Park National Corporation (Name of Registrant as Specified In Its Charter) (Name of Registrant as Specified In Its Charter)
| | | | (Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box): ☑ | | | | | | | | | þ | | No fee required | o | | | | | | | ☐ | | | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11 |
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TABLE OF CONTENTS
PARK NATIONAL CORPORATION 50 North Third Street
Post Office Box 3500
Newark, Ohio 43058-3500
(740) 349-8451
www.parknationalcorp.com NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On Monday, April 27, 202025, 2022 Dear Fellow Shareholders: The 2022 Annual Meeting of Shareholders (the “Annual Meeting”) of Park National Corporation (“Park”) will be held at the offices of The Park National Bank, 50 North Third Street, Newark, Ohio 43055, on Monday, April 27, 2020,25, 2022, at 2:00 p.m., Eastern Daylight Saving Time,Time. This year’s Annual Meeting will be a virtual meeting of shareholders which means that you will be able to participate in the Annual Meeting, vote and submit your questions during the Annual Meeting via live webcast by visiting www.virtualshareholdermeeting.com/PRK2022. You will not be able to attend the Annual Meeting in person. The Annual Meeting is being held for the following purposes: 1.To elect four1.
| To elect five directors, each to serve for a term of three years to expire at the Annual Meeting of Shareholders to be held in 2025. |
2.
| To consider and vote upon a non-binding advisory resolution to approve the compensation of Park’s named executive officers as disclosed in the accompanying proxy statement for the Annual Meeting. |
3.
| To consider and vote upon a proposal to ratify the appointment of Crowe LLP as the independent registered public accounting firm of Park for the fiscal year ending December 31, 2022. |
4.
| To consider and vote upon a proposal to adopt an amendment to Park’s Articles of Incorporation and related amendments to Park’s Regulations to eliminate cumulative voting rights in the election of Park directors. |
5.
| To transact any other business that properly comes before the 2022 Annual Meeting. |
The proxy statement describes each of the agenda items in detail. As of the date of this Notice of Annual Meeting of Shareholders, toPark has not received notice of any other matters that properly may be held in 2023. 2.To consider and vote upon a non-binding advisory resolution to approve the compensation of Park’s named executive officers as disclosed in the accompanying proxy statement forpresented at the Annual Meeting.
3.To consider and vote upon a proposal to ratify the appointment of Crowe LLP as the independent registered public accounting firm of Park for the fiscal year ending December 31, 2020.
4.To transact any other business that properly comes before the 2020 Annual Meeting. The Park Board of Directors is not aware of any other business to come before the Annual Meeting.
If you were a holderOnly shareholders of record of common shares of Park at the close of business on February 28, 2020, you will be2022, the date established by the Board of Directors as the record date, are entitled to receive notice of, and to vote in person or by proxy at, the Annual Meeting.
You are cordially invited Any shareholder can listen to attend the Annual Meeting. Your vote is important, regardless of the number of common shares you own. Whether or not you plan to attendand participate in the Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/PRK2022. To participate in person, it is important thatand vote at the Annual Meeting, you will need the unique 16-digit control number (printed in the box marked with the arrow) on your common shares be represented. Please complete, sign, date and return yourNotice of Internet Availability of Proxy Materials or proxy card (if you received or requested a paper copycopies of theour proxy materials formaterials). Instructions on how to connect to and participate in the Annual Meeting)Meeting, including how to demonstrate proof of ownership of Park common shares, are posted at www.virtualshareholdermeeting.com/PRK2022.
Even if you plan to participate in the virtual Annual Meeting, we urge you to vote as promptlysoon as possible. Alternatively, you may transmit your voting instructions electronically,possible by telephone, by mail or over the Internet as described in the accompanying proxy statement. Returning a proxy card by mail or transmitting your voting instructions by telephone or over the Internet does not deprive you of your right to attend the Annual Meeting and to vote your common shares in person in the manner described in the accompanying proxy statement.
To obtain directions to the Annual Meeting and vote in person, please call Lacie Priest at (740) 349-0428.
| | | | | |
| | | By Order of the Board of Directors, |
| | | | | | March 9, 2020[•] , 2022 | | | BRADY T. BURT
Chief Financial Officer, Secretary and Treasurer |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS OF PARK NATIONAL CORPORATION
TO BE HELD ON APRIL 25, 2022 TABLE OF CONTENTS This Notice of Annual Meeting of Shareholders, our proxy statement and our 2021 Annual Report, together with our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, are available at
www.proxyvote.com or through the “Corporate Information – Document Highlights” section of the “Investor Relations” page of our website at www.investor.parknationalcorp.com. TABLE OF CONTENTS TABLE OF CONTENTS
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| | IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS OF PARK NATIONAL CORPORATION
TO BE HELD ON APRIL 27, 2020 | | | |
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| This Notice of Annual Meeting of Shareholders, our proxy statement (which describes in detail each of the matters to be considered at the Annual Meeting) and our 2019 Annual Report, together with our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, are available at www.proxyvote.com or through the “Corporate Information – Document Highlights” section of the “Investor Relations” page of our website at www.parknationalcorp.com.GENERAL INFORMATION | | | |
| | | | | | GENERAL INFORMATION | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Submitting Voting Instructions via the Internet or by Telephone | | | | Voting in Person | | How do I vote if my common shares are held through the Park National Corporation Employees’Employees Stock Ownership Plan? | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TABLE OF CONTENTS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2019 | | | | | | | | | | | | 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Compensation-Based Split-Dollar Agreements | | | | Other Potential Payouts | | | EQUITY COMPENSATION PLAN INFORMATION | | | |
| | | | | | DIRECTOR COMPENSATION | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TABLE OF CONTENTS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FUTURE ELECTRONIC ACCESS TO PROXY MATERIALS AND ANNUAL REPORT | | | | OTHER MATTERS | | | | | | APPENDIX A:A: FINANCIAL SERVICES/BANK HOLDING COMPANIES INCLUDED IN $3 BILLION TO $10 BILLION INDUSTRY INDEX | | | | | | | | | | | |
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TABLE OF CONTENTS 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 9, 2020[•], 2022 ANNUAL MEETING OF SHAREHOLDERS
To Be Held On April 27, 202025, 2022
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of Park National Corporation (“Park”) for use at the 2022 Annual Meeting of Shareholders (the “Annual Meeting” or the “2020 Annual Meeting”) to be held on Monday, April 27, 2020,25, 2022, at 2:00 p.m., Eastern Daylight Saving Time.Time (the “Annual Meeting” or the “2022 Annual Meeting”). The Annual Meeting will be held ata virtual meeting, which means that you will be able to participate in the offices of The Park National Bank, 50 North Third Street, Newark, Ohio 43055.Annual Meeting, vote and submit your questions during the Annual Meeting via live webcast by visiting www.virtualshareholdermeeting.com/PRK2022. This proxy statement summarizes information that you will need in order to vote. Availability of Proxy Materials On or about March 9, 2020,[•], 2022, we began distributing the Notice of Annual Meeting of Shareholders, this proxy statement, the form of proxy and our 20192021 Annual Report, together with our Annual Report on Form 10-K (our “2021 Form 10-K”) for the fiscal year ended December 31, 2019 (our “2019 Form 10-K”2021 (the “2021 fiscal year”), 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 “Notice of Internet Availability”) that explains how to access our proxy materials overon 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.one by using one of the methods described in the Notice of Internet Availability. Copies of our 20192021 Form 10-K may be obtained at www.proxyvote.com or through the “Corporate Information – Document Highlights” section of the “Investor Relations” page of our website at www.investor.parknationalcorp.comwww.parknationalcorp.com. You can also obtain a paper copy of our 20192021 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 holders 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 and our 20192021 Annual Report, together with our 20192021 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. Registered holders of common shares who share an address and would like to receive a separate copy of the Notice of Internet Availability or a separate copy of the Notice of Annual Meeting of Shareholders, this proxy statement and our 20192021 Annual Report, together with our 20192021 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 Shareholder Services, by: e-mailing shareholderservices@parknationalbank.com; TABLE OF CONTENTS calling (800) 837-5266, ext. 5208,5208; or forwarding a written request addressed to the First-KnoxPark National Bank, Division,Shareholder Services, Attention: Debbie Daniels, 1 South Main Street, P.O. Box 1270, One South Main Street, Mount Vernon, Ohio 43050-1270. Promptly upon receipt of such a request, a separate copy of the Notice of Internet Availability or a separate copy of the Notice of Annual Meeting of Shareholders, this proxy statement and our 20192021 Annual Report, together with our 20192021 Form 10-K, as applicable, will be sent. By contacting the First-KnoxPark National Bank, Division,Shareholder Services, 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 or notices of internet availability of proxy materials, as applicable, in the future; or (ii) request delivery of a single copy of annual reports to shareholders, proxy statements or notices of internet availability of 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. TABLE OF CONTENTS Who can vote at the Annual Meeting? Only holders of common shares of record at the close of business on February 28, 2020,2022, or such shareholders’ proxies, are entitled to receive notice of, and to vote at, the Annual Meeting. At the close of business on February 28, 2020,2022, there were 16,270,436[•] common shares outstanding and entitled to vote. Other than the common shares, there are no voting securities of Park outstanding. All voting at the Annual Meeting will be governed by our Articles of Incorporation, our Regulations and the General Corporation Law of the State of Ohio. Each holder of common shares is entitled to one vote for each common share held on February 28, 2020.2022. 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 25, 2020.23, 2022. 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. How do I attend and participate in the Annual Meeting? We will be hosting the Annual Meeting live via the Internet. You will not be able to attend the Annual Meeting in person. Any shareholder can listen to and participate in the Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/PRK2022. The webcast will start at 2:00 p.m., Eastern Daylight Saving Time, on April 25, 2022. Shareholders of record may vote and submit questions while connected to the Annual Meeting on the Internet. Instructions on how to connect and participate in the Annual Meeting, including how to demonstrate proof of ownership of Park common shares, are posted at www.virtualshareholdermeeting.com/PRK2022. If you do not have your 16-digit control number that is printed in the box marked by the arrow on your Notice of Internet Availability or your proxy card (if you received or requested a printed copy of our proxy materials), you will only be able to listen to the Annual Meeting. We recommend that you log in at least 15 minutes before the Annual Meeting to ensure ample time to complete the check-in procedures. A replay of the Annual Meeting audio webcast will be available on our website for approximately one year following the Annual Meeting. You do not need to attend the Annual Meeting to vote. Even if you plan to attend the Annual Meeting, please submit your vote in advance as instructed in this proxy statement. What is a Notice of Internet Availability? In accordance with rules adopted by the SEC,Securities and Exchange Commission (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 20192021 Annual
Report, together with our 20192021 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 theour proxy materials unless they request them. A Notice of Internet Availability that provides instructions for accessing our proxy materials over the Internet was mailed directly to some of our registered shareholders. The Notice of Internet Availability also provides instructions regarding how registered shareholders may vote their common shares on the Internet. 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.materials and make your request prior to April 11, 2022. 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 ourPark common shares to the website where they can access our proxy materials will be forwarded to some beneficial shareholders by the brokerage firm, bankbroker, financial institution or other holder of TABLE OF CONTENTS record that is considered the registered ownershareholder with respect to the common shares of such beneficial shareholders. Such brokerage firm, bankbroker, financial institution or other holder of record will also provide these beneficial owners of ourPark 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, 2020,2022, your common shares were registered directly in your name with our transfer agent, The Park National Bank, you are considered a holder of record with respect to those common shares, and the Notice of Internet Availability or proxy materials were sent directly to you. As a holder of record, you may vote your common shares electronically at the Annual Meeting or by proxy. If, at the close of business on February 28, 2022, your common shares were held in an account at a brokerage firm, bankbroker, financial institution 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, financial institution or other nominee how to vote your common shares following the instructions provided by your broker.broker, financial institution or other nominee. How do I vote?vote my common shares?YourIf you are a registered shareholder (i.e., you hold your common shares of record), you may be voted byvote your common shares using one of the following methods:methods (please also see the information provided above and below concerning the difference in how to vote if you hold common shares beneficially through a broker, financial institution or other nominee, instead of as the registered holder – beneficial holders should follow the voting instructions provided by their respective nominees):
Before the Date of the Annual Meeting:• Go to by traditional paperwww.proxyvote.com or scan the QR Barcode on your proxy card (if you received or requested paper copies of our proxy materials); •by submittingYou can use the Internet 24 hours a day, seven days a week, to transmit your voting instructions via the website identifiedand for electronic delivery of information up until 11:59 p.m., Eastern Daylight Saving Time, on April 24, 2022. Have your Notice of Internet Availability or on your proxy card (if you received or requested paper copies of our proxy materials);
•by submitting voting instructions via the website identified in the e-mail sent to you if you registered for electronic delivery of our proxy materials;
•by submitting voting instructions by telephone via the telephone number identified on your Notice of Internet Availability or on your proxy 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 (if you received or requested a paperprinted copy of our proxy materials). If in hand when you have registered foraccess the website and follow the instructions to obtain your records and to create an electronic delivery of proxy materials forvoting instruction form.
During the Annual Meeting, youMeeting: Go to www.virtualshareholdermeeting.com/PRK2022 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 forms 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 and later decide to attend the Annual Meeting you may revoke your previously-submitted voting instructions and vote in person at the Annual Meeting. The deadline for submitting voting instructions via the Internet and vote during the Annual Meeting. Have the information printed in the box marked by the arrow on your Notice of Internet Availability or byyour proxy card (if you received or requested a printed copy of our proxy materials) available and follow the instructions.
| • | Vote By Telephone. Call 1-800-690-6903. |
You can use any touch-tone telephone as a shareholder of record isto transmit your voting instructions up until 11:59 p.m., Eastern Daylight Saving Time, on April 26, 2020. For shareholders whose common shares are registered in the name24, 2022. Have your Notice of a broker, a financial institutionInternet Availability 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 paperprinted copy of our proxy materials), or in hand when you may vote by completing a ballot, which will be availablecall and follow the instructions.
| • | By mail. If you received a printed copy of our proxy materials, you may submit your vote by filling in, signing and dating your proxy card and returning it in the postage-paid envelope to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717. Sign your name exactly as it appears on the proxy card. Proxy cards submitted by mail must be received no later than April 24, 2022 to be voted at the Annual Meeting. |
TABLE OF CONTENTS If, prior to the Annual Meeting, you vote via the Internet or by telephone, your electronic vote authorizes the named proxy holders in the same manner as if you signed, dated and returned a proxy card. If, prior to the Annual Meeting, you vote via the Internet or by telephone, do not return a proxy card unless you intend to revoke your previously submitted proxy. If I am a shareholder holding common shares in “street name,” how do I vote? If you hold your common shares in “street name” throughname,” you should have received a notice of internet availability of proxy materials or voting instructions from the broker, a financial institution or anotherother nominee then that nominee is considered the shareholder of record for voting purposes and will give you instructions for votingholding 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. Except in the case of “routine” agenda items, your nominee may only vote the common shares held 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 mustYou should follow the instructions in the notice of internet availability of proxy materials or voting 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 youin order to instruct your broker, financial institution or other nominee on how to vote your common shares. The availability of telephone and Internet voting will depend on behalfthe voting process of suchyour broker, financial institution or other nominee. The account statement or letter must show that you wereCommon shares held beneficially may not be voted by the direct or indirect beneficial owner of Park common shares on February 28, 2020, the record date for voting atduring the Annual Meeting.
How do I vote if my common shares are held through the Park National Corporation Employees’Employees Stock Ownership Plan? If you participate in the Park National Corporation Employees’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 our proxy materials or a Notice of Internet Availability or our proxy materials in the mail, an 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 or our proxy materials are sent to the other Park shareholders. If you are enrolled in this electronic delivery service and wish to receive paper copies of our 20192021 Annual Report, together with our 20192021 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 Shareholder Services, by: e-mailing shareholderservices@parknationalbank.com; calling (800) 837-5266, ext. 5208,5208; or forwarding a written request addressed to the First-KnoxPark National Bank, Division,Shareholder Services, Attention: Debbie Daniels, 1 South Main Street, 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. How will my common shares be voted? Those common shares represented by properly-authenticated Internet or telephone voting instructionsSubject to revocation, all forms of proxy that are submitted prior to the deadline for doing so or a properly-executed proxy card (if youproperly completed and timely received or requested a paper copy of the proxy materials), and in each case not subsequently revoked, will be voted in accordance with yourthe instructions by your “proxies” (the individuals named on your votingcontained in the forms of proxy. If no instructions or proxy card). If you timely submit your voting instructions via the Internet or by telephone or submit a valid proxy card 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 the Park Board of Directors, exceptare given (except in the case of broker non-votes, where applicable,non-votes), the persons named as follows:proxy holders will vote the common shares in accordance with the recommendations of the Park Board of Directors. The Board of Directors’ recommendations are set forth together with the description of each proposal in this proxy statement. In summary, the Board of Directors recommends a vote:
•“FOR”FOR” the election as Park directors of the nominees identified below under the heading “ELECTION OF DIRECTORS (Proposal 1)”; •“FOR”FOR” the non-binding advisory resolution to approve the compensation of Park’s named executive officers as disclosed in this proxy statement; and •“FOR”FOR” the ratification of the appointment of Crowe LLP as Park’s independent registered public accounting firm for the fiscal year ending December 31, 2020.2022; and “FOR” the adoption of an amendment to Park’s Articles of Incorporation and related amendments to Park’s Regulations to eliminate cumulative voting rights in the election of Park directors. TABLE OF CONTENTS No appraisal or dissenters’ rights exist for any action proposed to be taken at the Annual Meeting.Meeting. If any other matters are properly presented for voting at the Annual Meeting, the individuals appointed as proxiesproxy holders will vote on those matters, to the extent permitted by applicable law, in accordance with their best judgment.
How do I revoke or change or revokemy vote after submitting 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. If you are a registered shareholder, you may revoke or change your proxyvote at any time before it is actually exercisedthe final vote at the Annual Meeting by: •filingdelivering a written notice of revocation withto the Secretary of Park at 51 North Third Street, Newark, Ohio 43055, which mustto be received prior to the Annual Meeting;no later than April 24, 2022;
•executingsigning and returning a later-datednew proxy card (if youwith a later date – only your latest completed, signed and dated proxy card received by April 24, 2022, will be counted;
submitting a later-dated vote by telephone or requested a paper copy ofvia the proxy materials), which must be received prior to the Annual Meeting; •accessing the designated Internet website prior to the deadline for transmitting– only your latest telephone or Internet voting instructions electronically;received by 11:59 p.m., Eastern Daylight Saving Time, on April 24, 2022, will be counted; or
•using the designated toll-free telephone number prior to the deadline for transmitting voting instructions electronically; or
•attendingparticipating in the Annual Meeting live via the Internet and giving notice of revocation in person.voting again.
Attendance at the Annual Meeting will not, by itself, revoke your proxy. The last-dated voting instructions or proxy card you submit (by any means) will supersede all previously-submitted voting 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 contact the broker, financial institution or other nominee and follow the instructions provided by yourthe broker, financial institution or other nominee to revoke or change your vote.
If I vote in advance, can I still attendparticipate in the Annual Meeting? Yes. You are encouraged to vote promptly, 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 attendparticipate in 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 our Regulations, a quorum is a majority of our voting shares then outstanding and entitled to vote at the Annual Meeting. Other than our 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 16,270,436[•] common shares outstanding and entitled to vote on February 28, 2020,2022, the record date for the Annual Meeting. A majority of the outstanding common shares, or 8,135,219[•] common shares, presentparticipating 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 our 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” occurs when the broker holding common shares for a beneficial owner is unable to vote on a proposal because the proposal is non-routine and the beneficial owner has not provided 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. TABLE OF CONTENTS Vote Required with Respect to the Proposals •Election of Directors (Proposal 1)
| • | Election of Directors (Proposal 1): |
Under Ohio law and our Regulations, the fourfive nominees for election as Park directors under Proposal 1 receiving the greatest number of votes “FOR”FOR” election will be elected as directors of Park for a term of three years expiring at the 20232025 Annual Meeting of Shareholders (the “2023“2025 Annual Meeting”). Proxies cannot be voted at the Annual Meeting for more than five nominees under Proposal 1. Common shares as to which the vote is expressed as a vote “AGAINST”AGAINST” or an “ABSTAIN”ABSTAIN” vote 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”FOR” the election of all of the individuals nominated for election as Park directors by the Board of Directors. •Approval of the Non-Binding Advisory Resolution to Approve the Compensation of Park’s Named Executive Officers (Proposal 2)
| • | 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”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 a vote “FOR”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)
| • | 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, 20202022 (the “2020“2022 fiscal year”). The effect of an abstention is the same as a vote “AGAINST”AGAINST” the proposal. Since the proposal to ratify the appointment of Crowe LLP as Park’s
independent registered public accounting firm for the 20202022 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 a vote “FOR”FOR” the ratification of the appointment of Crowe LLP. | • | Adoption of an Amendment to Park’s Articles of Incorporation and Related Amendments to Park’s Regulations to Eliminate Cumulative Voting Rights in the Election of Park Directors (Proposal 4): |
The affirmative vote of at least two-thirds of Park’s issued and outstanding common shares is required to adopt the amendment to Park’s Articles of Incorporation and the related amendments to Park’s Regulations to eliminate cumulative voting rights in the election of Park directors. Abstentions and broker non-votes will have the same effect as votes cast “AGAINST” the proposed amendments. The full Board of Directors unanimously recommends a vote “FOR” the adoption of the proposed amendments to Park’s Articles of Incorporation and Park’s Regulations to eliminate cumulative voting rights in the election of Park directors. How are votes cast for the proposals considered at the Annual Meeting to be tabulated? Tabulation of the votes cast for the proposals considered at the Annual Meeting will be performed by Broadridge Investor Communication Solutions, Inc. Park’s policy is to maintain confidentiality with respect to proxy cards, ballots and voting instructions submitted electronically and 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. TABLE OF CONTENTS Who paysis paying the cost of this proxy solicitation? This solicitation of proxies is made by and on behalf of the Park Board of Directors. Park will pay the costs of preparing, assembling, printing and distributing the Notice of Annual Meeting of Shareholders, this proxy statement, the form of proxy and our 20192021 Annual Report, together with our 20192021 Form 10-K, or the Notice of Internet Availability, as applicable, and all other costs in connection with the solicitation of proxies on behalf of the Park Board of Directors, other than the Internet access or telephone usage fees which may be charged to a shareholder when voting electronically or by telephone. Although Park is soliciting proxies primarily by distributing proxy materials to our shareholders by mail, by electronic mail or over the Internet, solicitation may also be made by directors, officers and employees of Park and our subsidiaries telephonically, electronically or by further mailings, personal contact, telephone, facsimile or electronic mail.other means of communications. Directors, officers and employees who help us in the solicitation will not be specifically compensated for 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,brokers, financial institutions and other nominees who are record holders of common shares of Park for the forwarding of proxy materials to the beneficial owners of such common shares.shares or providing a notice as to where beneficial owners can access our proxy materials in order that the beneficial owners’ common shares can be voted. Park will reimburse these brokers, financial institutions and other nominees for their reasonable out-of-pocket expenses in forwarding proxy materials to the beneficial shareholders.owners. 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 27, 202025, 2022: The Notice of Annual Meeting of Shareholders, this proxy statement and our 20192021 Annual Report, together with our 20192021 Form 10-K, are available at www.proxyvote.com.www.proxyvote.com. Alternatively, these proxy materials are available on our website at www.investor.parknationalcorp.comwww.parknationalcorp.com through the “Corporate Information – Document Highlights” section. 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. In addition, Park National Bank 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“Century National Bank Division,” the “Century“Fairfield 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 each such merger. References in this proxy statement to the “Carolina Alliance Bank Division” encompass both Carolina Alliance Bank prior to that bank’s merger with and into Park National Bank.Bank in 2019 and the division of Park National Bank following such merger. 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 or Carolina Alliance Bank, respectively, 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 each such merger. Since July 1, 2020: the bank’s merger withCarolina Alliance Bank Division has been part of the Carolina Division of Park National Bank; the Century National Bank Division has been part of the East Division of Park National Bank; the Fairfield National Bank Division has been part of the Southeast Division of Park National Bank; the First-Knox National Bank Division has been part of the North Central Division of Park National Bank; and into the Security National Bank Division has been part of the West Central Division of Park National Bank. TABLE OF CONTENTS (Proposal 1) As of the date of this proxy statement, there were 14 members of the Park Board of Directors -– five directors in the class whose terms will expire at the Annual Meeting, five directors in the class whose terms will expire at the 2023 Annual Meeting of Shareholders (the “2023 Annual Meeting”) and four directors in the class whose terms will expire at the 20212024 Annual Meeting of Shareholders (the “2021 Annual Meeting”) and five directors in the class whose terms will expire at the 2022 Annual Meeting of Shareholders (the “2022“2024 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,One additional individual served on April 22, 2019, the Board of Directors approved an increase in the number of directors from 13 to 14 and elected Matthew R. Miller to fill the vacancy 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. DeRoberts, who currently serves in the class of Park directors whose terms are to expire at the 2020 Annual Meeting, notified the Park Board of Directors that he has decided to retire asduring a Park director, effective immediately prior to the Annual Meeting. As a resultportion of the retirement2021 fiscal year – Julia A. Sloat, who retired from the Park Board of Mr. DeRoberts, a vacancy will be createdDirectors on April 26, 2021. Ms. Sloat is sometimes referred to in this proxy statement as the class of Park directors whose terms expire at the 2020 Annual Meeting.“Former Director.” Upon 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 1312 upon the retirement of Mr. DeRobertsMs. Sloat immediately prior to the 2021 Annual Meeting of Shareholders (the “2021 Annual Meeting”) in order to reflect the number of individuals who willwould then be serving as Park directors as a result of Ms. Sloat’s retirement.
On July 26, 2021, upon the recommendation of the Nominating Committee, the Park Board of Directors approved an increase in the number of directors from 12 to 13 and elected Frederic M. Bertley, Ph.D. to fill the vacancy created by the increase. Dr. Bertley was elected to serve in the class of directors whose terms are to expire at the Annual Meeting. Dr. Bertley’s election was effective September 1, 2021. Dr. Bertley had been recommended to the Nominating Committee by a third-party executive search firm. On December 20, 2021, upon the recommendation of the Nominating Committee, the Park Board of Directors approved a further increase in the number of directors from 13 to 14 and elected D. Byrd Miller III to fill the vacancy created by the increase. Mr. DeRoberts’s retirement.Miller was elected to serve in the class of directors whose terms are to expire at the 2023 Annual Meeting. Mr. Miller’s election was effective January 1, 2022. Mr. Miller had been recommended to the Nominating Committee by Mr. Trautman, Park’s Chairman of the Board and Chief Executive Officer, as Mr. Miller was a member of Park National Bank’s Carolina Division advisory board of directors. Under Proposal 1, fourfive directors will be elected at the Annual Meeting to hold office for a three-year term to expire at the 20232025 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 Park Board of Directors for election as a Park 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
Park director, the individuals designated as proxiesproxy holders in the voting instructions or on the proxy card 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 Park 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 of Directors.as a Park director.
Nominees for Election as Directors (Terms Expiring at 2023the 2025 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 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. ALVARADO (age 73)
has served as a Park director since April 2013 and as a member of the Board of Directors of Park National Bank since October 1991. Ms. Alvarado serves as Chair of the Nominating Committee and as a member of each of the Audit Committee and the Risk Committee of the Park Board of Directors. Ms. Alvarado has served as President of 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 more than 30 years of service as a director of Park and Park National Bank (including her service as an Audit Committee member of each Board of Directors), combined with her understanding TABLE OF CONTENTS 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 provide a valued perspective on business, federal and state government regulatory oversight and corporate governance issues to the Park Board of Directors. The Nominating Committee and the full Board of Directors have recommended that Ms. Alvarado be elected as a Park director. FREDERIC M. BERTLEY, Ph.D. (age 51) has served as a Park director since September 2021 and as a member of the Board of Directors of Park National Bank since September 2021. Dr. Bertley serves as a member of the Risk Committee of the Park Board of Directors. Dr. Bertley has served as the President and Chief Executive Officer of the Center of Science and Industry (“COSI”) in Columbus, Ohio since January 2017. Before joining COSI, Dr. Bertley served as the Senior Vice President for Science and Education at The Franklin Institute, located in Philadelphia, Pennsylvania, from January 2008 to December 2016. The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Dr. Bertley has developed through his 21 years of medical training and research, his community leadership and his ability to lead COSI successfully through the COVID-19 pandemic allow him to provide invaluable perspective and insight to the Park Board of Directors. The Nominating Committee and the full Board of Directors have recommended that Dr. Bertley be elected as a Park director. STEPHEN J. KAMBEITZ (age 63) has served as a Park director since January 2010 and as a member of the Board of Directors of Park National 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. The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Kambeitz has developed through more than 40 years 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 Park Board of Directors. The Nominating Committee and the full Board of Directors have recommended that Mr. Kambeitz be elected as a Park director. TIMOTHY S. McLAIN (age 60) has served as a Park director since January 2010, as a member of the Board of Directors of Park National Bank since January 2022 and as a member of the advisory board of directors of the Century National Bank Division (now part of the East Division) of Park National Bank 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 36 years as a Certified Public Accountant in public practice allow him to provide tax, accounting and financial expertise to the Park Board of Directors. The Nominating Committee and the full Board of Directors have recommended that Mr. McLain be elected as a Park director. MARK R. RAMSER (age 67) has served as a director of Park since January 2019, as a member of the Board of Directors of Park National Bank since January 2022 and as a member of the advisory board of directors of the First-Knox National Bank Division (now part of the North Central Division) of Park National Bank 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 operating in parts of seven counties in Central Ohio, since January 1987. Over the past 40 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. The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Ramser has developed through 40 years of experience in leading, owning and operating natural gas public utility companies and his over 25 years of experience as a member of the advisory board of directors of the First-Knox National Bank Division/North Central Division of Park National Bank (including his service as an Audit Committee TABLE OF CONTENTS 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 Park Board of Directors. The Nominating Committee and the full Board of Directors have recommended that Mr. Ramser be elected as a Park director. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT THE PARK SHAREHOLDERS VOTE “FOR” THE
ELECTION OF ALL OF THE NOMINEES NAMED ABOVE. 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 (Terms to Expire at the 2023 Annual Meeting) C. DANIEL DELAWDER (age 70)72) has served as a Park director since April 1994 and as a member of the Board of Directors of Park National Bank since April 1992. Mr. DeLawder serves as Chair of the Executive Committee of the Park Board of Directors. Mr. DeLawder retired as an executive officer of Park and Park National Bank, and as an employee of Park National Bank, on June 30, 2021. 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 of Park National Bank 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 4850 years of service with Park and Park National Bank 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) operateoperates to the Park Board of Directors. The Nominating Committee and the full Board of Directors and have recommendedbelieve that Mr. DeLawder’s electionDeLawder should continue as a Park director. ALICIA J. HUPP (age 59)61)has served as a Park director since June 2015, as a member of the Board of Directors of Park National Bank since January 2022 and as a member of the advisory board of directors of the Security National Bank Division (now part of the West Central Division) of Park National Bank since March 2012. Ms. Hupp serves as a member of each of the Audit Committee and the Nominating Committee of the Park Board of Directors. Ms. Hupp has served as President since July 1996 and Chief Executive Officer and Chairman of the Board since November 2005, 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.
equipment.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Ms. Hupp has developed through nearly 24more than 25 years in leading a manufacturing company based in the market area served by the Security National Bank Division/West Central Division of Park National Bank allow her to provide a valuable customer perspective and management expertise to the Park Board of Directors. The Nominating Committee and the full Board of Directors and have recommendedbelieve that Ms. Hupp’s electionHupp should continue as a Park director. TABLE OF CONTENTS
D. BYRD MILLER III (age 63)
has served as a Park director since January 2022, as a member of the Board of Directors of Park National Bank since January 2022 and as a member of the advisory board of directors of the Carolina Alliance Bank Division (now part of the Carolina Division) of Park National Bank since April 2019. Mr. Miller serves as a member of the Audit Committee of the Park Board of Directors. Mr. Miller has served as the Managing Member, Chief Financial Officer and Treasurer of William Barnet & Son, LLC, a global synthetic fibers, yarns and polymers company, since February 1992. Prior to his current position, Mr. Byrd served as a Senior Vice President at Bank of America from September 1981 to January 1992. Mr. Miller served on the Board of Directors of CAB Financial Corporation, the parent bank holding company of Carolina Alliance Bank, from 2007 until CAB Financial Corporation merged into Park on April 1, 2019. The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Miller has developed through his nearly ten years as a banker and his 30 years of financial management experience in a business that serves customers throughout the world allow him to provide simultaneously a local Carolinas and a world view to the Park Board of Directors. The Nominating Committee and the full Board of Directors believe that Mr. Miller should continue as a Park director. MATTHEW R. MILLER (age 41)43) has served as a Park director since May 2019 and as a member of the Board of Directors of Park National Bank since May 2019. Mr. Miller serves as Secretary and a non-voting member of the Executive Committee of the Park Board of Directors. Mr. Miller has served as President of each of Park and Park National Bank since May 2019. Previously, Mr. Miller served as Executive Vice President of each of Park and Park National Bank from April 2017 through April 2019. Prior to that, Mr. Miller served as Chief Accounting Officer and principal accounting officer of Park and Senior Vice President and Chief Accounting Officer of Park National Bank from December 2012 through March 2017; and as Vice President of Accounting of Park National Bank from AprilMarch 2009 to December 2012. Mr. Miller began his career in 2001 with the Deloitte accounting firm, Deloitte, primarily serving clients in the financial services industry.
The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Mr. Miller has developed in more than ten12 years of service with Park and Park National Bank as well as his eight years in public accounting practice allow him to provide technical banking knowledge and accounting expertise to the Park Board of Directors. The Nominating Committee and the full Board of Directors and have recommendedbelieve that Mr. Miller’s electionMiller should continue as a Park director. ROBERT E. O’NEILL (age 57)59)has served as a Park director since April 2013 and as a member of the Board of Directors of Park National Bank since December 2004. Mr. O’Neill serves as a member of each of the Audit Committee, the Executive Committee and the Nominating Committee of the Park Board of Directors. Mr. O’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 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. O’Neill has developed through his years of service as a director of each of Park and Park National Bank director (including his service as an Audit Committee member of thateach Board of Directors), together with more than 3033 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 Park Board of Directors in connection with the loan activities of Park National Bank (and its divisions) and have recommended Mr. O’Neill’s election as a Park director.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT THE PARK SHAREHOLDERS VOTE “FOR” THE
ELECTION OF ALL OF THE NOMINEES NAMED ABOVE.
Proxies cannot be voted at the Annual Meeting for more than four nominees under Proposal 1. Except in the case of broker non-votes, common shares represented by properly-authenticated Internet and telephone voting instructions or properly-executed and returned proxy cards, in 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.
Continuing Directors
Bank. 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 continuingbelieve that Mr. O’Neill should continue as a Park director. Directors Continuing in Office (Terms to Expire at the 20212024 Annual Meeting) F. WILLIAM ENGLEFIELD IV (age 65)67) has served as a Park director since January 2005 and as a member of the Board of Directors of Park National Bank since April 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 the Park Board of Directors. Mr. Englefield has served as President of Englefield, Inc., Heath, Ohio, 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 3033 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 Park Board of Directors. The Nominating Committee and the full Board of Directors andbelieve that Mr. Englefield should continue as a Park director. TABLE OF CONTENTS JASON N. JUDD (age 50)45) has served as a Park director since June 2015January 2019 and as a member of the Board of Directors of Park National Bank since June 2015. Ms. SloatJanuary 2019. Mr. Judd serves as a member of each of the Compensation Committee and the RiskAudit Committee of the Park Board of Directors. Ms. SloatMr. Judd has served as Senior Vice President – Treasury & Risk of American Electric Power,Corporate Finance of Big Lots, Inc., an electric public utility holding company,a discount retailer, since JanuaryOctober 2019. Prior thereto, sheBefore joining Big Lots, Inc., Mr. Judd served as PresidentChief Financial Officer and Chief Operating Officer of AEP Ohio, an electric distribution utility, from May 2016 to December 2018, and as Senior Vice President from February 2016 to October 2019, and Treasurer from January 2013 to April 2016as Chief Financial Officer and Vice President-Regulatory Case ManagementPresident from September 2009July 2015 to December 2012,February 2016, of American Electric Power, Inc. Previously, Ms. SloatJustice, New Albany, Ohio, a retail fashion company within the Ascena Retail Group. Prior to that, Mr. Judd served as Associate Vice President – Corporateof Finance & Investor Relationsof Victoria’s Secret Stores, Columbus, Ohio, a retail fashion company specializing in women’s apparel, from July 2008June 2011 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.May 2015. The Nominating Committee and the full Board of Directors believe that the attributes, skills and qualifications Ms. SloatMr. Judd has developed as a corporate leader with extensivethrough more than 17 years serving in financial analysis and communicationleadership roles for public companies, including his experience in the areas of treasury, investor relations, corporate finance, regulatory cost recovery strategy and development and execution, investment management, pension liability management,customer engagement, customer analytics, productivity analysis, financial planning and analysis, merger and acquisition analysis and execution, debt underwritingperformance and risk management and his experience in capital markets and mergers and acquisitions allow herhim to provide a valued perspective on corporate financestrong understanding of customer-focused financial performance and investor relations issuesfinancial and expertise in the analysis and execution of strategies addressing those issuesrisk management leadership 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. SloatMr. Judd should continue as a Park director. DAVID L. TRAUTMAN (age 58)60) has served as a Park director 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 the Park Board of Directors. Mr. Trautman has served as Chairman of the Board of Park since May 2019 and as Chief Executive Officer of Park since January 2014. He also served as President of Park from January 2005 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. He also served as President of Park National Bank from January 2005 through April 2019. Prior to January 2005, Mr. Trautman served in executive positions with Park National Bank and the 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 3638 years of experience in banking, including most recently six years as Chairman of the Board and Chief Executive Officer of Park and Park National Bank, allow him to provide technical banking knowledge, community perspective and financial leadership to the Park Board of Directors. The Nominating Committee and the full Board of Directors andbelieve that Mr. Trautman should continue as a Park director. LEON ZAZWORSKY (age 71)73) has served as a Park director 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 in January 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 the 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., Hebron, Ohio, 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 3942 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 that Mr. Zazworsky should continue as a Park director. Directors Continuing in Office (Terms to Expire at the 2022 Annual Meeting)
DONNA M. ALVARADO (age 71) has served as a Park director since April 2013 and as a member of the Board of Directors of Park National Bank since October 1991. Ms. Alvarado serves as Chair of the Nominating Committee and as a member of each of the Audit Committee and the Risk Committee of the Park Board of Directors. Ms. Alvarado has served as President of 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 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, allow her to provide a valued perspective on business, federal and state government regulatory oversight and corporate governance issues to the Board of Directors, and that Ms. AlvaradoMr. Zazworsky should continue as a 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 since January 2019. Mr. Judd serves as a member of the Audit Committee 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 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.
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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 28, 20202022 (unless otherwise noted), for each of the Park directors (including those nominated for election at the Annual Meeting), each of the individuals named in the Summary Compensation Table for 2019,2021, 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: | | BlackRock, Inc.
55 East 52nd Street
New York, NY 10055(3)
| | | 2,276,568 | | | [•]% | | | | Trust department of Park National Bank
50 North Third Street
Newark, OH 43055(4)
| | | 1,605,010 | | | [•]% | | | | The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355(5)
| | | 1,544,585 | | | [•]% | | | | Donna M. Alvarado | | | 7,253 | | | * | | | | Frederic M. Bertley, Ph.D.(6) | | | 483 | | | * | | | | C. Daniel DeLawder(7)(8) | | | 142,287 | | | * | | | | F. William Englefield IV(9) | | | 8,534 | | | * | | | | Alicia J. Hupp | | | 3,126 | | | * | | | | Jason N. Judd(10) | | | 1,370 | | | * | | | | Stephen J. Kambeitz(11) | | | 4,558 | | | * | | | | Timothy S. McLain(12) | | | 3,780 | | | * | | | | D. Byrd Miller III | | | 2,144 | | | * | | | | Matthew R. Miller(7)(13) | | | 8,011 | | | * | | | | Robert E. O’Neill(14) | | | 23,369 | | | * | | | | Mark R. Ramser(15) | | | 79,905 | | | * | | | | David L. Trautman(7)(16) | | | 68,345 | | | * | | | | Leon Zazworsky(17) | | | 48,274 | | | * | | | | Brady T. Burt(7)(18) | | | 11,926 | | | * | | | | All current directors and executive officers as a group (15 persons)(19) | | | 413,365 | | | [•]% | |
(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 [•] common shares outstanding on February 28, 2022. |
(3)
| Based on information contained in a Schedule 13G/A, dated January 27, 2022 and filed with the SEC on that same day, on behalf of BlackRock, Inc., to report the beneficial ownership by its subsidiaries (BlackRock Advisors, LLC; Aperio Group, LLC; BlackRock Investment Management (UK) Limited; BlackRock Asset Management Canada Limited; BlackRock Investment Management (Australia) Limited; BlackRock Fund Advisors; BlackRock Asset Management Ireland Limited; BlackRock Institutional Trust Company, National Association; BlackRock Financial Management, Inc.; BlackRock Fund Managers Ltd.; BlackRock Asset Management Schweiz AG; and BlackRock Investment Management, LLC) of common shares of Park as of December 31, 2021, and consequently, the beneficial ownership of BlackRock, Inc. may have changed prior to the printing of this proxy statement. The Schedule 13G/A reported that BlackRock, Inc., through its subsidiaries, had sole voting power as to 2,245,590 common shares and sole investment power as to 2,276,568 common shares. The Schedule 13G/A also reported that BlackRock Fund Advisors beneficially owned 5% or greater of Park’s outstanding common shares. |
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| The trust department of Park National Bank beneficially owns 1,605,010 common shares, with sole voting power as to 1,575,747 common shares and sole investment power as to 443,710 common shares. The officers and directors of Park National Bank and the officers and directors of Park disclaim beneficial ownership of the common shares beneficially owned by the trust department of Park National Bank. The number shown does not include 1,132,607 common shares held of record by the trust department of Park National Bank as to which the trust department has no voting or investment power. |
(5)
| Based on information contained in a Schedule 13G/A dated February 9, 2022, and filed by The Vanguard Group with the SEC on February 10, 2022, to report beneficial ownership of common shares of Park as of December 31, 2021, and consequently, the beneficial ownership of The Vanguard Group may have changed prior to this printing of this proxy statement. The Schedule 13G/A reported that The Vanguard Group had shared voting power as to 12,295 common shares, sole investment power as to 1,520,773 common shares and shared investment power as to 23,812 common shares. |
(6)
| The number shown includes 33 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 sole voting and investment power. |
(7)
| Individual named in Summary Compensation Table for 2021. Messrs. DeLawder, Miller and Trautman are also directors of Park. |
(8)
| The number shown includes: (i) 27,348 common shares held for the account of Mr. DeLawder in the Park KSOP; and (ii) 50,232 common shares held in an account for the benefit of the wife of Mr. DeLawder as to which she has sole voting and investment power and Mr. DeLawder disclaims beneficial ownership. As of February 28, 2022, 55,280 common shares held by Mr. DeLawder and 50,148 common shares held by the wife of Mr. DeLawder were pledged as security to a financial institution, which is not affiliated with Park, in connection with a personal loan. |
(9)
| The number shown includes: (i) 5,811 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 and Mr. Englefield share 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; (iii) 1,590 common shares held in a cash management account by a brokerage firm as custodian for Mr. 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. |
(10)
| The number shown includes 1,370 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 3,780 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) 4,026 common shares held for the account of Mr. Miller in the Park KSOP; (ii) 553 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) 640 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; (iv) 1,042 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; (v) 1,279 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 27, 2025; and (vi) 471 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, 2026. As of February 28, 2022, 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 line of credit. |
(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 the trust department of Park National Bank has sole voting and investment power and Mr. O’Neill disclaims beneficial ownership. The number shown also includes 5,000 common shares held by Southgate Company Limited Partnership. Mr. O’Neill is President of Southgate Corporation, which corporation is the general partner of Southgate Company Limited Partnership, and in such capacity as President, he may be deemed to indirectly exercise voting power and investment power over the common shares held by Southgate Company Limited Partnership. Mr. O’Neill disclaims beneficial ownership of the common shares held by Southgate Company Limited Partnership except to the extent of his pecuniary interest therein. 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 co-trustee with Mr. Robert E. O’Neill 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; 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) an aggregate of 7,572 common shares held by Mr. Ramser in two individual retirement accounts with Park National Bank; (ii) 15,529 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) an aggregate of 8,500 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; (iv) 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; (v) 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 (vi) 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. |
(16)
| The number shown includes: (i) 16,719 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 |
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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) | 1,713,034 | 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 16,270,436 common shares outstanding on February 28, 2020.
(3) The trust department of Park National Bank (and its divisions) beneficially owns 1,713,034 common shares (10.5% of the outstanding common shares), with voting power but no investment power as to 1,214,281 of these common shares, investment power but no voting power as to
29,263 of these common shares and sole voting and investment power as to 469,490 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 1,101,653 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 10, 2020, and filed by The Vanguard Group, Inc. with the SEC on February 12, 2020, to report beneficial ownership of common shares of Park as of December 31, 2019. The Vanguard Group, Inc. reported that it is deemed to be the beneficial owner of 1,228,989 common shares. The Vanguard Group, Inc. reported sole voting power as to 13,461 common shares, shared voting power as to 2,142 common shares, sole investment power as to 1,215,529 common shares and shared investment power as to 13,460 common shares.
Vanguard Fiduciary Trust Company (“VFTC”), a wholly-owned subsidiary of The Vanguard Group, Inc., was reported to be the beneficial owner of 11,318 common shares (0.07% of the common shares outstanding as of February 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 4,285 common shares (0.03% of the common shares outstanding on February 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, 2020 and filed with the SEC on 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, 2019. The Schedule 13G/A reported that BlackRock, Inc., through its subsidiaries, had sole voting power as to 967,998 common shares and sole investment power as to 1,002,325 common shares.
(6) Individual named in Summary Compensation Table for 2019. Messrs. DeLawder, Miller and Trautman are also directors of Park.
(7) The number shown includes: (i) 25,177 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; (iv) 1,859 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; 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 28, 2020, 55,280 common shares held by Mr. DeLawder and 50,148 common shares held by the wife of Mr. DeLawder were 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.
(9) The number shown includes: (i) 4,911 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; (iii) 1,590 common shares held in a cash management account by a brokerage firm as custodian for Mr. 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 475 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 2,980 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.
(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 2,000common 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;
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) 1,987 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) 3,736 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 8,500common 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) 4,278common 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.
(16) The number shown includes: (i) 14,816 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; (vi) 1,875 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; and (vii) 1,1952,389 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, 2024.2024; (viii) 2,283 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 27, 2025; and (ix) 925 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, 2026. As of February 28, 2020,2022, 27,865 common shares held by Mr. Trautman and 13,230 common shares held by the wife of Mr. Trautman were pledged as security to a financial institution which is not affiliated with Park, in connection with a personal loan.
(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.
(18) The number shown includes: (i) 5,665(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 power and the investment power with respect to these common shares are subject to collective action by the members of the investment club. |
(18)
| The number shown includes: (i) 6,697 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, 2023; (iv) 1,673 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 29, 2024; (v) 1,413 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 27, 2025; and (vi) 497 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, 2026. As of February 28, 2022, 3,445 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 line of credit. |
(19)
| See Notes (6) and (8) through (18) above. |
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, 2023; and (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 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.
TABLE OF CONTENTS (19) See Notes (7) through (18) above.
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 of 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 of 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 website at www.investor.parknationalcorp.comwww.parknationalcorp.com. Park Improvement Line/Online Reporting Park has implemented a “whistleblower” hotline called the “PRK Improvement Line.” The PRK 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. 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 Park 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 website at www.investor.parknationalcorp.comwww.parknationalcorp.com. Independence of Directors Applicable NYSE American Rules require that a majority of the members of the 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 each(i) the current directors of Park and (ii) Julia A. Sloat, the Park directors,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 current Park director (and the immediate family members of each current Park director) or (ii) the Former Director (and the immediate family members of the Former Director), in each case since January 1, 2017;2019;
•the compensation and other payments (including payments made in the ordinary course of providing business services) that (i) each current Park director (and the immediate family members of each current Park 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, 2017;2019; or
TABLE OF CONTENTS 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 current Park director (and the immediate family members of each current Park 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 our subsidiaries’ divisions) since January 1, 2017;2019;
•whether (i) any current Park director (or any of the immediate family members of any current Park 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, 2017,2019, any of Park’s executive officers served or presently serves on the compensation committee of such other entity; and
•whether (i) any current Park director 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, 2017.2019.
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 current Park directors qualify as independent directors. The Board of Directors has determined that each of Donna M. Alvarado, James R. DeRoberts,Frederic M. Bertley, Ph.D., F. William Englefield IV, Alicia J. Hupp, Jason N. Judd, Stephen J. Kambeitz, Timothy S. McLain, D. Byrd Miller III, Robert E. O’Neill, Mark R. Ramser Julia A. Sloat and Leon Zazworsky qualifies, and that during her period of service as a Park director in the 2021 fiscal year, Julia A. Sloat 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 and a director of Park National Bank (or(and/or a member of the advisory 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 deposit, trust or other banking services or loans by one or more of Park National Bank and the divisionsor any division of Park National Bank);
•ownership of ourPark common shares;
•in the case of James R. DeRoberts, Stephen J. Kambeitz, Robert E. O’Neill 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 the Greater Springfield Chamber of Commerce and (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 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;Division (now part of the Southeast Division) of Park National Bank;
•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 or 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 to this organization 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 madeapproved, in December of 2019, a multi-year pledge commitment totaling $300,000 forover 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 donationsapproved, in an aggregate amount2019, a multi-year pledge commitment totaling less than $150,000$628,750 over five years to be paid in eachannual installments of Park’s past three fiscal years,$125,750 beginning in 2019, with Mr. O’Neill receiving and to receive no direct or indirect benefit in any capacity from the donations made by the Park National BankCorporation Foundation;
TABLE OF CONTENTS in the case of Mark R. Ramser, the fact that he serves as a member of the Board of Directors of Knox Community Hospital and the Park National Corporation Foundation approved, in 2018, a multi-year pledge commitment to Knox Community Hospital Foundation totaling $250,000 over five years to be paid in annual installments of $50,000 beginning in 2018, with Mr. Ramser receiving and to receive 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 Executive Vice President and Chief Financial Officer (and previously served as Senior Vice President – Treasury & Riskand Risk) of American Electric Power Company, Inc., an electric public utility holding company that, through one or more of its affiliates, provides utility services to Park and our subsidiaries; and
•in the case of each of Alicia J. Hupp, Timothy S. McLain, Robert E. O’Neill, Mark R. Ramser Julia A. Sloat 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 director receiving and to receive no direct or indirect benefit in any capacity from the donations made.
None of C. Daniel DeLawder does not qualify as an independent director due to his status as an executive officer of Park and Park National Bank and an employee of Park National Bank, until his retirement from those positions on June 30, 2021. In addition, neither Matthew R. Miller andnor David L. Trautman qualifies as an independent director because he currently serves as an executive officer and/or an employee of Park and Park National Bank and an employee of Park National Bank.
Risk Management Oversight The role of the Park 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’sthe 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 CommitteeCommittee.”. 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 of Park and of Park’s subsidiaries 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, legal and ethical compliance programs and information technology security and control, 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.”.
The Nominating Committee recommended the nominees identified in “ELECTION OF DIRECTORS (Proposal 1) ̶– Nominees for Election as Directors (Terms Expiring at 2023the 2025 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. TABLE OF CONTENTS Each director must be a shareholder of Park. It is the sense of the fullPark Board of Directors that each director should be an active leader in the director’s business or profession and in the director’s community. As a result, a Park director who experiences a material change in his or his/her principal occupation, position, location or responsibility from that held when he or he/she was elected to the Board of Directors is 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. A director is expected to submit his or his/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 his/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’sPark 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. In addition, the Nominating Committee periodically engages a third-party executive search firm to help identify and evaluate director candidates. 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 his/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 his/her duties as a Park director. Directors are to advise Park’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 his/her responsibilities as a Park director if he or he/she serves on more than three other public company boards.
When considering candidates, the Park Board of Directors and the Nominating Committee also take into account gender, race, ethnicity, age, background and other attributes, including experience in the financial services industry and experience with risk management and compensation practices. 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. TABLE OF CONTENTS Depending on the current needs of the 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 varietyblend of skills,broad-based business knowledge background and experience. contacts, prominence, commitment to ethical and moral values, personal and professional integrity, sound reputation in their respective fields, as well as a commitment to corporate citizenship. The Park 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 eight10 years. The directors range in age from 4143 to 7173 years. The matrix below summarizes the self-identified gender and ethnic diverse attributes on the Park Board of Directors: Part I: Gender Identity
| | | | | | | | | | | | | Directors | | | 2 | | | 12 | | | — | | | — | | | | | | | | | | | | | | Part II: Demographic Background
| | | | | | | | | | | | | African American or Black | | | — | | | 1 | | | — | | | — | Alaskan Native or Native American | | | — | | | — | | | — | | | — | Asian | | | — | | | — | | | — | | | — | Hispanic or Latinx | | | 1 | | | — | | | — | | | — | Native Hawaiian or Pacific Islander | | | — | | | — | | | — | | | — | White | | | 1 | | | 11 | | | — | | | — | Two or More Races or Ethnicities | | | — | | | — | | | — | | | — |
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. DuringCommencing in 2020 and continuing into the 20192021 fiscal year, the Nominating Committee did not use any such consultants orengaged a third-party executive search firms.firm to help identify and evaluate director candidates. 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
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 TABLE OF CONTENTS 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 our 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 20202022 Annual Meeting must be received by Matthew R. Miller, Park’s President, by April 13, 2020.11, 2022. 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 our 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, 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 the 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. The 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 ̶Governance– Governance Documents” section of the “Investor Relations” page of Park’s website at www.investor.parknationalcorp.comwww.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 havehas made, and expectexpects to make in the future, extensions of creditloans 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. TABLE OF CONTENTS 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 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 of 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. During the 20192021 fiscal year, certain of the current directors and executive officers of Park and Julia A. Sloat, 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 deposit, trust or other banking services and/or 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. LoansAny loans to these persons have been made and will be 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, 2019,2021, the aggregate principal balance of loans to the 1413 individuals currentlythen serving as directors of Park as well as the one other current executive officer of Park who does not serve as a Park director, together with their respective associates, as a group was approximately $31.7$27.1 million. As of the date of this proxy statement, eachnone of the loans described in this paragraph is or would be disclosed as past due, nonaccrual or troubled debt restructuring in Park’s consolidated financial statements and each 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.Bank. 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$400,000 during 2019. Hethe 2021 fiscal year. Mr. Miller’s brother 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.Matthew R. Miller. TABLE OF CONTENTS The Park Insider Trading Policy prohibits directors, members of advisory boards of directors, officers and employees of Park theor of one of our 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 theor of one of our 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 putsput options, call options or calls ofother derivative securities with respect to Park common shares.
TABLE OF CONTENTS STRUCTURE AND MEETINGS OF BOARD OF DIRECTORS Meetings of the Board of Directors and Attendance at Annual Meetings of Shareholders The Park Board of Directors held sevenfive meetings during the 20192021 fiscal year. Each incumbent director of Park attended at least 85%96% 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 he/she served, in each case during the period of his or his/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. TwelveAll of the 1312 then incumbent directors attended Park’s last annual meeting of shareholders, which was held virtually on April 22, 2019.26, 2021. Effective May 1, 2019, changes were made to Park’s management and to the leadership of the Park Board of Directors. Matthew R. Miller was elected to serve as the President of each of Park and Park National Bank. David L. 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. 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 has also continued his employment with Park National Bank in a reduced capacity.
The Board of Directors believes that these 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. 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 the 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 of Directors deems appropriate.
The Park Board of Directors believes that itsthe 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 Park 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. During the 20192021 fiscal year, the Board of Directors had five standing committees which held regularly scheduled meetings – the Audit Committee, the Compensation Committee, the Executive 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 were assumed by the Park National Bank Board of Directors or by other committees of the Park Board of Directors. TABLE OF CONTENTS 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, D. Byrd Miller III and Robert E. O’Neill, eachO’Neill. Each of whomMs. Alvarado, Ms. Hupp, Mr. Judd, Mr. McLain and Mr. O’Neill also served as a member of the Audit Committee during the entire 20192021 fiscal year. D. Byrd Miller III began his service as a member of the Audit Committee on January 1, 2022 when he joined the Park Board of Directors. Upon the
recommendation of the Nominating Committee, the full 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 full Board of Directors has also determined that each of Mr. Judd, Mr. Kambeitz, Mr. McLain and Mr. McLainMiller 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, Mr. McLain and Mr. McLainMiller as an “audit committee financial expert,” the Park Board of Directors strongly believes that each of the 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. The Park Board of Directors also believes that each of the members of the Audit Committee satisfies the financial sophistication requirement of the NYSE American Rules.Rules as well as the requirements for members of the Audit Committee as specified in Section 363.5(a) and Section 363.5(b) of the regulations promulgated by the Federal Deposit Insurance Corporation (the “FDIC Regulations”). The Audit Committee is organized and conducts its business pursuant to a written charter adopted by the full 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 website at www.investor.parknationalcorp.comwww.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 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 Park’s 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;
TABLE OF CONTENTS 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 his/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; and
•assisting the full 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 eleventen times during the 20192021 fiscal year. The Audit Committee’s report relating to the 20192021 fiscal year begins at page 94.73 of this proxy statement.The Board of Directors has a Compensation Committee which is currently comprised of F. William Englefield IV (Chair), Stephen J. Kambeitz, Timothy S. McLain and Leon Zazworsky. Each of Mr. Englefield, Mr. Kambeitz, Mr. McLain and Mr. Zazworsky also served as a member of the Compensation Committee during the entire 2021 fiscal year. Julia A. Sloat served as a member of the Compensation Committee during the 2021 fiscal year from January 1, 2021 until she retired from the Park Board of Directors on April 26, 2021. Upon the recommendation of the Nominating Committee, the full Board of Directors has determined that each member of the Compensation Committee satisfies, and during her period of service on the Compensation Committee in the 2021 fiscal year, Julia A. Sloat satisfied, 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, and during her period of service on the Compensation Committee in the 2021 fiscal year, Julia A. Sloat qualified, 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,” 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 full Board of Directors (the “Compensation Committee Charter”). A copy of the Compensation Committee TABLE OF CONTENTS Charter is posted on the “Corporate Information – Governance Documents” section of the “Investor Relations” page of Park’s Internet website at www.investor.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 or causing the administration (including through delegation to the Executive Committee to the extent permitted by applicable laws, rules and regulations) of 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 each 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 the 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 or lead to a material financial loss at Park or any of Park’s subsidiaries; 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. TABLE OF CONTENTS 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. 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 2021 fiscal year, Meridian did not provide, and during the 2022 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 2021 – 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 2021 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)(4) and Section 805(c)(4) of the NYSE American Rules, after considering the six factors listed in SEC Rule 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 December 13, 2021. The Compensation Committee has determined that since December 13, 2021, 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)(4) of the NYSE American Rules. The Compensation Committee met four times during the 2021 fiscal year. The compensation discussion and analysis regarding executive compensation for the 2021 fiscal year begins at page 35 of this proxy statement and the Compensation Committee Report for the 2021 fiscal year begins on page 48 of this proxy statement. 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 2021 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 full 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.investor.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 authority: to fill vacancies on the Board of Directors or in any Board committee; to amend our Regulations; that has been delegated by the full Board of Directors exclusively to one or more other Board committees; that applicable law or our governing documents do not permit to be delegated to a Board committee; TABLE OF CONTENTS to recommend to the shareholders any action that requires shareholder approval, other than the election of directors; and to approve any merger or share exchange which does not require shareholder approval. The Executive Committee has been delegated the authority to assist the Compensation Committee in the administration of Park’s incentive compensation plans and equity-based plans to the extent permitted by applicable laws, rules and regulations. The Executive Committee met 11 times during the 2021 fiscal year. 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 2021 fiscal year. The full 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 full 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 website at www.investor.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 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 full 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 (which has historically been done annually) and recommend 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 our 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 seven times during the 2021 fiscal year. The Board of Directors has a Risk Committee which is currently comprised of Leon Zazworsky (Chair), Donna M. Alvarado, Frederic M. Bertley, Ph.D., Stephen J. Kambeitz and Mark R. Ramser. Each of Ms. Alvarado, Mr. Kambeitz, Mr. Ramser and Mr. Zazworsky also served as a member of the Risk Committee during the entire 2021 fiscal year. Frederic M. Bertley, Ph.D. began his service as a member of the Risk Committee on September 1, 2021 when he joined the Park Board of Directors. Julia A. Sloat served on the Risk Committee during the 2021 fiscal year from January 1, 2021 until she retired from the Park Board of Directors on April 26, 2021. The Risk Committee is organized and conducts its business pursuant to a written charter adopted by the full Board of Directors (the “Risk Committee Charter”). A copy of the Risk Committee Charter is posted on the TABLE OF CONTENTS “Corporation Information − Governance Documents” section of the “Investor Relations” page of Park’s website at www.investor.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 full Board of Directors in monitoring management’s implementation and maintenance 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 for Park and our subsidiaries; receives and reviews reports from Park’s Chief Risk Officer regarding risk management deficiencies and actions implemented to address any risk management deficiencies; 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 appoints Park’s Chief Risk Officer (who in turn reports directly to both the Risk Committee and Park’s Chief Executive Officer) and performs an annual independent performance evaluation and approves the compensation 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 four times during the 2021 fiscal year. TABLE OF CONTENTS COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Compensation Committee of the Park Board of Directors is currently comprised of F. William Englefield IV (Chair), Stephen J. Kambeitz, Timothy S. McLain and Leon Zazworsky. Each of Mr. Englefield, Mr. Kambeitz, Mr. McLain and Mr. Zazworsky also served as a member of the Compensation Committee during the entire 2021 fiscal year. Julia A. Sloat served as a member of the Compensation Committee during the 2021 fiscal year from January 1, 2021 until she retired from the Park Board of Directors on April 26, 2021. All of the current members of the Compensation Committee are independent directors, and during her period of service on the Compensation Committee in the 2021 fiscal year, Julia A. Sloat was an independent director, in each case for purposes of the applicable NYSE American Rules. None of the current members of the Compensation Committee or Julia A. Sloat is a present or past employee or officer of Park or any of our subsidiaries. During the 2021 fiscal year and during the 2022 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 the Park Board of Directors or Compensation Committee. Each of Mr. Englefield, Mr. Kambeitz, Mr. McLain, Mr. 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 deposit, trust or other banking services and/or 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. Any 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, any 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. TABLE OF CONTENTS Each of the Park executive officers is elected annually and serves at the pleasure of the Park Board of 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 each executive officer’s individual business experience. David L. Trautman | | | 60 | | | Chairman of the Board since May 2019, Chief Executive Officer since January 2014, 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, 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 January 2005, Mr. Trautman served in executive positions with Park National Bank and the then – First-Knox National Bank Division for over ten years. | | | | | | | | Matthew R. Miller | | | 43 | | | 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, Senior Vice President and Chief Accounting Officer from December 2012 through March 2017, and Vice President of Accounting from March 2009 to December 2012, of Park National Bank. | | | | | | | | Brady T. Burt | | | 49 | | | 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, where he has been a member of each of the Audit Committee (serving as the Chair thereof since January 1, 2021) and the Risk Committee. |
TABLE OF CONTENTS VOTE ON APPROVAL OF NON-BINDING ADVISORY RESOLUTION 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 the 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 2022 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 2021,” and the related executive compensation tables, notes and narratives.” The Park 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 the 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 shareholders. Park’s incentive programs are based on Park’s performance in comparison to Park’s peer financial services holding companies and Park’s performance as compared to internally established financial targets (commencing with the annual incentive compensation awarded for the 2021 fiscal year, which will be paid during the 2022 fiscal year). The Park 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 2021 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 Park Board of Directors believes that Park’s compensation policies and practices do not threaten the value of Park or the investments of the 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. 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: be binding upon the 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; overrule any decision made by the Park Board of Directors or the Compensation Committee; or create or imply any additional fiduciary duty by the 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 2023 Annual Meeting. THE COMPENSATION COMMITTEE AND THE FULL BOARD OF DIRECTORS
UNANIMOUSLY RECOMMEND THAT THE PARK SHAREHOLDERS VOTE “FOR” THE
APPROVAL OF THE NON-BINDING ADVISORY RESOLUTION TO APPROVE THE
COMPENSATION OF PARK’S NAMED EXECUTIVE OFFICERS. TABLE OF CONTENTS Compensation Discussion and Analysis The Compensation Committee determines the compensation of Park’s named executive officers (also known as the “NEOs”), consisting of the following individuals for the 2021 fiscal year: David L. Trautman, Chairman of the Board and Chief Executive Officer (the “Chairman/CEO”) Brady T. Burt, Chief Financial Officer, Secretary and Treasurer (the “CFO”) Matthew R. Miller, President (the “President”) C. Daniel DeLawder, Chairman of the Executive Committee of the Board of Directors (the “Executive Committee Chairman”). Mr. DeLawder retired as an executive officer of Park and Park National Bank and an employee of Park National Bank on June 30, 2021. He continued to serve as Executive Committee Chairman and a non-employee director of Park subsequent to June 30, 2021. Due to his retirement on June 30, 2021, as has been the historical practice upon the retirement of other employees who are not NEOs, Mr. DeLawder is to receive a bonus for his service during the six-month period from January 1, 2021 through June 30, 2021, consistent with those paid to non-NEOs from the non-NEO bonus pool, which bonus is to be paid during the 2022 fiscal year. Accordingly, the bonus to be received by Mr. DeLawder was not addressed during the deliberations of the Compensation Committee when determining the annual incentive compensation to be paid to Mr. Trautman, Mr. Burt and Mr. Miller for the 2021 fiscal year. Performance Highlights Park continues to be a high performer and the results for the 2021 fiscal year continued that trend. Park’s management believes that its more mature markets in Ohio offer solid growth possibilities. They also believe newer markets in North Carolina, South Carolina and Louisville, Kentucky offer more robust growth potential in the future. COVID-19 has presented many challenges to Park and the financial services industry in general; however, Park achieved strong financial results for the 2020 fiscal year and even better results for the 2021 fiscal year. Park achieved the following results for the 2021 fiscal year and the 2020 fiscal year: Net income increased by $26.0 million (from $127.9 million for the 2020 fiscal year to $153.9 million for the 2021 fiscal year). Return on average assets (“ROAA”) increased to 1.56% for the 2021 fiscal year from 1.38% for the 2020 fiscal year. Return on average common equity (“ROAE”) increased to 14.45% for the 2021 fiscal year from 12.68% for the 2020 fiscal year. Return on average tangible common equity (“ROATE”) increased to 17.15% for the 2021 fiscal year from 15.25% for the 2020 fiscal year. ROATE is calculated by dividing net income for the applicable year by average tangible equity (which excludes the impact of average goodwill and other intangible assets on average shareholders’ equity) during such year. Average goodwill and other intangible assets were $168.0 million for the 2021 fiscal year and $170.0 million for the 2020 fiscal year. Park maintained strong capital and continued its long history of paying a consistently competitive dividend, increasing the amount of the dividend from the 2020 fiscal year. Park declared dividends in the aggregate amount of $4.52 per common share during the 2021 fiscal year, compared to the aggregate amount of $4.28 per common share during the 2020 fiscal year and the aggregate amount of $4.24 per common share during the 2019 fiscal year. TABLE OF CONTENTS On a relative basis, Park’s results continued to exceed the median of both the ROAE and the ROAA for the Midwest Regional Compensation Peer Group (Park’s compensation peer group identified in the table on page [40] of this proxy statement and used for comparison purposes). Park’s financial performance on a reported U.S. GAAP basis is compared to that of Park’s comparison peer group in the following table: | | ROAA | | | 1.56% | | | 95th | | | 1.28% | | | 1.38% | | | 100th | | | 0.99% | | | | ROAE | | | 14.45% | | | 95th | | | 10.38% | | | 12.68% | | | 100th | | | 8.11% | | | | Efficiency Ratio(1) | | | 61.27% | | | 10th | | | 58.01% | | | 62.83% | | | 16th | | | 58.04% | | | | TSR for one-year period(2) | | | 35.56% | | | 60th | | | 31.98% | | | (2) | | | (2) | | | (2) | | | | TSR for three-year period(2) | | | 83.77% | | | 100th | | | 30.11% | | | (2) | | | (2) | | | (2) | | | | TSR for five-year period(2) | | | 40.61% | | | 90th | | | 18.75% | | | (2) | | | (2) | | | (2) | |
(1)
| 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, assuming a 21% corporate federal income tax rate. |
(2)
| Total shareholder return (“TSR”) was considered by the Compensation Committee for the first time when reviewing Park’s financial results for the 2021 fiscal year and determining the annual incentive compensation awards for the 2021 fiscal year, which are to be paid in the 2022 fiscal year. |
By most measures, Park’s performance for the 2021 fiscal year continued to exceed the median results of the Midwest Regional Compensation Peer Group. Compensation Program Highlights Park’s executive compensation program includes a number of features that we believe reflect best practices and promote the interests of Park shareholders: | • | 100% performance-based long-term incentive awards: Park’s executive officers are granted 100% of their long-term incentive compensation as equity-based compensation in the form of PBRSUs which have historically been earned based on the cumulative ROAA for a three-fiscal-year performance period as compared to the cumulative ROAA results for the Industry Index of financial services holding companies in the United States with assets of $3 billion to $10 billion, excluding corporations classified for federal income tax purposes as “S corporations,” which are identified in Appendix A to this proxy statement (the “$3 Billion to $10 Billion Industry Index”), for that same period. In addition, in order to earn any of the PBRSUs, Park’s consolidated net income for each fiscal year within the performance period must be equal to or greater than 110% of all cash dividends declared and paid during each applicable fiscal year. Additionally, PBRSUs have a more challenging payout curve than market practice as they do not provide for any payout below median relative performance and require 80th percentile relative performance to receive a maximum payout of 150% of target. |
| • | Significant vesting periods: PBRSUs earned based upon the financial results for the three-fiscal-year performance period, are subject to additional vesting requirements. One-half of the PBRSUs earned will vest on the date the Compensation Committee (or, when delegated such authority, the Executive Committee) certifies the results for the applicable performance period, with the remaining 50% of the earned PBRSUs vesting on the first anniversary of the certification date. |
| • | Additional holding requirements: Common shares received upon settlement of earned and vested PBRSUs cannot be sold, transferred, assigned or otherwise similarly disposed of for five years after the date they are delivered. |
TABLE OF CONTENTS | • | Limited executive benefits: NEOs receive the same fringe benefits as other employees, except that Park and Park National Bank have entered into supplemental executive retirement benefits agreements (“SERP Agreements”) with the NEOs which are intended to provide total retirement benefits (in terms of income replacement) that are comparable to those available to other employees in the Park organization with similar years of service. |
| • | No employment agreements: Park does not offer employment contracts, specific change-in-control agreements or termination benefits to the NEOs, in contrast to practices which are fairly common among other financial services holding companies of Park’s asset size. The impact of the termination of an NEO’s employment and the impact of a change in control upon the PBRSUs held by the NEO are described in the footnotes to the table included in the section captioned “Grants of Plan-Based Awards.” |
| • | Strong shareholder support: At the 2021 Annual Meeting, the Park shareholders approved Park’s executive compensation program through the annual “say on pay” vote, with approximately 97.9% of the total votes cast (excluding abstentions) voting “FOR” approval. |
Elements of Compensation for the 2021 Fiscal Year Park’s compensation program for the 2021 fiscal year relied on the following elements: Base salary, which rewards an NEO’s skills, competencies, experience and individual performance. Base salaries were set based on the NEOs’ duties and responsibilities, market pay levels and individual performance. Annual incentive compensation was modified for the 2021 fiscal year for Mr. Trautman, Mr. Burt and Mr. Miller. Due to his transition to retirement as an executive officer of Park and Park National Bank and an employee of Park National Bank on June 30, 2021, Mr. DeLawder is not to receive an annual incentive compensation award for the 2021 fiscal year determined in the same manner as for Mr. Trautman, Mr. Burt and Mr. Miller. Rather, the bonus Mr. DeLawder is to receive for his service during the six-month period from January 1, 2021 through June 30, 2021 is to be consistent with those paid to non-NEOs from the non-NEO bonus pool. The annual incentive compensation awards for Mr. Trautman, Mr. Burt and Mr. Miller remained discretionary in nature, but now also incorporated a comparison of actual financial results to internal financial targets. Each of Mr. Trautman, Mr. Burt and Mr. Miller was provided a target annual incentive compensation opportunity for the 2021 fiscal year which could be earned based on Park’s performance against preset goals for diluted earnings per share (“EPS”), pre-tax, pre-provision for (recovery of) credit losses return on average tangible equity (“PTPP ROATE”), pre-tax pre-provision for (recovery of) credit losses return on average tangible assets, with average tangible assets excluding the impact of average goodwill and other intangible assets on average assets (“PTPP ROATA”) and the efficiency ratio. Minimum and maximum levels of potential awards were available at 87.5% to 112.5% of the internal target for each of the preset goals for the financial measures described in the preceding sentence. In addition, the Compensation Committee has the ability to modify the calculated payment by up to 25% on a discretionary basis using factors such as relative TSR and ROAA and ROAE financial performance versus the Midwest Regional Compensation Peer Group and other factors. The payouts remained discretionary; however, the Compensation Committee took Park’s performance against budgeted financial targets into account when making the Compensation Committee’s decisions with respect to the annual incentive compensation awarded. Further details on Park’s financial performance and the awards made are included in the annual incentive compensation section later in this discussion. Long-term incentive awards in the form of PBRSUs which will vest based on Park’s cumulative ROAA for the three-fiscal-year performance period from January 1, 2021 through December 31, 2023, compared to the cumulative ROAA results of the $3 Billion to $10 Billion Industry Index for the same period. PBRSUs reward the NEOs for long-term financial results that are comparable to or better than those of other similarly-sized financial services holding companies, build ownership of Park common shares, strengthen alignment with the interests of Park shareholders and help retain key employees who are critical to Park’s long-term success. On December 8, 2020, the Compensation Committee granted awards of PBRSUs under the 2017 Employees LTIP to the NEOs with an effective date of January 1, 2021. The grant date target fair TABLE OF CONTENTS value of these PBRSU awards, which is based on achieving at least the 50th percentile of relative performance during the three-year performance period, was approximately 40% of base salary for each of Mr. Trautman and Mr. Miller and approximately 56% of base salary for Mr. Burt. The opportunities to earn the PBRSUs are generally conservative as compared to the long-term incentive opportunities offered to similarly-situated executive officers of the financial services holding companies in the $3 Billion to $10 Billion Industry Index, while requiring above median relative performance to receive a payout. The following discussion summarizes the foregoing factors and examines: (i) Park’s compensation philosophy and objectives; (ii) the process used to set executive compensation for the 2021 fiscal year; (iii) the factors influencing compensation for the 2021 fiscal year; (iv) the elements of compensation awarded; and (v) other policies affecting Park’s executive compensation program. Compensation Philosophy and Objectives Park’s success depends largely on the contributions of motivated, focused and energized leadership at each of Park’s subsidiaries, all working to achieve Park’s strategic objectives. The Compensation Committee and the senior leadership within the Park organization develop compensation programs for leaders within the Park organization intended to provide a total compensation package that: Attracts, rewards and retains NEOs and other highly-qualified employees. Motivates NEOs as well as other employees to achieve Park’s annual and long-term goals. Rewards individual effort and performance with the primary objectives of improving diluted EPS, PTPP ROATE, PTPP ROATA, the efficiency ratio, TSR, ROAE and ROAA. Considers the pay levels of the NEOs relative to executive officers serving in comparable positions at financial services holding companies in the Midwest Regional Compensation Peer Group. We review our performance relative to the Midwest Regional Compensation Peer Group. Encourages ownership of Park common shares by the NEOs and other senior leadership to foster a culture of ownership and increase their alignment with the interests of Park shareholders. Process Used to Set Compensation for the 2021 Fiscal Year The following three groups worked together to establish Park’s compensation program for the 2021 fiscal year: Compensation CommitteePerformance Highlights
The BoardPark continues to be a high performer and the results for the 2021 fiscal year continued that trend. Park’s management believes that its more mature markets in Ohio offer solid growth possibilities. They also believe newer markets in North Carolina, South Carolina and Louisville, Kentucky offer more robust growth potential in the future. COVID-19 has presented many challenges to Park and the financial services industry in general; however, Park achieved strong financial results for the 2020 fiscal year and even better results for the 2021 fiscal year.
Park achieved the following results for the 2021 fiscal year and the 2020 fiscal year: Net income increased by $26.0 million (from $127.9 million for the 2020 fiscal year to $153.9 million for the 2021 fiscal year). Return on average assets (“ROAA”) increased to 1.56% for the 2021 fiscal year from 1.38% for the 2020 fiscal year. Return on average common equity (“ROAE”) increased to 14.45% for the 2021 fiscal year from 12.68% for the 2020 fiscal year. Return on average tangible common equity (“ROATE”) increased to 17.15% for the 2021 fiscal year from 15.25% for the 2020 fiscal year. ROATE is calculated by dividing net income for the applicable year by average tangible equity (which excludes the impact of Directors hasaverage goodwill and other intangible assets on average shareholders’ equity) during such year. Average goodwill and other intangible assets were $168.0 million for the 2021 fiscal year and $170.0 million for the 2020 fiscal year. Park maintained strong capital and continued its long history of paying 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, each of whom also served as a memberconsistently competitive dividend, increasing the amount of the Compensation Committeedividend from the 2020 fiscal year. Park declared dividends in the aggregate amount of $4.52 per common share during the entire 20192021 fiscal year. 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 website at www.parknationalcorp.com. At least annually, the Compensation Committee reviews and reassesses the adequacy of the Compensation Committee Charter and recommends changesyear, compared to the full Boardaggregate amount 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 each 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 the 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 2019, Meridian assisted in the development of an updated Midwest Regional Peer Group and conducted a market assessment to guide 2019 and 2020 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 2019 fiscal year, Meridian did not provide, and$4.28 per common share during the 2020 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 2019 – 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 2019 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)(4) and Section 805(c) of the NYSE American Rules, after considering the six factors listed in SEC Rule 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 December 3, 2019. The Compensation Committee has determined that since 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 five times during the 2019 fiscal year. The compensation discussion and analysis regarding executive compensation for the 2019 fiscal year begins at page 41 and the Compensation Committee Report for the 2019 fiscal year begins on page 61.
Executive Committee
The Boardaggregate amount 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 2019 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. 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 authority: (i) to fill vacancies on the Board of Directors or in any Board committee; (ii) to amend our Regulations; (iii) that has been delegated by the full Board of Directors exclusively to one or more other Board committees; (iv) that applicable law or our governing documents do not permit to be delegated to a Board committee; (v) to recommend to the shareholders any action that requires shareholder approval, other than the election of directors; and (vi) to approve any merger or$4.24 per common share exchange which does not require shareholder approval.
The Executive Committee met ten times during the 2019 fiscal year.
Nominating Committee
TABLE OF CONTENTS On a relative basis, Park’s results continued to exceed the median 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’Neillboth the ROAE and Leon Zazworsky, each of whom also served as a member of the Nominating Committee duringROAA for the entire 2019 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 website at 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 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 andMidwest Regional Compensation Peer Group (Park’s compensation peer group identified 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 our 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 three times during the 2019 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, each of whom also served as a member of the Risk Committee during the entire 2019 fiscal year.
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 postedtable on the “Corporation Information ̶ Governance Documents” section of the “Investor Relations” page of Park’s website at 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 maintenance 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 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 five times during the 2019 fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the 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, each of whom served as a member of the Compensation Committee during the entire 2019
fiscal year. All of the 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 2019 fiscal year and during the 2020 fiscal year through the date[40] of this proxy statement noneand used for comparison purposes). Park’s financial performance on a reported U.S. GAAP basis is compared to that 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 the 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,comparison peer group in the ordinary course of their respective businesses and in compliance with applicable federal and state laws and regulations. The loansfollowing table:
| | ROAA | | | 1.56% | | | 95th | | | 1.28% | | | 1.38% | | | 100th | | | 0.99% | | | | ROAE | | | 14.45% | | | 95th | | | 10.38% | | | 12.68% | | | 100th | | | 8.11% | | | | Efficiency Ratio(1) | | | 61.27% | | | 10th | | | 58.01% | | | 62.83% | | | 16th | | | 58.04% | | | | TSR for one-year period(2) | | | 35.56% | | | 60th | | | 31.98% | | | (2) | | | (2) | | | (2) | | | | TSR for three-year period(2) | | | 83.77% | | | 100th | | | 30.11% | | | (2) | | | (2) | | | (2) | | | | TSR for five-year period(2) | | | 40.61% | | | 90th | | | 18.75% | | | (2) | | | (2) | | | (2) | |
(1)
| 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, assuming a 21% corporate federal income tax rate. |
(2)
| Total shareholder return (“TSR”) was considered by the Compensation Committee for the first time when reviewing Park’s financial results for the 2021 fiscal year and determining the annual incentive compensation awards for the 2021 fiscal year, which are to be paid in the 2022 fiscal year. |
By most measures, Park’s performance for the 2021 fiscal year continued to these persons were made on substantiallyexceed 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
Eachmedian results of the Midwest Regional Compensation Peer Group.
Compensation Program Highlights Park’s executive compensation program includes a number of features that we believe reflect best practices and promote the interests of Park executive officers is elected annually and serves at the pleasure of the Park Board of 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 officershareholders: | • | 100% performance-based long-term incentive awards: Park’s executive officers are granted 100% of their long-term incentive compensation as equity-based compensation in the form of PBRSUs which have historically been earned based on the cumulative ROAA for a three-fiscal-year performance period as compared to the cumulative ROAA results for the Industry Index of financial services holding companies in the United States with assets of $3 billion to $10 billion, excluding corporations classified for federal income tax purposes as “S corporations,” which are identified in Appendix A to this proxy statement (the “$3 Billion to $10 Billion Industry Index”), for that same period. In addition, in order to earn any of the PBRSUs, Park’s consolidated net income for each fiscal year within the performance period must be equal to or greater than 110% of all cash dividends declared and paid during each applicable fiscal year. Additionally, PBRSUs have a more challenging payout curve than market practice as they do not provide for any payout below median relative performance and require 80th percentile relative performance to receive a maximum payout of 150% of target. |
| • | Significant vesting periods: PBRSUs earned based upon the financial results for the three-fiscal-year performance period, are subject to additional vesting requirements. One-half of the PBRSUs earned will vest on the date the Compensation Committee (or, when delegated such authority, the Executive Committee) certifies the results for the applicable performance period, with the remaining 50% of the earned PBRSUs vesting on the first anniversary of the certification date. |
| • | Additional holding requirements: Common shares received upon settlement of earned and vested PBRSUs cannot be sold, transferred, assigned or otherwise similarly disposed of for five years after the date they are delivered. |
TABLE OF CONTENTS | • | Limited executive benefits: NEOs receive the same fringe benefits as other employees, except that Park and our principal subsidiaries and his individual business experience. | | | | | | | | | Name | Age | Positions Held with Park and Our
Principal Subsidiaries and Principal Occupation
| David L. Trautman | 58 | Chairman of the Board since May 2019, Chief Executive Officer since January 2014, 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, 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 January 2005, Mr. Trautman served in executive positions with Park National Bank and thenhave entered into supplemental executive retirement benefits agreements (“SERP Agreements”) with the First-Knox National Bank Division for over ten years.NEOs which are intended to provide total retirement benefits (in terms of income replacement) that are comparable to those available to other employees in the Park organization with similar years of service. |
Matthew R. Miller• | 41 | President since May 2019, a memberNo employment agreements: Park does not offer employment contracts, specific change-in-control agreements or termination benefits to the NEOs, in contrast to practices which are fairly common among other financial services holding companies of Park’s asset size. The impact of the Boardtermination of Directors since May 2019, Executive Vice President from April 2017an NEO’s employment and the impact of a change in control upon the PBRSUs held by the NEO are described in the footnotes to the table included in the section captioned “Grants of Plan-Based Awards.” |
| • | Strong shareholder support: At the 2021 Annual Meeting, the Park shareholders approved Park’s executive compensation program through April 2019, and Chief Accounting Officer and principal accounting officer from December 2012 through March 2017, of Park; President since May 2019, a memberthe annual “say on pay” vote, with approximately 97.9% 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. |
| | | | | | | | | Name | Age | Positions Held with Park and Our
Principal Subsidiaries and Principal Occupation
| Brady T. Burt | 47 | 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 | total votes cast (excluding abstentions) voting 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 March“FOR” 1992 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.approval. |
Elements of Compensation for the 2021 Fiscal Year
VOTE ON APPROVAL OF NON-BINDING ADVISORY RESOLUTION 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 enablePark’s compensation program for the Park shareholders to vote to approve,2021 fiscal year relied 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:elements:
“RESOLVED, that the shareholders of Park National Corporation (“Park”) approve, onBase salary, which rewards an advisory basis, the compensation of Park’s named executive officers as disclosed in Park’s proxy statement for its 2020 Annual Meeting of Shareholders pursuant to Item 402 of SEC Regulation S-K, including in the “Compensation DiscussionNEO’s skills, competencies, experience and Analysis,” the “Summary Compensation Table for 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 the 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 the Park shareholders. Park’s incentive programs areindividual performance. Base salaries were set based on Park’s performance in comparison to Park’s peer financial services holding companies. The Board of Directors believes that Park’s executive compensation programs are reasonable in comparison both to those peer financial services holding companiesthe NEOs’ duties and to Park’s performance during the 2019 fiscal year.responsibilities, market pay levels and individual performance.
