NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
OF
DAYTON SUPERIOR
CORPORATION
7777 Washington Village Drive, Suite 130
Dayton, Ohio 45459
To our Stockholders:
The Annual Meeting of Stockholders of Dayton Superior
Corporation, a Delaware corporation, will be held at the Dayton
Superior Conference Center, 721 Richard Street, Miamisburg, Ohio
45342, on Tuesday, April 22, 2008, at 9:00 a.m.,
Eastern Daylight Savings Time, for the following purposes:
|
|
|
|
|
to elect two directors; and
|
|
|
|
to transact such other business as may properly come before the
Annual Meeting or any adjournment of the Annual Meeting. We
currently are not aware of any other business to be presented at
the Annual Meeting.
|
Our Board of Directors has fixed the close of business on
March 11, 2008 as the record date for determining the
stockholders entitled to vote at the Annual Meeting. You are
only entitled to vote if you are a stockholder of record at the
close of business on that date. This Proxy Statement and
accompanying proxy card are being mailed to stockholders
beginning on or about March 24, 2008.
Your vote is important. Even if you only own a few shares of
Dayton Superior Corporation common stock, we want your shares to
be represented at the meeting. We encourage you to vote your
shares promptly. You may vote by Internet or telephone as
described in the voting instructions on the proxy or you may
date, sign and return the proxy in the enclosed envelope. You
may vote in person at the Annual Meeting even if you previously
submitted your proxy by Internet, telephone or mail.
By Order of the Board of Directors
Thomas W. Roehrig
Corporate Secretary
Dayton, Ohio
March 24, 2008
DAYTON
SUPERIOR CORPORATION
7777 Washington Village Drive, Suite 130
Dayton, Ohio 45459
PROXY STATEMENT
FOR
2008 ANNUAL MEETING OF
STOCKHOLDERS
GENERAL
INFORMATION
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Dayton Superior
Corporation, a Delaware corporation, of proxies to be used at
the Annual Meeting of Stockholders to be held at 9:00 a.m.,
Eastern Daylight Savings Time on April 22, 2008 or any
adjournments thereof. Unless otherwise noted, when used in this
Proxy Statement the terms Dayton Superior,
we, us and our refer to
Dayton Superior Corporation. We are mailing this Proxy Statement
and the accompanying proxy card to our stockholders beginning on
or about March 24, 2008. Our Board is soliciting your proxy
in order to give all stockholders of record the opportunity to
vote on matters that will be presented at the Annual Meeting.
This Proxy Statement provides you with information on these
matters to assist you in voting your common stock. Our 2007
Annual Report to Stockholders also is enclosed.
Important Notice Regarding the Availability of Proxy
Materials for the Stockholder Meeting to be held on
April 22, 2008:
Our 2007 Annual Report to Stockholders
and this Proxy Statement are available at
www.daytonsuperior.com
in accordance with new rules of
the Securities and Exchange Commission.
How do
proxies work?
Our Board of Directors is asking for your proxy. Giving the
Board your proxy means that you authorize the individuals
designated as proxies on the enclosed proxy card to vote your
shares at the Annual Meeting in the manner you direct. You may
vote for both, one, or none of the director nominees.
Your proxy card covers all shares registered in your name.
If you give the Board your signed proxy but do not specify how
to vote, the individuals named as proxies will vote your shares:
|
|
|
|
|
FOR
both of the director nominees; and
|
|
|
|
In accordance with their judgment upon such other matters as may
properly come before the meeting.
|
If you hold our shares through someone else, such as a
stockbroker, you may receive material from that person or firm
asking how you want to vote those shares. Review the voting form
used by that person or firm to see if it offers Internet or
telephone voting, and follow the voting instructions on that
form.
Who is
qualified to vote?
You are qualified to receive notice of the Annual Meeting and to
vote if you own shares of our common stock at the close of
business on March 11, 2008, which is the record date for
the Annual Meeting.
How many
shares of common stock may vote at the Annual Meeting?
As of March 11, 2008, we had 19,066,212 shares of our
common stock outstanding and entitled to vote. Each share of
common stock is entitled to one vote on each matter presented
for a vote at the Annual Meeting.
What is
the difference between a stockholder of record and a
street name holder?
These terms describe how your shares are held. If your shares
are registered directly in your name with American Stock
Transfer & Trust Company, our transfer agent, you
are a stockholder of record. If your shares are held
in the name of a brokerage, bank, trust or other nominee as a
custodian, you are a street name holder.
How do I
vote my common stock?
If you are a stockholder of record,
you have
three choices. You can vote your proxy:
(i) by mailing in the enclosed proxy card;
(ii) over the telephone; or
(iii) via the Internet.
Please refer to the specific instructions set forth on the
enclosed proxy card.
If you hold your shares in street name,
your
broker, banker, trustee or nominee will provide you with
materials and instructions for voting your shares.
Can I
vote my common stock in person at the Annual Meeting?
If you are a stockholder of record,
you may
vote your shares in person at the Annual Meeting.
If you hold
your shares in street name,
you must obtain a
proxy from your broker, banker, trustee or nominee, giving you
the right to vote the shares at the Annual Meeting.
The chairman of the meeting has broad authority to conduct the
Annual Meeting in an orderly manner. This authority includes
establishing rules for stockholders who wish to address the
meeting. Copies of any rules will be available at the meeting.
The chairman also may exercise broad discretion in recognizing
stockholders who wish to speak and in determining the extent of
discussion on each item of business. In light of the need to
conclude the meeting within a reasonable period of time, we
cannot assure that every stockholder who wishes to speak on an
item of business will be able to do so.
What are
the Boards recommendations as to how I should vote my
common stock?
The Board recommends that you vote your common stock as follows:
FOR
the election of the two director nominees to our
Board.
What are
my choices when voting?
Election of Directors.
You may
(a) vote in favor of all nominees, (b) withhold your
vote as to all nominees, or (c) withhold your vote as to
specific nominees.
How will
my common stock be voted if I do not specify how it should be
voted?
IF YOU SUBMIT YOUR PROXY WITHOUT INDICATING HOW YOU WANT YOUR
COMMON STOCK TO BE VOTED, THE PERSONS NAMED ON THE PROXY CARD
WILL VOTE YOUR COMMON STOCK ACCORDING TO THE BOARDS
RECOMMENDATIONS THAT ARE LISTED ABOVE.
As to any other business that may properly come before the
Annual Meeting, the persons named on the proxy card will vote in
accordance with their best judgment. We do not presently know of
any other business.
How many
shares of common stock constitute a quorum for the Annual
Meeting?
The holders of shares of common stock entitling them to a
majority of the voting power of the outstanding shares of common
stock entitled to vote at the Annual Meeting must be present in
person or by proxy to constitute a quorum for conducting
business. Shares represented by proxies we receive will be
counted as present at the Annual Meeting for purposes of
determining the existence of a quorum, regardless of how or
whether the shares are voted on
2
a specific proposal. Abstentions and broker non-votes are
counted as shares present at the meeting for purposes of
determining the presence of a quorum.
What vote
is required to approve each proposal?
The two director nominees receiving the greatest number of votes
at the Annual Meeting will be elected. Abstentions and broker
non-votes will not affect the outcome of the election.
Do
stockholders have cumulative voting rights?
The holders of our common stock do not have cumulative voting
rights.
Can I
change my vote after I have submitted my proxy?
You may revoke your proxy by doing one of the following:
|
|
|
|
|
sending a written notice of revocation (stating that you revoke
your proxy) to our Secretary so that he receives it before the
Annual Meeting;
|
|
|
|
delivering to our Secretary a later-dated proxy by telephone, on
the Internet or in writing so that he receives it before the
Annual Meeting in accordance with the instructions included in
the proxy card; or
|
|
|
|
attending the Annual Meeting and voting your common stock in
person.
|
Who will
count the votes?
We will appoint one or more inspectors of elections who will be
present at the Annual Meeting and will count the number of
shares of common stock represented in person or by proxy at the
Annual Meeting to determine whether a quorum is present and will
count the number of votes cast to determine the outcome of any
other matters to be considered at the Annual Meeting.
Who pays
the cost of this proxy solicitation?
We will pay the cost of soliciting proxies sought by the Board.
In addition to solicitation of proxies by use of the mail,
certain of our directors, officers and regularly engaged
employees, without extra compensation, may solicit proxies by
telephone, telegraph, or personal contact. Upon request, we will
reimburse brokers, dealers, bankers and trustees, or their
nominees, for reasonable expenses incurred by them in forwarding
proxy materials to beneficial owners of our common stock.
Where is
the Annual Meeting?
The meeting will be held at the conference center at our offices
at 721 Richard Street, Miamisburg, Ohio.
Who may I
contact if I have questions?
If you have questions or need more information about the Annual
Meeting, call or write to:
Thomas W. Roehrig, Secretary
Dayton Superior Corporation
7777 Washington Village Drive, Suite 130
Dayton, Ohio 45459
(937) 428-7172
3
BOARD OF
DIRECTORS
Classification
of the Board
Our Board of Directors consists of seven directors. The Board is
divided into three classes with the directors in each class
elected for three-year terms; however, at the time of our
initial public offering in December, 2006, we staggered the
initial terms of the three classes so that the term of one of
the classes would expire at each of the following three Annual
Meetings. Each year, the directors of one of the classes will
stand for election by the stockholders at our Annual Meeting.
At our 2008 Annual Meeting, the terms of Douglas W. Rotatori and
Eric R. Zimmerman will expire. Our Board has nominated each of
them for re-election to a three-year term at our 2008 Annual
Meeting, and both have agreed to serve if elected. If elected,
each of them will serve on the Board until our Annual Meeting in
2011 or until his successor is elected and qualified. In the
event that either nominee becomes unable to accept election, the
persons designated as proxies on the proxy card may vote for
other person(s) selected by the Board. We have no reason to
believe that either of the nominees will be unable to serve.
Because only approximately one-third of our directors are
elected at each annual meeting, two annual meetings of
stockholders could be required for the stockholders to change a
majority of our Board.
Director
Qualifications
Our Corporate Governance and Nominating Committee is responsible
for reviewing with the Board, on an annual basis, the
appropriate characteristics, skills, and experience required for
the Board as a whole and its individual members and recommending
nominees to the Board. In evaluating the suitability of
individual candidates (both new candidates and current Board
members), the Corporate Governance and Nominating Committee and
the Board take into account many factors, including:
|
|
|
|
|
the ability to make independent analytical inquiries,
|
|
|
|
general understanding of marketing, finance and other elements
relevant to the success of a publicly-traded company in
todays business environment,
|
|
|
|
understanding of the Companys business on a technical
level,
|
|
|
|
other board service, and
|
|
|
|
educational and professional background.
|
Each candidate nominee must also possess fundamental qualities
of:
|
|
|
|
|
personal and professional integrity, ethics and values,
|
|
|
|
intelligence,
|
|
|
|
practical and mature business judgment,
|
|
|
|
fairness, and
|
|
|
|
responsibility.
|
The Board evaluates each individual in the context of the Board
as a whole, with the objective of assembling a group that can
best perpetuate the success of the business and represent
stockholder interests through the exercise of sound judgment
using its diversity of experience in these various areas. In
determining whether to recommend a director for re-election, the
Corporate Governance and Nominating Committee also considers the
directors past attendance at meetings and participation in
and contributions to the activities of the Board.
Director
Nomination Process
The Corporate Governance and Nominating Committee utilizes a
variety of methods for identifying and evaluating nominees for
director. Candidates may come to the attention of the Corporate
Governance and Nominating Committee through current Board
members, professional search firms, stockholders or other
persons.
