SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Filed by the Registrantþ | ||
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
o Preliminary Proxy Statement | o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ Definitive Proxy Statement | ||
o Definitive Additional Materials | ||
o Soliciting Material Pursuant to §240.14a-12 |
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
o | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
Two Democracy Center
6903 Rockledge Drive
Bethesda, Maryland 20817
James R. Mellor | John K. Welch | |||
Chairman of the Board | President and Chief Executive Officer |
Two Democracy Center
6903 Rockledge Drive
Bethesda, Maryland 20817
Senior Vice President, General Counsel and Secretary
Page | ||||
1 | ||||
5 | ||||
9 | ||||
9 | ||||
9 | ||||
9 | ||||
9 | ||||
9 | ||||
10 | ||||
10 | ||||
11 | ||||
11 | ||||
11 | ||||
12 | ||||
12 | ||||
13 | ||||
13 | ||||
14 | ||||
14 | ||||
14 | ||||
14 | ||||
14 | ||||
15 | ||||
15 | ||||
16 | ||||
18 | ||||
20 | ||||
21 | ||||
21 | ||||
39 | ||||
40 | ||||
42 | ||||
43 | ||||
44 | ||||
45 | ||||
47 | ||||
48 | ||||
53 | ||||
53 | ||||
54 | ||||
55 | ||||
55 | ||||
55 |
Two Democracy Center
6903 Rockledge Drive
Bethesda, Maryland 20817
for the Shareholder Meeting to Be Held on April 29, 2010
the year ended December 31, 2009 are available athttp://bnymellon.mobular.net/bnymellon/USU.
• | held directly in your name with our transfer agent, BNY Mellon Shareowner Services, as a “shareholder of record;” | |
• | held for you in an account with a broker, bank or other nominee (shares held in “street name” for a “beneficial owner”); and | |
• | held for you under a USEC employee stock ownership plan with our plan administrator, BNY Mellon Shareowner Services, or under the USEC 401(k) plan with our plan administrator, Fidelity (each a “USEC stock ownership plan”). |
• | are present and vote in person at the meeting; or | |
• | have properly submitted a proxy card or voting instructions prior to the meeting. |
• | If you are a shareholder of record, you may vote by the ballot provided at the meeting. | |
• | If you hold your shares in “street name,” you must obtain and bring with you to the Annual Meeting a legal proxy from your bank, broker, nominee or other holder of record in order to vote by ballot at the meeting. | |
• | If you hold your shares through a USEC stock ownership plan, you cannot vote in person at the Annual Meeting. Please vote by signing and dating your proxy card and mailing it in the postage-paid envelope provided or by using the Internet or telephone. |
2
• | vote “FOR” all nominees; | |
• | “WITHHOLD” votes as to all nominees; or | |
• | “WITHHOLD” votes as to one or more specific nominees. |
• | vote “FOR” the ratification; | |
• | vote “AGAINST” the ratification; or | |
• | “ABSTAIN” from voting on the ratification. |
• | Item 1: “FOR” each director nominee; and | |
• | Item 2: “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as USEC’s independent auditors for 2010. |
• | submitting a properly executed proxy card with a later date, which proxy card is received prior to the date of the Annual Meeting; | |
• | delivering to the Secretary of USEC, prior to the date of the Annual Meeting, a written notice of revocation bearing a later date than the proxy; or | |
• | voting in person at the Annual Meeting. |
3
4
James R. Mellor | Director since 1998 Age 79 | |||
Mr. Mellor retired in 1997 as Chairman and Chief Executive Officer of General Dynamics Corporation, a company engaged in shipbuilding and marine systems, land and amphibious combat systems, information systems, and business aviation businesses, a position he held since 1994. Prior to assuming that position, Mr. Mellor was President and Chief Executive Officer from 1993 to 1994 and was previously President and Chief Operating Officer of General Dynamics. Mr. Mellor served as interim President and Chief Executive Officer of the Company from December 2004 to October 2005. Mr. Mellor also serves on the Board of Trustees of the Scripps Research Institute. Mr. Mellor previously served on the Board of Directors of AmerisourceBergen Corporation, Computer Sciences Corporation, Net2Phone, Inc. and IDT Corporation. | ||||
In recommending the re-election of Mr. Mellor, the Board considered the following key competencies: USEC leadership as current Chairman and formerly as interim CEO; CEO experience; government contracting experience; and public company board experience. Mr. Mellor has served as USEC’s chairman since USEC’s privatization in 1998. | ||||
Michael H. Armacost | Director since 2002 Age 72 | |||
Mr. Armacost is a Walter H. Shorenstein distinguished fellow and visiting professor in the Asia/Pacific Research Center at Stanford University. Mr. Armacost served as President and a Trustee of The Brookings Institution from 1995 to 2002. He served as Undersecretary of State for Political Affairs from 1984 to 1989, as U.S. Ambassador to Japan from 1989 to 1993 and to the Philippines from 1982 to 1984. Mr. Armacost also serves on the Board of Directors of AFLAC Inc. Mr. Armacost previously served on the Board of Directors of Applied Materials Inc. and Cargill, Incorporated. | ||||
In recommending the re-election of Mr. Armacost, the Board considered the following key competencies: government and public policy experience; international experience; and public company board experience. | ||||
5
Joyce F. Brown | Director since 1998 Age 63 | |||
Dr. Brown is the President of the Fashion Institute of Technology of the State University of New York, a position she has held since 1998. From 1994 to 1997, Dr. Brown was a professor of clinical psychology at the City University of New York, where she previously held several Vice Chancellor positions. From 1993 to 1994, she served as the Deputy Mayor for Public and Community Affairs in the Office of the Mayor of the City of New York. Dr. Brown also serves on the Board of Directors of Polo Ralph Lauren Corporation. Dr. Brown previously served on the Board of Directors of Linens & Things and the PAXAR Corporation. | ||||
In recommending the re-election of Dr. Brown, the Board considered the following key competencies: executive experience; public relations experience; government experience; and public company board experience. Dr. Brown has been a member of USEC’s Board since its privatization in 1998. | ||||
Joseph T. Doyle | Director since 2006 Age 62 | |||
Mr. Doyle is a consultant to and a director of several for profit companies and not for profit organizations. From July 2002 through March 2003, he served as Senior Vice President and Chief Financial Officer of Foster Wheeler, Inc. Prior to joining Foster Wheeler, Mr. Doyle was Executive Vice President and Chief Financial Officer of U.S. Office Products from 1998 through 2001, Chief Financial Officer of Westinghouse Electric Company’s Industrial Group from 1996 through 1998, and Chief Financial Officer of Allison Engine Company (now Rolls Royce Allison) from 1994 through 1996. U.S. Office Products filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in March 2001. | ||||
In recommending the re-election of Mr. Doyle, the Board considered the following key competencies: CFO and 17 years of public accounting experience; audit committee financial expert; internal audit experience; nuclear submarine and nuclear energy and power experience; and engineering and construction experience. | ||||
H. William Habermeyer | Director since 2008 Age 67 | |||
Mr. Habermeyer retired in 2006 as President and Chief Executive Officer of Progress Energy Florida, a subsidiary of Progress Energy, Inc., a diversified energy company. Mr. Habermeyer joined Progress Energy predecessor, Carolina Power & Light in 1993 and served as Vice President of Nuclear Services and Environmental Support, Vice President of Nuclear Engineering, and Vice President of the Western Region in North Carolina, before assuming the role of President and Chief Executive Officer of Progress Energy Florida in 2000. Prior to that, Mr. Habermeyer had a28-year career in the U.S. Navy, retiring as a Rear Admiral. Mr. Habermeyer also serves on the Board of Directors of Raymond James Financial, Inc. and Southern Company. | ||||
In recommending the re-election of Mr. Habermeyer, the Board considered the following key competencies: CEO experience; business operations experience, including operating and managing nuclear powered submarines and commercial nuclear power plants; nuclear engineering experience; electric utility experience; and public company board experience. | ||||
6
John R. Hall | Director since 1998 Age 77 | |||
Mr. Hall retired in 1997 as Chairman of the Board of Directors of Ashland, Inc., a company engaged in specialty chemicals, lubricants, car-care products, chemical and plastics distribution businesses, a position he held since 1981. Mr. Hall also was Chief Executive Officer of Ashland, Inc. from 1981 to 1996. Mr. Hall was Chairman of the Board of Directors of Arch Coal, Inc. from 1997 to 1998, and a director until 1999. Mr. Hall previously served on the Board of Directors of Humana Inc. and GrafTech International Ltd. | ||||
In recommending the re-election of Mr. Hall, the Board considered the following key competencies: CEO experience; public company board experience; mining and chemicals experience; and nuclear experience. Mr. Hall has been a member of USEC’s Board since its privatization in 1998. | ||||
William J. Madia | Director since 2008 Age 62 | |||
Dr. Madia is a vice president at Stanford University responsible for oversight of the SLAC National Accelerator Laboratory, a U.S. Department of Energy national science lab. Dr. Madia retired in 2007 as Executive Vice President of Laboratory Operations of the Battelle Memorial Institute, a non-profit independent research and development organization, where he oversaw the management or co-management of six Department of Energy National Laboratories. Dr. Madia served in that position since 1999. In addition, he was President and CEO of UT-Battelle, LLC, he managed Battelle’s global environmental business, served as president of Battelle Technology International, director of Battelle’s Columbus Laboratories, and corporate vice president and general manager of Battelle’s Project Management Division. | ||||
In recommending the re-election of Dr. Madia, the Board considered the following key competencies: science and technology experience; nuclear experience; DOE experience, including the management of six DOE laboratories; and executive and management experience. | ||||
W. Henson Moore | Director since 2001 Age 70 | |||
Mr. Moore was President and Chief Executive Officer of the American Forest and Paper Association, the national trade association of the forest, paper and wood products industry, from 1995 to 2006. He was also President of the International Council of Forest Product Associations from 2002 to 2004. Mr. Moore was previously Deputy Secretary of Energy from 1989 to 1992 and in 1992 became Deputy Chief of Staff for President George Bush. From 1975 to 1987 he represented the Sixth Congressional District of Louisiana in the U.S. House of Representatives. Mr. Moore also serves on the Board of Directors of Domtar Corporation. | ||||
In recommending the re-election of Mr. Moore, the Board considered the following key competencies: DOE experience; political affairs experience; legal experience; CEO experience; international experience; and public company board experience. | ||||
7
John K. Welch | Director since 2005 Age 60 | |||
Mr. Welch has been President and Chief Executive Officer since October 2005. Prior to joining USEC, he served as a consultant to several government and corporate entities. He was Executive Vice President and Group Executive, Marine Systems at General Dynamics Corporation from March 2002 to March 2003, and Senior Vice President and Group Executive, Marine Systems from January 2000 to March 2002. Prior to that, Mr. Welch held several executive positions over a ten-year period at General Dynamic’s Electric Boat Corporation, including President from 1995 to 2000. Mr. Welch currently serves on the Board of Directors of Battelle Memorial Institute, the U.S. Naval Academy Foundation and Precision Custom Components Inc. | ||||
In recommending the re-election of Mr. Welch, the Board considered the following key competencies: current service as USEC CEO; other executive experience; nuclear and defense experience; and manufacturing experience. | ||||
8
9
• | the name of the shareholder and evidence of the person’s ownership of Company stock, including the number of shares owned and the length of time of ownership; and | |
• | the name of the candidate, the candidate’s resume or a listing of his or her qualifications to be a director of the Company and the person’s consent to be named as a director if selected by the Nominating and Governance Committee and nominated by the Board. |
10
11
Regulatory and | ||||||||||||||||||||
Audit and | Nominating and | Government | Technology and | |||||||||||||||||
Finance | Compensation | Governance | Affairs | Competition | ||||||||||||||||
Director | Committee | Committee | Committee | Committee | Committee | |||||||||||||||
James R. Mellor | X | |||||||||||||||||||
Michael H. Armacost | X | X | * | |||||||||||||||||
Joyce F. Brown | X | X | ||||||||||||||||||
Joseph T. Doyle | X | * | X | |||||||||||||||||
H. William Habermeyer | X | * | X | |||||||||||||||||
John R. Hall | X | X | ||||||||||||||||||
William J. Madia | X | X | * | |||||||||||||||||
W. Henson Moore | X | X | * | |||||||||||||||||
Joseph F. Paquette, Jr. | X | X | ||||||||||||||||||
Number of Meetings in 2009 | 8 | 7 | 5 | 5 | 4 |
* | Chairman |
12
13
14
15
Fees Earned or | Stock | |||||||||||
Name | Paid in Cash(1) | Awards(2)(3) | Total | |||||||||
James R. Mellor | $ | 180,000 | $ | 120,000 | $ | 300,000 | ||||||
Michael H. Armacost | $ | 87,500 | $ | 120,000 | $ | 207,500 | ||||||
Joyce F. Brown | $ | 80,000 | $ | 120,000 | $ | 200,000 | ||||||
Joseph T. Doyle | — | $ | 240,000 | $ | 240,000 | |||||||
H. William Habermeyer | $ | 90,000 | $ | 120,000 | $ | 210,000 | ||||||
John R. Hall | — | $ | 216,000 | $ | 216,000 | |||||||
William J. Madia | $ | 87,500 | $ | 120,000 | $ | 207,500 | ||||||
W. Henson Moore | $ | 87,500 | $ | 120,000 | $ | 207,500 | ||||||
Joseph F. Paquette, Jr. | — | $ | 216,000 | $ | 216,000 |
(1) | The amounts shown in the Fees Earned or Paid in Cash column include the following: |
• | Annual Retainers: Cash paid in 2009 to Mr. Mellor, Mr. Armacost, Dr. Brown, Mr. Habermeyer, Dr. Madia, and Mr. Moore for $80,000 cash portion of annual retainers for the 2009 — 2010 term. Mr. Doyle, Mr. Hall and Mr. Paquette elected to take all fees in restricted stock units in lieu of cash as shown in the Stock Awards column. | |
• | Chairman’s Fees: Cash paid in 2009 to Mr. Armacost ($7,500), Mr. Habermeyer ($10,000), Dr. Madia ($7,500) and Mr. Moore ($7,500) for annual committee chairman’s fees for the 2009 — 2010 term. Also includes cash paid in 2009 to Mr. Mellor for his annual chairman’s fee of $100,000 for the 2009 — 2010 term. |
(2) | The amounts shown in the Stock Awards column represents the aggregate grant date fair value of stock awards to directors in 2009, computed in accordance with Financial Accounting Standards Board (“FASB”) Auditing Standards Codification (“ASC”) Topic 718 (Compensation — Stock Compensation). For a discussion of valuation assumptions, see Note 11 to our consolidated financial statements included in our annual report onForm 10-K for the year ended December 31, 2009. In accordance with SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. | |
Mr. Doyle, Mr. Hall and Mr. Paquette elected to take all fees in restricted stock units in lieu of cash and so amounts include $200,000 annual retainer for the2009-2010 term, any chairman fees, and incentive restricted stock units. The amount for Mr. Mellor, Mr. Armacost, Dr. Brown, Mr. Habermeyer, Dr. Madia and Mr. Moore includes $120,000 annual retainer payable in restricted stock units. The amounts shown in the Stock Awards column for each of the non-employee directors includes the following grants of restricted stock units, which have the following grant date fair value, calculated using the closing price of USEC’s common stock on the date of grant in accordance with FASB ASC Topic 718 (Compensation — Stock Compensation): |
Number of | ||||||||||||
Restricted | Grant Date | |||||||||||
Name | Grant Date | Stock Units | Fair Value | |||||||||
James R. Mellor | 05/13/09 | 25,586 | $ | 120,000 | ||||||||
Michael H. Armacost | 05/13/09 | 25,586 | $ | 120,000 | ||||||||
Joyce F. Brown | 05/13/09 | 25,586 | $ | 120,000 | ||||||||
Joseph T. Doyle | 05/13/09 | 51,172 | $ | 240,000 | ||||||||
H. William Habermeyer | 05/13/09 | 25,586 | $ | 120,000 | ||||||||
John R. Hall | 05/13/09 | 46,056 | $ | 216,000 | ||||||||
William J. Madia | 05/13/09 | 25,586 | $ | 120,000 | ||||||||
W. Henson Moore | 05/13/09 | 25,586 | $ | 120,000 | ||||||||
Joseph F. Paquette, Jr. | 05/13/09 | 46,056 | $ | 216,000 |
16
Number of Shares of | ||||
Restricted Stock or | ||||
Name | Restricted Stock Units | |||
James R. Mellor | 288,379 | |||
Michael H. Armacost | 82,073 | |||
Joyce F. Brown | 101,267 | |||
Joseph T. Doyle | 103,978 | |||
H. William Habermeyer | 51,197 | |||
John R. Hall | 209,258 | |||
William J. Madia | 51,197 | |||
W. Henson Moore | 89,470 | |||
Joseph F. Paquette, Jr. | 152,657 |
(3) | No stock option grants were made to directors in 2009. The following table shows the number of stock options held by each non-employee director as of December 31, 2009, all of which are immediately exercisable: |
Number of Securities | ||||
Underlying | ||||
Name | Unexercised Options | |||
James R. Mellor | 211,876 | |||
Michael H. Armacost | 16,750 | |||
Joyce F. Brown | 17,250 | |||
Joseph T. Doyle | 1,227 | |||
John R. Hall | 42,152 | |||
W. Henson Moore | 10,500 | |||
Joseph F. Paquette, Jr. | 17,250 |
17
Common Stock | ||||||||
Beneficially Owned(1) | ||||||||
Name of Beneficial Owner | Shares Owned | Percent of Class | ||||||
FMR LLC(2) 82 Devonshire Street Boston, Massachusetts 02109 | 12,884,911 | 8.0 | % | |||||
Donald Smith & Co., Inc.(3) 152 West 57th Street New York, New York 10019 | 11,268,350 | 10.0 | % | |||||
Dimensional Fund Advisors LP(4) 6300 Bee Cave Road Austin, Texas 78746 | 8,470,001 | 7.5 | % | |||||
Tradewinds Global Investors, LLC(5) 2049 Century Park East, 20th Floor Los Angeles, California 90067 | 7,752,341 | 6.9 | % | |||||
BlackRock, Inc.(6) 40 East 53nd Street, New York, New York 10022 | 6,359,569 | 5.6 | % | |||||
Directors | ||||||||
Michael H. Armacost | 74,552 | (7) | * | |||||
Joyce F. Brown | 93,031 | (7) | * | |||||
Joseph T. Doyle | 81,746 | (7) | * | |||||
H. William Habermeyer | 35,611 | (7) | * | |||||
John R. Hall | 247,895 | (7) | * | |||||
William J. Madia | 25,611 | (7) | * | |||||
James R. Mellor | 501,255 | (7) | * | |||||
W. Henson Moore | 74,384 | (7) | * | |||||
Joseph F. Paquette, Jr. | 188,715 | (7) | * | |||||
Officers | ||||||||
John K. Welch | 1,298,530 | (7) | 1.1 | % | ||||
John C. Barpoulis | 350,575 | (7) | * | |||||
Philip G. Sewell | 570,128 | (7) | * | |||||
Robert Van Namen | 434,179 | (7) | * | |||||
W. Lance Wright | 283,820 | (7) | * | |||||
Directors and all executive officers as a group (21 persons) | 4,754,223 | (8) | 4.1 | % |
* | Less than 1% | |
(1) | For purposes of computing the percentage of outstanding shares beneficially owned by each person, the number of shares owned by that person and the number of shares outstanding includes shares as to which such person has a right to acquire beneficial ownership within 60 days (for example, through the exercise |
18
of stock options or conversion of securities), in accordance withRule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended. | ||
(2) | According to the Schedule 13G/A filed with the SEC by FMR LLC and Edward C. Johnson 3d on February 16, 2010, the beneficial owner of 11,707,226 shares of the Company’s common stock is Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, and the beneficial owner of the remaining 1,177,685 shares is Pyramis Global Advisors, LLC, a wholly owned subsidiary of FMR LLC. The Schedule 13G/A states that the number of shares of common stock owned by the investment companies includes 3,107,226 shares of common stock resulting from the assumed conversion of $37,150,000 principal amount of the Company’s 3% convertible senior notes due October 1, 2014 (83.64 shares of common stock for each $1,000 principal amount of notes), and so in calculating the percentage of the class owned by FMR LLC we have assumed the conversion of the entire $575,000,000 principal amount of the Company’s 3% convertible senior notes. The predominant owners of Class B shares of common stock of FMR LLC representing 49% of the voting power of FMR LLC are members of the Edward C. Johnson 3d family. The Schedule 13G/A states that FMR LLC has sole voting power with respect to 1,177,685 shares and sole dispositive power with respect to 12,884,911 shares. For additional information on FMR LLC’s beneficial ownership please see the Schedule 13G/A. | |
(3) | The Schedule 13G filed on February 11, 2010 with the SEC by Donald Smith & Co., Inc., Richard Greenberg, and Donald Smith Long/Short Equities Fund, L.P. states that they have the sole power to dispose of 11,268,350 shares. The Schedule 13G states that Donald Smith & Co. has sole power to vote 8,563,062 shares, Richard Greenberg has sole power to vote 10,000 shares and Donald Smith Long/Short Equities Fund, L.P. has the sole power to vote 36,750 shares. In the Schedule 13G, Donald Smith & Co. states that all securities reported therein are owned by its advisory clients, no one of which, to its knowledge, owns more than 5% of the class of securities. | |
(4) | The Schedule 13G/A filed on February 8, 2010 with the SEC by Dimensional Fund Advisors LP states that it has sole power to vote 8,290,074 shares and sole power to dispose of 8,470,001 shares. Dimensional Fund Advisors states in its Schedule 13G/A that all securities reported therein are owned by its funds, no one of which, to its knowledge, owns more than 5% of the class of securities. In its Schedule 13G/A, Dimensional Fund Advisors disclaims beneficial ownership of all such securities. | |
(5) | The Schedule 13G/A filed on February 12, 2010 with the SEC by Tradewinds Global Investors, LLC states that it has sole power to vote 6,422,465 shares and sole power to dispose of 7,752,341 shares. Tradewinds Global Investors, LLC states in its Schedule 13G/A that all securities reported therein are owned by its clients. | |
(6) | The Schedule 13G filed on January 29, 2010 with the SEC by BlackRock, Inc. states that it has the sole power to vote 6,359,569 shares and the sole power to dispose of 6,359,569 shares. | |
(7) | Includes shares subject to options granted pursuant to the USEC Inc. 2009 Equity Incentive Plan (or its predecessor plan, the USEC Inc. 1999 Equity Incentive Plan) exercisable, as of March 4, 2010, or within 60 days from such date as follows: Mr. Armacost 16,750; Dr. Brown 17,250; Mr. Doyle 1,227; Mr. Hall 36,637; Mr. Mellor 211,876; Mr. Moore 10,500; Mr. Paquette 17,250; Mr. Welch 601,792; Mr. Barpoulis 178,426; Mr. Sewell 385,095; Mr. Van Namen 251,987; and Mr. Wright 140,523. Also includes restricted stock units that can be converted into USEC common stock within 60 days from March 4, 2010 as follows: Mr. Armacost 31,960; Dr. Brown 31,960; Mr. Doyle 50,519; Mr. Habermeyer 25,611; Mr. Hall 110,412; Dr. Madia 25,611; Mr. Mellor 116,602; Mr. Moore 31,960; and Mr. Paquette 98,228. | |
(8) | Includes 2,029,382 shares subject to options granted pursuant to the USEC Inc. 2009 Equity Incentive Plan (or its predecessor plan, the USEC Inc. 1999 Equity Incentive Plan) exercisable as of March 4, 2010, or within 60 days from such date. Includes 522,863 restricted stock units that can be converted into USEC common stock within 60 days from March 4, 2010. |
19
20
21
22
• | Compensation should be aligned with shareholders’ interests: The program seeks to align the interests of executives with the long-term interests of our shareholders by providing strong incentives to maximize long-term value for our shareholders. Long-term stock ownership by our executives is emphasized to provide ongoing alignment. | |
• | Compensation should support our business strategy: Our compensation program is designed to reinforce our underlying business strategy and objectives by rewarding successful execution of our business plan, with performance goals tied to our business plan. Our success is heavily dependent on our ability to attract and retain experienced executives who consistently deliver operational and financial results. | |
• | Compensation should reward performance: A substantial portion of the total compensation opportunity is variable and dependent upon the Company’s operating and financial performance. | |
• | Compensation opportunities should be market competitive: To accomplish these guiding principles, it is essential for the compensation and benefits programs to provide competitive compensation relative to the labor markets for our executives while maintaining fiscal responsibility for our shareholders. | |
• | Compensation and benefits programs should encourage short-term and long-term retention: Our compensation and benefits programs, including our retirement plans are intended to encourage retention and reward continuity of service, which is particularly important due to the unique skill sets of our executives. Short term retention is also important due to the risks currently facing our business. |
23
24
25
Base Salary: $900,000
Target Annual Incentive: $900,000 (100% of base salary)
Target Long-Term Incentive: $2,250,000 (250% of base salary)
Fixed vs. Variable Pay | Short-Term vs. Long-Term Incentive Pay | Cash vs. Equity-Based Pay | ||
Fixed 22% | Short-Term 29% | Cash 37% | ||
(Base Salary) | (Annual Incentive Value) | (Salary + 65% of Annual Incentive Value) | ||
Variable 78% | Long-Term 71% | Equity-Based 63% | ||
(Annual + Long-Term Incentive Value) | (Long-Term Incentive Value) | (35% of Annual Incentive Value + Long-Term Incentive Value) | ||
Base Salary: $370,000 — $470,000 (Range)
Target Annual Incentive: $259,000 — $329,000 (70% of base salary)
Target Long-Term Incentive: $518,000 — $846,000 (140% of base salary to 180% of base salary)
Fixed vs. Variable Pay | Short-Term vs. Long-Term Incentive Pay | Cash vs. Equity-Based Pay | ||
Fixed29-32% | Short-Term 28-33% | Cash 42-47% | ||
(Base Salary) | (Annual Incentive Value) | (Salary + 65% of Annual Incentive Value) | ||
Variable68-71% | Long-Term 67-72% | Equity-Based 53-58% | ||
(Annual + Long-Term Incentive Value) | (Long-Term Incentive Value) | (35% of Annual Incentive Value + Long-Term Incentive Value) | ||
• | The target value of long-term incentives is more than double that of the annual incentive to weight an executive’s compensation toward a focus on long-term rather than short-term goals. | |
• | The amount of variable or “at-risk” compensation is higher for the Chief Executive Officer than the other named executive officers in light of his greater responsibility and ability to influence the Company’s results. | |
• | Annual incentives for 2009 performance (paid in 2010) were payable 65% in cash and 35% in restricted stock. However, if an executive had met his or her stock ownership guidelines, the executive could have elected to receive a greater proportion of his or her annual incentive in cash, up to 100% in cash. Alternatively, an executive could have elected to receive a greater proportion of his annual incentive in restricted stock in lieu of cash. For annual incentives for 2010 performance (to be paid in 2011), annual incentives will be paid 100% in cash. |
26
Name | 2009 Salary | Adjustment | 2010 Salary | |||||||||
John K. Welch | $ | 900,000 | $ | 0 | $ | 900,000 | ||||||
John C. Barpoulis | $ | 400,000 | $ | 28,000 | $ | 428,000 | ||||||
Philip G. Sewell | $ | 470,000 | $ | 0 | $ | 470,000 | ||||||
Robert Van Namen | $ | 410,000 | $ | 18,000 | $ | 428,000 | ||||||
W. Lance Wright | $ | 370,000 | $ | 0 | $ | 370,000 |
27
Position | Target Level | Rationale | ||||
CEO | 100% | • Provides executives with the motivation and reward to perform at the highest level in achieving critical annual financial and operating objectives. | ||||
Other named executive officers | 70% | • Goal of targeting the named executive officers’ base salary plus the annual incentive to a competitive level. |
28
Performance Measure | Weight | Rationale | ||||
Corporate Quantitative Goals | 55 | % | ||||
• Gross profit margin percentage (30%) | • Gross profit margin percentage is an important measure of the Company’s operational profitability. | |||||
• Cash flow from operations before American Centrifuge expense, interest and taxes (“Adjusted cash flow from operations”) (25%) | • Adjusted cash flow from operations is a non-GAAP measure of cash created by existing operations with a slightly lower weighting due to potential timing variances. American Centrifuge expense is excluded because it is covered by the ACP earned value metric (described below). Interest and taxes are excluded because most members of management cannot influence these factors. | |||||
• American Centrifuge project (“ACP”) earned value (35%) (measures project performance quantitatively by comparing work completed against work planned at a given date in the project schedule) | • ACP earned value is an important non-GAAP measure of management’s progress on the ACP for capital invested, and is weighted most heavily because of its strategic importance. | |||||
• Selling, general and administrative (SG&A) expense, not including other compensation and stock based compensation (“Adjusted SG&A expense”) (10%) | • Adjusted SG&A expense is a non-GAAP measure of controllable overhead expenses. Other compensation and stock based compensation are excluded because they can be influenced by stock price volatility and other subjective variables. | |||||
Key Performance Objectives | 45 | % | ||||
• Individual performance measures weighted between 10% and 30% | • Based on the Company’s strategic initiatives and operating plan. The weight of each of the key performance objectives varied by individual based on their areas of responsibility. |
Gross Profit | Adjusted Cash | |||||||
Margin | Flow from | ACP Earned | Adjusted SG&A | |||||
Level | Percentage (30%) | Operations (25%) | Value (35%) | Expense (10%) | ||||
Maximum (150%) | 12.6% | $420 million | 1.155 | $39 million | ||||
Target (100%) | 10.6% | $370 million | 1.0 | $43 million | ||||
Threshold (0%) | 7.6% | $270 million | <0.9 | $47 million | ||||
Actual Performance (72%, adjusted to 65%) | 10.1% (89%) | $566.2 million (150%) | N/A (0%)* | $45.0 million (80%) |
* | For the period January to March 2009, ACP earned value performance was 0.94. However, American Centrifuge project spending was reduced in early 2009 in order to preserve corporate liquidity and the American Centrifuge project was demobilized beginning in August 2009. Accordingly, for the period April 2009 to December 2009, ACP earned value performance could not be measured because USEC had slowed American Centrifuge project spending and was no longer operating against the project cost and schedule baseline that is used for calculating ACP earned value. No partial year credit was given to ACP earned value and ACP earned value was scored by the Compensation Committee at 0% of target. |
29
Key Performance Objective | Difficulty | |
• Strengthen near-term performance of the business primarily through actions to control costs and increase revenues, without compromising safety and security. | • Achievement of initiatives relating to improving gross profit and cash flow from operations compared to projections and controlling costs involve substantial effort and initiative, including efforts with respect to contracting, managing electric power costs, and improving plant operations. | |
• Meet critical overall design, performance and deployment objectives relating to the Company’s American Centrifuge Plant. | • The American Centrifuge project is a unique project and the Company’s deployment schedule and objectives are ambitious; therefore achievement of this objective is subject to a number of uncertainties and involves substantial effort and initiative. | |
• Operate a cascade of AC100 centrifuge machines as part of our Lead Cascade test program in early 2009 to confirm key commercial plant operational parameters. | • Achievement of objectives relating to American Centrifuge project Lead Cascade operations involve meeting ambitious targets and schedule with respect to the assembly and startup of machines in our Lead Cascade test program and involve substantial effort and initiative. | |
• Implement recommendations of the transition plan team regarding transition to a centrifuge production-based business model. Develop and implement organizational revisions required by new business model. | • Due to the number of risks and uncertainties facing the Company, implementation of a smooth transition plan involves a great deal of strategic planning and substantial effort and initiative. | |
• Execute American Centrifuge Plant long-term SWU sales contracts with customers that meet corporate objectives and support financing needs. Execute third party financing plan and revised business structure for American Centrifuge project investment. Obtain DOE loan guarantee commitment and funding. Ensure that USEC maintains sufficient liquidity to meet all Company needs. | • This includes contracting for output from the American Centrifuge Plant and securing the significant amount of capital needed to complete construction of the American Centrifuge Plant, both of which are challenging because of the uncertainties relating to the American Centrifuge Plant; therefore achievement of this objective involves substantial effort and initiative. |
30
Revised Key Performance Objective | Difficulty | |
• Strengthen near-term performance of the business primarily through actions to control costs and increase revenues, without compromising safety and security. [This key performance objective was unchanged from the objective in effect from January 1, 2009 through July 31, 2009.] | • Achievement of initiatives relating to improving gross profit and cash flow from operations compared to projections and controlling costs involve substantial effort and initiative, including efforts with respect to contracting, managing electric power costs, and improving plant operations. | |
• Based on the DOE decision to defer its loan guarantee final review, take restructuring and demobilization actions as needed to ensure USEC’s financial viability and preserve the future value of the American Centrifuge project. Mitigate the cost of disruptions caused by restructuring and demobilization activities on the value of the American Centrifuge project. | • The demobilization and restructuring of the American Centrifuge project includes increased costs and significant disruption to the project that is challenging to manage and involves substantial effort and initiative, in particular, relations with suppliers and efforts to obtain additional development funding from DOE. | |
• Based on the DOE decision to defer its loan guarantee final review, take steps to address DOE’s technical and financial concerns. | • This includes achievement of objectives relating to American Centrifuge project Lead Cascade operations, continued development efforts to further improve reliability, efforts to reduce perceived project risk, and other steps to improve the project’s financial structure. Achievement in these areas requires significant effort and initiative. | |
• Evaluate strategic alternatives to the existing business structure. Retain American Centrifuge Plant sales commitments that can either support American Centrifuge Plant production, or be profitably sourced by a backup supply. Provide recommended alternatives to the Board prior to the end of 2009. | • This includes identifying and pursing alternatives to enhance value to USEC and its shareholders and requires significant effort and initiative. Due to the number of risks and uncertainties facing the Company, retention of customers can also be challenging. | |
• Identify near term transition actions that can enhance value in the event a DOE loan guarantee is not obtained or is delayed significantly. Prepare for implementation in early 2010. | • This involves planning for extended gaseous diffusion plant operations, pursuing increased revenues from government services, and successfully resolving government services audit and other issues. This requires substantial effort and initiative, including efforts with respect to plant operations and performance, contracting, and negotiating with DOE. | |
• Engage key contacts at critical government departments in a structured dialogue to determine a baseline assessment of the working relationship with USEC and the plan of action to improve the relationship and increase the likelihood of positive outcomes. | • This includes evaluating strengths and weaknesses of current relationships and identifying steps for improvement, communicating USEC’s role in supporting policy objectives, and leveraging third party relationships. These efforts require significant coordination, effort and initiative. |
31
Key Performance | Corporate | Annual Incentive | ||||||||||
Objective | Quantitative Goals | Award (as a | ||||||||||
Achievement Level | Achievement Level | percentage of | ||||||||||
Name | (45%) | (55%) | target) | |||||||||
John K. Welch | 55 | % | 65 | % | 61 | % | ||||||
John C. Barpoulis | 77 | % | 65 | % | 70 | % | ||||||
Philip G. Sewell | 75 | % | 65 | % | 70 | % | ||||||
Robert Van Namen | 77 | % | 65 | % | 70 | % | ||||||
W. Lance Wright | 77 | % | 65 | % | 70 | % |
Annualized Target | Percentage of Annualized Long-Term Incentive Value | |||||||
Long-Term Incentive Value | Restricted Stock | Stock Option | 2009 | |||||
Position | (as a Multiple of Base Salary) | Awards | Awards | Performance Plan | ||||
CEO | 2.5X | 30% | 30% | 40% | ||||
Other named executive officers | 1.4X to 1.8X | 29% to 33% | 29% to 33% | 33% to 43% |
32
2009 Target % | ||||
Name | (of base salary) | |||
John K. Welch | 75 | % | ||
John C. Barpoulis | 60 | % | ||
Philip G. Sewell | 60 | % | ||
Robert Van Namen | 60 | % | ||
W. Lance Wright | 40 | % |
2009 Target % | ||||
Name | (of base salary) | |||
John K. Welch | 75 | % | ||
John C. Barpoulis | 60 | % | ||
Philip G. Sewell | 60 | % | ||
Robert Van Namen | 60 | % | ||
W. Lance Wright | 40 | % |
33
Annualized Value | ||||
Name | (as a % of base salary) | |||
CEO | 100 | % | ||
Other named executive officers | 60 | % |
Performance Goal | Difficulty | |
To ensure sufficient liquidity for ongoing Company operations and attract capital to support the financing of the Company’s American Centrifuge Plant | ||
• Threshold (80%): Ensure sufficient liquidity to fund ongoing Company operations. | • Intended to provide a minimum level of benefit while still providing a level of incentive aligned with ensuring liquidity for ongoing Company operations. | |
• Target (100%): Receive financing that will allow USEC to move forward with an economically viable American Centrifuge project. | • Because of uncertainties relating to the American Centrifuge project and the significant amount of capital needed, financing for the project is challenging to obtain. This objective was intended to not necessarily require a loan guarantee for achievement but to provide incentive to management to obtain financing to continue the project. | |
• Maximum (120%): Receive commitment(s) for the financing of the 3.8 million SWU per year centrifuge enrichment plant. | • As a result of the financial needs of the project and USEC’s credit profile, achievement of this objective would have required a loan guarantee from DOE, which was subject to a number of uncertainties, including matters outside of management’s control. | |
Actual Performance: | Threshold (80%) |
34
Restricted Stock | Plus: Performance Plan | Restricted Stock | ||||||||||
2009 Percentage | 2009 Annualized Target Value | 2010 Percentage | ||||||||||
Name | (of base salary) | (% of base salary) | (of base salary) | |||||||||
John K. Welch | 75 | % | +100 | % | =175 | % | ||||||
John C. Barpoulis | 60 | % | +60 | % | =120 | % | ||||||
Philip G. Sewell | 60 | % | +60 | % | =120 | % | ||||||
Robert Van Namen | 60 | % | +60 | % | =120 | % | ||||||
W. Lance Wright | 40 | % | +60 | % | =100 | % |
35
36
37
38
Number of | Stock | |||||||||||
Stock Ownership Guideline | Years of | Ownership as | ||||||||||
Name | (number of shares) | Service | of 12/31/09 | |||||||||
John K. Welch | 300,000 | 4 | 838,071 | |||||||||
John C. Barpoulis | 65,000 | 4 | 200,912 | |||||||||
Philip G. Sewell | 65,000 | 8 | 185,033 | |||||||||
Robert Van Namen | 65,000 | 11 | 211,808 | |||||||||
W. Lance Wright | 65,000 | 6 | 165,603 |
Joyce F. Brown
Joseph T. Doyle
John R. Hall
39
Change in | ||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||
Non-Qualified | ||||||||||||||||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||||||
Name and | Fiscal | Salary | Awards | Awards | Compensation | Earnings | Compensation | |||||||||||||||||||||||||
Principal Position | Year | (1) | (2) | (3) | (4) | (5) | (6) | Total | ||||||||||||||||||||||||
John K. Welch | 2009 | $ | 934,615 | $ | 2,125,767 | $ | 675,000 | $ | 544,500 | $ | 1,799,094 | $ | 60,953 | $ | 6,139,929 | |||||||||||||||||
President and CEO | 2008 | $ | 900,000 | $ | 1,720,430 | $ | 675,001 | $ | 371,853 | $ | 1,298,226 | $ | 61,512 | $ | 5,027,022 | |||||||||||||||||
2007 | $ | 828,462 | $ | 1,642,935 | $ | 415,314 | $ | 65,025 | $ | 925,499 | $ | 66,295 | $ | 3,943,530 | ||||||||||||||||||
John C. Barpoulis | 2009 | $ | 421,598 | $ | 507,355 | $ | 240,001 | $ | 197,120 | $ | 130,050 | $ | 20,321 | $ | 1,516,445 | |||||||||||||||||
Senior Vice President and | 2008 | $ | 400,000 | $ | 405,646 | $ | 239,999 | $ | 239,182 | $ | 92,036 | $ | 9,200 | $ | 1,386,063 | |||||||||||||||||
Chief Financial Officer | 2007 | $ | 349,808 | $ | 286,195 | $ | 122,594 | $ | 168,232 | $ | 29,725 | $ | 9,000 | $ | 965,554 | |||||||||||||||||
Philip G. Sewell | 2009 | $ | 505,928 | $ | 596,139 | $ | 282,000 | $ | 228,655 | $ | 67,889 | $ | 0 | $ | 1,680,611 | |||||||||||||||||
Senior Vice President, | 2008 | $ | 473,269 | $ | 476,635 | $ | 281,999 | $ | 282,677 | $ | 396,197 | $ | 0 | $ | 1,910,777 | |||||||||||||||||
American Centrifuge and | 2007 | $ | 424,615 | $ | 148,751 | $ | 148,862 | $ | 544,926 | $ | 749,935 | $ | 0 | $ | 2,017,089 | |||||||||||||||||
Russian HEU | ||||||||||||||||||||||||||||||||
Robert Van Namen | 2009 | $ | 425,769 | $ | 520,037 | $ | 246,001 | $ | 202,048 | $ | 189,922 | $ | 22,236 | $ | 1,606,013 | |||||||||||||||||
Senior Vice President, | 2008 | $ | 410,000 | $ | 413,463 | $ | 246,000 | $ | 240,696 | $ | 214,180 | $ | 30,038 | $ | 1,554,377 | |||||||||||||||||
Uranium Enrichment | 2007 | $ | 370,404 | $ | 129,845 | $ | 129,949 | $ | 473,866 | $ | 129,257 | $ | 26,466 | $ | 1,259,787 | |||||||||||||||||
W. Lance Wright | 2009 | $ | 384,231 | $ | 395,304 | $ | 148,000 | $ | 182,336 | $ | 235,319 | $ | 20,029 | $ | 1,365,219 | |||||||||||||||||
Senior Vice President, | 2008 | $ | 370,000 | $ | 299,121 | $ | 148,001 | $ | 215,181 | $ | 288,878 | $ | 20,827 | $ | 1,342,008 | |||||||||||||||||
Human Resources and | 2007 | $ | 319,615 | $ | 258,597 | $ | 112,085 | $ | 211,389 | $ | 213,867 | $ | 19,890 | $ | 1,135,443 | |||||||||||||||||
Administration |
(1) | The Company had 27 pay periods in 2009, however, annual salaries are calculated based on 26 pay periods. This additional pay period is included in the amounts in the Salary column for 2009. The amounts shown in the Salary column also include amounts paid in a year for unused accrued vacation time. | |
(2) | The amounts shown in the Stock Awards column represents the aggregate grant date fair value in the fiscal year related to stock awards earned by the named executive officers, computed in accordance with FASB ASC Topic 718. The amounts shown in the Stock Awards column for a fiscal year include (a) awards made to the named executive officers under the Company’s Long-Term Incentive Program during March of that year and (b) the restricted stock portion of the awards earned by the named executive officers under the Company’s Annual Incentive Program for that year based on the Compensation Committee’s evaluation of each officer’s performance during the year, which awards are paid in March of the following year. For 2009, all awards to the named executive officers under the Annual Incentive Program were paid 100% in cash and are included in the Non-Equity Incentive Plan Compensation column. In addition, the amount shown in the Stock Awards column for 2009 include the grant date fair value of awards (based on the fair market value on March 8, 2010) made on March 8, 2010 to each of the named executive officers under the 2009 Performance Plan for the performance period January 1, 2009 through December 31, 2009 as follows: Mr. Welch, $1,002,579; Mr. Barpoulis, $267,355; Mr. Sewell, $314,141; Mr. Van Namen, $274,038; and Mr. Wright, $247,304. For a discussion of valuation assumptions, see Note 11 to our consolidated financial statements included in our annual report onForm 10-K for the years ended December 31, 2009 and December 31, 2008, and Note 15 to our consolidated financial statements included in our annual report onForm 10-K/A for the year ended December 31, 2007. | |
(3) | The amounts shown in the Option Awards column represent the aggregate grant date fair value in the fiscal year related to option awards to the named executive officers under the Company’s Long-Term Incentive Program, computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 11 to our consolidated financial statements included in our annual report onForm 10-K for the years ended December 31, 2009 and December 31, 2008, and Note 15 to our consolidated financial statements included in our annual report onForm 10-K/A for the year ended December 31, 2007. | |
(4) | The amounts shown in the Non-Equity Incentive Plan Compensation column include the cash portion of the annual incentive awards made to each of the named executive officers based on the Compensation |
40
Committee’s evaluation of each officer’s performance during the year. The amounts shown for a fiscal year include cash amounts earned under the Company’s Annual Incentive Program for that year and paid in March of the following year. | ||
For 2009, all of the named executive officers had met their stock ownership guidelines and elected to receive their 2009 annual incentive award 100% in cash. | ||
For 2008, all of the named executive officers had met their stock ownership guidelines and were eligible to receive their entire 2008 annual incentive award in cash. Named executive officers are eligible to receive 20% incentive payments of restricted stock for taking amounts they are entitled to receive in cash in restricted stock in lieu of cash. Amounts shown represent only the portion of the annual incentive awards that was paid in cash as follows: Welch 0%, Barpoulis 50%, Sewell 50%, Van Namen 50%, Wright 50%. Mr. Welch took his entire annual incentive award of $871,190 in restricted stock and therefore received an incentive payment of $174,238 in restricted stock. Messrs. Barpoulis, Sewell, Van Namen and Wright took 50% of their annual incentive awards of $276,077, $324,394, $279,104 and $251,875, respectively, in restricted stock and therefore received incentive payments of $27,608, $32,439, $27,910 and $25,187, respectively, in restricted stock. Restricted stock granted to Messrs. Welch, Barpoulis, Sewell, Van Namen and Wright for 2008 annual incentive awards was granted in March 2009 and is shown in the Summary Compensation Table under Stock Awards for 2008. Amounts for 2008 also include cash payouts made in March 2009 under the 2006 — 2008 Executive Incentive Plan for the performance period March 1, 2006 through December 31, 2008 as follows: Mr. Welch, $371,853; Mr. Barpoulis, $101,144; Mr. Sewell, $120,480; Mr. Van Namen, $101,144; and Mr. Wright, $89,244. | ||
For 2007, Mr. Sewell and Mr. Van Namen had met their stock ownership guidelines and were eligible to receive their entire 2007 annual incentive awards of $384,147 and $340,947, respectively, in cash. All other named executive officers were eligible to receive 65% of their annual incentive awards in cash. Amounts shown represent only the portion of the annual incentive awards that was paid in cash as follows: Welch 0%, Barpoulis 52%, Sewell 100%, Van Namen 100%, Wright 52%. Mr. Welch took his entire annual incentive award of $1,086,678 in restricted stock and therefore received an incentive payment of $141,268 in restricted stock. Messrs. Barpoulis and Wright took 48% of their annual incentive awards of $323,523 and $289,744, respectively, in restricted stock and therefore received incentive payments of $8,409 and $7,524, respectively, in restricted stock. Restricted stock granted to Messrs. Welch, Barpoulis, and Wright for 2007 annual incentive awards was granted in March 2008 and is shown in the Summary Compensation Table under Stock Awards for 2007. Amounts for 2007 also include cash payouts made in 2007 to the named executive officers for a terminated performance program as follows: Mr. Welch, $65,025, Mr. Sewell, $160,779, Mr. Van Namen, $132,919 and Mr. Wright, $60,722. | ||
(5) | The amounts shown in the Change in Pension Value and Non-Qualified Deferred Compensation earnings column represent the change in the actuarial present value of the named executive officer’s accumulated benefits under the Employees’ Retirement Plan of USEC Inc., the USEC Inc. Pension Restoration Plan and the USEC Inc. 2006 Supplemental Executive Retirement Plan (or, in the case of Mr. Sewell, the 1999 Supplemental Executive Retirement Plan) at December 31, 2009, as compared to December 31, 2008; at December 31, 2008, as compared to December 31, 2007; and at December 31, 2007, as compared to December 31, 2006. None of our plans provide for above-market earnings on deferred compensation amounts, and as a result, the amounts reported here do not reflect any such earnings. | |
(6) | The amounts shown in the All Other Compensation column for 2009 for Mr. Welch, Mr. Barpoulis, Mr. Van Namen and Mr. Wright include Company matching contributions of $9,800 made under the USEC Savings Program. The amounts for Mr. Welch, Mr. Van Namen and Mr. Wright for 2009 also include Company matching contributions of $27,208, $12,436, and $10,230, respectively, made under the USEC Inc. Executive Deferred Compensation Plan, as included in the Nonqualified Deferred Compensation in Fiscal Year 2009 table. For Mr. Welch and Mr. Barpoulis, the amount shown for 2009 also includes $23,945 and $10,521, respectively, for perquisites and other personal benefits received in 2009. Perquisites and other personal benefits for Mr. Welch for 2009 included: financial counseling, club membership dues, and spouse travel and related expenses. Perquisites and other personal benefits for Mr. Barpoulis for 2009 included financial counseling and an annual physical. No one perquisite for Mr. Welch or Mr. Barpoulis exceeded the greater of $25,000 or 10% of the total amount of these benefits for such executive. |
41
All | All | |||||||||||||||||||||||||||||||||||||||||||||||
Other | Other | |||||||||||||||||||||||||||||||||||||||||||||||
Stock | Option | Exercise | Grant Date | |||||||||||||||||||||||||||||||||||||||||||||
Date of | Estimated Possible | Estimated Possible | Awards: | Awards: | or Base | Fair | ||||||||||||||||||||||||||||||||||||||||||
Compensation | Payouts Under | Payouts Under | Number | Number of | Price | Value of | ||||||||||||||||||||||||||||||||||||||||||
Committee | Non-Equity Incentive | Equity Incentive | of Shares | Securities | Option | Stock and | ||||||||||||||||||||||||||||||||||||||||||
Grant | Action | Plan Awards(1) | Plan Awards(2) | of Stock | Underlying | Awards | Option | |||||||||||||||||||||||||||||||||||||||||
Name | Date | (if different) | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | ($/Sh) | Awards(3) | ||||||||||||||||||||||||||||||||||||
John K. Welch | 2/10/09 | $ | 0 | $ | 900,000 | $ | 1,350,000 | |||||||||||||||||||||||||||||||||||||||||
2/25/09 | 193,548 | 241,935 | 290,322 | $ | 719,999 | |||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 281,029 | (5) | $ | 1,045,428 | ||||||||||||||||||||||||||||||||||||||||||
4/30/09 | 2/10/09(4 | ) | 181,452 | (6) | $ | 1,123,188 | ||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 372,928 | (7) | $ | 3.72 | $ | 675,000 | ||||||||||||||||||||||||||||||||||||||||
John C. Barpoulis | 2/10/09 | $ | 0 | $ | 280,000 | $ | 420,000 | |||||||||||||||||||||||||||||||||||||||||
2/25/09 | 51,613 | 64,516 | 77,419 | $ | 192,000 | |||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 44,528 | (5) | $ | 165,644 | ||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 64,516 | (6) | $ | 240,000 | ||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 132,597 | (7) | $ | 3.72 | $ | 240,000 | ||||||||||||||||||||||||||||||||||||||||
Philip G. Sewell | 2/10/09 | $ | 0 | $ | 329,000 | $ | 493,500 | |||||||||||||||||||||||||||||||||||||||||
2/25/09 | 60,645 | 75,806 | 90,967 | $ | 225,599 | |||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 52,321 | (5) | $ | 194,634 | ||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 75,806 | (6) | $ | 281,998 | ||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 155,801 | (7) | $ | 3.72 | $ | 282,000 | ||||||||||||||||||||||||||||||||||||||||
Robert Van Namen | 2/10/09 | $ | 0 | $ | 287,000 | $ | 430,500 | |||||||||||||||||||||||||||||||||||||||||
2/25/09 | 52,903 | 66,129 | 79,355 | $ | 196,799 | |||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 45,016 | (5) | $ | 167,460 | ||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 66,129 | (6) | $ | 246,000 | ||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 135,912 | (7) | $ | 3.72 | $ | 246,000 | ||||||||||||||||||||||||||||||||||||||||
W. Lance Wright | 2/10/09 | $ | 0 | $ | 259,000 | $ | 388,500 | |||||||||||||||||||||||||||||||||||||||||
2/25/09 | 47,742 | 59,677 | 71,612 | $ | 177,600 | |||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 40,624 | (5) | $ | 151,121 | ||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 39,785 | (6) | $ | 148,000 | ||||||||||||||||||||||||||||||||||||||||||
3/04/09 | 2/10/09(4 | ) | 81,768 | (7) | $ | 3.72 | $ | 148,000 |
(1) | Amounts shown are estimated possible cash payouts under the Company’s 2009 Annual Incentive Program based on performance against 2009 corporate and individual performance goals at the threshold (0%), target (100%) and maximum (150%) levels. As discussed in the “Compensation Discussion and Analysis — Annual Incentive,” the Compensation Committee approved revised individual performance goals effective August 1, 2009. Actual payouts under the 2009 Annual Incentive Program were approved by the Compensation Committee in February 2010 and were 61% to 70% of target for each of the named executive officers. The cash portion of these payouts are shown in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. Under the Annual Incentive Program annual incentives are paid in a combination of cash and restricted stock. For 2009, all named executive officers took 100% of their annual incentive awards in cash. | |
(2) | Amounts shown are estimated possible payouts under the Company’s 2009 Performance Plan for the period January 1, 2009 through December 31, 2009 based on performance against a pre-determined performance goal relating to ensuring sufficient liquidity for ongoing Company operations and attracting capital to support the financing of the Company’s American Centrifuge Plant at the threshold (80%), target (100%) and maximum (120%) levels. Awards were approved by the Compensation Committee in February 2010 and were 80% of target for each of the named executive officers. The actual payouts are included in the Stock Awards column of the Summary Compensation Table for 2009. | |
(3) | The value of the stock awards is based on the fair value of such award on the grant date, computed in accordance with FASB ASC Topic 718. | |
(4) | These annual incentive awards and long-term incentive awards were granted by the Compensation Committee, effective as of a later date following the release of the Company’s audited financial results. The long-term incentive award to Mr. Welch was effective upon approval by the shareholders of the 2009 Equity Incentive Plan. | |
(5) | Includes shares of restricted stock granted to the named executive officers in 2009 under the Company’s Annual Incentive Program based on performance against corporate and individual performance goals in 2008. These shares vested on March 4, 2010. |
42
(6) | Includes shares of restricted stock granted to the named executive officers in 2009 under the Company’s Long-Term Incentive Program. These shares will vest ratably over three years from the date of grant. | |
(7) | Includes non-qualified stock options granted to the named executive officers in 2009 under the Company’s Long-Term Incentive Program. These options will vest ratably over three years from the date of grant. |
Option Awards | Stock Awards | |||||||||||||||||||||||
Market | ||||||||||||||||||||||||
Number of | Number of | Number of | Value of | |||||||||||||||||||||
Securities | Securities | Shares or | Shares or | |||||||||||||||||||||
Underlying | Underlying | Units of | Units of | |||||||||||||||||||||
Unexercised | Unexercised | Option | Option | Stock That | Stock That | |||||||||||||||||||
Options | Options | Exercise | Expiration | Have Not | Have Not | |||||||||||||||||||
Name | Exercisable | Unexercisable | Price | Date | Vested | Vested | ||||||||||||||||||
John K. Welch | 100,000 | $ | 11.00 | 10/03/10 | 549,721 | (1) | $ | 2,116,426 | ||||||||||||||||
88,621 | $ | 12.09 | 3/28/11 | |||||||||||||||||||||
58,045 | 29,023 | (2) | $ | 13.24 | 3/05/12 | |||||||||||||||||||
100,897 | 201,794 | (3) | $ | 5.86 | 3/03/13 | |||||||||||||||||||
372,928 | (4) | $ | 3.72 | 3/04/14 | ||||||||||||||||||||
John C. Barpoulis | 8,655 | $ | 13.98 | 5/04/10 | 139,432 | (5) | $ | 536,813 | ||||||||||||||||
28,122 | $ | 12.09 | 3/28/11 | |||||||||||||||||||||
17,134 | 8,567 | (2) | $ | 13.24 | 3/05/12 | |||||||||||||||||||
35,874 | 71,749 | (3) | $ | 5.86 | 3/03/13 | |||||||||||||||||||
132,597 | (4) | $ | 3.72 | 3/04/14 | ||||||||||||||||||||
Philip G. Sewell | 59,300 | $ | 8.50 | 7/31/11 | 105,691 | (6) | $ | 406,910 | ||||||||||||||||
48,142 | $ | 7.02 | 8/07/12 | |||||||||||||||||||||
50,000 | $ | 7.00 | 8/06/13 | |||||||||||||||||||||
26,708 | $ | 16.90 | 3/23/10 | |||||||||||||||||||||
33,499 | $ | 12.09 | 3/28/11 | |||||||||||||||||||||
20,805 | 10,403 | (2) | $ | 13.24 | 3/05/12 | |||||||||||||||||||
42,152 | 84,305 | (3) | $ | 5.86 | 3/03/13 | |||||||||||||||||||
155,801 | (4) | $ | 3.72 | 3/04/14 | ||||||||||||||||||||
Robert Van Namen | 36,000 | $ | 8.50 | 7/31/11 | 142,401 | (7) | $ | 548,244 | ||||||||||||||||
18,000 | $ | 7.00 | 8/06/13 | |||||||||||||||||||||
23,775 | $ | 16.90 | 3/23/10 | |||||||||||||||||||||
28,122 | $ | 12.09 | 3/28/11 | |||||||||||||||||||||
18,162 | 9,081 | (2) | $ | 13.24 | 3/05/12 | |||||||||||||||||||
36,771 | 73,543 | (3) | $ | 5.86 | 3/03/13 | |||||||||||||||||||
135,912 | (4) | $ | 3.72 | 3/04/14 | ||||||||||||||||||||
W. Lance Wright | 20,710 | $ | 16.90 | 3/23/10 | 100,067 | (8) | $ | 385,258 | ||||||||||||||||
24,814 | $ | 12.09 | 3/28/11 | |||||||||||||||||||||
15,665 | 7,833 | (3) | $ | 13.24 | 3/05/12 | |||||||||||||||||||
22,123 | 44,245 | (4) | $ | 5.86 | 3/03/13 | |||||||||||||||||||
81,768 | (4) | $ | 3.72 | 3/04/14 |
43
(1) | Shares of restricted stock vest as follows: 38,396 shares with a vesting date of March 3, 2010; 341,513 shares with a vesting date of March 4, 2010; 10,448 shares with a vesting date of March 5, 2010; 38,396 shares with a vesting date of March 3, 2011; 60,484 shares with a vesting date of March 4, 2011; and 60,484 shares with a vesting date of March 4, 2012. | |
(2) | Stock options vest at the rate of 331/3% per year, with vesting dates of March 5, 2008, March 5, 2009, and March 5, 2010. | |
(3) | Stock options vest at the rate of 331/3% per year, with vesting dates of March 3, 2009, March 3, 2010, and March 3, 2011. | |
(4) | Stock options vest at the rate of 331/3% per year, with vesting dates of March 4, 2010, March 4, 2011, and March 4, 2012. | |
(5) | Shares of restricted stock vest as follows: 13,652 shares with a vesting date of March 3, 2010; 66,033 shares with a vesting date of March 4, 2010; 3,084 shares with a vesting date of March 5, 2010; 13,652 shares with a vesting date of March 3, 2011; 21,505 shares with a vesting date of March 4, 2011; and 21,506 shares with a vesting date of March 4, 2012. | |
(6) | Shares of restricted stock vest as follows: 10,435 shares with a vesting date of March 3, 2010; 49,889 shares with a vesting date of March 4, 2010; 2,436 shares with a vesting date of March 5, 2010; 10,435 shares with a vesting date of March 3, 2011; 16,248 shares with a vesting date of March 4, 2011; and 16,248 shares with a vesting date of March 4, 2012. | |
(7) | Shares of restricted stock vest as follows: 13,993 shares with a vesting date of March 3, 2010; 67,059 shares with a vesting date of March 4, 2010; 3,269 shares with a vesting date of March 5, 2010; 13,994 shares with a vesting date of March 3, 2011; 22,043 shares with a vesting date of March 4, 2011; and 22,043 shares with a vesting date of March 4, 2012. | |
(8) | Shares of restricted stock vest as follows: 8,419 shares with a vesting date of March 3, 2010; 53,885 shares with a vesting date of March 4, 2010; 2,820 shares with a vesting date of March 5, 2010; 8,419 shares with a vesting date of March 3, 2011; 13,262 shares with a vesting date of March 4, 2011; and 13,262 shares with a vesting date of March 4, 2012. |
Option Awards | Stock Awards | |||||||||||||||
Number of Shares | Value Realized on | Number of Shares | Value Realized on | |||||||||||||
Name | Acquired on Exercise | Exercise | Acquired on Vesting | Vesting(1) | ||||||||||||
John K. Welch | — | — | 268,729 | $ | 972,691 | |||||||||||
John C. Barpoulis | — | — | 47,953 | $ | 175,442 | |||||||||||
Philip G. Sewell | — | — | 61,154 | $ | 228,469 | |||||||||||
Robert Van Namen | — | — | 20,543 | $ | 77,572 | |||||||||||
W. Lance Wright | — | — | 39,150 | $ | 143,506 |
(1) | Amounts reflect the closing market price of the stock on the day the stock vested. |
44
Present Value of | ||||||||||||
Number of Years of | Accumulated | Payments During | ||||||||||
Name | Plan Name | Credited Service | Benefit(1) | Last Fiscal Year | ||||||||
John K. Welch | Retirement Plan | 4 yrs., 2 mos. | $ | 131,942 | $ | 0 | ||||||
Pension Restoration Plan | 4 yrs., 2 mos. | $ | 773,936 | $ | 0 | |||||||
2006 SERP | 4 yrs., 2 mos. | $ | 3,548,023 | $ | 0 | |||||||
Total | $ | 4,453,901 | $ | 0 | ||||||||
John C. Barpoulis | Retirement Plan | 4 yrs., 9 mos. | $ | 74,996 | $ | 0 | ||||||
Pension Restoration Plan | 4 yrs., 9 mos. | $ | 139,521 | $ | 0 | |||||||
2006 SERP | 4 yrs., 9 mos. | $ | 81,449 | $ | 0 | |||||||
Total | $ | 295,966 | $ | 0 | ||||||||
Philip G. Sewell | Retirement Plan | 8 yrs., 8 mos. | $ | 353,755 | $ | 0 | ||||||
Pension Restoration Plan | 8 yrs., 8 mos. | $ | 836,218 | $ | 0 | |||||||
1999 SERP | 8 yrs., 8 mos. | $ | 3,750,840 | $ | 0 | |||||||
Total | $ | 4,940,813 | $ | 0 | ||||||||
Robert Van Namen | Retirement Plan | 11 yrs. | $ | 200,774 | $ | 0 | ||||||
Pension Restoration Plan | 11 yrs. | $ | 424,193 | $ | 0 | |||||||
2006 SERP | 11 yrs. | $ | 348,956 | $ | 0 | |||||||
Total | $ | 973,923 | $ | 0 | ||||||||
W. Lance Wright | Retirement Plan | 6 yrs., 4 mos. | $ | 196,045 | $ | 0 | ||||||
Pension Restoration Plan | 6 yrs., 4 mos. | $ | 315,403 | $ | 0 | |||||||
2006 SERP | 6 yrs., 4 mos. | $ | 397,051 | $ | 0 | |||||||
Total | $ | 908,499 | $ | 0 |
(1) | In determining the present value of each participant’s pension benefit, a 5.84% discount rate is assumed. An assumed interest rate of 6.24% is used in converting Pension Restoration Plan, 2006 SERP and 1999 SERP annuities into lump sums. The lump sum interest rate is determined at the time of benefit commencement and reflects the un-annualized Moody’s Aa index bond yield plus 75 basis points. For purposes |
45
of this table, the calculation assumes retirement at the earliest age at which unreduced benefits could be paid, including projected future service for eligibility purposes only. |
• | Regular Formula: The monthly benefit under the “Regular Formula” is calculated as 1.2% of final average monthly compensation (base salary plus annual bonus) times years and months of credited service plus $110. There are no offsets to this benefit. | |
• | Alternate Formula: The monthly benefit under the “Alternate Formula” is calculated as 1.5% of final average monthly compensation (base salary plus annual bonus) times years and months of credited service minus 1.5% times actual or projected monthly primary Social Security benefit times years and months of credited service up to 331/3 years (up to a maximum of 50% of the actual or projected monthly Social Security benefit). | |
• | Minimum Formula: The monthly benefit under the “Minimum Formula” is calculated as $5 multiplied by the first ten years and months of credited service, plus $7 multiplied by the next ten years and months of credited service, plus $9 times the years and months of credited service in excess of 20 years, plus 10% (less 1% per year of credited service less than 8) of the final average monthly compensation as calculated under the Regular Formula plus $110. There are no offsets to this benefit. |
46
Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||||||||
Contributions | Contributions | Earnings | Withdrawals/ | Balance | ||||||||||||||||
Name | in Last FY(1) | in Last FY(2) | in Last FY(3) | Distributions | at Last FYE(4) | |||||||||||||||
John K. Welch | $ | 93,462 | $ | 27,208 | $ | 62,488 | — | $ | 381,992 | |||||||||||
John C. Barpoulis | — | — | — | — | — | |||||||||||||||
Philip G. Sewell | — | — | — | — | — | |||||||||||||||
Robert Van Namen | $ | 28,266 | $ | 12,436 | $ | 60,042 | — | $ | 224,777 | |||||||||||
W. Lance Wright | $ | 51,017 | $ | 10,230 | $ | 52,105 | — | $ | 189,921 |
(1) | Amount represents executive’s contributions to the Deferred Compensation Plan. These amounts are also included in the Summary Compensation Table in the Salary column. | |
(2) | Amount represents the Company’s contributions to the Deferred Compensation Plan. These amounts are also included in the Summary Compensation Table in the All Other Compensation column. | |
(3) | Amount represents earnings on the Deferred Compensation Plan during 2009. |
47
(4) | Amount represents the aggregate balance for the named executive officers as of December 31, 2009 under the Deferred Compensation Plan. Includes the executive’s contributions to the Deferred Compensation Plan (formerly the USEC Inc. 401(k) Restoration Plan) previously reported as compensation to the named executive officers in the Summary Compensation Table in the Salary column in previous years, including as follows: Mr. Welch $90,000 in 2008, $34,081 in 2007; Mr. Van Namen $37,547 in 2008, $15,866 in 2007; and Mr. Wright $52,067 in 2008, $9,222 in 2007. Amount includes the Company’s contributions to the Deferred Compensation Plan (formerly the USEC Inc. 401(k) Restoration Plan) previously reported as compensation in the Summary Compensation Table in the All Other Compensation column in previous years, including as follows: Mr. Welch $26,800 in 2008, $26,892 in 2007; Mr. Van Namen $20,838 in 2008, $17,466 in 2007; and Mr. Wright $11,627 in 2008, $10,890 in 2007. |
• | his current base salary and a prorated share of his current annual incentive (payable at the end of the performance period based on actual performance) up to the date of termination; | |
• | a lump sum cash severance equal to one year’s base salary at his current rate and an amount equal to his final average bonus (generally the average of his last three year’s annual incentive awards, both cash and restricted stock); and | |
• | continuation of medical and dental coverage as well as life insurance paid for by the Company for one year after termination (or until he receives similar coverage from a subsequent employer, whichever occurs first) and outplacement assistance services. |
48
• | a cash lump sum payment of his unpaid base salary through the date of termination, plus all other amounts to which he was entitled under any of the Company’s compensation or benefit plans under the terms of such plans; | |
• | a cash lump sum payment equal to 2.5 times the sum of the executive’s final annual base salary and his final average bonus. The executive’s final average bonus is generally the average of the three most recent annual incentive bonuses paid to the executive prior to the date of termination (whether paid in the form of cash or in grants of restricted stock); | |
• | continuation of life, accident and health insurance benefits for 2.5 years following the change in control, or, if sooner, until he is covered by comparable programs of a subsequent employer; | |
• | two and one-half additional years of service for purposes of vesting, eligibility and benefit accrual under the Company’s SERPs; and | |
• | if the executive receives payments that would subject him to any federal excise tax due under Section 4999 of the Internal Revenue Code, he would also receive a cash payment equal to the amount of such excise tax. The calculation of the 280Ggross-up amount in the tables below is based upon a 280G excise tax rate of 20% and a 35% income tax rate. |
49
Involuntary | ||||||||||||||||||||||||
or Good | ||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||
Executive Benefits | Involuntary | Involuntary | Termination | |||||||||||||||||||||
and Payments | Voluntary | Retirement | Not for Cause | For Cause | (Change | Death or | ||||||||||||||||||
Upon Termination | Termination | (1) | Termination | Termination | in Control) | Disability | ||||||||||||||||||
John K. Welch | ||||||||||||||||||||||||
Severance Payments(2) | $ | 0 | N/A | $ | 1,910,702 | $ | 0 | $ | 4,787,199 | $ | 0 | |||||||||||||
Stock Options | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
Restricted Stock | $ | 0 | N/A | $ | 2,116,426 | $ | 0 | $ | 2,116,426 | $ | 2,116,426 | |||||||||||||
Retirement Plan(3) | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
Pension Restoration Plan(3) | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
2006 SERP(4) | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 5,944,420 | (8) | $ | 4,193,968 | ||||||||||||
280G TaxGross-up | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 2,505,887 | $ | 0 | |||||||||||||
Continuing Benefits(5) | $ | 0 | N/A | $ | 42,558 | $ | 0 | $ | 106,396 | $ | 0 | |||||||||||||
Total | $ | 0 | $ | 4,069,686 | $ | 0 | $ | 15,460,328 | $ | 6,310,394 | ||||||||||||||
John C. Barpoulis | ||||||||||||||||||||||||
Severance Payments(2) | $ | 0 | N/A | $ | 702,402 | $ | 0 | $ | 1,766,663 | $ | 0 | |||||||||||||
Stock Options | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
Restricted Stock | $ | 0 | N/A | $ | 536,813 | $ | 0 | $ | 536,813 | $ | 536,813 | |||||||||||||
Retirement Plan(3) | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
Pension Restoration Plan(3) | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
2006 SERP(4) | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 468,538 | (8) | $ | 418,949 | ||||||||||||
280G TaxGross-up | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 431,094 | $ | 0 | |||||||||||||
Continuing Benefits(5) | $ | 0 | N/A | $ | 31,984 | $ | 0 | $ | 79,960 | $ | 0 | |||||||||||||
Total | $ | 0 | $ | 1,271,199 | $ | 0 | $ | 3,283,068 | $ | 955,762 | ||||||||||||||
Philip G. Sewell | ||||||||||||||||||||||||
Severance Payments(2) | $ | 0 | $ | 0 | $ | 826,659 | $ | 0 | $ | 2,086,308 | $ | 0 | ||||||||||||
Stock Options | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Restricted Stock | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Retirement Plan(3) | $ | 353,755 | $ | 353,755 | $ | 353,755 | $ | 353,755 | $ | 353,755 | $ | 183,574 | (7) | |||||||||||
Pension Restoration Plan(3) | $ | 836,218 | $ | 836,218 | $ | 836,218 | $ | 836,218 | $ | 836,218 | $ | 744,733 | (7) | |||||||||||
1999 SERP(6) | $ | 3,750,840 | $ | 3,750,840 | $ | 3,750,840 | $ | 0 | $ | 3,750,840 | (8) | $ | 1,946,427 | |||||||||||
280G TaxGross-up | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
Continuing Benefits(5) | $ | 0 | $ | 0 | $ | 24,231 | $ | 0 | $ | 60,576 | $ | 0 | ||||||||||||
Total | $ | 4,940,813 | $ | 4,940,813 | $ | 5,791,703 | $ | 1,189,973 | $ | 7,087,697 | $ | 2,874,734 |
50
Involuntary | ||||||||||||||||||||||||
or Good | ||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||
Executive Benefits | Involuntary | Involuntary | Termination | |||||||||||||||||||||
and Payments | Voluntary | Retirement | Not for Cause | For Cause | (Change | Death or | ||||||||||||||||||
Upon Termination | Termination | (1) | Termination | Termination | in Control) | Disability | ||||||||||||||||||
Robert Van Namen | ||||||||||||||||||||||||
Severance Payments(2) | $ | 0 | N/A | $ | 721,653 | $ | 0 | $ | 1,811,635 | $ | 0 | |||||||||||||
Stock Options | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
Restricted Stock | $ | 0 | N/A | $ | 548,244 | $ | 0 | $ | 548,244 | $ | 548,244 | |||||||||||||
Retirement Plan(3) | $ | 111,930 | N/A | $ | 209,926 | $ | 111,930 | $ | 111,930 | $ | 130,494 | (7) | ||||||||||||
Pension Restoration Plan(3) | $ | 280,471 | N/A | $ | 399,361 | $ | 280,471 | $ | 280,471 | $ | 291,174 | (7) | ||||||||||||
2006 SERP(4) | $ | 489,277 | N/A | $ | 351,422 | $ | 0 | $ | 720,198 | (8) | $ | 471,480 | ||||||||||||
280G TaxGross-up | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
Continuing Benefits(5) | $ | 0 | N/A | $ | 34,112 | $ | 0 | $ | 85,279 | $ | 0 | |||||||||||||
Total | $ | 881,678 | $ | 2,264,718 | $ | 392,401 | $ | 3,557,757 | $ | 1,441,392 | ||||||||||||||
W. Lance Wright | ||||||||||||||||||||||||
Severance Payments(2) | $ | 0 | N/A | $ | 645,268 | $ | 0 | $ | 1,611,047 | $ | 0 | |||||||||||||
Stock Options | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
Restricted Stock | $ | 0 | N/A | $ | 385,258 | $ | 0 | $ | 385,258 | $ | 385,258 | |||||||||||||
Retirement Plan(3) | $ | 190,699 | N/A | $ | 190,699 | $ | 190,699 | $ | 190,699 | $ | 91,575 | (7) | ||||||||||||
Pension Restoration Plan(3) | $ | 321,775 | N/A | $ | 321,775 | $ | 321,775 | $ | 321,775 | $ | 321,775 | (7) | ||||||||||||
2006 SERP(4) | $ | 397,051 | N/A | $ | 397,051 | $ | 0 | $ | 839,559 | (8) | $ | 397,051 | ||||||||||||
280G TaxGross-up | $ | 0 | N/A | $ | 0 | $ | 0 | $ | 423,132 | $ | 0 | |||||||||||||
Continuing Benefits(5) | $ | 0 | N/A | $ | 18,377 | $ | 0 | $ | 45,944 | $ | 0 | |||||||||||||
Total | $ | 909,525 | $ | 1,958,428 | $ | 512,474 | $ | 3,817,414 | $ | 1,195,659 |
(1) | As of December 31, 2009, Mr. Sewell is eligible for normal retirement in the 1999 SERP and early retirement in the Retirement Plan and the Pension Restoration Plan. Because of his years of services, Mr. Sewell would have been eligible to commence an immediate unreduced retirement benefit if he had retired as of December 31, 2009. As of December 31, 2009, Mr. Wright is eligible for normal retirement under the 2006 SERP. No other named executive officer is eligible for an early or normal retirement under any of the Company’s retirement programs as of December 31, 2009. | |
(2) | In calculating the Severance Payment payable upon involuntary not for cause termination under the USEC Inc. Executive Severance Plan, the final average bonuses for the named executive officers includes each executive’s 2009 target annual incentive bonus because annual incentive bonuses for 2009 had not been determined as of December 31, 2009. | |
In calculating the Severance Payment under the executives’ change in control agreements, the final average bonuses for the named executive officers were based on the average of any bonuses paid in 2008, 2007 and 2006. | ||
(3) | Only Mr. Sewell, Mr. Van Namen and Mr. Wright are vested under the Retirement Plan and the Pension Restoration Plan as of December 31, 2009. Mr. Sewell (age 63 as of December 31, 2009) is eligible for early retirement and would commence an immediate unreduced benefit upon termination. Mr. Van Namen (age 48 as of December 31, 2009) is not yet eligible for retirement but is eligible for immediate commencement of benefits accrued prior to 2001, payable as a lump sum. Mr. Van Namen will be eligible to commence a reduced pension for benefits accrued after 2000 at age 50. Mr. Wright (age 62 as of December 31, 2009) is not yet eligible for retirement but is eligible to commence an immediate, reduced benefit. Pension Restoration Plan benefits earned and vested after December 31, 2004 will be paid as a lump sum. Amounts shown are the actuarial present value of annuity payments and lump sums, as applicable. The present value of accumulated benefits is calculated using the assumptions under FASB ASC Topic715-30 as shown in Note 10 to our consolidated financial statements included in our annual report onForm 10-K for the year ended December 31, 2009. In the case of disability, each of the executives would continue to accrue service during periods of disability rather than commence a retirement benefit. |
51
(4) | Mr. Van Namen and Mr. Wright are the only named executive officers vested under the 2006 SERP. Mr. Welch and Mr. Barpoulis are only vested under the 2006 SERP in the case of a change in control or death or disability. Accrued SERP benefits are forfeited upon a termination for cause. Mr. Barpoulis (in the case of a change in control) and Mr. Van Namen are ineligible to commence payment so their amounts represent the present value of an age 55 lump sum payment. Mr. Welch (in the case of a change in control) and Mr. Wright are eligible for immediate lump sum benefits. Lump sum death benefits are payable immediately. The 2006 SERP provides for a minimum benefit objective of 10% of final average pay (20% in the case of Mr. Welch) in the case of a change in control or death or disability. Amounts for all executives represent the present value of accrued benefits payable in lump sum form. The present value of accumulated benefits is calculated using the assumptions under FASB ASC Topic715-30 as shown in Note 10 to our consolidated financial statements included in our annual report onForm 10-K for the year ended December 31, 2009. | |
(5) | Includes (a) the cost of continuation of medical, dental and life insurance benefits for a period of one year following termination of employment in the case of an involuntary not for cause termination; and (b) the cost of continuation of medical, dental, life insurance and disability benefits for a period of 2.5 years following termination of employment in the case of a change in control. Amounts vary by executive based on their specific benefit elections. | |
(6) | Mr. Sewell is the only named executive officer with benefits under the 1999 SERP. Mr. Sewell is eligible to commence an immediate, unreduced benefit upon termination. Benefits accrued prior to 2005 are payable in the form of an annuity and post-2004 benefits are payable as the lump sum equivalent of such annuity. Accrued 1999 SERP benefits are forfeited upon a termination for cause. The amount shown is the actuarial present value of life annuity and lump sum payments. Death benefits are 50% of Mr. Sewell’s pre-2005 accrued benefit and 100% of his post-2004 accrued benefit, with survivor benefits payable as an annuity. The present value of accumulated benefits is calculated using the assumptions under FASB ASC Topic715-30 as shown in Note 10 to our consolidated financial statements included in our annual report onForm 10-K for the year ended December 31, 2009. | |
(7) | In the case of death, Mr. Sewell’s, Mr. Van Namen’s and Mr. Wright’s beneficiaries would be entitled to survivor annuity benefits under the Retirement Plan and the Pension Restoration Plan and would be eligible to commence survivor benefits immediately. Mr. Sewell’s survivor benefit is 50% of the amount Mr. Sewell would receive in the form of a single life annuity. Mr. Van Namen’s survivor’s benefit is 50% of the amount Mr. Van Namen would receive in the form of a single life annuity and is reduced for early commencement, subject to a minimum survivor benefit of 25%. Mr. Wright’s survivor’s benefit is the 50% survivor portion of a joint and survivor annuity and is reduced for early commencement. Benefits accrued and vested after December 31, 2004 in the Pension Restoration Plan are payable as a lump sum. In the case of disability, each of the executives would continue to accrue service during periods of disability rather than commence a retirement benefit. | |
(8) | Change in control agreements provide for an additional 2.5 years of service for vesting, eligibility and benefit accrual for the executive’s retirement benefits. This is provided through the executive’s SERP benefit and accordingly, amount reflects gross benefit with 2.5 year service enhancement, less vested accrued benefits under the Retirement Plan and the Pension Restoration Plan. |
52
Amount Billed | Amount Billed | |||||||
For Year Ended | For Year Ended | |||||||
Type of Fee | December 31, 2009 | December 31, 2008 | ||||||
(In thousands) | (In thousands) | |||||||
Audit Fees(1) | $ | 1,081 | $ | 987 | ||||
Audit-Related Fees(2) | $ | 15 | $ | 13 | ||||
Tax Fees(3) | $ | 70 | $ | 66 | ||||
All Other Fees(4) | $ | 3 | $ | 3 | ||||
Total | $ | 1,169 | $ | 1,069 | ||||
(1) | Primarily audits of the financial statements for both periods including internal control testing over financial reporting and reviews of quarterly financial statements for both periods. | |
(2) | Compliance report for revolving credit facility. | |
(3) | Primarily services related to selected tax projects and IRS audit assistance for both periods. | |
(4) | Service fee for access to electronic publication. |
53
54
55
Both are available 24 hours a day, 7 days a week.
http://www.proxyvoting.com/usu
1-866-540-5760
70156
Please mark your votes as indicated in this example | x |
For | Withhold | For | Withhold | FOR | AGAINST | ABSTAIN | ||||||||||||
1. Election of Directors: | ||||||||||||||||||
01 James R. Mellor | o | o | 06 John R. Hall | o | o | 2. | To ratify the appointment of PricewaterhouseCoopers LLP as USEC’s independent auditors for 2010. | o | o | o | ||||||||
02 Michael H. Armacost | o | o | 07 William J. Madia | o | o | |||||||||||||
03 Joyce F. Brown | o | o | 08 W. Henson Moore | o | o | |||||||||||||
04 Joseph T. Doyle | o | o | 09 John K. Welch | o | o | |||||||||||||
05 H. William Habermeyer | o | o | ||||||||||||||||
Mark Here for Address Change or Comments SEE REVERSE | o |
Signature | Signature | Date | ||||||||
FOR THE 2010 ANNUAL MEETING OF USEC SHAREHOLDERS
Address Change/Comments (Mark the corresponding box on the reverse side) | ||||
P.O. BOX 3550
SOUTH HACKENSACK, NJ 07606-9250
70156