UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ
Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
Champion
Enterprises, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ
No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount on
Champion Enterprises, Inc.
755 West Big Beaver
Road
Suite 1000
Troy, Michigan 48084
Notice of 2009
Annual Meeting of
Shareholders
and Proxy Statement
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CORPORATE HEADQUARTERS
TROY, MICHIGAN 48084 USA
(248)
614-8200
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March 20, 2009
Dear Shareholders:
It is our pleasure to invite you to attend the Champion
Enterprises, Inc. 2009 Annual Meeting of Shareholders. The
meeting will be held on Wednesday May 6, 2009, at
8:30 a.m. Eastern time at the Companys Corporate
Headquarters, 755 West Big Beaver Road, Suite 1000,
Troy, MI 48084 USA. The attached Notice of Annual Meeting and
Proxy Statement provides information concerning the business to
be conducted at the meeting and the nominees for election as
Directors.
Your vote is important. Whether or not you plan to attend the
meeting, please vote your shares using the Internet, by
telephone or by mail. You will find instructions on page one of
the attached Notice of Annual Meeting and Proxy Statement. Your
shares will then be represented at the meeting if you are unable
to attend.
Thank you for your support.
Sincerely,
CHAMPION ENTERPRISES, INC.
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Selwyn Isakow
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William C. Griffiths
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Lead Independent Director
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Chairman, President and Chief Executive Officer
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Notice of Annual
Meeting of Shareholders
of Champion Enterprises, Inc.
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Time:
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8:30 a.m., Wednesday, May 6, 2009.
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Place:
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Champion Enterprises, Inc.
Corporate Headquarters
755 West Big Beaver Road
Suite 1000
Troy, Michigan 48084 USA
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Items of
Business:
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1. Elect seven directors;
2. Ratify the selection by the Company of its independent
auditors; and
3. Transact any other business properly brought before the
meeting.
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Annual
Reports:
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The 2008 Annual Report to Shareholders, which includes the
Annual Report on Form 10-K, is attached or may be viewed on
www.championhomes.com/proxy.
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Who Can Vote:
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You can vote if you were a shareholder on March 10, 2009.
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Date of
Mailing:
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The Notice of Internet Availability of Proxy Materials is being
mailed to shareholders on or about March 20, 2009. This notice
and Proxy Statement will also be available to shareholders on or
about March 20, 2009.
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By Order of the Board of Directors
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Roger K. Scholten
Secretary
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Table of Contents
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1
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5
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5
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7
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8
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12
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20
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24
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24
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34
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45
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48
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48
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50
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50
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50
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51
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51
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52
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52
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ii
About The Meeting
What am I voting
on?
You will be voting on the following issues:
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1.
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To elect seven Directors of Champion Enterprises, Inc.
(we, Champion, or the
Company). Each Director will hold office until the next
Annual Meeting of Shareholders or until a successor is appointed
and qualified; and
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2.
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To Ratify the Companys selection of its independent
auditors.
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Who is soliciting
my Proxy?
The Companys Board of Directors is soliciting your Proxy
to be used at the 2009 Annual Meeting of Shareholders. The
Company will pay the entire cost of soliciting Proxies and will
arrange for brokerage houses, nominees, custodians and other
fiduciaries to send Proxy soliciting materials to beneficial
owners of the Companys Common Stock at the Companys
expense. In addition to solicitation by mail, officers and other
employees of the Company may solicit Proxies personally, by
telephone, by the Internet or by fax.
On March 20, 2009, we mailed our shareholders a Notice of
Internet Availability of Proxy Materials containing instructions
on how to access the Proxy Statement, Annual Report and vote
online. You may request the Proxy materials by mail or
electronically by
e-mail
by
following the instructions included in the Notice of Internet
Availability of Proxy Materials.
Who is entitled
to vote?
You may vote if you owned Common Stock of the Company as of the
close of business on March 10, 2009. Each share of Common
Stock is entitled to one vote on any matter voted on at the
Annual Meeting. As of March 10, 2009 we had
77,724,218 shares of Common Stock outstanding.
How do I
vote?
Voting instructions are included in the Notice of Internet
Availability of Proxy Materials.
You can vote in one of four ways:
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By Internet at the website listed on your Notice of Internet
Availability of Proxy Materials. We encourage you to vote this
way. Voting by Internet saves the Company money.
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By requesting a proxy card by calling
1-800-579-1639
and completing and mailing your proxy card.
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By toll-free telephone at the telephone number listed on your
proxy card.
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By ballot at the Annual Meeting.
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May I change my
mind after I vote?
You may change your vote at any time before the polls close at
the meeting by:
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Voting again by telephone or Internet before midnight EDT on
May 5, 2009.
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Voting in person at the meeting.
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Delivering a written notice of revocation, with a later date
than the proxy card, to Champions Secretary at or before
the meeting.
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Signing another proxy card with a later date and returning it to
the address on the proxy card before the meeting.
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What if I return
my proxy card but do not provide voting instructions?
Proxy cards that are signed and returned but do not contain
voting instructions will be voted by the persons named in the
enclosed proxy card For the election of the nominee
Directors, and For the ratification of the
Companys independent auditors.
How do I vote my
shares in the Champion Enterprises, Inc. Savings Plan?
You will receive notice of the internet availability of proxy
materials in mid March 2009 (like other shareholders). That
notice will provide information for viewing proxy materials
online, or ways to request hardcopy materials. You may vote
these shares using the Internet, telephone or mail as described
on the notice. Your Proxy will be considered to be voting
directions to the Trustee of the 401(K) Savings Plan (the
Savings Plan) concerning shares held in your
account. If you do not provide voting directions, if the card is
not signed, or if the card is not received by the deadline set
forth on the notice, the shares credited to your account will be
voted in the same proportion as directions received from other
participants.
What does it mean
if I receive more than one proxy card or more than one notice of
internet availability?
If you receive more than one mailing, it means that you have
multiple accounts under the Savings Plan, with brokers
and/or
our
transfer agent. Please vote all of these shares. We recommend
that you contact your broker
and/or
our
transfer agent to consolidate as many accounts as possible under
the same name and address. Our transfer agent is American Stock
Transfer and Trust Company and you may reach them by
telephone at
800-937-5449.
Shares held by the Savings Plan cannot be consolidated with your
other holdings.
Who may attend
the meeting?
The Annual Meeting is open to all holders of our Common Stock.
The Annual Meeting will be held at the Companys Corporate
Headquarters, 755 West Big Beaver Road, Suite 1000,
Troy, MI 48084 USA, which is located at the intersection of Big
Beaver Road and I-75 in the building commonly known as the
National City Building. For more detailed directions to the
meeting, please call Investor Relations at
248-614-8267.
We look forward to having you attend.
How many votes
must be present to hold the meeting?
In order for us to hold the meeting, a majority of our
outstanding shares of Common Stock as of March 10, 2009
must be represented in person or by Proxy. This majority is
referred to as a quorum. Your shares are counted as present at
the meeting if you attend the meeting and vote in person or if
you return a Proxy properly using the Internet, telephone, or
mail. Abstentions and votes withheld by brokers on non-routine
proposals in the absence of instructions from beneficial owners
(broker non-votes) will be counted as present at the
Annual Meeting to determine whether a quorum exists.
How many votes
are needed to elect Directors?
The seven Director nominees receiving the highest number of
For votes will be elected as Directors. This number
is called a plurality. Shares not voted, whether by marking
Withhold Authority on your proxy card or otherwise,
will not be considered in the election of Directors. Unless a
properly executed proxy card is marked Withhold
Authority, the Proxy given will be voted For
each of the seven
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Director nominees. If a nominee is unable or declines to serve,
Proxies will be voted for the balance of the nominees and for
such additional persons as designated by the Board to replace
such nominee. However, the Board does not anticipate that this
will occur.
How many votes
are needed to ratify the Companys Independent
Auditors?
The affirmative vote of a majority of the votes cast by all the
shareholders entitled to vote will be required to ratify the
Companys independent auditors. A properly executed proxy
card that does not contain voting instructions will be voted
For ratification of the Companys independent
auditors. Shares not voted, whether by abstention or otherwise,
will have no the effect on this proposal.
What is a broker
non-vote?
A broker non-vote occurs when a broker or other nominee who
holds shares for another person does not vote on a particular
proposal because that holder does not have discretionary voting
power for the proposal and has not received voting instructions
from the beneficial owner of the shares so the broker is unable
to vote those uninstructed shares. Brokers will have
discretionary voting power to vote on each of the proposals
under consideration at the Annual Meeting of Shareholders, so we
do not anticipate any broker non-votes.
Can my shares be
voted on matters other than those described in this Proxy
Statement?
Yes, if any other item or proposal properly comes before the
meeting, the Proxies received will be voted in accordance with
the discretion of the Proxy holders. The Company, however, has
not received proper notice of, and is not aware of, any business
to be transacted at the meeting other than as set forth in this
Proxy Statement.
When are
shareholder proposals due for the 2010 Annual Meeting?
To be included in the Companys Proxy Statement for the
2010 Annual Meeting of Shareholders, the Company must receive
proposals no later than November 21, 2009. Such proposals
should be addressed to the Companys Secretary at the
address listed below. Shareholder proposals to be presented at
the 2010 Annual Meeting which are not to be included in the
Companys Proxy Statement must be received by the Company
no earlier than February 5, 2010 nor later than
March 8, 2010 in accordance with procedures in the
Companys Bylaws.
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How do I obtain
more information about Champion Enterprises, Inc.?
More information on Champion can be obtained by:
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Contacting Investor Relations at
248-614-8267
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Going to our website at
www.championhomes.com
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Writing to:
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Champion Enterprises, Inc.
Attn: Investor Relations
755 West Big Beaver Road
Suite 1000
Troy, Michigan 48084
Upon request Champion will provide, free of charge,
additional copies of the Companys 2008 Annual Report to
Shareholders, which includes the Annual Report on
Form 10-K,
and Proxy Statement.
PLEASE VOTE. YOUR
VOTE IS VERY IMPORTANT.
4
1. Election of
Directors
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The Board of Directors recommends a vote for the following
nominees, all of whom are currently serving as Directors:
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Robert W.
Anestis
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Director since 1991
Age 63
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Since 2006, Mr. Anestis has been the President of Anestis &
Company, LLC, an investment banking and financial advisory firm
based in Ponte Vedra Beach, Florida. During 2005 and the
preceding six years, he was Chairman, President and Chief
Executive Officer of Florida East Coast Industries, Inc., a
St. Augustine, Florida based holding company with interests
in the railroad and commercial real estate businesses. Prior to
1999 and for the preceding five years, he was the President
of Anestis & Company, an investment banking and financial
advisory firm.
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Eric S.
Belsky, Ph.D.
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Director since 2002
Age 48
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Since 1997, Dr. Belsky has been the Executive Director of
the Joint Center for Housing Studies at Harvard University (the
Joint Center), which conducts research to identify
and analyze housing market opportunities and challenges for
business and government. The Joint Center is a collaborative
venture of the Harvard Design School and the John F.
Kennedy School of Government. He has also held positions with
the Millennial Housing Commission, created by the Congress of
the United States, PricewaterhouseCoopers LLP, Fannie Mae and
the National Association of Homebuilders.
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William C.
Griffiths
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Director since 2004
Age 57
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Mr. Griffiths is currently the Chairman of the Board,
President and Chief Executive Officer for Champion.
Mr. Griffiths became Chairman of the Board of Champion in
March 2006 and President and Chief Executive Officer of Champion
in August 2004. From 2001 until 2004 he was employed by
SPX Corporation, a global multi-industry company located in
Charlotte, North Carolina, where he was President-Fluid Systems
Division. From 1998 until it was acquired in 2001 by SPX
Corporation, Mr. Griffiths was President-Fluid Systems Division
at United Dominion Industries, Inc. Mr. Griffiths also
serves as a director of Quanex Building Products Corporation.
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Selwyn
Isakow
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Director since 1991
Age 57
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Mr. Isakow became Lead Independent Director for Champion on
March 9, 2006. From 2004 to 2006, Mr. Isakow served as
Chairman of the Board for Champion. For more than
five years, Mr. Isakow has been Chairman, President
and Chief Executive Officer of The Oxford Investment Group,
Inc., a Bloomfield Hills, Michigan, merchant banking and
corporate development firm. Mr. Isakow also serves as
a director of San Diego Private Bank.
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G. Michael
Lynch
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Director since 2003
Age 65
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From 2000 until 2008, Mr. Lynch served as Executive Vice
President and Chief Financial Officer of Federal-Mogul
Corporation (Federal-Mogul), a global manufacturer
and marketer of automotive component parts. For three years
prior to working for Federal-Mogul, Mr. Lynch was Vice
President and Controller for Dow Chemical Company and previously
worked for 29 years with Ford Motor Company in various
financial-related positions. Mr. Lynch also serves as the
lead independent director of Forward Air Corporation.
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Thomas A.
Madden
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Director since 2006
Age 55
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Mr. Madden was Executive Vice President and Chief Financial
Officer of Ingram Micro Inc., a computer technology
products and services company, from 2001 through 2005. He served
as Senior Vice President and Chief Financial Officer of
ArvinMeritor, Inc. from 1997 through 2001. Mr. Madden
serves as a director of Mindspeed Technologies, Inc., FreightCar
America, Inc., and Intcomex, Inc.
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Shirley D.
Peterson
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Director since 2004
Age 67
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Mrs. Peterson was President of Hood College, an independent
liberal arts college in Frederick, Maryland, from 1995 until
2000. From 1989 to 1993 she served in the United States
government, first appointed by President George H. W.
Bush as Assistant Attorney General in the Tax Division of the
Department of Justice, then as Commissioner of the Internal
Revenue Service. She also was a partner in the law firm of
Steptoe & Johnson, where she spent a total of 22 years
from
1969-89
and
1993-94.
Currently, Mrs. Peterson serves on the board of directors
of AK Steel Holding Corporation, The Goodyear Tire &
Rubber Company and Wolverine World Wide, Inc.
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2. Ratification
of Companys Independent Auditors
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The Board of Directors recommends a vote For the
ratification of Ernst & Young, as the Companys
independent auditors as discussed below:
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General:
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As provided in its charter, the Audit Committee selects our
independent auditors, reviews the scope of the annual audit and
approves all audit and non-audit services permitted under
applicable law to be performed by the independent auditors. The
Audit Committee has evaluated the performance of
Ernst & Young and has selected them as our independent
auditors for fiscal 2009. You are requested to ratify the Audit
Committees appointment of Ernst & Young.
Representatives of Ernst & Young will be present at
the annual meeting and will be given the opportunity to make a
statement, if they desire to do so, and to respond to
appropriate questions from stockholders present at the meeting.
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A majority of the votes cast at the annual meeting is required
for ratification. However, by NYSE and Securities and Exchange
Commission (SEC) rules, selection of the
Companys independent auditors is the direct responsibility
of the Audit Committee. Therefore, if shareholders fail to
ratify the selection, the Audit Committee will seek to
understand the reasons for such failure and will take those
views into account in this and future appointments. Even if the
current selection is ratified by shareholders, the Audit
Committee reserves to itself the right to appoint a different
independent auditor at any time during the year if the Audit
Committee determines that such change would be in the best
interests of the Company and its shareholders.
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Additional information regarding the Companys independent
auditors can be found on page 50.
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7
Corporate Governance
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Makeup of the Board:
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Our bylaws allow for a minimum of three directors and a maximum
of nine directors. Currently, the Board is comprised of eight
directors. After this election, the Board intends to reduce the
number of directors to seven. If a nominee is unable to serve,
the person designated as Proxy holder for the Company will vote
for the remaining nominees and for such other person as the
Board may nominate.
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Length of Board Term:
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Directors who are elected will hold office until the 2010 Annual
Meeting of Shareholders or until a successor has been duly
appointed and qualified. All nominees are currently Directors
and have agreed to serve if elected.
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General:
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The Board believes that good corporate governance is important
so that the Company is managed for the long-term benefit of its
shareholders. The Board at least annually reviews its corporate
governance practices and policies as set forth in its Corporate
Governance Guidelines, Code of Ethics, Lead Independent Director
charter and various Committee charters.
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Code of Ethics:
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The Company has a Code of Ethics that applies to all of its
employees, officers and Directors. Amendments to, and any waiver
from, any provision of the Code of Ethics that requires
disclosure under applicable SEC rules will be posted on the
Companys website at www.championhomes.com.
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Board Committees:
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The Board has three standing committees: the Audit and Financial
Resources Committee (the Audit Committee); the
Compensation and Human Resources Committee (the
Compensation Committee); and the Nominating and
Corporate Governance Committee (the Nominating
Committee). Each committee has a written charter.
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Access to Corporate Governance Documents:
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You can access the charters for each of our Board Committees as
well as our Corporate Governance Guidelines, Code of Ethics and
Lead Independent Director charter in the
Investors Company Information
Corporate Governance section of our website at
www.championhomes.com.
You may also request printed
copies by writing to:
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Roger K. Scholten
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Secretary
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Champion Enterprises, Inc.
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755 West Big Beaver Road
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Suite 1000
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Troy, Michigan 48084
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Nomination of Directors:
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The Nominating Committee recommends candidates in accordance
with its charter and the Boards governance principles. The
Nominating Committee seeks to select a Board that is, as a
whole, strong in its collective knowledge and diversity of
skills and experience concerning accounting and finance,
management and leadership, vision and strategy, business
operations, business judgment, risk assessment, industry
knowledge, and corporate governance. When reviewing a potential
candidate, the Nominating Committee looks specifically at the
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candidates qualifications in light of the needs of the
Board and the Company at that time given the then current mix of
director attributes.
