SECURITIES AND EXCHANGE COMMISSION
Exchange Act of 1934 (Amendment No. )
Filed by a Party other than the Registranto
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to §240.14a-12 |
þ | No fee required. | |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: | ||
N/A | |||
(2) | Aggregate number of securities to which transaction applies: | ||
N/A | |||
(3) | Per unit or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||
N/A | |||
(4) | Proposed maximum aggregate value of transaction: | ||
N/A | |||
(5) | Total fee paid: | ||
N/A | |||
o | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: | ||
N/A | |||
(2) | Form, Schedule or Registration Statement No.: | ||
N/A | |||
(3) | Filing Party: | ||
N/A | |||
(4) | Date Filed: | ||
N/A | |||
Chairman, President and
Chief Executive Officer
(RECYCLE LOGO) |
5 Westbrook Corporate Center
Westchester, Illinois 60154
• | to elect three Class II directors, each for a term of three years, | |
• | to ratify the appointment of KPMG LLP as the Independent Registered Public Accounting Firm of the company and its subsidiaries, in respect of the company’s operations in 2008 and | |
• | to transact other business, if any, that is properly brought before the meeting and any adjournment or adjournments thereof. |
Vice President, General Counsel
and Corporate Secretary
• | If you received a notice of availability of the proxy materials electronically on the Internet, the notice constitutes your admission ticket. | |
• | If your Corn Products shares are registered in your name and you received ane-mail with instructions containing a link to the website where those materials are available and a link to the proxy voting website, you may print a copy of thee-mail which will serve as your admission ticket. | |
• | If your Corn Products shares are held in a bank or brokerage account, vote your shares in accordance with your voting instruction form, if one is provided by your bank or broker, or contact your bank or broker to obtain a written legal proxy in order to vote your shares at the meeting. If you do not obtain a legal proxy from your bank or broker, you will not be entitled to vote your shares at the meeting, but you can still attend the annual meeting if you bring a recent bank or brokerage statement showing that you owned shares of Corn Products common stock on March 24, 2008. | |
• | If your Corn Products shares are registered in your name and you received proxy materials by mail, an admission ticket is attached to your proxy card. |
General Information | 1 | |||
Proposal 1. Election of Directors | 6 | |||
The Board and Committees | 10 | |||
Director Compensation | 14 | |||
Security Ownership of Certain Beneficial Owners and Management | 16 | |||
Executive Compensation | 18 | |||
Compensation Discussion and Analysis | 18 | |||
Summary Compensation Table | 29 | |||
Grants of Plan-Based Awards in Fiscal 2007 | 31 | |||
Outstanding Equity Awards at 2007 Fiscal Year End | 32 | |||
Option Exercises and Stock Vested in Fiscal 2007 | 33 | |||
Pension Benefits in Fiscal 2007 | 33 | |||
Nonqualified Deferred Compensation in Fiscal 2007 | 34 | |||
Potential Payments upon Termination | 35 | |||
Compensation Committee Report | 39 | |||
Equity Compensation Plan Information as of December 31, 2007 | 40 | |||
Independence of Board Members | 40 | |||
Review and Approval of Transactions with Related Persons | 41 | |||
Certain Relationships and Related Transactions | 42 | |||
2007 and 2006 Audit Firm Fee Summary | 42 | |||
Audit Committee Report | 43 | |||
Proposal 2. Ratification of Appointment of Independent Registered Public Accounting Firm | 43 | |||
Other Matters | 44 | |||
Other Information | 44 | |||
Section 16(a) Beneficial Ownership Reporting Compliance | 44 | |||
Additional Information | 44 |
5 Westbrook Corporate Center
Westchester, Illinois 60154
• | This proxy statement for the annual meeting; and | |
• | Our 2007 Annual Report to Stockholders, which includes our audited consolidated financial statements. |
• | election of three Class II directors, each for a term of three years; and | |
• | ratification of the appointment of our independent registered public accounting firm. |
• | held directly in your name as a stockholder of record, | |
• | held in your account with a broker, bank or other nominee or | |
• | attributed to your account(s) in the Corn Products International Stock Fund of the company’s Retirement Savings Plans or the company’s automatic dividend reinvestment plan. |
• | The three nominees for director receiving the most votes will be elected. Abstentions and instructions to withhold authority to vote for one or more of the nominees will result in a nominee receiving fewer votes but will not count as votes against a nominee. | |
• | The ratification of the appointment of our independent registered public accounting firm will be approved if it receives the favorable vote of a majority of the votes present at the meeting in person or by proxy and entitled to vote. A vote to “abstain” on the independent registered public accounting firm ratification proposal will be counted as present for quorum purposes and will be considered as being present for the vote on that proposal, but it will not be counted as a vote cast “for” that proposal and will, therefore, have the effect of a vote against the proposal. |
2
3
• | If you received a notice of Internet availability of the proxy materials, the notice constitutes your admission ticket. | |
• | If your Corn Products shares are registered in your name and you received ane-mail with instructions containing a link to the website where those materials are available and a link to the proxy voting website, you may print a copy of thee-mail which will serve as your admission ticket. | |
• | If your Corn Products shares are held in a bank or brokerage account, vote your shares in accordance with your voting instruction form, if one is provided by your bank or broker, or contact your bank or broker to obtain a written legal proxy in order to vote your shares at the meeting. If you do not obtain a legal proxy from your bank or broker, you will not be entitled to vote your shares at the meeting, but you can still attend the annual meeting if you bring a recent bank or brokerage statement showing that you owned shares of Corn Products common stock on March 24, 2008. |
4
• | If your Corn Products shares are registered in your name and you received proxy materials by mail, an admission ticket is attached to your proxy card. |
• | Forwarding the notice or availability to beneficial owners; | |
• | Forwarding paper proxy materials by mail to beneficial owners; and | |
• | Obtaining beneficial owners’ voting instructions. |
5
6
7
8
9
10
11
• | together with our other independent, outside, non-employee directors, discharges the board’s responsibilities relating to compensation of our Chief Executive Officer, | |
• | reviews and approves the compensation of executive officers of the company other than the Chief Executive Officer, employee benefit plans in which the executive officers participate, and the compensation of outside directors, | |
• | administers our executive compensation programs and assures that compensation programs are implemented according to our compensation philosophy as established by the Compensation Committee and that compensation actions are aligned with the business strategy, expected financial results and the interests of stockholders, | |
• | annually reviews the design of our compensation plans, | |
• | reviews the performance and succession of our elected officers and the developmental actions for the group of managers identified by management as high potential and therefore corporate monitored employees, and | |
• | administers our deferred compensation plan for our non-employee directors. |
• | they are to act independently of management, | |
• | they are to act at the direction of the Compensation Committee, | |
• | their ongoing engagement will be determined by the Committee, | |
• | they are to keep the Committee informed of trends and regulatory developments, | |
• | they are to provide compensation comparisons based on information that is derived from comparable businesses of a similar size to us, and | |
• | they are to provide detailed comparative data regarding executive officer compensation. |
12
13
Annual Board Retainer | $ | 135,000 | ||
Annual Audit Committee Chairperson Retainer | $ | 12,500 | ||
Annual Corporate Governance and Nominating Committee Chairperson Retainer | $ | 10,000 | ||
Annual Compensation Committee Chairperson Retainer | $ | 12,500 | ||
Annual Finance Committee Chairperson Retainer | $ | 6,000 | ||
Annual Lead Director Retainer | $ | 5,000 |
14
Fees Earned | ||||||||||||||||
or Paid | Stock | All Other | ||||||||||||||
in Cash | Awards | Compensation | Total | |||||||||||||
Name | ($) | ($)(1)(2) | ($)(3) | ($) | ||||||||||||
Richard J. Almeida(4) | $ | — | $ | 127,250 | $ | 337 | $ | 127,587 | ||||||||
LuisAranguren-Trellez | $ | 58,750 | $ | 58,750 | $ | 337 | $ | 117,837 | ||||||||
Guenther E. Greiner | $ | 58,750 | $ | 58,750 | $ | 337 | $ | 117,837 | ||||||||
Paul Hanrahan | $ | — | $ | 117,500 | $ | — | $ | 117,500 | ||||||||
Karen L. Hendricks(5) | $ | 61,250 | $ | 61,250 | $ | 337 | $ | 122,837 | ||||||||
Bernard H. Kastory | $ | 58,750 | $ | 58,750 | $ | 337 | $ | 117,837 | ||||||||
Gregory B. Kenny | $ | — | $ | 117,500 | $ | — | $ | 117,500 | ||||||||
Barbara A. Klein | $ | 58,750 | $ | 58,750 | $ | 337 | $ | 117,837 | ||||||||
William S. Norman(6) | $ | — | $ | 132,500 | $ | 337 | $ | 132,837 | ||||||||
James M. Ringler(7) | $ | 64,375 | $ | 64,375 | $ | 337 | $ | 129,087 |
(1) | Restricted stock units have been valued at the grant date fair value computed in accordance with Statement of Financial Accounting Standards (“SFAS”) 123R. See footnotes 2 and 11 in the notes to our financial statements for the year ended December 31, 2007 contained in our annual report onForm 10-K for a statement of the assumptions made with respect to the valuation under SFAS 123R. The restricted stock units are granted in advance on the first day of each fiscal quarter equal to the amount of the retainer deferred divided by the closing price (average of the high and the low price prior to September 18, 2007) of a share of our common stock on the New York Stock Exchange on the date of grant, or if that day is not a day on which the New York Stock Exchange is open for trading, on the immediately preceding day the exchange is open for trading. The restricted stock units are not subject to vesting but cannot be transferred until a date not less than six months after the date the director retires at which time the units will be settled by delivery of shares of common stock. | |
(2) | As of December 31, 2007, each director had the following aggregate number of restricted stock units accumulated in his or her deferral account for all years of service as a director, including additional share units credited as a result of the reinvestment of dividend equivalents: Richard J. Almeida, 24,616 units;Luis Aranguren-Trellez, 4,384 units; Guenther E. Greiner, 18,774 units; Paul Hanrahan, 5,546 units; Karen L. Hendricks, 18,019 units; Bernard H. Kastory, 26,518 units; Gregory B. Kenny, 9,843 units; Barbara A. Klein, 6,973 units; William S. Norman, 36,199 units; and James M. Ringler, 25,253 units. | |
(3) | Reflects dividends earned on 888 restricted shares granted to directors in May 2004 for their service as a director. The underlying shares are vested but remain restricted as to transfer until termination of service from the board. In addition to the amounts shown, directors may participate in a charitable matching gift program available to all salaried employees and directors which provides for matching contributions by the company of up to $5,000 per year. | |
(4) | Compensation Committee Chairperson | |
(5) | Finance Committee Chairperson | |
(6) | Corporate Governance and Nominating Committee Chairperson and Lead Director | |
(7) | Audit Committee Chairperson |
15
Option Awards | ||||||||||||
Number of | ||||||||||||
Securities | ||||||||||||
Underlying | Option | |||||||||||
Unexercised | Exercise | Option | ||||||||||
Options | Price | Expiration | ||||||||||
Name | (#) | ($) | Date | |||||||||
Richard J. Almeida | 4,000 | $ | 14.1650 | 10/01/11 | ||||||||
4,000 | $ | 16.5650 | 05/01/12 | |||||||||
4,000 | $ | 14.8800 | 04/30/13 | |||||||||
Karen L. Hendricks | 4,000 | $ | 14.1650 | 10/01/11 | ||||||||
4,000 | $ | 16.5650 | 05/01/12 | |||||||||
4,000 | $ | 14.8800 | 04/30/13 | |||||||||
Bernard H. Kastory | 4,000 | $ | 14.1650 | 10/01/11 | ||||||||
4,000 | $ | 16.5650 | 05/01/12 | |||||||||
4,000 | $ | 14.8800 | 04/30/13 | |||||||||
William S. Norman | 4,000 | $ | 14.1650 | 10/01/11 | ||||||||
4,000 | $ | 16.5650 | 05/01/12 | |||||||||
4,000 | $ | 14.8800 | 04/30/13 | |||||||||
James M. Ringler | 4,000 | $ | 14.1650 | 10/01/11 | ||||||||
4,000 | $ | 16.5650 | 05/01/12 | |||||||||
4,000 | $ | 14.8800 | 04/30/13 |
Amount and Nature of | Percent of | |||||||
Name and Address of Beneficial Owner | Beneficial Ownership | Class | ||||||
FMR LLC(1) | 9,359,300 | 12.51 | % | |||||
82 Devonshire Street Boston, Massachusetts 02109 | ||||||||
Barclays Global Investors, N.A.(2) | 7,251,897 | 9.64 | % | |||||
45 Fremont Street, San Francisco, California 94105 |
(1) | The ownership information disclosed above is based on Amendment No. 4 to the Schedule 13G report that FMR LLC filed with the Securities and Exchange Commission on February 14, 2008 on behalf of itself and its direct and indirect subsidiaries. According to the Schedule 13G Amendment, FMR LLC has sole voting power for 1,440,465 shares and sole investment power for 9,359,300 shares; and Edward C. Johnson, Chairman of FMR LLC, and members of his family may be deemed to form a controlling group with respect to FMR LLC. | |
(2) | The ownership information disclosed above is based on the Schedule 13G report that Barclays Global Investors, N.A., Barclays Global Fund Advisors, Barclays Global Investors, Ltd., Barclays Global Investors Japan Trust and Banking Company Limited, Barclays Global Investors Canada Limited, Barclays Global Investors Australia Limited and Barclays Global Investors (Deutschland) AG filed with the Securities and Exchange Commission on February 5, 2008. According to the Schedule 13G, Barclays Global Investors, N.A. has sole voting power for 6,298,929 shares and sole investment power for 7,251,897 shares. |
16
Amount and Nature of Beneficial Ownership | ||||||||||||
Shares Underlying | ||||||||||||
Outstanding Shares | Phantom Stock | Percent | ||||||||||
of Company | Units and Restricted | of | ||||||||||
Beneficial Owner | Common Stock(1) | Stock Units(2) | Class(3) | |||||||||
R. J. Almeida | 16,893 | 25,200 | * | |||||||||
L.Aranguren-Trellez | 894 | 4,859 | * | |||||||||
G. E. Greiner | 8,897 | 19,297 | * | |||||||||
P. Hanrahan | 655 | 6,485 | * | |||||||||
K. L. Hendricks | 17,897 | 19,041 | * | |||||||||
B. H. Kastory | 26,334 | 27,066 | * | |||||||||
G. B. Kenny | — | 10,796 | * | |||||||||
B. A. Klein | 897 | 7,456 | * | |||||||||
W. S. Norman | 18,406 | 37,342 | * | |||||||||
J. M. Ringler | 12,897 | 26,343 | * | |||||||||
S. C. Scott | 897,846 | 117,092 | 1.4 | % | ||||||||
C. K. Beebe | 141,871 | 19,643 | * | |||||||||
J. C. Fortnum | 218,452 | 4,359 | * | |||||||||
J. L. Fiamenghi | 172,698 | — | * | |||||||||
J. W. Ripley | 233,245 | 33,283 | * | |||||||||
* | ||||||||||||
All directors and executive officers as a group (20 persons) | 1,841,802 | 324,979 | 2.9 | % |
(1) | Includes shares of company common stock held individually, jointly with others, in the name of an immediate family member or under trust for the benefit of the named individual. Unless otherwise noted, the beneficial owner has sole voting and investment power. Fractional amounts have been rounded to the nearest whole share. | |
Includes shares of company common stock that may be acquired within 60 days of February 29, 2008, through the exercise of stock options granted by the company in the following amounts: 12,000 for R. J. Almeida, 12,000 for K. L. Hendricks, 12,000 for B. H. Kastory, 12,000 for W. S. Norman, 12,000 for J. M. Ringler, 718,000 for S. C. Scott, 118,166 for C. K. Beebe, 174,666 for J. C. Fortnum, 27,933 for J. L. Fiamenghi, 175,200 for J. W. Ripley, and 1,315,230 for all directors and executive officers as a group. | ||
Includes shares of the company’s common stock subject to restricted stock awards of 888 shares each to R. J. Almeida, L.Aranguren-Trellez, G. E. Greiner, K. L. Hendricks, B. H. Kastory, B. A. Klein, W. S. Norman, and J. M. Ringler. These restricted stock awards, which were granted to these directors as part of their annual retainers, are vested but are restricted as to transfer until termination from the board. Holders of restricted stock awards are entitled to vote the shares of company common stock subject to those awards prior to vesting. | ||
Includes shares of the company’s common stock held in the Corn Products International Stock Fund of our Retirement Savings Plan as follow: S. C. Scott, 38,914; C. K. Beebe, 3,715; J. C. Fortnum, 6,970; J. L. Fiamenghi 2,689 and J. W. Ripley, 35,440. | ||
(2) | Includes shares of company common stock that are represented by deferred phantom stock units and restricted stock units of the company credited to the accounts of the outside directors and certain executive officers. The directors and executive officers have no voting or investment power over the company’s common stock by virtue of their ownership of phantom stock units and restricted stock units. | |
(3) | Less than one percent, except as otherwise indicated. |
17
• | Focus, align and motivate management to execute our business strategy and to enhance shareholder value, | |
• | Attract and retain outstanding and talented executives who can execute our strategy and deliver the best business results and | |
• | Reinforcepay-for-performance by aligning the distributions from compensation programs with results. Annual adjustments to base salaries and incentive compensation are based on the achievement of tangible measurable results. |
18
Archer Daniels Midland Company | McCormick & Company, Inc. | |
Avery Dennison Corporation | MeadWestvaco Corporation | |
Brown-Forman Corporation | The Mosaic Company | |
Cargill, Incorporated | Olin Corporation | |
The Clorox Company | Packaging Corporation of America | |
ConAgra Foods, Inc. | Potash Corporation of Saskatchewan Inc. | |
Del Monte Foods Company | Rayonier Inc. | |
The Dial Corporation | Reynolds American Inc. | |
General Mills, Inc. | The Sherwin-Williams Company | |
Graphic Packaging Corporation | Sonoco Products Company | |
Kellogg Company | UST Inc. | |
Kimberly-Clark Corporation | Wm. Wrigley Jr. Company |
19
20
Target Payout | Payout Range | Target | Maximum | |||||||||||||
Name | as a % of Salary | % of Target | Award | Award | ||||||||||||
S. C. Scott | 105 | % | 0-200 | % | $ | 973,350 | $ | 1,946,700 | ||||||||
C. K. Beebe | 75 | % | 0-200 | % | $ | 321,000 | $ | 642,000 | ||||||||
J. C. Fortnum | 75 | % | 0-200 | % | $ | 319,875 | $ | 639,750 | ||||||||
J. L. Fiamenghi | 75 | % | 0-200 | % | $ | 276,000 | (1) | $ | 552,000 | (1) | ||||||
J. W. Ripley(2) | 60 | % | 0-200 | % | $ | 205,800 | $ | 411,600 |
(1) | These figures are in U.S. dollars. Mr. Fiamenghi is employed by our Brazilian subsidiary and is paid in Brazilian Reais. His amounts earned in U.S. dollars were converted to Brazilian Reais at a five-year rolling average exchange rate at the time of payment. | |
(2) | Mr. Ripley retired as Senior Vice President, Planning, Information Technology and Compliance effective January 1, 2008. |
21
Annual Incentive Plan for the Named Executive Officers
Financial Objectives | ||||||||||||
80% weight | ||||||||||||
Divisional | Cash Flow from | |||||||||||
Earnings | Operating | Operations | ||||||||||
per Share | Income | 20% weight | ||||||||||
S. C. Scott | 100 | % | — | 100 | % | |||||||
C. K. Beebe | 100 | % | — | 100 | % | |||||||
J. C. Fortnum | 60 | % | 40 | % | 100 | % | ||||||
J. L. Fiamenghi | 60 | % | 40 | % | 100 | % | ||||||
J. W. Ripley | 100 | % | — | 100 | % |
22
23
Percent of Target | |||||
TSR Percentile | Performance Share | ||||
Ranking | Award Earned | ||||
³ | 80th | 200% (maximum) | |||
70th | 150% | ||||
55th | 100% (target) | ||||
50th | 75% | ||||
40th | 50% (threshold) | ||||
< | 40th | 0% |
AGRICULTURAL PROCESSING | AGRICULTURAL CHEMICALS | |
Archer-Daniels Midland Company | Agrium, Inc. | |
Bunge Limited | Monsanto Company | |
Gruma, S.A. de C.V. | Potash Corporation of Saskatchewan, Inc. | |
MGP Ingredients, Inc. | Syngenta AG — ADR | |
Penford Corp. | Terra Industries, Inc. | |
Tate & Lyle PLC — ADR | Terra Nitrogen Co.-LP |
24
AGRICULTURAL PRODUCTION/FARM PRODUCTION | PAPER/TIMBER | |
Alico, Inc. | AbitibiBowater Inc. | |
Alliance One Intl Inc. | Aracruz Celulose S.A. — ADR | |
Charles River Labs International Inc. | Buckeye Technologies Inc. | |
Universal Corporation | Caraustar Industries, Inc. | |
Chesapeake Corporation | ||
Deltic Timber Corp. | ||
MeadWestvaco Corporation | ||
Potlach Corporation | ||
Smurfit-Stone Container Corporation | ||
Wausau Paper Corporation |
25
26
27
28
Change | ||||||||||||||||||||||||||||||||||||
in Pension | ||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||
Nonqualified | ||||||||||||||||||||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||||||||||||||||||||
Name and Principal | Stock | Option | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||||||||||
Position | Year | Salary | Bonus | Awards(1) | Awards(2) | Compensation(3) | Earnings(4) | Compensation(5) | Total | |||||||||||||||||||||||||||
Samuel C. Scott III, | 2007 | $ | 921,250 | $ | 200,000 | $ | 1,682,045 | $ | 1,301,385 | $ | 1,749,243 | $ | 604,826 | $ | 265,530 | $ | 6,724,279 | |||||||||||||||||||
Chairman, President and Chief Executive Officer | 2006 | $ | 855,250 | $ | 184,866 | $ | 1,943,458 | $ | 771,518 | $ | 1,235,134 | $ | 418,479 | $ | 209,126 | $ | 5,617,831 | |||||||||||||||||||
Cheryl K. Beebe, | 2007 | $ | 425,667 | $ | 73,000 | $ | 637,549 | $ | 252,404 | $ | 577,000 | $ | 119,931 | $ | 72,780 | $ | 2,158,331 | |||||||||||||||||||
Vice President and Chief Financial Officer | 2006 | $ | 396,667 | $ | — | $ | 620,481 | $ | 255,980 | $ | 412,000 | $ | 98,909 | $ | 66,155 | $ | 1,850,192 | |||||||||||||||||||
Jack C. Fortnum, | 2007 | $ | 409,000 | $ | 83,000 | $ | 642,990 | $ | 241,886 | $ | 592,000 | $ | 104,831 | $ | 86,662 | $ | 2,160,369 | |||||||||||||||||||
VP & President North America | 2006 | $ | 371,000 | $ | — | $ | 620,481 | $ | 230,382 | $ | 440,000 | $ | 73,631 | $ | 60,325 | $ | 1,795,819 | |||||||||||||||||||
Jorge L. Fiamenghi, | 2007 | $ | 501,804 | (6) | $ | 90,103 | (6) | $ | 475,335 | $ | 230,724 | $ | 616,559 | (6) | $ | — | $ | 91,888 | $ | 2,006,413 | ||||||||||||||||
VP & President South America | 2006 | $ | 432,909 | (6) | $ | — | $ | 514,612 | $ | 244,700 | $ | 435,092 | (6) | $ | — | $ | 79,832 | $ | 1,707,145 | |||||||||||||||||
James W. Ripley, | 2007 | $ | 343,000 | $ | — | $ | 293,876 | $ | 240,660 | $ | 370,000 | $ | 248,263 | $ | 167,216 | $ | 1,663,015 | |||||||||||||||||||
SVP Planning, Information Technology and Compliance(7) |
