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o | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11 |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
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o | Fee paid previously with preliminary materials |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) | Amount Previously Paid: |
2) | Form, Schedule or Registration Statement No.: |
3) | Filing Party: |
4) | Date Filed: |
1. | To elect |
2. | To ratify the appointment of Crowe Horwath LLP as our independent registered public accounting firm for fiscal year |
3. | To consider and transact such other business as may properly come before the meeting or any adjournment or postponement thereof. |
By Order of the Board of Directors, | |
/s/ Andy L. Nemeth | |
Andy L. Nemeth | |
Secretary | |
April |
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Registered Public Accounting Firm | |
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Audit Committee Report | 6 |
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Appendix A– Audit Committee Charter |
The Board of Directors unanimously recommends a vote FOR the nominated directors. |
The Board of Directors unanimously recommends a vote FOR approval of the ratification of the appointment of Crowe Horwath LLP as our independent registered public accounting firm for the fiscal year ending December 31, |
2010 | 2009 | 2011 | 2010 | |||||||||||||
Audit Fees (1) | $ | 199,500 | $ | 214,900 | $ | 219,700 | $ | 199,500 | ||||||||
Audit-Related Fees | - | - | - | |||||||||||||
Tax Fees (2) | 48,000 | 24,000 | 34,700 | 48,000 | ||||||||||||
All Other Fees | - | - | - | - | ||||||||||||
Total Fees | $ | 247,500 | $ | 238,900 | $ | 254,400 | $ | 247,500 |
(1) | Audit fees consist of fees for professional services rendered for the audit of our financial statements and review of financial statements included in our quarterly reports and services normally provided by the independent auditor in connection with statutory and regulatory filings or engagements. In addition, audit fees include the reviews of various SEC filings. |
(2) | Tax fees consist of the preparation and/or review of Federal and State tax returns, assistance with preparation of tax inquiries, primarily from state and local tax authorities, enterprise zone property tax filings, and preparation and review of employee benefit plan filings. Tax fees in |
The Audit Committee: |
Keith V. Kankel (Chairman) |
Terrence D. Brennan |
John A. Forbes |
Larry D. Renbarger |
Walter E. Wells |
Name and Address of Beneficial Owner | Aggregate Number of Shares of Common Stock Beneficially Owned | Percent of Class | ||||||
Five Percent Shareholders: | ||||||||
Jeffrey L. Gendell c/o Tontine Capital Management, L.L.C. 55 Railroad Avenue Greenwich, CT 06830 | 5,299,963 | (1)(2) | 51.0 | % | ||||
Wells Fargo and Company 420 Montgomery Street San Francisco, CA 94104 | 670,015 | (3) | 6.4 | % | ||||
Directors: | ||||||||
Paul E. Hassler | 51,005 | * | ||||||
Walter E. Wells | 35,500 | * | ||||||
Keith V. Kankel | 34,186 | * | ||||||
Larry D. Renbarger | 32,000 | * | ||||||
Terrence D. Brennan | 20,500 | * | ||||||
Joseph M. Cerulli (4) | 10,500 | * | ||||||
John A. Forbes | 3,816 | * | ||||||
Named Executive Officers: | ||||||||
Todd M. Cleveland (5) | 544,205 | 5.2 | % | |||||
Andy L. Nemeth (6) | 201,388 | 1.9 | % | |||||
Jeffrey M. Rodino | 68,300 | * | ||||||
All Directors, Named Executive Officers and other officers as a group (12 persons) | 1,130,168 | 10.6 | % |
Name and Address of Beneficial Owner | Aggregate Number of Shares of Common Stock Beneficially Owned | Percent of Class | ||||||
Five Percent Shareholders: | ||||||||
Jeffrey L. Gendell c/o Tontine Capital Management, L.L.C. 55 Railroad Avenue, 1st Floor Greenwich, CT 06830 | 5,174,963 | (1)(2) | 54.7 | % | ||||
Wells Fargo and Company | ||||||||
420 Montgomery Street San Francisco, CA 94104 | 573,524 | (3) | 6.1 | % | ||||
Directors: | ||||||||
Paul E. Hassler | 47,505 | * | ||||||
Keith V. Kankel | 39,686 | * | ||||||
Larry D. Renbarger | 39,500 | * | ||||||
Terrence D. Brennan | 32,000 | * | ||||||
Walter E. Wells | 32,000 | * | ||||||
Joseph M. Cerulli (4) | 7,000 | * | ||||||
Named Executive Officers: | ||||||||
Todd M. Cleveland (5) | 422,391 | 4.4 | % | |||||
Andy L. Nemeth (6) | 170,838 | 1.8 | % | |||||
Jeffrey M. Rodino | 47,300 | * | ||||||
Doyle K. Stump (7) | 92,610 | * | ||||||
Darin R. Schaeffer (8) | 20,610 | * | ||||||
All Directors and Executive Officers as a group (13 persons) | 1,069,283 | 11.0 | % |
(1) | Information based on the Schedule 13D/A filed jointly by Tontine Capital Management, L.L.C. (“TCM”), Tontine Capital Partners, L.P. (“TCP”), Tontine Capital Overseas Master Fund, L.P. (“TMF”), Tontine Capital Overseas Master Fund II, L.P. (“TCP 2”), Tontine Capital Overseas GP, L.L.C. (“TCO”), Tontine Asset Associates, L.L.C. (“TAA”) and Jeffrey L. Gendell on |
(2) | Based on information contained in a Schedule 13D/A filed by Tontine on April 6, |
(3) | Information based on the Schedule 13G/A filed by Wells Fargo and Company on January |
(4) | Mr. Cerulli is employed by an affiliate of Tontine. He disclaims beneficial ownership of the shares beneficially owned by Tontine, except to the extent of his pecuniary interest therein. |
(5) | Includes |
(6) | Includes |
Patrick Industries, Inc. Attn: Andy L. Nemeth, Secretary 107 West Franklin Street P.O. Box 638 Elkhart, Indiana 46515-0638 |
