 million.
2020 Performance-Based Bonuses (Cash)
In 2020 we adopted Annual Incentive Awards for Messrs. Ghali,
Kardous and Weintraub that are tied to achieving a balance of metrics aligned with our 2020 financial and strategic priorities: (i) Earnings
Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) performance; (ii) sales; and (iii) gross collections
and days outstanding. Bonus payout thresholds were as set forth below:
| |
|
EBITDA |
| Level |
|
Performance (% of
"Target
Performance") |
|
Payout (% of Target Pay Opportunity) |
| Below Threshold |
|
<79.9% |
|
0% |
| Threshold |
|
79.9% |
|
20% |
| Target |
|
100.0% |
|
100% |
| High Target |
|
114.9% |
|
200% |
| Maximum |
|
129.9% |
|
300% |
| |
|
Sales |
| Level |
|
Performance (% of
"Target
Performance") |
|
Payout (% of Target Pay Opportunity) |
| Below Threshold |
|
<91.5% |
|
0% |
| Threshold |
|
91.5% |
|
50% |
| Target |
|
100.0% |
|
100% |
| Maximum |
|
115.9% |
|
200% |
| |
|
Gross Collections / Days Outstanding - Company-wide |
| Level |
|
Average Number of
Days Outstanding |
|
Performance (% of
"Target
Performance") |
|
Payout (% of Target
Pay Opportunity) |
| Below Threshold |
|
>195 |
|
>102.6% |
|
0% |
| Threshold |
|
195 |
|
102.6% |
|
50% |
| Target |
|
190 |
|
100.0 |
|
100% |
| Maximum |
|
185 |
|
97.4 |
|
200% |
| |
|
Gross Collections / Days Outstanding - ME/APAC |
| Level |
|
Average Number of
Days Outstanding |
|
Performance (% of
"Target
Performance") |
|
Payout (% of Target
Pay Opportunity) |
| Below Threshold |
|
>200 |
|
>104.7% |
|
0% |
| Threshold |
|
220 |
|
104.7% |
|
50% |
| Target |
|
210 |
|
100.0% |
|
100% |
| Maximum |
|
200 |
|
95.2% |
|
200% |
Note: Payouts will be calculated linearly for achieving between the
threshold and the maximum percentage of the Target Performance.
For 2020, we set a target EBITDA of $25.734 million, with a threshold
of $20.587 million, a target sales amount of $410 million, with a threshold of $375 million, and a target of gross collections / days
outstanding within the geographic area where each NEO has responsibility (“DSO”), with such amounts set forth in the tables
above. The target DSOs applicable to Mr. Kardous is based on the ME/APAC DSO. The target DSOs applicable to each of Messrs. Ghali
and Weintraub was the 2020 Company-wide DSO, as each such NEO is not assigned to a specific geographic area. The Annual Incentive Awards
for Messrs. Ghali, Kardous and Weintraub are based 55% on EBITDA, 35% on sales and 10% on DSOs.
2020 Performance-Based Bonuses: Metrics, Weight and Achievement
| | |
| |
Financial
Objectives | | |
| | |
| |
| Metric | |
Metric
Weight | |
Threshold | | |
Target | | |
High
Target | | |
Maximum | | |
2020
Metric | | |
Bonus
Factor
Payout | |
| EBITDA | |
55% | |
$ | 20.587
million | | |
$ | 25.734
million | | |
$ | 29.594
million | | |
$ | 33.454
million | | |
$ | 19.0
million | | |
| 0 | % |
| Sales
Performance | |
35% | |
$ | 375.0
million | | |
$ | 410.0
million | | |
| n/a | | |
$ | 475.0
million | | |
$ | 370.0
million | | |
| 0 | % |
| DSOs | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Raouf
S. Ghali | |
10% | |
| 195 | | |
| 190 | | |
| n/a | | |
| 185 | | |
| 143 | | |
| 200 | % |
| Abdo
E. Kardous | |
10% | |
| 220 | | |
| 210 | | |
| n/a | | |
| 200 | | |
| 201 | | |
| 190 | % |
| Todd
Weintraub | |
10% | |
| 195 | | |
| 190 | | |
| n/a | | |
| 185 | | |
| 143 | | |
| 200 | % |
2020 Performance-Based Bonuses: Threshold, Target, Maximum and Actual
Payouts
| Name | |
2020 Target
Award | | |
2020
Threshold Award | | |
2020
Maximum
Award | | |
Total
Weighted
Bonus
Payout
Factor | | |
2020 Actual
Award | |
| Raouf S. Ghali | |
$ | 675,000 | | |
$ | 226,125 | | |
$ | 1,721,250 | | |
| 20 | % | |
$ | 135,000 | |
| Abdo E. Kardous | |
| 100,000 | | |
| 33,500 | | |
| 255,000 | | |
| 19 | % | |
| 19,000 | |
| Todd Weintraub | |
| 205,000 | | |
| 68,675 | | |
| 522,750 | | |
| 20 | % | |
| 41,000 | |
2020 Long-Term Incentive Awards (Equity)
The Long-Term Incentive Awards granted to Messrs. Ghali, Kardous
