For these reasons, in addition to those discussed below in the “Executive Compensation Program” section, the Compensation and Stock Option Committee and Board believe that the compensation of the Company’s Named Executive Officers as disclosed in this Proxy Statement is fair and reasonable, and unanimously recommend that the Company’s shareholders vote in favor of Proposal 2, as described below in more detail, to approve, on an advisory basis, the compensation of the Company’s Named Executive Officers as reported in this Proxy Statement.
Stock price performance is typically not a factor in setting annual compensation because the price of the Company’s stock is subject to a variety of factors outside of management’s control, such as historically low trading volumes and high volatility in the stock price.
The Compensation and Stock Option Committee is appointed by the Board to assist the Board in discharging the Board’s responsibilities relating (i) to compensation of the Company’s directors and officers and (ii) to the granting of stock options, restricted stock, and other forms of equity compensation under the Company’s equity compensation plans. The Compensation and Stock Option Committee has overall responsibility for approving and evaluating the director and officer compensation plans, policies, and programs of the Company and for formulating, revising, and administering the Company’s equity compensation plans.
Cash compensation for our executive and non-executive officers is typically reviewed early in each fiscal year as the budget for the coming fiscal year is being finalized and following completion of a review of the Company’s annual financial statements and level of achievement of operating objectives and personal objectives for the prior fiscal year. Equity compensation awards are usually granted in the third quarter of each fiscal year.year; however, in light of the six-year Long-Term Incentive Plan that was adopted in October 2018, the NEO's did not receive any new grants of equity awards during fiscal 2020. The Compensation and Stock Option Committee may, however, review salaries or grant equity or cash compensation awards at other times as a result of new appointments, promotions or for other reasons during the year.
The CEO plays a role in the assessment and recommendation of compensation for the CEO’s direct reports and other officers of the Company, including the CFO, Executive Vice Presidents (“EVPs”), General Counsel, and General Counsel.Senior Vice Presidents ("SVPs"). The Company’s CEO provides information to the Compensation and Stock Option Committee regarding compensation matters generally and, in such instances, helps set the agenda for compensation discussions. The CEO is typically invited to attend general sessions of the Compensation and Stock Option Committee and, depending upon the topic to be discussed, may be invited to attend executive sessions of the Compensation and Stock Option Committee. The Compensation and Stock Option Committee believes that the CEO’s insight into executive performance and compensation is an important factor when discussing and making decisions regarding executive compensation, and therefore the Compensation and Stock Option Committee typically asks the CEO for the CEO’s recommendations on compensation for all of the Company’s executive officers. The CEO is not present during Compensation and Stock Option Committee discussions concerning the CEO’s own compensation and does not play a role in recommendations regarding the CEO’s own compensation.
Other members of management attend meetings and executive sessions upon invitation by the Compensation and Stock Option Committee if and when the Compensation and Stock Option Committee believes their advice and input regarding specific matters before the Compensation and Stock Option Committee would be useful and appropriate.
The Compensation and Stock Option Committee determines base salaries for each executive position based on the value of the individual’s experience, performance, and/or specific skill set. Base salaries are evaluated in the ordinary course of business, but generally not less than once each year at or around the time that the annual budget is approved. For the reasons noted above, theThe Compensation and Stock Option Committee did not use an outside consultant or survey data when determining fiscal year 20182020 base salaries.
The Compensation and Stock Option Committee intends to use long-term incentive compensation as a further means of attracting and retaining qualified and highly talented executive officers with a market competitive compensation program that supplements the base salary and Executive Incentive Plan elements with longer-term incentives provided by stock options and restricted stock. The Compensation and Stock Option Committee also believes that equity-based awards foster an ownership mentality in executives and align the value of a significant component of executive compensation to the value realized by the Company’s shareholders.
Equity awards, historically in the form of options and/or restricted stock awards, are usually granted in the third quarter, unless made in connection with new hires, promotions, or other special circumstances, in which case awards may be made at the time of such event. Approximately, 100% and 85% of the stock options and restricted stock, respectively, granted in fiscal year 20182020 were granted to employees who are not Named Executive Officers. Additional details of each of the 2005, 2008, 2011, and 2017 Plans are below.
No further awards may be issued under the 2005 Plan after August 1, 2015 pursuant to its terms. Currently, 10,275As of March 31, 2020, 2,700 shares subject to stock options remain outstanding under the 2005 Plan.
The 2008 Plan is set to expire pursuant to its terms on August 6, 2018.
2011 Plan
Currently, 460,202As of March 31, 2019, stock option awards for 420,888 shares subject to stock options and 11,866231,117 shares of restricted stock awards remain outstanding under the 2011 Plan. A maximum of 1,500,000 shares of common stock may be issued pursuant to the 2011 Plan. Only shares of common stock, if any, that are actually delivered with respect to an award will be counted against the maximum number of shares that may be issued under the 2011 Plan (regardless of whether the award is denominated in stock or cash). As of March 31, 2020, 45,378 shares of common stock remain available for issuance under the 2011 Plan.
No more than an aggregate of 400,000 shares can be issued to any individual pursuant to restricted stock awards over the duration of the plan, and no employee can be granted options in any calendar year for more than 75,000 shares. No more than 400,000 shares of common stock can be issued pursuant to incentive stock options.
The 2011 Plan is set to expire pursuant to its terms on August 3, 2021.
2017 Stock Incentive Plan
No grants have been madeAs of March 31, 2020, stock option awards for 204,372 shares and 466,468 shares of restricted stock remain outstanding under the 2017 Plan as of the date hereof.Plan. The maximum number of shares of common stock that may be delivered under the 2017 Plan is the aggregate of (i) 850,000 shares of common stock plus (ii) any shares subject to an award granted under the 2005 Plan, 2008 Plan, or 2011 Plan that are forfeited, canceled, terminated, expire, or lapse for any reason without the issuance of shares or pursuant to which shares are forfeited to or reacquired by the Company. Only shares of common stock actually delivered will be counted against the maximum aggregate number of shares permittedissuable under the 2017 Plan, regardless of whether the award is denominated in cash or shares of common stock. Dividends paid in shares and/or dividends paid in cash in connection with outstanding awards will not be counted against the 2017 Plan’s share limitations. Further, (i) shares issued under the 2017 Plan through the settlement, assumption or substitution of outstanding awards granted by another entity or obligations to grant future awards as a condition of or in connection with a merger, acquisition, or similar transaction involving the Company acquiring another entity and (ii) available shares under a shareholder approved plan of an acquired company (adjusted to reflect the transaction) may be used for awards under the 2017 Plan without reducing the maximum number of shares available under the 2017 Plan.
The maximum number of shares that may be issued as incentive stock options under the 2017 Plan is 850,000 shares. The maximum number of shares of common stock that may be issued pursuant to options and SARsstock appreciation rights ("SARs") that are not related to an option granted to any one individual may not exceed the greater of (a) 75,000 shares for grants made during any one calendar year period or (b) 225,000 shares for grants made during any three calendar year period (or, in each case, the equivalent value thereof based on the fair market value per share of stock on the grant date of the award).period. The maximum number of shares of common stock that may be issued pursuant to awards other than options or SARs that are settled in shares of common stock granted to any one individual may not exceed the greater of (a) 75,000 shares for grants made during any one calendar year period or (b) 225,000 shares for grants made during any three calendar year period (or, in each case, the equivalent value thereof based on the fair market value per share of the common stock on the grant date of the award).period. The maximum amountvalue of awards that may be settled in cash that may be granted to any one individual during any one calendar year period shall be $1,000,000 (based(calculating the value of such awards based on the grant date value)value of the Company’s stock), and the maximum number of shares of common stock that may be issued under the 2017 Plan in conjunction with awards other than options and SARs is 500,000 shares. Further, no non-employee director may be granted awards for more than the greater of (a) $250,000 in fair market value of shares of common stock for grants made during any one calendar year period or (b) $750,000 in fair market value of shares of common stock for grants made during any three calendar year period (or, in each case, the equivalent value thereof based on the fair market value per share of common stock on the date of grant of such award);period; provided that any director cash retainer fees or other fees that are settled in shares of common stock will not be subject to the foregoing limitation.
The 2017 Plan is set to expire pursuant to its terms on August 29, 2027.
Long-Term Incentive Program
On February 28,October 15, 2018, the Company granted 24,456 sharesCompensation and Stock Option Committee and the Board approved and adopted a long-term incentive program (the “Long-Term Incentive Program”) that seeks to motivate and reward certain employees and to align management’s interest with shareholders by focusing executives on the achievement of restrictedlong-term results. The program is comprised of four components: service-based stock to the NEOs, certain other key executives and non-employee directors. One-third of theseoptions (“Service Options”), performance-based stock options (“Performance Options”), restricted stock awards (“Restricted Stock”), and performance-based restricted stock awards (“Performance Shares”).
Pursuant to the Long-Term Incentive Program, the Compensation and Stock Option Committee granted 202,800 Service Options, 121,770 Performance Options, 382,994 Restricted Stock and 369,000 Performance Shares under the 2011 Plan and the 2017 Plan to certain employees and executive officers during fiscal 2019. No equity awards were granted to the Named Executive Officers during fiscal 2020.
Performance-Based Awards
Performance Shares
Under the Long-Term Incentive Program, up to 100% of the Performance Shares shall vest, if at all, based on the achievement of two, trailing earnings per share performance targets established by the Compensation and Stock Option Committee that are based on earnings per share (measured at the end of each calendar quarter, commencing with the calendar quarter ending September 30, 2019) for the previous four calendar quarters. The Performance Shares are eligible to vest over a 6.5 year performance period beginning on September 30, 2018 and ending on March 31, 2025, following certification by the Compensation and Stock Option Committee of achievement of applicable performance targets (such period, the “Performance Share Measurement Period”) and subject to each respective employee’s continued employment at the Company through the last day of the quarter in which the performance targets are met. For certain NEOs, the Performance Shares are also subject to vesting in accordance with the terms of their employment agreement. See “Executive Compensation - Employment Agreements,” for additional information.
| | | | | | | | |
Trailing 4 Quarter EPS Targets | | Restricted Stock Eligible for Vesting (Percentage of Award) |
$16.35 | | 40.0% |
$20.45 | | 60.0% |
Performance Options
The Performance Options shall fully vest if the Company attains the four quarter trailing earnings per share target over four consecutive calendar quarters occurring between September 30, 2018 and March 31, 2025 in the table below. Such performance target was established by the Compensation and Stock Option Committee and will be measured at the end of each calendar quarter commencing on September 30, 2019. The Performance Options are eligible to vest if the performance target is met at the end of any quarter during the 6.5 year performance period beginning on September 30, 2018 and ending on March 31, 2025, following certification by the Compensation and Stock Option Committee of achievement of the performance target (such period, the “Option Measurement Period”), subject to each respective employee’s continued employment at the Company through the last day of the quarter in which the performance target was met. The Performance Options may also vest pursuant to the terms of the applicable award agreement or applicable employment agreement. The option price is equal to the fair market value of the common stock on the grant date and the Performance Options shall have a 10-year term.
| | | | | | | | |
Trailing 4 Quarter EPS Target | | Options Eligible for Vesting (Percentage of Award) |
$25.30 | | 100% |
Service-Based Awards
Restricted Stock
The Restricted Stock awards will vest on October 1, 2018, October 1, 2019, and October 1, 2020 contingentin six equal annual installments, beginning on the recipient’s continued service with the Company on such respective vesting dates. During fiscal 2018, the Company granted non-qualified stock options for 58,070 shares of common stock to other non-executive employees with an average exercise price of $83.33. One-third of these awards will become exercisable on eachfirst anniversary of the grant date, contingentsubject to each respective employee’s continued employment at the Company through each applicable vesting date or otherwise provided under the terms of the applicable award agreement or applicable employment agreement.
Service Options
The Service Options will vest in six equal annual installments, beginning on the recipient’sfirst anniversary of the grant date, subject to each respective employee’s continued service withemployment at the Company through each applicable vesting date or otherwise provided under the terms of the applicable award agreement or applicable employment agreement. The option price is equal to the fair market value of the common stock on such respective exercise date.the grant date and the Service Options shall have a 10-year term.
Fiscal 2019 - Fiscal 2025 Long-Term Incentive Plan Equity Awards
The number of Performance Shares, Restricted Stock and Performance Options awarded to our Named Executive Officers during fiscal 2019 are set forth below. As of March 31, 2020, the Company has not attained the earnings per share targets set for Performance Options or Performance Shares. Our Named Executive Officers did not receive Service Options.
| | | | | | | | | | | |
Name | Number of Performance Shares | Number of shares of Restricted Stock | Number of Performance Options |
R. Chad Prashad | 78,000 | 78,000 | 25,740 |
John L. Calmes, Jr. | 45,000 | 45,000 | 14,850 |
D. Clinton Dyer | 45,000 | 45,000 | 14,850 |
Luke J. Umstetter | 30,000 | 30,000 | 9,900 |
A. Lindsay Caulder | 18,000 | 18,000 | 5,940 |
Approximately 50% of the accounting expense related to the Long-Term Incentive Program is due to the Performance Shares and Performance Options.
Post-Employment Compensation
Compensation and Stock Option Committee Philosophy
The Compensation and Stock Option Committee believes that providing supplemental retirement income to key executives under the Company’s supplemental executive retirement plans is appropriate to recognize service to the Company and the limitations on an executive’s ability to ensure significant retirement income through the Company’s 401(k) retirement plan due to the contribution limitations applicable to such plans under applicable law. Severance compensation is also provided under employment agreements with certain executive officers (see “Executive Compensation-EmploymentCompensation - Employment Agreements” below) to attract and retain critical executive talent and to facilitate management stability and provide executives protection in the event of their termination without cause or constructive discharge, including in situations involving a change in control of the Company.
Supplemental Executive Retirement Plans
The Company has established the World Acceptance Corporation 2005 Supplemental Income Plan (the “2005 Supplemental Income Plan”SIP”). Based on the CEO’s recommendations, the Compensation and Stock Option Committee approves the key executives who participate in the plan. The 2005 Supplemental Income PlanSIP is an unfunded plan, which means there are no specific assets set aside by the Company to fund its obligations under the plan. The participating executives have no rights under the plan beyond those of a general creditor of the Company. Generally, if a participant terminates employment after reaching normal retirement age (age 65), the participant is entitled to receive a monthly benefit equal to 45% of his or her base salary at the time of his or her retirement for a period of 15 years. A participant is eligible for an early retirement benefit if the participant terminates employment after reaching age 57, provided that he or she has participated in the plan for at least eight years. The early retirement benefit is a pro-rated portion of the normal retirement benefit, based on the days of service the participant has accrued at his or her early retirement date compared to the days of service that he or she would have accrued if he or she had continued employment until normal retirement age. If a participant dies while still employed by the Company or while receiving Company-sponsored long-term disability benefits, the participant is eligible to receive the normal retirement benefit regardless of age. If the Company terminates a participant (other than for malfeasance, dishonesty, or similar wrongdoing) or the participant terminates employment due to disability, the participant will receive a normal or early retirement benefit (depending on whether termination occurs before or after normal retirement age), as the age 57 and eight years of participation requirements for early retirement benefits do not apply in such circumstances. If a participant voluntarily terminates employment before qualifying for early or normal retirement or if the participant is terminated due to malfeasance, dishonesty, or other similar wrongdoing, the participant is not entitled to any benefits under the plan.
In connection with the termination of the Executive Incentive Plan and corresponding base salary adjustments that took effect as of April 1, 2019, the Company approved the First Amendment (the “Amendment”) to the 2005 SIP. The Amendment provides that the base salaries of the Named Executive Officers shall be adjusted by a salary adjustment factor to determine the Named Executive Officers’ benefits under the 2005 SIP. The salary adjustment factor for each of the Named Executive Officers that is a participant in the 2005 SIP is below:
| | | | | |
R. Chad Prashad | 0.50 |
John L. Calmes, Jr. | 0.56 |
D. Clinton Dyer | 0.56 |
The Company determined that the base salary used to determine benefits under the 2005 SIP should not be based on the adjusted fiscal 2019 base salaries. The Company believes that the revisions to incorporate the salary adjustment factor will decrease the named executive officer’s benefit under the 2005 SIP, which should cause the benefit to be more consistent with historical amounts.
There are currently 1617 participants in the 2005 Supplemental Income Plan,SIP, including threefour executive officers, 12 retired participants, and the beneficiary of one deceased participant. All of the NEOs, except Mr. Wanserski, the Company’s former interim PresidentUmstetter and Chief Executive Officer, and Mr. PrashadMs. Caulder participate in the 2005 Supplemental Income Plan. However, as previously disclosed, subject to the approval of the Company’s Board of Directors, Mr. Prashad will become a participant in the Company’s 2005 Supplemental Income Plan in the future.SIP.
Severance Compensation under Employment Agreements
As described below under “Executive Compensation - Employment Agreements,” certain NEOs have employment agreements or separation agreements pursuant to which they are entitled to severance payments and benefits upon termination of employment under certain circumstances.
Other Employee Benefits and Perquisites:
In order to provide competitive compensation and benefits to its executives, the Company provides the following benefits and perquisites:
•Life and Disability Insurance.Insurance. The Company provides each NEO the same group long-term disability and life insurance as the Company in its sole discretion may from time to time provide to its other officers and
employees. As described below under “Executive Compensation - Employment Agreements,” the Company has entered into employment agreements with certain NEOs that require the Company to provide specified minimum levels of long-term disability insurance coverage. In addition, if the individual becomes disabled, the Company will provide short‑termshort-term disability benefits in the form of continued payment of his or her base salary for up to 90 days.
•Deferred Compensation.Compensation. The Company maintains for its executives a non-qualified deferred compensation plan, the World Acceptance Corporation 2005 Executive Deferral Plan.Plan (the “2005 Executive Deferral Plan”). No NEOs currently participate in this plan, and the plan is unfunded. The plan permits participants in the Executive Incentive Plan to defer payment of all or a portion of any bonus earned under the Executive Incentive Plan. The plan does not provide for any Company contributions of any kind.
