summary and a copy of the correspondence is forwarded to the Chairman of the Audit Committee. Additionally, at the direction of the Audit Committee, the Company has established a worldwide toll free hotline administered by an independent third party through which employees may make anonymous submissions regarding questionable accounting or auditing matters. Reports of any anonymous submissions are sent to the Chairman of the Audit Committee andas well as the Senior Vice President and General Counsel of the Company.
Each director is expected to devote sufficient time, energy and attention to ensure diligent performance of his or her duties and to attend all Board, committee and shareholders’ meetings. The Board met seven times during 2007,2009, of which four were regularly scheduled meetings and three of which were unscheduled meetings. The Board also acted twice by unanimous written consent in 2009. All directors attended at least 75% of the meetings of the Board and of the committees on which they served during the fiscal year ended December 31, 2007.2009. All of the directors attended the 20072009 Annual Meeting of Shareholders on May 24, 2007.20, 2009.
Committee. When appropriate, the Committee has discussions with its consultant without management present to ensure candor and impartiality.
Setting Executive Compensation
Based on the foregoing objectives, the Committee has structured the Company’s annual and long-term incentive-based cash and non-cash executive compensation program to motivate executives to achieve the business goals set by the Company and reward the executives for achieving those goals. The Committee meets on at least an annual basis with the Chief Executive Officer and representatives of Human Resources which together recommends a compensation outline for the executive management team other than the Chief Executive Officer. In furtherance of these goals, the Committee engaged Mercer Human Resource Consulting, a division of Marsh & McLennan Companies (“Mercer”), to conduct a review of its total compensation program for all executive officers specifically including the President and Chief Executive Officer and the Chief Financial Officer as well as the other named executive officers. Mercer provided the Committee with relevant market data and alternatives to consider when making compensation decision for the President and Chief Executive Officer, and on the recommendations being made by management for executives other than the President and Chief Executive Officer.
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In making its compensation decisions for 2007,2009, the Committee compared each element of total compensation against a peer group of ten (10)twelve (12) other publicly traded companies which(the “Compensation Peer Group”). The Committee selected the Committee believescompanies included in the Compensation Peer Group because they compete with the Company in the customer contact management segmentor business process outsourcing segments or are of a similar size in revenue, located in generally the same geographical location as the Company and have a similar business model, therefore competing with the Company for executive talent as well (the “Compensation Peer Group”).talent. The composition of the Compensation Peer Group will beis reviewed annually to determine whether there are new companies which should be added, or existing companies which should be deleted. The other companies included in the Compensation Peer Group and used as the basis for comparison and analysis by the Committee for fiscal year 20072009 were:
| | |
• PeopleSupport, Inc. Genpact, Ltd. | | • StarTek, Inc. |
• Keane,Kforce, Inc. | | • TechTeam Global, Inc. |
• Affiliated Computer Services,ExlService Holdings, Inc. | | • Alliance Data Systems |
• Convergys Corporation | | • TeleTech Holdings, Inc. |
• ICT Group, Inc. | | • APAC Customer Services, Inc. |
• MPS Group, Inc. | | • Spherion Corp. |
The only change in the Compensation Peer Group from 2008 to 2009 was the elimination of Etelecare Global Solutions due to its acquisition by a competitor.
As a result of the Committee’s belief that incentive compensation for its executives should be directly related to the Company’s performance, the Committee requested that Mercer perform a comparison of 73 general categories, (growth measures, margin measures, and shareholder measures) which included 11 specific performance metrics of the Company on both a1-year and3-year comparison against the Compensation Peer Group. The growth performance metrics measured werewere: (a) 1-year sales growth,revenue, (b) 1-year diluted earnings per share growth,net income, (c) 1-year free cash flow, growth,(d) diluted EPS, and (e) EBITDA. The margin performance metrics measured were: (a) gross profit, (b) net profit, (c) operating income, and (d) EBITDA. The margin performance measures were defined as: (a) gross profit margin — revenues less cost of goods sold divided by revenues; (b) net profit margin — income before extraordinary items divided by revenues; (c) operating income margin — operating income before depreciation and amortization divided by revenues; and (d) EBITDA margin (e) operating income margin, (f) net profit margin, and(g) 3-year annualized— EBITDA divided by revenues. The shareholder performance metrics measured were: (a) total shareholder return.return as of12/31/08 and (b) price to earnings ratio as of12/31/08. Based upon fiscal year end 20062008 figures, the Company exceeded the Compensation Peer Group growth performance metrics at the 75th percentile in all of the five (5) measured metrics on a1-year comparison, and exceeded the Compensation Peer Group at the 50th percentile on two (2) of the five measured metrics and at the 75th percentile on another two (2) of the five (5) measured metrics on a3-year comparison. The Company exceeded the Compensation Peer Group margin performance metrics at the 50th percentile in six (6)one (1) of the seven (7)four (4) measured metrics. Atmetrics, and at the 75th percentile on the other three (3) on a1-year comparison, and exceeded the Compensation Peer Group margin
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performance metrics at the 50th percentile on two (2) of the measured metrics, and at the 75th percentile on the other two (2) measured metrics on a3-year comparison. The Company exceeded the Compensation Peer Group shareholder performance inmetrics at the 50th percentile on one (1) of the two (2) measured metrics, and ranked number one on the other on a1-year comparison, and exceeded the Compensation Peer Group at the 50th percentile on (1) of the seven (7) measured metrics.metrics, and ranked number 1 on the other measured metric on a3-year comparison. Based upon the measures and weightings used by Mercer in its analysis, the Company ranked third in overallexceeded the performance out of all companies in the Compensation Peer Group.Group’s overall performance at the 75th percentile on a1-year comparison, and at approximately the 70th percentile on a3-year comparison.
When comparing the average aggregate total cash compensation paid by the Company in 20062008 to its top five (5)four (4) highest paid proxy-named executive officers to that paid by the Compensation Peer Group, the Company ranked third (3just above the 50rdth) out percentile, with the Chief Executive Officer ranking at the top end of the eleven. Current50th percentile. Average current salaries of the Company’s named executive officers, and the entire executive management team, are atalso just above the 50th percentile of the Compensation Peer Group.Group, with the Chief Executive Officer ranking at the top end of the 50th percentile. When comparing average aggregate total direct compensation paid by the Company in 20062008 to its top five (5)four (4) highest paid proxy-named executive officers to that paid by the Compensation Peer Group, the Company ranked fourth (4between the 50th) out of and 75th percentiles, with the eleven.Chief Executive Officer also ranking between the 50th and 75th percentiles.
The Committee believes that it should generally set compensation of its executives in the general range of 80% to 120% of the 50th percentile of compensation paid to similarly situated executives of the companies comprising the Compensation Peer Group. However, variations from this objective may occur as dictated by the experience level of the individual and other market factors. The Committee recognizes, however, that long – term,long-term, equity incentive compensation awards may lift the total direct compensation of its executives above the 50th percentile of the Compensation Peer Group, but if that occurs, it will be as a result of the Company’s achievement of long term goals specifically targeted at increasing shareholder value.
A significant percentage of total compensation to our senior executives is allocated to performance-based incentives as a result of the philosophy mentioned above. ThereAlthough there is no pre-established policy or target for the allocation between either cash and non-cash or short-term and long-term performance-based incentive compensation. Rather,compensation, in 2009 the Committee reviewed(with the advice and recommendations of Mercer) continued the structure utilized in 2008, which determined performance-based incentives as a percentage of base salary validated against current market data. The recommendations provided by Mercer were based upon a review of the peer group and industry standards, together with of each of the senior executive’s existing compensation and performance as relayed by the Chief Executive Officer, and requested that Mercer re-evaluate its recommendations based upon
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comments and suggestions from the Committee. The revised recommendations of Mercer ultimately formed the basis of the Committee’s senior executive compensation structure for 2007.Officer. Income from such incentive compensation is realized as a result of the performance of the Company or the individual, depending on the type of award, compared to established goals. During the three (3) years prior to 2006, the compensation granted by the Committee to our senior executives was almost exclusively in the form of cash. Beginning in 2006, the Committee determined that to be effective over the long term, the compensation policy of the Company must require that a significant portion of total direct compensation be in the form of long-term equity incentive grants and, therefore, a significant percentage of total direct compensation to our executive officers in fiscal yearyears 2007 wasthrough 2009 has been in the form of non-cash, long-term equity incentive awards.
Elements of Compensation
The current compensation program for our executives includes several direct compensation components. Those components are base salary, annual cash incentive awards and equity-based incentive awards, which are currently granted in the form of performance — basedperformance-based restricted stock (or restricted stock units), time-vested restricted
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stock and stock appreciation rights. Our executives are also permitted to participate in our 401(k) plan which is available to all employees, as well as our non-qualified executive deferred compensation plan. The purpose of the deferred compensation plan is to provide our executives with the ability to take advantage of tax deferred savings which may not be fully available to them under our 401(k) plan.
Base Salary
Base salary is designed to provide each executive with a fixed amount of annual compensation that is competitive with the marketplace. Having a certain level of fixed compensation provides stability which allows our executives to remain focused on business issues. Base salaries for the named executive officers are determined for each executive based on his or her position and responsibility by using market data provided to the Committee by Mercer. Base salary ranges of our executives are designed so that salary opportunities for a given position will be approximately between 80% and 120% of the midpoint of the base salaries of similarly positioned executives in the Compensation Peer Group. During its review of base salaries for executives, the Committee primarily considers (a) the market data provided by Mercer, (b) internal review of the executive’s compensation, both individually and relative to other officers, and (c) individual performance of the executive. Salary levels are typically considered annually as part of the Company’s performance review process as well as upon a promotion or other change in job responsibility. Merit based increases to salaries of our executive leadership team, other than the President and Chief Executive Officer, are based on the Committee’s assessment of the individual’s performance, with input from the President and Chief Executive Officer. A review of relevant market data in 2008 by Mercer indicated that the base salaries of the named executive officers were in line with the benchmarking parameters established by the Committee. Although the Company generally outperformed the Compensation Peer Group, the Committee determined that the compensation of the named executive officers related to Company performance was being adequately addressed through yearly and long term incentive bonuses. Accordingly, the Committee recommended to the Board, and the Board approved that there be no adjustments made to the base salaries of the named executive officers in 2009. Additionally, the Committee has made no recommendations for adjustments to base salaries of the named executive officers for 2010 as of the date of the proxy statement.
Performance-Based Annual Cash Incentive Compensation
The annual cash incentive component of the total direct compensation paid to our executive leadership team is designed to award achievement of pre-determined annual corporate, and sometimes individual, performance goals. The annual incentive awards are designed to reward current performance by basing payment on the achievement of quantifiable performance measures that reflect contributions to the success of our business. The annual incentive program is intended to encourage actions by the executives that contribute directly to our operating and financial results. In fiscal year 2007,2009, the annual cash incentive component of total direct compensation paid to the President and Chief Executive Officer, and all other executive officers, (except for the Senior Vice President, General Counsel and Secretary and the Senior Vice President of Real Estate), was determined based solely upon the achievement of pre-determined corporate financial goals. The annual cash incentive component of total direct compensation paid to
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the Senior Vice President, General Counsel and Secretary was determined based 50% upon the achievement of pre-determined corporate financial goals, and 50% upon the achievement of pre-determined individual performance goals. The annual cash incentive component of total direct compensation paid to the Senior Vice President, Real Estate was based solely upon the achievement of pre-determined individual performance goals.
At the beginning of the year, the Committee sets minimum, target and maximum levels for the portion of the cash incentive component of total direct compensation that is determined by reference to corporate financial performance. Threshold performance represents the minimum performance that still warrants incentive recognition for that particular goal, and is paid at 50% of the target award level. Maximum performance represents the highest
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level likely to be attained and is paid at 150% of the target award level. No annual performance basedperformance-based cash incentive compensation determined by reference to corporate financial performance is paid to any executive of the Company if our financial results do not exceed the threshold determined for that year. At the beginning of each year, the Committee also sets the award percentage tied to salary for the President and Chief Executive Officer and recommends an award percentage for each of the other members of the executive leadership team that they will receive if the performance goals are met. The Committee’s goal in setting target award levels is to create a compensation program such that the potential incentive awards, when combined with each officer’s base salary, will provide a fully competitive total cash compensation opportunity, with the portion of compensation “at risk” (i.e., the target award level) being reflective of the level of that officer’s accountability for contributing to bottom line financial results, and the degree of influence that officer has over results. In setting these percentages, the Committee considers these factors as well as data from the market assessment provided by Mercer. In 2007,2009, the target award percentages were set at 75%100% of base salary for the President and Chief Executive Officer, 60%70% of base salary for the Chief Financial Officer, and between 30% and 50%60% of base salary for each of the other named executive officers and members of the executive leadership team.
For fiscal year 2007,2009, the Committee establishedmet with management and reviewed the Company’s operating plan for 2009 to establish the target financial goal of the Company on which the annual performance basedperformance-based cash incentive compensation awards would be based as $40,670,000based. The Committee determined that goal to be $52,853,000 of consolidated earnings before taxes. The amount each named executive officer received in 20072009 under our annual performance basedperformance-based cash incentive compensation program has been reported in the Summary Compensation Table in the Non-Equity Incentive Compensation column. In years prior to 2006, these amounts were reported under the bonus column of the predecessor to the Summary Compensation Table.
Each of the named executive officers for the fiscal year ended December 31, 2007,2009, received the following payments in March 20082010 as payment of the annual cash performance bonus earned for fiscal year 20072009 performance.
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| | 2007 Annual Cash
| | 2009 Annual Cash
|
Name | | Performance Bonus | | Performance Bonus |
|
Charles E. Sykes | | $ | 468,750 | | | $ | 582,570 | |
W. Michael Kipphut | | $ | 276,375 | | | $ | 296,588 | |
James C. Hobby | | $ | 190,625 | | | $ | 213,226 | |
Lawrence R. Zingale | | $ | 190,625 | | | $ | 204,646 | |
David L. Pearson | | $ | 132,452 | | |
James T. Holder | | | $ | 114,399 | |
Subsequent to the end of fiscal year 2009, the Compensation Committee recommended to the Board, and the Board approved, a special recognition cash bonus to various individuals for extraordinary efforts in connection with the successful acquisition of ICT Group, Inc. The amount of each bonus was determined by a review of each individual’s specific contribution, including objective criteria such as additional hours worked and subjective criteria such as specialized expertise. Included in the group receiving a special recognition bonus were W. Michael Kipphut, who received $187,500, and James T. Holder, who received $106,250.
Performance-Based, Long-Term, Equity Incentive Compensation
The long-term, performance-based equity incentive compensation component of total direct compensation for our executives is designed to encourage them to focus on long-term Company performance and provides an opportunity for executive officers and certain designated key employees to increase their stake in the Company
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through grants of the Company’s common stock based on a three-year performance cycle. The Committee currently utilizes a combination of restricted stock (or restricted stock units for executives and key employees in foreign
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countries who would suffer unfavorable tax consequences due to local tax laws if they were to receive restricted stock) and time vested stock appreciation rights (“SARs”). The Committee’s purpose for utilizing SARs as a component of executive long-term incentive bonus compensation is to align that portion of bonus compensation directly with shareholder interest in stock appreciation The Company has not issued stock options since 2003. By using a mix of restricted stock and SARs, the Company is able to compensate executives for sustained increases in the Company’s stock performance. The restricted stock component is only earned when certain Company financial performance goals are attained, and the full value is maximized when the value of the Company’s stock increases. The SARs awarded to executive officers represent the right to receive, on the specified dates, that number of shares of the Company’s common stock determined by dividing (i) the total number of shares of stock subject to the SAR being exercised by the Participant, multiplied by the amount by which the fair market value of a share of the Company’s common stock on the day the right is exercised exceeds the fair market value of a share of the Company’s common stock on the date of grant of the SAR (the “Spread”), by (ii) the fair market value of a share of the Company’s common stock on the exercise date. The Committee believes both of these components of performance-based long-term equity incentive compensation directly align the interests of the Company’s executives with the interests of its shareholders. The Committee’s goal in setting target long-term equity incentive award levels is to create a complete compensation program, such that the potential annual cash and long-term equity incentive awards, when combined with each officer’s base salary, will provide a fully competitive total compensation opportunity, with there being a significant portion of potential compensation “at risk.” In setting award percentages (which are tied to salary), the Committee considers the level of each officer’s accountability for contributing to bottom line financial results, and the degree of influence that officer has over results, as well as data from the market assessment provided by Mercer.