(1) | Value recognized as an expense during 2006 and 2007 with regard to restricted stock and performance shares awarded forthree-year performance periods beginning on January 1, 2004, 2005, 2006 and 2007 based on the grant date fair value estimated by us for financial reporting purposes. For these purposes and financial accounting purposes the grant date fair value of the awards will be recognized as an expense over the requisite service period, which in the case of performance shares, is the three-year performance period. The performance shares have been valued at their grant date fair values computed in accordance with Statement of Financial Accounting Standards 123R (“SFAS 123”). See footnotes 2 and 11 in the notes to our financial statements for the year ended December 31, 2007 contained in our annual report onForm 10-K for a statement of the assumptions made with respect to the valuation under SFAS 123R. We caution that the actual amount ultimately realized by the named executive officer from the disclosed restricted stock and performance share awards will likely vary from the disclosed amounts based on a number of factors, including the amounts of the actual awards, our actual operating performance, stock price fluctuations, differences from the valuation assumptions used and the timing of exercise or applicable vesting. | |
(2) | Value recognized as an expense during 2006 and 2007 with regard to the stock option awards granted in November 2004, January 2006 and January 2007 based on the grant date fair values estimated by us using the Black-Scholes option pricing model for financial reporting purposes ($6.6404, $7.6856 and $10.33 per share, respectively). These options have been valued at their grant date fair values computed in accordance with SFAS 123R. See footnotes 2 and 11 in the notes to our financial statements for the year ended December 31, 2007 contained in our annual report onForm 10-K for a statement of the assumptions made with respect to the valuation under SFAS 123R. Generally, the full grant date fair value is the amount the company would expense in its financial statements over the award’s vesting schedule. As Mr. Scott and Mr. Ripley were eligible for retirement, the fair value of their awards that have been held more than a year would generally be expensed in that year. We caution that the actual amount ultimately realized by the named executive officer from the disclosed option awards will likely vary based on a number of factors, including our actual operating performance, stock price fluctuations, differences from the valuation assumptions used and the timing of exercise or applicable vesting. The options granted in 2004 and 2006 vested in two equal installments on the first and second anniversaries of their dates of grant. The options granted in 2007 vest in three equal installments on the first three anniversaries of their dates of grant. Mr. Ripley’s unvested options were vested by the Compensation Committee upon his retirement. | |
(3) | The amounts shown in this column are cash awards earned in 2006 and 2007 under our Annual Incentive Plan and paid in 2007 and 2008. These awards are discussed in further detail in the Compensation Discussion and Analysis under the heading “Annual Incentive Plan.” |
29
(4) | These amounts include the difference between the actuarial present values of the named executive officers’ accumulated benefits under our Cash Balance Plan (qualified and nonqualified components), and in the case of Mr. Fortnum, a frozen benefit under the Casco Pension Plan for Salaried Employees which was frozen upon Mr. Fortnum’s transfer to the U.S. from Canada on March 1, 1993. These amounts also include the amount by which interest earned on deferred compensation deemed to be invested at the prime rate exceeded the interest that would have been earned on those investments at 120% of the applicable federal long-term rate (as prescribed under section 1274(d) of the Internal Revenue Code). | |
(5) | These amounts in 2006 include annual company contributions under the Retirement Savings Plan and Savings PlanMake-up Accounts of $83,851, $40,000 and $22,260 in the case of S. C. Scott, C. K. Beebe and J. C. Fortnum, respectively, and a contribution of $65,527 under our Brazilian subsidiary’s defined contribution plan in the case of J. L. Fiamenghi. These amounts in 2007 include annual company contributions under the Retirement Savings Plan and Savings PlanMake-up Accounts of $140,475, $50,260, $50,940 and $36,180 in the case of S. C. Scott, C. K. Beebe, J. C. Fortnum and J. W. Ripley, respectively, and a contribution of $75,261 under our Brazilian subsidiary’s defined contribution plan in the case of J. L. Fiamenghi. In the case of S. C. Scott, C. K. Beebe, J. C. Fortnum and J. W. Ripley, these amounts include payments equal to the amount of participant premiums on life insurance policies for their benefit and include payments to those four named executive officers in the amount of taxes due as a result of such payments. The premiums on these policies are based on the insurance company’s underwriting requirements. The payments equal to the amount of participant premiums on life insurance policies for Mr. Scott’s benefit were $64,071 and $62,840, in 2006 and 2007, respectively, and the payments in the amount of taxes on those payments were $42,714 and $41,899. The payment equal to the amount of the participant premium on life insurance policies for Mr. Ripley’s benefit was $44,286, and the payment in the amount of taxes on that payment was $29,557. The amounts include providing a leased car for each of S. C. Scott, C. K. Beebe, J. C. Fortnum and J. W. Ripley, and in the case of Mr. Ripley transfer of that car with a value of $27,066 to Mr. Ripley upon his retirement and a payment of $17,634 to Mr. Ripley equal to the taxes due upon the transfer of the car. Each of those named executive officers also received financial planning and tax preparation services. J. L. Fiamenghi received the use of a car, which is owned by our Brazilian subsidiary. The value attributable to the personal use of the company automobiles, the cost of financial planning services, and the payments related to the life insurance are included as compensation on theW-2 or Brazilian equivalent of the named executive officers who receive such benefits. None of the other perquisites and other personal benefits included in this column exceeded the greater of $25,000 or 10% of the total amount of perquisites and personal benefits paid to or on behalf of the applicable named executive officer. | |
(6) | Mr. Fiamenghi is employed by our Brazilian subsidiary and is paid in Brazilian Reais. The amounts shown as salary, bonus and non-equity incentive plan compensation are based on the yearly average exchange rates of 2.18 Reais and 1.95 Reais per U.S. Dollar for 2006 and 2007, respectively. Historically, we have established Mr. Fiamenghi’s compensation in U.S. Dollars and set an exchange rate each January to convert his cash compensation from U.S. Dollars to Brazilian Reais. The exchange rate used for conversion was a five-year rolling average exchange rate which was used to mitigate the impact of currency fluctuations. The five-year rolling average exchange rates were 2.74, 2.71 and 2.51 Reais per U.S. Dollar at January 2006, 2007 and 2008, respectively. In March 2008, we have established Mr. Fiamenghi’s salary in Reais instead of U.S. Dollars, effective April 1, 2008, in an effort to mitigate exchange rate volatility. | |
(7) | Mr. Ripley retired effective January 1, 2008. |
30
All Other | ||||||||||||||||||||||||||||||||||||||||||||||||
Option | ||||||||||||||||||||||||||||||||||||||||||||||||
All Other | Awards: | |||||||||||||||||||||||||||||||||||||||||||||||
Stock Awards: | Number of | Exercise or | Closing | Grant Date | ||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under | Estimated Future Payouts Under | Number of | Securities | Base Price | Price | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Awards(1) | Equity Incentive Plan Awards(2) | Shares of | Underlying | of Option | on Date | of Stock and | ||||||||||||||||||||||||||||||||||||||||||
Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Stock or Units | Options | Awards | of Grant | Option Awards | |||||||||||||||||||||||||||||||||||||
Name | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh)(3) | ($/Sh) | ($)(4) | ||||||||||||||||||||||||||||||||||||
S. C. Scott | 1/23/07 | $ | 486,675 | $ | 973,350 | $ | 1,946,700 | — | ||||||||||||||||||||||||||||||||||||||||
1/23/07 | 15,500 | 31,000 | 62,000 | $ | 1,034,160 | |||||||||||||||||||||||||||||||||||||||||||
