Form DEF 14A NATIONAL FUEL GAS CO For: Mar 10

January 21, 2022 11:54 AM EST

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

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  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-12

NATIONAL FUEL GAS COMPANY

(Name of Registrant as Specified in its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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Table of Contents

NATIONAL FUEL GAS COMPANY

 

 

Notice of Annual Meeting

and

Proxy Statement

 

 

Annual Meeting of Stockholders

to be held on

March 10, 2022

 


Table of Contents

NATIONAL FUEL GAS COMPANY

6363 MAIN STREET

WILLIAMSVILLE, NEW YORK 14221

January 21, 2022

Dear Stockholders of National Fuel Gas Company:

Each year, our proxy statement provides you with a brief summary of the Company’s recent operations and detailed information relating to the items on the agenda for you to vote on at the Annual Meeting of Stockholders. As we did last year, our Board of Directors has determined to hold the 2022 Annual Meeting virtually, via a live webcast. The electronic webcast meeting will afford stockholders the same rights and access as if the meeting were held in person, including the ability to vote shares electronically during the meeting.

The meeting will be held at 10:00 a.m. Eastern Time on March 10, 2022, conducted via live webcast at www.virtualshareholdermeeting.com/NFG2022. The matters on the agenda for the meeting are outlined in the enclosed Notice of Annual Meeting and Proxy Statement.

At the meeting, you will be asked to consider and vote on three proposals, all as explained in more detail in the proxy statement: (1) the election of four directors, (2) advisory approval of named executive officer compensation, and (3) ratification of the appointment of the Company’s independent public accounting firm. Your Board of Directors unanimously recommends that you vote FOR each of these proposals.

So that you may elect Company directors and secure the representation of your interests at the Annual Meeting, we urge you to vote your shares. The preferred methods of voting are by telephone, by Quick Response Code (“QR Code”) or by Internet as described on the proxy card. These methods are both convenient for you and reduce the expense of soliciting proxies for the Company. If you prefer not to vote by telephone, QR Code or the Internet, please complete, sign and date your proxy card and return it by mail. The Proxies are committed by law to vote your shares as you instruct on the proxy card, by telephone, by QR Code or by Internet.

Your vote is always important. Stockholder voting is the primary means by which stockholders can influence a company’s operations and its corporate governance. In fact, stockholders who do vote can influence the outcome of proposals in greater proportion than their percentage share ownership.

Please make your voice heard by voting your shares.

Even if you plan to attend the Annual Meeting virtually, we encourage you to promptly vote your shares in advance of the meeting, by telephone, by QR Code or by Internet, or to complete, sign, date and return your proxy card. If you later wish to vote at the Annual Meeting, you can revoke your proxy by giving written notice to the Secretary of the Annual Meeting and/or the Trustee (as described on the second page of the proxy statement), and/or by casting your ballot at the Annual Meeting.

Please review the proxy statement and take advantage of your right to vote.

Sincerely yours,

David P. Bauer

President and Chief Executive Officer


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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

to be held on March 10, 2022

To the Stockholders of National Fuel Gas Company:

Notice is hereby given that the Annual Meeting of Stockholders of National Fuel Gas Company (the “Company”) will be held at 10:00 a.m. Eastern Time on March 10, 2022, conducted via live webcast at www.virtualshareholdermeeting.com/NFG2022. At the meeting, action will be taken with respect to:

 

  (1)

The election of four directors to hold office for one-year terms, as provided in the attached proxy statement and until their respective successors have been elected and qualified;

 

  (2)

Advisory approval of named executive officer compensation;

 

  (3)

Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal 2022;

and such other business as may properly come before the meeting or any adjournment or postponement thereof.

Stockholders of record at the close of business on January 10, 2022, will be entitled to vote at the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

SARAH J. MUGEL

General Counsel and Secretary

January 21, 2022

Attending the Annual Meeting

National Fuel Gas Company is holding the Annual Meeting in a virtual meeting format only, conducted via live webcast. Stockholders will not be able to attend the meeting in person.

 

Please visit www.virtualshareholdermeeting.com/NFG2022 in order to attend and to participate in the virtual meeting, where you will be prompted to enter the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee.

If you receive your Annual Meeting materials electronically and wish to attend the virtual meeting, please follow the instructions provided online for attendance. Once you have joined the virtual meeting, you may vote your shares electronically during the meeting by following the instructions available on the meeting website, although we encourage you to vote in advance of the meeting. Only stockholders or their valid proxy holders may participate in the meeting. If you plan on attending the virtual meeting, we encourage you to allow ample time to log in online and recommend that you do so fifteen minutes before the meeting start time to ensure that you are logged in when the meeting begins.


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YOUR VOTE IS IMPORTANT

Please vote by telephone, by QR Code or by Internet.

 

Whether or not you plan to attend the meeting, and whatever the number of shares you own, please vote your shares by telephone, by QR Code or by Internet as described in the proxy/voting instruction card and reduce National Fuel Gas Company’s expense in soliciting proxies. Alternatively, you may complete, sign, date and promptly return the proxy/voting instruction card by mail.

 

WHY YOUR VOTE IS IMPORTANT

Q: Who is asking for my vote and why am I receiving this document?

A: The Board of Directors asks that you vote on the matters listed in the Notice of Annual Meeting, which are more fully described in this proxy statement. This proxy statement is a document that Securities and Exchange Commission regulations require we give you when we ask you to sign a proxy designating individuals to vote on your behalf. A proxy, if duly executed and not revoked, will be voted and, if it contains any specific instructions, will be voted in accordance with those instructions.

Q: How many shares are not voted at the Annual Meeting on non-routine matters (proposals other than the ratification of accountant)?

A: At recent Annual Meetings, approximately 14% to 19% of our shares have not been voted on non-routine matters. IF YOU HOLD YOUR SHARES AT A BROKERAGE FIRM, YOU MUST TELL YOUR BROKER HOW TO VOTE YOUR SHARES. Since 2010, brokers have not been able to vote customer shares on non-routine matters. Stockholder voting is the primary means by which stockholders can influence a company’s operations and its corporate governance, so your vote is important.

Q: How can I vote?

A: To reduce costs and conserve resources, we send some of our stockholders a notice advising them that our materials for this meeting are available on the Internet. The notice contains instructions to (i) electronically access the materials; (ii) vote via the Internet; and (iii) request a paper copy of the materials by mail, if desired. Other stockholders have received our proxy materials by U.S. mail. In either case, there are four ways to vote by proxy:

 

   

Vote by Phone by calling 1-800-690-6903: You will need information from your proxy card to vote; have it available and follow the instructions provided.

 

   

Vote by scanning the Quick Response Code LOGO (“QR Code”) on the proxy card: By accessing the QR site through the proxy card you can vote your shares.

 

   

Vote by Internet by going to www.proxyvote.com: You will need information from your proxy card to vote; have it available and follow the instructions provided.

 

   

Vote by Mail: Complete and return the proxy card in the prepaid and addressed envelope.

You may also vote at the Annual Meeting. However, if you are the beneficial owner of the shares, you must obtain a legal proxy from the stockholder of record, usually your bank or broker. A legal proxy identifies you, states the number of shares you own, and gives you the right to vote those shares. Without a legal proxy we cannot identify you as the owner, and will not know how many shares you have to vote.

 

To attend and vote at the Annual Meeting, you will need the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee.

Please visit www.virtualshareholdermeeting.com/NFG2022 on the date and at the time specified in the Notice of Annual Meeting of Stockholders. You will be prompted to enter your 16-digit control number to attend the meeting.


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TABLE OF CONTENTS

 

PROXY STATEMENT OVERVIEW & FISCAL 2021 SUMMARY

     i  

GENERAL INFORMATION

     1  

• PROPOSAL 1. ELECTION OF DIRECTORS

     4  

Nominees for Election as Directors at the 2022 Annual Meeting of Stockholders

     4  

Continuing Directors Whose Terms Expire in 2023

     9  

Continuing Directors Whose Terms Expire in 2024

     12  

Corporate Governance

     16  

Diversity

     16  

Director Independence

     16  

Board Leadership Structure

     16  

Annual Meeting Attendance

     17  

Meetings of the Board of Directors and Standing Committees

     17  

Method of Evaluating Board and Committee Effectiveness

     20  

Process for Nominating Directors

     20  

Charitable Contributions by Company

     20  

Compensation Committee Interlocks and Insider Participation

     21  

Risk Oversight

     21  

Related Person Transactions

     21  

Code of Ethics

     22  

Director Compensation

     22  

Director Compensation Table — Fiscal 2021

     23  

Audit Fees

     24  

Audit Committee Report

     25  

Security Ownership of Certain Beneficial Owners and Management

     27  

Equity Compensation Plan Information

     30  

Executive Compensation

     31  

Compensation Committee Report

     31  

Compensation Discussion and Analysis

     31  

Fiscal 2021 Summary Compensation Table

     53  

Grants of Plan-Based Awards in Fiscal 2021

     55  

Outstanding Equity Awards at Fiscal 2021 Year-End

     56  

Option Exercises and Stock Vested in Fiscal 2021

     58  

Fiscal 2021 Pension Benefits

     59  

Fiscal 2021 Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans

     61  

Fiscal 2021 Potential Payments Upon Termination or Change in Control

     62  

CEO Pay Ratio

     69  

Executive Officer and Director Hedging

     69  

• PROPOSAL 2. ADVISORY APPROVAL OF NAMED EXECUTIVE OFFICER COMPENSATION

     71  

• PROPOSAL 3. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     72  

IMPORTANT NOTICE REGARDING DELIVERY OF STOCKHOLDER DOCUMENTS

     73  

PROPOSALS OF SECURITY HOLDERS FOR THE 2023 ANNUAL MEETING

     73  

OTHER BUSINESS

     73  

WHERE YOU CAN FIND ADDITIONAL INFORMATION

     74  

YOUR VOTE IS IMPORTANT!

PLEASE VOTE BY PHONE, BY QR CODE OR BY INTERNET, OR COMPLETE, SIGN, DATE AND RETURN YOUR PROXY CARD.

 


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This proxy statement contains certain “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements should be read with the cautionary statements and important factors included under the heading “Safe Harbor for Forward-Looking Statements” in National Fuel Gas Company’s (“National Fuel” or the “Company”) Form 10-K at Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and with the information included in the Company’s Form 10-K at Item 1A “Risk Factors”. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, statements regarding future prospects, plans, objectives, goals, projections, estimates of oil and gas quantities, emissions reduction targets, strategies, future events or performance and underlying assumptions, capital structure, anticipated capital expenditures, completion of construction projects, projections for pension and other post-retirement benefit obligations, impacts of the adoption of new authoritative accounting and reporting guidance, and possible outcomes of litigation or regulatory proceedings, as well as statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions.

Proxy Statement Overview & Fiscal 2021 Summary

This overview and summary highlights information contained elsewhere in this proxy statement and also includes certain additional information regarding business performance and corporate responsibility, including environmental, social and governance (“ESG”) matters. This overview and summary does not contain all of the information that you should consider, and you should read the Company’s Summary Annual Report and Form 10-K and this entire proxy statement carefully before voting.

 

Annual Meeting Voting Matters

The table below summarizes the matters that will be subject to the vote of stockholders at the 2022 Annual Meeting of Stockholders of National Fuel Gas Company:

 

Proposals  

Board Vote       

Recommendation       

 

Page Number       

(for additional details)       

     

1.  Election of Directors

  FOR ALL NOMINEES          Page 4       
     

2.  Advisory Approval of Named Executive Officer Compensation

  FOR          Page 71       
     

3.  Ratification of Appointment of Independent Registered Public Accounting Firm

  FOR          Page 72       

 

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Annual Meeting of Stockholders

 

Ø    Date and Time

   March 10, 2022 at 10:00 a.m. Eastern Time

Ø    Website

   www.virtualshareholdermeeting.com/NFG2022

Ø    Record Date

   January 10, 2022

Ø    Voting Details

   Stockholders as of the record date are entitled to one vote for each share of common stock for each director nominee and each other proposal to be voted.

Ø    Voting Deadline

  

Votes must be received by March 9, 2022 (unless attending virtually).

For stock that is held in employee benefit plans votes must be received by March 8, 2022.

Ø    Attending the Virtual

Meeting

   National Fuel stockholders as of the record date are entitled to attend the annual meeting virtually. To participate in the meeting, please visit www.virtualshareholdermeeting.com/NFG2022, where you will be prompted to enter the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee. Please see “Attending the Meeting” on page 2.

 

National Fuel Gas Company Fiscal 2021 Summary

Fiscal 2021 was another strong year for National Fuel with excellent operational and financial results across our organization. Against the continued backdrop of the COVID-19 pandemic, our 2,100 dedicated and talented employees again rose to meet the challenge, executing on our growth plans while maintaining our long-standing focus on the safety, sustainability, and reliability of our production, gathering, transmission and storage, and utility operations, and providing critical energy supplies to consumers. During the fiscal year, we achieved significant milestones across our diversified operations, successfully integrating an approximately $500 million Appalachian acquisition at our Exploration & Production (“E&P) and Gathering businesses, commencing construction of our FM100 modernization and expansion project — the largest in the history of our Pipeline & Storage business — and completing our substantial annual modernization program at our Utility business, including the replacement of more than 150 miles of delivery system pipeline mains.

Throughout the fiscal year, the Company, in line with our commitment to continuous improvement, further enhanced our ESG initiatives with the publication of our second annual Corporate Responsibility Report in September, which included additional climate-focused information under the Task Force on Climate-Related Financial Disclosures Framework and the announcement of significant greenhouse gas (“GHG”) and methane emissions intensity reduction targets. We also took meaningful steps to continue to foster a diverse, equitable, and inclusive work environment — an attribute that we view as critical to our long-term success — by appointing a Director of Diversity and Inclusion in late 2020.

As we move into fiscal 2022, we expect the completion of our FM100 expansion and modernization project to drive further growth for National Fuel. This project is expected to deliver approximately $50 million in incremental annual revenue for the Pipeline & Storage segment, and will provide desirable pipeline takeaway capacity to higher value Mid-Atlantic markets, allowing for further growth in both our E&P and Gathering segments. Coupled with the Company’s commitment to reducing our carbon footprint, National Fuel is well-positioned to generate strong, sustainable returns in the years ahead and deliver long-term value for our shareholders.

 

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2021 Financial and Operating Highlights:

 

   

Increased Dividend for 51st Consecutive Year: In June, the Board of Directors increased the Company’s annual dividend rate by 2.2 percent to $1.82 per share, marking over a half-century of consecutive dividend increases and our 119th year of uninterrupted dividend payments.

 

   

Successful Integration of Significant Appalachian Acquisition: The Company successfully integrated its approximately $500 million acquisition of Royal Dutch Shell’s upstream and midstream gathering assets within Appalachia (“Tioga Acquisition”), with the benefits of our increased scale within Pennsylvania driving an approximately 7% decrease in E&P segment cash operating costs on a per unit basis (combined general & administrative expense, lease operating expense, other operation and maintenance expense, and production, franchise and other taxes) compared to the prior year.

 

   

Meaningfully Growing Appalachian Natural Gas Production and Gathering Throughput: E&P segment net production increased to approximately 327 billion cubic feet equivalent (“Bcfe”), up 36% from the prior year, driving a corresponding 38% increase in Gathering segment throughput, driven by the Tioga Acquisition, along with the strong performance of the Company’s existing operations within Appalachia.

 

   

Increased Proved Reserves: Seneca’s total proved natural gas and crude oil reserves at September 30, 2021 increased to approximately 3.9 trillion cubic feet equivalent, an increase of 11% versus fiscal 2020.

 

   

Continued Growth of Interstate Pipeline Business: Our Pipeline & Storage business generated revenue of $344 million, an increase of approximately $34 million, or 11%, from the prior year, driven largely by the Company’s Empire North expansion project, which was placed into service in mid-September 2020.

 

   

Utility Continued Focus on System Improvement: Our Utility segment invested approximately $80 million in modernization and reliability, bringing our five-year modernization total to over $358 million.

 

 

LOGO

 

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Our Commitment to Corporate Responsibility and Sustainability

Sustainability is embodied in the Company’s guiding principles of safety, environmental stewardship, community, innovation, satisfaction, and transparency, which form the foundation of our daily operations. Over the past year, the Company made significant efforts to ensure its operations have minimal environmental impacts on the communities in which it operates, and that we continue to have positive impacts with the communities and the numerous stakeholders with whom we continuously interact.

 

   

Publication of Second Annual Corporate Responsibility Report: In September, National Fuel issued its second Corporate Responsibility Report (“Report”), which provides a comprehensive review of ESG performance metrics and highlights the Company’s ongoing initiatives to ensure the long-term sustainability of its integrated energy business with a focus on corporate citizenship in the communities in which it operates.

 

   

Enhanced Climate-Risk Disclosures: In line with the Company’s focus on continuous improvement in its ESG initiatives and disclosures, the Report includes significant additional information related to climate risk in line with the Task Force on Climate-Related Financial Disclosure (TCFD) framework. This framework analyzes governance surrounding climate-based risks and opportunities, strategies for addressing such factors, risk management considerations, and metrics and targets which can be used to assess those factors. The Company’s use of the TCFD framework is responsive to discussions on this important topic with key stakeholders of the Company.

 

   

Establishment of Significant GHG Emissions Reduction and Methane Emissions Intensity Reduction Targets: In connection with the Company’s enhanced climate-focused disclosures and ongoing efforts to lower its carbon footprint, National Fuel has established significant methane intensity reduction targets at each of its businesses, as well as an absolute GHG emissions reduction target for the consolidated Company, each using a 2020 baseline:

 

  LOGO

Exploration & Production: 40% reduction in methane intensity by 2030

 

  LOGO

Gathering: 30% reduction in methane intensity by 2030

 

  LOGO

Pipeline & Storage: 50% reduction in methane intensity by 2030

 

  LOGO

Utility: 30% reduction in methane intensity by 2030

75% reduction in delivery system GHG emissions by 2030 (1990 baseline)

90% reduction in delivery system GHG emissions by 2050 (1990 baseline)

 

  LOGO

Consolidated Company: 25% reduction in total GHG emissions by 2030

 

   

Establishment of Energy Transition Steering Committee: Over the past year, National Fuel established internal cross-functional teams, led by our Energy Transition Steering Committee, which includes key members of the Company’s senior leadership team, to study the feasibility and potential development of projects focused on renewable natural gas (“RNG”), hydrogen, and carbon capture utilization and storage.

 

   

Environmental and Social Performance Goals: Similar to fiscal 2021, the Compensation Committee has again established short-term performance goals for fiscal 2022 focused on safety and environmental stewardship, as well as goals promoting diversity, equity and inclusion among the Company’s workforce. In addition, the Compensation Committee has established a long-term performance goal focused on reducing GHG emissions and methane emissions intensity.

 

   

Furthered Ongoing Utility System Modernization Efforts: Our Utility business completed the replacement of over 150 miles of older vintage main distribution lines within our New York and Pennsylvania service territories, driving enhanced safety and further reductions in our

 

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greenhouse gas emissions. Overall, our Utility business has lowered its delivery system (EPA Subpart W) emissions by approximately 64% since the close of calendar 1990.

 

   

Participation in the Low-Carbon Resources Initiative (“LCRI”): Our Utility business is an anchor sponsor of the LCRI, a joint effort of The Electric Power Research Institute and the Gas Technology Institute to address the need to accelerate development and demonstration of low- and zero-carbon energy technologies. Over the course of the next five years, the LCRI expects to identify, research, develop, and demonstrate the technology advancements needed to achieve this decarbonized future.

 

   

Furthered Participation in the RNG Market: Over the course of the past year, our Utility businesses took meaningful steps to participate in the growing RNG market, including petitioning the New York Public Service Commission to include RNG in the gas supply mix, and accepting the first RNG injections into the Company’s New York distribution network from an anaerobic digester project.

 

   

Joined ONE Future Coalition: Each of our principal subsidiaries has joined the ONE Future coalition, a group of approximately 50 natural gas companies working together to voluntarily reduce methane emissions intensity across the natural gas value chain to 1% (or less) by 2025.

 

   

Pioneered Innovative Study on Hydraulic Fracturing Equipment: In early July, our E&P business announced its intent to pioneer an innovative study evaluating the carbon emissions generated by various types of equipment commonly used for hydraulic fracturing of oil and natural gas wells. The results of this comprehensive study are expected to provide the industry with a comparative insight on the real-time emissions profile of these technologies, with independent third-party testing during Seneca’s field operations.

 

   

Commenced First Well Completions Using All-Electric Fracturing Technology: In late July, the Company announced the commencement of its first well completions using all-electric fracturing technology on a six-well pad in Lycoming County, Pa., within our Eastern Development Area.

 

   

Announced Multiple Responsibly Sourced Gas Initiatives: In September, we announced an agreement with Project Canary to seek an independent responsibly sourced gas certification for approximately 300 million cubic feet per day of Seneca’s Appalachian production, as well as a commitment to seek certification of 100% of our Appalachian natural gas production under Equitable Origin’s EO100 Standard for Responsible Energy Development — a set of rigorous ESG performance standards.

 

   

Maintained Focus on Water Handling and Water Management: In fiscal 2021, National Fuel recycled more than 100% of the volume of its total produced fluids in Appalachia, including approximately 9 million barrels of its own produced fluids, and an additional 900,000 barrels of fluids that were generated by and received from third-party operators. We manage the movement of approximately 1.1 million barrels of fluid every month, more than 85% of which is transported by Company-owned water pipelines directly to Seneca’s Marcellus and Utica development pads. As a result, Seneca was able to avoid an estimated 100,000 truck trips in fiscal 2021, eliminating the associated air emissions and reducing the impact on local roads and public infrastructure.

 

   

Continued Participation in the EPA’s Methane Challenge: Each of the Company’s major operating segments is a participant the U.S. Environmental Protection Agency’s Natural Gas STAR Methane Challenge Program, a voluntary program designed to provide a platform for utilities, pipeline and storage companies, and energy producers to make, track, and communicate commitments to reduce methane emissions. In connection with this program, and in furtherance of our longstanding commitment to safe and responsible operations, the Company continues to analyze new and innovative approaches for further emission reduction and explore the expansion of current best management practices and the applicability of future best practices.

 

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LOGO

Our Commitment to our Employees

At National Fuel, we go above and beyond to create a culture that rewards hard work and supports promotion from within. Our 2,100-plus employees continue to be the most important part of our Company and have made us who we are today.

 

   

Committed to Our Workforce: During the COVID-19 pandemic, National Fuel has remained committed to our workforce and has not instituted any furloughs or workforce reductions.

 

   

Focused on Workforce Safety: National Fuel has maintained our long-standing focus on safety, with an approximately 32% reduction in our Occupational Safety and Health Administration (“OSHA”) recordable injury rate in our regulated businesses over the past 3 years, as well as an approximately 31% decrease at our E&P business (combined employees and contractors) over the same period.

 

   

Maintaining our Commitment to Inclusivity and Enhancing Workforce Diversity: National Fuel is committed to hiring and developing qualified individuals who can enhance and contribute to the diversity of our workforce and reflect the diverse communities we serve. As we plan for future human resource needs, National Fuel continues to target a number of diversity-focused groups in our communities for employment opportunities across the organization. In furtherance of our commitment, the Company has also required officers and department managers to participate in diversity, equity, and inclusion training. In addition, today, four of the Company’s nine designated executive officers are women who hold the following important policy-making positions: President of the Company’s Utility segment; General Counsel and Secretary, who also serves as the Company’s Compliance Officer; Treasurer and Principal Financial Officer; and Controller and Principal Accounting Officer.

 

   

Appointment of a Director of Equity & Inclusion: In line with our focus on fostering a diverse, equitable, and inclusive work environment, in late 2020, the Company appointed a Director of Diversity and Inclusion, who has been charged with leading a number of diversity and inclusion initiatives throughout our organization, along with cultivating the Company’s relationships with community organizations, and initiatives to attract and retain diverse candidates, vendors, and other partnerships.

 

 

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Safety and Social Performance Goals: Similar to fiscal 2021, the Compensation Committee has again established short-term performance goals for fiscal 2022 focused on safety, as well as diversity and inclusion.

 

LOGO

Our Commitment to our Communities

Going back to the first natural gas well drilled in Dunkirk, N.Y., National Fuel and our predecessor companies have deep roots in both the natural gas industry and in the regions where we operate. Today, National Fuel’s investments and operations continue to contribute significantly to the economic health and vitality of our local communities.

 

   

Investing in critical energy infrastructure: Over the last 10 years, we have invested more than $7 billion in energy development, investing in real, long-lived assets that support good-paying jobs and provide a significant tax base for local schools and municipalities.

 

   

Large local employer: We employ over 2,100 people, paying over $270 million in annual compensation and pension benefits.

 

   

Provider of local tax revenues: Over the past five years, we have paid $300 million in state and local property taxes, providing revenues that support school districts and the social services that many in our communities have come to rely on. Additionally, Seneca has paid $53 million over the last five years in Pennsylvania impact fees which support the maintenance and repair of local infrastructure and investment in new community facilities.

 

   

Supporter of local vendors and contractors: We support the employment of thousands more in our local communities by using the products and services of local vendors, contractors and labor. Over the last five years, we have paid $543 million and $239 million to local vendors and contractors in New York and Pennsylvania, respectively.

 

   

Fair landowner compensation: We provide fair and reasonable compensation to local landowners for acreage leases, mineral rights and pipeline rights of way and easements. Over the last five years, Seneca has paid local Pennsylvania landowners more than $234 million in royalties on natural gas production.

 

   

Charitable giving: Each year, hundreds of National Fuel employees donate thousands of dollars to local and national charitable organizations. The National Fuel Gas Foundation matches dollar for dollar, up to $750 per employee, doubling the impact of each employee’s contribution. Since 2005, our employees and the foundation have given more than $22 million to charitable organizations.

 

 

 

 

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LOGO

Our Diverse, Experienced, and Independent Board of Directors

National Fuel’s commitment to diversity also extends to our Board of Directors, and our Board has continued its efforts to attract qualified, diverse candidates whose expertise and personal characteristics align with the Company’s long-term business strategy.

 

   

Increasing Diversity on Our Board of Directors: Our Nominating/Corporate Governance Committee, chaired by Rebecca Ranich, makes recommendations to the full Board on nominees for director positions, and has invited qualified gender and racially diverse candidates to stand for election to the Board, with successful results. Three of the Company’s last six Directors have increased Board diversity.

 

   

Inclusion of the “Rooney Rule”: The Company’s Corporate Governance Guidelines incorporate the “Rooney Rule.” As a result, in identifying independent director candidates for nomination to the Board, the Nominating/Corporate Governance Committee is committed to including in any initial candidate pool qualified racially, ethnically and/or gender diverse candidates.

 

   

Diverse and Extensive Experience: The Company’s Board of Directors consists of individuals with extensive and diverse leadership experience within the energy industry, as well as complementary industries, including manufacturing and consulting. Our eleven Board members have experience in the following areas, among others:

 

  ¡   

CEO/Senior Leadership Position (11)

 

  ¡   

Energy Industry Experience (10)

 

  ¡   

Operational/Safety (9)

 

  ¡   

Other Public Board of Directors Experience (8)

 

  ¡   

Federal & State Regulatory/Government Relations (7)

 

  ¡   

Legal/Compliance/Enterprise Risk Management (7)

 

  ¡   

Consumer/Customer Relations (7)

 

  ¡   

Financial/Accounting (5)

 

  ¡   

Environmental/Sustainability/Energy Transition (4)

 

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Strong Corporate Governance Practices: Our Board has implemented strong governance practices, including maintaining a significant complement of independent directors (currently nine out of eleven directors), designating a Lead Independent Director, holding regular meetings of the non-management and/or independent directors, separating the roles of Chairman of the Board and Chief Executive Officer, and providing a process for stockholders meeting certain requirements to have nominees included in the Company’s proxy materials.

 

 

LOGO

 

 

               LOGO

 

Proposal 1 — Election of Directors

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES FOR THE BOARD OF DIRECTORS.

Nominees for one-year term:

David C. Carroll — age 65

Principal Occupation: President and Chief Executive Officer of Gas Technology Institute

Expertise: Leadership, Industry, Energy Transition/Technology

Steven C. Finch — age 63

Principal Occupation: President of Manufacturing and Community Engagement, Viridi Parente, Inc.

Expertise: Leadership, Manufacturing, Capital and Labor Management, Energy Transition/Sustainability

 

 

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Joseph N. Jaggers — age 68

Principal Occupation: Former President, Chief Executive Officer and Chairman of Jagged Peak Energy Inc.

Expertise: Leadership, Exploration and Production

David F. Smith — age 68

Principal Occupation: Chairman of the Board and Former Chief Executive Officer of National Fuel Gas Company

Expertise: Leadership, Industry, Regional

For complete information on this proposal, please refer to page 4 and following.

 

Proposal 2 — Advisory Approval of Named Executive Officer Compensation

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION.

This proposal allows stockholders to take part in a non-binding, advisory vote to approve the compensation of the Company’s named executive officers. The summary below and the discussion in the Compensation Discussion and Analysis (as well as the proposal for the advisory vote to approve the compensation of the Company’s named executive officers (the “Say-on-Pay” vote)) provide information about the Company’s compensation programs. Unless otherwise indicated, we intend capitalized and abbreviated terms to have the same meaning in this section as in the Compensation Discussion and Analysis.

No Modifications to Fiscal 2021 Compensation

The Compensation Committee did not make any mid-year or end-of-year adjustments to performance metrics or goals applicable to named executive officers for fiscal 2021, despite the continuing COVID-19 pandemic.

Objectives of the Compensation Committee

When setting compensation for the Company’s executives, the Compensation Committee’s primary goal is to provide balanced incentives for creating value for stockholders in both the near-term and long-term. In order for this to occur, the Compensation Committee awards a combination of cash and equity components that are designed to:

 

Ø

  

Focus management efforts on both near-term and long-term drivers of stockholder value, including financial, safety, environmental, diversity, and customer service metrics;

Ø

  

Tie executive compensation to long-term total shareholder return (“TSR”) and long-term total return on capital (“ROC”) by linking a significant portion of named executive officers’ potential compensation to the future price of the Company’s common stock (and the payment of dividends) and the future returns on capital achieved by the Company, both relative to peers; and

Ø

  

Attract, motivate, reward and retain management talent in the highly competitive energy industry in order to achieve the objectives that contribute to the overall success of the Company.

 

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Elements of Compensation

The Compensation Committee has developed the Company’s compensation policies and procedures to align the interests of executives with those of the Company’s stockholders and, where appropriate, other stakeholders, including customers. The main elements of the executive compensation program are as follows:

 

Ø

  

Base Salary (Cash) — Provides a predictable base compensation for day-to-day job performance;

Ø

  

Short-Term Performance Incentives (Cash) — Utilizes metrics specific to each executive in order to motivate them to deliver near-term financial, safety, environmental, diversity, and customer service results, generally over a period that is no longer than two years; and

Ø

  

Long-Term Performance Incentives (Equity) — Focuses the attention of executives on delivering long-term stockholder value and on maintaining a significant personal investment in the Company through stock ownership.

Executive Compensation Aligned with Stockholders’ Interests

The Company recognizes and rewards executives through compensation arrangements that directly link executive pay to the Company’s performance, and we ensure a strong alignment of interests with our stockholders by including a significant amount of equity in the overall mix of pay. As shown in the chart below, which includes the fiscal 2021 target compensation mix for the CEO and an average for the other six named executive officers, 83% of the target compensation of David Bauer, the Company’s CEO, was at-risk compensation, with 63% tied to equity (in the form of performance shares and restricted stock units), and 20% tied to cash-based short-term performance goals.

 

 

LOGO

Key Compensation Features

 

Ø

  

Annual performance incentives of the named executive officers are based on objective performance goals, except with respect to a portion of Mr. Loweth’s fiscal 2021 annual cash incentive award;

Ø

  

Long-term performance incentives are composed entirely of equity;

Ø

  

Long-term performance goals for fiscal 2021 consist of three-year TSR and three-year total ROC, each relative to a peer group;

 

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Ø

  

Named executive officers and other officers are required to meet stock ownership guidelines that range from one to six times base salary (six times for the CEO and three times for other named executive officers);

Ø

  

Executive officers may not hedge or pledge Company stock;

Ø

  

Equity incentive plans prohibit the repricing of equity awards;

Ø

  

The Compensation Committee engaged two independent compensation consultants to assist in setting compensation;

Ø

  

All change-in-control agreements are double  triggered;

Ø

  

The Company does not provide tax “gross-ups” on any compensation or with respect to any change-in-control payments; and

Ø

  

The Board has adopted a clawback policy (see “Recovery of Funds” in the Company’s Corporate Governance Guidelines, included as Appendix B to this proxy statement).

2021 Say-on-Pay Vote and Stockholder Engagement

The 2021 Say-on-Pay advisory vote yielded a result of over 96% of votes cast in support of the compensation of the Company’s named executive officers. The Board generally considered this outcome another indicator of stockholder support for the overall philosophy and structure of the Company’s executive compensation policies and decisions. Given the high approval percentage of the vote, the Compensation Committee did not make any significant changes to the executive compensation program that were based specifically on the results of the 2021 Say-on-Pay advisory vote. The principal change the Compensation Committee made to the program for fiscal 2022 is the addition of a long-term performance goal tied to emissions reductions.

From time to time members of Company management have held meetings with some of the Company’s largest stockholders to obtain feedback on matters of interest to them. The Board has directed management to continue to engage as appropriate with interested stockholders, and to inform it of any requests for meetings with members of the Board. The Board and management believe that engagement with stockholders facilitates important dialogue from which we gather various important viewpoints.

The Board of Directors believes that the Company’s compensation policies and practices, as developed following engagement with stockholders, including with respect to ESG factors, encourage a culture of pay for performance and are strongly aligned with the interests of the Company’s stockholders. Accordingly, the Board recommends a vote FOR the advisory approval of named executive officer compensation.

For complete information on this proposal, please refer to the Compensation Discussion and Analysis, accompanying compensation tables and related narrative discussion, starting at page 31, and to the proposal at page 71.

 

Proposal 3 — Ratification of Appointment of Independent Registered Public Accounting Firm

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THIS APPOINTMENT.

As a matter of good governance, it is important that stockholders vote to ratify the selection of the Company’s independent auditor. The Company has selected PricewaterhouseCoopers LLP as the Company’s independent auditor for fiscal 2022.

For complete information on this proposal, please refer to page 72.

 

 

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NATIONAL FUEL GAS COMPANY

6363 MAIN STREET

WILLIAMSVILLE, NEW YORK 14221

PROXY STATEMENT

GENERAL INFORMATION

Introduction

This proxy statement is furnished to the holders of National Fuel Gas Company (“National Fuel” or the “Company”) common stock (the “Common Stock”) in connection with the solicitation of proxies on behalf of the Board of Directors of the Company (the “Board of Directors” or the “Board”) for use at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on March 10, 2022, or any adjournment or postponement thereof. This proxy statement and the accompanying proxy/voting instruction card are first being mailed to stockholders or made available on the Internet on or about January 21, 2022.

Solicitation of Proxies

All costs of soliciting proxies will be borne by the Company. MacKenzie Partners, Inc., 1407 Broadway, 27th Floor, New York, NY 10018, has been retained to assist in the solicitation of proxies by mail, telephone, and electronic communication and will be compensated in the estimated amount of $18,500 plus reasonable out-of-pocket expenses. A number of regular employees of the Company and its subsidiaries, and one or more retirees of the Company and its subsidiaries, may solicit proxies in person, by telephone or by other methods. Costs, if any, associated with solicitation by retirees are expected to be de minimis.

Record Date, Outstanding Voting Securities and Voting Rights

Only stockholders of record at the close of business on January 10, 2022, will be eligible to vote at the Annual Meeting or any adjournment or postponement thereof. As of that date, 91,443,717 shares of Common Stock were issued and outstanding. The holders of 45,721,859 shares will constitute a quorum at the meeting.

Each share of Common Stock entitles the holder thereof to one vote with respect to each matter that is subject to a vote at the Annual Meeting. Shares may not be voted unless the owner is present or represented by proxy. In order to grant a proxy, a stockholder can use the telephone, QR Code or Internet voting procedures or return a signed proxy card. All shares that are represented by effective proxies received by the Company in time to be voted shall be voted by the authorized Proxy at the Annual Meeting or any adjournment or postponement thereof.

If you hold your shares through a broker, bank or other nominee (in “street name”), you will receive instructions from them on how to vote your shares. If you do not give the broker specific instructions on how you would like your shares to be voted, your broker may only vote your shares on “routine” matters, such as Proposal 3 — Ratification of Appointment of Independent Registered Public Accounting Firm. However, your broker is prohibited from voting uninstructed shares on “non-routine” matters such as: Proposal 1 — Election of Directors; and Proposal 2 — Advisory Approval of Named Executive Officer Compensation. The absence of voting instruction results in what is called a “broker non-vote” on those proposals and will not be counted. Your vote is important. PLEASE MAKE YOUR VOICE HEARD BY VOTING YOUR SHARES ON THESE IMPORTANT MATTERS.

Where stockholders direct how their votes shall be cast, shares will be voted in accordance with such directions. Proxies submitted with abstentions and broker non-votes will be included in determining whether or not a quorum is present. Abstentions and broker non-votes will not be counted in tabulating

 

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the number of votes cast on proposals submitted to stockholders and therefore will not have the effect of a vote cast for or against any proposal.

The proxy also confers discretionary authority to vote on all matters that may properly come before the Annual Meeting, or any adjournment or postponement thereof, respecting: (i) matters of which the Company did not have timely notice but that may be presented at the meeting; (ii) approval of the minutes of the prior annual meeting of stockholders; (iii) the election of any person as a director if a nominee is unable to serve or for good cause will not serve; (iv) any stockholder proposal omitted from this proxy statement pursuant to Rule 14a-8 or 14a-9 of the Securities and Exchange Commission’s (the “SEC”) proxy rules; and (v) all matters incident to the conduct of the meeting.

With respect to Proposal 1, the affirmative vote of a plurality of the votes cast by the holders of shares of Common Stock entitled to vote is required to elect each of the nominees for director. Approval of each other proposal requires a majority of the votes cast by the holders of shares of Common Stock entitled to vote on the proposal.

Attending the Meeting

In an effort to protect the health and safety of the Company’s stockholders, employees, directors and communities amidst the COVID-19 pandemic, the Company is holding the Annual Meeting in a virtual meeting format only on March 10, 2022 at 10:00 a.m. Eastern Time. Stockholders as of the close of business on January 10, 2022, the record date, are entitled to participate in the Annual Meeting, including to vote their shares and ask questions.

To participate in the virtual Annual Meeting, please visit www.virtualshareholdermeeting.com/NFG2022, where you will be prompted to enter the 16-digit control number found on your proxy card or your voting instruction form provided by your broker, bank, or other nominee. If you receive your Annual Meeting materials electronically and wish to participate in the virtual meeting, please follow the instructions provided online for attendance. Once you have joined the virtual meeting, you may vote your shares electronically during the meeting by following the instructions available on the meeting website.

Questions for the Meeting

Stockholders as of the record date who participate in the virtual Annual Meeting using their control number (as described above) will have an opportunity to submit questions during the meeting. The Company will try to answer as many stockholder-submitted questions that comply with the posted rules of conduct as time permits. If the Company receives substantially similar questions, the Company will group such questions together and provide a single response to avoid repetition.

Additional Information about the Meeting

Additional information regarding the rules of conduct and procedures for participating in the virtual Annual Meeting will be posted prior to and during the meeting at www.virtualshareholdermeeting.com/NFG2022.

Revoking a Proxy

Any stockholder giving a proxy may revoke it at any time prior to the voting thereof by mailing a revocation or a subsequent proxy to National Fuel Gas Company, Attn: Sarah J. Mugel, Secretary of the Company, 6363 Main Street, Williamsville, NY 14221, by voting a subsequent proxy by phone, QR Code or by Internet, or by filing written revocation at the meeting with Ms. Mugel, Secretary of the meeting, or by casting a ballot at the meeting. If you are an employee stockholder or retired employee stockholder, you may revoke voting instructions given to the Trustee by following the instructions under “Employee and Retiree Stockholders” in this proxy statement.

 

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Employee and Retiree Stockholders

If you are a participant in the Company’s Employee Stock Ownership Plan or any of the Company’s Tax-Deferred Savings Plans (the “Plans”), the proxy card will also serve as a voting instruction form to instruct Vanguard Fiduciary Trust Company (the “Trustee”) for the Plans, as to how to vote your shares. All shares of Common Stock for which the Trustee has not received timely directions shall be voted by the Trustee in the same proportion as the shares of Common Stock for which the Trustee received timely directions, except in the case where to do so would be inconsistent with the provisions of Title I of the Employee Retirement Income Security Act (“ERISA”). If the voting instruction form is returned signed but without directions marked for one or more items, regarding the unmarked items you are instructing the Trustee and the Proxies to vote FOR all of the Director nominees named in this proxy statement, and FOR Proposals 2 and 3. Participants in the Plan(s) may also provide those voting instructions by telephone, QR Code or the Internet. Those instructions may be revoked by re-voting or by written notice to the Trustee on or before March 8, 2022 in care of the following address:

To: Vanguard Fiduciary Trust Co.

c/o National Fuel Gas Company

Attn: Legal Department

6363 Main Street

Williamsville, NY 14221

Multiple Copies of Proxy Statement

The Company has adopted a procedure approved by the SEC called “householding.” Under this procedure, some stockholders of record who have the same address and last name may receive only one copy of the proxy statement and the Company’s annual report. However, if any stockholder wishes to revoke consent for householding and receive a separate summary annual report, financial statements or proxy statement for the upcoming Annual Meeting or in the future, he or she may telephone, toll-free, 1-866-540-7095. The stockholder will need their 16-digit control number and should simply follow the prompts. Stockholders may also write Broadridge Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Stockholders sharing an address who wish to receive a single set of reports may do so by contacting their banks or brokers if they are the beneficial holders, or by contacting Broadridge at the address provided above if they are the record holders. This procedure will reduce our printing costs and postage fees, and reduce the quantity of paper arriving at your address.

Stockholders who participate in householding will continue to receive separate proxy cards. Householding will not affect your dividend check mailings.

For additional information on householding, please see “IMPORTANT NOTICE REGARDING DELIVERY OF STOCKHOLDER DOCUMENTS” in this proxy statement.

Other Matters

The Board of Directors does not know of any other matter that will be presented for consideration at the Annual Meeting. If any other matter does properly come before the Annual Meeting, the Proxies will vote in their discretion on such matter.

Annual Report

Mailed herewith or made available on the Internet is a copy of the Company’s Summary Annual Report for the fiscal year ended September 30, 2021 (“fiscal 2021”). Also enclosed or available on the Internet is a copy of the Company’s Annual Report on Form 10-K for fiscal 2021. The Company will furnish any exhibit to the Form 10-K upon request to the Secretary at the Company’s principal office, and upon payment of $5 per exhibit.

 

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PROPOSAL 1. ELECTION OF DIRECTORS

Your Company’s Board of Directors consists of eleven individuals with extensive and diverse leadership experience within the energy industry, as well as complementary industries, including manufacturing and consulting. Our Board members bring insights, experience and perspectives that come with significant tenures in senior leadership positions at major business enterprises. They have experience in the following areas, among others:

 

   

CEO/Senior Leadership Position (11)

 

   

Energy Industry Experience (10)

 

   

Operational/Safety (9)

 

   

Other Public Board of Directors Experience (8)

 

   

Federal and State Regulatory/Government Relations (7)

 

   

Legal/Compliance/Enterprise Risk Management (7)

 

   

Consumer/Customer Relations (7)

 

   

Financial/Accounting (5)

 

   

Environmental/Sustainability/Energy Transition (4)

Your Company’s commitment to diversity also extends to the Board of Directors. Your Board has continued its efforts to attract qualified, diverse candidates whose expertise and personal characteristics align with the Company’s long-term business strategy. Our Nominating/Corporate Governance Committee, which makes recommendations to the full Board on nominees for director positions, has invited qualified gender and racially diverse candidates to stand for election to the Board, with successful results. Three of the Company’s last six Directors have increased Board diversity.

Nominees for Election as Directors at the 2022 Annual Meeting of Stockholders

At the Annual Meeting, four individuals will be elected to serve as directors for one-year terms expiring in 2023. The nominees for the four directorships are: David C. Carroll, Steven C. Finch, Joseph N. Jaggers and David F. Smith. The nomination process is discussed under “Process for Nominating Directors” below.

The Company’s Restated Certificate of Incorporation (the “Certificate”) was amended after the 2021 Annual Meeting of Stockholders to provide for the declassification of the Board of Directors. Under the Certificate as amended, the Company will phase out the three-year staggered terms of our directors and transition to the annual election of directors, beginning with the 2022 Annual Meeting. By the 2024 Annual Meeting, all directors will stand for election annually. Directors of a particular class hold office until the annual meeting of the year in which the term of the class expires or, in the case of directors elected by the Board to fill vacancies or newly-created directorships, until the next annual meeting following their election. In addition, all directors hold office until their respective successors are elected and qualify, subject to prior death, resignation, retirement, disqualification or removal from office. The Company’s Certificate also provides that if the number of directors is changed by resolution of the Board, any increase or decrease shall be apportioned by the Board among the classes, if applicable, so as to maintain the number of directors in each class as nearly equal as possible, provided that a decrease in the number of directors may not shorten the term of any incumbent director.

It is intended that the Proxies will vote for the election of Messrs. Carroll, Finch, Jaggers and Smith as directors, unless they are otherwise directed by the stockholders. Although the Board has no reason to believe that any of the nominees will be unavailable for election or service, stockholders’ proxies confer discretionary authority upon the Proxies to vote for the election of another nominee for director in the event any nominee is unable to serve, or for good cause will not serve. Each of the nominees has consented to being named in this proxy statement and to serve if elected.

 

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The affirmative vote of a plurality of the votes cast by the holders of shares of Common Stock entitled to vote is required to elect each of the nominees for director.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR

THE ELECTION OF EACH OF THE FOUR NOMINEES NAMED BELOW.

 

     

David C. Carroll

Des Plaines, Illinois

                  Age:* 65                                

Tenure: Director since 2012

 

 

Professional Experience:

 

Mr. Carroll is the President and CEO of Gas Technology Institute (“GTI”), a leading research, development and training organization addressing energy and environmental challenges to enable a secure, abundant, and affordable energy future. He joined GTI in 2001 as Vice President of Business Development, and assumed his current position in 2006. Prior to joining GTI, he held various technical and management positions of increasing responsibility with Praxair, Inc., Chicago Bridge & Iron, and Air Products and Chemicals, Inc. All of these companies are industrial gas producers and manufacturers. He is a trustee of the American Gas Foundation, a member of the Governing Board of Stanford University’s Natural Gas Initiative, and a member of the Society of Gas Lighting. He was also Chairman of the steering committee for the 17th International Conference and Exhibition on Liquefied Natural Gas in Houston (2013). In June 2015, Mr. Carroll was named President of the International Gas Union, a term that concluded in June 2018 as the United States held the 2018 World Gas Conference in Washington, D.C.

 

Qualifications:

 

Mr. Carroll is a highly respected leader in the global energy sector, directing the development of strategies, technologies, and innovations necessary to drive transformation of the global energy system. His multi-faceted knowledge of the natural gas industry brings economic, technological and leadership experience to the Board. Through his professional career, Mr. Carroll has developed expertise on unconventional gas production, transmission and distribution pipeline integrity and end use technologies as well as insight into market and industry developments and conditions. This unique combination of skills contributes to the Board’s oversight of our integrated natural gas operations, including the deployment of technology to enhance safety, reliability, and emissions reductions, and provides valuable insight into risks and opportunities for the continued growth of the Company’s various business segments, as well as insight into global energy trends and emerging industries. Mr. Carroll is heavily involved in both the domestic and international natural gas business communities, providing the Board with a broad perspective on emerging technical, regulatory and economic issues, including climate initiatives and the positioning of natural gas among future global energy supplies.

 

  

LOGO

 

 

Board Committees

 

Executive

Nominating/Corporate

Governance

 

Former Company
Directorships

 

Versa Power Systems, Inc.
(wholly-owned subsidiary of
FuelCell Energy, Inc.)

 

Education

 

University of Pittsburgh, B.S. in
Chemical Engineering

 

Lehigh University, MBA

 

Stanford University Graduate
School of Business, Stanford
Executive Program

 

*

All ages are as of the Annual Meeting date.