In setting financial targets, the Committee recognizes the benefit of rewarding achievement of revenue and income goals independently. Due to the effort and skill necessary to translate top line revenue into the desired level of bottom line net income, the Committee determined, based upon benchmarking data provided by Mercer as applied to specific economic dynamics of the Company, that one-third of the performance-based long-term equity incentive compensation would be based upon attainment of revenue goals and two-thirds would be based upon the attainment of income goals, all as recommended by the Committee to the Board each year. The Committee believes that incentives tied to revenue, income and stock performance provide a balanced program most closely aligning management and shareholder interests. Utilizing this framework, the Committee meets with management each year to review the proposed operating plan for the upcoming year, and in conjunction with the Board approval of an operating plan, together with growth goals for the succeeding two years, sets the financial targets for the next three-year performance cycle. The Committee first utilized this method for determining long-term incentive compensation on a three-year performance cycle for the performance cycle beginning January 1, 2005.
2005 through 2007 Performance Cycle. In May, 2006, the Committee established the target level of Company financial performance for the performance-based long-term equity incentive component of total direct compensation that would be used to determine awards to certain of the named executive officers and other executive officers for the three-year performance cycle beginning on January 1, 2005 and ending on December 31, 2007. Forhas continued utilizing this three-year performance cycle, the awards were only to be paid if the Company reached the established target level of financial performance, and in that event, the payment would be made at 100% of the established awards. There was no opportunity for the participating executives to earn more than that amount under the long-term equity incentive component of compensation for this three-year measurement cycle. For the three-year performance cycle beginning in fiscal year 2005, the Committee made awards of performance-based restricted stock (or restricted stock units, as the case may be) and cash only. The target award percentages were set at 60% of base salary for both the President and Chief Executive Officer and the Chief Financial Officer, and between 35% and 50% of base salary for each of the other named executive officers and members of the executive leadership team. Twenty five (25) percent of the full award value was to be paid in cash to alleviate some of the tax burden associated with the delivery of the stock. The financial targets were achieved and the stock was delivered to the award recipients on April 1, 2008.method through 2010.
2006 through 2008 Performance Cycle. In May, 2006, the Committee also established minimum, target and maximum Company financial performance levels for the performance-based long-term equity incentive component of total direct compensation that willwere to be used to determine awards to certain of the named executive officers, other executive officers and certain key employees for the three-year performance cycle beginning on January 1, 2006 and ending on December 31, 2008. Threshold performance representsrepresented the minimum performance that still warrantswarranted incentive recognition for that particular goal, and iswas to be paid at 80% of the target award level. Maximum performance representsrepresented the highest level likely to be attained and iswas to be paid at 150% of the target award level. None of the restricted
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stock awards will vest and bewould have vested or have been delivered to any executive of the Company if our financial results dohad not exceedexceeded the threshold determined for that three-year measurement period. For the three-year performance cycle beginning in fiscal year 2006, the Committee made awards of performance-based restricted stock (or restricted stock units as the case may be) and time vesting SARs. The target award
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percentages for performance basedperformance-based restricted stock were set at 133% of base salary for the President and Chief Executive Officer, 80% of base salary for the Chief Financial Officer, and between 20% and 67% of base salary for each of the other named executive officers, members of the executive leadership team and other key employees. The target award percentages for SARs were set at 67% of base salary for the President and Chief Executive Officer, 40% of base salary for the Chief Financial Officer, and between 20% and 33% of base salary for each of the other named executive officers and members of the executive leadership team. The target goal for two thirdstwo-thirds of the performance-based restricted share awards was established by the Committee to be that income from operations of the Company, as reported in its audited Consolidated Statement of Operations, has increased during fiscal years 2006, 2007 and 2008 (measured as of December 31, 2008) at least in an amount equal to 10% compounded annual growth over the amount reported for the 2005 fiscal year. The target goal for one thirdone-third of the performance-based restricted share awards iswas that gross revenue from operations of the Company, as reported in its audited Consolidated Statements of Operations, has increased during fiscal years 2006, 2007 and 2008 (measured as of December 31, 2008) at least in an amount equal to 4% compounded annual growth over the amount reported for the 2005 fiscal year. The SAR awards vestvested in equal one thirdone-third amounts based upon the executive being employed by the Company on each of March 29, 2007, March 29, 2008 and March 29, 2009. The financial targets were achieved at the 150% level and the stock was delivered to the award recipients on March 30, 2009.
2007 through 2009 Performance Cycle. In December, 2006, the Committee established minimum, target and maximum Company financial performance levels for the performance-based long-term equity incentive component of total direct compensation that willwere to be used to determine awards to certain of the named executive officers, other executive officers and certain key employees for the three-year performance cycle beginning on January 1, 2007 and ending on December 31, 2009. Threshold performance representsrepresented the minimum performance that still warrantswarranted incentive recognition for that particular goal, and iswould be paid at 80% of the target award level. Maximum performance representsrepresented the highest level likely to be attained and iswould be paid at 150% of the target award level. None of the restricted stock awards will vest and bewould have vested or have been delivered to any executive of the Company if our financial results dohad not exceedexceeded the threshold determined for that three-year measurement period. For the three-year performance cycle beginning in fiscal year 2007, the Committee made awards of performance-based restricted stock (or restricted stock units as the case may be) and time vesting SARs. The target award percentages for performance based restricted stock were set at 133% of base salary for the President and Chief Executive Officer, 80% of base salary for the Chief Financial Officer, and between 20% and 67% of base salary for each of the other named executive officers, members of the executive leadership team and other key employees. The target award percentages for SARs were set at 67% of base salary for the President and Chief Executive Officer, 40% of base salary for the Chief Financial Officer, and between 20% and 33% of base salary for each of the other named executive officers and members of the executive leadership team. The target goal for two thirdstwo-thirds of the performance-based restricted share awards was established by the Committee to be that income from operations of the Company, as reported in its audited Consolidated Statement of Operations during fiscal years 2007, 2008 and 2009 (measured from January 1, 2007 through December 31, 2009) equalsequaled at least $110,210,000. The target goal for one third of the performance-based restricted share awards iswas that gross revenue from operations of the Company, as reported in its audited Consolidated Statements of Operations (measured from January 1, 2007 through December 31, 2009) equalsequaled at least $1,992,000,000. The SAR awards vestvested in equal one thirdone-third amounts based upon the executive being employed by the Company on each of March 29, 2008, March 29, 2009 and March 29, 2010. The financial targets were achieved at the 150% level and the stock was delivered to the award recipients on March 5, 2010.
2008 through 2010 Performance Cycle. In December, 2007, the Committee established minimum, target and maximum Company financial performance levels for the performance-based long-term equity incentive component of total direct compensation that will be used to determine awards to certain of the named executive officers, other
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executive officers and certain key employees for the three-year performance cycle beginning on January 1, 2008
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and ending on December 31, 2010. Threshold performance represents the minimum performance that still warrants incentive recognition for that particular goal, and is paid at 80% of the target award level. Maximum performance represents the highest level likely to be attained and is paid at 150% of the target award level. None of the restricted stock awards will vest and be delivered to any executive of the Company if our financial results do not exceed the threshold determined for that three-year measurement period. For the three-year performance cycle beginning in fiscal year 2008, the Committee made awards of performance-based restricted stock (or restricted stock units as the case may be) and time vesting SARs. The target award percentages for performance based restricted stock were set at 133% of base salary for the President and Chief Executive Officer, 80% of base salary for the Chief Financial Officer, and between 20% and 67% of base salary for each of the other named executive officers, members of the executive leadership team and other key employees. The target award percentages for SARs were set at 67% of base salary for the President and Chief Executive Officer, 40% of base salary for the Chief Financial Officer, and between 20% and 33% of base salary for each of the other named executive officers and members of the executive leadership team. The target goal for two thirds of the performance-based restricted share awards was established by the Committee to be that income from operations of the Company, as reported in its audited Consolidated Statement of Operations, during fiscal years 2008, 2009 and 2010 (measured from January 1, 2008 through December 31, 2010) equals at least $183,720,000. In December, 2009, in an effort to remove any management disincentive in connection with the 2010 acquisition of ICT Group, Inc. (the “ICT Transaction”), the Committee recommended, and the Board approved, that this target be adjusted downward by the sum of: (a) depreciation related to assets acquired in the ICT Transaction that were revalued for accounting purposes and will be depreciated in the future, and amortization of intangibles related to the ICT Transaction; (b) costs to obtain synergies from the ICT Transaction; (c) ICT Transaction costs; and (d) restructuring and impairment charges incurred in 2010 related to the ICT Transaction. The target goal for one third of the performance-based restricted share awards is that gross revenue from operations of the Company, as reported in its audited Consolidated Statements of Operations during fiscal years 2008, 2009 and 2010 (measured from January 1, 2008 through December 31, 2010) equals at least $2,388,953,000. The SARsSAR awards vest in equal one third amounts based upon the executive being employed by the Company on each of January 2, 2009, January 2, 2010 and January 2, 2011.
2009 through 2011 Performance Cycle. In December, 2008, the Committee established minimum, target and maximum Company financial performance levels for the performance-based long-term equity incentive component of total direct compensation that will be used to determine awards to certain of the named executive officers, other executive officers and certain key employees for the three-year performance cycle beginning on January 1, 2009 and ending on December 31, 2011. Threshold performance represents the minimum performance that still warrants incentive recognition for that particular goal, and is paid at 80% of the target award level. Maximum performance represents the highest level likely to be attained and is paid at 150% of the target award level. None of the restricted stock awards will vest and be delivered to any executive of the Company if our financial results do not exceed the threshold determined for that three-year measurement period. For the three-year performance cycle beginning in fiscal year 2009, the Committee made awards of performance-based restricted stock (or restricted stock units as the case may be) and time vesting SARs. The target award percentages for performance based restricted stock were set at 183% of base salary for the President and Chief Executive Officer, 93% of base salary for the Chief Financial Officer, and between 20% and 93% of base salary for each of the other named executive officers, members of the executive leadership team and other key employees. The target award percentages for SARs were set at 92% of base salary for the President and Chief Executive Officer, 47% of base salary for the Chief Financial Officer, and between 23% and 47% of base salary for each of the other named executive officers and members of the executive leadership team. The target goal for two thirds of the performance-based restricted share awards was established by the Committee to be that income from operations of the Company, as reported in its audited Consolidated Statement of Operations, during fiscal years 2009, 2010 and 2011 (measured from January 1, 2009 through December 31,
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2011) equals at least $230,351,000. In December, 2009 in an effort to remove any management disincentive in connection with the ICT Transaction, the Committee recommended, and the Board approved, that this target be adjusted downward by the sum of: (a) depreciation related to assets acquired in the ICT Transaction that were revalued for accounting purposes and will be depreciated in the future, and amortization of intangibles related to the ICT Transaction; (b) costs to obtain synergies from the ICT Transaction; (c) ICT Transaction costs; and (d) restructuring and impairment charges incurred in 2010 related to the ICT Transaction. The target goal for one third of the performance-based restricted share awards is that gross revenue from operations of the Company, as reported in its audited Consolidated Statements of Operations during fiscal years 2009, 2010 and 2011 (measured from January 1, 2009 through December 31, 2011) equals at least $2,821,514,000. The SAR awards vest in equal one third amounts based upon the executive being employed by the Company on each of January 5, 2010, January 5, 2011 and January 5, 2012.
2010 through 2012 Performance Cycle. In March, 2010, the Committee established minimum, target and maximum Company financial performance levels for the performance-based long-term equity incentive component of total direct compensation that will be used to determine awards to certain of the named executive officers, other executive officers and certain key employees for the three-year performance cycle beginning on January 1, 2010 and ending on December 31, 2012. Threshold performance represents the minimum performance that still warrants incentive recognition for that particular goal, and is paid at 80% of the target award level. Maximum performance represents the highest level likely to be attained and is paid at 150% of the target award level. None of the restricted stock awards will vest and be delivered to any executive of the Company if our financial results do not exceed the threshold determined for that three-year measurement period. For the three-year performance cycle beginning in fiscal year 2010, the Committee made awards of performance-based restricted stock (or restricted stock units as the case may be) and time vesting SARs. The target award percentages for performance based restricted stock were set at 183% of base salary for the President and Chief Executive Officer, 93% of base salary for the Chief Financial Officer, and between 20% and 93% of base salary for each of the other named executive officers, members of the executive leadership team and other key employees. The target award percentages for SARs were set at 92% of base salary for the President and Chief Executive Officer, 47% of base salary for the Chief Financial Officer, and between 23% and 47% of base salary for each of the other named executive officers and members of the executive leadership team. The target goal for two thirds of the performance-based restricted share awards was established by the Committee to be that Adjusted Income from Operations of the Company during fiscal years 2010, 2011 and 2012 (measured from January 1, 2010 through December 31, 2012) equals at least $326,468,000. Adjusted Income from Operations means Operating Income, as reported in the Company’s audited Consolidated Statement of Operations, plus an amount equal to the sum of (a) depreciation related to assets acquired in the 2010 acquisition of ICT Group, Inc. (the ICT Transaction) that were revalued for accounting purposes and will be depreciated in the future, and amortization of intangibles related to the ICT Transaction; (b) costs to obtain synergies from the ICT Transaction; (c) ICT Transaction costs; and (d) restructuring and impairment charges incurred in 2010 related to the ICT Transaction. The target goal for one third of the performance-based restricted share awards is that gross revenue from operations of the Company, as reported in its audited Consolidated Statements of Operations during fiscal years 2010, 2011 and 2012 (measured from January 1, 2010 through December 31, 2012) equals at least $4,038,850,000. The SAR awards vest in equal one third amounts based upon the executive being employed by the Company on each of January 5, 2011, January 5, 2012 and January 5, 2013.
The amount each named executive officer received in 2007 as performance-based long-term equity incentive compensation for each of the three-year measurement periodperiods beginning in 2007, 2008 and 2009 has been reported in the summary compensation table in the Stock Awards column.
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Executive Deferred Compensation
Participation in the Executive Deferred Compensation Plan (the “DC“EDC Plan”) is limited to employees at the Director level and above within the Company’s organizational structure (currently, in ascending order, Directors, Senior Directors, Executive Directors, Vice Presidents, Senior Vice Presidents, and the President). including all of the named executive officers. Participants in the DCEDC Plan may elect to defer any amount of base compensation and bonus. The Company matches a portion of amounts deferred by participants at the level of Vice President and above on a quarterly basis as follows: 50% match on salary deferred, up to a total match of $12,000.00 per year for Senior Vice Presidents and above and $7,500.00 per year for Vice Presidents. No match is made on deferrals by other participants. The matching contributions made to the DCEDC Plan by the Company are made in the form of Company common stock.
Compensation deferred by a participant while participating in the DCEDC Plan is deferred until such participant’s retirement, termination, disability or death, or a change in control of the Company, as defined in the DCEDC Plan, and in such event is paid out to the participant or his beneficiary. Under current tax law, a participant does not recognize income with respect to deferred compensation until it is paid to him or her. Upon payment, the participant will recognize ordinary income in an amount equal to the sum of the cash and the fair market value of the shares of stock received, and the Company will be entitled to a deduction equal to the income recognized by the participant.
Distributions of the participants’a participant’s deferred compensation and Company stock contributed as matching contributions is made as soon as administratively feasible six months after retirement or termination of employment, unless the participant dies or becomes disabled while still an employee, in which case both distributions are made as soon as administratively feasible.on the first day of the second month following the death or disability.
19
In the event the participant terminates employment (for reasons other than death, disability or retirement) without participating in the DCEDC Plan for three years, the matching contributions and earnings attributable thereto are forfeited. In the event that a participant terminates employment after three years but less than five years of participation in the DCEDC Plan, the participant forfeits 67% of the matching contribution and earnings. In the event a participant terminates employment after five years but less than seven years of participation in the DCEDC Plan, the participant forfeits 33% of the matching contribution and earnings. In the event a participant terminates employment after seven years of participation in the DCEDC Plan, the participant is entitled to retain all of the matching contribution and earnings.
In the event of a distribution of benefits as a result of a change in control, the Company will increase the benefits for the Senior Vice Presidents and the President by an amount sufficient to offset the income tax obligations created by the distribution of benefits.
Participants forfeit undistributed matching contributions if the participant is terminated for “cause” as defined in the DCEDC Plan or the participant enters into a business or employment which the Company’s Chief Executive Officer determines to be in violation of any non-compete agreement between the participant and the Company.
Other Elements of Compensation
For our named executive officers, the amount of compensation shown under the Other Compensation column of the Summary Compensation Table represents less than 2% of their total compensation for the year. These amounts represented mainly Company matches to the DCEDC Plan, excess group term life insurance premiums and additional compensation paid to executive employees related to the cost of executive physicals and other health and welfare benefits. We also have change of control provisions in the employment agreements with our President and Chief Executive Officer, and our Chief Financial Officer, as well as in all of the equity incentive agreements with all
27
of our executives and key employees. The change of control provisions in the two employment agreements are “double-trigger” arrangements, meaning that payments are only made if there is a change in control of the Company and the officer’s employment is terminated without cause, or the officer terminates employment for good reason, as such terms are defined in their respective employment agreements. All of our employment agreements with the named executive officers, and the other executive officers, contain severance agreements ranging from one to three years in the event of termination by the Company other than for cause. These agreements are discussed in greater detail on page 3039 under “Potential Payments Upon Termination or Change of Control.” We believe that providing these agreements helps increase our ability to attract, retain and motivate highly qualified management personnel and encourage their continued dedication without distraction from concerns over job security relating, among other things, to a change in control of the Company.
Perquisites and Other Personal Benefits
The Company provides named executive officers with perquisites and other personal benefits that the Company and the Committee believe are reasonable and consistent with its overall compensation program to better enable the Company to attract and retain superior employees for key positions. The Committee periodically reviews the levels of perquisites and other personal benefits provided to named executive officers.
The named executive officers are permitted to fly in business class when traveling overseas on business and are permitted to attend sporting events utilizing Company paid tickets that are not otherwise utilized in connection with business development.
20
Tax and Accounting Implications
Deductibility of Executive Compensation
As part of its role, the Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, which provides that the Company may not deduct compensation of more than $1,000,000 per year that is paid to certain individuals. The Company believes that compensation paid under the management incentive plans is generally fully deductible for federal income tax purposes. However, in certain situations, the Committee may approve compensation that will not meet these requirements in order to ensure competitive levels of total compensation for its executive officers.
Nonqualified Deferred Compensation
On October 22, 2004, the American Jobs Creation Act of 2004 was signed into law, changing the tax rules applicable to nonqualified deferred compensation arrangements. While the finalFinal regulations have notnow become effective yet,and the Company believes it is operating in good faith compliancehas amended its agreements containing deferred compensation components to comply with the statutory provisions which were effective January 1, 2005.those regulations. A more detailed discussion of the Company’s nonqualified deferred compensation arrangements is provided on page 1927 under the heading “Executive Deferred Compensation.”
Accounting for Equity Based Compensation
Beginning on January 1, 2006, the Company began accounting for stock-based payments, including those under its long-term incentive programs, in accordance with the requirements of FASB ASC Topic 718 (formerly FAS Statement 123(R)).
28
Stock Ownership Guidelines
The Board has adopted stock ownership guidelines for the named executive officers and other members of the senior management team, which vary by position from 150% to 400% of base salary. These guidelines, which allow the executives five (5) years beginning January 1, 2008 to acquire this amount of stock, were adopted in 2006. The Committee will review share ownership of the Company’s executives on an annual basis to ensure that the executive officers are aware of where each stands in relation to the established guidelines. For purposes of the guidelines, stock ownership includes fully vested stock options, directly held common stock, time-vested restricted stock, performance shares and indirectly held shares that are considered beneficially owned under applicable SEC rules. We believe that these guidelines are appropriate to encourage our executive officers to hold a sufficient amount of our equity to create a mutuality of interest between our executive officers and our shareholders. These guidelines are aspirational in nature, but the Committee will review the status of officer stock ownership on an annual basis to monitor compliance.
COMPENSATION AND HUMAN RESOURCE DEVELOPMENT COMMITTEE REPORT
The Compensation and Human Resource Development Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) ofRegulation S-K with management and, based on such review and discussions, the Compensation and Human Resource Development Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
THE COMPENSATION AND HUMAN RESOURCE DEVELOPMENT COMMITTEE
Mark C. Bozek, Chairman
James K. Murray, Jr.
James S. MacLeod
2129
SUMMARY COMPENSATION TABLE
The table below summarizes the total compensation paid to, or earned by each of the named executive officers for the fiscal years ending December 31, 20062009, December 31, 2008 and December 31, 2007. The Company has entered into employment agreements with each of the named executive officers which are summarized under the section entitled “Employment Agreements” below. When setting the total compensation for each of the named executive officers, the Committee considers all of the executive’s current compensation, including equity and non-equity based compensation.
Except for the signing bonus paid to Mr. Zingale in 2006, theThe named executive officers were not entitled to receive payments which would be characterized as “Bonus” payments for the fiscal years ended December 31, 20072009, December 31, 2008 and December 31, 2006.2007. Amounts listed under column (g), “Non-Equity Incentive Plan Compensation” were paid in accordance with parameters determined by the Committee at its December 21, 20062, 2008, December 5, 2007 and March 15,December 21, 2006 meetings, respectively, and were paid in March 20082010, March, 2009 and March, 2007,2008 , respectively.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(a) | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | | | (j) | |
| | | | | | | | | | | | | | | | | | | | Change in
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | Pension Value
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | and
| | | | | | | |
| | | | | | | | | | | | | | | | | Non-Equity
| | | Nonqualified
| | | | | | | |
| | | | | | | | | | | | | | Option
| | | Incentive Plan
| | | Deferred
| | | All Other
| | | | |
| | | | | | | | | | | Stock
| | | Awards
| | | Compensation
| | | Compensation
| | | Compensation
| | | | |
| | | | | Salary
| | | Bonus
| | | Awards ($)
| | | ($)
| | | ($)
| | | Earnings
| | | ($)
| | | Total
| |
Name and Principal Position | | Year | | | ($) | | | ($) | | | (1) | | | (2) | | | (3) | | | ($) | | | (4) | | | ($) | |
|
Charles E. Sykes | | | 2007 | | | | 500,000 | | | | 0 | | | | 750,324 | | | | 219,600 | | | | 505,150 | | | | 0 | | | | 24,995 | | | | 2,000,069 | |
President and Chief Executive Officer | | | 2006 | | | | 518,990 | | | | 0 | | | | 321,413 | | | | 86,705 | | | | 590,103 | | | | 0 | | | | 14,144 | | | | 1,531,355 | |
W. Michael Kipphut | | | 2007 | | | | 368,500 | | | | 0 | | | | 358,798 | | | | 96,855 | | | | 299,125 | | | | 0 | | | | 33,522 | | | | 1,156,800 | |
Senior Vice President & Chief Financial Officer | | | 2006 | | | | 368,500 | | | | 0 | | | | 162,546 | | | | 38,150 | | | | 348,902 | | | | 0 | | | | 29,060 | | | | 947,158 | |
James C. Hobby | | | 2007 | | | | 303,270 | | | | 0 | | | | 232,894 | | | | 63,078 | | | | 205,185 | | | | 0 | | | | 21,684 | | | | 826,111 | |
Senior Vice President — Global Operations | | | 2006 | | | | 275,000 | | | | 0 | | | | 102,626 | | | | 23,488 | | | | 217,291 | | | | 0 | | | | 23,125 | | | | 641,530 | |
Lawrence R. Zingale(5) | | | 2007 | | | | 305,000 | | | | 0 | | | | 185,244 | | | | 66,457 | | | | 190,625 | | | | 0 | | | | 20,542 | | | | 767,868 | |
Senior Vice President — Global Sales and Client Management | | | 2006 | | | | 286,231 | | | | 25,000 | | | | 64,839 | | | | 26,050 | | | | 228,750 | | | | 0 | | | | 86,143 | | | | 717,013 | |
David L. Pearson | | | 2007 | | | | 211,923 | | | | 0 | | | | 134,544 | | | | 20,377 | | | | 147,012 | | | | 0 | | | | 23,694 | | | | 537,550 | |
Senior Vice President — Information Technology | | | 2006 | | | | 210,000 | | | | 0 | | | | 70,817 | | | | 17,936 | | | | 168,541 | | | | 0 | | | | 23,045 | | | | 490,339 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) |
| | | | | | | | | | | | | | Change in
| | | | |
| | | | | | | | | | | | | | Pension Value
| | | | |
| | | | | | | | | | | | | | and
| | | | |
| | | | | | | | | | | | Non-Equity
| | Nonqualified
| | | | |
| | | | | | | | Stock
| | Option
| | Incentive Plan
| | Deferred
| | All Other
| | |
| | | | Salary
| | | | Awards
| | Awards
| | Compensation
| | Compensation
| | Compensation
| | |
| | | | ($)
| | Bonus
| | ($)
| | ($)
| | ($)
| | Earnings
| | ($)
| | Total
|
Name and Principal Position | | Year | | (1) | | ($) | | (2) | | (2) | | (3) | | ($) | | (4) | | ($) |
|
Charles E. Sykes | | | 2009 | | | | 571,147 | | | | 0 | | | | 1,008,837 | | | | 504,167 | | | | 582,570 | | | | 0 | | | | 29,303 | | | | 2,696,023 | |
President and Chief Executive | | | 2008 | | | | 500,000 | | | | 0 | | | | 666,998 | | | | 333,333 | | | | 465,000 | | | | 0 | | | | 25,401 | | | | 1,990,732 | |
Officer | | | 2007 | | | | 500,000 | | | | 0 | | | | 666,669 | | | | 333,333 | | | | 468,750 | | | | 0 | | | | 24,995 | | | | 1,993,747 | |
W. Michael Kipphut | | | 2009 | | | | 415,390 | | | | 0 | | | | 373,519 | | | | 186,665 | | | | 296,588 | | | | 0 | | | | 30,540 | | | | 1,302,702 | |
Senior Vice President & Chief | | | 2008 | | | | 374,558 | | | | 0 | | | | 294,944 | | | | 147,400 | | | | 290,282 | | | | 0 | | | | 32,949 | | | | 1,140,133 | |
Financial Officer | | | 2007 | | | | 368,500 | | | | 0 | | | | 294,800 | | | | 147,400 | | | | 276,375 | | | | 0 | | | | 33,522 | | | | 1,120,597 | |
James C. Hobby | | | 2009 | | | | 348,408 | | | | 0 | | | | 313,288 | | | | 156,569 | | | | 213,226 | | | | 0 | | | | 28,245 | | | | 1,059,736 | |
Senior Vice President — Global | | | 2008 | | | | 310,866 | | | | 0 | | | | 203,432 | | | | 101,667 | | | | 202,374 | | | | 0 | | | | 23,063 | | | | 841,402 | |
Operations | | | 2007 | | | | 303,270 | | | | 0 | | | | 203,336 | | | | 101,667 | | | | 190,625 | | | | 0 | | | | 21,684 | | | | 820,582 | |
Lawrence R. Zingale | | | 2009 | | | | 334,390 | | | | 0 | | | | 300,686 | | | | 150,270 | | | | 204,646 | | | | 0 | | | | 23,999 | | | | 1,013,991 | |
Senior Vice President — Global | | | 2008 | | | | 316,769 | | | | 0 | | | | 203,432 | | | | 101,667 | | | | 206,217 | | | | 0 | | | | 15,677 | | | | 843,762 | |
Sales and Client Management | | | 2007 | | | | 305,000 | | | | 0 | | | | 203,336 | | | | 101,667 | | | | 190,625 | | | | 0 | | | | 20,542 | | | | 821,170 | |
James T. Holder | | | 2009 | | | | 280,390 | | | | 0 | | | | 126,075 | | | | 63,003 | | | | 114,399 | | | | 0 | | | | 21,497 | | | | 605,364 | |
Senior Vice President — | | | 2008 | | | | 249,565 | | | | 0 | | | | 98,267 | | | | 49,118 | | | | 123,784 | | | | 0 | | | | 19,573 | | | | 540,307 | |
General Counsel and | | | 2007 | | | | 238,462 | | | | 0 | | | | 94,039 | | | | 47,000 | | | | 119,231 | | | | 0 | | | | 20,599 | | | | 519,331 | |
Corporate Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
(1) | | The amounts shown in column (e) reflect the dollar amount recognized for financial statement reporting purposes for the fiscal years ended December 31, 2007 and December 31, 2006, in accordance with FAS 123(R), of awards pursuant to long term incentive bonus programs established by the Compensation and Human Resource Development Committee, and thus may(c) include amounts resulting from awards granted in and prior to the respective years. Assumptions used in the calculation of these amounts are included in footnotes 1 and 23 to the Company’s audited financial statements for the fiscal year ended December 31, 2007 and footnotes 1 and 20 to the Company’s audited financial statements for the fiscal year ended December 31, 2006 included in the Company’s Annual Reports onForm 10-K filed with the Securities and Exchange Commission on March 13, 2008 and March 13, 2007, respectively.a 27th pay period that fell into 2009. |
|
(2) | | The amounts shown in column (e) and (f) represent awards pursuant to long term incentive bonus programs (restricted stock and stock appreciation rights granted as partrespectively) established by the Compensation and Human Resource Development Committee. The amounts are valued based on the aggregate grant date fair value of long-term, equity-based incentive awards.the awards in accordance with FASB ASC Topic 718, “Compensation — Stock Compensation” (formerly FAS 123(R)). Amounts for 2008 and 2007 have been recalculated using the same methodology in accordance with SEC rules. See Notes 1 and 23 to the Consolidated Financial Statements included in the Company’s Annual Report onForm 10-K for the year ended December 31, 2009 filed on March 1, 2010 for a discussion of the relevant assumptions used in calculating the grant date fair value in accordance with FASB ASC Topic 718. |
2230
| | |
(3) | | The amounts in column (g) reflect the cash awards to the named individuals pursuant to annual performance based incentive programs established by the Committee and discussed in more detail on page 1522 under the heading “Performance Based Annual Cash Incentive Compensation.” |
|
(4) | | The amountamounts shown in column (i) reflectsreflect for each named executive offer:officer: |
| | |
|
• | | • matching contributions allocated by the Company to each of the named executive officers pursuant to the Executive Deferred Compensation Plan described in more detail on page 1927 under the heading “Executive Deferred Compensation;” |
|
| • | • reimbursement for premiums attributable to increased coverage for vision, dental and group medical insurance benefits.benefits; |
|
| • | • the cost of premiums for term life and disability insurance benefits; |
|
| • | • the Company’s matching contribution to the Sykes Enterprises, Incorporated Employees’ Savings Plan and Trust. |
The amount in column (i) for Mr. Kipphut also includes a country club membership paid by the Company, and the amount in column (i) for Mr. Zingale includes relocation expenses paid in 2006.Company.
| | |
(5) | | The amount in column (d) for Mr. Zingale represents a signing bonus paid at the inception of his employment in January, 2006. |
2331
GRANTS OF PLAN-BASED AWARDS
The following table provides information about equity and non-equity awards granted to the named executives in 2007,2009, including (i) the grant date, (ii) the estimated future payouts under the non-equity incentive plan awards, (iii) the estimated future payouts under equity incentive plan awards, which consist of shares of restricted stock, (iv) all other stock awards which consist of shares of the Company’s stock contributed as matching contributions under the Executive Deferred Compensation Plan, (v) all other option awards, which consist of Stock Appreciation Rights and the base price of those Stock Appreciation Rights, and (vi) the fair value of the equity awards on the date of grant.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | (i)
| | (j)
| | | | | | | | | | | | | | | | | | | | | (i)
| | (j)
| | | | |
| | | | | | | | | | | | | | | | All Other
| | All Other
| | | | (l)
| | | | | | | | | | | | | | | | | All Other
| | All Other
| | | | (l)
|
| | | | | | | | | | | | | | | | Stock
| | Option
| | (k)
| | Grant
| | | | | | | | | | | | | | | | | Stock
| | Option
| | (k)
| | Grant
|
| | | | Estimated Future Payouts
| | Estimated Future Payouts
| | Awards:
| | Awards:
| | Exercise
| | Date Fair
| | | | | Estimated Future Payouts
| | Estimated Future Payouts
| | Awards:
| | Awards:
| | Exercise
| | Date Fair
|
| | | | Under Non-Equity Incentive
| | Under Equity Incentive Plan
| | Number of
| | Number of
| | or Base
| | Value of
| | | | | Under Non-Equity Incentive
| | Under Equity Incentive Plan
| | Number of
| | Number of
| | or Base
| | Value of
|
| | (b)
| | Plan Awards(1) | | Awards(2) | | Shares of
| | Securities
| | Price
| | Stock and
| | | | | Plan Awards(1) | | Awards(2) | | Shares of
| | Securities
| | Price
| | Stock and
|
| | 2007
| | (c)
| | (d)
| | (e)
| | (f)
| | (g)
| | (h)
| | Stock or
| | Underlying
| | of Option
| | Option
| | | (b)
| | (c)
| | (d)
| | (e)
| | (f)
| | (g)
| | (h)
| | Stock or
| | Underlying
| | of Option
| | Option
|
(a)
| | Grant
| | Threshold
| | Target
| | Maximum
| | Threshold
| | Target
| | Maximum
| | Units
| | Options
| | Awards
| | Awards
| | | Grant
| | Threshold
| | Target
| | Maximum
| | Threshold
| | Target
| | Maximum
| | Units
| | Options
| | Awards
| | Awards
|
Name | | Date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (#)(3) | | (#)(4) | | ($/sh) | | ($) | | | Date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (#)(3) | | (#)(4) | | ($/sh) | | ($) |
|
Charles E. Sykes | | | 1/02 | | | | — | | | | — | | | | — | | | | 30,234 | | | | 37,793 | | | | 56,689 | | | | — | | | | — | | | | 17.64 | | | | 666,669 | | | | 1/02 | | | | — | | | | — | | | | — | | | | 40,943 | | | | 51,236 | | | | 76,816 | | | | — | | | | — | | | | 19.69 | | | | 1,008,837 | |
| | | 1/02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 43,178 | | | | 17.64 | | | | 333,333 | | | | 1/02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 67,947 | | | | 19.69 | | | | 504,167 | |
| | | 1/23 | | | | 187,500 | | | | 375,000 | | | | 562,500 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1/02 | | | | 275,000 | | | | 550,000 | | | | 825,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 3/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 657 | | | | — | | | | 18.24 | | | | 11,984 | | | | 3/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 721 | | | | — | | | | 16.63 | | | | 11,990 | |
W. Michael Kipphut | | | 1/02 | | | | — | | | | — | | | | — | | | | 13,370 | | | | 16,712 | | | | 25,068 | | | | — | | | | — | | | | 17.64 | | | | 294,800 | | | | 1/02 | | | | — | | | | — | | | | — | | | | 15,159 | | | | 18,970 | | | | 28,441 | | | | — | | | | — | | | | 19.69 | | | | 373,519 | |
| | | 1/02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 19,093 | | | | 17.64 | | | | 147,400 | | | | 1/02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 25,157 | | | | 19.69 | | | | 186,665 | |
| | | 1/08 | | | | 110,550 | | | | 221,100 | | | | 331,650 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1/02 | | | | 140,000 | | | | 280,000 | | | | 420,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 3/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 320 | | | | — | | | | 18.24 | | | | 5,837 | | | | 3/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 450 | | | | — | | | | 16.63 | | | | 7,484 | |
| | | 6/30 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 110 | | | | — | | | | 18.99 | | | | 2,089 | | | | 6/30 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 132 | | | | — | | | | 18.09 | | | | 2,388 | |
| | | 9/30 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 108 | | | | — | | | | 16.61 | | | | 1,794 | | | | 9/30 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 100 | | | | — | | | | 20.82 | | | | 2,082 | |
| | | 12/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 116 | | | | — | | | | 18.00 | | | | 2,088 | | |
Lawrence R. Zingale | | | 1/02 | | | | — | | | | — | | | | — | | | | 9,222 | | | | 11,527 | | | | 17,290 | | | | — | | | | — | | | | 17.64 | | | | 203,336 | | | | 1/02 | | | | — | | | | — | | | | — | | | | 12,203 | | | | 15,271 | | | | 22,895 | | | | — | | | | — | | | | 19.69 | | | | 300,686 | |
| | | 1/02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 13,169 | | | | 17.64 | | | | 101,667 | | | | 1/02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 20,252 | | | | 19.69 | | | | 150,270 | |
| | | 1/07 | | | | 76,250 | | | | 152,500 | | | | 228,750 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1/02 | | | | 96,600 | | | | 193,200 | | | | 289,800 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 3/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 110 | | | | — | | | | 18.24 | | | | 2,006 | | | | 3/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 194 | | | | — | | | | 16.63 | | | | 3,226 | |
| | | 6/30 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 106 | | | | — | | | | 18.99 | | | | 2,013 | | | | 6/30 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 153 | | | | — | | | | 18.09 | | | | 2,768 | |
| | | 9/30 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 104 | | | | — | | | | 16.61 | | | | 1,727 | | | | 9/30 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 133 | | | | — | | | | 20.82 | | | | 2,769 | |
| | | 12/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 112 | | | | — | | | | 18.00 | | | | 2,016 | | | | 12/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 126 | | | | — | | | | 25.47 | | | | 3,209 | |
James C. Hobby | | | 1/02 | | | | — | | | | — | | | | — | | | | 9,222 | | | | 11,527 | | | | 17,290 | | | | — | | | | — | | | | 17.64 | | | | 203,336 | | | | 1/02 | | | | — | | | | — | | | | — | | | | 12,715 | | | | 15,911 | | | | 23,855 | | | | — | | | | — | | | | 19.69 | | | | 313,288 | |
| | | 1/02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 13,169 | | | | 17.64 | | | | 101,667 | | | | 1/02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 21,101 | | | | 19.69 | | | | 156,569 | |
| | | 1/08 | | | | 76,250 | | | | 152,500 | | | | 228,750 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1/02 | | | | 100,650 | | | | 201,300 | | | | 301,950 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 3/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 616 | | | | — | | | | 18.24 | | | | 11,236 | | | | 3/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 721 | | | | — | | | | 16.63 | | | | 11,990 | |
| | | 6/30 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 39 | | | | — | | | | 18.99 | | | | 741 | | |
David L. Pearson | | | 1/02 | | | | — | | | | — | | | | — | | | | 3,810 | | | | 4,762 | | | | 7,143 | | | | — | | | | — | | | | 17.64 | | | | 84,002 | | |
James T. Holder | | | | 1/02 | | | | — | | | | — | | | | — | | | | 5,116 | | | | 6,403 | | | | 9,599 | | | | — | | | | — | | | | 19.69 | | | | 126,075 | |
| | | 1/02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5,440 | | | | 17.64 | | | | 42,000 | | | | 1/02 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8,491 | | | | 19.69 | | | | 63,003 | |
| | | 1/12 | | | | 52,500 | | | | 105,000 | | | | 157,500 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1/02 | | | | 54,000 | | | | 108,000 | | | | 162,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 3/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 649 | | | | — | | | | 18.24 | | | | 11,838 | | | | 3/31 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 721 | | | | — | | | | 16.63 | | | | 11,990 | |
| | |
(1) | | These amounts are based on the individual’s current salary and position. |
32
| | |
(2) | | Where amounts are shown in columns (f) and (h), then the amounts shown in column (f) reflect the Long-Term Incentive Stock Grant minimum which is 80% of the target amount shown in column (g), and the amount shown in column (h) is 150% of such target amount. The target amount shown is an absolute target. These amounts are based on the individual’s current salary and position. The grant date fair value of the long-term incentive plan awards are based upon the target amounts shown in column (g). |
24
| | |
(3) | | The amounts shown in column (i) reflect the number of shares of stock granted to each named executive officer as matching contributions pursuant to the Executive Deferred Compensation Plan. |
|
(4) | | The amounts shown in column (j) reflect the number of Stock Appreciation Rights granted to each named executive officer as part of the Long-Term Incentive awards as described in more detail on page 1622 under the heading “Performance-Based, Long-Term, Equity Incentive Compensation.” The actual number of shares underlying the Stock Appreciation Rights cannot be determined until such time as the Stock Appreciation Rights vest and are exercised and the spread between the fair value on the date of exercise and the base price is known. The fair value of the Stock Appreciation Rights included in column (l) is the amount determined pursuant to SFASFASB ASC Topic 718 (formerly FAS Statement 123(R)). |
2533
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table provides information on the current holdings of stock option and stock awards by the named executives. The table includes both exercisable and unexercisable options together with the exercise price and the expiration date; unvested Stock Appreciation Rights; the number of shares and market value of unvested matching contributions to the Executive Deferred Compensation Plan; and the number of shares of long term incentive (“LTI”) restricted stock together with the market value of those shares.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | | Stock Awards | |
(a) | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | | | (j) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | Equity
| |
| | | | | | | | | | | | | | | | | | | | | | | Equity
| | | Incentive
| |
| | | | | | | | Equity
| | | | | | | | | | | | | | | Incentive
| | | Plan
| |
| | | | | | | | Incentive
| | | | | | | | | | | | | | | Plan
| | | Awards:
| |
| | | | | | | | Plan
| | | | | | | | | | | | | | | Awards:
| | | Market or
| |
| | | | | | | | Awards:
| | | | | | | | | | | | Market
| | | Number of
| | | Payout Value
| |
| | | | | | | | Number of
| | | | | | | | | Number
| | | Value of
| | | Unearned
| | | of Unearned
| |
| | Number of
| | | Number of
| | | Securities
| | | | | | | | | of Shares
| | | Shares or
| | | Shares, Units
| | | Shares, Units
| |
| | Securities
| | | Securities
| | | Underlying
| | | | | | | | | or Units
| | | Units of
| | | or Other
| | | or Other
| |
| | Underlying
| | | Underlying
| | | Unexercised
| | | Option
| | | | | | of Stock
| | | Stock That
| | | Rights That
| | | Rights That
| |
| | Unexercised
| | | Unexercised
| | | Unearned
| | | Exercise
| | | Option
| | | That Have
| | | Have Not
| | | Have Not
| | | Have Not
| |
| | Options (#)
| | | Options (#)
| | | Options
| | | Price
| | | Expiration
| | | Not Vested
| | | Vested
| | | Vested
| | | Vested
| |
Name | | Exercisable | | | Unexercisable | | | (#) | | | ($) | | | Date | | | (#) | | | ($) | | | (#) | | | ($) | |
|
Charles E. Sykes | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2005-2007 LTI RS(1) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 20,000 | | | | 360,000 | |
2006-2008 LTI RS(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 68,510 | | | | 1,233,180 | |
2006-2008 LTI SARs(3) | | | 15,705 | | | | 31,412 | | | | — | | | | 14.56 | | | | 03/29/16 | | | | — | | | | — | | | | — | | | | — | |
2007-2009 LTI RS(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 56,689 | | | | 1,020,402 | |
2007-2009 SARs(5) | | | | | | | 43,178 | | | | | | | | 17.64 | | | | 01/02/17 | | | | — | | | | — | | | | — | | | | — | |
EDC Match(6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
W. Michael Kipphut | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2005-2007 LTI RS(1) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 12,500 | | | | 225,000 | |
2006-2008 LTI RS(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 30,371 | | | | 546,678 | |
2006-2008 LTI SARs(3) | | | 6,910 | | | | 13,821 | | | | — | | | | 14.56 | | | | 03/29/16 | | | | — | | | | — | | | | — | | | | — | |
2007-2009 LTI RS(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 25,068 | | | | 451,224 | |
2007-2009 SARs(5) | | | — | | | | 19,093 | | | | — | | | | 17.64 | | | | 01/02/17 | | | | — | | | | — | | | | — | | | | — | |
Options | | | 18,474 | | | | — | | | | — | | | | 16.24 | | | | 03/06/10 | | | | — | | | | — | | | | — | | | | — | |
Options | | | 31,526 | | | | — | | | | — | | | | 16.24 | | | | 03/06/10 | | | | — | | | | — | | | | — | | | | — | |
Options | | | 60,000 | | | | — | | | | — | | | | 16.24 | | | | 03/06/10 | | | | — | | | | — | | | | — | | | | — | |
EDC Match(6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Lawrence R. Zingale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2006-2008 LTI RS(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 21,053 | | | | 378,954 | |
2006-2008 LTI SARs(3) | | | 4,721 | | | | 9,435 | | | | — | | | | 14.56 | | | | 03/29/16 | | | | — | | | | — | | | | — | | | | — | |
2007-2009 LTI RS(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,290 | | | | 311,220 | |
2007-2009 LTI SARs(5) | | | — | | | | 13,169 | | | | — | | | | 17.64 | | | | 01/02/17 | | | | — | | | | — | | | | — | | | | — | |
EDC Match(6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 431 | | | | 7,765 | | | | — | | | | — | |
James C. Hobby | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2005-2007 LTI RS(1) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8,000 | | | | 144,000 | |
2006-2008 LTI RS(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 18,982 | | | | 341,676 | |
2006-2008 LTI SARs(3) | | | 4,254 | | | | 8,510 | | | | — | | | | 14.56 | | | | 03/29/16 | | | | — | | | | — | | | | — | | | | — | |
2007-2009 LTI RS(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,290 | | | | 311,220 | |
2007-2009 LTI SARs(5) | | | — | | | | 13,169 | | | | — | | | | 17.64 | | | | 01/02/17 | | | | — | | | | — | | | | — | | | | — | |
EDC Match(6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,853 | | | | 33,351 | | | | — | | | | — | |
David L. Pearson | | | | | �� | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2005-2007 LTI RS(1) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8,000 | | | | 144,000 | |
2006-2008 LTI RS(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8,654 | | | | 155,772 | |
2006-2008 LTI SARs(3) | | | 1,969 | | | | 3,938 | | | | — | | | | 14.56 | | | | 03/29/16 | | | | — | | | | — | | | | — | | | | — | |
