PARK NATIONAL CORPORATION
50 North Third Street
Post Office Box 3500
Newark, Ohio 43058-3500
(740) 349-8451
www.parknationalcorp.com
PROXY STATEMENT
Dated March 11, 20199, 2020
ANNUAL MEETING OF SHAREHOLDERS
To Be Held On April 22, 201927, 2020
GENERAL INFORMATION
We are furnishing thisThis proxy statement and the accompanying proxy card to you as a shareholder of Park National Corporation (“Park”)is furnished in connection with the solicitation of proxies by Park’sthe Board of Directors of Park National Corporation (“Park”) for use at the Annual Meeting of Shareholders (the “Annual Meeting” or the “2019“2020 Annual Meeting”) to be held on Monday, April 22, 2019,27, 2020, at 2:00 p.m., Eastern Daylight Saving Time. The Annual Meeting will be held at the offices of The Park National Bank, 50 North Third Street, Newark, Ohio 43055. This proxy statement summarizes information that you will need in order to vote.
Availability of Proxy Materials
On or about March 11, 2019,9, 2020, we began distributing the Notice of Annual Meeting of Shareholders, this proxy statement, the form of proxy and the accompanying proxy card were first mailed or delivered electronically to the shareholders entitled to vote their common shares at the Annual Meeting. Park’s 2018our 2019 Annual Report, was also mailed or delivered to shareholderstogether with this proxy statement. Audited consolidated financial statements for Park and our subsidiaries as of andAnnual Report on Form 10-K for the fiscal year ended December 31, 20182019 (our “2019 Form 10-K”), to our shareholders and made these proxy materials available over the Internet.
We have distributed proxy materials to some of our shareholders over the Internet by sending them a Notice of Internet Availability of Proxy Materials (the “2018 fiscal year”“Notice of Internet Availability”), are included in Park’s 2018 Annual Report. that explains how to access our proxy materials over the Internet and vote online. Many other companies have transitioned to this more contemporary way of distributing proxy materials for annual meetings of shareholders, often called “electronic proxy” or “Notice and Access.” Generally, those shareholders who received the Notice of Internet Availability will only receive a paper copy of our proxy materials if they request one.
Additional copiesCopies of Park’s 2018 Annual Report and copies of Park’s Annual Report onour 2019 Form 10-K for the 2018 fiscal year may be obtained at www.proxyvote.com or www.parknationalcorp.com. Or youthrough the “Corporate Information – Document Highlights” section of the “Investor Relations” page of our website at www.parknationalcorp.com. You can also obtain a paper copies,copy of our 2019 Form 10-K, without charge, by sending a written request to: Brady T. Burt, Chief Financial Officer, Secretary and Treasurer, Park National Corporation, 51 North Third Street, Post Office Box 3500, Newark, Ohio 43058-3500.
Delivery of Proxy Materials to Multiple Shareholders Sharing the Same Address
Periodically, Park provides each registered holder of common shares at a shared address, not previously notified, with a separate notice of Park’s intention to household proxy materials. The record
holder notifies beneficial shareholdersholders of common shares (those who hold common shares through a broker, a financial institution or another nominee) of the householding process. Only one copy of the Notice of Internet Availability, or only one copy of the Notice of Annual Meeting of Shareholders, this proxy statement the notice of theand our 2019 Annual Meeting and Park’s 2018 Annual Report, together with our 2019 Form 10-K, is being delivered to previously notified multiple registered holders of common shares who share an address, unless Park has received contrary instructions from one or more of the registered holders of common shares. A separate proxy card is being included for each account at the shared address.
Registered holders of common shares who share an address and would like to receive a separate copy of Park’s 2018 Annual Report, a separate noticethe Notice of the Annual Meeting and/Internet Availability or a separate copy of the Notice of Annual Meeting of Shareholders, this proxy statement for theand our 2019 Annual Meeting,Report, together with our 2019 Form 10-K, as applicable, or who have questions regarding the householding process, may contact Park’s transfer agent and registrar, The Park National Bank, c/o First-Knox National Bank Division, by calling (800) 837-5266, ext. 5208, or forwarding a written request addressed to the First-Knox National Bank Division, Attention: Debbie Daniels, P.O. Box 1270, One South Main Street, Mount Vernon, Ohio 43050-1270. Promptly upon request, a separate copy of Park’s 2018 Annual Report, a separate noticethe Notice of the Annual Meeting and/Internet Availability or a separate copy of the Notice of Annual Meeting of Shareholders, this proxy statement for theand our 2019 Annual MeetingReport, together with our 2019 Form 10-K, as applicable, will be sent. By contacting the First-Knox National Bank Division, registered holders of common shares sharing an address can also: (i) notify Park that the registered shareholders wish to receive separate annual reports to shareholders, proxy statements and/or Noticesnotices of Internet Availabilityinternet availability of Proxy Materials,proxy materials, as applicable, in the future; or (ii) request delivery of a single copy of annual reports to shareholders, proxy statements and/or Noticesnotices of Internet Availabilityinternet availability of Proxy Materials,proxy materials, as applicable, in the future if they are receiving multiple copies.
Beneficial holders of common shares should contact their brokers, financial institutions or other nominees for specific information about the householding process as this process applies to their accounts.
VOTING INFORMATION
Who can vote at the Annual Meeting?
Only holders of common shares of record at the close of business on February 27, 201928, 2020, are entitled to receive notice of and to vote at the Annual Meeting. At the close of business on February 27, 2019,28, 2020, there were 15,611,52116,270,436 common shares outstanding and entitled to vote. Other than the common shares, there are no voting securities of Park outstanding.
Each holder of common shares is entitled to one vote for each common share held on February 27, 2019.28, 2020. A shareholder wishing to exercise cumulative voting with respect to the election of directors must notify Brady T. Burt, Chief Financial Officer, Secretary and Treasurer of Park, in writing before 2:00 p.m., Eastern Daylight Saving Time, on April 20, 2019.25, 2020. If cumulative voting is requested and if an announcement of such request is made upon the convening of the Annual Meeting by the chairman or the secretary of the meeting or by or on behalf of the shareholder requesting cumulative voting, you will have votes equal to the number of directors to be elected, multiplied by the number of common shares you own, and will be entitled to distribute your votes among the candidates for election as directors as you see fit.
What is a Notice of Internet Availability?
In accordance with rules adopted by the SEC, instead of mailing a printed copy of our proxy materials to each shareholder of record, we are permitted to furnish our proxy materials, including the Notice of Annual Meeting of Shareholders, this proxy statement, the form of proxy and our 2019 Annual
Report, together with our 2019 Form 10-K, by providing access to such documents over the Internet. Generally, shareholders who receive a Notice of Internet Availability will not receive printed copies of the proxy materials unless they request them.
A Notice of Internet Availability that provides instructions for accessing our proxy materials over the Internet was mailed to some of our shareholders. If you received a Notice of Internet Availability and prefer to receive a paper copy or an e-mail copy of our proxy materials, you must follow the instructions provided in the Notice of Internet Availability for requesting such proxy materials.
The Notice of Internet Availability only identifies the items to be voted on at the Annual Meeting. If you received a Notice of Internet Availability, you cannot vote by marking the Notice of Internet Availability and returning it. The Notice of Internet Availability provides instructions on how to cast your vote.
A notice that directs beneficial owners of our common shares to the website where they can access our proxy materials will be forwarded to some beneficial shareholders by the brokerage firm, bank or other holder of record that is considered the registered owner with respect to the common shares of such beneficial shareholders. Such brokerage firm, bank or other holder of record will also provide these beneficial owners of our common shares with instructions on how the beneficial shareholders may request a paper copy or an e-mail copy of our proxy materials.
What is the difference between holding common shares as a holder of record and as a beneficial owner?
If, at the close of business on February 28, 2020, your common shares were held in an account at a brokerage firm, bank or other similar organization, then you are the beneficial owner of common shares held in “street name.” The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that organization on how to vote the common shares in your account. If that organization is not given specific direction, common shares held in the name of that organization may not be voted and will not be considered as present and entitled to vote on any matter to be considered at the Annual Meeting other than the ratification of the appointment of Park’s independent registered public accounting firm. Please direct your broker how to vote your common shares following the instructions provided by your broker.
How do I vote?
Your common shares may be voted by one of the following methods:
•by traditional paper proxy card;card (if you received or requested paper copies of our proxy materials);
•by submitting voting instructions via the web sitewebsite identified on your Notice of Internet Availability or on your proxy card;card (if you received or requested paper copies of our proxy materials);
•by submitting voting instructions via the web sitewebsite identified in the e-mail sent to you if you registered for electronic delivery of our proxy materials for the Annual Meeting;materials;
•by submitting voting instructions by telephone via the telephone number identified on your Notice of Internet Availability or on your proxy card;card (if you received or requested paper copies of our proxy materials); or
•in person at the Annual Meeting.
Submitting Voting Instructions via the Internet or by Telephone
If you are a shareholder of record (i.e., if your common shares are registered with Park in your own name), you may submit voting instructions via the Internet or by telephone, by following the instructions stated on your Notice of Internet Availability or on your proxy card.card (if you received or requested a paper copy of our proxy materials). If you have registered for electronic delivery of proxy materials for the Annual Meeting, you may submit voting instructions via the Internet by following the instructions stated in the e-mail delivering the proxy materials to you. If your common shares are registered in the name of a broker, a financial institution or another nominee (i.e., you hold your common shares in “street name”), your nominee may be participating in a program that allows you to submit voting instructions via the Internet or by telephone. If so, the voting instructions your nominee sent you will provide instructions for submitting your voting instructions via the Internet or by telephone. The last-dated form of proxy or voting instructions you submit (by any means) will supersede all previously-submitted proxiesforms of proxy and/or voting instructions. Also, if you are a shareholder of record and you submit your voting instructions via the Internet or by telephone you mayand later decide to attend the Annual Meeting, andyou may revoke your previously-submitted voting instructions and vote in person at the Annual Meeting.
The deadline for submitting voting instructions via the Internet or by telephone as a shareholder of record is 11:59 p.m., Eastern Daylight Saving Time, on April 21, 2019.26, 2020. For shareholders whose common shares are registered in the name of a broker, a financial institution or another nominee, please consult the instructions provided by your nominee for information about the deadline for submitting voting instructions via the Internet or by telephone.
Voting in Person
If you are a record shareholder and you attend the Annual Meeting, you may deliver your completed proxy card in person (if you received or requested a paper copy of our proxy materials), or you may vote by completing a ballot, which will be available at the Annual Meeting.
If you hold your common shares in “street name” through a broker, a financial institution or another nominee, then that nominee is considered the shareholder of record for voting purposes and will give you instructions for voting your common shares. As a beneficial owner, you have the right to direct your nominee how to vote the common shares held in your account. YourExcept in the case of “routine” agenda items, your nominee may only vote the common shares of Park that your nominee holdsheld for you in accordance with your instructions. If you have instructed a broker, a financial institution or another nominee to vote your common shares, the options described below for revoking your proxy do not apply and instead you must follow the instructions provided by your nominee to change your vote.
If you hold your common shares in “street name” and wish to attend the Annual Meeting and vote in person, you must bring an account statement or letter from your broker, financial institution or other nominee authorizing you to vote on behalf of such nominee. The account statement or letter must show that you were the direct or indirect beneficial owner of thePark common shares on February 27, 2019,28, 2020, the record date for voting at the Annual Meeting.
How will my common shares be voted?
Those common shares represented by a properly executed proxy card that is received prior to the
Annual Meeting or by properly authenticated Internet or telephone voting instructions that are submitted prior to the deadline for doing so, and in each case not subsequently revoked, will be voted in accordance with your instructions by your proxy. If you submit a valid proxy card prior to the Annual Meeting, or timely submit your voting instructions via the Internet or by telephone, but do not complete the voting instructions, your proxy will vote your common shares as recommended by the Park Board of Directors, except in the case of broker non-votes, where applicable, as follows:
“FOR” the election as Park directors of the nominees identified below under the heading “ELECTION OF DIRECTORS (Proposal 1)”;
“FOR” the non-binding advisory resolution to approve the compensation of Park’s named executive officers as disclosed in this proxy statement; and
“FOR” the ratification of the appointment of Crowe LLP as Park’s independent registered public accounting firm for the fiscal year ending December 31, 2019.
No appraisal or dissenters’ rights exist for any action proposed to be taken at the Annual Meeting. If any other matters are properly presented for voting at the Annual Meeting, the individuals appointed as proxies willHow do I vote on those matters, to the extent permitted by applicable law, in accordance with their best judgment.
What if my common shares are held through the Park National Corporation Employees’ Stock Ownership Plan?
If you participate in the Park National Corporation Employees’ Stock Ownership Plan (the “Park KSOP”) and common shares have been allocated to your account in the Park KSOP, you will be entitled to instruct the trustee of the Park KSOP, confidentially, how to vote those common shares. If you were automatically enrolled by Park, or elected to enroll, in the electronic delivery service available to certain participants in the Park KSOP, instead of receiving paper copiesour proxy materials or a Notice of our 2018 Annual Report, this proxy statement and the proxy card applicable to the Annual MeetingInternet Availability in the mail, these documentsan electronic link to our proxy materials will be made available via your Park e-mail account at the same time as paper copies of our proxy materials or the Notice of Internet Availability are sent to the other Park shareholders. If you are enrolled in this electronic delivery service and wish to receive paper copies of our 20182019 Annual Report, together with our 2019 Form 10-K, the Notice of Annual Meeting of Shareholders, this proxy statement and the proxy card applicable to the Annual Meeting, please contact Park’s transfer agent and registrar, The Park National Bank, c/o First-Knox National Bank Division, by calling (800) 837-5266, ext. 5208, or forwarding a written request addressed to the First-Knox National Bank Division, Attention: Debbie Daniels, P.O. Box 1270, One South Main Street, Mount Vernon, Ohio 43050-1270.
If you are a participant in the Park KSOP and give no voting instructions to the trustee of the Park KSOP with respect to the matters to be considered at the Annual Meeting, the trustee of the Park KSOP will vote the common shares allocated to your Park KSOP account pro rata in accordance with the instructions received from other participants in the Park KSOP who have voted.
CanHow will my common shares be voted?
Those common shares represented by properly-authenticated Internet or telephone voting instructions that are submitted prior to the deadline for doing so or a properly-executed proxy card (if you received or requested a paper copy of the proxy materialsmaterials), and in each case not subsequently revoked, will be accessed electronically?
Onvoted in accordance with your instructions by your “proxies” (the individuals named on your voting instructions or about March 11, 2019, we sentproxy card). If you timely submit your voting instructions via the Internet or by telephone or submit a valid proxy materials forcard prior to the Annual Meeting, but do not complete the voting instructions or proxy card, your proxies will vote your common shares as recommended by U.S. mail to shareholders who had not registered for electronic deliverythe Park Board of Directors, except in the case of broker non-votes, where applicable, as follows:
•“FOR” the election as Park directors of the nominees identified below under the heading “ELECTION OF DIRECTORS (Proposal 1)”;
•“FOR” the non-binding advisory resolution to approve the compensation of Park’s named executive officers as disclosed in this proxy materialsstatement; and by e-mail
•“FOR” the ratification of the appointment of Crowe LLP as Park’s independent registered public accounting firm for the fiscal year ending December 31, 2020.
No appraisal or dissenters’ rights exist for any action proposed to be taken at the Annual Meeting. If any other matters are properly presented for voting at the Annual Meeting, the individuals appointed as proxies will vote on those matters, to the shareholders who had registered for electronic delivery of the proxy materials. The Notice of Annual Meeting of Shareholders, this proxy statement and our 2018 Annual Report are also available on the Internet as describedextent permitted by applicable law, in the section captioned “NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS.”accordance with their best judgment.
How do I change or revoke my proxy?
Shareholders of record who submit proxies retain the right to revoke them at any time before they are exercised. Unless revoked, the common shares represented by such proxies will be voted at the Annual Meeting. YouIf you are a registered shareholder, you may revoke your proxy at any time before it is actually exercised at the Annual Meeting by givingby:
•filing a written notice of revocation with the Secretary of Park at 51 North Third Street, Newark, Ohio 43055, which must be received prior to Park in writing, by the Annual Meeting;
•executing and returning a later-dated proxy card (if you received or requested a paper copy of the proxy materials), which must be received prior to the Annual Meeting;
•accessing the designated Internet web sitewebsite prior to the deadline for transmitting voting instructions electronically, by electronically;
•using the designated toll-free telephone number prior to the deadline for transmitting voting instructions electronically,electronically; or by
•attending the Annual Meeting and giving notice of revocation in person.
Attendance at the Annual Meeting will not, by itself, revoke your proxy. The last-dated proxy or voting instructions or proxy card you submit (by any means) will supersede all previously-submitted proxies and/or voting instructions.
instructions and proxy cards. If you hold your common shares in “street name” and instructed your broker, financial institution or other nominee to vote your common shares and you would like to revoke or change your vote, then you must follow the instructions provided by your nominee.nominee to change your vote.
If I vote in advance, can I still attend the Annual Meeting?
Yes. You are encouraged to vote promptly, by returning your signed proxy card by mail or by submitting your voting instructions via the Internet or by telephone or by returning your proxy card (if you received or requested a paper copy of our proxy materials), so that your common shares will be represented at the Annual Meeting. However, appointing a proxy or submitting voting instructions does not affect your right to attend the Annual Meeting and vote your common shares in person if you are a shareholder of record.
What constitutes a quorum and what is the vote required with respect to the proposals to be considered at the Annual Meeting?
Under Park’sour Regulations, a quorum is a majority of theour voting shares of Park then outstanding and entitled to vote at the Annual Meeting. Other than theour common shares, there are no voting shares of Park outstanding. Common shares may be present in person or represented by proxy at the Annual Meeting. Both abstentions and broker non-votes are counted as being present for purposes of determining the presence of a quorum. There were 15,611,52116,270,436 common shares outstanding and entitled to vote on February 27, 2019,28, 2020, the record date for the Annual Meeting. A majority of the outstanding common shares, or 7,805,7618,135,219 common shares, present in person or represented by proxy, will constitute a quorum. A quorum must exist to conduct business at the Annual Meeting.
Routine and Non-Routine Proposals
The rules of NYSE American, the stock exchange on which Park’sour common shares are listed, determine whether proposals presented at shareholder meetings are routine or non-routine. If a proposal is routine, a broker holding common shares for a beneficial owner in street name may vote on the proposal without receiving instructions from the beneficial owner. If a proposal is non-routine, the broker may vote on the proposal only if the beneficial owner has provided voting instructions. A broker non-vote“broker non-vote” occurs when the broker holder of recordholding common shares for a beneficial owner is unable to vote on a proposal because the proposal is non-routine and the beneficial owner doeshas not provideprovided any voting instructions.
