def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
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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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Soliciting Material pursuant to §240.14a-12 |
GREAT WOLF RESORTS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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We cordially invite you to attend our annual meeting of
stockholders to be held at the Hilton Chicago OHare
Airport, Chicago, Illinois, on Monday, June 6, 2011 at
4:00 p.m., Central Time. At this meeting, you and our other
stockholders will be able to vote on the following:
1. The election of all six directors to serve on our Board
of Directors until our annual meeting of stockholders in 2012,
or until their successors have been duly elected and qualified;
2. The ratification of the appointment of Grant Thornton
LLP as independent auditors of Great Wolf Resorts, Inc. for the
fiscal year ending December 31, 2011;
3. An advisory vote on the companys executive
compensation;
4. An advisory vote on the frequency of stockholder
advisory votes on the companys executive
compensation; and
5. Any other business that may properly come before our
annual meeting, including any adjournments or postponements of
our annual meeting.
Only stockholders of record at the close of business on Friday,
April 8, 2011 will be entitled to vote at our annual
meeting or any adjournment of our annual meeting.
All company stockholders are cordially invited to attend the
meeting in person. Your vote is very important. Whether or not
you attend the meeting, please take the time to vote your shares
by promptly completing, signing, dating and mailing the proxy
card in the postage-paid envelope provided. You retain the right
to revoke the proxy at any time before it is actually voted by
delivering notice of such revocation to the Secretary of the
company at the annual meeting or by filing with the Secretary of
the company either notice of revocation or a duly
executed proxy bearing a later date.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 6,
2011.
Our proxy statement and the proxy card for our 2011 Annual
Meeting of Stockholders are available on our Web site at
www.greatwolf.com. Information on our Web site, other
than this proxy statement and the proxy card, is not a part of
this proxy statement.
BY ORDER OF THE BOARD OF DIRECTORS:
JAMES A. CALDER, Secretary
Madison, Wisconsin
April 20, 2011
TABLE OF
CONTENTS
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Our Board of Directors is soliciting your proxy for use at our
annual meeting of stockholders to be held at the Hilton Chicago
OHare Airport, Chicago, Illinois, on Monday, June 6,
2011 at 4:00 p.m., Central Time, and at any adjournments of
our annual meeting. You are invited to attend our annual meeting
and vote your shares directly. Even if you do not attend,
however, you may vote by proxy, which allows you to instruct
another person to vote your shares on your behalf at our annual
meeting. For this purpose, we enclose one blank proxy card for
your use.
The mailing address of our principal executive offices is 525
Junction Road, Suite 6000 South, Madison, Wisconsin 53717.
This proxy statement and the accompanying proxy card and Notice
of Annual Meeting are being mailed to our stockholders on or
about April 22, 2011.
Purposes
of Our Annual Meeting
The purposes of our annual meeting are (1) to elect six
directors to serve on our Board of Directors, (2) to ratify
the appointment of Grant Thornton LLP as independent auditors of
Great Wolf Resorts, Inc. for the fiscal year ending
December 31, 2011, (3) to provide an advisory vote on
the companys executive compensation, (4) to provide
an advisory vote on the frequency of stockholder advisory votes
on the companys executive compensation, and (5) to
transact any other business that may properly come before our
annual meeting and any adjournments of our annual meeting. We
know of no matters, other than the election of directors,
ratification of the appointment of our auditors, advisory vote
on executive compensation and advisory vote on the frequency of
stockholder advisory votes on executive compensation to be
brought before our annual meeting.
This
Proxy Solicitation
There are two parts to this proxy solicitation: the proxy card
and this proxy statement. The proxy card is the means by which
you actually authorize another person to vote your shares in
accordance with your instructions. This proxy statement provides
you information that you may find useful in deciding how to vote.
Proxies are being solicited by and on behalf of our Board of
Directors, and the solicitation of proxies is being made
primarily by the use of the mails. We will bear the cost of
preparing and mailing this proxy statement and the accompanying
material and the cost of any supplementary solicitations which
may be made by mail, telephone or personally by our officers and
employees, who will not be additionally compensated for their
activities. We have retained Registrar and Transfer Company to
provide administrative and record-keeping assistance in the
solicitation of proxies.
No person is authorized to give any information or to make any
representation not contained in this proxy statement and, if
given or made, you should not rely on that information or
representation as having been authorized by us. This proxy
statement does not constitute the solicitation of a proxy, in
any jurisdiction, from anyone to whom it is unlawful to make
such proxy solicitation in that jurisdiction. The delivery of
this proxy statement shall not, under any circumstances, imply
that there has been no change in the information set forth since
the date of this proxy statement.
VOTING
Record
Date for Our Annual Meeting; Who Can Vote at Our Annual
Meeting
Our Board of Directors has fixed the close of business on
Friday, April 8, 2011, as the record date for determining
which of our stockholders are entitled to receive notice of, and
to vote at, our annual meeting. You will be entitled to notice
of, and to vote at, our annual meeting and any adjournments of
our annual meeting, only if you were a stockholder of record at
the close of business on the record date. At the close of
business on our record date of April 8, 2011, we had issued
and outstanding 32,320,045 shares of our common stock,
which are entitled to vote at our annual meeting. See
Required Votes.
How to
Vote Your Shares and How to Revoke Your Proxy
How to Vote. You may vote your shares at our
annual meeting in person, or if you cannot attend our annual
meeting in person or you wish to have your shares voted by proxy
even if you do attend our annual meeting, you may vote by duly
authorized proxy. To vote in person, you must attend the annual
meeting and obtain and submit a ballot, which will be provided
at the meeting. To vote by proxy, you must complete and return
the enclosed proxy card.
By completing and returning the proxy card and by following the
specific instructions on the card, you will direct the
designated persons (known as proxies) to vote your
shares at our annual meeting in accordance with your
instructions. Our Board of Directors has appointed James A.
Calder and Alexander P. Lombardo to serve as the proxies for our
annual meeting.
Your proxy card will be valid only if you sign, date and return
it before our annual meeting. If you complete the entire proxy,
then the designated proxies will vote your shares
FOR the election of the six nominees for directors
or will withhold your vote for one or more nominees if you so
specify. If a nominee for election to our Board of Directors is
unable to serve which we do not
anticipate or if any other matters are properly
raised at the annual meeting, then either Messrs. Calder or
Lombardo as the designated proxies will vote your shares in
accordance with his best judgment.
Even if you plan to attend our annual meeting, we ask you to
vote, sign, date and return the enclosed proxy card as soon as
possible. If your shares are held in the name of a broker or
other intermediary, you may vote and revoke a previously
submitted vote only through, and in accordance with, procedures
established by the record holder(s) or their agent(s).
How to Revoke a Proxy. If you have already
returned your proxy to us, you may revoke your proxy at any time
before it is exercised at our annual meeting by any of the
following actions:
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by notifying our Secretary in writing at or before the annual
meeting that you would like to revoke your proxy,
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by completing a proxy with a later date and by returning it to
us at or before the annual meeting, or
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by attending our annual meeting and voting in person. (Note,
however, that your attendance at our annual meeting, by itself,
will not revoke a proxy you have already returned to us; you
must also vote your shares in-person at our annual meeting to
revoke an earlier proxy.)
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If you choose either of the first two means to revoke your
proxy, you must submit either your notice of revocation or your
new proxy card by mail to us at our principal executive offices
located at 525 Junction Road, Madison, Wisconsin 53717,
Attention: Corporate Secretary.
Required
Votes
Voting Rights. You are entitled to one vote
for each share of our common stock that you hold. Cumulative
voting of our shares is not allowed.
Quorum Requirements. Under Delaware law and
our bylaws, a majority of votes entitled to be cast at the
annual meeting, represented in person at the annual meeting or
by proxy, will constitute a quorum for the
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consideration of the election of the nominees for directors and
for each matter to properly come before our annual meeting.
Vote Required. For election of directors, the
six nominees receiving the highest number of affirmative votes
will be elected as directors. This number is called a plurality.
For all other matters, the affirmative vote of a majority of the
shares represented at the meeting and entitled to vote is
required.
Abstentions and Broker Non-Votes. Abstentions
will not be counted for or against
proposals, but will be counted for the purpose of determining
the existence of a quorum.
Under applicable rules of the NASDAQ Global Market (the exchange
on which our common stock is traded), or NASDAQ, brokers holding
shares for beneficial owners in nominee or street
name must vote those shares according to the specific
instructions they receive from the beneficial owners. If you do
not provide your broker with specific instructions regarding how
to vote your shares, your broker still has authority to vote
your shares on certain routine matters. Under
NASDAQs rules, however, brokers do not have discretionary
voting power on non-routine matters. In these cases, if no
specific voting instructions are provided by the beneficial
owner, the broker may not vote on non-routine proposals. This
results in what is known as a broker non-vote.
Broker non-votes will not be counted for
or against a proposal, but will be counted only for
the purpose of determining the existence of a quorum.
The election of directors is no longer a routine
matter. Specific instructions from beneficial owners are
required under SEC rules, otherwise broker non-votes
will arise in the context of voting for the nominees for
directors.
If you do not vote your shares, your brokerage firm may either
(1) vote your shares on routine matters, if any, or
(2) leave your shares unvoted.
To be certain that your shares are voted at our annual meeting,
we encourage you to provide instructions to your brokerage firm
by signing and returning the enclosed proxy card.
PROPOSAL 1
ELECTION OF DIRECTORS
Board of
Director Nominees
At our annual meeting, our stockholders will vote on the
election of six directors.
Our Nominating and Corporate Governance Committee has
recommended to our Board of Directors as nominees, and our Board
of Directors has nominated, Joseph Vittoria, Kim Schaefer, Elan
Blutinger, Randy Churchey, Edward Rensi and Howard Silver for
election to our Board of Directors. If elected, all of these
individuals will serve as directors for a one-year term that
will expire at our annual meeting of stockholders in 2012, or
when their successors are duly elected and qualified. You will
find below a brief biography of each nominee. See also
Ownership of Our Common Stock on page 12 for
information on their holdings of our common stock.
The Nominating and Corporate Governance Committee seeks
directors with established strong professional reputations and
experience in areas relevant to the companys strategy and
operations. Also, the Nominating and Corporate Governance
Committee believes that each of the nominees has other key
attributes that are important to an effective Board of
Directors: integrity, candor, analytical skills, the willingness
to engage management and each other in a constructive and
collaborative fashion, and the ability and commitment to devote
significant time and energy to service on the Board of Directors
and its committees. The Nominating and Corporate Governance
Committee takes into account diversity considerations in
determining the composition of the Board of Directors and
believes that, as a group, the nominees for the Board of
Directors bring a diverse range of perspectives to the Board of
Directors deliberations.
In addition to the above, the Nominating and Corporate
Governance Committee also considered the specific experience
described in the biographical details that follow in determining
to nominate the individuals set forth below for election as
directors.
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OUR BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR THE ELECTION OF EACH NOMINEE FOR
DIRECTOR.
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Experience of Nominees for Election as Directors
(Terms to Expire 2012) |
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JOSEPH V. VITTORIA, age 75 |
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Mr. Vittoria has served as Chairman of the Board and a
director of our company since 2006. Mr. Vittoria is the
retired chairman and chief executive officer of Travel Services
International, a company he founded and took public in July 1997
and later sold to a large British tour operator. In 1982, he
joined Avis, Inc., as chief operating officer, and later was
named chairman and chief executive officer. His success at Avis
led to his selection as the salaried and management
representative to the board of United Airlines in 1994 when it
created its ESOP. He now is chairman and CEO of Puradyn Filter
Technologies, Inc., a public company, and chairman of Greenjets
Incorporated. Active in community-enhancement programs,
Mr. Vittoria served as a director of the National Crime
Prevention Counsel in Washington, D.C. He later served on
President Reagans Child Safety Partnership in recognition
of his efforts on behalf of missing children. He also is a
former member of the board of directors of the National Center
for Disability Services. A
40-year
travel industry veteran, Mr. Vittoria was elected to the
Travel Industry Association Hall of Leaders in 2000. He holds a
B.S. in civil engineering from Yale University and an M.B.A.
from Columbia University. Mr. Vittoria currently serves as
one of our independent directors and as a member of our Audit,
Compensation and Nominating and Corporate Governance Committees. |
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The Nominating and Corporate Governance Committee concluded that
Mr. Vittoria should continue to serve as a director, in
part, because of his extensive experience in the travel industry. |
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Committees: Audit; Compensation; Nominating and
Corporate Governance |
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KIMBERLY K. SCHAEFER, age 45 |
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Ms. Schaefer has served as our Chief Executive Officer
since January 2009, and was elected to our Board of
Directors in February 2009. She previously served as our
Chief Operating Officer since 2005, and also our Chief Brand
Officer since we commenced operations in 2004. From 1997 until
completion of the our initial public offering in 2004,
Ms. Schaefer served as Senior Vice President of Operations
of The Great Lakes Companies, Inc., our predecessor company, and
its predecessor companies. At Great Lakes, Ms. Schaefer was
involved in site selection and brand development and oversaw all
resort operations. Ms. Schaefer has over 20 years of
hospitality experience and holds a Bachelor of Science degree in
Accounting from Edgewood College in Madison, Wisconsin.
Ms. Schaefer sits on the advisory board for Edgewood
College Business School. Ms. Schaefer is a certified public
accountant. |
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The Nominating and Corporate Governance Committee concluded that
Ms. Schaefer should continue to serve as a director, in
part, because of her previous experience in operations and as
chief executive of the company and the knowledge she has
acquired from years of involvement with the company since its
inception. |
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Committees: None |
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ELAN BLUTINGER, age 55 |
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Mr. Blutinger has been a managing director of Alpine
Consolidated, LLC, a merchant bank specializing in consolidating
fragmented industries, since 1996. He serves as a director of
AudioNow and Vacanza Technology. Mr. Blutinger served as a
director of Hotels.com, a public company, from 2001 to 2003. He
was a founder and director of Resortquest International, a
public company, from 1997 to 2003, a founder and director of
Travel Services International, a public company, from 1996 to
2001, and a director of Online Travel Services (UK), a public
company, from 2000 to 2004, and founder of VRGateway in 2007.
Mr. Blutinger chairs the board of trustees of the
Washington International School in Washington, D.C. He
holds B.A. and J.D. degrees from American University and an M.A.
degree from the University of California at Berkeley.
Mr. Blutinger currently serves as one of our independent
directors and as chair of our Nominating and Corporate
Governance Committee. Mr. Blutinger has been a director of
our company since 2004. |
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The Nominating and Corporate Governance Committee concluded that
Mr. Blutinger should continue to serve as a director, in
part, because of his extensive experience in the travel industry
and his knowledge of corporate governance. |
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Committees: Nominating and Corporate Governance
(Chairman) |
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RANDY L. CHURCHEY, age 50 |
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Mr. Churchey was Interim Chief Executive Office of our
company from May 2008 until December 2008. He has continued his
responsibilities as one of our directors, and has served in this
capacity since we commenced operations in 2004. In January 2010,
Mr. Churchey became president, CEO and a director of
Education Realty Trust, a public company. Mr. Churchey is
also co-chairman of the board of MCR Development, LLC, a private
hotel construction and management company. He was president and
chief executive officer of Golden Gate National Senior Care (the
successor to Beverly Enterprises), the second largest
long-term
care company in the United States, from March 2006 to September
2007. Mr. Churchey served as president and chief operating
officer of RFS Hotel Investors, Inc., a public company, from
1999 to 2003. Mr. Churchey also served as a director of RFS
from 2000 through 2003. From 1997 to 1999, he was senior vice
president and chief financial officer of FelCor Lodging Trust,
Inc., a public company. For nearly 15 years prior to
joining FelCor, Mr. Churchey held various positions in the
audit practice of Coopers & Lybrand, LLP.
Mr. Churchey holds a B.S. degree in accounting from the
University of Alabama and is a certified public accountant. He
currently serves as one of our independent directors, as chair
of our Compensation Committee, and as a member of our Audit
Committee. Mr. Churchey has been a director of our company
since 2004. |
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The Nominating and Corporate Governance Committee concluded that
Mr. Churchey should continue to serve as a director, in
part, because of his extensive experience in the real estate and
hospitality industries, his understanding of corporate finance,
and his prior experience as the companys Interim Chief
Executive Officer. |
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Committees: Audit; Compensation (Chairman) |
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EDWARD H. RENSI, age 66 |
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Mr. Rensi spent 33 years at McDonalds, where he
rose from grill man up through the management ranks to positions
of increasing scope and responsibility, as regional vice
president, senior vice
president-operations
and training, senior executive vice president, chief operating
officer of McDonalds World Wide, and, from 1984 to 1998,
president and CEO of McDonalds USA. Following his
retirement from McDonalds in 1998, Mr. Rensi began a
second career as chairman and CEO of Team Rensi Motorsports.
Mr. Rensi has been actively involved in numerous charity
initiatives throughout his career. In 1998, President Reagan
honored Rensi with the Presidents Volunteer Award, which
recognized his body of charitable work, including co-founding
the world-famous Ronald McDonald House and serving as chairman
of the Ronald McDonald Childrens Charities.
Mr. Rensis volunteer work for numerous educational
charities was cited in 1997 when he was chosen
Italian-American
Man of the Year. Mr. Rensi graduated from The Ohio State
University with a degree in business education. He serves on the
boards of directors of Snap On Tools and International Speedway
Corporation, both public companies. He also serves on the
compensation committees for the ISC and Snap On boards.
Mr. Rensi currently serves as one of our independent
directors and a member of our Compensation and Nominating and
Corporate Governance Committees. Mr. Rensi has been a
director of our company since 2006. |
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The Nominating and Corporate Governance Committee concluded that
Mr. Rensi should continue to serve as a director, in part,
because of his extensive experience in operations with
consumer-oriented companies and brands. |
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Committees: Compensation; Nominating and Corporate
Governance |
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HOWARD A. SILVER, age 56 |
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Mr. Silver was the president and chief executive officer of
Equity Inns, Inc., a public company, until its sale to Whitehall
Global Real Estate Funds in 2007. He joined Equity Inns in 1994
and served in various capacities including: executive vice
president of finance, secretary, treasurer, chief financial
officer and chief operating officer. Mr. Silver is a
certified public accountant. He is a director of Capital Lease
Funding, Inc., a public company, and serves on its audit
committee as chairman, as well as serving on the nomination and
investment committees and is also lead independent director.
Mr. Silver is also a director of Education Realty Trust, a
public company, and serves on its compensation and nominating
and corporate governance committees. He currently serves as one
of our independent directors |
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and as chair of our Audit Committee. Mr. Silver has been a
director of our company since 2004. |
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The Nominating and Corporate Governance Committee concluded that
Mr. Silver should continue to serve as a director, in part,
because of his extensive experience in the real estate and
hospitality industries and his understanding of corporate
finance. |
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Committees: Audit (Chairman) |
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If any nominee becomes unavailable or unwilling to serve as a
director for any reason, the persons named as proxies on the
proxy card are expected to consult with our management in voting
the shares represented by them and will vote in favor of any
substitute nominee or nominees approved by our Board of
Directors. Our Board of Directors has no reason to doubt the
availability of any of the nominees for director. Each of the
nominees has expressed his or her willingness to serve as a
director if elected by our stockholders at our annual meeting.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the Audit
committee, has appointed the firm of Grant Thornton LLP
(GT) as independent auditors to audit our financial
statements for the year ending December 31, 2011, and has
further directed that management submit the selection of
independent public accountants for certification by the
stockholders at the annual meeting. Representatives of GT are
expected to be available during the annual meeting to respond to
stockholders questions and to make a statement should they
desire to do so.
Stockholder ratification of the selection of GT as our
independent auditors is not required by our Bylaws or otherwise.
However, the Board of Directors is submitting the selection of
GT to the stockholders for ratification as a matter of good
corporate practice. If the stockholders fail to ratify the
selection, the Board of Directors and the Audit Committee will
reconsider whether or not to retain that firm. Even if the
selection is ratified, the Board of Directors and the Audit
Committee in their discretion may direct the appointment of a
different independent accounting firm at any time during the
year if they determine that such a change would be in the best
interests of the company and its stockholders.
The ratification of the appointment of GT as independent public
accountants requires the approval of a majority of the votes
cast by holders of our shares. Shares may be voted for or
withheld from this matter. Shares that are withheld and broker
non-votes will have no effect on this matter because
ratification of the appointment of GT requires a majority of the
shares cast.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR THE APPOINTMENT OF GRANT THORNTON LLP AS
INDEPENDENT AUDITORS FOR GREAT WOLF RESORTS, INC.
PROPOSAL 3
ADVISORY VOTE ON EXECUTIVE COMPENSATION
We are asking stockholders to approve an advisory resolution on
the companys executive compensation as reported in this
proxy statement. As described below in the Compensation
Discussion and Analysis section of this proxy statement,
the Compensation Committee has structured our executive
compensation program to be competitive and governed by
pay-for-performance
principles. We emphasize compensation opportunities that reward
results. Our use of stock-based incentives reinforces the
alignment of the interests of our executive officers with those
of our long-term stockholders. In doing so, our executive
compensation program supports our strategic objectives.
We urge stockholders to read the Compensation Discussion
and Analysis beginning on page 15 of this proxy
statement, which describes in more detail how our executive
compensation policies and procedures operate and are
7
designed to achieve our compensation objectives, as well as the
Summary Compensation Table and related compensation tables and
narrative appearing on pages 32 through 44, which provide
detailed information on the compensation of our named
executives. The Compensation Committee and the Board of
Directors believe that the policies and procedures articulated
in the Compensation Discussion and Analysis are
effective in achieving our goals and that the compensation of
our named executives reported in this proxy statement has
supported and contributed to the companys success.
In accordance with recently adopted Section 14A of the
Securities Exchange Act of 1934, as amended (the Exchange
Act), we are asking stockholders to approve the following
advisory resolution at the 2011 Annual Meeting of Stockholders:
RESOLVED, that the stockholders of Great Wolf Resorts, Inc. (the
Company) approve, on an advisory basis, the
compensation of the Companys named executive officers as
disclosed pursuant to Item 402 of
Regulation S-K,
including the Compensation Discussion and Analysis, compensation
tables and narrative discussions in the Proxy Statement for the
Companys 2011 Annual Meeting of Stockholders.
This advisory resolution, commonly referred to as a
say-on-pay
resolution, is non-binding on our Board of Directors. Although
non-binding, our Board of Directors and our Compensation
Committee will review and consider the voting results when
evaluating our executive compensation program.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR THE APPROVAL OF THE ADVISORY RESOLUTION ON
EXECUTIVE COMPENSATION.
PROPOSAL 4
ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON
EXECUTIVE COMPENSATION
In Proposal 3 above, we are asking stockholders to vote on
an advisory resolution on executive compensation. Pursuant to
recently adopted Section 14A of the Exchange Act, in this
Proposal 4 we are asking stockholders to vote on whether
future advisory votes on executive compensation should occur
every year, every two years or every three years. We will be
required, not less frequently than once every six years, to
provide a separate stockholder advisory vote on the frequency of
the advisory votes on executive compensation.
Our Board of Directors values the opinions of the companys
stockholders. The Board of Directors has determined that an
advisory vote on executive compensation held every year would
best enable stockholders to express timely their views on the
companys executive compensation program and enable the
Board of Directors and the Compensation Committee to determine
current stockholder sentiment and take such sentiment into
account when evaluating executive pay.
We understand that our stockholders may have different views as
to what is an appropriate frequency for advisory votes on
executive compensation, and we will carefully review the voting
results. Stockholders will be able to specify one of four
choices for this proposal on the proxy card: 1 year,
2 years, 3 years or abstain. This advisory vote on the
frequency of future advisory votes on executive compensation is
non-binding on the Board of Directors.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR A FREQUENCY OF EVERY YEAR FOR FUTURE ADVISORY VOTES ON
EXECUTIVE COMPENSATION, BEGINNING WITH THE 2012 ANNUAL MEETING
OF STOCKHOLDERS.
OUR BOARD
OF DIRECTORS
Each director serves a one-year term and is subject to annual
re-election. Our Board of Directors nominees consist of six
directors, five of whom are independent as determined by our
Board of Directors under the rules promulgated by the Securities
and Exchange Commission, or SEC, and NASDAQ listing standards.
At our annual meeting, as discussed above, our stockholders will
vote on the six nominees for director.
8
Board of
Directors Leadership Structure
The companys Chief Executive Officer is a member of the
Board of Directors; however, the Boards governance
structure currently separates the roles of Chief Executive
Officer and Chairman of the Board. The Board of Directors serves
a vital role in the oversight of the companys management
team, and believes that the Board of Directors is more effective
in that role when led by an independent Chairman. The Board of
Directors also believes this structure allows the Chief
Executive Officer to focus more on managing the companys
business operations while the Chairman leads the Board of
Directors in fulfilling its corporate governance and oversight
responsibilities while remaining independent of daily operations.
Board of
Directors Role in Risk Oversight
The companys management is responsible for the
day-to-day
management of risks that the company faces, and the Board of
Directors is responsible for the oversight of managements
risk management processes. As part of fulfilling its oversight
responsibilities in relation to the risk management process of
the company, the Board of Directors is responsible for
overseeing managements identification of and planning for
the material risks, including credit, liquidity, and operational
risks, that are derived from the companys business
activities.
The Boards committees assist the Board of Directors in
fulfilling its oversight responsibilities for certain risks. The
Audit Committee assists the Board of Directors by providing
oversight of the management of risks in the specific areas of
financial reporting, internal control, and compliance with legal
and regulatory requirements. The Compensation Committee assists
the Board of Directors in fulfilling its oversight
responsibilities for the management of risks arising from the
companys compensation policies. The Nominating and
Corporate Governance Committee assists the Board of Directors in
fulfilling its oversight responsibilities for the management of
risks related to Board of Directors membership, structure, and
succession.
The Board of Directors also believes that full and open
communication with management is essential for effective risk
management oversight. Senior management members attend Board of
Directors and committee meetings and provide presentations on
business operations, financial results, and strategic matters.
CORPORATE
GOVERNANCE
Independence
of Our Board of Directors
Rules promulgated by the SEC and the listing standards of NASDAQ
require that a majority of our directors be independent
directors. Our Board of Directors has adopted as categorical
standards NASDAQ independence standards to provide a baseline
for determining independence. Under these criteria, our Board of
Directors has determined that the following members of our Board
of Directors are independent: Messrs. Vittoria, Blutinger,
Churchey, Rensi and Silver.
Committees
and Meetings of Our Board of Directors
Board Meetings. We operate under the general
management of our Board of Directors as required by our bylaws
and the laws of Delaware, our state of incorporation. Our Board
of Directors held five meetings during 2010. Each director
nominated for election here in 2010 attended at least 92% of the
total number of those meetings of the Board of Directors and of
any committee of which he was a member. While our Board of
Directors has not adopted a mandatory attendance policy for our
annual meetings, directors are encouraged to attend. In 2010,
all of our current directors attended our annual meeting.
Executive Sessions of Our Non-Management
Directors. The non-management directors of our
Board of Directors met in regularly scheduled executive sessions
that excluded members of the management team at every Board of
Directors meeting held in 2010. At each meeting, the
non-management directors determined who presided over the
meetings agenda and related discussion topics.
Stockholders and other interested persons may contact our
non-management directors in writing by mail
c/o Great
Wolf Resorts, Inc., 525 Junction Road, Suite 6000 South,
Madison, Wisconsin 53717, Attn: Non-Management Directors. All
such letters will be forwarded to our non-management directors.
9
Audit Committee. Our Board of Directors has
established an Audit Committee, currently consisting of
Messrs. Churchey, Silver and Vittoria, with Mr. Silver
serving as its chairman. Our Board of Directors has determined
that each of the Audit Committee members is independent, as that
term is defined under the enhanced independence standards for
audit committee members in the Exchange Act and rules
thereunder, as amended, and under the listing standards of
NASDAQ. Our Board of Directors has also determined that
Mr. Silver is an audit committee financial
expert within the meaning of SEC rules. Our Audit
Committee operates under a written charter adopted by our Board
of Directors. A copy of this charter is available on our Web
site under Investor Relations at greatwolf.com.
Among other duties, this committee:
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reviews and discusses with management and our independent
registered public accounting firm our financial reports,
financial statements and other financial information;
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makes decisions concerning the appointment, retention,
compensation, evaluation and dismissal of our independent
registered public accounting firm;
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reviews with our independent registered public accounting firm
the scope and results of the audit engagement;
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approves all professional services provided by our independent
registered public accounting firm;
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reviews the experience, performance and independence of our
independent registered public accounting firm;
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considers appropriateness of the audit and non-audit fees;
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reviews the adequacy of our internal accounting and financial
controls; and
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reviews any significant disagreements among the companys
management and our independent registered public accounting firm
in connection with preparation of our companys financial
statements.
|
Our Audit Committee met six times in 2010. For more information,
please see Report of our Audit Committee on
page 42.
Compensation Committee. Our Board of Directors
has also established a Compensation Committee, currently
consisting of Messrs. Churchey, Rensi and Vittoria, with
Mr. Churchey serving as its chairman. During 2010, the
committee consisted of Messrs. Rensi, Silver and Vittoria,
with Mr. Rensi serving as its chairman. Our Board of
Directors has determined that each of the Compensation Committee
members is independent, as that term is defined by NASDAQ. The
Compensation Committee operates under a written charter adopted
by our Board of Directors. A copy of this charter is available
on our Web site under Investor Relations at
greatwolf.com. Among other duties, this committee:
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determines compensation for our executive officers and
Board members;
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|
establishes salaries of and awards of performance-based bonuses
to our executive officers; and
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|
determines awards of equity instruments to our officers and
employees.
|
The Compensation Committee met six times in 2010. For more
information, please see Report of the Compensation
Committee on page 15.
Nominating and Corporate Governance
Committee. Our Board of Directors has also
established a Nominating and Corporate Governance Committee,
currently consisting of Messrs. Blutinger, Rensi and
Vittoria, with Mr. Blutinger serving as its chairman.
During 2010, the committee consisted of Messrs. Blutinger,
Churchey and Vittoria, with Mr. Blutinger serving as it
chairman. Our Board of Directors has determined that each of the
Nominating and Corporate Governance Committee members is
independent, as that term is defined by NASDAQ. The Nominating
and Corporate Governance Committee operates under a written
charter adopted by our Board of Directors. A copy of this
charter is available on our Web site under Investor
Relations at greatwolf.com. Among other duties, this
committee:
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identifies, selects, evaluates and recommends to our candidates
for service on our Board of Directors;
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10
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oversees the composition of our Board of Directors and its
committees and makes recommendations to our Board of Directors
for appropriate changes;
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advises and makes recommendations to our Board of Directors on
matters concerning corporate governance; and
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oversees an annual self-evaluation of our Board of Directors.
|
The Nominating and Corporate Governance Committee met two times
in 2010.
The Nominating and Corporate Governance Committee has
established a mandatory director education program, adopted a
policy that our governance practices will meet or exceed those
required by NASDAQ, developed a process for CEO evaluation, and
assisted in self-evaluations of the Board of Directors and each
of its Committees. The Nominating and Corporate Governance
Committee also has instituted an annual review of the charters
of each of the committees of the Board of Directors to ensure
that each reflects best practices.
Other Committees. From time to time, our Board
of Directors may form other committees as circumstances warrant.
Those committees will have such authority and responsibility as
delegated to them by our Board of Directors and consistent with
Delaware law.
Availability of Corporate Governance
Materials. Stockholders may view our corporate
governance materials, including the charters of our Audit
Committee, our Compensation Committee and our Nominating and
Corporate Governance Committee, and our Code of Business Conduct
and Ethics, on our Web site under Investor Relations
at greatwolf.com.
Director
Nominations
Nominating and Corporate Governance
Committee. Our Nominating and Corporate
Governance Committee performs the functions of a nominating
committee. The Nominating and Corporate Governance Committee
Charter describes the committees responsibilities,
including identifying, screening and recommending director
candidates for nomination by our Board of Directors.
Director Candidate Recommendations and Nominations by
Stockholders. The committee will consider
director candidate recommendations by stockholders. Stockholders
should submit any such recommendations for the consideration of
our Nominating and Corporate Governance Committee through the
method described under Communications With Our Board
below. In addition, any stockholder of record entitled to vote
for the election of directors at the applicable meeting of
stockholders may nominate persons for election to the Board of
Directors if such stockholder complies with the notice
procedures summarized in Stockholder Proposals for Our
2012 Proxy Materials or Annual Meeting below.
Process For Identifying and Evaluating Director
Candidates. The Nominating and Corporate
Governance Committee evaluates any candidates
qualifications to serve as a member of the Board of Directors
based on the skills and characteristics of individual Board of
Directors members, the projected long-term oversight, strategic,
financial and industry needs of the company, as well as the
composition of the Board of Directors as a whole. Directors are
also considered in light of their past history and actual
experience creating stockholder value in previous companies. In
addition, the Nominating and Corporate Governance Committee will
evaluate a candidates independence and diversity, age,
skills and experience in the context of the Boards needs.
Communications
with Our Board
Our Board of Directors has approved unanimously a process for
stockholders to send communications to our Board of Directors.
Stockholders can send communications to our Board of Directors
and, if applicable, to the Nominating and Corporate Governance
Committee or to specified individual directors in writing
c/o Great
Wolf Resorts, Inc., 525 Junction Road, Suite 6000 South,
Madison, Wisconsin 53717, Attn: Corporate Secretary. All such
letters will be forwarded to our Board of Directors, the
Nominating and Corporate Governance Committee or any such
specified individual directors.
11
OUR
EXECUTIVE OFFICERS
Ms. Schaefer is an executive officer and director and her
biographical information is set forth under The Election
of Directors. The names, positions, business experience,
terms of office and ages of our other executive officers are as
follows:
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TIMOTHY D. BLACK, age 45 |
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Mr. Black has served as Executive Vice President of
Operations since January 2009. Mr. Black previously served
as our Senior Vice President of Operations since June 2008, and
as our Regional Vice President of Operations from December 2005
through June 2008. From October 2004 through December 2005,
Mr. Black served as the General Manager of our Great Wolf
Lodge resort located in Lake Delton, Wisconsin. Prior to that,
Mr. Black spent eighteen years at Six Flags Theme Park in
various senior management positions, serving most recently as
Vice President and General Manager of Six Flags Great America
from August 2003 through October 2004. |
|
JAMES A. CALDER, age 48 |
|
Mr. Calder has served as our Chief Financial Officer since
we commenced operations in May 2004. From 1997 to 2004,
Mr. Calder served in a number of management positions with
Interstate Hotels & Resorts, Inc., a public company,
and its predecessor company, serving most recently as chief
financial officer. Additionally, from 2001 to 2002,
Mr. Calder served as chief accounting officer of MeriStar
Hospitality Corporation, a public company. Mr. Calder holds
a B.S. degree in Accounting from The Pennsylvania State
University. Mr. Calder is a certified public accountant, is
president and treasurer of the Thomas W. Hetrick Memorial
Scholarship Fund, a private, non-profit organization, and is
treasurer of Harvest Resources Associates, LLC, a private
organization. |
|
ALEXANDER P. LOMBARDO, age 42 |
|
Mr. Lombardo has served as our Treasurer since 2004. From
1998 to 2004, Mr. Lombardo served in a number of positions
with Interstate Hotels & Resorts, Inc., a public
company, and its predecessor company, serving most recently as
vice president of finance. Additionally, from 1998 to 2002,
Mr. Lombardo served in a number of positions with MeriStar
Hospitality Corporation, a public company, serving most recently
as assistant treasurer. From 1996 to 1998, Mr. Lombardo
served as cash manager of ICF Kaiser International, Inc., a
public company. Mr. Lombardo holds a B.B.A. degree from
James Madison University. |
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under federal securities laws, our directors, executive officers
and any persons beneficially owning more than 10% of a
registered class of our equity securities are required to report
their ownership and any changes in that ownership to the SEC.
These persons are also required by SEC rules and regulations to
furnish us with copies of these reports. The SEC has established
due dates for these reports, and we are required to report in
this proxy statement any failure to timely file these reports by
those due dates by our directors and executive officers during
2010.
Based solely upon our review of the reports and amendments to
those reports furnished to us or written representations from
our directors and executive officers that these reports were not
required from those persons, we believe that all of these filing
requirements were satisfied by our directors and executive
officers during 2010.
12
OWNERSHIP
OF OUR COMMON STOCK
We summarize below the beneficial ownership of our common stock,
as of March 11, 2011, except where noted, by (1) each
person or group known by us to beneficially own more than five
percent (5%) of our companys common stock, (2) each
of our directors and nominees for election to the Board of
Directors, (3) each of our named executive officers and
(4) all of our directors and our executive officers as a
group. A person generally beneficially owns shares
if he or she, directly or indirectly, has or shares either the
right to vote those shares or dispose of them. Except as
indicated in the footnotes to this table, to our knowledge the
persons named in the table below have sole voting and investment
power with respect to all shares of common stock beneficially
owned.
The number of shares beneficially owned by each person or group
includes shares of common stock that such person or group had
the right to acquire on or within 60 days after
March 11, 2011, including, but not limited to, upon the
exercise of options or the vesting of restricted stock.
References to options in the footnotes of the table below
include only options to purchase shares that were exercisable on
or within 60 days after March 11, 2011.
For each individual and group included in the table below,
percentage ownership is calculated by dividing (a) the
number of shares beneficially owned by such person or group by
(b) the sum of the shares of common stock outstanding on
March 11, 2011 plus the number of shares of common stock
that such person or group had the right to acquire on or within
60 days after March 11, 2011. Unless otherwise
indicated in the accompanying footnotes, all of the shares of
our common stock listed below are owned directly, and the
indicated person has sole voting and investment power. The
address for each individual listed below is:
c/o Great
Wolf Resorts, Inc., 525 Junction Road, Madison, Wisconsin 53717.
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Name of Beneficial Owner
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Shares Beneficially Owned
|
Officers and Directors
|
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Number
|
|
Percentage
|
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Joseph V. Vittoria
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70,067
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(1)
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*
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Kimberly K. Schaefer
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1,094,043
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(2)
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3.4
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Elan Blutinger
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79,404
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(1)
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*
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Randy L. Churchey
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132,175
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(3)
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*
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Edward H. Rensi
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|
63,353
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(1)
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*
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Howard A. Silver
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72,160
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(1)
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*
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Timothy D. Black
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96,776
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(4)
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*
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James A. Calder
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282,983
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(5)
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*
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Alexander P. Lombardo
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43,258
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(6)
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*
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All directors and executive officers as a group (8 persons)
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1,934,219
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6.0
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Beneficial Holders in Excess of 5%
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Wells Fargo & Company
420 Montgomery Street
San Francisco, CA 94163
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4,475,103
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(7)
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13.8
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%
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Baron Capital Group, Inc.
767 Fifth Avenue, 49th Floor
New York, NY 10153
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3,102,350
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(8)
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9.6
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%
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AllianceBernstein L.P.
1345 Avenue of the Americas
New York, NY 10105
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2,804,092
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(9)
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8.6
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%
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Dimensional Fund Advisors LP
Palisades West, Building One,
6300 Bee Cave Road, Austin, TX 78746
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2,611,817
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(10)
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8.0
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%
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Prescott Group Capital Management, LLC
1924 South Utica, Suite 1120 Tulsa, OK 74104
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2,106,405
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(11)
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6.5
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%
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* |
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Less than one percent of the outstanding shares of common stock. |
13
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(1) |
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Includes 38,824 unvested shares of restricted stock granted
under Great Wolf Resorts 2004 Incentive Stock Plan. |
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(2) |
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Includes (a) 33,009 shares held jointly with
Ms. Schaefers spouse and (b) 363,427 unvested
shares of restricted stock granted under Great Wolf
Resorts 2004 Incentive Stock Plan. |
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(3) |
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Includes 37,084 unvested shares of restricted stock granted
under Great Wolf Resorts 2004 Incentive Stock Plan. |
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(4) |
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Includes 81,561 unvested shares of restricted stock granted
under Great Wolf Resorts 2004 Incentive Stock Plan. |
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(5) |
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Includes 147,251 unvested shares of restricted stock granted
under Great Wolf Resorts 2004 Incentive Stock Plan. In
addition, Great Wolf Resorts deferred compensation plan
holds 11,765 shares to pay obligations owed to
Mr. Calder pursuant to that plan. |
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(6) |
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Includes 28,663 unvested shares of restricted stock granted
under Great Wolf Resorts 2004 Incentive Stock Plan. |
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(7) |
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Based solely upon information provided in a
Schedule 13-G
filed with the SEC on January 20, 2011. Wells
Fargo & Company owns beneficially in the aggregate
4,475,103 shares of common stock, of which it has sole
voting and dispositive power with respect to 3,091,027 and
4,475,103, respectively. |
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(8) |
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Based solely upon information provided in a
Schedule 13-G
filed with the SEC on February 14, 2011. Baron Capital
Group, Inc. (BCG) owns beneficially in the aggregate
3,102,350 shares of common stock, of which it has sole
voting and dispositive power with respect to none of such shares
and shared voting and dispositive power over
3,102,350 shares. BCG is a parent holding company of BAMCO,
Inc. (BAMCO), a registered investment advisor.
