Filed
by the Registrant x
|
|
Filed
by a Party other than the Registrant o
|
|
Check
the appropriate box:
|
|
o
|
Preliminary
Proxy Statement
|
o
|
Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|
x
|
Definitive
Proxy Statement
|
o
|
Definitive
Additional Materials
|
o
|
Soliciting
Material Pursuant to §240.14a-12
|
Carter’s,
Inc.
|
||
(Name
of Registrant as Specified in its Charter)
|
||
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
|
||
Payment
of Filing Fee (Check the appropriate box):
|
||
x
|
No
fee required.
|
|
o
|
Fee
computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
|
|
(1)
|
Title
of each class of securities to which transaction
applies:
|
|
(2)
|
Aggregate
number of securities to which transaction applies:
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
|
|
(4)
|
Proposed
maximum aggregate value of transaction:
|
|
(5)
|
Total
fee paid:
|
|
o
|
Fee
paid previously with preliminary materials.
|
|
o
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
|
|
(1)
|
Amount
Previously Paid:
|
|
(2)
|
Form,
Schedule or Registration Statement No.:
|
|
(3)
|
Filing
Party:
|
|
(4)
|
Date
Filed:
|
|
1.
|
The
election of three Class III
Directors;
|
2.
|
The
approval of the Company’s Amended and Restated 2003 Equity Incentive Plan;
and
|
3.
|
The
ratification of the appointment of PricewaterhouseCoopers LLP as the
Company’s independent registered public accounting firm for fiscal
2009.
|
1.
|
The
election of three Class III Directors (see page
9);
|
2.
|
The
approval of the Company’s Amended and Restated 2003 Equity Incentive Plan
(the “Plan”) (see page 32); and
|
3.
|
The
ratification of the appointment of PricewaterhouseCoopers LLP (“PwC”) as
the Company’s independent registered public accounting firm for fiscal
2009 (see page 38).
|
Board
of Directors
|
Board
Meetings
|
Executive
Sessions
|
Board
Committees
|
Name of Director
|
Audit
Committee
|
Compensation
Committee
|
Nominating and
Corporate
Governance
Committee
|
|||||||||
Bradley
M. Bloom
|
x
|
|||||||||||
A.
Bruce Cleverly
|
x
|
|||||||||||
Paul
Fulton
|
x
|
*
|
||||||||||
William
J. Montgoris
|
x
|
|||||||||||
David
Pulver
|
x
|
*
|
||||||||||
John
R. Welch
|
x
|
x
|
*
|
|||||||||
Thomas
E. Whiddon
|
x
|
x
|
||||||||||
Number
of Meetings in Fiscal 2008
|
8
|
6
|
4
|
|
*
Chairman
|
Audit
Committee
|
|
·
|
oversight
of the quality and integrity of the consolidated financial statements,
including the accounting, auditing, and reporting practices of the
Company;
|
|
·
|
oversight
of the Company’s internal control over financial
reporting;
|
|
·
|
appointment
of the independent registered public accounting firm and oversight of its
performance, including its qualifications and
independence;
|
|
·
|
oversight
of the Company’s compliance with legal and regulatory requirements;
and
|
|
·
|
oversight
of the performance of the Company’s internal audit
function.
|
Compensation
Committee
|
|
·
|
establishing
the Company’s philosophy, policies, and strategy relative to executive
compensation, including the mix of base salary and short-term and
long-term incentive compensation within the context of stated guidelines
for compensation relative to peer
companies;
|
|
·
|
evaluating
the performance of the Chief Executive Officer and other executive
officers relative to approved performance goals and
objectives;
|
|
·
|
setting
the compensation of the Chief Executive Officer and other executive
officers based upon an evaluation of their
performance;
|
|
·
|
assisting
the Board in developing and evaluating candidates for key executive
positions and ensuring a succession plan is in place for the Chief
Executive Officer and other executive
officers;
|
|
·
|
evaluating
compensation plans, policies, and programs with respect to the Chief
Executive Officer, other executive officers, and non-management
Directors;
|
|
·
|
monitoring
and evaluating benefit programs for the Company’s Chief Executive Officer
and other executive officers; and
|
|
·
|
producing
an annual report on executive compensation for inclusion in the Company’s
annual proxy statement. This years Compensation Committee
Report is included in this proxy statement on
page 21.
|
Compensation
Committee Interlocks and Insider
Participation
|
Nominating
and Corporate Governance Committee
|
|
·
|
identifying
and recommending candidates qualified to become Board
members;
|
|
·
|
recommending
Directors for appointment to Board Committees;
and
|
|
·
|
developing
and recommending to the Board a set of corporate governance principles and
monitoring the Company’s compliance with and effectiveness of such
principles.
|
Consideration
of Director Nominees
|
Interested
Party Communications
|
Corporate
Governance Principles and Code of
Ethics
|
Director
Independence
|
|
·
|
the
Director is, or within the last three years has been, employed by the
Company; or an immediate family member of the Director is, or within the
last three years has been, employed as an executive officer of the
Company;
|
|
·
|
the
Director, or an immediate family member of the Director, has received,
during any twelve-month period within the last three years, direct
compensation from the Company exceeding $120,000, other than Director or
committee fees and pension or other forms of deferred compensation for
prior service (provided such compensation is not contingent in any way on
continued service);
|
|
·
|
(a) the
Director, or an immediate family member of the Director, is a current
partner of a firm that is the Company’s internal auditor or independent
registered public accounting firm; (b) the Director is a current
employee of such a firm; (c) the Director has an immediate family
member who is a current employee of such a firm and who participates in
the firm’s audit, assurance, or tax compliance (but not tax planning)
practice; or (d) the Director, or an immediate family member of the
Director, was, within the last three years (but is no longer), a partner
or employee of such a firm and personally worked on the Company’s audit
within that time;
|
|
·
|
the
Director, or an immediate family member of the Director, is, or within the
last three years has been, employed as an executive officer of another
company where any of the Company’s present executive officers serve or
served on that company’s compensation
committee;
|
|
·
|
the
Director is a current employee, or has an immediate family member who is
an executive officer, of another company that has made payments to, or
receives payments from, the Company for property or services in an amount
which, in any of the last three fiscal years, exceeds the greater of $1.0
million, or 2%, of such other company’s consolidated gross
revenues;
|
|
·
|
the
Director, or an immediate family member of the Director, is, or within the
last three years has been, employed by a company that has a director who
is an officer of the Company;
|
|
·
|
the
Director serves as an officer, director, or trustee, or as a member of a
fund raising organization or committee of a not-for-profit entity to which
the Company made, in any of the last three fiscal years, contributions in
excess of the greater of (i) $50,000, or (ii) 2% of the gross annual
revenues or charitable receipts of such entity;
or
|
|
·
|
the
Director is, or within the last three years has been, an executive officer
of another company that is indebted to the Company, or to which the
Company is indebted, and the total amount of either company’s indebtedness
to the other exceeds 1% of the total consolidated assets of such
company.
