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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 2014. Under the
current policy, Non-employee Directors receive
$115,000 annually for their service as such. A Non-
employee Director serving on the Audit Committee
receives an additional $10,000 annually for that
service. In addition, the chairs of each of the
Compensation
Committee,
Audit
Committee,
Corporate Governance Committee, Investment and
Investment Risk Committee, and Sustainability
Committee receive additional annual fees of $20,000,
$25,000,
$15,000,
$20,000,
and
$15,000,
respectively. 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 determined by the Compensation
Committee.
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 nonqualified stock options, stock
appreciation rights, restricted stock, or a combination
thereof with a dollar value to approximate $125,000
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 Mercer LLC, the
Compensation
Committee’s
independent
compensation consultant (the “Consultant”). If the
Board grants stock options, it may permit Non-
employee Directors to elect to receive restricted stock
in lieu thereof. In 2014, 5 of 10 Non-employee
Directors received nonqualified stock options covering
9,105 shares of Common Stock, and the remaining 5
elected to receive all restricted stock. The exercise
price for the stock options is the closing market price
of the Common Stock on the date of grant. Options
granted to each Non-employee Director become
exercisable under the terms and conditions as
determined by the Board of Directors at the date of
grant. Grants of options made to Non-employee
Directors in 2014 become exercisable in equal
installments on each of the next four anniversaries of
the date of the option grant, and restricted stock
awards issued in 2014 become vested on the fourth
anniversary of the date of the award, in each case if
the Non-employee Director continues to be a Director
through such respective date. However, 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 2014, none of the Non-employee
Directors made such an election.
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.
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