The proposal to ratify the appointment of Park’s independent registered public accounting firm is the only routine proposal. Each of the other proposals is a non-routine proposal on which a broker may vote only if the beneficial owner has provided voting instructions.
Vote Required with Respect to the Proposals
•Election of Directors (Proposal 1)
Under Ohio law and Park’sour Regulations, the fivefour nominees for election as Park directors under Proposal 1 receiving the greatest number of votes “FOR” election will be elected as directors of Park for a term of three years expiring at the 20222023 Annual Meeting of Shareholders (the “2022“2023 Annual Meeting”).
Common shares as to which the vote is expressed as a vote “AGAINST” or an “ABSTAIN” vote on the proxy card or in voting instructions or on a proxy card with respect to a particular nominee and broker non-votes will be counted for purposes of establishing a quorum for the Annual Meeting but will not affect whether a nominee has received sufficient votes to be elected.
The Board of Directors unanimously recommends a vote “FOR” the election of all of the individuals nominated by the Board of Directors.
•Approval of the Non-Binding Advisory Resolution to Approve the Compensation of Park’s Named Executive Officers (Proposal 2)
The affirmative vote of a majority of the common shares represented at the Annual Meeting, in person or by proxy, and entitled to vote on the proposal is required to approve the non-binding advisory resolution to approve the compensation paid to Park’s named executive officers as disclosed in this proxy statement. The effect of an abstention is the same as a vote “AGAINST” the proposal. Broker non-votes will not be counted in determining whether the proposal has been approved.
The Compensation Committee and the full Board of Directors unanimously recommend that the shareholders of Parka vote “FOR” the approval of the non-binding advisory resolution to approve the compensation of Park’s named executive officers.
•Ratification of Appointment of Independent Registered Public Accounting Firm (Proposal 3)
The affirmative vote of a majority of the common shares represented at the Annual Meeting, in person or by proxy, and entitled to vote on the proposal is required to ratify the appointment of Crowe LLP as Park’s independent registered public accounting firm for the fiscal year ending December 31, 20192020 (the “2019“2020 fiscal year”). The effect of an abstention is the same as a vote “AGAINST” the proposal. Since the proposal to ratify the appointment of Crowe LLP as Park’s
independent registered public accounting firm for the 20192020 fiscal year is a routine proposal, there will be no broker non-votes associated with this proposal.
The Audit Committee and the full Board of Directors unanimously recommend that the shareholders of Parka vote “FOR” the ratification of the appointment of Crowe LLP.
Park’s policy is to keep confidentialmaintain confidentiality with respect to proxy cards, ballots and voting instructions submitted electronically as well asand telephonically and voting tabulations that identify individual shareholders. However, exceptions to this policy may be necessary in some instances to comply with applicable legal requirements and, in the case of any contested proxy solicitation, to verify the validity of proxies presented by any person and the results of the voting. Inspectors of election and any employees associated with processing proxy cards or ballots, reviewing voting instructions submitted electronically and telephonically and tabulating the vote must acknowledge their responsibility to comply with this policy of confidentiality.
Who pays the cost of proxy solicitation?
Park will pay the costs of preparing, assembling, printing and mailing/deliveringdistributing the Notice of Annual Meeting of Shareholders, this proxy statement, the accompanyingform of proxy, card, the 2018and our 2019 Annual Report, and other related materialstogether with our 2019 Form 10-K, or the Notice of Internet Availability, as applicable, and all other costs incurred in connection with the solicitation of proxies on behalf of the Park Board of Directors, other than the Internet access andor telephone usage charges incurred byfees which may be charged to a shareholder when voting electronically.electronically or by telephone. Although Park is soliciting proxies primarily by mailing thesedistributing proxy materials to holders of our common shares, or delivering these proxy materialsshareholders by mail, by electronic mail to those shareholders registered for electronic delivery,or over the Internet, solicitation may also be made by directors, officers and employees of Park and our subsidiaries also may solicit proxies by further mailing,mailings, personal contact, telephone, facsimile or electronic mail without receiving any additional compensationmail. Directors, officers and employees who help us in the solicitation will not be specifically compensated for such solicitations.those services, but they may be reimbursed for their out-of-pocket expenses incurred in connection with the solicitation. Arrangements will also be made with brokerage firms, financial institutions and other nominees who are record holders of common shares of Park for the forwarding of solicitationproxy materials to the beneficial owners of such common shares. Park will reimburse these brokers, financial institutions and other nominees for their reasonable out-of-pocket costsexpenses in connection therewith.forwarding proxy materials to the beneficial shareholders.
NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders of Park National Corporation to Be Held on April 22, 201927, 2020: Park’sThe Notice of Annual Meeting of Shareholders, this proxy statement and Park’s 2018our 2019 Annual Report, together with our 2019 Form 10-K, are available at www.proxyvote.com.www.proxyvote.com. Alternatively, Park’s Notice of Annual Meeting of Shareholders, thisthese proxy statement and Park’s 2018 Annual Reportmaterials are available on Park’s web siteour website at www.parknationalcorp.com by selecting “Proxy Statement 4/22/2019” in through the “Document“Corporate Information – Document Highlights” section of the “Home” page for the Notice of Annual Meeting of Shareholders and this proxy statement and selecting the “Annual Report 12/31/2018” in the “Document Highlights” section of the “Home” page for Park’s 2018 Annual Report.section.
To obtain directions to attend the Annual Meeting and vote in person, please call Lacie Priest at (740) 349-0428.
DIVISIONS OF THE PARK NATIONAL BANK
In 2008, Park consolidated the banking operations of Park’s then eight subsidiary banks located in Ohio under one charter – that of The Park National Bank (“Park National Bank”). As of the date of this proxy statement, Park National Bank had 10 divisions in Ohio: (i) the Park National Bank Division headquartered in Newark, Ohio; (ii) the Fairfield National Bank Division headquartered in Lancaster, Ohio; (iii) the Richland Bank Division headquartered in Mansfield, Ohio; (iv) the Century National Bank Division headquartered in Zanesville, Ohio; (v) the First-Knox National Bank Division headquartered in Mount Vernon, Ohio; (vi) the United Bank, N.A. Division headquartered in Bucyrus, Ohio; (vii) the
Second National Bank Division headquartered in Greenville, Ohio; (viii) the Security National Bank Division headquartered in Springfield, Ohio; (ix) the Unity National Bank Division headquartered in Piqua, Ohio; and (x) The Park National Bank of Southwest Ohio & Northern Kentucky Division headquartered in Cincinnati, Ohio. As of the date of this proxy statement,In addition, Park National Bank also had one division, the NewDominion Bank Division, headquartered in Charlotte, North Carolina, and one division, the Carolina Alliance Bank Division, headquartered in Spartanburg, South Carolina. In 2020, Park will execute a rebranding initiative to operate all 12 divisions of Park National Bank under one name. The divisions will discontinue the use of their respective former bank division names and logos and they will share new, unified Park National Bank branding in all marketing and communications to the communities they serve. Each division will continue to have its own advisory board of directors.
References in this proxy statement to the “Fairfield National Bank Division,” the “Richland Bank Division,” the “Century National Bank Division,” the “First-Knox National Bank Division,” and the “Security National Bank Division” encompass both the subsidiary bank of Park prior to the bank’s merger with and into Park National Bank in 2008 and the division of Park National Bank following the bank’s merger with and into Park National Bank. In addition, references in this proxy statement to the “advisory board of directors” in respect of a division of Park National Bank encompass both the board of directors of the
subsidiary bank of Park prior to the bank’s merger with and into Park National Bank and the affiliate/advisory board of the division of Park National Bank following the bank’s merger with and into Park National Bank.
ELECTION OF DIRECTORS
(Proposal 1)
As of the date of this proxy statement, there were 1314 members of the Board of Directors - five directors in the class whose terms will expire at the Annual Meeting, four directors in the class whose terms will expire at the 20202021 Annual Meeting of Shareholders (the “2020“2021 Annual Meeting”) and fourfive directors in the class whose terms will expire at the 20212022 Annual Meeting of Shareholders (the “2021“2022 Annual Meeting”). One additional individual served as a memberOn January 28, 2019, Park announced future changes intended to be made to Park’s management and to the leadership and composition of the Park Board of Directors. To implement these changes, on April 22, 2019, the Board of Directors during a portionapproved an increase in the number of directors from 13 to 14 and elected Matthew R. Miller to fill the 2018 fiscal year - Rickvacancy created by the increase. The election of Mr. Miller to the class of directors whose terms are to expire at the 2020 Annual Meeting was effective May 1, 2019.
On January 27, 2020, James R. Taylor,DeRoberts, who retired fromcurrently serves in the class of Park directors whose terms are to expire at the 2020 Annual Meeting, notified the Park Board of Directors on April 23, 2018,that he has decided to retire as a Park director, effective immediately prior to the 2018 Annual Meeting of Shareholders (the “2018 Annual Meeting”). Mr. Taylor is sometimes referred to in this proxy statement as the “Former Director.”Meeting. As a result of the retirement of Rick R. Taylor,Mr. DeRoberts, a vacancy would have beenwill be created in the class of Park directors of Park whose terms expire at the 20192020 Annual Meeting. However, uponUpon the recommendation of the Nominating and Corporate Governance Committee of the Board of Directors (the “Nominating Committee”), the full Board of Directors has fixed the number of directors at eleven13 upon the retirement of Mr. TaylorDeRoberts immediately prior to the 2018 Annual Meeting in order to reflect the number of individuals who wouldwill then be serving as directors of Park following the retirement of Rick R. Taylordirectors as a directorresult of Park.
On December 4, 2018, upon the recommendation of the Nominating Committee, the Board of Directors approved an increase in the number of directors from eleven to 13 and elected Jason N. Judd and Mark R. Ramser to fill the vacancies created by the increase. The election of Messrs. Judd and Ramser to the class of directors whose terms are to expire at the 2019 Annual Meeting was effective January 1, 2019. Mr. Judd had been recommended to the Nominating Committee by a non-management member of the Board of Directors. Mr. Ramser had been recommended to the Nominating Committee by the President and Chief Executive Officer of Park and the Chairman of the Board of Park.DeRoberts’s retirement.
Under Proposal 1, fivefour directors will be elected at the Annual Meeting to hold office for a three‑yearthree-year term to expire at the 20222023 Annual Meeting and until their respective successors are duly elected and qualified, or until their earlier resignation, removal from office or death. The nominees of the Board of Directors for election as a director at the Annual Meeting are identified below. Each nominee was unanimously recommended by the Nominating Committee. While it is contemplated that all nominees will stand for election at the Annual Meeting, if a nominee who would otherwise receive the required number of votes is unable to serve or for good cause will not serve as a candidate for election as a
director, the individuals designated as proxies in the voting instructions or on the proxy card or in the voting instructions will have full discretion to vote the common shares represented by the proxies they hold for the election of the remaining nominees and for the election of any substitute nominee designated by the Park Board of Directors following recommendation by the Nominating Committee. The Board of Directors knows of no reason why any of the nominees named below would be unable or unwilling to serve if elected to the Board.Board of Directors.
Nominees for Election as Directors (Terms Expiring at 20222023 Annual Meeting)
The following information, as of the date of this proxy statement, concerning the age, principal occupation, other affiliations and business experience of each nominee for election as a Park director of Park has been furnished to Park by each nominee. In addition, the following information provides the evaluation of the Nominating Committee and the full Board of Directors regarding the key attributes, skills and qualifications possessed by each nominee.
DONNA M. ALVARADOC. DANIEL DELAWDER (age 70) has served as a Park director of Park since 2013April 1994 and as a member of the Board of Directors of Park National Bank since 1991. Ms. Alvarado currentlyApril 1992. Mr. DeLawder serves as Chair of the Executive Committee of the Park Board of Directors. Mr. DeLawder served as Chairman of the Board of Park from January 2005 through April 2019, as Chief Executive Officer of Park from January 1999 through December 2013, and as President of Park from April 1994 through December 2004. Mr. DeLawder served as Chairman of the Board of Park National Bank from January 2005 through April 2019, as Chief Executive Officer of Park National Bank from January 1999 through December 2013, as President of Park National Bank from April 1993 through December 2004, and as Executive Vice President of Park National Bank from March 1992 to April 1993. Prior to the foregoing, Mr. DeLawder served in executive positions with the Fairfield National Bank Division for seven years.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. DeLawder developed through more than 14 years as the Chief Executive Officer of Park and more than 48 years of service with Park in various capacities, as well as his past service as a director of the Federal Reserve Bank of Cleveland and as a member of each of the Board of Trustees and the Capital Campaign Steering Committee of Ohio University, allow him to provide banking and general financial expertise and comprehensive knowledge regarding Park and the markets within which Park National Bank (and its divisions) operate to the Board of Directors and have recommended Mr. DeLawder’s election as a Park director.
ALICIA J. HUPP (age 59)has served as a Park director since June 2015, and as a member of the advisory board of directors of the Security National Bank Division since March 2012. Ms. Hupp serves as a member of each of the Audit Committee and the RiskNominating Committee of Park’sthe Park Board of Directors. Ms. AlvaradoHupp has served as President, of AGUILA International, Granville, Ohio, an international business consulting firm that specializes in human resourcesChief Executive Officer and leadership development, since 1994. She has served onChairman of the Board of DirectorsSweet Manufacturing Company, Springfield, Ohio, a manufacturer of CSX Corporation, a publicly-traded provider of railbulk material handling equipment, since November 2005 and other transportation services, since 2006 and of CoreCivic, Inc. (formerly known as Corrections Corporation of America), a publicly-traded owner and operator of privatized correctional and detention facilities, since 2003. During her career, Ms. Alvarado has also served as ChairPresident of the Ohio Board of Regents, Chair of the Governor’s Workforce Policy Board in Ohio and a commissioner on the Ohio Commission on Hispanic/Latino Affairs. Ms. Alvarado has also held senior management positions in government, including Deputy Assistant Secretary of Defense with the United States Department of Defense and Director of ACTION, the federal domestic volunteer agency.Sweet Manufacturing Company from July 1996 to November 2005.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Ms. AlvaradoHupp has developed through hernearly 24 years of service asin leading a Parkmanufacturing company based in the market area served by the Security National Bank director (including her service as an Audit Committee member of that Board of Directors), combined with her understanding of government through her public sector experience, her experience as a public company director, her human resources and leadership development expertise and her civic and community involvement,Division allow her to provide a valuedvaluable customer perspective on business, federal and state government regulatory oversight and corporate governance issuesmanagement expertise to the Board of Directors and have recommended Ms. Alvarado’sHupp’s election as a Park director.
MATTHEW R. MILLER (age 42)41)has served as a Park director of Park since January 1,May 2019 and as a member of the Board of Directors of Park National Bank since January 1,May 2019. Mr. JuddMiller serves as Secretary and a non-voting member of the AuditExecutive Committee of Park’sthe Park Board of Directors. Mr. JuddMiller has served as Chief Financial OfficerPresident of each of Park and SeniorPark National Bank since May 2019. Previously, Mr. Miller served as Executive Vice President of Financeeach of Park and International Franchise Operations of Justice, New Albany, Ohio, a retail fashion company within the Ascena Retail Group, since 2015. Previously,Park National Bank from April 2017 through April 2019. Prior to that, Mr. JuddMiller served as AssociateChief Accounting Officer and principal accounting officer of Park and Chief Accounting Officer of Park National Bank from December 2012 through March 2017; and as Vice President Finance, of Victoria’s Secret, Columbus, Ohio, a retail fashion company specializing in women’s apparel,Accounting of Park National Bank from 2011 to 2015 and as Assistant Treasurer, Corporate Finance, of L Brands, Inc., Columbus, Ohio, a specialty retailer of women’s apparel and personal care, beauty and home fragrance products, fromApril 2009 to 2011 and prior thereto,December 2012. Mr. Miller began his career in various other2001 with the accounting firm Deloitte, primarily serving clients in the financial leadership roles at L Brands, Inc., beginning in 2004.services industry.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. JuddMiller has developed throughin more than 15ten years servingof service with Park as well as his eight years in financial leadership roles for public companies, including his experience in customer engagement, customer analytics, productivity analysis, financial performance and risk management and his experience in capital markets and mergers and acquisitionsaccounting practice allow him to provide a strong understanding of customer-focused financial performancetechnical banking knowledge and financial and risk management leadershipaccounting expertise to the Board of Directors and have recommended Mr. Judd’sMiller’s election as a Park director.
STEPHEN J. KAMBEITZROBERT E. O’NEILL (age 60)57)has served as a Park director of Park since 2010April 2013 and as a member of the Board of Directors of Park National Bank since 2010.December 2004. Mr. Kambeitz serves as Chair of the Audit Committee and as a member of each of the Compensation Committee and the Risk Committee of Park’s Board of Directors. Mr. Kambeitz served as President of R.C. Olmstead, Inc., Dublin, Ohio, a software development company, from 2008 until that company was acquired in 2016. He had also served as Chief Financial Officer of R.C. Olmstead, Inc. from 2001 to 2008. Prior thereto, Mr. Kambeitz served as Chief Financial Officer from 1999 to 2001 of Lighthouse Financial Services, Inc., a diversified financial services
holding company. Previously, Mr. Kambeitz served as Senior Vice President of Consumer Lending of Fifth Third Bank, Columbus, Ohio, from 1998 to 1999 and as Chief Financial Officer of State Savings Company, Columbus, Ohio, a savings and loan holding company, from 1985 to 1998 and Executive Vice President, Office of the President, of State Savings Bank, the primary savings association subsidiary of State Savings Company, from 1997 to 1998. Mr. Kambeitz also served as Controller of Calibre Corporation, Columbus, Ohio, a fast food franchisee, from 1983 to 1985, and as an accountant with Worthington Industries, Inc., Columbus, Ohio, a diversified metals manufacturing company, from 1981 to 1983. Mr. Kambeitz began his career in the Columbus, Ohio office of Peat, Marwick, Mitchell & Company, a predecessor to KPMG.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Kambeitz has developed through more than 37years of executive sales and financial management, team building and restructuring and SEC reporting and public accounting experience, including working in the financial services industry through the savings and loan challenges in the 1980s, allow him to provide a valuable perspective on operating a financial services institution to the Board of Directors and have recommended Mr. Kambeitz’s election as a Park director.
TIMOTHY S. MCLAIN (age 57) has served as a director of Park since 2010 and as a member of the advisory board of directors of the Century National Bank Division since 2007. Mr. McLainO’Neill serves as a member of each of the Audit Committee, the Executive Committee and the CompensationNominating Committee of Park’sthe Park Board of Directors. Mr. McLainO’Neill has served as President and a director of Southgate Corporation, Newark, Ohio, a real estate development and management company, since April 2002 and served as Vice President of McLain, Hill, Rugg & Associates, Inc., a firm which provides tax and accounting services, since 1991 and has been associated with that firm since 1979. Mr. McLain has been a Certified Public Accountant since 1985.Southgate Corporation from February 1989 to April 2002.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. McLainO’Neill has developed through his years of service as a Park National Bank director (including his service as an Audit Committee member of that Board of Directors), together with more than 3430 years as a Certified Public Accountantof experience in public practicedeveloping and managing industrial, commercial and multi-family real estate in Central Ohio, allow him to provide tax, accountingdevelopment and financialmanagement expertise to the Board of Directors in connection with the loan activities of Park National Bank (and its divisions) and have recommended Mr. McLain’sO’Neill’s election as a Park director.