 

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Steven C. Finch

Buffalo, New York

                  Age: 63                                

Tenure: Director since 2018

 

 

Professional Experience:

 

Mr. Finch is President of Manufacturing and Community Engagement at Viridi Parente, Inc., a developer and manufacturer of environmentally conscious energy usage and storage products, including battery powered energy delivery systems for heavy equipment, and energy storage and power management systems. He is the former Plant Manager of the General Motors (“GM”) Tonawanda Engine Plant, one of Western New York’s largest manufacturers with approximately 1,600 employees. Mr. Finch, a Western New York native, began his 41-year career with GM in 1976 as a General Motors Institute co-op student at the Chevrolet Gear and Axle Plant in Buffalo, N.Y. Over the course of 30 years, he held several assignments with increasing responsibility at various GM facilities outside Buffalo before becoming Tonawanda Engine Plant Manager in 2007. Mr. Finch is a member of the Board of Directors of Allied Motion Technologies Inc., a designer and manufacturer of precision and specialty controlled motion components and systems. He serves as Chairman of the Board of Directors of the Buffalo Urban League and as a member of the Board of Directors of the Community Foundation for Greater Buffalo, serving on its Racial Equity Roundtable initiative. He was a previous Chairman of the Board of the United Way of Buffalo and Erie County, and a previous board member and Senior Vice President of the Automobile Association of America Western and Central New York.

 

Qualifications:

 

With a career spanning more than four decades, Mr. Finch has a proven track record of leadership during a period of significant evolution for the automotive industry. Mr. Finch helped navigate the GM workforce through economic downturn and bankruptcy. After a reorganization, he successfully secured the addition of three new engine product lines, ultimately overseeing investments at the plant totaling more than $3 billion during his 10-year tenure. Through his extensive career, including his current focus at Viridi Parente on the future of mobile and in-place energy usage, Mr. Finch has developed expansive and diverse experience in manufacturing and customer relations, as well as in capital and labor management. Mr. Finch’s success in managing highly technical operations and delivering quality products in a safe, environmentally responsible and cost-effective manner has direct application to National Fuel’s work in the energy industry, including the Company’s focus on environmental stewardship and emissions reductions, employee safety and commitment to the provision of outstanding service to residential customers. Mr. Finch’s experience in senior level oversight during periods of significant industry challenge and disruption provides an important perspective on organizational transformation and the management of regulatory and economic change. Furthermore, Mr. Finch’s strong community presence positions him to provide guidance and insight to the Board on local and regional matters, and provides an important connection between the Company and the communities it serves.

 

 

      

LOGO

 

   
   

 

Board Committees

 

Audit

Nominating/Corporate Governance

 

Education

 

Kettering University (formerly
General Motors Institute), B.S.
in Electrical Engineering

   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   

 

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Joseph N. Jaggers

Horseshoe Bay, Texas

                  Age: 68                                

Tenure: Director since 2015

 

 

Professional Experience:

 

Mr. Jaggers is the founder and former President, Chief Executive Officer and Chairman of Jagged Peak Energy Inc., formerly an independent oil and natural gas exploration and production company. Before forming Jagged Peak Energy in 2013, Mr. Jaggers served as President and Chief Executive Officer and as director of Ute Energy, LLC, from 2010 until its sale in 2012. From 2006 to 2010, he served as director, President and Chief Operating Officer of Bill Barrett Corporation. From 2001 to 2006, he was Vice President, Exploration & Production, for Williams Companies. Previously, he served as President and Chief Operating Officer of Barrett Resources, from 2000 until its sale to Williams in August 2001. From 1981 through 2000, he worked for BP Amoco in various domestic and international assignments of increasing responsibility culminating in executive oversight for the Northern North Sea, one of BP’s largest producing assets at the time. Mr. Jaggers is past President of the Colorado Oil and Gas Association, past Executive Director of the Independent Producers Association of the Mountain State and an inductee into the Rocky Mountain Oil and Gas Hall of Fame.

 

Qualifications:

 

With more than 40 years of experience in the oil and gas industry, including a long record of creating value through efficiently achieving production and reserve growth, Mr. Jaggers has familiarity with market cycles and dynamics and contributes significantly to the Board’s oversight of our exploration and production business. Mr. Jaggers’ extensive operational experience in diverse producing basins provides the Board with substantial insight in assessing various risks that may affect oil and gas operations at the Company. With experience as a senior leader in a number of large, publicly-traded exploration and production companies, Mr. Jaggers adds significant operational depth to the Board as well as an understanding of effective and efficient resource development. These attributes assist the Board in its oversight of the ongoing development of the Company’s various oil and gas assets and evaluation of the continued advancement of the Company’s Appalachian drilling program.

 

  

LOGO

 

 

 

 

 

Board Committees

 

Audit

Compensation, Chair

Executive

 

Former Public Company
Directorships

 

QEP Resources, Inc.

Jagged Peak Energy Inc.

Bill Barrett Corporation

Mission Resources Corporation

 

Education

 

United States Military Academy
at West Point, B.S.

 

 

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  David F. Smith

  Scottsdale, Arizona

                  Age: 68                                

Tenure: Director since 2007

 

 

Professional Experience:

 

Mr. Smith has been Chairman of the Board of the Company since 2010 (from 2013 to 2014 he served as Executive Chairman of the Board). He also served as Chief Executive Officer of the Company from 2008 to 2013; as President of the Company from 2006 to 2010; and as Chief Operating Officer of the Company from 2006 to 2008. Mr. Smith was also President and/or Chairman of each of the Company’s major subsidiaries over the course of his career. He is a Board member of Gas Technology Institute (Executive Committee and Audit Committee), Emeritus Board member of the State University of New York at Buffalo Law School Dean’s Advisory Council, a former director of the American Gas Association and former Chairman of the Board of Directors of the Business Council of New York State. He is also past Chairman of the Northeast Gas Association and Buffalo Niagara Enterprise.

 

Qualifications:

 

Mr. Smith brings to the Board significant industry and Company expertise and leadership experience. His 36-year tenure with the Company, which included key leadership positions within all of the Company’s business segments has resulted in significant knowledge of the Company’s history and strategies during its substantial growth from a regional utility to a much larger diversified energy company. He also brings a long and active participation in industry groups that identify and address important issues facing the Company and has well-established relationships of trust with other industry leaders. In addition, Mr. Smith has deep ties to businesses and civic organizations in Western New York (the location of the Company’s corporate headquarters and most of its business units). His experience as an active participant during decades of regulatory evolution at the state and federal levels provides valuable perspective and insight into the political and regulatory trends impacting the Company’s regulated interstate pipeline and storage, and utility businesses.

      

 

LOGO

   
   

 

Board Committees

 

Executive, Chair

Financing, Chair

 

Education

 

State University of New York at Fredonia, B.A. in Political

Science

State University of New York at

Buffalo School of Law, J.D.

   
   
   
   

 

8


Table of Contents

Continuing Directors Whose Terms Expire in 2023

 

     

  Jeffrey W. Shaw

  Highland, Utah

                  Age: 63                                

Tenure: Director since 2014

 

 

Professional Experience:

 

Mr. Shaw retired as Chief Executive Officer of Southwest Gas Corporation (“Southwest”) on March 1, 2015. He was named Chief Executive Officer and a director of Southwest in 2004 and also served as President of Southwest at various times from 2003 to 2014. Previously Mr. Shaw, a CPA, held various positions at Southwest, including Director of Internal Audit, Controller and Chief Accounting Officer, Vice President/Controller and Chief Accounting Officer, Vice President and Treasurer, Senior Vice President/Finance and Treasurer, and Senior Vice President/Gas Resources and Pricing. He worked for Arthur Anderson & Co. in its Dallas and Las Vegas offices in the audit division prior to joining Southwest in May of 1988. He is a member of the American Institute of Certified Public Accountants, the Nevada Society of CPAs and the Leadership Las Vegas Alumni Association. Mr. Shaw is a member of the Advisory Board of the University of Utah David Eccles School of Business and is a member and past Chairman of the Broadcast Leadership Council at Brigham Young University. He is a past director of Southwest Gas Corporation and the American Gas Association, past Chairman and director of the Western Energy Institute and past President and trustee of the Las Vegas Area Council of the Boy Scouts of America.

 

Qualifications:

 

Mr. Shaw’s extensive executive management and financial experience at an energy company with regulated natural gas businesses similar to those of the Company provides the Board with valuable perspective and understanding of state regulatory activities. In particular, Mr. Shaw’s accounting and finance background, and the significant roles he has held in these areas over his career, qualify him as an “Audit Committee Financial Expert” under the Securities and Exchange Commission’s rules and enable him to play a key role in performing the Board’s audit oversight function. In addition, Mr. Shaw’s background and financial expertise contribute to the Board’s understanding and guidance on financial matters. Mr. Shaw is the Company’s Lead Independent Director.

 

      

 

LOGO

   
   

 

Board Committees

 

Audit, Chair

Nominating/Corporate

Governance

 

Former Public Company

Directorships

 

Southwest Gas Corporation

 

Education

 

University of Utah, B.S. in

Accounting

 

Certified Public Accountant

 

   
   
   

 

9


Table of Contents
     

  Thomas E. Skains

  Charlotte, North Carolina

                  Age: 65                                

Tenure: Director since 2016

 

 

Professional Experience:

 

Mr. Skains is the former Chairman of the Board, Chief Executive Officer and President of Piedmont Natural Gas Company, Inc., serving from 2002 as President and from 2003 as Chairman and CEO, until his retirement in October 2016. Previously, Mr. Skains held various positions at Piedmont, including Chief Operating Officer and Senior Vice President — Marketing and Supply Services. Mr. Skains held positions of increasing responsibility with Transcontinental Gas Pipe Line Corporation, which he joined in 1981 as an attorney and served as corporate and senior attorney before being named Vice President in 1986 and Senior Vice President — Transportation and Customer Services in 1989. In October 2016, Mr. Skains became a director at Duke Energy Corporation, where he has chaired its Regulatory Policy Committee and served on its Finance and Risk Management and Nuclear Oversight Committees, and where he currently serves on its Compensation and People Development and Corporate Governance Committees. Mr. Skains has served as a director of Truist Financial Corporation and its predecessor BB&T Corporation since 2009, where he chairs its Executive Committee and serves on its Risk Committee and Nominating and Governance Committee, and where he previously chaired its Nominating and Corporate Governance Committee and its Risk Committee. Mr. Skains has also served as a director at Truist Financial Corporation’s subsidiary, Truist Bank (formerly Branch Banking and Trust Company), since 2013, where he chairs its Executive Committee and serves on and previously chaired its Risk Committee. Mr. Skains previously served on the Charlotte Chamber of Commerce Board of Directors and was Chairman in 2015. He also served on the boards of several industry and community organizations, including Gas Technology Institute, the American Gas Association (as Chairman in 2009), the Southern Gas Association (as Chairman in 2006) and the American Gas Foundation (a not-for-profit energy research group).

 

Qualifications:

 

Mr. Skains’ strong leadership and strategic management skills provide the Board with a valuable perspective on the complexities, challenges and opportunities facing the natural gas industry. Through his experiences at Piedmont and Transco, as well as his ongoing directorship at Duke Energy, Mr. Skains contributes significant knowledge of the legal and regulatory issues encountered by project sponsors in developing energy infrastructure, including natural gas pipeline projects. Mr. Skains brings to the Board extensive knowledge of the natural gas industry and is able to use his legal training and experience as a corporate energy attorney to provide insight on legal and regulatory compliance matters and contribute to corporate governance matters.

 

      

 

LOGO

   
   

 

Board Committees

 

Compensation

Nominating/Corporate

Governance

 

Public Company

Directorships

 

Duke Energy Corporation

 

Truist Financial Corporation

 

Former Public Company

Directorships

 

Piedmont Natural Gas

Company, Inc.

 

Education

 

Sam Houston State University,

B.B.A

 

University of Houston Law

School, J.D.

   
   
   
   
   
   

 

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Table of Contents
     

  Ronald J. Tanski

  Naples, Florida

                  Age: 69                                

Tenure: Director since 2014

 

 

Professional Experience:

 

Mr. Tanski was President and Chief Executive Officer of the Company from 2013 until his retirement in 2019. He previously served as President and Chief Operating Officer of the Company from 2010 to 2013 and as Treasurer and Principal Financial Officer from 2004 to 2010. Mr. Tanski was President of National Fuel Gas Supply Corporation from 2008 to 2010 and President of National Fuel Gas Distribution Corporation from 2006 to 2008. He was previously Treasurer of those and other subsidiaries of the Company, and he also served in management roles at Seneca Resources Corporation (now Seneca Resources Company, LLC) and Horizon Energy Development, Inc. (sold in 2010). He is a member of the Board of Directors of CMS Energy Corporation and the Board of Directors of its wholly-owned subsidiary, Consumers Energy Company. He previously served as a director of the Interstate Natural Gas Association of America (“INGAA”) and was INGAA Chairman in 2015. Mr. Tanski was a director of the American Gas Association and a member of the Council on Accountancy at Canisius College.

 

Qualifications:

 

Mr. Tanski has over four decades of industry experience, beginning his career as an attorney for the Company, and thereafter serving in various management capacities across the Company’s diversified energy business. Through his broad range of experience, including numerous senior leadership positions in both the Company’s regulated utility, and interstate natural gas transmission and storage businesses, as well as within the Company’s exploration and production subsidiary, he gained hands-on, practical knowledge about the natural gas industry, and virtually every aspect of the Company’s operations. Mr. Tanski’s role as CEO and substantial management experience with the Company’s subsidiaries, his detailed understanding of the Company’s integrated operations, and in particular, his financial and legal background with the Company, assist the Board with management of the Company’s operations. Mr. Tanski’s leadership roles at the Company during periods of regulatory change and through several commodity price cycles, as well as his participation with industry trade associations, including the prior chairmanship of a national pipeline trade association, also provide important insight into the business climates and regulatory environments in which the Company’s subsidiaries operate.

 

      

 

LOGO

 

   
   

 

Board Committees

 

Executive

Financing

 

Public Company

Directorships

 

CMS Energy Corporation

 

Consumers Energy Company

 

Education

 

State University of New

York at Buffalo, B.A. in

Biology

 

State University of New

York at Buffalo, MBA

 

State University of New

York at Buffalo School of

Law, J.D.

   
   
   

 

11


Table of Contents

Continuing Directors Whose Terms Expire in 2024

 

     

David H. Anderson

Portland, Oregon

                  Age: 60                                

Tenure: Director since 2019

 

Professional Experience:

 

Mr. Anderson is President and Chief Executive Officer of Northwest Natural Holding Company (“Northwest Holdings”) and Northwest Natural Gas Company, a local distribution company that provides natural gas service to approximately 2.5 million people in Oregon and Southwest Washington through over 780,000 connections with one of the most modern pipeline systems in the nation. In addition, Northwest Holdings’ subsidiaries provide water distribution and wastewater services to communities throughout the Pacific Northwest and Texas, serving approximately 65,000 people through 27,000 connections. Mr. Anderson has held a series of positions with increasing responsibility at Northwest Holdings since joining the company in 2004, including Chief Operating Officer and Chief Financial Officer. Previously, he was Senior Vice President and Chief Financial Officer at TXU Gas Company and Chief Accounting Officer at TXU Corporation, an energy services company that included electricity generation and the transmission and distribution of electricity and natural gas. Mr. Anderson serves as a director of Northwest Holdings. He was Chair of the Board of Directors of the American Gas Association (AGA) and Compensation Committee Chair in 2021, and previously served as First Vice Chair. He is past chairman of the AGA’s Audit Committee, past co-chairperson of the AGA’s Carbon Policy Task Force, a member of the AGA’s Finance Committee and Safety, Resilience/Reliability and Security Task Force, and a board trustee of the American Gas Foundation. Additionally, he serves as a director of the Oregon Business Council. Mr. Anderson also serves on Oregon Governor Kate Brown’s Global Warming Commission and is a member of the Founders’ Circle of SOLVE, an Oregon non-profit dedicated to environmental stewardship.

 

Qualifications:

 

Mr. Anderson’s extensive financial and operational experience in the electric and natural gas industries and leadership roles on environmental matters provide the Board with important perspectives with respect to the Company’s business operations, sustainability, and financial positioning. The combined professional skills and energy industry insights Mr. Anderson brings to the Board strengthen the Board’s collective knowledge, capabilities, and experience. Mr. Anderson’s experience in highly regulated industries impacted by emerging climate initiatives enables him to provide valuable perspective and management oversight on subjects including public policy, government relations, and regulatory compliance. In addition, the significant roles he has held in accounting and finance qualify Mr. Anderson as an “Audit Committee Financial Expert” under the Securities and Exchange Commission’s rules.

 

      

LOGO

   
   

 

Board Committees

 

Audit

Compensation

Financing

 

Public Company Directorships

 

Northwest Natural Holding Company

 

Education

 

Texas Tech University, B.B.A. in Accounting

Certified Public Accountant (retired)

Chartered Global Management Accountant

   
   
   
   

 

12


Table of Contents
     

David P. Bauer

Buffalo, New York

                  Age: 52                                

Tenure: Director since 2020

 

 

Professional Experience:

 

Mr. Bauer has been President and Chief Executive Officer of the Company since 2019. He previously served as President of National Fuel Gas Supply Corporation, the Company’s principal pipeline and storage subsidiary, from 2016 to 2019, and as Treasurer and Principal Financial Officer of the Company from 2010 to 2019. Mr. Bauer joined the Company in 2001, after more than 10 years in public accounting at PricewaterhouseCoopers LLP, and served as Assistant Treasurer or Treasurer of the Company’s various operating subsidiaries from 2004 to 2019. He is a director of the American Gas Association, Invest Buffalo Niagara, Catholic Health System, and YMCA Buffalo Niagara, where he chairs the finance committee. He also serves as chairman of the audit committee of D’Youville College and as a member of the Canisius College Business Advisory Council and the Diocese of Buffalo Investment Committee.

 

Qualifications:

 

As a member of the Company’s executive team since 2004, Mr. Bauer brings to the Board substantial management experience and in-depth knowledge of the Company’s operations and strategic direction. His oversight of key infrastructure modernization and expansion projects, together with his leadership role in maintaining the Company’s fiscal strength, will assist the Board with investment strategy, capital allocation and risk management. In addition, Mr. Bauer’s deep ties to Western New York, the location of the Company’s corporate headquarters, will enhance the Board’s understanding of local and regional issues.

 

      

LOGO

 

   
   

 

Board Committees

 

Executive

Financing

 

Education

 

Boston College, B.S. in
Accounting

   
   

 

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Table of Contents
     

Barbara M. Baumann

Denver, Colorado

                  Age: 66                                

Tenure: Director since 2020

 

 

Professional Experience:

 

Ms. Baumann is a former BP Amoco executive who currently serves as President and Owner of Cross Creek Energy Corporation, an energy advisory firm with investments in the domestic oil and gas business. Prior to founding her own firm in 2003, Ms. Baumann was Executive Vice President of Associated Energy Managers, a private equity firm investing in energy companies. Ms. Baumann began her 18-year career with Amoco (later BP Amoco) in 1981. She served in various areas of finance and operations, including Chief Financial Officer of Ecova Corporation, Amoco’s wholly-owned environmental remediation business, and Vice President of Amoco’s San Juan Basin business unit. She is a member of the Board of Directors of Devon Energy Corporation and a member of the independent Board of Trustees of Putnam Mutual Funds. In addition, she is a senior advisor for First Reserve Corporation, a private equity firm focused on energy, and serves as a director of privately held companies Ascent Resources and Texas American Resources II (TARC II). Ms. Baumann previously served on the boards of Buckeye Partners, L.P., SM Energy Company, CVR Energy, Inc., UNS Energy Corporation, and privately held Hat Creek Energy Corporation. She is a former board member and treasurer of The Denver Foundation and current member of its investment committee; a member of the finance committee of Children’s Hospital Colorado; and a board member of the National Association of Corporate Directors, Colorado Chapter. She is also a past member and past chair of the Board of Trustees of Mount Holyoke College.

 

Qualifications:

 

Ms. Baumann brings to the Board extensive knowledge of the energy industry, including particular expertise in the oil and gas exploration and production business. Over the course of her distinguished career, she has gained broad strategic planning, economic evaluation, operational, natural gas marketing, and human resources management skills and experience, which are important to the oversight of financial, operational, and compensation management functions. She also has significant financial, accounting and risk management experience, qualifying her as an “Audit Committee Financial Expert” under the Securities and Exchange Commission’s rules. Ms. Baumann’s service on other public and private company boards enhances her strong corporate governance background, and her position as an independent trustee of a large family of mutual funds provides insight into the perspective of institutional stockholders.

 

      

LOGO

 

   
   

 

Board Committees

 

Audit

Financing

 

Public Company Directorships / Private
Company Trusteeships

 

Devon Energy Corporation

Putnam Mutual Funds

 

Former Public Company
Directorships

 

Buckeye Partner, L.P.

 

SM Energy Company

 

CVR Energy, Inc.

 

UNS Energy Corporation

 

Education

 

Mount Holyoke College, B.A.

 

Wharton School of the
University of Pennsylvania,
MBA

   

 

14


Table of Contents
     

Rebecca Ranich

Baltimore, Maryland

                  Age: 63                                

Tenure: Director since 2016

 

 

Professional Experience:

 

Ms. Ranich is a former director at Deloitte Consulting, LLP, where she led the firm’s Energy and Sustainability Investment Advisory Services for public sector clients, providing counsel on more than $1 billion of investments. Her practice focused on strategic energy investments designed to mitigate and manage risks related to energy supply, demand and climate change issues. Preceding her position at Deloitte, Ms. Ranich worked at PSG International, where she was a member of the management team leading negotiations to implement the Trans-Caspian Gas Pipeline, a multi-billion dollar, 1,700-kilometer pipeline project transporting natural gas from Turkmenistan to Turkey. She was previously a Vice President at Michael Baker Corporation, an international engineering, energy and environmental services firm. While at Baker, she held executive responsibility for delivering energy and environmental engineering services in Europe, Russia and the Caspian region, overseeing projects with a construction value in excess of $40 billion. She managed offices in London, Naples, Wiesbaden and Moscow. Ms. Ranich served as a member of the Board of Directors of Questar Corporation from 2013 to 2016, when Questar was acquired by Dominion Resources, Inc. At Questar she was Chair of the Board’s Governance and Nominating Committee. She is a former member of the Board of Directors of Cardno Limited, an Australian infrastructure and environmental services company, and a former member of the Supervisory Board at Uniper SE, a German power generation and energy supply chain corporation. She serves as Chair of the Board of the Gas Technology Institute and Chair of its Investment Committee, and she is an advisory board member of Yet Analytics, an xAPI data analytics platform. In addition to being an investor in and advisor to emerging technology companies, Ms. Ranich is a member of the Technology Commercialization Panel for the Johns Hopkins University Applied Physics Laboratory.

 

Qualifications:

 

Ms. Ranich’s wealth of experience and formidable skills in strategic energy investments, project development, risk management and corporate governance contribute significantly to the Board. With her work on sustainable environmental practices and extensive global industry experience, including first-hand involvement in high-risk environments and large-scale projects designed to effect significant advancements in the delivery of energy, Ms. Ranich complements the diverse backgrounds on the Board, adds a keen understanding of risk, and provides a unique global perspective. Ms. Ranich also brings to the Board her prior experience as chair of a public company corporate governance committee, and a successful track record of establishing, building and leading energy-focused businesses.

 

      

LOGO

 

   
   

 

Board Committees

 

Audit

Nominating/Corporate

Governance, Chair

 

Former Public Company
Directorships

 

Questar Corporation

 

Cardno Limited

 

Uniper SE

 

Education

 

Northwestern University, B.A.
in Soviet Studies

 

University of Detroit Mercy,
MBA

   
   
   
   

 

15


Table of Contents

CORPORATE GOVERNANCE

The Board of Directors is committed to effective corporate governance. The Board has adopted Corporate Governance Guidelines that provide a framework for the governance of the Company, and it regularly reviews corporate governance developments. The Board has implemented many strong governance practices, including maintaining a significant complement of independent directors (currently nine out of eleven), designating a Lead Independent Director, holding regular meetings of the non-management and/or independent directors, separating, at the Board’s discretion, the roles of Chairman of the Board and Chief Executive Officer, and providing a process for stockholders meeting certain requirements to have nominees included in the Company’s proxy materials. In addition, the Company’s Code of Business Conduct and Ethics, which applies to all directors, officers and employees, sets forth standards for conducting business in an honest and ethical manner.

Diversity

National Fuel’s commitment to diversity extends both to its workforce and your Board of Directors. Under the Company’s Corporate Governance Guidelines, the Board of Directors is required, when selecting candidates for re-election and candidates for Board membership, to consider factors that include diversity of perspectives, including all aspects of diversity (race, ethnicity, national origin, gender and other protected classes), to be brought to the Board by the individual members. In recent years, National Fuel’s Nominating/Corporate Governance Committee, which makes recommendations to the full Board on nominees for director positions, has invited qualified gender and racially diverse candidates to stand for election to the Board, with successful results. The Board will continue its efforts to attract qualified diverse Board candidates whose expertise and personal characteristics align with the Company’s long term business strategy. This commitment is reflected in the Company’s Process for Identifying and Evaluating Nominees for Director (Exhibit B to the Corporate Governance Guidelines), which provides that, in identifying independent director candidates for nomination to the Board, the Nominating/Corporate Governance Committee, and any search firm it engages, is committed to including in any initial candidate pool qualified racially, ethnically and/or gender diverse candidates. Board member Rebecca Ranich serves as Chair of the Nominating/Corporate Governance Committee, and women have long occupied National Fuel’s top corporate levels. Today, four of the Company’s nine designated executive officers are women who hold the following important policy-making positions: President of the Company’s Utility segment; General Counsel and Secretary, who also serves as the Company’s Compliance Officer; Treasurer and Principal Financial Officer; and Controller and Principal Accounting Officer.

Director Independence

The Board of Directors has determined that directors Anderson, Baumann, Carroll, Finch, Jaggers, Ranich, Shaw, Skains and Smith are independent, that Mr. Tanski is not independent due to his employment relationship with the Company within the past three years, and that Mr. Bauer is not independent due to his current employment relationship with the Company. The Board’s determinations of director independence were made in accordance with the listing standards of the New York Stock Exchange (the “NYSE”) and SEC regulations. In making its independence determinations, the Board considered that Mr. Carroll is President and Chief Executive Officer of GTI, an organization that receives payments from the Company for dues and fees to support research and development, and that such payments in each of GTI’s last three fiscal years were less than (i) $1,000,000 or (ii) 2% of GTI’s consolidated gross revenues for the applicable fiscal year.

Board Leadership Structure

Non-management directors meet at regularly scheduled executive sessions without management. In addition, the independent directors met during fiscal 2021, in accordance with NYSE listing standards. The sessions were chaired by Jeffrey W. Shaw, as Lead Independent Director.

 

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Table of Contents

In March 2021, the Board of Directors re-elected Mr. Smith as Chairman of the Board and re-elected Mr. Bauer as President and Chief Executive Officer. The Board believes that Mr. Smith’s role as Chairman and Mr. Bauer’s position as Chief Executive Officer constitute an effective leadership model, given Mr. Smith’s past experience in the role of CEO and experience as Chairman of the Board and Mr. Bauer’s appointment as CEO in 2019. The Board believes this is the optimal leadership structure at this time and reviews and considers this structure at least annually. As in the past, it is the Board’s opinion that the stockholders’ interests are best served by allowing the Board to retain flexibility to determine the optimal organizational structure for the Company at a given time, including whether the roles of Chairman and CEO should be filled by the same person. At times in the past the roles have been separate and at other times they have been combined. The members of the Board possess considerable experience and unique knowledge of the challenges and opportunities the Company faces, have significant industry experience and are in the best position to evaluate its needs and how best to organize the capabilities of the directors and management to meet those needs.

The Board of Directors provides a process for stockholders and other interested parties to send communications to the Board or to certain directors. Communications to the Lead Independent Director, to the non-management directors as a group, or to the entire Board should be addressed as follows: Lead Independent Director, c/o 6363 Main Street, Williamsville, NY 14221. For the present, all stockholder and interested parties’ communications addressed in such manner will go directly to the indicated directors. If the volume of communication becomes such that the Board determines to adopt a process for determining which communications will be relayed to Board members, that process will appear on the Company’s website at www.nationalfuel.com.

Annual Meeting Attendance

Last year, all directors attended the 2021 Annual Meeting, and all directors are expected to attend this year’s meeting.

Meetings of the Board of Directors and Standing Committees

In fiscal 2021, there were five meetings of the Board of Directors. In addition, directors attended meetings of standing or pro tempore committees. The Audit Committee held nine meetings, the Compensation Committee held five meetings, the Financing Committee held one meeting, and the Nominating/Corporate Governance Committee held four meetings. During fiscal 2021, all directors attended at least 75% of the aggregate of meetings of the Board and of the committees of the Board on which they served. In addition, Board members regularly attend meetings of committees on which they do not serve, although committee decision-making is reserved to committee members.

 

17


Table of Contents

The table below shows the number of committee meetings conducted in fiscal 2021 and the directors who served on these committees as of September 30, 2021.

 

    BOARD COMMITTEES

DIRECTOR

  Audit   Compensation   Executive   Financing   Nominating/
Corporate
Governance

David H. Anderson

  X   X     X  

David P. Bauer

      X   X  

Barbara M. Baumann

  X       X  

David C. Carroll

      X     X

Steven C. Finch

  X         X

Joseph N. Jaggers

  X   Chair   X    

Rebecca Ranich

  X         Chair

Jeffrey W. Shaw

  Chair         X

Thomas E. Skains

    X       X

David F. Smith

      Chair   Chair  

Ronald J. Tanski

      X   X  

Number of Meetings in Fiscal 2021

  9   5   0   1   4

Audit Committee

The Audit Committee is a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee held nine meetings during fiscal 2021 in order to review the scope and results of the annual audit, to receive reports of the Company’s independent registered public accounting firm and chief internal auditor, to monitor compliance with the Company’s Reporting Procedures for Accounting and Auditing Matters (included in this proxy statement as Appendix A), to review the Company’s enterprise risk management program and to prepare a report of the Audit Committee’s findings and recommendations to the Board of Directors. A current copy of the charter of the Audit Committee is available on the Company’s website at www.nationalfuel.com. The members of the Audit Committee are independent as independence for audit committee members is defined in NYSE listing standards and in SEC regulations. No Audit Committee member simultaneously serves on the audit committees of more than three public companies. The Board limits the number of audit committees on which an Audit Committee member can serve to three, unless the Board has determined that such simultaneous service would not impair the ability of such members to serve effectively. The Company’s Board of Directors has determined that the Company has three audit committee financial experts (as defined by SEC regulations) serving on its Audit Committee, namely Mr. Shaw, Mr. Anderson and Ms. Baumann. The Board has also determined, in its business judgment in accordance with NYSE listing standards, that all members of the Audit Committee are financially literate.

In connection with its review of the Company’s internal audit function, the Audit Committee in 2021 had an external quality assessment performed by IIA Quality Services, LLC under the Institute of Internal Auditors’ (the “IIA”) International Standards for the Professional Practice of Internal Auditing (the “Standards”). The assessment concluded that the Company’s Audit Services Department generally conforms to the Standards, the IIA Code of Ethics, and the Definition of Internal Auditing. “Generally conforms” is the IIA’s highest rating. The Standards state that an external quality assessment should be conducted at least once every five years.

Further information relating to the Audit Committee appears in this proxy statement under the headings “Audit Fees” and “Audit Committee Report.”

 

18


Table of Contents

Compensation Committee

As described in the Compensation Discussion and Analysis in this proxy statement, the Compensation Committee held five meetings during fiscal 2021 in order to review and determine the compensation of Company executive officers and to review reports and/or grant awards under the National Fuel Gas Company 2010 Equity Compensation Plan, as amended and restated (the “2010 Equity Compensation Plan”), the 2012 Annual At Risk Compensation Incentive Plan (“AARCIP” or the “At Risk Plan”), and the Executive Annual Cash Incentive Program (“EACIP”). The members of the Compensation Committee are independent under NYSE listing standards and “non-employee directors” as defined in SEC regulations. A current copy of the charter of the Compensation Committee is available on the Company’s website at www.nationalfuel.com.

The Compensation Committee is responsible for various aspects of executive compensation, including approval of the base salaries and incentive compensation of the Company’s executive officers. The Compensation Committee is authorized to evaluate director compensation and make recommendations to the full Board regarding director compensation. The Compensation Committee may form subcommittees and delegate to those subcommittees such authority as the Compensation Committee deems appropriate, other than authority required to be exercised by the Compensation Committee as a whole. The Compensation Committee also administers the Company’s 2010 Equity Compensation Plan, the 1997 Award and Option Plan, and the At Risk Plan and approves performance conditions and target incentives for executive officers who are participants in the EACIP. As described more fully in the Compensation Discussion and Analysis, the Compensation Committee retained Korn Ferry (a unit of Korn/Ferry International) (“Korn Ferry”) and Meridian Compensation Partners, LLC (“Meridian”), both independent compensation consulting firms, to assist in determining executive compensation. In addition, as set forth in the Compensation Committee’s charter, the Chief Executive Officer may and does make, and the Compensation Committee may and does consider, recommendations regarding the Company’s compensation and employee benefit plans and practices, including the compensation of executive officers other than himself. The Compensation Committee then approves executive compensation as it deems appropriate. The Compensation Committee has assessed the independence of the compensation consultants under NYSE listing standards and has determined their work presents no conflicts of interest under SEC regulations. For more information regarding the role of the compensation consultants and the Chief Executive Officer in determining or recommending the amount or form of executive compensation, see the Compensation Discussion and Analysis.

Executive Committee

The Executive Committee did not meet during fiscal 2021. The Executive Committee has, and may exercise, the authority of the full Board, except as may be prohibited by New Jersey corporate law (N.J.S.A. § 14A:6-9).

Financing Committee

The Financing Committee held one meeting during fiscal 2021. The Financing Committee may exercise Board authority with respect to specific financing matters for which the Board has delegated responsibility to it.

Nominating/Corporate Governance Committee

All the members of the Nominating/Corporate Governance Committee are independent, as independence is defined in NYSE listing standards. The Nominating/Corporate Governance Committee makes recommendations to the full Board on nominees for the position of director. The Nominating/Corporate Governance Committee also has duties regarding corporate governance matters as required by law, regulation or NYSE rules. Additionally, the Nominating/Corporate Governance Committee oversees the Company’s strategy and reporting with respect to corporate responsibility matters, including ESG

 

19


Table of Contents

factors that are of significance to the Company and its stakeholders. The Nominating/Corporate Governance Committee provides guidance to management on corporate responsibility issues and makes recommendations to the Board regarding corporate responsibility initiatives and strategies. A current copy of the charter of the Nominating/Corporate Governance Committee is available on the Company’s website at www.nationalfuel.com. The Nominating/Corporate Governance Committee held four meetings during fiscal 2021.

Method of Evaluating Board and Committee Effectiveness

Annually, the Board and each of the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee take part in a self-evaluation process to determine their effectiveness and opportunities for improvement. Questionnaires are provided to each director soliciting comments with respect to dynamics of the full Board and each of the above committees, on which the director serves, as well as director performance and adequacy of Board materials. The confidential responses are summarized for Board and Nominating/Corporate Governance committee review. Board members are requested to report dissatisfaction with individual performance to the Chairman of the Board and the Chairman of the Nominating/Corporate Governance Committee. At a Board and Nominating/Corporate Governance Committee meeting, time is allocated to discuss the summary and review any comments or inadequacies.

Process for Nominating Directors

Stockholders may recommend individuals to the Nominating/Corporate Governance Committee to consider as potential nominees. Procedures by which stockholders may make such recommendations are set forth in Exhibit B to the Company’s Corporate Governance Guidelines, described in the following paragraph. In addition, the Company’s By-Laws provide a process for stockholders meeting certain requirements to have nominees included in the Company’s proxy materials.

In general, the Nominating/Corporate Governance Committee’s charter provides for the Nominating/Corporate Governance Committee to develop and recommend to the Board criteria for selecting new director nominees and evaluating unsolicited nominations, which criteria are included in this proxy statement as part of the Company’s Corporate Governance Guidelines. A current copy of the Corporate Governance Guidelines is included in this proxy statement as Appendix B, and is available on the Company’s website at www.nationalfuel.com. Appendix B also addresses the qualifications and skills the Nominating/Corporate Governance Committee believes are necessary in a director, and the Nominating/Corporate Governance Committee’s consideration of stockholder recommendations for director. Pursuant to the Corporate Governance Guidelines, in order to be considered in connection with the 2023 Annual Meeting of Stockholders, stockholder recommendations identifying a proposed nominee and setting out his or her qualifications should be delivered to the Company’s Secretary at its principal office no later than September 23, 2022.

Under the process for selecting new Board candidates, the Chairman, the Chief Executive Officer and the Nominating/Corporate Governance Committee discuss the need to add a new Board member or to fill a vacancy on the Board. The Nominating/Corporate Governance Committee will initiate a search, working with staff support and seeking input from Board members and senior management, hiring a search firm if necessary, and considering candidates recommended by stockholders in accordance with Exhibit B to the Corporate Governance Guidelines.

Charitable Contributions by Company

Within the preceding three years, the Company did not make any charitable contributions to any charitable organization in which a director served as an executive officer which exceeded the greater of $1 million or 2% of the charitable organization’s consolidated gross revenues in a single fiscal year.

 

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Compensation Committee Interlocks and Insider Participation

There are no “Compensation Committee interlocks” or “insider participation” which SEC regulations or NYSE listing standards require to be disclosed in this proxy statement.

Risk Oversight

The Board retains oversight of safety, environmental, social, operational and corporate governance risks, among other areas central to corporate responsibility, including strategic, financial and regulatory risks and opportunities. An important aspect of the Board’s oversight role is the enterprise risk management process, under which enterprise-wide risks have been identified, including climate-related risk, along with mitigative measures to address and manage such risks. Through its enterprise risk management process, the Company has identified specific foundational risks, critical risks and potentially-emerging risks and reviews the assessment of these risks, along with any newly identified risks, on a quarterly basis with the Board. Management also reports quarterly to the Board on significant matters within these risk categories. In addition, management provides a detailed presentation on a topic related to one or more risk categories at each Board meeting. Additional review or reporting on enterprise risks is conducted as needed or as requested by the Board. The Board and management consider enterprise risks and opportunities in their strategic and capital spending decision process, and the Board directs management to integrate corporate responsibility concerns into decision-making throughout the organization.

The Nominating/Corporate Governance Committee specifically has oversight responsibility for corporate responsibility matters that are significant to the Company and its stakeholders. The Company conducts business consistent with our six guiding principles of safety, environmental stewardship, community, innovation, satisfaction, and transparency. To that end, corporate responsibility and ESG matters are a standing agenda item at Nominating/Corporate Governance Committee meetings. In September 2021, the Company published our second annual Corporate Responsibility Report, highlighting the Company’s ESG-related initiatives, programs, and actions.

The Audit Committee discusses guidelines and policies governing management’s process for assessing and managing the Company’s exposure to risk, and on a quarterly basis, at meetings which are attended by the entire Board, reviews the enterprise risk management process described above. The Audit Committee also oversees the scope of work of the Audit Services Department, which includes review of the internal audit function’s annual risk-based audit plan. The Audit Services Department considers significant risk categories identified through the enterprise risk management process when creating its internal audit plan. Additionally, in conjunction with its review of the integrity of the Company’s financial statements, the Audit Committee discusses with management major financial risk exposures and the steps taken to monitor and control those exposures.

Related Person Transactions

The Company had no related person transactions in fiscal 2021. The Company’s Code of Business Conduct and Ethics (the “Code of Conduct”) (which is in writing and available to stockholders as described at the end of this proxy statement) identifies the avoidance of any actual or perceived conflicts between personal interests and Company interests as an essential part of the responsibility of the Company’s directors, officers and employees. The Code of Conduct provides that a conflict of interest may arise when a director, officer or employee receives improper personal benefits as a result of his or her position in the Company, or when personal situations tend to influence or compromise a director’s, officer’s or employee’s ability to render impartial business decisions in the best interest of the Company. Potential conflicts of interest under the Code of Conduct would include but not be limited to related person transactions. The Audit Committee administers the Code of Conduct as it relates to the Company’s directors and executive officers.

The Company’s policies and procedures for the review, approval or ratification of related person transactions are set forth in writing in the charter of the Audit Committee. The charter provides that the Audit Committee will review and, if appropriate, approve or ratify any transaction between the Company

 

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and a related person which is required to be disclosed under SEC rules. In the course of its review of a transaction, the Audit Committee will consider the nature of the related person’s interest in the transaction, the material terms of the transaction, the significance of the transaction to the related person and to the Company, whether the transaction would affect the independence of a director, and any other matters the Audit Committee deems appropriate. The Audit Committee will approve or ratify only those transactions that it considers to be in, or not inconsistent with, the best interests of the Company and its stockholders, as the Audit Committee determines in good faith. Any member of the Audit Committee who is a related person with respect to a transaction under review may not participate in the deliberations or vote respecting approval or ratification of the transaction.

Code of Ethics

The Company has adopted a Code of Business Conduct and Ethics that applies to the Company’s directors, principal executive officer, principal financial officer, controller, other officers and employees that is designed to deter wrongdoing and to promote honest and ethical conduct. The code deals with a variety of corporate matters, including compliance with laws, conflicts of interest, corporate opportunities, use of company resources, fair dealing and confidentiality of company information. The text of the code is available on the Company’s website at www.nationalfuel.com.

DIRECTOR COMPENSATION

The 2009 Non-Employee Director Equity Compensation Plan was approved at the 2009 Annual Meeting of Stockholders and reapproved at the 2016 and 2019 Annual Meetings of Stockholders (“Director Equity Compensation Plan”). This plan provides for the issuance of shares on a quarterly basis to non-employee directors in such amounts as the Board may determine from time to time. In addition, non-employee directors receive a portion of their compensation in cash, as determined by the Board from time to time. Directors who are not Company employees or retired employees do not participate in any of the Company’s employee benefit or compensation plans. Directors who are current employees receive no compensation for serving as directors.

In fiscal 2021, non-employee directors were paid a cash retainer of $110,000, plus shares of Common Stock equal in value to approximately $175,000. Common Stock issued to non-employee directors under the Director Equity Compensation Plan is nontransferable until the later of two years from issuance or six months after the recipient’s cessation of service as a director of the Company, except that transferability restrictions lapse upon the death of the recipient.

The Lead Independent Director (Mr. Shaw) was paid an additional annual retainer of $15,000, and the Chairpersons of the Audit, Compensation and Nominating/Corporate Governance Committees (Mr. Shaw, Mr. Jaggers and Ms. Ranich, respectively) were each paid an additional annual retainer of $15,000. These payments were made in July 2021. Mr. Smith was paid an additional retainer of $20,000 per quarter for his service as Chairman of the Board.

The Company requires that each director, in order to receive compensation for service as a director, must beneficially own at least 2,000 shares of Common Stock at the end of the first year of service as a director, at least 4,000 shares at the end of the second year of service and at least 6,000 shares at the end of the third year of service. All directors are in compliance with this requirement.

In fiscal 2021, non-employee members of the Board were eligible to participate in the Company’s Non-Employee Directors Deferred Compensation Plan. In June of 2021, the Board approved modification of this plan to permit participation by officers as well as directors, for compensation payable beginning in fiscal 2022, and renamed the plan the Deferred Compensation Plan for Directors and Officers (the “DCP”).

In general, the DCP is an unfunded, nonqualified deferred compensation plan open to the directors of the Company and the officers of the Company and its subsidiaries. Under the DCP, and subject to administration by the Compensation Committee of the Board, each eligible officer may defer receipt of

 

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his or her base salary and discretionary cash bonuses, and each eligible director may defer receipt of his or her annual cash retainer and quarterly Company common stock awards. Eligible officers may also defer receipt of their performance-based cash bonuses and Company common stock received in settlement of restricted stock units, performance shares or performance units awards under terms and conditions as described in the DCP. Compensation deferred under the DCP is recorded as deferred compensation in cash or stock accounts, as applicable, and certain transfers among accounts are permitted as described in the DCP. Cash accounts accrue interest and will be settled in cash, and stock accounts accrue dividend equivalents and generally will be settled in Company common stock. Payouts will generally be made in accordance with the participants’ deferral elections. The deferred compensation obligations are unsecured general obligations of the Company and the participants have no right, interest or claim in the assets of the Company, except as unsecured general creditors.

The following table sets forth the compensation paid to each non-employee director for service during fiscal 2021:

DIRECTOR COMPENSATION TABLE — FISCAL 2021

 

Name

   Fees
Earned or
Paid in
Cash
($)(1)
     Stock
Awards
($)(2)
     All Other
Compensation
($)(3)
     Total
($)
 

David H. Anderson

     110,000        175,055        8        285,063  

Barbara M. Baumann

     110,000        175,055        8        285,063  

David C. Carroll

     110,000        175,055        8        285,063  

Steven C. Finch

     110,000        175,055        8        285,063  

Joseph N. Jaggers

     125,000        175,055        8        300,063  

Rebecca Ranich

     125,000        175,055        8        300,063  

Jeffrey W. Shaw

     140,000        175,055        8        315,063  

Thomas E. Skains

     110,000        175,055        8        285,063  

David F. Smith

     190,000        175,055        8        365,063  

Ronald J. Tanski

     110,000        175,055        8        285,063  

 

(1)

Represents the portion of the annual retainer paid in cash, plus additional retainers, as applicable, for service as a committee Chairperson, Lead Independent Director, or Chairman of the Board, including any amounts deferred at the director’s election pursuant to the terms of the DCP.

 

(2)

Represents the aggregate fair value on the date of issuance of the Common Stock issued under the Director Equity Compensation Plan, in accordance with Financial Accounting Standards Board (“FASB”) authoritative guidance for stock compensation, including any amounts deferred at the director’s election pursuant to the terms of the DCP. The average of the high and low stock price on each date of issuance was used to compute the fair value. The average prices (and resultant values of the Stock Awards) were as follows: $40.24 for October 1, 2020 (stock in total valued at $43,781); $41.01 for January 2, 2021 (stock in total valued at $43,758); $49.79 for April 1, 2021 (stock in total valued at $43,765); and $52.775 for July 1, 2021 (stock in total valued at $43,750). As of September 30, 2021, the aggregate shares paid as compensation under director plans for all years of service were as follows: Anderson, 9,036; Baumann, 6,420; Carroll, 26,648; Finch, 11,942; Jaggers, 20,311; Ranich, 17,825; Shaw, 23,095; Skains, 16,736; Smith, 18,517; and Tanski, 8,870.

 

(3)

Represents premiums paid on a blanket travel insurance policy, which covers each director up to a maximum benefit of $500,000. This insurance provides coverage in case of death or injury while on a trip for Company business.

 

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AUDIT FEES

In addition to retaining PricewaterhouseCoopers LLP to report on the annual consolidated financial statements of the Company for fiscal 2021, the Company retained PricewaterhouseCoopers LLP to provide various non-audit services in fiscal 2021. The aggregate fees billed for professional services by PricewaterhouseCoopers LLP for each of the last two fiscal years were as follows:

 

     2021      2020  

Audit Fees(1)

   $ 1,933,000      $ 2,203,600  

Audit-Related Fees(2)

   $ 0      $ 0  

Tax Fees

     

Tax advice and planning(3)

   $ 223,070      $ 218,400  

Tax compliance(4)

   $ 13,585      $ 11,450  

All Other Fees(5)

   $ 3,154      $ 2,284  
  

 

 

    

 

 

 

TOTAL

   $ 2,172,809      $ 2,435,734  
  

 

 

    

 

 

 

 

(1)

Audit Fees include audits of consolidated financial statements and internal control over financial reporting, reviews of financial statements included in quarterly Forms 10-Q, comfort letters and consents, and audits of certain of the Company’s wholly-owned subsidiaries to meet statutory or regulatory requirements.

 

(2)

Audit-Related Fees include audits of certain of the Company’s wholly-owned subsidiaries not required by statute or regulation, and consultations concerning technical financial accounting and reporting standards.

 

(3)

Tax advice and planning includes consultations on various federal and state tax matters.

 

(4)

Tax compliance includes tax return preparation and tax audit assistance.

 

(5)

All Other Fees relate to permissible fees other than those described above and include consulting fees and the software-licensing fee for an accounting and financial reporting research tool.

The Audit Committee’s charter references its pre-approval policies and procedures. The Audit Committee has pre-approved the use of PricewaterhouseCoopers LLP for specific types of services, including various audit and audit-related services and certain tax services, among others. The chair of the Audit Committee and, in his absence, another specified member of the committee are authorized to pre-approve any audit or non-audit service on behalf of the committee. Each pre-approval is to be reported to the full committee at the first regularly scheduled committee meeting following such pre-approval.

For fiscal 2021, none of the services provided by PricewaterhouseCoopers LLP were approved by the Audit Committee in reliance upon the “de minimis exception” contained in Section 202 of Sarbanes-Oxley and codified in Section 10A(i)(1)(B) of the Exchange Act and in 17 CFR 210.2-01(c)(7)(i)(C).

