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SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A INFORMATION
Exchange Act of 1934 (Amendment No. )
Filed by a Party other than the Registranto
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 |
þ | No fee required. | |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: | ||
(2) | Aggregate number of securities to which transaction applies: | ||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||
(4) | Proposed maximum aggregate value of transaction: | ||
(5) | Total fee paid: | ||
o | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: | ||
(2) | Form, Schedule or Registration Statement No.: | ||
(3) | Filing Party: | ||
�� | |||
(4) | Date Filed: | ||
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27422 Portola Parkway, Suite 350
Foothill Ranch, CA92610-2831
Q: | When is the Proxy Statement being mailed and what is its purpose? | |
A: | This Proxy Statement is first being mailed to our stockholders on or about May 7, 2007 at the direction of our Board of Directors in order to solicit proxies for our use at the Annual Meeting. | |
Q: | When is the Annual Meeting and where will it be held? | |
A: | The Annual Meeting will be held on Wednesday, June 6, 2007, at 9:00 a.m., local time, at The Westin, South Coast Plaza, 686 Anton Boulevard, Costa Mesa, California 92626. | |
Q: | Who may attend the Annual Meeting? | |
A: | All of our stockholders may attend the Annual Meeting. | |
Q: | Who is entitled to vote? | |
A: | Stockholders as of the close of business on April 12, 2007 are entitled to vote at the Annual Meeting. Each share of our common stock is entitled to one vote. | |
Q: | On what am I voting? | |
A: | You will be voting on: | |
• The election of three members to our Board of Directors to serve until our 2010 annual meeting of stockholders; | ||
• The ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2007; and | ||
• Such other business as may properly come before the Annual Meeting or any adjournments thereof. | ||
Q: | How do I vote? | |
A: | You may vote by either attending the Annual Meeting or signing and dating each proxy card you receive and returning it in the enclosed prepaid envelope. We encourage you to complete and send in your proxy card without delay. | |
All shares represented by valid proxies, unless the stockholder otherwise specifies, will be voted: | ||
• “FOR” the election of each of the persons identified in “Proposal For Election of Directors” as nominees for election as directors; | ||
• “FOR” the ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2007; and | ||
• At the discretion of the proxy holders with regard to any other matter that may properly come before the Annual Meeting. | ||
If you properly specify on your proxy card how your shares are to be voted, your shares will be voted accordingly. However, as indicated above, if you sign and send in your proxy card but do not indicate how you |
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want to vote, your shares will be voted for each of the nominees for election as directors and for the ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2007. | ||
Q: | If I abstain from voting or withhold authority to vote on either proposal or withhold authority to vote for any particular director nominee, will my shares be counted in the vote? | |
A: | If you abstain from voting on the Proposal For Election of Directors, your shares will not be counted in the vote for any director nominee. If you withhold authority to vote for any particular director nominee, your shares will not be counted in the vote for that nominee. If you abstain from voting or withhold authority to vote on the Proposal For Ratification of the Selection of our Independent Registered Public Accounting Firm, your shares will not be counted in the vote for that proposal. | |
Q: | If my shares are held in “street name” by my broker, will my broker vote my shares for me? | |
A: | Your broker could vote your shares without your instructions on each of the proposals but is not required to do so. To be sure your shares are voted, you should instruct your broker to vote your shares using the instructions provided by your broker. If you do not instruct your broker on how to vote your shares, your shares may not be counted in the vote on the Proposal For Election of Directors or the Proposal For Ratification of our Independent Registered Public Accounting Firm. | |
Q: | Can I change my vote after I mail my proxy? | |
A: | Yes. You can change your vote before voting takes place at the Annual Meeting. You may revoke your proxy by: | |
• submitting a properly signed proxy card with a later date; | ||
• delivering, no later than 5:00 p.m., local time, on June 5, 2007, written notice of revocation to our Secretary, c/o Mellon Investor Services, Proxy Processing, P.O. Box 1680, Manchester, CT 06045-9986; or | ||
• attending the Annual Meeting and voting in person. Your attendance alone will not revoke your proxy. To change your vote, you must also vote in person at the Annual Meeting. | ||
If you instruct a broker to vote your shares, you must follow your broker’s directions for changing those instructions. | ||
Q: | What does it mean if I receive more than one proxy card? | |
A: | If you receive more than one proxy card, it is because your shares are in more than one account. You will need to sign and return all proxy cards to ensure that all of your shares are voted at the Annual Meeting. | |
Q: | Who will count the vote? | |
A: | Representatives of Mellon Investor Services, our transfer agent, will tabulate the votes and act as inspectors of election. | |
Q: | What constitutes a quorum? | |
A: | As of April 12, 2007, the record date, 20,575,423 shares of our common stock were issued and outstanding. A majority of the issued and outstanding shares present or represented by proxy will constitute a quorum for the transaction of business at the Annual Meeting. If you submit a properly executed proxy card, then your shares will be counted as part of the quorum. Abstentions or votes that are withheld on any matter will be counted towards a quorum but will be excluded from the vote relating to the particular matter under consideration. Broker non-votes will be counted towards a quorum but will be excluded from the vote with respect to the matters for which they are applicable. | |
Q: | What is the required vote for election of each director? | |
A: | The required vote for election of each director is a plurality of the votes of the shares of our common stock having voting power present or represented by proxy at the Annual Meeting. Therefore, the three nominees receiving the highest number of votes will be elected. |
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Q: | What is the required vote for ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2007? | |
A: | The approval of the holders of a majority of the total number of outstanding shares of our common stock present or represented by proxy at the Annual Meeting and actually voted on the proposal is necessary to ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2007. | |
Q: | What will happen if the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2007 is not ratified? | |
A: | Pursuant to the Audit Committee Charter, our audit committee has sole authority to appoint our independent registered public accounting firm, and our audit committee will not be bound by the ratification of, or failure to ratify, the selection of Deloitte & Touche LLP. The audit committee will, however, consider any failure to ratify the selection of Deloitte & Touche LLP in connection with the appointment of our independent registered public accounting firm the following year. | |
Q: | How much will this proxy solicitation cost? | |
A: | We have hired MacKenzie Partners, Inc. to assist us in the distribution of proxy materials and solicitation of votes at a cost of approximately $7,500, plusout-of-pocket expenses. We will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonableout-of-pocket expenses for forwarding proxy and solicitation materials to the owners of our common stock. Our officers and regular employees may also solicit proxies, but they will not be specifically compensated for these services. In addition to the use of the mail, proxies may be solicited personally or by telephone by employees of Kaiser or MacKenzie Partners. |
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Carl B. Frankel | Georganne C. Proctor | |
Jack A. Hockema | Jack Quinn | |
Teresa A. Hopp | Thomas M. Van Leeuwen | |
William F. Murdy | Brett E. Wilcox | |
Alfred E. Osborne, Jr., Ph.D. |
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2005 | 2006 | |||||||
Audit Fees(1) | $ | 1,971,710 | $ | 2,359,289 | ||||
Audit-Related Fees(2) | $ | 158,040 | $ | 311,358 | ||||
Tax Fees(3) | $ | 210,000 | $ | 295,186 | ||||
All Other Fees | $ | — | $ | — |
(1) | Audit fees consist principally of fees for the audit of our annual financial statements and review of our financial statements included in our Quarterly Reports onForm 10-Q for those years, audit services provided in |
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connection with compliance with the requirements of the Sarbanes-Oxley Act of 2002, or SOX, and fees incurred in connection with the filing of registration statements with the SEC. | ||
(2) | Audit-related fees consist principally of fees for employee benefit plans, SOX, Section 404 advisory services and statutory audits. | |
(3) | Tax fees consist principally of tax compliance and preparation fees. |
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• | the general independence criteria; | |
• | the qualifications to serve as a director as set forth in any applicable corporate governance guidelines adopted by the board of directors and policies adopted by our nominating and corporate governance committee establishing criteria to be utilized by it in assessing whether a director candidate has appropriate skills and experience; and | |
• | any other qualifications to serve as director imposed by applicable law. |
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• | establishing hiring policies for employees or former employees of the independent auditors; | |
• | reviewing our systems of internal accounting controls; | |
• | discussing risk management policies; | |
• | approving related-party transactions; | |
• | establishing procedures for complaints regarding financial statements or accounting policies; and | |
• | performing other duties delegated to the audit committee by the board of directors from time to time. |
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• | administering plans adopted by the board of directors that contemplate administration by the compensation committee, including our 2006 Equity and Performance Incentive Plan; | |
• | overseeing regulatory compliance with respect to compensation matters; | |
• | reviewing director compensation; and | |
• | performing other duties delegated to the compensation committee by the board of directors from time to time. |
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• | exhibits strong leadership in his or her particular field or area of expertise; | |
• | possesses the ability to exercise sound business judgment; | |
• | has a strong educational background or equivalent life experiences; | |
• | has substantial experience both in the business community and outside the business community; | |
• | contributes positively to the existing collaborative culture among members of the board of directors; | |
• | represents the best interests of all of our stockholders and not just one particular constituency; | |
• | has experience as a senior executive of a company of significant size or prominence or another business or organization comparable to our company; | |
• | possesses skills and experience which make him or her a desirable addition to a standing committee of the board of directors; | |
• | consistently demonstrates integrity and ethics in his or her professional and personal life; and | |
• | has the time and ability to participate fully in activities of the board of directors, including attendance at, and active participation in, meetings of the board of directors and the committee or committees of which he or she is a member. |
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• | assisting in succession planning; | |
• | considering possible conflicts of interest of members of the board of directors and management and making recommendations to prevent, minimize or eliminate such conflicts of interests; | |
• | making recommendations to the board of directors regarding the appropriate size of the board of directors; and | |
• | performing other duties delegated to the nominating and corporate governance committee by the board of directors from time to time. |
• | proof that the stockholder or group of stockholders submitting the recommendation for a director candidate has beneficially owned, for the required one-year holding period, more than 5% of our outstanding common stock; | |
• | a written statement that the stockholder or group of stockholders submitting the recommendation for a director candidate intends to continue to beneficially own more than 5% of our outstanding common stock through the date of the next annual meeting of stockholders; | |
• | the name and record address of each stockholder submitting a recommendation for the director candidate, the written consent of each such stockholder and the director candidate to be publicly identified (including, in the case of the director candidate, to be named in the Company’s proxy materials) and the written consent of the director candidate to serve as a member of our board of directors (and any committee of our board of directors to which the director candidate is assigned to serve by our board of directors) if elected; | |
• | a description of all arrangements or understandings between or among any of the stockholder or group of stockholders submitting the recommendation for a director candidate, the director candidate and any other person or persons (naming such person or persons) pursuant to which the submission of the recommendation for a director candidate is to be made by such stockholder or group of stockholders; | |
• | with respect to the director candidate, (1) his or her name, age, business and residential address and principal occupation or employment, (2) the number of shares of our common stock beneficially owned by him or her, (3) a resume or similar document detailing his or her personal and professional experiences and accomplishments, and (4) all other information relating to the director candidate that would be required to be disclosed in a proxy statement or other filing made in connection with the solicitation of proxies for the election of directors pursuant to the Exchange Act, the rules of the SEC, the Nasdaq Marketplace Rules or other applicable criteria of the NASD; and |
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• | a written statement that each submitting stockholder and the director candidate shall make available to the committee all information reasonably requested in connection with the committee’s evaluation of the director candidate. |
Name | Age | Position(s) | ||||
Jack A. Hockema | 60 | President, Chief Executive Officer and Chairman of the Board; Director | ||||
Joseph P. Bellino | 56 | Executive Vice President and Chief Financial Officer | ||||
John Barneson | 56 | Senior Vice President and Chief Administrative Officer | ||||
John M. Donnan | 46 | Vice President, Secretary and General Counsel | ||||
Daniel J. Rinkenberger | 48 | Vice President and Treasurer |
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Name | Title | |
Jack A. Hockema | President and Chief Executive Officer (our principal executive officer) | |
Joseph P. Bellino | Executive Vice President and Chief Financial Officer (our principal financial officer) | |
John Barneson | Senior Vice President and Chief Administrative Officer | |
John M. Donnan | Vice President, Secretary and General Counsel | |
Daniel D. Maddox | Vice President and Controller (our former principal accounting officer) | |
Kerry A. Shiba | Executive Vice President and Chief Financial Officer (our former principal financial officer) |
• | Create alignment between senior management and stockholders by rewarding senior management for the achievement of strategic goals that successfully drive our operations and enhance stockholder value; |
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• | Attract, motivate and retain highly experienced executives vital to our short-term and long-term success, profitability and growth; | |
• | Differentiate senior management rewards based on actual performance; and | |
• | Provide targeted compensation levels consistent with the 50th percentile of our compensation peer group, which is discussed below, for base salary, the 50th percentile for annual monetary incentives at target-level performance and between the 50th and the 65th percentile for annualized economic equity grant value of long-term incentives. |
• | Balance short-term and long-term goals (approximately 50% of the chief executive officer’s target total compensation is delivered through long-term incentives, while approximately 40% of the target total compensation for the other named executive officers is delivered through long-term incentives); | |
• | Deliver a mix of fixed and at-risk compensation (by design, approximately 70% of the chief executive officer’s target total compensation and approximately 60% of the target total compensation for the other named executive officers is variable,i.e., at-risk annual and long-term incentive compensation) that is directly related to stockholder value and our overall performance; | |
• | Provide guidelines for a compensation program that is competitive with our compensation peer group; and | |
• | Use equity-based awards, stock ownership guidelines and annual incentives that are linked to stockholder value and achievement of individual, segment and corporate performance. |
• | The external challenges to our ability to attract and retain strong senior management; | |
• | Each individual’s contributions to our overall results; | |
• | Our operating and financial performance compared with the targeted goals; and | |
• | Our size and complexity compared with companies in our compensation peer group. |
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• | a two-year retention plan (which we refer to as our Chapter 11 Retention Plan) that provided semi-annual retention payments to key employees through March 31, 2004, with a significant portion of those payments to certain senior employees, including Messrs. Hockema and Barneson, being withheld and paid, subject to certain conditions relating to continued employment, in two installments — the first on the date of emergence and the second one year later; | |
• | a long-term incentive plan (which we refer to as our Chapter 11 Long-Term Incentive Plan) designed to provide incentives for key employees to achieve cost reductions in excess of $80 million annually, with all awards earned being withheld and paid, subject to certain conditions relating to continued employment, in two installments — the first on the date of emergence and the second one year later; | |
• | a severance plan (which we refer to as our Severance Plan) and related agreements designed to provide key employees with job security in an uncertain environment; | |
• | change-in-control severance agreements (which we refer to as Change in Control Agreements) intended to retain key employees through any potential merger or acquisition transaction; and | |
• | the continuance for key employees of our then-existing nonqualified, unfunded supplemental executive retirement plan (which we refer to as our Old Restoration Plan) intended to restore benefits that would be payable to participants in the Kaiser Aluminum Salaried Employees Retirement Plan, a defined benefit pension plan previously maintained by us for our salaried employees (which we refer to as our Old Pension Plan), but for legal limitations on benefit accruals and payments thereunder. |
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Amount of Base Salary | ||||||||
Name | Increase for 2006 | 2006 Base Salary | ||||||
Jack A. Hockema | $ | 0 | $ | 730,000 | ||||
Joseph P. Bellino | — | $ | 350,000 | |||||
John Barneson | $ | 5,000 | $ | 280,000 | ||||
John M. Donnan | $ | 0 | $ | 260,000 | ||||
Daniel D. Maddox | $ | 25,000 | $ | 225,000 | ||||
Kerry A. Shiba | $ | 0 | $ | 270,000 |
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Name | Below Threshold | Threshold | Target | Maximum | ||||||||||||
Jack A. Hockema | 0 | % | 34.25 | % | 68.50 | % | 205.50 | % | ||||||||
Joseph P. Bellino | 0 | % | 25.00 | % | 50.00 | % | 150.00 | % | ||||||||
John Barneson | 0 | % | 22.50 | % | 45.00 | % | 135.00 | % | ||||||||
John M. Donnan | 0 | % | 22.50 | % | 45.00 | % | 135.00 | % | ||||||||
Daniel D. Maddox | 0 | % | 16.67 | % | 33.33 | % | 100.00 | % |
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Number of Shares | ||||
Name | of Restricted Stock | |||
Jack A. Hockema | 185,000 | |||
Joseph P. Bellino | 15,000 | |||
John Barneson | 48,000 | |||
John M. Donnan | 45,000 | |||
Daniel D. Maddox | 11,334 |
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Balance Transferred to | ||||
Name | the New Restoration Plan | |||
Jack A. Hockema | $ | 964,718 | ||
John Barneson | $ | 887,366 | ||
John M. Donnan | $ | 54,851 | ||
Daniel D. Maddox | $ | 41,416 |
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Amount of Base Salary | ||||||||
Name | Increase for 2007 | 2007 Base Salary | ||||||
Jack A. Hockema | $ | 28,000 | $ | 758,000 | ||||
Joseph P. Bellino | $ | 13,000 | $ | 363,000 | ||||
John Barneson | $ | 11,000 | $ | 291,000 | ||||
John M. Donnan | $ | 10,000 | $ | 270,000 |
Threshold | Target | Maximum | ||||||||||
Name | Award Amount | Award Amount | Award Amount | |||||||||
Jack A. Hockema | $ | 259,615 | $ | 519,230 | $ | 1,557,690 | ||||||
Joseph P. Bellino | $ | 90,750 | $ | 181,500 | $ | 544,500 | ||||||
John Barneson, | $ | 65,475 | $ | 130,950 | $ | 392,850 | ||||||
John M. Donnan | $ | 60,750 | $ | 121,500 | $ | 364,500 |
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Number of Shares of | ||||||||||||
Common Stock for | ||||||||||||
Target | Number of Shares of | Which Option Rights | ||||||||||
Name | Monetary Value(1) | Restricted Stock(2) | are Exercisable(3) | |||||||||
Jack A. Hockema | $ | 1,250,000 | 13,239 | 8,037 | ||||||||
Joseph P. Bellino | $ | 476,000 | 5,041 | 3,060 | ||||||||
John Barneson, | $ | 363,000 | 3,844 | 2,334 | ||||||||
John M. Donnan | $ | 324,000 | 3,431 | 2,083 |
(1) | For purposes of these grants, (a) restricted stock was determined to have an economic value of $70.81 per share (calculated using (i) the $80.01 closing sale price per share of our common stock as reported by the Nasdaq Global Market, Inc. on April 3, 2007 and (ii) an 11.5% discount factor to take into account the applicable restriction period) and (b) option rights were determined to have an economic value of $38.88 per share of common stock purchasable upon exercise thereof (calculated using a modified Black-Scholes valuation). | |
(2) | The restrictions on 100% of the shares of restricted stock granted will lapse on April 3, 2010 or earlier if the named executive officer’s employment terminates as a result of death or disability (or, in the case of Messrs. Hockema and Bellino, retirement), the named executive officer’s employment is terminated by us without cause, the named executive officer’s employment is voluntarily terminated by him for good reason or in the event of a change in control. | |
(3) | The option rights granted will become exercisable as to one-third of the total number of shares of common stock for which they are exercisable on each of April 3, 2008, April 3, 2009 and April 3, 2010 or earlier if the named executive officer’s employment terminates as a result of death or disability (or, in the case of Messrs. Hockema and Bellino, retirement), the named executive officer’s employment is terminated by us without cause, the named executive officer’s employment is voluntarily terminated by him for good reason or in the event of a change in control. The purchase price per share payable upon exercise of each option right is $80.01, the closing price per share of our common stock, as reported by the Nasdaq Global Market, Inc. on April 3, 2007. The option rights granted terminate on April 3, 2017, unless terminated earlier in accordance with the terms of the underlying grant. |
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Change in | ||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||
Nonqualified | ||||||||||||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||||||||||||
Stock | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||||
Name and Principal Position | Year | Salary | Awards(1) | Compensation(2)(3) | Earnings(4) | Compensation | Total | |||||||||||||||||||||
Jack A. Hockema, | 2006 | $ | 730,000 | $ | 1,301,167 | $ | 2,474,930 | $ | 8,403 | $ | 539,556 | (5)(6)(7)(8) | $ | 5,054,056 | ||||||||||||||
President, Chief Executive Officer and Chairman of the Board | ||||||||||||||||||||||||||||
Joseph P. Bellino, | 2006 | $ | 220,018 | $ | 105,500 | $ | 288,892 | — | $ | 39,119 | (5)(6)(9) | $ | 653,529 | |||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||||||||||||||||
John Barneson, | 2006 | $ | 278,750 | $ | 337,600 | $ | 554,941 | $ | 5,020 | $ | 191,942 | (5)(6)(7)(10) | $ | 1,368,253 | ||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||||||||||||||||
John M. Donnan, | 2006 | $ | 260,000 | $ | 316,500 | $ | 297,699 | — | $ | 41,897 | (5)(6)(11) | $ | 916,096 | |||||||||||||||
Vice President, General Counsel and Secretary | ||||||||||||||||||||||||||||
Daniel D. Maddox, | 2006 | $ | 222,917 | $ | 318,863 | $ | 237,854 | — | $ | 36,971 | (5)(6)(12) | $ | 816,605 | |||||||||||||||
Vice President and Controller | ||||||||||||||||||||||||||||
Kerry A. Shiba, | 2006 | $ | 17,386 | — | $ | 253,511 | $ | 884 | $ | 433,646 | (5)(13) | $ | 705,427 | |||||||||||||||
Executive Vice President and Chief Financial Officer |
(1) | Reflects the value of restricted stock awards granted to our named executive officers under our Equity Incentive Plan on July 6, 2006 in connection with our emergence from chapter 11 bankruptcy based on the compensation cost of the award with respect to our 2006 fiscal year computed in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, which we refer to asSFAS No. 123-R, but excluding any impact of assumed forfeiture rates. The number of shares of restricted stock received by our named executive officers pursuant to such awards was as follows: Mr. Hockema, 185,000; Mr. Bellino, 15,000; Mr. Barneson, 48,000; Mr. Donnan, 45,000; and Mr. Maddox, 11,334. The table reflects the expense recognized for each named executive officer (other than Messrs. Maddox and Shiba) for the six-month portion of the three-year vesting period for the restricted stock extending from our emergence date through December 31, 2006, computed in accordance withSFAS No. 123-R, but excluding any impact of assumed forfeiture rates, based on (a) a per share value at emergence of $42.20 and (b) the total number of shares of restricted stock received by the named executive officer. The table reflects the expense recognized for Mr. Maddox, who resigned effective April 1, 2007, computed in accordance withSFAS No. 123-R, but excluding any impact of assumed forfeiture rates, based on (a) a per share value at emergence of $42.20, (b) the total number of shares of restricted stock received by him, (c) the assumptions that his employment will terminate and that his shares of restricted stock will vest on April 1, 2007, and (d) the six- month portion of the assumed nine-month vesting period for his restricted stock extending from our emergence date through December 31, 2006. Mr. Shiba, who resigned effective January 23, 2006, did not receive a restricted stock award. For additional information regarding the compensation cost of |
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stock awards with respect to our 2006 fiscal year, see Note 7 of the Notes to Consolidated Financial Statements included in our Annual Report onForm 10-K for the fiscal year ended December 31, 2006. | ||
(2) | Includes payments made in 2006 under our Chapter 11 Long-Term Incentive Plan, pursuant to which key management employees accrued cash awards based on our attainment of sustained cost reductions above $80 million annually for the four and one-half year period from 2002 through our emergence from chapter 11 bankruptcy on July 6, 2006, as follows: Mr. Hockema, $1,649,440; Mr. Barneson, $346,938; Mr. Donnan, $104,554; Mr. Maddox, $114,043; and Mr. Shiba, $253,511. For each of Messrs. Hockema, Barneson, Donnan and Maddox, these amounts represent approximately one-half of the total amounts accrued under our Chapter 11 Long-Term Incentive Plan during the four and one-half year period from 2002 through our emergence from chapter 11 bankruptcy on July 6, 2006; for Mr. Shiba, the amount represents the total amount accrued. The total amounts accrued under our Chapter 11 Long-Term Incentive Plan during the four and one-half year period for Messrs. Hockema, Barneson, Donnan and Maddox were as follows: Mr. Hockema, $3,298,880; Mr. Barneson, $693,876; Mr. Donnan, $208,575; and Mr. Maddox, $227,228. Individual amounts accrued by year for Messrs. Hockema, Barneson, Donnan and Maddox were as follows: Mr. Hockema, $2,324,557 in 2002 and 2003, $918,818 in 2004, ($240,819) in 2005 and $296,324 in 2006; Mr. Barneson, $466,534 in 2002 and 2003, $214,391 in 2004, ($56,191) in 2005 and $69,142 in 2006; Mr. Donnan, $146,045 in 2002 and 2003, $55,129 in 2004, ($32,109) in 2005 and $39,510 in 2006; and Mr. Maddox, $162,274 in 2002 and 2003, $61,255 in 2004, ($16,055) in 2005 and $19,755 in 2006. Annual awards during this period were approximately 81% of target in 2002 and 2003; 61% of target in 2004; (16%) of target in 2005; and 40% of target in 2006, with an average award of approximately 55% of target over the four and one-half year period. For each of Messrs. Hockema, Barneson, Donnan and Maddox, the 2006 payments under our Chapter 11 Long-Term Incentive Plan were made in August 2006 following our emergence. For each of Messrs. Hockema, Barneson and Donnan, the remaining portion of the total amount (subject to adjustment in accordance with the terms of the Chapter 11 Long-Term Incentive Plan) will be paid on July 6, 2007 unless he is terminated for cause or voluntarily terminates his employment prior to that date. For Mr. Maddox, pursuant to the terms of his employment agreement, the remaining portion of the total amount will be paid on July 6, 2007, notwithstanding the termination of his employment effective April 1, 2007. For Mr. Shiba, pursuant to the terms of a release entered into between him and us in connection with his resignation, the total amount was paid in early 2006. Mr. Bellino, who joined us in May 2006, did not participate in our Chapter 11 Long-Term Incentive Plan. | |
(3) | Includes payments under our 2006 Short-Term Incentive Plan, pursuant to which key management employees earned cash awards based on the financial and safety performance of our fabricated products segment, the performance of the particular segment to which the employee was assigned and individual performance objectives. Based on our 2006 results, the award multiple approved by the compensation committee for use under the 2006 Short-Term Incentive Plan was approximately 1.73. Individual monetary awards paid to the named executive officers under the 2006 Short-Term Incentive Plan, which were paid in March 2007, were as follows: Mr. Hockema, $825,490; Mr. Bellino, $288,892; Mr. Barneson, $208,003; Mr. Donnan, $193,145; and Mr. Maddox, $123,811. Mr. Shiba, who resigned effective January 23, 2006, did not participate in our 2006 Short-Term Incentive Plan. | |
(4) | Reflects the aggregate change in actuarial present value of the named executive officer’s accumulated benefit under our Old Pension Plan during 2006 (except for negative changes of $(603) for Mr. Donnan and $(256) for Mr. Maddox) calculated by (a) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries and (b) applying a discount rate of 5.50% per annum to determine the actuarial present value of the accumulated benefit at December 31, 2005 and a discount rate of 5.75% per annum to determine the actuarial present value of the accumulated benefit at December 31, 2006. Effective December 17, 2003, the PBGC terminated and effectively assumed responsibility for making benefit payments in respect of our Old Pension Plan, whereupon all benefit accruals under the Old Pension Plan ceased and benefits available thereunder to certain salaried employees, including Messrs. Hockema and Barneson, were significantly reduced due to the limitations on benefits payable by the PBGC. Above-market or preferential earnings are not available under our New Restoration Plan, which is our only plan or arrangement pursuant to which compensation may be deferred on a basis that is not tax-qualified, or any of our other benefit plans. |
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(5) | Includes contributions made by us under our Savings Plan in 2006, as follows: Mr. Hockema, $22,883; Mr. Barneson, $24,225; Mr. Donnan, $21,133; and Mr. Maddox, $20,240. In 2006, we did not make contributions under our Savings Plan to Mr. Shiba, who resigned effective January 23, 2006, or Mr. Bellino, who joined us in May 2006. | |
(6) | Includes contributions made by us under our New Restoration Plan (which is intended to restore the benefit of contributions that we would have otherwise paid to participants under our Savings Plan but for limitations imposed by the Internal Revenue Code) in 2006, as follows: Mr. Hockema, $105,037; Mr. Barneson, $27,873; Mr. Donnan, $9,809; and Mr. Maddox, $5,579. Mr. Shiba, who resigned effective January 23, 2006, and Mr. Bellino, who joined us in May 2006, did not participate in our New Restoration Plan in 2006. | |
(7) | Includes amounts paid to Messrs. Hockema and Barneson under our Chapter 11 Retention Plan in 2006, as follows: Mr. Hockema, $365,000; and Mr. Barneson, $125,000. For each of Messrs. Hockema and Barneson, these amounts represent approximately one-half of the total retention payments withheld from Messrs. Hockema and Barneson under the Chapter 11 Retention Plan. The total amounts withheld from Messrs. Hockema and Barneson were as follows: Mr. Hockema, $730,000; and Mr. Barneson, $250,000. The 2006 payments under our Chapter 11 Retention Plan were made in August 2006 following our emergence from chapter 11 bankruptcy, and the remaining portion of the total amount withheld from each of Messrs. Hockema and Barneson will be paid on July 6, 2007 unless he is terminated for cause or voluntarily terminates his employment prior to that date. | |
(8) | Includes the cost to us of perquisites and other personal benefits for Mr. Hockema as follows: club membership dues, $6,875; legal fees and expenses incurred by Mr. Hockema in connection with the negotiation and consummation of his employment agreement with us, $25,191; and vehicle allowance, $14,570. | |
(9) | Includes the cost to us of perquisites and other personal benefits for Mr. Bellino as follows: club membership dues, $3,040; housing and other expenses associated with his relocation to California, $27,840; and vehicle allowance, $8,239. | |
(10) | Includes the cost to us of perquisites and other personal benefits for Mr. Barneson as follows: club membership dues, $4,385; and vehicle allowance, $10,459. | |
(11) | Includes the cost to us of perquisites and other personal benefits for Mr. Donnan as follows: vehicle allowance, $10,955. | |
(12) | Includes the cost to us of perquisites and other benefits for Mr. Maddox as follows: vehicle allowance, $11,152. | |
(13) | Includes $431,777 paid or accrued to Mr. Shiba pursuant to the release entered into between him and us in connection with his resignation (exclusive of amounts earned by him under our Chapter 11 Long-Term Incentive Plan (see Note 2 above) and amounts referred to in the next sentence). Also includes the cost to us of perquisites and other personal benefits for Mr. Shiba as follows: club membership dues, $1,210; and vehicle allowance, $659. |
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All Other | ||||||||||||||||||||||||
Stock Awards: | ||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||
Estimated Possible Payouts Under | Shares of | Grant Date | ||||||||||||||||||||||
Non-Equity Incentive Plan Awards(1) | Stock or | Fair Value of | ||||||||||||||||||||||
Threshold | Target | Maximum | Units(2) | Stock Awards(3) | ||||||||||||||||||||
Name | Grant Date | ($) | ($) | ($) | (#) | ($) | ||||||||||||||||||
Jack A. Hockema | — | $ | 250,025 | $ | 500,050 | $ | 1,500,150 | — | ||||||||||||||||
7/6/06 | — | — | — | 185,000 | $ | 7,807,000 | ||||||||||||||||||
Joseph P. Bellino | — | $ | 87,500 | $ | 175,000 | $ | 525,000 | — | ||||||||||||||||
7/6/06 | — | — | — | 15,000 | $ | 633,000 | ||||||||||||||||||
John Barneson | — | $ | 63,000 | $ | 126,000 | $ | 378,000 | — | ||||||||||||||||
7/6/06 | — | — | — | 48,000 | $ | 2,025,600 | ||||||||||||||||||
John M. Donnan | — | $ | 58,500 | $ | 117,000 | $ | 351,000 | — | ||||||||||||||||
7/6/06 | — | — | — | 45,000 | $ | 1,899,000 | ||||||||||||||||||
Daniel D. Maddox | — | $ | 37,500 | $ | 75,000 | $ | 225,000 | — | — | |||||||||||||||
7/6/06 | — | — | — | 11,334 | $ | 478,295 | ||||||||||||||||||
Kerry A. Shiba | — | — | — | — | — | — |
(1) | Reflects the threshold, target and maximum award amounts under our 2006 Short-Term Incentive Plan for our named executive officers. No awards were available below the threshold performance level. Mr. Shiba, who resigned effective January 23, 2006, did not participate in our 2006 Short-Term Incentive Plan. Under our 2006 Short-Term Incentive Plan, participants were eligible to receive a cash incentive award between one-half and three times the participant’s target award amount. Based on our 2006 results, the award multiple approved by the compensation committee for use under the 2006 Short-Term Incentive Plan was approximately 1.73. Individual monetary awards paid to the named executive officers under the 2006 Short-Term Incentive Plan, which were paid in March 2007, were as follows: Mr. Hockema, $825,490; Mr. Bellino, $288,892; Mr. Barneson, $208,003; Mr. Donnan, $193,145; and Mr. Maddox, $123,811. | |
(2) | Reflects the number of shares of restricted stock received by our named executive officers pursuant to awards granted under our Equity Incentive Plan on July 6, 2006 in connection with our emergence from chapter 11 bankruptcy. The restrictions on such shares received by Messrs. Hockema, Bellino, Barneson and Donnan will lapse on July 6, 2009 or earlier if the named executive officer’s employment terminates as a result of death or disability, the named executive officer’s employment is terminated by us without cause, the named executive officer’s employment is voluntarily terminated by him for good reason or if there is a change in control. The restrictions on such shares received by Mr. Maddox lapsed on April 1, 2007 upon the conclusion, and pursuant to the terms, of his employment agreement. Mr. Shiba, who resigned effective January 23, 2006, did not receive a restricted stock award. | |
(3) | The grant date fair value of the restricted stock awards reflected in this table is computed in accordance withSFAS No. 123-R, but excluding any impact of assumed forfeiture rates, based on (a) a per share value at our emergence from chapter 11 bankruptcy of $42.20 and (b) the total number of shares of restricted stock awarded. For information regarding the compensation cost of the restricted stock awards with respect to our 2006 fiscal year, see Note 7 to the Notes to Consolidated Financial Statements included in our Annual Report onForm 10-K for the fiscal year ended December 31, 2006. |
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• | base salary earned through the date of such termination; | |
• | except in the case of a termination by us for cause or by him other than for good reason, earned but unpaid incentive awards; | |
• | accrued but unpaid vacation; | |
• | benefits under our employment benefit plans to the extent vested and not forfeited on the date of such termination; and | |
• | benefit continuation and conversion rights to the extent provided under our employment benefit plans. |
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• | base salary earned through the date of such termination; | |
• | except in the case of a termination by us for cause or by him other than for good reason, earned but unpaid incentive awards; | |
• | accrued but unpaid vacation; | |
• | benefits under our employment benefit plans to the extent vested and not forfeited on the date of such termination; and | |
• | benefit continuation and conversion rights to the extent provided under our employment benefit plans. |
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• | the participant receives severance compensation or welfare benefit continuation pursuant to a Change in Control Agreement (described below); | |
• | the participant’s employment is terminated other than by us without cause or by the participant for good reason; or | |
• | the participant declines to sign, or subsequently revokes, a designated form of release. |
• | the participant receives severance compensation or welfare benefit continuation pursuant to the Severance Plan or any other prior agreement; | |
• | the participant’s employment is terminated other than by us without cause or by the participant for good reason; or | |
• | the participant declines to sign, or subsequently revokes, a designated form of release. |
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• | three times (for Mr. Barneson) or two times (for Mr. Donnan) the sum of his base pay and most recent short-term incentive target; | |
• | a pro-rated portion of his short-term incentive target for the year of termination; and | |
• | a pro-rated portion of his long-term incentive target in effect for the year of his termination, provided that such target was achieved. |
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• | the fabricated products segment’s EBITDA; | |
• | the fabricated products segment’s safety performance as measured by total case incident rate; | |
• | performance of the particular business to which a participant is assigned; and | |
• | individual performance objectives. |
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• | For our employees who were employed with us on or before January 1, 2004, we contribute in a range from 2% to 10% of the employee’s compensation, based upon the sum of the employee’s age and years of continuous service as of January 1, 2004; and | |
• | For our employees who were first employed with us after January 1, 2004, we contribute 2% of the employee’s compensation. |
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Stock Awards | ||||||||
Number of Shares or Units of | Market Value of Shares or Units of | |||||||
Stock That Have Not Vested(1) | Stock That Have Not Vested(2) | |||||||
Name | (#) | ($) | ||||||
Jack A. Hockema | 185,000 | $ | 10,356,300 | |||||
Joseph P. Bellino | 15,000 | $ | 839,700 | |||||
John Barneson | 48,000 | $ | 2,687,040 | |||||
John M. Donnan | 45,000 | $ | 2,519,100 | |||||
Daniel D. Maddox | 11,334 | $ | 634,477 | |||||
Kerry A. Shiba | — | — |
(1) | Reflects the number of shares of restricted stock received by our named executive officers pursuant to awards granted under our Equity Incentive Plan on July 6, 2006 in connection with our emergence from chapter 11 bankruptcy. The restrictions on all such shares will lapse on July 6, 2009 or earlier if the named executive officer’s employment terminates as a result of death or disability (or, in the case of Messrs. Hockema and Bellino, retirement), the named executive officer’s employment is terminated by us without cause, the named executive officer’s employment is voluntarily terminated by him for good reason or if there is a change in control. Pursuant to Mr. Maddox’s employment agreement, the restrictions on his 11,334 shares of restricted stock lapsed effective April 1, 2007 upon his resignation at the conclusion of his employment agreement. Mr. Shiba, who resigned effective January 23, 2006, did not receive a restricted stock award. | |
(2) | Reflects the aggregate market value of the shares of restricted stock determined based on a per share price of $55.98, the reported closing price for our common stock on the Nasdaq Global Market on December 29, 2006, which was the last trading day of 2006. |
Present Value of | ||||||||||
Number of Years | Accumulated | |||||||||
Credited Service | Benefit(1) | |||||||||
Name | Plan Name | (#) | ($) | |||||||
Jack A. Hockema | Kaiser Aluminum Salaried Employees Retirement Plan | 11.92 | $ | 293,262 | ||||||
John Barneson | Kaiser Aluminum Salaried Employees Retirement Plan | 28.83 | $ | 269,372 | ||||||
John M. Donnan | Kaiser Aluminum Salaried Employees Retirement Plan | 10.25 | $ | 129,390 | ||||||
Daniel D. Maddox | Kaiser Aluminum Salaried Employees Retirement Plan | 7.58 | $ | 94,867 | ||||||
Kerry A. Shiba | Kaiser Aluminum Salaried Employees Retirement Plan | 5.58 | $ | 91,016 |
(1) | Reflects the actuarial present value of the named executive officer’s accumulated benefit under our Old Pension Plan at December 31, 2006 determined (a) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries and (b) applying a discount rate of 5.75% per annum. |
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Registrant | Aggregate | Aggregate | ||||||||||
Contributions | Earnings in | Balance at | ||||||||||
Name | in Last FY(1) | Last FY(2) | Last FYE(3) | |||||||||
Jack A. Hockema | $ | 105,037 | $ | 26,051 | $ | 1,095,806 | ||||||
Joseph P. Bellino | — | — | — | |||||||||
John Barneson | $ | 27,873 | $ | 19,102 | $ | 934,341 | ||||||
John M. Donnan | $ | 9,809 | $ | 7,359 | $ | 72,018 | ||||||
Daniel D. Maddox | $ | 5,579 | $ | 1,144 | $ | 48,140 | ||||||
Kerry A. Shiba | — | — | — |
(1) | In each case, 100% of such amount is included in the “All Other Compensation” column of the summary compensation table above. See “— Summary Compensation Table for 2006” above. | |
(2) | Amounts included in this column do not include above-market or preferential earnings (of which there were none) and, accordingly, such amount is not included in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the summary compensation table above. See “— Summary Compensation Table for 2006” above. | |
(3) | Includes amounts accrued under the Old Restoration Plan and transferred to accounts under the New Restoration Plan upon its adoption in connection with our emergence from chapter 11 bankruptcy, as follows: Mr. Hockema, $964,718; Mr. Barneson, $887,366; Mr. Donnan, $54,851; and Mr. Maddox, $41,416. Mr. Shiba, who resigned effective January 23, 2006, did not participate in the New Restoration Plan and, accordingly, the amount of benefits accrued to him under the Old Restoration Plan was not transferred to the New Restoration Plan. Mr. Bellino, who joined us in May 2006, did not participate in the New Restoration Plan in 2006. |
• | If our matching contributions to a participant under the Savings Plan are limited in any year, we will make an annual contribution to that participant’s account under the New Restoration Plan equal to the difference between: |
• | the matching contributions that we could have made to that participant’s account under the Savings Plan if the Internal Revenue Code did not impose any limitations; and |
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• | the maximum contribution we could in fact make to that participant’s account under the Savings Plan in light of the limitations imposed by the Internal Revenue Code. |
• | Annual fixed-rate contributions to the participant’s account under the New Restoration Plan are made in an amount equal to between 2% and 10% of the participant’s excess compensation, as defined in Section 401(a)(17) of the Internal Revenue Code. The actual fixed-rate contribution percentage is determined based upon the sum of the participant’s age and years of continuous service as of January 1, 2004. If a participant is first employed with us after January 1, 2004, the fixed-rate contribution percentage is 2%. A participant is required to be employed on the last day of the year in order to receive the fixed-rate contribution. Further, to the extent that fixed-rate contributions to a participant under our Savings Plan on compensation that is not excess compensation, as defined in Internal Revenue Code Section 401(a)(17), cannot be made under the Savings Plan due to Internal Revenue Code limitations, such fixed-rate contributions will be made to such participant’s account under our New Restoration Plan. Participants are vested 100% in our fixed-rate contributions to our New Restoration Plan after five years of service or upon retirement, death, disability or a change of control. |
• | voluntary termination by the named executive officer; | |
• | termination by us for cause; | |
• | termination by us without cause or by the named executive officer with good reason; | |
• | termination by us without cause or by the named executive officer with good reason following a change in control; | |
• | termination at normal retirement; | |
• | termination as a result of disability; or | |
• | termination as a result of death. |
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JACK A. HOCKEMA | ||||||||||||||||||||||||||||
Circumstances of Termination | ||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||
by Us | ||||||||||||||||||||||||||||
Without | ||||||||||||||||||||||||||||
Cause or by | ||||||||||||||||||||||||||||
Termination | the Named | |||||||||||||||||||||||||||
by Us | Executive | |||||||||||||||||||||||||||
Without | Officer with | |||||||||||||||||||||||||||
Voluntary | Cause or by | Good | ||||||||||||||||||||||||||
Termination | the Named | Reason | ||||||||||||||||||||||||||
by Named | Termination | Executive | Following a | |||||||||||||||||||||||||
Payments and | Executive | by Us for | Officer with | Change in | Normal | |||||||||||||||||||||||
Benefits | Officer | Cause | Good Reason | Control | Retirement | Disability | Death | |||||||||||||||||||||
Payment of earned but unpaid: | ||||||||||||||||||||||||||||
Base salary(1) | — | — | — | — | — | — | — | |||||||||||||||||||||
Long-term incentive(2) | — | — | $ | 1,649,440 | $ | 1,649,440 | $ | 1,649,440 | $ | 1,649,440 | $ | 1,649,440 | ||||||||||||||||
Short-term incentive(3) | — | — | $ | 497,310 | $ | 497,310 | $ | 497,310 | $ | 497,310 | $ | 497,310 | ||||||||||||||||
Retention payment(4) | — | — | $ | 365,000 | $ | 365,000 | $ | 365,000 | $ | 365,000 | $ | 365,000 | ||||||||||||||||
Vacation(5) | $ | 56,154 | $ | 56,154 | $ | 56,154 | $ | 56,154 | $ | 56,154 | $ | 56,154 | $ | 56,154 | ||||||||||||||
Other Benefits: | ||||||||||||||||||||||||||||
Lump sum payment | — | — | $ | 2,460,100 | (6) | $ | 3,690,150 | (7) | — | — | — | |||||||||||||||||
Healthcare benefits | — | — | $ | 29,880 | (8) | $ | 45,474 | (8) | — | — | — | |||||||||||||||||
Disability benefits | — | — | $ | 13,450 | (9) | $ | 18,212 | (9) | — | $ | 710,856 | (10) | — | |||||||||||||||
Life insurance | — | — | — | (11) | — | (11) | — | — | — | (12) | ||||||||||||||||||
Perquisites and other personal benefits | — | — | — | — | — | — | — | |||||||||||||||||||||
Taxgross-up(13) | — | — | — | $ | 4,393,426 | — | — | — | ||||||||||||||||||||
Acceleration of Stock Awards: | ||||||||||||||||||||||||||||
Market value of stock vesting on termination (14) | — | — | $ | 10,356,300 | $ | 10,356,300 | $ | 10,356,300 | $ | 10,356,300 | $ | 10,356,300 | ||||||||||||||||
Distribution of New Restoration Plan Balance: | ||||||||||||||||||||||||||||
Amount of Distribution (15) | $ | 1,095,806 | — | $ | 1,095,806 | $ | 1,095,806 | $ | 1,095,806 | $ | 1,095,806 | $ | 1,095,806 | |||||||||||||||
Total | $ | 1,151,960 | $ | 56,154 | $ | 16,523,440 | $ | 22,167,272 | $ | 14,020,010 | $ | 14,730,866 | $ | 14,020,010 | ||||||||||||||
(1) | Assumes that there is no earned but unpaid base salary at the time of termination. | |
(2) | Under our Chapter 11 Long-Term Incentive Plan, we must pay Mr. Hockema or his estate the remaining portion of the total amount accrued by Mr. Hockema thereunder on July 6, 2007 unless he is terminated by us for cause or he voluntarily terminates his employment (other than at normal retirement) prior to that date. The $1,649,440 amount reflected in the table is based on computations made in connection with the 2006 payments under the Chapter 11 Long-Term Incentive Plan and assumes no decrease in the number of plan participants or adjustment to the cost reduction pool prior to July 6, 2007. | |
(3) | Under our 2006 Short-Term Incentive Plan, Mr. Hockema’s target award for 2006 was $500,050, but his award could have ranged from a threshold of $250,000 to a maximum of $1,500,150, or could have been zero if the threshold performance was not achieved. Pursuant to Mr. Hockema’s employment agreement, we must pay Mr. Hockema or his estate any earned but unpaid short-term incentive unless he is terminated by us for cause or he voluntarily terminates his employment other than for good reason. Under Mr. Hockema’s employment agreement, if his employment had terminated during 2006 but prior to December 31, 2006 Mr. Hockema’s |
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target award for 2006 under our 2006 Short-Term Incentive Plan would have been prorated for the actual number of days of Mr. Hockema’s employment in 2006 and Mr. Hockema would have been entitled to payment of such amount, without any increase or reduction that would normally be considered with his award, unless his employment had been terminated by us for cause or had been voluntarily terminated by him other than for good reason; accordingly, assuming his employment had terminated on December 29, 2006, the last business day of 2006, we would have been obligated to pay Mr. Hockema $497,310 unless his employment had been terminated by us for cause or had been voluntarily terminated by him other than for good reason. Under Mr. Hockema’s employment agreement, if his employment had terminated on December 31, 2006, the last day of our 2006 fiscal year, Mr. Hockema would have been entitled to full payment of his award ($825,490) under the 2006 Short-Term Incentive Plan unless his employment had been terminated by us for cause or had been voluntarily terminated by him other than for good reason. | ||
(4) | Under our Chapter 11 Retention Plan, we must pay Mr. Hockema or his estate $365,000 on July 6, 2007 unless his employment is terminated by us for cause or is voluntarily terminated by him (other than at normal retirement) prior to that date. | |
(5) | Assumes that Mr. Hockema used all of his 2006 vacation and that he has four weeks of accrued vacation for 2007. | |
(6) | Under Mr. Hockema’s employment agreement, if Mr. Hockema’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must make a lump-sum payment to Mr. Hockema in an amount equal to two times the sum of his base salary and target annual bonus opportunity for the fiscal year in which such termination occurs. | |
(7) | Under Mr. Hockema’s employment agreement, if Mr. Hockema’s employment is terminated by us without cause or is voluntarily terminated by him for good reason within two years following a change in control, we must make a lump-sum payment to Mr. Hockema in an amount equal to three times the sum of his base salary and target annual bonus. | |
(8) | Under Mr. Hockema’s employment agreement, if Mr. Hockema’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his medical and dental benefits for two years, or, if such termination occurs within two years following a change in control, three years, commencing on the date of such termination. The table reflects the present value of such medical and dental benefits at December 29, 2006 determined (a) assuming family coverage in a point of service medical plan and a basic dental plan, (b) based on current COBRA coverage rates for 2007 and assuming a 9% increase in the cost of medical coverage for 2008 as compared to 2007, an 8.5% increase in the cost of medical coverage for 2009 as compared to 2008 and a 6% increase in the cost of dental coverage for 2008 as compared to 2007 and for 2009 as compared to 2008, (c) assuming Mr. Hockema pays premiums for such coverage throughout the applicable benefit continuation period in the same manner as if he were an active employee, and (d) applying a discount rate of 5.75% per annum. | |
(9) | Under Mr. Hockema’s employment agreement, if Mr. Hockema’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his disability benefits for two years, or, if such termination occurs within two years following a change in control, three years, commencing on the date of such termination. The table reflects the present value of such disability benefits at December 29, 2006 determined (a) based on our current costs of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (b) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (c) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries, and (d) applying a discount rate of 5.75% per annum. | |
(10) | Reflects the actuarial present value of Mr. Hockema’s disability benefits at December 29, 2006 determined (a) assuming full disability at December 29, 2006, (b) assuming mortality according to the RP-2000 Disabled Retiree mortality table published by the Society of Actuaries, and (c) applying a discount rate of 5.75% per annum. | |
(11) | Under Mr. Hockema’s employment agreement, if Mr. Hockema’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his life insurance benefits for two years, or, if such termination occurs within two years following a change in control, three years, commencing |
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on the date of such termination. Mr. Hockema has declined life insurance coverage. Accordingly, we would not be obligated to provide Mr. Hockema with life insurance benefits for the applicable benefit continuation period. | ||
(12) | No life insurance benefit would have been payable assuming Mr. Hockema’s death occurred on December 29, 2006 other than while traveling on company-related business. However, we maintain a travel and accidental death policy for certain employees, including Mr. Hockema, that would provide a $1,000,000 death benefit payable to Mr. Hockema’s estate if his death had occurred during company-related travel. | |
(13) | Under Mr. Hockema’s employment agreement, if any payments to Mr. Hockema would be subject to federal excise tax by reason of being considered contingent on a change in control, we must pay to Mr. Hockema an additional amount such that, after satisfaction of all tax obligations imposed on such payments, Mr. Hockema retains an amount equal to such federal excise tax. The table reflects an estimate of the additional amount that we would have been obligated to pay Mr. Hockema if his employment had been terminated on December 29, 2006 by us without cause or by him with good reason following a change in control on such date. | |
(14) | Reflects the aggregate market value of the shares of restricted stock for which restrictions would have lapsed early due to Mr. Hockema’s termination, determined based on a per share price of $55.98, the reported closing price for our common stock on the Nasdaq Global Market on December 29, 2006, which was the last trading day of 2006. The restrictions on all shares of restricted stock that were held by Mr. Hockema on December 29, 2006 will lapse on July 6, 2009 or earlier if his employment terminates as a result of his death, disability or retirement, his employment is terminated by us without cause or his employment is voluntarily terminated by him for good reason, or if there is a change in control. | |
(15) | Under our New Restoration Plan, Mr. Hockema is entitled to a distribution of his account balance six months following his termination, except that he will forfeit the entire amount of matching and fixed rate contributions made by us to his account if he is terminated for cause. In addition, under our Savings Plan, upon termination of employment, Mr. Hockema is eligible to receive a distribution of his vested balance under the plan. Such balance is not reflected in this table. |
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JOSEPH P. BELLINO | ||||||||||||||||||||||||||||
Circumstances of Termination | ||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||
by Us | ||||||||||||||||||||||||||||
Without | ||||||||||||||||||||||||||||
Termination | Cause or by | |||||||||||||||||||||||||||
by Us | the Named | |||||||||||||||||||||||||||
Without | Executive | |||||||||||||||||||||||||||
Cause or by | Officer with | |||||||||||||||||||||||||||
Voluntary | the Named | Good | ||||||||||||||||||||||||||
Termination | Executive | Reason | ||||||||||||||||||||||||||
by Named | Termination | Officer with | Following a | |||||||||||||||||||||||||
Payments and | Executive | by Us for | Good | Change in | Normal | |||||||||||||||||||||||
Benefits | Officer | Cause | Reason | Control | Retirement | Disability | Death | |||||||||||||||||||||
Payment of earned but unpaid: | ||||||||||||||||||||||||||||
Base salary(1) | — | — | — | — | — | — | — | |||||||||||||||||||||
Long-term incentive(2) | — | — | — | — | — | — | — | |||||||||||||||||||||
Short-term incentive(3) | — | — | $ | 174,041 | $ | 174,041 | $ | 174,041 | $ | 174,041 | $ | 174,041 | ||||||||||||||||
Retention payment(4) | — | — | — | — | — | — | — | |||||||||||||||||||||
Vacation(5) | $ | 26,923 | $ | 26,923 | $ | 26,923 | $ | 26,923 | $ | 26,923 | $ | 26,923 | $ | 26,923 | ||||||||||||||
Other Benefits: | ||||||||||||||||||||||||||||
Lump sum payment | — | — | $ | 1,050,000 | (6) | $ | 1,575,000 | (7) | — | — | — | |||||||||||||||||
Healthcare benefits | — | — | $ | 29,880 | (8) | $ | 45,474 | (8) | — | — | — | |||||||||||||||||
Disability benefits | — | — | $ | 14,996 | (9) | $ | 21,951 | (9) | — | $ | 1,057,633 | (10) | — | |||||||||||||||
Life insurance | — | — | — | (11) | — | (11) | — | — | — | (12) | ||||||||||||||||||
Perquisites and other personal benefits | — | — | — | — | — | — | — | |||||||||||||||||||||
Taxgross-up(13) | — | — | — | $ | 1,024,403 | — | — | — | ||||||||||||||||||||
Acceleration of Stock Awards: | ||||||||||||||||||||||||||||
Market value of stock vesting on termination (14) | — | — | $ | 839,700 | $ | 839,700 | $ | 839,700 | $ | 839,700 | $ | 839,700 | ||||||||||||||||
Distribution of New Restoration Plan Balance: | ||||||||||||||||||||||||||||
Amount of Distribution(15) | — | — | — | — | — | — | — | |||||||||||||||||||||
Total | $ | 26,923 | $ | 26,923 | $ | 2,135,540 | $ | 3,707,492 | $ | 1,040,664 | $ | 2,098,297 | $ | 1,040,664 |
(1) | Assumes that there is no earned but unpaid base salary at the time of termination. | |
(2) | Mr. Bellino, who joined us in May 2006, did not participate in our Chapter 11 Long-Term Incentive Plan. | |
(3) | Under our 2006 Short-Term Incentive Plan, Mr. Bellino’s target award for 2006 was $175,000, but his award could have ranged from a threshold of $87,500 to a maximum of $525,000, or could have been zero if the threshold performance was not achieved. Pursuant to Mr. Bellino’s employment agreement, we must pay Mr. Bellino or his estate any earned but unpaid short-term incentive unless he is terminated by us for cause or he voluntarily terminates his employment other than for good reason. Under Mr. Bellino’s employment agreement, if his employment had terminated during 2006 but prior to December 31, 2006, Mr. Bellino’s target award for 2006 under our 2006 Short-Term Incentive Plan would have been prorated for the actual number of days of Mr. Bellino’s employment in 2006 and Mr. Bellino would have been entitled to payment of such amount, without any increase or reduction that would normally be considered with his award, unless his employment had been terminated by us for cause or had been voluntarily terminated by him other than for good reason; accordingly, assuming his employment had terminated on December 29, 2006, the last business day of 2006, we would have been obligated to pay Mr. Bellino $174,041 unless his employment had been terminated by us for cause or had been voluntarily terminated by him other than for good reason. Under Mr. Bellino’s employment agreement, if his employment had terminated on December 31, 2006, the last day of our 2006 fiscal year, Mr. Bellino would have been entitled to full payment of his award under the 2006 Short-Term Incentive Plan ($288,892) unless his employment had been terminated by us for cause or was voluntarily terminated by him other than for good reason. | |
(4) | Mr. Bellino, who joined us in May 2006, did not participate in our Chapter 11 Retention Plan. | |
(5) | Assumes that Mr. Bellino used all of his 2006 vacation and that he has four weeks of accrued vacation for 2007. |
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(6) | Under Mr. Bellino’s employment agreement, if Mr. Bellino’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must make a lump-sum payment to Mr. Bellino in an amount equal to two times the sum of his base salary and target annual bonus opportunity for the fiscal year in which such termination occurs. | |
(7) | Under Mr. Bellino’s employment agreement, if Mr. Bellino’s employment is terminated by us without cause or is voluntarily terminated by him for good reason within two years following a change in control, we must make a lump-sum payment to Mr. Bellino in an amount equal to three times the sum of his base salary and target annual bonus. | |
(8) | Under Mr. Bellino’s employment agreement, if Mr. Bellino’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his medical and dental benefits for two years, or, if such termination occurs within two years following a change in control, three years, commencing on the date of such termination. The table reflects the present value of such medical and dental benefits at December 29, 2006 determined (a) assuming family coverage in a point of service medical plan and a basic dental plan, (b) based on current COBRA coverage rates for 2007 and assuming a 9% increase in the cost of medical coverage for 2008 as compared to 2007, an 8.5% increase in the cost of medical coverage for 2009 as compared to 2008 and a 6% increase in the cost of dental coverage for 2008 as compared to 2007 and for 2009 as compared to 2008, (c) assuming Mr. Bellino pays premiums for such coverage throughout the applicable benefit continuation period in the same manner as if he were an active employee, and (d) applying a discount rate of 5.75% per annum. | |
(9) | Under Mr. Bellino’s employment agreement, if Mr. Bellino’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his disability benefits for two years, or, if such termination occurs within two years following a change in control, three years, commencing on the date of such termination. The table reflects the present value of such disability benefits at December 29, 2006 determined (a) based on our current costs of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (b) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (c) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries, and (d) applying a discount rate of 5.75% per annum. | |
(10) | Reflects the present value of Mr. Bellino’s disability benefits at December 29, 2006 determined (a) assuming full disability at December 29, 2006, (b) assuming mortality according to the RP-2000 Disabled Retiree mortality table published by the Society of Actuaries, and (c) applying a discount rate of 5.75% per annum. | |
(11) | Under Mr. Bellino’s employment agreement, if Mr. Bellino’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his life insurance benefits for two years, or, if such termination occurs within two years following a change in control, three years, commencing on the date of such termination. Mr. Bellino has declined life insurance coverage. Accordingly, we would not be obligated to provide Mr. Bellino with life insurance benefits for the applicable benefit continuation period. | |
(12) | No life insurance benefit would have been payable assuming Mr. Bellino’s death occurred on December 29, 2006 other than while traveling on company-related business. However, we maintain a travel and accidental death policy for certain employees, including Mr. Bellino, that would provide a $1,000,000 death benefit payable to Mr. Bellino’s estate if his death had occurred during company-related travel. | |
(13) | Under Mr. Bellino’s employment agreement, if any payments to Mr. Bellino would be subject to federal excise tax by reason of being considered contingent on a change in control, we must pay to Mr. Bellino an additional amount such that, after satisfaction of all tax obligations imposed on such payments, Mr. Bellino retains an amount equal to such federal excise tax. The table reflects an estimate of the additional amount that we would have been obligated to pay Mr. Bellino if his employment had been terminated on December 29, 2006 by us without cause or by him with good reason following a change in control on such date. | |
(14) | Reflects the aggregate market value of the shares of restricted stock for which restrictions would have lapsed early due to Mr. Bellino’s termination, determined based on a per share price of $55.98, the reported closing price for our common stock on the Nasdaq Global Market on December 29, 2006, which was the last trading day of 2006. The restrictions on all shares of restricted stock that were held by Mr. Bellino on December 29, 2006 will lapse on July 6, 2009 or earlier if his employment terminates as a result of his death, disability or |
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retirement, his employment is terminated by us without cause or his employment is voluntarily terminated by him for good reason, or if there is a change in control. |
(15) | Mr. Bellino, who joined us in May 2006, did not have a balance in the New Restoration Plan on December 29, 2006. Under our Savings Plan, upon termination of employment, Mr. Bellino is eligible to receive a distribution of his vested balance under the plan. Such balance is not reflected in this table. |
JOHN BARNESON | ||||||||||||||||||||||||||||
Circumstances of Termination | ||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||
by Us | ||||||||||||||||||||||||||||
Without | ||||||||||||||||||||||||||||
Termination | Cause or by | |||||||||||||||||||||||||||
by Us | the Named | |||||||||||||||||||||||||||
Without | Executive | |||||||||||||||||||||||||||
Cause or by | Officer with | |||||||||||||||||||||||||||
Voluntary | the Named | Good | ||||||||||||||||||||||||||
Termination | Executive | Reason | ||||||||||||||||||||||||||
by Named | Termination | Officer with | Following a | |||||||||||||||||||||||||
Payments and | Executive | by Us for | Good | Change in | Normal | |||||||||||||||||||||||
Benefits | Officer | Cause | Reason | Control | Retirement | Disability | Death | |||||||||||||||||||||
Payment of earned but unpaid: | ||||||||||||||||||||||||||||
Base salary(1) | — | — | — | — | — | — | — | |||||||||||||||||||||
Long-term incentive(2) | — | — | $ | 346,938 | $ | 346,938 | $ | 346,938 | $ | 346,938 | $ | 346,938 | ||||||||||||||||
Short-term incentive(3) | — | — | $ | 206,864 | $ | 125,310 | $ | 206,864 | $ | 206,864 | $ | 206,864 | ||||||||||||||||
Retention payment(4) | — | — | $ | 125,000 | $ | 125,000 | $ | 125,000 | $ | 125,000 | $ | 125,000 | ||||||||||||||||
Vacation(5) | $ | 26,923 | $ | 26,923 | $ | 26,923 | $ | 26,923 | $ | 26,923 | $ | 26,923 | $ | 26,923 | ||||||||||||||
Other Benefits: | ||||||||||||||||||||||||||||
Lump sum payment | — | — | $ | 560,000 | (6) | $ | 1,218,000 | (7) | — | — | — | |||||||||||||||||
Healthcare benefits | — | — | $ | 29,880 | (8) | $ | 45,474 | (8) | — | — | — | |||||||||||||||||
Disability benefits | — | — | $ | 11,997 | (9) | $ | 17,561 | (9) | — | $ | 846,107 | (10) | — | |||||||||||||||
Life insurance | — | — | $ | 5,029 | (11) | $ | 7,756 | (11) | — | — | $ | 600,000 | (12) | |||||||||||||||
Perquisites and other personal benefits | — | — | — | $ | 44,532 | (13) | — | — | — | |||||||||||||||||||
Taxgross-up(14) | — | — | — | $ | 1,285,172 | — | — | — | ||||||||||||||||||||
Acceleration of Stock Awards: | ||||||||||||||||||||||||||||
Market value of stock vesting on termination (15) | — | — | $ | 2,687,040 | $ | 2,687,040 | $ | 2,687,040 | $ | 2,687,040 | $ | 2,687,040 | ||||||||||||||||
Distribution of New Restoration Plan Balance: | ||||||||||||||||||||||||||||
Amount of Distribution (16) | $ | 934,341 | — | $ | 934,341 | $ | 934,341 | $ | 934,341 | $ | 934,341 | $ | 934,341 | |||||||||||||||
Total | $ | 961,264 | $ | 26,923 | $ | 4,934,012 | $ | 6,864,047 | $ | 4,327,106 | $ | 5,173,213 | $ | 4,927,106 |
(1) | Assumes that there is no earned but unpaid base salary at the time of termination. | |
(2) | Under our Chapter 11 Long-Term Incentive Plan, we must pay Mr. Barneson or his estate the remaining portion of the total amount accrued by Mr. Barneson thereunder on July 6, 2007 unless he is terminated by us for cause or he voluntarily terminates his employment (other than at normal retirement) prior to that date. The $346,938 amount reflected in the table is based on computations made in connection with the 2006 payments under the Chapter 11 Long-Term Incentive Plan and assumes no decrease in the number of plan participants or adjustments to the cost reduction pool prior to July 6, 2007. | |
(3) | Under our 2006 Short-Term Incentive Plan, Mr. Barneson’s target award for 2006 was $126,000, but his award could have ranged from a threshold of $63,000 to a maximum of $378,000, or could have been zero if the threshold performance is not achieved. Mr. Barneson’s award under our 2006 Short-Term Incentive Plan was determined in March 2007 to be $208,003. Under the 2006 Short-Term Incentive Plan, in general, Mr. Barneson would have forfeited his award if he had voluntarily terminated his employment other than for good reason prior to December 31, 2006 or if he had been terminated by us for cause. However, Mr. Barneson would have been entitled to a pro rata award under the 2006 Short-Term Incentive Plan if his employment had terminated during 2006 but prior to December 31, 2006 and his employment had been terminated as a result of death, disability, normal retirement or full early retirement (position elimination), had been involuntarily terminated by us without cause or had been voluntarily terminated by him for good reason. Accordingly, if |
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Mr. Barneson’s employment had terminated on December 29, 2006, the last business day of 2006, and his employment had been terminated as a result of death, disability, normal retirement or full early retirement (position elimination), had been involuntarily terminated by us without cause or had been voluntarily terminated by him for good reason, we would have been obligated to pay Mr. Barneson $206,864. Under Mr. Barneson’s Change in Control Agreement, if his employment had been terminated by us without cause or by him for good reason within the period commencing 90 days prior to a change in control and ending two years following a change in control and such termination occurred during 2006 other than on December 31, 2006, Mr. Barneson’s target award for 2006 under our 2006 Short-Term Incentive Plan would have been prorated for the actual number of days of Mr. Barneson’s employment in 2006 and Mr. Barneson would have been entitled to payment of such amount; accordingly, assuming his employment had been so terminated on December 29, 2006, we would have been obligated to pay Mr. Barneson $125,310. If Mr. Barneson’s employment had been terminated (other than by us for cause) on December 31, 2006, the last day of our 2006 fiscal year, Mr. Barneson would have been entitled to full payment of his award ($208,003) under the 2006 Short-Term Incentive Plan. | ||
(4) | Under our Chapter 11 Retention Plan, we must pay Mr. Barneson or his estate $125,000 on July 6, 2007 unless his employment is terminated by us for cause or is voluntarily terminated by him (other than at normal retirement) prior to that date. | |
(5) | Assumes that Mr. Barneson used all of his 2006 vacation and that he has five weeks of accrued vacation for 2007. | |
(6) | Under Mr. Barneson’s Severance Agreement, if Mr. Barneson’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must make a lump-sum payment to Mr. Barneson in an amount equal to two times his base salary. | |
(7) | Under Mr. Barneson’s Change in Control Agreement, if Mr. Barneson’s employment is terminated by us without cause or is voluntarily terminated by him for good reason within the period beginning 90 days prior to a change in control and ending two years following a change in control, Mr. Barneson is entitled to a lump-sum payment equal to three times the sum of his base salary and most recent short-term incentive target. | |
(8) | If Mr. Barneson’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his medical and dental benefits for two years under his Severance Agreement, or, if such termination occurs within the period commencing 90 days prior to a change in control and ending two years following a change in control, for three years under his Change in Control Agreement, commencing on the date of such termination. The table reflects the present value of such medical and dental benefits at December 29, 2006 determined (a) assuming family coverage in a point of service medical plan and a basic dental plan, (b) based on current COBRA coverage rates for 2007 and assuming a 9% increase in the cost of medical coverage for 2008 as compared to 2007, an 8.5% increase in the cost of medical coverage for 2009 as compared to 2008 and a 6% increase in the cost of dental coverage for 2008 as compared to 2007 and for 2009 as compared to 2008, (c) assuming Mr. Barneson pays premiums for such coverage throughout the applicable benefit continuation period in the same manner as if he were an active employee, and (d) applying a discount rate of 5.75% per annum. | |
(9) | If Mr. Barneson’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his disability benefits for two years under his Severance Agreement, or, if such termination occurs within the period commencing 90 days prior to a change in control and ending two years following a change in control, for three years under his Change in Control Agreement, commencing on the date of such termination. The table reflects the present value of such disability benefits at December 29, 2006 determined (a) based on our current costs of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (b) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (c) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries, and (d) applying a discount rate of 5.75% per annum. | |
(10) | Reflects the present value of Mr. Barneson’s disability benefits at December 29, 2006 determined (a) assuming full disability at December 29, 2006, (b) assuming mortality according to the RP-2000 Disabled Retiree mortality table published by the Society of Actuaries, and (c) applying a discount rate of 5.75% per annum. |
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(11) | If Mr. Barneson’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his life insurance benefits for two years under his Severance Agreement, or, if such termination occurs within the period commencing 90 days prior to a change in control and ending two years following a change in control, for three years under his Change in Control Agreement, commencing on the date of such termination. The table reflects the present value of such life insurance benefits at December 29, 2006 determined (a) assuming his current election of the maximum available coverage, (b) based on our current cost of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (c) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (d) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries, and (e) applying a discount rate of 5.75% per annum. | |
(12) | Reflects the life insurance benefit payable assuming Mr. Barneson’s death occurred on December 29, 2006 other than while traveling on company-related business. We maintain a travel and accidental death policy for certain employees, including Mr. Barneson, that would provide an additional $1,000,000 death benefit payable to Mr. Barneson’s estate if his death had occurred during company-related travel. | |
(13) | Under Mr. Barneson’s Change in Control Agreement, if Mr. Barneson’s employment is terminated by us without cause or is voluntarily terminated by him for good reason within the period commencing 90 days prior to a change in control and ending two years following a change in control, we must continue his perquisites for three years commencing on the date of such termination. The table reflects the estimated cost to us of continuing Mr. Barneson’s perquisites for such three-year period as follows: club membership dues, $13,155; and vehicle allowance, $31,377. Such amounts have been estimated by multiplying the cost of Mr. Barneson’s perquisites for 2006 by three. | |
(14) | Under Mr. Barneson’s Change in Control Agreement, in general, if any payments to Mr. Barneson would be subject to federal excise tax or any similar state or local tax by reason of being considered contingent on a change in control, we must pay to Mr. Barneson an additional amount such that, after satisfaction of all tax obligations imposed on such payments, Mr. Barneson retains an amount equal to the federal excise tax or similar state or local tax imposed on such payments. The table reflects an estimate of such additional amount that we would have been obligated to pay Mr. Barneson if his employment had been terminated on December 29, 2006 by us without cause or by him for good reason following a change in control on such date. | |
(15) | Reflects the aggregate market value of the shares of restricted stock for which restrictions would have lapsed early due to Mr. Barneson’s termination, determined based on a per share price of $55.98, the reported closing price for our common stock on the Nasdaq Global Market on December 29, 2006, which was the last trading day of 2006. The restrictions on all shares of restricted stock that were held by Mr. Barneson on December 29, 2006 will lapse on July 6, 2009 or earlier if his employment terminates as a result of his death or disability, his employment is terminated by us without cause or his employment is voluntarily terminated by him for good reason, or if there is a change in control. | |
(16) | Under our New Restoration Plan, Mr. Barneson is entitled to a distribution of his account balance six months following his termination, except that he will forfeit the entire amount of matching and fixed rate contributions made by us to his account if he is terminated for cause. In addition, under our Savings Plan, upon termination of employment, Mr. Barneson is eligible to receive a distribution of his vested balance under the plan. Such balance is not reflected in this table. |
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JOHN M. DONNAN | ||||||||||||||||||||||||||||
Circumstances of Termination | ||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||
by Us | ||||||||||||||||||||||||||||
Without | ||||||||||||||||||||||||||||
Cause or by | ||||||||||||||||||||||||||||
Termination | the Named | |||||||||||||||||||||||||||
by Us | Executive | |||||||||||||||||||||||||||
Without | Officer with | |||||||||||||||||||||||||||
Voluntary | Cause or by | Good | ||||||||||||||||||||||||||
Termination | the Named | Reason | ||||||||||||||||||||||||||
by Named | Termination | Executive | Following a | |||||||||||||||||||||||||
Payments and | Executive | by Us for | Officer with | Change in | Normal | |||||||||||||||||||||||
Benefits | Officer | Cause | Good Reason | Control | Retirement | Disability | Death | |||||||||||||||||||||
Payment of earned but unpaid: | ||||||||||||||||||||||||||||
Base salary(1) | — | — | — | — | — | — | — | |||||||||||||||||||||
Long-term incentive(2) | — | — | $ | 104,554 | $ | 104,554 | $ | 104,554 | $ | 104,554 | $ | 104,554 | ||||||||||||||||
Short-term incentive(3) | — | — | $ | 192,087 | $ | 116,359 | $ | 192,087 | $ | 192,087 | $ | 192,087 | ||||||||||||||||
Retention payment(4) | — | — | — | — | — | — | — | |||||||||||||||||||||
Vacation(5) | $ | 20,000 | $ | 20,000 | $ | 20,000 | $ | 20,000 | $ | 20,000 | $ | 20,000 | $ | 20,000 | ||||||||||||||
Other Benefits: | ||||||||||||||||||||||||||||
Lump sum payment | — | — | $ | 260,000 | (6) | $ | 754,000 | (7) | — | — | — | |||||||||||||||||
Healthcare benefits | — | — | $ | 14,727 | (8) | $ | 29,880 | (8) | — | — | — | |||||||||||||||||
Disability benefits | — | — | $ | 2,521 | (9) | $ | 5,222 | (9) | — | $ | 1,461,148 | (10) | — | |||||||||||||||
Life insurance | — | — | $ | 943 | (11) | $ | 1,898 | (11) | — | — | $ | 600,000 | (12) | |||||||||||||||
Perquisites and other personal benefits | — | — | — | $ | 21,910 | (13) | — | — | — | |||||||||||||||||||
Taxgross-up(14) | — | — | — | $ | 969,722 | — | — | — | ||||||||||||||||||||
Acceleration of Stock Awards: | ||||||||||||||||||||||||||||
Market value of stock vesting on termination(15) | — | — | $ | 2,519,100 | $ | 2,519,100 | $ | 2,519,100 | $ | 2,519,100 | $ | 2,519,100 | ||||||||||||||||
Distribution of New Restoration Plan Balance: | ||||||||||||||||||||||||||||
Amount of Distribution(16) | $ | 72,018 | — | $ | 72,018 | $ | 72,018 | $ | 72,018 | $ | 72,018 | $ | 72,018 | |||||||||||||||
Total | $ | 92,018 | $ | 20,000 | $ | 3,185,950 | $ | 4,614,673 | $ | 2,907,759 | $ | 4,368,907 | $ | 3,507,759 |
(1) | Assumes that there is no earned but unpaid base salary at the time of termination. | |
(2) | Under our Chapter 11 Long-Term Incentive Plan, we must pay Mr. Donnan or his estate the remaining portion of the total amount accrued by Mr. Donnan thereunder on July 6, 2007 unless he is terminated by us for cause or he voluntarily terminates his employment (other than at normal retirement) prior to that date. The $104,554 amount reflected in the table is based on computations made in connection with the 2006 payments under the Chapter 11 Long-Term Incentive Plan and assumes no decrease in the number of plan participants or adjustments to the cost reduction pool prior to July 6, 2007. | |
(3) | Under our 2006 Short-Term Incentive Plan, Mr. Donnan’s target award for 2006 was $117,000, but his award could have ranged from a threshold of $58,500 to a maximum of $351,000, or could have been zero if the threshold performance was not achieved. Mr. Donnan’s award under our 2006 Short-Term Incentive Plan was determined in March 2007 to be $193,145. Under the 2006 Short-Term Incentive Plan, in general, Mr. Donnan would have forfeited his award if he had voluntarily terminated his employment other than for good reason prior to December 31, 2006 or if he had been terminated by us for cause. However, Mr. Donnan would have been entitled to a pro rata award under the 2006 Short-Term Incentive Plan if his employment had terminated during 2006 but prior to December 31, 2006 and his employment had been terminated as a result of death, disability, normal retirement or full early retirement (position elimination), had been involuntarily terminated by us without cause or had been voluntarily terminated by him for good reason. Accordingly, if Mr. Donnan’s employment had terminated on December 29, 2006, the last business day of 2006, and his employment had been terminated as a result of death, disability, normal retirement or full early retirement (position elimination), had been involuntarily terminated by us without cause or had been voluntarily terminated by him for good reason, we would have been obligated to pay Mr. Donnan $192,087. Under Mr. Donnan’s Change in Control Agreement, if his employment had been terminated by us without cause or by him for good reason within the period commencing 90 days prior to a change in control and ending two years following a change in |
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control and such termination occurred during 2006 other than on December 31, 2006, Mr. Donnan’s target award for 2006 under our 2006 Short-Term Incentive Plan would have been prorated for the actual number of days of Mr. Donnan’s employment in 2006 and Mr. Donnan would have been entitled to payment of such amount; accordingly, assuming his employment had been so terminated on December 29, 2006, we would have been obligated to pay Mr. Donnan $116,359. If Mr. Donnan’s employment had been terminated (other than by us for cause) on December 31, 2006, the last day of our 2006 fiscal year, Mr. Donnan would have been entitled to full payment of his award ($193,145) under the 2006 Short-Term Incentive Plan. | ||
(4) | Mr. Donnan is not entitled to any further payments under our Chapter 11 Retention Plan. | |
(5) | Assumes that Mr. Donnan used all of his 2006 vacation and that he has four weeks of accrued vacation for 2007. | |
(6) | Under Mr. Donnan’s Severance Agreement, if Mr. Donnan’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must make a lump-sum payment to Mr. Donnan in an amount equal to his base salary. | |
(7) | Under Mr. Donnan’s Change in Control Agreement, if Mr. Donnan’s employment is terminated by us without cause or is voluntarily terminated by him for good reason within the period beginning 90 days prior to a change in control and ending two years following a change in control, Mr. Donnan is entitled to a lump-sum payment equal to two times the sum of his base salary and most recent short-term incentive target. | |
(8) | If Mr. Donnan’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his medical and dental benefits for one year under his Severance Agreement, or, if such termination occurs within the period commencing 90 days prior to a change in control and ending two years following a change in control, for two years under his Change in Control Agreement, commencing on the date of such termination. The table reflects the present value of such medical and dental benefits at December 29, 2006 determined (a) assuming family coverage in a point of service medical plan and a basic dental plan, (b) based on current COBRA coverage rates for 2007 and assuming a 9% increase in the cost of medical coverage for 2008 as compared to 2007 and a 6% increase in the cost of dental coverage for 2008 as compared to 2007, (c) assuming Mr. Donnan pays premiums for such coverage throughout the applicable benefit continuation period in the same manner as if he were an active employee, and (d) applying a discount rate of 5.75% per annum. | |
(9) | If Mr. Donnan’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his disability benefits for one year under his Severance Agreement, or, if such termination occurs within the period commencing 90 days prior to a change in control and ending two years following a change in control, for two years under his Change in Control Agreement, commencing on the date of such termination. The table reflects the present value of such disability benefits at December 29, 2006 determined (a) based on our current costs of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (b) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (c) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries, and (d) applying a discount rate of 5.75% per annum. | |
(10) | Reflects the actuarial present value of Mr. Donnan’s disability benefits at December 29, 2006 determined (a) assuming full disability at December 29, 2006, (b) assuming mortality according to the RP-2000 Disabled Retiree mortality table published by the Society of Actuaries, and (c) applying a discount rate of 5.75% per annum. | |
(11) | If Mr. Donnan’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his life insurance benefits for one year under his Severance Agreement, or, if such termination occurs within the period commencing 90 days prior to a change in control and ending two years following a change in control, for two years under his Change in Control Agreement, commencing on the date of such termination. The table reflects the present value of such life insurance benefits at December 29, 2006 determined (a) assuming his current election of the maximum available coverage, (b) based on our current costs of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (c) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (d) assuming mortality according to the RP-2000 Combined |
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Health mortality table published by the Society of Actuaries, and (e) applying a discount rate of 5.75% per annum. | ||
(12) | Reflects the life insurance benefit payable assuming Mr. Donnan’s death occurred on December 29, 2006 other than while traveling on company-related business. We maintain a travel and accidental death policy for certain employees, including Mr. Donnan, that would provide an additional $1,000,000 death benefit payable to Mr. Donnan’s estate if his death had occurred during company-related travel. | |
(13) | Under Mr. Donnan’s Change in Control Agreement, if Mr. Donnan’s employment is terminated by us without cause or is voluntarily terminated by him for good reason within the period commencing 90 days prior to a change in control and ending two years following a change in control, we must continue his perquisites for two years commencing on the date of such termination. The table reflects the estimated cost to us of continuing Mr. Donnan’s perquisites for such two-year period as follows: vehicle allowance, $21,910. Such amount has been estimated by multiplying the cost of Mr. Donnan’s vehicle allowance for 2006 by two. | |
(14) | Under Mr. Donnan’s Change in Control Agreement, in general, if any payments to Mr. Donnan would be subject to federal excise tax or any similar state or local tax by reason of being considered contingent on a change in control, we must pay to Mr. Donnan an additional amount such that, after satisfaction of all tax obligations imposed on such payments, Mr. Donnan retains an amount equal to the federal excise tax or similar state or local tax imposed on such payments. The table reflects an estimate of such additional amount that we would have been obligated to pay Mr. Donnan if his employment had been terminated on December 29, 2006 by us without cause or by him for good reason following a change in control on such date. | |
(15) | Reflects the aggregate market value of the shares of restricted stock for which restrictions would have lapsed early due to Mr. Donnan’s termination, determined based on a per share price of $55.98, the reported closing price for our common stock on the Nasdaq Global Market on December 29, 2006, which was the last trading day of 2006. The restrictions on all shares of restricted stock that were held by Mr. Donnan on December 29, 2006 will lapse on July 6, 2009 or earlier if his employment terminates as a result of his death or disability, his employment is terminated by us without cause or his employment is voluntarily terminated by him for good reason, or if there is a change in control. | |
(16) | Under our New Restoration Plan, Mr. Donnan is entitled to a distribution of his account balance six months following his termination, except that he will forfeit the entire amount of matching and fixed rate contributions made by us to his account if he is terminated for cause. In addition, under our Savings Plan, upon termination of employment, Mr. Donnan is eligible to receive a distribution of his vested balance under the plan. Such balance is not reflected in this table. |
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DANIEL D. MADDOX | ||||||||||||||||||||||||||||
Circumstances of Termination | ||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||
by Us | ||||||||||||||||||||||||||||
Without | ||||||||||||||||||||||||||||
Termination | Cause or by | |||||||||||||||||||||||||||
by Us | the Named | |||||||||||||||||||||||||||
Without | Executive | |||||||||||||||||||||||||||
Cause or by | Officer with | |||||||||||||||||||||||||||
Voluntary | the Named | Good | ||||||||||||||||||||||||||
Termination | Executive | Reason | ||||||||||||||||||||||||||
by Named | Termination | Officer with | Following a | |||||||||||||||||||||||||
Payments and | Executive | by Us for | Good | Change in | Normal | |||||||||||||||||||||||
Benefits | Officer | Cause | Reason | Control(1) | Retirement | Disability | Death | |||||||||||||||||||||
Payment of earned but unpaid: | ||||||||||||||||||||||||||||
Base salary(2) | — | — | — | — | — | — | — | |||||||||||||||||||||
Long-term incentive(3) | — | — | $ | 114,043 | $ | 114,043 | $ | 114,043 | $ | 114,043 | $ | 114,043 | ||||||||||||||||
Short-term incentive(4) | — | — | $ | 123,133 | $ | 74,589 | $ | 123,133 | $ | 123,133 | $ | 123,133 | ||||||||||||||||
Retention payment(5) | — | — | — | — | — | — | — | |||||||||||||||||||||
Vacation(6) | $ | 17,308 | $ | 17,308 | $ | 17,308 | $ | 17,308 | $ | 17,308 | $ | 17,308 | $ | 17,308 | ||||||||||||||
Other Benefits: | ||||||||||||||||||||||||||||
Lump sum payment | — | — | $ | 225,000 | (7) | $ | 600,000 | (8) | — | — | — | |||||||||||||||||
Healthcare benefits | — | — | $ | 14,727 | (9) | $ | 29,880 | (9) | — | — | — | |||||||||||||||||
Disability benefits | — | — | $ | 2,471 | (10) | $ | 5,167 | (10) | — | $ | 1,228,734 | (11) | — | |||||||||||||||
Life insurance | — | — | $ | 1,012 | (12) | $ | 2,036 | (12) | — | — | $ | 600,000 | (13) | |||||||||||||||
Perquisites and other personal benefits | — | — | — | $ | 22,304 | (14) | — | — | — | |||||||||||||||||||
Taxgross-up(15) | — | — | — | $ | (48,924 | ) | — | — | — | |||||||||||||||||||
Acceleration of Stock Awards: | ||||||||||||||||||||||||||||
Market value of stock vesting on termination(16) | — | — | $ | 634,477 | $ | 634,477 | $ | 634,477 | $ | 634,477 | $ | 634,477 | ||||||||||||||||
Distribution of New Restoration Plan Balance: | ||||||||||||||||||||||||||||
Amount of Distribution(17) | $ | 48,140 | — | $ | 48,140 | $ | 48,140 | $ | 48,140 | $ | 48,140 | $ | 48,140 | |||||||||||||||
Total | $ | 65,448 | $ | 17,308 | $ | 1,180,311 | $ | 1,499,020 | $ | 937,101 | $ | 2,165,835 | $ | 1,537,101 |
(1) | Mr. Maddox’s employment agreement, which was to continue until the earlier of a mutually agreed upon termination date and March 31, 2007, provided that, if his employment was terminated (other than by death or disability or by us for cause) upon the conclusion thereof, he would receive benefits under his Change in Control Agreement as if both a change in control had occurred prior to his departure and he was terminating his employment for good reason. In addition, pursuant to Mr. Maddox’s employment agreement, if his employment was terminated (other than by us for cause) upon the conclusion of his employment agreement, the restrictions on his shares of restricted stock would lapse. Mr. Maddox’s employment agreement concluded on April 1, 2007, at which date Mr. Maddox resigned. | |
(2) | Assumes that there is no earned but unpaid base salary at the time of termination. | |
(3) | Under our Chapter 11 Long-Term Incentive Plan, we were obligated to pay Mr. Maddox or his estate the remaining portion of the total amount accrued by Mr. Maddox thereunder on July 6, 2007 unless he was terminated by us for cause or he voluntarily terminated his employment (other than at the conclusion of his employment agreement) prior to that date. The $114,043 amount reflected in the table is based on computations made in connection with the 2006 Chapter 11 Long-Term Incentive Plan and assumes no decrease in the number of plan participants or adjustments to the cost reduction pool prior to July 6, 2007. | |
(4) | Under our 2006 Short-Term Incentive Plan, Mr. Maddox’s target award for 2006 was $75,000, but his award could have ranged from a threshold of $37,500 to a maximum of $225,000, or could have been zero if the threshold performance was not achieved. Mr. Maddox’s award under our 2006 Short-Term Incentive Plan was determined in March 2007 to be $123,811. Under the 2006 Short-Term Incentive Plan, in general, Mr. Maddox would have forfeited his award if he had voluntarily terminated his employment other than for good reason prior to December 31, 2006 or if he had been terminated by us for cause. However, Mr. Maddox would have been entitled to a pro rata award under the 2006 Short-term Incentive Plan if his employment had been |
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terminated as a result of death, disability, normal retirement or full early retirement (position elimination), had been involuntarily terminated by us without cause or had been voluntarily terminated by him for good reason. Accordingly, if Mr. Maddox’s employment had terminated on December 29, 2006, the last business day of 2006, and his employment had been terminated as a result of death, disability, normal retirement or full early retirement (position elimination), had been involuntarily terminated by us without cause or had been voluntarily terminated by him with good reason, we would have been obligated to pay Mr. Maddox $123,133. Under Mr. Maddox’s Change in Control Agreement, if his employment had been terminated by us without cause or by him for good reason within the period commencing 90 days prior to a change in control and ending two years following a change in control and such termination occurred during 2006 other than on December 31, 2006, Mr. Maddox’s target award for 2006 under our 2006 Short-Term Incentive Plan would have been prorated for the actual number of days of Mr. Maddox’s employment in 2006 and Mr. Maddox would have been entitled to payment of such amount; accordingly, assuming his employment had been so terminated on December 29, 2006, we would have been obligated to pay Mr. Maddox $74,589. If Mr. Maddox’s employment had been terminated (other than by us for cause) on December 31, 2006, the last day of our 2006 fiscal year, Mr. Maddox would have been entitled to full payment of his award ($123,811) under the 2006 Short-Term Incentive Plan. | ||
(5) | Mr. Maddox is not entitled to any further payments under our Chapter 11 Retention Plan. | |
(6) | Assumes that Mr. Maddox used all of his 2006 vacation and that he has four weeks of accrued vacation for 2007. | |
(7) | Under Mr. Maddox’s Severance Agreement, if Mr. Maddox’s employment had been terminated by us without cause or had been voluntarily terminated by him for good reason, we would have been obligated to make a lump-sum payment to Mr. Maddox in an amount equal to his base salary. | |
(8) | Under Mr. Maddox’s Change in Control Agreement, if Mr. Maddox’s employment had been terminated by us without cause or had been voluntarily terminated by him for good reason within the period beginning 90 days prior to a change in control and ending two years following a change in control, Mr. Maddox would have been entitled to a lump-sum payment equal to two times the sum of his base salary and most recent short-term incentive target. | |
(9) | If Mr. Maddox’s employment had been terminated by us without cause or had been voluntarily terminated by him for good reason, we would have been obligated to continue his medical and dental benefits for one year under his Severance Agreement, or, if such termination had occurred within the period commencing 90 days prior to a change in control and ending two years following a change in control, for two years under his Change in Control Agreement, commencing on the date of such termination. The table reflects the present value of such medical and dental benefits at December 29, 2006 determined (a) assuming family coverage in a point of service medical plan and a basic dental plan, (b) based on current COBRA coverage rates for 2007 and assuming a 9% increase in the cost of medical coverage for 2008 as compared to 2007 and a 6% increase in the cost of dental coverage for 2008 as compared to 2007, (c) assuming Mr. Maddox pays premiums for such coverage throughout the applicable benefit continuation period in the same manner as if he were an active employee, and (d) applying a discount rate of 5.75% per annum. | |
(10) | If Mr. Maddox’s employment had been terminated by us without cause or had been voluntarily terminated by him for good reason, we would have been obligated to continue his disability benefits for one year under his Severance Agreement, or, if such termination had occurred within the period commencing 90 days prior to a change in control and ending two years following a change in control, for two years under his Change in Control Agreement, commencing on the date of such termination. The table reflects the present value of such disability benefits at December 29, 2006 determined (a) based on our current costs of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (b) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (c) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries, and (d) applying a discount rate of 5.75% per annum. | |
(11) | Reflects the present value of Mr. Maddox’s disability benefits at December 29, 2006 determined (a) assuming full disability at December 29, 2006, (b) assuming mortality according to the RP-2000 Disabled Retiree mortality table published by the Society of Actuaries, and (c) applying a discount rate of 5.75% per annum. |
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(12) | If Mr. Maddox’s employment had been terminated by us without cause or had been voluntarily terminated by him for good reason, we would have been obligated to continue his life insurance benefits for one year under his Severance Agreement, or, if such termination occurred within the period commencing 90 days prior to a change in control and ending two years following a change in control, for two years under his Change in Control Agreement, commencing on the date of such termination. The table reflects the present value of such life insurance benefits at December 29, 2006 determined (a) assuming his current election of the maximum available coverage, (b) based on our current costs of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (c) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (d) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries, and (e) applying a discount rate of 5.75% per annum. | |
(13) | Reflects the life insurance benefit payable assuming Mr. Maddox’s death occurred on December 29, 2006 other than while traveling on company-related business. We maintain a travel and accidental death policy for certain employees, including Mr. Maddox, that would provide an additional $1,000,000 death benefit payable to Mr. Maddox’s estate if his death had occurred during company-related travel. | |
(14) | Under Mr. Maddox’s Change in Control Agreement, if Mr. Maddox’s employment had been terminated by us without cause or had been voluntarily terminated by him for good reason within the period commencing 90 days prior to a change in control and ending two years following a change in control, we would have been obligated to continue his perquisites for two years commencing on the date of such termination. The table reflects the estimated cost to us of continuing Mr. Maddox’s perquisites for such two-year period as follows: vehicle allowance, $22,304. Such amount has been estimated by multiplying the cost of Mr. Maddox’s vehicle allowance for 2006 by two. | |
(15) | Under Mr. Maddox’s Change in Control Agreement, in general, if any payments to Mr. Maddox would have been subject to federal excise tax or any similar state or local tax by reason of being considered contingent on a change in control, we would have been obligated to pay to Mr. Maddox an additional amount such that, after satisfaction of all tax obligations imposed on such payments, Mr. Maddox retained an amount equal to the federal excise tax or similar state or local tax imposed on such payments. However, if no such federal excise tax or similar state or local tax would have applied if the aggregate payments to Mr. Maddox had been reduced by 5%, then the aggregate payments to Mr. Maddox would have been reduced by the amount necessary to avoid application of such federal excise tax or similar state or local tax. The table reflects an estimate of the amount by which aggregate payments to Mr. Maddox would have been reduced in accordance with the terms of his Change in Control Agreement if his employment had been terminated on December 29, 2006 by us without cause or by him for good reason following a change in control on such date. | |
(16) | Reflects the aggregate market value of the shares of restricted stock for which restrictions would have lapsed early due to Mr. Maddox’s termination, determined based on a per share price of $55.98, the reported closing price for our common stock on the Nasdaq Global Market on December 29, 2006, which was the last trading day of 2006. The restrictions on all shares of restricted stock that were held by Mr. Maddox on December 29, 2006 lapsed effective April 1, 2007 upon his resignation at the conclusion of his employment agreement. | |
(17) | Under our New Restoration Plan, Mr. Maddox is entitled to a distribution of his account balance six months following his termination, except that he will forfeit the entire amount of matching and fixed rate contributions made by us to his account if he is terminated for cause. In addition, under our Savings Plan, upon termination of employment, Mr. Maddox is eligible to receive a distribution of his vested balance under the plan. Such balance is not reflected in this table. |
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Fees Earned or | All Other | |||||||||||||||
Name | Paid in Cash | Stock Awards(1) | Compensation(2) | Total | ||||||||||||
George Becker(3) | $ | 33,000 | (4) | $ | 12,198 | $ | 750 | (5) | $ | 45,948 | ||||||
Carl B. Frankel | $ | 35,250 | (4) | $ | 12,198 | $ | 6,750 | (5) | $ | 54,198 | ||||||
Teresa A. Hopp | $ | 48,250 | (4) | $ | 12,198 | $ | 9,000 | (5) | $ | 69,448 | ||||||
William F. Murdy | $ | 42,500 | (4) | $ | 12,198 | $ | 13,500 | (5) | $ | 68,198 | ||||||
Alfred E. Osborne, Jr. | $ | 53,250 | $ | 12,198 | $ | 6,750 | (5) | $ | 72,198 | |||||||
Georganne C. Proctor | $ | 39,750 | (4) | $ | 12,198 | $ | 12,750 | (5) | $ | 64,698 | ||||||
Jack Quinn | $ | 38,250 | (4) | $ | 12,198 | $ | 12,000 | (5) | $ | 62,448 | ||||||
Thomas M. Van Leeuwen | $ | 38,250 | (4) | $ | 12,198 | $ | 8,250 | (5) | $ | 58,698 | ||||||
Brett E. Wilcox | $ | 38,250 | (4) | $ | 12,198 | $ | 9,000 | (5) | $ | 59,448 |
(1) | Reflects the value of restricted stock awards granted to non-employee directors under our Equity Incentive Plan in connection with our emergence from chapter 11 bankruptcy based on the compensation cost of the award with respect to our 2006 fiscal year computed in accordance with SFAS No. 123-R. Each non-employee director received 693 shares of restricted stock pursuant to such grants on August 1, 2006 and all such shares were outstanding at December 31, 2006. The restrictions on all such shares lapse on August 1, 2007 or earlier if the individual ceases to be a non-employee director as a result of death or disability or if there is a change in control, except that the restrictions on Mr. Becker’s shares lapsed as a result of his death in February 2007. The table reflects the expense recognized for each non-employee director for the five-month portion of the one-year vesting period extending from August 1, 2006 through December 31, 2006 computed in accordance withSFAS No. 123-R, but excluding any impact of assumed forfeiture rates, based on (a) a per share value at emergence of $42.20 and (b) the total number of shares of restricted stock received by him or her. For additional information regarding the compensation cost of stock awards with respect to our 2006 fiscal year, see Note 7 of the Notes to Consolidated Financial Statements included in our Annual Report onForm 10-K for the fiscal year ended December 31, 2006. | |
(2) | Excludes perquisites and other personal benefits where the aggregate amount of such compensation to the director is less than $10,000. | |
(3) | Mr. Becker served as a director from July 2006 until his death in February 2007. | |
(4) | Each non-employee director had the right to elect to receive shares of our common stock in lieu of any or all of his or her annual cash retainer, including retainers for serving as a committee chair or lead outside director, which is included in this column. In 2006: Mr. Becker elected to receive 346 shares of common stock in lieu of approximately $14,968 of his annual retainer; Mr. Frankel elected to receive 520 shares of common stock in lieu of approximately $22,495 of his annual retainer; Ms. Hopp elected to receive 231 shares of common stock in lieu of approximately $9,993 of her annual retainer; Mr. Murdy elected to receive 404 shares of common stock in lieu of approximately $17,477 of his annual retainer; and each of Messrs. Quinn, Van Leeuwen and Wilcox and Ms. Proctor elected to receive 693 shares of common stock in lieu of approximately $29,979 of his or her annual retainer. In each case, the number of shares received was determined based on a per share price of $43.26, the average of the closing price per share for our common stock reported by the Nasdaq Global Market on each of the 10 consecutive trading days immediately preceding August 1, 2006, the payment date of the annual retainers. | |
(5) | Reflects fees paid by us for attendance at meetings of the prospective directors and of the prospective members of the various board committees held prior to our emergence from chapter 11 bankruptcy on July 6, 2006. |
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• | an annual retainer of $30,000 per year; | |
• | an annual grant of restricted stock having a value equal to $30,000; | |
• | a fee of $1,500 per day for each meeting of the board of directors attended in person and $750 per day for each such meeting attended by phone; and | |
• | a fee of $1,500 per day for each committee meeting of the board of directors attended in person on a date other than a date on which a meeting of the board of directors is held and $750 per day for each such meeting attended by phone. |
Fees Earned | ||||||||||||
or Paid in | All Other | |||||||||||
Name | Cash | Compensation(1) | Total | |||||||||
Robert J. Cruikshank | $ | 44,500 | $ | 0 | $ | 44,500 | ||||||
George T. Haymaker Jr. | $ | 25,000 | $ | 36,500 | (2) | $ | 61,500 | |||||
Charles E. Hurwitz | $ | 35,500 | $ | 0 | $ | 35,500 | ||||||
Ezra G. Levin | $ | 49,000 | $ | 0 | $ | 49,000 | ||||||
John D. Roach | $ | 46,500 | $ | 0 | $ | 46,500 |
(1) | Excludes perquisites and other personal benefits where the aggregate amount of such compensation to the director is less than $10,000. | |
(2) | Reflects the amount received by Mr. Haymaker for services of non-executive chairman of the board pursuant to an agreement among Mr. Haymaker, us and Kaiser Aluminum & Chemical Corporation. |
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Number of Shares of | ||||||||||||
Number of Shares | Common Stock Remaining | |||||||||||
of Common Stock to | Available for Future | |||||||||||
be Issued Upon | Weighted-Average | Issuance Under Equity | ||||||||||
Exercise of | Exercise Price of | Compensation Plans | ||||||||||
Outstanding | Outstanding | (Excluding Shares of | ||||||||||
Options, Warrants | Options, Warrants | Common Stock Reflected | ||||||||||
Plan Category | and Rights (a) | and Rights | in Column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by stockholders | N/A | N/A | N/A | |||||||||
Equity compensation plans not approved by stockholders | ||||||||||||
2006 Equity and Performance Incentive Plan | N/A | N/A | 1,692,863 | (1) | ||||||||
Total | N/A | N/A | 1,692,863 | |||||||||
(1) | Subject to certain adjustments that may be required from time to time to prevent dilution or enlargement of the rights of participants under the Equity Incentive Plan, a maximum of 2,222,222 shares of common stock may be issued under the Equity Incentive Plan. Under the Equity Incentive Plan, as of December 31, 2006 we had granted 515,150 shares of restricted stock restricted stock units covering 3,699 shares of common stock that continued to be outstanding at that date. Under the Equity Incentive Plan, on August 1, 2006, we also issued 4,273 shares of common stock to non-employee directors who elected to receive shares of common stock in lieu of all or part of the annual cash retainer and 6,237 shares of restricted stock to non-employee directors as part of their annual compensation for service on our board of directors. All such shares issued to nonemployee directors continued to be outstanding at December 31, 2006. |
• | each named executive officer, as well as Mr. Rinkenberger; | |
• | each of our current directors; |
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• | all our current directors and executive officers as a group; and | |
• | each person or entity known to us to beneficially own 5% or more of our common stock. |
Amount and | ||||||||
Nature of | ||||||||
Beneficial | Percent | |||||||
Name of Beneficial Owner | Ownership | of Class | ||||||
Directors and Executive Officers(1)(2) | ||||||||
Jack A. Hockema | 198,239 | * | ||||||
John Barneson | 51,844 | * | ||||||
Joseph P. Bellino | 20,041 | * | ||||||
John M. Donnan | 48,431 | * | ||||||
Daniel D. Maddox | 7,472 | * | ||||||
Daniel J. Rinkenberger | 25,323 | * | ||||||
Kerry A. Shiba | — | * | ||||||
Carl B. Frankel | 1,213 | * | ||||||
Teresa A. Hopp | 924 | * | ||||||
William F. Murdy | 1,097 | * | ||||||
Alfred E. Osborne, Jr., PhD. | 1,193 | * | ||||||
Georganne C. Proctor | 1,386 | * | ||||||
Jack Quinn | 1,386 | * | ||||||
Thomas M. Van Leeuwen | 1,386 | * | ||||||
Brett E. Wilcox | 1,386 | * | ||||||
All current directors and executive officers as a group (14 persons) | 361,321 | 1.8 | % | |||||
5% Stockholders | ||||||||
Union VEBA Trust(3) | 5,472,665 | 26.6 | % | |||||
Jeffrey A. Altman(4) | 1,580,430 | 7.68 | % | |||||
One Post Office Square | ||||||||
Witmer Asset Management(5) | 1,070,216 | 5.2 | % | |||||
Boston, Massachusetts 02109 | ||||||||
Charles H. Witmer(5) | 1,099,216 | 5.34 | % | |||||
Meryl B. Witmer(5) | 1,089,216 | 5.29 | % |
* | Less than one percent. | |
(1) | The shares held by our executive officers were received under our Equity Incentive Plan. Pursuant to the Equity Incentive Plan, these shares are restricted and are subject to forfeiture until three years following their grant (subject to certain exceptions related to termination of employment) and, consequently, may not be traded in the public market until such date. Of Mr. Hockema’s shares, 185,000 are subject to forfeiture until July 6, 2009 and 13,239 are subject to forfeiture until April 3, 2010; of Mr. Barneson’s shares, 48,000 are subject to forfeiture until July 6, 2009 and 3,844 are subject to forfeiture until April 3, 2010; of Mr. Bellino’s shares, 15,000 are subject to forfeiture until July 6, 2009 and 5,041 are subject to forfeiture until April 3, 2010; of Mr. Donnan’s shares, 45,000 are subject to forfeiture until July 6, 2009 and 3,431 are subject to forfeiture until April 3, 2010; and of Mr. Rinkenberger’s shares, 24,000 are subject to forfeiture until July 6, 2009 and 1,323 are subject to forfeiture until April 3, 2010. |
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(2) | Each of our independent directors received 693 shares of our common stock on August 1, 2006 under our Equity and Performance Incentive Plan. Pursuant to the plan, these shares are restricted and are subject to forfeiture until August 1, 2007 and, consequently, may not be traded in the public market until such date. In addition, certain of our directors elected to receive shares of our common stock in lieu of all or a portion of their annual cash retainer, including Messrs. Frankel (520 shares), Murdy (404 shares), Quinn (693 shares), Van Leeuwen (693 shares) and Wilcox (693 shares) and Mmes. Hopp (231 shares) and Proctor (693 shares). | |
(3) | Shares beneficially owned by the Union VEBA Trust are as reported on the Amendment No. 1 to Form 13G filed by the Union VEBA Trust on February 12, 2007. Independent Fiduciary Services, Inc. in its capacity as independent fiduciary for the Union VEBA Trust has sole discretionary investment and voting power with respect to the 5,472,665 shares owned by the Union VEBA Trust. The principal address of the Union VEBA Trust is c/o National City Bank, as Trustee for Kaiser VEBA Trust, 20 Stanwix Street, Locator46-25162, Pittsburgh, PA 15222. | |
(4) | Shares beneficially owned by Jeffrey Altman are as reported on the Amendment No. 1 to Form 13G filed by Owl Creek I, L.P. on February 14, 2007. Of these shares, Owl Creek I, L.P. has shared investment and voting power with respect to 61,896 shares directly owned by it; Owl Creek II, L.P. has shared investment and voting power with respect to 527,860 shares directly owned by it; Owl Creek Advisors, LLC has shared investment and voting power with respect to 589,756 shares directly owned by Owl Creek I, L.P. and Owl Creek II, L.P.; Owl Creek Asset Management, L.P. has shared investment and voting power with respect to 990,674 shares directly owned by Owl Creek Overseas Fund, Ltd., Owl Creek Overseas Fund II, Ltd. and Owl Creek Socially Responsible Investment Fund, Ltd.; and Jeffrey Altman has shared investment and voting power with respect to 1,580,430 shares directly owned by Owl Creek I, L.P., Owl Creek II, L.P., Owl Creek Overseas Fund, Ltd., Owl Creek Overseas Fund II, Ltd. and Owl Creek Socially Responsible Investment Fund, Ltd. Jeffrey Altman is the managing member of Owl Creek Advisors, LLC and the managing member of the general partner of Owl Creek Asset Management, L.P. and in that capacity directs their operations. The principal address of Jeffrey Altman is 640 Fifth Avenue, 20th Floor, New York, NY 10019. | |
(5) | Shares beneficially owned by Witmer Asset Management, Charles Witmer and Meryl Witmer are as reported on the Amendment No. 1 to Form 13G filed by Witmer Asset Management on February 14, 2007. Witmer Asset Management has shared investment and voting power with respect to 1,070,216 shares. Charles Witmer has sole investment and voting power with respect to 10,000 shares and has shared investment and voting power with respect to 1,099,216 shares. Meryl Witmer has shared investment and voting power with respect to 1,089,216 shares. The principal addresses of Witmer Asset Management, Charles Witmer and Meryl Witmer are One Dag Hammarskjold Plaza, 885 2nd Avenue, 31st Floor, New York, NY 10017. |
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• | the number of shares of common stock to be sold would not constitute more than 45% of the total number of shares of common stock received by the Union VEBA Trust pursuant to the plan of reorganization, less the number of shares included in all other transfers previously effected by the Union VEBA Trust during the preceding 36 months or since July 6, 2006, if shorter; and | |
• | the shares of common stock to be sold would have a market value of not less than $60.0 million on the date the request was made. |
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PROXY | KAISER ALUMINUM CORPORATION 27422 Portola Parkway, Suite 350 Foothill Ranch, California 92610 This proxy is solicited by the Board of Directors of Kaiser Aluminum Corporation for the annual meeting of stockholders to be held on June 6, 2007. |
The undersigned hereby appoints Jack A. Hockema, Joseph P. Bellino and John M. Donnan and each of them as proxies, each with the power to appoint his substitute, and hereby authorizes each of them to vote all shares of Kaiser Aluminum Corporation common stock which the undersigned may be entitled to vote at the annual meeting of stockholders to be held at 9:00 a.m. Pacific Time on Wednesday, June 6, 2007 at The Westin South Coast Plaza, 686 Anton Boulevard, Costa Mesa, California 92626, or at any adjournment or postponement thereof, upon the matters set forth on the reverse side and described in the accompanying proxy statement and upon such other business as may properly come before the annual meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED “FOR” THE NOMINEES LISTED HEREIN AND “FOR” THE RATIFICATION OF DELOITTE & TOUCHE LLP AS KAISER’S INDEPENDENT REGISTERED ACCOUNTING FIRM AND IN ACCORDANCE WITH THE DISCRETION OF THE PERSON VOTING THE PROXY WITH RESPECT TO ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE ANNUAL MEETING.
(Continued, and to be marked, dated and signed, on the other side)
Address Change/Comments (Mark the corresponding box on the reverse side) | ||
Ù FOLD AND DETACH HEREÙ |
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Mark Here for Address Change or Comments | o | ||||||||||||||||||
PLEASE SEE REVERSE SIDE | |||||||||||||||||||
PROPOSAL 1: ELECTION OF DIRECTORS | FORall nominees (except as marked to the contrary) o | WITHHOLD AUTHORITY o | |||||||||||||||||
Nominees: | |||||||||||||||||||
01 Alfred E. Osborne, Jr., Ph.D. | PROPOSAL 2: | RATIFICATION OF APPOINTMENT OF DELOITTE & TOUCHE LLP AS KAISER’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2007 | FOR o | AGAINST o | ABSTAIN o | ||||||||||||||
02 Jack Quinn | o | o | |||||||||||||||||
03 Thomas M. Van Leeuwen | o | o | All shares will be voted as directed herein and, unless otherwise directed, will be voted “For” proposal 1 and “For” proposal 2 and in accordance with the discretion of the person voting the proxy with respect to any other business properly brought before the annual meeting. You may revoke this proxy prior to the time this proxy is voted by (i) submitting a properly signed proxy card with a later date, (ii) delivering, no later than 5:00 p.m., local time, on June 5, 2007, written notice of revocation to the Secretary of Kaiser Aluminum Corporation c/o Mellon Investor Services, Proxy Processing, P.O. Box 1680, Manchester, CT 06045-9986 or (iii) attending the Annual Meeting and voting in person. Your attendance at the Annual Meeting alone will not revoke your proxy. To change your vote, you must also vote in person at the Annual Meeting. | ||||||||||||||||
INSTRUCTION: To withhold authority to vote for any individual nominee, place an “X” in the box beside the nominee’s name above. | |||||||||||||||||||
WILL ATTEND o | |||||||||||||||||||
Please check the following box if you plan to attend the annual meeting in person. | |||||||||||||||||||
Signature | Signature | Date | |||||||||||||||||
NOTE: Please sign exactly as your name or names appear hereon. When signing as attorney in fact, executor, administrator, trustee or guardian, please give full title as such. Joint owners should each sign. In the case of a corporation, partnership or other entity, the full name of the organization should be used and the signature should be that of a duly authorized officer or person. |
Ù FOLD AND DETACH HEREÙ |