MARK R. RAMSER (age 64) has served as a director of Park since January 1, 2019 and as a member of the advisory board of directors of the First-Knox National Bank Division since 1997. Mr. Ramser serves as a member of the Risk Committee of Park’s Board of Directors. Mr. Ramser has served as President of Ohio Cumberland Gas Company, Mount Vernon, Ohio, a privately-owned natural gas public utility, since 1987. Previously, Mr. Ramser served as Vice President of Ohio Cumberland Gas Company from 1980 to 1986 and as an internal auditor for Kraftco Corporation, Glenview, Illinois, a dairy products holding company that later became Kraft, Inc., from 1975 to 1980. Mr. Ramser became a Certified Internal Auditor while working at Kraftco Corporation. Over the past 38 years, Mr. Ramser has owned and operated several small companies engaged in providing natural gas public utilities, over 200 oil and gas wells and more than 40 commercial real estate spaces. Mr. Ramser also served as a member of the Board of Directors of Gatherco, Inc., Orrville, Ohio, an owner and operator of natural gas pipeline facilities, from 1997 until its merger with Delaware-based Chesapeake Utilities Corp. in 2015.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Ramser has developed through nearly 38 years of experience in leading, owning and operating natural gas public utility companies and his over 21 years of experience as a member of the advisory board of directors of the First-Knox National Bank Division allow him to provide leadership and management expertise and valuable insight into the corporate governance issues faced by Park National Bank’s divisions to the Board of Directors and have recommended Mr. Ramser’s election as a Park director.Recommendation
Recommendation and Vote Required
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT THE PARK SHAREHOLDERS OF PARK VOTE “FOR” THE
ELECTION OF ALL OF THE NOMINEES NAMED ABOVE.
Under Ohio law and Park’s Regulations, the five nominees for election as Park directors receiving the greatest number of votes “FOR” election will be elected as directors of Park for a term of three years expiring at the 2022 Annual Meeting. Proxies cannot be voted at the Annual Meeting for more than fivefour nominees under Proposal 1. Except in the case of broker non-votes, common shares represented by properly executedproperly-authenticated Internet and telephone voting instructions or properly-executed and returned proxy cards, or properly authenticated Internet and telephone voting instructionsin each case that are submitted prior to the deadline for doing so, will be voted “FOR” the election of the Board of Directors’ nominees named above unless the vote is expressed as a vote “AGAINST” or an “ABSTAIN” vote in the voting instructions or on the proxy card or in the voting instructions. Common shares as to which the vote is expressed as a vote “AGAINST” or an “ABSTAIN” vote and broker non-votes will be counted for purposes of establishing a quorum for the Annual Meeting but will not be counted toward the election of directors, or toward the election of the individual nominees specified on the proxy card and in the voting instructions.card.
Continuing Directors
The following information, as of the date of this proxy statement, concerning the age, principal occupation, other affiliations and business experience of each of the continuing directors of Park has been furnished to Park by each director. In addition, the following information provides the evaluation of the
Nominating Committee and the full Board of Directors regarding the key attributes, skills and qualifications possessed by each continuing director.
DIRECTORS CONTINUING IN OFFICE
(TermsDirectors Continuing in Office (Terms to Expire at the 20202021 Annual Meeting)
C. DANIEL DELAWDERF. WILLIAM ENGLEFIELD IV (age 69)65) has served as a Park director of Park since 1994January 2005 and as a member of the Board of Directors of Park National Bank since 1992. Mr. DeLawder serves as Chair of the Executive Committee of Park’s Board of Directors. Mr. DeLawder also served as a member of the Investment Committee of Park’s Board of Directors during the 2018 fiscal year and during the 2019 fiscal year until the Investment Committee was eliminated, effective January 28, 2019. Mr. DeLawder has served as Chairman of the Board of Park since January 2005, and served as Chief Executive Officer of Park from January 1999 to December 2013, and, prior thereto, as President of Park from 1994 to December 2004. Mr. DeLawder has served as Chairman of the Board of Park National Bank since January 2005 and served as Chief Executive Officer of Park National Bank from January 1999 to December 2013, as President of Park National Bank from 1993 to December 2004, and as Executive Vice President of Park National Bank from 1992 to 1993. Prior to the foregoing, Mr. DeLawder also served in executive positions with the Fairfield National Bank Division for seven years. Mr. DeLawder served as a director of the Federal Reserve Bank of Cleveland from 2007 to 2012, including as Chair of the Operations/Resources Committee from 2009 to 2012. Mr. DeLawder also served as a member of the Board of Trustees of Ohio University, Athens, Ohio, from 2000 to 2009, and for the last two of those years, as Chairman of the Board of Trustees. Mr. DeLawder also served on the Ohio University Capital Campaign Steering Committee from 2010 through 2015.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. DeLawder developed through more than 14 years as the Chief Executive Officer of Park and more than 47 years of service with Park in some capacity, as well as his past service as a director of the Federal Reserve Bank of Cleveland and as a member of each of the Board of Trustees and the Capital
Campaign Steering Committee of Ohio University, allow him to provide banking and general financial expertise and comprehensive knowledge regarding Park and the markets within which Park National Bank (and its divisions) operate to the Board of Directors and that Mr. DeLawder should continue as a Park director.
JAMES R. DEROBERTS (age 62)has served as a director of Park since February 2015 and as a member of the Board of Directors of Park National Bank since February 2015. Mr. DeRoberts serves as a member of the Risk Committee of Park’s Board of Directors. Mr. DeRoberts also served as a member of the Investment Committee of Park’s Board of Directors during the 2018 fiscal year and during the 2019 fiscal year until the Investment Committee was eliminated, effective January 28, 2019. Mr. DeRoberts has served as a partner at Gardiner Allen DeRoberts Insurance, an independent insurance agency located in Columbus, Ohio, since 2008. In addition, he has served as a director of the Federal Home Loan Bank of Cincinnati since 2008, including as Chair of its Risk Committee from January 2016 until December 2017. Mr. DeRoberts served as the Chairman of the Board and Chief Executive Officer of The Arlington Bank, an Ohio state-chartered bank with locations in Grandview Heights and Upper Arlington, Ohio, from 1999 until The Arlington Bank was acquired in 2017. He also served as a member of the Board of The Miami University Foundation, Oxford, Ohio, from January 2011 to December 2012.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. DeRoberts has developed through more than 33 years of consulting with financial institutions on insurance and risk management practices, as well as his service as a director of the Federal Home Loan Bank of Cincinnati and with The Arlington Bank, allow him to provide insurance and risk management expertise as well as general banking and finance knowledge to the Board of Directors and that Mr. DeRoberts should continue as a Park director.
ALICIA J. HUPP (age 58)has served as a director of Park since June 2015, and as a member of the advisory board of directors of the Security National Bank Division since March 2012. Ms. Hupp serves as a member of each of the Audit Committee and the Nominating Committee of Park’s Board of Directors. Ms. Hupp has served as President, Chief Executive Officer and Chairman of the Board of Sweet Manufacturing Company, Springfield, Ohio, a manufacturer of bulk material handling equipment, since November 2005 and served as President of Sweet Manufacturing Company from July 1996 to November 2005.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Ms. Hupp has developed through nearly 23 years in leading a manufacturing company based in the market area served by the Security National Bank Division allow her to provide a valuable customer perspective and management expertise to the Board of Directors and that Ms. Hupp should continue as a Park director.
ROBERT E. O’NEILL (age 56)has served as a director of Park since 2013 and as a member of the Board of Directors of Park National Bank since 2004. Mr. O’Neill serves as a member of each of the Audit Committee, the Executive Committee and the Nominating Committee of Park’s Board of Directors. Mr. O’Neill also served as a member of the Investment Committee of Park’s Board of Directors during the 2018 fiscal year and during the 2019 fiscal year until the Investment Committee was eliminated, effective January 28, 2019. Mr. O’Neill has served as President and a director of Southgate Corporation, Newark, Ohio, a real estate development and management company, since 2002 and served as Vice President of Southgate Corporation from 1989 to 2002.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. O’Neill has developed through his years of service as a Park National Bank director
(including his service as an Audit Committee member of that Board of Directors), together with more than 29 years of experience in developing and managing industrial, commercial and multi-family real estate in Central Ohio, allow him to provide development and management expertise to the Board of Directors in connection with the loan activities of Park National Bank (and its divisions) and that Mr. O’Neill should continue as a Park director.
DIRECTORS CONTINUING IN OFFICE
(Terms to Expire at the 2021 Annual Meeting)
F. WILLIAM ENGLEFIELD IV (age 64) has served as a director of Park since 2005 and as a member of the Board of Directors of Park National Bank sinceApril 1993. Mr. Englefield serves as Chair of the Compensation Committee and as a member of each of the Executive Committee and the Nominating Committee of Park’sthe Park Board of Directors. Mr. Englefield has served as President of Englefield, Inc., a company engaged in the sale of petroleum products (at retail and wholesale) and convenience stores and restaurants, since January 1989.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Englefield has developed through more than 2930 years of leading a growing privately-held business, with responsibility for all segments of company operations including management and financial areas, allow him to provide an important retail perspective and demonstrated operational experience to the Board of Directors, and that Mr. Englefield should continue as a Park director.
JULIA A. SLOAT (age 49)50) has served as a Park director of Park since June 2015 and as a member of the Board of Directors of Park National Bank since June 2015. Ms. Sloat serves as a member of each of the Compensation Committee and the Risk Committee of Park’sthe Park Board of Directors. Ms. Sloat also served as a member of the Investment Committee of Park’s Board of Directors during the 2018 fiscal year and during the 2019 fiscal year until the Investment Committee was eliminated, effective January 28, 2019. Ms. Sloat has served as Senior Vice President – Treasury & Risk of American Electric Power, Inc., an electric public utility holding company, since January 1, 2019. Prior thereto, she served as President and Chief Operating Officer of AEP Ohio, an electric distribution utility, from May 2016 to December 31, 2018, and as Senior Vice President and Treasurer from January 2013 to April 2016 and Vice President-Regulatory Case Management from September 2009 to December 2012, of American Electric Power, Inc. Previously, Ms. Sloat served as Vice President ‑– Corporate Finance & Investor Relations from July 2008 to September 2009 of Tween Brands, Inc., which operated two specialty retail brands targeting girls between ages 7 and 14. Ms. Sloat also served in investor relations positions with increasing responsibility for American Electric Power, Inc. from October 1999 until July 2008, serving as Treasurer & Vice President ‑– Investor Relations immediately prior to joining Tween Brands, Inc.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Ms. Sloat has developed as a corporate leader with extensive financial analysis and communication experience in the areas of treasury, investor relations, corporate finance, regulatory cost recovery strategy and development and execution, investment management, pension liability management, financial planning and analysis, merger and acquisition analysis and execution, debt underwriting and risk management allow her to provide a valued perspective on corporate finance and investor relations issues and expertise in the analysis and execution of strategies addressing those issues to the Park Board of Directors. The Nominating Committee and the full Board of Directors also believe that Ms. Sloat’s responsibilities in her positions with American Electric Power, Inc. and AEP Ohio have provided her with a strong understanding of the unique attributes and needs of the customers within a service territory that largely coincides with the
areas served by Park National Bank. The Nominating Committee and the full Board of Directors believe that Ms. Sloat should continue as a Park director.
DAVID L. TRAUTMAN (age 57)58) has served as a Park director of Park since January 2005 and as a member of the Board of Directors of Park National Bank since February 2002. Mr. Trautman serves as Vice Chair of the Executive Committee of Park’sthe Park Board of Directors. Mr. Trautman alsohas served as ChairChairman of the Investment Committee of Park’s Board of Directors during the 2018 fiscal yearPark since May 2019 and during the 2019 fiscal year until the Investment Committee was eliminated, effective January 28, 2019. Mr. Trautman has served as Chief Executive Officer of Park since January 2014 and2014. He also served as President of Park sincefrom January 2005. He also served2005 through April 2019 and as Secretary of Park from July 2002 to December 2013. Mr. Trautman has served as Chairman of the Board of Park
National Bank since May 2019 and as Chief Executive Officer of Park National Bank since January 2014 and2014. He also served as President of Park National Bank sincefrom January 2005.2005 through April 2019. Prior to his current positions,January 2005, Mr. Trautman served in executive positions with Park National Bank and then the First-Knox National Bank Division for over ten years.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Trautman has developed through more than 3336 years of experience in banking, including most recently 14 years as President of Park and Park National Bank as well as fivesix years as Chief Executive Officer of Park and Park National Bank, allow him to provide technical banking knowledge, community perspective and financial leadership to the Board of Directors, and believe that Mr. Trautman should continue as a Park director.
LEON ZAZWORSKY (age 70)71) has served as a Park director of Park since November 2003 and as a member of the Board of Directors of Park National Bank since December 1991. Mr. Zazworsky was appointed as the Lead Director of Park onin January 23, 2012. He serves as the Chair of the Risk Committee and as a member of each of the Compensation Committee, the Executive Committee and the Nominating Committee of Park’sthe Park Board of Directors. Mr. Zazworsky has served as President/Owner of Mid State Systems, Inc., Hebron, Ohio, a transportation and distribution company, since April1979. Mr. Zazworsky has also served as President/Owner of Mid State Warehouses, Inc., Hebron, Ohio, a warehousing and distribution company, since November1987. In addition, Mr. Zazworsky has served as President/Owner of Dalmatian Transportation, Ltd., a transportation company, since March2006.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Zazworsky has developed through more than 3839 years of successful private business ownership – managing people, budgets, sales and finances through varying economic conditions in a highly competitive and regulated industry – allow him to provide leadership experience and business expertise to the Board of Directors, and believe that Mr. Zazworsky should continue as a Park director.
Board and Executive Leadership TransitionDirectors Continuing in Office (Terms to Expire at the 2022 Annual Meeting)
On January 28, 2019, Park announced future changes intended to be made to Park’s management and to the leadership and composition of the Park Board of Directors. To implement these changes, the Park Board of DirectorsDONNA M. ALVARADO (age 71) has proposed to take action immediately following the Annual Meeting to (i) increase the number of directors of Park from 13 to 14, creating a vacancy in the class of directors whose terms will expire in 2020; (ii) elect Matthew R. Miller (“Mr. Matt Miller”) to fill the newly-created vacancy in the Park Board of Directors, with such election to be effective as of May 1, 2019; and (iii) elect Mr. Matt Miller as President of Park, with such election also to be effective as of May 1, 2019. In addition to Mr. Matt Miller’s electionserved as a Park director since April 2013 and as President of Park, the Board of Directors of Park National Bank intends to elect Mr. Matt Miller as a director of Park National Bank and as President of Park National Bank at the meetingmember of the Board of Directors of Park National Bank to be held on April 22, 2019 (the “PNB Board April 2019 Meeting”), with both such elections to be effectivesince October 1991. Ms. Alvarado serves as Chair of May 1, 2019.
Matthew R. Miller, age 40, has servedthe Nominating Committee and as Executive Vice Presidenta member of each of Parkthe Audit Committee and Park National Bank since April 2017. Previously, Mr. Matt Miller served as Chief Accounting Officer and principal accounting officer of Park and Chief Accounting Officer of Park National Bank from December 2012 to March 2017; and as Vice President of Accounting of Park National Bank from April 2009 to December 2012. Mr. Matt Miller began his career in 2001 with the accounting firm Deloitte, primarily serving clients in the financial services industry.
The Park Board of Directors has also proposed to take action immediately following the Annual Meeting to elect Mr. Trautman as ChairmanRisk Committee of the Park Board of Directors, with such election to be effectiveDirectors. Ms. Alvarado has served as President of May 1, 2019. In addition to Mr. Trautman’s election as the Chairman of the Park Board of Directors,AGUILA International, Granville, Ohio, an international business consulting firm that specializes in human resources and leadership development, since January 1994. She has served on the Board of Directors of CSX Corporation, a publicly-traded provider of rail and other transportation services, since December 2006 and of CoreCivic, Inc. (formerly known as Corrections Corporation of America), a publicly-traded owner and operator of privatized correctional and detention facilities, since December 2003.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Ms. Alvarado has developed through her years of service as a Park National Bank intendsdirector (including her service as an Audit Committee member of that Board of Directors), combined with her understanding of government through her public sector experience, her experience as a public company director, her human resources and leadership development expertise and her civic and community involvement, allow her to elect Mr. Trautmanprovide a valued perspective on business, federal and state government regulatory oversight and corporate governance issues to the Board of Directors, and that Ms. Alvarado should continue as Chairmana Park director.
JASON N. JUDD (age 43)has served as a Park director since January 2019 and as a member of the Board of Directors of Park National Bank at the PNB Board April 2019 Meeting, with such election to be effective as of May 1,since January 2019. Following the effective time of these elections, Mr. Trautman will continue to serve as Chief Executive Officer andJudd serves as a director of each of Park and Park National Bank.
As a resultmember of the actions proposed to be taken by the Boards of Directors of Park and Park National Bank at their respective April meetings with respect to Mr. Trautman’s election, Mr. DeLawder would cease to serve as Chairman of the Board of Directors of each of Park and Park National Bank, effective as of May 1, 2019. Following such time, Mr. DeLawder would continue to serve as a director of each of Park and Park National Bank and as Chairman of the ExecutiveAudit Committee of each of the Park Board of Directors. Mr. Judd has served as Senior Vice President of
Corporate Finance of Big Lots, Inc., a discount retailer, since October 2019. Before joining Big Lots, Inc., Mr. Judd had served as Chief Financial Officer and Senior Vice President from February 2016 to October 2019, and as Chief Financial Officer and Vice President from July 2015 to February 2016, of Justice, New Albany, Ohio, a retail fashion company within the Ascena Retail Group. Prior to that, Mr. Judd served as Associate Vice President of Finance, of Victoria’s Secret Stores, Columbus, Ohio, a retail fashion company specializing in women’s apparel, from June 2011 to May 2015 and as Assistant Treasurer, Corporate Finance and Mergers & Acquisitions, of L Brands, Inc., Columbus, Ohio, a specialty retailer of women’s apparel and personal care, beauty and home fragrance products, from June 2009 to June 2011 and prior thereto, in various other financial leadership roles at L Brands, Inc., beginning in June 2004.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Judd has developed through more than 16 years serving in financial leadership roles for public companies, including his experience in customer engagement, customer analytics, productivity analysis, financial performance and risk management and his experience in capital markets and mergers and acquisitions allow him to provide a strong understanding of customer-focused financial performance and financial and risk management leadership to the Board of Directors, and that Mr. Judd should continue as a Park director.