Ronald Baron (Baron) owns a controlling interest in
BCG. BAMCO and Baron beneficially own 3,102,350 and 3,102,350,
respectively, shares of common stock, of which they have sole
voting and dispositive power with respect to none of such shares
and shared voting power and dispositive power of
3,102,350 shares. |
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(9) |
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Based solely upon information provided in a
Schedule 13-G
filed with the SEC on February 9, 2011. AllianceBernstein
L.P. owns beneficially in the aggregate 2,804,092 shares of
common stock, of which it has sole voting and dispositive power
with respect to 2,607,622 and 2,686,422, respectively. |
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(10) |
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Based solely upon information provided in a
Schedule 13-G
filed with the SEC on February 11, 2011. Dimensional
Fund Advisors LP owns beneficially in the aggregate
2,611,817 shares of common stock, of which it has sole
voting and dispositive power with respect to 2,565,584 and
2,611,817, respectively. |
|
(11) |
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Based solely upon information provided in a
Schedule 13-G
filed with the SEC on February 14, 2011. Prescott Group
Capital Management, LLC owns beneficially in the aggregate
2,106,405 shares of common stock, of which it has sole
voting and dispositive power with respect to 2,106,405. |
Equity
Compensation Plan Information
This table provides certain information as of December 31,
2010 with respect to our equity compensation plans approved and
not approved by stockholders:
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(c)
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|
|
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Number of Securities
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|
|
|
|
|
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Remaining Available for
|
|
|
(a)
|
|
(b)
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|
Future Issuance Under
|
|
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Number of Securities
|
|
Weighted-Average
|
|
Equity Compensation
|
|
|
to be Issued upon Exercise
|
|
Exercise Price of
|
|
Plans (Excluding
|
|
|
of Outstanding Options,
|
|
Outstanding Options,
|
|
Securities Reflected in
|
Plan Category
|
|
Warrants and Rights
|
|
Warrants and Rights
|
|
Column (a))
|
|
Equity compensation plans approved by security holders
|
|
|
1,493,325
|
(1)
|
|
$
|
19.03
|
|
|
|
973,614
|
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
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N/A
|
|
|
|
|
|
Total
|
|
|
1,493,325
|
|
|
$
|
19.03
|
|
|
|
973,614
|
|
14
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|
|
(1) |
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This amount consists of: |
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36,000 shares of our common stock issuable upon the
exercise of outstanding stock options.
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|
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1,163,379 restricted shares of our common stock that have been
granted but not yet earned as of December 31, 2010. The
number of shares, if any, to be issued pursuant to these grants
will be determined by the grant recipient providing future
services to us over the vesting period of the grant. Since these
awards have no exercise price, they are not included in the
weighted average exercise price calculation in column (b).
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293,946 shares of our common stock issuable pursuant to
outstanding market condition and performance condition share
awards that have been granted but not yet earned as of
December 31, 2010. The number of shares, if any, to be
issued pursuant to these awards will be determined based on
(a) the award recipient achieving certain individual
and/or
performance goals in 2010, as determined by our Compensation
Committee, (b) our common stocks performance in the
three year period
2010-2012
relative to the total return of a relevant stock index, and
(c) our common stocks absolute performance in the
three-year period
2010-2012.
Since these awards have no exercise price, they are not included
in the weighted average exercise price calculation in column (b).
|
Our 2004 Incentive Stock Plan authorizes us to grant up to
3,380,740 incentive
and/or
nonqualified stock options, stock appreciation rights or shares
of our common stock to our employees and directors.
RELATED
PERSON TRANSACTIONS
In accordance with our Code of Business Conduct and Ethics, all
related party transactions known to us are subject to review and
approval of our Audit Committee. Since January 1, 2010, we
have not been a party to, and we have no plans to be a party to,
any transaction or series of similar transactions in which the
amount involved exceeded or will exceed $120,000 and in which
any current director, executive officer, holder of more than 5%
of our capital stock, or any member of the immediate family of
any of the foregoing, had or will have a direct or indirect
material interest.
EXECUTIVE
AND DIRECTOR COMPENSATION
REPORT OF
THE COMPENSATION COMMITTEE
The Compensation Committee, on behalf of and in certain
instances subject to the approval of the Board of Directors,
reviews and approves compensation programs for certain senior
officer positions. In this context, the committee reviewed and
discussed with our companys management the
Compensation Discussion and Analysis included in
this proxy statement. Based on the review and discussions
referred to above, the committee recommended to the Board of
Directors that the Compensation Discussion and
Analysis be included in this proxy statement and
incorporated by reference into the companys Annual Report
on
Form 10-K
for its 2010 fiscal year.
The Compensation Committee
Randy Churchey (Chairman)
Edward Rensi
Joseph Vittoria
COMPENSATION
DISCUSSION AND ANALYSIS
The Compensation Committee oversees our compensation program for
our senior executives, including our Named Executive Officers
(NEOs). The Compensation Committees responsibilities
include:
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Establishing and administering compensation policies,
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|
Setting base salaries and awarding performance-based cash
bonuses,
|
15
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|
Determining grants of awards under our equity award
plan, and
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|
Reviewing the performance and development of senior executives.
|
From time to time, the Compensation Committee may retain
compensation consultants to assist with, among other things:
|
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|
|
Structuring our various compensation programs;
|
|
|
|
Determining appropriate levels of salary, bonus and other awards
payable to our NEOs consistent with our competitive strategy,
corporate governance principles and stockholder
interests; and
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|
Guiding us in the development of near-term individual
performance objectives necessary to achieve long-term
performance goals.
|
We expect to use these compensation consultants only in
circumstances where the consultants have no other business
dealings with us.
Each member of the Compensation Committee is independent as
defined in the Compensation Committees charter, as
determined by the Board of Directors.
General
Compensation Policy/Philosophy
Our general compensation policy is to devise and implement
compensation for our NEOs commensurate with their positions and
determined with reference to compensation paid to similarly
situated employees and officers of companies that the
Compensation Committee, in consultation with our Chief Executive
Officer (CEO) and external compensation consultants, deems to be
comparable to us.
Our general compensation philosophy is to:
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Design and implement a compensation program to attract, retain
and motivate talented executives;
|
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|
Provide incentives for the attainment of short-term operating
objectives and strategic long-term performance goals; and
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|
Place emphasis on, and reward achievement of, long-term
objectives that are consistent with the nature of our company as
an enterprise focused on revenue and cash flow growth, resort
operations and brand expansion/development over the next several
years.
|
Our overall executive compensation philosophy is based on a
pay-for-performance
model. In general, our executive compensation is structured to
reward performance through a combination of competitive base
salaries coupled with cash-based and equity-based incentives.
The at risk components of our executive compensation
(cash annual incentives and stock-based long-term incentives)
are designed to provide incentives that are predicated on our
company
and/or the
NEO meeting or exceeding predefined goals.
Our 2004 Incentive Stock Plan, which is administered by our
Compensation Committee, requires a minimum vesting period of one
year for stock awards made under the plan. As discussed further
in these materials, we have established vesting periods of
three/four years for grants made to our NEOs under our long-term
incentive compensation programs.
The Compensation Committee occasionally requests that our CEO be
present at Compensation Committee meetings where executive
compensation and company, business unit, departmental and
individual performance are discussed and evaluated. Our CEO is
free to provide insight, suggestions or recommendations
regarding executive compensation if present during these
meetings or at other times. Only Compensation Committee members,
however, vote on decisions made regarding executive compensation.
Named
Executive Officers
At December 31, 2010, our NEOs were:
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Kimberly K. Schaefer, Chief Executive Officer (Principal
Executive Officer)
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Timothy D. Black, Executive Vice President of Operations
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|
James A. Calder, Chief Financial Officer (Principal Financial
Officer)
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Alexander P. Lombardo, Treasurer
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J. Michael Schroeder, General Counsel and Corporate Secretary
|
16
Mr. Schroeder resigned from his position as our General
Counsel and Corporate Secretary in January 2011 and terminated
his employment with us on February 23, 2011.
2010
Executive Officer Compensation
For 2010, the Compensation Committee used as a reference tool
the overall compensation structure recommendations for our NEOs
that had been developed for
2010-2012 by
FPL Associates Compensation (FPL), an independent compensation
consultant. In 2009, the Compensation Committee engaged FPL to
assist the Compensation Committee in determining appropriate
fiscal year 2010 compensation for our NEOs, as well as an
appropriate structure for long-term incentive compensation for
the period
2010-2012.
FPL conducted for the Compensation Committee an executive
benchmarking analysis of a competitive peer group of 11 public
companies that compete with us for talent, investment dollars
and/or
business. Based on that analysis and discussions with the
Compensation Committee, FPL made executive compensation
recommendations for our NEOs in a report to the Compensation
Committee, of appropriate levels of:
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Base salary,
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|
|
Annual cash incentives, and
|
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|
Long-term incentive compensation.
|
The structure and amounts of the base salary, annual incentives
and long-term incentives compensation components for all NEOs
for 2010 as detailed in this Compensation Discussion and
Analysis are based on the final recommendations of FPL in its
report.
Competitive
Peer Group
The competitive peer group FPL used in its report included
primarily companies that are focused on operating within the
public hospitality / leisure sectors as the foundation
for our compensation practices. Those peer group companies
include ones that:
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|
Own and operate local / regional / national
family entertainment facilities dependent on discretionary
consumer spending,
|
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|
Own and/or
operate branded hotels or resorts, and/or
|
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|
|
License branded hospitality locations.
|
These companies own
and/or
operate facilities such as theme parks, meeting and convention
resorts, nationally-branded hotels, cruise lines, timeshare
resorts, spas and movie theaters. The peer group consisted of
the following companies:
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|
Cedar Fair, L.P.
|
|
Silverleaf Resorts, Inc.
|
Gaylord Entertainment Company, Inc.
|
|
Six Flags, Inc.
|
LaSalle Hotel Properties, Inc.
|
|
Steiner Leisure Limited
|
The Marcus Corporation
|
|
Strategic Hotels & Resorts, Inc.
|
Red Lion Hotels Corporation
|
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Vail Resorts, Inc.
|
Royal Caribbean Cruises, Ltd.
|
|
|
Executive
Compensation Structure
Utilizing the information in FPLs report and other
benchmarking data, the Compensation Committee approved total
remuneration for executive compensation for the NEOs for 2010
structured as follows:
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|
|
Base salaries at a level commensurate with each executives
role / responsibilities, tenure and other factors,
referenced to median market practices.
|
17
|
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|
|
Short-term incentive compensation consisting of annual cash
incentive bonuses based on specified threshold, target and high
earnings levels, defined as follows:
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|
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|
Threshold performance solid achievement but falls
short of expectations. Would be considered less than meeting a
budget plan. This represents the minimum level of performance
that must be achieved before any bonus will be earned.
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|
Target performance achievement that normally
signifies meeting business objectives. In many situations,
represents budget level performance.
|
|
|
|
High performance significant achievement that would
be considered upper-tier or exceptional performance by industry
standards.
|
|
|
|
|
|
Long-term incentive compensation in the form of restricted stock
grants based on specified threshold, target and high earnings
levels, consisting of:
|
|
|
|
|
|
Annual equity grants with performance metrics and/or
|
|
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|
Multi-year program equity grants with performance metrics
and/or
time-based vesting.
|
For 2010, the Compensation Committee designed annual cash
incentives and long-term incentives for the NEOs that created an
overall compensation program that can provide for superior
compensation when primary company-wide financial goals and
individual performance goals are met or exceeded, and,
conversely, total compensation below competitive levels when
such goals are not met.
For a further discussion on the details of these annual cash
incentives and long-term incentives, see Elements of
Compensation below.
Elements
of Compensation
The compensation for each of our NEOs consists of three
components:
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Base salary,
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Annual cash incentive and
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Long-term incentive compensation.
|
These components provide elements of fixed income and variable
compensation that are linked to the achievement of individual
and corporate goals and the enhancement of value to our
stockholders.
Base
Salary
Base salary represents the fixed annual component of our
executive compensation. Executives receive salaries that are
within a range established by the Compensation Committee for
their respective positions, based on the comparative analysis
described above. Where each executives salary falls within
the salary range is based on a determination of the level of
experience that the executive brings to the position and how
successful the executive has been in achieving set goals. Salary
adjustments are based on a similar evaluation and may include a
comparison of adjustments made by competitors and any necessary
inflationary adjustments.
When reviewing the competitive market data described above, the
Compensation Committee considers that the competitive market is
comprised of professionals with varying backgrounds, experience
and education who may be more junior or senior within the role.
As such, the compensation, particularly as it relates to base
salaries, provided to these incumbents may, appropriately, vary.
In establishing base salary amounts for our NEOs, the
Compensation Committee considers the level of responsibility,
experience, performance and tenure of our companys
incumbents relative to those commonly found in the market
and/or
summarized by FPL in its report.
We generally review the base salaries of our NEOs each fiscal
year. In the event of an NEOs promotion
and/or
increased scope of responsibility, we consider base salary
adjustments at other points during the year as well.
18
The Compensation Committee reviewed the salaries for our NEOs in
December 2009. As part of that review, the Compensation
Committee considered base salary benchmarking data in FPLs
report for individuals with similar levels of responsibility at
the companys peer group companies, and FPLs
recommendation that the company focus relative salary
comparisons against the 25th percentile and median values
of the peer group information. As a result of these reviews,
base salaries established for 2010 and the percentage increase
from prior base salaries are shown below:
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2010 Base
|
|
Increase From
|
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Salary
|
|
Prior Base Salary
|
Name
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|
($)
|
|
(%)
|
|
Ms. Schaefer
|
|
|
550,000
|
|
|
|
10.0
|
|
Mr. Black
|
|
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313,500
|
|
|
|
8.6
|
|
Mr. Calder
|
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385,000
|
|
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|
2.7
|
|
Mr. Lombardo
|
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|
188,700
|
|
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|
2.0
|
|
Mr. Schroeder
|
|
|
273,400
|
|
|
|
2.0
|
|
For 2011, base salaries for all of our NEOs were kept equal to
2010 amounts with the exception of Mr. Lombardos base
salary, which was increased to $200,000.
Annual
Cash Incentive
For our NEOs, annual cash incentives exist in the form of
bonuses as a means of linking compensation to objective
performance criteria that are within the control of the NEOs.
Consistent with the guidelines in FPLs report, at the
beginning of each year, the Compensation Committee establishes a
potential bonus amount range for each executive and identifies
performance targets for each NEO to meet in order to receive the
full bonus. The range incorporates the threshold, target and
high (maximum) performance concepts as described above in
2010 Executive Officer Compensation.
Our annual incentive program utilizes multiple aspects or
dimensions of performance to establish a
line-of-sight
between the individual and the reward. The emphasis on one
dimension versus another depends on the level and type of
position. Three dimensions we consider in the annual incentive
program for our NEOs are:
Corporate overall corporate performance is the
primary dimension for executive and senior management.
Department / Business Unit refers to key
functional areas. This dimension is utilized to link individuals
to the performance of their collective work group and is
intended to foster cooperation.
Individual refers to specific goals and objectives
developed for each individual participant.
The Compensation Committee reviews each executives
position to determine the proportion or percentage of incentive
opportunity that will be attributed to each of the three
dimensions, based on the positions ability to impact
performance at each dimension. The benefit to using this
three-tier construct is in balancing the required level of
objectivity with the desired level of subjectivity. While
corporate and team/unit goals include specific, quantifiable
targets, the individual component can often be based on a more
subjective assessment of performance or on management discretion.
For the NEOs, the Compensation Committee establishes financial
targets at the beginning of each year that are tied to our
annual business plan. The NEOs generally begin to earn a
threshold annual cash incentive award amount once a financial
target is at least 95% attained. The threshold award amount is
generally one-third of the maximum potential award amount for a
particular financial target. The maximum annual cash incentive
award is earned when a financial target is at least 105%
attained. Any potential amount of the annual cash incentive
award in excess of the threshold amount, up to the maximum
potential award amount, is earned ratably from 95% up to 105% of
the financial target attained.
The Compensation Committee employs clearly defined, objective
measures of performance to support the annual cash incentive
awards for our NEOs. Within the annual incentive award component
of the compensation program, performance measures are often
based on operational / financial initiatives as well
as individual / subjective performance, providing a
balance with long-term incentive award components, which are
generally primarily tied to value creation.
19
The Compensation Committee, in consultation with our CEO,
establishes and approves specific, written performance
objectives for annual cash incentives. For each such objective,
actual performance is reviewed by the Compensation Committee
(generally in the first quarter of the fiscal year following the
performance year) in order to determine the actual payment to
occur following release of the performance year fiscal year
financial results. The Compensation Committee has the ability to
apply discretion to increase or decrease the actual payout
resulting from the relative achievement of performance
objectives. Discretion may be applied in the case of significant
business disruption, unusual business events or conditions, or
other factors the Compensation Committee deems relevant.
As part of its report for the Compensation Committee, FPL
recommended a structure for annual cash incentives for our NEOs
that provided for threshold, target and maximum levels of
opportunity, as discussed above. The Compensation Committee
considered annual cash incentive benchmarking data in FPLs
report for individuals with similar levels of responsibility at
the companys peer group companies, including recommended
amounts (expressed as a percentage of each NEOs base
salary) for threshold, target and maximum levels of performance,
and FPLs recommendations for each NEOs annual cash
incentive structure. Based primarily on the recommendations of
FPL in its report, the Compensation Committee established
overall threshold, target and maximum annual incentive
opportunities for our NEOs for 2010, expressed as a percentage
of each executives 2010 base salary, as follows:
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2010 Annual Incentive Opportunity
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
Name
|
|
(%)
|
|
|
($)
|
|
|
(%)
|
|
|
($)
|
|
|
(%)
|
|
|
($)
|
|
|
Ms. Schaefer
|
|
|
50.0
|
|
|
|
275,000
|
|
|
|
100.0
|
|
|
|
550,000
|
|
|
|
150.0
|
|
|
|
825,000
|
|
Mr. Black
|
|
|
33.3
|
|
|
|
104,500
|
|
|
|
66.7
|
|
|
|
209,000
|
|
|
|
100.0
|
|
|
|
313,500
|
|
Mr. Calder
|
|
|
40.0
|
|
|
|
154,000
|
|
|
|
80.0
|
|
|
|
308,000
|
|
|
|
120.0
|
|
|
|
462,000
|
|
Mr. Lombardo
|
|
|
16.7
|
|
|
|
31,513
|
|
|
|
33.3
|
|
|
|
62,837
|
|
|
|
50.0
|
|
|
|
94,350
|
|
Mr. Schroder
|
|
|
16.7
|
|
|
|
45,658
|
|
|
|
33.3
|
|
|
|
91,042
|
|
|
|
50.0
|
|
|
|
136,700
|
|
For 2010, the annual cash incentive amounts awarded to our NEOs
were subject to a number of performance objectives, including:
|
|
|
|
|
Our company achieving certain levels of Adjusted EBITDA for
2010 and
|
|
|
|
The individual achieving certain individual, business unit
and/or
departmental performance goals in 2010, as determined by the
Compensation Committee. Examples of the types of management
performance goals established for 2010 are:
|
|
|
|
|
|
Achieving specified levels of company-wide Adjusted EBITDA.
|
|
|
|
Achieving target levels of RevPAR growth and guest satisfaction
scores for our resorts.
|
|
|
|
Developing a new proprietary, revenue-enhancing amenity for our
resorts.
|
|
|
|
Accessing capital markets to refinance near-term debt maturities
provide working capital for future growth
and/or
address other elements or opportunities in the companys
debt structure.
|
|
|
|
Executing a permanent solution to address companys
guarantees under certain agreements related to the development
of our Blue Harbor Resort & Conference Center in
Sheboygan, Wisconsin.
|
|
|
|
Securing financing for the companys future development
projects.
|
|
|
|
Signing letters of intent for future management
and/or
licensing opportunities.
|
|
|
|
Developing an adaptive re-use model to allow for conversions of
existing, full-service hotels to family entertainment facilities
by using entertainment features currently used in our existing
resorts.
|
|
|
|
Opening a standalone
Scooops®
Kid Spa location.
|
|
|
|
Closing on the purchase of a majority interest in Creative
Kingdoms, LLC, a developer of experiential gaming products.
|
20
|
|
|
|
|
Implementing an investor relations plan to present to potential
new investors and strengthen investor perception of our
companys operations and outlook.
|
|
|
|
Locating potential joint venture partners for the companys
future growth initiatives.
