DEF 14A of Isabella Bank Corp
Filed Mar 25, 2024 · FY20230000842517-24-000065
Proposal 1 - Election of Directors
Proposal 1 - Election of Directors The Board of Directors (the “Board”) currently consists of twelve (12) members divided into three classes, with the directors in each class being elected for a term of three years. The Board decreased from 13 to 11 members in May of 2023 when G. Charles Hubscher and David J. Maness retired from the Board. The Board increased from 11 to 12 members with the appointment of Neil M. McDonnell, effective January 31, 2024. The Board will decrease from 12 to 11 members as Richard L. McGuirk will not stand for re-election at the Annual Meeting. At the Annual Meeting, Jill Bourland, Jae A. Evans, and Jerome E. Schwind, whose current terms expire at the Annual Meeting, have been nominated for election to serve through the 2027 Annual Meeting. Except as otherwise specified, proxies will be voted for the election of the three nominees. If a nominee becomes unable or unwilling to serve, proxies will be voted for such other person, if any, as shall be designated. However, we know of no reason to anticipate that this will occur. Each of the nominees has agreed to serve as a director if elected. Nominees and current directors, including their principal occupation for the last five or more years, age, and length of service as a director, are listed below. We recommend that you vote FOR the election of each of the nominees.
Director Qualifications
Director Qualifications Board members are highly qualified and represent your best interests. We select nominees who: •Have extensive business leadership. •Bring a diverse perspective and experience. •Are objective and collegial. •Have high ethical standards and have demonstrated sound business judgment. •Are willing and able to commit the significant time and effort to effectively fulfill their responsibilities. •Are active in and knowledgeable of their respective communities. Each nominee and current director possesses these qualities and provides a diverse complement of specific business skills and experience. In addition to the general qualifications described above, qualifications are included in the biographical summaries provided below. The following table identifies individual Board members serving on each of our standing committees:
Director Qualifications
| Director | Audit | Nominating and Corporate Governance | Compensation and Human Resource | | Sarah R. Opperman | Xo | Xo | Xo | | Dr. Jeffrey J. Barnes | | Xc | | | Jill Bourland | Xc | | X | | Melinda M. Coffin | X | | X | | Jae A. Evans | | | | | Thomas L. Kleinhardt | X | | X | | Neil M. McDonnell | | | | | Richard L. McGuirk | | X | | | Chad R. Payton | X | | Xc | | Vicki L. Rupp | | | | | Jerome E. Schwind | | | | | Gregory V. Varner | | X | | | C — Chairperson | | | | | O — Ex-Officio | | | |
Director Nominees for Terms Ending in 2027
Director Nominees for Terms Ending in 2027 Jill Bourland (age 53) has been a director of Isabella Bank Corporation and of the Bank since 2017. Ms. Bourland is CEO and Partner of Blystone & Bailey, CPAs, P.C. Ms. Bourland is a graduate of Central Michigan University, a Certified Public Accountant, and a Housing Credit Certified Professional. She has over 25 years of audit, tax and accounting experience with a concentration in small business and affordable housing sectors. She is a member of the William and Janet Strickler Nonprofit Center Board, and the Mid-Michigan Community College Foundation Board. She formerly served as President of the William and Janet Strickler Nonprofit Center, the Mt. Pleasant Area Community Foundation and also as Treasurer and Chair of its Finance Committee. She is involved with the Gratiot-Isabella Technical Education Center Accounting/Business Advisory Committee. She is also a member of the American Institute of Certified Public Accountants, Michigan Association of Certified Public Accountants, and Home Builders Association. Ms. Bourland has expertise in accounting, business experience and a strong commitment to community involvement. Jae A. Evans (age 67) has been a director of Isabella Bank Corporation and of the Bank since 2014. He was President and Chief Executive Officer of the Corporation from 2014 to January 2024 and Chief Executive Officer of the Bank from 2018 to January 2024. Mr. Evans served as Chief Operations Officer of the Bank from 2011 to 2013 and President of the Greenville Division of the Bank from 2008 to 2011. He is a graduate of Central Michigan University and has over 47 years of banking experience. Mr. Evans currently serves as a board member for United Bankers Bank, and the Central Michigan University Advancement Board. Mr. Evans is also past Chair of the EightCap, Inc. Governing Board, past Vice Chair of the Carson City Hospital, past board member of the McLaren Central Michigan Hospital, was president of the Greenville Rotary Club, and past Chair of The Community Bankers of Michigan. Mr. Evans provides the Board with executive leadership, knowledge of commercial banking, and strong