UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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GLOBAL POWER EQUIPMENTWILLIAMS INDUSTRIAL SERVICES GROUP INC.
400 East Las Colinas Boulevard,100 Crescent Centre Parkway, Suite 400Irving, Texas 750391240
Tucker, Georgia 30084
Dear Stockholder of Global Power EquipmentWilliams Industrial Services Group Inc.:
You are cordially invited to attend the Annual Meeting of Stockholders of Global Power EquipmentWilliams Industrial Services Group Inc. (the "Company," "us"“Company,” “we,” “us” or "our"“our”). The meeting will be held on Thursday, May 1, 2014November 9, 2018 beginning at 9:00 a.m. local time, at the offices of the Company located at 400 East Las Colinas Boulevard, Irving, Texas, 75039.100 Crescent Centre Parkway, Suite 104, Tucker, Georgia 30084.
Information about the meeting, nominees for election as directors and our other proposals are presented in the following Notice of Annual Meeting of Stockholders and proxy statement. At the meeting, management will make a presentation followed by a question and answer period.
The Company is pleased to announce that we are taking advantage of the Securities and Exchange Commission's "notice and access" proxy rule, which allows companies to furnish proxy materials via the Internet as an alternative to the traditional approach of mailing a printed set to each stockholder. We believe this will allow us to continue to provide stockholders with the proxy materials they need while reducing printing and postage costs associated with delivery and reducing the environmental impact of the annual meeting. In accordance with these rules, we have sent a Notice of Internet Availability of Proxy Materials to all stockholders. The Notice of Internet Availability of Proxy Materials contains instructions on how to access our proxy statement and annual report to stockholders, as well as how to vote either online or in person at the annual meeting.
It is important that your shares are represented at the annual meeting. Accordingly, please vote as soon as possible. I express our appreciation for your continued interest in the affairs of the Company. We look forward to your participation in the annual meeting.
/s/ TRACY D. PAGLIARA | ||
Tracy D. Pagliara | ||
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Tucker, Georgia | ||
October 5, 2018 |
GLOBAL POWER EQUIPMENTWILLIAMS INDUSTRIAL SERVICES GROUP INC.
400 East Las Colinas Boulevard,100 Crescent Centre Parkway, Suite 400Irving, Texas 750391240
Tucker, Georgia 30084
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 1, 2014NOVEMBER 9, 2018
The Annual Meeting of Stockholders (the "Annual Meeting"“Annual Meeting”) of Global Power EquipmentWilliams Industrial Services Group Inc. (the "Company," "us"“Company,” “we,” “us” or "our"“our”) will be held on Thursday, May 1, 2014November 9, 2018 at the offices of the Company located at 400 East Las Colinas Boulevard, Irving, Texas, 75039100 Crescent Centre Parkway, Suite 104, Tucker, Georgia 30084 at 9:00 a.m. local time for the following purposes:
1.
- to elect
sixthe five directorsofnamed in theBoard of Directorsaccompanying proxy statement to serve until the next annual meeting or until their successors have been duly elected and qualified; 2.
- to ratify the appointment of
BDO USA,Moss Adams LLP as theCompany'sCompany’s independent registered public accounting firm for2014; - 2018;
3.
- to
considerapprove, on an advisory,votenon-binding basis, the compensation of our named executive officers;4. to approve, on an advisory, non-binding basis, the frequency of future advisory votes on the compensation of our named executive officers; and
4.5.to transact such other business as may properly come before the meeting or any adjournments or postponements thereof.
Only stockholders of record at the close of business on March 6, 2014October 1, 2018 are entitled to notice of, and to vote at, the Annual Meeting and at any adjournments or postponements thereof. A list of such stockholders will be available for inspection at the Company'sCompany’s headquarters located at 400 East Las Colinas Boulevard,100 Crescent Centre Parkway, Suite 400, Irving, Texas 75039,1240, Tucker, Georgia 30084, during ordinary business hours, for ten10 days prior to the Annual Meeting.
Important Notice Regarding the Availability of Proxy Materials for the 20142018 Annual Meeting of Stockholders to be held on May 1, 2014November 9, 2018. This year, instead Pursuant to U.S. Securities and Exchange Commission (“SEC”) rules, we have elected the “full set delivery” option of mailing a printed copyproviding proxy materials to our stockholders whereby we are delivering to all stockholders paper copies of all of our proxy materials, including a proxy card, as well as providing access to our proxy materials on a publicly accessible website. This proxy statement and the Company'sCompany’s Annual Report to Stockholders for the year ended December 31, 2013, to each stockholder2017 are available at http://materials.proxyvote.com/96951A. The information that appears on our website is not part of, record, we have decided to provide access toand is not incorporated by reference into, this notice or our proxy statement. In accordance with such rules, “cookies” or other software that identifies visitors accessing these materials via the Internet. This reduces the amount of paper necessary to produce these materials, as well as the costs associated with mailing these materials to all stockholders. Accordingly,will not be used on March 20, 2014, we began mailing a Notice of Internet Availability of Proxy Materials (the "Notice") to all stockholders of record as of March 6, 2014, and posted our proxy materials on the website referenced in the Notice (http://materials.proxyvote.com/37941P). As more fully described in the Notice, all stockholders may choose to access our proxy materials on the website referred to in the Notice or may request a printed set of our proxy materials. In addition, the Notice and website provide information regarding how you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.this website.
If you received a printed copy of the materials, we have enclosed a copy of the Company's Annual Report to Stockholders for the year ended December 31, 2013 with this notice and proxy statement.
To make it easier for you to vote, Internet and telephone voting isare available. The instructions on the Noticeyour enclosed proxy card describe how to use this service.these services. Of course, if you prefer, you can vote by telephone or by mail by requesting a printed copy of the proxy materials and following the instructions on the proxy card to vote by telephone, or completing your proxy card and returning it in the accompanyingenclosed envelope. No postage is required if your proxy card is mailed in the United States. If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card. We urge you to vote your proxy promptly by Internet, telephone or mail, whether or not you plan to attend the Annual Meeting in
person. If you do attend the Annual Meeting in person, you may withdraw your proxy and vote personally on all matters brought before the Annual Meeting.
Your vote is very important. Whether or not you plan to attend the Annual Meeting, please complete and return your proxy card or vote by telephone or via the Internet by following the instructions on the Notice or, if you received a printed set of materials by mail, vote by telephone by following the instructions on your proxy card or complete and return your proxy card. Returning a proxy card or
otherwise submitting your proxy does not deprive you of your right to attend the Annual Meeting and vote in person. Proxies are being solicited on behalf of the Board of Directors.
If you have any questions or require assistance with voting your proxy card, please contact our proxy solicitor, Regan & Associates, Inc. at (800) 737-3426.
BY ORDER OF THE BOARD OF DIRECTORS, | ||
/s/ TRACY D. PAGLIARA | ||
Tracy D. Pagliara | ||
| ||
Tucker, Georgia | ||
October 5, 2018 |
i
GLOBAL POWER EQUIPMENT
WILLIAMS INDUSTRIAL SERVICES GROUP INC.
400 East Las Colinas Boulevard,100 Crescent Centre Parkway, Suite 4001240
Irving, Texas 75039Tucker, Georgia 30084
PROXY STATEMENT
FOR THENOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 1, 2014NOVEMBER 9, 2018
These proxy materials are furnished in connection with the solicitation of proxies by the Board of Directors (the "Board“Board of Directors"Directors” or the "Board"“Board”) of Global Power EquipmentWilliams Industrial Services Group Inc., a Delaware corporation (the "Company," "us"“Company,” “we,” “us” or "our"“our”), for the annual meeting of stockholders (the “Annual Meeting of Stockholders (the "Annual Meeting"”) to be held on Thursday, May 1, 2014November 9, 2018 at the offices of the Company located at 400 East Las Colinas Boulevard, Irving, Texas, 75039100 Crescent Centre Parkway, Suite 104, Tucker, Georgia 30084 at 9:00 a.m. local time, and at any adjournments or postponements of the Annual Meeting. This proxy statement isand the related proxy form are first being made available to stockholders on or about March 20, 2014.October 5, 2018. For directions to the meeting,Annual Meeting, please call 1-214-574-2700.(770) 879-4400.
The specific proposals to be considered and acted upon at the Annual Meeting are summarized in the accompanying Notice of Annual Meeting of Stockholders.Stockholders (the “Notice”). Each proposal is described in more detail in this proxy statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Only holders
Each share of our common stock, ("par value $0.01 per share (“Common Stock"Stock”), outstanding as of the close of business on October 1, 2018 (the “Record Date”) areis entitled to one vote at the Annual Meeting. AtAs of the close of business on March 6, 2014, the record date for determining the holders of Common Stock entitled to vote at the Annual Meeting (the "Record Date"),Record Date, there were 17,063,00018,514,231 shares of Common Stock outstanding. Each holder of a share of Common Stock isoutstanding and entitled to one vote per share.vote. All votes will be tabulated by the inspector of elections appointed for the meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes.non-votes (as described below).
You may vote all of the Common Stock owned by you as of the close of business on the Record Date. This Common Stock includes Common Stock that is (i) held of record directly in your name and (ii) held for you as the beneficial owner through a bank, broker or other nominee. There are some distinctions between Common Stock held of record and Common Stock owned beneficially, as described herein.
Quorum Required
Our bylaws provide that the holders of record of at least a majority of the votes represented byshares of the Common Stock issued and outstanding and entitled to vote at the Annual Meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining the presence of a quorum.
Voting of Shares
Whether or not you plan to attend the Annual Meeting, or not, we urge you to vote by proxy. All shares represented by valid proxies that we receive, through this solicitation, and that are not revoked, will be voted in accordance with yourthe instructions on the proxy card or as instructed via Internet or telephone. YouVoting by proxy will not affect your right to attend the Annual Meeting.
The proxy is solicited by the Board and will be voted as you direct on your proxy when properly completed. For “Proposal No. 1 — Election of Directors,” you may specify whether your shares should be voted for all, withheld from all or withholdvoted for all except specified nominees for director. For each of “Proposal No. 2 — Ratification of Independent Registered Public Accounting Firm” and “Proposal No. 3 — Advisory Vote to Approve the nominees for
director, andthe Named Executive Officers,” you may specify whether your shares should be voted for, against or abstain with respect to each proposal. For “Proposal No. 4 — Advisory Vote to Approve the Frequency of the Advisory Vote on Executive Compensation,” you may
specify whether your shares should be voted for a one-year, two-year or three-year frequency or abstain with respect to such proposal.
Our bylaws provide that elections of directors shall be determined by a plurality of the votes cast and all other proposals. Votingactions shall be determined by proxy will not affect your right to attenda majority of the votes cast at the Annual Meeting.Meeting, unless otherwise provided by law. Withheld votes under Proposal 1 and abstentions under Proposals 2 through Proposal 4 are not considered votes cast and, therefore, will have no effect on the respective proposals. In addition, broker non-votes, as described below, are not considered votes cast and, therefore, will have no effect on the respective proposals.
If your shares are registered directly in your name through our stock transfer agent, Computershare Trust Company, N.A., or you have stock certificates, you may vote:
•·By
Internet.Follow the instructions on the Notice to vote by Internet.•By telephoneInternet or bymail.If you received a printed version of these proxy materials, followtelephone. Follow the instructions on the enclosed proxy card to vote bytelephone,Internet orcompletetelephone.·By mail. Complete and mail the enclosed proxy card in the
enclosedaccompanying prepaid postageprepaidenvelope. Your proxy will be voted in accordance with your instructions. If you sign the proxy card but do not specify how you want your shares voted, they will be voted as recommended by the Board.·
•- In person at the meeting.If you attend the
meeting,Annual Meeting, you may deliver your completed proxy card in person or you may vote by completing a ballot, which will be available at the Annual Meeting.
If your shares are held in "street name" (held in the name of“street name” (that is, through a bank, broker or other nominee), you must provide the bank, broker or other nominee with instructions on how to vote your shares. Ifshares, and can do so as follows:
·By Internet or by telephone. Follow the instructions you received a printed version of these proxy materials, you should have received a voting instruction formreceive from your bank, broker or other nominee that holds your shares. For shares held in street name, follow the instructions contained in the Notice or voting instruction form to vote by Internet telephone or telephone.
·By mail. If you want to vote by mail but have not received a printed version of these proxy materials, you may request a full packet of proxy materials as instructed by the Notice. If you wantYou will receive instructions from your bank, broker or other nominee explaining how to vote your shares inshares.
·In person at the Annual Meeting, contactmeeting. Contact the bank, broker or other nominee who holds your shares to obtain a broker'sbroker’s proxy card and bring it with you to the Annual Meeting. You will not be able to attend the Annual Meeting unless you have a proxy card from your broker. bank, broker or other nominee.
You should contact your bank, broker or other nominee or refer to the instructions provided by your bank, broker or other nominee for further information.
If your shares are registered in your name or if you have stock certificates, they will not be voted if you do not vote by Internet or telephone, return your proxy card by mail or vote at the Annual Meeting as described above, but,above; however, if you properly submit a proxy but do not specify your proxy card without giving specific voting instructions,choice on one or more of the proposals included thereon, as listed in the accompanying Notice, your shares will be voted in accordanceas follows:
·FOR the election of each of the five nominees for directors named below (Proposal No. 1);
·FOR the ratification of the appointment of Moss Adams LLP (“Moss Adams”) as the Company’s independent registered public accounting firm for 2018 (Proposal No. 2);
·FOR the approval, on an advisory, non-binding basis, of the compensation of our named executive officers (Proposal No. 3); and
·FOR ONE YEAR, on an advisory, non-binding basis, with respect to the Board's recommendations as specified below. frequency of future advisory votes on executive compensation (Proposal No. 4).
The Company knows of nodoes not anticipate any other matters towill be presented at the Annual Meeting. However, if any other matters are properly presented, the proxy holders will be authorized to vote the shares represented by proxies according to their best judgment. Proxies will extend to, and be voted at, any adjournment or postponement of the Annual Meeting. You may revoke or change your proxy at any time before the Annual Meeting. To do this, sendMeeting by sending a written notice of revocation or another signed
proxy withbearing a later date to the Corporate Secretary of the Company at our principal executive officeoffices before the beginning of the Annual Meeting. You may also automatically revoke your proxy by attending the Annual Meeting and voting in person.person; however, attendance at the Annual Meeting will not itself constitute revocation of a proxy. All shares represented by a valid proxy received prior to the Annual Meeting will be voted.
If your shares are held in street name and you do not provide voting instructions to the bank, broker or other nominee that holds your shares as described above, the bank, broker or other nominee has the authority, even if it does not receive instructions from you, to vote your unvoted shares for Proposal 2 the(the ratification of our independent registered public accounting firm, butfirm); however, if it does not have instructions from you, the bank, broker or other nominee does not have the authority to vote your unvoted shares for Proposal 1 the(the election of nominees to the BoardBoard), Proposal 3 (the advisory vote on approval of compensation of our named executive officers), or Proposal 3,4 (the advisory vote on approval of the frequency of future advisory votevotes on compensation of our named executive officers. Ifofficers). A “broker non-vote” occurs if your bank, broker or other nominee cannot vote your shares on a particular matter because it has not received instructions from you and does not have discretionary voting authority on that matter or because your bank, broker or other nominee chooses not to vote on a matter for which it does have discretionary voting authority, this is referred to as a "broker non-vote."authority. Please note that if your shares are held of record by a bank, broker bank or other nominee and if you
provide instructions to that nominee on a form received from the nominee, you may revoke or change your voting instructions only by contacting the nominee who holds your shares. You may not vote in person at the Annual Meeting unless you obtain a legal proxy from the bank, broker bank or other nominee. In such event, your attendance at the Annual Meeting will not, by itself, revoke prior voting instructions.
Solicitation of Proxies
We will pay all of the costs of soliciting these proxies. OurWe have engaged Regan & Associates, Inc. (“Regan”) to serve as our proxy solicitor for the Annual Meeting. Regan will, among other things, provide advice related to the content of solicitation materials; conduct our broker search; solicit banks, brokers, institutional advisors and hedge funds to determine voting instructions; monitor voting; and deliver executed proxies to our voting tabulator. Regan’s base fee is approximately $25,000, and we will reimburse them for other out of pocket expenses incurred. In addition to solicitation by mail, our employees also may, without additional compensation, solicit proxies by mail, e-mail, facsimile, in person or by telephone or other forms of telecommunication. If your shares are held in "street name" (held in the“street name, of a bank, broker or other nominee) and you have requested printed versions of these materials,” we have requested that your bank, broker or other nominee forward this proxy statement to you and obtain your voting instructions. The Company may reimburse these persons for their expenses in so doing. Proxies are solicited to give allholders of record holders of Common Stock as of the Record Date an opportunity to vote on the matters to be presented at the Annual Meeting, even if they cannot attend the meeting.
ELECTION OF DIRECTORS
Six directors are being nominated for re-election to
At the Annual Meeting, five nominees will be elected as directors. Our Board of Directors bycurrently consists of five members, all of who are standing for election at the holders of our Common Stock (the "Nominees"). These directors are Luis Manuel Ramírez,Annual Meeting: Charles Macaluso, Carl Bartoli, Terence J. Cryan, Michael E. SalvatiDavid A. B. Brown, Robert B. Mills, Nelson Obus and Frank E. Williams, Jr.Tracy D. Pagliara. In the event any Nomineenominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by our present Board of Directors to fill the vacancy. As of the date of this proxy statement,Record Date, the Board of Directors is not aware of any Nomineenominee who is unable or will decline to serve as a director.
Our bylaws provide that the size of the Board shall be fixed by the directors, with a minimum of two directors. The Board's size of the Board is currently fixed at sevenfive directors. AllSince the annual meeting of stockholders held in 2015 (the “2015 Annual Meeting”), our Board has consisted of between five and twelve members. The Board increased its size from five directors are elected annually. As previously disclosed, Eugene I. Davis, a current memberto six, concurrent with the appointment of David Keller on May 8, 2015. Effective October 8, 2015, the Board of Directors, informed theincreased its size to eight directors and appointed Gary J. Taylor and Robert B. Mills to serve as directors. The Board that he will not stand for re-election at the Annual Meeting when his term expires. Therefore, effective upon election of the Board at the Annual Meeting, Mr. Davis will no longer be a member of the Board of Directors or any committee thereof. At such time, the Board has determined thatthen increased the size of the Board will decreasefrom eight to sixeleven directors on May 25, 2016, pursuant to eliminate the Election and Nomination Agreement, dated June 1, 2016, effective as of May 25, 2016, by and between the Company and Wynnefield Partners Small Cap Value, L.P., Wynnefield Partners Small Cap Value, L.P. I, Wynnefield Small Cap Value Offshore Fund, Ltd., Wynnefield Capital, Inc. Profit Sharing & Money Purchase Plan, Wynnefield Capital Management, LLC (“WCM”), and Wynnefield Capital, Inc. (“Wynnefield Capital”) (such agreement, the “Election and Nomination Agreement”). Concurrently with the effective date of such increase, Linda Goodspeed and David A. B. Brown were appointed to the Board, and Nelson Obus was appointed on June 27, 2016, to fill the final vacancy.
Nominees for Directors
Effective July 26, 2017, in connection with the appointment of Tracy D. Pagliara and Craig E. Holmes as Co-Presidents and Co-Chief Executive Officers (“Co-CEOs”) of the Company, the Board increased the size of the Board to twelve members, to permit both individuals to serve on the Board. The Election and Nomination Agreement required the Company to reduce the size of the Board to seven members; however, in order to better align with the size of the organization and to reduce costs, in April 2018, after the resignation of seven directors, the Board reduced its size to five members. On April 13, 2018, each of Ms. Goodspeed, Mr. Keller, Mr. Rescoe and Mr. Salvati voluntarily resigned from the Board, and Mr. Holmes resigned from all his positions with the Company, including his role as director; Mr. Taylor voluntarily resigned on April 14, 2018; and Mr. Bartoli voluntarily resigned on April 15, 2018.
Our Board of Directors
Set forth below are the name, age, position of and biographical information about each Nominee,nominee, as of the date of this proxy statement.Record Date.
Nominees | Age | Position(s) and Office(s) Held with the Company | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 74 | Chairman of the Board of Directors | |||||||
David A. B. Brown | 74 | Director | |||||||
Robert B. Mills | 68 | Director | |||||||
Nelson Obus | 71 | Director | |||||||
Tracy D. Pagliara | 55 | President, Chief Executive Officer and Director | |||||||
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Luis Manuel Ramírez has served asThe term for each of our President, Chief Executive Officerdirectors expires at the Annual Meeting. All directors are elected to serve until their respective successors are duly elected and Director since July 1, 2012.qualified at the next annual meeting of stockholders, or until the earlier of his death, resignation, retirement or removal from such position. There are no family relationships among any of the directors listed above or our executive officers.
Mr. Ramírez previously served 12 years with General Electric ("GE"), most recently as Chief Executive Officer
Set forth below is the specific experience, qualifications and background of GE Energy Industrial Solutions, a more than $3 billion global electrical products and services business operating in over 60 countries. In 2012, he was named oneeach of the Top 100 Movers and Shakers of the Smart Grid by Greentechmedia.com, and has also held a variety of leadership roles in industry associations. Prior to his employment with GE, Mr. Ramírez worked for more than a decade in a number of technology, financial and business roles with Siemens. Mr. Ramírez is also a member of the National Association of Corporate Directors.individuals listed above.
Mr. Ramírez received his Bachelor's degree in Computer Information Systems, with a minor in Business Administration, from DeVry Institute of Technology, Atlanta, GA, and participated in the Executive Advanced Management Certificate Program at Duke University, Durham, NC.
Director Qualifications. Mr. Ramírez has comprehensive knowledge of the power generation and energy industry. He brings with him a career of experience and understanding in the businesses in which we engage. In addition to his breadth of knowledge in the industry, Mr. Ramírez also has significant executive management experience. Prior to joining us, Mr. Ramírez served as the Chief Executive Officer of GE Energy Industrial Solutions.
Charles Macaluso has served as Chairman of our Board of Directors since January 2008. Since 1998, Mr. Macaluso has been a principal of Dorchester Capital Advisors, LLC (“Dorchester Capital”), a management consulting and corporate advisory service firm focusing on operational assessment, strategic planning and workouts.
Mr. Macaluso currently serves as a director of the following public companies: Darling InternationalIngredients Inc., where he serves as lead director and chairman of its nominating and corporate governance committee, and Pilgrim'sPilgrim’s Pride Corporation, where he serves on the audit committee. During the past five years,Previously, Mr. Macaluso also served as a director of The Elder-Beerman Stores Corp, FLAG Telecom Group LimitedCorp. and Global Crossing Limited. Mr. Macaluso is also a member of the National Association of Corporate Directors.
Director Qualifications. Mr. Macaluso has had a career focused on operational assessment, strategic planning, crisis management and turnaround advisory services, most recently with Dorchester Capital LLC.Capital. Dorchester Capital also has a significant commitment to representing the interests of investor groups as a member of the boards of directors at a diverse array of companies, and Mr. Macaluso brings with him a strong commitment to stockholders'stockholders’ interests. He also has extensive executive and financial expertise. In addition, Mr. Macaluso brings significant board expertise, including service as Chairmanchairman on a number of public and private company boards and committees.
Carl BartoliDavid A. B. Brown has served as our Director since January 2008. Mr. Bartoli previously served as President and Chief Executive Officer of Foster Wheeler USA Corporation and Executive Vice President of Foster Wheeler International Corporation for 13 years. As President and Chief Executive Officer of Foster Wheeler USA Corporation, he was responsible for the Process Plant Division, the Fire Heater Division, Foster Wheeler Constructors Corporation and Foster Wheeler Environmental Corporation. This followed a career in project and construction management at ABB Lummus Global (now CB&I/Lummus) and M.W. Kellogg Company (now KBR, Inc.) covering virtually all facets of the engineering, procurement, and construction of power generation, process, pharmaceutical and infrastructure facilities.
Since his retirement from Foster Wheeler, Mr. Bartoli has established and serves as President of C. Bartoli Consultants, LLC serving the utility and process industry in the development and execution of capital projects. He has also participated in the preparation of strategic plans, organizational restructuring and acquisition due diligence of engineering and construction firms. Mr. Bartoli has been affiliated with the Construction Industry Institute (CII), a research organization serving the engineering and construction industry, as a member of the Board of AdvisorsDirectors since May 2016. Mr. Brown currently serves as a member of the board of directors of EMCOR Group, Inc. and the non-executive chairman of the board of directors of Industrea Acquisition Corp. Mr. Brown served on the board of directors of Layne Christensen Company, a global water management, construction, and drilling company, from 2003 through June 2018, including as chairman beginning in 2005, and, from June 2014 to January 2015, he also served as its President and Chief Executive Committee.Officer. He served as a member of the board of directors of Hercules Offshore, Inc. from November 2015 to December 2016. Mr. BartoliBrown was the chairman of the board of directors of Pride International, Inc., a leading provider of offshore contract drilling and related services to oil and natural gas companies worldwide, from May 2005 to May 2011. Mr. Brown served as a director of Ensco plc from May 2011 to May 2014. For more than five years prior to May 2005, Mr. Brown was president of The Windsor Group, a management consulting firm of which he was a co-founder. From 2001 to 2006, Mr. Brown was a member of the board of directors of Mission Resources, Inc.; from 2001 to 2007, a director of NS Group, Inc.; and from 2006 to 2007, a director of Petrohawk Energy Corp. Mr. Brown is also a member of the National Association of Corporate Directors.
Director Qualifications. Mr. Bartoli holdsBrown has extensive financial and management experience. He is a Master of Science degree in Mechanical Engineering from Columbia UniversityChartered Public Accountant and a Bachelor of Science degree in Mechanical Engineering from Fairleigh Dickinson University.
Director Qualifications. Mr. Bartoli is an engineeringChartered Accountant and construction business executive with over 35 years of domestic and international experience in the process and utility industry. His experience covers all facets of the engineering and construction industry, including project management, project development, senior line management and executive P&L positions. Mr. Bartoli has also served on the boards of directors of a number of Foster Wheeler Corporation affiliated companies. Since his retirement from Foster Wheeler and the establishment of C. Bartoli Consultants, LLC, he has participated in many consulting assignments for the power generation, process and energy industries. He is also a consultant leader with the Gerson Lehrman Group in the energy and industrials sector and is an advisor to Anellotech, Inc., a company developing a cellulosic biomass conversion technology for the production of petrochemicals, and Sundrop Fuels, Inc., a gasification-based advanced biofuels company.
Terence J. Cryan has served as our Director since January 2008.in multiple roles for public companies. Mr. CryanBrown has over 20 yearsfinancial expertise, a thorough understanding of international businessfinancial statements, corporate finance and accounting and extensive experience as an investment banker based in both the United States and Europe.
Tablewith public companies, all of Contents
In 2001, Mr. Cryan co-founded Concert Energy Partners, an investment banking and private equity firm based in New York City, and continues to serve as Managing Director. He also served as President and Chief Executive Officer of Medical Acoustics LLC from 2007 through 2010. Prior to 2001, Mr. Cryan waswhich makes him a Senior Managing Director in the Investment Banking Division at Bear Stearns.
Earlier in his career, Mr. Cryan served as a Managing Director, Energy & Natural Resources Industry Group andvalued member of the Investment Banking Operating Committee at Paine Webber. Mr. Cryan joined Paine Webber following its acquisitionBoard of Kidder, Peabody in 1994.Directors.
Mr. Cryan
Robert B. Mills has been an adjunct professor at the Metropolitan College of New York Graduate School of Business and serves as a director of a number of international companies, including public companies such as Uranium Resources, Inc. (October 2006 to present) and Ocean Power Technologies Corporation (October 2012 to present). During the past five years, Mr. Cryan also served as a director of The Providence Service Corporation (May 2009 to May 2011) and Gryphon Gold Corporation (August 2009 to December 2012). Mr. Cryan is also a frequent speaker at finance and energy industry gatherings. Mr. Cryan is also a member of the National AssociationBoard of Corporate Directors.
Mr. Cryan holds a Master of Science in Economics from the London School of Economics and a Bachelor of Arts degree from Tufts University.
Director Qualifications. Mr. Cryan possesses extensive expertise in financings, mergers and acquisitions. He alsoDirectors since October 2015. Since 2016, he has a broad energy industry background and executive-level experience. Mr. Cryan has over 20 years of experience in international business as an investment banker in the United States and Europe. As a co-founder of Concert Energy Partners and as former Managing Director, Energy & Natural Resources Industry Group at Paine Webber, Mr. Cryan has in depth knowledge of the energy industry. In addition, Mr. Cryan brings extensive board-level experience, serving on the boards of a number of international companies.