2007-2009 LTI RS(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7,143 | | | | 128,574 | |
2007-2009 SARs(5) | | | — | | | | 5,440 | | | | — | | | | 17.64 | | | | 01/02/17 | | | | — | | | | — | | | | — | | | | — | |
Options | | | 7,000 | | | | — | | | | — | | | | 13.18 | | | | 07/03/10 | | | | — | | | | — | | | | — | | | | — | |
Options | | | 10,000 | | | | — | | | | — | | | | 4.05 | | | | 10/17/10 | | | | — | | | | — | | | | — | | | | — | |
Options | | | 10,000 | | | | — | | | | — | | | | 9.00 | | | | 02/01/12 | | | | — | | | | — | | | | — | | | | — | |
Options | | | 3,300 | | | | — | | | | — | | | | 9.00 | | | | 02/01/12 | | | | — | | | | — | | | | — | | | | — | |
EDC Match(6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,702 | | | | 30,639 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | Stock Awards |
(a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) |
| | | | | | | | | | | | | | | | | | Equity
|
| | | | | | | | | | | | | | | | Equity
| | Incentive
|
| | | | | | Equity
| | | | | | | | | | Incentive
| | Plan
|
| | | | | | Incentive
| | | | | | | | | | Plan
| | Awards:
|
| | | | | | Plan
| | | | | | | | | | Awards:
| | Market or
|
| | | | | | Awards:
| | | | | | | | Market
| | Number of
| | Payout Value
|
| | | | | | Number of
| | | | | | Number
| | Value of
| | Unearned
| | of Unearned
|
| | Number of
| | Number of
| | Securities
| | | | | | of Shares
| | Shares or
| | Shares, Units
| | Shares, Units
|
| | Securities
| | Securities
| | Underlying
| | | | | | or Units
| | Units of
| | or Other
| | or Other
|
| | Underlying
| | Underlying
| | Unexercised
| | Option
| | | | of Stock
| | Stock That
| | Rights That
| | Rights That
|
| | Unexercised
| | Unexercised
| | Unearned
| | Exercise
| | Option
| | That Have
| | Have Not
| | Have Not
| | Have Not
|
| | Options (#)
| | Options (#)
| | Options
| | Price
| | Expiration
| | Not Vested
| | Vested
| | Vested
| | Vested
|
Name | | Exercisable | | Unexercisable | | (#) | | ($) | | Date | | (#) | | ($) | | (#) | | ($) |
|
Charles E. Sykes | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2007-2009 LTI RS(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 56,689 | | | | 1,443,869 | |
2007-2009 SARs(3) | | | 28,786 | | | | 14,392 | | | | — | | | | 17.64 | | | | 01/02/17 | | | | — | | | | — | | | | — | | | | — | |
2008-2010 LTI RS(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 48,747 | | | | 1,241,586 | |
2008-2010 SARs(5) | | | 15,432 | | | | 30,864 | | | | — | | | | 17.87 | | | | 01/02/18 | | | | — | | | | — | | | | — | | | | — | |
2009-2011 LTI RS(6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 40,968 | | | | 1,043,455 | |
2009-2011 SARs(7) | | | — | | | | 67,947 | | | | — | | | | 19.69 | | | | 01/05/19 | | | | — | | | | — | | | | — | | | | — | |
W. Michael Kipphut | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2006-2008 LTI SARs(1) | | | 20,731 | | | | — | | | | — | | | | 14.56 | | | | 03/29/16 | | | | — | | | | — | | | | — | | | | — | |
2007-2009 LTI RS(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 25,068 | | | | 638,482 | |
2007-2009 SARs(3) | | | 12,729 | | | | 6,364 | | | | — | | | | 17.64 | | | | 01/02/17 | | | | — | | | | — | | | | — | | | | — | |
2008-2010 LTI RS(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 21,555 | | | | 549,006 | |
2008-2010 SARs(5) | | | 6,824 | | | | 13,648 | | | | — | | | | 17.87 | | | | 01/02/18 | | | | — | | | | — | | | | — | | | | — | |
2009-2011 LTI RS(6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 15,168 | | | | 386,329 | |
2009-2011 SARs(7) | | | — | | | | 25,157 | | | | — | | | | 19.69 | | | | 01/05/19 | | | | — | | | | — | | | | — | | | | — | |
Lawrence R. Zingale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2007-2009 LTI RS(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,290 | | | | 440,376 | |
2007-2009 LTI SARs(3) | | | — | | | | 4,389 | | | | — | | | | 17.64 | | | | 01/02/17 | | | | — | | | | — | | | | — | | | | — | |
2008-2010 LTI RS(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 14,868 | | | | 378,668 | |
2008-2010 SARs(5) | | | — | | | | 9,413 | | | | — | | | | 17.87 | | | | 01/02/18 | | | | — | | | | — | | | | — | | | | — | |
2009-2010 LTI RS(6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 12,210 | | | | 310,989 | |
2009-2011 SARs(7) | | | — | | | | 20,252 | | | | — | | | | 19.69 | | | | 01/05/19 | | | | — | | | | — | | | | — | | | | — | |
EDC Match(8) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 956 | | | | 24,349 | | | | — | | | | — | |
James C. Hobby | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2007-2009 LTI RS(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,290 | | | | 440,376 | |
2007-2009 LTI SARs(3) | | | 8,780 | | | | 4,389 | | | | — | | | | 17.64 | | | | 01/02/17 | | | | — | | | | — | | | | — | | | | — | |
2008-2010 LTI RS(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 14,868 | | | | 378,688 | |
2008-2010 SARs(5) | | | 4,707 | | | | 9,413 | | | | — | | | | 17.87 | | | | 01/02/18 | | | | — | | | | — | | | | — | | | | — | |
2009-2011 LTI RS(6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 12,722 | | | | 324,029 | |
2009-2010 SARs(7) | | | — | | | | 21,101 | | | | — | | | | 19.69 | | | | 01/05/19 | | | | — | | | | — | | | | — | | | | — | |
EDC Match(8) | | | | | | | | | | | | | | | | | | | | | | | 1,366 | | | | 34,792 | | | | | | | | | |
James T. Holder | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2007-2009 LTI RS(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7,993 | | | | 203,582 | |
2007-2009 SARs(3) | | | — | | | | 2,029 | | | | — | | | | 17.64 | | | | 01/02/17 | | | | — | | | | — | | | | — | | | | — | |
2008-2010 LTI RS(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7,182 | | | | 182,926 | |
2008-2010 SARs(5) | | | — | | | | 4,548 | | | | — | | | | 17.87 | | | | 01/02/18 | | | | — | | | | — | | | | — | | | | — | |
2009-2011 LTI RS(6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5,119 | | | | 130,381 | |
2009-2011 SARs(7) | | | — | | | | 8,491 | | | | — | | | | 19.69 | | | | 01/05/19 | | | | — | | | | — | | | | — | | | | — | |
2634
| | |
(1) | | The figures in this row represent restricted sharesStock Appreciation Rights that were issued to the named executive officer in connection with the long-term incentive award for the2005-20072006-2008 performance measurement period. |
|
(2) | | The figures in this row represent restricted shares that were issued to the named executive officer in connection with the long-term incentive award for the2006-20082007-2009 performance measurement period. |
|
(3) | | The figures in this row represent Stock Appreciation Rights that were issued to the named executive officer in connection with the long-term incentive award for the2006-20082007-2009 performance measurement period. |
|
(4) | | The figures in this row represent restricted shares that were issued to the named executive officer in connection with the long-term incentive award for the2007-20092008-2010 performance measurement period. |
|
(5) | | The figures in this row represent Stock Appreciation Rights that were issued to the named executive officer in connection with the long-term incentive award for the2007-20092008-2010 performance measurement period. |
|
(6) | | The figures in this row represent restricted shares that were issued to the named executive officer in connection with the long-term incentive award for the2009-2011 performance measurement period. |
|
(7) | | The figures in this row represent Stock Appreciation Rights that were issued to the named executive officer in connection with the long-term incentive award for the2008-2010 performance measurement period. |
|
(8) | | The figures in this row represent restricted shares granted to the named executive officer as matching contributions by the Company under the Executive Deferred Compensation Plan. |
OPTION EXERCISES AND STOCK VESTED
The following table provides information for the named executive officers on (1) stock option exercises during 2007,2009, including the number of shares acquired upon exercise and the value realized; and (2) the number of shares acquired upon vesting of matching contributions under the Executive Deferred Compensation Plan, and the value realized upon the vesting of such shares.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Options Awards | | Stock Awards(1) | | | Options Awards | | Stock Awards |
(a) | | (b) | | (c) | | (d) | | (e) | | | (b) | | (c) | | (d) | | (e) |
| | Number of Shares
| | Value Realized
| | Number of Shares
| | Value Realized
| | | Number of Shares
| | Value Realized
| | Number of Shares
| | Value Realized
|
| | Acquired on Exercise
| | on Exercise
| | Acquired on Vesting
| | on Vesting
| | | Acquired On Exercise
| | on Exercise
| | Acquired on Vesting
| | on Vesting
|
Name | | (#) | | ($) | | (#) | | ($) | | | (#) | | ($) | | (#) | | ($) |
|
Charles E. Sykes | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Options | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
EDC Matching Contr. | | | — | | | | — | | | | 1,230 | | | | 22,254 | | |
EDC Matching Contr.(1) | | | | — | | | | — | | | | 721 | | | | 11,990 | |
2006 LTI RS(2) | | | | — | | | | — | | | | 68,510 | | | | 1,109,862 | |
2006 SARs(3) | | | | 19,161 | | | | 470,211 | | | | — | | | | — | |
W. Michael Kipphut | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Options | | | — | | | | — | | | | — | | | | — | | | | 110,000 | | | | 587,901 | | | | — | | | | — | |
EDC Matching Contr. | | | — | | | | — | | | | 2,955 | | | | 53,222 | | |
Lawrence R. Zingale | | | | | | | | | | | | | | | | | |
Options | | | — | | | | — | | | | — | | | | — | | |
EDC Matching Contr. | | | — | | | | — | | | | — | | | | — | | |
James C. Hobby | | | | | | | | | | | | | | | | | |
Options | | | — | | | | — | | | | — | | | | — | | |
EDC Matching Contr. | | | — | | | | — | | | | 913 | | | | 16,426 | | |
David L. Pearson | | | | | | | | | | | | | | | | | |
Options | | | — | | | | — | | | | — | | | | — | | |
EDC Matching Contr. | | | — | | | | — | | | | 435 | | | | 7,931 | | |
EDC Matching Contr.(1) | | | | — | | | | — | | | | 682 | | | | 11,954 | |
2006 LTI RS(2) | | | | — | | | | — | | | | 30,371 | | | | 492,010 | |
2006 SARs | | | | — | | | | — | | | | — | | | | — | |
35
| | | | | | | | | | | | | | | | |
| | Options Awards | | Stock Awards |
(a) | | (b) | | (c) | | (d) | | (e) |
| | Number of Shares
| | Value Realized
| | Number of Shares
| | Value Realized
|
| | Acquired On Exercise
| | on Exercise
| | Acquired on Vesting
| | on Vesting
|
Name | | (#) | | ($) | | (#) | | ($) |
|
Lawrence R. Zingale | | | | | | | | | | | | | | | | |
Options | | | — | | | | — | | | | — | | | | — | |
EDC Matching Contr.(1) | | | — | | | | — | | | | 471 | | | | 12,045 | |
2006 LTI RS(2) | | | — | | | | — | | | | 21,053 | | | | 341,059 | |
2006 SARs(3) | | | 1,516 | | | | 32,533 | | | | — | | | | — | |
2007 SARs(4) | | | 1,562 | | | | 33,521 | | | | — | | | | — | |
2008 SARs(5) | | | 787 | | | | 16,889 | | | | — | | | | — | |
James C. Hobby | | | | | | | | | | | | | | | | |
Options | | | — | | | | — | | | | — | | | | — | |
EDC Matching Contr.(1) | | | — | | | | — | | | | 1,635 | | | | 39,550 | |
2006 LTI RS(2) | | | — | | | | �� | | | | 18,982 | | | | 307,508 | |
2006 SARs(3) | | | 5,476 | | | | 139,638 | | | | — | | | | — | |
James T. Holder | | | | | | | | | | | | | | | | |
Options | | | — | | | | — | | | | — | | | | — | |
EDC Matching Contr.(1) | | | — | | | | — | | | | 721 | | | | 11,990 | |
2006 LTI RS(2) | | | — | | | | — | | | | 3,974 | | | | 64,379 | |
2006 LTI RS(3) | | | — | | | | — | | | | 441 | | | | 7,065 | |
2007 SARs(4) | | | 1,268 | | | | 32,537 | | | | — | | | | — | |
2008 SARs(5) | | | 690 | | | | 17,705 | | | | — | | | | — | |
| | |
(1) | | Reflects the Company’s matching contributions in the form of shares of its common stock held for the account of the named executive officer in the Executive Deferred Compensation Plan which vested during fiscal year endingended December 31, 2007.2009. |
|
(2) | | Reflects the number of restricted shares vested (column (d)) and value at the time of vesting (column (e)) from the grant of a long term incentive award to the named executive officer relating to the 2006 — 2008 performance period |
|
(3) | | Reflects the number of stock appreciation rights granted in 2006 which were exercised by the named executive officer during 2009 (column (b)) and the value of the stock appreciation rights exercised (column (c)). |
|
(4) | | Reflects the number of stock appreciation rights granted in 2007 which were exercised by the named executive officer during 2009 (column (b)) and the value of the stock appreciation rights exercised (column (c)). |
|
(5) | | Reflects the number of stock appreciation rights granted in 2008 which were exercised by the named executive officer during 2009 (column (b)) and the value of the stock appreciation rights exercised (column (c)). |
2736
PENSION BENEFITS
The Company does not maintain any pension plans for the benefit of its executive officers.
NONQUALIFIED DEFERRED COMPENSATION
Pursuant to the Company’s Executive Deferred Compensation Plan ( the “Plan”), certain executives, including the named executive officers, may defer all or any portion of their base salary, and all or any portion of their performance based non-equity incentive compensation. Deferral elections are made on or before December 3131st of each year for amounts to be deferred from income earned with respect to the following year. The table below shows the investment options available under the Deferred Compensation Plan and their annual rate of return for the calendar year ended December 31, 2007,2009, as reported by the administrator of the Plan.
| | | | | | | | | | | | | | | | | | | | |
| | Rate
| | | | Rate
| | Rate
| | | | Rate
|
Name of Fund | | of Return | | Name of Fund | | of Return | | of Return | | Name of Fund | | of Return |
|
Wachovia Diversified Stable Value | | | 4.81 | % | | Davis Opportunity A | | | (1.42 | )% | |
Evergreen Core Bond A | | | 4.78 | % | | Dreyfus Premier New Leaders A | | | (4.77 | )% | |
AllianceBernstein Balanced Shares A | | | 2.96 | % | | Columbia Small Cap Value I A | | | (2.63 | )% | |
AIM Mid Cap Core Equity A | | | | 30.16 | | | Evergreen Money Market A | | | 00.26 | |
Columbia Small Cap Index A | | | | 25.19 | | | PIMCO Total Return A | | | 13.33 | |
Janus Balanced Fund Class S | | | | N/A | (1) | | Columbia Small Cap Value I A | | | 24.44 | |
Van Kampen Comstock R | | | (2.09 | )% | | Putnam Capital Opportunities A | | | (8.68 | )% | | | 29.13 | | | American Century Inf-Adj Bond Inv. | | | 10.58 | |
Evergreen Equity Index A | | | 4.94 | % | | AIM Small Cap Growth A | | | 11.38 | % | | | 25.91 | | | AIM Small Cap Growth A | | | 34.52 | |
American Funds Growth Fund of America R3 | | | 10.59 | % | | Evergreen International Equity A | | | 14.67 | % | | | 34.12 | | | Evergreen International Equity A | | | 15.38 | |
Goldman Sachs Mid Cap Value A | | | 2.91 | % | | American Century Inf-Adj Bond Inv. | | | 10.95 | % | | | 33.98 | | | | | | |
| | |
(1) | | The Janus Balanced Fund Class S was not available for a full year, and therefore no yearly rate of return is available. |
Distributions of the participants’ deferred compensation and any vested Company stock matching contributions are made as soon as administratively feasible six months after retirement or termination of employment, unless the participant dies or becomes disabled while still an employee, in which case both distributions are made as soon as administratively feasible.
In the event the participant terminates employment (for reasons other than death, disability or retirement) without participating in the plan for three years, the matching contributions and earnings attributable thereto are forfeited. In the event that a participant terminates employment after three years but less than five years of participation in the Plan, the participant forfeits 67% of the matching contribution and earnings. In the event a participant terminates employment after five years but less than seven years of participation in the Plan, the participant forfeits 33% of the matching contribution and earnings.
In the event of a distribution of benefits as a result of a change in control, the Company will increase the benefits for the Senior Vice Presidents and the President by an amount sufficient to offset the income tax obligations created by the distribution of benefits.
Participants forfeit undistributed matching contributions if the participant is terminated for “cause” as defined in the Plan or the participant enters into a business or employment which the Company’s chief executive officer determines to be in violation of any non-compete agreement between the participant and the Company.
2837
The following table shows information regarding contributions by the named executive officers, the Company’s matching contributions, aggregate earnings on contributions during fiscal year 2007,2009, and the aggregate balance at year end. There were no distributions from the plan to named executive officers during fiscal year 2007.2009.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(a) | | (b) | | (c) | | (d) | | (e) | | (f) | | | (b) | | (c) | | (d) | | (e) | | (f) | |
| | Executive
| | Company
| | Aggregate
| | | | Aggregate
| | | Executive
| | Company
| | Aggregate
| | | | Aggregate
| |
| | Contributions
| | Contribution
| | Earnings
| | Aggregate
| | Balance at
| | | Contributions
| | Contribution
| | Earnings
| | Aggregate
| | Balance at
| |
| | in Last
| | in Last
| | in Last
| | Withdrawals/
| | Last Fiscal
| | | in Last
| | in Last
| | in Last
| | Withdrawals/
| | Last Fiscal
| |
| | Fiscal Year(1)
| | Fiscal Year(2)
| | Fiscal Year
| | Distributions
| | Year End(3)
| | | Fiscal Year(1)
| | Fiscal Year(2)
| | Fiscal Year
| | Distributions
| | Year End(3)
| |
Name | | ($) | | ($) | | ($) | | ($) | | ($) | | | ($) | | ($) | | ($) | | ($) | | ($) | |
|
Charles E. Sykes | | $ | 24,000 | | | $ | 12,000 | | | $ | 572 | | | $ | 0 | | | $ | 96,136 | | | | 24,000 | | | | 11,990 | | | | 51,146 | | | | 0 | | | | 195,077 | |
W. Michael Kipphut | | $ | 23,700 | | | $ | 11,850 | | | $ | 20,359 | | | $ | 0 | | | $ | 302,072 | | | | 30,200 | | | | 11,954 | | | | 75,872 | | | | 0 | | | | 394,750 | |
Lawrence R. Zingale | | $ | 15,576 | | | $ | 7,788 | | | $ | 296 | | | $ | 0 | | | $ | 19,740 | | | | 24,000 | | | | 11,972 | | | | 18,443 | | | | 0 | | | | 92,315 | |
James C. Hobby | | $ | 92,919 | | | $ | 12,000 | | | $ | 5,338 | | | $ | 0 | | | $ | 197,053 | | | | 80,842 | | | | 11,990 | | | | 69,641 | | | | 0 | | | | 476,177 | |
David L. Pearson | | $ | 23,689 | | | $ | 11,845 | | | $ | 6,161 | | | $ | 0 | | | $ | 214,473 | | |
James T. Holder | | | | 24,000 | | | | 11,990 | | | | 40,246 | | | | 0 | | | | 168,221 | |
| | |
(1) | | The amounts shown are included in the amounts of “salary” in column (c) of the Summary Compensation Table. |
|
(2) | | The amounts shown are included in the amounts of “Other Compensation” in column (i) of the Summary Compensation Table. |
|
(3) | | The amounts shown include 100% of the aggregate executive and Company contributions which have all been reported in the Summary Compensation Table. |
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes the equity compensation plans under which the equity securities of Sykes may be issued as of December 31, 2007:2009:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | | (b) | | (c) | | | (a) | | (b) | | (c) | |
| | | | | | Number of Securities
| | | | | | | Number of Securities
| |
| | Number of
| | | | Remaining Available for
| | | Number of
| | | | Remaining Available for
| |
| | Securities to be
| | Weighted Average
| | Future Issuance Under
| | | Securities to be
| | Weighted Average
| | Future Issuance Under
| |
| | Issued Upon
| | Exercise Price of
| | Equity Compensation
| | | Issued Upon
| | Exercise Price of
| | Equity Compensation
| |
| | Exercise of
| | Outstanding
| | Plans (Excluding
| | | Exercise of
| | Outstanding
| | Plans (Excluding
| |
| | Options, Warrants
| | Options, Warrants
| | Securities Reflected in
| | | Options, Warrants
| | Options, Warrants
| | Securities Reflected in
| |
| | and Rights | | and Rights | | Column (a)) | | | and Rights | | and Rights | | Column (a)) | |
|
Equity compensation plans approved by shareholders(1) | | | 510,391 | | | $ | 13.49 | (2) | | | 6,584,489 | | |
Equity compensation plans approved by shareholders(1) | | | | 165,799 | | | | 8.05 | (2) | | | 6,156,815 | |
Equity compensation plans not approved by shareholders | | | 53,496 | (3) | | | — | | | | N/A | (3) | | | 71,012 | (3) | | | — | | | | N/A | (3) |
Totals | | | 563,887 | | | | — | | | | 6,584,489 | | | | 236,811 | | | | | | | | 6,156,815 | |
| | |
(1) | | Includes shares of common stock of Sykes authorized for awards under the 2001 Equity Incentive Plan as well as the 2000 Stock Option Plan, the 1996 Employee Stock Option Plan, and the 1997 Management Stock Incentive Plan, all of which are predecessor plans to the 2001 Equity Incentive Plan. Also includes shares of common stock of Sykes reserved for issuance under the 1999 Employees’ Stock Purchase Plan, the Amended and Restated 1996 Non-Employee Director Stock Option Plan, the 1996 Non-Employee Director Fee Plan, and the 2004 Non-Employee Director Fee Plan. |
|
(2) | | Represents the weighted average exercise price of stock options only. |
2938
| | |
(3) | | Represents shares of common stock of Sykes issued as matching grants under the Executive Deferred Compensation Plan for executives described on page 2827 above. There is no specific number of shares reserved for issuance under the Executive Deferred Compensation Plan. |
Shares awarded under all of the above plans may be from Sykes’ authorized and unissued shares, treasury shares or shares acquired in the open market. For a summary of the terms of Sykes’ equity compensation plans, see Note 1923 of our consolidated financial statements in the Annual Report onForm 10-K for the year ended December 31, 2009 and incorporated herein by reference.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The tables below reflect the amount of compensation to each of the named executive officers of the Company in the event of a termination of such executive’s employment. The amount of compensation payable to each named executive officer upon voluntary termination, involuntarynot-for-cause termination, termination following a change of control and in the event of a disability or death of the executive is shown below. The amounts shown assume that such termination was effective as of December 31, 2007,2009, and thus includes amounts earned through such time and are estimates of the amounts which would be paid out to the executives upon their termination. The actual amounts to be paid out can only be determined at the time of such executive’s separation from the Company.
Payments Made Upon Termination
Regardless of the manner in which a named executive officer’s employment terminates, he is entitled to receive amounts earned during his term of employment. Depending upon the date of a termination, such amounts may include:
| | |
| • | non-equity incentive compensation earned during the fiscal year; |
|
| • | shares which have vested and for which the restrictions have lapsed under Long-Term Incentive compensation awards; |
|
| • | shares to be issued as a result of the vesting of SARs under Long-Term Incentive compensation awards; |
|
| • | amounts contributed to the Executive Deferred Compensation Plan; and |
|
| • | unused vacation pay. |
Payments Made Upon Termination by the Company Without Cause, or by the Executive with Good Reason
In the event the employment of Mr. Sykes’ employmentor Mr. Kipphut is terminated by the Company prior to the expiration of any renewal period for any reason other than death, disability, or cause (as defined in histheir respective employment agreement)agreements), or if such officer terminates his employment agreement is terminated by Mr. Sykes prior to the expiration of the renewal period for good reason (as defined below under “Employment Agreements”), the Company is required to pay Mr. Sykes an amount equal to his weekly base salary through the end of the renewal period of the agreement or for 104 weeks, whichever is greater.
In the event Mr. Kipphut’sin their respective employment is terminatedagreements, other than a termination by the Company prior to the expirationofficer in connection with a change of the any renewal period for any reason other than death, disability, or causecontrol (as defined in his employment agreement)), or if his employment agreement is terminated by Mr. Kipphut priorthe officer will be entitled to the expiration of the renewal period for good reason (as defined below under “Employment Agreements”), the Company is required to pay Mr. Kipphut an amount equal to his weekly base salary through the end of the renewal period of the agreement or for 52 weeks, whichever isfollowing payments:
| | |
| • | Mr. Sykes will be entitled to receive an amount equal to two times his annual base salary. |
|
| • | Mr. Kipphut will be entitled to receive an amount equal to his annual base salary, plus an amount equal to the maximum annual performance bonus he could earn under the performance based bonus plan in which Mr. Kipphut is then participating. |
3039
greater, plus an amount equal
In the event that such officer terminates his employment agreement in connection with a change of control, such officer will be entitled to receive the maximum annual performance bonus he could earn (60%benefits listed under the heading “Payments Made Upon a Change of his annual base salary), which would also be paid over the same period as the other payments.Control” below.
In the event of the termination by the Company of the employment of any named executive officer other than Mr. Sykes or Mr. Kipphut for any reason other than death, disability or cause, they will be entitled to receive an amount equal to their annual base salary payablesalary.
Except as provided below, the foregoing amounts are to be paid biweekly in equal installments over 52 weeks, commencing immediately upon such officer’s separation from service. If such officer is determined to be a one year period.“specified employee” on the date of his “separation from service” (each as defined in Section 409(A) of the Internal Revenue Code and applicable regulations), to the extent that he is entitled to receive any benefit or payment upon such separation from service under the employment agreement that constitutes deferred compensation within the meaning of Section 409A of the Internal Revenue Code before the date that is six months after the date of his separation from service, such benefits or payments will not be provided or paid to him on the date otherwise required to be provided or paid. Instead, all such amounts shall be accumulated and paid in a single lump sum on the first business day after the date that is six months after the date of his separation from service (or, if earlier, within fifteen (15) days following his date of death). All remaining payments and benefits otherwise required to be paid or provided on or after the date that is six months after the date of his separation from service will be paid or provided or paid in accordance with the payment schedule described above.
Payments Made Upon Death or Disability
In the event of the death or disability of a named executive officer, in addition to the benefits listed under the heading “Payments Made Upon Termination” above, the named executive officer will receive benefits under the Company’s disability plan or payments under the Company’s life insurance plan, as appropriate. The Company pays for life insurance and accidental death and dismemberment coverage for its executive team in amounts equal to twice the executive’s base salary, up to a maximum of $500,000. The Company also pays for short term disability for its executives with a benefit of 70% of base salary, up to a maximum of $2,500 per week, and long term disability utilizing multiple plans. The base long term disability plan provides for a benefit to the executives of 70% of base salary, up to a maximum of $15,000 per month. The base long term disability plan is supplemented with two personalindividual policy plans designed to provide the executives with long term disability insurance approximating 75% of covered compensation.
Payments Made Upon a Change of Control
The Company has entered into employment agreements with Mr. Sykes and Mr. Kipphut which contain change of control payment provisions. Pursuant to these provisions, if Mr. Sykes’Sykes or Mr. Kipphut’sKipphut terminates their employment is terminated followingin connection with a change of control (other than termination by the Company for cause or by reason of death or disability), or if Mr. Sykes or Mr. Kipphut terminate their employment in certain circumstances(as defined in their respective agreements which constitutes “good reason,” in addition toemployment agreement), instead of the benefits listed under the heading “Payments Made Upon Termination”:Termination,” they will receive the following benefits:
| | |
| • | Mr. Sykes will receive: |
Mr. Sykes. Mr. Sykes will be entitled to receive an amount equal to three times his then current base salary, plus an amount determined by multiplying the annual target bonus designated or otherwise indicated for Mr. Sykes in the year such change of control occurs by a factor of three. The target bonus amount is to be determined under the performance based bonus plan in which Mr. Sykes is then participating. In addition, all stock options, stock grants or other similar equity incentivesand/or compensation programs will immediately accelerate and become fully vested and exercisable at the option of Mr. Sykes.
| | |
| • | his then current base salary for a period of three years; |
|
| • | an amount determined by multiplying the annual target bonus designated or otherwise indicated for Mr. Sykes in the year such change of control occurs by a factor of three, and paying such amount over a 156-week period; and |
|
| • | all stock options, stock grants or other similar equity incentivesand/or compensation programs will immediately accelerate and become fully vested and exercisable at the option of Mr. Sykes. |
| | |
| • | Mr. Kipphut will receive: |
| | |
| • | his then current base salary for a period of two years; |
|
| • | an amount determined by multiplying the annual target bonus designated or otherwise indicated for Mr. Kipphut in the year such change of control occurs by a factor of two, and paying such amount over a 104-week period; and |
|
| • | all stock options, stock grants or other similar equity incentivesand/or compensation programs will immediately accelerate and become fully vested and exercisable at the option of Mr. Kipphut. |
3140
Mr. Kipphut. Mr. Kipphut will be entitled to receive an amount equal to two times his then current base salary, plus an amount determined by multiplying the annual target bonus designated or otherwise indicated for Mr. Kipphut in the year such change of control occurs by a factor of two. The target bonus amount is to be determined under the performance based bonus plan in which Mr. Kipphut is then participating. In addition, all stock options, stock grants or other similar equity incentivesand/or compensation programs will immediately accelerate and become fully vested and exercisable at the option of Mr. Kipphut.
Except as provided below, the foregoing amounts are to be paid biweekly in equal installments over 52 weeks, commencing immediately upon such officer’s separation from service. If such officer is determined to be a “specified employee” on the date of his “separation from service” (each as defined in Section 409(A) of the Internal Revenue Code and applicable regulations), to the extent that he is entitled to receive any benefit or payment upon such separation from service under the employment agreement that constitutes deferred compensation within the meaning of Section 409A of the Internal Revenue Code before the date that is six months after the date of his separation from service, such benefits or payments will not be provided or paid to him on the date otherwise required to be provided or paid. Instead, all such amounts shall be accumulated and paid in a single lump sum on the first business day after the date that is six months after the date of his separation from service (or, if earlier, within fifteen (15) days following his date of death). All remaining payments and benefits otherwise required to be paid or provided on or after the date that is six months after the date of his separation from service will be paid or provided or paid in accordance with the payment schedule described above.
The named executive officers of the Company, other than Mr. Sykes and Mr. Kipphut, do not have change of control provisions in their respective employment agreements, but under various equity incentive agreements, all stock options, stock grants or other similar equity incentivesand/or compensation programs will immediately accelerate and become fully vested and exercisable at the option of the executive in the event of a change in control.
Charles E. Sykes
The following table shows the potential payments upon termination or a change of control of the Company for Charles E. Sykes, the Company’s President and Chief Executive Officer, as if such termination had occurred on December 31, 2007:2009:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Company Initiated | | Executive Initiated | | | Company Initiated | | Executive Initiated |
| | Before
| | After
| | | | | | | | | Before
| | After
| | | | | | |
| | Change in
| | Change in
| | | | | | | | | Change in
| | Change in
| | | | | | |
| | Control
| | Control
| | | | | | | | | Control
| | Control
| | | | | | |
| | Termination
| | Termination
| | | | Voluntary
| | | | | Termination
| | Termination
| | | | Voluntary
| | |
| | w/o Cause
| | w/o Cause
| | | | Termination
| | | | | w/o Cause
| | w/o Cause
| | | | Termination
| | |
| | or for Good
| | or for Good
| | Voluntary
| | for “Good
| | Change in
| | | or for Good
| | or for Good
| | Voluntary
| | for “Good
| | Change in
|
| | Reason
| | Reason
| | Termination
| | Reason”
| | Control
| | | Reason
| | Reason
| | Termination
| | Reason”
| | Control
|
Type of Benefit | | ($) | | ($) | | ($) | | ($) | | ($) | | | ($) | | ($) | | ($) | | ($) | | ($) |
|
Severance Pay | | | 1,000,000 | | | | 1,500,000 | | | | 0 | | | | 1,000,000 | | | | 1,500,000 | | | | 1,100,000 | | | | 1,650,000 | | | | 0 | | | | 1,100,000 | | | | 1,650,000 | |
Bonus Payment | | | 0 | | | | 1,125,000 | | | | 0 | | | | 1,125,000 | | | | 1,125,000 | | | | 0 | | | | 1,650,000 | | | | 0 | | | | 0 | | | | 1,650,000 | |
Stock Grants Vesting Acceleration | | | 0 | | | | 2,613,582 | | | | 0 | | | | 0 | | | | 2,613,582 | | | | 0 | | | | 739,989 | | | | 0 | | | | 0 | | | | 739,989 | |
Stock Option Vesting Acceleration | | | 0 | | | | 123,598 | | | | 0 | | | | 0 | | | | 123,598 | | | | 0 | | | | 4,825,674 | | | | 0 | | | | 0 | | | | 4,825,674 | |
Deferred Compensation Vesting Acceleration | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Payment for Taxes Resulting from Deferred Compensation Distribution | | | 0 | | | | 34,572 | | | | 0 | | | | 0 | | | | 34,572 | | | | 0 | | | | 70,153 | | | | 0 | | | | 0 | | | | 70,153 | |
Total | | | 1,000,000 | | | | 5,396,752 | | | | 0 | | | | 2,125,000 | | | | 5,396,752 | | | | 1,100,000 | | | | 8,935,816 | | | | 0 | | | | 1,100,000 | | | | 8,935,816 | |
3241
W. Michael Kipphut
The following table shows the potential payments upon termination or a change of control of the Company for W. Michael Kipphut, the Company’s Senior Vice President and Chief Financial Officer, as if such termination had occurred on December 31, 2007:2009:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Company Initiated | | Executive Initiated | | | Company Initiated | | Executive Initiated |
| | Before
| | After
| | | | | | | | | Before
| | After
| | | | | | |
| | Change in
| | Change in
| | | | | | | | | Change in
| | Change in
| | | | | | |
| | Control
| | Control
| | | | | | | | | Control
| | Control
| | | | | | |
| | Termination
| | Termination
| | | | Voluntary
| | | | | Termination
| | Termination
| | | | Voluntary
| | |
| | w/o Cause
| | w/o Cause
| | | | Termination
| | | | | w/o Cause
| | w/o Cause
| | | | Termination
| | |
| | or for Good
| | or for Good
| | Voluntary
| | for “Good
| | Change in
| | | or for Good
| | or for Good
| | Voluntary
| | for “Good
| | Change in
|
| | Reason
| | Reason
| | Termination
| | Reason”
| | Control
| | | Reason
| | Reason
| | Termination
| | Reason”
| | Control
|
Type of Benefit | | ($) | | ($) | | ($) | | ($) | | ($) | | | ($) | | ($) | | ($) | | ($) | | ($) |
|
Severance Pay | | | 368,500 | | | | 737,000 | | | | 0 | | | | 368,500 | | | | 737,000 | | | | 400,000 | | | | 800,000 | | | | 0 | | | | 400,000 | | | | 800,000 | |
Bonus Payment | | | 221,100 | | | | 442,200 | | | | 0 | | | | 221,100 | | | | 442,200 | | | | 420,000 | | | | 840,000 | | | | 0 | | | | 420,000 | | | | 840,000 | |
Stock Grants Vesting Acceleration | | | 0 | | | | 1,222,902 | | | | 0 | | | | 0 | | | | 1,222,902 | | | | 0 | | | | 298,962 | | | | 0 | | | | 0 | | | | 298,962 | |
Stock Option Vesting Acceleration | | | 0 | | | | 54,418 | | | | 0 | | | | 0 | | | | 54,418 | | | | 0 | | | | 1,993,129 | | | | 0 | | | | 0 | | | | 1,993,129 | |
Deferred Compensation Vesting Acceleration | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Payment for Taxes Resulting from Deferred Compensation Distribution | | | 0 | | | | 108,631 | | | | 0 | | | | 0 | | | | 108,631 | | | | 0 | | | | 141,960 | | | | 0 | | | | 0 | | | | 141,960 | |
Total | | | 589,600 | | | | 2,565,151 | | | | 0 | | | | 589,600 | | | | 2,565,151 | | | | 820,000 | | | | 4,074,051 | | | | 0 | | | | 820,000 | | | | 4,074,051 | |
Lawrence R. Zingale
The following table shows the potential payments upon termination or a change of control of the Company for Lawrence R. Zingale, the Company’s Senior Vice President — Global Sales and Client Management, as if such termination had occurred on December 31, 2007:2009:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Company Initiated | | Executive Initiated | | | Company Initiated | | Executive Initiated |
| | Before
| | After
| | | | | | | | | Before
| | After
| | | | | | |
| | Change in
| | Change in
| | | | | | | | | Change in
| | Change in
| | | | | | |
| | Control
| | Control
| | | | | | | | | Control
| | Control
| | | | | | |
| | Termination
| | Termination
| | | | Voluntary
| | | | | Termination
| | Termination
| | | | Voluntary
| | |
| | w/o Cause
| | w/o Cause
| | | | Termination
| | | | | w/o Cause
| | w/o Cause
| | | | Termination
| | |
| | or for Good
| | or for Good
| | Voluntary
| | for “Good
| | Change in
| | | or for Good
| | or for Good
| | Voluntary
| | for “Good
| | Change in
|
| | Reason
| | Reason
| | Termination
| | Reason”
| | Control
| | | Reason
| | Reason
| | Termination
| | Reason”
| | Control
|
Type of Benefit | | ($) | | ($) | | ($) | | ($) | | ($) | | | ($) | | ($) | | ($) | | ($) | | ($) |
|
Severance Pay | | | 305,000 | | | | 305,000 | | | | 0 | | | | 0 | | | | 0 | | | | 322,000 | | | | 322,000 | | | | 0 | | | | 0 | | | | 0 | |
Bonus Payment | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Stock Grants Vesting Acceleration | | | 0 | | | | 690,174 | | | | 0 | | | | 0 | | | | 690,174 | | | | 0 | | | | 222,961 | | | | 0 | | | | 0 | | | | 222,961 | |
Stock Option Vesting Acceleration | | | 0 | | | | 37,204 | | | | 0 | | | | 0 | | | | 37,204 | | | | 0 | | | | 1,458,234 | | | | 0 | | | | 0 | | | | 1,458,234 | |
Deferred Compensation Vesting Acceleration | | | 0 | | | | 7,758 | | | | 0 | | | | 0 | | | | 7,758 | | | | 0 | | | | 24,349 | | | | 0 | | | | 0 | | | | 24,349 | |
Payment for Taxes Resulting from Deferred Compensation Distribution | | | 0 | | | | 7,099 | | | | 0 | | | | 0 | | | | 7,099 | | | | 0 | | | | 33,198 | | | | 0 | | | | 0 | | | | 33,198 | |
Total | | | 305,000 | | | | 1,047,235 | | | | 0 | | | | 0 | | | | 742,235 | | | | 322,000 | | | | 2,060,742 | | | | 0 | | | | 0 | | | | 1,738,742 | |
3342
James C. Hobby
The following table shows the potential payments upon termination or a change of control of the Company for James C. Hobby, the Company’s Senior Vice President — Global Operations, as if such termination had occurred on December 31, 2007:2009:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Company Initiated | | Executive Initiated | | | Company Initiated | | Executive Initiated |
| | Before
| | After
| | | | | | | | | Before
| | After
| | | | | | |
| | Change in
| | Change in
| | | | | | | | | Change in
| | Change in
| | | | | | |
| | Control
| | Control
| | | | | | | | | Control
| | Control
| | | | | | |
| | Termination
| | Termination
| | | | Voluntary
| | | | | Termination
| | Termination
| | | | Voluntary
| | |
| | w/o Cause
| | w/o Cause
| | | | Termination
| | | | | w/o Cause
| | w/o Cause
| | | | Termination
| | |
| | or for Good
| | or for Good
| | Voluntary
| | for “Good
| | Change in
| | | or for Good
| | or for Good
| | Voluntary
| | for “Good
| | Change in
|
| | Reason
| | Reason
| | Termination
| | Reason”
| | Control
| | | Reason
| | Reason
| | Termination
| | Reason”
| | Control
|
Type of Benefit | | ($) | | ($) | | ($) | | ($) | | ($) | | | ($) | | ($) | | ($) | | ($) | | ($) |
|
Severance Pay | | | 305,000 | | | | 305,000 | | | | 0 | | | | 0 | | | | 0 | | | | 335,500 | | | | 335,500 | | | | 0 | | | | 0 | | | | 0 | |
Bonus Payment | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Stock Grants Vesting Acceleration | | | 0 | | | | 796,896 | | | | 0 | | | | 0 | | | | 796,896 | | | | 0 | | | | 227,868 | | | | 0 | | | | 0 | | | | 227,868 | |
Stock Option Vesting Acceleration | | | 0 | | | | 34,012 | | | | 0 | | | | 0 | | | | 34,012 | | | | 0 | | | | 1,482,889 | | | | 0 | | | | 0 | | | | 1,482,889 | |
Deferred Compensation Vesting Acceleration | | | 0 | | | | 33,351 | | | | 0 | | | | 0 | | | | 33,351 | | | | 0 | | | | 34,792 | | | | 0 | | | | 0 | | | | 34,792 | |
Payment for Taxes Resulting from Deferred Compensation Distribution | | | 0 | | | | 70,864 | | | | 0 | | | | 0 | | | | 70,864 | | | | 0 | | | | 171,242 | | | | 0 | | | | 0 | | | | 171,242 | |
Total | | | 305,000 | | | | 1,240,123 | | | | 0 | | | | 0 | | | | 935,123 | | | | 335,500 | | | | 2,252,291 | | | | 0 | | | | 0 | | | | 1,916,791 | |
David L. PearsonJames T. Holder
The following table shows the potential payments upon termination or a change of control of the Company for David L. Pearson,James T. Holder, the Company’s Senior Vice President, General Counsel and Chief Information Officer,Corporate Secretary, as if such termination had occurred on December 31, 2007:2009:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Company Initiated | | Executive Initiated | | | Company Initiated | | Executive Initiated |
| | Before
| | After
| | | | | | | | | Before
| | After
| | | | | | |
| | Change in
| | Change in
| | | | | | | | | Change in
| | Change in
| | | | | | |
| | Control
| | Control
| | | | | | | | | Control
| | Control
| | | | | | |
| | Termination
| | Termination
| | | | Voluntary
| | | | | Termination
| | Termination
| | | | Voluntary
| | |
| | w/o Cause
| | w/o Cause
| | | | Termination
| | | | | w/o Cause
| | w/o Cause
| | | | Termination
| | |
| | or for Good
| | or for Good
| | Voluntary
| | for “Good
| | Change in
| | | or for Good
| | or for Good
| | Voluntary
| | for “Good
| | Change in
|
| | Reason
| | Reason
| | Termination
| | Reason”
| | Control
| | | Reason
| | Reason
| | Termination
| | Reason”
| | Control
|
Type of Benefit | | ($) | | ($) | | ($) | | ($) | | ($) | | | ($) | | ($) | | ($) | | ($) | | ($) |
|
Severance Pay | | | 220,000 | | | | 220,000 | | | | 0 | | | | 0 | | | | 0 | | | | 270,000 | | | | 270,000 | | | | 0 | | | | 0 | | | | 0 | |
Bonus Payment | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Stock Grants Vesting Acceleration | | | 0 | | | | 428,346 | | | | 0 | | | | 0 | | | | 428,346 | | | | 0 | | | | 99,530 | | | | 0 | | | | 0 | | | | 99,530 | |
Stock Option Vesting Acceleration | | | 0 | | | | 15,505 | | | | 0 | | | | 0 | | | | 15,505 | | | | 0 | | | | 658,068 | | | | 0 | | | | 0 | | | | 658,068 | |
Deferred Compensation Vesting Acceleration | | | 0 | | | | 30,639 | | | | 0 | | | | 0 | | | | 30,639 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Payment for Taxes Resulting from Deferred Compensation Distribution | | | 0 | | | | 77,129 | | | | 0 | | | | 0 | | | | 77,129 | | | | 0 | | | | 60,496 | | | | 0 | | | | 0 | | | | 60,496 | |
Total | | | 220,000 | | | | 771,619 | | | | 0 | | | | 0 | | | | 551,619 | | | | 270,000 | | | | 1,088,094 | | | | 0 | | | | 0 | | | | 818,094 | |
3443
EMPLOYMENT AGREEMENTS
Charles E. Sykes. The Company and Mr. Sykes are parties to an amended and restated employment agreement, dated August 1, 2004, as amended on July 28, 2005 to correct a scrivener’s error, and as amended on January 3, 2006 to change his compensation.December 30, 2008. The material terms and conditions of the agreement as amended are summarized below. Under the agreement, Mr. Sykes serves as President and Chief Executive Officer of the Company. The initial term of the agreement expired on July 31, 2007,2009, but was automatically renewed, and will continue to be automatically renewed, for successive one-year terms unless one of the parties provides written notice of its intent not to renew the agreement at least 180 days prior to the expiration of any renewal term. Under the agreement, as amended, Mr. Sykes’ annual base salary is $500,000.$550,000, subject to increase at the Company’s discretion. Mr. Sykes also is entitled to participate in a performance based bonus of up to 75% of his base salaryplan based upon the achievement of such goals as may be determined by the Compensation Committee, and to participate in such other bonus programs and benefit plans as are generally made available to other executive officers of the Company.
If the agreement is terminated by the Company prior to the expiration of a renewal period for any reason other than death, disability, or cause (as defined in the agreement), or if the agreement is terminated by Mr. Sykes prior to the expiration of the renewal period for good reason (as defined below), the Company is required to pay Mr. Sykes an amount equal to two times his weeklyannual base salary, through the end of the renewal period of the agreement or for 104 weeks, whichever is greater, and during such period Mr. Sykes is prohibited for a period of two years from soliciting the Company’s employees and competing with the Company in any area in which the Company’s clients were conducting business during the initial term or any renewal term of the agreement. If the agreement is terminated by Mr. Sykes following a change inof control of the Company (as defined in the agreement) prior to the expiration of the initial term or any renewal period, the Company is required to pay Mr. Sykes an amount equal to three times his weeklyannual base salary, for 156 weeks from the date of termination, rather than 104 weeks, and to pay himplus an amount determined by multiplying the annual target bonus designated or otherwise indicated for himMr. Sykes in the year such change of control occurs by a factor of three,three. The target bonus amount is to be determined under the performance based bonus plan in which Mr. Sykes is then participating. Except as provided below, the foregoing amounts are to be paid biweekly in equal installments over 52 weeks, commencing immediately upon his separation from service. If Mr. Sykes is determined to be a “specified employee” on the date of his “separation from service” (each as defined in Section 409(A) of the Internal Revenue Code and payingapplicable regulations), to the extent that he is entitled to receive any benefit or payment upon such amount overseparation from service under the 156-week period. employment agreement that constitutes deferred compensation within the meaning of Section 409A of the Internal Revenue Code before the date that is six months after the date of his separation from service, such benefits or payments will not be provided or paid to him on the date otherwise required to be provided or paid. Instead, all such amounts shall be accumulated and paid in a single lump sum on the first business day after the date that is six months after the date of his separation from service (or, if earlier, within fifteen (15) days following his date of death). All remaining payments and benefits otherwise required to be paid or provided on or after the date that is six months after the date of his separation from service will be paid or provided or paid in accordance with the payment schedule described above.
Also, in the event the agreement is terminated by Mr. Sykes followingin connection with a change inof control of the Company, all stock options, stock grants or other similar equity incentivesand/or compensation programs will immediately accelerate and become fully vested and exercisable at the option of Mr. Sykes upon the event of termination.Sykes.
“Good reason” for Mr. Sykes’ termination of the agreement is defined in the agreement as: (i) a change of control of the Company (as defined in the agreement), (ii) a good faith determination by Mr. Sykes that the Company has breached the employment agreement, (iii) a material adverse change in working conditions or status, (iv) the deletion of, or change in, any of the titles of CEO or President, (v) a significant relocation of Mr. Sykes’ principal office, (vi) a significant increase in travel requirements, or (vii) an impairment of Mr. Sykes’ health to an extent that made the continued performance of his duties under the agreement hazardous to his physical or mental health or his life.
44
The agreement provides that if Mr. Sykes’ employment is terminated by the Company due to his death, disability or for cause, or voluntarily by Mr. Sykes other than for good reason, then the Company will have no obligation to pay him any salary, bonus or other benefits other than those payable through the date of termination, and Mr. Sykes may not solicit any of the Company’s employees or compete directly or indirectly with the Company during the term of the agreement and for a period of one year after its termination, regardless of the reason for its termination. The agreement contains customary confidentiality provisions.
W. Michael Kipphut. The Company and Mr. Kipphut are parties to an amended and restated employment agreement, dated March 6, 2005,December 30, 2008, the material terms and conditions of which are summarized below. The employment agreement provides that Mr. Kipphut will serve as an executive of the Company. Mr. Kipphut serves as Group Executive, Senior Vice President — Finance and Chief Financial Officer. The initial term of the agreement expired on March 5,
35
Company has breached the employment agreement, (iii) a material adverse change in working conditions or status, (iv) the deletion of, or change in, any of the titles of Senior Vice President and Chief Financial Officer, (v) a significant relocation of Mr. Kipphut’s principal office, (vi) a change in reporting such that Mr. Kipphut is required to report to someone other than the CEO, or (vii) a significant increase in travel requirements.
The agreement provides that if Mr. Kipphut’s employment is terminated by the Company due to his death, disability or for cause, or voluntarily by Mr. Kipphut other than for good reason, then the Company will have no obligation to pay him any salary, bonus or other benefits other than those payable through the date of termination.
The agreement provides that Mr. Kipphut may not solicit any of the Company’s employees or compete directly or indirectly with the Company during the term of the agreement and for one year after its expiration in any area in which the Company’s clients were conducting business during the initial term or any renewal term of the agreement. If the agreement is terminated by the Company or Mr. Kipphut prior to the end of its term, regardless of the reason for its termination the non-solicitation and non-competition provisions will remain in effect through the end of the renewal period or for 52 weeks after termination, whichever is greater. The agreement contains customary confidentiality provisions.
James C. Hobby. The Company and Mr. Hobby are parties to an amended and restated employment agreement, dated January 2, 2007,December 29, 2008, the material terms and conditions of which are summarized below. The employment agreement provides that Mr. Hobby will serve as an executive of the Company. Mr. Hobby serves as Senior Vice President, Global Operations. The agreement will continue until terminated by one of the parties. Under the agreement, Mr. Hobby’s annual base salary is $335,500, subject to be not less than $305,000, and heincrease at the Company’s discretion. He also is entitled to participate in a performance-basedperformance based bonus program ranging from 0% to 50%plan based upon the achievement of his base salarysuch goals as may be determined by the Compensation Committee and to standard executive fringe benefits.
36
If the agreement is terminated by the Company for any reason other than death, disability, or cause (as defined in the agreement), the Company is required to pay Mr. Hobby an amount equal to his weekly base salary for 52 weeks after the termination of the agreement. Except as provided below, the foregoing amount is to be paid biweekly in equal installments over 52 weeks, commencing immediately upon his separation from service. If Mr. Hobby is determined to be a “specified employee” on the date of his “separation from service” (each as defined in Section 409(A) of the Internal Revenue Code and applicable regulations), to the extent that he is entitled to receive any benefit or payment upon such separation from service under the employment agreement that constitutes deferred compensation within the meaning of Section 409A of the Internal Revenue Code before the date that is six months after the date of his separation from service, such benefits or payments will not be provided or paid to him on the date otherwise required to be provided or paid. Instead, all such amounts shall be accumulated and paid in a single lump sum on the first business day after the date that is six months after the date of his separation from service (or, if earlier, within fifteen (15) days following his date of death). All remaining payments and benefits otherwise required to be paid or provided on or after the date that is six months after the date of his separation from service will be paid or provided or paid in accordance with the payment schedule described above. If Mr. Hobby’s employment is terminated by the Company due to his death, disability or cause, or voluntarily by Mr. Hobby, then the Company will have no obligation to pay him any salary, bonus or other benefits other than those payable through the date of termination. In any event, Mr. Hobby may not compete with the Company in any area in which the Company’s clients were conducting business during the term of the agreement, or solicit the Company’s employees, for a period of one year after termination of his employment. The agreement also contains customary confidentiality provisions.
Lawrence R. Zingale. The Company and Mr. Zingale are parties to an amended and restated employment agreement, dated April 10,December 29, 2008, the material terms and conditions of which are summarized below. The employment agreement provides that Mr. Zingale will serve as an executive of the Company. Mr. Zingale serves as Senior Vice President, Global Sales and Client Management. The agreement continueswill continue until terminated by one of the parties. Under the agreement, Mr. Zingale’s annual base salary is $322,000, subject to be not less than $322,000 throughincrease at the end of the term of the agreement, and heCompany’s discretion. He also is entitled to participate in a performance based bonus program ranging from 0% to 50%plan based upon the
46
achievement of his base salary,such goals as may be determined by the Compensation Committee and to standard executive fringe benefits.
If the agreement is terminated by the Company for any reason other than death, disability, or cause (as defined in the agreement), the Company is required to pay Mr. Zingale an amount equal to his weekly base salary for 52 weeks after the termination of the agreement. Except as provided below, the foregoing amount is to be paid biweekly in equal installments over 52 weeks, commencing immediately upon his separation from service. If Mr. Zingale is determined to be a “specified employee” on the date of his “separation from service” (each as defined in Section 409(A) of the Internal Revenue Code and applicable regulations), to the extent that he is entitled to receive any benefit or payment upon such separation from service under the employment agreement that constitutes deferred compensation within the meaning of Section 409A of the Internal Revenue Code before the date that is six months after the date of his separation from service, such benefits or payments will not be provided or paid to him on the date otherwise required to be provided or paid. Instead, all such amounts shall be accumulated and paid in a single lump sum on the first business day after the date that is six months after the date of his separation from service (or, if earlier, within fifteen (15) days following his date of death). All remaining payments and benefits otherwise required to be paid or provided on or after the date that is six months after the date of his separation from service will be paid or provided or paid in accordance with the payment schedule described above. If Mr. Zingale’s employment is terminated by the Company due to his death, disability or cause, or voluntarily by Mr. Zingale, then the Company will have no obligation to pay him any salary, bonus or other benefits other than those payable through the date of termination. In any event, Mr. Zingale may not compete with the Company in any area in which the Company’s clients were conducting business during the term of the agreement, or solicit the Company’s employees, for a period of one year after termination of his employment. The agreement also contains customary confidentiality provisions.
David L. Pearson.James T. Holder. The Company and Mr. PearsonHolder are parties to an amended and restated employment agreement, dated September 20, 2005, as amended on October 1, 2007 and January 3,December 29, 2008, to change his compensation, the material terms and conditions of which are summarized belowbelow. The employment agreement provides that Mr. PearsonHolder will serve as an executive of the Company. Mr. PearsonHolder serves as Senior Vice President, Information Technology.General Counsel and Corporate Secretary. The agreement had an initial term which expired on September 19, 2006, but was automatically renewed, and will continue to automatically renew, for successive one-year terms unlessuntil terminated by one of the parties provides written notice of its intent not to renew at least 180 days prior to the expiration of a renewal term.parties. Under the agreement, Mr. Pearson’sHolder’s annual base salary is $270,000, subject to be not less than $231,000 throughincrease at the end of the term of the agreement, and heCompany’s discretion. He also is entitled to participate in a performance based bonus program ranging from 0% to 50%plan based upon the achievement of his base salary,such goals as may be determined by the Compensation Committee and to standard executive fringe benefits.
If the agreement is terminated by the Company prior to the expiration of the renewal period for any reason other than death, disability, or cause (as defined in the agreement), the Company is required to pay Mr. PearsonHolder an amount equal to his weekly base salary for 52 weeks after the termination of the agreement. Except as provided below, the foregoing amount is to be paid biweekly in equal installments over 52 weeks, commencing immediately upon his separation from service. If Mr. Holder is determined to be a “specified employee” on the date of his “separation from service” (each as defined in Section 409(A) of the Internal Revenue Code and applicable regulations), to the extent that he is entitled to receive any benefit or payment upon such separation from service under the employment agreement that constitutes deferred compensation within the meaning of Section 409A of the Internal Revenue Code before the date that is six months after the date of his separation from service, such benefits or payments will not be provided or paid to him on the date otherwise required to be provided or paid. Instead, all such amounts shall be accumulated and Mr. Pearson may not competepaid in a single lump sum on the first business day after the date that is six months after the date of his separation from service (or, if earlier, within fifteen (15) days following his date of death). All remaining payments and benefits otherwise required to be paid or provided on or after the date that is six months after the date of his separation from service will be paid or provided or paid in accordance with the Company during such period in any area in which the Company’s clients were conducting business during the initial term or any renewal term of the agreement.payment schedule described above. The agreement also provides that if Mr. Pearson’sHolder’s employment is terminated by the
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Company due to his death, disability or cause, or voluntarily by Mr. Pearson,Holder, then the Company will have no obligation to pay him any salary, bonus or other benefits other than those payable through the date of termination, andtermination. In any event, Mr. PearsonHolder may not compete with the Company for a period through the end of the renewal period of the agreement or for 52 weeks following the termination of his employment, whichever is greater. The agreement provides that, after termination of his employment forin any reason, whether by the Company or Mr. Pearson, Mr. Pearson may not solicitarea in which the Company’s employees forclients were conducting business during the
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longer of (i) the remaining term of the agreement, or (ii)solicit the Company’s employees, for a period of one year after termination of his employment. The agreement also contains customary confidentiality provisions.
DIRECTOR COMPENSATION
Directors who are executive officers of the Company receive no compensation for service as members of either the Board of Directors or any committees of the Board.
Third Amended and Restated 2004 Non-Employee Director Fee Plan
In May 2005,2009, the shareholders of the Company approved the Third Amended and Restated 2004 Non-Employee Director Fee Plan (the “2004 Fee Plan”). The 2004 Fee Plan provides that all new non-employee directors joining the Board will receive an initial grant of shares of common stock units (“CSUs”) on the date the new director is appointedelected or elected,appointed, the number of which will be determined by dividing a dollar amount to be determined from time to time$60,000 by the Board (initially set at $30,000) by an amount equal to 110% of the closing price of the Company’s common stock on the trading day immediately preceding the date thea new director is elected or appointed, or elected.rounded to the nearest whole number of shares. The initial grant of CSUs will vestshares vests in threetwelve equal quarterly installments, one-thirdone-twelfth on the date of grant and an additional one-twelfth on each successive third monthly anniversary of the following three annual shareholders’ meetings. A CSU isdate of grant. The award lapses with respect to all unvested shares in the event the non-employee director ceases to be a bookkeeping entry on the Company’s books that records the equivalent of one share of common stock. On the date each CSU vests, the director will become entitled to receive a share of the Company’s common stockCompany, and the CSU will be canceled.any unvested shares are forfeited.
Additionally, theThe 2004 Fee Plan also provides that each non-employee director will receive, on the day after the annual shareholders meeting, an annual retainer for service as a non-employee director (the “Annual Retainer”). The Annual Retainer consists of shares of the Company’s common stock and cash. The total value of the Annual Retainer is $77,500, payable $32,500 in cash and the remainder paid in stock, the amount of which shall be determined from time to time by the Board. Under the 2004 Fee Plan, the annual retainer will be paid 75% in CSUs and 25% in cash. The number of CSUs to be granted under the 2004 Fee Plan will beis determined by dividing the amount of the annual retainer$45,000 by an amount equal to 105% of the closing price forof the Company’s common stock on the award date (the day afterof the annual meeting). The annual grantmeeting of CSUs will vest in two equal installments, one-half on the date of each of the following two annual shareholders’ meetings. All CSUs will automatically vest upon the termination of a director’s service as a director, whether by reason of death, retirement, resignation, removal or failure to be reelected at the end of his or her term. Until a CSU vests, the director has none of the rights of a shareholder with respectshareholders, rounded to the CSU or the common stock underlying the CSU. CSUs are not transferable.nearest whole number of shares.
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The Compensation and Human Resource Development Committee reviews Board compensation on an annual basis and makes recommendationsIn addition to the full Board which is responsibleAnnual Retainer award, the 2004 Fee Plan also provides for the final determination as to Board compensation. For 2006 and 2007, the Compensation Committee and the Board have established the annual retainer fee for non-employee directors at $50,000. Anyany non-employee Chairman of the Board receivesto receive an additional annual cash compensation in the amountaward of $100,000. The Chairperson$100,000, and each non-employee director serving on a committee of the Audit Committee receivesBoard to receive an additional annual cash compensationaward in the amountfollowing amounts:
| | | | |
Position | | Amount |
|
Audit Committee | | | | |
Chairperson | | $ | 20,000 | |
Member | | $ | 10,000 | |
Compensation & Human Resource Development Committee | | | | |
Chairperson | | $ | 12,500 | |
Member | | $ | 7,500 | |
Finance Committee | | | | |
Chairperson | | $ | 12,500 | |
Member | | $ | 7,500 | |
Nominating and Corporate Governance Committee | | | | |
Chairperson | | $ | 12,500 | |
Member | | $ | 7,500 | |
The Annual Grant of $10,000,cash and the Chairpersons of the Compensation and Human Resource Development Committee and the Nominating and Corporate Governance Committee each receive additional annual cash compensation in the amount of $5,000. The Chairperson of any Special Committee appointed by theshares, including all amounts paid to a non-employee Chairman of the Board will receiveand all amounts paid to non-employee directors serving on committees of the Board, vests in eight equal quarterly installments, one-eighth on the day following the annual meeting of shareholders, and an additional cash payment of $2,000 at the formationone-eighth on each successive third monthly anniversary of the Special Committee.date of grant. The award lapses with respect to all unpaid cash and unvested shares in the event the non-employee director ceases to be a director of the company, and any unvested shares and unpaid cash are forfeited.
In additionThe Board may pay additional cash compensation to the initial grant of CSUs and the annual retainer, eachany non-employee director receives a cash paymentfor services on behalf of $1,250 for each dayhe/she attends committeeand/or board meetings, and a cash payment of $500 for each Board or Committee teleconference that lasts longer than one hour.
In March, 2008, the Compensation and Human Resource Committee recommended to the Board over and above those typically expected of directors, including but not limited to service on a special committee of the Board adopted, amendments to the 2004 Fee Plan which provided that the initial grant of CSUs to directors joining the Board, as well as annual retainer grants of cash and CSUs, will vest and be earned in equal quarterly installmentsBoard.
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