 

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AUDIT COMMITTEE REPORT

The Audit Committee is composed solely of six directors who meet the independence and financial literacy requirements of the New York Stock Exchange and the Securities and Exchange Commission (SEC). The Audit Committee Chairman, Jeffrey W. Shaw, and members David H. Anderson and Barbara M. Baumann, each qualify as an “audit committee financial expert” as defined by the SEC. The responsibilities of the Audit Committee are set forth in the Audit Committee Charter, last amended June 15, 2017, a copy of which is available on the Company’s website at https://investor.nationalfuelgas.com/governance/governance-guidelines-and-committee-charters/default.aspx.

The Audit Committee reviews the integrity of the Company’s financial statements and discusses with management major financial risk exposures and the steps taken to monitor and control those exposures. The Audit Committee also oversees the scope of work of the Audit Services Department. That scope includes reviewing the accuracy, reliability and integrity of financial and operational information and the means used to identify, measure, classify and report such information. To that end, management reports quarterly to the Board of Directors on significant risk categories identified through the enterprise risk management process, which the Audit Services Department considers when creating its internal audit plan. The Audit Committee also directly appoints, retains, compensates, evaluates, terminates and oversees the work of the independent auditor for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company, and such firm must report directly to the Audit Committee. In addition to those responsibilities, with respect to the independent auditor, the Audit Committee:

 

   

reviews and evaluates the annual engagement letter, including the independent auditor’s proposed fees;

 

   

reviews, evaluates and monitors the annual audit plan and its progression, including the timing and scope of audit activities;

 

   

annually reviews and evaluates the qualifications, performance and independence of the independent auditor, including the lead partner, and ensures that the lead partner and any other audit partners are rotated at appropriate intervals in compliance with applicable laws, rules and regulations;

 

   

reviews and evaluates the independent auditor report describing internal quality-control procedures and any material issues raised by the most recent internal quality-control review of the independent auditors or outside inquiry or investigation; and

 

   

reviews the independent auditor report describing all relationships between the independent auditor and the Company, including a list of the fees billed for each category, in order to assess the independent auditor’s independence.

Management is responsible for the Company’s consolidated financial statements and for establishing, maintaining, and assessing internal control over financial reporting. PricewaterhouseCoopers LLP, the Company’s independent auditor, is responsible for expressing opinions on the conformity of the Company’s audited financial statements with generally accepted accounting principles and on the Company’s internal control over financial reporting.

As part of its auditor engagement process, the Audit Committee considers whether to rotate the independent auditor. PricewaterhouseCoopers LLP has been the Company’s independent auditor since 1941. PricewaterhouseCoopers LLP rotates its lead audit engagement partner every five years; the Audit Committee interviews proposed candidates and selects the lead audit engagement partner. The Audit Committee believes that there are significant benefits to having an independent auditor with an extensive history with the Company. These include:

 

   

Higher quality audit work and accounting advice, due to the independent auditor’s institutional knowledge of our business and operations, accounting policies and financial systems, and internal control framework; and

 

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Operational efficiencies because of the independent auditor’s history and familiarity with our business.

In fulfilling its responsibilities, the Audit Committee has reviewed and discussed the Company’s audited financial statements for fiscal 2021 with management. The Audit Committee has also reviewed with management its evaluation of the structure and effectiveness of the Company’s internal control over financial reporting. The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. The Audit Committee has received the written disclosures and the letter from PricewaterhouseCoopers LLP required by the applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’s communications with the audit committee concerning independence, and has discussed with PricewaterhouseCoopers LLP that firm’s independence. The Audit Committee also has considered whether PricewaterhouseCoopers LLP’s level of fees and provision of non-audit services to the Company and its affiliates are compatible with PricewaterhouseCoopers LLP’s independence and has concluded that PricewaterhouseCoopers LLP is independent from the Company and its management.

Based on the review, discussions and considerations referred to in the preceding paragraph, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for fiscal 2021 for filing with the SEC.

AUDIT COMMITTEE

JEFFREY W. SHAW, Chairman

DAVID H. ANDERSON

BARBARA M. BAUMANN

STEVEN C. FINCH

JOSEPH N. JAGGERS

REBECCA RANICH

 

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SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth for each current director, each nominee for director, each of the executive officers named in the Fiscal 2021 Summary Compensation Table, and for all directors, nominees and executive officers as a group, information concerning beneficial ownership of Common Stock. The Common Stock is the only class of Company equity securities outstanding. Unless otherwise noted, to the best of the Company’s knowledge, each person has sole voting and investment power with respect to the shares listed. Security holdings are as of December 31, 2021. As of that date, 91,436,837 shares of Common Stock were issued and outstanding.

 

Name of Beneficial

Owner

  Exercisable
SARs(1)
    Shares Held
in ESOP(2)
    Shares Held in
401(k)
Plan(3)
    Shares Otherwise
Beneficially Owned(4)
    Percent of
Class(5)
 

David H. Anderson

    0       0       0       10,137 (6)      *  

David P. Bauer

    1,805       0       12,331       70,278       *  

Barbara M. Baumann

    0       0       0       9,441       *  

Karen M. Camiolo

    928       0       15,907       45,671       *  

David C. Carroll

    0       0       0       31,598 (7)      *  

Donna L. DeCarolis

    0       266       21,778       66,290       *  

Steven C. Finch

    0       0       0       12,876 (7)      *  

Joseph N. Jaggers

    0       0       0       21,632       *  

Ronald C. Kraemer

    812       4,021       16,721       46,795       *  

Justin I. Loweth

    0       0       8,744       28,125       *  

John P. McGinnis

    0       0       11,797       112,407 (8)      *  

John R. Pustulka

    3,757       4,064       24,247       113,288       *  

Rebecca Ranich

    0       0       0       20,477 (7)      *  

Jeffrey W. Shaw

    0       0       0       24,016 (9)      *  

Thomas E. Skains

    0       0       0       17,745 (7)      *  

David F. Smith

    0       2,053       21,012       305,671 (10)      *  

Ronald J. Tanski

    7,296       2,992       28,549       565,916 (11)      *  

Directors, Nominees and Executive Officers as a Group (21 Total)

    15,056       14,894       174,080       1,548,657       1.92

 

 *

Represents beneficial ownership of less than 1% of issued and outstanding Common Stock.

 

(1)

A stock appreciation right (“SAR”) granted under an equity compensation plan of the Company in respect of one or more shares of Common Stock generally entitles the holder thereof the right to receive, in cash or Common Stock as determined by the Compensation Committee in its discretion, an amount per share of Common Stock equal to the excess, if any, of (i) the fair market value of a share of Common Stock on the date the SAR is exercised, over (ii) the grant price of the SAR. The shares included in this column represent the number of shares the officer would have received by exercising SARs on December 31, 2021, when the fair market value (the average of high and low stock price) was $63.90. Until exercised, SARs have no voting power.

 

(2)

This column lists shares held in the National Fuel Gas Company Employee Stock Ownership Plan (“ESOP”). The beneficial owners of these shares have sole voting power with respect to shares held in the ESOP, but do not have investment power respecting most of those shares until they are distributed.

 

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(3)

This column lists shares held in the Company Tax-Deferred Savings Plan for Non-Union Employees (“TDSP”), a 401(k) plan. The beneficial owners of these shares have sole voting and investment power with respect to shares held in the TDSP.

 

(4)

This column includes shares held of record and any shares beneficially owned through a bank, broker or other nominee.

 

(5)

This column lists the sum of the individual’s (or individuals’) holdings shown on this table, expressed as a percentage of the Company’s outstanding shares.

 

(6)

Includes 192 shares held through a family trust, as to which Mr. Anderson shares voting and investment power, and 4,772 shares deferred under the DCP, as to which Mr. Anderson does not have voting or investment power.

 

(7)

Includes 4,772 shares deferred under the DCP, as to which the director does not have voting or investment power.

 

(8)

Includes 90,340 shares held through a limited liability company of which Mr. McGinnis and his wife are the sole members, and as to which Mr. McGinnis shares voting and investment power; and 3,611 shares held by Mr. McGinnis and his wife as trustees for family members, as to which Mr. McGinnis shares voting and investment power.

 

(9)

Includes 100 shares held through a family trust, as to which Mr. Shaw shares voting and investment power.

 

(10)

Includes 81,828 shares held through a family partnership, as to which Mr. Smith shares voting and investment power, 50,357 shares owned by Mr. Smith’s wife, as to which Mr. Smith shares voting and investment power, and 4,772 shares deferred under the DCP, as to which Mr. Smith does not have voting or investment power.

 

(11)

Includes 429 shares owned jointly with Mr. Tanski’s wife, as to which Mr. Tanski shares voting and investment power.

As of December 31, 2021, each of the following persons is known to the Company to be the beneficial owner of more than five percent of the Common Stock, as set forth in a Schedule 13G or Schedule 13D filed with the SEC. The Common Stock is the only class of Company stock outstanding.

 

Name and Address of Beneficial Owner

   Shares Held as
Trustee for Company
Employee Benefit
Plans
    Shares
Otherwise
Beneficially Held
    Percent
of
Class(1)
 

The Vanguard Group

100 Vanguard Boulevard

Malvern, PA 19355

     2,276,038 (2)      9,280,754 (3)      12.64

BlackRock, Inc.

55 East 52nd Street

New York, NY 10055

     N/A       8,015,455 (4)      8.77

State Street Corporation

One Lincoln Street

Boston, MA 02111

     N/A       6,890,119 (5)      7.54

JPMorgan Chase & Co.

383 Madison Avenue

New York, NY 10179

     N/A       5,091,756 (6)      5.57

Mario J. Gabelli

Gabelli & Company, Inc.

One Corporate Center

Rye, NY 10580

     N/A       4,634,658 (7)      5.07

 

(1)

This column lists the sum of the shares shown on this table, expressed as a percentage of the Company’s outstanding shares at December 31, 2021.

 

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(2)

This amount represents the shares held by Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, in its capacity as trustee for certain employee benefit plans. Vanguard Fiduciary Trust Company held 2,276,038 shares on behalf of the plans as of December 31, 2021, all of which have been allocated to plan participants. The plan trustee votes the shares allocated to participant accounts as directed by those participants. Shares held by the trustee on behalf of the plans as to which participants have made no timely voting directions are voted by the trustee in the same proportion as the shares of Common Stock for which the trustee received timely directions, except in the case where to do so would be inconsistent with provisions of Title I of ERISA. Vanguard Fiduciary Trust Company disclaims beneficial ownership of all shares held in trust by the trustee that have been allocated to the individual accounts of participants in the plans for which directions have been received, pursuant to Rule 13d-4 under the Exchange Act.

 

(3)

The number of shares is derived from Amendment No. 9 to Schedule 13G filed on December 9, 2021 by The Vanguard Group. The filing states that The Vanguard Group has sole voting power with respect to zero shares of Common Stock, shared voting power with respect to 42,924 shares of Common Stock, sole dispositive power with respect to 9,165,025 shares of Common Stock, and shared dispositive power with respect to 115,729 shares of Common Stock.

 

(4)

The number of shares is derived from Amendment No. 9 to Schedule 13G filed on January 29, 2021 by BlackRock, Inc. The filing states that BlackRock, Inc. has sole voting power with respect to 7,731,023 shares of Common Stock, shared voting power with respect to zero shares of Common Stock, sole dispositive power with respect to 8,015,455 shares of Common Stock, and shared dispositive power with respect to zero shares of Common Stock.

 

(5)

The number of shares is derived from Schedule 13G filed on February 11, 2021 by State Street Corporation. The filing states that State Street Corporation has sole voting power with respect to zero shares of Common Stock, shared voting power with respect to 6,781,276 shares of Common Stock, sole dispositive power with respect to zero shares of Common Stock, and shared dispositive power with respect to 6,890,119 shares of Common Stock. The filing also identifies SSGA Funds Management, Inc. (“SSGA”) as a subsidiary of State Street Corporation and beneficial owner of more than 5% of the Common Stock. SSGA’s shares are included among the 6,890,119 shares beneficially owned by State Street Corporation as reflected in the table. The filing states that SSGA has sole voting power with respect to zero shares of Common Stock, shared voting power with respect to 4,653,661 shares of Common Stock, sole dispositive power with respect to zero shares of Common Stock, and shared dispositive power with respect to 4,686,538 shares of Common Stock.

 

(6)

The number of shares is derived from Amendment No. 1 to Schedule 13G filed on January 14, 2022 by JPMorgan Chase & Co. The filing states that JPMorgan Chase & Co. has sole voting power with respect to 4,978,207 shares of Common Stock, shared voting power with respect to zero shares of Common Stock, sole dispositive power with respect to 5,090,004 shares of Common Stock, and shared dispositive power with respect to 1,752 shares of Common Stock.

 

(7)

The number of shares is derived from Amendment No. 18 to Schedule 13D filed on July 20, 2020 by Gabelli Funds, LLC, GAMCO Asset Management Inc., Gabelli & Company Investment Advisers, Inc., MJG Associates, Inc., Gabelli Foundation, Inc., GGCP, Inc., GAMCO Investors, Inc., Associated Capital Group, Inc., and Mario J. Gabelli.

 

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EQUITY COMPENSATION PLAN INFORMATION

As of September 30, 2021

 

Plan category

   Number of securities to be
issued upon exercise of
outstanding options,
warrants and  rights
(a)
    Weighted-average exercise
price of outstanding
options, warrants  and
rights
(b)
    Number of securities
remaining available for
future issuance under
equity compensation  plans
(excluding securities
reflected in column (a))
(c)
 

Equity compensation plans approved by security holders

     1,284,560 (1)    $ 53.60 (2)      3,039,880 (3) 

Equity compensation plans not approved by security holders

     0       0       0  
  

 

 

   

 

 

   

 

 

 

Total

     1,284,560     $ 53.60       3,039,880  
  

 

 

   

 

 

   

 

 

 

 

(1)

The securities listed in column (a) include 600,634 shares of Common Stock which would be issued under performance-based awards outstanding at September 30, 2021 if the target level of performance is achieved under those awards. If actual performance rises above the target level of performance for these awards, additional shares would generally be issued. For example, if maximum performance were achieved, 1,201,268 shares of Common Stock would be issued under performance-based awards outstanding at September 30, 2021. In that event, the number of shares to be issued noted in column (a) would be 1,885,194.

 

(2)

The weighted-average exercise price in column (b) takes into account outstanding stock appreciation rights. It does not take into account outstanding restricted stock units (RSUs) or performance shares.

 

(3)

Of the securities listed in column (c), 194,015 were available at September 30, 2021 for future issuance pursuant to the Director Equity Compensation Plan and 2,845,865 were available for future issuance under the 2010 Equity Compensation Plan. All securities included in column (c) are available for issuance for awards other than options, warrants or rights.

 

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EXECUTIVE COMPENSATION

Compensation Committee Report

The Compensation Committee of the Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021.

COMPENSATION COMMITTEE

J. N. JAGGERS, Chairman

D. H. ANDERSON

T. E. SKAINS

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) provides a detailed review of the Company’s compensation of named executive officers, including the goals of the compensation program, the process for determining compensation levels, and analysis of the specific components of compensation, among other things. The Board of Directors believes that the Company’s compensation policies and practices, as developed following engagement with stockholders, including with respect to ESG factors, encourage a culture of pay for performance and are strongly aligned with the long-term interests of the Company’s stockholders.

The Company’s named executive officers for fiscal 2021 are David P. Bauer, President and Chief Executive Officer; Karen M. Camiolo, Treasurer and Principal Financial Officer; Ronald C. Kraemer, Chief Operating Officer; Donna L. DeCarolis, President of the Company’s Utility segment; Justin I. Loweth, President of the Company’s E&P segment; John R. Pustulka, former Chief Operating Officer (retired March 1, 2021); and John P. McGinnis, former President of the Company’s E&P segment (retired May 1, 2021).

NO MODIFICATIONS TO FISCAL 2021 COMPENSATION

The Compensation Committee did not make any mid-year or end-of-year adjustments to performance metrics or goals applicable to named executive officers for fiscal 2021, despite the continuing COVID-19 pandemic.

STOCKHOLDER ENGAGEMENT AND ALIGNMENT

2021 Say-on-Pay Vote and Stockholder Engagement

The 2021 Say-on-Pay advisory vote yielded a result of over 96% of votes cast in support of the compensation of the Company’s named executive officers. The Board (including the Compensation Committee) generally considered this outcome an indicator of stockholder support for the overall philosophy and structure of the Company’s executive compensation policies and decisions. Given the high approval percentage of the vote, the Compensation Committee did not make any significant changes to the executive compensation program that were based specifically on the results of the 2021 Say-on-Pay advisory vote.

From time to time members of Company management have held meetings with some of the Company’s largest stockholders to obtain feedback on matters of interest to them. The Board has directed management to continue to engage as appropriate with interested stockholders, and to inform it of any requests for meetings with members of the Board. The Board and management believe that engagement with stockholders facilitates important dialogue from which we gather various viewpoints.

 

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Executive Compensation Aligned with Stockholders’ Interests

The Compensation Committee has developed the Company’s compensation policies and procedures to align the interests of executives with those of the Company’s stockholders. The Company recognizes and rewards executives through compensation arrangements that directly link executive pay to the Company’s performance, and we ensure a strong alignment of interests with our stockholders by including a significant percentage of equity in the overall mix of pay. As shown in the chart below, which includes the fiscal 2021 target compensation mix for the CEO and an average for the other six named executive officers, 83% of the target compensation of David Bauer, the Company’s CEO, was at-risk compensation, with 63% tied to equity (in the form of performance shares and restricted stock units), and 20% tied to cash-based short-term performance goals.

 

 

LOGO

Key features of the Company’s executive compensation program include the following:

 

  Ø

Annual performance incentives of the named executive officers are based on objective performance goals, except with respect to a portion of Mr. Loweth’s fiscal 2021 annual cash incentive award;

 

  Ø

Long-term performance incentives are composed entirely of equity;

 

  Ø

Long-term performance goals for fiscal 2021 consist of three-year TSR and three-year total ROC, each relative to a peer group;

 

  Ø

Named executive officers and other officers are required to meet stock ownership guidelines that range from one to six times base salary (six times for the CEO and three times for other named executive officers);

 

  Ø

Executive officers may not hedge or pledge Company stock;

 

  Ø

Equity incentive plans prohibit the repricing of equity awards;

 

  Ø

The Compensation Committee engages two independent compensation consultants to assist in setting compensation;

 

  Ø

All change-in-control agreements are double triggered;

 

  Ø

The Company does not provide tax “gross-ups” on any compensation or with respect to any change-in-control payments; and

 

  Ø

The Board has adopted a clawback policy (see “Recovery of Funds” in the Company’s Corporate Governance Guidelines, included as Appendix B to this proxy statement).

 

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TSR PERFORMANCE AND CEO PAY RELATIVE TO PEERS

Relative Total Shareholder Return

For the one-year period ended September 30, 2021, the Company’s TSR was at the 46th percentile of the Korn Ferry peer group selected by the Compensation Committee in September 2020 (and listed in the table below). Under the calculation method used for this relative TSR analysis, starting stock prices are calculated as the average closing stock prices for the month of September 2020, ending stock prices are calculated as the average closing stock prices for the month of September 2021, and dividends are deemed reinvested at each ex-dividend date. The use of average closing stock prices mirrors the calculation method specified for the Company’s TSR performance shares. For the three-year period ended September 30, 2021, using the same calculation method, the Company’s TSR was at approximately the 77th percentile of the Korn Ferry peer group selected by the Compensation Committee in September 2018 (which peer group is listed below under the heading “Long-Term Incentive Compensation” and subheading “Performance on Past Awards”).

CEO Compensation Versus Peers

Reflected in the table below is Korn Ferry’s comparison of fiscal 2020 total direct compensation for Mr. Bauer against that of CEOs in the Korn Ferry peer group selected by our Compensation Committee in September 2020. Fiscal 2020 is the most recent fiscal year for which proxy statement data is available for our peers. Mr. Bauer’s target total direct compensation, as shown in the table, was at the 6th percentile of our Korn Ferry peers. Actual total direct compensation, which reflects the results of performance against annual incentive goals, was at the 8th percentile of the same peers.

 

        

 

CEO & President

 
  Compared to CEO proxy data for fiscal year 2020  

 

                         Total Direct
Compensation
Company   Title   FYE
Revenue
(millions)
  Market Cap
as of 9/30/20
(millions)
  FYE # of
Employees
  Actual   Target  
   

ATMOS ENERGY CORP

  President, CEO & Director   $2,821   $11,792   4,694   $4,057,422   $4,066,076  
   

CABOT OIL & GAS CORP

  Chairman, CEO & President   $1,467   $6,919   503   $13,839,992   $13,895,003  
   

CNX RESOURCES CORP

  President, CEO & Director   $1,086   $2,120   451   $7,604,006   $6,260,006  
   

EQT CORP

  President & CEO   $2,612   $3,305   624   $5,519,178   $5,119,178  
   

EQUITRANS MIDSTREAM CORP

  CEO & Chairman   $1,511   $3,659   771   $4,458,935   $3,986,435  
   

MDU RESOURCES GROUP INC

  President, CEO & Director   $5,533   $4,512   15,600   $5,752,497   $5,134,497  
   

NEW JERSEY RESOURCES CORP

  President, CEO & Director   $1,954   $2,592   1,156   $3,231,450   $3,099,976  
   

RANGE RESOURCES CORP

  CEO, President & Director   $1,781   $1,552   533   $6,548,572   $6,036,264  
   

SM ENERGY CO

  President, CEO & Director   $1,080   $182   503   $4,122,080   $4,599,998  
   

SOUTHWESTERN ENERGY CO

  President, CEO & Director   $2,308   $1,680   900   $7,909,135   $7,634,135  
   

SOUTHWEST GAS CORP

  President, CEO & Director   $3,299   $3,528   11,149   $4,814,163   $4,570,606  
   

SPIRE INC

  CEO, President & Director   $1,855   $2,739   3,583   $3,937,659   $4,113,409  
   

UGI CORP

  President, CEO & Director   $6,559   $6,870   11,300   $6,306,586   $6,759,353  
             

Summary Statistics

                       
   

75th Percentile

    $2,821   $4,512   4,694   $6,548,572   $6,260,006  
   

Average

    $2,605   $3,958   3,982   $6,007,821   $5,790,380  
   

Median

    $1,954   $3,305   900   $5,519,178   $5,119,178  
   

25th Percentile

    $1,511   $2,120   533   $4,122,080   $4,113,409  
             

NATIONAL FUEL GAS CO

  CEO & President   $1,546   $3,692   2,162   $3,877,042   $3,695,917  
   

Percentile Rank

      26%   67%   62%   8%   6%  

 

  LOGO

 

NOTES:

 

-  Total Direct Compensation = base salary + bonus + long-term incentives

 

-  Cabot Oil & Gas merged with Cimarex Energy to form Coterra Energy in October 2021.

 

-  EQT Corp. CEO (Toby Rice) received $1 in base salary compensation for FY2020.

   

 

 

© 2021 Korn Ferry. All rights reserved

  1

 

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OBJECTIVES OF THE NAMED EXECUTIVE OFFICER COMPENSATION PROGRAM

The Company’s named executive officer compensation program is designed to attract, motivate, reward and retain executive talent in order to achieve the objectives that contribute to the overall success of the Company. When setting compensation for the Company’s named executive officers, the Compensation Committee’s primary goal is to provide balanced incentives for creating stockholder value in both the near-term and long-term. The Compensation Committee awards a combination of cash and equity components that are designed to focus management efforts on drivers of stockholder value, including financial, safety, environmental, diversity, and customer service metrics. The Compensation Committee establishes the compensation program based on its business judgment after consultation with its compensation consultants. Total compensation for named executive officers includes the following key components, each of which is addressed in greater detail below:

 

Compensation Component

 

Objectives

 

Key Features in 2021

Base Salary

 

•   Provide a fixed level of pay in recognition of day-to-day job performance.

 

•   Attract, retain and motivate leadership with compensation reflecting specific responsibilities, experience and effectiveness.

 

•   Generally references the 50th percentile of energy industry median provided by independent compensation consultants; may pay greater base salary to attract, retain and motivate executives.

 

•   Adjustments are made based on Compensation Committee members’ business judgment.

 

•   Overall corporate performance and individual performance are factors for subjective consideration.

Annual Cash Incentive Compensation  

•   Motivate performance toward, and reward achievement of, near-term financial, operating, ESG and individual goals.

 

•   Target awards are set as a percentage of base salary.

Long-Term Equity Incentive Compensation  

•   Focus attention on managing the Company from a long-term investor’s perspective to create long-term stockholder value.

 

•   Encourage executives and other managers to have a significant, personal investment in the Company through stock ownership.

 

•   Reward executives for longer-term performance of the Company relative to an industry peer group.

 

•   Long-term incentive compensation denominated in equity.

 

•   Generally, long-term incentive compensation allocated two-thirds to performance shares and one-third to time-based RSUs as an additional retention tool. For certain long-tenured named executive officers (Messrs. Kraemer and Pustulka), entire long-term incentive award granted as performance shares, to enhance emphasis on achievement of performance targets.

 

•   Performance shares split between two distinct performance conditions — three-year TSR and three-year ROC.

 

•   Performance conditions are objective and measured relative to a recognized peer group.

 

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Compensation Component

 

Objectives

 

Key Features in 2021

Executive Health, Welfare, and Retirement Benefits  

•   Provide executives with reasonable and competitive benefits commensurate with those in the regulated and unregulated energy industry.

 

•   Help the Company attract and retain high-caliber employees in high-level management positions.

 

•   Restore retirement benefits lost under qualified retirement plans as a result of Internal Revenue Code limits.

 

•   Retirement benefits consisting of:

 

¡   qualified defined contribution plan (401(k));

 

¡    qualified non-contributory defined contribution plan (retirement savings account or “RSA”) or qualified defined benefit plan (depending on year of hire); and

 

¡   non-qualified executive retirement plan and/or non-qualified tophat plan, depending on year of hire.

Change in Control Agreements  

•   Help assure that executives direct their attention to their duties, acting in the best interests of stockholders, notwithstanding potential for loss of employment in connection with a change in control.

 

•   Double-trigger provision to avoid providing benefits to officers who continue to enjoy employment with the Company after a Change in Control event.

 

•   No tax gross-up on payment.

 

•   Lump sum severance payment is reduced on a pro-rata basis if termination occurs between age 62 and 65.

PROCESS FOR DETERMINING COMPENSATION

Risk Assessment

The Board conducted a risk assessment of the Company’s compensation programs during fiscal 2021. Based on the assessment, the Board concluded that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

Role of the Compensation Committee

The Compensation Committee comprises three directors, all of whom have been determined by the Board to be independent. The Compensation Committee administers the Company’s compensation program for named executive officers, setting base salaries and available incentive compensation ranges. The Compensation Committee exercises the authority delegated to it by the stockholders or the Board under the Company’s cash and equity incentive compensation plans, which include:

Cash Compensation Plans/Short-Term Incentive

 

   

AARCIP, generally for named executive officers

 

   

EACIP, generally for other executive officers

Equity Compensation Plans/Long-Term Incentive

 

   

2010 Equity Compensation Plan

 

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In addition, the Compensation Committee makes recommendations to the Board with respect to the development of incentive compensation plans and equity-based plans and changes in compensation for non-employee directors.

As described below, the Compensation Committee retained the services of independent compensation consultants to assist it in administering the Company’s compensation program. Further, as described earlier in this proxy statement, the members of the Compensation Committee have significant experience in the energy industry and as leaders of major corporations. In these roles, as well as through their experiences with the Company, the Compensation Committee has garnered extensive knowledge regarding the establishment of a competitive and properly focused compensation program for the Company’s named executive officers. In making the decisions discussed below, the Compensation Committee uses its subjective business judgment developed through its years of experience.

Role of the Chief Executive Officer

In making its subjective determinations with respect to named executive officers other than the Chief Executive Officer, the Compensation Committee discusses the information it receives from its independent compensation consultants with the CEO and seeks his recommendation as to the appropriate base salaries and target short-term and long-term incentive awards for each of these officers, based on his assessment of the officers’ performance, contributions and abilities, and taking into account the compensation consultants’ recommendations. The CEO also provides input to the Compensation Committee’s compensation consultants with regard to the responsibilities of the Company’s named executive officers, to facilitate the consultants’ recommendations and comparisons of such officers and their positions to other positions in the marketplace. The CEO made no recommendations with regard to his own compensation.

Independent Compensation Consultants

The Compensation Committee retains independent compensation consultants to inform its business judgment as to compensation matters, including the selection of peer companies for compensation comparison purposes. The Compensation Committee retained the services of Korn Ferry to provide a competitive assessment of compensation at the Company’s businesses other than its exploration and production business, and Meridian to assess compensation at its exploration and production business.

Determining Our Peers

The Compensation Committee understands the importance of using comparative data that reflects information from companies with business segments comparable to those of the Company. Because of the Company’s diverse asset mix, selecting an appropriate peer group of companies requires a customized approach that calls for more critical thought than simple selection of a standard industry group, which may include utility companies without a presence in the broader natural gas industry. The Company’s assets span the entire natural gas value chain and include exploration and production (“E&P”), interstate natural gas transmission and storage, natural gas gathering, and natural gas utility operations. For compensation and performance comparisons, the Compensation Committee utilizes two separate peer groups. The Korn Ferry peer group is the primary peer group against which the Compensation Committee generally compares named executive officer compensation and is intended to include a group of companies that, as a whole, represent our asset mix. Meridian assists in the formulation of a peer group that is targeted to evaluate our E&P business and the compensation of executives who oversee it. Both peer groups may change over time due to corporate transactions or as the Compensation Committee believes is warranted based on its business judgment. The Compensation Committee believes that the peer groups selected with the guidance of Korn Ferry and Meridian include a mix of companies that reflect businesses in which the Company participates, or with which it competes, as reflected in the tables below.

 

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For the purpose of establishing 2021 compensation, the Compensation Committee reviewed the Korn Ferry peer group listed below. In addition, the Compensation Committee utilized the Korn Ferry peer group for purposes of setting relative performance conditions on long-term incentive awards of performance shares.

Korn Ferry

Korn Ferry assists the Compensation Committee in evaluating and setting compensation for Company officers and officers employed by affiliate companies other than Seneca, the Company’s E&P business. Generally, Korn Ferry provides job matching advice to a wide range of companies through detailed position analyses based on proprietary information from multiple participant companies. Korn Ferry’s job evaluation methodology allows for customizable job descriptions and organizational rankings that are specific to the Company but relative to industry benchmarks.

For Company officers and officers employed by affiliate companies other than Seneca, Korn Ferry provided an analysis of compensation practices with respect to the following forms of compensation compared to similar positions in the general industry and, where appropriate, in the energy industry based on Korn Ferry’s proprietary databases:

 

  1)

Base Salary;

 

  2)

Total Cash Compensation (base salary plus short-term cash incentive); and

 

  3)

Total Direct Compensation (base salary plus short-term cash incentive plus long-term equity incentive).

Korn Ferry also made recommendations on incentive compensation target amounts to the Compensation Committee for:

 

  1)

Short-Term Cash Incentive; and

 

  2)

Long-Term Equity Incentive.

 

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Additionally, Korn Ferry provided a proxy analysis of base salary, incentive targets, total cash compensation, long-term incentive and total direct compensation for the offices of President and CEO of the Company, Chief Operating Officer of the Company, Treasurer and Principal Financial Officer of the Company, President of National Fuel Gas Supply Corporation and President of National Fuel Gas Distribution Corporation, based on proxy data for the Company and the 13 energy companies in the peer group listed below. The Compensation Committee selected these 13 companies for purposes of establishing compensation for 2021 because each participated in one or more businesses that are similar to those of the Company:

 

          Korn Ferry — Peer Companies for Fiscal 2021   

    Exploration    

    &    

    Production    

  

    Pipeline    

    &    

    Storage    

    and/or    

    Gathering    

 

    Natural    

    Gas Utility    

1

 

Atmos Energy Corporation

        X   X

2

 

Cabot Oil & Gas Corporation*

   X         

3

 

CNX Resources Corporation

   X    X    

4

 

EQT Corporation

   X    X    

5

 

Equitrans Midstream Corporation

        X    

6

 

MDU Resources Group, Inc.

        X   X

7

 

New Jersey Resources Corporation

        X   X

8

 

Range Resources Corporation

   X         

9

 

SM Energy Company

   X         

10

 

Southwest Gas Holdings, Inc.

        X**   X

11

 

Southwestern Energy Company

   X         

12

 

Spire Inc.

            X

13  

 

UGI Corporation

        X   X
   

TOTAL

   6    8   6

 

*

Cabot Oil & Gas Corporation merged with Cimarex Energy Co. to form Coterra Energy Inc. in October 2021.

 

**

Reflects the acquisition by Southwest Gas Holdings, Inc. of Dominion Energy Questar Pipeline, LLC in December 2021.

The Compensation Committee reviews the members of the peer group each year and makes such adjustments as it believes are warranted. The Compensation Committee revised the peer group used for purposes of establishing compensation for 2021. In particular, the Compensation Committee removed Whiting Petroleum Corporation, which had commenced bankruptcy proceedings, and added Equitrans Midstream Corporation, a natural gas gathering company.

Meridian Compensation Partners, LLC

Meridian assists the Compensation Committee in evaluating and setting compensation for employees at Seneca. Meridian also assessed the compensation of Mr. Bauer, Mr. Pustulka and Ms. Camiolo against the E&P peer group. The Compensation Committee requested these analyses for its use in supplementing the Korn Ferry-provided comparisons due to the importance of the Company’s E&P segment and the contributions of Mr. Bauer, Mr. Pustulka and Ms. Camiolo in the management of that segment. The Compensation Committee selected Meridian due to its expertise in E&P industry compensation matters.

Meridian provided an analysis for officers of Seneca and select officers of the Company of compensation practices with respect to the following forms of compensation compared to similar positions in the E&P industry:

 

  1.

Base Salary;

 

  2.

Target Short-Term Incentive;

 

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  3.

Target Cash Compensation (base salary plus short-term incentive);

 

  4.

Long-Term Incentive; and

 

  5.

Total Target Compensation (base salary plus short-term and long-term incentive).

The Meridian analysis was based on data from Meridian’s proprietary North America Oil & Gas Exploration & Production compensation database, supplemented by publicly available sources. Meridian compiled data with respect to 15 E&P companies chosen by the Compensation Committee based on certain criteria, such as revenues, assets, and nature of operations, that made them relatively comparable to Seneca, in terms of operations, and similar in size to Seneca or the Company. The companies in the 15-member peer group ranged in size from approximately $0.9 billion to $8.0 billion in assets (with a median of $4.5 billion). By comparison, at the time the peer group was selected, Seneca’s assets and the Company’s consolidated assets totaled approximately $2.0 and $7.0 billion, respectively. The peer group is:

 

      Meridian Compensation Partners — Peer E&P Companies for Fiscal 2021

1

   Bonanza Creek Energy, Inc.    9    Montage Resources Corporation

2

   Callon Petroleum Company    10    Oasis Petroleum Inc.

3

   Cimarex Energy Co.    11    Parsley Energy, Inc.

4

   Comstock Resources Inc.    12    PDC Energy, Inc.

5

   Gulfport Energy Corporation    13    Range Resources Corporation

6

   HighPoint Resources Corporation    14    SM Energy Company

7

   Laredo Petroleum, Inc.    15    Southwestern Energy Company

8

   Matador Resources Company          

The Compensation Committee reviews the members of this E&P peer group from time to time and makes adjustments as it believes are warranted. For purposes of establishing compensation for 2021, the Compensation Committee reviewed the peer group and removed Jagged Peak Energy Inc., which was acquired, and Roan Resources Inc., which was taken private. The Compensation Committee added Laredo Petroleum, Inc., based on the criteria noted above.

FISCAL 2021 TOTAL COMPENSATION

Base Salary

Base salaries provide a predictable base compensation for day-to-day job performance. The Compensation Committee reviews named executive officer base salaries at calendar year-end and adjusts them, if it deems appropriate in its subjective business judgment, following review of its compensation consultants’ competitive analyses and, with respect to named executive officers other than the CEO, upon consideration of the recommendations of the CEO. In addition, base salary may be adjusted during the calendar year when changes in responsibility occur or when circumstances otherwise warrant. Base salary is not adjusted based on specific objective financial results, although overall corporate performance is reviewed by the Compensation Committee in its decision making process. The Compensation Committee does not use formulas; rather, it exercises its business judgment.

In establishing base salaries for named executive officers other than those employed by Seneca, the Compensation Committee generally references the 50th percentile of the Korn Ferry Energy Industry survey data. For the President of Seneca, the Compensation Committee generally references Meridian survey data for the chief operating officer at independent exploration and production company peers. Because that position is not a direct match, however, the Compensation Committee also references, as a supplement, the position of chief executive officer at those peers. In its subjective business judgment, the Compensation Committee may pay a greater salary if it is necessary to attract, retain and motivate the individuals responsible for the success of the business enterprise. The Compensation Committee

 

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considers overall corporate performance and an individual’s specific responsibilities, experience (including time in position) and effectiveness and makes adjustments based on business judgment and, for named executive officers other than the CEO, the CEO’s recommendations.

In setting Mr. Bauer’s base salary for calendar year 2021, the Compensation Committee referenced the independent compensation consultant’s report indicating Mr. Bauer’s then-current base salary was at approximately the 25th percentile of the consultant’s Energy Industry market data. In line with its previously disclosed plan, the Compensation Committee increased Mr. Bauer’s salary from $900,000 to $950,000, a level slightly below the 50th percentile level.

In determining Ms. Camiolo’s base salary for calendar year 2021, the Compensation Committee referenced the independent compensation consultant’s report and increased Ms. Camiolo’s salary from $428,000 to $437,000, a level slightly above the Energy Industry 50th percentile for principal financial officers. This level maintained Ms. Camiolo’s positioning relative to her calendar year 2020 salary. The increase followed discussion with Mr. Bauer regarding Ms. Camiolo’s responsibilities, effectiveness and experience.

For calendar year 2021, upon review of the independent compensation consultant’s report and consultation with Mr. Bauer, the Compensation Committee increased Mr. Pustulka’s base salary from $840,000 to $875,000, the Energy Industry 50th percentile for positions comparable to his position as Chief Operating Officer. The increase recognized Mr. Pustulka’s performance managing the operations and development plans of the Company.

For calendar year 2021, upon review of the independent compensation consultant’s report and consultation with Mr. Bauer, the Compensation Committee increased Mr. Kraemer’s base salary from $600,000 to $630,000, the Energy Industry 50th percentile for positions comparable to his position as President of the Company’s Pipeline and Storage segment. Effective as of March 1, 2021, the date of Mr. Kraemer’s promotion to Chief Operating Officer, the Compensation Committee increased his salary to $698,000, the Energy Industry 25th percentile for comparable positions. The Compensation Committee structured this increase as the first step of a planned two-step process to raise Mr. Kraemer’s salary to approximately the 50th percentile level for chief operating officers.

For calendar year 2021, following discussion with Mr. Bauer regarding Ms. DeCarolis’ responsibilities, experience and effectiveness, the Compensation Committee increased her base salary from $600,000 to $630,000, an amount in line with the Energy Industry 50th percentile for positions comparable to her position as President of the Company’s Utility segment.

For calendar year 2021, consistent with the Compensation Committee’s past practice regarding the President of Seneca, the Compensation Committee increased Mr. McGinnis’ base salary from $730,000 to $750,000, maintaining his level above the 75th percentile of the Meridian survey data for chief operating officers of independent exploration and production company peers, but below the 50th percentile of the Meridian survey data for chief executive officers of those peers. Given the size and importance to the Company of the E&P segment and the highly competitive nature of the Marcellus and Utica shales, the Compensation Committee generally sets the base salary of Seneca’s President at these levels. The Compensation Committee’s action on Mr. McGinnis’ salary followed discussion with Mr. Bauer of Mr. McGinnis’ responsibilities, experience and effectiveness.

The Board of Directors designated Mr. Loweth an executive officer effective May 1, 2021, and he assumed the office of President of Seneca that day, upon Mr. McGinnis’s retirement. The Committee set Mr. Loweth’s base salary as President of Seneca at $575,000, a level above the 75th percentile of the Meridian survey data for chief operating officers of independent exploration and production company peers, but below the 25th percentile of the Meridian survey data for chief executive officers of those peers. The Compensation Committee did not make any change, at the time of Mr. Loweth’s promotion, to his fiscal 2021 short-term or long-term incentive compensation.

The fiscal 2021 base salaries paid to the named executive officers are shown in the Fiscal 2021 Summary Compensation Table under the “Salary” column within this proxy statement.

 

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Annual Cash Incentive

The Company provides an annual cash incentive to its executives to motivate their performance over a short term (which is generally considered to be no longer than two years). Early in the fiscal year, the Compensation Committee establishes for each named executive officer a target amount for the annual cash incentive, stated as a percentage of base salary. Subject to the limitations described in this paragraph, executives generally can earn up to two times the target percentage, based on performance on written goals. The maximum payment may not exceed the lesser of (i) two times the executive’s base salary, or (ii) two million dollars. In addition, because earnings-related goals take into account performance over two fiscal years, as described below, performance below the maximum level on an earnings-related goal in the first year will negate the possibility of achieving maximum performance on the averaged two-year goal. For participants in the EACIP, the CEO has broad discretion to reduce the amount otherwise payable as annual cash incentive based on such factors as the CEO may determine.

Target Award Levels

In considering target award levels for the annual cash incentive for fiscal 2021, the Compensation Committee took into account the recommendations of the independent compensation consultants based on reviews of competitive market practices, and the recommendations of Mr. Bauer with respect to named executive officers other than himself. The Committee noted that target total cash compensation (base salary and annual bonus) for fiscal 2020 was below the median of the survey data for Mr. Bauer, and aligned with the median for Ms. Camiolo, Mr. Kraemer, Ms. DeCarolis and Mr. Pustulka. For Mr. McGinnis, target total cash compensation for fiscal 2020 was above the 75th percentile of the survey data for chief operating officers of independent E&P companies, but below the 25th percentile for chief executive officers of such peers. The Compensation Committee exercised its business judgment and set target awards for fiscal 2021 as follows:

 

Named Executive Officer

   Target
(As a Percentage of Base Salary)

Mr. Bauer

       120 %

Ms. Camiolo

       50 %

Mr. Kraemer

       90 %

Ms. DeCarolis

       75 %

Mr. Loweth*

       70 %

Mr. Pustulka

       100 %

Mr. McGinnis

       85 %

 

*

Mr. Loweth’s fiscal 2021 target award was set in December 2020 by the Company’s CEO and the President of Seneca, upon review of market data and consideration of Mr. Loweth’s skills and experience. The Compensation Committee made no change to his target upon his designation as an executive officer effective May 1, 2021.

Among the named executive officers who were also named executive officers in the prior year (Mr. Bauer, Ms. Camiolo, Ms. DeCarolis, Mr. Pustulka and Mr. McGinnis), annual incentive target awards were consistent with the prior year, with the exception of Mr. Bauer’s. The Compensation Committee increased Mr. Bauer’s target award level from 100% to 120% of base salary, consistent with its plan to increase his compensation to levels approximating the 50th percentile. The Compensation Committee made no change to Mr. Kraemer’s target award upon his promotion to Chief Operating Officer during the fiscal year.

Fiscal Year 2021 Performance Goals

Based upon discussions with Mr. Bauer and upon review of forecasted financial and operational data, the Compensation Committee approved for each named executive officer other than Mr. Loweth a set of particular performance goals for the 2021 fiscal year. Messrs. Bauer and McGinnis approved

 

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Mr. Loweth’s goals. Certain goals overlapped among named executive officers; for example, each named executive officer had goals tied to safety, diversity and consolidated EBITDA. Incentive payments are based upon performance against the stated goals. Each of the named executive officers other than Mr. Loweth participated in the AARCIP, under which 100% of the target incentive is made dependent on objective performance criteria. For Mr. Loweth, 75% of the target incentive was made dependent on objective performance criteria, and 25% was made dependent on the CEO’s subjective assessment of his performance. All performance criteria applicable to a particular executive are communicated to that executive in writing at the time the criteria are established.

Two-Year Averaging of Earnings-Related Goals

The earnings-related goals established by the Compensation Committee are structured so as to average current-year and prior-year performance. As a result, earnings performance in any given year will impact compensation over two years, mitigating against a potential incentive to pursue short-term results at the expense of longer-term value. In the Company’s E&P segment, for example, a low commodity price environment can militate in favor of scaling back drilling plans, a change that can negatively affect near-term earnings but enhance longer-term value. The Compensation Committee endeavors to incentivize strong short-term results without encouraging activity that is not economic under prevailing market conditions. Averaging earnings-related goals over two years helps to balance those two objectives. The Compensation Committee also sets targets based on the current fiscal year’s financial forecast. Thus, the current year’s targets may be lower (or higher) than the prior year’s actual results (to which the averaging applies). In this way, the impact of lower (or higher) natural gas commodity prices on the Company’s earnings affects the target levels from one year to the next. The use of a two-year averaging technique for earnings-related goals will impact the performance percentage points earned on those goals in a given year, but over time and all other things being equal, it will not change the cumulative performance percentage points earned for actual performance.

The types of objective goals approved for fiscal 2021 and the purpose of the goals are set forth in the following table:

 

Goals   Purpose
Earnings-related goals (EBITDA*)   To focus executives’ attention on the Company’s overall profitability, as well as the profitability of certain segments, as appropriate. Performance is averaged with the prior year’s performance to mitigate against short-term action to impact one year’s earnings.
Health, safety and environmental goals   To focus executives’ attention on employee, customer and public safety and environmental stewardship, including methane and greenhouse gas emissions and operational efficiency.
Diversity and inclusion goal   To focus executives’ attention on efforts to build upon and maintain an inclusive workplace and diverse workforce
Customer service goals   To encourage continued excellence in Utility customer service.
Expense goals   To focus executives’ attention on controlling expense.

 

*

In general, for purposes of the goals, EBITDA is defined, subject to certain exclusions, as operating income plus depreciation, depletion and amortization, plus any period-end impairment charges.

 

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To determine the annual cash incentive award payout based on stated performance objectives, the weight assigned to each goal is multiplied by the percentage of the goal achieved to calculate a weighted percentage for each goal. Once the weighted percentage for each goal is determined, the percentages are totaled. That total weighted percentage is multiplied by the target award to arrive at the total incentive payment amount.

The fiscal 2021 annual cash incentives actually earned by the named executive officers are shown in the Fiscal 2021 Summary Compensation Table in the “Non-Equity Incentive Plan Compensation” column, except that for Mr. Loweth, the portion of his annual cash incentive based on CEO discretion is shown in the “Bonus” column. For each named executive officer, the amount earned was based on performance against objective goals established in the first quarter of the fiscal year, other than with respect to the portion of Mr. Loweth’s opportunity that was subjectively evaluated based on his individual performance. The fiscal 2021 EBITDA goals average fiscal 2021 performance with the prior year’s performance on EBITDA goals. The incentive payments made to the named executive officers were approved by the Compensation Committee.

 

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The following chart identifies the goals assigned to each of the named executive officers for the 2021 fiscal year, the percentage of each goal achieved, the weight assigned to each goal, and the weighted percentage achieved for each goal. Also noted is each named executive officer’s target percentage of base salary, total weighted percentage achieved, target amount, and actual incentive payout. Following the chart, numbered sequentially to match the appearance of the performance objective in the chart, is a summary of what the objective was at the threshold level, target level and maximum level of performance, and a summary of actual performance. Where a target level of performance is stated as a range, achievement at any point within the range will result in the same contribution to the total payout. With regard to EBITDA goals, performance is averaged with the prior year’s performance as a mechanism to mitigate against short-term action to impact one year’s earnings.

 

Annual Cash Incentive
Executive   Bauer   Camiolo   Kraemer   DeCarolis   Loweth   Pustulka   McGinnis
Target % of Base Salary   120%   50%   90%   75%   70%   100%   85%
Fiscal 2021 Goals     Performance  
(%)
    Wght       Wghtd %  
Achvd
    Wght       Wghtd %  
Achvd
    Wght       Wghtd %  
Achvd
    Wght       Wghtd %  
Achvd
    Wght       Wghtd %  
Achvd
    Wght       Wghtd %  
Achvd
    Wght       Wghtd %  
Achvd

1.

  Consolidated EBITDA*   112   0.25   28.00   0.25   28.00   0.25   28.00   0.30   33.60   0.15   16.80   0.25   28.00   0.25   28.00

2.

  Regulated EBITDA*   131   0.20   26.20   0.20   26.20   0.25   32.75   0.35   45.85           0.20   26.20        

3.

  Seneca/Midstream EBITDA*   106   0.20   21.20   0.20   21.20   0.15   15.90           0.15   15.90   0.20   21.20   0.25   26.50

4.

  Seneca F&D Cost   138   0.10   13.80   0.10   13.80                   0.10   13.80           0.15   20.70

5.

  Seneca LOE   200                                   0.10   20.00           0.10   20.00

6.

  Seneca G&A   120                                   0.10   12.00           0.10   12.00

7.

  Seneca Operations Environmental/Safety   100                                   0.10   10.00   0.05     5.00   0.10   10.00

8.

  Compression Reliability   200                   0.10   20.00                   0.05   10.00        

9.

  Pipeline Safety and Emission Reduction   100                   0.05     5.00                                

10.

  Safety   200   0.15   30.00   0.15   30.00   0.15     30.0   0.15   30.00           0.15   30.00        

11.

  Operational Safety and Emission Reduction   100   0.05     5.00                   0.05     5.00           0.05     5.00        

12.

  Customer Service   164           0.05     8.20           0.10   16.40                        

13.

  Diversity & Inclusion     50   0.05     2.50   0.05     2.50   0.05     2.50   0.05     2.50   0.05   2.50   0.05     2.50   0.05     2.50

14.

  CEO Discretion   160.1528                                   0.25   40.0382                

Total Weighted % Achieved

  126.70%   129.90%   134.15%   133.35%   131.0382%   127.90%   119.70%

Target

    $1,125,000   $217,375   $595,950   $466,875   $324,333     $866,250     $633,250

Annual Cash Incentive

    $1,425,375   $282,370   $799,467   $622,578   $425,000     $461,639**     $442,167**

 

*

Reflects an average of 2021 performance and 2020 performance. Regulated EBITDA refers to the Company’s regulated Utility and Pipeline and Storage segments; Seneca/Midstream EBITDA refers to the Company’s Exploration and Production and Gathering segments.

 

**

Pursuant to the terms of the At Risk Plan, Mr. Pustulka and Mr. McGinnis received a pro-rated portion of the annual cash incentive they otherwise would have received had they remained employed through the end of the fiscal year.

 

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Performance Measure   Threshold   Target   Maximum   Actual Performance
1.   Consolidated EBITDA – In determining final performance level, the results of this goal are averaged with the prior year results on the consolidated EBITDA goal.   $855 Million   $936-968 Million   $1,055 Million   2021 Consolidated EBITDA=$996 Million; performance level of 132%; 2-year average of performance levels=(132%+91%)/2=112%
2.   Regulated EBITDA – In determining final performance level, the results of this goal are averaged with the prior year results on the regulated companies EBITDA goal.   $367 Million   $382-387 Million   $408 Million   2021 Regulated EBITDA=$386 Million; performance level of 100%; 2-year average of performance levels=(100%+162%)/2=131%
3.   Seneca/Midstream EBITDA – In determining final performance level, the results of this goal are averaged with the prior year results on the Seneca/Midstream EBITDA goal.   $500 Million   $566-593 Million   $659 Million   2021 Seneca/Midstream EBITDA=$624 Million; performance level of 147%; 2-year average of performance levels=(147%+65%)/2=106%
4.   Seneca Finding and Development Cost (per thousand cubic feet equivalent (Mcfe))   $0.77/Mcfe   $0.60-0.62/Mcfe   $0.47/Mcfe   $0.54/Mcfe
5.   Seneca Lease Operating Expense (per Mcfe)   $0.89/Mcfe   $0.85/Mcfe   $0.82/Mcfe   $0.82/Mcfe
6.   Seneca General & Administrative Expense excluding certain expenses related to joint venture or development agreements and acquisition or divestiture transactions   $72.6 Million   $68.6-70.6 Million   $64.6 Million   $67.8 Million
7.   Seneca Operations Environmental/Safety – Measured by assessments and projects completed.   Complete 2 of 3 operations assessments/projects   Complete 3 operations assessments/projects   Performance capped at Target   Completed 3 operations assessments/projects
8.   Compression Reliability – Measured by compressor fleet availability average.   Greater than 90%   92%   96%   96.6%
9.   Pipeline Safety and Emission Reduction – Measured by further development of greenhouse gas reporting program (GHGRP) in Pipeline and Storage segment, and level of emissions reduction.   Extend GHGRP to include facilities below EPA’s metric ton threshold, and reduction of 10,000 metric tons CO2e   Extend GHGRP to include facilities below EPA’s metric ton threshold, and reduction of 20,000 metric tons CO2e   Capped at Target   Extended GHGRP to include facilities below EPA’s metric ton threshold, and achieved reduction of greater than 20,000 metric tons CO2e
10.   Safety – To promote continued importance of safety; measured by number of OSHA recordable injuries in the utility and pipeline divisions.   Safety performance at or better than goal in any division   Safety performance at or better than goal in any two divisions   Safety performance at combined level of 2.01 or less   Safety performance at combined level of 1.49
11.   Operational Safety and Methane Emissions Reduction – Measured by the Utility segment’s operational safety performance in New York and outstanding leaks reduction.   Complete all 3 Safety Performance Standards OR any 2 Safety Performance Standards and Outstanding Leaks Reduction   Complete all 3 Safety Performance Standards and Outstanding Leaks Reduction   Capped at Target   Completed all 3 Safety Performance Standards and Outstanding Leaks Reduction
12.   Customer Service – Measured by average of performance levels on residential satisfaction rates and non-emergency appointments kept.   Residential Satisfaction Rates in NY and PA are 85%, or Non-Emergency Appointments Kept are 98% in NY and 98% in PA   Residential Satisfaction Rates in NY and PA are 92%, and Non-Emergency Appointments Kept are 98% in NY and 98% in PA   Residential Satisfaction Rates in NY and PA are at least 96%, and Non-Emergency Appointments Kept are at least 99.7% in NY and at least 99.8% in PA   Residential Satisfaction Rates in NY and PA between target and maximum performance levels; Non-Emergency Appointments Kept in NY and PA between target and maximum performance levels
13.   Diversity and Inclusion – Measured by outreach programs and percent of job applicants in protected classes.   Engage in at least 7 outreach programs   Engage in at least 7 outreach programs, and percentage of protected-class applicants is more than 40% (the three-year average)   Engage in at least 7 outreach programs, and percentage of protected-class applicants is 50% or more   Engaged in more than 7 outreach programs, and percentage of protected-class applicants was 38.4%
14.   CEO Discretion – Individual performance as subjectively determined by the CEO.   1%   100%   200%   160.1528%

 

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Preview of Fiscal Year 2022 Performance Goals

Based upon discussions with Mr. Bauer and upon review of forecasted financial data, the Compensation Committee approved for each named executive officer, as applicable, a set of particular performance goals for the 2022 fiscal year. These goals are aligned with the Company’s strategic business plans, as well as its on-going corporate responsibility efforts, including ESG matters. The types of objective goals approved for fiscal 2022 include the following:

 

   

Financial performance goals related to earnings (EBITDA), which serve to focus executives’ attention on the Company’s overall profitability, as well as the profitability of certain segments, as appropriate;

 

   

Operations performance goals related to expenses in the exploration and production business, compression reliability in the pipeline and storage and gathering businesses, and customer service in the utility business, which serve to focus executives’ attention on controlling expense, ensuring operational reliability, and continued excellence in customer service; and

 

   

ESG performance goals related to emissions reductions, safety, and diversity, equity and inclusion, which serve to focus executives’ attention on environmental stewardship, employee, customer and public safety, workplace inclusiveness, and diversity among the workforce.

Information regarding performance on these goals will be described in the Company’s proxy statement to be filed following the completion of the 2022 fiscal year.

Long-Term Incentive Compensation

The Compensation Committee uses its business judgment to establish target long-term incentive awards, taking into account the recommendations of its compensation consultants based on reviews of competitive market practices, and the recommendations of the CEO with respect to named executive officers other than himself. Such awards are intended to focus attention on managing the Company from a long-term investor’s perspective. In addition, the Compensation Committee wishes to encourage officers and other managers to have a significant, personal investment in the Company through stock ownership. The Compensation Committee typically makes equity awards on an annual basis in December, but has not established a policy to make grants at a specific meeting, to allow flexibility to review and evaluate appropriate equity grant practices.

Fiscal Year 2021 Awards

For named executive officers other than those employed by Seneca, the Compensation Committee established fiscal 2021 target long-term incentive awards at approximately the 50th percentile of market data for comparable positions. Awards ranged from 90% to 115% of the 50th percentile mark. These award levels were generally consistent with the prior year, with the exception of Mr. Bauer. The Compensation Committee increased Mr. Bauer’s long-term incentive target from the 25th percentile to approximately the 50th percentile, consistent with its plan to increase his compensation to levels approximating the 50th percentile. The Compensation Committee made no change to Mr. Kraemer’s long-term incentive target upon his promotion to Chief Operating Officer during the fiscal year. The Compensation Committee set Mr. McGinnis’ fiscal 2021 target long-term incentive award between the 50th and 75th percentiles of market data for chief operating officers at independent E&P peers, and below the 25th percentile of market data for chief executive officers at such peers. While the dollar value of Mr. McGinnis’ fiscal 2021 target award remained steady with the prior year, his percentile increased, reflecting lower long-term incentive awards at independent peers. The Compensation Committee noted that, for independent E&P companies, compensation tends to follow commodity fluctuations, a phenomenon not generally observed at vertically integrated companies like the Company. Mr. Loweth’s fiscal 2021 target long-term incentive award was approved by the Compensation Committee in December 2020 before he was designated an executive officer. The Compensation Committee made no change to his target (which was below the 25th

 

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percentile for chief operating officers at independent E&P peers) upon his designation as an executive officer effective May 1, 2021.

For Mr. Bauer, Ms. Camiolo, Ms. DeCarolis, Mr. Loweth and Mr. McGinnis, the Compensation Committee granted two-thirds of the fiscal 2021 long-term incentive award in the form of performance shares, and one-third in the form of time-vested RSUs, which serve as an additional retention tool. For Mr. Pustulka and Mr. Kraemer, the Compensation Committee granted a long-term incentive award entirely in the form of performance shares. The Compensation Committee made that determination to focus greater attention on the achievement of performance targets, and in recognition of the fact that retention incentives such as time-vested RSUs can have a lesser impact with respect to long-tenured executives.

As in prior years, the performance shares awarded in fiscal 2021 to the named executive officers are split evenly between relative TSR and relative ROC performance conditions, as described below. The performance conditions are to be achieved over a three-year performance cycle that started October 1, 2020 and concludes September 30, 2023.

The Compensation Committee established the performance condition for one set of performance shares awarded in fiscal 2021 as the Company’s three-year TSR over the performance cycle as compared to the same metric for companies in the Korn Ferry peer group, as calculated based on the data reported for each company in the Bloomberg online database. Starting stock prices are calculated as the average closing stock prices for the calendar month immediately preceding the start of the performance cycle; ending stock prices are calculated as the average closing stock prices for the calendar month concluding the performance cycle; and dividends are deemed reinvested in each company’s securities at each ex-dividend date. The Compensation Committee linked the awards to relative levels of performance, which results in the vesting and payment of a percentage of the target number of performance shares depending on the Company’s percentile rank in the Korn Ferry peer group, as follows:

 

Relative TSR Goal

   Percentage of
Target Opportunity Paid
 

Company’s Percentile Ranking

30th or below

     0

40th

     50

50th

     100

70th

     150

90th or above

     200

If the Company’s three-year TSR is negative (less than 0.0), the percentage of target opportunity paid is capped at 100%, regardless of the Company’s percentile ranking. For performance between two established performance levels, the percentage of target opportunity paid is determined by straight line mathematical interpolation.

The Compensation Committee established the performance condition for the second set of performance shares awarded in fiscal 2021 as the Company’s three-year ROC over the performance cycle as compared to the same metric for companies in the Korn Ferry peer group. ROC for the Company or any member of the peer group means the average of the returns on capital for each twelve month period corresponding to each of the Company’s fiscal years during the performance cycle, calculated based on the data reported for that company in the Bloomberg database. The Compensation Committee linked the awards to relative levels of performance, which results in the vesting and payment of a percentage of the target number of performance shares depending on the Company’s percentile rank in the Korn Ferry peer group, as follows:

 

Relative ROC Goal

   Percentage of
Target Opportunity Paid
 

Company’s Percentile Ranking

<45th

     0

45th

     50

60th

     100

75th

     150

100th

     200

 

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If the Company’s three-year ROC is negative (less than 0.0), the percentage of target opportunity paid is capped at 100%, regardless of the Company’s percentile ranking. For performance between two established performance levels, the percentage of target opportunity paid is determined by mathematical interpolation.

No dividend equivalents are provided in respect of any performance shares.

Each of the time-based RSU awards granted to named executive officers in fiscal 2021 generally vests in three equal annual installments beginning on the first anniversary of the date of grant, assuming continued employment at the Company. No dividend equivalents are provided in respect of any RSUs.

The performance shares and time-based RSUs granted to the named executive officers in fiscal 2021 are set out in the Grants of Plan-Based Awards in Fiscal 2021 Table within this proxy statement.

Performance on Past Awards

With respect to the performance shares granted in fiscal 2019, which had a performance cycle covering fiscal years 2019 through 2021, the Compensation Committee had established the following 14-member peer group:

Atmos Energy Corporation

Cabot Oil & Gas Corporation

CNX Resources Corporation

Energen Corporation

EQT Corporation

MDU Resources Group Inc.

New Jersey Resources Corporation

Range Resources Corporation

SM Energy Company

Southwest Gas Corporation

Southwestern Energy Company

Spire, Inc.

UGI Corporation

Whiting Petroleum Corporation

One company in that peer group (Energen Corporation) was acquired during the course of the performance cycle, and therefore dropped out of the peer group. The Company’s performance was ranked against that of the 13 companies remaining in the peer group at September 30, 2021. With respect to TSR, the Company outperformed ten of the 13 companies, with a TSR of 4.14%, placing it at approximately the 77th percentile. Pursuant to the TSR performance share payout scale (the same scale shown above for the Relative TSR Goal), performance at that percentile resulted in a payout of approximately 167% of the target opportunity. Regarding ROC, the Company outperformed ten of the 13 companies, with an average ROC of 6.27%, placing it at approximately the 77th percentile. Pursuant to the ROC performance share payout scale (the same scale shown above for the Relative ROC Goal), performance at that percentile resulted in a payout of approximately 154% of the target opportunity.

 

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The Company’s performance on the last five completed TSR and ROC performance share grants is summarized in the table below.

 

Grant Date
(fiscal year)
 

Performance

Cycle

(fiscal years)

  TSR   ROC
  Relative
Performance
  Percentile   Payout
Percentage
  Relative
Performance
  Percentile   Payout
Percentage

2019

  2019 – 2021   outperformed
10 of 13
  76.92   167.30   outperformed
10 of 13
  76.92   153.84

2018

  2018 – 2020   outperformed
9 of 12
  75.00   100.00
(capped)
  outperformed
7 of 12
  58.33   94.43

2017

  2017 – 2019   outperformed
6 of 12
  50.00   100.00   outperformed
10 of 12
  83.33   166.66

2016

  2016 – 2018   outperformed
6 of 12
  50.00   100.00   outperformed
8 of 12
  66.67   122.23

2015

  2015 – 2017   outperformed
7 of 13
  53.85   100.00
(capped)
  outperformed
7 of 13
  53.85   79.50
 

 

 

   

 

 

  Average   61.15   113.46   Average   67.82   123.33

Preview of Fiscal Year 2022 Long-Term Incentive Performance Goals

The Compensation Committee approved performance goals for performance shares awarded to continuing named executive officers as part of the fiscal 2022 long-term incentive award. New for the fiscal 2022 award is a performance goal focused on GHG emissions reductions. The emissions goal sets methane intensity reduction metrics for each of the Company’s operating segments, and an overall greenhouse gas emissions metric for the consolidated Company. The performance period for the goal runs from calendar year 2022 through calendar year 2024, consistent with the Company’s calendar-year reporting of GHG emissions. The goal is intended to incentivize and reward performance that helps position the Company to meet or exceed its 2030 methane intensity and GHG reduction targets. The emissions goal accounts for 4% of the total long-term incentive award.

The remainder of the performance shares awarded in fiscal 2022 are split evenly between TSR and ROC relative performance goals. These goals are similar to the goals approved in fiscal 2021, except that the Compensation Committee added three companies to the peer group against which the Company’s performance is measured: Antero Midstream Corporation, Gulfport Energy Corporation and ONE Gas, Inc. For the fiscal 2022 awards, the Compensation Committee did not remove any companies that were included in the fiscal 2021 peer group.

CLAWBACK POLICY

The Company’s Corporate Governance Guidelines include a clawback provision. Under the clawback provision, if the Company is required to restate its financial results due to material noncompliance with any financial reporting requirement under the securities laws as a result of misconduct by a current or former executive officer, the Board would exercise its business judgment to determine what action it believes is appropriate to address the conduct, prevent its recurrence, and impose such discipline as would be appropriate. In addition to other potential action, the Board may, in its discretion after considering the costs and benefits of doing so, seek to recover that portion of any incentive-based compensation received by such officer (including compensation received upon exercise or payment of stock options and other equity awards) during the three-year period preceding the date on which the Company was required to prepare the accounting restatement, which exceeds the amount or value that the Board determines would have been payable or received in respect of such incentive awards had the revised financial statement(s) reflected in the restatement been applied to determine the incentive compensation or been available to the market at the time of exercise or payment of any incentive award.

 

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Subject to any limits imposed by applicable law, the Board may seek to recover such excess compensation by requiring the officer to pay such amount to the Company, by set-off, by reducing future compensation, or by such other means or combination of means as the Board determines to be appropriate.

EMPLOYEE BENEFITS

Retirement Benefits

The Company maintains four plans that provide retirement benefits: (i) a qualified defined contribution retirement plan (“401(k) Plan”) that includes a traditional 401(k) benefit and, for certain eligible employees hired at various points in 2003 and thereafter, a retirement savings account (“RSA”) benefit; (ii) a qualified defined benefit retirement plan for those hired prior to various points in 2003 (“Retirement Plan”); (iii) a non-qualified defined benefit executive retirement plan available only to select officers promoted prior to 2002 (“Executive Retirement Plan”); and (iv) a non-qualified tophat plan (“Tophat Plan”). These plans help the Company attract and retain high caliber employees in high-level management positions and, in the case of the non-qualified plans, restore retirement benefits lost to employees under the qualified retirement plans as a result of the effect of the Internal Revenue Code limits and the qualified plans’ limits on compensation considered and benefits provided under such qualified plans. The employee benefits for named executive officers employed prior to 2003 differ from those made available to those employed during or after that year. The Company made changes to its programs that reflected a shift in competitive practices away from certain types of retirement benefits, but generally grandfathered existing employees (including named executive officers) who were then in service in the benefits programs that are commensurate with those in the regulated energy industry.

The named executive officers participated in the following plans in fiscal 2021:

 

         
  401(k) Plan Retirement Plan Tophat Plan Executive
Retirement Plan
  Traditional benefit RSA benefit
         

Bauer

X X X
         

Camiolo

X X X
         

Kraemer

X X X X
         

DeCarolis

X X X X
         

Loweth

X X X
         

Pustulka

X X X X
         

McGinnis

X X X

Benefits are described in more detail in the sections entitled “Fiscal 2021 Pension Benefits” and “Fiscal 2021 Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans” within this proxy statement.

Executive Life Insurance

The Company maintains an insurance program known as the “ExecutiveLife Insurance Plan.” Executive officers who have reached age 50 are eligible to participate in this plan, under which the Company will pay the premium, generally in an amount up to $15,000 per year, of a life insurance policy or policies to be owned by the executive officer. The payment is taxable income to the executive officer and ceases when the executive officer’s employment ceases. In fiscal 2021 each of the named executive officers other than Mr. Loweth participated in the ExecutiveLife Insurance Plan.

Executive Perquisites

The Company offers a limited number of perquisites to our named executive officers. The basis for offering these perquisites is to enhance the Company’s ability to attract and retain highly qualified

 

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persons and also to assist the officer in conducting business on behalf of the Company. For certain items, the perquisite is incidental to other business-related use. For example, the Company shares an arena suite with a local law firm for the local professional hockey team. The Company also has additional season tickets for seats for both the local professional hockey and football teams. The Company made these investments as a result of specific drives by the Buffalo, New York business community to support the retention of these professional athletic teams in the Buffalo area. These suites are primarily used for Company business. On the occasions when the suites are not used for Company business, the named executive officers as well as other employees are permitted personal use.

The Company offers named executive officers tax preparation advice, in part to assure the Company that its officers are properly reporting compensation. The Company makes contributions for the named executive officers’ long-term disability plans. The Company also pays the costs of spouses accompanying named executive officers to certain of the Board of Directors and industry meetings and functions, as well as blanket travel insurance for the named executive officer and spouse.

CHANGE IN CONTROL ARRANGEMENTS

The Company’s named executive officers serve at the pleasure of the Board of Directors and are not employed pursuant to employment agreements. Each of the named executive officers is a party to an Employment Continuation and Noncompetition Agreement with the Company, which would become effective upon a Change in Control of the Company.

The Company and the Compensation Committee believe that these agreements are required for the attraction and retention of the executive talent needed to achieve corporate objectives and to assure that named executive officers direct their attention to their duties, acting in the best interests of the stockholders, notwithstanding the potential for loss of employment in connection with a Change in Control.

The agreement contains a “double-trigger” provision that provides payment only if employment terminates within three years following a Change in Control, as defined in the agreement, either by the Company other than for cause or by the named executive officer for good reason. The Compensation Committee believes this structure strikes a balance between the incentive and the executive attraction and retention efforts described above, without providing Change in Control benefits to named executive officers who continue to enjoy employment with the Company in the event of a Change in Control transaction.

The payment is generally calculated by multiplying 1.99 by the sum of the named executive officer’s current base salary plus the average of the annual short-term incentive compensation payment for the previous two fiscal years. The 1.99 multiplier is reduced on a pro-rata basis if termination occurs between age 62 and age 65, at which point no amount is payable. If payment is triggered, certain health benefits are continued for the earlier of 18 months following termination or the date other similar coverage becomes available.

The agreement contains a restrictive covenant whereby the named executive officer may, upon termination following a Change in Control, choose to refrain from being employed by or otherwise serving as an agent, consultant, partner or major stockholder of a business engaged in activity that is competitive with that of the Company or its subsidiaries. If the named executive officer so chooses to be bound by this restrictive covenant, an additional payment is made in the amount of one times the sum of current base salary plus the average of the annual short-term incentive compensation payment for the previous two fiscal years. The Compensation Committee and the Company believe this is an appropriate payment in exchange for the named executive officer’s agreement to the non-compete covenant. There is no gross-up for taxes on either payment.

If a named executive officer experiences a qualifying termination of employment within a specific time following a Change in Control of the Company, many of the components of total compensation

 

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described above become immediately vested or paid out in a lump sum. More detail about these items and calculations as of September 30, 2021, are set forth in the section entitled “Potential Payments Upon Termination or Change in Control” within this proxy statement.

STOCK OWNERSHIP GUIDELINES

In an effort to emphasize the importance of stock ownership and in consultation with the Compensation Committee, the Company maintains Common Stock ownership guidelines for officers, ranging from one times base salary for junior officers to six times base salary at the CEO level. Generally, officers are expected to meet the guidelines within five years following promotion. Mr. Bauer holds approximately 5.7 times his base salary as of December 31, 2021, and generally is expected to reach six times base salary by July 1, 2024, five years after his promotion to CEO. All other continuing named executive officers, for whom the requirement is three times base salary, exceed their ownership requirements. The Board and management believe that employees who are stockholders perform their jobs in a manner that considers the long-term interests of the stockholders. Company directors are also subject to ownership requirements, as noted previously in this proxy statement.

TAX AND ACCOUNTING CONSIDERATIONS

In designing the Company’s compensation program, general consideration is given to the accounting treatment of the awards made to our named executive officers and pertinent tax law provisions. Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally prohibits the Company from deducting compensation paid in excess of $1 million per year to certain covered officers, including certain former named executive officers. Due to the importance and benefit to the Company and its stockholders of awarding compensation that is structured to properly incentivize our named executive officers, the Compensation Committee believes that it is in the Company’s best interests to retain flexibility in awarding compensation, even if some awards may be non-deductible compensation expenses to the Company. The Company has also designed its compensation program with the intent that any awards granted thereunder will either be exempt from, or comply with the applicable requirements under, Section 409A of the Code.

