def14a
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
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Filed by the Registrant þ |
Filed by a Party other than the Registrant o |
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Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
FEDERAL SIGNAL CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box): |
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined): |
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Proposed maximum aggregate value of transaction: |
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Total fee paid: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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Filing Party: |
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Date Filed: |
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1415 West 22nd Street
Oak Brook, Illinois 60523
Notice of Annual Meeting of Stockholders
To Be Held on April 24, 2007
To the Stockholders of
Federal Signal Corporation:
The Annual Meeting of Stockholders of Federal Signal Corporation
for the year 2007 will be held at the Embassy Suites Hotel,
707 E. Butterfield Road, Lombard, Illinois on Tuesday,
April 24, 2007, at 3:30 p.m., local time, for the
following purposes:
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1.
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To elect three (3) Class II directors;
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2.
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To elect one (1) Class III director;
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3.
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To ratify the appointment of Ernst & Young LLP as our
independent registered public accounting firm for 2007; and
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4.
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To transact such other business that may properly come before
the meeting or any adjournment(s) of such meeting.
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The Board of Directors has fixed the close of business on
February 26, 2007 as the record date for the meeting. This
means that if you owned shares of our common stock on that date,
you are entitled to receive this notice, and to vote at the
meeting or any adjournment(s) of the meeting.
A copy of our financial statements, our Annual Report to our
stockholders for the year ended December 31, 2006, and a
proxy statement and proxy card accompany this notice.
YOUR VOTE IS IMPORTANT! You are urged to vote as promptly as
possible in one of the following ways:
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Use the toll-free telephone number shown on your proxy
card;
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Go to the website address shown on your proxy card and vote
via the Internet; or
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Mark, sign, date and promptly return the enclosed proxy card
in the postage-paid envelope. Any proxy may be revoked at any
time prior to its exercise at the annual meeting.
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Instructions for voting are contained on the enclosed proxy
card.
By order of the Board of Directors,
Jennifer L. Sherman
Corporate Secretary
March 23, 2007
TABLE
OF CONTENTS
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1415 West 22nd Street
Oak Brook, Illinois 60523
Proxy Statement for Annual Meeting of Stockholders
To Be Held on April 24, 2007
GENERAL
INFORMATION
The Board of Directors of Federal Signal Corporation is
furnishing this proxy statement to you in order to solicit your
proxy for use at the Annual Meeting of Stockholders to be held
at the Embassy Suites Hotel, 707 E. Butterfield Road,
Lombard, Illinois on Tuesday, April 24, 2007 at
3:30 p.m., local time, and any adjournment(s) of such
meeting. The purpose of the Annual Meeting of Stockholders is:
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1.
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To elect three (3) Class II directors;
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2.
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To elect one (1) Class III director;
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3.
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To ratify the appointment of Ernst & Young LLP as our
independent registered public accounting firm for 2007; and
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4.
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To transact any other business that may properly come before the
meeting or any adjournment(s) of such meeting.
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This proxy statement, the notice of Annual Meeting and the
accompanying proxy card were first mailed to stockholders on or
about March 23, 2007.
By completing the enclosed proxy card, you can direct how your
shares are to be voted at the Annual Meeting (for example, you
can direct that your shares are to be voted for or
withheld from the vote for each nominee for
director). Each proxy will be voted as you direct on the proxy
card. If you do not complete the voting directions on the proxy
card (or with respect to any particular proposal), the persons
named in the proxy card will vote your shares for
each proposal (or the undirected proposal, as the case may be).
Solicitation
Costs
We will bear the costs of solicitation of proxies for the Annual
Meeting. Following the original solicitation of proxies by mail,
certain of our officers and regular employees may solicit
proxies by correspondence, telephone,
e-mail, or
in person, but will not receive any extra compensation for such
solicitation work. We will reimburse brokers and other nominee
holders for their reasonable expenses incurred in forwarding the
proxy materials to the beneficial owners.
Voting
Securities
You will be entitled to vote at the meeting only if you held
shares of our common stock of record at the close of business on
February 26, 2007. You will be entitled to one vote for
each share of common stock that you held in your name as of the
record date. On the record date, there were
47,964,022 shares of common stock issued and outstanding.
A majority of the outstanding shares, present in person or by
proxy, will constitute a quorum at the meeting. For purposes of
determining if a quorum is present, we will count all proxies
designated as withholding authority to vote for a
nominee or nominees or abstaining from any proposal
as shares represented at the meeting, but we will not count
broker non-votes as being present at the meeting. A
broker non-vote occurs when a nominee (such as
1
a broker) holding shares for a beneficial owner does not vote on
a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not
received instructions from the beneficial owner. We will count
abstentions as votes cast, but we will disregard broker
non-votes for the purpose of determining whether a proposition
has been approved.
Our By-Laws require a plurality of the votes cast for the
election of directors, which means that in the election of
Class II directors the three nominees with the highest vote
totals will be elected as Class II directors, and in the
election of the Class III director the nominee with the
highest vote total will be elected as a Class III director.
As a result, designations on your proxy card that you are
withholding authority for a nominee or nominees, and
broker non-votes with respect to shares held for
your benefit will not have an effect on the results of the vote
for the election of directors. The proposal to ratify the
appointment of Ernst & Young LLP as our independent
registered public accounting firm for 2007 will require the
affirmative vote of a majority of the votes cast upon this
proposal at the Annual Meeting. Because this proposal requires a
majority of the votes cast for approval, an abstention will have
the effect of a vote cast against the proposal.
Revocability
of Proxy
You may revoke your proxy at any time before it is voted by
filing a written notice of revocation or a later-dated proxy
card with our Corporate Secretary, or by attending the Annual
Meeting and voting your shares in person. Attendance alone at
the Annual Meeting will not revoke a proxy.
2
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of
February 26, 2007 with respect to beneficial ownership of
our common stock by:
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each person known by us to be the beneficial owner of more than
five percent of our common stock, which is our only class of
outstanding voting securities;
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each of our directors and director nominees;
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each of our executive officers named in the Summary Compensation
Table; and
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all directors and executive officers as a group.
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Amount and
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Percent of
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Nature of
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Outstanding
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Beneficial
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Common
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Name
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Ownership(1)
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Stock(2)
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Beneficial Owners of More Than
Five Percent of our Common Stock:
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Franklin Mutual Advisers, LLC
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4,351,725
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(3)
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9.07
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%
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101 John F. Kennedy Parkway
Short Hills, NJ 07078
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Dimensional Fund Advisors
L.P.
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2,526,867
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(4)
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5.27
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%
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1299 Ocean Avenue
Santa Monica, CA 90401
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Each Director and Named Executive
Officer and Directors and all Executive Officers as a Group:
(5,6)
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James C. Janning, Director
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41,145
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*
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Charles R. Campbell, Director
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59,333
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*
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Robert M. Gerrity, Director
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17,203
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*
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James E. Goodwin, Director
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5,337
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*
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Robert S. Hamada, Director
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16,336
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*
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Paul W. Jones, Director
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43,548
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*
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John F. McCartney, Director
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12,076
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*
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Brenda L. Reichelderfer, Director
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683
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*
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Robert D. Welding
Director, President and CEO
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525,508
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1.10
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%
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Stephanie K. Kushner
Vice President and CFO
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157,395
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*
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Marc F. Gustafson
President, Fire Rescue Group
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72,986
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*
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David R. McConnaughey
President, Safety and Security Systems Group
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32,251
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*
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Mark D. Weber
President, Environmental Solutions Group(7)
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90,595
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*
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Stephen C. Buck Former
President, Safety Products Group(8)
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231,139
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*
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All Directors and Executive
Officers as a Group (21 persons)
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1,533,593
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3.20
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%
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Totals include shares subject to stock options exercisable
within 60 days of February 26, 2007, as follows:
Mr. Janning, 23,895; Mr. Campbell, 24,416;
Mr. Gerrity, 9,916; Mr. Goodwin, 1,298;
Mr. Hamada, 9,916; Mr. Jones, 24,416;
Mr. McCartney, 1,595; Ms. Reichelderfer, 0;
Mr. Welding, 279,899; Ms. Kushner, 107,945;
Mr. Gustafson, 31,045; Mr. McConnaughey, 5,000;
Mr. Weber, 48,650; and Mr. Buck, 131,250; and all
directors and executive officers as a group, 815,768. Totals
also include shares of restricted stock awarded pursuant to our
benefit plans which are subject to certain restrictions under
the plans, as follows: Mr. Janning, 4,537;
Mr. Campbell, 1,870; Mr. Gerrity, 1,870;
Mr. Goodwin, 1,255; Mr. Hamada, 1,870; Mr. Jones,
1,870; Mr. McCartney, 1,460; Ms. Reichelderfer, 263;
Mr. Welding, 147,700; Ms. Kushner, 32,875;
Mr. Gustafson, 35,800; Mr. McConnaughey, 27,100;
Mr. Weber, 26,875; and Mr. Buck, 0. Totals also
include shares held in our 401(k) plan, as follows:
Mr. Welding, 409; Ms. Kushner, 848;
Mr. Gustafson, 624; Mr. McConnaughey, 0;
Mr. Weber, 6,194; and Mr. Buck, 0. Totals do not
include shares held in our Rabbi Trust, as follows: |
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Mr. Hamada, 2,667; Ms. Kushner, 7,446; Mr. Weber,
251; and all directors and executive officers as a group, 10,364. |
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Based upon 47,964,022 shares of common stock issued and
outstanding as of February 26, 2007 and, for each director
or executive officer or the group, the number of shares subject
to stock options exercisable by such director or executive
officer or the group within 60 days of February 26,
2007. The use of * denotes percentages of less than
1%. |
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Based on a Schedule 13G/A filed on January 31, 2007,
with the Securities and Exchange Commission, in which the
stockholder reported that as of December 31, 2006, it had
sole voting and dispositive power over all these shares in its
capacity as an investment adviser to investment companies
registered under the Investment Company Act of 1940 and other
managed accounts. Franklin Mutual Advisers, LLC disclaims
beneficial ownership of these shares. |
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Based on a Schedule 13G filed on February 9, 2007,
with the Securities and Exchange Commission, in which the
stockholder reported that as of December 31, 2006, it had
sole voting and dispositive power over all these shares in its
capacity as an investment adviser to investment companies
registered under the Investment Company Act of 1940 and other
managed accounts. Dimensional Fund Advisors L.P. disclaims
beneficial ownership of these shares. |
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The information contained in this portion of the table is based
upon information furnished to us by the named individuals above
and from our own records. Except as set forth in the following
footnotes, each director and officer claims sole voting and
investment power with respect to the shares listed beside his or
her name. |
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All of our directors and officers use our Company address which
is 1415 W. 22nd Street, Suite 1100, Oak Brook, IL
60523. |
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Includes 582 shares held by Mr. Webers wife. |
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Includes 33,289 shares held by Mr. Bucks wife
and children and 3,207 shares held as collateral on a home
equity loan. Mr. Buck ceased being an executive officer on
March 6, 2006. |
PROPOSALS 1
AND 2 ELECTION OF DIRECTORS
Our Companys Board of Directors consists of nine directors
divided into three classes. Each class is elected for a term of
three years, and the classes together are staggered so that one
class term expires each year. Existing directors are granted the
power to fill a vacancy that occurs on the Board, and any
director so elected is entitled to serve until the next
regularly scheduled annual meeting of stockholders. Brenda L.
Reichelderfer was elected to the Board in October 2006 as a
Class III director to fill a vacancy on the Board. As such,
pursuant to our Companys Corporate Governance Guidelines,
Ms. Reichelderfer is being submitted by the Board of
Directors for election at this Annual Meeting, which constitutes
the first regularly scheduled annual meeting of stockholders
following her appointment to the Board.
John F. McCartney, Robert M. Gerrity, and Robert S. Hamada are
each nominated as a Class II director for election at this
Annual Meeting for a term of three years to expire at the 2010
Annual Meeting or until his successor is elected and qualified.
At its December 2006 meeting, the Board of Directors granted a
waiver from the age 68 restriction on standing for
reelection to Messrs. Gerrity and Hamada due to the desire
for continuity and the specialized skill sets and business
experiences these individuals contribute to the Board. The Board
of Directors recommends a vote for the election of
Messrs. McCartney, Gerrity, and Hamada as Class II
directors. Ms. Reichelderfer is nominated as a
Class III director for election at this Annual Meeting for
a term of one year to expire at the 2008 Annual Meeting or
until her successor is elected and qualified. The Board of
Directors recommends a vote for the election of
Ms. Reichelderfer.
If on account of death or unforeseen contingencies a nominee is
not available for election, the persons named in the proxy will
vote the proxy for such other person(s) as the Nominating and
Governance Committee may nominate as directors so as to provide
a full board. In the election of the three Class II
directors, the nominees receiving the highest number of votes
cast will be elected as Class II directors. In the election
of the Class III director, the nominee receiving the
highest number of votes cast will be elected as a Class III
director.
4
Information regarding the nominees for election and the
directors continuing in office is set forth below:
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Year First
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Year Present
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Principal Occupation
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Became
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Term
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or Employment for
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Name
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Director
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Expires
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Last Five Years(1)
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Class II
Nominees:
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John F. McCartney
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54
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2005
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2007
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Mr. McCartney is currently
Chairman of Westcon Group, Inc., a specialty distributor of
networking and communications equipment. Mr. McCartney is
also the Chairman of A.M. Castle & Co., a specialty
steel products distributor that is traded on the American Stock
Exchange (AMEX:CAS). Mr. McCartney was the Vice-Chairman of
Datatec Limited, a technology holding company, from 1998 to
2004. Mr. McCartney also serves on the Board of Directors
of Huron Consulting Group Inc., a financial consulting company
that is traded on the NASDAQ (NASDAQ:HURN).
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Robert M. Gerrity
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69
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2003
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2007
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Mr. Gerrity is a director and a
principal in Gerrity Partners, a consulting business. He is also
Chairman of the Industrial Products Group of Glencoe Capital, a
private equity firm. He is a director of Standard Motor
Products, Inc., an auto parts company that is traded on the New
York Stock Exchange (NYSE:SMP); Rimrock Corporation, a supplier
of automation products and integration services; and Polyair
Inter Pack Inc., a manufacturer and distributor of protective
packaging products that is traded on the Toronto Stock Exchange
(PRK:TO).
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Robert S. Hamada
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69
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2003
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2007
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Mr. Hamada is the Edward Eagle
Brown Distinguished Service Professor of Finance Emeritus and
Dean Emeritus, University of Chicago Graduate School of
Business, following his retirement in 2003. Mr. Hamada is
also a consultant for Hamada Management Consulting. He is
currently a director of A.M. Castle & Co., a specialty
steel products distributor that is traded on the American Stock
Exchange (AMEX:CAS).
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Class III
Nominee:
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Brenda L. Reichelderfer
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48
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2006
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2007
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Ms. Reichelderfer has served as a
Senior Vice President (since 2001) and Chief Technology Officer
(since 2005) of ITT Corporation, a global engineering and
manufacturing company that is traded on the New York Stock
Exchange (NYSE:ITT).
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Continuing Directors:
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Class I
Directors:
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James E. Goodwin
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62
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2005
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2009
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Mr. Goodwin is currently an
independent business consultant. From March 1998 to October
2001, Mr. Goodwin served as Chairman and Chief Executive
Officer of United Airlines that is traded on the NASDAQ
(NASDAQ:UAUA). Mr. Goodwin is also a member of the Board of
Directors of AAR Corp., a manufacturer of products for the
aviation/aerospace industry that is traded on the New York Stock
Exchange (NYSE:AIR); DBS Communications; and First Chicago
Bank & Trust.
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Year First
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Year Present
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Principal Occupation
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Became
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or Employment for
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Director
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Expires
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Last Five Years(1)
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James C. Janning
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59
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1999
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2009
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Mr. Janning is Group President of
Harbour Group, a diversified holding company, and has held
various executive positions at Harbour Group since 1987.
Mr. Janning is also a director of Menasha Corporation,
which assists businesses with packaging and product promotions.
He is also a director and Chairman of Menasha Forest Products
Corporation, which provides forest management and logging
services to timberland owners.
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Robert D. Welding
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58
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2003
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2009
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Mr. Welding was appointed
President and Chief Executive Officer of our Company and elected
to the Board of Directors in December 2003. Prior to joining our
Company, Mr. Welding was Executive Vice President of
BorgWarner Inc., a U.S. automotive parts supplier, that is
traded on the New York Stock Exchange (NYSE:BWA) and Group
President of its Driveline Group automotive parts businesses.
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Class III
Directors:
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Charles R. Campbell
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67
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1998
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2008
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Mr. Campbell is a retired
consultant in The Everest Group, a management consulting firm.
He was a partner in The Everest Group from 1997 to 2004.
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Paul W. Jones
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58
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1998
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2008
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Mr. Jones is Chairman, Chief
Executive Officer and a director of A.O. Smith Corporation, a
manufacturer of water heating systems and electric motors, that
is traded on the New York Stock Exchange (NYSE:AOS).
Mr. Jones was President and Chief Operating Officer of A.O.
Smith Corporation from January 2004 until January 2006.
Mr. Jones retired in November 2002 as Chairman, President
and Chief Executive Officer of U.S. Can Corporation, a
manufacturer of steel and plastic containers that is traded on
the New York Stock Exchange (NYSE:BLL), positions he had held
since April 1998. Mr. Jones is also a director of Bucyrus
International, Inc., a manufacturer of farm and construction
machinery that is traded on the NASDAQ (NASDAQ:BUCY).
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(1) |
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The data contained in this table is based upon information
furnished to our Company by the individuals named above. |
INFORMATION
CONCERNING THE BOARD OF DIRECTORS
Independence
of Members of the Board of Directors
The Board of Directors has determined that all of our directors,
except Robert D. Welding, qualify as independent directors. In
making this determination, the Board of Directors considered the
rules of the New York Stock Exchange and the Securities and
Exchange Commission, and reviewed information provided by the
directors in questionnaires and other certifications concerning
the relationships that we may have with each director (including
each directors immediate family members and other
associates), including any charitable contributions that we may
have made in the past
and/or
continue to make to organizations with which such director is
affiliated.
6
Meetings
of the Board of Directors and Committees
During 2006, our Board of Directors held a total of seven
meetings. The Compensation and Benefits Committee held six
meetings; the Nominating and Governance Committee held five
meetings; the Audit Committee held eight meetings; and the
Executive Committee held one meeting. Our By-Laws require each
director to regularly attend meetings of the Board of Directors
and of all Board Committees upon which the director serves. Each
director attended at least 75 percent of the meetings of
the Board and of each Committee of which he or she was a member.
In addition, all of our directors attended our 2006 Annual
Meeting of Stockholders.
Committees
of the Board of Directors
Pursuant to our By-Laws, we have established standing Audit,
Nominating and Governance, Compensation and Benefits, and
Executive Committees.
Audit Committee. The Audit Committee of the
Board of Directors is responsible for monitoring:
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the integrity of our financial statements;
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the qualifications and independence of our independent
registered public accounting firm;
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the performance of our internal audit function and independent
registered public accounting firm; and
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our compliance with legal and regulatory requirements, including
our Code of Business Conduct for all employees and Code of
Ethics for the Chief Executive Officer and senior financial
officers.
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In fulfilling its role, the Audit Committee reviews the design
and operation of internal control processes and the manner in
which we control our major financial risk exposures. The Audit
Committee has direct and regular access to our financial
executives, including the internal auditor, the Chief Financial
Officer, and the independent registered public accounting firm.
The Audit Committee has the sole authority to appoint or replace
our independent registered public accounting firm, and is
directly responsible for overseeing the work of and determining
the appropriate compensation for our independent registered
public accounting firm. In addition, the Audit Committee
considers and approves the performance of non-audit services by
our independent registered public accounting firm, taking into
consideration the effect that the performance of these services
may have upon the independence of the independent registered
public accounting firm.
Our By-Laws prohibit a director who is also an employee of our
Company from serving on the Audit Committee. The Board of
Directors has determined that all of the members of the Audit
Committee are independent as defined under the applicable New
York Stock Exchange and Securities and Exchange Commission
rules. The members of the Audit Committee are Charles R.
Campbell (Chairman), Robert M. Gerrity, James E.
Goodwin, and Robert S. Hamada. The Board of Directors has
determined that Mr. Campbell qualifies as an audit
committee financial expert as defined by the Securities
and Exchange Commission. None of the Audit Committee members
serves on more than three public companies audit
committees (including our Company).
The Board of Directors has adopted a Charter for the Audit
Committee to comply with the requirements of the New York Stock
Exchange and the Sarbanes-Oxley Act of 2002, a copy of which is
available on our website at http://www.federalsignal.com.
Nominating and Governance Committee. The
Nominating and Governance Committee is responsible for
recommending guidelines to the Board of Directors for corporate
governance, including the structure and function of our Board of
Directors, its Committees and the management of our Company, as
well as identification and recommendation to the Board of
Directors of candidates to be elected as directors.
Stockholders can nominate candidates for election as directors
at stockholder meetings by giving at least 30 days advance
written notice to our Corporate Secretary along with the
following information with respect to the nominee: name, age,
business and residence addresses, principal occupation or
employment, the number of shares of our common stock
beneficially owned by the stockholder(s) nominating such
nominee, and a consent by the nominee to serve as a director if
elected that would be required for a nominee under the
Securities and Exchange Commission rules. The Committee has not
adopted any specific procedures for considering the
recommendation of
7
director nominees by stockholders, but will consider stockholder
nominees for new directorship on the same basis as other
nominees.
The Committee has set no specific minimum qualification for a
nominee to the Board of Directors, but in evaluating a candidate
the Committee considers the current
make-up of
the Board of Directors, the skills and business experience of
the particular nominee, and the potential value the nominee
would add to the Board of Directors. The Board of Directors has
determined that all of the members of our Nominating and
Governance Committee are independent as defined under the
applicable New York Stock Exchange rules. The members of the
Nominating and Governance Committee are Robert S. Hamada
(Chairman), James C. Janning, Robert M. Gerrity, and
Brenda L. Reichelderfer. Ms. Reichelderfer was
appointed to the Nominating and Governance Committee effective
December 12, 2006.
The Board of Directors has adopted a Charter for the Nominating
and Governance Committee to comply with the requirements of the
New York Stock Exchange and the Sarbanes-Oxley Act of 2002, a
copy of which is available on our website at
http://www.federalsignal.com.
Compensation and Benefits Committee. The
Compensation and Benefits Committee is responsible for the
establishment and oversight of our Companys compensation
and benefits philosophy. With respect to our executive officers,
the Committee has the authority to establish the objectives of
compensation, to determine the components of compensation, and
to establish and evaluate performance goals. The Board of
Directors has determined that all of the members of our
Compensation and Benefits Committee are independent as defined
under the applicable New York Stock Exchange rules. The members
of the Compensation and Benefits Committee are John F.
McCartney (Chairman), Charles R. Campbell, and Paul W.
Jones. Mr. Jones resigned the position of Chairman on
December 11, 2006, and Mr. McCartney became Chairman
on December 12, 2006.
Executive Committee. The Executive Committee
generally exercises the power and authority of the Board in the
intervals between full Board meetings. The members of the
Executive Committee are Robert D. Welding (Chairman),
Robert S. Hamada, John F. McCartney, Charles R.
Campbell and James C. Janning. Mr. Jones resigned from the
Executive Committee on December 12, 2006, and
Mr. McCartney joined the Executive Committee on
December 12, 2006.
The Board of Directors has adopted a Charter for the
Compensation and Benefits Committee to comply with the
requirements of the New York Stock Exchange and the
Sarbanes-Oxley Act of 2002, a copy of which is available on our
website at http://www.federalsignal.com.
Director
Compensation in the Last Fiscal Year
The following table sets forth information concerning
compensation earned by our non-employee directors in fiscal year
2006. Mr. Weldings compensation for 2006 is disclosed
in the Summary Compensation Table for executive officers because
he is a named executive officer for purposes of this proxy
statement and does not receive additional compensation for his
service as a director:
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Fees Earned
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or Paid
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Stock Awards
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Option Awards
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All Other
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Name
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in Cash ($)(1)
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($)(2)
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($)(3)
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Compensation ($)
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Total ($)
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James C. Janning
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$97,750
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$33,009
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$23,256
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$154,015
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Charles R. Campbell
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$66,000
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$10,413
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$20,402
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$96,815
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Robert M. Gerrity
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$60,000
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$10,413
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$23,882
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$94,295
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James E. Goodwin
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$55,000
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$6,248
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$15,463
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$76,711
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Robert S. Hamada
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$66,000
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$10,413
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$23,882
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$100,295
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Paul W. Jones
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$56,750
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$10,413
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$20,402
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$87,565
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John F. McCartney
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$52,250
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$7,163
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$17,049
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$76,462
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Brenda L. Reichelderfer
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$13,500
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$256
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$2,044
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$15,800
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8
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(1) |
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Includes the following share amounts which were awarded in lieu
of fees: Mr. Gerrity, 1,879 shares received in lieu of
$29,750 in cash fees; Mr. Goodwin, 1,707 shares
received in lieu of $27,500 in cash fees; Mr. Hamada,
2,048 shares received in lieu of $33,000 in cash fees;
Mr. McCartney, 3,244 shares received in lieu of the
entire amount of his cash fees of $52,250;
Ms. Reichelderfer, 420 shares received in lieu of
$6,750 in cash fees. |
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Reflects the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended December 31,
2006 in accordance with SFAS FAS 123(R) and includes
amounts from awards granted in and prior to 2006. The following
awards were granted to the directors on April 25, 2006:
1,312 restricted stock award shares to Mr. Janning; 1,050
restricted stock award shares to each of Mr. Campbell,
Mr. Gerrity, Mr. Goodwin, Mr. Hamada,
Mr. Jones, and Mr. McCartney. Ms. Reichelderfer
was granted 263 restricted stock award shares on
October 24, 2006. As of December 31, 2006 each
director had the following aggregate number of unvested
restricted shares: Mr. Janning, 4,537 shares;
Mr. Campbell, 1,870 shares; Mr. Gerrity,
1,870 shares; Mr. Goodwin, 1,255 shares;
Mr. Hamada, 1,870 shares; Mr. Jones,
1,870 shares; Mr. McCartney, 1,460 shares;
Ms. Reichelderfer, 263 shares. |
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Reflects the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended December 31,
2006 in accordance with SFAS FAS 123(R), and includes
amounts from awards granted in and prior to 2006. The following
options were granted to the directors on April 25, 2006 at
an exercise price of $19.05: 3,671 stock option award shares to
Mr. Janning; 2,397 stock option award shares to each of
Mr. Campbell, Mr. Gerrity, Mr. Goodwin,
Mr. Hamada, Mr. Jones, and Mr. McCartney.
