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DALLAS, May 13, 2013 (GLOBE NEWSWIRE) -- PMFG, Inc. (the "Company") (Nasdaq:PMFG) today announced that its Board of Directors (the "Board") has or will implement several changes in the Company's governance and executive compensation-related practices. The changes resulted from the Board's evaluation of recent input from certain of the Company's stockholders, as well as various shareholder service organizations.
Effective May 8, 2013, Mr. Sherrill Stone, Chairman of the Board, ceased to be a member of the Company's Audit, Compensation, and Nominating and Corporate Governance Committees. Mr. Stone voluntarily resigned from the standing committees to address concerns raised by Institutional Shareholder Services, which designated him as an "Affiliated Outside Director" due to his former role as the Company's Chief Executive Officer. Mr. Stone will retain his role as Chairman of the Board and will continue to serve as a member of the Board.
The Board adopted a director resignation policy, under which a Board nominee receiving "For" votes of less than 50 percent of the votes cast in an uncontested election will be required to tender his or her resignation to the Board for consideration. The Board has the discretion to decline to accept such resignation and request that the director fulfill his or her Board term. In such event the Board would be required to disclose the reasons for such actions.
The Board, upon the recommendation of the Compensation Committee, agreed to make certain prospective changes to its executive compensation programs and practices intended to improve the alignment between the compensation practices and guidelines of the Company's executive officers and the interests of the stockholders. The changes include (i) double-trigger change of control provisions for stock awards; (ii) holding requirements for Company stock obtained under long-term incentive compensation plans; (iii) prohibiting hedging transactions; (iv) discouraging pledging of Company stock; (v) elimination of tax gross ups from all future employment agreements; and (vi) "clawback" policy addressing the recovery of certain incentive compensation following a restatement of the Company's financial statements.