Item 9B. OTHER INFORMATION

Approval of CEO Compensation Arrangements with Walter J. Lynch

As previously disclosed, in response to the previously announced retirement of Susan N. Story, the Company’s President and Chief Executive Officer, effective April 1, 2020, and in accordance with the existing succession plan of the Company’s Board of Directors (the “Board”) for the Company’s principal executive officer position, on December 6, 2019, the Board elected Walter J. Lynch, the Company’s current Executive Vice President and Chief Operating Officer, to serve as successor to Susan N. Story, effective April 1, 2020. To provide for Mr. Lynch’s compensation in his new role, the Company and Mr. Lynch have executed an employment offer letter, dated February 12, 2020 and effective April 1, 2020, which was unanimously approved by the independent members of the Board upon the unanimous recommendation of the Executive Development and Compensation Committee and its independent compensation consultant.

The employment offer letter provides for the following terms, effective April 1, 2020:


•	Mr. Lynch’s annual base salary is to be set at $925,000.


•	Mr. Lynch is to receive a 2020 target award under the Annual Performance Plan (the “APP”) as President and Chief Executive Officer. His target award opportunity is to be set at 100% of his annual base salary, which will be prorated to reflect the portions of the year he serves as Executive Vice President and Chief Operating Officer and will serve as President and Chief Executive Officer. His performance goals to be used to determine the corporate performance factor with respect to his 2020 APP award will be the same as those in his 2019 APP award.

•

Mr. Lynch is to receive a 2020 target award under the Annual Performance Plan (the “APP”) as President and Chief Executive Officer. His target award opportunity is to be set at 100% of his annual base salary, which will be prorated to reflect the portions of the year he serves as Executive Vice President and Chief Operating Officer and will serve as President and Chief Executive Officer. His performance goals to be used to determine the corporate performance factor with respect to his 2020 APP award will be the same as those in his 2019 APP award.


•	Mr. Lynch was granted LTPP awards under the Company’s 2017 Omnibus Equity Compensation Plan pursuant to the terms of the Company’s 2020 Long-Term Performance Plan (“LTPP”). In addition to standard LTPP awards granted to him on February 11, 2020 in his role as Executive Vice President and Chief Operating Officer (which were based on his current target award opportunity percentage of 165% and annual base salary of approximately $634,000), he was granted additional LTPP awards effective April 1, 2020 equal to the difference between the fair value of LTPP grants he would be eligible to receive as President and Chief Executive Officer as of April 1, 2020 based on a target award opportunity of 275% and his then annual base salary, and the fair value of the February 11, 2020 LTPP grants. The April 1, 2020 LTPP awards have standard terms and vesting conditions substantially similar to those granted to Mr. Lynch in February 2020. All of Mr. Lynch’s 2020 LTPP awards will include the post-retirement continued vesting provisions applicable to the Company’s executives serving in the CEO, CFO and COO roles.

•

Mr. Lynch was granted LTPP awards under the Company’s 2017 Omnibus Equity Compensation Plan pursuant to the terms of the Company’s 2020 Long-Term Performance Plan (“LTPP”). In addition to standard LTPP awards granted to him on February 11, 2020 in his role as Executive Vice President and Chief Operating Officer (which were based on his current target award opportunity percentage of 165% and annual base salary of approximately $634,000), he was granted additional LTPP awards effective April 1, 2020 equal to the difference between the fair value of LTPP grants he would be eligible to receive as President and Chief Executive Officer as of April 1, 2020 based on a target award opportunity of 275% and his then annual base salary, and the fair value of the February 11, 2020 LTPP grants. The April 1, 2020 LTPP awards have standard terms and vesting conditions substantially similar to those granted to Mr. Lynch in February 2020. All of Mr. Lynch’s 2020 LTPP awards will include the post-retirement continued vesting provisions applicable to the Company’s executives serving in the CEO, CFO and COO roles.


•	Mr. Lynch will continue to participate in the Company’s Executive Severance Policy. Under this policy, in the event Mr. Lynch’s employment as President and Chief Executive Officer is terminated by the Company without cause (as determined by the Board of Directors), he would be eligible to receive salary continuation and COBRA benefits, and would continue to participate in any Company-sponsored life insurance plan, for a period of 18 months following the date of termination. In that circumstance, he also would receive a pro rata APP award for the year in which the termination of employment occurs, to the extent such payment is provided for under the terms of the applicable APP award.

•

Mr. Lynch will continue to participate in the Company’s Executive Severance Policy. Under this policy, in the event Mr. Lynch’s employment as President and Chief Executive Officer is terminated by the Company without cause (as determined by the Board of Directors), he would be eligible to receive salary continuation and COBRA benefits, and would continue to participate in any Company-sponsored life insurance plan, for a period of 18 months following the date of termination. In that circumstance, he also would receive a pro rata APP award for the year in which the termination of employment occurs, to the extent such payment is provided for under the terms of the applicable APP award.


•	Mr. Lynch will continue to be eligible to receive benefits as provided under the Company’s qualified and nonqualified defined benefit pension plans, as they may be in effect from time to time.


•	Mr. Lynch will continue to be eligible to participate in the Company’s employee nonqualified deferred compensation plan and its 401(k) savings plan.


•	Mr. Lynch will continue to be subject to the Company’s executive stock ownership guidelines. Beginning April 1, 2020, he will be required to own common stock with a value of at least six times his annual base salary.

Election of Mr. Lynch to the Board

On February 12, 2020, the Board unanimously approved the election of Mr. Lynch, effective April 1, 2020, to fill the vacancy to be created when Ms. Story retires and steps down from the Board. Mr. Lynch will serve a term to commence April 1, 2020 and ending on the date of the Company’s 2020 Annual Meeting of Shareholders (the “Annual Meeting”), and until his successor has been elected and qualified, or until his earlier death, resignation or removal. Mr. Lynch will not serve on any committees of the Board. On that same day, the Board nominated Mr. Lynch, effective April 1, 2020, as a nominee for election as a director at the Annual Meeting, to serve a term commencing on the date of the Annual Meeting and ending on the date of the Company’s 2021 Annual Meeting of Shareholders, and until his successor has been elected and qualified, or until his earlier death, resignation or removal.

Other than as part of or in connection with the compensatory and other arrangements with Mr. Lynch described above, in connection with his election to the Board, (i) there are no other arrangements or understandings between Mr. Lynch and any other person, pursuant to which Mr. Lynch was selected as a director, (ii) no material plan, contract or arrangement has been entered into with Mr. Lynch, and no such plan, contract or arrangement with Mr. Lynch has been materially amended, and (iii) no grant of any award to Mr. Lynch or modification of an existing award has been made. Also, Mr. Lynch does not have any direct or indirect material interest in any transaction that would require reporting under Item 404(a) of Regulation S-K.

PART III

Previous: Item 9A. CONTROLS AND PROCEDURES · Next: Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE