30 / 72
DIRECTOR COMPENSATION
Directors who also serve as employees of the
Company or its subsidiaries are not entitled to
compensation as Board members. For all other
directors
(“Non-employee
Directors”),
the
Compensation Committee reviews the policy
regarding total compensation at least every other year
and recommends compensation to the Board for Non-
employee Directors consistent with the policy. The
policy was reviewed and amended in 2015. Under the
current policy, Non-employee Directors receive
$115,000 annually for their service as such. A Non-
employee Director serving on the Audit and Risk
Committee receives an additional $10,000 annually
for that service. In addition, the chairs of each of the
Compensation Committee, Audit and Risk Committee,
Corporate Governance Committee, Finance and
Investment Committee, Sustainability Committee, and
Acquisition (now Corporate Development) Committee
receive additional annual fees of $20,000, $25,000,
$15,000, $20,000, $15,000, and $15,000 respectively.
The Lead Non-Management Director receives an
additional $25,000 annual fee. From time to time the
Board may create a Special Purpose Committee
made up of Non-employee Directors; remuneration for
service on these committees is recommended by the
Compensation Committee. The Board makes final
determinations regarding Non-employee Director
compensation.
When a Non-employee Director first joins the Board of
Directors, he or she is granted an award of
nonqualified stock options, stock appreciation rights,
restricted stock, or a combination thereof, with a value
as determined by the Board of Directors not in excess
of the value of a nonqualified stock option covering an
aggregate of 10,000 shares of Common Stock. In the
following calendar year, and for each year thereafter,
each Non-employee Director may, at the discretion of
the Board, receive restricted stock, nonqualified stock
options, stock appreciation rights, or a combination
thereof with a dollar value to approximate $135,000
based upon (in the case of stock options and stock
appreciation rights) the most current Black-Scholes-
Merton three-year period valuation price of option
shares as determined by the Compensation
Committee’s independent compensation consultant,
Mercer LLC (the “Consultant”). If the Board grants
restricted stock, it may permit Non-employee Directors
to elect to receive nonqualified stock options in lieu
thereof. In 2015, no Non-employee Director elected to
receive nonqualified stock options. Grants of restricted
stock made to Non-employee Directors in 2015
become vested on the first anniversary of the date of
the award if the Non-employee Director continues to
be a Director through such date. Upon cessation of
service by reason of retirement, a Non-employee
Director becomes immediately vested in all
outstanding stock options and awards that have not
yet expired, as long as the Non-employee Director
has completed at least one full year of vesting. A Non-
employee Director becomes 100% vested in options
and stock awards upon cessation of service by reason
of death, disability or change in control.
Non-employee Directors, with the exception of those
who are or within one year will become retirement
eligible, may elect to have all or a portion of their
Board annual retainer paid in the form of immediately
vested nonqualified stock options, restricted stock that
vests upon four years of continued service, or a
combination thereof as determined by the Board of
Directors. In 2015, one of the Non-employee Directors
made an election to receive a combination of
restricted stock and nonqualified stock options in lieu
of an annual retainer.
The Company maintains a retirement plan for Non-
employee Directors who have attained age 55 and
completed at least five years of service as a Non-
employee Director. Effective 2002, newly elected Non-
employee Directors are not eligible for participation in
this plan. The dollar value and length of payment of
the annual retirement benefits were frozen effective
May 3, 2010. The Non-employee Directors do not
participate in any nonqualified deferred compensation
plans.
For additional information, please see “Stock
Ownership Guidelines; Hedging and Pledging
Restrictions” on page 41.
23