Ms. Reichelderfer received two awards on October 24,
2006 of 5,000 and 900 stock option shares, respectively. As of
December 31, 2006, each director had the following number
of options outstanding: Mr. Janning, 32,177;
Mr. Campbell, 31,842; Mr. Gerrity, 17,342;
Mr. Goodwin, 8,893; Mr. Hamada, 17,342;
Mr. Jones, 31,842; Mr. McCartney, 9,785;
Ms. Reichelderfer, 5,909. |
Additional
Information About Director Compensation
In 2006, directors (other than the Chairman of the Board) who
are not officers of our Company were entitled to receive an
annual retainer of $40,000, a $1,000 fee for each Board meeting
attended in person and $500 for each Board meeting attended by
telephone. Non-employee directors also are entitled to receive
the following annual retainers for Committee membership: Audit:
Chairman $12,000, Member $9,000;
Compensation and Benefits: Chairman $9,000,
Member $6,000; Nominating and Governance:
Chairman $9,000, Member $6,000;
Executive: $2,000. Directors were also reimbursed for their
expenses relating to attendance at meetings. Upon election, each
non-employee director receives an initial stock option grant to
purchase 5,000 shares of our common stock. Pursuant to our
director stock ownership program, each non-employee director who
does not own shares of our common stock equal in value to at
least three times the annual retainer paid to non-employee
directors is required to receive at least 50% of annual fees
earned in any given year in stock awards.
For 2006, the total equity compensation to each non-employee
director was comprised of equity awards equivalent to
approximately $40,000, which amount was split equally between
stock awards and stock options. The stock awards and stock
options have a three year pro-rata vesting schedule. Except for
Ms. Reichelderfer, the stock award portion of the equity
award was awarded on the date of our 2006 Annual Meeting of
Stockholders, April 25, 2006, and each award value has been
calculated based on the closing price of our common stock on
such date, which was $19.05 per share. For 2006, the stock
award portion of the equity award to each non-employee director
was 1,050 shares of common stock. The stock option portion
of the equity award was comprised of a stock option grant of
2,937 shares of common stock having a value of
approximately $20,000 based on a Black-Scholes calculated value,
in accordance with the requirements of SFAS 123(R). The
options have an exercise price equal to $19.05 per share,
the closing market price of the common stock on April 25,
2006. Because Ms. Reichelderfer was appointed to the Board
in 2006, she received equity awards pro-rata in proportion to
the number of days served on the Board during 2006. The awards
to Ms. Reichelderfer were made on October 24, 2006
when the closing price of our common stock on such date was
$15.50 per share.
For his service as Chairman of the Board in 2006,
Mr. Janning was entitled to receive an annual retainer of
$70,000, a $2,000 meeting fee for each Board meeting attended in
person, $500 for each Board meeting attended by telephone, and a
per diem fee for the other time spent on Company business of
$2,500 (up to a maximum of $150,000 per year). For 2006,
the Chairman received a total of $97,750 in fees consisting of
the $70,000 retainer,
9
Committee membership fees of $8,000, $11,000 in meeting fees,
and total per diem fees of $8,750. The Chairman also received an
additional $10,000 of equity compensation, which amount was
split equally between stock awards and stock options. The stock
option portion of the equity award was made on April 25,
2006 and was comprised of a stock option grant for the number of
shares of common stock having a value of approximately $25,000,
based on a Black-Scholes calculated value, with an exercise
price equal to the closing market price of the common stock on
April 25, 2006. This amounted to a stock award of
1,312 shares of common stock, and a stock option grant of
3,671 shares of common stock with an exercise price of
$19.05 per share.
CORPORATE
GOVERNANCE, BUSINESS CONDUCT, AND CODE OF ETHICS
We are committed to good corporate governance. We believe that
the foundation of our corporate governance is the independence
of our directors, responsible corporate citizenship, and a
commitment to the interests of our stockholders. In accordance
with the requirements of the New York Stock Exchange and the
Sarbanes-Oxley Act of 2002, our Board of Directors has adopted
Corporate Governance Guidelines as well as charters for the
Nominating and Governance Committee, the Compensation and
Benefits Committee and the Audit Committee. These guidelines and
charters, as well as the Business Conduct Policy and the Code of
Ethics, are available for review on our website. In addition,
the guidelines and charters are available in print to any
stockholder who requests them in writing from our Corporate
Secretary at the address provided below. We timely submitted our
annual certification by the Chief Executive Officer to the New
York Stock Exchange within 30 days of our Annual Meeting of
Stockholders in 2006. The certification stated our compliance
with the New York Stock Exchanges corporate governance
listing standards without qualification.
The non-employee directors of the Board meet regularly in
executive session without management. The Chairman of the Board
of Directors acts as the presiding director of such executive
sessions. Directors may be contacted as a group, by Committee or
individually, and the presiding director or the non-employee
directors as a group may be contacted on an anonymous
and/or
confidential basis by addressing a letter to Federal Signal
Corporation, 1415 West 22nd Street, Suite 1100, Oak
Brook, IL 60523, Attn: Corporate Secretary. All such letters
will be forwarded to the directors. We encourage our directors
to attend the Annual Meeting of Stockholders. All of our
directors attended the 2006 Annual Meeting of Stockholders.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
There were no compensation committee interlocks or insider
participation on the part of the members of our Compensation and
Benefits Committee. The members and functions of the
Compensation and Benefits Committee are set forth above under
Committees of the Board of Directors.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
During the year ended December 31, 2006, it was determined
that none of our directors, nominees for director, or executive
officers engaged in a transaction with us in which such
director, nominee for director or executive officer had a direct
or indirect material interest which required disclosure under
applicable Securities and Exchange Commission rules.
We maintain various policies and procedures relating to the
review, approval or ratification of transactions in which our
Company is a participant and in which any of our directors,
executive officers, 10% stockholders (if any) or their family
members have a direct or indirect material interest. Our Company
Policy for Business Conduct, which is available on our website
at http://www.federalsignal.com, prohibits our directors and
employees, including our executive officers, and in some cases,
their family members, from engaging in specified activities
without prior written consent. These activities typically relate
to situations where a director, executive officer or employee,
and in some cases, an immediate family member, may have
significant financial or business interests in another company
competing with or doing business with our Company, or who stands
to benefit in some way from such a relationship or activity.
10
Each year, we require our directors and executive officers to
complete a questionnaire which identifies, among other things,
any transactions or potential transactions with the Company in
which a director or an executive officer or one of their family
members or associated entities has an interest. We also require
that directors and executive officers notify our Corporate
Secretary of any changes during the course of the year to the
information provided in the annual questionnaire as soon as
possible. In addition, the Audit Committee of our Board of
Directors, pursuant to its charter and our Company Policy for
Business Conduct, has responsibility for reviewing and
approving, ratifying or making recommendations to our Board of
Directors regarding related person transactions.
We believe that the foregoing policies and procedures
collectively ensure that all related person transactions
requiring disclosure under applicable Securities and Exchange
Commission rules are appropriately reviewed.
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
Philosophy and Objectives
Our executive compensation and benefits programs are designed to
drive and reinforce our business goals and strategies for
success in the marketplace and to enable growth. As a key
component of our executive compensation system, we have adopted
a value-based management philosophy designed to develop a
culture that emphasizes entrepreneurship, innovation and
creativity, and rewards managers and employees who think and act
like owners. This program also encourages collaboration and the
maximization of long-term shareholder value, which in turn
supports the attraction, motivation, and retention of the best
global talent. Our executive compensation philosophy can be
summarized as follows:
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To attract, motivate, and retain highly experienced executives
who are vital to our short and long-term success, profitability,
and growth;
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To create alignment between compensation and business
performance by rewarding executives for the achievement of
strategic and tactical goals that successfully drive growth in
shareholder value for our Company;
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To differentiate executive rewards based on actual performance;
and
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To provide targeted compensation levels that are consistent with
the 50th percentile of competitive market practice for base
salary, the 50th percentile for annual incentives, and the
50th percentile for long-term incentives.
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Role of
our Compensation and Benefits Committee
Our Compensation and Benefits Committee establishes and oversees
our general compensation and benefits program, and approves
compensation and benefits for our executive officers.
Specifically, our Compensation and Benefits Committee is charged
in its charter with the authority and responsibility to:
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Establish the philosophy and set the broad objectives of our
executive compensation program to ensure that the compensation
program complies with and promotes our goals and objectives;
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Determine the various elements of the executive compensation
program, including base salary, annual incentive awards,
long-term incentive compensation, benefits and perquisites;
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Establish performance goals for the Chief Executive Officer and
oversee the establishment of performance goals for the other
executive officers and for each business unit;
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Evaluate annually each executive officers performance in
light of the goals established with respect to the officer for
the most recently completed year; and,
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Establish each executive officers compensation levels for
the following year, based upon the executive officers
performance, our financial results and relative shareholder
return, the value of compensation paid to a comparable executive
officer at comparable companies, the awards given to the
executive officer in past years, and our capacity to fund the
compensation.
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11
The Chief Executive Officer annually reviews the performance of
each executive officer. Recommendations based on these reviews,
including those with respect to base salary adjustments, annual
incentives and long-term incentives, are presented to the
Committee. The Committee can exercise its discretion in
modifying any recommended adjustments or awards to these
executive officers. The compensation of the Chief Executive
Officer is determined by the Committee, meeting in executive
session without the Chief Executive Officer present.
Benchmarks
for Executive Compensation
Compensation levels for our executives are compared to the
compensation paid to executives at the group of peer companies
specified below. We use market data from these peer companies to
benchmark targeted compensation levels by position for base
salary, annual cash incentives, long-term equity incentives and
total compensation.
The market for experienced talent is highly competitive. We aim
to attract and retain the most highly qualified executives to
manage our business functions. In doing so, we draw upon a pool
of talent that is highly sought after by both large and
established companies. We draw upon a market that is global in
scope. We recognize that we must satisfy the financial
requirements of our candidates through competitive compensation
practices. We also compete for talent on the basis of our vision
of future growth and success, our culture and our Company
values. In order to succeed in attracting the best global
talent, the Committee has engaged Hewitt Associates, an outside
global Human Resources consulting firm, to conduct regular
reviews of our total compensation programs for our Chief
Executive Officer and other key executives. Hewitt Associates
provides the Committee with relevant market data and
alternatives to consider when making compensation decisions for
our Chief Executive Officer as well as other executive officers.
In making compensation decisions, the Committee compares each
element of compensation against a peer group of publicly traded
and privately held manufacturing companies. The comparator
group, which is periodically updated by the Committee, consists
of companies against which we believe we compete for talent in
the marketplace. The companies currently comprising the
comparator group are:
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A.O. Smith Corporation
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Metaldyne Corporation
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Ametek, Inc.
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Milacron Inc.
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Borg Warner Inc.
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Oshkosh Truck Company
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Briggs &
Stratton Corporation
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PACCAR Inc.
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Caterpillar Inc.
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Parker Hannifin
Corporation
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Cooper Industries,
Inc.
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Robert Bosch
Corporation
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Cummins, Inc.
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Sauer-Danfoss Inc.
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Deere &
Company
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Spartan Motors, Inc.
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Dover Corporation
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SPS Technologies, Inc.
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Easton Corporation
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Teleflex Incorporated
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Emerson Electric
Company
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Tennant Company
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The Gates Rubber
Company
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Thomas &
Betts Corporation
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Hubbell Inc.
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Thyssen Krupp Budd
Company
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Illinois Tool Works,
Inc.
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The Timken Company
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International Truck
and Engine
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Valmont Industries,
Inc.
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Johnson Controls,
Inc.
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Woodward Industries,
Inc.
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Kennametal Inc.
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Worthington
Industries, Inc.
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Because of the large variance in size among the companies
comprising the comparator group, regression analysis is used to
adjust the compensation data for differences in revenues. This
adjusted data is used as the basis of comparison between our
Company and the companies in the comparator group.
We may also use published survey data to supplement the
determination of competitive levels of compensation in the
marketplace.
12
Elements
of Executive Compensation
Our value-based compensation program consists of five
components: base salary, annual cash incentives, long-term
equity incentives, retirement and health and welfare benefits,
and perquisites. Our programs balance individual, business unit
and Company-wide goals and achievements.
Base
Salaries
Base salary levels for our executive officers and our Chief
Executive Officer are determined primarily on external market
data and on the individual performance of each executive officer
during the previous year. Base salaries are targeted to be at
the 50th percentile of competitive market data and,
effective January, 2007, actual base salaries for named
executive officers range from 97% to 119% of individual targets.
In addition to the executives individual performance, the
Committee also considers the following factors in setting base
salaries and in recommending annual base salary adjustments: the
executives current base salary relative to the targeted
level, the executives level of responsibility, the
executives prior experience, the executives breadth
of knowledge, and other internal equity issues.
Annual
Cash Incentives
Since the beginning of 2005, annual cash incentive payments have
been based exclusively on objective measures of financial
performance that relate to the
year-over-year
increase in Economic Value. We believe that Economic Value is
the best single financial measure that is directly tied to the
creation of shareholder value because it encompasses both
earnings growth and efficient use of capital. Economic Value is
the net amount of value earned or lost on an investment after
deducting the cost of holding that investment. The underlying
rationale for adopting an Economic Value system for annual cash
incentive compensation is to align management and employee
interests with the interests of stockholders.
Economic Value is calculated by using three key inputs:
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Cost of Capital, which is the return required to
appropriately compensate investors for investing in our Company.
We use a single Cost of Capital for all operating units and for
the consolidated Company, which is based on a weighted average
of the after-tax cost of our debt and our stockholders
expected return on equity. When the Economic Value incentive
plan was adopted at the beginning of 2005, we determined that
our Cost of Capital was 9%.
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Average Capital Employed, which is the investment made by
stockholders and debt holders of our Company in the operations
of the business. For our Company and its operating units, the
capital that is included in the calculation of Average Capital
Employed includes the aggregate value of certain assets
(principally accounts receivable, inventories, fixed assets,
goodwill and other intangibles, and assets held for sale) less
the sum of certain non-interest bearing liabilities (principally
accounts payable, customer deposits and other non-interest
bearing liabilities). Average Capital Employed is calculated as
a simple average of the capital employed at each month end in a
year.
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Net Operating Profit after Tax, which is the after-tax
operating profit of our Company or a particular operating unit.
It is calculated by adding operating income and non-operating
income and subtracting from this sum non-operating expense and
income tax.
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Economic Value is calculated by subtracting a Capital Charge
from Net Operating Profit after Tax. The Capital Charge is
derived by multiplying the Cost of Capital by the Average
Capital Employed.