· | Breadth of knowledge about issues affecting the Company and the industries/markets in which it operates; |
· | Significant experience in leadership positions or at senior policy-making levels and an established reputation in the business community; |
· | Expertise in key areas of corporate management and in strategic planning; |
· | Financial literacy and financial and accounting expertise; and |
· | Independence and a willingness to devote sufficient time to carry out his or her duties and responsibilities effectively and assume broad fiduciary responsibility. |
· | Reviewing and recommending to the independent members of the Board the overall compensation programs for the officers of the Company; |
· | Oversight authority to attract, develop, promote and retain qualified senior executive management; and |
· | Oversight authority for the stock-based compensation programs. |
· | To assist the Board in identifying, screening, and recommending qualified candidates to serve as directors; |
· | To recommend nominees to the Board to fill new positions or vacancies as they occur; |
· | To review and recommend to the Board the compensation of directors; |
· | To recommend to the Board candidates for election by shareholders at the annual meeting; and |
· | To review and monitor corporate governance compliance as well as recommend appropriate changes. |
COMPENSATION COMMITTEE | ||
INDEPENDENT COMMITTEE CONSULTANT |
CHIEF EXECUTIVE OFFICER and VICE PRESIDENT OF HUMAN RESOURCES |
· | NEOs’ and other |
· | The external market for comparable roles; |
· | The current and expected business climate; and |
· | The Company’s financial position and its reflection of operating results. |
1. | Commensurate revenue generation scope to the Company’s revenue profile |
2. | Market capitalization generally consistent with the Company’s market capitalization |
Industry/business type – industrial manufacturing and distribution firms with national footprints |
Geographically headquartered in the Mid-West markets |
Compensation and Benefits Components | Description and Purpose |
Base Salary | Cash payments |
Short-Term Incentives | Lump sum cash payments reflective of approved pay-for-performance plan and the relative achievements of the business and individual performance plans. The Board reserves the right at any time to award discretionary bonuses to senior management based on outstanding performance or other factors. |
Long-Term Incentives | Restricted stock grants |
Executive Health and Welfare Benefits | We do not have health and welfare benefits outside the scope of our standard plans for all employees. |
Voluntary Deferred Compensation Plan | Voluntary deferred compensation plan whereby highly compensated individuals |
Perquisites | Perquisites were not included in the |
Other Compensation | Other compensation includes automobile allowance, Company contributions pursuant to the Patrick Industries, Inc. 401(k) Plan, and Company contributions to individual Health Savings Accounts and health club reimbursement pursuant to the Company’s general health and wellness program. |
Executive Retirement Plan | Supplemental executive retirement program based on a formula of base wages, service and other criteria designed to retain key senior talent. |
Severance Benefits | We |
Name | 2009 Base Salary – 3/30/09 (1) | 2010 Base Salary – 1/4/10 | % Increase 1/04/10 | 2010 Base Salary – 1/4/10 | 2011 Base Salary – 2/28/11 | % Increase 2/28/11 | ||||||||||||||||||
Todd M. Cleveland | $ | 75,000 | $ | 275,000 | (2) | 266.7 | % | $ | 275,000 | $ | 300,000 | (1) | 9.1 | % | ||||||||||
Andy L. Nemeth | 120,000 | 215,000 | (2) | 79.2 | % | 215,000 | 225,000 | (2) | 4.7 | % | ||||||||||||||
Jeffrey M. Rodino | 110,000 | 150,000 | (4) | 36.4 | % | 150,000 | 170,000 | (3) | 13.3 | % | ||||||||||||||
Doyle K. Stump | 110,000 | 145,000 | (4) | 31.8 | % | |||||||||||||||||||
Darin R. Schaeffer (5) | 100,000 | 130,000 | (4) | 30.0 | % |
(1) | The |
(2) | The 2011 base salary for Mr. |
(3) |
The |
· |
· | Individual performance (50% weighting), which is measured by: |
1. | Financial objectives – Revenue and EBITDA targets (40% weighting within the individual performance objectives); |
2. | Strategic objectives – Actions and initiatives linked to the Company’s organizational strategic agenda for the plan year (30% weighting within the individual performance objectives); |
3. | Leadership and talent objectives – Actions and initiatives linked to the development of our talent, leadership, capabilities and our values (30% weighting within the individual performance objectives). |
STI Award Component | Threshold Performance | Target Performance | Maximum Performance |
Company Rating (EBITDA) | 2.0 ($10.6MM) | 3.0 ($13.2MM) | 5.0 ($15.8MM) |
Individual Rating | 2.5 | 3.0 | 5.0 |
· | Threshold individual and Company performance – 41.7% |
· | Target individual and Company performance - 100% |
· | Maximum individual and Company performance - 250%. |
Name | 2010 Base Salary | Target Award as a % of Base Salary (1) | Target STI Award | Actual Award Amount as a % of Target Award | 2010 STI Award | 2011 Base Salary | Target Award as a % of Base Salary (1) | Target STI Award | Actual Award Amount as a % of Target Award | Actual 2011 STI Award Payout | ||||||||||||||||||||||||||||||
