Participants serving as of the Effective Date are expected to achieve the required ownership level no later than the Valuation Date in January 2024.
Participants appointed or elected after the Effective Date will have five years from the date of appointment or election to achieve the required ownership level. If the minimum required stock ownership level required by this Policy is increased, Participants will have three years from the date of such increase to achieve the new required ownership level.
While Participants are not obligated to purchase shares to achieve compliance with this Policy, until a Participant has achieved the required ownership level at any Valuation Date, such Participant must retain 50 percent of his or her vested full value shares of the Corporation’s common stock acquired through the Corporation’s incentive plans or other equity compensation arrangements.
Stock Option Holding Period
Until a Participant has achieved the required ownership level at any Valuation Date, such Participant is prohibited from selling Corporation common stock acquired by exercising stock options. Notwithstanding the preceding sentence, Participants may immediately sell Corporation common stock acquired by exercising stock options for the limited purposes of paying the exercise price of the stock option and any applicable tax withholding.
Reporting and Compliance
Progress and compliance in achieving the minimum ownership requirements will be calculated at least annually and reported to the Committee. The Committee will assess compliance with this Policy at its first meeting each calendar year, based on the value of a Participant’s holdings as of the most recent January 1 or, if later, the date in January that the Corporation pays the director stock retainer for the quarter (the “Valuation Date”). The holdings value shall be based on the average closing price of a share of the Corporation’s common stock for the 90 day period preceding the Valuation Date.
Participants who have not achieved the required ownership level will receive written notification from the Corporation that the Retention Ratio and Stock Option Holding Period described above will apply until the Participant provides written notification and documentation satisfactory to the Corporation indicating that he or she has achieved the required ownership level.
Failure to achieve the minimum ownership level required by this Policy within required time periods will be considered by the Committee in determining whether or not to nominate an incumbent director for re-election to the Board.
There may be instances where the ownership levels in this Policy would place a severe financial or personal hardship on a Participant. The Committee may, in its discretion, modify or delay application of the minimum ownership requirements in the case of demonstrated severe financial or personal hardship. The Committee will record in its meeting minutes any such action taken to modify or delay application of the minimum ownership requirements, although the Participant need not be named.