UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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Cooper-Standard Holdings Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant)
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April 10, 201520, 2016
Dear Cooper Standard Stockholder:
On behalf of the Board of Directors of Cooper-Standard Holdings Inc. (“Cooper Standard” or the “Company”), you are cordially invited to attend the 20152016 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on May 7, 2015,19, 2016, at 9:00 a.m. (Eastern Time) at the Omni Berkshire Place, 21 East 52nd Street, New York, New York 10022.
The attached proxy statement provides you with detailed information about the Annual Meeting. We encourage you to read the entire proxy statement carefully. You may also obtain more information about Cooper Standard from documents we have filed with the Securities and Exchange Commission.Commission, which can be found on our website, www.cooperstandard.com.
You are being asked at the Annual Meeting to elect the directors ofdirector nominees described in the Companyproxy statement for a one-year term, to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2015,2016 and to transact any other business properly brought before the meeting.
Whether or not you plan to attend the Annual Meeting, your vote is important, and we encourage you to vote promptly. You may vote your shares via a toll-free telephone number, over the Internet or by completing, dating, signing and returning your proxy card, as described in the attached proxy statement and proxy card.
Thank you in advance for your cooperation and continued support.
Sincerely,
Jeffrey S. Edwards
Chairman and Chief Executive Officer
Meeting Notice
Proxy Statement
Cooper-Standard Holdings Inc.
39550 Orchard Hill Place
Novi, Michigan 48375
20152016 ANNUAL MEETING OF THE STOCKHOLDERS
Meeting Notice
WHERE
Omni Berkshire Place
21 East 52nd Street
New York, New York 10022
WHEN
Thursday, May 7, 201519, 2016 at
9:00 a.m. Eastern Time
WHY
RECORD DATE:The close of business on March 30, 2015.31, 2016.
You will find more information on the matters to be voted on at the meeting in the attached proxy statement. If you are a stockholder of record, you may vote by mail, by toll-free telephone number, by using the Internet or in person at the meeting.
Your vote is important! We strongly encourage you to exercise your right to vote as a stockholder. Please sign, date and return the enclosed proxy card in the envelope provided, call the toll-free number or log on to the Internet - even if you plan to attend the meeting. You may revoke your proxy at any time before it is voted.
You will find instructions on how to vote on page 6one of the attached proxy statement. As long as you were a stockholder on March 30, 2015,31, 2016, you are invited to attend the meeting or send a representative. Please note that only persons with evidence of stock ownership or who are guests of the Company will be admitted to the meeting.
By Order of the Board of Directors
Aleksandra A. Miziolek
Senior Vice President, General Counsel & Secretary
April 10, 201520, 2016
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 7, 2015:19, 2016:
This meeting notice, the 20152016 proxy statement and our 20142015 annual report on Form 10-K for the fiscal year ended December 31, 2014,2015, and any amendments or supplements to the foregoing material that isare required to be furnished to stockholders are available on our website atwww.cooperstandard.com/investor_home.phpwww.ir.cooperstandard.com..
This proxy statement is issued by Cooper-Standard Holdings Inc. in connection with the 2016 Annual Meeting of Stockholders scheduled for May 19, 2016. This proxy statement and accompanying proxy card are first being mailed to stockholders on or about April 20, 2016.
20152016 ANNUAL MEETING OF STOCKHOLDERS
Proxy Statement
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This proxy statement is issued by Cooper-Standard Holdings Inc. in connection with the 2015 Annual Meeting of Stockholders scheduled for May 7, 2015. This proxy statement and accompanying proxy card are first being mailed to stockholders on or about April 10, 2015.
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Proposals
Proposal 1: Election of Directors
Upon the recommendation of our Governance Committee, the Board of Directors of the Company has nominated the eight individuals listed below to stand for election to the Board for a one-year term ending at the annual meeting of stockholders in 2016 or until their successors, if any, are elected or appointed, or until earlier resignation, removal, or death. All of these nominees have consented to being named in this proxy statementImportant Information about Voting and to serve if elected. Messrs. Way and Jutte are not nominated for reelection to the Board and, accordingly, their terms as directors will end at the Annual Meeting.Meeting
The names of the nominees, along with their present positions, their principal occupations, directorships held with other public corporations currently and during the past five years, their ages, and the year first elected as a director are set forth below. Certain individual qualifications, experiences and skills of our nominees that contribute to the Board’s effectiveness as a whole are also described below.
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The Board of Directors recommends that stockholders vote FOR each of our nominees.
Election of the nominees for the eight director positions requires the affirmative vote of a plurality of all votes cast at the Annual Meeting. This means that the director nominee with the most votes for a particular seat is elected for that seat. Votes “withheld” from one or more director nominees will have no effect on the outcome of the vote with respect to the election of directors.
If any nominee does not stand for election, proxies voting for that nominee may be voted for a substitute nominee selected by the Board. The Board may also choose to reduce the number of directors to be elected at the meeting.
In 2014, the Board met 8 times. Each director of the Company in office during 2014 was present for at least 75% of the total number of meetings of the Board and those committees of which the director was a member during the period he served as a director.
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm
Proposal 2 is the ratification of the Audit Committee’s appointment of Ernst & Young LLP as the independent registered public accounting firm to audit the financial statements of the Company for fiscal year 2015. In the event the stockholders fail to ratify the appointment, the Audit Committee will reconsider this appointment. The Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the Company’s and its stockholders’ best interests. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting. They are expected to be available to respond to your questions and may make a statement if they desire.
Ratification of the Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2015 requires the affirmative vote of a majority of the votes cast by the stockholders present in person or represented by proxy at the Annual Meeting and entitled to vote. Abstentions are not counted as votes FOR or AGAINST ratification, and will therefore have no effect on such vote.
The Board of Directors and the Audit Committee recommend that the stockholders vote FOR the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2015.
Your Proxy Vote
You are entitled to one vote on each proposal for each share of the Company’s common stock that you own as of the record date, March 30, 2015.31, 2016. As of the record date, there were17,081,158 17,198,850 shares of common stock outstanding. Each outstanding share is entitled to one vote on each proposal. Below are instructions on how to vote, as well as information on your rights as a stockholder as they relate to voting. Some of the instructions vary depending on how your stock is held. It is important to follow the instructions that apply to your situation.
If your shares are registered in your name, you may vote using the enclosed proxy card, by calling the toll-free number listed on your proxy card or by logging on to the website listed on your proxy card and following the simple instructions provided. The telephone and Internet voting procedures are designed to allow you to vote your shares and to confirm that your instructions have been properly recorded consistent with applicable law. Please see your proxy card for specific instructions. Stockholders who wish to vote over the Internet should be aware that there may be costs associated with electronic access, such as usage charges from Internet access providers and telephone companies, and that there may be some risk a stockholder’s vote might not be properly recorded or counted because of an unanticipated electronic malfunction. Voting by telephone and the Internet will be closed at 11:59 p.m. Eastern Time on May 6, 2015.18, 2016.
If your shares are held in “street name,” you should give instructions to your broker on how to vote your shares. If you do not provide voting instructions to your broker, your broker has discretion to vote those shares only on matters that are routine. A broker cannot vote shares on non-routine matters without your instructions. This is referred to as a “broker non-vote.”
If you plan to attend the meeting and vote in person, your instructions depend on how your shares are held:
• | Shares registered in your name—check the appropriate box on the enclosed proxy card and bring evidence of your stock ownership with you to the meeting. |
• | Shares registered in the name of your broker or other nominee—ask your broker to provide you with a broker’s proxy card in your name (which will allow you to vote your shares in person at the meeting) and bring evidence of your stock ownership from your broker with you to the meeting. |
Remember that attendance at the meeting will be limited to stockholders as of the record date with photo identification and an admission ticket or evidence of their share ownership and guests of the Company.
If your shares are registered in your name, you may revoke your proxy at any time before it is exercised. There are several ways you can do this:
If your shares are held in street name, you must contact your broker to revoke your proxy.
In tallying the results of the voting, the Company will count all properly executed and unrevoked proxies that have been received in time for the Annual Meeting. To hold a meeting of stockholders, a quorum of the shares
(which (which is a majority of the shares outstanding and entitled to vote) is required to be represented either in person or by proxy at the meeting. Abstentions and broker non-votes are counted in determining whether a quorum is present for the meeting.
When voting to elect directors, you have two options:
When voting to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2015,2016, you have three options:
If you return your proxy card with no votes marked, your shares will be voted as follows:
Broker non-votes occur when a broker lacks discretionary authority to vote on a proposal and the beneficial owner has not provided an indication as to how to vote. We will treat broker non-votes as present to determine whether or not there is a quorum at the Annual Meeting, but they will not be treated as votes with respect to the proposals, if any, for which the broker indicates it does not have discretionary authority. This means that broker non-votes will not have any effect on whether any such proposal passes. We expectWithout instructions from you, brokers will be permitted to exercise voting discretion with respect to non-routine matters, such as the proposal to ratify the appointment of Ernst & Young as our independent registered public accounting firm for 2015auditors, but will not be permitted to be the only routine matter being voted on at the Annual Meeting and, therefore, expect that brokers will be ableexercise voting discretion with respect to vote on that proposal in their discretion if you havenon-routine matters, such as election of directors.
We do not provided voting instructions.
The Company actively solicitscurrently plan to hire a proxy participation. All costs of this solicitation will be borne by the Company. The Company has hired Broadridge, 51 Mercedes Way, Edgewood, New York 11717,solicitor to help us solicit proxies and has agreedfrom brokers, bank nominees or other institutions or stockholders, although we reserve the right to pay them $16,000 plus out-of-pocket expenses for this service, subject to adjustment under certain circumstances.do so. In addition, our officers, directors and employees may solicit proxies in person or by telephone, facsimile or other means of communication but they will not receive any additional compensation in connection with such solicitation.
Proposal 1: Election of Directors
Upon the recommendation of our Governance Committee, the Board of Directors of the Company has nominated the nine individuals listed below to stand for election to the Board for a one-year term ending at the annual meeting of stockholders in 2017 or until their successors, if any, are re-elected or appointed, or until their earlier resignation, removal, or death. All of these nominees have consented to being named in this proxy statement and to serve, if elected. If any of them is unable or declines to serve as a director, proxies voting for that nominee may be voted for a substitute nominee selected by the Board. The Board may also choose to reduce the number of directors to be elected at the meeting.
Election of the nominees for the nine director positions requires the affirmative vote of a plurality of all votes cast at the Annual Meeting. This means that the director nominee with the most votes for a particular seat, even if less than a majority, is elected for that seat. Votes “withheld” from one or more director nominees will have no effect on the outcome of the vote with respect to the election of directors.
The names of the nominees, along with their present positions, their principal occupations, directorships held with other public corporations currently and during the past five years, their ages, and the year first elected as a director are set forth below. Certain individual qualifications, experiences and skills of our nominees that contribute to the Board’s effectiveness as a whole are also described below.
Glenn R. August | Director of the Company since October 2014, and currently serves as Chairman of the Compensation Committee and as a member of the Governance Committee. He formerly served on the Company’s Board from May 2010 until May 2011. Mr. August has overall management responsibility for Oak Hill Advisors, an alternative investment firm. In addition, he serves as global head of the firm’s distressed investment activities. He co-founded the predecessor investment firm to Oak Hill Advisors in 1987 and took over responsibility for the firm’s credit and distressed investment activities in 1990. Mr. August co-founded each of Oak Hill Advisors’ funds, where he currently serves as the managing partner of each of their management entities. He previously worked in the mergers and acquisitions department at Morgan Stanley in New York and London. He currently serves as the chairman of the board of directors of OHA Investment Corporation, a publicly traded business development company. He also serves on the board of directors of the 92nd St. Y and on the Board of Trustees of Horace Mann School and The Mount Sinai Medical Center. He earned a Master’s in Business Administration from Harvard Business School, where he was a Baker Scholar, and a Bachelor of Science from Cornell University. Qualifications: Mr. August has substantial experience in investment research and analysis. He has expertise in corporate financings, equity transactions and corporate restructurings. Other Current Public Directorships: OHA Investment Corporation Former Public Directorships (past 5 years): iStar Financial Inc. Age: 54 |
Jeffrey S. Edwards | Director of the Company since October 2012 and Chairman of the Board since May 2013. Mr. Edwards has served as our Chief Executive Officer since October 2012 and served as our President from October 2012 to May 2013. Previously, Mr. Edwards served in positions of increasing responsibility at Johnson Controls, Inc., a global diversified technology and industrial company. He led the Automotive Experience Asia Group of Johnson Controls, serving as corporate vice president, group vice president and general manager from 2004 to 2012. Mr. Edwards served as Johnson Controls’ group vice president and general manager for Automotive Experience North America from 2002 to 2004. He completed an executive training program at INSEAD and earned a Bachelor of Science from Clarion University. Qualifications: Mr. Edwards has substantial leadership and operational experience in the automotive industry, having held key executive positions in his 28 years with Johnson Controls in addition to his service as our Chairman and Chief Executive Officer. Other Current Public Directorships: Standex International Corp. Former Public Directorships (past 5 years): None Age:53 | |
Sean O. Mahoney | Director of the Company since May 2015 and currently serves as a member of the Audit Committee. Mr. Mahoney is a private investor with over two decades of experience in investment banking and finance. In addition, Mr. Mahoney has served as a consultant to Silver Point Capital since August 2013. Mr. Mahoney spent 17 years in investment banking at Goldman, Sachs & Co., where he was a partner and the head of the Financial Sponsors Group, followed by four years at Deutsche Bank Securities where he served as vice chairman, global banking. During his banking career, Mr. Mahoney acted as an advisor to companies across a broad range of industries and product areas. In addition to his public company board memberships, Mr. Mahoney has served on the post-bankruptcy board of Lehman Brothers Holdings Inc. since 2012, and the board of Formula One Holdings since 2014. He earned his graduate degree from Oxford University, where he was a Rhodes Scholar, and his undergraduate degree from the University of Chicago. Qualifications: Mr. Mahoney has a depth of expertise in capital markets and business strategy across a wide variety of companies and sectors, including industrial and automotive. He also has extensive experience in structuring and executing financing transactions, and mergers and acquisitions. Other Current Public Directorships:Delphi Automotive PLC and Alcoa Inc. Former Public Directorships (past 5 years): None Age: 53 |
David J. Mastrocola | Director of the Company since May 2010 and Lead Director since January 2011. Mr. Mastrocola is a private investor. Mr. Mastrocola is a former partner and managing director of Goldman, Sachs & Co., where he worked from 1987 until 2009. During that period, Mr. Mastrocola held a number of senior management positions in the Investment Banking Division, including heading or co-heading the corporate finance, mergers/strategic advisory and industrials/natural resources departments. Mr. Mastrocola also served as a member of Goldman, Sachs & Co.’s firm-wide capital and commitments committees. Mr. Mastrocola currently serves as a trustee for Save the Children Federation, Inc. He has a Bachelor of Science in Accounting from Boston College and an MBA from Harvard University. Qualifications: Mr. Mastrocola has extensive and varied expertise in corporate finance and mergers and acquisitions, having served in a number of senior management positions in the Investment Banking Division of Goldman, Sachs & Co. Other Current Public Directorships: None Former Public Directorships (past 5 years): Famous Dave’s of America, Inc. Age: 54 | |
Justin E. Mirro | Director of the Company since May 2015 and currently serves as a member of the Governance Committee. Mr. Mirro is an operating partner at Wynnchurch Capital, Ltd. Mr. Mirro joined Wynnchurch in March 2015 as an advisor in the investment development group. He is the founder of Kensington Capital Partners LLC and has been its president since January 2015. Mr. Mirro has over 19 years of automotive investment banking experience, most recently as a managing director and head of automotive investment banking at RBC Capital Markets from June 2011 to December 2014. Prior to that, Mr. Mirro was head of automotive investment banking at Moelis & Company from August 2008 to May 2011, and he was also head of North American Automotive Investment Banking at Jefferies & Company from March 2005 to July 2008. Prior to his investment banking career, Mr. Mirro worked as an engineer for General Motors and Toyota. Mr. Mirro earned his Masters of Business Administration from New York University, Leonard N. Stern School of Business, and his undergraduate degree from The University of Michigan, College of Engineering. Qualifications: Mr. Mirro has extensive experience in investment banking and mergers and acquisitions, particularly in the automotive segment. Other Current Public Directorships: None Former Public Directorships (past 5 years): None Age: 47 |
Robert J. Remenar | Director of the Company since May 2015, and currently serves as a member of the Compensation Committee. Mr. Remenar served as the president and chief executive officer of Chassix Inc. from July 2012 to June 2014, and from December 2010 to June 2012 he served as the president and chief executive officer of Nexteer Automotive. From April 2002 to November 2012, Mr. Remenar served as the president of Delphi Steering/Nexteer Automotive. Mr. Remenar held diverse executive positions within Delphi Corporation from 1998 to 2002 and several executive and managerial positions within General Motors from 1985 to 1998. Mr. Remenar earned his Master’s degree in Business and Professional Accountancy from Walsh College and his undergraduate degree from Central Michigan University. Qualifications: Mr. Remenar has extensive operational, management and leadership experience, specifically in the automotive industry. Mr. Remenar has long-standing relationships with automotive customers, suppliers and has extensive capital markets experience. Other Current Public Directorships: PKC Group Plc Former Public Directorships (past 5 years): None Age: 60 | |
Sonya F. Sepahban | Nominated to the Board in April 2016. Ms. Sepahban is currently a Board of Directors member at Genomenon, Inc. and the Cranbrook Institute of Science. From 2009 to 2015, Ms. Sepahban served as the Senior Vice President of Engineering, Development and Technology at General Dynamics Land Systems (“GDLS”), a business unit of General Dynamics Combat Systems Group—a global leader in the design, development, production, support, and enhancement of tracked and wheeled military vehicles—where she had responsibility for all GDLS products developed for governmental and commercial customers worldwide. Prior to her employment at GDLS, Ms. Sepahban held a number of leadership positions with Northrop Grumman Space Technology, including as the Senior Vice President and Chief Engineer from 2007 to 2009 where she was responsible for program execution, product development, and continuous improvement; Vice President of Systems Engineering from 2006 to 2007; Vice President and Chief Technology Officer from 2004 to 2006; and Vice President and Deputy General Manager of Engineering from 1997 to 2004. Prior to her employment at Northrop, Ms. Sepahban held a number of technical and management positions at the NASA Johnson Space Center on the Space Shuttle and International Space Station programs from 1989 to 1997. Ms. Sepahban also has an extensive background working and living in Europe and with international customers. Ms. Sepahban has a Bachelor’s degree in Chemical Engineering from Cornell University and a Political Science degree from the institute of Political Sciences in Paris, France. She also has a Master’s degree in Chemical Engineering from Rice University and an MBA from the University of Houston. Qualifications: Ms. Sepahban has extensive experience in engineering, production, technology, P&L management, and global operations within the aerospace and defense, manufacturing, and engineering services sectors. Her skills and background provide the Board with expertise in overseeing the engineering, development, and production operations of large global organizations. Other Current Public Directorships: None Former Public Directorships (past 5 years): None Age:55 |
Thomas W. Sidlik | Director of the Company since January 2014 and currently serves as Chairman of the Governance Committee and as a member of the Audit Committee. In 2007, Mr. Sidlik retired from the DaimlerChrysler AG Board of Management in Germany after a 34-year career in the automotive industry. He previously served as chairman and Chief Executive Officer of Chrysler Financial Corporation, chairman of the Michigan Minority Business Development Council and vice chairman of the National Minority Supplier Development Council. Mr. Sidlik has been on the board of directors of Delphi Automotive PLC and Delphi Automotive LLP since 2009. Previously he served on the Board of Regents of Eastern Michigan University, where he served as vice chairman and chairman of the board. He received a bachelor of science degree from New York University and an MBA from University of Chicago. Qualifications: Mr. Sidlik has extensive experience in the automotive industry provides the Board with strategic, management and industry expertise. Other Current Public Directorships: Delphi Automotive PLC Former Public Directorships (past 5 years): None Age: 66 | |
Stephen A. Van Oss | Director of the Company since August 2008 and currently serves as Chairman of the Audit Committee and as a member of the Compensation Committee. Mr. Van Oss was the senior vice president and chief operating officer of WESCO International, Inc., a leading distributor of electrical construction and industrial maintenance products, a position he held from September 2009 until his retirement in December 2015. He served as a director of WESCO from 2008 to 2015. From 2004 to 2009, Mr. Van Oss served as senior vice president and chief financial and administrative officer of WESCO. From 2000 to 2004, he served as vice president and chief financial officer of WESCO. He served as WESCO’s director, information technology from 1997 to 2000. He serves as a trustee of Robert Morris University, chairs its finance committee, and is a member of its governance committee. Mr. Van Oss received a BS in Accounting from Wright State University and an MBA from Cleveland State University. Qualifications: Mr. Van Oss has substantial leadership experience in business operations and finance, having served as both chief operating officer and chief financial and administrative officer of WESCO International, Inc. He has expertise in distribution and in information technology, having served as WESCO’s director, information technology. Other Current Public Directorships: None Former Public Directorships (past 5 years): WESCO International, Inc. Age:61 |
The Board of Directors unanimously recommends that stockholders vote FOR each of our nominees.
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm
Proposal 2 is the ratification of the Audit Committee’s appointment of Ernst & Young LLP as the independent registered public accounting firm to audit the financial statements of the Company for fiscal year 2016. In the event the stockholders fail to ratify the appointment, the Audit Committee will reconsider this appointment. The Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the Company’s and its stockholders’ best interests. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting. They are expected to be available to respond to your questions and may make a statement if they desire.
Ratification of the Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2016 requires the affirmative vote of a majority of the votes cast by the stockholders present in person or represented by proxy at the Annual Meeting and entitled to vote. Abstentions are not counted as votes FOR or AGAINST ratification, and will therefore have no effect on such vote.
The Board of Directors and the Audit Committee recommend that the stockholders vote FOR the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2016.
Cooper Standard is committed to sound corporate governance principles. Having such principles is essential to maintaining our integrity in the marketplace and ensuring that we are managed for the long-term benefit of our stockholders. Our business is overseen by our Board of Directors. Our Board strives to promote the success and continuity of our business through the selection of a qualified management team. It is also encourages banks, brokersresponsible for making certain that our activities are conducted responsibly, lawfully and ethically.
The Board has adopted Corporate Governance Guidelines, which provide a framework for the effective governance of the Company. The Board has also adopted a Code of Conduct, which applies to all directors, officers, and employees, including our chief executive officer, our chief financial officer and our controller. All of our corporate governance documents, including the Corporate Governance Guidelines, the Code of Conduct, and committee charters are available on our website atwww.cooperstandard.com under the “Investors” tab or in printed form upon request by contacting Cooper Standard at 39550 Orchard Hill Place, Novi, Michigan 48375, Attention: Investor Relations. The Board regularly reviews corporate governance developments and modifies our policies as warranted. Any modifications will be reflected on our website. In addition, if the Board grants any waivers from our Code of Conduct to any of our directors or executive officers, or if we amend our Code of Conduct, we will, if required, disclose these matters through the “Investor” section of our website on a timely basis. The information on our website is not part of this proxy statement and is not deemed to be incorporated by reference in this proxy statement.
Independence of Directors
Our Corporate Governance Guidelines provide that a majority of the members of the Board must meet the criteria for independence set forth under applicable law and the New York Stock Exchange (“NYSE”) listing standards. The Board determines on an annual basis whether each director qualifies as independent under these criteria. In addition to applying the NYSE independence rules, the Board will consider all relevant facts and circumstances of which it is aware in making an independence determination with respect to any director. Furthermore, our Audit, Compensation and Governance Committees are constituted so as to comply with the NYSE listing standards regarding independence.
The Board has determined that Messrs. August, Mahoney, Mirro, Remenar, Sidlik, Van Oss, and Ms. Sepahban are independent as determined pursuant to NYSE rules. Mr. Edwards is not independent because he is our CEO. Mr. Mastrocola is not independent under NYSE rules because his brother is a partner at Ernst & Young LLP, the Company’s independent auditors. Mr. Mastrocola’s brother has no direct involvement of any kind in the relationship between Ernst & Young LLP and the Company or the review of our financial statements.
Board Leadership Structure
The Board’s leadership structure currently includes a combined Chairman and Chief Executive role with a non-employee Lead Director, as permitted by our Corporate Governance Guidelines. Mr. Edwards serves as Chairman of the Board of Directors as well as our Chief Executive Officer. The Board believes that this structure is in the best interests of our stockholders as it takes into consideration the importance of having a chairman with in-depth knowledge of and experience in our industry, as well as promotes communication between management and the Board, in particular with respect to the Board’s oversight of the Company’s strategic direction. In addition, this structure helps ensure that the non-employee directors’ attention is devoted to the issues of greatest importance to the Company and our stockholders. Our Board periodically reviews its determination to have a single individual serve as both Chairman and CEO.
The Lead Director is elected by the independent, non-employee members of the Board upon the recommendation of the Governance Committee. The Board believes that the role of the Lead Director, together with the existence of a substantial majority of independent directors, fully independent Board committees, and the use of regular executive sessions of non-employee directors achieves an appropriate balance between the effective development of key strategic and operational objectives and independent oversight of management.
Mr. Mastrocola has been chosen as the Lead Director. The Lead Director (i) presides at meetings and sessions of the non-employee directors and communicates with management concerning the substance of such meetings and sessions; (ii) assists the Board’s Chairman with the setting of agendas and other custodianmatters relating to meetings of the Board; (iii) in consultation with the Compensation Committee, assists the Board in connection with its evaluation of the performance of the CEO; and (iv) undertakes such other activities as may be requested by the Board or required by applicable laws, regulations, or rules.
Board’s Role in Risk Oversight
The Board is responsible for analyzing and overseeing material risks we face. The Board works with our executive leadership team to identify significant risks to our business. Management continually monitors the following general categories of risk related to our business: financial reporting risk, strategic and macroeconomic risk, operational risk, and legal and compliance risk. Those risks are regularly reviewed with the Board and its committees. The Board ensures that appropriate policies and procedures are in place to identify and mitigate risks and that those policies and procedures are followed.
In addition to the role of the full Board in overseeing risk, the Board committees are also involved in risk oversight. The Audit Committee reviews with management (i) our policies with respect to risk assessment and management of risks that may be material to the Company, (ii) our system of disclosure controls and system of internal controls over financial reporting, and (iii) our compliance with legal and regulatory requirements. The Compensation Committee regularly reviews our compensation programs and practices and determines whether any such programs or practices create risks that are likely to have any material adverse effect on Cooper Standard. If such risks are present, the Compensation Committee may require changes to our compensation programs or practices to eliminate such risks. The Compensation Committee has determined that our compensation programs and practices are conservative and create no risks that would have any material adverse effect on Cooper Standard. The Governance Committee reviews and oversees risks related to our governance structure and processes, related party transactions, and our legal and ethical compliance programs, including our Code of Conduct.
Meetings
Our Board of Directors met eight times in 2015. As set forth in our Corporate Governance Guidelines, Board members are expected to attend Board meetings and meetings of the Committees on which they serve. All directors are also strongly encouraged to attend our annual meeting of stockholders. Each of our incumbent director nominees attended at least 75% of the meetings of our Board and fiduciariesthe committees on which such director served during 2015. Seven of the eight incumbent directors attended the 2015 Annual Meeting.
Meetings of Non-Employee Directors
In accordance with our Corporate Governance Guidelines and the listing standards of NYSE, our non-employee directors meet regularly in executive sessions of the Board without management present. Executive sessions of non-employee directors are led by Mr. Mastrocola, the Lead Director, and are held in conjunction with each regularly scheduled Board meeting. Each committee of the Board also meets in executive session without management in conjunction with regularly scheduled committee meetings, as appropriate. At least once a year, the independent directors meet in an executive session led by one of the independent directors who is selected by all of the independent directors to supply proxy materials to stockholders and reimburses them for their expenses.lead the session.
Company Information
The Board’sBoard Committees and Their Functions
Committees of the Board of Directors
Our Board of Directors currently has anthree standing committees: the Audit Committee, athe Compensation Committee, and athe Governance Committee. The following chart sets forth the directors who currently serve as members of each of the Board committees.
Directors | Audit Committee | Compensation Committee | Governance Committee | |||||||||
Jeffrey S. Edwards * | ||||||||||||
Glenn R. August | C | X | ||||||||||
Sean O. Mahoney | X | |||||||||||
David J. Mastrocola ** | ||||||||||||
Justin E. Mirro | X | |||||||||||
Robert J. Remenar | X | |||||||||||
Thomas W. Sidlik | X | C | ||||||||||
Stephen A. Van Oss | C | X |
* | Chairman of Board |
** | Lead Director |
“C” | Denotes member and Chairman of Committee |
“X” | Denotes member |
Audit Committee
In 2015, the Audit Committee held five meetings. Our Audit Committee currently consists of Messrs. Van Oss, Sidlik,Mahoney, and Way.Sidlik. Mr. Van Oss serves as the Chairman of the Audit Committee. The Board of Directors has determined that each member of the Audit Committee is financially literate and that Messrs.Mr. Van Oss and Way each qualifyqualifies as an “auditaudit committee financial expert” (asexpert, as defined in Item 407(d)(5)by the rules and regulations of Regulation S-K).the SEC. The Board of Directors has further determined that each member of the Audit Committee is independent under applicable New York Stock Exchange (“NYSE”)NYSE listing standards and the rules of the Securities and Exchange Commission (the “SEC”).SEC rules. The Audit Committee is responsible fororganized and conducts its business pursuant to a written charter adopted by the Board and available on our website. The Audit Committee’s principal responsibilities include: (i) reviewing and discussing with management andselecting our independent auditorsregistered public accounting firm; (ii) overseeing our annual auditedaccounting and financial statementsreporting processes and the audit of our annual and quarterly financial statementsstatements; (iii) overseeing our compliance with legal and any audit issues and management’s response; (ii) reviewing and discussing with management and our independent auditors our financial reporting and accounting standards and principles and significant changes in such standards and principles or their application; (iii) reviewing and discussing with management and our independent auditors our internal system of financial controls and disclosure controls and our risk assessment and management policies and activities;regulatory requirements; (iv) reviewing and evaluating the independence, qualifications, and performance of our independent auditors;auditors and the performance of our internal audit function; and (v) investigating matters relating to management’s integrity, including adherence to standardsreviewing and overseeing our system of business conduct established in our policies;internal controls regarding finance, accounting, and (vi) taking such actions as may be required or permitted under applicable law to be taken by an audit committee on behalf of us and our Board of Directors.
The Board of Directors has adopted an Audit Committee charter, a copy of which is available at www.cooperstandard.com. In 2014, the Audit Committee met 5 times.legal compliance.
Compensation Committee
Our Compensation Committee met seven times in 2015, and currently consists of Messrs. Way, August, Remenar, and Jutte.Van Oss. Mr. WayAugust serves as the Chairman of the Compensation Committee. The Board of Directors has determined that each member of the Compensation Committee is independent under applicable NYSE listing standards.standards and SEC rules. The Compensation Committee is responsible fororganized and conducts its business pursuant to a written charter adopted by the Board and available on our website. The Compensation Committee’s principal responsibilities include: (i) the reviewreviewing and approval ofapproving corporate goals, objectives and other criteria relevant to the compensation of the Chief Executive Officer and other executive officers; (ii) together with the Lead Director, the evaluation ofevaluating the performance of the Chief Executive Officer and other executive officers and the determination and approval ofdetermining their compensation; (iii) the reviewestablishing our overall compensation philosophy and approval ofreviewing and approving executive
compensation programs;programs, and assessing related risks; (iv) the reviewreviewing and approval of contracts and transactionsapproving any employment or severance arrangements with executive officers; (v) the reviewreviewing and approval ofapproving equity-based compensation plans and awards made pursuant to such plans; (vi) working with the approval, reviewCEO and oversight ofthe Board with respect to succession planning; and (vii) overseeing the Company’s employee benefit plans, of the Company, including the delegation of responsibility for such programs to the Company’s Benefit Plan Committee;Committee.
The Compensation Committee has engaged Frederic W. Cook & Co., Inc. (“Cook & Co.”) as its independent compensation consultant. The consultant reports directly to the Compensation Committee, including with respect to management’s recommendations of compensation programs and (vii) taking such actions as may be required or permitted under applicable law to be taken by aawards. The consultant advises the Compensation Committee on behalfa number of uscompensation-related considerations, including compensation practices among our peer group companies, pay-for-performance measures, competitiveness of pay levels, program design and our Board of Directors.
The Board of Directorsmarket trends. Other than consulting on executive compensation matters, Cook & Co. has adopted a Compensation Committee charter, a copy of which is available at www.cooperstandard.com. In 2014,performed no other services for the Compensation Committee met 6 times.or the Company.
Governance Committee
Our Governance Committee met six times in 2015, and currently consists of Messrs. Sidlik, Jutte,August, and Van Oss.Mirro. Mr. Sidlik serves as the Chairman of the Governance Committee. The Board of Directors has determined that Messrs. Sidlik, Jutte, and
Van Oss areeach member of the Governance Committee is independent under applicable NYSE listing standards.standards and SEC rules. The Governance Committee is responsible fororganized and conducts its business pursuant to a written charter adopted by the Board and available on our website. The Governance Committee’s principal responsibilities include: (i) identifying and evaluating individuals qualified to become members of the Board, consistent with criteria approved by the Board; (ii) selecting, or recommending that the Board select, the director nominees to stand for election by stockholders or to fill vacancies on the Board and board committee memberships; (iii) developing and recommending to the Boardensuring compliance with corporate governance principles and practices applicable to the Company, including director access to management and management succession plans;Company; (iv) reviewing the Company’sour legal compliance and ethics programs and monitoring compliance with the Company’s governance principles, policies, and code of business conduct and ethics;policies; (v) reviewing and approvingrecommending to the full Board director compensation, andas well as indemnification and insurance matters; and (vi) overseeing the annual performance evaluation of the Board and its committees.
The Board of Directors has adopted a Governance Committee charter, a copy of which is available at www.cooperstandard.com. In 2014, the Governance Committee met 5 times.
Lead Director
Mr. Mastrocola is the Lead Director of the Board of Directors. The Lead Director (i) presides at meetings and sessions of the non-management members of the Board and communicates with management concerning the substance of such meetings and sessions; (ii) assists the Board’s Chairman with the setting of agendas and other matters relating to meetings of the Board; (iii) in consultation with the Compensation Committee, assists the Board in connection with its evaluations of the performance of the Company’s Chief Executive Officer; and (iv) undertakes such other activities as may be requested by the Board or required by applicable laws, regulations or rules.
Independence of Directors
The Board of Directors has determined that Messrs. August, Mahoney, Mirro, Remenar, Sidlik, and Van Oss are independent as determined pursuant to NYSE rules. In addition, the Board previously determined that Jeffrey E. Kirt, Kenneth L. Way, and Larry J. Jutte, each of whom served as a director during 2014, were independent pursuant to NYSE rules. Mr. Edwards is not independent as determined pursuant to NYSE rules because he is employed by the Company. Mr. Mastrocola is not independent as determined pursuant to NYSE rules because his brother is a partner at Ernst & Young LLP, the Company’s independent auditors. Mr. Mastrocola’s brother has no direct involvement of any kind in the relationship between Ernst & Young LLP and the Company or the review of the Company’s financial statements.
Board Leadership
Mr. Edwards serves as Chairman of the Board of Directors as well as Chief Executive Officer of the Company. It is the Board’s belief that this structure is in the best interest of the Company’s stockholders at this time as it promotes an efficient flow of communication between management and the Board, in particular with respect to the Board’s oversight of the Company’s strategic direction. The Board believes that the role of Mr. Mastrocola as Lead Director, together with the existence of a substantial majority of independent directors, fully independent Board committees, and the use of regular executive sessions of non-management directors, achieves an appropriate balance between the effective development of key strategic objectives and independent oversight of management’s execution of strategic initiatives.
Executive Sessions
Non-management directors meet regularly in executive sessions without management. “Non-management” directors are all those who are not Company officers, and include directors who are not “independent.” Executive sessions of non-management directors are led by Mr. Mastrocola, the Lead Director, and are held in conjunction with each regularly scheduled Board meeting. Each committee of the Board also meets in executive session without management in conjunction with regularly scheduled committee meetings, as appropriate. At least once a year, the independent directors meet in an executive session led by one of the independent directors who is selected by all of the independent directors to lead the session.
Board’s Role in Risk Oversight
The Board is actively involved in oversight of risks inherent in the operation of the Company’s businesses and the implementation of its strategic plan. The Board performs this oversight role by using several different levels of review. In connection with its reviews of the operations of the Company’s business units and corporate functions, the Board addresses the primary risks associated with those units and functions. In addition, the Board reviews the key risks associated with the Company’s strategic plan as part of its consideration of the strategic direction of the Company.
The Board has delegated to the Audit Committee oversight of the Company’s risk management process. Among its duties, the Audit Committee reviews with management (i) Company policies with respect to risk assessment and management of risks that may be material to the Company, (ii) the Company’s system of disclosure controls and system of internal controls over financial reporting, and (iii) the Company’s compliance with legal and regulatory requirements.
Each of the other Board committees also oversees the management of Company risks that fall within the committee’s areas of responsibility. In performing this function, each committee has full access to management, as well as the ability to engage advisors, and each committee reports back to the full Board. The Audit Committee oversees risks related to the Company’s financial statements, the financial reporting process, other financial matters, certain compliance issues, and accounting and legal matters. The Audit Committee, along with the Governance Committee, is also responsible for reviewing certain legislative and regulatory developments that could materially impact the Company’s contingent liabilities and risks. The Governance Committee also oversees risks related to the Company’s governance structure and processes, related persons transactions, compliance programs, succession planning, and Board and committee structure to ensure appropriate oversight of risk. The Compensation Committee considers risks related to the attraction and retention of key management and employees and risks relating to the design of compensation programs and arrangements.
Policy on Director Attendance at Stockholder Meetings
Directors are expected to attend in person regularly scheduled meetings of stockholders, except when circumstances prevent such attendance. When such circumstances exist and in the judgment of the Chairman it is deemed critical that all directors participate, or in the case of special stockholder meetings, directors may participate by telephone or other electronic means and will be deemed present at such meetings if they can both hear and be heard. All of our directors then serving were present at the Company’s 2014 annual meeting of stockholders.
Other Matters Concerning Directors, Nominees and Executive Officers
SEC regulations require the Company to describe certain legal proceedings, including bankruptcy and insolvency filings involving directors, nominees for director or executive officers of the Company or companies of which a director, nominee for director or executive officer was an executive officer at the time of filing. Messrs. Keith D. Stephenson and Allen J. Campbell served as executive officers of the Company at the time the Company filed for protection under Chapter 11 of the United States Bankruptcy Code (“Chapter 11”) in August 2009. Mr. Remenar, nominee for director, was an executive officer of Chassix Inc. approximately nine months before Chassix Inc. filed for protection under Chapter 11 in March 2015.
Corporate Governance and Code of Business Conduct and Ethics
The Board of Directors has adopted Corporate Governance Guidelines that set forth the corporate governance practices of the Company. The Board has also adopted a Code of Business Conduct and Ethics that applies to all directors, officers, and employees of the Company and its subsidiaries, including our chief executive officer, our chief financial officer and our controller. All of our corporate governance documents, including the Corporate Governance Guidelines, the Code of Business Conduct and Ethics, and committee charters are available on our website at www.cooperstandard.com or in printed form upon request by contacting Cooper Standard at 39550
Orchard Hill Place, Novi, Michigan 48375, Attention: Investor Relations. The Board regularly reviews corporate governance developments and modifies these documents as warranted. Any modifications will be reflected on our website. The information on our website is not part of this proxy statement and is not deemed to be incorporated by reference in this proxy statement.
Nomination of Directors
It is the policy of the Governance Committee and Board to consider director candidates for director recommended by stockholders. The committeeGovernance Committee will evaluate candidates recommended for director by stockholders using the same criteria that it uses in evaluating any other candidate. Stockholders wishingThe procedures for a stockholder to make such a recommendation should send to the Governance Committee, at the address givennominate director candidates are described below under “Communications with the Board of Directors,“Stockholder Nominations.” all information that would be required were the stockholder nominating such candidate directly pursuant to the Company’s By-Laws. In addition to nominees recommended by stockholders, the committeeGovernance Committee will consider candidates recommended by management, members of the Board, search firms, and other sources. Mr. August, a former director of the Company and chief executive officer of Oak Hill Advisors, a long-time substantial stockholder, was well-known to and recommendedsources as a nominee by certain stockholders and directors. Messrs. Mahoney, Mirro, and Remenar were recommended as nominees by certain stockholders and directors.necessary.
In identifying and evaluating nominees for director, the committeeGovernance Committee takes into account the applicable requirements for directors under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the NYSE listing rules of the NYSE.rules. In addition, the committeeGovernance Committee considers other criteria as it deems appropriate and which may vary over time depending on the Board’s needs, including certain core competencies and other criteria such as automotive or manufacturing industry experience, general understanding of various business disciplines (e.g., marketing, finance, etc.), the Company’s business environment, educational and professional background, analytical ability, diversity of experience and viewpoint, and willingness to devote adequate time to Board duties. The goal ofAlthough the committee isBoard does not have a formal diversity policy, the Governance Committee seeks to maintain a balanced and diverse Board with members whose skills, viewpoint, background, and experience complement each other and together contribute to the Board’s effectiveness as a whole.
Stockholder Nominations
The Governance Committee will consider director candidates recommended by stockholders. The Company’s By-Laws provide certain procedures that a stockholder must follow to nominate persons for election to the Board
of Directors. Nominations for director at an annual stockholder meeting must be submitted in writing to the Governance Committee in care of the Secretary at the Company’s principal executive offices at 39550 Orchard Hill Place, Novi, Michigan 48375 in accordance with the procedures and deadlines outlined under “Submitting Stockholder Proposals and Nominations for the 20162017 Annual Meeting.” The Secretary must receive the notice of a stockholder’s intention to introduce a nomination at an annual stockholder meeting:
The By-Laws also provide, among other things, that the stockholder nomination notice must contain all information relating to such nominee that is required to be disclosed in solicitations of proxies for elections of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serve as director if elected).
Other Matters Concerning Directors, Nominees and Executive Officers
SEC regulations require the Company to describe certain legal proceedings, including bankruptcy and insolvency filings involving directors, nominees for director or executive officers of the Company or companies of which a director, nominee for director or executive officer was an executive officer at the time of filing. Messrs. Keith D. Stephenson and Allen J. Campbell, a former officer, served as executive officers of the Company at the time the Company filed for protection under Chapter 11 of the United States Bankruptcy Code (“Chapter 11”) in August 2009. Mr. Remenar, nominee for director, was an executive officer of Chassix Inc. approximately nine months before Chassix Inc. filed for protection under Chapter 11 in March 2015.
Communications with the Board of Directors
The Board has established procedures for stockholders and other interested parties to communicate with the Board. A stockholder or other interested party may contact the Board by writing to the Lead Director or the non-
managementnon-employee or independent members of the Board to their attention at the Company’s principal executive offices at 39550 Orchard Hill Place, Novi, Michigan 48375. Any stockholder must include the number of shares of the Company’s common stock he or she holds and any interested party must detail his or her relationship with the Company in any communication to the Board. Communications received in writing are distributed to the Lead Director or non-managementnon-employee or independent members of the Board as a group, as appropriate, unless such communications are considered, in the reasonable judgment of the Company’s Secretary, improper for submission to the intended recipient(s). Examples of communications that would be considered improper for submission include, without limitation, customer complaints, solicitations, communications that do not relate directly or indirectly to the Company or the Company’s business, or communications that relate to improper or irrelevant topics.
Summary of Compensation
Members of the Board of Directors who are not Cooper Standard employees receive an annual cash fee of $80,000 and, if they chair a committee, an additional fee of $10,000 per year. The Lead Director receives an additional fee of $15,000 per year, less any amount the Lead Director may receive in fees as chair of a committee. Non-employee directors are also eligible to receive equity grants under our 2011 Omnibus Incentive Plan. In 2015, the value of the equity awards granted to non-employee directors was approximately equal in value to the annual base director fee.
The following table sets forth information regarding the compensation received by each non-employee director during the year ended December 31, 2015.
Name (a) | Fees Earned or Paid in Cash ($) (b) | Stock Awards ($) (c)1 | Option Awards ($) (d) 2 | All Other Compensation ($) (g) | Total ($) (h) | |||||||||||||||
Glenn R. August | $ | 86,511 | 3 | $ | 77,807 | — | — | $ | 164,318 | |||||||||||
Larry J. Jutte | $ | 27,912 | 4 | — | — | $ | 27,912 | |||||||||||||
Sean O. Mahoney | $ | 52,088 | 5 | $ | 77,807 | — | — | $ | 129,895 | |||||||||||
David J. Mastrocola | $ | 95,000 | 6 | $ | 77,807 | — | — | $ | 172,807 | |||||||||||
Justin E. Mirro | $ | 52,088 | 5 | $ | 77,807 | — | — | $ | 129,895 | |||||||||||
Robert J. Remenar | $ | 52,088 | 5 | $ | 77,807 | — | — | $ | 129,895 | |||||||||||
Thomas W. Sidlik | $ | 90,000 | 7 | $ | 77,807 | — | — | $ | 167,807 | |||||||||||
Stephen A. Van Oss | $ | 90,000 | 8 | $ | 77,807 | — | — | $ | 167,807 | |||||||||||
Kenneth L. Way | $ | 31,401 | 9 | — | — | — | $ | 31,401 |
1 | The amount shown in column (c) represents the grant-date fair value of 1,285 time-vested restricted stock units (“RSUs”) granted to each of the non-employee directors who were directors on the grant date, May 7, 2015, under the Company’s 2011 Omnibus Incentive Plan (the “Omnibus Plan”). These RSUs will vest, assuming continued service as a director, on the earlier of the first annual shareholder meeting after the grant date or May 7, 2016. Each RSU represents a contingent right to receive, at the issuer’s option, either one share of common stock or the cash equivalent upon satisfaction of the vesting requirements. Under the Cooper-Standard Holdings Inc. Deferred Compensation Plan for Non-Employee Directors, the directors may make an irrevocable election to defer their RSU awards. For 2015, Messrs. August, Mahoney, Mastrocola, Sidlik, and Van Oss each deferred their 2015 RSU awards. |
2 | As of December 31, 2015, the Company’s non-employee directors had options awards outstanding as follows: for each of Messrs. August (held by Oak Hill Advisors, LP), Mastrocola, and Van Oss, options to purchase 9,731 shares of the Company’s common stock at an exercise price of $25.52 per share. |
3 | Represents Mr. August’s annual outside director fee plus a prorated fee for his services as the chairman of the Compensation Committee from May 7, 2015, through December 31, 2015. Mr. August’s director fee was paid to Oak Hill Advisors, LP. |
4 | Mr. Jutte was a director until May 7, 2015, thus his annual outside director fee was prorated from January 1, 2015, through May 7, 2015. |
5 | Messrs. Mahoney, Mirro, and Remenar became directors on May 7, 2015, thus their annual outside director fees were prorated from May 7, 2015, through December 31, 2015. |
6 | Represents Mr. Mastrocola’s annual outside director fee plus $15,000 for his services as the Lead Director. |
7 | Represents Mr. Sidlik’s annual outside director fee plus $10,000 for his service as chairman of the Governance Committee. |
8 | Represents Mr. Van Oss’s outside director fee plus $10,000 for his service as chairman of the Audit Committee. |
9 | Mr. Way was a director until May 7, 2015, thus his annual director fee and the fee for his service as chairman of the Compensation Committee was prorated from January 1, 2015, through May 7, 2015. |
Stock Ownership Policy for Non-Employee Directors
To align the interests of our non-employee directors with the interests of our stockholders, the Board of Directors has a policy requiring that non-employee directors achieve a level of ownership our common stock equal to five times their base annual director fee. Under this policy, non-employee directors are required to hold 75% of the net shares resulting from stock option exercises or vesting of other stock-based awards until they reach their applicable stock ownership level.
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table and accompanying footnotes show information regarding the beneficial ownership of the issued and outstanding common stock of Cooper-Standard Holdings Inc. by (i) each person known by us to beneficially own more than 5% of the issued and outstanding common stock of Cooper-Standard Holdings Inc. as of the dates indicated in the footnotes and (ii) (A) each of our directors, (B) each named executive officer, and (C) all directors and executive officers as a group, each as of March 30, 2015.31, 2016. Unless otherwise indicated, the address of each beneficial owner is c/o Cooper-Standard Holdings Inc., 39550 Orchard Hill Place, Novi, Michigan 48375.
TABLE OF STOCK OWNERSHIP
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (1) | Rule 13d-3 Percentage (1) | Fully Diluted Percentage (2) | ||||||||||||
Significant Owners: | Shares | % | % | ||||||||||||
Silver Point Capital L.P.(3) | 5,373,444 | 31.5 | 28.8 | ||||||||||||
Oak Hill Advisors, L.P.(4) | 3,048,622 | 17.6 | 16.3 | ||||||||||||
Capital World Investors(5) | 2,614,094 | 15.3 | 14.0 | ||||||||||||
Directors and named executive officers: | |||||||||||||||
Allen J. Campbell(6) | 172,037 | 1.0 | 0.9 | ||||||||||||
Juan Fernando de Miguel Posada(7) | 3,900 | * | — | — | |||||||||||
Jeffrey S. Edwards(8) | 110,633 | * | — | — | |||||||||||
Song Min Lee(9) | 3,600 | * | — | — | |||||||||||
Keith D. Stephenson(10) | 182,921 | 1.1 | 1.0 | ||||||||||||
Glenn R. August(4) | — | — | — | ||||||||||||
Larry J. Jutte(11) | 19,022 | * | — | — | |||||||||||
David J. Mastrocola(11) | 19,022 | * | — | — | |||||||||||
Thomas W. Sidlik | 4,750 | * | — | — | |||||||||||
Stephen A. Van Oss(11) | 19,022 | * | — | — | |||||||||||
Kenneth L. Way(11) | 19,022 | * | — | — | |||||||||||
Directors and executive officers as a group (16 persons) | 664,063 | 3.9 | 3.6 |
Number of Shares of Common Stock Beneficially Owned(1) | Percentage of Common Stock Beneficially Owned | |||||||
Significant Owners | ||||||||
Silver Point Capital L.P. | 4,248,554 | (2) | 23.9 | % | ||||
Oak Hill Advisors, L.P. | 2,085,756 | (3) | 12.0 | % | ||||
Capital World Investors | 1,070,844 | (4) | 6.2 | % | ||||
The Vanguard Group | 996,828 | (5) | 5.8 | % | ||||
Named Executive Officers and Directors | ||||||||
Allen J. Campbell | 155,512 | (6) | * | |||||
Juan Fernando de Miguel Posada | 28,628 | (7) | * | |||||
Jeffrey S. Edwards | 231,881 | (8) | 1.3 | % | ||||
Matthew W. Hardt | 3,100 | (9) | * | |||||
Song Min Lee | 27,192 | (10) | * | |||||
Keith D. Stephenson | 233,253 | (11) | 1.3 | % | ||||
Glenn R. August(3) | — | * | ||||||
Sean O. Mahoney | — | * | ||||||
David J. Mastrocola | 16,061 | (12) | * | |||||
Justin E. Mirro | 2,000 | (13) | * | |||||
Robert J. Remenar | 821 | (14) | * | |||||
Thomas W. Sidlik | 4,750 | (15) | * | |||||
Stephen A. Van Oss | 17,846 | (16) | * | |||||
Directors and executive officers as a group (17 persons) | 686,849 | 3.9 | % |
* | Less than 1% |
SEC rules require that the Company disclose beneficial ownership percentages calculated in the manner prescribed by Rule 13d-3 under the Exchange Act. Under |
Based |
common |
Silver Point Capital, L.P. (“Silver Point”) is the investment manager of Silver Point Capital Fund, L.P., and Silver Point Capital Offshore Fund, Ltd. (“the “Funds”) and, by reason of such status, may be deemed to be the beneficial owner of all securities held by the Funds. Silver Point Capital Management, LLC (“Management”) is the general partner of Silver Point and as a result may be deemed to be the beneficial owner of all securities held by the funds. Messrs. Edward A. Mulé and Robert J. O’Shea are each members of Management and as a result may be deemed to be the beneficial owner of all of the securities held by the Funds. Silver Point, Management, and Messrs. Mulé and O’Shea each disclaim beneficial ownership of the reported securities held by the Funds except to the extent of their pecuniary interests. |
Oak Hill Advisors GenPar L.P. (“OHA GenPar”) is the general partner of OHA. OHA receives, directly and indirectly, management fees or incentive fees with respect with respect to certain accounts that it advises, including OHCOF, SCF and SCF IB. None of such fees constitutes an indirect pecuniary interest for purposes of Rule 16a-1. Mr. August controls (i) the managing general partner of OHA Genpar, and (ii) OHA Strategic Credit GenPar, LLC, the general partner of SCF and SCF IB, and may be deemed to have an indirect beneficial interest in the shares owned by OHCOF, SCF and SCF IB. Mr. August is a director of the Company. Mr. August, OHA and OHA GenPar may be deemed to be the indirect beneficial owners of the securities beneficially owned by OHCOF, SCF, SCF IB and OHA GenPar only to the extent of their respective pecuniary interest. Mr. August, OHA and OHA GenPar disclaim beneficial ownership of the foregoing securities except to the extent of his pecuniary interest in such securities. The address for Oak Hill Advisors, L.P. is 1114 Avenue of the Americas, 27th Floor, New York, New York 10036. |
6 | Includes 36,333 shares of common stock, 115,000 shares of common stock underlying stock options, and 4,179 shares of common stock underlying warrant options. |
7 | Includes 1,995 shares of common stock and 26,633 shares of common stock underlying stock options. |
Includes |
12 | Includes 6,330 shares of common stock and 9,731 shares of common stock underlying stock options. |
Represents shares of common stock. |
14 | Represents shares of common stock. |
15 | Represents shares of common stock. |
16 | Includes 8,115 shares of common stock and 9,731 shares of common stock underlying stock options. |
Compensation Discussion and Analysis
This Compensation Discussion and Analysis describes the key principles and material elements of the Company’s compensation policiesprograms applicable in 2014 to theour “Named Executive Officers” of the Companyor “NEOs” in 2015 as identified in the “Executive Compensation” section. Much of what is discussed below, however, applies generally to the Company’s executives and is not limited to the Named Executive Officers.
Executive Summary
The executive compensation programs establishedCooper Standard reported record results in 2011 remained2015. In particular, we earned net income of $111.9 million, an increase of 161.5% over 2014, on sales of $3.34 billion. Our 2015 fourth quarter marked the fifth consecutive quarter in effect through 2013.
In the first quarter of 2013, the Committee engaged Frederic W. Cook & Co., Inc. (“Cook & Co.”) as its independent consultant. Cook & Co. assisted the Committee in undertaking a comprehensive review of the Company’s executive compensation programs which resulted in a number of changes that became effectivewere able to deliver significant year-over-year margin improvement. Our adjusted EBITDA margin for 2015 was 10.8% compared to 9.6% in 2014.
Based on invested capital; to increaseour 2015 performance, we exceeded the percentage of long-term incentive awards denominated in the Company’s stock to 100%; to permit the Committee full latitude in making discretionary downward adjustments to award payouts when deemed appropriate; to modify the vesting schedule applicable to stock options; and to add performance-based restricted stock units to our long-term incentive compensation program as a new form of equity-based compensation.
The Company achieved 87% of the Adjustedadjusted EBITDA and 77% of the operation cash flow performance targets for the Company as a whole that was applicable to the annual incentive award for 2014 for the Named Executive Officers. This resulted in payouts to Named Executive Officers that ranged from 48% to 69% of their target awards for the year, reflecting the regional performance results. The Company achieved 74% of the operating cash flow performance target applicabletargets that were established for determining annual incentive bonuses. As more fully described below, this resulted in annual incentive payments to long-term cash incentive awards granted in 2012 for the three-year performance period ending December 31, 2014, resulting in no payout under those awardsour NEOs of 133% to executive officers, including Named Executive Officers, who were employed by the Company in 2012.142% of target.
Compensation Philosophy and Objectives
The objective of the Company’sOur compensation program is to linkprograms are designed to:
To help achieve these goals, we believe compensation for executive officers should include the following components:
In 2013,
The Compensation Committee regularly reviews these components and evaluates each in connection with furthering our compensation philosophy and objectives. To assist it in determining appropriate compensation levels and components, the Compensation Committee in consultation with the Board reaffirmed the philosophy that the targetreviews market data and best practices, and benchmarks our compensation of the Company’s executives, including the Named Executive Officers, based on the achievement of target-level performance, should beagainst executive compensation paid by our peer group companies as discussed below. The Compensation Committee generally targets compensation for our NEOs at approximately the 50th percentile among the peer group of companies, and recognizing that actual compensation levels could fallbe above or below median levels or reach higher levels commensurate with actual financialdepending on our performance. The Committee and Board also affirmed that executive pay should be based on market data, but that pay positioningIn addition, compensation for individualsspecific executives can be above or below the marketpeer group median based on criticalitythe individual’s importance to the organization, the difficulty and cost of replacement, the expected future contribution to the organization, tenure at current position and skill-set relative to the external marketplace.
The executiveWe are committed to sound and effective pay practices. As such, we have adopted the following:
Processes Relating to Executive Compensation
It is the responsibility of theThe Compensation Committee to assistassists the Board in discharging the Board’sits responsibilities relating to the compensation of the Company’s executive officersour NEOs and the oversight ofoverseeing our compensation plans, policies and benefit programs. The Company’sOur human resources executives and professionals supportteam supports the Compensation Committee in its work. In evaluating and determining the salary and incentive compensation of our NEOs, the Company’s executive officers, theCompensation Committee receives informationrelies on data received from the Company’sindependent compensation consultant and the Chief Human Resources Officer, and the consulting firm engaged by the Committee as well as recommendations from the Company’s Chief Executive Officer.CEO. The Compensation Committee, as a whole, following discussions with the Chief Executive Officer,CEO, meets privately and determines the salary and incentive compensation of the Chief Executive OfficerCEO and the other executive officers of the Company.NEOs. Executives whose compensation is under consideration are not present during the Compensation Committee’s review meetings.meetings, and neither the CEO nor management has any input into the compensation decisions for the CEO. The considerations, criteria and procedures applicable to these determinations are discussed more fully under “Executive Compensation Components.”
Executive Compensation Review for 20142015
As discussed above, the Compensation Committee has engaged Cook & Co. as its independent compensation consultant. Cook & Co. has served as the Compensation Committee’s independent consultant since 2013. As part of its engagement, Cook & Co. benchmarked the target compensation levels of the Company’s executivesour NEOs in order to assess the competitiveness of the Company’sour executive compensation programs in the markets in which the Company competeswe compete for executives,talent, focusing in particular on base salaries, target annual incentive opportunities and target long-term incentive opportunities. Cook & Co. compared the Company’sour programs in these areas withto a comparator group: apeer group comprised of 16 publicly tradedpublicly-traded automotive suppliers with 20132014 annual revenues between $0.8$0.7 billion and $7.5$8.3 billion with aand median revenues of $2.7$2.9 billion. Cook & Co. supplemented its analysesanalysis of peer group proxy data with general industry surveys.surveys, comparing peer group executives with similar revenue responsibilities, as applicable. The peer group was reviewed by the Compensation Committee, and no changes were made for 2015.
The following is a list of the2015 peer group companies constituting the automotive supplier comparator group.are:
• Accuride Corp. | • Martinrea International Inc. | • Tenneco Inc. | ||
• American Axle & Mfg. Holdings, Inc. | • Meritor, Inc. | • Tower International, Inc. | ||
• Dana Holding Corporation | • Modine Manufacturing Co. | • Visteon Corp. | ||
• Drew Industries, Inc. | • Remy International, Inc. | • WABCO Holdings Inc. | ||
• Federal-Mogul Holdings Corporation | • Stoneridge, Inc. | |||
• | • Superior Industries International, Inc. |
Based on its competitiveFall 2014 analysis (which was used to analyze target Total Direct Compensation (“TDC”) for 2015), Cook & Co. concluded that base salaries arefor our NEOs were generally at or above the median and within the competitive range. TargetThe competitiveness of target bonus percentages areopportunities varies by executive. All executives had target cash compensation at or nearabove the market median and althoughwith the exception of the CEO and CFO, are somewhatwho were positioned slightly below the median, when combined with the base salaries this results inmedian. Relative to survey data, executive target cash compensation positioning at or near the median. The target total compensation approximatesTDC levels are 85% of the median, ofin the peer group and survey data.aggregate.
As discussed above,
Apart from the work it performed for the Compensation Committee, engaged Cook & Co. to assist it with its executive compensation determinations for 2014. Cook & Co. did not provide anyprovided no other services to the Company, andCompany. Accordingly, the Compensation Committee has concludeddetermined that the engagement and services of Cook & Co. in 2014 did not raise any2015 was appropriate and raised no conflict of interest.
2014 Say-on-Pay Vote
In May 2014, the Company held a stockholder advisory vote on the compensation of the Named Executive Officers. The Company’sour NEOs. Our stockholders overwhelmingly approved the compensation of the Named Executive OfficersNEOs as disclosed in the 2014 Proxy Statement, with approximately 99% of stockholder votes cast in favor of the “say on pay” resolution.say-on-pay advisory proposal. The Compensation Committee has determined that the Company’sour executive compensation philosophy, compensation objectives, and compensation elements continued to be appropriate and did not make any specificmaterial changes to the Company’sour executive compensation program in response to the 2014 “say on pay”“say-on-pay” vote. The next “say-on-pay” and “say-when-on-pay” vote will occur at the 2017 annual meeting.
Executive Compensation Components
The following describes the elementscomponents of the Company’s 2014our 2015 executive compensation program.program as approved by the Compensation Committee.
Base Salary
The Company’s senior executivesOur NEOs are paid a base salary that is determined prior to or early in each fiscal year, or upon changes in roles or positions within the Company. The Compensation Committee determines the CEO’s salary of the Chief Executive Officer and, taking into account recommendations from the Chief Executive Officer,CEO, the salaries of the other executive officers of the Company. The determinations of the Compensation Committee are subject to the approval of the Board. The Company’s policyNEOs. Generally, our practice is to pay base salaries that are competitive in the markets in which it competeswe compete for executives and that take into accounttalent, commensurate with the responsibilities and contributions
of each executive. Base salary provides executives with a regular streamFive of income. The five Named Executive Officersthe NEOs were eligible for base salary adjustments in 20142015 and, based on the Compensation Committee’s evaluation of data supplied by Cook & Co., received salary increases averaging 3.26%3.9%, as follows.
2013 Base Salary | 2014 Base Salary | Increase | ||||||||||||||
2014 Base Salary | 2015 Base Salary | Increase | ||||||||||||||
Mr. Edwards | $800,000 | $825,000 | 3.1% | $ | 825,000 | $ | 850,000 | 3.0% | ||||||||
Mr. Stephenson | $590,000 | $610,000 | 3.4% | $610,000 | $628,000 | 3.0% | ||||||||||
Mr. Campbell | $530,000 | $550,000 | 3.8% | |||||||||||||
Mr. Campbell (1) | $ | 550,000 | $ | 558,000 | 1.5% | |||||||||||
Mr. de Miguel | €400,000 | €412,000 | 3.0% | €412,000 | €449,000 | 9.0% | ||||||||||
Mr. Lee | $500,000 | $515,000 | 3.0% | $ | 515,000 | $ | 530,000 | 3.0% | ||||||||
Mr. Hardt (2) | N/A | $400,000 | N/A |
(1) | Mr. Campbell left the Company in November 2015. |
(2) | Mr. Hardt joined the Company in February 2015. |
Annual Incentive Award
Prior to or early in each fiscal year, the Compensation Committee has normally determineddetermines target annual incentive amounts payable to the executive officers of the Company, including the Named Executive Officers,NEOs upon the achievement of performance targets establishedapproved by the Compensation Committee for the year. Target annual incentives for 20142015 were split into two distinct components such that 70% of each executive officer’sthe incentive was evaluatedbased on the achievement of Adjustedan adjusted EBITDA1 performance goals,goal, and the remaining 30% was evaluatedbased on the achievement of operationan operating cash flow2 performance goals.goal. In determining payouts under each of the two components (Adjusted EBITDA and operation cash flow),component, actual payouts for executive officersNEOs with corporate-wide responsibilities were based on the result of the Company as a whole; for the executive officers in the regional business units actual payouts under each component were based on a blend, weighted 80% of the results of the Company as a whole and 20% ofwhole. For NEOs in the results of each executive officer’s regional business unit. units, the 70% adjusted EBITDA measure was further split so that the annual incentive was based on 30% regional adjusted EBITDA and 40% adjusted EBITDA for the Company as a whole.
Adjusted EBITDA and operationoperating cash flow are deemed by the Compensation Committee to be an appropriate objective measurementmeasurements of the financial performance of the Company. The Compensation Committee selected these metrics because they are indicators of our strategy to achieve sustained profitable growth and align executive compensation with the interests of our stockholders over the long term.
The annual incentive award program (the “AIP”) is designed to focus theour executive leadership team on the achievement of strong financial performance over a one-year period. In addition to establishing Adjusted EBITDA and operation cash flow performance targets, the achievement of which entitles senior executives to annual incentive payments at the target levels, theThe Compensation Committee establishes a “threshold” or minimum performance target, the achievement of which entitles executivesNEOs to an annual incentive payment equal to 50% of the target amounts.amounts for each performance metric. No annual incentive award is payable on either metric if the Company fails to meet the corresponding threshold performance target. In addition, theThe Compensation Committee also sets a “superior performance” target,level, the achievement of which entitles executivesNEOs to a maximum annual incentive payment equal to 200% of the target amounts.amounts (on each metric). The superior performance level represents a goal deemed difficult to achieve at the beginning of the year based on the
assumptions underlying the Company’sour business plan except upon performance substantially exceeding expectations.plan. Actual annual incentive payments are determined on ausing linear basisinterpolation for Adjusted EBITDAperformance attainment between “threshold” and operation cash flow attainment above the “threshold” level but not precisely at the “target” or “superior performance” level.and between “target” and “superior.” In the first quarter following the end of the fiscal year to which an annual incentive award applies, the Compensation Committee determines whether, and to what extent, the applicable performance targets were achieved based on the Company’sour financial results for the fiscal year. With respect to the Named Executive Officers,NEOs, award amounts may be subject to downward adjustment of up to 100% byat the Committee based upon overall individual performance and attainmentdiscretion of goals.the Compensation Committee.