Todd M. Cleveland | $ | 275,000 | 85 | % | $ | 233,750 | 113.3 | % | $ | 264,917 | $ | 300,000 | 100% | $ | 300,000 | 210.0% | $ | 630,000 | ||||||||||||||||||||||
Andy L. Nemeth | 215,000 | 60 | % | 129,000 | 110.5 | % | 142,545 | 225,000 | 60% | 135,000 | 200.0% | 270,000 | ||||||||||||||||||||||||||||
Jeffrey M. Rodino | 150,000 | 65 | % | 97,500 | 107.7 | % | 104,975 | 170,000 | 75% | 127,500 | 205.0% | 261,380 | ||||||||||||||||||||||||||||
Doyle K. Stump | 145,000 | 55 | % | 79,750 | 90.7 | % | 72,307 | |||||||||||||||||||||||||||||||||
Darin R. Schaeffer | 130,000 | N/A | N/A | N/A | N/A |
(1) | The target award as a percentage of base salary for the NEOs |
Base Salary ($) | Target Award as a % of Base Salary | Target Award ($) | Restricted Share Target Award - 2/3 of total award ($/shares) | Performance- Contingent Cash Target Award - 1/3 of total award ($) | |||||||||
$120,000 | 30% | $36,000 | $24,000/9,600 | $12,000 |
· | Time-Based Shares – 20% of the shares comprising the restricted share award are Time-Based Shares with a three year cliff vesting period. (Example: if 9,600 restricted shares are awarded, 1,920 shares are Time-Based Shares.) |
· | Performance-Contingent Shares – 80% of the shares comprising the restricted share award are Performance-Contingent Shares; award vesting is contingent upon the Company’s cumulative EBITDA performance versus target EBITDA over a three-year measurement period. (Example: if 9,600 shares are awarded, 7,680 shares are Performance-Contingent Shares.) |
2. | Performance-Contingent Cash Award – one-third of the value of the total target award; award vesting is contingent upon the Company’s cumulative EBITDA performance versus target EBITDA over a three-year measurement period. |
Plan Component | Threshold EBITDA Performance (1) ($52.0MM - 2.0 Rating) Payout as % of target | Target EBITDA Performance (1) ($69.3MM – 3.0 Rating) Payout as % of target | Maximum EBITDA Performance (1) ($83.2MM - 5.0 Rating) Payout as % of target |
Time-Based Shares | 100% | 100% | 100% |
Performance-Contingent Shares | 50% | 100% | 100% |
Performance-Contingent Cash | 50% | 100% | 150% |
(1) | The Company EBITDA performance is measured as the cumulative EBITDA achieved in 2011, 2012 and 2013. |
Name | Total Target Award as a % of Base Salary | Total Target Award ($) | Time-Based Share Award ($/Shares) | Performance- Contingent Share Award ($/ Shares) | Performance- Contingent Cash Award ($) | |||||||||||||||
Todd M. Cleveland | 95% | $ | 285,000 | $ | 37,500/15,000 | $ | 150,000/60,000 | $ | 97,500 | |||||||||||
Andy L. Nemeth | 40% | $ | 90,000 | $ | 12,000/4,800 | $ | 48,000/19,200 | $ | 30,000 | |||||||||||
Jeffrey M. Rodino | 40% | $ | 68,000 | $ | 9,000/3,600 | $ | 36,000/14,400 | $ | 23,000 |
Name | Threshold EBITDA Performance ($52.0MM - 2.0 Rating) Component Award ($) | Target EBITDA Performance ($69.3MM – 3.0 Rating) Component Award ($) | Maximum EBITDA Performance ($83.2MM - 5.0 Rating) Component Award ($) | |||||||||
Time-Based Shares (1) | ||||||||||||
Todd M. Cleveland | $ | 37,500 | $ | 37,500 | $ | 37,500 | ||||||
Andy L. Nemeth | 12,000 | 12,000 | 12,000 | |||||||||
Jeffrey M. Rodino | 9,000 | 9,000 | 9,000 | |||||||||
Performance-Contingent Shares (1) | ||||||||||||
Todd M. Cleveland | $ | 75,000 | $ | 150,000 | $ | 150,000 | ||||||
Andy L. Nemeth | 24,000 | 48,000 | 48,000 | |||||||||
Jeffrey M. Rodino | 18,000 | 36,000 | 36,000 | |||||||||
Performance-Contingent Cash | ||||||||||||
Todd M. Cleveland | $ | 48,750 | $ | 97,500 | $ | 146,250 | ||||||
Andy L. Nemeth | 15,000 | 30,000 | 45,000 | |||||||||
Jeffrey M. Rodino | 11,500 | 23,000 | 34,500 |
The dollar values for the threshold, target and maximum payouts for the Time-Based Shares and Performance-Contingent Shares are based on the Board-established share price of |
Name | Threshold Performance- Contingent Cash: Equivalent Shares/Maximum $ Appreciation (1) | Target Performance-Contingent Cash: Equivalent Shares/Maximum $ Appreciation (2) | Maximum Performance- Contingent Cash: Equivalent Shares/Maximum $ Appreciation (3) |
Todd M. Cleveland | 39,000/$97,500 | 39,000/$48,750 | |
Andy L. Nemeth | 12,000/$30,000 | 12,000/$15,000 | |
Jeffrey M. Rodino | |||
(1) |
(2) | Requires a stock price of $5.00 per share (appreciation of $2.50 per share) to earn the |
(3) | Requires a stock price of $3.75 per share (appreciation of $1.25 per share) to earn the |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation ($)(6) | Total ($) | ||||||||||||||||||||||
Todd M. Cleveland, | 2010 | $ | 266,250 | $ | - | $ | 88,000 | $ | 13,875 | $ | 264,917 | $ | 7,820 | $ | 640,862 | |||||||||||||||
President and Chief | 2009 | 87,750 | - | 24,150 | 11,063 | - | 93 | 123,056 | ||||||||||||||||||||||
Executive Officer | 2008 | 260,730 | - | 38,335 | - | - | 10,819 | 309,884 | ||||||||||||||||||||||
Andy L. Nemeth, | 2010 | 211,347 | - | 60,500 | 8,094 | 142,545 | 23,832 | 446,318 | ||||||||||||||||||||||
Executive Vice President of Finance, | 2009 | 159,411 | - | 17,250 | 6,453 | - | 12,559 | 195,673 | ||||||||||||||||||||||
Secretary-Treasurer, and Chief Financial Officer | 2008 | 212,659 | - | 38,335 | 12,905 | - | 29,965 | 293,864 | ||||||||||||||||||||||
Jeffrey M. Rodino, Vice President Sales, Midwest (7) | 2010 | 144,462 | - | 49,500 | - | 104,975 | 11,907 | 310,844 | ||||||||||||||||||||||
Doyle K. Stump, | 2010 | 142,404 | - | 41,250 | 6,013 | 72,307 | 11,839 | 273,813 | ||||||||||||||||||||||