Michael E. Salvati has served as our Director since August 2011. Since December 2000, Mr. Salvati has been President at Oakridge Consulting, Inc., which provides interim management, management consulting and corporate advisory services to companies ranging in size from start-ups to multinational corporations. From February 2004 to May 2004, Mr. Salvati served as Chief Financial Officer of AMI Semiconductor, Inc. From September 1998 to February 2000, Mr. Salvati was Executive Vice President—Chief Operating Officer of National Financial Partners, Corp. From June 1996 to June 1998, Mr. Salvati was Chief Financial Officer of Culligan Water Technologies, Inc., where he oversaw the completion of nearly 50 acquisitions over a period of 18 months. Mr. Salvati was a partner at KPMG Peat Marwick LLP from 1990 to 1996.
Mr. Salvati is a Certified Public Accountant and member of the American Institute of Certified Public Accountants, Illinois CPA Society. He currently serves as a member of the board of directors of Syncora Holdings Ltd., a publicly traded financial guaranty insurance company, and Chair of the Audit Committee andas a member of Syncora’s audit committee since 2017. From 2010 to April 2015, Mr. Mills served as the Compensation CommitteeChief Operating Officer of Apollo Commercial Real Estate Finance Inc., positions he has held since September 2009. Mr. Salvati's previous board memberships include Things Remembered, Inc., Lazydays, Inc., NCH Nu World Marketing,Assured Guaranty, Ltd., Coho Energy, Inc.another publicly traded financial guaranty insurance company. Prior to his role as Chief Operating Officer, Mr. Mills served as Chief Financial Officer of Assured Guaranty, Ltd. from 2004 to 2010. In connection with his role as Chief Operating Officer of Assured Guaranty, Ltd., Prime Succession, Inc.,Mr. Mills chaired the management committee, which established corporate policy and Castle Holdco 4, Ltd. Mr. Salvati is alsothe strategic and tactical direction for the business, and served as a member of the National Associationboard of Corporate Directors.
directors of each of Assured Guaranty, Ltd.’s five separately regulated insurance companies. Prior to his time at Assured Guaranty, Mr. Salvati receivedMills served as Chief Operating Officer and Chief Financial Officer of the Americas Region of UBS AG from 1994 to 2004. From 1971 to 1994, Mr. Mills worked for KPMG and was elected to the partnership in 1981. He is a Bachelor of Science degree in MicrobiologyCertified Public Accountant and a Master of Science degree in Accounting from the University of Illinois at Champaign-Urbana.
Director Qualifications. Mr. Salvati has significant experience in the area of corporate advisory services, with an emphasis on strategic planning, capital structure and mergers and acquisitions. In his prior executive positions he was directly responsible for managing acquisition-led growth within the relevant companies which are skills that we believe bring value to the Company. Mr. Salvati's service on multiple public and private company boards over the last twelve years provides us with valuable insights into many of the issues that we face, and useful perspectives in relation to compensation and
corporate governance matters. Mr. Salvati, as a former auditor, has significant experience and expertise in finance, controls, accounting and audit matters.Certified Global Management Accountant.
Frank E. Williams, JrDirector Qualifications. Mr. Mills is a Certified Public Accountant and has served as our Director since October 2009. Since 1969,Chief Financial Officer and Chief Operating Officer, most recently for Assured Guaranty, Ltd., a public company. Mr. WilliamsMills has extensive financial expertise and a thorough understanding of financial statements, corporate finance and accounting and provides financial and accounting expertise to the Board of Directors.
Nelson Obus has served as Chairman and principal ownera member of Williams Enterprises of Georgia, Inc., a holding company controlling six subsidiaries active in various facets of the steel industry. Since 1995, he has also served as Chairman, Chief Executive Officer, and a 50 percent owner of Bosworth Steel Erectors, Inc. of Dallas, Texas, an erector of steel products in the Southwestern United States and as Chairman and a major shareholder of Willfab, Inc., a structural steel fabricator located in Cherokee County, Georgia. Mr. Williams is the Managing Partner and principal owner of Industrial Alloy Fabricators, LLC of Richmond, Virginia, a fabricator of alloy plate products for the pulp and chemical industries.
Mr. Williams also previously served on the Board of Directors of Diamondhead Casino Corporation, a public company.
since June 2016. Mr. WilliamsObus has served as Chairmanpresident of Wynnefield Capital since November 1992 and Chief Executive Officeras the managing member of the Gulf States Steel Reorganization Group. HeWCM since January 1997. WCM manages two partnerships and Wynnefield Capital manages one partnership, all three of which invest in small-cap value U.S. public equities. Mr. Obus has been appointed by bankruptcy courtsnominated to serve on the board of directors of Landec Corporation, a publicly traded company, which stockholders will vote on at the annual meeting of stockholders to be held on October 12, 2018. Mr. Obus served on the board of Layne Christensen Company from 2004 through June 2018. Mr. Obus has served on the board of Jason Industries Inc. (JASN), a diversified industrial company, since June 2018. From 2001 to 2006, Mr. Obus served as an official representative serving in a pro bono capacity on behalf of investors and debt holders of public companies in bankruptcy and he represented holders of our equity securities during our bankruptcy in 2007 and 2008. Mr. Williams is also a member of the National Associationboard of Corporate Directors.
directors of Sylvan Inc., a Nasdaq-listed company specializing in producing and distributing mushroom spawn. Mr. Williams holdsObus served as a Bachelor of Civil Engineering degree from the Georgia Institute of Technology.
Director Qualifications. Mr. Williams has over 53 years of experience in the steel industry. His in-depth experience and knowledge covers all facetsmember of the steel industry, including steel fabrication and erection and fabricationboard of alloy plate products for the pulp and chemicals industries. Mr. Williams is the principal ownerdirectors of Williams Enterprises of Georgia,Gilman Ciocia, Inc., a holding company controlling six subsidiaries active in various facetsthat provides income tax preparation, accounting and financial planning services from September 2007 to January 2012. From January 2012 to December 31, 2015, Mr. Obus also served as a member of the steel industry. In addition toboard of directors of Breeze-Eastern Corporation, a company that designs, develops, manufactures, sells and services sophisticated mission equipment for helicopters.
Director Qualifications. Mr. Obus’ pertinent experience, qualifications, attributes and skills include: financial literacy and expertise, capital markets expertise and managerial experience gained through his extensiveleadership roles and ownership interest in related investment management companies, WCM and Wynnefield Capital, and the knowledge and experience he has from attained from service on other public company boards.
Tracy D. Pagliara has served as a member of our industry, Mr. Williams brings significant public company experience.
Each of Messrs. Ramírez, Macaluso, Bartoli, Cryan, Williams and Salvati was recommended for nomination by the Nominating and Corporate Governance Committee, and was nominated for election by the full Board of Directors. Messrs. Macaluso, Bartoli and Cryan were appointed as our directors by the Bankruptcy Court upon our emergence from bankruptcy in January 2008. The Board appointedDirectors since July 2017. Mr. Williams as a director in October 2009. Mr. Salvati was recommended for nomination by a non-management director and was appointed as a director in August 2011. The Board appointed Mr. Ramírez as a director in July 2012 simultaneously with his employmentPagliara has served as our President and Chief Executive Officer. AllOfficer since April 2018, having previously served as Co-President and Co-CEO, along with Craig E. Holmes, since July 2017. Prior to that, he served as our Chief Administrative Officer, General Counsel and Secretary since January 2014, and also as Senior Vice President since November 2015. He previously served as our General Counsel, Corporate Secretary and Vice President of Business Development from April 2010 through December 2013. Prior to joining the Company in April 2010, Mr. Pagliara served as the Chief Legal Officer of Gardner Denver, Inc., a leading global manufacturer of highly engineered compressors, blowers, pumps and other fluid transfer equipment, from August 2000 through August 2008. He also had responsibility for other roles during his tenure with Gardner Denver, including Vice President of Administration, Chief Compliance Officer and Corporate Secretary. Prior to joining Gardner Denver, Mr. Pagliara held positions of increasing responsibility in the legal departments of Verizon Communications/GTE Corporation from August 1996 to August 2000 and Kellwood Company from May 1993 to August 1996, ultimately serving in the role of Assistant General Counsel for each company. Mr. Pagliara currently serves on the board of directors and audit, compensation and nominating and corporate governance committees of Westwater Resources, Inc. (formerly Uranium Resources, Inc.), where he has served since July 2017. He is a member of the Missouri and Illinois State Bars and a Certified Public Accountant. In addition, in accordance with customary practice, Mr. Pagliara and other officers of the Company have served as officers of the Company’s various subsidiaries, although not acting in an executive role for the relevant subsidiary. As previously disclosed, such subsidiaries included Koontz-Wagner Custom Controls Holdings LLC, which filed a voluntary petition for relief under Chapter 7 of the U.S. Bankruptcy Code in July 2018 and ceased operations at such time.
Director Qualifications. Mr. Pagliara has a deep understanding of the Company and its business, having been with the Company since 2010. He has worked in industry for nearly 20 years and has extensive experience advising public companies. His legal and accounting background further add to his value as a member of the Board of Directors.
Selection of Certain Directors
Each of our current directors, other than Mr. Macaluso, was appointed to the Board after the 2015 Annual Meeting. Mr. Obus and Mr. Brown were re-electedboth appointed to the Board pursuant to the Election and Nomination Agreement.
Required Vote
Stockholders may cast their vote “for” or “withhold” authority to vote for new one year terms at our Annual Meetingeach of Stockholders held on May 8, 2013.
Vote Required
the nominees for director. The directors will be elected by a plurality of the votes cast by holders of the Company's Common Stock. The sixStock, meaning that the nominees for director receiving the highest number of affirmative votesshares voted “for” their election will be elected. Abstentions“Withhold” votes and broker non-votes are not considered votes cast and will not be counted as having been voted for purposes ofhave no effect on the election of directors. Stockholders may not cumulate votes in the election of directors.
Recommendation of the Board of Directors
The Board recommends a vote THE BOARD RECOMMENDS A VOTE FOR the election of each of the nominees.ALL OF THE DIRECTOR NOMINEES.
THE BOARD, ITS COMMITTEES AND ITS COMPENSATION
Our Board of Directors is responsible for establishing broad corporate policies and for overseeing the overall management of the Company. In addition to considering various matters which require its approval, our Board of Directors provides advice and counsel to, and ultimately monitors the performance of, our senior management.
Board Leadership Structure and Committee Composition
The Board of Directors takes a flexible approach to the issue of whetherwill exercise its discretion in combining or separating the offices of the Chairman of the Board and the Chief Executive Officer, ("CEO") should be separated or combined. This approach allowsbased on the Board to regularly evaluate whether it is inBoard’s judgment of the best interests of the Company for the CEO or another directorand its stockholders from time to hold the position of Chairman. Currently, thetime. The Company has separated the position of Chairman of the Board and Chief Executive Officer since the Company emergedits emergence from bankruptcy in January 2008. We believe that this is the appropriate leadership structure, as it permits our Chief Executive Officer Mr. Ramírez, to focus his attention on running the businessmanaging day-to-day operations and developing corporate strategy, while our Chairman of the Board, Mr. Macaluso, provides independent leadership to the Board of Directors in performing its advisory, governance and oversight functions.
The Board of Directors has three (3) standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee operates under a written charter, the adequacy of which each respective committee regularly reviews and reassesses. A copy of each charter is available under the heading “Corporate Governance” of the Investor Relations section of our website at http://www.wisgrp.com. Our Board of Directors may establish additional committees from time to time in accordance with our bylaws.
The current
As of December 31, 2017, the membership of the standing committees iswas as follows:
Board Member | Audit | Compensation |
| |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Charles Macaluso | Chair | |||||||||||
Carl Bartoli | X | |||||||||||
David A. B. Brown | X | X | ||||||||||
Linda Goodspeed | X | Chair | ||||||||||
Craig E. Holmes | ||||||||||||
David Keller | ||||||||||||
Robert B. Mills | Chair | X | ||||||||||
Nelson Obus | X | |||||||||||
Tracy D. Pagliara | ||||||||||||
Michael E. Rescoe | X | |||||||||||
Michael E. Salvati | X | |||||||||||
Gary J. Taylor | X |
As of the Record Date, the membership of the standing committees was as follows:
Board Member | Audit | Compensation | Nominating & Corporate | |||
Charles Macaluso | X | X | Chair | |||
David A. B. Brown | X | Chair | X | |||
Robert B. Mills | Chair | X | X | |||
Nelson Obus | ||||||
Tracy D. Pagliara |
Following the Annual Meeting, the Board of Directors intends to appoint Mr. Obus to the Nominating and Corporate Governance Committee and the Compensation Committee.
Audit Committee. The Audit Committee assists the Board of Directors in overseeing our accounting and financial reporting processes, and the audits of our consolidated financial statements and the review and evaluation of our internal control over financial reporting,functions, including monitoring the integrity of our financial statements and the independence and performance of our independent registered public accounting firm. The Audit Committee appoints and oversees an independent registered public accounting firm to audit our financial statements and review our internal control over financial reporting. In addition, the Audit Committee approves the scope of the annual audits and fees to be paid to our independent registered public accounting firm. The Audit Committee held four (4)six meetings during 2013.2017.
The Audit Committee regularly reviews and reassesses the adequacy of its Audit Committee Charter. A copy of the current Audit Committee Charter is available under the heading "Corporate Governance" of the Investor Relations section of our website at http://www.globalpower.com/.
Our Board of Directors has determined that:
Table· As of Contents
•- the Record Date and as of December 31, 2017, each member of the Audit Committee:
·
•is independent as defined in applicable rules of the NASDAQ Stock Market ("Nasdaq"),•- meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
·
•- has not participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three
years,years; and·
•- is able to read and understand fundamental financial statements, including a
company'scompany’s balance sheet, income statement and cash flow statement.
Compensation Committee. The Compensation Committee reviews the performance of our executive officers, establishes compensation programs for the executive officers (including salary and shortshort- and long-term incentive programs) and reviews the overall compensation programs of the Company. The Compensation Committee also administers our stock incentive plans and awards. During 2013,2017, the Compensation Committee held seven (7)nine meetings.
The Compensation Committee regularly reviewsprincipal executive officer and reassesses the adequacy of its Compensation Committee Charter. A copy of the current Compensation Committee Charter is available under the heading "Corporate Governance" of the Investor Relations section of our website at http://www.globalpower.com/.
The CEO, Chief Financial Officer, General Counsel and Chief Human Resources Officerprincipal financial officer of the Company generally attend portions of Compensation Committee meetings and provide input to the Compensation Committee with respect to issues affecting compensation, key responsibilities, corporate objectives and equity plan management and compliance. As discussed in the "Compensation Discussion and Analysis" section beginning on page 18 below, the CEOThe principal executive officer makes recommendations to the Compensation Committee regarding the compensation of our executives and participates in discussions of such compensation. From time to time, other members of management and Company personnel may attend Compensation Committee meetings to provide presentations andor participate where subject matters involving their expertise are discussed. No member of management is present during discussions of his or her performance or compensation, and no member of management (including the CEO)principal executive officer) is present during deliberations and voting with respect to the CEO'sprincipal executive officer’s performance or compensation.
The Compensation Committee may, in its sole discretion, select, retain and obtain, at ourthe Company’s expense, the advice of independent compensation consultants. The Compensation Committee has the authority to set the compensation and oversee the work of the compensation consultant. In 2013,2015, the Compensation Committee appointed Meridian Compensation Partners ("Meridian"(“Meridian”) to provide it with advice in connection with our 20132015 compensation program, as further described below under "Compensation“Executive Compensation—Compensation Discussion and Analysis—Section 3: Compensation Consultant and Peer Group."Group” below. The Compensation Committee has re-appointed Meridian, and additionally appointed Longnecker & Associates (“Longnecker”), to serve as its independent consultantconsultants in connection with our 20142017 compensation program. Meridian reportsand Longnecker report directly to the Committee and servesserve at the sole discretion of the Compensation Committee. It doesThey do not perform any other services for the Company. The Compensation Committee has assessed the independence of Meridian and Longnecker pursuant to the SEC rules and concluded that no conflict of interest exists that would prevent the consulting firm from providing independent advice to the Compensation Committee.
The Compensation Committee also may, in its sole discretion, retain and obtain, at ourthe Company’s expense, the advice and assistance of outside counsel and such other advisors as it deems necessary.
The Compensation Committee Charter provides that the Compensation Committee may delegate its authority to one or more subcommittees. As of the date of this proxy statement,Record Date, the Compensation Committee has not delegated such authority.
Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee of the Board of Directors (the "Nominating and Corporate Governance Committee") oversees the nomination of directors for service on the Board of Directors and its committees, reviews and considers developments in corporate governance practices, and recommends to the Board of Directors policies and procedures with respect to corporate governance. During 2013,2017, the Nominating and Corporate Governance Committee held three (3)two meetings.
The Nominating and Corporate Governance Committee regularly reviews and reassesses the adequacy of its Nominating and Corporate Governance Committee Charter. A copy of the current Nominating and Corporate Governance Committee Charter is available under the heading "Corporate Governance" of the Investor Relations section of our website at http://www.globalpower.com/.
Director Independence
Our Board
Because we are quoted on the OTC and not listed on a national securities exchange, we are not subject to certain corporate governance requirements that apply to exchange-listed companies, including any independence requirements. However, for purposes of Directors has reviewed the criteria for determiningevaluating the independence of our directors, under Nasdaqour Board uses the rules of the SEC and Securities and Exchange Commission ("SEC") rules. It has affirmativelythe New York Stock Exchange. Of the five directors currently serving on our Board, the Board determined that each of Messrs. Macaluso, Bartoli, Cryan, Davis, Salvati
Brown and Williams isMills and Obus was independent under such criteria. Of the former directors who served on the Board during 2017, the Board determined that each of Carl Bartoli, Linda A. Goodspeed, Michael E. Rescoe, Michael E. Salvati and Gary J. Taylor was independent under the rules of the SEC and the New York Stock Exchange. Each such former director resigned from the Board in April 2018, prior to the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 Form 10-K”). Accordingly, during 20132017 and continuing throughas of the date of this proxy statement,Record Date, our Board of Directors has beenwas comprised of a substantial majority of directors who qualify as independent directors under the rules adopted by the SEC and Nasdaq. As previously disclosed,the New York Stock Exchange.
In March 2018, the Board determined that Mr. Davis has decided notObus was no longer considered an independent director, due to stand for re-electionhis relationship with Wynnefield Capital which, at the Annual Meeting, and therefore, effective asrequest of the dateCompany’s lenders, provided funding under one of the Annual Meeting, Mr. Davis will no longer be a memberCompany’s debt agreements. Therefore, prior to the reconstitution of our Board committees in April 2018, our Nominating and Corporate Governance Committee had one non-independent director serving on it; all recommendations regarding director independence and director nominees contained in this proxy statement were made by the reconstituted, fully-independent Nominating and Corporate Governance Committee. After the Company refinanced and replaced its senior secured credit agreement, entered into in June 2017, as discussed in “Certain Relationships and Related Transactions—Approval of Related Party Transactions” below, the Board of Directors or any committee thereof.determined that Mr. Obus again satisfied the relevant independence criteria.
In considering the independence of our directors, the Board of Directors specifically addressed those matters disclosed in "Certain“Certain Relationships and Related Transactions," beginning on page 48 below. ExceptTransactions.” Other than with respect to Mr. Obus, as discloseddiscussed in that section,“Certain Relationships and Related Transactions,” there were no specific transactions, relationships or arrangements that were considered by the Board of Directors in determining the independence of any of our directors.
Board'sBoard’s Role in Risk Oversight
One of the principal functions of our Board of Directors is to provide oversight concerning the assessment and management of risk related to our business. The Board of Directors as a whole has ultimate responsibility foris involved in risk oversight through direct decision-making authority with respect to fundamental financial and business strategies and major corporate activities, including material transactions and financings, as well as through its oversight of management and the standingcommittees of the Board of Directors. Management is responsible for identifying the material risks facing the Company, implementing appropriate risk management strategies and ensuring that information with respect to material risks is shared with the Board or the appropriate Board committee. In connection with this responsibility, members of management provide regular reports to the Board of Directors regarding business operations and strategic planning, financial planning and budgeting and regulatory matters, including any material risk to the Company related to such matters.
The Board has delegated oversight for specific areas of risk exposure to committees of the Board of Directors assist in fulfilling this responsibility. In particular, theas follows:
1. The Audit Committee overseesis responsible for discussing the Company’s overall risk assessment and risk management inpolicies with management, our internal auditors and our independent registered public accounting firm, as well as the areas ofCompany’s plans to monitor and control any financial risk exposure. The Audit Committee is also responsible for primary risk oversight related to our internal control over financial reporting, disclosure controls and procedures, and legal and regulatory compliance. TheIn addition, the Audit Committee also reviews with management our policies and practices with respectall related party transactions, including the risks related to risk assessment and management, and our exposure to material financial risk and management's efforts to monitor and control such exposure.those transactions impacting the Company.
2. The Compensation Committee oversees our compensation programs and reviews the conduct incentedincentivized by those programs, including the impact on risk-taking by our executive officers and employees, as further described under "Compensation“Executive Compensation—Compensation Discussion and Analysis—Section 5: Additional Compensation Matters—Risk Assessment" beginning on page 29Assessment” below.
3. The Nominating and Corporate Governance Committee oversees the organization, membership and structure of our Board of Directors and our corporate governance practices. The committee members regularly report to the full Board of Directors on material developments in their areas of oversight.
At each regular meeting of our Board of Directors, the chairperson of each committee reports to the full Board regarding the matters reported and discussed at any committee meetings, including any matters related to risk assessment or risk management. Upon the request of the committees, our principal executive officer and principal financial officer attend meetings of these committees when they are not in executive session, and often report on matters that may not be otherwise addressed at these meetings. In addition, our directors are encouraged to communicate directly with members of management regarding matters of interest, including matters related to risk, at times when meetings are not being held. Our Board of Directors believes that the processes it has established for overseeing risk would be effective under a variety of leadership
frameworks and therefore do not materially affect its choice of leadership structure as described under “Board Leadership Structure and Committee Composition” above.
Board Nomination Process
The Nominating and Corporate Governance Committee believes that members of the Company'sCompany’s Board must possess certain basic personal and professional qualities in order to properly discharge their fiduciary duties to stockholders, provide effective oversight of the management of the Company and monitor the Company'sCompany’s adherence to principles of sound corporate governance. The Nominating and Corporate Governance Committee has identified certain threshold criteria for Board nominees.
nominees, which have been set forth in our Director Nominations Policy. However, the Nominating and Corporate Governance Committee will also consider the contributions that a candidate can be expected to make to the collective functioning of the Board based upon the totality of the candidate'scandidate’s credentials, experience and expertise, the composition of the Board at the time and other relevant circumstances.
•·Integrity.All candidates must be individuals of personal integrity and ethical character, and who value and appreciate these qualities in others.
·
•- Absence of Conflicts of Interest.Candidates should not have any interests that would materially impair his or her ability
to:to (i) exercise independent judgment; or (ii) otherwise discharge the fiduciary duties owed as a director to the Company and its stockholders.·
•- Fair and Equal Representation.Candidates must be able to represent fairly and equally all stockholders of the Company without favoring or advancing any particular stockholder or other constituency of the Company.
·
•- Oversight.Candidates are expected to have sound judgment, borne of management or policy-making experience (which may be as an advisor or consultant), that demonstrates an ability to function effectively in an oversight role.
·
•- Expertise.Each candidate should possess professional and personal experiences and expertise relevant to the
Company'sCompany’s purpose, mission, and strategy.·
•- Business Understanding.Candidates must have a general appreciation regarding major issues facing public companies of a size and operational scope similar to the Company. These include: contemporary governance concerns; regulatory obligations of a public issuer; strategic business planning; competition in a global economy; and basic concepts of corporate finance.
·
•- Available Time.Candidates must have, and be prepared to devote, adequate time to the Board and its committees. It is expected that each candidate will be available to participate fully in Board activities including attendance at, and active participation in, meetings of the Board and any committees on which the candidate will serve, as well as the
Company's Annual MeetingCompany’s annual meetings ofStockholders.stockholders. Candidates shall be responsible for the management of other business and professional commitments, including service on the boards of other companies, so as not to interfere with or materially limit his or her ability to meet such Board and committee obligations.·
•- Exceptions.Under exceptional and limited circumstances, the Nominating and Corporate Governance Committee may approve the candidacy of a nominee who does not satisfy all of these requirements if it believes the service of such nominee is in the best interests of the Company and its stockholders.
·
•- Corporate Governance Guidelines.Each candidate shall comply with the requirements set forth in the Corporate Governance Guidelines of the Company.
·
•- Additional Qualifications.In approving candidates for election as director, the Committee will also assure that:
·
•- at least a majority of the directors serving at any time on the Board are independent, as defined under the rules of
Nasdaq;the New York Stock Exchange;·
•- at least three of the independent directors satisfy the financial literacy requirements required for service on the audit committee under the rules of
Nasdaq;the New York Stock Exchange;· At least one of the independent directors has accounting or related financial management expertise under the rules of the New York Stock Exchange (which experience may be presumed if the director qualifies as an audit committee financial expert under the rules of the SEC);
· •- at least one of the independent directors qualifies as an audit committee financial expert under the rules of the SEC;
•- at least some of the independent directors have experience as senior executives of a public or substantial private company; and
·
•- at least some of the independent directors have general familiarity with an industry in which the Company conducts a substantial portion of its business or in related industries.
The Nominating and Corporate Governance Committee also will consider properly submitted stockholder candidates for membership on the Board of Directors. Any stockholder of the Company wishing to submit a candidate for the Nominating and Corporate Governance Committee'sCommittee’s consideration must provide a written notice recommending the candidate to theWilliams Industrial Services Group Inc., 100 Crescent Centre Parkway, Suite 1240, Tucker, Georgia 30084, Attention: Corporate Secretary, of Global Power Equipment Group Inc. at 400 East Las Colinas Boulevard, Suite 400, Irving, Texas 75039, by email to corporatesecretary@globalpower.comcorporatesecretary@wisgrp.com (with a confirmation copy sent by mail) or by faxfacsimile to 1-214-574-2712(877) 731-1697 (with a confirmation copy sent by mail).
The written notice must be timely submitted and include required information in accordance with the Company'sCompany’s bylaws (see "Stockholder“Stockholder Proposals For 20152019 Annual Meeting"Meeting” below for more information). Candidates recommended by our stockholders will be evaluated against the same criteria and under the same policies and procedures applicable to the evaluation of candidates proposed by directors or management.
Board Meetings
The Board held eight (8)12 meetings during 2013. With the exception2017. Each of our incumbent directors attended at least 75% of the absence of one director at one meeting of the Board and one meeting of the Compensation Committee, each director serving on the Board in 2013 attended 100% of theaggregate meetings of the Board and the committees of the Board on which he served.served during fiscal year 2017. Each director is expected to devote the time necessary to appropriately discharge his responsibilities and to rigorously prepare for and attend and participate in all Board meetings and meetings of Board committees on which he serves. In addition, the independent directors meet regularly in executive session without the presence of management.
Annual Meetings of Stockholders
Pursuant to our corporate governance guidelinesCorporate Governance Guidelines and director nominations policy,Director Nominations Policy, directors are expected to attend all annual meetings of stockholders, either in person or telephonically. Due to the time required to complete the restatement of our financial results, we did not hold an annual meeting of stockholders in 2016 or 2017. Mr. Macaluso, the only current Board member serving as a director of the Company during the 2015 Annual Meeting, attended the 2015 Annual Meeting. The Board anticipates that each director will attend the Annual Meeting of Stockholders. All of our directors attended the Annual Meeting of Stockholders held in May 2013 in person, with the exception of Mr. Davis.Meeting.
Code of Business Conduct and Ethics and Corporate Governance Guidelines
Our
The Board of Directors has adopted a Code of Business Conduct and Ethics, which outlines the principles of legal and ethical business conduct under which the Company doeswe do business. The Code of Business Conduct and Ethics is applicable to all of our directors, officers and employees. The Code of Business Conduct and Ethics is available under the heading "Corporate Governance"“Corporate Governance” of the Investor Relations section of our website at http://www.globalpower.com/.www.wisgrp.com. Upon written request to our Corporate Secretary the Companysent to our principal executive offices, we will provide a copy of the Code of Business Conduct and Ethics free of charge. Any substantive amendment of the Code of Business Conduct and Ethics, and any waiver of the Code of Business Conduct and Ethics for executive officers or directors, will be made only after approval by ourthe Board of Directors or a committee of the Board, and will be disclosed on our website. In addition, any such waiver will be disclosed within four days on a Form 8-K filed with the SEC if then required by applicable rules and regulations.
