prec14a
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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PRELIMINARY
COPY
,
2009
Dear fellow stockholder,
You are cordially invited to attend the Federal Signal
Corporation 2009 Annual Meeting of Stockholders. The meeting
will be held
on , ,
2009, at a.m., local time,
at .
Details regarding admission to the meeting and the business to
be conducted are more fully described in the accompanying notice
of Annual Meeting and Proxy Statement.
At this years Annual Meeting, you will be asked to vote on
the election of directors and the ratification of
Ernst & Young LLPs appointment as Federal
Signals independent registered public accounting firm for
2009.
We hope you will be able to attend the meeting, but if you
cannot do so, it is important that your shares be represented.
We urge you to read the proxy statement carefully, and to use
the WHITE proxy card to vote for the Board of Directors
nominees by telephone or Internet, or by signing, dating, and
returning the enclosed WHITE proxy card in the postage-paid
envelope provided, whether or not you plan to attend the Annual
Meeting. Instructions are on the WHITE proxy card.
You should know that Warren B. Kanders has notified us that he
intends to nominate three nominees, including himself, in
opposition to the Boards recommended nominees for director.
We strongly urge you to vote for the nominees proposed by the
Board by using the enclosed WHITE proxy card and not to return
any proxy card sent to you by Mr. Kanders. If you have
previously returned a proxy card sent to you by
Mr. Kanders, you can revoke it by using the WHITE proxy
card to vote by telephone or Internet, or by signing, dating and
returning our Companys WHITE proxy card in the
postage-paid envelope provided. Only your last-dated proxy will
count.
Thank you for your continued support of our Company.
Sincerely,
William H. Osborne
President and Chief Executive Officer
1415 West 22nd Street
Oak Brook, Illinois 60523
Notice of Annual Meeting of Stockholders
To Be Held
on ,
2009
To the Stockholders of
Federal Signal Corporation:
The Annual Meeting of Stockholders of Federal Signal Corporation
for the year 2009 will be held at
the
on , ,
2009, at a.m., local time, for the following
purposes:
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1.
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To elect three (3) Class I directors;
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2.
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To ratify the appointment of Ernst & Young LLP as our
independent registered public accounting firm for 2009; and
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3.
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To transact such other business that may properly come before
the meeting or any adjournment(s) or postponement(s) of such
meeting.
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The Board of Directors has fixed the close of business on
March 3, 2009 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) or postponement(s) of the meeting.
In order to be admitted to the meeting, you must be a Federal
Signal stockholder or hold a proxy. If you are not a registered
holder, you should bring proof of stock ownership.
A copy of our Annual Report to our stockholders for the year
ended December 31, 2008, a proxy statement and a WHITE
proxy card accompany this notice.
The Board of Directors recommends that you vote FOR the
nominees for director proposed by the Board and FOR the approval
of the independent registered public accounting firm, using the
WHITE proxy card.
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Important Notice Regarding the Availability of Proxy
Materials for the Annual
Meeting of Stockholders to be Held
on ,
2009
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The following materials, also included with this Notice, are
available to be viewed, downloaded, and printed, at no charge,
by accessing the following Internet address:
http://www.federalsignal.com
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1. Proxy Statement for the Annual Meeting of Stockholders,
and
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2. 2008 Annual Report to Stockholders
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* * * Important Note * * *
YOUR VOTE IS IMPORTANT! Whether or not you expect to attend
the meeting, 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 the WHITE proxy
card;
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Go to the website address shown on the WHITE proxy card and
vote via the Internet; or
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Sign, date and promptly return the enclosed WHITE proxy card
in the postage-paid envelope provided. 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 WHITE
proxy card. If you have any questions or need assistance in
voting your shares of our common stock, please call Innisfree
M&A Incorporated, which is assisting us, toll-free at
(877) 800-5186
(Banks and brokers may call collect at
(212) 750-5833).
By order of the Board of Directors,
Jennifer L. Sherman
Corporate Secretary
,
2009
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 ,
2009
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
on , ,
2009 at a.m., local time, and any
adjournment(s) or postponement(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 I directors. The Board of
Directors has nominated James E. Goodwin, William H.
Osborne and Joseph R. Wright as its candidates for election as
Class I directors.
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OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE FOR JAMES E. GOODWIN, WILLIAM H.
OSBORNE AND JOSEPH R. WRIGHT USING THE WHITE PROXY CARD.
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2.
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To ratify the appointment of Ernst & Young LLP as our
independent registered public accounting firm for 2009.
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OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE FOR THE RATIFICATION OF
ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR 2009 USING THE WHITE PROXY CARD.
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3.
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To transact any other business that may properly come before the
Annual Meeting or any adjournment(s) or postponement(s) of such
meeting.
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This proxy statement and the accompanying WHITE proxy card were
first mailed to stockholders on or
about ,
2009.
Voting
Your Shares
You may vote on the above matters in the following ways:
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By Telephone or Internet: You may vote by
telephone or Internet by following the instructions included on
the enclosed WHITE proxy card.
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By Written Proxy: You may vote by written
proxy by signing, dating and returning the enclosed WHITE proxy
card in the postage-paid envelope provided.
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In Person: If you are a record stockholder,
you may vote in person at the Annual Meeting. You are a record
stockholder if your shares are registered in your name. If your
shares are in the name of your broker or bank, your shares are
held in Street-name and you are not a record
stockholder. If your shares are held in Street-name and you wish
to vote in person at the Annual Meeting, you will need to
contact your broker or bank to obtain a legal proxy allowing
attendance at the Annual Meeting. If you plan to attend the
Annual Meeting in person, please bring proper identification and
proof of ownership of your shares.
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You will be entitled to vote at the Annual Meeting only if you
held shares of our common stock of record at the close of
business on March 3, 2009, the record date. You
will be entitled to one vote for each share you owned on the
record date for each of three directorships to be elected and on
each other matter presented at the meeting. On the record date,
there were 47,592,751 shares of common stock issued and
outstanding.
Our By-Laws provide that a majority of the outstanding shares,
present in person or by proxy, will constitute a quorum at the
Annual 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 well as
broker non-votes, as shares represented at the
Annual Meeting and counted toward establishing the presence of a
quorum. In the event that there are not sufficient votes for a
quorum or to approve the items of business at the time
1
of the Annual Meeting, our Company reserves the right to adjourn
or postpone the Annual Meeting in order to permit our Company to
solicit additional proxies.
You can direct how your shares will be voted at the Annual
Meeting by signing, dating and returning the enclosed WHITE
proxy card. If you return a WHITE proxy card, but no specific
voting instructions are given with respect to a proposal, your
shares will be voted for each of the three nominees
named on the WHITE proxy card and for the
ratification of the appointment of Ernst & Young LLP
as our independent auditors for 2009, as applicable.
If you hold your shares in more than one account, you will
receive a WHITE proxy card for each account. To ensure that all
of your shares are voted, please vote by telephone or Internet
for each account, or sign, date and return a WHITE proxy card
for each account in the postage-paid envelope provided.
We have received a notice from Warren B. Kanders, a stockholder
of our Company, that he intends to nominate at the Annual
Meeting, and to solicit proxies in favor of, his own slate of
three nominees for election to your Board of Directors as
Class I directors. As a result, you may receive proxy
solicitation materials from Mr. Kanders, including a proxy
statement and alternate proxy card. To ensure stockholders have
our Companys latest proxy information and materials to
vote, the Board expects to conduct multiple mailings prior to
the date of the Annual Meeting, each of which will include a
WHITE proxy card regardless of whether or not you have
previously voted. Only the latest dated proxy card you vote will
be counted.
THE BOARD OF DIRECTORS URGES YOU NOT TO SIGN OR RETURN ANY
PROXY CARD SENT TO YOU BY MR. KANDERS. Even if you have
previously signed a proxy card sent by Mr. Kanders, you
have every right to change your vote by using your WHITE proxy
card to vote by telephone or Internet, or by signing, dating and
returning the enclosed WHITE proxy card in the postage-paid
envelope provided. Only the latest dated proxy card you vote
will be counted. We urge you to disregard any proxy card sent to
you by Mr. Kanders.
The Board of Directors has NOT endorsed
Mr. Kanders nominations and urges you to vote
FOR the Boards nominees for director using the
WHITE proxy card TODAY. Please do not return any proxy card sent
to you by Mr. Kanders even as a protest vote.
Broker
Non-Votes
Under the rules that govern brokers who have record ownership of
shares that they hold in Street-name for clients who
beneficially own such shares, a broker may vote such shares in
its discretion on routine matters if the broker has
not received voting instructions from its client, but a broker
cannot exercise its own discretion to vote such shares on
certain non-routine matters absent voting
instructions from its client. When a broker votes a
clients shares on some but not all of the proposals
presented at the meeting, each non-routine proposal for which
the broker cannot vote because it has not received a voting
instruction from the client is referred to as a broker
non-vote.
If Mr. Kanders solicits proxies, then each of the proposals
will be considered a non-routine matter for any
brokerage accounts solicited by Mr. Kanders. Thus, if your
shares are held through a broker and Mr. Kanders provides
you with proxy solicitation materials through your broker and
you do not provide instructions to your broker as to how your
shares are to be voted in the election of directors, your broker
would not be able to vote your shares on any of the proposals
after the time Mr. Kanders commences that solicitation.
If Mr. Kanders does not solicit proxies, each of the
proposals will be a routine matter, and a broker will be
permitted to vote its clients shares in the brokers
discretion absent instructions from its client.
We urge you to provide instructions to your broker to ensure
that your votes will be counted on these important matters. If
Mr. Kanders solicits proxies to elect one or more of his
nominees to our Board of Directors, and a broker cannot vote a
clients shares because the broker has not received voting
instructions from the client on any of the proposals presented
at this meeting, then such clients shares will not be
voted in person or by proxy and will not count for purposes of
determining whether a quorum is present. You should vote your
shares by following the instructions provided on the WHITE proxy
card and returning your WHITE proxy card to your broker to
ensure that a WHITE proxy card is voted on your behalf.
Votes
Required to Elect Directors and Ratify the Appointment of
Ernst & Young for 2009
Our By-Laws provide that, in an uncontested election, a nominee
for director shall be elected to the Board if a quorum is
present and if the votes cast for such
nominees election exceed the withhold votes
cast against such
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nominees election. In addition, our Corporate Governance
Guidelines include a director resignation policy that requires
each director nominee, prior to each election of directors at an
annual meeting, to submit to the Board an irrevocable letter of
resignation from the Board which will become effective if that
director does not receive the necessary votes and the Board
determines to accept such resignation. In such circumstances,
the Boards Nominating and Governance Committee will
evaluate and make a recommendation to the Board with respect to
the submitted resignation. The Board will take action on the
recommendation within 180 days following the
stockholders meeting at which the election occurred. In
such circumstances, we will publicly disclose the Boards
decision including, if applicable, the reasons for rejecting a
resignation.
The majority voting standard does not apply, however, if the
number of nominees for director exceeds the number of directors
to be elected. Our By-Laws provide that in such circumstances,
directors will instead be elected by a plurality of the votes
cast. Because the number of nominees timely nominated for
election at the Annual Meeting exceeds the number of directors
to be elected at the meeting, the election of directors at the
Annual Meeting is a contested election. As a result, directors
will be elected by a plurality of the votes cast at the Annual
Meeting, meaning that the three (3) nominees receiving the
most votes will be elected. Shares cannot be voted for more than
three (3) nominees for the election of directors at the
Annual Meeting, and only one vote per share may be cast for a
given nominee. If you return more than one proxy card, only the
latest dated proxy card you vote will be counted.
Only votes cast FOR a nominee will be counted at the
Annual Meeting. Unless indicated otherwise by your WHITE proxy
card, if you vote using a WHITE proxy card, your shares will be
voted FOR the three (3) nominees recommended by
the Board of Directors and named in this proxy statement.
Stockholder instructions on the accompanying WHITE proxy card to
withhold authority to vote for one or more of the nominees, and
abstentions, will result in those nominees receiving fewer
FOR votes but will not count against a
nominees election.
If Mr. Kanders were to withdraw his nomination of three
nominees for director prior to the election of Class I
directors at the Annual Meeting, then the election would be
uncontested and the majority voting standard described above
would apply.
The proposal to ratify the appointment of Ernst &
Young LLP as our independent registered public accounting firm
for 2009 will require the affirmative vote of a majority of the
votes cast affirmatively or negatively at the Annual Meeting for
approval. An abstention will not count as a vote cast against
these matters.
Shares
Held in 401(k) Plan
On March 3, 2009, our 401(k) Plan, which is called the
Federal Signal Corporation Retirement Savings Plan, held
1,347,493 shares of our common stock in the name of
Vanguard Fiduciary Trust Company, as trustee of the 401(k)
Plan. If you are a participant in the 401(k) Plan, you may
instruct Vanguard how to vote shares of common stock credited to
your 401(k) Plan account by indicating your instructions on your
WHITE proxy card and returning it
by ,
2009. A properly executed proxy card will be voted by Vanguard
as directed. If no proper voting direction is received,
Vanguard, in its capacity as the 401(k) Plan Trustee, will vote
your shares held in the 401(k) Plan in the same proportion as
votes received from other participants in the 401(k) Plan.
Revocability
of Proxy
You may revoke your proxy at any time before it is voted by:
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voting by telephone or Internet on a later date, or delivering a
later-dated proxy card prior to or at the Annual Meeting,
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filing a written notice of revocation with our Corporate
Secretary, or
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attending the Annual Meeting and voting your shares in person.
Attendance alone at the Annual Meeting will not revoke a proxy.
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Householding
of Proxies
The Securities and Exchange Commission has adopted rules that
permit companies and intermediaries such as brokers to satisfy
delivery requirements for annual reports and proxy statements
with respect to two or more stockholders sharing the same
address by delivering a single annual report
and/or proxy
statement addressed to those stockholders. This process, which
is commonly referred to as householding, potentially
provides extra convenience for stockholders and cost savings for
companies. We and some brokers may household annual reports
3
and proxy materials, delivering a single annual report
and/or proxy
statement to multiple stockholders sharing an address unless
contrary instructions have been received from the affected
stockholders.
Once you have received notice from your broker or us that they
or we will be householding materials to your address,
householding may continue until you are notified otherwise or
until you revoke your consent. You may request to receive at any
time a separate copy of our annual report or proxy statement, by
sending a written request to Federal Signal Corporation,
1415 West 22nd Street, Suite 1100, Oak Brook, IL
60523, Attn: Corporate Secretary, or call
630-954-2008.
If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate annual
report
and/or proxy
statement in the future, please notify your broker if your
shares are held in a brokerage account or us if you hold
registered shares. You can notify us by sending a written
request to Federal Signal Corporation,
1415 W. 22nd Street, Suite 1100, Oak Brook,
IL 60523, Attn: Corporate Secretary, or call the number above.
If, at any time, you and another stockholder sharing the same
address wish to participate in householding and prefer to
receive a single copy of our Annual Report
and/or proxy
statement, please notify your broker if your shares are held in
a brokerage account or us if you hold registered shares. You can
notify us by sending a written request to Federal Signal
Corporation, 1415 West 22nd Street, Suite 1100,
Oak Brook, IL 60523, Attn: Corporate Secretary, or call the
number above.
Solicitation
Costs
We will bear all costs relating to our solicitation of proxies.
We have retained the services of Innisfree M&A Incorporated
to solicit proxies for the Annual Meeting for a fee not to
exceed
$
and agreed to reimburse them for certain expenses. Innisfree
M&A Incorporated will employ approximately
people for the solicitation. As discussed above,
Mr. Kanders has indicated that he will nominate three
directors to stand for election at the Annual Meeting. As a
result, we have and will continue to incur substantial
additional costs in connection with the Annual Meeting.
Increased costs will include increased fees of outside counsel
and public relations advisors, increased printing and mailing
costs for additional solicitation materials, including the
reimbursement of reasonable expenses of banks, brokerage houses
and other agents incurred in forwarding solicitation materials
to beneficial owners as described above, and the costs of
retaining an independent inspector of election. We estimate that
the aggregate cost (exclusive of litigation, if any) to us for
the solicitation of proxies will be approximately
$ ,
of which approximately
$
has been incurred to date. The additional costs do not include
the costs represented by the regular salaries and wages of our
employees and officers.
Appendix A to this proxy statement sets forth
certain information relating to our directors, nominees and
executive officers who may be soliciting proxies on our behalf.
These persons will not receive any additional compensation for
assisting in the solicitation, but may be reimbursed for
reasonable out-of-pocket expenses in connection with the
solicitation.
Stockholder
Questions
If you have any questions about the Annual Meeting or if you
need additional copies of this proxy statement or the enclosed
WHITE proxy card, please contact the firm assisting us with the
solicitation of proxies:
INNISFREE
M&A INCORPORATED
STOCKHOLDERS
MAY CALL TOLL-FREE:
(877) 800-5186
(BANKS AND BROKERS MAY CALL COLLECT:
(212) 750-5833)
4
OWNERSHIP
OF OUR COMMON STOCK
The following table sets forth information as of March 3,
2009 with respect to beneficial ownership of our common stock by:
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each person we know to beneficially own 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 Board-proposed director nominees;
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each of our executive officers named in the Summary Compensation
Table; and
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all of our 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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4,617,077
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(3)
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9.7
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%
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101 John F. Kennedy Parkway
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Short Hills, NJ 07078
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Heartland Advisors, Inc.
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3,689,050
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(4)
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7.8
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%
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789 N. Water Street
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Milwaukee, WI 53202
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Dimensional Fund Advisors, LP
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3,146,852
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(5)
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6.6
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%
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Palisades West, Building One
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6300 Bee Cave Road
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Austin, TX 78746
|
|
|
|
|
|
|
|
|
Barclays Global Investors, NA
|
|
|
2,942,822
|
(6)
|
|
|
6.2
|
%
|
400 Howard Street
|
|
|
|
|
|
|
|
|
San Francisco, CA 94105
|
|
|
|
|
|
|
|
|
Keeley Asset Management Corp.
|
|
|
2,870,000
|
(7)
|
|
|
6.0
|
%
|
401 S. LaSalle Street, Suite 1201
|
|
|
|
|
|
|
|
|
Chicago, IL 60605
|
|
|
|
|
|
|
|
|
Each Director, Director Nominee and Named Executive Officer and
Directors and all Executive Officers as a Group: (8, 9)
|
|
|
|
|
|
|
|
|
James C. Janning, Chairman and Director
|
|
|
70,705
|
|
|
|
|
*
|
Charles R. Campbell, Director
|
|
|
69,272
|
|
|
|
|
*
|
Robert M. Gerrity, Director
|
|
|
37,757
|
|
|
|
|
*
|
James E. Goodwin, Director
|
|
|
84,961
|
|
|
|
|
*
|
Robert S. Hamada, Director
|
|
|
39,184
|
|
|
|
|
*
|
Paul W. Jones, Director
|
|
|
53,487
|
|
|
|
|
*
|
Dennis J. Martin, Director
|
|
|
6,867
|
|
|
|
|
*
|
John McCartney, Director
|
|
|
37,137
|
|
|
|
|
*
|
Brenda L. Reichelderfer, Director
|
|
|
19,855
|
|
|
|
|
*
|
Joseph R. Wright, Director
|
|
|
4,460
|
|
|
|
|
*
|
William H. Osborne, President and CEO
|
|
|
58,159
|
|
|
|
|
*
|
William G. Barker, III, Senior Vice President and CFO
|
|
|
12,590
|
|
|
|
|
*
|
Stephanie K. Kushner, former Senior Vice President and Chief
Financial Officer
|
|
|
29,494
|
|
|
|
|
*
|
David R. McConnaughey, President, Safety and Security Systems
Group
|
|
|
80,185
|
|
|
|
|
*
|
Peter R. Guile, President of former subsidiary
E-ONE,
Inc.
|
|
|
12,503
|
|
|
|
|
*
|
Jennifer L. Sherman, Senior Vice President, Human Resources and
General Counsel
|
|
|
102,421
|
|
|
|
|
*
|
Mark D. Weber, President, Environmental Solutions Group
|
|
|
143,361
|
|
|
|
|
*
|
All Directors and Executive Officers as a Group
(18 persons)(10)
|
|
|
928,266
|
|
|
|
1.95
|
%
|
5
|
|
|
(1) |
|
Totals include shares subject to stock options exercisable
within 60 days of March 3, 2009, as follows:
Mr. Janning, 34,941; Mr. Campbell, 27,553;
Mr. Gerrity, 19,553; Mr. Goodwin, 61,104;
Mr. Hamada, 19,553; Mr. Jones, 27,553;
Mr. McCartney, 11,996; Ms. Reichelderfer, 2,817;
Mr. McConnaughey, 35,867; Ms. Sherman, 63,392;
Mr. Weber, 88,817; and all directors and executive officers
as a group, 448,548. 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, 1,461; Mr. Campbell, 1,169;
Mr. Gerrity, 1,169; Mr. Goodwin, 1,169;
Mr. Hamada, 1,169; Mr. Jones, 1,169;
Mr. McCartney, 1,169; Ms. Reichelderfer, 906;
Mr. Osborne, 58,159; Mr. Barker, 12,590;
Mr. McConnaughey, 43,100; Ms. Sherman, 15,700; and
Mr. Weber, 26,000. Totals also include shares held in our
401(k) Plan, as follows: Ms. Sherman, 11,052; and
Mr. Weber, 6,453. Totals do not include shares held in our
Savings Restoration Plan (formerly Rabbi Trust), as follows:
Mr. Hamada 2,772; Mr. Osborne, 13,484;
Ms. Sherman, 2,358; Mr. Weber, 261; and all directors
and executive officers as a group, 27,053. Excludes 29,000
restricted stock units granted to an executive officer which
vest in full on the third anniversary of the date of grant. |
|
(2) |
|
Based upon 47,592,751 shares of common stock issued and
outstanding as of March 3, 2009 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 March 3, 2009. The use
of * denotes percentages of less than 1%. |
|
(3) |
|
Based solely on a Schedule 13G, Amendment No. 4, filed
on January 15, 2009 with the Securities and Exchange
Commission in which the stockholder reported that as of
December 31, 2008, 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. |
|
(4) |
|
Based solely on a Schedule 13G filed on February 11,
2009 with the Securities and Exchange Commission in which the
stockholder reported that as of December 31, 2008,
Heartland Advisors, Inc. had shared voting power with respect to
3,654,350 shares and shared dispositive power with respect
to 3,689,050 shares as a registered investment advisor.
These shares may be deemed beneficially owned by both Heartland
Advisors, Inc., by virtue of its investment discretion and
voting authority granted by certain clients, which may be
revoked at any time; and William J. Nasgovitz, as a result of
his ownership interest in Heartland Advisors, Inc. Heartland
Advisors, Inc. and Mr. Nasgovitz each specifically disclaim
beneficial ownership of these shares. |
|
(5) |
|
Based solely on a Schedule 13G, Amendment No. 2, filed
on February 9, 2009 with the Securities and Exchange
Commission in which the stockholder reported that as of
December 31, 2008, it had sole voting power with respect to
3,030,213 shares and sole dispositive power with respect to
3,146,852 shares in its capacity as an investment advisor
registered under the Investment Advisors Act of 1940 to
investment companies and as investment manager to certain other
commingled group trusts and separate accounts. Dimensional Fund
Advisors disclaims beneficial ownership of these shares. |
|
(6) |
|
Based solely on a Schedule 13G, filed on February 5,
2009 with the Securities and Exchange Commission, Barclays
Global Investors, NA and a group of affiliated entities reported
that they had sole power to vote and to dispose of shares as of
December 31, 2008 as follows: (a) Barclays Global
Investors, NA had sole voting power with respect to
1,073,138 shares and sole dispositive power with respect to
1,260,216 shares, (b) Barclays Global
Fund Advisors had sole voting power with respect to
1,379,931 shares and sole dispositive power with respect to
1,648,348 shares, (c) Barclays Global Investors, Ltd.
had sole dispositive power with respect to 32,726 shares,
and (d) Barclays Global Investors Australia Limited had
sole voting and sole dispositive power with respect to
1,532 shares. The common stock reported is held by the
Barclays entities in trust accounts for the economic benefit of
the beneficiaries of those accounts. |
|
(7) |
|
Based solely on a Schedule 13G, Amendment No. 1, filed
on February 13, 2009 with the Securities and Exchange
Commission in which the stockholder reported that as of
December 31, 2008, it had sole voting and dispositive power
over these shares as an investment company registered under the
Investment Company Act of 1940 and as an institutional
investment manager. The filing was made on behalf of the
stockholder and Keeley Small Cap Fund, a Series of Keeley Funds,
Inc. |
|
(8) |
|
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 herein, each
director and officer claims sole voting and investment power
with respect to the shares listed beside his or her name. |
|
(9) |
|
All of our directors and officers use our Company address which
is 1415 West 22nd Street, Suite 1100, Oak Brook, IL
60523. |
|
(10) |
|
Excludes Ms. Kushner and Mr. Guile who left the
Company on December 30, 2008 and August 5, 2008,
respectively. |
6
PROPOSAL 1
ELECTION OF DIRECTORS
Our Companys Board of Directors consists of ten directors
divided into three classes. Classes I and II each
consist of three members and Class III consists of four
members. Each class is elected for a term of three years and the
classes together are staggered so that one class term expires
each year.
James E. Goodwin, William H. Osborne and Joseph R. Wright have
been nominated by our Board of Directors as a Class I
director for election at the Annual Meeting for a term of three
years to expire at the 2012 Annual Meeting or until his
successor is elected and qualified. Mr. Osborne has served
as our President and Chief Executive Officer since
September 15, 2008, and Messrs. Goodwin and Wright are
current directors standing for re-election. All of the nominees
have been recommended for nomination by the Board of Directors
acting on the recommendation of the Nominating and Governance
Committee of the Board of Directors, which consists solely of
independent members of the Board of Directors. Current
Class I director James C. Janning is not standing for
reelection at the Annual Meeting.
Unless you withhold authority to vote for the election of
directors, your WHITE proxy card will be voted FOR
the election of Messrs. Goodwin, Osborne and Wright. Each
of the nominees has consented to serve if elected. If any of the
nominees should decline or be unable to serve as a director, the
persons named in the accompanying WHITE proxy card will vote in
accordance with their best judgment. We have no reason to
believe that any of the nominees will be unwilling or unable to
serve. However, if any nominee is not available for election,
the Board may name a substitute nominee for whom votes will be
cast.
Pursuant to our By-Laws, in an uncontested election, a nominee
for director shall be elected to the Board if a quorum is
present and if the votes cast for such
nominees election exceed the withhold votes
cast against such nominees election. The majority voting
standard does not apply, however, if the number of nominees for
director exceeds the number of directors to be elected. Our
By-Laws provide that in such circumstances, directors will
instead be elected by a plurality of the votes cast. Because the
number of nominees timely nominated for election at the Annual
Meeting exceeds the number of directors to be elected at the
meeting, the election of directors at the Annual Meeting is a
contested election. As a result, directors will be elected by a
plurality of the votes cast at the Annual Meeting, meaning that
the three (3) nominees receiving the most votes will be
elected. Shares cannot be voted for more than three
(3) nominees for the election of directors at the Annual
Meeting, and only one vote per share may be cast for a given
nominee. If you return more than one proxy card, only the latest
dated proxy card you vote will be counted.
Our Board believes that the re-election of Messrs. Goodwin
and Wright, and the election of Mr. Osborne, our President
and Chief Executive Officer, will further the best interests of
all of our stockholders, as opposed to the election of the
nominees proposed by Mr. Kanders.
Our Board urges you to vote to elect Messrs. Goodwin,
Osborne and Wright as Class I directors by marking,
signing, dating and returning the enclosed WHITE proxy card only
and not to sign or return any proxy card provided by
Mr. Kanders.
Information
Regarding Directors and Nominees
Information regarding the Board-recommended nominees for
election and the directors continuing in office is set forth
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Year
|
|
|
|
|
|
|
First
|
|
Present
|
|
|
|
|
|
|
Became
|
|
Term
|
|
|
Name
|
|
Age
|
|
Director
|
|
Expires
|
|
Principal Occupation or Employment for Last Five Years(1)
|
|
Class I Director Nominees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James E. Goodwin
|
|
|
64
|
|
|
|
2005
|
|
|
|
2009
|
|
|
Mr. Goodwin served as interim President and Chief Executive
Officer of our Company from December 2007 through September 15,
2008. Prior to that, he was an independent business consultant
from October 2001 to December 2007. From July 1999 to October
2001, Mr. Goodwin served as Chairman and Chief Executive Officer
of United Airlines, a worldwide airline operator, 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); JB Technologies (NYSE: JBT); and
First Chicago Bank & Trust.