4
These candidates are evaluated at regular or special meetings of
the Corporate Governance and Nominating Committee and may be
considered at any point during the year. Prior to the issuance
of the proxy statement for the annual meeting of stockholders,
the Corporate Governance and Nominating Committee considers all
recommendations and suggestions for nominees.
Stockholders may submit a recommendation for a director
candidate by certified mail, return receipt requested, to:
Corporate Governance and Nominating Committee
c/o Dayton
Superior Corporation
7777 Washington Village Drive, Suite 130
Dayton, Ohio 45459
All recommendations submitted by stockholders will be screened
by the Corporate Governance and Nominating Committee and must
satisfy the general director qualifications set forth above,
agree to accept nomination for Board candidacy, meet the
standards of independence established by the Nasdaq Global
Market and the SEC, and meet all other applicable laws, rules
and regulations related to service as a director. Candidates may
be interviewed by the Corporate Governance and Nominating
Committee and other Board members as appropriate.
Director
Attendance
The Board of Directors held ten meetings in 2007. All of the
directors attended at least 75% of the meetings of the Board of
Directors and each committee on which they served.
Attendance
by the Directors at the Annual Meeting
While we do not have a policy with respect to attendance by the
directors at our Annual Meetings, we do strongly encourage all
of our directors to attend. Three of the six directors we then
had attended our 2007 Annual Meeting.
CORPORATE
GOVERNANCE
Corporate
Governance Guidelines and Code of Business Conduct and
Ethics
Our Board has adopted Corporate Governance Guidelines to assist
the Board in the exercise of its responsibilities and to serve
the interests of the Company and its stockholders. Our Corporate
Governance Guidelines are available on our website at
www.daytonsuperior.com and to any stockholder who requests a
copy from our Secretary.
Our Board also has adopted a Code of Business Conduct and Ethics
applicable to our directors, officers and employees. Our Code of
Business Conduct and Ethics is available on our website at
www.daytonsuperior.com and to any stockholder who requests a
copy from our Secretary.
Independent
Directors
We currently are a controlled company as defined
under the listing standards of the Nasdaq Global Market because
Odyssey Investment Partners Fund, LP (Odyssey)
controls more than 50% of our voting power. As a result, we are
not required to have a majority of independent directors on our
Board or to have compensation and corporate governance and
nominating committees comprised of independent directors.
Effective with the first anniversary of our initial public
offering all of the members of our Audit Committee are required
to be independent, as determined under applicable Nasdaq listing
standards and SEC regulations. Our Board has determined that all
of the members of our Audit Committee are independent under the
applicable Nasdaq listing standards and SEC regulations.
Because Odyssey controls a majority of our voting power, it has
the power to control our affairs and policies. Odyssey also
controls the election of our directors and the appointment of
our management. Three of our seven directors are associated with
Odyssey.
5
Committees
of the Board
The Board appoints committees of directors to help carry out its
duties. Our Board has a standing Audit Committee, Compensation
Committee, and Corporate Governance and Nominating Committee.
Each of the standing committees operates under a charter adopted
by our Board and is required to report the results of its
meetings to the full Board. The charter for each of our Board
committees can be accessed on our website at
www.daytonsuperior.com.
Audit
Committee
|
|
|
Function:
|
|
The Audit Committee is responsible for overseeing the accounting
and financial reporting processes of the Company and the audits
of our financial statements. This includes, among other things,
selecting our independent auditors, reviewing our internal
accounting and audit processes to ensure their integrity,
overseeing the relationship with our independent auditors,
reviewing compliance with legal and regulatory requirements,
reviewing significant accounting policies and controls, and
reviewing and approving all related party transactions. The
Board has determined that, as required by our Corporate
Governance Guidelines and Nasdaq listing standards, all members
of the Audit Committee are financially literate (meaning they
can read and understand fundamental financial statements) and
that Mr. Berzin has accounting or related financial
management expertise. The Board has also determined that
Mr. Berzin qualifies as an audit committee financial expert
under applicable SEC regulations.
|
|
Meetings:
|
|
The Audit Committee held nine meetings in 2007.
|
|
Members:
|
|
The members of the Audit Committee are Messrs. Berzin
(chair), Hinkel and Nurkin, each of whom satisfies the
independence requirements of the SEC regulations and Nasdaq
listing standards. You can find the Report of the Audit
Committee on page 26 of this Proxy Statement.
|
Compensation
Committee
|
|
|
Function:
|
|
The Compensation Committee is responsible for, among other
things, reviewing and approving our goals and objectives
relevant to compensation; designing, recommending to the Board
for approval, and evaluating our compensation plans, policies,
and programs; staying informed as to market levels of
compensation; and recommending to the Board compensation levels
and systems for the Board and our Chief Executive Officer. The
compensation of our Chief Executive Officer is determined solely
by the Compensation Committee and the compensation of our other
officers is approved by our Board of Directors based on
recommendations by Mr. Zimmerman and the Compensation
Committee.
|
|
Meetings:
|
|
The Compensation Committee held six meetings in 2007.
|
|
Members:
|
|
The members of the Compensation Committee are
Messrs. Berger (chair), Hopkins and Rotatori. Because we
are a controlled company as defined in the Nasdaq
listing standards, we are not required to have a majority of
independent directors on our Compensation Committee.
|
Corporate
Governance and Nominating Committee
|
|
|
Function:
|
|
The Corporate Governance and Nominating Committee is responsible
for, among other things:
|
|
|
|
all aspects of the Companys corporate
governance functions,
|
|
|
|
recommending director candidates to the Board,
|
|
|
|
assisting the Board in determining the composition
and size of the Board and its committees,
|
|
|
|
overseeing the evaluation of our Board and
management,
|
|
|
|
making recommendations to our Board for the creation
of additional committees or the elimination of certain
committees,
|
6
|
|
|
|
|
in appropriate circumstances, recommending the
removal of a director for cause, and
|
|
|
|
reviewing governance-related shareholder proposals
and recommending Board responses.
|
|
Meetings:
|
|
The Corporate Governance and Nominating Committee held one
meeting in 2007.
|
|
Members:
|
|
The members of the Corporate Governance and Nominating Committee
are Messrs. Hopkins (chair), Rotatori and Zimmerman.
Because we are a controlled company as defined in
the Nasdaq listing standards, we are not required to have a
majority of independent directors on our Corporate Governance
and Nominating Committee.
|
Special
Committee
In addition to our standing committees, in October, 2007 the
Board of Directors established a Special Committee consisting
solely of outside directors for the purpose of evaluating a
possible strategic transaction involving the Company. The
Special Committee was active until December, 2007 when the
evaluation of the possible transaction terminated. The members
of the Special Committee were Messrs. Berzin and Nurkin.
Communications
with Board of Directors
Stockholders and others may communicate with the Board by
written correspondence addressed to:
Mr. Stephen Berger
Chairman of the Board
Dayton Superior Corporation
7777 Washington Village Drive, Suite 130
Dayton, Ohio 45459
Related
Party Transactions
Since January 1, 2007 there has not been, nor is there
currently proposed, any transactions or series of similar
transactions to which we were, or are to be, a party in which
the amount involved exceeds $120,000 and in which any director,
executive officer or holder of more than 5% of our common stock,
or an immediate family member of any of the foregoing, had or
will have a direct or indirect interest other than the
transactions described below. All such related party
transactions must be reviewed and approved in advance by our
Audit Committee.
Certain Loans.
In connection with our 2000
recapitalization, we entered into rollover
agreements with Raymond E. Bartholomae and Thomas W. Roehrig,
each of whom is or was an executive officer. Generally, the
rollover agreements required each executive officer
to retain stock and, in most cases, stock options, with a
specified aggregate value following the recapitalization. In
some cases, the executive officer agreed to exercise stock
options in order to obtain some of the common stock which he
agreed to retain following the recapitalization. These
agreements provided that if the executive officer exercised
stock options in order to obtain some of the common stock he was
required to retain and if he so requested, we would make a
non-interest bearing, recourse loan to him in an amount equal to
the exercise price of the options plus the estimated federal and
state income tax liability he incurred in connection with the
exercise. If the executive officer purchased some of the common
stock he was required to retain and if he so requested, we made
a 6.39% interest deferred recourse loan to him. These loans are
secured by a pledge of the shares issued. As of
February 29, 2008, the amounts outstanding under these
loans were $517,590 for Mr. Bartholomae and $54,639 for
Mr. Roehrig.
Voting Agreement.
Pursuant to the terms of a
voting agreement, as amended, Messrs. Zimmerman, Puisis and
Bartholomae appointed Odyssey to act as their attorney-in-fact
to vote or act by written consent with respect to the common
stock they hold in connection with any and all matters. The
voting agreement will terminate upon the first date on which we
satisfy the listing requirements of the Nasdaq Global Market for
a company not entitled to the benefits of the controlled
company exemption under Nasdaq rules. The voting agreement
also may be terminated by any party as to that party at any time
upon 30 calendar days prior written notice to each of the
other parties. Parties to the voting agreement will also be
released from the terms of the voting agreement upon the
disposition of
7
all of their equity interests in us (or any successor to us by
merger), and shares of stock that have been sold by parties to
the voting agreement will no longer be subject to any provision
of the voting agreement.
Odyssey Reimbursement.
In 2007, we reimbursed
Odyssey for travel, lodging, and meals of approximately $86,000.
Indemnification.
We have entered into
indemnification agreements with each of our directors and
executive officers. These indemnification agreements require us,
among other things, to indemnify our directors and executive
officers for some expenses, including attorneys fees,
judgments, fines and settlement amounts incurred by a director
or executive officer in any action or proceeding arising out of
his service as one of our directors or executive officers, or
any of our subsidiaries or any other company or enterprise to
which the person provides services at our request, and require
us to obtain directors and officers insurance if
available on reasonable terms. We believe these provisions and
agreements are necessary to attract and retain qualified
individuals to serve as directors and executive officers.
ELECTION
OF DIRECTORS
The terms of directors Douglas W. Rotatori and Eric R. Zimmerman
(who are serving in the class of directors referred to in our
certificate of incorporation as the Class II directors)
expire at our Annual Meeting. The Board, upon recommendation of
the Corporate Governance and Nominating Committee, has nominated
Messrs. Rotatori and Zimmerman for re-election to the Board
to serve until the 2011 Annual Meeting of Stockholders. Our
other directors have terms that do not expire at this meeting.
Personal information for each of our directors, including the
nominees, is provided below.
If a nominee becomes unavailable before the election, your proxy
authorizes the individuals designated as proxies to vote for a
replacement nominee if the Board names one.
The Board recommends that you vote FOR each of the nominees
set forth below:
NOMINEES
(CLASS II)
(Term expires in 2011)
Douglas
W. Rotatori
Mr. Rotatori, age 47, has been a director since 2000.
Mr. Rotatori has been a Managing Principal of Odyssey
Investment Partners, LLC since October 2004 and a Principal
since 1998. Mr. Rotatori is a member of our Compensation
Committee and Corporate Governance and Nominating Committee.
Eric
R. Zimmerman
Mr. Zimmerman, age 57, has been President, Chief
Executive Officer and a director since August 2005.
Mr. Zimmerman served as President of the Gilbarco
International and Service Station Equipment units of Gilbarco
Inc. from 1998 to 2003. Mr. Zimmerman is a member of our
Corporate Governance and Nominating Committee.