|
The threshold, target and maximum amounts for the financial
measure performance objective (Adjusted EBITDA) for 2010 were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Measure
|
|
Threshold
|
|
Target
|
|
Maximum
|
Performance Objective
|
|
($)
|
|
($)
|
|
($)
|
|
Adjusted EBITDA
|
|
|
63.8 million
|
|
|
|
67.1 million
|
|
|
|
70.5 million
|
|
The relative weightings for the performance objectives were
primarily based on the recommendations of FPL in its report. For
2010, the Compensation Committee, in consultation with our CEO,
reviewed and approved the performance criteria and weighting of
those criteria for each NEO. The weightings of the performance
criteria may vary among the NEOs by position due to functional
accountability, responsibility and other factors the
Compensation Committee deems relevant. For 2010, weightings for
our NEOs and corresponding maximum bonus amounts available for
each bonus measure were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Bonus Performance Objectives
|
|
|
|
|
Individual,
|
|
|
|
|
Business Unit and/or
|
|
|
|
|
Departmental
|
|
|
Adjusted EBITDA
|
|
Performance Goals
|
|
|
|
|
Maximum
|
|
|
|
Maximum
|
|
|
|
|
Bonus
|
|
|
|
Bonus
|
|
|
|
|
Amount
|
|
|
|
Amount
|
|
|
Weighting
|
|
Available
|
|
Weighting
|
|
Available
|
Name
|
|
(%)
|
|
($)
|
|
(%)
|
|
($)
|
|
Ms. Schaefer
|
|
|
50.0
|
|
|
|
412,500
|
|
|
|
50.0
|
|
|
|
412,500
|
|
Mr. Black
|
|
|
75.0
|
|
|
|
235,125
|
|
|
|
25.0
|
|
|
|
78,375
|
|
Mr. Calder
|
|
|
50.0
|
|
|
|
231,000
|
|
|
|
50.0
|
|
|
|
231,000
|
|
Mr. Lombardo
|
|
|
25.0
|
|
|
|
23,588
|
|
|
|
75.0
|
|
|
|
70,762
|
|
Mr. Schroeder
|
|
|
25.0
|
|
|
|
34,175
|
|
|
|
75.0
|
|
|
|
102,525
|
|
For our NEOs, the Compensation Committee reviewed in February
2011 the level of Adjusted EBITDA we had achieved for 2010 and
the success of each of those NEOs in achieving their specified
individual, business unit
and/or
departmental performance goals in 2010 as discussed above. Based
that review:
|
|
|
|
|
We achieved Adjusted EBITDA of $69.0 million.
|
|
|
|
The Compensation Committee determined the
individual/departmental goal achievements as follows:
Ms. Schaefer 55%; Mr. Black
55%; Mr. Calder 50%;
Mr. Lombardo 75%; and
Mr. Schroeder 44%.
|
|
|
|
The Compensation Committee awarded to Mr. Lombardo an
additional discretionary cash bonus amount of $21,000, based
primarily on progress made toward securing debt financing for
certain of our current and future resorts.
|
21
Based on the level of achievement of the various financial and
other factors for 2010 as described above, the NEOs earned the
following amounts for the various performance objectives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Bonus Performance Objective
|
|
Ms. Schaefer
|
|
Mr. Black
|
|
Mr. Calder
|
|
Mr. Lombardo
|
|
Mr. Schroeder
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum Bonus Amount
|
|
$
|
412,500
|
|
|
$
|
235,125
|
|
|
$
|
231,000
|
|
|
$
|
23,588
|
|
|
$
|
34,175
|
|
% earned
|
|
|
84.9
|
%
|
|
|
84.9
|
%
|
|
|
84.9
|
%
|
|
|
84.9
|
%
|
|
|
84.9
|
%
|
Bonus Amount Earned
|
|
$
|
350,213
|
|
|
$
|
199,621
|
|
|
$
|
196,119
|
|
|
$
|
20,026
|
|
|
$
|
29,015
|
|
Individual, Business Unit and/or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Departmental Goals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum Bonus Amount
|
|
$
|
412,500
|
|
|
$
|
78,375
|
|
|
$
|
231,000
|
|
|
$
|
70,762
|
|
|
$
|
102,525
|
|
% earned
|
|
|
55.0
|
%
|
|
|
55.0
|
%
|
|
|
50.0
|
%
|
|
|
75.0
|
%
|
|
|
44.0
|
%
|
Bonus Amount Earned
|
|
$
|
226,875
|
|
|
$
|
43,106
|
|
|
$
|
115,500
|
|
|
$
|
74,072
|
(1)
|
|
$
|
45,593
|
|
Total Bonus Amount Earned
|
|
$
|
577,088
|
|
|
$
|
242,727
|
|
|
$
|
311,619
|
|
|
$
|
94,098
|
|
|
$
|
74,604
|
|
% of Base Salary
|
|
|
104.9
|
%
|
|
|
77.4
|
%
|
|
|
80.9
|
%
|
|
|
49.9
|
%
|
|
|
27.3
|
%
|
|
|
|
(1) |
|
Amount includes additional discretionary cash bonus award amount
of $21,000. |
Shares-in-Lieu-of-Cash
Option for Bonus Payments
For 2010 annual cash incentives bonus amounts to be paid in
2011, as an incentive to increase our NEOs ownership of
our common stock, we offered our NEOs the opportunity to take
some or all of their bonus in shares of our common stock in lieu
of cash. Shares issued under this
shares-in-lieu-of-cash
bonus option are 100% vested when issued. If an executive
elected to receive shares of our common stock in lieu of cash,
he or she received shares having a market value equal to 125% of
the cash they would have otherwise received. For example:
|
|
|
|
|
If an executives cash bonus payment would have been
$10,000 and they elected this
shares-in-lieu-of-cash
option for the entire amount of their bonus, he or she would
receive $12,500 of shares.
|
|
|
|
The dollar value of shares to be received is divided by a
conversion price as determined by the Compensation Committee in
order to determine the number of shares the NEO receives.
|
We believe this 25% conversion premium is an appropriate
incentive to reward executives who choose to receive shares in
lieu of cash. We believe it is also a useful incentive to
encourage share ownership by our NEOs because an NEO is required
to hold any shares acquired through this
shares-in-lieu-of-cash
option for a period of at least one year, provided the
individual remains an NEO of our company. Additionally, our NEOs
are subject to stock ownership guidelines, as discussed below.
The Compensation Committee has established a policy of using the
average closing price for the companys common stock for
the first and second full calendar weeks of January of the
following calendar year (that is, 10 trading days) as the
stock price to use for the conversion of the cash value of each
NEOs bonus to a number of shares to be received.
Mr. Schroeder elected to take all of his earned 2010 cash
bonus in shares of our common stock, in accordance with the
shares-in-lieu-of-cash
provisions explained above. As a result, in February 2011 we
issued to Mr. Schroeder 33,545 shares of common stock
in lieu of a cash bonus for 2010.
Long-Term
Incentive Compensation
For our NEOs, the long-term incentive component of executive
compensation is targeted toward providing rewards for long-term
performance. The Compensation Committee believes that long-term
incentives are important to motivate and reward these executives
for maximizing stockholder value. Long-term incentives are
provided primarily by grants of stock under our 2004 Incentive
Stock Plan, which is administered by the Compensation Committee.
The purpose of our 2004 Incentive Stock Plan is to assist us in
recruiting and retaining key employees, by enabling such persons
to participate in the future success of our company, and to
align their interests with those of our stockholders.
22
The Compensation Committee, in consultation with our CEO,
annually establishes and approves specific, written performance
objectives for long-term incentives. For these objectives, the
Compensation Committee reviews actual performance (generally in
the first quarter of the fiscal year following the performance
year) in order to determine the actual amount of the long-term
incentive grant that has been earned. The Compensation Committee
has the ability to apply discretion to increase or decrease the
actual amount calculated as earned resulting from the relative
achievement of performance objectives. Discretion may be applied
in the case of significant business disruption, unusual business
events or conditions, or other factors the Compensation
Committee deems relevant.
For 2010, the Compensation Committee approved maximum long-term,
stock-based incentive compensation amounts for the NEOs. The
stock-based compensation amounts consisted of shares of our
common stock subject to time-based vesting over
three / four years.
Establishing
2010 Award Amounts
Stock-based compensation for 2010 for our NEOs consisted of
annual equity grant (AEG) amounts
and/or
multi-year program equity grant (MYPEG) amounts. The process in
establishing the number of shares awarded as stock-based
compensation to the NEOs as AEGs and MYPEGs for 2010 involved
six steps, as follows:
|
|
|
|
|
First, as part of its report for the Compensation Committee. FPL
recommended a structure for long-term incentives for our NEOs
that provided for maximum levels of annual opportunity from
stock-based compensation. The Compensation Committee considered
stock-based compensation benchmarking data in FPLs report
for individuals with similar levels of responsibility at the
companys peer group companies, including recommended
amounts (expressed as a percentage of each NEOs base
salary) for maximum levels of performance, and FPLs
recommendations for each NEOs stock-based compensation
structure. Based on the benchmarking data and recommendations by
FPL in its reports, we computed the maximum annual dollar value
of stock-based compensation (the sum of an NEOs AEG amount
and one year of MYPEG amount) as a percentage of each NEOs
January 1, 2010 base salary. Applicable percentages and the
resulting maximum annual dollar value amounts were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Base
|
|
|
|
|
|
|
Salary Used to
|
|
|
|
|
January 1, 2010
|
|
Compute Maximum
|
|
Maximum Annual
|
|
|
Base Salary
|
|
Annual Dollar Value
|
|
Dollar Value
|
Name
|
|
($)
|
|
(%)
|
|
($)
|
|
Ms. Schaefer
|
|
|
550,000
|
|
|
|
225.0
|
%
|
|
|
1,237,500
|
|
Mr. Black
|
|
|
313,500
|
|
|
|
112.5
|
%
|
|
|
352,688
|
|
Mr. Calder
|
|
|
385,000
|
|
|
|
150.0
|
%
|
|
|
577,500
|
|
Mr. Lombardo
|
|
|
188,700
|
|
|
|
75.0
|
%
|
|
|
141,525
|
|
Mr. Schroeder
|
|
|
273,400
|
|
|
|
50.0
|
%
|
|
|
136,700
|
|
|
|
|
|
|
Second, based on recommendations from FPL, for each NEO the
total maximum annual dollar value was split between (a) AEG
amounts and (b) MYPEG amounts. As part of its
recommendations, FPL recommended that, for Ms. Schaefer,
Mr. Black and Mr. Calder, a portion of each NEOs
long-term incentive compensation potential be applied to MYPEGs
to directly tie those NEOs long-term incentive
compensation to multiple-year performance measures. The
Compensation Committee believed this was an appropriate
structure for these three NEOs due to their broad
responsibilities for overseeing our overall performance in
financial, development and operating areas. The applicable split
for each NEO was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AEG Award Maximum Amount
|
|
One Year of MYPEG Award Maximum Amount
|
Name
|
|
(%)
|
|
($)
|
|
(%)
|
|
($)
|
|
Ms. Schaefer
|
|
|
60.0
|
%
|
|
|
742,500
|
|
|
|
40.0
|
%
|
|
|
495,000
|
|
Mr. Black
|
|
|
60.0
|
%
|
|
|
211,613
|
|
|
|
40.0
|
%
|
|
|
141,075
|
|
Mr. Calder
|
|
|
60.0
|
%
|
|
|
346,500
|
|
|
|
40.0
|
%
|
|
|
231,000
|
|
Mr. Lombardo
|
|
|
100.0
|
%
|
|
|
141,525
|
|
|
|
|
|
|
|
|
|
Mr. Schroeder
|
|
|
100.0
|
%
|
|
|
136,700
|
|
|
|
|
|
|
|
|
|
23
|
|
|
|
|
Third, for each NEO, the total maximum dollar value of
stock-based compensation awards amount listed above was then
converted to a maximum number of shares to be awarded by
dividing (a) the maximum dollar value amount by
(b) $2.37, the closing price of our common stock on NASDAQ
on December 31, 2009 (the last trading day in the year
ended December 31, 2009). Based on this conversion, the
maximum number of shares to be awarded to each NEO was as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AEG Award
|
|
MYPEG Award
|
|
Total
|
Name
|
|
(#)
|
|
(#)
|
|
(#)
|
|
Ms. Schaefer
|
|
|
313,291
|
|
|
|
208,861
|
|
|
|
522,152
|
|
Mr. Black
|
|
|
89,288
|
|
|
|
59,525
|
|
|
|
148,813
|
|
Mr. Calder
|
|
|
146,203
|
|
|
|
97,468
|
|
|
|
234,671
|
|
Mr. Lombardo
|
|
|
59,715
|
|
|
|
|
|
|
|
59,715
|
|
Mr. Schroeder
|
|
|
57,679
|
|
|
|
|
|
|
|
57,679
|
|
|
|
|
|
|
Fourth, for each NEO to be awarded AEGs for 2010, we determined
the performance factors that will determine the amount of AEG
shares ultimately earned by each NEO. Those factors were:
|
|
|
|
|
|
A portion of the AEG award amount was earned based on our common
stock performance in calendar year 2010 relative to the Russell
2000 stock index total return in calendar year 2010. Under this
performance criterion, an individual earned:
|
|
|
|
|
|
No award under this performance criterion if our stock
performance for 2010 was less than 80% of the Russell 2000 stock
indexs performance.
|
|
|
|
A portion of his or her total potential award amount if our
stock performance for 2010 was 80% or greater than the
performance of the Russell 2000 stock index;
|
|
|
|
Less than the full portion amount of his or her award amount if
our stock performance for 2010 was less than 120% of the Russell
2000 stock indexs performance; and
|
|
|
|
|
|
A portion of the award amount was earned based on the individual
achieving certain individual, business unit
and/or
departmental performance goals in 2010, as determined by the
Compensation Committee. These performance goals were similar to
those described above under Annual Cash Incentive.
|
The relative weightings for the performance factors were
determined by the Compensation Committee primarily based on the
recommendations of FPL in its report. Weightings for the
performance factors for our NEOs for the 2010 AEG awards were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AEG Award Factor
|
|
|
|
|
Individual,
|
|
|
|
|
Business Unit and/or
|
|
|
Relative Common
|
|
Departmental
|
|
|
Stock Performance
|
|
Performance Goals
|
|
|
|
|
Maximum
|
|
|
|
Maximum
|
|
|
|
|
Share
|
|
|
|
Share
|
|
|
Weighting
|
|
Award
|
|
Weighting
|
|
Award
|
Name
|
|
(%)
|
|
(#)
|
|
(%)
|
|
(#)
|
|
Ms. Schaefer
|
|
|
75.0
|
|
|
|
234,968
|
|
|
|
25.0
|
|
|
|
78,323
|
|
Mr. Black
|
|
|
75.0
|
|
|
|
66,966
|
|
|
|
25.0
|
|
|
|
22,322
|
|
Mr. Calder
|
|
|
75.0
|
|
|
|
109,652
|
|
|
|
25.0
|
|
|
|
36,551
|
|
Mr. Lombardo
|
|
|
75.0
|
|
|
|
44,786
|
|
|
|
25.0
|
|
|
|
14,929
|
|
Mr. Schroeder
|
|
|
75.0
|
|
|
|
43,259
|
|
|
|
25.0
|
|
|
|
14,420
|
|
|
|
|
|
|
Fifth, for each NEO to be awarded MYPEGs in 2010, we determined
the performance factors that will determine the amount of MYPEG
ultimately earned by each NEO. Those factors are:
|
|
|
|
|
|
A portion of the award amount may be earned based on our common
stocks performance in the three-year period
2010-2012
relative to the total return of a relevant stock index, as
designated by the Compensation
|
24
|
|
|
|
|
Committee, for the three-year period
2010-2012.
Under this performance criterion, an individual earns no award
if our stock performance for the three-year period 2010-2012 is
80% or less of the designated indexs performance. The
individual will earn less than the full portion amount of his or
her award amount if our stock performance for the three-year
period
2010-2012 is
less than 120% of the designated indexs performance. For
stock performance between 80% and 120% of the designated
indexs performance, an NEO earns shares based on a linear
interpolation between the threshold amount (earned at 80%
relative stock performance) and maximum amount (earned at 120%
relative stock performance).
|
|
|
|
|
|
A portion of the award amount may be earned based on our common
stocks absolute performance in the three-year period
2010-2012.
Under this performance criterion, an individual may earn a
portion of his or her total potential award amount if our stock
performance for the three-year period
2010-2012
exceeds a threshold compounded annual return for the three-year
period
2010-2012.
The individual will earn less than the full portion amount of
his or her award amount if our stock performance for the
three-year period
2010-2012 is
less than a maximum compounded annual return, and will earn no
award under this performance criterion if our stock performance
for the three-year period
2010-2012 is
less than the threshold compounded annual return. For stock
performance between the threshold compounded annual return and
the maximum compounded annual return, an NEO earns shares based
on a linear interpolation between the threshold amount and
maximum amount.
|
|
|
|
A portion of the award amount is time-based (that is, award
amounts may be earned based on continuous employment with us
over the vesting period).
|
The relative weightings for the performance factors were
determined by the Compensation Committee primarily based on the
recommendations of FPL in its report. Weightings for the
performance factors for our NEOs for the 2010 MYPEG awards were
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MYPEG Award Factor
|
|
|
Relative Common
|
|
Absolute Common
|
|
|
|
|
Stock Performance
|
|
Stock Performance
|
|
Time-Based
|
|
|
|
|
Maximum
|
|
|
|
Maximum
|
|
|
|
Maximum
|
|
|
|
|
Share
|
|
|
|
Share
|
|
|
|
Share
|
|
|
Weighting
|
|
Award
|
|
Weighting
|
|
Award
|
|
Weighting
|
|
Award
|
Name
|
|
(%)
|
|
(#)
|
|
(%)
|
|
(#)
|
|
(%)
|
|
(#)
|
|
Ms. Schaefer
|
|
|
37.5
|
|
|
|
78,323
|
|
|
|
37.5
|
|
|
|
78,323
|
|
|
|
25.0
|
|
|
|
52,215
|
|
Mr. Black
|
|
|
37.5
|
|
|
|
22,322
|
|
|
|
37.5
|
|
|
|
22,322
|
|
|
|
25.0
|
|
|
|
14,881
|
|
Mr. Calder
|
|
|
37.5
|
|
|
|
36,551
|
|
|
|
37.5
|
|
|
|
36,551
|
|
|
|
25.0
|
|
|
|
24,367
|
|
|
|
|
|
|
Sixth, in addition to issuing the time-based MYPEG shares for
the 2010 performance period as described above the Compensation
Committee also elected to issue the time-based number of MYPEG
shares for the full
2011-2012
performance period. This resulted in the issuance of additional
time-based shares as follows: Ms. Schaefer
104,431 shares; Mr. Black
29,763 shares; and Mr. Calder
48,734 shares.
|
Note that the number of shares NEOs eventually earn under MYPEG
awards made in 2010 will only be determined at the end of the
2010-2012
performance period. Any shares earned under the MYPEG awards
will vest 50% on December 31, 2012 and 50% on
December 31, 2013.
25
The vesting of awards under the 2010 AEGs and MYPEGs are
affected by certain termination events as summarized in the
charts below:
|
|
|
|
|
|
|
Termination Scenario
|
|
|
Termination Without
|
|
|
|
|
Cause (by Company),
|
|
|
|
|
Termination For Good
|
|
|
|
|
Reason (by Executive),
|
|
|
Type of AEG Shares Granted
|
|
Death or Disability
|
|
Change in Control
|
|
Relative Common Stock Performance Shares
|
|
Participants would be entitled to a pro-rated amount of award,
based upon the performance up until the time of the triggering
termination event.
|
|
Participants would be entitled to the greater of (a) shares at a
Target level of performance or (b) shares based upon the
performance up until the time of the termination triggering
event.
|
Individual / Departmental Performance Goal Shares
|
|
All shares are forfeited.
|
|
|
|
|
|
|
|
|
|
Termination Scenario
|
|
|
Termination Without
|
|
|
|
|
Cause (by Company),
|
|
|
|
|
Termination For Good
|
|
|
|
|
Reason (by Executive),
|
|
|
Type of MYPEG Shares Granted
|
|
Death or Disability
|
|
Change in Control
|
|
Relative Common Stock Performance Shares
|
|
From the program start (1/01/10) until 24 months
(12/31/11), participants would be entitled to a pro-rated amount
of awards, based upon the performance up until the time of the
triggering termination event.
|
Absolute Common Stock Performance Shares
|
|
If more than 24 months of the program has elapsed, the
performance achievements would be assessed, projected out for
the balance of the plan, and the corresponding number of awards
would be awarded (deemed earned) had the program
lasted the full 36 months.
|
Time-Based Shares
|
|
|
|
|
|
|
All shares granted vest immediately.
|
Determining
Amounts of 2010 AEG Awards Earned
For the 2010 AEG award factors, based on our common stocks
actual performance and the Compensation Committees
assessment of each individuals achievement of
individual/departmental performance goals:
|
|
|
|
|
Our common stock price increased 10.1% in 2010 and the Russell
2000 stock index increased 25.3%. Therefore, our common
stocks performance was not at least 80% of the Russell
2000s performance. As a result, none of the potential
payout for that award factor was earned (that is, the NEOs
earned no shares for 2010 under the relative common stock
performance factor).
|
|
|
|
The Compensation Committee determined the individual, business
unit and departmental goal achievements as follows:
Ms. Schaefer 65%, Mr. Black
70%, Mr. Calder 50%,
Mr. Lombardo 77% and
Mr. Schroeder 0%.
|
26
Based on the level of achievement of the various award factors
for 2010 as described above, our NEOs earned the following
number of shares under the AEGs for 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AEG Award Factor
|
|
Ms. Schaefer
|
|
|
Mr. Black
|
|
|
Mr. Calder
|
|
|
Mr. Lombardo
|
|
|
Mr. Schroeder
|
|
|
Relative Common Stock Performance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum # of Shares
|
|
|
234,968
|
|
|
|
66,966
|
|
|
|
109,652
|
|
|
|
44,786
|
|
|
|
43,259
|
|
% earned
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Number of Shares Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual, Business Unit and/or Departmental Goals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum # of Shares
|
|
|
78,323
|
|
|
|
22,322
|
|
|
|
36,551
|
|
|
|
14,929
|
|
|
|
14,420
|
|
% earned
|
|
|
65.0
|
%
|
|
|
70.0
|
%
|
|
|
50.0
|
%
|
|
|
77.0
|
%
|
|
|
0.0
|
%
|
Number of Shares Earned
|
|
|
50,910
|
|
|
|
15,625
|
|
|
|
18,275
|
|
|
|
11,495
|
|
|
|
|
|
Total Number of Shares Earned
|
|
|
50,910
|
|
|
|
15,625
|
|
|
|
18,275
|
|
|
|
11,495
|
|
|
|
|
|
In February 2011, we issued the shares of our common stock as
long-term incentives earned for 2010 under the AEGs as described
above. Those shares earned under the 2010 AEG awards vest as
follows: 1/3 on issuance; 1/3 on December 31, 2011; and 1/3
on December 31, 2012.