Vice President, Operations (8) | 2009 | 112,298 | - | 13,800 | 4,794 | - | 10,500 | 141,392 | ||||||||||||||||||||||
Darin R. Schaeffer, | 2010 | 90,897 | - | - | 625 | - | 46,727 | 138,249 | ||||||||||||||||||||||
Vice President, | 2009 | 106,460 | - | - | 1,475 | - | (2,458 | ) | 105,477 | |||||||||||||||||||||
Corporate Controller, and Principal Accounting Officer (9) | 2008 | 147,712 | - | 14,224 | - | - | 3,266 | 165,202 |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation ($)(6) | Total ($) | |||||||||||||||||||||||||
Todd M. Cleveland, | 2011 | $ | 288,654 | $ | - | $ | 152,250 | $ | 14,438 | $ | 630,000 | $ | 13,459 | $ | 1,098,801 | ||||||||||||||||||
President and Chief | 2010 | 266,250 | - | 88,000 | 13,875 | 264,917 | 7,820 | 640,862 | |||||||||||||||||||||||||
Executive Officer | 2009 | 87,750 | - | 24,150 | 11,063 | - | 93 | 123,056 | |||||||||||||||||||||||||
Andy L. Nemeth, | 2011 | 222,212 | - | 48,720 | 8,422 | 270,000 | 24,693 | 574,047 | |||||||||||||||||||||||||
Executive Vice | 2010 | 211,347 | - | 60,500 | 8,094 | 142,545 | 23,832 | 446,318 | |||||||||||||||||||||||||
President of Finance, Secretary-Treasurer, and Chief Financial Officer | 2009 | 159,411 | - | 17,250 | 6,453 | - | 12,559 | 195,673 | |||||||||||||||||||||||||
Jeffrey M. Rodino, | 2011 | 160,078 | - | 36,540 | - | 261,380 | 12,358 | 470,356 | |||||||||||||||||||||||||
Executive Vice President of Sales and Operations (7) | 2010 | 144,462 | - | 49,500 | - | 104,975 | 11,907 | 310,844 |
(1) | For information on base salaries, |
(2) | The NEOs |
(3) | Amounts shown do not reflect compensation actually received. Such amounts reflect the aggregate fair value of stock awards granted during the year which is generally the total amount that the Company expects, as of the grant date, to expense in its financial statements over the awards vesting schedule in accordance with Accounting Standards Codification (“ASC”) 718 Compensation – Stock Compensation. |
(4) | Amounts shown do not reflect compensation actually received. Such amounts reflect the aggregate fair value of stock options that have vested during the |
(5) | Amounts listed under the column “Non-Equity Incentive Plan Compensation” represent the short-term incentive awards earned in |
(6) | The amounts included in “All Other Compensation” are detailed in the table below: |
Name | Year | 401(k) Matching Contribution ($) | Payments Under Executive Retirement Plan ($) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings (a) ($) | Other (b)(c) (d) ($) | Total All Other Compensation ($) | ||||||||||||||||
Todd M. Cleveland | 2010 | $ | 600 | $ | - | $ | - | $ | 7,220 | S 7,820 | ||||||||||||
2009 | - | - | (5,844 | ) | 5,937 | 93 | ||||||||||||||||
2008 | - | - | 5,844 | 4,975 | 10,819 | |||||||||||||||||
Andy L. Nemeth | 2010 | 439 | - | 8,334 | 15,059 | 23,832 | ||||||||||||||||
2009 | - | - | (881 | ) | 13,440 | 12,559 | ||||||||||||||||
2008 | 577 | - | 15,948 | 13,440 | 29,965 | |||||||||||||||||
Jeffrey M. Rodino | 2010 | 388 | - | - | 11,519 | 11,907 | ||||||||||||||||
Doyle K. Stump | 2010 | 320 | - | - | 11,519 | 11,839 | ||||||||||||||||
2009 | - | - | - | 10,500 | 10,500 | |||||||||||||||||
Darin R. Schaeffer | 2010 | 408 | - | - | 46,319 | 46,727 | ||||||||||||||||
2009 | 58 | - | (3,116 | ) | 600 | (2,458 | ) | |||||||||||||||
2008 | 150 | - | 3,116 | - | 3,266 |
Name | Year | 401(k) Matching Contribution ($) | Payments Under Executive Retirement Plan ($) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings (a) ($) | Other (b) (c) ($) | Total All Other Compensation ($) | |||||||||||||||||
Todd M. Cleveland | 2011 2010 2009 | $ | 825 600 - | $ | - - - | $ | - - (5,844) | $ | 12,634 7,220 5,937 | $ | 13,459 7,820 93 | ||||||||||||
Andy L. Nemeth | 2011 2010 2009 | 586 439 - | - - - | 8,917 8,334 (881) | 15,190 15,059 13,440 | 24,693 23,832 12,559 | |||||||||||||||||
Jeffrey M. Rodino | 2011 2010 | 424 388 | - - | - - | 11,934 11,519 | 12,358 11,907 |
(a) | Amounts shown do not reflect compensation actually received. Such amounts reflect the aggregate change in the present value of the NEOs’ |
(b) | Amounts shown reflect an automobile allowance and the Company contribution to individual Health Savings Accounts and health club reimbursement pursuant to the Company’s general health and wellness program. |
(c) | Mr. Cleveland |
(7) | Mr. Rodino |
Estimated Payouts under Non-Equity Incentive Plan Awards (1) | All OtherStockAwards: Numberof Shares of Stock | All OtherOptionAwards:Number of Securities Underlying | Exercise or Base Price of Option Awards | Grant Date Fair Value of | ||||||||||||||||||||||||||||
Grant | Threshold | Target | Maximum | or Units | Options | ($) Per Share | Stock Awards | |||||||||||||||||||||||||
Name | Date | ($) | ($) | ($) | (#) (2) | (#) (3) | (4) | ($)(5) | ||||||||||||||||||||||||
Todd M. Cleveland | 5/20/2010 | 114,675 | 233,750 | 687,500 | 32,000 | - | 2.75 | 88,000 | ||||||||||||||||||||||||
Andy L. Nemeth | 5/20/2010 | 89,655 | 129,000 | 537,500 | 22,000 | - | 2.75 | 60,500 | ||||||||||||||||||||||||
Jeffrey M. Rodino | 5/20/2010 | 62,550 | 97,500 | 375,000 | 18,000 | - | 2.75 | 49,500 | ||||||||||||||||||||||||
Doyle K. Stump | 5/20/2010 | 60,465 | 79,750 | 362,500 | 15,000 | - | 2.75 | 41,250 | ||||||||||||||||||||||||
Darin R. Schaeffer | - | - | - | - | - | - | - | - |