|
|
·
|
Mr.
Bloom’s status as a director of Gordon Brothers Group. From
June 2006 to May 2007, the Company made payments totaling $151,061 to
Gordon Brothers Group. Because Mr. Bloom is not an employee of
Gordon Brothers Group, the Board determined that he does not fail to meet
the independence tests listed above, and does not otherwise have a
material relationship with the
Company.
|
Class III
Nominees—Terms Expiring at the Annual
Meeting
|
Name
|
Age
|
|||
Paul
Fulton
|
74 | |||
John
R.
Welch
|
77 | |||
Thomas
E.
Whiddon
|
56 |
Class I
Directors—Terms Expiring in 2010
|
Name
|
Age
|
|||
William
J.
Montgoris
|
62 | |||
David
Pulver
|
67 |
Class II
Directors—Terms Expiring in 2011
|
Name
|
Age
|
|||
Bradley
M.
Bloom
|
56 | |||
Michael
D.
Casey
|
48 | |||
A.
Bruce
Cleverly
|
63 |
Vote
Required
|
Name
|
Fees
Earned
or
Paid in Cash
(b)
|
Stock
Awards
($)
(c)
|
Option
Awards
($)
|
Total
($)
|
||||||||||||
Bradley
M. Bloom (a)
|
$ | 31,000 | $ | 90,000 | $ | -- | $ | 121,000 | ||||||||
A.
Bruce Cleverly
|
$ | 49,500 | $ | 118,215 |
(d)
|
$ | -- | $ | 167,715 | |||||||
Paul
Fulton
|
$ | 53,000 | $ | 90,000 | $ | -- | $ | 143,000 | ||||||||
William
J. Montgoris
|
$ | 39,000 | $ | 123,846 |
(e)
|
$ | -- | $ | 162,846 | |||||||
David
Pulver
|
$ | 65,000 | $ | 90,000 | $ | -- | $ | 155,000 | ||||||||
Elizabeth
A. Smith (f)
|
$ | 35,000 | $ | -- | $ | -- | $ | 35,000 | ||||||||
John
R. Welch
|
$ | 50,000 | $ | 90,000 | $ | 716 | (g) | $ | 140,716 | |||||||
Thomas
E. Whiddon
|
$ | 43,000 | $ | 90,000 | $ | 11,234 |
(h)
|
$ | 144,234 |
(a)
|
All
compensation earned by Mr. Bloom was paid to Berkshire
Partners.
|
(b)
|
This
column reports the amount of cash compensation earned in fiscal 2008
through annual cash retainers and meeting
fees.
|
(c)
|
On
May 8, 2008, we issued each of our non-management Directors 6,198
shares of common stock with a grant date fair value of $14.52 per
share.
|
(d)
|
Upon
joining the Board in March 2008, the Company issued Mr. Cleverly
6,481 shares of restricted stock, which “cliff vest” in March
2011. These shares had a grant date fair value of $15.43 per
share. In accordance with Statement of Financial Accounting
Standards (“SFAS”) No. 123 (revised 2004), “Share-Based Payment” (“SFAS
123R”), we assume these shares will vest in March 2011 and record the
related expense ratably over the vesting
period.
|
(e)
|
Upon
joining the Board in August 2007, the Company issued Mr. Montgoris 4,583
shares of restricted stock, which “cliff vest” in August
2010. These shares had a grant date fair value of $21.82 per
share. In accordance with SFAS 123R, we assume these shares
will vest in August 2010 and record the related expense ratably over the
vesting period.
|
(f)
|
Ms.
Smith resigned from the Board effective December 31,
2008.
|
(g)
|
On
April 5, 2003, Mr. Welch was granted 16,000 stock options with
an exercise price of $4.94 and a Black-Scholes fair value of
$1.54. The amount disclosed in this column equals the Company’s
expense for such stock options in accordance with SFAS 123R recorded
ratably over the vesting period through April
2008.
|
(h)
|
On
September 17, 2003, Mr. Whiddon was granted 16,000 stock options
with an exercise price of $6.98 and a Black-Scholes fair value of
$4.88. The amount disclosed in this column equals the Company’s
expense for such stock options in accordance with SFAS 123R recorded
ratably over the vesting period through September
2008.
|
Name
|
Age
|
Position
|
|||
Michael
D. Casey
|
48
|
Chief
Executive Officer
|
|||
Joseph
Pacifico
|
59
|
President
|
|||
David
A. Brown
|
51
|
Executive
Vice President and Chief Operations Officer
|
|||
James
C. Petty
|
50
|
President
of Retail Stores
|
|||
Richard
F. Westenberger
|
40
|
Executive
Vice President and Chief Financial Officer
|
|||
Charles
E. Whetzel, Jr.
|
58
|
Executive
Vice President and Chief Sourcing
Officer
|
Abercrombie
& Fitch
|
Gymboree
|
|
Aeropostale
|
J.
Crew
|
|
American
Eagle Outfitters
|
Oxford
Industries
|
|
Chico’s
|
Pacific
Sunwear
|
|
The
Children’s Place
|
Quicksilver
|
|
Coach
|
Timberland
|
|
Coldwater
Creek
|
Tween
Brands
|
(i)
|
the
nature and scope of each officer’s
responsibilities;
|
(ii)
|
the
Company’s performance; and
|
(iii)
|
the
comparative compensation data of companies in the Retail Survey and our
peer group.
|
Total
Direct
Compensation
|
||||
Chief
Executive Officer
|
$ | 2,058,187 | ||
Vice
President of Finance and Interim Chief Financial Officer
|
$ | 433,573 | ||
President
|
$ | 1,749,079 | ||
President
of Retail Stores
|
$ | 1,588,487 | ||
Chief
Sourcing Officer
|
$ | 1,215,830 | ||
Former
Chief Executive Officer
|
$ | 4,829,092 |
Base
Salary
|
||||||||
Named
Executive Officer
|
Fiscal
2008
|
Fiscal
2009
|
||||||
Michael
D.
Casey
|
$ | 700,000 | (a) | $ | 700,000 | |||
Chief
Executive Officer
|
||||||||
Andrew
B.
North
|
$ | 250,000 | (b) | $ | 250,000 | |||
Vice
President of Finance and Interim Chief Financial Officer
|
||||||||
Richard
F.
Westenberger
|
$ | -- | $ | 400,000 | (c) | |||
Executive
Vice President and Chief Financial Officer
|
||||||||
Joseph
Pacifico
|
$ | 650,000 | $ | 650,000 | ||||
President
|
||||||||
James
C.
Petty
|
$ | 425,000 | $ | 425,000 | ||||
President
of Retail Stores
|
||||||||
Charles
E. Whetzel,
Jr.
|
$ | 425,000 | $ | 425,000 | ||||
Executive
Vice President and Chief Sourcing Officer
|
||||||||
Frederick
J. Rowan,
II
|
$ | 850,000 | (d) | $ | -- | |||
Former
Chairman of the Board and Chief Executive Officer
|
||||||||
(a)
|
Prior
to his promotion on August 1, 2008 to Chief Executive Officer, Mr. Casey’s
base salary was $450,000. The amount shown reflects his base
salary following his promotion.
|
(b)
|
Mr.
North served as Interim Chief Financial Officer from August 1, 2008 until
January 19, 2009. Mr. North continues to serve as Vice
President of Finance.
|
(c)
|
Mr.
Westenberger joined the Company as Executive Vice President and Chief
Financial Officer effective January 19,
2009.
|
(d)
|
Mr.
Rowan retired as Chief Executive Officer effective August 1,
2008.
|
Net
Sales
($
in billions)
(25%)
|
Adjusted
EBIT
($
in millions)
(25%)
|
Adjusted
EPS
(50%)
|
||||||||||
25%
of Target Performance Bonus
|
$ | 1.447 | $ | 146.2 | $ | 1.32 | ||||||
100%
of Target Performance Bonus
|
$ | 1.490 | $ | 154.6 | $ | 1.40 | ||||||
200%
of Target Performance Bonus
|
$ | 1.560 | $ | 162.5 | $ | 1.48 |
Chief
Executive
Officer
|
Interim
Chief
Financial
Officer
|
President
|
President
of
Retail
Stores
|
Chief
Sourcing
Officer
|
||||||||||||||||
Base
Salary
|
$ | 1,400,000 | $ | 28,846 | $ | 1,300,000 | $ | 850,000 | $ | 850,000 | ||||||||||
Performance
Bonus
|
651,000 | -- | 403,000 | -- | 230,563 | |||||||||||||||
Health
and Other Benefits
|
29,170 | -- | 29,170 | -- | 29,170 | |||||||||||||||
Total
|
$ | 2,080,170 | $ | 28,846 | $ | 1,732,170 | $ | 850,000 | $ | 1,109,733 |
Chief
Executive
Officer
|
Interim
Chief
Financial
Officer
|
President
|
President
of
Retail
Stores
|
Chief
Sourcing
Officer
|
||||||||||||||||
Option
Value
|
$ | 344,900 | $ | -- | $ | 1,189,400 | $ | 379,500 | $ | 202,400 | ||||||||||
Restricted
Stock
Value
|
1,731,600 | 98,124 | -- | 625,300 | 962,000 | |||||||||||||||
Total
Value
|
$ | 2,076,500 | $ | 98,124 | $ | 1,189,400 | $ | 1,004,800 | $ | 1,164,400 |
Chief
Executive
Officer
|
President
|
Chief
Sourcing
Officer
|
Former
Chief
Executive
Officer
|
|||||||||||||
Perquisite
Allowance
|
$ | 30,000 | $ | 45,000 | $ | 30,000 | $ | 35,000 | (a) |
(a)
|
Pro-rated
to reflect his retirement on August 1,
2008.
|
Name
and Principal Position
|
Fiscal
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
(b)
|
Option
Awards
($)
(c)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
(d)
|
All
Other
Compensation
($)
(e)
|
Total
($)
|
|||||||||||||||||||||||||
Michael
D.
Casey
|
2008
|
$ | 540,385 | (a) | $ | -- | $ | 309,716 | $ | 435,586 | $ | 651,000 | $ | -- | $ | 121,500 | $ | 2,058,187 | ||||||||||||||||
Chief
Executive Officer
|
2007
|
$ | 375,000 | $ | -- | $ | 160,369 | $ | 334,134 | $ | -- | $ | -- | $ | 124,459 | $ | 993,962 | |||||||||||||||||
(previously
Chief Financial Officer)
|
2006
|
$ | 375,000 | $ | -- | $ | 89,689 | $ | 302,069 | $ | 328,125 | $ | -- | $ | 119,036 | $ | 1,213,919 | |||||||||||||||||
Andrew
B.