Our annual incentive program focuses our executives on
maximizing long-term shareholder value and encourages decision
making that supports
year-over-year
growth in the Economic Value of the particular unit in which an
executive works and the Company as a whole. In 2004, the Company
retained Shareholder Value Advisors, a financial and
compensation consulting firm, to assist in developing Economic
Value improvement goals for the Company and for each of the key
operating units of the Company. The goals were established for
the three-year period beginning in 2005.
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The targeted Economic Value improvement goals were established
based on the estimated improvement needed to give investors a
cost of capital return on the market value of the Company or
business unit. The target setting analysis assumed that the
Economic Value improvement from the restructuring initiatives
announced in 2004 was already reflected in the stock price and
would not provide any additional return. The Economic Value
improvement value multiples (the estimated investor
wealth gains per $1 of Economic Value improvement) used in
deriving the improvement goals were based on statistical models
of peer company data. Target incentive compensation awards for
all executive officers are set at 100% of the Economic Value
improvement goal for the business unit or the Company, with
threshold set at 50% of the target goals and maximum set at 200%
of the target goals.
The incentive compensation for Mr. Welding and
Ms. Kushner is based on the achievement of Economic Value
goals which have been set for our Company as a whole.
Mr. McConnaughey, Mr. Gustafson and Mr. Weber,
each of whom are Group presidents, have threshold, target and
maximum Economic Value goals for their respective Groups and for
our Company as a whole, with their aggregate annual incentive
award weighted at 80% for achievement of their individual Group
goals and 20% for our Company goals. This weighting encourages
executives to collaborate across Groups and functions in order
to achieve business objectives at the enterprise level as well
as in their own Groups.
The achievement of the threshold, target and maximum Economic
Value goals will result in a cash incentive award equal to a
pre-set percentage of the executives base salary or the
salary mid-point (50th percentile of market) of similar
positions at our comparator group companies, whichever is
greater. The target percentages of base salary or salary
mid-point to be paid out upon the achievement of various levels
of Economic Value are determined based on competitive market
data for each executive position. Economic Value results that
fall in between the threshold, target and maximum goals will be
extrapolated from those points to determine the actual cash
incentive award for the executive. In 2006, the target annual
cash incentive percentage for Mr. Welding was 75%, and the
target annual cash incentive for all other named officers was
50%. In 2007, based on market data collected from our comparator
group, Mr. Weldings target annual cash incentive
percentage was increased to 85% and for all other named officers
the target annual cash incentive percentage was increased to 55%.
In order to support the achievement of long-term goals,
executives are given the opportunity to carry forward the unmet
portion of their maximum annual incentive opportunity. One-half
of the difference between the maximum opportunity and the actual
incentive earned for a particular year can be re-earned over
each of the next two years if the related operating unit
achieves an Economic Value amount for the subsequent year that
is at or above target for that year and the result is at or
above the relative level of Economic Value attained by the
operating unit during the initial year. Any carry forward
opportunity that is not earned in either of the two immediately
subsequent years will be forfeited by the executive officer.
Long-Term
Equity Incentives
Equity ownership plays a key role in aligning the interests of
executives with our stockholders. A further purpose of our
long-term incentive plan is to provide a means through which our
Company may attract the best talent to become our employees, to
encourage our employees to engage in the business strategy and
success of our Company, and to provide a retention tool through
vesting obligations for executives. In accordance with our
continuing commitment to meet these objectives, the Committee
generally grants stock options and restricted stock awards to
executives on an annual basis under our long-term incentive
plans. A combination of stock appreciation rights, performance
shares or units, or other equity vehicles may also be used as
deemed appropriate. In order to ensure continued ownership of
the equity granted under the long-term incentive grants, we have
instituted stock ownership guidelines for our executive officers
as discussed below under the caption Stock Ownership
Guidelines for Executive Officers.
The grant date value of the equity awards (based upon
Black-Scholes or other widely accepted valuation models) under
the long-term equity incentive program is targeted at the 50th
percentile of the intrinsic value of long-term incentives paid
to comparable executives at companies in the comparator group.
In addition to competitive market practices, we consider the
executives level of responsibility, prior experience,
historical award data, and
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individual performance. As with the other components of
compensation paid by us, these actual values of long-term
incentives may be more or less than the targeted levels for a
particular executive in a particular year.
Equity grants made in 2006 and in 2007 to executive officers
were granted so that 50% of the grant date value of the
long-term incentive award was in the form of stock options to
motivate long-term decision making and to reward future business
performance, and 50% of the grant date value was in the form of
restricted stock shares to facilitate the desired levels of
stock ownership and to promote executive retention.
Retirement
and Health and Welfare Benefits
We recognize that our employees are the driving force behind the
profitable growth of our Company and that our ability to sustain
our success is dependant on each individuals well being.
To that end we offer a competitive package of Company-sponsored
health and welfare benefits to all employees that executive
officers are eligible to participate in.
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Retirement Plans: In January 2007, we
introduced the new Federal Signal Corporation Retirement Savings
Plan and the new Savings Restoration Plan. The Retirement
Savings Plan is a defined contribution plan that combines a
401(k) plan with a points-weighted Company contribution. Under
this plan, executives receive a Company-paid retirement
contribution based on their years of service, age and employee
status paid as a percentage between 1% and 4% of their eligible
compensation. Executives are also eligible to receive a Company
matching contribution of up to 50% of the first 6% of the
participants compensation that the participant voluntarily
determines to contribute to the plan. The non-qualified Savings
Restoration Plan restores Company contributions limited under
the Internal Revenue Code through a notional Company
contribution, a voluntary employee deferral, and notional
earnings from investments. Certain executives also continue to
participate in defined benefit plans that have been frozen for
age and service effective December 31, 2006, and will be
frozen for wage increases effective December 31, 2016.
Effective December 31, 2006, the profit sharing component
of the Federal Signal Corporation 401(k) Retirement
Plan Elgin Sweeper Company was terminated. For 2007
through 2009, executives who participated in our Federal Signal
Corporation 401(k) Retirement Plan Elgin Sweeper
Company or in our frozen defined benefit plan are eligible to
receive a supplemental transitional contribution to our new
Retirement Savings Plan equal to 1% to 2% of their salary. Based
upon their age and years of service as of December 31,
2006, each of Mr. Welding, Ms. Kushner and
Mr. Weber will be entitled to receive a supplemental
transitional contribution equal to 2% of their salary in 2007
through 2009.
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Health and Welfare Plans: Executives
participate in the same broad-based, market competitive health
and welfare plans (medical, prescription, dental, vision, life
and disability insurance) that are available to all employees.
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Perquisites
and Other Personal Benefits
We provide executives with perquisites and other personal
benefits that the Committee feels are reasonable and consistent
with its overall compensation program to better enable us to
attract and retain the best talent for key executive positions.
The Committee periodically reviews the levels of perquisites
provided. Perquisites currently provided include:
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Vehicles or Vehicle Allowances: Executives
receive leased vehicle payments or a monthly vehicle allowance
benefit in an amount that is consistent with the
executives position and level in the organization, and
prevailing market practices.
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Health Medical Exam Reimbursement: Executives
are eligible to participate in an annual Executive Health Exam
as a means to promote wellness in our key executives.
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Additional Survivor Benefit: As President and
Chief Executive Officer, Mr. Welding receives an additional
survivor benefit agreed to at the time of his employment to
attract Mr. Welding to our Company. At
Mr. Weldings death (if he is then employed by our
Company), our Company will pay to Mr. Weldings estate
or his designated beneficiaries an amount equal to
Mr. Weldings annual base salary at the time of his
death.
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The payment is a general obligation of our Company and is not
funded by a life insurance policy issued by a third party.
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Country Club Initiation and Membership Fees
Reimbursement: The Committee believes that as
Chief Executive Officer, it is appropriate to further
Mr. Weldings business entertainment and social
networking through membership in a country club in the Chicago,
Illinois metropolitan area. Mr. Welding received
reimbursement for country club initiation fees and continues to
receive reimbursement for membership dues.
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Relocation Reimbursement: Mr. McConnaughey was
hired by our Company during 2006 and, pursuant to our Executive
Relocation Reimbursement Program, was reimbursed for various
relocation expenses. Mr. Gustafson was also reimbursed for
relocation expenses for his move during 2005 and 2006.
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Tax
Gross-Up
Payments: In connection with the payment of a
signing bonus of $300,000 to Mr. McConnaughey upon the
commencement of his employment with our Company during 2006, we
agreed to pay the income taxes attributable to the payment of
the signing bonus. We also paid income taxes attributable to
certain of Mr. McConnaugheys relocation expenses
pursuant to the terms of our Executive Relocation Reimbursement
Program.
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Supplemental Savings and Investment Plan: In
years prior to 2005, executives were eligible to participate in
the Supplemental Savings and Investment Plan, a nonqualified
deferred compensation benefit that supplemented our defined
benefit plans. During 2007, balances remaining in this plan will
be transferred into the new Savings Restoration Plan. In March
of 2007, Ms. Kushners notional account in the new
Savings Restoration Plan was credited with additional amounts
discussed below to satisfy certain prior commitments that we
made to Ms. Kushner with respect to supplemental defined
benefits or retirement benefits.
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Setting
Actual Compensation for the Named Executive Officers
The specific compensation decisions made for each of the named
executives for 2006 and
year-to-date
in 2007 reflect our managements and our Committees
assessments of performance relative to Company and business
Group financial and operational measurements and individual
performance objectives and comparisons against market
benchmarks. Our compensation actions for our Chief Executive
Officer and other named executive officers are summarized as
follows:
Base
Salary
In January 2006, the Committee set Mr. Weldings base
salary at $686,700. This base salary represents a 9% increase
from the prior years salary of $630,000. At the same time,
the Committee set Ms. Kushners base salary at
$317,750, which represents a 9% increase from her prior
years base salary of $291,500, and Mr. Webers
base salary at $262,260, a 15% increase from the prior
years base salary of $228,000. These increases were
awarded to recognize these executives accomplishments in
2005 and the low relative position of their individual 2005 base
salaries versus competitive market benchmarks.
Mr. Gustafsons 2006 base salary was set at $312,000,
a 4% increase from the prior years base salary of
$300,000. The Committee believed that Mr. Gustafsons
2005 base salary was at competitive benchmarks but awarded the
salary increase in recognition of Mr. Gustafsons
accomplishments in 2005. Mr. McConnaughey was hired by our
Company on March 6, 2006, and pursuant to the negotiated
terms of his employment offer was paid at an annual base salary
rate of $320,000 during 2006.
Mr. Welding did not receive an increase in his base salary
in 2007 based on the Committees review of external market
data and the performance of our Company in 2006. In January
2007, the Committee set Ms. Kushners base salary at
$330,460, a 4% increase from her prior years salary, and
Mr. Gustafsons base salary at $321,360, a 3% increase
from his 2006 base salary. The Committee believes that
Ms. Kushners and Mr. Gustafsons individual
salaries are competitive in the marketplace and the increase was
awarded to recognize their individual accomplishments in 2006.
Mr. Webers base salary for 2007 was increased to
$288,475, a 10% increase from his 2006 base salary. This
increase was awarded to recognize Mr. Webers
accomplishments in 2006 and the low relative position of his
2006 base salary versus market benchmarks. Mr. McConnaughey
did not receive an increase in base salary in 2007 based on the
Committees review of external market data and the
determination that Mr. McConnaugheys base salary is
currently at 119% of his target market base salary.
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Annual
Cash Incentive Payments
In February 2006, based on improvement in the Economic Value of
our Company of $45 million in 2005, the Committee awarded
Mr. Welding an incentive cash payment of $707,940 for 2005.
This payment represented a payout of 112.4% of
Mr. Weldings annual base salary for 2005, based upon
the achievement of actual Economic Value at the Company level
over the target Economic Value for the year.
Mr. Weldings threshold incentive award was 37.5% of
his annual base salary, his target incentive award level was 75%
of his annual base salary and his maximum incentive award as a
percentage of his annual base salary was 150%. Likewise,
Ms. Kushner was awarded an incentive cash award of $218,874
for 2005 based upon the improvement in our Companys
Economic Value, which represents 75.1% of her 2005 annual base
salary. Ms. Kushners threshold incentive award was
25% of her annual base salary, her target incentive award was
50% of her annual base salary and her maximum incentive award as
a percentage of her annual base salary was 100%. Both
Mr. Weldings and Ms. Kushners annual
incentive awards for 2005 represented achievement of an above
target Economic Value for our Company during 2005.
In February 2006, based on the improvement in the Economic Value
of the Fire Rescue Group of $21 million in 2005 and on the
improvement of the Economic Value of our Company of
$45 million in 2005, the Committee awarded
Mr. Gustafson an incentive cash payment of $122,326 for
2005. This represents an annual cash incentive award equal to
40.8% of Mr. Gustafsons annual base salary for 2005.
Mr. Gustafsons threshold incentive award as a
percentage of his annual base salary was 25%, his target annual
incentive award was 50% of his annual base salary and his
maximum annual incentive award was 100% of his annual base
salary. Mr. Gustafsons annual incentive opportunity
was weighted 80% based upon the Economic Value of the Fire
Rescue Group and 20% based upon the Economic Value of our
Company as a whole. Mr. Gustafsons annual incentive
award for 2005 represented achievement between threshold and
target Economic Value for the Fire Rescue Group and above target
Economic Value for our Company as a whole.