community involvement. Jerome E. Schwind (age 57) has been a director of Isabella Bank Corporation and of the Bank since 2017. Mr. Schwind was appointed President and Chief Executive Officer of the Corporation and Chief Executive Officer of Isabella Bank effective January 5, 2024. He has over 30 years of banking experience and has been employed by the Bank since 1999, serving in various roles including President of the Bank and Vice President of the Corporation, Executive Vice President, and Chief Operations Officer. Mr. Schwind received his undergraduate degree from Ferris State University and his MBA from Lake Superior State University. He is also a graduate of the Dale Carnegie Executive Development program, the Graduate School of Banking at the University of Wisconsin-Madison, and the Rollie Denison Leadership Institute. Mr. Schwind is the past chair of the Michigan Bankers Association. He is the chair of the Middle Michigan Development Corporation, a member of the Finance Advisory Board for the Ferris State University College of Business, the Michigan Bankers Association Perry School of Banking Board, and Michigan Bankers Association Board. Mr. Schwind brings his experience in banking and his many years at Isabella Bank to the Board in addition to his knowledge of the markets we serve.
Current Director with Terms Ending in 2024
Current Director with Terms Ending in 2024 Richard L. McGuirk (age 52) has been a director of Isabella Bank Corporation and of the Bank since 2021. Mr. McGuirk is the President and Operations Manager of United Apartments and a management consultant for McGuirk Sand-Gravel, Inc. Mr. McGuirk is a graduate of Central Michigan University and is a licensed real estate broker in Michigan and Florida. He currently serves as a board member for the Central Michigan University Advancement Board, and is a past board member of the Mt. Pleasant Area Community Foundation. Mr. McGuirk has expertise in business, and a strong commitment to community involvement.
Current Directors with Terms Ending in 2025
Current Directors with Terms Ending in 2025 Thomas L. Kleinhardt (age 69) has been a director of the Bank since 1998 and of Isabella Bank Corporation since 2010. Mr. Kleinhardt is President of McGuire Chevrolet, active in the Clare Kiwanis Club, and the former coach of the girls Varsity Basketball team for both Farwell High School and Clare High School. Mr. Kleinhardt's years of experience in managing a successful automobile dealership and understanding the financing needs of customers are valuable to the Board. Neil M. McDonnell (age 60), was appointed a director of Isabella Bank Corporation and of the Bank effective January 31, 2024. Mr. McDonnell was appointed President of Isabella Bank effective January 5, 2024 after serving as the Chief Financial Officer since 2018. He has more than 30 years of banking experience and previously worked in the eastern United States in roles such as CFO, controller, treasurer, compliance and risk officer, and director of finance at large international banks, local community banks and de novo banks. He is a newly-elected member of the Board of Directors of Community Bankers of Michigan, a member of the Mid-Michigan Industries Board of Directors, and volunteers with Habitat for Humanity of Isabella County Finance Committee. Sarah R. Opperman (age 64) has been a director of Isabella Bank Corporation and of the Bank since 2012 and has served as chair of both boards since May 2021. Ms. Opperman previously was employed for 28 years by The Dow Chemical Company, where she held executive leadership roles in public and government affairs. She served as interim President and Chief Executive Officer of the Midland Business Alliance in 2018. Ms. Opperman is a member of the Central Michigan University Advancement Board, the Herbert H. and Grace A. Dow Foundation Board, and the Michigan Baseball Foundation Board. Ms. Opperman's business and leadership expertise, as well as her depth of community relationships, benefit Board discussions and decisions. Chad R. Payton (age 55) has been a director of Isabella Bank Corporation and of the Bank since 2021. Mr. Payton is a Certified Public Accountant and Partner of Roslund, Prestage & Company, PC, with over 30 years of tax and accounting experience. Mr. Payton is a member of the American Institute of Certified Public Accountants and Michigan Association of Certified Public Accountants. Mr. Payton's expertise in accounting and business experience are valuable to the Board. Gregory V. Varner (age 69) has been a director of Isabella Bank Corporation and of the Bank since 2015. Mr. Varner was the Research Director for the Michigan Bean Commission for 40 years and retired in 2019. He has advised both national and international dry bean research programs in the United States, Africa, and Central America. He received a Bachelor of Science in Agricultural Education and a Master of Science in Crop Science from Michigan State University. Mr. Varner's knowledge and years of experience in the agricultural field is an asset to the Board.