North
|
2008
|
$ | 232,115 | $ | -- | $ | 31,262 | $ | 63,996 | $ | 100,000 | $ | -- | $ | 6,200 | $ | 433,573 | |||||||||||||||||
Vice
President of Finance and
|
||||||||||||||||||||||||||||||||||
Interim
Chief Financial Officer
|
||||||||||||||||||||||||||||||||||
Joseph
Pacifico
|
2008
|
$ | 642,308 | $ | -- | $ | -- | $ | 432,210 | $ | 403,000 | $ | -- | $ | 271,561 | $ | 1,749,079 | |||||||||||||||||
President
|
2007
|
$ | 600,000 | $ | -- | $ | -- | $ | 261,446 | $ | -- | $ | -- | $ | 264,148 | $ | 1,125,594 | |||||||||||||||||
2006
|
$ | 600,000 | $ | -- | $ | -- | $ | 880,962 | $ | 600,000 | $ | -- | $ | 284,210 | $ | 2,365,172 | ||||||||||||||||||
James
C.
Petty
|
2008
|
$ | 412,500 | $ | 593,596 | (f) | $ | 113,334 | $ | 177,158 | $ | 200,000 | $ | -- | $ | 91,899 | $ | 1,588,487 | ||||||||||||||||
President
of Retail Stores
|
||||||||||||||||||||||||||||||||||
Charles
E. Whetzel,
Jr.
|
2008
|
$ | 417,308 | $ | -- | $ | 241,507 | $ | 162,232 | $ | 230,563 | $ | -- | $ | 164,220 | $ | 1,215,830 | |||||||||||||||||
Executive
Vice President and
|
2007
|
$ | 375,000 | $ | -- | $ | 219,297 | $ | 130,195 | $ | -- | $ | -- | $ | 159,390 | $ | 883,882 | |||||||||||||||||
Chief
Sourcing Officer
|
2006
|
$ | 375,000 | $ | -- | $ | 219,297 | $ | 130,193 | $ | 328,125 | $ | -- | $ | 153,105 | $ | 1,205,720 | |||||||||||||||||
Frederick
J. Rowan,
II
|
2008
|
$ | 497,615 | $ | -- | $ | -- | $ | 2,241,343 | $ | 790,500 | $ | 10,581 | $ | 1,289,053 | $ | 4,829,092 | |||||||||||||||||
Former
Chairman of the Board and
|
2007
|
$ | 812,000 | $ | -- | $ | -- | $ | 326,666 | $ | -- | $ | 0 | $ | 150,432 | $ | 1,289,098 | |||||||||||||||||
Chief
Executive Officer
|
2006
|
$ | 812,000 | $ | 1,000,000 | (g) | $ | -- | $ | 849,172 | $ | 1,218,000 | $ | 0 | $ | 143,603 | $ | 4,022,775 | ||||||||||||||||
(a) |
Prior to Mr. Casey’s
promotion to Chief Executive Officer on August 1, 2008, his base salary
for the 2008 fiscal year was $450,000. After his promotion and for
the balance of the 2008 fiscal year, his base salary was
$700,000.
|
(b)
|
The
amounts disclosed in this column
for Messrs. Casey, North, Petty, and Whetzel reflect the expense we
recorded in accordance with SFAS 123R for the following
grants:
|
(i) |
Mr. Casey
was granted 12,000 shares of restricted stock on each of February 16,
2006 and February 15, 2007 with a grant date fair value of $34.32 and
$22.19 per share, respectively. Both grants vest in four equal,
annual installments following the date of grant. Mr. Casey was
also granted 75,000 shares of performance-based restricted stock on August
7, 2008 with a grant date fair value of $17.92 per share. Fifty
percent of these shares will be eligible to vest upon the Company’s
reporting of adjusted EPS growth in fiscal 2009 (over fiscal 2008) and in
fiscal 2010 (over fiscal 2009) of at least 4%. If this
threshold earnings per share growth is achieved in fiscal 2009 and 2010,
then these eligible shares will vest, in varying percentages, from 33% to
100%, based on the Company’s compound annual growth rate in earnings per
share from fiscal 2009 to 2010 ranging between 4% and 8%. The
remaining 50% of these shares will then vest in equal amounts on December
31, 2011 and December 31, 2012 based on his continued employment with the
Company. In fiscal 2008, we have assumed that these performance
criteria will be met and that these shares will
vest.
|
(ii)
|
Mr.
North was granted 1,200 shares of restricted stock on February 16, 2006
with a grant date fair value of $34.32 per share, 3,000 shares of
restricted stock on February 15, 2007 with a grant date fair value of
$22.19 per share, and 3,000 shares of restricted stock on December 3, 2007
with a grant date fair value of $22.79 per share. These grants
vest in four equal, annual installments following the date of
grant.
|
(iii)
|
Mr.
Petty was granted 10,000 shares of restricted stock on June 5, 2007 with a
grant date fair value of $27.06 per share. Mr. Petty was also
granted 25,000 shares of restricted stock on July 1, 2008 with a grant
date fair value of $14.18 per share. Both grants vest in four
equal, annual installments following the date of
grant.
|
(iv)
|
Mr. Whetzel
was granted 40,000 shares of restricted stock on May 13, 2005 with a
grant date fair value of $22.01 per share. These shares cliff
vest on May 13, 2009. We have assumed these shares will
vest on May 13, 2009, and in accordance with SFAS 123R, we record
expense for these grants ratably over the four-year vesting
period. Mr. Whetzel was also granted 10,000 shares of
restricted stock on July 1, 2008 with a grant date fair value of $14.18
per share. These shares vest in four equal, annual installments
following the date of grant.
|
(c)
|
The
amounts disclosed in this column represent the expense we recorded in
accordance with SFAS 123R for the following
grants:
|
(i)
|
Mr. Casey
was granted 200,000 time-based stock options on March 22, 2004 with a
Black-Scholes fair value of $6.56 per share and an exercise price of
$14.81 per share. These shares vest in five equal, annual
installments following the date of grant. Mr. Casey was
also granted 12,000 time-based stock options on February 16, 2006
with a Black-Scholes fair value of $15.59 per share and an exercise price
of $34.32 per share, 12,000 time-based stock options on February 15, 2007
with a Black-Scholes fair value of $10.01 per share and an exercise price
of $22.19 per share, and 125,000 time-based stock options on August 6,
2008 with a Black-Scholes fair value of $7.13 per share and an exercise
price of $17.90 per share. The stock options granted to Mr.
Casey in fiscal 2006, 2007, and 2008 vest in four equal, annual
installments following the date of
grant.
|
(ii)
|
Mr.
North was granted 60,000 time-based stock options on September 17, 2003
with a Black-Scholes fair value of $4.88 per share and an exercise price
of $6.98 per share. These shares vest in five equal, annual
installments following the date of grant. Mr. North was also
granted 2,800 time-based stock options on February 16, 2006 with a
Black-Scholes fair value of $15.59 per share and an exercise price of
$34.32 per share, 6,000 time-based stock options on February 15, 2007 with
a Black-Scholes fair value of $10.01 per share and an exercise price of
$22.19 per share, and 6,000 time-based stock options on December 3, 2007
with a Black-Scholes fair value of $9.15 per share and an exercise price
of $22.79 per share. The stock options granted to Mr. North in
fiscal 2006 and 2007 vest in four equal, annual installments following the
date of grant.
|
(iii)
|
Mr. Pacifico
was granted 200,000 time-based stock options on March 22, 2004 with a
Black-Scholes fair value of $6.56 per share and an exercise price of
$14.81 per share. These shares vest in five equal, annual
installments following the date of grant. Mr. Pacifico was
also granted 200,000 performance-based stock options on November 10,
2005 with a Black-Scholes fair value of $12.68 and an exercise price of
$31.18 per share. Subject to the achievement of individual and
Company performance targets, these stock options vest in
February 2010. In fiscal 2007, we assumed these
performance criteria will not be met and that these shares will not
vest. Prior to fiscal 2007, we assumed that 100% of these
shares would vest. In accordance with SFAS 123R, we record
performance-based stock option expense based upon the probability of
performance target achievement, and we adjust any previously recorded
expense if assumptions regarding the achievement of performance targets
change. Mr. Pacifico was granted 200,000 time-based stock
options on July 1, 2008 with a Black-Scholes fair value of $4.89 per share
and an exercise price of $14.18 per share. These shares vest in
three equal, annual installments following the date of
grant.
|
(iv)
|
Mr.
Petty was granted 40,000 time-based stock options on June 5, 2007 with a
Black-Scholes fair value of $12.15 per share and an exercise price of
$27.06 per share. Mr. Petty was also granted 75,000 time-based
stock options on July 1, 2008 with a Black-Scholes fair value of $5.82 per
share and an exercise price of $14.18 per share. These shares
vest in four equal, annual installments following the date of
grant.
|
(v)
|
Mr. Whetzel
was granted 60,000 time-based stock options on May 13, 2005 with a
Black-Scholes fair value of $8.71 per share and an exercise price of
$22.01 per share. Mr. Whetzel was also granted 40,000
time-based stock options on July 1, 2008 with a Black-Scholes fair value
of $5.82 per share and an exercise price of $14.18 per
share. Both grants vest in four equal, annual installments
following the date of grant.
|
(vi)
|
Mr. Rowan
was granted 400,000 performance-based stock options on May 13, 2005
with a Black-Scholes fair value of $7.76 per share and an exercise price
of $22.01 per share. These stock options were scheduled to vest
in February 2009, subject to the achievement of individual and
Company performance criteria. Due to Mr. Rowan’s termination
for "good reason" on August 1, 2008, the vesting of these shares was
accelerated and the Company recognized approximately $2.2 million of
stock-based compensation expense during fiscal 2008, in accordance with
SFAS 123R.
|
(d) |
Amount
represents the increase in the present value of Mr. Rowan’s SERP in
fiscal 2008.
|
(e) |
The
amounts shown as “All Other Compensation” for fiscal 2008 consist of the
following:
|
Name
|
Insurance
Premium
Payments
(i)
|
Excess
Personal
Liability
Insurance
Premiums
|
Medical
Reimbursements
(ii)
|
401(k)
Company
Match
|
Perquisites
(iii)
|
Severance
Compensation
(iv)
|
Relocation
|
Tax
Gross-Ups
(v)
|
Total
|
|||||||||||||||||||||||||||
Michael
D. Casey
|
$ | 40,000 | $ | 3,400 | $ | 5,777 | $ | 9,200 | $ | 30,315 | $ | -- | $ | -- | $ | 32,808 | $ | 121,500 | ||||||||||||||||||
Andrew
B. North
|
$ | -- | $ | -- | $ | -- | $ | 6,200 | $ | -- | $ | -- | $ | -- | $ | -- | $ | 6,200 | ||||||||||||||||||
Joseph
Pacifico
|
$ | 111,000 | $ | 3,400 | $ | 9,603 | $ | 9,200 | $ | 41,502 | $ | -- | $ | -- | $ | 96,856 | $ | 271,561 | ||||||||||||||||||
James
C. Petty
|
$ | -- | $ | -- | $ | -- | $ | 9,200 | $ | -- | $ | -- | $ | 74,085 | $ | 8,614 | $ | 91,899 | ||||||||||||||||||
Charles
E. Whetzel, Jr.
|
$ | 57,000 | $ | 3,400 | $ | 20,069 | $ | 9,200 | $ | 24,194 | $ | -- | $ | -- | $ | 50,357 | $ | 164,220 | ||||||||||||||||||
Frederick
J. Rowan, II
|
$ | -- | $ | 3,400 | $ | 5,992 | $ | 9,200 | $ | 36,413 | $ | 878,239 | $ | -- | $ | 355,809 | $ | 1,289,053 |
(i)
|
Payments
to Messrs. Casey, Pacifico, and Whetzel relate to contributions made
to individual whole-life insurance policies paid by the
Company.
|
(ii)
|
Amounts
relate to medical reimbursements and related costs pursuant to a
supplemental executive medical reimbursement
plan.
|
(iii)
|
Mr. Casey’s
perquisites are comprised of $26,906 for automobile-related costs, $1,909
for a health club membership, $750 for financial planning, and $750 for a
service award; Mr. Pacifico’s perquisites are comprised of $26,728
for automobile-related costs, $6,376 for a health club membership, $4,298
for country club dues, and $4,100 for financial planning;
Mr. Whetzel’s perquisites are comprised of $18,360 for
automobile-related costs, $3,925 for financial planning, and $1,909 for a
health club membership; and Mr. Rowan’s perquisites are comprised of
$18,545 for financial planning, $9,823 for fundraising activities, $3,097
for automobile-related costs, $2,997 for country club dues, and $1,951 in
reimbursable medical expense pursuant to his separation
agreement.
|
(iv)
|
Mr.
Rowan’s severance compensation is comprised of $483,804 related to the
termination of his split-dollar arrangement, $346,538 of severance
benefits, and $47,897 for office furniture given to Mr.
Rowan.
|
(v)
|
Mr. Casey’s
gross-ups are comprised of $29,505 for insurance premium payments, $2,508
for excess personal liability insurance, $435 for automobile-related
costs, and $360 for a service award; Mr. Pacifico’s gross-ups are
comprised of $81,876 for insurance premium payments, $7,796 for
automobile-related costs, $4,676 for county club dues, and $2,508 for
excess personal liability insurance; Mr. Petty’s gross-up is comprised of
$8,614 for relocation reimbursements; Mr. Whetzel’s gross-ups are
comprised of $42,043 for insurance premium payments, $5,806 for
automobile-related costs, and $2,508 for excess personal liability
insurance; and Mr. Rowan’s gross-ups are comprised of $332,592 for
insurance premium payments, $9,785 for financial planning, $7,274 for the
increase in the present value of his SERP agreement, $2,508 for excess
personal liability insurance, $2,211 for country club dues, and $1,439 for
reimbursable medical expenses.
|
(f)
|
Special
one-time bonus related to the reimbursement for a loss on sale of Mr.
Petty’s former residence and associated tax
gross-ups.
|
(g)
|
Bonus
award earned in fiscal 2006 based on the Company’s achievement of
performance criteria related to the integration of
OshKosh. This award was paid in fiscal
2007.
|
Estimated
Future Payouts Under
Non-Equity
Incentive Plan Awards (a)
|
Estimated
Future Payouts Under
Equity
Incentive Plan Awards
|
||||||||||||||||||||||||||||||||||||
Name
|
Award
Type
|
Equity
Award
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
Exercise
or
Base
Price
of
Option
Awards
($/Sh)
|
Grant
Date
Fair
Value
of
Stock
and
Option
Awards
|
|||||||||||||||||||||||||||
Michael
D. Casey
|
Cash
Bonus
|
-- | $ | 262,500 | $ | 1,050,000 | $ | 2,100,000 | -- | -- | -- | $ | -- | $ | -- | ||||||||||||||||||||||
Shares
(b)
|
8/7/2008
|
$ | -- | $ | -- | $ | -- | -- | 75,000 | 75,000 | $ | -- | $ | 1,344,000 | |||||||||||||||||||||||
Options
(c)
|
8/6/2008
|
$ | -- | $ | -- | $ | -- | -- | 125,000 | 125,000 | $ | 17.90 | $ | 891,250 | |||||||||||||||||||||||
Andrew
B. North
|
Cash
Bonus
|
-- | $ | 31,250 | $ | 125,000 | $ | 250,000 | -- | -- | -- | $ | -- | $ | -- | ||||||||||||||||||||||
Shares
|
-- | $ | -- | $ | -- | $ | -- | -- | -- | -- | $ | -- | $ | -- | |||||||||||||||||||||||
Options
|
-- | $ | -- | $ | -- | $ | -- | -- | -- | -- | $ | -- | $ | -- | |||||||||||||||||||||||
Joseph
Pacifico
|
Cash
Bonus
|
-- | $ | 162,500 | $ | 650,000 | $ | 1,300,000 | -- | -- | -- | $ | -- | $ | -- | ||||||||||||||||||||||
Shares
|
-- | $ | -- | $ | -- | $ | -- | -- | -- | -- | $ | -- | $ | -- | |||||||||||||||||||||||
Options
(d)
|
7/1/2008
|
$ | -- | $ | -- | $ | -- | -- | 200,000 | 200,000 | $ | 14.18 | $ | 978,000 | |||||||||||||||||||||||
James
C. Petty
|
Cash
Bonus
|
-- | $ | 79,688 | $ | 318,750 | $ | 637,500 | -- | -- | -- | $ | -- | $ | -- | ||||||||||||||||||||||
Shares
(e)
|
7/1/2008
|
$ | -- | $ | -- | $ | -- | -- | 25,000 | 25,000 | $ | -- | $ | 354,500 | |||||||||||||||||||||||
Options
(f)
|
7/1/2008
|
$ | -- | $ | -- | $ | -- | -- | 75,000 | 75,000 | $ | 14.18 | $ | 436,500 | |||||||||||||||||||||||
Charles
E. Whetzel, Jr.
|
Cash
Bonus
|
-- | $ | 92,969 | $ | 371,875 | $ | 743,750 | -- | -- | -- | $ | -- | $ | -- | ||||||||||||||||||||||
Shares
(e)
|
7/1/2008
|
$ | -- | $ | -- | $ | -- | -- | 10,000 | 10,000 | $ | -- | $ | 141,800 | |||||||||||||||||||||||
Options
(f)
|
7/1/2008
|
$ | -- | $ | -- | $ | -- | -- | 40,000 | 40,000 | $ | 14.18 | $ | 232,800 | |||||||||||||||||||||||
Frederick
J. Rowan, II
|
Cash
Bonus
|
-- | $ | 318,750 | $ | 1,275,000 | $ | 2,550,000 | -- | -- | -- | $ | -- | $ | -- | ||||||||||||||||||||||
Shares
|
-- | $ | -- | $ | -- | $ | -- | -- | -- | -- | $ | -- | $ | -- | |||||||||||||||||||||||
Options
|
-- | $ | -- | $ | -- | $ | -- | -- | -- | -- | $ | -- | $ | -- | |||||||||||||||||||||||
(a)
|
The
amounts shown under “Threshold” represent 25% of the target performance
bonus, assuming threshold level performance is achieved for all
performance measures. The amounts shown under “Target”
represent 100% of the target performance bonus. The amounts
shown under “Maximum” represent 200% of the target performance
bonus.