and Weintraub in 2020 were comprised of restricted stock units in an amount equal to a fixed cash value based upon the closing trade price
on the date such restricted stock units are granted. These Long-Term Incentive Awards will vest in two tranches. The first tranche will
vest over time in three equal portions on the first, second and third anniversaries of the grant date, provided the officer is then an
employee of the Company. The second tranche of the restricted stock units is performance based and will vest if the Company achieves certain
target EBITDA amounts (as set forth in the second table below) in each of fiscal years 2020, 2021 or 2022; once the Company achieves the
specified EBITDA amount, the number of restricted stock units (according to the payout column in the second table below) vest and will
be issued on the third anniversary of the grant date, regardless of whether the NEO remains an employee of the Company.
| Name | |
Long-Term
Incentive
Award
Amount
Fixed Cash
Value | | |
Target
Number of
Shares to be
Issued Upon
Settlement
of
DSUs/RSUs | | |
Aggregate
Grant Date
Fair Value
of Time-
Based
DSUs/RSUs | | |
Total
Number of
Shares to be
Issued Upon Settlement
of Time-
Based
DSUs/RSUs | | |
Aggregate
Grant Date
Fair Value of
Performance-
Based
DSUs/RSUs (1) | | |
Total Number
of Shares to
be Issued
Upon
Settlement of
Performance-
Based
DSUs/RSUs | |
| Raouf S. Ghali | |
$ | 900,000 | | |
| 274,390 | | |
$ | 450,000 | | |
| 137,915 | | |
$ | — | | |
| 137,195 | |
| Abdo E. Kardous | |
| 150,000 | | |
| 45,731 | | |
| 112,500 | | |
| 34,298 | | |
| — | | |
| 11,432 | |
| Todd Weintraub | |
| 220,000 | | |
| 67,073 | | |
| 110,000 | | |
| 33,537 | | |
| — | | |
| 33,536 | |
| (1) | The amounts reported in this column reflect the aggregate grant date fair value of the performance-based RSUs calculated in accordance
with ASC 718. |
| Level |
|
|
Performance
(EBITDA over
Vesting Period) |
|
Payout (% of
Restricted Stock
Opportunity) |
| Below Threshold |
|
$ |
<33,000,000 |
|
0% |
| Threshold |
|
|
33,000,000 |
|
50% |
| Target |
|
|
38,000,000 |
|
100% |
| Maximum |
|
|
43,000,000 |
|
200% |
Note: Payouts will be calculated linearly for achieving an EBITDA between
$33 million and $43 million.
2021 Compensation Governance Practices
We are committed to executive compensation practices that drive performance
and that align the interests of our leadership team with the interests of our stockholders. We have implemented many best practices with
respect to the compensation of our NEOs including:
| 1. | A significant portion of our executives’ target compensation opportunity is related to short- and longer-term performance based
upon and tied to pre-established performance goals and the performance of our share price; |
| 2. | Total direct compensation opportunity for all of our NEOs is targeted at or below the market median; |
| 3. | Double-trigger” severance payments for executive officers requiring both a change of control and termination of employment; |
| 4. | Limited use of employment agreements; |
| 5. | Shifted the compensation for the majority of our executive officers by reducing salary by 15% and granting Annual Incentive Award
opportunities as well as Long-Term Incentive Award opportunities which are each equal to 15% of the respective pre-reduction salary; |
| 6. | Other than our CEO, continued awarding long-term incentive awards in the form of restricted stock units, rather than stock options;
and |
| 7. | Robust stock ownership guidelines (CEO at 6x salary). |
Practices we avoid with respect to the compensation of our NEOs include:
| 1. | Limited perquisites provided to our executive officers; |
| 2. | No excise tax gross-ups related to change-in-control severance
benefits; |
| 3. | No speculative trading of Company stock; |
| 4. | No hedging transactions; |
| 5. | No repricing of stock options; and |
| 6. | No unapproved pledging of Company stock. |
Summary Compensation Table
The following table contains information concerning the annual compensation
for our NEOs during 2021 and 2020.