Estimated Payouts under Non-Equity Incentive Plan Awards (1) | All Other Stock Awards: Number of Shares of Stock | All Other Option Awards: Number of Securities Underlying | Base Price of Stock Awards or Exercise Price of Option Awards | Grant Date Fair Value of | |||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | or Units (#) (2) | Options (#) (3) | ($) Per Share (4) | Stock Awards ($)(5) | |||||||||||||||||||||
Todd M. Cleveland | 3/01/11 | 125,100 | 300,000 | 750,000 | 75,000 | - | 2.03 | 152,250 | |||||||||||||||||||||
Andy L. Nemeth | 3/01/11 | 56,300 | 135,000 | 337,500 | 24,000 | - | 2.03 | 48,720 | |||||||||||||||||||||
Jeffrey M. Rodino | 3/01/11 | 53,170 | 127,500 | 318,750 | 18,000 | - | 2.03 | 36,540 |
(1) | The related performance targets and results are described in detail under “Non-Equity Incentive Plan Awards” and “Long-Term |
(2) | These shares represent the number of shares of restricted stock granted in fiscal |
(3) | There were no stock options granted in |
(4) | The base price of the stock awards is the closing price of the Company’s stock on the NASDAQ stock market on the grant date. |
(5) | The grant date fair value of the stock awards equals the number of shares granted in the stock awards |
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Unearned Shares or Units of Stock That Have Not Vested ($)(3) | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable (1) | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Unearned Shares or Units of Stock That Have Not Vested ($)(3) | ||||||||||||||||||||||||||||||||||||||
Todd M. Cleveland | 5/20/10 | - | - | - | - | 32,000 | 60,800 | 3/01/11 | - | - | - | - | 75,000 | 307,500 | ||||||||||||||||||||||||||||||||||||||
5/20/10 | - | - | - | - | 32,000 | 131,200 | ||||||||||||||||||||||||||||||||||||||||||||||
5/21/09 | - | - | - | - | 35,000 | 66,500 | 5/21/09 | - | - | - | - | 35,000 | 143,500 | |||||||||||||||||||||||||||||||||||||||
5/21/09 | 26,250 | 48,750 | 0.75 | 5/21/19 | - | - | 5/21/09 | 52,500 | 22,500 | 0.75 | 5/21/19 | - | - | |||||||||||||||||||||||||||||||||||||||
5/21/09 | 26,250 | 48,750 | 1.75 | 5/21/19 | - | - | 5/21/09 | 52,500 | 22,500 | 1.75 | 5/21/19 | - | - | |||||||||||||||||||||||||||||||||||||||
Andy L. Nemeth | 5/20/10 | - | - | - | - | 22,000 | 41,800 | 3/01/11 | - | - | - | - | 24,000 | 98.400 | ||||||||||||||||||||||||||||||||||||||
5/21/09 | - | - | - | - | 25,000 | 47,500 | 5/20/10 | - | - | - | - | 22,000 | 90,200 | |||||||||||||||||||||||||||||||||||||||
5/21/09 | 15,313 | 28,437 | 0.75 | 5/21/19 | - | - | 5/21/09 | - | - | - | - | 25,000 | 102,500 | |||||||||||||||||||||||||||||||||||||||
5/21/09 | 15,313 | 28,437 | 1.75 | 5/21/19 | - | - | 5/21/09 | 30,625 | 13,125 | 0.75 | 5/21/19 | - | - | |||||||||||||||||||||||||||||||||||||||
10/31/05 | 14,500 | - | 9.95 | 10/31/11 | - | - | 5/21/09 | 30,625 | 13,125 | 1.75 | 5/21/19 | - | - | |||||||||||||||||||||||||||||||||||||||
Jeffrey M. Rodino | 5/20/10 | - | - | - | - | 18,000 | 34,200 | 3/01/11 | - | - | - | - | 18,000 | 73,800 | ||||||||||||||||||||||||||||||||||||||
9/21/09 | - | - | - | - | 10,000 | 19,000 | 5/20/10 | - | - | - | - | 18,000 | 73,800 | |||||||||||||||||||||||||||||||||||||||
Doyle K. Stump | 5/20/10 | - | - | - | - | 15,000 | 28,500 | |||||||||||||||||||||||||||||||||||||||||||||
5/21/09 | - | - | - | - | 20,000 | 38,000 | 9/21/09 | - | - | - | - | 10,000 | 41,000 | |||||||||||||||||||||||||||||||||||||||
5/21/09 | 11,375 | 21,125 | 0.75 | 5/21/19 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
5/21/09 | 11,375 | 21,125 | 1.75 | 5/21/19 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Darin R. Schaeffer (4) | 5/21/09 | 3,500 | - | 0.75 | 5/21/19 | - | - | |||||||||||||||||||||||||||||||||||||||||||||
5/21/09 | 3,500 | - | 1.75 | 5/21/19 | - | - |
(1) |
(2) | Restricted share grants related to annual share awards, which were approved by the Board on March 1, 2011, May 20, 2010 and May 21, 2009, will fully vest on the third anniversary of the grant date or March 1, 2014, May 20, 2013 and May 21, 2012, respectively. Unvested restricted stock awards are subject to forfeiture if the NEO’s |
(3) | Based on a market price of |
(a) | (b) | (c) | (a) | (b) | (c) | |||||||||||||||||||
Plan Category | Number of securities to be issued upon exercise of outstanding options and rights | Weighted average exercise price of outstanding options and rights | Number of securities remaining for future issuance under equity compensation plans (excluding securities reflected in column (a)) | Number of securities to be issued upon exercise of outstanding options and rights | Weighted average exercise price of outstanding options and rights | Number of securities remaining for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||||||||||||
Equity compensation plans approved by security holders | 497,250 | $ | 1.61 | 716,377 | 452,500 | $ 1.27 | 573,877 | |||||||||||||||||
Equity compensation plans not approved by security holders | - | N/A | - | - | N/A | - | ||||||||||||||||||
Total | 497,250 | $ | 1.61 | 716,377 | 452,500 | $ 1.27 | 573,877 |
Name | Executive Contribution in Last FY ($) | Registrant Contributions in Last FY ($) (1) | Aggregate Earnings in Last FY ($) (2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance as of Last FYE ($) (3) | Executive Contribution in Last FY ($) | Registrant Contributions in Last FY ($) (1) | Aggregate Earnings in Last FY ($) (2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance as of Last FYE ($) (3) | ||||||||||||||||||||||||||||||