Current Directors with Terms Ending in 2026
Current Directors with Terms Ending in 2026 Dr. Jeffrey J. Barnes (age 61) has been a director of the Bank since 2007 and of Isabella Bank Corporation since 2010. Dr. Barnes is a physician at L.O. Eye Care. He is a former member of the Central Michigan Community Hospital Board of Directors. Dr. Barnes' experience in business operations and management, as well as knowledge of the communities we serve, benefit the Board. Melinda M. Coffin (age 49) has been a director of Isabella Bank Corporation and of the Bank since 2022. Ms. Coffin has been the CEO of Soaring Eagle Gaming Enterprises since October 2021. She received her undergraduate degree and MBA from Central Michigan University. Ms. Coffin's knowledge and experience in compliance and regulatory matters, as well as her community involvement, adds value to the Board. Vicki L. Rupp (age 64) has been a director of Isabella Bank Corporation and of the Bank since 2019. Ms. Rupp retired from The Dow Chemical Company after a successful thirty-five year career in various positions, including her final position of Corporate Director of Business Services. Her experience includes specialty research and development, environmental, health and safety, global corporate service management, mergers and acquisition implementation, and organizational management. Ms. Rupp owns her own consulting company, Vicki Rupp Consulting, for companies seeking operational improvements. She served on the Saginaw Valley State University Foundation Board and the Saginaw Valley State University Board of Control from 2014-2023, serving as Board Chair and Presidential Search Team Chair the last 2 years of her service. She currently serves on the Saginaw Valley State University Foundation Executive Committee. Ms. Rupp brings experience in operations and strategic development and a commitment to community service. Each of the directors has been engaged in their stated professions for more than five years unless otherwise stated.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and principal position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Change in pension value and nonqualified deferred compensation earnings ($)(4) | All other compensation ($)(5) | Total ($) | | Jae A. Evans | 2023 | 504,500 | 134,400 | — | 36,863 | 56,087 | 731,850 | | President and CEO of Isabella Bank Corporation and CEO of Isabella Bank | 2022 | 478,250 | 130,500 | 89,600 | 168 | 54,171 | 752,689 | | Neil M. McDonnell | 2023 | 301,300 | 49,130 | — | 3,331 | 39,636 | 393,397 | | CFO of Isabella Bank Corporation and Isabella Bank | 2022 | 289,000 | 55,137 | 36,125 | 11 | 35,146 | 415,419 | | Jerome E. Schwind | 2023 | 382,066 | 68,093 | — | 9,465 | 49,395 | 509,019 | | President of Isabella Bank and Vice President of Isabella Bank Corporation | 2022 | 362,321 | 68,141 | 48,065 | (26,978) | 51,056 | 502,605 |
Summary Compensation Table
(1)Executive officer salary includes compensation voluntarily deferred under our 401(k) plan. Director fees are also included and are displayed in the following table for each of the last two years ended December 31, 2023:
Summary Compensation Table
| | Director fees ($) | | | Name | 2023 | 2022 | | Jae A. Evans | 34,500 | 30,250 | | Jerome E. Schwind | 34,500 | 30,250 |
Summary Compensation Table
(2)Includes payouts granted pursuant to the Isabella Bank Corporation Executive Cash Incentive Plan. (3)Includes shares granted pursuant to the Isabella Bank Corporation Restricted Stock Plan disclosed as the aggregate grant date fair value of the awards computed, in accordance with ASC Topic 718. (4)Includes the aggregate non-cash change in the actuarial present value of the noted executive's accumulated benefit under the Isabella Bank Corporation Pension Plan. (5)For all named executives, all other compensation includes 401(k) matching contributions and auto allowance.