 

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Fiscal 2021 Summary Compensation Table

The following table sets forth a summary of the fiscal 2021 compensation of the Company’s CEO, Principal Financial Officer, each of the three most highly compensated executive officers other than the CEO and Principal Financial Officer who were serving as executive officers at the end of fiscal 2021, and two former executive officers who retired during fiscal 2021. The compensation reflected for each officer was for the officer’s services provided in all capacities to the Company and its subsidiaries.

 

Name and Principal

Position

  Fiscal
Year
    Salary
($)
    Bonus
($)
    Stock
Awards
($)(1)
    Non-Equity
Incentive
Plan
Compensation
($)(2)
    Change in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(3)
    All Other
Compensation
($)(4)
    Total
($)
 

David P. Bauer

President and Chief
Executive Officer

   

2021

2020

2019

 

 

 

   

937,500

875,000

667,500

 

 

 

   

0

0

0

 

 

 

   

3,476,073

1,945,917

1,351,675

 

 

 

   

1,425,375

1,056,125

599,248

 

 

 

   

955,805

937,392

817,243

 

 

 

   

156,886

145,481

75,817

 

 

 

   

6,951,639

4,959,915

3,511,483

 

 

 

Karen M. Camiolo

Treasurer and Principal
Financial Officer

   

2021

2020

2019

 

 

 

   

434,750

424,749

390,250

 

 

 

   

0

0

96,997

 

 

 

   

379,748

370,176

226,032

 

 

 

   

282,370

247,417

180,003

 

 

 

   

176,812

338,162

518,593

 

 

 

   

58,098

55,336

54,869

 

 

 

   

1,331,778

1,435,840

1,466,744

 

 

 

Ronald C. Kraemer

Chief Operating Officer

    2021       662,167       0       855,268       799,467       1,094,770       104,014       3,515,686  

Donna L. DeCarolis

President of National
Fuel Gas Distribution

Corporation

   

2021

2020

2019

 

 

 

   


622,500

586,250
470,142

 

 
 

   

0

0

0

 

 

 

   

855,454

810,762

725,326

 

 

 

   

622,578

675,800

482,542

 

 

 

   

1,513,037

1,326,938

848,014

 

 

 

   

89,804

90,547

72,168

 

 

 

   

3,703,373

3,490,297

2,598,192

 

 

 

Justin I. Loweth

President of Seneca
Resources Company, LLC

    2021       463,333       129,857       635,436       295,143       0       63,056       1,586,825  

John R. Pustulka

Former Chief Operating Officer

   

2021
2020
2019
 
 
 
   

355,833
827,500
780,000
 
 
 
   

0

0

0

 

 

 

   

2,280,663
2,079,813
1,858,759
 
 
 
   

461,639
1,122,918
933,270
 
 
 
   

2,013,017
922,119
1,243,401
 
 
 
   

65,661
135,017
120,783
 
 
 
   

5,176,813
5,087,367
4,936,213
 
 
 

John P. McGinnis

Former President of Seneca

Resources Company, LLC

   

2021
2020
2019
 
 
 
   

432,500
721,250
686,250
 
 
 
   

0
100,000
0
 
 
 
   

1,704,913
1,696,682
1,591,000
 
 
 
   

442,167
566,163
681,601
 
 
 
   

0

0

0

 

 

 

   

76,218
109,579
120,952
 
 
 
   

2,655,798
3,193,674
3,079,803
 
 
 

 

(1)

The stock award values for fiscal 2021 show the aggregate grant date fair value of performance shares and, where applicable, time-based RSUs, computed in accordance with FASB ASC Topic 718. For information on the valuation assumptions and performance conditions with respect to these awards, refer to Note A under the heading “Stock-Based Compensation” and Note H under the heading “Stock Award Plans” in the Company’s financial statements in its Form 10-K for the fiscal year ended September 30, 2021 (“2021 Form 10-K”). The grant date fair value of performance shares reflects an estimate that 100% of the performance shares awarded will vest at the end of the three-year performance period. The actual percentage to vest will be determined following fiscal 2023. The grant date fair value of stock awards granted in fiscal 2021, assuming the highest level of performance for performance shares (200%), is as follows: Mr. Bauer, $5,792,712; Ms. Camiolo, $632,833; Mr. Kraemer, $1,710,537; Ms. DeCarolis, $1,425,581; Mr. Loweth, $1,058,916; Mr. Pustulka, $4,561,326; and Mr. McGinnis, $2,841,169.

 

(2)

For fiscal 2021, this column reflects annual incentive compensation, except that the discretionary portion of Mr. Loweth’s annual incentive payment is reflected in the Bonus column. Please refer to the Compensation Discussion and Analysis for additional information about annual incentive compensation, including information regarding the performance conditions applicable to the awards.

 

(3)

This column represents, for fiscal 2021, the actuarial increase in the present value of the named executive officers’ benefits under all pension plans maintained by the Company, determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements in its 2021 Form 10-K, as described in Note K, “Retirement Plan and Other Post-Retirement Benefits.” The amounts for Mr. Bauer and Ms. Camiolo also include the actuarial increase in the present value of their respective retirement-related tophat benefits under the non-qualified tophat plan. These amounts may include amounts which the named executive officer may not currently be entitled to receive because such amounts are not vested as of September 30, 2021, 2020 and 2019, respectively. For fiscal 2021, the amount includes above-market earnings under the Deferred Compensation Plan for Mr. Pustulka of $1,447. See the narrative, tables and notes to the sections entitled “Fiscal 2021

 

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Pension Benefits” and “Fiscal 2021 Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans” within this proxy statement for more information.

 

(4)

See the All Other Compensation Table below for more information.

The following table describes each component of the All Other Compensation column in the Fiscal 2021 Summary Compensation Table:

 

Description

  David P.
Bauer
($)
    Karen M.
Camiolo
($)
    Ronald C.
Kraemer
($)
    Donna L.
DeCarolis
($)
    Justin I.
Loweth
($)
    John R.
Pustulka
($)
    John P.
McGinnis
($)
 

Defined Contributions(a)

    17,325       17,325       17,325       17,325       28,540       7,175       17,015  

401(k) Tophat(b)

    124,448       25,702       70,373       57,380       10,475       41,873       15,875  

RSA Tophat(c)

    0       0       0       0       23,983       0       28,270  

Employee Stock Ownership Plan (“ESOP”) Supplemental Payment(d)

    0       0       1,217       0       0       1,571       0  

Life Insurance(e)

    15,000       15,000       15,000       15,000       0       15,000       15,000  

Travel Accident Insurance(f)

    113       71       99       99       58       41       58  

Perquisites(g)

    N/A       N/A       N/A       N/A       N/A       N/A       N/A  

Total

    156,886       58,098       104,014       89,804       63,056       65,661       76,218  

 

a)

Represents the Company contributions to the 401(k) plan accounts of the named executive officers. Each named executive officer receives a Company match of up to 6% within the 401(k) plan on the lesser of base salary or the IRS annual compensation limit. In addition, Mr. Loweth and Mr. McGinnis are participants in the Company’s RSA benefit within the 401(k) plan, pursuant to which they receive a Company contribution of 4% on the portion of their base salary plus annual bonus that does not exceed the IRS annual compensation limit.

 

b)

Each named executive officer is prohibited from receiving the full 401(k) Company match due to the IRS annual compensation limit. The 401(k) tophat benefit gives each named executive officer a Company match on the following forms of compensation: (1) base salary that exceeds the IRS annual compensation limit, and (2) annual cash incentive compensation.

 

c)

Represents the Company contributions on Mr. Loweth’s and Mr. McGinnis’ base salary plus annual cash incentive payment that exceeded the IRS annual compensation limit.

 

d)

All management participants who were hired prior to December 31, 1986 participate in the ESOP, which pays dividends to the participants on the Common Stock held in the plan. Participants who were hired prior to 1983 did not have the option to reinvest dividends on shares acquired prior to 1983. The formula for the supplemental payment was designed to result in aggregate supplemental payments to pre-1983 participants approximating the amount the Company saved in corporate income taxes by prohibiting the reinvestment of dividends. The ESOP is a qualified benefit plan that was frozen in 1987 and closed to future participants.

 

e)

Represents the Company-paid life insurance premiums on behalf of each named executive officer under the ExecutiveLife Insurance Plan.

 

f)

Represents the premiums paid for the blanket travel insurance policy, which provides a death benefit to beneficiaries of an officer if the officer dies while traveling on business.

 

g)

Perquisites for each named executive officer were less than $10,000 in the aggregate.

 

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Grants of Plan-Based Awards in Fiscal 2021

The following table sets forth information with respect to awards granted to the named executive officers during fiscal 2021 under the At Risk Plan (or in the case of Mr. Loweth, an annual incentive program that functions similar to the EACIP) and the 2010 Equity Compensation Plan. Please refer to the CD&A within this proxy statement for additional information regarding these plans.

 

                Estimated Possible
Payouts Under
Non-Equity Incentive Plan
Awards
    Estimated Future
Payouts Under
Equity Incentive Plan
Awards
    All Other
Stock

Awards:
Number of
Shares of
Stock or
Units
(#)
    Grant Date
Fair Value of
Stock and
Option
Awards
($)(1)
 

Name

  Note     Grant
Date
    Threshold
($)
    Target
($)
    Maximum
($)
    Threshold
(#)
    Target
(#)
    Maximum
(#)
 

David P. Bauer

    (2     12/10/20       385,875       1,125,000       1,848,375            
    (3     12/10/20             14,779       29,557       59,114         1,104,211  
    (4     12/10/20             1,138       29,557       59,114         1,212,428  
    (5     12/10/20                   29,566       1,159,433  

Karen M. Camiolo

    (2     12/10/20       74,560       217,375       368,016            
    (3     12/10/20             1,615       3,229       6,458         120,631  
    (4     12/10/20             124       3,229       6,458         132,454  
    (5     12/10/20                   3,230       126,663  

Ronald C. Kraemer

    (2     12/10/20       218,714       595,950       993,449            
    (3     12/10/20             5,456       10,912       21,824         407,658  
    (4     12/10/20             420       10,912       21,824         447,610  

Donna L. DeCarolis

    (2     12/10/20       196,788       466,875       803,725            
    (3     12/10/20             3,637       7,274       14,548         271,747  
    (4     12/10/20             280       7,274       14,548         298,379  
    (5     12/10/20                   7,276       285,328  

Justin I. Loweth

    (2     12/10/20       38,433       324,333       557,366            
    (3     12/10/20             2,702       5,403       10,806         201,849  
    (4     12/10/20             208       5,403       10,806         221,631  
    (5     12/10/20                   5,405       211,956  

John R. Pustulka

    (2     12/10/20       297,124       866,250       1,293,311            
    (3     12/10/20             14,549       29,098       58,196         1,087,063  
    (4     12/10/20             1,120       29,098       58,196         1,193,600  

John P. McGinnis

    (2     12/10/20       125,067       633,250       1,011,617            
    (3     12/10/20             7,249       14,497       28,994         541,589  
    (4     12/10/20             558       14,497       28,994         594,667  
    (5     12/10/20                   14,501       568,657  

 

(1)

The equity award values reflect the fair value of performance shares and, where applicable, RSUs at the date of grant, computed in accordance with FASB ASC Topic 718. For performance shares, values are based on the probable outcome of the applicable performance condition. Refer to Note A under the heading “Stock-Based Compensation” and Note H under the heading “Stock Award Plans” in the Company’s financial statements in its 2021 Form 10-K.

 

(2)

This row represents the annual cash incentive opportunity set in fiscal 2021. The amount actually paid for fiscal 2021 is set forth in the Fiscal 2021 Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column or, for Mr. Loweth, under the “Non-Equity Incentive Plan Compensation” column and the “Bonus” column. Please refer to the CD&A for additional information about the performance conditions applicable to each payment.

 

(3)

The ROC performance shares awarded to named executive officers on December 10, 2020 generally vest at the end of a three-year performance cycle (October 1, 2020 through September 30, 2023), subject to the achievement of a performance condition tied to relative total return on capital. Mr. Pustulka and Mr. McGinnis will receive, subject to achievement of the performance condition, the number of shares they would have received had they remained employed by the Company through the end of the performance cycle, pro-rated to reflect the actual time they were employed by the Company during such performance cycle. Please refer to the narrative disclosure under the “Long-Term Incentive Compensation” section within this proxy statement for additional information on the performance condition and vesting terms.

 

(4)

The TSR performance shares awarded to named executive officers on December 10, 2020 generally vest at the end of a three-year performance cycle (October 1, 2020 through September 30, 2023), subject to the achievement of a performance condition tied to relative total shareholder return. The threshold number represents a payout of approximately 3.85% of the target opportunity, which would result from performance at approximately the 30.77 percentile. Performance at the 30.77 percentile would be the lowest achievable percentile above the 30th percentile, assuming no changes to the 13-member peer group. Mr. Pustulka and Mr. McGinnis will receive, subject to achievement of the performance condition, the number of shares they would have received had they remained employed by the Company through the end of the performance cycle, pro-rated to reflect the actual time they were employed by the Company during such performance

 

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cycle. Please refer to the narrative disclosure under the “Long-Term Incentive Compensation” section within this proxy statement for additional information on the performance condition and vesting terms.

 

(5)

The RSUs awarded to named executive officers on December 10, 2020 generally vest in one-third increments on the first three anniversaries of the date of grant, subject to continued employment with the Company. Please refer to the narrative disclosure under the “Fiscal 2021 Potential Payments Upon Termination or Change in Control” section within this proxy statement for additional information regarding vesting terms.

Outstanding Equity Awards at Fiscal 2021 Year-End

The following table sets forth, on an award-by-award basis for each of the named executive officers, the number of securities underlying unexercised SARs and the number and market value of unvested RSUs and performance shares, as of September 30, 2021. The table also provides the grant price, which is the fair market value (the average of the high and low stock price) on the grant date, and the date of expiration of each unexercised SAR.

 

        Option Awards   Stock Awards

Name

  Grant
Date
  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
  Option
Exercise
Price
($)(1)
  Option
Expiration
Date
  Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)
  Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested
($)(2)
  Equity
Incentive
Plan

Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That  Have
Not Vested
(#)(3)
  Equity
Incentive
Plan

Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or  Other
Rights
That Have
Not Vested
($)(3)

David P. Bauer

      12/19/11       5,000       0       55.09       12/19/2021       0       0       0       0
      12/19/12       10,629       0       53.05       12/19/2022       0       0       0       0
      12/19/18 (4)       0       0       0       N/A       0       0       10,400       546,208
      12/19/18 (5)       0       0       0       N/A       0       0       10,400       546,208
      12/19/18 (6)       0       0       0       N/A       1,734       91,070       0       0
      7/1/19 (6)       0       0       0       N/A       10,821       568,319       0       0
      12/9/19 (4)       0       0       0       N/A       0       0       15,171       796,781
      12/9/19 (5)       0       0       0       N/A       0       0       30,342       1,593,562
      12/9/19 (6)       0       0       0       N/A       10,118       531,397       0       0
      12/10/20 (4)       0       0       0       N/A       0       0       59,114       3,104,667
      12/10/20 (5)       0       0       0       N/A       0       0       29,557       1,552,334
      12/10/20 (6)       0       0       0       N/A       29,566       1,552,806       0       0

Karen M. Camiolo

      12/19/11       2,500       0       55.09       12/19/2021       0       0       0       0
      12/19/12       5,465       0       53.05       12/19/2022       0       0       0       0
      12/19/18 (4)       0       0       0       N/A       0       0       2,782       146,111
      12/19/18 (5)       0       0       0       N/A       0       0       2,782       146,111
      12/19/18 (6)       0       0       0       N/A       464       24,369       0       0
      12/9/19 (4)       0       0       0       N/A       0       0       2,886       151,573
      12/9/19 (5)       0       0       0       N/A       0       0       5,772       303,145
      12/9/19 (6)       0       0       0       N/A       1,925       101,101       0       0
      12/10/20 (4)       0       0       0       N/A       0       0       6,458       339,174
      12/10/20 (5)       0       0       0       N/A       0       0       3,229       169,587
      12/10/20 (6)       0       0       0       N/A       3,230       169,640       0       0

Ronald C. Kraemer

      12/19/11       2,000       0       55.09       12/19/2021       0       0       0       0
      12/19/12       4,780       0       53.05       12/19/2022       0       0       0       0
      12/19/18 (4)       0       0       0       N/A       0       0       3,800       199,576
      12/19/18 (5)       0       0       0       N/A       0       0       3,800       199,576
      12/19/18 (6)       0       0       0       N/A       634       33,298       0       0
      12/9/19 (4)       0       0       0       N/A       0       0       6,321       331,979
      12/9/19 (5)       0       0       0       N/A       0       0       12,642       663,958
      12/9/19 (6)       0       0       0       N/A       4,216       221,424       0       0
      12/10/20 (4)       0       0       0       N/A       0       0       21,824       1,146,196
      12/10/20 (5)       0       0       0       N/A       0       0       10,912       573,098

 

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        Option Awards   Stock Awards

Name

  Grant
Date
  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
  Option
Exercise
Price
($)(1)
  Option
Expiration
Date
  Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)
  Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested
($)(2)
  Equity
Incentive
Plan

Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That  Have
Not Vested
(#)(3)
  Equity
Incentive
Plan

Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or  Other
Rights
That Have
Not Vested
($)(3)

Donna L. DeCarolis

      12/19/11       2,000       0       55.09       12/19/2021       0       0       0       0
      12/19/12       4,940       0       53.05       12/19/2022       0       0       0       0
      12/19/18 (4)       0       0       0       N/A       0       0       8,926       468,794
      12/19/18 (5)       0       0       0       N/A       0       0       8,926       468,794
      12/19/18 (6)       0       0       0       N/A       1,489       78,202       0       0
      12/9/19 (4)       0       0       0       N/A       0       0       6,321       331,979
      12/9/19 (5)       0       0       0       N/A       0       0       12,642       663,958
      12/9/19 (6)       0       0       0       N/A       4,216       221,424       0       0
      12/10/20 (4)       0       0       0       N/A       0       0       14,548       764,061
      12/10/20 (5)       0       0       0       N/A       0       0       7,274       382,030
      12/10/20 (6)       0       0       0       N/A       7,276       382,136       0       0

Justin I. Loweth

      12/19/12       5,548       0       53.05       12/19/2022       0       0       0       0
      12/19/18 (4)       0       0       0       N/A       0       0       6,192       325,204
      12/19/18 (5)       0       0       0       N/A       0       0       6,192       325,204
      12/19/18 (6)       0       0       0       N/A       1,033       54,253       0       0
      12/9/19 (4)       0       0       0       N/A       0       0       5,531       290,488
      12/9/19 (5)       0       0       0       N/A       0       0       11,062       580,976
      12/9/19 (6)       0       0       0       N/A       3,689       193,746       0       0
      12/10/20 (4)       0       0       0       N/A       0       0       10,806       567,531
      12/10/20 (5)       0       0       0       N/A       0       0       5,403       283,766
      12/10/20 (6)       0       0       0       N/A       5,405       283,871       0       0

John R. Pustulka

      12/19/11       15,000       0       55.09       12/19/2021       0       0       0       0
      12/19/12       22,121       0       53.05       12/19/2022       0       0       0       0
      12/19/18 (4)       0       0       0       N/A       0       0       33,388       1,753,538
      12/19/18 (5)       0       0       0       N/A       0       0       33,388       1,753,538
      12/9/19 (4)       0       0       0       N/A       0       0       24,003       1,260,638
      12/9/19 (5)       0       0       0       N/A       0       0       48,006       2,521,275
      12/10/20 (4)       0       0       0       N/A       0       0       58,196       3,056,454
      12/10/20 (5)       0       0       0       N/A       0       0       29,098       1,528,227

John P. McGinnis

      12/19/12       20,802       0       53.05       12/19/2022       0       0       0       0
      12/19/18 (4)       0       0       0       N/A       0       0       19,580       1,028,342
      12/19/18 (5)       0       0       0       N/A       0       0       19,580       1,028,342
      12/9/19 (4)       0       0       0       N/A       0       0       13,228       694,735
      12/9/19 (5)       0       0       0       N/A       0       0       26,456       1,389,469
      12/10/20 (4)       0       0       0       N/A       0       0       28,994       1,522,765
      12/10/20 (5)       0       0       0       N/A       0       0       14,497       761,382

 

(1)

Awards were granted at an exercise price equal to the fair market value on the grant date.

 

(2)

The RSUs generally vest over a period of three years in one-third increments at each anniversary of the grant date of the awards, except that the RSUs awarded to Mr. Bauer on July 1, 2019 generally vest in one-half increments on the third and fourth anniversaries of the grant date of the award. The market value represents the number of unvested RSUs multiplied by the closing market price ($52.52) of the Common Stock as of September 30, 2021.

 

(3)

The performance shares awarded on December 19, 2018, December 9, 2019 and December 10, 2020 generally vest after the end of three-year performance cycles ending September 30, 2021, September 30, 2022 and September 30, 2023, respectively, subject to the achievement of a performance condition based on relative ROC or relative TSR.

 

  

Estimated performance through September 30, 2021 for the outstanding ROC performance share awards was as follows: for awards made in December 2018 and December 2020, above target and below maximum; and for awards made in December 2019, above threshold and

 

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below target. Accordingly, the estimated number of unearned ROC performance shares is reported as follows: for awards made in December 2018 and December 2020, at the maximum amount of 200%; and for awards made in December 2019, at the target amount of 100%.

 

  

Estimated performance through September 30, 2021 for the outstanding TSR performance share awards was as follows: for awards made in December 2018 and December 2019, above target and below maximum; and for awards made in December 2020, above threshold and below target. Accordingly, the estimated number of unearned TSR performance shares is reported as follows: for awards made in December 2018 and December 2019, at the maximum amount of 200%; and for awards made in December 2020, at the target amount of 100%.

 

  

As explained in the CD&A, actual performance over the full three-year performance cycle could result in a lesser or greater payout. The market value of the unearned performance shares represents the estimated number of shares multiplied by the closing market price of the Common Stock as of September 30, 2021 ($52.52). Please refer to the narrative disclosure under the “Long-Term Incentive Compensation” section within this proxy statement for additional information on the performance conditions and vesting terms.

 

(4)

ROC performance shares.

 

(5)

TSR performance shares.

 

(6)

RSUs.

Option Exercises and Stock Vested in Fiscal 2021

The following table sets forth, as to each named executive officer, information with respect to exercises of SARs and vesting of RSUs, performance shares, and shares of restricted stock during the fiscal year.

 

     Option Awards    Stock Awards

Name

   Number of
Shares
Acquired on
Exercise
(#)(1)
   Value
Realized
on
Exercise
($)(2)
   Number of
Shares
Acquired on
Vesting
(#)
   Value
Realized
on
Vesting
($)(3)

David P. Bauer

       0        0        17,562        750,753

Karen M. Camiolo

       0        0        4,649        198,994

Ronald C. Kraemer

       0        0        6,510        278,136

Donna L. DeCarolis

       0        0        5,871        250,975

Justin I. Loweth

       0        0        8,907        381,294

John R. Pustulka

       0        0        27,587        1,182,379

John P. McGinnis

       0        0        44,909        1,895,832

 

(1)

Represents the aggregate number of shares of Common Stock as to which awards were exercised.

 

(2)

Represents the aggregate difference between the grant price and the fair market value of the Common Stock at exercise.

 

(3)

Represents the fair market value of the Common Stock on the vest date multiplied by the number of RSUs, performance shares, or shares of restricted stock that vested.

 

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Fiscal 2021 Pension Benefits

The following table sets forth information with respect to the pension benefits as of September 30, 2021 of each of the named executive officers. The Company sponsors a non-qualified executive retirement plan and a qualified retirement plan, and also provides a retirement-related benefit under a non-qualified tophat plan. The named executive officers participate in these benefits to the extent indicated below.

 

Name

  

Plan Name

   Number of
Years
Credited
Service
(#)(1)
   Present Value
of
Accumulated
Benefit
($)(1)
   Payments
During
Last
Fiscal Year
($)

David P. Bauer

  

Executive Retirement Plan

   N/A        N/A        N/A
  

Retirement Plan

   19        1,153,279        0
  

Retirement-Related Tophat

   19        3,218,896        0

Karen M. Camiolo

  

Executive Retirement Plan

   N/A        N/A        N/A
  

Retirement Plan

   26        1,882,137        0
  

Retirement-Related Tophat

   26        1,764,997        0

Ronald C. Kraemer

  

Executive Retirement Plan