|
(b)
|
Shares
of performance-based restricted stock granted to Mr. Casey on
August 7, 2008 pursuant to the Company’s Equity Incentive
Plan. Fifty percent of these shares will be eligible to vest
upon the Company’s reporting of adjusted EPS growth in fiscal 2009 (over
fiscal 2008) and in fiscal 2010 (over fiscal 2009) of at least
4%. If this threshold earnings per share growth is achieved in
fiscal 2009 and 2010, then these eligible shares will vest, in varying
percentages, from 33% to 100%, based on the Company’s compound annual
growth rate in earnings per share from fiscal 2009 to 2010 ranging between
4% and 8%. The remaining 50% of these shares will then vest in
equal amounts on December 31, 2011 and December 31, 2012 based on his
continued employment with the Company. In fiscal 2008, we have
assumed that these performance criteria will be met and that these shares
will vest.
|
(c)
|
Time-based
stock options granted to Mr. Casey on August 6, 2008 pursuant to
the Company’s Equity Incentive Plan. These stock options vest
ratably in four equal, annual installments following the date of
grant.
|
(d)
|
Time-based
stock options granted to Mr. Pacifico on July 1, 2008 pursuant
to the Company’s Equity Incentive Plan. These stock options
vest ratably in three equal, annual installments following the date of
grant.
|
(e)
|
Shares
of restricted stock granted to Mr. Petty and Mr. Whetzel on July 1,
2008 pursuant to the Company’s Equity Incentive Plan. These
restricted shares vest ratably in four equal, annual installments
following the date of grant.
|
(f)
|
Time-based
stock options granted to Mr. Petty and Mr. Whetzel on July 1, 2008
pursuant to the Company’s Equity Incentive Plan. These stock
options vest ratably in four equal, annual installments following the date
of grant.
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||
Name
|
Number
of
Shares
Acquired
on
Exercise
(#)
|
Value
Realized
on
Exercise
($)
(a)
|
Number
of
Shares
Acquired
on
Vesting
(#)
|
Value
Realized
on
Vesting
($)
(b)
|
||||||||||||
Michael
D. Casey
|
-- | $ | -- | 6,000 | $ | 125,520 | ||||||||||
Andrew
B. North
|
-- | $ | -- | 1,800 | $ | 36,329 | ||||||||||
James
C. Petty
|
-- | $ | -- | 2,500 | $ | 38,400 | ||||||||||
Frederick
J. Rowan, II
|
548,356 | $ | 9,353,608 | -- | $ | -- |
(a)
|
Aggregate
dollar amount was calculated by multiplying the number of shares acquired
by the difference between the market price of the underlying securities at
the time of exercise and the exercise price of the stock
options.
|
(b)
|
Aggregate
dollar amount was calculated by multiplying the number of shares acquired
on vesting by the market price of the Company’s stock on the date of
vesting.
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||||||||||||||
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
(Exercisable)
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
(a)
(Unexercisable)
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(b)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
(#)
(c)
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights
That Have
Not
Vested
($)
(d)
|
|||||||||||||||||||||
Michael
D. Casey
|
243,488 | -- | -- | $ | 3.08 |
8/15/2011
|
-- | $ | -- | |||||||||||||||||||
160,000 | 40,000 | -- | $ | 14.81 |
3/22/2014
|
-- | $ | -- | ||||||||||||||||||||
6,000 | 6,000 | -- | $ | 34.32 |
2/16/2016
|
-- | $ | -- | ||||||||||||||||||||
3,000 | 9,000 | -- | $ | 22.19 |
2/15/2017
|
-- | $ | -- | ||||||||||||||||||||
-- | 125,000 | -- | $ | 17.90 |
8/6/2018
|
-- | $ | -- | ||||||||||||||||||||
-- | -- | -- | $ | -- | -- | 90,000 | $ | 1,731,600 | ||||||||||||||||||||
Andrew
B. North
|
32,500 | -- | -- | $ | 6.98 |
9/17/2013
|
-- | $ | -- | |||||||||||||||||||
1,400 | 1,400 | -- | $ | 34.32 |
2/16/2016
|
-- | $ | -- | ||||||||||||||||||||
1,500 | 4,500 | -- | $ | 22.19 |
2/15/2017
|
-- | $ | -- | ||||||||||||||||||||
1,500 | 4,500 | -- | $ | 22.79 |
12/3/2017
|
-- | $ | -- | ||||||||||||||||||||
-- | -- | -- | $ | -- | -- | 5,100 | $ | 98,124 | ||||||||||||||||||||
Joseph
Pacifico
|
389,688 | -- | -- | $ | 3.08 |
8/15/2011
|
-- | $ | -- | |||||||||||||||||||
160,000 | 40,000 | -- | $ | 14.81 |
3/22/2014
|
-- | $ | -- | ||||||||||||||||||||
-- | -- | 200,000 | $ | 31.18 |
11/10/2015
|
-- | $ | -- | ||||||||||||||||||||
-- | 200,000 | -- | $ | 14.18 |
7/1/2018
|
-- | $ | -- | ||||||||||||||||||||
James
C. Petty
|
10,000 | 30,000 | -- | $ | 27.06 |
6/5/2017
|
-- | $ | -- | |||||||||||||||||||
-- | 75,000 | -- | $ | 14.18 |
7/1/2018
|
-- | $ | -- | ||||||||||||||||||||
-- | -- | -- | $ | -- | -- | 32,500 | $ | 625,300 | ||||||||||||||||||||
Charles
E. Whetzel, Jr.
|
389,688 | -- | -- | $ | 3.08 |
8/15/2011
|
-- | $ | -- | |||||||||||||||||||
45,000 | 15,000 | -- | $ | 22.01 |
5/13/2015
|
-- | $ | -- | ||||||||||||||||||||
-- | 40,000 | -- | $ | 14.18 |
7/1/2018
|
-- | $ | -- | ||||||||||||||||||||
-- | -- | -- | $ | -- | -- | 50,000 | $ | 962,000 | ||||||||||||||||||||
Frederick
J. Rowan, II
|
1,060,710 | -- | -- | $ | 3.08 |
8/1/2011
|
-- | $ | -- |
(a)
|
Unexercised
options relate to the following
awards:
|
(i)
|
Mr. Casey
was granted 200,000 time-based stock options on March 22, 2004 with a
Black-Scholes fair value of $6.56 per share and an exercise price of
$14.81 per share. These stock options vest in five equal,
annual installments following the date of grant. Mr. Casey
was also granted 12,000 time-based stock options on both February 16,
2006 and February 15, 2007 with a Black-Scholes fair value of $15.59 per
share and $10.01 per share, and an exercise price of $34.32 per share and
$22.19 per share, respectively. In addition, Mr. Casey was
granted 125,000 time-based stock options on August 6, 2008 with a
Black-Scholes fair value of $7.13 per share and an exercise price of
$17.90 per share. The stock options granted to Mr. Casey in
fiscal 2006, 2007, and 2008 vest in four equal, annual installments
following the date of grant.
|
(ii)
|
Mr. North
was granted 2,800 time-based stock options on February 16, 2006 with a
Black-Scholes fair value of $15.59 per share and an exercise price of
$34.32 per share. Mr. North was also granted 6,000
time-based stock options on February 15, 2007 with a Black-Scholes
fair value of $10.01 per share and an exercise price of $22.19 per
share. In addition, Mr. North was granted 6,000 time-based
stock options on December 3, 2007 with a Black-Scholes fair value of $9.15
per share and an exercise price of $22.79 per share. The stock
options granted to Mr. North in fiscal 2006 and 2007 vest in four equal,
annual installments following the date of
grant.
|
(iii)
|
Mr. Pacifico
was granted 200,000 time-based stock options on March 22, 2004 with a
Black-Scholes fair value of $6.56 per share and an exercise price of
$14.81 per share. These stock options vest in five equal,
annual installments following the date of grant. Mr. Pacifico
was also granted 200,000 time-based stock options on July 1, 2008 with a
Black-Scholes fair value of $4.89 per share and an exercise price of
$14.18 per share. These stock options vest in three equal,
annual installments following the date of
grant.
|
(iv)
|
Mr.
Petty was granted 40,000 time-based stock options on June 5, 2007 with a
Black-Scholes fair value of $12.15 per share and an exercise price of
$27.06 per share. Mr. Petty was also granted 75,000 time-based
stock options on July 1, 2008 with a Black-Scholes fair value of $5.82 per
share and an exercise price of $14.18 per share. The stock
options granted to Mr. Petty in fiscal 2007 and 2008 vest in four equal,
annual installments following the date of
grant.
|
(v)
|
Mr. Whetzel
was granted 60,000 time-based stock options on May 13, 2005 with a
Black-Scholes fair value of $8.71 per share and an exercise price of
$22.01 per share. Mr. Whetzel was also granted 40,000
time-based stock options on July 1, 2008 with a Black-Scholes fair value
of $5.82 per share and an exercise price of $14.18 per
share,. The stock options granted to Mr. Whetzel in fiscal 2005
and 2008 vest in four equal, annual installments following the date of
grant.
|
(b)
|
Unexercised,
unearned stock options relate to the following
awards:
|
(i)
|
Mr. Pacifico
was granted 200,000 performance-based stock options on November 10,
2005 with a Black-Scholes fair value of $12.68 and an exercise price of
$31.18 per share. Subject to the achievement of individual and
Company performance targets, these stock options vest in
February 2010. We have assumed that these performance
criteria will not be met and that these shares will not
vest.
|
(c)
|
Equity
Incentive Plan awards relate to the following
grants:
|
(i)
|
Mr. Casey
was granted 12,000 shares of restricted stock on both February 16,
2006 and February 15, 2007 with a grant date fair value of $34.32 per
share and $22.19 per share. These grants vest in four equal,
annual installments following the date of grant. Mr. Casey was
also granted 75,000 shares of performance-based restricted stock on August
7, 2008 with a grant date fair value of $17.92 per share. Fifty
percent of these shares will be eligible to vest upon the Company’s
reporting of adjusted EPS growth in fiscal 2009 (over fiscal 2008) and in
fiscal 2010 (over fiscal 2009) of at least 4%. If this
threshold earnings per share growth is achieved in fiscal 2009 and 2010,
then these eligible shares will vest, in varying percentages, from 33% to
100%, based on the Company’s compound annual growth rate in earnings per
share from fiscal 2009 to 2010 ranging between 4% and 8%. The
remaining 50% of these shares will then vest in equal amounts on December
31, 2011 and December 31, 2012 based on his continued employment with the
Company. In fiscal 2008, we have assumed that these performance
criteria will be met and that these shares will
vest.
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(ii)
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Mr.
North was granted 1,200 shares of restricted stock on February 16,
2006 with a grant date fair value of $34.32 per share. Mr.
North was also granted 3,000 shares of restricted stock on both February
15, 2007 and December 3, 2007 with a grant date fair value of $22.19 and
$22.79 per share, respectively. All grants vest in four equal,
annual installments following the date of
grant.
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(iii)
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Mr.
Petty was granted 10,000 shares of restricted stock on June 5, 2007 with a
grant date fair value of $27.06 per share. Mr. Petty was also
granted 25,000 shares of restricted stock on July 1, 2008 with a grant
date fair value of $14.18 per share. Both grants vest in four
equal, annual installments following the date of
grant.
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(iv)
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Mr. Whetzel
was granted 40,000 shares of restricted stock on May 13, 2005 with a
grant date fair value of $22.01 per share. These shares cliff
vest on May 13, 2009. We have assumed these shares will
vest on May 13, 2009 and in accordance with SFAS 123R, we record the
related expense for these grants ratably over the four-year vesting
period. Mr. Whetzel was also granted 10,000 shares of
restricted stock on July 1, 2008 with a grant date fair value of $14.18
per share. This grant vests in four equal, annual installments
following the date of grant.
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