Todd M. Cleveland | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Andy L. Nemeth | - | - | 8,334 | - | 127,390 | - | - | 8,917 | - | 136,307 | ||||||||||||||||||||||||||||||
Jeffrey M. Rodino | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Doyle K. Stump | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Darin R. Schaeffer | - | - | - | - | - |
(1) | Represents the charge reflected in operating results for the current fiscal year associated with the compensation cost recognized by the Company pursuant to the terms of the plan. |
(2) | Represents the interest cost reflected in operating results for the current fiscal year associated with the annuity. |
(3) | Represents the present value of an annuity as of December 31, |
Name | Severance (1) | Non-Compete | Confidentiality Agreement |
Todd M. Cleveland | 12 Months Base Salary and Insurance Benefits | 2 Years | Indefinite |
Andy L. Nemeth | 12 Months Base Salary and Insurance Benefits | 1 Year | 1 Year |
Jeffrey M. Rodino | 12 Months Base Salary and Insurance Benefits | 2 Years | Indefinite |
(1) | Employee is required to sign a mutual release of claims in a form satisfactory to the Company. |
Name | Severance Payments upon Termination Without Cause | Market Value of Restricted Shares Vesting upon Termination Without Cause or Change in Control (1) | Market Value of Restricted Stock Options Vesting upon Termination Without Cause or Change in Control (2) | Total Payments upon Termination Without Cause or Change in Control | Severance Payments upon Termination Without Cause | Market Value of Restricted Shares Vesting upon Termination Without Cause or Change in Control (1) | Market Value of Restricted Stock Options Vesting upon Termination Without Cause or Change in Control (2) | Total Payments upon Termination Without Cause or Change in Control | ||||||||||||||||||||||||
Todd M. Cleveland | $ | 300,000 | $ | 127,300 | $ | 63,375 | $ | 490,675 | $ | 350,000 | $ | 582,200 | $ | 128,250 | $ | 1,060,450 | ||||||||||||||||
Andy L. Nemeth | 230,000 | 89,300 | 36,968 | 356,268 | 235,000 | 291,100 | 74,813 | 600,913 | ||||||||||||||||||||||||
Jeffrey M. Rodino | 170,000 | 53,200 | - | 223,200 | 200,000 | 188,600 | - | 388,600 | ||||||||||||||||||||||||
Doyle K. Stump | 150,000 | 66,500 | 27,463 | 243,963 | ||||||||||||||||||||||||||||
Darin R. Schaeffer | 75,000 | - | - | 75,000 |
(1) | Represents the market value of unearned shares or units of restricted stock that have not vested based on a market price of |
(2) | Represents the market value of unearned restricted stock options that have not vested based on the difference between the market price of |
1. | Non-employee directors are compensated through a flat annual retainer fee of $32,000 per year; |
2. | Committee chairpersons receive an additional $4,000 annual retainer; and |
3. | Non-employee directors receive an annual restricted stock grant of 3,500 shares in May of each year, which will vest upon such director’s continued service as a member of the Board for one year or earlier upon certain events. |
Name | Fees Earned or Paid in Cash | �� | Stock Awards (1) | Payments under the Company’s Executive Retirement Plan and Deferred Compensation Plan (2) | Total | Fees Earned or Paid in Cash | Stock Awards (1) | Payments under the Company’s Executive Retirement Plan and Deferred Compensation Plan (2) | Total | |||||||||||||||||||||||
Terrence D. Brennan | $ | 21,900 | $ | 9,625 | $ | - | $ | 31,525 | $ | 36,000 | $ | 7,875 | $ | - | $ | 43,875 | ||||||||||||||||
Joseph M. Cerulli | 19,600 | 9,625 | - | 29,225 | 32,000 | 7,875 | - | 39,875 | ||||||||||||||||||||||||
John A. Forbes (3) | 12,000 | 7,140 | 19,140 | |||||||||||||||||||||||||||||
Paul E. Hassler | 17,800 | 9,625 | 125,996 | 153,421 | 32,000 | 7,875 | 125,996 | 165,871 | ||||||||||||||||||||||||
Keith V. Kankel | 22,200 | 9,625 | 72,020 | 103,845 | 36,000 | 7,875 | 72,020 | 115,895 | ||||||||||||||||||||||||
Larry D. Renbarger | 19,900 | 9,625 | - | 29,525 | 32,000 | 7,875 | - | 39,875 | ||||||||||||||||||||||||
Walter E. Wells | 21,900 | 9,625 | - | 31,525 | 36,000 | 7,875 | - | 43,875 |
(1) | Amounts shown do not represent compensation actually received. Such amounts reflect the aggregate grant date fair value of 3,500 shares of restricted stock granted to each non-employee director, except for Mr. Forbes, at a closing stock price of |
(2) | Represents payments under the Company’s Executive Retirement Plan and Deferred Compensation Plan based on prior employment with the Company. |
(3) | Upon his appointment to the Board in August 2011, Mr. Forbes was granted 3,500 shares of restricted stock at a closing price of $2.04 on August 18, 2011. In addition, Mr. Forbes’ annual retainer fee was pro-rated to reflect his length of service on the Board in 2011. |
By Order of the Board of Directors, | |
/s/ Andy L. Nemeth | |
Andy L. Nemeth | |
Secretary | |
April |
Ø | Impose audit committee responsibilities and powers that should be reflected in charter, including: |
· | Committee’s purpose of overseeing the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements; |
· | The direct responsibility for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged (including resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company, and each such registered public accounting firm must report directly to the audit committee; |
