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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Andersons Inc | NASDAQ:ANDE | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-1.36 | -2.37% | 55.91 | 55.87 | 56.01 | 57.07 | 55.91 | 57.07 | 29,143 | 16:37:18 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under Rule 14a-12
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The Andersons, Inc.
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(Name of registrant as specified in its charter)
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(Name of person(s) filing proxy statement, if other than the registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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The election of ten directors identified as nominees herein to hold office for a one-year term.
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Advisory approval or disapproval of executive compensation.
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Recommendation on the frequency of advisory votes on executive compensation.
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The ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2017.
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Any other matters that may properly come before the Annual Meeting and any adjournments or postponements thereof.
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By order of the Board of Directors
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Maumee, Ohio
March 16, 2017
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/s/ Naran U. Burchinow
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Naran U. Burchinow
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Secretary
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Page
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Introduction
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This Proxy Solicitation
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The Annual Meeting: Quorum
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Common Shares Outstanding
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Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 12, 2017
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Voting
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How to Vote Your Shares
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How to Revoke Your Proxy
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Voting at the Annual Meeting
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The Board’s Recommendations
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Votes Required to Approve Each Item
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Householding
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Where to Find Voting Results
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Summary of Proposals
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Election of Directors
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Corporate Governance
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Board Meetings and Committees
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Code of Ethics
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Review, Approval or Ratification of Transactions with Related Persons
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Audit Committee Report
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Use of Compensation Consultants
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Compensation / Risk Relationship
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Proposal for an Advisory Vote on Executive Compensation
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Proposal for an Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation
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Appointment of Independent Registered Public Accounting Firm
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Independent Registered Public Accounting Firm
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Audit and Other Fees
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Policy on Audit Committee Pre-Approval of Services Performed by the Independent Registered Public Accounting Firm
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Proposal to Ratify the Appointment of Independent Registered Public Accounting Firm
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Share Ownership
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Shares Owned by Directors and Executive Officers
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Share Ownership of Certain Beneficial Owners
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Section 16(a) Beneficial Ownership Reporting Compliance
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Compensation and Leadership Development Committee Interlocks and Insider Participation
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Executive Compensation
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Compensation and Leadership Development Committee Report
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Compensation Discussion and Analysis
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Executive Summary
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General Principles and Procedures
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2016 Executive Compensation Components
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Director Compensation
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Other Information
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Shareholders Proposals for 2018 Annual Meeting
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Additional Information
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•
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Voting
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•
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Summary of Proposals
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•
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Election of Directors
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•
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Corporate Governance
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Proposal for an Advisory Vote on Executive Compensation
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Proposal for an Advisory Vote on the Frequency of Executive Compensation
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Appointment of Independent Registered Public Accounting Firm
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Share Ownership
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Executive Compensation
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•
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Director Compensation
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•
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Other Information
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•
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Vote by telephone:
If you received a proxy card, you can vote by phone at any time by calling the toll-free number (for residents of the U.S.) listed on your proxy card. To vote, enter the control number listed on your proxy card and follow the simple recorded instructions.
If you vote by phone, you do not need to return your proxy card.
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Vote by mail:
If you received a proxy card and choose to vote by mail, simply mark your proxy card, and then date, sign and return it in the postage-paid envelope provided.
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Vote via the Internet:
You can vote by Internet at any time by visiting the website listed on your proxy card, notice document or email that you received. Follow the simple instructions and be prepared to enter the code listed on the proxy card, notice document or email that you received.
If you vote via the Internet, you do not need to return your proxy card.
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Vote in person at the Annual Meeting
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Notifying Naran U. Burchinow, our Secretary, in writing prior to the Annual Meeting;
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Submitting a later dated proxy card, telephone vote or Internet vote; or
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Attending the Annual Meeting and revoking your proxy in writing.
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to elect the nominated directors,
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to approve this year's advisory resolution on executive compensation,
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to seek an advisory resolution on executive compensation annually, and
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to ratify the selection of the independent registered public accounting firm.
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Na
me
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Age
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Principal Occupation, Business Experience
and Other Directorships
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Director
Since
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Patrick E. Bowe
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58
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President and CEO since November 2, 2015. Prior to that, Corporate Vice President of Cargill, Inc. and a leader of Cargill's Food Ingredients and Systems business since 2007. Prior to joining Cargill's Corn Milling Division, managed the copper trading desk for Cargill Metals Division and worked as a trader and analyst for Cargill Investor Services at the Chicago Board of Trade. Worked as a cash grain merchant for Louis Dreyfus Corp. in Springfield, Ill., and Phil O'Connel Grain Co., in Stockton, California.
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2015
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Michael J. Anderson, Sr.
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65
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Chairman since 2009. Chief Executive Officer from January 1999 to October 2015. President from January 1999 through December 2012. Prior to that President and Chief Operating Officer from 1996 through 1998, Vice President and General Manager of the Retail Group from 1994 until 1996 and Vice President and General Manager Grain Group from 1990 through 1994. Currently a Director of FirstEnergy Corp. beginning in 2007 and formerly a Director of Interstate Bakeries Corp from 1998 to 2009.
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1988
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Gerard M. Anderson
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58
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Chairman and Chief Executive Officer of DTE Energy since 2014; Chairman, President and Chief Executive Officer of DTE Energy from 2010 through 2013; President and Chief Operating Officer of DTE Energy from 2005 through 2010. Joined Detroit Edison, a subsidiary of DTE Energy in 1993 and held various executive positions. Prior to this, a consultant with McKinsey & Co., Inc. Director of DTE Energy since 2009.
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2008
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Catherine M. Kilbane
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53
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Senior Vice President, General Counsel and Secretary of The Sherwin-Williams Company since 2013. Prior to that, Senior Vice President, General Counsel and Secretary of American Greetings Corporation from 2003-2012. Prior to that a partner with the Cleveland law firm of Baker & Hostetler LLP.
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2007
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Robert J. King, Jr.
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61
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Senior Adviser for FNB Corp since 2013. Prior to that, President and Chief Executive Officer, PVF Capital Corp from 2009 to 2013; Senior Managing Director, Private Equity, FSI Group, LLC from 2006 through 2009; Managing Director, Western Reserve Partners LLC from 2005-2006; Regional President of Fifth Third Bank from 2002 through 2004 and Chairman, President and Chief Executive Officer of Fifth Third Bank (Northeastern Ohio) from 1997 through 2002. On the advisory board of Ancora Advisors September 23 to December 15, 2016. Director of Shiloh Industries, Inc. since 2005, MTD Corp. since 2005, and Medical Mutual of Ohio since 2012.
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2005
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Ross W. Manire
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65
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President and Chief Executive Officer of ExteNet Systems, Inc. since 2002. Served as President, Enclosure Systems Division of Flextronics International from 2000 to 2002. Prior to that held senior management positions at Chatham Technologies, Inc., and 3Com Corporation. Former Partner at Ridge Capital Corporation and Ernst & Young LLP. Director of Zebra Technologies Corporation since 2003 and Eagle Test Systems, Inc. from 2004 through 2008.
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2009
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Donald L. Mennel
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70
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Chairman of the Board of The Mennel Milling Company since 2012. President and Treasurer of The Mennel Milling Company from 1984 through 2012. Served on the Executive Committee of the North American Millers Association.