The following table summarizes the future vesting of AEG award
shares issued related to 2010, as described above:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Vesting (#)
|
Vesting Date
|
|
Ms. Schaefer
|
|
Mr. Black
|
|
Mr. Calder
|
|
Mr. Lombardo
|
|
Mr. Schroeder
|
|
2/25/11
|
|
|
16,970
|
|
|
|
5,208
|
|
|
|
6,092
|
|
|
|
3,832
|
|
|
|
|
|
12/31/11
|
|
|
16,970
|
|
|
|
5,209
|
|
|
|
6,091
|
|
|
|
3,831
|
|
|
|
|
|
12/31/12
|
|
|
16,970
|
|
|
|
5,208
|
|
|
|
6,092
|
|
|
|
3,832
|
|
|
|
|
|
Grant
Valuation Parameters
As described above, when awarding stock to our NEOs in 2010, we
first established a dollar value of the maximum equity-based
compensation potential that we want to provide to the employee
in the form of stock over the vesting period. On the date of the
grant, in order to calculate the number of shares to grant, we
divide the total maximum equity-based compensation potential by
the per share fair value of our common stock as of the close of
the prior fiscal year. Although we use what we consider to be a
reasonable approach in determining the number of shares of
common stock to award to these NEOs, the ultimate value to these
NEOs of the shares awarded only becomes clear when
(a) performance conditions related to earning the award are
met or not met and (b) the future fair value of the shares
earned is known.
The shares of stock we award under long-term incentive plans
ultimately may be worth much more or less than the target
equity-based compensation potential we computed when the shares
were awarded, depending on whether the price of our common stock
increases or decreases from the per share fair value we used
when shares were granted. As a result, we do not consider
realizable gains or losses from prior stock grants when setting
new stock grant amounts. We do not believe it is a fair practice
to offset or enhance current compensation by realized and
unrealized gains or losses in periods after the grants have been
issued. Our goal is that the ultimate value realized by the NEO
from stock grants exceeds our initial estimate of total maximum
equity-based compensation potential that we awarded, because
that would result from an increase in our stock price. Value
realized by an NEO in excess of the award date total maximum
equity-based compensation potential would also be realized by
all of our other stockholders that held our common stock over
that time period. We believe that limiting potential upside on
stock value gains would undermine incentives for our NEOs when
they focus on long-term results.
Stock
Ownership Guidelines for NEOs and Directors
We believe that stock ownership by our NEOs and our directors is
desirable for aligning managements and directors
long-term interests with those of our stockholders. Accordingly,
on March 22, 2011 our Board of
27
Directors adopted a stock ownership policy for our NEOs and
non-employee directors in order to encourage them to focus on
creating long-term shareholder value.
For NEOs, the policy sets stock ownership targets as a multiple
of base salary, as follows:
|
|
|
Position
|
|
Multiple
|
|
Chief Executive Officer
|
|
5x Base Salary
|
Chief Financial Officer
|
|
3x Base Salary
|
Executive Vice President
|
|
2x Base Salary
|
For non-employee directors, the stock ownership target is the
greater of three times their annual retainer fees (exclusive of
fees for committee service) or $180,000.
For current NEOs and outside directors, the targets are to be
achieved by March 22, 2016 (five years from the adoption of
the requirement). For NEOs or outside directors who join the
company in the future, those individuals would have five years
from the start of their service as an NEO or director to meet
the stock ownership guidelines. As of March 22, 2011, our
CEO, CFO and all non-employee directors have exceeded their
stock ownership guideline targets as shown above.
The stock ownership policy also requires the chief executive
officer, the chief financial officer, executive vice presidents
and the board of directors:
|
|
|
|
|
to retain the after-tax amount of our shares acquired on the
vesting of stock awards for one year after vesting, and
|
|
|
|
to retain 60% of that amount so long as they remain an officer
or director.
|
Shares that are either owned directly (including restricted
shares of common stock, whether vested or not) or indirectly
through savings plans sponsored by us are included in
determining whether an individual attains the minimum ownership
guidelines.
For purposes of evaluating compliance with the policy, shares
for an individual are valued by using the higher of (a) the
closing price of our common stock on the date shares are
acquired / granted / certificated or
(b) the
10-day
average closing price of our common stock before the measurement
date. For an individual who does not meet the stock ownership
target by their required date, any restricted stock, stock
rights or similar equity-based awards granted to a participant
while he or she is not in compliance with these guidelines will
vest over five rather than three or four years, or such longer
period as the Compensation Committee determines, in its
discretion.
2010
Stock Option Cancellations
In 2010, we entered into stock option cancellation agreements
with certain of our employees, including each NEO, pursuant to
which these individuals surrendered and cancelled certain
previously granted stock options to purchase shares of our
common stock in order to make additional shares available under
our 2004 Incentive Stock Plan for future equity grants to our
personnel. Pursuant to the terms of the cancellation agreements,
we and each of these individuals acknowledged and agreed that
the surrender and cancellation of the cancelled options was
without any expectation to receive, and was without any
obligation on our part to pay or grant, any cash, equity awards
or other consideration presently or in the future in regard to
the cancellation of the cancelled options.
The cancelled options that were surrendered had an exercise
price of $17.00 per share, which was significantly higher than
the trading range for our common stock over the past three
years. The aggregate number of shares underlying the cancelled
options held by each of our NEOs surrendering the cancelled
options was as follows:
|
|
|
|
|
|
|
Shares Underlying Cancelled
|
|
|
Options
|
Name
|
|
(#)
|
|
Ms. Schaefer
|
|
|
100,000
|
|
Mr. Black
|
|
|
1,000
|
|
Mr. Calder
|
|
|
100,000
|
|
Mr. Lombardo
|
|
|
40,000
|
|
Mr. Schroeder
|
|
|
75,000
|
|
28
Based on the current compensation structure for our NEOs as
described herein, we do not expect to use stock options as a
component of compensation for our NEOs in future years.
Other
Compensation
We offer certain other perquisites and personal benefits to our
NEOs. These perquisites and personal benefits are reflected in
the relevant tables and narratives that follow. In addition, the
executives may participate in company-wide plans and programs
such as our 401(k) plan (including a company match); group
health and welfare plans; group accidental death and
dismemberment insurance and life insurance; and health care and
dependent care spending accounts, in accordance with the terms
of those programs.
We do not provide our NEOs defined benefit or supplemental
executive retirement plans.
Clawback
Provision
In line with corporate governance best practices, in March 2011
the Compensation Committee adopted a clawback policy
that allows us to seek repayment of incentive compensation that
was erroneously paid. The policy provides that if the Board
determines that there has been a material restatement of
publicly issued financial results from those previously issued
to the public, the Board will review all bonus payments made to
executive officers during the three-year period prior to the
restatement on the basis of having met or exceeded specific
performance targets. If such payments would have been lower had
they been calculated based on such restated results, the Board
will (to the extent permitted by governing law) seek to recoup
the payments in excess of the amount that would have been paid
based on the restated results. The clawback provision applies to
bonus payments earned commencing fiscal 2011.
Nonqualified
Deferred Compensation Plan
In addition to a qualified 401(k) plan, we maintain a deferred
compensation plan for certain executives (including our NEOs) by
depositing amounts into a grantor trust for the benefit of the
participating employees. The amounts held in the trust remain
subject to the claims of our general creditors until the amounts
are paid to participants. The deferred compensation plan offers
these participants the opportunity to defer payment and income
taxation of a portion of their base salary
and/or
annual cash incentives in addition to the amounts deposited in
our 401(k) plan. The Compensation Committee believes that
offering this plan to executives is helpful to achieve our
objectives of attracting and retaining talent, particularly
because we do not offer a defined benefit pension plan.
A participant may elect to defer up to 100% of annual base
salary
and/or
annual cash incentives. Participants must make deferral
elections before the beginning of the plan year in which the
related compensation is earned. Such elections are irrevocable
for the entire plan year, and the participants may only change
the elections for compensation earned in subsequent plan years
during later annual election periods.
We make the following employer contributions to our deferred
compensation plan:
|
|
|
|
|
Mandatory annual matching contributions to the plan for each
participant equal to the lesser of (a) 4% of the
participants annual base salary or (b) the
participants annual deferrals to the plan. Matching
contributions are reduced by the maximum amount of matching
contributions the executive was eligible to receive in our
401(k) plan for the fiscal year.
|
|
|
|
Discretionary annual profit-sharing contributions equal to up to
6% of the participants annual base salary.
|
Matching and profit-sharing contributions vest based on a
participants years of service with us, with pro-rata
vesting over a period of five years of service.
Amounts in the deferred compensation plans trust earn
investment income, which serves to increase our corresponding
deferred compensation obligation. Investments, which are
recorded at market value, are directed by the participants, and
consist of our common stock and mutual funds. The plan provides
participants the opportunity for long-term capital appreciation
by crediting their accounts with notional earnings (or losses)
based on the performance of benchmark investment funds from
which participants may select or our common stock. Currently,
29
the plan offers a choice of ten benchmark investment funds that
are identified in the narrative following the Nonqualified
Deferred Compensation table below.
The market value of an NEOs deferred compensation account
is not considered when setting their other current compensation.
The compensation earned and deferred into the deferred
compensation plan was already reviewed and analyzed based on the
above-described compensation philosophy and policies at the time
the compensation was awarded. Had the executive officer instead
elected to receive a payout of the compensation earned (rather
than deferring it into the plan), and then invested those
amounts externally, we would not have considered external
investment experience when considering the amount by which we
should compensate the NEO. Thus, in setting current compensation
amounts for our NEOs, we do not believe it is either proper or
necessary to consider the value of the NEOs deferred
compensation account just because it is held in a plan we
sponsor. See the Nonqualified Deferred Compensation table and
accompanying narrative below for additional information on our
deferred compensation plan.
Tax
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code generally
limits the deductibility on our tax return of compensation over
$1 million to any of our officers unless the compensation
is paid pursuant to a plan that is performance-related,
non-discriminatory and has been approved by our stockholders.
The Compensation Committees policy with respect to
Section 162(m) is to make every reasonable effort to ensure
that compensation is deductible to the extent permitted. The
Compensation Committee has the authority, however, to award
compensation in excess of the $1 million limit, regardless
of whether that compensation will be deductible, if the
Compensation Committee determines in good faith that the
compensation is appropriate to incentivize and compensate the
recipient.
Employment
Agreements
We have entered into employment agreements with
Ms. Schaefer and Messrs. Black, Calder and Schroeder.
The following table summarizes the significant terms of those
employment contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment Contract Item
|
|
Mr. Black
|
|
Mr. Calder
|
|
|
Ms. Schaefer
|
|
|
Mr. Schroeder
|
|
|
Date entered into
|
|
12/16/09
|
|
|
12/20/10
|
|
|
|
12/20/10
|
|
|
|
12/20/10
|
|
(or most recent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
date of renewal)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract ending date
|
|
12/16/12
|
|
|
12/20/11
|
|
|
|
12/20/11
|
|
|
|
12/20/11
|
|
Filing of agreement
|
|
Agreement filed as an exhibit to the companys Form 10-K/A
for the year ended December 31, 2010, filed with the SEC on
3/8/11.
|
Annual bonus
|
|
Eligibility based on criteria determined by Compensation
Committee.
|
The following provisions apply to all NEO employment contracts:
|
|
|
Base salary
|
|
Subject to annual review and periodic increases, if any, as
determined by the Compensation Committee.
|
Benefit plan eligibility
|
|
Eligible to participate in our benefit plans at identical
participation costs offered to all of our other employees.
|
Business expense reimbursement
|
|
Eligible to have business expenses reimbursed, subject to
reimbursement policies for all other employees.
|
Severance payments
|
|
Due under various termination scenarios.
|
Covenants not to compete
|
|
NEO subject to covenants not to compete with us subsequent to
employment with us.
|
30
In addition, the following employment agreement provision
applies to Ms. Schaefer and Messrs. Calder and
Schroeder:
|
|
|
Extension provisions
|
|
One-year extension at ending date, unless either we or the NEO
provides at least 120 days notice of non-renewal
|
See Potential Payment Upon Termination or Change of
Control below for a discussion of certain severance
payments applicable under these agreements.
Change of
Control and Severance Payments
Change of control provisions applicable to our NEOs are either
single trigger, meaning that the change of control
event alone triggers either a payment or an acceleration of
certain rights, or double trigger, meaning that the
change of control coupled with either (a) the
officers termination from service or (b) the
officers resignation for good reason (as that
term is defined in the employment agreement) within a certain
period of the time before or after the change of control,
triggers the payment or accelerated right.
The change of control provision in each NEOs employment
agreement for the payment of severance is a double trigger. A
double trigger for severance payments was selected because,
generally unless the NEOs employment is terminated after
the change of control, his or her cash compensation in the form
of salary and annual bonus would continue from the acquiring
entity and a severance payment would be based upon and intended
to replace such salary and annual bonus amounts. See the
Potential Payment Upon Termination or Change of
Control discussion below for additional information on
these severance payments. The payment amounts reflect our belief
that it is difficult for senior managers to find comparable
employment opportunities in a short period of time, particularly
after experiencing a termination that was beyond their control.
The change of control provisions in our stock option and stock
grant agreements with time-based vesting are single trigger,
reflecting our intent that the NEOs have the ability to use
those shares to vote upon any proposed transaction.
Under each existing employment agreement, we have agreed to make
an additional tax
gross-up
payment to the executive if any amounts paid or payable to the
executive would be subject to the excise tax imposed on certain
so-called excess parachute payments under
Section 4999 of the Internal Revenue Code. However, if a
reduction in the payments and benefits of $25,000 or less would
render the excise tax inapplicable, then the payments and
benefits will be reduced by such amount, and we will not be
required to make the
gross-up
payment. For any future employment agreements entered into with
new NEOs, we have made a commitment not to provide excise tax
gross-up
payments upon a change in control.
31
EXECUTIVE
COMPENSATION TABLES AND DISCUSSION
Summary
Compensation Table for 2010
The following Summary Compensation Table shows the compensation
in 2010, 2009 and 2008 for our Chief Executive Officer
(Principal Executive Officer), our Chief Financial Officer
(Principal Financial Officer), and our other three most highly
compensated executive officers as of December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
Incentive Plan
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Stock Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
|
|
|
|
|
(1)
|
|
(2)(3)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Kimberly K. Schaefer
|
|
|
2010
|
|
|
|
550,000
|
|
|
|
1,309,658
|
|
|
|
|
|
|
|
577,088
|
|
|
|
52,856
|
|
|
|
2,489,602
|
|
Chief Executive Officer
|
|
|
2009
|
|
|
|
519,231
|
|
|
|
668,415
|
|
|
|
|
|
|
|
558,300
|
|
|
|
33,669
|
|
|
|
1,779,615
|
|
|
|
|
2008
|
|
|
|
375,000
|
|
|
|
507,811
|
|
|
|
|
|
|
|
344,756
|
|
|
|
32,673
|
|
|
|
1,260,240
|
|
James A. Calder
|
|
|
2010
|
|
|
|
385,000
|
|
|
|
593,735
|
|
|
|
|
|
|
|
311,619
|
|
|
|
38,942
|
|
|
|
1,329,296
|
|
Chief Financial Officer
|
|
|
2009
|
|
|
|
389,423
|
|
|
|
239,639
|
|
|
|
|
|
|
|
337,163
|
|
|
|
25,977
|
|
|
|
992,202
|
|
|
|
|
2008
|
|
|
|
300,000
|
|
|
|
391,556
|
|
|
|
|
|
|
|
275,805
|
|
|
|
28,600
|
|
|
|
995,961
|
|
Timothy D. Black(7)
|
|
|
2010
|
|
|
|
313,500
|
|
|
|
376,798
|
|
|
|
|
|
|
|
242,727
|
|
|
|
32,258
|
|
|
|
965,283
|
|
Executive Vice President of Operations
|
|
|
2009
|
|
|
|
299,387
|
|
|
|
60,750
|
|
|
|
|
|
|
|
213,750
|
|
|
|
20,058
|
|
|
|
593,945
|
|
Alexander P. Lombardo
|
|
|
2010
|
|
|
|
188,700
|
|
|
|
109,199
|
|
|
|
|
|
|
|
94,098
|
|
|
|
22,015
|
|
|
|
414,012
|
|
Treasurer
|
|
|
2009
|
|
|
|
192,115
|
|
|
|
48,600
|
|
|
|
|
|
|
|
92,500
|
|
|
|
14,138
|
|
|
|
347,353
|
|
|
|
|
2008
|
|
|
|
182,308
|
|
|
|
33,550
|
|
|
|
|
|
|
|
75,000
|
|
|
|
17,166
|
|
|
|
308,024
|
|
J. Michael Schroeder(8)
|
|
|
2010
|
|
|
|
273,400
|
|
|
|
88,748
|
|
|
|
|
|
|
|
74,604
|
|
|
|
27,195
|
|
|
|
463,947
|
|
General Counsel and
|
|
|
2009
|
|
|
|
278,307
|
|
|
|
24,300
|
|
|
|
|
|
|
|
80,000
|
|
|
|
22,612
|
|
|
|
405,519
|
|
Corporate Secretary
|
|
|
2008
|
|
|
|
268,000
|
|
|
|
33,550
|
|
|
|
|
|
|
|
52,000
|
|
|
|
25,100
|
|
|
|
378,650
|
|
|
|
|
(1) |
|
Salary amounts for 2009 reflect payment of 27 bi-weekly payroll
periods during calendar 2009. |
|
(2) |
|
Stock Award amounts reported in the table above for 2010 consist
of the following items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Award Component
|
|
Ms. Schaefer
|
|
|
Mr. Calder
|
|
|
Mr. Black
|
|
|
Mr. Lombardo
|
|
|
Mr. Schroeder
|
|
|
|
|
|
Annual Equity Grant Relative Common Stock
Performance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value on grant date ($)
|
|
|
381,120
|
|
|
|
177,855
|
|
|
|
108,619
|
|
|
|
72,645
|
|
|
|
70,097
|
|
|
|
|
|
Shares granted (#)
|
|
|
156,646
|
|
|
|
73,101
|
|
|
|
44,644
|
|
|
|
29,858
|
|
|
|
28,811
|
|
|
|
|
|
Annual Equity Grant Performance Goals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value on grant date ($)
|
|
|
161,894
|
|
|
|
58,115
|
|
|
|
49,688
|
|
|
|
36,554
|
|
|
|
|
|
|
|
|
|
Shares granted (#)
|
|
|
50,910
|
|
|
|
18,275
|
|
|
|
15,625
|
|
|
|
11,495
|
|
|
|
|
|
|
|
|
|
Multiple Year Grant Absolute Common Stock
Performance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value on grant date ($)
|
|
|
132,287
|
|
|
|
61,734
|
|
|
|
37,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares granted (#)
|
|
|
52,215
|
|
|
|
24,367
|
|
|
|
14,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multiple Year Grant Relative Common Stock
Performance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value on grant date ($)
|
|
|
136,224
|
|
|
|
63,571
|
|
|
|
38,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares granted (#)
|
|
|
52,215
|
|
|
|
24,367
|
|
|
|
14,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multiple Year Grant Time-Based:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value on grant date ($)
|
|
|
498,133
|
|
|
|
232,460
|
|
|
|
141,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares granted (#)
|
|
|
156,646
|
|
|
|
73,101
|
|
|
|
44,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incremental value for electing to receive stock in lieu of cash
bonus (see Note (4) below):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value on grant date ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,651
|
|
|
|
|
|
Shares granted (#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,709
|
|
|
|
|
|
Totals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value on grant date ($)
|
|
|
1,309,658
|
|
|
|
593,735
|
|
|
|
376,798
|
|
|
|
109,199
|
|
|
|
88,748
|
|
|
|
|
|
Shares granted (#)
|
|
|
468,632
|
|
|
|
213,211
|
|
|
|
134,675
|
|
|
|
41,353
|
|
|
|
35,520
|
|
|
|
|
|
|
|
|
|
|
The fair value amounts presented for the performance goals
shares above reflect the Companys estimate of the probable
outcome of the performance conditions as of the grant date. |
32
|
|
|
|
|
Under generally accepted accounting principles, the fair value
amounts of our grants of stock awards are determined at their
grant dates. That fair value amount as of the grant date is then
expensed ratably over the vesting period of the stock awards.