In February 2006, based on the improvement of the Economic Value
of the Environmental Solutions Group of $7 million in 2005,
and on the growth of the Economic Value of our Company of
$45 million in 2005, the Committee awarded Mr. Weber
an incentive cash payment of $80,510 for 2005. This represents
an annual cash incentive equal to 35.2% of Mr. Webers
annual base salary for 2005. Mr. Webers threshold
annual incentive award as a percentage of his annual base salary
was 25%, his target incentive award was 50% of annual base
salary and his maximum annual incentive award was 100% of annual
base salary. Mr. Webers annual incentive opportunity
was weighted 80% based upon the Economic Value of the
Environmental Solutions Group and 20% based upon the Economic
Value of our Company as a whole. Mr. Webers annual
incentive award for 2005 represented achievement between
threshold and target Economic Value for the Environmental
Solutions Group and above target Economic Value for our Company
as a whole.
Mr. McConnaughey was not employed by our Company during
2005 and was therefore not eligible to receive an annual cash
incentive award for that year.
In February 2007, based on the improvement of Economic Value of
our Company of $9 million in 2006, the Committee awarded
Mr. Welding an incentive cash payment of $611,291 for 2006.
This award represented 89.0% of Mr. Weldings annual
base salary for 2006, representing an above target achievement
of Economic Value for our Company for 2006. Likewise, the
Committee awarded Ms. Kushner an incentive cash payment of
$188,996 for 2006 based upon the Economic Value of our Company,
which represents an above target payout equal to 59.5% of her
annual base salary for last year.
Based on the improvement of the Economic Value of the Safety and
Security Systems Group of $3 million in 2006, and the
improvement of Economic Value of our Company of $9 million
in 2006, the Committee awarded Mr. McConnaughey an
incentive cash payment of $242,301 in February 2007. This cash
incentive award was equal to 75.7% of
Mr. McConnaugheys base salary for 2006 and was
prorated for the period from his employment with our Company on
March 6, 2006 through the end of the year.
Mr. McConnaugheys threshold annual incentive award as
a percentage of his annual base salary was 25%, his target
incentive award was 50% of his annual base salary and his
maximum incentive award was 100% of his annual base salary.
Mr. McConnaugheys annual incentive opportunity was
weighted 80% based upon the Economic Value of the Safety and
Security Systems Group and 20% based upon the Economic Value for
our Company as a whole. Mr. McConnaugheys annual
incentive award for
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2006 represents achievement above maximum Economic Value for the
Safety and Security Systems Group and above target Economic
Value of our Company as a whole.
Based on the improvement of Economic Value of the Fire Rescue
Group of $3 million in 2006, and the improvement in
Economic Value of our Company of $9 million in 2006, the
Committee awarded Mr. Gustafson an incentive cash payment
of $141,771 for 2006. This represented 45.4% of
Mr. Gustafsons annual base salary for 2006, which
means that the Fire Rescue Group achieved between threshold and
target Economic Value for 2006 while our Company as a whole
achieved Economic Value that was above target.
Based on the growth of Economic Value of the Environmental
Solutions Group of $10 million in 2006, and the growth in
Economic Value of our Company of $9 million in 2006, the
Committee awarded Mr. Weber an incentive cash payment of
$291,170 for 2006. This represented 111.0% of
Mr. Webers annual base salary for 2006, representing
an above target achievement of Economic Value for the
Environmental Solutions Group and our Company as a whole.
Mr. Weber was the only one of the named executive officers
who also earned a 2005 carry forward amount for performance of
his business Group during 2006.
Long-Term
Equity Incentives
In February 2006, the Committee granted Mr. Welding,
Ms. Kushner, Mr. Gustafson and Mr. Weber stock
options for 117,300, 25,235, 25,235 and 19,550 shares of
our common stock, respectively. Each of the options had an
exercise price of $16.94, the low share price on the date of
grant. The options vest in three equal annual installments on
the first three anniversaries of the date of the grant. At the
same meeting, the Committee also granted Mr. Welding,
Ms. Kushner, Mr. Gustafson and Mr. Weber 48,600,
10,400, 10,400 and 8,100 shares of restricted stock,
respectively. The restricted shares vest fully on the third
anniversary of the date of the grant and are subject to
forfeiture and cancellation if the executive officer terminates
his or her employment with our Company and its subsidiaries
prior to that time.
Mr. McConnaughey was not employed by our Company at the
time of the February 2006 grants. Pursuant to his employment
offer, on Mr. McConnaugheys date of hire,
March 6, 2006, the Committee granted him stock options for
15,000 shares of our common stock, with an exercise price
of $17.55 per share, the low price on the date of grant. Also,
on Mr. McConnaugheys date of hire, the Committee
granted Mr. McConnaughey 18,900 shares of restricted
stock. The restricted shares vest fully on the third anniversary
of the date of the grant and are subject to forfeiture and
cancellation if Mr. McConnaughey terminates his employment
with our Company and its subsidiaries prior to that time.
In February 2007, the Committee granted Mr. Welding,
Ms. Kushner, Mr. McConnaughey, Mr. Gustafson and
Mr. Weber stock options to purchase 79,900, 21,600, 18,600,
20,700 and 18,600 shares of our common stock, respectively.
Each of these options has an exercise price of $16.10, the
closing share price on the date of grant. We have changed our
methodology for determining the exercise price for stock options
after analysis of the guidance of the federal securities
regulators during 2006. The Committee will now set the exercise
price of all options that it grants at the closing price for our
common stock, as reported by the New York Stock Exchange, on the
date of the grant of the option. The options vest in three equal
annual installments on the first three anniversaries of the date
of the grant. At the same meeting, the Committee granted
Mr. Welding, Ms. Kushner, Mr. McConnaughey,
Mr. Gustafson and Mr. Weber 38,000, 10,200, 8,200,
9,800 and 8,800 shares of restricted stock, respectively.
The restricted shares vest fully on the third anniversary of the
date of the grant and are subject to forfeiture and cancellation
if the executive officer terminates his or her employment with
our Company and its subsidiaries prior to that time.
Perquisites
and Other Benefits
Vehicles and Vehicle Allowances: In 2006, our
Company paid on Mr. Weldings behalf leased vehicle
payments totaling $11,876. Ms. Kushner received a vehicle
allowance totaling $11,400, Mr. McConnaughey received a
vehicle allowance totaling $9,500, Mr. Gustafson received a
vehicle allowance totaling $11,400, and Mr. Weber received
a vehicle allowance totaling $3,800.
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Health Medical Exam Reimbursement: In 2006,
Ms. Kushner received an executive health exam valued at
$2,375, which was paid for by our Company. The other named
executives, while eligible, did not take advantage of the
program.
Additional Survivor
Benefits: Mr. Weldings estate or his
beneficiaries will be eligible to receive a benefit in the
amount of one years compensation at his annual rate
effective at the date of his death if Mr. Welding is
employed by our Company at the time of his death. This benefit
is not funded by an insurance policy from a third party insurer
so there was no cash outlay by our Company attributable to the
benefit during 2006.
Country Club Initiation and Membership Fees
Reimbursement: During 2006, Mr. Welding
joined a country club and received reimbursement from our
Company for certain country club initiation fees and membership
dues. Mr. Welding received reimbursements in the aggregate
amount of $46,151 during 2006, of which $42,500 represented the
first of two payments of the original required initiation fee.
The second payment of $42,500 will be made upon attainment of
full membership status.
Relocation
Reimbursement: Mr. McConnaughey was hired by
our Company during 2006 and, pursuant to our Companys
Executive Relocation Reimbursement Program, was reimbursed for
various moving expenses in the aggregate amount of $113,171.
Mr. Gustafson was also paid $36,000 during 2006 for
relocation expenses associated with his move in 2005.
Tax
Gross-Up
Payments: In connection with the payment of
Mr. McConnaugheys signing bonus of $300,000 upon the
commencement of his employment with our Company, we also agreed
to pay any income tax attributable to this bonus. The amount of
this payment, including the income taxes attributable to the
amounts paid by our Company on Mr. McConnaugheys
behalf, amounted to $167,115. Mr. McConnaughey was also
reimbursed for certain tax expenses associated with certain of
his relocation expenses in the amount of $11,686.
Supplemental Savings and Investment Plan: In
years prior to 2005, executives were eligible to participate in
the Supplemental Savings and Investment Plan, a non-qualified
deferred compensation benefit that supplemented our defined
benefit plans. During 2007, balances remaining in this plan will
be transferred into the new Savings Restoration Plan.
In connection with Ms. Kushners employment offer
letter in 2002, we committed to payment of certain supplemental
defined benefits or retirement benefits to Ms. Kushner upon
her retirement after the age of 57. In full satisfaction of
Ms. Kushners rights to such payments, we entered into
an agreement with Ms. Kushner by which we agree to credit,
as of March 1, 2007, Ms. Kushners notional
account in the new Savings Restoration Plan in the aggregate
amount of $308,472 and agree to make five additional payments in
the aggregate amount of $77,480 on March 1 over the next five
years, provided that Ms. Kushner is employed by our Company
on such payment dates. In addition, in consideration of the fact
that Ms. Kushner was not given the opportunity to make
voluntary deferrals of compensation into the Supplemental
Savings and Investment Plan during 2005 and 2006, we credited
Ms. Kushners notional account, also as of
March 1, 2007, with the additional amount of $15,798. None
of these amounts were paid currently due to the fact that the
Savings Restoration Plan is an unfunded, non-qualified defined
contribution plan.
Stock
Ownership Guidelines for Executive Officers
Our executive officers are required to own substantial holdings
of our common stock while employed by us. Individual stock
ownership targets are based on a multiple of between two and
five times the executives base salary and executives
generally have between three and five years from the date they
become subject to the stock ownership guidelines to comply with
the guidelines. We recognize both direct and indirect forms of
ownership in achieving the requirements. Effective with the 2007
stock option and restricted stock awards made to the named
executive officers, Mr. Welding will comply with
requirements for stock ownership. Mr. McConnaughey has not
met his requirements for stock ownership and has four years to
comply. Ms. Kushner, Mr. Gustafson, and Mr. Weber
have not met their requirements for stock ownership and have
three years to comply.
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Impact of
Accounting and Tax Treatment on Forms of Compensation
Paid
Section 162(m) of the Internal Revenue Code provides that
compensation in excess of $1 million paid to the chief
executive officer and the other most highly compensated
executive officers of a public company will generally be
nondeductible for federal income tax purposes, subject to
certain exceptions. The Committee intends to structure
compensation arrangements in a manner that will avoid the
deduction limitations imposed by Section 162(m) in
appropriate circumstances. However, the Committee believes that
it is important and necessary that the Committee retain the
right and flexibility to provide and revise compensation
arrangements, such as base salary and cash bonus incentive
opportunities, that may not qualify under Section 162(m)
if, in the Committees view, such arrangements are in the
best interests of our Company and our shareholders.
COMPENSATION
AND BENEFITS COMMITTEE REPORT
The responsibilities of the Compensation and Benefits Committee
are provided in its Charter, which has been approved by our
Board of Directors.
In fulfilling its oversight responsibilities with respect to the
Compensation Disclosure and Analysis included in this Report,
the Compensation and Benefits Committee, among other things, has:
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reviewed and discussed the Compensation Disclosure and Analysis
with management; and
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following such review, the Compensation and Benefits Committee
approved the inclusion of such Compensation Disclosure and
Analysis in this proxy statement.
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SUBMITTED BY
THE COMPENSATION AND BENEFITS COMMITTEE
JOHN F.
MCCARTNEY, CHAIRMAN
CHARLES R.
CAMPBELL PAUL W. JONES
Notwithstanding anything set forth in any of our previous
filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934 that might incorporate future filings,
including this proxy statement, in whole or in part, the
preceding report shall not be deemed incorporated by reference
in any such filings.
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EXECUTIVE
COMPENSATION IN THE LAST FISCAL YEAR
Summary
Compensation Table
The following table sets forth information concerning
compensation earned during the fiscal year ended
December 31, 2006 for our Chief Executive Officer, the
Chief Financial Officer, the three other most highly compensated
executive officers of our Company, and one other individual who
served as an executive officer during 2006 who would have been
one of the three other most highly compensated executive
officers of our Company but for the fact that he was not serving
as an executive officer of our Company at December 31, 2006:
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|
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Change in
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Pension Value
|
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and
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Non-Equity
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Non-qualified
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All
|
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Stock
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|
|
Option
|
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|
Incentive Plan
|
|
|
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Deferred
|
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|
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Other
|
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|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Awards
|
|
|
|
Awards
|
|
|
|
Compensation
|
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|
|
Compensation
|
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|
|
Compensation
|
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|
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Name and Principal Position
|
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|
Year
|
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|
|
($)
|
|
|
|
($)(1)
|
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|
|
($)(2)
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|
|
($)(3)
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($)(4)
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|
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Earnings($)(5)
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($)(6)
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Total($)
|
|
Robert D. Welding
President and Chief
Executive Officer
|
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|
2006
|
|
|
|
$
|
686,700
|
|
|
|
|
|
|
|
|
|
743,459
|
|
|
|
|
620,391
|
|
|
|
|
611,291
|
|
|
|
|
23,018
|
|
|
|
|
74,827
|
|
|
|
|
2,759,686
|
|
Stephanie K. Kushner
Vice President and Chief Financial Officer
|
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|
|
2006
|
|
|
|
$
|
317,750
|
|
|
|
|
|
|
|
|
|
173,987
|
|
|
|
|
150,088
|
|
|
|
|
188,996
|
|
|
|
|
133,618
|
|
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|
|
25,257
|
|
|
|
|
989,696
|
|
David R. McConnaughey
President, Safety and Securities Systems Group
|
|
|
|
2006
|
|
|
|
$
|
263,183
|
|
|
|
$
|
300,000
|
|
|
|
|
91,997
|
|
|
|
|
26,711
|
|
|
|
|
242,301
|
|
|
|
|
|
|
|
|
|
301,540
|
|
|
|
|
1,225,732
|
|
Marc F. Gustafson
President, Fire Rescue Group
|
|
|
|
2006
|
|
|
|
$
|
312,000
|
|
|
|
|
|
|
|
|
|
164,281
|
|
|
|
|
113,417
|
|
|
|
|
141,771
|
|
|
|
|
|
|
|
|
|
53,597
|
|
|
|
|
785,066
|
|
Mark D. Weber
President, Environmental Solutions Group
|
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|
|
2006
|
|
|
|
$
|
262,260
|
|
|
|
|
|
|
|
|
|
140,856
|
|
|
|
|
97,371
|
|
|
|
|
291,170
|
|
|
|
|
|
|
|
|
|
13,647
|
|
|
|
|
805,304
|
|
Stephen C. Buck
Former President, Safety Products Group
|
|
|
|
2006
|
|
|
|
$
|
90,533
|
|
|
|
|
|
|
|
|
|
342,505
|
|
|
|
|
237,499
|
|
|
|
|
|
|
|
|
|
34,551
|
|
|
|
|
457,236
|
|
|
|
|
1,162,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
(1) |
|
Represents a signing bonus that Mr. McConnaughey received
upon commencement of employment on March 6, 2006. |
|
(2) |
|
The stock award values represent the dollar amount of
compensation cost recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2006, in
accordance with SFAS 123(R). These amounts include amounts
related to unvested restricted stock awards granted under our
long-term incentive plan, discussed in further detail on
page 18 under the heading Long-Term Equity
Incentives. Assumptions used in the calculation of this
amount for fiscal years ended December 31, 2004, 2005 and
2006 are included in Footnote 9 to our Companys
audited financial statements for the fiscal year ended
December 31, 2006, included in our Companys Annual
Report on
Form 10-K
filed with the Securities and Exchange Commission on
February 22, 2007. Assumptions used in the calculation of
this amount for the fiscal years ended December 31, 2002
and 2003, are included under the heading Stock-based
compensation plans in Note A Significant
Accounting Policies included in the Annual Report on
Form 10-K
for the fiscal year ended December 31, 2004, filed with the
Securities and Exchange Commission on March 16, 2005. |
|
(3) |
|
The option award values represent the dollar amount of
compensation cost recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2006, in
accordance with SFAS 123(R). These amounts include amounts
related to unvested stock option grants awarded under our
long-term incentive plan, discussed in further detail on
page 18 under the heading Long-Term Equity
Incentives. Assumptions used in the calculation of this
amount for fiscal years ended December 31, 2004, 2005 and
2006 are included in Footnote 9 to our Companys
audited financial statements for the fiscal year ended
December 31, 2006, included in our Companys Annual
Report on
Form 10-K
filed with the Securities and Exchange Commission on
February 22, 2007. Assumptions used in the calculation of
this amount for the fiscal years ended |
21
|
|
|
|
|
December 31, 2002 and 2003 are included under the heading
Stock-based compensation plans in
Note A Significant Accounting Policies included
in the Annual Report on
Form 10-K
for the fiscal year ended December 31, 2004, filed with the
Securities and Exchange Commission on March 16, 2005. |
|
(4) |
|
Reflects the cash awards to the named individuals under our
management incentive plan that is discussed in further detail
beginning on page 13 under the heading Annual Cash
Incentives. |
|
(5) |
|
Reflects the actuarial increase in the present value of the
named executive officers benefits under all pension plans,
including supplemental pension plans, established by our Company
determined using interest rate and mortality rate assumptions
consistent with those used in our Companys financial
statements, and includes amounts which the named executive
officer may not currently be entitled to receive because such
amounts are not vested. For Ms. Kushner, the amount
represents a $16,348 change in her benefits under our Retirement
Plan, and a $117,270 change in her benefits under our
Supplemental Retirement Plan. In 2006, none of the other named
executive officers participated in the Supplemental Retirement
Plan. Earnings on deferred compensation are not reflected in
this column because the return on earnings is calculated in the
same manner and at the same rate as earnings on externally
managed investments of salaried employees participating in the
tax-qualified 401(k) savings plan, and dividends on Company
stock are paid at the same rate as dividends paid to
shareholders. |
|
(6) |
|
All Other Compensation includes the following aggregate
perquisites and other items that equaled or exceeded $10,000: |
|
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|
|
|
|
|
|
|
|
|
|
Tax Gross-Ups
|
|
|
|
|
|
|
|
|
|
|
|
Relocation
|
|
|
|
|
|
|
|
|
|
|
|
|
($)
|
|
|
|
Severance
|
|
|
|
Auto Allowance
|
|
|
|
($)
|
|
|
|
401(k) Match
|
|
|
|
Other Perquisites
|
|
Name
|
|
|
(x)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
(y)
|
|
|
|
($)
|
|
|
|
($)
|
|
Robert D. Welding
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11,876
|
|
|
|
|
|
|
|
|
$
|
4,290
|
|
|
|
$
|
58,661
|
(z)
|
Stephanie K. Kushner
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11,400
|
|
|
|
|
|
|
|
|
$
|
6,600
|
|
|
|
$
|
7,257
|
|
David R. McConnaughey
|
|
|
$
|
178,801
|
|
|
|
|
|
|
|
|
$
|
9,500
|
|
|
|
$
|
113,171
|
|
|
|
|
|
|
|
|
$
|
68
|
|
Marc F. Gustafson
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11,400
|
|
|
|
$
|
36,000
|
|
|
|
$
|
5,742
|
|
|
|
$
|
455
|
|
Mark D. Weber
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,800
|
|
|
|
|
|
|
|
|
$
|
6,600
|
|
|
|
$
|
3,247
|
|
Stephen C. Buck(v)
|
|
|
|
|
|
|
|
$
|
457,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(v) |
|
Does not include any perquisites because the aggregate was less
than $10,000. |
|
(x) |
|
Mr. McConnaughey received reimbursement for tax expenses
associated with relocation of $11,686, as well as those
attributable to the receipt of a signing bonus of $167,115. |
|
(y) |
|
Includes the following amounts paid out as reimbursement for
home purchase expenses: Mr. McConnaughey
$113,171; Mr. Gustafson $36,000. |
|
(z) |
|
Mr. Welding received $46,151 for country club membership
fees and dues, as well as a $10,000 Company match of his
charitable contribution to the United Way. |
22
Grants of
Plan-Based Awards
The following table sets forth information concerning grants of
plan-based awards earned for the fiscal year ended
December 31, 2006 for the named executive officers:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
Option
|
|
|
|
|
|
|
|
Closing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts Under
|
|
|
|
Awards:
|
|
|
|
Awards:
|
|
|
|
Exercise
|
|
|
|
Price of
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards
|
|
|
|
Number
|
|
|
|
Number of
|
|
|
|
or Base
|
|
|
|
Stock on
|
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)(2)
|
|
|
|
of Shares
|
|
|
|
Securities
|
|
|
|
Price of
|
|
|
|
Date of
|
|
|
|
of Stock
|
|
|
|
|
|
|
|
|
Board
|
|
|
|
|
|
|
|
of Stock
|
|
|
|
Underlying
|
|
|
|
Option
|
|
|
|
Option
|
|
|
|
and Option
|
|
|
|
|
Grant
|
|
|
|
Approval
|
|
|
|
Threshold
|
|
|
|
Target
|
|
|
|
Maximum
|
|
|
|
or Units
|
|
|
|
Options
|
|
|
|
Awards
|
|
|
|
Grant
|
|
|
|
Awards
|
|
Name
|
|
|
Date
|
|
|
|
Date
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
(#)
|
|
|
|
(#)
|
|
|
|
($/Sh)
|
|
|
|
($/Sh)
|
|
|
|
($/Sh)(3)
|
|
Robert D. Welding
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
258,612
|
|
|
|
$
|
517,223
|
|
|
|
$
|
1,180,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
834,462
|
|
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
117,300
|
|
|
|
$
|
16.94
|
|
|
|
$
|
17.17
|
|
|
|
$
|
729,606
|
|
Stephanie K. Kushner
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
79,956
|
|
|
|
$
|
159,913
|
|
|
|
$
|
364,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
178,568
|
|
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,235
|
|
|
|
$
|
16.94
|
|
|
|
$
|
17.17
|
|
|
|
$
|
156,962
|
|
David R. McConnaughey
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
65,973
|
|
|
|
$
|
131,945
|
|
|
|
$
|
263,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/6/06
|
|
|
|
|
2/22/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
335,286
|
|
|
|
|
|
3/6/06
|
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
$
|
17.55
|
|
|
|
$
|
17.74
|
|
|
|
$
|
97,350
|
|
Marc F. Gustafson
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
78,000
|
|
|
|
$
|
176,087
|
|
|
|
$
|
400,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
178,568
|
|
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,235
|
|
|
|
$
|
16.94
|
|
|
|
$
|
17.17
|
|
|
|
$
|
156,962
|
|
Mark D. Weber
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
69,214
|
|
|
|
$
|
164,564
|
|
|
|
$
|
364,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
139,077
|
|
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,550
|
|
|
|
$
|
16.94
|
|
|
|
$
|
17.17
|
|
|
|
$
|
121,601
|
|
Stephen C. Buck
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
139,077
|
|
|
|
|
|
2/8/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,550
|
|
|
|
$
|
16.94
|
|
|
|
$
|
17.17
|
|
|
|
$
|
121,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Annual incentive plan award payout is determined based
exclusively on objective measures of financial performance. For
each of Ms. Kushner, Mr. McConnaughey,
Mr. Gustafson and Mr. Weber, the target was 50% of
base salary. Mr. Welding was targeted at 75% of his base
salary. The threshold payout amount is 50% of the target amount,
if all incentive plan metrics are achieved at the threshold
performance level. If performance against the incentive plan
metrics is below the threshold, the payout is 0%. The maximum
payment is two times the target amount. |
|
(2) |
|
These payouts include potential carry forward amounts. |
|
(3) |
|
The grant date fair values are calculated based upon the
provision of SFAS 123(R). Shares in the form of restricted
stock are valued at the closing prices of our Companys
common stock on the date of the grant. The Black-Scholes model
is used to estimate the fair value of stock options, resulting
in an estimated value of $6.22 for options granted on
February 8, 2006, and $6.49 for options granted on
March 6, 2006. |
Additional
Information About the Compensation Paid to the Named Executive
Officers
Mr. Robert D. Welding Our Company has an
employment agreement with Mr. Welding. The agreement
continues until the December 31st following
Mr. Weldings 65th birthday (currently 59),
subject to earlier termination by our Company or
Mr. Welding. Mr. Weldings annual salary is as
approved by the Compensation and Benefits Committee, but may not
be less than $600,000 or such higher minimum annual rate as
determined by the Committee. At the discretion of our Board of
Directors, Mr. Weldings annual compensation may be
increased during the term of the agreement. In the event of his
death prior to termination of employment,
Mr. Weldings estate is entitled to receive in monthly
installments an amount equal to one years minimum
compensation. The agreement also provides that during
Mr. Weldings employment and for a period of
36 months after termination of employment, he will not
compete with us.
23
Our Company has not entered into formal written employment
agreements with any of the other named executive officers.
However, pursuant to his employment offer letter issued upon his
appointment as President of the Safety and Securities Systems
Group, Mr. McConnaughey is entitled to an annual salary of
at least $320,000, an annual cash bonus opportunity targeted at
approximately 50% of his base salary, annual stock option and
restricted stock grants as determined by the Compensation and
Benefits Committee, car allowance and participation in our
Companys standard benefit package including relocation
benefits, health benefits, 401(k) plan and other benefits.
Similarly, Mr. Gustafsons employment offer letter
entitles him to a base salary of at least $300,000, an annual
cash bonus opportunity targeted at approximately 50% of his base
salary, annual stock option and restricted stock grants as
determined by the Compensation and Benefits Committee, a car
allowance and participation in our Companys standard
benefits package including relocation benefits, health benefits,
401(k) plan and other benefits.
Mr. Stephen C. Buck resigned from our Company, effective
April 24, 2006. Pursuant to an agreement entered into on
May 5, 2006 with our Company, Mr. Buck received a
severance payment of $457,236 which approximated his annual
salary plus annual bonus. In addition, 42,183 unvested stock
options and 21,825 unvested stock awards that Mr. Buck held
at the date of termination were allowed immediate vesting.
Mr. Buck can exercise the vested options within three years
of his termination date. Mr. Buck was also provided
executive outplacement services for twelve months following the
date of termination, as well as subsidized COBRA coverage until
the earlier of a) November 5, 2007 or b) the date
he becomes eligible to receive other insurance coverage.
Following his resignation, Mr. Buck will continue to be
covered by our Supplemental Retirement Survivor and Disability
Plan. Pursuant to this plan, upon his death his designated
beneficiaries will be entitled to receive annual benefit
payments of $34,760 for ten years. This benefit is a general
obligation of our Company and has been substantially funded by a
life insurance policy we obtained from a third party.
The exercise price for each option grant was the lowest sale
price of our common stock on the date of grant. As explained in
more detail in the Compensation Discussion and Analysis, we have
changed our methodology for determining the exercise price for
stock options during 2006, and will now set the exercise price
of the option at the closing price for our common stock, as
reported by the New York Stock Exchange, on the date of the
grant of the option. The options granted in 2006 were granted
under our 2005 Executive Incentive Compensation Plan, and vest
in three equal annual installments on the first three
anniversaries of the date of the grant. The restricted shares
were granted under our 2005 Executive Incentive Compensation
Plan, and vest fully on the third anniversary of the date of the
grant and are subject to forfeiture and cancellation if the
named executive officer terminates his or her employment with
our Company and its subsidiaries prior to that time.
Annual cash bonuses to the named executive officers are paid
under our management incentive plan. For 2006, 100% of the
target bonuses for Mr. Welding and Ms. Kushner were
based on the performance of our Company as a whole. For each of
Messrs. McConnaughey, Gustafson and Weber, 20% of the
target bonus was based on the performance of our Company as a
whole, and the remaining 80% was based on the performance of the
division under their direct supervision. The threshold, target
and maximum levels of bonus payable were determined based on the
Economic Value of our Company. For additional information about
how Economic Value is determined, see the discussion under
Annual Cash Incentives in the Compensation
Discussion and Analysis beginning on page 13.
24
Information
as to Stock Options
Outstanding Equity Awards at Fiscal
Year-End The following table sets forth
information concerning outstanding equity awards, as of the
completed 2006 fiscal year, held by the named executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
Unearned
|
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Securities
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Value of
|
|
|
|
Shares,
|
|
|
|
Shares,
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
Underlying
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
|
Shares or
|
|
|
|
Units, or
|
|
|
|
Units, or
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
|
Unexercised
|
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
|
|
Units of
|
|
|
|
Units of
|
|
|
|
Other
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
|
Options (#)
|
|
|
|
Unexercised
|
|
|
|
Option
|
|
|
|
Option
|
|
|
|
Stock that
|
|
|
|
Stock that
|
|
|
|
Rights that
|
|
|
|
Rights that
|
|
|
|
|
|
|
|
|
Options (#)
|
|
|
|
Unexercisable
|
|
|
|
Unearned
|
|
|
|
Exercise
|
|
|
|
Expiration
|
|
|
|
Have Not
|
|
|
|
Have Not
|
|
|
|
Have Not
|
|
|
|
Have Not
|
|
Name
|
|
|
Grant Date
|
|
|
|
Exercisable
|
|
|
|
(1)
|
|
|
|
Options (#)
|
|
|
|
Price ($)
|
|
|
|
Date
|
|
|
|
Vested (#)(2)
|
|
|
|
Vested ($)(3)
|
|
|
|
Vested ($)
|
|
|
|
Vested ($)
|
|
Robert D. Welding
|
|
|
|
11/28/2003
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15.10
|
|
|
|
|
11/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/12/2004
|
|
|
|
|
25,000
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
$
|
18.89
|
|
|
|
|
2/12/2014
|
|
|
|
|
25,000
|
|
|
|
$
|
401,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/10/2005
|
|
|
|
|
17,133
|
|
|
|
|
34,267
|
|
|
|
|
|
|
|
|
$
|
16.01
|
|
|
|
|
2/10/2015
|
|
|
|
|
48,600
|
|
|
|
$
|
779,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/27/2005
|
|
|
|
|
28,267
|
|
|
|
|
56,533
|
|
|
|
|
|
|
|
|
$
|
16.01
|
|
|
|
|
4/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/2006
|
|
|
|
|
|
|
|
|
|
117,300
|
|
|
|
|
|
|
|
|
$
|
16.94
|
|
|
|
|
2/8/2016
|
|
|
|
|
48,600
|
|
|
|
$
|
779,544
|
|
|
|
|
|
|
|
|
|
|
|
Stephanie K. Kushner
|
|
|
|
3/1/2002
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
25.67
|
|
|
|
|
3/1/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2003
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15.65
|
|
|
|
|
2/6/2013
|
|
|
|
|
1,250
|
|
|
|
|
$20,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/30/2003
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
14.48
|
|
|
|
|
10/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/12/2004
|
|
|
|
|
5,000
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
$
|
18.89
|
|
|
|
|
2/12/2014
|
|
|
|
|
3,750
|
|
|
|
|
$60,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/10/2005
|
|
|
|
|
9,767
|
|
|
|
|
19,533
|
|
|
|
|
|
|
|
|
$
|
16.01
|
|
|
|
|
2/10/2015
|
|
|
|
|
10,400
|
|
|
|
$
|
166,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/2006
|
|
|
|
|
|
|
|
|
|
25,235
|
|
|
|
|
|
|
|
|
$
|
16.94
|
|
|
|
|
2/8/2016
|
|
|
|
|
10,400
|
|
|
|
$
|
166,816
|
|
|
|
|
|
|
|
|
|
|
|
David R. McConnaughey
|
|
|
|
3/6/2006
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
$
|
17.55
|
|
|
|
|
3/6/2016
|
|
|
|
|
18,900
|
|
|
|
$
|
303,156
|
|
|
|
|
|
|
|
|
|
|
|
Marc F. Gustafson
|
|
|
|
10/20/2004
|
|
|
|
|
7,500
|
|
|
|
|
7,500
|
|
|
|
|
|
|
|
|
$
|
17.68
|
|
|
|
|
10/20/2014
|
|
|
|
|
7,500
|
|
|
|
$
|
120,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/10/2005
|
|
|
|
|
7,567
|
|
|
|
|
15,133
|
|
|
|
|
|
|
|
|
$
|
16.01
|
|
|
|
|
2/10/2015
|
|
|
|
|
8,100
|
|
|
|
$
|
129,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/2006
|
|
|
|
|
|
|
|
|
|
25,235
|
|
|
|
|
|
|
|
|
$
|
16.94
|
|
|
|
|
2/8/2016
|
|
|
|
|
10,400
|
|
|
|
$
|
166,816
|
|
|
|
|
|
|
|
|
|
|
|
Mark D. Weber
|
|
|
|
12/11/1997
|
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20.44
|
|
|
|
|
12/11/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/8/1999
|
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
21.25
|
|
|
|
|
7/8/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/9/1999
|
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16.06
|
|
|
|
|
12/9/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/1/2001
|
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
21.95
|
|
|
|
|
2/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2002
|
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
23.21
|
|
|
|
|
2/6/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/17/2003
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16.02
|
|
|
|
|
4/17/2013
|
|
|
|
|
1,250
|
|
|
|
|
$20,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/12/2004
|
|
|
|
|
5,000
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
$
|
18.89
|
|
|
|
|
2/12/2014
|
|
|
|
|
3,750
|
|
|
|
|
$60,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/10/2005
|
|
|
|
|
7,567
|
|
|
|
|
15,133
|
|
|
|
|
|
|
|
|
$
|
16.01
|
|
|
|
|
2/10/2015
|
|
|
|
|
8,100
|
|
|
|
$
|
129,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/2006
|
|
|
|
|
|
|
|
|
|
19,550
|
|
|
|
|
|
|
|
|
$
|
16.94
|
|
|
|
|
2/8/2016
|
|
|
|
|
8,100
|
|
|
|
$
|
129,924
|
|
|
|
|
|
|
|
|
|
|
|
Stephen C. Buck(4)
|
|
|
|
12/11/1997
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20.44
|
|
|
|
|
12/11/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/10/1998
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
23.75
|
|
|
|
|
12/10/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/9/1999
|
|
|
|
|
16,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16.06
|
|
|
|
|
12/9/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/18/2001
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20.91
|
|
|
|
|
4/18/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2002
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
23.21
|
|
|
|
|
2/6/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/6/2003
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15.65
|
|
|
|
|
2/6/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/12/2004
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18.89
|
|
|
|
|
2/12/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/10/2005
|
|
|
|
|
22,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16.01
|
|
|
|
|
2/10/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/2006
|
|
|
|
|
19,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16.94
|
|
|
|
|
2/8/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Stock options granted in 2004 vest at a rate of one-half in year
two, and one-half in year three. Stock options granted in 2005
and 2006 are subject to graded vesting over a three-year period
from the date of grant. |
25
|
|
|
(2) |
|
Stock awards granted in 2003 and 2004 vest ratably at 25% over a
four-year period. Stock awards granted in 2005 and 2006 vest on
the third anniversary of the grant date. |
|
(3) |
|
Based on the closing price of $16.04 per share of our
common stock on December 31, 2006. |
|
(4) |
|
Mr. Buck resigned as an executive officer in 2006. In
conjunction with his severance agreement, all outstanding
unvested options and restricted stock awards were deemed vested
as of the last day of his employment. |
Option Exercises and Stock
Vested The following table sets forth
information concerning amounts received or realized upon
exercise of options or similar instruments, and the vesting of
stock or similar instruments, by the named executive officers.
None of the named executive officers exercised any stock options
during the year ended December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Stock Awards(1)
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
Acquired on
|
|
|
|
Value Realized on
|
|
|
|
Acquired on
|
|
|
|
Value Realized on
|
|
Name
|
|
|
Exercise (#)
|
|
|
|
Exercise ($)
|
|
|
|
Vesting (#)
|
|
|
|
Vesting ($)
|
|
Robert D. Welding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
$
|
223,875
|
|
Stephanie K. Kushner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,625
|
|
|
|
$
|
102,644
|
|
David R. McConnaughey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marc F. Gustafson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
|
|
|
|
|
$59,025
|
|
Mark D. Weber
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,125
|
|
|
|
|
$55,969
|
|
Stephen C. Buck(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,575
|
|
|
|
$
|
802,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Reflects the lapse of time-based restrictions pursuant to the
terms of grant under our long-term incentive plan for the
2002 - 2004 grant cycles. No amounts were deferred by any
of the named executive officers. |
|
(2) |
|
Mr. Buck resigned as an executive officer in 2006. In
conjunction with his severance agreement, all outstanding
unvested options and restricted stock awards were deemed vested
as of the last day of his employment. |
Post
Retirement Benefits
Pension Benefits Table The
following table sets forth information concerning the present
value of accumulated pension benefits accrued by and any such
payments made to the named executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Years
|
|
|
|
Present Value of
|
|
|
|
Payments During
|
|
|
|
|
Plan Name
|
|
|
Credited Service
|
|
|
|
Accumulated
|
|
|
|
Last Fiscal Year
|
|
Name
|
|
|
(1)(2)(3)
|
|
|
(#)
|
|
|
|
Benefit ($)
|
|
|
|
($)
|
|
Robert D. Welding
|
|
|
FSC Retirement Plan
|
|
|
|
2.0
|
|
|
|
|
$44,294
|
|
|
|
|
|
|
Stephanie K. Kushner(3)
|
|
|
FSC Retirement Plan
|
|
|
|
3.5
|
|
|
|
|
$55,010
|
|
|
|
|
|
|
|
|
|
Supplemental Pension
Agreement
|
|
|
|
4.8
|
|
|
|
$
|
176,533
|
|
|
|
|
|
|
David R. McConnaughey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marc F. Gustafson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark D. Weber
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen C. Buck
|
|
|
FSC Retirement Plan
|
|
|
|
20.3
|
|
|
|
$
|
445,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Our retirement plan provides retirement benefits for many
salaried and hourly employees, including officers. Contributions
are made on an actuarial group basis, and no specific amount of
contributions is set aside for any individual participant. The
approximate annual pension benefit set forth in the table is
based on years of service and compensation, and reflects dollar
limitations under the Internal Revenue Code, as amended, which
limits the annual benefits which may be paid from a
tax-qualified retirement plan. |
26
|
|
|
(2) |
|
Ms. Kushner was eligible to receive a supplemental payment
upon retirement at or after age 57. She was entitled to a
$25,000 annual supplemental payment after five years of
employment with us, increasing by $5,000 for each year she
worked after five years of employment, up to a maximum of
$50,000 per year. In March of 2007, Ms. Kushner
entered into a Satisfaction and Release Agreement with our
Company regarding her supplemental pension agreement in exchange
for the receipt of six discretionary, supplemental and
additional contributions to the new Federal Signal Savings
Restoration Plan (SRP) as follows: March 1,
2007 $308,472, March 1, 2008
$30,322, March 1, 2009 $11,233, March 1,
2010 $11,658, March 1, 2011
$11,902, and March 1, 2012 $12,365.
Additionally, we agreed to make a discretionary, supplemental
and additional contribution on March 1, 2007 to her SRP
notional account in the amount of $15,798 in recognition of her
lost opportunity to restore company matching contributions to
her 401(k) plan in the years 2005 and 2006. |
|
(3) |
|
Mr. McConnaughey, Mr. Gustafson and Mr. Weber
were not eligible to participate in this pension plan in 2006. |
The normal retirement age under our retirement plan is
age 65. The annual pension earned by an eligible named
executive officer is equal to 50% of the named executive
officers average monthly compensation (up to a maximum of
$105,000), less one-half of Social Security payments, times the
named executive officers credited service years (to a
maximum of 30 years), divided by 30. For purposes of the
Retirement Plan, a named executive officers compensation
is his or her salary plus non-equity incentive plan compensation
as set forth in the Summary Compensation Table. Under the
Retirement Plan, the named executive officers are eligible to
retire after age 55 if they have completed at least
10 years of service with our Company. However, in the event
of such early retirement, the pension benefits payable are
reduced by 1/180 for each month up to 60 months, and 1/360
for each month over 60 months, by which the actual
retirement age is less than 65 years.
Non-qualified Deferred Compensation
Table The following table sets forth
information concerning contributions, earnings, and balances
under non-qualified deferred contribution plans for the named
executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
|
Aggregate
|
|
|
|
Aggregate
|
|
|
|
|
Contribution in
|
|
|
Contributions in
|
|
|
Earnings in Last
|
|
|
|
Withdrawals/
|
|
|
|
Balance at Last
|
|
Name(1)
|
|
|
Last FY ($)
|
|
|
Last FY ($)
|
|
|
FY ($)(2)
|
|
|
|
Distributions ($)
|
|
|
|
FYE ($)
|
|
Robert D. Welding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephanie K. Kushner
|
|
|
|
|
|
|
|
|
|
|
|
$9,311
|
|
|
|
|
|
|
|
|
$
|
118,985
|
|
David R. McConnaughey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marc F. Gustafson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark D. Weber
|
|
|
|
|
|
|
|
|
|
|
|
$314
|
|
|
|
|
|
|
|
|
|
$4,012
|
|
Stephen C. Buck
|
|
|
|
|
|
|
|
|
|
|
$
|
113,620
|
|
|
|
|
1,781,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Pursuant to our Supplemental Savings and Investment Plan, each
eligible named executive officer was permitted to defer up to
100% of his or her annual bonus. Participation in this plan was
frozen in July of 2005 and no additional deferrals were made in
2006. |
|
(2) |
|
The earnings reported under this column have not been reported
as compensation in the last completed fiscal year in the Summary
Compensation Table because these earnings were not above market.
The earnings on the named executive officers deferred
compensation are calculated in the same manner and at the same
rate as earnings on externally managed investments of salaried
employees participating in the tax-qualified 401(k) savings
plan. Dividends on Company stock held by the named executive
officers are paid at the same rate as dividends paid to
shareholders of our Company. |
Other
Potential Post-Employment Payments
Our Company entered into agreements with each named executive
officer that provide for payments at, following, or in
connection with any termination, including resignation,
involuntary termination, retirement, death, disability of a
named executive officer, or a Change in Control of our Company.
The tables on the following pages reflect the incremental cost
to our Company of providing payments and benefits, which are
generally not available
27
on a non-discriminatory basis, in connection with each of the
aforementioned circumstances. The amounts shown in the tables
assume that such termination occurs on December 31, 2006,
and thus, only includes amounts earned through such time.
However, the actual amounts that would be paid out under each
circumstance can only be determined at the time of separation.
Material Conditions to Receipt of
Payments The receipt of payments and benefits
upon termination are conditioned on the named executive
officers compliance with the following restrictive
covenants set forth in their severance and change in control
agreements:
|
|
|
|
|
Execution of a general release;
|
|
|
|
Non-disclosure of confidential information to a third party;
|
|
|
|
Non-competition with our Company for a twelve month period;
|
|
|
|
Cooperation with our Company in connection with any and all
lawsuits, claims, investigations, or similar proceedings;
|
|
|
|
Non-solicitation of employees for a twelve month period; and
|
|
|
|
Agreement not to disparage our Company or otherwise make
comments harmful to our Companys reputation.
|
Payments Made Upon Termination Our
Company has entered into Executive General Severance Agreements
with Messrs. Welding, Gustafson, McConnaughey, Weber and
Ms. Kushner that provide for the payment of severance in
the event of involuntary termination Without Cause
or voluntary termination with Good Reason. If an
executives employment is terminated under either of the
preceding circumstances, he or she shall receive the following
payments and benefits:
|
|
|
|
|
Payment of cash equal to one times the sum of the named
executive officers base salary and target annual bonus
established for the bonus plan year in which the
executives termination occurs;
|
|
|
|
Payment of a pro-rata portion of the targeted annual bonus for
the year in which the termination occurs;
|
|
|
|
Continuation of the welfare benefits of medical insurance,
dental insurance, and group term life insurance for an eighteen
month period. These benefits shall be provided to executives at
the same premium cost, and at the same coverage level, as in
effect as of the executives date of termination;
|
|
|
|
Right to exercise vested options within three months from date
of termination; and
|
|
|
|
Earned amounts under our 401(k) plan and Savings Restoration
Plan.
|
If, however, the named executive officer is terminated by our
Company for cause or if the named executive officer voluntarily
terminates his or her employment without Good Reason, our
Company shall not provide the named executive officer with
post-termination payments or benefits other than those vested
and accrued under our Companys various compensation plans
and programs.
Payments Made Upon Retirement Our
Company provides the following post-termination payments and
benefits upon retirement:
|
|
|
|
|
Right to exercise vested options within three years from date of
termination; and
|
|
|
|
Earned amounts under our 401(k) plan and Savings Restoration
Plan.
|
In order to be retirement-eligible, a named executive officer
must fulfill the age and service requirements stipulated in our
retirement plans and other compensation arrangements. None of
the named executive officers other than Mr. Buck were
eligible for retirement as of December 31, 2006.
28
Payments Made Upon Death or
Disability In the event of death or
disability, named executives officers shall receive the
following payments and benefits from our Company:
|
|
|
|
|
Immediate vesting of all outstanding and unvested stock options.
Named executive officers or his or her designated beneficiary
shall have the right to exercise such options for one year from
the date of disability or death;
|
|
|
|
Immediate vesting of restricted stock; and
|
|
|
|
Earned amounts under our 401(k) plan and Savings Restoration
Plan.
|
In addition to the benefits listed above, named executive
officers will receive benefits under our non-discriminatory
disability plan or payments under our group life insurance plan
in the event of death or disability. Mr. Welding receives
an additional executive life insurance benefit through his
employment contract in the amount of one times his annual base
salary.
Payments Made Upon a Change in
Control We maintain Executive
Change-in-Control
Severance Agreements that cover our named executive officers in
the event of a Change in Control of our Company. As
set forth in these agreements, if a Change in Control of our
Company occurs, the named executive officers would be entitled
to immediate and full vesting and lapse of restrictions on all
outstanding equity-based long-term incentive awards, including
stock options and restricted stock awards. If, however, an
executives employment is terminated within 24 calendar
months following a Change in Control (other than termination by
us for Cause, voluntary termination by the executive without
Good Reason, or by reason of death or disability) or
if the executive terminates his employment in certain
circumstances defined in the agreement which constitute
Good Reason, we shall provide each named executive
officer with the following:
|
|
|
|
|
A lump-sum cash payment equal to three times the sum of the
executives base salary and current annual target bonus
opportunity established under the annual bonus plan in which the
executive participates;
|
|
|
|
Immediate and full vesting and lapse of restrictions on all
outstanding equity-based long-term incentive awards, including
stock options and restricted stock awards;
|
|
|
|
Vesting and cash-out of all outstanding cash-based long-term
incentive awards;
|
|
|
|
Continuation of health and welfare benefits for up to thirty-six
months following termination. These benefits shall be provided
to the executive at the same coverage level and cost to the
executive as in effect immediately prior to the termination of
the executives employment; and
|
|
|
|
If the value of the cash payments and the continuation or
acceleration of benefits upon termination under the severance
agreements would subject the executive officer to the payment of
a federal excise tax as excess parachute payments,
the executive would be entitled to receive an additional
gross-up
payment to cover the full cost of any excise tax and all of the
executives additional federal, state and local income,
excise and employment taxes that arise on the additional payment.
|
Under the Executive
Change-in-Control
Severance Agreements, a Change in Control of our
Company means the occurrence of any one or more of the following
events:
|
|
|
|
|
acquisition by any one person or group of beneficial ownership
of forty percent (40%) or more of the combined voting power of
our Companys then outstanding securities;
|
|
|
|
replacement of the majority of the directors of our Company
during any period of twenty-four consecutive months;
|
|
|
|
consummation of a merger or consolidation of our Company with
another corporation, other than (1) a merger or
consolidation in which the combined voting securities of our
Company immediately prior to such merger or consolidation
continue to represent more than sixty percent (60%) of the
combined voting power of the voting securities of our Company or
the surviving entity outstanding immediately after such merger
or consolidation; or (2) a merger or consolidation effected
to implement a recapitalization of the Company or similar
transaction in which no person or group acquires more than forty
percent (40%) of the combined voting power of our Companys
then outstanding securities;
|
29
|
|
|
|
|
approval by our stockholders of a plan or an agreement for the
sale or disposition of all or substantially all of our
Companys assets; or
|
|
|
|
any other transaction that our Board of Directors designates as
being a Change in Control.
|
Under the Executive
Change-in-Control
Severance Agreements, Cause generally means:
(1) the executive officers willful and continued
failure to substantially perform his or her duties; (2) the
executives conviction of a felony; or (3) the
executives willful engagement in conduct that is
demonstrably and materially injurious to our Company, monetarily
or otherwise. Good Reason generally means:
(1) the assignment of the executive officer to duties
materially inconsistent with the executives authority and
duties prior to the change in control or a material reduction in
the executives duties and authorities; (2) a
reduction in or cancellation of the executives salary,
bonus, compensation or other benefit plans; (3) relocation
of the executive to a new location in excess of 50 miles
from the executives principal office immediately prior to
the Change in Control; or (4) any material breach of the
Executive
Change-in-Control
Severance Agreement by our Company.
30
Robert
Welding
The following table illustrates the potential payments and
benefits received by Robert Welding under various employment
termination events.
Other
Potential Post-Employment Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
Without
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Control and
|
|
|
|
Cause or
|
|
|
for Cause or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
Voluntary
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
without
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Cause or
|
|
|
|
with Good
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
|
|
Control
|
|
|
with Good
|
|
|
|
Reason
|
|
|
Good Reason
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
Only
|
|
|
Reason
|
Type of Payment
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Cash Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
|
$1,270,395
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$4,394,880
|
Long-Term Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested & Accelerated
Awards
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$2,724
|
|
|
$2,724
|
|
|
$2,724
|
|
|
$2,724
|
Restricted Stock Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested & Accelerated
Awards
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$1,960,088
|
|
|
$1,960,088
|
|
|
$1,960,088
|
|
|
$1,960,088
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
401(k) Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Non-Qualified 401(k) Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuation of Health &
Welfare Benefits
|
|
|
$11,593
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$23,186
|
Life Insurance and Death Benefit
Payout
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$686,700
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Disability Payments
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Perquisites & Tax Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excise Tax &
Gross-Up
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$2,053,448
|
Outplacement
|
|
|
$25,000
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$1,306,988
|
|
|
$0
|
|
|
$0
|
|
|
$2,649,512
|
|
|
$1,962,812
|
|
|
$1,962,812
|
|
|
$8,459,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
Stephanie
Kushner
The following table illustrates the potential payments and
benefits received by Stephanie Kushner under various employment
termination events.
Other
Potential Post-Employment Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
Without
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Control and
|
|
|
|
Cause or
|
|
|
for Cause or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
Voluntary
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
without
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Cause or
|
|
|
|
with Good
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
|
|
Control
|
|
|
with Good
|
|
|
|
Reason
|
|
|
Good Reason
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
Only
|
|
|
Reason
|
Type of Payment
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Cash Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
|
$476,625
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$1,588,750
|
Long-Term Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested & Accelerated
Awards
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$586
|
|
|
$586
|
|
|
$586
|
|
|
$586
|
Restricted Stock Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested & Accelerated
Awards
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$413,832
|
|
|
$413,832
|
|
|
$413,832
|
|
|
$413,832
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
401(k) Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Non-Qualified 401(k) Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuation of Health &
Welfare Benefits
|
|
|
$10,678
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$21,355
|
Life Insurance and Death Benefit
Payout
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Disability Payments
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Perquisites & Tax Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excise Tax &
Gross-Up
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$687,997
|
Outplacement
|
|
|
$25,000
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$512,303
|
|
|
$0
|
|
|
$0
|
|
|
$414,418
|
|
|
$414,418
|
|
|
$414,418
|
|
|
$2,737,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
David
McConnaughey
The following table illustrates the potential payments and
benefits received by David McConnaughey under various employment
termination events.
Other
Potential Post-Employment Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
Without
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Control and
|
|
|
|
Cause or
|
|
|
for Cause or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
Voluntary
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
without
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Cause or
|
|
|
|
with Good
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
|
|
Control
|
|
|
with Good
|
|
|
|
Reason
|
|
|
Good Reason
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
Only
|
|
|
Reason
|
Type of Payment
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Cash Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
|
$480,000
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$1,600,000
|
Long-Term Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested & Accelerated
Awards
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Restricted Stock Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested & Accelerated
Awards
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$303,156
|
|
|
$303,156
|
|
|
$303,156
|
|
|
$303,156
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
401(k) Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Non-Qualified 401(k) Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuation of Health &
Welfare Benefits
|
|
|
$21,356
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$42,711
|
Life Insurance and Death Benefit
Payout
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Disability Payments
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Perquisites & Tax Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excise Tax &
Gross-Up
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Outplacement
|
|
|
$25,000
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$526,356
|
|
|
$0
|
|
|
$0
|
|
|
$303,156
|
|
|
$303,156
|
|
|
$303,156
|
|
|
$1,970,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
Marc
Gustafson
The following table illustrates the potential payments and
benefits received by Marc Gustafson under various employment
termination events.
Other
Potential Post-Employment Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
Without
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Control and
|
|
|
|
Cause or
|
|
|
for Cause or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
Voluntary
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
without
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Cause or
|
|
|
|
with Good
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
|
|
Control
|
|
|
with Good
|
|
|
|
Reason
|
|
|
Good Reason
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
Only
|
|
|
Reason
|
Type of Payment
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Cash Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
|
$468,000
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$1,560,000
|
Long-Term Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested & Accelerated
Awards
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$454
|
|
|
$454
|
|
|
$454
|
|
|
$454
|
Restricted Stock Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested & Accelerated
Awards
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$417,040
|
|
|
$417,040
|
|
|
$417,040
|
|
|
$417,040
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
401(k) Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Non-Qualified 401(k) Plan
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuation of Health &
Welfare Benefits
|
|
|
$21,356
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$42,711
|
Life Insurance and Death Benefit
Payout
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Disability Payments
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Perquisites & Tax Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excise Tax &
Gross-Up
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
Outplacement
|
|
|
$25,000
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$514,356
|
|
|
$0
|
|
|
$0
|
|
|
$417,494
|
|
|
$417,494
|
|
|
$417,494
|
|
|
$2,045,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
Mark
Weber
The following table illustrates the potential payments and
benefits received by Mark Weber under various employment
termination events.
Other
Potential Post-Employment Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
Without
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Control and
|
|
|
|
Cause or
|
|
|
for Cause or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
Voluntary
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
without
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
Cause or
|
|
|
|
with Good
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
|
|
Control
|
|
|
with Good
|
|
|
|
Reason
|
|
|
Good Reason
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
Only
|
|
|
Reason
|
Type of Payment
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
Cash Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
|
|
$393,375
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$1,311,250
|
Long-Term Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested & Accelerated
Awards
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$454
|
|
|
$454
|
|
|
$454
|
|
|
$454
|
Restricted Stock Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested & Accelerated
Awards
|
|
|
$0
|
|
|
$0
|
|
|
$0
|
|
|
$340,048
|
|
|
$340,048
|
|
|
$340,048
|
|
|
$340,048
|
Retirement Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|