1/23/07 | 81,000 | $ | 33.80 | $ | 33.61 | $ | 836,730 | |||||||||||||||||||||||||||||||||||||||||
C. K. Beebe | 1/23/07 | $ | 160,500 | $ | 321,000 | $ | 642,000 | — | ||||||||||||||||||||||||||||||||||||||||
1/23/07 | 5,900 | 11,800 | 23,600 | $ | 393,648 | |||||||||||||||||||||||||||||||||||||||||||
1/23/07 | 30,500 | $ | 33.80 | $ | 33.61 | $ | 315,063 | |||||||||||||||||||||||||||||||||||||||||
J. C. Fortnum | 1/23/07 | $ | 159,938 | $ | 319,875 | $ | 639,750 | — | ||||||||||||||||||||||||||||||||||||||||
1/23/07 | 6,150 | 12,300 | 24,600 | $ | 410,328 | |||||||||||||||||||||||||||||||||||||||||||
1/23/07 | 32,000 | $ | 33.80 | $ | 33.61 | $ | 330,560 | |||||||||||||||||||||||||||||||||||||||||
J. L. Fiamenghi(5) | 1/23/07 | $ | 138,000 | $ | 276,000 | $ | 552,000 | — | ||||||||||||||||||||||||||||||||||||||||
1/23/07 | 4,600 | 9,200 | 18,400 | $ | 306,912 | |||||||||||||||||||||||||||||||||||||||||||
1/23/07 | 23,800 | $ | 33.80 | $ | 33.61 | $ | 245,854 | |||||||||||||||||||||||||||||||||||||||||
J. W. Ripley(6) | 1/23/07 | $ | 102,900 | $ | 205,800 | $ | 411,600 | — | ||||||||||||||||||||||||||||||||||||||||
1/23/07 | 2,450 | 4,900 | 9,800 | $ | 163,464 | |||||||||||||||||||||||||||||||||||||||||||
1/23/07 | 12,700 | $ | 33.80 | $ | 33.61 | $ | 131,191 |
(1) | These amounts reflect the terms of the awards under our Annual Incentive Plan. The actual amounts paid under the Annual Incentive Plan with respect to awards made in 2007 are included in amounts for 2007 in the column captioned “Non-Equity Incentive Plan Compensation” in the Summary Compensation table above. | |
(2) | These amounts reflect the terms of grants of performance shares under our Stock Incentive Plan. The amounts recognized as an expense in 2007 are included in the column captioned “Stock Awards” in the Summary Compensation Table above. Amounts of estimated future payments relating to Mr. Ripley’s 2007 grant of performance shares do not reflect that he will receive approximately one third of the amount to which he would otherwise have been entitled if he continued to be employed during the second and third years of the three-year performance period. | |
(3) | Under our Stock Incentive Plan, the exercise price for options granted prior to an amendment in 2007 is not less than the average of the high and the low prices on the date of grant. The exercise price for options granted after the amendment is not less than the closing price on the date of grant. | |
(4) | This column shows the full grant date fair value of stock awards and option awards under SFAS 123R. Generally, the full grant date fair value is the amount the company would expense in its financial statements over the award’s vesting schedule. As Mr. Scott and Mr. Ripley were eligible for retirement, the fair value of their awards that have been held more than a year would generally be expensed in that year. For stock options, fair value is calculated based on the grant date fair values estimated by us using the Black-Scholes option pricing model for financial reporting purposes, $10.33. For additional information on the valuation assumptions, see footnotes 2 and 11 in the notes to our financial statements in our annual report onForm 10-K for the year ended December 31, 2007. We caution that the actual amount ultimately realized by the named executive officer from the disclosed stock and option awards will likely vary based on a number of factors, including the amounts of the actual awards, our actual operating performance, stock price fluctuations, differences from the valuation assumptions used and the timing of exercise or applicable vesting. The options vest in three equal installments on the first, second and third anniversaries of the date of grant. | |
(5) | Cash-based awards to Mr. Fiamenghi will be converted to Brazilian Reais at the five-year average exchange rate at the time of payment. | |
(6) | Mr. Ripley retired effective January 1, 2008. |
31
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||
Equity | Equity | Incentive | ||||||||||||||||||||||||||||||||||
Incentive | Incentive | Plan Awards: | ||||||||||||||||||||||||||||||||||
Plan Awards: | Plan Awards: | Market or | ||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Market Value | Number of | Payout Value | |||||||||||||||||||||||||||||||
Securities | Securities | Securities | Number of | of Shares | Unearned | of Unearned | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Shares or | or Units of | Shares, Units or | Shares, Units or | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Units That | Stock That | Other Rights | Other Rights | |||||||||||||||||||||||||||||
Options | Options | Unearned | Exercise | Option | Have Not | Have Not | That Have | That Have | ||||||||||||||||||||||||||||
(#) | (#) | Options | Price | Expiration | Vested | Vested(3) | Not Vested(4) | Not Vested(3) | ||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||||
S. C. Scott | ||||||||||||||||||||||||||||||||||||
90,000 | $ | 13.89 | 01/17/11 | |||||||||||||||||||||||||||||||||
120,000 | $ | 14.52 | 10/25/11 | |||||||||||||||||||||||||||||||||
120,000 | $ | 14.33 | 10/24/12 | |||||||||||||||||||||||||||||||||
120,000 | $ | 16.92 | 10/30/13 | |||||||||||||||||||||||||||||||||
120,000 | $ | 24.70 | 11/04/14 | |||||||||||||||||||||||||||||||||
60,500 | 60,500 | (1) | $ | 25.83 | 01/23/16 | |||||||||||||||||||||||||||||||
81,000 | (2) | $ | 33.80 | 01/22/17 | ||||||||||||||||||||||||||||||||
76,000 | $ | 2,793,000 | ||||||||||||||||||||||||||||||||||
C. K. Beebe | ||||||||||||||||||||||||||||||||||||
16,000 | $ | 14.33 | 10/24/12 | |||||||||||||||||||||||||||||||||
16,000 | $ | 16.92 | 10/30/13 | |||||||||||||||||||||||||||||||||
36,000 | $ | 24.70 | 11/04/14 | |||||||||||||||||||||||||||||||||
20,000 | 20,000 | (1) | $ | 25.83 | 01/23/16 | |||||||||||||||||||||||||||||||
30,500 | (2) | $ | 33.80 | 01/22/17 | ||||||||||||||||||||||||||||||||
26,800 | $ | 984,900 | ||||||||||||||||||||||||||||||||||
J. C. Fortnum | ||||||||||||||||||||||||||||||||||||
26,000 | $ | 14.52 | 10/25/11 | |||||||||||||||||||||||||||||||||
33,000 | $ | 14.33 | 10/24/12 | |||||||||||||||||||||||||||||||||
33,000 | $ | 16.92 | 10/30/13 | |||||||||||||||||||||||||||||||||
36,000 | $ | 24.70 | 11/04/14 | |||||||||||||||||||||||||||||||||
18,000 | 18,000 | (1) | $ | 25.83 | 01/23/16 | |||||||||||||||||||||||||||||||
32,000 | (2) | $ | 33.80 | 01/22/17 | ||||||||||||||||||||||||||||||||
27,300 | $ | 1,003,275 | ||||||||||||||||||||||||||||||||||
J. L. Fiamenghi | ||||||||||||||||||||||||||||||||||||
20,000 | (1) | $ | 25.83 | 01/23/16 | ||||||||||||||||||||||||||||||||
23,800 | (2) | $ | 33.80 | 01/22/17 | ||||||||||||||||||||||||||||||||
21,200 | $ | 779,100 | ||||||||||||||||||||||||||||||||||
J. W. Ripley | ||||||||||||||||||||||||||||||||||||
52,000 | $ | 14.33 | 10/24/12 | |||||||||||||||||||||||||||||||||
52,000 | $ | 16.92 | 10/30/13 | |||||||||||||||||||||||||||||||||
30,000 | $ | 24.70 | 11/04/14 | |||||||||||||||||||||||||||||||||
14,250 | 14,250 | (1) | $ | 25.83 | 01/23/16 | |||||||||||||||||||||||||||||||
12,700 | (2) | $ | 33.80 | 01/22/17 | ||||||||||||||||||||||||||||||||
13,400 | $ | 492,450 |
(1) | These options vested on January 24, 2008. | |
(2) | One third of these stock options vested on January 23, 2008, and the other two thirds will vest in equal installments on January 23, 2009 and 2010, respectively. | |
(3) | Value stated is the value of unvested shares multiplied by the closing price of our shares of common stock on December 31, 2007 ($36.75). | |
(4) | Reflects unearned performance shares in the 2006 and 2007 performance plan awards (at the target performance level). Mr. Ripley retired effective January 1, 2008. The amount shown for him does not reflect that he will ultimately receive pro rata payments for the portions of the three-year periods beginning January 1, 2006 and 2007 during which he was employed by the company. |
32
Option Awards | Stock Awards | |||||||||||||||