| Name and Principal Position | |
Year | |
Salary
$ | | |
Stock
Awards
$ (1) | | |
Non-Equity
Incentive Plan
Compensation $
(2) | | |
All Other
Compensation $
(3) | | |
Total
$ | |
| Raouf S. Ghali, | |
2021 | |
| 725,000 | | |
| 450,000 | | |
| — | | |
| 23,508.00 | | |
| 1,198,508 | |
| President and Chief Executive Officer | |
2020 | |
| 725,000 | | |
| 450,000 | | |
| 135,000 | | |
| 33,855 | | |
| 1,343,855 | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Abdo E. Kardous, | |
2021 | |
| 525,000 | | |
| 112,500 | | |
| — | | |
| 7,149.78 | | |
| 644,649.78 | |
| Regional President (Middle East) | |
2020 | |
| 525,000 | | |
| 112,500 | | |
| 19,000 | | |
| 20,733 | | |
| 677,233 | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Todd Weintraub, | |
2021 | |
| 410,000 | | |
| 110,000 | | |
| — | | |
| 26,285.52 | | |
| 546,285.52 | |
| Chief Financial Officer | |
2020 | |
| 410,000 | | |
| 110,000 | | |
| 41,000 | | |
| 17,100 | | |
| 578,100 | |
| (1) | The amounts reported in this column reflect the aggregate grant date
fair value of grants of Long-Term Incentive Awards calculated in accordance with ASC 718. In 2021, Messrs. Ghali, Kardous and Weintraub
were granted time-vested deferred and restricted stock units with a value of $450,000, $112,500 and $110,000, respectively. These units
will vest one-third annually over a three-year period following the grant date. Messrs. Ghali, Kardous and Weintraub were also granted
performance-based deferred and restricted stock units with a fixed cash value on the grant date of $450,000, $112,500 and $110,000, respectively.
In 2020, Messrs. Ghali, Kardous and Weintraub were granted time-vested restricted stock units with a value of $450,000, $112,500
and $110,000, respectively. These units will vest one-third annually over the three-year period following the grant date. Messrs.
Ghali, Kardous and Weintraub were also granted performance-based restricted stock units with a fixed cash value on the grant date
of $450,000, $37,500 and $110,000, respectively. |
| (2) | The amounts reported in this column for 2020 reflect the payment of Annual Incentive Awards, paid in 2021 related to 2020 performance.
Please refer to the sections above entitled “2020 Performance-Based Bonuses (Cash)” for additional information on the Annual
Incentive Awards. |
| (3) | This amount includes Company-paid contributions to a 401(k) Plan, health insurance premiums, life insurance premiums and vehicle
and parking benefits that are available to all employees of similar employment status, if elected. |
Outstanding Equity Awards at Fiscal Year End
The following table presents information with respect to outstanding
equity awards held by our named executive officers as of December 31, 2021.