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1998
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Patrick S. Mullin
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68
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Retired Managing Partner of Deloitte & Touche LLP in Cleveland. Director of The OM Group, Inc. from 2011 through November 2015.
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2013
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John T. Stout, Jr.
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63
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Chairman and Chief Executive Officer of Plaza Belmont Management Group LLC since 2014. Prior to that, Chief Executive Officer of Plaza Belmont Management Group LLC since 1998. Chairman of the Board of Renwood Mills, LLC since 2016. Chairman of Diana Fruit Company since 2014. Previously President of Manildra Milling Corp and Manildra Energy Corp from 1991 through 1998 and Executive Vice President of Dixie Portland Flour Mills Inc. from 1984 to 1990.
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2009
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Jacqueline F. Woods
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69
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Retired President of Ameritech Ohio (subsequently renamed AT&T Ohio). Director of The Timken Company since 2000.
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1999
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John T. Stout, Jr.
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• Currently engaged as Chairman and Chief Executive Officer of a private equity fund that acquires diversified food processing companies and related businesses
• Experience in the financial markets as it relates to the food industry, including analysis of agricultural commodity risk
• Mergers and acquisition experience
• Experience managing companies that consume of wheat, corn, soybeans, rice and other commodities
• Board member for a variety of companies in the food industry
• Elected to Kansas City Federal Reserve Board January 1, 2010 and again on January 1, 2013; previously six years on Kansas City Federal Reserve Board Economic Advisory Committee; Currently serving on the Compensation Committee and the Executive Search Committee of Federal Reserve Bank of Kansas City
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Jacqueline F. Woods
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• Experience as a President of large telecommunications company
• Experience as a member of other public company boards
• Career experience in finance, marketing, strategic planning, public relations and government affairs
• Executive Leadership Program, Kellogg Graduate School of Management, Northwestern University
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Committees of the Board effective as of the May 2016
Annual Meeting
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Name
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Board
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Audit
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Compensation
and
Leadership
Development
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Governance /
Nominating
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Finance
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Michael J. Anderson, Sr.
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C
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Patrick E. Bowe
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X
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Gerard M. Anderson
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X
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X
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Catherine M. Kilbane
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X
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C
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X
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Robert J. King, Jr.
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X
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X
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C
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Ross W. Manire
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X
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X
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X
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Donald L. Mennel
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X
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X
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C
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Patrick S. Mullin
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X
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C
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X
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John T. Stout, Jr.
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X
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X
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X
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Jacqueline F. Woods
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X
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X
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X
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•
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Able to serve for a reasonable period of time
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Multi-business background preferred
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Successful career in business preferred
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Active vs. retired preferred
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•
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Audit Committee membership potential
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•
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Strategic thinker
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•
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Leader / manager
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•
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Agribusiness background, domestic and international
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•
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Transportation background
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•
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Brand marketing exposure
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AUDIT COMMITTEE
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Patrick S. Mullin (chair), Ross W. Manire, Donald L. Mennel, Jacqueline F. Woods
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Fees
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2016
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2015
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FD Executive/LongTerm Compensation Consulting
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$
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22,818
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$
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48,676
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FD Fees for other consulting and actuarial services (1)
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492,603
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626,712
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SB Executive Compensation Fees
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149,099
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121,896
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Total
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$
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664,520
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$
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797,284
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(1)
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Services include consulting, communications, and technical support of the Company’s health and welfare and retirement plans. In 2015, $188,221 was charged directly to the pension trust.
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(a)
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One Year Income Incentives
. The Company’s annual cash compensation program for management (MPP) is generally based on one year of income performance as defined by U.S. generally accepted accounting principles, adjusted to remove certain charges, as described in the
2016 Financial Performance Highlights
section below. By measuring only one year of income results, an incentive can be created to maximize short-term, same year profits by making unwise credit decisions which might increase long-term counterparty risk. This incentive is mitigated by the following: (i) the Company caps all short-term incentive compensation at two times the targeted amount for each position; (ii) the Company’s Vice President Finance & Treasurer must establish all credit limits above any material size (varies by business group); (iii) a majority of management employees who participate in MPP also participate in the Company’s long-term equity compensation program, which is coupled with equity retention requirements (which are large in the case of senior officers); and (iv) losses in subsequent years from imprudent credit decisions will reduce compensation in such subsequent years. We adopted a policy commencing 2014 requiring the repayment or “clawback” of excess cash or equity based compensation where the payments were based on the achievement of financial results that were subsequently the subject of a financial restatement from each executive officer of the Company (regardless of the cause of the restatement) and also the group controller of the business unit involved in the restatement. If this policy proves to be incompatible with final rules adopted by the SEC implementing the requirement of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, (and, in turn, implemented by NASDAQ listing rules) we will adjust our policy accordingly.
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(b)
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Performance Share Units
. Company officers receive Performance Share Units (PSUs) that vest based upon service and performance which is measured by three years of cumulative diluted earnings per share on a rolling basis. Starting in 2016, Company officers also receive PSUs that vest based upon relative total shareholder return (rTSR) over a three year period. Absent mitigating controls to monitor equity transactions and manage the Company’s leverage, these awards might otherwise induce actions to be taken to improve Company earnings per share results by creating a riskier balance sheet position by increasing the Company’s leverage or through the use of cash to purchase shares on the open market. The PSU award criteria might also encourage aggressive acquisition strategies, under which the Company might incur imprudent amounts of debt to finance riskier acquisitions in order to increase short-term earnings per share and thereby increase PSU awards. This incentive is mitigated by the following controls: (i) acquisitions of any significance require the approval of the CEO and the Board of Directors; (ii) officers have large equity retention requirements, which would be negatively impacted by transactions with large inherent risk, (iii) the Company’s leverage is managed within set guidelines by the CEO and the CFO, within levels approved by the Board of Directors.
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(c)
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Non-qualified stock options.
From time to time, the Company may award non-qualified stock options (NQSOs) to certain Company officers. NQSOs are awards which grant the rights to acquire a certain number of shares of Company stock at the market price on the date of grant for an established term - typically five or more years. The rights to acquire such shares vest to the recipient according to a schedule defined in the terms of the grant agreement. NQSO's present a long-term incentive to executives with the choice of when to exercise the right to acquire the shares under the terms of the grant agreement. In this respect, NQSOs encourage executives to enter into transactions with long-term risks which may result in short-term gains in stock price at the expense of the Company’s long-term financial performance. The temptation to engage in such transactions is mitigated by the following controls: (i) major transactions which might affect short-term stock price require the approval of both the CEO, as well as the Board, and (ii) our internal criteria for approving major investments utilizes a RAROC (Risk Adjusted Return on Capital) analysis whereby riskier investments require higher reward prospects for approval, making approval more difficult to achieve.
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(d)
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Restricted Share Awards
. Restricted Share Awards (“RSAs”) are shares of Common stock delivered at grant date that vest over a three year period. The main objective of RSAs is to promote retention. To a lesser extent, they also create focus on share price and alignment with shareholders, but the Company does not feel this is significant enough to encourage the taking of undue risk positions.