Number of | Number of | |||||||||||||||
Shares Acquired | Value Realized | Shares Acquired | Value Realized | |||||||||||||
Name | on Exercise (#) | Upon Exercise ($) | on Vesting (#) | on Vesting ($) | ||||||||||||
S. C. Scott | ||||||||||||||||
Options | 106,000 | $ | 2,906,743 | |||||||||||||
Restricted Stock | — | — | ||||||||||||||
C. K. Beebe | ||||||||||||||||
Options | — | — | ||||||||||||||
Restricted Stock | 5,334 | $ | 231,922 | |||||||||||||
J. C. Fortnum | ||||||||||||||||
Options | 10,000 | $ | 268,268 | |||||||||||||
Restricted Stock | 5,334 | $ | 231,922 | |||||||||||||
J. L. Fiamenghi | ||||||||||||||||
Options | 72,500 | $ | 1,124,585 | |||||||||||||
Restricted Stock | 5,334 | $ | 231,922 | |||||||||||||
J. W. Ripley | ||||||||||||||||
Options | 80,000 | $ | 2,312,305 | — | — | |||||||||||
Restricted Stock |
33
Number of | ||||||||||||||||
Years of | Present Value of | |||||||||||||||
Credited | Accumulated | Payments During | ||||||||||||||
Name | Plan Name | Service | Benefit(1) | Last Fiscal Year | ||||||||||||
S. C. Scott | Cash Balance Plan | 34 | $ | 861,064 | — | |||||||||||
Nonqualified Cash Balance Make-up Account | 34 | $ | 2,645,639 | — | ||||||||||||
C. K. Beebe | Cash Balance Plan | 27 | $ | 268,879 | — | |||||||||||
Nonqualified Cash Balance Make-up Account | 27 | $ | 258,829 | — | ||||||||||||
J. C. Fortnum | Cash Balance Plan | 22 | $ | 180,084 | — | |||||||||||
Nonqualified Cash Balance Make-up Account | 22 | $ | 269,285 | — | ||||||||||||
Casco Pension Plan | 7.5 | $ | 92,504 | — | ||||||||||||
J. L. Fiamenghi | n/a | n/a | n/a | n/a | ||||||||||||
J. W. Ripley | Cash Balance Plan | 39 | $ | 921,011 | — | |||||||||||
Nonqualified Cash Balance Make-up Account | 39 | $ | 1,096,161 | — |
(1) | For theU.S.-based named executive officers, the present value of the accumulated benefit reflects their current vested balances in the Cash Balance Plan and their Cash BalanceMake-up Accounts which will be distributed upon termination, regardless of the age of the participant at termination. In addition, for Mr. Fortnum, the present value includes the present value of accumulated benefits in the Casco Pension Plan. See footnote 8 in the notes to our financial statements in our annual report onForm 10-K for the year ended December 31, 2007 for a discussion of the assumptions used to determine the present value of accumulated benefits under our pension plans. |
34
Aggregate | ||||||||||||||||||||
Executive | Company | Aggregate | Withdrawals/ | Aggregate Balance | ||||||||||||||||
Contributions in | Contributions in | Earnings | Distributions in | at December 31, | ||||||||||||||||
2007(1) | 2007(2) | in 2007(3) | 2007(4) | 2007(5) | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
S. C. Scott | $ | 499,240 | $ | 50,985 | $ | 529,358 | $ | — | $ | 7,763,314 | ||||||||||
C. K. Beebe | $ | 101,347 | $ | 36,760 | $ | 106,636 | $ | — | $ | 1,411,327 | ||||||||||
J. C. Fortnum | $ | 153,674 | $ | 37,440 | $ | 100,569 | $ | 37,588 | $ | 1,356,829 | ||||||||||
J. L. Fiamenghi | n/a | n/a | n/a | n/a | n/a | |||||||||||||||
J. W. Ripley | $ | 63,773 | $ | 22,680 | $ | 193,033 | $ | — | $ | 2,742,546 |
(1) | Employee contributions include any deferrals of annual compensation, including earned awards under the Annual Incentive Plan and any earned performance shares. | |
(2) | These amounts relate to the company match in Savings PlanMake-up Accounts and are also included in the named executive officers’ compensation under “All Other Compensation” in the Summary Compensation Table. | |
(3) | Deemed investment earnings are credited at the monthly compound equivalent of the prime rate, which is adjusted quarterly based upon the published prime rate, or the increase or decrease of the fair market value of the applicable number of shares of our common stock. | |
(4) | In service withdrawals are no longer permitted under the SERP, as amended in 2005. The payment to Mr. Fortnum was a result of an election made prior to that amendment. In December 2007, we provided participants in the SERP an opportunity to elect to receive the balances deferred in their Annual Deferral Accounts, Annual Incentive Plan Accounts, Performance Plan Accounts and Prior Plan Accounts in a lump sum during the third quarter of 2008. All of the balances in these accounts are employee contributions. | |
(5) | These balances include income from prior years which was deferred by the named executive officers and earnings on the amounts previously deferred as well as deferred 2007 income which is included as income in the Summary Compensation Table as well as in this amount. In the case of S. C. Scott, C. K. Beebe and J. W. Ripley, the balances include deferrals of income earned with our predecessor before we became an independent public company. |
35
• | acquisition by an individual, entity or group of persons of beneficial ownership of 20% or more of our common stock other than most acquisitions to which we are a party, | |
• | a majority of our directors at the start of atwo-year period and persons whose nominations are approved by those directors or directors approved by those directors not constituting a majority of our board at the end of thetwo-year period, | |
• | a merger or sale of substantially all of our assets except where owners of our shares own a majority of the voting shares of the surviving corporation or purchaser of the assets and any person other than us or our benefits plans who owned 15% of our stock before the transaction does not own 25% or more of the stock of the survivor or purchaser and the directors who must be a majority under the preceding provision are a majority of the directors of the surviving company or purchaser or | |
• | the consummation of a plan of our complete liquidation or dissolution. |
• | We haveCauseto terminate the named executive officer if the named executive officer (a) has willfully engaged in conduct which involves dishonesty or moral turpitude which either (1) results in substantial personal enrichment of the named executive officer at our expense or (2) is demonstrably and materially injurious to our financial condition or reputation, (b) has willfully violated the provisions of the confidentiality or non-competition agreement entered into between the company or any of its subsidiaries and the named executive officer or (c) has committed a felony. | |
• | The named executive officer is said to haveGood Reasonto terminate his or her employment (and thereby gain access to the benefits described below) if we reduce the named executive officer’s base salary, require the named executive officer to relocate more than 35 miles from his or her office |
36
location immediately prior to the change in control, reduce in any manner which the officer reasonably considers important the named executive officer’s title, job authorities or responsibilities immediately prior to the change in control or take certain other actions as specified in the definition. |
37
S. C. Scott | C. K. Beebe | J. C. Fortnum | J. L. Fiamenghi | J. W. Ripley(10) | ||||||||||||||||
Cash Severance | $ | 5,701,050 | (8) | $ | 2,247,000 | $ | 2,239,125 | $ | 2,325,946 | (7) | $ | 1,646,400 | (8) | |||||||
Pro rata Bonus Payment(1) | $ | 973,350 | $ | 321,000 | $ | 319,875 | $ | 376,353 | $ | 205,800 | ||||||||||
Early Vesting of Stock Options | $ | 899,610 | $ | 308,376 | $ | 290,961 | $ | 288,609 | $ | 193,074 | ||||||||||
Early Vesting of Restricted Stock | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Early Vesting of Performance Shares(2) | $ | 5,349,168 | $ | 1,954,976 | $ | 1,979,536 | $ | 1,483,424 | $ | 1,075,728 | ||||||||||
Retirement Benefit Payment(3) | $ | 422,770 | $ | 231,280 | $ | 221,419 | $ | — | $ | 31,220 | ||||||||||
Defined Contribution Plan Payments(4) | $ | 400,464 | $ | 154,080 | $ | 153,540 | $ | 247,640 | $ | 111,132 | ||||||||||
Health and Welfare Benefit Values | $ | 34,334 | (9) | $ | 34,334 | $ | 48,677 | $ | 24,188 | $ | 34,334 | (9) | ||||||||