| Name |
|
Number of Security Underlying Unexercised Options (#) Exercisable |
|
|
Number of Security Underlying Unexercised Options (#) Unexercisable |
|
|
Option Exercise Price |
|
|
Option Expiration Date |
|
Equity Incentive Plan: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) |
|
|
Equity Incentive Plan: Market Value of Unearned Shares, Units or Other Rights that Have Not Vested ($) |
|
| Raouf S. Ghali |
|
|
200,000 |
|
|
|
— |
(1) |
|
|
4.03 |
|
|
1/27/2022 |
|
|
|
|
|
|
|
| |
|
|
250,000 |
|
|
|
— |
(2) |
|
|
4.00 |
|
|
4/2/2023 |
|
|
|
|
|
|
|
| |
|
|
200,000 |
|
|
|
50,000 |
(3) |
|
|
4.65 |
|
|
3/8/2024 |
|
|
|
|
|
|
|
| |
|
|
333,333 |
|
|
|
166,667 |
(4) |
|
|
3.13 |
|
|
6/11/2024 |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
139,319 |
(5) |
|
450,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,440 |
(6) |
|
150,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,195 |
(7) |
|
450,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91,463 |
(8) |
|
300,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
191,489 |
(9) |
|
451,914 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
191,489 |
(10) |
|
451,914 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Abdo E. Kardous |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,821 |
(5) |
|
22,174 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,821 |
(6) |
|
22,174 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,432 |
(7) |
|
37,497 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,864 |
(8) |
|
74,994 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,871 |
(9) |
|
112,976 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,958 |
(10) |
|
37,661 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Todd Weintraub |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,734 |
(5) |
|
102,501 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,578 |
(6) |
|
34,167 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,537 |
(7) |
|
110,001 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,358 |
(8) |
|
73,333 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,808 |
(9) |
|
110,467 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,808 |
(10) |
|
110,467 |
|
| (1) | These options were granted on January 27, 2015 and vested at the rate of 20% per year with vesting dates of January 27,
2016, 2017, 2018, 2019 and 2020. |
| (2) | These options were granted on April 2, 2016 and vested at the rate of 20% per year with vesting dates of April 2, 2017,
2018, 2019, 2020 and 2021. |
| (3) | These options were granted on March 8, 2017 and vested at the rate of 20% per year with vesting dates of March 8, 2018,
2019, 2020, 2021 and 2022. |
| (4) | These options were granted on June 11, 2019 and have vested and will continue to vest at the rate of 33.3% per year with vesting
dates of June 11, 2020, 2021 and 2022. |
| (5) | Represents RSUs issued under the Hill International Inc. 2017 Equity Incentive Plan which entitle each participant to receive one
unit of restricted stock each. On January 10, 2019, Messrs. Ghali, Kardous and Weintraub were awarded units of restricted
stock that are subject to cliff vesting on the three year anniversary of the date the units were awarded, or January 10, 2022
(the “2022 Cliff Vesting Date”). Such portion of the awards will vest on the conditions that each employee remain with the
Company during the three-year period until the 2022 Cliff Vesting Date and that specified performance goals are achieved. Because the
Company did not estimate that the conditions under any of the performance level ranges would be met, there was no such compensation expense
recorded for the year ended December 31, 2019. Please refer to the section entitled “2019 Long-Term Incentive Awards (Equity)”
for additional information. |
| (6) | Represents RSUs issued under the Hill International Inc. 2017 Equity Incentive Plan which entitle each participant to receive one
unit of restricted stock each. On January 10, 2019, Messrs. Ghali, Kardous and Weintraub were awarded units of restricted
stock that will vest over time in three equal portions on the first, second and third anniversaries of the grant date, provided the officer
is then an employee of the Company. |
| (7) | Represents RSUs issued under the Hill International Inc. 2017 Equity Incentive Plan which entitle each participant to receive one
unit of restricted stock each. On January 13, 2020, Messrs. Ghali, Kardous and Weintraub were awarded units of restricted
stock that are subject to cliff vesting on the three year anniversary of the date the units were awarded, or January 13, 2023
(the “2023 Cliff Vesting Date”). Such awards will vest on the conditions that each employee remain with the Company during
the three-year period until the 2023 Cliff Vesting Date and that specified performance goals are achieved. Because the Company did not
estimate that the conditions under any of the performance level ranges would be met, there was no such compensation expense recorded for
the year ended December 31, 2020. Please refer to the section entitled “2020 Long-Term Incentive Awards (Equity)” for
additional information. |
| (8) |
Represents RSUs issued under the Hill International Inc. 2017 Equity Incentive Plan which entitle each participant to receive
one unit of restricted stock each. On January 13, 2020, Messrs. Ghali, Kardous and Weintraub were awarded units of
restricted stock that will vest over time in three equal portions on the first, second and third anniversaries of the grant date,
provided the officer is then an employee of the Company. |
| (9) | Represents DSUs and RSUs issued under the Hill International Inc. 2017 Equity Incentive Plan which entitle each participant to receive
one unit of deferred stock or restricted stock each. On January 14, 2021, Messrs. Ghali, Kardous and Weintraub were awarded units
of either deferred or restricted stock that are subject to cliff vesting on the three year anniversary of the date the units were
awarded, or January 14, 2024 (the “2024 Cliff Vesting Date”). Such awards will vest on the conditions that each employee
remain with the Company during the three-year period until the 2024 Cliff Vesting Date and that specified performance goals are achieved.