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Fees
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2016
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2015
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Audit (1)
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$
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3,076,166
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$
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3,173,386
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Audit-related (2)
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—
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56,498
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Tax (3)
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410,400
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31,075
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Other (4)
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260,403
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—
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Total
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$
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3,746,969
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$
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3,260,959
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(1)
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Comprises the audits of the Company’s annual consolidated financial statements and internal controls over financial reporting and reviews of the Company’s quarterly consolidated financial statements, as well as the statutory audit of the Company’s consolidated subsidiary, attest services and consents to SEC filings.
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(2)
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Amounts incurred in 2015 related to an information security and risk management assessment.
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(3)
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Amounts incurred in 2016 and 2015 related to fees for services related to tax consultations and tax planning projects. Excluded from the 2015 amount is $28,395 of tax consultation projects incurred prior to Deloitte's appointment as the Company's independent registered public accounting firm.
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(4)
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Amount incurred in 2016 related to a strategic assessment.
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Amount and Nature of Shares Beneficially Owned
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Name
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Options
(a)
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Common
Shares
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Aggregate
Number Of Shares
Beneficially
Owned
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Percent
of Class
(b)
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Michael J. Anderson, Sr.
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—
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566,541
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(c)
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566,541
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2.0
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%
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Gerard M. Anderson
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—
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331,318
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(d)
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331,318
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1.2
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%
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Valerie M. Blanchett
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—
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7,804
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7,804
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*
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Patrick E. Bowe
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108,333
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57,854
|
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166,187
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*
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Arthur D. DePompei
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—
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14,372
|
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14,372
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*
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John J. Granato
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—
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17,024
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17,024
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*
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Corbett J. Jorgenson
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—
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15,504
|
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15,504
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*
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Catherine M. Kilbane
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—
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24,305
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|
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24,305
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*
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Robert J. King, Jr.
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—
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25,887
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(e)
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25,887
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*
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Ross W. Manire
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—
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12,843
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12,843
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*
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Donald L. Mennel
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—
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67,751
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(f)
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67,751
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*
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Patrick S. Mullin
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—
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7,759
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|
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7,759
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*
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Harold M. Reed
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—
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105,065
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(g)
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105,065
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*
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Rasesh H. Shah
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—
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48,927
|
|
|
(h)
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48,927
|
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|
*
|
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John T. Stout, Jr.
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—
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18,221
|
|
|
(i)
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18,221
|
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|
*
|
|
Jacqueline F. Woods
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—
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15,873
|
|
|
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15,873
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|
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*
|
|
All directors and executive officers as a group (24
persons, including Mr. DePompei and Mr. Reed)
|
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108,333
|
|
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1,686,585
|
|
|
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1,794,918
|
|
|
6.3
|
%
|
(a)
|
Includes options exercisable within 60 days of February 28, 2017.
|
(b)
|
An asterisk denotes percentages less than one percent.
|
(c)
|
Includes 150,138 Common Shares held by Mrs. Carol H. Anderson, Mr. Anderson’s spouse. Mr. Anderson disclaims beneficial ownership of such Common Shares.
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(d)
|
Includes 316,497 Common shares held by trust.
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(e)
|
Includes 18,970 Common shares held by trust.
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(f)
|
Includes 1,237 Common shares held by Mrs. Louise Mennel, Mr. Mennel's spouse. Mr. Mennel disclaims beneficial ownership of such Common shares. Also includes 35,655 Common shares held by trust.
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(g)
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Includes 55,563 Common shares held by trust.
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(h)
|
Includes 648 Common shares held by trust.
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(i)
|
Includes 4,219 Common shares held by trust.
|
Title of Class
|
|
Name and Address of Beneficial Owner
|
|
Amount and Nature of
Common Shares Beneficially Owned
|
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Percent of Class as of
December 31, 2016
|
||
Common Shares
|
|
The Vanguard Group, Inc. (a)
100 Vanguard Boulevard
Malvern, PA 19355
|
|
2,475,433
|
|
|
8.77
|
%
|
Common Shares
|
|
Blackrock, Inc. (b)
55 East 52
nd
Street
New York, NY 10055
|
|
3,089,438
|
|
|
11.00
|
%
|
Common Shares
|
|
Dimensional Fund Advisors LP (c)
Building One
6300 Bee Cave Road
Austin, TX 78746
|
|
2,111,448
|
|
|
7.49
|
%
|
Common Shares
|
|
Victory Capital Management, Inc. (d)
4900 Tiedeman Rd., 4th Floor
Brooklyn, OH 44144
|
|
1,882,110
|
|
|
6.67
|
%
|
(a)
|
Based upon information set forth in the Schedule 13G filed on February 9, 2017 by The Vanguard Group, Inc. The Vanguard Group, Inc. is an investment adviser and holding company with the sole power to vote 32,125 Common Shares and sole dispositive power over 2,440,658 Common Shares. Vanguard Fiduciary Trust Company (“VFTC”) is a wholly owned subsidiary of The Vanguard Group, Inc. and an investment manager of collective trust accounts with the sole power to vote and dispose of 30,675 Common Shares. Vanguard Investments Australia, Ltd. ("VIA") is a wholly owned subsidiary of The Vanguard Group, Inc. and an investment manager of Australian investment offerings with the sole power to vote and dispose of 5,550 Common Shares.
|
(b)
|
Based upon information set forth in the Schedule 13G filed on January 12, 2017 by Blackrock, Inc. Blackrock, Inc. is a holding company or control person with the sole power to vote 3,024,819 Common Shares and sole dispositive power over 3,089,438 Common Shares.
|
(c)
|
Based upon information set forth in the Schedule 13G filed on February 9, 2017 by Dimensional Fund Advisors LP. Dimensional Fund Advisors LP is an investment adviser with the sole power to vote 2,053,088 Common Shares and sole dispositive power over 2,111,448 Common Shares.
|
(d)
|
Based upon information set forth in the Schedule 13G filed on February 10, 2017 by Victory Capital Management, Inc. Victory Capital Management, Inc. is an investment adviser with the sole power to vote 1,830,510 Common Shares and sole dispositive power over 1,882,110 Common Shares.
|
Officers
|
Title as of December 31, 2016
|
Patrick E. Bowe
|
Chief Executive Officer
|
John J. Granato
|
Chief Financial Officer
|
Corbett J. Jorgenson
|
President, Grain Group
|
Valerie M. Blanchett
|
Vice President, Human Resources
|
Rasesh H. Shah
|
President, Rail Group
|
Harold M. Reed
|
Former Chief Operating Officer
|
Arthur D. DePompei
|
Former Vice President, Human Resources
|
•
|
Compensation should reflect a balanced mix of short-term and long-term components.
|
•
|
Short-term cash compensation (which is both base pay and bonuses) should be based on annual Company, business unit and individual performance.
|
•
|
Long-term equity compensation should encourage achievement of the Company’s long-term performance goals and align the interests of executives with shareholders.
|
•
|
Executives should build and maintain appropriate levels of Company stock ownership so their interests continue to be aligned with the Company’s shareholders.
|
•
|
Compensation levels should be sufficient to attract and retain highly qualified employees.
|
•
|
Compensation should reflect individual performance and responsibilities.
|
Base Salary
|
A base salary is established for each position, based upon extensive benchmarking and an understanding of each individual’s responsibilities and experience.