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In considering whether to recommend any candidate for inclusion
as a Director nominee, the Nominating Committee will apply the
criteria set forth in the Corporate Governance Guidelines and in
applicable Committee charters. These criteria include the
candidates character and integrity, business acumen,
experience inside and outside of the business community,
personal commitment, diligence, conflicts of interest and the
ability to act in the balanced, best interests of the
shareholders as a whole rather than special interest groups or
constituencies. In addition, the Company strives to have all
Directors, other than the Chairman of the Board, President and
Chief Executive Officer, be independent as that term is defined
in NYSE rules.
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The Nominating Committee will consider nominations submitted by
shareholders. To recommend a Director nominee, a shareholder
should write to the Companys Secretary at the above
address. To be considered by the Nominating Committee for
nomination and inclusion in the Companys Proxy Statement
for its 2010 Annual Meeting of Shareholders, a recommendation
for a Director must be received by the Companys Secretary
no later than November 29, 2009. Any recommendation must
include (i) the name and address of the candidate,
(ii) a brief biographical description, including his or her
occupation for at least the last five years, (iii) a
statement of the qualifications of the candidate, taking into
account the qualification requirements summarized above, and
(iv) the candidates signed consent to be named in the
Proxy Statement and to serve as a Director if elected. The
Nominating Committee may seek additional biographical and
background information from any candidate. This information must
be received on a timely basis to be considered by the Nominating
Committee.
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The process followed by the Nominating Committee to identify and
evaluate candidates may include the following: requests to Board
members and others for recommendations, use of a search firm or
outside consultant, meetings from time to time to evaluate
biographical information and background material relating to
potential candidates, and interviews of selected candidates by
members of the Nominating Committee and the Board. The
Nominating Committee will evaluate candidates submitted by
shareholders following substantially the same process, and
applying substantially the same criteria, as for candidates
submitted by Board members.
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All Director nominees recommended for election by the
shareholders at the 2009 Annual Meeting are current members of
the Board. One current Director, Brian D. Jellison, has served
on the Board for 10 years. Mr. Jellison has decided
not to stand for re-election at this years Annual Meeting.
The Nominating Committee did not receive any nominations from
shareholders for the 2009 Annual Meeting.
|
|
Director Independence:
|
|
The Board has determined that all Director nominees for election
at the 2009 Annual Meeting, other than the Chairman, President
and Chief Executive Officer, are independent based upon NYSE
standards. This means that such nominees have no material
relationship with the
|
9
|
|
|
|
|
Company either directly or indirectly or as a partner,
shareholder or affiliate of an organization that has a
relationship with the Company. The Board has made this
determination based on the fact that no nominee for Director,
other than Mr. Griffiths: (i) is an officer or
employee of the Company or its subsidiaries or affiliates;
(ii) has an immediate family member who is an officer of
the Company or its subsidiaries or has any current or past
material relationship with the Company; (iii) has worked
for, consulted with, been retained by, or received anything of
substantial value from the Company aside from his or her
compensation as a Director; (iv) is, or was within the past
three years, employed by the independent auditors for the
Company; (v) is an executive officer of any entity which
the Companys annual sales to, or purchases from, exceeded
one percent of either entitys annual revenues for the last
fiscal year; or (vi) serves as a director, trustee,
executive officer or similar position of a charitable or
non-profit organization to which the Company or its subsidiaries
made charitable contributions or payments in the last fiscal
year in excess of two percent of the organizations
charitable receipts. In addition, no executive officer of the
Company serves on the compensation committee of any corporation
that employs a Director or a member of the immediate family of
any Director.
|
|
|
|
In determining Director independence, the Board considered the
following two relationships and concluded that such
relationships did not affect the independence of the respective
Director: (1) Mr. Belsky is the Executive Director of
the Joint Center for Housing Studies at Harvard University, and
the Company made a charitable contribution to the Joint Center
during 2008 of $20,000; and (2) Mr. Belsky provides
occasional housing market or general industry presentations to
housing industry trade organizations, home building companies,
building materials manufacturers, and housing finance companies.
|
|
Lead Independent Director:
|
|
Selwyn Isakow serves as the Companys Lead Independent
Director. The principal role of the Lead Independent Director is
to promote open and effective communications among the
non-management members of the Board of Directors and between
those non-management Directors and the management of the
Company, including in particular the Chairman of the Board,
President and Chief Executive Officer.
|
|
Communications with Directors:
|
|
The Board has established a process for shareholders and other
interested persons to communicate with members of the Board. The
Lead Independent Director, with the assistance of the
Companys Secretary, will be primarily responsible for
monitoring communications from shareholders and other interested
persons and providing copies or summaries of such communications
to the other Directors, as he or she considers appropriate.
Communications will be forwarded to all Directors if they relate
to appropriate matters and may include suggestions or comments
from the Lead Independent Director. In general, communications
relating to corporate governance and long-term corporate
strategy are more likely to be forwarded than communications
relating to personal grievances and matters as to which the
Company tends to receive repetitive or duplicative
communications. Shareholders
|
10
|
|
|
|
|
and interested persons who wish to send communications to the
Board may do so by writing to:
|
|
|
|
Selwyn Isakow
Lead Independent Director
c/o the
Secretary
Champion Enterprises, Inc.
755 West Big Beaver Road
Suite 1000
Troy, Michigan 48084
|
|
Number of Meetings in 2008:
|
|
The Board met 5 times during the fiscal year ended
January 3, 2009 (fiscal 2008). During fiscal
2008, all Directors attended at least 75% of the total number of
Board meetings and Board committee meetings.
|
|
Annual Meeting Attendance Policy:
|
|
The Boards policy is that all Directors should attend the
Annual Meeting of Shareholders if reasonably possible. All
members of the Board then serving attended the 2008 Annual
Meeting of Shareholders.
|
|
Director Evaluation:
|
|
The Board conducts annual performance evaluations of the Board
as a whole, the performance of each of the Board members
individually, and the performance of each of the Boards
Committees.
|
|
Executive Session Presiding Director:
|
|
The Lead Independent Director presides over the executive
sessions of the Board.
|
11
|
|
|
Audit and Financial Resources
Committee:
|
|
The Audit and Financial Resources Committee met 9 times during
fiscal 2008.
|
|
|
|
Members:
|
|
|
Thomas A. Madden, Chair
|
|
|
Selwyn Isakow
|
|
|
Brian D. Jellison
|
|
|
G. Michael Lynch
|
|
|
|
The Board has determined that each member of the Audit Committee
is independent, is an audit committee financial
expert, and is qualified to serve on the Audit Committee
under NYSE rules.
|
|
Responsibilities:
|
|
The powers and responsibilities of the Audit Committee are set
forth in its charter, including:
|
|
|
|
Assist the Board in fulfilling its financial
oversight responsibilities.
|
|
|
Review the financial information provided to
shareholders and the SEC.
|
|
|
Review the corporate accounting and financial
reporting practices.
|
|
|
Appoint the Companys independent registered
public accounting firm.
|
|
|
Approve the scope of the audit and related audit
fees.
|
|
|
Monitor systems of internal financial controls.
|
|
|
|
While the Audit Committee has the responsibilities and powers
set forth in its charter, it is not the duty of the Audit
Committee to plan or conduct audits or to determine that the
Companys financial statements are complete and accurate
and in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent
registered public accounting firm. It is also not the duty of
the Audit Committee to assure compliance with laws and
regulations and with the Companys Code of Ethics.
|
|
Audit Committee Report:
|
|
The Audit Committee has reviewed and discussed the
Companys audited consolidated financial statements for the
fiscal year ended January 3, 2009 with management and our
independent registered public accounting firm, Ernst &
Young LLP. Based on its review and discussions with management
and with Ernst & Young LLP, the Audit Committee has
recommended to the Board that these financial statements be
included in the Annual Report on
Form 10-K
as filed with the SEC for the fiscal year ended January 3,
2009.
|
|
|
|
The Audit Committee has also discussed with Ernst &
Young LLP the matters required to be discussed by the Auditing
Standards Board Statement on Auditing Standards
(SAS) No. 61, as amended by SAS 89 and SAS 90.
As required by PCAOB Rule 3526, Communications with
Audit Committees Concerning Independence, the Audit
Committee has received and reviewed the required written
disclosures and a confirming letter from Ernst & Young
LLP regarding their independence, and has discussed the matter
with them.
|
12
|
|
|
|
|
The Audit Committee has considered the provision of all
non-audit services performed by Ernst & Young LLP with
respect to maintaining independence.
|
Thomas A. Madden, Chair
Selwyn Isakow
Brian D. Jellison
G. Michael Lynch
March 20, 2009
13
|
|
|
Compensation and Human Resources
Committee:
|
|
The Compensation and Human Resources Committee met 5 times
during fiscal 2008.
|
|
|
|
Members:
|
|
|
Eric S. Belsky, Chair
|
|
|
Robert W. Anestis
|
|
|
Shirley D. Peterson
|
|
Responsibilities:
|
|
The powers and responsibilities of the Compensation Committee
are set forth in its charter, including:
|
|
|
|
Consider and recommend to the independent
members of the Board the Executive Officer compensation programs
for the Company, including program design, performance
assessment, and equity usage.
|
|
|
Consider and recommend to the independent
members of the Board compensation recommendations for the Chief
Executive Officer of the Company.
|
|
|
Consider and approve the compensation for each
of the Executive Officers of the Company, other than the Chief
Executive Officer.
|
|
|
Consider and recommend to the Board
compensation of Directors.
|
|
|
Develop and monitor executive compensation
policies.
|
|
|
Oversee administration of stock-based
compensation plans and programs.
|
|
Practices and Procedures:
|
|
The Compensation Committee reviews and assesses the entire
compensation package for the Executive Officers each year,
generally in connection with the Boards regularly
scheduled meetings in October and December. The Compensation
Committee usually asks its compensation consultant to report on
Executive Officer compensation. The report generally addresses
trends in compensation, peer group comparisons for Executive
Officer compensation, compensation recommendations for the next
fiscal year, and any other issues the Compensation Committee
specifically asks the compensation consultant to address. The
Compensation Committee may also ask officers or employees of the
Company to prepare other materials or documents for use by the
Compensation Committee at its meetings. The Compensation
Committee meets, reviews, and assesses materials presented to
it, and makes recommendations to the Board concerning the
compensation of the Chief Executive Officer and Non-employee
Directors for the coming year. It also reviews, assesses and
approves the compensation for the other Executive Officers for
the coming year.
|
|
Compensation Consultant:
|
|
The Compensation Committee generally retains the services of a
compensation consultant to serve as an advisor to the
Compensation Committee. The compensation consultant prepares
reports for the Compensation Committee and meets with the
Compensation Committee, including executive sessions without
management present, as needed. The compensation consultant also
generally makes compensation recommendations based on their
expertise in compensation arrangements for senior executive
officers of similar companies and their experience with
Champion. The compensation consultant is independent, retained
directly by the Committee, and does not advise any of the
Executive Officers on their individual compensation matters. The
compensation consultant performs services beyond the direct
|
14
|
|
|
|
|
purview of the Committee only in limited and infrequent
circumstances and only with the complete knowledge and consent
of the Committee.
|
|
Role of the Executive Officers:
|
|
No Executive Officers or other employees of the Company are
members of the Compensation Committee or otherwise participate
in the final decision making process of the Compensation
Committee. Certain Executive Officers provide assistance to the
Compensation Committee by preparing and assembling materials or
other documents requested by the Compensation Committee and
distributing those materials to the Board in advance of most
meetings. The Chief Executive Officer of the Company
participates in certain Compensation Committee meetings and
provides input to pay strategy, program design and the pay
levels of those reporting to him. The Companys Senior Vice
President, Secretary and General Counsel acts as Secretary for
the Compensation Committee and generally takes minutes of its
meetings. Executive Officers and other Company employees are on
occasion invited to attend or otherwise participate in meetings
of the Compensation Committee, but the Compensation Committee
regularly sets aside time as part of each Compensation Committee
meeting for an executive session that excludes the participation
of any member of management.
|
|
Annual Performance Evaluations:
|
|
Each year the Compensation Committee evaluates the performance
of the Chairman, President and Chief Executive Officer,
Mr. Griffiths, with respect to his performance goals. The
performance goals generally include financial results, strategic
planning, capital allocation, management supervision, succession
planning, human resources, investor relations, leadership,
information flow, and any other criteria chosen by the
Compensation Committee. The Compensation Committee also provides
comments to Mr. Griffiths on overall performance,
challenges for the coming year, opportunities for improvement,
and any additional thoughts or concerns. The Compensation
Committee receives input from all the other independent members
of the Board and other sources. Once the evaluation is complete,
the Compensation Committee reviews it with the other independent
members of the Board for final review and approval. At least one
Non-Employee Board member then meets with Mr. Griffiths to
discuss the results of the annual evaluation. Each year the
Compensation Committee also reviews with the Chief Executive
Officer his evaluation of the other executive officers.
|
|
Compensation Committee Report:
|
|
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis with management and, based
on the review and discussions, it has recommended to the Board
of Directors that the Compensation Discussion and Analysis be
included in this Proxy Statement and incorporated by reference
in the Companys Annual Report on
Form 10-K.
|
Eric S. Belsky, Chair
Robert W. Anestis
Shirley D. Peterson
March 20, 2009
15
|
|
|
Nominating and Corporate
Governance
Committee:
|
|
The Nominating and Corporate Governance Committee met 4 times
during fiscal 2008.
|
|
|
|
Members:
|
|
|
Shirley D. Peterson, Chair
|
|
|
Robert W. Anestis
|
|
|
Selwyn Isakow
|
|
|
Eric S. Belsky
|
|
Responsibilities:
|
|
The powers and responsibilities of the Nominating Committee are
set forth in its charter, including:
|
|
|
|
Assist the Board in identifying and screening
qualified candidates to serve as Directors.
|
|
|
Recommend to the Board nominees to fill new
positions or vacancies as they occur among the Directors.
|
|
|
Recommend to the Board the candidates for
election or reelection as Directors by the shareholders at the
Annual Meeting.
|
|
|
Review corporate governance documents at least
annually and recommend appropriate changes.
|
|
|
Oversee the evaluation of the Board, including
individual members, Committees and the Lead Independent Director.
|
|
|
|
For additional information on the role of the Nominating and
Corporate Governance Committee in the selection of Directors,
see the Nomination of Directors section on page 8.
|
Shirley D. Peterson, Chair
Robert W. Anestis
Selwyn Isakow
Eric S. Belsky
March 20, 2009
16
Compensation of
Directors
The following table provides information regarding compensation
provided to the Non-employee Directors of the Company during
fiscal 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
Earned or
|
|
|
|
|
|
Option
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
Paid
|
|
|
|
|
|
Awards
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
Name
|
|
|
in Cash ($)
|
|
|
Stock Awards ($)(1)
|
|
|
($)
|
|
|
Compensation ($)
|
|
|
Earnings ($)
|
|
|
Compensation ($)
|
|
|
Total ($)
|
Robert W. Anestis
|
|
|
$
|
55,500
|
|
|
|
$
|
68,320
|
(2)
|
|
|
$
|
0
|
(7)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
123,820
|
|
Eric S. Belsky
|
|
|
$
|
60,000
|
|
|
|
$
|
78,568
|
(3)(4)
|
|
|
$
|
0
|
(8)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
138,568
|
|
Selwyn Isakow
|
|
|
$
|
91,500
|
|
|
|
$
|
68,320
|
(2)
|
|
|
$
|
0
|
(9)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
159,820
|
|
Brian D. Jellison
|
|
|
$
|
52,500
|
|
|
|
$
|
68,320
|
(2)(3)
|
|
|
$
|
0
|
(10)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
120,820
|
|
G. Michael Lynch
|
|
|
$
|
52,500
|
|
|
|
$
|
68,320
|
(2)(3)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
120,820
|
|
Thomas A. Madden
|
|
|
$
|
57,000
|
|
|
|
$
|
78,568
|
(4)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
135,568
|
|
Shirley D. Peterson
|
|
|
$
|
60,000
|
|
|
|
$
|
78,568
|
(4)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
138,568
|
|
David Weiss
|
|
|
$
|
17,750
|
|
|
|
$
|
23,987
|
(5)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
41,737
|
|
Michael A. Volkema
|
|
|
$
|
2,500
|
|
|
|
$
|
0
|
(6)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Compensation amount and shares
earned calculated in accordance with SFAS 123(R).
|
|
(2)
|
|
Reflects restricted stock award
grants as follows: (i) two-thirds of the May 7, 2008
award for 7,000 shares of the Companys Common Stock,
valued at the award date NYSE closing price of $9.50 per share,
partial compensation for membership on the Board for the
following year; the remaining one-third of that award is
scheduled to be earned during the first four months of 2009; and
(ii) one-third of the May 2, 2007 award for
7,000 shares of the Companys Common Stock valued at
the award date NYSE closing price of $10.28 per share. One-half
of the May 7, 2008 stock award is still subject to
forfeiture and is not scheduled to vest until May 7, 2009.
|
|
(3)
|
|
The following Directors have in
2008 or previously elected to defer the following stock awards:
Mr. Belsky 16,100; Mr. Jellison 19,750; and
Mr. Lynch 23,100. These awards will be issued by the
Company upon the Directors retirement, death or other
termination of service from the Board.
|
|
(4)
|
|
Reflects restricted stock award
grants as follows: (i) two-thirds of the May 7, 2008
award for 8,050 shares of the Companys Common Stock,
valued at the award date NYSE closing price of $9.50 per share,
partial compensation for membership on the Board for the
following year and for being a Committee chairperson; the
remaining one-third of those shares are scheduled to be earned
during the first four months of 2009; and (ii) one-third of
the May 2, 2007 award for 8,050 shares of the
Companys Common Stock valued at the award date NYSE
closing price of $10.28 per share. One-half of the May 7,
2008 stock award is still subject to forfeiture and is not
scheduled to vest until May 7, 2009.
|
|
(5)
|
|
Reflects one-third of the
May 2, 2007 restricted stock award for 7,000 shares of
the Companys Common Stock valued at the award date NYSE
closing price of $10.28 per share. Mr. Weiss did not stand
for re-election at the 2008 Annual Meeting.
|
|
(6)
|
|
As partial compensation for
membership on the Board, on June 1, 2008, the Company
granted Mr. Volkema an award for 6,521 shares of the
Companys Common Stock. These shares were subject to
transfer restrictions and semi-annual vesting. 3,260 of the
shares were scheduled to vest on December 1, 2008, and the
remaining 3,261 shares to vest on June 1, 2009.
Mr. Volkema resigned from the Board on October 1, 2008
and forfeited all 6,521 shares.
|
|
(7)
|
|
Mr. Anestis has the following
outstanding stock option awards with the Company as of
January 3, 2009: (i) 44,800 stock options granted on
May 1, 2001 with an exercise price of $9.10 per share and
an expiration date of May 1, 2011; and (ii) 20,800
stock options granted on April 30, 2002 with an exercise
price of $8.30 per share and an expiration date of
April 30, 2012.
|
17
|
|
|
(8)
|
|
Mr. Belsky has the following
outstanding stock option awards with the Company as of
January 3, 2009: (i) 4,996 stock options granted on
January 25, 2002 with an exercise price of $12.25 per share
and an expiration date of January 25, 2012; and
(ii) 19,200 stock options granted on April 30, 2002
with an exercise price of $8.30 per share and an expiration date
of April 30, 2012.
|
|
(9)
|
|
Mr. Isakow has the following
outstanding stock option awards with the Company as of
January 3, 2009: (i) 20,800 stock options granted on
May 2, 2000 with an exercise price of $6.13 per share and
an expiration date of May 2, 2010; (ii) 43,200 stock
options granted on May 1, 2001 with an exercise price of
$9.10 per share and an expiration date of May 1, 2011; and
(iii) 19,200 stock options granted on April 30, 2002
with an exercise price of $8.30 per share and an expiration date
of April 30, 2012.
|
|
(10)
|
|
Mr. Jellison has the following
outstanding stock option awards with the Company as of
January 3, 2009: (i) 24,000 stock options granted on
April 27, 1999, with an exercise price of $25.24 per share
and an expiration date of April 27, 2009; (ii) 19,200
stock options granted on May 2, 2000 with an exercise price
of $6.13 per share and an expiration date of May 2, 2010;
and (iii) 20,800 stock options granted on May 1, 2001
with an exercise price of $9.10 per share and an expiration date
of May 1, 2011.
|
|
|
|
General:
|
|
The role, responsibilities and liabilities of Non-employee
Directors have increased significantly due to governance reforms
and regulatory developments. The increased demand for
independent directors, coupled with a decreasing supply of
qualified directors due to increasing financial risk and overall
responsibilities, has led to significant changes in director
compensation. We believe Non-employee Directors should be
compensated for the significant role they perform for the
Company, while encouraging those Non-employee Directors to
maintain an equity investment in the Company. We also believe
that we should pay additional compensation to Non-employee
Directors that assume higher levels of responsibility, including
Committee members, Committee chairs, and any Lead Independent
Director or Non-employee Chairman of the Board.
|
|
|
|
Non-employee Director compensation consists of a cash component
and a stock component. Non-employee Directors receive the cash
component of their compensation pursuant to the Cash
Compensation Plan for Non-employee Directors (the Cash
Compensation Plan). They receive the stock component
pursuant to the 2005 Equity Compensation and Incentive Plan (the
2005 Equity Compensation Plan), which the
shareholders approved in 2005. A Director who is also an
employee of the Company receives no compensation for serving as
a Director, other than compensation for services as an employee.
All Directors are reimbursed for expenses to attend Board and
Committee meetings.
|
|
Cash Component:
|
|
The cash component of Non-employee Director compensation is
provided pursuant to the Cash Compensation Plan and consists of
a base annual cash retainer of $30,000, plus an additional
$4,500 for Committee Chairpersons, $60,000 for the Non-employee
Chairman of the Board, if any, and $30,000 for the Lead
Independent Director. In addition, Directors who serve on the
Audit and Financial Services Committee receive an additional
annual cash retainer of $15,000, and Directors who serve on the
Compensation and Human Resources Committee or the Nominating and
Corporate Governance Committee receive an additional annual cash
retainer of $9,000. Directors also receive $1,500 for each Board
meeting attended in person and $750 for each meeting attended by
telephone. The cash component is paid quarterly in arrears. A
Director appointed to fill a vacancy on the Board
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prior to an Annual Meeting receives a prorated cash retainer for
the interim term.
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Stock Component:
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The stock component of Non-employee Director compensation is
provided pursuant to the Companys 2005 Equity Compensation
Plan. The stock component consists of a restricted stock award
of 7,000 shares of Champions Common Stock (subject to
a maximum value of $120,000) plus an additional
1,050 shares for Committee Chairpersons (subject to a
maximum value of $18,000), and 1,000 shares for the
Non-employee Chairman of the Board, if any (subject to a maximum
value of $18,000). The stock component is paid upon election or
reelection at an Annual Meeting. A Director appointed to fill a
vacancy on the Board or who becomes a Committee Chairperson,
Non-employee Chairman or Lead Independent Director prior to an
Annual Meeting receives a prorated restricted stock award for
such interim term. Restrictions on the restricted stock award
lapse based on the Directors length of service with the
Company following the award. 50% vests after six months, the
remaining 50% vests after one year. Subject to the restrictions,
a Director may elect to defer receipt of a restricted stock
award until retirement, death or other termination of service
from the Board.
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Since 2002, the Company has not issued stock options to any of
its Non-employee Directors.
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Stock Ownership Requirement:
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Non-employee Directors are expected to own a minimum of
10,000 shares of Company Common Stock within three years
after joining the Board. The Companys General Counsel
monitors compliance with this requirement. Each of the
Non-employee Directors is currently in full compliance with his
or her stock ownership requirements.
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19
Compensation
Discussion and Analysis
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Summary:
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This Compensation Discussion and Analysis
(CD&A) explains our strategy, design, and
decision-making around our compensation programs and practices
for our principal executive officer, our principal financial
officer and our three other most highly compensated executive
officers (together, the Named Executive Officers).
It explains how the compensation of Champions top
management is appropriately aligned with the interests of our
shareholders, and is intended to place in perspective the
compensation information contained in the tables that follow
this discussion. It also reviews the process and the role played
by the Companys compensation consultant in making these
determinations. Our CD&A is organized as follows:
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Compensation Program Overview and
Philosophy.
A description of our compensation philosophy, an
overview of the key elements of Named Executive Officer
compensation and their objectives, and an explanation of our
approach to benchmarking compensation against market practices.
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Share Retention Requirements.
A
description of the share ownership and retention guidelines
applicable to our Named Executive Officers.
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Elements and Analysis of Compensation.
A more detailed description of the different elements of
compensation provided to our Named Executive Officers for 2008.
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Impact of Regulatory Requirements.
A
discussion of the impact of Sections 162(m) and 409A of the
Internal Revenue Code and various other regulatory requirements
on our executive compensation decisions.
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Information about the Compensation Committee and the processes
it uses in determining the compensation of our named executive
officers is provided in the Corporation Governance section of
this Proxy Statement. As of December 26, 2008, one of the
Named Executive Officers, Mr. Jeffrey L. Nugent, was no
longer with the Company.
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Compensation Program Overview and Philosophy:
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We believe that compensation for the Named Executive Officers
should be tightly linked to the strategy and metrics used by the
Company to measure creation of shareholder value, with the
annual performance bonuses and long-term performance incentives
tied to the Companys performance and the achievement of
the Companys long-term objectives. To dovetail with the
strategic planning effort undertaken in 2007, to ensure that the
executive compensation programs of the Company encourage its
execution of the Companys Strategic Plan, and to reward
the Named Executive Officers for long-term enhancements in value
to the shareholders, numerous changes were made to the
Companys compensation program for the Companys Named
Executive Officers for 2008.
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Each component of the Companys compensation program for
Named Executive Officers plays a distinct role in fulfilling the
Companys executive compensation objectives and strategy:
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Base Salaries
are established in
accordance with the executives position, performance,
experience, skills and market practices.
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Stock retention requirements
are
intended to align the interests of the Named Executive Officers
with those of the Companys shareholders.
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Annual Performance Bonuses
provide the
opportunity for compensation based on annual Company
performance, and on a limited basis individual performance,
taking into consideration the cyclical nature of the
manufactured housing industry.
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Long-Term Incentives
provide the
opportunity for compensation based on the Companys
performance over a multi-year period. In addition, Long-Term
Incentives encourage company stock ownership, link executive
rewards to shareholder value, and encourage retention.
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Perquisites and other forms of non-cash
benefits
are minimized in an effort to avoid an entitlement
mentality and reinforce a
pay-for-performance
philosophy.
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Severance and change in control
provisions
provide a level of protection which enhances
executive productivity and encourages them to behave in the best
interests of shareholders in times of uncertainty.
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The significant economic contraction in the countries in which
the Company operates has significantly affected the
Companys financial performance and its ability to execute
the Strategic Plan. While the Strategic Plan remains the
long-term objective of the Company, our near-term focus has
shifted to meeting the immediate challenges facing the Company.
The Companys compensation program in 2009 is being
adjusted to reflect this shift in priorities. This includes a
change in the performance measurements for the annual
performance bonus, the award of incentive stock options to aid
in the retention of management, and suspension of our use of the
Transformation Growth Plan.
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General Compensation Philosophy:
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The Companys executive compensation programs are designed
to create value for its shareholders. In 2007, Champions
Compensation Committee conducted an extensive review of the
Companys executive compensation strategy and programs to
ensure strong alignment between executive compensation and
business strategy. As a result of this review, the Compensation
Committee refined its compensation philosophy and approved
certain changes to Champions executive compensation
strategy for 2008. In response to the unprecedented declines in
the U.S. housing market and the significant economic contraction
in the countries in which the Company operates, the Compensation
Committee has made refinements to this pay strategy for 2009.
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Champions executive compensation strategy delivers clear
messages about the business priorities of the Company and
encourages executives
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to make value-enhancing decisions. Key elements of that strategy
include:
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Position Executive Pay Commensurate with
Performance.
Pay at competitive median levels of
compensation for median performance; pay well above competitive
levels for outstanding achievement; and pay well below
competitive levels for poor performance. In executing this
approach, the executive compensation strategy takes into
consideration performance over a multi-year time frame, which is
consistent with the Companys business planning time
horizon.
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Emphasize Long-term Incentives in the Pay
Mix, Commensurate with Size and Growth.
As Champion grows in
size, scope, and value, recognize executive performance
increasingly through the use of long-term incentive
opportunities, as opposed to fixed or short-term pay.
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Benchmark Champions Pay Levels to a
Specific Group as well as to a Broader Group of Peer
Companies.
Compare Champions executive compensation
not only to a select group of companies similar to Champion, but
also to a broader group of companies in the capital goods,
automotive, and consumer durables industries.
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Measure Performance in a Way that Strongly
Links Executive Pay to the Sustained Creation of Shareholder
Value.
Focus executives on corporate financial and strategic
performance that links to shareholder value. Reward only for
absolute performance achievements for long-term incentives, but
take into account both individual achievements and industry
conditions when measuring performance for short-term incentives.
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Encourage Stock Ownership.
Align
executives with shareholders by encouraging them to hold a
meaningful ownership stake in the Company.
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Retain High-Performing Executives.
Encourage high-performing and valuable executives to stay with
the Company over the long-term.
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We do not allocate between cash versus non-cash compensation and
short-term versus long-term compensation based on specific
percentages. Instead, we believe that the compensation package
for Named Executive Officers should be generally in line with
the prevailing market, and that performance incentives should be
more heavily weighted than base salaries and other fixed
components of compensation. Each year the Compensation Committee
evaluates the performance of the Chief Executive Officer and
reviews with the Chief Executive Officer his evaluation of the
other Named Executive Officers.
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Benchmarking:
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As a result of the Committees 2007 study of executive pay,
Champion adopted a pay positioning strategy that pays
commensurately with performance. In accordance with this
strategy, we will:
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Pay at competitive median levels for
competitive median performance;
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Pay at well above competitive levels for
exceptional performance; and
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Pay at well below competitive levels for poor
performance.
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While execution of the Companys Strategic Plan is being
deferred to meet current challenges, our pay positioning
strategy has not changed.
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To execute the pay positioning strategy described above, market
pay levels have been and will continue to be used as reference
points for establishing Champions pay and for determining
appropriate pay for performance relationships. Obtaining
relevant and comparable market information is challenging for
the Company. Given the nature of the manufactured housing
industry, our direct competitors are generally not comparable to
the Company due to size or other differences. Some are privately
held and do not disclose pay levels, and others have senior
executives with substantial equity holdings in the company. Our
largest direct competitor is a subsidiary of a large diverse
business entity, so the compensation levels of the executive
officers of that competitor are not available. Pursuant to the
executive compensation review conducted in 2007, the
Compensation Committee adopted a pay peer benchmarking
philosophy that draws on two different peer groups: (1) a
specific group of 15 companies that are similar to Champion
in terms of size, volatility, emphasis on long-term performance,
and industry, and (2) a broader group of companies in the
capital goods, automotive and consumer durables industries. The
more specific group of 15 peers provides direct reference points
for pay levels and practices, and the broader group of peers
augments our statistical confidence in the analysis and further
supports our findings from the specific peer group.
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The specific group of 15 peer companies (Peer
Companies) was screened based on a number of criteria,
including 2006 revenue size between $500 million and
$5 billion, GICS industry classifications of 2010 (capital
goods), 2510 (autos and components), or 2520 (consumer
durables), non-government, industrial business focus, stock
price volatility, and long-term incentive mix. This Peer Group
was recommended by the Compensation Committees
compensation consultant, and approved by the Compensation
Committee. The Peer Group currently consists of the following
companies (ticker symbols in parenthesis): Actuant (ATU), BE
Aerospace (BEAV), Fleetwood (FLTWQ.OB), Foster-Wheeler (FWLT),
Graftech (GTI), Joy Global (JOYG), McDermott (MDR), NCI Building
(NCS), Pall Corporation (PLL), Tenneco (TEN), Trinity Industries
(TRN), SPX (SPW), URS (URS), Wabash (WNC) and Winnebago (WGO).
The Compensation Committee reviews and refreshes the list of
Peer Companies from time to time, as needed.
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Information collected from the Peer Companies and periodically
reviewed by the Committee includes total compensation levels
(including base salary, annual bonus, long-term incentives, and
other compensation), stock incentive practices (including
dilution and share usage), and other related items for executive
officer positions. Information from the broader peer group
discussed above and from compensation surveys also is gathered
periodically to assess and validate market pay levels. We
believe our 2008 base salaries for our Named Executive Officers
averaged near the median of the Peer Companies. We also believe
that our retirement and other benefits and perquisites are very
lean relative to general industry practice, but we have not
attempted to quantify the shortfall or convert it into other
forms of direct compensation. The low level of retirement and
other benefits is a consideration, however, in determining other
incentive compensation opportunities. In summary, we believe
that information on how much other companies pay is only one of
many factors to be considered in evaluating the supply and
demand
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for executives, with compensation decisions ultimately
reflecting an evaluation of each individuals contribution
and value to the Company.
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Share Retention Requirements:
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We believe that retention of Company Common Stock by the Named
Executive Officers is very important and shows a strong
commitment to the Company. Pursuant to a policy adopted by the
Board in 2004, Named Executive Officers are required to retain a
minimum level of Company Common Stock depending on the position
held. Any Named Executive Officer receiving stock compensation
pursuant to a performance share award or restricted stock award
is required to retain and not sell at least 50% of the after tax
shares received until their minimum Company Common Stock
retention levels are achieved. The current minimum Company
Common Stock retention levels for the Named Executive Officers,
subject to periodic review by the Compensation Committee, are:
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William C. Griffiths
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250,000 shares
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Chairman, President
and Chief Executive Officer
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Phyllis A. Knight
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75,000 shares
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Executive Vice President,
Treasurer and Chief Financial Officer
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Roger K. Scholten
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75,000 shares
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Sr. Vice President, Secretary and
General Counsel
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Richard P. Hevelhorst
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25,000 shares
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Vice President and Controller
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The stock retention requirements are intended to align the
interests of the Named Executive Officers with those of the
Companys shareholders. The Companys General Counsel
monitors Named Executive Officer share retention and reports to
the Compensation Committee annually on stock retention levels
and stock retention requirement compliance. The current Company
Common Stock retention level for each of the Named Executive
Officers is set forth in the Management Share Retention table on
page 49. When calculating retention levels for the stock
retention requirements, we include any shares directly owned but
we do not include unexercised stock options, unvested restricted
stock awards, or unvested performance share awards. As of
March 20, 2009, each of the current Named Executive
Officers is in full compliance with the Companys stock
retention policy.
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Trading Restrictions:
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It is a policy of the Company that Named Executive Officers may
not purchase or sell options, puts, calls, or other derivative
securities in the Companys Common Stock. In addition,
Named Executive Officers may not purchase any of the
Companys publicly traded debt securities.
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Elements and Analysis of Compensation:
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The compensation program for the Companys Named Executive
Officers is composed of the elements set forth below. The Short
Term Incentive Plan (STIP), Performance Share Plan (PSP), and
Transformation Growth Plan (TGP) for 2008, which are each more
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particularly described below, are separate components of the
Companys compensation strategy for Named Executive
Officers. The PSP and TGP are each governed by and administered
under the Companys 2005 Equity Compensation and Incentive
Plan.
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Base Salary:
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The Compensation Committee reviews the base salaries of the
executive officers each year, as well as at the time of a
promotion or any other change in responsibilities. Base salaries
are established in accordance with each executives
position, performance, experience and skills, as well as market
practices. Base salary increases are usually established around
the end of each calendar year and take effect on January 1,
although the Compensation Committee reserves the right to change
this schedule in the future.
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In early 2008, the Compensation Committee recommended and the
Board subsequently approved base salary increases for the Named
Executive Officers effective as of January 1, 2008. The
base salary increase for Mr. Griffiths, the Chairman,
President and Chief Executive Officer, was based on his 2007
performance evaluation, an analysis of competitive pay levels,
and his continuing development as Chairman, President and Chief
Executive Officer of the Company. The base salary increases for
the other Named Executive Officers were based upon their
individual performance and an analysis of competitive pay levels
for each position. The increases are shown in the table below:
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2008 Base
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Name
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2007 Base Salary
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Salary
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% Increase
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William C. Griffiths
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$
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765,000
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$
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795,000
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3.9%
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Phyllis A. Knight
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$
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379,000
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$
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400,000
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5.5%
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Roger K. Scholten
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$
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340,000
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$
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340,000
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0.0%
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Jeffrey L. Nugent
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$
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216,000
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$
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250,000
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15.7%
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Richard P. Hevelhorst
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$
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211,000
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$
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230,000
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9.0%
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In early 2009, the Compensation Committee determined that
Company performance was not sufficient to warrant salary
increases for any of the Named Executive Officers for 2009.
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Annual Performance Bonuses:
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We believe a significant portion of the Named Executive Officer
cash compensation each year should be based on performance
against set performance targets. Annual performance bonuses are
provided to the Named Executive Officers as cash bonuses based
on the achievement of certain performance targets. Annual
performance bonuses are designed to focus participants on and
reward for the achievement of specific annual financial
objectives of the Company. Each participant is assigned a target
and maximum bonus opportunity as a percentage of base salary.
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Annual performance bonuses are based on the achievement of
performance targets that are reviewed and agreed to by the
Compensation Committee. Each year, the Compensation Committee
reviews the performance targets and the criteria used to measure
those targets. The performance targets and criteria used to
measure those targets are established by the Compensation
Committee near the start of each fiscal year. Performance
bonuses are generally payable in the first quarter of the
following year, after final determination by the
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Compensation Committee as to what extent, if any, the
performance targets have been met.
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2008 Annual Performance Bonuses.
Pursuant to the
Committees 2007 executive compensation review, the
Committee recommended and the Board approved modification of
certain elements of the Named Executive Officers annual
performance bonuses for 2008 and changed the name of the program
to the Short Term Incentive Plan (STIP). These
changes were made to better align the annual performance bonuses
with Champions Strategic Plan, and to recognize the
powerful effects that industry conditions have on Company
performance. The 2008 annual performance bonuses for the Named
Executive Officers were structured similarly to the previous
annual bonuses, based on performance against a set financial
target with each participant assigned a target and maximum bonus
opportunity as a percentage of base salary. There were however
two significant changes from prior years: (i) the criterion
for the performance targets was changed from cash
earnings to total business value, and
(ii) the award could be adjusted upwards or downwards using
a discretionary adjustment mechanism based on factory-built
housing shipments, to account for changing conditions in the
factory-built housing industry and other factors the Committee
deems relevant.
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For the 2008 annual performance bonuses, the criterion used to
measure the performance targets was the percentage change in
total business value. Total business value is calculated using a
proprietary model developed by the Company and the compensation
consultant that values the financial performance of the Company
as a function of its cash earnings, cash return on investment,
and net distributions to the Companys shareholders. In
addition, the Company also uses this total business value model
to analyze and value decisions around acquisitions,
divestitures, and capital investments.
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The improvements in total business value needed to generate
threshold, target and maximum awards under the STIP is a
function of competitive performance benchmarks of the broad peer
group from the capital goods, automotive components, and
consumer durables industry sectors described in the
Benchmarking section above. The performance goal is
calibrated so that median (fiftieth percentile) improvement in
total business value will generate target annual performance
bonuses; exceptional improvement in total business value (five
times median improvement, or eighty-fifth percentile
performance) will generate maximum annual performance bonuses of
three times the target bonuses; and unchanged total business
value (thirty-fifth percentile performance) will generate
threshold bonuses of 50% of target bonuses. The annual
performance bonus shall be pro-rated if actual performance falls
between the target and the threshold or maximum amounts. A
decrease in total business value will generate no annual
performance bonuses. This total business value model was
developed by the Company with the assistance of the Compensation
Committee as part of a proprietary analysis of the factors that
the Company believes drive long-term and sustainable changes in
its stock price and overall shareholder value.
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The Committee may in its discretion increase or decrease the
STIP awards by up to 50% of the target bonus for significant
increases or decreases in U.S. factory-built housing shipments,
or for other exceptional performance considerations such as
acquisitions, divestitures, or for outstanding individual
contributions. The Committee has established certain guidelines
for adjustments based on increases or decreases in U.S.
factory-built housing shipments. In addition, the Committee may
adjust actual awards downward based on Company performance
and/or individual performance considerations.
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The potential performance bonuses for 2008 are set forth in the
table below and are expressed as a percentage of base salary.
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Potential 2008 Performance Bonus
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(as a percentage of base salary)
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Name
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Threshold
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Target
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Maximum
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William C. Griffiths
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50%
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100%
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300%
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Phyllis A. Knight
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40%
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80%
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240%
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Roger K. Scholten
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25%
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50%
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150%
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Jeffrey L. Nugent
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25%
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50%
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150%
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Richard P. Hevelhorst
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25%
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50%
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150%
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Because the Companys change in total business value during
2008 was below the threshold level pre-determined by the
Compensation Committee, no Named Executive Officer received a
STIP performance bonus for 2008. Although the Committee had the
ability under the STIP to make a discretionary award for 2008,
it refrained from doing so due to the challenging financial
conditions the Company faces.
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Changes for the 2009 Annual Performance Bonuses.
In
response to the credit crisis and the Companys financial
challenges, the Committee recommended and the Board approved
certain modifications to the Short Term Incentive Plan
(STIP) for the Named Executive Officers for 2009.
Rather than measuring performance against an increase in the
Companys total business value, the 2009 STIP
performance bonus will be earned upon attainment of specific
financial targets comprised of quarterly cash and EBITDA goals.
Unlike previous years, the STIP does not have a threshold or
maximum performance level. Target awards will be paid only if
performance goals are met or exceeded. Potential performance
bonuses for 2009 are set forth in the table below, and are
expressed as a percentage of base salary.
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Potential 2009
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Performance Bonus
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(as a percentage of base salary)
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Name
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Target
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William C. Griffiths
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100%
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Phyllis A. Knight
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80%
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Roger K. Scholten
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50%
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Richard P. Hevelhorst
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50%
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Long-Term Incentive Compensation:
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We believe that equity-based compensation gives the Named
Executive Officers a continuing stake in the long-term success
of the Company and aligns their interests with the interests of
the Companys shareholders.
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Long-term incentive compensation further focuses the Named
Executive Officers on certain long-term objectives of the
Company believed to be closely linked to shareholder value, and
rewards them for the achievement of those long-term objectives.
The amount and mix of long-term performance incentives given to
each Named Executive Officer are based on level of job
responsibility, individual performance, experience, and skill
level. Long-term performance incentives are also based on a
review of prior grants, market data for comparable executive
officers in the Peer Group and recommendations from its
compensation consultant.
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Performance Share Awards:
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Performance share awards are designed to provide strong
incentives to achieve superior Company performance, while
encouraging value-creating decisions that benefit the
shareholders. They are also designed to help retain talented
executives and encourage stock ownership by management.
Performance share awards are usually granted to the Named
Executive Officers around the beginning of each calendar year.
The Compensation Committee recommended and the Board approved
the performance goals and the number of shares granted to each
Named Executive Officer in 2008. Going forward, the Board has
delegated to the Compensation Committee the authority to approve
the compensation for each Named Executive Officer other than the
Chief Executive Officer. The number of shares granted to each
Named Executive Officer is based on their expected impact on the
long-term performance of the business, a review of prior grants,
and market data for executives in similar positions.
|
|
|
|
All current outstanding performance share awards are earned by
the Named Executive Officers based on two factors: (i) the
Companys achievement of certain performance goals over a
three year performance period, and (ii) each Named
Executive Officers continued employment with the Company
until financial results are finalized for the third year of the
performance period. If a Named Executive Officer is no longer
employed with the Company when financial results are finalized
for the third year of the performance period, all the
performance shares for that award are forfeited, including any
earned but unvested shares. The annual granting of performance
share awards and the overlapping three-year vesting of those
awards are designed to promote the retention of the Named
Executive Officers.
|
|
|
|
A description of all outstanding performance share awards for
the Named Executive Officers as of the end of the 2008 fiscal
year is contained in the Outstanding Equity Awards at Fiscal
Year End Table on page 41. The performance share awards
granted during the 2008 fiscal year are summarized in the Grants
of Plan-Based Awards Table on page 39. There are currently
four different sets of performance share awards outstanding for
the Named Executive Officers, including those granted in early
2009:
|
|
|
|
The performance share awards granted
January 6, 2006 based on the Companys performance in
fiscal years
2006-2008.
These shares were 27.5% earned and vested, and were recently
distributed to the eligible Named Executive Officers.
|
|
|
|
The performance share awards granted on
February 13, 2007 based on the Companys performance
in fiscal years
2007-2009.
These
|
28
|
|
|
|
|
shares are 20.2% earned based on the Companys performance
in 2007 and 2008.
|
|
|
|
The performance share awards granted on
February 18, 2008 based on the Companys performance
in fiscal years
2008-2010.
These shares are 0% earned based on the Companys
performance in 2008.
|
|
|
|
The performance share awards granted on
March 6, 2009 based on the Companys performance in
fiscal years
2009-2011.
|
|
|
|
The Compensation Committee reserves the right to revisit all
aspects of any future performance share awards and performance
goals.
|
|
|
|
2008 Performance Share Grant.
Pursuant to the
Committees 2007 executive compensation review, the
Committee changed the criterion for the performance share awards
granted in 2008 and changed the name of the program to the
Performance Share Plan (PSP). These changes were
made to better align the performance share awards with
Champions five-year Strategic Plan. The criterion for the
performance goal was changed from cash earnings to
total business value. See discussion of total
business value above in the 2008 Annual Performance
Bonuses portion of the Performance Bonus
section. The number of shares earned is based on the percentage
increase in the total business value over the three-year
performance period from 2008 to 2010. Unlike previous
performance share awards, shares are not earned or vested each
year. Awards are earned based on the increase in total business
value over the entire three-year performance period, and the
Named Executive Officers must remain employed with the Company
until earnings are finalized for the third year of the
performance period for the shares to become vested. On
February 18, 2008, the Compensation Committee recommended
and the Board approved the following performance share awards
for to the Companys Named Executive Officers:
|
|
|
|
|
|
|
|
2008 Performance Share
|
Name
|
|
Awards Granted (Target)
|
|
William C. Griffiths
|
|
|
150,000
|
|
Phyllis A. Knight
|
|
|
50,000
|
|
Roger K. Scholten
|
|
|
30,000
|
|
Jeffrey L. Nugent
|
|
|
17,500
|
|
Richard P. Hevelhorst
|
|
|
15,000
|
|
|
|
|
|
|
The improvements in total business value needed to generate
target awards is a function of competitive performance
benchmarks of the broad peer group from the capital goods,
automotive components, and consumer durables industry sectors
described in the Benchmarking section above. The
performance goal is calibrated so that median or above
improvement in total business value will generate the full
target performance share award; and threshold or unchanged total
business value (thirty-third percentile performance) will
generate half of the target performance share award. The number
of shares earned shall be pro-rated if performance falls between
the threshold and target performance. A decrease in total
business value over the performance period will result in no
performance shares earned. These performance share awards are
designed to qualify for the performance-based
|
29
|
|
|
|
|
compensation exception of Section 162(m) of the
Internal Revenue Code and therefore be deductible by the Company.
|
|
|
|
Changes for 2009 Performance Share Grant.
As of
March 6, 2009, the Compensation Committee, with the
approval of the Board for the Chief Executive Officer, approved
the performance share grants set forth below, expressed in
shares that potentially may be awarded.
|
|
|
|
|
|
|
|
2009 Performance Share
|
Name
|
|
Awards Granted (Target)
|
|
William C. Griffiths
|
|
|
200,000
|
|
Phyllis A. Knight
|
|
|
67,000
|
|
Roger K. Scholten
|
|
|
40,000
|
|
Richard P. Hevelhorst
|
|
|
20,000
|
|
|
|
|
|
|
2008 Transformation Growth Plan.
In early 2008, the
Compensation Committee established a new Transformation Growth
Plan (TGP) for the Named Executive Officers and
certain other officers of the Company deemed to have significant
influence over the long-term achievement of the Companys
strategic objectives. The objectives of the TGP are:
|
|
|
|
Focus management on achievement of long-term goals
consistent with the Strategic Plan
|
|
|
|
Measure the ability of management to significantly
grow and transform the Company in terms of revenue, profit and
value
|
|
|
|
Encourage long-term sustainable growth in value for
shareholders
|
|
|
|
Pay only for above market performance
|
|
|
|
Encourage ownership of the Companys stock
|
|
|
|
Promote retention of those individuals who are
critical to the success of the business
|
|
|
|
Shares under the TGP are earned by the Named Executive Officers
upon the achievement of three distinct performance goals:
(i) the Companys achievement of an above median total
business value threshold, (ii) the Companys
achievement of revenue objectives set in accordance with the
Companys Strategic Plan, and (iii) continued
employment with the Company until the earned shares are vested.
|
|
|
|
On February 18, 2008 the Compensation Committee recommended
and the Board approved the following TGP restricted stock grants
to the Companys Named Executive Officers (as subsequently
amended due to annual limitations in the 2005 Equity and
Compensation Plan):
|
|
|
|
|
|
|
|
Number of Transformation Growth
|
Name
|
|
Plan (TGP) Shares Granted
|
|
William C. Griffiths
|
|
|
235,000
|
|
Phyllis A. Knight
|
|
|
125,000
|
|
Roger K. Scholten
|
|
|
75,000
|
|
Jeffrey L. Nugent
|
|
|
35,000
|
|
Richard P. Hevelhorst
|
|
|
30,000
|
|
|
|
|
|
|
However, in light of the significant economic contraction in the
countries in which the Company operates and the anticipated
difficulty of meeting
|
30
|
|
|
|
|
the TGP goals, which were predicated upon relatively normal
global housing and credit markets, all TGP participants,
including the Named Executive Officers, in February 2009, agreed
to forfeit all outstanding TGP grants. As a consequence, there
are no outstanding TGP grants. However, the Committee reserves
the right to make future grants under the TGP as it deems
appropriate.
|
|
|
|
Restricted Stock Awards.
The Company occasionally grants
one-time restricted stock awards to the Named Executive Officers
based on outstanding individual performance or as an inducement
for a person to join the Company. On February 18, 2008, the
Committee granted Mr. Griffiths a special restricted stock
award of 15,000 shares of Company Common Stock (valued at
$8.37 on the award date). This award was granted in recognition
of Mr. Griffiths outstanding leadership and strategic
performance in 2007, including the identification and execution
of key strategic acquisitions and the development of a
compelling strategic plan for the Company. This award vested on
February 18, 2009, and was paid to Mr. Griffiths.
There were no other restricted awards granted in the 2008 fiscal
year. A description of all outstanding restricted stock awards
for the Named Executive Officers at the end of the 2008 fiscal
year is contained in the Outstanding Equity Awards at Fiscal
Year End Table on page 41.
|
|
|
|
Incentive Stock Options.
The use of stock options as the
primary long-term incentives for the Named Executive Officers
has been in recent years largely replaced by performance share
awards. However, in light of current market conditions, concerns
regarding the retention of key management, and a desire to focus
management on restoring value to shareholders, the Committee
determined it was appropriate to issue a special grant of
incentive stock options to the Named Executive Officers.
|
|
|
|
As of March 6, 2009, the Company granted retention awards
in the form of incentive stock options to the Named Executive
Officers to purchase shares in the following amounts at an
exercise price of $0.20 per share (the fair market value of the
Company Common Stock on the grant date). As long as the Named
Executive Officers remain employed with the Company, these
options will fully vest on March 6, 2011, and will remain
exercisable until March 6, 2016.
|
|
|
|
|
|
|
|
2009 Retention Awards
|
Name
|
|
Incentive Stock Options
|
|
William C. Griffiths
|
|
|
200,000
|
|
Phyllis A. Knight
|
|
|
100,000
|
|
Roger K. Scholten
|
|
|
85,000
|
|
Richard P. Hevelhorst
|
|
|
57,500
|
|
|
|
|
|
|
There were no stock options granted in the 2008 fiscal year. A
description of all outstanding stock option awards for the Named
Executive Officers at the end of the 2008 fiscal year is
contained in the Outstanding Equity Awards at Fiscal Year End
Table on page 41.
|
31
|
|
|
Executive Benefits and Perquisites:
|
|
In accordance with the Companys philosophy to de-emphasize
executive benefits and perquisites, the Company provides lean
benefits and perquisites to its Named Executive Officers. The
value of these executive benefits and perquisites are below
competitive levels. The following table summarizes benefits
provided to Named Executive Officers and how these benefits
compare to those provided to other employees.
|
|
|
|
|
|
Plan
|
|
Benefit
|
|
|
Description
|
|
Description
|
|
Offered to:
|
|
|
Health Plan
|
|
Normal employee
health plan
|
|
Most other employees
|
401(k) Plan
|
|
In 2008, 50%
match up to 6% of
salary and bonus to
$7,500 maximum
Subsequent to
January 23, 2009,
no match in 2009
|
|
All other employees
|
Non-Qualified Deferred
Compensation Plan
|
|
No Company
contributions
|
|
All senior managers
|
Short-term Disability
|
|
100% of base
salary for 26 weeks
|
|
All senior managers
|
Life Insurance
|
|
2 x salary
|
|
All senior managers
|
|
|
|
|
|
No executive perquisites are provided to any Named Executive
Officer, except that the Company reimburses the Chief Executive
Officer for country club membership dues and assessments, as
negotiated as an inducement in his employment agreement.
|
|
Severance Benefits:
|
|
We believe that the Company should provide reasonable severance
benefits to our employees. We also believe that, as partial
consideration for such severance benefits, it is in the
Companys best interest to: (i) obtain a release from
employees to avoid future disputes, and (ii) prevent key
employees from competing with the Company after their employment
is terminated by requiring non-solicitation and non-competition
provisions in the severance agreement.
|
|
|
|
Severance agreements were included in employment agreements for
certain Named Executive Officers to address competitive concerns
when those Named Executive Officers were recruited.
Mr. Griffiths employment agreement, which on
December 17, 2008, was extended for a four-year term,
includes severance provisions. If Mr. Griffiths is
terminated without cause or if he terminates his employment for
good reason, Mr. Griffiths is entitled to: (i) a
pro-rata portion of his performance bonus for the year of
termination, and (ii) base salary continuation for
24 months. Ms. Knights employment agreement also
includes severance provisions. If Ms. Knight is terminated
by the Company for any reason other than gross malfeasance or
legal reasons or if she terminates her employment after her
title, compensation and/or responsibilities are reduced, she is
entitled to: 18 months of (i) base salary,
(ii) bonus, and (iii) benefits.
|
32
|
|
|
|
|
The Companys Executive Officer Severance Plan (the
Severance Plan) that covers the other Named
Executive Officers was amended effective December 31, 2008,
to bring it into compliance with Section 409A of the
Internal Revenue Code. The Severance Plan, as amended, provides
that if a participants employment is terminated by the
Company without cause or by the participant for good reason the
participant is entitled to receive severance benefits. Severance
benefits include the following for up to 18 months:
(i) base salary continuation payments, less the amount of
any other severance payments received from the Company, and
(ii) health and other insurance benefits. After the first
12 months the participant must start actively seeking other
employment, and any compensation earned from other employment is
set off against any severance benefits. Before receiving any
severance benefits, participants in the Severance Plan must sign
a general release of all claims against the Company. In
addition, participants must comply with non-solicitation and
non-competition provisions that survive for two years.
|
|
|
|
Assuming a hypothetical termination date of January 3,
2009, the benefits payable to the Named Executive Officers under
their severance agreements would be estimated as set forth in
the Potential Payments Upon Termination or
Change-in-Control
Disclosure table on page 45. These amounts are estimates
only, and do not necessarily reflect the actual amounts that
would be paid to the Named Executive Officers.
|
|
Change in Control:
|
|
The Company has a separate change in control agreement with each
of the Named Executive Officers. Each of these agreements, with
the exception of Mr. Nugents, were amended effective
December 17, 2008, to bring them into compliance with
Section 409A of the Internal Revenue Code. Due to
Mr. Nugents separation from employment with the
Company, effective December 26, 2008, his agreement has
terminated. The Company also has change in control provisions in
certain equity grants made to Named Executive Officers. These
agreements and provisions are intended to provide for continuity
of management in the event of a change of control. Based on the
Compensation Committees discussions with and data provided
by its compensation consultant, we believe the level of benefits
included in these agreements and provisions, as described below,
are consistent with the general practice among our Peer Group.
|
|
|
|
The change in control agreement for each Named Executive Officer
is a double trigger agreement, meaning the officer
would only receive a cash severance payment if his or her
employment were to be terminated by the Company without cause,
or by the officer for good reason, following a change in control
of the Company.
|
|
|
|
The main benefits payable under each change in control agreement
are:
|
|
|
|
a pro-rata portion of the officers
performance bonus for the year of termination,
|
|
|
|
a severance payment of up to two times the sum
of the officers annual base salary and target performance
bonus, plus
|
|
|
|
health and other insurance benefits for up to
two years from date of termination.
|
33
|
|
|
|
|
The agreements for Mrs. Knight and Messrs. Scholten
and Hevelhorst also include non-solicitation and non-competition
obligations on the part of the officer that survive for two
years following the date of termination. The agreement for
Mr. Griffiths references similar non-solicitation and
non-competition obligations in his employment agreement. The
agreement for Mr. Griffiths also provides that in certain
circumstances the severance payment will be increased to fully
compensate Mr. Griffiths for any U.S. federal excise tax
paid by him due to his receiving the severance payment, as well
as for any U.S. federal, state or local income tax payments
arising due to his receipt of such additional amount. This gross
up payment would not be paid to Mr. Griffiths, however, if
the excise tax could be avoided by reducing the amount of his
severance payment by up to 7.5%. The Company considered similar
tax
gross-up
provisions for its other Named Executive Officers, but declined
to adopt such provisions because of the financial inefficiency
of tax
gross-up
provisions. Their agreements do not include a tax
gross-up
provision, but instead provide that in certain circumstances the
severance payment may be reduced so that the payment will not be
subject to U.S. federal excise taxes.
|
|
|
|
There is no explicit change in control provision for the
performance share awards granted to the Named Executive Officers
on February 13, 2007, February 18, 2008 and
March 6, 2009, but the Compensation Committee has
discretionary authority to vest all or a portion of these shares
upon a change in control. All other equity awards to the Named
Executive Officers were granted under the Companys
shareholder approved 1995 Stock Option and Incentive Plan (the
1995 Plan). Pursuant to the terms of the 1995 Plan
all grants under that plan have single triggers,
meaning the awards vest immediately upon a change in control of
the Company.
|
|
|
|
Assuming a hypothetical termination date of January 3,
2009, the benefits payable to the Named Executive Officers under
the change in control agreements and provisions would be
estimated as set forth in the Potential Payments Upon
Termination or
Change-in-Control
Disclosure table on page 45. These amounts are estimates
only, and do not necessarily reflect the actual amounts that
would paid to the Named Executive Officers.
|
|
|
|
Impact of Regulatory Requirements:
|
|
Tax Deductibility of Pay.
Section 162(m) of
the Internal Revenue Code limits to $1 million the
corporate tax deduction for compensation paid to certain
executive officers. There is an exception to the $1 million
limitation for performance-based compensation that is based on
nondiscretionary, pre-established performance goals. The
Compensation Committee believes that it has taken appropriate
actions to preserve the deductibility of most of the annual
performance bonuses and long-term performance incentive awards.
However, the Compensation Committee also recognizes the need to
retain flexibility to make compensation decisions that may not
meet Section 162(m) standards to enable the Company to
attract, retain and motivate highly qualified executives. The
Compensation Committee therefore reserves the authority to
approve non-deductible compensation in appropriate
circumstances. Also, because of ambiguities and uncertainties as
to the application and
|
34
|
|
|
|
|
interpretation of Section 162(m) and the related
regulations and guidance, no assurance can be given that
compensation intended by us to satisfy the requirements for
deductibility under Section 162(m) will in fact do so.
|
|
|
|
Excise Tax on Certain Change in Control Payments.
U.S. federal tax law imposes tax penalties on payments
associated with a change of control to the extent they exceed a
specified level. These penalties include a 20% excise tax on
executives and elimination of a tax deduction by the Company.
See the discussion in the section on
change-in-control
payments for an explanation of the implications of this excise
tax provision on the design of our
change-in-control
programs.
|
|
|
|
Section 409A of the Internal Revenue Code.
Awards under the Companys benefits plans and
employment agreements may, in some cases, result in a deferral
of compensation that is subject to the requirements of
Section 409A of the Internal Revenue Code. Generally, to
the extent these awards are subject to Section 409A, such
awards will be subject to immediate taxation in the year they
vest and a 20% tax penalty unless the requirements of
Section 409A are satisfied. It is the intent of the Company
that awards under its benefits plans and employment agreements
be structured and administered in a manner that complies with
the requirements of Section 409A. To this effect, in
December 2008, the Board amended the Companys benefits
plans and employment agreements in order to comply with the
requirements of Section 409A of the Internal Revenue Code.
|
35
Executive
Compensation
Summary
Compensation Table
The following table summarizes the compensation for the last
three fiscal years of the Companys principal executive
officer, principal financial officer and the other three most
highly compensated executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
Non-qualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
Option
|
|
|
|
Incentive Plan
|
|
|
|
Deferred
|
|
|
|
All Other
|
|
|
|
|
|
Name and
|
|
|
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Awards
|
|
|
|
Awards
|
|
|
|
Compensation
|
|
|
|
Compensation
|
|
|
|
Compensation
|
|
|
|
Total
|
|
Position
|
|
|
Year
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)(2)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
Earnings ($)
|
|
|
|
($)
|
|
|
|
($)
|
|
William C. Griffiths
Chairman, President &
Chief Executive Officer
|
|
|
2008
|
|
|
$
|
810,288
|
|
|
|
$
|
0
|
|
|
|
$
|
62,272(3)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
26,487(17)
|
|
|
|
$
|
899,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
$
|
765,000
|
|
|
|
$
|
410,040(1)
|
|
|
|
$
|
1,142,306(4)
|
|
|
|
$
|
163,337(15)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
18,781(17)
|
|
|
|
$
|
2,499,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
$
|
675,000
|
|
|
|
$
|
0
|
|
|
|
$
|
1,031,033(5)
|
|
|
|
$
|
163,332(15)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
15,978(17)
|
|
|
|
$
|
1,885,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phyllis A. Knight
Executive Vice President,
Chief Financial Officer &
Treasurer
|
|
|
2008
|
|
|
$
|
407,692
|
|
|
|
$
|
0
|
|
|
|
$
|
90,324(6)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
10,340(18)
|
|
|
|
$
|
508,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
$
|
379,000
|
|
|
|
$
|
162,515(1)
|
|
|
|
$
|
427,228(7)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
8,569(18)
|
|
|
|
$
|
977,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
$
|
364,000
|
|
|
|
$
|
0
|
|
|
|
$
|
471,083(8)
|
|
|
|
$
|
84,600(16)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
6,634(18)
|
|
|
|
$
|
926,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roger K. Scholten
Senior Vice President,
General Counsel & Secretary
|
|
|
2008
|
|
|
$
|
346,538
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
5,836(19)
|
|
|
|
$
|
352,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey L. Nugent
Vice President,
Human Resources
|
|
|
2008
|
|
|
$
|
250,000
|
|
|
|
$
|
0
|
|
|
|
$
|
46,164(9)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
9,050(20)
|
|
|
|
$
|
305,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
$
|
216,000
|
|
|
|
$
|
57,888(1)
|
|
|
|
$
|
304,840(10)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
7,517(20)
|
|
|
|
$
|
586,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
$
|
208,000
|
|
|
|
$
|
0
|
|
|
|
$
|
309,183(11)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
6,010(20)
|
|
|
|
$
|
523,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard P. Hevelhorst
Vice President & Controller
|
|
|
2008
|
|
|
$
|
234,423
|
|
|
|
$
|
0
|
|
|
|
$
|
(6,289)(12)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
8,878(21)
|
|
|
|
$
|
237,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
$
|
211,000
|
|
|
|
$
|
56,548(1)
|
|
|
|
$
|
123,045(13)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
7,343(21)
|
|
|
|
$
|
397,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
$
|
203,000
|
|
|
|
$
|
0
|
|
|
|
$
|
120,017(14)
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
7,274(21)
|
|
|
|
$
|
330,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The Compensation Committee
determined that the Company had actually achieved 33.6% of the
target annual performance bonus in 2007, but the Committee
recommended and the Board approved an additional 20.0%
discretionary annual performance bonus.
|
|
(2)
|
|
Shares earned and compensation
amount calculated in accordance with SFAS 123(R).
|
|
(3)
|
|
Amount represents the sum of the
following: (i) 1,049 shares (1.0%) of the
110,000 share performance share award dated January 6,
2006, at the award date NYSE closing price of $13.00 per share;
(ii) negative 7,788 shares (negative 5.2%) of the
150,000 share performance share award dated
February 13, 2007, at the award date NYSE closing price of
$7.85 per share; and (iii) 13,115 shares (87.4%) of
the 15,000 share restricted stock award dated
February 18, 2008 that vested on February 18, 2009.
|
|
(4)
|
|
Amount represents the sum of the
following: (i) 19.4% of the 61,665 share restricted
stock award dated August 1, 2004, at the award date NYSE
closing price of $9.73 per share; (ii) 19.4% of the
61,665 share performance share award dated August 1,
2004, at the award date NYSE closing price of $9.73 per share;
(iii) one-third of the 110,000 share performance share
award dated November 22, 2004, at the award date NYSE
closing price of $11.75 per share; (iv) 12.5% of the
110,000 share performance share award dated January 6,
2006, at the award date NYSE closing price of $13.00 per share;
and (v) 25.4% of the 150,000 share performance share
award dated February 13, 2007, at the award date NYSE
closing price of $7.85 per share.
|
|
(5)
|
|
Amount represents the sum of the
following: (i) one-third of the 61,665 share
restricted stock award dated August 1, 2004, at the award
date NYSE closing price of $9.73 per share; (ii) one-third
of the 61,665 share performance share award dated
August 1, 2004, at the award date NYSE closing price of
$9.73 per share; (iii) one-third of the 110,000 share
performance share award dated November 22, 2004, at the
award date NYSE closing price of $11.75 per share; and
(iv) 14.0% of the 110,000 share performance share
award dated January 6, 2006, at the award date NYSE closing
price of $13.00 per share.
|
36
|
|
|
(6)
|
|
Amount represents the sum of the
following: (i) one-fifth of the 45,000 share
restricted stock award dated November 22, 2004, at the
award date NYSE closing price of $11.75 per share;
(ii) 381 shares (1.0%) of the 40,000 share
performance share award dated January 6, 2006, at the award
date NYSE closing price of $13.00 per share; and
(iii) negative 2,596 shares (negative 5.2%) of the
50,000 share performance share award dated
February 13, 2007, at the award date NYSE closing price of
$7.85 per share.
|
|
(7)
|
|
Amount represents the sum of the
following: (i) one-fifth of the 45,000 share
restricted stock award dated November 22, 2004, at the
award date NYSE closing price of $11.75 per share;
(ii) one-third of the 40,000 share performance share
award dated November 22, 2004, at the award date NYSE
closing price of $11.75 per share; (iii) 12.5% of the
40,000 share performance share award dated January 6,
2006, at the award date NYSE closing price of $13.00 per share;
and (iv) 25.4% of the 50,000 share performance share
award dated February 13, 2007, at the award date NYSE
closing price of $7.85 per share.
|
|
(8)
|
|
Amount represents the sum of the
following: (i) one-fifth of the 45,000 share
restricted stock award dated November 22, 2004, at the
award date NYSE closing price of $11.75 per share;
(ii) one-third of the 40,000 share performance share
award dated March 15, 2004, at the award date NYSE closing
price of $10.19 per share; (iii) one-third of the
40,000 share performance share award dated
November 22, 2004, at the award date NYSE closing price of
$11.75 per share; and (iv) and 14.0% of the
40,000 share performance share award dated January 6,
2006, at the award date NYSE closing price of $13.00 per share.
|
|
(9)
|
|
Amount represents the sum of the
following: (i) one-fifth of the 25,000 share
restricted stock award dated November 22, 2004, at the
award date NYSE closing price of $11.75 per share;
(ii) 286 shares (1.0%) of the 30,000 share
performance share award dated January 6, 2006, at the award
date NYSE closing price of $13.00 per share; and
(ii) negative 2,077 shares (negative 5.2%) of the
40,000 share performance share award dated
February 13, 2007, at the award date NYSE closing price of
$7.85 per share.
|
|
(10)
|
|
Amount represents the sum of the
following: (i) one-fifth of the 25,000 share
restricted stock award dated November 22, 2004, at the
award date NYSE closing price of $11.75 per share;
(ii) one-third of the 30,000 share performance share
award dated November 22, 2004, at the award date NYSE
closing price of $11.75 per share; (iii) 12.5% of the
30,000 share performance share award dated January 6,
2006, at the award date NYSE closing price of $13.00 per share;
and (iv) 25.4% of the 40,000 share performance share
award dated February 13, 2007, at the award date NYSE
closing price of $7.85 per share.
|
|
(11)
|
|
Amount represents the sum of the
following: (i) one-fifth of the 25,000 share
restricted stock award dated November 22, 2004, at the
award date NYSE closing price of $11.75 per share;
(ii) one-third of the 20,000 share performance share
award dated March 15, 2004, at the award date NYSE closing
price of $11.75 per share; (iii) one-third of the
30,000 share performance share award dated
November 22, 2004, at the award date NYSE closing price of
$11.75 per share; and (iv) 14.2% of the 30,000 share
performance share award dated January 6, 2006, at the award
date NYSE closing price of $13.00 per share.
|
|
(12)
|
|
Amount represents the sum of the
following: (i) 143 shares (1.0%) of the
15,000 share performance share award dated January 6,
2006, at the award date NYSE closing price of $13.00 per share;
and (ii) negative 1,038 shares (negative 5.2%) of the
20,000 share performance share award dated
February 13, 2007, at the award date NYSE closing price of
$7.85 per share.
|
|
(13)
|
|
Amount represents the sum of the
following: (i) one-third of the 15,000 share
performance share award dated November 22, 2004, at the
award date NYSE closing price of $11.75 per share;
(ii) 12.5% of the 15,000 share performance share award
dated January 6, 2006, at the award date NYSE closing price
of $13.00 per share; and (iii) 25.4% of the
20,000 share performance share award dated
February 13, 2007, at the award date NYSE closing price of
$7.85 per share.
|
|
(14)
|
|
Amount represents the sum of the
following: (i) one-third of the 10,000 share
performance share award dated March 15, 2004, at the award
date NYSE closing price of $10.19 per share; (ii) one-third
of the 15,000 share performance share award dated
November 22, 2004, at the award date NYSE closing price of
$11.75 per share; and (iii) 14.0% of the 15,000 share
performance share award dated January 6, 2006, at the award
date NYSE closing price of $13.00 per share.
|
|
(15)
|
|
2007 amount consisted of a stock
option award of 33,334 shares that vested in 2007, valued
at the award date fair value of $4.90 per share. 2006 amount
consisted of a stock option award of 33,333 shares that
vested in 2006, valued at the award date fair value of $4.90 per
share. Fair value was determined using the
Black-Scholes
option-pricing model.
|
|
(16)
|
|
Amount represents one-fourth of the
stock option award of 480,000 shares granted on
October 17, 2002. The award vested in annual installments
on each of the first four anniversaries of the grant date. The
value
|
37
|
|
|
|
|
reported was for a pro-rated nine
months of compensation cost in 2006, based on a grant date fair
value of $0.94 per share. Fair value was determined using the
Black-Scholes option-pricing model.
|
|
(17)
|
|
2008 includes $6,900 of Company
contributions to the Savings Plan, $6,837 of life and long-term
disability insurance premiums, and $12,750 for country club
membership dues and assessments. 2007 includes a net $6,300 of
Company contributions to the Savings Plan, $3,672 of life
insurance premiums, and $8,809 for monthly country club
membership dues. 2006 includes a net $5,178 of Company
contributions to the Savings Plan, $2,700 of life insurance
premiums, and $8,100 for monthly country club membership dues.
|
|
(18)
|
|
2008 includes $6,900 of Company
contributions to the Savings Plan and $3,440 of life and
long-term disability insurance premiums. 2007 includes a net
$6,750 of Company contributions to the Savings Plan and $1,819
of life insurance premiums. 2006 includes a net $5,178 of
Company contributions to the Savings Plan and $1,456 of life
insurance premiums.
|
|
(19)
|
|
2008 includes $2,912 of Company
contributions to the Savings Plan and $2,924 of life and
long-term disability insurance premiums.
|
|
(20)
|
|
2008 includes $6,900 of Company
contributions to the Savings Plan and $2,150 of life and
long-term disability insurance premiums. 2007 includes a net
$6,480 of Company contributions to the Savings Plan and $1,037
of life insurance premiums. 2006 includes a net $5,178 of
Company contributions to the Savings Plan and $832 of life
insurance premiums.
|
|
(21)
|
|
2008 includes $6,900 of Company
contributions to the Savings Plan and $1,978 of life and
long-term disability insurance premiums. 2007 includes a net
$6,330 of Company contributions to the Savings Plan and $1,013
of life insurance premiums. 2006 includes a net $6,300 of
Company contributions to the Savings Plan and $974 of life
insurance premiums.
|
Employment
Agreements
|
|
|
William C. Griffiths
:
|
|
The Company has an employment agreement with Mr. Griffiths,
dated July 12, 2004, and extended for a four-year term on
December 17, 2008, which provides for an initial annual
salary of $600,000. This amount increased to $675,000 effective
January 1, 2006, to $765,000 effective January 1, 2007
and to $795,000 effective January 1, 2008.
Mr. Griffiths is entitled to participate in various benefit
and incentive plans.
|
|
Phyllis A. Knight
:
|
|
The Company has a letter agreement with Mrs. Knight, dated
October 17, 2002, and amended on December 17, 2008 to
bring it into compliance with Section 409A of the Internal
Revenue Code, which provides for an initial annual salary of
$350,000, but with a voluntary reduction to $320,000 until the
Company returned to profitability. This amount was reset to
$350,000 in 2004, and increased to $364,000 effective
January 1, 2006, to $379,000 effective January 1, 2007
and to $400,000 effective January 1, 2008. Mrs. Knight
is entitled to participate in various benefit and incentive
plans.
|
|
Roger K. Scholten
|
|
The Company has a letter agreement with Mr. Scholten, dated
October 17, 2007, which provides for an initial annual
salary of $340,000. Mr. Scholtens annual salary did
not increase in 2008. Mr. Scholten is entitled to
participate in various benefits and incentive plans.
|
|
Jeffrey L. Nugent
:
|
|
The Company had a letter agreement with Mr. Nugent dated
September 21, 2004, which provided for an initial annual
salary of $200,000. This amount increased to $208,000 effective
January 1, 2006, to $216,000 effective January 1, 2007
and to $250,000 effective January 1, 2008. Due to
Mr. Nugents separation from employment with the
Company, effective December 26, 2008, his agreement was
terminated.
|
38
Grants of
Plan-Based Awards
The following table provides information regarding equity and
non-equity plan awards granted during fiscal 2008 to the
executives listed in the Summary Compensation Table. These
performance share awards were granted pursuant to the
Companys 2005 Equity Compensation and Incentive Plan. For
further information on these awards, please see the
Performance Share Awards section of the Compensation
Discussion and Analysis beginning on page 28 of this Proxy
Statement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Estimated Future Payouts
|
|
|
Stock
|
|
|
Option
|
|
|
Exercise/
|
|
|
Grant date
|
|
|
|
|
|
|
Under Non-Equity
|
|
|
Under Equity
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Base
|
|
|
fair value
|
|
|
|
|
|
|
Incentive Plan Awards
|
|
|
Incentive Plan Awards
|
|
|
# of
|
|
|
# of
|
|
|
Price
|
|
|
of stock
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Securities
|
|
|
of Option
|
|
|
and option
|
|
|
|
Grant
|
|
|
ThresHold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
of Stock/
|
|
|
Underlying
|
|
|
Awards
|
|
|
awards
|
Name
|
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
Units
|
|
|
Options
|
|
|
($/Sh)
|
|
|
($)(4)
|
William C. Griffiths
|
|
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
|
|
Chairman, President & Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 TGP award
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
235,000(1)
|
|
|
|
|
235,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,966,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 performance award
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000(2)
|
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,255,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 restricted stock award
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000(3)
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
125,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phyllis A. Knight
|
|
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
|
|
Executive Vice President, Chief Financial Officer &
Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 TGP award
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000(1)
|
|
|
|
|
125,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,046,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 performance award
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000(2)
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
418,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roger K. Scholten
|
|
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
|
|
Senior Vice President, General Counsel & Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 TGP award
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000(1)
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
627,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 performance award
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000(2)
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
251,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey L. Nugent
|
|
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
|
|
Vice President, Human Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 TGP award(5)
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000(1)
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
292,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 performance award(5)
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,500(2)
|
|
|
|
|
17,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
146,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard P. Hevelhorst
|
|
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
|
|
Vice President & Controller
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 TGP award
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000(1)
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
251,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 performance award
|
|
|
2/18/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000(2)
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
125,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The 2008 Transformation Growth Plan
(TGP) shares were granted to the Named Executive
Officers on February 18, 2008, and are earned based upon
attainment of five-year performance goals covering fiscal years
2008 through 2012. The TGP shares may be earned after three,
four or five years only if certain threshold targets are first
attained and then based on the degree to which the performance
targets are attained. Earned TGP shares will vest over two years
from the date earned, subject to the continued employment of the
Named Executive Officers with the Company. In February 2009, all
TGP participants agreed to the forfeiture of all outstanding TGP
awards.
|
|
(2)
|
|
The 2008 performance share awards
were granted to the Named Executive Officers on
February 18, 2008, and are earned based upon attainment of
three-year performance goals covering fiscal years 2008 through
|
39
|
|
|
|
|
2010. Any 2008 performance shares
earned will vest in February or March of 2011, so long as the
Named Executive Officer is still employed with the Company when
the Companys earnings for 2010 are finalized.
|
|
(3)
|
|
The 2008 performance share award
was granted to Mr. Griffiths on February 18, 2008 and
vested on February 18, 2009.
|
|
(4)
|
|
The grant date of February 18,
2008 was a bank holiday. The grant date fair value was based on
the NYSE closing price on the next trading day,
February 19, 2008 of $8.37 per share.
|
|
(5)
|
|
Mr. Nugent forfeited all such
share awards upon his separation from employment with the
Company on December 26, 2008.
|
40
Outstanding
Equity Awards at Fiscal Year End
The following table provides information regarding equity awards
outstanding as of January 3, 2009 to the executives listed
in the Summary Compensation Table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
or Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
# of
|
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
Unearned
|
|
|
|
Shares,
|
|
|
|
|
# of
|
|
|
|
# of
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
# of
|
|
|
|
Shares or
|
|
|
|
Shares,
|
|
|
|
Units or
|
|
|
|
|
Securities
|
|
|
|
Securities
|
|
|
|
# of Securities
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
Units of
|
|
|
|
Units or
|
|
|
|
Other
|
|
|
|
|
Underlying
|
|
|
|
Underlying
|
|
|
|
Underlying
|
|
|
|
Option
|
|
|
|
|
|
|
|
or Units of
|
|
|
|
Stock
|
|
|
|
Other
|
|
|
|
Rights
|
|
|
|
|
Unexercised
|
|
|
|
Unexercised
|
|
|
|
Unexercised
|
|
|
|
Exercise
|
|
|
|
Option
|
|
|
|
Stock
|
|
|
|
That Have
|
|
|
|
Rights
|
|
|
|
That Have
|
|
|
|
|
Options
|
|
|
|
Options
|
|
|
|
Unearned
|
|
|
|
Price
|
|
|
|
Expiration
|
|
|
|
That Have
|
|
|
|
Not Vested
|
|
|
|
That Have
|
|
|
|
Not Vested
|
|
|
|
|
Exercisable
|
|
|
|
Unexercisable
|
|
|
|
Options
|
|
|
|
($)
|
|
|
|
Date
|
|
|
|
Not Vested
|
|
|
|
($)
|
|
|
|
Not Vested
|
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
(2)
|
|
|
|
(3)
|
|
|
|
(2)
|
|
William C. Griffiths
|
|
|
|
100,000
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
$
|
9.73
|
|
|
|
|
8/1/2009
|
|
|
|
|
73,628 (4)
|
|
|
|
$
|
46,385
|
|
|
|
|
76,886 (8)
|
|
|
|
$
|
48,438
|
|
Chairman, President & Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phyllis A. Knight
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
22,123 (5)
|
|
|
|
$
|
13,937
|
|
|
|
|
32,964 (9)
|
|
|
|
$
|
20,768
|
|
Executive Vice President, Chief Financial Officer &
Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roger K. Scholten
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
15,000 (10)
|
|
|
|
$
|
9,450
|
|
Senior Vice President, General Counsel & Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey L. Nugent
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
0 (6)
|
|
|
|
$
|
0
|
|
|
|
|
0 (6)
|
|
|
|
$
|
0
|
|
Vice President, Human Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard P. Hevelhorst
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
8,160 (7)
|
|
|
|
$
|
5,141
|
|
|
|
|
7,500 (11)
|
|
|
|
$
|
4,725
|
|
Vice President & Controller
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
This column includes unvested
restricted stock awards and shares of performance share awards
that have been earned pursuant to the performance goals and
other terms set forth in the award. These shares are subject to
forfeiture if the Named Executive Officers employment with
the Company is terminated before the shares vest.
|
|
(2)
|
|
Based on a market price of $0.63
per share, which was the NYSE closing price on January 2,
2009, the last trading day prior to the 2008 fiscal year end.
|
|
(3)
|
|
This column includes shares of
performance share awards that have not been earned pursuant to
the performance goals and other terms of the award. These shares
are also subject to forfeiture if the Named Executive
Officers employment with the Company is terminated before
the shares vest.
|
|
(4)
|
|
Represents the following:
(i) 30,228 shares (27.5%) of the 110,000 share
performance share award dated January 6, 2006, which vested
on February 20, 2009 ; (ii) 30,285 shares (20.2%)
of the 150,000 share performance share award dated
February 13, 2007, which is scheduled to vest in early 2010
when fiscal year 2009 earnings are finalized; and
(iii) 13,115 shares (87.4%) of the 15,000 share
restricted stock award dated February 18, 2008, that vested
on February 18, 2009.
|
|
(5)
|
|
Represents the following:
(i) 1,036 shares of the 45,000 share restricted
stock award dated November 22, 2004, the final
9,000 shares of which are scheduled to vest on
November 22, 2009; (ii) 10,992 shares (27.5%) of
the 40,000 share performance share award dated
January 6, 2006, which vested on February 20, 2009;
and (iii) 10,095 shares (20.2%) of the
50,000 share performance share award dated
February 13, 2007, which is scheduled to vest in early 2010
when fiscal year 2009 earnings are finalized.
|
|
(6)
|
|
All unvested shares were forfeited
upon Mr. Nugents separation from employment with the
Company on December 26, 2008.
|
|
(7)
|
|
Represents the following:
(i) 4,122 shares (27.5%) of the 15,000 share
performance share award dated January 6, 2006, which vested
on February 20, 2009; and (ii) 4,038 shares
(20.2%) of the 20,000 share
|
41
|
|
|
|
|
performance share award dated
February 13, 2007, which is scheduled to vest in early 2010
when fiscal year 2009 earnings are finalized.
|
|
(8)
|
|
Represents the following:
(i) 0 shares of the 119,715 unearned shares from the
150,000 share performance share award dated
February 13, 2007, because no additional shares are
expected to be earned; (ii) 75,000 shares
(50.0% the threshold amount) of the
150,000 share performance share award dated
February 18, 2008, which if earned is scheduled to vest in
early 2011 when fiscal year 2010 earnings are finalized; and
(iii) 1,885 shares (12.6%) of the 15,000 share
restricted stock award dated February 18, 2008, that vested
on February 18, 2009. TGP awards of 235,000 shares
that were voluntarily forfeited in February 2009 have been
excluded. A total of 79,772 shares from the performance
award dated January 6, 2006, that were not earned during
the 2006 to 2008 three-year period have been excluded.
|
|
(9)
|
|
Represents the following:
(i) 0 shares of the 39,905 unearned shares from the
50,000 share performance share award dated
February 13, 2007, because no additional shares are
expected to be earned; (ii) 25,000 shares
(50.0% the threshold amount) of the
50,000 share performance share award dated
February 18, 2008, which if earned is scheduled to vest in
early 2011 when fiscal year 2010 earnings are finalized; and
(iii) 7,964 shares of the 45,000 share restricted
stock award dated November 22, 2004,the final
9,000 shares of which are scheduled to vest on
November 22, 2009. TGP awards of 125,000 shares that
were voluntarily forfeited in February 2009 have been excluded.
A total of 29,008 shares from the performance award dated
January 6, 2006, that were not earned during the 2006 to
2008 three-year period have been excluded.
|
|
(10)
|
|
Represents the following:
15,000 shares (50.0% the threshold amount) of
the 30,000 share performance share award dated
February 18, 2008, which if earned is scheduled to vest in
early 2011 when fiscal year 2010 earnings are finalized. TGP
awards of 75,000 shares that were voluntarily forfeited in
February 2009 have been excluded.
|
|
(11)
|
|
Represents the following:
(i) 0 shares of the 15,962 unearned shares from the
20,000 share performance share award dated
February 13, 2007, because no additional shares are
expected to be earned; and (ii) 7,500 shares
(50.0% the threshold amount) of the
15,000 share performance share award dated
February 18, 2008, which if earned is scheduled to vest in
early 2011 when fiscal year 2010 earnings are finalized. TGP
awards of 30,000 shares that were voluntarily forfeited in
February 2009 have been excluded. A total of 10,878 shares
from the performance award dated January 6, 2006, that were
not earned during the 2006 to 2008 three-year period have been
excluded.
|
42
Option Exercises
and Stock Vested
The following table provides information regarding the value
realized from the exercise of stock options and vesting of stock
awards during fiscal 2008 by the executives in the Summary
Compensation Table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
# of
|
|
|
|
|
|
# of
|
|
|
|
|
|
|
Shares
|
|
|
Value Realized
|
|
|
Shares
|
|
|
Value Realized
|
|
|
|
Acquired
|
|
|
Upon Exercise
|
|
|
Acquired
|
|
|
on Vesting
|
Name
|
|
|
on Exercise
|
|
|
($)
|
|
|
on Vesting
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William C. Griffiths
Chairman, President &
Chief Executive Officer
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
110,000 (2
|
)
|
|
|
$
|
894,300 (5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phyllis A. Knight
Executive Vice President,
Chief Financial Officer & Treasurer
|
|
|
|
150,000 (1
|
)
|
|
|
$
|
1,173,000 (1
|
)
|
|
|
|
49,000 (3
|
)
|
|
|
$
|
331,320 (6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roger K. Scholten
Senior Vice President,
General Counsel & Secretary
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey L. Nugent
Vice President,
Human Resources
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
35,000 (4
|
)
|
|
|
$
|
247,300 (6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard P. Hevelhorst
Vice President & Controller
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
15,000 (2
|
)
|
|
|
$
|
121,950 (5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Represents two options exercised by
Mrs. Knight: (i) the exercise of 50,000 stock options
on April 17, 2008, based on an exercise price of $2.48 per
share and the April 17, 2008 market price equal to the NYSE
closing price of $10.26; and (ii) the exercise of 100,000
stock options on April 30, 2008, based on an exercise price
of $2.48 per share and the April 30, 2008 market price
equal to the NYSE closing price of $10.32.
|
|
(2)
|
|
Represents 100% of the share
performance share award dated November 22, 2004 that vested
on February 20, 2008.
|
|
(3)
|
|
Represents the following:
(i) the vesting on February 20, 2008 of the entire
40,000 share performance stock award dated
November 22, 2004; and (ii) the vesting on
November 22, 2008 of one-fifth (9,000 shares) of the
45,000 shares restricted stock award granted on
November 22, 2004.
|
|
(4)
|
|
Represents the following:
(i) the vesting on February 20, 2008 of the entire
30,000 share performance stock award dated
November 22, 2004; and (ii) the vesting on
November 22, 2008 of one-fifth (5,000 shares) of the
25,000 shares restricted stock award granted on
November 22, 2004.
|
|
(5)
|
|
Based on the February 20, 2008
vesting date NYSE closing price of $8.13 per share.
|
|
(6)
|
|
Based on the February 20, 2008
vesting date NYSE closing price of $8.13 per share for
performance share awards and the NYSE closing price of $0.68 per
share on November 21, 2008, the last trading day before the
Saturday vesting date of November 22, 2008 for restricted
stock awards.
|
43
Pension
Benefits
The Company does not provide any pension plan benefits to its
Named Executive Officers or other management of the Company.
Nonqualified
Deferred Compensation
The Company sponsors a Nonqualified Deferred Compensation Plan
for the Companys executive officers and other members of
management. Under the Companys Non-Qualified Deferred
Compensation Plan participants may defer their salary and bonus
payments but the Company makes no contributions to the Plan. The
following is a summary of participation in the Plan by Named
Executive Officers for 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
Aggregate
|
|
|
|
Withdrawals/
|
|
|
|
Aggregate
|
|
|
|
|
Executive
|
|
|
|
Contributions
|
|
|
|
Earnings
|
|
|
|
Distributions
|
|
|
|
Balance at
|
|
|
|
|
Contributions
|
|
|
|
in Fiscal
|
|
|
|
(Losses) in
|
|
|
|
in Fiscal
|
|
|
|
January 3,
|
|
Name
|
|
|
in Fiscal 2008
|
|
|
|
2008
|
|
|
|
Fiscal 2008
|
|
|
|
2008
|
|
|
|
2009
|
|
William C. Griffiths Chairman, President & Chief
Executive Officer
|
|
|
$
|
39,750
|
(1)
|
|
|
$
|
0
|
|
|
|
$
|
(19,807
|
)(2)
|
|
|
$
|
0
|
|
|
|
$
|
44,665
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey L. Nugent Vice President, Human Resources
|
|
|
$
|
12,500
|
(1)
|
|
|
$
|
0
|
|
|
|
$
|
(2,868
|
)(2)
|
|
|
$
|
0
|
|
|
|
$
|
20,138
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
This amount is included in the 2008
salary amount reported in the Summary Compensation Table for the
Named Executive Officers.
|
|
(2)
|
|
None of this amount is included in
the 2008 compensation amount reported in the Summary
Compensation Table for the Named Executive Officers.
|
|
(3)
|
|
Cumulative compensation totaling
$66,525 has been reported in the Summary Compensation Table for
2008 and prior years that is related to this aggregate balance
at January 3, 2009.
|
|
(4)
|
|
Cumulative compensation totaling
$23,300 has been reported in the Summary Compensation Table for
2008 and prior years that is related to this aggregate balance
at January 3, 2009.
|
Potential
Payments Upon Termination or Change in Control
The Company has a separate change in control agreement with each
of the Named Executive Officers. In addition, both
Mr. Griffiths and Mrs. Knights employment
agreements include severance provisions, and the Companys
Severance Plan provides for severance benefits for the other
Named Executive Officers. For a full discussion of these change
of control and severance arrangements, please refer to the
Change of Control and Severance Benefits sections of the
Compensation Discussion and Analysis, beginning on page 32.
|
|
|
Potential Payments Upon Termination of Change in Control:
|
|
Assuming a hypothetical termination date of January 3,
2009, the benefits payable to the Named Executive Officers under
their Change in Control and severance agreements would be
estimated as set forth in the following table. These amounts are
estimates only, and do not necessarily reflect the actual
amounts that would be paid to the Named Executive Officers.
|
44
Table of
Potential Payments Upon Termination or Change in
Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Scenario
|
|
|
|
|
|
|
By Employee
|
|
|
By the
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary
|
|
|
For Good
|
|
|
Company
|
|
|
By the Company
|
|
|
Normal
|
|
|
Early
|
|
|
|
|
|
Potential Payments Upon
|
|
|
Resignation
|
|
|
Reason
|
|
|
For Cause
|
|
|
Without Cause
|
|
|
Retirement
|
|
|
Retirement
|
|
|
Change-in-Control
|
|
|
Termination or CIC
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William C. Griffiths,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman, President & Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payments
|
|
|
$
|
0
|
|
|
|
$
|
2,385,000
|
(2)
|
|
|
$
|
0
|
|
|
|
$
|
2,385,000
|
(2)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
3,975,000
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Equity Awards
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
28,494
|
(9)(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continued Perquisites/Benefits
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
32,211
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Gross-Ups
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
0
|
|
|
|
$
|
2,385,000
|
|
|
|
$
|
0
|
|
|
|
$
|
2,385,000
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
4,035,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phyllis A. Knight,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President, Chief Financial Officer &
Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payments
|
|
|
$
|
0
|
|
|
|
$
|
1,080,000
|
(3)
|
|
|
$
|
0
|
|
|
|
$
|
1,080,000
|
(3)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
1,760,000
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Equity Awards
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
12,595
|
(9)(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continued Perquisites/Benefits
|
|
|
$
|
0
|
|
|
|
$
|
19,063
|
(4)
|
|
|
$
|
0
|
|
|
|
$
|
19,063
|
(4)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
25,418
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Gross-Ups
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
0
|
|
|
|
$
|
1,099,063
|
|
|
|
$
|
0
|
|
|
|
$
|
1,099,063
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
1,798,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roger K. Scholten,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Vice President, General Counsel & Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payments
|
|
|
$
|
0
|
|
|
|
$
|
510,000
|
(5)
|
|
|
$
|
0
|
|
|
|
$
|
510,000
|
(5)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
1,190,000
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Equity Awards
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continued Perquisites/Benefits
|
|
|
$
|
0
|
|
|
|
$
|
18,289
|
(6)
|
|
|
$
|
0
|
|
|
|
$
|
18,289
|
(6)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
24,386
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Gross-Ups
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
0
|
|
|
|
$
|
528,289
|
|
|
|
$
|
0
|
|
|
|
$
|
528,289
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
1,214,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard P. Hevelhorst,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President & Controller
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Payments
|
|
|
$
|
0
|
|
|
|
$
|
345,000
|
(5)
|
|
|
$
|
0
|
|
|
|
$
|
345,000
|
(5)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
632,500
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated Equity Awards
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
2,597
|
(9)(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continued Perquisites/Benefits
|
|
|
$
|
0
|
|
|
|
$
|
16,870
|
(6)
|
|
|
$
|
0
|
|
|
|
$
|
16,870
|
(6)
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
16,870
|
(16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Gross-Ups
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
0
|
|
|
|
$
|
361,870
|
|
|
|
$
|
0
|
|
|
|
$
|
361,870
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
651,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
For a detailed discussion of
severance benefits and change in control provisions, see the
Severance Benefits and Change in Control sections on
pages 32 and 33 respectively of the Compensation Discussion
and Analysis. All stock values are based on the $0.63 per share
NYSE closing price of the Companys common stock on
January 2, 2009, the last trading day of the Companys
2008 fiscal year. Mr. Nugent is not included in the table
above due to his separation from employment with the Company
effective December 26, 2008. Pursuant to the Executive
Officer Severance Plan, Mr. Nugent is entitled to receive
cash payments and continued benefits for up to 18 months
totaling $375,000 and $12,253, respectively.
|
|
(2)
|
|
According to his employment
agreement, if Mr. Griffiths is terminated without cause or
if he terminates his employment for good reason, he is entitled
to: (i) base salary continuation for 24 months, or
$1,590,000 based on Mr. Griffiths 2009 salary; and
(ii) a pro-rata portion of the officers performance
bonus for the year of termination, which based on
Mr. Griffiths 2009 target bonus of 100% of base
salary, would be $795,000.
|
45
|
|
|
(3)
|
|
According to her employment
agreement, if Mrs. Knight is terminated by the Company for
any reason other than gross malfeasance or legal reasons or if
she terminates her employment after her title, compensation
and/or responsibilities are reduced, she is entitled to
18 months of base salary, bonus and benefits. Based on
Mrs. Knights 2009 salary and target bonus of 80% of
base salary, she is entitled to salary continuation of $600,000
and bonus amount of $480,000.
|
|
(4)
|
|
Health and other insurance benefits
for 18 months, based on the Companys average cost and
per Mrs. Knights employment agreement. Does not
include cost for short-term disability benefit, which is
self-funded
by the Company.
|
|
(5)
|
|
Base salary for 18 months. We
have assumed the maximum length of base salary payment under the
Companys Executive Officer Severance Plan. According to
that plan, after 12 months the Named Executive Officer must
start actively seeking other employment and any compensation
received from other employment is set off against this payment.
|
|
(6)
|
|
Health and other insurance benefits
for 18 months, based on the Companys average costs
and per the Companys Executive Officer Severance Plan. We
have assumed the maximum length of benefits under the
Companys Executive Officer Severance Plan. According to
that plan, after 12 months the Named Executive Officer must
start actively seeking other employment and any benefits
received from other employment are set off against these
benefits. Does not include cost for short-term disability
benefit, which is self-funded by the Company.
|
|
(7)
|
|
Each Named Executive Officer has a
change in control agreement. Each agreement is a double
trigger agreement, meaning the officer would only receive
benefits under the agreement if his or her employment were to be
terminated by the Company without cause, or by the officer for
good reason, following a change in control of the Company. Each
change in control agreement covers cash severance payments and
health and other insurance benefit continuation, but the change
in control agreements do not address the vesting of restricted
stock awards, performance share awards, or stock option awards.
The vesting of those awards is addressed in the awards
themselves and in the terms of the plan under which the awards
were made.
|
|
(8)
|
|
Represents the sum of the
following: (i) two times the sum of the Named Executive
Officers base salary and target bonus, and (ii) a
pro-rata performance bonus for the year of termination, which
for this table is assumed to be the target bonus amount. Target
bonus amounts are based on a percentage of each Named Executive
Officers base salary, as follows: Mr. Griffiths, 100%
of base salary; Mrs. Knight 80% of base salary; and
Mr. Scholten 50% of base salary.
|
|
(9)
|
|
There is no explicit change in
control provision for the Performance Share Awards granted to
the Named Executive Officers on January 6, 2006,
February 13, 2007 and February 18, 2008, however, the
Compensation Committee has discretionary authority to vest all
or a portion of these shares upon a change of control. The
performance shares awarded to the Named Executive Officers on
February 13, 2007 and February 18, 2008 have been
excluded from these change in control amounts. If these shares
were included in the change in control amounts, based on the
NYSE closing price on January 2, 2009 of $0.63, it would
have added the following additional amounts to these totals: For
Mr. Griffiths, an additional $189,000
(300,000 shares); for Mrs. Knight, an additional
$63,000 (100,000 shares); for Mr. Scholten an
additional $18,900 (30,000 shares); and for
Mr. Hevelhorst an additional $22,050 (35,000 shares).
|
|
(10)
|
|
Represents the immediate early
vesting of the following stock awards:
(i) 30,228 shares from the performance share award
dated January 6, 2006, which vested on February 20,
2009; and (ii) 15,000 shares from the restricted stock
award dated February 18, 2008, which vested on
February 18, 2009.
|
|
(11)
|
|
Health and other insurance benefits
for 24 months, based on the Companys average cost.
Does not include cost for short-term disability benefit, which
is self-funded by the Company.
|
|
(12)
|
|
Although Mr. Griffiths is
eligible for a
gross-up
of
excise taxes imposed on parachute payments upon a change in
control, the payments that would have been made if a change in
control had occurred on January 3, 2009 would not have
exceeded the allowable limits imposed by the IRS in
Section 280G and therefore no such
gross-up
would have been required.
|
46
|
|
|
(13)
|
|
Represents the immediate early
vesting of the following stock awards: (i) the final
9,000 shares of the 45,000 share restricted stock
award dated November 22, 2004, which are scheduled to vest
on November 22, 2009; and (ii) 10,922 shares from
the performance share award dated January 6, 2006, which
vested on February 20, 2009.
|
|
(14)
|
|
Represents the sum of the
following: (i) one and half times the sum of the base
salary and target bonus, and (ii) a pro-rata performance
bonus for the year of termination, which for this table is
assumed to be the target bonus amount. Target bonus amounts are
based on a percentage of each Named Executive Officers
base salary and for Mr. Hevelhorst is 50% of base salary.
|
|
(15)
|
|
Represents the immediate early
vesting of the 4,122 shares from the performance share
award dated January 6, 2006, which vested on
February 20, 2009.
|
|
(16)
|
|
Health and other insurance benefits
for 18 months, based on the Companys average cost.
Does not include cost for short-term disability benefit, which
is self-funded by the Company.
|
47
Share Ownership
Principal
Shareholders
The following table provides information about any person known
by management to have been a beneficial owner of more than 5% of
the Companys Common Stock as of January 3, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Beneficial
|
|
|
Percent of
|
Name and Address of Beneficial
Owner
|
|
|
Ownership
|
|
|
Class
|
Wells
Fargo & Company
420 Montgomery Street
San Francisco, CA 94163
|
|
|
|
15,030,632(1
|
)
|
|
|
|
19.32%
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia Wanger Asset Management, L.P.
227 West Monroe Street
Suite 3000
Chicago, IL 60606
|
|
|
|
8,310,000(2
|
)
|
|
|
|
10.68%
|
|
First Pacific Advisors, LLC
11400 West Olympic Boulevard
Suite 1200
Los Angeles, CA 90064
|
|
|
|
7,602,100(3
|
)
|
|
|
|
9.77%
|
|
Barclays Global Investors, NA
400 Howard Street
San Francisco, CA 94105
|
|
|
|
5,059,392(4
|
)
|
|
|
|
6.50%
|
|
GAMCO Investors, Inc.
One Corporate Center
Rye, New York 10580
|
|
|
|
4,821,750(5
|
)
|
|
|
|
6.20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Information regarding Wells
Fargo & Company and its affiliates (Wells
Fargo) is based solely upon a Schedule 13G/A filed
with the SEC on February 2, 2009. Wells Fargo has sole
voting power over 14,828,634 shares of Common Stock.
|
|
(2)
|
|
Information regarding Columbia
Wanger Asset Management, L.P. (Columbia Wanger) is
based solely upon a Form 13F filed with the SEC on
February 5, 2009. Columbia Wanger has the sole voting power
of all 8,310,000 shares of Common Stock.
|
|
(3)
|
|
Information regarding First Pacific
Advisors, LLC and its affiliates (First Pacific) is
based solely upon a Schedule 13G filed with the SEC on
February 11, 2009. First Pacific has sole voting power over
4,451,600 shares and shared voting power over
2,239,400 shares of Common Stock.
|
|
(4)
|
|
Information regarding Barclays
Global Investors, NA and its affiliates (Barclays)
is based solely upon a Schedule 13G filed with the SEC on
February 5, 2009. Barclays has sole voting power over
3,746,502 shares of Common Stock.
|
|
(5)
|
|
Information regarding GAMCO
Investors, Inc. (GAMCO) is based solely upon a
Schedule 13F-HR/A
filed with the SEC on February 13, 2009. GAMCO has sole
voting power over 4,692,250 shares of Common Stock.
|
48
Management
The following table provides information about the beneficial
ownership of Company Common Stock by Directors and Named
Executive Officers as of March 10, 2009, as well as
additional rights to other shares of Company Common Stock held
by executive officers. Except as otherwise indicated, each owner
has sole voting and investment powers with respect to the Common
Stock listed.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
Percent of Class
|
Name
|
|
|
Beneficially Owned (1)
|
|
|
Beneficially Owned
|
Robert W. Anestis
|
|
|
|
225,900
|
|
|
|
|
0.29
|
%
|
Eric S. Belsky
|
|
|
|
52,371
|
|
|
|
|
0.07
|
%
|
William C. Griffiths
|
|
|
|
345,390
|
|
|
|
|
0.44
|
%
|
Richard P. Hevelhorst
|
|
|
|
23,254
|
|
|
|
|
0.03
|
%
|
Selwyn Isakow
|
|
|
|
298,370
|
(2)
|
|
|
|
0.38
|
%
|
Brian D. Jellison
|
|
|
|
249,142
|
|
|
|
|
0.32
|
%
|
Phyllis A. Knight
|
|
|
|
383,946
|
|
|
|
|
0.50
|
%
|
G. Michael Lynch
|
|
|
|
36,851
|
|
|
|
|
0.05
|
%
|
Thomas A. Madden
|
|
|
|
174,155
|
|
|
|
|
0.22
|
%
|
Jeffrey L. Nugent
|
|
|
|
69,977
|
(3)
|
|
|
|
0.09
|
%
|
Shirley D. Peterson
|
|
|
|
53,456
|
(4)
|
|
|
|
0.07
|
%
|
Roger K. Scholten
|
|
|
|
15,000
|
|
|
|
|
0.02
|
%
|
All Directors and Executive Officers as a Group (12 persons)
|
|
|
|
1,927,812
|
|
|
|
|
2.48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The number of shares beneficially
owned includes unvested restricted stock awards of Company
Common Stock shares under the 1995 Stock Option and Incentive
Plan, as follows: Mrs. Knight 9,000. The number of shares
beneficially owned also includes unvested restricted stock
awards under the 2005 Equity Compensation and Incentive Plan, as
follows: Mr. Anestis 3,500; Mr. Belsky 4,025;
Mr. Isakow 3,500; Mr. Jellison 3,500; Mr. Lynch
3,500; Mr. Madden 4,025; and Mrs. Peterson 4,025.
These individuals do not have investment power over these
restricted shares. Amounts shown in the table also include the
following number of shares which the person specified may
acquire by exercising options which may be exercised within
60 days of March 10, 2009: Mr. Anestis 65,600;
Mr. Belsky 24,196; Mr. Griffiths 100,000;
Mr. Isakow 83,200; Mr. Jellison 64,000; and all
Directors and executive officers as a group 336,996.
|
|
(2)
|
|
Does not include 1,860 shares
held by Mr. Isakows children. Mr. Isakow
disclaims beneficial ownership of these shares.
|
|
(3)
|
|
As of December 26, 2008, one
of the Named Executive Officers, Mr. Jeffrey L. Nugent, was
no longer with the Company.
|
|
(4)
|
|
Does not include 20,000 shares
held by Mrs. Petersons spouse. Mrs. Peterson
disclaims beneficial ownership of these shares.
|
49
Other Information
|
|
|
Independent
Auditors:
|
|
Ernst & Young LLP has served as our independent
auditor since June 2006. It is anticipated that a representative
of Ernst & Young LLP will be present at the Annual
Meeting, and will have an opportunity to make a statement and
respond to appropriate questions.
|
|
|
|
Fees
.
Set forth below are the
aggregate fees billed by Ernst & Young LLP for the
years ended January 3, 2009 and December 29, 2007:
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
Audit Fees
|
|
$
|
1,189,000
|
|
|
$
|
1,281,000
|
|
Audit-Related Fees
|
|
$
|
27,000
|
|
|
$
|
206,000
|
|
Tax Fees
|
|
$
|
2,000
|
|
|
$
|
101,000
|
|
All Other Fees
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
Audit Fees
. Audit fees are generally for
professional services rendered in connection with the integrated
audit of the Companys consolidated financial statements
and internal controls over financial reporting, limited reviews
of the Companys unaudited condensed consolidated interim
financial statements included in Form10-Q, and audits of
acquired businesses. Audit fees for 2008 were primarily for the
2008 annual integrated audit and quarterly reviews. Audit fees
for 2007 were primarily for the 2007 annual integrated audit,
quarterly reviews and accounting consultations and a comfort
letter related to the Companys 2007 Convertible Debt
offering.
|
|
|
|
Audit-Related Fees
. Audit related fees for
2008 and 2007 were for due diligence projects related to
acquisitions.
|
|
|
|
Tax Fees
. Tax fees in 2007 were for a review
of the 2006 federal income tax return and various consultations.
|
50
|
|
|
|
|
Party Transaction may be consistent with the best interests of
the Company and its shareholders.
|
|
|
|
The policy requires that all Related Party Transactions must be
submitted to the Nominating Committee for review and approval,
ratification or disapproval. In determining whether to approve
or disapprove a Related Party Transaction, the Nominating
Committee will take into account, among other factors it deems
appropriate, whether the Related Party Transaction is on terms
generally available to an unaffiliated third-party under similar
circumstances. The Nominating Committee will also take into
account the extent of the Related Partys interest in the
transaction and whether the transaction is in the best interests
of the Company and its shareholders. The Chairperson of the
Nominating Committee may approve or ratify a Related Party
Transaction between Committee meetings.
|
|
|
|
For this section, a Related Party is: (1) any
executive officer or director of the Company, (2) any
nominee for election as a director, (3) any greater than
5 percent beneficial owner of the Companys Common
Stock, (4) any immediate family member of any of the
foregoing, or (5) any entity which is owned or controlled
by any of the persons listed in (1), (2), (3) or
(4) above.
|
|
|
|
A Related Party Transaction is any transaction,
arrangement or relationship (or series of transactions,
arrangements or relationships) in which the Company or its
subsidiaries was, is, or will be a participant, and in which any
Related Party had, has or will have a direct or indirect
interest.
|
|
|
|
The Company had no Related Party Transactions in 2008.
|
|
Compensation Committee
Interlocks and Insider
Participation:
|
|
The members of our Compensation Committee for 2008 were
Dr. Eric S. Belsky, Mr. Robert W. Anestis and
Mrs. Shirley D Peterson. No member of our Compensation
Committee was at any time during fiscal year 2008 one of our
officers or employees, or one of our former officers. No member
of our Compensation Committee had any relationship requiring
disclosure under Item 404 and Item 407(e)(4) of
Regulation S-K.
Additionally, during 2008, none of our executive officers or
directors was a member of the board of directors, or any
committee of the board of directors, of any other entity such
that the relationship would be construed to constitute a
committee interlock within the meaning of the rules and
regulations of the Securities and Exchange Commission.
|
|
Section 16(a) Beneficial
Ownership Reporting
Compliance:
|
|
Section 16(a) of the Securities Exchange Act of 1934
requires the Companys executive officers and Directors,
and persons who own more than ten percent of a registered class
of the Companys equity securities, to file reports of
ownership and changes in ownership with the SEC. Officers,
Directors and greater than ten percent shareholders are required
by regulations of the SEC to furnish the Company copies of all
section 16(a) forms they file.
|
|
|
|
Based solely on its review of the copies of such forms received
by it, or written representations from certain reporting persons
that no Forms 5 were required for those persons, the
Company believes that, during the fiscal year ended
January 3, 2009, all of its officers, directors and greater
than 10% shareholders complied with all filing requirements
|
51
|
|
|
|
|
applicable to such persons with the exception of Jeffrey L.
Nugent, who failed to file timely a Form 4 related to a
transaction on February 28, 2008. Mr. Nugents
Form concerning such transaction was subsequently filed with the
SEC on March 10, 2008.
|
|
Other
Matters:
|
|
At the date of this Proxy Statement, management is not aware of
any matters to be presented for action at the Annual Meeting
other than those described in this Proxy Statement. However, if
any other matters should come before the meeting, the persons
named in the Proxy Card intend to vote the Proxy in accordance
with their judgment on such matters.
|
|
Cautionary Statement Regarding
Forward-Looking
Statements:
|
|
This Proxy Statement includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are identified by terms
and phrases such as anticipate, believe,
intend, estimate, expect,
continue, should, could,
may, plan, project,
predict, will and similar expressions
and include references to assumptions and relate to our future
prospects, developments and business strategies. Such statements
reflect the current views and assumptions of the Company, and
are subject to various risks and uncertainties that could cause
actual results to differ materially from expectations. These
risks include, but are not limited to, risks relating to the
volatility of our stock price and general market and economic
conditions.
|
|
|
|
We undertake no obligation to update or revise the
forward-looking statements included in this proxy statement,
whether as a result of new information, future events or
otherwise, after the date of this Proxy Statement. Our actual
results, performance or achievements could differ materially
from the results expressed in, or implied by, these
forward-looking statements. Factors that could cause or
contribute to such differences are discussed in the sections
entitled Risk Factors and Managements
Discussion and Analysis of Financial Condition and Results of
Operations included in our Annual Report on
Form 10-K
for the fiscal year ended January 3, 2009, which we filed
with the SEC on February 19, 2009. These documents are
available on the SECs website at
www.sec.gov
.
|
|
|
|
By Order of the Board of Directors
|
|
|
|
Roger K. Scholten
|
|
|
Secretary
|
|
|
March 20, 2009
|
52
*** Exercise Your
Right
to Vote ***
IMPORTANT NOTICE
Regarding the Availability of Proxy Materials
CHAMPION ENTERPRISES, INC.
CHAMPION ENTERPRISES, INC.
755 W. BIG BEAVER RD.
SUITE 1000
TROY, MI 48084
Meeting Information
|
|
|
|
Meeting Type:
|
|
Annual
|
|
For holders as of:
|
|
3/10/09
|
|
Date:
|
|
5/6/09
|
|
Time:
|
|
8:30 A.M.
|
|
Location:
|
|
Corporate Headquarters
755 W Big Beaver Rd, Suite 1000
Troy, MI 48084
|
You are receiving this communication because you hold shares in the company named above.
This is not a ballot. You cannot use this notice to vote these shares. This communication presents
only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online or easily request a paper copy (see reverse side).
We encourage you to access and review all of the important information contained in the proxy
materials before voting.
See the reverse side of this notice to obtain proxy materials and voting instructions.
Before You Vote
How to Access the Proxy Materials
Proxy Materials Available to VIEW or RECEIVE:
NOTICE AND PROXY STATEMENT
ANNUAL REPORT 10-K
How to View Online:
Have the 12-Digit Control Number available (located on the following page) and visit:
www.proxyvote.com
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How to Request and Receive a PAPER or E-MAIL Copy:
If you want to receive a paper or e-mail copy of these documents, you must request one. There is
NO charge for requesting a copy. Please choose one of the following methods to make your request:
|
|
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1)
BY INTERNET
:
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www.proxyvote.com
|
2)
BY TELEPHONE
:
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1-800-579-1639
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3)
BY E-MAIL*
:
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sendmaterial@proxyvote.com
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If requesting materials by e-mail, please send a blank e-mail with the 12-Digit Control
Number (located on the following page) in the subject line.
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Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to
your investment advisor. To facilitate timely delivery, please make the request as instructed
above on or before 4/22/09.
How To Vote
Please Choose One of The Following Voting Methods
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Many shareholder meetings have attendance requirements including, but not limited
to, the possession of an attendance ticket issued by the entity holding the meeting. Please check
the meeting materials for any special requirements for meeting attendance. At the meeting, you
will need to request a ballot to vote these shares.
Vote By Internet:
To vote now by Internet, go to
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. Have the 12-Digit
Control Number available and follow the instructions.
Vote By Mail:
You can vote by mail by requesting a paper copy of the materials, which will include
a proxy card.
|
|
|
|
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|
Voting Items
|
|
|
|
|
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|
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|
|
|
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
|
THE ELECTION OF ALL NOMINATED DIRECTORS.
|
|
|
|
1.
|
|
Election of Directors:
|
|
|
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NOMINEES:
|
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01
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)
|
|
Robert W. Anestis
|
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05
|
)
|
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G. Michael Lynch
|
|
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|
02
|
)
|
|
Eric S. Belsky
|
|
|
06
|
)
|
|
Thomas A. Madden
|
|
|
|
03
|
)
|
|
William C. Griffiths
|
|
|
07
|
)
|
|
Shirley D. Peterson
|
|
|
|
04
|
)
|
|
Selwyn Isakow
|
|
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|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE RATIFICATION OF THE COMPANYS INDEPENDENT AUDITORS.
|
|
|
2.
|
|
Ratification of the Companys
independent auditors.
The Companys Audit Committee has selected Ernst & Young to serve as independent auditor to the Company.
|
|
|
|
|
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|
3.
|
|
In their discretion upon the transaction of such other business as may properly come before the meeting.
|
|
|
|
CHAMPION ENTERPRISES, INC.
755 W. BIG BEAVER RD.
SUITE 1000
TROY, MI 48084
|
|
VOTE BY INTERNET
www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery
of information up until 11:59 P.M. Eastern Time the
day before the cut-off date
or meeting date. Have your proxy card in hand when you access the web site
and follow the instructions to obtain your records and to create an electronic
voting instruction form.
|
|
|
|
|
|
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs
incurred by our company in mailing proxy
materials, you can consent to receiving
all future proxy statements, proxy cards
and annual reports electronically via
e-mail or the Internet. To sign up for
electronic delivery, please follow the
instructions above to vote using the
Internet and, when prompted, indicate
that you agree to receive or access
proxy materials electronically in future
years.
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VOTE BY PHONE 1-800-690-6903
Use any touch-tone telephone to transmit
your voting instructions up until 11:59
P.M. Eastern Time the day before the
cut-off date or meeting date. Have your
proxy card in hand when you call and
then follow the instructions.
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|
|
VOTE BY MAIL
Mark, sign and date your proxy card and
return it in the postage-paid envelope
we have provided or return it to Vote
Processing, c/o Broadridge, 51 Mercedes
Way, Edgewood, NY 11717.
|
|
|
|
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|
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
|
CHAMP1
|
|
KEEP THIS PORTION FOR YOUR RECORDS
|
|
|
|
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|
DETACH AND RETURN THIS PORTION ONLY
|
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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CHAMPION ENTERPRISES, INC.
|
|
For
|
|
Withhold
|
|
For All
|
|
To withhold authority to vote for any individual
|
|
|
|
|
All
|
|
All
|
|
Except
|
|
nominee(s), mark For All Except and write the
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Vote on Directors
|
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number(s) of the nominee(s) on the line below.
|
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
|
|
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|
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|
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|
|
|
|
THE ELECTION OF ALL NOMINATED DIRECTORS.
|
|
o
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|
o
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|
o
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NOMINEES:
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01) Robert W. Anestis
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05) G. Michael Lynch
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02) Eric S. Belsky
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06) Thomas A. Madden
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03) William C. Griffiths
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07) Shirley D. Peterson
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04) Selwyn Isakow
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Vote on Auditors
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
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THE RATIFICATION OF THE COMPANYS INDEPENDENT AUDITORS.
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For
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Against
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Abstain
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2.
Ratification of the Companys independent auditors.
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o
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o
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The Companys Audit Committee has selected Ernst & Young to serve as independent auditor to the Company.
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3.
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In their discretion upon the transaction of such other business as may properly come before the meeting.
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For address changes and/or comments, please check
this box and write them on the back where indicated.
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o
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Please indicate if you plan to attend this meeting.
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o
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o
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Yes
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No
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NOTE:
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Please sign exactly as your name or names appear(s) 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.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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Dear Shareholder:
The reverse side of this proxy card contains instructions on how to vote these
shares over the Internet or by telephone for the election of directors, ratification
of auditors and for all other matters that may properly come before the meeting.
Please consider voting using one of these options. Your vote is recorded as if you
mailed in your proxy card.
Under revised SEC rules, shareholders will receive mail notice when our Proxy
Statements and Annual Reports are available electronically, at which time shareholders
may view these materials (and vote) by visiting the website:
www.proxyvote.com. The Company will not send hard copies of the Proxy
Statement or Annual Report unless specifically requested by a shareholder.
Receiving your proxy material electronically and voting by the Internet saves the
company money, and we encourage you to do so.
Thank you for your attention to these matters.
Champion Enterprises, Inc.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement, Annual Report and 10-K are available at
www.proxyvote.com.
Please detach along perforated line and mail in the envelope provided IF you are not voting
via telephone or the Internet.
CHAMPION ENTERPRISES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
CHAMPION ENTERPRISES, INC.
The undersigned hereby appoints Selwyn Isakow and William C. Griffiths, or either of them,
attorneys and proxies with power of substitution, to vote all of the Common Stock of the
undersigned in Champion Enterprises, Inc. at the Annual Meeting of Shareholders to be held on
Wednesday, May 6, 2009 and at any adjournments thereof, as specified on the reverse side of this
proxy.
The undersigned acknowledges receipt of the Proxy Statement dated March 20, 2009 and the Annual
Report to Shareholders, which includes the Annual Report on Form 10-K, for the fiscal year ended
January 3, 2009, ratifies everything that the proxies (or either of them or their substitutes) may
lawfully do or cause to be done under this proxy, and revokes all former proxies.
If you are a participant in the Champion Enterprises, Inc. Savings Plan, this proxy card will
serve as a direction to the trustee under the plan as to how the shares held for the account in
the plan are to be voted.
If you sign this proxy without marking any boxes, this proxy will be voted FOR all nominees, FOR
the ratification of Ernst & Young to serve as independent auditor to the Company, and in the
discretion of the Proxies on any other matters that may properly come before the meeting.
Address Changes/Comments:
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse
side.)
(To be signed on Reverse Side)
Champion Enterprises (NYSE:CHB)
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