Stock Ownership Requirements

The Board has adopted the following stock ownership requirements applicable to members of the Board of Directors and senior officers:

Chief Executive Officer

6x base salary


3x base salary

Chief Financial Officer

3x base salary

Executive Vice President

3x base salary

Non-employee Members of the Board

3x annual cash retainer

Ownership requirements must be met for senior officers within five years of appointment to office and for Directors within five years of election to the Board, with vested options and all restricted stock grants counted toward satisfaction of ownership requirements. Shares directly owned by a senior officer or Director and shares owned by an immediate family member, in each case, including shares held in a 401(k) plan or held in trust beneficially owned by the senior officer, Director, or an immediate family member, will be counted as shares owned by the senior officer or director.

Senior officers are expected to acquire shares at a consistent rate prior to achieving the applicable ownership level. A new senior officer should own 1/5th of the required shares no later than their first anniversary of becoming a senior officer, 2/5th of the required shares no later than their second anniversary, 3/5th of the required shares no later than their third anniversary, 4/5th of the required shares no later than their fourth anniversary and meet their entire obligation by the fifth anniversary. The Company will compute all progress calculations on a periodic basis using the senior officer’s salary and a closing stock price within 30 days before any eligible vesting date. If a senior officer fails to make proportionate progress, the senior officer will be notified and the senior officer will be automatically restricted by the Company from selling shares in future vesting beyond what is required to meet tax obligations (i.e., “automatic sell-to-cover”) until the required proportionate progress toward ownership has been attained. If a determination is made that automatic sell-to-cover is warranted, the entire vest shall be subject to this requirement.

After achieving the applicable ownership level, individuals must continue to retain enough shares to maintain such level. After achieving the applicable ownership level, an individual shall be deemed to remain in compliance with the requirements notwithstanding any fluctuation in the Company’s stock price; however, such individual may not sell or transfer any shares until the applicable ownership level is achieved, except as provided below.

A senior officer may not sell or transfer shares that would cause the senior officer to fall out of compliance with the requirements, except: (i) cases of hardship reasonably approved by the Nominating and Corporate Governance Committee; or (ii) transfers of shares due to a final divorce decree assigning shares to an ex-spouse or selling shares as part of the overall divorce settlement. If a senior officer falls out of compliance due to these reasons, the senior officer will have three years in which to return to compliance.  With respect to clause (ii) above, such senior officer will have three years from the date of the finalization of the divorce decree to return his or her ownership to the required level.  Senior officers will be expected to return to compliance with the ownership levels proportionately over the three-year period.

Compliance with the requirements will be evaluated on an annual basis by the Nominating and Corporate Governance Committee.

Currently, all members of the Board and senior officers satisfy the requirements.