For 2014,2015, the Compensation Committee granted annual incentive awardsestablished target award amounts under the AIP to the Company’s executive officers in the manner described above, establishing target award amounts for each executiveNEO based on a percentage of base salary. With respect to the Named Executive Officers, the percentage was 105%salary as follows: 110% for Mr. Edwards, 75% for Mr. Stephenson, and 65% for Messrs. Campbell, de Miguel, Lee, and Lee.Hardt. The target award amountamounts did not change from 2014 except for Mr. Edwards, waswhose target award increased from 100% in 2013.105% of base salary. The Compensation Committee set Adjusted EBITDA and operationoperating cash flow performance targets applicable to the Company as a whole in accordance with the 2014our 2015 business plan of the Company as approved by the Company’s Board of Directors, as follows:
2014 Achievement Level | Adjusted EBITDA 70% (000) | Award Payout as % of Award Target | ||||||||||||||||
2015 Achievement Level | Adjusted EBITDA 70% (000) | Award Payout as % of Award Target | ||||||||||||||||
Below threshold | 0 % | 0 | % | |||||||||||||||
At threshold (80% of target performance) | $ 288,000 | 50 % | $ | 284,000 | 50 | % | ||||||||||||
At target | $ 360,000 | 100 % | $ | 355,000 | 100 | % | ||||||||||||
At superior (120% of target performance) | $ 432,000 | 200 % | $ | 426,000 | 200 | % |
2014 Achievement Level | Operation Cash Flow 30% (000) | Award Payout as % of Award Target | ||||||||
Below threshold | 0 % | |||||||||
At threshold (80% of target performance) | $ 94,000 | 50 % | ||||||||
At target | $ 117,000 | 100 % | ||||||||
At superior (120% of target performance) | $ 141,000 | 200 % |
1 | For purposes of our annual incentive program, adjusted EBITDA is defined as net income adjusted to reflect income tax expense, interest expense net of interest income, depreciation and amortization, and certain items that management does not consider to be reflective of our core operating performance. Adjusted EBITDA is not a measure recognized under United States Generally Accepted Accounting Principles (U.S. GAAP). |
2 | For purposes of our annual incentive program, operating cash flow is defined as adjusted EBITDA minus cash taxes, capital expenditures (cash methodology) and the monthly average change to working capital. Operating cash flow is not a measure recognized under United States Generally Accepted Accounting Principles (U.S. GAAP). |
2015 Achievement Level Below threshold At threshold (80% of target performance) At target At superior (120% of target performance) Operating Cash
Flow
30%
(000) Award Payout as %
of Award Target 0 % $ 66,400 50 % $ 83,000 100 % $ 99,600 200 %
In 2014,2015, for purposes of the AIP, the actual consolidated Adjustedour adjusted EBITDA was $314.4$365.3 million and the actual operationoperating cash flow was $89.9$155.1 million. This performance resulted in cash AIP award payments to executive officers for 2014, including the Named Executive Officers, that ranged from 48% to 69% of their target award amounts. The percentage of target payable was 47.8% for Messrs. Edwards, Stephenson, and Campbell; 46.2% for Mr. de Miguel; and 69.2% for Mr. Lee. The percentages for Messrs. de Miguel and Lee reflect the business performance of the regions.our NEOs as follows:
2015 Year- End Base Salary | Target Bonus | Achievement Factor as a Percent of Target Award | 2015 Amount Earned under AIP | |||||||||||||
Mr. Edwards | $ | 850,000 | 110 | % | 140.2 | % | $ | 1,310,870 | ||||||||
Mr. Stephenson | $ | 628,000 | 75 | % | 140.2 | % | $ | 660,342 | ||||||||
Mr. Campbell(1) | $ | 558,000 | 65 | % | 140.2 | % | $ | 423,755 | ||||||||
Mr. de Miguel | € | 449,000 | 65 | % | 132.6 | % | € | 386,993 | ||||||||
Mr. Lee | $ | 530,000 | 65 | % | 140.4 | % | $ | 483,678 | ||||||||
Mr. Hardt | $ | 400,000 | 65 | % | 140.2 | % | $ | 364,520 |
(1) | Mr. Campbell received a pro rata bonus for the ten months he was employed at the Company as part of his severance agreement. |
Long-Term Incentive Compensation
Awards under the Prior Cash-Based Long-Term Incentive Plan
In early 2011 the Compensation Committee approved a Long-Term Incentive Plan (the “LTIP”) under which long-term cash incentive awards would be granted to designated participants. For 2014, the long-term cash awards were replaced with performance-based restricted stock units, which are described in the Long-Term Incentive Program section below.
In 2012, the Committee established target award amounts of $522,500 and $392,000 each for the two Named Executive Officers who were employed by the Company at the time (Messrs. Stephenson and Campbell) for the three-year period ending December 31, 2014. The other Named Executive Officers commenced their employment with the Company after 2012 and did not receive awards under the LTIP pertaining to this period.
The cash LTIP awards for the three-year performance period ending December 31, 2014, were based on the achievement of operating cash flow targets covering the years ending December 2012, 2013, and 2014. The annual operating cash flow targets for 2012, 2013, and 2014 were $190 million, $110 million, and $100 million, respectively. Pursuant to the terms of the awards, payouts were to be determined as follows:
Achievement Level (Average) | Operating Cash Flow (000) | Award Payout as % of Award Target | ||||||||
Below threshold | 0 | % | ||||||||
At threshold (80% of target performance) | $ 320,000 | 50 | % | |||||||
At target | $400,000 | 100 | % | |||||||
At superior (120% of target performance) | $480,000 | 200 | % |
The actual average operating cash flow performance of the Company for the performance period was below the threshold performance level, which resulted in no payouts under the cash LTIP awards for the performance period ending December 31, 2014.
20142015 Long-Term Incentive Program
The Omnibus Plan provides forauthorizes the grant ofCompensation Committee to award stock options, stock appreciation rights, shares of common stock, restricted stock, restricted stock units (“RSUs”),RSUs, incentive awards and certain other types of awards to our key employees and directors of the Company and its affiliates.directors. Except in the case of newly hired or promoted executives, it has been the normal practice of the Compensation Committee to grant incentive awards under the Omnibus Plan, to grant incentive awards, including equity-based incentive awards, during the first quarter of the calendar year so that all or most elements of executive compensation can be considered in a coordinated, comprehensive manner.
For 2015, the 2014Compensation Committee, following consultation with Cook & Co., determined that equity-based awards to our Named Executive Officers, the Compensation Committee and Board applied a strategy whereunder 2014 equity-based grants under the Omnibus Plan wouldNEOs should have a value approximately equal togenerally aligned with the median total long-term incentive awards granted in a year to executives in similar positions at comparableamong our peer group companies. The equity-based awards we granted in 20142015 consisted of options to purchase shares of the Company’sour common stock, time-vestingtime-vested RSUs, and a new form of equity-based compensation, performance-based RSUs (“Performance RSUs”). The Committee added Performance RSUs to our equity-based compensation mix in 2014 to more align with typical market practice, to provide a stronger linkage to shareholder experience as compared to cash denominated programs, and to drive executive ownership. The value-basedpercentage mix of the three LTIPLong-Term Incentive Program (“LTIP”) vehicles granted in 2014 were2015 (on a value basis) was approximately 50%, 30%, and 20% for Performance RSUs, stock options, and time-vestingtime-vested RSUs, respectively. The value of the 2015 equity-based awards along with the number of shares and options granted are as follows:
Number of Shares | ||||||||||||||||
2015 LTIP Grant Value | Performance RSUs at Target | Stock Options | Time Vested RSUs | |||||||||||||
Mr. Edwards | $ | 2,100,000 | 19,700 | 38,900 | 7,900 | |||||||||||
Mr. Stephenson | $ | 1,121,000 | 10,500 | 20,800 | 4,200 | |||||||||||
Mr. Campbell | $ | 848,000 | 7,900 | 15,700 | 3,200 | |||||||||||
Mr. de Miguel | $ | 733,000 | 6,900 | 13,600 | 2,700 | |||||||||||
Mr. Lee | $ | 675,000 | 6,300 | 12,500 | 2,500 | |||||||||||
Mr. Hardt | $ | 500,000 | 4,700 | 9,300 | 1,900 |
2015 Performance-Based Restricted Stock Units
For 2015, we granted a target number of Performance RSUs to our NEOs under the Omnibus Plan. The Performance RSUs cliff vest after three years if we achieve certain established performance goals and if the NEO remains in our employ until December 31, 2017. If the Company’s return on invested capital for the 3-year performance period ending December 31, 2017, is 9%, the number of Performance RSUs will vest at the target level. If ROIC is 7.2% (80% of the target performance goal), then one-half of the Performance RSUs will vest. If ROIC is 10.8% (120% of the target performance goal), then two times the number of Performance RSUs will vest. Achievement of the performance goal between threshold and target, and between target and superior will be linearly interpolated. Performance RSUs that vest will be settled 50% in cash and 50% in shares of our common stock.
Following its review of the benchmarking and analysis of Cook & Co., the Compensation Committee determined that the value of the Performance RSUs granted in 2015 should constitute approximately 50% of the total value of each NEO’s long-term incentive opportunity. Because the value of Performance RSUs increases with the increase in the price of our common stock, we believe Performance RSUs align the interests of our NEOs with those of our stockholders. In addition, the use of a return-on-invested-capital performance goal introduces a capital efficiency metric to our incentive program and further emphasizes the importance of our long-term performance.
20142015 Stock Option Awards
On March 20, 2014,For 2015, we granted non-qualified stock options to purchase shares of the Company’s common stock at an exercise price equal to the fair market value of a share of common stock on the date of grant to Named Executive Officers, as follows: Mr. Edwards, 31,900 shares; Mr. Stephenson, 17,900 shares; Mr. Campbell, 13,500 shares; Mr. de Miguel, 11,700 shares; and Mr. Lee, 10,800 shares. Historically, we have granted options with a three-year “cliff” vesting schedule, under which the options vest with respect to all shares covered by the options after three years. For theNEOs. The options granted in 2014, the Compensation Committee changed to ratable vesting2015 vest ratably over a three-year period. The Committee made this change to enhance the competitiveness of our option awards based on its belief that three-year ratable vesting is a more common vesting schedule for similar awards granted by other publicly traded companies. The optionsperiod, and expire on the tenth anniversary of the grant date of grant or earlier upon certain events involving the termination of the optionee’s employment. The size of these option grants was determined by the Committee followingFollowing its review of thea benchmarking analysis ofby Cook & Co. It was, the intention of theCompensation Committee and Boarddetermined that the value of stock options granted in 20142015 should constitute approximately 30% of the total value of the annual long-term incentive awards granted duringgranted. We believe the year. The use of stock options as an important element of the equity-baseda component of the 2014 long-term incentive grants was deemedcompensation is an effective way of promoting the continued alignment ofaligning the interests of the Company’sour executives with those of itsour stockholders, as the intrinsic value of stock options dependsis dependent on increases in the growth in valueprice of the Company’sour common stock over time.
2014 Time-Vesting2015 Time-Vested Restricted Stock Unit Awards
On March 20, 2014, we granted time-vestingFor 2015, the Compensation Committee approved a grant of time-vested RSUs to Named Executive Officers under the Omnibus Plan, as follows: Mr. Edwards, 6,600 RSUs; Mr. Stephenson, 3,700 RSUs; Mr. Campbell, 2,800 RSUs; Mr. de Miguel, 2,400 RSUs; and Mr. Lee, 2,200 RSUs.our NEOs. The RSUs granted cliff vest after three years to drive executive retention. The sizeyears. Following its review of these RSU grants was determineda benchmarking analysis by Cook & Co., the Compensation Committee following its review of the benchmarking analysis of Cook & Co. It was the intention of the Committee and Boarddetermined that the value of time-vested RSUs granted in 2014should constitute approximately 20% of the total value of the targetannual long-term incentive opportunity granted duringawards granted. We believe the year. The use of time-vested RSUs as an element of the equity-baseda component of the 2014 long-term incentive grants was deemed an effective means of supporting the desired alignment ofcompensation helps retain executives and aligns the interests of the Company’sour executives with those of the Company’sand stockholders, as the value of RSUs increasesis directly linked to the price of our common stock.
Awards under the Prior Cash-Based Long-Term Incentive Plan
In 2011, the Compensation Committee approved a Long-Term Incentive Plan (the “LTIP”) under which long-term cash incentive awards would be granted to designated participants based on achieving specified performance targets. Beginning in 2014, the long-term cash awards were replaced with performance-based restricted stock units, as described above.
In 2013, the growth in valueCompensation Committee established cash LTIP target award amounts for each of the Company’s common stock, and their value continues to be impactedNEOs who were employed by changes in value ofus at the Company’s common stock even at levels below the fair market value of the Company’s common stock on the date of grant.
2014 Performance-Based Restricted Stock Units
On March 20, 2014, we granted a target number of Performance RSUs to Named Executive Officers under the Omnibus Plan, as follows: Mr.time (Mr. Edwards, 16,600 Performance RSUs;$1,000,000; Mr. Stephenson, 9,300 Performance RSUs; Mr. Campbell, 7,000 Performance RSUs;$560,500; Mr. de Miguel, 6,100 Performance RSUs;$366,500; and Mr. Lee, 5,600 Performance RSUs. The Performance RSUs cliff vest after three years if$337,500) for the three-year period ending December 31, 2015. Mr. Hardt commenced his employment with the Company achieves pre-established performance goalsafter 2013 and ifdid not receive awards under the Named Executive Officer remains in employment untilLTIP pertaining to this period. Mr. Campbell was not employed on December 31, 2016. 2015, and did not receive a payout under the LTIP pertaining to this period.
The performance goal is met at target, and the number of Performance RSUs previously described will vest, if the Company’s return on invested capitalcash LTIP awards for the 3-yearthree-year performance period ending December 31, 2016, is 10%. If 80%2015, were based on the achievement of adjusted operating cash flow targets for the years ending December 2013, 2014, and 2015. The annual adjusted operating cash flow targets for 2013, 2014, and 2015 were $110 million, $100 million, and $103 million, respectively. Pursuant to the terms of the targetawards, payouts were to be determined as follows:
Achievement Level (Average) | Operating Cash Flow (000) | Award Payout as % of Award Target | ||||||
Below threshold | 0 | % | ||||||
At threshold (80% of target performance) | $ | 250,400 | 50 | % | ||||
At target | $ | 313,000 | 100 | % | ||||
At superior (120% of target performance) | $ | 375,600 | 200 | % |
The actual operating cash flow performance goal is met, then one-half of the Performance RSUs will vest. If 120% of the target performance goal is met, then two times the number of Performance RSUs will vest. Achievement ofCompany for the performance goal between thresholdperiod was $429 million. This was above the superior performance level, which resulted in a 200% payout under the cash LTIP awards for the performance period ending December 31, 2015. As a result, actual payout amounts were as follows: for Mr. Edwards, $2,000,000; for Mr. Stephenson, $1,121,000; for Mr. de Miguel, $733,000; and target, and between target and superior will be linearly interpolated. The size of these Performance RSU grants was determined by the Compensation Committee following its review of the benchmarking analysis of Cook & Co. Performance RSUs that vest will be settled 50% in cash and 50% in shares of our common stock.
It was the intention of the Committee and the Board that the value of the Performance RSUs granted in 2014 constitute approximately 50% of the total value of the target long-term incentive opportunity granted during the year. The use of Performance RSUs as an element of the equity-based component of the 2014 long-term incentive program was deemed an effective means of supporting the desired alignment of the interests of the Company’s executives with those of the Company’s stockholders for several reasons, including the corresponding increase in the value of Performance RSUs with the growth in value of the Company’s common stock; the continued impact of changes in the value of the Company’s common stock on the value of the Performance RSUs, even at levels below the fair market value of such common stock on the date of grant. In addition, the use of a return on invested capital performance goal introduces a capital efficiency metric in the Company’s incentive program and further enhances the focus on long-term performance.Mr. Lee, $675,000.
Retirement Plan Benefits
The Named Executive OfficersOur NEOs, other than Mr. de Miguel, participate in our 401(k) savings plan and our nonqualified retirement plan. Benefits under these plans provide executives with an income source during their retirement years and reward executives for long service to the Company. Messrs. Stephenson and Campbell are also covered under our Qualified Defined Benefit Plan, which was frozen January 31, 2009. Mr. de Miguel, who is employed primarily in Germany, receives a percentage of his annual base salary as a defined contribution retirement benefit. We believe that our retirement plans are generally competitive in the industries in which we compete for executivesautomotive industry and assist the Company in attracting and retaining a high caliber executive leadership team. Please see the 20142015 Pension Benefits table, the 20142015 Nonqualified Deferred Compensation table, and the accompanying narratives for further information regarding the Company’sour retirement plans.
Termination and Change in Control Benefits
TwoOne of our Named Executive Officers, Messrs.NEOs, Mr. Stephenson, and Campbell, receivereceives certain benefits under theirhis employment agreements with the Companyagreement upon certain termination of employment events, including following a change in control of the Company. Two of our Named Executive Officers, Messrs. Edwards, Lee and Lee,Hardt, who aredo not party to formalhave employment agreements, are entitled to such benefits through the Company’sour Executive Severance Pay Plan. These benefits, described in detail under “Terms Applicable to Payments upon Termination of Employment” below,Employment,” are intended to ensure that the executive leadership team is able to objectively evaluate potential change in control transactions by addressingwithout the distraction of the potential personal impact of such transactions may have on employment of our executives.
Effective November 1, 2015, Allen Campbell’s employment was terminated without cause. Pursuant to the terms of his employment agreement and in exchange for a non-competition covenant and a full release of claims, Mr. Campbell received: (a) a lump sum cash payment equaling two times the sum of (i) his base salary plus (ii) his target annual incentive for the year prior to his termination; (b) pro-rata portion of the 2015 annual incentive award for the ten months he was employed in 2015 based on actual performance; (c) amounts to which he was entitled under our nonqualified Supplemental Executive Retirement Plan; and (d) twenty-four months of continued life and health insurance benefits. Mr. Campbell’s outstanding equity awards were treated according to the terms of the applicable equity award agreements. Mr. Campbell will receive items (a), (c), (d), and his outstanding RSUs six months after separation of service in accordance with 409A of the Internal Revenue Code.
Health Benefits
The Company provides the Named Executive OfficersWe provide our NEOs, other than Mr. de Miguel, with health and welfare benefits under its Health & Well-Being Benefit Plan that is madeare available generally to itsall of our salaried employees. The Health & Well-Being Benefit PlanOur plan is a flexible plan which permits participants to choose among various co-pay
options and available benefits, including medical, prescription drug, dental, long-term disability and life insurance, and other benefits, depending on the needs of the participant and his or her dependents. These benefits help the Companyus remain competitive in attracting and retaining a high caliber management team. Mr. de Miguel, who is employed primarily in Germany, is provided with health insurance comparable in value to that provided the other Named Executive OfficersNEOs under the Health & Well-Being Benefit Plan.our plan.
Perquisites
The Company provides each of its seniorOur executives are provided with a vehicle for business and personal use through the Company’sa vehicle lease program or through a vehicle allowance. The Company regards thisThis program helps us to be of benefit in attractingattract and retainingretain a high caliber management team as it is a common industry perquisite. Thisin the very competitive automotive supplier industry. The value of this benefit is treated by the Company as taxableordinary income to the participant tofor tax purposes at the full extent of its value, and participants, including the Named Executive Officers, areNEOs, do not entitled toreceive any full or partial tax “gross up” paymentpayments or similar compensation relating to cover this tax effect.tax.
Relocation and Expatriate Benefits
Messrs. de Miguel and Lee commenced their employment with the Companyus in 2013 as presidents of the Company’sour business units in the Europe and Asia Pacific regions, respectively. Mr. de Miguel is also the president of our South America business unit. In addition to the base salary and incentive compensation described above, the Company also agreed to provideMessrs. de Miguel and Lee receive certain relocation and expatriate benefits. With respect to Mr. de Miguel who relocated to Germany, the Company agreed to providereceives Company-leased housing at his assignment location and a monthly allowance for additional living expenses. With respect to Mr. Lee the Company agreed to providereceives Company-leased housing at his assignment location and other amounts associated with his assignment, including a goods and services allowance. Mr. Lee’s expatriate benefits also include tax equalization payments and tax preparation services. These considerations were deemed by the Committee asWe believe these benefits are appropriate means of attractingto attract highly qualified candidates to acceptfor key international leadership positions in competitive markets for executive automotive talent.
Stock Ownership Policy
In March 2014, the Board adopted a policy requiringWe require that corporatecertain of our officers of the Company achieve specifiedand maintain levels of ownership of the Company’sour common stock. The required ownership levels are based on multiples of each officer’s base salary. Under the newour policy, officers are required to hold 50% of the net shares resulting from stock option exercises or vesting of other stock-based awards until they reach theirthe applicable stock ownership level. Only shares owned outright and time-vested RSUs count toward satisfaction of the guideline (time-vested RSUs are counted on an after-tax basis assuming a 35% tax rate for ease of administration). This policy is intended to align the interests of the Company’sour key executives with the interests of our stockholders by maintaining a strong link between the Company’s long-term success and the ultimate compensation of key executives. The stock ownership levels that must be achieved by the Company’s officers are as follows:
Positions | Stock Ownership Level (Multiple of Base Salary) | |||
Chief Executive Officer | 6X | |||
Chief Operating Officer; Chief Financial Officer | 3X | |||
Regional President; General Counsel; Chief Human Resources | 2X | |||
Chief Accounting Officer; Other | 1X |
All Named Executive OfficersNEOs are in compliance at the required multiple of Base Salarybase salary or are retaining their acquired amounts until they reach the required multiple.
Policy Concerning Transactions Involving Company Securities
The Company hasWe have a policy applicable to all directors, officers, and employees that prohibits certain transactions involving the Company’s securities,our stock, including engaging in short-term speculative transactions, involving the Company’s securities, such as hedging transactions and buying or selling put or call options, holding the Company’s securities in a margin account, pledging the Company’s securities as collateral for a loan, or engaging in short sales of the Company’s securities.
Compensation RecoveryClawback Policy
The Compensation Committee and Board of Directors approvedCooper Standard has a compensation recovery policy in 2014.(“clawback”) policy. The policy providesauthorizes the Board the ability to recoup incentive compensation upon a financial restatement. The policy appliespaid to all of the executive officers, ofincluding our NEOs, in the Company.event the Company experiences a material financial restatement. Recoverable compensation is any cash or equity-based compensation for which the grant, payment, or vesting was predicated upon the achievementsachievement of financial results that were impacted by the restatement.derived from financial statements that are required to be restated, except where such restatement is required due to changes in accounting rules or standards or changes in applicable law.
The Compensation Committee of the Board of Directors of Cooper-Standard Holdings Inc. oversees the Company’sour executive compensation program on behalf of the Board.program. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis set forth in this proxy statement.
In reliance on the review and discussions referred to above, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be incorporated in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014,2015, and the Company’sincluded in this Proxy Statement to be filed in connection with the Company’s 2015 Annual Meeting.Statement.
Compensation Committee
Kenneth L. Way
Larry J. Jutte
Glenn R. August, Chair
Robert J. Remenar
Stephen A. Van Oss
Set forth below is information regarding compensation for services to the Company in all capacities of the following executive officers of the Company (the “Named Executive Officers” or “NEOs”) during the year ended December 31, 2014:2015: (i) our current Chief Executive Officer; (ii) our current Chief Financial Officer; (iii) our former Chief Financial Officer; and (iii)(iv) the three3 most highly compensated executive officers other than the Chief Executive Officer and Chief Financial Officer who were serving as executive officers at December 31, 2014.2015.