In addition, the Board has adopted Corporate Governance Guidelines. The Corporate Governance Guidelines address issues such as the criteria and requirements for the selection and retention of members of the Board, the procedures and practices governing the operation and compensation of the Board and the principles under which management shall direct and operate the business of the Company and its subsidiaries. The Corporate Governance Guidelines are available under the heading “Corporate Governance” of the Investor Relations section of our website at http://www.wisgrp.com. Upon written request to our Corporate Secretary sent to our principal executive offices, we will provide a copy of the Corporate Governance Guidelines free of charge. Any substantive amendment of the Corporate Governance Guidelines will be made only after approval by the Board or a committee of the Board, and will be disclosed on our website.
Communication with the Board of Directors
Interested parties, including stockholders, may contact the Board of Directors, including the non-management directors, or any committee of the Board of Directors by sending correspondence to the attention ofWilliams Industrial Services Group Inc., 100 Crescent Centre Parkway, Suite 1240, Tucker, Georgia 30084, Attention: Corporate Secretary c/o Global Power Equipment Group Inc., 400 East Las Colinas Boulevard, Suite 400, Irving, Texas 75039 or
corporatesecretary@globalpower.com. corporatesecretary@wisgrp.com. Any mail received by the Corporate Secretary will then be forwarded to the appropriate members of the Board of Directors or the appropriate committee for further action, if necessary. The non-management directors have requested that the Corporate Secretary not forward to them advertisements, solicitations for periodicals or other subscriptions, and other similar communications.
Director Compensation
The
Director compensation of our directors is determined by the Nominating and Corporate Governance Committee, subject to approval by the entire Board of Directors. The objectives for our non-employee director compensation program are to attract highly-qualifiedhighly qualified individuals to serve on the Board of Directors and align directors'directors’ interests with the interests of our stockholders. The Nominating and Corporate Governance Committee reviews the program periodicallyannually to ensureconfirm that it continues to meet these objectives.
To determine whether the director compensation program is competitive, the Nominating and Corporate Governance Committee considers general market information on program design.design and the advice of the Compensation Committee’s independent compensation consultant. In recommending director compensation levels, the Nominating and Corporate Governance Committee also considers the significant amount of time that directors expend in fulfilling their duties to the Company, as well as the skill level required by the Company of members of the Board of Directors. The Nominating and Corporate Governance Committee recommends any change it considers appropriate to the full Board of Directors for its review and approval and includes the relevant information and data for the Board of Directors to use in its considerations.
Directors who are employed by our Company or any of our subsidiaries do not receive compensation for serving as directors. DirectorsAs of December 31, 2017, directors who are not employees of our Company or any of our subsidiaries arewere entitled to receive an annual retainer as follows:
•$47,500· $60,000 for each non-employee director;·
•$10,000 for membership in each committee;•$50,000$50,000 for the Board of Directors Chairperson;·
•$20,000$20,000 for the Audit Committee Chairperson;·
•$13,750$13,750 for the Compensation Committee Chairperson; and·
•$13,750$10,000 for the Nominating and Corporate Governance Committee Chairperson.
In addition, directors are entitled to receive:
•a meeting fee of $1,500 forWe offer each
Board of Directors meeting attended in person;•a meeting fee of $1,000 for each Board of Directors meeting attended telephonically;•a meeting fee of $1,000 for each committee meeting attended in person or telephonically; and•a meeting fee of $1,500 for each Board of Directors or committee meeting attended in person outside of normal Board and committee meetings.
We provide directors withdirector an annual allowance for continuing education, the amount of which is set by the Board of Directors from time to time. For 20132017, the amount was $10,000.$10,000; however, all of the directors elected to take advantage of free educational resources rather than using the allowance. We also reimburse non-employee directors for out-of-pocketout of pocket expenses incurred in connection with attending Board and committee meetings.
On January 22, 2013, each of the non-employee directors received 4,927 restricted shares of our Common Stock. Of the 4,927 restricted shares, 1,232 shares vested on January 22, 2014, 1,232 shares will vest on each of January 22, 2015 and 2016 and 1,231 shares will vest on January 22, 2017, subject to continued service as a director through the vesting dates.
The Board recognizes that ownership by the non-employee directors inof the Company'sCompany’s Common Stock will align their interests with the interests of the Company'sour stockholders. As a result, each non-employee director is required to own the lesser of (i) shares with a value of three times his or her annual cash retainer or (ii) 8,000 shares. The target date for the existing directors to meet these stock ownership guidelines is January 1, 2015 and the target date for any new directors is five years from the date of his or her appointment. For purposes of these guidelines, the director will be deemed to "own"“own” the Company'sCompany’s shares that are beneficially owned by such person, including equity awards that will payoutpay out within 60 days of the applicable measuring date. As of March 6, 2014,the Record Date, each non-employee director meetswho served in 2017 and was required to meet the ownership requirements met or exceedsexceeded the minimum ownership requirement.
20132017 DIRECTOR COMPENSATION
The
Except as noted below, the following table provides information on the compensation awarded to, earned by or paid to each person who served as a non-employee director during 2013.2017.
Name |
| Fees Earned or Paid in Cash |
| Stock Awards |
| Total |
|
Carl Bartoli(2) |
| 87,932 |
| — |
| 87,932 |
|
David A. B. Brown |
| 70,500 |
| — |
| 70,500 |
|
Linda Goodspeed(2) |
| 81,750 |
| — |
| 81,750 |
|
David L. Keller(2) |
| 62,000 |
| — |
| 62,000 |
|
Charles Macaluso |
| 144,869 |
| — |
| 144,869 |
|
Robert B. Mills |
| 86,000 |
| — |
| 86,000 |
|
Nelson Obus |
| 66,000 |
| — |
| 66,000 |
|
Michael E. Rescoe(2) |
| 73,605 |
| — |
| 73,605 |
|
Michael E. Salvati(2) |
| 87,432 |
| — |
| 87,432 |
|
Gary J. Taylor(2) |
| 68,000 |
| — |
| 68,000 |
|
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Charles Macaluso | 143,000 | 80,015 | 22,892 | 245,907 | |||||||||
Carl Bartoli | 90,500 | 80,015 | — | 170,515 | |||||||||
Terence J. Cryan | 101,500 | 80,015 | 8,279 | 189,794 | |||||||||
Eugene I. Davis | 72,500 | 80,015 | 21,986 | 174,501 | |||||||||
Michael E. Salvati | 125,500 | 80,015 | — | 205,515 | |||||||||
Frank E. Williams, Jr. | 89,369 | 80,015 | — | 169,384 | |||||||||
(1)
- The
amounts in this column represent the aggregatenon-employee directors did not receive a grantdate fair value of sharesof restrictedstockshares in 2016 or 2017. However, effective on April 16, 2018, the date of filing the 2017 Form 10-K, the Company granted awards to such directors as compensation for their service as a director in 2016 and 2017. Specifically, the Board authorized a grant of 18,182 restricted shares for service in 2016 (pro-rated for a partial year of service, if any) and 18,182 restricted shares for service in 2017 to continuing non-employee directors. The restricted shares for 2016 and 2017 are subject to our normal four-year vesting schedule, determined as if the grant had occurred in the ordinary course in January of the respective year of service, with accelerated vesting upon a change in control. In lieu of a restricted share grant, non-employee directors who resigned prior to the Annual Meeting received $20,000 for service in2013 computed2016 (pro-rated for a partial year of service, if any) and $20,000 for service inaccordance with Financial Accounting Standards2017, which was offset by accelerated vesting of outstanding restricted shares, if any.(2) Voluntarily resigned from the Board
Accounting Standards Codification Topic 718 ("FASB ASC Topic 718"). For a discussion of the assumptions we madeinvaluing the stock awards, see "Note 2—Summary of Significant Accounting Policies—Stock-Based Compensation Expense" in the notes to our consolidated financial statements contained in our Annual ReportApril 2018: Ms. Goodspeed and Messrs. Keller, Rescoe and Salvati onForm 10-K for the year ended December 31, 2013.April 13, 2018; Mr. Taylor on April 14, 2018; and Mr. Bartoli on April 15, 2018.The total number of unvested restricted shares held by each non-employee director serving as of December 31,
2013 is2017 was as follows:
Name | Unvested Restricted | |||||
|---|---|---|---|---|---|---|
| ||||||
Carl Bartoli | 4,083 | |||||
| — | |||||
| — | |||||
David L. Keller | — | |||||
Charles Macaluso | 4,083 | |||||
Robert B. Mills | — | |||||
Nelson Obus | — | |||||
Michael E. Rescoe | 3,030 | |||||
Michael E. Salvati | 4,083 | |||||
| — | |||||
(2)The amounts in this column represent the reimbursement of fees related to filing amended tax returns to reflect corrected Form 1099s.
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Proposal to Ratify Appointment of Moss Adams
Effective March 24, 2016, after recommendation by the Company’s management and approval by the Audit Committee hasand the full Board of Directors, the Company appointed BDO USA,Hein & Associates LLP (“Hein”) as its new independent registered public accounting firm to re-audit the Company’s financial statements for the fiscal years ended December 31, 2013 and 2014 and to audit the Company’s subsequent financial statements, beginning for the year ended December 31, 2015 and continuing through the periods covered by the Company’s 2017 Form 10-K. Effective November 16, 2017, Hein combined with Moss Adams. As a result of that transaction, on November 16, 2017, Hein resigned as the Company's independent registered public accounting firm for 2014.the Company and, concurrently, the Company’s Audit Committee approved the engagement of Moss Adams as the new independent registered public accounting firm.
The Audit Committee has approved the engagement of Moss Adams to serve as the Company’s independent registered public accounting firm to audit the Company’s financial statements for the fiscal year ending December 31, 2018. The Board of Directors is asking stockholders to ratify this appointment. Although SECcurrent law, rules and regulations, andas well as the Nasdaq listing requirementscharter of the Audit Committee, require the Company'sCompany’s independent registered public accounting firm to be engaged, retained and supervised by the Audit Committee, the Board considers the selectionappointment of an independent registered public accounting firm to be an important matter to stockholders. Accordingly,of stockholder concern and is submitting the Board considersappointment of Moss Adams for ratification by stockholders as a proposal formatter of good corporate governance.
If the stockholders should fail to ratify this appointment to be an opportunitythe selection of Moss Adams as the Company’s independent registered public accounting firm for stockholders to provide input tofiscal year 2018, the Audit Committee may consider the appointment of a different independent registered public accounting firm for fiscal year 2018. In addition, even if stockholders ratify the Audit Committee’s selection, the Audit Committee, in its discretion, may still appoint a different independent registered public accounting firm if it believes that such a change would be in the best interests of the Company and the Board on a key corporate governance issue.its stockholders.
Representatives of BDO USA, LLP willMoss Adams are expected to be present at the Annual Meeting andMeeting. They will be offeredhave the opportunity to make a statement if they so desire. Theyand will also be available to answerrespond to appropriate questions.
Fees PaidBackground Regarding Change in Certifying Accountant
During 2015, the Company determined that certain previously issued financial statements would need to Auditorsbe restated due to certain errors.
On December 16, 2015, the Company disclosed in a Current Report on Form 8-K (as amended on December 21, 2016), that BDO USA, LLP (“BDO”) would serve as the Company’s independent registered public accounting firm with respect to the audit of the Company’s financial statements for its 2012 through 2014 fiscal years, but that BDO had resigned as the Company’s independent registered public accounting firm for its 2015 fiscal year. The Company promptly engaged in a process to select an independent registered public accounting firm for its 2015 fiscal year. As a result of that process, the Company’s management concluded that, among other considerations, appointing a single accounting firm to audit all outstanding fiscal years would be more efficient than using two firms and would present a greater likelihood of completing the restatement and bringing the Company current in its SEC-reporting status more promptly.
Based on the foregoing, the Company’s management recommended to the Company’s Board and the Audit Committee that, effective March 24, 2016, the Company dismiss BDO as its independent registered public accounting firm with respect to the audit of the Company’s financial statements for its 2012 through 2014 fiscal years and appoint Hein (now Moss Adams) as its new independent registered public accounting firm for all relevant periods. The following table sets forthfull Board and the fees accruedAudit Committee each approved that change. The Company’s Board, Audit Committee and management believed that this approach would be in the best interest of the Company and its shareholders, and would be the most effective way to complete the audit of the Company’s 2015 financial statements, as well as those subject to the restatement.
During the Company’s two most recent fiscal years and the subsequent interim period, neither the Company nor anyone on its behalf consulted with either Hein or paidMoss Adams with respect to: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and no written or oral advice of Hein or Moss Adams was provided to the Company that was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting
issue; or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions related thereto), or any “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K).
During the Company’s two fiscal years, and the subsequent interim period, prior to the date of BDO’s dismissal, there were no disagreements between the Company and BDO USA, LLPon any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to BDO’s satisfaction, would have caused BDO to make reference to the subject matter of the disagreement in their reports on the Company’s consolidated financial statements. BDO’s audit reports on the Company’s consolidated financial statements for the years ended December 31, 2013 and 2012.
Audit2014, when previously filed, did not contain any adverse opinion or disclaimer of opinion, nor was either report qualified or modified as to uncertainty, audit scope, or accounting principles. However, as stated in the Company’s Current Reports on Form 8-K, filed on May 6, 2015, October 26, 2015 and Non-Audit Fees
| | December 31, | ||||||
|---|---|---|---|---|---|---|---|
| | 2013 | 2012(4) | |||||
Audit Fees(1) | $ | 785,000 | $ | 798,692 | |||
Audit-Related Fees(2) | 2,415 | 11,322 | |||||
Tax Fees(3) | 41,236 | 27,174 | |||||
All Other Fees | — | — | |||||
| | | | | | | | |
TOTAL | $ | 828,651 | $ | 837,188 | |||
| | | | | | | | |
(1)Fees and expenses forJanuary 26, 2016, the Company’s 2012, 2013 and2012 audit services include fees associated with the annual audit, review of our interim2014 financial statements, including theauditor's opinions related topreviously filed auditor’s reports on the Company’s 2012, 2013 and 2014 financial statements, and the auditor’s reports on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2012, 2013 and 2014, should no longer be relied upon in light of the subsequent restatement.As discussed in our Current Report on Form 8-K (as amended), filed on December 16, 2015, prior to the Company’s dismissal of BDO, the Company and BDO discussed certain material weaknesses in the Company’s internal control over financial reporting relating to revenue recognition, inventory costing, and warranty reserves. We have taken, and continue to take, meaningful steps to enhance our internal controls over financial reporting in connection with these material weaknesses and to strengthen our financial reporting and accounting functions. We believe the remediation measures that we are undertaking, which in some cases have already been implemented, have improved, and will continue to improve, the effectiveness of our internal control over financial reporting. However, we have not completed all of the corrective processes and procedures and continue to have material weaknesses, as described in “Part II—Item 9A. Controls and Procedures” in the 2017 Form 10-K.
Other issues discussed between the Company and BDO included those relating to the supporting documentation for manual journal entries (including potential internal control implications), a proposed change in accounting methodology for certain construction contracts from the “completed contract” method to the “percentage-of-completion” method, the recognition of revenue on projects that were completed at or after related warranty matters were identified, amounts of warranty accruals and the potential accounting impact of warranties that meet the definition of “extended warranties,” recording of expected losses on ongoing construction contracts, and the timing of accrued severance benefits to certain employees. In addition, the Company and BDO concluded a need existed to perform a goodwill impairment review as a result of the anticipated restatement adjustments to the financial statements and a need to strengthen the Company’s internal audit function. With respect to the internal audit function, the Company and BDO discussed evaluating the competency and objectivity of the internal audit function and its ability to effectively perform its duties (such examination of the internal audit function, collectively with the matters described in the prior paragraph, and the first and second sentences of this paragraph, are referred to herein as the “Matters”). Members of the Company’s management and the Audit Committee discussed the Matters with BDO. However, at the time of BDO’s dismissal, BDO had not completed its evaluation of the Matters, including the magnitude of any internal control deficiencies associated with manual journal entries or the internal audit function. Except for the Matters, there were no “reportable events,” as defined in Item 304(a)(1)(v) of Regulation S-K of the rules and regulations of the SEC, during the Company’s fiscal years ended December 31, 2013 or 2014 or in any subsequent interim period. The Company authorized BDO to respond fully to the inquiries of the successor accounting firm concerning the subject matter of the reportable event stated above.
The Company provided BDO with a copy of the information required by
Section 404Item 304(a) of Regulation S-K, which was also filed with theSarbanes-Oxley Act of 2002SEC in Current Reports on Form 8-K, filed on December 16, 2015 (as amended on December 21, 2015) andstatutory audits.(2)Fees for 2013 are relatedMarch 30, 2016 (as amended on April 4, 2016), respectively. The Company requested that BDO review such disclosures and provide a letter addressed to the SEC. Each such report was subsequently amended to attach as an exhibit the letter from BDO to the SEC.Pursuant to conversations with BDO, prior to its dismissal, with Hein prior to its combination with Moss Adams, and with Moss Adams, the Company is not aware of any financial interest, direct or indirect, held, in any capacity, by BDO (prior to its dismissal), by Hein (prior to its combination with Moss Adams) or by Moss Adams in the Company or its subsidiaries.
Audit and Non-Audit Fees
Hein was retained as our independent registered public accounting firm to audit our financial statements for the fiscal year ended December 31, 2017. Hein combined with Moss Adams on November 16, 2017, at which time the Audit Committee engaged Moss Adams to audit our financial statements for the 2017 fiscal year.
The following table sets forth the estimated or actual fees paid or accrued by us for professional accounting fees and services rendered for the year ended December 31, 2017 from our principal accounting firm Moss Adams as well as our former principal accounting firm Hein; and to Hein for professional accounting fees and services rendered for the year ended December 31, 2016.
December 31,
2017
2016
($ in thousands)
Moss Adams
Hein
Totals
Hein
Audit Fees(1)
$
567
$
102
$
669
$
1,188
Audit-Related Fees
—
—
—
—
Tax Fees
—
—
—
—
Total
$
567
$
102
$
669
$
1,188
(1) Audit fees are fees that were charged for the audit of our annual financial statements included in our annual report on Form 10-K and review of
the goodwill impairment preferability letter. Fees for 2012 are related to the review of SEC Comment Letters and consultation on the Chief Executive Officer transition.(3)Tax fees for 2013 and 2012 include fees for VAT and tax consultation services performedunaudited financial statements included in ournon-U.S. locations.(4)Audit feesquarterly reports on Form 10-Q; for services that are normally provided by the independent registered public accounting firm in connection with statutory andAudit-Related Fees for 2012 have been adjusted from those disclosedregulatory filings or engagements; and all costs and expenses in connection with the2013 Proxy Statement for actual expenses that differed from original estimates.
Audit Committee Pre-Approval of Audit and Non-Audit Services
The Audit Committee'sCommittee’s policy is to pre-approve all audit and non-audit services provided to the Company by its independent registered public accounting firm (except for items exempt from pre-approval requirements under applicable laws and rules). All audit and non-audit services for 2013included in the table above were pre-approved by the Audit Committee.
When considered necessary, management prepares an estimate of fees for the service and submits the estimate to the Audit Committee for its review and pre-approval. Any modifications to the
estimates will be submitted to the Audit Committee for pre-approval at the next regularly scheduled Audit Committee meeting. All fees paid to our independent registered public accounting firm during 2013the periods covered by the 2017 Form 10-K and through the Record Date were in accordance with this pre-approval policy.
Required Vote
Stockholders may cast their vote “for,” “against” or “abstain” from voting on this proposal. Ratification of the appointment of BDO USA, LLPMoss Adams as our independent registered public accounting firm for the year ending December 31, 20142018 requires the affirmative vote of a majority of the votes cast, atmeaning the Annual Meeting.number of shares voted “for” the ratification of the appointment of Moss Adams must exceed the number of shares voted “against” the proposal. Abstentions are not considered votes cast and will have no effect on the results ofvote for this vote. Brokerageproposal. In addition, brokerage firms have authority to vote customers'customers’ unvoted shares held by the firms in street name on this proposal. If a broker does not exercise this authority, such broker non-votes will have no effect on the results of this vote.
If the stockholders fail to ratify the appointment, the Audit Committee will reconsider its selection. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.
Recommendation of the Board of Directors
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF MOSS ADAMS AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2018.
The Board recommends a vote FOR ratificationfollowing sets forth information regarding our executive officers as of the appointmentRecord Date. Executive officers are appointed by, and hold office at the discretion of, BDO USA, LLPour Board of Directors, subject to the terms of any employment agreements. The background of Mr. Pagliara is described above.
Name | Position | |
Tracy D. Pagliara | President and Chief Executive Officer | |
Timothy M. Howsman | Chief Financial Officer | |
Charles E. Wheelock | Vice President, Administration, General Counsel and Corporate Secretary |
Timothy M. Howsman, 57, has served as our Chief Financial Officer since July 31, 2018. He was appointed interim Chief Financial Officer on May 29, 2018, having previously served as our Chief Accounting Officer since December 11, 2017, in which role he did not serve as an executive officer. Prior to his retirement from the Company in March 2017 and subsequent rehiring, Mr. Howsman served as the Company's independent registeredCompany’s Chief Financial Officer, Products from April 2015 through March 2017 and concurrently served as principal financial officer from November 2015 through March 2017. Mr. Howsman previously served as the Company’s Corporate Controller from August 2014 through March 2015. Prior to joining the Company, Mr. Howsman served as the Vice President, Controller of Blue Lynx Media, LLC, the accounting shared service center for Tribune Publishing, from April 2011 through July 2014. Prior to joining Blue Lynx Media, Mr. Howsman held positions of increasing responsibility in the accounting department of Dresser, Inc., an international manufacturing company providing highly engineered products primarily to the energy sector, from April 2006 to January 2011. During his tenure at Dresser, his roles included serving as the Assistant Corporate Controller and Director, Accounting Center. Mr. Howsman began his career working for one of the former Big Eight public accounting firmfirms, after which he worked in various industries and held positions of increasing responsibility in both accounting and finance as well as operations. In addition, in accordance with customary practice, Mr. Howsman and other officers of the Company have served as officers of the Company’s various subsidiaries, although not acting in an executive role for 2014.the relevant subsidiary. As previously disclosed, such subsidiaries included Koontz-Wagner Custom Controls Holdings LLC, which filed a voluntary petition for relief under Chapter 7 of the U.S. Bankruptcy Code in July 2018 and ceased operations at such time.
Charles E. Wheelock, 49, has served as our Vice President, Administration, General Counsel and Corporate Secretary since July 2017. He joined the Company in September 2011 as Associate General Counsel and thereafter assumed roles of increasing responsibility, including Vice President, Deputy General Counsel and Chief Compliance Officer. He led the human resources, recruiting and labor relations groups in our Atlanta, Georgia office prior to his current appointment. Prior to joining the Company, Mr. Wheelock spent 10 years at General Electric Company, serving in a variety of roles in its Energy Services and Power Generation businesses. Mr. Wheelock is a member of the State Bar of Georgia.
Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides an analysisa summary of the compensation arrangements and decisions with respect to our named executive officers who include:during 2017, including the individuals listed in the table below (who are referred to as our “current named executive officers,” although not all of the individuals listed in the table below served in such roles as of the Record Date):
Name | Position | |
| Co-President and | |
| Co-President and Co-Chief Executive Officer(1) | |
Erin Gonzalez | Chief Financial Officer and Principal Financial and Accounting Officer(2) | |
| ||
| Vice President Administration, General Counsel | |
|
*Effective March 7, 2014,(1) On April 13, 2018, Mr. Holmes resigned from his positions as Co-President and Co-CEO, and Mr. Pagliara was appointed President and Chief Executive Officer.
(2) On May 29, 2018, Ms. Gonzalez resigned from her position as
the Company'sChiefAdministrativeFinancial Officer,General CounselandSecretary.
Our named executive officers for 2017 also includeincluded three additional executives whose employment with the Companyas named executive officers terminated during 2013:2017: Terence J. Cryan, former President and Chief Executive Officer; Mark F. Jolly, former Chief Accounting Officer; and Timothy M. Howsman, former Chief Financial Officer, Products, who currently serves as our Chief Financial Officer.
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Section 1: Executive Summary
In furtherance
Compensation Objectives for 2017
The overriding objective of the business strategiesour compensation program in 2017 was to attract and compensation objectives outlined below, we have undergone several significant changes in 2013. These changes include:
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We are committed to providing total direct compensation that supports our business strategiesthrough process discipline, operating rigor and the compensation objectives. As a result, we have implemented the following policies and practices:accountability, while continuing to provide our customers with high quality services.
•·
Variable Compensation.A meaningful portion of our named executive officers' total direct compensation is variable and contingent upon financial and strategic performance, which supports our pay-for-performance culture. The variable compensation elements consist of: (i) an STI opportunity, which is paid in cash based on the extent to which certain annual operating income and individual performance goals are achieved; and (ii) an award of performance-based restricted stock units ("RSUs"), which vest over time based in part on the extent to which we achieve specified performance goals and in part on continuing employment of the named executive officer. The LTI opportunity encourages our named executive officers to continue to make decisions and to deliver results over a broader time period, thus keeping a focus on the long-term horizon and the retention of our executives.•Fixed Compensation.The fixed components of total direct compensation include base salary and time-based RSUs, which generally vest in equal installments over a three- or four-year period to enhance our retention incentives.•- Stock Ownership Guidelines. Our stock ownership guidelines require the officers of the Company to hold a minimum level of the
Company'sCompany’s shares of CommonStock to ensureStock: for the Chief Executive Officer position, the lesser of three times his or her base salary or 75,000 shares, and for the other named executive officers, the lesser of two times his or her base salary or 40,000 shares. These guidelines are designed so that each executive has personal wealth tied to the long-term success of the Company and is therefore aligned with stockholder interests.·No Hedging or Pledging of Company Stock. Our insider trading policy prohibits our employees, officers and directors from engaging in hedging transactions involving Company stock or holding Company stock in a margin account. Additionally, our employees, officers and directors may only pledge securities with the consent of the Company. No named executive officer or director has pledged securities.
· •Claw-BackClaw Back Policy. We maintain a"claw-back"“claw back” policy, under whichwe mayour Board has the ability to requirethe reimbursement of any incentive compensation paid to theour executive officers to forfeit or repay short-term incentive (“STI”) awards and other performance-based compensation if:· The payment, grant or vesting of the
Company if the paymentcompensation waspredicatedbased upon financial results that were subsequently restated;· The Board determines, in its sole discretion, that the
subjectofficer engaged in fraud or misconduct that caused or contributed to the need for the restatement;· The officer received more compensation than he or she would have received if the financial results had been properly reported; and
· The Board determines, in its sole discretion, that forfeiture or repayment of all or a
restatement.portion of the officer’s performance-based compensation is in the best interest of the Company and its stockholders.·
•- No Excise Tax
Gross-Ups.Gross Ups. We do not provide excise taxgross-upsgross ups for severance benefits received in connection with achange in control of the Company.
·Double Trigger Vesting. Our 2015 Equity Incentive Plan provides for “double trigger” vesting of equity awards assumed in a change in control transaction, so that the awards will not automatically vest on a change in control. Instead, the awards assumed in a transaction will continue to vest on their regularly-scheduled vesting date or, if earlier, upon a termination without cause or resignation for good reason within two years after a change in control.
· •- No
SERP and Limited Perquisites.Supplemental Executive Retirement Plan. We do not maintain a supplemental executive retirement plan or any other type of defined benefit retirement plan.In the past we have offered modest perquisites to named executive officers as part of a competitive compensation package, but we have discontinued this practice for new hires.·
•- Consideration of
Prior Year's "Say on Pay"“Say-on-Pay” Vote.As in previous years,At the 2015 Annual Meeting, stockholderscontinued to show strongshowed support for our executive compensation program by approving the compensation of our named executive officers by a vote of approximately95%93% of the shares represented by person or by proxy at the20132015 Annual Meeting. The Compensation Committee views thecontinuedsupport ofsuchour stockholders asa strongan endorsement of our compensation program andour compensationobjectives.
Our Compensation Policies and Practices
Our compensation objectives are outlined below.
•Pay-For-Performance.Maintain the flexibility to recognize, differentiate and reward individual performance.•Focus on Long-Term Horizon.Create sustainable stockholder value consistent with our long-term strategic goals and avoid creating excessive or inappropriate risks that would be detrimental to our long-term goals.
Our Compensation Objectives
•Talent Retention.Attract and retain high-caliber executives who can effectively manage our complex global business.•Alignment with Stockholder Interests.Align our executives' interests with those of our stockholders by making stock-based incentives a core element of our executives' compensation.•Maintain Financial Strength and Flexibility.Structure our compensation programs in recognition of the cyclical nature of our business and the need to manage for value throughout the business cycle.
Section 2: Elements of Total Direct Compensation
A brief summary of our total direct compensation—consisting of base salary, STI opportunities and long-term incentive (“LTI”) opportunities—for our named executive officers is set forth below.
Annual Base Salaries
The Compensation Committee intends to provide our named executive officers with competitive base salaries that are commensurate with their job responsibilities, experience and performance.
As part of its annual management performance evaluation, the Compensation Committee reviewed the base salary levels of the named executive officers (other than Mr. Guba) to determine whether any adjustments were appropriate for 2013. The Compensation Committee reviewed the market data, performance evaluations conducted by Mr. Ramírez, and base salary histories. Based on this review, and in light of our financial performance, no changes to annual base salary were made for 2013. In November 2013,July 2017, the Compensation Committee approved amerit increases of 2.5% for Ms. Gonzalez and 1.5% for Mr. Wheelock.
In connection with their appointment as Co-CEOs, effective July 26, 2017, Mr. Pagliara’s base salary forwas increased from $392,135 to $450,000 and Mr. GubaHolmes’ base salary was increased from $404,875 to $450,000. In connection with her promotion to Chief Financial Officer, effective August 2, 2017, Ms. Gonzalez’s base salary was increased from $220,759 to $275,000. In connection with his promotion to Vice President, Administration, General Counsel and Corporate Secretary, effective August 9, 2017, Mr. Wheelock’s base salary was increased from $256,000 to $260,000. In connection with his initial appointment as Vice President, Finance in October 2016, Mr. Jolly received an annual base salary of $390,000, which was negotiated at the time$260,000. In connection with his appointment as Chief Accounting Officer on December 11, 2017, Mr. Howsman received an annual base salary of his hire.$260,000.
For more information about the 20132017 base salaries for each of our named executive officers, please refer to the "Salary"“Salary” column of and the related footnotes to the "Summaryin “2017 Summary Compensation Table" on page 31.Table” below.
Short-Term Incentive Compensation
The STI plan is designed to motivate our named executive officers to achieve each year’s business plan objectives and individual performance goals.
As part of its annual management performance evaluation in March 2017, the Compensation Committee reviewed the threshold, target and maximum award opportunities under the STI plan for each of the current named executive officers, (other than Mr. Guba) under the STI plan, which were expressed as a percentage of base salary. During the annual review process, the Compensation Committee did not adjust the target STI opportunity for the then-current named executive officers because the levels were already competitively positioned.positioned at that time, which were 80% of annual salary for Mr. Guba did not participate in theCryan, 65% of annual salary for Mr. Pagliara and 65% of annual salary for Mr. Holmes.
In connection with their appointment as Co-CEOs, effective July 26, 2017, Mr. Pagliara’s target STI plan for 2013 because he joined in the middleopportunity was increased to 75% of the final quarter. Instead, heannual salary and Mr. Holmes’ target STI opportunity was awarded a guaranteed bonusincreased to 75% of $64,000 for the fourth quarterannual salary. In connection with her promotion to Chief Financial Officer, effective August 2, 2017, Ms. Gonzalez’s target STI opportunity was set at 50% of 2013, whichher annual salary. In connection with his promotion to Vice President, Administration, General Counsel and Corporate Secretary, effective August 9, 2017, Mr. Wheelock’s target STI opportunity was negotiatedset at the time50% of his hire.
The threshold,annual salary. In connection with his initial appointment as Vice President, Finance in October 2016, Mr. Jolly’s target and maximum levels for the named executive officers (other thanSTI opportunity was established at 40% of his annual base salary. In connection with his appointment as Chief Accounting Officer, on December 11, 2017, Mr. Guba) are set forth in the table below.Howsman’s target STI opportunity was established at 40% of his annual base salary.
Named Executive Officer | Threshold | Target | Maximum | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
L. Ramírez | 40 | % | 80 | % | 160 | % | ||||
P. Sherrod-Campanizzi | 27.5 | % | 55 | % | 110 | % | ||||
T. Pagliara | 27.5 | % | 55 | % | 110 | % | ||||
M. Barth | 27.5 | % | 55 | % | 110 | % | ||||
D. Willis | 32.5 | % | 65 | % | 130 | % | ||||
D. Glover | 32.5 | % | 65 | % | 130 | % | ||||
K. Robuck | 32.5 | % | 65 | % | 130 | % | ||||
Performance Objectives
The performance objectives for the short-term incentive2017 STI opportunity for each current named executive officer were allocated between financial70% to adjusted EBITDA objectives at the corporate and individual objectivesbusiness unit levels and 30% to key performance initiatives (“KPIs”) as follows:
| | Financial Objectives | | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Executive Level | Business Operating Income | Corporate Operating Income | Individual Objectives | |||||||
Senior Corporate Executives(1) | — | 80 | % | 20 | % | |||||
Senior Business Unit Executives(2) | 50 | % | 30 | % | 20 | % | ||||
(1)Senior Corporate Executives include Messrs. Ramírez, Pagliara and Willis and Ms. Barth.(2)Senior Business Unit Executives include Messrs. Robuck and Glover and Ms. Sherrod-Campanizzi.
Financial Objectives
The financial objectives were based on operating income. For this purpose, we define operating income
EBITDA Performance Goal Weighting |
| ||||||||||||
Mechanical* |
| Braden Europe |
| Electrical |
| Williams |
| Consolidated |
| KPI Weighting |
| Total |
|
5% |
| 6% |
| 8% |
| 16% |
| 35% |
| 30% |
| 100% |
|
* Excludes Braden Europe
Adjusted EBITDA Objectives
Adjusted EBITDA was defined by reference to the Company’s revolving credit facility (as amended from time to time, the “Revolving Credit Facility”), which generally defined adjusted EBITDA as the subtotal of net income or (loss) for the year(i) plus: (i) the following to the extent deducted in calculating net income for such period:and franchise taxes; interest charges; letter of credit fees; the provision for federal, state, localexpense; amortization, depreciation and foreign income taxes; other non-recurring, non-cash expenses; anditems, including any other non-cash write-downs or non-cash write-offs, including fixed asset impairmentimpairments or write-downs, intangible asset impairments and deferred tax asset write-offswrite-offs; extraordinary losses (excluding extraordinary losses from asset dispositions, severance and discontinued operations, unless approved by the administrative agent under the Revolving Credit Facility); non-cash stock compensation expenses; and minus (ii) the following,expense; expenses paid in cash attributable to the extent included in calculating such net income:restatement; and expenses attributable to the Revolving Credit Facility, and (ii) less: interest income, federal, state, local and foreign income tax benefits, recorded bywrite-ups, re-evaluations and non-cash gains resulting from the Company; interest income;marking or re-evaluation of any asset and allany extraordinary non-recurring, non-cash items increasing net incomegains. However, at the time the performance goals were established, the Compensation Committee authorized the add back of severance, restructuring and divestiture charges that were not included in the Board-approved budget for such period.
fiscal 2017 (and not otherwise added back under the Revolving Credit Facility definition) in calculating adjusted EBITDA for purposes of the STI plan. The Compensation Committee established threshold, targetbelieves that adjusted EBITDA is the appropriate financial metric because it: (i) excludes non-cash expense impact of purchase price accounting arising from acquisitions and maximum performance levels forthus is more consistent with our long-term strategic plan; (ii) maintains focus on profitability of the operating income goals for both the corporateentire Company; and divisional level executives. If actual performance for(iii) is an operating income goal fell below the threshold level, then no bonus would be funded with respect to that goal. If actual performance for an operating income goal exceeded the maximum performance level, then the bonus for that goal would be capped.investor preferred metric.
The 2013 operating income ("OI")2017 adjusted EBITDA targets and actual performance results for purposes of the STI plan were as follows (in thousands):
Operating Income | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual Results | Actual Payout Level | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Consolidated OI | $ | 25,245 | $ | 28,050 | $ | 40,595 | $ | 16,189 | 0.00 | % | ||||||
EPCS OI | $ | 5,256 | $ | 5,844 | $ | 7,671 | $ | 6,123 | 115.30 | % | ||||||
Individual Goalsfollows.
|
| EBITDA Goals (in thousands) |
|
|
| |||||||||||||
Achievement Level |
| Mechanical* |
| Braden Europe |
| Electrical |
| Williams |
| Consolidated |
| Weighted Average |
| |||||
Threshold (35% weighted average payout opportunity) |
| $ | 3,678 |
| $ | 3,945 |
| $ | 5,986 |
| $ | 11,955 |
| $ | 12,503 |
|
|
|
Target (70% weighted average payout opportunity) |
| $ | 4,597 |
| $ | 4,931 |
| $ | 7,482 |
| $ | 14,944 |
| $ | 15,628 |
|
|
|
Maximum (170% weighted average payout opportunity) |
| $ | 9,194 |
| $ | 9,862 |
| $ | 14,964 |
| $ | 29,887 |
| $ | 31,257 |
|
|
|
Actual results |
| $ | (3,670 | ) | $ | 4,142 |
| $ | (18,334 | ) | $ | 1,186 |
| $ | (27,371 | ) |
|
|
Weighted average payout % |
| — |
| 3.96 | % | — |
| — |
| — |
| 3.96 | % | |||||
* Excludes Braden Europe
Key Performance Initiatives
The Compensation Committee basesbased a meaningful portion (i.e., 30%) of the short-term incentiveSTI opportunity for the current named executive officers on the achievementits assessment of individual goals, in orderKPIs, to provide the flexibility to recognize, differentiate and reward the achievement of strategic business goals. The 2017 KPIs for the current named executive officers were as follows:
Goal Category | Description | Weight | |||
Corporate | Maintain corporate compliance — no new 2017 reportable accounting, legal or human resources compliance failures resulting in penalties or regulatory findings | 20 | % | ||
Complete bank refinancing | 20 | % | |||
Achieve Corporate overhead budget | 20 | % | |||
Remediation of 75% of control deficiencies surfaced during restatement | 20 | % | |||
Employee Engagement/Safety | Develop and implement enhanced and improved employee development strategy, including recruiting, onboarding, performance management process, succession planning and high potential employee development | 10 | % | ||
Safety record — no higher than a 0.76% recordable rate in 2017 | 10 | % |
The Compensation Committee determined that the current named executive officers achieved each of the KPIs listed above, other than remediation of 75% of control deficiencies surfaced during restatement, and the safety target, which resulted in a 70% achievement level for the KPIs, or a weighted average payout of 21% of the participant’s target STI opportunity.
TablePayouts of ContentsSTI Awards
reward individual performance. The individual goals for each
Each current named executive officer other than Mr. Guba, who did not participate inwas entitled to a payout under the 2017 STI plan for 2013, are summarized below.
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Tableprogram equal to 24.96% of Contents
Payouts
The Compensation Committee reviewed Mr. Ramírez's performance with respect to his 2013 individual goals. With regard to the other named executive officers, Mr. Ramírez made recommendations to the Compensation Committee concerning thetarget STI opportunity, which reflected a weighted average achievement level of performance of each officer with respect to the person's goals for 2013. After taking Mr. Ramírez's recommendations into consideration, and after making its own assessment of each executive's performance, the Compensation Committee determined the payouts under the 2013 STI plan, based on aggregate corporate and individual performance.
The weighted-average achievement and payout levels3.96% for the named executive officers under the 2013 STI plan are set forth below.
Named Executive Officer | Weighted Average Achievement Level | Payout | |||||
|---|---|---|---|---|---|---|---|
L. Ramírez | 20.0 | % | $ | 88,000 | |||
P. Sherrod-Campanizzi | 80.5 | % | $ | 133,686 | |||
T. Pagliara | 21.2 | % | $ | 36,894 | |||
M. Barth | 19.1 | % | $ | 32,050 | |||
Ms. Sherrod-Campanizzi was also granted a special discretionary bonus of $50,000, grossed-up for applicable taxes, for her successful integration of acquisitions.
Mr. Guba did not participate in the STI plan for 2013, but was awarded a guaranteed bonus of $64,000adjusted EBITDA measures and 21% for the fourth quarter of 2013, which was negotiated at the time of his hire. Messrs. Glover and Willis, pursuantKPIs. Pursuant to the terms of their respective employment agreements, each received payouts of pro-rata portions of their target bonuses in connection with their terminations. Mr. Robuck participated inHolmes, Mr. Pagliara and Ms. Gonzalez were entitled to a 100% payout under the STI plan for 2013, butprogram, provided that they remained continuously employed by the Company past April 15, 2018, although they each voluntarily agreed to defer 75.04% of that payout, generally until September 2018 (with each of Mr. Holmes and Ms. Gonzalez receiving his bonus opportunity was forfeited dueor her amount in installments through that date, and Mr. Pagliara’s is expected to be paid during the fourth quarter of 2018). Mr. Cryan and Mr. Jolly were also entitled to a prorated payout under the STI program, based on actual performance during the entire fiscal year. Pursuant to his termination.
The amountseparation agreement, Mr. Cryan was entitled to a pro-rata 2017 STI payment based on actual 2017 EBITDA financial performance plus 30% of his STI target for presumptive achievement of the 2013 STI payments2017 corporate KPIs, for each named executive officer is set forth in the "Non-Equity Incentive Plan Compensation" columna total achievement of and the related footnotes to, the "Summary Compensation Table" of this proxy statement at page 31. The amount of bonuses paid outside of the STI plan for each named executive officer is set forth in the "Bonus" column of the "Summary Compensation Table." For more information on the 2013 STI opportunities for our named executive officers, please refer to the table "2013 Grants of Plan-Based Awards" in this proxy statement on page 34.33.96%.
Long-Term Incentive Compensation
Grants During Annual Grant Cycle
As part of its annual management performance evaluation, the Compensation Committee reviewed the LTI award levels for 2017 in March 2017 for our then-current named executive officers (other than Mr. Guba)(which was prior to later promotions in 2017 for certain executive officers). When considering appropriate award levels, the Compensation Committee considered its assessment of each executive'sexecutive’s general performance during the year, as well as his or her relative roles and responsibilities and potential within the Company, the estimated accounting expense, our burn rate, the potential dilution that will occur to our stockholders and the median levels of market surveys. Based on this information, the Compensation Committee decided not to make any changes ingranted the 2013 LTI award levels for the named executive officers. In November 2013,target opportunities set forth below.
Named Executive Officer | LTI Target Opportunity (as a % of base salary) | ||
Craig E. Holmes | 85 | % | |
Tracy D. Pagliara | 75 | % | |
Erin Gonzalez | 30 | % | |
Charles E. Wheelock | 30 | % | |
Terence J. Cryan | 125 | % |
On March 31, 2017, the Compensation Committee approved thea new 2017 LTI grant for Mr. Guba,plan design, which was negotiated at the time of his hire.
As described in more detail in the Executive Summary, the number of RSUs grantedintended to eachenhance retention incentives and drive sustained stock price appreciation. Each current named executive officer was allocated1/3officer’s award opportunity under the 2017 LTI plan consisted of two components of roughly equal value:
· Performance-based restricted share units (“RSUs”), which vest based on the extent (if any) to which we achieve a percentile ranking between the 25th percentile (for a 25% payout) and 75th percentile (for a 150% payout) among companies in a comparator group for total stockholder return (“TSR”) during the period commencing April 17, 2017 and ending March 31, 2019 (with payout capped at target if our TSR is negative). If our TSR percentile ranking as of March 31, 2018 is at or above the 25th percentile, then the payout shall not be less than threshold. In addition, the award will vest at no less than target if the Company achieves a trading price per share equal to $6.00 for any period of 30 consecutive trading days during the three-year period ending on March 31, 2020.
· Time-based awards, consisting of time-based RSUs and,2/3 to performance-based RSUs.
The following chart illustrates the number of RSUs granted to each named executive officer in 2013.
Named Executive Officer | Time-Based RSUs | Performance-Based RSUs | Total RSUs | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
L. Ramírez | 11,167 | 22,333 | 33,500 | |||||||
R. Guba | 4,667 | 9,333 | 14,000 | |||||||
P. Sherrod-Campanizzi | 1,833 | 3,667 | 5,500 | |||||||
T. Pagliara | 3,000 | 6,000 | 9,000 | |||||||
M. Barth | 3,474 | 6,949 | 10,423 | |||||||
D. Willis | 3,667 | 7,333 | 11,000 | |||||||
D. Glover | 3,667 | 7,333 | 11,000 | |||||||
K. Robuck | 3,667 | 7,333 | 11,000 | |||||||
Payouts
Mr. Ramírez received a grant of performance-based RSUs in 2012, solely for Ms. Sherrod-Campanizzi received grants of performance-based RSUs in 2011 and 2012,Gonzalez and Mr. Pagliara received grants of performance-based RSUs in 2010, 2011 and 2012. The performance target for purposes of these performance-based RSUs allocated to the 2013 performance cycle was operating income (as defined under our STI program) of $28,050,000.Wheelock, time-based cash incentives, which generally vest on March 31, 2019.
The performance-based RSUs for the 2013 performance cycle had separate payout levels for performance at 90% of target, 95% of target and 100% of target.
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Our 2013 operating income (as defined above) was $16,189, which resulted in no payout level for units allocated to the 2013 performance period (i.e., 12.5% of the 2010, 2011 and 2012 grants).
Each of Messrs. Willis, Glover and Robuck also received grants of performance-based RSUs in 2010, 2011 and 2012. Pursuant to the terms of their employment agreements, each of Messrs. Willis and Glover received a payout of these units at 100%. Mr. Robuck forfeited his units upon his resignation.
For each named executive officer's actual payout, please refer to the "2013 Stock Vested" section on page 37 of this proxy statement.
Section 3: Compensation Consultant and Peer Group
Compensation Consultant
In 2013,2017, the Compensation Committee retained Meridian Compensation Partners, LLC ("Meridian")and Longnecker to serve as its independent consultantconsultants to assist in developing and reviewing our executive compensation program. Meridian reportsand Longnecker report directly to the Compensation Committee and servesserve at the sole discretion of the Compensation Committee. It doesThey do not perform any other services for the Company.us. The Compensation Committee has assessed the independence of Meridian and Longnecker pursuant to Securities and Exchange CommissionSEC rules and concluded that no conflict of interest exists that would prevent the consulting firm from independently advising the Compensation Committee.
We believe that each element of our compensation program should remain competitive in order to retain, and, if necessary, attract, experienced, high-caliberhigh caliber executives. To achieve this objective, Meridian was asked to review competitive compensation data, compare current compensation levels to the market and assist in establishing compensation levels. The
market data was derived from several sources, including the companies in a compensation peer group established by the Compensation Committee, with the advice of Meridian, and selected compensation surveys. Each of these sources is described below.
Compensation Peer Group
Our compensation peer group consists of companies that haveprimarily operate in the same General Industry Classificationcapital goods and similar lines of businessenergy industry and operations asrepresent the Company.market in which we compete for executive talent and leadership. Based on these factors, and upon the advice and recommendation of Meridian, the Compensation Committee modifiedused the compensation peer group to: (i) add Graham Corporation; (ii) add CECO Environmental Corp.; and (iii) remove Quanta Services Inc. These changes were made to reflect the evolving market in which we compete for executive talent and to decrease the median revenue size of the peer group.
The members of the compensationfollowing peer group for 2013purposes of reviewing the compensation decisions were as follows:program for our named executive officers in 2017:
Compensation Peer Group
Astec Industries, Inc. | Dycom Industries, Inc. | |
Aegion Corporation | Graham Corporation | |
AZZ, Inc. | Matrix Service Company | |
BWX Technologies, Inc. | MYR Group Inc. | |
CECO Environmental Corp. | Powell Industries, Inc. | |
Chicago Bridge & Iron Company N.V. | Team, Inc. | |
Donaldson Company, Inc. | ||
Willbros Group, Inc. | ||
Compensation data for the peer group was adjusted to reflect the Company's corporate or division revenue, where applicable, using regression analysis.
Compensation SurveysSection 4: Employment Arrangements
Meridian supplemented the peer group data with published survey sources, with approximately 500 companies with revenues from $500 million to $2.5 billion, to provide the Committee with another perspective on market compensation levels.
Additional Compensation MattersEmployment Agreements
Severance and Change in Control Protections
In the past,
Craig E. Holmes and Tracy D. Pagliara were appointed as Co-Presidents and Co-CEOs of the Company maintainedon July 26, 2017, and Erin Gonzalez was appointed as the Company’s Chief Financial Officer on August 2, 2017. Capitalized terms used below that are not otherwise defined herein are defined in the relevant agreement.
On September 11, 2017, in connection with such appointments, the Company entered into employment agreements with each of its namedMr. Holmes, Mr. Pagliara and Ms. Gonzalez. The employment agreements entered into with Messrs. Pagliara and Holmes (the “Co-CEO Agreements”) contain identical terms. The Co-CEO Agreements provide for an annual base salary for each Co-CEO of $450,000, effective retroactively to July 26, 2017, and a STI bonus opportunity with a target of 75% of annual base salary. The employment agreement entered into with Ms. Gonzalez (the “CFO Agreement” and, together with the Co-CEO Agreements, the “Agreements”) provides for an annual base salary of $275,000, effective retroactively to August 2, 2017, a STI bonus opportunity with a target of 50% of annual base salary, and a Project Bonus of $40,000 in the event the Company makes certain filings with the SEC by predetermined dates. The Agreements also provided that if the executive officers.remained continuously employed by the Company through April 15, 2018, the amount of his or her STI bonus for the 2017 fiscal year shall be not less than the target STI for that fiscal year.
Each of the Agreements entitles the applicable executive to certain severance benefits if the Company terminates the executive’s employment other than for Disability or Cause, or if the executive terminates his or her employment for Good Reason (a “Qualified Termination”). In such event, subject to the executive signing and not revoking a release of claims in favor of the Company, the Company would pay the executive, among other things, continued annual base salary for the 18-month period, in the case of Messrs. Pagliara and Holmes, or 12-month period, in the case of Ms. Gonzalez, following the date of termination, subsidized health insurance premiums for 12 months, and, if the Qualified Termination occurred prior to April 15, 2018, the target STI for the 2017 fiscal year. If the Qualified Termination occurred not more than 90 days before or two years after a Change in Control of the Company, then the Company would pay or cause to be paid to the executive the following additional benefits: (i) if the Qualified Termination occurred during 2018, the target STI for the 2018 fiscal year, and (ii) the terminated executive’s then-outstanding equity incentive awards would become vested in full (without pro-ration), with any specified performance objectives deemed to be satisfied at the “target” level. The Company however,would pay lower amounts of severance benefits if the executive’s employment is terminated due to death or Disability.
The Agreements contain standard ownership of works, confidentiality, non-compete, non-solicitation and non-disparagement covenants.
In connection with Mr. Holmes’ resignation on April 13, 2018 and Ms. Gonzalez’s resignation on May 29, 2018, each entered into a Separation Agreement with the Company, which are described in more detail below under “Estimated Payments Upon Termination or Related to a Change in Control—Separation Agreements.”
On June 20, 2018, in connection with Mr. Pagliara’s appointment as President and Chief Executive Officer of the Company on April 13, 2018, Mr. Pagliara entered into a new employment agreement with the Company (the “Pagliara Employment Agreement”), which replaced the Co-CEO Agreement that was previously in place. The Pagliara Employment Agreement provides for an initial term of one year with automatic one-year renewals unless earlier terminated pursuant to the provisions of the Pagliara Employment Agreement or written notice of non-renewal is delivered by either party at least 90 days prior to the expiration of the then-current term. As of June 20, 2018, Mr. Pagliara’s annual base salary was $500,000 and his STI bonus opportunity target was 80% of his annual base salary. The Pagliara Employment Agreement also provides that Mr. Pagliara’s annual incentive bonus for the 2018 fiscal year shall not be less than his target STI and that he may earn more than his target STI based on the extent to which the Company achieves certain performance goals. Mr. Pagliara is additionally eligible to participate in the Company’s LTI program, with a target LTI of 125% of his annual base salary.
The Pagliara Employment Agreement entitles Mr. Pagliara to certain severance benefits in the event of a Qualified Termination (including by reason of the Company not renewing the term). In such event, subject to Mr. Pagliara signing and not revoking a release of claims in favor of the Company, the Company would pay him, among other things, continued annual base salary for an 18-month period, subsidized health insurance premiums for 12 months, STI earned for the prior year, if not paid, and, if terminated on or after April 1, a pro-rated STI based on actual results. If the Qualified Termination occurred on or prior to December 31, 2019, or within 90 days before or two years after a Change in Control of the Company, then the Company would pay or cause to be paid to Mr. Pagliara the following additional benefits: (i) his target STI for the fiscal year in which the termination occurs (without pro-ration), and (ii) his then-outstanding equity incentive awards would become vested in full (without pro-ration), with any specified performance objectives deemed to be satisfied at the “target” level. The Company would pay lower amounts of severance benefits if Mr. Pagliara’s employment were terminated due to death or Disability. The Company has madealso agreed to reimburse Mr. Pagliara for certain reasonable travel and other out-of-pocket expenses, including certain costs associated with his relocation from Dallas, Texas to the Company’s headquarters office in Tucker, Georgia.
On July 31, 2018, in connection with Mr. Howsman’s appointment as Chief Financial Officer, Mr. Howsman entered into an employment agreement with the Company (the “Howsman Employment Agreement”). The Howsman Employment Agreement provides for an initial term of one year with automatic one-year renewals unless earlier terminated pursuant to the provisions of the Howsman Employment Agreement or written notice of non-renewal is delivered by either party at least 90 days prior to the expiration of the then-current term. As of July 31, 2018, Mr. Howsman’s annual base salary was $300,000 and his STI bonus opportunity target as 65% of his annual base salary. The Howsman Employment Agreement also provides that Mr. Howsman’s annual incentive bonus for the 2018 fiscal year shall not be less than his target STI and that he may earn more than his target STI based on the extent to which the Company achieves certain performance goals. Mr. Howsman additionally received a strategic decisiongrant of RSUs in respect of 85,000 shares of the Company’s Common Stock, 50% of which were subject to time-based vesting conditions and 50% of which were subject to performance-based vesting conditions.
The Howsman Employment Agreement entitles Mr. Howsman to certain severance benefits in the event of a Qualified Termination (including by reason of the Company not renewing the term). In such event, subject to enterMr. Howsman signing and not revoking a release of claims in favor of the Company, the Company would pay him, among other things, continued annual base salary for a 12-month period, subsidized health insurance premiums for 12 months, STI earned for the prior year, if not paid, and, if terminated on or after April 1, a pro-rated STI based on actual results. If the Qualified Termination occurred on or prior to December 31, 2019, or within 90 days before or two years after a Change in Control of the Company, then the Company would pay or cause to be paid to Mr. Howsman the following additional benefits: (i) his target STI for the fiscal year in which the termination occurs (without pro-ration), and (ii) his then-outstanding equity incentive awards would become vested in full (without pro-ration), with any specified performance objectives deemed to be satisfied at the “target” level. The Company would pay lower amounts of severance benefits if Mr. Howsman’s employment were terminated due to death or Disability. The Company has also agreed to reimburse Mr. Howsman for certain reasonable travel and other out-of-pocket expenses, including certain costs associated with his relocation to the Company’s headquarters office in Tucker, Georgia.
Offer Letters
In connection with his appointment as Vice President, Administration, General Counsel and Corporate Secretary, effective August 2, 2017, Mr. Wheelock received an annual base salary of $260,000 and a STI bonus opportunity with a target of 50% of annual base salary. Mr. Wheelock was also entitled to severance equal to 12 months of annual base salary.
In connection with his initial appointment as Vice President, Finance in October 2016, Mr. Jolly entered into an offer letter with the Company, dated November 8, 2016. Under the terms of the offer letter, Mr. Jolly was appointed Vice President, Finance with the expectation that he would be appointed Chief Accounting Officer and Principal Accounting Officer following the Company’s filing of its Annual Report on Form 10-K for the year ending December 31, 2015 containing restated historical financial information. The offer letter further employment agreementsprovided that Mr. Jolly would receive an annual base salary of $260,000 and a
target STI opportunity of 40% of annual base salary. Mr. Jolly received a 2016 LTI award of 19,000 performance-based RSUs and time-based RSUs with new hires, including named executive officers, ina delivered value of $43,750. Mr. Jolly was also granted a one-time payment of (a) $20,000 on the first payroll date after he joined the Company; and (b) an additional 2,500 performance-based RSUs and 2,500 time-based RSUs.
