Pursuant to the requirements of the Sarbanes-Oxley Act of 2002, the terms of the engagement of KPMG
LLP are subject to specific pre-approval policies of the Audit Committee. All audit and permitted non-audit services to be performed by KPMG
LLP require pre-approval by the Audit Committee in accordance with pre-approval policies established by the Audit Committee. The procedures require all proposed engagements of KPMG
LLP for services of any kind be directed to the Company’s Chief Financial Officer and then submitted for approval to the Audit Committee prior to the beginning of any service.
During the year ended December 31, 2013,2016, the Audit Committee reviewed and discussed the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, the Company’s earnings releases and the Company’s audited financial statements with management and with KPMG LLP, prior to their release. In addition, in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, the Audit Committee reviewed and discussed with management, the company’s internal auditors and KPMG LLP, management’s report on the operating effectiveness of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, including KPMG LLP’s related report and attestation. The Audit Committee also discussed with KPMG LLP the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 16,Communications with Audit Committees,Standards relating to the conduct of the audit. The Audit Committee has received the written disclosures and the letter from KPMG LLP required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent accountant’s
communications with the Audit Committee concerning independence and has discussed with KPMG
LLP their independence and satisfied itself as to
KPMG’sKPMG LLP’s independence.
Based on the Audit Committee’s review of the audited financial statements and the review and discussions described in the foregoing paragraph, the Audit Committee recommended to the Board of Directors that the audited financial statements for the fiscal year ended December 31,
20132016 be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
20132016 for filing with the SEC. In addition, the Audit Committee approved KPMG
LLP as the independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ending December 31,
2014.2017.
Notwithstanding anything to the contrary set forth in any of the Company’s previous filings under the Securities Act of 1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) that might incorporate future filings made by the Company under either the Securities Act or the Exchange Act, in whole or in part, this report shall not be deemed to be incorporated by reference into any such filings, nor will this report be incorporated by reference into any future filings made by the Company under either the Securities Act or the Exchange Act.
A. Marvin Strait, Chairman
Daniel M. Friedberg
Sue W. Kelly
Samuel D. Robinson
Richard C. Pfenniger, Jr.
Required Vote and Board Recommendation
Approval of
thethis proposal
to ratify the appointment of KPMG as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2014 (Proposal 2) requires the affirmative vote of a majority of the votes cast
by holders of shares of Common Stock aton the
Annual Meeting.matter.
The Board of Directors recommends a vote FOR the proposal to ratify the appointment of KPMG
LLP as the Company’s
independent registered public accounting firm for the fiscal year ending December 31, 2014.
2017.
Compensation Committee
The Compensation Committee of our Board of Directors consists of three non-employee directors. The charter of the Compensation Committee may be viewed by accessing the “Corporate Governance” page of our website and clicking on “Committee and Charter Info.” A copy of this document is also available in print, without charge, upon request to our Corporate Secretary.
The Compensation Committee is responsible for establishing and administering our policies governing the compensation of our executive officers and directors. The responsibilities of the Compensation Committee include the following:
| · | Develop guidelines and review and approve corporate goals relevant to the compensation of the Chief Executive Officer, evaluate the Chief Executive Officer’s performance in light of these goals and objectives, and set the Chief Executive Officer’s compensation based on this evaluation; |
| · | Produce an annual report on executive compensation for inclusion in our proxy statement, in accordance with applicable rules and regulations; |
| · | Make recommendations to the Board with respect to the compensation of our executive officers and incentive-compensation plans and equity-based plans, and establish criteria for the granting of stock-based compensation to our officers and other employees, and review and approve the granting of stock-based compensation in accordance with such criteria; |
| · | Review director compensation levels and practices, and recommend from time to time, changes in such compensation levels and practices to the Board, with equity ownership in the Company encouraged; |
| · | Annually review and reassess the adequacy of the charter of the Compensation Committee and recommend any proposed changes to the Board for approval; and |
| · | Make recommendations to the Board with respect to (a) committee member qualifications, (b) committee member appointments and removals, (c) committee structure and operations, and (d) committee reporting to the Board. |
Develop guidelines and review and approve corporate goals relevant to the compensation of the Chief Executive Officer, evaluate the Chief Executive Officer’s performance in light of these goals and objectives, and set the Chief Executive Officer’s compensation based on this evaluation;
Produce an annual report on executive compensation for inclusion in our proxy statement, in accordance with applicable rules and regulations;
Make recommendations to the Board with respect to the compensation of our executive officers and incentive-compensation plans and equity-based plans, and establish criteria for the granting of stock-based compensation to our officers and other employees, and review and approve the granting of stock-based compensation in accordance with such criteria;
Review director compensation levels and practices, and recommend from time to time changes in such compensation levels and practices to the Board, with equity ownership in the Company encouraged;
Annually review and reassess the adequacy of the charter of the Compensation Committee and recommend any proposed changes to the Board for approval; and
Make recommendations to the Board with respect to (a) committee member qualifications, (b) committee member appointments and removals, (c) committee structure and operations, and (d) committee reporting to the Board.
The Compensation Committee is responsible for making compensation decisions regarding
the Executive Management Team, which includes the Chief Executive Officer, the President, the Chief Financial Officer and our other executive officers. The Compensation Committee is also involved in making compensation decisions regarding certain key non-executive officer employees.
Topics discussed by the Compensation Committee during 2013 meetings included, but were not limited to, the following:
| · | Competitive compensation and stock awards for the Executive Management Team; |
| · | Review and approval of certain amendments to the Committee’s charter; |
| · | Review and approval of stock awards, bonus awards and salary changes for the Executive Management Team and non-executive officers with a rank of Vice President or above and certain other key employees; and |
| · | Review of stock compensation policy for officers and employees in general. |
None of the members of the Compensation Committee is a current or former officer or employee of ours.
Compensation Discussion & Analysis
This Compensation Discussion and Analysis explains our compensation philosophy, policies and practices with respect to our Chief Executive Officer, Chief Financial Officer, and the other three
most highly-compensated executive officers, who are collectively referred to as the named executive officers. This discussion focuses on theNamed Executive Officers. The information contained in the following tables and related footnotes and narrative discussions
forfocuses primarily
on the last completed fiscal year, but we also describe compensation actions taken before or after the last completed fiscal year to the extent they enhance the understanding of our executive compensation disclosure.
Results of 2016 Stockholder Say on Pay Vote
At our
20132016 annual meeting of stockholders
held on June 18, 2013, we provided our
stockholders the opportunity to vote to approve, on an advisory basis, the compensation of our named executive officers in 2012 as disclosed in the proxy statement for that meeting. Our stockholders overwhelmingly approved the compensation of our
named executive officers,Named Executive Officers, with
15,171,98414,205,858 shares voting in favor (representing over
96%90% of shares voted and approximately
80%85% of shares outstanding),
401,865236,995 shares voting against,
228,20015,835 shares abstaining and
1,410,953791,182 shares held by brokers not voting. These results
mirrorare similar to the stockholder votes on executive compensation at our
20122015 annual meeting of stockholders, so we believe that our stockholders are generally supportive of the amounts and the manner in which
named executive officersNamed Executive Officers have been compensated.
Although the vote was held after the Compensation Committee had determined some of the compensation to be paid to the named executive officers for 2013, the Compensation Committee and the Board were at least indirectly influenced by the 2012 and 2013 stockholders votes in determining executive compensation for 2013. However, theThe past results of the
2013 shareholderstockholder advisory vote on executive compensation, particularly the strong support expressed by the stockholders,
will continue to be one ofwere among the many factors considered
by the Compensation Committee in
future decisions. Ourmaking its decisions regarding executive compensation
policies and procedures remain consistent with the policies and procedures in
effect in 2012.2016.
Compensation Philosophy and Objectives
The Compensation Committee seeks to provide compensation programs designed to:
| · | Attract and retain talented and dedicated executives; |
| · | Motivate and reward executives whose knowledge, skills, potential and performance are critical to our success; and |
| · | Align the interests of our executive officers and shareholders by motivating executive officers to increase shareholder value and rewarding executive officers when shareholder value increases. |
Attract and retain talented and dedicated executives;
Motivate and reward executives whose knowledge, skills, potential and performance are critical to our success; and
Align the interests of our executive officers and stockholders by motivating executive officers to increase stockholder value and rewarding executive officers when stockholder value increases.
The Compensation Committee believes that the most effective compensation program is one that provides competitive base pay, rewards the achievement of goals and objectives, and provides an incentive for retention. The principal elements of our executive compensation program are base salary, annual cash incentives, long-term equity incentives (the vesting of which may accelerate upon termination of employment and/or a change in control), other benefits and perquisites and post-termination severance compensation.
Base salary, benefits, and limited perquisites are designed to attract and retain highly qualified individuals. Also, in order to avoid excessive risk taking, it is important that not all cash compensation be variable. Annual cash incentive compensation awards are designed to focus the entire senior executive team, including the Named Executive Officers, toward achieving our goals while recognizing their individual contributions. Long-term equity incentives are designed to align the interests of our Named Executive Officers with our stockholders, reward overall enterprise performance, and encourage the retention of the Named Executive Officers by providing additional opportunities for them to participate in the ownership of the Company and its future growth.
Setting Executive Compensation
Each year we
We typically evaluate annually whether the elements of our executive compensation program are aligned with our compensation philosophy and objectives, while also promoting the interests of our shareholders.stockholders. As part of this evaluation, we subscribe annually to a number of compensation data resources to evaluate the compensation of our executive officers compared to similar positions in the marketplace, including resources published by Kenexa, Mercer and Western Management Group which provide base salary and bonus compensation data. In general, our objective is to compensate our executive officers at levels between the 50th and 75th percentiles for executives in similar positions at similarly sized companies, which we believe usually allows us to satisfy the objectives described above. The Compensation Committee has sometimes deemed it appropriate to compensate certain executives at levels outside the 50th to 75th percentile for executives in similar positions due to the executives’ experience and the market for executives with similar experience, scope of responsibility, accountability and impact on our operations, and the impact their departure could potentially have on our performance. In addition, to assist management and the Compensation Committee in assessing and determining competitive compensation packages, at times we have engaged an independent compensation consultant to evaluate the compensation of certain executive officers and other key employees. We did not engage a compensation consultant in 20132016 to evaluate our compensation structure and did not increase the salaries of our executive officers in 2013.2016. In 2012,2015 we engaged Frederic W. Cook &and Co., Inc. (the “compensation consultant”"compensation consultant") to assess the competitiveness of compensation levels for certain of our officers, including our named executive officers, relative to peer group and survey market data. The Company determined that the compensation consultant was independent.In 2012,2015, the Compensation Consultant analyzed the long-term incentive compensation consultant prepared an analysis (the “Executive Compensation Analysis”) which evaluated the base salaries, annual cash incentives and long-term equity incentives forof our named executive officersNamed Executive Officers compared to corresponding data in the 25
th percentile, 50th percentile and 75th percentile for executives in similar positions in the peer group and infrom the survey market data. The results of the Executive Compensation Analysis showed that overall compensation levels for our named executive officers were below the 25th percentiles of the peer group and survey market data analyzed. This is primarily the result of below market annual cash bonuses and the irregular granting of equity awards. Base salaries for the named executive officers were also below the median levels relative to the peer group.Based on the Compensation Committee’s evaluation of the Executiveinformation provided by the Compensation AnalysisConsultant and the performance of the Company and the named executive officers,Named Executive Officers, on March 30, 2015 the Compensation Committee recommended increasingapproved an incentive program under which a target level of equity compensation and the salaries of the named executive officers (whichmix between time and performance-based equity compensation was approved by the full Board of Directors, with Mr. Greenberg abstaining)set for each officer and is described in September 2012 and approved the granting of restricted stock units to the named executive officers in August 2012 and November 2013. Except as describedmore detail below ourunder
Long-Term Equity Incentive Compensation Committee has not adopted any formal or informal policies or guidelines for allocating compensation between long-term and currently paid out compensation, between cash and non-cash compensation, or among different forms of non-cash compensation. However, in October 2013 the Committee asked management to prepare and submit a comprehensive plan for annually reviewing the compensation of executive officers and other members of senior management.
.
General
Salaries are typically considered annually, as well as upon promotion or other change in job responsibility.
The Compensation Committee, with input from the Chief Executive Officer, considers competitive, individual and company performance data in order to make or recommend compensation decisions that will incentivize, retain and maintain a competitive standing for each executive officer. The Compensation Committee considers several factors when adjusting an executive’s salary, including individual and companyCompany performance, the executive’s market value and prospective value to us, the knowledge, experience and accomplishments of the executive, the executive’s level of responsibility, the recommendation of the Chief Executive Officer as to officers other than the Chief Executive Officer, and the compensation levels for individuals with similar credentials. As discussed above, we did not increase the salaries of our executive officers in 2013.
2016. The Compensation Committee previously approved salary increases for the Named Executive Officers effective on April 1, 2015. The salary increases were based on survey market data and resulted in the executives' salaries being at levels between the 50
th and 75th percentiles for executives in similar positions at similarly sized companies.
Cash-Based Incentive Compensation (Bonus)
Bonuses to our Chief Executive Officer and President
The employment agreements with our Chief Executive Officer and our President contain formulas for determining their annual cash bonuses. The formula ties the bonus payable to them to increases in our earnings before income taxes, depreciation and amortization (“EBITDA”) compared to the prior year, as adjusted for acquisitions and dispositions and other extraordinary or unusual nonrecurring items as defined in their employment agreements. EBITDA is a widely used non-GAAP financial measure of operating performance. EBITDA is calculated from our audited financial statements by adding back interest expense, income tax expense, depreciation and amortization to net income, and adjusting for certain non-recurring items such as gains or losses on the change in fair value of contingent consideration. Under their employment agreements, the Chief Executive Officer’s and President’s bonuses are (a) 1% of base salary for each 1% increase in EBITDA, up to a 10% increase; (b) then 2% of base salary for each 1% increase in EBITDA, up to a 15% increase; (c) then 3% of base salary for each 1% increase in EBITDA, up to a 25% increase; subject to a maximum bonus for any calendar year of 50% of his base salary for that year. In calculating the bonus for Mr. Greenberg and Mr. Sharp, for any year in which we acquire any business, the formula set forth in their employment agreements requires that EBITDA for the prior year be adjusted to reflect the budgeted EBITDA of the acquired business (as set forth in the budget numbers on which the acquisition was based) for the period from the date of the acquisition to the end of the calendar year in which the acquisition takes place.
For
2013,2016, our EBITDA, as adjusted for acquisitions
and other unusual nonrecurring items in
20132016 and
2012, increased 1.1%2015, decreased 4%.
For 2013,As a result, no bonuses were paid to Mr. Greenberg or Mr. Sharp with respect to the
bonuses determined in accordance withyear ended December 31, 2016 pursuant to their employment agreements
(the “Employment Agreement Bonuses”) were $4,720, or
1% of salary, for Mr. Greenberg, and $4,250, or 1% of salary, for Mr. Sharp. The Employment Agreement Bonuses for fiscal 2013 are reflected in the column entitled “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table. The Committee believed that higher bonus amounts were warranted, so in order to pay Mr. Greenberg and Mr. Sharp bonuses of $40,000 each, in addition to the Employment Agreement Bonuses, the Compensation Committee approved additional discretionary bonuses of $35,280 for Mr. Greenberg and $35,750 for Mr. Sharp based upon our 2013 financial and operating performance as well as other factors not deemed to be adequately represented in the employment agreement formulas, including devoting substantial management attention to winning larger global accounts. These additional discretionary bonuses are reflected in the column entitled “Bonuses” in the Summary Compensation Table.otherwise.
Bonuses to our other Named Executive Officers
Our
Cash Bonus PlanShort-Term Incentive Program (the
“Bonus Plan”"STIP")
that went into effect in March 2016 provides for the payment of cash bonuses to eligible employees
of the Company and
executive officers,its subsidiaries, including
the named executive officers except forNamed Executive Officers Sharon Esposito-Mayer, Donald Duquette and Karl Baer. Scott Greenberg
and Douglas Sharp, the Company’s Chief Executive Officer and
Douglas Sharp, President,
whorespectively, are not
currently eligible to participate in the
Bonus PlanSTIP as their
cash bonuses
fallare determined under their individual employment agreements as
detailed above.described above.
The Bonus Plan contains separate formulasSTIP divides eligible employees into categories based on their levels of responsibility and incentivesalso establishes a general pool for paying cash bonuses to all other eligible employees of the Company. For each category of participants (other than those in the general pool), the STIP establishes the amount of cash bonus opportunity, types of performance objectives, and allocation of bonus among those types of performance objectives. The specific performance objectives to be used and the thresholds for earning part or all of the bonus opportunity allocated to each of those objectives are established each year in accordance with the terms of the plan applicable for the executive team,category. The STIP also provides for bonus payments to be made to participants in addition to the bonus opportunity applicable for each category if the Company’s performance exceeds an aggressive goal established annually, but the total amount paid to any employee under the STIP may not exceed 100% of the employee’s annual base salary. In addition to giving more weight to company performance objectives than the previous cash bonus plan, the STIP provides for the establishment of minimum thresholds for group or business unit leaders and all other employees. Eachperformance that must be achieved for an employee in a group or business unit to earn the part of the plan sets forth, among other things, (1)bonus attributable to Company performance objectives in order to assure an acceptable minimum level of group and business unit performance.
Employees in the executive category (which includes the participating Named Executive Officers) have a cash bonus opportunity of 50% of annual base salary which levelsis earned based on achievement against a mix of executives or employees are eligible to participate in that partCompany, group, and individual objectives. 70% of the plan, (2)cash bonus opportunity is allocated to achievement of Company performance objectives, 20% is allocated to achievement of group performance objectives, and 10% is allocated to achievement of individual performance objectives. The Company and group performance objectives are each further divided into an income before tax growth objective and a revenue growth objective.
The bonus opportunities in the other categories of the STIP range from 10%-30% depending on the level of responsibility of participants in the category.
There is also a general pool to fund discretionary cash bonuses to eligible employees not assigned to one of the other categories. The method
offor determining the amount of
bonusesthe general pool available for
distribution under that part of the plan, and (3) performance criteriasuch discretionary cash bonuses is to be
used in determining the amount, if any, of each participant’s bonus. For purposes of the Bonus Plan, our executive team includes the aforementioned named executive officers and certain other executive and senior vice presidents. The total bonus pool that may be allocated among the executive team will not exceed 50% of the executive team’s total base salaries and is determined by using a formula based on our revenue growth and pre-tax income growth over the prior year’s results. Once the bonus pool is established
the amount of each executive team member’s potential cash bonus, if any, is determined using a score (up to 100 points) given to each executive team member based upon the attainment of the performance objectives recommended by the Chief Executive Officer and approved by the Compensation Committee of the Board of Directors. Performance objectives include specific corporate level, group level (or for executive team members who are not group leaders, additional corporate level) and individual objectives. Corporate level and group level objectives are based on revenue and pre-tax income growth of the Company and the operating group within the Company for which the executive is responsible, compared to the prior fiscal year results, adjusted for acquisitions during the year and other non-recurring items when deemed appropriate.Except for the Chief Financial Officer and any executive who does not manage an operating group, executive team members could achieve maximum scores of 15 points under the Bonus Plan for corporate revenue growth of 10% or more and 15 additional points for corporate pre-tax income growth of 20% or more, and maximum scores of 25 points under the Bonus Plan for group revenue growth of 15% or more and 25 additional points for group gross profit growth of 30% or more. Achievement of individual goals may add up to 20 more points to each executive team member’s score.
annually.
The table below
sets forthsummarizes the
various thresholdsallocation of
financialthe bonus opportunity among each applicable annual performance
and the resulting number of points for each performance measure for executives under the Bonus Plangoal set for the year ended December 31,
2013 (results are interpolated). The minimum number of points for each2016, the maximum potential bonus, performance
measure is zerogoals at threshold and target values and the
maximum is as set forthactual scores and calculated bonuses for our Named Executive Officers that participate in the
table. We do not establish target levels for the performance measures.Bonus Plan Scoring System
Performance Measures for Executives
Managing Operating Groups
| | Performance Measures for Chief Financial Officer
and non-operations Executives
|
Corporate revenue growth of 0% = 0 points
Corporate revenue growth of 2% = 3 points
Corporate revenue growth of 4% = 6 points
Corporate revenue growth of 6% = 9 points
Corporate revenue growth of 8% = 12 points
Corporate revenue growth of 10% = 15 points
| | Corporate revenue growth of 0% = 0 points
Corporate revenue growth of 2% = 5 points
Corporate revenue growth of 4% = 10 points
Corporate revenue growth of 6% = 15 points
Corporate revenue growth of 8% = 20 points
Corporate revenue growth of 10% = 25 points
|
| | |
Corporate pre-tax income growth of 0% = 0 points
Corporate pre-tax income growth of 5% = 3.75 points
Corporate pre-tax income growth of 10% = 7.5 points
Corporate pre-tax income growth of 15% = 11.25 points
Corporate pre-tax income growth of 20% = 15 points
| | Corporate pre-tax income growth of 0% = 0 points
Corporate pre-tax income growth of 5% = 6.25 points
Corporate pre-tax income growth of 10% = 12.5 points
Corporate pre-tax income growth of 15% = 18.75 points
Corporate pre-tax income growth of 20% = 25 points
|
| | |
Group revenue growth of 0% = 0 points
Group revenue growth of 5% = 8.3 points
Group revenue growth of 10% = 16.7 points
Group revenue growth of 15% = 25 points
| | US G&A expense increases over prior year by 7% or > = 0 points
US G&A expense increases over prior year by 6% or < = 6 points
US G&A expense increases over prior year by 5% or < = 12 points
US G&A expense increases over prior year by 4% or < = 18 points
US G&A expense increases over prior year by 3% or < = 24 points
US G&A expense increases over prior year by 2% or < = 30 points
|
Group gross profit growth of 0% = 0 points
Group gross profit growth of 10% = 8.3 points
Group gross profit growth of 20% = 16.7 points
Group gross profit growth of 30% = 25 points
| |
| | |
Achievement of individual strategic objectives to be set individually by the CEO or President for each executive team member to equal = 20 possible points. | | Achievement of individual strategic objectives to be set individually by the CEO or President for each executive team member to equal = 20 possible points. |
| | |
Total potential score = 100 points | | Total potential score = 100 points |
The table below summarizes the points earned under the Bonus Plan by Sharon Esposito-Mayer, Donald R. Duquette and Kenneth L. Crawford for the year ended December 31, 2013 (out of a total maximum of 100 points).
| | | Scoring Against Performance Measures | | | | |
| Executive Officer | | Corporate
revenue
growth (1) | | | Corporate
pre-tax
income
growth (2) | | | Group
revenue
growth | | | Group
gross
profit
growth | | | G&A
expense
increase
over prior
year | | | Individual
objectives
(3) | | | Total
points
earned | |
| Sharon Esposito-Mayer | | | 5 | | | | 0 | | | | N/A | | | | N/A | | | | 13 | (4) | | | 15 | | | | 33 | |
| Donald R. Duquette | | | 3 | | | | 0 | | | | 16 | (5) | | | 13 | (5) | | | N/A | | | | 20 | | | | 52 | |
| Kenneth L. Crawford | | | 5 | | | | 0 | | | | N/A | | | | N/A | | | | 0 | | | | 20 | | | | 25 | |
|
| | | | | | | | | | | | | | |
| | | 2016 Bonus Targets by Performance Goal |
| | | % of Bonus Target | | Maximum Potential Bonus | | Performance Goal at Threshold (20% Payout) | | Performance Goal at Maximum (100% Payout) | | Actual Score | | 2016 Bonus |
| Sharon Esposito-Mayer | | | | | | | | | | | | |
| Company revenue | | 14% | | $ | 25,200 |
| | $516 million | | $531 million | | 0% | | |
| Company pre-tax income | | 56% | | $ | 100,800 |
| | $38.0 million | | $43.0 million | | 0% | | |
| SG&A expense | | 20% | | $ | 36,000 |
| | $45.6 million | (1) | $43.8 million | (1) | 9% | (2) | |
Individual objectives (3) | | 10% | | $ | 18,000 |
| | | | | | 5% | | |
| Total | | 100% | | $ | 180,000 |
| | | | | | 14% | | $25,250 (4) |
| | | | | | | | | | | | | |
| Donald R. Duquette | | | | | | | | | | | | |
| Company revenue | | 14% | | $ | 24,500 |
| | $516 million | | $531 million | | 0% | | |
| Company pre-tax income | | 56% | | $ | 98,000 |
| | $38.0 million | | $43.0 million | | 0% | | |
| Group revenue | | 4% | | $ | 7,000 |
| | $220.2 million | | $226.6 million | | 0% | | |
| Group gross profit | | 16% | | $ | 28,000 |
| | $35.1 million | | $39.8 million | | 12.3% | (2) | |
Individual objectives (5) | | 10% | | $ | 17,500 |
| | | | | | 2.1% | | |
| Total | | 100% | | $ | 175,000 |
| | | | | | 14.4% | | $25,193 (4) |
| | | | | | | | | | | | | |
| Karl Baer | | | | | | | | | | | | |
| Company revenue | | 14% | | $ | 22,750 |
| | $516 million | | $531 million | | 0% | | |
| Company pre-tax income | | 56% | | $ | 91,000 |
| | $38.0 million | | $43.0 million | | 0% | | |
| Group revenue | | 4% | | $ | 6,500 |
| | $126.5 million | | $130.2 million | | 0% | | |
| Group gross profit | | 16% | | $ | 26,000 |
| | $23.0 million | | $26.1 million | | 0% | | |
Individual objectives (5) | | 10% | | $ | 16,250 |
| | | | | | 0% | | |
| Total | | 100% | | $ | 162,500 |
| | | | | | 0% | | $0 |
__________________________
| |
| (1) | Based on consolidated organic revenue growth of 2% for the year ended December 31, 2013.Represents SG&A expense excluding amortization, bad debt expense and certain other expenses. |
| |
| (2) | Zero points earned due to a decline in organic pre-tax income forActual performance between the year ended December 31, 2013.threshold and maximum amounts are interpolated. |
| |
| (3) | The Compensation Committee did not establish specificMs. Esposito-Mayer's individual performance objectives included department cost reduction, process improvement and efficiency, improvement of corporate support to operations, and improvement of company profitability or point values at the beginning of 2013 and points were granted based on the subjective evaluationcompany cash flow. Actual score was subjectively determined by the Chief Executive Officer and President of each individual’sthe executive's performance against their strategicher objectives. |
| |
| (4) | Based on a 5% increaseActual bonus is calculated by multiplying the actual bonus target score multiplied by 50% of the executive's base salary. Annual bonuses for 2016 were paid in U.S. G&A expenses forcash after review and approval by the year ended December 31, 2013.Compensation Committee in March 2017. |
| |
| (5) | Based on 9% organic revenue growthThe individual performance objectives for both Mr. Duquette and 16% organic gross profit growthMr. Baer included generating cross-selling opportunities for other groups and cash flow management initiatives. Actual score was subjectively determined by the Learning Solutions group forChief Executive Officer of the year ended December 31, 2013.executives' performance against their objectives. |
The total bonus pool for the executive team, which included seven executives, was $100,400 and the total of all executive team members’ scores earned was 174 points for the year ended December 31, 2013. In contrast, the total bonus pool for the executive team for the year ended December 31, 2012, was $881,000 and the total of all executive team members’ scores earned was 457 points. Under the Bonus Plan, each executive team member’s calculated bonus would have been equal to the amount of the bonus pool multiplied by the percentage determined by dividing such executive team member’s score by the total of all executive team members’ scores, which would have resulted for the year ended December 31, 2013, in bonus amounts payable based on the achievement of the above performance measures of $19,200 for Ms. Esposito-Mayer, $30,100 for Mr. Duquette and $14,600 for Mr. Crawford. However, Mr. Greenberg recommended and the Compensation Committee approved total bonuses of $40,000 for Ms. Esposito-Mayer and $50,000 for Mr. Duquette, and $20,000 for Mr. Crawford based upon the Company’s 2013 overall financial and operating performance. The difference between the amounts calculated under the Bonus Plan and the bonus amounts actually approved are treated as additional discretionary bonuses and reflected in the column entitled “Bonuses” in the Summary Compensation Table. Annual bonuses for 2013 were paid in cash after review and approval by the Compensation Committee in March 2014.
Long-term Equity Incentive Compensation
Our Compensation Committee also grants to the
named executive officersNamed Executive Officers equity compensation under our incentive stock plan. Equity compensation for the
named executive officers,Named Executive Officers, which has historically taken the form of stock options and restricted stock units, is designed to align the interests of our executives with our
shareholdersstockholders as well as to retain the executives. Equity grants are also intended to drive long term performance, in that the value ultimately realized is linked to stock price appreciation. Option grants have no value without stock price appreciation, and restricted stock has value at grant that can increase with stock price appreciation and decrease with stock price declines. Thus, the Compensation Committee believes that equity grants should motivate management to enhance the value of our common stock.
We do not have a formal policy for issuing equity compensation and do not always grant equity awards on an annual or other regular basis.
The Compensation Committee awards equity compensation to supplement our executive officers’ compensation to ensure that total compensation is competitive in the marketplace and to align compensation with our long term goals and objectives.
We have not historically had a formal policy for issuing equity compensation and did not always grant equity awards on an annual or other regular basis. However, during the last several years we have typically made annual grants of restricted stock.
In November 2013,March 2015, the Compensation Committee approved an incentive program providing for the issuance to certain key executives of performance-vesting and time-vesting restricted stock units under the Company’s 2011 Stock Incentive Plan (the “2011 Plan”). In connection with developing the program, the Compensation Committee considered information provided by the Compensation Consultant regarding competitive levels of target long-term incentive compensation, the mix of performance-vesting and time-vesting long-term incentive compensation, and appropriate performance measures to link the executive’s compensation to creation of value for the stockholders.
Under the program, a target level of equity compensation is set for each officer. The target level is determined by multiplying the officer’s annual base salary by a number, which for Mr. Greenberg is 1.4, for Mr. Sharp is 1.0, for Ms. Esposito-Mayer is 0.9, and for Messrs. Baer and Duquette is 0.75. The total equity compensation is divided into performance-based and time-based restricted stock units. For the grant made in 2016, 75% of Mr. Greenberg’s target equity compensation was in the form of performance-based restricted stock units and 25% was in the form of time-based restricted stock units. For all other participants, 60% of his or her target equity compensation was in the form of performance-based restricted stock units and 40% was in the form of time-based restricted stock units. Under the program, the Compensation Committee sets the performance-vesting goal or goals within the first 90 days of each year. In March 2017, the Compensation Committee revised the allocation of the executives' equity compensation between performance-based and time-based restricted stock. For the grant made in 2017, 100% of Mr. Greenberg's target equity compensation is in the form of performance-based restricted stock units and for all other participants, 75% of his or her target equity compensation is in the form of performance-based restricted stock units and 25% is in the form of time-based restricted stock units.
Pursuant to the authority granted to it under the 2011 Plan, on March 29, 2016 the Compensation Committee granted
a total of 80,575performance-vesting restricted stock units to certain
of our officers,
including Messrs. Greenberg, Sharp, Baer and
key employees (of which 31,110 were grantedDuquette and Ms. Esposito-Mayer, and established the performance-vesting measures and targets for the performance period applicable to the
named executive officers). This was the only long-term equity incentive compensation grantedgrants. Employees will not be entitled to the
named executive officers in 2013. Theperformance-based restricted stock units
were granted pursuant to our 2011 Stock Incentive Plan and vest 20% annually over five years subsequentunless they are an employee through the end of a three-year performance period running through December 31, 2018, except in case of the recipient's death or disability, retirement, or upon a change in control, which will result in pro rata vesting to the
extent that the Compensation Committee determines that the targets it established have been achieved. For the 2016-2018 performance period, the Compensation Committee authorized 50% of each grant
date.to vest based on a target level of average annual return on capital (“ROIC”) and 50% of each grant to vest based on average annual growth in EBITDA (adjusted to exclude the effect of acquisitions, dispositions, and certain other nonrecurring or extraordinary items) (“Adjusted EBITDA”). The
following namedCompensation Committee believes that ROIC and Adjusted EBITDA are appropriate performance measures for aligning executive
officers were grantedcompensation with creation of stockholder value. There is no vesting with regard to the ROIC goal until approximately 77% of the goal is satisfied, at which point 20% of applicable units vest. Between approximately 77% and 100% of the ROIC goal, the number of units vesting increases proportionately. There is no vesting with regard to the Adjusted EBITDA goal until approximately 78% of the goal is satisfied, at which point 20% of the applicable units vest. Between approximately 78% and 100% of the Adjusted EBITBA goal, the number of units vesting increases proportionately. If 100% or more of either goal is satisfied, there is full vesting of the units associated with that goal. Up to 71,918 shares of our common stock could be issued in respect of the performance-vesting restricted stock units
granted in
2013:| Name | | Number
of Stock
Units | | | Grant Date
Fair Value | |
| Scott N. Greenberg | | | 9,030 | | | $ | 264,218 | |
| Sharon Esposito-Mayer | | | 5,020 | | | $ | 146,885 | |
| Douglas E. Sharp | | | 9,030 | | | $ | 264,218 | |
| Donald R. Duquette | | | 4,015 | | | $ | 117,479 | |
| Kenneth L. Crawford | | | 4,015 | | | $ | 117,479 | |
2016 if the target performance levels established by the Compensation Committee for both corporate objectives are achieved or exceeded during the 2016-2018 performance period.
Also on March 29, 2016, pursuant to the authority granted to it under the 2011 Plan, the Compensation Committee granted time-vesting restricted stock units to the same officers. The time-vesting restricted stock units will vest if the employee is still employed by us on December 31, 2018. After taking into account target compensation, the performance-vesting versus time-vesting mix under the program, and the closing stock price of the Company’s common stock on March 29, 2016, the Compensation Committee granted to each of the Named Executive Officers the following time-vesting and performance-vesting restricted stock units:
|
| | | | | | |
| Name | | Performance-Based Restricted Stock Units | | Time-Based Restricted Stock Units | | Total Restricted Stock Units |
| Scott N. Greenberg | | 21,802 | | 7,267 | | 29,069 |
| Sharon Esposito-Mayer | | 7,208 | | 4,805 | | 12,013 |
| Douglas E. Sharp | | 11,568 | | 7,712 | | 19,280 |
| Donald R. Duquette | | 5,840 | | 3,893 | | 9,733 |
| Karl Baer | | 5,423 | | 3,615 | | 9,038 |
We also provide our
named executive officersNamed Executive Officers with the following other benefits as part of our overall compensation program and which we believe are consistent with the types of benefits offered by competitors:
| · | Retirement Savings Plan: We maintain a defined contribution 401(k) plan in which all eligible employees may participate. The company may make matching contributions under the 401(k) Plan at its discretion equal to a uniform percentage of the first 7% of base compensation for eligible employees. |
| · | Health and Welfare Benefits: All full-time employees, including our named executive officers, may participate in our health and welfare benefit programs, including medical, dental and vision care coverage, disability insurance and life insurance. |
| · | Life Insurance Premiums: Life insurance policies, in excess of the standard life insurance plans offered to full-time employees, are offered to the named executive officers. During 2013, the executive life insurance policies provided coverage up to five times the executive’s annual base salary. The premiums are fully paid by us. A policy may, at the executive’s election, be transferred to the executive upon termination of employment. |
| · | Automobile Allowances: During 2013, each of the named executive officers either used a vehicle leased or owned by us for both business and personal use or received a monthly car allowance in lieu of using a vehicle leased or owned by us. |
Retirement Savings Plan: We maintain a defined contribution 401(k) plan in which all eligible employees may participate. The company may make matching contributions under the 401(k) Plan at its discretion equal to a uniform percentage of the first 7% of base compensation for eligible employees.
Health and Welfare Benefits: All full-time employees, including our Named Executive Officers, may participate in our health and welfare benefit programs, including medical, dental and vision care coverage, disability insurance and life insurance.
Life Insurance Premiums: Life insurance policies, in excess of the standard life insurance plans offered to full-time employees, are offered to the Named Executive Officers. During 2016, the executive life insurance policies provided coverage up to five times the executive’s annual base salary. The premiums are fully paid by us. A policy may, at the executive’s election, be transferred to the executive upon termination of employment.
Automobile Allowances: During 2016, each of the Named Executive Officers either used a vehicle leased or owned by us for both business and personal use or received a monthly car allowance in lieu of using a vehicle leased or owned by us.
Employment Agreements, Severance Benefits and Change in Control Provisions
All of our
named executive officersNamed Executive Officers have written employment agreements which provide for separation payments and benefits upon termination of employment under certain circumstances. Post-termination payments with respect to these executives are set forth in their respective employment agreements. The termination provisions for these executives are summarized in the “Potential Payments upon Termination or Change in Control” section later in this report.
Tax Deductibility of Executive Compensation
Limitations on deductibility of compensation may occur under Section 162(m) of the Internal Revenue Code, which generally limits the tax deductibility of compensation paid by a public company to its chief executive officer and certain other highly compensated executive officers to $1 million in the year the compensation becomes taxable to the executive officer. There is an exception to the limit on deductibility for performance-based compensation that meets certain requirements. We intend that compensation paid under our incentive plans be generally fully deductible for federal income tax purposes. However, the Compensation Committee may approve compensation that exceeds the $1 million limitation in order to ensure competitive levels of total compensation for our executive officers.
Summary Compensation Table
The following table sets forth all compensation earned by each of the
named executive officersNamed Executive Officers for the years ended December 31,
2013, 20122016, 2015 and
2011.2014. The
named executive officersNamed Executive Officers are the Chief Executive Officer and the Chief Financial Officer, and the three other most highly compensated officers who were serving as executive officers at December 31,
2013.Name and
principal
position | | Year | | | Salary
($) | | | Bonus
($) (1) | | | Stock
Awards
($) (2) | | | Option
Awards
($) | | | Non-Equity
Incentive Plan
Compensation
($) | | | All Other
Compensation
($) (5) | | | Total ($) | |
| Scott N. Greenberg | | | 2013 | | | | 472,000 | | | | 35,280 | | | | 264,218 | | | | — | | | | 4,720 | (3) | | | 19,925 | | | | 796,143 | |
| Chief Executive | | | 2012 | | | | 416,583 | | | | — | | | | 445,740 | | | | — | | | | 208,000 | (3) | | | 19,725 | | | | 1,090,048 | |
| Officer | | | 2011 | | | | 402,000 | | | | 20,700 | | | | — | | | | — | | | | 129,300 | (3) | | | 18,098 | | | | 570,098 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Sharon Esposito-Mayer | | | 2013 | | | | 310,000 | | | | 20,800 | | | | 146,885 | | | | — | | | | 19,200 | (4) | | | 18,437 | | | | 515,322 | |
| Executive Vice | | | 2012 | | | | 280,708 | | | | — | | | | 290,700 | | | | — | | | | 143,000 | (4) | | | 17,594 | | | | 732,002 | |
| President and | | | 2011 | | | | 273,000 | | | | 29,300 | | | | — | | | | — | | | | 70,700 | (4) | | | 11,658 | | | | 384,658 | |
| Chief Financial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Douglas E. Sharp | | | 2013 | | | | 425,000 | | | | 35,750 | | | | 264,218 | | | | — | | | | 4,250 | (3) | | | 23,779 | | | | 752,997 | |
| President | | | 2012 | | | | 377,500 | | | | — | | | | 368,220 | | | | — | | | | 187,000 | (3) | | | 19,880 | | | | 952,600 | |
| | | | 2011 | | | | 365,000 | | | | 17,600 | | | | — | | | | — | | | | 117,400 | (3) | | | 20,519 | | | | 520,519 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Donald R. Duquette | | | 2013 | | | | 300,000 | | | | 19,900 | | | | 117,479 | | | | — | | | | 30,100 | (4) | | | 23,505 | | | | 490,984 | |
| Executive Vice | | | 2012 | | | | 288,125 | | | | — | | | | 251,940 | | | | — | | | | 160,000 | (4) | | | 23,624 | | | | 723,689 | |
| President | | | 2011 | | | | 285,000 | | | | 46,400 | | | | — | | | | — | | | | 23,600 | (4) | | | 22,162 | | | | 377,162 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Kenneth L. Crawford | | | 2013 | | | | 255,000 | | | | 5,400 | | | | 117,479 | | | | — | | | | 14,600 | (4) | | | 21,349 | | | | 413,828 | |
| Senior Vice President, | | | 2012 | | | | 236,792 | | | | — | | | | 193,800 | | | | — | | | | 90,000 | (4) | | | 18,800 | | | | 539,392 | |
| General Counsel & Secretary | | | 2011 | | | | 232,000 | | | | 22,000 | | | | — | | | | — | | | | 38,000 | (4) | | | 17,696 | | | | 309,696 | |
2016.
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Name and principal position | | Year | | Salary ($) | | Bonus ($) (1) | | Stock Awards ($) (2) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation ($) | | | | All Other Compensation ($) (5) | | Total ($) |
| Scott N. Greenberg Chief Executive Officer | | 2016 | | 560,000 |
| | — |
| | 332,999 |
| | — |
| | — |
| | (3) | | 29,278 |
| | 922,277 |
|
| | 2015 | | 534,333 |
| | — |
| | 470,585 |
| | — |
| | — |
| | (3) | | 24,599 |
| | 1,029,517 |
|
| | 2014 | | 471,546 |
| | — |
| | — |
| | — |
| | 50,000 |
| | (3) | | 19,925 |
| | 541,471 |
|
| | | | | | | | | | | | | | | | | | | |
| Sharon Esposito-Mayer Executive Vice President & Chief Financial Officer | | 2016 | | 360,000 |
| | — |
| | 174,874 |
| | — |
| | 25,250 |
| | (4) | | 21,618 |
| | 581,742 |
|
| | 2015 | | 345,417 |
| | — |
| | 220,370 |
| | — |
| | — |
| | (4) | | 26,822 |
| | 592,609 |
|
| | 2014 | | 310,000 |
| | 10,000 |
| | 148,479 |
| | — |
| | 50,000 |
| | (4) | | 17,908 |
| | 536,387 |
|
| | | | | | | | | | | | | | | | | | | |
| Douglas E. Sharp President | | 2016 | | 520,000 |
| | — |
| | 280,677 |
| | — |
| | — |
| | (3) | | 25,423 |
| | 826,100 |
|
| | 2015 | | 492,292 |
| | — |
| | 353,701 |
| | — |
| | — |
| | (3) | | 27,521 |
| | 873,514 |
|
| | 2014 | | 425,000 |
| | 15,000 |
| | — |
| | — |
| | 45,000 |
| | (3) | | 24,865 |
| | 509,865 |
|
| | | | | | | | | | | | | | | | | | | |
| Donald R. Duquette Executive Vice President | | 2016 | | 350,000 |
| | — |
| | 141,700 |
| | — |
| | 25,193 |
| | (4) | | 29,700 |
| | 546,593 |
|
| | 2015 | | 335,417 |
| | — |
| | 178,521 |
| | — |
| | — |
| | (4) | | 28,961 |
| | 542,899 |
|
| | 2014 | | 300,000 |
| | — |
| | 148,479 |
| | — |
| | 60,000 |
| | (4) | | 26,847 |
| | 535,326 |
|
| | | | | | | | | | | | | | | | | | | |
| Karl Baer Executive Vice President | | 2016 | | 325,000 |
| | — |
| | 131,587 |
| | — |
| | — |
| | (4) | | 24,673 |
| | 481,260 |
|
| | 2015 | | 317,708 |
| | — |
| | 165,819 |
| | — |
| | — |
| | (4) | | 26,110 |
| | 509,637 |
|
| | 2014 | | 300,000 |
| | — |
| | 123,785 |
| | — |
| | 60,000 |
| | (4) | | 22,292 |
| | 506,077 |
|
_______________________
| |
| (1) | Discretionary bonus paid for the respective years. |
| |
| (2) | Reflects the grant date fair value for financial statement reporting for awards of restricted stock units or stock options in the year they were granted. For assumptions used in computing the fair value of stock-based compensation awards, seeNote 910 to the Consolidated Financial Statements in Item 8 of our Annual Report on Form 10-K filed with the SEC on February 28, 2014.2017. With respect to the performance-based restricted stock units that were granted to our Named Executive Officers in 2016, the amounts reported are based on the probable outcome of the performance-based vesting conditions at the time of grant. Assuming the highest level of performance is achieved, the grant date fair value of the performance-based restricted stock unit awards would have been as follows for 2016: $588,000 for Mr. Greenberg, $194,400 for Ms. Esposito-Mayer, $311,989 for Mr. Sharp, $157,505 for Mr. Duquette and $146,258 for Mr. Baer. |
| |
| (3) | Bonus pursuant to Mr. Greenberg’s and Mr. Sharp’s employment agreements. SeeCompensation Discussion & Analysis. |
| |
| (4) | Bonus pursuant to the Company’s Cash Bonus Plan.Plan (for 2015 and 2014) or STIP (beginning in 2016). SeeCompensation Discussion & Analysis. |
| |
| (5) | All other compensation includes matching contributions under our Retirement Savings Plan, automobile lease payments and/or allowances, and life insurance premiums. A breakdown of these amounts is as follows: |
| Name | | Year | | | Company Matching
Contributions to
401(k) Plan ($) | | | Automobile
Payments or
Allowance ($) | | | Life Insurance
Premiums ($) | | | Total ($) | |
| Scott N. Greenberg | | | 2013 | | | | 7,000 | | | | 4,540 | | | | 8,385 | | | | 19,925 | |
| | | | 2012 | | | | 6,800 | | | | 4,540 | | | | 8,385 | | | | 19,725 | |
| | | | 2011 | | | | 5,712 | | | | 4,163 | | | | 8,223 | | | | 18,098 | |
| | | | | | | | | | | | | | | | | | | | | |
| Sharon Esposito-Mayer | | | 2013 | | | | 7,000 | | | | 8,737 | | | | 2,700 | | | | 18,437 | |
| | | | 2012 | | | | 6,433 | | | | 8,725 | | | | 2,436 | | | | 17,594 | |
| | | | 2011 | | | | 2,617 | | | | 6,707 | | | | 2,334 | | | | 11,658 | |
| | | | | | | | | | | | | | | | | | | | | |
| Douglas E. Sharp | | | 2013 | | | | 7,071 | | | | 8,485 | | | | 8,223 | | | | 23,779 | |
| | | | 2012 | | | | 6,800 | | | | 8,595 | | | | 4,485 | | | | 19,880 | |
| | | | 2011 | | | | 7,636 | | | | 8,398 | | | | 4,485 | | | | 20,519 | |
| | | | | | | | | | | | | | | | | | | | | |
| Donald R. Duquette | | | 2013 | | | | 7,350 | | | | 8,673 | | | | 7,482 | | | | 23,505 | |
| | | | 2012 | | | | 7,823 | | | | 8,625 | | | | 7,176 | | | | 23,624 | |
| | | | 2011 | | | | 6,668 | | | | 8,399 | | | | 7,095 | | | | 22,162 | |
| | | | | | | | | | | | | | | | | | | | | |
| Kenneth L. Crawford | | | 2013 | | | | 6,150 | | | | 9,000 | | | | 6,199 | | | | 21,349 | |
| | | | 2012 | | | | 5,980 | | | | 9,000 | | | | 3,820 | | | | 18,800 | |
| | | | 2011 | | | | 4,942 | | | | 9,000 | | | | 3,754 | | | | 17,696 | |
|
| | | | | | | | | | | | | | |
| Name | | Year | | Company Matching Contributions to 401(k) Plan ($) | | Automobile Payments or Allowance ($) | | Life Insurance Premiums ($) | | Total ($) |
| Scott N. Greenberg | | 2016 | | 7,200 |
| | 9,208 |
| | 12,870 |
| | 29,278 |
|
| | | 2015 | | 7,200 |
| | 9,014 |
| | 8,385 |
| | 24,599 |
|
| | | 2014 | | 7,000 |
| | 4,540 |
| | 8,385 |
| | 19,925 |
|
| | | | | | | | | | | |
| Sharon Esposito-Mayer | | 2016 | | 7,200 |
| | 9,933 |
| | 4,485 |
| | 21,618 |
|
| | | 2015 | | 7,200 |
| | 16,772 |
| | 2,850 |
| | 26,822 |
|
| | | 2014 | | 7,000 |
| | 8,208 |
| | 2,700 |
| | 17,908 |
|
| | | | | | | | | | | |
| Douglas E. Sharp | | 2016 | | 7,200 |
| | 9,838 |
| | 8,385 |
| | 25,423 |
|
| | | 2015 | | 7,200 |
| | 11,936 |
| | 8,385 |
| | 27,521 |
|
| | | 2014 | | 7,000 |
| | 9,480 |
| | 8,385 |
| | 24,865 |
|
| | | | | | | | | | | |
| Donald R. Duquette | | 2016 | | 7,140 |
| | 9,690 |
| | 12,870 |
| | 29,700 |
|
| | | 2015 | | 7,140 |
| | 9,413 |
| | 12,408 |
| | 28,961 |
|
| | | 2014 | | 7,000 |
| | 8,530 |
| | 11,317 |
| | 26,847 |
|
| | | | | | | | | | | |
| Karl Baer | | 2016 | | 7,200 |
| | 9,346 |
| | 8,127 |
| | 24,673 |
|
| | | 2015 | | 7,200 |
| | 10,998 |
| | 7,912 |
| | 26,110 |
|
| | | 2014 | | 7,000 |
| | 7,955 |
| | 7,337 |
| | 22,292 |
|
____________________
Grants of Plan-Based Awards
The following table sets forth certain information with respect to non-equity incentive plan awards granted during the year ended December 31,
20132016 to our
named executive officers:| | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards | | | All Other
Stock
Awards:
Number of
Shares of | | | All Other
Option
Awards:
Number of
Securities | | | Exercise or
Base Price
of Option | |
| Name | | Grant
Date | | Threshold
($) | | | Target ($) | | | Maximum
($) | | | Stock or
Units (#) | | | Underlying
Options (#) | | | Awards
($/Sh) | |
