o | Preliminary Proxy Statement |
o | Cofidential, for Use of the
Commission Only (as permitted by Rule
14a-6(5)(2))
|
x | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material Pursuant to §240.14a-12 |
x | No fee required. | |
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(1) | Amount Previously Paid: | |
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(4) | Date Filed: |
1. |
Election
of eight directors to the Board of Directors to serve until the 2009
annual meeting of stockholders;
|
|
2.
|
Ratification
of the appointment of Deloitte & Touche LLP as the Company’s
independent registered public accounting firm for 2008;
and
|
|
3. | To act upon such other matters, if any, as may properly come before the meeting. |
ABOUT THE ANNUAL MEETING |
1
|
|
PROPOSAL
NO. 1 ELECTION OF DIRECTORS
|
6
|
|
|
Nominees for Election to Our Board |
6
|
CORPORATE
GOVERNANCE
|
8
|
|
MEETINGS AND COMMITTEES OF THE BOARD |
11
|
|
COMPENSATION COMMITTEE REPORT |
13
|
|
COMPENSATION DISCUSSION AND ANALYSIS |
13
|
|
ADDITIONAL INFORMATION REGARDING EXECUTIVE COMPENSATION |
20
|
|
|
Summary
Compensation Table
|
20
|
|
2007
Grants of Plan-Based Awards Table
|
21
|
Outstanding Equity Awards at 2007 Fiscal Year-End Table |
22
|
|
2007 Option Exercises and Stock Vested Table |
23
|
|
2007 Non-Qualified Deferred Compensation Table |
24
|
|
Potential Payments Upon Termination or Change in Control |
24
|
|
NON-MANAGEMENT
DIRECTOR COMPENSATION
|
27
|
|
INFORMATION
CONCERNING OUR EXECUTIVE OFFICERS
|
30
|
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
31
|
|
STOCK
OWNERSHIP GUIDELINES
|
34
|
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
|
34
|
|
PROPOSAL
NO. 2 RATIFICATION OF APPOINTMENT BY THE AUDIT COMMITTEE OF DELOITTE &
TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
2008
|
35
|
|
|
2007
and 2006 Audit Fees
|
35
|
AUDIT
COMMITTEE REPORT
|
36
|
|
OTHER
MATTERS
|
37
|
|
1. |
The
election of the following eight directors to the Board to serve until the
2009 annual meeting of
stockholders:
|
● | John C. Brouillard | ● | William S. Oglesby | |
● | Lawrence P. Castellani | ● | Gilbert T. Ray | |
● | Darren R. Jackson | ● | Carlos A. Saladrigas | |
● | Nicholas J. LaHowchic | ● | Francesca M. Spinelli |
2. |
Ratification
of the appointment of Deloitte & Touche LLP (“Deloitte”) as the
Company’s independent registered public accounting firm for
2008.
|
1. |
FOR
each of the director nominees;
and
|
2. |
FOR
ratification of the appointment of Deloitte as independent registered
public accounting firm for
2008.
|
Name
|
Age
|
Position
|
|||
John
C. Brouillard(1)
|
59
|
Chair
|
|||
Lawrence
P. Castellani(3)
|
62
|
Director
|
|||
Darren
R. Jackson
|
43
|
Director,
President and Chief Executive Officer
|
|||
Nicholas
J. LaHowchic(1)(3)
|
60
|
Director
|
|||
William
S. Oglesby(3)(4)
|
48
|
Director
|
|||
Gilbert
T. Ray(2)(4)
|
63
|
Director
|
|||
Carlos
A. Saladrigas(1)
|
59
|
Director
|
|||
Francesca
M. Spinelli(2)
|
54
|
Director
|
●
|
the structure of our Board, including, among other things, the size, mix of independent and non-independent members, membership criteria, term of service, compensation and assessment of performance of our Board; |
●
|
Board procedural matters, including, among other things, selection of the chair of the Board, Board meetings, Board communications, retention of counsel and advisors and our expectations regarding the performance of our directors; |
●
|
committee matters, including, among other things, the types of committees, charters of committees, independence of committee members, chairs of committees, service of committee members, committee agendas and committee minutes and reports; |
●
|
chief executive
officer evaluation, management development and succession
planning;
|
●
|
codes of conduct; and |
●
|
other matters, including charitable contributions, use of the corporate airplane, auditor services, Board access to management and interaction with third parties, directors and officers insurance and the indemnification/limitation of liability of directors, our policy prohibiting Company loans to the Company’s executive officers and directors, and confidential stockholder voting. |
Name
of Committee and
Members
|
Primary
Responsibilities
|
#
of Meetings
in
2007
|
Audit
Carlos
A. Saladrigas (Chair)
John
C. Brouillard
Nicholas
J. LaHowchic
|
· monitors the
integrity of our financial statements, reporting processes, internal
controls, risk management and legal and regulatory
compliance;
· selects,
determines the compensation of, evaluates and, when appropriate, replaces
our independent registered public accounting firm; pre-approves all audit
and permitted non-audit services;
· monitors the
qualifications, independence and performance of our independent registered
public accounting firm; and
· oversees our
internal audit function.
|
9
|
Compensation
Francesca
M. Spinelli (Chair)
Gilbert
T. Ray
William
L. Salter
|
· reviews and
approves our executive compensation philosophy;
· annually
reviews and approves corporate goals and objectives relevant to the
compensation of the CEO and evaluates the CEO’s performance in light of
these goals;
· determines the
compensation of our executive officers and approves compensation for key
members of management; and
· oversees our
incentive and equity-based compensation plans.
|
9
|
Finance
William
S. Oglesby (Chair)
Lawrence
P. Castellani
Nicholas
J. LaHowchic
|
· reviews and
makes recommendations to the Board regarding our financial policies,
including investment guidelines, deployment of capital and short-term and
long-term financing;
·
reviews
credit metrics, including debt ratios, levels and leverage
ratios;
· reviews all
aspects of financial planning, strategic planning, cash uses and our
expansion program; and
· reviews and
recommends the annual budget to the Board.
|
8
|
Nominating
and Corporate Governance
Gilbert
T. Ray (Chair)
William
S. Oglesby
William
L. Salter
|
· assists the
Board in identifying, evaluating and recommending candidates for election
to the Board;
· establishes
procedures and provides oversight for evaluating the Board and
management;
· develops,
recommends and reassesses our corporate governance guidelines;
and
· evaluates the
size, structure and composition of the Board and its
committees.
|
4
|
●
|
compensation is linked to annual and long-term Company performance goals that are structured to align the interests of executive officers with those of the Company’s stockholders; |
●
|
a significant portion of total compensation is stock-based, thereby further aligning the interests of executive officers and Company stockholders; and |
●
|
compensation is competitively positioned with compensation levels at comparable retail competitors so the Company can attract, retain and motivate superior management talent essential to the Company’s long-term success. |
AutoZone | Barnes & Noble | Bed Bath & Beyond | Borders Group |
Circuit City | CSK Auto | Dollar Tree | Foot Locker |
Genuine Parts | Longs Drug Stores | O’Reilly Automotive | Collective Brands |
The Pep Boys | PetSmart | RadioShack | Williams-Sonoma |
●
|
base salary, which is intended to compensate executives for their primary responsibilities and individual contributions; |
●
|
performance-based incentives, which are intended to link annual compensation and short-term performance; |
●
|
long-term equity incentives, which are intended to link long-term compensation with stockholder value over the long-term; and |
●
|
retirement savings and other compensation. |
Target
Performance Objectives
|
||||||||||||
Performance
|
Target
|
Maximum
|
Actual
|
Actual
|
||||||||
Measure
|
Weight
|
Threshold
|
(100%
Payout)
|
(200%
Payout)
|
Performance
|
Payout
|
||||||
2007
|
||||||||||||
Sales
|
30%
|
96%
|
100%
|
104%
|
95.7%
|
0.0%
|
||||||
Operating
Income
|
30%
|
90%
|
100%
|
110%
|
89.4%
|
0.0%
|
||||||
Operating
Income Growth
|
30%
|
110%
|
110%
|
135%
|
103.2%
|
0.0%
|
||||||
Inventory
Turns
|
10%
|
90%
|
100%
|
110%
|
95.9%
|
72.0%
|
||||||
2006
|
||||||||||||
Sales
|
30%
|
96%
|
100%
|
104%
|
94.7%
|
0.0%
|
||||||
Operating
Income
|
30%
|
90%
|
100%
|
110%
|
89.4%
|
0.0%
|
||||||
Operating
Income Growth
|
30%
|
110%
|
115%
|
135%
|
98.7%
|
0.0%
|
||||||
Inventory
Turns
|
10%
|
90%
|
100%
|
110%
|
96.2%
|
72.0%
|
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Stock
Awards
(a)
($)
|
Option
Awards
(b)
($)
|
Non-Equity
Incentive
Plan
Compensation
(c)
($)
|
All
Other
Compensation
(d)
(e) (f) (g)
(h)
(i)
($)
|
Total
($)
|
John
C. Brouillard
|
2007
|
$ 784,625
|
$ 68,706
|
$ 100,421
|
$ -
|
$ 973
|
$ 954,725
|
Non-Executive
Chair (j)
|
2006
|
-
|
-
|
-
|
-
|
-
|
-
|
Michael
O. Moore
|
2007
|
391,763
|
59,939
|
693,408
|
17,143
|
83,552
|
1,245,805
|
Former
EVP, Chief Financial Officer
|
2006
|
380,260
|
-
|
439,592
|
16,159
|
106,486
|
942,497
|
Jimmie
L. Wade
|
2007
|
496,449
|
113,223
|
1,122,613
|
21,699
|
20,005
|
1,773,989
|
EVP,
Customer Experience Officer
|
2006
|
481,510
|
-
|
1,223,406
|
20,548
|
14,471
|
1,739,935
|
Elwyn
G. Murray III
|
2007
|
457,584
|
106,165
|
805,088
|
21,699
|
19,859
|
1,410,395
|
EVP,
Customer Development Officer
|
2006
|
386,246
|
-
|
540,692
|
16,497
|
9,417
|
952,852
|
Paul
W. Klasing
|
2007
|
369,632
|
56,410
|
847,881
|
16,144
|
19,472
|
1,309,539
|
SVP,
Corporate Development
|
2006
|
358,748
|
-
|
857,274
|
15,334
|
14,338
|
1,245,694
|
Michael
N. Coppola
|
2007
|
285,578
|
-
|
(547,481)
|
20,614
|
541,711
|
300,422
|
Former
Chairman, President & CEO (k)
|
2006
|
772,502
|
-
|
2,383,314
|
54,990
|
21,972
|
3,232,778
|
David
B. Mueller
|
2007
|
148,849
|
-
|
98,368
|
6,310
|
225,068
|
478,595
|
Former
EVP, Merchandising (k)
|
2006
|
341,234
|
-
|
727,592
|
14,699
|
9,370
|
1,092,895
|
(a) | Except for Mr. Brouillard, represents the dollar amounts recognized for the fair value of restricted stock granted during fiscal 2007 in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment,” or SFAS 123R. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The grant date fair value is calculated using the closing price of the Company’s stock on the date of grant. For additional information, refer to Note 16 of the Company’s consolidated financial statements in the 2007 Form 10-K filed with the SEC on February 27, 2008. See the “2007 Grants of Plan-Based Awards” table for information on options granted in 2007. These amounts reflect the Company’s accounting expense, and do not correspond to the actual value that will be realized by the named executive officers. |
(b) | Represents the dollar amounts recognized for the 2007 and 2006 fiscal years for the fair value of SARs and stock options granted in those years, as well as prior fiscal years, in accordance with SFAS 123R. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For information on the valuation assumptions, refer to Note 16 of the Company’s consolidated financial statements in the 2007 Form 10-K filed with the SEC on February 27, 2008. See the “Grants of Plan-Based Awards” table for information on SARs granted in 2007. These amounts reflect the Company’s accounting expense, and do not correspond to the actual value that will be realized by the named executive officers. |
(c) | Amounts in this column were paid to the named executives in February 2007 and 2008 for each preceding year, respectively, according to the annual incentive plan in place for each respective fiscal year. |
(d) | Includes company matching contributions according to the terms of the Company’s 401(k) plan. |
(e) | Includes life insurance premiums paid by the Company for coverage equal to one times the executive’s annual salary, which is the incremental cost required to cover a benefit stated in the terms of each executive’s employment contract, with the exception of Mr. Brouillard, who did not have an employment agreement. |
(f) | Includes executive allowance reimbursements for 2007 as follows: Mr. Wade - $13,250 for personal automobile use; Mr. Murray - $13,250 for personal automobile use; Mr. Moore - $13,250 for personal automobile use and supplemental insurance; Mr. Klasing - $13,250 for personal automobile use; Mr. Coppola - $16,625 for personal automobile use; and Mr. Mueller- $7,750 for personal automobile use, supplemental insurance and financial planning. Information about these taxable perquisites is provided under the heading “Other Compensation” of this proxy statement. |
(g) | For Mr. Moore, this column also includes reimbursement of $38,328 for moving expenses and a tax reimbursement in the amount of $25,506 provided in accordance with the Company’s relocation program. |
(h) | This column also includes the value of any personal use of the Company aircraft calculated as the incremental cost to the Company and tax reimbursements related to personal use of the Company aircraft. Individual expenses related to plane use |
and
any related tax reimbursements provided in accordance with the Company’s
plane use policy are reported for 2007 and 2006. 2007
reportable compensation was as follows: Mr. Coppola - $9,306; and Mr.
Mueller - $920. No tax reimbursements applied to 2007 plane
use. The incremental cost to the Company for personal use of Company
aircraft is calculated based on the primary variable operating costs to
the Company, including fuel, maintenance and other miscellaneous variable
costs.
|
|
(i) | For Mr. Brouillard, the amount reported is the value of dividends earned on DSUs and converted to additional DSUs. For all others, the amount reported includes dividends paid during 2007 on restricted stock granted to executives in 2007. |
(j) | From May 7, 2007 until January 7, 2008, Mr. Brouillard served as Interim Chair, President, and CEO. Effective January 7, 2008, Mr. Brouillard’s tenure as Interim Chair, President, and CEO ended, and he became the non-executive Chair of the Board. Information included for Mr. Brouillard represents salary compensation he received while serving as the interim President and Chief Executive Officer and stock-based compensation he received in May 2007. Mr. Brouillard essentially received stock-based compensation in the amount of twice the normal level of stock-based compensation awarded to non-employee directors. See the “2007 Director Summary Compensation Table” for information on stock awards to directors. No information is provided for 2006, while Mr. Brouillard served as a non-employee director, due to its lack of comparability with the 2007 compensation. The table does not include a special one-time cash payment in the amount of $200,000 approved by the Board and paid to Mr. Brouillard subsequent to December 29, 2007. |
(k) | Messrs. Coppola and Mueller are former executive officers of the Company, with respective separation dates on May 7, 2007 and May 25, 2007. Mr. Coppola’s compensation attributed to option awards is negative for 2007 as a result of the forfeiture of options in connection with his departure from the Company. Information provided in the “All Other Compensation” column includes severance payments of $516,254 to Mr. Coppola and $216,074 to Mr. Mueller paid during 2007 according to the terms of their individual separation agreements. |
Estimated
Future Payouts
Under
Non-Equity Incentive
Plan
Awards
|
All
Other
Stock
Awards
Number
of
Shares
of
|
All
Other
Option
Awards
Number
of
Securities
Underlying
|
Exercise
Price
of
Option
|
Grant
Date
Fair
Value of
Stock
and
Option
|
||||
Name
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Stock
(#)
|
Options
(#)
|
Awards
($)
|
Awards
($)
|
Mr.
Brouillard (a)
|
5/21/2007
|
$ -
|
$ -
|
$ -
|
-
|
15,000
|
$ 41.64
|
$ 183,300
|
5/21/2007
|
-
|
-
|
-
|
1,650
|
-
|
-
|
68,706
|
|
Mr.
Moore
|
2/20/2007
|
41,476
|
237,008
|
474,015
|
-
|
56,118
|
38.03
|
637,500
|
2/20/2007
|
-
|
-
|
-
|
5,588
|
-
|
-
|
212,512
|
|
Mr.
Wade
|
2/20/2007
|
52,501
|
300,007
|
600,013
|
-
|
66,021
|
38.03
|
749,999
|
2/20/2007
|
-
|
-
|
-
|
6,574
|
-
|
-
|
250,009
|
|
5/21/2007
|
-
|
-
|
-
|
5,000
|
-
|
-
|
208,200
|
|
Mr.
Murray
|
2/20/2007
|
52,501
|
300,007
|
600,013
|
-
|
59,420
|
38.03
|
675,011
|
2/20/2007
|
-
|
-
|
-
|
5,916
|
-
|
-
|
224,985
|
|
5/21/2007
|
-
|
-
|
-
|
5,000
|
-
|
-
|
208,200
|
|
Mr.
Klasing
|
2/20/2007
|
39,061
|
223,205
|
446,410
|
-
|
52,817
|
38.03
|
600,001
|
2/20/2007
|
-
|
-
|
-
|
5,259
|
-
|
-
|
200,000
|
|
Mr.
Coppola
|
2/20/2007
|
136,500
|
780,000
|
1,560,000
|
-
|
132,042
|
38.03
|
1,499,997
|
2/20/2007
|
-
|
-
|
-
|
13,148
|
-
|
-
|
500,018
|
|
Mr.
Mueller
|
2/20/2007
|
63,001
|
360,006
|
720,012
|
-
|
59,420
|
38.03
|
675,011
|
2/20/2007
|
-
|
-
|
-
|
5,916
|
-
|
-
|
224,985
|
Option
Awards (a)
|
Stock
Awards (b)
|
||||||||
Name
|
Grant
Date
|
Number
of Securities
Underlying
Unexercised
Options
Exercisable
Unexercisable
(#)
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or Units
of
Stock That
Have
Not Vested
(#)
|
Market
Value of
Shares
or Units
of
Stock That
Have
Not Vested
($)
|
|||
Mr.
Brouillard (c)
|
5/24/2004
|
7,500
|
-
|
$ 28.07
|
5/24/2011
|
-
|
-
|
||
5/23/2005
|
5,000
|
2,500
|
39.65
|
5/23/2012
|
-
|
-
|
|||
5/22/2006
|
2,500
|
5,000
|
38.35
|
5/22/2013
|
-
|
-
|
|||
5/21/2007
|
-
|
15,000
|
41.64
|
5/21/2014
|
-
|
-
|
|||
Mr.
Moore
|
12/19/2005
|
30,000
|
15,000
|
42.10
|
12/19/2012
|
-
|
-
|
||
2/21/2006
|
30,000
|
60,000
|
40.45
|
2/21/2013
|
-
|
-
|
|||
2/20/2007
|
-
|
56,118
|
38.03
|
2/20/2014
|
-
|
-
|
|||
2/20/2007
|
-
|
-
|
-
|
-
|
5,588
|
$ 213,294
|
|||
Mr.
Wade
|
2/18/2003
|
40,000
|
-
|
13.46
|
2/18/2010
|
-
|
-
|
||
8/18/2003
|
45,000
|
-
|
24.34
|
8/18/2010
|
-
|
-
|
|||
2/23/2004
|
135,000
|
-
|
26.21
|
2/23/2011
|
-
|
-
|
|||
2/22/2005
|
90,000
|
45,000
|
33.37
|
2/22/2012
|
-
|
-
|
|||
2/21/2006
|
35,000
|
70,000
|
40.45
|
2/21/2013
|
-
|
-
|
|||
2/20/2007
|
-
|
66,021
|
38.03
|
2/20/2014
|
-
|
-
|
|||
2/20/2007
|
-
|
-
|
-
|
-
|
6,574
|
250,930
|
|||
5/21/2007
|
-
|
-
|
-
|
-
|
5,000
|
190,850
|
|||
Mr.
Murray
|
4/20/2005
|
60,000
|
30,000
|
33.57
|
4/20/2012
|
-
|
-
|
||
2/21/2006
|
30,000
|
60,000
|
40.45
|
2/21/2013
|
-
|
-
|
|||
2/20/2007
|
-
|
59,420
|
38.03
|
2/20/2014
|
-
|
-
|
|||
2/20/2007
|
-
|
-
|
-
|
-
|
5,916
|
225,814
|
|||
5/21/2007
|
-
|
-
|
-
|
-
|
5,000
|
190,850
|
|||
Mr.
Klasing
|
2/18/2003
|
90,000
|
-
|
13.46
|
2/10/2010
|
-
|
-
|
||
8/18/2003
|
15,000
|
-
|
24.34
|
8/18/2010
|
-
|
-
|
|||
2/23/2004
|
90,000
|
-
|
26.21
|
2/23/2011
|
-
|
-
|
|||
2/22/2005
|
60,000
|
30,000
|
33.37
|
2/22/2012
|
-
|
-
|
|||
2/21/2006
|
30,000
|
60,000
|
40.45
|
2/21/2013
|
-
|
-
|
|||
2/20/2007
|
-
|
52,817
|
38.03
|
2/20/2014
|
-
|
-
|
|||
2/20/2007
|
-
|
-
|
-
|
-
|
5,259
|
200,736
|
|||
Mr.
Coppola (d)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||
Mr.
Mueller (d)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(b) | Except for Mr. Brouillard, all stock awards listed in the table are awards of restricted stock that vest on the third anniversary of the grant date. The market value of the stock awards is reflective of the closing price of the Company’s stock as of December 28, 2007 ($38.17). |
(c) | All stock options displayed for Mr. Brouillard are grants related to his service as a board member. Mr. Brouillard’s option grant in 2007 was twice the normal level for a non-employee director as a result of his appointment to the position of Interim Chair, President and CEO. |
(d) | Mr. Coppola and Mr. Mueller exercised all vested stock options which had inherent value shortly after their separation of employment in May 2007. Values derived from the option exercises are shown in the “2007 Option Exercises and Stock Vested Table.” Grants made to Mr. Coppola and Mr. Mueller in February 2007, as reported in the “2007 Grants of Plan-based Awards Table,” were forfeited upon their separation from employment. As a result, Mr. Coppola and Mr. Mueller had no outstanding stock incentives at the end of our fiscal year. |
Option
Awards
|
||||
Name
|
Number
of Shares
Acquired |
Value
Realized on
Exercise |
||
Mr.
Brouillard
|
-
|
$
-
|
||
Mr.
Moore
|
-
|
-
|
||
Mr.
Wade
|
109,999
|
2,647,972
|
||
Mr.
Murray
|
-
|
-
|
||
Mr.
Klasing
|
165,000
|
5,065,107
|
||
Mr.
Coppola
|
558,000
|
8,115,633
|
||
Mr.
Mueller
|
140,000
|
1,189,833
|
Name
|
Executive Contributions
in |
Aggregate Earnings
in |
Aggregate Withdrawals/ |
Aggregate Balance |
||||
Mr.
Brouillard (c)
|
$ 68,706
|
$ 2,329
|
$ 15,705
|
$ 171,143
|
||||
Mr.
Moore
|
39,151
|
1,280
|
-
|
40,431
|
||||
Mr.
Wade
|
101,290
|
24,273
|
-
|
412,928
|
||||
Mr.
Murray
|
-
|
-
|
-
|
-
|
||||
Mr.
Klasing
|
36,945
|
9,444
|
-
|
169,440
|
||||
Mr.
Coppola
|
27,000
|
13,289
|
-
|
271,686
|
||||
Mr.
Mueller
|
2,979
|
(200)
|
2,778
|
-
|
(a) | Additional information is provided under “Retirement Savings” in the Compensation Discussion and Analysis section of this proxy statement. Any amounts reported for “Executive Contributions” are also reported in the Summary Compensation Table of this proxy statement in the “Stock Awards” column for Mr. Brouillard and in the “Salary” column for other executives. |
(b) | Represents unrealized gains or losses on market-based investments selected by executives for their deferred compensation balances. For Mr. Brouillard and Mr. Mueller, the amount reported includes the value of dividends earned on DSUs and converted to additional DSUs and the change in overall value of DSUs based on the Company’s stock price. |
(c) | Mr. Brouillard’s deferred compensation represents the value of the compensation he has received in the form of DSUs that he received for service as a director. He received a distribution of Company stock valued at $15,705 in January 2007 in accordance with the irrevocable distribution instructions he established prior to 2007. |
Executive and Benefits
|
Voluntary TerminationDue
Cause (a)
|
Retirement
|
Disability
|
Death
|
By
Company Other than Retirement,
|
Change in |
||||||||||||||||||
Mr.
Brouillard
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Mr.
Wade
|
||||||||||||||||||||||||
Salary
Continuation
|
$ | - | $ | - | $ | - | $ | 500,011 | $ | 500,011 | $ | - | ||||||||||||
Annual
Incentive Plan (b)
|
- | 21,699 | 21,699 | 21,699 | 21,699 | - | ||||||||||||||||||
Stock
Incentives (c) (d) (e)
|
3,657,350 | 3,882,593 | 3,882,593 | 3,882,593 | 3,657,350 | 3,882,593 | ||||||||||||||||||
Restricted
Stock (f)
|
- | 441,780 | 441,780 | 441,780 | - | 441,780 | ||||||||||||||||||
Healthcare
(g)
|
- | - | 8,098 | - | 8,098 | 8,098 | ||||||||||||||||||
Life
Insurance
|
- | - | - | 500,011 | - | - | ||||||||||||||||||
Disability
(h)
|
- | - | 450,010 | - | - | - | ||||||||||||||||||
Deferred
Compensation (i)
|
414,189 | 414,189 | 414,189 | 414,189 | 414,189 | 414,189 | ||||||||||||||||||
$ | 4,071,539 | $ | 4,760,261 | $ | 5,218,369 | $ | 5,760,283 | $ | 4,601,347 | $ | 4,746,660 | |||||||||||||
Mr.
Murray
|
||||||||||||||||||||||||
Salary
Continuation
|
$ | - | $ | - | $ | - | $ | 500,011 | $ | 500,011 | $ | - | ||||||||||||
Annual
Incentive Plan (b)
|
- | 21,699 | 21,699 | 21,699 | 21,699 | - | ||||||||||||||||||
Stock
Incentives (c) (d) (e)
|
276,000 | 422,319 | 422,319 | 422,319 | 276,000 | 422,319 | ||||||||||||||||||
Restricted
Stock (f)
|
- | 416,664 | 416,664 | 416,664 | - | 416,664 | ||||||||||||||||||
Healthcare
(g)
|
- | - | 8,098 | - | 8,098 | 8,098 | ||||||||||||||||||
Life
Insurance
|
- | - | - | 500,011 | - | - | ||||||||||||||||||
Disability
(h)
|
- | - | 450,010 | - | - | - | ||||||||||||||||||
Deferred
Compensation (i)
|
- | - | - | - | - | - | ||||||||||||||||||
$ | 276,000 | $ | 860,682 | $ | 1,318,790 | $ | 1,860,704 | $ | 805,808 | $ | 847,081 | |||||||||||||
Mr.
Moore
|
||||||||||||||||||||||||
Salary
Continuation
|
$ | - | $ | 395,013 | $ | 395,013 | $ | 395,013 | $ | 395,013 | $ | - | ||||||||||||
Annual
Incentive Plan (b)
|
- | 17,143 | 17,143 | 17,143 | 17,143 | - | ||||||||||||||||||
Stock
Incentives (c) (d) (e)
|
- | 7,857 | 7,857 | 7,857 | - | 7,857 | ||||||||||||||||||
Restricted
Stock (f)
|
- | 213,294 | 213,294 | 213,294 | - | 213,294 | ||||||||||||||||||
Healthcare
(g)
|
- | - | 7,282 | - | 7,282 | 7,282 | ||||||||||||||||||
Life
Insurance
|
- | - | - | 395,013 | - | - | ||||||||||||||||||
Disability
(h)
|
- | - | 355,512 | - | - | - | ||||||||||||||||||
Deferred
Compensation (i)
|
40,310 | 40,310 | 40,310 | 40,310 | 40,310 | 40,310 | ||||||||||||||||||
$ | 40,310 | $ | 673,617 | $ | 1,036,411 | $ | 1,068,630 | $ | 459,748 | $ | 268,743 | |||||||||||||
Mr.