•Defined Contribution Plan.Plan. NEOs are eligible to participate in the Company’s 401(k) retirement plan. The 401(k) plan permits eligible employees to defer up to 15% of their annual eligible compensation, subject to certain limitations imposed by the Code. Employee elective deferral contributions are immediately vested and non‑forfeitable.non-forfeitable. The Company makes a matching contribution equal to 50% of an employee’s elective deferral contributions not exceeding 6% of the employee’s annual eligible compensation. Matching contributions vest over a six-year period.
•Company Car.Car. The Company provides each NEO and each of its other officer-level employees the unrestricted use of a Company car at no expense to the officer.
Other.•Other. The Company makes available certain perquisites or fringe benefits to executive officers and other employees, such as professional society dues, club dues, food, and recreational fees incidental to official Company functions. See “
Executive Compensation - Fiscal Year 2020 Components of All Other Compensation.”Tax Considerations
For tax years prior to January 1, 2018, Code Section 162(m) generally allowed the deduction of certain compensation paid to certain executives under the Code Section 162(m) qualified “performance-based compensation” exemption. For taxable years beginning January 1, 2018, the qualified “performance-based compensation” exemption is no longer available, except in limited situations that are eligible for transition relief. Going forward, theThe Company will therefore not beis no longer eligible to take a full deduction under Code Section 162(m) for qualified “performance-based compensation,” except in limited grandfathered situations. The Compensation and Stock Option Committee may modify compensation that was initially intended to be exempt from Code Section 162(m), to the extent permitted by applicable law and the relevant governing documents, as well as its mix of compensation elements if it determines that such modifications are consistent with the Company's business needs. However, historically, the total annual compensation of each
During fiscal year 2020, a portion of the Company’s executive officers, including the CEO, has been less than $1,000,000, so the effects of Code Section 162(m) have not been a significant consideration in determining the Company's executive compensation.
During our fiscal year 2018, alltaxable compensation paid to our NEOs was in excess of the limits imposed by Section 162(m) and thus was not deductible by the Company for federal income tax purposes. For fiscal 2019,future years, the Company believesexpects that the majoritya portion of the compensation paid to Named Executive OfficersNEOs will not be deductible. However, assumingAssuming the Company’s stock price remains stable or increases, a portion of the NEO compensation related to vesting of restricted stock and the possible exercise of non-qualified stock options may cause a portion of the executive compensation towill be non-deductible for federal income tax purposes.
Compensation Policies and Risk Management
On an ongoing basis, the Compensation and Stock Option Committee monitors the Company’s executive compensation programs for potential risks as part of the overall risk oversight function of the Board of Directors. See above under “Corporate Governance-BoardGovernance - Board Risk Oversight” and “Corporate Governance-CommitteesGovernance - Committees of the Board -Compensation
and Stock Option Committee.” The Compensation and Stock Option Committee does not believe that the Company’s executive compensation programs encourage excessive or inappropriate risk taking.
Say-on-Pay
The Company provides its shareholders with the opportunity to cast an annual advisory vote, commonly known as a “say‑on‑pay”“say-on-pay” proposal, on the compensation of the executive officers named in the Summary Compensation Table of the annual proxy statement. At our 20172019 annual meeting of shareholders, our NEO compensation was approved
by over 94%77% of the votes cast. The Compensation and Stock Option Committee believes that this vote affirms that a majority of our shareholders support the Company’s historical approach to executive compensation, and accordingly the Compensation and Stock Option Committee did not make substantial changes to the structure of the Company’s executive compensation program in fiscal year 2018.compensation.
Anti-Hedging and Anti-Pledging Policies
The Company maintains an Insider Trading Policy. Pursuant to this policy, directors, officers, and employees of the Company are generally prohibited from engaging in hedging activities, including through the use of financial instruments such as prepaid variable forwards, equity swamps,swaps, collars, and exchange funds. Further, directors, officers, and other employees must obtain pre-clearance from the Company’s Chief Financial and Strategy Officer before placing Company securities in a margin account or otherwise pledging Company securities as collateral for a loan. Pre-clearance generally will be granted when the director, officer, or employee demonstrates the ability to repay the obligation with assets other than the pledged Company securities.
Clawback Policy
The World Acceptance Corporation Clawback Policy (the “Clawback Policy”) applies to certain individuals, which include all of the Named Executive Officers, the Company’s other executive officers and certain other senior officers. The Board (or the Compensation and Stock Option Committee, if designated by the Board) has discretion to apply the Clawback Policy to the covered individuals in a number of circumstances involving specific types of misconduct, such as a violation of noncompetition or other restrictive covenants, material violation of Company policies, violation of law that is detrimental to the Company, unauthorized disclosure or use of the Company's confidential information, any indictment, conviction, or entering of a plea of any type for a crime constituting a felony or a misdemeanor involving moral turpitude, failure to cooperate with any litigation or investigation involving the Company, or any other illicit or unauthorized act or omission that is detrimental to the Company. The Board (or the Compensation and Stock Option Committee, if designated by the Board) may take any or all of the following actions with respect to the individual: (a) requiring reimbursement of cash-based incentive compensation and/or equity-based incentive compensation that was previously granted, awarded, earned, or received during the period covered by the Clawback Policy; (b) seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based incentive compensation; (c) offsetting the recouped amount from any compensation otherwise owed by the Company; (d) cancelling outstanding vested, unvested, or unexercised equity-based incentive compensation; (e) requiring repayment of any amount received by in excess of the amount that the person should otherwise have received for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error); and/or (f) taking any other remedial and recovery action permitted by law, as determined by the Board.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation and Stock Option Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on the review and discussion referred to above, the Compensation and Stock Option Committee recommended to the Board of Directors that the Compensation Discussion and Analysis referred to above be included in this Proxy Statement.
Compensation and Stock Option Committee
Ken R. Bramlett, Jr., ChairmanChair
Scott J. Vassalluzzo
Charles D. Way
EXECUTIVE COMPENSATION
Employment Agreements
The Company has entered into employment agreements with R. Chad Prashad, our President and Chief Executive Officer, John L. Calmes, Jr., our CFO,Executive Vice President and Chief Financial and Strategy Officer, D. Clinton
Dyer, our Executive Vice President and Chief Branch Operations Officer.Officer, and Luke J. Umstetter, our Senior Vice President, Secretary, and General Counsel. The Compensation and Stock Option Committee believes that the employment agreements are necessary to secure the services of these individuals on the terms and conditions stated in the agreements, and to provide management stability should there occur a significant corporate change in control event. As described in greater detail below, these agreements provide for the payment of severance benefits in the event of a change in control, but only if the executive is terminated without cause or constructively discharged within two years following the change in control, and for the payment of certain severance benefits even if no change in control has occurred in the event the executive’s employment is terminated without cause or for good reason. The Compensation and Stock Option Committee believes that the change in control severance triggers in these agreements strike an appropriate balance between Company and shareholder concerns about executive retention in the event of a change in control and the executives’ legitimate concerns regarding termination or diminution of duties in such an event. See below for a description of the Company's employment agreements that are currently in effect.
CalmesPrashad Employment Agreement
On November 19, 2015,April 1, 2019, the Company entered into an employment agreement with Mr. Calmes.Prashad. The employment agreement has an initial three-year term commencing on October 15, 2018, after which it will automatically renew for successive one-year terms unless either party provides notice of intent to terminate at least 90 days prior to expiration of the then current term. Under the employment agreement, Mr. CalmesPrashad is entitled to an annual base salary of not less than $225,000,$840,000, subject to any increasesadjustments approved by the Compensation and Stock Option Committee. His annual base salary may not be reduced.reduced below $420,000. Under the employment agreement, Mr. CalmesPrashad is generally eligible to participate in the Company’s annual and long-term incentive compensation plans established by the Compensation and Stock Option Committee from time to time. The employment agreement requires the Company to provide long-term disability insurance that will provide disability benefits equal to 60% of Mr. Calmes’ base salary, and Mr. Calmes is entitled to participate in the Company’s Second Amended and Restated 2005 Supplemental Income Plan (described further above under “- Executive Compensation Program-Post-Employment Compensation”).$252,000. Under the employment agreement, the Company provides Mr. CalmesPrashad with an automobile (including maintenance, insurance, and insurance)fuel) at Companythe Company's expense, and he is eligible to participate in other compensation and benefits programs and arrangements for which salaried employees of the Company are generally eligible.
The employment agreement provides for the following payments to Mr. CalmesPrashad in the event of termination of his employment:
•If the Company terminates Mr. Calmes’Prashad’s employment without cause or if Mr. CalmesPrashad terminates his employment for “good reason,” (a) he will receive payment for his accrued base salary, vacation pay, expenses, and annual bonus for the prior fiscal year, if such annual bonus has not already been paid,expenses, as well as any vested benefits due under any Company benefit plans or programs; (b) he will receive severance pay in an amount equal to twice$1,260,000; (c) the following awards will vest as of his base salarytermination date (or the date of Committee certification in effect immediately prior to his termination; (c) histhe case of (iii) below): (i) stock options and other equity incentive awards will(excluding awards granted under the Long-Term Incentive Program) with purely time-based vesting; (ii) awards granted under the Long-Term Incentive Program with purely time-based vesting that are scheduled to vest within the LTIP Year (as defined in his employment agreement) in which termination of employment occurs; and become exercisable in accordance with(iii) the termspro-rata portion (based upon the time period from October 1, 2018 until the termination date) of his purely performance-based awards granted under the Long-Term Incentive Program that are scheduled to vest within 180 days after the date of termination and for which the Compensation and Stock Option Committee certifies that the applicable plansperformance metrics were achieved within such 180-day period; and award documents, provided that all purely time‑based-vesting awards will fully vest as of the termination date and no portion of any award subject to performance-based vesting will vest pursuant to the employment agreement; (d) he will receive a lump sum payment equal to the total premiums he would be expected to pay for eighteen (18) months of COBRA coverage;coverage. Stock options (both time-based and (e) heperformance-based) that are vested on Mr. Prashad’s termination date will receive a prorated annual incentive plan paymentbe exercisable for one year following the yeartermination date, or until their expiration date if shorter; however, any purely performance-based stock options that vested during the 180-days following termination as described in which his termination(iii) above will be exercisable for 18 months following the date of employment occurs.Mr. Prashad’s termination.
•If the Company terminates Mr. Calmes’Prashad’s employment for cause or he terminates his employment without good reason (including by giving notice that he will not extend the term of the employment agreement), he
will only receive his accrued compensation through the termination date and any vested benefits due to him under Company plans or programs.
•If Mr. Calmes’Prashad’s employment is terminated by the Company without cause or by Mr. CalmesPrashad with good reason within two (2) years offollowing a change in control of the Company (as defined in the employment agreement), the Company will make a lump sum payment to Mr. CalmesPrashad equal to the sum of (a) his accrued compensation prior to termination; (b) an amount equal to the total premiums he would be expected to pay for eighteen (18) months of COBRA coverage; and (c) a pro-rata annual incentive for the fiscal year in which the termination occurs; and (d) twice his highest base salary between the day before the change in control and the effective date of his termination.an amount equal to $1,260,000. In addition, his stock options and other incentive awards will vest and become exercisable in accordance with the terms of the applicable plans and award documents.documents; provided that all vested stock options will be exercisable for a period of one year (or until the end of the original option term, if shorter).
•If Mr. Calmes’Prashad’s employment is terminated due to his disability, the Company will continue to pay his base salary in effect at the time of termination forhim $420,000 over a period of 24 months but only at such times as he is not receiving benefits under the disability insurance provided by the Company. In addition, he will be entitled to receive (a) all compensation accrued through the date of termination; and (b) vested benefits due under the Company’s benefit plans; and (c) a prorated annual incentive plan payment.plans.
•If Mr. Calmes’Prashad’s employment is terminated due to his death, the Company will be obligated to pay his estate (a) all compensation accrued through the date of termination; and (b) any vested amounts due under the Company’s benefit plans; and (c) a prorated annual incentive plan payment.plans.
Under the employment agreement, “cause” generally means Mr. Calmes’Prashad’s (a) gross misconduct or gross neglect in respect of his duties for the Company; (b) conviction of (or plea of nolo contendere to) a felony or of a misdemeanor where active imprisonment is imposed; (c) knowing and intentional failure to comply with applicable laws with respect to the execution of the Company’s business operations; (d) falsification of Company records or engaging in theft, fraud, embezzlement, dishonesty, or other conduct that has resulted or is likely to result in material damage to the Company’s or any of its affiliates’ business or reputation; (e) failure to comply with reasonable written directives of the Board, which is not remedied within thirty (30) days after receipt of written notice specifying such failure; (f) the willful and material violation of the Company’s policies, including its Code of Ethics; and (g) the willful failure to reasonably cooperate with any investigation authorized by the Board, which failure would reasonably be expected to have a material adverse effect on the Company.
Under the employment agreement, “good reason” generally means: (a) a material diminutionreduction in Mr. Calmes’Prashad’s base salary;salary below $420,000; (b) a material diminution in his authority, duties or responsibilities; (c) a material diminution in the budget over which he retains authority; (d) requiring him to relocate his principal place of employment more than thirty-five (35) miles from the Company’s present headquarters; (e) a material breach of the agreement by the Company; or (f) the failure of the Company to renew the agreement.
Under the employment agreement, “change in control” generally means any of the following events:
(a) The consummation of (i) a merger, share exchange, or similar transaction involving the Company or any subsidiary, but only if Company voting securities are issued or issuable; or (ii) the sale or other disposition of all or substantially all of the assets of the Company, unless, in either case, immediately after the transaction (A) the beneficial owners of the Company’s voting securities continue to own more than seventy percent (70%) of the voting power of the voting securities of the surviving company in substantially the same proportions as their ownership of the Company’s voting securities prior to the transaction; (B) no person (excluding any employee benefit plan sponsored by the surviving company or any company controlled by the surviving company) owns thirty-five percent (35%) or more of the combined voting power of the voting securities of the surviving company; and (C) at least a majority of the members of the board of directors of the surviving company are Incumbent Directors (as defined below);
(b) The shareholders of the Company approve a plan of complete liquidation or dissolution of the Company, unless such liquidation or dissolution is part of a sale of the Company’s assets that does not constitute a change in control;
(c) if (i) any person acquires ownership of, or voting control over, twenty percent (20%) or more of the Company’s outstanding stock, in a single transaction or in a series of transactions occurring within a twelve-month period (an “Acquiring Person”); provided that no person may become an Acquiring Person on account of: (A) any acquisition of stock by the Company or any subsidiary; (B) any acquisition of stock by an underwriter temporarily holding such securities pursuant to a securities offering; (C) any acquisition of stock by any employee benefit plan sponsored by the Company or any subsidiary; and (D) any acquisition of stock related to a merger, share exchange, or similar transaction that that does not otherwise constitute a change in control; and (ii) a majority of the members of the Board of Directors are or become individuals who are (A) the Acquiring Person; (B) affiliates of the Acquiring Person; and/or (C) individuals whose initial assumption of office as a director occurs as a result of (I) an actual or threatened election contest or solicitation of proxies by or on behalf of the Acquiring Person or (II) the recommendation or request of the Acquiring Person or any member of the Board who is an affiliate of the Acquiring Person; or
(d) During any period of twenty-four (24) consecutive months, individuals who were members of the Board of Directors at the beginning of such period (the “Incumbent Directors”) at any time during such period cease to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director during such period whose appointment, election or nomination was approved by a vote of at least a majority of the existing Incumbent Directors shall be considered as an Incumbent Director (excluding, however, any such individual who became a director as a result of an actual or threatened election contest or solicitation of proxies by or on behalf of a person other than the Board of Directors).
The employment agreement requires Mr. CalmesPrashad to execute a release of legal claims against the Company in order to receive any of the severance benefits provided by the employment agreement. The employment agreement also restricts Mr. CalmesPrashad from engaging in certain acts of competition with the Company and from soliciting the Company’s employees or inducing them to leave their employment with the Company during the term of the employment agreement and for a period of two years after the termination of his employment. He has also agreed to confidentiality and non-disparagement obligations that the Company believes are customary. Further, the employment agreement contains clawback and forfeiture provisions, which are in addition to any rights available to the Company included in the Company’s recently adopted clawback policy or similar provisions that may apply under applicable laws, rules or regulations.
Calmes Employment Agreement
On April 1, 2019, the Company entered into an employment agreement with Mr. Calmes. The employment agreement has an initial three-year term commencing on October 15, 2018, after which it automatically renews for successive one-year terms unless either party provides notice of intent to terminate at least 90 days prior to expiration of the then current term.
Mr. Calmes’ employment agreement is substantially similar to Mr. Prashad’s employment agreement with respect to compensation and benefits except that Mr. Calmes’ (a) base salary is initially $481,853; (b) annual base salary may not be reduced below $267,696; (c) disability benefits equal $267,696; and (d) severance benefits and change in control payment equal $550,000.
Dyer Employment Agreement
On SeptemberApril 1, 2016,2019, the Company entered into an employment agreement with Mr. Dyer. The employment agreement has an initial three-year term commencing on October 15, 2018, after which it will automatically renewrenews for successive one-year terms unless either party provides notice of intent to terminate at least 90 days prior to expiration of the then current term.
Mr. Dyer’s employment agreement is substantially similar to Mr. Prashad’s employment agreement with respect to compensation and benefits except that Mr. Dyer’s (a) base salary is initially $471,744; (b) annual base salary may not be reduced below $262,080; (c) disability benefits equal $262,080; and (d) severance benefits and change in control payment equal $550,000.
Umstetter Employment Agreement
On April 1, 2019, the Company entered into an employment agreement with Mr. Umstetter. The employment agreement has an initial three-year term commencing on April 1, 2019, after which it automatically renews for successive one-year terms unless either party provides notice of intent to terminate at least 90 days prior to expiration of the then current term. Mr. Dyer’sUmstetter’s employment agreement is substantially similar to Mr. Calmes’Prashad’s employment agreement with respect to compensation and benefits except that Mr. Dyer’sUmstetter’s (a) base salary is initially $240,000.
Prashad Employment Agreement
It is anticipated that Mr. Prashad will enter into an employment agreement with the Company in the near future. In connection with his promotion to President and Chief Executive Officer, the$350,000; (b) annual base salary of Mr. Prashad was increased to $420,000. As previously disclosed, subject to the approval of the Company’s Board of Directors, (i) Mr. Prashad willmay not be entitled to receive a grant of 8,000 shares of restricted stock, which will vest pro rata over three years; (ii) his bonus eligibility will be revised to be a minimum of 25%, threshold of 50%, target of 100%reduced below $250,000; and a max of 150%;(c) disability and (iii) he will become a participantseverance benefits and change in the Company’s 2005 Supplemental Income Plan.
Agreements with Former Executive Officers
Matricciani Separation Agreement
Prior to the termination of Ms. Matricciani’s employment as President and Chief Executive Officer of the Company effective January 22, 2018, the Company and Ms. Matricciani were party to a three-year employment agreement, effective November 19, 2015. Ms. Matricciani’s employment agreement was substantially similar to Mr. Calmes’ employment agreement with respect to compensation and benefits except with regards to (a) her base salary, which was initially set at $500,000, and (b) severance payments to be made in connection with her termination of employment following a change of control of the Company.
In connection with the termination of Ms. Matricciani’s employment, the Company and Ms. Matricciani entered into a separation agreement effective January 22, 2018. The Company and Ms. Matricciani agreed that her termination would be treated as a termination by the Company without cause (other than in connection with a change of control) for purposes under her employment agreement and related equity award agreements with the Company. Under the separation agreement, Ms. Matricciani is entitled to receive (a) a lump sum payment equal to $42,400 for accrued base salary and accrued vacation through the termination date; (b) a lump sum payment equal to $31,020 for 19 months of COBRA premiums; (c) $793,728 of vested accrued benefits under the Company’s 2005 Supplemental Income Plan; and (d) $1,596,650 in severance payments, representing two (2) times the sum of (i) Ms. Matricciani’s current base salary plus (ii) the average annual bonus paid to Ms. Matricciani during the period of her employment in respect of the three fiscal years prior to termination, payable in 24 equal monthly installments. In addition, certain equity awards that were previously granted to Ms. Matricciani vested and became exercisable in accordance with the terms of Ms. Matricciani’s employment agreement with the Company and the applicable plans and award agreements. Ms. Matricciani also was eligible to receive a pro rata bonus payment for the 2018 fiscal year, provided the Company met the corporate goals established by the Board. The separation agreement included customary waiver and release provisions in favor of the Company, as well as non-competition, confidentiality, and non-disparagement covenants. In addition, certain payments and benefits due to Ms. Matricciani under the separation agreement are subject to recovery by the Company upon the occurrence of certain specified events.$250,000.
Services Agreement
In connection with the appointment of James H. Wanserski as interim President and Chief Executive Officer of the Company, the Company entered into a Services Agreement, effective January 22, 2018, with Mr. Wanserski and W&A. Under the terms of the Services Agreement, W&A received a monthly fee in the amount of $40,000, in addition to reimbursement from the Company for all reasonable out-of-pocket expenses, including costs of travel, temporary housing and lodging expenses, legal counsel, and any applicable sales or excise tax and other direct expenses. The Services Agreement had no specified term and was terminable by either party as of the end of any month upon at least ten (10) days prior written notice to the other party. The Services Agreement and Mr. Wanserski's service as interim President and Chief Executive Officer, was terminated effective June 27, 2018. Pursuant to the terms of the Services Agreement, W&A will receive the monthly fee described above through July 31, 2018. Mr. Wanserski has agreed to provide consulting services to the Company through July 31, 2018. Under the terms of the Services Agreement, the Company is also required to indemnify Mr. Wanserski and W&A to the fullest extent permitted by South Carolina law for losses arising out of or in connection with the engagement.
20182020 Summary Compensation Table
The following table includes information concerning compensation for each of the three full fiscal years ended March 31, 2018, 20172020, 2019, and 20162018 for the Company’s named executive officers, or NEOs,Named Executive Officers, including the current and former CEOs,CEO, the CFO, and the three other most highly compensated executive officers of the Company who were serving as such as of March 31, 2020.
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Name and Principal Position | Year | Salary ($) (1) | Bonus ($) (2) | Stock Awards ($) (3) | Option Awards ($) (3) | Non-Equity Incentive Plan Compensation ($) (4) | Change in Pension Value and Non- qualified Deferred Compensation Earnings ($) (5) | All Other Compensation ($) (6) | Total ($) |
R Chad Prashad (7) | 2020 | 840,000 | — | — | — | — | 61,187 | 30,995 | 932,182 |
President and Chief Executive Officer | 2019 | 370,022 | — | 16,669,320 | 1,363,891 | 325,500 | 244,749 | 32,466 | 19,005,948 |
| 2018 | 195,879 | — | 389,330 | — | 92,714 | — | 19,307 | 697,230 |
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John L. Calmes, Jr. | 2020 | 482,818 | — | — | — | — | 39,552 | 27,134 | 549,504 |
Executive Vice President and Chief Financial and Strategy Officer | 2019 | 259,776 | — | 9,071,100 | 786,860 | 165,972 | 43,548 | 32,387 | 10,359,643 |
| 2018 | 251,550 | — | — | — | 251,434 | 46,662 | 26,777 | 576,423 |
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D. Clinton Dyer | 2020 | 471,744 | — | — | — | — | 36,145 | 33,687 | 541,576 |
Executive Vice President and Chief Branch Operations Officer | 2019 | 254,326 | — | 9,071,100 | 786,860 | 162,490 | 50,173 | 27,341 | 10,352,290 |
| 2018 | 249,000 | — | 486,743 | — | 246,159 | 50,989 | 19,808 | 1,052,699 |
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Luke J. Umstetter (8) | 2020 | 350,000 | — | — | — | — | — | 20,830 | 370,830 |
Senior Vice President, General Counsel, and Secretary | 2019 | 189,423 | 50,000 | 6,097,297 | 524,573 | 77,500 | — | 7,274 | 6,946,067 |
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A. Lindsay Caulder (9) | 2020 | 301,000 | — | — | — | — | — | 26,968 | 327,968 |
Senior Vice President – Human Resources | | | | | | | | | |
(1)The amounts represent base salaries earned during the fiscal year.
(2)Mr. Umstetter received a $50,000 sign-on bonus in connection with his appointment as Senior Vice President, Secretary, and General Counsel in August 2018.
(3)The amounts in these columns reflect the aggregate grant date fair value determined in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 12 in the Notes to Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended March 31, 2020.
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Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non- qualified Deferred Compensation Earnings | All Other Compensation | Total |
| | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
| | (1) | (2) | (3) | (3) | (4) | (5) | (6) | |
Janet Lewis Matricciani (7) | 2018 | 451,533 | — | — | — | 408,807 | 155,084 | 2,378,140 | 3,393,564 |
Former President and Chief Executive Officer | 2017 | 515,000 | — | 751,100 | — | 325,000 | 128,815 | 31,656 | 1,751,571 |
| 2016 | 436,667 | 400,000 | 404,100 | — | 100,000 | 153,543 | 23,879 | 1,518,189 |
| | | | | | | | | |
James H. Wanserski (8) | 2018 | 90,667 | — | — | — | — | — | 9,135 | 99,802 |
Former Interim President and Chief Executive Officer | | | | | | | | |
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John L. Calmes, Jr. | 2018 | 251,550 | — | — | — | 251,434 | 46,662 | 26,777 | 576,423 |
Senior Vice President and Chief Financial Officer | 2017 | 231,750 | — | 375,550 | — | 117,000 | 35,052 | 28,977 | 788,329 |
| 2016 | 212,040 | 144,000 | 202,050 | — | 36,000 | 63,443 | 30,095 | 687,628 |
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D. Clinton Dyer (7) | 2018 | 249,000 | — | 486,743 | — | 246,159 | 50,989 | 19,808 | 1,052,699 |
Executive Vice President and Chief Branch Operations Officer | 2017 | 223,333 | — | 375,550 | — | 120,000 | 92,266 | 59,051 | 870,200 |
| 2016 | 189,395 | 42,667 | 101,025 | | 88,000 | 94,301 | 20,138 | 535,526 |
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R Chad Prashad (9) | 2018 | 195,879 | — | 389,330 | — | 92,714 | — | 19,307 | 697,230 |
President and Chief Executive Officer (former Senior Vice President and Chief Strategy and Analytics Officer) | | | | | | | | |
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Jeff L. Tinney (10) | 2018 | 191,223 | — | 233,856 | — | 125,696 | 20,384 | 9,531 | 580,690 |
Senior Vice President– Western Division | 2017 | 190,286 | — | 188,161 | — | 66,650 | 31,976 | 9,124 | 486,197 |
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(1) | See “Compensation Discussion and Analysis-Executive Compensation Program -Base Salary” above regarding base salary adjustments for fiscal year 2018. |
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(2) | Retention bonuses were paid in fiscal year 2016 to Ms. Matricciani, Mr. Calmes, and Mr. Dyer. One-third of these bonus amounts were paid on March 31, 2016 and the remaining two-thirds of these bonus amounts were paid on March 31, 2017. |
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(3) | The amounts in these columns reflect the aggregate grant date fair value determined in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 12 in the Notes to Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended March 31, 2018. |
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(4) | (4)This compensation was earned under the Company’s Executive Incentive Plan, which was earned under the Company’s Executive Incentive Plan, as described further above under “Compensation Discussion and Analysis-Executive Compensation Program-Annual Cash Bonuses” and is generally based on the Company’s achievement of pre-established annual goals related to increases in earnings per share, growth in receivables, expense control and loan charge-off control. As described above, the Executive Incentive Plan provides discretion for the Compensation and Stock Option Committee to pay a minimum bonus under the plan |
in the event of unusual circumstances if a threshold performance measure is not achieved for a fiscal year, and the Compensation and Stock Option Committee elected to pay such a minimum bonus with respect to the earnings per share, goalgrowth in receivables, expense control, and loan charge-off control. The Company terminated the Executive Incentive Program, effective as of April 1, 2019.
(5)These amounts consist of the increase in the present value of the accumulated benefit at retirement of the NEO’s benefit under the 2005 SIP. As noted above, the Company maintains the 2005 Executive Deferral Plan, but currently no NEOs participate in this plan.
(6)Amounts in this column represent perquisites or personal benefits provided to the NEOs by the Company. Components of All Other Compensation in fiscal year 2016 which is reported under2020 are further described in a separate table below.
(7)Mr. Prashad was appointed President and Chief Executive Officer of the Bonus column. The amount shown for Ms. Matricciani represents theCompany effective June 27, 2018. In connection with his promotion to President and Chief Executive Officer, Mr. Prashad was granted 8,000 shares of restricted stock that vest pro rata portion of her annual incentive award under the Company's Executive Incentive Plan based on her terminationJune 27, 2019, June 27, 2020, and June 27, 2021.
(8)Mr. Umstetter was appointed Senior Vice President, General Counsel, and Secretary effective January 22,August 27, 2018. In regards toconnection with his appointment, he was granted 426 shares of restricted stock that vest pro rata on September 4, 2019, September 4, 2020, and September 4, 2021. Mr. Tinney, the amount includes bonus paid for divisional performance.Umstetter was not an NEO during fiscal year 2018.
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(5) | These amounts consist of the increase in the present value of the accumulated benefit at retirement of the NEO’s benefit under the 2005 Company’s Supplemental Income Plan. As noted above, the Company maintains a nonqualified deferred compensation plan, but no NEOs are currently participating in the plan. |
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(6) | Amounts in this column represent perquisites or personal benefits provided to the NEOs by the Company. Components of All Other Compensation in fiscal year 2018 are further described in a separate table below. |
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(7) | Ms. Matricciani was terminated as CEO effective as of January 22, 2018. |
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(8) | Mr. Wanserski was appointed interim President and Chief Executive Officer effective as of January 22, 2018 and was terminated effective as of June 27, 2018. Mr. Wanserski was not a NEO during fiscal years 2017 or 2016. Mr. Wanserski was compensated through W&A, which was paid a monthly fee of $40,000 and reimbursed for reasonable out-of-pocket expenses, including costs of travel and temporary housing and lodging expenses. Mr. Wanserski did not participate in any of the Company's incentive or other compensation plans. |
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(9) | Mr. Prashad was not a NEO during fiscal years 2017 or 2016. Mr. Prashad was appointed as President and Chief Executive Officer of the Company effective June 27, 2018. |
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(10) | Mr. Tinney was not a NEO during fiscal year 2016. |
(9)Ms. Caulder was not an NEO during fiscal years 2018 or 2019.
Fiscal Year 20182020 Components of All Other Compensation
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Benefits and Perquisites | Matricciani | | Wanserski | | Calmes | | Dyer | | Prashad | | Tinney |
Severance payments (1) | 2,345,772 |
| | — |
| | — |
| | — |
| | — |
| | — |
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Company auto (2) | 18,105 |
| | — |
| | 15,610 |
| | 13,190 |
| | 13,986 |
| | 1,445 |
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Company contributions to 401(k) Plan | 12,293 |
| | — |
| | 10,718 |
| | 6,158 |
| | 4,956 |
| | 7,719 |
|
Term life insurance premiums | 480 |
| | — |
| | 449 |
| | 460 |
| | 365 |
| | 367 |
|
Club dues | 1,490 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Temporary housing and travel | — |
| | 9,135 |
| | — |
| | — |
| | — |
| | — |
|
Total | 2,378,140 |
| | 9,135 |
| | 26,777 |
| | 19,808 |
| | 19,307 |
| | 9,531 |
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(1) | For Ms. Matricciani, amounts include the following severance amounts paid or accrued in connection with her termination of employment, effective January 22, 2018: (a) a lump sum payment equal to $31,020 for 19 months of COBRA premiums; (b) $1,596,650 in severance payments; (c) $678,609 representing the amount associated with the accelerated vesting of restricted stock awards; (d) $36,579 representing the value of her Company-owned car titled to her; and (e) $2,914 representing the value of a laptop computer, cell phone and iPad provided to her. |
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(2) | Includes the aggregate incremental cost for use of a Company-owned auto (i.e., the annual lease value, fuel, maintenance, taxes, and insurance related to usage). |
2018 Grants of Plan-Based Awards Table
The following table sets forth certain information with respect to awards made under the Executive Incentive Plan and the 2008, 2011 and 2017 Plans for the fiscal year ended March 31, 2018 to each of the NEOs.
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Name | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards | | All Other Stock Awards: Number of Shares of Stock or Units (#) (2) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) (3) |
| | Threshold ($) | Target ($) | Maxi-mum ($) | Threshold (#) | Target (#) | Maxi-mum (#) | | | | | |
Janet Lewis Matricciani | | 275,600 | 551,200 | 826,800 | - | - | - | | - | - | - | - |
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James H. Wanserski (4) | | - | - | - | - | - | - | | - | - | - | - |
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John L. Calmes, Jr. | | 102,960 | 205,920 | 308,880 | - | - | - | | - | - | - | - |
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D. Clinton Dyer | 2/28/2018 | 100,800 | 201,600 | 302,400 | - | - | - | | 4,527 | - | - | 476,693 |
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R. Chad Prashad | 2/28/2018 | 33,289 | 66,578 | 99,867 | - | - | - | | 3,621 | - | - | 381,291 |
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Jeff L. Tinney | 2/28/2018 | 25,496 | 50,993 | 76,489 | - | - | - | | 2,175 | - | - | 229,028 |
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(1) | Awards represent the NEO’s cash bonus opportunity for fiscal 2018 under the Executive Incentive Plan. In regards to Mr. Tinney, these amounts exclude bonus for divisional performance. |
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(2) | These awards consist of restricted stock awards granted under the 2008 Plan. |
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(3) | The amounts in this column represent the grant date fair value of each equity award computed in accordance with FASB ASC Topic 718. |
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(4) | As former interim President and Chief Executive Officer, Mr. Wanserski did not receive any equity or other incentive grants under our incentive plans, including the Executive Incentive Plan and the 2008, 2011 and 2017 Plans. |
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Benefits and Perquisites | Prashad | Calmes | Dyer | Umstetter | Caulder |
Company auto (1) | 24,760 | | 19,274 | | 24,573 | | 17,976 | | 17,970 | |
Company contributions to 401(k) Plan | 5,008 | | 6,693 | | 6,717 | | 2,019 | | 7,934 | |
Term life insurance premiums | 1,227 | | 1,167 | | 2,397 | | 835 | | 1,064 | |
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Total | 30,995 | | 27,134 | | 33,687 | | 20,830 | | 26,968 | |
The terms of the fiscal year 2018 awards under the Executive Incentive Plan and the 2008, 2011 and 2017 Stock Plans are described above under “Compensation Discussion and Analysis - Executive Compensation Program - Annual Cash Bonuses” and “Compensation Discussion and Analysis - Executive Compensation Program - Long-Term Incentive Compensation,” respectively.
(1)Includes the aggregate incremental cost for use of a Company-owned auto (i.e., the annual lease value, fuel, maintenance, taxes, and insurance related to usage).
Outstanding Equity Awards at Fiscal 20182020 Year-End Table
The following table includes certain information with respect to the value at March 31, 20182020 of all unexercised options and unvested restricted shares previously awarded to the NEOs.
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| | Option Awards | | | | | | | Stock Awards | | | | |
Name | Plan | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
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R. Chad Prashad | 2011 Plan | 3,000 | — | | (3) | 79.57 | 6/2/2024 | | — | — | — | | — |
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| | Option Awards | Stock Awards |
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R. Chad Prashad | 2011 Plan | 1,000 | — | | (4) | 76.51 | 11/24/24 | | — | — | — | | — |
R. Chad Prashad | 2011 Plan | 2,000 | 500 | | (5) | 82.97 | 5/21/25 | | — | — | — | | — |
R. Chad Prashad | 2011 Plan | — | — | 25,740 | (6) | 100.79 | 10/15/28 | | — | — | — | | — |
R. Chad Prashad | 2008 Plan | — | — | | | — | — | | 1,207 | 65,914 | — | (7) | — |
R. Chad Prashad | 2011 Plan | — | — | | | — | — | | 5,333 | 291,235 | — | (8) | — |
R. Chad Prashad | 2011 Plan | — | — | | | — | — | | 65,000 | 3,549,650 | — | (9) | — |
R. Chad Prashad | 2017 Plan | — | — | | | — | — | | — | — | 46,800 | (10) | 2,555,748 |
R. Chad Prashad | 2017 Plan | — | — | | | — | — | | — | — | 31,200 | (11) | 1,703,832 |
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John L. Calmes | 2008 Plan | 13,500 | — | | | 86.52 | 12/12/23 | | — | — | — | | — |
John L. Calmes | 2011 Plan | — | — | 14,850 | (6) | 100.79 | 10/15/28 | | — | — | — | | — |
John L. Calmes | 2011 Plan | — | — | | | — | — | | 37,500 | 2,047,875 | — | (9) | — |
John L. Calmes | 2017 Plan | — | — | | | — | — | | — | — | 27,000 | (10) | 1,474,470 |
John L. Calmes | 2017 Plan | — | — | | | — | — | | — | — | 18,000 | (11) | 982,980 |
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D. Clinton Dyer | 2011 Plan | 20,000 | — | | | 74.08 | 12/7/22 | | — | — | — | | — |
D. Clinton Dyer | 2011 Plan | — | — | 14,850 | (6) | 100.79 | 10/15/28 | | — | — | — | | — |
D. Clinton Dyer | 2008 Plan | — | — | | | — | — | | 1,509 | 82,406 | — | (7) | — |
D. Clinton Dyer | 2008 Plan | — | — | | | — | — | | 37,500 | 2,047,875 | — | (9) | — |
D. Clinton Dyer | 2017 Plan | — | — | | | — | — | | — | — | 27,000 | (10) | 1,474,470 |
D. Clinton Dyer | 2017 Plan | — | — | | | — | — | | — | — | 18,000 | (11) | 982,980 |
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Luke J. Umstetter | 2011 Plan | — | — | 9,900 | (6) | 100.79 | 10/15/28 | | — | — | — | | — |
Luke J. Umstetter | 2017 Plan | — | — | | | — | — | | 284 | 15,509 | — | (12) | — |
Luke J. Umstetter | 2017 Plan | — | — | | | — | — | | 25,000 | 1,365,250 | — | (9) | — |
Luke J. Umstetter | 2017 Plan | — | — | | | — | — | | — | — | 18,000 | (10) | 982,980 |
Luke J. Umstetter | 2017 Plan | — | — | | | — | — | | — | — | 12,000 | (11) | 655,320 |
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A. Lindsay Caulder | 2011 Plan | — | — | 5,940 | (6) | 100.79 | 10/15/28 | | — | — | — | | — |
A. Lindsay Caulder | 2008 Plan | — | — | | | — | — | | 604 | 32,984 | — | (2) | — |
A. Lindsay Caulder | 2017 Plan | — | — | | | — | — | | 15,000 | 819,150 | — | (9) | — |
A. Lindsay Caulder | 2017 Plan | — | — | | | — | — | | — | — | 10,800 | (10) | 589,788 |
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Name | Plan | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
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Janet Lewis Matricciani (2) | 2011 Plan | 15,000 | — | (2) | 92.89 | 2/4/24 | — | — | — | | — |
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James H. Wanserski (3) | | — | — | | — | — | — | — | — | | — |
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John L. Calmes | 2008 Plan | 13,500 | — | | 86.52 | 12/12/23 | — | — | — | | — |
John L. Calmes | 2008 Plan | — | — | | — | — | — | 4,870 | 512,811 | (7) | — |
John L. Calmes | 2011 Plan | — | — | | — | — | — | 2,500 | 263,250 | (8) | — |
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D. Clinton Dyer | 2011 Plan | 20,000 | — | | 74.08 | 12/7/22 | — | — | — | | — |
D. Clinton Dyer | 2008 Plan | — | — | | — | — | — | 4,870 | 512,811 | (7) | — |
D. Clinton Dyer | 2011 Plan | — | — | | — | — | — | 1,250 | 131,625 | (8) | — |
D. Clinton Dyer | 2008 Plan | — | — | | — | — | — | 4,527 | 476,693 | (9) | — |
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R. Chad Prashad | 2011 Plan | 1,800 | 1,200 | (4) | 79.57 | 6/2/2024 | — | — | — | | — |
R. Chad Prashad | 2011 Plan | 600 | 400 | (5) | 76.51 | 11/24/24 | — | — | — | | — |
R. Chad Prashad | 2011 Plan | 1,000 | 1,500 | (6) | 82.97 | 5/21/25 | — | — | — | | — |
R. Chad Prashad | 2008 Plan | — | — | | — | — | — | 1,960 | 206,388 | (7) | — |
R. Chad Prashad | 2011 Plan | — | — | | — | — | — | 800 | 84,240 | (8) | — |
R. Chad Prashad | 2008 Plan | — | — | | — | — | — | 3,621 | 381,291 | (9) | — |
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Jeff L. Tinney | 2005 Plan | 5,400 | — | | 43.04 | 11/8/20 | — | — | — | | — |
Jeff L. Tinney | 2011 Plan | 20,000 | — | | 74.08 | 12/7/22 | — | — | — | | — |
Jeff L. Tinney | 2008 Plan | — | — | | — | — | — | 2,440 | 256,932 | (7) | — |
Jeff L. Tinney | 2011 Plan | — | — | | — | — | — | 1,250 | 131,625 | (8) | — |
Jeff L. Tinney | 2008 Plan | — | — | | — | — | — | 2,175 | 229,028 | (9) | — |
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A. Lindsay Caulder | 2017 Plan | — | — | | | — | — | | — | — | 7,200 | (11) | 393,192 |
(1)These amounts are based on the market value of the Company’s common stock at the close of business on March 31, 2020, which was $54.61.
(2)The restricted shares vest at a rate of 33% per year with the final vesting date of 2/28/2021.
(3)Stock options vested on 6/2/19.
(4)Stock options vested on 11/24/19.
(5)Stock options vested one half on 5/21/19 and will vest one half on 5/21/20.
(6)Performance Options will fully vest if the Company attains the four quarter trailing earnings per share target of $25.30 over four consecutive calendar quarters occurring between September 30, 2018 and March 31, 2025.
(7)The restricted shares vest at a rate of 33% per year with the remaining vesting date of 10/1/20.
(8)The restricted shares vest at a rate of 33% per year with remaining vesting dates of 6/27/20, and 6/27/21.
(9)The Restricted Stock shares vest at a rate of 16.7% per year with remaining vesting dates of 10/15/2020, 10/15/2021, 10/15/2022, 10/15/2023, and 10/15/2024. See "Compensation Discussion and Analysis - Long-Term Incentive Compensation - Long-Term Incentive Program" for additional information regarding Restricted Stock.
(10)Performance Shares will fully vest if the Company attains the four quarter trailing earnings per share target of $16.35 over four consecutive calendar quarters occurring between September 30, 2018 and March 31, 2025. See "Compensation Discussion and Analysis - Long-Term Incentive Compensation - Long-Term Incentive Program" for additional information regarding Performance Shares.
(11)Performance Shares will fully vest if the Company attains the four quarter trailing earnings per share target of $20.45 over four consecutive calendar quarters occurring between September 30, 2018 and March 31, 2025. See "Compensation Discussion and Analysis - Long-Term Incentive Compensation - Long-Term Incentive Program" for additional information regarding Performance Shares.
(12)The restricted shares vest at a rate of 33% per year with remaining vesting dates of 9/4/2020 and 9/4/2021.
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(1) | These amounts are based on the market value of the Company’s common stock at the close of business on March 29, 2018, which was $105.30. |
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(2) | Pursuant to Ms. Matricciani’s Separation Agreement dated January 22, 2018, all of her outstanding unvested options and restricted stock awards vested on January 22, 2018, the date of her termination. |
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(3) | As former interim President and Chief Executive Officer, Mr. Wanserski was not granted any equity or other incentive grants under our incentive plans, including the Executive Incentive Plan and the 2008, 2011 and 2017 Plans. |
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(4) | Stock options vested one half on 6/2/18 and will vest one half on 6/2/19; 2011 Plan. |
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(5) | Stock options vest one half on 11/24/18 and 11/24/19; 2011 Plan. |
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(6) | Stock options vested one third on 5/21/18 and will vest one third on 5/21/19 and 5/21/20; 2011 Plan. |
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(7) | The restricted shares vest at a rate of 33% per year with the remaining vesting dates of 10/3/18 and 10/3/19; . |
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(8) | The restricted shares vest at a rate of 33% per year with the remaining vesting date of 10/1/18. |
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(9) | The restricted shares vest at a rate of 33% per year with the remaining vesting dates of 10/1/18, 10/1/19 and 10/1/20. |
2018
2020 Option Exercises and Stock Vested Table
The following table includes certain information regarding amounts realized by the NEOs on account of the exercise of stock options and the vesting of restricted stock during the fiscal year ended March 31, 2018.2020.
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| Option Awards | | | Stock Awards | |
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) |
R. Chad Prashad | — | — | | 17,854 | 2,287,689 |
John L. Calmes, Jr. | — | — | | 9,935 | 1,209,954 |
D. Clinton Dyer | — | — | | 11,444 | 1,392,316 |
Luke J. Umstetter | — | — | | 5,142 | 628,300 |
A. Lindsay Caulder | — | — | | 4,584 | 557,701 |
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| | | | | | | | |
| | Option Awards | | Stock Awards |
Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) |
Janet Lewis Matricciani | | — | | — | | 24,610 | (1) | 2,115,374 |
James H. Wanserski (2) | | — | | — | | — | | — |
John L. Calmes, Jr. | | — | | — | | 4,935 | (1) | 410,085 |
D. Clinton Dyer | | 1,800 | (3) | 68,323 | | 3,685 | (1) | 306,472 |
R. Chad Prashad | | — | | — | | 1,780 | (1) | 147,956 |
Jeff L. Tinney | | — | | — | | 2,470 | (1) | 205,251 |
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(1) | These restricted stock awards vested on 10/1/2017 and 10/3/2017 and the closing price of the Company's common stock on these dates were $82.89 and $83.31. Pursuant to Ms. Matricciani’s Separation Agreement dated January 22, 2018, all of her outstanding unvested restricted stock awards vested on January 22, 2018, the date of her termination, and the closing price of the Company's common stock on this day was $87.87. |
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(2) | Former interim President and Chief Executive Officer, Mr. Wanserski was not granted any equity or other incentive grants under our incentive plans, including the Executive Incentive Plan, 2008 Plan, 2011 Plan, and 2017 Plan. |
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(3) | This option was exercised on 6/2/2017. The dollar amount realized upon exercise was determined by subtracting the exercise price from the market price of the Company's common stock on the date of exercise, which was $81.00. |
Supplemental Executive Retirement Plan; 20182020 Pension Benefits Table
The table below sets forth information regarding NEO benefits under the Company’s 2005 Supplemental Income PlanSIP described above under “Compensation Discussion and Analysis - Executive Compensation Program ‑ Post‑Employment Compensation.”
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Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) (1) | Present Value of Accumulated Benefit at Death ($) (2) | Payments During Last Fiscal Year ($) |
R. Chad Prashad | 2005 SIP | 5 | 305,936 | 1,835,615 | — |
John L. Calmes, Jr. | 2005 SIP | 6 | 228,257 | 1,179,328 | — |
D. Clinton Dyer | 2005 SIP | 17 | 545,222 | 1,154,587 | — |
Luke J. Umstetter (3) | | — | — | — | — |
A. Lindsay Caulder (3) | | — | — | — | — |
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Name | | Plan Name | | Number of Years Credited Service (#) | | Present Value of Accumulated Benefit ($) (1) | | Present Value of Accumulated Benefit at Death ($) (2) | | Payments During Last Fiscal Year ($) |
Janet Lewis Matricciani (3) | | 2005 Supplemental Income Plan | | 4 | | 507,163 | | 2,409,026 | | — |
James H. Wanserski (4) | | | | — | | — | | — | | — |
John L. Calmes, Jr. | | 2005 Supplemental Income Plan | | 4 | | 145,157 | | 1,124,970 | | — |
D. Clinton Dyer | | 2005 Supplemental Income Plan | | 15 | | 458,904 | | 1,101,369 | | — |
R. Chad Prashad | | | | — | | — | | — | | — |
Jeff L. Tinney | | 2005 Supplemental Income Plan | | 31 | | 631,903 | | 835,742 | | — |
(1)Based on the assumptions disclosed in Note 12 in the Notes to Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended March 31, 2020.
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(1) | Based on the assumptions disclosed in Note 12 in the Notes to Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K for the year ended March 31, 2018. |
(2)Present value of 2005 Supplemental Income PlanSIP benefits payable at death was calculated as 45% of the executive’s adjusted base salary as of March 31, 2020 for 15 years assuming a 6% interest rate.
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(3) | Pursuant to Ms. Matricciani's separation agreement, she is entitled to receive $793,728 of vested accrued benefits in accordance with the provisions of the Company’s 2005 Supplemental Income Plan. |
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(4) | As former interim President and Chief Executive Officer, Mr. Wanserski did not participate in the Company’s 2005 Supplemental Income Plan or any other pension benefit program.
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(3)Mr. Umstetter and Ms. Caulder do not participate in the Company’s 2005 SIP or any other pension benefit program.
Potential Payments upon Termination or Change in Control
The following tables describe the potential payments and benefits that would have been payable to our NEOs under our existing plans and agreements, assuming the occurrence of certain events, in each case, on March 31, 2020. The amounts shown in the tables do not include payments and benefits to the extent they are provided generally to all salaried employees upon termination of employment and do not discriminate in scope, terms, or operation in favor of the NEOs. Because the��disclosures in the following tables assume the occurrence of certain events as of a particular date and under a particular set of circumstances (and therefore make a number of important assumptions), the actual amount to be paid to each of our NEOs may vary significantly from the amounts included in the table.
Severance Benefits
As described above under “Executive Compensation-Employment Agreements,”of March 31, 2020, Messrs. Prashad, Calmes, Dyer, and Dyer areUmstetter were entitled to severance benefits ifpursuant to employment agreements in the event that they are terminated without cause or constructively discharged. In addition,The following table provides estimates of the amounts payable to Messrs. Prashad, Calmes, Dyer, Umstetter, and Ms. Caulder assuming each had been terminated without cause or constructively discharged on March 31, 2020. Note that the table excludes unpaid salary accrued through the termination date and reimbursement of any unpaid business expenses. Finally, Messrs. Prashad, Calmes, and Dyer are entitled to benefits under the 2005 Supplemental Income Plan, all of our NEOs, other than Mr. Wanserski who did not participate in the 2005 Supplemental Income Plan, are entitled to benefitsSIP if they are terminated prior to death or retirement (other than for malfeasance, dishonesty or similar wrongdoing) as described above under “Compensation“Compensation Discussion and Analysis-ExecutiveAnalysis - Executive Compensation Program-Post-EmploymentProgram - Post-Employment Compensation.” The followingvalue of such 2005 SIP benefits is included in the foregoing section (“Supplemental Executive Retirement Plan; 2020 Pension Benefits Table”) and therefore is not included in the table provides estimatesbelow.
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Name | | Salary Continuation ($) | | Benefits Continuation ($) | | Benefits from Accelerated Equity Vesting ($) (2) | | Total ($) |
R. Chad Prashad | | 1,260,000 | | 27,672 | | 1,067,079 | | 2,354,751 |
John L. Calmes, Jr. | | 550,000 | | 28,167 | | 409,575 | | 987,742 |
D. Clinton Dyer | | 550,000 | | 28,295 | | 491,981 | | 1,070,276 |
Luke J. Umstetter | | 250,000 | | 18,863 | | 288,559 | | 557,422 |
A. Lindsay Caulder | | — | | — | | — | | — |
(1)The benefits continuation payment represents 18 months of the amounts payableCOBRA premiums for Messrs. Prashad, Calmes, and Dyer and 12 months of COBRA premiums for Mr. Umstetter.
(2)With respect to Messrs. Wanserski, Calmes, Dyer, Prashadunvested stock options and Tinney assuming each had been terminatedrestricted stock that become vested upon a termination without cause, or constructively discharged onthe benefits (per share) from accelerated vesting represent, for options, the difference between the Company’s March 31, 2018. The amounts shown below2020 closing stock price ($54.61) and the option exercise price, and, for Ms. Matricciani representrestricted stock, the amounts actually paid in connection with her termination by the Company without cause (other than in connection with a change of control) on January 22, 2018. Note that the table excludes unpaid salary accrued through the termination date and reimbursement of any unpaid business expenses. The table also does not include any amounts payable under the Executive Incentive Plan for the NEOs listed below other than Ms. Matricciani because under that plan, a participant who terminates employment at or after the end of a fiscal year is entitled to the same amount that they would have received if they had not terminated employment.Company’s March 31, 2020 closing stock price ($54.61).
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Name | | Salary Continuation ($) | | Bonus Continuation ($) | | Benefits Continuation ($) (1) | | Benefits from Accelerated Equity Vesting ($) (2) | | All Other Compensation | | Total ($) |
Janet Lewis Matricciani | | 1,102,400 | | 494,250 | | 31,020 | | 1,295,204 | | 39,493 | | 2,962,367 |
James H. Wanserski (3) | | — | | — | | — | | — | | — | | — |
John L. Calmes Jr. | | 514,800 | | — | | 8,595 | | 776,061 | | — | | 1,299,456 |
D. Clinton Dyer | | 504,000 | | — | | 12,420 | | 1,121,129 | | — | | 1,637,549 |
R. Chad Prashad | | — | | — | | — | | — | | — | | — |
Jeff L. Tinney | | — | | — | | — | | — | | — | | — |
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(1) | The benefits continuation payment represents 18 months of COBRA premiums for Messrs. Calmes and Dyer. The benefits continuation payment represents 19 months of COBRA premiums for Ms. Matricciani. |
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(2) | Benefits from accelerated equity vesting represent the difference between the Company’s March 29, 2018 closing stock price ($105.30) and the option exercise price for any unvested options, plus the March 29, 2018 closing stock price ($105.30) for any unvested restricted stock shares. Ms. Matricciani’s outstanding restricted stock awards (14,740) were accelerated and vested in connection with her termination effective January 22, 2018. For Ms. Matricciani, this amount reflects the January 22, 2018 closing stock price ($87.87) times the 14,740 shares of restricted stock that were vested effective January 22, 2018. No amount is included for the accelerated and vested options as the option exercise price ($92.89) was greater than the Company's closing stock price ($87.87) on January 22, 2018. |
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(3) | As former interim President and Chief Executive Officer, Mr. Wanserski was not entitled to severance benefits. |
Death Benefits
Certain benefits become due upon the death of a NEO, primarily life insurance benefits, benefits under the Company’s 2005 Supplemental Income PlanSIP and vesting of stock awards. The following table shows the death benefits that would have been due in the event that the respective NEO had died on March 31, 2018.2020. Note that the table excludes unpaid salary accrued through the termination date and reimbursement of any unpaid business expenses. In addition,
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Name | | Life insurance proceeds ($) (1) | | Present Value of 2005 SIP benefits ($) (2) | | Benefits from Accelerated Equity Vesting ($) (3) | | Total ($) |
R. Chad Prashad | | 500,000 | | 1,835,615 | | 8,166,379 | | 10,501,994 |
John L. Calmes, Jr. | | 500,000 | | 1,179,328 | | 4,505,325 | | 6,184,653 |
D. Clinton Dyer | | 500,000 | | 1,154,587 | | 4,587,731 | | 6,242,318 |
Luke J. Umstetter | | 500,000 | | — | | 3,019,059 | | 3,519,059 |
A. Lindsay Caulder | | 500,000 | | — | | 1,835,114 | | 2,335,114 |
(1)Life insurance proceeds represent two times the table doesparticipant’s base pay, not include any amountsto exceed $500,000.
(2)Present value of the 2005 SIP benefits payable underat death was calculated as 45% of the Executive Incentive Plan because underexecutive’s adjusted base salary for 15 years, assuming a 6% interest rate.
(3)With respect to unvested stock options and restricted stock that plan,become vested upon a participant who dies at or aftertermination without cause, benefits from accelerated vesting represent, for options, the end of a fiscal year is entitled todifference between the same amount that they would have received if he or she had not died.Company’s March 31, 2020 closing stock price ($54.61) and the option exercise price, and, for restricted stock, the Company’s March 31, 2020 closing stock price ($54.61).
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Name | | Life insurance proceeds ($) (1) | | Present Value of SERP benefits ($) (2) | | Benefits from Accelerated Equity Vesting ($) (3) | | Benefits from Equity Vesting as if the participant was still employed ($) (4) | | Total ($) |
Janet Lewis Matricciani (5) | | — | | — | | — | | — | | — |
James H. Wanserski (6) | | — | | — | | — | | — | | — |
John L. Calmes, Jr. | | 500,000 | | 1,124,970 | | 776,061 | | 776,061 | | 3,177,092 |
D. Clinton Dyer | | 500,000 | | 1,101,369 | | 1,121,129 | | 1,121,129 | | 3,843,627 |
R. Chad Prashad | | 500,000 | | — | | 747,806 | | 747,806 | | 1,995,612 |
Jeff L. Tinney | | 382,446 | | 835,742 | | 617,585 | | 617,585 | | 2,453,358 |
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(1) | Life insurance proceeds represent two times the participant’s base pay, not to exceed $500,000. |
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(2) | Present value of Supplemental Income Plan benefits payable at death was calculated as 45% of the executive’s base salary for 15 years, assuming a 6% interest rate. |
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(3) | Benefits from accelerated equity vesting represent the difference between the Company’s March 29, 2018 closing stock price ($105.30) and the option exercise price for any unvested stock options, plus the March 29, 2018 closing stock price ($105.30) for any unvested restricted stock shares. |
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(4) | Benefits from equity vesting as if the participant was still employed, amount represents the difference between the Company’s March 29, 2018 closing stock price ($105.30) and the option exercise price for any unvested stock options, plus the March 29, 2018 closing stock price ($105.30) for any unvested restricted stock shares. |
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(5) | Ms. Matricciani was terminated by the Company without cause (other than in connection with a change of control) on January 22, 2018. Please see “- Severance Benefits” above for information regarding payments made by the Company in connection with her termination. |
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(6) | As former interim President and Chief Executive Officer, Mr. Wanserski was not entitled to death benefits. |
Disability Benefits
In the event that an NEO suffers a disability, the Company will continue to pay the NEO his or hercertain NEO's salary for a period of 90 days. After 90 days, the Company may terminate his or herthe NEO's employment, at which time the NEO would be eligible for long-term disability benefits. In addition, an NEO terminating employment due to disability ismay be eligible for benefits under the 2005 Supplemental Income Plan.SIP. The following table sets forth the amounts that would have been payable to our NEOs had they terminated employment due to disability on March 31, 2018.2020. Note that the table excludes unpaid salary accrued through the termination date and reimbursement of any unpaid business expenses. In addition, the table does not include any amounts payable under the Executive Incentive Plan because under that plan, a participant who terminates employment (including due to disability) at or after the end of a fiscal year is entitled to same amount that he would have received if they had not terminated employment.
| | Name | | 90 day continuation pay ($) (1) | | Long-term disability pay ($) (2) | | Present value of SERP benefits ($) (3) | | Total ($) | Name | 90 day continuation pay ($) (1) | Disability Severance ($) (2)
| Long-term disability pay ($) (3) | Present value of 2005 SIP benefits ($) (4) | Total ($) |
Janet Lewis Matricciani (4) | | — | | — | | — | | — | |
James H. Wanserski (5) | | — | | — | | — | | — | |
R. Chad Prashad | | R. Chad Prashad | 210,000 | 3,329,055 | 380,648 | 4,129,703 |
John L. Calmes, Jr. | | 64,350 | | 2,040,235 | | 233,283 | | 2,337,868 | John L. Calmes, Jr. | 120,705 | 146,991 | 2,069,658 | 274,782 | 2,612,136 |
D. Clinton Dyer | | 63,000 | | 1,734,252 | | 343,412 | | 2,140,664 | D. Clinton Dyer | 117,936 | 144,144 | 1,716,240 | 404,502 | 2,382,822 |
R. Chad Prashad | | 64,350 | | 2,070,448 | | — | | 2,134,798 | |
Jeff L. Tinney | | 47,806 | | 780,384 | | 494,675 | | 1,322,865 | |
Luke J. Umstetter | | Luke J. Umstetter | 87,500 | 162,500 | 315,000 | — | 565,000 |
A. Lindsay Caulder | | A. Lindsay Caulder | — | 270,900 | — | 270,900 |
(1)Represents three months of the NEO’s current base salary.
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(2) | Long-term disability pay was calculated as the present value of 60% of the executive’s base pay from March 31, 2018 until the executive reaches age 65. The present value calculation assumes a 6% interest rate. |
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(3) | SERP benefits in the event of an NEO’s disability are calculated as the present value of 45% of the executive’s base pay, at the time the executive was disabled, for 15 years when the executive’s employment terminates due to disability. The present value calculation assumes an interest rate of 6%. |
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(4) | Ms. Matricciani was terminated by the Company without cause (other than in connection with a change of control) on January 22, 2018. Please see “- Severance Benefits” above for information regarding payments made by the Company in connection with her termination. |
(5) As former interim President and Chief Executive Officer, Mr. Wanserski was not entitled to disability benefits.salary as of March 31, 2020.
(2)Disability severance is paid over a period of 24 months from date of termination for Messrs. Prashad, Calmes, Umstetter and Dyer, but only at such times as no other benefits are being received under the disability insurance provided by the Company.
(3)Long-term disability pay for Messrs. Prashad, Calmes, Dyer, and Umstetter was calculated as the present value (assumes a 6% interest rate) of 60% of the executive’s adjusted base salary as of March 31, 2020, paid for the period from the date of termination until the executive reaches age 65 as a result of treatment under the aforementioned 2005 SIP. The other NEOs listed are not participants under the 2005 SIP and receive 60% of their respective base salary for 18 months, up to $18,500 per month.
(4)2005 SIP benefits in the event of an NEO’s disability are calculated as the present value of 45% of the executive’s adjusted base salary, at the time the executive was disabled, for 15 years when the executive’s employment terminates due to disability. The present value calculation assumes an interest rate of 6%.
Change in Control Benefits
Named Executive Officers with employment agreements are entitled to certain benefits if they are terminated in connection with a change in control as described above under “Compensation Discussion and Analysis - Employment Agreements.” In addition, under the terms of thecertain outstanding stock option and restricted stock awards held by NEOs, those awards will fully vest upon a change in control, regardless of whether an NEO’s employment is terminated. Under the terms of the stock options and restricted stock awards granted under the 2017 Plan or in connection with the Company’s Long-Term Incentive Program, the NEO’s employment must be terminated within two years following a change in control in order to trigger vesting of such awards. The definition of change in control under the terms of the outstanding restricted stock awards held by NEOs is the same as the definition used in Mr. Calmes’Prashad’s employment agreement. The definition of change in control for stock options awarded under the 2011 Plan is substantially similar, except that (a) in the case of a merger or asset sale, the exclusion for certain transactions requires that no person own more than 30% (rather than 35%) of the surviving entity; and (b) the change in control event relating to acquisition of stock requires acquisition of 30% or more of the Company’s outstanding stock
(rather (rather than 20%) but does not require that a majority of the Board of Directors be controlled by the acquiring person or its affiliates. Under the 2008 Plan, change in control is generally defined as any of the following:
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(i) | acquisition by a person of ownership of, or voting control over, twenty-five percent (25%) or more of the Company’s outstanding stock; |
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(ii) | shareholder approval of (a) a definitive agreement to merge the Company with another company in which the Company is not the surviving company or pursuant to which any shares of stock of the Company would be converted into cash, securities or other property of another corporation, other than a merger or consolidation of the Company in which the shareholders of the Company continue to own at least seventy-five percent (75%) of the stock or voting securities of the surviving company, in, the same proportions as they owned Company stock; (b) a definitive agreement to sell or otherwise dispose of all or substantially all the assets of the Company; or (c) a plan of complete liquidation or winding up of the Company; |
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(iii) | a change in a majority of the Board of Directors within a 12-month period unless the nomination of each new director was approved by the vote of two-thirds of the members of the Board of Directors (or board nominating committee, if any) then still in office who were in office at the beginning of the 12-month period; or |
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(iv) | any other event which the Board of Directors determines should constitute a change in control. |
(i)acquisition by a person of ownership of, or voting control over, twenty-five percent (25%) or more of the Company’s outstanding stock;
(ii)shareholder approval of (a) a definitive agreement to merge the Company with another company in which the Company is not the surviving company or pursuant to which any shares of stock of the Company would be converted into cash, securities or other property of another corporation, other than a merger or consolidation of the Company in which the shareholders of the Company continue to own at least seventy-five percent (75%) of the stock or voting securities of the surviving company, in, the same proportions as they owned Company stock; (b) a definitive agreement to sell or
otherwise dispose of all or substantially all the assets of the Company; or (c) a plan of complete liquidation or winding up of the Company;
(iii)a change in a majority of the Board of Directors within a 12-month period unless the nomination of each new director was approved by the vote of two-thirds of the members of the Board of Directors (or board nominating committee, if any) then still in office who were in office at the beginning of the 12-month period; or
(iv)any other event which the Board of Directors determines should constitute a change in control.
The table below shows the benefits that would have been due to the NEOs had their employment been terminated in connection with a change in control as of March 31, 2018. The table does not include any amounts payable under the Executive Incentive Plan because under2020. Note that plan, a participant who terminates employment at or after the end of a fiscal year is entitled to the same amount that he or she would have received if he or she had not terminated employment. In addition, the table does not includeexcludes unpaid salary accrued through the termination date and reimbursement of any awards underunpaid business expenses.
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Name | Salary Continuation ($) | Benefits Continuation ($) (1) | Benefits from Accelerated Equity Vesting ($) (2) | Total ($) |
R. Chad Prashad | 1,260,000 | 27,672 | 8,166,379 | 9,454,051 |
John L. Calmes, Jr. | 550,000 | 28,167 | 4,505,325 | 5,083,492 |
D. Clinton Dyer | 550,000 | 28,295 | 4,587,731 | 5,166,026 |
Luke J. Umstetter | 250,000 | 18,863 | 3,019,059 | 3,287,922 |
A. Lindsay Caulder | — | — | 1,835,114 | 1,835,114 |
(1)The benefits continuation payment represents 18 months of COBRA premiums for Messrs. Prashad, Calmes, and Dyer. Mr. Umstetter’s employment agreement provides for 12 months of COBRA premiums.
(2)With respect to unvested stock options and restricted stock that become vested upon a termination without cause, benefits from accelerated vesting represent, for options, the 2017 Plan as no equity awards have been granted under that plan.
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Name | | Salary Continuation ($) | | Bonus Continuation ($) | | Benefits Continuation ($) (1) | | Benefits from Accelerated Equity Vesting ($) (2) | | Total ($) |
Janet Lewis Matricciani (3) | | — | | — | | — | | — | | — |
James H. Wanserski (4) | | — | | — | | — | | — | | — |
John L. Calmes Jr. | | 514,800 | | — | | 8,595 | | 776,061 | | 1,299,456 |
D. Clinton Dyer | | 504,000 | | — | | 12,420 | | 1,121,129 | | 1,637,549 |
R. Chad Prashad | | — | | — | | — | | 747,806 | | 747,806 |
Jeff L. Tinney | | — | | — | | — | | 617,585 | | 617,585 |
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(1) | The benefits continuation payment represents 18 months of COBRA premiums, based on current insurance premiums. |
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(2) | Benefits from accelerated equity vesting represents the difference between the Company’s March 29, 2018 closing stock price ($105.30) and the option exercise price for any unvested options, plus the March 29, 2018 closing stock price ($105.30) for any unvested restricted stock shares. |
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(3) | Ms. Matricciani was terminated by the Company without cause (other than in connection with a change of control) on January 22, 2018. Please see “- Severance Benefits” above for information regarding payments made by the Company in connection with her termination. |
(4) As former interim Presidentdifference between the Company’s March 31, 2020 closing stock price ($54.61) and Chief Executive Officer, Mr. Wanserski was not entitled to change in control benefits.the option exercise price, and, for restricted stock, the Company’s March 31, 2020 closing stock price (54.61).
Performance-Based Awards
The Company grants both cash- and equity-based awards in recognition of performance. The Company issues cash-based awards to its executive officers upon achievement of certain company and/or division performance goals established under the Company’s Executive Incentive Plan. Performance-based cash awards for fiscal year 2018 are discussed above under “Compensation Discussion and Analysis - Annual Cash Bonuses - Fiscal Year 2018 Executive
Incentive Plan Awards.” Performance-based equity awards may also be granted under the Company’s 2017 and 2011 and 2008 Plans and, when granted, historically have vested over four- or five-year performance periods.Plans. All equity awards granted since 2014 have provided for service‑basedservice-based vesting. In March 2016, certain outstandingOctober 2018, the Company granted performance-based restricted stock awards grantedand stock options to key executivesexecutive officers and certain employees that provided for vesting based on the achievement of certain earnings per share targets withtargets. See “Compensation Discussion and Analysis-Executive Compensation Program-Long-Term Incentive Compensation-Long-Term Incentive Program” for additional information regarding these awards. The following table shows the final performance measurement date of March 31, 2017 were amendedaggregate share totals for all performance-based equity awards granted from all plans to reflect the significant contributions made by the recipientsall plan participants (including, but not limited to, the Company in a challenging regulatory environment when none of the earnings targets had been achieved and it was not clear whether they would be achieved by March 31, 2017. Pursuant to the amendments, one quarter of the shares subject to the awards vested and the remaining shares were forfeited. Additionally, the award recipients agreed not to sell any of the vested shares prior to March 31, 2019.our NEOs):
Performance-Based Awards Table
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| | | | | | | |
Non-vested at March 31, 20152017 | | 433,750— |
Granted | | — |
Vested or Earned | | 133,580 |
Forfeited | | 274,170 |
Non-vested at March 31, 2016 | | 26,000 |
Granted | | — |
Vested or Earned | | — |
Forfeited | | 26,000 |
Non-vested at March 31, 2017 | | — |
Granted | | — |
Vested or Earned | | — |
Forfeited | | — |
Non-vested at March 31, 2018 | | — |
Granted | | 490,770 |
Vested or Earned | | — |
Forfeited | | 5,985 |
Non-vested at March 31, 2019 | | 484,785 |
Granted | | 8,619 |
Vested or Earned | | — |
Forfeited | | — |
Non-vested at March 31, 2020 | | 493,404 |
20182020 Pay Ratio
Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our President and Chief Executive Officer. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
For fiscal 2018:2020:
•the median of the annual total compensation of all employees of our company (other than our CEO) was $27,792;$42,375; and
the annual •total compensation of our CEO was $535,700.$932,182.
Based on the above information, for fiscal year 2018,2020, the ratio of the median of the annual total compensation of all employees to the annual total compensation of our CEO was 1922 to 1.
As required by SEC rules, the total grant date fair values of the Long-Term Incentive Program awards were attributed towards total compensation for fiscal 2019. Thus, the compensation amounts reflected for each of our NEOs in fiscal 2019 were atypically high. Accordingly, we note, as supplemental disclosure, that if the compensation amounts used to determine our fiscal 2020 Pay Ratio reflected the grant date fair value of one sixth of the Long-Term Incentive Program service- and performance-based awards, the CEO's adjusted annual compensation would be $3,780,037 and our fiscal 2020 Pay Ratio would have been 89 to 1.
The SEC rules for identifying the median employee and calculatingof the annual total compensation of our employees and calculating the median employee and CEO permitpay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, apply various methodologiescertain exclusions, and assumptions. Consequently, our pay ratio reported above may not be comparable tomake reasonable estimates and assumptions that reflect their employee populations and compensation practices, therefore, the pay ratio reported by other companies.companies may not be comparable to our pay ratio, as other companies have different employee populations and compensation practices, and may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.
Pay Ratio Calculation
To identify the median of the annual total compensation of all of our employees, as well as to determine the annual total compensation of our median employees and our CEO, we took the following steps. First, we selected March 31, 20182020 as the date on which we would identify the “median employee” of our Company. This date was selected because it is the last day of our fiscal year and would provide a fair representation of our employee population. We determined that, as of March 31, 2018,2020, our employee population consisted of approximately 4,5332,769 individuals with 3,419 located inthat had been employed over the United States and 1,114 located in Mexico.prior twelve months. This population consisted of our full-time, part-time, and temporary employees. Next, to identify the “median employee” from our employee population, we comparedreviewed total gross compensation per employee from our payroll records for the twelve month period ending on March 31, 2018. We did not make any cost of living adjustments for our Mexico employees.2020.
Once we identified our median employee, we calculated such employee’s compensation for fiscal year 20182020 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K.
With respect to the annual total compensation of our CEO, we annualizedused the total compensation of our CEO serving on March 31, 2018, as such total compensation is reported in the "2018"2020 Summary Compensation Table,Table." due to the fact that our former interim CEO serving on that date had only been employed as of March 31, 2018 for approximately three months of fiscal year 2018.
DIRECTOR COMPENSATION
The following table summarizes the compensation the Company paid to non-employee members of the Board of Directors for the fiscal year ended March 31, 2018:2020:
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Name | Fees Earned or Paid in Cash ($) (1) | Changes in Pension Value and Non-qualified Deferred Compensation Earnings ($) (2) | All Other Compensation ($) | Total ($) |
K. R. Bramlett Jr. | 50,000 | — | — | 50,000 |
S. Vassalluzzo | 40,000 | — | — | 40,000 |
C. D. Way | 55,000 | — | — | 55,000 |
D. Whitaker | 40,000 | — | — | 40,000 |
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Name | | Fees Earned or Paid in Cash ($) (1) | | Stock Awards ($)
| | Option Awards ($)
| | Non-Equity Incentive Plan Compensation ($) | | Changes in Pension Value and Non-qualified Deferred Compensation Earnings ($) (2) | | All Other Compensation ($) | | Total ($) |
K. R. Bramlett | | 50,000 | | — | | — | | — | | — | | — | | 50,000 |
J. R. Gilreath (3) | | 40,000 | | — | | — | | — | | — | | — | | 40,000 |
S. Vassalluzzo (4) | | 40,000 | | — | | — | | — | | — | | — | | 40,000 |
C. D. Way | | 55,000 | | — | | — | | — | | — | | — | | 55,000 |
D. Whitaker | | 40,000 | | — | | — | | — | | — | | — | | 40,000 |
(1)For fiscal year 2020, each non-employee director was paid a $10,000 quarterly retainer, except the Chair of the Audit and Compliance Committee and the Chair of the Compensation and Stock Option Committee, who received quarterly retainers of $13,750 and $12,500, respectively. No additional fees were paid for attendance at meetings.
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(1) | For fiscal year 2018, each non-employee director was paid a $10,000 quarterly retainer, except the Chairman of the Audit and Compliance Committee and the Chairman of the Compensation and Stock Option Committee, who received quarterly retainers of $13,750 and $12,500, respectively. No additional fees were paid for attendance at meetings. |
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(2) | The Company offers a deferred fee plan for its non-employee directors under which participating directors may defer any or all of their retainer and meeting fees for specified time periods. The deferred fee plan is non-qualified for tax purposes. Deferred fees under the plan earn interest at the prime rate or, at each participating director’s option, a return based on the Company’s stock price performance over time. During fiscal 2018, none of the directors elected to defer any fees under this plan. |
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(3) | Mr. Gilreath resigned from the Board in May 2018. |
(2)The Company offers a deferred fee plan for its non-employee directors under which participating directors may defer any or all of their retainer and meeting fees for specified time periods. The deferred fee plan is non-qualified for tax purposes. Deferred fees under the plan earn interest at the prime rate or, at each participating director’s option, a return based on the Company’s stock price performance over time. During fiscal 2020, none of the directors elected to defer any fees under this plan.
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(4) | Mr. Vassalluzzo does not receive any equity compensation for his service as a member of our Board of Directors. |
The Company pays its non-employee directors quarterly retainer fees. No additional fees are currently paid for meeting attendance. For the year ended March 31, 2018,2020, non-employee directors received a $10,000 quarterly retainer fee, except for the ChairmenChairs of the Audit and Compliance Committee and the Compensation and Stock Option Committee, who received quarterly retainers of $13,750 and $12,500, respectively. Non-employee directors are also eligible to receive grants of non-qualified stock options and/or restricted stock under the Company’s 2008 and 2011 Plans and/or various equity award grants of under the Company’s 2017 Plan. However, no new equity awards were granted to non-employee directors during fiscal 2020. All directors are reimbursed for ordinary and necessary out-of-pocket expenses incurred in attending meetings of the Board of Directors and its committees.
As previously disclosed, during fiscal 2019, the Company granted each non-employee director, except Mr. Vassalluzzo, 4,998 shares of restricted stock under the 2017 Plan and nonqualified stock options for 6,000 shares under the 2011 Plan. These equity awards vest in equal annual installments on each of the first six anniversaries of the grant date, subject to continued service on the Board through the vesting date or as otherwise provided in the applicable plan or award agreement.
The table below sets forth information with respectthe total number of shares subject to the value atstock awards and option awards outstanding as of March 31, 2018 of all unexercised options and shares of unvested restricted stock2020 held by non-employee directors.
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| Option Awards | | Stock Awards |
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
K. R. Bramlett | 5,000 | — | — | 74.08 | 12/7/22 | | — | — | — | — |
K. R. Bramlett | — | — | — | — | — | | 1,920 | 202,176 | — | — |
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J. R. Gilreath (1) | 5,000 | — | — | 74.08 | 12/7/22 | | — | — | — | — |
J. R. Gilreath (1) | | | | | | | 1,920 | 202,176 | | |
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S. Vassalluzzo (2) | — | — | — | — | — | | — | — | — | — |
S. Vassalluzzo (2) | — | — | — | — | — | | — | — | — | — |
| | | | | | | | | | |
C. D. Way | 5,000 | — | — | 74.08 | 12/7/22 | | — | — | – | – |
C. D. Way | — | — | — | — | — | | 1,920 | 202,176 | — | — |
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D. Whitaker | 5,000 | — | — | 74.08 | 12/7/22 | | — | — | — | — |
D. Whitaker | — | — | — | — | — | | 1,920 | 202,176 | — | — |
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Name | Option Awards | Stock Awards |
K. R. Bramlett Jr. | 11,000 | 4,165 |
S. Vassalluzzo | — | — |
C. D. Way | 11,000 | 4,165 |
D. Whitaker | 11,000 | 4,165 |
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(1) | Mr. Gilreath resigned from the Board in May 2018. The information provided is based on information made available to us. |
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(2) | Mr. Vassalluzzo does not receive any equity compensation for his service as a member of our Board of Directors. |
PROPOSAL 2 - APPROVAL, ON AN ADVISORY
BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, we are asking shareholders to vote, on an advisory (non-binding) basis, to approve the compensation of our Named Executive Officers as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our executive compensation program. Our most recent vote concerning the frequency of the say-on-pay vote was at our 2018 annual meeting of shareholders. Taking into consideration those voting results, we determined that we will hold an annual advisory vote to approve the compensation of our Named Executive Officers until the next required advisory vote on the frequency of such votes.
The Company’s compensation policies and programs are designed to attract and retain experienced and highly-qualified executives critical to our long-term success and to reward performance that is aligned with shareholder interests. The Board believes that our compensation policies and programs achieve those objectives. We encourage you to closely review the “Compensation“Compensation Discussion and Analysis”Analysis” and “Executive Compensation”“Executive Compensation” sections of this Proxy Statement for more information on our Named Executive Officers’ compensation.
Compensation Highlights
The following highlights of our executive compensation program in fiscal 2018 exemplify our long-standing commitment to sound compensation practices:
Variable incentives are payable to NEOs as annual cash bonuses to encourage the achievement of various pre-determined performance metrics, business growth opportunities, management goals and profitability of business units, all of which focus our NEOs on performance goals intended to enhance shareholder value.
•Awards of long-term equity incentives, in the form of performance-based stock awards, stock options, restricted stock awards and restricted stock units, directly align the interests of our NEOs with those of shareholders.
•Linking the personal financial interests of our NEOs to the Company’s long-term performance discourages excessive risk-taking and encourages behavior that supports sustainable shareholder value creation.
We seek to engage in responsible compensation and governance practices that incorporate industry best standards and promote the interest of our shareholders. These practices include:
•Utilizing a mix of short-term and long-term incentivesincentive-based compensation to align NEOs’ interests with that of shareholders.
•Maintaining an independent compensation committee that complies with SEC and NASDAQ public company independence requirements, meets Section 162(m) “outside director” (to the extent required by applicable law) and Rule 16b-3 “non-employee director” requirements (to the extent required by applicable law and rules) and includes individuals with public company compensation committee experience.
The Board recommends that our shareholders vote in favor of the following resolution:
“RESOLVED, that the compensation paid to the Company’s Named Executive Officers as disclosed pursuant to the compensation disclosure requirements of the U.S. Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables, and the related narrative discussion provided in this Proxy Statement, is hereby approved.”
Although this “say-on-pay”say-on-pay vote is advisory and, therefore, will not be binding on the Company, the Compensation and Stock Option Committee and the Board value the opinions of the Company’s shareholders. Accordingly, to the extent that there is a significant vote against the compensation of the Named Executive Officers, the Board will
consider the shareholders’ concerns, and the Compensation and Stock Option Committee and the Board will evaluate what actions may be necessary or appropriate to address those concerns.
Required Vote and Recommendation
The affirmative vote of a majority of the votes cast by the holders of shares entitled to vote at the Annual Meeting is required to approve, on an advisory basis, the “say-on-pay”say-on-pay resolution supporting the compensation of our Named Executive Officers. You may vote “for” or “against” or “abstain” from voting with respect to this proposal. Abstentions and “broker non-votes,” if any, will have no effect on the outcome of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL, ON AN ADVISORY (NON-BINDING) BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
PROPOSAL 3 - AMEND BYLAWS TO REVISE THE
NUMBER OF DIRECTORS
Article III, Section 2 of the Bylaws currently provides that the number of directors on the Board shall be not less than five (5) nor more than fifteen (15). This number may only be changed by an amendment to Article III, Section 2 of the Bylaws, adopted by the vote or written consent of the Company’s shareholders.
Title 33, Chapter 8 of the South Carolina of Laws provides that the number of directors should consist of one or more individuals with the number specified in or fixed in accordance with the articles of incorporation or bylaws of a corporation. Our Board has approved, and recommends that our shareholders approve, an amendment to Article III, Section 2 to provide that the number of directors shall be fixed from time to time by a resolution of a majority of the directors or by a resolution of shareholders at any meeting, which number shall not be less than three (3). Additionally, our Board has approved, and recommends that our shareholders approve, a corresponding amendment to Article VIII, Section 9.
The proposed amendments to the Company’s Bylaws to implement this proposal is set forth below, showing the changes to Article III, Section 2 and Article VIII, Section 9 resulting from the proposed amendment with deletions indicated by strike-outs and additions indicated by both italicizing and underlining:
“Article III, Section 2.Number, Term and Qualifications. The number of directors constituting the Board of Directors shall be not less than five (5) nor more than fifteen (15). Thethe number of directors shall be fixed from time to time by a resolution of thea majority of the board of directors or by a resolution of the shareholders at any meeting; but in, which number shall not be less than three. In the absences of such resolution, the number of directors elected at the meeting shall constitute the number of directors of the corporation until the next annual meeting of the shareholders, unless the number is changed prior to such meeting in the manner set forth above. Each director shall hold office from the time of his or her election and qualification until the annual meeting of shareholders next succeeding his or her election and until his or her successor shall have been duly elected and qualified, or until his or her earlier death, resignation or removal. Directors need not be residents of the state of South Carolina or shareholders of the corporation.”
“Article VIII, Section 9. Amendments. Except as otherwise provided herein or by applicable law, these bylaws may be amended or repealed and new bylaws may be adopted by the affirmative vote of a majority of the directors then holding office at any regular or special meeting of the Board of Directors.
The Board of Directors shall have no power to adopt a bylaw: (1) requiring more than a majority of the voting shares for a quorum at a meeting of shareholders or more than a majority of the votes cast to constitute action by the shareholders, except as in accordance with the corporation’s articles of incorporation or as required by law; (2) providing for the management of the corporation otherwise than by the Board of Directors or its committees; (3) increasing or decreasing the number of directors beyondbelow the rangeminimumset forth in Article III, Section 2 hereof; or (4) classifying and staggering the election of directors.
No bylaw adopted or amended by the shareholders shall be altered or repealed by the Board of Directors.”
This amendment will provide the Board with greater flexibility and discretion to meet future needs, including lowering the risk of having unfilled vacancies while allowing the board flexibility to recruit additional qualified directors to serve on the Board. If the shareholders vote to approve this proposal, the Company shall adopt an Eighth Amended and Restated Bylaws (the “New Bylaws”), effective as of the passage of this Proposal 3. The foregoing summary of the amendment is qualified in its entirety by reference to the full text of Article III, Section 2 and Article VIII, section 9 of the New Bylaws, a copy of which is attached hereto as Appendix A. Shareholders are urged to read carefully the full text of Article III, Section 2 and Article VIII, Section 9 of the New Bylaws.
Required Vote and Recommendation
Approval of the amendment to our Bylaws to amend the number of directors requires the affirmative vote of a majority of the votes cast in person or by proxy at the Annual Meeting. You may vote “for” or “against” or “abstain” from voting with respect to this proposal. Abstentions and “broker non-votes,” if any, are not counted as votes cast and will have no effect on the outcome of the vote on this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO THE COMPANY’S BYLAWS TO REVISE THE NUMBER OF DIRECTORS.
PROPOSAL 4 - RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit and Compliance Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent registered public accounting firm. The Audit and Compliance Committee engages in an annual evaluation of the independent public accounting firm’s qualifications and also considers the advisability and potential impact of selecting a different independent registered public accounting firm.
After assessing the performance and independence of the Company’s independent registered public accounting firm for fiscal years 20172019 and 2018,2020, RSM US LLP, the Audit and Compliance Committee believes that retaining RSM US LLP is in the best interests of our Company and has therefore appointed RSM US LLP as our independent registered public accounting firm to audit the consolidated financial statements and the effectiveness of internal control over financial reporting of the Company and its subsidiaries for the 20192021 fiscal year.
Although it is not required to do so, our Board is asking shareholders to ratify RSM US LLP’s appointment as a matter of good corporate governance. If our shareholders do not ratify the appointment, the Audit and Compliance Committee will consider changing our independent registered public accounting firm for the 20192021 fiscal year, but it is not required to do so. Whether or not shareholders ratify RSM US LLP’s appointment, the Audit and Compliance Committee may appoint a different independent registered public accounting firm at any time if it determines that such a change is appropriate.
RSM US LLP has advised our Audit and Compliance Committee that the firm did not have any direct financial interest or any material indirect financial interest in the Company or any of its subsidiaries during the Company’s most recent fiscal year. We expect representatives of RSM US LLP to be present at the Annual Meeting with the opportunity to make a statement if they so desire, and we expect them to be available to respond to appropriate questions.
Audit Fees
The table below and the accompanying footnotes set forth the fees paid by the Company to RSM US LLP, for our last two fiscal years:
| | | | | | | | | | | |
Description | Fiscal 2020 | | Fiscal 2019 |
Audit fees (1) | $ | 965,950 | | | $ | 886,371 | |
Audit-related fees (2) | 54,080 | | | 35,378 | |
Tax fees | — | | | — | |
All other fees | — | | | — | |
Total fees for all services | $ | 1,020,030 | | | $ | 921,749 | |
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| | | | | | | |
Description | Fiscal 2018 |
| | Fiscal 2017 |
|
Audit fees (1) | $ | 948,992 |
| | $ | 789,000 |
|
Audit-related fees (2) | 22,050 |
| | 26,000 |
|
Tax fees | — |
| | — |
|
All other fees | — |
| | — |
|
Total fees for all services | $ | 971,042 |
| | $ | 815,000 |
|
(1)Audit fees consisted of fees paid for assurance and related services related to the performance of the audit of our annual financial statements, review of the financial statements included in our quarterly reports on Form 10-Q, and services normally provided in connection with our statutory and regulatory filings.(2)Audit-related fees consisted of fees paid for services related to the performance of the audit of our employee benefit plan.
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(1) | Audit fees consisted of fees paid for assurance and related services related to the performance of the audit of our annual financial statements, review of the financial statements included in our quarterly reports on Form 10-Q and services normally provided in connection with our statutory and regulatory filings.
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(2) | Audit-related fees consisted of fees paid for services related to the performance of the audit of our employee benefit plan.
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Our Audit and Compliance Committee pre-approves all audit and permitted non-audit services provided to the Company by its independent registered public accounting firm. Our Audit and Compliance Committee annually pre-approves a list of services that the independent registered public accounting firm may provide, which consists of audit services, audit-related services, tax services, and all other services. If the Company requests, or the
independent registered public
accounting firm suggests, additional services during the year, these services may be undertaken only after review and approval by the Audit and Compliance Committee Chairman,Chair, who then reports on such services to the full Audit and Compliance Committee at its next regularly scheduled meeting after approval by the Chairman.Chair. No audit or non-audit services were approved pursuant to the de minimis exception to the audit committee pre-approval requirements specified in Rule 2-01(c)(7)(i)(C) of Regulation S‑X.S-X.
Required Vote and Recommendation
Approval of the proposal to ratify the appointment of RSM US LLP as the Company’s independent registered public accounting firm for the 20192021 fiscal year requires the affirmative vote of a majority of the shares of common stock voted on the proposal. You may vote “for” or “against” or “abstain” from voting with respect to this proposal. Abstentions, if any, are not counted as votes cast and will have no effect on the outcome of the vote on this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFYING THE APPOINTMENT OF RSM US LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 20192021 FISCAL YEAR.
REPORT OF THE AUDIT AND COMPLIANCE COMMITTEE
The Audit and Compliance Committee is composed of three directors, Charles D. Way (Chairman)(Chair), Ken R. Bramlett, Jr., and Darrell E. Whitaker, each of whom is independent within the meaning of both the applicable NASDAQ rules and the standards of independence for audit committee members under the Exchange Act. The Board has also determined that each current committee member is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K. The Audit and Compliance Committee operates under a written charter approved by the Board.
The Company’s management is responsible for the Company’s financial reporting process, including the preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles, and for the Company’s system of internal controls, including establishing and maintaining adequate internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for performing an independent audit of those financial statements and the effectiveness of the Company’s internal control over financial reporting. The responsibility of the Audit and Compliance Committee is to assist the Board in fulfilling its oversight responsibilities by monitoring these processes. The Audit and Compliance Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements. The Audit and Compliance Committee’s oversight of these processes and considerations and discussions with management and with the Company’s independent registered public accounting firm do not assure that the Company’s financial statements are presented in accordance with generally accepted accounting principles, that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards, or that the Company has maintained effective internal control over financial reporting.
The Audit and Compliance Committee met with our management and our independent registered public accounting firm, RSM US LLP, to review and discuss the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2018.2020. The Audit and Compliance Committee also discussed with RSM US LLP the matters required to be discussed by Auditing Standard 1301, “Communications with Audit Committees,” issued by the Public Company Accounting Oversight Board (“PCAOB”).
The Audit and Compliance Committee received the written disclosures and the letter from RSM US LLP required by applicable requirements of the PCAOB regarding RSM US LLP’s communications with the Audit and Compliance Committee concerning independence, and the committee discussed with RSM US LLP that firm’s independence. In particular, the Audit and Compliance Committee considered whether the provision of non-audit services described above is compatible with maintaining the independence of the accountants.
Based upon the Audit and Compliance Committee’s review and discussions described above, the Audit and Compliance Committee recommended that the Board include the audited consolidated financial statements for the fiscal year ended March 31, 20182020 in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018,2020, for filing with the Securities and Exchange Commission.
Audit and Compliance Committee
Charles D. Way, ChairmanChair
Ken R. Bramlett, Jr.
Darrell E. Whitaker
SUBMISSION OF FUTURE SHAREHOLDER PROPOSALS AND NOMINATIONS
FOR THE 20192021 ANNUAL MEETING OF SHAREHOLDERS
Under certain conditions, shareholders may request that we include a proposal or director nomination at a forthcoming meeting of our shareholders in the proxy materials of the Company for such meeting. Under SEC Rule 14a-8, any shareholder desiring to present a proposal to take action at the 20192021 annual meeting of shareholders and include such proposal in our proxy materials must ensure that we receive the proposal by March 18, 2019.19, 2021. Failure to deliver a proposal in accordance with this procedure may result in it not being deemed timely received.
In order for a shareholder proposal, including a nomination for election to the Board of Directors, to be submitted at the 20192021 annual meeting of shareholders (but not included in our proxy statement) the proposal must be received by the Company’s Corporate Secretary at least 90 but not more than 120 days prior to the first anniversary of the preceding year’s annual meeting. Consequently, any shareholder proposal to be submitted at the 20192021 annual meeting of shareholders (but not included in our proxy statement) will not be considered timely unless the notice required by our Bylaws is delivered to the Corporate Secretary not earlier than the close of business on April 26, 201919, 2021 and not later than the close of business on May 26, 2019.19, 2021.
The shareholder notice, with respect to all shareholder proposals, must comply in all respects with the information required by Article II, Section 2 of the Company’s Bylaws. A copy of the Company’s Bylaws is available upon written request to: World Acceptance Corporation, P.O. Box 6429, Greenville, South Carolina 29606, Attention: Corporate Secretary.
It is presently anticipated that the Company’s 20192021 annual meeting of shareholders will be held in August 2019.2021. However, if the date of the 20192021 annual meeting of shareholders is advanced by more than 30 days or delayed by more than 60 days from the one-year anniversary of the date of the Annual Meeting, the Company will, in a timely manner, provide public notice of the new date of the 20192021 annual meeting of shareholders and the new dates by which shareholder proposals submitted pursuant to and outside of SEC Rule 14a-8 must be received by the Company.
OTHER MATTERS
The Board and the Company’s officers are not aware of any other matters that may be presented for action at the Annual Meeting, but if other matters do properly come before the Annual Meeting, it is intended that shares of common stock represented by proxies in the accompanying form will be voted by the persons named in the proxy in accordance with their best judgment.
EIGHTH AMENDED AND RESTATED BYLAWS
OF WORLD ACCEPTANCE CORPORATION
(Revised as of August 24, 2018)
OFFICES
Section 1.Principal Office . The principal office of the corporation shall be located at 108 Frederick Street, Greenville, South Carolina, or at such other location as may from time to time be approved by the corporation’s Board of Directors.
Section 2.Registered Office. The registered office of the corporation required by law to be maintained in the State of South Carolina may be, but need not be, identical with the principal office.
Section 3.Other Offices. The corporation may have offices at such other places, either within or without the State of South Carolina, as the Board of Directors may designate or as the affairs of the corporation may require from time to time.
MEETINGS OF SHAREHOLDERS
Section 1.Place of Meetings. All meetings of shareholders shall be held at the principal office of the corporation, or at such other place, either within or without the State of South Carolina, as shall be designated by the Board of Directors.
Section 2.Annual Meetings. The annual meeting of shareholders for the election of directors and the transaction of other business shall be held in August of each year on any day (except a Saturday, Sunday or legal holiday) in that month as determined by the Board of Directors, or on such other date as the Board of Directors may from time to time otherwise determine. No business (including nominations) shall be transacted at an annual meeting of shareholders, except such business as shall be (a) specified in the notice of meeting given as provided in Section 5 of this Article II, (b) otherwise brought before the meeting by or at the direction of the Board, or (c) otherwise brought before the meeting by a shareholder of record entitled to vote at the meeting, in compliance with the procedure set forth in this Section 2.
For nominations or other business to be brought before an annual meeting by a shareholder pursuant to clause (c) above, the shareholder of record must have timely given written notice thereof to the Secretary of the corporation. To be timely, a shareholder’s notice must be delivered to, or mailed to and received at, the principal office of the corporation by the close of business no less than ninety (90) nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than thirty (30) days or delayed by more than sixty (60) days from such anniversary date, or if no annual meeting was held in the preceding year, notice by the shareholder must be so delivered not earlier than the close of business on the 120th day prior to the annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made by the corporation. In no event shall an adjournment or recess of an annual meeting, or a postponement of an annual meeting for which notice has been given or with respect to which there has been a public announcement of the date of the meeting, commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above. For purposes of this Article II, the term “close of business” means 5:00 p.m. local time at the principal office of the corporation on any calendar day, whether or not the day is a business day.
Such shareholder notice shall set forth:
(A) as to each person proposed to be nominated for election or reelection as a director by the shareholder(s), all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors
in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including such person’s written consent to serving as a director if elected; provided that, in addition to the information required in the notice pursuant to this Section 2, the corporation may require such other information as may reasonably be required by the corporation to determine the proposed nominee’s eligibility to qualify and serve as a director of the corporation, including information relevant to a determination as to whether such proposed nominee can be considered an independent director of the corporation;
(B) as to any other business proposed to be brought before the meeting by the shareholder(s), a brief description of such business (including the text of any resolutions and any amendment to any corporation document proposed for consideration), the reasons for conducting such business at the meeting, any material interest in such business of such shareholder(s) and the beneficial owner(s), if any, on whose behalf the proposal is made, and a description of all agreements, arrangements, and understandings between such shareholder(s) and beneficial owners(s), if any, and any other person or persons (including their names) in connection with the proposal of such business by the shareholder(s); and
(C) as to the shareholder(s) giving the notice and the beneficial owner(s), if any, on whose behalf the proposed nomination or proposal of other business is made (each, a “party”):
(i) the name and address of such party,
(ii) the number of shares of the corporation’s common stock that are held of record or are beneficially owned by such party and, if any such party is an entity, by each director, executive officer, managing member, general partner, or control person of such entity (any such person, a “control person”),
(iii) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or providing for a settlement payment or mechanism based on the price of any class or series of shares capital stock of the corporation or with a value derived in whole or in part from the value of any class or series of shares of capital stock of the corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by each such party and each control person, and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of capital stock of the corporation,
(iv) any proxy, contract, arrangement, understanding, or relationship pursuant to which any party, either directly or acting in concert with another person or persons, has a right to vote, directly or indirectly, any shares of any security of the corporation,
(v) any short interest or other borrowing arrangement in any security of the corporation held by each such party (for purposes of this clause (C)(v), a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security),
(vi) a representation by each such shareholder that such shareholder is a holder of record of common stock of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to bring such proposed nomination or proposal of other business before the meeting,
(vii) any other information relating to each such party that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act (whether or not such party intends to deliver a proxy statement or conduct its own proxy solicitation), and
(viii) a statement as to whether or not each such party will deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of voting power of all of the shares of capital stock of the corporation required under applicable law to carry the proposal or, in the case of a nomination or nominations for election as directors, at least the percentage of voting power of all of the shares of capital stock of the corporation reasonably believed by the party to be sufficient to elect the persons proposed to be nominated by the shareholder(s) of record.
In the event that any information or communication required under clauses (C)(ii) through (C)(v) of this Section 2 is not, when provided, or thereafter ceases to be true, correct, and complete, such party shall notify the Secretary and disclose such information that is required to make such information or communication true, correct, and complete as of the record date and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement
thereof, and such notification shall be delivered to, or mailed and received by, the Secretary of the corporation at the principal office of the corporation not later than five (5) business days after the record date (in the case of a notification required to be made as of the record date) and not later than five (5) business days prior to the date for the meeting or any adjournment or postponement thereof, if practicable or, if not practicable, on the first practicable date prior to the date for the meeting or any adjournment or postponement thereof (in the case of a notification required to be as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).
If a shareholder does not appear at, or send a qualified representative to, an annual meeting to present the matter(s) (including nominations) proposed to be voted on at the meeting, the corporation need not present the matter(s) at the annual meeting, notwithstanding that proxies in respect of such vote may have been received by the corporation. Notwithstanding anything in these bylaws to the contrary, no business (including nominations) shall be conducted at an annual meeting except in accordance with the provisions set forth in this Section 2 of this Article II. Clause (c) of this Section 2 shall be the exclusive means for a shareholder to make director nominations or to propose other business (other than a proposal included in the corporation’s proxy materials pursuant to and in compliance with Rule 14a-8 under the Exchange Act). A person shall not be eligible for election or re-election as a director at an annual meeting unless (i) the person is nominated by a shareholder of record in accordance with the procedure in this Section 2 of this Article II; or (ii) the person is nominated by or at the direction of the Board of Directors. If the Board or the chairman of the annual meeting determines that any business was not properly brought before the meeting in accordance with provisions prescribed by these bylaws, the chairman of the meeting shall have the power to so declare at the meeting and, to the extent permitted by law, to declare that any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 2, a shareholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.
Section 3.Substitute Annual Meeting. If the annual meeting shall not be held on the day designated by these bylaws, a substitute annual meeting may be called in accordance with the provisions of Section 4 of this Article II. A meeting so called shall be designated and treated for all purposes as the annual meeting.
Section 4.Special Meetings. Special meetings of the shareholders may be called at any time by the Chief Executive Officer or by resolution of the Board of Directors of the corporation, and shall be called by the Secretary upon the valid written request of one or more shareholders holding shares of record of the corporation’s common stock representing in the aggregate at least ten (10) percent (the “Requisite Percentage”) of the then outstanding shares of the corporation’s common stock entitled to vote on the matter(s) proposed to be voted on at such meeting (each, a “Requesting Shareholder”). Such special meeting shall be held at such time and at such place within or without the State of South Carolina as may be fixed by the Chief Executive Officer, in the case of meetings called by the Chief Executive Officer, or by resolution of the Board, in the case of meetings called by the Board; and any meeting called at the valid request of the Requesting Shareholder(s) pursuant to this Section 4 shall be held at such date, time, and place as may be fixed by the Board, provided that the date of such special meeting shall not be more than ninety (90) days after the receipt by the Secretary of such request. To be valid, the request or requests must (i) be written, (ii) be delivered to the Secretary at the corporation’s principal executive office (the date on which the Secretary receives the request is the “Delivery Date”), (iii) include the specific purpose(s) of the special meeting of shareholders and the specific matter(s) proposed to be voted on at the special meeting, (iv) include the information required by Section 2 of Article II of these bylaws, (v) include documentary evidence that the Requesting Shareholder(s) own the Requisite Percentage on the Delivery Date, (vi) include a certification that each such Requesting Shareholder will continue to hold at least the number of shares of common stock set forth in the request with respect to each such Requesting Shareholder through the date of the special meeting, and (vii) be signed and dated by the Requesting Shareholder(s) or a duly authorized agent of such Requesting Shareholder(s). If the Requesting Shareholder(s) are not holders of record of the shares representing the Requisite Percentage, then the documentary evidence required by clause (v) of this Section 4 must also include proof that the beneficial owners on whose behalf the request(s) are made beneficially own the Requisite Percentage on the Delivery Date in order for the request to be valid.
Any Requesting Shareholder who submitted a written request for a special meeting of shareholders may revoke that written request at any time by delivering a written revocation to the Secretary at the corporation’s principal executive office. The failure of any Requesting Shareholder to appear at the special meeting of shareholders or to send a qualified representative to the special meeting of shareholders to present such matter(s) to be voted on at the special meeting of shareholders shall also constitute a revocation of such request. If there is more than one Requesting Shareholder and the revocation or deemed revocation by one or more Requesting Shareholders causes the remaining Requesting
Shareholders to hold in the aggregate less than the Requisite Percentage, the Board of Directors, in its discretion, may cancel the special meeting. If none of the Requesting Shareholder(s) appears or sends a qualified representative to the special meeting, the corporation need not present the matter(s) requested by the Requesting Shareholder(s) at the special meeting.
The corporation is not required to call a special meeting of shareholders pursuant to this Section 4 with respect to any matter if (A) the Delivery Date is during the period commencing ninety (90) days prior to the first anniversary of the date of the immediately preceding annual meeting and ending on the date of the next annual meeting, (B) an identical or substantially similar matter was included on the agenda of any annual or special meeting of shareholders held within one hundred twenty (120) days prior to the Delivery Date or will be included on the agenda at an annual or special meeting to be held within ninety (90) days after the Delivery Date (and for purposes of this clause (B), the nomination, election or removal of directors, changing the size of the Board of Directors, and filling of vacancies and/or newly created directorships resulting from any increase in the authorized number of directors shall be considered an identical or substantially similar matter with respect to all matters involving nomination, election or removal of directors, changing the size of the Board of Directors, and filling of vacancies and/or newly created directorships resulting from any increase in the authorized number of directors), (C) the purpose of the special meeting of shareholders is unlawful, or (D) the written request for a special meeting of shareholders itself, including the item(s) of business proposed, violated applicable law(s) or failed to comply with this Section 4.
In no event shall an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described in this Section 4. The business conducted at the special meeting of shareholders called in accordance with this Section 4 shall be limited to the business set forth in the notice of the special meeting; provided, however, that the Board of Directors may submit additional matters to the shareholders at the meeting by including those matters in the notice of the special meeting of shareholders.
Section 5.Notice of Meetings. Written or printed notice stating the time and place of the meeting shall be delivered not less than ten (10) nor more than sixty (60) days before the date of any shareholders’ meeting, either personally or by mail, by or at the direction of the Chief Executive Officer, the Board of Directors, or the Secretary, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at such shareholder’s address as it appears on the record of shareholders of the corporation, with postage thereon prepaid.
In the case of a special meeting, the notice of meeting shall specifically state the purpose or purposes for which the meeting is called; but, in the case of an annual or substitute annual meeting, the notice of meeting need not specifically state the business to be transacted thereat unless such a statement is required by the provisions of the South Carolina Business Corporation Act or other applicable law, regulation or exchange rule.
When a meeting is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. When a meeting is adjourned for less than thirty (30) days in any one adjournment, it is not necessary to give any notice of the adjourned meeting other than by announcement at the meeting at which the adjournment is taken unless a new record date is fixed for the meeting.
Section 6.Voting Lists. Not later than five (5) business days following the date on which notice of a meeting of shareholders is given, the Secretary of the corporation shall prepare an alphabetical list of the shareholders entitled to vote at such meeting or any adjournment thereof, with the address of and number of shares held by each, which list shall be kept on file at the principal office of the corporation for a period of ten (10) days prior to such meeting, and shall be subject to inspection by any shareholder at any time during the usual business hours. This list shall also be produced and kept open at the time and place of the meeting and shall be subject to inspection by any shareholder during the whole time of the meeting or any adjournment thereof.
Section 7.Quorum. A majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders.
The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
In the absence of a quorum at the opening of any meeting of shareholders, such meeting may be adjourned from time to time by the chairman of the meeting or by a vote of the majority of the shares voting on the motion to adjourn; and at any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the original meeting.
Section 8.Proxies. Shares may be voted either in person or by one or more agents authorized by a written proxy executed by the shareholder or by such shareholder’s duly authorized attorney-in-fact. A proxy is not valid after the expiration of eleven months from the date of its execution, unless the person executing it specifies therein the length of time for which it is to continue in force, or limits its use to a particular meeting, but no proxy shall be valid after ten years from the date of its execution.
Section 9.Voting of Shares. Each outstanding share of the corporation’s stock shall be entitled to vote on each matter submitted to a vote at a meeting of shareholders as provided in the corporation’s articles of incorporation, these bylaws or by law.
Except in the election of directors as governed by the provisions of Section 3 of Article III, the vote of a majority of the shares voted on any matter at a meeting of shareholders at which a quorum is present shall be the act of the shareholders on that matter, unless the vote of a greater number is required by law or by the articles of incorporation or bylaws of this corporation.
BOARD OF DIRECTORS
Section 1.General Powers. The business and affairs of the corporation shall be managed by its Board of Directors.
Section 2.Number, Term and Qualifications. The number of directors constituting the Board of Directors shall be the number fixed from time to time by resolution of a majority of the directors or by a resolution of the shareholders at any meeting, which number shall not be less than three. In the absences of such resolution, the number of directors elected at the meeting shall constitute the number of directors of the corporation until the next annual meeting of the shareholders, unless the number is changed prior to such meeting in the manner set forth above. Each director shall hold office from the time of his or her election and qualification until the annual meeting of shareholders next succeeding his or her election and until his or her successor shall have been duly elected and qualified, or until his or her earlier death, resignation or removal. Directors need not be residents of the state of South Carolina or shareholders of the corporation.
Section 3.Election of Directors. Only persons who are nominated in accordance with the provisions set forth in these bylaws shall be eligible to be elected as directors at an annual meeting, or at a special meeting of shareholders called for that purpose. Nomination for election to the Board shall be made by or at the direction of the Board. Nomination for election of any person to the Board may also be made by one or more shareholders at any annual meeting, in accordance with Section 2 of Article II, and at a special meeting of shareholders called for that purpose, if made in accordance with Section 2 of Article II. When a quorum is present at a meeting, all elections of directors shall be determined by a plurality of the votes cast.
Section 4.Removal. Any director may be removed at any time with or without cause by a vote of the shareholders holding a majority of the outstanding shares entitled to vote at an election of directors. However, unless the entire Board is removed, an individual director shall not be removed when the number of shares voting against the proposal for removal would be sufficient to elect a director if such shares could be voted cumulatively at an annual election. If any directors are so removed, new directors may be elected at the same meeting or the vacancies caused by such removal may be filled by the directors as provided in Section 5 of this Article III.
Section 5.Vacancies. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining directors even though less than a quorum, or by the sole remaining director. A director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office or, if earlier, a term that expires at the next shareholders’ meeting at which directors are elected.
Section 6.Chairman of Board. The Board of Directors shall elect an independent director to serve as the non-executive Chairman of the Board. Such election may occur at any meeting of the Board. The Chairman must be an independent director based on the standards for determining director independence set forth by the NASDAQ Stock Market and by the corporation’s Governance Policy. In addition to the duties of all directors (which shall not be limited or diminished by the Chairman’s role), the independent, non-executive Chairman shall be responsible for the following functions: (i) coordinating the activities of the independent directors; (ii) advising the Board as to an appropriate schedule of Board and Committee meetings, seeking to ensure that the independent directors can perform their duties responsibly, while not interfering with the flow of the corporation’s operations; (iii) providing significant input on agendas for the Board and Committee meetings, as well as the information sent to directors, while seeking input on the same from
other directors; (iv) receiving and overseeing responses to direct shareholder communications to independent directors; (v) approving the retention of counsel or consultants who report directly to the Board; (vi) coordinating and developing the agenda for, and chairing executive sessions of, the corporation’s independent directors; (vii) acting as the non-exclusive but principal liaison between the independent directors and the Chief Executive Officer on topics or issues as requested by the independent directors, any Committee of the Board, or any other sensitive issues or topics; (viii) presiding at all meetings of the Board; and (ix) performing such other duties as may be directed by the Board.
Section 7.Compensation. The Board of Directors may compensate directors for their services as such and may provide for the payment of any or all expenses incurred by directors in attending regular and special meetings of the Board.
MEETINGS OF DIRECTORS
Section 1.Regular Meetings. A regular meeting of the Board of Directors shall be held immediately after, and at the same place as, the annual meeting of shareholders. In addition, the Board of Directors may provide, by resolution, the time and place, either within or without the State of South Carolina, for the holding of additional regular meetings.
Section 2.Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the Chief Executive Officer or any two directors. Such a meeting may be held either within or without the State of South Carolina, as fixed by the person or persons calling the meeting.
Section 3.Notice of Meetings. Regular meetings of the Board of Directors may be held without notice. The person or persons calling a special meeting of the Board of Directors shall, at least twelve (12) hours before the meeting, give notice thereof by any usual means of communication (including, without limitation, by telephone, facsimile transmission, or electronic mail). Such notice need not specify the purpose for which the meeting is called.
Section 4.Waiver of Notice. Any director may waive notice of any meeting. The attendance by a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.
Section 5.Quorum. The presence of a majority of the full Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors.
Section 6.Manner of Acting. Except as otherwise provided in these bylaws, in the articles of incorporation or by law, the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.
Section 7.Presumption of Assent. A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his or her contrary vote is recorded or his or her dissent is otherwise entered in the minutes of the meeting or unless he or she shall file his or her written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.
Section 8.Informal Action by Directors. Action may be taken by the Board of Directors, or a committee thereof, without a meeting if all members consent thereto in writing or provide assent by electronic transmission, and the writings or electronic transmissions are filed with the minutes of the proceedings of the Board.
Section 9.Meeting by Use of Conference Telephone. Any one or more directors or members of a committee may participate in a meeting of the Board of Directors or any of its committees by means of a conference telephone or similar communications device which allows all persons participating in the meeting to hear each other, and such participation in a meeting shall be deemed presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
Section 10. Committees of the Board of Directors. There are hereby designated three standing committees of the Board of Directors: Audit and Compliance Committee, Compensation and Stock Option Committee, and Nominating and Corporate Governance Committee. The Board of Directors shall adopt a written charter for each such standing committee addressing its purpose, responsibilities, powers, authority, and any other matter required by law. In addition to the standing committees, the Board of Directors may from time to time designate additional committees of the Board of Directors, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board
of Directors and shall, for those committees and any others provided for herein, elect the director or directors to serve as the member or members of each such committee, designating the chair of each such committee and, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of each such committee. In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.
OFFICERS
Section 1.Officers of the Corporation. The officers of the corporation shall consist of a Chief Executive Officer, a President, a Secretary, a Treasurer and such Vice Presidents, Assistant Secretaries, Assistant Treasurers, and other officers as the Board of Directors may from time to time elect. Any two or more offices may be held by the same person, but no officer may act in more than one capacity where action of two or more officers is required.
Section 2.Election and Term. The officers of the corporation shall be elected by the Board of Directors and each officer shall hold office until his or her death, resignation, retirement, removal, disqualification or his or her successor shall have been elected and qualified.
Section 3.Compensation of Officers. The compensation of all officers of the corporation shall be fixed by the Board of Directors, a duly authorized committee of the Board of Directors, or by such officers as may be designated by resolution of the Board of Directors.
Section 4.Removal. Any officer of the corporation may be removed at any time, with or without cause, by the Board of Directors.
Section 5.Chief Executive Officer. Subject to the direction and control of the Board of Directors, the Chief Executive Officer shall be the principal executive officer of the corporation, shall supervise and control the management of the corporation and shall have such duties and authority as are normally incident to the position of chief executive officer of a corporation and such other duties and authority as may be prescribed from time to time by the Board of Directors.
Section 6.President. Subject to the direction and control of the Board of Directors and the Chief Executive Officer (if another officer shall be the Chief Executive Officer), the President shall be the chief operating and administrative officer of the corporation (in the absence of the delegation of such duties to another officer by the Board of Directors), with general responsibility for the management and control of the operations and administration of the corporation, and shall perform all duties and have all powers which are commonly incident to the office of president and such other duties and authority as may be prescribed from time to time by the Board of Directors. In the absence or disability of the Chief Executive Officer (if another officer shall be the Chief Executive Officer), the President shall have the authority and perform the duties of said office, subject to the direction and control, or other designation, of the Board of Directors.
Section 7.Vice Presidents. The Vice President, and if there be more than one, the Executive Vice President or other Vice President designated by the Board of Directors, shall, in the absence or disability of the President, have the authority and perform the duties of said office. In addition, each Vice President shall perform such other duties and have such other powers as are normally incident to the office of Vice President or as shall be prescribed by the Chief Executive Officer, the President, or the Board of Directors. The title of any Vice President may, but need not, include any additional designation descriptive of such officer’s duties as the Board of Directors may prescribe.
Section 8.Secretary. The Secretary shall have the responsibility and authority to maintain and authenticate the records of the corporation; shall keep, or cause to be kept, accurate records of the acts and proceedings of all meetings of shareholders, directors and committees; shall give, or cause to be given, all notices required by law and by these bylaws (unless otherwise specified herein); shall have general charge of the corporate books and records and of the corporate seal, and shall affix the corporate seal to any lawfully executed instrument requiring it; shall have general charge of the stock transfer books of the corporation and shall keep, or cause to be kept, all records of shareholders as are required by applicable law or these bylaws; shall sign such instruments as may require the signature of the Secretary; and, in general, shall perform all duties incident to the office of Secretary and such other duties as may be assigned to him or her from time to time by the Chief Executive Officer, the President, or the Board of Directors.
Section 9.Treasurer. The Treasurer shall have custody of all funds and securities belonging to the corporation and shall receive, deposit or disburse the same under the direction of the Board of Directors; shall keep, or cause to be kept, full and accurate accounts of the finances of the corporation in books especially provided for that purpose, and shall generally have charge over the corporation’s accounting and financial records; shall cause a true statement of its assets and liabilities as of the close of each fiscal year, and of the results of its operations and of cash flows for such fiscal year, all in reasonable detail, including particulars as to convertible securities then outstanding, to be made as soon as practicable after the end of such fiscal year. The Treasurer shall also prepare and file, or cause to be prepared and filed, all reports and returns required by Federal, State or local law and shall generally perform all other duties incident to the office of Treasurer and such other duties as may be assigned to him or her from time to time by the Chief Executive Officer, the President, or the Board of Directors.
Section 10. Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries and Assistant Treasurers, if any, shall, in the absence or disability of the Secretary or the Treasurer, respectively, have all the powers and perform all of the duties of those offices, and they shall in general perform such other duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the Chief Executive Officer, the President, or the Board of Directors.
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1.Contracts. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.
Section 2.Loans. No loans shall be obtained on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.
Section 3.Checks and Drafts. All checks, drafts or other orders for the payment of money, issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by the Board of Directors or by any officer or officers so authorized by the Board of Directors.
Section 4.Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such depositories as selected by the Board of Directors or by any officer or officers so authorized by the Board of Directors.
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1.Certificates for Shares. The shares of the corporation may be represented by certificates in such form as shall be determined by the Board of Directors. Certificates, if any, shall be signed by the Chief Executive Officer, the President or a Vice President and by the Secretary or Treasurer or an Assistant Secretary or Assistant Treasurer. Any certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number and class of shares and the date of issue, shall be entered on the stock transfer books of the corporation. Notwithstanding the foregoing, the Board of Directors may provide that some, any or all of any classes or series of the corporation’s shares be represented by uncertificated shares.
Section 2.Transfer of Shares. Transfer of shares of the corporation shall be made only on the stock transfer books of the corporation by the holder of record thereof or by such holder’s legal representative, who shall furnish proper evidence of authority to transfer, or by such holder’s attorney thereunto authorized by power of attorney duly executed and filed with the Secretary, and on surrender for cancellation of the certificate for such shares.
Section 3.Lost Certificate. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the corporation claimed to have been lost or destroyed, upon receipt of an affidavit of such fact from the person claiming the certificate of stock to have been lost or destroyed. When authorizing such issue of a new certificate, the Board of Directors shall require that the owner of such lost or destroyed certificate, or such owner’s legal representative, give the corporation a bond in such sum as the Board may direct as indemnity against any claim that may be made against the corporation with respect to the certificate claimed to have been lost or destroyed,
except where the Board of Directors by resolution finds that in the judgment of the directors the circumstances justify omission of a bond.
Section 4.Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may, except as otherwise required by law, fix a record date, which record date shall not precede the date on which the resolutions fixing the record date are adopted and which record date shall not be more than seventy (70) days nor less than ten (10) days immediately preceding the date on which the particular action, requiring such determination of shareholders, is to be taken.
If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders.
A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting, which it must do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting.
Section 5.Holder of Record. The corporation may treat as absolute owner of shares the person in whose name the shares stand of record on its books just as if that person had full competency, capacity and authority to exercise all rights of ownership irrespective of any knowledge or notice to the contrary or any description indicating a representative, pledge or other fiduciary relation or any reference to any other instrument or to the rights of any other person appearing upon its record or upon the share certificate except that any person furnishing to the corporation proof of such person’s appointment as a fiduciary shall be treated as if he were a holder of record of its shares.
GENERAL PROVISIONS
Section 1.Dividends. The Board of Directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares in cash, property, or its own shares pursuant to law and subject to the provisions of its articles of incorporation.
Section 2.Seal. The corporate seal of the corporation shall consist of two concentric circles between which is the name of the corporation and in the center of which is inscribed SEAL; and such seal, as impressed on the margin hereof, is hereby adopted as the corporate seal of the corporation.
Section 3.Waiver of Notice. Whenever any notice is required to be given to any shareholder or director by law, by the articles of incorporation or by these bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice, provided that the waiver is included in the minutes or filed with the corporate records.
Section 4.Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she (or a person for whom he or she is a representative) is or was a director or an officer of the corporation or is or was serving at the request of the corporation in any position or capacity for any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (hereinafter an “indemnitee”), shall be indemnified and held harmless by the corporation to the fullest extent permitted by South Carolina law, as the same exists or may hereafter be amended, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) incurred or suffered by such indemnitee in connection therewith.
Section 5.Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 4 of this Article VIII, the corporation shall, to the fullest extent not prohibited by applicable law, pay the expenses (including attorneys’ fees) incurred by an indemnitee in defending any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, an advancement of expenses incurred by an indemnitee shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by that such indemnitee is not entitled to be indemnified for such expenses under Section 4 of this Article VIII or otherwise.
Section 6.Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this Article VIII shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, the corporation’s articles of incorporation, bylaws, agreement, vote of stockholders or directors, or otherwise.
Section 7. Nature of Rights. The rights conferred upon indemnitees in this Article VIII shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director or officer of the corporation and shall inure to the benefit of the indemnitee’s heirs, executors, and administrators. Any amendment, alteration, or repeal of this Article VIII that adversely affects any right of an indemnitee or such indemnitee’s successors shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.
Section 8. Fiscal Year. The fiscal year of the corporation shall be fixed by the Board of Directors.
Section 9. Amendments. Except as otherwise provided herein or by applicable law, these bylaws may be amended or repealed and new bylaws may be adopted by the affirmative vote of a majority of the directors then holding office at any regular or special meeting of the Board of Directors.
The Board of Directors shall have no power to adopt a bylaw: (1) requiring more than a majority of the voting shares for a quorum at a meeting of shareholders or more than a majority of the votes cast to constitute action by the shareholders, except as in accordance with the corporation’s articles of incorporation or as required by law; (2) providing for the management of the corporation otherwise than by the Board of Directors or its committees; (3) decreasing the number of directors below the minimum set forth in Article III, Section 2 hereof; or (4) classifying and staggering the election of directors.
No bylaw adopted or amended by the shareholders shall be altered or repealed by the Board of Directors.
Section 10. Exclusive Forum. Unless the corporation consents in writing to the selection of an alternative forum, and to the fullest extent permitted by law, the sole and exclusive forum for: (a) any derivative action or proceeding brought on behalf of the corporation; (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the corporation to the corporation or the corporation's shareholders; (c) any action asserting a claim arising pursuant to any provision of the South Carolina Business Corporation Act of 1988 or the corporation’s articles of incorporation or bylaws (as each may be amended from time to time); or (d) any action asserting a claim governed by the internal affairs doctrine shall only be the state courts of South Carolina or the United States District Court for the District of South Carolina.
Notice of Annual Meeting of Shareholders
and
Proxy Statement
Annual Meeting of Shareholders
to be held on
August 24, 2018
FRONT
FRONT
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Revocable Proxy ANNUAL MEETING OF SHAREHOLDERS to be held on August 24, 201818, 2020
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints R. Chad Prashad and Keith T. LittrellLuke J. Umstetter as Proxies and each of them individually and with the power to appoint his or her substitute, and hereby authorizes each of them to represent and to vote, as designated below, all the shares of common stock of World Acceptance Corporation (the “Company”) held of record by the undersigned on June 27, 2018July 7, 2020 at the annual meeting of shareholders to be held on August 24, 201818, 2020 or any adjournment or postponements thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR Proposals 1, 2, 3, and 4.3.
o FOR all director nominees listed o WITHHOLD authority to vote for all director nominees listed o For all EXCEPT (to withhold authority to vote for any nominee(s), write the number of such nominee(s) below)
_______________________
2. APPROVE, ON AN ADVISORY (NON-BINDING) BASIS, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS o
FOR o AGAINST o ABSTAIN
3. APPROVE THE AMENDMENT TO OUR BYLAWS TO REVISE THE NUMBER OF DIRECTORS
o FOR o AGAINST o ABSTAIN
4.
3. RATIFY THE APPOINTMENT OF RSM US LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
o FOR o AGAINST o ABSTAIN
Please sign and date on the reverse side and return in the enclosed postage-prepaid envelope.
The Notice of Annual Meeting of Shareholders, Proxy Statement, and Annual Report on Form 10-K are available free of charge at www.irinfo.com/wrld/2018.2020.
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BACK
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In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting.
THIS PROXY CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE BUT PROPERLY EXECUTED, THIS PROXY CARD WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES UNDER PROPOSAL 1, FOR PROPOSAL 2, FOR PROPOSAL 3, AND FOR PROPOSAL 43 AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
The undersigned acknowledges receipt of the accompanying Notice of Annual Meeting and Proxy Statement and revokes all proxies heretofore given by the undersigned.
Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as attorney, as executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership please sign in partnership name by authorized person.
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DATED: ___________________________________________, 20182020
Signature
Signature if held jointly | | |
| PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED POSTAGE-PREPAID ENVELOPE
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