20142015 SUMMARY COMPENSATION TABLE
Name and Principal Position
| Year (b) | Salary (c) | Bonus (d) | Stock Awards (2) (e) | Option Awards (3) (f) | Non-Equity Incentive Plan Compensation (4) (g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (5) (h) | All Other Compensation (i) | Total (j) | Year | Salary (2) | Bonus | Stock Awards (3) | Option Awards (4) | Non-Equity Incentive Plan Compensation (5) | Change in Pension Value and Nonqualified | All Other Compensation | Total (7) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Edwards, Chairman and Chief Executive Officer | 2014 | $824,808 | $0 | td,536,536 | $667,986 | $414,525 | $0 | td39,479 | (6) | $3,583,334 | (11) | 2015 | $ | 849,712 | – | $ | 1,553,052 | $ | 671,803 | $ | 3,310,870 | – | $ | 165,530 | (8) | $ | 6,550,967 | |||||||||||||||||||||||||||||||||||||||||
2013 | $800,000 | $0 | $416,223 | $557,614 | $562,104 | $0 | $93,470 | td,429,411 | 2014 | $ | 824,808 | – | $ | 1,536,536 | $ | 667,986 | $ | 414,525 | – | $ | 139,479 | $ | 3,583,334 | |||||||||||||||||||||||||||||||||||||||||||||
2012 | td53,846 | td70,492 | $0 | $3,898,041 | $0 | $0 | $6,723 | $4,229,102 | 2013 | $ | 800,000 | – | $ | 416,223 | $ | 557,614 | $ | 562,104 | – | $ | 93,470 | $ | 2,429,411 | |||||||||||||||||||||||||||||||||||||||||||||
Keith D. Stephenson, Executive Vice President and Chief Operating Officer | 2014 | $609,846 | $0 | $860,990 | $374,826 | td18,926 | td,766 | td67,052 | (7) | td,234,406 | (11) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | $ | 361,539 | – | $ | 371,382 | $ | 160,611 | $ | 364,520 | – | $ | 201,998 | (9) | $ | 1,460,050 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | $ | 472,062 | – | $ | 624,597 | $ | 271,139 | $ | 423,755 | $ | 1,731 | $ | 2,216,609 | (10) | $ | 4,009,893 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Allen J. Campbell, Former Executive Vice President and Chief Financial Officer | 2014 | $ | 549,846 | – | $ | 649,054 | $ | 282,690 | $ | 171,074 | $ | 16,620 | $ | 180,403 | $ | 1,849,687 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | $ | 526,308 | – | $ | 170,456 | $ | 229,744 | $ | 242,056 | – | $ | 218,554 | $ | 1,387,118 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Keith D. Stephenson, Executive Vice President and Chief Operating Officer |
2013 | $586,308 | $0 | td24,692 | $303,096 | $310,914 | $0 | td02,698 | td,627,708 | 2015 | $ | 627,792 | – | $ | 827,169 | $ | 359,216 | $ | 1,781,342 | $ | 45 | $ | 179,558 | (11) | $ | 3,775,122 | ||||||||||||||||||||||||||||||||||||||||||
2012 | $550,000 | $0 | td11,500 | $376,479 | $507,495 | $0 | td79,190 | td,924,664 | 2014 | $ | 609,846 | – | $ | 860,990 | $ | 374,826 | $ | 218,926 | $ | 2,766 | $ | 167,052 | $ | 2,234,406 | ||||||||||||||||||||||||||||||||||||||||||||
2013 | $ | 586,308 | – | $ | 224,692 | $ | 303,096 | $ | 310,914 | – | $ | 202,698 | $ | 1,627,708 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Song Min Lee, Senior Vice President and President, Asia Pacific | 2014 | $514,885 | $0 | $516,594 | td26,152 | td31,883 | $0 | $652,020 | (8) | td,141,534 | (11) | 2015 | $ | 529,539 | – | $ | 495,176 | $ | 215,875 | $ | 1,158,678 | – | $ | 705,261 | (12) | $ | 3,104,529 | |||||||||||||||||||||||||||||||||||||||||
2013 | $469,231 | $75,000 | td35,590 | td82,688 | td28,355 | $0 | $408,343 | td,499,207 | 2014 | $ | 514,885 | – | $ | 516,594 | $ | 226,152 | $ | 231,883 | – | $ | 652,020 | $ | 2,141,534 | |||||||||||||||||||||||||||||||||||||||||||||
2013 | $ | 469,231 | $ | 75,000 | $ | 135,590 | $ | 182,688 | $ | 228,355 | – | $ | 408,343 | $ | 1,499,207 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allen J. Campbell, Executive Vice President and Chief Financial Officer | 2014 | $549,846 | $0 | $649,054 | td82,690 | td71,074 | td6,620 | td80,403 | (9) | td,849,687 | (11) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | $526,308 | $0 | td70,456 | td29,744 | td42,056 | $0 | td18,554 | td,387,118 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | $490,000 | $0 | td57,500 | td82,891 | $442,042 | td82 | $308,210 | td,680,925 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fernando de Miguel, Senior Vice President and President, Europe(1) | 2014 | $498,942 | $0 | $562,955 | td44,998 | td49,791 | $0 | td48,614 | (10) | td,705,300 | (11) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 |
$459,205 |
|
$344,404 |
|
|
td43,450 |
|
|
td03,775 |
|
|
td51,668 |
|
|
$0 |
|
|
td92,543 |
|
|
td,595,045 |
| ||||||||||||||||||||||||||||||||||||||||||||||
Fernando de Miguel, Senior Vice President and President, Europe and South America | 2015 | $ | 487,907 | – | $ | 540,192 | $ | 234,872 | $ | 1,153,527 | – | $ | 226,350 | (13) | $ | 2,642,848 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | $ | 498,942 | – | $ | 562,955 | $ | 244,998 | $ | 149,791 | – | $ | 248,614 | $ | 1,705,300 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | $ | 459,205 | $ | 344,404 | $ | 143,450 | $ | 203,775 | $ | 251,668 | – | $ | 192,543 | $ | 1,595,045 |
(1) | Mr. Hardt joined the company as Executive Vice President effective February 2, 2015 and became Executive Vice President and Chief Financial Officer effective March 2, 2015. |
Mr. Campbell was the Executive Vice President and Chief Financial Officer until March 2, 2015 and then Mr. Campbell served as Executive Vice President and Chief Infrastructure Officer until his departure from the Company, effective November 1, 2015. |
Compensation for Mr. de Miguel, |
(2) | Amounts shown reflect the Named Executive Officer’s annual base salary earned during the fiscal year taking into account any increases in base salary during the course of the year and are not reduced to reflect the NEOs’ elections, if any, to defer receipt of salary into the CSA Savings Plan for salaried U.S. employees. Increases in base salary, if any, for NEOs for the fiscal year were determined effective as of the beginning of the year. For Mr. Campbell, salary earned in 2015 reflects that portion of his annual base salary earned until November 1, 2015, the effective date of his separation from the Company. |
| The amounts shown in column (e) represent the aggregate grant-date fair value of |
Hardt, $528,938. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Assumptions used in the calculation of these amounts are included in Note 18 to the Company’s audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, |
| The amounts shown in column (f) represent the aggregate grant-date fair value of stock option awards granted under the Omnibus Plan and are computed in accordance with ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 18 to the Company’s audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, |
| The amounts shown in column (g) represent the sum of (i) bonus payments for |
| The amount shown in column (h) represents for each |
| The percentages of total compensation in 2015 that were attributable to base salary and total bonus (the amounts identified in columns (d) and (g)) were as follows: for Mr. Edwards, base salary 13.0%, bonus 50.5%; for Mr. Campbell, base salary 11.8%, bonus 10.6%; for Mr. Stephenson, base salary 16.6%, bonus 47.2%; Mr. Lee, base salary 17.1%, bonus 37.3%; for Mr. de Miguel, base salary 18.5%, bonus 43.6%; and for Mr. Hardt, base salary 24.8%, bonus 25%. |
(8) | The amount shown in column (i) for Mr. Edwards represents Company contributions under the qualified 401(k) CSA Savings Plan ($ |
| The amount shown in column (i) for Mr. Hardt represents Company contributions under the qualified 401(k) CSA Savings Plan ($18,550); nonqualified Supplemental Executive Retirement Plan ($19,412); moving |
expenses ($158,406); the cost of a Company-provided vehicle; and life insurance premiums paid by the Company. |
(10) | The amount shown in column (i) for Mr. Campbell represents Company contributions under the qualified 401(k) CSA Savings Plan ($18,550) and nonqualified Supplemental Executive Retirement Plan ($116,508); the cost of a Company-provided vehicle; severance pay ($2,068,571); and life insurance premiums paid by the Company. Mr. Campbell’s severance pay cannot be paid out until six months after his separation of service; therefore, the severance payment will not occur until 2016. |
(11) | The amount shown in column (i) for Mr. Stephenson represents Company contributions under the qualified 401(k) CSA Savings Plan ($ |
| The amount shown in column (i) for Mr. Lee represents Company contributions under the qualified 401(k) CSA Savings Plan ($ |
|
The amount shown in column (i) for Mr. de Miguel represents Company contributions to defined contribution pension scheme ($ |
20142015 GRANTS OF PLAN-BASED AWARDS
The following table sets forth information regarding plan-based awards made to the Named Executive Officers during 2014.2015.
Estimated Future Payouts Under Non- Equity Incentive Plan Awards
| Estimated Future Payouts Under Equity Incentive Plan Awards(5)
| All Other Stock Awards: Number of Shares or Units of Stock (#) (i) | All Other Option Awards; Number of Securities Underlying Options (j) | Exercise or Base Price of Option Awards ($/sh)(6) (k) | Grant-date fair value of Stock and Option Awards ($) (7) (l) | Estimated Future Payouts Under Non- Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | All Other Stock Awards: Number of Shares or Units of Stock (#) | All Other Option Awards; Number of Securities Underlying Options | Exercise or Base Price of Option Awards ($/sh) (2) | Grant-date fair value of Stock and Option Awards ($)(3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Award Type
| Grant Date (b) | Threshold (c) | Target (d) | Maximum (e) | Threshold (f) | Target (g) | Maximum (h) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Award Type | Grant Date | Threshold | Target | Maximum | Threshold | Target | Maximum | All Other Stock Awards: Number of Shares or Units of Stock (#) | All Other Option Awards; Number of Securities Underlying Options | Exercise or Base Price of Option Awards ($/sh) (2) | Grant-date fair value of Stock and Option Awards ($)(3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) |
| (b) | (c) | (d) | (e) | (f) | (g) | (h) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Edwards | Annual Bonus (1) | 1/1/2014 | $433,125 | $866,250 | $1,732,500 | – | – | – | – | – | – | – | Annual Bonus (4) | 1/1/2015 | $ | 140,250 | $ | 935,000 | $ | 1,870,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Options (2) | 3/20/2014 | – | – | – | – | – | – | – | 31,900 | 66.23 | 667,986 | Options(5) | 2/19/2015 | 38,900 | 56.27 | 671,803 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs (6) | 2/19/2015 | 7,900 | 444,533 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs (7) | 2/19/2015 | 9,850 | 19,700 | 39,400 | 1,108,519 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allen J. Campbell | Annual Bonus (4) | 1/1/2015 | $ | 54,405 | $ | 362,700 | $ | 725,400 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units (3) | 3/20/2014 | – | – | – | – | – | – | 6,600 | – | – | 437,118 | Options (5) | 2/19/2015 | 15,700 | 56.27 | 271,139 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs (4) | 3/20/2014 | – | – | – | 8,300 | 16,600 | 33,200 | – | – | – | 1,099,418 | RSUs (6) | 2/19/2015 | 3,200 | 180,064 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs (7) | 2/19/2015 | 3,950 | 7,900 | 15,800 | 444,533 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Keith D. Stephenson | Annual Bonus (1) | 1/1/2014 | $228,750 | $457,500 | $915,000 | – | – | – | – | – | – | – | Annual Bonus (4) | 1/1/2015 | $ | 70,650 | $ | 471,000 | $ | 942,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Options (2) | 3/20/2014 | – | – | – | – | – | – | – | 17,900 | 66.23 | 374,826 | Options (5) | 2/19/2015 | 20,800 | 56.27 | 359,216 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units (3) | 3/20/2014 | – | – | – | – | – | – | 3,700 | – | – | 245,051 | RSUs(6) | 2/19/2015 | 4,200 | 236,334 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs (4) | 3/20/2014 | – | – | – | 4,650 | 9,300 | 18,600 | – | – | – | 615,939 | Performance RSUs(7) | 2/19/2015 | 5,250 | 10,500 | 21,000 | 590,835 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Song Min Lee | Annual Bonus (1) | 1/1/2014 | $167,375 | $334,750 | $669,500 | – | – | – | – | – | – | – | Annual Bonus(4) | 1/1/2015 | $ | 51,675 | $ | 344,500 | $ | 689,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Options (2) | 3/20/2014 | – | – | – | – | – | – | – | 10,800 | 66.23 | 226,152 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units (3) | 3/20/2014 | – | – | – | – | – | – | 2,200 | – | – | 145,706 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs (4) | 3/20/2014 | – | – | – | 2,800 | 5,600 | 11,200 | – | – | – | 370,888 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allen J. Campbell | Annual Bonus (1) | 1/1/2014 | $178,750 | $357,500 | $715,000 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options (2) | 3/20/2014 | – | – | – | – | – | – | – | 13,500 | 66.23 | 282,690 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units (3) | 3/20/2014 | – | – | – | – | – | – | 2,800 | – | – | 185,444 | Options(5) | 2/19/2015 | 12,500 | 56.27 | 215,875 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs (4) | 3/20/2014 | – | – | – | 3,500 | 7,000 | 14,000 | – | – | – | 463,610 | RSUs(6) | 2/19/2015 | 2,500 | 140,675 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs(7) | 2/19/2015 | 3,150 | 6,300 | 12,600 | 354,501 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fernando de Miguel | Annual Bonus (1) | 1/1/2014 | $162,156 | $324,312 | $648,624 | – | – | – | – | – | – | – | Annual Bonus(4) | 1/1/2015 | $ | 47,571 | $ | 317,140 | $ | 634,280 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Options (2) | 3/20/2014 | – | – | – | – | – | – | – | 11,700 | 66.23 | 244,998 | Options(5) | 2/19/2015 | 13,600 | 56.27 | 234,872 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units (3) | 3/20/2014 | – | – | – | – | – | – | 2,400 | – | – | 158,952 | RSUs(6) | 2/19/2015 | 2,700 | 151,929 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs (4) | 3/20/2014 | – | – | – | 3,050 | 6,100 | 12,200 | – | – | – | 404,003 | Performance RSUs(7) | 2/19/2015 | 3,450 | 6,900 | 13,800 | 388,263 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew W. Hardt | Annual Bonus(4) | 1/1/2015 | $ | 39,000 | $ | 260,000 | $ | 520,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options(5) | 2/19/2015 | 9,300 | 56.27 | 160,611 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSUs(6) | 2/19/2015 | 1,900 | 106,913 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance RSUs(7) | 2/19/2015 | 2,350 | 4,700 | 9,400 | 264,469 |
(1) | Represents the range of potential payouts under the Performance RSUs granted under the Omnibus Plan in 2015. The number of Performance RSUs that are earned, if any, will be based on performance for fiscal years 2015 to 2017 and will be determined after the end of fiscal year 2017. |
(2) | Represents the exercise price of options granted under the Omnibus Plan. |
(3) | Represents the grant-date fair value of RSUs, Performance RSUs and stock option awards granted under the Omnibus Plan, computed in accordance with ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 18 to the Company’s audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. |
(4) | For |
Represents |
grant and expire on the earliest to occur of: (i) the tenth anniversary of the date of grant; (ii) the first anniversary (as defined in the Omnibus Plan) of the date of the optionee’s termination of employment due to death or disability, or in connection with a Change of Control; (iii) the third anniversary of the date of the optionee’s termination of employment due to retirement after attaining age 65 or attaining age 60 with at least 5 years of service; or (iv) 90 days following the date of the optionee’s termination of employment by the Company |
Represents time-vested RSUs granted under the Omnibus Plan. These RSUs cliff vest on the third anniversary of the date of grant. |
Represents Performance RSUs granted under the Omnibus Plan. These Performance RSUs vest if the executive continues |
OUTSTANDING EQUITY AWARDS AT 20142015 FISCAL YEAR END
The following table sets forth information concerning outstanding equity awards held by the Named Executive Officers at December 31, 2014.2015.
Option Awards(1) | Stock Awards | Option Awards(1) | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (2)
(b) | Equity Incentive Plan Awards Number of Securities Underlying Unexercised Unearned Options
(c) | Option Exercise Price
(d) | Option Expiration Date
(e) | Number of Shares or Units of Stock That Have Not Vested
(f) | Market Value of Shares or Units of Stock That Have Not Vested (18)
(g) | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested (19)
(h) | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (21)
(i) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable (2) | Number of Securities Underlying Unearned Options | Number of Options | Option Exercise Price | Option Expiration Date | Number Shares or Units of Stock That Have Not Vested | Market Have Not Vested (3) | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey S. Edwards | 50,000 | 75,000 | (3) | $ | 45.00 | 10/15/2019 | (9) | 10,744 | (13) | $621,863 | – | – | 75,000 | 50,000 | (4) | $ | 45.00 | 10/15/2019 | (5) | 10,744 | (6) | $ | 833,627 | 8,300 | (7) | $ | 643,997 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 50,000 |
| 75,000 | (3) | $ | 52.50 | 10/15/2019 | (9) | 6,600 | (14) | $382,008 | – | – | 75,000 | 50,000 | (4) | $ | 52.50 | 10/15/2019 | (5) | 6,600 | (8) | $ | 512,094 | 39,400 | (9) | $ | 3,057,046 | ||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 40,290 | (10) | $ | 38.74 | 2/15/2023 | (11) | 7,900 | (12) | $ | 612,961 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10,633 | 21,267 | (13) | $ | 66.23 | 3/20/2024 | (14) | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 38,900 | (15) | $ | 56.27 | 2/19/2025 | (14) | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allen J. Campbell | 93,000 | 0 | $ | 25.52 | 11/1/2016 | (16) | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9,106 | 0 | $ | 25.52 | 11/1/2016 | (16) | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 40,290 | (4) | $ | 38.74 | 2/15/2023 | (10) | – | – | 16,600 | (20 | ) | $ | 960,808 | 8,700 | 0 | $ | 46.75 | 11/1/2016 | (16) | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 31,900 | (5) | $ | 66.23 | 3/20/2024 | (11) | – | – | – | – | 13,300 | 0 | $ | 45.00 | 11/1/2016 | (16) | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4,500 | 0 | $ | 66.23 | 1/30/2016 | (17) | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Keith D. Stephenson | 93,000 | 0 | $ | 25.52 | 5/27/2020 | (12) | 4,964 | (15) | td87,316 | – | – | 93,000 | 0 | $ | 25.52 | 5/27/2020 | (11) | 3,843 | (18) | $ | 298,178 | 4,650 | (7) | $ | 360,794 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
4,108 | 7,833 | (6) | $ | 25.52 | 5/27/2020 | (12) | 4,700 | (16) | td72,036 | – | – | 5,877 | 6,064 | (19) | 0 | $ | 25.52 | 5/27/2020 | (20) | 5,800 | (6) | $ | 450,022 | 21,000 | (9) | $ | 1,629,390 | |||||||||||||||||||||||||||||||||||||||||||||||||||
13,000 | 0 | $ | 46.75 | 3/15/2021 | (10) | 5,800 | (13) | $335,704 | – | – | 13,000 | 0 | $ | 46.75 | 3/15/2021 | (11) | 3,700 | (8) | $ | 287,083 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 17,700 | (7) | $ | 45.00 | 3/9/2022 | (10) | 3,700 | (14) | $214,156 | – | – | 17,700 | 0 | $ | 45.00 | 3/9/2022 | (11) | 4,200 | (12) | $ | 325,878 | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 21,900 | (4) | $ | 38.74 | 2/15/2023 | (10) | – | – | 9,300 | (20 | ) | $ | 538,284 | 0 | 21,900 | (10) | $ | 38.74 | 2/15/2023 | (11) | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 17,900 | (5) | $ | 66.23 | 3/20/2024 | (11) | – | – | – | – | 5,967 | 11,933 | (13) | $ | 66.23 | 3/20/2024 | (14) | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 20,800 | (15) | $ | 56.27 | 2/19/2025 | (14) | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Song Min Lee | 0 | 13,200 | (4) | $ | 38.74 | 2/15/2023 | (10) | 3,500 | (13) | td02,580 | – | – | 0 | 13,200 | (10) | $ | 38.74 | 2/15/2023 | (11) | 3,500 | (6) | $ | 271,565 | 2,800 | (7) | $ | 217,252 | |||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 10,800 | (5) | $ | 66.23 | 3/20/2024 | (11) | 2,200 | (14) | td27,336 | – | – | 3,600 | 7,200 | (13) | $ | 66.23 | 3/20/2024 | (14) | 2,200 | (8) | $ | 170,698 | 12,600 | (9) | $ | 977,634 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | – | – | 5,600 | (20 | ) | $ | 324,128 | 0 | 12,500 | (15) | $ | 56.27 | 2/19/2025 | (14) | 2,500 | (12) | $ | 193,975 | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allen J. Campbell | 93,000 | 0 | $ | 25.52 | 5/27/2020 | (12) | 4,964 | (15) | td87,316 | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4,108 | 7,833 | (6) | $ | 25.52 | 5/27/2020 | (12) | 3,500 | (16) | td02,580 | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8,700 | 0 | $ | 46.75 | 3/15/2021 | (10) | 4,400 | (13) | $254,672 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 13,300 | (7) | $ | 45.00 | 3/9/2022 | (10) | 2,800 | (14) | $162,064 | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 16,600 | (4) | $ | 38.74 | 2/15/2023 | (10) | – | – | 7,000 | (20 | ) | $ | 405,160 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 13,500 | (5) | $ | 66.23 | 3/20/2024 | (11) | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fernando de Miguel | 0 | 14,300 | (8) | $ | 37.75 | 3/1/2023 | (10) | 3,800 | (17) | td19,944 | – | – | 0 | 14,300 | (21) | $ | 37.75 | 3/1/2023 | (11) | 3,800 | (22) | $ | 294,842 | 3,050 | (7) | $ | 236,650 | |||||||||||||||||||||||||||||||||||||||||||||||||||
0 | 11,700 | (5) | $ | 66.23 | 3/20/2024 | (11) | 2,400 | (14) | td38,912 | – | – | 3,900 | 7,800 | (13) | $ | 66.23 | 3/20/2024 | (14) | 2,400 | (8) | $ | 186,216 | 13,800 | (9) | $ | 1,070,742 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
– | – | – | – | – | – | 6,100 | (20 | ) | $ | 353,068 | 0 | 13,600 | (15) | $ | 56.27 | 2/19/2025 | (14) | 2,700 | (12) | $ | 209,493 | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew W. Hardt | 0 | 9,300 | (15) | $ | 56.27 | 2/19/2025 | (14) | 1,900 | (12) | $ | 147,421 | 9,400 | (9) | $ | 729,346 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) | All of the amounts presented in this portion of the table relate to options to purchase shares of the Company’s common stock granted to the |
(2) | Represents |
(3) | The values in column (h) equal the total number of shares of stock or RSUs listed in column (g) for each NEO multiplied by the value of Company common stock as of December 31, 2015. |
The values in column (j) equal the total number of shares of stock or Performance RSUs listed in column (i) for each NEO multiplied by the value of Company common stock as of December 31, 2015. |
The value of common stock as of December 31, 2015 was $77.59 per share, which was the December 31, 2015 closing price of Company stock listed on the NYSE. |
(4) | Represents outstanding time-based options granted October 15, 2012, which have not |
(5) |
Options listed were granted to Mr. Edwards on October 15, 2012, and expire on the earliest to occur of: (i) the seventh anniversary of the date of grant; (ii) the first anniversary of the date of the optionee’s termination of employment due to death, disability, retirement after attaining age 65 or attaining age 60 with at least |
(6) | Represents time-vested RSUs granted on February 15, 2013, under the Omnibus Plan that had not yet vested as of December 31, 2015, with respect to the following number of RSUs: for Mr. Edwards, 10,744; for Mr. Stephenson, 5,800; and for Mr. Lee, 3,500. These RSUs cliff vest on the third anniversary of the date of grant. |
(7) | Target awards of Performance RSUs were granted in March 2014, to be earned in a multiple ranging from zero to two times the target awards based on our performance during 2014 to 2016. The Performance RSUs earned will be settled in 2017. Performance for 2014 to 2015 was below the threshold level; therefore, the threshold amounts are shown in accordance with SEC rules. |
Represents Performance RSUs granted on March 20, 2014, under the Omnibus Plan that had not yet become vested as of December 31, 2015, with respect to the following number of Performance RSUs: for Mr. Edwards, 16,600; for Mr. Stephenson, 9,300; Mr. Lee, 5,600; and for Mr. de Miguel, 6,100. These Performance RSUs vest if the executive continues in employment with the Company until the end of the performance period ending on December 31, 2016, and will be subject to the achievement of the performance goals during the performance period commencing on January 1, 2014, and ending on December 31, 2016. |
(8) | Represents time-vested RSUs granted on March 20, 2014, under the Omnibus Plan that had not yet vested as of December 31, 2015, with respect to the following number of RSUs: for Mr. Edwards, 6,600; for Mr. Stephenson, 3,700; for Mr. Lee, 2,200; and for Mr. de Miguel, 2,400. These RSUs cliff vest on the third anniversary of the date of grant. |
(9) | Target awards of Performance RSUs were granted in February 2015 to be earned in a multiple ranging from zero to two times the target awards based on our performance during 2015 to 2017. The Performance RSUs earned will be settled in 2018. Performance for 2015 was above the target level but below maximum; therefore, the maximum amounts are shown in accordance with SEC rules. |
Represents Performance RSUs granted on February 19, 2015, under the Omnibus Plan that had not yet become vested as of December 31, 2015, with respect to the following number of Performance RSUs: for Mr. Edwards, 19,700; for Mr. Stephenson, 10,500; for Mr. Lee, 6,300; for Mr. de Miguel, 6,900; and for Mr. Hardt, 4,700. These Performance RSUs vest if the executive continues in employment with the Company until the end of the performance period ending on December 31, 2017, and will be subject to the achievement of the performance goals during the performance period commencing on January 1, 2015, and ending on December 31, 2017. |
(10) |
(11) | Options listed expire on the earliest to occur of: (i) the tenth anniversary of the date of grant; (ii) the first anniversary of the date of the optionee’s termination of employment due to death, disability, retirement after attaining age 65 or attaining age 60 with at least |
following the date of the optionee’s termination of employment by the Company with cause or by the optionee without good reason. |
(13) | Represents outstanding options granted March 20, 2014, which have not vested and were unexercisable as of December 31, 2015, with respect to the following number of granted options: for Mr. Edwards, 31,900; for Mr. Stephenson, 17,900; for Mr. Lee, 10,800; and for Mr. de Miguel, 11,700. These options vest ratably over three years. |
(14) | Options listed expire on the earliest to occur of: (i) the tenth anniversary of the date of grant; (ii) the first anniversary of the date of the optionee’s termination of employment due to death or disability, or in connection with a Change of Control; (iii) the third anniversary of the date of the optionee’s termination of employment due to retirement after attaining age 65 or attaining age 60 with at least |
(16) | Options and options in respect of warrants listed were granted to Mr. Campbell on May 27, 2010, March 15, 2011, and March 9, 2012, and have an Option Expiration Date of November 1, 2016 (the first anniversary of Mr. Campbell’s separation of service on November 1, 2015, pursuant to the terms of his award agreements). |
(17) | Options listed were granted to Mr. Campbell on March 20, 2014, and have an Option Expiration Date of January 30, 2016, (90 days from the date of Mr. Campbell’s separation of service on November 1, 2015, pursuant to terms of his award agreement). |
(18) | Represents shares of restricted common stock in respect of warrants granted on May 27, 2010, under the Company’s Management Incentive Plan that had not yet become vested as of December 31, 2015, with respect to the 7,566 shares of the Company’s common stock granted to Mr. Stephenson. These shares vest ratably over four years but only in proportion and to the extent that warrants of the Company held by third parties have been exercised. |
(19) | Represents outstanding options in respect of warrants granted May 27, 2010, which have not been earned and were unexercisable as of December 31, 2015, with respect to the 11,941 options in respect of warrants that were granted to Mr. Stephenson. These options vest ratably over four years but only in proportion and to the extent that warrants of the Company held by third parties have been exercised. |
(20) | Options and options in respect of warrants listed expire on the earliest to occur of: (i) the tenth anniversary of the date of grant; (ii) the first anniversary of the date of the optionee’s termination of employment due to death, disability, retirement at normal retirement age under the Company’s qualified retirement plan, by the Company without cause, by the optionee for good reason, or in connection with a change in control; or (iii) 90 days following the date of the optionee’s termination |
Represents |
Represents |
20142015 OPTION EXERCISES AND STOCK VESTED
The following table sets forth information concerning the exercise of stock options and vesting of stock for each Named Executive Officer during 2014.2015.
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | |||||||||
Name (a) | (b) | (c) | (d) | (e) | (b) | (c) | (d) | (e) | ||||||||
Jeffrey S. Edwards | – | – | – | – | – | – | – | – | ||||||||
Matthew W. Hardt | – | – | – | – | ||||||||||||
Allen J. Campbell(1) | – | – | 3,500 (2) | 187,705 (3) | ||||||||||||
– | – | 3,167 (4) | 203,700 (5) | |||||||||||||
– | – | – | – | – | – | 3,974 (6) | 308,343 (7) | |||||||||
Keith D. Stephenson | – | – | 13,713 (1) | 866,662 (4) | – | – | 4,700 (2) | 252,061 (3) | ||||||||
– | – | 1,643 (2) | 105,666 (5) | – | – | 1,121 (4) | 71,341 (5) | |||||||||
– | – | 3,408 (3) | 215,386 (4) | |||||||||||||
Song Min Lee | – | – | – | – | – | – | – | – | ||||||||
– | – | – | – | |||||||||||||
Allen J. Campbell | – | – | 13,713 (1) | 866,662 (4) | ||||||||||||
– | – | 1,643 (2) | 105,666 (5) | |||||||||||||
– | – | 3,408 (3) | 215,386 (4) | |||||||||||||
Fernando de Miguel | – | – | – | – | – | – | – | – | ||||||||
– | – | – | – |
(1) | Mr. Campbell’s separation from the Company was effective November 1, 2015. There were no modifications made to his equity awards at the time of Mr. Campbell’s departure from the Company; the treatment of outstanding equity awards was prescribed in the applicable award agreements. The chart below illustrates the treatment of Mr. Campbell’s outstanding equity awards on November 1, 2015. |
Grant Name | Option Exercise Price | Outstanding 11/1/2015 | Exercisable Prior to Departure | Vesting 11/1/2015 | Forfeited 11/1/2015 | Option Expiration Date | ||||||||||||||||||
May 27, 2010 Restricted Common Stock in Respect of Warrants | – | 3,922 | – | 2,125 | 1,797 | – | ||||||||||||||||||
5/27/2010 Options in Respect of Warrants | $ | 25.52 | 11,941 | 5,753 | 3,353 | 2,835 | 11/1/2016 | |||||||||||||||||
5/27/2010 Options | $ | 25.52 | 93,000 | 93,000 | – | – | 11/1/2016 | |||||||||||||||||
3/15/2011 Options | $ | 46.75 | 8,700 | 8,700 | – | – | 11/1/2016 | |||||||||||||||||
3/9/2012 Options | $ | 45.00 | 13,300 | 13,300 | – | – | 11/1/2016 | |||||||||||||||||
2/15/2013 RSUs | – | 4,400 | – | 3,974 | * | 426 | – | |||||||||||||||||
2/15/2013 Options | $ | 38.74 | 16,600 | – | – | 16,600 | – | |||||||||||||||||
3/20/2014 Performance RSUs | – | 7,000 | – | – | 7,000 | – | ||||||||||||||||||
3/20/2014 RSUs | – | 2,800 | – | – | 2,800 | – | ||||||||||||||||||
3/20/2014 Options | $ | 66.23 | 13,500 | 4,500 | – | 9,000 | 1/30/2016 | |||||||||||||||||
2/19/2015 RSUs | – | 3,200 | – | – | 3,200 | – | ||||||||||||||||||
2/19/2015 Options | $ | 56.27 | 15,700 | – | – | 15,700 | – | |||||||||||||||||
2/19/2015 Performance RSUs | – | 7,900 | – | – | 7,900 | – |
* | In accordance with 409A of the Internal Revenue Code, the 3,974 RSUs cannot be released until six months after separation from service. |
(2) | Represents shares of common stock acquired |
(3) | Represents the fair market value of the shares |
Represents shares of common stock acquired, which are the portions of the restricted common stock in respect of warrants awards granted on May 27, 2010, through the Company’s Management Incentive Plan that became vested during |
(5) | Represents the fair market value of the shares of common stock acquired, which are the portions of the awards granted on May 27, 2010, that |
(6) | Represents RSUs granted on February 15, 2013, under the Omnibus Plan that vested upon Mr. Campbell’s separation on November 1, 2015, pursuant to the terms of his award agreement. In accordance with 409A, the 3,974 RSUs will be released to Mr. Campbell six months after his separation of service. |
(7) | Represents the fair market value of the shares of common stock on December 31, 2015. In accordance with 409A, the 3,974 RSUs will be released to Mr. Campbell six months after his separation of service. The actual value realized will be determined at the time of release. |
20142015 PENSION BENEFITS
The following table sets forth the actuarial present value of each Named Executive Officer’s accumulated benefit under the Cooper-Standard Automotive Inc. Salaried Retirement Plan (“CSA Retirement Plan”) as described in the narrative following this table, assuming benefits are paid at normal retirement age or the earliest retirement age at which participants receive unreduced benefits. The table also shows the number of years of credited service under each plan,the CSA Retirement Plan computed as of the same pension plan measurement date used in the Company’sour audited financial statements for the year ended December 31, 2014.2015.
Name
| Plan Name
(b) | Number of Years Credited Service (#)
(c) | Present Value of Accumulated Benefit ($)(3)
(d) | Payments During Last Fiscal Year ($)
(e) | Plan Name(1) | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($)(2) | Payments During Last Fiscal Year ($) | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||||||||||||||
Jeffrey S. Edwards | CSA Retirement Plan (1) | N/A | N/A | $0 | - | N/A | N/A | - | ||||||||||||||||
Matthew W. Hardt | - | N/A | N/A | - | ||||||||||||||||||||
Allen J. Campbell | CSA Retirement Plan (3) | 10.33 | $172,293 | - | ||||||||||||||||||||
Keith D. Stephenson | CSA Retirement Plan (2) | 1.58 | $23,653 | $0 | CSA Retirement Plan (3) | 1.58 | $23,698 | - | ||||||||||||||||
Song Min Lee | CSA Retirement Plan (1) | N/A | N/A | $0 | - | N/A | N/A | - | ||||||||||||||||
Allen J. Campbell | CSA Retirement Plan (2) | 10.33 | $170,562 | $0 | ||||||||||||||||||||
Fernando de Miguel | CSA Retirement Plan (1) | N/A | N/A | $0 | - | N/A | N/A | - |
(1) | Mr. Edwards, who was hired in 2012, |
Present values determined using a December 31, |
(3) | Messrs. Campbell and Stephenson are covered under the cash balance design for purposes of the qualified CSA Retirement Plan which was frozen January 31, 2009. Mr. Campbell’s benefit was not impacted by his departure, and remains in a terminated vested status as of December 31, 2015, with continued interest accruals under the cash balance design. |
CSA Retirement Plan
The CSA Retirement Plan is a defined benefit plan that covers all non-union employees of the Company in the United States, including certain of the Named Executive Officers.eligible NEOs. The applicable provisions of the CSA Retirement Plan for Named Executive OfficersNEOs (cash balance provisions) state benefits in the form of a hypothetical account established for each participant. Prior to the freeze of the CSA Retirement Plan effective February 1,January 31, 2009, annual pay credits were added to a participant’s cash balance account at the end of each year, based on the participant’s compensation for the year and the sum of the participant’s age and service as of the beginning of that year. Subsequent to the freeze, participants continue to receive interest credits each year equal to their cash balance account value on the last day of each plan year, multiplied by an applicable interest rate for such year. The applicable interest rate is equal to the rate of interest on 30-year Treasury securities as of the third calendar month preceding the first day of the plan year.
The normal form of retirement benefit is defined as a monthly life annuity amount that is actuarially equivalent to the cash balance account projected to normal retirement age with interest credits. Other optional forms were available as well.
20142015 NONQUALIFIED DEFERRED COMPENSATION
The following table sets forth annual executivecontributions, withdrawals, earnings and Company contributionsfiscal year-end balances for each Named Executive Officer under the deferred compensation provisions of the Company’s non-qualified Supplemental Executive Retirement Plan (“SERP”), as well as each Named Executive Officer’s withdrawals, earnings and fiscal-year end balances indeferred RSUs pursuant to grants under the SERP.Omnibus Plan.
Name (a) | Executive Contribution in Last FY (b) | Registrant Contributions in Last FY(2) (c) | Aggregate Earnings in Last FY (d) | Aggregate Withdrawals/ Distributions (e) | Aggregate Balance at Last FYI (f) | Executive Contributions in Last FY ($) (b) | Registrant Contributions in Last FY ($)(1) (c) | Aggregate Earnings in Last FY ($) (d) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE ($) (2) (f) | ||||||||||||||||||||
Jeffrey S. Edwards | - | 109,222 | 4,799 | - | 186,065 | - | 130,508 | (316 | ) | - | 316,258 | |||||||||||||||||||
Matthew W. Hardt | - | 19,412 | - | - | 19,412 | |||||||||||||||||||||||||
Allen J. Campbell(3) | - | 116,508 | 22,646 | - | 2,238,876 | |||||||||||||||||||||||||
Allen J. Campbell(3) | - | - | - | - | 308,343 | |||||||||||||||||||||||||
Keith D. Stephenson | - | 142,933 | 62,055 | - | 1,254,253 | - | 148,144 | (3,565 | ) | - | 1,398,832 | |||||||||||||||||||
Song Min Lee | - | 59,840 | 2,244 | - | 95,764 | - | 70,171 | (5,932 | ) | - | 160,003 | |||||||||||||||||||
Allen J. Campbell | - | 148,099 | 98,534 | - | 2,099,722 | |||||||||||||||||||||||||
Fernando de Miguel(1) | - | - | - | - | - | |||||||||||||||||||||||||
Fernando de Miguel(4) | - | - | - | - | - |
(1) |
Amounts are included in column (i) of the Summary Compensation Table and represent nonqualified Company contributions under the SERP for the |
CSA Savings Plan
(2) | Of the aggregate total amounts in this column (f), the following SERP contribution amounts have been reported in the Summary Compensation Table for this year and for previous years: |
The Company maintains a tax-qualified 401(k) retirement savings plan (the “CSA Savings Plan”) pursuant to which all U.S. non-union employees, including the Named Executive Officers, may contribute the lesser of up to 50% of their compensation or the limit prescribed by the Internal Revenue Code. The CSA Savings Plan provides a 40% fixed matching on employee contributions of up to 5% of compensation and permits additional discretionary contributions depending on Company performance. An additional non-matching employer contribution of 3% to 5% of compensation (depending on a participant’s age plus service with the Company) is also made to the plan. The Named Executive Officers’ account balances under the CSA Savings Plan are not reflected in the table above, which reflects only defined benefits.
Name | 2015 ($) | Previous Years ($) | Total ($) | |||||||||
Jeffrey S. Edwards | 130,508 | 181,266 | 311,774 | |||||||||
Matthew W. Hardt | 19,412 | - | 19,412 | |||||||||
Allen J. Campbell | 116,508 | 917,840 | 1,034,348 | |||||||||
Keith D. Stephenson | 148,144 | 786,002 | 934,146 | |||||||||
Song Min Lee | 70,171 | 93,521 | 163,692 |
(3) | In addition to Mr. Campbell’s 2,238,876 fiscal year SERP balance, Mr. Campbell has 3,974 vested RSUs valued at $308,343 on December 31, 2015. In accordance with 409A, the RSUs cannot be released until six months after separation from service. Further, Mr. Campbell’s SERP will be valued and paid six months after separation from service, in accordance with 409A. |
(4) | Mr. de Miguel is not covered under the SERP. |
SERP
The benefits provided under the SERP fall into two categories:
For Messrs. Stephenson and Campbell (participants as of January 1, 2011), the SERP provides a benefit equal to a multiple of between two and one-half and three times the percentage of Company contributions actually credited to the participant’s account under the CSA Savings Plan, multiplied by the participant’s compensation (without regard to qualified plan limits prescribed by the Internal Revenue Code), but offset by the amount of Company contributions made for such participant under the CSA Savings Plan. In addition, the SERP provides such participants with an opening account balance under the SERP equal to the lump sum value of their account balance benefit, including their cash balance benefit, which had accrued under the Supplementary Benefit Plan as of December 31, 2010.
credited to the participant’s account under the CSA Savings Plan, multiplied by the participant’s compensation (without regard to qualified plan limits prescribed by the Internal Revenue Code), but offset by the amount of Company contributions made for such participant under the CSA Savings Plan. In addition, the SERP provides such participants with an opening account balance under the SERP equal to the lump sum value of their account balance benefit, including their cash balance benefit, which had previously accrued under the Cooper-Standard Automotive Inc. Nonqualified Supplementary Retirement Plan as of December 31, 2010. |
Under the SERP, benefits are payable after a period of six months from the date of termination. Benefits vest under the SERP at the same time as Company contributions under the CSA Savings Plan vest (generally after 2two years of service). Accounts under the SERP are generally credited with hypothetical investment returnsearnings based hypothetical investments elected byon participant investment elections made from among the participants. The current investment alternatives available under the SERP are the same as thoseoptions available under the CSA Savings Plan. From among the available investment alternatives, participants may change their instructions relating to their deferred compensation daily, via the third-party administrator for the Company’s SERP. Earnings on a participant’s balance are determined solely by the performance of the investments that the participant has chosen for his plan balance; the Company does not guarantee any minimum return on investments and accounts are not credited with above-market earnings.
The table below reflects the investment fund options available under the SERP as of December 31, 2015, and the annualized rates of return for the calendar year ended December 31, 2015.
Name of Fund | Rate of Return | Name of Fund | Rate of Return | |||||||
T. Rowe Price Retirement 2005 Fund | -0.7 | % | T. Rowe Price Retirement Balanced Fund | -0.7 | % | |||||
T. Rowe Price Retirement 2010 Fund | -0.8 | % | FFTW Income Plus Fund | 0.7 | % | |||||
T. Rowe Price Retirement 2015 Fund | -0.6 | % | JPMorgan Core Bond Fund Class R6 | 1.0 | % | |||||
T. Rowe Price Retirement 2020 Fund | -0.3 | % | Loomis Sayles Bond Fund Institutional Class | -6.9 | % | |||||
T. Rowe Price Retirement 2025 Fund | -0.2 | % | BlackRock Inflation Protected Bond Fund Instl Shares | -2.1 | % | |||||
T. Rowe Price Retirement 2030 Fund | 0.0 | % | AllianzGI NFJ Dividend Value Fund Instl Class | -8.3 | % | |||||
T. Rowe Price Retirement 2035 Fund | 0.1 | % | DFA U.S. Targeted Value Portfolio Institutional Class | -5.7 | % | |||||
T. Rowe Price Retirement 2040 Fund | 0.2 | % | Spartan® 500 Index Fund – Institutional Class | 1.4 | % | |||||
T. Rowe Price Retirement 2045 Fund | 0.2 | % | T. Rowe Price Growth Stock Fund | 10.9 | % | |||||
T. Rowe Price Retirement 2050 Fund | 0.2 | % | Prudential Jennison Small Company Fund Class Z | -3.5 | % | |||||
T. Rowe Price Retirement 2055 Fund | 0.2 | % | American Funds EuroPacific Growth Fund® Class R-5 | -0.5 | % |
CSA Savings Plan
The Company maintains a tax-qualified 401(k) retirement savings plan (the “CSA Savings Plan”) pursuant to which all U.S. non-union employees, including eligible NEOs, may contribute the lesser of up to 50% of their compensation or the limit prescribed by the Internal Revenue Code. The CSA Savings Plan provides a 40% fixed match on employee contributions of up to 5% of compensation and permits additional discretionary contributions depending on Company performance. An additional non-matching employer contribution of 3% to 5% of compensation (depending on a participant’s age plus years of service with the Company) is also made to the CSA Savings Plan. The NEOs’ account balances under the CSA Savings Plan are not reflected in the table above, which reflects only nonqualified benefits and Mr. Campbell’s vested, deferred RSUs.
German Pension Scheme
For Mr. de Miguel, the Company contributes 15% of his annual basicbase salary to Mr. de Miguel’s defined contribution pension scheme.scheme in Germany.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OFIN CONTROL
Certain of the Named Executive Officers (Messrs. Stephenson, Campbell and de Miguel) entered into employment agreements with the Company which specifically provide for certain benefits upon termination of employment, including termination following a change in control. Messrs. Edwards, Hardt and Lee each signed letter agreements upon the commencement of their employment with the Company that do not specifically provide for benefits upon termination of employment, but which confirm that these Named Executive OfficersNEOs are covered by the Cooper-Standard Automotive Inc. Executive Severance Pay Plan (the “Severance Plan”) which provides for benefits upon termination of employment for officers of the Company who are not parties to employment agreements that provide for such benefits.
The table below shows estimates of the value of compensation that would be payable to each Named Executive OfficerNEO upon termination of employment with the Company under certain circumstances.circumstances, except for Mr. Campbell whose employment terminated on November 1, 2015, and the amounts listed reflect amounts that he actually received. As indicated in the table, compensation upon termination of employment varies depending on the circumstances of the termination and whether or not it occurred following a change in control. Amounts presented in the table, except for Mr. Campbell, are calculated as if the employment of the executive terminated effective December 31, 2014.2015. Payments due to any one of the Named Executive OfficersNEOs upon actual termination of employment can only be determined at the time of termination. There can be no assurance that an actual termination or change in control would produce the same or similar results as those described below if it were to occur on any other date or if the actual circumstances at the time of termination were different.
Amounts accrued under the normal terms of our pension and deferred compensation plans are not included in this table. Information concerning pension benefits and deferred compensation disclosures is presented under “Pension Benefits,” and “Nonqualified Deferred Compensation.” Similarly, information concerning vested equity awards is not included in the table and is presented under “Outstanding Equity Awards at Fiscal Year End.”
Name | Severance Payment(1) | Pension Enhancement (2) | Health/Life (3) | Outplacement Services (4) | Accelerated Vesting of Equity Awards (5) | 280G Treatment / Gross Up (6) | Totals | ||||||||||||||||||||||||||||
Jeffrey S. Edwards | |||||||||||||||||||||||||||||||||||
• Change in Control Without Termination | – | – | – | – | $1,755,075 | – | $1,755,075 | ||||||||||||||||||||||||||||
• Termination Without Cause or Resignation for Good Reason, After Change in Control | $3,701,725 | $0 | $14,708 | $50,000 | $3,483,467 | $0 | $7,249,900 | ||||||||||||||||||||||||||||
• Termination Without Cause or Resignation for Good Reason, with no Change in Control | $3,250,000 | $0 | $14,708 | $50,000 | $388,433 | N/A | $3,703,141 | ||||||||||||||||||||||||||||
• Termination for Cause or Resignation Without Good Reason | – | – | – | – | – | N/A | – | ||||||||||||||||||||||||||||
• Termination due to Death | $547,083 | $0 | – | – | $1,731,249 | N/A | $2,278,332 | ||||||||||||||||||||||||||||
• Termination due to Disability | $547,083 | $0 | – | – | $1,731,249 | N/A | $2,278,332 | ||||||||||||||||||||||||||||
Keith D. Stephenson | |||||||||||||||||||||||||||||||||||
• Change in Control Without Termination | – | – | – | – | $323,571 | – | $323,571 | ||||||||||||||||||||||||||||
• Termination Without Cause or Resignation for Good Reason, After Change in Control | $3,021,640 | $382,622 | $849,924 | $50,000 | $1,685,797 | $1,946,651 | $7,936,634 | ||||||||||||||||||||||||||||
• Termination Without Cause or Resignation for Good Reason, with no Change in Control | $2,105,000 | $273,451 | $29,473 | – | $464,834 | N/A | $2,872,758 | ||||||||||||||||||||||||||||
• Termination for Cause or Resignation Without Good Reason | – | – | – | – | – | N/A | – | ||||||||||||||||||||||||||||
• Termination due to Death | $306,640 | – | – | – | $1,217,274 | N/A | $1,523,914 | ||||||||||||||||||||||||||||
• Termination due to Disability | $306,640 | – | – | – | $1,217,274 | N/A | $1,523,914 | ||||||||||||||||||||||||||||
Song Min Lee | |||||||||||||||||||||||||||||||||||
• Change in Control Without Termination | – | – | – | – | $126,324 | – | $126,324 | ||||||||||||||||||||||||||||
• Termination Without Cause or Resignation for Good Reason, After Change in Control | $1,362,867 | $0 | $39,655 | $50,000 | $704,112 | $0 | $2,156,634 | ||||||||||||||||||||||||||||
• Termination Without Cause or Resignation for Good Reason, with no Change in Control | $1,260,000 | $0 | $39,655 | $50,000 | $126,526 | N/A | $1,476,181 | ||||||||||||||||||||||||||||
• Termination for Cause or Resignation Without Good Reason | – | – | – | – | – | N/A | – | ||||||||||||||||||||||||||||
• Termination due to Death | $184,640 | – | – | – | $577,990 | N/A | $762,630 | ||||||||||||||||||||||||||||
• Termination due to Disability | $184,640 | – | – | – | $577,990 | N/A | $762,630 |
Name | Severance Payment (1) | Pension Enhancement (2) | Health/Life (3) | Outplacement Services (4) | Accelerated Vesting of Equity Awards (5) | 280G Treatment/Gross Up (6) | Totals | |||||||
Jeffrey S. Edwards | ||||||||||||||
• Change in Control Without Termination | – | – | – | – | $3,666,633 | – | $3,666,633 | |||||||
• Termination Without Cause or Resignation for Good Reason, After Change in Control | $3,432,500 | $0 | $14,676 | $50,000 | $10,260,410 | $0 | $13,757,586 | |||||||
• Termination Without Cause or Resignation for Good Reason, with no Change in Control | $3,432,500 | $0 | $14,676 | $50,000 | $798,634 | N/A | $4,295,810 | |||||||
• Termination due to Death | $0 | $0 | – | – | $5,811,147 | N/A | $5,811,147 | |||||||
• Termination due to Disability | $0 | $0 | – | – | $5,811,147 | N/A | $5,811,147 | |||||||
Matthew Hardt | ||||||||||||||
• Termination Without Cause or Resignation for Good Reason, After Change in Control | $705,025 | $0 | $16,750 | $50,000 | $710,370 | N/A | $1,482,145 | |||||||
• Termination Without Cause or Resignation for Good Reason, with no Change in Control | $600,000 | $0 | $16,750 | $50,000 | $0 | N/A | $666,750 | |||||||
• Termination due to Death | $0 | $0 | – | – | $710,370 | N/A | $710,370 | |||||||
• Termination due to Disability | $0 | $0 | – | – | $710,370 | N/A | $710,370 | |||||||
Allen J. Campbell | ||||||||||||||
• Termination Without Cause or Resignation for Good Reason, with no Change in Control | $1,831,000 | $237,571 | $5,195 | – | $308,343 | N/A | $2,382,109 | |||||||
Keith D. Stephenson | ||||||||||||||
• Change in Control Without Termination | – | – | – | – | $425,408 | – | $425,408 | |||||||
• Termination Without Cause or Resignation for Good Reason, After Change in Control | $2,799,000 | $459,146 | $788,755 | $50,000 | $4,380,051 | $0 | $8,476,952 | |||||||
• Termination Without Cause or Resignation for Good Reason, with no Change in Control | $2,171,000 | $276,228 | $28,905 | – | $800,975 | N/A | $3,277,108 | |||||||
• Termination due to Death | $0 | – | – | – | $3,529,233 | N/A | $3,529,233 | |||||||
• Termination due to Disability | $0 | – | – | – | $3,529,233 | N/A | $3,529,233 |
Name | Severance Payment(1) | Pension Enhancement (2) | Health/Life (3) | Outplacement Services (4) | Accelerated Vesting of Equity Awards (5) | 280G Treatment / Gross Up (6) | Totals | Severance Payment (1) | Pension Enhancement (2) | Health/Life (3) | Outplacement Services (4) | Accelerated Vesting of Equity Awards (5) | 280G Treatment/Gross Up (6) | Totals | |||||||||||||||||||||||||||||||||||
Allen J. Campbell | |||||||||||||||||||||||||||||||||||||||||||||||||
Juan Fernando de Miguel Posada | |||||||||||||||||||||||||||||||||||||||||||||||||
• Change in Control Without Termination | – | – | – | – | $244,514 | – | $244,514 | – | – | – | – | $284,856 | – | $284,856 | |||||||||||||||||||||||||||||||||||
• Termination Without Cause or Resignation for Good Reason, After Change in Control | $2,570,963 | $431,908 | $828,596 | $50,000 | $1,342,467 | – | $5,223,934 | $1,557,825 | $97,799 | $11,401 | – | $2,631,354 | – | $4,298,379 | |||||||||||||||||||||||||||||||||||
• Termination Without Cause or Resignation for Good Reason, with no Change in Control | $1,789,000 | $290,505 | $40,719 | – | $349,074 | N/A | $2,469,298 | $1,168,369 | $97,799 | $11,401 | – | $278,703 | N/A | $1,556,272 | |||||||||||||||||||||||||||||||||||
• Termination for Cause or Resignation Without Good Reason | – | – | – | – | – | N/A | – | ||||||||||||||||||||||||||||||||||||||||||
• Termination due to Death | $231,963 | – | – | – | $916,298 | N/A | $1,148,261 | $0 | – | – | – | $2,061,642 | N/A | $2,061,642 | |||||||||||||||||||||||||||||||||||
• Termination due to Disability | $231,963 | – | – | – | $916,298 | N/A | $1,148,261 | $0 | – | – | – | $2,061,642 | N/A | $2,061,642 | |||||||||||||||||||||||||||||||||||
Fernando de Miguel | |||||||||||||||||||||||||||||||||||||||||||||||||
Song Min Lee | |||||||||||||||||||||||||||||||||||||||||||||||||
• Change in Control Without Termination | – | – | – | – | $143,930 | – | $143,930 | – | – | – | – | $256,410 | – | $256,410 | |||||||||||||||||||||||||||||||||||
• Termination Without Cause or Resignation for Good Reason, After Change in Control | $1,220,711 | $108,992 | $12,735 | – | $779,839 | – | $2,122,277 | $1,376,933 | $0 | $37,835 | $50,000 | $2,409,265 | N/A | $3,874,033 | |||||||||||||||||||||||||||||||||||
• Termination Without Cause or Resignation for Good Reason, with no Change in Control | $1,220,711 | $108,992 | $12,735 | – | $134,571 | N/A | $1,477,009 | $1,297,125 | $0 | $37,835 | $50,000 | $260,159 | N/A | $1,645,119 | |||||||||||||||||||||||||||||||||||
• Termination for Cause or Resignation Without Good Reason | – | – | – | – | – | N/A | – | ||||||||||||||||||||||||||||||||||||||||||
• Termination due to Death | $200,506 | – | – | – | $626,551 | N/A | $827,057 | $0 | – | – | – | $1,896,445 | N/A | $1,896,445 | |||||||||||||||||||||||||||||||||||
• Termination due to Disability | $200,506 | – | – | – | $626,551 | N/A | $827,057 | $0 | – | – | – | $1,896,445 | N/A | $1,896,445 |
(1) | Cash severance is generally paid in a lump sum at termination. Cash severance amounts estimated above, with the exception of Mr. Campbell’s actual amounts, are based on providing executives with prorated outstanding incentive awards and a multiple of the sum of (i) their annual base rate of salary at date of termination plus (ii) their target annual bonus for the year prior to termination, with such multiple equal to two (2) for Messrs. Campbell and Stephenson. If the termination occurs following a change |
Pursuant to the January 1, 2011, Executive Severance Pay Plan, Mr. Edwards’, Mr. Lee’s, and Mr. Hardt’s cash severance for termination without cause prior to a change in control is two times for Mr. Edwards and one and a half times for Mr. Lee and Mr. Hardt the sum of (i) their annual base rate of salary at date of termination plus (ii) their target annual bonus for the year prior to termination, plus the prorated annual incentive award based on actual performance for the year of termination. For termination without cause after a change in control, Mr. Edwards’, Mr. Lee’s, and Mr. Hardt’s cash severance is two times the sum of (i) their annual base rate of salary at date of termination plus (ii) their target annual bonus for the year prior to termination, plus the prorated target annual incentive for the year of termination. For disclosure purposes we have only reported the incremental value by which the target annual incentive exceeds the actual annual incentive, if any. In accordance with the January 1, 2011, Executive Severance Pay Plan, the severance payments reported for termination without cause after a change in control for Mr. Lee and Mr. Hardt were reduced so that the severance payments would not be subject to the excise tax under Sections 280G and 4999 of the Internal Revenue Code. As a result, Mr. Lee’s cash severance was reduced from $1,729,500 to $1,376,933 and Mr. Hardt’s cash severance was reduced from $800,000 to $705,025.
For Mr. de Miguel, the values reported above follow the Executive Severance Pay Plan and were converted to USD from EUROS using a conversion factor of 1.0866525119 as of December 31, 2015.
Further description of the terms applicable to cash severance payments is included under “Terms Applicable to Payments Upon Termination of Employment.”
(2) | Mr. Stephenson |
actual amounts paid to Mr. Campbell. Messrs. Edwards, Lee, and |
(3) | Health and life insurance benefits are continued for the |
(4) | Upon termination without cause (or resignation for good reason) after a change |
(5) | Represents the effect of accelerated vesting related to time-based RSUs, stock options, performance-based RSUs, restricted stock in respect of warrants (based on Deemed Warrant Factor), and stock options in respect of warrants (based on Deemed Warrant Factor) |
In the event of a change in control without termination: 50% of outstanding and unvested time-based stock options, restricted stock in respect of warrants, and stock options in respect of warrants granted on May 27, 2010 become fully vested and exercisable, and the remaining 50% are subject to continued vesting restrictions. For time-based stock options granted in March 2012 and February 2013 (March 2013 for Mr. de Miguel), 50% of outstanding and unvested time-based stock options become fully vested and exercisable, and the remaining 50% are subject to continued vesting restrictions.termination: For Mr. Edwards’ time-based stock options granted in October 2012, 100% of the stock options, to the extent outstanding, immediately become vested and exercisable. For stock options granted in February 2013, (March 2013 for Mr. de Miguel), 50% of outstanding and unvested stock options become fully vested and exercisable, and the remaining 50% are subject to continued vesting restrictions. For time-based RSUs granted in February 2013, (March 2013 for Mr. de Miguel), all outstanding and unvested RSUs will continue to vest over the three-year vesting period (no accelerated vesting). For the stock options, time-based RSUs, and Performanceperformance-based RSUs granted in March 2014 and February 2015, pursuant to the award agreements, 100% of all outstanding and unvested options and stock unitsRSUs would become immediately vested and exercisable if the Survivorsuccessor in the Change of Controlchange in control does not assume the options or stock units or does not issue replacement awards. For purposes of this disclosure, we have assumed that the awards will be assumed or replaced by the Survivorsuccessor of the Changechange in Controlcontrol and, therefore, have not reflected 100% immediate vesting (at target for Performance RSUs) on either the March 2014 or February 2015 awards.
In the event of a change in control with termination within two2 years of the change in control:control: For Restricted stock in respect of warrants and stock options in respect of warrants granted in May 2010, a portion of the outstanding grants (based on Deemed Warrant Factor) shall be deemed vested on the date of termination. For Mr. Edwards’ stock options granted in October 2012, 100% of the stock options, to the extent outstanding, immediately become vested and exercisable. For options granted in February 2013 (March
2013 for Mr. de Miguel), 100% of the outstanding and unvested time-based stock options restricted stock in respect of warrants, stock options in respect of warrants, time-based RSUs (except the February 2013 and March 2013 RSUs), and Performance RSUs at target become fully vested and exercisable.
In the event of a termination without cause (or resignation for good reason) prior to a change in control: for RSUs granted in March 2012 and February 2013 (March 2013 for Mr. de Miguel), a prorated portion equal to (x) the total number of shares multiplied by (y) a fraction, the numerator of which is the number of the executive’s days of employment from the date of grant through the date of termination and the denominator of which is 1,095 days shall be deemed vested.
In the event of a termination upon death or disability prior to a change in control: For RSUs granted in March 2012 and February 2013 (March 2013 for Mr. de Miguel), a prorated portion equal to (x) the total number of shares multiplied by (y) a fraction, the numerator of which is the number of the executive’s days of employment from the date of grant through the date of termination and the denominator of which is 1,095 days shall be deemed vested. For all other unvested time-based RSUs, Performance RSUs at target,restricted stock and stock options granted in March 2014 and February 2015, 100% of the outstanding and unvested grants become fully vested and exercisable. For purposes of this disclosure, we have assumed that 100% of the outstanding and unvested target level of performance-based RSUs granted in March 2014 and February 2015 will become fully vested.
In the event of a termination without cause (or resignation for good reason) prior to a change in control: For RSUs granted in February 2013 (March 2013 for Mr. de Miguel), a prorated portion equal to (x) the total number of shares multiplied by (y) a fraction, the numerator of which is the number of the executive’s days of employment from the date of grant through the date of termination and the denominator of which is 1,095 days shall be deemed vested. For restricted stock in respect of warrants and stock options in respect of warrants granted in May 2010, a portion of the outstanding grants (based on Deemed Warrant Factor) shall be deemed vested on the date of termination.
In the event of a termination upon death or disability prior to a change in control: For RSUs granted in February 2013 (March 2013 for Mr. de Miguel), a prorated portion equal to (x) the total number of shares multiplied by (y) a fraction, the numerator of which is the number of the executive’s days of employment from the date of grant through the date of termination and the denominator of which is 1,095 days shall be deemed vested. For restricted stock in respect of warrants and stock options in respect of warrants granted in May 2010, a portion of the outstanding grants (based on Deemed Warrant Factor) shall be deemed vested on the date of termination. For time-based RSUs and stock options granted in March 2014 and February 2015, 100% of the unvested awards become fully vested and exercisable.
For performance-based RSUs granted in March 2014 and February 2015, 100% of the target level of the unvested award become fully vested and exercisable(6) | Upon a change |
Terms Applicable to Payments Uponupon Termination of Employment
As indicated above, two of the Named Executive Officers, Messrs. Campbell and Stephenson have entered into employment agreements with the Company which specifically provide for certain benefits upon termination of their employment under various circumstances.circumstances as described below. The terms applicable to payments upon termination of employment with respect to two of the other Named Executive Officers, Messrs. Edwards, Lee, and Lee,Hardt are governed by the Executive Severance Pay Plan. The terms applicable to Mr. de Miguel upon termination are pursuant togoverned by his Service Contract.
Named Executive Officers with Employment Agreements Entered into in 2009
The Company’s employment agreements with Messrs. Stephenson and Campbell (each a “NEO under Contract”) had an initial term ending December 31, 2009. These agreements provide for successive one-year extension periods thereafter unless the Company or Named Executive Officerthe NEO under Contract provides a notice of termination at least 60 days prior to the end of any term. Messrs. Stephenson andMr. Campbell (the “Named Executive Officers under Contract”) remainis no longer employed by the Company. UnderCompany and his agreement was terminated. Mr. Stephenson is the agreements, each of the Named Executive Officersonly remaining NEO under Contract is paid an annual base salary. Mr. Stephenson’s annual base salary is currently $610,000, and Mr. Campbell’s annual base salary is currently $550,000. The agreements provide that the Compensation Committee may increase the base salary from time to time, based upon the recommendation of the Chief Executive Officer. The agreements also provide that the Named Executive Officers under Contract are entitled to participate in such annual and long-term incentive compensation programs and benefit plans and programs as are generally provided to senior executives.Contract.
• | Termination of Employment Prior to a Change |
If a Named Executive OfficerNEO under Contract terminates employment for “Good Reason” or the Company terminates his employment without “Cause,” as those terms are defined in the agreement and described below, and in each case prior to a change ofin control of the Company, then the Company will pay or provide to the Named Executive OfficerNEO under Contract: (i) his accrued but unpaid salary, annual and long-term incentive compensation amounts; (ii) a pro rata payment of any annual incentive compensation amounts for which the performance period has not ended; (iii) a lump sum payment equal to the sum of the executive’s current annual base salary plus his annual target bonus amount for the year preceding the year of his termination, multiplied by two; (iv) a lump sum payment equal to the value of two additional years of Company contributions under the Company’s qualified and nonqualified defined contribution retirement plans, assuming the executive’s compensation under such plans for such period was the same as the compensation paid to him during the year
preceding his termination of employment; and (v) two years of continued coverage under the life and health plans sponsored by the Company at the same cost to the executive as is being charged to active employees.
Termination for “Cause” under the employment agreements of these executives means termination for any of the following reasons: (i) the executive’s willful failure to perform duties or directives which is not cured following written notice; (ii) the executive’s commission of a felony or crime involving moral turpitude; (iii) the executive’s willful malfeasance or misconduct which is demonstrably injurious to the Company; or (iv) material breach by the executive of the non-competition, non-solicitation or confidentiality provisions of the agreement.
Termination of employment by the Named Executive Officersa NEO under Contract for ��Good“Good Reason” means termination following any of the following: (i) a substantial diminution in the executive’s position or duties, adverse change in reporting lines, or assignment of duties materially inconsistent with the executive’s position; (ii) any reduction in the executive’s base salary or annual bonus opportunity; (iii) any reduction in the executive’s long-term cash incentive compensation opportunities, other than reductions generally affecting other senior executives participating in the applicable long-term incentive compensation programs or arrangements; (iv) the failure of the Company to pay the executive any compensation or benefits when due; (v) relocation of the executive’s principal place of work in excess of 50 miles from the executive’s current principal place of work; or (vi) any material breach by the Company of the terms of the Agreement; in each case if the Company fails to cure such event within 10ten calendar days after receipt from the executive of written notice of the event which constitutes Good Reason.
If the employment of a Named Executive OfficerNEO under Contract’s employmentContract terminates due to disability or death, then he is entitled to a pro rata payment of the target amounts payable under any annual and long-term incentive compensation awards then in effect. In the event of any other termination of employment, no amounts are payable under the agreement.
If the Company elects not to extend the Named Executive Officeremployment agreement of a NEO under Contract’s employment agreementContract for any year after expiration of the initial term, then the Named Executive OfficerNEO will be treated as if he were terminated by the Company without Cause and entitled to the severance pay and other benefits described above, except that such pay and benefits will not be paid until his actual termination of employment and if his actual termination occurs between ages 64 and 65, his severance multiplier is reduced to one, and if after age 65, the executive will not be entitled to any severance payment or other benefits under the agreement.
In exchange for the benefits provided under theirthe agreements, the Named Executive Officersa NEO under Contract have agreed not to compete with the Company or solicit or interfere with any Company employee or customer for a two-year period following termination of employment, and not to disclose confidential and proprietary Company information. The Named Executive OfficersA NEO under Contract areis also required to execute a release of all claims against the Company as a condition to receiving the severance payment and benefits, if applicable.
• | Termination of Employment Following a Change |
If the Named Executive Officersa NEO under Contract areis terminated following a change ofin control of the Company, then in lieu of the severance payments and benefits described above, the executives areexecutive is entitled to the severance pay and benefits provided under the Company’s Change of Control Severance Pay Plan (the “Old CoC Plan”), which is an addendum to and part of theirthe employment agreements. The Old CoC Plan covers only executives specifically designated therein, including the Named Executive Officerseach NEO under Contract, alleach of whom entered into employment agreements with the Company in or before 2009. The Company does not intend to apply the Old CoC Plan to any other executives in the future. Under the Old CoC Plan, if within two years following a “Change of Control” of the Company as defined in the plan and described below, a Named Executive OfficerNEO under Contract is terminated by the Company (or its successor in the change ofin control transaction) within two years following a “Change of Control” without “Cause” as(each defined in the plan and described below,below), or terminates his employment for certain reasons, then the Company (or its successor) will pay or provide to the Named Executive OfficerNEO under Contract: (i) an amount equal to one year of his annual base salary; (ii) a pro rata payment of any annual and long-term incentive compensation amounts for which the performance periods have not ended; (iii) a lump sum payment equal to two times his current annual base salary plus his annual target bonus amount (for the year preceding the year of the change ofin control); (iv) a lump sum payment equal to the value of two additional years of Company contributions under the
Company’s qualified and nonqualified defined contribution retirement plans, assuming the executive’s compensation under such plans for such period was equal to the highest amount of eligible compensation paid to the executive in any of the five calendar years immediately preceding the year in which such termination of employment occurs; (v) two years of continued coverage under the life and health plans sponsored by the Company and in which the executive was covered immediately prior to his termination; (vi) medical and life insurance coverage for the Named Executive OfficerNEO under Contract and his spouse for their lifetimes, and for his dependent children until they cease to qualify as dependents, at the same cost as was being charged to the Named Executive OfficerNEO under Contract immediately prior to the change ofin control; and (vii) outplacement services for up to two calendar years following the year of termination, not to exceed a cost equal to the lesser of 15% of the executive’s annual base pay or $50,000. If during the first 24 months of life and medical benefit continuation, the Company is unable to provide what are otherwise intended to be non-taxable benefits to the Named Executive OfficerNEO and his covered family members on a tax-free basis during the first 24 months of life and medical benefit continuation, then the Company will make an additional payment to the Named Executive OfficerNEO under Contract to reimburse him for the taxes due on such benefits.
A “Change of Control” under the Old CoC Plan means the occurrence of any of the following events: (i) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) other than certain permitted entities affiliated with the Company or (ii) any person or group, other than such permitted entities, becomes the “beneficial owner” (as defined in Rules 13d-3 and l3d-5 under the Exchange Act), directly or indirectly, of greater than or equal to 50% of the total voting power of the voting stock of the Company, including by way of merger, consolidation or otherwise. A transaction or series of transactions that would otherwise not constitute a Change of Control is treated as a Change of Control for purposes of the Named Executive OfficerNEO under Contract’s entitlements under the Old CoC Plan if clause (i), above, is satisfied in respect of the business or division in which such executive is principally engaged.
Termination for “Cause” under the Old CoC Plan means termination for any of the following reasons: (i) any act or omission of the executive constituting a material breach of any of his significant obligations or agreements with the Company or continued failure or refusal to adequately perform the duties reasonably required of him which is materially injurious to the Company and is not corrected within thirty (30) days of notice to him thereof by the Company’s board of directors; (ii) the conviction for a felony or the conviction for or finding by civil verdict of the commission by the executive of a dishonest act or common law fraud against the Company; or (iii) any other willful act or omission which is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company which is not corrected after notification by the Board of any such act or omission. The circumstances that constitute reasons under the Old CoC Plan for which a Named Executive OfficerNEO under Contract may terminate his employment and be entitled to severance benefits as if he was terminated without Cause are as follows: (i) a significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position held by the executive immediately prior to the Change inof Control; (ii) a reduction in the executive’s base salary or opportunities for incentive compensation
under applicable Company plans and programs; (iii) the termination or denial of the executive’s rights to employee benefits or a reduction in the scope or aggregate value thereof; (iv) any material breach of its obligations under the plan by the Company or any successor; or (v) a requirement by the Company that the executive move his principal work location more than 50 miles (or in the case of Mr. Campbell, relocation of the executive’s principal work location outside of Asia or a 50-mile radius of the Company’s headquarters in the United States);miles; in each case, other than under the above clause (v), unless remedied by the Company within ten calendar days following notice from the executive of such circumstances.
The Old CoC Plan also provides that if any payment or the amount of benefits due under the plan or otherwise would be considered an excess parachute payment that subjects the Named Executive OfficerNEO under Contract to excise tax under Internal Revenue Code Section 4999, then the Company will make an additional “gross-up” payment to the Named Executive OfficerNEO under Contract to reimburse him for such taxes (and any taxes due on the gross-up payment) except that, with respect to Mr. Campbell, the benefits will either be delivered in full or delivered in an amount such that no portion of the benefits would be subject to the excise tax, whichever would result in the greatest benefit to him on an after-tax basis.
Mr. Campbell will receive the treatment that provides the best after-tax benefit (taking into account the applicable federal, state, and local income taxes and the excise tax) between (i) total payments being delivered in full or (ii) total payments cut back to such amount so that no portion of such total payments would be subject to the excise tax..
In exchange for the benefits provided under the Old CoC Plan, the Named Executive Officersa NEO under Contract must (i) agree to not to compete with the Company and not toor solicit or interfere with any Company employee or customer for a two-year period after his termination of employment, andemployment; (ii) agree to not to disclose confidential and proprietary Company information. Each Named Executive Officer under Contact is also required toinformation; and (iii) execute a release of all claims against the Company as a condition to receiving the severance payment and benefits.
Named Executive Officers Covered by the Executive Severance Pay Plan (“Severance Plan”)
The Severance Plan, adopted in 2011, applies to officers of the Company, including certain of the Named Executive OfficersNEOs (currently Messrs. Edwards, Lee and Lee,Hardt, the “Covered Named Executive Officers”NEOs”) who are not covered by employment agreements that specifically provide for benefits upon termination of employment. Under the Severance Plan, if a Named Executive Officer without an employment agreement providing severance benefitsCovered NEO is terminated by the Company without “Cause,” as the term is defined in the Severance Plan and described below, prior to a change ofin control of the Company, then the Company will pay or provide to the Covered Named Executive Officer the following:
If either of thea Covered Named Executive OfficersNEO terminates employment for “Good Reason,” as the term is defined in the Severance Plan and described below, or is terminated by the Company without Cause during the two-year period following a change ofin control of the Company, then the Company will pay or provide to the Covered Named Executive OfficerNEO the following:
Termination for “Cause” under the Severance Plan means termination for any of the following reasons: (i) the executive’s material breach of his or her significant obligations to, or agreements with, the Company or its affiliates, if the breach is or may be materially injurious to the Company or its affiliates (and is not cured within
30 days of notice); (ii) the executive’s commission of and indictment for a felony, or certain other criminal or civil verdicts against the executive; or (iii) any other willful act or omission which is or may be materially injurious to the financial condition or business reputation of, or otherwise is or may be materially injurious to, the Company or its affiliates (and that is not cured within 30 days of notice).
Termination by an executive for “Good Reason” under the Severance Plan means termination during the two-year period following a change ofin control of the Company after any of the following: (i) a significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties compared to immediately prior to the change ofin control (subject to cure within 30 days of notice); (ii) a reduction in base pay or opportunities for incentive compensation other than a reduction that is applied generally to other executives in a similar manner (subject to cure within 30 days of notice); or (iii) a requirement that the executive change his or her principal location of work by more than 50 miles.
In exchange for these benefits, the Covered Named Executive OfficersNEOs would be required to agree to (i) non-competition and non-solicitation provisions for the period represented by the applicable severance multiple, (ii) confidentiality and non-disparagement provisions, and (iii) a release of claims.
A “Change of Control” under the Severance Plan means the occurrence of any of the following events: (i) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than certain permitted entities affiliated with the Company; or (ii) any person or group, other than such permitted entities, becomes the “beneficial owner” (as defined in Rules 13d-3 and l3d-5 under the Exchange Act), directly or indirectly, of greater than or equal to 50% of the total voting power of the voting stock of the Company, including by way of merger, consolidation or otherwise. A transaction or series of transactions that would otherwise not constitute a Change of Control is treated as a Change of Control for purposes of the Covered Named Executive Officer’sNEO’s entitlements under the plan if clause (i) above is satisfied in respect of the business or division in which such executive is principally engaged.
The Severance Plan also provides that if any payment or the amount of benefits due under the plan or otherwise would be considered an excess parachute payment that subjects the Covered Named Executive OfficerNEO to excise tax under Internal Revenue Code Section 4999, then the benefits will either be delivered in full or delivered in an amount such that no portion of the benefits would be subject to the excise tax, whichever would result in the receipt by the executive of the greatest benefit on an after-tax basis.
If a Covered Named Executive Officer’sNEO’s employment is terminated for any other reason, then no amounts are payable under the Severance Plan.
Summary of Compensation
Members of the Board of Directors who are not employees of the Company are compensated with a base director fee in the amount of $80,000 per year and, if they serve as chair of a committee of the Board of Directors, an additional fee of $10,000 per year. The Company’s Lead Director receives an additional fee of $15,000 per year, less any amount the Lead Director may receive in fees as chair of a committee of the Board. Our directors who are not employees of the Company are also eligible to receive equity grants under the Company’s 2011 Omnibus Incentive Plan. In 2014, the value of the equity awards granted to non-employee directors were designed to be approximately equal in value to the annual base director fee.
The following table sets forth information regarding the compensation received by each of the Company’s non-employee directors during the year ended December 31, 2014.
Name (a) | Fees Earned or Paid in Cash (b) | Stock Awards(7) (c) | Option Awards (d) (8) | All Other Compensation (g) | Total (h) | ||||||||||||||||||||
Glenn R. August(8) | $20,000 | (1) | — | — | — | $20,000 | |||||||||||||||||||
Larry J. Jutte(8) | $80,000 | $75,393 | — | — | $155,393 | ||||||||||||||||||||
Jeffrey E. Kirt | $60,000 | (2) | $75,393 | — | — | $135,393 | |||||||||||||||||||
David J. Mastrocola(8) | $95,000 | (3) | $75,393 | — | — | $170,393 | |||||||||||||||||||
Thomas W. Sidlik | $85,000 | (4) | $75,393 | — | — | $160,393 | |||||||||||||||||||
Stephen A. Van Oss(8) | $90,000 | (5) | $75,393 | — | — | $165,393 | |||||||||||||||||||
Kenneth L. Way(8) | $90,000 | (6) | $75,393 | — | — | $165,393 |
Stock Ownership Policy for Non-Employee Directors
In March 2014, the Board adopted a policy requiring that non-employee directors of the Company achieve a level of ownership of the Company’s common stock equal to five times their base annual director fee. Under this
policy, non-employee directors are required to hold 75% of the net shares resulting from stock option exercises or vesting of other stock-based awards until they reach their applicable stock ownership level. The policy is intended to align the interests of the Company’s non-employee directors with the interests of stockholders by maintaining a strong link between the Company’s long-term success and the ultimate compensation of non-employee directors.
Certain Relationships and Related Transactions
Related Transactions
The Company does notWe have established a formal written policy specifically relating to the review or approval of(Related Party Transaction Policy) regarding transactions with related persons in excess of $120,000 as defined under Item 404(a) of Regulation S-K. OurThis policy assists us in identifying, reviewing, monitoring and, as appropriate, approving transactions with related parties. The policy requires that any transaction involving the Company which exceeds $120,000, and in which a related party had or will have a direct or indirect material interest, must be reported to our General Counsel and referred for approval or ratification by the Governance Committee if it involves a shareholder who owns greater than 5% of our shares, a director, a nominee for director, the Chief Executive Officer or the General Counsel and/or their immediate family members. Such transactions involving executive officers other than the Chief Executive Officer or the General Counsel will be referred to the General Counsel for review and approval or ratification.
We have implemented procedures to ensure compliance with the Related Party Transaction Policy. In particular, each director, nominee for director, and Executive Officer is required to complete a questionnaire in connection with the annual proxy statement that asks a series of questions aimed at identifying possible related party transactions. In addition, on a quarterly basis, we seek to identify related party transactions through an internal inquiry across various departments, including finance, sales, and legal, which includes a review of payments to or from any party that may be considered related. In addition, our Code of Business Conduct and Ethics prohibits our directors, officers, employees, and associates from participating in transactions involving conflicts of interest and requires disclosure of any potential conflicts of interest. In the case of our directors or the Chief Executive Officer, such disclosures are made to the Audit Committee of the Board of Directors. Other employees disclose such matters to the Company’s Corporate Responsibility Committee.
There have been no related person transactions as defined under Item 404(a) of Regulation S-K since January 1, 2014.2015.
Fees and Services of Independent Registered Public Accounting Firm
During 2014 and 2013, we retained Ernst & Young LLP as the Company’s independent registered public accounting firm to provide services in the following categories and amounts (dollar amounts in thousands):
2014 | 2013 | |||||||
Audit fees(1) | $ | 3,110 | $ | 3,176 | ||||
Audit-related fees(2) | 183 | 601 | ||||||
Tax fees(3) | 980 | 672 | ||||||
All other fees | — | — |
The Audit Committee has considered whether the provision of services described under the line item “Tax fees” is compatible with maintaining Ernst & Young LLP’s independence. In light of the nature of work performed and amount of the fees paid to Ernst & Young LLP for those services, the Audit Committee concluded that the provision of such services is compatible with maintaining Ernst & Young LLP’s independence.
The Audit Committee has adopted procedures for pre-approving audit and non-audit services provided by Ernst & Young LLP. The Audit Committee is required to pre-approve all services Ernst & Young LLP provides to the Company. All services provided are to conform with SEC and Public Company Accounting Oversight Board permitted services guidelines. All fee and billing arrangements are reviewed with management of the Company prior to the commencement of services. Ernst & Young LLP regularly reports to the Audit Committee on services performed and to be performed by it with respect to which pre-approval is required. All of the audit, audit-related and tax services performed by Ernst & Young LLP were pre-approved by the Audit Committee pursuant to its pre-approval policies and procedures.
During 2015 and 2014, we retained Ernst & Young LLP as the Company’s independent registered public accounting firm to provide services in the following categories and amounts (dollar amounts in thousands):
2015 | 2014 | |||||||
Audit fees(1) | $ | 3,767 | $ | 3,110 | ||||
Audit-related fees(2) | $ | 256 | $ | 183 | ||||
Tax fees(3) | $ | 1,461 | $ | 980 | ||||
All other fees(4) | $ | 237 | — |
(1) | Audit fees include services related to the annual audit of our consolidated financial statements, the audit of our internal controls over financial reporting, the reviews of our Quarterly Reports on Form 10-Q, international statutory audits and other services that are normally provided by the independent accountants in connection with our regulatory filings. |
(2) | Audit related fees include services related to the audits of our employee benefit plans and due diligence in connection with acquisitions and divestitures. |
(3) | Tax fees include services related to tax compliance, tax advice, and tax planning. |
(4) | All other fees are related to other advisory services. |
The Audit Committee has considered whether the provision of services described under the line items “Tax fees” and “All other fees” are compatible with maintaining Ernst & Young LLP’s independence. In light of the nature of work performed and amount of the fees paid to Ernst & Young LLP for those services, the Audit Committee concluded that the provision of such services is compatible with maintaining Ernst & Young LLP’s independence.
The Audit Committee has reviewed and discussed with management the Company’s 20142015 audited financial statements. The committeeAudit Committee has discussed with Ernst & Young LLP, the Company’s independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with generally accepted accounting principles, the matters required to be discussed pursuant to applicable standards adopted by Auditing Standard No. 16, as amended,the Public Company Accounting Oversight Board, including their evaluation of, and conclusions about, the qualitative aspects of the significant accounting principles and practices applied in the Company’s financial reporting. The Audit Committee is responsible for the appointment, compensation, and oversight of the Company’s independent registered accounting firm. As part of its oversight of the independent registered public accounting firm, the Audit Committee considers the quality and efficiency of the services provided, the firm’s global capability, the technical expertise and knowledge of the Company’s global operations and industry. In connection with the mandatory rotation of the independent registered public accounting firm’s lead engagement partner, the Audit Committee is directly involved in the selection of the lead engagement partner. The committeeAudit Committee has received from the independent registered public accounting firm written disclosures and a letter as required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and discussed with the independent registered public accounting firm its independence from management and the Company. In considering the independence of the Company’s independent registered public accounting firm, the committeeAudit Committee took into consideration the amount and nature of the fees paid to the firm for non-audit services, as described above.
Based on the review and discussions described above, the committeeAudit Committee recommended to the Board of Directors that the year-end audited financial statements be included in the Company’s 20142015 Annual Report on Form 10-K for filing with the Securities and Exchange Commission.
Audit Committee
Stephen A. Van Oss, Chair
Kenneth L. WaySean O. Mahoney
Thomas W. Sidlik
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company’s officers and directors, and persons who own more than ten percent of the common stock of the Company, to file with the SEC and the NYSE reports of ownership of Company securities and changes in reported ownership. Officers, directors and greater than ten percent stockholders are required by SEC rules to furnish the Company with copies of all Section 16(a) reports they file. To our knowledge, based solely on a review of copies of such reports received by the Company, we believe that during 20142015 our officers, directors and greater than ten percent stockholders complied with their Section 16(a) filing requirements on a timely basis, except thatthat: the Form 4s filed on February 18, 2016, for Messrs. Edwards, Stephenson, Pumphrey, Lee, Ott, and Ms. Wenzl reporting the conversion of RSUs granted to each of them on February 15, 2013, into common stock were reported one day late due to technical difficulties, a report showing the acquisition of common stock by Mr. Sidlik was filed one day late.difficulties.
Submitting Stockholder Proposals and Nominations for the 20162017 Annual Meeting
Proposals received from stockholders will be given careful consideration by the Company. Any proposal should be directed to the attention of the Company’s Secretary at 39550 Orchard Hill Place, Novi, Michigan 48375. Stockholder proposals are eligible for consideration for inclusion in the proxy statement for the 20162017 annual meeting of stockholders in accordance with Rule 14a-8 under the Exchange Act if they are received by the Company on or before December 9, 2015.21, 2016, 120 days before the first anniversary of the mailing date of the 2016 proxy statement. In order for a stockholder proposal submitted outside of Rule 14a-8 to be considered “timely” within the meaning of Rule 14a-4(c), such proposal must be delivered to the Company’s Secretary at the Company’s principal offices not later than the last date for submission of stockholder proposals under the Company’s By-Laws. In order for a proposal to be “timely” under the Company’s By-Laws, it must be received not less than 90 days (February 7, 2016) nor more than 120 days (January 8, 2016) prior to the first anniversary of the date of the 20152016 Annual Meeting (May 7, 2016);Meeting; provided, however, that in the event that the date of the 20162017 Annual Meeting is advanced or delayed by more than 30 days earlier or more than 60 days later than such anniversary date, notice by stockholders to be timely must be received notno earlier than the 120th day prior to the date of the 20162017 Annual Meeting and notno later than the close of business on the later of the 90th day prior to the 20162017 Annual Meeting or the 10th day following the day on which disclosure of the date of the 20162017 Annual Meeting is made.
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. The Company and some brokers household proxy materials, delivering a single proxy statement and annual report to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker or the Company that your broker or the Company will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement and annual report, please notify your broker if your shares are held in a brokerage account or the Company if you hold registered shares. You can notify the Company by phone at (248) 596-5900 or by sending a written request to the Company at 39550 Orchard Hill Place, Novi, Michigan 48375, Attention: Secretary. If your household has received multiple copies of proxy statements and annual reports, you can request the delivery of single copies in the future by notifying the Company as listed above.
Discretionary Voting of Proxies on Other Matters
The Company’s management does not currently intend to bring any proposals to the Annual Meeting other than the election of directors and ratification of the appointment of the Company’s independent registered public accounting firm and does not expect any stockholder proposals. If new proposals requiring a vote of the stockholders are brought before the meeting in a proper manner, the persons named in the accompanying proxy card intend to vote the shares represented by them in accordance with their best judgment.
By order of the Board of Directors
Aleksandra A. Miziolek
Senior Vice President, General Counsel & Secretary
Novi, Michigan, April 10, 2015
COOPER-STANDARD HOLDINGS INC. ATTN: 39550 ORCHARD HILL PLACE NOVI, MI 48375 | VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
The Board of Directors recommends you vote | For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the | ||||||||||||||||||||||||
FOR the following: | nominee(s) on the line below. | |||||||||||||||||||||||||||
1. | Election of Directors | ¨
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Nominees | ||||||||||||||||||||||||||||
01 Glenn R. August 02 Jeffrey S. Edwards 03 Sean O. Mahoney 04 David J. Mastrocola 05 Justin E. Mirro | ||||||||||||||||||||||||||||
06 Robert J. Remenar 07 Sonya F. Sepahban 08 Thomas W. Sidlik | ||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR the following proposal: | For | Against | Abstain | |||||||||||||||||||||||||
2. |
Ratification of the appointment of Ernst & Young LLP as the Independent Registered Public Accounting Firm for |
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NOTE: Conduct such other business as may properly come before the meeting or any adjournment thereof.
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. | ||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
0000243209_1 R1.0.0.511600000288836_1 R1.0.1.25
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice & Proxy Statement, Form 10-K is/are available atwww.proxyvote.com — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | ||||||
COOPER-STANDARD HOLDINGS INC. Annual Meeting of Stockholders May This proxy is solicited by the Board of Directors
The stockholder(s) hereby appoints Jeffrey S. Edwards and Aleksandra A. Miziolek, or either of them, as proxies, each with the power to appoint his or her substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of COOPER-STANDARD HOLDINGS INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 9:00 AM, EDT on 5/
This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
Continued and to be signed on reverse side
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0000243209_2 R1.0.0.511600000288836_2 R1.0.1.25