FORM DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. )
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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 Rule 14a-12
Gibraltar Industries, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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þ No fee required.
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TABLE OF CONTENTS
GIBRALTAR
INDUSTRIES, INC.
3556 Lake Shore Road
PO Box 2028
Buffalo, New York
14219-0228
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE
HELD MAY 7, 2009
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
of Gibraltar Industries, Inc., a Delaware corporation (the
Company), will be held at the Gateway Building, 3556
Lake Shore Road, Buffalo, New York, on May 7, 2009, at
10:30 a.m., local time, for the following purposes:
1. To elect two Class III Directors to hold office
until the 2012 Annual Meeting and until their successors have
been elected and qualified.
2. To consider and take action upon the approval of the
adoption of the Third Amendment and Restatement of the Gibraltar
Industries, Inc. 2005 Equity Incentive Plan.
3. To ratify the selection of Ernst & Young LLP
as the independent registered public accounting firm of the
Company for the fiscal year ending December 31, 2009.
4. To take action upon and transact such other business as
may be properly brought before the meeting or any adjournment or
adjournments thereof.
The Board of Directors has fixed the close of business on
March 20, 2009, as the record date for the determination of
stockholders entitled to receive notice of and to vote at the
Annual Meeting.
Stockholders who do not expect to attend the meeting in person
are urged to vote, sign and date the enclosed proxy and return
it promptly in the envelope enclosed for that purpose. Returning
the proxy card does not deprive you of your right to attend the
Annual Meeting and to vote your shares in person for matters
acted upon at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Timothy J. Heasley
Secretary
Dated: April 3, 2009
GIBRALTAR
INDUSTRIES, INC.
3556 Lake Shore Road
PO Box 2028
Buffalo, New York
14219-0228
DEFINITIVE
PROXY STATEMENT
April 3,
2009
Date,
Time and Place of Annual Meeting
This Definitive Proxy Statement and the accompanying form of
proxy are being furnished in connection with the solicitation by
the Board of Directors of Gibraltar Industries, Inc., a Delaware
corporation (the Company), of proxies to be voted at
the Annual Meeting of Stockholders to be held at the Gateway
Building, 3556 Lake Shore Road, Buffalo, New York, on
May 7, 2009 at 10:30 a.m., local time, and at any
adjournment or adjournments thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders.
The Board of Directors has fixed the close of business on
March 20, 2009, as the record date for the determination of
stockholders entitled to receive notice of and to vote at the
meeting. At the close of business on March 20, 2009 the
Company had outstanding and entitled to vote at the Annual
Meeting 30,068,241 shares of common stock, $0.01 par
value per share (Common Stock). Each share is
entitled to one vote on each matter properly brought before the
Annual Meeting. This Definitive Proxy Statement and the
accompanying form of proxy will first be sent or given to
stockholders on or about April 3, 2009.
Record
Date and Related Information
The cost of solicitation of proxies in the accompanying form
will be borne by the Company, including expenses in connection
with preparing and mailing this Definitive Proxy Statement. In
addition to the use of the mail, proxies may be solicited by
personal interviews and by telephone by directors, officers and
employees of the Company. Arrangements will be made with
brokerage houses, banks and other custodians, nominees and
fiduciaries for the forwarding of solicitation material to the
beneficial owners of Common Stock, and the Company will
reimburse them for reasonable
out-of-pocket
expenses incurred in connection therewith.
If the enclosed proxy is properly executed, returned and
received in time for the Annual Meeting, the shares represented
thereby will be voted in accordance with the specifications, if
any, made on the proxy card. If no specification is made, the
proxies will be voted as recommended by the Board of Directors
FOR the nominees for director named in this Definitive Proxy
Statement, FOR the approval of the adoption of the Third
Amendment and Restatement of the Gibraltar Industries, Inc. 2005
Equity Incentive Plan and FOR the ratification of
Ernst & Young LLP as the Companys independent
registered public accounting firm.
The presence, in person or by proxy, of the holders of a
majority of the outstanding shares of Common Stock entitled to
vote at the Annual Meeting will constitute a quorum. Each
nominee for election as a director requires a plurality of the
votes cast in order to be elected. A plurality means that the
nominees with the largest number of votes are elected as
director up to the maximum number of directors to be elected at
the Annual Meeting. Each other proposal submitted to the
stockholders requires the affirmative vote of holders of a
majority of the shares present at the meeting, in person or by
proxy, entitled to vote. With respect to the election of
directors, only shares that are voted in favor of a particular
nominee will be counted towards achievement of a plurality and
where a stockholder properly withholds authority to vote for a
particular nominee, such shares will not be counted towards such
nominees or any other nominees achievement of a
plurality. With respect to the other proposals to be voted upon:
(i) if a stockholder specifies an abstention from voting on
a proposal, such shares are considered present at the meeting
for such proposal but, since they are not affirmative votes for
the proposal, they will have the same effect as votes against
the proposal and (ii) shares registered in the names of
brokers or other street name nominees for which
proxies are voted on some but not all matters will be considered
to be voted only as to those matters actually voted, and will
not have the effect of either an affirmative or negative vote as
to the matters with respect to which a beneficial holder has not
provided voting instructions.
Revocability
of Proxy
The execution of a proxy will not affect a stockholders
right to attend the Annual Meeting and to vote in person. A
stockholder who executes a proxy may revoke it at any time
before it is exercised by giving written notice to the
Secretary, by appearing at the Annual Meeting and so stating, or
by submitting another duly executed proxy bearing a later date.
PROPOSAL 1
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Company provides that
the Board of Directors shall consist of not less than three nor
more than fifteen Directors who shall be divided into three
classes, with the term of one class expiring each year. The
Board of Directors is presently comprised of seven members:
David N. Campbell and Robert E. Sadler, Jr., Class III
Directors whose terms expire in 2009; William J. Colombo and
Gerald S. Lippes, Class II Directors whose terms expire in
2010 and Brian J. Lipke, William P. Montague and Arthur A.
Russ, Jr., Class I Directors whose terms expire in
2011. At the Annual Meeting of Stockholders in 2009, two
Class III Directors shall be elected to hold office for a
term expiring in 2012. David N. Campbell and Robert E.
Sadler, Jr. have been nominated by the Board of Directors
for election as such Class III Directors. Both
Messrs. Campbell and Sadler are independent directors under
the independence standards provided by Rule 4200(a)(15) of
the National Association of Securities Dealers, Inc.
(NASDAQ) listing standards.
Unless instructions to the contrary are received, it is intended
that the shares represented by proxies will be voted for the
election of David N. Campbell and Robert E. Sadler, Jr. as
directors. Mr. Campbell has been a director of the Company
since the consummation of the Companys initial public
offering in 1993 and has been previously elected by the
Companys stockholders. Mr. Sadler has been a director
of the Company since 2004 and has previously been elected by the
Companys stockholders. If either Mr. Campbell or
Mr. Sadler becomes unavailable for election for any reason,
it is intended that the shares represented by the proxies
solicited herewith will be voted for such other person or
persons as the Board of Directors shall designate. Each of
Messrs. Campbell and Sadler have consented to being named
in this Definitive Proxy Statement and to serve if elected to
office.
The following information is provided concerning the Directors
and the nominees for election as Class III Directors:
Brian J. Lipke has been Chairman of the Board since 1992 and
Chief Executive Officer since 1987 and a Director of the Company
since its formation. He also served as President of the Company
through 1999. From 1972 to 1987, Mr. Lipke held various
positions with the Company in production, purchasing and
divisional management. He is also a director of Merchants Mutual
Insurance Company and Moog Inc.
William P. Montague has served as a Director of the Company
since the consummation of the Companys initial public
offering in 1993. He served as Executive Vice President and
Chief Financial Officer of Mark IV Industries, Inc., a
manufacturer of engineered systems and components from 1986 to
February 1996, President and Director from March 1996 through
October 2004, and as Chief Executive Officer and Director of
that company from November 2004 to July 2008. Mr. Montague
is also a director of Endo Pharmaceuticals Holding Inc.
Arthur A. Russ, Jr. has served as a Director of the Company
since 1993. He has been engaged in the private practice of law
since 1969 and is a partner in the firm of Phillips Lytle LLP,
located in Buffalo, New York. Mr. Russ is also a director
of several private companies and nonprofit entities.
William J. Colombo has served as a Director of the Company since
his appointment by the Board of Directors in August 2003. He
served as Chief Operating Officer and Executive Vice President
of Dicks Sporting Goods, Inc. (Dicks)
from 1995 to 1998 and as President of dsports.com LLC, the
Internet commerce subsidiary of Dicks from 1998 to 2001.
From 2002 through February 2008, Mr. Colombo served as
President, Chief Operating Officer and a Director of
Dicks. Mr. Colombo currently serves as Vice Chairman
of the Board of Dicks.
Gerald S. Lippes has served as a Director of the Company since
1993 and was Secretary of the Company from December 2002 through
November 2003. He has been engaged in the private practice of
law since 1965 and is a partner in the firm of Lippes Mathias
Wexler Friedman LLP, located in Buffalo, New York.
Mr. Lippes is also a director of several private companies.
2
David N. Campbell has served as a Director of the Company since
the consummation of the Companys initial public offering
in 1993. He is Executive Director of Hands on Worldwide, a
not-for-profit
volunteer-based disaster response organization. He has also been
a Managing Director of Innovation Advisors, a strategic advisory
firm focused on merger and acquisition transactions in the
information technology software and services industry, since
November 2001. He served as President and Chief Executive
Officer of Xpedior, a provider of information technology
solutions, from September 1999 to November 2000. Prior to that
he served as President of the GTE Technology Organization and
from July 1995 to September 1999 he served as President of BBN
Technologies, a business unit of GTE Corporation. From March
1983 until September 1994 he served as Chairman of the Board and
Chief Executive Officer of Computer Task Group, Incorporated.
Robert E. Sadler, Jr. has served as a Director of the
Company since his appointment by the Board of Directors in
January 2004. He served as President of M&T Bank from 1996
to 2003, as Chairman of M&T Bank from July 2003 to June
2005 and, from June 2005 to January 2007 as President and Chief
Executive Officer of M&T Bank Corporation, one of the 20
largest banks in the U.S. Mr. Sadler currently serves
as Vice Chairman of both M&T Bank and M&T Bank
Corporation. Mr. Sadler is also a director of several
private companies and nonprofit entities, including Delaware
North Companies, Inc. and Security Mutual Life Insurance Company
of New York.
Vote
Required
The affirmative vote of a plurality of the shares of Common
Stock present, in person or by proxy, is required for the
election of the Directors, assuming a quorum is present or
represented at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR THE
NOMINEES FOR CLASS III DIRECTORS IN PROPOSAL 1.
THE BOARD
OF DIRECTORS AND ITS COMMITTEES
Our Board of Directors has three standing committees consisting
of the Audit Committee, the Compensation Committee and the
Nominating and Corporate Governance Committee. Copies of the
charters of these committees are available on the Companys
website at: www.gibraltar1.com. During the fiscal year ending
December 31, 2008, the Board of Directors held eleven
(11) meetings. Each Director attended at least 75% of the
aggregate number of meetings of the Board of Directors and
committees on which he served during the period.
Audit
Committee
The Audit Committee is comprised of Messrs. Campbell,
Sadler and Montague, each of whom is independent as required by
the rules of the NASDAQ as applicable to such Committee. The
Audit Committee assists the Board of Directors in its oversight
of matters relating to the financial reporting process, the
system of internal accounting control and management of
financial risks, the audit process and compliance with laws and
regulations and the Companys code of business conduct. The
Audit Committee held eight (8) meetings in 2008. The Board
of Directors has made a determination that Mr. Campbell, an
independent director, is an audit committee financial
expert under the standards established by
Item 407(d)(5)(ii) of
Regulation S-K
promulgated under the Securities Exchange Act of 1934, as
amended. Mr. Campbells business experience is set
forth above under Election of Directors.
Compensation
Committee
The Compensation Committee is composed of Messrs. Colombo,
Montague and Sadler, each of whom is independent as required by
the rules of the NASDAQ as applicable to such Committee. The
Compensation Committee held three (3) meetings in 2008. The
Compensation Committee acts in accordance with its charter to
make recommendations concerning the salaries and incentive
compensation packages for executive officers and directors of
the Company which includes meeting in executive session to
determine compensation package recommendations for the
Companys executive officers. Salary and incentive
compensation package recommendations of the Compensation
Committee are approved by the Board of Directors. The
Compensation Committee is responsible for ensuring their
recommendations are in line with market conditions and enhance
the Companys ability to attract, retain and motivate
highly qualified individuals to serve as executive officers and
directors. To fulfill its responsibilities, the Compensation
Committee employs a nationally recognized compensation
consultant, Wyatt Watson, to perform market studies of
compensation packages offered by a peer group of companies. The
Compensation Committee works with Wyatt
3
Watson and the Companys executive management team to make
final recommendations to the Board of Directors regarding the
design of the programs used to compensate the Companys
executive officers and directors in a manner which is consistent
with the Companys compensation objectives. The
Compensation Committee is also responsible for the
administration of the Companys cash and equity based
incentive compensation plans and authorization of grants of
equity based awards pursuant to such plans.
Compensation
Committee Interlocks and Insider Participation
During 2008, Messrs. Colombo, Montague and Sadler served as
members of the Compensation Committee. None of Mr. Colombo,
Mr. Montague or Mr. Sadler was an executive officer or
employee of the Company or any of its subsidiaries during 2008
or prior thereto. In 2008, none of the executive officers of the
Company or members of the Compensation Committee served on the
compensation committee or on any other committee performing
similar functions for any other entitys board of
directors, any of whose officers or directors served on the
Companys Board of Directors or Compensation Committee.
Nominating
and Corporate Governance Committee
The Nominating and Corporate Governance Committee is comprised
of Messrs. Campbell, Colombo and Montague, each of whom is
independent as required by the rules of the NASDAQ as applicable
to such Committee. The purpose of the Committee is to identify
and nominate individuals qualified to become Board and committee
members, to establish and implement policies and procedures
relating to the nominations of qualified candidates, to develop
and recommend to the Board a set of corporate governance
guidelines for the Company, to oversee, review and make periodic
recommendations to the Board concerning the Companys
corporate governance guidelines and policies, and to oversee,
review and approve related party transactions. The Nominating
and Corporate Governance Committee held four (4) meetings
in 2008. The current nominees for director were recommended for
election to the Board at a meeting of the Nominating and
Corporate Governance Committee held February 17, 2009.
Mr. Campbell did not participate in his recommendation for
election to the Board.
Stockholder
Recommendations of Nominees
The Company has adopted a policy regarding stockholder
recommendations to the Nominating and Corporate Governance
Committee of nominees for Director. A stockholder may recommend
a nominee for consideration by the Nominating and Corporate
Governance Committee by sending a recommendation, in writing, to
the Secretary of the Company or any member of the Nominating and
Corporate Governance Committee, together with such supporting
material as the stockholder deems appropriate. Any person
recommended by a stockholder in accordance with this policy will
be considered by the Nominating and Corporate Governance
Committee in the same manner and by the same criteria as other
potential nominees.
Communication
with the Board of Directors
The Board of Directors has established a policy with respect to
stockholder communication with the directors. Stockholders may
send communications to the Board of Directors in care of the
Secretary of the Company at its headquarters located at 3556
Lake Shore Road, PO Box 2028, Buffalo, NY
14219-0228.
All mail will be opened and logged. All communication, other
than trivial communications or obscene material, will be
forwarded promptly to the directors. Trivial material will be
delivered at the next meeting of the Board of Directors. Mail
addressed to a particular member of the Board of Directors will
be forwarded to that member. Mail addressed to Outside
Directors or Non-Management Directors or
similar addressees will be sent to the chairman of the Audit
Committee.
The Company does not have a policy regarding director attendance
at the annual meeting. Last years annual meeting was
attended by David N. Campbell, William J. Colombo, Brian J.
Lipke, Gerald S. Lippes, William P. Montague, Arthur A.
Russ, Jr. and Robert E. Sadler, Jr. constituting the
entire Board of Directors.
Independent
Directors
The Board of Directors has determined that each of David N.
Campbell, William J. Colombo, William P. Montague and Robert E.
Sadler, Jr. is an independent director as
defined in Rule 4200(a)(15) of the NASDAQ listing
standards, which the Board has adopted as the standards by which
it will determine independence.
4
DIRECTORS
AND EXECUTIVE OFFICERS OF THE COMPANY
Directors
and Executive Officers
The following table sets forth certain information regarding the
Directors and executive officers of the Company as of
April 3, 2009:
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Name
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Age
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Position(s) Held
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Brian J. Lipke
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57
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Chairman of the Board and Chief Executive Officer
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Henning N. Kornbrekke
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64
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|
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President and Chief Operating Officer
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Kenneth W. Smith
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58
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|
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Senior Vice President and Chief Financial Officer
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Timothy J. Heasley
|
|
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55
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|
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Senior Vice President, Corporate Controller and Secretary
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Paul M. Murray
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56
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Senior Vice President of Human Resources and Organizational
Development
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David N. Campbell
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67
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|
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Director
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William J. Colombo
|
|
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53
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|
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Director
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Gerald S. Lippes
|
|
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69
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|
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Director
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William P. Montague
|
|
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62
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|
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Director
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Arthur A. Russ, Jr.
|
|
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66
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|
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Director
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Robert E. Sadler, Jr.
|
|
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63
|
|
|
Director
|
The recent business experience of the Directors is set forth
above under Election of Directors. The recent
business experience of the executive officers who are not also
Directors is as follows:
Henning N. Kornbrekke has served as Chief Operating Officer of
the Company since December 2004 and President of the Company
since February 2004. Mr. Kornbrekke served as Vice
President of the Company and President of its Building Products
Group, from January 2002 to January 2004. Prior thereto,
Mr. Kornbrekke served as the Chief Executive Officer of a
division of Rexam, PLC and before that as President and General
Manager of the hardware division of the Stanley Works.
Mr. Kornbrekke also serves as a director of a private
company.
Kenneth W. Smith was elected Senior Vice President and Chief
Financial Officer of the Company on March 18, 2008. Prior
thereto, he served as Chief Financial Officer of Circor
International, a global manufacturer of flow control components
from 2000 through December 2007, before that as Vice President
of Finance for North Safety Products, a manufacturer of personal
protection equipment for employees of industrial companies, for
four years and before that as Finance Director of Digital
Equipment Corporation, a manufacturer of computer hardware and
software and a provider of integration services.
Timothy J. Heasley has been Senior Vice President, Corporate
Controller and Secretary of the Company since joining the
Company in October 2005. Prior to joining Gibraltar,
Mr. Heasley served as Chief Financial Officer for MRC
Industrial Group, Inc. from 2003 to 2005, and, before that as
Controller of the Engineered Products Group of SPS Technologies,
Inc.
Paul M. Murray has been Senior Vice President of Human Resources
and Organizational Development of the Company since May 2004 and
was Vice President of Administration from 1997 to May 2004.
Prior thereto, Mr. Murray held Human Resource management
positions at The Sherwin Williams Company and Pratt &
Lambert.
5
COMPENSATION
OF DIRECTORS
Watson Wyatt, a nationally recognized compensation consultant
provides survey information and advice to the Compensation
Committee with respect to compensation related matters. In 2006,
Watson Wyatt provided the Compensation Committee survey data and
other publicly available information relating to non-employee
director compensation for a peer group of companies. The peer
group of companies used for this purpose by Watson Wyatt
included Carpenter Technology, Simpson Manufacturing, Curtis
Wright, Smith (A.O.), Gardner Denver, Steel Dynamics,
Quanex, and Reliance Steel.
Using this information our Board of Directors approved a
compensation program for non-employee directors consisting of an
annual retainer of $24,000 per year, meeting fees of $2,000 for
each meeting of the Board of Directors or committee meeting
attended and an additional fee to the Chairmen of the
Compensation Committee, the Nominating and Corporate Governance
Committee and the Audit Committee of $5,000 per year,
respectively for serving as Chairman. The Board of Directors
made no change to these amounts since 2006.
In addition, the Board of Directors, in consultation with the
Compensation Committee, approved annual grants of
1,000 shares of restricted stock to non-employee Directors
and awards of 2,000 shares of restricted stock to new
Directors upon their election to the Board. Restrictions on
these shares of restricted stock will expire three years
following the grant date. Pursuant to this approval, in May
2008, each non-employee director received awards of
1,000 shares of restricted stock.
Our Management Stock Purchase Plan (MSPP) permits
non-employee directors to elect to defer their receipt of
payment of a portion of their retainer, chair
and/or
meeting fees to an account established for the director and
credited with restricted stock units equal in number to the
number of shares of the Companys stock which could have
been purchased using the amount of director fees deferred (see
the discussion of the MSPP under the caption Non-Qualified
Deferred Compensation discussion in the Compensation
Discussion and Analysis below). The Company allocates
additional restricted stock units to the accounts of
non-employee directors who defer the receipt of retainer fees to
match the amount of restricted stock units allocated to reflect
deferred retainer fees of non-employee directors.
2008 Director
Compensation
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Change in
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Pension
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Fees
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Value and
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Earned
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Nonqualified
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Or
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Deferred
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Paid in
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Stock
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Compensation
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Cash
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Awards
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Earnings
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Name
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(1)
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(2)(4)
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(3)(4)
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Total
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David N. Campbell
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$
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69,000
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|
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$
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40,765
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|
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$
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3,954
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|
|
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$
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113,719
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William J. Colombo
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|
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$
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71,000
|
|
|
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$
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49,163
|
|
|
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$
|
(1,292
|
)
|
|
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$
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118,871
|
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Gerald S. Lippes
|
|
|
$
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64,000
|
|
|
|
$
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37,008
|
|
|
|
$
|
2,941
|
|
|
|
$
|
103,949
|
|
William P. Montague
|
|
|
$
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65,000
|
|
|
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$
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25,503
|
|
|
|
$
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3,017
|
|
|
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$
|
93,520
|
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Arthur A. Russ, Jr.
|
|
|
$
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56,000
|
|
|
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$
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25,503
|
|
|
|
$
|
4,965
|
|
|
|
$
|
86,468
|
|
Robert E. Sadler, Jr.
|
|
|
$
|
62,000
|
|
|
|
$
|
40,765
|
|
|
|
$
|
23,648
|
|
|
|
$
|
126,413
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
(1) |
|
Consists of annual retainer fees of $24,000; $5,000 for each of
Messrs. Campbell, Montague and Colombo, to reflect their
respective positions as Chairman of the Audit Committee,
Chairman of the Nominating and Corporate Governance Committee
and Chairman of the Compensation Committee; and additional fees
of $2,000 for attendance at each meeting of the Board of
Directors and any committee. Messrs. Campbell, Lippes,
Montague, Russ and Sadler deferred all of their fees into the
MSPP. Mr. Colombo deferred his retainer into the MSPP. |
|
(2) |
|
This column represents the dollar amount recognized for
financial statement reporting purposes with respect to the 2008
fiscal year for the fair value of restricted stock granted in
2008 as well as prior years. Pursuant to SEC rules, the amounts
shown exclude the impact of estimated forfeitures related to
service-based vesting |
6
|
|
|
|
|
conditions. The fair value of restricted stock is calculated
using the closing price of Gibraltar Industries, Inc. common
stock on the date of grant. |
|
(3) |
|
This column represents the Company match on the deferred
retainer and the earnings/losses on the deferred fees in each
respective Directors account under the MSPP. |
|
(4) |
|
The following chart summarizes the aggregate number of stock
awards outstanding at December 31, 2008 for each Director: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
|
|
|
|
Restricted Stock
|
|
|
|
Aggregated Number of
|
|
Name
|
|
|
Shares (a)
|
|
|
|
Units (RSUs) (b)
|
|
|
|
Stock Awards Outstanding
|
|
David N. Campbell
|
|
|
|
5,000
|
|
|
|
|
10,414
|
|
|
|
|
15,414
|
|
William J. Colombo
|
|
|
|
9,000
|
|
|
|
|
5,483
|
|
|
|
|
14,483
|
|
Gerald S. Lippes
|
|
|
|
5,000
|
|
|
|
|
10,287
|
|
|
|
|
15,287
|
|
William P. Montague
|
|
|
|
5,000
|
|
|
|
|
10,349
|
|
|
|
|
15,349
|
|
Arthur A. Russ, Jr.
|
|
|
|
5,000
|
|
|
|
|
9,340
|
|
|
|
|
14,340
|
|
Robert E. Sadler, Jr.
|
|
|
|
9,000
|
|
|
|
|
5,814
|
|
|
|
|
14,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Restricted shares generally vest over three (3) years. |
|
(b) |
|
Represents RSUs deferred in the MSPP that will be converted to
cash and paid out over five (5) years upon retirement from
the Board. Includes 2,572 unvested RSUs for the benefit of
Mr. Colombo that will be forfeited if his service as a
member of the Companys Board of Directors is terminated
prior to age sixty (60). |
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
We have designed our compensation program to attract, retain and
motivate highly qualified individuals to serve as our executive
officers and to align the financial interests of our executive
officers with those of our stockholders.
To achieve these objectives, the Compensation Committee of our
Board of Directors engaged Watson Wyatt, a nationally recognized
compensation consultant to provide survey information and
assistance in the development of a compensation program for our
executive officers which has a strong emphasis on performance
and long term incentives and which is competitive within our
industry in terms of base salaries, annual incentives and long
term incentives.
Our Board, on the recommendation of the Compensation Committee,
has established a compensation program which compensates our
executive officers through a mix of base salary, annual
incentive payments and long term equity based incentives. This
program sets the targeted annual incentive compensation and long
term equity based incentive compensation components of each
executive officers total compensation at the following
percentages of each executive officers base salary.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Equity Based
|
|
|
|
|
Targeted Annual Incentive
|
|
|
|
Incentive Compensation as
|
|
|
|
|
Compensation as a
|
|
|
|
a Percentage of Base
|
|
Position
|
|
|
Percentage of Base Salary
|
|
|
|
Salary
|
|
Chief Executive Officer
|
|
|
|
90
|
%
|
|
|
|
180
|
%
|
Chief Operating Officer
|
|
|
|
75
|
%
|
|
|
|
133
|
%
|
Chief Financial Officer
|
|
|
|
60
|
%
|
|
|
|
75
|
%
|
Senior Vice President
|
|
|
|
35
|
%
|
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
The Compensation Committee developed and approved the above
percentages and the resulting total compensation of the
executive officers using information supplied by Watson Wyatt
and comparative studies of compensation practices of peer
companies. The group of companies used for comparative data in
establishing compensation of our executive officers for 2008
included Actuant Corporation, Barnes Group, Carlisle Companies,
Kennametal, NCI Building Systems, Quanex, Simpson Manufacturing,
Steel Dynamics, and Worthington Industries. These peers were
chosen due to their size, technologies, business dynamics and
industries.
7
By structuring our compensation to provide that a substantial
portion of each executive officers total compensation is
based on annual incentives and equity based long term
incentives, we reward our executive officers for achieving
clearly defined annually established financial goals and
long-term appreciation in the value of our stock.
Each year, management provides recommendations on executive
officer annual base salaries to the Compensation Committee.
These recommendations are based on managements evaluation
of each executive officers performance, length of service
to the Company, experience, level of responsibility and the
degree to which their efforts have contributed to the
implementation of the Companys strategies and goals. This
information is then, following consultation by the Compensation
Committee with its consultant, used by the Compensation
Committee to make recommendations to the Board of Directors
concerning base salaries of executive officers.
Final authority for the establishment of annual base salaries of
our executive officers resides with the Board of Directors. Once
base salaries are established, the formula-driven components of
our compensation program are applied to determine the amount of
the total compensation which our executive officers will be
entitled to receive provided that the annual goals of the
Company are achieved.