The amounts reflected in the table above, however, represent the
full value of each entire grant as of the grant date, even
though the expense for financial reporting purposes will be
recorded ratably over the vesting period. |
|
|
|
For stock awards subject to a market condition (for example,
having our common stocks total return meet certain levels
relative to a market index or designated absolute performance
levels), the amount we record as expense on our financial
statements (and which is included as a portion of Stock Awards
in the table above) is based on the value assigned to the stock
award at its grant date; that value is then recorded as expense
regardless of whether each of the stock awards has any intrinsic
value to the executive (that is, whether or not the executive
actually earns any portion of the award based on the actual
performance of our common stock in relation to the relevant
market condition). |
|
(3) |
|
The value reported for Stock Awards and Option Awards for each
executive is the aggregate grant date fair value for such
awards. The assumptions for making the valuation determinations
are set forth in the footnote or footnote sections to our
financial statements captioned Stock Based
Compensation or Share-Based Compensation in
our consolidated financial statements. For additional
information on these awards, see the Grants of Plan-Based Awards
table, below. |
|
(4) |
|
This column includes amounts earned under our annual cash
incentives bonus plan for 2010, 2009 and 2008, as discussed in
the Compensation Discussion and Analysis above. For 2010, 2009
and 2008 annual cash incentives bonus amounts, we offered our
NEOs the opportunity to take some or their entire bonus in
shares of our companys common stock in lieu of cash. If an
executive elected to receive shares, they received shares having
a market value equal to 125% of the cash they would have
otherwise received. Amounts shown in this column represent the
cash bonus that each executive earned, regardless of whether the
executive elected to take all or part of their cash bonus in the
form of shares of our common stock; any incremental value as a
result of an executive taking all or part of their bonus in the
form of shares is included in the Stock Awards column (see Note
(2) above). |
|
(5) |
|
All Other Compensation consists of our contributions to
executives accounts in our qualified 401(k) plan and our
non-tax qualified deferred compensation plan, contributions to
long-term care and disability insurance premiums, and separation
payments to certain executives. Pursuant to SEC rules,
perquisites and personal benefits are not reported for any
executive officer for whom such amounts were less than $10,000
in aggregate for the fiscal year. Our contributions to the
deferred compensation plan are also reported in the Nonqualified
Deferred Compensation table below. |
The following table details the components of each
executives All Other Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
Company
|
|
|
|
|
|
|
Company
|
|
Contributions to
|
|
Contributions to
|
|
|
|
|
|
|
Contributions to
|
|
Deferred
|
|
Long-Term Care and
|
|
|
|
|
|
|
401(k) Plan
|
|
Compensation Plan
|
|
Disability Plans
|
|
Total
|
Name
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Ms. Schaefer
|
|
|
2010
|
|
|
|
|
|
|
|
47,023
|
|
|
|
5,833
|
|
|
|
52,856
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
33,669
|
|
|
|
|
|
|
|
33,669
|
|
|
|
|
2008
|
|
|
|
3,173
|
|
|
|
29,500
|
|
|
|
|
|
|
|
32,673
|
|
Mr. Calder
|
|
|
2010
|
|
|
|
4,900
|
|
|
|
34,042
|
|
|
|
|
|
|
|
38,942
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
25,977
|
|
|
|
|
|
|
|
25,977
|
|
|
|
|
2008
|
|
|
|
4,600
|
|
|
|
24,000
|
|
|
|
|
|
|
|
28,600
|
|
Mr. Black
|
|
|
2010
|
|
|
|
3,675
|
|
|
|
25,039
|
|
|
|
3,544
|
|
|
|
32,258
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
20,058
|
|
|
|
|
|
|
|
20,058
|
|
Mr. Lombardo
|
|
|
2010
|
|
|
|
4,900
|
|
|
|
15,369
|
|
|
|
1,746
|
|
|
|
22,015
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
14,138
|
|
|
|
|
|
|
|
14,138
|
|
|
|
|
2008
|
|
|
|
3,639
|
|
|
|
13,527
|
|
|
|
|
|
|
|
17,166
|
|
Mr. Schroeder
|
|
|
2010
|
|
|
|
4,265
|
|
|
|
22,931
|
|
|
|
|
|
|
|
27,195
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
22,612
|
|
|
|
|
|
|
|
22,612
|
|
|
|
|
2008
|
|
|
|
4,600
|
|
|
|
20,500
|
|
|
|
|
|
|
|
25,100
|
|
|
|
|
(7) |
|
Mr. Black became an executive officer of the company in
2009. |
|
(8) |
|
Mr. Schroeder terminated his employment with us on
February 23, 2011. |
33
Deferred
Compensation
Elective deferrals under our deferred compensation plan are
reported in the Summary Compensation Table above in the columns
that are associated with the type of compensation (that is,
Salary or Non-Equity Incentive Plan Compensation) that is
deferred. Company matching and profit-sharing contributions are
included in the values reported in the All Other Compensation
column, and are specifically identified in the Nonqualified
Deferred Compensation table below and related text.
2010
GRANTS OF PLAN-BASED AWARDS FOR 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
Under Equity
|
|
Grant Date Fair
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards(2)
|
|
Incentive Plan Awards(3)
|
|
Value of Stock and
|
|
|
Grant
|
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Option Awards(4)
|
Name
|
|
Date
|
|
Type of Grant(1)
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($)
|
|
Ms. Schaefer
|
|
N/A
|
|
Annual Cash Incentive
|
|
|
275,000
|
|
|
|
550,000
|
|
|
|
825,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/10
|
|
Annual Equity Grant Relative
Common Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78,323
|
|
|
|
156,645
|
|
|
|
234,968
|
|
|
|
571,677
|
|
|
|
3/31/10
|
|
Annual Equity Grant Performance
Goals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,108
|
|
|
|
52,215
|
|
|
|
78,323
|
|
|
|
216,171
|
|
|
|
3/31/10
|
|
Multi-Year Program Equity Grant Relative Common
Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,108
|
|
|
|
52,215
|
|
|
|
78,323
|
|
|
|
198,431
|
|
|
|
3/31/10
|
|
Multi-Year Program Equity Grant Absolute Common
Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,108
|
|
|
|
52,215
|
|
|
|
78,323
|
|
|
|
204,337
|
|
|
|
3/31/10
|
|
Multi-Year Program Equity Grant Time-Based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
156,646
|
|
|
|
156,646
|
|
|
|
156,646
|
|
|
|
498,134
|
|
Mr. Calder
|
|
N/A
|
|
Annual Cash Incentive
|
|
|
154,000
|
|
|
|
308,000
|
|
|
|
462,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/10
|
|
Annual Equity Grant Relative
Common Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,551
|
|
|
|
73,101
|
|
|
|
109,652
|
|
|
|
266,783
|
|
|
|
3/31/10
|
|
Annual Equity Grant Performance Goals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,184
|
|
|
|
24,367
|
|
|
|
36,551
|
|
|
|
100,881
|
|
|
|
3/31/10
|
|
Multi-Year Program Equity Grant Relative Common
Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,184
|
|
|
|
24,367
|
|
|
|
36,551
|
|
|
|
92,602
|
|
|
|
3/31/10
|
|
Multi-Year Program Equity Grant Absolute Common
Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,184
|
|
|
|
24,367
|
|
|
|
36,551
|
|
|
|
95,358
|
|
|
|
3/31/10
|
|
Multi-Year Program Equity Grant Time-Based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,101
|
|
|
|
73,101
|
|
|
|
73,101
|
|
|
|
232,461
|
|
Mr. Black
|
|
N/A
|
|
Annual Cash Incentive
|
|
|
104,500
|
|
|
|
209,000
|
|
|
|
313,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/10
|
|
Annual Equity Grant Relative
Common Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,322
|
|
|
|
44,644
|
|
|
|
66,966
|
|
|
|
162,928
|
|
|
|
3/31/10
|
|
Annual Equity Grant Performance
Goals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,441
|
|
|
|
14,881
|
|
|
|
22,322
|
|
|
|
61,609
|
|
|
|
3/31/10
|
|
Multi-Year Program Equity Grant Relative Common
Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,441
|
|
|
|
14,881
|
|
|
|
22,322
|
|
|
|
56,553
|
|
|
|
3/31/10
|
|
Multi-Year Program Equity Grant Absolute Common
Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,441
|
|
|
|
14,881
|
|
|
|
22,322
|
|
|
|
58,236
|
|
|
|
3/31/10
|
|
Multi-Year Program Equity Grant Time-Based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,644
|
|
|
|
44,644
|
|
|
|
44,644
|
|
|
|
141,968
|
|
Mr. Lombardo
|
|
N/A
|
|
Annual Cash Incentive
|
|
|
31,513
|
|
|
|
62,837
|
|
|
|
94,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/10
|
|
Annual Equity Grant Relative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,929
|
|
|
|
29,857
|
|
|
|
44,786
|
|
|
|
108,964
|
|
|
|
|
|
Common Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/10
|
|
Annual Equity Grant Performance Goals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,976
|
|
|
|
9,953
|
|
|
|
14,929
|
|
|
|
41,204
|
|
Mr. Schroeder
|
|
N/A
|
|
Annual Cash Incentive
|
|
|
45,658
|
|
|
|
91,042
|
|
|
|
136,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/10
|
|
Annual Equity Grant Relative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,420
|
|
|
|
28,839
|
|
|
|
43,259
|
|
|
|
105,249
|
|
|
|
|
|
Common Stock Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/10
|
|
Annual Equity Grant Performance Goals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,807
|
|
|
|
9,613
|
|
|
|
14,420
|
|
|
|
39,799
|
|
|
|
|
(1) |
|
All equity grants listed were made under the companys 2004
Incentive Stock Plan. |
|
(2) |
|
The amounts reported in the columns include potential payouts
corresponding to the achievement of the threshold, target, and
maximum performance objectives under our annual cash incentive
plan, as discussed in |
34
|
|
|
|
|
the Compensation Discussion and Analysis above. The actual
payments for performance under this plan for the fiscal year are
reported in the Summary Compensation Table above. |
|
(3) |
|
The amounts reported in the columns include potential payouts
corresponding to the achievement of the threshold, target, and
maximum performance objectives for awards under our long-term
incentive plan, as discussed in the Compensation Discussion and
Analysis above. The actual award amounts earned for 2010 are
also discussed in the Compensation Discussion and Analysis above. |
|
(4) |
|
The amount represents the grant date fair value of Stock Awards
granted in 2010, disregarding that we recognize the value of the
awards for financial reporting purposes over the service period
of the awards. The grant date fair value shown is calculated
based in the maximum potential future payout number of shares. |
35
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END FOR 2010
The following table shows information about outstanding equity
awards that had been granted to our NEOs at December 31,
2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards;
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
Number of
|
|
Value of
|
|
|
Option Awards
|
|
Number of
|
|
Value of
|
|
Unearned
|
|
Unearned
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
Shares or
|
|
Shares or
|
|
Shares,
|
|
Shares,
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
Units of
|
|
Units of
|
|
Units or
|
|
Units or
|
|
|
Underlying
|
|
Underlying
|
|
Option
|
|
|
|
Stock
|
|
Stock
|
|
Other Rights
|
|
Other Rights
|
|
|
Unexercised
|
|
Unexercised
|
|
Exercise
|
|
Option
|
|
That Have
|
|
That Have
|
|
That Have
|
|
That Have
|
|
|
Options
|
|
Options(1)
|
|
Price
|
|
Expiration
|
|
Not Vested
|
|
Not Vested
|
|
Not Vested
|
|
Not Vested
|
Name
|
|
(# Exer)
|
|
(# Unexer)
|
|
($)
|
|
Date
|
|
(1) (2) (#)
|
|
(3) ($)
|
|
(1) (4) (#)
|
|
(3) ($)
|
|
Ms. Schaefer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
329,487
|
|
|
|
859,961
|
|
|
|
156,647
|
|
|
|
408,849
|
|
Mr. Calder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
135,067
|
|
|
|
352,525
|
|
|
|
73,103
|
|
|
|
190,799
|
|
Mr. Black
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,144
|
|
|
|
190,906
|
|
|
|
44,645
|
|
|
|
116,523
|
|
Mr. Lombardo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,000
|
|
|
|
54,810
|
|
|
|
19,905
|
|
|
|
51,952
|
|
Mr. Schroeder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
39,150
|
|
|
|
19,227
|
|
|
|
50,182
|
|
|
|
|
(1) |
|
The following table shows the vesting dates of the outstanding
Stock Awards that were unvested as of December 31, 2010: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting
|
|
Amounts Vesting (#)
|
Award Type
|
|
Date
|
|
Ms. Schaefer
|
|
Mr. Calder
|
|
Mr. Black
|
|
Mr. Lombardo
|
|
Mr. Schroeder
|
|
Stock
|
|
|
1/1/11
|
|
|
|
34,811
|
|
|
|
16,245
|
|
|
|
11,921
|
|
|
|
6,635
|
|
|
|
6,409
|
|
Stock
|
|
|
4/1/11
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
5,500
|
|
|
|
5,000
|
|
Stock
|
|
|
8/8/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
|
Stock
|
|
|
12/31/11
|
|
|
|
207,650
|
|
|
|
78,211
|
|
|
|
9,921
|
|
|
|
6,635
|
|
|
|
6,409
|
|
Stock
|
|
|
4/1/12
|
|
|
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
5,500
|
|
|
|
5,000
|
|
Stock
|
|
|
12/31/12
|
|
|
|
139,242
|
|
|
|
64,980
|
|
|
|
39,684
|
|
|
|
6,635
|
|
|
|
6,409
|
|
Stock
|
|
|
4/1/13
|
|
|
|
|
|
|
|
|
|
|
|
6,500
|
|
|
|
5,000
|
|
|
|
3,000
|
|
Stock
|
|
|
12/31/13
|
|
|
|
104,431
|
|
|
|
48,734
|
|
|
|
29,763
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
4/1/14
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
4,000
|
|
|
|
2,000
|
|
|
|
|
(2) |
|
Shares represent grants or shares earned under the
companys AEG and MYPEG programs that are no longer subject
to performance-based vesting but are subject to time-based
vesting. |
(3) |
|
The Market Value is based on the closing price of our common
stock on NASDAQ on December 31, 2010, which was $2.61. |
(4) |
|
AEG and MYPEG awards are presented at the threshold performance
level. |
OPTION
EXERCISES AND STOCK VESTED FOR 2010
The following table provides information for the NEOs on stock
awards that vested during 2010 including (1) the number of
shares acquired upon exercise of option awards and the value
realized and (2) the number of shares acquired upon the
vesting of restricted stock awards and the value realized. The
value realized on exercise is based upon the closing market
price of our common stock on the day of exercise of the shares
underlying the options. The value realized on vesting is based
upon the closing stock price of our common stock on the vesting
date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of Shares
|
|
|
|
Number of Shares
|
|
|
|
|
Acquired on
|
|
Value Realized
|
|
Acquired on
|
|
Value Realized
|
|
|
Exercise
|
|
on Exercise
|
|
Vesting
|
|
on Vesting
|
Name
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
Ms. Schaefer
|
|
|
|
|
|
|
|
|
|
|
354,132
|
|
|
|
943,297
|
|
Mr. Calder
|
|
|
|
|
|
|
|
|
|
|
129,065
|
|
|
|
343,676
|
|
Mr. Black
|
|
|
|
|
|
|
|
|
|
|
9,500
|
|
|
|
29,690
|
|
Mr. Lombardo
|
|
|
|
|
|
|
|
|
|
|
6,500
|
|
|
|
20,130
|
|
Mr. Schroeder
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
16,300
|
|
36
PENSION
BENEFITS FOR 2010
We do not maintain a defined benefit pension plan or
supplemental pension plan for our NEOs.
NONQUALIFIED
DEFERRED COMPENSATION FOR 2010
The following table discloses contributions, earnings, balances
and distributions for our NEOs under our nonqualified deferred
compensation plan for 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
Aggregate
|
|
|
Executive
|
|
Registrant
|
|
Earnings
|
|
Aggregate
|
|
Balance
|
|
|
Contributions
|
|
Contributions
|
|
in Last FY
|
|
Withdrawals/
|
|
at Last FYE
|
Name
|
|
in Last FY ($)
|
|
in Last FY ($)
|
|
(1) ($)
|
|
Distributions ($)
|
|
(2) ($)
|
|
Ms. Schaefer
|
|
|
21,923
|
|
|
|
47,023
|
|
|
|
50,305
|
|
|
|
|
|
|
|
302,285
|
|
Mr. Calder
|
|
|
15,385
|
|
|
|
34,042
|
|
|
|
15,113
|
|
|
|
|
|
|
|
264,234
|
|
Mr. Black
|
|
|
12,730
|
|
|
|
25,039
|
|
|
|
13,936
|
|
|
|
|
|
|
|
110,213
|
|
Mr. Lombardo
|
|
|
7,542
|
|
|
|
15,369
|
|
|
|
13,884
|
|
|
|
|
|
|
|
118,252
|
|
Mr. Schroeder
|
|
|
10,928
|
|
|
|
22,931
|
|
|
|
4,969
|
|
|
|
|
|
|
|
140,746
|
|
|
|
|
(1) |
|
The values in this column include aggregate notional earnings
during 2010 of each NEOs account in the deferred
compensation plan. Aggregate notional earnings in this table are
not reported in the Summary Compensation Table because they are
based on market rates that are determined by reference to
available benchmark investment alternatives offered under the
deferred compensation plan. |
|
(2) |
|
This column includes amounts of each NEOs total deferred
compensation plan account as of December 31, 2010. The
following table reports the portion of the Aggregate Balance
that was reported as base salary and bonus compensation in the
Summary Compensation Tables in our prior year proxies. |
|
|
|
|
|
|
|
Amounts that were
|
|
|
Reported as
|
|
|
Compensation in
|
Name
|
|
Prior Year Proxies ($)
|
|
Ms. Schaefer
|
|
|
87,138
|
|
Mr. Calder
|
|
|
270,901
|
|
Mr. Black
|
|
|
17,181
|
|
Mr. Lombardo
|
|
|
7,385
|
|
Mr. Schroeder
|
|
|
50,260
|
|
Narrative
to the Nonqualified Deferred Compensation Table
Accounts in the deferred compensation plan are credited with
notional earnings based on the market rate of return of the
available benchmark investment alternatives offered under the
plan. The benchmark investment alternatives are indexed to
traded mutual funds or our common stock, and each NEO may elect
among the investment alternatives in increments of 1% of his or
her account. The executive may make daily changes in his or her
investment election for future deferrals, and may make monthly
transfers of balances between the available
37
investment alternatives. In 2010, the benchmark investments and
their respective notional annual rates of return in the deferred
compensation plan were as follows:
|
|
|
|
|
|
|
2010 Annual
|
Benchmark Investment (Ticker Symbol)
|
|
Rate of Return (%)
|
|
Artisan International (ARTIX)
|
|
|
5.9
|
|
Baron Growth (BGRFX)
|
|
|
24.0
|
|
Columbia Small Cap Value I Z (CSCZX)
|
|
|
26.1
|
|
Dodge & Cox Stock Fund (DODGX)
|
|
|
13.5
|
|
Growth Fund of America (GFAFX)
|
|
|
12.3
|
|
PIMCO All Asset (PASAX)
|
|
|
13.1
|
|
PIMCO Total Return Fund (PTTRX)
|
|
|
8.8
|
|
Vanguard Mid-Cap Index (VIMSX)
|
|
|
25.5
|
|
Vanguard S&P 500 Index (VFINX)
|
|
|
14.9
|
|
Great Wolf Resorts, Inc. common stock (WOLF)
|
|
|
10.1
|
|
Earnings on deferred amounts solely represent appreciation
(depreciation) of the market value of the available benchmark
investment alternatives offered in the plan. We do not provide
for a minimum return or guarantee a minimum payout amount for
deferred amounts. Amounts held in the deferred compensation plan
are at risk investments.
Executives may receive a distribution of the vested portion of
their deferred compensation plan accounts upon termination of
employment (including retirement or disability) or, in the case
of deferrals by the executive (and related notional earnings),
upon a specified future date while still employed, as elected by
the executive (an in-service distribution). Each
years deferrals may have a separate distribution election.
Distributions payable upon termination of employment may be
elected as a (i) a lump sum cash payment or (ii) a
series of annual cash installments payable over five years.
In-service distributions may be elected by the executive as a
single lump sum cash payment beginning not earlier than the
third calendar year following the calendar year of the deferral.
When the executive is a key employee for purposes of
Section 409A of the Internal Revenue Code, any distribution
payable on account of termination of employment will not occur
during the six months following termination of employment.
Typically, our NEOs are key employees.
