Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of New Chief Financial Officer
On June 21, 2023, the Company’s Board of Directors appointed Benjamin M. Burns, age 45, as Executive Vice President and Chief Financial Officer, effective immediately, to fill the position created by the departure of Jeffrey L. Tate from such position, as disclosed below. Mr. Burns will serve at the pleasure of the Board and will function as the Company’s principal financial officer.
Mr. Burns previously served the Company as Executive Vice President—Business Support Services since February 2023. He previously served as Senior Vice President—Business Support Services since 2022, Vice President, Business Support Services from 2019 to 2022, Vice President, Treasurer from 2017 to 2019 and Vice President, Internal Audit/Due Diligence from 2012 to 2017. Mr. Burns served the Company in various other auditing capacities since 2003. Mr. Burns holds a bachelor’s degree in accounting and an MBA from Pittsburg State University. In addition, he is a Certified Public Accountant and a Certified Fraud Examiner.
On June 21, 2023, the Human Resources and Compensation Committee of the Board (the “Committee”) approved the compensation to be awarded to Mr. Burns as CFO as follows:
(i) Mr. Burns’ annual base salary will be increased from $350,000 to $500,000, effective June 26, 2023.
(ii) As an executive officer, Mr. Burns already participates in the Company’s Key Officers Incentive Plan (the “KOIP”). His annual incentive target in the Plan, as a percentage of his base salary (“Target Percentage”), was increased from 50% to 80%. Mr. Burns will participate as a corporate participant under the 2023 Award Formula under the Plan, and his payout will be based on the Company’s achievement of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) (65% relative weight) and Cash Flow (35% relative weight). Mr. Burns’ increased Target Percentage will be prorated for the number of days remaining in the 2023 calendar year performance period following the effective date of his appointment. For a description of the 2023 Key Officers Incentive Plan Award Formula, reference is made to the award formula which is attached as Exhibit 10.1 to the Company’s Form 8-K filed March 10, 2023, and is incorporated herein by reference.
(iii) Mr. Burns’ long-term incentive (“LTI”) award multiple for 2024 was increased from 80% to 200%. The executive’s base salary is multiplied by the LTI award multiple to calculate a target monetary value of annual equity grants which include sixty percent (60%) performance stock units (“PSUs”) and forty percent (40%) restricted stock units (“RSUs”). These awards are anticipated to be approved at the same time as the other executive officers’ LTI awards at the Committee’s February 2024 meeting.
All other components of Mr. Burns’ compensation remained unchanged.
As previously disclosed in the Company’s proxy statement filed March 23, 2023, employees related to Mr. Burns had total compensation (consisting of salary and annual incentive earned in 2022, as well as the grant date fair value of equity awards issued in 2022) in excess of the $120,000 related person transaction threshold. Rebecca Burns, Staff VP—Record to Report Business Processes, the spouse of Mr. Burns, had 2022 total compensation of $180,327; and Ashley Hiatt, Staff VP—Segment Reporting, the sister-in-law of Mr. Burns, had 2022 total compensation of $164,479. Subject to continued employment, it is expected that compensation for Ms. Hiatt will be substantially similar for 2023 and will exceed the $120,000 threshold. The compensation received by Ms. Hiatt is consistent with the amounts paid to other employees in similar roles. Ms. Burns has resigned her position with the Company, effective June 20, 2023, and her compensation for 2023, calculated consistently with the 2022 compensation referenced above, did not exceed the $120,000 related person transaction threshold. There are no family relationships between Mr. Burns and any director or executive officer of the Company. There is no arrangement or understanding between Mr. Burns and any other person pursuant to which Mr. Burns was appointed as Chief Financial Officer of the Company.
Mr. Burns has previously entered into a Severance Benefit Agreement dated February 22, 2023, which is attached hereto as Exhibit 10.2 and incorporated herein by reference. Also, Mr. Burns previously entered into an Indemnification Agreement with the Company, dated February 28, 2022, the form of which was filed as Exhibit 10.11 to the Company’s Form 10-K filed March 28, 2002, and which is incorporated herein by reference.
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