Klasing
|
||||||||||||||||||||||||
Salary
Continuation
|
$ | - | $ | 372,008 | $ | 372,008 | $ | 372,008 | $ | 372,008 | $ | - | ||||||||||||
Annual
Incentive Plan (b)
|
- | 16,144 | 16,144 | 16,144 | 16,144 | - | ||||||||||||||||||
Stock
Incentives (c) (d) (e)
|
3,795,750 | 3,947,144 | 3,947,144 | 3,947,144 | 3,795,750 | 3,947,144 | ||||||||||||||||||
Restricted
Stock (f)
|
- | 200,736 | 200,736 | 200,736 | - | 200,736 | ||||||||||||||||||
Healthcare
(g)
|
- | - | 8,098 | - | 8,098 | 8,098 | ||||||||||||||||||
Life
Insurance
|
- | - | - | 372,008 | - | - | ||||||||||||||||||
Disability
(h)
|
- | - | 334,807 | - | - | - | ||||||||||||||||||
Deferred
Compensation (i)
|
169,340 | 169,340 | 169,340 | 169,340 | 169,340 | 169,340 | ||||||||||||||||||
$ | 3,965,090 | $ | 4,705,372 | $ | 5,048,277 | $ | 5,077,380 | $ | 4,361,340 | $ | 4,325,318 | |||||||||||||
Mr.
Coppola (j)
|
||||||||||||||||||||||||
Salary
Continuation
|
$ | - | $ | - | $ | - | $ | - | $ | 780,000 | $ | - | ||||||||||||
Annual
Incentive Plan
|
- | - | - | - | 20,614 | - | ||||||||||||||||||
Stock
Incentives
|
- | - | - | - | 8,115,633 | - | ||||||||||||||||||
Healthcare
|
- | - | - | - | 4,568 | - | ||||||||||||||||||
Deferred
Compensation
|
- | - | - | - | 271,686 | - | ||||||||||||||||||
$ | - | $ | - | $ | - | $ | - | $ | 9,192,501 | $ | - | |||||||||||||
Mr.
Mueller (j)
|
||||||||||||||||||||||||
Salary
Continuation
|
$ | - | $ | - | $ | - | $ | - | $ | 360,006 | $ | - | ||||||||||||
Annual
Incentive Plan
|
- | - | - | - | 6,310 | - | ||||||||||||||||||
Stock
Incentives
|
- | - | - | - | 1,189,833 | - | ||||||||||||||||||
Healthcare
|
- | - | - | - | 4,439 | - | ||||||||||||||||||
Deferred
Compensation
|
- | - | - | - | 2,778 | - | ||||||||||||||||||
$ | - | $ | - | $ | - | $ | - | $ | 1,563,366 | $ | - |
(a) | Voluntary termination or termination for Due Cause makes an executive ineligible for any employment agreement benefits other than any rights he may have under the normal terms of other benefit plans. Executives must exercise vested long-term incentives within 90 days after the date of termination. The term “Due Cause” is defined in the agreements as (i) a material violation of the executive’s obligations under the agreement or a directive from the Board of Directors or the executive’s superior that is willful |
and deliberate and that has not been cured; (ii) a material violation of the loyalty obligations as provided in the agreement; (iii) an act of dishonesty intended to or that does result in personal enrichment or material adverse effect upon the Company; (iv) a conviction of a felony involving fraud, breach of trust, or misappropriation; or (v) a determination that the executive is addicted to a controlled substance. The agreements provide that the executive’s employment is deemed to be terminated by the Company without Due Cause if the executive elects to terminate his employment as a result of: (i) a failure by the Company to pay the executive any compensation due to the executive; (ii) the assignment of any duties materially inconsistent (except in the nature of a promotion or lateral move) with the position in the Company that he held immediately prior to the reassignment or a substantial adverse alteration in the nature or status of his position or responsibilities; or (iii) requiring the executive to be based more than 60 miles from the Company’s office at which he was principally employed immediately prior to the date of the relocation. | |
(b) | At the end of 2007, the named executive officers were eligible only for annual incentive payments earned prior to their termination date. The delivery of any such payments would coincide with the regular payment date for other executives. Refer to the “Grants of Plan-Based Awards Table” for the range of potential payments. Actual amounts earned for 2007 are shown here. In the case of voluntary termination or termination for Due Cause, the executive would be ineligible to receive the payment because he would not have been actively employed on the date of distribution. |
(c) | Amounts shown here are calculated as the differences between the exercise price of the outstanding stock long-term incentives and the closing price of our stock at the end of our fiscal year ($38.17). |
(d) | An executive’s retirement, defined as age 55 plus 10 years of service, allows all unvested stock long-term incentives to continue vesting into retirement. “Retirement” column amounts indicate the value of all outstanding long-term incentives, based on footnote (c), assuming all executives qualify for retirement. |
(e) | The terms of executives’ stock option agreements provide that all stock long-term incentives are 100 percent vested when a change in control occurs, unless an equivalent substitute equity award is provided by the acquiring company. |
(f) | The terms of executives’ restricted stock awards provide that restricted stock becomes 100 percent vested when a change in control occurs, unless an equivalent substitute equity award is provided by the acquiring company. |
(g) | Amounts provided here represent the Company’s cost of providing one year of healthcare coverage to the executive. |
(h) | Disability amounts shown consist of the amount the executives receive under the Company’s qualified plan plus an amount equal to 30 percent of their annual salary as specified in their employment agreements. |
(i) |
Executives’
deferred compensation balances are always 100 percent vested and are not
affected by any type of termination.
|
(j) | The employment of Messrs. Coppola and Mueller terminated prior to December 28, 2007. The amounts shown were paid to them in conjunction with their separation from employment in 2007. |
Board
Participation Type
|
Retainer/Fee
|
|
Chair
|
$100,000
|
|
Lead
Director
|
$ 25,000
|
|
Audit
Committee Chair
|
$ 15,000
|
|
Compensation
Committee Chair
|
$ 10,000
|
|
Finance
Committee Chair
|
$ 10,000
|
|
Nominating
and Corporate Governance Committee Chair
|
$ 10,000
|
|
Board
Meeting Attendance
|
$ 2,000
|
|
Telephonic
Board Meeting Attendance
|
$ 1,000
|
|
Committee
Meeting Attendance
|
$ 1,000
|
|
Telephonic
Committee Meeting Attendance
|
$ 750
|
Name
|
Fees
Earned or Paid
in Cash (a) |
Stock
Awards (b) |
Option Awards
(c) |
All
Other Compensation |
Total ($) |
|||||||||||||||
John
C. Brouillard (e)
|
$ | 13,668 | $ | 68,706 | $ | 100,421 | $ | 973 | $ | 183,768 | ||||||||||
Lawrence
P. Castellani
|
46,250 | 34,353 | 760,325 | 348 | 841,276 | |||||||||||||||
Darren
R. Jackson
|
50,500 | 34,353 | 79,250 | 715 | 164,818 | |||||||||||||||
Nicholas
J. LaHowchic
|
51,500 | 34,353 | 18,800 | 493 | 105,146 | |||||||||||||||
William
S. Oglesby
|
58,000 | 34,353 | 80,046 | 1,050 | 173,449 | |||||||||||||||
Gilbert
T. Ray
|
62,750 | 34,353 | 83,689 | 798 | 181,590 | |||||||||||||||
Carlos
A. Saladrigas
|
61,750 | 34,353 | 81,621 | 748 | 178,472 | |||||||||||||||
William
L. Salter
|
51,750 | 34,353 | 76,796 | 831 | 163,730 | |||||||||||||||
Francesca
M. Spinelli
|
57,750 | 34,353 | 77,485 | 848 | 170,436 |
(a)
|
Information
includes paid or deferred board annual retainers, chair retainers and
board and committee meeting fees paid to directors based on their
respective meeting attendance during 2007.
|
(b) | Represents the dollar amounts recognized for the fair value of DSUs granted during fiscal 2007 in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment,” or SFAS 123R. The grant date fair value is calculated using the closing price of the Company’s stock on the date of grant. The reported fair value is based on the number of units granted multiplied by the stock price ($41.64) on May 21, 2007, the grant date. For additional information, refer to Note 16 of the Company’s consolidated financial statements in the 2007 Form 10-K filed with the SEC on February 27, 2008. These amounts reflect the Company’s accounting expense and do not correspond to the actual value that will be realized by the directors. |
(c) | Represents the dollar amounts recognized during fiscal year 2007 for the fair value of stock options granted in 2007, as well as prior fiscal years, in accordance with SFAS 123R. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For fiscal 2007, the Company’s directors received grants of options on May 21, 2007 with an exercise price of $41.64, the closing price of the Company’s stock on the date of grant. The grant date fair value per option was $12.22. For information on the valuation assumptions, refer to Note 16 of the Company’s consolidated financial statements in the 2007 Form 10-K filed with the SEC on February 27, 2008. These amounts reflect the Company’s accounting expense, and do not correspond to the actual value that will be realized by the directors. The amount reported for Mr. Castellani reflects the accounting expense for stock options granted to him during his tenure as our past chief executive officer and chairman and other grants awarded to him under our director compensation arrangements, all of which continue to vest during his service as a director. |
(d) | Amounts reported are the value of dividends earned on DSUs and converted to additional DSUs. |
(e) | Compensation reported for Mr. Brouillard includes additional DSUs and stock options awarded to him by the Board of Directors when he assumed the role of interim Chief Executive Officer in May 2007. The amounts reported in this table for “Stock Awards”, “Option Awards” and “All Other Compensation” are also reported in the Summary Compensation Table. Reported cash compensation for Mr. Brouillard includes the normal board compensation fees paid to him prior to when he became Interim Chief Executive Officer in 2007. Refer to the Summary Compensation Table for compensation paid to Mr. Brouillard while he served as Interim Chair, President, and Chief Executive Officer. |
Name
|
Outstanding
Stock
Options
(#)
|
Outstanding
Deferred
Stock
Units
(#)
|
||
John
C. Brouillard
|
37,500
|
4,476
|
||
Lawrence
P. Castellani (a)
|
750,000
|
1,660
|
||
Darren
R. Jackson
|
28,750
|
3,191
|
||
Nicholas
J. LaHowchic
|
15,000
|
2,264
|
||
William
S. Oglesby
|
26,875
|
4,741
|
||
Gilbert
T. Ray
|
36,250
|
3,539
|
||
Carlos
A. Saladrigas
|
52,500
|
3,330
|
||
William
L. Salter
|
48,124
|
3,679
|
||
Francesca
M. Spinelli
|
56,250
|
3,747
|
(a)
|
Outstanding
stock options for Mr. Castellani reflect those awarded to him during his
tenure as our past chief executive officer and chairman and other grants
awarded to him under our director compensation arrangement, all of which
continue to vest during his service as a
director.
|
Name
|
Age
|
Position
|
|||
Darren R. Jackson |
43
|
President
and Chief Executive Officer and Director
|
|||
Kevin
P. Freeland
|
50
|
Executive
Vice President, Supply Chain and Information Technology
|
|||
Elwyn G. Murray III |
41
|
Executive
Vice President, Customer Development Officer
|
|||
Michael
A. Norona
|
44
|
Executive
Vice President, Chief Financial Officer and Secretary
|
|||
Jimmie
L. Wade
|
53
|
Executive
Vice President, Customer Experience Officer
|
|||
Keith
A. Oreson
|
51
|
Senior
Vice President, Human Resources
|
● |
each
person or entity known to us that beneficially owns more than 5 percent of
our common stock;
|
● |
each
member of our Board;
|
● |
each
of our executive officers named in the “Summary Compensation Table”
included in the “Executive Compensation” section of this proxy statement;
and
|
● |
all
directors and executive officers as a
group.
|
Shares
Beneficially
Owned
|
||||||
Name
of Beneficial Owner
|
Number
|
Percentage
|
||||
FMR,
LLC.(1)
82
Devonshire Street
Boston,
Massachusetts 02109
|
8,391,676
|
8.9%
|
||||
John
C. Brouillard(2)
|
29,932
|
*
|
||||
Lawrence
P. Castellani(3)
|
772,792
|
*
|
||||
Darren
R. Jackson(4)
|
136,726
|
*
|
||||
Nicholas
J. LaHowchic(5)
|
15,768
|
*
|
||||
William
S. Oglesby(6)
|
26,624
|
*
|
||||
Gilbert
T. Ray(7)
|
37,395
|
*
|
||||
Carlos
A. Saladrigas(8)
|
48,335
|
*
|
||||
William
L. Salter(9)
|
46,184
|
*
|
||||
Francesca
M. Spinelli(10)
|
54,003
|
*
|
||||
Michael
O. Moore
|
-
|
*
|
||||
Jimmie
L. Wade(11)
|
493,991
|
*
|
||||
Elwyn
G. Murray III(11)
|
187,132
|
*
|
||||
Paul
W. Klasing(11)(12)
|
399,713
|
*
|
||||
Michael
N. Coppola
|
318
|
*
|
||||
David
B. Mueller
|
350
|
*
|
||||
All
executive officers and directors as a group (18 persons)(13)
|
2,418,474
|
2.5%
|
* | Less than 1 percent of the outstanding shares of common stock. |
(1) | Based solely on a Schedule 13G filed with the SEC by FMR LLC (“FMR”) and Edward C. Johnson, 3rd, all such shares are beneficially owned by four entities: (a) Fidelity Management & Research Company, a registered investment advisor to various investment companies (“Fidelity Funds”) and a wholly-owned subsidiary of FMR (“FM&RC”), (b) Pyramis Global Advisors, LLC (“PGALLC”), an indirect wholly-owned subsidiary of FMR and a registered investment advisor, (c) Pyramis Global Advisors Trust Company (“PGATC”), an indirect wholly-owned subsidiary of FMR and a bank and (d) Fidelity International Limited (“FIL”), a qualified institution. FM&RC is the beneficial owner of 5,906,836 shares. Mr. Johnson (Chairman of FMR), FMR (through its control of FM&RC) and Fidelity Funds each has sole dispositive power with respect to 5,906,836 shares. Neither Mr. Johnson nor FMR has the sole power to vote or direct the voting of the shares owned directly by Fidelity Funds. The sole voting power of all shares directly owned by Fidelity Funds resides with the Board of Trustees of such funds. PGALLC is the beneficial owner of 200,000 shares. Mr. Johnson and FMR (through its control of PGALLC) each has sole dispositive and voting power with respect to 200,000 shares. PGATC is the beneficial owner of 1,681,940 shares. Mr. Johnson and FMR (through its control of PGATC) each has sole dispositive and voting power with respect to |
1,681,940
shares. FIL is the beneficial owner of 602,900 shares of which it has sole
dispositive power of 602,900 shares and sole voting power of 509,100
shares.
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(2)
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Includes
4,484 shares of our common stock with respect to DSUs and 25,000 shares of
our common stock subject to options exercisable within 60 days of March
24, 2008.
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(3)
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Includes
1,663 shares of our common stock issuable with respect to DSUs and 742,500
shares of our common stock subject to options exercisable within 60 days
of March 24, 2008.
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(4)
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Includes
110,000 shares of our common stock with respect to restricted common
stock; 5,476 shares of our common stock issuable with respect to DSUs; and
21,250 shares of our common stock subject to options exercisable within 60
days of March 24, 2008.
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(5)
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Includes
2,268 shares of our common stock issuable with respect to DSUs and 7,500
shares of our common stock subject to options exercisable within 60 days
of March 24, 2008.
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(6)
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Includes
4,749 shares of our common stock issuable with respect to DSUs and 19,375
shares of our common stock subject to options exercisable within 60 days
of March 24, 2008.
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(7)
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Includes
3,545 shares of our common stock issuable with respect to DSUs and 28,750
shares of our common stock subject to options exercisable within 60 days
of March 24, 2008.
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(8)
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Includes
3,335 shares of our common stock issuable with respect to DSUs and 45,000
shares of our common stock subject to options exercisable within 60 days
of March 24, 2008.
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(9)
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Includes
3,685 shares of our common stock issuable with respect to DSUs and 40,624
shares of our common stock subject to options exercisable within 60 days
of March 24, 2008.
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(10)
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Includes
3,753 shares of our common stock issuable with respect to DSUs and 48,750
shares of our common stock subject to options exercisable within 60 days
of March 24, 2008.
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(11) |
Includes
shares of our common stock subject to options and SARs beneficially owned
by the following persons and exercisable within 60 days of March 24, 2008:
Mr. Klasing – 362,605; Mr. Murray – 169,806; and Mr. Wade –
447,007. Also includes shares of our restricted stock owned by
the following persons: Mr. Klasing – 7,108 shares; Mr. Murray –
16,326 shares; and Mr. Wade – 16,984 shares.
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(12)
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Includes
indirect ownership of 30,000 shares held by Mr. Klasing’s
wife.
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(13)
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Includes
219,462 shares of our common stock with respect to restricted common
stock; 36,021 shares of our common stock issuable with respect to DSUs;
and 2,055,271 shares of our common stock subject to options and SARs
beneficially owned and exercisable within 60 days of March 24, 2008 by our
executive officers and directors.
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Directors | Stock valued at 3 times their annual retainer |
Chairman, President and CEO | Stock valued at 3 times their annual base salary |
Other Executive Committee Members | Stock valued at 1 times their annual base salary |