The Taylor Communications Company Stock Ownership Guidelines
The Board of Directors of The Taylor Communications Company (the "Company") has adopted Stock Ownership Guidelines which apply to the Company's Chief Executive Officer (the "CEO"), Chief Financial Officer (the "CFO"), other officers of the Company appointed by the Board of Directors ("Other Officers") and non-employee members of the Company's Board of Directors ("Non-Employee Directors"). The CEO, CFO and Other Officers are collectively referred to as "Executives". The purpose of the Stock Ownership Guidelines is to further align the financial interests of the Executives and Non-Employee Directors with those of the Company's shareholders.
Ownership Guidelines: The CEO is expected to hold an amount of the Company's common stock equal to five times his or her annual base salary. The CFO is expected to hold an amount of the Company's common stock equal to two times his or her annual base salary. All Other Officers of the Company are expected to hold an amount of the Company's common stock equal to one times their respective annual base salaries. All Non-Employee Directors are expected to hold an amount of the Company's common stock equal to four times their respective annual cash retainers. The guidelines will be re-calculated for an Executive when such Executive's base salary is increased. In addition, guidelines will be re-calculated as of the first trading day of each calendar year, using each Executive's base salary then in effect, each Non-Employee Director's annual cash retainer then in effect and the closing price of the Company's common stock on that day.
Retention Policy: Until the applicable guideline is achieved each Executive and Non-Employee Director is required to retain an amount equal to fifty percent (50%) of the net shares received upon: (i) the exercise of options to purchase the Company's common stock; (ii) the vesting of restricted stock; and (iii) the vesting of performance shares. In addition, once an Executive or Non-Employee Director achieves the appropriate ownership requirement, such Executive or Non-Employee Director must, while subject to the Stock Ownership Guidelines, maintain such appropriate ownership level. "Net shares" are those shares that remain after shares are sold or netted to pay the exercise price of stock options (if applicable) and withholding taxes. Because Executives and Non-Employee Directors must retain a percentage of shares resulting from any exercise of the Company's stock options or the vesting of restricted stock or performance shares until they achieve the specified guidelines, there is no minimum time period required to achieve the guidelines.
Holdings Considered: The following holdings will be considered when measuring stock ownership:
- Shares owned outright, including shares owned jointly with a spouse or separately by a spouse and/or children that share the Executive or Non-Employee Director's household;
- Shares owned through a Company-sponsored savings/retirement plan;
- Shares purchased through the Company's Employee Stock Purchase Plan;
- Shares obtained through the exercise of stock options;
- Shares issued upon the vesting of restricted stock and performance shares;
- Shares of unvested restricted stock;
- Earned performance shares.
Stock options (whether vested or unvested) and unearned performance shares will not be considered when measuring stock ownership.
Hardship: There may be instances in which the Stock Ownership Guidelines would place a severe hardship on an Executive or Non-Employee Director or prevent an Executive or Non-Employee Director from complying with a court order, such as in the case of a divorce settlement. Under these circumstances, the Compensation Committee may, in its discretion, waive the Stock Ownership Guidelines. In such instances, the Compensation Committee will make a final decision as to developing an alternative stock ownership plan that reflects the intention of the ownership guidelines and the personal circumstances of such Executive or Non-Employee Director.
Administration: The Compensation Committee of the Board of Directors shall be responsible for monitoring and administering these Stock Ownership Guidelines. The Compensation Committee has the right to modify these Stock Ownership Guidelines at any time.
Effective Date: January 1, 2012