Outstanding Equity Awards at Fiscal Year-End Table
Outstanding Equity Awards at Fiscal Year-End Table The following table provides information on the unvested shares of restricted stock pursuant to the Isabella Bank Corporation Restricted Stock Plan as of December 31, 2023:
Outstanding Equity Awards at Fiscal Year-End Table
| | | Stock awards | | | Name | Grant Date | Number of shares or units of stock that have not vested (#)(1) | Market value of shares or units of stock that have not vested ($)(2) | | Jae A. Evans | 2/16/2023(3) | — | — | | | 3/28/2022 | 3,583 | 77,035 | | | 4/1/2021 | 8,000 | 172,000 | | | 6/24/2020 | 2,427 | 52,181 | | Neil M. McDonnell | 2/16/2023(3) | — | — | | | 3/28/2022 | 1,444 | 31,046 | | | 4/1/2021 | 3,184 | 68,456 | | | 6/24/2020 | 952 | 20,468 | | Jerome E. Schwind | 2/16/2023(3) | — | — | | | 3/28/2022 | 1,922 | 41,323 | | | 4/1/2021 | 4,281 | 92,042 | | | 6/24/2020 | 1,279 | 27,499 |
Outstanding Equity Awards at Fiscal Year-End Table
(1)Shares of restricted stock are subject to a three-year vesting period from the date of issuance. (2)Based on the closing price of the Corporation's common stock as of December 31, 2023 which was $21.50. (3)Achievement of financial performance goals in connection to the stock awards were not met in 2023.
Pension Benefits
Pension Benefits Defined Benefit Pension Plan. We sponsor the Isabella Bank Corporation Pension Plan (“Defined Benefit Pension Plan”), a frozen defined benefit pension plan. The curtailment, which was effective March 1, 2007, froze the current participant’s accrued benefits as of that date and limited participation in the plan to eligible employees as of December 31, 2006. Due to the curtailment of the plan, the number of years of credited service was frozen. As such, the years of credited service for the plan may differ from the participant’s actual years of service. Annual contributions are made to the plan as required by accepted actuarial principles, applicable federal tax laws, and to pay expenses related to operating and maintaining the plan. The amount of contributions on behalf of any one participant cannot be separately or individually computed. Pension plan benefits are based on years of service and the employees’ five highest consecutive years of compensation out of the last ten years of service, through December 31, 2006. A participant may earn a benefit for up to 35 years of accredited service. Earned benefits are 100% vested after five years of service. Benefit payments normally start when a participant reaches age 65. A participant with more than five years of service may elect to take early retirement benefits anytime after reaching age 55. Benefits payable under early retirement are reduced actuarially for each month prior to age 65 in which benefits begin. Under the provisions of the plan, participants are eligible for early retirement after reaching the age of 55 with at least five years of service. The early retirement benefit amount is the accrued benefit payable at normal retirement date reduced by 5/9% for each of the first 60 months and 5/18% for each of the next 60 months that the benefit commencement date precedes the normal retirement date. Retirement Bonus Plan. We sponsor the Isabella Bank Corporation Retirement Bonus Plan (“Retirement Bonus Plan”). This nonqualified plan is intended to provide eligible employees with additional retirement benefits. To be eligible, the employee needed to be an employee on January 1, 2007, and be a participant in our frozen Executive Supplemental Income Agreement. Participants were also required to be an officer with at least 10 years of service as of December 31, 2006. We have sole and exclusive discretion to add new participants to the Retirement Bonus Plan by authorizing such participation pursuant to action of the Board. An initial amount was credited for each eligible employee as of January 1, 2007. Subsequent amounts have been credited on each allocation date thereafter as defined in the Retirement Bonus Plan. The amount of the initial allocation and the annual allocation shall be determined pursuant to the payment schedule adopted at our sole and exclusive discretion, as set forth in the Retirement Bonus Plan. Under the provisions of the Retirement Bonus Plan, participants are eligible for early retirement upon attaining 55 years of age. There is no difference between the calculation of benefits payable upon early retirement and normal retirement; however, the participant would not receive their full benefit under early retirement.