In order to maintainencourage Mr. Howsman’s full attention and dedication to the organizational flexibility neededCompany in his role as interim principal financial officer prior to his March 2017 retirement, he received the following retention incentives in March 2016: (i) a retention bonus opportunity equal to $125,000, provided that he remained continuously employed with the Company and its affiliates until the date the Company completed and made an initial filing of its restated financials for required periods prior to 2015 and the original filing of its 2015 financials, or, if earlier, March 31, 2017, which was in lieu of any incentive opportunity under the 2016 STI program; (ii) a discretionary bonus of $150,000 that was paid in March 2016, subject to repayment if he voluntarily resigned from the Company and its affiliates, or if the Company terminated his employment for “cause,” in either case prior to the vesting date of the retention bonus; (iii) reimbursement of up to $3,700 for relocation costs and of up to $3,000 per month for temporary living expenses through March 31, 2017 (or, if earlier, through the date of termination of employment); and (iv) the opportunity to accrue vacation time in excess of the maximum limits imposed under the Company’s vacation policy. After being re-hired as an employee and in connection with his appointment as Chief Accounting Officer, on December 11, 2017, Mr. Howsman entered into an offer letter with the Company. The offer letter provided that Mr. Howsman would receive an annual base salary of $260,000 and a target STI opportunity of 40% of annual base salary. Mr. Howsman also received a cash retention incentive equal to 40% of annual base salary if certain goals were achieved. Finally, Mr. Howsman was entitled to severance equal to 6 months of base salary and a housing allowance of up to $2,200 per month. This terms of the offer letter were subsequently replaced by the terms of the Howsman Employment Agreement, as described above.
Executive Severance Plan
In 2017, Mr. Wheelock participated in the continued evolution of our business.
Employment Agreements
We have entered into employment agreements with Messrs. Ramírez and Pagliara,Executive Severance Plan (“ESP”), which entitle thementitled him to severance benefits in the event of an involuntary termination of employment without "cause,"other than for “cause” or a termination by the executive for "good reason," (each as defined in his respective employment agreement) or“good reason.” The severance benefits equal: (i) salary continuation of one year, (ii) payment of the STI earned for the fiscal year preceding the date of termination to the extent not previously paid and (iii) if the Company elects not to renewdate of termination occurs at least three full calendar months after the termbeginning of his agreement.the Company’s fiscal year, a pro-rated STI for the year of termination based on actual performance results for the entire year. In exchange for the severance benefits, the named executive officersMr. Wheelock must sign a release of claims against us. The ESP is designed to standardize the Company,
agree notseverance protections provided to disclose Company confidential information,our executive officers and agree not to compete againstreduce the Company or solicit its employees or customers. These provisions protectneed for individual employment agreements for executives other than the Company's interests and help to ensure its long-term success.
Offer Letter with Ms. Sherrod-CampanizziChief Executive Officer going forward.
We have a letter agreement with Ms. Sherrod-Campanizzi which provides that upon a termination without cause by the Company and the execution of a release of claims against the Company, she would be entitled to receive severance benefits.
Offer Letter with Ms. BarthSection 5: Additional Compensation Matters
We have a letter agreement with Ms. Barth which provides that upon a termination without cause by the Company and the execution of a release of claims against the Company, she would be entitled to receive severance benefits.
Severance Arrangement with Mr. Guba
In connection with Mr. Guba's appointment and the Company's strategic decision to not enter into employment agreements with new hires, Mr. Guba entered into a "severance arrangement" with the Company. Pursuant to his severance arrangement, in the event that Mr. Guba's employment were terminated without "cause" or he resigned for "good reason" (both as defined in his severance arrangement), Mr. Guba would be eligible to receive severance benefits. Reduced severance levels would be available in the event of his death or "disability" (as defined in his severance arrangement). In exchange for the severance benefits, Mr. Guba must sign a release of claims against the Company, agree not to disclose Company confidential information, and agree not to compete against the Company or solicit its employees or customers.
Change in Control Protections
The RSUs granted to our named executive officers provide for full accelerated vesting of all RSUs (including both time-based and performance-based RSUs) if the Company undergoes a change in control. The committee believes that immediate vesting of RSUs upon a change in control is appropriate on the basis that our named executive officers should receive the full benefit of RSUs if the Company is sold or otherwise comes under the control of an outside party.
The named executive officers are not entitled to enhanced cash severance benefits as the result of a change in control, and we do not provide excise tax gross-up protection with respect to any benefits received in connection with a change in control.
Severance for Terminating Executives
We entered into severance agreements with Mr. Willis and Mr. Glover in connection with the termination of their employment. The severance agreements generally tracked the severance provisions of their employment agreements and re-affirmed the application of the restrictive covenants. We also entered into a consulting agreement with each of Mr. Willis and Mr. Glover to facilitate a smooth transition of their duties.
We entered into a severance agreement with Mr. Robuck in connection with his termination of employment. This agreement, however, was subsequently rescinded.
Please refer to the "Estimated Payments Upon Termination Without Cause or Related to a Change in Control" section of this proxy statement on page 39 for information regarding potential payments and benefits, if any, that each named executive officer would be entitled to receive under certain terminations (or, with respect to Messrs. Willis and Glover, the benefits they actually received upon termination).
Retirement and Welfare Benefits
We make available to each of our named executive officers certain benefits that are generally available to all salaried employees, including medical, dental, vision, life, accidental death and dismemberment, travel accident and shortshort- and long-term disability insurance. All of our named executive officers are entitled to participate in the Company'sour 401(k) plan and its flexible spending benefit plan and are entitled to four weeks of paid vacation each year. We make theseThese benefits are made available so that we can provide a competitive compensation package to our salaried employees and our named executive officers.
Perquisites
We provided our named executive officers modest perquisites in 2013, such as (i) reimbursements for tax return preparation, which we believe are important to the financial stability of our executive team; (ii) reimbursement of country club dues for each of Messrs. Glover and Robuck, which was included in each executive's employment agreement (the Compensation Committee has decided to discontinue this practice for new hires); and (iii) an automobile allowance for Mr. Robuck. For more information about the perquisites provided in 2013 to each named executive officer, please refer to the "All Other Compensation" column of and the related footnotes to the "Summary Compensation Table" on page 31.
For more information about the perquisites provided in 2013 to our named executive officer, please refer to the "All Other Compensation" column of and the related footnotes to the "Summary Compensation Table" on page 31.
Stock Ownership Guidelines
In 2011, the Compensation Committee approved stock ownership guidelines for the Company'sour executive officers in order to further align the interests of the Company'sour executive officers with the interests of the Company'sour other stockholders. Under the guidelines, each named executive officer is expected to accumulate the lesser of the fixed and variable number of shares as follows:
Position | Fixed Number | Variable Number | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Chief Executive Officer | 75,000 | 3x Base Salary | ||||||||
Other Named Executive Officers | 40,000 | 2x Base Salary | ||||||||
The target date for the existing named executive officers to meet these stock ownership guidelines is January 1, 2015 and the target date for any new named executive officers to meet these stock ownership guidelines is five years from the date of his or her appointment or hire date. For purposes of these guidelines, the named executive officer will be deemed to "own"“own” shares of the Company'sour Common Stock that are beneficially owned by such person, including shares underlying equity awards that will pay out within 60 days of the applicable measuring date.
The following table summarizes the progress of our named executive officers toward satisfying the applicable stock ownership requirement as of March 6, 2014:
Named Executive Officer | Ownership Guidelines for Shares or Units by Target Date (based on 3/6/2014 stock price) | Beneficial Ownership of Shares or Units (as of 3/6/2014) | |||||
|---|---|---|---|---|---|---|---|
L. Ramírez* | 75,000 | 18,181 | |||||
R. Guba* | 4,594 | 1,556 | |||||
P. Sherrod-Campanizzi | 30,832 | 12,553 | |||||
T. Pagliara | 32,335 | 46,711 | |||||
M. Barth | 31,138 | 1,158 | |||||
*Mr. Ramírez was hired on 7/1/2012, Mr. Guba was hired on 11/18/2013 and Ms. Barth was hired on 11/12/12. They have five years from the date of hire to achieve the required ownership levels.
The Compensation Committee will periodically review and adjust, if appropriate, the fixed number of shares based on stock price, adjustments to compensation, evolving market practices and such other factors as it deems appropriate. In establishing a named executive officer's total direct compensation each year, the Compensation Committee may consider each named executive officer's compliance with these guidelines.
Claw-Back PolicyRisk Assessment
In 2010, the Board approved a compensation recovery policy applicable to executive officers
We believe that in general, provides that for every STI or other performance-based compensation awarded to a named executive officer on or after January 1, 2011, the named executive officer must repay or forfeit compensation received by him or her from such award if:
•the payment, granting or vesting of such compensation was based on the achievement of financial results that were subsequently the subject of a restatement of the Company's consolidated financial statements;•the Board determines in its sole discretion that the named executive officer engaged in fraud or misconduct that caused or contributed to the need for the restatement;•the named executive officer received more compensation than he or she would have than if the financial results had been properly reported; and•the Board determines in its sole discretion that it is in the best interests of the Company and its stockholders for the named executive officer to repay or forfeit all or any portion of the compensation.
The claw-back policy supports the accuracy of our financial statements and, in conjunction with our stock ownership guidelines, helps to align the interests of our named executive officers with those of our stockholders. In light of our pay-for-performance culture, we felt strongly that our executives should be held to this higher standard of accountability.
Risk Assessment
The Company believes that its compensation policies and practices for all employees, including executive officers, do not create risks that are reasonably likely to have a material adverse effect on the Company.us. Although a significant portion of our executive compensation program istraditionally has been performance-based, we have focused on aligning our compensation policies with the long-term interests of our stockholders
and avoiding rewards that could create excessive or inappropriate risks to the Company, as evidenced by policies and practices below.Company.
•Balanced Mix of Compensation Elements.Our executive compensation program reflects an appropriate mix of compensation elements and balances current and long-term performance objectives, cash and equity compensation, and risks and rewards associated with executive roles.•Balanced Mix of Performance Metrics.We do not use highly-leveraged performance goals. Instead, incentive opportunities are based on a balanced mix of performance metrics that promote disciplined progress toward long-term goals, and all payouts are capped at a pre-established percentage of the target payment opportunity.•Scrutinized Financial Goals and Results.Our financial goals and results directly tie to our audited financial statements, subject to adjustments outlined in our incentive plans. These results are highly scrutinized by our finance and accounting departments as well as our external auditor.•Discretion to Adjust Compensation.We retain discretion to adjust compensation levels based on the quality of Company performance, individual performance and adherence to the Company's ethics and compliance programs, among other things.•Focus on Long-Term Horizon.Our LTI opportunities generally vest over a period of three to four years in order to focus our executives on long-term performance and enhance retention.•Outside Consultants.Utilizing the expertise of outside consultants, we evaluate our compensation programs and practices against our established peer group to confirm that our compensation programs are consistent and competitive with market practice.•Risk Mitigating Strategies.As described above, we have adopted several risk mitigating strategies, such as stock ownership guidelines and a "claw-back" policy.
Risk Reducing Policies and Practices
Section 162(m) of the Tax Code
Section 162(m) of the Internal Revenue Code (“Section 162(m)”) provides that the Companywe generally may not deduct, for federal income tax purposes, annual compensation in excess of $1 million paid to certain named executive officers. Certain "performance-based compensation"“performance-based compensation” paid pursuant to stockholder approved plans is not subject to the deduction limit.
Given our net operating loss carry forwards available to offset taxable income, In making compensation decisions in 2017 and prior years, the Compensation Committee has notoften sought to structure certain equity awards with the intention that they would be exempt from the $1 million deduction limit as “performance-based compensation.” However, the committee never adopted a policy that requireswould have required all compensation to be deductible. In this regard,deductible, because the Compensation Committee wantscommittee wanted to preserve the ability to award cash or equitypay compensation to an executive that isour executives in appropriate circumstances, even if such compensation would not be deductible under Section 162(m) if we believe.
The Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was enacted on December 22, 2017, includes a number of significant changes to Section 162(m), including the repeal of the performance-based compensation exemption and the expansion of the definition of named executive officers who are subject to the deduction limit (for example, by including the chief financial officer and certain former named executive officers as covered employees). As a result of these changes, except as otherwise provided in the transition relief provisions of the Tax Act, compensation paid to any of our named executive officers generally will not be deductible in 2018 or future years, to the extent that it is in our stockholders' best interests.exceeds $1 million.
COMPENSATION COMMITTEE REPORT
The Compensation Committee, comprised of independent directors, reviewed and discussed the above Compensation Discussion and Analysis with the Company'sCompany’s management. Based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statementstatement.
Compensation Committee:
David A. B. Brown (Chair)*
Charles Macaluso*
Robert B. Mills*
* Effective April 15, 2018, Mr. Brown became the Chair of the Compensation Committee and incorporated in our Annual Report onMr. Macaluso and Mr. Mills became members of the Compensation Committee. At the time of filing of the 2017 Form 10-K, for the fiscal year ended December 31, 2013.
Compensation Committee:TerenceCommittee was comprised of Linda Goodspeed (Chair), David A. B. Brown and Gary J. Cryan (Chair)Carl BartoliEugene I. DavisFrank E. Williams, Jr.Taylor. The 2017 Form 10-K states that each of the foregoing reviewed and discussed the Compensation Discussion and Analysis included in the 2017 Form 10-K with the Company’s management, and based on that review and discussion, the Compensation Committee (as then comprised) recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the 2017 Form 10-K.
20132017 SUMMARY COMPENSATION TABLE
The following table presents information regarding the compensation earned by our Chief Executive Officer, Chief Financial Officer and the next three highest paidnamed executive officers in each of 2011, 20122017 and 2013. We sometimes refer2016, as applicable.
Name and Principal Position(5) |
| Fiscal |
| Salary |
| Bonus |
| Stock |
| Non-Equity |
| All Other |
| Total |
|
Craig E. Holmes |
| 2017 |
| 412,198 |
| — |
| 336,320 |
| 337,500 |
| 12,564 |
| 1,098,582 |
|
Co-President and Co-Chief Executive Officer |
| 2016 |
| 404,875 |
| — |
| 484,858 |
| 123,608 |
| 9,822 |
| 1,023,163 |
|
Tracy D. Pagliara |
| 2017 |
| 404,947 |
| — |
| 287,416 |
| 337,500 |
| 11,928 |
| 1,041,791 |
|
Co-President and Co-Chief Executive Officer |
| 2016 |
| 392,135 |
| — |
| 445,093 |
| 119,719 |
| 13,098 |
| 970,045 |
|
Erin Gonzalez |
| 2017 |
| 229,620 |
| 25,000 |
| 31,571 |
| 137,500 |
| 6,115 |
| 429,806 |
|
Chief Financial Officer and Principal Financial and Accounting Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles E. Wheelock |
| 2017 |
| 221,673 |
| — |
| 35,282 |
| 32,448 |
| 9,000 |
| 298,403 |
|
Vice President, Administration, General Counsel & Corporate Secretary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terence J. Cryan |
| 2017 |
| 384,739 |
| — |
| 842,748 |
| 105,780 |
| 1,106,572 |
| 2,439,839 |
|
Former President and Chief Executive Officer |
| 2016 |
| 689,876 |
| — |
| 1,377,032 |
| 259,223 |
| 17,605 |
| 2,343,736 |
|
Timothy M. Howsman |
| 2017 |
| 107,085 |
| 125,000 |
| — |
| 3,894 |
| 147,809 |
| 383,788 |
|
Former Chief Financial Officer, Products |
| 2016 |
| 281,875 |
| 150,000 |
| 79,582 |
| — |
| 39,132 |
| 550,589 |
|
Mark F. Jolly |
| 2017 |
| 147,000 |
| — |
| — |
| 15,077 |
| 260,800 |
| 422,877 |
|
Former Chief Accounting Officer and Principal Accounting Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This column reflects signing or retention bonuses paid to these individuals collectivelyour named executive officers for the applicable year.
(2) This column does not reflect the value of stock awards that were earned by the named executive officers during each of the years listed above. Rather, as our "named executive officers."
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Luis M. Ramírez | 2013 | 550,000 | — | 705,973 | 88,000 | 8,750 | 1,352,723 | |||||||||||||||
Chief Executive Officer | 2012 | 275,000 | — | 451,947 | 177,497 | 117,537 | 1,021,981 | |||||||||||||||
Raymond K. Guba(4) | 2013 | 45,000 | 64,000 | (9) | 267,913 | — | — | 376,913 | ||||||||||||||
Chief Financial Officer | ||||||||||||||||||||||
Penny Sherrod-Campanizzi | 2013 | 302,000 | 74,074 | (10) | 148,796 | 133,686 | 36,207 | 694,763 | ||||||||||||||
President of Electrical Solutions | ||||||||||||||||||||||
Tracy D. Pagliara(5) | 2013 | 316,725 | — | 277,180 | 36,894 | 7,045 | 637,844 | |||||||||||||||
General Counsel, Secretary, and | 2012 | 316,725 | 100,000 | (11) | 296,968 | 186,878 | 12,143 | 912,714 | ||||||||||||||
Vice President of Business Development | 2011 | 309,000 | — | 225,667 | 255,163 | 50,407 | 840,237 | |||||||||||||||
Melanie R. Barth | 2013 | 305,000 | — | 197,584 | 32,050 | — | 534,634 | |||||||||||||||
Chief Human Resources Officer | ||||||||||||||||||||||
David L. Willis(6) | 2013 | 270,656 | 199,420 | (12) | 453,418 | — | 376,974 | 1,300,469 | ||||||||||||||
Former Chief Financial Officer | 2012 | 306,800 | — | 653,518 | 174,051 | 83,196 | 1,217,565 | |||||||||||||||
| 2011 | 294,998 | — | 633,446 | 286,933 | 42,774 | 1,258,151 | ||||||||||||||||
Dean J. Glover(7) | 2013 | 246,096 | 156,000 | (13) | 399,326 | — | 399,335 | 1,200,757 | ||||||||||||||
Former President of Products | 2012 | 319,925 | — | 554,280 | 146,771 | 17,941 | 1,038,917 | |||||||||||||||
Division | 2011 | 312,120 | — | 521,847 | 355,783 | 15,439 | 1,205,189 | |||||||||||||||
Kenneth W. Robuck(8) | 2013 | 204,259 | — | 347,090 | — | 56,544 | 607,892 | |||||||||||||||
Former President of Services | 2012 | 336,122 | — | 599,386 | 167,964 | 22,229 | 1,125,701 | |||||||||||||||
Division | 2011 | 327,924 | — | 700,791 | 269,859 | 23,325 | 1,321,899 | |||||||||||||||
(1)Thisrequired by applicable SEC rules, this column reflects the aggregate grant date fair value of time-based RSUs and performance-based RSUs granted to our named executive officers in the applicable year, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718—Compensation—Stock Compensation (“FASB ASC Topic718. For 2013, the Compensation Committee approved a RSU award for each of the named executive officers. One-third of each 2013 RSU award vests based on continued employment, one-third of the RSU award vests based on both continued employment and the satisfaction of a three-year company-specific performance goal ("performance-based RSUs") and the other one-third of the RSU awards vests based on both continued employment and the satisfaction of a three-year market-based performance goal ("market-based RSUs"718”). The grant date fair value of the performance-based RSUs was based on the probable outcome of the applicable performance conditions as of the date of grant. The grant date fair value ofeach of those awards,the performance-based RSUs for 2017, assuming that the highest level of performance would be achieved,iswas as follows: for Mr.Ramirez: $393,525;Holmes, $252,240; for Mr.Guba; $164,465;Pagliara, $215,559; for Ms.Sherrod-Campanizzi: $64,630;Gonzales, $23,673; for Mr.Pagliara: $105,720;Wheelock, $26,458; and forMs. Barth: $122,459. The grant date fair value of the market-based RSUs was basedMr. Cryan, $632,061. For more detail on thetarget outcomeseparate grants ofthe applicable performance conditions as of the date of grant which is the same grant date fair value based on the highest level of performance in accordance with FASB ASC Topic 718. This column also reflects the aggregate grant date fair value of certain legacytime-based RSUs and performance-based RSUs,that are described in more detail inplease refer to thetable "2013Grants of Plan-BasedAwards" on page 34. For 2013, the amounts shownAwards table below inthis column for Messrs. Willis and Glover also include the incremental fair value, computed in accordance with FASB ASC Topic 718,“2017 Grants ofthe accelerated vesting of their time-based and legacy performance-based RSUs that otherwise would have vested on March 31, 2014 had they not resigned.Plan-Based Awards.” For a discussion of the assumptions we made in valuing thestock awards, see
"Note 2—time-based RSUs and performance-based RSUs, please refer to “Note 3—Summary of Significant Accounting Policies—Stock-Based Compensation Expense" inExpense” to the notes to our consolidated financial statements containedincluded in our Annual Report onthe 2017 Form 10-K for the year ended December 31, 2013.10-K.
(2)(3)This column reflects amounts earned by our named executive officers under our
short-term incentive plan.STI plan for the applicable year. The terms of the plan are described more fully inthe "Compensationabove in “Executive Compensation—Compensation Discussion andAnalysis" sectionAnalysis—Section 2: Elements ofthis proxy statement beginning on page 18.(3)- Total Direct Compensation—Short-Term Incentive Compensation.” The 2016 STI amount payable to Messrs. Holmes and Pagliara was settled 50% in cash and 50% in fully vested shares. Messrs. Holmes and Pagliara and Ms. Gonzalez each agreed to defer 75.04% of their 2017 STI payment, generally until September 2018 (with each of Mr. Holmes and Ms. Gonzalez receiving his or her amounts in installments through that date, and Mr. Pagliara’s is expected to be paid during the fourth quarter of 2018).
(4)The amounts in the
"AllAll OtherCompensation"Compensation columnare valued on the basis of the aggregate incremental cost to us andconsist of the following compensation items for2013:2017: for Mr.Ramírez,Holmes, 401(k) matchingcontributionscontribution of$8,750; for Ms. Sherrod-Campanizzi, 401(k) matching contributions$11,844 and cell phone reimbursement of$8,750 and relocation expenses of $27,457 for the reasonable expenses incurred in her relocation to the South Bend, Indiana area, including moving and storage expenses and temporary housing;$720; for Mr. Pagliara, 401(k) matching contributions of$7,045; for Mr. Willis,$9,653 and tax preparation fees of$200,$2,275; for Ms. Gonzalez, 401(k) matching contributions of$7,080, one-year of salary of $306,800, consulting fees of $17,898, accrued vacation of $30,804, and continuation of benefits of $14,192;$6,115; for Mr.Glover, tax preparation fees of $500,Wheelock, 401(k) matching contributions of$7,383, country club dues of $7,893, one-year of salary of $320,000, consulting fees of $25,000, accrued vacation of $24,256, continuation of benefits of $14,303;$9,000; for Mr.Robuck, tax preparation fees of $2,760,Cryan, 401(k) matching contributions of$10,200, car allowance$12,000, reimbursement for airline tickets, ground transportation and parking for trips to New York City of$4,800$9,767, attorney fees of $7,500, moving expenses of $25,000, subsidized COBRA premiums of $17,490 andaccrued vacationseverance payments of$38,784. (4)- $1,034,815; for Mr.
Guba was appointedHowsman, 401(k) matching contributions of $2,168, cell phone reimbursement of $180, living expense reimbursements of $4,523 and consulting payments of $140,938; and for Mr. Jolly, 401(k) matching contributions of $800 and severance payments of $260,000.(5) Titles indicated in the table are those held by each named executive officer as of December 31, 2017, while serving as a named executive officer. During the year ended December 31, 2017 and through the Record Date, we experienced a number of changes in our management, including our named executive officers. Effective March 16, 2017, Mr. Howsman retired from his position as Chief Financial Officer, Products, and Mr. Holmes was appointed Chief Financial Officer and principal financial officer. Effective July 26, 2017, Mr. Cryan resigned from his positions as President, Chief Executive Officer and director. Upon his resignation, Mr. Holmes and Mr. Pagliara were appointed Co-Presidents, Co-CEOs and directors, and Mr. Wheelock was appointed Vice President, Administration, General Counsel and Corporate Secretary. Mr. Jolly ceased to be employed as Chief Accounting Officer effective
November 18, 2013. The amount reported inAugust 1, 2017. Effective August 2, 2017, Ms. Gonzalez was appointed Chief Financial Officer and principal financial and accounting officer. Effective April 13, 2018, Mr. Holmes resigned from his"Salary" column includes $8,836 in consulting fees earned for services performed for the Company from October 16, 2013 through November 14, 2013. (5)Effective March 7, 2014,positions as Co-President and Co-CEO, and Mr. Pagliara was appointedas the Company's Chief Administrative Officer, General Counsel and Secretary.(6)Mr. Willis resigned as our Chief Financial Officer effective November 18, 2013.(7)Mr. Glover resigned as our President of Products Division effective September 30, 2013.(8)Mr. Robuck resigned as our President of Services Division effective July 1, 2013 and resigned from the Company on July 31, 2013.(9)Mr. Guba received a guaranteed bonus for the final quarter of 2013.(10)Ms. Sherrod-Campanizzi received a discretionary cash bonus in 2013 for her promotion to President of Electrical Solutions.(11)Mr. Pagliara received a discretionary cash bonus for successful completion of our 2012 acquisitions and his efforts with respect to our strategic plan.(12)In connection with Mr. Willis' resignation, he received a pro-rated annual incentive for 2013 assuming that the "target" performance level had been achieved. We were required to pay this pro-rated annual incentive pursuant to the terms of his employment agreement that was entered into at the time we emerged from bankruptcy in 2008.(13)In connection with Mr. Glover's resignation, he received a pro-rated annual incentive for 2013 assuming that the "target" performance level had been achieved. We were required to pay this pro-rated annual incentive pursuant to the terms of his employment agreement that was entered into at the time we emerged from bankruptcy in 2008.
Employment Agreements. The key terms of the employment agreements with each of our named executive officers are set forth below.
Effective as of July 1, 2012, we entered into a two-year employment agreement with Mr. Ramírez, our President and Chief Executive Officer, which shall automatically renew for successive one-year terms if not otherwise terminated by either party in accordance with the employment agreement. We also agreed to nominate him for election to our Board of Directors at each stockholder meeting at which the directors are elected during his term.
Pursuant to his employment agreement, Mr. Ramírez receives a salary of no less than $550,000 per year and is entitled to an annual bonus opportunity under our short-term incentive plan, with a target bonus equal to 80 percent, and a maximum bonus equal to 160 percent, of his base salary. The Company also granted Mr. Ramírez 33,500 restricted share unitsOfficer. Effective May 29, 2018, Ms. Gonzalez resigned from her roles as of July 1, 2012, equally allocated between time-based restricted share units that generally vest in four equal annual installments commencing on March 31, 2013, and performance-based restricted share units that generally vest in four equal annual installments commencing on March 31, 2013, provided that the company achieves a pre-established performance goal with respect to the prior fiscal year. Future equity grants will be subject to the discretion of the Compensation Committee. Mr. Ramírez is eligible to participate in our 401(k) and flexible benefit plans and is entitled to four weeks of paid vacation per year. We also provide to Mr. Ramírez life, accidental death and dismemberment, short and long-term disability, business travel accident insurance, medical and dental insurance, cover the costs of certain reasonable relocation expenses, and reimburse his documented business expenses.
We also entered into an employment agreement with Tracy D. Pagliara on March 22, 2010. The agreement had an initial term of two years that automatically renews for a one-year term at the end of the initial or additional employment term, unless we have provided him with advance written notice of termination. Pursuant to his employment agreement, we pay Mr. Pagliara a base salary and provide him an annual cash bonus opportunity.
The employment agreements with Messrs. Ramírez and Pagliara also contain customary confidentiality, nonsolicitation and noncompetition covenants. The nonsolicitation and noncompetition obligations continue for twelve months after termination. The confidentiality obligations continue indefinitely.
On October 1, 2012, we entered into an offer letter with Ms. Sherrod-Campanizzi, which set forth her title, her base salary at $302,000 and target short-term incentive opportunity at 55% of base salary.
On November 12, 2012, we entered into an offer letter with Ms. Barth, which set forth her title, her base salary at $305,000 and target short-term incentive opportunity at 55% of base salary.
David L. Willis' Employment Agreement and Separation Agreement. Effective as of January 28, 2008, we entered into an employment agreement with Mr. Willis, our former Senior Vice President and Chief Financial Officer withand principal financial and accounting officer, and Mr. Howsman was appointed interim Chief Financial Officer and principal financial and accounting officer. Mr. Howsman had been serving as the Company’s Chief Accounting Officer since December 11, 2017, in which position he was not an initial term of two years that automatically renewed for one-year terms at the end of the initial or additional employment term.