CONTINUING
DIRECTORS (CLASS I)
(Term expires in 2010)
Stephen
Berger
Mr. Berger, age 68, has served as Chairman of our
Board of Directors since August 2005 and has been a director
since 2000. Mr. Berger has been chairman of Odyssey
Investment Partners, LLC since 1997. Mr. Berger is a
director and a member of the Executive Committee of the Board of
Directors of Dresser, Inc. Mr. Berger is chair of our
Compensation Committee.
8
Joseph
D. Hinkel
Mr. Hinkel, age 59, has been a director since December
2007. Mr. Hinkel has served as an independent financial
consultant since November 2006. From June 2002 to October 2006
he was a Managing Director of KPMG, LLP. Mr. Hinkel is a
member of our Audit Committee.
William
F. Hopkins
Mr. Hopkins, age 44, has been a director since 2000.
Mr. Hopkins has been a member and Managing Principal of
Odyssey Investment Partners, LLC since 1997. Mr. Hopkins is
a member of our Compensation Committee and chair of our
Corporate Governance and Nominating Committee.
CONTINUING
DIRECTORS (CLASS III)
(Term expires in 2009)
Steven
M. Berzin
Mr. Berzin, age 57, has been a director of our Company
since December 2006. From 2005 to 2006, Mr. Berzin served
as Executive Vice President of the New York City Economic
Development Corporation. Since 2005, Mr. Berzin has served
as a trustee of the Immune Disease Institute, Inc. and currently
serves as its Treasurer and as Chair of its Boards Finance
Committee. From 2001 to 2005 Mr. Berzin served on the
Resource Committee on Graduate Fellowships at Harvard
University, and from 2002 to 2005 Mr. Berzin served as a
director of CDC IXIS Financial Guaranty North America, Inc.
Mr. Berzin has also held a variety of senior offices with
W.P. Carey & Co., Inc., General Electric Capital
Corporation and Financial Guaranty Insurance Company.
Mr. Berzin is chair of our Audit Committee.
Sidney
J. Nurkin
Mr. Nurkin, age 66, has been a director since March
2007. Mr. Nurkin serves as Counsel of the law firm of
Alston & Bird, LLP. Prior to his retirement on
December 31, 2006, Mr. Nurkin was a partner in the law
firm of Alston & Bird, LLP for more than five years.
Mr. Nurkin is a member of our Audit Committee.
Director
Compensation
We reimburse the members of our Board of Directors for their
out-of-pocket expenses. Our outside directors, who are those
directors who are neither employed by us or by any subsidiary or
affiliate of Odyssey, also are compensated by us for their
service on the Board. Each of our outside directors receives an
annual retainer fee of $25,000 paid in cash in four $6,250
quarterly installments. The outside directors also receive a fee
of $1,500 for each board meeting and, if a member of the Audit
Committee, each meeting of the Audit Committee attended in
person ($750 if the meeting is telephonic). The chair of the
Audit Committee receives an additional $15,000 per year. In 2007
the outside directors who were members of a Special Committee
that was active only during that year each received an
additional fee of $35,000.
Following the initial election or appointment of an outside
director, we also will grant the director a stock option with an
exercise price equal to the greater of the closing market price
of our common stock on the date of grant or, if the outside
director was first elected or appointed prior to June 22,
2007, $12.00 per share (which is the price at which we sold our
common stock in our initial public offering in December,
2006) and covering a number of shares calculated so that
the value of the option on the date of grant is $45,000 (rounded
to the nearest whole share). These options have a
10-year
term
and are exercisable immediately. On April 20, 2007, we
granted such an option to each of Messrs. Berzin and
Nurkin, two outside directors, covering 8,936 shares of our
common stock with an exercise price of $12.00 per share. In
addition, on December 17, 2007, we granted such an option
to Mr. Hinkel, an outside director, covering
17,219 shares of our common stock with an exercise price of
$4.12 per share. Mr. Hinkel became a director on
December 10, 2007.
9
The following table shows the compensation we paid to the
outside directors who served on the Board at any time during
2007, for their service during the period from January 1,
2007 through December 31, 2007.
Director
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned or Paid in Cash ($)
|
|
|
Option Awards ($)
|
|
|
Total ($)
|
|
|
Steven M. Berzin
|
|
$
|
95,250
|
|
|
$
|
6,263
|
|
|
$
|
101,513
|
|
Joseph D. Hinkel
|
|
$
|
1,511
|
|
|
$
|
23,232
|
|
|
$
|
24,743
|
|
Sidney J. Nurkin
|
|
$
|
68,685
|
|
|
$
|
6,263
|
|
|
$
|
74,948
|
|
OWNERSHIP
OF COMMON STOCK
General
As of February 29, 2008, 19,066,212 shares of our
common stock were outstanding. Pursuant to our certificate of
incorporation, we are authorized to issue up to
10,000,000 shares of preferred stock, but no preferred
stock was outstanding as of our record date. All holders of our
common stock are entitled to the same rights and privileges,
including one vote for each share held on all matters submitted
to a vote of stockholders at the Annual Meeting. Accordingly,
holders of a majority of the outstanding shares of common stock
are assured of being able to elect all of the directors standing
for election.
Principal
Holders of Common Stock
The following table sets forth as of February 29, 2008, to
our knowledge, information with respect to the beneficial owners
of more than five percent of our outstanding common stock. The
SEC has defined beneficial owner for this purpose to
include any person who has or shares voting power or investment
(dispositive) power with respect to the stock or has the right
to acquire beneficial ownership of the stock within
60 days. Unless otherwise noted, the individuals or
entities named in the following table have sole voting and
dispositive power.
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
Name and Address
|
|
Outstanding
|
|
|
Percent
|
|
of Beneficial Owner
|
|
Shares
|
|
|
of Class*
|
|
|
Odyssey Investment Partners Fund, LP
(1)(2)
|
|
|
|
|
|
|
|
|
280 Park Avenue, West Tower, 38th Floor
|
|
|
|
|
|
|
|
|
New York, New York
|
|
|
10,222,015
|
|
|
|
53.6
|
%
|
DS Coinvestment I, LLC
|
|
|
|
|
|
|
|
|
DS Coinvestment II, LLC
|
|
|
|
|
|
|
|
|
Odyssey Coinvestors, LLC
|
|
|
|
|
|
|
|
|
Odyssey Capital Partners, LLC
|
|
|
|
|
|
|
|
|
Odyssey Investment Partners, LLC
|
|
|
|
|
|
|
|
|
Stephen Berger(3)
|
|
|
|
|
|
|
|
|
William F. Hopkins(3)
|
|
|
|
|
|
|
|
|
Brian Kwait(3)
|
|
|
|
|
|
|
|
|
Douglas W. Rotatori(3)
|
|
|
|
|
|
|
|
|
Raymond E. Bartholomae
|
|
|
|
|
|
|
|
|
Edward J. Puisis
|
|
|
|
|
|
|
|
|
Eric R. Zimmerman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morgan Stanley
|
|
|
1,263,839
|
(4)
|
|
|
6.6
|
%
|
1585 Broadway
|
|
|
|
|
|
|
|
|
New York, NY 10036
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
Name and Address
|
|
Outstanding
|
|
|
Percent
|
|
of Beneficial Owner
|
|
Shares
|
|
|
of Class*
|
|
|
Black River Asset Management LLC
|
|
|
1,332,800
|
(5)
|
|
|
7.0
|
%
|
12700 Whitewater Drive
|
|
|
|
|
|
|
|
|
Minnetonka, MN 55343
|
|
|
|
|
|
|
|
|
Black River Long/Short Fund Ltd.
|
|
|
|
|
|
|
|
|
Black River Commodity Equity Long/Short Fund Ltd.
|
|
|
|
|
|
|
|
|
Massachusetts Financial Services Company
|
|
|
1,315,250
|
(6)
|
|
|
6.9
|
%
|
500 Boylston Street
|
|
|
|
|
|
|
|
|
Boston, MA 02116
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Percentage is based on 19,066,212 shares of common stock
outstanding on February 29, 2008.
|
|
(1)
|
|
Consists of 9,120,685 shares of common stock owned by
Odyssey Investment Partners Fund, LP, certain of its affiliates
and certain co-investors (collectively, the Odyssey
Group) and 527,985 shares owned by
Mr. Zimmerman, 256,173 shares owned by Mr. Puisis
and 317,172 shares owned by Mr. Bartholomae.
Messrs. Zimmerman, Puisis, and Bartholomae are parties to a
voting agreement with Odyssey described above under the heading
Voting Agreement. Pursuant to the terms of the
voting agreement, Messrs. Zimmerman, Puisis and Bartholomae
have agreed that Odyssey will be designated as attorney-in-fact
to vote or act by written consent with respect to the common
stock owned by Messrs. Zimmerman, Puisis and Bartholomae.
Therefore, Messrs. Zimmerman, Puisis and Bartholomae have
sole dispositive power, but no voting power with respect to
their shares.
|
|
(2)
|
|
Includes 9,120,685 shares of common stock owned in the
aggregate by the Odyssey Group. Odyssey Capital Partners, LLC is
the general partner of Odyssey. Odyssey Investment Partners, LLC
is the manager of Odyssey. Each of Odyssey Investment Partners,
LLC and Odyssey Capital Partners, LLC is managed by a
three-person managing board, and all board action related to the
voting or disposition of this common stock requires approval of
a majority of the board. The members of the managing board are
Stephen Berger, William F. Hopkins and Brian Kwait. Therefore,
each may be deemed to share voting and dispositive power with
respect to the common stock deemed to be beneficially owned by
the Odyssey Group. Each of the managers disclaim beneficial
ownership.
|
|
(3)
|
|
Includes 9,120,685 shares of common stock owned in the
aggregate by the Odyssey Group. Messrs. Berger and Hopkins
are managing members of Odyssey Capital Partners, LLC and
Odyssey Investment Partners, LLC, and Mr. Rotatori is a
member of Odyssey Investment Partners, LLC. Therefore, each may
be deemed to share voting and dispositive power with respect to
the common stock deemed to be beneficially owned by the Odyssey
Group. Each of Messrs. Berger, Hopkins and Rotatori
disclaim beneficial ownership of this common stock.
|
|
(4)
|
|
As reported in a Schedule 13G dated December 31, 2007
filed with the SEC, Morgan Stanley has shared voting power with
respect to 329 of these shares and sole dispositive power with
respect to all of these shares.
|
|
(5)
|
|
As reported in a Schedule 13G dated December 31, 2007
filed with the SEC, Black River Asset Management LLC, an
investment advisor, with respect to shares of common stock held
by funds as to which it serves as investment advisor or manager,
possesses investment and/or voting power over the common stock
owned by such funds. Black River does not own any shares.
|
|
(6)
|
|
As reported in a Schedule 13G dated December 31, 2007
filed with the SEC, Massachusetts Financial Services Company, an
investment adviser, has sole voting power and sole dispositive
power with respect to all of these shares. The shares are
beneficially owned by Massachusetts Financial Services Company
and/or certain other non-reporting entities.
|
Stock
Ownership of Directors and Executive Officers
The following table shows the number of shares of our common
stock beneficially owned by each executive officer named in the
Summary Compensation Table on page 17 and each director and
nominee on February 29, 2008. This information is based on
data furnished by the person named. Except as set forth in the
table, none of our directors or executive officers beneficially
owned 1% or more of any class of equity security of the Company
11
outstanding as of February 29, 2008. Unless otherwise
indicated, the persons named have sole voting and dispositive
power with respect to the common stock reported.
|
|
|
|
|
|
|
|
|
Name of
|
|
Amount and Nature of
|
|
|
Percent
|
|
Beneficial Owner
|
|
Beneficial Ownership(1)
|
|
|
of Class*
|
|
|
Peter J. Astrauskas(1)
|
|
|
14,202
|
|
|
|
**
|
|
Raymond E. Bartholomae(1)(2)
|
|
|
341,996
|
|
|
|
1.8
|
|
Stephen Berger(3)
|
|
|
10,276,639
|
|
|
|
53.7
|
|
Steven M. Berzin(1)
|
|
|
23,936
|
|
|
|
**
|
|
Joseph D. Hinkel(1)
|
|
|
29,719
|
|
|
|
**
|
|
William F. Hopkins(3)
|
|
|
10,276,639
|
|
|
|
53.7
|
|
Sidney J. Nurkin(1)
|
|
|
8,936
|
|
|
|
**
|
|
Edward J. Puisis(1)(2)
|
|
|
285,973
|
|
|
|
1.5
|
|
Douglas W. Rotatori(3)
|
|
|
10,276,639
|
|
|
|
53.7
|
|
Keith M. Sholos(1)
|
|
|
1,290
|
|
|
|
**
|
|
Eric R. Zimmerman(2)
|
|
|
527,985
|
|
|
|
2.8
|
|
Directors and all executive officers as a group (a total of
13 people)(4)
|
|
|
10,372,310
|
|
|
|
54.1
|
|
|
|
|
*
|
|
Percentage is based on 19,066,212 shares of common stock
outstanding on February 29, 2008.
|
|
**
|
|
Signifies less than 1%.
|
|
(1)
|
|
Includes common stock subject to outstanding options which are
exercisable by such individuals within 60 days. The
following common stock subject to such options is included in
the totals: 4,335 shares for Mr. Astrauskas;
24,824 shares for Mr. Bartholomae; 8,936 shares
for Mr. Berzin; 17,219 shares for Mr. Hinkel;
8,936 shares for Mr. Nurkin; 29,800 shares for
Mr. Puisis and 1,290 shares for Mr. Sholos.
|
|
(2)
|
|
Pursuant to the terms of a voting agreement,
Messrs. Zimmerman, Puisis and Bartholomae have designated
Odyssey and certain of its affiliates as attorney-in-fact to
vote or act by written consent with respect to the shares of our
common stock owned by them. Thus, these individuals have sole
dispositive power, but no voting power, with respect to the
shares indicated.
|
|
(3)
|
|
Includes 9,120,685 shares of common stock owned by the
Odyessy group and 527,985 shares owned by
Mr. Zimmerman, 256,173 shares owned by Mr. Puisis
and 29,800 shares which may be acquired by Mr. Puisis
within 60 days upon the exercise of outstanding options,
and 317,172 shares owned by Mr. Bartholomae and
24,824 shares which may be acquired by Mr. Bartholomae
within 60 days upon the exercise of outstanding options, as
to which Odyessy has the sole voting power pursuant to a voting
agreement.
|
|
(4)
|
|
Includes 97,692 shares of common stock subject to
outstanding options which are exercisable within 60 days.
|
Section 16(a)
Beneficial Ownership Reporting Compliance
Ownership of and transactions in Company securities by executive
officers, directors, and certain beneficial stockholders of the
Company are required to be reported to the Securities and
Exchange Commission. Based solely on its review of Forms 3
and 4 furnished to the Company, the Company believes that all of
its executive officers, directors and applicable stockholders
complied with these filing requirements on a timely basis during
2007, except that Keith M. Sholos and Jeffrey S. Dawley each
filed a late Form 3 after becoming an executive officer of
the Company and Sidney J. Nurkin filed a Form 3 one day
late after becoming a director of the Company.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
The following Compensation Discussion and Analysis explains our
compensation program as it applies to Eric R. Zimmerman, our
President and Chief Executive Officer, Edward J. Puisis, our
Executive Vice President and
12
Chief Financial Officer, and our three other most highly
compensated executive officers who were serving on
December 31, 2007, each of whom is named in the Summary
Compensation Table below. We refer to these five individuals as
our named executive officers.
Objectives
Our executive compensation program has the following primary
overall objectives:
|
|
|
|
|
attract and maintain the management we need to lead our business;
|
|
|
|
motivate our executive officers and other executives to increase
stockholder value by aligning their interests with those of our
stockholders;
|
|
|
|
fairly compensate our executive officers and other executives
relative to the achievement of established objectives; and
|
|
|
|
recognize and reward those executive officers and other
executives whose performance exceeds the normal expectations and
requirements for their positions.
|
Process
for Setting Executive Compensation
Our executive compensation program consists of six elements:
base salary, annual incentive bonuses, long-term incentives,
perquisites, retirement and welfare benefits, and
severance/change in control benefits.
The Compensation Committee of our Board of Directors, which is
comprised of Stephen Berger (chair), William F. Hopkins and
Douglas W. Rotatori (each of whom is associated with Odyssey,
our controlling stockholder), annually reviews and approves the
base salary, annual incentive targets and long-term incentive
awards of Mr. Zimmerman and each of our other named
executive officers. The Compensation Committees review of
Mr. Zimmerman is conducted at an executive session at which
neither Mr. Zimmerman nor any other members of our
management is present. The Compensation Committees reviews
of our other executive officers are based on recommendations
from Mr. Zimmerman, and the executive officers whose
compensation is being reviewed are not present during the
reviews.
The Compensation Committee also periodically reviews the other
elements of our executive compensation program for our executive
officers such as retirement and welfare benefits, perquisites,
and severance and change in control benefits.
The agenda for each meeting of the Compensation Committee is
collectively agreed upon by the Chair of the Compensation
Committee and Mr. Zimmerman. The agenda typically includes
standing items covered regularly, generally at the same meeting
each year; other items a member of the Compensation Committee
has requested be included in the agenda; and items that
management recommends that the Compensation Committee consider.
Prior to our initial public offering in December, 2006, the
Compensation Committee was guided in its determinations by the
objectives and process described above and, in some cases, by
negotiations with individual executive officers, but without any
formal evaluation by the Compensation Committee of external
market considerations. In late 2006, with the approval of the
Compensation Committee, we engaged an outside compensation
consultant, Watson Wyatt Worldwide Consulting, to perform a
comprehensive review of all elements of our executive
compensation program. The primary objectives of this evaluation
are to:
|
|
|
|
|
analyze the market competitiveness of our existing compensation
programs;
|
|
|
|
identify any areas in which our executive compensation and
benefits vary from current market practice;
|
|
|
|
assist us in developing a compensation philosophy which defines
the market for executive talent, our desired competitive
positioning within the market, the relative mix and the
importance of the various components of compensation and our use
of personal benefits and perquisites, employment agreements and
severance arrangements;
|
13
|
|
|
|
|
review our current mix of salary and incentive compensation,
including the relative weighting of short-term versus long-term
incentives; and
|
|
|
|
assist us in developing an ongoing long-term incentive plan.
|
In 2007, Watson Wyatt completed their study of our executive
compensation program, comparing it to market data and a custom
group of companies it views as comparable to us. The results of
their study were presented to the Compensation Committee in
March 2007. The Compensation Committee has considered the
information presented in the Watson Wyatt report but as of this
time has not initiated any compensation program modifications
based on this information.
Components
of Executive Compensation
Base Salary.
When we employed
Mr. Zimmerman in 2005, we entered into an employment
agreement with him which specifies that his minimum annual base
salary will be $350,000. Similarly, when we employed
Mr. Puisis in 2003, we entered into an employment agreement
with him which specifies that his minimum annual base salary
will be $250,000. These employment agreements, including the
minimum base salary amounts, were negotiated with
Messrs. Zimmerman and Puisis by members of our Compensation
Committee and reflect what the Compensation Committee believed
were competitive salaries given the duties and responsibilities
of these officers, their level of experience, the amounts we
were paying our other executive officers, our size, the industry
in which we operate and our prior performance.
We also entered into an employment agreement with
Mr. Bartholomae in 2003, which we amended in 2005. While
that agreement does not specify the amount of base salary we
must pay Mr. Bartholomae, it does provide that he will have
good reason to resign his employment and receive
severance payments if we reduce his annual base salary below
$260,000. We do not have employment agreements with
Messrs. Sholos or Astrauskas. In 2007, the Compensation
Committee increased the base salaries of the named executive
officers from the base we paid them in 2006 as follows:
Mr. Zimmerman was increased to $450,000; Mr. Puisis
was increased to $290,000; Mr. Bartholomae was increased to
$290,000; Mr. Sholos was increased to $205,000 and
Mr. Astrauskas was increased to $185,000. The increases for
Messrs. Sholos and Astrauskas approved by the Compensation
Committee were based on recommendations by the President and
Chief Executive Officer, whose recommendations took into
consideration his view of each individuals performance in
2006, the Companys results achieved in 2006 and his view
of the level of their 2006 base salary in relation to the salary
ranges established for their position as validated by the Watson
Wyatt Executive Compensation Review. The base salaries of
Messrs. Zimmerman, Puisis, and Bartholomae were set by the
Compensation Committee based on negotiations in relation to
their respective employment contracts. In the case of Messer.
Puisis and Bartholomae recommendations from the President and
Chief Executive Officer also were considered by the Committee in
setting their 2007 base salaries.
Annual Incentive Bonuses.
We view annual
incentive bonuses as an important component of compensation for
our named executive officers. Based on the Compensation
Committees evaluation of our performance during 2007, we
paid cash bonuses in the following amounts to our named
executive officers: Mr. Zimmerman $414,655;
Mr. Puisis $214,166;
Mr. Bartholomae $164,166;
Mr. Sholos $77,366; and
Mr. Astrauskas $69,818. The bonuses were
approved by the Compensation Committee on February 20, 2008.
The Compensation Committee adopted an annual Executive Incentive
Plan for 2007 under which participating executives, including
our named executive officers, were awarded a bonus opportunity
equal to a specified percentage of their base salary, based on
the extent to which we achieved financial goals specified under
the plan. For the 2007 Executive Incentive Plan, the
Compensation Committee established two performance goals: EBIT
(which we define as income from operations) and cash flow (which
we define for incentive bonus purposes as EBIT, plus
depreciation and amortization, less facility closing and
severance expense, cash paid for income taxes, gain on sale of
rental equipment, and cash used in investing activities, and
adjusted to reflect changes in assets and liabilities, excluding
the effects of changes in accrued interest). The Compensation
Committee views EBIT and cash flow, as we define them, as key
measures of our operating performance. The EBIT goal for 2007
was $47.2 million, and the cash flow goal for 2007 was
$17.0 million. The Compensation Committee also concluded
that certain deferred revenue that was not able to be recognized
in 2007 for financial reporting purposes should be added back to
EBIT for purposes of 2007 performance.
14
Under the 2007 Executive Incentive Plan, no incentive bonus was
to be paid with respect to a performance measure unless we
achieved at least 90% of our goal for the performance measure
for the year, at which point each of the named executive
officers would receive 50% of his targeted bonus opportunity for
that performance measure. The percentage of the targeted bonus
opportunity to be paid with respect to a performance measure
would increase above 50% as our performance for the year
increased above 90% of the goal for the performance measure,
with a payout of 100% of the targeted bonus opportunity if we
achieved 100% of the goal for the performance measure. In
addition, for each $1 million by which we exceeded our EBIT
goal for the year, we also would pay each of the participants an
additional incentive bonus equal to the following percentage of
his base salary: Mr. Zimmerman 10%;
Messrs. Puisis and Bartholomae 7.5%; and
Messrs. Sholos and Astrauskas 5%.
The incentive bonus opportunity, as a percentage of base salary,
for each of our named executive officers for each of the two
performances measures if we reached 100% of our goal for the
performance measure was as follows: Mr. Zimmerman,
EBIT 60%; cash flow 40%;
Messrs. Puisis and Bartholomae, EBIT 45%; cash
flow 30%; and Messrs. Sholos and Astrauskas,
EBIT 30%; cash flow 20%. In the case of
our named executive officers other than Mr. Zimmerman,
those percentages were based on recommendations made by
Mr. Zimmerman and approved by the Compensation Committee.
Mr. Zimmermans employment agreement with us provides
that he will receive an annual performance-based incentive bonus
equal to 75% of his base salary, and the additional bonus
opportunity provided to him under the 2007 Executive Incentive
Plan was determined through negotiation by Mr. Zimmerman
with the Compensation Committee. For 2007, our performance
reached 91.8% of our EBIT goal and over 100% of our cash flow
goal, which resulted in the payouts under the 2007 Executive
Incentive Plan set forth in the Non-Equity Incentive Plan
Compensation column in the Summary Compensation Table
below. The Compensation Committee has the authority to make
adjustments to the performance measures under the 2007 Executive
Incentive Plan, and in 2007 it approved an additional incentive
of $75,000 for Mr. Zimmerman and $50,000 for
Mr. Puisis.
Long-term Incentives.
The long-term incentive
component of our compensation program typically has consisted of
stock options granted under our 2000 Stock Option Plan, as
amended. Prior to our initial public offering, we generally did
not make annual grants of stock options but rather relied on
grants we made following our 2000 recapitalization to those of
our executive officers who were employed by us at that time and
grants we thereafter made to new executive officers when they
were hired by us. We did not grant any stock options to any of
our named executive officers in 2007. The Compensation Committee
is currently evaluating the stock option component of its
compensation program.
On June 30, 2006, the Compensation Committee approved, and
we granted, 502,985 restricted shares of our common stock to
Mr. Zimmerman and 251,491 restricted shares of our common
stock to each of Messrs. Bartholomae and Puisis. The number
of shares were determined by the Compensation Committee based on
its evaluation of the performance of Mr. Zimmerman and his
senior management team in commencing a turnaround of our
performance and as an incentive to the three recipients to
encourage the continued improvement in our performance. The
amount of the grants also took into account the number of stock
options previously granted to these individuals
(Mr. Zimmerman was not granted any stock options when he
joined us). We believe that the vesting schedule associated with
restricted stock assists us in the retention of the executive
officers to whom we grant restricted stock. The terms of the
restricted stock are described under Restricted Stock
Awards on page 19.
We anticipate that we will adopt a new long-term incentive
program in the future but we do not yet know the form such a
program will take.
Perquisites and Other Personal Benefits.
We
provide certain perquisites and other personal benefits to our
named executive officers. The Compensation Committee believes
these perquisites are reasonable and appropriate. The
perquisites assist in the attraction and retention of our named
executive officers and, in the case of certain perquisites,
promote the health and efficiency of our named executive
officers.
Currently, these perquisites and other personal benefits consist
principally of life insurance, an automobile allowance and tax
planning assistance. We also reimburse Messrs. Zimmerman
and Astrauskas (each of whom maintains his primary residence
outside of the Dayton, Ohio area) for certain housing expenses
associated with maintaining a second residence near our
corporate headquarters, we reimburse Mr. Puisis for certain
commuting expenses and we reimburse Messrs. Zimmerman and
Puisis for membership fees in connection with their
15
membership in one country, alumni or social club. We also
reimburse Messrs. Zimmerman, Puisis and Astrauskas for the
taxes they are required to pay on certain of these benefits.
Retirement and Welfare Benefits.
Our named
executive officers participate on the same basis as our salaried
employees in our Employee Savings Plan (401(k) plan) to which we
currently make matching contributions equal to 50% of the first
2% of the participants contribution and 25% of the next 4%
of the participants contribution. We also make an
additional annual contribution, which we refer to as a
retirement contribution account contribution, equal to a
percentage of the participants compensation determined
based on the participants age as of the end of the plan
year. Our named executive officers do not participate in any
deferred benefit or actuarial pension plans.
We provide our named executive officers with the same health and
welfare benefits we provide generally to all of our other
employees at the same general premium rates as we charge our
other employees.
Severance/Change in Control Payments and
Benefits.
We provide certain severance and change
in control payments and benefits to certain of our named
executive officers. These payments and benefits and applicable
triggers are described in more detail on pages
22-24.
The
benefits are provided pursuant to employment agreements,
restricted stock agreements and stock option agreements. We
believe that these benefits assist us in retaining our executive
officers.
Tax
Treatment of Compensation Elements
Section 162(m) of the Internal Revenue Code of 1986, as
amended, generally denies a publicly held corporation a federal
income tax deduction for compensation in excess of
$1 million per year paid to or accrued for each of its five
most highly-compensated executive officers. The regulation
includes our chief executive officer as of the last day of our
taxable year. It also includes any employee whose total
compensation must be reported to our stockholders under the
Securities Exchange Act by reason of the employee being among
the four highest compensated executive officers for the taxable
year.
Compensation made non-deductible by the regulation is included
in the executives gross income, and the tax on us
resulting from the denial of the deduction is, therefore, a
second tax on the compensation. Under Section 162(m),
certain performance based compensation is not
subject to this limitation on deductibility provided that
certain requirements are met. The Compensation Committee
evaluates the tax impact of the compensation arrangements for
our named executive officers in light of our overall
compensation philosophy. Although the Compensation Committee
generally attempts to structure compensation elements for the
named executive officers in a way that excepts them from
Section 162(m), from time to time, the Committee may award
compensation that is not fully deductible if it determines that
the compensation is in the best interests of us and our
stockholders.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed with
management the foregoing Compensation Discussion and Analysis
required by Item 402(b) of
Regulation S-K,
and, based on that review and discussion, the Compensation
Committee recommended to the Board that the Compensation
Discussion and Analysis be included in this Proxy Statement.
Compensation Committee
Stephen Berger, Chair
William F. Hopkins
Douglas W. Rotatori
16
Summary
Compensation Table
The following table sets forth information concerning the
compensation earned for 2007 by each of our named executive
officers.
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Plan
|
|
All Other
|
|
|
Name and
|
|
|
|
Salary
|
|
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Total
|
Principal Position
|
|
Year
|
|
($)
|
|
Bonus ($)(1)
|
|
($)(2)
|
|
($)(3)
|
|
($)(4)
|
|
($)(5)
|
|
($)
|
|
Eric R. Zimmerman
|
|
|
2006
|
|
|
$
|
350,000
|
|
|
$
|
175,000
|
|
|
$
|
774,817
|
|
|
$
|
0
|
|
|
$
|
510,930
|
|
|
$
|
102,471
|
|
|
$
|
1,913,218
|
|
President and Chief Executive Officer
|
|
|
2007
|
|
|
$
|
446,154
|
|
|
$
|
0
|
|
|
$
|
1,317,593
|
|
|
$
|
0
|
|
|
$
|
414,655
|
|
|
$
|
95,874
|
|
|
$
|
2,274,276
|
|
Raymond E. Bartholomae
|
|
|
2006
|
|
|
$
|
260,000
|
|
|
$
|
104,000
|
|
|
$
|
387,408
|
|
|
$
|
43,648
|
|
|
$
|
284,661
|
|
|
$
|
178,732
|
|
|
$
|
1,258,449
|
|
Executive Vice President and President, Symons
|
|
|
2007
|
|
|
$
|
288,846
|
|
|
$
|
0
|
|
|
$
|
658,796
|
|
|
$
|
43,616
|
|
|
$
|
164,166
|
|
|
$
|
45,179
|
|
|
$
|
1,200,603
|
|
Edward J. Puisis
|
|
|
2006
|
|
|
$
|
250,000
|
|
|
$
|
175,000
|
|
|
$
|
387,408
|
|
|
$
|
20,591
|
|
|
$
|
273,713
|
|
|
$
|
44,622
|
|
|
$
|
1,151,334
|
|
Executive Vice President and Chief Financial Officer
|
|
|
2007
|
|
|
$
|
288,462
|
|
|
$
|
0
|
|
|
$
|
658,796
|
|
|
$
|
20,442
|
|
|
$
|
214,166
|
|
|
$
|
47,793
|
|
|
$
|
1,229,659
|
|
Keith M. Sholos
|
|
|
2007
|
|
|
$
|
204,044
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,907
|
|
|
$
|
77,366
|
|
|
$
|
21,308
|
|
|
$
|
305,625
|
|
Vice President, Sales(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter J. Astrauskas
|
|
|
2006
|
|
|
$
|
170,000
|
|
|
$
|
42,500
|
|
|
$
|
0
|
|
|
$
|
8,643
|
|
|
$
|
124,083
|
|
|
$
|
51,745
|
|
|
$
|
396,971
|
|
Vice President, Engineering Services
|
|
|
2007
|
|
|
$
|
184,423
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
8,580
|
|
|
$
|
69,818
|
|
|
$
|
52,198
|
|
|
$
|
315,019
|
|
|
|
|
(1)
|
|
Consists of discretionary cash
bonuses approved by the Compensation Committee on July 14,
2006 based on the Compensation Committees evaluation of
our performance for the first six months of 2006. Also includes
for Mr. Puisis, a $75,000 special cash bonus paid on
May 11, 2006.
|
|
(2)
|
|
Consists of the aggregate dollar
amount recognized for financial statement reporting purposes for
2007 with respect to the restricted stock awards made to each of
Messrs. Zimmerman, Puisis and Bartholomae, determined in
accordance with Statement of Financial Accounting Standards
No. 123(R) (FAS 123R)
,
but
without regard to any estimate of forfeitures related to
service-based vesting. See Note 5 to the Consolidated
Financial Statements included in our 2007 Annual Report for an
explanation of the assumptions we made in valuing these awards.
For information about the restricted stock awards granted in
2007, please see Restricted Stock Awards below. For
information on all outstanding equity awards as of
December 31, 2007, please refer to the Outstanding
Equity Awards at Fiscal Year-End table below.
|
|
(3)
|
|
Consists of the aggregate dollar
amount recognized for financial statement reporting purpose for
2007 with respect to stock options granted to each of
Messrs. Bartholomae, Puisis, and Astrauskas in years prior
to 2006, determined in accordance with FAS 123R, but
without regard to any estimate of forfeitures related to
service-based vesting. See Note 5 to the Consolidated
Financial Statements in our 2007 Annual Report for an
explanation of the assumptions we made in valuing these awards.
|
|
(4)
|
|
Consists of annual incentive
bonuses awarded and earned in 2007 under our 2007 Executive
Incentive Plan and paid in 2008. For more information, please
see the Grants of Plan-Based Awards table below.
|
|
(5)
|
|
The amounts in the All Other
Compensation column consist of the following components:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k) Plan
|
|
|
|
|
|
|
|
|
Automobile/
|
|
|
|
|
|
Life
|
|
|
Tax
|
|
|
Tax
|
|
|
|
Company
|
|
|
Club
|
|
|
Imputed
|
|
|
Commuting
|
|
|
|
|
|
Insurance
|
|
|
Planning
|
|
|
Reimburse-
|
|
Name
|
|
Contribution
|
|
|
Allowance
|
|
|
Interest
|
|
|
Allowance
|
|
|
Housing
|
|
|
Premiums
|
|
|
Assistance
|
|
|
ment
|
|
|
Eric R. Zimmerman
|
|
$
|
18,000
|
|
|
$
|
6,000
|
|
|
|
|
|
|
$
|
18,134
|
|
|
$
|
24,000
|
|
|
$
|
2,322
|
|
|
|
|
|
|
$
|
25,418
|
|
Raymond E. Bartholomae
|
|
$
|
18,000
|
|
|
$
|
49
|
|
|
$
|
11,710
|
|
|
$
|
10,856
|
|
|
|
|
|
|
$
|
3,564
|
|
|
|
|
|
|
|
|
|
Edward J. Puisis
|
|
$
|
14,625
|
|
|
$
|
6,175
|
|
|
|
|
|
|
$
|
17,791
|
|
|
|
|
|
|
$
|
810
|
|
|
|
|
|
|
$
|
7,392
|
|
Keith M. Sholos
|
|
$
|
10,125
|
|
|
|
|
|
|
|
|
|
|
$
|
10,200
|
|
|
|
|
|
|
$
|
983
|
|
|
|
|
|
|
|
|
|
Peter J. Astrauskas
|
|
$
|
18,000
|
|
|
|
|
|
|
|
|
|
|
$
|
13,800
|
|
|
$
|
10,542
|
|
|
$
|
1,501
|
|
|
|
|
|
|
$
|
8,355
|
|
|
|
|
(6)
|
|
Mr. Sholos became an executive
officer effective January 1, 2007.
|
Grants of
Plan-Based Awards
The following table provides information concerning the
plan-based cash and equity awards we granted to our named
executive officers with respect to their service in 2007. The
non-equity incentive awards shown in the table were granted
under our 2007 Executive Incentive Plan, effective
February 14, 2007, for performance in 2007. The
17
awards were paid in January and March, 2008 based on our
attainment of pre-established performance goals. More
information about the performance goals and these awards can be
found on pages 14 and 15.
Grants of
Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards:
|
|
|
Grant Date Fair
|
|
|
|
|
|
|
Estimated Possible Payments Under
|
|
|
Number of Shares
|
|
|
Value of
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards(2)
|
|
|
of Stock
|
|
|
Stock and Option
|
|
Name
|
|
Grant Date(1)
|
|
|
Threshold ($)
|
|
|
Target ($)
|
|
|
Maximum ($)
|
|
|
or Units (#)
|
|
|
Awards ($)
|
|
|
Eric R. Zimmerman
|
|
|
2/14/07
|
|
|
$
|
225,000
|
|
|
$
|
450,000
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
0
|
|
Raymond E. Bartholomae
|
|
|
2/14/07
|
|
|
$
|
108,750
|
|
|
$
|
217,500
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
0
|
|
Edward J. Puisis
|
|
|
2/14/07
|
|
|
$
|
108,750
|
|
|
$
|
217,500
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
0
|
|
Keith M. Sholos
|
|
|
2/14/07
|
|
|
$
|
51,250
|
|
|
$
|
102,500
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
0
|
|
Peter J. Astrauskas
|
|
|
2/14/07
|
|
|
$
|
46,250
|
|
|
$
|
92,500
|
|
|
|
N/A
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(1)
|
|
The date our Compensation Committee
approved the grant.
|
|
(2)
|
|
Consists of annual incentive bonus
opportunities awarded for 2007 under our 2007 Executive
Incentive Plan. The information included in the
Threshold and Target columns reflects
the range of potential payouts under the plan when the
performance goals were established by the Compensation Committee
on February 14, 2007. The 2007 Executive Incentive Plan did
not provide for a maximum payout. The actual 2007 incentive
bonuses were determined when our financial results for 2007
became available in 2008 and are set forth in the
Non-Equity Incentive Plan Compensation column of the
Summary Compensation Table. See our Compensation Discussion and
Analysis above for a description of the performance goals
associated with these awards.
|
Employment
Agreements
We have entered into employment agreements with certain of our
named executive officers, as described below.
Mr. Zimmerman.
Effective August 1,
2005, we entered into an employment agreement with
Mr. Zimmerman to serve as our President and Chief Executive
Officer. The term of his employment agreement is through
December 31, 2008. The employment agreement provides that
the term will be extended automatically for additional one-year
periods thereafter unless either party notifies the other at
least 90 days prior to the end of the term that the term
will not be extended.
Under his employment agreement, Mr. Zimmermans annual
base salary is $350,000, subject to increase by the Compensation
Committee. Mr. Zimmerman is entitled to participate in our
annual executive incentive plan, with a target-level bonus equal
to 75% of his annual base salary, and he is entitled to
participate in our various other employee benefit plans and
arrangements which are applicable to senior officers.
Mr. Zimmerman also receives an annual car allowance,
reimbursement for tax and financial planning assistance and
payment of the annual membership fee in a country, alumni or
social club of his choice (as well as the initiation fee in that
club), in each case up to a specified maximum amount.
Mr. Zimmermans employment agreement also provides for
reimbursement for certain expenses incurred in connection with
his move to the Dayton, Ohio area.
Certain severance provisions of Mr. Zimmermans
employment agreement are described under Potential
Payments upon Termination or Change in Control below.
Mr. Zimmerman is prohibited from competing with us during,
and for one year following, the term of his employment agreement.
Mr. Puisis.
Effective August 11,
2003, we entered into an employment agreement with
Mr. Puisis to serve as our Chief Financial Officer. The
current term of his employment under his employment agreement is
through August 11, 2008. The employment agreement provides
that the term will be extended automatically for additional
one-year periods thereafter unless either party notifies the
other not later than 120 days prior to the end of the term.
18
Under his employment agreement, Mr. Puisis annual
base salary is $250,000, subject to increase by the Compensation
Committee. Mr. Puisis is entitled to participate in our
annual executive incentive plan and in our various other
employee benefit plans and arrangements which are applicable to
senior officers.
Mr. Puisis also receives an annual car allowance, and
payment of the annual membership fee in a country, alumni or
social club of his choice (as well as the initiation fee in that
club), in each case up to a specified maximum amount.
Certain severance provisions of Mr. Puisis employment
agreement are described under Potential Payments upon
Termination or Change in Control below.
Mr. Puisis is prohibited from competing with us during, and
for one year following, the term of his employment agreement
(or, in the event that Mr. Puisis remains employed by us
following the end of the term of his employment agreement, for
one year following the date on which we terminate his employment
other than for Cause), but only if we provide him with the
benefits to which he is entitled upon a termination of his
employment by us without Cause during such one-year period.
Mr. Bartholomae.
We are a party to a
letter agreement with Mr. Bartholomae, dated as of
August 13, 2003, as amended December 15, 2005, which
provides for his at-will employment with us for no specified
term. The letter agreement provides that we may terminate
Mr. Bartholomaes employment at any time for any legal
reason, at our discretion, and that he may resign from his
employment at any time for any reason, upon 30 days advance
written notice.
Certain severance provisions of Mr. Bartholomaes
employment agreement are described under Potential
Payments upon Termination or Change in Control below.
Restricted
Stock Awards
On June 30, 2006, with the approval of the Compensation
Committee, we granted 502,985 restricted shares of our common
stock to Mr. Zimmerman and 251,491 restricted shares of our
common stock to each of Messrs. Bartholomae and Puisis. The
terms of the restricted stock are set forth in restricted stock
agreements we entered into with each of Messrs. Zimmerman,
Bartholomae and Puisis.
The restricted stock agreements provide the executives with all
of the rights and privileges of a stockholder with respect to
the restricted stock, except that we will retain custody of the
certificates for the restricted stock and all dividends, if any,
until the restrictions lapse, and except that until the
restrictions lapse the restricted stock may not be transferred
by the executive and will be subject to forfeiture upon the
termination of the executives employment other than for
certain reasons described in the restricted stock agreements.
Under the terms of the restricted stock agreements, following
our initial public offering, the restricted stock began to vest,
and the restrictions on the stock began to lapse, in four equal
annual installments, commencing on December 31, 2006 (the
year in which the offering occurred) and on December 31 of each
of the following three years, assuming the executives
employment is not terminated prior to the vesting under certain
conditions. The restricted stock also will earlier vest upon a
change in control if certain conditions are satisfied. Certain
of the provisions of the restricted stock agreements are
described under Potential Payments upon Termination or
Change in Control below.
Stock
Option Plan
Our 2000 Stock Option Plan, as amended, authorizes the grant of
non-qualified options to employees (including officers),
directors and any independent contractor or advisor who performs
services for us. The Stock Option Plan also authorizes the grant
to our employees of incentive stock options intended to qualify
under Section 422 of the Internal Revenue Code. The
aggregate number of shares of common stock that may be issued
upon the exercise of options granted under the Stock Option Plan
is 1,667,204. The maximum number of shares of common stock that
may be subject to one or more options granted to a participant
pursuant to the Stock Option Plan during any calendar year is
150,000. The shares of common stock covered by the Stock Option
Plan may be either previously authorized but unissued shares or
treasury shares. To the extent that an option expires or is
canceled without having been fully exercised, or is exercised in
whole or in part for cash as permitted by the Stock Option Plan,
the number of shares subject to the option that are not
exercised may be used again for new grants under the
19
Plan. The Plan is administered by our Board of Directors and the
Compensation Committee who determines at the time an option is
granted whether the option is to be an incentive stock option or
a non-qualified stock option, as well as the exercise price
(except that the exercise price generally may not be less than
100% of the fair market value of a share of common stock on the
date the option is granted), term and vesting period, if any, of
each option, although the term of an incentive option generally
may not be longer than 10 years. If there is any
transaction or event (such as, for example, a stock dividend,
reclassification or stock split) that affects our common stock
such that an adjustment is determined by the Board and the
Compensation Committee to be appropriate in order to prevent
dilution or enlargement of benefits under the Stock Option Plan
or with respect to an option, then the Board or the Compensation
Committee may make certain equitable adjustments with respect to
the common stock that may be issued under the Stock Option Plan.
The Compensation Committee, subject to approval of the Board of
Directors, may terminate, amend, or modify the Stock Option Plan
at any time; however, stockholder approval will be required for
any amendment to the Stock Option Plan to increase the number of
shares available under the plan or as otherwise may be required
by applicable rules of the Nasdaq Stock Market. No incentive
stock options may be granted under the Stock Option Plan on or
after the tenth anniversary of the plan.
20
Outstanding
Equity Awards at December 31, 2007
The following table sets forth information for each of our named
executive officers with respect to each option to purchase our
common stock and each award of restricted common stock that was
outstanding as of December 31, 2007.
Outstanding
Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Stock That
|
|
|
Stock That
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Have Not
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested(1) (#)
|
|
|
Vested(2) ($)
|
|
|
Eric R. Zimmerman
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
251,492
|
|
|
$
|
980,819
|
|
Raymond E. Bartholomae
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
125,745
|
|
|
$
|
490,406
|
|
|
|
|
4,547
|
|
|
|
0
|
|
|
$
|
7.76
|
|
|
|
2/26/2008
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
2,399
|
|
|
|
0
|
|
|
$
|
8.97
|
|
|
|
2/1/2009
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
17,657
|
|
|
|
83,530
|
(3)
|
|
$
|
12.46
|
|
|
|
6/16/2010
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
2,601
|
|
|
|
23,407
|
(4)
|
|
$
|
12.69
|
|
|
|
1/1/2013
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
2,167
|
|
|
|
19,506
|
(5)
|
|
$
|
11.07
|
|
|
|
8/11/2013
|
|
|
|
0
|
|
|
|
0
|
|
Edward J. Puisis
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
125,745
|
|
|
$
|
490,406
|
|
|
|
|
29,800
|
|
|
|
89,402
|
(5)
|
|
$
|
11.07
|
|
|
|
8/11/2013
|
|
|
|
0
|
|
|
|
0
|
|
Keith M. Sholos
|
|
|
694
|
|
|
|
6,246
|
(6)
|
|
$
|
12.69
|
|
|
|
10/24/2012
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
596
|
|
|
|
5,364
|
(4)
|
|
$
|
12.69
|
|
|
|
1/1/2013
|
|
|
|
0
|
|
|
|
0
|
|
Peter J. Astrauskas
|
|
|
4,335
|
|
|
|
39,011
|
(7)
|
|
$
|
11.07
|
|
|
|
9/24/2013
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(1)
|
|
The outstanding restricted stock
will vest in two equal installments on December 31 of each year,
commencing December 31, 2008, or earlier upon a change in
control, if certain conditions are satisfied.
|
|
(2)
|
|
Based on the closing market price
of a share of our common stock on December 31, 2007.
|
|
(3)
|
|
These stock options vest on the
earlier of June 15, 2009 or, if certain conditions are
satisfied, upon a change in control.
|
|
(4)
|
|
These stock options vest on the
earlier of January 1, 2012 or, if certain conditions are
satisfied, upon a change in control. All or a portion of the
options also may vest on December 31, 2008, if certain
financial performance measures are satisfied.
|
|
(5)
|
|
These stock options vest on the
earlier of August 11, 2012 or, if certain conditions are
satisfied, upon a change in control. All or a portion of the
options also may vest on December 31, 2008, if certain
financial performance measures are satisfied.
|
|
(6)
|
|
These stock options vest on the
earlier of October 24, 2011 or, if certain conditions are
satisfied, upon a change in control.
|
|
(7)
|
|
These stock options vest on the
earlier of September 12, 2012 or, if certain conditions are
satisfied, upon a change in control. All or a portion of the
options also may vest on December 31, 2008, if certain
financial performance measures are satisfied.
|
21
Options
Exercised and Stock Vested
The following table sets forth information for each of our named
executive officers with respect to the value of restricted
shares that vested on December 31, 2007. None of the named
executive officers exercised any stock options in 2007.
Options
Exercised and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
Name
|
|
Number of Shares Acquired on Vesting (#)
|
|
|
Value Realized on Vesting ($)(1)
|
|
|
Eric R. Zimmerman
|
|
|
125,747
|
|
|
$
|
490,413
|
|
Raymond E. Bartholomae
|
|
|
62,873
|
|
|
$
|
245,205
|
|
Edward J. Puisis
|
|
|
62,873
|
|
|
$
|
245,205
|
|
Keith M. Sholos
|
|
|
0
|
|
|
|
0
|
|
Peter J. Astrauskas
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(1)
|
|
Based on the closing market price
of a share of our common stock on December 31, 2007, the
vesting date.
|
Potential
Payments Upon Termination or Change in Control
Certain of the agreements we have entered into with certain of
our named executive officers require that we, or our successors,
pay or provide certain compensation and benefits to the named
executive officers upon the occurrence of a termination of their
employment or a change in control of our company. The estimated
value of the compensation and benefits that would be paid or
provided to each named executive officer for each type of
agreement is summarized below, based on an assumption that the
triggering event occurred on December 31, 2007. We have
noted below other material assumptions used in calculating the
estimated compensation and benefits under each triggering event.
Due to the various factors that impact the nature and value of
benefits due upon certain terminations of employment or upon a
change in control, the actual value of compensation and benefits
to which a named executive officer would be entitled can be
determined only at the time a triggering event actually occurs.
The estimated value of compensation and benefits described below
does not take into account compensation and benefits that a
named executive officer has earned prior to the applicable
triggering event or that are generally available to all salaried
employees, such as distributions from the 401(k) plan or earned
but unpaid salary or accrued vacation pay.
Provisions
in Employment Agreements
The employment agreements we entered into with
Messrs. Zimmerman, Bartholomae and Puisis provide for
payments and benefits upon termination of employment as follows:
Mr. Zimmerman.
Mr. Zimmermans
employment agreement provides that, if his employment is
terminated by us without Cause or because we do not
extend the term of his employment agreement, we will do the
following:
|
|
|
|
|
continue to pay his base salary for 18 months following
termination of his employment;
|
|
|
|
pay him a pro-rated portion of his annual bonus under our
executive bonus plan for the year in which the termination
occurs, based on our year-to-date performance through the date
of termination in relation to the performance targets under the
executive bonus plan; and
|
|
|
|
continue, for 18 months following the termination, coverage
under our medical and dental plans and programs, including his
group life insurance coverage, in which he was entitled to
participate immediately prior to the termination, on the same
terms as if he were an active employee.
|
If Mr. Zimmermans employment terminates by reason of
his death or disability, then we are required to pay him a
pro-rated portion of his annual bonus under our executive bonus
plan for the year in which the termination
22
occurs based on our year-to-date performance through the date of
termination in relation to the performance targets under the
executive bonus plan.
Mr. Zimmermans employment agreement defines
Cause as his willful failure to substantially
perform his executive duties and responsibilities (other than as
a result of his disability), his willful failure to comply with
any lawful and reasonable directives of the Board of Directors,
his commission of any act or omission that could result in a
conviction or plea of guilty or no contest for any felony or
crime involving moral turpitude, unlawful use or possession of
drugs, or his commission of any act of fraud, personal
dishonesty involving our assets or breach of any fiduciary duty
to us.
Mr. Zimmermans right to receive these payments is
contingent upon him signing a general waiver and release of
claims in our customary form. Mr. Zimmerman also is
prohibited by his employment agreement from competing with us or
soliciting our employees during the 12 months following
termination of his employment.
If Mr. Zimmermans employment had terminated on
December 31, 2007 on account of his death, we would have
been required to pay him a total of $414,655. If we had
terminated his employment on that date without cause or if his
employment had terminated because we did not extend the term of
his employment agreement, we would have been required to pay him
a total of $934,405 under his employment agreement ($874,405 if
a change in control (which is not defined in the employment
agreement) had occurred prior to that date).
Mr. Bartholomae.
Mr. Bartholomaes
employment agreement provides that, if we terminate his
employment without Cause or if his employment
terminates by reason of his death or his disability, we will do
the following:
|
|
|
|
|
pay him a pro-rated portion of his annual bonus under our annual
executive bonus plan for the year in which the termination
occurs;
|
|
|
|
during the
36-month
period following the date of termination, pay him:
|
|
|
|
|
|
an amount equal to his average annual base salary for the three
years prior to the termination or his then current annual base
salary, whichever is greater;
|
|
|
|
the average of his annual bonus for the three years prior to his
termination (pro-rated based on the calendar years in the
36-month
period);
|
|
|
|
the amount of his car allowance in effect at the time of his
termination; and
|
|
|
|
|
|
continue until age 65 his and his spouses coverage
under our medical and dental plans and programs, including group
life insurance coverage, in which he was entitled to participate
immediately prior to the termination, on the same terms as if he
were an active employee.
|
For purposes of Mr. Bartholomaes employment
agreement, Cause is defined as
Mr. Bartholomaes willful or gross misconduct, a
material failure in the performance of his duties and
responsibilities (other than as a result of his disability),
conviction of or plea of guilty or nolo contendre to a felony or
a crime involving moral turpitude or fraud or personal
dishonesty involving our assets.
If, prior to the termination of Mr. Bartholomaes
employment without Cause or by reason of his death, a change in
control occurs, then the period over which the payments and
benefits described above are provided will be reduced from
36 months to 24 months. Mr. Bartholomaes
employment agreement defines change in control to
mean that a person or group acquires securities entitling them
to exercise more than 50% of our total combined voting power, we
sell or dispose of all or substantially all of our assets or we
merge or consolidate and our stockholders prior to the merger or
consolidation thereafter hold less than 50% of our voting power.
Mr. Bartholomaes right to receive these payments is
contingent upon him signing a general waiver and release of
claims in our customary form. Mr. Bartholomae also is
prohibited by his employment agreement from competing with us
during the 36 months (24 months, if a change in
control occurs prior to termination of his employment) following
termination of his employment.
If Mr. Bartholomaes employment had terminated on
December 31, 2007 on account of his death or if we
terminated his employment without Cause, we would have been
required to pay him a total of $1,654,533 under his employment
agreement or a total of $1,164,966 if a change in control had
occurred prior to that date.
23
Mr. Puisis.
Mr. Puisis
employment agreement provides that, if his employment terminates
without Cause (which is defined generally in the same manner as
it is defined in Mr. Bartholomaes employment
agreement) or by reason of his death or disability, we will do
the following:
|
|
|
|
|
continue to pay his annual base salary for 12 months
following termination of his employment;
|
|
|
|
pay him a pro-rated portion of his annual bonus under our
executive bonus plan for the year in which the termination
occurs; and
|
|
|
|
continue, for one year following the termination, his coverage
under our medical and dental plans and programs, including his
group life insurance coverage, in which he was entitled to
participate immediately prior to the termination on the same
terms as if he were an active employee, subject to his election
of COBRA continuation coverage during such period.
|
Mr. Puisis right to receive these payments is
contingent upon him signing a general waiver and release of
claims in our customary form. Mr. Puisis also is prohibited
by his employment agreement from competing with us during the
year following termination of his employment.
If Mr. Puisis employment had terminated on
December 31, 2007 on account of his death or disability, or
if we had terminated his employment without Cause, we would have
been required to pay him a total of $510,666 under his
employment agreement.
Provisions
in Restricted Stock Agreements
We are parties to agreements with Messrs. Zimmerman,
Bartholomae and Puisis under which we have granted them
restricted stock. These restricted stock agreements provide that
the restrictions set forth in the agreements will lapse with
respect to 25% of the stock originally granted under these
agreements on December 31 of each year, commencing
December 31, 2006. The agreements also provide that all of
the restrictions will earlier lapse upon the occurrence of any
of the following events:
|
|
|
|
|
immediately prior to a change in control, but only if Odyssey
receives proceeds as a result of the change in control that,
when aggregated with all other proceeds previously received by
Odyssey in any public offering of our stock, is at least equal
to their total investment in our company, and only if the
executive is continuously employed by us from the date of the
grant to the date of the change in control;
|
|
|
|
the executives employment with us is terminated by reason
of his death; or
|
|
|
|
the executives employment with us is terminated for any
reason other than Cause (as defined in the executives
respective employment agreement), insubordination, failure to
carry out any lawful directive of our chief executive officer or
Board of Directors or failure to satisfactorily perform his
duties or responsibilities (each as determined by our Board of
Directors).
|
If the executives employment is terminated either by the
executive or by us for any reason other than the reasons
described above, the restrictions on any remaining unvested
restricted stock will not lapse and the restricted stock will
not vest and will be forfeited.
If any of the events described above had occurred on
December 31, 2007, the value of the additional restricted
stock that would have vested, based on the closing price of our
common stock on December 31, 2007 (the last business day of
the year), would have been $980,819 for Mr. Zimmerman and
$490,406 for each of Messrs. Bartholomae and Puisis.
Provisions
in Stock Option Agreements
All of our named executive officers other than
Mr. Zimmerman hold stock options granted at various times
under our 2000 Stock Option Plan, as amended. The option
agreements provide that, in the event of a change in control,
any previously unvested options will vest effective immediately
prior to the change in control, but only if the change in
control results in Odyssey having received at least a specified
minimum return on its aggregate investment in our company. The
required minimum return to Odyssey for vesting varies (depending
upon the particular option and, in some cases, the time at which
the investment was made) from 2.25 times the amount of
24
Odysseys investment to four times the amount of the
investment and, for certain of the options, an annual compounded
pre-tax internal rate of return of at least 30% to Odyssey on
its investment. The option agreements also provide that any
unvested options held by an executive will expire upon
termination of the executives employment, if the executive
is terminated for Cause, or 90 days after the
executives employment terminates, if the executives
employment terminates for any other reason.
The stock option agreements generally define change in
control to mean that a person or group acquires securities
entitling them to exercise more than 50% of our total combined
voting power, we sell or dispose of all or substantially all of
our assets or we are a party to a merger or consolidation in
which our stockholders prior to the merger or consolidation
thereafter hold less than 50% of our voting power.
If a change in control had occurred on December 31, 2007,
based on our stock price on that date, none of the unvested
stock options held by the named executive officers would have
vested because Odyssey would not have received the required
minimum return on its aggregate investment in our company.
25
REPORT OF
THE AUDIT COMMITTEE
The purpose of the Audit Committee is to oversee our accounting
and financial reporting processes and the audits of our
financial statements. The Audit Committees charter
describes in greater detail the full responsibilities of the
Committee and is available on our website at
www.daytonsuperior.com.
The Audit Committee has reviewed and discussed Dayton
Superiors consolidated financial statements with
management and Deloitte & Touche LLP, Dayton
Superiors independent auditors. Management is responsible
for the preparation, presentation and integrity of Dayton
Superiors financial statements, accounting and financial
reporting principles, establishing and maintaining disclosure
controls and procedures (as defined in the SECs
Rule 13a-15(e)),
evaluating the effectiveness of disclosure controls and
procedures, evaluating the effectiveness of internal control
over financial reporting and evaluating any change in internal
control over financial reporting that has materially affected,
or is reasonably likely to materially affect, internal control
over financial reporting. Deloitte & Touche LLP is
responsible for performing an independent audit of the
consolidated financial statements and expressing an opinion on
the conformity of those financial statements with accounting
principles generally accepted in the United States of America.
The Audit Committee reviewed Dayton Superiors audited
financial statements with management and Deloitte &
Touche LLP and met separately with both management and
Deloitte & Touche LLP to discuss and review those
financial statements and reports prior to issuance. These
discussions also addressed the quality, not just the
acceptability, of Dayton Superiors accounting principles,
the reasonableness of significant judgments, and the other
matters required to be discussed under generally accepted
auditing standards (including those described in Statement on
Auditing Standards No. 61, as amended, Communications
with Audit Committees). Management has represented, and
Deloitte & Touche LLP has confirmed, to us that the
financial statements were prepared in accordance with generally
accepted accounting principles. In addition,
Deloitte & Touche LLP provided the Audit Committee
with the written disclosures and the letter required by the
Independence Standards Board Standard No. 1, as amended,
Independence Discussions with Audit Committees, that
relates to Deloitte & Touche LLPs independence
from Dayton Superior and its subsidiary and the Audit Committee
has discussed with Deloitte & Touche LLP their
firms independence.
Based on their review of the consolidated financial statements
and discussions with and representations from management and
Deloitte & Touche LLP referred to above, the Audit
Committee recommended to the Board of Directors that the audited
financial statements be included in Dayton Superiors
Form 10-K
for 2007 for filing with the SEC.
Audit Committee
Steven M. Berzin, Chair
Joseph D. Hinkel
Sidney J. Nurkin
26
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP served as our independent
registered public accounting firm for 2007, and our Audit
Committee has selected Deloitte & Touch LLP to serve
as our independent registered public accounting firm for 2008. A
representative of Deloitte & Touche LLP is expected to
be present at the Annual Meeting with the opportunity to make a
statement if he or she desires to do so and to respond to
appropriate questions from stockholders.
Audit
Fees
The fees we paid to Deloitte & Touche LLP in 2006 and
2007 were as follows:
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
2007
|
|
|
Audit Fees
|
|
$
|
600,350
|
|
|
$
|
1,076,732
|
|
Audit-Related Fees
|
|
$
|
634,650
|
|
|
$
|
125,000
|
|
Tax Fees
|
|
$
|
31,242
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,266,242
|
|
|
$
|
1,201,732
|
|
|
|
|
|
|
|
|
|
|
Audit Fees are the fees billed for professional services
rendered for the audit of our annual financial statements and
the review of our quarterly financial statements.
Audit-Related Fees are the fees billed for assurance and related
services that are reasonably related to the performance of the
audit or review of our financial statements. This includes
services associated with SEC registration statements, periodic
reports and other documents we file with the SEC, accounting
consultations and other attest services.
Tax fees are fees billed for tax compliance, tax advice and tax
planning.
The Audit Committee has determined that the provision of the
Audit-Related Services and Tax Services by our independent
accountant is compatible with maintaining the principal
accountants independence. The Audit Committee discussed
these services with Deloitte & Touche LLP and our
management to determine that they are permitted under the rules
and regulations concerning auditor independence promulgated by
the SEC to implement the Sarbanes-Oxley Act of 2002, and the
American Institute of Certified Public Accountants.
27
OTHER
INFORMATION
Stockholder
Proposals
Any stockholder who intends to bring a matter before our 2009
Annual Meeting of Stockholders must give us notice in accordance
with the requirements of our by-laws at 7777 Washington Village
Drive, Suite 130, Dayton, Ohio 45459, Attention: Secretary
generally by not later than the close of business on
January 20, 2009 and not earlier than the close of business
on December 21, 2008. In order for stockholder proposals
for the 2009 Annual Meeting of Stockholders to be eligible for
inclusion in our proxy statement, they must be received by us on
or before November 24, 2008. If any stockholder who intends
to propose any matter to be acted upon at the 2009 Annual
Meeting of Stockholders does not inform us of such matter by
January 20, 2009, the persons named as proxies for the 2009
Annual Meeting of Stockholders will be permitted to exercise
discretionary authority to vote on such matter even if the
matter is not discussed in the proxy statement for that meeting.
The 2009 Annual Meeting of Stockholders is presently scheduled
to be held on April 28, 2009.
Other
Matters
The Board does not intend to present any other business at the
meeting and knows of no other matters which will be presented.
No stockholder has informed us of any intention to propose any
other matter to be acted upon at the meeting; however, if any
other matters properly come before the meeting, it is the
intention of the persons named as proxies to vote in accordance
with their judgment on such matters.
A copy of our Annual Report on
Form 10-K
for the year ended December 31, 2007, as filed with the
Securities and Exchange Commission, not including exhibits, will
be mailed without charge to stockholders, upon written request.
Requests should be addressed to Thomas W. Roehrig, Secretary,
Dayton Superior Corporation, 7777 Washington Village Drive,
Suite 130, Dayton, Ohio 45459.
By Order of the Board of Directors
Thomas W. Roehrig
Secretary
Dayton, Ohio
March 24, 2008
28
ANNUAL MEETING OF STOCKHOLDERS OF
DAYTON SUPERIOR CORPORATION
April 22, 2008
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
ê
Please detach along perforated line and mail in the envelope provided.
ê
g
20200000000000000000 6
042208
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
x
|
|
|
|
|
|
|
|
|
1.
|
|
Election of Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINEES:
|
o
|
|
FOR ALL NOMINEES
|
|
¡
¡
|
|
Douglas W. Rotatori
Eric R. Zimmerman
|
|
|
|
|
|
|
|
|
|
o
|
|
WITHHOLD AUTHORITY
FOR ALL NOMINEES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
o
|
|
FOR ALL EXCEPT
(See instructions below)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTION:
|
|
To withhold authority to vote for any
individual nominee(s), mark
FOR ALL EXCEPT
and fill in the
circle next to each nominee you wish to withhold, as shown here:
l
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To change the address on your account, please check
the box at right and indicate your new address in the
address space above. Please note that changes to the
registered name(s) on the account may not be
submitted via this method.
|
|
o
|
|
|
2.
|
|
In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
|
This proxy is solicited on behalf of the Board of Directors of the
Company. This proxy when properly executed, will be voted in
accordance with the instructions given above. If no instructions are
given, this proxy will be voted FOR election of the Directors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of Stockholder
|
|
|
|
Date:
|
|
|
|
Signature of Stockholder
|
|
|
|
Date:
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
Please sign exactly as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor, administrator, attorney, trustee
or guardian, please give full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
|
|
|
|
|
|
|
|
g
g
ANNUAL MEETING OF STOCKHOLDERS OF
DAYTON SUPERIOR CORPORATION
April 22, 2008
PROXY VOTING INSTRUCTIONS
MAIL
Date, sign and mail your proxy card in the envelope
provided as soon as possible.
- OR -
TELEPHONE
Call toll-free
1-800-PROXIES
(1-800-776-9437) in the United States or
1-718-921-8500
from
foreign countries and follow the instructions. Have your
proxy card available when you call.
- OR -
INTERNET
Access
www.voteproxy.com
and follow the
on-screen instructions. Have your proxy card available when
you access the web page.
- OR -
IN PERSON
You may vote your shares in person by
attending the Annual Meeting.
|
|
|
|
|
|
COMPANY NUMBER
|
|
|
|
|
ACCOUNT NUMBER
|
|
|
|
|
|
|
|
|
|
You may enter your voting instructions at 1-800-PROXIES in the United States or 1-718-921-8500
from foreign countries or www.voteproxy.com up until 11:59 PM Eastern Time the day before the
cut-off or meeting date.
ê
Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet.
ê
g
20200000000000000000 6
042208
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
x
|
|
|
|
|
|
|
|
|
1.
|
|
Election of Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOMINEES:
|
o
|
|
FOR ALL NOMINEES
|
|
¡
¡
|
|
Douglas W. Rotatori
Eric R. Zimmerman
|
|
|
|
|
|
|
|
|
|
o
|
|
WITHHOLD AUTHORITY
FOR ALL NOMINEES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
o
|
|
FOR ALL EXCEPT
(See instructions below)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTION:
|
|
To withhold authority to vote for any
individual nominee(s), mark
FOR ALL EXCEPT
and fill in the
circle next to each nominee you wish to withhold, as shown here:
l
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To change the address on your account, please check
the box at right and indicate your new address in the
address space above. Please note that changes to the
registered name(s) on the account may not be
submitted via this method.
|
|
o
|
|
|
2.
|
|
In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
|
This proxy is solicited on behalf of the Board of Directors of the
Company. This proxy when properly executed, will be voted in
accordance with the instructions given above. If no instructions are
given, this proxy will be voted FOR election of the Directors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of Stockholder
|
|
|
|
Date:
|
|
|
|
Signature of Stockholder
|
|
|
|
Date:
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
Please sign exactly as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor, administrator, attorney, trustee
or guardian, please give full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
|
|
|
|
|
|
|
|
g
g
0
g
DAYTON SUPERIOR CORPORATION
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 22, 2008
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Stephen Berger, Steven M. Berzin and Eric R. Zimmerman as
proxies, each with full power of substitution, to represent and vote as designated on the reverse
side, all the shares of Common Stock of Dayton Superior Corporation held of record by the
undersigned on March 11, 2008, at the Annual Meeting of Stockholders to be held at the Companys
headquarters located at 721 Richard Street, Miamisburg, Ohio 45342, on April 22, 2008, or any
adjournment or postponement thereof.
(Continued and to be signed on the reverse side)
g
14475
g
Dayton Superior Corp (MM) (NASDAQ:DSUP)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Dayton Superior Corp (MM) (NASDAQ:DSUP)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024