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation Directors Plan. Under the Isabella Bank Corporation and Related Companies Deferred Compensation Plan for Directors (“Directors Plan”), directors, including named executive officers who serve as directors, are required to invest at least 25% of their board fees in our common stock and may invest up to 100% of their earned fees based on their annual election. These amounts are reflected in footnote 1 to the Summary Compensation Table. These stock investments can be made either through deferred fees or through the purchase of shares through the Isabella Bank Corporation Stockholder Dividend Reinvestment and Employee Stock Purchase Plan (“DRIP Plan”). Deferred fees, under the Directors Plan, are converted on a quarterly basis into stock units of our common stock based on the fair value of a share of our common stock as of the relevant valuation date. Stock units credited to a participant’s account are eligible for stock and cash dividends as paid. DRIP Plan shares are purchased pursuant to the DRIP Plan. Distribution of deferred fees from the Directors Plan occurs when the participant retires from the Board or upon the occurrence of certain other events. The participant is eligible to receive distributions in the form of shares of our common stock of all of the stock units that are then in his or her account, and any unconverted cash will be converted to and rounded up to a whole share of stock and distributed, as well. Any common stock issued from deferred fees under the Directors Plan will be considered restricted stock under the Securities Act of 1933, as amended. Common stock purchased through the DRIP Plan are not considered restricted stock under the Securities Act of 1933, as amended. SERP. Under the supplemental executive retirement plan (“SERP”), we may promise deferred compensation benefits to employees who are members of a select group of management or highly compensated employees, which may include the named executive officers. The SERP authorizes us to make annual and discretionary credits to a participant’s SERP account pursuant to a participation agreement with the participant that sets forth the amount and timing of any annual credits and the vesting, payment, “clawback” and other terms to which the credits are subject. The SERP provides default terms that may be modified by a participant’s participation agreement, including default vesting, interest and payment terms. Under the SERP’s default vesting terms, a participant is initially unvested in the participant’s SERP account and becomes 100% vested upon attaining normal retirement age, retirement, involuntary separation from service without cause, death, disability or a change in control. Special vesting rules apply to amounts that are credited after a change in control. Under the SERP’s interest rule, a participant’s account balance is credited with interest annually, the rate of which may be changed and is based on Federated Investor's Institutional Money Market Management Fund yield (MMPXX) for the current plan year, updated annually. Under the SERP’s default payment terms, a participant’s vested and nonforfeited account balance will be paid in a single cash lump sum within 90 days after the first to occur of the participant’s separation from service (subject to a six-month delay for a “specified employee”), death, disability, or any date specified in the participant’s participation agreement. The SERP also includes restrictive covenants that restrict a participant’s ability to compete with us and certain other activities. Executive Cash Incentive Plan. The Executive Cash Incentive Plan provides potential payouts for the President and CEO, Bank President, and CFO based on achievement of personal and corporate goals. The maximum potential payouts under the plan range from 22% to 35% of the employee's annual salary and are subject to “clawback” provisions. The Compensation and Human Resource Committee is responsible for establishing