| Scott N. Greenberg | | n/a | | | — | | | | 4,720 | (1) | | | 236,000 | (1) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Sharon Esposito-Mayer | | n/a | | | — | | | | 19,200 | (2) | | | n/a | (3) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Douglas E. Sharp | | n/a | | | — | | | | 4,250 | (1) | | | 212,500 | (1) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Donald R. Duquette | | n/a | | | — | | | | 30,100 | (2) | | | n/a | (3) | | | — | | | | — | | | | — |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Kenneth L. Crawford | | n/a | | | — | | | | 14,600 | (2) | | | n/a | (3) | | | — | | | | — | | | | — | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | All Other Stock Awards: Number of Shares of Stock or Units (#) (3) | | All Other Option Awards: Number of Securities Underlying Options (#) | | Exercise or Base Price of Option Awards ($/Sh) | | Grant date fair value of stock and option awards ($) (4) |
| Name | | Grant Date | | Threshold
($) | | Target ($) | | Maximum
($) | | Threshold (#) | | Target (#) | | Maximum (#) | | | |
| Scott N. Greenberg | | n/a | | — |
| | — |
| | 280,000 |
| | | | | | | | | | | | | | |
| | 3/29/16 | | | | | | | | 4,360 |
| | 5,080 |
| | 21,802 |
| | | | | | | | 137,008 |
|
| | 3/29/16 | | | | | | | | | | | | | | 7,267 |
| | | | | | 195,991 |
|
| Sharon Esposito-Mayer | | n/a | | — |
| | 180,000 |
| | 360,000 |
| | | | | | | | | | | | | | |
| | 3/29/16 | | | | | | | | 1,442 |
| | 1,679 |
| | 7,208 |
| | | | | | | | 45,283 |
|
| | 3/29/16 | | | | | | | | | | | | | | 4,805 |
| | | | | | 129,591 |
|
| Douglas E. Sharp | | n/a | | — |
| | — |
| | 260,000 |
| | | | | | | | | | | | | | |
| | 3/29/16 | | | | | | | | 2,314 |
| | 2,695 |
| | 11,568 |
| | | | | | | | 72,684 |
|
| | 3/29/16 | | | | | | | | | | | | | | 7,712 |
| | | | | | 207,993 |
|
| Donald R. Duquette | | n/a | | — |
| | 175,000 |
| | 350,000 |
| | | | | | | | | | | | | | |
| | 3/29/16 | | | | | | | | 1,168 |
| | 1,361 |
| | 5,840 |
| | | | | | | | 36,706 |
|
| | 3/29/16 | | | | | | | | | | | | | | 3,893 |
| | | | | | 104,994 |
|
| Karl Baer | | n/a | | — |
| | 162,500 |
| | 325,000 |
| | | | | | | | | | | | | | |
| | 3/29/16 | | | | | | | | 1,085 |
| | 1,264 |
| | 5,423 |
| | | | | | | | 34,090 |
|
| | 3/29/16 | | | | | | | | | | | | | | 3,615 |
| | | | | | 97,497 |
|
__________________________
| |
| (1) | The amounts represent the target and maximum bonus payment levels payable pursuant to a formula inFor Mr. Greenberg’sGreenberg and Mr. Sharp’s employment agreements. The formulaSharp, the maximum potential bonus is based upon EBITDA of GP Strategies and subsidiaries and is capped for each executive, at 50% of his base salary. For the other three Named Executive Officers, the target bonus is 50% of the executive's annual base salary (seeand the maximum potential bonus may not exceed 100% of the executive's annual base salary. The actual bonuses earned were $25,250 by Ms. Esposito-Mayer and $25,193 by Mr. Duquette and are included in the Non-Equity Incentive Plan Compensation Discussion & Analysis). |
| (2) | Bonuses calculated undercolumn of the Summary Compensation Table. No bonuses were earned by Messrs. Greenberg, Sharp and Baer in respect of the year ended December 31, 2016 pursuant to the terms of the Bonus PlanSTIP or employment agreements, as applicable (seeCompensation Discussion & Analysis). |
| |
| (2) | The actual bonus paymentsamounts reported in these columns show the threshold, target and maximum award opportunities for the performance-based restricted stock units granted to the executives for 2013 were $40,000 to Ms. Esposito-Mayer, $50,000 to Mr. Duquette, and $20,000 to Mr. Crawford, which include amounts in additionNamed Executive Officers. These restricted stock units vest on December 31, 2018, subject to the amounts calculated pursuantexecutive's continued employment with the Company, if and only to the Bonus Planextent that specific performance goals with respect to the Company's EBITDA and treated as discretionary bonusesROIC are met during a three-year performance period. The threshold amounts represent the minimum number of shares payable for purposesa certain level of this table (seeCompensation Discussion & Analysis)performance, and the target and maximum amounts represent the maximum payout possible under the plan (as the plan does not specify targets that are in between the minimum and maximum amounts). |
| |
| (3) | Total bonus paymentsThe amounts reported in this column represent the time-based restricted stock units granted to the executive team underNamed Executive Officers. These restricted stock units vest 100% on December 31, 2018 subject to the Bonus Plan are capped at 50%executive's continued employment with the Company. |
| |
| (4) | The amounts reported in this column represent the grant date fair value of each equity award computed for financial statement reporting, excluding the effect of estimated forfeitures. In the case of the executive team’s total base salaries. There is not a specified maximum bonus amount for any individual executive team member dueperformance-based restricted stock units, the amounts reported are based upon the probable outcome of the applicable performance-based vesting conditions at the time of grant. Assumptions made in computing the grant date fair value of these awards are described in Note 10 to the calculation being dependentConsolidated Financial Statements in Item 8 of our Annual Report on Form 10-K filed with the individual’s score as a percentage of the total executive team’s score which is then applied to the calculated bonus pool. As a result, the actual bonus calculated for an individual executive covered by the Bonus Plan could exceed 50% of his/her salary.SEC on February 28, 2017. |
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information with respect to the value of all unexercised options and/or unvested restricted stock units previously awarded to our
named executive officersNamed Executive Officers as of December 31,
2013:| | | Option Awards | | | Stock Awards | |
| Name | | Number of
securities
underlying
unexercised
options (#)
exercisable | | | Number of
securities
underlying
unexercised
options (#)
unexercisable | | | Option
exercise
price ($) | | | Option
expiration
date | | Number
of shares
or units of
stock that
have not
vested (#) | | | Market
value of
shares or
units of
stock that
have not
vested ($)
(1) | |
| Scott N. Greenberg | | | 72,000 | | | | 48,000 | | | | 7.57 | | | 1/8/2016 | | | 27,430 | | | | 817,140 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Sharon Esposito-Mayer | | | 27,000 | | | | 18,000 | | | | 7.27 | | | 1/21/2016 | | | 17,020 | | | | 507,026 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Douglas E. Sharp | | | 63,000 | | | | 42,000 | | | | 7.57 | | | 1/8/2016 | | | 24,230 | | | | 721,812 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Donald R. Duquette | | | 27,000 | | | | 18,000 | | | | 7.27 | | | 1/21/2016 | | | 14,415 | | | | 429,423 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Kenneth L. Crawford | | | 12,000 | | | | 8,000 | | | | 7.27 | | | 1/21/2016 | | | 12,015 | | | | 357,927 | |
|
| | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | | | Stock Awards |
| Name | | Number of securities underlying unexercised options (#) exercisable | | Number of securities underlying unexercised options (#) unexercisable | | Option exercise price ($) | | Option expiration date | | Number of shares or units of stock that have not vested (#) | | Market value of shares or units of stock that have not vested ($) (1) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) (2) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) (1) |
| Scott N. Greenberg | | — |
| | — |
| | — |
| | — |
| | 20,818 |
| | 595,395 |
| 37,819 |
| 1,081,623 |
|
| Sharon Esposito-Mayer | | — |
| | — |
| | — |
| | — |
| | 15,723 |
| | 449,678 |
| 12,504 |
| 357,614 |
|
| Douglas E. Sharp | | — |
| | — |
| | — |
| | — |
| | 20,790 |
| | 594,594 |
| 20,067 |
| 573,916 |
|
| Donald R. Duquette | | — |
| | — |
| | — |
| | — |
| | 13,339 |
| | 381,495 |
| 10,130 |
| 289,718 |
|
| Karl Baer | | — |
| | — |
| | — |
| | — |
| | 11,659 |
| | 333,447 |
| 9,407 |
| 269,040 |
|
_________________________
| |
| (1) | Market value is based onThe amounts in these columns are calculated by multiplying the number of shares by the closing market price of our Common Stock on December 31, 20132016 of $29.79$28.60 per share. |
25 | |
| (2) | Represents the maximum number of shares that can be earned pursuant to the grant of performance-based restricted stock units. These restricted stock units vest, subject to the executive's continued employment with the Company, if and only to the extent that specific performance goals with respect to the Company's EBITDA and ROIC are met during a three-year performance period. |
Option Exercises and Stock Vested
The table below sets forth the number of shares issued upon option exercises, the value realized on option exercises, the number of shares of restricted stock vested, and the realized value upon vesting of the restricted stock by our
named executive officersNamed Executive Officers during fiscal year
2013.| | | Option Awards | | | Stock Awards | |
| Name | | Number of shares
acquired on
exercise (#) | | | Value realized on
exercise ($) | | | Number of shares
acquired on
vesting (#) | | | Value realized on
vesting ($) (1) | |
| Scott N. Greenberg | | | - | | | | - | | | | 4,600 | | | | 112,976 | |
| Sharon Esposito-Mayer | | | - | | | | - | | | | 3,000 | | | | 73,680 | |
| Douglas E. Sharp | | | - | | | | - | | | | 3,800 | | | | 93,328 | |
| Donald R. Duquette | | | - | | | | - | | | | 2,600 | | | | 63,856 | |
| Kenneth L. Crawford | | | - | | | | - | | | | 2,000 | | | | 49,120 | |
| | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| Name | | Number of shares acquired on exercise (#) | | Value realized on exercise ($) | | Number of shares acquired on vesting (#) | | Value realized on vesting ($) (1) |
| Scott N. Greenberg | | — |
| | — |
| | 6,406 |
| | 151,419 |
|
| Sharon Esposito-Mayer | | — |
| | — |
| | 5,195 |
| | 123,926 |
|
| Douglas E. Sharp | | — |
| | — |
| | 5,606 |
| | 132,859 |
|
| Donald R. Duquette | | — |
| | — |
| | 4,594 |
| | 109,672 |
|
| Karl Baer | | — |
| | — |
| | 3,995 |
| | 94,846 |
|
_________________________
| |
| (1) | Represents stock units which vested during 2013.Value2016. Value realized upon vesting is based on the closing market price of our Common Stock on each vesting date. |
Potential Payments Upon Termination or Change in Control
Description of Termination Provisions in Employment Agreements
We have employment agreements with all five of the
named executive officers.Named Executive Officers. These agreements provide for various payments and benefits to be made to them if their employment with us is terminated for certain reasons. The circumstances in which payments may be made and the potential amounts of those payments are described in this section. We believe that the payments provided for in these agreements are reasonable and appropriate as part of the total compensation packages available for our
named executive officers.Named Executive Officers. The following description of certain terms of the employment agreements with our
named executive officersNamed Executive Officers is a summary and is subject to, and qualified in its entirety by, the agreements, which have been filed as exhibits to our filings with the SEC. The employment agreements between us and each of Messrs. Greenberg and Sharp provide for termination by either party on two years’ notice, unless sooner terminated:
| · | by the executive’s death or disability; |
| · | by the executive for “good reason,” as defined below; |
| · | by us for “cause,” as defined below; or |
| · | by mutual agreement between us and the executive. |
•by the executive’s death or disability;
•by the executive for “good reason,” as defined below;
•by us for “cause,” as defined below; or
•by mutual agreement between us and the executive.