Because the Company did not estimate that the conditions under any of the performance level ranges would be met, there was no such compensation
expense recorded for the year ended December 31, 2021. Please refer to the section entitled “2021 Long-Term Incentive Awards
(Equity)” for additional information. |
| (10) | Represents DSUs and RSUs issued under the Hill International Inc. 2017 Equity Incentive Plan which entitle each participant to receive
one unit of either deferred stock or restricted stock each. On January 13, 2020, Messrs. Ghali, Kardous and Weintraub were awarded units
of either deferred stock or restricted stock that will vest over time in three equal portions on the first, second and third anniversaries
of the grant date, provided the officer is then an employee of the Company. |
2016 Executive Retention Plan
Effective November 3, 2016, the Board adopted the
Company’s 2016 Executive Retention Plan (the “2016 Retention Plan”) which provides for the payment of severance
benefits by the Company to certain designated employees (each a “Participant”) whose employment is permanently
terminated due to an Involuntary Termination (as defined in the 2016 Retention Plan). Upon termination of a Participant’s
employment by the Company without “Cause” (as set forth in the 2016 Retention Plan) or by the Participant for
“Good Reason” (as defined in the 2016 Retention Plan), the Company will be required to pay to the Participant a lump sum
cash payment in an amount equal to one times the Participant’s base salary at such time; notwithstanding the foregoing, if the
termination is within one year following a Change in Control (as defined in the 2016 Retention Plan), the Company will be required
to pay to the Participant a lump sum cash payment in an amount equal to two times the Participant’s base salary at such time
and any and all unvested stock options, stock grants or other stock based compensation granted to the Participant shall then
immediately vest.
As of December 31, 2021, Messrs. Ghali and Kardous were designated
as participants under the 2016 Retention Plan. For Mr. Ghali, he is entitled to a lump sum cash payment in an amount equal to two
times his base salary upon termination of his employment by the Company without “Cause” (as set forth in the 2016 Retention
Plan) or by him for “Good Reason” (as defined in the 2016 Retention Plan).
Director Compensation
Other than our President and CEO, whose compensation as such is reflected
on the Summary Compensation Table above, the table below details the compensation paid to our directors for their service as a director
in 2021. The Board pays each non-employee director $120,000 for his or her service, of which $48,000 is payable in cash and $72,000 is
payable in deferred stock units. Also, the Chairman of the Board receives an additional annual retainer of $40,000, payable in cash.
The Chairman of the Compensation Committee and the Chairman of the Governance and Nominating Committee each continue to receive an additional
annual committee chairman’s fee of $5,000 payable in cash, and the Chairman of the Audit Committee continues to receive an additional
annual committee chairman’s fee of $10,000 payable in cash. Directors may elect to receive deferred stock units in lieu of
a cash payment.
| | |
Fees Earned or Paid in Cash $ | | |
Stock Awards $(1) | | |
Total $ | |
| David Sgro | |
| 64,000 | | |
| 96,000 | | |
| 160,000 | |
| Arnaud Ajdler(2) | |
| — | | |
| 124,994 | | |
| 124,994 | |
| Paul J. Evans | |
| 52,000 | | |
| 78,000 | | |
| 130,000 | |
| Grant McCullagh | |
| 48,000 | | |
| 71,999 | | |
| 119,999 | |
| Sue Steele | |
| 50,000 | | |
| 75,000 | | |
| 125,000 | |
| James B. Renacci | |
| 48,000 | | |
| 71,999 | | |
| 119,999 | |
| (1) | The amounts reported in these columns reflect the aggregate grant date fair value of stock awards, grants of stock options and grants
of DSUs calculated in accordance with ASC 718. The amounts for options and DSUs do not reflect compensation actually received by the director.
The actual value, if any, that a director may realize from an option award is contingent upon the excess of the stock price over the exercise
price, if any, on the date the option is exercised; the actual value that a director may realize from a DSU is contingent upon the stock
price on the date the DSU is settled following the termination of a director’s service on the Board. Thus, there is no assurance
that the value eventually realized by the director will correspond to the amount shown. |
| (2) | Mr. Ajdler elected to receive DSUs in lieu of his respective cash payments. |