personal goals and measuring the achievement of personal goals for the President and CEO. This Committee also reviews the performance of the President and CEO. The President and CEO recommends to the Compensation and Human Resource Committee the measurement and achievement of personal and corporate goals for the Bank President and CFO. Restricted Stock Plan. The Isabella Bank Corporation Restricted Stock Plan ("RSP") is an equity-based bonus plan. The primary purpose of the plan is to promote our growth and profitability by attracting and retaining executive officers and key employees of outstanding competence through ownership of equity that provides them with incentives to achieve corporate objectives. The RSP authorizes the issuance of unvested restricted stock to an eligible employee with a maximum award ranging from 25% to 40% of the employee’s annual salary, on a calendar year basis. Under the RSP, the Board of Directors may grant restricted stock awards to eligible employees on an annual basis based on satisfactory achievement of performance targets and measures established by the Board of Directors. If these grant conditions are not satisfied, then the award of restricted shares will lapse or be adjusted appropriately, at the discretion of the Board of Directors. Restricted stock awards granted are not fully transferable or vested until certain conditions are met, as stated in the plan, and are subject to “clawback” provisions.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The estimated amounts payable to each named executive officer upon severance from employment, retirement, termination upon death or disability or termination following a change in control are described below. For all termination scenarios, the amounts assume such termination took place as of December 31, 2023.
Pay Versus Performance
Pay Versus Performance The following table presents certain information regarding compensation paid and certain financial performance measures in each of the last three years ended December 31, 2023, for the CEO and other NEOs as a group, as disclosed in the Summary Compensation table above.
Pay Versus Performance
| Year | Summary compensation table total for CEO ($) | Compensation actually paid to CEO ($)(1) | Average summary compensation table total for non-CEO NEOs ($) | Average compensation actually paid to non-CEO NEOs ($)(2) | Value of initial fixed $100 investment based on total shareholder return ($) | Net income (in thousands)($) | | 2023 | 731,850 | 703,830 | 451,208 | 438,146 | 127 | 18,167 | | 2022 | 752,689 | 726,436 | 459,012 | 446,772 | 131 | 22,238 | | 2021 | 777,058 | 821,451 | 529,998 | 550,607 | 136 | 19,499 |
Pay Versus Performance
(1)In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to total reported compensation for each year to determine the compensation actually paid:
Pay Versus Performance
| | | | Equity Award Adjustments | | | | Year | Summary compensation table total for CEO ($) | Reported Value of Granted Equity Awards ($) | Year end fair value of outstanding and unvested equity awards granted in the year ($) | Change in fair value of outstanding and unvested equity awards granted in prior years ($) | Compensation actually paid to CEO ($) | | 2023 | 731,850 | — | — | (28,020) | 703,830 | | 2022 | 752,689 | (89,600) | 84,201 | (20,854) | 726,436 | | 2021 | 777,058 | (174,000) | 204,000 | 14,393 | 821,451 |
Pay Versus Performance
(2)In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for each year to determine the compensation actually paid:
Pay Versus Performance
| | | | Equity Award Adjustments | | | | Year | Average summary compensation table total for non-CEO NEOs ($) | Reported Value of Granted Equity Awards ($) | Year end fair value of outstanding and unvested equity awards granted in the year ($) | Change in fair value of outstanding and unvested equity awards granted in prior years ($) | Average compensation actually paid to non-CEO NEOs ($) | | 2023 | 451,208 | — | — | (13,062) | 438,146 | | 2022 | 459,012 | (42,095) | 39,551 | (9,696) | 446,772 | | 2021 | 529,998 | (81,185) | 95,179 | 6,615 | 550,607 |
Director Compensation
Director Compensation The following table summarizes the compensation of each non-employee director who served on the Board during 2023.
Director Compensation
| Name | Fees paid in cash ($)(1) | Fees deferred under Directors Plan ($)(1) | Total fees earned ($)(2) | | Dr. Jeffrey J. Barnes | — | 46,483 | 46,483 | | Jill Bourland | 55,967 | — | 55,967 | | Melinda M. Coffin | — | 43,350 | 43,350 | | G. Charles Hubscher (3) | — | 19,217 | 19,217 | | Thomas L. Kleinhardt | — | 49,350 | 49,350 | | David J. Maness (3) | — | 16,683 | 16,683 | | Richard L. McGuirk | 33,638 | 11,212 | 44,850 | | Sarah R. Opperman | 59,500 | — | 59,500 | | Chad R. Payton | 48,283 | 6,000 | 54,283 | | Vicki L. Rupp | 6,550 | 44,800 | 51,350 | | Gregory V. Varner | 40,500 | 13,500 | 54,000 |
Director Compensation
(1) Directors electing to receive all fees in cash, resulting in no contributions to the Directors Plan, invest at least 25% of their board fees in our common stock under the DRIP Plan as described in our Directors Plan within the “Executive Officers” section. (2) Includes fees for the fourth quarter of 2022 as a result of a change in the director fee payment structure. (3) Retired from the Board effective May 9, 2023. We paid an annual retainer of $40,000 to each non-employee director and $30,000 to each employee director of the Board during 2023. The chairperson of the Board is paid an additional retainer of $15,000, the Audit Committee chair is paid an additional retainer of $8,000, the Nominating & Corporate Governance chair is paid an additional retainer of $1,000, and the chairperson of the Compensation & Human Resource Committee is paid an additional retainer of $4,000. Under the Directors Plan, upon a participant’s retirement from the Board, or the occurrence of certain other events, the participant is eligible to receive a distribution in the form of shares of our common stock of all of the stock units that are then credited to the participant's account. The plan does not allow for cash settlement. Stock issued under the Directors Plan is restricted stock under the Securities Act of 1933, as amended. We established a Rabbi Trust to supplement the Directors Plan. The Rabbi Trust is an irrevocable grantor trust to which we may contribute assets for the limited purpose of funding a nonqualified deferred compensation plan. Although we may not reach the assets of the Rabbi Trust for any purpose other than meeting our obligations under the Directors Plan, the assets of the Rabbi Trust remain subject to the claims of our creditors. We may contribute cash or common stock to the Rabbi Trust from time to time for the sole purpose of funding the Directors Plan. The Rabbi Trust will use any cash that we may contribute to purchase shares of our common stock on the open market. We transferred $1,461,971 to the Rabbi Trust in 2023, which held 150,581 shares of our common stock for settlement as of December 31, 2023. As of December 31, 2023, there were 3,538 stock units credited to participants’ accounts; such credits are unfunded as of such date to the extent that they are in excess of the stock and cash that has been credited to the Rabbi Trust. All amounts are unsecured claims against our general assets. The net cost of this benefit was $210,288 in 2023. The following table displays the cumulative number of stock units of our common stock credited to the accounts of current directors pursuant to the terms of the Directors Plan as of March 15, 2024:
Director Compensation
| Name | # of stock units credited | | Dr. Jeffrey J. Barnes | 28,241 | | Jill Bourland | 1,227 | | Melinda M. Coffin | 3,983 | | Jae A. Evans | 2,811 | | Thomas L. Kleinhardt | 49,000 | | Neil M. McDonnell (1) | — | | Richard L. McGuirk | 939 | | Sarah R. Opperman | 5,813 | | Chad R. Payton | 2,064 | | Vicki L. Rupp | 3,064 | | Jerome E. Schwind | 13,699 | | Gregory V. Varner | 18,527 |
Director Compensation
(1) Director appointment effective January 31, 2024.