Knife River Corporation, a nonmetallic mineral mining company, has implemented a new severance plan for its executive officers, effective August 20, 2024. The plan, known as the Change in Control Severance Plan (CIC Plan), will provide certain benefits to executives if their employment is terminated under specific conditions following a change in control of the company.
The CIC Plan applies to Knife River's current named executive officers, including President and CEO Brian R. Gray, Vice President and CFO Nathan W. Ring, Vice President and COO Trevor J. Hastings, Vice President, Chief Legal Officer, and Secretary Karl A. Liepitz, and Vice President of Administration Nancy K. Christenson.
Under the CIC Plan, if any of these officers are terminated by the company without cause or leave for good reason within two years after a change in control, they will receive a prorated target annual incentive for the year of termination, a multiple of their annual base salary plus target annual incentive, and a multiple of the annualized premium cost for continued healthcare coverage.
The severance multiple is set at three times for CEO Brian R. Gray and two times for the other executives mentioned. Moreover, the executives must sign a release of claims against the company and adhere to noncompetition, nonsolicitation, nondisparagement, and confidentiality covenants.
Furthermore, Knife River Corporation plans to modify its policy for employee equity awards, transitioning from a "single trigger" to a "double trigger" change in control vesting, starting with the 2025 Annual Equity Awards. This means that equity awards will not automatically vest upon a change in control; they will vest only if the grantee's employment is terminated under qualifying conditions after such a change.
This announcement was made in a filing with the Securities and Exchange Commission on Wednesday, August 21, 2024. The company's forward-looking statements indicate that actual results may differ from expectations, and the company does not commit to updating these statements unless required by law. This information is based on a press release statement.
In other recent news, Knife River Corporation has been in the spotlight following significant developments. BofA Securities raised its price target for the company to $99 from $87, retaining a Buy rating, citing the firm's strong performance. Knife River's earnings per share of $1.37 surpassed the consensus of $1.24, even as revenues aligned with projections.
In addition, the company's backlog stands robust at $989 million, predominantly supported by public funding. This, combined with the pending allocation of a significant portion of the Infrastructure Investment and Jobs Act (IIJA) funding and proposed legislation in 14 states, strengthens the demand for Knife River's services and materials.
Furthermore, Patricia Chiodo, a seasoned financial expert, has been appointed to Knife River's board of directors. Chiodo will serve on the company's Audit and Compensation committees, bringing valuable expertise from her roles as CFO of Verra Mobility (NASDAQ:VRRM) Corporation and RSC Holdings.
Analyst firm DA Davidson maintained its Buy rating on Knife River, raising the price target to $90 from $84, reflecting a strong first-quarter backlog, award activity, and an effective capital deployment strategy. The company's focus on price realizations across its product lines and margin progression in its Aggregates and Contracting Services divisions were also noted as key factors to watch in these recent developments.
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