Annual incentive compensation
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 the 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 the last eleven 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 shareholders in connection with Park’s participation in the 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 the 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 the Park Board of Directors or the Compensation Committee; or (iii) create or imply any additional fiduciary duty by the 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 atmodified for the 2021 Annual Meeting.
Recommendation
THE COMPENSATION COMMITTEE AND THE FULL BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT THE PARK SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE NON-BINDING ADVISORY RESOLUTION TO APPROVE THE COMPENSATION OF PARK’S NAMED EXECUTIVE OFFICERS.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Summary
The Compensation Committee determines the compensation of Park’s named executive officers (also known as the “NEOs”), consisting of the following individualsfiscal year for 2019:
•David L. Trautman, Chairman of the Board and Chief Executive Officer (the “Chairman/CEO”)
•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 electedMr. Burt and Mr. Miller. Due to servehis transition to retirement 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 eachan executive officer of Park and Park National Bank and an executive officeremployee of Park. Mr. DeLawder also continues his employment with Park National Bank on June 30, 2021, Mr. DeLawder is not to receive an annual incentive compensation award for the 2021 fiscal year determined in the same manner as for Mr. Trautman, Mr. Burt and Mr. Miller. Rather, the bonus Mr. DeLawder is to receive for his service during the six-month period from January 1, 2021 through June 30, 2021 is to be consistent with those paid to non-NEOs from the non-NEO bonus pool. The annual incentive compensation awards for Mr. Trautman, Mr. Burt and Mr. Miller remained discretionary in nature, but now also incorporated a reduced capacity.comparison of actual financial results to internal financial targets. Each of Mr. Trautman, Mr. Burt and Mr. Miller was provided a target annual incentive compensation opportunity for the 2021 fiscal year which could be earned based on Park’s performance against preset goals for diluted earnings per share (“EPS”), pre-tax, pre-provision for (recovery of) credit losses return on average tangible equity (“PTPP ROATE”), pre-tax pre-provision for (recovery of) credit losses return on average tangible assets, with average tangible assets excluding the impact of average goodwill and other intangible assets on average assets (“PTPP ROATA”) and the efficiency ratio. Minimum and maximum levels of potential awards were available at 87.5% to 112.5% of the internal target for each of the preset goals for the financial measures described in the preceding sentence. In addition, the Compensation Committee has the ability to modify the calculated payment by up to 25% on a discretionary basis using factors such as relative TSR and ROAA and ROAE financial performance versus the Midwest Regional Compensation Peer Group and other factors. The payouts remained discretionary; however, the Compensation Committee took Park’s performance against budgeted financial targets into account when making the Compensation Committee’s decisions with respect to the annual incentive compensation awarded.
Further details on Park’s financial performance and the awards made are included in the annual incentive compensation section later in this discussion. Long-term incentive awards in the form of PBRSUs which will vest based on Park’s cumulative ROAA for the three-fiscal-year performance period from January 1, 2021 through December 31, 2023, compared to the cumulative ROAA results of the $3 Billion to $10 Billion Industry Index for the same period. PBRSUs reward the NEOs for long-term financial results that are comparable to or better than those of other similarly-sized financial services holding companies, build ownership of Park common shares, strengthen alignment with the interests of Park shareholders and help retain key employees who are critical to Park’s long-term success. On December 8, 2020, the Compensation Committee granted awards of PBRSUs under the 2017 Employees LTIP to the NEOs with an effective date of January 1, 2021. The grant date target fair TABLE OF CONTENTS value of these PBRSU awards, which is based on achieving at least the 50th percentile of relative performance during the three-year performance period, was approximately 40% of base salary for each of Mr. Trautman and Mr. Miller and approximately 56% of base salary for Mr. Burt. The opportunities to earn the PBRSUs are generally conservative as compared to the long-term incentive opportunities offered to similarly-situated executive officers of the financial services holding companies in the $3 Billion to $10 Billion Industry Index, while requiring above median relative performance to receive a payout. The following discussion summarizes the foregoing factors and examines: (i) Park’s compensation philosophy and objectives; (ii) the process used to set executive compensation for the 2021 fiscal year; (iii) the factors influencing compensation for the 2021 fiscal year; (iv) the elements of compensation awarded; and (v) other policies affecting Park’s executive compensation program. Compensation Philosophy and Objectives Park’s success depends largely on the contributions of motivated, focused and energized leadership at each of Park’s subsidiaries, all working to achieve Park’s strategic objectives. The Compensation Committee and the senior leadership within the Park organization develop compensation programs for leaders within the Park organization intended to provide a total compensation package that: Attracts, rewards and retains NEOs and other highly-qualified employees. Motivates NEOs as well as other employees to achieve Park’s annual and long-term goals. Rewards individual effort and performance with the primary objectives of improving diluted EPS, PTPP ROATE, PTPP ROATA, the efficiency ratio, TSR, ROAE and ROAA. Considers the pay levels of the NEOs relative to executive officers serving in comparable positions at financial services holding companies in the Midwest Regional Compensation Peer Group. We review our performance relative to the Midwest Regional Compensation Peer Group. Encourages ownership of Park common shares by the NEOs and other senior leadership to foster a culture of ownership and increase their alignment with the interests of Park shareholders. Process Used to Set Compensation for the 2021 Fiscal Year The following three groups worked together to establish Park’s compensation program for the 2021 fiscal year: Performance Highlights Park continues to be a high performer and the results for 2019the 2021 fiscal year 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,trend. Park’s management believes that Park’s newits more mature markets in Ohio offer solid growth possibilities. They also believe newer markets in North Carolina, South Carolina and Louisville, Kentucky put Park in a good position foroffer more robust growth potential in the future. Park achieved the results summarized below for 2019, which include financial informationCOVID-19 has 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 acquisitionsmany challenges to Park and the financial services industry in general; however, Park shareholders.
achieved strong financial results for the 2020 fiscal year and even better results for the 2021 fiscal year.Park achieved the following results for 2019the 2021 fiscal year and 2018 on an adjusted basis:the 2020 fiscal year: •Net income increased modestly by $0.6$26.0 million (from $104.9$127.9 million for 2018the 2020 fiscal year to $105.5$153.9 million for 2019)the 2021 fiscal year).
•Return on average assets (“ROAA”) declinedincreased to 1.24%1.56% for 2019the 2021 fiscal year from 1.38% for 2018.the 2020 fiscal year.
•Return on average common equity (“ROAE”) declinedincreased to 11.44%14.45% for 2019the 2021 fiscal year from 13.38%12.68% for 2018.the 2020 fiscal year.
•Return on average tangible common equity (“ROATE”) declinedincreased to 13.81%17.15% for 2019the 2021 fiscal year from 15.26%15.25% for 2018.the 2020 fiscal year. ROATE is calculated by dividing net income for the applicable year by average tangible equity (which excludes the impact of average goodwill and other intangiblesintangible assets on average shareholders’ equity) during such year. Average goodwill and other intangiblesintangible assets were $158.2$168.0 million for 2019the 2021 fiscal year and $96.4$170.0 million for 2018.the 2020 fiscal year.
•Park maintained strong capital and continued its long history of paying a consistently competitive dividend, increasing the amount of the dividend from the prior2020 fiscal year. Park declared dividends in the aggregate amount of $4.24$4.52 per common share in 2019,during the 2021 fiscal year, compared to the aggregate amount of $4.07$4.28 per common share in 2018 – an increase of 4.2%. Park had increasedduring the 2020 fiscal year and the aggregate amount of dividends declared in 2018 by 8% from those declared in 2017.$4.24 per common share during the 2019 fiscal year.
TABLE OF CONTENTS On a relative basis, Park’s results continued to exceed the median of both the ROAE and approximated the median of the ROAA for the Midwest Regional Compensation Peer Group (our(Park’s compensation peer group identified in the tablestable on page 45) as well as a broader Industry Index[40] 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”)this proxy statement and used for comparison purposes). 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. The PBRSU awards granted effective on January 1, 2019 used 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 financial performance on a reported U.S. GAAP basis and on an adjusted basis is compared to the two comparator groupsthat of Park’s comparison peer group in the following tables:table:| | ROAA | | | 1.56% | | | 95th | | | 1.28% | | | 1.38% | | | 100th | | | 0.99% | | | | ROAE | | | 14.45% | | | 95th | | | 10.38% | | | 12.68% | | | 100th | | | 8.11% | | | | Efficiency Ratio(1) | | | 61.27% | | | 10th | | | 58.01% | | | 62.83% | | | 16th | | | 58.04% | | | | TSR for one-year period(2) | | | 35.56% | | | 60th | | | 31.98% | | | (2) | | | (2) | | | (2) | | | | TSR for three-year period(2) | | | 83.77% | | | 100th | | | 30.11% | | | (2) | | | (2) | | | (2) | | | | TSR for five-year period(2) | | | 40.61% | | | 90th | | | 18.75% | | | (2) | | | (2) | | | (2) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 Median(1) | | Park | | Midwest Regional Compensation Peer Group Median | | $3 Billion to $10 Billion Industry Index Median | | | ROAA | 1.21 | % | 1.31 | % | 1.17 | % | 1.45 | % | 1.37 | % | 1.22 | % | | ROAE | 11.14 | % | 10.32 | % | 10.14 | % | 14.08 | % | 10.97 | % | 10.76 | % | | Net Interest Margin | 3.89 | % | 3.70 | % | 3.53 | % | 3.84 | % | 3.58 | % | 3.61 | % | | Other Fee Income/Average Total Assets | 1.15 | % | 1.06 | % | 0.83 | % | 1.33 | % | 1.07 | % | 0.83 | % | Other Expenses/Average Total Assets(2) | 3.12 | % | 2.72 | % | 2.51 | % | 3.00 | % | 2.66 | % | 2.56 | % | Efficiency Ratio(3) | 66.35 | % | 56.82 | % | 58.48 | % | 61.68 | % | 56.67 | % | 59.71 | % |
________________________
(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
(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.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 | % |
________________________
(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.
(1)
| 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, assuming a 21% corporate federal income tax rate. |
(2)
| Total shareholder return (“TSR”) was considered by the Compensation Committee for the first time when reviewing Park’s financial results for the 2021 fiscal year and determining the annual incentive compensation awards for the 2021 fiscal year, which are to be paid in the 2022 fiscal year. |
By most measures, Park’s performance in 2019for the 2021 fiscal year 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 (historically used for PBRSUs). As of December 31, 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.Group. The financial services holding companies included in the Midwest Regional Compensation Peer Group for purposes of determining the base salaries of the NEOs for 2019 and the performance criteria for the PBRSUs granted to the NEOs on January 1, 2019 are identified in the following table. At the time these determinations were made, the financial services holding companies identified in the following table were the Midwest financial services holding companies with asset sizes that positioned Park at approximately the median:
| | | | | | Midwest Regional Compensation Peer Group for
2019 Base Salaries
and January 1, 2019 PBRSU Grants
| | 1st Source Corporation
Chemical Financial Corporation
City Holding Company
Community Bank System, Inc.
Community Trust Bancorp, Inc.
First Busey Corporation
First Commonwealth Financial Corporation
First Financial Bancorp.
First Merchants Corporation
First Midwest Bancorp, Inc.
Flagstar Bancorp, Inc.
| Lakeland Financial Corporation
MainSource Financial Group, Inc.
NBT Bancorp Inc.
Northwest Bancshares, Inc.
Old National Bancorp
Republic Bancorp, Inc.
S&T Bancorp, Inc.
Tompkins Financial Corporation
United Bankshares, Inc.
WesBanco, Inc.
|
The financial services holding companies included in the Midwest Regional Compensation Peer Group for purposes of determining the annual cash incentive awards earned by the NEOs for performance with respect to the twelve-month period ended September 30, 2019 and the base salaries of the NEOs for 2020 are identified in the following table. At the time these determinations were made, the financial services holding companies identified in the following table were the Midwest financial services holding companies with asset sizes that positioned Park at approximately the median:
| | | | | | Midwest Regional Compensation Peer Group for
Annual Cash Incentive Awards for the 12-month period ended September 30, 2019
and 2020 Base Salaries
| | 1st Source Corporation
Byline Bancorp, Inc.
Community Bank System, Inc.
Enterprise Financial Services Corp
First Bancorp
First Busey Corporation
First Commonwealth Financial Corporation
First Financial Bancorp.
First Merchants Corporation
First Midwest Bancorp, Inc.
| Horizon Bancorp, Inc.
Midland States Bancorp, Inc.
NBT Bancorp Inc.
Northwest Bancshares, Inc.
Peoples Bancorp Inc.
QCR Holdings, Inc.
Republic Bancorp, Inc.
S&T Bancorp, Inc.
Tompkins Financial Corporation
WesBanco, Inc.
|
Overall, Park’s performance in 2019 supports the pay levels of our executive officers as compared to similarly-situated executive officers at other financial services holding companies in the Midwest Regional Compensation Peer Group used as the comparator group.
Compensation Program Highlights Park’s executive compensation program includes a number of features that we believe reflect best practices and promote the interests of Park shareholders:
| • | 100% performance-based long-term incentive awards: Park’s executive officers are granted 100% of their long-term incentive compensation as equity-based compensation in the form of PBRSUs which have historically been earned based on the cumulative ROAA for a three-fiscal-year performance period as compared to the cumulative ROAA results for the Industry Index of financial services holding companies in the United States with assets of $3 billion to $10 billion, excluding corporations classified for federal income tax purposes as “S corporations,” which are identified in Appendix A to this proxy statement (the “$3 Billion to $10 Billion Industry Index”), for that same period. In addition, in order to earn any of the PBRSUs, Park’s consolidated net income for each fiscal year within the performance period must be equal to or greater than 110% of all cash dividends declared and paid during each applicable fiscal year. Additionally, PBRSUs have a more challenging payout curve than market practice as they do not provide for any payout below median relative performance and require 80th percentile relative performance to receive a maximum payout of 150% of target. |
| • | Significant vesting periods: PBRSUs earned based upon the financial results for the three-fiscal-year performance period, are subject to additional vesting requirements. One-half of the PBRSUs earned will vest on the date the Compensation Committee (or, when delegated such authority, the Executive Committee) certifies the results for the applicable performance period, with the remaining 50% of the earned PBRSUs vesting on the first anniversary of the certification date. |
| • | Additional holding requirements: Common shares received upon settlement of earned and vested PBRSUs cannot be sold, transferred, assigned or otherwise similarly disposed of for five years after the date they are delivered. |
•100% performance-based long-term incentives: Park’s executive officers are granted 100% of their long-term incentive compensation as equity-based compensation in the form of PBRSUs which have historically been earned based on the cumulative ROAA for a three-fiscal-year performance period as compared to the cumulative ROAA results for the $3 billion to $10 billion Industry Index for that same period (the Midwest Regional Compensation Peer Group being used as the comparator group only for grants made effective on January 1, 2019). In addition, in order to earn any of the PBRSUs, Park’s consolidated net income for each fiscal year within the performance period must be equal to or greater than 110% of all cash dividends declared and paid during each applicable fiscal year. Additionally, PBRSUs have a more challenging payout curve than market practice as they require median relative performance for target payouts and 80th percentile performance to receive a maximum payout.
TABLE OF CONTENTS •Significant vesting periods: PBRSUs earned based upon the financial results for the three-fiscal-year performance period, are subject to additional vesting requirements. One-half of the PBRSUs earned will vest on the date the Compensation Committee certifies the results for the applicable performance period, with the remaining 50% of the earned PBRSUs vesting on the first anniversary of the certification date.
•Additional holding requirements: Common shares received upon settlement of earned and vested PBRSUs cannot be sold, transferred, assigned or otherwise similarly disposed of for five years after the date they are delivered.
•Limited executive benefits: NEOs receive the same fringe benefits as other employees, except that Park and Park National Bank have entered into supplemental executive retirement benefits agreements (“SERP Agreements”) with the NEOs which are intended to provide total retirement benefits (in terms of income replacement) that are comparable to those available to other employees in the Park organization with similar years of service.
•No employment agreements: Park does not offer employment contracts, specific change-in-control agreements or termination benefits to the NEOs, in contrast to practices which are fairly common among other financial services holding companies of Park’s asset size. The impact of the termination of an NEO’s employment and the impact of a change in control upon the PBRSUs held by the NEO are described in the footnotes to the table included in the section captioned “Grants of Plan-Based Awards”.
•Strong shareholder support: At the 2019 Annual Meeting, Park’s shareholders approved Park’s executive compensation program through the annual “say on pay” vote, with approximately 97.8% of the total votes cast (excluding abstentions) voting “FOR| • | Limited executive benefits: NEOs receive the same fringe benefits as other employees, except that Park and Park National Bank have entered into supplemental executive retirement benefits agreements (“SERP Agreements”) with the NEOs which are intended to provide total retirement benefits (in terms of income replacement) that are comparable to those available to other employees in the Park organization with similar years of service. |
| • | No employment agreements: Park does not offer employment contracts, specific change-in-control agreements or termination benefits to the NEOs, in contrast to practices which are fairly common among other financial services holding companies of Park’s asset size. The impact of the termination of an NEO’s employment and the impact of a change in control upon the PBRSUs held by the NEO are described in the footnotes to the table included in the section captioned “Grants of Plan-Based Awards.” approval. |
| • | Strong shareholder support: At the 2021 Annual Meeting, the Park shareholders approved Park’s executive compensation program through the annual “say on pay” vote, with approximately 97.9% of the total votes cast (excluding abstentions) voting “FOR” approval. |
Elements of Compensation for 2019the 2021 Fiscal Year Park’s compensation program for 2019the 2021 fiscal year relied on the following elements: •Base salary, which rewards an NEO’s skills, competencies, experience and individual performance. Base salaries were set based on the NEO’sNEOs’ duties and responsibilities, market pay levels and individual performance. •Annual incentive compensation was modified for Messrs.the 2021 fiscal year for Mr. Trautman, Mr. Burt Miller and Mr. Miller. Due to his transition to retirement as an executive officer of Park and Park National Bank and an employee of Park National Bank on June 30, 2021, Mr. DeLawder are discretionaryis not to receive an annual incentive compensation award for the 2021 fiscal year determined in nature. While discretionary, actualthe same manner as for Mr. Trautman, Mr. Burt and Mr. Miller. Rather, the bonus Mr. DeLawder is to receive for his service during the six-month period from January 1, 2021 through June 30, 2021 is to be consistent with those paid to non-NEOs from the non-NEO bonus pool. The annual incentive compensation awards for 2019
took into consideration bothMr. Trautman, Mr. Burt and Mr. Miller remained discretionary in nature, but now also incorporated a comparison of actual financial results to internal financial targets. Each of Mr. Trautman, Mr. Burt and Mr. Miller was provided a target annual incentive compensation opportunity for the 2021 fiscal year which could be earned based on Park’s reportedperformance against preset goals for diluted earnings per share (“EPS”), pre-tax, pre-provision for (recovery of) credit losses return on average tangible equity (“PTPP ROATE”), pre-tax pre-provision for (recovery of) credit losses return on average tangible assets, with average tangible assets excluding the impact of average goodwill and adjusted ROAA, ROAEother intangible assets on average assets (“PTPP ROATA”) and ROATE, inthe efficiency ratio. Minimum and maximum levels of potential awards were available at 87.5% to 112.5% of the internal target for each case relative to otherof the preset goals for the financial services holding companiesmeasures described in the $3 billionpreceding sentence. In addition, the Compensation Committee has the ability to $10 billion Industry Indexmodify the calculated payment by up to 25% on a discretionary basis using factors such as relative TSR and inROAA and ROAE financial performance versus the Midwest Regional Compensation Peer Group as well as subjective evaluations byand other factors. The payouts remained discretionary; however, the Compensation Committee took Park’s performance against budgeted financial targets into account when making the Compensation Committee’s decisions with respect to the annual incentive compensation awarded.
Further details on Park’s financial performance and the Executive Committee of the Park Board of Directors. ROAA and ROAE for Park, on a reported U.S. GAAP basis and on an adjusted basis, for the twelve-month periods ended September 30, 2019 and September 30, 2018awards made are summarized below: | | | | | | | | | | | | | | | | | | | | | | | Twelve Months Ended September 30, 2019 | | | | | | | Reported U.S. GAAP Results | | | Adjusted Results | | | | 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 | | ROAA | 1.27 % | 1.32 % | 1.20 % | 1.34 % | 1.32 % | 1.20 % | | ROAE | 11.86 % | 10.66 % | 10.38 % | 12.44 % | 10.66 % | 10.38 % |
| | | | | | | | | | | | | | | | | | | | | | | Twelve Months Ended September 30, 2018 | | | | | | | Reported U.S. GAAP Results | | | Adjusted Results | | | | 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 | | ROAA | 1.40 % | 1.13 % | 1.07 % | 1.34 % | 1.13 % | 1.07 % | | ROAE | 13.89 % | 9.75 % | 9.87 % | 13.23 % | 9.75 % | 9.87 % |
Cash incentive awards earned for performance for the twelve-month period ended September 30, 2019 were 40%, 46%, 25% and 29% of the respective 2019 base salaries for each of Messrs. Trautman, Burt, Miller and DeLawder, respectively. This represented <decreases>/an increase of <15%>, <8%>, 54% and <37%>included in the level ofannual incentive compensation for the twelve-month period ended September 30, 2019 for each of Messrs. Trautman, Burt, Miller and DeLawder as compared to the level ofsection later in this discussion.
Long-term incentive compensation for the twelve-month period ended September 30, 2018. Mr. Miller had been promoted to President of Park effective May 1, 2019; therefore, the incentive compensation he received for the twelve-month period ended September 30, 2019 was increased commensurate with the change in his level of responsibility. The Compensation Committee of the Park Board of Directors felt that since absolute and relative performance for the twelve-month period ended September 30, 2019 decreased compared to the same metrics for the twelve-month period ended September 30, 2018, incentive compensation for the NEOs (with the exception of Mr. Miller due to the change in his level of responsibility) should decrease as well. •awardsLong-term incentives in the form of PBRSUs which will vest based on Park’s cumulative ROAA for the three-fiscal-year performance period from January 1, 20192021 through December 31, 2021,2023, compared to the cumulative ROAA results of the Midwest Regional Compensation Peer Group used as the comparator group$3 Billion to $10 Billion Industry Index for the same period. PBRSUs
reward the NEOs for long-term financial results that are comparable to or better than those of other similarly-sized financial services holding companies, build ownership of Park common shares, strengthen alignment with the interests of Park shareholders’ interestsshareholders and help retain key employees who are critical to Park’s long-term success. On November 19, 2018,December 8, 2020, the Compensation Committee granted awards of PBRSUs under the 2017 Employees LTIP to the NEOs with an effective date of January 1, 2019.2021. The grant date target fair TABLE OF CONTENTS value of these PBRSU awards, which is based on achieving at least the 50th percentile of relative performance during the three-year performance period, ranged fromwas approximately 33%40% of base salary for each of Mr. Trautman and Mr. Miller and approximately 56% of base salary for Mr. Burt. The opportunities to 60% ofearn the NEOs’ respective 2019 base salaries. These opportunitiesPBRSUs are generally conservative as compared to the long-term incentive opportunities offered to similarly-situated executive officers of the financial services holding companies in the Midwest Regional Compensation Peer Group used as the comparator group,$3 Billion to $10 Billion Industry Index, while requiring above median relative performance to receive a payout. The following discussion that follows summarizes the foregoing factors and examinesexamines: (i) Park’s compensation philosophy and objectives,objectives; (ii) the process used to set executive compensation for 2019,the 2021 fiscal year; (iii) the factors influencing compensation in 2019,for the 2021 fiscal year; (iv) the elements of compensation awardedawarded; and (v) other policies affecting Park’s executive compensation program. Compensation Philosophy and Objectives Park’s success depends largely on the contributions of motivated, focused and energized leadership at each of Park’s subsidiaries, (and their divisions), all working to achieve Park’s strategic objectives. The Compensation Committee and the senior leadership within the Park organization develop compensation programs for leaders within the Park organization intended to provide a total compensation package that: •Attracts, rewards and retains NEOs and other highly-qualified employees.
•Motivates NEOs as well as other employees to achieve Park’s annual and long-term goals.
•Rewards individual effort and performance with the primary objectives of improving diluted EPS, PTPP ROATE, PTPP ROATA, the efficiency ratio, TSR, ROAE as well asand ROAA.
•Considers the pay levels of the NEOs relative to executive officers serving in comparable positions at financial services holding companies in the Midwest Regional Compensation Peer Group. We review our performance relative to the Midwest Regional Compensation Peer Group as well as the broader $3 billion to $10 billion Industry Index.Group.
•Encourages ownership of Park common shares by the NEOs and other senior leadership to foster a culture of ownership and increase their alignment with shareholders’ interests.the interests of Park shareholders.
Process Used to Set Compensation for 2019the 2021 Fiscal YearThe following fourthree groups worked together to establish Park’s compensation program for 2019:the 2021 fiscal year: •Compensation Committee
•NEOs
•Other Senior Leadership
•Outside Advisors
Role of Compensation Committee The Compensation Committee is responsible for overseeing Park’s current executive compensation program and approving any modifications to this program, subject to any required approval by the Park shareholders. The Compensation Committee may request information from senior leadership within the Park organization regarding Park’s performance, compensation practices and programs to assist the Compensation Committee in its deliberations. The Compensation Committee retains the right to hire outside advisors as needed to assist the Compensation Committee in reviewing and revising Park’s compensation programs. In addition, outside advisors may provide information regarding competitive compensation levels, practices and policies in light of current trends. The Compensation Committee annually assesses the performance of Park and the level of achievement of the Chairman/CEO relative to annual performance goals, many of which are subjective in nature. Based on this evaluation, which includes input from the other members of the Park Board of Directors, the Compensation Committee determines the compensation of the Chairman/CEO for the year. The Compensation Committee also reviews the Chairman/CEO’s compensation recommendations for the President and the CFO and, for the 2020 fiscal year and prior years, reviewed the Chairman/CEO’s compensation recommendation for the Executive Committee Chairman, seeks appropriate input from Park’s outside advisors and other members of senior leadership within the Park organization and approves final compensation levels for the President and the CFO and, for the 2020 fiscal year and prior years, approved the final compensation level for the Executive Committee Chairman. TABLE OF CONTENTS Role of NEOs and Other Senior Leadership Members of senior leadership within the Park organization serve in an advisory or support capacity to the Compensation Committee. Typically, the NEOs, as well asChairman/CEO and the Senior Vice President of Human Resources and Marketing of Park National Bank, participate in meetings of the Compensation Committee. These individualsThey provide the Compensation Committee with information regarding Park’s financial performance. They also provide input regarding the NEO compensation recommendations made by outside advisors or the Compensation Committee. These individuals may also present alternatives to these compensation recommendations for the Compensation Committee’s consideration. However, the Compensation Committee is the ultimate decision-making body.
The Chairman/CEO evaluates the annual performance of the President and the CFO and, for the 2020 fiscal year and prior years, the Chairman/CEO evaluated the annual performance of the Executive Committee Chairman, including their respective levels of achievement relative to annual performance goals, many of which are subjective in nature. The goals focus, directly or indirectly, on the performance of Park and on shareholder value. Based on this evaluation, the Chairman/CEO recommends the compensation for each of the President and the CFO and, for the 2020 fiscal year and prior years, the Chairman/CEO recommended the compensation for the Executive Committee Chairman, for consideration, input and approval by the Compensation Committee. The Compensation Committee authorizes the Chairman/CEO to establish the compensation for all other employees. Discussions regarding the NEOs’ compensation take place during executive sessions of the Compensation Committee, after the NEOs have left the meeting. Role of Outside Advisors The Compensation Committee considers input from outside compensation advisors as the Compensation Committee manages Park’s compensation programs. During 2019,the 2021 fiscal year, Meridian Compensation Partners LLC (“Meridian”) served as an independent compensation advisor toprovided consulting advice which included: (i) assisting Park’s management and the Compensation Committee. Meridian assistedCommittee with the drafting of the Compensation Discussion and Analysis included in the development of an updated Midwest Regional
Compensation Peer Group, conductedproxy statement for the 2021 Annual Meeting; (ii) sharing general non-company-specific information with Park’s management regarding compensation issues to be considered in a market assessmentpandemic; and (iii) providing feedback to guide 2019 compensation decisionsPark’s management and provided information on trends and industry practices. Meridian provided advice as requested by the Compensation Committee.Committee with respect to potential changes in the compensation program for Park’s executive officers and senior officers with Park’s subsidiaries. Meridian reports directly to the members of the Compensation Committee, who approve the work conducted by Meridian. The Compensation Committee’s outside compensation advisor interacted with senior leadership within the Park organization as needed to complete the work requested by the Compensation Committee. During the 2021 fiscal year, Meridian did not provide other services to Park or any of Park’s subsidiaries other than those provided to the Compensation Committee,described above, supplementing the Compensation Committee’s governance of the executive compensation program. The Compensation Committee conducted an assessment to evaluate whether the work performed and to be performed by Meridian raises any conflicts of interest or compromises the independence of Meridian. Based upon this assessment, the Compensation Committee determined that no conflicts of interest exist and Meridian qualifies as independent for purposes of the applicable NYSE American and SEC rules.
Periodically, the Compensation Committee asks its independent compensation advisor to review the financial services holding companies included in the Midwest Regional Compensation Peer Group and analyze Park’s compensation and ROAE results (as well as financial achievements) relative to the members of that peer group to establish reasonable and rational compensation levels. The Midwest Regional Compensation Peer Group used for purposes of determining the 2019 base salaries of the NEOs andfor the PBRSUs granted to the NEOs on January 1, 2019 consisted of 21regional financial services holding companies, all with assets between $4 billion2021 fiscal year, and $19 billion at the time of selection (or approximately one-half to two times Park’s asset size). The Midwest Regional Compensation Peer Group used for purposes of determining the annual cash incentive compensation awards earned by the NEOs for performance with respect toduring the twelve-month period ended September 30, 2019 and the base salaries of the NEOs for 20202021 fiscal year consisted of 20 regional financial services holding companies, all with assets between $4$6.1 billion and $16$21.8 billion at the time of selection (or approximately one-half to two times Park’s asset size). The median assets of the members of the Midwest Regional Compensation Peer Group used as the comparator group generally reflect Park’s asset size, with Park’s asset size ranking at approximately the median of such Midwest Regional Compensation Peer Group. The tablestable identifying the financial services holding companies included in the Midwest Regional Compensation Peer Group used as the comparator group for purposes of 2019 compensation decisions arefor the 2021 fiscal year is included in the section captioned “Midwest Regional Peer Group“Executive Summary – Performance Highlights.”. In addition to Meridian, the Compensation Committee relies on legal advice from Park’s outside counsel, Vorys, Sater, Seymour and Pease LLP, whose attorneys participate in meetings of the Compensation Committee as requested. In connection with obtaining such legal advice, the Compensation Committee has taken into consideration those factors outlined in both SEC Rule 10C-1(b)(4)(i) through (vi) and Section 805(c)(4) of the NYSE American Rules. TABLE OF CONTENTS Park believes its approach to determining the compensation of its NEOs is both conservative and consistent with the practices for other financial services holding companies of Park’s asset size, reflects customary practices regarding the governance of executive compensation programs and supports the compensation program’s objectives of delivering compensation aligned with shareholders’ interests.the interests of Park shareholders. Moreover, the approach has been consistently applied for the past several years. Factors Influencing Compensation in 2019for the 2021 Fiscal YearThe following factors influenced Park’s compensation program for 2019:the 2021 fiscal year: •The shareholders’ advisory vote at the 20192021 Annual Meeting regarding management’s proposal for approval of the compensation of Park’s NEOs.
•Park’s continued strong financial performance in 2018the 2020 fiscal year and 2019,the 2021 fiscal year, as shown in the section captioned “Executive“Executive Summary – Performance Highlights.”.
•Park’s performance in comparison to the financial services holding companies in each of the $3 billion to $10 billion Industry Index and the Midwest Regional Compensation Peer Group used as the comparator group, as shown in the section captioned “Executive“Executive Summary – Performance Highlights.”. •Pay practices at the financial services holding companies in the Midwest Regional Compensation Peer Group used as the comparator group.Group.
20192021 Shareholders’ Advisory Vote on Executive Compensation
At the 20192021 Annual Meeting, Park’s shareholders approved Park’s executive compensation, with approximately 97.8%97.9% of the total votes cast (excluding abstentions) in respect of the non-binding advisory vote on executive compensation, voting “FOR” approval. The result was similar to the results from the non-binding advisory vote by Park’sthe Park shareholders on executive compensation held in 2018.2020. As such, Park and the Compensation Committee viewed the results of this advisory vote as a continued indication that the Park shareholders generally support Park’s executive compensation program. While important, the vote was only one of several factors influencing Park’s executive compensation decisions and policies for 2019.the 2021 fiscal year. 2019Midwest Regional Peer GroupThe financial services holding companies included in the Midwest Regional Compensation Peer Group for purposes of determining the base salaries of the NEOs for the 2021 fiscal year are identified in the following table. At the time of selection, the financial services holding companies identified in the following table were the Midwest financial services holding companies with asset sizes that positioned Park at approximately the median: | | 1st Source Corporation
Byline Bancorp, Inc.
Community Bank System, Inc.
Enterprise Financial Services Corp
First Bancorp
First Busey Corporation
First Commonwealth Financial Corporation
First Financial Bancorp.
First Merchants Corporation
First Midwest Bancorp, Inc. | | | Horizon Bancorp, Inc.
Midland States Bancorp, Inc.
NBT Bancorp Inc.
Northwest Bancshares, Inc.
Peoples Bancorp Inc.
QCR Holdings, Inc.
Republic Bancorp, Inc.
S&T Bancorp, Inc.
Tompkins Financial Corporation
WesBanco, Inc. | |
2021 Fiscal Year Compensation Programs and Decisions Approximately 55%Base salary comprised approximately 56%, 49%, 56% and 77% of Mr. Trautman’s and between 40% and 70% of the other NEOs’ total direct compensation (the total of base salary, annual incentive compensation (earned for the 2020 fiscal year and paid during the 2021 fiscal year) and long-term incentive awards at target fair value) in 2019 was delivered infor the form of base salary.2021 fiscal year for Mr. Miller’s base salary for purposes of this calculation represented 70% of his total direct compensation due to the increase in his base salary as of May 1, 2019 when he became the President.Trautman, Mr. Burt, Mr. Miller and Mr. DeLawder, respectively. Total incentive opportunities (annual incentive compensation and the estimated grant date fair value of the target PBRSU awards) comprised the remaining 45%were as follows:
Annual incentive compensation was approximately 22% of total direct compensation for each of Mr. Trautman, Mr. Burt and between 30% and 60% of the remaining amount for the other NEOs, with approximately 15% to 30% delivered in the form of annual incentive compensation and approximately 15% to 30% in the form of theMr. Miller. TABLE OF CONTENTS The estimated grant date fair value of the target PBRSU award.award was approximately 22% of total direct compensation for each of Mr. Trautman and Mr. Miller and approximately 29% for Mr. Burt. Base Salary Base salary is an annual part of an executive officer’s compensation. Park pays base salary to its NEOseach NEO to recognize the skills, competencies, experience and individual performance each such NEO brings to his role. As a result, annual changes in base salary result primarily from changes in the NEO’s responsibilities, market data for the role, an assessment of annual performance and Park’s financial ability to provide increases (if any) to the NEO. In determining base salaries for the NEOs for 2019,the 2021 fiscal year, the Compensation Committee and the Executive Committee of the Park Board of Directors considered the following factors: •Base salary levels of similarly-situated executive officers at financial services holding companies of similar asset size and the base salary increases of executive officers of those other financial services holding companies in general and the financial services holding companies in the Midwest Regional Compensation Peer Group used asin particular.
Total target cash compensation opportunities, inclusive of new annual incentive targets, of similarly-situated executive officers at financial services holding companies of similar asset size in general and the comparator groupfinancial services holding companies in the Midwest Regional Compensation Peer Group in particular.
•The merit increase budget for other senior leadership and employees within the Park organization.
•The Compensation Committee’s evaluation of the performance of the Chairman/CEO and the Chairman/CEO’s evaluation of the performance of the President, the CFO and, for the period of the 2021 fiscal year prior to his June 30, 2021 retirement, the Executive Committee Chairman.
•Park’s ROAE in 2018,for the 2020 fiscal year, which continued to represent one of the highest levels among the financial services holding companies in the Midwest Regional Compensation Peer Group used as the comparator group.Group.
Based on these factors, the Compensation Committee took the following actions regarding the NEOs’ base salaries for 2019: •No change to Mr. Trautman’s 2018 annual base salary of $785,000, reflecting the evaluation by the Compensation Committee and the full Board of Directors of Mr. Trautman’s individual performance and the base salaries for other executive officers with similar duties at financial services holding companies in the Midwest Regional Compensation Peer Group, used asno changes were made to the comparator group.
•An increase in Mr. Miller’s annual base salary of $350,000 for the period from January 1, 2019 through April 30, 2019, to $575,000 effective May 1, 2019 (64%), reflecting his promotion to President and an executive officer position effective May 1, 2019 as well as the evaluation of Mr. Miller’s individual performance and theNEOs’ base salaries for other executive officers with similar duties at companies in the Midwest Regional Compensation Peer Group used as the comparator group.
•An increase in Mr. Burt’s annual base salary to $375,000 (7%), reflecting Mr. Burt’s individual performance and the base salaries for other executive officers with similar duties at companies in the Midwest Regional Compensation Peer Group used as the comparator group.
•A decrease in Mr. DeLawder’s annual base salary effective May 1, 2019 to $287,500 (his annual base salary had been $575,000 for the period from January 1, 2019 through April 30, 2019), reflecting the transition of job responsibilities to Messrs. Trautman and Miller and the base salaries for other executive officers with similar duties at companies in the Midwest Regional Compensation Peer Group used as the comparator group.2021 fiscal year.
Annual Incentive Compensation Annual incentive compensation is an element of pay that is “at risk” and subject to achieving absolute and relative performance results with respect to ROAE.results. Historically, Park has paidmade annual incentive compensation awards to motivate and reward achievement of annual financial objectives and individual goals. As a result, annual incentive compensation awards increase the focus of the NEOs and other key employees on specific short-term corporate financial goals. The Compensation Committee made discretionary annual incentive compensation awards taking into account Park’s comparative performance in 2019 (which awardsfor the 2021 fiscal year of $560,000 to Mr. Trautman, $249,000 to Mr. Burt and $342,000 to Mr. Miller, which were paid in 2020) of $314,500 to Mr. Trautman, $171,000 to Mr. Burt, $142,000 to Mr. Miller, and $166,000 to Mr. DeLawder2022. These awards were based on the following factors:considerations: •Park’s adjusted ROAEperformance for the twelve months ended September 30, 2019 relative2021 fiscal year compared to the levels of ROAE for the financial services holding companies in the Midwest Regional
Compensation Peer Group used as the comparator group and the $3 billion to $10 billion Industry Index for the same period. Park’s adjusted ROAE of 12.44% for the twelve months ended September 30, 2019 was at the 80th and the 77th percentile for the Midwest Regional Compensation Peer Group and the $3 billion to $10 billion Industry Index, respectively.prior year results for Park.
•Park’s anticipated overall performanceEach of Mr. Trautman, Mr. Burt and Mr. Miller was provided a target annual incentive compensation opportunity for the 20192021 fiscal year as measured bywhich could be earned based on Park’s net income, ROAEperformance against preset goals for diluted EPS, PTPP ROATE, PTPP ROATA and ROATEthe efficiency ratio. Minimum and maximum levels of potential awards were available at 87.5% to 112.5% of the internal target for each of the preset goals for the twelve months ended December 31, 2019. Park’s actual performance reflected $102.7 million in net income, ROAE of 11.14% and ROATE of 13.44%. On an adjusted basis, net income was $105.5 million, ROAE was 11.44% and ROATE was 13.81%.
•Recognition of Mr. DeLawder’s service as Chairman of the Board of Park and Park National Bank and Mr. Miller’s role as Executive Vice President of Park and Park National Bank, in each case from January 1, 2019 until May 1, 2019, at which time they assumed their new rolesfinancial measures described in the Park organization.
•preceding sentence. In addition, the Compensation levels ofCommittee had the NEOsability to modify the calculated payment by up to 25% on a discretionary basis using factors such as relative to those of similarly-situated executive officers atTSR and ROAA and ROAE financial performance versus the financial services holding companies in the applicable Midwest Regional Compensation Peer Group used asand other factors.
The following four factors were weighted, each with a minimum, target and maximum payout with the comparator group.maximum achievement resulting in 150% of target. •Diluted EPS was $9.37 and exceeded the maximum payout level.
PTPP ROATE was 19.65% and approximated 87% of the target payout level. TABLE OF CONTENTS PTPP ROATA was 1.82% and approximated 81% of the target payout level. The efficiency ratio was 61.27% and approximated 84% of the target payout level. | | Diluted EPS | | | 30% | | | $6.64 | | | $7.59 | | | $8.54 | | | $9.37 | | | 150% | | | | PTPP ROATE | | | 40% | | | 17.79% | | | 20.33% | | | 22.87% | | | 19.65% | | | 87% | | | | PTPP ROATA | | | 20% | | | 1.67% | | | 1.91% | | | 2.15% | | | 1.82% | | | 81% | �� | | | Efficiency Ratio | | | 10% | | | 66.27% | | | 58.91% | | | 51.55% | | | 61.27% | | | 84% | |
Discretionary multiplier: | • | The TSR for Park was over the 90th percentile compared to the Midwest Regional Compensation Peer Group for the three-year and five-year periods, and at the 60th percentile for the one-year period. |
| • | Park’s ROAE and ROAA for the twelve months ended December 31, 2021 relative to the levels of ROAE and ROAA for the financial services holding companies in the Midwest Regional Compensation Peer Group for the nine-month period ended September 30, 2021. Park’s ROAE and ROAA of 14.45% and 1.56%, respectively, for the twelve months ended December 31, 2021 approximated the 95th percentile of each financial measure for the Midwest Regional Compensation Peer Group. |
The Board of Directors’ evaluation of the performance of the Chairman/CEO and the evaluation by the Chairman/CEO of the performance of the President the CFO and the Executive Committee Chairman.CFO. AnnualThe target annual incentive compensation as a percent of 2022 base salary is 60% for the Chairman/CEO and 50% for each of the President and the CFO. Actual annual incentive compensation awards based on performance over the twelve months ended September 30, 2019above factors for Park’s NEOs approximated between 25%60% and 46%70% of each NEO’s 20192021 base salary, which represented a decreasean increase for Mr. Trautman of between 5%30% and 7%an increase for each of Mr. Burt and Mr. Miller of 20%, compared to the percentageamounts earned for the 2020 fiscal year. As a percent of each NEO’s 2018their 2022 base salary (for those in the same positions) forsalaries, the annual incentive compensation based on performance overawards represented approximately 75% for Mr. Trautman and approximately 62% for each of Mr. Burt and Mr. Miller. See page 47 of this proxy statement for a discussion of the twelve months ended September 30, 2018.2022 base salaries for the NEOs. These resultsawards were supported by annual financial results for the years ended December 31, 20192021 fiscal year and 2018the 2020 fiscal year that met or exceeded financial metric targets and financial results that continued to equal or exceed the median results of the Midwest Regional Compensation Peer Group used as the comparator group and the $3 billion to $10 billion Industry Index in many of the key indicators of performance as shown in the tablestable included in the section captioned “Executive Summary – Performance HighlightsHighlights.”.Long-Term IncentivesIncentive Awards –2019 2021 Performance Grants Annual long-term incentive awards are granted under the 2017 Employees LTIP, which permits the Compensation Committee to award a variety of equity-based as well as cash-based incentive compensation awards. These awards are expected to be earned over a multi-year period, distinguishing them from Park’s annual incentive compensation, providing balance in Park’s compensation program for NEOs and other key employees, helping retain and align the interests of the NEOs and other key employees with those of the Park shareholders. As in 2018,for the 2020 fiscal year, the Compensation Committee and Park’s management agreed that equity-based compensation in the form of PBRSUs should be awarded to the NEOs. The grants for 2019the 2021 fiscal year were approved by the Compensation Committee on November 19, 2018December 8, 2020 and made under the 2017 LTIP for Employees effective on January 1, 2019.2021. The Compensation Committee and Park’s management believe that PBRSUs are the best mechanism for aligning executive pay with shareholder value as they are only earned if Park meets specific long-term financial objectives. The terms and conditions of the PBRSUs approved by the Compensation Committee for 2019the 2021 fiscal year are described in the footnotes to the table in the section captioned “Grants of Plan-Based Awards”Awards.”.
The Compensation Committee and Park’s management believe Park’s program is considerably more demanding than such programs at other financial services holding companies of similar size based on several provisions: •the requirement that annual net income for each fiscal year within the performance period exceed at least 110% of dividends paid in the applicable fiscal year;
•no PBRSUs granted effective on January 1, 2019 will be earned for results below the 50th percentile of the Midwest Regional Compensation Peer Group used as the comparator group as measured by ROAA;42
•the maximum number of PBRSUs granted effective on January 1, 2019 will be earned for ROAA results at the 80th percentile of the Midwest Regional Compensation Peer Group used as the comparator group; and
•TABLE OF CONTENTS | • | no PBRSUs granted effective on January 1, 2021 will be earned for results below the 50th percentile of the $3 Billion to $10 Billion Industry Index used as the comparison group, as measured by ROAA; |
| • | the maximum number of PBRSUs granted effective on January 1, 2021 will be earned for ROAA results at the 80th percentile of the $3 Billion to $10 Billion Industry Index used as the comparison group; and |
awards are subject to a five-year post-vesting holding requirement. In the views of the Compensation Committee and the NEOs, all of these factors serve to better align the interests of holders of PBRSUs with those of the Park shareholders and emphasize sustained long-term financial performance. In determining the target number of PBRSUs to be awarded to each NEO for 2019,the 2021 fiscal year, the Compensation Committee considered the common shares available under the 2017 Employees LTIP, Mr. Trautman’s recommendations for the other NEOs, individual performance of the NEOs, the cash compensation (base salary and annual incentive compensation) earned by the NEOs in 2018for the 2020 fiscal year and the long-term incentive opportunities received by similarly-situated executive officers at financial services holding companies in the Midwest Regional Compensation Peer Group$3 Billion to $10 Billion Industry Index used as the comparatorcomparison group. The fair value of the target level of PBRSUs equaled roughly 28%40%, 56% and 40% of the base salary of Mr. Trautman’s 2019 base salaryTrautman, Mr. Burt and between 15% and 25% of the other NEOs’ 2019 base salaries,Mr. Miller, respectively, based on the closing price for Park common shares of $84.95$105.01 on December 31, 20182021 (the last trading day before the January 1, 20192021 effective date of the awards). The following table illustrates the potential vesting (i.e., payouts) based on Park’s cumulative ROAA performance relative to that of the Midwest Regional Compensation Peer Group$3 Billion to $10 Billion Industry Index used as the comparatorcomparison group:
| | | ROAA
<50th
Percentile Midwest Regional Peer Group
$3 Billion to $10
Billion Industry
Index | | | (Target)
ROAA
= 50th Percentile
Midwest Regional $3 Billion to $10
Peer Group Billion Industry
Index | | | ROAA
= 65th Percentile
Midwest Regional $3 Billion to $10 Billion
Peer Group Industry
Index | | | (Maximum)
ROAA
≥ 80th Percentile
Midwest Regional $3 Billion to $10
Peer Group Billion Industry
Index | | | | David L. Trautman | | | 0 PBRSUs | | | 3,000 PBRSUs | | | 3,750 PBRSUs | | | 4,500 PBRSUs | | | | Brady T. Burt | | | 0 PBRSUs | | | 2,000 PBRSUs | | | 2,500 PBRSUs | | | 3,000 PBRSUs | | | | Matthew R. Miller | | | 0 PBRSUs | 1,500 PBRSUs | 1,875 PBRSUs | 2,250 PBRSUs | | | 2,531 PBRSUs | | | 3,375 PBRSUs | | | | C. Daniel DeLawder(1) | 0 PBRSUs | 2,250 PBRSUs | 2,813 PBRSUs— | 3,375 PBRSUs | | — | | | — | | | — | |
(1)
| Based on a pre-determined plan, Mr. DeLawder was not awarded any PBRSUs for the 2021 fiscal year. This was based on the change of his job responsibilities during the 2019 fiscal year when he ceased to serve as Chairman of the Board of Park and Park National Bank, which changes continued into the 2020 fiscal year and the 2021 fiscal year when Mr. DeLawder retired as an executive officer of Park and Park National Bank and as an employee of Park National Bank, on June 30, 2021. |
Long-Term IncentivesIncentive Awards – 2016-20192018 PBRSUs Performance Vesting On March 22, 2019,16, 2021, with a grant certification date of March 31, 2021, the CompensationExecutive Committee certified the performance level achieved and the resulting number of common shares underlying the PBRSUs earned with respect to the PBRSUs granted effective January 1, 2016,2018, with a performance period from January 1, 20162018 through December 31, 20182020 (the “2016“2018 PBRSUs”). The 20162018 PBRSUs were earned based upon two performance criteria: (i) annual net income for each fiscal year within the performance period exceeding at least 110% of dividends paid in the applicable fiscal yearyear; and (ii) relative ROAA performance as compared to the $3 billionBillion to $10 billionBillion Industry Index. Based on results through December 31, 2018,2020, the CompensationExecutive Committee certified that the annual net income for each fiscal year exceeded the 110% of dividends paid hurdle and that Park’s three-year ROAA performance was at the 72⅓75th percentile of the $3 billionBillion to $10 billionBillion Industry Index. This performance resulted in 137.22%141.67% of the target PBRSUs being earned. Common shares underlying the earned PBRSUs vested 50% on the March 31, 2021 certification date and will vest 50% on the first anniversary of the March 31, 2021 certification date, with a five-year post-vesting holding requirement in each case. | | David L. Trautman | | | 1,875 | | | 2,656 | | | | Brady T. Burt | | | 1,310 | | | 1,856 | |
| | | | | | | | |
| Target 2016 PBRSUs | Earned 2016 PBRSUs | | David L. Trautman | 2,500 | 3,430 | | Brady T. Burt | 1,750 | 2,401 | | Matthew R. Miller | 1,000 | 1,372 | | C. Daniel DeLawder | 2,000 | 2,744 |
43
TABLE OF CONTENTS | | Matthew R. Miller | | | 1,200 | | | 1,700 | | | | C. Daniel DeLawder | | | 1,500 | | | 2,125 | |
Total Direct Compensation The table below provides total direct compensation actually received by each individual then serving as an NEO during the 2021 fiscal year, the 2020 fiscal year and the 2019 2018 and 2017.fiscal year. Because the amounts in the table reflect whatwas received during each yearrather than what was earned with respect to each year, the numbers reported in the table below in respect of “Annual Incentive Compensation” for each year differ from those reported for each year in the “Bonus” column of the “Summary Compensation Table for 2019”2021.”. The amounts shown in the table for “Long-Term Equity-Based Awards” reflects the grant date fair value of the PBRSUs at the expected award level as of grant date. See the “Stock Awards” column of the “Summary Compensation Table for 2019”2021” .for more information about the grant date fair values. | | David L. Trautman | | | 2021 | | | $785,000 | | | $314,500 | | | $1,099,500 | | | $420,040 | | | $1,519,540 | | | | 2020 | | | $785,000 | | | $314,500 | | | $1,099,500 | | | $368,568 | | | $1,468,068 | | | | 2019 | | | $785,000 | | | $370,000 | | | $1,155,000 | | | $339,800 | | | $1,494,800 | | | | Brady T. Burt | | | 2021 | | | $375,000 | | | $177,000 | | | $552,000 | | | $280,027 | | | $832,027 | | | | 2020 | | | $375,000 | | | $171,000 | | | $546,000 | | | $245,712 | | | $791,712 | | | | 2019 | | | $375,000 | | | $185,000 | | | $560,000 | | | $226,533 | | | $786,533 | | | | Matthew R. Miller | | | 2021 | | | $575,000 | | | $225,000 | | | $800,000 | | | $315,030 | | | $1,115,030 | | | | 2020 | | | $575,000 | | | $142,000 | | | $717,000 | | | $276,426 | | | $993,426 | | | | 2019 | | | $491,058(1) | | | $92,000 | | | $583,058 | | | $169,900 | | | $752,958 | | | | C. Daniel DeLawder | | | 2021 | | | $166,850(2) | | | $87,500 | | | $254,350 | | | $56,309(3) | | | $310,659 | | | | 2020 | | | $287,500 | | | $166,000 | | | $453,500 | | | $184,284 | | | $637,784 | | | | 2019 | | | $394,760(4) | | | $265,000 | | | $659,760 | | | $254,850 | | | $914,610 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Base Salary | | | Annual Incentive Compensation | | Total Cash | | Long-Term Equity-Based Awards | | Total Direct Compensation | | David L. Trautman | 2019 | $ | 785,000 | | | $ | 370,000 | | | $ | 1,155,000 | | | $ | 339,800 | | | $ | 1,494,800 | | | 2018 | $ | 785,000 | | | $ | 259,000 | | | $ | 1,044,000 | | | $ | 260,000 | | | $ | 1,304,000 | | | 2017 | $ | 785,000 | | | $ | 370,000 | | | $ | 1,155,000 | | | $ | 398,867 | | | $ | 1,553,867 | | | Brady T. Burt | 2019 | $ | 375,000 | | | $ | 185,000 | | | $ | 560,000 | | | $ | 226,533 | | | $ | 786,533 | | | 2018 | $ | 350,000 | | | $ | 148,500 | | | $ | 498,500 | | | $ | 181,653 | | | $ | 680,153 | | | 2017 | $ | 350,000 | | | $ | 165,000 | | | $ | 515,000 | | | $ | 279,207 | | | $ | 794,207 | | | Matthew R. Miller | 2019 | $ | 491,058 | | (1) | $ | 92,000 | | | $ | 583,058 | | | $ | 169,900 | | | $ | 752,958 | | | C. Daniel DeLawder | 2019 | $ | 394,760 | | (2) | $ | 265,000 | | | $ | 659,760 | | | $ | 254,850 | | | $ | 914,610 | | | 2018 | $ | 575,000 | | | $ | 212,000 | | | $ | 787,000 | | | $ | 208,000 | | | $ | 995,000 | | | 2017 | $ | 575,000 | | | $ | 265,000 | | | $ | 840,000 | | | $ | 319,093 | | | $ | 1,159,093 | |
________________________
(1) (1)
| Mr. Miller’s base salary (on an annual basis) was $350,000 for the period from January 1, 2019 through April 30, 2019, increasing to $575,000 for the period from May 1, 2019 through December 31, 2019 in connection with his promotion to President of each of Park and Park National Bank and an executive officer position of Park effective May 1, 2019.(2) Mr. DeLawder’s base salary (on an annual basis) was $575,000 from January 1, 2019 through April 30, 2019, decreasing to $287,500 from May 1, 2019 through December 31, 2019 in connection with his ceasing to serve as Chairman of the Board of each of Park and Park National Bank effective May 1, 2019.
|
(2)
| The amount reported represents the sum of: (a) Mr. DeLawder’s base salary of $143,750, received in his capacity as an executive officer of Park and Park National Bank and an employee of Park National Bank for the period from January 1, 2021 through June 30, 2021; and (b) cash compensation in the aggregate amount of $23,100, received by Mr. DeLawder in his capacity as a non-employee director of Park for the period from July 1, 2021 through December 31, 2021, which cash compensation is described more fully under the heading “DIRECTOR COMPENSATION Annual — Retainers and Meeting – Fees Cash Compensation.” |
(3)
| Based on a pre-determined plan, Mr. DeLawder was not granted any PBRSUs during the 2021 fiscal year. The amount reported for the 2021 fiscal year represents the grant date fair value of the 450 common shares granted to Mr. DeLawder in the form of an annual retainer in Mr. DeLawder’s capacity as a non-employee director of Park. For more information concerning the annual retainers payable to non-employee directors of Park, see the discussion under the heading “DIRECTOR COMPENSATION – Annual Retainers and Meeting Fees —Annual Retainers Payable in Common Shares.” |
(4)
| Mr. DeLawder’s base salary (on an annual basis) was $575,000 for the period from January 1, 2019 through April 30, 2019, decreasing to $287,500 for the period from May 1, 2019 through December 31, 2019 in connection with his ceasing to serve as Chairman of the Board of each of Park and Park National Bank effective May 1, 2019. |
Other Benefits Park provides the NEOs with medical, dental, long-term disability and life insurance benefits under the same programs used to provide these benefits to all other employees of Park’s subsidiaries. NEO benefits are not tied to individual or corporate performance, which is the same approach used for other employees. Moreover, changes to the benefits provided to the NEOs reflect changes to the benefits provided to other employees. TABLE OF CONTENTS The NEOs are also eligible to participate in several retirement programs. These programs recognize contributions made by individuals over their respective careers and benefits normally are paid at retirement. As a result, they can serve as a tool in retaining the NEOs. •The NEOs participate in the Park Defined Benefit Pension Plan (the “Park Pension Plan”) on the same terms and conditions as other employees. The Park Pension Plan provides all participants, including the NEOs, a benefit based on the same formula of years of service and compensation, subject to limitations imposed by the Internal Revenue Code on the amount of annual compensation used to determine plan benefits and on the amount of plan benefits payable annually. The Park Pension Plan is discussed under the caption “Post-Employment Payments and Benefits – Pension and Supplemental Benefits– Park Pension Plan.”. •The NEOs and other employees are eligible to participate in the Park KSOP. Under the Park KSOP, eligible employees can defer a portion of their cash compensation (base salary and
bonus/annual incentive compensation) and receive matching contributions by Park. Park’s matching contributions in 2019the 2021 fiscal year were 50% of the cash compensation contributed by an employee, up to the annual limits imposed under the Internal Revenue Code and United States Treasury regulations, in order to balance the cost of the Park KSOP with a desire to encourage employees to save for retirement. While Park’s contributions are made in the form of Park common shares to help build stock ownership, participants have the ability to diversify their accounts into other investments, including mutual funds and a “bank savings account” held at Park National Bank. •NEOs receive the same fringe benefits as other employees, except that Park and Park National Bank have entered into supplemental executive retirement benefits agreements (“SERP Agreements”) with the NEOs. Each of Messrs.Mr. Trautman and Mr. DeLawder is party to a SERP Agreement with Park made as of February 18, 2008. Supplemental SERP Agreements were entered into between Messrs.each of Mr. Trautman and Mr. DeLawder and Park National Bank on June 15, 2015, which were intended to increase the aggregate amount of the “Full Benefit” payable under the SERP Agreements to a level which would provide total retirement benefits more reflective of their then current income, but no greater than the benefits they would receive under Park’s retirement plans if the regulatory limits on benefits which may be received by highly-compensated individuals had not been in place. In addition, new SERP Agreements were entered into on June 15, 2015 between Park National Bank and Messrs.each of Mr. Burt and Mr. Miller, neither of whom had previously been party to a SERP Agreement. Finally, on January 27, 2020, a supplemental SERP Agreement was entered into between Park National Bank and Mr. Miller, which was intended to increase the aggregate amount of the “Full Benefit” payable under his SERP Agreements to a level which would provide total retirement benefits more reflective of his then current income, but no greater than the benefits he would receive under Park’s retirement plans if the regulatory limits on benefits which may be received by highly-compensated individuals had not been in place. The SERP Agreements are intended to provide total retirement benefits (in terms of income replacement) for the NEOs that are comparable to those available to other employees in the Park organization with similar years of service but who are not subject to regulatory limits on the benefits which they may receive under the Park Pension Plan and the Park KSOP. As a result, the SERP Agreements will not result in the NEOs receiving benefits in terms of income replacement that are greater than those they would have otherwise received under Park’s retirement plans if the regulatory limits on benefits had not been in place.
Messrs.Mr. Trautman, Mr. Burt and Mr. Miller will forfeit the benefits under their respective SERP Agreements if they terminate their employment with Park National Bank prior to age 62. These forfeiture provisions help enhance the retention and recruitment of highly-qualified senior leadership. Mr. DeLawder’s benefits under his supplemental 2015 SERP Agreement and his 2008 SERP Agreement are fully vested. The SERP Agreements have change in control provisions whereby if a defined change in control were to occur before Mr. Trautman, Mr. Burt or Mr. Miller terminates his employment with Park National Bank, he will become 100% vested and thus entitled to his Full Benefit under the relevant SERP Agreement(s) upon any subsequent termination of employment, other than for cause, prior to age 65. Mr. DeLawder’s benefits under his 2008 SERP Agreement and his supplemental 2015 SERP Agreement have fully vested and the initial payments under Mr. DeLawder’s two SERP Agreements began in February of 2022 to adhere to the Payment Commencement Date of March 1, 2022.
The SERP Agreements provide several important protections to Park. The affected NEO must repay any SERP benefits received and forfeit any right to future SERP benefits if, following the NEO’s termination TABLE OF CONTENTS of employment, Park or Park National Bank determines that “cause” existed to terminate the NEO prior to receipt of such benefits. An NEO also forfeits any SERP benefits if, within 12 months of the NEO’s separation from service, the NEO violates the non-competition and non-solicitation provisions of his SERP Agreement(s).
The SERP Agreements are discussed more fully under the captions “Post-Employment Payments and Benefits – Pension and Supplemental Benefits – Supplemental Executive Retirement Benefits – 2008 Agreements,David L. Trautman, Brady T. Burt and Matthew R. Miller,” and “Post-Employment Payments and Benefits – Pension and Supplemental Benefits – Supplemental Executive Retirement Benefits – 2015 Agreements” and “Post-Employment Payments and Benefits – Pension and Supplemental Benefits– Supplemental Executive Retirement Benefits – 2020 AgreementC. Daniel DeLawder.”. •Park National Bank has also entered into two forms of split-dollar agreements (“Split-Dollar Agreements”) with each of the NEOs. One form of Split-Dollar Agreement (the “Maximum Benefit Split-Dollar Agreements”Agreement”) provides for the payment of benefits in an amount which is equal to the lesser of (i) a specified “Death Benefit” (the amount of which will be reduced if the NEO dies after he has terminated employment with Park National Bank) and (ii) 100% of the difference between the total death proceeds payable under the related life insurance policy(ies) and the cash surrender value of such life insurance policy(ies) at the time of the NEO’s death. Park National Bank will receive the balance of the death proceeds not paid to an NEO’s beneficiary(ies). The reduction in the amount payable under each Maximum Benefit Split-Dollar Agreement following the termination of an NEO’s employment reflects the fact that the life insurance policies related to the Maximum Benefit Split-Dollar Agreements also serve to fund the benefits paid under the SERP Agreements and the NEO will have received those SERP Agreement benefits after his termination of employment.
The second form of Split-Dollar Agreement (the “Compensation-Based Split-Dollar Agreements”Agreement”) provides for the payment of benefits in an amount which is based on each NEO’s annual total compensation (defined as annual base salary and annual cash bonus/incentive compensation paid) with the portion of the death proceeds payable under the related life insurance policy to be paid to the NEO’s beneficiary(ies) equal to approximately two times the NEO’s highest annual total compensation during any calendar year of his employment with Park National Bank. Each NEO has the opportunity to designate one or more beneficiaries to receive his share of the death proceeds payable under the life insurance policies related to his Split-Dollar Agreements. The Split-Dollar Agreements remain in effect following each NEO’s termination of employment as long as he has reached age 62, has not been employed by another financial services firm and was not terminated for cause. Certain of the Split-Dollar Agreements include change in control provisions whereby the NEO’s beneficiary(ies) will receive the maximum amount of benefits payable upon the NEO’s death if the NEO terminates employment with Park National Bank within 12 months after a defined change in control even if he has not yet reached age 62. The Split-Dollar Agreements are discussed under the caption “Potential Payouts upon Termination of Employment or Change in Control – Split-Dollar Agreements.”. •Park has not historically entered into employment or specific change-in-control agreements with executive officers as part of itsPark’s compensation program. However, as previously noted, there are change in control provisions in the SERP Agreements, in the Split-Dollar Agreements and in the award agreements evidencing PBRSUs granted under the 2013 LTIP and the 2017 Employees LTIP.
Other Compensation Policies Accounting: Section 162(m) of the Internal Revenue Code (“Section 162(m)”) generally does not allow a tax deduction to publicly-held companies (such as Park) for compensation over $1,000,000 paid in any fiscal year to certain current and former executive officers. Neither the Compensation Committee nor the full Park Board of Directors has adopted a formal policy regarding tax deductibility of compensation paid to Park’s NEOs and other members of senior leadership within the Park organization. While the Compensation Committee carefully considers the net cost and value to Park of maintaining the deductibility of all compensation, itthe Compensation Committee also desires the flexibility to reward NEOs and other members of senior leadership within the Park organization in a manner that enhances Park’s ability to attract and retain individuals as well as to create longer term value for the Park shareholders. Thus, income tax deductibility is only one of several factors the Compensation Committee considers in making decisions regarding Park’s compensation program. The Compensation Committee may authorize compensation that might not be deductible, and TABLE OF CONTENTS may modify compensation that was initially intended to be exempt from the deduction limitations of Section 162(m), if the Compensation Committee determines that such compensation decisions are in the best interests of Park and itsour subsidiaries. Clawbacks: As discussed above, Park can recover SERP payments received by an NEO if Park determines that the NEO could have been terminated for cause prior to the receipt of benefits. In addition, the award agreements for all PBRSUs granted to NEOs after November 19, 2018 identify certain events (generally conditions related to non-solicitation, non-disparagement, confidentiality and cooperation or an activity that would constitute cause for termination of an NEO’s employment) the occurrence of which, at any time during an NEO’s employment with Park (including Park’s subsidiaries) or during the 12-month period following the termination of an NEO’s employment with Park (including Park’s subsidiaries), will result in the forfeiture of the PBRSUs and any common shares delivered to the NEO pursuant the award agreement. Hedging Policy: Park’s hedging policy is described in the section of this proxy statement captioned “CORPORATE GOVERNANCE ‒– Hedging Policy”Policy.” Stock Ownership Guidelines: While Park’s compensation program aims to encourage and build stock ownership, Park has not adopted stock ownership guidelines that are common at other companies.guidelines. Nonetheless, the Chairman/CEO and the Executive Committee Chairman have personal holdings of Park common shares, and the non-NEO directors as a group have average personal holdings of Park common shares, that are significantly greater than the typical stock ownership practice for individual(s) holding the same position. | | David L. Trautman | | | $9,384,515 | | | $785,000 | | | 12.0 x | | | 5 x Base Salary | | | | Brady T. Burt | | | $1,637,516 | | | $375,000 | | | 4.4 x | | | 3 x Base Salary | | | | Matthew R. Miller | | | $1,100,028 | | | $575,000 | | | 1.9 x | | | 3-4 x Base Salary | | | | Average for Non-Employee Directors(1) | | | $4,031,165 | | | $96,625 | | | 41.7 x | | | 3 x Annual Retainer | |
(1)
| Does not include David L. Trautman and Matthew R. Miller since they are executive officers of Park. Also does not include D. Byrd Miller III since he did not become a Park director until January 1, 2022. Includes C. Daniel DeLawder since he was no longer an executive officer of Park or Park National Bank or an employee of Park National Bank on December 31, 2021. |
| | | | | | | | | | | | | | | Individual
Or Group | Value of Common Share Holdings (12/31/2019) | 2019 Base Salary or Total Director Compensation | Value of Common Share Holdings / 2019 Base Salary or Total Director Compensation | Typical Practice for Individual(s) Holding Same Position | | David L. Trautman | $ | 6,351,553 | | $ | 785,000 | | 8.1x | 5 x Base Salary | | Brady T. Burt | $ | 828,459 | | $ | 375,000 | | 2.2x | 3 x Base Salary | | Matthew R. Miller | $ | 482,107 | | $ | 491,058 | | 1.0x | 3-4 x Base Salary | | C. Daniel DeLawder | $ | 13,859,897 | | $ | 394,760 | | 35.1x | 3-4 x Base Salary | Average for Non- NEO Directors (1) | $ | 1,669,585 | | $ | 90,032 | | 18.5x | 3 x Annual Retainer |
________________________
(1) Does not include (i) David L. Trautman, Matthew R. Miller and C. Daniel DeLawder since they are executive officers.
20202022 Fiscal Year Compensation Decisions At its meeting on December 3, 2019,January 12, 2022, the Compensation Committee decided to maintainmodify the 2020 base salaries of Messrs.Mr. Trautman, Mr. Burt, and Mr. Miller and DeLawderfrom those earned for the 2021 fiscal year. The Compensation Committee desired to modify the base salaries such that they would approximate the percent of base salary to total direct compensation for each of the NEOs to be in line with individuals holding similar positions at the 2019 levels.financial services holding companies in the Midwest Regional Compensation Peer Group. Therefore, the base salary for Mr. Burt was increased from $375,000 to $400,000; the base salary for Mr. Trautman was decreased from $785,000 to $750,000; and the base salary for Mr. Miller was decreased from $575,000 to $550,000, in each case to approximate 50% of total direct compensation. At that same meeting, the Compensation Committee madegranted PBRSU awards under the 2017 Employees LTIP to be effective on January 1, 2020.20, 2022. These awards will be earned with respect to the three-fiscal-year performance period from January 1, 20202022 through December 31, 2022.2024. The target number of PBRSUs awarded to Messrs.Mr. Trautman, Mr. Burt, and Mr. Miller were 2,290, 1,510, and DeLawder were 2,700, 1,800, 2,025 and 1,350,1,710, respectively. The target fair value of the PBRSU award for each NEO was lower thanof Messrs. Trautman, Burt and Miller approximated the target PBRSU award granted effective on January 1, 2019; with the exception of Mr. Miller, who, due to his promotion to President in 2019, received a higher award commensurate with his new job responsibilities.2021. The target fair value of the PBRSUs on the January 1, 202020, 2022 grant date approximated 33%42% of his 20192022 base salary for each of Mr. Trautman and Mr. Miller and 47%52% of his 2022 base salary for each of Mr. Burt and Mr. DeLawder.Burt. While providing the NEOs with a meaningful capital accumulation opportunity, the Compensation Committee and Park’s management of Park continue to believe the PBRSU awards are conservative relative to the long-term incentive opportunities received by similarly-situated executive officers at other financial services holding companies of Park’s asset size. Individual PBRSU amounts for the NEOs were based, in significant part, on the Compensation Committee’s review of the compensation information provided by Meridian, comparing the total direct compensation (including long-term equity-based awards) for executive officers at financial services holding companies in the Midwest Regional Compensation Peer Group used as the comparator group to that of each of the NEOs of Park. TABLE OF CONTENTS As it has for the past several years, the compensation program in 2019the 2021 fiscal year for Park’s NEOs reflected Park’s compensation philosophy and remained conservative relative to the practices of other financial services holding companies of Park’s asset size. These relative compensation levels occurred with 2019 financial results for Park achieving or exceeding internal financial targets for the 2021 fiscal year, as measured bywell as ROAA and ROAE which approximated or exceeded the median performance of financial services holding companies in both the Midwest Regional Compensation Peer Group used as the comparator group and the $3 billion to $10 billion Industry Index.Group. In addition, Park’s executive compensation program intentionally excludes a number of less attractive compensation
practices (e.g.(e.g., excessive perquisites, retention awards, employment contracts and specific change-in-control agreements). As a result, the Compensation Committee believes Park’s executive compensation program continues to represent shareholders’ interests of Park shareholders in a responsible, reasonable and conservative fashion. Compensation Committee Report The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of SEC Regulation S-K with Park’s management and, based on such review and discussion, the Compensation Committee recommended to the full Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. The Compensation Committee has performed a risk review and evaluation ofreviews potential risks when considering Park’s compensation plans. The specific compensation plans reviewed were:considered by the Compensation Committee include: (i) the annual incentive compensation program, which provides for annual incentive compensation based on Park’s ROAE asfinancial results compared to thatinternal financial targets and to those of the $3 billion to $10 billion Industry Index and the Midwest Regional Compensation Peer Group used as the comparator group;Group; (ii) the 2017 Employees LTIP; (iii) miscellaneous incentive compensation plans, which are informal arrangements that allow Park employees to earn small amounts of incentive compensation; (iv) the SERP Agreements, pursuant to which Messrs.Mr. Trautman, Mr. Burt Miller and DeLawderMr. Miller may receive supplemental retirement benefits; and (v)(iv) the Split-Dollar Agreements, which provide the NEOs with death benefits. The following bullets outline the process by which the Compensation Committee reviews and evaluatesconsiders the potential risks associated with the compensation programs identified above as well as Park’s compensation policies and procedures as they relate to risk management so as to prevent unnecessary and excessive risks that are reasonably likely to have a material adverse effect on Park and could threaten the value of Park for the Park shareholders: •The Compensation Committee discusses annually the governance structure and management practices to effectively monitor and manage risks in compensation programs, policies and procedures;
•To further mitigate risk, the Compensation Committee has responsibility for the design and evaluation of all executive compensation programs, including broad-based short-term and long-term incentive compensation plans; and
•The Compensation Committee has responsibility to review and ratify Park’s non-executive incentive compensation plans. The Compensation Committee’s review of incentive compensation plans is supported by management processes aligned with the Guidance on Sound Incentive Compensation Policies adopted by banking regulators in 2010. Incorporated into the management processes is a periodic review, which includes a risk evaluation, of the components of Park’s incentive compensation plans by human resources, finance, and risk management personnel.
Based on this review and evaluation,the Compensation Committee’s consideration of the compensation plans identified above, the Compensation Committee has concludedbelieves that: •the annual incentive compensation program does not create incentives for Park’s NEOs or other employees of Park and our subsidiaries to take unnecessary and excessive risks because the amount of the payment is based on multiple financial metrics and capped at a maximum percentage of target to any individual isindividual. Additionally, the Compensation Committee retains the ability to modify the results to determine the final payout on a discretionary and based in significant part on Park’s performance in comparison to other financial services holding companies in the $3 billion to $10 billion Industry Index and the Midwest Regional Compensation Peer Group used as the comparator group – the latter being a factor over which employees have little control;basis;
•the types of awards granted under the 2017 Employees LTIP – i.e., PBRSUs with performance-based earning and service-based vesting requirements, together with a five-year post-vesting holding requirement,
TABLE OF CONTENTS do not create incentives for recipients of the awards to take unnecessary and excessive risks because the number of PBRSUs earned is based on Park’s comparative performance and the service-based vesting and post-vesting holding requirements align the long-term interests of the recipients of PBRSU awards with those of Park’sPark shareholders generally; and •the miscellaneous incentive compensation plans do not create incentives for the NEOs or other employees of Park and our subsidiaries to take unnecessary and excessive risks because the amounts payable under these informal arrangements are not a material element of compensation; and
•none of the other plans or arrangements create incentives for the NEOs or other employees of Park and our subsidiaries to take unnecessary and excessive risks because the amounts payable under these plans and arrangements are not contingent on Park’s financial or other performance.
Submitted by the members of the Compensation Committee: | | | F. William Englefield (Chair) | | | Timothy S. McLain | | | | Stephen J. Kambeitz | | | Leon Zazworsky |
F. William Englefield (Chair) Julia A. Sloat
Stephen J. Kambeitz Leon Zazworsky
Timothy S. McLain
Summary Compensation Table The following table summarizes the total compensation for each of the NEOs for each of the 20192021 fiscal year, the fiscal year ended December 31, 20182020 (the “2018“2020 fiscal year”) and the fiscal year ended December 31, 20172019 (the “2017“2019 fiscal year”) in accordance with applicable SEC rules. Dollar amounts have been rounded up to the nearest whole dollar. Park has not entered into any employment agreements with any of the NEOs. No option awards were made to the NEOs for any of the fiscal years reported. In addition, no awards were made under any non-equity incentive plans (as defined in the applicable SEC rules) to the NEOs for any of the fiscal years reported.
Summary Compensation Table for 2021 | | David L. Trautman
Chairman of the Board and Chief Executive Officer of Park and Park National Bank(4)
| | | 2021 | | | $785,000 | | | $560,000 | | | $420,040 | | | $489,412 | | | $71,111(5) | | | $2,325,563 | | | | 2020 | | | $785,000 | | | $314,500 | | | $368,568 | | | $569,153 | | | $73,771(6) | | | $2,110,992 | | | | 2019 | | | $785,000 | | | $314,500 | | | $339,800 | | | $608,977 | | | $65,571(7) | | | $2,113,848 | | | | Brady T. Burt
Chief Financial Officer,
Treasurer and Secretary of Park and Senior Vice President and Chief Financial Officer of Park National Bank
| | | 2021 | | | $375,000 | | | $249,000 | | | $280,027 | | | $87,959 | | | $46,075(8) | | | $1,038,061 | | | | 2020 | | | $375,000 | | | $177,000 | | | $245,712 | | | $144,080 | | | $48,342(9) | | | $990,134 | | | | 2019 | | | $375,000 | | | $171,000 | | | $226,533 | | | $157,078 | | | $38,848(10) | | | $968,459 | | | | Matthew R. Miller
President of Park and Park National Bank(11)
| | | 2021 | | | $575,000 | | | $342,000 | | | $315,030 | | | $76,385 | | | $41,639(13) | | | $1,350,054 | | | | 2020 | | | $575,000 | | | $225,000 | | | $276,426 | | | $125,518 | | | $37,063(14) | | | $1,239,007 | | | | 2019 | | | $491,058(12) | | | $142,000 | | | $169,900 | | | $100,266 | | | $25,904(15) | | | $929,128 | | | | C. Daniel DeLawder
Executive Officer of
Park and Park National Bank(16)
| | | 2021 | | | $166,850(17) | | | $85,500 | | | $56,309 | | | $0 | | | $74,783(19) | | | $383,442 | | | | 2020 | | | $287,500 | | | $87,500 | | | $184,284 | | | $0 | | | $75,638(20) | | | $634,922 | | | | 2019 | | | $394,760(18) | | | $166,000 | | | $254,850 | | | $0 | | | $72,423(21) | | | $888,033 | |
(1)
| The amounts reported reflect the discretionary annual incentive compensation award earned by each of the NEOs as part of the annual incentive compensation program for each of the 2021 fiscal year, the 2020 fiscal year and the 2019 fiscal year. The discretionary annual incentive compensation awards for the 2021 fiscal year are discussed in more detail under the heading “Compensation Discussion and |
| | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position During 2019 Fiscal Year | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | All Other Compensation ($) | Total ($) | David L. Trautman Chairman of the Board and Chief Executive Officer of Park and Park National Bank(4) | 2019 2018 2017 | $785,000 $785,000 $785,000 | $314,500 $370,000 $259,000 | $339,800 $260,000 $398,867 | $608,977 $334,011 $463,553 | $65,571(5) $57,464(6) $30,789(7) | $2,113,848 $1,806,475 $1,937,209 | Brady T. Burt Chief Financial Officer, Treasurer and Secretary of Park and Senior Vice President and Chief Financial Officer of Park National Bank | 2019 2018 2017 | $375,000 $350,000 $350,000 | $171,000 $185,000 $148,500 | $226,533 $181,653 $279,207 | $157,078 $ 47,335 $101,221 | $38,848(8) $25,362(9) $12,575(10) | $968,459 $789,350 $891,503 | Matthew R. Miller President of Park and Park National Bank(11) | 2019 | $491,058(12) | $142,000 | $169,900 | $100,266 | $25,904(13) | $929,128 | C. Daniel DeLawder Former Chairman of the Board of Park and Park National Bank(14) | 2019 2018 2017 | $394,760(15) $575,000 $575,000 | $166,000 $265,000 $212,000 | $254,850 $208,000 $319,093 | $ 0 $163,629 $150,611 | $72,423(16) $67,814(17) $40,174(18) | $ 888,033 $1,279,443 $1,296,878 |
49
(1) The amounts shown reflect the discretionary annual incentive compensation award earned by each of the NEOs as part of the annual incentive compensation program for each of the 2019 fiscal year, the 2018 fiscal year and the 2017 fiscal year. The discretionary annual incentive compensation awards for the 2019 fiscal year are discussed in more detail under the heading “Compensation Discussion and TABLE OF CONTENTS Analysis – 20192021 Compensation Programs and Decisions – Annual Incentive Compensation.” Due to his transition to retirement as an executive officer of Park and Park National Bank and an employee of Park National Bank on June 30, 2021, Mr. DeLawder did not receive an annual incentive compensation award for the 2021 fiscal year determined in the same manner as for Mr. Trautman, Mr. Burt and Mr. Miller. Rather, the bonus Mr. DeLawder is to receive for his service during the six-month period from January 1, 2021 through June 30, 2021 is to be consistent with those paid to non-NEOs from the non-NEO bonus pool. (2)
| The amounts reported for the 2021 fiscal year for Mr. Trautman, Mr. Burt and Mr. Miller represent the aggregate grant date fair value of PBRSUs at the expected award level as of the grant date. The grant date fair value of the PBRSUs at the target level were $315,030, $210,020 and $236,273 for Mr. Trautman, Mr. Burt and Mr. Miller, respectively. The grant date fair value of the PBRSUs at the maximum level were $472,545, $315,030 and $354,409 for Mr. Trautman, Mr. Burt and Mr. Miller, respectively. In each case, the amount reported excludes the impact of estimated forfeitures, as required by the applicable SEC rules. |
Based on a pre-determined plan, Mr. DeLawder was not granted any PBRSUs in the 2021 fiscal year. The amount reported for the 2021 fiscal year for Mr. DeLawder represents (a) the 450 common shares granted on October 25, 2021 in the form of an annual retainer in Mr. DeLawder’s capacity as a non-employee director of Park under the 2017 Long-Term Incentive Plan for Non-Employee Directors (the “2017 Non-Employee Directors LTIP”), times (b) the closing price of Park’s common shares on NYSE American on October 22, 2021 (the last trading day prior to the grant date) of $125.13. This amount also represents the grant date fair value of the common shares awarded computed in accordance with FASB ASC Topic 718. For more information concerning the annual retainers paid to non-employee directors of Park for the 2021 fiscal year, see the discussion under the heading “DIRECTOR COMPENSATION – Annual Retainers and Meeting Fees – Annual Retainers Payable in Common Shares.” (2) The amounts reported for the 2020 fiscal year represent the aggregate grant date fair value of PBRSUs at the expected award level as of the grant date. The grant date fair value of the PBRSUs at the target level were $276,426, $184,284, $207,320 and $138,213 for Mr. Trautman, Mr. Burt, Mr. Miller and Mr. DeLawder, respectively. The grant date fair value of the PBRSUs at the maximum level were $414,639, $276,426, $311,030 and $207,320 for Mr. Trautman, Mr. Burt, Mr. Miller and Mr. DeLawder, respectively. In each case, the amount reported excludes the impact of estimated forfeitures, as required by the applicable SEC rules.
The amounts reported for the 2019 fiscal year represent the aggregate grant date fair value of PBRSUs at the expected award level as of the grant date. The grant date fair value of the PBRSUs at the target level would bewere $254,850, $169,900, $127,425 and $191,138 for Messrs.Mr. Trautman, Mr. Burt, Mr. Miller and Mr. DeLawder, respectively. The grant date fair value of the PBRSUs at the maximum level would bewere $382,275, $254,850, $191,138 and $286,706 for Messrs.Mr. Trautman, Mr. Burt, Mr. Miller and DeLawder, respectively. In each case, the amount reported excludes the impact of estimated forfeitures, as required by the applicable SEC rules. The amounts reported for the 2018 fiscal year represent the aggregate grant date fair value of PBRSUs at the expected award level as of the grant date. The grant date fair value of the PBRSUs at the target level would be $195,000, $136,240, and $156,000 for Messrs. Trautman, Burt and DeLawder, respectively. The grant date fair value of the PBRSUs at the maximum level would be $292,552, $204,360, and $234,000 for Messrs. Trautman, Burt and DeLawder, respectively. In each case, the amount reported excludes the impact of estimated forfeitures, as required by the applicable SEC rules.
The amounts reported for the 2017 fiscal year represent the aggregate grant date fair value of PBRSUs at the expected award level as of the grant date. The grant date fair value of the PBRSUs at the target level would be $299,150, $209,405, and $239,320 for Messrs. Trautman, Burt and DeLawder, respectively. The grant date fair value of the PBRSUs at the maximum level would be $448,725, $314,108, and $358,980 for Messrs. Trautman, Burt andMr. DeLawder, respectively. In each case, the amount reported excludes the impact of estimated forfeitures, as required by the applicable SEC rules.
No PBRSUs will be earned, regardless of Park’s relative ROAA results, if Park’s net income for each fiscal year of the performance period does not equal or exceed 110% of all cash dividends declared and paid by Park during the applicable fiscal year. Earned PBRSUs will alsoare to be subject to additional service-based vesting – 50% of the PBRSUs earned will vest at the end of the three-fiscal-year performance period once results are certified by the Compensation Committee, with the other 50% of the earned PBRSUs vesting on the first anniversary of the certification date. Common shares received upon settlement of earned and vested PBRSUs cannot be sold, transferred, assigned or otherwise similarly disposed of for five years after the date they are delivered. On July 6, 2021, the award agreements evidencing the PBRSUs granted to Mr. DeLawder as of January 1, 2019 and January 1, 2020, respectively, were amended to provide that notwithstanding Mr. DeLawder’s retirement as an executive officer of Park and Park National Bank, and as an employee of Park National Bank, on June 30, 2021, if the applicable performance-based criteria for vesting are met, the PBRSUs granted to Mr. DeLawder will vest on the applicable performance date in the full number (rather than a pro-rated portion) of the PBRSUs granted to Mr. DeLawder that would have been earned on such performance date based on the actual level of achievement for the applicable performance period. In addition, as a result of Mr. DeLawder’s retirement, as of June 30, 2021, the five-year holding requirement for common shares received upon settlement of earned and vested PBRSUs ceased to apply to the PBRSUs granted to Mr. DeLawder. See the table included in the section captioned “Grants of Plan-Based Awards” for more information concerning the PBRSUs granted during the 20192021 fiscal year. Also see “Note 1. Summary of Significant Accounting Policies – Share-Based Compensation” and “Note 19.18. Share-Based Compensation” of the Notes to Consolidated Financial Statements included under “ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” in Park’s 20192021 Form 10-K for the assumptions used and additional information regarding the PBRSU awards made in the 20192021 fiscal year, the 20182020 fiscal year and the 2017 fiscal year. (3) The amounts shown reflect the aggregate change, where such change reflects an increase, in the actuarial present value of the NEO’s accumulated benefits under the Park Pension Plan and, where applicable, the SERP (and each individual’s SERP Agreement as in effect during the applicable fiscal year), determined using interest rate and mortality rate assumptions consistent with those used in Park’s consolidated financial statements. The benefits to be provided under the Park Pension Plan and the SERP (and the related SERP Agreements) are more fully described under the heading “Post-Employment Payments and Benefits”.
(4) Effective May 1, 2019, Mr. Trautman became Chairman of the Board of each of Park and Park National Bank, while continuing to serve as Chief Executive Officer of each of Park and Park National Bank. Mr. Trautman served as Chief Executive Officer and President of each of Park and Park National Bank during all of the 2017 fiscal year and the 2018 fiscal year and from January 1, 2019 through April 30, 2019 in the 2019 fiscal year.
(3)
| The amounts shown reflect the aggregate change, where such change reflects an increase, in the actuarial present value of the NEO’s accumulated benefits under the Park Pension Plan and, where applicable, the SERP (and each individual’s SERP Agreement(s) as in effect during the applicable fiscal year), determined using interest rate and mortality rate assumptions consistent with those used in Park’s consolidated financial statements. The benefits to be provided under the Park Pension Plan and the SERP (and the related SERP Agreements) are more fully described under the heading “Post-Employment Payments and Benefits.” |
(4)
| Effective May 1, 2019, Mr. Trautman became Chairman of the Board of each of Park and Park National Bank, while continuing to serve as Chief Executive Officer of each of Park and Park National Bank. Mr. Trautman served as Chief Executive Officer and President of each of Park and Park National Bank from January 1, 2019 through April 30, 2019 in the 2019 fiscal year. |
(5)
| The amount shown reflects: |
(5) The amount shown reflects:
•$3,447, representing the amount of the premium deemed to have been paid on behalf of Mr. Trautman for the life insurance policy related to his Compensation-Based Split-Dollar Agreement in effect during 2019;
•$9,500, representing the matching contribution to the Park KSOP on Mr. Trautman’s behalf to match his 2019 pre-tax elective deferral contributions;
•$8,497,4,059, representing the amount of the premium deemed to have been paid on behalf of Mr. Trautman for the life insurance policies related to his Maximum Benefit Split-
Dollar Agreement which also funded his SERP Agreements in effect during 2019; and
•$44,127, representing the amount of cash paid to Mr. Trautman with respect to dividend equivalent rights which vested on March 29, 2019 as described more fully under the heading “Equity Awards Exercised and Vested”.
(6) The amount shown reflects:
•$3,252, representing the amount of the premium deemed to have been paid on behalf of Mr. Trautman for the life insurance policy related to his Compensation-Based Split-Dollar Agreement in effect during 2018;2021;
•$8,073,9,750, representing the matching contribution to the Park KSOP on Mr. Trautman’s behalf to match his 20182021 pre-tax elective deferral contributions (of the $9,065 matching contribution which had been reported in the “Summary Compensation Table for 2018” included in Park’s Proxy Statement for the 2019 Annual Meeting, $922 was forfeited in 2019 in conjunction with the partial refund of Mr. Trautman’s 2018 pre-tax elective deferral contributions);contributions;
•$7,850,10,136, representing the amount of the premium deemed to have been paid on behalf of Mr. Trautman for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreements in effect during 2018;2021; and
•$38,289,47,166, representing the amount of cash paid to Mr. Trautman with respect to dividend equivalent rights which vested on March 27, 2021 and March 31, 2018.2021, as described more fully under the heading “Equity Awards Exercised and Vested.” (6)
| The amount shown reflects: |
(7) The amount shown reflects:
•$2,857,3,765, representing the amount of the premium deemed to have been paid on behalf of Mr. Trautman for the life insurance policypolicies related to his Compensation-Based Split-Dollar Agreement in effect during 2017;2020;
TABLE OF CONTENTS $3,917,9,750, representing the final matching contribution to the Park KSOP on Mr. Trautman’s behalf to match his 20172020 pre-tax elective deferral contributions (of the $4,500 matching contribution which had been reported in the “Summary Compensation Table for 2017” included in Park’s Proxy Statement for the 2018 Annual Meeting of Shareholders (the “2018 Annual Meeting”), $583 was forfeited in 2018 in conjunction with the partial refund of Mr. Trautman’s 2017 pre-tax elective deferral contributions);contributions; •$7,246,9,230, representing the amount of the premium deemed to have been paid on behalf of Mr. Trautman for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreements in effect during 2017;2020; and
•$16,769,51,026, representing the amount of cash paid to Mr. Trautman with respect to dividend equivalent rights which vested on March 27, 2020 and March 29, 2020.
(7)
| The amount shown reflects: |
$3,447, representing the amount of the premium deemed to have been paid on behalf of Mr. Trautman for the life insurance policies related to his Compensation-Based Split-Dollar Agreement in effect during 2019; $9,500, representing the matching contribution to the Park KSOP on Mr. Trautman’s behalf to match his 2019 pre-tax elective deferral contributions; $8,497, representing the amount of the premium deemed to have been paid on behalf of Mr. Trautman for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreements in effect during 2019; and $44,127, representing the amount of cash paid to Mr. Trautman with respect to dividend equivalent rights which vested on March 29, 2019 and March 31, 2017.2019. (8)
| The amount shown reflects: |
$768, representing the amount of the premium deemed to have been paid on behalf of Mr. Burt for the life insurance policy related to his Compensation-Based Split-Dollar Agreement in effect during 2021;
$9,750, representing the matching contribution to the Park KSOP on Mr. Burt’s behalf to match his 2021 pre-tax elective deferral contributions;
$2,565, representing the amount of the premium deemed to have been paid on behalf of Mr. Burt for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreement in effect during 2021; and
$32,992, representing the amount of cash paid to Mr. Burt with respect to dividend equivalent rights which vested on March 27, 2021 and March 31, 2021, as described more fully under the heading
“Equity Awards Exercised and Vested.” (9)
| The amount shown reflects: |
(8) The$721, representing the amount shown reflects:of the premium deemed to have been paid on behalf of Mr. Burt for the life insurance policy related to his Compensation-Based Split-Dollar Agreement in effect during 2020;
•$9,503, representing the matching contribution to the Park KSOP on Mr. Burt’s behalf to match his 2020 pre-tax elective deferral contributions;
$2,400, representing the amount of the premium deemed to have been paid on behalf of Mr. Burt for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreement in effect during 2020; and $35,718, representing the amount of cash paid to Mr. Burt with respect to dividend equivalent rights which vested on March 27, 2020 and March 29, 2020. (10)
| The amount shown reflects: |
$659, representing the amount of the premium deemed to have been paid on behalf of Mr. Burt for the life insurance policy related to his Compensation-Based Split-Dollar Agreement in effect during 2019; •$9,500, representing the matching contribution to the Park KSOP on Mr. Burt’s behalf to match his 2019 pre-tax elective deferral contributions;
•$2,235, representing the amount of the premium deemed to have been paid on behalf of Mr. Burt for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP AgreementsAgreement in effect during 2019; and
•$26,454, representing the amount of cash paid to Mr. Burt with respect to dividend equivalent rights which vested on March 29, 2019 as described more fully under the heading “Equity Awards Exercised and Vested”.March 31, 2019.
(11)
| Effective May 1, 2019, Mr. Miller became President of each of Park and Park National Bank and an executive officer of Park. He served as Executive Vice President of each of Park and Park National Bank from April 2017 to April 30, 2019. |
(12)
| Mr. Miller’s base salary (on an annual basis) was $350,000 for the period from January 1, 2019 through April 30, 2019, increasing to $575,000 for the period from May 1, 2019 through December 31, 2019 in connection with his promotion to President of each of Park and Park National Bank and an executive officer of Park effective May 1, 2019. |
(13)
| The amount shown reflects: |
(9) The amount shown reflects:
•$601,846, representing the amount of the premium deemed to have been paid on behalf of Mr. BurtMiller for the life insurance policypolicies related to his Compensation-Based Split-Dollar Agreement in effect during 2018;2021;
•$6,311,9,750, representing the matching contribution to the Park KSOP on Mr. Burt’sMiller’s behalf to match his 20182021 pre-tax elective deferral contributions (of the $7,231 matching contribution which had been reported in the “Summary Compensation Table for 2018” included in Park’s Proxy Statement for the 2019 Annual Meeting, $920 was forfeited in 2019 in conjunction with the partial refund of Mr. Burt’s 2018 pre-tax elective deferral contributions);contributions;
•$2,047,2,009, representing the amount of the premium as deemed to have been paid on behalf of Mr. BurtMiller for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreements in effect during 2018;2021; and
•$16,404,29,034, representing the amount of cash paid to Mr. BurtMiller with respect to dividend equivalent rights which vested on March 27, 2021 and March 31, 2018.2021, as described more fully under the heading “Equity Awards Exercised and Vested.” (10) The amount shown reflects:
TABLE OF CONTENTS (14)
| The amount shown reflects: |
$511,646, representing the amount of the premium deemed to have been paid on behalf of Mr. BurtMiller for the life insurance policypolicies related to his Compensation-Based Split-Dollar Agreement in effect during 2017;2020; •$3,917,9,750, representing the final matching contribution to the Park KSOP on Mr. Burt’sMiller’s behalf to match his 20172020 pre-tax elective deferral contributions (of the $4,500 matching contribution which had been reported in the “Summary Compensation Table for 2017” included in Park’s Proxy Statement for the 2018 Annual Meeting, $583 was forfeited in 2018 in conjunction with the partial refund of Mr. Burt’s 2017 pre-tax elective deferral contributions); andcontributions;
•$1,859,1,900, representing the amount of the premium deemed to have been paid on behalf of Mr. BurtMiller for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreements in effect during 2017;2020; and
•$6,288,24,767, representing the amount of cash paid to Mr. BurtMiller with respect to dividend equivalent rights which vested on March 31, 2017.
(11) Effective May 1, 2019, Mr. Miller became President of each of Park27, 2020 and Park National Bank and an executive officer of Park. He served as Executive Vice President of each of Park and Park National Bank from April 2017 to April 30, 2019. Since Mr. Miller did not qualify as an NEO under applicable SEC rules until the 2019 fiscal year, this table shows his information for only the 2019 fiscal year.March 29, 2020.
(15)
| The amount shown reflects: |
(12) Mr. Miller’s base salary (on an annual basis) was $350,000 from January 1, 2019 through April 30, 2019, increasing to $575,000 from May 1, 2019 through December 31, 2019 in connection with his promotion to President of each of Park and Park National Bank and an executive officer of Park effective May 1, 2019.
(13) The amount shown reflects:
•$372, representing the amount of the premium deemed to have been paid on behalf of Mr. Miller for the life insurance policy related to his Compensation-Based Split Dollar Agreement in effect during 2019;
•$9,500, representing the matching contribution to the Park KSOP on Mr. Miller’s behalf to match his 2019 pre-tax elective deferral contributions;
•$599, representing the amount of the premium deemed to have been paid on behalf of Mr. Miller for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreement in effect during 2019; and
•$15,433, representing the amount of cash paid to Mr. Miller with respect to dividend equivalent rights which vested on March 29, 2019 and March 31, 2019.
(16)
| Effective May 1, 2019, Mr. DeLawder ceased to serve as Chairman of the Board of each of Park and Park National Bank but continued to serve as an executive officer of Park and Park National Bank and an employee of Park National Bank, until his retirement from those positions on June 30, 2021. Mr. DeLawder served as Chairman of the Board of each of Park and Park National Bank from January 1, 2019 through April 30, 2019 during the 2019 fiscal year. |
(17)
| The amount reported represents the sum of: (a) Mr. DeLawder’s base salary of $143,750, received in his capacity as an executive officer of Park and Park National Bank and an employee of Park National Bank for the period from January 1, 2021 through June 30, 2021; and (b) cash compensation in the aggregate amount of $23,100, received by Mr. DeLawder in his capacity as a non-employee director of Park for the period from July 1, 2021 through December 31, 2021, which cash compensation is described more fully under the heading “DIRECTOR COMPENSATION – Annual Retainers and Meeting Fees – Cash Compensation.” |
(18)
| Mr. DeLawder’s base salary (on an annual basis) was $575,000 for the period from January 1, 2019 through April 30, 2019, decreasing to $287,500 for the period from May 1, 2019 through December 31, 2019 in connection with his ceasing to serve as Chairman of the Board of each of Park and Park National Bank effective May 1, 2019. |
(19)
| The amount shown reflects: |
$11,819, representing the amount of the premium deemed to have been paid on behalf of Mr. DeLawder for the life insurance policies related to his Compensation-Based Split-Dollar Agreement in effect during 2021; $9,750, representing the matching contribution to the Park KSOP on Mr. DeLawder’s behalf to match his 2021 pre-tax elective deferral contributions; $15,481, representing the amount of the premium deemed to have been paid on behalf of Mr. DeLawder for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreements in effect during 2021; and $37,733, representing the amount of cash paid to Mr. DeLawder with respect to dividend equivalent rights which vested on March 27, 2021 and March 31, 2021, as described more fully under the heading “Equity Awards Exercised and Vested”.Vested.” (20)
| The amount shown reflects: |
(14) Effective May 1, 2019,$10,553, representing the amount of the premium deemed to have been paid on behalf of Mr. DeLawder ceasedfor the life insurance policies related to serve as Chairmanhis Compensation-Based Split-Dollar Agreement in effect during 2020;
$9,750, representing the matching contribution to the Park KSOP on Mr. DeLawder’s behalf to match his 2020 pre-tax elective deferral contributions; $14,514, representing the amount of the Boardpremium deemed to have been paid on behalf of each of Park and Park National Bankbut continued to serve as an executive officer of Park. Mr. DeLawder served as Chairmanfor the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreements in effect during 2020; and $40,821, representing the amount of the Board of each of Parkcash paid to Mr. DeLawder with respect to dividend equivalent rights which vested on March 27, 2020 and Park National Bank during all of the 2017 fiscal year and the 2018 fiscal year and from January 1, 2019 through April 30, 2019 during the 2019 fiscal year.March 29, 2020. (21)
| The amount shown reflects: |
(15) Mr. DeLawder’s base salary (on an annual basis) was $575,000 from January 1, 2019 through April 30, 2019, decreasing to $287,500 from May 1, 2019 through December 31, 2019 in connection with his ceasing to serve as Chairman of the Board of each of Park and Park National Bank effective May 1, 2019.
(16) The amount shown reflects:
•$9,492, representing the amount of the premium deemed to have been paid on behalf of Mr. DeLawder for the life insurance policypolicies related to his Compensation-Based Split-Dollar Agreement in effect during 2019;
•$9,500, representing the matching contribution to the Park KSOP on Mr. DeLawder’s behalf to match his 2019 pre-tax elective deferral contributions;
•$13,695, representing the amount of the premium deemed to have been paid on behalf of Mr. DeLawder for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreements in effect during 2019; and
•$39,736, representing the amount of cash paid to Mr. DeLawder with respect to dividend equivalent rights which vested on March 29, 2019 as described more fully under the heading “Equity Awards Exercised and Vested”.
(17) The amount shown reflects:
•$8,553, representing the amount of the premium deemed to have been paid on behalf of Mr. DeLawder for the life insurance policy related to his Compensation-Based Split-Dollar Agreement in effect during 2018;
•$8,073, representing the matching contribution to the Park KSOP on Mr. DeLawder’s behalf to match his 2018 pre-tax elective deferral contributions (of the $9,250 matching contribution which had been reported in the “Summary Compensation Table for 2018” included in Park’s Proxy Statement for the 2019 Annual Meeting, $1,177 was forfeited in 2019 in conjunction with the partial refund of Mr. DeLawder’s 2018 pre-tax elective deferral contributions);
•$12,899, representing the amount of the premium deemed to have been paid on behalf of Mr. DeLawder for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreements in effect during 2018; and
•$38,289, representing the amount of cash paid to Mr. DeLawder with respect to dividend equivalent rights which vested on March 31, 2018.2019.
(18) The amount shown reflects:
•$7,358, representing the amount of the premium deemed to have been paid on behalf of Mr. DeLawder for the life insurance policy related to his Compensation-Based Split-Dollar Agreement in effect during 2017;
•$3,917, representing the final matching contribution to the Park KSOP on Mr. DeLawder’s behalf to match his 2017 pre-tax elective deferral contributions (of the $4,500 matching contribution which had been reported in the “Summary Compensation Table for 2017” included in Park’s Proxy Statement for the 2018 Annual Meeting, $583 was forfeited in 2018 in conjunction with the partial refund of Mr. DeLawder’s 2017 pre-tax elective deferral contributions);
•$12,130, representing the amount of the premium deemed to have been paid on behalf of Mr. DeLawder for the life insurance policies related to his Maximum Benefit Split-Dollar Agreement which also funded his SERP Agreements in effect during 2017; and
TABLE OF CONTENTS •$16,769, representing the amount of cash paid to Mr. DeLawder with respect to dividend equivalent rights which vested on March 31, 2017.
Item 402(u) of SEC Regulation S-K, which was adopted pursuant to the Dodd-Frank Act, requires that the following information about the 20192021 annual total compensation of Park’s Chairman/CEO (who serves as Park’s principal executive officer) and the median employee be disclosed: •the annual total compensation of Park’s Chairman/CEO, as reported in the Summary Compensation Table for 2019,2021, which was $2,113,848;$2,325,563;
•the annual total compensation of the median employee of all employees of Park and our subsidiaries (other than Park’s Chairman/CEO), which was $61,572;$65,619; and
•the ratio of (i) the annual total compensation of Park’s Chairman/CEO to (ii) the annual total compensation of the median employee, which was 34.3335.61 to 1.
Although there was no significant change to Park’s employee compensation arrangements during the 20192021 fiscal year, with continued reorganization throughout the Park made two acquisitions duringorganization following various restructuring initiatives that began in the past two2020 fiscal years. As a result,year, Park determined that it was appropriate to identify a new median employee. In order to identify the new median employee, management of Park included all employees of Park and our subsidiaries who were employed as of November 4, 20192021 (including part-time employees). In addition to the Chairman/CEO, any employee who was hired after November 4, 20192021, was excluded. The measure of compensation used to identify the median employee included base salary, any overtime compensation and any bonus or other incentive compensation, where applicable. Once the median employee was identified, all elements of the median employee’s compensation were included in determining the median employee’s annual total compensation. In addition to base salary, any overtime compensation and any bonus or other incentive compensation, the annual total compensation of the median employee also included any change in pension value, matching contributions to the Park KSOP and stock awards. This allowed for the elements of compensation for the median employee to be as comparable as possible to the elements of the annual total compensation of Park’s Chairman/CEO. Grants of Plan-Based Awards The following table sets forth information regarding PBRSU awards granted to the NEOs under the 2017 Employees LTIP during the 20192021 fiscal year. No other plan-based awards were granted to the NEOs during the 20192021 fiscal year.
Fiscal 20192021 Grants of Plan-Based Awards Estimated Future Payouts under
Equity Incentive Plan Awards(1) | | | | | | | | David L. Trautman | 1/1/2019 | 11/19/2018 | 1/1/2021 | | | 12/8/2020 | | | 3,000(2)(3) | | | 3,000(2)(3) | 4,500(2)(3)
| Brady T. Burt | 1/1/2019 | 11/19/2018 | 2,0004,500(2)(3)
| | | | Brady T. Burt | | | 1/1/2021 | | | 12/8/2020 | | | 2,000(2)(3) | 3,000(2)(3)
| Matthew R. Miller | 1/1/2019 | 11/19/2018 | 1,5002,000(2)(3)
| | | 1,5003,000(2)(3)
| 2,250(2)(3)
| C. Daniel DeLawder | 1/1/2019 | 11/19/2018 | Matthew R. Miller | | | 1/1/2021 | | | 12/8/2020 | | | 2,250(2)(3) | | | 2,250(2)(3) | | | 3,375(2)(3) | | | | C. Daniel DeLawder(4) | | | — | | | — | | | — | | | — | | | — | |
(1)
| The awards shown in this table are in the form of PBRSUs, with each PBRSU representing the right to receive one Park common share if earned and settled. Each award of PBRSUs also provides the holder with dividend equivalent rights which will vest and be settled in cash if, when and to the extent the related PBRSUs vest and are settled. |
(2)
| PBRSUs will be earned based on Park’s cumulative ROAA for the three-fiscal-year performance period beginning January 1, 2021 and ending December 31, 2023 as compared to the cumulative ROAA results for the $3 Billion to $10 Billion Industry Index (which excludes corporations classified for federal income tax purposes as “S corporations”). No PBRSUs will be earned, regardless of Park’s relative ROAA results, if Park’s consolidated net income for each fiscal year of the performance period does not equal or exceed 110% of all cash dividends declared and paid by Park during the applicable fiscal year. In addition, no PBRSUs will be earned if Park’s cumulative ROAA for the performance period is below the 50th percentile (or median) of the $3 Billion to $10 Billion Industry Index. If Park’s cumulative ROAA for the performance period equals the 50th percentile of the $3 Billion to $10 Billion Industry Index, holders of PBRSUs will earn the target number (which is also the threshold number) of PBRSUs. If Park’s cumulative ROAA for the performance period equals or exceeds the 80th percentile of the $3 Billion to $10 Billion Industry Index, holders of PBRSUs will earn PBRSUs equal to 150% of the target number, with the number of PBRSUs earned for results in between the 50th and 80th percentiles determined using interpolation on a straight-line basis. |
________________________
(1) The awards shown in this table are in the form of PBRSUs, with each PBRSU representing the right to receive one Park common share if earned and settled. Each award of PBRSUs also provides the holder with dividend equivalent rights which will vest and be settled in cash if, when and to the extent the related PBRSUs vest and are settled.
(2) PBRSUs will be earned based on Park’s cumulative ROAA for the three-fiscal-year performance period beginning January 1, 2019 and ending December 31, 2021 as compared to the cumulative ROAA results for the Midwest Regional Compensation Peer Group used as the comparator group. No PBRSUs will be earned, regardless of Park’s relative ROAA results, if Park’s consolidated net income for each fiscal year of the performance period does not equal or exceed 110% of all cash dividends declared and paid during the applicable fiscal year. In addition, no PBRSUs will be earned if Park’s cumulative ROAA for the performance period is below the 50th percentile (or median) of the Midwest Regional Compensation Peer Group. If Park’s cumulative ROAA for the performance period equals the 50th percentile of the Midwest Regional Compensation Peer Group, holders of PBRSUs will earn the target number (which is also the threshold number) of PBRSUs. If Park’s cumulative ROAA for the performance period equals or exceeds the 80th percentile of the Midwest Regional Compensation Peer Group, holders of PBRSUs will earn PBRSUs equal to 150% of the target number, with the number of PBRSUs earned for results in between the 50th and 80th percentiles determined using interpolation on a straight-line basis.
(3) Earned PBRSUs will also be subject to additional service-based vesting – 50% of the PBRSUs earned will vest at the end of the three-fiscal-year performance period once results are certified by the Compensation Committee, with the other 50% of the earned PBRSUs vesting on the first anniversary of the certification date. Common shares received upon settlement of earned and vested PBRSUs cannot be sold, transferred, assigned or otherwise similarly disposed of for five years after the date they are delivered. If an NEO dies or terminates employment with Park and our subsidiaries due to disability or retirement (i.e., has a “normal retirement” or an “early retirement” for purposes of the Park Pension Plan) at any time during the three-fiscal-year performance period, a prorated portion of the PBRSUs will vest on the last day of the performance period based on the number of PBRSUs that would have been earned based on the actual level of performance achieved during the performance period and the quotient of the number of full calendar months elapsed between the grant date and the date of death or termination of employment due to disability or retirement, as appropriate, divided by the number of months in the performance period. If an NEO dies or terminates employment with Park and our subsidiaries due to disability or retirement after the performance period has ended but before the service-based vesting requirements have been satisfied, the outstanding unvested PBRSUs will immediately vest. If an NEO’s employment with Park and our subsidiaries terminates for any other reason, including for
“cause” (as defined in the 2017 Employees LTIP), all unvested PBRSUs will be immediately forfeited. In the event of a “change in control” (as defined in the 2017 Employees LTIP), each NEO will immediately vest in all unvested PBRSUs as though the cumulative ROAA of Park as compared to the cumulative ROAA results of the Midwest Regional Compensation Peer Group used as the comparator group had been achieved at the level of achievement (i.e., the percentile of the Midwest Regional Compensation Peer Group) which would have been achieved if the performance period had begun on January 1, 2019 and ended on December 31 of the fiscal year most recently completed before the change in control as long as the other performance-based criteria for vesting had been satisfied as of the date of the change in control. The service-based vesting requirement will be deemed to have been satisfied as of the date of the change in control.
TABLE OF CONTENTS (3)
| Earned PBRSUs will also be subject to additional service-based vesting – 50% of the PBRSUs earned will vest at the end of the three-fiscal-year performance period once results are certified by the Compensation Committee, with the other 50% of the earned PBRSUs vesting on the first anniversary of the certification date. Common shares received upon settlement of earned and vested PBRSUs cannot be sold, transferred, assigned or otherwise similarly disposed of for five years after the date they are delivered. If an NEO dies or terminates employment with Park and our subsidiaries due to disability or retirement (i.e., has a “normal retirement” or an “early retirement” for purposes of the Park Pension Plan) at any time during the three-fiscal-year performance period, a prorated portion of the PBRSUs will vest on the last day of the performance period based on the number of PBRSUs that would have been earned based on the actual level of performance achieved during the performance period and the quotient of the number of full calendar months elapsed between the grant date and the date of death or termination of employment due to disability or retirement, as appropriate, divided by the number of months in the performance period. If an NEO dies or terminates employment with Park and our subsidiaries due to disability or retirement after the performance period has ended but before the service-based vesting requirements have been satisfied, the outstanding unvested PBRSUs will immediately vest. If an NEO’s employment with Park and our subsidiaries terminates for any other reason, including for “cause” (as defined in the 2017 Employees LTIP), all unvested PBRSUs will be immediately forfeited. In the event of a “change in control” (as defined in the 2017 Employees LTIP), each NEO will immediately vest in all unvested PBRSUs as though the cumulative ROAA of Park as compared to the cumulative ROAA results of the $3 Billion to $10 Billion Industry Index had been achieved at the level of achievement (i.e., the percentile of the $3 Billion to $10 Billion Industry Index) which would have been achieved if the performance period had begun on January 1, 2021 and ended on December 31 of the fiscal year most recently completed before the change in control as long as the other performance-based criteria for vesting had been satisfied as of the date of the change in control. The service-based vesting requirement will be deemed to have been satisfied as of the date of the change in control. |
(4)
| Based on a pre-determined plan, Mr. DeLawder was not awarded any PBRSUs for the 2021 fiscal year. This was based on the change of his job responsibilities during the 2019 fiscal year when he ceased to serve as Chairman of the Board of Park, which changes continued into the 2020 fiscal year and the 2021 fiscal year when Mr. DeLawder retired as an executive officer of Park and Park National Bank, and as an employee of Park National Bank, on June 30, 2021. |
Outstanding Equity Awards at Fiscal Year-End As of December 31, 2019,2021, the only type of equity award held by the NEOs was PBRSU awards. The following table sets forth information regarding the outstanding PBRSU awards held by the NEOs at December 31, 2019.
Outstanding Equity Awards at 20192021 Fiscal Year-End Name | Stock
Award
Grant
Date | | | Number
of
Shares or
Units of
Stock
That
Have Not
Vested (#) | | | Market
Value of
Shares or
Units
of Stock
That Have
Not
Vested ($)(1) | | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested (#) | | | Equity
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested ($)(1) | | | | David L. Trautman | | | 1/1/20162018 | | | 1,328.13(2) | | | $182,366 | | | — | | | — | | | | 1/1/2019 | | | — | | | — | | | 3,000(3) | | | $411,930 | | | | 1/1/2020 | | | — | | | — | | | 2,700(4) | | | $370,737 | | | | 1/12021 | | | — | | | — | | | 3,000(5) | | | $411,930 | | | | Brady T. Burt | | | 1/1/2018 | | | 1,715.28927.92(2)
| $175,610 | _ | _$127,413 | | | — | | | — | | | 1/1/2017 | - | - | 2,5001/1/2019
| | | — | | | — | | | 2,000(3) | | | $255,950274,620 | | | 1/1/2018 | - | - | 1,8751/1/2020
| | | — | | | — | | | 1,800(4) | | | $191,963247,158 | | | 1/1/2019 | - | - | 3,0001/1/2021
| | | — | | | — | | | 2,000(5) | | | $307,140274,620 | | Brady T. Burt | Matthew R. Miller | | | 1/1/20162018 | | | 1,200.69850.00(2)
| $122,927 | _ | _$116,714 | | | — | | | — | | | 1/1/2017 | - | - | 1,7501/1/2019
| | | — | | | — | | | 1,500(3) | | | $179,165205,965 | | | 1/1/2018 | - | - | 1,3101/1/2020
| | | — | | | — | | | 2,025(4) | | | $134,118278,053 | | | 1/1/2019 | - | - | 2,0001/1/2021
| | | — | | | — | | | 2,250(5) | | | $204,760308,948 | | Matthew R. Miller | 1/1/2016 | 686.11C. Daniel DeLawder
| | | 1/1/2018 | | | 1,062.50(2) | $70,244 | _ | _$145,892 | | | — | | | — | | | 1/1/2017 | - | - | 1,5001/1/2019
| | | — | | | — | | | 2,250(3) | | | $153,570308,948 | | | 1/1/2018 | - | - | 1,2001/1/2020
| | | — | | | — | | | 1,350(4) | $122,856 | | | 1/1/2019 | - | - | 1,500(5)$185,369
| $153,570 | C. Daniel DeLawder | 1/1/2016 | 1,372.22(2)
| $140,488 | _ | _ | | 1/1/2017 | - | - | 2,000(3)
| $204,760 | | 1/1/2018 | - | - | 1,500(4)
| $153,570 | | 1/1/2019 | - | - | 2,250(5)
| $230,355 |
________________________
(1) Market value represents the product of the closing price of the Park common shares as of December 31, 2019 (the last trading day of the 2019 fiscal year), which was $102.38, multiplied by the number of PBRSUs shown in the table. Dollar amounts have been rounded up to the nearest whole dollar.
(2) On March 29, 2019 (the “2016 Grant Certification Date”), the Compensation Committee certified the level of achievement with respect to the performance criteria for the three-fiscal-year performance period applicable to PBRSUs granted to the NEO on January 1, 2016 pursuant to the 2013 LTIP. The PBRSUs convert into Park common shares on a one-for-one basis. The PBRSUs earned based on the performance level achieved are also subject to service-based vesting with 50% vesting on the 2016 Grant Certification Date and the other 50% to vest on the first anniversary of the 2016 Grant Certification Date. The number shown reflects the number of common shares underlying PBRSUs that
were earned based on the performance level achieved and are also subject to service-based vesting pursuant to which they are to vest on March 29, 2020.TABLE OF CONTENTS (1)
| Market value represents the product of the closing price of the Park common shares as of December 31, 2021 (the last trading day of the 2021 fiscal year), which was $137.31, multiplied by the number of PBRSUs shown in the table. Dollar amounts have been rounded up to the nearest whole dollar. |
(2)
| On March 16, 2021, with a Grant Certification Date of March 31, 2021 (the “2018 Grant Certification Date”), the Executive Committee of the Park Board of Directors certified the level of achievement with respect to the performance criteria for the three-fiscal-year performance period applicable to PBRSUs granted to the NEO on January 1, 2018 pursuant to the 2017 Employees LTIP. The PBRSUs convert into Park common shares on a one-for-one basis. The PBRSUs earned based on the performance level achieved are also subject to service-based vesting with 50% vesting on the 2018 Grant Certification Date and the other 50% to vest on the first anniversary of the 2018 Grant Certification Date. The number shown reflects the number of common shares underlying PBRSUs that were earned based on the performance level achieved and are also subject to service-based vesting pursuant to which they are to vest on March 31, 2022. |
(3)
| The number shown represents the target number of PBRSUs which would be earned under the award granted pursuant to the 2017 Employees LTIP, based on: (i) Park’s cumulative ROAA for the three-fiscal-year performance period from January 1, 2019 to December 31, 2021 equaling the 50th percentile of the Midwest Regional Compensation Peer Group used as the comparison group; and (ii) Park’s net income for each fiscal year of the performance period equaling or exceeding 110% of all cash dividends declared and paid by Park during the applicable fiscal year. See footnote (2) to the “Summary Compensation Table for 2021” for more information on (i) the grant date fair value of the target number of PBRSUs (which is also the threshold number) and (ii) the grant date fair value of the maximum number of PBRSUs, in each case that could be earned. |
(4)
| The number shown represents the target number of PBRSUs which would be earned under the award granted pursuant to the 2017 Employees LTIP, based on: (i) Park’s cumulative ROAA for the three-fiscal-year performance period from January 1, 2020 to December 31, 2022 equaling the 50th percentile of the $3 Billion to $10 Billion Industry Index; and (ii) Park’s net income for each fiscal year of the performance period equaling or exceeding 110% of all cash dividends declared and paid by Park during the applicable fiscal year. See footnote (2) to the “Summary Compensation Table for 2021” for more information on (i) the grant date fair value of the target number of PBRSUs (which is also the threshold number) and (ii) the grant date fair value of the maximum number of PBRSUs, in each case that could be earned. |
(5)
| The number shown represents the target number of PBRSUs which would be earned under the award granted pursuant to the 2017 Employees LTIP, based on: (i) Park’s cumulative ROAA for the three-fiscal-year performance period from January 1, 2021 to December 31, 2023 equaling the 50th percentile of the $3 Billion to $10 Billion Industry Index; and (ii) Park’s net income for each fiscal year of the performance period equaling or exceeding 110% of all cash dividends declared and paid by Park during the applicable fiscal year. See footnote (2) to the “Summary Compensation Table for 2021” and the table under the heading “Grants of Plan-Based Awards” for more information on (i) the target number of PBRSUs (which is also the threshold number) and the grant date fair value thereof and (ii) the maximum number of PBRSUs and the grant date fair value thereof, in each case that could be earned. |
(3) The number shown represents the target number of PBRSUs which would be earned under the award granted pursuant to the 2013 LTIP, based on: (i) Park’s cumulative ROAA for the three-fiscal-year performance period from January 1, 2017 to December 31, 2019 equaling the 50th percentile of the $3 billion to $10 billion Industry Index; and (ii) Park’s net income for each fiscal year of the performance period equaling or exceeding 110% of all cash dividends declared and paid during the applicable fiscal year. See footnote (2) to the “Summary Compensation Table for 2019” for more information on (i) grant date fair value of the target number of PBRSUs (which is also the threshold number) and (ii) the grant date fair value of the maximum number of PBRSUs, in each case that could be earned.
(4) The number shown represents the target number of PBRSUs which would be earned under the award granted pursuant to the 2017 Employees LTIP, based on: (i) Park’s cumulative ROAA for the three-fiscal-year performance period from January 1, 2018 to December 31, 2020 equaling the 50th percentile of the $3 billion to $10 billion Industry Index; and (ii) Park’s net income for each fiscal year of the performance period equaling or exceeding 110% of all cash dividends declared and paid during the applicable fiscal year. See footnote (2) to the “Summary Compensation Table for 2019” for more information on (i) the grant date fair value of the target number of PBRSUs (which is also the threshold number) and (ii) the grant date fair value of the maximum number of PBRSUs, in each case that could be earned.
(5) The number shown represents the target number of PBRSUs which would be earned under the award granted pursuant to the 2017 Employees LTIP, based on: (i) Park’s cumulative ROAA for the three-fiscal-year performance period from January 1, 2019 to December 31, 2021 equaling the 50th percentile of the Midwest Regional Compensation Peer Group used as the comparator group; and (ii) Park’s net income for each fiscal year of the performance period equaling or exceeding 110% of all cash dividends declared and paid during the applicable fiscal year. See footnote (2) to the “Summary Compensation Table for 2019” and the table under the heading “Grants of Plan-Based Awards” for more information on (i) the target number of PBRSUs (which is also the threshold number) and the grant date fair value thereof and (ii) the maximum number of PBRSUs and the grant date fair value thereof, in each case that could be earned.
Equity Awards Exercised and Vested The only type of equity award which has been granted to the NEOs under either the 2013 LTIP or the 2017 Employees LTIP has been PBRSU awards. The following table provides information with respect to PBRSUs that not only were earned based on the performance level achieved for the applicable performance period but also satisfied the service-based vesting requirement during the 20192021 fiscal year.
Stock Awards Vested in 20192021 | | David L. Trautman | | | 2,967.02 | | | $439,275 | | | | Brady T. Burt | | | 2,075.14 | | | $307,239 | | | | Matthew R. Miller | | | 1,833.33 | | | $271,167 | | | | C. Daniel DeLawder | | | 2,373.61 | | | $351,419 | |
(1)
| On the 2018 Grant Certification Date, the Executive Committee of the Park Board of Directors certified the level of achievement with respect to the performance criteria for the three-fiscal-year performance period applicable to PBRSUs granted to each NEO on January 1, 2018 pursuant to the 2017 Employees LTIP. The PBRSUs convert into Park common shares on a one-for-one basis. The PBRSUs earned based on the performance level achieved are also subject to service-based vesting with 50% vesting on the 2018 Grant Certification Date and the other 50% to vest on the first anniversary of the 2018 Grant Certification Date. The number shown includes the following number of common shares underlying PBRSUs that were earned by each NEO based on the performance level achieved and satisfaction of the service-based vesting requirement on the 2018 Grant Certification Date: (i) for Mr. Trautman, 1,328.13 common shares; (ii) for Mr. Burt, 927.92 common shares; (iii) for Mr. Miller, 850 common shares; and (iv) for Mr. DeLawder, 1,062.5 common shares. These common shares cannot be sold, transferred, assigned or otherwise similarly disposed of by Mr. Trautman, Mr. Burt and Mr. Miller, respectively, for five years after the 2018 Grant Certification Date. The five-year holding requirement ceased to apply to Mr. DeLawder’s common shares, effective as of his retirement on June 30, 2021. |
(2)
| On March 17, 2020, with a Grant Certification Date of March 27, 2020 (the “2017 Grant Certification Date”), the Executive Committee of the Park Board of Directors certified the level of achievement with respect to the performance criteria for the three-fiscal-year performance period applicable to PBRSUs granted to each NEO on January 1, 2017 pursuant to the 2013 LTIP. The number shown includes the following number of common shares underlying PBRSUs that were earned by each NEO based on the performance level achieved and satisfaction of the service-based vesting requirement on the one-year anniversary of the 2017 Grant Certification Date: (i) for Mr. Trautman, |
| | | | | | | | | | Name | Number of Common Shares Acquired on Vesting(#)(1)(2) | Value Realized on Vesting($)(3) | | David L. Trautman | 3,054.17 | $333,509 | | Brady T. Burt | 1,870.13 | $203,650 | | Matthew R. Miller | 1,087.78 | $118,501 | | C. Daniel DeLawder | 2,711.11 | $296,614 |
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(1) On the 2016 Grant Certification Date, the Compensation Committee certified the level of achievement with respect to the performance criteria for the three-fiscal-year performance period applicable to PBRSUs granted to each NEO on January 1, 2016 pursuant to the 2013 LTIP. The PBRSUs convert into Park common shares on a one-for-one basis. The PBRSUs earned based on the performance level achieved are also subject to service-based vesting with 50% vesting on the 2016 Grant Certification Date and the other 50% to vest on the first anniversary of the 2016 Grant Certification Date. The number shown includes the following number of common shares underlying PBRSUs that were earned by each NEO based on the performance level achieved and satisfaction of the service-based vesting requirement on the 2016 Grant Certification Date: (i) for Mr. Trautman, 1,715.28TABLE OF CONTENTS 1,638.89 common shares; (ii) for Mr. Burt, 1,200.691,147.22 common shares; (iii) for Mr. Miller, 686.11983.33 common shares; and (iv) for Mr. DeLawder, 1,372.221,311.11 common shares. These common shares cannot be sold, transferred, assigned or otherwise similarly disposed of by Mr. Trautman, Mr. Burt and Mr. Miller, respectively, for five years after the 20162017 Grant Certification Date. (2) On March 31, 2018 (the “2015 Grant Certification Date”), the Compensation Committee certified the level of achievement with respect The five-year holding requirement ceased to the performance criteria for the three-fiscal-year performance period applicableapply to PBRSUs granted to each NEO on January 1, 2015 pursuant to the 2013 LTIP. The number shown includes the following number ofMr. DeLawder’s common shares, underlying PBRSUs that were earned by each NEO basedeffective of his retirement on the performance level achieved and satisfaction of the service-based vesting requirement on the one-year anniversary of the 2015 Grant Certification Date: (i) for Mr. Trautman, 1,338.89 common shares; (ii) for Mr. Burt, 669.44 common shares; (iii) for Mr. Miller, 401.67 common shares; and (iv) for Mr. DeLawder, 1,338.89 common shares. These common shares cannot be sold, transferred, assigned or otherwise similarly disposed of for five years after the 2015 Grant Certification Date.June 30, 2021.
(3)
| The value realized on vesting represents the sum of (i) the product of the closing price of the Park common shares as of March 31, 2021 ($129.30), multiplied by the number of common shares shown in footnote (1) to the table; (ii) the product of the closing price of the Park common shares as of March 27, 2021 ($134.47), multiplied by the number of common shares shown in footnote (2) to the table; (iii) the amount of cash paid to each NEO with respect to dividend equivalent rights which also vested on the 2018 Grant Certification Date (approximately $13.82 with respect to the dividend equivalent right related to each vested PBRSU); and (iv) the amount of cash paid to each NEO with respect to dividend equivalent rights which also vested on the one-year anniversary of the 2017 Grant Certification Date (approximately $17.58 with respect to the dividend equivalent right related to each vested PBRSU). Dollar amounts have been rounded up to the nearest whole dollar. |
(3) The value realized on vesting represents the sum of (i) the product of the closing price of the Park common shares as of March 29, 2019 ($94.75), multiplied by the number of common shares shown in the table; (ii) the amount of cash paid to each NEO with respect to dividend equivalent rights which also vested on the one-year anniversary of the 2015 Grant Certification Date (approximately $16.56 with respect to the dividend equivalent right related to each vested PBRSU); and (iii) the amount of cash paid to each NEO with respect to dividend equivalent rights which also vested on the 2016 Grant Certification Date (approximately $12.80 with respect to the dividend equivalent right related to each vested PBRSU). Dollar amounts have been rounded up to the nearest whole dollar.
Post-Employment Payments and Benefits Pension and Supplemental Benefits Park Pension Plan The Park Pension Plan covers employees of our subsidiaries who have attained age 21 and completed one year of service. Under the Park Pension Plan, annual benefits are paid in monthly installments for life with 120 months of payments guaranteed. ForAs of the date of this proxy statement, an employee’s “normal retirement date” for purposes of the Park Pension Plan an employee’s “normal retirement date” iswas defined as the earlier of the first day of the month coincident with or next following the employee reaching age 70 1/2 or the employee reaching age 65 and completing five years of service. For each employee hired after March 31, 2021, such employee’s “normal retirement date” will be defined as the first day of the month coincident with or next following the employee reaching age 65 and completing five years of service. The amount of annual “normal retirement benefit” to be paid in monthly installments to an eligible employee is the greater of: •29% of the average monthly compensation of the employee reduced for expected years of service at normal retirement less than 25; or
•29% of the average monthly compensation plus 16% of the average monthly compensation in excess of one-twelfth of covered compensation reduced for expected years of service at normal retirement less than 35.
The average monthly compensation of an employee is calculated by averaging the highest five consecutive calendar years of compensation as reported on the employee’s Forms W-2 during the ten calendar years preceding the date of termination. Base salary and incentive compensation, including elective deferral contributions, are included in calculating an employee’s monthly compensation for purposes of the Park Pension Plan. In addition, the employees of certain of the divisions of Park National Bank (which had previously been separate banks prior to their merger into Park National Bank) participated in pension plans maintained for their benefit prior to the bank’sbanks being acquired by Park and the merger of the bank’s pension plan into the Park Pension Plan. Benefits under the Park Pension Plan cannot be less than the sum of the benefit provided under the merged pension plan and the Park Pension Plan based on years of service since the date of merger of the two plans. Applicable provisions of the Internal Revenue Code currently limit the amount of annual compensation used to determine plan benefits under a defined benefit pension plan, such as the Park Pension Plan, and the amount of plan benefits payable annually under such a plan. Total compensation in excess of the limit will not be taken into account for benefit calculation purposes. The average of the maximum annual total compensation which may be used in determining plan benefits under qualified defined benefit plans for the past five years is $271,000.$280,000. The 20192021 monthly rate of total compensation used to determine benefits was limited to $23,333$24,167 per month, which is the equivalent of an annual total compensation of $280,000.$290,000. If an employee elects to retire after completing ten years of service and reaching 55 years of age, the employee may receive a monthly benefit for life with 120 months of payments guaranteed beginning at his or her normal retirement date equal to the “accrued benefit” at the early retirement date. Payments to the employee may begin immediately, with the benefit being actuarially reduced to reflect early payment. For purposes of the Park Pension Plan, the “accrued benefit” at any time prior to an employee’s normal retirement date is the normal retirement benefit as described above multiplied by a fraction, the
numerator of which is the employee’s total years of service as of the date of determination and the denominator of which is the employee’s expected years of service at normal retirement. TABLE OF CONTENTS An employee may continue employment with Park and/or one of our subsidiaries after his or her normal retirement date. In such an event, the employee will receive the benefit he or she would have received on his or her normal retirement date actuarially increased to reflect delayed payment. Notwithstanding the foregoing, the benefit received by such an employee will not be less than the benefit accrued at delayed retirement reflecting service and compensation to such date. Upon termination of employment after five or more years, an employee has a vested interest in his or her accrued benefit which will be payable on the normal retirement date. An employee will generally have no vested interest if he or he/she terminates employment after less than five years of service with Park and/or one of our subsidiaries. An employee who terminates employment with ten or more years of service with Park and/or one of our subsidiaries may elect to receive his or her vested interest as early as age 55. If an employee becomes totally and permanently disabled prior to his or her normal retirement date and retires after being determined to be disabled under the provisions of the Social Security Act and the related regulations for at least six months, he or he/she will receive a disability retirement benefit equal to his or her “accrued benefit” at disability reduced actuarially for payment preceding normal retirement. In the event of a married employee’s death after the completion of five years of service, but prior to meeting the eligibility requirements for early retirement, the participant will be assumed to have terminated employment the day before his or his/her death, survived to his or his/her early retirement date, elected a joint and 100% survivor benefit, and passed away the following day. If an unmarried employee dies prior to the early retirement age, the survivor annuity will be the 10-year certain and life annuity payable to such employee if such employee had terminated employment one day prior to his or his/her death. In the event of a married employee’s death after meeting the requirements for early retirement, his or his/her surviving spouse will receive the joint and 100% survivor benefit calculated on the day before his or his/her death. If an unmarried employee or unmarried “inactive” employee dies on or after the early retirement age, the survivor annuity will be computed as if he or he/she started receiving a 10-year certain and life annuity on the day before his or her death. For a vested terminated employee, death benefits are calculated the same as for active employees, but based on the employee’s accrued benefit at his or his/her termination date. An eligible employee of Park and/or one of our subsidiaries may opt to receive his or his/her benefits pursuant to the following methods of settlement that are actuarially equivalent to the normal form of annuity: •a benefit to be paid during the employee’s lifetime with one-half of the benefit to be continued to be paid to the employee’s spousebeneficiary for his or his/her lifetime after the employee’s death;
•a benefit to be paid during the employee’s lifetime with three-fourths of the benefit to be continued to be paid to the employee’s spousebeneficiary for his or his/her lifetime after the employee’s death;
•a benefit to be paid during the employee’s lifetime with the same benefit to be continued to be paid to the employee’s spousebeneficiary for his or his/her lifetime after the employee’s death;
•a benefit payable in equal installments during the employee’s lifetime;
•a benefit to be paid for 120 months certain and thereafter for life; or
•an unlimited lump-sum settlement for retirees and a lump-sum settlement under $15,000 (applicable since October 1, 2013) for vested employees who have not yet attained retirement age.
It is not possible for an employee’s years of service under the Park Pension Plan to exceed the employee’s actual years of service with Park and/or our subsidiaries. Supplemental Executive Retirement Benefits – 2008 Agreements David L. Trautman, Brady T. Burt and Matthew R. Miller On February 18, 2008, Park are parties toentered into a Supplemental Executive Retirement Benefits Agreement made as of February 18,with David L. Trautman (the “Trautman 2008 (his “2008 SERP Agreement”). Mr. Trautman’s 2008 SERP Agreement represents an unfunded, non-qualified benefit arrangement designed to constitute a portion of aggregate retirement benefits for Mr. Trautman. His 2008 SERP Agreement terminates upon Mr. Trautman’s death. Under histhe Trautman 2008 SERP Agreement, Mr. Trautman will be entitled to receive an annual supplemental retirement benefit of $125,000 (his “2008 Full Benefit”), commencing on the first business day of the March following the later of (i) the date on which Mr. Trautman separates from service with Park and our affiliates (within the meaning of Section 409A of the Internal Revenue Code and the TABLE OF CONTENTS Treasury regulations promulgated thereunder (collectively, “Section 409A”)) and (ii) Mr. Trautman’s attainment ofTrautman attains age 62 (his “2008 SERP Payment Commencement Date”) and continuing on the first business day on or immediately after each anniversary of his 2008 SERP Payment Commencement Date until Mr. Trautman’s death. On June 15, 2015, Park National Bank entered into Supplemental Executive Retirement Benefits Agreements with each of David L. Trautman, Brady T. Burt and Matthew R. Miller (the “2015 SERP Agreements”). Under their respective 2015 SERP Agreements, Mr. Trautman, Mr. Burt and Mr. Miller will be entitled to receive an annual supplemental retirement benefit of $253,800, $201,000 and $121,900, respectively (each, a “2015 SERP Full Benefit”), commencing on the first business day of March following the later of (i) the date on which Mr. Trautman, Mr. Burt or Mr. Miller, as appropriate, separates from service with Park National Bank and its affiliates and (ii) Mr. Trautman, Mr. Burt or Mr. Miller, as appropriate, attains age 65 (each, a “2015 SERP Payment Commencement Date”) and continuing on the first business day on or immediately after each anniversary of the applicable 2015 SERP Payment Commencement Date until the death of Mr. Trautman. Trautman, Mr. Burt or Mr. Miller, respectively. On January 27, 2020, Park National Bank entered into a Supplemental Executive Retirement Benefits Agreement with Matthew R. Miller (the “2020 Miller SERP Agreement”). Under the Miller 2020 SERP Agreement, Mr. Miller will be entitled to receive an annual supplemental retirement benefit of $190,100 (his “2020 SERP Full Benefit”), commencing on the first business day of March following the later of (i) the date on which Mr. Miller separates from service with Park National Bank and its affiliates and (ii) Mr. Miller attains age 65 (his “2020 SERP Payment Commencement Date”) and continuing on the first business day on or immediately after each anniversary of his 2020 SERP Payment Commencement Date until Mr. Miller’s death. If Mr. Trautman, Mr. Burt or Mr. Miller is a “specified employee” (within the meaning of Section 409A), no payment towill be made followingunder his separation of service with Park and our affiliates may be madeSERP Agreement(s) until the first day of the seventh month following such separation from service.service with Park National Bank and its affiliates (and, in the case of the Trautman 2008 SERP Agreement, Park and our affiliates). The amount paid on this later date will include the cumulative amount that could not be paid during the prior six-month period. If Mr. Trautman separates from service with Park and our affiliates for any reason prior to his 2008 SERP Payment Commencement Date, generally he will forfeit any right to payment under histhe Trautman 2008 SERP Agreement. However, in the event thatif Mr. Trautman becomes “substantially disabled” (as defined in histhe Trautman 2008 SERP Agreement) while employed by Park and our affiliates prior to his 2008 SERP Payment Commencement Date, he will be entitled to receive a reduced Limited Benefit, the amount of which varies dependingwill be based on the year in which Mr. Trautman becomes substantially disabled. In the event a “change in control” (as defined in his 2008 SERP Agreement) occurs before Mr. Trautman experiences a separation from service with Park and our affiliates, Mr. Trautman will become fully vested in his 2008 Full Benefit upon any subsequent separation from service, other than for “cause” (as defined in his 2008 SERP Agreement) as though he remained continuously employed with Park and our affiliates until his 2008 SERP Payment Commencement Date and payments of his 2008 Full Benefit will begin on his 2008 Payment Commencement Date as described above. If Mr. Trautman experiences a separation from service with Park and its affiliates for “cause” or if Park determines, following his 2008 SERP Payment Commencement Date or Mr. Trautman’s becoming substantially disabled, that cause existed to terminate Mr. Trautman, his 2008 SERP Agreement will immediately terminate, Mr. Trautman will forfeit any right to receive future payments and Mr. Trautman must return all payments previously made under his 2008 SERP Agreement within 30 days. In addition, Mr. Trautman will forfeit the right to receive future payments under his 2008 SERP Agreement if he violates the non-competition or non-solicitation
covenants in his 2008 SERP Agreement during the 12 months following his separation from service with Park and our affiliates.
C. Daniel DeLawder and Park are parties to an Amended and Restated Supplemental Executive Retirement Benefits Agreement made as of February 18, 2008 (as amended, his “2008 SERP Agreement”). Mr. DeLawder’s 2008 SERP Agreement also represents an unfunded, non-qualified benefit arrangement designed to constitute a portion of the aggregate retirement benefits for Mr. DeLawder. His 2008 SERP Agreement terminates upon Mr. DeLawder’s death.
Mr. DeLawder became vested with respect to Full Benefit of $127,900 under his 2008 SERP Agreement (his “2008 SERP Full Benefit”) at age 62. Payments under Mr. DeLawder’s 2008 SERP Agreement will begin on the first business day of the March following the date Mr. DeLawder separates from service with Park and our affiliates (his “2008 SERP Payment Commencement Date”) and continue on the first business day on or immediately after each anniversary of his 2008 SERP Payment Commencement Date until the death of Mr. DeLawder. If Mr. DeLawder dies before payments have begun under his 2008 SERP Agreement, all benefits under his 2008 SERP Agreement will immediately cease. However, if Mr. DeLawder dies after payments have begun but before he has received 15 annual payments under his 2008 SERP Agreement, his designated beneficiary will receive the balance of the 15 annual payments at the same time and in the same form as Mr. DeLawder would have if he had survived. If Mr. DeLawder is a “specified employee” (within the meaning of Section 409A), no payment to be made following his separation from service with Park and our affiliates may be made until the first day of the seventh month following such separation from service. The amount paid on this later date will include the cumulative amount that could not be paid during the prior six-month period.
If Mr. DeLawder experiences a separation from service with Park and our affiliates for “cause” (as defined in his 2008 SERP Agreement) or if Park determines, following his 2008 SERP Payment Commencement Date, that cause existed to terminate Mr. DeLawder, his 2008 SERP Agreement will immediately terminate, Mr. DeLawder will forfeit any right to receive future payments and Mr. DeLawder must return all payments previously made under his 2008 SERP Agreement within 30 days. In addition, Mr. DeLawder will forfeit the right to receive future payments under his 2008 SERP Agreement if he violates the non-competition or non-solicitation covenants in his 2008 SERP Agreement during the 12 months following his separation from service with Park and our affiliates.
Supplemental Executive Retirement Benefits – 2015 Agreements
On June 15, 2015, Park National Bank entered into Supplemental Executive Retirement Benefits Agreements (the “2015 SERP Agreements”) with each of David L. Trautman, Brady T. Burt, Matthew R. Miller and C. Daniel DeLawder.
Each of the 2015 SERP Agreements represents an unfunded, non-qualified benefit arrangement designed to constitute a portion of the aggregate retirement benefits for the affected NEO. Under their respective 2015 SERP Agreements, Mr. Trautman, Mr. Burt and Mr. Miller will be entitled to receive an annual supplemental retirement benefit of $253,800, $201,000 and $121,900, respectively (each of their “2015 SERP Full Benefit”), commencing on the first business day of the March following the later of (i) the date on which Mr. Trautman, Mr. Burt or Mr. Miller, as appropriate, separates from service with Park National Bank and its affiliates and (ii) their attainment of age 65 (each of their “2015 SERP Payment Commencement Date”) and continuing on the first business day on or immediately after each anniversary of their respective 2015 SERP Payment Commencement Dates until the death of Mr. Trautman, Mr. Burt or Mr. Miller. Under his 2015 SERP Agreement, Mr. DeLawder will be entitled to receive an annual supplemental retirement benefit of $56,700 (his “2015 SERP Full Benefit”) commencing on the first day of the March following the date on which Mr. DeLawder separates from service with Park National Bank
and its affiliates (his “2015 SERP Payment Commencement Date”) and continuing on the first business day on or immediately after each anniversary of his 2015 SERP Payment Commencement Date. Mr. DeLawder vested in his 2015 SERP Full Benefit when he attained age 69. In each case, if the NEO is a “specified employee” (within the meaning of Section 409A), no payment to be made following the NEO’s separation from service with Park National Bank and its affiliates may be made until the first day of the seventh month following such separation from service. The amount paid on this later date will include the cumulative amount that could not be paid during the prior six-month period.
Each 2015 SERP Agreement with Mr. Trautman, Mr. Burt and Mr. Miller terminates upon the death of the affected NEO. If Mr. DeLawder dies before payments have begun under his 2015 SERP Agreement, all benefits under his 2015 SERP Agreement will immediately cease. However, if Mr. DeLawder dies after payments have begun but before he has received 15 annual payments under his 2015 SERP Agreement, his designated beneficiary will receive the balance of the 15 annual payments at the same time and in the same form as Mr. DeLawder would have if he had survived.
If Mr. Trautman, Mr. Burt or Mr. Miller voluntarily resigns from full-time employment with Park National Bank and its affiliates for any reason before attaininghe attains age 62, or Park National Bank or any of ourits affiliates dischargesdischarge Mr. Trautman, Mr. Burt or Mr. Miller for any reason before he attains age 62, then the affected NEOindividual generally will not be entitledforfeit any right to any supplemental retirement benefitspayment under his 2015 SERP Agreement which will be immediately terminated.and, in the case of Mr. Miller, the Miller 2020 SERP Agreement. If Mr. Trautman, Mr. Burt or Mr. Miller experiences a separation from service with Park National Bank and its affiliates after age 62 but before age 65, 65: the respective NEOaffected individual will receive, instead of his 2015 SERP Full Benefit, a “2015 SERP Early Benefit” in a lesser amount which will be based on the year in which the NEOhe separates from service; and Mr. Miller will receive, instead of his 2020 SERP Full Benefit, a “2020 SERP Early Benefit” in a lesser amount based on the year in which he separates from service. The 2015 Each SERP Early Benefit will be paid in the same manner as described above with respectthe Full Benefit to a 2015 SERP Full Benefit.which it relates. If a “change in control” (as defined in the 2015applicable SERP Agreements)Agreement(s)) occurs before any of the NEOsMr. Trautman, Mr. Burt or Mr. Miller experiences a separation from service with Park National Bank and its affiliates (or, in the affected NEO(s)case of the Trautman 2008 SERP Agreement, Park and our affiliates): Mr. Trautman will become 100%fully vested and thus entitled to his/their 2015 SERPin his 2008 Full Benefit upon any subsequent separation from service, other than for cause,“cause” (as defined in the Trautman 2008 SERP Agreement) prior to age 65, in the case62 and payments of his 2008 Full Benefit will begin on his 2008 SERP Payment Commencement Date; TABLE OF CONTENTS each of Mr. Trautman, Mr. Burt and Mr. Miller. TheMiller will become fully vested in his 2015 Full Benefit upon any subsequent separation from service, other than for “cause” (as defined in the respective 2015 SERP Agreements) prior to age 65 and payments of his 2015 Full Benefit will be paidbegin on his 2015 SERP Payment Commencement Date; and Mr. Miller will become fully vested in his 2020 Full Benefit upon any subsequent separation from service, other than for “cause” (as defined in the same manner as described above with the respectMiller 2020 SERP Agreement) prior to the paymentage 65 and payments of a 2015 SERPhis 2020 Full Benefit without the occurrence of a change in control.will begin on his 2020 SERP Payment Commencement Date. For purposes of Mr. Trautman’sthe Trautman 2008 SERP Agreement, each of the 2015 SERP Agreements with Mr. Trautman, Mr. Burt and Mr. Miller’sMiller and the Miller 2020 SERP Agreement, described below under the caption “– Supplemental Executive Retirement Benefits – 2020 Agreement,”a “change in control” means any of the following has occurred: •the consummation (execution in the case of the Trautman 2008 SERP Agreement) of an agreement for the sale of all, or a material portion, of the assets of Park National Bank (Park in the case of the Trautman 2008 SERP Agreement);
•the consummation of a merger or recapitalization of Park National Bank (Park in the case of the Trautman 2008 SERP Agreement), or any merger or recapitalization, whereby Park National Bank (Park in the case of the Trautman 2008 SERP Agreement) is not the surviving entity; or
•the acquisition, directly or indirectly, of the beneficial ownership of 25% or more of the outstanding voting securities of Park National Bank or Park by any person or group.
If Mr. Trautman, Mr. Burt Mr. Miller or Mr. DeLawderMiller experiences a separation from service with Park National Bank and its affiliates for “cause” (as defined in the applicable 2015 SERP Agreement)Agreement(s)) or if the Board of Directors of Park National Bank (the Park Board of Directors in the case of the Trautman 2008 SERP Agreement) determines, following the affected NEO’sindividual’s Payment Commencement Date, that cause existed to terminate the NEO,individual, his 2015 SERP AgreementAgreement(s) will immediately terminate, the NEOindividual will forfeit any right to receive future payments and must return all payments previously made under the 2015his SERP AgreementAgreement(s) within 30 days after receipt of a written demand by Park National Bank (Park in the case of the Trautman 2008 SERP Agreement) for such repayment. In addition, an NEOeach of Mr. Trautman, Mr. Burt and Mr. Miller will forfeit the right to receive future payments under his 2015 SERP AgreementAgreement(s) if he violates certainthe non-competition or the non-solicitation of customers and non-solicitation of employees covenants set forth in his 2015 SERP AgreementAgreement(s) during a period ofthe 12 months following his separation from service with Park National Bank and its affiliates.affiliates (Park and our affiliates in the case of the Trautman 2008 SERP Agreement). Supplemental Executive Retirement Benefits – C. Daniel DeLawder On February 18, 2008, Park entered into an Amended and Restated Supplemental Executive Retirement Benefits Agreement with C. Daniel DeLawder (the “DeLawder 2008 SERP Agreement”). Mr. DeLawder became vested with respect to his Full Benefit of $127,900 under the DeLawder 2008 SERP Agreement (his “2008 SERP Full Benefit”) at age 62. Payments under the DeLawder 2008 SERP Agreement began in February of 2022 to adhere to the Payment Commencement Date of March 1, 2022 and will continue on or before each anniversary of March 1, 2022. On June 15, 2005, Park National Bank entered into a Supplemental Executive Retirement Benefits Agreement with Mr. DeLawder (the “DeLawder 2015 SERP Agreement”). Mr. DeLawder became vested with respect to his Full Benefit of $56,700 under the DeLawder 2015 SERP Agreement (his “2015 SERP Full Benefit”) at age 69. Payments under the DeLawder 2015 SERP Agreement began in February of 2022 to adhere to the Payment Commencement Date of March 1, 2022 and will continue on or before each anniversary of March 1, 2022. If Mr. DeLawder dies after payments have begun but before he has received 15 annual payments under each of the DeLawder 2008 SERP Agreement and the DeLawder 2015 SERP Agreement, his designated beneficiary will receive the balance of the 15 annual payments at the same time and in the same form as Mr. DeLawder would have if he had survived. Mr. DeLawder will forfeit the right to receive future payments under the DeLawder 2008 SERP Agreement and the DeLawder 2015 SERP Agreement if he violates the non-competition or the non-solicitation covenants in the DeLawder 2008 SERP Agreement and the DeLawder 2015 SERP Agreement during the 12 months following his June 30, 2021 retirement from Park and Park National Bank. Life Insurance Policies Associated with SERP Agreements Although neither Park nor Park National Bank is under any obligation to set aside, earmark or otherwise segregate any funds with which to pay its obligations under the 2008 SERP Agreement(s) and the 2015 SERP Agreement(s)Agreements to which it is a party, and the NEOs are and will remain unsecured general creditors of Park and/or Park National Bank, as appropriate, Park and Park TABLE OF CONTENTS National Bank have purchased life insurance policies with respect to each of the NEOs in order to informally fund theirthe respective obligations of Park and Park National Bank under the SERP Agreements. Park and Park National Bank anticipate that the life insurance policies will also provide a life insurance benefit for each NEO if he should die before age 84, in the case of Mr. Trautman and Mr. DeLawder, or age 82, in the case of Mr. Burt and Mr. Miller. The amount of this life insurance benefit is intended to approximate the present value of the stream of future benefits which would have been paid under the applicable SERP Agreement(s) to the NEO but had not been paid at the time of his death. These life insurance policies are related to the maximum benefitMaximum Benefit Split-Dollar Agreements described below in the section captioned “Potential Payments upon Termination of Employment or Change in Control – Split-Dollar Agreements – Split-Dollar Agreements with Specified Maximum Death Benefit.”. Supplemental Executive Retirement Benefits – 2020 Agreement
On January 27, 2020, Park National Bank entered into a Supplemental Executive Retirement Benefits Agreement (his “2020 SERP Agreement”) with Mr. Miller.
Mr. Miller’s 2020 SERP Agreement represents an unfunded, non-qualified benefit arrangement designed to constitute a portion of the aggregate retirement benefits for Mr. Miller. Under his 2020 SERP Agreement, Mr. Miller will be entitled to receive an annual supplemental retirement benefit of $190,100 (his “2020 SERP Full Benefit”), commencing on the first business day of the month of March following the later of (i) the date on which Mr. Miller separates from service with Park National Bank and its affiliates and (ii) Mr. Miller’s attainment of age 65 (his “2020 SERP Payment Commencement Date”) and continuing on the first business day on or immediately after each anniversary of his 2020 SERP Payment Commencement Date until Mr. Miller’s death. If Mr. Miller is a “specified employee” (within the meaning of Section 409A), no payment to be made following Mr. Miller’s separation from service with Park National Bank and its affiliates may be made until the first day of the seventh month following such separation from service. The amount paid on this later date will include the cumulative amount that could not be paid during the prior six-month period.
Mr. Miller’s 2020 SERP Agreement terminates upon his death.
If Mr. Miller voluntarily resigns from full-time employment with Park National Bank and its affiliates for any reason before attaining age 62, or Park National Bank or any of its affiliates discharges Mr. Miller for any reason before he attains age 62, then Mr. Miller will not be entitled to any supplemental retirement benefits under his 2020 SERP Agreement which will be immediately terminated.
If Mr. Miller experiences a separation from service with Park National Bank and its affiliates after age 62 but before age 65, Mr. Miller will receive, instead of his 2020 SERP Full Benefit, a “2020 SERP Early Benefit” in a lesser amount which will be based on the year in which Mr. Miller separates from service. The 2020 SERP Early Benefit will be paid in the same manner as described above with respect to a 2020 SERP Full Benefit.
If a defined “change in control” occurs before Mr. Miller experiences a separation from service with Park National Bank and its affiliates, Mr. Miller will become 100% vested and thus entitled to his 2020 SERP Full Benefit upon any subsequent separation from service, other than for cause, prior to age 65. The 2020 SERP Full Benefit will be paid in the same manner as described above with the respect to the payment of a 2020 SERP Full Benefit without the occurrence of a change in control.
If Mr. Miller experiences a separation from service with Park National Bank and its affiliates for “cause” (as defined in his 2020 SERP Agreement) or if the Board of Directors of Park National Bank determines, following Mr. Miller’s 2020 SERP Payment Commencement Date, that cause exists or existed, as appropriate, to terminate Mr. Miller, his 2020 SERP Agreement will immediately terminate, Mr. Miller will forfeit any right to receive future supplemental retirement benefits and must return all payments previously made under his 2020 SERP Agreement within 30 days after written demand by Park National Bank for such repayment. In addition, Mr. Miller will forfeit the right to receive future payments of benefits under his 2020 SERP Agreement if he violates certain non-competition, non-solicitation of customers and non-solicitation of employee covenants set forth in the 2020 SERP Agreement during a period of 12 months following his separation from service with Park National Bank and its affiliates.
Although Park National Bank is under no obligation to set aside, earmark or otherwise segregate any funds with which to pay its obligations under his 2020 SERP Agreement, and Mr. Miller is and will remain an unsecured general creditor of Park National Bank, Park National Bank has purchased life insurance policies with respect to Mr. Miller in order to fund Park National Bank’s obligations under Mr. Miller’s 2020 SERP Agreement. Park National Bank anticipates that the life insurance policies will also provide a life insurance benefit for Mr. Miller if he should die before age 82. The amount of this life insurance benefit is intended to be equal to the present value of the stream of future supplemental retirement benefits which would have been paid under his 2020 SERP Agreement to Mr. Miller but had not been paid at the time of his death. These life insurance policies are related to the maximum benefit Split-Dollar Agreements described below in the section captioned “Potential Payments upon Termination of Employment or Change in Control – Split-Dollar Agreements – Split-Dollar Agreements with Specified Maximum Death Benefit”.
Pension Benefits for 2019the 2021 Fiscal YearThe following table shows the actuarial present value of each NEO’s accumulated benefit, including the number of years of service credited to each NEO, under each of the Park Pension Plan and the respective SERP Agreement(s) as in effect during the 20192021 fiscal year, determined using interest rate and mortality rate assumptions consistent with those used in Park’s consolidated financial statements and summarized in “Note 20.19. Benefit Plans” of the Notes to Consolidated Financial Statements included under “ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of Park’s 20192021 Form 10-K.
Pension Benefits for 20192021 | | David L. Trautman | | | Park Pension Plan | | | 38 | | | $1,269,704 | | | $0 | | | | 2008 SERP Agreement | | | —(1) | | | $1,530,263 | | | $0 | | | | 2015 SERP Agreement | | | —(1) | | | $1,390,848 | | | $0 | | | | Brady T. Burt | | | Park Pension Plan | | | 14 | | | $400,719 | | | $0 | | | | 2015 SERP Agreement | | | —(1) | | | $354,126 | | | $0 | | | | Matthew R. Miller | | | Park Pension Plan | | | 12 | | | $286,387 | | | $0 | | | | 2015 SERP Agreement | | | —(1) | | | $130,797 | | | $0 | | | | 2020 SERP Agreement | | | —(1) | | | $70,420 | | | $0 | | | | C. Daniel DeLawder | | | Park Pension Plan(2) | | | —(2) | | | —(2) | | | —(2) | | | | 2008 SERP Agreement | | | —(1) | | | $1,368,561 | | | $0(3) | | | | 2015 SERP Agreement | | | —(1) | | | $579,634 | | | $0(3) | |
(1)
| | | | | | | | | | | | | | | Name | Plan Name | NumberDue to the structure of
Years Credited Service
(#) | Present Value of Accumulated
Benefit
($) | Payments
During Last
Fiscal Year
($) | David L. Trautman | Park Pension Plan
the 2008 SERP Agreement
Agreements, the 2015 SERP Agreement | 36
– (1)
– (1)
| $ 1,038,393
$ 1,184,113
$ 909,744
| $ 0
$ 0
$ 0
| Brady T. Burt | Park Pension Plan
2015Agreements and the 2020 SERP Agreement, years of credited service are not applicable. |
(2)
| 12
– (1)
| $ 291,174
$ 231,632
| $ 0
$ 0
| Matthew R. Miller | Park Pension Plan
2015 SERP Agreement | 10
– (1)
| $ 200,148
$ 85,553
| $ 0
$ 0
| C. DanielMr. DeLawder | was eligible for early retirement under the Park Pension Plan (2)beginning in October of 2004. The present value of his early retirement benefit was $1,386,082 at November 3, 2014, at which time it was paid out in full to Mr. DeLawder. |
(3)
| Mr. DeLawder retired as an executive officer of Park and Park National Bank, and as an employee of Park National Bank, on June 30, 2021. The annual supplemental retirement benefit payment under each of his 2008 SERP Agreement
and his 2015 SERP Agreement | (2)
– (1)
– (1)
| (2)
$ 1,368,561
$ 579,634
| (2)
$ 0
$ 0
commenced on March 1, 2022. |
________________________
(1) Due to the structure of the 2008 SERP Agreements and the 2015 SERP Agreements, years of credited service are not applicable.
(2) Mr. DeLawder was eligible for early retirement under the Park Pension Plan beginning in October of 2004. The present value of his early retirement benefit was $1,386,082 at November 3, 2014, at which time it was paid out in full to Mr. DeLawder.
Potential Payouts upon Termination of Employment or Change in Control The impact of the termination of an NEO’s employment and the impact of a change in control upon the PBRSUs held by an NEO that were granted during the 20192021 fiscal year are described in the footnotes to the table in the section captioned “Grants of Plan-Based Awards”. In the case of PBRSUs held by an NEO, the impact of the termination of an NEO’s employment and the impact of a change in control upon these PBRSUs are as follows: •If an NEO dies or terminates employment with Park and our subsidiaries due to disability at any time during the applicable three-fiscal-year performance period, a prorated portion of the PBRSUs will vest on
TABLE OF CONTENTS the last day of the applicable performance period based on the number of PBRSUs that would have been earned based on the actual level of performance achieved during the applicable performance period and the quotient of the number of full calendar months elapsed between the grant date and the date of death or termination of employment due to disability, as appropriate, divided by the number of months in the applicable performance period. •If an NEO dies or terminates employment with Park and our subsidiaries due to disability after the applicable performance period has ended but before the service-based vesting requirements have been satisfied, the outstanding unvested PBRSUs will immediately vest.
•If an NEO retires (i.e., has a “normal retirement” or an “early retirement” for purposes of the Park Pension Plan), at any time during the applicable three-fiscal-year performance period:
◦period, all outstanding unvested PBRSUs granted prior to December 5, 2016, will be forfeited unless the Compensation Committee, in its sole discretion, determines that all or a portion of the PBRSUs should vest; and
◦all outstanding unvested PBRSUs granted on or after December 5, 2016, will vest on a pro-rated basis on the last day of the performance period based on the number of PBRSUs that would have been earned based on the actual level of performance achieved during the applicable performance period and the quotient of the number of full calendar months elapsed between the grant date and the date of termination of employment due to retirement divided by the number of months in the performance period.
•If an NEO retires after the applicable performance period has ended but before the service-based vesting requirements have been satisfied:
◦satisfied, all outstanding unvested PBRSUs granted prior to December 5, 2016, will be forfeited unless the Compensation Committee, in its discretion, determines that all or a portion of the PBRSUs should vest; and
◦all outstanding unvested PBRSUs granted on or after December 5, 2016, will immediately vest.
•If an NEO’s employment with Park and our subsidiaries terminates for any other reason, including for “cause” (as defined in the 2013 LTIP and the 2017 Employees LTIP), all unvested PBRSUs will be immediately forfeited.
•In the event of a “change in control” (as defined in the 2013 LTIP and the 2017 Employees LTIP), ◦Each NEO will immediately vest in all outstanding PBRSUs granted prior to December 5, 2016 and still subject to service-based vesting requirements as though the service-based vesting requirements had been satisfied as of the date of the change in control; and
◦Each each NEO will immediately vest in all unvested PBRSUs granted on or after December 5, 2016 as though the cumulative ROAA of Park as compared to the cumulative ROAA results of the $3 billionBillion to $10 billionBillion Industry Index or the cumulative ROAA results of the Midwest Regional Compensation Peer Group, used as the comparator group, as applicable, had been achieved at the level of achievement (i.e., the percentile of the $3 billionBillion to $10 billionBillion Industry Index or the percentile of the Midwest Regional Compensation Peer Group, as applicable) which would have been achieved if the performance period had begun as of the first date of the performance period applicable to such PBRSUs and ended on December 31 of the fiscal year most recently completed before the change in control as long as the other performance-based criteria for vesting had been satisfied as of the date of the change in control. The service-based vesting requirement will be deemed satisfied as of the date of the change in control.
On July 6, 2021, the Executive Committee of the Park Board of Directors – acknowledging the cumulative contributions made by C. Daniel DeLawder over more than 50 years of exemplary service to Park, Park National Bank and the entire Park organization – approved the amendment of the award agreements evidencing the PBRSUs granted to Mr. DeLawder as of January 1, 2019 and January 1, 2020, respectively, to provide that notwithstanding Mr. DeLawder’s retirement as an executive officer of Park and Park National Bank, and as an employee of Park National Bank, on June 30, 2021, if the applicable performance-based criteria for vesting are met, the PBRSUs granted to Mr. DeLawder will vest on the applicable performance date in the full number (rather than a pro-rated portion) of the PBRSUs granted to Mr. DeLawder that would have been earned on such performance date based on the actual level of achievement for the applicable performance period. In addition, as a result of Mr. DeLawder’s retirement, as of June 30, 2021, the five-year holding requirement for common shares received upon settlement of earned and vested PBRSUs ceased to apply to the PBRSUs granted to Mr. DeLawder. Supplemental Executive Retirement Benefits The provisions of the SERP Agreements addressing the impact of the termination of the employment of the individual covered thereby and the impact of a change in control are described under the headings “Post-Employment Payments and Benefits – Pension and Supplemental Benefits – Supplemental Executive Retirement Benefits – 2008 Agreements,David L. Trautman, Brady T. Burt and Matthew R. Miller”“– Supplemental Executive Retirement Benefits –2015 Agreements” and “– Supplemental Executive Retirement Benefits – 2020 AgreementC. Daniel DeLawder.”. TABLE OF CONTENTS Split-Dollar Agreements with Specified Maximum Death Benefit On June 15, 2015, Park National Bank entered into Amended and Restated Split-Dollar Agreements (each, a “Maximum Benefit Split-Dollar Agreements”) with each of David L. Trautman and C. Daniel DeLawder, which superseded their respective prior maximum benefit split-dollar agreements. In addition, on June 15, 2015, Park National Bank entered into a Maximum Benefit Split-Dollar Agreement with each of Brady T. Burt and Matthew R. Miller. Mr. Miller’s June 15, 2015 Maximum Benefit Split-Dollar Agreement was subsequently amended and restated on January 27, 2020 to modify the amount of the Death Benefit. The life insurance policies covered by the Maximum Benefit Split-Dollar Agreements fund the SERP Agreements to which Messrs. Trautman, Burt, Miller and DeLawder are parties. Under the terms of each Maximum Benefit Split-Dollar Agreement, Park National Bank (and, in the case of Mr. DeLawder, Park National Bank and Park) owns the life insurance policies to which the Maximum Benefit Split-Dollar Agreement relates and controls all rights of ownership with respect to such life insurance policies. Each NEO has the right to designate one or more beneficiaries to whom a portion of the death proceeds payable under the life insurance policies covering him is to be paid in accordance with the Maximum Benefit Split-Dollar Agreement. Upon each NEO’s death, his beneficiary(ies) will be entitled to an amount equal to the lesser of (i) the “Death Benefit” described in the Maximum Benefit Split-Dollar Agreement or (ii) 100% of the difference between the total death proceeds payable under the related life insurance policies and the cash surrender value of such life insurance policies at the time of the NEO’s death (such difference being referred to as the “Net at Risk Amount”), but in no event will the amount payable to an NEO’s beneficiary(ies) exceed the Net at Risk Amount under the related life insurance policies. The Death Benefit under Mr. Trautman’s Maximum Benefit Split-Dollar Agreement will be $4,313,000 if: (i) Mr. Trautman dies while a full-time employee of Park National Bank; (ii) Mr. Trautman experiences a separation from service with Park National Bank and its affiliates within 12 months after a defined “change in control” even if that separation of service occurs before Mr. Trautman attains age 62; or (iii) Mr. Trautman dies after he has retired following the attainment of age 62 and prior to attaining age 66. If Mr. Trautman dies after retiring and attaining age 66, the Death Benefit will be reduced each year and will be $0 if Mr. Trautman dies on or after attaining age 84. The Death Benefit under Mr. Burt’s Maximum Benefit Split-Dollar Agreement will be $2,353,000 if: (i) Mr. Burt dies while a full-time employee of Park National Bank; (ii) Mr. Burt experiences a separation from service with Park National Bank and its affiliates within 12 months after a defined “change in control” even if that separation of service occurs before Mr. Burt attains age 62; or (iii) Mr. Burt dies after he has retired following the attainment of age 62 and prior to attaining age 66. If Mr. Burt dies after retiring and attaining age 66, the Death Benefit will be reduced each year and will be $0 if Mr. Burt dies on or after attaining age 82.
The Death Benefit under Mr. Miller’s June 15, 2015 Maximum Benefit Split-Dollar Agreement was to be $1,427,000 and under his January 27, 2020 Maximum Benefit Split-Dollar Agreement will be $3,653,000: (i) Mr. Miller dies while a full-time employee of Park National Bank; (ii) Mr. Miller experiences a separation from service with Park National Bank and its affiliates within 12 months after a defined “change in control” even if that separation of service occurs before Mr. Miller attains age 62; or (iii) Mr. Miller dies after he has retired following the attainment of age of 62 and prior to attaining age 66. If Mr. Miller dies after retiring and attaining age 66, the Death Benefit will be reduced each year and will be $0 if Mr. Miller dies on or after attaining age 82. TheAs of December 31, 2021, the Death Benefit under Mr. DeLawder’s Maximum Benefit Split-Dollar Agreement will be $3,292,098 if Mr. DeLawder dies while a full‑time employee of Park National Bank. If Mr. DeLawder dies after retiring, thewas $3,059,477. The Death Benefit will be reduced each year and will be $0 if Mr. DeLawder dies on or after attaining age 84.
In each case, payment of the Death Benefit after the NEO’s termination of employment with Park National Bank and its affiliates will be subject to the following conditions: •after the NEO’s termination of employment with Park National Bank and its affiliates, the NEO has not been employed by another financial services firm unless the NEO has terminated employment within 12 months after a change in control; and
•the NEO’s termination of employment from Park National Bank has not been for cause as determined by the Board of Directors of Park National Bank.
TABLE OF CONTENTS Park National Bank (and, in the case of Mr. DeLawder, Park National Bank and Park) will be entitled to any death proceeds payable under the life insurance policies related to the Maximum Benefit Split-Dollar Agreements remaining after payment to each NEO’s beneficiary(ies). Park National Bank and an NEO’s beneficiary(ies) will share in any interest due on the death proceeds of the life insurance policies on a pro rata basis based on the amount of proceeds due each person divided by the total amount of proceeds, excluding any such interest. Compensation-Based Split-Dollar Agreements Park National Bank maintains life insurance policies on behalf of David L. Trautman, in his capacity as an executive officer of Park National Bank, and C. Daniel DeLawder, in their respective capacitieshis capacity as a retired executive officersofficer of Park National Bank, pursuant to Amended and Restated Split-Dollar Agreements entered into on June 15, 2015 (each, a “Compensation-Based Split-Dollar Agreement”), which superseded their respective prior compensation-based split-dollar agreements. Each of Messrs. Trautman and DeLawder has the right to designate the beneficiary(ies) to whom his share of the death proceeds payable under the life insurance policies is to be paid. Such share will be approximately two times his highest annual total compensation (defined as the sum of the annual base salary and the annual cash bonus/incentive compensation paid) during any calendar year of his employment with Park National Bank. The death proceeds paid to each covered individual’s beneficiary(ies) may not, however, exceed 100% of the difference between the total death proceeds payable under the related life insurance policies and the cash accumulation account of such life insurance policies as of the date of the covered individual’s death. Park National Bank will be entitled to the remainder of the death proceeds. Each of Mr. Trautman’s and Mr. DeLawder’s Compensation-Based Split-Dollar Agreement remainsis to remain in effect following the covered individual’s retirement as long as the covered individual: (i) is fully vested in the Park Pension Plan; (ii) has reached age 62 (unless permanently disabled as determined under Park’s disability insurance plan); (iii) has not been employed by another financial services firm; and (iv) was not terminated for cause. Mr. DeLawder’s Compensation-Based Split-Dollar Agreement remained in effect following his retirement as each of the conditions described in the previous sentence was satisfied. If Mr. Trautman’s share of the proceeds under the life insurance policies subject to his Compensation-Based Split-Dollar Agreement
were computed as of December 31, 2019,2021, his share would have been $2,329,308.$2,205,961. If Mr. DeLawder’s share of the proceeds under the life insurance policies subject to his Compensation-Based Split-Dollar Agreement were computed as of December 31, 2019,2021, his share would have been $2,041,228. On June 15, 2015 and August 5, 2015, respectively, each of Brady T. Burt and Matthew R. Miller entered into a Compensation-Based Split-Dollar Agreement with Park National Bank, which superseded his prior compensation-based split-dollar agreements. Each of Messrs. Burt and Miler has the right to designate the beneficiary(ies) to whom his share of the death proceeds payable under the life insurance policy(ies) is to be paid. Such share will be approximately two times his highest total compensation (defined as the sum of the annual base salary and the annual cash bonus/incentive compensation paid) during the last ten calendar years of his employment with Park National Bank. The death proceeds paid to each covered individual’s beneficiary(ies) may not, however, exceed 100% of the difference between the total death proceeds payable under the related life insurance policy(ies) and the cash surrender value of such life insurance policy(ies) as of the date of the covered individual’s death. Park National Bank will be entitled to the balance of the total death proceeds payable. Each of Mr. Burt’s and Mr. Miller’s Compensation-Based Split-Dollar Agreement remains in effect following his retirement as long as: (i) except in the case of a separation from service with Park National Bank and its affiliates within 12 months after a defined change in control, he has not been employed by another financial services firmfirm; and (ii) he was not terminated for cause. If Mr. Burt’s share of the proceeds under the life insurance policy related to his Compensation-Based Split-Dollar Agreement were computed as of December 31, 2019,2021, his share would have been $1,155,584.$1,163,437. If Mr. Miller’s share of the proceeds under the life insurance policypolicies related to his Compensation-Based Split-Dollar Agreement were computed as of December 31, 2019,2021, his share would have been $885,685. On January 27, 2020, a second life insurance policy was added to Mr. Miller’s Compensation-Based Split-Dollar Agreement.$1,483,533. Regardless of the manner in which an NEO’s employment terminates, he is entitled to receive amounts earned during his term of employment. Such amounts would include: •the balance of the NEO’s account under the Park KSOP;
•unused vacation pay; and
•to the extent not previously paid, amounts accrued and vested under the Park Pension Plan which will be paid in accordance with the terms of the Park Pension Plan, as discussed in more detail in the section
TABLE OF CONTENTS captioned “Post-Employment Payments and Benefits – Pension and Supplemental Benefits – Park Pension Plan”. If an NEO retires after reaching age 55, the NEO will be entitled to receive a lump-sum payment of the present value of the benefit to which he would have been entitled under the Park Pension Plan (to the extent not previously paid). In the event of the disability of an NEO, in addition to the benefits identified in the preceding paragraph, the NEO will receive benefits under Park’s disability insurance plan. The following table summarizes the payments which would have been made and the benefits which would have been provided to Messrs.Mr. Trautman, Mr. Burt, Miller and DeLawderMr. Miller if a retirement or other termination event had occurred on December 31, 2019.2021. Actual amounts to be paid out can only be determined at the time of an NEO’s actual separation from service with Park and our subsidiaries. | | David L. Trautman | | | | | | | | | | | | | | | | | | | | | | | | | Value of PBRSUs(1) | | | $— | | | $1,337,961 | | | $— | | | $— | | | $— | | | $1,337,961 | | | $1,337,961 | | | | Park KSOP | | | $2,295,789 | | | $2,295,789 | | | $2,295,789 | | | $2,295,789 | | | $2,295,789 | | | $2,295,789 | | | $2,295,789 | | | | Park Pension Plan(2) | | | $1,269,704 | | | $1,269,704 | | | $1,269,704 | | | $1,269,704 | | | $1,269,704 | | | $1,269,704 | | | $1,269,704 | | | | 2008 SERP Agreement(3) | | | $—(4) | | | $—(4) | | | $—(4) | | | $—(4) | | | $— | | | $—(4) | | | $— | | | | 2015 SERP Agreement(3) | | | $—(4) | | | $—(4) | | | $—(4) | | | $—(4) | | | $— | | | $—(4) | | | $— | | | | Maximum Benefit Split-Dollar Agreement | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $4,313,000 | | | | Compensation-Based Split-Dollar Agreement | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $2,205,961 | | | | Total | | | $3,565,493 | | | $4,903,454 | | | $3,565,493 | | | $3,565,493 | | | $3,565,493 | | | $4,903,454 | | | $11,422,415 | | | | Brady T. Burt | | | | | | | | | | | | | | | | | | | | | | | | | Value of PBRSUs(1) | | | $— | | | $—(5) | | | $— | | | $— | | | $— | | | $898,252 | | | $898,252 | | | | Park KSOP | | | $1,122,543 | | | $(5) | | | $1,122,543 | | | $1,122,543 | | | $1,122,543 | | | $1,122,543 | | | $1,122,543 | | | | Park Pension Plan (2) | | | $400,719 | | | $(5) | | | $400,719 | | | $400,719 | | | $400,719 | | | $400,719 | | | $400,719 | | | | 2015 SERP Agreement(3) | | | $—(4) | | | $—(4) | | | $—(4) | | | $—(4) | | | $— | | | $—(4) | | | $— | | | | Maximum Benefit Split-Dollar Agreement | | | $— | | | $—(5) | | | $— | | | — | | | $— | | | $— | | | $2,353,000 | | | | Compensation-Based Split-Dollar Agreement | | | $— | | | $—(5) | | | $— | | | $— | | | $— | | | $— | | | $1,163,437 | | | | Total | | | $1,523,262 | | | $(5) | | | $1,523,262 | | | $1,523,262 | | | $1,523,262 | | | $2,421,514 | | | $5,937,951 | | | | Matthew R. Miller | | | | | | | | | | | | | | | | | | | | | | | | | Value of PBRSUs(1) | | | $— | | | $— (5) | | | $— | | | $— | | | $— | | | $837.826 | | | $837,826 | | | | Park KSOP | | | $552,794 | | | $(5) | | | $552,794 | | | $552,794 | | | $552,794 | | | $552,794 | | | $552,794 | | | | Park Pension Plan(2) | | | $286,387 | | | $(5) | | | $286,387 | | | $286,387 | | | $286,387 | | | $286,387 | | | $286,387 | | | | 2015 SERP Agreement(3) | | | $—(4) | | | $—(4) | | | $—(4) | | | $—(4) | | | $— | | | $—(4) | | | $— | | | | 2020 SERP Agreement(3) | | | $—(4) | | | $—(4) | | | $—(4) | | | $—(4) | | | $— | | | $—(4) | | | $— | | | | Maximum Benefit Split-Dollar Agreement | | | $— | | | $—(5) | | | $— | | | $— | | | $— | | | $— | | | $3,653,000 | | | | Compensation-Based Split-Dollar Agreement | | | $— | | | $—(5) | | | $— | | | $— | | | $— | | | $— | | | $1,483,533 | | | | Total | | | $839,181 | | | $(5) | | | $839,181 | | | $839,181 | | | $839,181 | | | $1,677,007 | | | $6,813,540 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voluntary Termination
on
12/31/19 | | Early
Retirement
on
12/31/19 | | Normal Retirement
on
12/31/19 | | Involuntary Not for Cause Termination
on
12/31/19 | | For Cause Termination
on
12/31/19 | | Disability
on
12/31/19 | | Death
on
12/31/19 | | | David L. Trautman | | | | | | | | | | | | | | | Value of PBRSUs(1) | $ – | | $ 695,713 | | $ – | | $ – | | $ – | | $ 898,476 | | $ 898,476 | | | Park KSOP | $ 1,516,970 | | $ 1,516,970 | | $ 1,516,970 | | $ 1,516,970 | | $ 1,516,970 | | $ 1,516,970 | | $ 1,516,970 | | Park Pension Plan(2) | $ 1,038,393 | | $ 1,038,393 | | $ 1,038,393 | | $ 1,038,393 | | $ 1,038,393 | | $ 1,038,393 | | $ 1,038,393 | | 2008 SERP Agreement(3) | $ –(5) | | $ –(5) | | $ –(5) | | $ –(5) | | $ – | | $ –(5) | | $ – | | 2015 SERP Agreement(3) | $ –(5) | | $ –(5) | | $ –(5) | | $ –(5) | | $ – | | $ –(5) | | $ – | | | Maximum Benefit Split-Dollar Agreement | $ – | | $ – | | $ – | | $ – | | $ – | | $ – | | $ 4,313,000 | | | Compensation-Based Split-Dollar Agreement | $ – | | $ – | | $ – | | $ – | | $ – | | $ – | | $ 2,329,308 | | | Total | $ 2,555,363 | | $ 3,251,076 | | $ 2,555,363 | | $ 2,555,363 | | $ 2,555,363 | | $ 3,453,839 | | $ 10,096,147 | | | Brady T. Burt | | | | | | | | | | | | | | | Value of PBRSUs(1) | $ – | | $ –(6) | | $ – | | $ – | | $ – | | $ 624,189 | | $ 624,189 | | | Park KSOP | $ 717,498 | | $ (6) | | $ 717,498 | | $ 717,498 | | $ 717,498 | | $ 717,498 | | $ 717,498 | | Park Pension Plan (2) | $ 291,174 | | $ (6) | | $ 291,174 | | $ 291,174 | | $ 291,174 | | $ 291,174 | | $ 291,174 | | 2015 SERP Agreement(3) | $ –(5) | | $ –(5) | | $ –(5) | | $ –(5) | | $ – | | $ –(5) | | $ – | | | Maximum Benefit Split-Dollar Agreement | $ – | | $ (6) | | $ – | | $ – | | $ – | | $ – | | $ 2,353,000 | | | Compensation-Based Split-Dollar Agreement | $ – | | $ (6) | | $ – | | $ – | | $ – | | $ – | | $ 1,155,584 | | | Total | $ 1,008,672 | | $ (6) | | $ 1,008,672 | | $ 1,008,672 | | $ 1,008,672 | | $ 1,632,861 | | $ 5,141,445 | | | Matthew R. Miller | | | | | | | | | | | | | | | Value of PBRSUs(1) | $ – | | $ –(6) | | $ – | | $ – | | $ – | | $ 492,472 | | $ 492,472 | | | Park KSOP | $ 319,886 | | $ (6) | | $ 319,886 | | $ 319,886 | | $ 319,886 | | $ 319,886 | | $ 319,886 | | Park Pension Plan(2) | $ 200,148 | | $ (6) | | $ 200,148 | | $ 200,148 | | $ 200,148 | | $ 200,148 | | $ 200,148 | | 2015 SERP Agreement(3) | $ –(5) | | $ –(5) | | $ –(5) | | $ –(5) | | $ – | | $ –(5) | | $ – | | | Maximum Benefit Split-Dollar Agreement | $ – | | $ (6) | | $ – | | $ – | | $ – | | $ – | | $ 1,427,000 | | | Compensation-Based Split-Dollar Agreement | $ – | | $ (6) | | $ – | | $ – | | $ – | | $ – | | $ 885,685 | | | Total | $ 520,034 | | $ (6) | | $ 520,034 | | $ 520,034 | | $ 520,034 | | $ 1,012,506 | | $ 3,325,191 | | | C. Daniel DeLawder | | | | | | | | | | | | | | | Value of PBRSUs(1) | N/A | | N/A | | $ 549,826 | | $ – | | $ – | | $ 712,036 | | $ 712,036 | | | Park KSOP | N/A | | N/A | | $ 2,577,632 | | $ 2,577,632 | | $ 2,577,632 | | $ 2,577,632 | | $ 2,577,632 | | Park Pension Plan(4) | N/A (4) | | N/A (4) | | N/A (4) | | N/A (4) | | N/A (4) | | N/A (4) | | N/A (4) | | 2008 SERP Agreement(3) | N/A (7) | | N/A (7) | | $1,368,561(7) | | $1,368,561(7) | | $ – | | $1,368,561(7) | | $ – | | 2015 SERP Agreement(3) | N/A (8) | | N/A (8) | | $ 579,634(8) | | $ 579,634(8) | | $ – | | $ 579,634(8) | | $ – | | | Maximum Benefit Split-Dollar Agreement | N/A | | N/A | | $ – | | $ – | | $ – | | $ – | | $ 3,292,098 | | | Compensation-Based Split-Dollar Agreement | N/A | | N/A | | $ – | | $ – | | $ – | | $ – | | $ 2,041,228 | | | Total | N/A | | N/A | | $ 5,075,653 | | $ 4,525,827 | | $ 2,577,632 | | $ 5,237,863 | | $ 8,622,944 | |
________________________
(1) (1)
| The amount shown reflects the aggregate value of PBRSUs which would vest in the case of early retirement, normal retirement, disability or death. |
(2)
| The amount shown reflects the estimated lump-sum present value of the benefits to which the NEO would be entitled under the Park Pension Plan. |
TABLE OF CONTENTS (3)
| In each case, the amount shown reflects the present value of the accumulated benefit that would be paid to the NEO under his 2008 SERP Agreement, his 2015 SERP Agreement or his 2020 SERP Agreement, as appropriate. |
(4)
| If a change in control were to have occurred before an NEO’s termination of employment, he would be entitled to receive his 2015 SERP Full Benefit, the present value of which was $2,455,675 for Mr. Trautman, $1,189,450 for Mr. Burt and $549,810 for Mr. Miller, in each case as of December 31, 2021. In addition, Mr. Trautman would be entitled to receive his 2008 SERP Full Benefit, the present value of which was $1,625,080 as of December 31, 2021 and Mr. Miller would be entitled to receive his 2020 SERP Full Benefit, the present value of which was $857,410 as of December 31, 2021. |
(5)
| Since, as of December 31, 2021, neither Mr. Burt nor Mr. Miller had reached age 55, they were not eligible for early retirement. However, if Mr. Burt or Mr. Miller had retired on December 31, 2021, he would have been eligible to receive the same payments as those identified in the column captioned “Voluntary Termination on 12/31/2021.” |
The following table summarizes the payments made and the benefits provided to Mr. DeLawder as a result of his retirement as an executive officer of Park and Park National Bank and an employee of Park National Bank, on June 30, 2021: | | C. Daniel DeLawder
| | | | | | | Value of PBRSUs | | | N/A(1) | | | | Park KSOP | | | $3,243,173 | | | | Park Pension Plan(2) | | | N/A(2) | | | | 2008 SERP Agreement | | | $1,368,561(3) | | | | 2015 SERP Agreement | | | $579,634(4) | | | | Maximum Benefit Split-Dollar Agreement | | | N/A(5) | | | | Compensation-Based Split-Dollar Agreement | | | N/A(6) | | | | Total | | | $5,191,368 | |
(1)
| On July 6, 2021, the award agreements evidencing the PBRSUs granted to Mr. DeLawder as of January 1, 2019 and January 1, 2020, respectively, were amended to provide that notwithstanding Mr. DeLawder’s retirement as an executive officer of Park and Park National Bank, and as an employee of Park National Bank, on June 30, 2021, if the applicable performance-based criteria for vesting are met, the PBRSUs granted to Mr. DeLawder will vest on the applicable performance date in the full number (rather than a pro-rated portion) of the PBRSUs granted to Mr. DeLawder that would have been earned on such performance date based on the actual level of achievement for the applicable performance period. In addition, as a result of Mr. DeLawder’s retirement, as of June 30, 2021, the five-year holding requirement for common shares received upon settlement of earned and vested PBRSUs ceased to apply to the PBRSUs granted to Mr. DeLawder. |
(2)
| Mr. DeLawder was eligible for early retirement under the Park Pension Plan beginning in October of 2004. The present value of his early retirement benefit was $1,386,082 at November 3, 2014, at which time it was paid out in full to Mr. DeLawder. As a result, this amount is not shown in the table. |
(3)
| At age 62, Mr. DeLawder became vested with respect to his 2008 SERP Full Benefit of $127,900. The present value of such 2008 SERP Full Benefit was $1,368,561 as of each of June 30, 2021 and December 31, 2021. |
(4)
| At age 69, Mr. DeLawder became vested with respect to his 2015 SERP Full Benefit of $56,700. The present value of such 2015 SERP Full Benefit was $579,634 as of each of June 30, 2021 and December 31, 2021. |
(5)
| The Death Benefit under Mr. DeLawder’s Maximum Benefit Split-Dollar Agreement was $3,059,477 as of each of June 30, 2021 and December 31, 2021. |
(6)
| Mr. DeLawder’s share of the proceeds under the life insurance policies subject to his Compensation-Based Split-Dollar Agreement would have been $2,041,228 if computed as of each of June 30, 2021 and December 31, 2021. |
Vesting of PBRSUs granted (i) prior to the 2017 fiscal year (which would vestupon Change in the case of disability or death) and (ii) during and after the 2017 fiscal year (which would vest in the case of early retirement, normal retirement, disability or death).Control (2) The amount shown reflects the estimated lump-sum present value of the benefits to which the NEO would be entitled under the Park Pension Plan.
(3) In each case, the amount shown reflects the present value of the accumulated benefit that would be paid to the NEO under his 2008 SERP Agreement or his 2015 SERP Agreement, as appropriate. Since Mr. Miller’s 2020 SERP Agreement became effective after December 31, 2019, the benefits payable thereunder are not reflected in this table.
(4) Mr. DeLawder was eligible for early retirement under the Park Pension Plan beginning in October of 2004. The present value of his early retirement benefit was $1,386,082 at November 3, 2014, at which time it was paid out in full to Mr. DeLawder. As a result, this amount is not shown in the table.
(5) If a change in control were to have occurred before an NEO’s termination of employment, he would be entitled to receive his 2015 SERP Full Benefit, the present value of which was $2,248,750 for Mr. Trautman, $1,089,250 for Mr. Burt and $481,800 for Mr. Miller, in each case as of December 31, 2019. In addition, Mr. Trautman would be entitled to receive his 2008 SERP Full Benefit, the present value of which was $1,488,150 as of December 31, 2019.
(6) Since, as of December 31, 2019, neither Mr. Burt nor Mr. Miller had reached age 55, they were not eligible for early retirement. However, if Mr. Burt or Mr. Miller had retired on December 31, 2019, he would have been eligible to receive the same payments as those identified in the column captioned “Voluntary Termination on 12/31/2019.”
(7) At age 62, Mr. DeLawder became vested with respect to his 2008 SERP Full Benefit of $127,900. The present value of such 2008 SERP Full Benefit was $1,368,561 as of December 31, 2019.
(8) At age 69, Mr. DeLawder became vested with respect to his 2015 SERP Full Benefit of $56,700. The present value of such 2015 SERP Full Benefit was $579,634 as of December 31, 2019.
If a change in control had occurred as of December 31, 2019: (i) 2021: each NEO’s outstanding PRBSUs granted during the 2021 fiscal year would have vested as though the cumulative ROAA of Park as compared to the cumulative ROAA results of the $3 Billion to $10 Billion Industry Index had been achieved at the level of achievement (i.e., the percentile of the $3 Billion to $10 Billon Industry Index) which would have been achieved if the performance period had begun on January 1, 2021 and ended on December 31, 2021; each NEO’s outstanding PBRSUs granted during the 2020 fiscal year would have vested as though the cumulative ROAA of Park as compared to the cumulative ROAA results of the $3 Billion to $10 Billion Industry Index had been achieved at the level of achievement (i.e., the percentile of the $3 Billion to $10 Billion Industry Index) which would have been achieved if the performance period had begun on January 1, 2020 and ended on December 31, 2021; TABLE OF CONTENTS each NEO’s outstanding PBRSUs granted during the 2019 fiscal year would have vested as though the cumulative ROAA of Park as compared to the cumulative ROAA results of the Midwest Regional Compensation Peer Group used as the comparatorcomparison group had been achieved at the level of achievement (i.e., the percentile of the Midwest Regional Compensation Peer Group) which would have been achieved if the performance period had begun on January 1, 2019 and ended on December 31, 2019; (ii) 2021; each NEO’s outstanding PBRSUs granted during each of the 2017 fiscal year and the 2018 fiscal year would have vested as though the cumulative ROAA of Park as compared to the cumulative ROAA results of the $3 billionBillion to $10 billionBillion Industry Index had been achieved at the level of achievement (i.e., the percentile of the $3 billionBillion to $10 billionBillion Industry Index) which would have been achieved if the performance period had begun on the applicable grant date (i.e., January 1, 2017 or January 1, 2018)2018 and ended on December 31, 2019;2021; and (iii) each NEO’s outstanding PBRSUs granted prior to the 20172018 fiscal year and still subject to a service-based vesting requirement as of December 31, 2019,2021, would have vested. The following table shows the aggregate number of PBRSUs which would have vested for each NEO and the market value of the PBRSUs which would have vested, based on the $102.38$137.31 closing price of the Park common shares as of December 31, 20192021 (the last trading day of the 20192021 fiscal year). | | David L. Trautman | | | 13,143 | | | $1,804,711 | | | | Brady T. Burt | | | 8,803 | | | $1,208,725 | | | | Matthew R. Miller | | | 8,759 | | | $1,202,698 | | | | C. Daniel DeLawder | | | 5,745 | | | $788,846 | |
| | | | | | | | |
| Aggregate Number
of PBRSUs Which
Would Have Vested | Aggregate Market Value
of PBRSUs Which
Would Have Vested | | David L. Trautman | 11,368 | $ 1,163,882 | | Brady T. Burt | 7,827 | $ 801,288 | | Matthew R. Miller | 6,196 | $ 634,368 | | C. Daniel DeLawder | 8,903 | $ 911,482 |
TABLE OF CONTENTS
EQUITY COMPENSATION PLAN INFORMATION As of December 31, 2019,2021, Park had three compensation plans under which common shares of Park are authorized for issuance to directors, officers or employees of Park and of our subsidiaries in exchange for consideration in the form of goods or services – the 2013 LTIP, the 2017 Employees LTIP and the 2017 Long-Term Incentive Plan for Non-Employee Directors (the “2017 Non-Employee Directors LTIP”).LTIP. Since April 24, 2017, Park has only granted awards under the 2017 Employees LTIP and the 2017 Non-Employee Directors LTIP. In addition, Park maintains the Park KSOP, which is intended to meet the qualification requirements of Section 401(a) of the Internal Revenue Code. Each of the 2013 LTIP, the 2017 Employees LTIP and the 2017 Non-Employee Directors LTIP was approved by the Park shareholders. The following table shows the number of common shares issuable upon the vesting of outstanding PBRSUs and the aggregate number of common shares remaining available for awards under the 2017 Employees LTIP and the 2017 Non-Employee Directors LTIP, in each case at December 31, 2019.2020. No further awards can be made under the 2013 LTIP. | | Equity compensation plans approved by shareholders | | | 211,819 | | | — | | | 536,850 | | | | Equity compensation plans not approved by shareholders | | | — | | | — | | | — | | | | Total | | | 211,819 | | | — | | | 536,850 | |
| | | | | | | | | | | | Plan category | (a) Number of common shares to be issued upon exercise of outstanding options, warrants and rights (1) | (b) Weighted-average exercise price of outstanding options, warrants and rights (2) | (c) Number of common shares remaining available for future issuance under equity compensation plans (excluding common shares reflected in column (a) | | Equity compensation plans approved by shareholders | 194,722 | – | 729,783 | | Equity compensation plans not approved by shareholders | – | – | – | | Total | 194,722 | – | 729,783 |
________________________
(1)
| Includes (i) an aggregate of 27,237 common shares underlying both PBRSUs and RSUs granted under the 2017 Employees LTIP during the 2018 fiscal year – 5,962 of which were RSUs and not subject to performance conditions; (ii) an aggregate of 63,240 common shares underlying both PBRSUs and RSUs granted under the 2017 Employees LTIP during the 2019 fiscal year – 6,350 of which were RSUs and not subject to performance conditions; (iii) 60,390 common shares underlying PBRSUs granted under the 2017 Employees LTIP during the 2020 fiscal year; and (iv) 60,952 common shares underlying PBRSUs granted under the 2017 Employees LTIP during the 2021 fiscal year. The target number (which is also the threshold number) of PBRSUs and RSUs that could be earned with respect to outstanding awards granted under the 2017 Employees LTIP during the 2019 fiscal year, the 2020 fiscal year and the 2021 fiscal year is 42,162, 40,262, and 40,637, respectively. |
(2)
| Weighted-average exercise price does not apply to the outstanding PBRSUs since they require no cash contribution upon the vesting of the PBRSUs and the subsequent issuance of Park common shares. |
(1) Includes: (i) an aggregate of 17,942 common shares underlying PBRSUs granted on January 1, 2016 under the 2013 LTIP that were earned based on the performance level achieved and are also subject to service-based vesting pursuant to which they are to vest on March 29, 2020, (ii) an aggregate of 42,863 common shares underlying PBRSUs granted under the 2013 LTIP during the 2017 fiscal year, and (iii) an aggregate of 59,852 and 74,065 common shares underlying PBRSUs granted under the 2017 Employees LTIP during the 2018 fiscal year and the 2019 fiscal year, respectively, assuming in each case that the maximum number of PBRSUs is earned with respect to outstanding awards. The target number (which is also the threshold number) of PBRSUs that could be earned with respect to outstanding awards granted under the 2013 LTIP during the 2017 fiscal year is 28,575. The target number (which is also the threshold number) of PBRSUs that could be earned with respect to outstanding awards granted under the 2017 Employees LTIP during the 2018 fiscal year and the 2019 fiscal year is 39,902 and 49,377, respectively.
TABLE OF CONTENTS (2) Weighted-average exercise price does not apply to the outstanding PBRSUs since they require no cash contribution upon the vesting of the PBRSUs and the subsequent issuance of Park common shares.
Park uses a combination of cash and stock-based compensation to attract and retain qualified candidates to serve on the Park Board of Directors. To align the interests of the Park directors and the Park shareholders, our Regulations require that all directors of Park be shareholders. Park does not have a requirement which addresses the number of common shares that need to be retained by directors. Annual Retainers and Meeting Fees Annual Retainers Payable in Common Shares Each Park director who is not an employee of Park or of one of our subsidiaries (a “non-employee director”) receives, on the date of the regular meeting of the Park Board of Directors held during the fourth quarter of each fiscal quarter,year, an annual retainer in the form of common shares awarded under the 2017 Non-Employee Directors LTIP. The number of common shares awarded as the annual retainer for the 20192021 fiscal year was 300 common shares. These common shares were delivered on October 28, 2019,25, 2021, the date of the regular meeting of the Park Board of Directors held during the fourth quarter of the 20192021 fiscal year. The number of common shares to be awarded with respect toas the 2020annual retainer for the 2022 fiscal year will be based on the samegrant date fair value of Park common shares, as that awardeddiscussed below in the section captioned “Changes in Director Compensation for the 20192022 Fiscal Year — Annual Retainers Payable in Common Shares.” During the 2021 fiscal year. Eachyear, each non-employee director of Park also servesserved on either the boardBoard of directorsDirectors of Park National Bank or the advisory board of directors of one of the divisions of Park National Bank, and receives,received, on the date of the regular meeting of the Park Board of Directors held during the fourth fiscal quarter, an annual retainer in the form of: (i) 150 common shares for members of the boardBoard of directorsDirectors of Park National Bank; and (ii) 100 common shares for members of the advisory board of directors of a division of Park National Bank. These common shares were also delivered on October 28, 2019.25, 2021. Since January 1, 2022, each of the non-employee directors of Park has also served as a member of the Board of Directors of Park National Bank. The number of common shares to be awarded with respect toas the 2020annual retainer for the 2022 fiscal year will be based on the samegrant date fair value of Park common shares, as that awardeddiscussed below in the section captioned “Changes in Director Compensation for the 2019 fiscal year.
2022 Fiscal Year
— Annual Retainers Payable in Common Shares.”
The following table sets forth the cash compensation paid by Park to Park’seach individual who served as a non-employee director of Park during the 2021 fiscal year. The cash compensation to be paid by Park to individuals serving as non-employee directors of Park during the 2022 fiscal year is discussed below in the section captioned “Changes in Director Compensation for the 2019 fiscal year. Park’s non-employee directors will receive the same cash compensation for the 2020 fiscal year.2022 Fiscal Year — Cash Compensation.” Meeting Fees:
| | | | | | | | | Meeting Fees: | |
| Each meeting of Board of Directors attended(1) | | | $1,200 | Each meeting of Audit Committee attended | | | $900 | Each meeting of Executive Committee attended | | | $900 | Each meeting of Audit Committee attended | | $ 900 | Each meeting of each other Board Committee attended | | $ 750 | Annual Retainers (2): | | $
750 | Annual Retainers(2):
| | | | Annual Retainer for Committee Chairs:
| | | | Audit Committee | | | $10,000 | Compensation Committee | | | $
7,000 |
Nominating Committee
| Audit Committee | | $ 10,0007,000 |
Risk Committee
| Nominating Committee | | $7,000 |
| Compensation Committee | $ 7,000 |
| Risk Committee | $ 7,000 | Annual Retainer for Other Committee Members:
| | | | Audit Committee | | | $
5,000 |
Compensation Committee
| Executive Committee | | $ 5,0003,500 |
Executive Committee
| Audit Committee | | $5,000 |
Nominating Committee
| Risk Committee | | $3,500 |
Risk Committee
| Compensation Committee | | $3,500 |
| Investment Committee | $ 3,500 |
| Nominating Committee | $ 3,500 | | Lead Director Additional Annual Retainer | | | $15,000 |
_______________________
TABLE OF CONTENTS (1)
| If the date of a meeting of the full Park Board of Directors was changed from that provided for by resolution of the Park Board of Directors and a Park non-employee director was not able to attend the rescheduled meeting, he or she received the meeting fee as though he or she attended the meeting. |
(2)
| The annual retainers were paid on or about the date of the 2021 Annual Meeting. Only those individuals who continued to serve as non-employee directors immediately following the 2021 Annual Meeting received the annual retainers applicable to the positions they held. |
During the date of a meeting of the full Park Board of Directors is changed from that provided for by resolution of the Park Board of Directors and a Park non-employee director is not able to attend the rescheduled meeting, he or she receives the meeting fee as though he or she attended the meeting. (2) The annual retainers are paid on the date of the annual meeting of the Park shareholders held during the2021 fiscal year. Only those individuals continuing to serve as non-employee directors immediately following the annual meeting of the Park shareholders receive the annual retainers applicable to the positions they hold.
Eachyear, each non-employee director of Park also servesserved either on the boardBoard of directorsDirectors of Park National Bank or on the advisory board of directors of one of the divisions of Park National Bank and, in some cases, receivesreceived a specified amount of cash for such service as well as fees for attendance at meetings of the boardBoard of directorsDirectors of Park National Bank or of the advisory board of directors of the applicable division of Park National Bank (and committees of the respective boards).
In addition to the annual retainers and meeting fees discussed above, non-employee directors also receivereceived reimbursement of all reasonable travel and other expenses of attending board and committee meetings. David L. Trautman and Matthew R. Miller and C. Daniel DeLawder receivereceived no compensation for: (i) serving as a member of the Park Board of Directors; (ii) serving as a member of the boardBoard of directorsDirectors of Park National Bank; or (iii) serving as a member of any committee of the respective boardsBoards of directorsDirectors of Park and Park National Bank. In addition, during the period from January 1, 2021 through June 30, 2021, C. Daniel DeLawder did not receive any compensation for: (i) serving as a member of the Park Board of Directors; (ii) serving as a member of the Board of Directors of Park National Bank; or (iii) serving as a member of any committee of the respective Boards of Directors of Park and Park National Bank. Since July 1, 2021, Mr. DeLawder has been compensated in the capacity as a non-employee director of each of Park and Park National Bank. Split-Dollar Life Insurance Policies Effective as of December 28, 2007, Donna M. Alvarado, F. William Englefield IV, Robert E. O’Neill, Mark R. Ramser and Leon Zazworsky entered into split-dollar agreements (the “Split-Dollar Agreements”) which amended and restated the split-dollar agreements to which they had been parties. The Split-Dollar Agreements are intended to comply with the requirements of Section 409A of the Internal Revenue Code. Under the terms of each Split-Dollar Agreement, Park National Bank owns the life insurance policy to which the Split-Dollar Agreement relates. Each individual party to a Split-Dollar Agreement has the right to designate the beneficiary(ies) to whom a portion of the death proceeds of the policy are to be paid in accordance with the terms of the Split-Dollar Agreement. Upon the death of the individual, his or her beneficiary(ies) will be entitled to an amount equal to the lesser of (i) $100,000 or (ii) 100% of the difference between the total death proceeds under the policy and the cash surrender value of the policy (such difference being referred to as the “Net at Risk Amount”). In no event will the amount payable to an individual’s beneficiary(ies) exceed the Net at Risk Amount in the policy as of the date of the individual’s death. Park National Bank will be entitled to any death proceeds payable under the policy remaining after payment to the individual’s beneficiary(ies). Change in Control Payments None of the non-employee directors, other than C. Daniel DeLawder (in his capacity as a former executive officer of Park and Park National Bank and a former employee of Park National Bank), is entitled to payment of any benefits upon a change in control of Park. Please see the description under the caption entitled “EXECUTIVE COMPENSATION - Potential Payouts upon Termination of Employment or Change in Control” of the impact of a change in control upon the PBRSUs held by Mr. DeLawder. TABLE OF CONTENTS Director Compensation for 2019the 2021 Fiscal YearThe following table summarizes the compensation paid by Park to each individual who served as a non-employee director of Park during the 20192021 fiscal year for service on the Park Board of Directors and the boardBoard of directorsDirectors of Park National Bank or the advisory board of directors of a division of Park National Bank. Dollar amounts have been rounded up to the nearest whole dollar.
Director Compensation for 20192021 | | Donna M. Alvarado | | | $55,550 | | | $56,309 | | | $0 | | | $1,148(3) | | | $113,007 | | | | Frederic M. Bertley, Ph.D.(4) | | | $9,683 | | | $56,309 | | | $0 | | | $0 | | | $65,992 | | | | C. Daniel DeLawder(5) | | | $23,100 | | | $56,309 | | | N/A | | | N/A | | | $79,409 | | | | F. William Englefield IV | | | $62,750 | | | $56,309 | | | $0 | | | $532(3) | | | $119,591 | | | | Alicia J. Hupp | | | $35,850 | | | $50,052 | | | $0 | | | $0 | | | $85,902 | | | | Jason N. Judd | | | $29,600 | | | $56,309 | | | $0 | | | $0 | | | $85,909 | | | | Stephen J. Kambeitz | | | $47,600 | | | $56,309 | | | $0 | | | $0 | | | $103,909 | | | | Timothy S. McLain | | | $33,500 | | | $50,052 | | | $0 | | | $0 | | | $83,552 | | | | D. Byrd Miller III(6) | | | $1,000 | | | $12,513 | | | $0 | | | $0 | | | $13,513 | | | | Robert E. O’Neill | | | $57,750 | | | $56,309 | | | $0 | | | $322(3) | | | $114,381 | | | | Mark R. Ramser | | | $19,100 | | | $50,052 | | | $0 | | | $459(3) | | | $69,611 | | | | Julia A. Sloat(7) | | | $4,500 | | | $0 | | | $0 | | | $0 | | | $4,500 | | | | Leon Zazworsky | | | $84,250 | | | $56,309 | | | $0 | | | $1,056(3) | | | $141,615 | |
| | | | | | | | | | | | | | | | | | | Name (1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Donna M. Alvarado | $62,450 | $44,186 | $0 | $ 897 (3) | $107,533 | | James R. DeRoberts | $24,650 | $44,186 | $0 | $ 0 | $68,836 | | F. William Englefield IV | $65,000 | $44,186 | $0 | $ 449 (3) | $109,635 | | Alicia J. Hupp | $35,100 | $39,276 | $0 | $ 0 | $74,376 | | Jason N. Judd | $32,617 | $44,186 | $0 | $ 0 | $76,803 | | Stephen J. Kambeitz | $51,800 | $44,186 | $0 | $ 0 | $95,986 | | Timothy S. McLain | $37,700 | $39,276 | $0 | $ 0 | $76,976 | | Robert E. O’Neill | $63,150 | $44,186 | $0 | $ 277 (3) | $107,613 | | Mark R. Ramser | $22,317 | $39,276 | $0 | $ 405 (3) | $61,998 | | Julia A. Sloat | $29,650 | $44,186 | $0 | $ 0 | $73,836 | | Leon Zazworsky | $91,750 | $44,186 | $0 | $ 833 (3) | $136,769 |
________________________
(1) David L. Trautman, who served as Park’s Chief Executive Officer and President from January 1, 2019 to April 30, 2019 and as Park’s Chairman of the Board and Chief Executive Officer from May 1, 2019 through December 31, 2019; Matthew R. Miller, who served as Park’s Executive Vice President from January 1, 2019 through April 30, 2019 and as Park’s President from May 1, 2019 through December 31, 2019; and C. Daniel DeLawder, who served as Park’s Chairman of the Board from January 1, 2019 through April 30, 2019 and as an executive employee of Park National Bank throughout the 2019(1)
| David L. Trautman, who served as Park’s Chairman of the Board and Chief Executive Officer throughout the 2021 fiscal year; and Matthew R. Miller, who served as Park’s President throughout the 2021 fiscal year, are not included in this table as they are executive officers of Park and Park National Bank and employees of Park National Bank and thus receive no compensation for their services as directors. The compensation received by Mr. Trautman and Mr. Miller as executive officers of Park and Park National Bank and employees of Park National Bank is shown in the “Summary Compensation Table for 2021.” |
(2)
| Represents (a) the number of common shares granted on October 25, 2021 in the form of an annual retainer under the 2017 Non-Employee Directors LTIP, times (b) the closing price of Park’s common shares on NYSE American on October 22, 2021 (the last trading day prior to the grant date) of $125.13. This amount also represents the grant date fair value of the common shares awarded computed in accordance with FASB ASC Topic 718. The following individuals received an aggregate of 450 common shares of Park as an annual retainer: Donna M. Alvarado; Frederic M. Bertley, Ph.D.; C. Daniel DeLawder; F. William Englefield IV; Jason N. Judd; Stephen J. Kambeitz; Robert E. O’Neill; and Leon Zazworsky. Alicia J. Hupp; Timothy S. McLain; and Mark R. Ramser received an aggregate of 400 common shares as an annual retainer. D. Byrd Miller III received 100 common shares in his capacity as a member of the advisory board of directors of the Carolina Alliance Bank Division (now part of the Carolina Division) of Park National Bank but did not receive any common shares in the capacity as a member of the Park Board of Directors since he did not become a Park director until January 1, 2022. Since Julia A. Sloat was no longer a director of Park or Park National Bank on October 25, 2021, she did not receive an annual retainer under the 2017 Non-Employee Directors LTIP. |
(3)
| Reflects the amount of premium deemed to have been paid on behalf of the named individual under the split-dollar life insurance policy maintained on his/her behalf. |
(4)
| Frederic M. Bertley, Ph.D. became a member of the Board of Directors of each of Park and Park National Bank on September 1, 2021. |
(5)
| C. Daniel DeLawder became a non-employee director of each of Park and Park National Bank on July 1, 2021. The amounts shown reflect only the compensation received by Mr. DeLawder in his capacity as a non-employee director. The compensation received by Mr. DeLawder in his capacity as an executive officer of Park and Park National Bank and an employee of Park National Bank, for the period from January 1, 2021 through June 30, 2021, is shown in the “Summary Compensation Table for 2021.” |
(6)
| D. Byrd Miller III became a member of the Board of Directors of each of Park and Park National Bank on January 1, 2022. The amounts shown reflect the compensation received by Mr. Miller in his capacity as a member of the advisory board of directors of the Carolina Alliance Bank Division (now part of the Carolina Division) of Park National Bank during the 2021 fiscal year. |
(7)
| Julia A. Sloat retired from the Park Board of Directors on April 26, 2021 immediately prior to the 2021 Annual Meeting. Ms. Sloat also retired from the Park National Bank board of directors on April 26, 2021. |
TABLE OF CONTENTS Changes in Director Compensation for the 2022 Fiscal Year For the period from January 1, 2022 through April 25, 2022, the per meeting fees paid by Park to individuals serving as non-employee directors for attending meetings of the full Park Board of Directors and meetings of the respective Board committees are to be the same as the per meeting fees paid by Park to individuals serving as non-employee directors during the 2021 fiscal year. From and after April 26, 2022, per meeting fees will no longer be paid to non-employee directors. The following table sets forth the annual retainers to be paid by Park on or about April 26, 2022 to the individuals then serving as non-employee directors of Park for services to be rendered during the period from April 26, 2022 to April 27, 2023 by such individuals in their respective capacities as: (i) members of the Board of Directors of both Park and Park National Bank; (ii) members of committees of the Board of Directors of Park; (iii) members of committees of the Board of Directors of Park National Bank; and (iv) members of the advisory board of directors of one of the divisions of Park National Bank: Annual Retainers:
| | Annual Retainer for Board of Director Members:
| | | | (serving as a director of both Park and Park National Bank) | | | $40,000 | | | | | Annual Retainer for Committee Chairs:
| | | | Audit Committee (Joint committee for Park and Park National Bank) | | | $15,000 | Compensation Committee (Park only) | | | $10,000 | Executive Committee (Joint committee for Park and Park National Bank) | | | $25,000 | Nominating Committee (Park only) | | | $10,000 | Risk Committee (Park only) | | | $10,000 | Trust Committee (Park National Bank only) | | | $10,000 | | | | | Annual Retainer for Other Committee Members:
| | | | Audit Committee (Joint committee for Park and Park National Bank) | | | $7,500 | Compensation Committee (Park only) | | | $5,000 | Executive Committee (Joint committee for Park and Park National Bank) | | | $20,000 | Nominating Committee (Park only) | | | $5,000 | Risk Committee (Park only) | | | $5,000 | Trust Committee (Park National Bank only) | | | $5,000 | | | | | Lead Director Additional Annual Retainer | | | $25,000 | Additional Annual Retainer of Members of an Advisory Board of Directors | | | $7,500 |
Annual Retainers Payable in Common Shares Each individual then serving as a non-employee director of Park and Park National Bank will receive, on the date of the regular meeting of the Park Board of Directors held during the fourth quarter of the 2022 fiscal year, an annual retainer, for service on the Park Board of Directors and employees ofthe Park National Bank and thus receive no compensation for their services as directors. The compensation received by Messrs. Trautman, Miller and DeLawder as executive officersBoard of Park and Park National Bank is shown in the “Summary Compensation Table for 2019”. (2) Represents (a) the number of common shares granted on October 28, 2019Directors, in the form of an annual retainercommon shares awarded under the 2017 Non-Employee Directors LTIP, times (b) the closing price of Park’s common shares on NYSE American on October 25, 2019 (the last trading day prior to the grant date) of $98.19. This amount also represents theLTIP. The aggregate grant date fair value of the common shares to be awarded computedwill be $40,000.
In addition, an individual then serving as a member of the advisory board of directors of one of the divisions of Park National Bank will receive on the date of the regular meeting of the Park Board of Directors held during the fourth quarter of the 2022 fiscal year, an annual retainer, for such service, in accordance with FASB ASC Topic 718. The following individuals received an aggregatethe form of 450 common shares awarded under the 2017 Non-Employee Directors LTIP. The aggregate grant date fair value of Park as an annual retainer: Donna M. Alvarado; James R. DeRoberts; F. William Englefield IV; Jason N. Judd; Stephen J. Kambeitz; Robert E. O’Neill; Julia A. Sloat; and Leon Zazworsky. Alicia J. Hupp; Timothy S. McLain; and Mark R. Ramser received an aggregate of 400the common shares as an annual retainer. (3) Reflects the amount of premium deemed to have been paid on behalf of the named individual under the split-dollar life insurance policy maintained on his or her behalf.be awarded will be $10,000.
TABLE OF CONTENTS RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal 3)
Crowe LLP, together with its predecessors Crowe Horwath LLP and Crowe Chizek and Company LLC, has served as Park’s independent registered public accounting firm since March 15, 2006. Crowe LLP audited Park’s consolidated financial statements as of and for the fiscal year ended December 31, 20192021 and the effectiveness of Park’s internal control over financial reporting as of December 31, 2019.2021. Representatives of Crowe LLP are expected to be present at the virtual Annual Meeting, will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.
The appointment of Park’s independent registered public accounting firm is made annually by the Audit Committee. The Audit Committee evaluates Crowe LLP’s qualifications, performance and independence in accordance with regulatory requirements and guidance. As part of this evaluation, factors considered by the Audit Committee include: Crowe LLP’s capabilities and expertise; the recent performance of Crowe LLP on Park’s audit; the assessment by Park’s management of Crowe LLP’s performance; the external data on audit quality, including results of recent PCAOB reports on Crowe LLP and its peers; Crowe LLP’s independence; the terms of the audit engagement; and the quality and candor of Crowe LLP’s communications to the Audit Committee. Subject to ratification by the shareholders of Park, the Audit Committee has unanimously appointed Crowe LLP as the independent registered public accounting firm to audit Park’s consolidated financial statements and internal control over financial reporting for the fiscal year ending December 31, 2022. Park has determined to submit the appointment of the independent registered public accounting firm for the 2022 fiscal year to the shareholders for ratification because of such firm’s role in reviewing the quality and integrity of Park’s consolidated financial statements and internal control over financial reporting. Before appointing Crowe LLP, the Audit Committee carefully considered that firm’s qualifications as the independent registered public accounting firm for Park and the audit scope. THE AUDIT COMMITTEE AND THE FULL BOARD OF DIRECTORS UNANIMOUSLY
RECOMMEND THAT THE PARK SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF
THE APPOINTMENT OF CROWE LLP. Even if the appointment of Crowe LLP is ratified by the Park shareholders, the Audit Committee, in its discretion, could decide to terminate the engagement of Crowe LLP and to engage another firm if the Audit Committee determines such action is necessary or desirable. If the appointment of Crowe LLP is not ratified, the Audit Committee will reconsider (but may decide to maintain) the appointment. TABLE OF CONTENTS Report of the Audit Committee for the Fiscal Year Ended December 31, 20192021Role of the Audit Committee, the Independent Registered Public Accounting Firm and Park’s Management The Audit Committee consists of sixseven directors, each of whom qualifies as an independent director under the applicable NYSE American Rules and Exchange Act Rule 10A-3.10A-3 and an outside director independent of management under the applicable FDIC Regulations. The Audit Committee operates under the Audit Committee Charter adopted by the Park Board of Directors. The Audit Committee is responsible for assisting the full Board of Directors in the oversight of the accounting and financial reporting processes of Park and Park’s subsidiaries. In particular, the Audit Committee assists the full Board of Directors in overseeing:providing independent, objective oversight of: (i) the integrity of Park’s consolidated financial statements and the effectiveness of Park’s systems of disclosure controls and procedures and internal control over financial reporting; (ii) the legal and regulatory compliance and ethics programs established by Park’s management and the Board of Directors; (iii) the qualifications and independence of Park’s independent registered public accounting firm; (iv) the performance of Park’s independent registered public accounting firm and Park’s Internal Audit Department; (v) compliance with Park’s Code of Business Conduct and (v)Ethics; (vi) Park’s major financial risk exposures and the steps Park’s management has taken to monitor and control such exposures; and (vii) the annual independent audit of Park’s consolidated financial statements. The Audit Committee is responsible for the appointment, compensation and oversight of the work of Park’s independent registered public accounting firm. On an annual basis, the Audit Committee evaluates the qualifications, performance, tenure and independence of Crowe LLP and determines, after also considering the impact of a change in Park’s independent registered public accounting firm, whether to re-engage Crowe LLP. Crowe LLP, together with its predecessors, has served as Park’s independent registered public accounting firm since 2006. Crowe LLP rotates its lead audit engagement partner every five years and the Audit Committee takes a lead role in the process of evaluating and selecting the new lead audit engagement partner. The Audit Committee believes there are benefits to having an independent registered public accounting firm with an extensive history with Park, including higher quality audit work and accounting advice due to Crowe LLP’s institutional knowledge of Park’s business and operations, accounting policies and financial systems, and internal control framework, as well as operational efficiencies. As discussed below, Crowe LLP is subject to independence controls that mitigate the risks that may be associated with long auditor tenure. Crowe LLP was appointed by the Audit Committee to serve as Park’s independent registered public accounting firm for the 20202022 fiscal year.
During the 20192021 fiscal year, the Audit Committee met eleventen times, and the Audit Committee discussed the interim financial and other information contained in each quarterly earnings announcement and periodic filings with the SEC with Park’s management and Crowe LLP prior to public release. Park’s management has the primary responsibility for the preparation, presentation and integrity of Park’s consolidated financial statements, for the appropriateness of the accounting principles and reporting policies that are used by Park and Park’s subsidiaries and for the accounting and financial reporting processes, including the establishment and maintenance of systems of disclosure controls and procedures and internal control over financial reporting. ManagementPark’s management also has the responsibility for the preparation of an annual report on management’s assessment of the effectiveness of Park’s internal control over financial reporting. Park’s independent registered public accounting firm is responsible for performing an audit of Park’s annual consolidated financial statements and Park’s internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and issuing its report thereon based on such audit and for reviewing Park’s unaudited interim consolidated financial statements. The Audit Committee’s responsibility is to provide independent, objective oversight of these processes. In discharging its oversight responsibilities, the Audit Committee regularly met with Park’s management, Crowe LLP and Park’s internal auditors throughout the 2021 fiscal year. The Audit Committee often met with each of these groups in executive session. Throughout the relevant period, the Audit Committee had full access to management as well as to Crowe LLP and Park’s internal auditors. To fulfill its responsibilities, the Audit Committee did, among other things, the following: •reviewed the work performed by Park’s Internal Audit Department;
TABLE OF CONTENTS monitored the progress and results of the testing of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and other applicable regulatory requirements, reviewed a report from Park’s management and Park’s Internal Audit Department regarding the design, operation and effectiveness of internal control over financial reporting, and reviewed an audit report from Crowe LLP regarding Park’s internal control over financial reporting; •considered the potential effects of new accounting standards and initiatives and changes to the audit process including, for example, the implementation of the current expected credit loss (“CECL”) methodology and the audit report standards relating to the disclosure and discussion of critical audit matters (“CAMs”) on Park’s financial statements;
reviewed the audit plan and scope of the audit with Crowe LLP and discussed with Crowe LLP the matters required to be discussed in accordance with the applicable requirements of the PCAOB, including Auditing Standard 1301 (Communications with Audit Committee)Committees), and of the SEC; •reviewed and discussed with Crowe LLP the latter’s audit report and expected CAMs:
reviewed and discussed with Park’s management and Crowe LLP the consolidated financial statements of Park for the 20192021 fiscal year; •reviewed management’s representations that thosethe consolidated financial statements of Park for the 2021 fiscal year were prepared in accordance with accounting principles generally accepted in the United StatesU.S. GAAP and fairly present the consolidated results of operations and financial position of Park and Park’s subsidiaries;
•reviewed the presentation of non-U.S. GAAP financial measures and metrics to understand how they are used to evaluate performance and whether they are consistently prepared and presented from period to period in accordance with Park’s related policies and disclosure controls and procedures and in compliance with SEC rules and interpretations;
received the written disclosures and the letter from Crowe LLP required by applicable requirements of the PCAOB regarding Crowe LLP’s communications with the Audit Committee concerning independence, and discussed with Crowe LLP that firm’s independence;
•reviewed all audit and non-audit services performed for Park and Park’s subsidiaries by Crowe LLP and considered whether the provision of non-audit services was compatible with maintaining that firm’s independence from Park and Park’s subsidiaries; and
•discussed, with Park’s management and Park’s Internal Audit Department, Park’s systems to monitor and manage business risk, and Park’s legal and ethical compliance programs.
Management’s Representations and Audit Committee Recommendation Park’s management has represented to the Audit Committee that Park’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2019,2021, were prepared in accordance with accounting principles generally accepted in the United States, and the Audit Committee has reviewed and discussed those audited consolidated financial statements with management and with Crowe LLP. Based on the Audit Committee’s discussions with Park’s management and with Crowe LLP and the Audit Committee’s review of the report of Crowe LLP to the Audit Committee, the Audit Committee recommended to the full Board of Directors that Park’s audited consolidated financial statements be included in Park’s 20192021 Form 10-K for filing with the SEC. Submitted by members of the Audit Committee: | | | Stephen J. Kambeitz (Chair) | | | Timothy S. McLain | | | | Donna M. Alvarado | | | D. Byrd Miller III | | | | Alicia J. Hupp | | | Robert E. O’Neill | | | | Jason N. Judd | | | |
Stephen J. Kambeitz (Chair) Alicia J. Hupp Timothy S. McLain
Donna M. Alvarado Jason N. Judd Robert E. O’Neill
Pre-Approval of Services Performed by Independent Registered Public Accounting Firm Under applicable SEC rules, the Audit Committee is required to pre-approve the audit and non-audit services performed by the independent registered public accounting firm employed by Park in order to ensure that those TABLE OF CONTENTS services do not impair that firm’s independence from Park. The SEC rules specify the types of non-audit services that an independent registered public accounting firm may not provide to its client and establish the Audit Committee’s responsibility for administration of the engagement of the independent registered public accounting firm. Consistent with the SEC rules, the Audit Committee Charter requires that the Audit Committee review and pre-approve all audit services and permitted non-audit services provided by Park’s independent registered public accounting firm to Park or any of our subsidiaries. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee and, if it does, the decisions of that member must be presented to the full Audit Committee at that Committee’s next scheduled meeting. All requests or applications for services to be provided by the independent registered public accounting firm must be submitted to the Audit Committee by both the independent registered public accounting firm and Park’s Chief Financial Officer and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC rules governing the independence of the independent registered public accounting firm. Fees of Independent Registered Public Accounting Firm The aggregate audit fees billed by Crowe LLP for the 20192021 fiscal year and the 20182020 fiscal year were approximately $649,000$996,000 and $636,000,$716,000, respectively. These amounts include fees for professional
services rendered by Crowe LLP in connection with the audit of Park’s consolidated financial statements and internal control over financial reporting and reviews of the consolidated financial statements included in Park’s Quarterly Reports on Form 10-Q. The aggregate fees for audit-related services rendered by Crowe LLP for the 20192021 fiscal year were approximately $334,000.$129,000. This amount includes fees for audits of the Park Pension Plan and the Park KSOP and fees for an internal controls report for the trust department of Park National Bank and fees associated with the issuance of a consent in connection with one Registration Statement on Form S-4 filed by Park in order to register the common shares issued in the merger with CAB Financial Corporation.Bank. The aggregate fees for audit-related services rendered by Crowe LLP for the 20182020 fiscal year were approximately $201,000.$564,000. This amount includes fees for audits of the Park Pension Plan and the Park KSOP and fees for an internal controls report for the trust department of Park National Bank andBank. In addition, this amount includes fees associated with the issuance of a consent in connection with one Registration Statement on Form S-4 filedfor services performed by Park in order to register the common shares issuedCrowe LLP in connection with the acquisition of NewDominion Bank.CAB Financial Corporation and the issuance and sale by Park of $175,000,000 aggregate principal amount of Park’s 4.50% Fixed-to-Floating Rate Subordinated Notes due 2030. The aggregate fees for tax services rendered by Crowe LLP for the 20192021 fiscal year and the 20182020 fiscal year were approximately $132,000$0 and $88,000,$28,000, respectively, and primarily pertain to the preparation of federal and state tax returns for Park and Park National Bank in each year. For each of the 20192021 fiscal year and the 20182020 fiscal year, no fees other than those discussed above under “Audit Fees,”“Audit-Related Fees” and “Tax Fees” were paid to Crowe LLP. All of the services rendered to Park and our subsidiaries by Crowe LLP for the 20192021 fiscal year and the 20182020 fiscal year had been pre-approved by the Audit Committee. TABLE OF CONTENTS ADOPTION OF AMENDMENT TO PARK’S ARTICLES OF INCORPORTION AND RELATED AMENDMENTS TO PARK’S REGULATIONS TO
ELIMINATE CUMULATIVE VOTING RIGHTS IN THE ELECTION OF PARK DIRECTORS
(Proposal 4) Effective February 4, 2022, the Park Board of Directors unanimously approved, and is hereby submitting for consideration and adoption by the Park shareholders: an amendment to Park’s Articles of Incorporation to add new Article NINTH to eliminate cumulative voting rights in the election of directors; and related amendments to Section 1.10 and Section 2.04 of Park’s Regulations to eliminate the textual references to the right of Park shareholders to elect to have cumulative voting apply in the election of directors. The full text of the proposed amendments is attached as Appendix B to this proxy statement. Park shareholders currently are able to elect directors by a procedure called “cumulative voting.” Under Ohio law, cumulative voting is present unless specifically eliminated in the articles of incorporation filed by an Ohio corporation with the Ohio Secretary of State. Because Park’s Articles of Incorporation do not currently address cumulative voting, Park shareholders have the right to cumulatively vote in any election of directors. In addition, Section 1.10 of Park’s Regulations specifically provides for the right of a Park shareholder to elect to have cumulative voting apply in any election of Park directors. The cumulative voting procedure is described in the second paragraph following the question “Who can vote at the Annual Meeting?” on page 3 of this proxy statement. The Park Board of Directors believes that the cumulative voting procedure is overly complicated to implement and seldom if ever used by shareholders and, thus, is no longer in the best interests of Park and Park shareholders. In addition: A shareholder or group of shareholders holding a relatively small number of common shares that cumulatively vote those common shares in an election of directors could elect one or more directors whose loyalty may primarily be to the minority group responsible for their election rather than to Park and all of the Park shareholders. This can provide the minority with a disproportionate influence in director elections and could facilitate the advancement of special interests of a minority of Park shareholders at the expense of the general interests of all Park shareholders. The Park Board of Directors believes that each director is responsible to, and should represent the interests of, all Park shareholders as opposed to a minority shareholder group that may have special interests and goals inconsistent with those of the majority of Park shareholders. The election of directors who view themselves as representing a particular minority shareholder group could result in partisanship and discord on the Park Board of Directors, and may impair the ability of the Park directors to act in the best interests of Park and all Park shareholders. Park believes that cumulative voting rights do not exist at a substantial majority of public companies. Moreover, Park understands that shareholders generally disfavor cumulative voting. The administration of director elections under a cumulative voting procedure is complicated in practice and carries significant potential for confusion and delay. Since Ohio law generally only requires that a shareholder give notice that voting at a meeting called for the purpose of electing directors will be cumulative a minimum of 48 hours before the meeting, many shareholders may not know at the time they return their proxies or otherwise instruct the voting of their common shares at the meeting that cumulative voting will apply to the election of directors at the meeting, leading to potential shareholder confusion as to how their votes are to be cast or whether prior votes should be changed. Ohio law is inflexible with respect to how and when cumulative voting may be invoked at a meeting, if it has not been eliminated. As long as cumulative voting remains in effect, no individual director may be removed from office by Park shareholders if the votes of a sufficient number of common shares are cast against the director’s removal that, if cumulatively voted at an election of directors, would be sufficient to elect at least one director. This cumulative voting provision overly complicates the right of Park shareholders to remove a director otherwise permitted under Ohio law. TABLE OF CONTENTS The elimination of cumulative voting might, under certain circumstances, render more difficult or discourage a proxy contest, a tender officer or an assumption of control by a holder of a large block of Park common shares. Neither management nor the Park Board of Directors is aware of any attempt by any shareholder to accumulate sufficient common shares to undertake any such actions. The Park Board of Directors believes that cumulative voting is no longer in the best interests of Park and the Park shareholders and unanimously recommends the elimination of cumulative voting as a prudent step that would institute a system of representational fairness in which each shareholder’s influence in director elections is proportionate to the number of common shares owned by such shareholder. THE FULL BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE PARK SHAREHOLDERS VOTE “FOR” THE PROPOSAL TO ADOPT THE AMENDMENTS TO PARK’S ARTICLES OF INCORPORATION AND PARK’S REGULATIONS TO ELIMINATE CUMULATIVE VOTING RIGHTS IN THE ELECTION OF PARK DIRECTORS. SHAREHOLDER PROPOSALS FOR 20212023 ANNUAL MEETING Proposals by shareholders intended to be presented at the 20212023 Annual Meeting must be received by the Secretary of Park no later than November 9, 2020,7, 2022, to be eligible for inclusion in Park’s form of proxy, notice of meeting, proxy statement and notice of internet availability of proxy materials, as applicable, relating to the 20212023 Annual Meeting. Park will not be required to include in its form of proxy, notice of meeting, proxy statement or notice of internet availability of proxy materials, as applicable, a shareholder proposal that is received after that date or that otherwise fails to meet the requirements for shareholder proposals established by the applicable SEC rules. The SEC has promulgated rules relating to the exercise of discretionary voting authority under proxies solicited by the Park Board of Directors. If a shareholder intends to present a proposal at the 20212023 Annual Meeting without inclusion of that proposal in Park’s proxy materials, and does not notify Park’s Secretary by January 23, 2021,21, 2023, or if Park meets other requirements of the applicable SEC rules, the proxies solicited by the Park Board of Directors for use at the 20212023 Annual Meeting will confer discretionary authority to vote on the proposal should it then be raised at the 20212023 Annual Meeting.
In each case, written notice must be given to Park’s Secretary, whose name and address are: Brady T. Burt
Chief Financial Officer, Secretary and Treasurer
Park National Corporation
51 North Third Street
Post Office Box 3500
Newark, Ohio 43058-3500 Shareholders desiring to nominate candidates for election as directors at the 20212023 Annual Meeting must follow the procedures described under the heading “Nominating Procedures”.Procedures.” FUTURE ELECTRONIC ACCESS TO PROXY MATERIALS AND ANNUAL REPORT Registered shareholders can further reduce the costs incurred by Park in mailing proxy materials by consenting to receive all future proxy statements, forms of proxy, annual reports to shareholders and notices of internet availability of proxy materials, as applicable, electronically via electronic mail or over the Internet. To registersign up for electronic delivery of future proxy materials, log onto overyou must vote your common shares electronically via the Internet by logging on to www.proxyvote.com and, follow the instructions for “Electronic Delivery of Proxy Materials.”when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. You will be responsible for any fees or charges that you would typically pay for access to the Internet. Alternatively, if you received a Notice of Internet Availability for the 2022 Annual Meeting, you may follow the instructions provided in the Notice of Internet Availability. TABLE OF CONTENTS As of the date of this proxy statement, the Park Board of Directors knows of no matter that will be presented for action by Park shareholders at the Annual Meeting other than those matters discussed in this proxy statement. However, if any other matter requiring a vote of the shareholders properly comes before the Annual Meeting, the individuals acting under the proxies solicited by the Park Board of Directors will vote and act according to their best judgments in light of the conditions then prevailing, to the extent permitted under applicable law. It is important that your common shares be represented at the Annual Meeting. Whether or not you plan to attend the Annual Meeting in person, please complete, sign, date and return your proxy card (if you received or requested a paper copy of the proxy materials for the Annual Meeting) or transmit your voting instructions electronically by telephone or over the Internet as described in this proxy statement.
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| | | By Order of the Board of Directors, |
| | | | | | | | | | | | March 9, 2020[•] , 2022 | | | BRADY T. BURT
Chief Financial Officer, Secretary and Treasurer |
TABLE OF CONTENTS
FINANCIAL SERVICES/BANK HOLDING COMPANIES INCLUDED IN
$3 BILLION TO $10 BILLION INDUSTRY INDEX
| | | | | | 1867 Western Financial Corporation | | | Stockton, CA | 1st Source Corporation | | | South Bend, IN | Allegiance Bancshares, Inc. | | | Houston, TX | Alpine Banks of Colorado | | | Glenwood Springs, CO | Amerant Bancorp Inc. | | | Coral Gables, FL | ANB CorporationAmerican National Bankshares, Inc. | Terrell, TX | | Danville, VA | ANB Corporation | | | Terrell, TX | Arrow Financial Corporation | | | Glens Falls, NY | Banc of California, Inc. | | | Santa Ana, CA | BancFirst Corporation | | | Oklahoma City, OK | The Bancorp, Inc. | | | Wilmington, DE | BancPlus Corporation | | | Ridgeland, MS | Bangor Bancorp, MHC | | | Bangor, ME | Bank Leumi Le-Israel Corporation | | | New York, NY | Bar Harbor Bankshares | | | Bar Harbor, ME | Beal Financial Corporation | Plano, TX | Boston Private Financial Holdings, Inc. | Boston, MA | Bridge Bancorp, Inc. | Bridgehampton, NY | Brookline Bancorp, Inc. | | | Boston, MA | Bryn Mawr Bank Corporation | | | Bryn Mawr, PA | BTC Financial Corp. | | | Des Moines, IA | Business First Bancshares, Inc. | | | Baton Rouge, LA | Byline Bancorp, Inc. | | | Chicago, IL | Cambridge Financial Group, Inc. | | | Cambridge, MA | Camden National Corporation | | | Camden, ME | Canandaigua National Corporation | | | Canandaigua, NY | Cape Cod Five Mutual Company | Harwich Port, | | Hyannis, MA | Capital City Bank Group, Inc. | | | Tallahassee, FL | Capitol Federal Financial, Inc. | | | Topeka, KS | Carolina Financial CorporationCarter Bankshares, Inc. | Charleston, SC | | Martinsville, VA | CBTX, Inc. | | | Houston, TX | Central Bancshares, Inc. | | | Lexington, KY | Central Pacific Financial Corp. | | | Honolulu, HI | Century Bancorp, Inc. | | | Medford, MA | City Holding Company | | | Cross Lanes, WV | CNB Financial Corporation | | | Clearfield, PA | Columbia Bank MHC | | | Fair Lawn, NJ | Community Bancshares of Mississippi, Inc. | | | Brandon, MS | Community Trust Bancorp, Inc. | | | Pikeville, KY | ConnectOne Bancorp Inc. | | | Englewood Cliffs, NJ | CrossFirst Bankshares, Inc. | | | Leawood, KS | CTBC Capital Corp. | | | Los Angeles, CA | Dacotah Banks, Inc. | | | Aberdeen, SD | Dickinson Financial Corporation II | | | Kansas City, MO | Dime Community Bancshares, Inc. | | | Hauppauge, NY | Dollar Mutual Bancorp | | | Pittsburgh, PA | Educational Services of America Inc. | | | Farragut, TN | Enterprise Bancorp, Inc. | | | Lowell, MA | Enterprise Financial Services Corp | | | Clayton, MO |
TABLE OF CONTENTS | | | | | | Community Trust Bancorp, Inc. | Pikeville, KY | ConnectOne Bancorp Inc. | Englewood Cliffs, NJ | CrossFirst Bankshares, Inc. | Leawood, KS | CTBC Capital Corp. | Los Angeles, CA | Dime Community Bancshares, Inc. | Brooklyn, NY | Discount Bancorp, Inc. | New York, NY | Dollar Mutual Bancorp | Pittsburgh, PA | Eagle Bancorp, Inc. | Bethesda, MD | Educational Services of America Inc. | Farragut, TN | Enterprise Bancorp, Inc. | Lowell, MA | Enterprise Financial Services Corp | Clayton, MO | Equity Bancshares, Inc. | | | Wichita, KS | Farmers & Merchants Bancorp | | | Lodi, CA | Farmers & Merchants Investments Inc. | | | Lincoln, NE | FB Corporation | | | Creve Coeur, MO | FB Financial Corporation | Nashville, TN | Financial Institutions, Inc. | | | Warsaw, NY | First Bancorp | | | Southern Pines, NC | First Bancshares, Inc. | | | Merrillville, IN | First Bancshares, Inc. | | | Hattiesburg, MS | First Busey Corporation | Champaign, IL | First Commonwealth Financial Corporation | | | Indiana, PA | First Defiance Financial Corp. | Defiance, OH | First Financial Bankshares, Inc. | Abilene, TX | First Financial Corporation | | | Terre Haute, IN | First Foundation Inc. | | | Irvine, CA | First Internet Bancorp | | | Fishers, IN | First Mid-Illinois Bancshares, Inc. | | | Mattoon, IL | First of Long Island Corporation | | | Glen Head, NY | First Security Bancorp | | | Searcy, AR | First State Bancshares, Inc. | | | Farmington, MO | FirstSun Capital Bancorp | | | Denver, CO | Flushing Financial Corporation | | | Uniondale, NY | Franklin Financial Network, Inc. | Franklin, TN | German American Bancorp, Inc. | | | Jasper, IN | Great Southern Bancorp, Inc. | | | Springfield, MO | Green Dot Corporation | | | Pasadena, CA | Hanmi Financial Corporation | | | Los Angeles, CA | Happy Bancshares, Inc. | | | Canyon, TX | HarborOne Bancorp, Inc. | | | Brockton, MA | HBT Financial, Inc. | | | Bloomington, IL | Heritage Commerce Corp | | | San Jose, CA | Heritage Financial Corporation | | | Olympia, WA | Hills Bancorporation | | | Hills, IA | HomeStreet, Inc. | | | Seattle, WA | Hometown Financial Group MHC | | | Easthampton, MA | HomeTrust Bancshares, Inc. | | | Asheville, NC | Horizon Bancorp | | | Michigan City, IN | Independent Bank Corporation | | | Grand Rapids, MI | Industry Bancshares, Inc. | | | Industry, TX | INTRUST Financial Corporation | | | Wichita, KS | Johnson Financial Group, Inc. | | | Racine, WI | Kearny Financial Corporation | | | Fairfield, NJ | Lakeland Bancorp, Inc. | | | Oak Ridge, NJ | Lakeland Financial Corporation | | | Warsaw, IN | Live Oak Bancshares, Inc. | | | Wilmington, NC | Luther Burbank Corp. | | | Santa Rosa, CA | Mercantile Bank Corporation | | | Grand Rapids, MI | Merchants Bancorp | | | Carmel, IN | Meridian Bancorp, Inc. | | | Peabody, MA | Meta Financial Group, Inc. | | | Sioux Falls, SD | Middlesex Bancorp, MHC | | | Natick, MA | Midland States Bancorp, Inc. | | | Effingham, IL | MidWestOne Financial Group, Inc. | | | Iowa City, IA | National Bank Holdings Corporation | | | Greenwood Village, CO | National Consumer Cooperative Bank | | | Arlington, VA |
TABLE OF CONTENTS | | | | | | Heritage Commerce Corp | San Jose, CA | Heritage Financial Corporation | Olympia, WA | Hills Bancorporation | Hills, IA | HomeStreet, Inc. | Seattle, WA | HomeTrust Bancshares, Inc. | Asheville, NC | Horizon Bancorp | Michigan City, IN | Independent Bank Corporation | Grand Rapids, MI | Industry Bancshares, Inc. | Industry, TX | INTRUST Financial Corporation | Wichita, KS | Johnson Financial Group, Inc. | Racine, WI | Kearny Financial Corporation | Fairfield, NJ | Lakeland Bancorp, Inc. | Oak Ridge, NJ | Lakeland Financial Corporation | Warsaw, IN | Live Oak Bancshares, Inc. | Wilmington, NC | Luther Burbank Corp. | Santa Rosa, CA | Mercantile Bank Corporation | Grand Rapids, MI | Merchants Bancorp | Carmel, IN | Meridian Bancorp, Inc. | Peabody, MA | Meta Financial Group, Inc. | Sioux Falls, SD | Middlesex Bancorp, MHC | Natick, MA | Midland States Bancorp, Inc. | Effingham, IL | MidWestOne Financial Group, Inc. | Iowa City, IA | National Bank Holdings Corporation | Greenwood Village, CO | NBT Bancorp Inc. | Norwich, NY | New York Private Bank & Trust Corporation | | | New York, NY | NexBank Capital, Inc. | | | Dallas, TX | Nicolet Bankshares, Inc. | | | Green Bay, WI | Northfield Bancorp, Inc. | | | Woodbridge, NJ | Ocean Bankshares, Inc. | | | Miami, FL | OceanFirst Financial Corp | Toms River, NJ | OFG Bancorp | | | San Juan, PR | Origin Bancorp, Inc. | | | Ruston, LA | Park National Corporation | | | Newark, OH | Peapack-Gladstone Financial Corporation | | | Bedminster, NJ | Peoples Bancorp Inc. | | | Marietta, OH | Provident Financial Services, Inc.PeoplesBancorp, MHC | Jersey City, NJ | | Holyoke, MA | Premier Financial Corp. | | | Defiance, OH | QCR Holdings, Inc. | | | Moline, IL | RBB Bancorp | | | Los Angeles, CA | Republic Bancorp, Inc. | | | Louisville, KY |
| | | | | | Financial Services/
Bank Holding Company Name
| Home Office Location | | Republic First Bancorp, Inc. | | | Philadelphia, PA | S&T Bancorp, Inc. | | | Indiana, PA | Salem Five Bancorp | | | Salem, MA | Sandy Spring Bancorp, Inc. | Olney, MD | SeaCoast Banking Corporation of Florida | | | Stuart, FL | ServisFirst Bancshares, Inc. | Birmingham, AL | SNBNY Holdings Limited | | | New York, NY | South Plains Financial, Inc. | | | Lubbock, TX | Southern BancShares (N.C.), Inc. | | | Mount Olive, NC | Southside Bancshares, Inc. | | | Tyler, TX | Spend Life Wisely Company, Inc. | Durant, OK | State Bankshares, Inc. | | | Fargo, ND | Sterling Bancorp, Inc. | | | Southfield, MI | Stock Yards Bancorp, Inc. | | | Louisville, KY | Tompkins Financial Corporation | | | Ithaca, NY | TriCo Bancshares | | | Chico, CA | TriState Capital Holdings, Inc. | | | Pittsburgh, PA | Triumph Bancorp, Inc. | | | Dallas, TX | TrustCo Bank Corp NY | | | Glenville, NY | Univest Corporation of Pennsylvania | | | Souderton, PA | Valley View Bancshares, Inc. | | | Overland Park, KS | Veritex Holdings, Inc. | | | Dallas, TX | W.T.B. Financial Corporation | | | Spokane, WA | Washington Trust Bancorp, Inc. | | | Westerly, RI | Westamerica Bancorporation | | | San Rafael, CA | Wilson Bank Holding Company | | | Lebanon, TN |
A-3
TABLE OF CONTENTS Deleted text is indicated by strikethrough, and new text is indicated by underlying: PROPOSED AMENDMENT
TO ARTICLES OF INCORPORATION OF PARK NATIONAL CORPORATION 50 NORTH THIRD STREETAmendment to add new Article NINTH
NEWARK, OH 43055
| | | VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m., Eastern Daylight Saving Time, on April 26, 2020. Have your proxy card or Notice of Internet Availability of Proxy Materials in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
| ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by our Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards, annual reports, and Notices of Internet Availability of Proxy Materials, as applicable, electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically for future meetings.
| VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m., Eastern Daylight Saving Time, on April 26, 2020. Have your proxy card or Notice of Internet Availability of Proxy Materials in hand when you call and then follow the instructions.
| VOTE BY MAIL
If you received a printed copy of the proxy materials, mark, sign and date your proxy card and return it in the postage-paid envelope provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E93925-P34748 KEEP THIS PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PARK NATIONAL CORPORATION | | | | | | | | | | | | | | The Board of Directors recommends you vote "FOR" the election of the Board of Directors' nominees in Item 1 and "FOR" each of the proposals under Items 2 and 3: | | | | | | | | | | | | | | 1. | Election of four directors, each to serve a term of three years to expire at the 2023 Annual Meeting of Shareholders: | | | | | | | | | | | | | | | | | | | For | Against | Abstain | | | For | Against | Abstain | | 1a. C. Daniel DeLawder | | | | | r | r | r | 2. | Approval of non-binding advisory resolution to approve the compensation of the Company's named executive officers. | r | r | r | | 1b. Alicia J. Hupp | | | | | r | r | r | 3. | Ratification of the appointment of Crowe LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2020. | r | r | r | | 1c. Matthew R. Miller | | | | | r | r | r | | | | | | | 1d. Robert E. O’Neill | | | | | r | r | r | | | | | | | | | | | | | | | | | | | | The undersigned shareholder(s) authorize(s) the individuals designated to vote the common shares represented by this proxy card to vote, in their discretion, to the extent permitted by applicable law, upon such other matters (none known by the Company at the time of solicitation of this proxy) as may properly come before the Annual Meeting. | | | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. The signer(s) hereby revoke(s) all prior proxies given by the signer(s) to vote at the Annual Meeting. Please fill in, sign, date and return this proxy card in the enclosed envelope. When signing as Attorney, Executor, Administrator, Trustee or Guardian, please give full title as such. If shareholder is a corporation, please sign the full corporate name by an authorized officer. If shareholder is a partnership or other entity, an authorized person must sign in the entity’s name. Joint owners must each sign individually.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | | | Date | | | | | Signature (Joint Owners) | Date | | |
Important Notice Regarding the AvailabilityNINTH: No holder of Proxy Materials for the Annual Meetingshares of Shareholders of Park National Corporation to be held on Monday, April 27, 2020: Park National Corporation's Noticeany class of the 2020 Annual MeetingCorporation shall have the right to vote cumulatively in the election of Shareholders and Proxy Statement anddirectors of the Park National Corporation 2019 Annual Report, together with the Park National Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2019, are available at www.proxyvote.com.Corporation.
PROPOSED AMENDMENTS TO
E93926-P34748
REGULATIONS OF PARK NATIONAL CORPORATION Proxy for Annual Meeting of ShareholdersAmendment to Section 1.10
April 27, 2020 at 2:00 p.m., Eastern Daylight Saving Time
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The holder(s) of common shares of Park National Corporation (the "Company") identified onSection 1.10. Cumulative Voting. [INTENTIONALLY OMITTED.]If notice in writing shall be given by a shareholder to the reverse side of this proxy card hereby appoint(s) F. William Englefield IV and Leon Zazworsky, and each of them, with power to act withoutpresident, a vice president or the other and with power of substitution, the proxiessecretary of the shareholder(s) and hereby authorize(s) them to attendcorporation, not less than forty-eight hours before the Annual Meeting of Shareholderstime fixed for holding a meeting of the Company (the "Annual Meeting")shareholders for the purpose of electing directors if notice of such meeting shall have been given at least ten days prior thereto, and otherwise not less than twenty-four hours before such time, that such shareholder desires that the voting at such election shall be cumulative, and if an announcement of the giving of such notice is made upon the convening of the meeting by the chairman or secretary or by or on behalf of the shareholder giving such notice, each shareholder shall have the right to cumulate such voting power as he possesses and to give one candidate as many votes as is determined by multiplying the number of directors to be held atelected by the offices of The Park National Bank, 50 North Third Street, Newark, Ohio 43055, on Monday, April 27, 2020, at 2:00 p.m., Eastern Daylight Saving Time, and to vote all of the common shares which the shareholder(s) is/are entitled to vote at such Annual Meeting. Where a choice is indicated, the common shares represented by this proxy card, when properly executed and returned, will be voted or not voted as specified. If no choice is indicated, the common shares represented by this proxy card will be voted, to the extent permitted by applicable law, "FOR" the election of the nominees listed in Item 1 as directors of the Company and "FOR" each of the proposals under Items 2 and 3. If any other matters are properly brought before the Annual Meeting, or if a nominee for election as a director named in the Proxy Statement who would have otherwise received the required number of votes to which such shareholder is unableentitled, or to servedistribute such number of votes on the same principle among two or for goodmore candidates, as he sees fit.
Amendment to Section 2.04 Section 2.04. Removal. A director or directors All the directors, all the directors of a particular class, or any individual director may be removed from office, with or without assigning any cause, will not serve,only by the common shares represented by this proxy card will be voted in the discretionvote of the individuals designatedholders of shares entitling them to voteexercise not less than a majority of the common shares represented by this proxy card,voting power entitling them of the corporation to elect directors in place of those to be removed,;provided that unless all the extent permitted by applicable law, on such mattersdirectors, or for such substitute nominee(s) asall the directors of a particular class (if the directors of the Company may recommend.
If commoncorporation are divided into classes), are removed, no individual director shall be removed in case the votes of a sufficient number of shares are allocated to the accountcast against his removal that, if cumulatively voted at an election of all directors, or all directors of a shareholder underparticular class, as the Park National Corporation Employees' Stock Ownership Plan (the "KSOP"), thencase may be, would be sufficient to elect at least one director.except that if the shareholder hereby directs the Trusteecorporation is an issuing public corporation as that term is defined in Section 1701.01 of the KSOP to vote allOhio Revised Code (or any successor or replacement statute) and the directors of the common sharescorporation are classified pursuant to Section 1701.57 of the Company allocated toOhio Revised Code (or any successor or replacement statute), the shareholders may effect that removal only for cause. In case of any such account under the KSOP in accordance with the instructions given herein,removal, a new director may be elected at the Company's Annual Meeting, onsame meeting for the matters set forth onunexpired term of each director removed. Failure to elect a director to fill the reverse side. If no instructions are given,unexpired term of any director removed shall be deemed to create a vacancy in the common shares allocated to the shareholder's account under the KSOP will be voted by the Trusteeboard of directors of the KSOP pro rata in accordance with the instructions received from other participants in the KSOP who have voted.corporation.
The shareholder(s) hereby acknowledge(s) receipt of the Notice of the Annual Meeting of Shareholders and the related Proxy Statement for the April 27, 2020 Annual Meeting, as well as the Company’s 2019 Annual Report, together with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
Continued and to be signed and dated on reverse side
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