The employment agreements between us and each of Ms. Esposito-Mayer, Mr. Duquette and Mr. Crawford have an initial term which ended on February 28, 2009 butBaer will continue in effect until terminated:
•by the term automatically extends unlessexecutive’s death or disability;
•by the agreement is terminated executive for “just cause,” as defined below;
•by us for “cause,” as defined below;
•by us or the executive by giving the other noticea period of a decision to terminate“required notice,” as defined below; or
•by mutual agreement between us and the agreement prior to a date determined by the agreements. As such dates have passed for each of the executives, the agreements have been extended and now will continue in effect until terminated: | · | by the executive’s death or disability; |
| · | by the executive for “just cause,” as defined below; |
| · | by us for “cause,” as defined below; |
| · | by us or the executive by giving the other a period of “required notice,” as defined below; or |
| · | by mutual agreement between us and the executive. |
executive.
The “required notice” period is fifteen months for Ms. Esposito-Mayer and Mr.
DuquetteBaer, and twelve months for Mr.
Crawford.Duquette.
The discussion and tables below reflect the estimated termination benefits that would be paid or accrue to each of the named executive officersNamed Executive Officers in the event of the following termination scenarios:
| o |
| ◦ | Termination for Cause – If we terminate the employment of one of the named executives for “cause,” as defined below, such executive would be entitled to unpaid base salary and continuation of benefits through the date of termination only. |
“Cause” is defined under the employment agreements of Messrs. Greenberg and Sharp as follows:
| · | Willful and continued failure to substantially perform his duties or obligations under the employment agreement (after notice and failure to cure); or |
| · | Willful engaging in misconduct which is materially monetarily injurious to us. |
Willful and continued failure to substantially perform his duties or obligations under the employment agreement (after notice and failure to cure); or
Willful engaging in misconduct which is materially monetarily injurious to us.
“Cause” as defined under the employment agreements of Ms. Esposito-Mayer, Mr. Duquette and Mr.
CrawfordBaer exists if such executive shall:
Be convicted, plead guilty, or enter a plea of nolo contendere to a felony or a crime involving moral turpitude; or
Commit any act or omit to take any action in bad faith and to our detriment; or
Willfully and continually fail to perform his or her duties or obligations under any provision of the employment agreement in any material respect, and shall not correct such failure within ten days after receipt of written notice thereof; or
Fail to perform his or her duties or obligations pursuant to the non-compete and confidential information provisions of his or her employment agreement in any material respect.
| · |
| ◦ | Be convicted, plead guilty, or enter a plea of nolo contendere to a felony or a crime involving moral turpitude; or |
| · | Commit any act or omit to take any action in bad faith and to our detriment; or |
| · | Willfully and continually fail to perform his or her duties or obligations under any provision of the employment agreement in any material respect, and shall not correct such failure within ten days after receipt of written notice thereof; or |
| · | Fail to perform his or her duties or obligations pursuant to the non-compete and confidential information provisions of his or her employment agreement in any material respect. |
| o | Termination upon disability – We may terminate the employment of a named executive officerNamed Executive Officer in the event of such executive’s incapacity due to extended physical or mental illness. In the case of disability, the affected executive would be entitled to his or her unpaid base salary and continuation of benefits through the date of termination only. If Mr. Greenberg or Mr. Sharp has been absent from his duties on a full-time basis for the entire period of six consecutive months due to physical or mental illness, we may terminate his employment thirty days after giving him notice of termination if he has not returned to the performance of his duties on a full-time basis within those thirty days. If Ms. Esposito-Mayer, Mr. Duquette or Mr. CrawfordBaer is unable to fully discharge his or her duties for a period of ninety consecutive days due to a serious health condition (as defined in the Family and Medical Leave Act of 1993) and after giving effect to any reasonable accommodation required by law, we may terminate his or her employment as of a date specified in a notice of termination given to such employee. |
serious health condition (as defined in the Family and Medical Leave Act of 1993) and after giving effect to any reasonable accommodation required by law, we may terminate his or her employment as of a date specified in a notice of termination given to such employee.
| o |
| ◦ | Termination upon death – In the event of death, each of the named executive officersNamed Executive Officers is entitled to his or her full salary through the date of death and we are required to pay his or her spouse or estate the following: for Messrs. Greenberg and Sharp – an amount equal to his full salary for one year after the date of death; and for Ms. Esposito-Mayer, Mr. Duquette or Mr. CrawfordBaer – his or her full salary through the end of the calendar month within which termination occurred plus his or her full salary for the following two calendar months, and for purposes of the vesting of any stock units outstanding and unvested as of the date of termination of his or her employment, he or she shall be deemed to have been employed through the remaining period under the employment agreement. |
| o |
| ◦ | Termination without cause, or for “good reason” or “just cause” – If we terminate a named executive officer’sNamed Executive Officer’s employment without cause or a named executive officerNamed Executive Officer terminates his or her employment for “good reason” or “just cause,” as defined below, then the named executive officerNamed Executive Officer would be entitled to certain compensation discussed in detail below. |
“Good reason” is defined under the employment agreements of Messrs. Greenberg and Sharp as follows:
| · | A change in control as defined in his employment agreement; or |
| · | A management change in control as defined in his employment agreement; or |
| · | A failure by us to comply with any material provision of the employment agreement which has not been cured within ten days after notice of such noncompliance has been given to us by the executive; or |
| · | Any purported termination of the executive’s employment by us which is not effected pursuant to a notice of termination satisfying the requirements of the employment agreement. |
A change in control as defined in his employment agreement; or
A management change in control as defined in his employment agreement; or
A failure by us to comply with any material provision of the employment agreement which has not been cured within ten days after notice of such noncompliance has been given to us by the executive; or
Any purported termination of the executive’s employment by us which is not effected pursuant to a notice of termination satisfying the requirements of the employment agreement.
Ms. Esposito-Mayer, Mr. Duquette and Mr.
CrawfordBaer shall be deemed to have resigned for “just cause,” under the terms of their employment agreement, in the event that he or she resigns within sixty days following either:
| · | Our imposition, without express written consent of the executive, of any significant change in his or her function, duties, or responsibilities that is not consistent with him or her being an executive, unless we rescind or modify such change within ten business days after receipt of written notice from the executive; or |
| · | Our failure to make any material payment, or provide any material benefit to the executive pursuant to the employment agreement, unless we correct any such deficiency within ten business days after receipt of written notice from the executive; or |
| · | Our breach of any other term of the employment agreement, unless we correct such failure or breach within thirty days after written notice from the executive. |
Our imposition, without express written consent of the executive, of any significant change in his or her function, duties, or responsibilities that is not consistent with him or her being an executive, unless we rescind or modify such change within ten business days after receipt of written notice from the executive; or
Our failure to make any material payment, or provide any material benefit to the executive pursuant to the employment agreement, unless we correct any such deficiency within ten business days after receipt of written notice from the executive; or
Our breach of any other term of the employment agreement, unless we correct such failure or breach within thirty days after written notice from the executive.
Termination Payments under Mr. Greenberg’s Employment Agreement
If we terminate Mr. Greenberg’s employment without cause, or if he terminates his employment for “good reason” other than as a result of a management change in control, we are obligated to pay him his full salary and provide his benefits through the date of termination, pay his full bonus for the calendar year in which the date of termination occurs, and pay as severance an amount equal to his average annual cash compensation received from us during the three full calendar years immediately preceding the termination date, multiplied by the greater of (i) the number of years that would have been remaining in the employment period if his employment had not been terminated and (ii) three. In addition, all options to purchase Common Stock granted to him shall become fully vested and we must provide him with continued benefits for three years under all employee benefit plans and programs in which he was entitled to participate prior to the termination.
If Mr. Greenberg terminates his employment as a result of a management change in control, we are obligated to pay him his full salary and provide his benefits through the date of termination, pay his full bonus for the calendar year in which the date of termination occurs, and pay as severance an amount equal to his average annual cash compensation received from us during the three full calendar years immediately preceding the termination date, multiplied by two. In addition, all options to purchase Common Stock granted to him shall become fully vested and we must provide him with continued benefits for two years under all employee benefit plans and programs in which he was entitled to participate prior to the termination.
Termination Payments under Mr. Sharp’s Employment Agreement
If we terminate Mr. Sharp’s employment without cause, or if he terminates his employment for “good reason” other than as a result of a management change in control, we are obligated to pay him his full salary and provide his benefits through the date of termination, pay his full bonus for the calendar year in which the date of termination occurs, and pay as severance an amount equal to his average annual cash compensation received from us during the three full calendar years immediately preceding the termination date, multiplied by the greater of (i) the number of years that would have been remaining in the employment period if his employment had not been terminated and (ii) three. In addition, all options to purchase Common Stock granted to him shall become fully vested and we must provide him with continued benefits for three years under all employee benefit plans and programs in which he was entitled to participate prior to the termination.
If Mr. Sharp terminates his employment as a result of a management change in control, we are obligated to pay him his full salary and provide his benefits through the date of termination, pay his full bonus for the calendar year in which the date of termination occurs, and pay as severance an amount equal to his average annual cash compensation received from us during the three full calendar years immediately preceding the termination date, multiplied by two. In addition, all options to purchase Common Stock granted to him shall become fully vested and we must provide him with continued benefits for one year under all employee benefit plans and programs in which he was entitled to participate prior to the termination.
Termination Provisions of Employments Agreement with Ms. Esposito-Mayer, Mr. Duquette and Mr.
CrawfordBaer
If during the term of either Ms. Esposito-Mayer’s, Mr. Duquette’s or Mr.
Crawford’sBaer’s employment agreement we terminate his or her employment without “cause” or any of them terminates his or her employment for just cause and he or she is in full compliance with his or her obligations under the employment agreement, we are obligated to pay the executive his or her base annual salary at the rate in effect on the date of such termination, and the executive will continue to be eligible to receive such benefits as he or she would have been entitled to had his or her employment not terminated, for a period of time after termination equal to the length of the required notice. In addition, upon the occurrence of a “Change in Control” or “Sale of the Company,” as defined in each of their employment agreements, all stock options to purchase Common Stock granted to him or her shall immediately become fully vested and exercisable, and certain stock units granted to him or her
under the 2003 Incentive Stock Plan must immediately be paid in unrestricted shares of Common
Stock (at this time all outstanding stock units are under the 2011 Stock Incentive Plan).Stock.
The amounts shown in the table below assume that the noted triggering events occurred on December 31,
20132016 with respect to the five
named executive officers.Named Executive Officers. Other relevant assumptions and explanations are provided in the footnotes following the table. The amounts shown reflect only the additional payments or benefits that a
named executive officerNamed Executive Officer would have received upon the occurrence of the respective triggering events listed below; they do not include the value of payments or benefits that would have been earned, or any amounts associated with equity awards that would have vested absent the triggering event. As discussed above, none of the
named executive officersNamed Executive Officers receive additional compensation in the event of voluntary or involuntary termination for “cause” or in the event of disability.
Vesting of Restricted Stock Units
The performance-vesting and time-vesting restricted stock units granted to the Named Executive Officers under the long-term incentive program contain certain additional provisions relating to the effect of a change in control. If there is a change of control as defined in the 2011 Plan, performance-vesting restricted stock units will at the effective time of the change of control vest pro rata to the extent that the Compensation Committee determines that the targets it established for such units have been achieved. If there is a change of control as defined in the 2011 Plan and a Named Executive Officer’s employment is terminated other than for cause, retirement, death, or disability within twelve months after the change of control, time-vesting restricted stock units will fully vest.
Potential Post-Employment Payments
| Name / Element of Compensation | | Termination
due to Death | | | Termination
Without Cause
or for Good
Reason,
Excluding
Change in
Control | | | Termination
due to Change
in Control | | | Termination due
to Management
Change in
Control | |
| | | | | | | | | | | | | |
| Scott N. Greenberg | | | | | | | | | | | | | | | | |
| Salary | | $ | 472,000 | (1) | | | — | | | | — | | | | — | |
| Severance | | | — | | | $ | 1,688,583 | (2) | | $ | 1,688,583 | (2) | | $ | 1,125,722 | (3) |
| Bonus(4) | | | — | | | | 40,000 | | | | 40,000 | | | | 40,000 | |
| Stock options | | | — | | | | — | | | | 2,666,400 | (5) | | | 2,666,400 | (5) |
| Benefits continuation | | | — | | | | 26,707 | (6) | | | 26,707 | (6) | | | 18,088 | (7) |
| Total | | $ | 472,000 | | | $ | 1,755,290 | | | $ | 4,421,690 | | | $ | 3,850,210 | |
| | | | | | | | | | | | | | | | | |
| Sharon Esposito-Mayer | | | | | | | | | | | | | | | | |
| Salary | | $ | 51,667 | (8) | | $ | 387,500 | (9) | | | — | | | | — | |
| Stock units | | | — | | | | — | | | | — | | | | — | |
| Benefits continuation | | | — | | | | 11,413 | (10) | | | — | | | | — | |
| Total | | $ | 51,667 | | | $ | 398,913 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Douglas E. Sharp | | | | | | | | | | | | | | | | |
| Salary | | $ | 425,000 | (1) | | | — | | | | — | | | | — | |
| Severance | | | — | | | $ | 1,529,500 | (2) | | $ | 1,529,500 | (2) | | | 1,019,667 | (3) |
| Bonus(4) | | | — | | | | 40,000 | | | | 40,000 | | | | 40,000 | |
| Stock options | | | — | | | | — | | | | 2,333,100 | (5) | | | 2,333,100 | (5) |
| Benefits continuation | | | — | | | | 26,707 | (6) | | | 26,707 | (6) | | | 9,188 | (11) |
| Total | | $ | 425,000 | | | $ | 1,596,207 | | | $ | 3,929,307 | | | $ | 3,401,955 | |
| | | | | | | | | | | | | | | | | |
| Donald R. Duquette | | | | | | | | | | | | | | | | |
| Salary | | $ | 50,000 | (8) | | $ | 375,000 | (9) | | | — | | | | — | |
| Stock units | | | — | | | | — | | | | — | | | | — | |
| Benefits continuation | | | — | | | | 11,413 | (10) | | | — | | | | — | |
| Total | | $ | 50,000 | | | $ | 386,413 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Kenneth L. Crawford | | | | | | | | | | | | | | | | |
| Salary | | $ | 42,500 | (8) | | $ | 255,000 | (12) | | | — | | | | — | |
| Stock units | | | — | | | | — | | | | — | | | | — | |
| Benefits continuation | | | — | | | | 9,188 | (11) | | | — | | | | — | |
| Total | | $ | 42,500 | | | $ | 264,188 | | | | — | | | | — | |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Name / Element of Compensation | | Termination due to Death | | | | Termination Without Cause or for Good Reason, Excluding Change in Control | | | | Termination due to Change in Control | | | | Termination due to Management Change in Control | | |
| Scott N. Greenberg | | |
| | | | |
| | | | |
| | | | |
| | |
| Salary | | $ | 560,000 |
| | (1) | | $ | — |
| | | | $ | — |
| | | | $ | — |
| | |
| Severance | | — |
| | | | 1,615,879 |
| | (2) | | 1,615,879 |
| | (2) | | 1,077,253 |
| | (3) |
Stock units (4) | | — |
| | | | — |
| | | | 360,532 |
| | | | 360,532 |
| | |
| Benefits continuation | | — |
| | | | 28,727 |
| | (5) | | 28,727 |
| | (5) | | 19,389 |
| | (6) |
| Total | | $ | 560,000 |
| | | | $ | 1,644,606 |
| | | | $ | 2,005,138 |
| | | | $ | 1,457,174 |
| | |
| Sharon Esposito-Mayer | | |
| | | | |
| | | | |
| | | | |
| | |
| Salary | | $ | 60,000 |
| | (7) | | $ | 450,000 |
| | (8) | | $ | — |
| | | | $ | — |
| | |
Stock units (4) | | — |
| | | | — |
| | | | 238,381 |
| | | | 238,381 |
| | |
| Benefits continuation | | — |
| | | | 12,209 |
| | (9) | | — |
| | | | — |
| | |
| Total | | $ | 60,000 |
| | | | $ | 462,209 |
| | | | $ | 238,381 |
| | | | $ | 238,381 |
| | |
| Douglas E. Sharp | | |
| | | | |
| | | | |
| | | | |
| | |
| Salary | | $ | 520,000 |
| | (1) | | $ | — |
| | | | $ | — |
| | | | $ | — |
| | |
| Severance | | — |
| | | | 1,497,292 |
| | (2) | | 1,497,292 |
| | (2) | | 998,195 |
| | (3) |
Stock units (4) | | — |
| | | | — |
| | | | 382,611 |
| | | | 382,611 |
| | |
| Benefits continuation | | — |
| | | | 28,727 |
| | (5) | | 28,727 |
| | (5) | | 9,816 |
| | (10) |
| Total | | $ | 520,000 |
| | | | $ | 1,526,019 |
| | | | $ | 1,908,630 |
| | | | $ | 1,390,622 |
| | |
| Donald R. Duquette | | |
| | | | |
| | | | |
| | | | |
| | |
| Salary | | $ | 58,333 |
| | (7) | | $ | 350,000 |
| | (1) | | $ | — |
| | | | $ | — |
| | |
Stock units (4) | | — |
| | | | — |
| | | | 193,136 |
| | | | 193,136 |
| | |
| Benefits continuation | | — |
| | | | 9,816 |
| | (10) | | — |
| | | | — |
| | |
| Total | | $ | 58,333 |
| | | | $ | 359,816 |
| | | | $ | 193,136 |
| | | | $ | 193,136 |
| | |
| Karl Baer | | |
| | | | |
| | | | |
| | | | |
| | |
| Salary | | $ | 54,167 |
| | (7) | | $ | 406,250 |
| | (8) | | $ | — |
| | | | $ | — |
| | |
Stock units (4) | | — |
| | | | — |
| | | | 179,351 |
| | | | 179,351 |
| | |
| Benefits continuation | | — |
| | | | 12,209 |
| | (9) | | — |
| | | | — |
| | |
| Total | | $ | 54,167 |
| | | | $ | 418,459 |
| | | | $ | 179,351 |
| | | | $ | 179,351 |
| | |
____________________
| |
| (1) | Represents one year of current salary as of December 31, 2013.2016. |
| |
| (2) | Represents severance payment pursuant to employment agreement which equals the average of his cash compensation for the last three calendar years multiplied by three. |
| |
| (3) | Represents severance payment pursuant to employment agreement which equals the average of his cash compensation for the last three calendar years multiplied by two. |
| |
| (4) | Represents bonus earned during the year ended December 31, 2013 which would be due to the executive if anyvalue of the applicable triggering events occurred on December 31, 2013. |
| (5) | Pursuantnumber of time-based restricted stock units deemed to Messrs. Greenberg and Sharp’s employment agreements,have vested in the event of a change in control of the Company, they can elect to surrender their outstanding stock options for a cash payment equal to the excess of the fair market value on the termination date of the common stock issuable upon exercise of the options over aggregate exercise price of the options surrendered. The amount included in the table represents the fair value of Messrs. Greenberg and Sharp’s outstanding options as of December 31, 2013Company. Value is based on the closing price of our common stock on December 31, 20132016 of $29.79.$28.60. |
| (6) |
| (5) | Represents an estimate of the incremental cost to the Company for benefits continuation for three years subsequent to termination date. |
| (7) |
| (6) | Represents an estimate of the incremental cost to the Company for benefits continuation for two years subsequent to termination date. |
| (8) |
| (7) | Represents two full calendar months of current salary as of December 31, 2013.2016. |
| (9) |
| (8) | Represents the current salary for fifteen months that would have been paid or accrued if the triggering event occurred as of December 31, 2013.2016. |
| (10) |
| (9) | Represents an estimate of the incremental cost to the Company for benefits continuation for fifteen months subsequent to the termination date. |
| (11) |
| (10) | Represents an estimate of the incremental cost to the Company for benefits continuation for one year subsequent to the termination date. |
| (12) | Represents the current salary for one year that would have been paid or accrued if the triggering event occurred as of December 31, 2013. |
Our Board of Directors has adopted guidelines for the compensation of our non-employee directors. The following summarizes the annual compensation payable to our non-employee directors as approved by the Board of Directors:
| · | Base annual fee of $45,000; |
| · | Additional annual fee of $40,000 for serving as Chairman of the Board; |
| · | Additional annual fee of $15,000 for serving on the Executive Committee, excluding the Chairman; |
| · | Additional annual fee of $20,000 for serving as Chairman of the Audit Committee; |
| · | Additional annual fee of $8,000 for serving on the Audit Committee; |
| · | Additional annual fee of $7,000 for serving as Chairman of the Compensation Committee; |
| · | Additional annual fee of $5,000 for serving on the Compensation Committee; and |
| · | 500 fully vested shares of our common stock per quarter. |
Base annual fee of $45,000;
Additional annual fee of $40,000 for serving as Chairman of the Board;
Additional annual fee of $15,000 for serving on the Executive Committee, excluding the Chairman;
Additional annual fee of $20,000 for serving as Chairman of the Audit Committee;
Additional annual fee of $8,000 for serving on the Audit Committee;
Additional annual fee of $7,000 for serving as Chairman of the Compensation Committee;
Additional annual fee of $5,000 for serving on the Compensation Committee;
Additional annual fee of $12,000 for serving as Chairman of the Nominating/Corporate Governance Committee;
Additional annual fee of $10,000 for serving as Chairman of the Government Security Committee; and
500 fully vested shares of our common stock per quarter.
These annual fees are prorated and paid on a quarterly basis. At the option of the directors, up to one-half of the fees may be paid in shares of our common stock. In addition to the annual retainers, each non-employee director received $1,500 for each Board meeting attended and $750 for each committee meeting attended, but only if the committee meeting was held on a different date than the Board meeting.
Directors Compensation Table
The following table shows the compensation earned by each individual who served as a director during the year ended December 31,
20132016 (excluding Mr. Greenberg, whose compensation as Chief Executive Officer is shown above in the Summary Compensation Table):
| Name | | Fees earned or paid
in cash ($) | | | Stock awards ($) | | | All other
compensation ($) | | | Total ($) | |
| Harvey P. Eisen | | | 102,000 | | | | 51,845 | | | | — | | | | 153,845 | |
| Daniel M. Friedberg (1) | | | 89,500 | | | | 51,845 | | | | — | | | | 141,345 | |
| Marshall S. Geller | | | 84,250 | | | | 51,845 | | | | — | | | | 136,095 | |
| Sue W. Kelly | | | 70,866 | | | | 51,845 | | | | — | | | | 122,711 | |
| Richard C. Pfenniger, Jr. | | | 85,250 | | | | 51,845 | | | | — | | | | 137,095 | |
| A. Marvin Strait | | | 88,000 | | | | 51,845 | | | | — | | | | 139,845 | |
| Gene A. Washington (2) | | | 35,750 | | | | 23,840 | | | | — | | | | 59,590 | |
|
| | | | | | | | | | | | |
| Name | | Fees earned or paid in cash ($) | | Stock awards ($) | | All other compensation ($) | | Total ($) |
Jennifer E. Brown (1) | | 33,000 |
| | — |
| | — |
| | 33,000 |
|
| Harvey P. Eisen | | 100,000 |
| | 51,155 |
| | — |
| | 151,155 |
|
Daniel M. Friedberg (2) | | 69,750 |
| | 30,700 |
| | — |
| | 100,450 |
|
| Marshall S. Geller | | 84,250 |
| | 51,155 |
| | — |
| | 135,405 |
|
Laura L. Gurski (3) | | 62,000 |
| | 51,155 |
| | | | 113,155 |
|
Steven E. Koonin (4) | | 36,500 |
| | 26,610 |
| | — |
| | 63,110 |
|
| Richard C. Pfenniger, Jr. | | 84,500 |
| | 51,155 |
| | — |
| | 135,655 |
|
Samuel D. Robinson (5) | | 22,000 |
| | 20,455 |
| | | | 42,455 |
|
| A. Marvin Strait | | 88,750 |
| | 51,155 |
| | — |
| | 139,905 |
|
____________________
| |
| (1) | Jennifer Brown served on the Board of Directors and as Chair of the Government Security Committee until June 22, 2016. |
| |
| (2) | Daniel Friedberg’s compensation for service on the Board of Directors was paid directly to Sagard Capital Partners, L.P. |
| (2) | Gene WashingtonL.P with the exception of $28,173 which was paid directly to him. He served as a member ofon the Board of Directors until June 18, 2013.August 5, 2016. |
| |
| (3) | Laura Gurski served on the Board of Directors until February 2, 2017. |
| |
| (4) | Steve Koonin was elected to the Board of Directors on June 22, 2016 and serves as Chair of the Government Security Committee. |
| |
| (5) | Samuel Robinson was elected to the Board of Directors on August 8, 2016. |
Compensation Committee Interlocks and Insider Participation
Members of the Compensation Committee of our Board of Directors are
Daniel M. Friedberg, Marshall S. Geller, Chairman,
Samuel D. Robinson, and A. Marvin Strait. None of the members of the Compensation Committee during
20132016 (a) was an officer or employee of the Company, (b) was a former officer of the Company or (c) had any relationship requiring disclosure by the Company under any paragraph of Item 404 of Regulation S-K.
Compensation Committee Report
The Compensation Committee has reviewed and discussed with management the
subject matter in the “Compensation Discussion and Analysis”
("CD&A") and has reviewed the CD&A included in this proxy statement. Based upon this review,
and discussion, the Compensation Committee recommended to our Board of Directors that the “Compensation Discussion and Analysis” be included in this proxy statement filed with the SEC in connection with the Company’s annual meeting of stockholders.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Daniel M. Friedberg
Samuel D. Robinson
PROPOSAL 3. ADVISORY VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS
At our 2011 Annual Meeting, our stockholders approved the Company’s recommendation that the advisory vote on compensation of named executive officers be held annually. We are required to submit the frequency of shareholder advisory votes on compensation to an advisory vote of stockholders at least every six years. We expect that our next advisory vote on frequency will be at our 2017 annual meeting.
We are requesting
shareholdersstockholders to approve the following non-binding, advisory resolution at the
2014 annual meeting2017 Annual Meeting of
shareholders:Stockholders:
RESOLVED, that the
shareholdersstockholders of GP Strategies Corporation provide their advisory approval of the compensation of GP Strategies Corporation’s
named executive officersNamed Executive Officers disclosed in the Compensation Discussion and Analysis, the compensation tables and related notes and narrative contained in the Proxy Statement for GP Strategies Corporation’s
20142017 Annual Meeting of
Shareholders.Stockholders.
Approval of this advisory proposal requires the affirmative vote of a majority of the votes cast
by holders of shares of Common Stock aton the
meeting. Abstentions and broker non-votes have no effect on this proposal.matter.
This vote is not intended to address any specific item of compensation, but rather the overall compensation of the
named executive officersNamed Executive Officers as described in this Proxy Statement. This vote is advisory and therefore not binding on
GP Strategies Corporation or its Board of Directors.the Company. The
Board of Directors,Compensation Committee, however, will review the outcome of this vote and will take it into account in making determinations concerning the compensation of our executive officers in the future.
Executive Compensation Philosophy
The Compensation Committee seeks to provide compensation programs designed to:
| · | Attract and retain talented and dedicated executives; |
| · | Motivate and reward executives whose knowledge, skills, potential and performance are critical to our success; and |
| · | Align the interests of our executive officers and shareholders by motivating executive officers to increase shareholder value and rewarding executive officers when shareholder value increases. |
Attract and retain talented and dedicated executives;
Motivate and reward executives whose knowledge, skills, potential and performance are critical to our success; and
Align the interests of our executive officers and stockholders by motivating executive officers to increase stockholder value and rewarding executive officers when stockholder value increases.
The Compensation Committee believes that the most effective compensation program is one that provides competitive base pay, rewards the achievement of goals and objectives, and provides an incentive for retention.
We believe that the 20132016 compensation of GP Strategies Corporation’s named executive officersthe Company's Named Executive Officers was appropriate and aligned with GP Strategies Corporation’s 2013the Company’s 2016 strategic objectives and performance. We encourage you to read theCompensation Discussion and Analysissection of this Proxy Statement beginning on page 16, which describes in more detail GP Strategies Corporation’sthe Company’s compensation philosophy and the policies and procedures that have been designed to achieve our compensation objectives, as well as theSummary Compensation Table and other related compensation tables, notes and narrative, beginning on page 22 of this Proxy Statement, which provide detailed information on the compensation of GP Strategies Corporation’s named executive officers.the Company’s Named Executive Officers.
The Board of Directors recommends a vote FOR approval of this proposal. If not otherwise specified, proxies will be voted FOR approval of this proposal.
PROPOSAL 4. ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS
We are required to submit the frequency of stockholder advisory votes on compensation to an advisory vote of stockholders at least every six years in accordance with Section 14A of the Exchange Act. This was last voted on at our 2011 Annual Meeting at which our stockholders approved the Company’s recommendation that the advisory vote on compensation of Named Executive Officers be held annually. Therefore, at the 2017 Annual Meeting of Stockholders, we are requesting you to vote on how often GP Strategies Corporation should conduct an advisory vote on the compensation of its named executive officers.
Please note that you have four choices for voting on this proposal, as indicated on the proxy card. You can choose whether the vote on the compensation of GP Strategies Corporation’s named executive officers should be conducted every one (1) year, every two (2) years or every three (3) years. You may also abstain from voting on this proposal.
The frequency of the vote on the compensation of GP Strategies Corporation’s named executive officers receiving the greatest number of votes cast (every 1, 2 or 3 years) will be considered the frequency recommended by shareholders. Although this vote is advisory and therefore not binding on GP Strategies Corporation or its Board of Directors, the frequency considered to be recommended by shareholders will be adopted by the Board of Directors with respect to future votes on executive compensation.
Abstentions and broker non-votes have no effect on this proposal, except they will be counted as having been present for purposes of determining the presence of a quorum.
After careful consideration, the Board of Directors believes that an advisory vote on executive compensation held every year is the most appropriate policy at this time. Although GP Strategies Corporation’s executive compensation programs are designed to reward performance over multiple year performance periods and it may not be feasible to change the compensation program in consideration of any one year’s advisory vote on executive compensation, the Board of Directors recognizes that holding an annual advisory vote on executive compensation allows our shareholders to provide more immediate input on our compensation philosophy, policies and practices.
The Board of Directors recommends that the vote on the compensation of GP Strategies Corporation’s Named Executive Officers be held every ONE (1) year. If not otherwise specified, proxies will be voted to conduct advisory votes on executive compensation every ONE (1) year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Review & Approval Process for Related Person Transactions
Our Corporate Governance Guidelines
(a copy of which may be viewed on our website and is available in print, without charge, upon request to GP Strategies’ Corporate Secretary) require each director to avoid any action, position or interest that conflicts with an interest of the Company or gives the appearance of a conflict. Although there is no formal written procedure in those Guidelines for handling such situations when they arise, in practice our Board of Directors, or a committee thereof, is responsible for reviewing and approving, all related person transactions. A related person transaction is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company and any “related person” are participants. A related person is an executive officer, director, or more than 5% stockholder of the Company, including any of their immediate family members, and any entity owned or controlled by such persons.
Our Conduct of Business Policy
(a copy of which may be viewed on our website and is available in print, without charge, upon request to GP Strategies’ Corporate Secretary) governs related person transactions involving executive officers and the Company. It prohibits activities or relationships which are incompatible with employment by the Company or which places the executive in a position where there is a conflict between the executive’s private interests and the interests of the Company, its subsidiaries or affiliates. Executives are required to immediately disclose such situations to their supervisor, the Company’s Ethics Program Compliance Officer, or the Company’s General Counsel for a determination of appropriate action. The Company maintains a
telephone hotline for employees to confidentially report questionable activities or seek advice in handling ethics-related issues.
Related Transactions
Directorships
Certain of our Directors have also served as Directors of WISH (formerly NPDC). Scott N. Greenberg is currently a Director of WISH and was Chief Financial Officer of WISH until August 2007. Harvey P. Eisen is Chairman of the Board and Chief Executive Officer of WISH and Managing Member of Bedford Oak Partners L.P. (“Bedford Oak”).
EQUITY COMPENSATION PLAN INFORMATION
The following is information as of December 31, 2013 about shares of our Common Stock that may be issued upon the exercise of options and rights under our stock plans. For a description of the material terms of these plans, see Note 9 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 28, 2014.
| Plan category: | | | |
| | | | |
| Equity compensation plans not approved by security holders: | | | |
| | | | |
| (a) Number of securities to be issued upon exercise of outstanding options | | | 100,700 | |
| | | | | |
| (b) Weighted average exercise price of outstanding options | | $ | 13.18 | |
| | | | | |
| (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in row (a)) | | | - | |
| | | | | |
| Equity compensation plans approved by security holders: | | | | |
| | | | | |
| (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | 468,600 | |
| | | | | |
| (b) Weighted average exercise price of outstanding options, warrants and rights | | $ | 8.60 | |
| | | | | |
| (c) Number of securities remaining available for future issuance under equity compensation plans | | | 1,060,505 | |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than 10% of a registered class of our securities, to file reports of ownership and changes in ownership with the SEC and the New York Stock Exchange, and to furnish us with such reports. Based solely on a review of copies of such reports for
2013,2016, we believe that during
20132016 all reports applicable to our officers, directors and greater than 10% beneficial owners were filed on a timely basis.
Stockholder Proposals and Director Nominations
Proposals for Inclusion in Proxy Materials
Stockholders may present proposals for inclusion in the Company’s proxy statement for the
20152018 Annual Meeting of Stockholders provided they are received by the Company no later than December 31,
20142017 and are otherwise in compliance with applicable SEC regulations. If we change the date of the
20152018 Annual Meeting by more than 30 days from the date of this year’s Annual Meeting, a stockholder’s written proposal must be received by our Secretary at our principal executive offices a reasonable time before we begin to print and mail our proxy materials for our
20152018 Annual Meeting.
Proposals and Director Nominations Not Intended for Inclusion in Proxy Materials
In addition to the above requirements, the Company’s By-laws provide that any stockholder wishing to nominate a candidate for Director or to propose other business at an annual meeting of stockholders of the Company must give written notice that is received by the Secretary of the Company not less than 90 days prior to the anniversary date of the proxy statement relating to the immediately preceding annual meeting of stockholders (no later than January 30, 20152018 with respect to the 20152018 Annual Meeting of Stockholders); provided that in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, such notice must be received not less than 90 days prior to the date of the meeting or, if the first public announcement of the meeting date is less than 100 days before such meeting date, not later than the close of business on the tenth day following the day on which public disclosure of the date of the annual meeting was first made. Such notice must provide certain information specified in the Company’s By-laws. Copies of the Company’s By-laws are available to stockholders without charge upon request to the Company’s Secretary at the Company’s address set forth above. The Company’s Annual Report for the fiscal year ended December 31,
2013,2016, which is not a part of the proxy soliciting materials, was made available to the Company’s stockholders on approximately April
11, 2014.25, 2017.
So far as is now known, there is no business other than that described above to be presented for action by the stockholders at the Annual Meeting, but it is intended that the Proxies will be voted upon any other matters and proposals that may legally come before the meeting and any adjournments thereof in accordance with the discretion of the persons named therein.
The cost of solicitation of proxies will be borne by the Company. It is expected that the solicitations will be made primarily by mail and e-mail, but employees or representatives of the Company may also solicit proxies by telephone and in person, and arrange for brokerage houses and other custodians, nominees and fiduciaries to send proxy material to their principals at the expense of the Company.
By Order of the Board of Directors,
Kenneth L. Crawford,Secretary April 30, 2014