· | “Independence” of audit committee members; |
· | Pre-approval of all audit and permitted non-audit services; |
· | Ensuring audit partner rotation; |
· | Ensuring auditor independence and absence of conflicts of interest; |
· | Establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by employees of the listed issuer of concerns regarding questionable accounting or auditing matters; |
· | The authority to engage independent counsel and other advisers, as it determines necessary to carry out its duties; and |
· | Ensuring receipt of certain information from outside auditors and CEO/CFO. |
The appropriate funding by the Company, as determined by the audit committee, in its capacity as a committee of the board of directors, for payment of: |
Compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company; |
Ordinary administrative expenses of the audit committee that are necessary or appropriate in carrying out its duties. |
Ø | Require copy of Audit Committee Charter to be included as an appendix to the Proxy Statement at least once every three (3) years (only if materially changed in last fiscal year or not disclosed as available on website). |
the audit committee's responsibility is to ensure the independence of the outside auditors, and the outside auditors are accountable to the audit committee; |
Ø | The audit committee must have at least three members, each of whom must: (i) be independent as under Nasdaq rules; (ii) meet the criteria for independence set forth in the Securities and Exchange Commission (“SEC”) rules; (iii) not have participated in the preparation of the financial statements of the Company or |
Ø | Company must certify that it has, and will continue to have, at least one member of the audit committee who has past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. |
Ø | The review (for potential conflict of interest situations) and approval of all related party transactions. For purposes of this rule, the term “related party transaction” refers to those required to be disclosed pursuant to SEC Regulation S-K, Item 404 summarized as follows: |
o | Transactions with management to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeds $120,000 and in which any of the following persons had, or will have, a direct or indirect material interest: |
§ | Any director or executive officer |
§ | Any nominee for election as a director |
§ | Any security holder who is known to the Company to own of record or beneficially more than five (5) percent of any class of the Company’s voting securities |
§ | Any member of the immediate family of the foregoing persons which include such person’s spouse, parents, children, siblings, mothers and fathers in-law, sons and daughters in-law, and brothers and sisters in-law. |
o | Certain business relationships regarding directors or nominees for director that exist, or have existed including: |
§ | If the nominee or director has been an executive officer, or owns or has owned in excess of 10% equity interest in any business or entity that has made payments for property or services in excess of 5% of the Company’s consolidated gross revenues or the entity’s consolidated gross revenues. |
§ | If the director has been an executive officer of an entity to which the Company has been indebted in excess of 5% of the Company’s consolidated assets. |
§ | If the director is or during the last year has been a member of or of counsel to a law firm that the Company has retained. The dollar amount of fees need not be disclosed if the amount does not exceed 5% of the law firm’s gross revenues. |
§ | If the director is or during the last year has been a partner or executive officer of an investment banking firm that the Company has retained. The dollar amount of fees need not be disclosed if the amount does not exceed 5% of the investment banking firm’s gross revenues. |
o | If any of the following persons have been indebted to the Company in an amount in excess of $120,000: |
§ | Any director or executive officer |
§ | Any nominee for election as a director |
§ | Any member of the immediate family of any of the above |
§ | Any corporation or organization of which the director or executive officer or nominee is an executive officer or partner, or is the owner of 10% or more of any class of equity securities and |
§ | Any trust or estate in which the persons identified above has a substantial interest or has served as a trustee or similar capacity. |
o | Transactions with promoters. |
A. |
· | Assisting the Board in fulfilling its oversight responsibilities as they relate to the Company’s accounting policies and internal controls, financial reporting practices, audits of the Company’s financial statements, and legal and regulatory compliance, and |
· | Maintaining, through regularly scheduled meetings, a line of communication between the Board and the Company’s financial management, internal auditors, and independent accountants. |
(1) | Review the annual audited financial statements with management and the independent accountants. In connection with such review, the Audit Committee will: |
· | Discuss with the independent accountants the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit. |
· | Review changes in accounting or auditing policies, including resolution of any significant reporting or operational issues affecting the financial statements. |