|
|
Short-Term Incentive Compensation
|
An annual cash bonus. Most of the bonus is determined by a formula based on pre-tax income of both the executive’s individual business group, and the Company as a whole. A smaller amount is awarded at the discretion of the CEO based on individual contributions. The pool available for the CEO’s discretionary awards is determined by a formula also based on pre-tax income.
|
|
Long-Term Incentive Compensation:
|
|
|
|
Restricted Share Awards ("RSAs")
|
Grants of common stock subject to vesting over a multi-year period. In 2016, fifty percent (50%) of the annual equity grant was in the form of RSAs.
|
|
Performance Share Units ("PSUs")
|
Units convertible to common stock upon performance criteria being met over a multi-year period. Performance criteria for vesting PSUs is based upon: 1) cumulative EPS and 2) relative Total Shareholder Return (rTSR). For awards made in 2016, one-half (50%) of PSUs will vest based on cumulative EPS criteria and one-half (50%) will vest based on rTSR over the 2016-2018 performance period.
|
•
|
Net income of $11.6 million for 2016 or $0.41 per diluted share
(1)
|
•
|
Rail Group led the way with $32.4 million of pre-tax income for the year
|
•
|
Ethanol Group delivered $24.7 million of pretax income
|
•
|
Grain Group continued its rebound with pretax income of $12.9 million in the quarter after a good harvest in the Eastern Corn Belt, but lost $15.7 million for the year
|
•
|
Plant Nutrient Group ended the year higher, with pretax income of $14.2 million including charges related to shutting down a cob facility
|
•
|
Retail Group recorded a pretax $6.5 million asset impairment charge after the Company announced its intent to exit the business, driving a full-year pretax loss of $8.8 million
|
•
|
None of our NEOs received a payout as part of his or her annual cash bonus based on company performance. The President, Rail Group received a payout based on his individual and segment-specific performance.
|
•
|
The PSUs granted in 2014 were based on our 3-year cumulative EPS performance. No executive received a payout on these awards as our actual 3-year cumulative EPS ($5.46) fell below the threshold set for these awards ($9.41)
|
CEO Total Target Direct Compensation
|
|
|
Base salary:
Target Annual Bonus:
Total Target Annual Cash Compensation:
Target Long Term Incentive Compensation:
Total Target Direct Compensation:
|
$900,000
$900,000 (100% of base) salary
$1,800,000
$2,000,000
$3,800,000
|
•
|
Stock Ownership Guidelines
- We have established stock ownership guidelines for our executive officers with target shareholding levels expressed as multiples of base salary to further align the interests of our executives with those of our shareholders.
|
•
|
Share Retention Requirement
- Company officers are required to retain at least 75% of the net shares acquired through incentive awards until their target shareholding level is achieved, thereafter, they are required to retain 25% of the future net shares which they acquire until two times their established target shareholding level is achieved.
|
•
|
Recoupment Policy
- We have adopted a policy commencing 2014 requiring the repayment or “clawback” of excess cash or equity based compensation from each executive officer of the Company (and also the group controller of the relevant business unit) where the payments were based on the achievement of financial results that were subsequently the subject of a financial restatement (regardless of involvement in the cause of the restatement).
|
•
|
Double-Trigger Vesting
- Our 2014 Long-term Incentive Compensation Plan does not provide for the automatic acceleration of equity awards upon a Change in Control without a qualifying termination of employment, and it is the intention of the committee to require such double-trigger vesting on all future equity awards.
|
•
|
No Stock Option Re-Pricing
- The 2014 Plan does not permit us to reprice stock options without shareholder approval or to grant stock options with an exercise price below fair market value.
|
•
|
No Excise Tax Gross-Ups
- The Company does not provide tax gross-ups for excise taxes that may be imposed under IRC Section 4999 following a change-in-control or on executive benefits and perquisites during normal employment.
|
•
|
Annual Say on Pay Vote
- We value the input of our shareholders and include a non-binding vote on our executive compensation policies and practices annually.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Element
|
|
Description
|
|
Objective
|
|
Delivery
|
Total Direct Compensation
|
|
Total Cash Compensation
|
|
Base Salary
|
|
Generally targeted at around the median of market benchmarks.
|
|
Payment for day to day performance of job accountabilities. A market-based range allows for variation based on skills, experience, and performance.
|
|
Cash
|
|
|
|
|
Short-term Incentive Compensation – Management Performance Program
|
|
Annual incentive bonus opportunity calculated as percentage of base salary. Total incentive is based primarily upon the formula as described in
Bonus, Performance Targets & Thresholds
below. A discretionary award may also be awarded by the CEO. At Target performance in 2016, pool of funds available for discretionary awards is 30% of the total incentive bonus pool. Maximum formula-based payment, regardless of performance, is 2 times the Targeted cash bonus.
|
|
Incentive for annual pre-tax income performance plus other non-financial objectives. Allocation of discretionary pool based on assessment of overall individual performance and achievement of individual objectives.
|
|
Cash
|
|
|
Long-term Incentive (LTI) Compensation
|
|
Performance Share Units (PSUs)
|
|
Grant amount based on half of the NEO’s total LTI target pool. Vesting of PSUs granted in 2016 is based upon achievement of: 1) targeted cumulative diluted Earnings Per Share (EPS) over the 3 year performance period, and 2) relative Total Shareholder Return (rTSR) over the 3 year performance period. 50% of PSUs are allocated to cumulative EPS and the remaining 50% to rTSR.
|
|
Taken together, the two measures used for vesting PSUs reward an effective balance between consistent year-over- year earnings and shareholder return expectations.
Addition of rTSR strengthens the link between share price growth and long-term compensation.
|
|
Conversion of units to common shares (if earned) at end of 3-year performance period and are then subject to Ownership & Retention Policy.
|
|
|
|
|
Restricted Stock Awards (RSAs)
|
|
Grant amount based on half of the NEO's total LTI target pool.
|
|
Promotes retention due to the multi-year vesting period. Also creates focus on share price and alignment with shareholders.
|
|
Delivery of restricted shares at grant date. Shares fully vest after three years and are then subject to Ownership & Retention Policy.
|
|
|
YE 2016 Base Salary
|
|
YE 2015
Base Salary
|
|
% Change in Base
Salary
|
2016 Actual Base Earnings
|
|||||||
Patrick E. Bowe
|
|
$
|
900,000
|
|
|
$
|
900,000
|
|
|
—
|
%
|
$
|
900,000
|
|
John J. Granato
|
|
420,000
|
|
|
360,000
|
|
|
16.7
|
%
|
403,846
|
|
|||
Corbett J. Jorgenson
|
|
325,000
|
|
|
—
|
|
|
—
|
%
|
287,500
|
|
|||
Valerie M. Blanchett
|
|
275,000
|
|
|
—
|
|
|
—
|
%
|
232,692
|
|
|||
Rasesh H. Shah
|
|
350,000
|
|
|
343,000
|
|
|
2.0
|
%
|
334,923
|
|
|
|
MPP
|
||||||||||||||||||
2016
|
|
2015
|
||||||||||||||||||
Payout
|
|
Target
|
% of
Target
|
|
Payout
|
|
Target
|
% of
Target
|
||||||||||||
Patrick E. Bowe
|
|
$
|
110,000
|
|
|
$
|
900,000
|
|
12
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
—
|
%
|
John J. Granato
|
|
46,000
|
|
|
336,000
|
|
14
|
%
|
|
120,000
|
|
|
290,400
|
|
41
|
%
|
||||
Corbett J. Jorgenson
|
|
40,000
|
|
|
243,750
|
|
16
|
%
|
|
—
|
|
|
—
|
|
—
|
%
|
||||
Valerie M. Blanchett
|
|
30,000
|
|
|
192,500
|
|
16
|
%
|
|
—
|
|
|
—
|
|
—
|
%
|
||||
Rasesh H. Shah
|
|
182,000
|
|
|
262,500
|
|
69
|
%
|
|
400,000
|
|
|
219,100
|
|
183
|
%
|
Cumulative Diluted Earnings Per Share
|
|
Threshold
|
|
Target (1)
|
|
Maximum (2)
|
|
Actual
|
|
Percent of Target Achieved
|
||||||||
3 years ended 2016
|
|
$
|
9.41
|
|
|
$
|
10.82
|
|
|
$
|
11.47
|
|
|
$
|
5.46
|
|
|
0%
|
9 quarters ended 2015 (3)
|
|
$
|
7.01
|
|
|
$
|
7.87
|
|
|
$
|
8.67
|
|
|
$
|
6.13
|
|
|
0%
|
3 years ended 2014
|
|
$
|
8.53
|
|
|
$
|
9.43
|
|
|
$
|
9.83
|
|
|
$
|
9.60
|
|
|
142%
|
Cumulative Diluted Earnings Per Share
|
|
Threshold
|
|
Target (1)
|
|
Maximum (2)
|
3 years ended 2018
|
|
$6.74
|
|
$8.77
|
|
$9.64
|
3 years ended 2017
|
|
$9.59
|
|
$10.55
|
|
$11.61
|
(1)
|
Level at which 100% of target LTC based on cumulative EPS is achieved.
|
(2)
|
Level at which 200% of target LTC based on cumulative EPS is achieved.
|
(3)
|
The 2013 PSU grant was delayed for seven months in anticipation of a challenging earnings year for the Company. As a result, the PSUs granted in 2013 were earned over a nine quarter period based on cumulative EPS performance measured against threshold and target growth goals for the performance period.
|
•
|
Create direct alignment between equity-based awards and shareholder return performance relative to the market
|
•
|
Strengthen the link between share price growth and long-term compensation
|
•
|
Create an effective combination of performance measures that taken together provide an effective balance between earnings and shareholder return expectation
|
|
|
LTC
|
|
LTC
|
||||||||||||
|
|
2016
maximum
|
|
2016
target
|
|
2015
maximum
|
|
2015
target
|
||||||||
Patrick E. Bowe
|
|
$
|
3,000,000
|
|
|
$
|
2,000,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
John J. Granato
|
|
535,500
|
|
|
357,000
|
|
|
462,825
|
|
|
308,550
|
|
||||
Corbett J. Jorgenson
|
|
292,500
|
|
|
195,000
|
|
|
—
|
|
|
—
|
|
||||
Valerie M. Blanchett
|
|
206,250
|
|
|
137,500
|
|
|
—
|
|
|
—
|
|
||||
Rasesh H. Shah
|
|
315,000
|
|
|
210,000
|
|
|
258,225
|
|
|
172,150
|
|
Position
|
Multiple of Pay
|
CEO
|
6 x Salary
|
CFO
|
4 x Salary
|
Group Presidents & Other Corporate Officers
|
3 x Salary
|
•
|
Supplemental Retirement Plan (SRP)—originally designed to work in conjunction with the qualified Defined Benefit Pension Plan (DBPP) to restore benefits to employees that would otherwise be lost due to statutory limitations applied to the DBPP. Benefits under both the SRP and DBPP were frozen effective July 1, 2010. The accrued benefits of the DBPP were subsequently distributed in 2015 as part of the plan's termination. The SRP, a non-qualified plan, remains a frozen benefit since termination and distribution of benefits would create a significant tax burden for participants. Patrick E. Bowe, John J. Granato, Corbett J. Jorgenson and Valerie M. Blanchett did not accrue benefits under the SRP.
|
•
|
Retirement Savings Investment Plan (401(k))—promotes employee savings for retirement, with Company matching on a portion of the savings and non-elective contributions for non-retail participants. At the time of the DBPP freeze in 2010, the Company began making an additional non-elective transition contribution, calculated from a combination of age and years of service of eligible DBPP participants, which results in a transition contribution equal to 4% of wages for Rasesh H. Shah. The remaining NEO's were not eligible for the DBPP, but are eligible for a performance-based contribution of up to 5%. Other NEOs are eligible to receive an additional 1% based on company performance for a total of 5% when combined with their transition contribution.
|
•
|
Deferred Compensation Plan (DCP)—works in conjunction with the 401(k) to provide additional elective deferral opportunities to key employees that would otherwise be limited due to statutory rules.
|
|
2016
|
|
2017
|
Target Pre-Tax Income (100% Payout)
|
ROPA-based Formula
|
|
Annual Business Plan
|
|
|
|
|
Threshold Pre-Tax Income
|
60% of Target Income
|
|
50% of Target Income
|
|
|
|
|
Threshold Payout
|
40% of Target Payout
|
|
30% of Target Payout
|
|
|
|
|
Maximum Pre-Tax Income
|
135% of Target Income
|
|
171% of Target Income
(straight line from Threshold)
|
|
|
|
|
Maximum Payout
|
200% of Target Payout
|
|
200% of Target Payout
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
Name and Position (1)
|
|
Year
|
|
Salary ($)(2)
|
|
Bonus ($)(3)
|
|
Stock Awards ($)(4)
|
|
Option Awards ($)(5)
|
|
Non-Equity Incentive Plan Compensation ($)(6)
|
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(7)
|
|
All Other Compensation ($)(8)
|
|
Total ($)
|
Patrick E. Bowe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer
|
|
2016
2015
2014
|
|
900,000
121,154
—
|
|
—
—
—
|
|
2,033,783
1,001,710
—
|
|
—
3,370,250
—
|
|
110,000
—
—
|
|
—
—
—
|
|
872,547
1,871,419
—
|
|
3,916,330
6,364,533
—
|
John J. Granato
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer
|
|
2016
2015
2014
|
|
403,846
354,885
334,729
|
|
—
—
—
|
|
363,027
302,488
219,360
|
|
—
—
—
|
|
46,000
120,000
375,000
|
|
—
—
—
|
|
24.310
46,843
43,058
|
|
837,183
824,216
972,147
|
Corbett J. Jorgenson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, Grain Group
|
|
2016
2015
2014
|
|
287,500
—
—
|
|
—
—
—
|
|
609,177
—
—
|
|
—
—
—
|
|
40,000
—
—
|
|
—
—
—
|
|
390,851
—
—
|
|
1,327,528
—
—
|
Valerie M. Blanchett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President, Human Resources
|
|
2016
2015
2014
|
|
232,692
—
—
|
|
—
—
—
|
|
326,594
—
—
|
|
—
—
—
|
|
30,000
—
—
|
|
—
—
—
|
|
54,527
—
—
|
|
643,813
—
—
|
Rasesh H. Shah
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, Rail Group
|
|
2016
2015
2014
|
|
334,923
338,962
326,149
|
|
—
—
—
|
|
213,547
168,745
161,778
|
|
3,284
2,366
1,954
|
|
182,000
400,000
255,000
|
|
44,466
14,179
444,765
|
|
13,041
28,795
40,214
|
|
791,261
953,047
1,229,860
|
Harold M. Reed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Chief Operating Officer
|
|
2016
2015
2014
|
|
357,877
435,039
422,883
|
|
—
—
—
|
|
—
450,912
427,752
|
|
—
1,559
884
|
|
391,000
133,000
525,000
|
|
(440,017)
3,673
460,734
|
|
473,694
54,431
62,356
|
|
782,554
1,078,614
1,899,609
|
Arthur D. DePompei
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Vice President, Human Resources
|
|
2016
2015
2014
|
|
97,269
276,962
263,040
|
|
—
—
—
|
|
—
155,317
120,648
|
|
—
—
—
|
|
201,600
70,000
265,000
|
|
(4,109)
(2,155)
12,217
|
|
353,288
27,504
29,679
|
|
648,048
527,628
690,584
|
(1)
|
NEOs include the CEO and CFO who certify the quarterly and annual reports we file with the SEC. The remaining NEOs are the three next highest paid executive officers. Additionally, for 2016 there are two additional NEO's who were no longer executive officers at December 31, 2016, but would have been in the top five most highly compensated had they been officers at year-end.
|
(2)
|
Salary for Harold M. Reed and Rasesh H. Shah include voluntary deductions for the Company’s qualified Section 423 employee share purchase plan (“ESPP”) which is available to all employees. Amounts withheld for Mr. Reed for 2016, 2015 and 2014 were $0, $9,675 and $9,985, respectively. Amounts withheld for Mr. Shah for 2016, 2015 and 2014 were $24,000, $14,467 and $22,947, respectively.
|
(3)
|
Annual bonus is delivered through a formula-based incentive compensation program and included in column (g).
|
(4)
|
Represents the grant date fair value of PSUs granted March 1, 2014, March 2, 2015 and March 1, 2016 and RSAs granted March 1, 2014, March 2, 2015, November 2, 2015, March 1, 2016 and April 6, 2016, computed in accordance with the assumptions as noted in Note 16 to the Company’s audited financial statements included in Form 10-K, Item 8. At each grant date, we expected to issue the target award under the PSU grants which is equal to 50% of the maximum award.
|
(5)
|
Represents the fair value of non-qualified stock options granted November 2, 2015, as well as the fair value of the option component in the ESPP. The grant date fair values of the non-qualified stock options and the ESPP option are computed in accordance with the assumptions as noted in Note 16 to the Company’s audited financial statements included in the 2016 Form 10-K, Item 8.
|
(6)
|
Represents the annual Management Performance Program payout earned for each NEO as previously described. Approximately 70% of the award is based on specific results of the NEO’s formula program with the remainder of the award representing a portion of the Company “discretionary” pool which is also created through a formula. Overall awards (individual formula plus awards from the discretionary pool) are approved by the Compensation and Leadership Development Committee.
|
(7)
|
Represents the annual change in the NEO’s accumulated benefit obligation. Defined benefit plans included the Defined Benefit Pension Plan and Supplemental Retirement Plan in 2014 and 2015. Only the Supplemental Retirement Plan is included in 2016, as the Defined Benefit Pension Plan was terminated in 2015. See Note 7 to the Company’s audited financial statements included in Form 10-K, Item 8 for information about assumptions used in the computation of the defined benefit plans. The deferred compensation plan is a voluntary plan allowing for deferral of compensation for officers and highly compensated employees in excess of the limits imposed by the Internal Revenue Service under the Company’s 401(k) plan. Earnings on the deferred compensation are based on actual earnings on mutual funds held in a Rabbi trust owned by the Company and do not include any above market returns.
|
(8)
|
Represents the Company-match, performance contribution and transition benefit contributed to defined contribution plans (401(k) and Deferred Compensation Plan) on behalf of the named executive, life insurance premiums paid by the Company for each of the named executives, the cost of required executive physicals paid by the Company, service awards, the optional cash payout of vacation not taken and restricted share dividends. The transition benefit commenced at July 1, 2010 for non-retail employees concurrent with the freeze of the defined benefit pension plan. Amounts for Patrick E. Bowe, Corbett J. Jorgenson and Valerie M. Blanchett also include reimbursement of moving and relocation expenses, as discussed above. Amounts for Harold M. Reed and Arthur D. DePompei also include severance pay, as discussed in the
Termination / Change in Control Payments section
below.
|
(a)
|
|
(b)
|
|
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
(k)
|
|
(l)
|
|||||||||||
Name
|
|
Grant
Date
|
|
Date of
Board
Action
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards (1)
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
|
|
All
Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)(3)
|
|
All Other
Option
Awards:
Number
of
Securities
Under-
lying
Options
(#)
|
|
Exercise
or Base
Price of
Option
Awards
($)
|
|
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)
|
|||||||||||||||||||
Thres-hold ($)
|
|
Target
($)
|
|
Maxi-mum ($)
|
|
Thres-
hold (#)
|
|
Target
(#)
|
|
Maxi-
mum
(#)
|
|
||||||||||||||||||||||||
Patrick E. Bowe
|
|
3/1/16
11/2/16
|
|
2/25/16
8/28/15
|
|
360,000
|
|
|
900,000
|
|
|
1,800,000
|
|
|
7,460
|
|
|
37,300
|
|
|
74,600
|
|
|
37,300
149
|
|
|
—
|
|
|
$
|
—
|
|
|
$1,027,242
5,833
|
|
John J. Granato
|
|
1/5/16
3/1/16
|
|
2/26/15
2/25/16
|
|
134,400
|
|
|
336,000
|
|
|
672,000
|
|
|
1,332
|
|
|
6,658
|
|
|
13,316
|
|
|
21
6,658
|
|
|
—
|
|
|
—
|
|
|
648
183,361
|
|
|
Corbett J. Jorgenson
|
|
3/1/16
|
|
2/25/16
|
|
97,500
|
|
|
243,750
|
|
|
487,500
|
|
|
727
|
|
|
3,636
|
|
|
7,272
|
|
|
18,557
|
|
|
—
|
|
|
—
|
|
|
511,060
|
|
|
Valerie M. Blanchett
|
|
3/1/16
4/6/16
|
|
2/25/16
1/11/16
|
|
77,000
|
|
|
192,500
|
|
|
385,000
|
|
|
513
|
|
|
2,564
|
|
|
5,128
|
|
|
8,160
1,090
|
|
|
—
|
|
|
—
|
|
|
224,726
32,678
|
|
|
Rasesh H. Shah
|
|
1/5/16
3/1/16
|
|
2/26/15
2/25/16
|
|
105,000
|
|
|
262,500
|
|
|
525,000
|
|
|
783
|
|
|
3,916
|
|
|
7,832
|
|
|
11
3,917
|
|
|
—
—
|
|
|
—
—
|
|
|
361
107,874
|
|
|
Harold M. Reed
|
|
1/5/16
|
|
2/26/15
|
|
156,400
|
|
|
391,000
|
|
|
782,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
965
|
|
|
Arthur D. DePompei
|
|
1/5/16
|
|
2/26/15
|
|
80,640
|
|
|
201,600
|
|
|
403,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
332
|
|
(1)
|
Amounts listed for the non-equity incentive compensation plan represent the individual formula maximum, target and threshold under the MPP. The program also provides for an additional amount of 30% of the overall pool which is subject to and funded by Company earnings. This discretionary pool is available for award to all plan participants.
|
(2)
|
Equity awards are EPS-based PSUs which will be awarded based on the three year cumulative diluted EPS for the years ended December 31, 2018 and rTSR-based PSUs which will be awarded based on the relative shareholder return performance for the years ended December 31, 2018. These awards require employment at the end of the performance period except in the case of death, permanent disability, retirement or termination without cause as a result of a sale of the business unit. If an employee meets one of these exceptions and if the award triggers at the end of three years, the grantee will receive a pro rata award. At the end of the performance period, the appropriate number of shares will be issued along with additional shares representing equivalent dividends paid to shareholders during the period. At this time, the Company does not expect the outstanding EPS-based awards to meet the threshold level for issuance.
|
(3)
|
RSA’s granted March 1, 2016 and April 6, 2016 have grant date fair values of $27.54 and $29.98 per share, respectively, which represent the closing prices on the issuance dates. Grants also include dividend equivalents on the 2015 RSA grant, of which the first tranche vested as of January 1, 2016. Cumulative dividends from the 2015 grant date through the date of issuance were $0.575, which was multiplied by the shares issued and converted to shares at the December 31, 2015 closing price of $31.63.
|
(a)
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
||||||||||||||
|
Option Awards
|
|
Stock Awards
|
||||||||||||||||||||||||||||
Name
|
Number of securities underlying unexercised options (#) exercisable
|
|
Number of securities underlying unexercised options (#) unexercisable (1)
|
|
Equity incentive plan awards: number of securities underlying unexercised unearned options (#)
|
|
Option exercise price ($)
|
|
Option expiration date
|
|
Number
of shares
or units
of stock
that have
not
vested
|
|
Market
value of
shares or
units of
stock that
have not
vested
($)(2)
|
|
Equity incentive
plan awards: number of unearned shares, units or other rights that have not vested (#)(3)
|
|
Equity incentive
plan awards: market or
payout value of unearned shares, units or other rights that have not vested ($)(3)
|
||||||||||||||
Patrick E. Bowe
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
74,600
|
|
|
$
|
3,334,620
|
|
|||
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,833
|
|
|
$
|
841,835
|
|
|
—
|
|
|
$
|
—
|
|
||||
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,300
|
|
|
$
|
1,667,310
|
|
|
—
|
|
|
$
|
—
|
|
||||
108,333
|
|
|
216,667
|
|
|
—
|
|
|
35.40
|
|
|
11/2/22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|||||
John J. Granato
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,000
|
|
|
$
|
178,800
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
6,758
|
|
|
$
|
302,083
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
13,316
|
|
|
$
|
595,225
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
3,126
|
|
|
$
|
139,732
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
666
|
|
|
$
|
29,770
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2,252
|
|
|
$
|
100,664
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
6,658
|
|
|
$
|
297,613
|
|
|
—
|
|
|
$
|
—
|
|
|
Corbett J. Jorgenson
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
7,272
|
|
|
$
|
325,058
|
|
|||
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,557
|
|
|
$
|
829,498
|
|
|
—
|
|
|
$
|
—
|
|
||||
Valerie M. Blanchett
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
5,128
|
|
|
$
|
229,222
|
|
|||
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,160
|
|
|
$
|
364,752
|
|
|
—
|
|
|
$
|
—
|
|
||||
Rasesh H. Shah
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
2,950
|
|
|
$
|
131,865
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
3,770
|
|
|
$
|
168,519
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
7,832
|
|
|
$
|
350,090
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
491
|
|
|
$
|
21,948
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1,256
|
|
|
$
|
56,143
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
3,917
|
|
|
$
|
175,090
|
|
|
—
|
|
|
$
|
—
|
|
|
Harold M. Reed
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
6,716
|
|
|
$
|
300,205
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
5,320
|
|
|
$
|
237,804
|
|
|
Arthur D. DePompei
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
1,712
|
|
|
$
|
76,526
|
|
|||
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
1,540
|
|
|
$
|
68,838
|
|
(1)
|
Unvested options with an expiration date of November 2, 2022 will be fully vested on November 2, 2018.
|
(2)
|
Represents the market value of outstanding restricted shares at December 31, 2016 closing price of $44.70.
|
(3)
|
Equity incentive plan awards that have not vested represent PSUs as described previously. These amounts represent the maximum award for each tranche with performance periods ending December 31, 2016, December 31, 2017 and December 31, 2018, respectively. The market value for these grants is based on a December 31, 2016 closing price of $44.70. Currently the Company does not expect above threshold performance for the performance periods for which EPS-based PSUs were outstanding at December 31, 2016.
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
||||||
|
|
Option Awards
|
|
Stock Awards
|
||||||||||
Name
|
|
Number of Shares Acquired on Exercise (#) (1)
|
|
Value Realized on Exercise ($)
|
|
Number of Shares Acquired on Vesting (#)
|
|
Value Realized
on Vesting ($)
|
||||||
Patrick E. Bowe
|
|
—
|
|
|
$
|
—
|
|
|
9,565
|
|
|
$
|
374,470
|
|
John J. Granato
|
|
—
|
|
|
—
|
|
|
2,369
|
|
|
74,916
|
|
||
Corbett J. Jorgenson
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Valerie M. Blanchett
|
|
—
|
|
|
—
|
|
|
1,090
|
|
|
32,678
|
|
||
Rasesh H. Shah
|
|
—
|
|
|
—
|
|
|
1,667
|
|
|
52,740
|
|
||
Harold M. Reed
|
|
—
|
|
|
—
|
|
|
9,245
|
|
|
317,313
|
|
||
Arthur D. DePompei
|
|
—
|
|
|
—
|
|
|
2,784
|
|
|
90,903
|
|
Overhang
|
|
Four-Year Historical Average (2012-2016)
|
6.23%
|
Burn Rate
|
|
Four-Year Historical Average (2012-2016)
|
1.17%
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|||
Name
|
|
Plan Name
|
|
Number of
years credited
service (#)(1)
|
|
Present value
of accumulated
benefit ($)(2)
|
|
Payments
during last
fiscal year ($)
|
|||
Rasesh H. Shah
|
|
SRP
|
|
26
|
|
|
1,491,770
|
|
|
—
|
|
Harold M. Reed
|
|
SRP
|
|
27
|
|
|
1,024,139
|
|
|
—
|
|
Arthur D. DePompei
|
|
SRP
|
|
3
|
|
|
—
|
|
|
3,095
|
|
(1)
|
Plans were instituted in 1984 for non-partners of the predecessor partnership of the Company. Former partners entered the plan in 1988. All individuals listed have years of Company service in excess of the listed years of credited service. Credited service is the number of years in which 1,000 hours of service are earned subsequent to plan entry date.
|
(2)
|
Present value of accumulated benefits calculated by discounting the December 31, 2016 accumulated benefit payable at normal retirement age under the normal annuity form. This discounting uses a discount rate of 2.4% for the SRP.
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
||||||||||
Name
|
|
Executive
contribution
in last FY ($)
|
|
Registrant
contributions
in last FY ($)
(1)
|
|
Aggregate
earnings in
last FY ($)
(1)
|
|
Aggregate
withdrawals /
distributions
($)
|
|
Aggregate
balance at
last FYE ($)
|
||||||||||
Patrick E. Bowe
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
John J. Granato
|
|
18,400
|
|
|
16,395
|
|
|
7,030
|
|
|
—
|
|
|
82,976
|
|
|||||
Corbett J. Jorgenson (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Valerie M. Blanchett (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Rasesh H. Shah
|
|
154,196
|
|
|
9,881
|
|
|
155,575
|
|
|
—
|
|
|
2,114,196
|
|
|||||
Harold M. Reed
|
|
—
|
|
|
(5,691
|
)
|
|
(1,193
|
)
|
|
(3,018
|
)
|
|
228,778
|
|
|||||
Arthur D. DePompei
|
|
—
|
|
|
(3,038
|
)
|
|
1,850
|
|
|
(105,578
|
)
|
|
—
|
|
(1)
|
The registrant contributions above are included in the Summary Compensation Table as part of “All Other Compensation.” As the investments are made in mutual funds, none of the earnings are above-market and are therefore not included in the Summary Compensation Table.
|
(2)
|
Corbett J. Jorgenson and Valerie M. Blanchett did not become eligible for the DCP until January 1, 2017.
|
Name
|
|
Severance
(1)
|
|
Bonus
(2)
|
|
Health
(3)
|
|
Outplacement Services
(4)
|
|
Additional Severance for Change in Control
(5)
|
|
Cash value
|
|
Cash value if Change in Control
|
||||||||||||||
Patrick E. Bowe
(6)
|
|
$
|
1,800,000
|
|
|
$
|
1,800,000
|
|
|
$
|
22,137
|
|
|
$
|
18,000
|
|
|
$
|
1,800,000
|
|
|
$
|
3,640,137
|
|
|
$
|
5,440,137
|
|
John J. Granato
|
|
420,000
|
|
|
336,000
|
|
|
22,137
|
|
|
18,000
|
|
|
1,092,000
|
|
|
796,137
|
|
|
1,888,137
|
|
|||||||
Corbett J. Jorgenson
|
|
325,000
|
|
|
243,750
|
|
|
12,200
|
|
|
18,000
|
|
|
812,500
|
|
|
598,950
|
|
|
1,411,450
|
|
|||||||
Valerie M. Blanchett
|
|
275,000
|
|
|
192,500
|
|
|
4,029
|
|
|
18,000
|
|
|
660,000
|
|
|
489,529
|
|
|
1,149,529
|
|
|||||||
Rasesh H. Shah
|
|
350,000
|
|
|
262,500
|
|
|
8,865
|
|
|
18,000
|
|
|
875,000
|
|
|
639,365
|
|
|
1,514,365
|
|
|||||||
Harold M. Reed
(7)
|
|
438,000
|
|
|
391,000
|
|
|
23,969
|
|
|
—
|
|
|
N/A
|
|
|
852,969
|
|
|
N/A
|
|
|||||||
Arthur D. DePompei
(7)
|
|
281,000
|
|
|
201,600
|
|
|
8,865
|
|
|
—
|
|
|
N/A
|
|
|
491,465
|
|
|
N/A
|
|
(1)
|
Severance for other than a change in control is equal to one year’s salary. For Mr. Bowe, this is equal to two years of his current salary.
|
(2)
|
Bonus is equal to target bonus to be paid for 2016 and represents bonus earned prior to termination. If termination were to occur other than at December 31, this amount would be prorated. The amount for Mr. Bowe is equal to two years of target bonus.
|
(3)
|
Value of health benefits to be continued for up to 52 weeks based on years of service. All NEOs qualify for a full year of coverage. NEOs are responsible to continue their share of premium consistent with their coverage prior to termination.
|
(4)
|
Value estimated for one year of service (maximum to be provided).
|
(5)
|
If a termination is due to a change in control, participants are eligible for an additional year of severance plus two additional years of target bonus. Mr. Bowe is eligible to receive an additional year of severance and one additional year of target bonus.
|
(6)
|
Mr. Bowe's severance payments provide for higher payments if a termination occurs within the first 3 years of employment. Thereafter, the terms are the same as other NEO's. See earlier discussion of Mr. Bowe's compensation package.
|
(7)
|
Mr. Reed and Mr. DePompei both terminated prior to December 31, 2016. As a result, the amounts shown here represent their actual payments upon termination.
|
Name
|
Life Insurance Proceeds
|
||
Patrick E. Bowe
|
$
|
750,000
|
|
John J. Granato
|
720,000
|
|
|
Corbett J. Jorgenson
|
650,000
|
|
|
Valerie M. Blanchett
|
550,000
|
|
|
Rasesh H. Shah
|
686,000
|
|
|
Harold M. Reed
|
N/A
|
|
|
Arthur D. DePompei
|
N/A
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
Name
|
|
Fees earned or paid in cash ($)
|
|
|
Stock awards
($)(1)(2)(3)
|
|
|
Total ($)
|
|
Gerard M. Anderson
|
|
64,500
|
|
|
78,071
|
|
|
142,571
|
|
Catherine M. Kilbane
|
|
85,000
|
|
|
78,071
|
|
|
163,071
|
|
Robert J. King, Jr.
|
|
79,500
|
|
|
78,071
|
|
|
157,571
|
|
Ross W. Manire
|
|
72,000
|
|
|
78,071
|
|
|
150,071
|
|
Donald L. Mennel (3)
|
|
45,000
|
|
|
130,590
|
|
|
175,590
|
|
Patrick S. Mullin
|
|
91,500
|
|
|
78,071
|
|
|
169,571
|
|
John T. Stout, Jr. (3)
|
|
42,000
|
|
|
108,085
|
|
|
150,085
|
|
Jacqueline F. Woods
|
|
81,000
|
|
|
78,071
|
|
|
159,071
|
|
(1)
|
RSA’s were granted to all Directors on March 1, 2016 and are valued at $27.54 per share, the closing price on the date of issuance.
|
(2)
|
RSA dividend equivalent shares were granted to all Directors on March 3, 2016 and are valued at $29.57 per share, the closing price on the date of issuance.
|
(3)
|
Directors can make an election to receive common stock in lieu of all or 50% of the retainer fees. All of these shares are fully vested. For purposes of determining the number of shares to be issued in lieu of such fees, the shares are valued at the closing price on the date prior to issuance which was January 29 ($29.31), May 16 ($26.53), July 29 ($36.98) and October 31 ($38.05) for the fees noted above.
|
Name
|
Outstanding Restricted Share Awards (#)
|
|
Gerard M. Anderson
|
2,798
|
|
Catherine M. Kilbane
|
2,798
|
|
Robert J. King, Jr.
|
2,798
|
|
Ross W. Manire
|
2,798
|
|
Donald L. Mennel
|
2,798
|
|
Patrick S. Mullin
|
2,798
|
|
John T. Stout, Jr.
|
2,798
|
|
Jacqueline F. Woods
|
2,798
|
|
|
By order of the Board of Directors
|
|
/s/ Naran U. Burchinow
|
Naran U. Burchinow
Secretary
|
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