Elements
of Our Compensation Program
Our compensation program for executive officers and senior
management contains the following elements:
|
|
|
|
|
Base Salary
|
|
|
|
Annual Management Incentive Compensation Plan (MICP)
|
|
|
|
Equity-based Incentive Compensation (Omnibus Plan)
|
|
|
|
|
|
Non-qualified Deferred Compensation Plan (MSPP)
|
|
|
|
Long Term Incentive Compensation Plan (LTIP)
|
|
|
|
|
|
Chief Executive Officers Discretionary Bonus
|
|
|
|
Retirement Plans
|
|
|
|
Change in Control Benefits
|
|
|
|
Perquisites and Other Benefits
|
|
|
|
Generally Available Benefit Programs
|
Base Salaries. As noted above, the Company provides
executive officers with a base salary recommended by the
Compensation Committee and approved by our Board of Directors,
which reflects the level of responsibility held by our executive
officers, rewards them for the day to day performance of their
duties and is competitive within our industry. Our competitive
analysis includes a review of the base salaries and total
compensation paid by our peer group companies to their executive
officers. For our Chief Executive Officer, a base salary of
$665,000 was established for 2008.
Under our internal management structure, our CEO and COO work
closely and collaboratively in the development of strategy,
goals, objectives and execution tactics. We believe this fosters
team unity and results in better strategic decision making. Due
to this structure, we believe it is appropriate for the
difference between the base salary of the CEO and the COO to be
relatively small. As a result, the base salary for the COO for
2008 was established at $563,750. Both of these amounts are
within industry targeted base salary ranges and were established
based upon comparison to the peer companies and the
individuals performance.
We establish the base salaries of our other executive officers
using the same process of analyzing the level of their
responsibility and contribution to the Companys overall
objectives and taking into consideration the range of base
salaries paid to these officers by our peer group companies. The
base salaries of the other executive officers for 2008 were
established using these criteria.
Annual Management Incentive Compensation Plan. Our
annual Management Incentive Compensation Plan (MICP)
provides alignment between executive managements cash
compensation and stockholder interests by rewarding management
for performance that we believe will lead to improvements in
stockholder value. MICP targets were established that are based
on improvements in net income margin, business growth and
working capital requirements.
8
MICP targets in 2008 were income from continuing operations as a
percent of sales, net sales growth
year-over-year
and days of working capital. The targets for 100% achievement of
MICP awards were 3.5% income from continuing operations as a
percentage of sales (NI), 2.5% net sales growth from
the preceding year (NSG) and 83 days of working
capital (DWC). Targeted annual incentive
compensation under MICP as a percentage of executive officer
base salaries are as outlined in the table on page 7. No
annual incentive compensation was payable under MICP for 2008 if
Company performance did not meet thresholds of 2% NI, prior year
net sales and 98 days of working capital. The MICP payout
is adjusted for performance above or below targeted levels.
Payouts for NI and NSG are determined by comparing the
Companys actual results to base rates of 1.5% and 0.0%,
respectively. The MICP payout for DWC is determined by comparing
the Companys actual results to the targeted days of
working capital.
The targets, thresholds and base rates referred to above were
established in 2005 and amended in 2008, through an analysis of
historic performance of the Company, benchmarking to its peer
group and stretch performance criteria. These targets,
thresholds and base rates are reviewed on an annual basis and
were amended in 2008 to add days of working capital targets to
better align incentive compensation to the Companys goals.
The targets, thresholds and base rates for NI and NSG were
developed based on the Companys historical performance and
market conditions in the residential housing and domestic
automotive manufacturing industries which showed that these
levels of profitability and growth would provide a strong return
for our stockholders. The target and threshold developed for DWC
was based on managements goal to reduce working capital
and maximize cash flows from operations in an effort to reduce
the level of debt outstanding and increase liquidity.
Forty percent (40%) of the MICP is based upon NI, twenty percent
(20%) is based upon NSG and forty percent (40%) is based upon
DWC. Maximum achievement for NSG is four hundred percent (400%).
Each of NI and DWC have no maximum limit because an excessive
payout is not possible due to the nature of the measurement and
the operating characteristics of the Company. In addition,
adjustments are made to the performance levels achieved by the
Company with respect to the applicable performance criteria to
eliminate the effect of restructuring charges and other
non-routine transactions. Due to the Companys operating
performance in 2008, MICP payments were 119.7% of the targeted
level as calculated below (dollar amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NI
|
|
|
NSG
|
|
|
DWC
|
|
|
Total
|
|
|
|
|
|
2008 income from continuing operations as reported
|
|
$
|
33,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exit activity costs and asset impairments (1)
|
|
|
6,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCM net income prior to divestiture (2)
|
|
|
4,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-routine transactions (3)
|
|
|
1,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect of the above adjustments
|
|
|
(4,251
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income for year ended December 31, 2008
|
|
$
|
40,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales for year ended December 31, 2008 as reported
|
|
$
|
1,232,299
|
|
|
$
|
1,232,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCM net sales for nine months ended September 30,
2008 (2)
|
|
|
98,952
|
|
|
|
98,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net sales for year ended December 31, 2008
|
|
$
|
1,331,251
|
|
|
$
|
1,331,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales for year ended December 31, 2007 as reported
|
|
|
|
|
|
$
|
1,198,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCM net sales for nine months ended September 30,
2007 (2)
|
|
|
|
|
|
|
84,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net sales for year ended December 31, 2007
|
|
|
|
|
|
$
|
1,283,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average net working capital during 2008 (4)
|
|
|
|
|
|
|
|
|
|
$
|
263,372
|
|
|
|
|
|
|
|
|
|
Net sales for year ended December 31, 2008 as reported
|
|
|
|
|
|
|
|
|
|
$
|
1,232,299
|
|
|
|
|
|
|
|
|
|
360 days
|
|
|
|
|
|
|
|
|
|
|
360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily sales
|
|
|
|
|
|
|
|
|
|
$
|
3,423
|
|
|
|
|
|
|
|
|
|
Actual results
|
|
|
3.06
|
%
|
|
|
3.75
|
%
|
|
|
77
|
|
|
|
|
|
|
|
|
|
MICP targets
|
|
|
3.50
|
%
|
|
|
2.50
|
%
|
|
|
83
|
|
|
|
|
|
|
|
|
|
Payout factor base rate
|
|
|
1.50
|
%
|
|
|
0.00
|
%
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payout factor (5)
|
|
|
0.78
|
|
|
|
1.50
|
|
|
|
1.46
|
|
|
|
|
|
|
|
|
|
Weighting
|
|
|
40
|
%
|
|
|
20
|
%
|
|
|
40
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MICP payout percentage
|
|
|
31.2
|
%
|
|
|
30.0
|
%
|
|
|
58.5
|
%
|
|
|
119.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Corresponds to amount included in Note 11 of the audited
financial statements included in the Annual Report on
Form 10-K
for the year ended December 31, 2008 excluding a $1,139,000
impairment charge for a corporate software application no longer
in use. |
9
|
|
|
(2) |
|
Operating results from our SCM Metal Products subsidiaries
(SCM) were reclassified to discontinued operations
within the audited financial statements. The results generated
by SCM prior to its disposal are included in the 2008 MICP
payout calculation. Results exclude the loss recorded as a
result of the sale of SCM. |
|
(3) |
|
The other non-routine transactions include separation costs
related to the retirement of the Companys former CFO and
costs incurred for potential acquisition transactions that did
not take place during 2008. |
|
(4) |
|
Average net working capital is based on the 13 month
average of accounts receivable and inventory less accounts
payable for each month end between December 31, 2007 and
December 31, 2008. |
|
(5) |
|
The payout factor for NI and NSG is calculated by comparing the
difference between actual results and the base rate to the
difference between the target and the base rate. The payout
factor for DWC is calculated by dividing the difference between
the actual days of working capital and the targeted days of
working capital by 13 and adding this factor to 1.00. |
Non-Qualified Deferred Compensation. We maintain an
equity incentive compensation plan known as the Gibraltar
Industries, Inc. 2005 Equity Incentive Plan (the Omnibus
Plan). Our Omnibus Plan is an integral component of our
overall compensation structure and provides the Company a
vehicle through which we make awards of equity based
compensation to our executive officers and other senior
management employees. The forms of equity based compensation
which the Company has the authority to grant under the terms of
our Omnibus Plan are options, shares of restricted stock,
restricted stock units (RSUs), performance shares,
performance units and stock appreciation rights.
One of the features of our Omnibus Plan is the Management Stock
Purchase Plan (MSPP), a non-qualified deferred
compensation arrangement. MSPP provides our executive officers
the right to defer their receipt of up to 50% of the annual
payment they are entitled to receive under MICP. Our
non-employee directors are also entitled to defer their receipt
of their director fees under MSPP.
If, and to the extent that an executive officer defers any
portion of his MICP payment, an account is established for his
benefit under MSPP and credited with RSUs equal in number to the
number of shares of the Companys stock which could have
been purchased using the amount of the MICP payment which was
deferred. If, and to the extent a non-employee director defers
his retainer, chair
and/or
meeting fees, an account is established for his benefit under
the MSPP and credited with RSUs equal in number of shares of the
Companys stock which could have been purchased using the
amount of such fees deferred. The price used to determine the
number of RSUs credited to an executive officers account
is the 200 day closing average price per share of the
Companys stock determined one day prior to the date annual
incentive payments are made to our executive officers under MSPP.
Our use of a 200 day closing average price for valuing RSUs
is intended to eliminate the effect of short term market
fluctuations on the number of RSUs awarded under our MSPP.
In addition to RSUs which are credited to the accounts of
executive officers that elect to defer a portion of their MICP
payment, the Company credits an additional number of RSUs
(Matching RSUs) to the account of the executive
officer. These Matching RSUs are forfeited if the executive
officers employment is terminated, for any reason, before
the executive officer reaches age 60. The Company also
credits the accounts of non-employee directors that defer their
retainer fees with Matching RSUs equal in number to the RSUs
allocated to the directors account and attributable to
their deferred retainer fees. The directors forfeit their
Matching RSUs if they terminate Board service prior to reaching
age 60.
RSUs credited to the account of an executive officer or
non-employee director to reflect amounts deferred under MSPP are
paid to the participant upon a termination of the their
employment or service on the Board. In addition, if the
executive officers employment is terminated, or a
non-employee directors Board service is terminated, after
age 60, the participant will be entitled to receive payment
for Matching RSUs.
The amount to be paid to a participant upon termination of his
employment or service on the Board is equal to the number of
RSUs credited to his account (including Matching RSUs, if
applicable) multiplied by the 200 day rolling average price
per share of the Companys stock, determined as of the day
immediately preceding the participants termination.
Payment of the amount determined above is made to the
participant in five (5) substantially equal annual
installments beginning six months following the date of
termination. During the period of the installment payments,
10
the undistributed value of the participants account will
earn interest at a rate equal to the average annualized rate of
interest payable on ten (10) year US Treasury Notes plus
two percent (2%).
We believe MSPP furthers our compensation objectives by
providing our executive officers and non-employee directors an
opportunity to increase post termination compensation through
increases in the Companys share price and a stronger
alignment to stockholder interests.
Long Term Equity Incentive Plan. Our Omnibus Plan
(described above) provides us with a vehicle to grant our
executive officers equity based compensation. In 2004, our Board
approved a plan to grant annual equity based incentive
compensation awards to our executive officers (LTIP) each year
for a period of five (5) years. These long term equity
based awards have a value, at the time the award is made, equal
to the percentage of the executive officers base salary as
identified in the table on page 7.
In 2008, our executive officers received awards of RSUs having a
fair market value equal to the percentages of their base
salaries identified in the table on page 7. The fair market
value of the RSUs awarded in 2008 was determined using a
200 day rolling average price per share of the
Companys stock. Under the terms of these 2008 awards,
vesting occurs at a rate of 25% per year for the Chief Executive
Officer, Chief Financial Officer, Corporate Controller and
Senior Vice President of Human Resources and Organization
Development and at 100% in one (1) year for the Chief
Operating Officer, with issuance of shares at vesting.
Chief Executive Officers Discretionary
Bonus. The Company has in the past, approved bonuses
over and above those provided for by established Company
incentive programs upon a review and approval by the
Compensation Committee of recommendations made by the
Companys Chief Executive Officer. Those discretionary
bonuses have only been approved on a limited basis and are based
on the determination by Chief Executive Officer that bonus
recipients have made outstanding contributions to the Company.
No discretionary bonuses were awarded for services performed by
our executive officers in 2008.
Retirement Plans. All of our executive officers are
entitled to participate in our Gibraltar 401(k) Plan. During
2008, our executive officers were also entitled to participate
in the Gibraltar 401(k) Restoration Plan (the Restoration
Plan). The purpose of the Restoration Plan is to allow
those employees who are considered highly
compensated under IRS regulations to defer up to the IRS
limit for 401(k) contributions allowed to non-highly compensated
employees, with the Company providing a match of up to 6% of
compensation deferred both in the Gibraltar 401(k) Plan and the
Restoration Plan. Effective January 1, 2009, the
Restoration Plan was merged into the Gibraltar Deferred
Compensation Plan (the Deferred Compensation Plan).
The Deferred Compensation Plan is an unfunded plan of deferred
compensation. As a result, all amounts deferred by our executive
officers under the Deferred Compensation Plan are allocated to
unfunded accounts for the executive officers. The amounts
deferred by our executive officers under our Deferred
Compensation Plan are paid in one lump sum. However, if the
value of the amount deferred by any of our executive officers
under the Deferred Compensation Plan exceeds $25,000, payment of
the amount credited to their account in the Deferred
Compensation Plan may be made in substantially equal annual
installments over a period of not less than five (5) and
not more than ten (10) years if the officer makes an
election to receive payment in installments.
All amounts allocated to the account of our executive officers
in the Deferred Compensation Plan are credited with interest
annually at a rate equal to the average of the rate payable on
ten (10) year U.S. Treasury Notes for the first week
in January, April, July and October, plus 1.5%.
When we review the targeted overall compensation of our
executive officers, we factor in benefits to be received under
the Gibraltar 401(k) Plan.
In 2004, our compensation consultant reported to our
Compensation Committee that the retirement benefits provided for
our Chief Executive Officer and our Chief Operating Officer were
not competitive with our peers. As a result, in 2004 our Board
approved a recommendation of our Compensation Committee to make
a one time award of 150,000 RSUs to our Chief Executive Officer
and 45,000 RSUs to our Chief Operating Officer to make the
amount of the benefits they are entitled to receive at
retirement more comparable to the retirement benefits provided
to these executives by our peer group companies. These
retirement-based RSUs were awarded in April 2005 and are
reflected in the Outstanding Equity Awards at Fiscal Year End
Table below. Payment under the terms of these
11
awards is made in shares of Company stock equal in number to the
RSUs contained in the Award. However, no shares of Company stock
will be issued to our Chief Executive Officer pursuant to this
award if he terminates his employment with the Company prior to
age sixty (60).
Change in Control Benefits. Our executive officers
have been a key ingredient in building our Company into the
successful enterprise that it is today. We believe that it is
important to protect our executive officers in the context of a
change in control transaction to allow them to focus on the
transaction. Further, it is our belief that the interests of our
stockholders will be best served if the interests of our
executive management are aligned with them. We believe that
change in control benefits should eliminate, or at least reduce,
the reluctance of our executive officers to pursue potential
change in control transactions that may be in the best interest
of our stockholders.
As of December 31, 2008, our Change in Control benefits
provide for the protection of previously granted equity based
incentive compensation and, in the case of our Chairman and
Chief Executive Officer and our President and Chief Operating
Officer, provide for a cash payment upon the consummation of the
Change in Control transaction.
Effective February 20, 2009, our Change in Control benefits
were expanded to provide for a cash payment to the Chief
Financial Officer, Corporate Controller and Senior Vice
President of Human Resources and Organizational Development upon
the consummation of a Change in Control transaction and
termination of employment for these officers. The cash
components of any change in control benefits are paid in one
lump sum.
For more information concerning amounts our executive officers
would be entitled to receive upon a termination of employment or
change in control, see Potential Payments Upon Termination
or Change in Control below.
Perquisites and Other Benefits. We annually review
the perquisites that executive management receives. The Chief
Executive Officer receives a tax gross up for income
attributable to vesting of restricted stock issued prior to
2005, in accordance with Companys policy in effect when
the restricted stock was issued. The executive officers are
eligible to receive country club memberships and the Chief
Executive Officer and Chief Operating Officer also receive
business club memberships. Since our compensation plan provides
for equity compensation to our executives which could lead to
complicated tax issues, and because we believe that good
financial and tax planning by experts reduces the amount of time
and attention that senior management must spend on this topic,
the executive officers are eligible to receive a payment for
financial and tax planning. All of the executives also are
eligible to receive tax gross up payments for any of the
following types of perquisites that they may receive: personal
use of Company auto, spousal travel and entertainment at the
Companys annual strategic meeting, the taxable portion of
business travel accident insurance, and the cost of executive
physical examinations. The Chief Executive Officer also receives
a tax gross up payment for the taxable portion of life insurance
premiums.
Generally Available Benefit Programs. The executive
officers also participate in Gibraltars other generally
available benefit plans on the same terms as other employees at
the Company headquarters. These plans include medical and dental
insurance, life insurance and a supplemental salary continuation
plan providing supplemental short term disability benefits.
Relocation benefits also are reimbursed but are individually
negotiated when they occur.
Employment
Agreements
CEO Employment Agreement. On August 21, 2007,
the Company and its Chief Executive Officer entered into an
Amended and Restated Employment Agreement, which amends and
restates the employment agreement previously in effect for the
Chief Executive Officer. There are no material substantive
differences between the Amended and Restated Employment
Agreement and the employment agreement previously in effect.
However, the Amended and Restated Employment Agreement amends
the terms of RSU awards made to the Chief Executive Officer
under the terms of the Companys Omnibus Plan to provide
that the Chief Executive Officers right to receive shares
of common stock of the Company cannot be forfeited after the
Chief Executive Officers right to receive such shares has
become vested. Prior to this amendment, the RSU awards provided
that the Chief Executive Officer would forfeit his right to
receive shares of common stock upon a termination for cause,
even though his right to receive such shares had otherwise
become vested.
In addition to the foregoing, the Amended and Restated
Employment Agreement provides: (1) the term of the
Chief Executive Officers employment will be one year
with automatic annual renewals on January 1 of each year unless
the Chief Executive Officer is provided with notice from the
Company that it is electing not to renew his employment on or
before the preceding September 1; (2) the Chief Executive
Officers annual base salary will be
12
$650,000, as adjusted, from time to time, by the Compensation
Committee (adjusted to $665,000 during 2008); (3) the Chief
Executive Officer will be eligible to receive an annual bonus
under the MICP and long term incentive compensation as
determined under the LTIP; (4) the Chief Executive Officer
will be entitled to participate in all other employee benefit
plans and programs in effect for salaried employees employed at
the Companys headquarters; and (5) upon a termination
of the Chief Executive Officers employment by the Company,
without cause, or by the Chief Executive Officer for a good
reason, the Chief Executive Officer will be entitled to a
severance benefit paid in one lump sum in an amount equal to two
and one half times the sum of his base salary and bonuses paid
during the preceding twelve months.
COO Employment Agreement. On August 21, 2007,
the Company also entered into an employment agreement with the
Companys President and Chief Operating Officer (the
COO Employment Agreement). The COO Employment
Agreement amends the terms of RSU awards made to the Chief
Operating Officer under the terms of the Omnibus Plan to provide
that the Chief Operating Officers right to receive shares
of common stock of the Company cannot be forfeited after the
Chief Operating Officers right to receive such shares has
become vested. Prior to amendment by the COO Employment
Agreement, the RSU awards provided that the Chief Operating
Officer would forfeit his right to receive shares of common
stock upon a termination for cause, even though his right to
receive such shares had otherwise become vested.
In addition to the above, the COO Employment Agreement provides:
(1) the term of the Chief Operating Officers
employment will be three years with automatic annual renewals
beginning on January 1, 2011 unless the Company provides
the Chief Operating Officer notice that it is electing not to
renew the Chief Operating Officers employment on or before
the preceding September 1; (2) the Chief Operating
Officers annual base salary will be $550,000, as adjusted,
from time to time, by the Compensation Committee (adjusted to
$563,750 during 2008); (3) the Chief Operating Officer will
be eligible to receive an annual bonus under the MICP and long
term incentive compensation as determined under the LTIP;
(4) the Chief Operating Officer will be entitled to
participate in all other employee benefit plans and programs in
effect for salaried employees employed at the Companys
headquarters; and (5) upon a termination of the Chief
Operating Officers employment by the Company, without
cause, or by the Chief Operating Officer for a good reason, the
Chief Operating Officer will be entitled to a severance benefit
paid in one lump sum in an amount equal to two and one half
times the sum of the Chief Operating Officers base salary
and bonuses paid during the preceding twelve months.
Separation
and Retirement Agreement
On April 25, 2008, the Company and its former Executive
Vice President, Chief Financial Officer and Treasurer,
Mr. Kay, entered into a Separation and Retirement
Agreement. The agreement provided Mr. Kay with separation
pay equal to his annual base salary at the time of retirement of
$305,000, plus the amount of the annual incentive bonus he would
have been entitled to receive if he continued his employment
with the Company through the end of 2008, together with coverage
under the Companys group medical insurance plan until he
attains age 65. The agreement also provided that
Mr. Kay be entitled to have shares of common stock of the
Company issued to him in conjunction with the long term
incentive compensation awards he received during his employment
with the Company.
Tax
Considerations
Section 162(m) of the Internal Revenue Code generally
disallows a tax deduction to public companies for compensation
in excess of $1,000,000 paid to a companys chief executive
officer and any one of the four other most highly paid executive
officers during its taxable year. Qualifying performance-based
compensation is not subject to the deduction limit if certain
requirements are met. Based upon the compensation paid to
Mr. Lipke and the Companys other executive officers
in 2008, the Section 162(m) limitation resulted in a
disallowance of approximately $924,000 in compensation expense
in 2008. The Compensation Committee plans to monitor this matter
periodically and to take such actions as are appropriate to
minimize the impact of this statute, to the extent that there is
no adverse effect on the Companys ability to provide
incentive compensation based on the Companys financial
performance. Section 409A of the Internal Revenue Code
generally imposes a tax on non-qualified deferred compensation
arrangements which do not meet guidelines established by
regulations under the Internal Revenue Code. During 2008, the
Company modified the structure of its non-qualified deferred
compensation arrangements to comply with Section 409A.
13
COMPENSATION
COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the above
Compensation Discussion and Analysis section of this Definitive
Proxy Statement with management. Based on such review and
discussion, the Compensation Committee recommended to the Board
of Directors that the Compensation Discussion and Analysis be
included in the Companys annual report on
Form 10-K
filed February 26, 2009 and in this Definitive Proxy
Statement.
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS OF GIBRALTAR
INDUSTRIES, INC.
William J. Colombo
William P. Montague
Robert E. Sadler, Jr.
COMPENSATION
OF EXECUTIVE OFFICERS
Summary
Compensation Table
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|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
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|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
and Nonquali-
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
fied Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
Option
|
|
|
|
Plan
|
|
|
|
Compensation
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
|
|
Awards
|
|
|
|
Compensation
|
|
|
|
Earnings
|
|
|
|
Compensation
|
|
|
|
|
|
Name
|
|
|
Year
|
|
|
|
Salary (2)
|
|
|
|
(3)
|
|
|
|
(4)
|
|
|
|
(5)
|
|
|
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(6)
|
|
|
|
(7)
|
|
|
|
Total
|
|
Brian J. Lipke
|
|
|
|
2008
|
|
|
|
$
|
665,000
|
|
|
|
$
|
1,386,957
|
|
|
|
|
|
|
|
|
$
|
732,329
|
|
|
|
$
|
72,248
|
|
|
|
$
|
168,883
|
|
|
|
$
|
3,025,417
|
|
|
|
|
|
2007
|
|
|
|
$
|
650,000
|
|
|
|
$
|
1,180,378
|
|
|
|
|
|
|
|
|
$
|
391,073
|
|
|
|
$
|
30,920
|
|
|
|
$
|
173,288
|
|
|
|
$
|
2,425,659
|
|
|
|
|
|
2006
|
|
|
|
$
|
560,000
|
|
|
|
$
|
987,851
|
|
|
|
|
|
|
|
|
$
|
858,060
|
|
|
|
$
|
44,443
|
|
|
|
$
|
200,424
|
|
|
|
$
|
2,650,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henning N. Kornbrekke
|
|
|
|
2008
|
|
|
|
$
|
563,750
|
|
|
|
$
|
1,059,970
|
|
|
|
|
|
|
|
|
$
|
518,284
|
|
|
|
$
|
(125,137
|
)
|
|
|
$
|
62,535
|
|
|
|
$
|
2,079,402
|
|
|
|
|
|
2007
|
|
|
|
$
|
550,000
|
|
|
|
$
|
495,096
|
|
|
|
|
|
|
|
|
$
|
275,796
|
|
|
|
$
|
80,984
|
|
|
|
$
|
121,341
|
|
|
|
$
|
1,523,217
|
|
|
|
|
|
2006
|
|
|
|
$
|
460,000
|
|
|
|
$
|
605,777
|
|
|
|
|
|
|
|
|
$
|
587,362
|
|
|
|
$
|
260,250
|
|
|
|
$
|
101,994
|
|
|
|
$
|
2,015,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth W. Smith
|
|
|
|
2008
|
|
|
|
$
|
256,250
|
|
|
|
$
|
28,788
|
|
|
|
|
|
|
|
|
$
|
175,005
|
|
|
|
|
|
|
|
|
$
|
29,876
|
|
|
|
$
|
489,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David W. Kay (1)
|
|
|
|
2008
|
|
|
|
$
|
111,442
|
|
|
|
$
|
458,940
|
|
|
|
|
|
|
|
|
$
|
218,981
|
|
|
|
$
|
(58,489
|
)
|
|
|
$
|
243,475
|
|
|
|
$
|
974,349
|
|
|
|
|
|
2007
|
|
|
|
$
|
305,000
|
|
|
|
$
|
124,301
|
|
|
|
|
|
|
|
|
$
|
123,336
|
|
|
|
$
|
40,538
|
|
|
|
$
|
47,842
|
|
|
|
$
|
604,017
|
|
|
|
|
|
2006
|
|
|
|
$
|
305,000
|
|
|
|
$
|
85,417
|
|
|
|
|
|
|
|
|
$
|
311,558
|
|
|
|
$
|
60,656
|
|
|
|
$
|
42,172
|
|
|
|
$
|
804,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy J. Heasley
|
|
|
|
2008
|
|
|
|
$
|
202,500
|
|
|
|
$
|
38,382
|
|
|
|
|
|
|
|
|
$
|
85,857
|
|
|
|
|
|
|
|
|
$
|
35,747
|
|
|
|
$
|
362,486
|
|
|
|
|
|
2007
|
|
|
|
$
|
200,000
|
|
|
|
$
|
21,022
|
|
|
|
|
|
|
|
|
$
|
46,795
|
|
|
|
|
|
|
|
|
$
|
34,572
|
|
|
|
$
|
302,389
|
|
|
|
|
|
2006
|
|
|
|
$
|
178,500
|
|
|
|
$
|
13,137
|
|
|
|
|
|
|
|
|
$
|
106,364
|
|
|
|
|
|
|
|
|
$
|
25,761
|
|
|
|
$
|
323,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul M. Murray
|
|
|
|
2008
|
|
|
|
$
|
175,000
|
|
|
|
$
|
42,129
|
|
|
|
$
|
1,154
|
|
|
|
$
|
75,387
|
|
|
|
$
|
(4,029
|
)
|
|
|
$
|
47,014
|
|
|
|
$
|
336,655
|
|
|
|
|
|
2007
|
|
|
|
$
|
170,000
|
|
|
|
$
|
31,068
|
|
|
|
$
|
1,154
|
|
|
|
$
|
39,776
|
|
|
|
$
|
26,715
|
|
|
|
$
|
42,376
|
|
|
|
$
|
311,089
|
|
|
|
|
|
2006
|
|
|
|
$
|
150,000
|
|
|
|
$
|
18,702
|
|
|
|
$
|
1,151
|
|
|
|
$
|
89,382
|
|
|
|
$
|
2,171
|
|
|
|
$
|
39,640
|
|
|
|
$
|
301,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Kay served as Executive Vice President, Chief Financial
Officer and Treasurer from April 2004 until he announced his
retirement on March 17, 2008. |
|
(2) |
|
Includes amounts, if any, deferred at the direction of the
executive officer. |
|
(3) |
|
This column represents the dollar amount recognized for
financial statement reporting purposes for the respective fiscal
years for the fair value of restricted stock and restricted
stock units granted that year as well as prior years. Pursuant
to SEC rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. For
restricted stock and restricted stock units, fair value is
calculated using the closing price of Gibraltar Industries, Inc.
common stock on the date of grant. |
|
(4) |
|
This column represents the dollar amount recognized for
financial statement reporting purposes for the respective fiscal
year for the fair value of stock options granted to the named
executive in 2005. Pursuant to |
14
|
|
|
|
|
SEC rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. No
named executive received stock options since 2005 and, other
than Mr. Murray, no named executive had unvested options
outstanding during 2008, 2007 or 2006. |
|
(5) |
|
This column represents the amounts earned under the Management
Incentive Compensation Plan for the respective years.
Messrs. Kornbrekke, Kay and Murray deferred a portion of
their earnings from this plan into the Management Stock Purchase
Plan (MSPP) for all years presented. Mr. Smith deferred a
portion of his earnings from this plan into the MSPP during 2008. |
|
(6) |
|
This column represents the change in pension value for
Mr. Lipke, which is included in the Pension Benefits Table
and the Company contributions to, and earnings from, the
nonqualified deferred compensation plans for each of the named
executives, which is included in the Nonqualified Deferred
Compensation Table. |
|
(7) |
|
The amounts shown for 2008 include separation payments to
Mr. Kay of $193,558; tax gross up payments to
Mr. Lipke related to restricted shares issued under the
Restricted Stock Plan of $103,624; the incremental cost of life
insurance premiums for Mr. Lipke; payments to
Mr. Smith for incidental moving expenses; payments to
Messrs. Kornbrekke, Heasley and Murray for executive
physicals; matching contributions for the 401(k) accounts of
Messrs. Lipke, Kornbrekke, Smith, Kay, Heasley and Murray;
payment of club dues for Messrs. Lipke, Kornbrekke, Kay,
Heasley and Murray; and other payments to the named executives
for pay in lieu of time off, financial and tax planning,
supplemental health insurance premiums, personal use of Company
autos, life insurance premium and travel accident insurance,
none of which exceeded $25,000 or 10% of the amount of total
perquisites; and tax gross ups to Messrs. Lipke,
Kornbrekke, Smith, Kay, Heasley and Murray of $6,490, $3,392,
$511, $754, $2,818 and $4,180, respectively, related to payments
for personal use of Company autos, the taxable portion of travel
accident insurance and the cost of executive physicals. The tax
gross up payment for Mr. Lipke also includes an amount for
the taxable portion of premiums on a life insurance policy. |
|
|
|
The amounts shown for 2007 include tax gross up payments to
Messrs. Lipke and Kornbrekke related to restricted shares
issued under the Restricted Stock Plan of $105,728 and $26,058,
respectively; payment to Mr. Kornbrekke of $36,348 for
initiation fees and club dues; the incremental cost of life
insurance premiums for Mr. Lipke; payment to
Mr. Heasley for incidental moving expenses; payments to
Messrs. Kornbrekke, Heasley and Murray for executive
physicals; matching contributions for the 401(k) accounts of
Messrs. Lipke, Kornbrekke, Kay and Murray; payment of club
dues for Messrs. Lipke, Kay, Heasley and Murray; and other
payments to the named executives for pay in lieu of time off,
financial and tax planning, supplemental health insurance
premiums, personal use of Company autos, life insurance premium
and travel accident insurance, none of which exceeded $25,000 or
10% of the amount of total perquisites; and tax gross ups to
Messrs. Lipke, Kornbrekke, Kay, Heasley and Murray of
$5,487, $5,875, $2,479, $3,253 and $3,336, respectively, related
to payments for personal use of Company autos, the taxable
portion of business travel accident insurance and the cost of
executive physicals. The tax gross up payment for
Mr. Heasley also includes an amount for the taxable portion
of incidental moving expenses. |
|
|
|
The amounts shown for 2006 include tax gross up payments to
Messrs. Lipke and Kornbrekke related to restricted shares
issued under the Restricted Stock Plan of $125,145 and $47,755,
respectively; the incremental cost of personal use of the
company plane and life insurance premiums for Mr. Lipke;
club dues for Messrs. Lipke, Kornbrekke and Kay; payments
for tax planning and pay in lieu of time-off for
Messrs. Lipke, Kornbrekke, Kay, Heasley and Murray; payment
to Mr. Murray for an executive physical and for tax gross
up on his perquisites; payments to Mr. Heasley for
incidental moving expenses, and other payments to the named
executives for use of Company autos, life insurance premiums,
supplemental health insurance premiums, travel accident
insurance, spousal travel and entertainment at the
Companys strategic meeting, none of which individually
exceed $25,000 or 10% of the amount of total perquisites and tax
gross ups to Messrs. Lipke, Kornbrekke, Kay, Heasley, and
Murray of $5,941, $2,581, $1,440, $698, and $4,691,
respectively, related to the payments for personal use of
Company autos, spousal travel and entertainment at the
Companys annual strategic meeting, the taxable portion of
business travel accident insurance, and the cost of executive
physical examinations. The tax gross up payment for
Mr. Lipke also includes an amount for the taxable portion
of premiums on a life insurance policy. |
15
Grants of
Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
|
Estimated Future Payouts
|
|
|
|
Number
|
|
|
|
Awards:
|
|
|
|
Exercise
|
|
|
|
|
|
|
|
Under Non-Equity
|
|
|
|
Under Equity
|
|
|
|
Of Shares
|
|
|
|
Number of
|
|
|
|
or Base
|
|
|
|
|
|
|
|
Incentive Plan Awards (1)
|
|
|
|
Incentive Plan Awards
|
|
|
|
of
|
|
|
|
Securities
|
|
|
|
Price of
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
Stock or
|
|
|
|
Underlying
|
|
|
|
Option
|
|
Name
|
|
|
Date
|
|
|
Threshold
|
|
|
Target
|
|
|
|
Maximum
|
|
|
|
Threshold
|
|
|
|
Target
|
|
|
|
Maximum
|
|
|
|
Units
|
|
|
|
Options
|
|
|
|
Awards
|
|
Brian J. Lipke
|
|
|
Jan. 2, 2008(2)
|
|
|
$61,200
|
|
|
$
|
612,000
|
|
|
|
|
N/A
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
51,204
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henning N. Kornbrekke
|
|
|
Jan. 2, 2008(2)
|
|
|
$43,313
|
|
|
$
|
433,125
|
|
|
|
|
N/A
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
32,013
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
Feb. 15, 2008(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,354
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth W. Smith
|
|
|
June 16, 2008(2)
|
|
|
$14,625
|
|
|
$
|
146,250
|
|
|
|
|
N/A
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
12,723
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David W. Kay
|
|
|
Jan. 2, 2008(2)
|
|
|
$18,300
|
|
|
$
|
183,000
|
|
|
|
|
N/A
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
10,011
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
Feb. 15, 2008(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,812
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy J. Heasley
|
|
|
Jan. 2, 2008(2)
|
|
|
$7,175
|
|
|
$
|
71,750
|
|
|
|
|
N/A
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
3,063
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul M. Murray
|
|
|
Jan. 2, 2008(2)
|
|
|
$6,300
|
|
|
$
|
63,000
|
|
|
|
|
N/A
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
2,604
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
Feb. 15, 2008(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,215
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Estimated future payouts represent the amount that was payable
under the annual Management Incentive Compensation Plan for
performance in 2008. There is no maximum amount of payment under
this plan. |
|
(2) |
|
Consists of restricted stock units issued under the
Companys Long Term Incentive Plan that convert to shares
upon vesting. |
|
(3) |
|
Consists of restricted stock units issued under the Management
Stock Purchase Plan. Of the restricted units issued in 2008,
7,677, 3,406 and 1,108 issued to Messrs. Kornbrekke, Kay
and Murray, respectively, represent shares purchased through
deferral of bonus, and 7,677, 3,406 and 1,107 issued to
Messrs. Kornbrekke, Kay and Murray, respectively represent
the Companys match. These restricted units convert to a
hypothetical cash account upon vesting, which occurs upon both
the attainment of age sixty (60) and termination of
employment. Upon termination of employment the balance in the
hypothetical cash account is paid out over
five (5) years. |
Outstanding
Equity Awards at Fiscal Year End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
Number of
|
|
|
|
Value of
|
|
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Value of
|
|
|
|
Unearned
|
|
|
|
Unearned
|
|
|
|
|
Securities
|
|
|
|
Securities
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
|
Shares or
|
|
|
|
Shares, Units
|
|
|
|
Shares,
|
|
|
|
|
Underlying
|
|
|
|
Underlying
|
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
|
|
Units of
|
|
|
|
Units of
|
|
|
|
or Other
|
|
|
|
Units or
|
|
|
|
|
Unexercised
|
|
|
|
Unexercised
|
|
|
|
Unexercised
|
|
|
|
Option
|
|
|
|
Option
|
|
|
|
Stock that
|
|
|
|
Stock that
|
|
|
|
Rights that
|
|
|
|
Other Rights
|
|
|
|
|
Options
|
|
|
|
Options
|
|
|
|
Unearned
|
|
|
|
Exercise
|
|
|
|
Expiration
|
|
|
|
Have Not
|
|
|
|
Have Not
|
|
|
|
Have not
|
|
|
|
that Have
|
|
Name
|
|
|
Exercisable
|
|
|
|
Unexercisable(1)
|
|
|
|
Options
|
|
|
|
Price
|
|
|
|
Date
|
|
|
|
Vested
|
|
|
|
Vested(2)
|
|
|
|
Vested
|
|
|
|
Not Vested
|
|
Brian J. Lipke
|
|
|
|
18,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9.38
|
|
|
|
|
07/18/2010
|
|
|
|
|
307,093
|
|
|
|
$
|
3,666,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henning N. Kornbrekke
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
116,552
|
|
|
|
$
|
1,391,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth W. Smith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
12,723
|
|
|
|
$
|
151,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David W. Kay
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy J. Heasley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
5,960
|
|
|
|
$
|
71,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul M. Murray
|
|
|
|
402
|
|
|
|
|
134
|
|
|
|
|
|
|
|
|
$
|
21.33
|
|
|
|
|
04/06/2015
|
|
|
|
|
6,675
|
|
|
|
$
|
79,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Murrays options vest at a rate of 25% a year
beginning on April 6, 2006, the unvested options as of
December 31, 2008 vest on April 6, 2009. |
16
|
|
|
(2) |
|
Restricted shares and stock units vest as follows:
Mr. Lipke 24,000 shares vesting at a rate
of 20% a year beginning May 21, 2009, 33,756 units
that vest on April 6, 2009, 150,000 units that vest
upon attainment of his 60th birthday on July 31, 2011 and
retirement from the Company, 18,337 units vesting at rate
of 50% a year beginning March 1, 2009, 29,796 units
vesting at a rate of 33.3% a year beginning on April 27,
2009, 51,204 units vesting at a rate of 25% a year
beginning on January 2, 2009;
Mr. Kornbrekke 19,700 units that vest on
April 6, 2009, 45,000 units that vest upon retirement
from the Company, 7,419 units vesting March 1, 2009,
12,420 units vesting April 27, 2009, 32,013 units
vesting January 2, 2009; Mr. Smith
12,723 units vesting at a rate of 25% a year beginning on
June 8, 2009; Mr. Heasley 1,114 units
vesting at rate of 50% a year beginning January 1, 2009,
1,515 units vesting at a rate of 33.3% a year beginning
April 27, 2009, 3,063 units vesting at a rate of 25% a
year beginning on January 2, 2009; and
Mr. Murray 1,600 units that vest on
April 6, 2009, 956 units vesting at rate of 50% a year
beginning March 1, 2009, 1,783 units vesting at a rate
of 33.3% a year beginning April 27, 2009, 2,604 units
vesting at a rate of 25% a year beginning on January 2,
2009. |
Option
Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
|
|
|
|
Number of Shares
|
|
|
|
Value Realized on
|
|
|
|
Number of Shares
|
|
|
|
Value Realized on
|
|
Name
|
|
|
Acquired on Exercise
|
|
|
|
Exercise
|
|
|
|
Acquired on Vesting(1)
|
|
|
|
Vesting
|
|
Brian J. Lipke
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
25,099
|
|
|
|
$
|
342,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henning N. Kornbrekke
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
19,838
|
|
|
|
$
|
217,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth W. Smith
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David W. Kay
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
31,756
|
|
|
|
$
|
355,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy J. Heasley
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
1,151
|
|
|
|
$
|
14,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul M. Murray
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
982
|
|
|
|
$
|
10,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Reflects vesting of 6,000 restricted shares for Mr. Lipke
and vesting of 19,099 restricted stock units for Mr. Lipke;
19,838 restricted stock units for Mr. Kornbrekke, 31,756
restricted stock units for Mr. Kay, 10,030 of which were
returned to the Company to satisfy statutory minimum income tax
withholdings; 1,151 restricted stock units for Mr. Heasley,
223 of which were returned to the Company to satisfy statutory
minimum income tax withholdings; and 982 restricted stock units
for Mr. Murray. |
Pension
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Years
|
|
|
|
Present Value of
|
|
|
|
Payments During
|
|
Name
|
|
|
Plan Name
|
|
|
Credited Service
|
|
|
|
Accumulated Benefit
|
|
|
|
Last Fiscal Year
|
|
Brian J. Lipke
|
|
|
Salary Continuation
Agreement
|
|
|
|
16
|
|
|
|
$
|
537,159
|
(1)
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henning N. Kornbrekke
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth W. Smith
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David W. Kay
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy J. Heasley
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul M. Murray
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Reflects the present value of benefits payable under the terms
of the Salary Continuation Agreement between the Company and
Mr. Lipke dated March 1, 1996. This Agreement provides
for payment of $100,000 per year for a period of ten
(10) years upon Mr. Lipkes retirement at or
after age sixty (60). Payments are to be made in equal monthly
installments. In the event of the death of Mr. Lipke prior
to his retirement, payments are to be made to
Mr. Lipkes spouse. |
17
Nonqualified
Deferred Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
Registrant
|
|
|
|
Earnings
|
|
|
|
Aggregate
|
|
|
|
Aggregate
|
|
|
|
|
Contributions in
|
|
|
|
Contributions in
|
|
|
|
(Losses) in
|
|
|
|
Withdrawals/
|
|
|
|
Balance at
|
|
Name
|
|
|
Last FY
|
|
|
|
Last FY (3)
|
|
|
|
Last FY (3)
|
|
|
|
Distributions
|
|
|
|
Last FYE
|
|
Brian J. Lipke
|
|
|
$
|
1,700
|
(1)
|
|
|
$
|
|
|
|
|
$
|
790
|
|
|
|
$
|
|
|
|
|
$
|
15,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henning N. Kornbrekke
|
|
|
$
|
1,700
|
(1)
|
|
|
$
|
|
|
|
|
$
|
1,192
|
|
|
|
$
|
|
|
|
|
$
|
23,719
|
|
|
|
|
$
|
137,878
|
(2)
|
|
|
$
|
137,878
|
(2)
|
|
|
$
|
(264,207
|
)
|
|
|
$
|
|
|
|
|
$
|
889,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth W. Smith
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David W. Kay
|
|
|
$
|
1,700
|
(1)
|
|
|
$
|
|
|
|
|
$
|
455
|
|
|
|
$
|
(11,116
|
)
|
|
|
$
|
|
|
|
|
|
$
|
61,168
|
(2)
|
|
|
$
|
61,168
|
(2)
|
|
|
$
|
(58,944
|
)
|
|
|
$
|
|
|
|
|
$
|
490,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy J. Heasley
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul M. Murray
|
|
|
$
|
1,700
|
(1)
|
|
|
$
|
|
|
|
|
$
|
1,392
|
|
|
|
$
|
|
|
|
|
$
|
28,451
|
|
|
|
|
$
|
19,888
|
(2)
|
|
|
$
|
19,888
|
(2)
|
|
|
$
|
(24,250
|
)
|
|
|
$
|
|
|
|
|
$
|
85,440
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the amount of salary deferred under the Gibraltar
401(k) Restoration Plan during 2008 and the associated earnings
on the balance of each participating executive officers
account. |
|
(2) |
|
Represents the amount of the annual incentive compensation award
earned under the Management Incentive Plan Compensation during
2007 that was deferred into the Management Stock Purchase Plan
during 2008 along with the match from the Company that was made
during 2008. |
|
(3) |
|
Amounts reported are included as compensation in the Summary
Compensation Table above. |
|
(4) |
|
Amount includes $42,720 for Mr. Murray that will vest on
his sixtieth (60th) birthday if he continues his employment
through such date. |
POTENTIAL
PAYMENTS ON TERMINATION OR CHANGE IN CONTROL
Our Chief Executive Officer and Chief Operating Officer
employment agreements provide that they will receive a lump sum
severance payment equal to 2.5 times the sum of their respective
base salary and all bonuses they received in the twelve
(12) months preceding their termination under certain
circumstances. Our Chief Executive Officer also has a salary
continuation agreement with the Company which provides for
payment to the Chief Executive Officer of $100,000 per year for
a period of 10 years upon his retirement at or after
age 60. This salary continuation agreement was made in 1996.
The awards of restricted stock units (RSUs) which the Company
has made to its executive officers under the Long Term Equity
Incentive Plan (see Compensation Discussion and Analysis above)
provide that the RSUs will be paid in shares of the
Companys stock if the employment of the executive officer
is terminated by the Company without cause or by the Chief
Executive Officer or Chief Operating Officer for good reason.
Similarly, the RSUs awarded to the Chairman and Chief Executive
Officer and the President and Chief Operating Officer to make
their retirement benefits more competitive (see Compensation
Discussion and Analysis above) provide that their RSUs will be
paid in shares of the Companys stock if their employment
is terminated by the Company without cause. In each case, a
termination without cause will be considered to have occurred if
the executive officer is terminated for any reason other than a
determination by the Compensation Committee that the executive
officer has engaged except in egregious acts or omissions which
have resulted in material injury to the Company and its business.
The Company has also entered into change in control agreements
(the Change in Control Agreements) with the Chairman
and Chief Executive Officer and the President and Chief
Operating Officer. Upon the occurrence of a change in control,
the Chairman and Chief Executive Office is entitled to receive a
lump sum severance payment equal to 350% of his annual cash
compensation and the President and Chief Operating Officer is
entitled to receive a lump sum severance payment equal to 300%
of his annual cash compensation. The change in control payments
to these executives are made whether or not their employment is
terminated as a result of the change in control.
18
Both Change in Control Agreements define annual cash
compensation as the sum of (i) the executives annual
base salary, including any deferred cash compensation, during
the calendar year preceding the year when the change of control
occurred and (ii) the highest annual bonus paid to him
during the three years immediately preceding the year in which
the change in control occurs. The payments and benefits payable
in the event of a change in control are not subject to any
limitations that would prevent them from being considered
excess parachute payments subject to excise or
corporate tax deduction disallowance under the Internal Revenue
Code. Therefore, the lump sum payments could require excise tax
payments on the part of the executive, and result in a deduction
disallowance on the part of our Company. In the case of the
Chief Executive Officer and Chief Operating Officer, we will
reimburse the excise tax payments made by the executive,
including taxes the executive would incur on the reimbursement
itself.
In both Change in Control Agreements, a change in control will
be deemed to occur if: (i) any person or group, other than
members of the Lipke family, acquires 35% or more of the common
stock of our Company without approval of the Board of Directors;
(ii) there is a change in a majority of the members of the
Board of Directors in any twelve-month period and the new
directors were not endorsed by the majority of the old
directors; (iii) we enter into certain merger or
consolidation transactions; or (iv) we enter into a
contract in which we agree to merge or consolidate, and the
executives employment is terminated without cause or the
executive resigns for good reason prior to closing.
Effective February 20, 2009, the Company entered into
Change in Control Agreements with the Senior Vice President and
Chief Financial Officer, Senior Vice President, Corporate
Controller and Secretary and Senior Vice President of Human
Resources and Organizational Development. These Change in
Control Agreements provide for a cash payment upon the
consummation of a change in control transaction and termination
of employment for these executive officers. The Senior Vice
President and Chief Financial Officer is entitled to receive a
lump sum severance payment equal to 200% of his annual cash
compensation and the Senior Vice President, Corporate Controller
and Secretary and Senior Vice President of Human Resources and
Organizational Development are entitled to receive lump sum
severance payments equal to 100% of their annual cash
compensation. These Change in Control Agreements also provide
for the reimbursement to the executive officers for any excise
tax payments made by the executive officer, including taxes the
executive officer would incur on the reimbursement itself.
The following table sets forth the amount of compensation which
would be payable to the executive officers upon a termination of
their employment under the circumstances described. Except for
retirement, the amounts payable have been determined as if the
employment of the executive officer was terminated on
December 31, 2008, on which date, the closing price per
share of the Companys stock was $11.94. With respect to
amounts payable at retirement, we have assumed that the
executive officer retired on December 31, 2008 and that, at
the time of such retirement, he satisfied the applicable age and
service requirements for payment of a retirement benefit under
the applicable benefit program.
Payments
Upon Termination of Employment
Brian J. Lipke
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
Termination for
|
|
|
|
|
|
|
|
Without
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
Source of Payment
|
|
|
Termination
|
|
|
|
Good Reason
|
|
|
|
Retirement
|
|
|
|
Cause
|
|
|
|
for Cause
|
|
|
|
Death
|
|
|
|
Disability
|
|
Employment Agreement (1)
|
|
|
$
|
|
|
|
|
$
|
2,651,553
|
|
|
|
$
|
11,372
|
|
|
|
$
|
2,651,553
|
|
|
|
$
|
|
|
|
|
$
|
931,000
|
|
|
|
$
|
543,145
|
|
Salary Continuation Agreement (2)
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
1,000,000
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
1,000,000
|
|
|
|
$
|
|
|
Outstanding Shares of Restricted Stock (3)
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
286,560
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
286,560
|
|
|
|
$
|
286,560
|
|
Long Term Incentive Plan (4)
|
|
|
$
|
|
|
|
|
$
|
3,380,130
|
|
|
|
$
|
1,791,000
|
|
|
|
$
|
1,589,130
|
|
|
|
$
|
|
|
|
|
$
|
3,380,130
|
|
|
|
$
|
3,380,130
|
|
401(k) Restoration Plan (5)
|
|
|
$
|
15,901
|
|
|
|
$
|
15,901
|
|
|
|
$
|
15,901
|
|
|
|
$
|
15,901
|
|
|
|
$
|
15,901
|
|
|
|
$
|
15,901
|
|
|
|
$
|
15,901
|
|
Tax Gross Up Payment (6)
|
|
|
$
|
|
|
|
|
$
|
1,268,447
|
|
|
|
$
|
1,471,398
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
1,471,398
|
|
|
|
$
|
1,471,398
|
|
Total
|
|
|
$
|
15,901
|
|
|
|
$
|
7,316,031
|
|
|
|
$
|
4,576,231
|
|
|
|
$
|
4,256,584
|
|
|
|
$
|
15,901
|
|
|
|
$
|
7,084,989
|
|
|
|
$
|
5,697,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|
(1) |
|
The amount shown under the voluntary termination for good reason
and the termination without cause columns represent the sum of
the one time payment of $2,640,181 that would be made upon
Mr. Lipkes termination for those reasons and the
current year value of the annual health insurance premiums that
are provided for by his employment agreement. The amount shown
under the death column represents the one time payment that
would be made in the event of his death. The amount shown under
the disability column represents the current value of the annual
payment and annual health insurance benefits provided for by
Mr. Lipkes employment agreement. The disability
payment of $531,773, calculated as defined in his employment
agreement, is payable annually for the remainder of
Mr. Lipkes life, and is reduced by amounts he would
receive from the federal and state governments and insurance,
pension or profit sharing plans maintained by the Company.
Annual payment of health insurance premiums, at a current cost
of $11,372 per year would continue for Mr. Lipke if he
voluntarily terminates for good reason, was terminated without
cause or becomes disabled. |
|
(2) |
|
The amount shown in this row is payable in ten (10) equal
annual installments of $100,000 upon Mr. Lipkes
retirement at or after age sixty (60) or his death. |
|
(3) |
|
The amounts shown in this row represent the market value of
restricted shares that would vest upon occurrence of the events
in each column as of December 31, 2008. |
|
(4) |
|
The amounts shown it this row represent the market value of
restricted stock units that would vest upon the occurrence of
the events in each column as of December 31, 2008. The
actual vesting occurs six (6) months after the event
occurs, except for death, in which case vesting is immediate. |
|
(5) |
|
The amount represents the balance of Mr. Lipkes
401(k) Restoration Plan account as of December 31, 2008,
which may be paid six months after the event in either a lump
sum as the balance is below $25,000, or in annual installments
over a period of five (5) to ten (10) years, except in
the event of Mr. Lipkes death, in which case the
amount would be paid immediately. |
|
(6) |
|
The amounts in this row represent the tax gross up payable with
respect to outstanding restricted stock awards and retirement
based restricted stock units. |
Henning N.
Kornbrekke
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
Termination for
|
|
|
|
|
|
|
|
Without
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
Source of Payment
|
|
|
Termination
|
|
|
|
Good Reason
|
|
|
|
Retirement
|
|
|
|
Cause
|
|
|
|
for Cause
|
|
|
|
Death
|
|
|
|
Disability
|
|
Employment Agreement (1)
|
|
|
$
|
|
|
|
|
$
|
1,762,764
|
|
|
|
$
|
8,694
|
|
|
|
$
|
1,762,764
|
|
|
|
$
|
|
|
|
|
$
|
704,688
|
|
|
|
$
|
407,525
|
|
Management stock purchase plan (2)
|
|
|
$
|
889,136
|
|
|
|
$
|
889,136
|
|
|
|
$
|
889,136
|
|
|
|
$
|
889,136
|
|
|
|
$
|
889,136
|
|
|
|
$
|
889,136
|
|
|
|
$
|
889,136
|
|
Long Term Incentive Plan (3)
|
|
|
$
|
537,300
|
|
|
|
$
|
1,391,631
|
|
|
|
$
|
537,300
|
|
|
|
$
|
1,391,631
|
|
|
|
$
|
537,300
|
|
|
|
$
|
1,391,631
|
|
|
|
$
|
1,391,631
|
|
401(k) Restoration Plan (4)
|
|
|
$
|
23,719
|
|
|
|
$
|
23,719
|
|
|
|
$
|
23,719
|
|
|
|
$
|
23,719
|
|
|
|
$
|
23,719
|
|
|
|
$
|
23,719
|
|
|
|
$
|
23,719
|
|
Tax Gross Up Payment (5)
|
|
|
$
|
380,534
|
|
|
|
$
|
380,534
|
|
|
|
$
|
380,534
|
|
|
|
$
|
380,534
|
|
|
|
$
|
380,534
|
|
|
|
$
|
380,534
|
|
|
|
$
|
380,534
|
|
Total
|
|
|
$
|
1,830,689
|
|
|
|
$
|
4,447,784
|
|
|
|
$
|
1,839,383
|
|
|
|
$
|
4,447,784
|
|
|
|
$
|
1,830,689
|
|
|
|
$
|
3,389,708
|
|
|
|
$
|
3,092,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amount shown under the voluntary termination for good reason
and the termination without cause columns represent the sum of
the one time payment of $1,754,070 that would be made upon
Mr. Kornbrekkes termination for those reasons and the
current year value of the annual health insurance premiums that
are provided for by his employment agreement. The amount shown
under the death column represents the one time payment that
would be made in the event of his death. The amount shown under
the disability column represents the current value of the annual
payment and annual health insurance benefits provided for by
Mr. Kornbrekkes employment agreement. The disability
payment of $398,831, calculated as defined in his employment
agreement, is payable annually for the remainder of
Mr. Kornbrekkes life, and is reduced by amounts he
would receive from the federal and state governments and
insurance, pension or profit sharing plans maintained by the
Company. Annual payment of health insurance premiums, currently
valued at $8,694, |
20
|
|
|
|
|
would continue for Mr. Kornbrekke if he voluntarily
terminates for good reason, was terminated without cause or
becomes disabled. |
|
(2) |
|
The amounts shown in this row represent the market value of
restricted stock units that would vest and convert to a cash
balance upon the occurrence of the events in each column. The
amount is payable in five (5) annual installments, with
interest compounding at the average of quarterly ten
(10) year treasury rates plus two percent (2%).
Mr. Kornbrekke is over sixty (60) years old, and
therefore will vest in the Companys matching contributions
upon the occurrence of the events shown in each column. |
|
(3) |
|
The amounts shown it this row represent the market value of
restricted stock units that would vest upon the occurrence of
the events in each column as of December 31, 2008. The
actual vesting occurs six (6) months after the event
occurs, except for death, in which case vesting is immediate. |
|
(4) |
|
The amount represents the balance of Mr. Kornbrekkes
401(k) Restoration Plan account as of December 31, 2008,
which may be paid six months after the event in either a lump
sum as the balance is below $25,000, or in annual installments
over a period of five (5) to ten (10) years, except in
the event of Mr. Kornbrekkes death, in which case the
amount would be paid immediately. |
|
(5) |
|
The amounts in this row represent the tax gross up payable with
respect to outstanding restricted stock awards and retirement
based restricted stock units. |
Kenneth W.
Smith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
Termination
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
Source of Payment
|
|
|
Termination
|
|
|
|
Retirement
|
|
|
|
Without Cause
|
|
|
|
for Cause
|
|
|
|
Death
|
|
|
|
Disability
|
|
Long Term Incentive Plan (1)
|
|
|
$
|
|
|
|
|
$
|
151,913
|
|
|
|
$
|
151,913
|
|
|
|
$
|
|
|
|
|
$
|
151,913
|
|
|
|
$
|
151,913
|
|
Total
|
|
|
$
|
|
|
|
|
$
|
151,913
|
|
|
|
$
|
151,913
|
|
|
|
$
|
|
|
|
|
$
|
151,913
|
|
|
|
$
|
151,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts shown in this row represent the market value of
restricted stock units that would vest upon the occurrence of
the events in each column as of December 31, 2008. The
actual vesting occurs six (6) months after the event
occurs, except for death, in which case vesting is immediate. |
Timothy J.
Heasley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
Termination
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
Source of Payment
|
|
|
Termination
|
|
|
|
Retirement
|
|
|
|
Without Cause
|
|
|
|
for Cause
|
|
|
|
Death
|
|
|
|
Disability
|
|
Supplemental Salary Continuation Plan (1)
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
15,577
|
|
Long Term Incentive Plan (2)
|
|
|
$
|
|
|
|
|
$
|
71,162
|
|
|
|
$
|
71,162
|
|
|
|
$
|
|
|
|
|
$
|
71,162
|
|
|
|
$
|
71,162
|
|
Total
|
|
|
$
|
|
|
|
|
$
|
71,162
|
|
|
|
$
|
71,162
|
|
|
|
$
|
|
|
|
|
$
|
71,162
|
|
|
|
$
|
86,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amount shown under the disability column represents the
payment Mr. Heasley would receive under the Corporate
Supplemental Salary Continuation Plan. This plan, a supplement
to our short term disability coverage, covers all full time
employees in our corporate offices and provides a supplemental
salary continuation based upon years of service.
Mr. Heasley qualifies for four (4) weeks of salary
continuation under this plan. |
|
(2) |
|
The amounts shown in this row represent the market value of
restricted stock units that would vest upon the occurrence of
the events in each column as of December 31, 2008. The
actual vesting occurs six (6) months after the event
occurs, except for death, in which case vesting is immediate. |
21
Paul M.
Murray
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
|
|
|
|
|
Termination
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
Source of Payment
|
|
|
Termination
|
|
|
|
Retirement
|
|
|
|
Without Cause
|
|
|
|
for Cause
|
|
|
|
Death
|
|
|
|
Disability
|
|
Supplemental Salary Continuation Plan (1)
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
53,846
|
|
Management Stock Purchase Plan (2)
|
|
|
$
|
42,720
|
|
|
|
$
|
85,440
|
|
|
|
$
|
42,720
|
|
|
|
$
|
42,720
|
|
|
|
$
|
42,720
|
|
|
|
$
|
42,720
|
|
Long Term Incentive Plan (3)
|
|
|
$
|
|
|
|
|
$
|
79,700
|
|
|
|
$
|
79,700
|
|
|
|
$
|
|
|
|
|
$
|
79,700
|
|
|
|
$
|
79,700
|
|
401(k) Restoration Plan (4)
|
|
|
$
|
28,451
|
|
|
|
$
|
28,451
|
|
|
|
$
|
28,451
|
|
|
|
$
|
28,451
|
|
|
|
$
|
28,451
|
|
|
|
$
|
28,451
|
|
Total
|
|
|
$
|
71,171
|
|
|
|
$
|
193,591
|
|
|
|
$
|
150,871
|
|
|
|
$
|
71,171
|
|
|
|
$
|
150,871
|
|
|
|
$
|
204,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amount shown under the disability column represents the
payment Mr. Murray would receive under the Corporate
Supplemental Salary Continuation Plan. This plan, a supplement
to our short term disability coverage, covers all full time
employees in our corporate offices and provides a supplemental
salary continuation based upon years of service. Mr. Murray
qualifies for sixteen (16) weeks of salary continuation
under this plan. |
|
(2) |
|
The amounts shown in this row represent the market value of
restricted stock units that would vest and convert to a cash
balance upon the occurrence of the events in each column. The
amount is payable in five (5) annual installments, with
interest compounding at the average of quarterly ten
(10) year treasury rates plus two percent (2%).
Mr. Murray is not over sixty (60) years old, and
therefore will not vest in the Companys matching
contributions upon the occurrence of the events shown in each
column except retirement which presumes Mr. Murray is sixty
(60) years of age. |
|
(3) |
|
The amounts shown in this row represent the market value of
restricted stock units that would vest upon the occurrence of
the events in each column as of December 31, 2008. The
actual vesting occurs six (6) months after the event
occurs, except for death, in which case vesting is immediate. |
|
(4) |
|
The amount represents the balance of Mr. Murrays
401(k) Restoration Plan account as of December 31, 2008,
which may be paid six months after the event in either a lump
sum as the balance is below $25,000, or in annual installments
over a period of five (5) to ten (10) years, except in
the event of Mr. Murrays death, in which case the
amount would be paid immediately. |
Payments
Upon Change in Control
The following table sets forth the amount of compensation which
would be payable to the executive officers of the Company with
whom the Company has entered into Change in Control Agreements
described above and the other executive officers. For purposes
of the payments to be made upon a change in control, the table
reflects the amounts which would be paid to the executive
officers if the change in control occurred on December 31,
2008, on which date, the closing price per share of the
Companys stock was $11.94.
Brian J. Lipke
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k)
|
|
|
|
|
|
|
|
|
|
Lump Sum
|
|
|
Outstanding
|
|
|
|
Value of
|
|
|
|
Value of
|
|
|
|
Value of
|
|
|
|
Restoration
|
|
|
|
Tax
|
|
|
|
|
|
Cash
|
|
|
Restricted
|
|
|
|
Outstanding
|
|
|
|
Retirement
|
|
|
|
LTIP
|
|
|
|
Plan
|
|
|
|
Gross Up
|
|
|
|
|
|
Payment
|
|
|
Stock
|
|
|
|
Options
|
|
|
|
RSUs
|
|
|
|
RSUs(1)
|
|
|
|
Payment
|
|
|
|
Payment(2)
|
|
|
|
Total
|
|
$5,330,710
|
|
|
$
|
286,560
|
|
|
|
$
|
48,000
|
|
|
|
$
|
1,791,000
|
|
|
|
$
|
2,786,130
|
|
|
|
$
|
15,901
|
|
|
|
$
|
4,782,899
|
|
|
|
$
|
15,041,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the value of LTIP RSUs currently issued of $1,589,130
and the value of LTIP RSUs that would be issued upon a change in
control of $1,197,000. |
|
(2) |
|
Represents a tax gross up payment of $1,395,833 related to
Mr. Lipkes Retirement restricted stock units, a tax
gross up payment of $223,333 related to restricted stock and a
payment of $3,163,733 related to the gross up of the excise tax
due on the change in control payments. |
22
Henning N.
Kornbrekke
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k)
|
|
|
|
|
|
|
|
|
|
Lump Sum
|
|
|
Value of
|
|
|
|
Value of
|
|
|
|
Value of
|
|
|
|
Restoration
|
|
|
|
Tax
|
|
|
|
|
|
Cash
|
|
|
Retirement
|
|
|
|
MSPP
|
|
|
|
LTIP
|
|
|
|
Plan
|
|
|
|
Gross Up
|
|
|
|
|
|
Payment
|
|
|
RSUs
|
|
|
|
RSUs
|
|
|
|
RSUs (1)
|
|
|
|
Payment
|
|
|
|
Payment (2)
|
|
|
|
Total
|
|
$3,453,336
|
|
|
$
|
537,300
|
|
|
|
$
|
889,136
|
|
|
|
$
|
1,604,118
|
|
|
|
$
|
23,719
|
|
|
|
$
|
1,824,301
|
|
|
|
$
|
8,331,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the value of LTIP RSUs currently issued of $854,330
and the value of LTIP RSUs that would be issued upon a change in
control of $749,788. |
|
(2) |
|
Represents a tax gross up payment of $418,750 related to
Mr. Kornbrekkes Retirement restricted stock units,
and a payment of $1,405,551 related to the gross up of the
excise tax due on the change in control payments. |
Kenneth W.
Smith
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
LTIP RSUs (1)
|
|
|
|
Total
|
|
$
|
395,663
|
|
|
|
$
|
395,663
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the value of LTIP RSUs currently issued of $151,913
and the value of LTIP RSUs that would be issued upon a change in
control of $243,750. |
Timothy J.
Heasley
|
|
|
|
|
|
|
|
Value of LTIP
|
|
|
|
|
|
RSUs (1)
|
|
|
|
Total
|
|
$
|
142,037
|
|
|
|
$
|
142,037
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the value of LTIP RSUs currently issued of $71,162
and the value of LTIP RSUs that would be issued upon a change in
control of $70,875. |
Paul M.
Murray
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
Value of
|
|
|
|
|
|
|
|
401(k)
|
|
|
|
|
|
Outstanding
|
|
|
|
MSPP
|
|
|
|
Value of
|
|
|
|
Restoration
|
|
|
|
|
|
Options
|
|
|
|
RSUs
|
|
|
|
LTIP RSUs (1)
|
|
|
|
Plan Payment
|
|
|
|
Total
|
|
$
|
|
|
|
|
$
|
42,720
|
|
|
|
$
|
140,950
|
|
|
|
$
|
28,451
|
|
|
|
$
|
212,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the value of LTIP RSUs currently issued of $79,700
and the value of LTIP RSUs that would be issued upon a change in
control of $61,250. |
AUDIT
COMMITTEE REPORT
The Audit Committee currently consists of three
(3) directors who are independent as defined in the listing
standards of the NASDAQ applicable to members of audit
committees. A brief description of the responsibilities of the
Audit Committee is set forth above under the caption The
Board of Directors and its Committees.
The Audit Committee has reviewed and discussed the
Companys audited financial statements for the year ended
December 31, 2008 with management of the Company and
Ernst & Young LLP, the Companys independent
registered public accounting firm. During 2008, management
evaluated the Companys internal control over financial
reporting in response to the requirements of Section 404 of
the Sarbanes-Oxley Act of 2002 and based on the framework in
Internal Control Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission. Throughout the year, management kept the Committee
apprised of the progress of its
23
evaluation of internal controls and the Committee provided
oversight of the evaluation process. At the end of the year,
management issued a report on the effectiveness of the
Companys internal control over financial reporting. The
Committee reviewed this report and discussed with management and
Ernst & Young LLP the adequacy of the Companys
internal control over financial reporting and disclosure
controls. The Committee also discussed with Ernst &
Young LLP the matters required to be discussed by Statement on
Auditing Standards No. 61, as amended Communication with
Audit Committees, which relates to the conduct of the audit,
including the auditors judgment about the quality of the
accounting principles applied in the Companys 2008 audited
financial statements. The Committee also has reviewed the
written disclosures and the letter from Ernst & Young
LLP required by Rule 3526 of the Public Company Oversight
Board, Communication with Audit Committees Concerning
Independence, and has discussed with Ernst & Young
LLP its independence.
Based on the review and the discussions referred to above, the
Audit Committee recommended to the Board of Directors that the
Companys audited financial statements be included in the
Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008 for filing with
the Securities and Exchange Commission.
AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS OF
GIBRALTAR INDUSTRIES, INC.
David N. Campbell
William P. Montague
Robert E. Sadler, Jr.
NOMINATING
AND CORPORATE GOVERNANCE COMMITTEE REPORT
The Nominating and Corporate Governance Committee currently
consists of three (3) directors who are independent as
defined in the listing standards of the NASDAQ applicable to
members of nominating committees. A brief description of the
responsibilities of the Nominating and Corporate Governance
Committee is set forth above under the caption The Board
of Directors and its Committees.
The current nominees for director were recommended for election
to the Board at a meeting of the Nominating and Corporate
Governance Committee held on February 17, 2009.
Mr. Campbell did not participate in his recommendation for
election to the Board. No communications from stockholders
regarding nominations were received by the Committee. The
Committee recommended that the existing Class III Directors
be nominated for a three (3) year term as Class III
Directors.
In evaluating potential nominees, the Nominating Committee
considers a nominees experience as a senior executive at a
publicly traded corporation, or as a management consultant,
investment banker, partner at a law firm or registered public
accounting firm, professor at an accredited law or business
school, experience in the management or leadership of a
substantial private business enterprise, educational, religious
or
not-for-profit
organization, or such other professional experience as the
Committee determines shall qualify an individual for Board
service; whether such person is independent within
the meaning of such term in accordance with the applicable
listing standards of the NASDAQ and the rules promulgated by the
Securities and Exchange Commission; financial expertise of a
potential nominee; and particular or unique needs of the Company
at the time a nominee is being considered.
NOMINATING AND CORPORATE GOVERNANCE
COMMITTEE OF THE BOARD OF DIRECTORS OF
GIBRALTAR INDUSTRIES, INC.
David N. Campbell
William J. Colombo
William P. Montague
24
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Companys Directors and executive
officers, and any persons who own more than ten percent (10%) of
a registered class of the Companys equity securities, to
file reports of initial ownership of Common Stock and subsequent
changes in that ownership with the Securities and Exchange
Commission and to furnish the Company with copies of all forms
they file pursuant to Section 16(a).
To the Companys knowledge, based solely upon a review of
the copies of such reports furnished to the Company and written
representations that no other reports were required, the Company
believes that during the year ended December 31, 2008, all
Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent (10%)
beneficial owners were complied with.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Certain
Beneficial Owners
The following table sets forth information as of March 20,
2009 (except as otherwise noted) with respect to all
stockholders known by the Company to be the beneficial owners of
more than 5% and certain other holders of its outstanding Common
Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
and Nature of
|
|
|
|
|
|
|
|
|
Beneficial
|
|
|
|
Percent of
|
|
Name and Address
|
|
|
Ownership (1)
|
|
|
|
Class
|
|
Franklin Resources, Inc. (2)
One Franklin Parkway
San Mateo, California
94403-1906
|
|
|
|
3,759,699
|
|
|
|
|
12.50
|
|
T. Rowe Price Associates, Inc. (3)
100 E. Pratt Street
Baltimore, MD 21202
|
|
|
|
2,998,423
|
|
|
|
|
10.00
|
|
Dimensional Fund Advisors LP (4)
Palisades West, Building One
6300 Bee Cave Road
Austin, TX 78746
|
|
|
|
2,494,686
|
|
|
|
|
8.32
|
|
NWQ Investment Management Company, LLC (5)
2049 Century Park East, 16th Floor
Los Angeles, CA 90067
|
|
|
|
2,440,336
|
|
|
|
|
8.14
|
|
Barclays Global Investors, NA. (6)
400 Howard Street
San Francisco, CA 94105
|
|
|
|
1,900,413
|
|
|
|
|
6.33
|
|
Eric R. Lipke (7)
75 Elmview Avenue
Hamburg, New York 14075
|
|
|
|
1,661,226
|
|
|
|
|
5.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Unless otherwise indicated in the footnotes each of the
stockholders named in this table has the sole voting and
investment power with respect to the shares shown as
beneficially owned by such stockholder, except to the extent
that authority is shared by spouses under applicable law. |
|
(2) |
|
Based on information set forth in a statement on
Schedule 13G filed with the SEC reflecting information as
of December 31, 2008 available on NASDAQ.com, filed on
February 6, 2009 by Franklin Resources, Inc. on behalf of
itself, Charles B. Johnson, Rupert H. Johnson, Jr. and Franklin
Advisor Services, LLC. |
|
(3) |
|
Based on information set forth in a statement on
Schedule 13G filed with the SEC reflecting information as
of February 28, 2009 and available on NASDAQ.com, filed on
March 10, 2009 by T. Rowe Price Associates, Inc. |
25
|
|
|
(4) |
|
Based on information set forth in a statement on
Schedule 13G filed with the SEC reflecting information as
of December 31, 2008 and available on NASDAQ.com, filed on
February 9, 2009 by Dimensional Fund Advisors LP. |
|
(5) |
|
Based on information set forth in a statement on
Schedule 13G filed with the SEC reflecting information as
of December 31, 2008 available on NASDAQ.com, filed on
February 17, 2009 by NWQ Investment Management Company, LLC. |
|
(6) |
|
Based on information set forth in a statement on
Schedule 13G filed with the SEC reflecting information as
of December 31, 2008 available on NASDAQ.com, filed on
February 5, 2009 by Barclays Global Investors, NA. on
behalf of itself and its affiliates Barclays Global Fund
Advisors and Barclays Global Investors, Ltd. |
|
(7) |
|
Includes (i) 149,792 shares of common stock registered
in the name of the reporting person,
(ii) 759,789 shares of common stock held by a trust
for the benefit of Eric R. Lipke, (iii) 18,750 shares
of common stock held by trusts for the benefit of the children
of Eric R. Lipke, (iv) 5,040 shares of common stock
held in custodial accounts for the benefit of the children of
Eric R. Lipke, (v) 2,400 shares of common stock held
by the minor children of Eric R. Lipke and
(vi) 725,455 shares of common stock, representing
shares held by Rush Creek Investment Co., L.P. (Rush
Creek). Rush Creeks general partner is Rush Creek
Management Company, LLC, which is owned pro rata by trusts
established for the benefit of each of Brian J. Lipke, Eric R.
Lipke and three other siblings of the reporting person. Eric R.
Lipke serves as sole manager of Rush Creek Management Company,
LLC. Excludes (i) 896,040 shares of common stock held
by a trust for the benefit of Brian J. Lipke, as to which Eric
R. Lipke serves as one of three trustees and as to which Eric R.
Lipke disclaims beneficial ownership,
(ii) 136,320 shares of common stock held by a trust
for the benefit of Brian J. Lipke and another sibling of the
reporting person, as to which Eric R. Lipke serves as one of
five trustees and disclaims beneficial ownership
(iii) 24,636 shares of common stock held by trusts for
the benefit of the children of Brian J. Lipke, as to which Eric
R. Lipke serves as one of three trustees and as to which he
disclaims beneficial ownership (iv) 387,471 shares of
common stock held in a trust for the benefit of a sibling of the
reporting person as to which Eric R. Lipke serves as one of
three trustees and disclaims beneficial ownership and
(v) 816,790 shares of common stock held in a trust for
the benefit of a sibling of the reporting person as to which
Eric R. Lipke serves as one of three trustees and disclaims
beneficial ownership. |
26
Management
The following table sets forth information as of March 20,
2009 (except as otherwise noted) with respect to each Director,
Director nominee, each executive officer named in the Summary
Compensation table above and all executive officers and
Directors as a group:
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
and Nature of
|
|
|
|
|
|
|
|
Beneficial
|
|
|
|
Percent of
|
Name and Address
|
|
|
Ownership (1)
|
|
|
|
Class
|
Brian J. Lipke (2)(3)
|
|
|
|
1,201,955
|
|
|
|
4.01
|
Henning N. Kornbrekke (2)(4)
|
|
|
|
117,528
|
|
|
|
*
|
Gerald S. Lippes (5)
665 Main Street, Suite 300
Buffalo, NY
14203-1425
|
|
|
|
53,557
|
|
|
|
*
|
William P. Montague (2)(6)
|
|
|
|
26,682
|
|
|
|
*
|
Robert E. Sadler (2)(7)
|
|
|
|
18,000
|
|
|
|
*
|
Arthur A. Russ, Jr. (8)
3400 HSBC Center
Buffalo, NY 14203
|
|
|
|
16,875
|
|
|
|
*
|
William J. Colombo (2)(9)
|
|
|
|
13,000
|
|
|
|
*
|
David N. Campbell (10)
389 River Road
Carlisle, MA 01741
|
|
|
|
12,125
|
|
|
|
*
|
Kenneth W. Smith (2)(11)
|
|
|
|
10,000
|
|
|
|
*
|
Paul M. Murray (2)(12)
|
|
|
|
6,603
|
|
|
|
*
|
Timothy J. Heasley (2)(13)
|
|
|
|
2,684
|
|
|
|
*
|
All Directors and Executive Officers as a Group
|
|
|
|
1,479,009
|
|
|
|
4.93
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Less than 1%. |
|
(1) |
|
Unless otherwise indicated in the footnotes each of the
stockholders named in this table has the sole voting and
investment power with respect to the shares shown as
beneficially owned by such stockholder, except to the extent
that authority is shared by spouses under applicable law. |
|
(2) |
|
The address of each executive officer and certain directors is
3556 Lake Shore Road, PO Box 2028, Buffalo, New York
14219-0028. |
|
(3) |
|
Includes (i) 120,185 shares of common stock registered
in the name of the reporting person,
(ii) 987,360 shares of common stock held by two trusts
for the benefit of Brian J. Lipke, (iii) 19,416 shares
of common stock held by trusts for the benefit of the daughters
of Brian J. Lipke, (iv) 5,220 shares of common stock
held in a custodial account for the benefit of a daughter of
Brian J. Lipke, (v) 18,750 shares of common stock
issuable under currently exercisable options pursuant to our
2005 Equity Incentive Plan, (vi) 5,236 shares of
common stock allocated to Brian J. Lipkes self-directed
account under our 401(k) Retirement Savings Plan,
(vii) 43,688 shares of common stock that will be
issued within sixty (60) days due to the vesting of
restricted stock units, and (viii) 2,100 shares of
common stock held by the minor children of Brian J. Lipke.
Excludes (i) 28,267 shares of common stock held by a
trust for the benefit of the mother of Brian J. Lipke, as to
which he serves as one of three trustees and as to which he
disclaims beneficial ownership, (ii) 45,000 shares of
common stock held by a trust for the benefit of a sibling of
Brian J. Lipke, as to which he serves as one of five trustees
and as to which he disclaims beneficial ownership,
(iii) 9,407 shares of common stock held by a trust for
the benefit a niece of Brian J. Lipke, as to which he serves as
one of four trustees and as to which he disclaims beneficial
ownership, (iv) 18,750 shares of common stock held by
trusts for the benefit of the children of a sibling of Brian J.
Lipke, as to which he serves as one of three trustees and as to
which he disclaims beneficial ownership,
(v) 2,077 shares of common stock held in a custodial
account for the benefit of a relative of Brian J. Lipke and as
to which he disclaims beneficial ownership,
(vi) 5,040 shares of common stock held in a custodial
account for the benefit of the children of a sibling of Brian J.
Lipke and as to which he disclaims beneficial ownership and
(vii) 145,091 shares of common |
27
|
|
|
|
|
stock, representing Brian J. Lipkes proportionate share of
common stock held by Rush Creek Investment Co., L.P. (Rush
Creek). Rush Creeks general partner is Rush Creek
Management Company, LLC, which is owned pro rata by trusts
established for the benefit of each of Brian J. Lipke, Eric R.
Lipke and three other siblings of the reporting person. |
|
(4) |
|
Includes (i) 85,408 shares of common stock registered
in the name of the reporting person and
(ii) 32,120 shares of common stock to be issued within
sixty (60) days due to the vesting of restricted stock
units. |
|
(5) |
|
Includes (i) 51,682 shares of common stock registered
in the name of the reporting person, including 5,000 restricted
shares with respect to which Mr. Lippes exercises voting
power but does not currently have dispositive power and
(ii) 1,875 shares of common stock held by Lippco
Capital LLC, a company controlled by Mr. Lippes. |
|
(6) |
|
Includes 26,682 shares of common stock registered in the
name of the reporting person, including 5,000 restricted shares
with respect to which Mr. Montague exercises voting power
but does not currently have dispositive power. |
|
(7) |
|
Includes 18,000 shares of common stock registered in the
name of the reporting person, including 9,000 restricted shares
with respect to which Mr. Sadler exercises voting power but
does not currently have dispositive power. |
|
(8) |
|
Includes (i) 14,575 shares of common stock registered
in the name of the reporting person, including 5,000 restricted
shares with respect to which Mr. Russ exercises voting
power but does not currently have dispositive power and
(ii) 2,300 shares held by his wife as to which
Mr. Russ claims beneficial ownership. Excludes
28,267 shares of common stock held by the Kenneth E. Lipke
Trust, as to which Mr. Russ serves as one of three trustees
and as to which he disclaims beneficial ownership. |
|
(9) |
|
Includes 13,000 shares of common stock registered in the
name of the reporting person, including 9,000 restricted shares
with respect to which Mr. Colombo exercises voting power
but does not currently have dispositive power. |
|
(10) |
|
Includes (i) 8,375 shares of common stock registered
in the name of the reporting person, including 5,000 restricted
shares with respect to which Mr. Campbell exercises voting
power but does not currently have dispositive power and
(ii) 3,750 shares of common stock held by an
Individual Retirement Account for the benefit of
Mr. Campbell. |
|
(11) |
|
Includes (i) 10,000 shares of common stock registered
in the name of the reporting person. |
|
(12) |
|
Includes (i) 2,427 shares of common stock registered
in the name of the reporting person, (ii) 1,535 shares
of common stock allocated to Mr. Murrays
self-directed account under our 401(k) Retirement Savings Plan,
(iii) 2,105 shares of common stock to be issued within
sixty (60) days due to the vesting of restricted stock
units, and (iv) 536 shares of common stock issuable
under currently exercisable options pursuant to our 2005 Equity
Incentive Plan. |
|
(13) |
|
Includes (i) 2,090 shares of common stock registered
in the name of the reporting person and
(ii) 594 shares of common stock to be issued within
sixty (60) days due to the vesting of restricted stock
units. |
PROPOSAL 2
APPROVAL OF THE ADOPTION OF THE THIRD AMENDMENT AND
RESTATEMENT
OF THE GIBRALTAR INDUSTRIES, INC. 2005 EQUITY INCENTIVE
PLAN
During 2008, the Compensation Committee of the Board of
Directors concluded that a significant portion of future equity
based awards issued to the executives under the LTIP should be
performance based.
Effective as of May 19, 2005, the Company adopted the
Gibraltar Industries, Inc. 2005 Equity Incentive Plan (the
Plan) with the approval of the Companys
stockholders. On December 18, 2006, the Company amended and
restated the Plan to limit the form of payment of certain awards
to an issuance of shares of the Companys common stock (the
Common Stock). Effective as of December 31,
2008, the Company amended and restated the Plan to comply with
the provisions of Section 409A of the Internal Revenue Code
and the related regulations promulgated by the United States
Treasury Department.
28
In connection with the Compensation Committees decision to
include performance conditions on a significant portion of
future equity based awards to the executives under the LTIP, and
to allow the continued use of equity based compensation which
the Board of Directors believes aligns the interests of
executives with those of the shareholders, on February 25,
2009, the Board of Directors approved the adoption of a Third
Amendment and Restatement of the Plan (the Plan
Restatement). The Plan Restatement, subject to the
approval of the Companys stockholders, provides:
(i) for an increase in the aggregate number of shares of
Common Stock which may be issued pursuant to awards made under
the terms of the Plan from 2,250,000 to 4,500,000;
(ii) that the total number of shares of Common Stock of the
Company which may be issued pursuant to awards made under the
terms of the Plan will not be reduced by restricted stock units
which are settled solely in cash rather than in shares of the
Companys Common Stock; (iii) for the elimination
(subject to the 4,500,000 overall limit on the maximum number of
shares of Common Stock that may be issued pursuant to awards
made under the terms of the Plan) of the limitation on the
maximum number of restricted stock units and restricted shares
which may be issued under the terms of the Plan; and
(iv) for the elimination of the limit of 200,000 on the
aggregate number of shares of Common Stock which may be issued
to any individual participant over a five (5) year period
in connection with awards of options, performance shares,
performance units and rights made under the Plan. The amendments
to the Plan provided for by the Plan Restatement will provide
the Compensation Committee with greater flexibility in the
structuring of the compensation program which the Company
maintains for its executive officers and other eligible
participants, and will allow a greater emphasis to be placed on
performance based awards.
Information concerning the number of restricted shares and
restricted stock units issued to Executive Officers and the
non-employee directors under the Plan during the last year is
set forth above under the headings Compensation of
Directors and Grants of Plan-Based Awards.
The following is a summary of the material features of the Plan
as amended and restated by the Plan Restatement and does not
purport to be complete. The summary is subject to and qualified
in its entirety by the terms of the Plan Restatement, a copy of
which is set forth as Appendix A of this Definitive Proxy
Statement.
Purpose
The Plan allows the Company to grant equity based incentive
compensation awards to eligible participants (described below)
to provide them an additional incentive to promote the business
of the Company, to increase their propriety interest in the
success of the Company and to encourage them to remain in its
employ.
Eligible
Participants
The individuals that are eligible to receive awards under the
Plan are officers and other employees of the Company and its
subsidiaries, non-employee directors of the Company and
consultants and independent advisors to the Company. As of
December 31, 2008, all of the Companys executive
officers and all of the non-employee directors had received
awards under the Plan.
Administration
The Board of Directors administers the Plan with respect to
non-employee directors, consultants and independent advisors.
The Board of Directors also administers the Plan with respect to
Executive Officers, based on recommendations of the Compensation
Committee. The Compensation Administration Committee, as defined
in the Plan Restatement, administers the Plan with respect to
all other employees. The administrator of the Plan is referred
to as the Committee.
Reservation
of Common Stock
The Board of Directors initially reserved 2,250,000 shares
of Common Stock for issuance under the Plan. In the event that
the Plan Restatement is approved, there will be an additional
2,250,000 shares of Common Stock reserved for issuance
under the Plan. If an award made under the Plan expires, is
forfeited or is settled by payment of cash, the shares which
could have been purchased or granted under that award will again
be available for issuance under the Plan. The number of shares
of Common Stock available for issuance under the Plan and the
number of shares issuable under outstanding awards will be
proportionately adjusted if the number of outstanding shares of
the
29
Common Stock changes as a result of a stock dividend, stock
split, recapitalization or the like, or if the Common Stock is
converted as a result of a reorganization.
Types of
Awards
Awards under the Plan may be in the form of Options, Restricted
Shares, Restricted Units, Performance Shares, Performance Units
and Rights.
Terms of
Awards
The Committee determines which eligible participants shall be
granted awards, the terms and provisions of the awards and the
number of shares of Common Stock for which awards are granted.
Options
Option Price. The exercise price of each option
granted under the Plan will be determined by the Committee at
the time the option is granted, but shall not be less than 100%
of the fair market value of the Common Stock on the date of the
grant or, if greater, the par value of a share of Common Stock.
Grants of incentive stock options to individuals holding 10% or
more of the combined voting power of the Companys
outstanding capital stock cannot have an exercise price of less
than 110% of the fair market value of the Common Stock on the
date of the grant.
Option Exercise Periods. Options granted under the
Plan expire ten years after the date granted. Incentive Stock
Options granted to individuals holding 10% or more of the voting
power of the Companys outstanding capital stock expire
after five years. Options will not be exercisable upon
termination of a holders service with the Company, whether
or not they were otherwise exercisable, unless so provided in
the terms of the Option award.
Restricted
Shares and Restricted Units
Restrictions and Restricted Period. Restricted
Shares or Restricted Units granted under the Plan may not be
sold or otherwise disposed of during a restricted period
established by the Committee at the time of the grant.
Rights While Restricted Shares Remain Subject to
Restrictions. Holders of Restricted Shares granted
under the Plan shall have the right to vote Restricted Shares
and receive payment of dividends on Restricted Shares during the
restricted period. If provided by the terms of a Restricted
Share award, dividends payable with respect to Restricted Shares
may be used to purchase additional shares, subject to the same
restrictions as the original shares.
Rights While Restricted Units Remain Subject to
Restrictions. Restricted Units do not provide any
voting or cash dividend rights to the holder of such Units.
However, dividends paid in shares will entitle a holder of
Restricted Units to additional Restricted Units having the same
restricted period as the original Restricted Units.
Management Stock Purchase Plan. On the date that the
adoption of the Plan was approved, the Board of Directors
approved the adoption of the Gibraltar Industries, Inc.
Management Stock Purchase Plan (the MSPP) to
establish a framework for a specific type of Restricted Unit
award under the Plan. The MSPP is an integral part of the Plan.
Effective as of December 18, 2006, the Company adopted a
First Amendment and Restatement of the MSPP to provide the
Companys non-employee directors with the right to use a
portion of their Director Fees to purchase Restricted Units at a
purchase price equal to the fair market value of the
Companys Common Stock, which, except in the case of a
change of control, is equal to the average of the closing prices
of a share of Common Stock as reported by the NASDAQ National
Market System on each of the two hundred (200) consecutive
trading days immediately preceding the date of the determination
of fair market value (the Fair Market Value). On
December 30, 2008, the Company amended and restated the
MSPP to permit eligible participants to use up to twenty-five
percent (25%) of their base salary and up to one hundred percent
(100%) of their annual incentive compensation to purchase
Restricted Units at price equal to the then applicable Fair
Market Value of the Companys Common Stock. If an eligible
employee uses a portion of his base salary or annual bonus to
purchase Restricted Units, the Company will make an award of an
additional number of Restricted Units equal to a specified
percentage of the base salary and a specified percentage of the
annual bonus used by the eligible employee to purchase
Restricted Units (the Employee Matching Units). If
an eligible non-employee director uses a portion of his Director
Fees to purchase Restricted Units, the Company will make an
award of an identical number of Restricted Units (the
Director Matching Units and together
30
with the Employee Matching Units, the Matching
Units). The Plan Restatement clarifies that because
Restricted Units (including Matching Units) purchased or awarded
under the MSPP are settled solely in cash, such Restricted Units
will not reduce the number of shares otherwise available for
issuance under the Plan Restatement. Restricted Units purchased
by an eligible employee or a non-employee director under the
MSPP are non-forfeitable.
Forfeiture of Restricted Shares and Restricted
Units. If the holder of Restricted Shares or Restricted
Units terminates his service with the Company before the
expiration of the restricted period, the Restricted Shares or
Restricted Units will be forfeited unless otherwise specifically
provided by the terms of the award. In addition, any Matching
Units awarded to eligible participants under the MSPP will be
forfeited if the eligible employees employment is
terminated before age 60 or if the non-employee director
ceases to serve as a director before age 60.
Payment of Restricted Shares and Restricted
Units. Payment upon the lapse of the restricted period
for Restricted Shares and Restricted Units which have not been
awarded under MSPP shall be made by the issuance of shares of
Common Stock. Restricted Units awarded under the MSPP shall only
be paid in cash.
Performance
Shares and Performance Units
Performance Goals and Performance Period. The
Committee establishes written performance goals and performance
periods for each award of Performance Shares or Performance
Units granted under the Plan.
Rights While Performance Shares Remain Subject to the
Achievement of Performance Goals. Holders of
Performance Shares granted under the Plan shall have the right
to vote Performance Shares and receive payment of dividends on
Performance Shares during the performance period. However, if
provided by the terms of a Performance Share award, dividends on
Performance Shares may be used to purchase additional shares,
subject to the same performance goals and performance period as
the original Performance Shares.
Rights While Performance Units Remain Subject to the
Achievement of Performance Goals. Performance Units do
not provide any voting or cash dividend rights to the holder of
such Units. However, dividends paid in shares will entitle a
holder of Performance Units to additional Performance Units
having the same performance goals and performance period as the
original Performance Units.
Forfeiture of Performance Shares and Performance
Units. If the holder of Performance Shares or
Performance Units terminates his service with the Company before
the expiration of the performance period, the Performance Shares
or Performance Units will be forfeited unless otherwise
specifically provided by the terms of the award.
Payment for Performance Shares and Performance
Units. Common Stock will be issued for the payment of
Performance Shares or Performance Units if performance goals are
achieved within the performance period.
Rights
Terms of Rights. Rights granted under the Plan shall
provide the holder with the right to receive shares in an amount
determined based on the appreciation, if any, in the value of a
specified number of shares of Common Stock over a specified
period of time, each as established by the Committee. The base
price used to determine the amount of the appreciation in value
will not be less than the fair market value of a share of Common
Stock on the date the award of Rights is made.
Rights during the Appreciation Period. Rights do not
provide any voting or cash dividend rights to the holder.
However, dividends paid in shares of Common Stock will entitle a
holder to additional Rights having an appreciation period which
ends at the same time the appreciation period ends for the
original Rights. The base price for such additional Rights is
the fair market value of a share of Common Stock on the date
dividends are paid.
Forfeiture of Rights. If the holder of Rights
terminates his service with the Company before the expiration of
the appreciation period, the Rights will be forfeited unless
otherwise specifically provided by the terms of the award of
such Rights.
31
Change in
Control
Upon a change in control of the Company (as defined
in the Plan), all outstanding Options and Rights will be
converted to a right to receive cash, restrictions on Restricted
Shares and Restricted Units will lapse, and all Performance
Shares and Performance Units will be treated as if the
performance goals had been met.
Federal
Tax Consequences
Options. Upon exercise of an Incentive Stock Option,
an optionee will not realize federally taxable income (except
that the alternative minimum tax may apply) and the Company will
not be entitled to any deduction. If the optionee sells the
shares more than two years after the grant date and more than
one year after exercise, the entire gain, if any, realized upon
the sale will be federally taxable to the optionee as long-term
capital gain and the Company will not be entitled to a
corresponding deduction. If the optionee does not satisfy the
holding period requirements, the optionee will realize ordinary
income, in most cases equal to the difference between the option
price of the shares and the lesser of the fair market value of
the shares on the exercise date or the amount realized on a sale
or exchange of the shares, and the Company will be entitled to a
corresponding deduction. The favorable tax treatment provided by
the Internal Revenue Code to Incentive Stock Options granted
under the Plan is limited to options to purchase Common Stock,
which have a fair market value of $100,000.00 at the date of the
option grant and that first become exercisable in any one year.
Restricted Shares and Performance Shares. The value
of Restricted Shares and Performance Shares awarded are taxed as
ordinary income to the award recipient in the year the
restrictions lapse and the award is paid. Alternatively,
recipients of an award of Restricted Shares or Performance
Shares may file an election under Section 83(b) of the
Internal Revenue Code and include the value of the Restricted
Shares or Performance Shares as ordinary income in the year of
the grant.
The discussion set forth above is a brief overview of certain
United States federal income tax consequences of awards made
under the Plan. The overview should not be relied on as being a
complete description of the applicable United States federal
income tax consequences. In addition, this overview does not
address the state, local, foreign and other tax aspects of
awards made under the Plan.
Transferability
Generally, awards granted under the Plan are not transferable by
a recipient during his or her lifetime. However, if the award is
not an Incentive Stock Option, and the instrument evidencing the
award permits, a recipient may transfer his or her rights with
respect to an award, or any portion thereof, to a family member.
Amendments
The Board of Directors may suspend, amend or terminate the Plan,
provided that, stockholder approval is required for any
amendment which: (i) increases the maximum number of shares
as to which options may be issued under the Plan; or
(ii) materially modifies the requirements as to eligibility
or participation in the Plan. The applicable listing standards
of the NASDAQ National Market System require stockholder
approval of any material amendment to the Plan.
Effective
Date
The Plan was initially approved by the stockholders of the
Company on May 1, 2005. The First Amendment and Restatement
was adopted by the Company and effective as of December 18,
2006 and the Second Amendment and Restatement was adopted by the
Company and effective as of December 31, 2008.
Vote
Required
The affirmative vote of the holders of a majority of the shares
of Common Stock present, in person or by proxy, and entitled to
vote at the meeting is required to approve the Plan Restatement.
If the stockholders do not approve the Plan Restatement, the
Plan in its current form will remain in effect.
32
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR THE
APPROVAL OF THE ADOPTION OF THE THIRD AMENDMENT AND RESTATEMENT
OF
THE GIBRALTAR INDUSTRIES, INC. 2005 EQUITY INCENTIVE PLAN IN
PROPOSAL 2.
PROPOSAL 3
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee of the Companys Board has selected the
firm of Ernst & Young LLP to serve as the
Companys independent registered public accounting firm for
the fiscal year ending December 31, 2009 and recommends
that the stockholders vote for the ratification of that
selection. Ernst & Young LLP audited the
Companys consolidated financial statements for the past
four fiscal years including 2008. Representatives of
Ernst & Young LLP are expected to be present at the
Annual Meeting and will be given the opportunity to make a
statement if they so desire and to respond to appropriate
questions.
The selection of the Companys independent registered
public accounting firm is made annually by the Audit Committee.
Before selecting Ernst & Young LLP, the Audit
Committee carefully considered that firms qualifications
as the independent registered public accounting firm for the
Company and the audit scope. Stockholder ratification of the
Audit Committees selection of Ernst & Young LLP
as the Companys independent registered public accounting
firm is not required by the Companys bylaws or otherwise.
The Companys Board of Directors is submitting the
selection of Ernst & Young LLP to the stockholders for
ratification and will reconsider whether to retain
Ernst & Young LLP if the stockholders fail to ratify
the Audit Committees selection. In addition, even if the
stockholders ratify the selection of Ernst & Young
LLP, the Audit Committee may in its discretion appoint a
different independent accounting firm at any time during the
year if the Audit Committee determines that a change is in the
best interests of the Company.
Vote
Required
The affirmative vote of the holders of a majority of the shares
of Common Stock present, in person or by proxy, and entitled to
vote at the meeting is required to ratify the selection of
Ernst & Young LLP as the Companys independent
registered public accounting firm for 2009.
THE AUDIT COMMITTEE AND BOARD OF DIRECTORS RECOMMEND THAT
YOU VOTE FOR THE RATIFICATION OF ERNST &
YOUNG LLP AS OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM IN
PROPOSAL 3.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The Nominating and Corporate Governance Committee is responsible
for reviewing and approving related party transactions on an
ongoing basis.
On August 31, 2007, we entered into a Second Amended and
Restated Credit Agreement (the Senior Credit Agreement) with Key
Bank National Association serving as lead bank of a syndicate.
The Senior Credit Agreement provides for (i) a revolving
credit facility with aggregate commitments up to
$375.0 million, including a $50.0 million
sub-limit
for letters of credit and a swing line loan
sub-limit of
$20.0 million and (ii) a term loan in the original
principal amount of $122.7 million. With respect to the
Senior Credit Agreement, during 2008 the largest aggregate
amount of principal outstanding under the revolving credit
facility was $171.6 million, the amount of principal
outstanding as of December 31, 2008 was
$149.0 million, and the aggregate principal and interest
paid during 2008 was $130.5 million and $11.5 million,
respectively. Loans under the Senior Credit Agreement bear
interest, at the borrowers option at (i) LIBOR plus a
margin ranging from 0.60% to 1.40%, depending on the
Companys consolidated leverage ratio, or (ii) the
higher of the administrative agents prime rate or the
federal funds effective rate plus 0.50%. Facility fees are
payable to the lenders on their revolving commitments at a rate
ranging from 0.150% to 0.350% and annual letter of credit fees
range from 0.60% to 1.40% of the stated amount of the letter
33
of credit. Mr. Robert E. Sadler, Jr., a Director of
the Company, is Vice Chairman of the Board of Manufacturers and
Traders Trust Company, one of the lenders under the Senior
Credit Agreement.
The firm of Lippes Mathias Wexler Friedman, LLP, of which
Mr. Gerald S. Lippes, a Director of the Company, is a
partner, serves as counsel to the Company. During 2008, this
firm received approximately $1,475,000 for legal services
rendered to the Company. The firm of Phillips Lytle LLP, of
which Mr. Arthur A. Russ, Jr., a Director of the
Company, is a partner, also provided legal services to the
Company in 2008 and received approximately $254,000.
During 2008, the Board of Directors reviewed and approved all
the transactions described above. It is the Companys
policy and procedure to obtain approval for transactions and
business relationships with any director, nominee for director,
executive officer or any family member of a director, nominee
for director or executive officer from the Nominating and
Corporate Governance Committee. Approval of these transactions
is brought to the Nominating and Corporate Governance Committee
for approval on an annual basis.
OTHER
MATTERS
The Companys management does not currently know of any
matters to be presented for consideration at the Annual Meeting
other than the matters described in the Notice of Annual
Meeting. However, if other matters are presented, the
accompanying proxy confers upon the person or persons entitled
to vote the shares represented by the proxy, discretionary
authority to vote such shares in respect of any such other
matter in accordance with their best judgment.
INFORMATION
ABOUT OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee has selected Ernst & Young LLP
(EY) as the Companys independent registered
public accounting firm for the 2009 fiscal year. EY served as
our independent registered public accounting firm and audited
our consolidated financial statements for the fiscal years ended
December 31, 2008 and 2007 and expressed an opinion as to
whether the Company maintained, in all material respects,
effective internal control over financial reporting as of
December 31, 2008 and 2007. EY also performed audit-related
services and consultation in connection with various accounting
and financial reporting matters. Additionally, EY performed
certain non-audit services during fiscal 2008 and 2007 that are
permitted under the Sarbanes-Oxley Act and related rules of the
SEC. EY will have a representative present at the Annual Meeting
who will be available to respond to appropriate questions. The
representative will also have the opportunity to make a
statement if he or she desires to do so.
The Audit Committee determined that the provision of the
audit-related and permitted non-audit services provided by EY
during fiscal 2008 and 2007 was compatible with maintaining
their independence pursuant to the auditor independence rules of
the SEC for each of these years.
Fees
Billed to the Company by EY during Fiscal Year 2008 and
2007
Audit
Fees
The aggregate fees billed by EY for each of the fiscal years
ended December 31, 2008 and 2007 for services rendered for
the audit of the Companys annual financial statements and
internal control over financial reporting included the
Companys annual reports on
Form 10-K
and review of the interim financial statements included in the
Companys quarterly reports on
Form 10-Q,
including services related thereto, were $1,697,742 and
$1,998,522, respectively.
Audit-Related
Fees
The aggregate fees billed by EY for the fiscal year ended
December 31, 2007 for assurance and related services that
are reasonably related to the performance of the audit or review
of the Companys financial statements and are not reported
as Audit Fees, including due diligence was $512,646.
No fees for assurance and related services were billed by EY
during 2008.
34
Tax
Fees
The aggregate fees billed by EY for the fiscal years ended
December 31, 2008 and 2007 for services rendered for tax
compliance (including tax planning and tax advice and other tax
services (including advice related to mergers and acquisitions)
were $80,107 and $108,306, respectively.
All
Other Fees
There were no fees billed by EY for each of the fiscal years
ended December 31, 2008 and 2007 for products and services
other than those described above.
Pre-Approval
for Non-Audit Services Policies and Procedures of the Audit
Committee
The Audit Committee has adopted procedures for pre-approving
audit and non-audit services to be provided by EY. In
considering such approval, the Audit Committee may request all
such information and documentation from the Company as it deems
necessary in order for it to make its decision with respect to
the requested engagement. The Audit Committee may discuss the
potential engagement with the independent registered public
accounting firm, with its counsel or other professional
advisors. The Audit Committee shall consider whether or not the
performance of the requested non-audit services complies with
law, including but not limited to the Sarbanes-Oxley Act and the
regulations promulgated by the Securities and Exchange
Commission thereunder. It shall also consider whether the
services provided will have a negative effect upon the integrity
of the Companys financial reporting, whether by approving
such engagement the Audit Committee is complying with and
promoting its purposes, duties and functions as set forth in its
Charter, and it shall also consider any potential negative
effect which the engagement may have on the Company, including
the possible appearance of a conflict of interest or impropriety.
OTHER
INFORMATION
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON WHOSE
PROXY IS SOLICITED, ON THE WRITTEN REQUEST OF SUCH PERSON, A
COPY OF THE COMPANYS ANNUAL REPORT ON
FORM 10-K,
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL
STATEMENTS AND THE SCHEDULES THERETO. SUCH WRITTEN REQUEST
SHOULD BE DIRECTED TO GIBRALTAR INDUSTRIES, INC., 3556 LAKE
SHORE ROAD, PO BOX 2028, BUFFALO, NEW YORK
14219-0228,
ATTENTION: INVESTOR RELATIONS. EACH SUCH REQUEST MUST SET FORTH
A GOOD FAITH REPRESENTATION THAT, AS OF MARCH 20, 2009, THE
PERSON MAKING THE REQUEST WAS A BENEFICIAL OWNER OF SECURITIES
ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS.
35
STOCKHOLDERS
PROPOSALS
Proposals of stockholders intended to be presented at the 2010
Annual Meeting must be received by the Company by
December 11, 2009 to be considered for inclusion in the
Companys Definitive Proxy Statement and form of proxy
relating to that meeting.
The accompanying Notice and this Definitive Proxy Statement are
sent by Order of the Board of Directors.
Timothy J. Heasley
Secretary
Dated: April 3, 2009
STOCKHOLDERS ARE URGED TO EXECUTE THE ACCOMPANYING PROXY AND
RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE, WHETHER OR NOT
THEY EXPECT TO ATTEND THE MEETING. A STOCKHOLDER MAY
NEVERTHELESS VOTE IN PERSON IF HE OR SHE DOES ATTEND.
36
Appendix A
GIBRALTAR
INDUSTRIES, INC.
2005
EQUITY INCENTIVE PLAN
Third
Amendment And Restatement
Effective as of May 19, 2005, Gibraltar Industries, Inc., a
Delaware corporation with offices at 3556 Lake Shore Road,
Buffalo, New York (the Company), adopted an equity
based incentive compensation plan known as the Gibraltar
Industries, Inc. 2005 Equity Incentive Plan (the
Plan) for the purpose of carrying into effect its
objective to provide its employees and its non-employee
directors, consultants and other service providers with equity
based incentives to increase their motivation to improve the
profitability of the Company.
Effective as of December 18, 2006, the Company amended and
restated the Plan to limit the form of payment of certain Awards
to an issuance of Shares and to make certain other technical
changes. Effective as of December 30, 2008, the Company
amended and restated the Plan to conform the Plan to the
provisions of Section 409A of the Internal Revenue Code of
1986, as amended, and to make certain other technical changes.
The Company now desires to amend and restate the Plan, subject
to the approval of the stockholders of the Company: (1) to
increase the number of Shares which may be issued pursuant to
Awards made under the terms of the Plan by an amount equal to
2,250,000; (2) to provide that the total number of shares
of common stock of the Company which may be issued pursuant to
awards made under the terms of the Plan will not be reduced by
restricted stock units which are settled in cash rather than in
shares of the Companys common stock; (3) to eliminate
(subject to the 4,500,000 overall limit on the maximum number of
shares of common stock that may be issued pursuant to awards
made under the terms of the Plan) the limitation on the maximum
number of restricted stock units and restricted shares which may
be issued under the terms of the Plan; and (4) to eliminate
the limit of 200,000 on the aggregate number of shares of common
stock which may be issued to any individual participant over a
five (5) year period in connection with awards of options,
performance shares, performance units and rights made under the
Plan.
In connection with the foregoing, subject to the approval of the
stockholders of the Company, the Company hereby adopts this
document as the Third Amendment and Restatement of the Gibraltar
Industries, Inc. 2005 Equity Incentive Plan February 25,
2009.
ARTICLE 1.
DEFINITIONS
The following words and phrases, when used in this Plan, shall
have the following meanings, unless a different meaning is
plainly required by the context:
1.01 Affiliate means any corporation
under common control with the Company within the meaning of
Section 414(b) of the Internal Revenue Code and any trade
or business (whether or not incorporated) under common control
with the Company within the meaning of Section 414(c) of
the Internal Revenue Code.
1.02 Appreciation Period means the
period of time between the Date of Grant of a Right and the date
that the Right is exercised.
1.03 Award means any Option, Share,
Right or Unit granted to any Person under the Plan.
1.04 Base Price means the dollar amount
used to determine the amount of the increase, if any, in the
value of the Share used to determine the value of a Right, which
amount shall not be less than the Fair Market Value of the
Share, determined as of the Date of Grant of the Right.
A-1
1.05 Beneficiary means any person, firm,
corporation, trust or other entity designated by a Participant
in accordance with Section 11.07 to receive any payment
that is required to be made under the Plan upon or after the
Participants death.
1.06 Board of Directors means the Board
of Directors of the Company.
1.07 CEO means the Chief Executive
Officer of the Company.
1.08 Change in Control means the
occurrence of any of the following:
(a) During any twelve-consecutive month period, any
person or group of persons (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as
amended (the Exchange Act)) other than the Company,
an Affiliate of the Company, an employee benefit plan sponsored
by the Company or any one or more members of the Lipke family
becomes the beneficial owner (as defined in
section 13(d) of the Exchange Act) of thirty five percent
(35%) or more of the then outstanding voting stock of the
Company through a transaction which has not (or a series of
transactions which have not) been arranged by or consummated
with the prior approval of the Board of Directors; or
(b) a majority of the members of the Board of Directors is
replaced during any consecutive twelve-month period by Directors
whose appointment or election is not endorsed by a majority of
the members of the Board of Directors prior to the date of
appointment or election;
(c) the Company enters into a Merger Sale Agreement;
provided however, that the entry into a Merger Sale Agreement
shall only be deemed a Change in Control if the
Eligible Persons employment with or service to the Company
and all of its Affiliates is terminated (without cause in the
case of an Eligible Person that is an Employee) during the
period beginning on the date the Merger Sale Agreement is
executed and ending on the earlier of: (i) the date the
transaction contemplated by the Merger Sale Agreement is
consummated; and (ii) the date the Merger Sale Agreement is
terminated; or
(d) the consummation of a Merger Sale.
1.09 Code and Internal Revenue
Code mean the Internal Revenue Code of 1986, as amended.
1.10 Committee means: (a) the Board
of Directors, with respect to any Award that has been or may be
granted to any Eligible Person who is not an Employee;
(b) with respect to any Award that has been or may be
granted to any Executive Officer, the Board of Directors upon
the recommendation of the Compensation Committee; or
(c) the Compensation Administration Committee, with respect
to Awards to Employees who are not Executive Officers.
1.11 Common Stock means the common stock
(par value $0.01 per share) of the Company.
1.12 Company means Gibraltar Industries,
Inc., a Delaware corporation.
1.13 Compensation Administration
Committee means a committee comprised of the
Companys President and two (2) senior level
management employees of the Company, selected by the President
and employed in a position which is at the director level or any
more senior position; provided that, the President may, in his
discretion and at any time, remove
and/or
replace with different senior level management employees, either
or both of the senior level management employees who serve with
the President as members of the Compensation Committee.
1.14 Compensation Committee means the
Compensation Committee of the Board of Directors.
1.15 Covered Executive means, with
respect to any Award granted hereunder, any individual who at
the Date of Grant of such Award is a Covered
Employee of the Company for such year for purposes of
Section 162(m) of the Code.
1.16 Covered Individual means any
current or former member of the Committee, any current or former
officer or director of the Company or any individual designated
by the Committee to assist it in the administration of this Plan
as provided for by the second paragraph of Section 11.02.
1.17 Date of Grant means, with respect
to any Award, the date on which the Committee approves the grant
of such Award, or such later date as may be specified as the
date of grant of such Award in the instrument evidencing the
grant of such Award.
A-2
1.18 Disability means, with respect to
any Employee, such employees permanent and total
disability as defined in Section 22(e)(3) of the Code
or any successor provision.
1.19 Dividend Equivalent Units means
additional Restricted Units, additional Performance Units or
additional Rights credited to a Participant pursuant to
Section 5.04, Section 6.04 or Section 7.02.
1.20 Dividend Payment Date means each
date on which the Company pays a dividend on its Common Stock.
1.21 Eligible Person means:
(a) each Employee of the Company or any Affiliate;
(b) each member of the Board of Directors who is not an
Employee of the Company or any Affiliate; and (c) any
natural person that is a consultant or other independent advisor
providing services to the Company or any Affiliate.
1.22 Employee means each natural person
that is engaged in the performance of services for the Company
or any Affiliate for wages as defined in Section 3101(a) of
the Code.
1.23 Executive Officer means:
(a) the CEO; (b) the Companys President;
(c) the Companys principal financial officer;
(d) the Companys principal accounting officer;
(e) any Vice President of the Company who is in charge of a
principal business unit, division or function; (f) any
other officer of the Company who performs a policy making
function for the Company; (g) any officer of any Affiliate
who performs policy making functions for the Company; and
(h) any other person who performs policy making functions
for the Company.
1.24 Fair Market Value means, for
purposes of determining the value of any Share, Unit or Right,
except as otherwise expressly provided by the terms of the
instrument containing the terms of an Award, the closing price
of a share of Common Stock as reported by the NASDAQ National
Market System on the date as of which the determination of Fair
Market Value is to be made or, if no sale of Common Stock shall
have been made on the NASDAQ National Market System on that day,
on the next preceding day on which there was a sale of Common
Stock.
1.25 Incentive Stock Option means an
Option that is an incentive stock option within the
meaning of Section 422 of the Code.
1.26 Merger Sale means the
consolidation, merger, or other reorganization of the Company,
other than: (a) any such consolidation, merger or
reorganization of the Company in which holders of Common Stock
immediately prior to the earlier of: (i) the Board of
Directors approval of such consolidation, merger or other
reorganization; or (ii) the date of the stockholders
meeting in which such consolidation, merger or other
reorganization is approved, continue to hold more than seventy
percent (70%) of the outstanding voting securities of the
surviving entity immediately after the consolidation, merger, or
other reorganization; and (b) any such consolidation,
merger or other reorganization which is effected pursuant to the
terms of a Merger Sale Agreement which provides that the
consolidation, merger or other reorganization contemplated by
the Merger Sale Agreement will not constitute a Change in
Control for purposes of this Plan.
1.27 Merger Sale Agreement means an
agreement between the Company and any one or more other persons,
firms, corporations or other entities (which are not Affiliates
of the Company) providing for a consolidation, merger or other
reorganization in which the holders of Common Stock of the
Company immediately prior to the Companys execution of
such agreement do not hold more than seventy percent (70%) of
the outstanding voting securities of the surviving entity
immediately after the consummation of the consolidation, merger,
or other reorganization contemplated by such agreement.
1.28 Non-Qualified Stock Option means an
Option that is not an Incentive Stock Option.
1.29 Option means an option to purchase
Shares granted pursuant to Article 4 of the Plan or, solely
for purposes of Section 4.08(b), granted under any other
stock option plan maintained by the Company.
1.30 Option Cash Out Payment means an
amount, payable to a Participant that is the holder of Options,
equal to the amount by which: (a)(i) the greatest of:
(A) the Fair Market Value of one Share, determined as of
the date a Merger Sale Agreement is executed by the Company;
(B) the Fair Market Value of one Share, determined as of
the day immediately preceding the date a Change in Control
occurs; and (C) the amount, if any, of cash payable with
respect to one Share in connection with the consummation of the
Change in Control as provided for by the certificate filed with
the Delaware Secretary of State to effect the Change in Control;
multiplied by (ii) the total
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number of Shares which the Participant is entitled to acquire
pursuant to all Options (whether or not such Options are then
currently exercisable pursuant to the provisions of the
instruments containing the terms of the Option Awards held by
the Participant) held by the Participant on the date the Change
in Control is effective; exceeds (b) the aggregate amount
which the Participant would be required to pay to the Company in
connection with the purchase by the Participant of all Shares
which the Participant is entitled to purchase pursuant to the
exercise of all unexpired and unexercised Options held by the
Participant as of the date the Change in Control is effective
(whether or not such Options are then currently exercisable
pursuant to the provisions of the instruments containing the
terms of the Option Awards held by the Participant).
1.31 Participant means any Eligible
Person who holds an Award granted under the Plan, and any
successor, permitted transferee or Beneficiary that succeeds to
such individuals interest in such Award.
1.32 Performance Goals means the
performance goals established by the Committee in connection
with Awards granted to Eligible Persons under Article 6,
which performance goals are used to determine whether any
payment will be made to Eligible Persons in connection with
Awards granted under Article 6 and, if any such payments
are to be made, the amount of the payments.
1.33 Performance Period means the period
established by the Committee for measuring whether, and to what
extent, any Performance Goals established in connection with any
Award granted under Article 6 hereof have been met.
1.34 Performance Shares means Shares
that may be issued and delivered pursuant to an Award made to an
Eligible Person under Article 6, depending on the
achievement, or the level of achievement, of one or more
Performance Goals within such period, as provided in
Article 6.
1.35 Performance Units means Units
credited to an Eligible Person at the beginning of a Performance
Period pursuant to an Award made to such individual under
Article 6, and any Dividend Equivalent Units that are
credited to the individual with respect to such Units during
such Performance Period, payment with respect to which Units and
related Dividend Equivalent Units depends on the achievement, or
the level of achievement, of one or more Performance Goals
within such period, as provided in Article 6.
1.36 Plan means the Gibraltar
Industries, Inc. 2005 Equity Incentive Plan, as set forth herein
and as amended from time to time hereafter.
1.37 Pro Rata Portion means, with
respect to any portion of any Award of Restricted Shares or
Restricted Units made hereunder, with respect to any portion of
any Award of Performance Shares or Performance Units made
hereunder, or with respect to any portion of any Award of Rights
made hereunder, the percentage determined by dividing:
(a) the number of full and partial calendar months in the
period beginning on the first day of: (i) the Restricted
Period established for such portion of the Restricted Shares or
Restricted Units so granted; (ii) the Performance Period
established for such portion of the Performance Shares or
Performance Units so awarded; or (iii) the Appreciation
Period established for such portion of the Rights so awarded,
and ending on the date the Eligible Persons employment
with or service to the Company and each of its Affiliates is
terminated; by (b) the total number of full and partial
calendar months in such Restricted Period, in such Performance
Period, or in such Appreciation Period, whichever the case may
be.
1.38 Restricted Period means the period
of time during which Restricted Shares or Restricted Units are
subject to Restrictions as set forth in Article 5.
1.39 Restricted Shares means Shares
which are granted subject to Restrictions pursuant to
Article 5.
1.40 Restricted Units means Units
credited to an Eligible Person which are subject to Restrictions
at the beginning of a Restricted Period pursuant to an Award
made to such Eligible Person under Article 5, and any
Dividend Equivalent Units that are credited to the Eligible
Person with respect to such Units during such Restricted Period
as provided in Article 5.
1.41 Restrictions means the restrictions
to which Restricted Shares or Restricted Units are subject under
the provisions of Section 5.02.
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1.42 Retirement means the termination of
a Participants employment with or service to the Company
and all of its Affiliates, provided that such termination occurs
after: (a) the Participant has either: (i) been
continuously employed by or provided services (as a non-employee
director, consultant or other service provider) to the Company
or any of its Affiliates for a period of at least five
(5) years and attained at least age sixty (60); or
(ii) attained at least age sixty-five (65); and
(b) the Participant has given at least thirty
(30) days advance written notice to the Company or, if
applicable, the Affiliate of the Company by whom the Participant
is employed or for whom the Participant is providing services,
which notice states that the Participant will retire from his or
her employment with or service to the Company and its Affiliates.
1.43 Right means an Award which enables
the Eligible Person to whom the Award has been made to receive
Shares having a Fair Market Value equal to an amount which is
based on the amount by which the Fair Market Value of one Share
at the end of the Appreciation Period exceeds the Base Price of
one Share at the beginning of the Appreciation Period.
1.44 Right Cash Out Payment means an
amount, payable to a Participant that is the holder of Rights,
equal to the amount by which: (a)(i) the greatest of:
(A) the Fair Market Value of one Share, determined as of
the date a Merger Sale Agreement is executed by the Company;
(B) the Fair Market Value of one Share, determined as of
the day immediately preceding the date a Change in Control
occurs; and (C) the amount, if any, of cash payable with
respect to one Share in connection with the consummation of the
Change in Control as provided for by the certificate filed with
the Delaware Secretary of State to effect the Change in Control;
multiplied by (ii) the total number of Shares represented
by the Rights held by the Participant; exceeds (b) the
aggregate Base Price of the Shares used to calculate the value
of the Rights held by the Participant, determined, with respect
to each Right, as of the date the Right was granted to the
Participant and adjusted, if applicable, pursuant to
Section 3.02.
1.45 Share means a share of Common Stock.
1.46 Termination of Service means:
(a) with respect to any Employee, his or her ceasing to be
employed by the Company and each of its Affiliates;
(b) with respect to any non-employee director, his or her
ceasing to serve as a member of the Board of Directors; and
(c) with respect to any consultant or other service
provider, that is a natural person, the termination of all
consulting or other service providing arrangements which such
consultant or service provider has with the Company and each
Affiliate of the Company.
1.47 Unit means a unit of measurement
equivalent to one Share, with none of the attendant rights of a
shareholder of such Share, (including among the rights which the
holder of a Unit does not have are the right to vote such Share
and the right to receive dividends thereon), except to the
extent otherwise specifically provided herein.
ARTICLE 2.
AWARDS
2.01 Form of Awards. Awards under the
Plan may be made in the form of Options, Restricted Shares,
Restricted Units, Performance Shares, Performance Units and
Rights. An Award in any of the foregoing forms may be granted to
any Eligible Person or to any group of Eligible Persons, upon
terms and conditions that differ from the terms and conditions
upon which any other Awards in the same form are made to other
Eligible Persons or groups of Eligible Persons.
2.02 Written Instrument. Each Award made
to an Eligible Person under the Plan shall be evidenced by a
written instrument in such form as the Committee shall
prescribe, setting forth the terms and conditions of the Award.
The instrument evidencing the grant of any Award hereunder shall
specify that the Award shall be subject to all of the terms and
provisions of the Plan as in effect from time to time but
subject to the limitation on amendments set forth in
Section 11.09 of the Plan.
2.03 Surrender and Exchange of
Awards. The Committee may, in its discretion, grant
an Award to a Participant who has previously been granted an
Award under the Plan or an award under any other employee
compensation or benefit plan maintained by the Company or any of
its Affiliates (any such previously granted Award or award being
hereinafter referred to as a Prior Award), in
exchange for the surrender and cancellation of such Prior Award
or any portion thereof. The new Award so granted may, in the
discretion of the Committee, be in a form which is
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different than that of the Prior Award surrendered, and may be
granted subject to terms and conditions that differ from those
to which the surrendered Prior Award were subject.
Notwithstanding the foregoing, no grant of a new Award in
exchange for a Prior Award may be made hereunder unless:
(a) the aggregate fair value of the new Award does not
exceed the aggregate fair value of the Prior Award, determined
as of the time the new Award is granted; and (b) the grant
of the new Award would not constitute a repricing of
any Option or would not otherwise be treated as a material
revision of the Plan.
ARTICLE 3.
SHARES
SUBJECT TO THE PLAN
3.01 Shares Available for Awards. Shares
distributed in respect of Awards made under the Plan may be
authorized but unissued Shares, Shares held in the treasury of
the Company or Shares purchased by the Company on the open
market at such time or times and in such manner as it may
determine. The Company shall be under no obligation to issue or
acquire Shares in respect of an Award made under the Plan before
the time when delivery of Shares is due under the terms of the
Award. The number of Shares available for distribution in
respect of Awards made under the Plan shall be subject to the
following limitations:
(a) Subject to the provisions of Section 3.02 hereof,
effective as of May 19, 2005 (the date on which this Plan
became effective) the aggregate number of Shares that were
authorized to be issued in respect of Awards made under the Plan
was limited to two million two hundred fifty thousand
(2,250,000) Shares. Effective as of January 1, 2009, in
addition to the number of Shares available for issuance pursuant
to the terms of the Plan as of December 31, 2008, an
additional two million two hundred fifty thousand (2,250,000)
Shares may be issued in respect of Awards made under the Plan
and shall be reserved for issuance pursuant to the terms of the
Plan. Accordingly, the total number of Shares which may be
issued pursuant to Awards issued under the terms of the Plan
shall, subject to the provisions of Section 3.02 hereof, be
equal to four million five hundred thousand (4,500,000) Shares.
The maximum number of Shares that are available for issuance
pursuant to Awards of Restricted Units shall not be reduced by
Awards of Restricted Units that are payable only in cash in an
amount equal to the Fair Market Value of the Restricted Units
which are the subject of such Awards. The maximum aggregate
number of Shares that may be issued pursuant to all Awards of
Incentive Stock Options and Rights granted under the Plan shall
not exceed nine hundred thousand (900,000) Shares.
(b) Upon the grant of any Award, the overall aggregate
number of Shares available for further Awards under the Plan,
and if the Award so granted was in a form subject to a
limitation on the aggregate number of Shares available for
Awards in that form, the aggregate number of Shares available
for further Awards under the Plan in that form, shall be reduced
by the number of Shares subject to the Award so granted.
(c) There shall be added back to the aggregate number of
Shares available for the grant of Awards under the Plan, as
determined under (a) and (b) above, the following:
(i) any Shares as to which an Option granted hereunder has
not been exercised at the time of its expiration, cancellation
or forfeiture; (ii) any Shares included in any other form
of Award granted to an Eligible Person hereunder, to the extent
that the persons right to receive such Shares, or any cash
payment in settlement of such Award, is forfeited;
(iii) any Shares represented by Restricted Units granted
hereunder as to which payment is made in cash instead of by the
issuance and delivery of Shares; and (iv) any Shares
subject to an Option granted hereunder, or covered by any other
form of Award made hereunder, to the extent such Option or other
Award is surrendered in exchange for any other Award made
hereunder.
3.02 Certain Adjustments to Shares. In
the event of any change in the number of outstanding Shares of
Common Stock without receipt of consideration by the Company
resulting from any stock dividend, stock split,
recapitalization, reorganization, merger, consolidation,
split-up,
combination or exchange of Shares, or any rights offering to
purchase Shares of Common Stock at a price substantially below
fair market value, or any similar change affecting the Shares of
Common Stock: (a) the maximum aggregate number and kind of
Shares specified herein as available for the grant of Awards, or
for the grant of any particular form of Award, under the Plan;
(b) the number and kind of Shares that may be issued and
delivered to Participants upon the exercise of any Option, or in
payment with respect to any Award of Restricted Shares or
Performance Shares, that is outstanding at the time of such
change; (c) the number and kind of Shares represented by
any Restricted Units, Performance Units, Rights or Dividend
Equivalent
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Units that are outstanding at the time of such change;
(d) the number of Shares represented by any Award of
Rights; (e) the exercise price per share of any Options
granted hereunder that are outstanding at the time of such
change; and (f) the Base Price established with respect to
any Rights granted hereunder that are outstanding at the date of
such change, shall be appropriately adjusted consistent with
such change in such manner as the Compensation Administration
Committee, in its sole discretion, may deem equitable to prevent
substantial dilution or enlargement of the rights granted to, or
available for, the Participants hereunder.
In the case of any outstanding Incentive Stock Option, any such
change shall be made in the manner that satisfies the
requirements that must be met under Section 424 of the Code
in order for such change not to be treated as a
modification of such Option as defined under
Section 424 of the Code.
The Committee shall give notice to each Participant of any
adjustment made pursuant to this Section and, upon such notice,
such adjustment shall be effective and binding for all purposes.
3.03 Listing and Qualification of
Shares. The Company, in its discretion, may
postpone the issuance, delivery, or distribution of Shares with
respect to any Award until completion of such stock exchange
listing or other qualification of such Shares under any state or
federal law, rule or regulation as the Company may consider
appropriate, and may require any Participant to make such
representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of the
Shares in compliance with applicable laws, rules and regulations.
ARTICLE 4.
OPTIONS
4.01 Awards of Options. Subject to the
limitations set forth in Article 3 above and to the other
terms and conditions of the Plan, Options may be granted under
the Plan to Eligible Persons for the purchase of such number of
Shares, at such times and, upon such terms and conditions, as
the Committee in its discretion may determine.
4.02 Type of Options. Each Option
granted hereunder shall be identified in the instrument
evidencing such grant as either: (a) an Option intended to
be treated as an Incentive Stock Option; or (b) an Option
that shall be treated as a Non-Qualified Stock Option.
4.03 Term of Options. The period of time
during which an Option may be exercised shall be such period of
time as is determined by the Committee and specified in the
instrument setting forth the terms of the Option Award; provided
that, in no event may the period of time during which an Option
may be exercised exceed ten (10) years from the Date of
Grant of the Option. Notwithstanding any other provision in this
Plan to the contrary, no Option may be exercised after its
expiration.
4.04 Exercise of Options. Each Option
granted hereunder shall become exercisable, in whole or in part,
at such time or times during its term as the instrument
evidencing the grant of such Option shall specify. To the extent
that an Option has become exercisable, it may be exercised
thereafter, in whole or in part, at any time or from time to
time prior to its expiration, as to any or all Shares as to
which the Option has become and remains exercisable, subject to
the provisions of Section 4.05 below.
4.05 Termination of Service. Except as
the instrument evidencing the grant of an Option may otherwise
provide, the portion of any outstanding Option held by an
Eligible Person on the date of his or her Termination of Service
that has not become exercisable prior to such date, and the
portion of such Option which was exercisable but had not been
exercised prior to the date of the Eligible Persons
Termination of Service, shall be forfeited on such date.
Notwithstanding the foregoing, if the Committee so determines,
in its discretion, the instrument evidencing the grant of an
Option may provide that the portion of the Option that is
exercisable at the time of the Eligible Persons
Termination of Service will continue to be exercisable, and that
the portion of such Option that is not exercisable at such time
will become exercisable in accordance with the terms of the
Option and remain exercisable thereafter, during such period of
time after the date on which the Eligible Persons
Termination of Service occurs (but not beyond the expiration of
the term of the Option), in such circumstances and subject to
such terms and conditions, as are specified in such instrument.
However, to the extent that any Option granted hereunder to an
Employee as an Incentive Stock Option is exercised more than
three months after the date of such Employees Termination
of
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Service for any reason other than Disability, or more than one
year after such date if the Employees Termination of
Service occurred because of Disability, the Option shall be
treated as a Non-Qualified Stock Option for purposes of the Plan.
4.06 Exercise Price and Method of
Exercise. The price at which Shares may be
purchased upon any exercise of an Option shall be the price per
share determined by the Committee and specified in the
instrument evidencing the grant of such Option; provided that,
in no event shall the exercise price per Share be less than:
(a) the Fair Market Value of a Share determined as of the
Date of Grant of the Option; or (b), if greater, the par value
of a Share.
An Option shall be exercised by delivery of a written notice of
exercise, in a form satisfactory to the Committee, to the
Company at its principal business office and addressed to the
attention of the Companys Secretary or such other person
as the Companys Secretary may have designated to receive
such notice. The notice shall specify the number of Shares with
respect to which the Option is being exercised. The notice shall
be accompanied by payment of the exercise price of the Shares
for which the Option is being exercised, which payment shall be
made under one or more of the methods of payment provided in
Section 4.07 below.
4.07 Payment. Payment of the exercise
price for Shares purchased upon the exercise of an Option shall
be made by one, or by a combination of any, of the following
methods: (a) in cash, which may be paid by check or other
instrument acceptable to the Company, or by wire transfer of
funds, in each case in United States dollars; (b) if
permitted by the Committee and subject to any terms and
conditions it may impose on the use of such methods, by:
(i) the delivery to the Company of other Shares owned by
the Participant; provided that such shares have been owned by
the Participant for the requisite period necessary to avoid a
charge to the Companys earnings; or (ii) the
surrender to the Company of Shares that otherwise would have
been delivered to the Participant upon exercise of the Option;
(c) to the extent permissible under applicable law, through
any cashless exercise sale and remittance procedure that the
Committee in its discretion may from time to time approve;
(d) to the extent permissible under applicable law and
permitted by the Committee, by the execution by the Participant
and delivery to the Company of a promissory note or other
instrument evidencing the Participants agreement to pay
part or all of the Option exercise price on a deferred or
installment payment basis, upon such terms and conditions
(including, without limitation, terms requiring Shares purchased
upon the exercise of the Option to be pledged to the Company to
secure payment of any outstanding balance of the option exercise
price) as the Committee shall require; or (e) any other
method of payment as the Committee may from time to time
approve.
For purposes of determining the portion of the exercise price
payable upon the exercise of an Option that will be treated as
satisfied by the delivery or surrender of Shares pursuant to
clause (b) (i) or (ii) above, Shares so delivered or
surrendered shall be valued at their Fair Market Value
determined as of the business day next preceding the date on
which the Option is exercised.
4.08 Incentive Stock
Options. Notwithstanding any other provisions of
the Plan, Incentive Stock Options granted under the Plan shall
be subject to the following provisions:
(a) No Incentive Stock Option may be granted under the Plan
after February 9, 2015.
(b) To the extent that the aggregate Fair Market Value of
Shares with respect to which Incentive Stock Options granted
under the Plan and under all other stock option plans maintained
by the Company are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, the
Incentive Stock Options so exercisable shall be treated as
Non-Qualified Stock Options. For purposes of the foregoing, the
Fair Market Value of Shares as to which any Incentive Stock
Option may be exercised shall be determined as of the Date of
Grant of such Option. The determination of whether the
limitation set forth in the first sentence of this
Section 4.08(b) applies with respect to any Incentive Stock
Option granted under the Plan shall be made in accordance with
applicable provisions of Section 422 of the Code and the
regulations issued thereunder.
(c) No Incentive Stock Option shall be granted to an
Employee if, as of the Date of Grant of such Option, such
Employee owns stock possessing more than ten percent of the
total combined voting power of all classes of stock of the
Company, unless: (i) the exercise price per Share under
such Option is at least 110% percent of the Fair Market Value of
a Share determined as of the Date of Grant of such Option; and
(ii) such Option is not exercisable after the expiration of
five (5) years from the Date of Grant of such Option. If an
Option, designated as an Incentive Stock Option, is granted to
an Employee who owns more than ten percent (10%) of the total
combined voting power of all
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classes of stock of the Company and either the price per Share
at which the Option is exercisable or the date on which the
Option expires does not satisfy the limitations specified above,
such Incentive Stock Option shall be treated as a Non-Qualified
Stock Option.
(d) The instrument evidencing the grant of any Incentive
Stock Option shall require that if any Shares acquired upon the
exercise of such Option are disposed of within 2 years from
the Date of Grant of such Option, or within one year from the
date as of which the Shares disposed of were transferred to the
Participant pursuant to the exercise of such Option, the
Participant shall give the Company written notice of such
disposition, within ten days following the date of such
disposition.
4.09 Other Option Provisions. The
instrument evidencing the grant of any Option hereunder may
contain such other terms and conditions, not inconsistent with
the provisions of the Plan or any applicable law, as the
Committee may determine.
4.10 Rights of a Shareholder. Upon the
exercise by a Participant of an Option or any portion thereof in
accordance with the Plan, the provisions of the instrument
evidencing the grant of such Option and any applicable rules and
regulations established by the Committee and the issuance to the
Participant of a certificate representing the Shares with
respect to which the Option has been exercised, the Participant
shall have all of the rights of a stockholder of the Company
with respect to the Shares issued as a result of such exercise.
Prior to the issuance to a Participant of a certificate
representing Shares issuable to the Participant upon his or her
exercise of an Option, the Participant shall not have any rights
as a stockholder of the Company with respect to such Shares.
ARTICLE 5.
RESTRICTED
SHARES AND RESTRICTED UNITS
5.01 Awards of Restricted Shares and Restricted
Units. Subject to the limitations set forth in
Article 3 and to the other terms and conditions of the
Plan, Restricted Shares and Restricted Units may be granted to
such Eligible Persons, at such times, and in such amounts, as
the Committee may determine in its discretion. In addition to
Awards of Restricted Shares or Restricted Units which may be
made to any Eligible Person in recognition of services provided
to the Company and its Affiliates or as an incentive for such
Eligible Person to continue to contribute to the profitability
and growth of the Company and its Affiliates, the Company has,
effective as of May 19, 2005 as amended December 30,
2008, adopted a framework under which a specific type of
Restricted Unit Awards will be made, which framework is known as
the Gibraltar Industries, Inc. Management Stock Purchase Plan
(the MSPP). The MSPP is intended to be treated as an
integral part of this Plan and provides for the granting of
Awards of Restricted Units to Eligible Persons in consideration
for and recognition of the agreement of such Eligible Persons to
authorize the Company to credit Restricted Units to an account
established for the benefit of such Eligible Persons under the
MSSP in lieu of the payment to such Eligible Persons of a
portion of the base salary
and/or a
portion of the annual incentive bonus (in the case of an
Eligible Person that is an Employee) or all or part of the
Director fees (in the case of an Eligible Person that is a
member of the Companys Board of Directors) which such
Eligible Persons would otherwise be entitled to receive from the
Company and its Affiliates.
5.02 Restrictions and Restricted
Period. At the time of each grant of Restricted
Shares or Restricted Units to any Participant, the Committee
shall establish a period of time within which the Restricted
Shares or Restricted Units covered by such grant (and the
Participants right to receive payment with respect to such
Restricted Units) may not be sold, assigned, transferred (other
than a transfer to the Participants Beneficiary occurring
by reason of the Participants death), made subject to
gift, or otherwise disposed of, or mortgaged, pledged or
otherwise encumbered, whether voluntarily or by operation of
law. The Committee in its discretion may prescribe a separate
Restricted Period for any specified portion of the Restricted
Shares or Restricted Units granted pursuant to any Award.
5.03 Rights While Restricted Shares Remain Subject to
Restrictions. Restricted Shares granted to a
Participant hereunder may be issued to the Participant as of the
Date of Grant as uncertificated shares or as Shares represented
by a stock certificate bearing a legend or legends making
appropriate references to the Restrictions. Until the
Restrictions which apply to Restricted Shares lapse in
accordance with the provisions of Section 5.05 below or
Section 9.01(c), the Restricted Shares granted to a
Participant which are not certificated shall be held in the
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Participants name in a bookkeeping account maintained by
the Company and Restricted Shares granted to a Participant and
represented by a stock certificate shall continue to bear the
legend or legends making reference to the Restrictions. A
separate account shall be maintained for all Restricted Shares
granted to a Participant with a Restricted Period ending on the
same date.
Except for the Restrictions which apply to Restricted Shares,
and subject to the forfeiture provisions applicable under
Section 5.06 below, a Participant shall have, with respect
to all Restricted Shares so held for his account, all of the
rights of a stockholder of the Company, including full voting
rights with respect to such Shares and the right to receive
currently with respect to the Participants Restricted
Shares all dividends and other distributions payable generally
on the Companys Shares. If any dividends or distributions
so payable are paid in Shares, the Shares paid as a dividend or
distribution with respect to a Participants Restricted
Shares shall be subject to the same Restrictions and provisions
relating to forfeiture as apply to the Restricted Shares with
respect to which they were paid. Such stock dividend Shares
shall themselves be treated as Restricted Shares, and shall be
credited to the same account which the Company maintains for
those Restricted Shares of the Participant with respect to which
such stock dividends or distributions were paid.
Notwithstanding the foregoing, if the instrument evidencing the
grant of any Restricted Shares to a Participant so provides, all
cash dividends and distributions payable generally on the
Companys Shares that are otherwise payable with respect to
the Restricted Shares granted to the Participant shall not be
paid currently to the Participant but instead, shall be applied
to the purchase of additional Shares for the Participants
account. The additional Shares so purchased shall be subject to
the same Restrictions and provisions relating to forfeiture as
apply to the Restricted Shares with respect to which they were
paid. Such additional Shares shall themselves be treated as
Restricted Shares, and shall be credited to the same account
which the Company maintains for those Restricted Shares of the
Participant with respect to which such dividends or
distributions were paid. The purchase of any such additional
Shares shall be made in accordance with such other procedure as
may be specified in the instrument evidencing the grant of the
Restricted Shares on which such dividends are paid.
5.04 Rights While Restricted Units Remain Subject to
Restrictions. No Shares shall be issued at the time
an award of Restricted Units is made. Except as provided in the
following paragraph or otherwise provided by the instrument
evidencing an Award of Restricted Units, a Participant that is
the holder of an Award of Restricted Units shall not have any
rights as a shareholder with respect to such Restricted Units.
Restricted Units granted to a Participant hereunder shall be
credited to a bookkeeping account maintained by the Company for
the Participant. A separate account shall be maintained for all
Restricted Units granted to a Participant with a Restricted
Period ending on the same date and for all Dividend Equivalent
Units that are to be credited to such account in accordance with
the next following paragraph.
If any dividends or other distributions payable on the
Companys Shares are paid in Shares during any period that
a Participant holds an Award of Restricted Units, as of the
applicable Dividend Payment Date, a number of additional
Restricted Units shall be credited to each account established
for the Participant to reflect the number of Restricted Units
held by the Participant as of such Dividend Payment Date. The
number of additional Restricted Units to be credited shall be
determined by first multiplying: (a) the total
number of Restricted Units standing to the Participants
credit in such account on the day immediately preceding such
Dividend Payment Date (including all Dividend Equivalent Units
credited to such account on all previous Dividend Payment
Dates); by (b) the per share dollar amount of the dividend
paid on such Dividend Payment Date; and then,
(c) dividing the resulting amount by the Fair Market Value
of one Share on such Dividend Payment Date. Dividend Equivalent
Units awarded pursuant to this paragraph to a Participant that
holds an Award of Restricted Units shall have the same
Restricted Period as the Restricted Units with respect to which
such Dividend Equivalent Units have been awarded.
5.05 Lapse of Restrictions and
Payment. Upon the expiration of the Restricted
Period for any Restricted Shares or Restricted Units granted to
a Participant hereunder but subject to the provisions of
Section 5.06 below, the Restrictions applicable to such
Restricted Shares or Restricted Units shall lapse, and payment
with respect to such Restricted Shares or Restricted Units
(including any related Dividend Equivalent Units) shall be made
in accordance with the following provisions:
(a) In the case of Restricted Shares, payment shall be made
by delivery to the Participant of a stock certificate for the
number of such Restricted Shares, free and clear of all
Restrictions to which such shares were subject.
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However, if the Restricted Shares with respect to which the
applicable Restrictions have lapsed includes a fractional Share,
payment for such fractional Share shall be made in cash, in an
amount equal to the Fair Market Value of such fractional Share
determined as of the date on which such Restrictions lapsed.
Delivery of such stock certificate and any such cash payment
shall be made to the Participant as soon as practicable
following the lapse of the applicable Restrictions.
(b) In the case of Restricted Units (including related
Dividend Equivalent Units), payment shall be made: (i) in
all cases other than Restricted Units issued in connection with
the MSPP, by the issuance and delivery to the Participant of a
stock certificate for a number of Shares equal to the number of
whole Restricted Units and related Dividend Equivalent Units
with respect to which the applicable Restrictions have lapsed,
and (ii) by payment in cash for any fractional Restricted
Unit payable as a result of the lapse of such Restrictions, in
an amount equal to the Fair Market Value of such fractional
Restricted Unit determined as of the date as of which such
Restrictions lapsed. In the case of Restricted Units issued
pursuant to the terms of the MSPP, payment shall be made, in
cash, in an amount and at the time provided for in the MSPP.
Issuance of certificates for Shares shall be made in such manner
and at such time or times as provided in such instrument. Unless
otherwise provided by the instrument evidencing a grant of
Restricted Units, payment with respect to any part or all of a
Participants Restricted Units (including related Dividend
Equivalent Units) may be deferred, at the Participants
election, upon such terms and conditions as are specified by the
Participant, in writing, subject to the restrictions on deferral
of compensation contained in Code Section 409A.
5.06 Termination of Service. Except as
the instrument evidencing the grant of Restricted Shares or
Restricted Units may otherwise provide, upon an Eligible
Persons Termination of Service for any reason prior to the
expiration of the Restricted Period which is in effect for any
Restricted Shares or Restricted Units (and related Dividend
Equivalent Units) standing to his or her credit immediately
prior to such Termination of Service, the Eligible Persons
right to receive payment with respect to such Restricted Shares,
Restricted Units and Dividend Equivalent Units shall be
forfeited and cancelled as of the date of such Termination of
Service, and no payment of any kind shall be made with respect
to such Restricted Shares, Restricted Units and Dividend
Equivalent Units.
Notwithstanding the foregoing, if the Committee so determines,
in its discretion, the instrument evidencing the Award of such
Restricted Shares or Restricted Units may provide that if the
Eligible Persons Termination of Service occurs prior to
the end of the Restricted Period established for such Restricted
Shares or Restricted Units as a result of the Eligible
Persons death, Disability or Retirement (but not for any
other reason), payment will be made with respect to all or a Pro
Rata Portion of such Restricted Shares or Restricted Units and
any related Dividend Equivalent Units. In such case, only the
Eligible Persons right to receive payment with respect to
any remaining portion of the Restricted Shares or Restricted
Units (and related Dividend Equivalent Units) for which such
Restricted Period was established shall be cancelled and
forfeited. Any payment required to be made with respect to an
Eligible Persons Restricted Shares or Restricted Units
(and related Dividend Equivalent Units) pursuant to this
paragraph shall be made as soon as practicable after the date of
such Eligible Persons Termination of Service, and shall be
made in the manner specified in Section 5.05.
Notwithstanding the provisions of Section 5.03 or of the
above and notwithstanding the absence of the provisions of this
paragraph from provisions of any instrument containing the
provisions of an Award issued prior to the effective date of
this Amendment and Restatement, if an Eligible Persons
Termination of Service occurs, for any reason, prior to the
expiration of the Restricted Period which is in effect for an
Award of Restricted Shares, the Eligible Person shall, upon such
Termination of Service, be deemed to forfeit his right to all
cash dividends received with respect to the portion of the
Restricted Shares previously awarded to such Eligible Person
with respect to which the Restrictions have not lapsed. In
connection with the forfeiture by an Eligible Person of the cash
dividends received by the Eligible Person with respect to the
Restricted Shares previously awarded to the Eligible Person with
respect to which the Restrictions have not lapsed, the Eligible
Person shall be obligated to pay to the Company, no later than
thirty (30) days following such Eligible Persons
Termination of Service, the amount of the dividends received by
such Eligible Person which is deemed to be forfeited pursuant to
the provision of the preceding sentence. In connection with the
foregoing, if, pursuant to the provisions of the preceding
paragraph, the Committee has provided in the instrument
evidencing the Award of Restricted Shares that the Eligible
Persons right to receive payment for all or a Pro Rata
portion of the Restricted Shares will not be forfeited if the
Eligible Persons Termination of Service occurs prior to
the end of the Restricted Period established for such Restricted
Shares as a
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result of the Eligible Persons death, Disability or
Retirement (but not for any other reason), the Eligible Person
will not forfeit his right to all cash dividends received with
respect to the portion of Restricted Shares as to which the
Restrictions have not lapsed and such Eligible Person shall be
entitled to retain all or a portion of such cash dividends.
5.07 Notice of Code Section 83(b)
Election. A Participant who files an election under
Section 83(b) of the Code to include in gross income the
Fair Market Value of any Restricted Shares granted hereunder
while such Shares are still subject to Restrictions shall
furnish the Company with a copy of the election so filed by the
Participant, within ten days of the filing of such election with
the Internal Revenue Service.
ARTICLE 6.
PERFORMANCE
SHARES AND PERFORMANCE UNITS
6.01 Awards of Performance Shares and Performance
Units. Subject to the limitations set forth in
Article 3 and to the other terms and conditions of the
Plan, Performance Shares or Performance Units may be granted to
such Eligible Persons, at such times, in such amounts, and upon
such terms and conditions, as the Committee may determine in its
discretion. Performance Shares and Performance Units shall be
granted in accordance with the provisions set forth below.
6.02 Establishment of Performance Goals and
Performance Targets. In connection with each Award
of Performance Shares or Performance Units, the Committee shall
establish in writing, and the instrument evidencing the grant of
such Award shall specify: (a) the Performance Goal or Goals
and the Performance Period that will apply with respect to such
Award; (b) the level or levels of achievement of the
Performance Goal or Goals that must be met in order for payment
to be made with respect to the Award; (c) the number of
Performance Shares that will be issued and delivered to the
recipient of the Award, or the percentage of the Performance
Units (and any related Dividend Equivalent Units) credited to
the recipient in connection with the Award as to which payment
will be made, if the Performance Goal or Goals applicable to
such Award: (i) have been fully achieved; (ii) have
been exceeded; or (iii) have not been fully achieved but
have been achieved at or beyond any minimum or intermediate
level of achievement specified in the instrument evidencing the
grant of such Award; and (d) such other terms and
conditions pertaining to the Award as the Committee in its
discretion may determine. In connection with any such Award made
to any Covered Executive, the matters described in the preceding
sentence shall be established within such period of time as may
be permitted by the regulations issued under Section 162(m)
of the Code.
6.03 Rights While Performance Shares Remain subject
to Achievement of Performance Goals. Performance
Shares granted to a Participant hereunder may be issued to the
Participant as of the Date of Grant as uncertificated shares or
as Shares represented by a stock certificate bearing a legend or
legends making appropriate reference to the restrictions on
transferability of such Performance Shares as hereinafter set
forth. Until the Performance Period which applies to the
Performance Shares expires, the Performance Shares granted to a
Participant which are not certificated shall be held in the
Participants name in a bookkeeping account maintained by
the Company and Performance Shares granted to a Participant and
represented by a stock certificate shall continue to bear the
legend or legends making reference to the restrictions on
transferability of such Performance Shares as hereinafter set
forth.
Until the Performance Period which applies to an award of
Performance Shares has expired, the Performance Shares shall not
be sold, assigned, transferred (other than a transfer to the
Participants Beneficiary occurring by reason of the
Participants death), made subject to gift or otherwise
disposed of, mortgaged, pledged or otherwise encumbered, whether
voluntarily or by operation of law. A separate account shall be
maintained for all Performance Shares granted to a Participant
with a Performance Period ending on the same date.
Except for the restrictions on transferability which apply to
Performance Shares, and subject to the forfeiture provisions
applicable under Section 6.10 below, a Participant shall
have, with respect to all Performance Shares so held for his
account, all of the rights of a stockholder of the Company,
including full voting rights with respect to such Shares and the
right to receive currently with respect to the
Participants Performance Shares, all dividends and other
distributions payable generally on the Companys Shares. If
any dividends or distributions so payable are paid in Shares,
the Shares paid as a dividend or distribution with respect to a
Participants Performance Shares shall be subject to the
same Performance Goals and provisions relating to forfeiture as
apply to the Performance Shares with
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respect to which they were paid. Such stock dividend Shares
shall themselves be treated as Performance Shares, and shall be
credited to the same account which the Company maintains for
those Performance Shares of the Participant with respect to
which such stock dividends or distributions were paid.
Notwithstanding the foregoing, if the instrument evidencing the
grant of any Performance Shares to a Participant so provides,
all cash dividends and distributions payable generally on the
Companys Shares that are otherwise payable with respect to
the Performance Shares granted to the Participant shall not be
paid currently to the Participant but instead, shall be applied
to the purchase of additional Shares for the Participants
account. The additional Shares so purchased shall be subject to
the same Performance Goals and provisions relating to forfeiture
as apply to the Performance Shares, and shall be credited to the
same account which the Company maintains for those Performance
Shares of the Participant with respect to which such dividends
or distributions were paid. The purchase of any such additional
Shares shall be made in accordance with such other procedure as
may be specified in the instrument evidencing the grant of the
Performance Shares on which such dividends are paid.
6.04 Rights While Performance Units Remain Subject to
Achievement of Performance Goals. No Shares shall
be issued at the time an Award of Performance Units is made.
Except as provided in the following paragraph or otherwise
provided in the instrument evidencing an Award of Performance
Units, a Participant that is the holder of an Award of
Performance Units shall not have any rights of a shareholder
with respect to such Performance Units. Performance Units
granted to a Participant hereunder shall be credited to a
bookkeeping account maintained by the Company for the
Participant. A separate account shall be maintained for all
Performance Units granted to a Participant with a Performance
Period ending on the same date and for all Dividend Equivalent
Units that are to be credited to such account in accordance with
the following paragraph.
If any dividends or other distributions payable on the
Companys Shares are paid in Shares during any period that
a Participant holds an Award of Performance Units, as of the
applicable Dividend Payment Date, a number of additional
Performance Units shall be credited to each account established
for the Participant to reflect the number of Performance Units
held by the Participant as of such Dividend Payment Date. The
number of such additional Performance Units to be credited shall
be determined by first multiplying: (a) the total
number of Performance Units standing to the Participants
credit in such account on the day immediately preceding such
Dividend Payment Date (including all Dividend Equivalent Units
credited to such account on all previous Dividend Payment
Dates); by (b) the per Share dollar amount of the dividend
paid on such Dividend Payment Date; and then,
(c) dividing the resulting amount by the Fair Market Value
of one Share on such Dividend Payment Date. Dividend Equivalent
Units awarded pursuant to this paragraph to a Participant that
holds an Award of Performance Units shall have the same
Performance Goals and Performance Period as the Performance
Units with respect to which such Dividend Equivalent Units have
been awarded.
6.05 Performance Goals for Covered
Executives. In the case of any Award of Performance
Shares or Performance Units to any Eligible Person who is a
Covered Executive, the Performance Goal or Goals established in
connection with such Award shall be based on one or more of the
following business criteria, as determined by the Committee in
its discretion: (a) the attainment of specified levels of,
or increases in, the Companys after-tax or pretax return
on stockholders equity; (b) the attainment of
specified levels in the fair market value of the Companys
Shares; (c) the attainment of specified levels of growth in
the value of an investment in the Companys Shares,
assuming that all dividends paid on the Companys Common
Stock are reinvested in additional Shares; (d) the
attainment of specified levels of, or increases in, the
Companys pre-tax or after-tax earnings, profits, net
income, or earnings per share; (e) the attainment of
specified levels of, or increases in, the Companys
earnings before income tax, depreciation and amortization
(EBITDA); (f) attainment of specified levels of, or
increases in, the Companys net sales, gross revenues or
cash flow from operations; (g) the attainment of specified
levels of, or increases in, the Companys working capital,
or in its return on capital employed or invested; (h) the
attainment of specified levels of, or decreases in, the
Companys operating costs or any one or more components
thereof, or in the amount of all or any specified portion of the
Companys debt or other outstanding financial obligations;
and (i) such other business performance criteria as may,
from time to time, be established by the Committee in the
instrument which contains the Award of Performance Shares or
Performance Units.
Any of the business criteria described in the preceding
paragraph which the Committee establishes as a Performance Goal
may be measured either by the performance of the Company and its
Affiliates on a consolidated basis,
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or by the performance of any one or more of the Companys
subsidiaries, divisions, or other business units, as the
Committee in its discretion may determine. In its discretion,
the Committee may also establish Performance Goals, based on any
of the business criteria described in this Section 6.05,
that require the attainment of a specified level of performance
of the Company, or any of its subsidiaries, divisions or other
business units, relative to the performance of other specified
corporations, in order for such Performance Goals to be met.
The Committee may also, in its discretion, include in any
Performance Goal the attainment of which depends on a
determination of the net earnings or income of the Company or
any of its subsidiaries, divisions or other business units,
provisions which require such determination to be made by
eliminating the effects of any decreases in or charges to
earnings for: (a) the effect of foreign currency exchange
rates; (b) any acquisitions, divestitures, discontinuances
of business operations, restructurings or other special charges;
(c) the cumulative effect of any accounting changes; and
(d) any extraordinary items as determined under
generally accepted accounting principles, to the extent that
such decreases or charges referred to in clauses (a)
through (d) of this paragraph are separately disclosed in
the Companys Annual Report for each fiscal year within the
applicable Performance Period.
6.06 Performance Goals for Non-Covered
Executives. In the case of Awards of Performance
Shares or Performance Units made hereunder to Eligible Persons
who are not Covered Executives, the Performance Goal or Goals
applicable to such Awards shall be such corporate or individual
goals as the Committee in its discretion may determine.
6.07 Measurement of Performance. At the
end of the Performance Period established in connection with any
Award of Performance Shares or Performance Units, the Committee
shall determine the extent to which the Performance Goal or
Goals established for such Award have been met, and shall
determine, on that basis, the number of Performance Shares or
Performance Units included in such Award that have been earned
and as to which payment will be made pursuant to
Section 6.09 below, subject to the adjustments provide for
in Section 6.08 and the forfeiture provisions of
Section 6.10. In the case of any Award granted to a Covered
Executive, unless the Committee shall certify in writing the
extent to which it has determined that the Performance Goal or
Goals established by it for such Award have been met, the
issuance of Performance Shares to the Covered Executive shall be
subject to Section 162(m) of the Code.
6.08 Adjustment of Award Amounts. The
number of Shares issuable with respect to an Award on the basis
of the level of attainment of the applicable Performance Goals
as determined by the Committee under Section 6.07 shall be
subject to adjustment in accordance with the following
provisions:
(a) To the extent not inconsistent with the terms of the
Plan and if the instrument evidencing the Award so provides, the
number of Shares otherwise issuable with respect to an Award to
an Eligible Person who is not a Covered Executive may be
increased or decreased to the extent determined by the Committee
in its discretion, based on the Committees evaluation of
the Eligible Persons individual performance or to reflect
such other events, circumstances or factors as the Committee in
its discretion deems appropriate in determining the extent to
which payment should be made with respect to the Eligible
Persons Award.
(b) Notwithstanding the provisions of Section 6.08(a)
above, the Committee shall not have any authority to increase
the number of Shares otherwise issuable with respect to any
Award of Performance Shares or Performance Units to a Covered
Executive. However, if the instrument evidencing an Award to a
Covered Executive so provides, the Committee may, in its
discretion, reduce the number of Shares otherwise issuable with
respect to such Award: (i) to reflect any decreases in or
charges to earnings that were not taken into account pursuant to
clause (a), (b), (c), or (d) of the last paragraph of
Section 6.05 in determining net earnings or income for
purposes of any Performance Goal established in connection with
such Award; (ii) to reflect any credits to earnings for
extraordinary items of income or gain that were taken into
account in determining net earnings or income for such purposes;
(iii) to reflect the Committees evaluation of the
Covered Executives individual performance; or (iv) to
reflect any other events, circumstances or factors which the
Committee believes to be appropriate in determining the extent
to which payment should be made with respect to the Covered
Executives Award.
6.09 Payment of Awards. Payment with
respect to that number of Performance Shares or Performance
Units subject to any Award which the Committee has determined
under Section 6.07 above to have been earned, as
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adjusted to the extent determined by the Committee under
Section 6.08, shall be made in accordance with the
following provisions:
(a) In the case of any such Performance Shares, payment
shall be made by the issuance and delivery to the Participant of
a stock certificate for the requisite number of such Shares free
of the legends making reference to restrictions on
transferability of the Performance Shares provided for by this
Plan. However, if the Performance Shares with respect to which
payment is to be made include a fractional Share, payment of
such fractional Share shall be made in cash, in an amount equal
to the Fair Market Value of such fractional Share determined as
of the end of the Performance Period. Such Shares shall be
issued and delivered, and, if applicable, such cash payment
shall be made, to the Participant as soon as practicable after
the end of the Performance Period applicable to the Award in
question.
(b) In the case of Performance Units, (including related
Dividend Equivalent Units), payment shall be made: (i) by
the issuance and delivery to the Participant of a stock
certificate for a number of Shares equal to the total number of
such whole Performance Units and related Dividend Equivalent
Units; and (ii) by payment in cash for any fractional Unit
in an amount equal to the Fair Market Value of such fractional
Unit determined as of the day immediately preceding the date as
of which payment is to be made. Payment shall be made in such
manner and at such time or times as provided in such instrument.
Unless otherwise provided by the instrument evidencing the grant
of Performance Units, issuance of certificates for Shares with
respect to any part or all of a Participants Performance
Units (including any related Dividend Equivalent Units) may be
deferred, at the Participants election, upon such terms
and conditions as are specified by the Participant, in writing,
subject to the restrictions on deferral of compensation
contained in Code Section 409A.
6.10 Termination of Service. Except as
the instrument evidencing the grant of Performance Shares or
Performance Units may otherwise provide, upon an Eligible
Persons Termination of Service for any reason prior to the
end of the Performance Period established for any Award of
Performance Shares or Performance Units, such Award shall be
cancelled, all Performance Shares or Performance Units included
in such Award, and all Dividend Equivalent Units that were
credited with respect to such Performance Shares or Performance
Units, shall be forfeited, and no payment of any kind shall be
made with respect to such Award.
Notwithstanding the foregoing, if the Committee so determines,
in its discretion, the instrument evidencing any such Award may
provide that if the Eligible Persons Termination of
Service occurs prior to the end of the Performance Period
established for such Award as a result of the Eligible
Persons death, Disability or Retirement (but not for any
other reason), payment will be made at the end of the
Performance Period, in accordance with the provisions of
Section 6.09, with respect to all or a Pro Rata Portion of
the number of Shares
and/or the
amount of cash that otherwise would have been payable to the
Eligible Person, as determined in accordance with the provisions
of Sections 6.07 and 6.08, if the Eligible Persons
Termination of Service had not occurred prior to the end of such
Performance Period. In such case, only the Eligible
Persons right to receive payment with respect to any
remaining portion of the Performance Shares or Performance Units
(and related Dividend Equivalent Units) included in such Award
shall be cancelled and forfeited.
Notwithstanding the provisions of Section 6.03 above and
notwithstanding the absence of the provisions of this paragraph
from provisions of any instrument containing the provisions of
an Award issued prior to the effective date of this Amendment
and Restatement, if an Eligible Persons Termination of
Service occurs, for any reason, prior to the expiration of the
Performance Period which is in effect for an Award of
Performance Shares, the Eligible Person shall, upon such
Termination of Service, be deemed to forfeit his right to all
cash dividends received with respect to the portion of the
Performance Shares previously awarded to such Eligible Person
with respect to which the Restrictions have not lapsed. In
connection with the forfeiture by an Eligible Person of the cash
dividends received by the Eligible Person with respect to the
Performance Shares previously awarded to the Eligible Person
with respect to which the Restrictions have not lapsed, the
Eligible Person shall be obligated to pay to the Company, no
later than thirty (30) days following such Eligible
Persons Termination of Service, the amount of the
dividends received by such Eligible Person which is deemed to be
forfeited pursuant to the provision of the preceding sentence.
In connection with the foregoing, if, pursuant to the provisions
of the preceding paragraph, the Committee has provided in the
instrument evidencing the Award of Performance Shares that the
Eligible Person shall have the right to receive payment for
Performance Shares awarded to the Eligible Person if the
Eligible Persons Termination
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of Service occurs prior to the end of the Performance Period
established for such Performance Shares as a result of the
Eligible Persons death, Disability or Retirement (but not
for any other reason), the Eligible Person will not forfeit his
right to all cash dividends received with respect to the portion
of Performance Shares as to which the Restrictions have not
lapsed and that such Eligible Person shall be entitled to retain
all or a portion of such cash dividends.
6.11 Notice of Code Section 83(b)
Election. A Participant who files an election under
Section 83(b) of the Code to include in gross income the
Fair Market Value of any Performance Shares granted hereunder
while such Shares are still subject to achievement of
Performance Goals shall furnish the Company with a copy of the
election so filed by the Participant within ten (10) days
of the filing of such election with the Internal Revenue Service.
ARTICLE 7.
RIGHTS
7.01 Awards of Rights. (a) Subject
to the limitations set forth in Article 3 above and to the
other terms and conditions of the Plan, Rights may be granted
under the Plan to any Eligible Person at such times and upon
such terms and conditions as the Committee, in its discretion
may determine. Rights shall be granted in accordance with the
provisions of this Article 7.
(b) The terms of the instrument which contains the terms of
an Award of Rights shall specify the number of Shares which
shall be used as the basis for determining the value of the
Rights at the end of the Appreciation Period and the Base Price
in effect for those Shares.
(c) Rights shall be exercisable at such time and upon such
terms as may be established by the Committee in the instrument
setting forth the terms of the Award; provided that, in no event
shall the period of time that an Award of Rights is exercisable
extend beyond the ten (10) year period beginning on the
Date of Grant.
(d) Rights shall be subject to the same transferability
restrictions applicable to all Awards and may not be transferred
during the holders lifetime, except to one or more family
members as provided in Section 8.02.
(e) The holder of a Right shall not have any stockholder
rights with respect to the Shares used to determine the value of
the Right.
7.02 Dividend Equivalent Units. If any
dividends or other distributions payable on the Companys
Shares are paid in Shares during any period that a Participant
holds an Award of Rights, as of the applicable Dividend Payment
Date, a number of additional Rights shall be credited to any
account established for the Participant to reflect the number of
Rights held by the Participant as of such Dividend Payment Date.
The number of such additional Rights to be credited shall be
determined by first multiplying: (a) the total
number of Rights standing to the Participants credit in
such account on the day immediately preceding such Dividend
Payment Date (including all Dividend Equivalent Units credited
to such account on all previous Dividend Payment Dates); by
(b) the per share dollar amount of the dividend paid on
such Dividend Payment Date; and then (c) dividing
the resulting amount by the Fair Market Value of one Share on
such Dividend Payment Date. Additional Rights awarded pursuant
to this Section to a Participant that holds an Award of Rights
shall be exercisable at the same time and upon the same terms as
the Rights with respect to which such additional Rights are to
be issued; provided that, the Base Price of such rights shall be
equal to the Fair Market Value of a Share, determined as of the
applicable Dividend Payment Date.
7.03 Termination of Service. Except as
the instrument evidencing the grant of an Award of Rights may
otherwise provide, upon an Eligible Persons Termination of
Service for any reason prior to the expiration of the
Appreciation Period which is in effect for any Right (and
related Dividend Equivalent Units) standing to his or her credit
immediately prior to such Termination of Service, the Eligible
Persons right to exercise such Right shall be forfeited
and cancelled as of the date of such Termination of Service, and
no payment of any kind shall be made with respect to such Right
and related Dividend Equivalent Units.
Notwithstanding the foregoing, if the Committee so determines,
in its discretion, the instrument evidencing the Award of such
Right may provide that if the Eligible Persons Termination
of Service occurs prior to the end of the Appreciation Period
established for such Right as a result of the Eligible
Persons death, Disability or Retirement
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(but not for any other reason), payment will be made with
respect to all or a Pro Rata Portion of such Right and any
related Dividend Equivalent Units. In such case, only the
Eligible Persons right to receive payment with respect to
any remaining portion of the Right (and related Dividend
Equivalent Units) for which such Appreciation Period was
established shall be cancelled and forfeited. Any payment
required to be made with respect to an Eligible Persons
Right (and related Dividend Equivalent Units) pursuant to this
paragraph shall be made as soon as practicable after the date of
such persons Termination of Service, and shall be made in
the manner specified in Section 7.04.
7.04 Payment of Awards. In the case of
Rights, (including related Dividend Equivalent Units), payment
shall be made: (a) by the issuance and delivery to the
Participant of a stock certificate for a number of Shares having
a Fair Market Value on the date the Rights are exercised equal
to: (i) the aggregate Fair Market Value of the Shares used
as the basis for determining the value of the Rights being
exercised, determined as of the date the Rights are exercised;
minus (ii) the aggregate Base Price in effect for the
Rights being exercised; and (b) by payment in cash for any
fractional Shares which would be issued using the formula
contained in (a) above. Issuance of certificates for Shares
shall be made in such manner and at such time or times as
provided in such instrument. Unless otherwise provided by the
instrument evidencing the grant of Rights, issuance of
certificates for Shares with respect to any part or all of a
Participants Rights (including any related Dividend
Equivalent Units) may be deferred, at the Participants
election, upon such terms and conditions as are specified by the
Participant, in writing, subject to the restrictions on deferral
of compensation contained in Code Section 409A.
ARTICLE 8.
TRANSFERABILITY
OF AWARDS
8.01 Restrictions on Transfers. Except
as otherwise provided by Section 8.02 below: (a) any
Option granted to an Eligible Person under the Plan shall be
nontransferable and may be exercised during the Eligible
Persons lifetime only by the Eligible Person; (b) any
Restricted Shares, Restricted Units, Performance Shares,
Performance Units and Rights granted to an Eligible Person under
the Plan shall not be transferrable by the Eligible Person
during his or her lifetime; and (c) a Participants
right to receive payment of Shares or cash with respect to any
Award granted to the Participant under the Plan shall not be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Participant.
8.02 Permitted
Transfers. Notwithstanding the provisions of
Section 8.01 above, if the instrument evidencing the grant
of any Award other than an Incentive Stock Option so provides,
the recipient of such Award may transfer his or her rights with
respect to such Award, or any portion thereof, to any
family member of the recipient, as that term is
defined in the General Instructions to
Form S-8
promulgated by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, subject to such limitations,
terms and conditions as may be specified in such instrument.
ARTICLE 9.
EFFECTS OF CHANGE IN CONTROL
9.01 Change in Control. Notwithstanding
any other provision in the Plan to the contrary, except as
otherwise provided in the Merger Sale Agreement entered into by
the Company in connection with a Change in Control, upon the
occurrence of a Change in Control, the following provisions
shall apply:
(a) Each Option outstanding on the day immediately
preceding the date on which the Change in Control occurs shall
be converted to a right to receive an Option Cash Out Payment.
Payment of the Option Cash Out Payment shall be made to the
holder of the Option in one lump sum payment, less applicable
withholding taxes, on the date on which the Change in Control
occurs.
(b) Each Right outstanding on the day immediately preceding
the date on which the Change in Control occurs shall be
converted to a right to receive the Right Cash Out Payment.
Payment of the Right Cash Out Payment shall be made to the
holder of the Right in one lump sum payment, less applicable
withholding taxes, on the date on which the Change in Control
occurs.
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(c) The Restricted Periods applicable to all Restricted
Shares and Restricted Units (including any related Dividend
Equivalent Units) granted to a Participant hereunder that are
still outstanding on the day immediately preceding the date on
which such Change in Control occurs shall expire on such date;
all Restrictions applicable to such outstanding Restricted
Shares, Restricted Units and related Dividend Equivalent Units
shall lapse on such date; and the Participants rights to
receive delivery or payment with respect to all such outstanding
Restricted Shares, Restricted Units and related Dividend
Equivalent Units shall become nonforfeitable as of such date.
Payment with respect to such outstanding Restricted Shares,
Restricted Units and related Dividend Equivalent Units shall be
made on the date the Change in Control occurs. Unless the
Committee determines that payment with respect to Restricted
Shares and Restricted Units is to be made in the form of a cash
payment instead of the issuance and delivery of Shares, the
Company shall take whatever steps are necessary to cause all
such Restricted Shares and Shares attributable to Restricted
Units to be issued to the applicable Participants, and to be
treated as outstanding, as of the date the Change in Control
occurs.
(d) The Performance Periods applicable to all Performance
Shares and Performance Units (including any related Dividend
Equivalent Units) granted to a Participant hereunder that are
still outstanding on the day immediately preceding the date on
which such Change in Control occurs shall end on such date; all
Performance Goals that were established in connection with the
Award of such Performance Shares or Performance Units shall be
deemed to have been satisfied in full as of such date; the
number of Performance Shares or the percentage of the
Performance Units as to which payment is to be made in the event
the Performance Goal or Goals applicable to the Award of such
Shares or Units are met at the targeted level of performance, as
specified in the instrument evidencing the grant of such Award,
shall be deemed to be earned in full as of such date; and the
Participant shall acquire on such date a nonforfeitable right to
receive payment with respect to such number of Performance
Shares (including any cash payment for dividends payable
thereon, if the instrument evidencing the grant of such shares
provides for such cash payment), or with respect to such
percentage of the Performance Units (and any related Dividend
Equivalent Units), determined without any adjustment under
Section 6.09(a) or (b). Payment with respect to such
Performance Shares, Performance Units and related Dividend
Equivalent Units shall be made on the date the Change in Control
occurs. Unless the Committee determines that payment with
respect to such Performance Shares and Performance Units is to
be made in the form of a cash payment instead of by the issuance
and delivery of Shares, the Company shall take whatever steps
are necessary to cause all such Performance Shares and Shares
attributable to Performance Units to be issued to the applicable
Participants, and to be treated as outstanding, as of the date
the Change in Control occurs.
9.02 Substitution of New
Awards. Notwithstanding the provisions of
Section 9.01, if provided for by a Merger Sale Agreement
entered into in connection with a Change in Control, the rights
of Participants under any Awards outstanding on the day
immediately preceding the Change in Control shall be honored or
assumed or new rights issued therefor by the entity which
survives the Change in Control (each such honored, assumed or
substituted option being hereinafter an Alternative
Award); provided that, any such Alternative Award
satisfies the following criteria:
(a) the Alternative Award must be based on stock which is
traded on an established securities market, or which will be so
traded within thirty (30) days of the Change in Control;
(b) the Alternative Award must provide the Participant with
rights and entitlements substantially equivalent to or better
than the rights, terms and conditions applicable under such
Award, including, but not limited to, an identical or better
exercise schedule; and
(c) the Alternative Award must have economic value
substantially equivalent to the value of such Award (determined
at the time of the Change in Control).
ARTICLE 10.
COMPLIANCE
WITH CODE SECTION 409A
10.01 In General. This Article 10
is intended to comply with final regulations promulgated under
Code Section 409A. It is effective January 1, 2009 and
shall govern notwithstanding any contrary provision elsewhere in
the Plan or in any instrument pursuant to which an Award is
granted under the Plan (an Award Instrument).
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10.02 409A Excluded Stock Rights. All
Non-Qualified Stock Options and Rights awarded under the Plan
are intended not to provide for the deferral of compensation, in
accordance with Treas. Reg. §1.409A-1(b)(5)(i)(A) and (B)
(said Awards are hereinafter referred to as 409A Excluded
Stock Rights), except where an Award Instrument states
explicitly that the Award is intended to provide for a deferral
of compensation (such Award is hereinafter referred to as a
409A Non-Excluded Stock Right). Accordingly, the
Plan shall be construed, and may be amended, in such manner as
will ensure that 409A Excluded Stock Rights remain excluded from
the application of Code Section 409A. Without limiting the
generality of the foregoing:
(a) no 409A Excluded Stock Right shall be awarded with an
exercise price that is less than the Fair Market Value of the
Common Stock on the Date of Grant where Fair Market Value is
determined in a manner permitted under Treas. Reg.
§1.409A-1(b)(5)(iv);
(b) no 409A Excluded Stock Right shall be modified,
extended or exchanged for a new Award if such modification,
extension or exchange would cause the 409A Excluded Stock Right
to become (or be replaced by) a 409A Non-Excluded Stock Right or
other Award that is subject to Code Section 409A;
(c) a 409A Excluded Stock Right shall expire no later than
its original expiration date and, if a Excluded Stock Right
would expire after its original expiration date, because the
Participant has died or otherwise become unable to exercise the
Stock Right due to a mental or physical disability, the Stock
Right shall be deemed exercised by the owner thereof on the day
preceding its original expiration date if the then Fair Market
Value of the Common Stock exceeds the exercise price;
(d) any extension of a 409A Excluded Stock Right, whether
pursuant to a provision of the Plan or an exercise of Committee
discretion, shall not extend the term of the Award beyond the
earlier of (i) the original expiration date stated in the
Award Instrument, or (ii) the tenth anniversary of the
Award;
(e) no 409A Excluded Stock Right shall permit the deferral
of compensation beyond the date of exercise;
(f) no dividends shall be paid or credited on a 409A
Excluded Stock Right that would have the effect of reducing the
exercise price of the 409A Excluded Stock Right below Fair
Market Value of the Common Stock on the Date of Grant in
violation of Code Section 409A and the Treas. Reg.
§1.409A-1(b)(5)(i)(E); and
(g) any Common Stock, cash or other consideration to be
transferred to the Participant in connection with the exercise
of the 409A Excluded Stock Right shall be transferred as soon as
practicable and in all events within 30 days following the
exercise date and the Participant shall have no right to
determine the calendar year in which such transfer occurs.
10.03 409A Non-Excluded Stock Rights. If
an Award Instrument states explicitly that the Non-Qualified
Stock Option or the Right granted thereunder is intended to
provide for a deferral of compensation in accordance with Treas.
Reg. §1.409A-1(b)(5)(i)(C) (such Award is hereinafter
referred to as 409A Non-Excluded Stock Right), the
Award Instrument shall be deemed to incorporate the terms and
conditions necessary to avoid inclusion of the Award in the
Participants gross income pursuant to
Section 409A(a)(1) of the Code and the Plan and Award
Instrument shall be interpreted in accordance with
Section 409A of the Code and the regulations and other
interpretive guidance issued thereunder so as to avoid the
inclusion of the Award in gross income pursuant to
Section 409A(a)(1) of the Code. Without limiting the
generality of the foregoing:
(a) the Award Instrument shall specify that the 409A
Non-Excluded Stock Right will expire on the last day of the
calendar year in which the 409A Non-Excluded Stock Right becomes
exercisable, and that any Common Stock, cash or other
consideration to be transferred to the Participant in connection
with the exercise of the 409A Non-Excluded Stock Right shall be
transferred to the Participant on or before March 15 of the
calendar year following the calendar year in which the 409A
Non-Excluded Stock Right becomes exercisable;
(b) the date on which the 409A Non-Excluded Stock Right
becomes exercisable may not be accelerated except as may be
permitted under Treas. Reg. §1.409A-3(j); and
(c) in the case of a 409A Non-Excluded Stock Right that
becomes exercisable as a result of the separation from service
of a Participant who is a specified employee within
the meaning of Treas. Reg. §1.409A-1(i) as applied by the
Company, no Common Stock, cash or other consideration shall be
transferred to the Participant in
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connection with the exercise of the 409A Non-Excluded Stock
Right until the day following the
6-month
anniversary of the Participants separation from service.
10.04 409A Excluded Current Property
Transfers. Restricted Shares and Performance Shares
(Current Property Transfers) awarded under the Plan
are intended not to provide for the deferral of compensation, in
accordance with Treas. Reg. §1.409A-1(b)(6) (said Awards
are hereinafter referred to as 409A Excluded Current
Property Transfers), unless the Award Instrument states
explicitly that the Award is intended to provide for a deferral
of compensation (such an Award is hereinafter referred to as
409A Non-excluded Current Property Transfer).
Accordingly, the Plan shall be construed, and may be amended, to
ensure that 409A Excluded Current Property Transfers remain
excluded from the application of Code Section 409A. Without
limiting the generality of the foregoing, no Award Instrument
shall provide for or permit the deferral of compensation
resulting from a 409A Excluded Current Property Transfer beyond
the date on which the 409A Excluded Current Property Transfer
would otherwise become includable in gross income in accordance
with the rules of Code Section 83 (or would have become
includable but for the exercise of an election under Code
Section 83(b)).
10.05 409A Non-Excluded Current Property
Transfers. If, under the terms of an Award
Instrument, a Current Property Transfer would be deemed to be a
deferral of compensation under Section 409A of the Code
(such Award is hereinafter referred to as 409A
Non-Excluded Current Property Transfer), the Award
Instrument shall be deemed to incorporate the terms and
conditions necessary to avoid inclusion of the Award in the
Participants gross income pursuant to
Section 409A(a)(1) of the Code and the Plan and Award
Instrument shall be interpreted in accordance with
Section 409A of the Code and the regulations and other
interpretive guidance issued thereunder so as to avoid the
inclusion of the Award in gross income pursuant to
Section 409A(a)(1) of the Code. Without limiting the
generality of the foregoing:
(a) the Award Instrument shall specify one or more dates or
events permitted under Code Section 409A(a)(2)(A) at which
time the Award will be settled in cash or vested property;
(b) the Award Instrument shall specify the manner in which
the Award will be paid (e.g., lump sum or installments) and the
dates on or periods within which payment will occur;
(c) the date of settlement of the Award shall not be
accelerated except as otherwise permitted under Treas. Reg.
§1.409A-3(j); and
(d) in the case of a 409A Non-excluded Current Property
Transfer that becomes payable as a result of the separation from
service of a Participant who is a specified employee
within the meaning of Treas. Reg. §1.409A-1(i) as applied
by the Company, no cash or property shall be paid to the
Participant in connection with the settlement of the Award until
the day following the
6-month
anniversary of the Participants separation from service.
10.06 409A Excluded Future Property
Transfers. Any Awards permitted under the Plan
other than those referred to in Sections 10.02, 10.03,
10.04 and 10.05 including, but not limited to, Restricted Units
and Performance Units (Future Property Transfers),
are intended not to provide for the deferral of compensation, in
accordance with the short-term deferral rule set forth in Treas.
Reg. §1.409A-1(b)(4) (said Awards are hereinafter referred
to as 409A Excluded Future Property Transfers)
unless the terms of the Award Instrument, the Future Property
Transfer would be deemed to result in a deferral of compensation
under Section 409A of the Code (such an Award is
hereinafter referred to as a 409A Non-excluded Future
Property Transfer). Accordingly, the Plan shall be
construed, and may be amended, to ensure that 409A Excluded
Future Property Transfers remain excluded from the application
of Code Section 409A. Without limiting the generality of
the foregoing, the Award Instrument shall provide (or shall be
construed to provide) that a 409A Excluded Future Property
Transfer must be settled in cash or vested property on or before
March 15 of the calendar year following the calendar year in
which the 409A Excluded Future Property Transfer ceased to be
subject to a substantial risk of forfeiture within the meaning
of Treas. Reg. §1.409A-1(b)(4).
10.07 409A Non-excluded Future Property
Transfers. If, under the terms of an Award
Instrument, a Future Property Transfer would be deemed to result
in a deferral of compensation in accordance with Treas. Reg.
§1.409A-1(b)(4) (409A Non-excluded Future Property
Transfer), the Award Instrument shall be deemed to
incorporate the terms and conditions necessary to avoid
inclusion of the Award in the Participants gross income
pursuant to Section 409A(a)(1) of the Code and the Plan and
Award Instrument shall be interpreted in accordance with
Section 409A of the Code and the
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regulations and other interpretive guidance issued thereunder so
as to avoid the inclusion of the Award in gross income pursuant
to Section 409A(a)(1) of the Code. Without limiting the
generality of the foregoing:
(a) the Award Instrument shall specify one or more dates or
events permitted under Code Section 409A(a)(2)(A) at which
time the Award will be settled in cash or vested property;
(b) the Award Instrument shall specify the manner in which
the Award will be paid (e.g., lump sum or installments) and the
dates on or periods within which payment will occur;
(c) the date of settlement of the Award shall not be
accelerated except as otherwise permitted under Treas. Reg.
§1.409A-3(j); and
(d) in the case of a 409A Non-excluded Future Property
Transfer that becomes payable as a result of the separation from
service of a Participant who is a specified employee
within the meaning of Treas. Reg. §1.409A-1(i) as applied
by the Company, no cash or property shall be paid to the
Participant in connection with the settlement of the Award until
the day following the
6-month
anniversary of the Participants separation from service.
10.08 Authority To Amend Plan And/Or Award
Instrument. Notwithstanding any provision of the
Plan to the contrary, in the event that the Committee determines
that any Award may be subject to Section 409A of the Code
and related Department of Treasury guidance (including such
Department of Treasury guidance as may be issued after the date
of this Plan amendment), the Committee may adopt such amendments
to the Plan
and/or the
applicable Award Instrument as the Committee determines are
necessary or appropriate to (1) exempt the Award from
Section 409A of the Code
and/or
preserve the intended tax treatment of the benefits provided
with respect to the Award, or (2) comply with the
requirements of Section 409A of the Code and related
Department of Treasury guidance.
10.09 Protection of the Committee and
Others. Notwithstanding the foregoing provisions of
this Article 10, neither the Company, nor any officer,
employee, director or agent of the Company or any affiliate of
the Company, nor any member of the Committee, shall have any
liability to any Participant on account of an Award hereunder
being taxable under Code Section 409A regardless of whether
such person could have taken action to prevent such result and
failed to do so. To the extent permitted by law, the Company
shall indemnify and defend any officer, employee, director or
agent of the Company or of any affiliate of the Company, and any
member of the Committee, from any claim based on an Award
becoming taxable under Code Section 409A resulting from
such persons action taken, or action failed to be taken,
in connection with the Plan or any Award Instrument.
ARTICLE 11.
ADMINISTRATION
11.01 Administration of the
Plan. (a) Except as otherwise specifically
provided in the Plan, the Plan shall be administered by:
(i) the Board of Directors, with respect to all matters
pertaining to Awards that may be granted or that have been
granted hereunder to any Director that is an Eligible Person;
(ii) by the Compensation Committee, with respect to all
matters pertaining to Awards that may be made or that have been
made to Employees, except as otherwise provided in (iii); and
(iii) by the Compensation Administration Committee, with
respect to those specific matters pertaining to Awards to
Employees who are not Executive Officers that are within the
scope of the authority granted to the Compensation
Administration Committee under Section 10.05 below or
delegated by the Compensation Committee to the Compensation
Administration Committee pursuant to Section 10.02 below.
(b) No Covered Individual shall be liable for any action or
determination made in good faith with respect to the Plan or any
Award granted under the Plan. The Company shall, to the maximum
extent permitted by applicable law and the Certificate of
Incorporation and By-laws of the Company, indemnify and hold
each Covered Individual harmless from and against any loss, cost
or expense (including reasonable attorney fees) or liability
(including any amount paid in settlement of a claim with the
approval of the Company) arising out of any act or omission to
act in connection with the Plan or any Award granted pursuant to
the Plan. Such indemnification shall be in addition to any
rights of indemnification such individuals may have under
applicable law or under the Certificate of Incorporation and
By-laws of the Company.
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11.02 The Committees Power and
Authority. In addition to the responsibilities and
powers assigned to the Committee elsewhere in the Plan, the
Committee shall have the authority, in its discretion, to
establish, from time to time, guidelines or regulations for the
administration of the Plan, to interpret the Plan, and to make
all determinations it considers necessary or advisable for the
administration of the Plan. All decisions, actions or
interpretations of the Committee under the Plan shall be final,
conclusive and binding upon all parties.
The Committee may designate Employees of the Company and
professional advisors to assist the Committee in its
administration of the Plan and may grant authority to Employees
of the Company to execute agreements or other documents on
behalf of the Committee in connection with the administration of
the Plan. The Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any advice and any
computation received from any such counsel, consultant or agent.
The Company shall pay all expenses and costs incurred by the
Committee for the engagement of any such counsel, consultant or
agent.
11.03 Modification of
Awards. (a) To the extent not inconsistent
with the terms of the Plan or any provision of applicable law
(including, but limited to Code Section 409A), the
Committee, in its discretion, may waive or modify any of the
terms and conditions set forth in the instrument evidencing the
grant of any Award made to a Participant hereunder, including
without limitation: (i) in the case of any Option, to
permit such Option to become exercisable as to any portion of
the Shares subject to the Option at any time earlier than the
time specified in such instrument, to extend the term of such
Option beyond the date specified in such instrument as the
expiration date for the term of the Option (but not beyond the
day immediately preceding the tenth anniversary of the Date of
Grant of the Option), or to permit such Option, to the extent it
has become or becomes exercisable, to remain exercisable for any
period of time (including any period after the Eligible
Persons Termination of Service for any reason) beyond the
period of time specified in such instrument but not beyond the
date of expiration of the Option, including any extension
thereof permitted under this clause (a); (ii) in the case
of any Award of Restricted Shares or Restricted Units, to cause
the Restricted Period applicable to such Restricted Shares or
Restricted Units (including any related Dividend Equivalent
Units) to expire, and the Restrictions applicable to such
Restricted Shares or Restricted Units to lapse, as of any date
earlier than the date provided for in such instrument;
(iii) in the case of any Award of Performance Shares or
Performance Units (including any related Dividend Equivalent
Units), to cause the Performance Period applicable to such
Performance Shares or Performance Units to expire and to treat
the Performance Goal or Goals established with respect to such
Performance Shares or Performance Units as having been met, in
full or in part; and (iv) in the case of any Award of
Rights (including any related Dividend Equivalent Units), to
cause the Appreciation Period applicable to such Rights to
expire as of any date earlier than the date provided for in such
instrument.
(b) Notwithstanding the foregoing, no waiver or amendment
may be authorized or directed by the Committee pursuant to this
Section 10.03 without the consent of the Participant if:
(i) it would adversely affect, to any material extent, any
of the rights or obligations of the Participant with respect to
such Award; or (ii) in the case of any Option granted
hereunder that was intended to constitute an Incentive Stock
Option, if such waiver or amendment would cause such Option to
fail to be treated as an incentive stock option
within the meaning of Section 422 of the Code. In addition,
no such waiver or amendment may be authorized or directed by the
Committee pursuant to this Section 10.03 with respect to
any Option, Restricted Shares or Restricted Units, Performance
Shares or Performance Units or Rights awarded to any Covered
Executive, if such waiver or amendment would cause the delivery
of Shares or the payment of any cash amounts that are made with
respect to such Award to fail to be deductible for federal
income tax purposes pursuant to the applicable provisions of
Section 162(m) of the Code and the regulations issued
thereunder.
11.04 Power and Authority of the Compensation
Administration Committee. With respect to such
number of Shares as the Compensation Committee may in its
discretion determine to be available from time to time for the
grant of Awards in any form to Employees who are not Executive
Officers, the Compensation Administration Committee shall have
the authority: (a) to determine which of such Employees
shall receive Awards in each form; (b) to determine the
time or times when Awards in such form shall be made to such
Eligible Employees; (c) to determine the number of Shares
that will be subject to any Option, or the number of Restricted
Shares, Restricted Units, Performance Shares, Performance Units
or Rights, to be included in any Award to any such Employee;
(d) with respect to any Award of Performance Shares or
Performance Units made to any such Employees, to make
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all determinations which the Committee is authorized to make
with respect to such Award under the provisions of
Section 6.02, Section 6.07 and Section 6.09(a);
and (e) with respect to any Awards made to any such
Employees pursuant to the Compensation Administration
Committees exercise of the authority granted to it under
this Section 10.04, to exercise all of the authority and
powers granted to the Committee under Section 10.02 above
and under the second paragraph of Section 10.05 below, but
only to the extent that any such exercise by the Compensation
Administration Committee is not inconsistent with any action
taken by the Compensation Committee, or with any determination,
decision or interpretation of the Plan made by the Compensation
Committee, under Section 11.02 above or any delegation made
by the Compensation Committee under the second paragraph of
Section 11.05 below.
Except for the matters specified in the foregoing paragraph and
any additional matters pertaining to Awards to Employees who are
not Executive Officers with respect to which authority has been
granted to the Compensation Administration Committee pursuant to
this Section 11.04, the Compensation Administration
Committee shall not have any of the authority or powers
otherwise granted to the Compensation Committee under any other
provisions of the Plan.
The Compensation Committee in its discretion may at any time, by
resolution duly adopted by it and without any amendment of the
Plan, revoke or modify in any manner or respect the authority
and powers granted to the Compensation Administration Committee
under this Section 11.04.
11.05 Delegation. In addition to the
authority and powers granted to the Compensation Administration
Committee under Section 11.04 above, the Compensation
Committee in its discretion may, by resolution duly adopted by
it, delegate to the Compensation Administration Committee
authority with respect to such other matters pertaining to
Awards to Employees who are not Executive Officers as the
Compensation Committee may specify in such resolution. Any
authority so delegated to the Compensation Administration
Committee may be revoked or modified by the Compensation
Committee, in whole or in part, at any time.
The Committee may delegate any ministerial or nondiscretionary
function pertaining to the administration of the Plan to any one
or more officers or other employees of the Company or any of its
Affiliates.
11.06 Non-U.S. Participants. In
order to comply with any applicable provisions of local law and
regulations in any foreign country in which the Company or any
of its Affiliates operates, the Committee may in its sole
discretion: (a) modify the terms and conditions of Awards
granted under the Plan to Eligible Persons located in such
foreign country; (b) establish subplans with such
modifications to the terms of the Plan as it determines to be
necessary or appropriate under the circumstances applicable in
such foreign country; or (c) take any other action that it
deems necessary or appropriate in order to comply with, or
obtain any exemptions from the applicability of, the local laws
and regulations in such foreign country.
11.07 Designation and Change of
Beneficiary. Each Participant shall file with the
Committee, or with such Employee of the Company who has been
designated by the Committee to receive same, a written
designation of one or more persons as the Beneficiary who shall
be entitled to receive any Shares or cash amount payable with
respect to any Award upon or after the Participants death.
A Participant may, from time to time, revoke or change his or
her Beneficiary designation without the consent of any
previously designated Beneficiary by filing a new designation
with the Committee or its designee. The last such designation
received by the Committee or its designee shall be controlling;
provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee
prior to the Participants death, and in no event shall it
be effective as of a date prior to such receipt. If at the date
of a Participants death, there is no designation of a
Beneficiary in effect for the Participant pursuant to the
provisions of this Section 11.07, or if no Beneficiary
designated by the Participant in accordance with the provisions
hereof survives to receive any Shares or cash amount payable
under the Plan with respect to the Participant after his or
death, the Participants estate shall be treated as the
Participants Beneficiary for purposes of the Plan.
11.08 Taxes. Notwithstanding any other
provision of the Plan, the Company and each of its Affiliates
may make such provisions and take such steps as it may deem
necessary or appropriate for the withholding of all federal,
state and local taxes required by law to be withheld with
respect to the exercise of any Option or with respect any
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payments to be made in respect of any other form of Award
granted to a Participant under the Plan, including but not
limited to: (a) deducting the amount of taxes so required
to be withheld from any other compensation or other amounts then
or thereafter payable to the Participant,
and/or
(b) withholding delivery of any Shares or payment of any
cash amount otherwise required to be delivered or paid to the
Participant with respect to the exercise of such Option, or with
respect to such other form of Award, until the amount of taxes
so required to be withheld has been paid in full to the Company
or any of its Affiliated Companies. With the approval of the
Compensation Committee and subject to such terms and conditions
as it may require, such amount may be paid in Shares previously
owned by the Participant, or by the surrender of a portion of
the Shares that otherwise would be delivered or paid to such
Participant with respect to his or her Award, or by a
combination of payments in cash and Shares.
11.09 Amendment or Termination. The
Board of Directors may, with prospective or retroactive effect,
amend, suspend or terminate the Plan or any portion thereof at
any time; provided, however, that: (a) no amendment,
suspension or termination of the Plan shall, without the
Participants written consent, adversely affect the rights
of any Participant with respect to any Awards previously granted
to the Participant; and (b) no amendment which constitutes
a material revision of the Plan, as the term
material revision is defined in the applicable NASDAQ rules,
shall be effective unless approved by the stockholders of the
Company in the manner required by such rules and by applicable
law.
11.10 Participant Rights Unsecured. A
Participant shall have the status of a general unsecured
creditor of the Company with respect to his or her right to
receive any cash payment provided for by the instrument
containing the terms of any Award made pursuant to the Plan. The
Plan and the instrument containing the terms of any Award