STEPHEN J. KAMBEITZ (age 61) has served as a Park director since January 2010 and as a member of the Board of Directors of Park National Bank.Bank since January 2010. Mr. Kambeitz serves as Chair of the Audit Committee and as a member of each of the Compensation Committee and the Risk Committee of the Park Board of Directors. Mr. Kambeitz is currently a private investor. Mr. Kambeitz served as President of R.C. Olmstead, Inc., Dublin, Ohio, a software development company, from June 2008 until that company was acquired in March 2016. He had also served as Chief Financial Officer of R.C. Olmstead, Inc. from June 2001 to March 2016. Prior thereto, Mr. Kambeitz served as Chief Financial Officer from 1999 to 2001 of Lighthouse Financial Services, Inc., a diversified financial services holding company. Previously, Mr. Kambeitz served as Senior Vice President of Consumer Lending of Fifth Third Bank, Columbus, Ohio, from 1998 to 1999 and as Chief Financial Officer of State Savings Company, Columbus, Ohio, a savings and loan holding company, from 1985 to 1998 and Executive Vice President, Office of the President, of State Savings Bank, the primary savings association subsidiary of State Savings Company, from 1997 to 1998. Mr. Kambeitz also served as Controller of Calibre Corporation, Columbus, Ohio, a fast food franchisee, from 1983 to 1985, and as an accountant with Worthington Industries, Inc., Columbus, Ohio, a diversified metals manufacturing company, from 1981 to 1983. Mr. Kambeitz began his career in the Columbus, Ohio office of Peat, Marwick, Mitchell & Company, a predecessor to KPMG.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Kambeitz has developed through more than 38years of executive sales and financial management, team building and restructuring and SEC reporting and public accounting experience, including working in the financial services industry through the savings and loan challenges in the 1980s, allow him to provide a valuable perspective on operating a financial services institution to the Board of Directors, and that Mr. Kambeitz should continue as a director.
TIMOTHY S. MCLAIN (age 58) has served as a Park director since January 2010 and as a member of the advisory board of directors of the Century National Bank Division since April 2007. Mr. McLain serves as a member of each of the Audit Committee and the Compensation Committee of the Park Board of Directors. Mr. McLain has served as Vice President of McLain, Hill, Rugg & Associates, Inc., a firm which provides tax and accounting services, since December 1991 and has been associated with that firm since August 1979. Mr. McLain has been a Certified Public Accountant since 1985.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. McLain has developed through more than 35 years as a Certified Public Accountant in public practice allow him to provide tax, accounting and financial expertise to the Board of Directors, and that Mr. McLain should continue as a Park director.
MARK R. RAMSER (age 65) has served as a director of Park since January 2019 and as a member of the advisory board of directors of the First-Knox National Bank Division since January 1997. Mr. Ramser serves as a member of the Risk Committee of the Park Board of Directors. Mr. Ramser has served as President of Ohio Cumberland Gas Company, Mount Vernon, Ohio, a privately-owned natural gas public utility, since January 1987. Over the past 39 years, Mr. Ramser has owned and operated several small companies engaged in providing natural gas public utilities, over 200 oil and gas wells and more than 40 commercial real estate spaces. Mr. Ramser also served as a member of the Board of Directors of Gatherco, Inc., Orrville, Ohio, an owner and operator of natural gas pipeline facilities, from November 1997 until its merger with Delaware-based Chesapeake Utilities Corp. in April 2015.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Ramser has developed through nearly 39 years of experience in leading, owning and operating natural gas public utility companies and his over 22 years of experience as a member of the advisory board of directors of the First-Knox National Bank Division (including his service as an Audit Committee member of that advisory board of directors) allow him to provide leadership and management expertise and valuable insight into the corporate governance issues faced by Park National Bank’s divisions to the Board of Directors, and that Mr. Ramser should continue as a Park director.
BENEFICIAL OWNERSHIP OF PARK COMMON SHARES
The following table furnishes information regarding the beneficial ownership of Park common shares, as of February 27, 201928, 2020 (unless otherwise noted), for each of the Park directors of Park (including those nominated for election at the Annual Meeting), each of the individuals named in the Summary Compensation Table for 2018,2019, all current directors and executive officers of Park as a group and each person known by Park to beneficially own more than 5% of Park’s outstanding common shares:
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| Beneficial Ownership |
| | |
Name and Address(1) | Amount and Nature(1) | Percentage(2) |
Trust department of Park National Bank 50 North Third Street Newark, OH 43055(3) | 1,904,480 | 12.2 | % |
The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355(4) | 1,180,558 | 7.6 | % |
BlackRock Inc. 55 East 52nd Street New York, NY 10055(5) | 971,472 | 6.2 | % |
Donna M. Alvarado | 5,197 | * |
C. Daniel DeLawder(6)(7) | 132,149 | * |
James R. DeRoberts(8) | 2,900 | * |
F. William Englefield IV(9) | 6,324 | * |
Alicia J. Hupp | 1,926 | * |
Jason N. Judd(10) | 115 | * |
|
| | | |
| Beneficial Ownership |
Stephen J. Kambeitz(11) | 3,208 | * |
Timothy S. McLain(12) | 3,080 | * |
Robert E. O’Neill(13) | 15,228 | * |
Mark R. Ramser(14) | 83,744 | * |
Julia A. Sloat | 2,085 | * |
David L. Trautman(6) (15) | 59,030 | * |
Leon Zazworsky(16) | 47,014 | * |
Brady T. Burt(6) (17) | 6,346 | * |
| | |
All current directors and executive officers as a group (14 persons) (18) | 368,346 |
2.4% |
| | | | | | | | |
| Beneficial Ownership | |
Name and Address(1) |
|
|
| Amount and Nature(1) | Percentage(2) |
Trust department of Park National Bank 50 North Third Street Newark, OH 43055(3) | 1,713,034 | 10.5% |
The Vanguard Group, Inc. 100 Vanguard Blvd. Malvern, PA 19355(4) | 1,228,989 | 7.6% |
BlackRock, Inc. 55 East 52nd Street New York, NY 10055(5) | 1,002,325 | 6.2% |
Donna M. Alvarado | 5,879 | * |
C. Daniel DeLawder(6)(7) | 135,377 | * |
James R. DeRoberts(8) | 6,550 | * |
F. William Englefield IV(9) | 7,634 | * |
Alicia J. Hupp | 2,326 | * |
Jason N. Judd(10) | 475 | * |
Stephen J. Kambeitz(11) | 3,658 | * |
Timothy S. McLain(12) | 2,980 | * |
Matthew R. Miller(6)(13) | 4,776 | * |
Robert E. O’Neill(14) | 16,238 | * |
Mark R. Ramser(15) | 83,557 | * |
Julia A. Sloat | 2,614 | * |
David L. Trautman(6) (16) | 62,040 | * |
Leon Zazworsky(17) | 47,464 | * |
Brady T. Burt(6) (18) | 8,148 | * |
|
|
|
All current directors and executive officers as a group (15 persons) (19) | 389,716 |
2.4% |
________________________
*Less than 1%
(1) Unless otherwise indicated in the footnotes to this table, each beneficial owner has sole voting and investment power with respect to all of the common shares reflected in the table for such beneficial owner. All fractional common shares have been rounded to the nearest whole common share. The mailing address of each of the directors and executive officers of Park is 50 North Third Street, Post Office Box 3500, Newark, Ohio 43058-3500.
(2) The “Percent of Class” computation is based upon 15,611,52116,270,436 common shares outstanding on February 27, 2019.28, 2020.
(3) The trust department of Park National Bank (and its divisions) beneficially owns 1,904,4801,713,034 common shares (12.2%(10.5% of the outstanding common shares), with voting power but no investment power as to 1,370,9601,214,281 of these common shares, investment power but no voting power as to 30,338
29,263 of these common shares and sole voting and investment power as to 503,182469,490 of these common shares. The officers and directors of Park National Bank (and its divisions) and the officers and directors of Park disclaim beneficial ownership of the common shares beneficially owned by the trust department of Park National Bank (and its divisions). The number shown does not include 1,029,1871,101,653 common shares held of record by the trust department of Park National Bank (and its divisions) as to which the trust department has no voting or investment power.
(4) Based on information contained in a Schedule 13G/A dated February 11, 2019,10, 2020, and filed by The Vanguard Group, Inc. with the SEC on the same day,February 12, 2020, to report beneficial ownership of common shares of Park as of December 31, 2018.2019. The Vanguard Group, Inc. reported that it is deemed to be the beneficial owner of 1,180,5581,228,989 common shares. The Vanguard Group, Inc. reported sole voting power as to 13,53413,461 common shares, shared voting power as to 1,8422,142 common shares, sole investment power as to 1,166,6401,215,529 common shares and shared investment power as to 13,91813,460 common shares.
Vanguard Fiduciary Trust Company (“VFTC”), a wholly-owned subsidiary of The Vanguard Group, Inc., was reported to be the beneficial owner of 12,07611,318 common shares (0.1%(0.07% of the common shares outstanding as of February 27, 2019)28, 2020) as a result of VFTC serving as investment manager of collective trust accounts.
Vanguard Investments Australia, Ltd. (“VIA”), a wholly-owned subsidiary of The Vanguard Group, Inc., was reported to be the beneficial owner of 3,3004,285 common shares (0.0%(0.03% of the common shares outstanding on February 27, 2019)28, 2020) as a result of VIA serving as investment manager of Australian investment offerings.
(5) Based on information contained in a Schedule 13G/A dated February 5, 20192020 and filed with the SEC on February 6, 2019,that same day, on behalf of BlackRock, Inc., to report the beneficial ownership by its subsidiaries (BlackRock Advisors, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock Investment Management (Australia) Limited, BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock Asset Management Ireland Limited, BlackRock Institutional Trust Company, National Association, BlackRock Financial Management, Inc., BlackRock Asset Management Schweiz AG, and BlackRock Investment Management, LLC) of common shares of Park as of December 31, 2018.2019. The Schedule 13G/A reported that BlackRock, Inc., through its subsidiaries, had sole voting power as to 938,092967,998 common shares and sole investment power as to 971,4721,002,325 common shares.
(6) Individual named in Summary Compensation Table for 2018.2019. Messrs. DeLawder, Miller and Trautman are also directors of Park.
(7) The number shown includes: (i) 23,83125,177 common shares held for the account of Mr. DeLawder in the Park KSOP; (ii) 50,232 common shares held by the wife of Mr. DeLawder as to which she has sole voting and investment power and Mr. DeLawder disclaims beneficial ownership; (iii) 1,877 common shares as to which Mr. DeLawder has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. DeLawder until March 31, 2022; and (iv) 9291,859 common shares as to which Mr. DeLawder has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. DeLawder until March 31, 2023.2023; and (v) 952 common shares as to which Mr. DeLawder has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. DeLawder until March 29, 2024. As of February 27, 2019,28, 2020, 55,280 common shares held by Mr. DeLawder and 50,148 common shares held by the wife of Mr. DeLawder had beenwere pledged as security to a financial institution, which is not affiliated with Park, in connection with a personal loan.
(8) The number shown includes 400 common shares held in an individual retirement account with the trust department of Park National Bank as to which common shares the trust department of Park National Bank has voting power and Mr. DeRoberts has investment power. The number shown also includes 900 common shares held in a managing agency account with the trust department of Park National Bank by Chartwell Family Group, Inc. (“Chartwell”), an Ohio corporation as to which the wife of Mr. DeRoberts is the sole owner. In his capacity as president of Chartwell, Mr. DeRoberts shares investment power with his wife, and the trust department of Park National Bank has voting power, with respect to the 900 common shares held in the managing agency account. The number shown also includes 3,200 common shares held by Mr. DeRoberts in a managing agency account with the trust department of Park National Bank, as to which common shares Mr. DeRoberts has investment power and the trust department of Park National Bank has voting power with respect to the common shares held in the managing agency account.power.
(9) The number shown includes: (i) 4,4614,911 common shares held in a managing agency account with the trust department of Park National Bank as to which common shares the trust department of Park National Bank has voting power and Mr. Englefield has investment power; (ii) 273 common shares held by Mr. Englefield in an individual retirement account with a brokerage firm; and (iii) 1,590 common shares held in a cash management account by a brokerage firm as custodian for Mr. Englefield.Englefield; and (iv) 860 common shares held in a trust with a brokerage firm for the benefit of members of Mr. Englefield’s immediate family, as to which trust Mr. Englefield serves as the trustee with voting power and investment power over the 860 common shares held in the trust.
(10) The number shown includes 115475 common shares held jointly by Mr. Judd and his wife as to which he shares voting and investment power.
(11) The number shown includes 250 common shares held by Mr. Kambeitz in an individual retirement account with a brokerage firm.
(12) The number shown includes 3,0802,980 common shares held jointly by Mr. McLain and his wife as to which he shares voting and investment power.
(13) The number shown includes: (i) 3,191 common shares held for the account of Mr. Miller in the Park KSOP; (ii) 508 common shares as to which Mr. Miller has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. Miller until March 31, 2022; (iii) 589 common shares as to which Mr. Miller has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. Miller until March 31, 2023; and (iv) 488 common shares as to which Mr. Miller has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. Miller until March 29, 2024. As of February 28, 2020, 1,584 common shares held by Mr. Miller were pledged as security to a financial institution, which is not affiliated with Park, in connection with a personal loan.
(13)(14) The number shown includes: (i) 500 common shares held by the wife of Mr. O’Neill in a managing agency account with the trust department of Park National Bank as to which she has sole investment power, the trust department of Park National Bank has voting power and Mr. O’Neill disclaims beneficial ownership; and (ii) an aggregate of 2,000 common shares held by two trusts established for the benefit of Mr. O’Neill’s two children as to which Mr. O’Neill disclaims beneficial ownership. The number shown does not include (x) an aggregate of 902 common shares held in two educational trust accounts established by Mr. Robert E. O’Neill’s father (John J. O’Neill) for the benefit of his grandchildren for which Park National Bank’s trust department serves as trustee and as to which common shares the trust department has voting power and investment power but would request input from Mr. Robert E. O’Neill prior to making investment decisions with respect to these common shares.shares;
and (y) 2,000 common shares held by the trust department of Park National Bank for The O’Neill Foundation, an Ohio nonprofit corporation managed by Mr. O’Neill’s wife and two adult children, and as to which common shares Mr. O’Neill has no voting power or investment power.
(15) The number shown includes: (i) 1,9041,987 common shares held by Mr. Ramser in an individual retirement account with a brokerage firm; (ii) 16,465 common shares held by the wife of Mr. Ramser as to which she has sole voting and investment power and Mr. Ramser disclaims beneficial ownership; (iii) 3,5803,736 common shares held by the wife of Mr. Ramser in an individual retirement account with a brokerage firm as to which she has sole voting and investment power and Mr. Ramser disclaims beneficial ownership; (iv) an aggregate of 9,3278,500 common shares held by three trusts established for the benefit of Mr. Ramser’s three children for which Mr. Ramser serves as trustee and as to which Mr. Ramser disclaims beneficial ownership; (v) 4,278 common shares held by a trust established for the benefit of Mr. Ramser’s mother for which Mr. Ramser serves as co-trustee and as to which Mr. Ramser disclaims beneficial ownership; (vi) 3,421 common shares held by Ramser FLP Inc. of which Mr. Ramser owns 50% of the equity interests and Mr. Ramser disclaims beneficial ownership of such common shares except to the extent of his pecuniary interest therein; (vii) 25,416 common shares held by Ramser FLP Ltd. of which Mr. Ramser owns 47.5% of the equity interests and Mr. Ramser disclaims beneficial ownership of such common shares except to the extent of his pecuniary interest therein; and (viii) 15,453 common shares held by Ramser Arboretum over which Mr. Ramser shares voting and investment power in his capacity as Secretary and Treasurer and as to which Mr. Ramser disclaims beneficial ownership. As of February 28, 2020, 3,401 common shares held by Mr. Ramser and 16,465 common shares held by the wife of Mr. Ramser were pledged as security in connection with a business loan through the First-Knox National Bank Division.
(15)(16) The number shown includes: (i) 13,93414,816 common shares held for the account of Mr. Trautman in the Park KSOP; (ii) 13,230 common shares held by the wife of Mr. Trautman as to which she has sole voting and investment power and Mr. Trautman disclaims beneficial ownership; (iii) 822 common shares held in a rollover plan as to which the wife of Mr. Trautman has sole investment power, the trust department of Park National Bank has voting power and Mr. Trautman disclaims beneficial ownership; (iv) 346 common shares held in an inherited IRA for the benefit of the wife of Mr. Trautman as to which she has sole investment power, the trust department of Park National Bank has voting power and Mr. Trautman disclaims beneficial ownership; (v) 1,891 common shares as to which Mr. Trautman has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. Trautman until March 31, 2022; and (vi) 9421,875 common shares as to which Mr. Trautman has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. Trautman until March 31, 2023.2023; and (vii) 1,195 common shares as to which Mr. Trautman has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. Trautman until March 29, 2024. As of February 27, 2019,28, 2020, 27,865 common shares held by Mr. Trautman and 13,230 common shares held by the wife of Mr. Trautman had beenwere pledged as security to a financial institution which is not affiliated with Park, in connection with a personal loan.
(16)(17) The number shown includes 100 common shares held by the wife of Mr. Zazworsky in a brokerage account as to which she has sole voting and investment power and Mr. Zazworsky disclaims beneficial ownership. The number shown does not include 10 common shares held by an investment club of which Mr. Zazworsky is a member. Mr. Zazworsky disclaims beneficial ownership of these 10 common shares because the voting and investment power with respect to these common shares is subject to collective action by the members of the investment club.
(17)(18) The number shown includes: (i) 5,1325,665 common shares held for the account of Mr. Burt in the Park KSOP; (ii) 709 common shares as to which Mr. Burt has voting power and the right to receive
dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. Burt until March 31, 2022; (iii) 938 common shares as to which Mr. Burt has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. Burt until March 31, 2022;2023; and (iii) 471(iv) 836 common shares as to which Mr. Burt has voting power and the right to receive dividends but which common shares may not be sold, transferred, assigned or otherwise disposed of by Mr. Burt until March 31, 2023.29, 2024. As of February 28, 2020, 2,482 common shares held by Mr. Burt were pledged as security to a financial institution which is not affiliated with Park, in connection with a personal loan.
(18)(19) See Notes (7) through (17)(18) above.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires that Park’s directors and officers, and any persons beneficially holding more than ten percent of Park’s outstanding common shares, file statements with the Securities and Exchange Commission (the “SEC”) reporting their initial beneficial ownership of common shares and any subsequent changes in their beneficial ownership. Park is required to disclose in this proxy statement any late statements, if any statements are not filed within the time periods mandated by the SEC. Based solely upon Park’s review of (i) Section 16(a) statements filed on behalf of these persons for their transactions during Park’s 2018 fiscal year and (ii) written representations received from these persons that no other Section 16(a) statements were required to be filed by them for transactions during Park’s 2018 fiscal year, Park believes that all Section 16(a) filing requirements applicable to Park’s officers and directors, and persons holding more than ten percent of Park’s outstanding common shares, were complied with.
CORPORATE GOVERNANCE
Code of Business Conduct and Ethics
In accordance with the applicable sections of the NYSE American Company Guide (the “NYSE American Rules”) and applicable SEC rules, the Park Board of Directors has adopted the Code of Business Conduct and Ethics, which applies to the directors, officers and employees of Park and our subsidiaries. The Code of Business Conduct and Ethics is intended to set forth Park’s expectations for the conduct of ethical business practices by the officers, directors, employees and agents of Park and our subsidiaries, to promote advance disclosure and review of potential conflicts of interest and similar matters, to protect and encourage the reporting of questionable behavior, to foster an atmosphere of self-awareness and prudent conduct and to discipline appropriately those who engage in improper conduct. The Code of Business Conduct and Ethics is posted on the “Corporate Information -– Governance Documents” section of the “Investor Relations” page of Park’s Internet web sitewebsite at www.parknationalcorp.com.www.parknationalcorp.com.
Park Improvement Line/Online Reporting
Park has implemented a “whistleblower” hotline called the “Park“PRK Improvement Line.” The ParkPRK Improvement Line number is (800) 418-6423, Ext. PRK (775). Calls that relate to accounting, internal accounting controls or auditing matters or that relate to possible wrongdoing by employees of Park or one of our subsidiaries can be made anonymously through this hotline. An additional method of reporting anonymously is online via www.securityvoice.com/reports.reports. The calls and e-mails are received by an independent third-party service and the information received is forwarded directly to the Chair of the Audit Committee and the head of Park’s Internal Audit Department.
Corporate Governance Guidelines
Upon the recommendation of the Nominating Committee, the Board of Directors has adopted Corporate Governance Guidelines to promote the effective functioning of the Board of Directors and its committees and to reflect Park’s commitment to high standards of corporate governance. The Corporate Governance Guidelines are included as Exhibit A to the charter of the Nominating Committee, which is posted on the “Corporate Information -– Governance Documents” section of the “Investor Relations” page of Park’s web sitewebsite at www.parknationalcorp.com.www.parknationalcorp.com.
Independence of Directors
Applicable NYSE American Rules require that a majority of the members of Park’sthe Park Board of Directors be independent directors. The definition of independence for purposes of the NYSE American Rules includes a series of objective tests, which Park has used in determining whether the members of the
Park Board of Directors as well as the members of Park’s Compensation Committee are independent. In addition, a member of Park’s Audit Committee will not be considered to be independent under the applicable NYSE American Rules if he or she (i) does not satisfy the independence standards in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (ii) has participated in the preparation of the financial statements of Park or any of our current subsidiaries at any time during the past three years.
In making determinations as to the independence of (i)each of the currentPark directors, of Park and (ii) Rick R. Taylor, the Former Director, consistent with the definitions of an “independent director” in the applicable NYSE American Rules, the Board of Directors reviewed, considered and discussed:
•the relevant facts and circumstances of the relationships, whether direct or indirect and whether employment, commercial, industrial, banking, consulting, legal, accounting, charitable, familial or otherwise, between Park and/or any of our subsidiaries (including their divisions) and (i) each currentPark director of Park (and the immediate family members of each currentPark director) or (ii) the Former Director (and the immediate family members of the Former Director), in each case since January 1, 2016;2017;
•the compensation and other payments (including payments made in the ordinary course of providing business services) that (i) each currentPark director of Park (and the immediate family members of each currentPark director) or (ii) the Former Director (and the immediate family members of the Former Director):
•has, directly or indirectly, received from or made to Park and/or any of our subsidiaries (including their divisions) since January 1, 2016; and2017; or
•presently expects to receive, directly or indirectly, from or make to Park and/or any of our subsidiaries (including their divisions);
•the relationship, if any, between (i) each currentPark director of Park (and the immediate family members of each currentPark director) or (ii) the Former Director (and the immediate family members of the Former Director) and each independent registered public accounting firm which has served as the outside auditor for Park and/or any of our subsidiaries (including theirour subsidiaries’ divisions) since January 1, 2016;2017;
•whether (i) any currentPark director of Park (or any of the immediate family members of any currentPark director) or (ii) the Former Director (or any immediate family member of the Former Director)
is or was employed as an executive officer of another entity where, at any time since January 1, 2016,2017, any of Park’s executive officers served or presently serves on the compensation committee of such other entity; and
•whether (i) any currentPark director of Park or (ii) the Former Director participated in the preparation of the financial statements of Park or any of our current subsidiaries at any time since January 1, 2016.2017.
Based upon that review, consideration and discussion and the unanimous recommendation of the Nominating Committee, the full Board of Directors has determined that at least a majority of the currentPark directors of Park qualify as independent directors. The Board of Directors has determined that each of Donna M. Alvarado, James R. DeRoberts, F. William Englefield IV, Alicia J. Hupp, Jason N. Judd, Stephen J. Kambeitz, Timothy S. McLain, Robert E. O’Neill, Mark R. Ramser, Julia A. Sloat and Leon Zazworsky qualifies and that during his period of service as a Park director in the 2018 fiscal year, Rick R. Taylor qualified, as an independent director because each such individual has or had no financial or personal ties, either directly or indirectly, with Park or any of our subsidiaries other than:
•compensation received and expected to be received in the individual’s capacity as a Park director of Park and a director of Park National Bank (or a member of the board of directors of one of the divisions of Park National Bank);
•non-preferential payments made or received in the ordinary course of providing business services (in the nature of payments of interest or proceeds relating to banking services or loans by one or more of Park National Bank and the divisions of Park National Bank);
•ownership of our common shares of Park;shares;
•in the case of James R. DeRoberts, Stephen J. Kambeitz, Robert E. O’Neill Rick R. Taylor, and Leon Zazworsky, ownership of 7% Subordinated Notes due April 20, 2022 issued by Park to them, to their immediate family members or to entities related to them or to their immediate family members and held by them or their immediate family members or entities related to them or to their immediate family members, which 7% Subordinated Notes due April 20, 2022 were repaid in full on April 24, 2017;
•in the case of James R. DeRoberts, compensation received by the insurance agency (as to which he is a partner) for insurance and risk management consulting services provided to Park and our subsidiaries in an amount not exceeding $100,000 in each of Park’s past three fiscal years, and the fact that such insurance agency continues to provide such insurance and risk management consulting services;
in the case of Alicia J. Hupp, the fact that she serves as a member of the Board of Directors of Wittenberg University and (i) the Park National Corporation Foundation has made donations to Wittenberg University totaling less than $25,000 in each of Park’s past three fiscal years and (ii) the Security National Bank Division has made nominal payments in support of Wittenberg University events from time to time, in each case with Ms. Hupp receiving no direct or indirect benefit in any capacity from the donations and payments made by the Park National Corporation Foundation and the Security National Bank Division;
•in the case of Alicia J. Hupp, the fact that she serves as a member of the Board of Directors of the Greater Springfield Chamber of Commerce to whichand (i) the Security National Bank Division
has made payments totaling less than $20,000 in each of Park’s past three fiscal years in respect of membership in and participation in events sponsored by the Greater Springfield Chamber of Commerce and (ii) the Park National Corporation Foundation has made a multi-year pledge commitment to the Greater Springfield Chamber of Commerce totaling $150,000 for five years to be paid in annual installments of $30,000 beginning in 2020, in each case with Ms. Hupp receiving and to receive no direct or indirect benefit in any capacity from the payments made by the Security National Bank Division;Division and the Park National Corporation Foundation;
•in the case of Timothy S. McLain, compensation received by Mr. McLain’s brother (James L. McLain, II) in the capacity of James L. McLain, II as a member of the advisory board of directors of the Fairfield National Bank Division;
•in the case of Timothy S. McLain, the fact that the firm of Timothy S. McLain and James L. McLain, II has provided miscellaneous tax services to fiduciary customers of Park National Bank and the divisions of Park National Bank in a total amount not exceeding $50,000 in each of Park’s past three fiscal years, and continues to do so and that such services are not provided directly or indirectly to or for the benefit of Park, Park National Bank or any division of Park National Bank;
•in the case of Robert E. O’Neill, the fact that he serves as a member of the Governing Board of The Licking County Foundation and (i) Park National Bank and the Park National Corporation Foundation have made donations in an aggregate amount totaling less than $80,000 in each of Park’s past three fiscal years and (ii) the Park National Corporation Foundation has made a multi-year pledge commitment totaling $300,000 for five years to be paid in annual installments of $60,000 beginning in 2020, in each case with Mr. O’Neill receiving and to receive no direct or indirect benefit in any capacity from the donations made by Park National Bank and the Park National Corporation Foundation;
•in the case of Robert E. O’Neill, the fact that he serves on the Board of Trustees of the Newark Campus Development Fund and Park National Bank and the Park National Corporation Foundation have made donations in an aggregate amount totaling less than $150,000 in each of Park’s past three fiscal years, with Mr. O’Neill receiving no direct or indirect benefit in any capacity from the donations made by Park National Bank and the Park National Corporation Foundation;
in the case of Robert E. O’Neill, the fact that he serves on the Board of Trustees of the Newark Campus Development Fund and the Park National Corporation Foundation has made donations in an amount totaling less than $150,000 in each of Park’s past three fiscal years, with Mr. O’Neill receiving no direct or indirect benefit in any capacity from the donations made by the Park National Corporation Foundation;
•in the case of Julia A. Sloat, the fact that she serves as Senior Vice President – Treasury & Risk of American Electric Power, Inc., an electric public utility holding company that, through one or more of its affiliates, provides utility services to Park and Park’sour subsidiaries; and
in the case of Julia A. Sloat, the fact that she served on the Board of Directors of Columbus 2020 from June 2016 to December 2018 and on the Board of Directors of the Ohio Chamber of Commerce from May 2016 to April 2018, and Park National Bank made nominal payments totaling less than $15,000 in each of Park’s past three fiscal years in respect of membership in and participation in events sponsored by these organizations, in each case with Ms. Sloat receiving no direct or indirect benefit in any capacity from the payments made by Park National Bank; and
•in the case of each of Alicia J. Hupp, Timothy S. McLain, Robert E. O’Neill, Mark R. Ramser, Julia A. Sloat Rick R. Taylor and Leon Zazworsky, the fact that he or she serves or served on the Board of Trustees/Directors of, or on a committee of, a non-profit organization to which Park National Bank (or one of its divisions) or the Park National Corporation Foundation made nominal donations not exceeding $50,000 in each of Park’s past three fiscal years, with the applicable current Park director or the Former Director receiving no direct or indirect benefit in any capacity from the donations made.
None of C. Daniel DeLawder, Matthew R. Miller and David L. Trautman and C. Daniel DeLawder do not qualifyqualifies as an independent directorsdirector because theyhe currently serveserves as an executive officersofficer and/or an employee of Park and Park National Bank.
Matthew R. Miller will not qualify as an independent director when he is elected to the Park Board of Directors after the Annual Meeting and effective as of May 1, 2019, because he will have also been elected as President of Park and Park National Bank and be serving as an executive officer of Park and Park National Bank.
Mr. Matt Miller and members of his immediate family are customers of and have had banking relationships with Park National Bank in the ordinary course of business and in compliance with applicable federal and state laws and regulations. It is expected that similar banking relationships will occur in the future. Mr. Matt Miller’s brother, Mark H. Miller (“Mr. Mark Miller”), is a salaried employee of Park National Bank serving in a non-executive officer position. Mr. Mark Miller’s compensation is established by Park National Bank in accordance with its compensation practices applicable to employees with comparable qualifications and responsibilities and holding similar positions and without the involvement of Mr. Matt Miller.
Risk Management Oversight
The role of the Board of Directors is to provide oversight to ensure an effective enterprise risk management program is in place, including an appropriate enterprise risk management framework and related governance structure. Certain committees of Park’s Board of Directors administer various aspects of the Board of Directors’ risk oversight function. The Risk Committee assists the Board of Directors in overseeing Park’s enterprise-wide risks, including credit risk, market risk, liquidity risk, operational risk, IT/IS risk (including cyber-security, information security and third-party risks), legal risk (together with the Audit Committee), compliance risk (together with the Audit Committee), strategic risk (including capital management) and reputational risk. The Risk Committee’s role and its interaction with the full Board of Directors and other Board committees regarding the Risk Committee’s risk oversight responsibilities are more fully described under the heading “STRUCTURE AND MEETINGS OF BOARD OF DIRECTORS – Committees of the Board – Risk Committee.Committee”. The Compensation Committee evaluates with Park’s Chief Risk Officer all risks posed by Park’s compensation policies and practices and makes all reasonable efforts required to limit any unnecessary risks Park’s compensation programs pose to Park and ensure that the programs do not encourage executive officers and/or other employees to take unnecessary and excessive risks that threaten the value of Park. The Compensation Committee’s role and its interaction with the full Board of Directors and other Board committees regarding compensation risk are more fully described under the heading “EXECUTIVE COMPENSATION – Compensation Committee Report.”Report”. The Audit Committee discusses Park’s systems to monitor and manage business risk with management and Park’s Internal Audit Department. The Audit Committee assists the Board of Directors in overseeing audit risk, financial reporting risk, compliance risk (together with the Risk Committee) and legal risk (together with the Risk Committee). The Audit Committee’s role and its interaction with the full Board of Directors regarding the Audit Committee’s risk oversight responsibilities are more fully described under the heading “STRUCTURE AND MEETINGS OF BOARD OF DIRECTORS – Committees of the Board – Audit Committee.Committee”.
Nominating Procedures
The Nominating Committee recommended the nominees identified in “ELECTION OF DIRECTORS (Proposal 1) ̶ Nominees for Election as Directors (Terms Expiring at 20222023 Annual Meeting)” for election as directors of Park at the Annual Meeting. As detailed in the Nominating Committee’s
charter, the Nominating Committee has the responsibility to identify and recommend to the full Board of Directors individuals qualified to become directors of Park.
Director Qualifications
Each director must be a shareholder of Park.
It is the sense of the full Board of Directors that each memberdirector should be an active leader in the member’sdirector’s business or profession and in the member’sdirector’s community. As a result, a Park directorsdirector who experienceexperiences a material change in theirhis or her principal occupation, position, location or responsibility from that held when they werehe or she was elected to the Board of Directors areis to promptly advise Park’s Chairman of the Board and the Chair of the Nominating Committee. The Nominating Committee will meet to review the continued appropriateness of such director’s service on the Board of Directors under the new circumstances and make a recommendation to the Board of Directors at the next regularly scheduled meeting of the full Board of Directors. Generally, a director is to no longer continue in service after age 82; however, individuals serving on the Board of Directors as of December 31, 2011 are grandfathered and not subject to this limitation. In addition, each director must be a shareholder of Park.
A director is expected to submit his or her resignation if a loan from Park National Bank or one of its divisions to the director or an entity controlled by the director is classified “doubtful” or “loss” under applicable regulatory standards. In addition, a director is expected to submit his or her request for a temporary leave of absence as a director if a loan from Park National Bank or one of its divisions to the director or an entity controlled by the director is classified “substandard” under applicable regulatory standards, with termination of the leave of absence to occur if and when the subject loan has been upgraded to a “pass” status, as defined under applicable regulatory standards.
Criteria Considered by Nominating Committee
Park believes that Board membership should reflect the diversity of the markets served by the Park organization. The Nominating Committee takes into account many factors when considering candidates for the Board of Directors to ensure that the Board is comprised of directors with a variety of experiences and backgrounds, each of whom has high-level managerial experience and represents the interests of Park’s shareholders as a whole rather than those of special interest groups. The Nominating Committee utilizes its pool of existing directors of Park National Bank (and its divisions) as well as the significant network of business contacts of Park’s existing directors and executive officers as the primary source from which director candidates are identified. When evaluating individual director candidates, the Nominating Committee may consider those factors it deems appropriate, including:
•whether the candidate has exhibited behavior indicating a commitment to the highest ethical standards;
•whether the candidate has special skills, expertise and background that would complement the attributes of the incumbent Park directors, taking into consideration the diverse communities and geographies in which Park and our subsidiaries operate;
•whether the candidate has achieved prominence in his or her business, governmental or professional activities, and has built a reputation that demonstrates the ability to make the kind of important and sensitive judgments that members of the Park Board of Directors are called upon to make;
•whether the candidate possesses a willingness to challenge management while working constructively as a part of a team in an environment of collegiality and trust; and
•whether the candidate will be able to devote sufficient time and energy to the performance of his or her duties as a Park director. Directors are to advise thePark’s Chairman of the Board and the Chair of the Nominating Committee in advance of accepting an invitation to serve on another public company board. The Nominating Committee will then review the individual’s availability to fulfill his or her responsibilities as a Park director if he or she serves on more than three other public company boards.
The Nominating Committee from time to time will identify other selection criteria for Board membership, taking into account the current Board composition and striving to ensure that appropriate knowledge, skills and experience are represented.
Depending on the current needs of Park’sthe Park Board of Directors, certain factors may be weighed more or less heavily by the Nominating Committee. Diversity is considered by the Nominating Committee when evaluating potential nominees because the Board of Directors believes that Board membership should reflect not only the diversity of the markets served by Park and our subsidiaries, but also diversity in the Board’s overall experience in business, government, education, technology and other areas relevant to the operations of Park and our subsidiaries and diversity in the Board’s composition in terms of age, skills and other factors relevant to the business of Park and our subsidiaries.
Park’s directors embody a well-rounded variety of skills, knowledge, background and experience. The Board of Directors also benefits from directors having a range of tenures as this provides continuity and experience as well as fresh perspectives. The average tenure of our directors is 9.5eight years. The directors range in age from 4241 to 7071 years.
In considering candidates for the Board of Directors, the Nominating Committee evaluates the entirety of each candidate’s credentials. Other than the requirement that a candidate be a Park shareholder, there are no specific minimum qualifications that must be met by a Nominating Committee-recommended nominee. However, the Nominating Committee does believe that all members of the Board of Directors should have the highest character and integrity, a reputation for working constructively with others, sufficient time to devote to Board matters and no conflict of interest that would interfere with performance as a Park director.
The Nominating Committee will consider candidates for the Board of Directors from any reasonable source, including shareholder recommendations. The Nominating Committee does not evaluate candidates differently based on who has made the recommendation. The Nominating Committee has the authority under its charter to hire and pay a fee to consultants or search firms to assist in the process of identifying and evaluating candidates. During the 20182019 fiscal year, the Nominating Committee used BeecherHill, an executivedid not use any such consultants or search firm located in Columbus, Ohio, to help identify and evaluate director candidates.firms.
Nominating Guidelines for Shareholders
Shareholders may recommend director candidates for consideration by the Nominating Committee by writing to Brady T. Burt, Park’s Chief Financial Officer, Secretary and Treasurer, at our executive offices located at
51 North Third Street, Post Office Box 3500, Newark, Ohio 43058-3500. The recommendation must give the candidate’s name, age, business address or residence address, principal occupation or employment for the past five years, other public company boards on which the candidate serves, whether the candidate would qualify as an “independent director” under the applicable NYSE American Rules, the number of Park common shares beneficially owned by the candidate, a statement of the candidate’s qualifications to serve on the Park Board of Directors, and the written consent of the candidate to serve as a Park director, if elected. The Nominating Committee may require additional information to determine the qualifications of the candidate recommended. The person making the recommendation must also include such person’s name and address as well as the number of Park common shares owned by such person.
Any shareholder who wishes to nominate an individual for election as a director at an annual meeting of the shareholders of Park must comply with the provisions of Park’sour Regulations related to shareholder nominations. Shareholder nominations must be made in writing and delivered or mailed to Park’s President not less than 14 days nor more than 50 days prior to any meeting of shareholders called for the election of directors. However, if less than 21 days’ notice of the meeting is given to the shareholders, the nomination must be mailed or delivered to Park’s President not later than the close of business on the seventh day following the day on which the notice of the meeting was mailed to the shareholders. Nominations for the 20192020 Annual Meeting must be received by David L. Trautman,Matthew R. Miller, Park’s President, and Chief Executive Officer, by April 8, 2019.13, 2020. Each shareholder nomination must contain the following information to the extent known by the nominating shareholder:
•the name and address of each proposed nominee;
•the principal occupation of each proposed nominee;
•the total number of Park common shares that will be voted for each proposed nominee;
•the name and residence address of the nominating shareholder; and
•the number of Park common shares beneficially owned by the nominating shareholder.
Nominations which do not comply with the above requirements and Park’sour Regulations will be disregarded.
Communications with the Board of Directors
Although Park has not to date developed formal processes by which shareholders may communicate directly with directors, Park believes that the informal process, in which any communication sent to the Board of Directors, in care of the Audit Committee, of the Board of Directors (the “Audit Committee”), or to Park’s Chairman of the Board, Park’s Chief Executive Officer or Park’s President, is forwarded to all members of the Board of Directors or specified individual directors, if applicable, has served the needs of the Board of Directors and Park’sthe Park shareholders. There is no screening process in respect of shareholder communications. All shareholder communications received by the Audit Committee, Park’s Chairman of the Board, Park’s Chief Executive Officer or Park’s President for the attention of the Board of Directors or specified individual directors are forwarded to the appropriate members of the Board.
Park’sThe Park Board of Directors, or one of the Board committees, may consider the development of more specific procedures related to shareholder communications with the Board. Until other procedures are developed and posted on the “Corporate Information ̶ Governance̶Governance Documents” section of the “Investor Relations” page of Park’s web sitewebsite at www.parknationalcorp.com, any communication to the Board of Directors or to individual directors may be sent to the Board or one or more individual directors, in care of the Audit Committee, or in care of Park’s Chairman of the Board, Park’s Chief Executive
Officer or Park’s President, at our executive offices located at 50 North Third Street, Post Office Box 3500, Newark, Ohio 43058-3500. The mailing envelope must contain a clear notation indicating that the enclosed letter is a “Shareholder-Board Communication” or “Shareholder-Director Communication,” as appropriate. All shareholder communications must identify the author as a shareholder of Park and clearly state whether the correspondence is directed to all members of the Board of Directors or to certain specified individual directors. All shareholder communications will be copied and circulated to the appropriate director or directors without any screening. Correspondence marked “personal and confidential” will be delivered to the intended recipient(s) without opening.
Transactions with Related Persons
Policies and Procedures with Respect to Related Person Transactions
Park National Bank and/or one or more of the divisions of Park National Bank have made, and expect to make in the future, extensions of credit in the ordinary course of business to certain directors and officers of Park. These loans are made on substantially the same terms, including the interest rates charged, collateral required and repayment terms, as those prevailing at the same time for comparable loans with persons not affiliated with Park or one of our subsidiaries. Such loans do not involve more than a normal risk of collectability or present unfavorable features.
On an annual basis, each director and each executive officer of Park must complete a Directors’ and Officers’ Questionnaire which requires disclosure of any transaction, arrangement or relationship with Park and/or any of our subsidiaries since the beginning of the last fiscal year in which the director or executive officer, or any member of his or her immediate family, has or had a direct or indirect interest. In addition, officers of Park and our subsidiaries must provide personal financial information annually. Park’s Compliance Department also reviews information quarterly for any outstanding loans with Park National Bank and/or one of its divisions in which the director or executive officer has a direct or indirect material interest. As a part of its review process, Park’s Compliance Department compares information on a quarterly basis to track originations of any new loans for a director or an executive officer and reconciles all then current account information to ensure the data has been gathered and recorded accurately.
The Audit Committee of Park’s Board of Directors is responsible, under the terms of the Audit Committee’s charter, for reviewing and overseeing procedures designed to identify related person transactions that are material to Park’s consolidated financial statements or otherwise require disclosure under applicable NYSE American Rules or applicable rules adopted by the SEC, including those transactions required to be disclosed under Item 404 of SEC Regulation S-K, or the rules of any other appropriate regulatory agency or body. The Audit Committee has the authority to approve any such transactions. Further, under the terms of Park’s Code of Business Conduct and Ethics, the Audit Committee is responsible for reviewing and overseeing all actions and transactions which involve the personal interest of a director, an executive officer or an employee of Park or one of our subsidiaries (including their divisions), and has the right to determine in advance whether any such action or transaction represents a potential conflict of interest. In addition, under the terms of Park’s Commercial Loan Policy, all loans made to directors of Park or one of our subsidiaries in excess of $500,000 must be approved by the full Board of Directors of Park or of Park National Bank. To the extent any transaction represents an ongoing business relationship with Park or any of our subsidiaries, such transaction must be reviewed annually and be on terms no more favorable than those which would be usual and customary in similar transactions between unrelated persons dealing at arms’ length.
At least annually, the Nominating Committee receives a report identifying any Park director, or any immediate family member sharing a Park director’s household, who serves as a director, a trustee or
an executive officer of a charitable organization that receives contributions or pledges from Park, any of our subsidiaries and/or the Park National Corporation Foundation.
Banking Transactions
During Park’s 2018the 2019 fiscal year, certain of the current directors and executive officers of Park, the Former Director, as well as members of their respective immediate families and firms, corporations or other entities with which they are affiliated, were customers of and had banking transactions (including loans and loan commitments) with Park National Bank and/or one or more of the divisions of Park National Bank in the ordinary course of their respective businesses and in compliance with applicable federal and state laws and regulations. It is expected that similar banking transactions will be entered into in the future. Loans to these persons have been made on substantially the same terms, including the interest rate charged and collateral required, as those prevailing at the time for comparable transactions with persons not affiliated with Park or one of our subsidiaries. These loans have been, and are presently, subject to no more than a
normal risk of uncollectability and present no other unfavorable features. At the close of business on December 31, 2018,2019, the aggregate principal balance of loans to the 1314 individuals currently serving as directors of Park as well as the one other current executive officersofficer of Park who does not serve as a Park director, together with their respective associates, as a group was approximately $25.8$31.7 million. As of the date of this proxy statement, each of the loans described in this paragraph was performing in accordance with its original terms. Each of the loans described in this paragraph was subject to our written policies, procedures and standard underwriting criteria applicable to loans generally as well as made in accordance with the requirements of Regulation O promulgated by the Federal Reserve Board governing prior approval of the loan by the Board of Directors of Park National Bank (or the division of Park National Bank) making the loan.
Other Transactions and Relationships
Matthew R. Miller’s brother is a salaried employee of Park National Bank serving in a non-executive officer position. Mr. Miller’s brother received total direct compensation (base salary, annual incentive compensation and long-term equity-based awards at target fair value) of less than $300,000 during 2019. He also participates in the programs providing medical, dental, long-term disability and life insurance benefits to all other employees of Park’s subsidiaries. The compensation of Mr. Miller’s brother is established by Park National Bank in accordance with its compensation practices applicable to employees with comparable qualifications and responsibilities and holding similar positions and without the involvement of Mr. Miller.
Hedging Policy
The Park Insider Trading Policy prohibits directors, members of advisory boards of directors, officers and employees of Park, the subsidiaries of Park (and their respective divisions) from engaging in any hedging or monetization transactions related to Park securities (including prepaid variable forward contracts, equity swaps, caps, collars and exchange funds) unless:
•the proposed transaction is first submitted to Park’s Chief Executive Officer or Park’s Chief Financial Officer for approval at least two weeks prior to the proposed execution of documents evidencing the proposed transaction, together with a written justification for the proposed transaction; and
•the proposed transaction is approved by Park’s Chief Executive Officer or Park’s Chief Financial Officer. There is no assurance, however, that such approval will be given.
The Park Insider Trading Policy also prohibits directors, advisory board members, officers and employees of Park, the subsidiaries of Park (and their respective divisions) from:
•Trading in Park common shares or any other Park security on a short-term basis, with any Park common shares purchased in the open market or in a privately-negotiated transaction being required to be held for a minimum of six months.
•Engaging in short sales of Park common shares.
•Buying or selling puts or calls of Park common shares.
STRUCTURE AND MEETINGS OF BOARD OF DIRECTORS
Meetings of the Board of Directors and Attendance at Annual Meetings of Shareholders
The Board of Directors held tenseven meetings during the 20182019 fiscal year. Each incumbent director of Park attended at least 78%85% of the aggregate of the total number of meetings held by the full Board of Directors and the total number of meetings held by the Board committees on which he or she served, in each case during the period of his or her service. In accordance with applicable NYSE American Rules and Park’s Corporate Governance Guidelines, the independent directors meet in executive session (without the presence of management and non-independent directors) on a regular basis but not less than twice each year. Such meetings have historically been held immediately following each regular meeting of the full Board of Directors.
Park encourages all incumbent directors and director nominees to attend each annual meeting of shareholders. AllTwelve of the twelve13 then incumbent directors attended Park’s last annual meeting of shareholders held on April 23, 2018.22, 2019.
Board Leadership
During the 2018 fiscal year, C. Daniel DeLawder served as Park’s Chairman of the Board (as well as a full-time executive employee of Park National Bank) and David L. Trautman served as Park’s Chief Executive Officer and President (sometimes referred to as the “Chief Executive Officer”). On January 23, 2012, the Nominating Committee recommended, and the Board of Directors appointed, Leon Zazworsky as the Lead Director for Park, a position which Mr. Zazworsky continues to hold. Park’s management and Board of Directors believe that the Lead Director position augments Park’s strong history of shareholder-focused leadership. The Board of Directors retains the authority to modify this structure to best address Park’s unique circumstances as and when the Board deems appropriate.
The Board of Directors believes that its current leadership structure is efficient and effective for Park for the following reasons:
The Chief Executive Officer’s day-to-day management and operation of Park and execution of Park’s strategy provides the Chief Executive Officer with a comprehensive understanding of Park’s performance and strategic priorities, which is crucial for participating in discussions with the Board of Directors and executing strategy.
The Chief Executive Officer, working closely with the Chairman of the Board, supplemented by the Lead Director position, promotes strategy development and execution and facilitates the flow of information between management and the Board of Directors, which are essential to effective corporate governance.
Taken together, the Lead Director position, and the Chief Executive Officer and the Chairman of the Board positions foster clear accountability, effective decision-making and alignment on corporate strategy. The Chairman of the Board and the Lead Director confer on the calendar and agendas for the meetings of the Board of Directors and the Lead Director chairs the executive session of each Board meeting, reporting the results of those executive sessions to the Chairman of the Board. The Lead Director also has the authority to call meetings of the independent directors.
Leon Zazworsky, in his capacity as the Lead Director, serves as liaison between the Chief Executive Officer, the Chairman of the Board and the independent directors. As discussed in his biographical information, Mr. Zazworsky has decades of experience not only with the Park organization, but also as the owner/operator of several successful private businesses. Park’s management and Board of Directors believe he has executed and will continue to execute his Lead Director duties with the same care and concern he has brought to the Board of Directors of Park National Bank (Park’s lead subsidiary) since 1991 and to the Park Board of Directors since 2003.
The role of the Board of Directors and its committees in the oversight of risk affirms the current Board leadership structure. That is, the current leadership structure supports measured risks, yet monitors and controls them to the benefit of all shareholders.
On January 28,Effective May 1, 2019, the Board of Directors of Park announced future changes intended to bewere made to Park’s management and to the leadership and composition of the Park Board of Directors, which are described in detail under the heading “ELECTION OF DIRECTORS (Proposal 1) – Board and Executive Leadership Transition.” Such changes are intendedDirectors. Matthew R. Miller was elected to preserve the leadership structure of the Park Board of Directors for the reasons discussed above. As a result of these proposed changes and immediately following May 1, 2019, the proposed effective date for each such change, Mr. Matt Miller would serve as a director and asthe President of each of Park and Park National Bank; Mr.Bank. David L. Trautman wouldwas elected to serve as the Chairman of the Board of Directors of Park and of the Board of Directors of Park National Bank in addition to his current positions as Chief Executive Officer and a director of each of Park and Park National Bank; and Mr. DeLawder would no longer serve as Chairman of the Board of Directors of Park or Park National Bank, but would continue to serve as a director of each of Park and Park National Bank, in addition to continuing to serve as the Chief Executive Officer of each of Park and Park National Bank. C. Daniel DeLawder, who had been serving as the Chairman of the Board of Directors of each of Park and Park National Bank, ceased to serve in those capacities, but continues to serve as Chairman of the Executive Committee of the Board of Directors of each of Park and Park National Bank. Mr. DeLawder wouldhas also continuecontinued his employment with Park National Bank in a reduced capacity.
The Board of Directors believes that these proposed changes will allow for a smooth transition in Board leadership following Mr. DeLawder’s over 14-year tenure as Chairman of the Board and provide support for Mr. Matt Miller in his role as President of each of Park and Park National Bank and stability in executive leadership following Mr. Trautman’s over 14-year tenure as President of each of Park and Park National Bank, with Mr. Trautman’s continued service as Chief Executive Officer of each of Park and Park National Bank.
Leon Zazworsky serves as the Lead Director for Park, a position which he has held since 2012. Park’s management and Board of Directors believe that the Lead Director position augments Park’s strong history of shareholder-focused leadership. The Board of Directors retains the authority to modify this structure to best address Park’s unique circumstances as and when the Board deems appropriate.
The Board of Directors believes that its current leadership structure is efficient and effective for Park for the following reasons:
•The Chairman of the Board/Chief Executive Officer’s day-to-day management and operation of Park and execution of Park’s strategy, in each case with the direct assistance of the President and the Chairman of the Executive Committee (collectively with the Chairman of the Board/Chief Executive Officer, the “Executives”), provide the Executives with a comprehensive understanding of Park’s performance and strategic priorities, which is crucial for participating in discussions with the Board of Directors and executing strategy.
•The Executives, supplemented by the Lead Director, promote strategy development and execution and facilitate the flow of information between management and the Board of Directors, which are essential to effective corporate governance.
•Taken together, the Lead Director and the Executives foster clear accountability, effective decision-making and alignment on corporate strategy. The Executives and the Lead Director confer on the calendar and agendas for the meetings of the Board of Directors and the Lead Director chairs the executive session of each Board meeting, reporting the results of those executive sessions to the Chairman of the Board/Chief Executive Officer. The Lead Director also has the authority to call meetings of the independent directors.
•Leon Zazworsky, in his capacity as the Lead Director, serves as liaison between the Executives and the independent directors. As discussed in his biographical information, Mr. Zazworsky has decades of experience not only with the Park organization, but also as the owner/operator of several successful private businesses. Park’s management and the Park Board of Directors believe Mr. Zazworsky has executed and will continue to execute his Lead Director duties with the same care and concern he has brought to the Board of Directors of Park National Bank (Park’s lead subsidiary) since 1991 and to the Park Board of Directors since 2003.
The role of the Board of Directors and its committees in the oversight of risk affirms the current Board leadership structure. That is, the current leadership structure supports measured risks, yet monitors and controls them to the benefit of all shareholders.
Committees of the Board
During the 20182019 fiscal year, the Board of Directors had sixfive standing committees which held regularly scheduled meetings – the Audit Committee, the Compensation Committee, the Executive Committee, the Investment Committee, the Nominating Committee and the Risk Committee. At the meeting of the Board of Directors held on January 28, 2019, the Board of Directors determined that the duties and responsibilities of the Investment Committee overlapped those of other committees of the Board of Directors ̶– in particular,
the Audit Committee and the Risk Committee --– and eliminated the Investment Committee. The responsibilities previously included within the Investment Committee Charter will bewere assumed by the Park National Bank Board of Directors or by other committees of the Park Board of Directors.
Audit Committee
The Board of Directors has an Audit Committee which was established in accordance with Section 3(a)(58)(A) of the Exchange Act and is currently comprised of Stephen J. Kambeitz (Chair), Donna M. Alvarado, Alicia J. Hupp, Jason N. Judd, Timothy S. McLain and Robert E. O’Neill. EachO’Neill, each of Messrs. Kambeitz, McLain and O’Neill, Ms. Alvarado and Ms. Huppwhom also served as a member of the Audit Committee during the entire 20182019 fiscal year. Mr. Judd was appointed to the Audit Committee, effective January 1, 2019, the date he joined the Park Board of Directors. Upon the
recommendation of the Nominating Committee, the Board of Directors has determined that each current member of the Audit Committee qualifies as an independent director under the applicable NYSE American Rules and under Exchange Act Rule 10A-3.
Upon the recommendation of the Nominating Committee, the Board of Directors has also determined that each of Mr. Judd, Mr. Kambeitz and Mr. McLain qualifies as an “audit committee financial expert” for purposes of Item 407(d)(5) of SEC Regulation S-K, by virtue of their respective experience which is described under the caption “ELECTION OF DIRECTORS (Proposal 1).”. In addition to the qualification of each of Mr. Judd, Mr. Kambeitz and Mr. McLain as an “audit committee financial expert,” Park’sthe Park Board of Directors strongly believes that each of the current members of the Audit Committee is highly qualified to discharge the member’s duties on behalf of Park and our subsidiaries and satisfies the financial literacy requirement of the NYSE American Rules. Park’sThe Park Board of Directors also believes that each of the current members of the Audit Committee satisfies the financial sophistication requirement of the NYSE American Rules.
The Audit Committee is organized and conducts its business pursuant to a written charter adopted by the Board of Directors (the “Audit Committee Charter”). A copy of the Audit Committee Charter is posted on the “Corporate Information ̶ Governance Documents” section of the “Investor Relations” page of Park’s web sitewebsite at www.parknationalcorp.com.www.parknationalcorp.com. At least annually, the Audit Committee reviews and reassesses the adequacy of the Audit Committee Charter and recommends changes to the full Board of Directors as necessary.
The Audit Committee is responsible, among other things, for:
•overseeing the accounting and financial reporting processes of Park and our subsidiaries;
•overseeing the audits of the consolidated financial statements of Park and reviewing the annual and interim consolidated financial statements of Park (and related disclosures) with Park’s independent registered public accounting firm and Park’s management;
•appointing, compensating and overseeing the work and the independence of the independent registered public accounting firm engaged by Park for the purpose of preparing or issuing an audit report or performing related work for Park or any of our subsidiaries;
•reviewing and evaluating the experience and qualifications of the lead partner and other senior members of the audit team of Park’s independent registered public accounting firm and ensuring that all partner rotations, as required by applicable laws and regulations, are executed;
•discussing with Park’s independent registered public accounting firm the matters required to be communicated to the Audit Committee under applicable auditing standards;standards and SEC rules;
•determining hiring policies for employees or former employees of Park’s independent registered public accounting firm;
•discussing Park’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the guidelines and policies to govern the process by which risk assessment and management is undertaken;
•coordinating with the Compensation Committee, as appropriate, on compensation matters;
•appointing and determining the compensation for the Chief Auditor (the Head of the Internal Audit Department), reviewing and approving the Internal Audit Department budget, determining the compensation for all of the staff auditors, reviewing and approving the Internal Audit Procedures Manual and overseeing the work of the Internal Audit Department;
•performing an annual independent performance evaluation of Park’s Chief Auditor;
•instituting procedures for the receipt, retention and treatment of complaints received by Park or any of our subsidiaries regarding accounting, internal accounting controls or auditing matters, which procedures are outlined in Park’s Code of Business Conduct and Ethics;
•reviewing and overseeing procedures designed to identify “related person” transactions that are material to Park’s consolidated financial statements or otherwise require disclosure under any applicable laws, rules and regulations and, when appropriate, approving any such “related person” transactions, including those involving Park and/or any of our subsidiaries in which a director or executive officer of Park, or any member of his or her immediate family, has a direct or indirect interest;
•preparing the report of the Audit Committee to be integrated into Park’s annual proxy statement as well as reviewing any other information related to the duties and responsibilities of the Audit Committee required to be disclosed under applicable laws, rules and regulations;
•discussing with Park’s management Park’s processes regarding compliance with applicable laws, rules and regulations and with Park’s Code of Business Conduct and Ethics, with the Audit Committee having the authority to investigate and take any action it deems appropriate with respect to any alleged violation of Park’s Code of Business Conduct and Ethics by any of the officers or directors of Park or our subsidiaries;
•reviewing all significant regulatory examination findings requiring corrective action or relating to Park’s consolidated financial statements, internal controls or accounting policies;
•assisting the Board of Directors in the oversight of:
•the integrity of Park’s consolidated financial statements and the effectiveness of Park’s internal control over financial reporting;
•the performance of Park’s independent registered public accounting firm and Park’s Internal Audit Department;
•the independent registered public accounting firm’s qualifications and independence; and
•the legal and regulatory compliance and ethics programs established by Park’s management and the full Board of Directors, including the Code of Business Conduct and Ethics.
In addition, the Audit Committee reviews and pre-approves all audit services and permitted non-audit services provided by the independent registered public accounting firm to Park or any of our subsidiaries and ensures that the independent registered public accounting firm is not engaged to perform the specific non-audit services prohibited by law, rule or regulation. The Audit Committee will also carry out any other responsibilities delegated to the Audit Committee by the full Board of Directors.
The Audit Committee met teneleven times during the 20182019 fiscal year. The Audit Committee’s report relating to the 20182019 fiscal year begins at page 85.94.
Compensation Committee
The Board of Directors has a Compensation Committee which is currently comprised of F. William Englefield IV (Chair), Stephen J. Kambeitz, Timothy S. McLain, Julia A. Sloat and Leon Zazworsky. EachZazworsky, each of Messrs. Englefield, Kambeitz, McLain and Zazworskywhom also served as a member of the Compensation Committee during the entire 20182019 fiscal year. Ms. Sloat was appointed to the Compensation Committee, effective January 28, 2019. Upon the recommendation of the Nominating Committee, the Board of Directors has determined that each member of the Compensation Committee satisfies the independence standards for members of a compensation committee included in Section 805(c)(1) of the NYSE American Rules. In addition, each Compensation Committee member qualifies as an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and as a “non-employee director” for purposes of SEC Exchange Act Rule 16b-3. If any member of the Compensation Committee were to not qualify as a “non-employee director” or as an “outside director,” such member would be required to abstain from voting on all matters as to which such classification would be relevant.
The Compensation Committee is organized and conducts its business pursuant to a written charter adopted by the Board of Directors (the “Compensation Committee Charter”). A copy of the Compensation Committee Charter is posted on the “Corporate Information ̶ Governance Documents” section of the “Investor Relations” page of Park’s Internet web sitewebsite at www.parknationalcorp.com.www.parknationalcorp.com. At least annually, the Compensation Committee reviews and reassesses the adequacy of the Compensation Committee Charter and recommends changes to the full Board of Directors as necessary.
The Compensation Committee’s primary responsibilities include:
•periodically reviewing with Park’s management and approving the general compensation policy for the executive officers of Park and those other employees of Park and our subsidiaries whom the full Board of Directors directs or as may be required by any applicable laws, rules or regulations;
•evaluating the performance of Park’s executive officers in light of goals and objectives approved by the Compensation Committee and determining those executive officers’ compensation based on that evaluation;
•administering Park’s incentive compensation plans, equity-based plans (in particular, the Park National Corporation 2013 Long-Term Incentive Plan or the “2013 LTIP” and the Park National Corporation 2017 Long-Term Incentive Plan for Employees or the “2017 Employees LTIP”) and any other plans requiring Compensation Committee administration and approving awards as required to comply with applicable laws, rules and regulations;
•reviewing the relationship between achievement of incentive compensation goals and any accounting adjustments recommended by Park’s management and meeting with representatives of the Audit Committee, as appropriate, in making any related determinations;
•overseeing the preparation of the compensation discussion and analysis (and related disclosures) and recommending to the full Board of Directors the inclusion of such compensation discussion and analysis in the annual proxy statement of Park in accordance with applicable NYSE American Rules and applicable SEC rules;
•approving the Compensation Committee Report to be included in the annual proxy statement of Park in accordance with applicable SEC rules;
•recommending to the full Board of Directors the amount and form of compensation for directors;
•reviewing and making recommendations to the full Board of Directors with respect to incentive compensation plans and equity-based plans in accordance with applicable laws, rules and regulations;
•reviewing and approving any compensation-related matters to be considered by the shareholders at theeach annual meeting of shareholders and recommending any actions to be taken by the full Board of Directors with respect to those proposals;
•reviewing and making recommendations to the full Board of Directors regarding the frequency with which Park should submit to Park’sthe Park shareholders an advisory vote on the compensation of Park’s named executive officers, taking into account any prior shareholder advisory vote on such frequency;
•reviewing the results of any shareholder advisory vote on the compensation of Park’s named executive officers and evaluating the executive compensation policies and practices of Park and our subsidiaries in light of such advisory vote;
•annually reviewing the risks that arise from the compensation policies and practices of Park and our subsidiaries and determining whether such risks are reasonably likely to have a material adverse effect on Park;
•reviewing the regulatory compliance of compensation programs, including overseeing Park’s policies on structuring compensation programs to preserve tax deductibility, and as and when required, establishing performance goals and certifying that performance goals have been attained;
•reviewing and assessing the independence of the Compensation Committee’s compensation consultants, legal counsel and other advisers, in accordance with applicable NYSE American Rules and applicable SEC rules; and
•reviewing and evaluating any conflict of interest raised by the work performed by any compensation consultant for the Compensation Committee or Park and/or our subsidiaries and recommending any actions to be taken by Park and/or our subsidiaries.
The Compensation Committee reviews Park’s organizational structure and succession plans for Park’s executive officers with the full Board of Directors as needed. The Compensation Committee will also carry out any other responsibilities delegated to the Compensation Committee by the full Board of Directors.
The Compensation Committee has the authority to retain one or more compensation consultants to assist in the evaluation of director and executive officer compensation. The Compensation Committee has sole authority to retain and terminate any such compensation consultant, including sole authority to approve each consultant’s fees and other retention terms.
Meridian Compensation Partners, LLC (“Meridian”) has served as the Compensation Committee’s independent compensation advisor since the summer of 2016. During 2018,2019, Meridian assisted in the development of an updated Midwest Regional Peer Group and conducted a market assessment to guide 20182019 and 20192020 compensation decisions. The Compensation Committee has direct access to its compensation advisor and may engage its compensation advisor on an as needed basis for advice with respect to the amount and form of executive and director compensation. During the 20182019 fiscal year, Meridian did not provide, and during the 20192020 fiscal year, Meridian has not provided and will not provide, services to Park or our subsidiaries other than those provided to or at the request of the Compensation Committee. Please see the discussion under the heading “EXECUTIVE COMPENSATION – Compensation Discussion and Analysis – Process Used to Set Compensation for 20182019 – Role of Outside Advisors” for a detailed explanation of the consulting services rendered by Meridian.
The Compensation Committee determined that the work performed by Meridian during the 20182019 fiscal year did not raise any actual conflict of interest or compromise the independence of Meridian. Additionally, the Compensation Committee determined that Meridian qualified as independent for purposes of SEC Rule 10C‑1(b)10C-1(b)(4) and Section 805(c) of the NYSE American Rules, after considering the six factors listed in SEC Rule 10C‑1(b)10C-1(b)(4)(i) through (vi) and restated as Section 805(c)(4) in the NYSE American Rules.
The Compensation Committee most recently conducted its assessment of the independence of Meridian at the Compensation Committee’s meeting on November 19, 2018.December 3, 2019. The Compensation Committee has determined that since November 19, 2018,December 3, 2019, there have been no changes in circumstances through the date of this proxy statement which would require the Compensation Committee to change its determinations that: (i) the work performed and to be performed by Meridian had not raised and did not raise any conflict of interest or compromise the independence of Meridian; and (ii) Meridian qualified and continues to qualify as independent for purposes of SEC Rule 10C-1(b)(4) and Section 805(c) of the NYSE American Rules.
The Compensation Committee met threefive times during the 20182019 fiscal year. The compensation discussion and analysis regarding executive compensation for the 20182019 fiscal year begins at page 4041 and the Compensation Committee Report for the 20182019 fiscal year begins on page 55.61.
Executive Committee
The Board of Directors has an Executive Committee which is currently comprised of C. Daniel DeLawder (Chair), David L. Trautman (Vice Chair), F. William Englefield IV, Robert E. O’Neill and Leon Zazworsky, each of whom also served as a member of the Executive Committee during the entire 20182019 fiscal year. In addition, Matthew R. Miller serves as Secretary and a non-voting member of the Executive Committee.
The Executive Committee is organized and conducts its business pursuant to a written charter adopted by the Board of Directors (the “Executive Committee Charter”). A copy of the Executive Committee Charter is posted on the “Corporate Information ̶ Governance Documents” section of the “Investor Relations” page of Park’s web site at www.parknationalcorp.com.www.parknationalcorp.com. The Executive Committee periodically reviews and reassesses the adequacy of the Executive Committee Charter and recommends changes to the full Board of Directors as necessary.
The Executive Committee acts in place of, and on behalf of, the full Board of Directors in the intervals between meetings of the Board of Directors. The Executive Committee has all of the authority of the full Board of Directors, other than the authorityauthority: (i) to fill vacancies on the Board of Directors or in any Board committee,committee; (ii) to amend Park’s Regulations,our Regulations; (iii) that has been delegated by the full Board of Directors exclusively to one or more other Board committees,committees; (iv) that applicable law or Park’sour governing documents do not permit to be delegated to a Board committee,committee; (v) to recommend to the shareholders any action that requires shareholder approval, other than the election of directors,directors; and (vi) to approve any merger or share exchange which does not require shareholder approval.
The Executive Committee met eightten times during the 20182019 fiscal year.
Nominating Committee
The Board of Directors has a Nominating Committee which is currently comprised of Donna M. Alvarado (Chair), F. William Englefield IV, Alicia J. Hupp, Robert E. O’Neill and Leon Zazworsky, each of whom also served as a member of the Nominating Committee during the entire 20182019 fiscal year. The Board of Directors has determined that each current member of the Nominating Committee qualifies as an independent director under the applicable NYSE American Rules.
The Nominating Committee is organized and conducts its business pursuant to a written charter adopted by the Board of Directors (the “Nominating Committee Charter”). A copy of the Nominating Committee Charter is posted on the “Corporate Information ̶ Governance Documents” section of the “Investor Relations” page of Park’s Internet web sitewebsite at www.parknationalcorp.com. www.parknationalcorp.com. At least annually, the Nominating Committee reviews and reassesses the adequacy of the Nominating Committee Charter and recommends changes to the full Board of Directors as necessary.
The primary purpose of the Nominating Committee is to identify qualified candidates for election, nomination or appointment to the Board of Directors and to recommend to the full Board of Directors a slate of director nominees for each annual meeting of the Park shareholders of Park or as vacancies occur between annual meetings of the shareholders. The Nominating Committee implements the procedure for shareholders to submit recommendations for Board candidates to the Nominating Committee for consideration, with the current procedures being outlined in an exhibit to the Nominating Committee Charter. In addition, the Nominating Committee provides oversight on matters surrounding the composition and operation of the Board of Directors, including the evaluation of Board performance and processes, and makes recommendations to the full Board of Directors with respect to determinations as to the independence of directors under applicable standards and in the areas of Board committee selection, including Board committee chairpersons and committee rotation practices. At least once a year, the Nominating Committee is to review the composition and the operations and effectiveness of the full Board of Directors including the size of the Board and the collective Board performance as well as the performance of each Board committee. At least once every two years, the Nominating Committee is to review Park’s Code of Business Conduct and Ethics and recommends changes to the full Board of Directors as necessary. At least annually, the Nominating Committee is to assess and make recommendations to the full Board of Directors concerning appropriate corporate governance policies and the Nominating Committee periodically reviews and accesses Park’s compliance with applicable corporate governance requirements. The Nominating Committee will review any proposed amendments to Park’sour Articles of Incorporation or our Regulations and recommend appropriate action to the full Board of Directors. The Nominating Committee will also carry out any other responsibilities delegated to the Nominating Committee by the full Board of Directors.
The Nominating Committee met sixthree times during the 20182019 fiscal year.
Risk Committee
The Board of Directors has a Risk Committee which is currently comprised of Leon Zazworsky (Chair), Donna M. Alvarado, James R. DeRoberts, Stephen J. Kambeitz, Mark R. Ramser and Julia A. Sloat. EachSloat, each of Ms. Alvarado, Messrs. DeRoberts and Kambeitz and Ms. Sloatwhom also served as a member of the Risk Committee during the entire 20182019 fiscal year. Mr. Ramser was appointed to the Risk Committee, effective January 1, 2019, the date he joined the Park Board of Directors. Rick A. Taylor served on the Risk Committee during the 2018 fiscal year from January 1, 2018 until he retired from the Park Board of Directors on April 23, 2018.
The Risk Committee is organized and conducts its business pursuant to a written charter adopted by the Board of Directors (the “Risk Committee Charter”). A copy of the Risk Committee Charter is posted on the “Corporation Information ̶ Governance Documents” section of the “Investor Relations” page of Park’s web sitewebsite at www.parknationalcorp.com.www.parknationalcorp.com. At least annually, the Risk Committee reviews and reassesses the adequacy of the Risk Committee Charter and recommends changes to the full Board of Directors as necessary.
The Risk Committee assists the Board of Directors in monitoring management’s implementation and enforcementmaintenance of Park’s enterprise-wide risk management framework. The Risk Committee’s primary duty and responsibility is to ensure that Park has in place an appropriate enterprise-wide process to identify, assess, monitor and control Park’s credit, market, liquidity, operational, IT/IS (including cyber-security, information security and third-party risks), legal, compliance, strategic (including capital management) and reputational risks. The Risk Committee also:
•reviews and approves Park’s risk management framework;
•receives and reviews reports from Park’s Chief Risk Officer regarding Park’s risk assessment and risk profile;profile for Park and our subsidiaries;
•reviews and approves items related to Park’s Loan Review function, in particular with respect to the commercial loan portfolio;
•reviews and approves Park’s activity relative to new initiatives;
•provides oversight with respect to Park’s model risk management and third-party risk management activities;
•reviews Park’s overall compliance risk profile;
•reviews regulatory findings directed to the attention of the Board of Directors, assesses the adequacy of management’s response to material regulatory findings and monitors compliance with management’s response; and
•performs an annual independent performance evaluation of Park’s Chief Risk Officer.
The Risk Committee will also carry out any other responsibilities delegated to the Risk Committee by the full Board of Directors.
The Risk Committee met sevenfive times during the 20182019 fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of Park’sthe Park Board of Directors is currently comprised of F. William Englefield IV (Chair), Stephen J. Kambeitz, Timothy S. McLain, Julia A. Sloat and Leon Zazworsky. EachZazworsky, each of Messrs. Englefield, Kambeitz, McLain and Zazworskywhom served as a member of the Compensation Committee during the entire 2018 2019
fiscal year. Ms. Sloat was appointed to the Compensation Committee, effective January 28, 2019. All of the current members of the Compensation Committee are independent directors for purposes of the applicable NYSE American Rules and none of them is a present or past employee or officer of Park or any of our subsidiaries. During the 20182019 fiscal year and during the 20192020 fiscal year through the date of this proxy statement, none of Park’s executive officers served on the board of directors or compensation committee (or other committee serving an equivalent function) of any other entity, one of whose executive officers served on Park’sthe Park Board of Directors or Compensation Committee.
Each of Messrs. Englefield, Kambeitz, McLain and Zazworsky and Ms. Sloat as well as firms, corporations or other entities with which they are affiliated were customers of and had banking transactions (including loans and loan commitments) with Park National Bank, in the ordinary course of their respective businesses and in compliance with applicable federal and state laws and regulations. The loans to these persons were made on substantially the same terms, including the interest rate charged and collateral required, as those prevailing at the time for comparable transactions with persons not affiliated with Park or one of our subsidiaries. In addition, the loans to these persons have been, and are presently, subject to no more than a normal risk of uncollectability and present no other unfavorable features.
EXECUTIVE OFFICERS
The following areEach of the Park executive officers of Park, each of whom is elected annually and serves at the pleasure of the Park Board of Directors of Park.Directors. This following table lists each executive officer’s age as of the date of this proxy statement as well as the positions presently held by each executive officer with Park and our principal subsidiaries and his individual business experience.
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Name | Age | Positions Held with Park and Our
Principal Subsidiaries and Principal Occupation |
David L. Trautman | 5758 | Chairman of the Board since May 2019, Chief Executive Officer since January 2014, President since January 2005, a member of the Board of Directors since January 2005, President from January 2005 through April 2019, and Secretary from July 2002 to December 2013, of Park; Chairman of the Board since May 2019, Chief Executive Officer since January 2014, President since January 2005 and a member of the Board of Directors since February 2002, and President from January 2005 through April 2019, of Park National Bank. Mr. Trautman also serves as Vice Chair of the Executive Committee. Prior to his current positions,January 2005, Mr. Trautman served in executive positions with Park National Bank and then the First-Knox National Bank Division for nearlyover ten years. |
Matthew R. Miller | 41 | President since May 2019, a member of the Board of Directors since May 2019, Executive Vice President from April 2017 through April 2019, and Chief Accounting Officer and principal accounting officer from December 2012 through March 2017, of Park; President since May 2019, a member of the Board of Directors since May 2019, Executive Vice President from April 2017 through April 2019, Chief Accounting Officer from December 2012 through March 2017, and Vice President of Accounting from April 2009 to December 2012, of Park National Bank. |
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Name | Age | Positions Held with Park and Our
Principal Subsidiaries and Principal Occupation |
C. Daniel DeLawder | 69 | Chairman of the Board since January 2005, a member of the Board of Directors since April 1994, Chief Executive Officer from January 1999 to December 2013, and President from 1994 to December 2004, of Park; Chairman of the Board since January 2005, a member of the Board of Directors since 1992, Chief Executive Officer from January 1999 to December 2013, President from 1993 to December 2004 and Executive Vice President from 1992 to 1993, of Park National Bank. Mr. DeLawder also serves as the Chair of the Executive Committee. Prior to the foregoing, Mr. DeLawder also served in executive positions with the Fairfield National Bank Division for seven years. Mr. DeLawder served as a director of the Federal Reserve Bank of Cleveland from 2007 to 2012, including as Chair of the Operations/Resources Committee from 2009 to 2012. He also served as a member of the Board of Trustees of Ohio University, Athens, Ohio, from 2000 to 2009 (for the last two years, also serving as Chairman of the Board of Trustees). Mr. DeLawder also served on the Ohio University Capital Campaign Steering Committee from 2010 through 2015. |
Brady T. Burt | 4647 | Secretary since January 2014, Treasurer since April 2013, Chief Financial Officer since December 2012 and Chief Accounting Officer from April 2007 to December 2012, of Park; Senior Vice President and Chief Financial Officer since December 2012 and Vice President and Chief Accounting Officer from April 2007 to December 2012, of Park National Bank. Mr. Burt has served as a director of the Federal Home Loan Bank of Cincinnati since January 1, 2017. |
C. Daniel DeLawder | 70 | Chairman of the Board from January 2005 through April 2019, a member of the Board of Directors since April 1994, Chief Executive Officer from January 1999 through December 2013, and President from April 1994 to December 2004, of Park; Chairman of the Board from January 2005 through April 2019, a member of the Board of Directors since April 1992, Chief Executive Officer from January 1999 through December 2013, President from April 1993 through December 2004 and Executive Vice President from March1992 to April 1993, of Park National Bank. Mr. DeLawder also serves as the Chair of the Executive Committee. Prior to the foregoing, Mr. DeLawder served in executive positions with the Fairfield National Bank Division for seven years. |
VOTE ON APPROVAL OF NON-BINDING ADVISORY RESOLUTION ON TO APPROVE
THE COMPENSATION OF PARK’S NAMED EXECUTIVE OFFICERS
(Proposal 2)
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and corresponding SEC rules enable Park’sthe Park shareholders to vote to approve, on an advisory and non-binding basis, the compensation of Park’s named executive officers as disclosed in this proxy statement in accordance with SEC rules. Accordingly, in accordance with Exchange Act Rule 14a-21(a), Park is asking shareholders to approve the following advisory resolution at the Annual Meeting:
“RESOLVED, that the shareholders of Park National Corporation (“Park”) approve, on an advisory basis, the compensation of Park’s named executive officers as disclosed in Park’s proxy statement for its 20192020 Annual Meeting of Shareholders pursuant to Item 402 of SEC Regulation S-K, including in the “Compensation Discussion and Analysis,” the “Summary Compensation Table for 2018,2019,” and the related executive compensation tables, notes and narratives.”
The Board of Directors believes that Park’s compensation policies and procedures as well as Park’s executive compensation programs, which are reviewed and approved annually by the Compensation Committee, with advice from itsthe Compensation Committee’s independent compensation consultant, are effective in aligning the compensation of Park’s named executive officers with Park’s short-term goals and long-term success and fostering the alignment of the interests of Park’s key executives with the interests of Park’sthe Park shareholders. Park’s incentive programs are based on Park’s performance in comparison to Park’s peer financial services holding companies. Park’sThe Board of Directors believes that Park’s executive compensation programs are
reasonable in comparison both to those peer financial services holding companies and to Park’s performance during the 20182019 fiscal year.
Shareholders are urged to read the section of this proxy statement captioned “EXECUTIVE COMPENSATION – Compensation Discussion and Analysis” which describes in detail how Park’s compensation policies and procedures and executive compensation program achieve Park’s compensation objectives.
The Board of Directors believes that Park’s compensation policies and practices do not threaten the value of Park or the investments of Park’sthe Park shareholders or create incentives to engage in behaviors or business activities that are reasonably likely to have a material adverse impact on Park. The Board of Directors further believes that Park’s culture focuses executives on sound risk management and appropriately rewards executives for performance.
Similar “Say on Pay” proposals have been approved by a significant majority of the common shares voted at each of Park’sthe last teneleven annual meetings of the Park shareholders, including those held in 2009, 2010, 2011 and 2012, when the “Say on Pay” proposal was required to be submitted to Park’sPark shareholders in connection with Park’s participation in the U.S.United States Treasury’s TARP Capital Purchase Program. Park exited the TARP Capital Purchase Program on April 25, 2012.
The vote on the advisory resolution relates to the compensation of Park’s named executive officers as a whole. Because your vote is advisory, the outcome of the vote will not: (i) be binding upon Park’sthe Park Board of Directors or the Compensation Committee with respect to future executive compensation decisions, including those relating to Park’s named executive officers, or otherwise; (ii) overrule any decision made by Park’sthe Park Board of Directors or the Compensation Committee; or (iii) create or imply any additional fiduciary duty by Park’sthe Park Board of Directors or the Compensation Committee. However, the Compensation Committee expects to take into account the outcome of the advisory vote when considering future executive compensation arrangements. The next advisory vote to approve the compensation of Park’s named executive officers will occur at the 20202021 Annual Meeting of Shareholders.Meeting.
Recommendation and Vote Required
THE COMPENSATION COMMITTEE AND THE FULL BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT THE PARK SHAREHOLDERS OF PARK VOTE “FOR” THE APPROVAL OF THE NON-BINDING ADVISORY RESOLUTION TO APPROVE THE COMPENSATION OF PARK’S NAMED EXECUTIVE OFFICERS.
The affirmative vote of a majority of the common shares represented at the Annual Meeting, in person or by proxy, and entitled to vote on the proposal is required to approve the non-binding advisory resolution to approve the compensation paid to Park’s named executive officers as disclosed in this proxy statement. The effect of an abstention is the same as a vote “AGAINST” the proposal. Broker non-votes will not be counted in determining whether the proposal has been approved.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Summary
The Compensation Committee determines the compensation of Park’s named executive officers (“NEOs”(also known as the “NEOs”), consisting of the following individuals for 2018:2019:
•David L. Trautman, Chairman of the Board and Chief Executive Officer (the “CEO”“Chairman/CEO”)/President
C. Daniel DeLawder, Chairman of the Board (the “Chairman”)
•Brady T. Burt, Chief Financial Officer, Secretary and Treasurer (the “CFO”)
•Mathew R. Miller, President (the “President”)
•C. Daniel DeLawder, Chairman of the Executive Committee of the Board of Directors (the “Executive Committee Chairman”)
Effective May 1, 2019, changes were made to Park’s management and to the leadership of the Park Board of Directors. Mr. Miller was elected to serve as the President of each of Park and Park National Bank. Mr. Trautman was elected to serve as the Chairman of the Board of Directors of each of Park and Park National Bank, in addition to continuing to serve as the Chief Executive Officer of each of Park and Park National Bank. Mr. DeLawder, who had been serving as the Chairman of the Board of Directors of each of Park and Park National Bank, ceased to serve in those capacities, but continues to serve as Chairman of the Executive Committee of the Board of Directors of each of Park and Park National Bank and an executive officer of Park. Mr. DeLawder also continues his employment with Park National Bank in a reduced capacity.
Performance Highlights
Park continues to be a high performer and the results for 20182019 continued that trend despite the challenges of operating primarily in a relatively low growth market like Ohio and the challenges for the financial services industry in general. However, management believes that Park’s new markets in North Carolina, South Carolina and Louisville, Kentucky put Park in a good position for growth in the future. Park achieved the results summarized below for 2019, which include financial information presented as reported under United States generally accepted accounting principles (“U.S. GAAP”) and on an “adjusted” basis. The adjusted results reflect Park’s performance excluding (i) the merger-related expenses and purchase accounting accretion related to the acquisition of NewDominion Bank and the merger with CAB Financial Corporation (and related acquisition of Carolina Alliance Bank); (ii) collections of payments on former Vision Bank loan relationships now held by Park’s subsidiary SE Property Holdings, LLC (“SEPH”) and management and consulting expenses related thereto; and (iii) other unusually large items whose outsized impact was believed to be infrequent or short-term in nature. Management as well as the Park Board of Directors (including the Compensation Committee and the Executive Committee) felt it was important to consider the adjusted results, after excluding merger-related expenses, SEPH recoveries and related expenses and other one-time/non-recurring items, when considering the incentive compensation for the NEOs due to the long-term benefits of acquisitions to Park and the Park shareholders.
Park achieved the following results:results for 2019 and 2018 on an adjusted basis:
•Net income increased modestly by 31%$0.6 million (from $84.2$104.9 million for 20172018 to $110.4$105.5 million for 2018)2019).
•Return on average assets (“ROAA”) increaseddeclined to 1.45%1.24% for 20182019 from 1.09%1.38% for 2017.2018.
•Return on average common equity (“ROAE”) increaseddeclined to 14.08%11.44% for 2018 versus 11.15%2019 from 13.38% for 2017.2018.
•Return on average tangible common equity (“ROATE”) increaseddeclined to 16.05%13.81% for 20182019 from 12.33%15.26% for 2017.2018. ROATE is calculated by dividing net income for the applicable year by average tangible equity (which excludes the impact of average goodwill and other intangibles on average shareholders’ equity) during such year. Average goodwill and other intangibles were $158.2 million for 2019 and $96.4 million for 2018 and $72.3 million for 2017.2018.
•Park maintained strong capital and sustainedcontinued its long history of paying a consistent levelconsistently competitive dividend, increasing the amount of the dividend from the prior year. Park declared dividends paid forin the last eleven years, while many financial services holding companies curtailed or eliminated dividends during at least a portionaggregate amount of that period. In fact,$4.24 per common share in 2019, compared to the aggregate amount of $4.07 per common share in 2018 – an increase of 4.2%. Park had increased the aggregate amount of dividends declared in 2018 by 8% from those declared in 2017.
On a relative basis, Park’s results continued to exceed the median of the profitability measuresROAE and approximated the median of the ROAA and ROAE for the Midwest Regional Compensation Peer Group (our compensation peer group identified in the table which follows the table immediately below)tables on page 45) as well as a broader Industry Index of financial services holding companies in the United States with assets of $3 billion to $10 billion (the “$3 billion to $10 billion Industry Index”). The $3 billion to $10 billion Industry Index was used to measure performance for our long-term incentive performance-based restricted stock units (“PBRSUs”) granted in 2018 and prior years. Beginning with theThe PBRSU awards granted effective on January 1, 2019 we will useused the Midwest Regional Compensation Peer Group to measure performance for our PBRSUs. However, the Compensation Committee determined that the PBRSUs granted effective on January 1, 2020 would revert back to the historical comparison and will use the $3 billion to $10 billion Industry Index to measure performance for the PBRSUs. Park’s performance on a reported U.S. GAAP basis and on an adjusted basis is compared to the two comparator groups in the following table:
tables:
| | | For the Year Ended December 31, 2018 | For the Year Ended December 31, 2017 | |
Reported U.S. GAAP Financial Performance | | Reported U.S. GAAP Financial Performance | For the Year Ended December 31, 2019 | | For the Year Ended December 31, 2018 | |
| Park | Midwest Regional Compensation Peer Group Median | $3 Billion to $10 Billion Industry Index | Park | Midwest Regional Compensation Peer Group Median | $3 Billion to $10 Billion Industry Index |
| Park | | Midwest Regional Compensation Peer Group Median | | $3 Billion to $10 Billion Industry Index Median(1) | | Park | | Midwest Regional Compensation Peer Group Median | | $3 Billion to $10 Billion Industry Index Median | |
ROAA | 1.45 | % | 1.37 | % | 1.22 | % | 1.09 | % | 0.99 | % | 0.96 | % | ROAA | 1.21 | % | 1.31 | % | 1.17 | % | 1.45 | % | 1.37 | % | 1.22 | % |
ROAE | 14.08 | % | 10.97 | % | 10.76 | % | 11.15 | % | 8.48 | % | 8.83 | % | ROAE | 11.14 | % | 10.32 | % | 10.14 | % | 14.08 | % | 10.97 | % | 10.76 | % |
Net Interest Margin | 3.84 | % | 3.58 | % | 3.61 | % | 3.48 | % | 3.57 | % | 3.58 | % | Net Interest Margin | 3.89 | % | 3.70 | % | 3.53 | % | 3.84 | % | 3.58 | % | 3.61 | % |
Other Fee Income/Average Total Assets | 1.33 | % | 1.07 | % | 0.83 | % | 1.04 | % | 1.14 | % | 0.89 | % | Other Fee Income/Average Total Assets | 1.15 | % | 1.06 | % | 0.83 | % | 1.33 | % | 1.07 | % | 0.83 | % |
Other Expenses/Average Total Assets* | 3.00 | % | 2.66 | % | 2.56 | % | 2.55 | % | 2.67 | % | 2.56 | % | |
Efficiency Ratio** | 61.68 | % | 56.67 | % | 59.71 | % | 60.62 | % | 58.66 | % | 60.46 | % | |
Other Expenses/Average Total Assets(2) | | Other Expenses/Average Total Assets(2) | 3.12 | % | 2.72 | % | 2.51 | % | 3.00 | % | 2.66 | % | 2.56 | % |
Efficiency Ratio(3) | | Efficiency Ratio(3) | 66.35 | % | 56.82 | % | 58.48 | % | 61.68 | % | 56.67 | % | 59.71 | % |
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*(1) The $3 billion to $10 billion Industry Index results excluded corporations classified for federal income tax purposes as “S corporations,” due to the lack of comparability of their financial results. For 2019, this change was made to better compare financial results. 2018 results for the $3 billion to $10 billion Industry Index were not adjusted to exclude corporations classified as “S corporations.”
(2) Lower is better
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** | Lower is better. Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Additional information about the calculation of this measure can be found in “Table 40 – Consolidated Five-Year Selected Financial Data” and the accompanying disclosure in the section of Park’s 2018 Annual Report captioned “MANAGEMENT’S DISCUSSION AND ANALYSIS” and incorporated by reference into ITEM 6. SELECTED FINANCIAL DATA of Park’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2018. |
(3) Lower is better. The efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Additional information about the calculation of this measure can be found in the “Consolidated Five-Year Selected Financial Data” table included in “ITEM 6. SELECTED FINANCIAL DATA” of Park’s 2019 Form 10-K.
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Adjusted Financial Performance(1) | For the Year Ended December 31, 2019 | | | | | | For the Year Ended December 31, 2018 | | | | | |
| Park | | Midwest Regional Compensation Peer Group Median | | $3 Billion to $10 Billion Industry Index Median | | Park | | Midwest Regional Compensation Peer Group Median | | $3 Billion to $10 Billion Industry Index Median(2) | |
ROAA | 1.24 | % | 1.31 | % | 1.17 | % | 1.38 | % | 1.37 | % | 1.22 | % |
ROAE | 11.44 | % | 10.32 | % | 10.14 | % | 13.38 | % | 10.97 | % | 10.76 | % |
Net Interest Margin | 3.81 | % | 3.70 | % | 3.53 | % | 3.77 | % | 3.58 | % | 3.61 | % |
Other Fee Income/Average Total Assets | 1.15 | % | 1.06 | % | 0.83 | % | 1.20 | % | 1.07 | % | 0.83 | % |
Other Expenses/Average Total Assets(3) | 2.97 | % | 2.72 | % | 2.51 | % | 2.89 | % | 2.66 | % | 2.56 | % |
Efficiency Ratio(4) | 64.19 | % | 56.82 | % | 58.48 | % | 61.82 | % | 56.67 | % | 59.71 | % |
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(1) Park’s adjusted financial performance excludes the impact of certain revenue, expense and tax items that impact the comparability of financial results. Additional information related to Park’s adjusted financial performance can be found in “Table 26 – Items impacting comparability” included in “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of Park’s 2019 Form 10-K.
(2) The $3 billion to $10 billion Industry Index results excluded corporations classified for federal income tax purposes as “S corporations,” due to the lack of comparability of their financial results.
(3) Lower is better.
(4) Lower is better. The efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Additional information about the calculation of this measure can be found in the “Consolidated Five-Year Selected Financial Data” table included in “ITEM 6. SELECTED FINANCIAL DATA” of Park’s 2019 Form 10-K.
By most measures, Park’s performance in 20182019 continued to exceed the median results of not only the Midwest Regional Compensation Peer Group but also the median results of all other financial services holding companies in the $3 billion to $10 billion Industry Index (used(historically used for PBRSUs). As of December 31, 2018,2019, there were 154 financial services holding companies in the $3 billion to $10 billion Industry Index and they are identified in Appendix A to this proxy statement.
The financial services holding companies included in the Midwest Regional Compensation Peer Group for purposes of determining compensationthe base salaries of the NEOs for 20182019 and the performance criteria for the PBRSUs granted to the NEOs on January 1, 2019 are identified in the following table. They reflectAt the time these determinations were made, the financial services holding companies identified in the following table were the Midwest financial services holding companies positioningwith asset sizes that positioned Park at approximately the median:
Park’s executive compensation program includes a number of features that we believe reflect best practices and promote the interests of shareholders: