Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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. )
Exchange Act of 1934 (Amendment No. )
Filed by the Registrantþ
Filed by a Party other than the Registranto
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 |
PIKE ELECTRIC CORPORATION
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: | ||
N/A | |||
(2) | Aggregate number of securities to which transaction applies: | ||
N/A | |||
(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): | ||
N/A | |||
(4) | Proposed maximum aggregate value of transaction: | ||
N/A | |||
(5) | Total fee paid: | ||
N/A | |||
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: | ||
N/A | |||
(2) | Form, Schedule or Registration Statement No.: | ||
N/A | |||
(3) | Filing Party: | ||
N/A | |||
(4) | Date Filed: | ||
N/A | |||
Table of Contents
October 23, 2008
Dear Stockholder:
I am pleased to invite you to our annual stockholders meeting to be held at 9:30 a.m. on Wednesday, December 3, 2008, at the Bermuda Run Country Club, in Bermuda Run, North Carolina.
At this year’s meeting, you will be asked to vote for the election of directors, ratify the selection of our independent registered public accounting firm and consider any other business that may properly come before the meeting. It is important that all Pike Electric stockholders, regardless of the number of shares owned, participate in the affairs of the Company. At our last annual meeting, in December 2007, over 91% of Pike Electric’s shares of common stock were represented in person or by proxy.
Pursuant to Securities and Exchange Commission rules, we are providing access to our proxy materials over the Internet. Accordingly, we will mail, on or about October 23, 2008, a Notice of Internet Availability of Proxy Materials to our stockholders of record and beneficial owners at the close of business on October 7, 2008. On the date of mailing of the Notice of Internet Availability of Proxy Materials, all stockholders and beneficial owners will have the ability to access all of the proxy materials on a website referred to in the Notice of Internet Availability of Proxy Materials. These proxy materials will be available free of charge.
Your vote is extremely important. We appreciate your taking the time to vote promptly. After reading the Proxy Statement, please vote, at your earliest convenience by telephone or Internet, or request a proxy card to complete, sign and return by mail. If you decide to attend the Annual Meeting and would prefer to vote by ballot, your proxy will be revoked automatically and only your vote at the Annual Meeting will be counted. YOUR SHARES CANNOT BE VOTED UNLESS YOU (I) VOTE BY TELEPHONE, (II) VOTE BY INTERNET, (III) REQUEST A PAPER PROXY CARD, TO COMPLETE, SIGN AND RETURN BY MAIL, OR (IV) ATTEND THE ANNUAL MEETING AND VOTE IN PERSON.
Thank you for your continued support of Pike Electric and we hope you will attend the meeting.
Sincerely, | ||||
J. Eric Pike | ||||
Chairman, Chief Executive Officer and President |
Table of Contents
PIKE ELECTRIC CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 3, 2008
TO BE HELD DECEMBER 3, 2008
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Pike Electric Corporation, a Delaware corporation, will be held on Wednesday, December 3, 2008 at 9:30 a.m., local time, at the Bermuda Run Country Club, 324 Bermuda Run Drive, Bermuda Run, North Carolina 27006, for the purpose of considering and acting upon the following:
1. | The election of seven members to our Board of Directors. | ||
2. | A proposal to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2009. | ||
3. | Any and all other matters that may properly come before the meeting or any adjournment thereof. |
The Board of Directors recommends a vote “FOR” each of the proposals.
We describe the above items in more detail in our proxy statement accompanying this notice. Only stockholders who owned our common stock at the close of business on October 7, 2008 may attend and vote at the meeting or any adjournment thereof. You may view a list of the stockholders entitled to vote at the meeting during the ten days before the meeting at our principal executive offices located at 100 Pike Way, Mount Airy, North Carolina 27030.
To assure your representation at the 2008 Annual Meeting, you are urged to cast your vote, as instructed in the Notice of Internet Availability of Proxy Materials, over the Internet or by telephone as promptly as possible. You may also request a paper proxy card to submit your vote by mail, if you prefer. Any stockholder of record attending the Annual Meeting may vote in person, even if he or she has voted over the Internet, by telephone or returned a completed proxy card.
By Order of the Board of Directors, | ||||
James R. Fox | ||||
Corporate Secretary, Vice President & General Counsel |
Mount Airy, North Carolina
October 23, 2008
October 23, 2008
YOUR VOTE IS EXTREMELY IMPORTANT. YOU ARE URGED TO VOTE BY TELEPHONE OR INTERNET AS PROMPTLY AS POSSIBLE. ALTERNATIVELY, YOU MAY REQUEST A PAPER PROXY CARD, WHICH YOU MAY COMPLETE, SIGN AND RETURN BY MAIL.
TABLE OF CONTENTS
Page | ||||
1 | ||||
4 | ||||
6 | ||||
8 | ||||
8 | ||||
8 | ||||
8 | ||||
9 | ||||
10 | ||||
11 | ||||
11 | ||||
12 | ||||
13 | ||||
13 | ||||
13 | ||||
13 | ||||
19 | ||||
22 | ||||
24 | ||||
24 | ||||
30 | ||||
31 | ||||
32 | ||||
32 | ||||
33 | ||||
33 | ||||
33 | ||||
Table of Contents
PIKE ELECTRIC CORPORATION
PROXY STATEMENT FOR
2008 ANNUAL MEETING OF STOCKHOLDERS
2008 ANNUAL MEETING OF STOCKHOLDERS
GENERAL INFORMATION
Introduction
Our Board of Directors is soliciting proxies for use at the 2008 Annual Meeting of Stockholders to be held Wednesday, December 3, 2008 at 9:30 a.m., local time, at the Bermuda Run Country Club, 324 Bermuda Run Drive, Bermuda Run, North Carolina 27006, and at any adjournment thereof. Our principal executive offices are located at 100 Pike Way, Mount Airy, North Carolina 27030.
In accordance with rules recently adopted by the SEC, instead of mailing a printed copy of our proxy materials to each stockholder of record, we are furnishing proxy materials to our stockholders on the Internet. If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials other than as described below. Instead, the Notice of Internet Availability of Proxy Materials will instruct you as to how you may access and review all of the important information contained in the proxy materials. The Notice of Internet Availability of Proxy Materials also instructs you as to how you may submit your proxy by telephone or over the Internet. If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability of Proxy Materials.
It is anticipated that the Notice of Internet Availability of Proxy Materials is first being sent to stockholders on or about October 23, 2008. The proxy statement and the form of proxy relating to the 2008 Annual Meeting are first being made available to stockholders on or about October 23, 2008.
Record Date and Shares Outstanding
Holders of record of our common stock at the close of business on October 7, 2008, the record date, are entitled to notice of and to vote at the meeting. On the record date, 33,316,713 shares of our common stock were issued and outstanding.
Methods of Voting
Each share of our common stock outstanding on the record date is entitled to one vote on all matters presented at the 2008 Annual Meeting, except for the 305,190 outstanding shares of restricted common stock. We are offering stockholders the following methods of voting:
• | You may vote by telephone; | ||
• | You may vote over the Internet; | ||
• | You may vote in person at the 2008 Annual Meeting; and | ||
• | You may request a proxy card from us, and indicate your vote by completing, signing and dating the card where indicated and by mailing or otherwise returning the card in the enclosed prepaid envelope. |
Table of Contents
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation may revoke it at any time before it is voted at the 2008 Annual Meeting by (1) delivering a written notice of revocation to the Company’s Secretary at our principal executive offices, (2) submitting a later-dated proxy relating to the same shares or (3) attending the 2008 Annual Meeting, requesting that the proxy be revoked and then voting in person. If a choice is specified in the proxy, shares represented thereby will be voted in accordance with such choice. If no choice is specified, the proxy will be voted “FOR” the proposals described herein and the seven nominees. Attending the 2008 Annual Meeting will not revoke your proxy unless you specifically request that it be revoked.
Solicitation of Proxies
We will bear the cost of soliciting proxies. Copies of solicitation material will be made available upon request to brokerage houses, fiduciaries, and custodians holding shares in their names that are beneficially owned by others to forward to such beneficial owners. We may reimburse such persons for their costs of forwarding the solicitation material to such beneficial owners. The original solicitation of proxies may be supplemented by solicitation by telephone, electronic communication, or other means by directors, officers, employees, or agents of Pike Electric. No additional compensation will be paid to these individuals for any such services. The Company may retain a proxy solicitor to assist in the solicitation of proxies, for which the Company will pay an estimated fee of $1,000 plus reimbursement of expenses.
Annual Report
The Notice of Annual Meeting, this Proxy Statement and our Annual Report for the fiscal year ended June 30, 2008 have been made available to all stockholders entitled to notice and to vote at the Annual Meeting. The Annual Report is not incorporated into this Proxy Statement and is not considered proxy-soliciting material. The Annual Report is posted at the following website addresses:www.pike.comandwww.proxyvote.com.
Quorum; Required Vote; Abstentions and Broker Non-Votes
The presence, in person or by proxy, of the holders of a majority of the votes entitled to be cast by the stockholders entitled to vote at the meeting is necessary to constitute a quorum at the 2008 Annual Meeting. Abstentions and broker non-votes will be treated as being present for the purpose of determining the presence of a quorum at the 2008 Annual Meeting. A “brokernon-vote” occurs when a bank, broker or other nominee holder has not received voting instructions with respect to a particular matter and the nominee holder does not have discretionary authority to vote on that matter.
In the election of directors, the seven director nominees receiving the most affirmative votes out of the shares of common stock present (either in person or by proxy) and entitled to vote at the meeting will be elected as directors. Abstentions and broker non-votes will have no effect on the election of directors.
Each other proposal in this proxy statement will be approved if it receives a majority of the votes present, either in person or by proxy, and entitled to vote at the 2008 Annual Meeting. If you submit your proxy or attend the meeting but choose to abstain from voting on any proposal, you will be considered present at the meeting and not voting in favor of the proposal. As a result, an abstention will have the same effect as if you had voted against the proposal. In contrast, a “broker non-vote” is deemed not entitled to vote at the meeting with regard to that proposal so that it does not have any effect.
2
Table of Contents
Deadlines for Receipt of Stockholder Proposals
Stockholder proposals intended to be included in our proxy statement and voted on at the 2009 Annual Meeting of Stockholders must be received at our offices at 100 Pike Way, Mount Airy, North Carolina 27030, Attention: Corporate Secretary, on or before June 27, 2009. Applicable rules and regulations of the SEC govern the submission of stockholder proposals and our consideration of them for inclusion in next year’s proxy statement and form of proxy.
Pursuant to our bylaws, in order for any business not included in the proxy statement for the 2009 Annual Meeting of Stockholders to be brought before the meeting by a stockholder of record, such stockholder must give notice of that business to our Corporate Secretary no earlier than August 7, 2009 nor any later than September 6, 2009. If the date of the meeting is advanced by more than 30 days or delayed by more than 60 days from December 3, 2009, the notice must be received no earlier than the 120th day prior to the date of the 2009 Annual Meeting of Stockholders and no later than either the 90th day prior to the date of the 2009 Annual Meeting of Stockholders or the 10th day after public disclosure of the actual date of our 2009 Annual Meeting of Stockholders, whichever is later. The notice must contain the information required by our bylaws.
3
Table of Contents
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information about the beneficial ownership of our common stock as of October 7, 2008. We have listed each person known to us that beneficially owns more than 5% of our outstanding common stock, each of our directors, each of our NEOs identified in the Summary Compensation Table below, and all directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the SEC. The percentage ownership is based on 33,011,523 shares of common stock outstanding as of October 7, 2008, which excludes the 305,190 outstanding shares of restricted common stock that the holders thereof are not entitled to vote until the restrictions lapse. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options held by that person that are currently exercisable or exercisable within 60 days of October 7, 2008 are deemed outstanding. These shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Except as indicated in the footnotes to this table and as provided pursuant to applicable community property laws, each stockholder named in the table has sole voting and investment power with respect to the shares set forth opposite such stockholder’s name. Unless otherwise indicated, the address for each of the individuals listed below is c/o Pike Electric Corporation, 100 Pike Way, Mount Airy, North Carolina 27030.
Number of Shares and Nature of | Ownership | |||||||
Name of Beneficial Owner | Beneficial Ownership | Percentage | ||||||
Lindsay Goldberg | 13,111,093 | (1) | 39.7 | % | ||||
Tontine Capital | 3,261,725 | (2) | 9.9 | % | ||||
J. Eric Pike | 2,858,352 | (3) | 8.4 | % | ||||
Charles E. Bayless | 8,778 | (4) | * | |||||
Adam P. Godfrey | — | (5) | * | |||||
James R. Helvey III | 8,480 | (6) | * | |||||
Robert D. Lindsay | 13,111,093 | (7) | 39.7 | % | ||||
Daniel J. Sullivan | 1,685 | (8) | * | |||||
Louis F. Terhar | 4,778 | (9) | * | |||||
Anthony K. Slater | 30,667 | (10) | * | |||||
Audie G. Simmons | 424,563 | (11) | 1.3 | % | ||||
James R. Fox | 13,000 | (12) | * | |||||
Directors and executive officers as a group (10 persons) | 16,449,396 | 47.8 | % |
* | Less than one percent. | |
(1) | The information shown is based on a Schedule 13G filed with the SEC on February 14, 2006 by LGB Pike II LLC, Lindsay Goldberg & Bessemer L.P., Lindsay Goldberg & Bessemer GP LP and Lindsay Goldberg & Bessemer GP LLC (collectively, the “Lindsay Goldberg Entities”). The Schedule 13G reports that each Lindsay Goldberg Entity has sole voting and sole dispositive power with respect to the securities. The shares of our common stock are held directly by LGB Pike II LLC, whose sole manager is Lindsay Goldberg & Bessemer L.P. The general partner of Lindsay Goldberg & Bessemer L.P. is Lindsay Goldberg & Bessemer GP LP, whose general partner is Lindsay Goldberg & Bessemer GP LLC. Except to the extent of its pecuniary interest therein, each of Lindsay Goldberg & Bessemer L.P., Lindsay Goldberg & Bessemer GP LP and Lindsay Goldberg & Bessemer GP LLC disclaims beneficial ownership of the securities held by LGB Pike II LLC. The address for each Lindsay Goldberg Entity is c/o Lindsay Goldberg & Bessemer L.P., 630 Fifth Avenue, 30th Floor, New York, New York 10111. |
4
Table of Contents
(2) | The information shown is based on a Schedule 13G/A filed with the SEC on February 8, 2008 by Jeffrey L. Gendell, Tontine Overseas Associates, L.L.C., Tontine Capital Partners, L.P. and Tontine Capital Management, L.L.C. (collectively, “Tontine Capital”). The Schedule 13G reports that Jeffrey L. Gendell has shared voting and shared dispositive power with respect to all such shares. The Schedule 13G also reports that (a) Tontine Overseas Associates, L.L.C. has shared voting and shared dispositive power with respect to 942,125 of such shares and (b) Tontine Capital Partners, L.P. and Tontine Capital Management, L.L.C. each have shared voting and shared dispositive power with respect to 2,319,600 of such shares. The address of each such person is 55 Railroad Avenue, Greenwich, Connecticut 06830. | |
(3) | Consists of (a) 1,549,253 shares of common stock held by Takuan LLC, an entity controlled by Mr. Pike, (b) 189,367 shares of common stock owned directly, (c) 67,467 shares of common stock held by the Joe B./Anne A. Pike Generation Skipping Trust, of which Mr. Pike is a trustee and, as a result, over which he has voting power, and (d) 1,052,265 shares subject to stock options. Excludes 108,384 shares of restricted common stock. | |
(4) | Consists of 8,778 shares of common stock owned directly. Excludes 4,093 shares of restricted common stock. | |
(5) | By virtue of his affiliation with the Lindsay Goldberg Entities, Mr. Godfrey may be deemed to have or share beneficial ownership of shares of our common stock beneficially owned by Lindsay Goldberg. See note 1 above. Mr. Godfrey expressly disclaims beneficial ownership of such common stock, except to the extent of his pecuniary interest therein. The address for Mr. Godfrey is c/o Lindsay Goldberg, 630 Fifth Avenue, 30th Floor, New York, New York 10111. | |
(6) | Consists of 8,480 shares of common stock owned directly. Excludes 7,014 shares of restricted common stock. | |
(7) | Mr. Lindsay, through intermediate entities, indirectly has shared control over Lindsay Goldberg & Bessemer L.P., the sole manager of LGB Pike II LLC. By virtue of this relationship, he may be deemed to have or share beneficial ownership of shares of our common stock beneficially owned by the Lindsay Goldberg Entities. See note 1 above. Mr. Lindsay expressly disclaims beneficial ownership of such common stock, except to the extent of his pecuniary interest therein. The address for Mr. Lindsay is c/o Lindsay Goldberg, 630 Fifth Avenue, 30th Floor, New York, New York 10111. | |
(8) | Consists of 1,685 shares of common stock owned directly. Excludes 4,798 shares of restricted common stock. | |
(9) | Consists of 4,778 shares of common stock owned directly. Excludes 4,093 shares of restricted common stock. | |
(10) | Consists of options owned directly to purchase 30,667 shares of common stock. Excludes 21,934 shares of restricted common stock. | |
(11) | Consists of 89,401 shares of common stock and options to purchase 335,162 shares of common stock, all of which are owned directly. Excludes 26,080 shares of restricted common stock. | |
(12) | Consists of 1,000 shares of common stock and options to purchase 12,000 shares of common stock, all of which are owned directly. Excludes 13,167 shares of restricted common stock. |
5
Table of Contents
PROPOSAL 1:
ELECTION OF DIRECTORS
Our Board of Directors currently consists of seven members: J. Eric Pike (Chairman), Charles E. Bayless,Adam P. Godfrey, James R. Helvey III, Robert D. Lindsay, Daniel J. Sullivan and Louis F. Terhar. Seven directors are to be elected at the 2008 Annual Meeting to hold office until the next annual meeting of stockholders and until their successors are duly elected and qualified.
Each of the nominees has consented to serve if elected to our Board of Directors. It is the intention of the persons named as proxies in the accompanying form of proxy to vote all proxies solicited for the seven nominees listed below unless the authority to vote is withheld. If for any reason any nominee will not become a candidate for election at the 2008 Annual Meeting, an event not now anticipated, the persons named in the proxy will vote for such substitute nominees as are designated by the Board of Directors. The principal occupation and certain other information concerning the nominees for directors are set forth on the following pages.
Nominees for Election of Directors
J. Eric Pike, age 40, has been a director since 1994. Mr. Pike has served as President since 1998, Chief Executive Officer since 2002 and Chairman since July 2005. He is the grandson of our founder Floyd Pike, joined the Company in 1990 as anA-class lineman on an overhead construction crew, advancing through various office positions, and served as Vice President of the Central Region from 1993 to 1998, where he was responsible for the powerline operations in North Carolina and South Carolina. Mr. Pike graduated from Emory University with a B.A. in History.
Charles E. Bayless, age 65, has been a director since 2006. Mr. Bayless was the President of the West Virginia University Institute of Technology from April 2005 until June 2008. Mr. Bayless served as Chairman, President, and Chief Executive Officer of Illinova Corporation, an electric utility company, from 1998 to 1999. From 1992 to 1998, he served as Chief Executive Officer of UniSource Energy Corp., an electric utility company. Mr. Bayless holds a B.S.E.E. from the West Virginia University Institute of Technology, an M.S.E.E. in power engineering and a J.D. from the West Virginia University, and an M.B.A. from the Graduate School of Business Administration at the University of Michigan. He currently serves as a director of Recycled Energy Development, Commerce Energy and the Ontario Power Authority.
Adam P. Godfrey, age 46, has been a director since July 2007 and previously was a director from 2002 to October 2006, when he voluntarily resigned to ensure that our Board continued to be comprised of a majority of independent directors. Mr. Godfrey has been a Partner with Lindsay Goldberg since 2002. Previously, he was a Partner with Bessemer Holdings, which he joined in 1992. He holds an A.B. from Brown University and an M.B.A. from the Amos Tuck School at Dartmouth College. He currently serves as a director of Pride Manufacturing Company, LLC, FAPS Holdings, Inc., Intermex Holdings, Inc. and Bell Nursery Holdings LLC. He also serves as a member of the Board of Schneider National, Inc. and as a member of the MBA Advisory Board at the Tuck School of Business at Dartmouth.
James R. Helvey III, age 49, has been a director since 2005. Mr. Helvey is the founder and President of Helvey and Associates, LLC, a financial and strategic consulting firm to educational and non-profit entities, and also currently serves as Risk Management Officer for CMT Asset Management. From 1985 to 2000, Mr. Helvey was employed by J.P. Morgan & Co., serving in a variety of capacities, including as Vice-Chairman of JP Morgan’s Risk Management Committee, Global Head of Derivative Counterparty Risk Management, head of the swap derivative trading business in Asia and manager of the firm’s short-term interest rate and foreign exchange derivative business in Europe. Mr. Helvey served as Chairman and CEO of Cygnifi Derivatives Services, LLC, an online derivatives services provider, from 2000 to 2002. In 2004, Mr. Helvey was a candidate for the United States Congress in the 5th District of North Carolina. Mr. Helvey graduatedmagna cum laudewith honors in 1981 from Wake Forest University. In 1982, Mr. Helvey was a Fulbright Scholar at the University of Cologne in Germany, and in 1984 Mr. Helvey received a masters degree in international finance and banking from Columbia University, School of International and Public Affairs. Mr. Helvey is a member of the Wake Forest University Board of Trustees, and of the Oakwood Country School Board of Trustees in Morgan Hill, California.
6
Table of Contents
Robert D. Lindsay, age 53, has been a director since 2002. Mr. Lindsay co-founded Lindsay Goldberg in 2001. Previously, he was the Managing General Partner of Bessemer Holdings. Mr. Lindsay is a graduate of Harvard College and holds an M.B.A. from Stanford University. He is President and Chief Executive Officer of Bessemer Securities LLC as well as a director of The Bessemer Group, Incorporated and its subsidiary banks, including Bessemer Trust Company, N.A. Mr. Lindsay serves as a director of FAPS Holdings, Inc., Maine Beverage Company, LLC, Keystone Foods Holdings LLC, PL Olefins LLC, Continental Energy Systems LLC, FSB Global Holdings, Inc., Intermex Holdings, Inc., The Brock Group, Inc., Bell Nursery Holdings LLC, Brightstar Corp., Rosetta LLC, Ambulatory Services of America, Inc., Crane & Co., Inc. and Scandza AS. He also serves as a Trustee of the Cold Spring Harbor Biological Laboratory and St. Paul’s School in Concord, New Hampshire.
Daniel J. Sullivan, age 62, has been a director since 2007. Mr. Sullivan was the President and Chief Executive Officer of FedEx Ground Package Systems, Inc., a wholly owned subsidiary of FedEx Corporation, a position he maintained from 1998 until his retirement in 2006. From 1995 to 1998, Mr. Sullivan was the Chairman, President and Chief Executive Officer of Caliber System, Inc. and its predecessor, Roadway Services, Inc., a provider of national and regional general trucking, small package delivery and custom logistics. Mr. Sullivan is a graduate of Amherst College. He also is a director of Computer Task Group, Inc., GDS Express, Inc. and Gevity HR, Inc. and is a federal commissioner on the Flight 93 National Memorial Federal Advisory Committee.
Louis F. Terhar, age 59, has been a director since 2006. Mr. Terhar, has been Managing Director for Strategic Planning Advisors LLC, a firm specializing in strategic planning advice and operational improvement strategies, since February 2005. From 2004 to 2005, he served as President and Chief Executive Officer of Integris Metals, Inc., a processor and distributor of metals. From 2002 to 2003, Mr. Terhar served as President and Chief Executive Officer of Indian Motorcycle Company, a manufacturer of cruiser motorcycles, which filed for liquidation under California law for the benefit of its creditors under the supervision of its stockholder in October 2003. From 1989 to 2001, Mr. Terhar served as Vice President of Operations for The David J. Joseph Company, as an Operations Staff Member for SHV Holdings N.V., as President and Chief Executive Officer of The David J. Joseph Company and as President of the SHV North America/SHV Capital Ventures. Mr. Terhar holds a B.S. in General Engineering from the United States Naval Academy, an M.B.A. in Finance from Syracuse University and an M.A. in Government from Harvard University.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH NOMINEE.
7
Table of Contents
BOARD OF DIRECTORS INFORMATION
Board Meetings and Attendance
The Board of Directors held eight meetings during fiscal 2008. No current director attended fewer than 75% of the aggregate number of the meetings of the Board of Directors held while such director was a member of the Board and of all the committees on which he served during such period. Absent extenuating circumstances, our Board members are expected to attend our annual meeting of stockholders. All of our directors attended our 2007 Annual Meeting of Stockholders either in person or telephonically.
Director Independence
Our Board of Directors believes that a majority of the Board should consist of directors who are independent under both the applicable New York Stock Exchange rules and regulations, which we refer to as the NYSE rules, and the applicable SEC rules and regulations, which we refer to as the SEC rules.
The NYSE rules provide that a director does not qualify as “independent” unless the Board affirmatively determines that the director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us). The NYSE rules require a board of directors to consider all of the relevant facts and circumstances in determining the materiality of a director’s relationship with a company and permit the board to adopt and disclose standards to assist the board in making determinations of independence. Accordingly, our Board has adopted our Director Independence Standards, which incorporate the independence standards of the NYSE rules, to assist the Board in determining whether a director has a material relationship with us. Our Director Independence Standards are available on our website,http://www.pike.com, under “Investor Relations” and “Corporate Governance,” as an attachment to our Corporate Governance Guidelines.
In August 2008, the Board of Directors, with the assistance of the Nominating and Governance Committee, conducted an evaluation of director independence based on our Director Independence Standards. In connection with this review, the Board evaluated banking, commercial, charitable, consulting, family or other relationships with each director or immediate family member and their related interests and us and our subsidiaries, including those relationships described below under “Certain Relationships and Related Party Transactions.” As a result of this evaluation, the Board of Directors affirmatively determined that none of Messrs. Bayless, Helvey, Sullivan and Terhar had a relationship with Pike Electric other than in their capacity as directors and that each of them is an independent director under our Director Independence Standards, the NYSE rules and the SEC rules. In addition, the Board of Directors determined that Mr. Pike was not independent due to his employment with Pike Electric and that Messrs. Godfrey and Lindsay were not independent due to their relationships with Lindsay Goldberg and its affiliates.
Board Committees
The Board of Directors has the authority to appoint committees to perform certain management and administration functions and currently has an Audit Committee, a Compensation Committee and a Nominating and Governance Committee.
8
Table of Contents
Audit Committee. The Audit Committee held five meetings in fiscal year 2008. The following directors are the current members of the Audit Committee: Helvey (Chairman), Bayless, Sullivan and Terhar. The Board of Directors has determined that all of the members of the Audit Committee are independent under our Director Independence Standards, the NYSE rules and the SEC rules. The Board of Directors has also determined that Mr. Helvey qualifies as an “audit committee financial expert” within the meaning of the SEC rules. The Audit Committee has responsibility for, among other things:
• | reviewing the performance of our independent registered public accounting firm and making recommendations to the Board of Directors regarding the appointment or termination of our independent registered public accounting firm; | ||
• | considering and approving any non-audit services proposed to be performed by our independent registered public accounting firm; | ||
• | reviewing and discussing with our independent registered public accounting firm our annual and quarterly financial statements and earnings releases; | ||
• | overseeing our internal audit function and our compliance with legal and regulatory requirements; and | ||
• | preparing the committee’s report for inclusion in our annual proxy statement. |
Compensation Committee. The Compensation Committee met four times during fiscal 2008. The following directors are the current members of the Compensation Committee: Terhar (Chairman), Bayless, Helvey and Sullivan. The Board of Directors has determined that all of the members of the Compensation Committee are independent under our Director Independence Standards and the NYSE rules. The Compensation Committee is responsible for, among other things:
• | reviewing key employee compensation policies, plans and programs; | ||
• | monitoring performance and compensation of our executive officers and other key employees; | ||
• | preparing recommendations and periodic reports to the Board of Directors concerning these matters; and | ||
• | administering our incentive compensation programs. |
Nominating and Governance Committee.The Nominating and Governance Committee held four meetings during fiscal 2008. The following directors are the current members of the Nominating and Governance Committee: Bayless (Chairman), Helvey, Sullivan and Terhar. The Board of Directors has determined that all of the members of the Nominating and Governance Committee are independent under our Director Independence Standards and the NYSE rules. The Nominating and Governance Committee is responsible for, among other things:
• | administering the process for determining director nominees (as set forth below); | ||
• | recommending persons to be selected by the Board of Directors as nominees for election as directors and to fill any vacancies on the Board of Directors; | ||
• | considering and recommending to the Board of Directors qualifications for the position of director and policies concerning the term of office of directors and the composition of the Board of Directors; and | ||
• | considering and recommending to the Board of Directors other actions relating to corporate governance. |
Executive Sessions of Non-Management Directors
Our Corporate Governance Guidelines provide that our non-management directors will meet in regularly scheduled executive sessions and, at least once annually, our independent directors will meet in an executive session. In fiscal 2009, Mr. Helvey will preside at the executive sessions of our non-management directors and may be contacted via e-mail or telephone at the contact information provided on our website,http://www.pike.com, under “Investor Relations” and “Corporate Governance.”
9
Table of Contents
Director Nomination Process
The Nominating and Governance Committee is responsible for identifying individuals qualified to become members of our Board of Directors and for recommending to the Board the individuals for nomination as members. In considering whether to recommend any particular candidate for inclusion in the Board’s slate of recommended director nominees, the Nominating and Governance Committee applies the criteria set forth in the Corporate Governance Guidelines, which include considering:
• | a candidate’s roles and contributions to the business community; | ||
• | a candidate’s personal qualities of leadership, character and judgment, and whether the candidate possesses and maintains a reputation in the community at large of integrity, trust, respect, competence and adherence to the highest ethical standards; | ||
• | a candidate’s relevant background and experience in matters such as business, technology, finance and accounting, marketing, government and the like; and | ||
• | whether a candidate is free of conflicts and has the time required for preparation and attendance at all meetings. |
We, LGB Pike II LLC, an affiliate of Lindsay Goldberg, and certain other stockholders, including members of management, are parties to a stockholders agreement. The stockholders agreement provides that J. Eric Pike will have the right to occupy one seat on our Board of Directors so long as he is our chief executive officer and controls at least 1,321,965 shares of our common stock. So long as Mr. Pike has the right to a seat on the Board of Directors, LGB Pike II LLC and any affiliate of LGB Pike II LLC must vote in favor of the election of Mr. Pike to our Board of Directors. The selection of nominees for our Board of Directors is to be considered in light of the provisions of the stockholders agreement and our relationship with Lindsay Goldberg.
During the selection process, our Nominating and Governance Committee will seek inclusion and diversity within the Board of Directors and adhere to our policy of maintaining an environment free from discrimination based upon race, color, religion, national origin, sex, age, disability, sexual preference or orientation, marital status or any other unlawful factor. The Nominating and Governance Committee may, at its discretion, hire third parties to assist in the identification and evaluation of director nominees.
Stockholders may recommend individuals to the Nominating and Governance Committee for consideration as potential director candidates by submitting their names, together with appropriate biographical information and background materials and a statement as to whether the stockholder or group of stockholders making the recommendation has beneficially owned more than 5% of the Company’s common stock for at least one year as of the date such recommendation is made. Such information should be sent to: Nominating and Governance Committee, c/o Corporate Secretary, Pike Electric Corporation, 100 Pike Way, Mount Airy, North Carolina 27030. Assuming that appropriate material addressing the criteria set forth above is provided on a timely basis, the Nominating and Governance Committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for all other recommended candidates.
10
Table of Contents
Communications with Directors
Our Board of Directors has established procedures for stockholders and other interested parties to communicate directly with our non-management directors. In addition, under such procedures, any party who has concerns about our accounting, internal controls or auditing matters may contact the Audit Committee directly. Such communications may be confidential or anonymous and may be reported by mail or telephone to the following special address or telephone number, which are also published in the “Investor Relations” section of our website under “Corporate Governance,” or bye-mail via the confidential e-mail link in the “Corporate Governance” section of our website:
Board of Directors (or Audit Committee or name of individual director)
c/o Corporate Secretary
Pike Electric Corporation
100 Pike Way, P. O. Box 868
Mount Airy, North Carolina 27030
Telephone: 800-997-7718
c/o Corporate Secretary
Pike Electric Corporation
100 Pike Way, P. O. Box 868
Mount Airy, North Carolina 27030
Telephone: 800-997-7718
All such communications are promptly reviewed before being forwarded to the addressee. Any concerns relating to accounting, internal controls, auditing matters or officer conduct are sent immediately to the chair of the Audit Committee. We generally will not forward to directors a stockholder communication that we determine to be primarily commercial in nature, relates to an improper or irrelevant topic or requests general information about the Company.
Corporate Governance
Our Board of Directors has adopted written corporate governance policies, principles and guidelines, known as our Corporate Governance Guidelines. In addition, we have a written code of conduct which applies to our directors and employees, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer, and includes guidelines relating to the ethical handling of actual or potential conflicts of interest, compliance with laws, accurate financial reporting, and procedures for promoting compliance with, and reporting violations of, the code.
All of our corporate governance materials, including the charters for our Audit Committee, Compensation Committee and Nominating and Governance Committee, our Corporate Governance Guidelines and our Code of Business Conduct and Ethics are published on our website,http://www.pike.com, in the “Investor Relations” section under the heading “Corporate Governance.” These materials are also available in print to any stockholder upon request, by contacting us at: Investor Relations, Pike Electric Corporation, 100 Pike Way, P. O. Box 868, Mount Airy, NC 27030, or by telephone at (336) 719-4462. Any modifications to these corporate governance materials will be reflected on our website, and we intend to post any amendments or waivers to the Code of Ethics and Business Conduct (to the extent required to be disclosed pursuant to Form 8-K) at this location on our website.
11
Table of Contents
DIRECTOR COMPENSATION
The following table sets forth information regarding the compensation paid to our directors for fiscal year 2008:
Fees Earned or Paid in Cash | Stock Awards | Total | ||||||||||
Name | ($)(1) | ($)(2)(3) | ($) | |||||||||
Charles E. Bayless | 51,500 | 42,303 | 93,803 | |||||||||
Adam P. Godfrey(4) | — | — | — | |||||||||
James R. Helvey III | 58,000 | 49,257 | 107,257 | |||||||||
Robert Lindsay(4) | — | — | — | |||||||||
J. Eric Pike(5) | — | — | — | |||||||||
Daniel J. Sullivan | 27,644 | 30,415 | 58,059 | |||||||||
Louis F. Terhar | 53,000 | 42,303 | 95,303 |
(1) | Directors who are employees of ours or our subsidiaries or are affiliated with Lindsay Goldberg receive no compensation for serving as directors. All other directors receive an annual fee of $25,000 plus $1,000 for each Board meeting attended and $500 for each committee meeting attended, in addition to reimbursement of reasonable expenses incurred for such attendance. The chair of the Audit Committee receives an annual retainer of $15,000 and the chairs of the Nominating and Governance Committee and the Compensation Committee each receive an annual retainer of $10,000. | |
(2) | Represents the dollar amounts recognized by us for financial statement reporting purposes in fiscal year 2008 with respect to outstanding restricted stock awards. Amounts were computed in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004), “Share Based Payment” (“FAS 123R”), except that any estimates of forfeitures in accordance with FAS 123R have been disregarded. For additional information regarding the assumptions made in calculating these amounts, see pages 49 and 50 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2008. There were no forfeitures of restricted stock awards in fiscal year 2008. | |
For each director, the full grant date fair value for restricted stock awarded in fiscal year 2008 computed in accordance with FAS 123R and the aggregate number of shares of restricted common stock outstanding at June 30, 2008 was as follows: |
Grant Date Fair Value | Outstanding Stock Awards | |||||||
of Stock Awards ($) | at Fiscal Year End (#) | |||||||
Charles E. Bayless | 24,988 | 4,093 | ||||||
James R. Helvey III | 24,982 | 4,560 | ||||||
Daniel J. Sullivan | 99,988 | 5,055 | ||||||
Louis F. Terhar | 24,988 | 4,093 |
(3) | Directors who are neither employees of ours or our subsidiaries nor affiliated with Lindsay Goldberg receive $100,000 in shares of restricted stock upon initial election to the Board and upon each third anniversary thereafter for as long as the director continues to serve, and $25,000 in shares of restricted stock for any year of director service in which a $100,000 grant is not made for as long as the director continues to serve. Vesting of such shares of restricted stock is to occur in equal amounts on the first, second and third anniversary of the initial grant date. | |
(4) | Mr. Godfrey and Mr. Lindsay are affiliates of Lindsay Goldberg and, as a result, do not receive compensation for serving as a director. | |
(5) | Mr. Pike does not receive any additional compensation for serving as Chairman and a director. See the “Outstanding Equity Awards at 2008 Fiscal Year End” table for the outstanding equity awards held by Mr. Pike as of June 30, 2008. |
12
Table of Contents
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has reviewed and discussed the section below titled“Executive Compensation—Compensation Discussion and Analysis”with management, and, based on such review and discussions, recommended to the Board of Directors that the section be included in this Proxy Statement and the Annual Report on Form 10-K for the year ended June 30, 2008.
Submitted by the Compensation Committee of the Board of Directors.
Sincerely, | ||||
Louis F. Terhar, Chairman | ||||
Charles E. Bayless | ||||
James R. Helvey III | ||||
Daniel J. Sullivan |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2008, the Compensation Committee was comprised of Messrs. Terhar (Chairman), Bayless, Helvey and Sullivan. None of these persons has ever been an officer or employee of ours or any of our subsidiaries. During fiscal 2008, none of our executive officers served as a director or member of the compensation committee (or any other committee performing similar functions) of any other entity where one of such entity’s executive officers served on our Board of Directors or Compensation Committee.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Philosophy and Objectives
Our executive compensation programs are designed to attract, retain and motivate our executive officers to ensure our continued long-term success and create stockholder value. The primary objectives of our compensation policies are to:
• | Attract and retain executive officers by offering competitive annual base salaries; | ||
• | Reward the achievement of annual financial performance that our Board of Directors and management believe will lead to long-term growth in stockholder value; | ||
• | Align executive officers’ interests with those of stockholders through awards of equity compensation; and | ||
• | Reinforce our culture of teamwork, customer satisfaction and worker safety, which our Board of Directors and management believe are essential to maintaining a competitive advantage in our industry. |
13
Table of Contents
Determining Executive Compensation
Prior to our initial public offering in July 2005, the compensation arrangements of our executive officers primarily were determined by our then board of directors and private equity investor, with significant input from our chief executive officer. After our IPO and continuing through September 2008, the Compensation Committee determined the base salary and initial equity awards of all executive officers who were new hires and awarded any compensation other than base salary typically upon completion of a fiscal year based upon our financial performance for such year.
In fiscal 2008, the Compensation Committee reassessed our compensation policies and practices and engaged Aon Consulting to assist in the process. The Compensation Committee concluded that our then existing compensation system did not provide (i) market competitive compensation beyond base salaries, (ii) equity compensation to effect a strong alignment of the management team’s interests with those of stockholders or (iii) a meaningful annual incentive opportunity that motivated achievement of short-term financial goals and strategic objectives. Consequently, in September 2008, the Compensation Committee approved an annual incentive program and a long-term incentive program. In determining the design and amount of compensation, the Compensation Committee reviewed market data and evaluated the competitiveness of pay levels for our NEOs based on a combination of executive compensation surveys and publicly-available information for companies identified and approved by the Compensation Committee as representing a peer group for our company. Aon Consulting helped define the peer group, provided executive compensation data from the surveys and from the peer group, reviewed and made recommendations for the overall compensation philosophy, and provided an evaluation of total compensation for NEOs. The executive compensation surveys and peer group selected are discussed in greater detail below. The surveys and peer group information and Aon Consulting’s analyses and findings based on the surveys and information were provided to the Compensation Committee and used to evaluate compensation recommendations. The executive compensation surveys and peer group information provided the Compensation Committee perspective on the magnitude and components of compensation provided to NEOs at comparable companies.
The Compensation Committee independently assessed the performance of our CEO, analyzed relevant competitive data (the executive compensation surveys and peer group information) and determined the CEO’s compensation. For the other NEOs, our CEO provided the Compensation Committee his analysis of the NEOs’ performance and his compensation recommendations, which the Compensation Committee then considered along with the executive compensation surveys and the peer group information.
Compensation Benchmarking
One of the tools the Compensation Committee used in determining compensation for our executive officers, in connection with its September 2008 compensation decisions, was a comparison of our compensation programs and amounts relative to the compensation paid to similarly-situated executives. This approach ensures that our compensation programs and cost structure will allow us to remain competitive in our markets. Given the limited number of publicly-traded companies of comparable size in our industry, our Compensation Committee looked to published executive compensation surveys to provide baseline information and then supplemented this information with data from and an analysis of compensation practices for our peer group. The Compensation Committee believes that the peer group is representative of the sector in which we operate, and the group was chosen based on their relative size as measured by sales volume, industry space, number of employees, and the role and responsibilities of the companies’ NEOs.
The following three executive compensation surveys were used: (i) 2007 Mercer Executive Compensation report; (ii) 2007/2008 Watson Wyatt Industry Report on Top Management Compensation; and (iii) a proprietary and confidential survey of executive compensation comprised of companies of similar revenue size. The following companies were identified as members of the “peer group” for compensation review purposes: Comfort Systems USA; Dycom Industries, Inc.; Granite Construction; Insituform Technologies, Inc.; Integrated Electrical Services; Mastec Inc.; Quanta Services, Inc.; Tetra Tech, Inc.; Watts Water Technologies; and Willbros Group Inc.
14
Table of Contents
The Compensation Committee initially targeted the aggregate value of total compensation for our executive officer positions between the 50th and 75th percentile of the three compensation surveys. The Compensation Committee then adjusted these compensation amounts after reviewing the peer group data and, once finalized, all total compensation amounts for our executive officers remained between the 50th and 75th percentile of the executive compensation surveys. The Compensation Committee believes that our overall pay positioning will allow us to attract and retain the requisite level of executive talent while appropriately rewarding high performance. The actual target compensation for each individual executive may be higher or lower than the targeted market position based on factors such as individual skills, experience, contribution and performance, internal equity and other factors that the Compensation Committee deems relevant for an individual executive. In addition, actual compensation results (e.g., amounts earned and paid each year) may be higher or lower than the targeted amounts based on corporate and individual performance.
Elements of Compensation
There are three major elements that comprise our compensation program:
• | base salary; | ||
• | annual cash incentive opportunities; and | ||
• | long-term incentive compensation in the form of stock options and restricted stock awards. |
We believe the use of these elements allows us to achieve the optimum balance of our compensation objectives ofpay-for-performance, both short and long-term, and employee retention.
Base Salary. We believe competitive base salaries are an essential element of an effective compensation program. The base salaries of executive officers are set at levels intended to be competitive with other companies engaged in similar activities and with other businesses of comparable size, scope and location that compete with us for executive talent. To retain and attract the level of talent necessary for our Company to succeed, the Compensation Committee expects that the base salaries should be between the 50th and 75th percentiles of the range of base salaries for comparable positions based on the executive compensation surveys and among our peer group.
Our Compensation Committee reviews the salaries of our NEOs annually and retains the discretion to make adjustments based upon changes in an executive’s performance or job description or the general market in which we operate. The salaries paid to the NEOs in fiscal year 2008 are shown on the Summary Compensation Table. Recently, the Compensation Committee authorized salary changes for our executive officers, such that their current base salaries are as follows: Mr. Pike: $780,000; Mr. Slater: $358,312; Mr. Simmons: $444,336; Mr. Fox: $344,760; and Mr. Hicks: $300,000.
Annual Incentive Program. Historically, in September of each fiscal year, the Compensation Committee determined whether to grant bonuses for the prior fiscal year and, if so, the amount of equity-based awards to be granted to our officers and the vesting terms. This determination was based upon our overall financial performance for the prior fiscal year and not pursuant to any pre-established targets or contractual obligations. For instance, while bonuses were awarded for fiscal 2006, our Compensation Committee did not grant any bonuses to our officers for either fiscal 2007 or 2008.
15
Table of Contents
As of September 2008, the Compensation Committee adopted an annual cash incentive plan for officers to encourage and reward achievement of short-term business goals and to assist in attracting and retaining officers by offering an opportunity to earn a competitive level of compensation. Consistent with our overall objectives of linking compensation to performance, aligning executive compensation with stockholder interests and attracting and retaining top level executive officers in the industry, annual cash incentive targets are set as a percentage of base salary. We anticipate incentive targets and ranges will be set in August or September of each fiscal year in the future. Specific performance criteria for the awards also will be set at this time. For fiscal 2009, the criteria adopted for payment of the executive officers’ awards included a combination of (i) earnings per share, (ii) company-wide safety measured by the OSHA recordable incident rate for the fiscal year, and (iii) individual achievement of specified personal performance objectives, weighted at 60%, 20% and 20%, respectively. This mix of performance measures focuses our executives appropriately on improving bottom-line earnings, employee safety and individual performance, in order to tie performance rewards directly to our stockholders’ financial interests. These measures are also effective motivators because they are easy for our executives to track and understand and they correlate directly with the historical success factors of the Company in any given year.
Each executive was assigned a target award based on a percentage of base salary, a threshold level below which no amounts would be payable, and a maximum award representing 150% of such executive’s target award. In the case of the executive officers, including the NEOs, the bonus targets and criteria are approved by the Compensation Committee and are established at levels that are achievable but require better than expected planned performance. The Compensation Committee approved the following target awards for our executive officers for fiscal 2009: Mr. Pike — $585,000; Mr. Slater — $197,072; Mr. Simmons — $266,602, Mr. Fox — $172,380; and Mr. Hicks — $120,000.
Long-Term Incentive Compensation. A critical component of our compensation philosophy is providing equity incentives to our employees to align their interests with those of our stockholders. The long-term incentive compensation program is also designed to encourage officers to remain employed with us. We maintain both the 2005 and 2008 Omnibus Incentive Compensation Plans under which we may grant equity awards.
Historically, we had no formal compensation plan regarding the awarding of equity compensation other than (i) upon promotion, (ii) under our annual bonus opportunities discussed above, or (iii) pursuant to Mr. Pike’s former employment agreement, which provided for a grant of unrestricted stock at the end of each fiscal year having a grant date fair market value of $250,000 and an opportunity based upon achievement of fiscal year budget for a grant of stock options having a grant date fair market value of $250,000 (of which no options were awarded for fiscal 2006 or fiscal 2007). In September 2008 as part of our Compensation Committee’s review of our compensation practices, it approved awarding long-term incentive compensation through awards of stock options and restricted stock that vest over multiple years. Also, under Mr. Pike’s new employment agreement, he no longer will receive the $250,000 stock grant or be eligible to receive the $250,000 stock option bonus.
The Compensation Committee determined in its September 2008 meeting that awards to eligible officers, including NEOs, will be made on an annual basis in the beginning of a fiscal year, generally in August or September at the same time annual incentive performance targets and amounts are established. In general, the number of stock options and shares of restricted stock awarded to each officer is determined subjectively based on a number of factors, including the officer’s degree of responsibility, general level of performance, and salary level together with analysis by Aon and the Compensation Committee of the executive compensation surveys and the peer group data. The Compensation Committee believes that stock options provide our officers with an incentive for future financial performance since these options will not be of value to our executives unless we continue to achieve our strategic goals and cause our stock price to increase. The Compensation Committee believes restricted stock awards with time-based vesting provide a reasonable incentive for our officers to perform, an opportunity for officers’ interests to be aligned with stockholders upon grant of the award, and an effective employment retention tool.
16
Table of Contents
For fiscal 2008, no long-term incentive program was in place and, consequently, only a one-time award to Mr. Slater and the stock award provided to Mr. Pike pursuant to his employment agreement were made. However, for fiscal 2009, the Compensation Committee authorized awards for our officers, including the NEOs, of stock options and shares of restricted common stock. The awards of stock options and restricted common stock vest in equal amounts over a three year period commencing on the date of grant.
Each officer was assigned a long-term award amount based on a percentage of base salary. The Compensation Committee approved the following award amounts for our executive officers: Mr. Pike - $1,170,000, Mr. Slater $297,399; Mr. Simmons — $399,902; Mr. Fox — $258,570; and Mr. Hicks - $150,000. These amounts were awarded to each executive 50% in shares of restricted stock and 50% in stock options. The table below summarizes the number of shares of restricted stock and stock options awarded to our executive officers in September 2008, where shares of restricted stock were valued on the date of award approval and the stock options were priced on the first business day of the month immediately following the date of award approval pursuant to our equity award policy:
Shares of Restricted Stock | Stock Options | |||||||
Executive | (#) | (#) | ||||||
J. Eric Pike | 36,955 | 98,475 | ||||||
Anthony K. Slater | 9,394 | 25,031 | ||||||
Audie G. Simmons | 12,631 | 33,658 | ||||||
James R. Fox | 8,167 | 21,763 | ||||||
Jimmy R. Hicks | 4,738 | 12,625 |
Benefits and Perquisites
We provide our officers, including the NEOs, with benefits and perquisites that are reasonable, competitive and consistent with our compensation objectives of attracting and retaining key executives and managers who are critical to our future success.
Company-Wide Benefits. Our officers, including the NEOs, are eligible to participate in our group insurance program, which includes group health, dental, life and long-term disability insurance on the same basis as our other employees. Other benefits include a 401(k) plan, an employee stock purchase plan, paid holidays and paid vacations.
Medical Insurance. Our officers, including the NEOs, participate in a medical expense reimbursement plan which provides up to $7,500 per annum to cover healthcare expenses. Our officers, including the NEOs, each are provided with a company vehicle and fuel reimbursement.
Retirement. We have an informal retirement policy such that, upon the retirement of an officer who is at least 55 years of age and has been an employee for 10 years or more, the officer will be entitled to receive (a) the Company vehicle used by the officer at the time of retirement or the cash value of such vehicle and (b) continued medical and dental coverage for the officer and his dependents until the earlier of (i) attaining 65 years of age, (ii) becoming eligible for Medicare or (iii) becoming eligible for another health insurance program.
Life and Disability Insurance. We provide (i) life insurance with a death benefit of $100,000 plus one times current salary to our NEOs, (ii) accidental death coverage of an additional $250,000, and (iii) disability benefits which include 100% of salary for the first six months and 60% of salary (up to $10,000 per month) through age 65.
17
Table of Contents
Other Benefits. In accordance with Mr. Pike’s employment agreement, he is eligible to use up to fifty hours of personal use of company aircraft per year so long as this use does not interfere with the normal business use of the aircraft. We also provide certain tax gross-up payments to our executives in order to compensate them for taxes which may be imposed based upon their receipt of these benefits and perquisites.
The Compensation Committee reviews and approves all perquisites paid to our executive officers.
Agreements with Executives
We have entered into employment agreements, annual incentive agreements and long-term equity agreements with each of our NEOs. The employment agreements provide each NEO with an annual base salary, the opportunity for annual incentive compensation, and certain other benefits and employment terms. The other agreements provide each NEO with an annual incentive opportunity and long-term equity compensation award opportunities.
Payments and Benefits Upon Termination or Change in Control
We do not have any change in control agreements with our executive officers. However, the employment agreements of each of our NEOs provide for severance payments and benefit continuation in the event of termination of employment under certain circumstances.
Mr. Pike’s employment agreement with us provides that, if his employment is terminated by us without Cause or by him for Good Reason (as such terms are defined in his employment agreement), Mr. Pike will be entitled to receive two years of his then current annual base salary and the continuation for two years of health, life, disability and other benefits that he was receiving as of the last day of his employment. In addition, all unvested stock options and restricted stock then held by Mr. Pike will automatically become vested and exercisable if his employment is terminated by us without Cause, by him for Good Reason or due to his death, Disability (as defined in his employment agreement) or legal incapacity.
Under the terms of the employment agreements with our NEOs other than Mr. Pike, if any such executive is terminated for any reason other than death, Disability or Cause or if such executive resigns for Good Reason (as each such term as defined in the relevant employment agreement), he will be entitled to (a) cash severance payments equal to 12 months of his annual base salary at the time of termination, payable in equal monthly installments, or, at the discretion of the Board of Directors in a lump sum and (b) continuation of his medical and health insurance benefits for a period equal to the lesser of (i) 12 months or (ii) the period ending on the date he first becomes entitled to health insurance benefits under any plan maintained by any person for whom he provides services as an employee or otherwise. The foregoing severance benefits are subject to such executive entering into and not revoking a release of claims in favor of us and abiding by the non-competition provisions of his agreement.
Policy Regarding Timing of Equity Grants
Executives derive value from their options based on the appreciation in the value of the underlying shares of our common stock. We set the exercise or base price as the average of the high and low prices of our common stock on the NYSE on the date the awards are granted. In addition, we have a policy of granting options on the first business day of the month immediately following the date of award approval.
Tax Considerations
Section 162(m) of the Code generally disallows a tax deduction to public companies for certain compensation in excess of $1 million paid to a company’s executive officers. Certain compensation, including qualified performance-based compensation, will not be subject to the deduction limit if specified requirements are met. The Compensation Committee carefully considers the impact of Section 162(m) in designing compensation programs for, and in making compensation decisions affecting, our Section 162(m) covered executives. Nevertheless, there can be no assurance that compensation attributable to long-term incentive awards will be treated as qualified performance-based compensation under Section 162(m). In fiscal 2008, Mr. Pike had approximately $61,862 of compensation that was not deductible by the Company.
18
Table of Contents
Summary of Compensation and Grants of Plan-Based Awards
The following table sets forth certain compensation information for the fiscal years ended June 30, 2008 and 2007, concerning our Chief Executive Officer, Chief Financial Officer and our two other executive officers for fiscal 2008, whom we refer to as the “NEOs.”
Summary Compensation Table
Stock | Option | All Other | ||||||||||||||||||||||
Name and | Salary | Awards | Awards | Compensation | Total | |||||||||||||||||||
Principal Position | Fiscal Year | ($) | ($)(1)(2) | ($)(2)(3) | ($)(4) | ($) | ||||||||||||||||||
J. Eric Pike | 2008 | 749,996 | 450,439 | 727,815 | 92,497 | 2,020,747 | ||||||||||||||||||
Chairman, CEO and President(5) | 2007 | 750,000 | 449,892 | 834,191 | 72,027 | 2,106,110 | ||||||||||||||||||
Anthony K. Slater | 2008 | 341,250 | 43,375 | 120,215 | 30,275 | 535,115 | ||||||||||||||||||
Chief Financial Officer and | 2007 | 298,656 | 34,813 | 85,540 | 25,527 | 444,536 | ||||||||||||||||||
Vice President | ||||||||||||||||||||||||
Audie G. Simmons | 2008 | 423,178 | 42,931 | 151,703 | 32,977 | 650,789 | ||||||||||||||||||
Senior Vice President | 2007 | 404,052 | 34,074 | 115,079 | 11,065 | 564,270 | ||||||||||||||||||
of Operations | ||||||||||||||||||||||||
James R. Fox | 2008 | 331,500 | 15,404 | 44,819 | 30,994 | 422,717 | ||||||||||||||||||
General Counsel, Vice | 2007 | 243,750 | 11,069 | 29,565 | 15,525 | 299,909 | ||||||||||||||||||
President and Secretary(6) |
(1) | Represent the amounts recognized by us for financial statement reporting purposes for each fiscal year with respect to restricted stock awards. Amounts were computed in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004), “Share Based Payment” (“FAS 123R”), except that any estimates of forfeitures in accordance with FAS 123R have been disregarded. For additional information regarding the assumptions made in calculating these amounts, see pages 49 and 50 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2008 and pages 52 and 53 of Annual Report on Form 10-K for the fiscal year ended June 30, 2007. There were no forfeitures of restricted stock awards for the NEOs in either fiscal 2008 or 2007. | |
(2) | The SEC disclosure rules require that we include in the Summary Compensation Table as compensation for a fiscal year the value of restricted stock and stock option awards expensed in such fiscal year, which includes awards made in previous years. | |
(3) | Represent the amounts recognized by us for financial statement reporting purposes for each such fiscal year with respect to option awards. Amounts were computed in accordance with FAS 123R, except that any estimates of forfeitures in accordance with FAS 123R have been disregarded. For additional information regarding the assumptions made in calculating these amounts, see pages 49 and 50 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2008 and pages 52 and 53 of Annual Report on Form 10-K for the fiscal year ended June 30, 2007. There were no forfeitures of option awards for the NEOs in either fiscal 2008 or 2007. |
19
Table of Contents
(4) | For fiscal 2008, the following table lists all amounts included in the “All Other Compensation” column: |
Personal | Personal | Tax | ||||||||||||||||||||||||||
Use of | Use of | Reimbur- | 401(k) | |||||||||||||||||||||||||
Company | Company | sement | Health | Contrib- | Unused | |||||||||||||||||||||||
Aircraft | Vehicle | Payments | Insurance | utions | Vacation | Total | ||||||||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
J. Eric Pike | 63,146 | 11,667 | 7,717 | 6,505 | 3,462 | — | 92,497 | |||||||||||||||||||||
Anthony K. Slater | — | 11,467 | 7,584 | 6,505 | 4,719 | — | 30,275 | |||||||||||||||||||||
Audie G. Simmons | — | 3,296 | 2,180 | 6,505 | 4,720 | 16,276 | 32,977 | |||||||||||||||||||||
James R. Fox | — | 10,903 | 7,211 | 6,505 | — | 6,375 | 30,994 |
For fiscal 2008, personal use of our aircraft was calculated based on aggregate incremental cost to us for each hour of personal aircraft usage. The incremental costs include fuel, repair costs, parking and runway fees and other similar variable costs. Personal use of company vehicle represents the approximate cost to us of ownership, maintenance, insurance and fuel for the executive’s vehicle. Health insurance represents the premium payable by us for such executive’s participation in a medical expense reimbursement plan. Unused vacation hours may be rolled into the next year or converted to cash compensation in an amount equal to the number of unused vacation hours multiplied times the employee’s current rate of pay. | ||
(5) | Mr. Pike is a member and chairman of our Board of Directors but does not receive compensation for his service on the Board. | |
(6) | Mr. Fox was appointed General Counsel and Vice President of Risk Management effective September 18, 2006. |
20
Table of Contents
The following table sets forth certain information with respect to any grant of awards to our NEOs during the fiscal year ended June 30, 2008.
Grants of Plan-Based Awards for the 2008 Fiscal Year
All Other | All Other | |||||||||||||||||||||||
Stock | Option Awards: | Exercise | Closing | Grant Date | ||||||||||||||||||||
Awards: | Number of | or Base | Market | Fair Value | ||||||||||||||||||||
Number of | Securities | Price of | Price of | of Stock and | ||||||||||||||||||||
Shares of | Underlying | Option | Security on | Option | ||||||||||||||||||||
Stock | Options | Awards | Date of | Awards | ||||||||||||||||||||
Name | Grant Date | (#) | (#)(1) | ($/Sh) | Grant ($)(2) | ($)(3) | ||||||||||||||||||
J. Eric Pike | 07/02/2007 | 10,964 | (4) | — | — | — | 250,000 | |||||||||||||||||
Anthony K. Slater | 05/01/2008 | — | 20,000 | (5) | 16.16 | 16.07 | 135,754 | |||||||||||||||||
Audie G. Simmons | — | — | — | — | — | — | ||||||||||||||||||
James R. Fox | — | — | — | — | — | — |
(1) | These options were granted under our 2005 Omnibus Incentive Compensation Plan. | |
(2) | In accordance with SEC rules, we have included this additional column because the exercise price of options we award is based on the mean between the highest and lowest prices at which our common stock was sold on the date of grant rather than the closing price on the date of grant. See“— Compensation Plans”for additional information. | |
(3) | Amounts set forth in this column represent the grant date fair value of stock awards and option awards computed in accordance with FAS 123R except that any estimate of forfeitures have been disregarded. For additional information regarding the assumptions made in the valuation of these awards, see pages 49 and 50 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2008. | |
(4) | Represents a bonus for fiscal 2008 in accordance with the terms of Mr. Pike’s previous employment agreement which has since been amended and restated and no longer provides for such grant. | |
(5) | Amount reflects a one-time grant of options to Mr. Slater. These options vest in equal annual installments on May 1 of each of 2009, 2010 and 2011. |
21
Table of Contents
Outstanding Equity Awards
The following table sets forth certain information with respect to our NEOs’ outstanding equity awards at June 30, 2008.
Outstanding Equity Awards at 2008 Fiscal Year End
Option Awards | Stock Awards | |||||||||||||||||||||||
Market | ||||||||||||||||||||||||
Number of | Number of | Number of | Value of | |||||||||||||||||||||
Securities | Securities | Shares | Shares or | |||||||||||||||||||||
Underlying | Underlying | or Units of | Units of | |||||||||||||||||||||
Unexercised | Unexercised | Option | Stock that | Stock That | ||||||||||||||||||||
Options | Options | Exercise | Option | Have Not | Have | |||||||||||||||||||
(#) | (#) | Price | Expiration | Vested | Not Vested | |||||||||||||||||||
Name | Exercisable | Unexercisable | ($) | Date | (#) | ($)(1) | ||||||||||||||||||
J. Eric Pike | 179,201 | — | 3.80 | 4/18/2012 | — | — | ||||||||||||||||||
245,016 | — | 3.80 | 4/18/2012 | — | — | |||||||||||||||||||
145,209 | — | 6.51 | 10/21/2014 | — | — | |||||||||||||||||||
113,761 | 84,776 | (2) | 6.51 | 10/21/2014 | — | — | ||||||||||||||||||
171,429 | 257,142 | (3) | 14.00 | 7/27/2015 | — | — | ||||||||||||||||||
27,159 | — | 18.41 | 11/1/2016 | — | — | |||||||||||||||||||
— | — | — | — | 71,429 | (4) | 1,186,436 | ||||||||||||||||||
Anthony K. Slater | 6,000 | 24,000 | (5) | 18.18 | 8/1/2016 | — | — | |||||||||||||||||
— | — | — | — | 5,000 | (6) | 83,050 | ||||||||||||||||||
6,000 | 24,000 | (7) | 18.41 | 11/1/2016 | — | — | ||||||||||||||||||
3,334 | 6,666 | (8) | 18.41 | 11/1/2016 | — | — | ||||||||||||||||||
— | — | — | — | 2,000 | (9) | 33,220 | ||||||||||||||||||
— | — | — | — | 5,000 | (10) | 83,050 | ||||||||||||||||||
— | 20,000 | (11) | 16.16 | 5/1/2018 | — | — | ||||||||||||||||||
Audie G. Simmons | 97,741 | — | 3.80 | 4/18/2012 | — | — | ||||||||||||||||||
133,637 | — | 3.80 | 4/18/2012 | — | — | |||||||||||||||||||
26,155 | — | 6.51 | 10/21/2014 | — | — | |||||||||||||||||||
20,484 | 15,265 | (12) | 6.51 | 10/21/2014 | — | — | ||||||||||||||||||
15,476 | 23,214 | (13) | 14.00 | 7/27/2015 | — | — | ||||||||||||||||||
— | — | — | — | 6,449 | (14) | 107,118 | ||||||||||||||||||
3,334 | 6,666 | (15) | 18.41 | 11/1/2016 | — | — | ||||||||||||||||||
— | — | — | — | 2,000 | (16) | 33,220 | ||||||||||||||||||
— | — | — | — | 5,000 | (17) | 83,050 | ||||||||||||||||||
6,000 | 24,000 | (18) | 15.70 | 12/1/2016 | — | — | ||||||||||||||||||
James R. Fox | — | — | — | — | 5,000 | (19) | 83,050 | |||||||||||||||||
6,000 | 24,000 | (20) | 18.41 | 11/1/2016 | — | — |
(1) | The amounts set forth in this column were calculated by multiplying the closing market price of the Company’s Common Stock on June 30, 2008 ($16.61) by the number of shares, units or other rights held on such date. | |
(2) | These options vested on October 21, 2008. | |
(3) | These options vest in equal annual installments from July 27, 2008 to July 27, 2010. | |
(4) | These restricted shares vest in their entirety on July 27, 2010. |
22
Table of Contents
(5) | These options vest in equal annual installments over the five-year period commencing August 1, 2007. | |
(6) | These restricted shares vest in their entirety on August 1, 2011. | |
(7) | These options vest in equal annual installments from November 1, 2008 to November 1, 2011. | |
(8) | These options vest in equal annual installments from November 1, 2008 to November 1, 2009. | |
(9) | These restricted shares vest in their entirety on October 4, 2009. | |
(10) | These restricted shares vest in their entirety on October 10, 2011. | |
(11) | These options vest in equal annual installments from May 1, 2009 to May 1, 2011. | |
(12) | These options vested on October 21, 2008. | |
(13) | These options vest in equal annual installments from July 27, 2008 to July 27, 2010. | |
(14) | These restricted shares vest in their entirety on July 27, 2010. | |
(15) | These options vest in equal annual installments from November 1, 2008 to November 1, 2009. | |
(16) | These restricted shares vest in their entirety on October 4, 2009. | |
(17) | These restricted shares vest in their entirety on November 27, 2011. | |
(18) | These options vest in equal annual installments from December 1, 2008 to December 1, 2011. | |
(19) | These restricted shares vest in their entirety on October 10, 2011. | |
(20) | These options vest in equal annual installments from November 1, 2008 to November 1, 2011. |
23
Table of Contents
Executive Officers of the Company
We had four executive officers during the fiscal year ended June 30, 2008. Jimmy R. Hicks became an executive officer in September 2008 following our acquisition of substantially all of the assets of Shaw Energy Delivery Services, Inc. Certain information with respect to each such executive officer is set forth below:
J. Eric Pike.Mr. Pike, age 40, has served as President since 1998, Chief Executive Officer since 2002 and Chairman since July 2005. Additional information about Mr. Pike can be found above under “Election of Directors — Nominees for Election of Directors.”
Anthony K. Slater.Mr. Slater, age 38, has been Chief Financial Officer since August 2006 and is responsible for corporate planning, financial reporting and the supervision of all finance and accounting functions. Prior to assuming this position, Mr. Slater served as our Vice President of Finance beginning in February 2006. Mr. Slater served as the Chief Financial Officer of Universal Solutions International, Inc., a provider of supply chain analysis and reverse logistic services, from January 2005 to December 2005 and as Vice President of Finance and Accounting as well as Secretary from July 2003 until December 2004. Prior to joining Universal Solutions, he served as Vice President of Accounting and Financial Reporting for Konover Property Trust Inc., a self-administered REIT, from 1999 to 2002. Mr. Slater graduated from North Carolina State University with a B.A. in Accounting and also is a certified public accountant.
Audie G. Simmons.Mr. Simmons, age 52, has been our Senior Vice President of Operations since November 2006 and serves as the Company’s principal operating officer. Mr. Simmons has over 25 years of operational experience with the Company, including serving as the Company’s Vice President of Fleet and Operations immediately prior to becoming Senior Vice President of Operations.
James R. Fox.Mr. Fox, age 61, has been our General Counsel, Corporate Secretary and Vice President of Risk Management since October 2006. His responsibilities include managing all legal matters as well as overseeing its human resources and risk management functions. Mr. Fox was previously a partner with Howrey & Simon in Washington, D.C. and Bell, Davis & Pitt in Winston Salem, North Carolina, where he spent over thirty years practicing in the areas of commercial and securities litigation, arbitration and mediation, and general business law. Mr. Fox received his bachelor’s degree in history from Duke University and his J.D. from the Duke University School of Law, where he was a member of the Editorial Board of theDuke Law Journal.
Jimmy R. Hicks.Mr. Hicks, age 62, has been our Senior Vice President of Engineering and Substation Construction since September 2008 and is responsible for the supervision of all utility engineering and electrical substation design and construction services. Mr. Hicks was the President and Chief Operating Officer of Shaw Energy Delivery Services, a division of the Shaw Group, prior to our acquisition of that division in September 2008. From 2004 to 2007, Mr. Hicks intermittently provided electrical engineering consultancy services in Iraq to the United States government. From 1972 to 2003, Mr. Hicks was employed by Duke Energy, beginning as an electrical engineer and progressing through management until retiring as Senior Vice President of Transmission. Mr. Hicks received his bachelor’s degree in electrical engineering from Louisiana State University and is a registered Professional Engineer in North and South Carolina.
Employment and Other Agreements
The following is a summary of certain compensation agreements that we have with, and certain plans that we maintain for, our executive officers, including the NEOs, and other material information necessary to an understanding of the Summary Compensation Table and Grants of Plan-Based Awards table above.
24
Table of Contents
J. Eric Pike
Mr. Pike entered into an amended and restated employment agreement with us on September 24, 2008. The employment agreement provides for an initial one-year employment term commencing July 1, 2008, after which the agreement automatically extends for additional one-year periods, subject to both Mr. Pike’s and our right to terminate the agreement upon at least 60 days written notice prior to the expiration of each such term.
The employment agreement provides a base annual salary of $780,000, which may be adjusted up but not down by the Compensation Committee. In addition to his base salary, Mr. Pike will be eligible to receive an annual incentive opportunity and to participate in our long-term incentive plan on such terms and conditions and in such amounts as adopted and approved by our Compensation Committee. The employment agreement also provides Mr. Pike the ability to use the company aircraft for up to 50 flight hours per year for personal use.
Under the terms of the employment agreement, if Mr. Pike’s employment is terminated by us without Cause or by Mr. Pike for Good Reason (as such terms are defined below), Mr. Pike will be entitled to receive two years of his then current annual base salary and the continuation for two years of the health, life, disability and other benefits that he was receiving as of the last day of his employment. If Mr. Pike’s employment is terminated by us without Cause or due to his death, Disability (as defined in the employment agreement) or legal incapacity or by him for Good Reason, all unvested equity compensation awards then held by Mr. Pike or his estate will automatically become vested and exercisable. If Mr. Pike’s employment is terminated for any other reason, Mr. Pike will be entitled to receive only earned but unpaid benefits. In addition, the employment agreement prohibits Mr. Pike from soliciting employees, customers and suppliers of the Company for 24 months after termination of his employment, as well as from engaging in certain activities that are competitive with us and our business for a period of five years after the termination of his employment.
As defined in Mr. Pike’s employment agreement, “Cause” means Mr. Pike is either (a) convicted of a felony involving moral turpitude or (b) guilty of gross neglect or willful misconduct in carrying out his duties, resulting in material harm to us, unless he acted in good faith in our best interests; provided, that, with respect to (b) above, Mr. Pike will have a 30-day cure period to eliminate the circumstances that are claimed to constitute Cause unless such circumstances are not capable of being cured. Mr. Pike may terminate his employment for “Good Reason” if (i) he is assigned duties or responsibilities that are inconsistent with his position as President and Chief Executive Officer, (ii) he suffers a reduction in, or material, adverse interference with, the authorities and duties associated with his position, (iii) the duties of his position change in a materially adverse manner from those at the date his employment agreement was executed or (iv) he is required to relocate to an employment location that is more than 50 miles from his employment location on the execution date of his employment agreement; provided, that we will have a 30-day cure period to eliminate the circumstances that are claimed to constitute Good Reason unless such circumstances are not capable of being cured.
If Mr. Pike becomes subject to excise taxes under Section 4999 of the Internal Revenue Code, we will make a tax gross-up payment to him in an amount sufficient to cover such excise taxes and any interest or penalties thereon. However, if such excise taxes would not be applicable if the value of his payments and benefits were reduced by 5%, Mr. Pike will forfeit the amount of such payments and benefits necessary to avoid incurring such excise taxes and we will not have an obligation to provide a tax gross-up payment in connection therewith. If required to forfeit a portion of the payments and benefits, Mr. Pike would choose the particular payments and benefits to be reduced.
25
Table of Contents
We may terminate Mr. Pike’s employment due to Disability or legal incapacity if, based upon independent medical advice, the Board of Directors determines that due to physical or mental illness Mr. Pike is unable to perform his customary duties for (a) 120 consecutive business days, if he fails to return to his duties within five days of written notice of the end of that 120-day period, or (b) 130 business days in any 12-month period. In any such event, Mr. Pike is entitled to a continuation of his base salary and other benefits during the 120-day or 130-day period, in addition to the acceleration of any unvested equity compensation awards at such time, as noted above.