POTENTIAL
PAYMENT UPON TERMINATION OR CHANGE OF CONTROL FOR 2010
Our NEOs are eligible to receive certain termination
and/or
change in control payments and acceleration rights under certain
of the compensation arrangements that they hold with us. These
payments and acceleration rights are contained within the
executive officers employment agreements, employee stock
option stock grant agreements, and deferred compensation plan
agreement.
Employment
Agreements
As noted previously, we have entered into employment agreements
with certain of our NEOs. The agreements cover the additional
payments that would be due to these individuals in the following
scenarios:
|
|
|
|
|
Termination of employment by us:
|
|
|
|
|
|
In the event of death,
|
|
|
|
In the event of disability,
|
|
|
|
For cause,
|
|
|
|
Without cause, or
|
|
|
|
Due to non-renewal of an employment contract.
|
38
|
|
|
|
|
Termination of employment by the executive:
|
|
|
|
|
|
As a voluntary termination,
|
|
|
|
For good reason or
|
|
|
|
Due to non-renewal of an employment contract.
|
The terms are substantially identical in each of the agreements
for Ms. Schaefer and Messrs. Calder and Schroeder. The
terms of Mr. Blacks agreement provides for payments
only in the event of a termination by us after a change in
control of the company.
We do not believe that we should pay our applicable NEOs any
incremental compensation upon termination when the termination
is by either choice or due to conduct that is potentially
detrimental to our company. Thus, we do not provide any of our
NEOs any incremental severance benefits other than any amounts
already earned and accrued at the date of termination if the
termination is voluntary (unless for good reason) or for cause.
In the event of a termination by us without cause or by the
executive for good reason, we provide severance benefits under
certain NEOs employment agreements, as described more
fully below. These amounts reflect our belief that it is
difficult for senior managers to find comparable employment
opportunities in a short period of time, particularly after
experiencing a termination that was beyond their control.
Termination
Events
Severance payments under the above termination event scenarios
for Ms. Schaefer and Messrs. Calder and Schroeder are
summarized below.
|
|
|
|
|
Death or Disability. The NEO would be entitled
to receive base salary and annual bonus, if any, which were due
and payable on the date the executives employment
terminated.
|
|
|
|
For Cause. The NEO would be entitled to
receive base salary and annual bonus, if any, which were due and
payable on the date the executives employment was
terminated for cause. Termination for cause is a
termination due to:
|
|
|
|
|
|
The executive being convicted of, pleading guilty to, or
confessing or otherwise admitting to any felony or any act of
fraud, misappropriation or embezzlement;
|
|
|
|
An act or omission by the executive involving malfeasance or
gross negligence in the performance of the executives
duties and responsibilities to the material detriment of our
company;
|
|
|
|
The executive breaching affirmative or negative covenants or
undertakings described in the employment agreement, such as the
agreements non-compete provisions; or
|
|
|
|
The executive violating our code of conduct if the consequence
of such violation ordinarily would be a termination of their
employment by us.
|
A finding of cause is subject to advance notice to the executive
and an executives opportunity to cure the act or failure
to act.
|
|
|
|
|
Without cause. The NEO would be entitled to
receive, in lump sum payments:
|
|
|
|
|
|
An amount equal to 100% of their then-current annual base salary
and most recently paid annual bonus; and
|
|
|
|
An amount equal to 36 times our monthly contribution on behalf
of the executive under health and welfare plans in which the
executive participates.
|
In the event of a termination by us without cause within
180 days prior to, or 18 months following, a change of
control, then the multipliers for the severance benefits
described above are increased to 200%. A change of control means
the occurrence of any of the following events:
|
|
|
|
|
Any person or group acquires 30% or more of our stock;
|
39
|
|
|
|
|
The majority of the members of our Board of Directors changes in
any two-year period;
|
|
|
|
A merger or sale of our company to another company or any sale
or disposition of 50% or more of our assets or business; or
|
|
|
|
A merger or consolidation where our stockholders hold 60% or
less of the voting power to vote for members of the Board of
Directors of the new entity.
|
|
|
|
|
|
Non-renewal of employment agreement by
company. The NEO would be entitled to receive the
same benefits as for a termination without cause as described
above.
|
|
|
|
Voluntary. The NEO would be entitled to
receive base salary and annual bonus, if any, which were due and
payable on the date the executives employment terminated.
|
|
|
|
Good Reason. Termination by the executive for
good reason is a termination due to:
|
|
|
|
|
|
A material reduction or, after a change of control, any
reduction in the executives base salary or a material
reduction in the executives opportunity to receive any
annual bonus and stock option grants;
|
|
|
|
A material reduction in the scope, importance or prestige of the
executives duties, responsibilities or powers at the
company or the executives reporting relationships within
the company;
|
|
|
|
Transferring the executives primary work site from the
executives primary work site on the date the employment
agreement was signed;
|
|
|
|
After a change of control, a change in the executives job
title or employee benefit plans, programs and policies; or
|
|
|
|
A material breach or, after a change of control, any breach of
the employment agreement.
|
In the event of one of these termination events for good reason,
subject to the companys opportunity to cure the good
reason, the NEO would be entitled to receive the same benefits
as for a termination without cause as described above.
|
|
|
|
|
Non-renewal of employment agreement by the
executive. The NEO would be entitled to receive
base salary and annual bonus, if any, which were due and payable
on the date the executives employment terminated.
|
Severance payments under the above termination scenarios for
Mr. Black are summarized below:
|
|
|
|
|
Death or Disability, For Cause, Non-renewal of employment
agreement by the company, Voluntary and Non-renewal of
employment agreement by the
executive. Mr. Black would be entitled to
receive base salary and annual bonus, if any, which were due and
payable on the date his employment terminated.
|
|
|
|
Without cause. Mr. Black would be
entitled to receive base salary and annual bonus, if any, which
were due and payable on the date his employment terminated.
|
|
|
|
Good Reason. In the event of a termination by
Mr. Black for good reason or by the company within
180 days prior to, or 18 months following a change of
control, Mr. Black would be entitled to receive, in lump
sum payments:
|
|
|
|
|
|
An amount equal to 200% of his then-current annual base salary
and most recently paid annual bonus; and
|
|
|
|
An amount equal to 36 times our monthly contribution on behalf
of the executive under health and welfare plans in which the
executive participates.
|
Severance payments under the above termination scenarios for
Mr. Lombardo are summarized below:
|
|
|
|
|
Death or Disability, For Cause, Non-renewal of employment
agreement by the company, Voluntary and Non-renewal of
employment agreement by the
executive. Mr. Lombardo would be entitled to
receive base salary and annual bonus, if any, which were due and
payable on the date his employment terminated.
|
|
|
|
|
|
Without cause. Mr. Lombardo would be
entitled to receive base salary and annual bonus, if any, which
were due and payable on the date his employment terminated. In
the event of a termination by the
|
40
|
|
|
|
|
company within 12 months following a change of control,
Mr. Lombardo would be entitled to receive in a lump sum
payment an amount equal to 100% of his then-current annual base
salary.
|
Conditions
to Receive Payment
The covenants within the employment agreements include various
non-compete and non-solicitation provisions following a
termination event, including the prohibition for a one-year
period from:
|
|
|
|
|
Competing with us within 50 miles of a location where we
conduct or are planning to conduct our business;
|
|
|
|
Inducing or attempting to induce any customers or potential
customers in order for the executive to compete with us; or
|
|
|
|
Hiring or attempting to hire our employees.
|
In addition, the employment agreements prohibit the executive
from using confidential information (meaning any secret,
confidential or proprietary information possessed by the company
relating to their businesses) that has not become generally
available to the public.
Summary
of Payments Due Under Different Termination Events
Assuming a December 31, 2010 termination event by the
executive or the company, including before or after a change in
control as described above, payments would be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health and
|
|
|
Excise Tax
|
|
|
|
|
|
|
|
|
|
|
|
|
Welfare
|
|
|
Gross-Up
|
|
|
|
|
|
|
Salary Due
|
|
|
Bonus Due
|
|
|
Payment
|
|
|
Payment
|
|
|
Total Due
|
|
Name/Termination Event
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Ms. Schaefer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Death, disability, termination for cause, voluntary
termination, non-renewal by executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Termination without cause, for good reason or non-renewal by
company (all assuming no change of control)
|
|
|
550,000
|
|
|
|
558,300
|
|
|
|
32,075
|
|
|
|
|
|
|
|
1,140,375
|
|
- Termination without cause, for good reason or non-renewal by
company (all assuming a change of control)
|
|
|
1,100,000
|
|
|
|
1,116,600
|
|
|
|
32,075
|
|
|
|
1,707,554
|
|
|
|
3,956,229
|
|
Mr. Calder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Death, disability, termination for cause, voluntary
termination, non-renewal by executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Termination without cause, for good reason or non-renewal by
company (all assuming no change of control)
|
|
|
385,000
|
|
|
|
337,163
|
|
|
|
21,108
|
|
|
|
|
|
|
|
743,271
|
|
- Termination without cause, for good reason or non-renewal by
company (all assuming a change of control)
|
|
|
770,000
|
|
|
|
674,326
|
|
|
|
21,108
|
|
|
|
909,526
|
|
|
|
2,374,960
|
|
Mr. Black
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Death, disability, termination for cause, voluntary
termination, non-renewal by executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Termination without cause, for good reason or non-renewal by
company (all assuming no change of control)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Termination without cause, for good reason or non-renewal by
company (all assuming a change of control)
|
|
|
627,000
|
|
|
|
427,500
|
|
|
|
32,075
|
|
|
|
648,230
|
|
|
|
1,734,805
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health and
|
|
|
Excise Tax
|
|
|
|
|
|
|
|
|
|
|
|
|
Welfare
|
|
|
Gross-Up
|
|
|
|
|
|
|
Salary Due
|
|
|
Bonus Due
|
|
|
Payment
|
|
|
Payment
|
|
|
Total Due
|
|
Name/Termination Event
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Mr. Lombardo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Death, disability, termination for cause, voluntary
termination, non-renewal by executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Termination without cause, for good reason or non-renewal by
company (all assuming no change of control)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Termination without cause, for good reason or non-renewal by
company (all assuming a change of control)
|
|
|
188,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
188,700
|
|
Mr. Schroeder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Death, disability, termination for cause, voluntary
termination, non-renewal by executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Termination without cause, for good reason or non-renewal by
company (all assuming no change of control)
|
|
|
273,400
|
|
|
|
80,000
|
|
|
|
30,959
|
|
|
|
|
|
|
|
384,359
|
|
- Termination without cause, for good reason or non-renewal by
company (all assuming a change of control)
|
|
|
546,800
|
|
|
|
160,000
|
|
|
|
30,959
|
|
|
|
323,392
|
|
|
|
1,061,151
|
|
Stock
Option Agreements
We have granted certain of the NEOs stock options pursuant to
individual option agreements. Stock options are subject to
vesting ratably over a three-year period from the date of grant.
These stock options are, however, subject to accelerated vesting
under these termination event scenarios:
|
|
|
|
|
Termination of the executives employment by the company
without cause and
|
|
|
|
Termination of the executives employment by the executive
for good reason.
|
The definitions of cause and good reason
are the same as described in the section captioned
Employment Agreements above.
If one of these termination events occurred, all of the
NEOs unvested stock options will be considered vested. As
of December 31, 2010, all stock options held by our NEOs
had been cancelled. As a result, assuming we experienced one of
the termination event scenarios described above on
December 31, 2010, none of our NEOs would realize any
additional market value related to stock options.
Awards
Under Stock Grant Agreements, Annual Equity Grants and
Multi-Year Program Equity Grants
We have granted certain of the NEOs shares of our common stock
pursuant to individual grant certificates. These grants provide
for an accelerated vesting of all unvested shares in the event,
within 180 days prior to, or 18 months following, a
change of control, of either:
|
|
|
|
|
A termination by us without cause or
|
|
|
|
An executives resignation for good reason.
|
42
Assuming we experienced either of those termination events on
December 31, 2010, the market value realized on the
accelerated stock grants for each of our NEOs would be as
follows:
|
|
|
|
|
|
|
|
|
|
|
Shares With
|
|
|
|
|
Vesting
|
|
Value Realized
|
|
|
Accelerated
|
|
on Vesting
|
Name
|
|
(#)
|
|
(1) ($)
|
|
Ms. Schaefer
|
|
|
172,841
|
|
|
|
451,115
|
|
Mr. Calder
|
|
|
61,966
|
|
|
|
161,732
|
|
Mr. Black
|
|
|
28,500
|
|
|
|
74,385
|
|
Mr. Lombardo
|
|
|
21,000
|
|
|
|
54,810
|
|
Mr. Schroeder
|
|
|
15,000
|
|
|
|
39,150
|
|
|
|
|
(1) |
|
The value realized is based on the closing price of our common
stock on NASDAQ on December 31, 2010, which was $2.61. |
Also, the vesting of awards under the 2010 AEGs and MYPEGs
described in the Compensation Discussion and Analysis above are
affected by certain termination events as summarized in the
charts below:
|
|
|
|
|
|
|
Termination Scenario
|
|
|
Termination Without
|
|
|
|
|
Cause (by Company),
|
|
|
|
|
Termination For Good
|
|
|
|
|
Reason (by Executive),
|
|
|
Type of AEG Shares Granted
|
|
Death or Disability
|
|
Change in Control
|
|
Relative Common Stock Performance Shares
|
|
Participants would be entitled to a pro-rated amount of award,
based upon the performance up until the time of the triggering
termination event.
|
|
Participants would be entitled to the greater of (a) shares at a
Target level of performance or (b) shares based upon the
performance up until the time of the termination triggering
event.
|
Individual / Departmental Performance Goal Shares
|
|
All shares are forfeited.
|
|
|
|
|
|
|
|
|
|
Termination Scenario
|
|
|
Termination Without
|
|
|
|
|
Cause (by Company),
|
|
|
|
|
Termination For Good
|
|
|
|
|
Reason (by Executive),
|
|
|
Type of MYPEG Shares Granted
|
|
Death or Disability
|
|
Change in Control
|
|
Relative Common Stock Performance Shares
|
|
From the program start (1/01/10) until 24 months
(12/31/11), participants would be entitled to a pro-rated amount
of awards, based upon the performance up until the time of the
triggering termination event.
|
Absolute Common Stock Performance Shares
|
|
If more than 24 months of the program has elapsed, the
performance achievements would be assessed, projected out for
the balance of the plan, and the corresponding number of awards
would be awarded (deemed earned) had the program
lasted the full 36 months.
|
Time-Based Shares
|
|
All shares granted vest immediately.
|
43
Assuming we experienced one of the termination events described
above on December 31, 2010, the additional market value
realized on the accelerated stock grants for each of our NEOs
would have been as follows:
|
|
|
|
|
|
|
|
|
|
|
Termination Scenario
|
|
|
Termination Without Cause (by
|
|
|
|
|
Company), Termination For Good
|
|
|
|
|
Reason (by Executive), Death or
|
|
|
|
|
Disability(1)
|
|
Change in Control(1)
|
Name/Grant
|
|
($)
|
|
($)
|
|
Ms. Schaefer:
|
|
|
|
|
|
|
|
|
AEGs
|
|
|
|
|
|
|
545,127
|
|
MYPEGs
|
|
|
481,330
|
|
|
|
481,330
|
|
Mr. Black:
|
|
|
|
|
|
|
|
|
AEGs
|
|
|
|
|
|
|
155,360
|
|
MYPEGs
|
|
|
137,171
|
|
|
|
137,171
|
|
Mr. Calder:
|
|
|
|
|
|
|
|
|
AEGs
|
|
|
|
|
|
|
254,391
|
|
MYPEGs
|
|
|
224,606
|
|
|
|
224,606
|
|
Mr. Lombardo AEGs
|
|
|
|
|
|
|
103,907
|
|
Mr. Schroeder AEGs
|
|
|
|
|
|
|
100,263
|
|
|
|
|
(1) |
|
The value realized is based on the closing price of our common
stock on NASDAQ on December 31, 2010, which was $2.61. |
Deferred
Compensation Plan
Under the deferred compensation plan (see the Compensation
Discussion and Analysis Non-Qualified Deferred
Compensation Plan above for more information on this plan), all
of an NEOs company matching and profit-sharing
contributions from the company are subject to accelerated
vesting upon the following termination events:
|
|
|
|
|
A change of control of the company or
|
|
|
|
The NEOs death or disability.
|
The change of control provisions within the deferred
compensation plan are equally applicable to all participants
within the plan.
Assuming a change in control or an executives death or
disability under the deferred compensation plan at
December 31, 2010, the market value to the applicable
executive would be equal to the aggregate balances at fiscal
year end as presented in the Non-Qualified Deferred Compensation
table on page 37.
DIRECTOR
COMPENSATION
The following table shows the compensation for services in
fiscal 2010 for our non-employee directors. Our officers who
serve as directors are not paid for their service as directors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
|
Earned or
|
|
Stock
|
|
Option
|
|
|
|
|
Paid in
|
|
Awards
|
|
Awards
|
|
Total
|
Name
|
|
Cash ($)
|
|
(1)(2)(3)($)
|
|
(1)(2)(3)($)
|
|
($)
|
|
Joseph Vittoria
|
|
|
93,431
|
|
|
|
55,650
|
|
|
|
|
|
|
|
149,081
|
|
Elan Blutinger
|
|
|
41,653
|
|
|
|
73,498
|
|
|
|
|
|
|
|
115,151
|
|
Randy Churchey
|
|
|
32,341
|
|
|
|
96,077
|
|
|
|
|
|
|
|
128,418
|
|
Edward Rensi
|
|
|
55,931
|
|
|
|
55,650
|
|
|
|
|
|
|
|
111,581
|
|
Howard Silver
|
|
|
69,681
|
|
|
|
55,650
|
|
|
|
|
|
|
|
125,331
|
|
|
|
|
(1) |
|
The value reported for Stock Awards and Option Awards for each
individual is the fair value of the full grant received as of
the grant date. The assumptions for making the valuation
determinations are set forth in the |
44
|
|
|
|
|
footnote or footnote sections to our financial statements
captioned Stock Based Compensation or
Share-Based Compensation in our consolidated
financial statements. |
|
(2) |
|
The following table shows the number of outstanding Stock Awards
and Option Awards held by each non-employee director as of
December 31, 2010: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
Option Awards
|
|
|
Vested
|
|
Unvested
|
|
Vested
|
|
Unvested
|
Name
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
Mr. Vittoria
|
|
|
31,243
|
|
|
|
38,824
|
|
|
|
|
|
|
|
|
|
Mr. Blutinger
|
|
|
35,580
|
|
|
|
38,824
|
|
|
|
|
|
|
|
|
|
Mr. Churchey
|
|
|
61,947
|
|
|
|
37,084
|
|
|
|
|
|
|
|
|
|
Mr. Rensi
|
|
|
24,529
|
|
|
|
38,824
|
|
|
|
|
|
|
|
|
|
Mr. Silver
|
|
|
31,336
|
|
|
|
38,824
|
|
|
|
|
|
|
|
|
|
The following table shows the vesting dates of the outstanding
Stock Awards and Option Awards that were unvested as of
December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting
|
|
|
|
|
|
|
|
|
|
|
Award Type
|
|
Date
|
|
Mr. Vittoria
|
|
Mr. Blutinger
|
|
Mr. Churchey
|
|
Mr. Rensi
|
|
Mr. Silver
|
|
Stock
|
|
|
5/26/11
|
|
|
|
5,573
|
|
|
|
5,573
|
|
|
|
5,573
|
|
|
|
5,573
|
|
|
|
5,573
|
|
Stock
|
|
|
5/28/11
|
|
|
|
2,610
|
|
|
|
2,610
|
|
|
|
870
|
|
|
|
2,610
|
|
|
|
2,610
|
|
Stock
|
|
|
6/8/11
|
|
|
|
8,356
|
|
|
|
8,356
|
|
|
|
8,356
|
|
|
|
8,356
|
|
|
|
8,356
|
|
Stock
|
|
|
5/26/12
|
|
|
|
5,573
|
|
|
|
5,573
|
|
|
|
5,573
|
|
|
|
5,573
|
|
|
|
5,573
|
|
Stock
|
|
|
6/8/12
|
|
|
|
8,356
|
|
|
|
8,356
|
|
|
|
8,356
|
|
|
|
8,356
|
|
|
|
8,356
|
|
Stock
|
|
|
6/8/13
|
|
|
|
8,356
|
|
|
|
8,356
|
|
|
|
8,356
|
|
|
|
8,356
|
|
|
|
8,356
|
|
|
|
|
(3) |
|
The following table details the grants of Stock Awards and
Option Awards to directors during 2010: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
Fair Value of
|
|
|
Grant
|
|
Grant
|
|
Stock
|
|
Option
|
|
Stock and
|
Name
|
|
Type
|
|
Date
|
|
Awards (#)
|
|
Awards (#)
|
|
Option Awards ($)
|
|
Mr. Vittoria
|
|
|
(B
|
)
|
|
|
6/8/10
|
|
|
|
25,068
|
|
|
|
|
|
|
|
55,650
|
|
Mr. Blutinger
|
|
|
(B
|
)
|
|
|
6/8/10
|
|
|
|
25,068
|
|
|
|
|
|
|
|
55,650
|
|
|
|
|
(A
|
)
|
|
|
7/1/10
|
|
|
|
8,879
|
|
|
|
|
|
|
|
17,847
|
|
Mr. Churchey
|
|
|
(A
|
)
|
|
|
1/4/10
|
|
|
|
7,574
|
|
|
|
|
|
|
|
19,844
|
|
|
|
|
(B
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)
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6/8/10
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25,068
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55,650
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(A
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)
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7/1/10
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10,240
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20,582
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Mr. Rensi
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(B
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)
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6/8/10
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25,068
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55,650
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Mr. Silver
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(B
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6/8/10
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25,068
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55,650
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Items marked (A) in the table above represent shares of our
common stock that a director elected to receive in lieu of cash
payment for director compensation in 2010. Items marked
(B) in the table above represent the annual equity grant
amount received as director compensation for 2010. For
additional information on these components of director
compensation, see the Narrative to the Director Compensation
Table below.
The grant date fair value is the value of Stock Awards granted
in 2010, disregarding that we recognize the value of the awards
for financial reporting purposes over the service period of the
awards.
45
Narrative
to the Director Compensation Table
For 2010, the Compensation Committee used as a reference tool
the compensation recommendations for directors that had been
developed for 2010 by FPL Associates Compensation, an
independent compensation consultant. For 2010, the Compensation
Committee had engaged FPL to assist the Compensation Committee
in determining appropriate fiscal year 2010 compensation for our
directors. FPL made recommendations to the Compensation
Committee of appropriate levels and components of compensation
for our directors, based upon a study of a competitive peer
group of 11 public companies that compete with us for talent,
investment dollars
and/or
business. That peer group included primarily companies that are
focused on operating within the public consumer/leisure sector
as the foundation for our compensation practices. Those peer
group companies are ones considered to appeal to family-based,
consumer leisure activities, including resorts/timeshares,
gaming/entertainment and amusement parks. The peer group
consisted of the following companies:
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Cedar Fair, L.P.
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Silverleaf Resorts, Inc.
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Gaylord Entertainment Company, Inc.
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Six Flags, Inc.
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LaSalle Hotel Properties, Inc.
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Steiner Leisure Limited
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The Marcus Corporation
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Strategic Hotels & Resorts, Inc.
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Red Lion Hotels Corporation
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Vail Resorts, Inc.
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Royal Caribbean Cruises, Ltd.
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Utilizing this process and benchmarking data supplied by FPL,
the Compensation Committee approved director compensation for
2010 as follows:
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Each of our non-employee directors received an annual retainer
fee of $47,250 (increased to $49,612 as of June 7,
2010) for services as a director. Also, our chairman
received an additional annual fee of $25,000.
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The chair of the audit committee received an additional annual
fee of $17,500, and the chair of each other committee received
an additional annual fee of $7,500.
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Each member of the audit committee other than the chair received
an additional annual fee of $12,500, and each member of each
other committee other than the chairs received an additional
annual fee of $3,750.
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Directors who are employees of our company or our subsidiaries
did not receive compensation for their services as directors.
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Each independent director who is initially elected to our Board
of Directors received 2,500 nonvested shares of our common
stock. The shares granted to new independent directors vest in
thirds over a three-year period, beginning on the first
anniversary of the date of the grant of the shares, subject to
accelerated vesting only upon a change of control or if the
director is removed from or is not nominated to stand for
reelection to the Board of Directors.
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Independent directors received an equity amount of $55,650 in
shares of our restricted common stock on June 8, 2010, the
date of our 2010 annual meeting of our stockholders. These
shares granted to independent directors vest in thirds over a
three-year period, beginning on the first anniversary of the
date of the grant of the shares, subject to accelerated vesting
only upon a change of control or if the director is removed from
or is not nominated to stand for reelection to the Board of
Directors.
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Also, as an incentive to increase our directors ownership
of our common stock, in 2010 we offered our directors the
opportunity to take some or all of the cash portion of their
director compensation in shares of our common stock in lieu of
cash. Shares issued under this
shares-in-lieu-of-cash
option are 100% vested when issued. If a director elected to
receive shares of our common stock in lieu of cash, he or she
received shares having a market value equal to 125% of the cash
they would have otherwise received. For example, if a
directors cash compensation amount would have been $10,000
and they elected this
shares-in-lieu-of-cash
option for the entire amount of their cash compensation, he or
she would receive $12,500 of shares.
We reimburse directors for travel expenses to our board meetings
and other
out-of-pocket
expenses they incur when attending meetings or conducting their
duties as directors of our company.
46
2010
Stock Option Cancellations
In 2010, we entered into stock option cancellation agreements
with our directors, pursuant to which these individuals
surrendered and cancelled certain previously granted stock
options to purchase shares of our common stock in order to make
additional shares available under our 2004 Incentive Stock Plan
for future equity grants to our personnel. Pursuant to the terms
of the cancellation agreements, we and each of these individuals
acknowledged and agreed that the surrender and cancellation of
the cancelled options was without any expectation to receive,
and was without any obligation on our part to pay or grant, any
cash, equity awards or other consideration presently or in the
future in regard to the cancellation of the cancelled options.
The cancelled options that were surrendered had exercise prices
that ranged from $13.18 to $21.80 per share. The aggregate
number of shares underlying the cancelled options held by each
of our directors surrendering the cancelled options was as
follows:
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Shares Underlying Cancelled
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Options
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Name
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(#)
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Mr. Vittoria
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7,500
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Mr. Blutinger
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12,500
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Mr. Churchey
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12,500
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Mr. Rensi
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7,500
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Mr. Silver
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12,500
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COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION ON
COMPENSATION DECISIONS
In 2010 the Compensation committee was comprised of
Messrs. Rensi, Silver and Vittoria. No member of the
Compensation Committee was at any time during fiscal 2010 or at
any other time an officer or employee of the company, while
serving on the Committee. No member had any relationship with
the company requiring disclosure as a related-party transaction
in the section Certain Relationships and Related
Transactions. In addition, no executive officer of the
company has served on the Board of Directors or Compensation
Committee of another entity that has or has had one or more
executive officers who served as a member of the Board of
Directors or the Compensation Committee during fiscal 2010.
REPORT OF
THE AUDIT COMMITTEE
Our Audit Committees primary function is to assist the
Board of Directors in fulfilling certain of the Boards
oversight responsibilities to our stockholders by reviewing the
financial reports and other financial information provided by
our company to any governmental body (including the SEC) or the
public; our companys internal control systems regarding
finance, accounting, legal compliance and ethics that management
and the Board of Directors have established; and our
companys auditing, accounting and financial reporting
processes in general. Our Audit Committee is entirely composed
of directors who meet the SECs and NASDAQs
independence and experience requirements for audit committee
membership.
We have met with our independent auditors and management to
discuss the respective duties and responsibilities set forth
under our Audit Committees charter.
Management is primarily responsible for the financial statements
and the reporting process, including our companys system
of internal control over financial reporting. The companys
independent auditors are responsible for performing an
independent audit of our financial statements in conformity with
generally accepted accounting principles and are ultimately
accountable to our committee and to the Board of Directors.
Our Audit Committee has reviewed the audited financial
statements in our companys Annual Report on
Form 10-K
for 2010 with management, including discussion of the quality of
the accounting principles, the reasonableness of significant
judgments, and the clarity of financial statement disclosures,
and we have reviewed and discussed these financial statements
with the independent auditors.
47
We have also reviewed with the independent auditors their
judgments as to the quality of our companys accounting
principles and such other matters as are required to be
discussed with our committee under generally accepted auditing
standards. In addition, our committee has discussed with the
independent auditors the matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with
Audit Committees). Our committee has also received the written
disclosures and the letter from our independent auditors
required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and we have
discussed with the independent auditors all significant
relationships they have with our company to ensure their
independence from our company.
We relied on the reviews and discussions referred to above.
Based on this reliance, we have recommended to the Board of
Directors, and the Board of Directors has approved, that the
audited financial statements be included in our companys
Annual Report on
Form 10-K
for the year ended December 31, 2010 filed with the SEC.
Our Audit Committee:
Howard Silver (Chairman)
Randy Churchey
Joseph Vittoria
April 15, 2011
The Compensation Committee and Audit Committee reports
included in this proxy statement shall not be deemed
incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent we specifically incorporate this
information by reference, and shall not otherwise be deemed
filed under such Acts.
RELATIONSHIP
WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Grant Thornton, LLP served as our registered independent public
accountants and auditors in 2010 and will continue to serve as
our auditors for our fiscal year ending December 31, 2010,
unless this is changed by action of our Audit Committee.
Fees
During the years ended 2010 and 2009, we retained Grant Thornton
to provide services in the following categories and amounts:
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Fees Billed
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Grant Thornton
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2010
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2009
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Audit fees
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$
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362,072
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(1)
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$
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409,071
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(1)
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Audit-related fees
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$
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$
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3,350
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(2)
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Tax fees
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$
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$
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All other fees
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$
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85,200
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(3)
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$
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52,500
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(3)
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Total Fees
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$
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447,272
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$
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464,921
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(1) |
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Amount consists of (a) $294,072 and $346,071 for the audit
of our financial statements for the year ended December 31,
2010 and 2009, respectively and (b) $68,000 and $63,000 for
quarterly reviews of our financial statements for the years
ended December 31, 2010 and 2009. |
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(2) |
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Amount relates to supplemental schedules and review of our proxy
for the year ended December 31, 2008. |
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(3) |
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Amount relates to review of
8-Ks, actual
and proposed SEC filings and SEC comment letters. |
Our Audit Committee has adopted procedures for pre-approving all
audit and non-audit services provided by the independent
auditors. Unless a type of service to be provided by the
independent auditors has received general pre-approval, it will
require specific pre-approval by our Audit Committee. Any
proposed services exceeding pre-approved cost levels also will
require specific pre-approval by our Audit Committee.
48
Our Audit Committees pre-approval procedures include
reviewing a budget for audit and permitted non-audit services.
The budget includes a description of, and a budgeted amount for,
particular categories of audit and non-audit services that are
recurring in nature and therefore anticipated at the time the
budget is submitted. For pre-approval, our Audit Committee
considers whether these services are consistent with the
SECs rules on auditor independence. Our Audit Committee
may delegate pre-approval authority to the chairman of our Audit
Committee. All audit fees, audit-related fees, tax fees and
other fees listed above were approved by the Audit Committee.
Our Audit Committee has designated the Chief Financial Officer
to monitor the performance of the services provided by the
independent auditors and to determine whether these services are
in compliance with the pre-approval policy.
OTHER
MATTERS
Annual
Report on
Form 10-K
The Company has filed an Annual Report on
Form 10-K
with the Securities and Exchange Commission for the year ended
December 31, 2010. Pursuant to the rules of the Securities
and Exchange Commission, services that deliver the
Companys communications to stockholders who hold their
shares through a bank, broker or other holder of record may
deliver to multiple stockholders sharing the same address a
single copy of the Companys 2010 Annual Report on
Form 10-K
and this proxy statement. Upon written or oral request, the
Company will promptly deliver a separate copy of the
Companys 2010 Annual Report on
Form 10-K
and/or this
proxy statement to any stockholder at a shared address to which
a single copy of each document was delivered. Stockholders may
notify the Company of their requests by writing or calling Great
Wolf Resorts, Inc., Attention: Investor Relations, 525 Junction
Road, Madison, Wisconsin 53717, telephone
(608) 662-4700.
Our Board of Directors currently does not intend to bring before
our annual meeting any matter other than the election of
directors and the ratification of the appointment of our
auditors, as specified in the notice to stockholders, and our
Board of Directors has no knowledge of any other matters to be
brought before our annual meeting. If any other matters
requiring a vote of our stockholders are properly brought before
our annual meeting, the enclosed proxies will be voted on such
matters in accordance with the judgment of the persons named as
proxies in those proxies, or their substitutes, present and
acting at the meeting.
We will provide to each record holder or beneficial owner of
our common stock entitled to vote at our annual meeting, on
written request to James A. Calder, our CFO and Corporate
Secretary, at 525 Junction Road, Suite 6000 South, Madison,
Wisconsin 53717, telephone
(608) 662-4700,
a copy of our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010, including the
financial statements and financial statement schedules filed
with the SEC.
Copies of our Securities Exchange Act reports and filings are
available by hyperlink on our Web site, at greatwolf.com. Paper
copies of such reports and filings are also available, free of
charge, upon request to our Secretary at our address provided in
the preceding paragraph.
Stockholder
Proposals for Our 2012 Proxy Materials or Annual
Meeting
To be considered timely for inclusion in next years proxy
statement, stockholder proposals must be received at our
executive offices no later than the close of business on
February 6, 2012. Proposals should be addressed
c/o Great
Wolf Resorts, Inc., 525 Junction Road, Suite 6000 South,
Madison, Wisconsin 53717 Attn: Corporate Secretary. We will
determine whether we will oppose inclusion of any proposal in
our proxy statement and form of proxy on a
case-by-case
basis in accordance with our judgment and the regulations
governing the solicitation of proxies and other relevant
regulations of the SEC. We will not consider proposals received
after February 6, 2012 for inclusion in our proxy materials.
For any proposal that is not intended to be included in our
proxy materials, but is instead sought to be presented directly
at our 2012 Annual Meeting, our Amended and Restated Bylaws
require that such proposal be received at our executive offices
located at the address listed above no later than the close of
business on February 6, 2012.
49
In order for a stockholder to nominate a candidate for Director,
timely notice of the nomination must be received by the company
in advance of the meeting. Ordinarily, such notice must be
received not less than 120 days before the first
anniversary of the date of the companys the last annual
meeting (that is, February 6, 2012 for the 2012 Annual
Meeting of stockholders).
BY ORDER OF THE BOARD OF DIRECTORS:
JAMES A. CALDER, Secretary
April 20, 2011
50
REVOCABLE PROXY
GREAT WOLF RESORTS, INC.,
ANNUAL MEETING OF SHAREHOLDERS
June 6, 2011
4:00 p.m.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The shareholder of record hereby appoints Alexander P.
Lombardo and James A. Calder and
either of them, with full power of substitution, as Proxies for the shareholder, to attend the
Annual Meeting of the Shareholders of Great Wolf Resorts, Inc. (the Company), to be held at the
Hilton Chicago OHare, 10000 W. OHare, Chicago, IL 60666 on Monday, June 6, 2011 at 4:00
p.m., local time, and any adjournments thereof, and to vote all shares of the common stock of the
Company that the shareholder is entitled to vote upon each of the matters referred to in this
Proxy and, at their discretion, upon such other matters as may properly come before this meeting.
This Proxy, when properly executed, will be voted in the manner directed herein by the
shareholder of record. If no direction is made, this Proxy will be voted FOR Proposals 1, 2 and 3
and ONE YEAR for Proposal 4.
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR PROVIDE YOUR INSTRUCTIONS TO VOTE VIA
THE INTERNET OR BY TELEPHONE.
(Continued, and to be marked, dated and signed, on the other side)
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FOLD AND DETACH HERE
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GREAT WOLF RESORTS, INC. ANNUAL MEETING, JUNE 6, 2011
YOUR VOTE IS IMPORTANT!
Proxy Materials are available on-line at:
http://www.cfpproxy.com/6676
You can vote in one of three ways:
1. |
|
Call toll free 1-888-216-1316 on a Touch-Tone Phone. There is NO CHARGE to you for this
call. |
or
2. |
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Via the Internet at https://www.proxyvotenow.com/wolf and follow the instructions. |
or
3. |
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Mark, sign and date your proxy card and return it promptly in the enclosed envelope. |
PLEASE SEE REVERSE SIDE FOR VOTING INSTRUCTIONS
6676
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PLEASE MARK VOTES
AS IN THIS EXAMPLE
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REVOCABLE PROXY
GREAT WOLF RESORTS, INC.
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Annual
Meeting of Shareholders JUNE 6, 2011
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Except |
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Election of Directors
Nominees: |
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(01) Elan J. Blutinger |
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(02) Randy L. Churchey |
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(03) Edward H. Rensi |
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(04) Kimberly K. Schaefer |
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(05) Howard A. Silver |
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(06) Joseph V. Vittoria |
INSTRUCTION: To withhold authority to vote for any nominee(s), mark For All Except and write that nominee(s) name(s) or number(s) in the space provided below.
The Board of Directors recommends a vote FOR all the nominees listed.
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Please be sure to date and
sign this proxy card in the box
below. |
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Date |
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Sign above |
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Co-holder (if any) sign above |
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2. Ratification of Grant Thornton LLP as the companys independent auditors for the fiscal year ending December 31, 2011.
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3. Approve, on a non-binding advisory basis, a resolution approving executive compensation.
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One Year |
Two Years |
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4. Select, on a non-binding advisory basis, the frequency of stockholder votes on executive compensation.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, AND 3 AND
FOR A ONE YEAR FREQUENCY ON PROPOSAL 4.
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This Proxy, when properly executed, will be voted in the manner directed herein by the shareholder of record. If no direction is made, this Proxy will be voted FOR Proposals 1, 2 and 3 and for ONE YEAR for Proposal 4.
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Any such matters as may properly come before the meeting, or any adjournments thereof.
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Mark here if you plan to attend the meeting |
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Mark here for address change and note change |
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Note: Please sign exactly as your name appears on this Proxy. If signing for estates, trusts, corporations or partnerships, title or capacity should be stated.
If shares are held jointly, each holder should sign.
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IF YOU WISH TO PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR INTERNET, PLEASE READ THE INSTRUCTIONS BELOW |
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FOLD AND DETACH HERE IF YOU ARE VOTING BY MAIL
PROXY VOTING INSTRUCTIONS
Shareholders of record have three ways to vote:
1. By Mail; or
2. By Telephone (using a Touch-Tone Phone); or
3. By Internet.
A telephone or Internet vote authorizes the named proxies to vote your shares in the same manner as
if you marked, signed, dated and returned this proxy. Please note telephone and Internet votes must
be cast prior to 3 a.m., June 6, 2011. It is not necessary to return this proxy if
you vote by telephone or Internet.
Vote by Telephone
Call Toll-Free on a Touch-Tone Phone anytime prior to 3 a.m., June 6, 2011.
1-888-216-1316
Vote by Internet
anytime prior to
3 a.m., June 6, 2011 go to
https://www.proxyvotenow.com/wolf
Please note that the last vote received, whether by telephone, internet or by mail, will be the
vote counted.
http://www.cfpproxy.com/6676
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PLEASE MARK VOTES
AS IN THIS EXAMPLE
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REVOCABLE PROXY
GREAT WOLF RESORTS, INC.
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ANNUAL MEETING OF
SHAREHOLDERS JUNE 6, 2011
The shareholder of record hereby appoints Alexander P. Lombardo and James A.
Calder and either of them, with full power of substitution,
as Proxies for the shareholder, to attend the Annual Meeting of the Shareholders of Great
Wolf Resorts, Inc. (the Company), to be held at the Hilton Chicago OHare, 10000 W. OHare, Chicago, IL 60666 on Monday, June 6, 2011 at 4:00 p.m., local time, and any adjournments thereof,
and to vote all shares of the common stock of the Company that the shareholder is entitled to vote upon each
of the matters referred to in this Proxy and, at their discretion, upon such other matters as may
properly come before this meeting.
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Please be sure to date and
sign this proxy card in the box
below.
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Date |
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Sign above |
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Co-holder (if any) sign above |
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1. Election of Directors
Nominees:
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Elan J. Blutinger |
Randy L. Churchey |
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Edward H. Rensi |
Kimberly K. Schaefer |
Howard A. Silver |
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Joseph V. Vittoria |
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INSTRUCTION: To withhold authority to vote for any individual nominee, mark
For All Except and write that nominees name in the space provided below. |
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2. Ratification of Grant
Thornton LLP as the companys independent auditors for the fiscal year ending December 31, 2011.
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3. Approve, on a non-binding advisory basis, a resolution approving executive compensation.
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4. Select, on a non-binding advisory basis, the frequency of stockholder votes on executive compensation.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, AND 3 AND FOR A ONE YEAR FREQUENCY ON PROPOSAL 4.
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This Proxy, when properly executed, will be voted in the manner directed herein by the shareholder of record. If no direction is made, this Proxy will be voted FOR Proposals 1, 2 and 3 and for ONE YEAR for Proposal 4.
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Any such matters as may properly come before the meeting, or any adjournments thereof.
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
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PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING. |
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Detach
above card, sign, date and mail in postage paid envelope
provided.
GREAT WOLF RESORTS, INC.
PLEASE ACT PROMPTLY
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
Please sign exactly as your name appears on this card. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE
PROVIDED BELOW AND
RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
PROXY MATERIALS ARE
AVAILABLE ON-LINE AT:
http://www.cfpproxy.com/6676