Pursuant to his employment agreement,executive officer. Mr. Willis received a salary of no less than $253,000 per year and was entitled to an annual bonus opportunity under our short-term incentive plan, with a target bonus equal to 55 percent, and a maximum bonus equal to 110 percent, of his base salary. Mr. Willis was also eligible to participate in our 401(k) and flexible benefit and profit sharing plans and entitled to four weeks of paid vacation per year. We also provided to Mr. Willis medical, dental, life, accidental death and dismemberment, short and long-term disability, business travel accident insurance, and reimbursed his documented business expenses.
On November 18, 2013, Mr. Willis entered into a separation agreement with the Company, under which he resigned from all positions at the Company effective as of November 18, 2013. For a summary of his severance benefits, please see the "Estimated Payments Upon Termination or Related to a Change in Control" section on page 39.
Dean Glover's Employment Agreement and Separation Agreement. Effective as of September 1, 2008, we entered into an employment agreement with Mr. Glover, our former Senior Vice President and President of the Products Division, with an initial term of two years that automatically renewed for one-year terms at the end of the initial or additional employment term.
Pursuant to his employment agreement, Mr. Glover received a salary of no less than $306,000 per year and was entitled to an annual bonus opportunity under our short-term incentive plan, with a target bonus equal to 65 percent, and a maximum bonus equal to 130 percent, of his base salary. Mr. Glover was also eligible to participate in our 401(k) and flexible benefit and profit sharing plans and entitled to four weeks of paid vacation per year. We also provided to Mr. Glover medical, dental, life, accidental death and dismemberment, short and long-term disability, business travel accident insurance, and reimbursed his documented business expenses.
On September 20, 2013, Mr. Glover entered into a separation agreement with the Company, under which he resigned from all positions at the Company effective as of September 30, 2013. For a summary of his severance benefits, please see the "Estimated Payments Upon Termination or Related to a Change in Control" section on page 39.
Kenneth W. Robuck's Employment Agreement and Separation Agreement. Effective as of October 1, 2007, we entered into an employment agreement with Mr. Robuck, our former Senior Vice President and President of the Services Division, with an initial term of two years that automatically renewed for one-year terms at the end of the initial or additional employment term.
Pursuant to his employment agreement, Mr. Robuck received a salary of no less than $307,650 per year and was entitled to an annual bonus opportunity under our short-term incentive plan, with a target bonus equal to 55 percent, and maximum bonus equal to 110 percent, of his base salary. Mr. Robuck was also eligible to participate in our 401(k) and flexible benefit and profit sharing plans and entitled to four weeks of paid vacation per year. We also provided to Mr. Robuck medical, dental, life, accidental death and dismemberment, short and long-term disability, business travel accident insurance, and reimbursed his documented business expenses.
On June 24, 2013, Mr. Robuck entered into a separation agreement with the Company, under which he resigned from all positions at the Company effective as of July 1, 2013. This agreement, however,Howsman was subsequently cancelled.appointed Chief Financial Officer on July 31, 2018.
20132017 GRANTS OF PLAN-BASED AWARDS
The following table presents information relatingrelated to short-term incentivesSTI and RSUsequity awards granted to our named executive officers in 2013.2017.
For 2013, the Compensation Committee granted cash bonus opportunities to each named executive officer under the short-term incentive plan.
|
|
|
| Estimated Future Payouts Under |
| Estimated Future Payouts Under Equity |
| Grant Date Fair |
| ||||||||||
Name |
| Grant Date |
| Threshold |
| Target |
| Maximum |
| Threshold |
| Target |
| Maximum |
| Time-Based |
|
| |
Craig E. Holmes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Incentive Plan |
| N/A |
| 101,250 |
| 337,500 |
| 675,000 |
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive(2) |
| 4/17/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
| 39,107 |
| 168,160 |
|
Long-Term Incentive(3) |
| 4/17/2017 |
|
|
|
|
|
|
| 977 |
| 39,107 |
| 58,661 |
|
|
| 168,160 |
|
Tracy D. Pagliara |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Incentive Plan |
| N/A |
| 101,250 |
| 337,500 |
| 675,000 |
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive(2) |
| 4/17/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
| 33,421 |
| 143,710 |
|
Long-Term Incentive(3) |
| 4/17/2017 |
|
|
|
|
|
|
| 8,355 |
| 33,420 |
| 50,130 |
|
|
| 143,706 |
|
Erin Gonzalez |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Incentive Plan |
| N/A |
| 41,250 |
| 137,500 |
| 275,000 |
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive(2) |
| 4/17/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
| 3,671 |
| 15,785 |
|
Long-Term Incentive(3) |
| 4/17/2017 |
|
|
|
|
|
|
| 918 |
| 3,671 |
| 5,507 |
|
|
| 15,785 |
|
Charles E. Wheelock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Incentive Plan |
| N/A |
| 39,000 |
| 130,000 |
| 260,000 |
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive(2) |
| 4/17/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
| 4,103 |
| 17,643 |
|
Long-Term Incentive(3) |
| 4/17/2017 |
|
|
|
|
|
|
| 1,026 |
| 4,102 |
| 6,153 |
|
|
| 17,639 |
|
Terence J. Cryan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Incentive Plan |
| N/A |
| 92,337 |
| 307,791 |
| 615,582 |
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive(2) |
| 4/17/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
| 97,994 |
| 421,374 |
|
Long-Term Incentive(3) |
| 4/17/2017 |
|
|
|
|
|
|
| 24,499 |
| 97,994 |
| 146,991 |
|
|
| 421,374 |
|
Timothy M. Howsman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Incentive Plan |
| N/A |
| 12,850 |
| 42,834 |
| 85,668 |
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive(2) |
| 4/17/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
| — |
| — |
|
Long-Term Incentive(3) |
| 4/17/2017 |
|
|
|
|
|
|
| — |
| — |
| — |
|
|
| — |
|
Mark F. Jolly |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Incentive Plan |
| N/A |
| 31,200 |
| 104,000 |
| 208,000 |
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive(2) |
| 4/17/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
| — |
| — |
|
Long-Term Incentive(3) |
| 4/17/2017 |
|
|
|
|
|
|
| — |
| — |
| — |
|
|
| — |
|
The Compensation Committee also approved a RSU award for each of the named executive officers. One-third of each 2013 RSU award vests based on continued employment ("time-based RSUs" or "TRSUs"), one-third of the RSU award vests based on both continued employment and the satisfaction of a three-year company-specific performance goal ("performance-based RSUs" or "PRSUs") and the other one-third of the RSU award vests based on both continued employment and the satisfaction of a three-year market-based performance goal ("market-based RSUs" or "MRSUs").
In addition, Mr. Ramírez received a grant of RSUs in 2012, Ms. Sherrod-Campanizzi received grants of RSUs in 2011 and 2012, and Mr. Pagliara received grants of RSUs in 2010, 2011 and 2012 (collectively, the "legacy performance-based RSUs" or "LRSUs"). These performance awards were segregated into four separate vesting installments, each of which was dependent upon the satisfaction of separate annual performance goals for each installment. For 2013, the performance goal was our annual operating income target under the short-term incentive plan. Because the performance goals are set each year, we consider each installment as a separate annual grant for purposes of reporting the
value of stock awards. The LRSUs listed below are allocated to the 2013 performance period and therefore were treated as granted in 2013.
| | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | Grant Date Fair Value of Stock Awards(4) ($) | |||||||||||||||||||||||||||
Name | Grant Date | Approval Date | Type of Award | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||
Luis M. Ramírez | |||||||||||||||||||||||||||||||
Short-Term Incentive Plan | N/A | N/A | STI | 220,000 | 440,000 | 880,000 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan | 3/28/2013 | 3/28/2013 | TRSUs | 11,167 | 196,763 | ||||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | MRSUs | 5,583 | 11,166 | 22,332 | 241,521 | |||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | PRSUs | 5,584 | 11,167 | 22,334 | 196,763 | |||||||||||||||||||||||||
| 3/5/2013 | 7/1/2012 | LRSUs | 2,094 | 4,187 | 70,928 | (5) | |||||||||||||||||||||||||
Raymond K. Guba |
|
|
| ||||||||||||||||||||||||||||
Short-Term Incentive Plan | N/A | N/A | STI | 64,000 | N/A | ||||||||||||||||||||||||||
2011 Equity Incentive Plan | 11/18/2013 | 11/18/2013 | TRSUs | 4,667 | 89,653 | ||||||||||||||||||||||||||
| 11/18/2013 | 11/18/2013 | MRSUs | 2,333 | 4,666 | 9,332 | 88,607 | |||||||||||||||||||||||||
| 11/18/2013 | 11/18/2013 | PRSUs | 2,334 | 4,667 | 9,334 | 89,653 | |||||||||||||||||||||||||
Penny Sherrod-Campanizzi |
|
|
| ||||||||||||||||||||||||||||
Short-Term Incentive Plan | N/A | N/A | STI | 83,050 | 166,100 | 332,200 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan | 3/28/2013 | 3/28/2013 | TRSUs | 1,833 | 32,297 | ||||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | MRSUs | 917 | 1,833 | 3,666 | 39,648 | |||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | PRSUs | 917 | 1,834 | 3,668 | 32,315 | |||||||||||||||||||||||||
| 3/5/2013 | 3/22/2012 | LRSUs | 344 | 687 | 11,638 | (6) | |||||||||||||||||||||||||
| 3/5/2013 | 7/21/2011 | LRSUs | 344 | 687 | 11,638 | (6) | |||||||||||||||||||||||||
| 3/5/2013 | 3/14/2011 | LRSUs | 628 | 1,255 | 21,260 | (6) | |||||||||||||||||||||||||
Tracy D. Pagliara |
|
|
| ||||||||||||||||||||||||||||
Short-Term Incentive Plan | N/A | N/A | STI | 87,099 | 174,199 | 348,398 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan | 3/28/2013 | 3/28/2013 | TRSUs | 3,000 | 52,860 | ||||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | MRSUs | 1,500 | 3,000 | 6,000 | 64,890 | |||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | PRSUs | 1,500 | 3,000 | 6,000 | 52,860 | |||||||||||||||||||||||||
| 3/5/2013 | 3/22/2012 | LRSUs | 563 | 1,125 | 19,058 | (6) | |||||||||||||||||||||||||
| 3/5/2013 | 7/21/2011 | LRSUs | 500 | 1,000 | 16,940 | (6) | |||||||||||||||||||||||||
2008 Management Incentive Plan | 3/5/2013 | 4/5/2010 | LRSUs | 2,083 | 4,166 | 70,572 | (6) | ||||||||||||||||||||||||
Melanie R. Barth |
|
|
| ||||||||||||||||||||||||||||
Short-Term Incentive Plan | N/A | N/A | STI | 83,875 | 167,750 | 335,500 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan | 3/28/2013 | 3/28/2013 | TRSUs | 3,474 | 61,212 | ||||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | MRSUs | 1,737 | 3,474 | 6,948 | 75,143 | |||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | PRSUs | 1,738 | 3,475 | 6,950 | 61,230 | |||||||||||||||||||||||||
David L. Willis |
|
|
| ||||||||||||||||||||||||||||
Short-Term Incentive Plan | N/A | N/A | STI | 99,710 | 199,420 | 398,840 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan | 3/28/2013 | 3/28/2013 | TRSUs | 3,667 | 64,613 | ||||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | MRSUs | 1,833 | 3,666 | 7,332 | 79,296 | |||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | PRSUs | 1,834 | 3,667 | 7,334 | 64,613 | |||||||||||||||||||||||||
| 11/15/2013 | 3/22/2012 | LRSUs | 2,750 | 26,414 | (6) | ||||||||||||||||||||||||||
| 11/15/2013 | 3/22/2012 | LRSUs | 2,750 | 52,828 | (6) | ||||||||||||||||||||||||||
| 11/15/2013 | 7/21/2011 | LRSUs | 625 | 1,250 | 24,013 | (6) | |||||||||||||||||||||||||
| 11/15/2013 | 7/21/2011 | LRSUs | 1,250 | 24,013 | (6) | ||||||||||||||||||||||||||
2008 Management Incentive Plan | 3/5/2013 | 3/23/2010 | LRSUs | 3,472 | 6,944 | 117,631 | |||||||||||||||||||||||||
Dean J. Glover |
|
|
| ||||||||||||||||||||||||||||
Short-Term Incentive Plan | N/A | N/A | STI | 103,976 | 207,951 | 415,903 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan | 3/28/2013 | 3/28/2013 | TRSUs | 3,667 | 64,613 | ||||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | MRSUs | 1,833 | 3,666 | 7,332 | 79,296 | |||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | PRSUs | 1,834 | 3,667 | 7,334 | 64,613 | |||||||||||||||||||||||||
| 9/20/2013 | 3/22/2012 | LRSUs | 688 | 1,375 | 26,991 | (6) | |||||||||||||||||||||||||
| 9/20/2013 | 3/22/2012 | LRSUs | 2,750 | 53,983 | (6) | ||||||||||||||||||||||||||
| 9/20/2013 | 7/21/2011 | LRSUs | 500 | 1,000 | 19,630 | (6) | |||||||||||||||||||||||||
| 9/20/2013 | 7/21/2011 | LRSUs | 1,000 | 19,630 | (6) | ||||||||||||||||||||||||||
2008 Management Incentive Plan | 3/22/2012 | 3/23/2010 | LRSUs | 2,083 | 4,166 | 70,572 | |||||||||||||||||||||||||
Kenneth W. Robuck |
|
|
| ||||||||||||||||||||||||||||
Short-Term Incentive Plan | N/A | N/A | STI | 109,240 | 218,479 | 436,959 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan | 3/28/2013 | 3/28/2013 | TRSUs | 3,667 | 64,613 | (7) | |||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | MRSUs | 1,833 | 3,666 | 7,332 | 79,296 | (7) | ||||||||||||||||||||||||
| 3/28/2013 | 3/28/2013 | PRSUs | 1,834 | 3,667 | 7,334 | 64,613 | (7) | ||||||||||||||||||||||||
| 3/5/2013 | 3/22/2012 | LRSUs | 688 | 1,375 | 23,293 | (7) | |||||||||||||||||||||||||
| 3/5/2013 | 7/21/2011 | LRSUs | 625 | 1,250 | 21,175 | (7) | |||||||||||||||||||||||||
2008 Management Incentive Plan | 3/5/2013 | 3/23/2010 | LRSUs | 2,778 | 5,555 | 94,102 | (7) | ||||||||||||||||||||||||
(1)- These columns show the dollar value of the potential payout to each named executive officer for
20132017 under ourshort-term incentiveSTI plan at threshold, target and maximum levels. Amountsweactuallypaidearned during20142018 for20132017 performance under theshort-term incentiveSTI plan are included in the"Non-Equity“Non-Equity Incentive PlanCompensation"Compensation” column of the2013Summary Compensation Table above in “2017 Summary Compensation Table.”(2) These rows show the number of time-based RSUs granted to each named executive officer in 2017. The time-based RSUs granted under the LTI plan generally vest on
page 31. (2)- March 31, 2019 for the current named executive officers.
(3)These
columnsrows show the number of units that could be paid to each named executive officer under our performance-based RSUsand market-based RSUsgranted in2013. These awards are subject2017. The performance-based RSUs vest based on the extent (if any) to which we achieve athree-year performancepercentile ranking between the 25th percentile (for a 25% payout) and 75th percentile (for a 150% payout) among companies in a comparator group TSR during the period commencingJanuary 1, 2013April 17, 2017 and endingDecemberMarch 31,2015 and provide for separate2019 (with payoutlevels for performancecapped at90%target if our TSR is negative). If our TSR percentile ranking as oftarget (50% payout), 100% of target (100% payout) and 200% of target (200% payout). These columns also reflect the legacy performance-based RSUs allocated to the 2013 performance period that were approved in 2010, 2011 and 2012, which provide for separate payout levels for performanceMarch 31, 2018 is at90% of target (50% payout) and 100% of target (100% payout), with no additional payout
or above the "target" performance level. Dividends paid on25th percentile, then the underlying sharespayout shall not be less than threshold. In addition, the award will vest at no less than target if the Company achieves a trading price per share equal to $6.00 for any period of 30 consecutive trading days during the performance and vestingthree-year period are accumulated and paid in cash upon vesting.
(3)This column shows the number of time-based RSUs granted to each named executive officer in 2013. The time-based RSUs vest ratably over a 3-year period. Dividends paidending onthe underlying shares during the vesting period are accumulated and paid in cash upon vesting.- March 31, 2020.
(4)
- These amounts reflect the aggregate grant date fair value of the equity awards computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions we made in valuing the stock awards,
see "Note 2—please refer to “Note 3—Summary of Significant Accounting Policies—Stock-Based CompensationExpense" inExpense” to thenotes to ourconsolidated financial statementscontainedincluded inour Annual Report onthe 2017 Form10-K for the year ended December 31, 2013. (5)As the Company's performance for the 2013 performance period was below threshold, the named executive officers forfeited their legacy performance-based RSUs allocated to the 2013 performance period.(6)Reflects the incremental fair value, computed in accordance with FASB ASC Topic 718, of the accelerated vesting of Mr. Willis' and Mr. Glover's time-based RSUs that otherwise would have vested on March 31, 2014 had they not resigned from the Company.(7)Mr. Robuck forfeited all outstanding awards as of his resignation from the Company.
10-K.
20132017 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
YEAR END
The following table sets forth information regarding each unvested RSU awardequity awards held by each of our named executive officers as of December 31, 2013.2017.
|
| Stock Awards |
| ||||||
Name |
| Number of Shares or |
| Market Value of Shares |
| Equity Incentive Plan |
| Equity Incentive Plan |
|
Craig E. Holmes |
| 100,434 |
| 398,723 |
| 124,107 |
| 492,705 |
|
Tracy D. Pagliara |
| 68,433 |
| 271,679 |
| 106,420 |
| 422,487 |
|
Erin Gonzalez |
| 11,156 |
| 44,289 |
| 19,671 |
| 78,094 |
|
Charles E. Wheelock |
| 12,457 |
| 49,454 |
| 22,102 |
| 87,745 |
|
Name | Number of Shares or Units That Have Not Vested (#)(1)(4) | Market Value of Shares or Units That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares or Units That Have Not Vested (#)(3)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units That Have Not Vested ($)(2) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Luis M. Ramírez | 23,730 | 464,396 | 19,543 | 382,469 | |||||||||
Randy Guba | 4,667 | 91,333 | 4,667 | 91,333 | |||||||||
Penny Sherrod-Campanizzi | 7,783 | 152,313 | 5,150 | 100,786 | |||||||||
Tracy D. Pagliara | 12,542 | 245,447 | 6,250 | 122,313 | |||||||||
Melanie R. Barth | 3,474 | 67,986 | 3,475 | 68,006 | |||||||||
David L. Willis | — | — | 1,079 | 21,178 | |||||||||
Dean J. Glover | — | — | 915 | 17,959 | |||||||||
Kenneth W. Robuck | — | — | — | — | |||||||||
(1)
- This column reflects the sum of unvested time-based RSUs held by each named executive officer as of December 31,
2013. - 2017.
(2)
- The following table shows the vesting schedules for the unvested time-based RSUs outstanding as of December 31, 2017.
Name
March 31, 2018
March 31, 2019
Craig E. Holmes
61,327
39,107
Tracy D. Pagliara
35,012
33,421
Erin Gonzalez
7,485
3,671
Charles E. Wheelock
8,354
4,103
(3)The market value
of the unvested awardsiscomputed by multiplyingbased on the closing market price of our Common Stock on the last trading day of2013 by the number of unvested time-based RSUs held by each named executive officer. (3)- 2017 ($3.97).
(4)This column reflects the
sum of theunvestedperformance-based2016 andmarket-based2017 performance-based RSUs held by each named executive officer as of December 31,2013, as well as2017. The 2016 awards generally vest in two equal installments on March 30, 2017 and March 30, 2018, provided that thelegacy performance-based RSUs allocatedapplicable performance goal has been satisfied by each such date (and, if not, through the date the applicable performance goal is subsequently achieved, which must occur within five years after the date of grant). The applicable performance goal for the 2016 awards will be satisfied if the Company achieves a per share price greater than or equal to $5.50 for any period of 30 consecutive trading days during the2014five-year period ending on the fifth anniversary of the date of grant. The 2017 awards vest based on the extent to which we achieve a percentile ranking between the 25th percentile (for a 25% payout) and2015 performance periods. We have not reported75th percentile (for a 150% payout) among companies in a comparator group for TSR during thelegacy performance-based RSUs that are allocated to the 2013 performanceperiodbecause they did not pay outcommencing April 17, 2017 andwere forfeitedending March 31, 2019 (with payout capped at target if our TSR is negative). If our TSR percentile ranking as ofDecemberMarch 31,2013. We have reported all2018 is at or above the 25th percentile, then the payout of thelegacy performance-based RSUs2017 awards shall not be less than threshold. In addition, the 2017 award will vest at no less than target if the"target" level andCompany achieves a trading price per share equal to $6.00 for any period of 30 consecutive trading days during theperformance-based and market-based RSUs at the threshold level.
three-year period ending on March 31, 2020.
(4)The following table shows the vesting schedules for the unvested time-based RSUs and legacy performance-based RSUs outstanding as of December 31, 2013. 2013 grant performance shares are calculated at threshold.
Name | March 31, 2014 | March 31, 2015 | March 31, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
Luis M. Ramírez | 7,910 | 12,098 | 23,265 | |||||||
Randy Guba | 1,556 | 1,556 | 6,222 | |||||||
Penny Sherrod-Campanizzi | 3,242 | 5,871 | 3,820 | |||||||
Tracy D. Pagliara | 7,292 | 5,250 | 6,250 | |||||||
Melanie R. Barth | 1,158 | 1,158 | 4,633 | |||||||
David L. Willis | — | — | 1,079 | |||||||
Dean J. Glover | — | — | 915 | |||||||
The following table sets forth certain information concerning the vesting of time-based and performance-based RSUsequity awards held by our named executive officers during 2013.2017.
|
| Stock Awards |
| ||
Named Executive Officer |
| Number of Shares Acquired on Vesting |
| Value Realized on Vesting |
|
Craig E. Holmes |
| 49,729 |
| 199,385 |
|
Tracy D. Pagliara |
| 61,450 |
| 181,947 |
|
Erin Gonzalez |
| 2,555 |
| 9,863 |
|
Charles E. Wheelock |
| 4,667 |
| 17,378 |
|
Terence J. Cryan |
| 201,830 |
| 669,765 |
|
Timothy M. Howsman |
| 11,525 |
| 51,286 |
|
Mark F. Jolly |
| 9,294 |
| 30,113 |
|
| | Stock Awards | ||||||
|---|---|---|---|---|---|---|---|
Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) | |||||
Luis M. Ramírez | 8,374 | 147,550 | |||||
Penny Sherrod-Campanizzi | 5,261 | 92,699 | |||||
Tracy D. Pagliara | 12,583 | 221,712 | |||||
Melanie Barth(3) | — | — | |||||
David L. Willis(4) | 64,712 | 1,185,090 | |||||
Dean J. Glover(5) | 50,781 | 948,291 | |||||
Kenneth W. Robuck | 32,561 | 573,725 | |||||
(1)
Includes the time-based RSUs that vested on March 31, 2013 and legacy performance-based RSUs allocated to the 2012, 2011, 2010 and 2009 performance periods that vested on March 31, 2013.(2)- Based on the closing price of the Common Stock on the applicable vesting date.
(3)Ms. Barth was hired in November of 2012, and was therefore not part of the 2012 RSU grant process.(4)Includes the vesting of Mr. Willis' time-based and performance-based RSUs that otherwise would have vested on March 31, 2014 had he not resigned. Of these vested units, 36,495 units vested on March 31, 2013, 14,329 units were accelerated upon his termination and 13,888 units were payable 6 months after his termination. For his outstanding performance-based and market-based RSUs (2,158 units), payout is contingent on actual performance results for the performance period commencing January 1, 2013 and ending December 31, 2015.(5)Includes the vesting of Mr. Glover's time-based and performance-based RSUs that otherwise would have vested on March 31, 2014 had he not resigned. Of these vested units, 29,283 units vested on March 31, 2013, 13,165 units were accelerated upon his termination and 8,333 units were payable 6 months after his termination. For his outstanding performance-based and market-based RSUs (1,829 units), payout is contingent on actual performance results for the performance period commencing January 1, 2013 and ending December 31, 2015.
Equity Compensation Plan TableInformation
As of December 31, 2013
The following table provides information as of December 31, 2013 with respect to2017 about the shares of our Common Stock that may be issued under our existingCompany’s equity compensation plans plus certain non-stockholder approved plans.
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a)(1) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)(2)(3) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
Equity compensation plans approved by security holders | 292,598 | $ | — | 601,342 | ||||||
Equity compensation plans not approved by security holders | N/A | N/A | N/A | |||||||
| | | | | | | | | | | |
Total | 292,598 | $ | — | 601,342 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
(1)This column represents the number ofunder which shares ofourthe Company’s Common Stockthat may be issued in connection withare authorized for issuance.Plan Category
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)(1)Weighted-average exercise
price of outstanding options,
warrants and rights
(b)Number of securities
remaining available for future
issuance under equity
compensation plans
(excluding securities reflected
in column (a))(2)Equity compensation plans approved by security holders
379,168
—
218,622
Equity compensation plans not approved by security holders(3)
437,543
—
—
Total
816,711
—
218,622
(1) Consists of outstanding stock options, time-based RSUs and performance-based RSUs granted at target under the 2011 Equity Incentive
Plan. ThePlan and 2015 Equity Incentive Plan at December 31, 2017, including 122,000 unexercised options for Mr. Cryan.(2) Represents the number of available shares
subject to outstanding awards under that plan can be forfeited and, therefore, can again become available for issuanceunder theplan.(2)This column includes 601,3422015 Equity Incentive Plan as of December 31, 2017. No additional sharesof our Common Stock that are available for future awardsmay be granted underourthe 2011 Equity Incentive Plan.(3)
This column includes 34,000 shares that have been reserved for newly-hired executives, but had not yet been approved byRepresents theCompensation Committee asnumber of grants made prior to December 31,2013.
Pension Benefits2017 in the form of time-based RSUs and performance-based RSUs outside of the 2015 Equity Incentive Plan.
PENSION BENEFITS
We do not sponsor or maintain any pension plans for our named executive officers.
Non-qualified Deferred CompensationNON-QUALIFIED DEFERRED COMPENSATION
We have not adopted any non-qualified deferred contribution plans or other deferred compensation plans.
ESTIMATED PAYMENTS UPON TERMINATION
OR RELATED TO A CHANGE IN CONTROL
The table below reflects the amount of incremental compensation to which each current named executive officer would have been entitled as a consequence of certain terminations or in connection with a change in control. A change in control generally means any of the following: (i) the acquisition of 50% or more of the Company’s then outstanding Common Stock or outstanding voting securities; (ii) a change in the membership of our Board, so that the current incumbents and their approved successors no longer constitute a majority; (iii) consummation of a merger, reorganization or consolidation, or the sale or other disposition of all or substantially all of the Company’s assets, unless the owners of our Common Stock or voting securities own more than 50% of the resulting corporation, no person owns 50% or more of the Common Stock or voting securities of the resulting corporation (except to the extent owned prior to the transaction), and at least a majority of the board of directors of the resulting corporation are members of our incumbent Board of Directors; or (iv) stockholder approval of the complete liquidation or dissolution of the Company. The Agreements provided that, for the avoidance of doubt, a change in control shall be deemed to include any disposition of two or more of the Company’s business segments and the completion of any related corporate restructuring or transition identified by the Board. The amounts shown in the table below assume that such termination or change in control was effective as of December 31, 20132017 and that the price of our Common Stock upon which certain of the calculations are made was the closing price of $19.57$3.97 per share on the last trading day of 2013. Because the incremental amount of payments to be made depends on several factors, the2017. The actual amounts to be paid out upon termination of employment or a change in control can only be determined at the time of the event. None of the payments set forth below would be grossed-upgrossed up for taxes. The estimated payments upon termination and change in control are as follows:
Event(1) |
| Craig E. Holmes(7) |
| Tracy D. Pagliara |
| Erin Gonzalez(8) |
| Charles E. |
| ||||
Disability(2) |
|
|
|
|
|
|
|
|
| ||||
Annual Bonus |
| $ | 337,500 |
| $ | 337,500 |
| $ | 137,500 |
| $ | 130,000 |
|
Disability Benefit |
| $ | 225,000 |
| $ | 225,000 |
| $ | 137,500 |
| — |
| |
Accelerated Vesting of Restricted Share Units(6) |
| $ | 429,955 |
| $ | 298,874 |
| $ | 65,937 |
| $ | 73,813 |
|
Total: |
| $ | 992,455 |
| $ | 861,374 |
| $ | 340,937 |
| $ | 203,813 |
|
Death(3) |
|
|
|
|
|
|
|
|
| ||||
Annual Bonus |
| $ | 337,500 |
| $ | 337,500 |
| $ | 137,500 |
| $ | 130,000 |
|
Accelerated Vesting of Restricted Share Units(6) |
| $ | 429,955 |
| $ | 298,874 |
| $ | 65,937 |
| $ | 73,813 |
|
Total: |
| $ | 767,455 |
| $ | 636,374 |
| $ | 203,437 |
| $ | 203,813 |
|
Termination Without Cause(4) |
|
|
|
|
|
|
|
|
| ||||
Salary Continuation |
| $ | 675,000 |
| $ | 675,000 |
| $ | 275,000 |
| $ | 260,000 |
|
Annual Bonus |
| $ | 337,500 |
| $ | 337,500 |
| $ | 137,500 |
| $ | 130,000 |
|
Subsidized Employer COBRA Costs |
| $ | 16,420 |
| $ | 11,539 |
| $ | 16,420 |
| — |
| |
Accelerated Vesting of Restricted Share Units(6) |
| $ | 429,955 |
| $ | 298,874 |
| $ | 65,937 |
| $ | 73,813 |
|
Total: |
| $ | 1,458,875 |
| $ | 1,322,913 |
| $ | 494,857 |
| $ | 463,813 |
|
Termination for Good Reason(4) |
|
|
|
|
|
|
|
|
| ||||
Salary Continuation |
| $ | 675,000 |
| $ | 675,000 |
| $ | 275,000 |
| $ | 260,000 |
|
Annual Bonus |
| $ | 337,500 |
| $ | 337,500 |
| $ | 137,500 |
| $ | 130,000 |
|
Subsidized Employer COBRA Costs |
| $ | 16,420 |
| $ | 11,539 |
| $ | 16,420 |
| — |
| |
Accelerated Vesting of Restricted Share Units(6) |
| $ | 429,955 |
| $ | 298,874 |
| $ | 65,937 |
| $ | 73,813 |
|
Total: |
| $ | 1,458,875 |
| $ | 1,322,913 |
| $ | 494,857 |
| $ | 463,813 |
|
Change in Control (No Termination)(5) |
|
|
|
|
|
|
|
|
| ||||
Accelerated Vesting of Restricted Share Units(6) |
| — |
| — |
| — |
| — |
| ||||
Total: |
| — |
| — |
| — |
| — |
| ||||
Termination Following a Change in Control |
|
|
|
|
|
|
|
|
| ||||
Salary Continuation |
| $ | 675,000 |
| $ | 675,000 |
| $ | 275,000 |
| $ | 260,000 |
|
Annual Bonus |
| $ | 337,500 |
| $ | 337,500 |
| $ | 137,500 |
| $ | 130,000 |
|
Subsidized Employer COBRA Costs |
| $ | 16,420 |
| $ | 11,539 |
| $ | 16,420 |
| — |
| |
Accelerated Vesting of Restricted Share Units(6) |
| $ | 891,428 |
| $ | 694,166 |
| $ | 154,691 |
| $ | 173,301 |
|
Total: |
| $ | 1,920,348 |
| $ | 1,718,205 |
| $ | 583,611 |
| $ | 563,301 |
|
Event(1) | Luis M. Ramírez | Raymond Guba | Penny Sherrod- Campanizzi | Melanie Barth | Tracy D. Pagliara | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Disability(2) | ||||||||||||||||
Annual Bonus | 88,000 | 64,000 | 133,686 | 32,050 | 36,894 | |||||||||||
Disability Benefit | 268,000 | 204,000 | 168,800 | 109,000 | 111,345 | |||||||||||
Accelerated Vesting of Restricted Stock Units | 309,597 | 60,902 | 126,863 | 45,344 | 285,389 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total: | 665,597 | 328,902 | 429,349 | 186,394 | 433,628 | |||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Death(3) | ||||||||||||||||
Annual Bonus | 88,000 | 64,000 | 133,686 | 32,050 | 36,894 | |||||||||||
Accelerated Vesting of Restricted Stock Units | 309,597 | 60,902 | 126,863 | 45,344 | 285,389 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total: | 397,597 | 124,902 | 260,549 | 77,394 | 322,283 | |||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Termination Without Cause(4) | ||||||||||||||||
Salary | 550,000 | 390,000 | 302,000 | 152,500 | 316,725 | |||||||||||
Annual Bonus | 88,000 | 64,000 | 133,686 | 32,050 | 36,894 | |||||||||||
Benefit Continuation | 990 | — | — | — | — | |||||||||||
Club Dues | — | — | — | — | — | |||||||||||
Legal Fees | — | — | — | — | — | |||||||||||
Consulting Fees | — | — | — | — | — | |||||||||||
Accelerated Vesting of Restricted Stock Units | 309,597 | 60,902 | 126,863 | 45,344 | 285,389 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total: | 948,587 | 514,902 | 562,549 | 229,894 | 639,008 | |||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Termination for Good Reason(4) | ||||||||||||||||
Salary | 550,000 | 390,000 | 302,000 | 152,500 | 316,725 | |||||||||||
Annual Bonus | 88,000 | 64,000 | 133,686 | 32,050 | 36,894 | |||||||||||
Benefit Continuation | 990 | — | — | — | — | |||||||||||
Club Dues | — | — | — | — | — | |||||||||||
Accelerated Vesting of Restricted Stock Units | 309,597 | 60,902 | 126,863 | 45,344 | 285,389 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total: | 948,587 | 514,902 | 562,549 | 229,894 | 639,008 | |||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Change in Control | ||||||||||||||||
Accelerated Vesting of Restricted Stock Units | 1,147,311 | 273,980 | 340,420 | 203,978 | 549,584 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total: | 1,147,311 | 273,980 | 340,420 | 203,978 | 549,584 | |||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(1)
- No named executive officer would have been entitled to any severance payments if we terminated him/her for cause or he/she terminated his/her employment with us without good reason on December 31,
2013.
(2)- If terminated due to disability on December 31,
2013:2017:·
•- Each applicable named executive officer would have been entitled to receive a pro-rated
annual incentiveSTI based on actual performance for the year of termination. The amount of the pro-ratedannual incentiveSTI shown in the table assumes a December 31,20132017 termination and, therefore, is equal to100 percent100% of the2013 annual incentive2017 STI that would have been payable had the executive remained employed through theannual incentiveSTI payment date in2014.2018.·
•For Messrs. RamírezMr. Pagliara, Mr. Holmes andPagliara, equalsMs. Gonzalez would have been entitled to receive 100% oftheirhis or her base salary for six months, which is comprised of the 60% salary continuation benefit provided under the Company-sponsored short-term disability insurance program and the 40% supplemental disability benefit provided undertheirhis or her employmentagreements.agreement.·
•- See below for the treatment of RSUs.
(3)
(3)- Upon termination of employment by reason of death on December 31,
2013,2017, a current named executiveofficer'sofficer’s personal representative would have been entitled to the same pro-ratedannual incentiveSTI to which the named executive officer would have been entitled upon termination by reason ofdisability. - disability (if any), other than the salary continuation. See below for the treatment of RSUs.
(4)
- Upon termination of the current named executive officer by us without cause or termination by the executive for good reason (if applicable), in either case on December 31,
2013:2017:·
•Messrs. Ramírez, PagliaraMr. Holmes andGuba and Ms. Sherrod-CampanizziMr. Pagliara would have been entitled toreceive18 months’ of salary continuation, a 2017 STI payout at target and full COBRA premiums for 12 months.· Ms. Gonzalez would have been entitled to 12 months’ of salary continuation, a 2017 STI payout at target and full COBRA premiums for 12 months.
· Mr. Wheelock would have been entitled to receive: (i) salary continuation
forof one year, and (ii) a pro-ratedannual incentiveSTI based on actual performance for the year of termination.·
•Ms. Barth would have been entitled to receive (i) six months of base salary, and (ii) a pro-rated annual incentive based on actual performance for the year of termination.•- See below for the treatment of RSUs.
(5)
The amounts shown inSee below for thetable assume a December 31, 2013 termination and, therefore, include 100 percenttreatment ofthe annual incentive that would have been payable had the executive remained employed through the annual incentive payment date in 2014. The named executive officers generally are subject to restrictive covenants, such as confidentiality, non-solicitation and non-compete provisions.
(5)UponRSUs upon a change in control on December 31,2013, all2017.(6) Performance-based RSUs
held byfor 2016 and 2017 grants assumed at target. Includes cash-based LTI for Ms. Gonzalez and Mr. Wheelock.(7) On April 13, 2018, Mr. Holmes resigned from his positions as Co-President and Co-CEO, and Mr. Pagliara was appointed President and Chief Executive Officer. In connection with his resignation, Mr. Holmes entered into a
named executiveSeparation Agreement, which is described in more detail below under the heading “—Separation Agreements.”(8) On May 29, 2018, Ms. Gonzalez resigned from her roles as Chief Financial Officer and principal financial and accounting officer
that had not previously vested would fully vest,of the Company. In connection withperformance awards vesting ather resignation, Ms. Gonzalez entered into a Separation Agreement, which is described in more detail below under thetarget level.
Treatment of RSUs
We have granted restricted stock unit and restricted share unitRSU awards to our executive officers pursuant to our 2008 Management2011 Equity Incentive Plan and our 20112015 Equity Incentive Plan. The termination provisions of the award agreements are described below.
•Awards Granted in 2010 and 2011. The restricted stock unit agreements for awards granted in 2010 and 2011 provide that upon termination by the Company without cause or by the executive for good reason, or upon a change in control, all unvested RSUs shall immediately vest, and upon the death or disability of the executive, he is entitled to pro-rated vesting of restricted stock units, with the legacy performance-based RSUs paid based on actual performance results. As the 2010 and 2011 legacy performance-based RSUs allocated to the 2013 performance period were forfeited, they are not included in the tables above for death and disability.·•Awards Granted in 2012.The RSU agreements for awards grantedin 2012pursuant to the 2011 and 2015 Equity Incentive Plans providethat uponthat:· Upon a termination by the Company without
cause,“cause” (as defined in the award agreement), by the executive officer forgood reason,“good reason” (as defined in the award agreement) or due to theexecutive'sexecutive officer’s death ordisability,“disability” (as defined in the award agreement), each executive officer shall be entitled to pro-rated vesting of RSUs.· For awards granted under the 2015 Equity Incentive Plan, upon the consummation of a “change of control” (as defined in that equity plan):
· To the extent outstanding awards are assumed, converted or replaced by the resulting entity: (i) any performance-based outstanding awards shall be converted by the resulting entity as if “target” performance had been achieved as of the date of the change in control and shall continue to vest during the remaining performance period or other period of required service; and (ii) all other awards shall continue to vest during the applicable vesting period, if any. If a participant incurs a termination other than for cause, death or disability or for good reason during the two-year period commencing on the date of the change in control, then upon such termination (A) all outstanding awards that
otherwise would have vested on March 31, 2014,may be exercised shall become fully exercisable and shall remain exercisable for the full duration of their term, (B) all restrictions with respect to outstanding awards shall lapse, with any performance objectives deemed to be satisfied at thelegacy performance-based RSUs paid based on actual performance results. As“target” level, and (C) all outstanding awards shall become fully vested.· To the
2012 legacy performance-based RSUs allocated to the 2013 performance period were forfeited, theyextent outstanding awards are notincluded inassumed, converted or replaced by thetables above.
Table· Certain retention awards of Contents
•Awards Granted in 2013. The RSU agreementsRSUs provide forawards granted in 2013 provide thatfull vesting of the award upon a termination by the Company withoutcause,“cause” (as defined in the award agreement), by the executive officer forgood reason, or“good reason” (as defined in the awardagreement), due to the
executive'sexecutive officer’s death ordisability, each executive shall be entitled to pro-rated vesting, with“disability” (as defined in theperformance-based and market-based RSUs paid based on actual performance results. For purposes of the table above, we have assumed "target" performance levels for the performance-based and market-based RSUs.
Definitions for Mr. Ramírez and Mr. Guba. "Cause" means: (i) the continued failure to perform dutiesaward agreement) or disregard of the directives of the Board; (ii) willful material misrepresentation; (iii) commission of any act of fraud, misappropriation or embezzlement; (iv) conviction, guilty plea or plea of nolo contendere for any crime involving dishonesty or for any felony; (v)upon a material breach of fiduciary duties of loyalty or care or a material violation of the Company's Code of Business Conduct and Ethics or any other Company policy; (vi) the engaging“change in illegal conduct, gross misconduct, gross insubordination or gross negligence that is materially and demonstrably injurious to the Company's business or financial condition; or (vii) a material breach by Executive of his representations under the employment agreement or his restrictive covenants. "Good Reason" means (i) a material reductioncontrol” (as defined in title, duties, responsibilities or reporting relationship; (ii) a material reduction in base salary (other than certain across-the-board reductions) or target annual incentive opportunity; or (iii) with respect to Mr. Ramírez only, failure to initially appoint him as a member of the Board or thereafter to nominate him for re-election as a member of the Board.our 2015 Equity Incentive Plan).
Separation AgreementsDefinitions for the Other Officers. "Cause" generally means: (i) a material breach of confidentiality, noncompetition or nonsolicitation covenants; (ii) commission of a felony or any crime involving theft, dishonesty or moral turpitude; (iii) commission of one or more acts or omissions that are willful and deliberate acts intended to harm or injure our business, operations, financial condition or reputation; (iv) disregard of the directives of our Board of Directors; (v) drunkenness or use of drugs that interferes with the performance of duties under the employment agreement; or (vi) any attempt to secure any personal profit in
In connection with our business without prior written approval by unanimous consent of our Board of Directors. For purposes ofhis resignation as Chief Executive Officer, Mr. Pagliara's employment agreement, "good reason" means (i) a material diminution of duties, responsibilities or authority, or (ii) a material breach of our obligations under the employment agreement, in each case subject to notice requirements and cure provisions. For the other named executive officers, "good reason" generally means: (i) a material reduction in the annual base salary, employee benefits or percentage participation in our short-term incentive plan; (ii) subject to limited exceptions, a material modification to our short-term incentive plan that materially and adversely affects the determination of the officer's bonus; (iii) a requirement to be based at any office or location more than 50 miles from their principal place of employment; or (iv) a removal of the officer from the position specified in his employment agreement by action of the Board of Directors without cause and without the officer's consent.
Change in Control. A "change in control" generally means any of the following: (i) the acquisition of 50% or more of the voting stock of the Company, other than an acquisition by certain related parties or an acquisition pursuant to a transaction the primary purpose of which is to effect an equity financing of the Company; (ii) turnover of a majority of the incumbent members of our Board of Directors (other than the election of certain new directors whose election or nomination was approved by a majority of the incumbent Board of Directors); (iii) a reorganization, merger or consolidation, unless our stockholders immediately prior to the transaction own more than 50% of the Common Stock of the resulting corporation as a result of their prior ownership of the Common Stock of the Company; (iv) a complete liquidation or dissolution of the Company; or (v) the sale or other disposition of all or substantially all of the Company's assets (other than a sale or disposition to a subsidiary).
Severance for Messrs. Glover and Willis
On September 20, 2013, Mr. GloverCryan entered into a separation agreement with the Company, under which he resigned from all positions at the Company effective as of September 30, 2013.July 26, 2017. Under the terms of the separation agreement, the Company agreed to pay to Mr. Glover received (i) one year of baseCryan salary and his pro-rated target short-term incentive; (ii) the cost of medical, dental, life insurance, travel/accident insurancecontinuation for 1218 months and country club dues for 3 months; (iii) the restricted share units granted to him in 2010, 2011 and 2012 vested in full and without pro-ration; and (iv) the restricted share units granted to him in 2013 vested on a pro-rata basis (with performance-based and market-based RSUs payablepro-rated 2017 STI based on actual Company performance, throughsubsidized COBRA premiums, up to $7,500 in attorney fees and moving expenses. All of his unvested RSUs vested as provided in the endrelevant award agreements, subject, in certain instances, to pro-ration, and in one instance, an adjustment to the pro-ration formula to provide for the vesting of December 31, 2015). In addition, Mr. Glover entered into a consulting agreement with the Company through October 31, 2013 in exchange for a retainer of $25,000.an additional 84,173 RSUs.
On November 18, 2013,
In connection with his resignation as Chief Accounting Officer, Mr. WillisJolly entered into a separation agreement with the Company, under which he resigned from all positions at the Company effective asAugust 1, 2017. Under the terms of November 18, 2013.the separation agreement, the Company agreed to pay to Mr. Willis also received (i) one year of baseJolly salary and his pro-rated target short-term incentive; (ii) the cost of medical, dental, life insurance, travel/accident insurancecontinuation for 12 months, and country club dues for 3 months; (iii) the restricted share units granted to him in 2010, 2011 and 2012 vested in full and without pro-ration; and (iv) the restricted share units granted to him in 2013 vested on a pro-rata basis (with performance-based and market-based RSUs payable2016 STI based on actual Company performance throughand a pro-rated 2017 STI based on actual Company performance. All of his unvested RSUs vested as provided in the relevant award agreements.
The following table summarizes the severance benefits received by each of Messrs. Cryan and Jolly:
Description of Payment/Benefit |
| Terence Cryan |
| Mark Jolly |
| ||
Salary Continuation |
| $ | 1,034,815 |
| $ | 260,000 |
|
2016 STI |
| $ | 259,223 |
| $ | 4,015 |
|
2017 STI |
| $ | 105,780 |
| $ | 15,077 |
|
Time-based RSUs Vesting(1) |
| $ | 204,627 |
| $ | 20,201 |
|
Performance-based RSUs Pending Vesting(1) |
| $ | 395,659 |
| $ | 9,911 |
|
Performance-based RSUs Pending Vesting(1)(2) |
| $ | 43,272 |
| — |
| |
Attorney Fees |
| $ | 7,500 |
| — |
| |
Moving Expenses |
| $ | 25,000 |
| — |
| |
Subsidized Employer COBRA Costs |
| $ | 17,490 |
| — |
| |
Total |
| $ | 2,093,366 |
| $ | 309,205 |
|
(1) The pro-rated performance-based RSUs for 2017 remain unvested throughout the performance period, which ends on March 31, 2020. The actual amount earned will not be known until after the end of December 31, 2015).the applicable performance period.
(2) Valued at the closing stock price of $3.15 as of July 26, 2017 for Mr. Cryan, and $3.24 as of August 1, 2017 for Mr. Jolly.
On March 15, 2017, Mr. Howsman retired from the Company. In addition,connection with his retirement, the Company and Mr. WillisHowsman entered into a retirement and consulting agreement (the “Retirement Agreement”). Pursuant to the terms of the Retirement Agreement, Mr. Howsman agreed to serve as a consultant to the Company and the Company agreed to pay Mr. Howsman $140,937.50 for his first six months of consulting services. The Retirement Agreement also included a standard non-disparagement covenant as well as a release of claims. On December 11, 2017, Mr. Howsman was rehired as Chief Accounting Officer, in which role he did not serve as an executive officer. On May 29, 2018, in connection with the resignation of Ms. Gonzalez, he was appointed interim Chief Financial Officer and principal accounting and financial officer, and on July 31, 2018, he was appointed as the Company’s Chief Financial Officer. In connection with his appointment as Chief Financial Officer, Mr. Howsman entered into the Howsman Employment Agreement, which is described above under “Executive Compensation—Compensation Discussion and Analysis—Section 4. Employment Arrangements.”
Mr. Holmes, formerly one of our two principal executive officers, resigned from his positions with the Company and entered into a Separation Agreement, effective April 13, 2018 (the “Holmes Separation Agreement”). Under the terms of the Holmes Separation Agreement, the Company agreed to pay Mr. Holmes an amount equal to 18 months of continued base salary, as well as his “target” STI for the 2017 fiscal year, paid in monthly installments through December 31, 2013September 30, 2018, or earlier upon a change in exchangecontrol, and his “target” STI for a monthly retainer of $12,784.
The following table quantifies the severance benefits provided to Messrs. Willis and Glover in connection with their separation from2018 fiscal year, paid on the Company.
Description of Payment/Benefit | Mr. Willis | Mr. Glover | |||||
|---|---|---|---|---|---|---|---|
Severance payment—one year salary | $ | 306,800 | $ | 320,000 | |||
Pro-rated 2013 short-term incentive | $ | 199,420 | $ | 156,000 | |||
Cost of medical, dental, life, travel/accident insurance for 12 months, and country club dues for 3 months | $ | 14,192 | $ | 14,303 | |||
Equity vesting(1) | $ | 563,165 | $ | 450,222 | |||
Consulting fee | $ | 17,898 | $ | 25,000 | |||
| | | | | | | | |
Total | $ | 1,101,475 | $ | 965,525 | |||
(1)The pro-rated performance-based and market-based RSUs are included assuming threshold performance through the endearlier of December31, 201514, 2018 or a change in control. Mr. Holmes will also receive subsidized premiums for continued health insurance for one year andusingfull vesting of his outstanding equity awards, with any performance objectives deemed satisfied at the “target” level. The Holmes Separation Agreement requires him to reaffirm his non-compete and non-solicitation covenants and includes astock pricestandard non-disparagement covenant as well as a release of claims.In addition, Ms. Gonzalez, formerly our Chief Financial Officer and principal accounting and financial officer, resigned from her positions with the Company and entered into a Separation Agreement, effective May 29, 2018 (the “Gonzalez Separation Agreement”). Under the terms of the Gonzalez Separation Agreement, the Company agreed to pay to Ms. Gonzalez:
(1) 12 months of continued base salary; (2) $103,180, representing 75.04% of her target STI for the 2017 fiscal year (the payment of which Ms. Gonzalez previously elected to defer), payable in equal monthly installments beginning June 30, 2018 through September 30, 2018; (3) $137,500, representing her target STI for the 2018 fiscal year, payable on the earlier of December
31, 2013.
14, 2018 or the date of a change in control of the Company; and (4) subsidized medical coverage for 12 months. Ms. Gonzalez agreed to provide consulting services to the Company for 30 days in order to facilitate the transition of her duties for no additional consideration. All of her unvested RSUs vested in full. The Gonzalez Separation Agreement includes a standard non-disparagement covenant, as well as a release of claims, and requires Ms. Gonzalez to reaffirm the restrictive covenants in the CFO Agreement.
ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS
At the 2011 Annual Meeting, our stockholders recommended that our Board hold say-on-pay votes on an annual basis. As required bya result, we are providing our stockholders with the Dodd-Frank Wall Street Reform and Consumer Protection Act, we included a stockholderopportunity to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement. This proposal gives our stockholders the opportunity to express their views on the compensation of our named executive officers.
Stockholders have the opportunity to vote on the frequency of future votes on named executive officer compensation at this Annual Meeting, as described below under “Proposal No. 4 — Advisory Vote to Approve the Frequency of the Advisory Vote on Executive Compensation.”
In connection with this proposal, the Board encourages stockholders to review, in detail, the description of the compensation program for our 2011named executive officers that is set forth in the “Compensation Discussion and Analysis” beginning on page 18, as well as the information contained in the compensation tables and narrative discussion in this proxy statement whichstatement.
In addition, the Board encourages stockholders to consider our equity grant practices over the past several years, as outlined below.
Equity Grant Practices
Our 2015 Equity Incentive Plan (the “2015 plan”) was advisory and nonbinding. Ourapproved by stockholders approved the frequency of future votes on the recommendationMay 8, 2015. Because of our Board of Directors to hold future say-on-pay votes ondelayed periodic report filings, we have not held an annual basis. The next stockholder vote on the frequency of future votes on named executive officer compensation will occur at our 2017 annual meeting of stockholders.our stockholders since 2015.
Since our last annual meeting, the Compensation Committee and the Board have been focused on a number of key changes in executive management, along with retaining our core executive team and attracting new executive talent. The management changes occurred during a period of disappointing financial results and a financial restatement process. During this challenging transition period, it was critically important to focus our employees on operating the business and executing strategic initiatives that were designed to improve our financial results on both a short-term and long-term basis.
Therefore, in order to maintain stability and attract and retain executive talent during this transition period, and to align the interests of our management team with our stockholders’ interests, the Compensation Committee approved a number of equity awards to existing employees and to induce new employees, including named executive officers, to join our team, which eventually depleted our share reserve under the 2015 plan. As a result, after depleting the share reserve under the 2015 plan, we granted additional equity awards to employees, including named executive officers, and directors covering approximately 1.5 million shares, outside of the 2015 plan.
Of the 1.5 million additional grants, the 2016 time-based RSUs and the 2017 time-based and performance-based RSUs were scheduled to be settled in cash unless either (i) stockholders approved an increase in the share reserve or (ii) the Compensation Committee otherwise authorized the settlement of those awards in shares. We have not received stockholder approval of an increase in the share reserve of the 2015 plan, and we are not asking stockholders to approve an increase in the share reserve.
We eventually settled the 2016 time-based RSUs in shares using forfeited shares under the 2015 plan. As the 2017 RSUs began to vest (i.e., accelerated vesting due to terminations), the Compensation Committee authorized the settlement of those awards with a combination of forfeited shares under the 2015 plan and approximately 30,114 shares outside of the 2015 plan on a “one-off” basis outside the 2015 plan rather than settle the awards in cash. As of the Record Date, approximately 187,387 shares remain outstanding under the 2017 RSU grants, which will be settled in cash unless the Compensation Committee otherwise authorizes the settlement of those awards in shares outside of the 2015 plan.
As of the Record Date, awards covering approximately 1,085,631 shares remain outstanding and will be settled in shares outside of the 2015 plan. These awards represent the 2018 equity grants to employees, including named executive officers, and to current non-employee directors.
Results of Prior Say-on-Pay Vote
Because we did not hold an annual meeting in either 2016 or 2017, our most recent say-on-pay vote was held at the 2015 Annual Meeting, at which time approximately 93% of our stockholders are entitled to vote at the Annual Meeting to approvewho cast votes approved the compensation of our named executive officers (commonly referred to as a "say on pay" vote), as disclosed in this proxy statement. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the stockholder vote on executive compensation is an advisory vote only, and it is not binding on the Company or the Board of Directors.officers.
Since Global Power emerged from bankruptcy in January 2008, we have followed a compensation policy that has had the objectives of attracting and retaining talented individuals, motivating our executive team to achieve the Company's goals and objectives, and aligning the interests of our executives with those of our stockholders. As described in detail in "Executive Compensation—Compensation Discussion and Analysis," we have sought to reward our named executive officers through an executive compensation program including base compensation that is competitive within our industry, short-term incentives conditioned upon the achievement of specific annual earnings goals, and long-term incentives conditioned upon the achievement of specific long-term financial, strategic and corporate objectives. As a result of these programs, we have been able to retain highly capable individuals in key Company positions, and retain others whose work is critical to the continued growth and success of our business. At the same time, we believe our programs do not encourage excessive risk-taking by management. The Board of Directors believes that our philosophy and practices have resulted in executive compensation decisions that are appropriate and that have benefited the Company over time.
Advisory Resolution
For these reasons, the
The Board of Directors recommends that stockholders approve the compensation of the Company'sCompany’s executive officers as described in this proxy statement by approving the following advisory resolution:
“RESOLVED, that the stockholders of Global Power EquipmentWilliams Industrial Services Group Inc. (the "Company"“Company”) approve, on an advisory, non-binding basis, the compensation of the individuals identifiedCompany’s named executive officers, as such compensation is described in the Summary Compensation Table, as disclosed in the Company's 2014 proxy statement pursuant to the compensation disclosure rules of the SEC (which disclosure includes the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation tables and the accompanying footnotesnarrative disclosure and narratives withinrelated material, set forth in the Executive Compensation sectionCompany’s definitive proxy statement for the 2018 Annual Meeting of the 2014 proxy statement).Stockholders.”
Required Vote
Stockholders may cast their vote “for,” “against” or “abstain” from voting on this proposal. The advisory vote regarding the compensation of the named executive officers described in this Proposal 3 will be approved if the votes cast in favor of the proposal exceed the votes cast against the proposal.proposal, meaning the number of shares voted “for” this proposal must exceed the number of shares voted “against” it. Abstentions and broker non-votes are not considered votes cast and will not be counted as having been votedtherefore have no effect on the vote for purposes of this proposal.