· | Inquire as to the existence and substance of any significant accounting accruals, reserves or estimates made by management that had or may |
· | Review with the independent accountants any problems encountered in the course of their audit, including any change in the scope of the planned audit work and any restrictions placed on the scope of such work, any management letter provided by the independent accountants, and management’s response to such letter. |
· | Review with the independent accountants and the senior internal auditing executive the adequacy of the Company’s internal controls, and any significant findings and recommendations. |
(2) | Review with management and the independent accountants the Company’s quarterly financial statements in advance of quarterly earnings releases. This Committee may delegate this function to any one of the |
(3) | Oversee the external audit coverage. The Company’s independent accountants are ultimately accountable to |
· | Have the sole authority for the appointment of the independent accountants. |
· | Approve the engagement letter and the fees to be paid to the independent accountants. |
· | Obtain confirmation and assurance as to the independent accountants’ independence and absence of conflicts of interests, including ensuring that they submit on a periodic basis (not less than annually) to the Audit Committee a formal written statement delineating all relationships between the independent accountants and the Company. The Audit Committee is responsible for actively engaging in a dialogue with the independent accountants with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent accountants and for recommending that the Board take appropriate action in response to the independent accountants’ report to satisfy itself of their independence. |
· | Meet with the independent accountants prior to the annual audit to discuss planning and staffing of the audit. |
· | Review and evaluate the performance of the independent accountants, as the basis for a recommendation to the Board with respect to reappointment or replacement. |
· | Ensure audit partner rotation |
(4) | Oversee internal audit coverage. In connection with its oversight responsibilities, the Audit Committee will: |
· | Review the appointment or replacement of the senior internal auditing executive. |
· | Review, in consultation with management, the independent accountants and the senior internal auditing executive, the plan and scope of internal audit activities. |
· | Review internal audit activities, budget, and staffing. |
· | Review significant reports to management prepared by the internal auditing department or the Company’s independent accountants and management’s responses to such reports. |
· | Pre-approve all audit and permitted non-audit services |
(5) | Perform risk oversight responsibilities, as delegated by the Board, related to potential material risks to the Company’s business, including but not limited to, credit, liquidity, financial, operational and reputational risks. |
(6) | Meet periodically with management to review and assess the Company’s major financial risk exposures and the manner in which such risks are being monitored and controlled. |
(7) | Meet at least annually in separate executive session with each of the chief financial officer, the senior internal auditing executive, and the independent accountants. |
(8) | Review periodically with the Company’s General Counsel (i) legal and regulatory matters which may have a material effect on the financial statements, and (ii) corporate compliance policies or codes of conduct. |
(9) | Prepare the report of the Audit Committee required by the rules of the Securities and Exchange Commission to be included in the proxy statement for each annual meeting. |
(10) | Review and reassess the adequacy of this Audit Committee Charter and recommend any proposed changes to the Board as it deems necessary. |
(11) | The Audit Committee has the authority to engage independent counsel and other advisers as it deems necessary to carry out its duties. |
(12) | The Audit Committee will review and approve all related party transactions. Related party transactions are summarized by the independent accountants and presented in the financial statements and the Company’s Annual Report on Form 10-K (or incorporated therein by reference to the proxy statement). Further, management is responsible for notifying the Audit Committee of any new potential related party transactions for review and approval by the Audit Committee. |
(13) | The Audit Committee will be responsible for establishing procedures related to (i) the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, or auditing matters, and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. |
(14) | The Company will provide for appropriate funding, as determined by the Audit Committee, in its capacity as a committee of the Board, for payment of: |
a) | Compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the Company; |
b) | Compensation to any advisers employed by the |
c) |
(15) | To assist it in the conduct of its responsibilities, the Audit Committee, to the |
(16) | The Committee shall annually evaluate its own performance. |
Regardless of whether you plan to attend the Annual Meeting of Shareholders, you can be sure your shares are represented at the meeting by promptly returning your proxy in the enclosed envelope. |