Mr. Pike is subject to a non-solicitation provision for 24 months after termination of his employment, as well as a confidentiality provision. In addition, Mr. Pike has agreed to refrain from engaging in certain activities that are competitive with us and our business for a period of five years after the termination of his employment. Mr. Pike is entitled to indemnification in his position to the fullest extent permitted by the laws of Delaware.
The following table sets forth the amounts payable to Mr. Pike upon termination of his employment, a “change in control” as defined below in the 2005 Omnibus Incentive Compensation Plan or 2008 Omnibus Incentive Compensation Plan or a “company sale” as defined in the 2002 Stock Option Plan A or 2002 Stock Option Plan B, all as of June 30, 2008.
Termination | ||||||||||||||||||||||||
Termination | without Cause or | |||||||||||||||||||||||
for Cause or | Termination | for Good Reason | Termination | Change- in- | ||||||||||||||||||||
without | without Cause | following a | due to | Termination | Control | |||||||||||||||||||
Benefits and Payments | Good | or for Good | Change-in- | Disability or | due to | (No | ||||||||||||||||||
Upon Termination | Reason | Reason | Control | Incapacity(1) | Death(1) | Termination) | ||||||||||||||||||
Compensation: | ||||||||||||||||||||||||
Base Salary(2) | $ | — | $ | 1,500,000 | $ | 1,500,000 | $ | — | $ | — | $ | — | ||||||||||||
Unvested Stock Options(3) | — | 1,527,378 | 1,527,378 | — | — | 1,527,378 | ||||||||||||||||||
Restricted Stock(4) | — | 1,186,436 | 1,186,436 | — | — | 1,186,436 | ||||||||||||||||||
Benefits: | ||||||||||||||||||||||||
Health Insurance(5) | — | 34,128 | 34,128 | — | — | — | ||||||||||||||||||
Life Insurance(6) | — | — | — | — | 850,000 | — | ||||||||||||||||||
Accidental Death and Dismemberment(7) | — | — | — | 250,000 | 250,000 | — | ||||||||||||||||||
Disability Coverage(8) | — | — | — | 3,314,998 | — | — | ||||||||||||||||||
Total: | $ | — | $ | 4,247,942 | $ | 4,247,942 | $ | 3,564,998 | $ | 1,100,000 | $ | 2,713,814 | ||||||||||||
(1) | Pursuant to the terms of Mr. Pike’s current employment agreement executed September 24, 2008, all unvested stock options and restricted stock will vest upon his death, Disability or legal incapacity. Since this employment agreement was not in effect on June 30, 2008, amounts with respect to these items ($1,527,378 with respect to unvested stock options and $1,186,436 with respect to restricted stock) are not included in these columns but now would be payable in such events. | |
(2) | Represents 24 months salary continuation. | |
(3) | Represents the value of unvested stock options held at June 30, 2008, based upon the amount by which the closing market price on June 30, 2008 ($16.61) of the shares of common stock underlying those options exceeded the exercise price of such options. These stock options would vest in full both upon a “change in control” under the terms of, and as defined in the 2005 Omnibus Incentive Compensation Plan and 2008 Omnibus Incentive Compensation Plan (each discussed below) and also under the terms of Mr. Pike’s employment agreement upon termination of his employment due to his death, Disability, legal incapacity, resignation for Good Reason or termination without Cause (each as defined above). All unvested options awarded under either our 2002 Stock Option Plan A or 2002 Stock Option Plan B vested on October 21, 2008. | |
(4) | Represents the value of restricted shares of common stock held at June 30, 2008, based upon the closing market price on June 30, 2008 ($16.61) of the shares of common stock. These restricted shares would vest in full both upon a “change in control” under the terms of, and as defined in, our 2005 Omnibus Incentive Compensation Plan and 2008 Omnibus Incentive Compensation Plan (each discussed below) and also under the terms of Mr. Pike’s employment agreement upon termination of his employment due to his resignation for Good Reason or termination without Cause (each as defined above). | |
(5) | Represents the estimated incremental cost to us of health and dental plan continuation coverage for 24 months. | |
(6) | Represents proceeds from Company paid term life insurance policy with the benefit equal to $100,000 plus one-times current salary. | |
(7) | Represents proceeds from Company provided accidental death and dismemberment policy. | |
(8) | Represents aggregate payments to the executive on a non-discounted basis, assuming full disability through age 65. |
26
Table of Contents
Anthony K. Slater, Audie G. Simmons and James R. Fox
Mr. Slater entered into an employment agreement with us on October 10, 2006 in connection with his promotion to Chief Financial Officer. Under Mr. Slater’s employment agreement with us, he is paid a base annual salary of $358,312, which is reviewed annually by the Compensation Committee of our Board, and is entitled to participate in the other benefit plans and programs available to our officers.
Mr. Simmons entered into an employment agreement with us on November 20, 2006, after having over 25 years of operational experience with us, in connection with his promotion to Senior Vice President of Operations. Under Mr. Simmons’ employment agreement with us, he is paid a base annual salary of $444,336, which is reviewed annually by the Compensation Committee of our Board, and is entitled to participate in the other benefit plans and programs available to our officers.
Mr. Fox entered into an employment agreement with us on October 10, 2006 in connection with his appointment as our General Counsel, Vice President of Risk Management and Corporate Secretary. Under Mr. Fox’s employment agreement with us, he is paid a base annual salary of $344,760, which is reviewed annually by the Compensation Committee of our Board, and is entitled to participate in the other benefit plans and programs available to our officers.
Under the terms of Messrs. Slater’s, Simmons’ and Fox’s employment agreements, if either the executive is terminated for any reason other than death, Disability or Cause or if he resigns for Good Reason (each as defined below), he will be entitled to (a) cash severance payments equal to 12 months of his annual base salary at the time of termination, payable in equal monthly installments and (b) continuation of his medical and health insurance benefits for a period equal to the lesser of (i) 12 months or (ii) the period ending on the date he first becomes entitled to health insurance benefits under any plan maintained by any person for whom he provides services as an employee or otherwise. If the executive’s employment is terminated for Cause, then he will be paid all accrued and unpaid base salary through the date of termination. Similarly, in the event that the executive resigns without Good Reason, he will be paid all accrued and unpaid base salary and any accrued and unpaid benefits through the date of termination, after which we will have no further obligations under his employment agreement. Finally, in the event of an executive’s termination of employment due to his death or Disability, he or his estate will receive all accrued and unpaid base salary and any accrued and unpaid benefits through the date of termination, after which we will have no further obligations under his employment agreement.
We provide life insurance with a death benefit of $100,000 plus one times current salary. Accidental death coverage provides an additional $250,000 benefit. Disability benefits include 100% of salary for the first six months and 60% of salary, up to $10,000 per month, through age 65.
Under these employment agreements, the term “Cause” is defined as the executive’s (a) continued willful failure to substantially perform his duties, (b) willful engagement in gross misconduct materially and demonstrably injurious to us or (c) material breach of certain provisions of his employment agreement, such as non-competition and non-solicitation provisions, and his failure to cure such breach upon written notice by us, if any. “Good Reason” is defined as meaning (a) a material reduction in an executive’s title or responsibilities, (b) the requirement that the executive relocate to an employment location that is more than 50 miles from his employment location on the effective date of his employment agreement, or (c) our failure to cure our material breach of certain provisions of the employment agreements, such as employment duties and compensation provisions, upon written notice to us. Finally, “Disability” is defined as having the same meaning set forth in any long-term disability plan in which the executive participates, and in the absence of such a plan means that, due to physical or mental illness, the executive failed to perform his duties on a full-time basis for 180 consecutive days and did not return on a full-time basis before the end of such period.
27
Table of Contents
The employment agreements also contain confidentiality provisions and non-competition and non-solicitation covenants. Each executive has agreed to neither compete with us nor solicit our customers, suppliers or employees for the twelve months following termination of his employment. The foregoing severance benefits are subject to the executive entering into and not revoking a release of claims in favor of us and abiding by the restrictive covenant provisions in his agreement.
The following table sets forth the amounts payable to Messrs. Slater, Simmons and Fox upon termination of his employment, a “change in control” as defined below in the 2005 Omnibus Incentive Compensation Plan or 2008 Omnibus Incentive Compensation Plan or a “company sale” as defined in the 2002 Stock Option Plan A or 2002 Stock Option Plan B, all as of June 30, 2008.
Termination | ||||||||||||||||||||||||
Termination | Termination | without Cause or | Change-in- | |||||||||||||||||||||
for Cause or | without Cause | for Good Reason | Termination | Termination | Control | |||||||||||||||||||
Benefits and Payments | without Good | or for Good | following a | due to | due to | (No | ||||||||||||||||||
Upon Termination | Reason | Reason | Change-in-Control | Disability | Death | Termination) | ||||||||||||||||||
Anthony K. Slater: | ||||||||||||||||||||||||
Base Salary(1) | $ | — | $ | 341,250 | $ | 341,250 | $ | — | $ | — | $ | — | ||||||||||||
Unvested Stock Options(2) | — | — | 9,000 | — | — | 9,000 | ||||||||||||||||||
Restricted Stock(3) | — | — | 199,320 | — | — | 199,320 | ||||||||||||||||||
Health Insurance(4) | — | 17,064 | 17,064 | — | — | — | ||||||||||||||||||
Life Insurance(5) | — | — | — | — | 441,250 | — | ||||||||||||||||||
Accidental Death & Dismemberment(6) | — | — | — | 250,000 | 250,000 | — | ||||||||||||||||||
Disability Coverage(7) | — | — | — | 3,330,225 | — | — | ||||||||||||||||||
Total: | $ | — | $ | 358,314 | $ | 566,634 | $ | 3,580,225 | �� | $ | 691,250 | $ | 208,320 | |||||||||||
Audie G. Simmons: | ||||||||||||||||||||||||
Base Salary(1) | $ | — | $ | 423,178 | $ | 423,178 | $ | — | $ | — | $ | — | ||||||||||||
Unvested Stock Options(2) | — | — | 236,605 | — | — | 236,605 | ||||||||||||||||||
Restricted Stock(3) | — | — | 223,388 | — | — | 223,388 | ||||||||||||||||||
Health Insurance(4) | — | 17,064 | 17,064 | — | — | — | ||||||||||||||||||
Life Insurance(5) | — | — | — | — | 523,177 | — | ||||||||||||||||||
Accidental Death & Dismemberment(6) | — | — | — | 250,000 | 250,000 | — | ||||||||||||||||||
Disability Coverage(7) | — | — | — | 1,641,989 | — | — | ||||||||||||||||||
Total: | $ | — | $ | 440,242 | $ | 900,235 | $ | 1,891,989 | $ | 773,177 | $ | 459,993 | ||||||||||||
James R. Fox | ||||||||||||||||||||||||
Base Salary(1) | $ | — | $ | 331,500 | $ | 331,500 | $ | — | $ | — | $ | — | ||||||||||||
Unvested Stock Options(2) | — | — | — | — | — | — | ||||||||||||||||||
Restricted Stock(3) | — | — | 83,050 | — | — | 83,050 | ||||||||||||||||||
Health Insurance(4) | — | 17,064 | 17,064 | — | — | — | ||||||||||||||||||
Life Insurance(5) | — | — | — | — | 431,500 | — | ||||||||||||||||||
Accidental Death & Dismemberment(6) | — | — | — | 250,000 | 250,000 | — | ||||||||||||||||||
Disability Coverage(7) | — | — | — | 495,750 | — | — | ||||||||||||||||||
Total: | $ | — | $ | 348,564 | $ | 431,614 | $ | 745,750 | $ | 681,500 | $ | 83,050 | ||||||||||||
(1) | Represents 12 months salary continuation. | |
(2) | Represents the value of unvested stock options held at June 30, 2008, based upon the amount by which the closing market price on June 30, 2008 ($16.61) of the shares of common stock underlying those options exceeded the exercise price of such options. These stock options would vest in full upon a “change in control” under the terms of, and as defined in, our 2005 Omnibus Incentive Compensation Plan and 2008 Omnibus Incentive Compensation Plan (each discussed below). All unvested options awarded under either our 2002 Stock Option Plan A or 2002 Stock Option Plan B vested on October 21, 2008. |
28
Table of Contents
(3) | Represents the value of restricted shares of common stock held at June 30, 2008, based upon the closing market price on June 30, 2008 ($16.61) of the shares of common stock. These restricted shares would vest in full upon a “change in control” under the terms of, and as defined in, our 2005 Omnibus Incentive Compensation Plan and 2008 Omnibus Incentive Compensation Plan (each discussed below). | |
(4) | Represents the estimated incremental cost to us of health and dental plan continuation coverage for 12 months. | |
(5) | Represents proceeds from Company paid term life insurance policy with the benefit equal to $100,000 plus one-times current salary. | |
(6) | Represents proceeds from Company provided accidental death and dismemberment policy. | |
(7) | Represents aggregate payments to the executive on a non-discounted basis, assuming full disability through age 65. |
Compensation Plans
The executives are eligible for awards of stock options, stock appreciation rights, restricted stock, cash incentive awards and other equity-based awards under both our 2005 Omnibus Incentive Compensation Plan and our 2008 Omnibus Incentive Compensation Plan. In the event of a “change of control” of our company, any outstanding awards granted (e.g., options, restricted stock) then held by participants will automatically be deemed exercisable and vested without restriction immediately prior to such change of control, and all performance units and cash incentive awards will be paid out as if the date of the change of control were the last day of the applicable performance period and “target” performance levels had been obtained.
For the purposes of our 2005 Omnibus Incentive Compensation Plan, a “change of control” occurs in the following circumstances: (a) when, during any 24 consecutive month period, individuals who were directors at the beginning of such period cease at any time during such period to constitute a majority of our Board; (b) upon a merger, consolidation or similar corporate transaction involving our company or, if voting securities are issued in connection with any such transaction, our subsidiaries; (c) upon the sale of all or substantially all of our assets to a person that is not an affiliate of us if stockholder approval is required under the laws of our jurisdiction of incorporation; (d) when our stockholders approve a plan of complete liquidation or dissolution of us, unless such liquidation or dissolution is part of a transaction described in paragraphs (b) or (c) above that does not qualify as a change of control; or (e) when a person or group (other than Lindsay Goldberg, us, our affiliates or any employee benefit plan sponsored or maintained by us or our affiliates) becomes the beneficial owner of our voting securities representing 20% or more of the combined voting power of our then outstanding voting securities and such percentage exceeds the voting power of our securities beneficially owned by Lindsay Goldberg and its affiliates.
For the purposes of our 2008 Omnibus Incentive Compensation Plan, a “change of control” occurs in the following circumstances: (a) when, during any 24 consecutive month period, individuals who were directors at the beginning of such period cease at any time during such period to constitute a majority of our Board; (b) when a person or group (other than Lindsay Goldberg, us, our affiliates or any employee benefit plan sponsored or maintained by us or our affiliates) becomes the beneficial owner of our voting securities representing 35% or more of the combined voting power of our then outstanding voting securities; (c) upon a merger, consolidation or similar corporate transaction involving our company or, if voting securities are issued in connection with any such transaction, our subsidiaries; (d) upon the sale of all or substantially all of our assets to a person that is not an affiliate of us; or (e) when our stockholders approve a plan of complete liquidation of the our company.
Prior to our IPO, all stock options were either granted under our 2002 Stock Option Plan A or 2002 Stock Option Plan B, which permitted the grant of nonqualified stock options to employees as incentives for performance and retention. As of the date of this proxy statement, all awards made under either our 2002 Stock Option Plan A or 2002 Stock Option Plan B had vested.
29
Table of Contents
Officer Retirement Benefits
Upon the retirement of an officer who is at least 55 years of age and has been an employee for ten years or more, such officer will receive (a) the company vehicle used by the officer at the time of retirement and (b) continued medical and dental coverage for the officer and the officer’s spouse until reaching age 65.
Securities Authorized for Issuance under our Equity Compensation Plans
The following table contains information about our equity compensation plans as of June 30, 2008.
Number of Shares | ||||||||||||
Number of Shares | Remaining Available | |||||||||||
to be Issued upon | Weighted-Average | for Future Issuance under | ||||||||||
Exercise of | Exercise Price | Equity Compensation Plans | ||||||||||
Outstanding | of Outstanding | (Excluding Shares | ||||||||||
Options and Rights | Options and Rights | Reflected in Column A) | ||||||||||
Plan Category | (Column A) | (Column B) | (Column C) | |||||||||
Equity compensation plans approved by our stockholders | 2,644,032 | 9.96 | 2,974,929 | |||||||||
Equity compensation plans not approved by our stockholders | — | — | — | |||||||||
Total | 2,644,032 | 9.96 | 2,974,929 | |||||||||
30
Table of Contents
PROPOSAL 2:
RATIFICATION OF OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR FISCAL 2009
The Audit Committee has selected Ernst & Young LLP as our independent registered public accounting firm for the year ending June 30, 2009. This selection is being presented to our stockholders for ratification at the 2008 Annual Meeting. Representatives of Ernst & Young are expected to be present at the 2008 Annual Meeting. They will have an opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions.
We paid Ernst & Young a total of $1,101,000 for professional services rendered for the year ended June 30, 2008 and $1,278,000 for professional services rendered for the year ended June 30, 2007. The following table provides information about these fees.
Fee Category | Fiscal 2008 | Fiscal 2007 | ||||||
Audit Fees(1) | $ | 899,000 | $ | 992,000 | ||||
Audit-Related Fees | $ | — | $ | — | ||||
Tax Fees(2) | $ | 128,000 | $ | 192,000 | ||||
All Other Fees(3) | $ | 74,000 | $ | 94,000 | ||||
Total Fees | $ | 1,101,000 | $ | 1,278,000 | ||||
(1) | Audit fees consisted of fees for the audit of our annual financial statements and quarterly reviews. These fees also include fees billed for professional services rendered for the audit of management’s assessment of the effectiveness of internal control over financial reporting. | |
(2) | Tax fees principally consisted of fees for tax compliance and tax advice, planning and consultations. | |
(3) | All other fees consist of fees billed for products and services other than the services reported above, including fees billed for matters related to transactional advisory services, strategic planning and litigation consultation. |
The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services to be performed by our independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE
RATIFICATION OF ERNST & YOUNG LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2009.
RATIFICATION OF ERNST & YOUNG LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2009.
31
Table of Contents
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has reviewed and discussed with management our audited financial statements for the year ended June 30, 2008. The Audit Committee has reviewed and discussed with Ernst & Young LLP, our independent registered public accounting firm, our audited financial statements and the matters required by Statement on Auditing Standards No. 61 (Communication with Audit Committees), as amended.
The Audit Committee has also received from Ernst & Young the written disclosures and the letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee has discussed the matters disclosed in the letter and the independence of Ernst & Young with representatives of that firm. The Audit Committee also considered whether the provision by Ernst & Young of the non-audit services discussed under “Proposal 2 — Ratification of the Independent Registered Public Accounting Firm for Fiscal 2009” is compatible with maintaining the auditors’ independence and determined that such non-audit services were compatible with maintaining Ernst & Young’s independence.
Based on its discussions with management and Ernst & Young and its review of the representations and information provided by management and Ernst & Young, the Audit Committee recommended to the Board of Directors that our audited financial statements be included in our Annual Report on Form 10-K for the year ended June 30, 2008 for filing with the SEC.
Sincerely, | ||
James R. Helvey III, Chairman | ||
Charles E. Bayless | ||
Daniel J. Sullivan | ||
Louis F. Terhar |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Company, LGB Pike II LLC, a company affiliated with Lindsay Goldberg, and certain other stockholders are parties to a stockholders agreement. The stockholders agreement relates to the matters described below.
Restrictions on Transfer of Shares.Under the terms of the stockholders agreement, each stockholder has agreed not to transfer or sell any shares of common stock unless such transfer or sale is pursuant to an effective registration statement or unless consented to by the Company.
Corporate Governance.The stockholders agreement provides that J. Eric Pike will have the right to a seat on our board of directors so long as he serves as our Chief Executive Officer and controls at least 1,321,965 shares of the Company’s common stock. So long as Mr. Pike has the right to a seat on the board of directors, LGB Pike II LLC and its affiliates are required to vote their shares of common stock in favor of Mr. Pike’s election as a director.
Registration Rights.The stockholders agreement provides that LGB Pike II LLC and its affiliates and the other stockholders party to the stockholders agreement, including certain of our NEOs, have registration rights with respect to their stock. LGB Pike II LLC and its affiliates have the right to require the Company to file registration statements, or “demand registrations,” covering shares of the Company’s common stock they hold. In addition to its rights with respect to demand registrations, each of LGB Pike II LLC and its affiliates and the other stockholders party to the stockholders agreement has “piggyback” registration rights. If the Company proposes to register any of its securities for sale for its own account, other than a registration in connection with an employee benefit or similar plan or an acquisition or an exchange offer, the Company will be required to give each party to the stockholders agreement the opportunity to participate in such registration.
Review of Related Person Transactions. Our Code of Business Conduct applies to the review and approval of conflict of interest situations and related person transactions. Under the Code of Business Conduct, all conflicts of interest or related person transactions involving members of our Board of Directors or our executive officers must be reported to and approved by the Board of Directors or our Nominating and Governance Committee.
32
Table of Contents
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and certain persons who beneficially own more than 10% of our common stock, or Reporting Persons, to file reports with the SEC disclosing their ownership of and transactions in our common stock and other equity securities of Pike Electric. Whenever a Reporting Person files such a report with the SEC, the Reporting Person is also required to send us a copy. Based solely on our review of the copies of such reports we received and written representations that no other reports were required for such persons, we believe that, during fiscal year 2008, all filing requirements applicable to our executive officers, directors and such greater than 10% stockholders were complied with on a timely basis.
OTHER MATTERS
We know of no other matters to be submitted or considered at the meeting. If any other matters properly come before the meeting, it is the intention of the persons named in the enclosed proxy to vote the shares they represent as our Board of Directors may recommend.
ANNUAL REPORT ON FORM 10-K
We filed an Annual Report on Form 10-K with the SEC on September 5, 2008. Our Internet address ishttp://www.pike.com. We make available through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Stockholders may also obtain a copy of this report, without charge, by writing to Investor Relations, 100 Pike Way, Mount Airy, North Carolina 27030.
By Order of the Board of Directors, | ||
James R. Fox | ||
Corporate Secretary, Vice President & General Counsel |
October 23, 2008
33
Table of Contents
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. PIKE ELECTRIC CORPORATION 100 PIKE WAY ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS MT. AIRY, NC 27030 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: PIKEL1 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY PIKE ELECTRIC CORPORATION For Withhold For All To withhold authority to vote for any individual All All Except nominee(s), mark “For All Except” and write the THE BOARD OF DIRECTORS RECOMMENDS A number(s) of the nominee(s) on the line below. VOTE “FOR” ITEMS 1 AND 2. Vote on Directors 0 0 0 1. ELECTION OF DIRECTORS Nominees: 01) J. Eric Pike 05) Robert D. Lindsay 02) Charles E. Bayless 06) Daniel J. Sullivan 03) Adam P. Godfrey 07) Louis F. Terhar 04) James R. Helvey III Vote on Proposal For Against Abstain 2. Proposal to ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the 0 0 0 fiscal year ending June 30, 2009. 3. In their discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. The shares represented by this proxy, when properly executed, will be voted in the manner directed herein by the undersigned Stockholder(s). If no direction is made, this proxy will be voted FOR items 1 and 2. If any other matters properly come before the meeting, or if cumulative voting is required, the person named in this proxy will vote in their discretion. Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer. Yes No Please indicate if you plan to attend this meeting. 0 0 Signature [PLEASE SIGN WITHIN BOX] Date _____ Signature (Joint Owners) Date |
Table of Contents
Pike Electric Corporation THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS December 3, 2008 The stockholder(s) hereby appoint(s) James R. Fox and Anthony K. Slater, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Pike Electric Corporation that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 9:30 a.m., Eastern Time on Wednesday, December 3, 2008, at the Bermuda Run Country Club, 324 Bermuda Run Drive, Bermuda Run, NC 27006, and any adjournment. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS AND FOR PROPOSAL 2. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE CONTINUED AND TO BE SIGNED ON REVERSE SIDE |