Because this vote is advisory, it will not be binding upon the Company, the Board of Directors.Directors or the Compensation Committee. However, our Board of Directors, including our Compensation Committee, values the opinions thatof our stockholders express in their votes and will take into account the outcome of the vote when and as it deems appropriate when making determinations regarding executive compensation.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
ADVISORY VOTE TO APPROVE THE FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATION
Our stockholders are able to indicate how frequently we should seek the advisory vote on the compensation of our named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules, such as Proposal 3 included in this proxy statement (also known as “say-when-on-pay”). This advisory, non-binding vote, which is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Exchange Act, must be solicited from our stockholders at least once every six years; however, the Company has not held an annual stockholders’ meeting since the 2015 Annual Meeting. Accordingly, the last say-when-on-pay vote was held at the 2011 annual meeting of stockholders, during which stockholders voted for an annual frequency of the advisory vote on named executive officer compensation, which choice was approved by the Board.
By voting on this proposal, stockholders may indicate whether they would prefer that we hold future advisory votes on the compensation of our named executive officers every year, every two years or every three years. Stockholders may also abstain from voting.
The Board believes that an annual frequency continues to be the appropriate frequency for the say-on-pay vote because it allows our stockholders to provide us with their direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. Additionally, an annual advisory vote on executive compensation is consistent with our policy of seeking input from, and engaging in discussions with, our stockholders on corporate governance matters and our executive compensation philosophy, policies and practices. We understand that our stockholders may have different views as to what is the best approach for the Company, and we look forward to hearing from our stockholders on this proposal.
Advisory Resolution
We are asking our stockholders to indicate whether they would prefer that we conduct future advisory votes on the compensation of our named executive officers annually, every two years or every three years by voting on the following advisory resolution at the Annual Meeting:
“RESOLVED, that the option of every year, every two years or every three years that receives the highest number of votes cast for this resolution will be considered the stockholders’ recommendation of the frequency with which Williams Industrial Services Group Inc. is to hold a stockholder advisory vote on the compensation of its named executive officers.”
Required Vote
Stockholders may cast their vote on their preferred voting frequency by choosing the option of “one year,” “two years,” or “three years,” or “abstain” from voting. The option of one year, two years or three years that receives the highest number of votes cast by stockholders will be the frequency for the advisory vote on executive compensation that has been selected by stockholders. Abstentions and broker non-votes are not considered votes cast and will therefore have no effect on such vote.
Because this vote is advisory, it will not be binding upon the Company, the Board of Directors recommends aor the Compensation Committee. However, our Board of Directors, including the Compensation Committee, values the opinions that our stockholders express in their votes and will take into account the outcome of the vote FOR the approval ofwhen considering how frequently we should conduct an advisory vote on the compensation of the Company'sour named executive officers.officers as it deems appropriate.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE OPTION OF ONE YEAR AS THE FREQUENCY TO HOLD AN ADVISORY VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Except as indicated otherwise, the following table sets forth certain information, as of March 6, 2014,the Record Date, regarding the beneficial ownership of our Common Stock by holders of greater than five percent5% of our Common Stock that have filed ownership reports with the SEC, each of our current directors, each of our named executive officers named in the Summary Compensation Table, and all of our current directors and named executive officers as a group. Except as otherwise indicated, addresses are c/o Global Power EquipmentWilliams Industrial Services Group Inc., 400 East Las Colinas Boulevard,100 Crescent Centre Parkway, Suite 400 Irving, Texas 75039.1240, Tucker, Georgia 30084.
|
| Common Stock Beneficially Owned |
| ||
Name of Beneficial Owner |
| Number of Shares (#) |
| Percentage of Class (%)(1) |
|
Greater than 5% Holders: |
|
|
|
|
|
Nelson Obus(2) |
| 3,222,537 |
| 17.4 | % |
Emancipation Management LLC(3) |
| 2,216,426 |
| 12.0 | % |
Tontine Asset Associates, LLC(4) |
| 2,145,882 |
| 11.6 | % |
Franklin Advisory Services, LLC(5) |
| 1,275,000 |
| 6.9 | % |
Wax Asset Management, LLC(6) |
| 1,152,265 |
| 6.2 | % |
|
|
|
|
|
|
Directors and Named Executive Officers: |
|
|
|
|
|
Charles Macaluso(7) |
| 104,136 |
| * |
|
David A. B. Brown(7) |
| 56,459 |
| * |
|
Robert B. Mills(7) |
| 63,662 |
| * |
|
Nelson Obus(2)(7) |
| 3,222,537 |
| 17.4 | % |
Tracy D. Pagliara(8) |
| 157,471 |
| * |
|
Timothy M. Howsman(8)(12) |
| 21,051 |
| * |
|
Charles E. Wheelock(8) |
| 13,664 |
| * |
|
Craig E. Holmes(9)(11) |
| 218,799 |
| 1.2 | % |
Erin Gonzalez(9)(12) |
| 27,326 |
| * |
|
Terence J. Cryan(9) |
| 245,240 |
| 1.3 | % |
Mark F. Jolly(9) |
| 6,836 |
| * |
|
Directors and Named Executive Officers as a Group (7 persons)(10) |
| 3,638,980 |
| 19.5 | % |
| | Common Stock Beneficially Owned | ||||||
|---|---|---|---|---|---|---|---|
Name of Beneficial Owner | Number of Shares (#) | Percentage of Class (%)(1) | |||||
Greater than Five Percent Holders: | |||||||
Royce & Associates, LLC(2) | 1,883,905 | 11.0 | % | ||||
NSB Advisors LLC(3) | 1,548,564 | 9.0 | % | ||||
Wellington Management Company, LLP(4) | 1,133,170 | 6.6 | % | ||||
Zesiger Capital Group LLC(5) | 1,020,451 | 6.0 | % | ||||
PPM America Private Equity Fund LP(6) | 906,597 | 5.3 | % | ||||
Directors(7): | |||||||
Carl Bartoli | 23,054 | * | |||||
Terence J. Cryan | 23,054 | * | |||||
Eugene I. Davis | 24,054 | * | |||||
Charles Macaluso | 24,054 | * | |||||
Michael E. Salvati | 9,342 | * | |||||
Frank E. Williams, Jr.(8) | 33,322 | * | |||||
Named Executive Officers: | |||||||
Luis M. Ramírez | 18,181 | (9) | * | ||||
Raymond K. Guba | 1,556 | (10) | * | ||||
David L. Willis | 138,768 | (11) | * | ||||
Dean J. Glover | 154,394 | (12) | * | ||||
Kenneth W. Robuck | 101,565 | * | |||||
Tracy D. Pagliara | 46,711 | (13) | * | ||||
Penny Sherrod-Campanizzi | 12,553 | (14) | * | ||||
Melanie Barth | 1,158 | (15) | * | ||||
Directors and named executive officers as a group (14 persons)(16): | 611,766 | (17) | 3.6 | % | |||
*
- Less than 1%.
(1)
- As reported by such persons as of
March 6, 2014the Record Date and including, in the case of our named executive officers,restricted share unitsRSUs that vest within 60 days of the Record Date, which are treated for purposes of this table on an as-converted basis. Percentages are based on17,063,00018,514,231 shares of our Common Stockissued andoutstanding as of the Record Date, except as indicated otherwise and except where the person has the right to acquire shares within 60 days of therecord date,Record Date, which increases the number of shares beneficially owned by such person and the number of shares outstanding for determining thatperson'sperson’s percentage of ownership. We have determined beneficial ownership in accordance with the rules of the SEC. Unless otherwise indicated in the footnotes to this table, each stockholder named in the table has sole voting and
investment power with respect to all shares shown as beneficially owned by that stockholder. We have omitted percentages of less than 1% from the table.
(2)
- Of the shares listed, 3,167,718 were reported on a Schedule 13D/A filed with the SEC on August 23, 2017, with respect to holdings as of August 17, 2017. They include: (i) 963,454 shares of Common Stock (the “Partner Shares”) held by Wynnefield Partners Small Cap Value, L.P., of which WCM is the sole general partner and has the sole power to direct the voting and disposition of these shares and, as a result, may be deemed to beneficially hold the Partner Shares; (ii) 1,573,953 shares of Common Stock (the “Partner I Shares”) held by Wynnefield Partners Small Cap Value, L.P. I, of which WCM is the sole general partner and has the sole power to direct the voting and disposition of these shares and, as a result, may be deemed to beneficially hold the Partner I Shares; (iii) 530,306 shares of Common Stock (the “Offshore Shares”) held by Wynnefield Small Cap Value Offshore Fund, Ltd., of which Wynnefield Capital is the sole investment manager and has the sole power to direct the voting and disposition of these shares and, as a result, may be deemed to beneficially hold the Offshore Shares; and (iv) 100,005 shares of Common Stock (the “Plan Shares”) held by Wynnefield Capital, Inc. Profit Sharing & Money Purchase Plan (the “Plan”), an employee profit sharing plan. Mr. Nelson Obus and Mr. Joshua Landes are the co-managing members of WCM and, in such role, share the power to direct the voting and disposition of the shares of Common Stock WCM may be deemed to beneficially hold and, as a result, may be deemed to beneficially hold the Partner Shares and the Partner I Shares. Mr. Obus and Mr. Landes are executive officers of Wynnefield Capital and, in such role, share the power to direct the
voting and disposition of the Offshore Shares and, as a result, may be deemed to beneficially hold the Offshore Shares. Mr. Obus and Mr. Landes are co-trustees of the Plan and in such role, share the power to direct the voting and disposition of the Plan Shares and, as a result, may be deemed to beneficially hold the Plan Shares. The principal business address of the reporting persons is 450 Seventh Avenue, Suite 509, New York, NY 10123.
In addition to the shares disclosed above, Mr. Obus’ holdings include 54,819 restricted shares awarded for his service as a director of the Company.
(3)The shares listed were reported on
Schedule 13G/A, filed with the SEC on January 9, 2014. Royce & Associates, LLC ("Royce") has sole voting and dispositive power. The mailing address of Royce is 745 Fifth Avenue, New York, NY 10151. (3)The shares listed were reported ona Schedule 13G/A filed with the SEC on February13, 2013,12, 2018, with respect toholdingsshares of Common Stock held by accounts managed by Circle N Advisors, LLC (“Circle N”), as of December 31,2012. NSB Advisors2017. The report was filed by (1) Emancipation Management LLC("NSB"(“EM”)has sole, which owns Circle N, (2) Circle N and (3) Mr. Charles Frumberg, the managing member of EM. Each of EM, Circle N and Mr. Frumberg holds shared dispositive power and no voting power ofthesuch shares. Themailingprincipal business address ofNSBEM and Mr. Frumberg is 825 Third Avenue, New York, NY 10022. The principal business address of Circle N is 200WestageWestgate Business CenterDrive, Suite 228,Dr., Fishkill, NY 12524.(4)
- The shares listed were reported on a Schedule 13G/A filed with the SEC on February 9, 2018, with respect to shares of Common Stock held directly by Tontine Capital Overseas Master Fund II, L.P. (“TCOM II”), as of December 31, 2017. The report was filed by (1) Tontine Asset Associates, LLC (“TAA”), which serves as general partner of TCOM II, and (2) Mr. Jeffrey L. Gendell, the managing member of TAA. Each of TAA and Mr. Gendell holds shared voting and dispositive power of such shares and may be deemed to beneficially hold such shares. The principal business address of the reporting persons is 1 Sound Shore Drive, Suite 304, Greenwich, CT 06830.
(5) The shares listed were reported on a Schedule 13G filed with the SEC on February
14, 2014. Wellington Management Company, LLP ("Wellington") may be deemed5, 2018, with respect tobe the beneficial ownerholdings ofthe securities, which areshares of Common Stock as of December 31, 2017. The holdings reported were beneficially ownedof recordby investment management clients ofWellington.Franklin Advisory Services, LLC (“FAS”), which is an indirect, wholly owned subsidiary of Franklin Resources, Inc. (“FRI”). FRI treats FAS as having sole investment discretion or voting authority when an investment management contract delegates such power to FAS over the investment advisory accounts subject to such agreements. Pursuant to such treatment, FAS holds sole dispositive and voting power of 1,275,000 shares. Themailingprincipal business address ofWellingtonFAS is280 Congress Street, Boston MA 02210. (5)- 55 Challenger Road, Suite 501, Ridgefield Park, NJ 07660.
(6)The shares listed were reported on a Schedule
13G/A13G filed with the SEC on February10, 2014. Zesiger Capital Group12, 2018, with respect to shares of Common Stock held by investment advisory clients of Wax Asset Management, LLC("Zesiger"(“Wax Asset”)disclaims beneficial ownershipas ofallDecember 31, 2017. Wax Asset holds shared voting power ofthe securities as such securities are held in discretionary accounts which Zesiger manages.1,152,265 shares and sole dispositive power of 1,152,265 shares. Themailingprincipal business address ofZesigerWax Management is460 Park Avenue, 22nd Floor, New York, NY 10022. (6)The shares listed were reported on Schedule 13G/A, filed with44 Cherry Lane, Madison, CT 06443.(7) No non-employee director had the
SEC on February 3, 2014. The shares are owned directly by PPM America Private Equity Fund LP (the "Fund"), which has shared investment and dispositive power. The shares may be deemed to be owned directly by PPM America Capital Partners, LLC ("PPM CP"), the general partner of the Fund. The mailing address of the Fund and PPM CP is 225 West Wacker Drive, Suite 1200 Chicago, IL 60606.(7)No director has aright to obtain beneficial ownership of additional shares within 60 days ofMarch 6, 2014.(8)The 33,322 sharesthe Record Date. Shares held by non-employee directors include all restricted shares awarded, including the following unvested restricted shares with various vesting dates: for Mr.Williams include 10,670 shares held by Williams Family L.P.Macaluso, 53,054; for Mr. Brown, 46,423; for Mr. Mills, 50,024; andwith regard to whichfor Mr.Williams has sole voting and shared investment power. AllObus, 45,603.(8) No named executive officer serving in such role as of the Record Date had the right to obtain beneficial ownership of additional shares
beneficially owned by Mr. Williams are held in a margin account and either are or could be pledged as security for certain margin account transactions.(9)Includes 12,097 shares underlying restricted stock units which may be acquired upon vestingwithin 60 days ofMarch 6, 2014.(10)Representsthe Record Date.(9) The shares
underlying restricted stock units whichreported are based on the Company’s records as of the termination date of such individual’s employment and do not take into account any transactions that maybe acquired upon vesting within 60 days of March 6, 2014.(11)Includes 13,888 shares subject to restriction under Internal Revenue Code Section 409A which vest within 60 days of March 6, 2014.(12)Includes 8,333 shares subject to restriction under Internal Revenue Code Section 409A which vest within 60 days of March 6, 2014.(13)Includes 13,583 shares underlying restricted stock units which may be acquired upon vesting within 60 days of March 6, 2014.(14)Includes 5,871 shares underlying restricted stock units which may be acquired upon vesting within 60 days of March 6, 2014.(15)Represents shares underlying restricted stock units which may be acquired upon vesting within 60 days of March 6, 2014.
(16)- Represents beneficial ownership of our Common Stock held by our current directors and
namedexecutive officers as a group as ofMarch 6, 2014. (17)Includes 34,265 shares underlying restricted stock units which may be acquired upon vestingthe Record Date, including any RSUs exercisable within 60 days ofMarch 6, 2014.
(11) Mr. Holmes resigned from his positions as Co-President and Co-CEO on April 13, 2018.
(12) Ms. Gonzalez resigned from her position as Chief Financial Officer effective May 29, 2018. Upon Ms. Gonzalez’s resignation, Mr. Howsman was appointed interim Chief Financial Officer and principal financial and accounting officer. He was appointed Chief Financial Officer on July 31, 2018.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that the Company'sour executive officers, directors and persons who own beneficially more than 10% percent of the Company'sour outstanding Common Stock file reports of ownership and changes in ownership and furnish the Companyus with copies of all Section 16(a) reports so filed. BasedTo our knowledge, based solely on a review of these reports filed with the SEC and certain written representations furnished to the Company, the Company believesus, we believe that itsour executive officers and directors complied with all applicable Section 16(a) filing requirements during 2013.2017, except that Forms 4 for Mr. Cryan on June 2, 2017, Messrs. Holmes and Pagliara on October 16, 2017 and Mr. Wheelock on April 3, 2018, were inadvertently filed late to report the forfeiture of shares in satisfaction of applicable withholding taxes in connection with the vesting of previously-reported time-based RSUs, and the grant of performance-based RSUs to Mr. Pagliara in August 2016 was reported in a Form 4 filed on June 22, 2018.
The Audit Committee operates under a written charter thatadopted by the Board of Directors, has adopted. Thewhich the Audit Committee reviews the charter. The charter is available under the heading "Corporate Governance" in the Investor Relations section our website at http://www.globalpower.com/.regularly reviews.
The Board of Directors has the ultimate authority for effective corporate governance, including the role of oversight of the management of our Company. The Audit Committee'sCommittee’s purpose is to assist the Board of Directors in fulfilling its responsibilities by overseeing our accounting and financial reporting processes and the audits of our consolidated financial statements and the effectiveness ofreviewing our internal control over financial reporting and the independence, qualifications and performance of the independent registered public accounting firm engaged as our independent auditor, andby the performance of our internal auditors.Company.
The Audit Committee relies on the expertise and knowledge of management the internal auditors and the independent auditorregistered public accounting firm in carrying out its oversight responsibilities. Management is responsible for the preparation, presentation and integrity of our consolidated financial statements, accounting and financial reporting principles, internal control over financial reporting and disclosure controls and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. Management is responsible for objectively reviewing and evaluating the adequacy, effectiveness and quality of our system of internal control. Our independent registered public accounting firm, BDO USA, LLP,Moss Adams, is responsible for performing an independent audit of the consolidated financial statements and for expressing an opinion on the conformity of those financial statements with U.S. generally accepted accounting principles generally accepted in(“GAAP”).
As more fully discussed above under the United Statescaption “Proposal No. 2—Ratification of America. OurIndependent Registered Public Accounting Firm,” effective March 24, 2016, after recommendation by the Company’s management and approval by the Audit Committee and the full Board of Directors, the Company dismissed BDO as its independent registered public accounting firm is also responsiblewith respect to the audit of the Company’s financial statements for expressing an opinion onits 2012 through 2014 fiscal years, and appointed Hein as its new independent registered public accounting firm for all relevant periods. Accordingly, Hein was engaged to re-audit the effectiveness of our internal control overCompany’s financial reporting as ofstatements for the fiscal years ended December 31, 2013.2013 and 2014 and to audit the Company’s subsequent financial statements, beginning for the year ended December 31, 2015 and continuing through periods covered by the 2017 Form 10-K. Effective November 16, 2017, Hein combined with Moss Adams. As a result of that transaction, on November 16, 2017, Hein resigned as the independent registered public accounting firm for the Company and, concurrently, the Audit Committee approved the engagement of Moss Adams as the new independent registered public accounting firm for the Company. The Audit Committee has approved the engagement of Moss Adams to serve as the Company’s independent registered public accounting firm to audit the Company’s financial statements for the fiscal year ending December 31, 2018. The Board of Directors is asking stockholders to ratify this appointment.
During 2013,2017, the Audit Committee fulfilled its duties and responsibilities generally as outlined in the charter. The Audit Committee held four (4)six meetings in 2013.2017. Specifically, the Audit Committee, among other actions:
•·reviewed and discussed our audited consolidated financial statements
of our Companyfor the years ended December 31,20122016 and2013 (which we refer to as2017 (the “2016 Financial Statements” and the"Financial Statements"“2017 Financial Statements”, respectively, and, collectively, the “Financial Statements”),and the effectiveness of our internal control over financial reporting, as well as interim reporting periods endedMarch 31, 2013, June 30, 2013April 2, 2017, July 2, 2017 andSeptember 30, 2013October 1, 2017 with management andBDO USA, LLP;Moss Adams or Hein, as applicable;·
•- discussed with management and
BDO USA, LLPMoss Adams or Hein, as applicable, all the matters required by Auditing Standards No.16,1301, which include, among other items, matters related to the conduct of the audit of the consolidated financial statements; and·
•- received from
BDO USA, LLPMoss Adams or Hein, as applicable, the written disclosures and the letter required by the applicable requirements of thePCAOBPublic Company Accounting Oversight Board (United States) regarding the independentaccountant'saccountant’s communications with the Audit Committee concerning independence (which relates to theauditor'sauditor’s independence from our Company and its related entities), and has discussedBDO USA, LLP's independence.
The Audit Committee has relied on management'smanagement’s representation that the Financial Statements have been prepared in conformity with generally accepted accounting principlesGAAP and on the opinion of BDO USA, LLPHein (with respect to the 2016 Financial Statements) and Moss Adams (with respect to the 2017 Financial Statements) included in their reportreports on the 2016 Financial Statements.Statements and 2017 Financial Statements, respectively. Based upon the aforementioned review, discussions and representations of BDO USA, LLP,Hein and Moss Adams, and the unqualified audit opinionopinions presented by BDO USA, LLPHein and Moss Adams on the 2016 Financial Statements and effectiveness of internal control over financial reporting,2017 Financial
Statements, respectively, the Audit Committee recommended to the Board of Directors that the Financial Statements be included in our Annual Report onthe 2017 Form 10-K for the year ended December 31, 2013 for filing with the SEC.
Submitted by the | ||
Robert B. Mills (Chair) | ||
David A. B. Brown | ||
Charles |
The foregoing report of the Audit Committee does not constitute soliciting material and shall not be deemed filed, incorporated by reference into, or a part of any other filing by the Company (including any future filings) under the Securities Act, except to the extent the Company specifically incorporates such report by reference therein.
* Mr. Macaluso was appointed to the Audit Committee effective April 15, 2018.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Approval of Related Party Transactions
The Board of Directors has adopted a formal written policy governing the review and approval of related person transactions, which is posted under the heading "Corporate Governance"“Corporate Governance” of the Investor Relations section of our website at http://www.globalpower.com/.www.wisgrp.com. For purposes of this policy, consistent with the Nasdaq rules, the terms "related person"“related person” and "transaction"“transaction” are as defined in Item 404(a) of Regulation S-K under the Securities Act of 1933, as amended.S-K. The policy provides that each director, director nominee and executive officer shall promptly notify the Corporate Secretary of any transaction involving the Company and a related person. Such transaction will be presented to and reviewed by the Audit Committee for approval, ratification or such other action as may be appropriate. On an annual basis, the Audit Committee reviews any previously approved related party transaction that is continuing, as well as any related party transaction disclosed in response to our annual directors'directors’ and officers'officers’ questionnaire. The policy itself is annually reviewed and was last reviewed in March 2014.November 2017. While not a party to the Company’s multi-year term debt agreement with funds associated with Centre Lane Partners, LLC, entered into in June 2017, entities associated with Wynnefield Capital at the request of the lenders under the debt agreement, funded $6.0 million of the total amounts borrowed by the Company under such debt agreement. Wynnefield Capital is our largest equity investor and Nelson Obus, a member of our Board of Directors, is the president of Wynnefield Capital. Such debt agreement was refinanced and replaced in September 2018. The entities associated with Wynnefield Capital were fully repaid in connection with the refinancing and are not participating in the funding under the refinanced agreement. Please refer to the discussion in “Item 7. Management’s Discussion and Analysis—Our Credit Facilities” and “Note 10—Debt” to the consolidated financial statements included in the 2017 Form 10-K for more information.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The
Ms. Goodspeed, Mr. Brown and Mr. Taylor served as members of the Compensation Committee during 2013 were Messrs. Cryan, Bartoli, Williams and Davis. None2017. During such time, none of Messrs. Cryan, Bartoli, Williams, or Davisthe aforementioned directors was at any time an officer or employee of the Company. NoneDuring 2017, none of our executive officers serveserved as a member of the board of directors or compensation committee of any entity that hashad one or more executive officers serving as a member of our Board of Directors or Compensation Committee.
Annual Report
The Company will mail without charge, upon written request from any stockholder, a copy of our Annual Report on2017 Form 10-K, for the year ended December 31, 2013, including the financial statements, schedules and list of exhibits. Requests should be sent to Global Power EquipmentWilliams Industrial Services Group Inc., 400 East Las Colinas Boulevard,100 Crescent Centre Parkway, Suite 400, Irving, Texas 75039, Attn:1240, Tucker, Georgia 30084, Attention: Investor Relations.
Delivery of Documents to Stockholders Sharing an Address
A number of brokers with account holders who are stockholders of the Company will be "householding"“householding” our proxy materials, including the Notice of Internet Availability of Proxy Materials.Notice. A single set of the proxy materials, including the Notice, of Internet Availability of Proxy Materials, will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be "householding"“householding” communications to your address, "householding"“householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in "householding"“householding” and would prefer to receive separate proxy materials, please notify your broker, direct a written request to Global Power EquipmentWilliams Industrial Services Group Inc., 400 East Las Colinas Boulevard,100 Crescent Centre Parkway, Suite 400, Irving, Texas 75039, Attn:1240, Tucker, Georgia 30084, Attention: Corporate Secretary, or contact our Corporate Secretary by telephone at 1-214-574-2709(770) 879-4189 or by email at corporatesecretary@globalpower.com.corporatesecretary@wisgrp.com. Stockholders who currently receive multiple copies of the proxy materials at their address and would like to request "householding"“householding” of their communications should contact their broker.
Stockholder Proposals For 20152019 Annual Meeting
In order to be included in the Company'sCompany’s proxy materials for the 2015 Annual Meeting2019 annual meeting of Stockholders,stockholders, a stockholder proposal must be received in writing by the Company at 400 East Las Colinas Boulevard,Williams Industrial Services Group Inc., 100 Crescent Centre Parkway, Suite 400, Irving, Texas 750391240, Tucker, Georgia 30084, Attention: Corporate Secretary by no later than November 20, 2014,June 7, 2019, provided that
the 20152019 annual meeting date is not advanced or delayed by more than 30 days, and otherwise comply with all requirements of the SEC for stockholder proposals.
In addition, the Company'sCompany’s bylaws provide that any stockholder who desires to nominate a person for election as a director or bring a proposal before an annual meeting must give timely written notice of such nomination or proposal to the Company'sCompany’s Corporate Secretary. To be timely, the notice must be delivered to the above address not less than 90 nor more than 120 calendar days prior to the anniversary of the preceding year'syear’s annual meeting. If the annual meeting date is advanced more than 30 days, or delayed by more than 30 days, from the anniversary date of the preceding year'syear’s annual meeting, notice by the stockholder, to be timely, must be so delivered not later than the close of business on the 90th day prior to the annual meeting and the 10th day following the day on which notice of the date of such annual meeting is first given to the stockholders, and not earlier than the 120th day prior to such annual meeting. For our annual meeting to be held in 2015,2019, a notice recommending a director candidate or other proposal must be received no earlier than January 1, 2015July 12, 2019 and no later than January 31, 2015,August 12, 2019, provided that the 20152019 annual meeting date is not advanced or delayed by more than 30 days.
Any such stockholder'sstockholder’s notice shall set forth:
•·as to each person whom the stockholder proposed to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the
SecuritiesExchange Act,of 1934,as amended, and Rule 14a-8 thereunder (including suchperson'sperson’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected);·
•- as to any other proposal, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and
·
•- as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made:
·
•- the name and address of such stockholder, as they appear on the
Company'sCompany’s books, and of such beneficial owner, and·
•- the class and number of shares of the
Company'sCompany’s Common Stock that are owned beneficially and of record by such stockholder and such beneficial owner.
A copy of the Company'sCompany’s bylaws is available upon request from the Company'sCompany’s Corporate Secretary and is available under the heading "Corporate Governance"“Corporate Governance” of the Investor Relations section of our website at http://www.globalpower.com/.
Table of Contentswww.wisgrp.com.
The Board of Directors knows of no other matters to be presented for stockholder action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting or any adjournments or postponements thereof, the Board of Directors intends that the persons named in the proxies will vote upon such matters in accordance with their best judgment.
THE BOARD OF DIRECTORS
Irving, TexasMarch 20, 2014Tucker, Georgia
October 5, 2018
Whether or not you plan to attend the Annual Meeting, please vote via the Internet by following the instructions on the Notice or, if you received printed copies of the proxy materials, by telephone by following the instructions on the enclosed proxy card or by completing, signing, dating and promptly returning the enclosed proxy card. ALL SHAREHOLDERS ARE URGED TO SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING AND VOTE IN PERSON.
You may revoke your vote by the Internet or telephone or your proxy at any time prior to the Annual Meeting. If you are the record holder of the shares and attend the Annual Meeting, you may change your proxy vote automatically by voting in person at the meeting.
Thank you for your attention to this matter. Your prompt response will greatly facilitate arrangements for the Annual Meeting.
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