Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
At a meeting of the Compensation Committee (the "Committee") of the Company's Board of Directors (the "Board") onMay 24, 2021 , and a continuation thereof onJune 28, 2021 , the Committee approved the following: (a) base salary increases for certain officers; (b) a short-term performance-based incentive compensation plan for fiscal year 2022; and (c) a long-term equity incentive plan for the performance period fiscal year 2022 through fiscal year 2024, referred to collectively as the fiscal year 2022 Executive Compensation Plan (the "Plan"). The Plan applies to the following officers:William C. Boor , President and Chief Executive Officer ("CEO");Mickey R. Dragash , Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer;Matthew A. Niño , President of Retail;Lyle D. Zeller , President,CountryPlace Acceptance Corp. ; andPaul W. Bigbee , Chief Accounting Officer. The compensation for Messrs. Boor and Dragash is generally established by their existing individual employment agreements. Base Salaries The Committee approved base salary compensation increases for the following officers:Mr. Boor's base salary was increased by$25,000 to$850,000 , andMr. Bigbee's base salary was increased by$20,000 to$220,000 . The Plan includes the following incentive components: Annual Short-Term Incentive Cash Compensation Messrs. Boor, Dragash, Niño and Bigbee were each granted an opportunity to earn a performance-based cash bonus under the Short-Term Incentive Plan ("STIP"). For fiscal year 2022, the individual awards are expressed as a percentage of each base salary. Each officers' eligibility to earn a cash bonus is tied to the Company's actual corporate financial performance measured against the budget as approved by the Committee. For STIP compensation, the performance criteria is based on the pre-tax profit for the Company's manufactured housing and financial services business segments. The STIP target for fiscal year 2022 is comprised of two components, allocated as follows: (1) 90% based on factory-built housing pre-tax profit; and (2) 10% based on financial services pre-tax profit. ForMr. Boor , the STIP compensation will be based entirely upon corporate performance measures. For Messrs. Dragash, Niño and Bigbee, the STIP compensation will be based upon a mixture of corporate performance measures and individual performance objectives as approved by the Committee in coordination withMr. Boor regarding the individual performance objectives. The threshold, target and maximum STIP payouts for each individual are equal to as follows: Percentage of Base Salary Threshold Target Maximum William C. Boor 60.0% 120.0% 240.0% Mickey R. Dragash 42.0% 70.0% 84.0% Matthew A. Niño 12.5% 25.0% 37.5% Paul W. Bigbee 12.5% 25.0% 37.5% In addition,Mr. Nino , President ofPalm Harbor Villages, Inc. , has the opportunity to receive 0.5% of pre-tax earnings for that business unit.Mr. Zeller's STIP program is at the discretion of the President and CEO of the Company and he is eligible to receive 5% of pre-tax income for the financial operation he oversees. -------------------------------------------------------------------------------- Long-Term Equity Incentive Compensation Under the equity-based program, or Long-Term Incentive Plan ("LTIP"), established by the Committee for fiscal year 2022, certain officers are entitled to receive equity-based awards under theCavco Industries, Inc. , 2005 Stock Incentive Plan. The Committee awarded time-based restricted stock units ("RSUs") and performance-based restricted stock units ("PRSUs") under the LTIP as set forth in the table below: Time-Based RSUs PRSUs Grant Date Value Number of RSUs Grant Date Number of PRSUs(1) Value William C. Boor$ 957,668 4,500$ 957,668 4,550 Mickey R. Dragash 125,964 600 125,964 600 Matthew A. Niño 52,485 250 52,485 250 Paul W. Bigbee 52,485 250 52,485 250 (1) Number of PRSUs achieved assumes "target" level of performance. The time-based RSUs will vest in three equal annual installments on the first, second and third anniversaries of the date of grant, provided that the officer is employed by the Company on each vesting date. Each PRSU will vest and be settled through the issuance of a share of the Company's common stock upon achievement of the targets set by the Committee as described below. No PRSU will vest for each respective component for performance below the threshold level. The number of PRSUs awarded to each officer is allocated equally among three (3) performance measures with each measured separately as follows: (i) relative total shareholder return benchmarked against a peer group as approved by the Committee; (ii) market share expansion; and (iii) manufacturing labor efficiency. The Committee has established threshold, target and maximum levels for achievement by the Company during the period beginningApril 4, 2021 and endingMarch 30, 2024 . The achievement levels for each performance measure will be measured individually. The threshold, target and maximum LTIP payouts for the PRSUs for each officer are equal to the following: Percentage of PRSU Grant Date Value Threshold Target Maximum William C. Boor 50% 100% 200% Mickey R. Dragash 60% 100% 120% Matthew A. Niño 50% 100% 150% Paul W. Bigbee 50% 100% 150%
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