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Year
|
|
|
|
|
|
|
First
|
|
Present
|
|
|
|
|
|
|
Became
|
|
Term
|
|
|
Name
|
|
Age
|
|
Director
|
|
Expires
|
|
Principal Occupation or Employment for Last Five Years(1)
|
|
William H. Osborne
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
Mr. Osborne has served as the Companys President and Chief
Executive Officer since September 15, 2008. Prior to joining the
Company, Mr. Osborne held a number of senior level positions
with Ford Motor Company. Most recently, he served as President
and Chief Executive Officer of Ford of Australia. From 2005 to
2008, he served as the President and Chief Executive Officer of
Ford of Canada; and from 2003 to 2005, he served as the
Executive Director, Pickup Truck and Commercial Vehicles, North
American Truck Business of Ford Motor Company.
|
Joseph R. Wright
|
|
|
70
|
|
|
|
2008
|
|
|
|
2009
|
|
|
Mr. Wright is Chief Executive Officer and serves as a director
of Scientific Games Corporation, a supplier of technology-based
products, systems and services to the gaming industry, that is
traded on the NASDAQ (NASDAQ:SGMS). He also serves as a
Vice-Chairman of the Board of Terremark Worldwide Inc., a global
provider of utility-enabled managed IT infrastructure solutions,
that is traded on the NASDAQ (NASDAQ:TMRK). Mr. Wright
previously served as Chairman of the Board of Intelsat Ltd., the
worlds leading provider of fixed satellite services, from
July 2006 to May 2008 and, prior to this position, from August
2001 to July 2006, he served as Chief Executive Officer of
PanAmSat, a publicly-listed satellite-based services business,
which was acquired by Intelsat in 2006. Mr. Wright served in the
U.S. Government under President Reagan as Deputy Director
then Director of the Federal Office of Management and Budget in
the Executive Office of the President and a member of the
Cabinet, and earlier as Deputy Secretary of Commerce. He
received the Distinguished Citizens Award from President Reagan.
Mr. Wright is a member of the Department of Defenses
Business Board and Science Board task force on interoperability.
|
Class II Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John McCartney
|
|
|
56
|
|
|
|
2005
|
|
|
|
2010
|
|
|
Mr. McCartney is Chairman of A.M. Castle & Co., a specialty
steel products distributor that is traded on the New York Stock
Exchange (NYSE:CAS). Mr. McCartney served as the Chairman of
Westcon Group, Inc., a specialty distributor of networking and
communications equipment until March 2009, and remains a
director on its Board. 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) and Datatec Ltd., an
international technology holding company, whose shares are
listed in Johannesburg and London (JSE:DTC).
|
Robert M. Gerrity
|
|
|
71
|
|
|
|
2003
|
|
|
|
2010
|
|
|
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 (PPK:TO).
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Year
|
|
|
|
|
|
|
First
|
|
Present
|
|
|
|
|
|
|
Became
|
|
Term
|
|
|
Name
|
|
Age
|
|
Director
|
|
Expires
|
|
Principal Occupation or Employment for Last Five Years(1)
|
|
Robert S. Hamada
|
|
|
71
|
|
|
|
2003
|
|
|
|
2010
|
|
|
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 New York Stock Exchange (NYSE:CAS), and Flying Food Group, a
provider of in-flight catering services.
|
Class III Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles R. Campbell
|
|
|
69
|
|
|
|
1998
|
|
|
|
2011
|
|
|
Mr. Campbell is a retired consultant previously working for The
Everest Group, a management consulting firm. He was a partner in
The Everest Group from 1997 to 2004.
|
Paul W. Jones
|
|
|
60
|
|
|
|
1998
|
|
|
|
2011
|
|
|
Mr. Jones is Chairman and Chief Executive Officer 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
December 2005. Mr. Jones is also a director of Bucyrus
International, Inc., a manufacturer of mining and construction
machinery that is traded on the NASDAQ (NASDAQ:BUCY). Mr. Jones
also serves as a member of the Board of Directors of the United
States Chamber of Commerce and the National Association of
Manufacturers and on the Board of Trustees of Manufacturers
Alliance/MAPI, and as a member of the Business Roundtable.
|
Brenda L. Reichelderfer
|
|
|
50
|
|
|
|
2006
|
|
|
|
2011
|
|
|
Ms. Reichelderfer is Senior Vice President and Managing Director
of TriVista Business Group, a boutique management consulting and
advisory firm. Ms. Reichelderfer is a member of the Technology
Transfer Advisory Board of The Missile Defense Agency, a
division of the United States Department of Defense. Until May
2008, Ms. Reichelderfer was Senior Vice President (from 2001)
and Chief Technology Officer (from 2005) of ITT Corporation, a
global engineering and manufacturing company that is traded on
the New York Stock Exchange (NYSE:ITT).
|
Dennis J. Martin
|
|
|
58
|
|
|
|
2008
|
|
|
|
2011
|
|
|
Mr. Martin has been an independent business consultant since
2005. From January to December 2008, Mr. Martin served as Vice
President of BD Martin Group LLC, a consulting firm. From May
2001 to August 2005, Mr. Martin was the Chairman, President and
Chief Executive Officer of General Binding Corporation, a
manufacturer and marketer of binding and laminating office
equipment. Mr. Martin is a director of HNI Corporation, a
provider of office furniture and hearths that is traded on the
New York Stock Exchange (NYSE:HNI). Mr. Martin is also a
director of Coleman Cable, Inc., a manufacturer and innovator of
electrical and electronic wire and cable products that is traded
on the NASDAQ (NASDAQ:CCIX).
|
|
|
|
(1) |
|
The data contained in this table is based upon information
furnished to our Company by the individuals named above. |
Each of Messrs. Martin and Wright was appointed to the
Board in 2008 pursuant to the terms of a Settlement Agreement,
dated March 12, 2008, between the Company and certain
stockholders of the Company, including RCG Starboard Advisors,
LLC, Ramius, LLC and certain entities and individuals affiliated
with them (such stockholders collectively, the Ramius
Group). Pursuant to the Settlement Agreement and as of the
date thereof, the Board appointed Mr. Martin as a
Class I director to fill the then existing vacancy on the
Board. The Company also agreed to
9
increase the size of the Board from nine to ten directors
effective as of the date of the Companys 2008 Annual
Meeting of Stockholders. To fill the new position resulting from
the increase in the size of the Board, the Company nominated
Mr. Martin for election at the 2008 Annual Meeting as a
Class III director for a three-year term expiring at the
Companys Annual Meeting of Stockholders in 2011. Following
the 2008 Annual Meeting and pursuant to the terms of the
Settlement Agreement, the Ramius Group recommended, and on
April 23, 2008 the Board appointed, Mr. Wright to fill
the vacancy in Class I on the Board resulting from the
election of Mr. Martin as a Class III director at the
2008 Annual Meeting. The Settlement Agreement was filed as an
exhibit to the Companys current report on
Form 8-K
filed with the Securities and Exchange Commission on
March 13, 2008.
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
and all of the Board-recommended nominees for director, other
than Mr. Osborne, qualify as independent. 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
and nominees in questionnaires and other certifications
concerning the relationships that we may have with each director
or nominee (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 or
nominee is affiliated.
Meetings
of the Board of Directors and Committees
During 2008, our Board of Directors held a total of thirteen
meetings. The Compensation and Benefits Committee held seven
meetings; the Nominating and Governance Committee held five
meetings; the Audit Committee held seven meetings; and the
Executive Committee held no meetings. Our Corporate Governance
Guidelines require each director to regularly attend meetings of
the Board of Directors and all Board Committees upon which the
director serves. Each director attended at least 75% 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
2008 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. Descriptions of our standing committees
follow:
Audit Committee The Audit Committee of the
Board of Directors is responsible for monitoring:
|
|
|
|
|
the integrity of our financial statements;
|
|
|
|
the qualifications and independence of our independent
registered public accounting firm;
|
|
|
|
the performance of our internal audit function and independent
registered public accounting firm; and
|
|
|
|
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.
|
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 Vice President of Internal Audit and
the Senior Vice President and Chief Financial Officer.
Additionally, the Audit Committee has direct and regular access
to 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.
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,
Robert S. Hamada and Dennis J. Martin. James C. Janning was a
member of the Audit Committee until April 21, 2008 when he
was replaced by Mr. Martin, who joined our Board in March
2008. Mr. Goodwin joined the Audit
10
Committee on October 27, 2008, after he resigned from
service as our interim President and Chief Executive Officer.
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. The
Committee also advises the Board of Directors as to appropriate
compensation for serving as a member of our Board of Directors.
Stockholders may recommend individuals for the Nominating and
Governance Committee to consider as potential directors by
giving written notice to our Corporate Secretary at least
90 days but not more than 120 days prior to the first
anniversary of the preceding years Annual Meeting, along
with the specific information required by our By-Laws,
including, but not limited to, the name and address of the
nominee; the number of shares of our common stock beneficially
owned by the stockholder (including associated persons)
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. If you would
like to receive a copy of the provisions of our By-Laws setting
forth all of these requirements, you should write to our
executive offices, Attn: Corporate Secretary. The Nominating and
Governance Committee has not adopted any specific procedures for
considering the recommendation of director nominees by
stockholders, but will consider stockholder nominees for new
directorship on the same basis as other nominees.
The Nominating and Governance Committee has set no specific
minimum qualification for a nominee to the Board of Directors
although under our revised Corporate Governance Guidelines, no
person may stand for election as a director after attaining
age 72 without a waiver from the Board. Generally, in
evaluating a director candidate, the Nominating and Governance
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, Brenda L.
Reichelderfer and James E. Goodwin. Mr. Goodwin joined the
Nominating and Governance Committee on October 27,
2008, shortly after he resigned from service as our interim
President and Chief Executive Officer.
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 Compensation and Benefits Committee has the authority to
establish the objectives of compensation, to determine the
components of compensation, and to establish and evaluate
performance goals. The functions of the Compensation and
Benefits Committee are further described in this proxy statement
under the heading Compensation Discussion and
Analysis beginning at page 16. 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 McCartney
(Chairman), James C. Janning, Paul W. Jones, Brenda L.
Reichelderfer and Joseph R. Wright. Mr. Campbell was a
member of the Compensation and Benefits Committee until
April 21, 2008 when he was replaced by Mr. Janning.
Mr. Wright joined the Compensation and Benefits Committee
in connection with his appointment to the Board in April 2008.
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.
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 James C. Janning
11
(Chairman), Charles R. Campbell, Robert S. Hamada and John
McCartney. Mr. Goodwin was a member and chaired this
committee until October 27, 2008, when Mr. Janning was
appointed Chairman.
Director
Compensation in the Last Fiscal Year
The following table sets forth information concerning
compensation earned by our non-employee directors in fiscal year
2008. Mr. Goodwin was appointed the interim President and
Chief Executive Officer of our Company on December 11, 2007
and served in that capacity until September 15, 2008.
Mr. Goodwin, while serving as our interim President and
Chief Executive Officer, did not receive compensation as an
independent director. With the appointment of Mr. Osborne
as our new President and Chief Executive Officer beginning
September 15, 2008, Mr. Goodwin resumed receiving
independent director compensation. Mr. Goodwins
compensation as an executive officer for 2008 is disclosed in
the Summary Compensation Table for executive officers.
Non-Employee
Director Compensation in Fiscal Year 2008
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Fees Earned
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or Paid
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Option Awards ($)
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Name
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in Cash ($)(1)
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Stock Awards ($)(2)
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(3)
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Total ($)
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James C. Janning(4)
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$162,616
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$75,000
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$19,600
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$257,216
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Charles R. Campbell
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$84,363
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$60,000
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$15,687
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$160,050
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Robert M. Gerrity
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$77,487
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$60,000
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$15,687
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$153,174
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James E. Goodwin(5)
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$19,969
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$0
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$22,318
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$42,287
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Robert S. Hamada
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$83,149
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$60,000
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$15,687
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$159,176
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Paul W. Jones
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$68,000
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$60,000
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$15,687
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$143,687
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Dennis J. Martin(6)
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$55,707
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$60,000
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$5,302
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$121,009
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John McCartney
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$79,500
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$60,000
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$20,544
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$160,044
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Brenda L. Reichelderfer(7)
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$73,614
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$60,000
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$17,461
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$151,075
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Joseph R. Wright(6)
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$48,794
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$0
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$5,032
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$53,826
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(1) |
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Includes the following share amounts which were awarded in lieu
of cash fees: Mr. Gerrity, 1,538 shares;
Mr. Hamada, 3,628 shares; Mr. Martin,
2,534 shares; Mr. McCartney, 2,962 shares;
Ms. Reichelderfer, 6,424 shares; and Mr. Wright,
4,460 shares. |
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(2) |
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Reflects the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended December 31,
2008 in accordance with SFAS 123(R). The following awards
were granted to the directors on April 22, 2008, at a
closing share price of $13.85: 5,416 shares of common stock
to Mr. Janning as Chairman; and 4,333 shares of common
stock to each of Messrs. Campbell, Gerrity, Hamada, Jones,
Martin, McCartney, and Ms. Reichelderfer. As of
December 31, 2008 each director had the following aggregate
number of unvested restricted shares: Mr. Janning,
1,461 shares; Mr. Campbell, 1,169 shares;
Mr. Gerrity, 1,169 shares; Mr. Goodwin,
1,169 shares; Mr. Hamada, 1,169 shares;
Mr. Jones, 1,169 shares; Mr. Martin,
0 shares; Mr. McCartney, 1,169 shares;
Ms. Reichelderfer, 906 shares; and Mr. Wright,
0 shares. As of December 31, 2008 each director held
the following aggregate number of shares (excluding unvested
restricted stock): Mr. Janning, 34,303 shares;
Mr. Campbell, 40,550 shares; Mr. Gerrity,
17,053 shares; Mr. Goodwin, 22,688 shares;
Mr. Hamada, 21,215 shares; Mr. Jones,
24,764 shares; Mr. Martin, 6,867 shares;
Mr. McCartney, 23,972 shares; Ms. Reichelderfer,
16,132 shares; and Mr. Wright, 4,460 shares. |
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(3) |
|
Reflects the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended December 31,
2008 in accordance with SFAS 123(R). In connection with his
appointment to our Board, Mr. Martin received a stock
option grant for 5,000 shares of our common stock on
March 12, 2008 at an exercise price of $12.39, the closing
price of our common stock on the date of grant. Similarly,
Mr. Wright received a stock option award for
5,000 shares of our common stock on April 23, 2008 at
an exercise price of $13.81, the closing price of our common
stock on the date of grant, in connection with his appointment
to the Board. As of December 31, 2008 each director had
options for the following number of shares outstanding:
Mr. Janning, 36,323; Mr. Campbell, 30,159;
Mr. Gerrity, 20,659; Mr. Goodwin, 62,210;
Mr. Hamada, 20,659; Mr. Jones, 30,159;
Mr. Martin, 5,000; Mr. McCartney, 13,102;
Ms. Reichelderfer, 9,226; and Mr. Wright, 5,000. |
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(4) |
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Includes annual cash retainer of $87,500, Committee membership
fees of $18,616, meeting fees of $21,500, and total per diem
fees of $35,000. |
12
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(5) |
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While serving as our interim President and Chief Executive
Officer, Mr. Goodwin did not receive compensation as an
independent director. Mr. Goodwin began receiving
independent director compensation after his resignation as an
interim officer on September 15, 2008. |
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(6) |
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The annual retainers paid to each of Messrs. Martin and
Wright were pro-rated based on their respective dates of
election or appointment, as applicable, to the Board. |
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(7) |
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Ms. Reichelderfer deferred receipt of all of her
2008 share amounts, i.e., 10,757 shares, until
January 30, 2009, at which time these shares were
distributed in full on a one-for-one basis. |
Additional
Information About Director Compensation
The Nominating and Governance Committee of our Board of
Directors advises our Board on the annual compensation for our
non-employee directors. In order to set competitive compensation
for our non-employee directors, our Nominating and Governance
Committee may consult third party advisors, generally available
source material, proxy statements and data from peer companies.
Our non-employee directors receive both cash and equity
compensation as detailed below. Our Chairman, based on his key
role and time commitment, receives additional compensation in
cash and equity on a per diem basis for other time spent on
Board matters.
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.
Cash
Compensation of Our Non-Employee Directors(1)
January 1, 2008 - December 31, 2008
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Board Meeting
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Board Meeting
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Annual
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Per Diem
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Attended in
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Attended by
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Retainer
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Fee
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Person
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Telephone
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Chairman of the Board
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$87,500
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$2,500
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(2)
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$3,000
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$500
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Non-employee director (excluding the Chairman)
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$50,000
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$1,500
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$500
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Committees
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Audit
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Chair
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$15,000
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Member
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$9,000
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Compensation & Benefits
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Chair
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$10,000
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Member
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$6,000
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Nominating and Governance
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Chair
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$10,000
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Member
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$6,000
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Executive
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$2,000
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(1) |
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The table sets forth our Companys general policy with
respect to cash compensation payable to our directors. Directors
are also reimbursed for their out-of-pocket expenses relating to
attendance at meetings. |
13
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(2) |
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The Chairman of the Board also receives a per diem fee for other
time spent on Company business of $2,500 (up to a maximum of
$150,000 per year). |
Effective January 1, 2009, our Board, after considering the
current challenging economic conditions, reduced the cash fees
payable to the directors as noted below.
Cash
Compensation of Our Non-Employee Directors(1)
Effective January 1, 2009
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Board
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Meeting
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Board Meeting
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Annual
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Attended
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Attended by
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Retainer
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Per Diem Fee
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in Person
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Telephone
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Chairman of the Board
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$78,750
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$2,250
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(2)
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$3,000
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$500
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Non-employee director (excluding the Chairman)
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$45,000
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$1,500
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$500
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Committees
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Audit
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Chair
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$13,500
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Member
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$8,100
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Compensation & Benefits
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Chair
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$9,000
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Member
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$5,400
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Nominating and Governance
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Chair
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$9,000
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Member
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$5,400
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Executive
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$1,800
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(1) |
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Effective January 1, 2009, the table sets forth our
Companys general policy with respect to cash compensation
payable to our directors. Directors are also reimbursed for
their out-of-pocket expenses relating to attendance at meetings. |
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(2) |
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The Chairman of the Board also receives a per diem fee for other
time spent on Company business of $2,250 (up to a maximum of
$150,000 per year). |
Equity
Compensation
Upon appointment or election to our Board, each non-employee
director receives an initial stock option grant to purchase
5,000 shares of our common stock, all of which vest on the
third anniversary of the date of grant. Mr. Martin, elected
to our Board on March 12, 2008, received his initial stock
option grant on March 12, 2008 at an exercise price of
$12.39 per share, the closing stock price of our common stock on
the date of grant. Mr. Wright, elected to our Board on
April 23, 2008, received his initial stock option grant for
5,000 shares on April 23, 2008 at an exercise price of
$13.81 per share.
14
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Annual Equity Awards of our Non-Employee Directors(1)
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January 1, 2008 - December 31, 2008
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Common Stock
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Award
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Chairman of the Board
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$
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75,000
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Non-employee director
(excluding the Chairman)
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$
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60,000
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(1) |
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The table sets forth our Companys general policy with
respect to equity awards payable to our directors. These awards
are made on the date of our Annual Meeting of Stockholders. |
The common stock awards for service as a director were made on
the date of our 2008 Annual Meeting of Stockholders,
April 22, 2008. Pursuant to our Director Compensation
Policy, the number of shares of the common stock awarded was
determined by dividing the amount of the award by the closing
market price of our common stock on the date of grant which was
$13.85 per share. Accordingly, for 2008, each non-employee
director (excluding the Chairman) on the date of our Annual
Meeting of Stockholders received a common stock award of
4,333 shares and the Chairman received a common stock award
of 5,416 shares.
CORPORATE
GOVERNANCE, BUSINESS CONDUCT, AND CODE OF ETHICS;
STOCKHOLDER COMMUNICATIONS WITH DIRECTORS
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 our Business Conduct Policies and a Code of
Ethics applicable to our Chief Executive Officer and our senior
financial officers, are available for review on our website at
http://www.federalsignal.com.
In addition, these guidelines, charters and polices (including
the Code of Ethics) 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 2008. 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 in executive
session without management, as appropriate. The Chairman of the
Board of Directors presides over 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 2009 Annual Meeting of Stockholders. All of our
directors attended the 2008 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 our
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, 2008, it was determined
that none of our directors, Board-proposed nominees for
director, executive officers, stockholders owning more than 5%
of our common stock, or immediate family members of any such
persons engaged in a transaction with us in which such director,
nominee for director, executive officer, stockholder owning more
than 5% of our common stock, or immediate family member of such
persons had a direct or indirect material interest which
required disclosure under applicable Securities and Exchange
Commission rules.
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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, 5% stockholders (if any) or their family
members have a direct or indirect material interest. Our Company
Policies for Business Conduct, which are available on our
website at
http://www.federalsignal.com,
prohibit 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. Specifically, our Company Policies
for Business Conduct include prohibitions against the following:
receiving or giving gifts or prizes above a nominal value from
or to customers or suppliers; working for a customer or supplier
or engaging in outside profit making activities in any area of
business in which our Company operates; representing any outside
commercial interest during normal business hours or when
traveling on Company business; lending or borrowing money from
individuals affiliated with an entity with whom the Company
conducts business; owning any part of any customers or
suppliers business (excluding routine investments in
publicly traded companies); using Company property, information
or positions for improper personal gain or benefit; and engaging
in Company business with any entity in which a family member has
an executive position or a significant financial interest unless
approved in advance. Since all types of prohibited transactions
can not be listed, we encourage our employees to seek advice
before proceeding if there is any doubt regarding the
appropriateness of an arrangement under our Company Policies for
Business Conduct.
Pursuant to our Company Policies for Business Conduct and the
Audit Committee Charter, the Chairman, Chief Financial Officer
and General Counsel implement our Company Policy for Business
Conduct, and the Audit Committee reviews, approves, ratifies and
makes recommendations to our Board of Directors regarding
related person transactions.
Additionally, each year we require our directors and executive
officers to complete a questionnaire which identifies, among
other things, any transactions or potential transactions with
our 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.
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
Executive
Summary
Presented below is a summary of our 2008 business highlights,
which provides context for our 2008 pay actions and changes thus
far to our 2009 executive compensation program.
2008
Executive Compensation Program Highlights
2008 was a year of important change for our Company.
Despite facing unprecedented economic conditions, including an
extremely challenging municipal market, our Board of Directors
and our management team undertook a series of actions that we
believe will position our Company for sustainable and profitable
growth and enhance stockholder value.
In 2008, we disposed of underperforming assets, including the
cyclical and nonstrategic Tool business and the unprofitable
E-ONE, Inc.
business, and liquidated its municipal leasing portfolio. In
addition, we completed a sale leaseback for two of our
manufacturing facilities and captured a large after-tax gain,
benefiting from the utilization of capital loss carryforwards.
The proceeds from these actions were used to enhance liquidity
and strengthen the balance sheet. We reduced debt by
approximately $150 million, or approximately 35%, from
December 31, 2007 to December 21, 2008. As of
December 31, 2008, our net debt was approximately
$245 million.
We also took steps to improve our cost structure. In November
2008, we announced a planned reduction of salaried personnel
related costs. This built upon the procurement and selling,
general and administrative expense savings initiatives that were
also enacted throughout 2008.
In 2008, the Company took measures to achieve what it believes
is a more focused business portfolio, a leaner capital structure
and enhanced financial flexibility. Today, we believe we have
leadership positions in most markets, strong brands, an
increasing global presence and a strong installed base of
customers.
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A number of actions were taken in 2008, including the following:
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William H. Osborne joined us as our new President and Chief
Executive Officer replacing interim President and Chief
Executive Officer James E. Goodwin. Additionally, William G.
Barker, III joined us as Senior Vice President and Chief
Financial Officer. Each received a letter or employment
agreement setting forth the initial terms of his employment with
our Company.
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Based on our Companys financial performance, our Company
and its business groups failed to meet threshold Economic Value
goals under the existing management incentive plan. As a result,
the named executive officers received no bonus under the
Economic Value program for 2008.
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In June 2008, the Compensation and Benefits Committee amended
the management incentive plan such that plan participants would
be eligible to receive up to 20% of their target bonus if our
Company or the applicable business group failed to meet Economic
Value thresholds under the existing Economic Value bonus
program. This new bonus opportunity is based upon ratings of
competencies and the achievement of individual performance
objectives.
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A further change to the management incentive plan was the
adoption of an amendment which provides the Compensation and
Benefits Committee with the discretion to reduce the amount of
the bonus earned by any named executive by up to 20%.
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The 2008 long-term equity incentive grant structure was modified
to include performance shares such that approximately one-third
of the annual equity grant value is contingent upon relative
total shareholder return performance. This change was designed
to enhance the direct performance connection between the named
executive officers and our stockholders.
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Due to our Companys weaker than desired performance, the
value of the 2008 long-term equity incentive grants paid to our
named executive officers was targeted at the
35th percentile of the value of long-term incentives paid
to companies in our comparator group, down from the
50th percentile in the prior year.
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Executive
Compensation Program Modifications in 2009
For 2009, our Company continues to manage our executive
compensation program under difficult market conditions. To date,
we have made the following decisions with respect to our
executive compensation program:
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Named executive officers did not receive a 2009 base salary
increase. Our new President and Chief Executive Officer elected
to reduce his base salary by 5% beginning in 2009.
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We modified our management incentive plan to replace the
Economic Value program with a new plan under which bonuses are
paid upon the achievement of financial measures and individual
objectives. This new plan, the Short Term Incentive Bonus Plan,
will pay bonuses based upon a combination of earnings (50%),
cash flow (20%) and individual performance (30%).
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The new Short Term Incentive Bonus Plan includes a
clawback or payment recapture feature under which
our Company will require, to the extent practicable, a named
executive officer to repay a portion of his or her performance
bonus payment plus a reasonable rate of interest upon the
occurrence of an accounting restatement or a determination by
our Board that the performance results were materially
inaccurate resulting in an overpayment in the amount of any such
performance-based bonus.
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The mix of awards between stock options, restricted stock and
performance shares shifted slightly in 2009 such that stock
options were weighted at 40%, with restricted stock and
performance share awards each weighted at 30%.
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We adopted a prospective policy under which we will not enter
into agreements with named executive officers that provide for
tax gross-up
payments (excluding
gross-ups
pursuant to a relocation or expatriate tax equalization plan,
policy or arrangement). The policy also provides that we will
not enter into compensation arrangements with named executive
officers which provide for severance payments (excluding the
value of any accelerated vesting of any equity based awards) in
excess of 2.99 times base salary and bonus unless stockholder
approval has been received.
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In an effort to align our pay practices and our
stockholders interests, we have evidenced a commitment to
a pay for performance philosophy by: (i) the
Compensation and Benefits Committees reviewing all
components of our President and Chief Executive Officers
compensation, and reviewing tally sheets for all named executive
officers that reflect payments under various termination
scenarios; (ii) disclosing performance measures for all
performance-based compensation; (iii) granting to all named
executive officers
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equity compensation of which more than 50 percent is a
combination of performance shares (i.e., relative total
shareholder return) or conventional stock options; and
(iv) the Compensation and Benefits Committee has the
authority to hire or fire our compensation consultant.
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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, thus motivating
management to maximize total stockholder return. As a key
component of our executive compensation system, we have adopted
a financial performance based philosophy which includes
individual objectives designed to develop an efficient culture
that emphasizes entrepreneurship, innovation, teamwork, and
creativity, and rewards employees who think and act like owners.
This program also encourages collaboration and the maximization
of long-term stockholder 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 create alignment between compensation and business
performance by rewarding executives for the achievement of
strategic and tactical goals that successfully drive growth in
stockholder value for our Company;
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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 differentiate executive rewards based on actual
performance; and
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To provide targeted overall compensation levels that are
comparable to competitive market practice.
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Role of
our Compensation and Benefits Committee
Our Compensation and Benefits Committee establishes and oversees
our general compensation and benefits philosophy, 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 President and 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;
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Establish each executive officers annual compensation
level, based upon the executive officers performance, our
financial results and relative stockholder 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; and
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Review an annual report prepared by the President and Chief
Executive Officer on succession planning and related development
recommendations.
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The President and 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 Compensation and Benefits Committee. The
Compensation and Benefits Committee can exercise its discretion
in modifying any recommended adjustments or awards to these
executive officers. The compensation of the President and Chief
Executive Officer is determined by the Compensation and Benefits
Committee, meeting in executive session without the President
and Chief Executive Officer present.
Benchmarks
for Executive Compensation
Compensation levels for our executives are compared to the
compensation paid to executives at the peer companies specified
below. 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
18
highly sought after by large and established companies. We draw
upon a market that is global in scope. Our recently hired
President and Chief Executive Officer was the president of Ford
Motor Company, Australia and our Senior Vice President and Chief
Financial Officer was the chief financial officer of the
Sun-Times Media Group, Inc. We recognize that we compete for
candidates based upon several criteria, including competitive
compensation, potential for future growth and success, culture
and Company values. In order to develop a compensation plan
which would succeed in attracting the best global talent, the
Compensation and Benefits Committee engaged Hewitt Associates,
an outside global human resources consulting firm, to formulate
a market-competitive pay package in connection with our search
for a chief executive officer. The Compensation and Benefits
Committee referred to December 2007 reports prepared by Hewitt
Associates with respect to market data and other information
contained in such reports when reviewing compensation matters.
In making compensation decisions, the Compensation and Benefits
Committee compares each element of compensation against a peer
group of publicly traded manufacturing companies. The comparator
group, which is periodically updated by the Compensation and
Benefits Committee, consists of companies against which we
believe we compete for talent. The companies currently
comprising the comparator group are:
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A.O. Smith Corporation
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Johnson Controls, Inc.
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AMETEK, Inc.
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L-3 Communications Corporation
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BorgWarner Inc.
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Motorola, Inc.
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Briggs & Stratton Corporation
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Oshkosh Corporation
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Caterpillar Inc.
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PACCAR Inc.
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Cooper Industries, Inc.
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Parker Hannifin Corporation
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Cummins Inc.
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Raytheon Company
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Deere & Company
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Sauer-Danfoss Inc.
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Dover Corporation
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Teleflex Incorporated
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Eaton Corporation
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Tennant Company
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Emerson Electric Company
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Thomas & Betts Corporation
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Honeywell International Inc.
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The Timken Company
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Hubbell Inc.
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Valmont Industries, Inc.
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Illinois Tool Works, Inc.
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Woodward Governor Company
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Ingersoll-Rand Company
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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 also use published survey data to supplement the
determination of competitive levels of compensation in the
marketplace.
Elements
of Executive Compensation
Our compensation program consists of five components: base
salary, annual cash incentives, long-term equity incentives,
retirement and health and welfare benefits, and perquisites and
other personal benefits. Our programs balance individual,
business unit and Company-wide goals and achievements.
Base
Salaries
Base salary levels for our executive officers, including our
President and Chief Executive Officer, are based 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. In 2008, actual base salaries for named executive officers
ranged from 92% to 111% of market midpoint targets. In addition
to the executives individual performance, the Compensation
and Benefits 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 and the
executives breadth of knowledge. However, in light of
general macroeconomic conditions, for 2009, there were no
increases to base salaries awarded to the named executive
officers. Mr. Osborne voluntarily elected a 5% reduction of
base pay beginning in 2009.
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Annual
Cash Incentive Payments
Economic
Value Program
From 2005 through 2008, 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.
Annual cash bonuses to the named executive officers are paid
under our management incentive plan. The threshold, target and
maximum levels of bonus payable are determined based on the
Economic Value of our Company. We believe that Economic Value is
tied to the creation of stockholder 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 utilizing an Economic Value program for
annual cash incentive compensation is to align management and
employee interests with the interests of our stockholders.
Typically, annual cash incentive payments are approved in
February and paid in a lump sum in March.
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. The Cost of Capital was set at 10%
for the 2008 fiscal year.
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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.
We previously retained Shareholder Value Advisors, a financial
and compensation consulting firm, to assist in developing
Economic Value improvement goals for our Company and for each of
the key operating units of our Company. 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 our Company or business unit. 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.
For 2008, the target incentive compensation awards for all
executive officers were set at 100% of the Economic Value
improvement goal for the business unit or our Company, with
threshold set at 50% of the target goals and maximum set at 200%
of the target goals.
The incentive compensation of our President and Chief Executive
Officer, Senior Vice President and Chief Financial Officer, and
Senior Vice President, Human Resources and General Counsel is
based on the achievement of Economic Value goals which have been
set for our Company as a whole. The incentive compensation for
our other named executive officers have threshold, target and
maximum Economic Value goals for their respective business
groups and for our Company as a whole, with their aggregate
annual incentive award weighted at 70% for achievement of their
individual business group goals and 30% for our Company goals.
This weighting encourages executives to collaborate across
business groups and functions in order to achieve business
objectives at the enterprise level as well as in their own
business group.
The achievement of the threshold, target and maximum Economic
Value goals results in a cash incentive award equal to a pre-set
percentage of the executives base salary. The target
percentages of base salary 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 are extrapolated from those points to determine
the actual cash incentive award for the executive. In 2008, the
target annual cash incentive percentage for the interim
President and Chief Executive Officer was set at 95% of his base
salary and the target annual cash incentive percentage for
Mr. Osborne was set at 90%, to be paid, in each case, on a
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pro-rata basis for 2008 service. The target annual cash
incentive for our other named executive officers ranged from 55%
to 60% of their respective base salaries.
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 our Company or the related
business group achieves an Economic Value amount for the
subsequent year that is at or above target for that year and the
result is above the relative level of Economic Value attained by
our Company or the business group during the initial year. Any
carry forward opportunity that is not earned in either of the
two immediately subsequent years is forfeited by the executive
officer.
In June of 2008, based on the difficult environment faced by our
Company, including management changes, divestitures and
cost-cutting initiatives, the Compensation and Benefits
Committee amended our Companys management incentive plan
for fiscal year 2008 to provide an opportunity for participants
to receive a bonus if our Company or the primary business group
to which the participant was assigned failed to achieve its
threshold Economic Value goal. In the event that our Company or
the business group failed to meet its threshold Economic Value
goal, the participant would still be eligible to receive up to
20% of his or her target bonus for the year based upon two
components of the Companys existing annual performance
review process (the ratings of competencies and the achievement
of the participants individual performance objectives for
the year).
In connection with this new bonus opportunity, our Company
utilized its existing annual performance review process
including competency evaluation and the individual performance
objectives previously set in the first quarter of 2008. The
competencies are determined based upon executive level and
evaluated once annually by such named executive officers
manager, except in the case of the interim President and Chief
Executive Officer and President and Chief Executive Officer,
whose competencies are reviewed by the Compensation and Benefits
Committee. The individual performance objectives were derived
for each participant and approved by his or her manager, except,
again, in the case of the interim President and Chief Executive
Officer and President and Chief Executive Officer, whose
individual performance objectives were approved by the
Compensation and Benefits Committee. These individual objectives
are specifically tailored to the participants job duties
and include such things as the achievement of planned
transactions and financial goals, the management of functional
responsibilities within pre-established budgeted amounts, the
resolution of particular projects within the participants
job responsibilities, successful implementation of growth
strategies, achievement of strategic goals such as
consolidations, acquisitions or divestitures, product or
division launches, technology transitions, cost reductions, and
successful procurement programs.
Also effective for the 2008 plan year, the Compensation and
Benefits Committee authorized an amendment to the management
incentive program under which the annual incentive awards earned
by any executive officer, including the named executive officers
in our Companys proxy statement for the 2008 Annual
Meeting of Stockholders, will be subject to a possible reduction
of up to 20% of the amount earned under the management incentive
program in the sole and absolute discretion of the Compensation
and Benefits Committee.
Short
Term Incentive Bonus Plan
Upon review of research provided by Hewitt Associates, the
Compensation and Benefits Committee has replaced the Economic
Value incentive program beginning with the 2009 fiscal year. The
new program, the Short Term Incentive Bonus Plan (STIP), will
determine bonuses based upon the achievement of both financial
measures and individual objectives. Financial measures will be
based upon earnings and cash flows at our Company, business
group and division levels, depending upon the position of the
participant within our Company. Bonus compensation under the
STIP will link to our Companys annual operating plan with
50% based on earnings and 20% based on cash flow measures
determined in accordance with generally accepted accounting
principles. The remaining 30% will be based on individual
objectives with 21% based on performance goal ratings and 9%
based on competency ratings as measured by a numeric score
received in the annual performance review process.
Notwithstanding the foregoing, the Compensation and Benefits
Committee retains complete discretion with respect to the STIP.
Furthermore, the Compensation and Benefits Committee approves
all awards to named executive officers.
Over the course of several months during 2008, the Compensation
and Benefits Committee undertook a review of the Companys
Economic Value program. The Compensation and Benefits Committee
received input from the Board of Directors, Hewitt Associates,
its outside compensation consultants, and management. In
addition, it reviewed external market data. The Compensation and
Benefits Committee decided to implement a new short term
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incentive bonus plan. This decision was based on number of
factors including the complexity of the Economic Value program,
the desire to add individual performance objectives and
competencies to the bonus program, and establishment of a
program tied to generally accepted accounting principles (GAAP).
The STIP will focus on specific milestones as well as individual
objectives which will allow us to reward outstanding individuals
with a bonus even in years where our overall financial
performance may be low. The Compensation and Benefits Committee
believes that rewarding employees upon the successful
achievement of individual objectives should increase individual
accountability and encourage excellence. The STIP is based upon
goals that are easily understood and can be modified each year
to reflect our current business plan and market conditions.
Payments under the STIP are expected to be approved in February
of each year and paid in a lump sum in March.
At our Company level, the 50% earnings component will be based
on consolidated income before income taxes. As tax adjustments
are largely impacted by external factors outside of the control
of the participants, the Compensation and Benefits Committee
determined that tax adjustments should not factor into the
calculation. Our Companys cash flow financial measure,
weighted at 20%, will be based on consolidated net cash provided
from continuing operations as reported in our Annual Report on
Form 10-K.
At the business group level, the 50% earnings component will be
based on earnings before interest and taxes thereby excluding
taxes and debt, neither of which are generally impacted by
participants at this level. The business group cash flow
measure, weighted at 20%, will be based on average primary
working capital as a percentage of sales (the sum of accounts
receivable and inventory less accounts payable and customer
deposits divided by net sales for the year).
The incentive compensation under the STIP for our President and
Chief Executive Officer, Senior Vice President and Chief
Financial Officer, and Senior Vice President, Human Resources
and General Counsel is based 70% on the achievement of our
Company financial measures and 30% on individual performance
measures. The incentive compensation for our other named
executive officers is based on the achievement of our Company
and business group financial measures weighted 28% for
achievement of Company goals, 42% for achievement of applicable
business group goals, and 30% for achievement of individual
performance measures. The Compensation and Benefits Committee
believes that this weighting encourages executives to
collaborate across business groups and functions in order to
achieve business objectives at the enterprise level as well as
in their own business group. The incentive compensation for our
executives is based on threshold, target and maximum goals for
business groups and for our Company as a whole.
The achievement of the threshold, target and maximum goals
results in a cash incentive award equal to a pre-set percentage
of the executives base salary. The target percentages of
base salary to be paid out upon the achievement of various
levels of goal achievement are determined based on competitive
market data for each executive position. Results that fall in
between the threshold, target and maximum goals are extrapolated
from those points to determine the actual cash incentive award
for the executive. Performance goals under the STIP are expected
to be determined in the first quarter of 2009.
Payments under the STIP are subject to a clawback
policy under which our Company will require, to the extent
practicable, upon the occurrence of specified events, a named
executive officer to repay a portion of his or her performance
bonus payment plus a reasonable rate of interest. The clawback
policy is triggered by (i) an accounting restatement or a
determination by our Board that the performance results were
materially inaccurate and (ii) a determination that the
amount of such performance-based bonus would have been less than
the amount previously paid to such named executive officer
taking into account the restated financial results or otherwise
corrected performance results.
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 requirements for executives. Accordingly, the
Compensation and Benefits Committee has granted equity awards to
our executives on an annual basis under our long-term incentive
plans. Equity grants are also periodically made to new employees
and to existing employees in connection with promotions. 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.
Beginning with the 2008 annual awards, the Compensation and
Benefits Committee revised the structure of the long-term equity
incentive program such that the awards consist of three
components: an option to purchase shares of our common stock, a
restricted stock award, and a performance-based restricted stock
award. The overall
22
value of the long-term incentive award has been allocated
one-third to each of the three components. The Compensation and
Benefits Committee believes that this mix of equity awards will
further align each executives goals with the intermediate
and long-term goals of our stockholders. The award provides an
incentive to the executive to drive long-term performance over
the vesting and payment periods embedded in the award.
Options vest in equal installments over a three-year period.
These options have an exercise price equal to the closing price
of our common stock on the date of grant. Restricted stock
awards and restricted stock units vest in full on the third
anniversary of the date of grant and are valued using the
closing price of our common stock on the date of grant. These
awards are subject to forfeiture and cancellation if the named
executive officers employment is terminated prior to
vesting.
The overall value of the 2008 long-term equity incentive awards
was targeted for the named executive officers at the
35th percentile of the value of long-term incentives paid
to comparable executives at companies in the comparator group.
The decision to target the 2008 award at the
35th percentile instead of the 50th percentile used in
prior years was based upon our relatively weak financial
performance during 2007. The 2008 equity incentive awards were
granted under a long-term incentive plan which was approved by
our stockholders in 2005.
The Compensation and Benefits Committee may grant other equity
incentives, on a
case-by-case
basis, as deemed appropriate. For example, the Compensation and
Benefits Committee may award restricted stock units to our
employees, international executives in particular, in
substitution for one or more components of the standard grant
described above to promote long-term performance and employee
retention. Award value and type of grant will take into account
applicable law, administrative issues and competitive market
data for the specific country at issue.
The performance-based restricted stock award is tied to the
achievement of a pre-determined three-year relative performance
metric approved by the Compensation and Benefits Committee based
upon relative Total Shareholder Return (TSR). The formula to
determine TSR is set forth below.
Change
in Stock Price plus dividends paid over the performance
period
Beginning
Stock Price
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Change in Stock Price is the difference between the
Ending Stock Price and the Beginning Stock Price.
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Beginning Stock Price is the closing stock price on
the trading day before the first day of the performance period.
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Ending Stock Price is the closing stock price on the
last trading day of the performance period.
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At the conclusion of the performance period, our Companys
TSR is calculated for that period and compared to the TSR
achieved by the publicly-traded companies included in our
comparator group. Our Companys percentile rank is then
assigned based on its relative TSR achievement. At the end of
the three-year performance period, each executive officer will
be awarded shares, if any, as a percentage of the pre-determined
target shares for that executive ranging from 0% to 200%
determined by our percentile rank. For the three-year
performance period 2008 to 2010, the TSR achieved for the first
performance year, 2008, was negative 0.25 which was in the
75th percentile of the comparator group.
Unvested options, restricted stock, restricted stock units and
performance-based restricted stock awards are subject to
forfeiture and cancellation if the executive officers
employment is terminated prior to vesting other than by reason
of death, disability or change in control. Upon a change in
control, unvested options, shares of restricted stock,
restricted stock units and performance-based restricted stock
awards fully vest.
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 dependent on each individuals well being.
To that end we offer a competitive package of Company-sponsored
health and welfare benefits to all eligible employees including
our executive officers.
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Retirement Plans In January 2007, we
introduced two new plans, the Retirement Savings Plan and the
Savings Restoration Plan. The Retirement Savings Plan is a
defined contribution plan that combines a 401(k)
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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.
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For 2007 through 2009, executives who participated in our 401(k)
Retirement Plan-Elgin Sweeper Company or in our now frozen
defined benefit plan (the FSC Retirement Plan) are eligible to
receive a supplemental transitional contribution to our new
Retirement Savings Plan and Savings Restoration Plan equal to 1%
to 2% of their salary based on age and service as of
December 31, 2006.
Upon a voluntary employee deferral, the non-qualified Savings
Restoration Plan restores Company contributions limited under
the Internal Revenue Code through a notional Company
contribution 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 401(k) Retirement
Plan-Elgin Sweeper Company was terminated. Under both the
Savings Restoration Plan and the Retirement Savings Plan, based
upon their age and years of service, Stephanie K. Kushner, our
former Senior Vice President and Chief Financial Officer, Peter
R. Guile, President of former subsidiary
E-ONE, Inc.,
Jennifer L. Sherman, Senior Vice President, Human Resources and
General Counsel, and Mark D. Weber, President, Environmental
Solutions Group, received a supplemental transitional
contribution equal to 2% of their eligible compensation in 2008.
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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 eligible
employees.
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Perquisites
and Other Personal Benefits
We provide executives with perquisites and other personal
benefits that the Compensation and Benefits 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 Compensation and Benefits Committee
periodically reviews the levels of perquisites provided.
Perquisites provided may include:
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Vehicle Allowances Executives receive 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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Relocation Assistance The Compensation and
Benefits Committee has authorized reimbursement of relocation
expenses pursuant to our Executive Relocation Reimbursement
Program or approved by the Committee.
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Setting
Actual Compensation for the Named Executive Officers
The specific compensation decisions made for each of the named
executives for 2008 and year-to-date in 2009 reflect our
managements and our Compensation and Benefits
Committees assessments of performance against market
benchmarks, performance relative to Company and business group
financial and operational measurements, and achievement of
individual performance objectives. Our compensation actions for
our named executive officers are summarized below.
With respect to the terms of employment of Messrs. Osborne
and Barker, the final compensatory arrangements for
Mr. Goodwin, our former interim President and Chief
Executive Officer; Ms. Kushner, our former Senior Vice
President and Chief Financial Officer; and Mr. Guile,
President of
E-ONE, Inc.,
a business divested in August, 2008, please also see the section
titled Executive Compensation in the Last Fiscal
Year under the heading Additional Information
About the Compensation Paid to the Named Executive
Officers beginning on page 33 of this proxy
statement.
Base
Salary
Mr. James E. Goodwin, a Company director since 2005, served
as our interim President and Chief Executive Officer from
December 11, 2007 through September 15, 2008. During
his service as an interim officer, Mr. Goodwins
annual base salary was $700,000.
On September 15, 2008, our Board of Directors appointed
William H. Osborne as the President and Chief Executive Officer
of our Company. Mr. Osbornes initial annual base
salary was $650,000. Mr. Osbornes
24
compensation, including his base salary, was determined by the
Compensation and Benefits Committee based upon a report prepared
by Hewitt Associates, an outside global human resources
consulting firm, in connection with our executive search for a
CEO.
In determining base salary increases, the Compensation and
Benefits Committee reviews performance, level of responsibility
and actual salary as compared to the targeted level
(50th percentile) of the comparator group. In January 2008,
the Compensation and Benefits Committee set the base salary of
our former Senior Vice President and Chief Financial Officer,
Ms. Stephanie K. Kushner, at $338,700, which represented an
increase of 2.5% from her prior years base salary of
$330,460. Effective December 10, 2009,
Ms. Kushners service as our Senior Vice President and
Chief Financial Officer ended and William G. Barker, III,
was appointed as our Senior Vice President and Chief Financial
Officer. Mr. Barkers initial base salary was set at
$325,000 per year. Mr. Barkers base salary was
determined based upon a review of his pay history, experience
and comparable positions in the comparator group.
The base salary of David R. McConnaughey, our Safety and
Securities Systems Group President, was raised to $328,000
during 2008, an increase of 2.5% from his 2007 base pay of
$320,000. The base salary of Peter R. Guile, President of our
former subsidiary,
E-ONE, Inc.,
was raised to $247,200 during 2008, an increase of 3.0% from his
2007 annual base salary of $240,000. The base salary of Jennifer
L. Sherman, Senior Vice President, Human Resources and General
Counsel, was raised to $279,231 during 2008, an increase of 2.5%
from her 2007 base pay of $272,420. The base salary of our
Environmental Solutions Group President, Mark D. Weber, was
raised to $305,784 during 2008, an increase of 6.0% from his
2007 base pay of $288,475.
In February 2009, the Compensation and Benefits Committee
determined that there would be no base salary increases in 2009
for our named executive officers. In fact, Mr. Osborne
voluntarily elected to take a 5% base pay reduction from
$650,000 to $617,500 effective January 1, 2009. The
Compensation and Benefits Committees decision was based in
part on general macroeconomic conditions, our overall financial
position and as part of a cost savings initiative.
Annual
Cash Incentive Payments Economic Value
Program
In 2008, the Economic Value target for our Company was negative
$8.4 million. The Economic Value targets for the four main
business groups were as follows: $16.9 million for Safety
and Security Systems, negative $15.8 million for Fire
Rescue, $3.5 million for Environmental Solutions and
negative $3.6 million for Tool. In 2008, our Company and
each of the four business groups failed to meet their applicable
2008 Economic Value thresholds. Accordingly, each of the named
executive officers (excluding Ms. Kushner and
Mr. Guile as a result of their departures from our Company)
was eligible to receive up to 20% of his or her 2008 target
bonus based upon the achievement of the performance objectives
for the year.
The target bonuses for Messrs. Goodwin, Osborne, and Barker
and Ms. Sherman were based entirely on the performance of
our Company as a whole. For each of Messrs. McConnaughey
and Weber, 30% of their respective target bonuses was based on
the performance of our Company as a whole, and the remaining 70%
was based on the performance of their respective business group.
Mr. Barker, who joined our Company in December 2008, was
eligible to receive a 2008 annual cash incentive payment
pro-rated based on hire date.
25
The 2008 annual incentive bonuses paid to our other named
executive officers (excluding Ms. Kushner and
Mr. Guile who were not eligible to receive an annual
incentive bonus for 2008 as a result of their departures) were
as follows:
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Company or
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Business
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Group Failure
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to Meet
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2008 Actual
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Threshold,
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Economic
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Award of 20%
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Value Bonus
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of target
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Award /
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bonus based
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Aggregate
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Estimated Payouts Under Non-
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Carry
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on
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Bonus Amount
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Equity Incentive Plan (Economic Value
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Forward
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Competencies
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as a Percentage
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Program)($)
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Total Annual
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Opportunity
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and Individual
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of Annual Base
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Incentive Bonus
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($)
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Goals ($)
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Salary (%)
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Threshold
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Target
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Maximum
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($)
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William H. Osborne(1)
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$
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34,525
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5
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%
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$
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86,311
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$
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172,623
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$
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345,246
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$
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34,525
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James E. Goodwin(1)
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$
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94,117
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%
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$
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235,294
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$
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470,587
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941,175
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$
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94,117
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William G. Barker, III(1)
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$
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2,344
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5,861
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11,721
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23,442
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2,344
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David R. McConnaughey(2)
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$
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39,360
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%
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98,400
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200,631
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$
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456,450
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$
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39,360
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Jennifer L. Sherman(2)
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$
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30,715
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%
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76,789
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$
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166,862
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$
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423,884
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$
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30,715
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Mark D. Weber(2)
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$
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36,694
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12
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%
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$
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91,735
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$
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186,933
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$
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421,738
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$
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36,694
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(1) |
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The amounts stated for Messrs. Osborne, Goodwin and Barker
as estimated future payments and actual bonus payments are
pro-rated based upon term of service. |
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(2) |
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Maximum and target payouts include potential carry-forward
amounts under the Economic Value program. 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. Please see the Section titled
Annual Cash Incentive Payments under the
heading Economic Value Program beginning on
page 20. |
These discretionary bonus payments were based on a numeric
rating received during the annual performance review process.
Participants who earned a score greater than 2.74 out of a
possible score of 5 received the full bonus payment. Each of the
Named Executive Officers received a score greater than 2.74 and,
accordingly, each such named executive officer received the full
20% bonus opportunity.
Long-Term
Equity Incentives
In connection with his appointment as interim President and
Chief Executive Officer, Mr. Goodwin received an option to
purchase 50,000 shares of our common stock at an exercise
price of $11.84 per share, the closing price of our common stock
on December 11, 2007, the date of grant. Mr. Goodwin
also received an award of 20,000 shares of restricted stock
of our Company on December 11, 2007. These options and
restricted shares became fully vested and exercisable on
Mr. Goodwins last day as our interim President and
Chief Executive Officer (i.e., September 15, 2008).
Considering his interim status, Mr. Goodwin did not receive
additional equity awards in 2008.
For equity awards granted to Messrs. Osborne and Barker in
2008 upon appointment as executive officers of our Company,
please see the section titled Executive Compensation in
the Last Fiscal Year under the heading
Additional Information About the Compensation Paid to
the Named Executive Officers beginning on page 33
of this proxy statement.
In February 2008, the Compensation and Benefits Committee
granted equity incentive awards based on the
35th percentile target level to the other named executive
officers as follows:
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Ms. Kushner, Mr. Guile, Mr. McConnaughey,
Ms. Sherman and Mr. Weber received options to purchase
29,600, 19,200, 25,400, 16,100 and 27,500 shares of our
common stock, respectively, at an exercise priceof $10.59, the
closing 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.
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Ms. Kushner, Mr. Guile, Mr. McConnaughey,
Ms. Sherman and Mr. Weber received restricted stock
awards of 9,300, 6,100, 8,000, 5,100 and 8,600, respectively.
The restricted shares vest fully on the third anniversary of the
date of the grant.
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Ms. Kushner, Mr. Guile, Mr. McConnaughey,
Ms. Sherman and Mr. Weber received performance awards
of 8,900, 5,800, 7,600, 4,800 and 8,200, respectively. Each
performance share award represents a right to receive up to two
shares of our common stock based upon achieving a three year
performance metric. Performance-based restricted stock award
targets were determined for the performance period
2008-2010
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based upon an overall award value targeted at the
50th percentile of the value of long-term incentives paid
to comparable executives at the comparator group.
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All unvested stock options, restricted stock awards and
performance shares held by Ms. Kushner and Mr. Guile
were forfeited in connection with their departures.
Ms. Kushner has until March 30, 2009 to exercise
previously vested stock option awards. Mr. Guiles
right to exercise vested stock option awards expired
November 14, 2008.
In February 2009, the Compensation and Benefits Committee
granted equity incentive awards in the form of 40% stock
options, 30% restricted stock and 30% performance shares as
specified below. The Compensation and Benefits Committee
determined, as a result of the uncertain macroeconomic
conditions, to award the same number of options in 2009 as was
awarded in 2008, resulting in a slightly higher weighting of the
mix of options as compared to the 2008 awards which were one
third options, one third restricted stock and one third
performance shares.
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Mr. Osborne, Mr. Barker, Mr. McConnaughey,
Ms. Sherman and Mr. Weber received options to purchase
107,400, 29,600, 25,400, 16,100 and 27,500 shares of our
common stock, respectively, at an exercise price of $6.68, the
closing 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.
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Mr. Osborne, Mr. Barker, Mr. McConnaughey,
Ms. Sherman and Mr. Weber received restricted stock
awards of 33,600, 9,300, 8,000, 5,100 and 8,600 shares of
our common stock, respectively. The restricted shares vest fully
on the third anniversary of the date of the grant.
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Mr. Osborne, Mr. Barker, Mr. McConnaughey,
Ms. Sherman and Mr. Weber received performance awards
of 32,000, 8,900, 7,600, 4,800 and 8,200 shares of our
common stock, respectively. Each performance share award
represents a right to receive up to two shares of our common
stock based upon achieving a three-year performance metric
during the performance period
2009-2011.
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Perquisites
and Other Benefits
Vehicle Allowances In 2008, on an annualized
basis, Ms. Kushner, Mr. McConnaughey, Ms. Sherman
and Mr. Weber each received a vehicle allowance totaling
$11,400. Mr. Guile received a vehicle allowance totaling
$6,736. Messrs. Osborne and Barker received vehicle
allowances of $4,025 (or $13,800 on an annualized basis per
year) and $655 (or $11,400 on an annualized basis), respectively.
Relocation Assistance In 2008, in connection
with Mr. Osbornes relocation from Melbourne,
Australia to the greater Chicago, Illinois area, we reimbursed
Mr. Osborne for relocation, temporary living and moving
expenses totaling $127,151 and a related tax
gross-up in
the amount of $39,947. Mr. Guile received additional
relocation reimbursement in the amount of $36,400 during 2008
related to his 2007 relocation, $35,100 of which was
attributable to our Companys carrying cost of
Mr. Guiles home which we expect to recoup a portion
of upon the sale of the home.
Signing Bonus/Housing Allowance In 2008, in
connection with Mr. Osbornes purchase of a permanent
residence in the greater Chicago, Illinois area,
Mr. Osborne received $500,000 as a signing bonus and
housing allowance.
Indemnification for Repayment of Retention
Bonus In 2008, we reimbursed Mr. Osborne the
amount of $263,000 for the retention bonus he was required to
repay to his former employer.
Financial/Tax Preparation Services Pursuant to
his employment agreement, we reimbursed Mr. Osborne for the
services of a financial and estate planning advisor in the
amount of $7,500.
Stock
Ownership Guidelines for Executive Officers
Our executive officers are required to acquire 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 seven years from the date they
become subject to the stock ownership guidelines to comply with
the guidelines. While serving as an interim officer,
Mr. Goodwin was exempt from this policy, although he
remained subject to the director stock ownership program
described on page 13 of this proxy statement.
Messrs. Osborne and Barker have not met their respective
requirements for stock ownership and have 6.5 and 7 years,
respectively, to comply. Messrs. McConnaughey and Weber
have not met their requirements for stock ownership and have 4
and 2.5 years, respectively, to comply. Ms. Sherman
has also not met her requirements for stock ownership and has
2 years to comply.
27
Compensation
Policy Regarding Tax
Gross-Up
Payments and Limitation of Severance Benefits
On February 20, 2009, the Board adopted a compensation
policy regarding tax
gross-up
payments and limitations of severance benefits. This
compensation policy provides, among other things:
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in connection with any employment agreement, severance agreement
or change in control agreement entered into with any named
executive officer subsequent to the adoption of this
compensation policy, we will not make or agree to make any tax
gross-up
payments to such named executive officer, except for such
gross-up
provided pursuant to a relocation or expatriate tax equalization
plan, policy or arrangement; and
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unless approved by a vote of our stockholders entitled to vote
in an election of directors, we will not enter into any
compensation agreement with a named executive officer that
provides for severance payments (excluding the value of any
accelerated vesting of equity based awards) in an amount
exceeding 2.99 times the sum of: (i) the named executive
officers highest annual base salary for the year of
termination (determined as an annualized amount) or either of
the immediate two preceding years; plus (ii) either the
named executive officers current target bonus, or the
highest annual bonus awarded to the named executive officer in
any of the three years preceding the year in which the named
executive officers termination of employment occurs
(excluding the value of any accelerated vesting of equity based
awards).
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This compensation policy will not alter the terms of any
agreement or compensation or benefit plan in effect on the date
of adoption of the policy.
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 Compensation and Benefits 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
Compensation and Benefits Committee believes that it is
important and necessary that the Compensation and Benefits
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 Compensation and Benefits
Committees view, such arrangements are in the best
interests of our Company and our stockholders.
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
recommended to the Board of Directors (and the Board has
approved) that the Compensation Disclosure and Analysis be
included in this proxy statement.
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SUBMITTED BY
THE COMPENSATION AND BENEFITS COMMITTEE
JOHN MCCARTNEY, CHAIRMAN
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JAMES C.
JANNING
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PAUL W.
JONES
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BRENDA L.
REICHELDERFER
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JOSEPH R.
WRIGHT
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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.
28
EXECUTIVE
COMPENSATION IN THE LAST FISCAL YEAR
Summary
Compensation Table
The following table sets forth information concerning
compensation earned during the fiscal years ended
December 31, 2006, 2007 and 2008 for James E. Goodwin, our
former interim President and Chief Executive Officer, William H.
Osborne, our new President and Chief Executive Officer,
appointed September 15, 2008, Stephanie K. Kushner, our
former Senior Vice President and Chief Financial Officer,
William G. Barker, III, our new Senior Vice President and
Chief Financial Officer appointed December 10, 2008, and
the three other most highly compensated executive officers of
our Company. Additionally, the table sets forth compensation
information for the stated periods for Mr. Guile, who would
have been among the top three highly compensated executive
officers in 2008 had Mr. Guile been an executive officer as
of December 31, 2008. For compensation provided to
Mr. Goodwin for service as a director of our Company after
his resignation as our interim President and Chief Executive
Officer on September 15, 2008, please see the section
titled Information Concerning the Board of
Directors under the heading titled Director
Compensation in the Last Fiscal Year beginning on
page 12 of this proxy statement.
Summary
Compensation Table for Fiscal Years 2006, 2007 and
2008
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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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Stock
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Option
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Incentive Plan
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Deferred
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All Other
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Salary
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Bonus
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Awards
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Awards
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Compensation
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Compensation
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Compensation
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Name and Principal Position
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Year
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($)
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($)(1)
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($)(2)
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($)(3)
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($)(4)
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Earnings($)(5)
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($)(6)
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Total ($)
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William H. Osborne,
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2008
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$192,083
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$763,000
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$66,864
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$22,356
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$34,525
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$
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$382,146
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$1,460,974
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President and Chief
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2007
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$
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$
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$
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$
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$
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$
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$
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$
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Executive Officer
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2006
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$
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$
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$
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$
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$
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$
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$
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$
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James E. Goodwin,
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2008
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$506,602
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$
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$91,997
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$97,052
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$94,117
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$
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$10,082
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$799,850
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Former Interim
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2007
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$29,167
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$
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$10,450
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$9,542
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$
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$
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$64
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$49,223
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President and Chief
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2006
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$
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$
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$
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$
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$
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$
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$
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$
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Executive Officer
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William G. Barker, III,
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2008
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$18,541
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$
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$276
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$104
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$2,344
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$
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$665
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$21,930
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Senior Vice President
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2007
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$
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$
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$
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$
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$
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$
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$
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$
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and Chief Financial
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2006
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$
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$
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$
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$
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$
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$
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$
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$
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Officer
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Stephanie K. Kushner,
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2008
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$336,640
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$
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$6,317
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$9,776
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$
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$4,321
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$882,517
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$1,239,571
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Former Senior Vice
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2007
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$330,460
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$
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$148,015
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$115,345
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$146,159
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$
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$212,227
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$952,206
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President and Chief
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2006
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$317,750
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$
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$173,987
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$150,088
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$188,996
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$133,618
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$25,257
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$989,696
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Financial Officer
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Peter R. Guile,
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2008
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$144,273
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$400,000
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$21,129
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$5,759
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$
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$3,538
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$80,737
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$655,436
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President of former
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2007
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$219,742
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$133,335
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$51,295
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$35,538
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$135,651
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$
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$274,281
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$849,842
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subsidiary,
E-ONE,
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2006
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$
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$
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$
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$
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$
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$
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$
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$
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Inc.
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David R. McConnaughey,
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2008
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$326,000
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$
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$107,953
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$54,221
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$39,360
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$
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$24,598
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$552,132
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President, Safety and
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2007
|
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$320,000
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$
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$86,272
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$46,955
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$247,889
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$
|
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$19,481
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$720,597
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Securities Systems
|
|
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|
2006
|
|
|
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|
$263,183
|
|
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$300,000
|
|
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$91,997
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|
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$26,711
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$242,301
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$
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$301,540
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$1,225,732
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Group
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Jennifer L. Sherman,
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2008
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$277,528
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$25,000
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$55,055
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$39,992
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$30,715
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$9,413
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$64,483
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$502,186
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|
Senior Vice President,
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2007
|
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$
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$
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$
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$
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$
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$
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$
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$
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Human Resources and
|
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2006
|
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|
|
$
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|
|
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$
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$
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$
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$
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$
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$
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$
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General Counsel
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Mark D. Weber,
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2008
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$301,457
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$
|
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$90,940
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$62,244
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$36,694
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$
|
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$86,073
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|
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$577,408
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President,
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2007
|
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$288,475
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$
|
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$125,465
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|
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$92,170
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$337,358
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$
|
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$56,146
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$899,615
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Environmental
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2006
|
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$262,260
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|
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$
|
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$140,856
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$97,371
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$291,170
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$
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$13,647
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$805,304
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Solutions Group
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(1) |
|
Includes with respect to Mr. Osborne, a signing bonus and a
housing allowance of $500,000 and reimbursement of $263,000 for
a retention bonus Mr. Osborne repaid to his former
employer. Mr. Guile received a bonus of $400,000 upon the
sale of
E-ONE, Inc.
and resulting termination of his employment with our Company.
Ms. Sherman received a special bonus in the amount of
$25,000 as a performance award and in connection with her April
2008 promotion to the position of Senior Vice President, Human
Resources (in addition to her existing position as our General
Counsel). |
|
(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, 2007
and 2008, in accordance with SFAS 123(R). These figures
include amounts related to unvested restricted stock awards and
performance |
29
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share units awarded for the three-year period beginning on
January 1, 2008 granted under our long-term incentive plan
and discussed in further detail on page 22 in the section
titled Compensation Discussion and Analysis -
Elements of Executive Compensation under the
heading Long-Term Equity Incentives.
Assumptions used in the calculation of these amounts for fiscal
years ended December 31, 2006, 2007 and 2008 are included
in Note 8 to our Companys audited financial
statements for the fiscal year ended December 31, 2008,
included in our Companys Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
February 27, 2009. Assumptions used in the calculation of
these amounts for fiscal years ended December 31, 2004 and
2005 are included in Note 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
these amounts for the fiscal year ended December 31, 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, 2008, 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 22 in the section titled Compensation
Discussion and Analysis - Elements of Executive
Compensation under the heading Long- Term
Equity Incentives. Assumptions used in the calculation
of this amount for fiscal years ended December 31, 2006,
2007 and 2008 are included in Note 8 to our Companys
audited financial statements for the fiscal year ended
December 31, 2008, included in our Companys Annual
Report on
Form 10-K
filed with the Securities and Exchange Commission on
February 27, 2009. Assumptions used in the calculation of
this amount for fiscal years ended December 31, 2004 and
2005 are included in Note 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. |
|
(4) |
|
Reflects the cash awards to the named individuals under our
management incentive plan that is discussed in further detail
beginning on page 20 in the section titled
Compensation Discussion and Analysis
Elements of Executive Compensation under the
heading Annual Cash Incentive Payments. |
|
(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. 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 our common stock are paid at the same rate as
dividends paid to stockholders. |
|
(6) |
|
All Other Compensation includes the following aggregate
perquisites and other items that equaled or exceeded $10,000: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution to
|
|
|
|
Restoration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
|
|
|
|
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
|
|
|
|
|
|
|
|
Auto
|
|
|
|
|
|
|
|
Plans,
|
|
|
|
including
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
Gross-Ups
|
|
|
|
Severance
|
|
|
|
Allowance
|
|
|
|
Relocation
|
|
|
|
including 401(k)
|
|
|
|
Match
|
|
|
|
Perquisites
|
|
|
|
Totals
|
|
Name
|
|
|
($)(t)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)(u)
|
|
|
|
Match ($)
|
|
|
|
($)(v)
|
|
|
|
($)(w)
|
|
|
|
($)
|
|
William H. Osborne
|
|
|
|
$39,947
|
|
|
|
|
$
|
|
|
|
|
$4,025
|
|
|
|
|
$127,151
|
|
|
|
|
$3,250
|
|
|
|
|
$200,000
|
|
|
|
|
$7,773
|
|
|
|
|
$382,146
|
|
|
James E. Goodwin(x)
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$9,200
|
|
|
|
|
$
|
|
|
|
|
$882
|
|
|
|
|
$10,082
|
|
|
William G. Barker, III(y)
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
Stephanie K. Kushner
|
|
|
|
$
|
|
|
|
|
$773,412
|
(z)
|
|
|
|
$11,400
|
|
|
|
|
$
|
|
|
|
|
$20,700
|
|
|
|
|
$66,228
|
|
|
|
|
$10,777
|
|
|
|
|
$882,517
|
|
|
Peter R. Guile
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$6,736
|
|
|
|
|
$36,400
|
|
|
|
|
$20,469
|
|
|
|
|
$16,857
|
|
|
|
|
$275
|
|
|
|
|
$80,737
|
|
|
David R. McConnaughey
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$11,400
|
|
|
|
|
$
|
|
|
|
|
$12,650
|
|
|
|
|
$
|
|
|
|
|
$548
|
|
|
|
|
$24,598
|
|
|
Jennifer L. Sherman
|
|
|
|
$10,450
|
|
|
|
|
$
|
|
|
|
|
$11,400
|
|
|
|
|
$
|
|
|
|
|
$20,700
|
|
|
|
|
$21,466
|
|
|
|
|
$467
|
|
|
|
|
$64,483
|
|
|
Mark D. Weber
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$11,400
|
|
|
|
|
$
|
|
|
|
|
$20,700
|
|
|
|
|
$53,166
|
|
|
|
|
$807
|
|
|
|
|
$86,073
|
|
|
|
|
|
(t) |
|
Reflects a tax
gross-up
for amounts paid to Mr. Osborne with respect to his
relocation, moving and temporary living expenses.
Ms. Sherman received a tax
gross-up
on the taxes associated with her special bonus in the amount of
$25,000. |
30
|
|
|
(u) |
|
Mr. Osborne received $127,151 in relocation, moving and
temporary living expenses in accordance with his employment
agreement. Mr. Guile received additional relocation
assistance in the amount of $36,400 in 2008 related to moving
and the sale of his home in connection with his 2007 relocation,
$35,100 of which was attributable to the carrying cost of
Mr. Guiles former home which we expect to recoup a
portion of upon the sale of the home to a third party. |
|
(v) |
|
Under Mr. Osbornes employment agreement, our Company
agreed to credit his Savings Restoration Plan account in the
amount of $200,000. In 2008, Messrs. Guile and Weber and
Mesdames Kushner and Sherman participated in our Companys
Savings Restoration Plan. Ms. Kushner was previously
eligible to receive a supplemental payment upon retirement at or
after age 57 under our pension plan. 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). Accordingly, Ms. Kushner received the following
payments: March 1, 2007 $308,472 and
March 1, 2008 $30,322. The remaining payments
were forfeited as of her last day of employment. |
|
(w) |
|
Includes with respect to Mr. Osborne, $7,500 for
financial/tax preparation services and a life insurance premium
payments of $273. With respect to Ms. Kushner, includes
$5,000 as a Company match to a United Way Pledge, $5,210 as
vacation pay, and $566 in life insurance premium payments. For
Mr. Weber, includes $300 for the United Airlines Red Carpet
Membership program and $507 for insurance premiums. With respect
to the other named executive officers, amounts represent the
dollar value of life insurance premiums paid by our Company for
the benefit of such named executive officer. |
|
(x) |
|
Mr. Goodwin, while serving as our interim President and
Chief Executive Officer, did not receive any perquisites or
other such items during 2008 except for the contribution to our
Companys Retirement Savings Plan and dollar value of
insurance premiums. |
|
(y) |
|
Mr. Barker began his employment with our Company on
December 10, 2008. Mr. Barker did not have aggregate
perquisites and other items that equaled or exceeded $10,000 in
2008. |
|
(z) |
|
Includes the following severance components: cash severance,
$745,140; continuation of health and welfare benefits, $9,918;
life insurance and death benefit payments, $854; and
outplacement services, $17,500. |
31
Grants of
Plan-Based Awards
The following table sets forth information concerning grants of
plan-based awards earned for the fiscal year ended
December 31, 2008 for the named executive officers.
Grants of
Plan-Based Awards in 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise
|
|
|
Grant Date
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Number of
|
|
|
or Base
|
|
|
Fair Value
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards
|
|
|
Estimated Future Payouts Under Equity
|
|
|
of Shares
|
|
|
Securities
|
|
|
Price of
|
|
|
of Stock
|
|
|
|
|
|
|
(1)(2)
|
|
|
Incentive Plan Awards(3)
|
|
|
of Stock
|
|
|
Underlying
|
|
|
Option
|
|
|
and Option
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
or Units
|
|
|
Options
|
|
|
Awards
|
|
|
Awards
|
Name
|
|
|
Date
|
|
|
Threshold ($)
|
|
|
Target ($)
|
|
|
Maximum ($)
|
|
|
Threshold (#)
|
|
|
Target (#)
|
|
|
Maximum (#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
($/Sh)(4)
|
William H. Osborne(5)
|
|
|
|
|
|
|
|
|
$86,312
|
|
|
|
|
$172,623
|
|
|
|
|
$345,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/15/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,248
|
|
|
|
|
20,991
|
|
|
|
|
41,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$366,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/15/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$366,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/15/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,137
|
|
|
|
|
$14.93
|
|
|
|
|
$366,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James E. Goodwin(6)
|
|
|
|
|
|
|
|
|
$235,294
|
|
|
|
|
$470,587
|
|
|
|
|
$941,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William G. Barker, III(7)
|
|
|
|
|
|
|
|
|
$5,861
|
|
|
|
|
$11,721
|
|
|
|
|
$23,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/10/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$25,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/10/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,888
|
|
|
|
|
$7.60
|
|
|
|
|
$8,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephanie K. Kushner(8)
|
|
|
|
|
|
|
|
|
$101,610
|
|
|
|
|
$223,555
|
|
|
|
|
$585,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,225
|
|
|
|
|
8,900
|
|
|
|
|
19,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$113,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$98,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,600
|
|
|
|
|
$10.59
|
|
|
|
|
$101,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter R. Guile(8)
|
|
|
|
|
|
|
|
|
$67,980
|
|
|
|
|
$135,960
|
|
|
|
|
$271,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,450
|
|
|
|
|
5,800
|
|
|
|
|
11,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$74,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$64,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,200
|
|
|
|
|
$10.59
|
|
|
|
|
$65,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David R. McConnaughey
|
|
|
|
|
|
|
|
|
$98,400
|
|
|
|
|
$200,631
|
|
|
|
|
$456,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,900
|
|
|
|
|
7,600
|
|
|
|
|
15,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$97,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$84,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,400
|
|
|
|
|
$10.59
|
|
|
|
|
$86,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jennifer L. Sherman
|
|
|
|
|
|
|
|
|
$76,789
|
|
|
|
|
$166,862
|
|
|
|
|
$423,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,200
|
|
|
|
|
4,800
|
|
|
|
|
9,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$61,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$54,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,100
|
|
|
|
|
$10.59
|
|
|
|
|
$55,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark D. Weber
|
|
|
|
|
|
|
|
|
$91,735
|
|
|
|
|
$186,933
|
|
|
|
|
$421,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,050
|
|
|
|
|
8,200
|
|
|
|
|
16,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$104,796
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$91,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,500
|
|
|
|
|
$10.59
|
|
|
|
|
$94,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
See the section titled Compensation Discussion and
Analysis Elements of Executive Compensation
under the heading Annual Cash Incentive
Payments in this proxy statement beginning on
page 20. |
|
(2) |
|
These estimated future payouts include potential carry forward
amounts, if any earned. |
|
(3) |
|
These columns include information regarding only
performance-based stock unit grants. The Threshold
column represents the minimum amount payable when threshold
performance is met. If performance is below the threshold
performance, no amount is paid. The Target column
represents the amount payable if the specified total stockholder
return (TSR) performance target relative to the comparator group
is reached. The Maximum column represents the full
payout potential under the plan if our three-year TSR is highest
among all of the companies in the comparator group. Shares are
awarded, if any, as a percentage of the pre-determined target
shares for that executive officer ranging from 0% to 200%
determined by percentile rank. For a more detailed discussion of
the performance-based stock unit grants, see the section titled
Compensation Discussion and Analysis - Elements
of Executive Compensation under the heading titled
Long-Term Equity Incentives beginning on
page 22 of this proxy statement. |
|
(4) |
|
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 $3.42 for options granted on
February 22, 2008, $4.88 for options granted on
September 15, 2008, and $2.14 for |
32
|
|
|
|
|
options granted on December 10, 2008. A Monte
Carlo simulation model is used to estimate the fair value
of performance share units, resulting in an estimated value of
$12.78 for performance stock units granted on February 22,
2008 and $17.47 for performance stock units granted on
September 15, 2008. |
|
(5) |
|
Mr. Osbornes awards were made on his first day of
employment pursuant to his employment agreement with our Company
further described on page 33 of this proxy statement. |
|
(6) |
|
Annual incentive award provided in connection with
Mr. Goodwins service as our interim President and
Chief Executive Officer through September 15, 2008. Please
see page 12 for equity awards granted to Mr. Goodwin
in connection with his service as a director after
September 15, 2008. |
|
(7) |
|
Mr. Barkers awards were made pursuant to the terms of
his offer letter with our Company as further described in the
section titled Executive Compensation in the Last
Fiscal Year under the heading Additional
Information About the Compensation Paid to Named Executive
Officers on page 33 of this proxy statement. |
|
(8) |
|
Neither Ms. Kushner nor Mr. Guile had incentive plan
awards outstanding at year-end as a result of their departures. |
Additional
Information About the Compensation Paid to the Named Executive
Officers
On December 11, 2007, our Board of Directors appointed
Mr. James E. Goodwin as interim President and Chief
Executive Officer of our Company. Mr. Goodwin served in
this capacity through September 15, 2008, when the Board of
Directors appointed William H. Osborne as the President and
Chief Executive Officer of our Company. Mr. Goodwin serves
as a director of our Company. In connection with his appointment
as interim President and Chief Executive Officer,
Mr. Goodwin received an option to purchase
50,000 shares of our common stock at an exercise price of
$11.84 per share, the closing price of our common stock on
December 11, 2007, the date of grant. Mr. Goodwin also
received an award of 20,000 shares of restricted stock of
our Company. These options and restricted shares became fully
vested and exercisable on Mr. Goodwins last day as
our interim President and Chief Executive Officer.
On September 15, 2008, our Board of Directors appointed
William H. Osborne as the President and Chief Executive Officer
of our Company, effective immediately. Pursuant to his
employment agreement, Mr. Osbornes initial annual
base salary was set at $650,000. Mr. Osborne is eligible
for a prorated annual incentive bonus in 2008. His 2008 target
annual incentive bonus is 90% of his annual base salary. In
connection with his employment, Mr. Osborne received an
option to purchase 75,137 shares of our common stock at an
exercise price of $14.93 per share, the closing price of our
stock on September 15, 2008, the date of grant. The option
will vest and become exercisable as to one-third of the shares
subject thereto on each of September 15, 2009, 2010 and
2011. Mr. Osborne also received an award of
24,559 shares of our Companys restricted stock that
will fully vest on September 15, 2011 and a
performance-based restricted stock unit award for
20,991 shares of our common stock, the vesting of which is
tied to the attainment of three-year performance metrics
relative to our Companys designated comparator group for
the performance period beginning on January 1, 2008 and
ending on December 31, 2010. Additionally, our Company
credited $200,000 to a Savings Restoration Plan account
established on behalf of Mr. Osborne. Upon each anniversary
date of Mr. Osbornes employment, we will contribute
an additional $200,000 to this account through 2017. These
amounts vest over three years at a rate of one-third of the
amount in each year. We paid Mr. Osborne a signing bonus
and housing allowance of $500,000 with respect to his purchase
of a permanent residence in the Chicago, Illinois area, subject
to prorated repayment to the extent he does not continue his
employment with our Company for at least 24 months. We also
reimbursed Mr. Osborne for reasonable relocation costs and
for his repayment of a retention bonus to his former employer in
the amount of $263,000. Mr. Osborne is also entitled to an
automobile allowance of $13,800 per year and an allowance of
$7,500 per year for financial and estate planning services.
Mr. Osborne is eligible to participate in our
Companys group benefit plans generally available to all
employees. Additionally, Mr. Osborne is eligible to
participate in all of Company sponsored health and welfare
benefits available to our executive officers, except to the
extent such benefits may be duplicative with those provided
under his employment agreement. Mr. Osborne is also
entitled to certain post-employment payments under his
employment agreement, as set forth in this proxy statement on
page 38 in the section titled Executive
Compensation in the Last Fiscal Year under the heading
titled Other Potential Post-Employment
Payments.
Effective December 10, 2008, Stephanie Kushner no longer
served as the Senior Vice President and Chief Financial Officer
of our Company and her last day of employment was
December 30, 2008. Pursuant to an agreement entered into on
January 6, 2009 with our Company, Ms. Kushner received
a cash payment of $541,920, which is approximately the sum of
Ms. Kushners annual base salary (i.e., $338,700) and
her target annual bonus for 2008 (i.e., 60% of her base salary,
or $203,220). Additionally, Ms. Kushner received $203,220,
the amount equal to her unpaid 2008 target annual bonus.
Ms. Kushner is entitled to receive health and welfare
benefits at the same coverage level and cost as in effect prior
to her termination of services for up to an additional eighteen
months, as well as a
33
life insurance and death benefit payout covering an eighteen
month period. Further, Ms. Kushner is entitled to receive
$17,500 in outplacement services. Ms. Kushner has until
March 30, 2009 to exercise previously vested stock options.
Unvested stock options totaling 52,412, restricted stock awards
totaling 29,900, and 8,900 performance shares were forfeited.
Pursuant to the agreement, Ms. Kushner waived any rights to
receive any severance pay under any severance/separation plan,
policy or program maintained by our Company. Additionally, in
consideration of the amounts paid to Ms. Kushner,
Ms. Kushner signed a general release with respect to her
employment with and separation from employment with our Company
and agreed not to compete with our Company for a period of one
year or to solicit our employees for such period.
Effective December 10, 2008, the Board of Directors
appointed William G. Barker, III as our Senior Vice
President and Chief Financial Officer. Mr. Barkers
annual base salary was set at $325,000 in 2008. Mr. Barker
was eligible for a pro-rated annual incentive bonus in 2008 in
which his target annual incentive bonus was 60% of his annual
base salary with a maximum bonus potential of 120% of base
salary. Beginning in 2009, Mr. Barker became eligible to
participate in our Companys group benefit plans generally
available to all employees. In connection with his employment,
Mr. Barker received an option to purchase 3,888 shares
of our common stock at an exercise price of $7.60 per share, the
closing price of our common stock on December 10, 2008, the
date of grant. The option will vest and become exercisable as to
one-third of the shares on each of the first three anniversaries
following the date of grant. Mr. Barker also received an
award of 3,290 shares of our Companys restricted
stock that will fully vest on the third anniversary of the date
of grant. Mr. Barker will receive a $950 monthly
automobile allowance. Additionally, Mr. Barker is eligible
to participate in all of our Company-sponsored health and
welfare benefits available to our executive officers beginning
January 1, 2009, including the right to participate in the
Executive General Severance Plan and to enter into a standard
Change in Control Agreement.
In connection with the sale of
E-ONE, Inc.,
a former Company subsidiary, on August 5, 2008, Peter Guile
was no longer employed by our Company. Pursuant to an agreement
entered into on March 20, 2008 between Mr. Guile and
our Company, we paid Mr. Guile a one-time bonus of $400,000
in exchange for his waiver of any rights to receive any
severance pay under any severance or separation plan, policy or
program maintained by us. Mr. Guile had until
November 14, 2008 to exercise previously vested stock
options. Unvested stock options totaling 29,216, restricted
stock awards totaling 14,700, and 5,800 performance shares were
forfeited.
34
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 2008 fiscal year, held by the named executive officers:
Outstanding
Equity Awards at 2008 Fiscal Year-End
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Option Awards
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Stock Awards
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Equity
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Equity
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Incentive
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Incentive
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Plan
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Plan
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Awards:
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Awards:
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Market or
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Equity
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Number of
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Payout
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Incentive
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Market
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Unearned
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Value of
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Number of
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Plan Awards:
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Value of
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Shares,
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Unearned
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Number of
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Securities
|
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Number of
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|
Number of
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Shares or
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|
Units, or
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|
Shares,
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|
Securities
|
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Underlying
|
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|
Securities
|
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Shares or
|
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Units of
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Other
|
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|
Units, or
|
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Underlying
|
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Unexercised
|
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|
Underlying
|
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Units of
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Stock that
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Rights that
|
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Other
|
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|
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Unexercised
|
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|
Options (#)
|
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Unexercised
|
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Option
|
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Option
|
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Stock that
|
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|
Have Not
|
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|
Have Not
|
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|
Rights that
|
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|
|
|
|
|
Options (#)
|
|
|
Unexercisable
|
|
|
Unearned
|
|
|
Exercise
|
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|
Expiration
|
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|
Have Not
|
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Vested
|
|
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Vested
|
|
|
Have Not
|
Name
|
|
|
Grant Date
|
|
|
Exercisable
|
|
|
(1)
|
|
|
Options(#)
|
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Price($)(2)
|
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Date
|
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Vested (#)(3)
|
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($)(4)
|
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($)(5)
|
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Vested ($)
|
William H. Osborne
|
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|
9/15/2008
|
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|
|
|
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|
|
75,137
|
|
|
|
|
|
|
|
|
|
$14.93
|
|
|
|
|
9/15/2018
|
|
|
|
|
24,559
|
|
|
|
|
$201,629
|
|
|
|
|
20,991
|
|
|
|
|
$172,336
|
|
|
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|
James E. Goodwin
|
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12/11/2007
|
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50,000
|
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|
|
|
|
|
|
|
|
|
|
|
|
$11.84
|
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|
|
|
12/11/2017
|
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William G. Barker, III
|
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12/10/2008
|
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3,888
|
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|
|
|
|
|
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$7.60
|
|
|
|
|
12/10/2018
|
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|
3,290
|
|
|
|
|
$27,011
|
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Stephanie K. Kushner(6)
|
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3/1/2002
|
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25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$25.67
|
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|
3/30/2009
|
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|
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2/6/2003
|
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|
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20,000
|
|
|
|
|
|
|
|
|
|
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|
$15.65
|
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|
3/30/2009
|
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|
10/30/2003
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$14.48
|
|
|
|
|
3/30/2009
|
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|
|
|
|
|
|
|
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|
|
2/12/2004
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$18.89
|
|
|
|
|
3/30/2009
|
|
|
|
|
|
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|
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|
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|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/10/2005
|
|
|
|
|
29,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$16.01
|
|
|
|
|
3/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/2006
|
|
|
|
|
16,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$16.94
|
|
|
|
|
3/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/26/2007
|
|
|
|
|
7,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$16.10
|
|
|
|
|
3/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
|
|
|
|
|
|
2/22/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$10.59
|
|
|
|
|
3/30/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
Peter R. Guile(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
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|
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David R. McConnaughey
|
|
|
|
3/6/2006
|
|
|
|
|
10,000
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
$17.55
|
|
|
|
|
3/6/2016
|
|
|
|
|
18,900
|
|
|
|
|
$155,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/26/2007
|
|
|
|
|
6,200
|
|
|
|
|
12,400
|
|
|
|
|
|
|
|
|
|
$16.10
|
|
|
|
|
2/26/2017
|
|
|
|
|
8,200
|
|
|
|
|
$67,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/2008
|
|
|
|
|
|
|
|
|
|
25,400
|
|
|
|
|
|
|
|
|
|
$10.59
|
|
|
|
|
2/22/2018
|
|
|
|
|
8,000
|
|
|
|
|
$65,680
|
|
|
|
|
7,600
|
|
|
|
|
$62,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jennifer L. Sherman
|
|
|
|
4/15/1999
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$21.94
|
|
|
|
|
4/15/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/22/1999
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$17.50
|
|
|
|
|
10/22/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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12/9/1999
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1,000
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|
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|
$16.06
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|
12/9/2009
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2/1/2001
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1,000
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|
|
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|
|
|
|
$21.95
|
|
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|
2/1//2011
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2/6/2002
|
|
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1,000
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
$23.21
|
|
|
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2/6/2012
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