Post Retirement Medical Coverage(5) | $ | 3,900 | $ | 55,382 | $ | 38,340 | $ | — | $ | 3,900 | ||||||||||
Outplacement Services | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||||
Personal Allowances | $ | 5,077 | $ | 3,174 | $ | 3,882 | $ | 3,797 | $ | 3,123 | ||||||||||
Excise Tax and Gross Up | $ | — | $ | 1,563,501 | $ | 1,517,290 | $ | — | $ | — | ||||||||||
Executive Life Insurance(6) | $ | 190,983 | $ | — | $ | — | $ | — | $ | 144,935 | ||||||||||
FGTS Payment(7) | $ | — | $ | — | $ | — | $ | 308,525 | $ | — | ||||||||||
Total | $ | 14,005,706 | $ | 6,898,103 | $ | 6,837,645 | $ | 5,083,482 | $ | 3,474,646 | ||||||||||
(1) | Target award based on guaranteed target payment under Severance Agreements. |
38
(2) | Reflects the target number of performance shares for the 2005 through 2007, 2006 through 2008 and 2007 through 2009 performance periods multiplied by the highest stock price of a share of common stock during the90-day period immediately preceding the date of the assumed change in control ($49.12). | |
(3) | Reflects only the additional amounts earned under the Cash Balance Plan and nonqualified Cash BalanceMake-up Accounts due to a change in control (three extra years of service credits). Does not include the projected balance at December 31, 2007. For Mr. Scott and Mr. Ripley, who are over age 62, the amounts have been prorated to age 65. | |
(4) | Reflects cash payments or nonqualified plan credits equal to three years of employer matching contributions under the Retirement Savings Plan and the Savings PlanMake-up Accounts in addition to the matching contributions otherwise required under those plans. | |
(5) | Officers are vested in their RHCSA accounts at age 55 with 10 years of service. Upon a change in control, each named executive officer would receive three additional years of service credits and company contributions and become vested in their RHCSA accounts, if not already vested. Mr. Fiamenghi does not participate in a RHCSA account. | |
(6) | Represents the sum of the continued payments Mr. Scott and Mr. Ripley would receive (through 2011 and 2012, respectively) in amounts equal to the participant’s premiums on life insurance policies for their benefit and in amounts equal to the taxes due as a result of such payments. These amounts would be paid regardless of the reason for termination. The combined death benefit on those policies is $1.5 million for Mr. Scott and $1 million for Mr. Ripley. | |
(7) | Upon termination of employment from our Brazilian subsidiary following a change in control, Mr. Fiamenghi will receive the balance in his government-mandated FGTS account, an additional 40% of the sum of that balance and previous distributions from that account which is required when termination is without cause, plus three years of salary continuation under his executive severance agreement. The amount shown is the additional 40% payment. His cash severance amount has been reduced (from $2,634,471 to $2,325,946) by the additional 40% payment on his FGTS account. An exchange rate of 1.95 Reais/USD (the 2007 average rate) has been used to convert payments in Brazilian Reais to U.S. Dollars. | |
(8) | For Mr. Scott and Mr. Ripley, the Compensation Committee has discretion to provide a prorated cash severance payment since they are both over age 62. These numbers, however, assume the Committee would not exercise this discretion. | |
(9) | For Mr. Scott and Mr. Ripley, the Compensation Committee has discretion to provide a prorated health and welfare value since they are both over age 62. These numbers, however, assume the Committee would not exercise this discretion. | |
(10) | Mr. Ripley retired effective January 1, 2008. Therefore, he will not receive any payments upon a change in control. |
39
Number of securities | ||||||||||||
remaining available for | ||||||||||||
Number of securities | future issuance under | |||||||||||
to be issued | Weighted-average | equity compensation | ||||||||||
upon exercise of | exercise price of | plans (excluding | ||||||||||
outstanding options, | outstanding options, | securities reflected | ||||||||||
Plan Category | warrants and rights | warrants and rights | in the first column)(5) | |||||||||
Equity compensation plans approved by security holders | 4,619,340 | (1) | $ | 22.30 | (2) | 5,433,902 | ||||||
Equity compensation plans not approved by security holders | 285,600 | (3) | N/A | 519,947 | ||||||||
Total | 4,904,940 | $ | 22.30 | (4) | 5,953,849 | |||||||
(1) | This amount includes an aggregate of 337,350 shares of company common stock representing outstanding performance share target awards that will vest only upon the successful completion of the relevant long-term incentive performance cycle and will be payable, if earned, by the company in shares of company common stock. The amount included in this column in respect of these performance awards assumes that all such performance awards vest 100%. | |
(2) | This price does not take into account the 337,350 performance share target awards referenced in footnote 1, because those awards have no exercise price. | |
(3) | This amount assumes that all phantom stock units of the company credited to the Deferred Compensation Plan for Outside Directors and the Supplemental Executive Retirement Plan accounts of the participating directors and executive officers will be paid out in the form of our common stock. | |
(4) | This price represents the weighted-average exercise price of outstanding options; it excludes the phantom stock units referenced in footnote 3 as well as the 337,350 performance share target awards referenced in footnote 1, because those awards have no exercise price. | |
(5) | These amounts assume issuance of shares of company common stock at $36.75, the closing price for a share of our common stock on December 31, 2007. |
40
• | the size of the transaction and the amount payable, directly or indirectly, to a related person; | |
• | the nature of the interest or involvement of the related person in the transaction; | |
• | whether the transaction creates an appearance of a conflict of interest or unfair dealing; | |
• | whether the rates or charges and other key terms involved in the transaction were determined by competitive bids; | |
• | whether the transaction involves the provision of goods or services to the company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the company as would be available in comparable transactions with or involving unaffiliated third parties; and, | |
• | the impact of the transaction on the company and its stockholders. |
• | The Chief Financial Officer will advise the Chairman of the Audit Committee of any related person transaction of which she becomes aware. | |
• | The Audit Committee will consider such related person transaction at its next regularly scheduled meeting or, if it deems it advisable, prior thereto at an interim meeting called for such purpose. If approval or ratification of the related person transaction requires consideration by all of the disinterested and independent members of the board of directors, the related person transaction will be considered at the board’s next regularly scheduled meeting or, if the disinterested and independent directors deem it advisable, prior thereto at an interim meeting called for such purpose. | |
• | Except as set forth below, any related person transaction not approved in advance by the Audit Committee or a majority of the disinterested and independent directors will not be entered into by the company unless the consummation of the transaction is expressly subject to ratification by the Audit Committee or a majority of the disinterested and independent directors. If the transaction is not so ratified, the company will not consummate the transaction. It is the responsibility of management to notify the Chief Financial Officer of all potential related person transactions in advance, so as to allow appropriate review under the company’s guidelines. | |
• | If the company enters into a transaction that (i) the company was not aware constituted a related person transaction at the time it was entered into but which it subsequently determines is a related person transaction prior to full performance thereof or (ii) did not constitute a related person transaction at the time such transaction was entered into but thereafter becomes a related person transaction prior to full performance thereof, then in either such case the related person transaction will be presented for ratification in the manner set forth above. If the related person transaction is not ratified, then the company will take all reasonable actions to attempt to terminate its participation in the transaction. |
41
Reasonable steps will not be deemed to require that the company act in breach of any contractual obligations or otherwise expose itself to legal liability. |
• | The Chief Financial Officer will update the Audit Committee or the board, as applicable, on the status of any approved related person transaction not less than annually, or upon termination of or anticipated significant change in the related person transaction. Anticipated significant changes will be subject to the approval processes required for initial approval of a related person transaction. |
2007 | 2006 | |||||||
Audit fees for the annual consolidated financial statements and internal control over financial reporting and completion of limited reviews of quarterly financial information | $ | 2,571,000 | $ | 2,347,000 | ||||
Totalaudit-related fees | 156,000 | 117,000 | ||||||
Total tax fees | 77,000 | 84,000 | ||||||
All other fees | 2,000 | 2,000 |
42
43
44
45
BOARD MEMBERSHIP AND DIRECTOR CANDIDATE SELECTION CRITERIA
• | the highest personal and professional ethics, integrity and values | |
• | education and breadth of experience to understand business problems and evaluate the possible solutions | |
• | the ability to work well with others | |
• | respect for the views of others and an open-minded approach to problems | |
• | a reasoned and balanced commitment to the social responsibilities of the Company | |
• | an interest and availability of time to be involved with the Company and its employees over a sustained period | |
• | stature and experience to represent the Company before the public, stockholders and the other various individuals and groups that affect the Company | |
• | the willingness to objectively appraise management performance in the interest of the stockholders | |
• | an open mind on all policy issues and areas of activity affecting overall interests of the Company and its stockholders | |
• | no involvement in other activities or interests that create a conflict with the director’s responsibility to the Company and its stockholders |
A-1
A-2
ADMISSION TICKET
2008 Annual Meeting of Stockholders
Wednesday, May 21, 2008
9:00 a.m. at the
Please retain this portion of the Proxy Card if you wish to attend the Annual Meeting of Stockholders in person. You must present this portion of the Proxy Card at the door for admission for yourself and one guest. Seating will be on a first-come, first-served basis, and you may be asked to present valid picture identification before being admitted.
The use of cameras at the annual meeting is prohibited, and they will not be allowed in the meeting room, except by credentialed media. We realize that many cellular phones have built-in digital cameras. While these phones may be brought into the room, the camera function may not be used at any time. No recording devices or large packages will be permitted in the meeting room.
ADMISSION TICKET
▼ FOLD AND DETACH HERE ▼ | ▼ FOLD AND DETACH HERE ▼ |
Annual Meeting of Stockholders – To Be Held Wednesday, May 21, 2008
THIS PROXY/VOTING INSTRUCTION IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I, a stockholder of Corn Products International, Inc., acknowledge receipt of the Proxy Statement dated April 4, 2008, and except as described in the next paragraph appoint SAMUEL C. SCOTT III and MARY ANN HYNES, and each of them, as proxies and attorneys-in-fact, with full power of substitution, on my behalf and in my name, to represent me at the Annual Meeting of Stockholders to be held Wednesday, May 21, 2008 at 9:00 a.m., local time, at theWestbrook Corporate Center Meeting Facility, Westchester, Illinois 60154, and at any adjournment(s) of the meeting, and to vote all shares of common stock which I would be entitled to vote if I were personally present, on all matters listed on the reverse side.
With respect to any shares represented by this Proxy Card/Voting Instruction Form which are votable and held on behalf of the undersigned in the Corn Products International, Inc. Retirement Savings Plans (collectively, the “Plan”), the undersigned directs Fidelity Investments Institutional Operations Company, Inc., as Trustee of the Plan to vote all such shares on the matters shown, and in the manner directed on the reverse hereof, unless to do so would be inconsistent with the Trustee’s duties. If you wish to vote the Corn Products shares allocated to your Plan account, you cannot do so in person. You must use this Proxy Card/Voting Instruction Form or submit your voting instructions via the Internet or telephone. If you do not return your signed Proxy Card/Voting Instruction Form or provide Internet or telephonic voting instructions on a timely basis for the shares allocated to your Plan account, those shares will not be voted. If you return a signed Proxy Card/Voting Instruction Form but do not indicate how the shares should be voted on a matter, the shares represented by your signed Proxy Card/Voting Instruction Form will be voted by the Trustee as the Board of Directors recommends.
IF YOU WISH TO VOTE BY THE INTERNET, TELEPHONE OR MAIL,
PLEASE READ THE INSTRUCTIONS ON THE REVERSE SIDE.
Corn Products International, Inc. encourages you to take advantage of convenient ways to vote these shares for matters to be covered at the 2008 Annual Meeting of Stockholders. Please take the opportunity to use one of the three voting methods outlined on the reverse side to cast your ballot.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
Address Changes/Comments: | ||||
(Continued, and to be signed and dated, on the reverse side.)
5 WESTBROOK CORPORATE CENTER
WESTCHESTER, ILLINOIS 60154
VOTE BY INTERNET - www.proxyvote.com
VOTE BY PHONE - 1-800-690-6903
VOTE BY MAIL
If you vote using the Internet or vote by phone, please do not mail your proxy.
THANK YOU FOR VOTING
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | CORNP1 | KEEP THIS PORTION FOR YOUR RECORDS | ||
DETACH AND RETURN THIS PORTION ONLY |
CORN PRODUCTS INTERNATIONAL, INC.
THE DIRECTORS RECOMMEND A VOTE “FOR” ITEMS 1 AND 2 Vote On Directors |
For All | Withhold All | For All Except | To withhold authority to vote, mark “For All Except” and write the nominee’s number on the line below. | |||||||||
1. | To elect the following Nominees for a term expiring at the 2011 annual meeting of stockholders: | |||||||||||
01) | Richard J. Almeida | o | o | o | ||||||||
02) | Gregory B. Kenny | |||||||||||
03) | James M. Ringler |
Vote On Proposal | For | Against | Abstain | |||||
2. | To ratify the appointment of KPMG LLP as independent registered public accounting firm for the Company for 2008. | o | o | o |
The shares represented by this proxy/voting instruction, when properly executed, will be voted in the manner directed herein by the undersigned Stockholder(s).If no direction is made, this proxy will be voted FOR items 1 and 2.If any other matters properly come before the meeting, or any adjournment or adjournments thereof, the persons named in this proxy/voting instruction will vote in his or her or its discretion.
For address changes and/or comments, please check this box and write them on the back where indicated.o
Yes | No | |||
Please indicate if you plan to attend this meeting. | o | o | ||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |