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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 ý | ||
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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)) |
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Definitive Proxy Statement |
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Soliciting Material under §240.14a-12 |
GLOBAL POWER EQUIPMENT GROUP INC. | ||||
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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GLOBAL POWER EQUIPMENT GROUP INC.
400 East Las Colinas Boulevard, Suite 400
Irving, Texas 75039
Dear Stockholder of Global Power Equipment Group Inc.:
You are cordially invited to attend the Annual Meeting of Stockholders of Global Power Equipment Group Inc. (the "Company," "us" or "our"). The meeting will be held on Thursday, May 1, 2014 beginning at 9:00 a.m. local time, at the offices of the Company located at 400 East Las Colinas Boulevard, Irving, Texas, 75039.
Information about the meeting, nominees for election as directors and our other proposals are presented in the following Notice of Annual Meeting of Stockholders and proxy statement. At the meeting, management will make a presentation followed by a question and answer period.
The Company is pleased to announce that we are taking advantage of the Securities and Exchange Commission's "notice and access" proxy rule, which allows companies to furnish proxy materials via the Internet as an alternative to the traditional approach of mailing a printed set to each stockholder. We believe this will allow us to continue to provide stockholders with the proxy materials they need while reducing printing and postage costs associated with delivery and reducing the environmental impact of the annual meeting. In accordance with these rules, we have sent a Notice of Internet Availability of Proxy Materials to all stockholders. The Notice of Internet Availability of Proxy Materials contains instructions on how to access our proxy statement and annual report to stockholders, as well as how to vote either online or in person at the annual meeting.
It is important that your shares are represented at the annual meeting. Accordingly, please vote as soon as possible. I express our appreciation for your continued interest in the affairs of the Company. We look forward to your participation in the annual meeting.
/s/ LUIS MANUEL RAMÍREZ Luis Manuel Ramírez President and Chief Executive Officer |
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Irving, Texas March 20, 2014 |
GLOBAL POWER EQUIPMENT GROUP INC.
400 East Las Colinas Boulevard, Suite 400
Irving, Texas 75039
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 1, 2014
The Annual Meeting of Stockholders (the "Annual Meeting") of Global Power Equipment Group Inc. (the "Company," "us" or "our") will be held on Thursday, May 1, 2014 at the offices of the Company located at 400 East Las Colinas Boulevard, Irving, Texas, 75039 at 9:00 a.m. local time for the following purposes:
Only stockholders of record at the close of business on March 6, 2014 are entitled to notice of, and to vote at, the Annual Meeting and at any adjournments or postponements thereof. A list of such stockholders will be available for inspection at the Company's headquarters located at 400 East Las Colinas Boulevard, Suite 400, Irving, Texas 75039, during ordinary business hours, for ten days prior to the Annual Meeting.
Important Notice Regarding the Availability of Proxy Materials for the 2014 Annual Meeting of Stockholders to be held on May 1, 2014. This year, instead of mailing a printed copy of our proxy materials, including the Company's Annual Report to Stockholders for the year ended December 31, 2013, to each stockholder of record, we have decided to provide access to these materials via the Internet. This reduces the amount of paper necessary to produce these materials, as well as the costs associated with mailing these materials to all stockholders. Accordingly, on March 20, 2014, we began mailing a Notice of Internet Availability of Proxy Materials (the "Notice") to all stockholders of record as of March 6, 2014, and posted our proxy materials on the website referenced in the Notice (http://materials.proxyvote.com/37941P). As more fully described in the Notice, all stockholders may choose to access our proxy materials on the website referred to in the Notice or may request a printed set of our proxy materials. In addition, the Notice and website provide information regarding how you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.
If you received a printed copy of the materials, we have enclosed a copy of the Company's Annual Report to Stockholders for the year ended December 31, 2013 with this notice and proxy statement.
To make it easier for you to vote, Internet voting is available. The instructions on the Notice describe how to use this service. Of course, if you prefer, you can vote by telephone or by mail by requesting a printed copy of the proxy materials and following the instructions on the proxy card to vote by telephone, or completing your proxy card and returning it in the accompanying envelope. No postage is required if your proxy card is mailed in the United States. If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card. We urge you to vote your proxy promptly by Internet, telephone or mail, whether or not you plan to attend the Annual Meeting in
person. If you do attend the Annual Meeting in person, you may withdraw your proxy and vote personally on all matters brought before the Annual Meeting.
Your vote is very important. Whether or not you plan to attend the Annual Meeting, please vote via the Internet by following the instructions on the Notice or, if you received a printed set of materials by mail, vote by telephone by following the instructions on your proxy card or complete and return your proxy card. Returning a proxy card or otherwise submitting your proxy does not deprive you of your right to attend the Annual Meeting and vote in person. Proxies are being solicited on behalf of the Board of Directors.
BY ORDER OF THE BOARD OF DIRECTORS, | ||
/s/ TRACY D. PAGLIARA Tracy D. Pagliara Chief Administrative Officer, General Counsel and Secretary |
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Irving, Texas March 20, 2014 |
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GLOBAL POWER EQUIPMENT GROUP INC.
400 East Las Colinas Boulevard, Suite 400
Irving, Texas 75039
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 1, 2014
These proxy materials are furnished in connection with the solicitation of proxies by the Board of Directors (the "Board of Directors" or the "Board") of Global Power Equipment Group Inc., a Delaware corporation (the "Company," "us" or "our"), for the Annual Meeting of Stockholders (the "Annual Meeting") to be held on Thursday, May 1, 2014 at the offices of the Company located at 400 East Las Colinas Boulevard, Irving, Texas, 75039 at 9:00 a.m. local time, and at any adjournments or postponements of the Annual Meeting. This proxy statement is first being made available to stockholders on or about March 20, 2014. For directions to the meeting, please call 1-214-574-2700.
The specific proposals to be considered and acted upon at the Annual Meeting are summarized in the accompanying Notice of Annual Meeting of Stockholders. Each proposal is described in more detail in this proxy statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Only holders of our common stock ("Common Stock") are entitled to vote at the Annual Meeting. At the close of business on March 6, 2014, the record date for determining the holders of Common Stock entitled to vote at the Annual Meeting (the "Record Date"), there were 17,063,000 shares of Common Stock outstanding. Each holder of a share of Common Stock is entitled to one vote per share. All votes will be tabulated by the inspector of elections appointed for the meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes.
Quorum Required
Our bylaws provide that the holders of a majority of the votes represented by the Common Stock issued and outstanding, and entitled to vote at the Annual Meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining the presence of a quorum.
Voting of Shares
Whether you plan to attend the Annual Meeting or not, we urge you to vote by proxy. All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card or as instructed via Internet or telephone. You may specify whether your shares should be voted for or withhold for each of the nominees for
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director, and whether your shares should be voted for, against or abstain with respect to each of the other proposals. Voting by proxy will not affect your right to attend the Annual Meeting.
If your shares are registered directly in your name through our stock transfer agent, Computershare, or you have stock certificates, you may vote:
If your shares are held in "street name" (held in the name of a bank, broker or other nominee), you must provide the bank, broker or other nominee with instructions on how to vote your shares. If you received a printed version of these proxy materials, you should have received a voting instruction form from your broker or nominee that holds your shares. For shares held in street name, follow the instructions contained in the Notice or voting instruction form to vote by Internet, telephone or mail. If you want to vote by mail but have not received a printed version of these proxy materials, you may request a full packet of proxy materials as instructed by the Notice. If you want to vote your shares in person at the Annual Meeting, contact the bank, broker or other nominee who holds your shares to obtain a broker's proxy card and bring it with you to the Annual Meeting. You will not be able to attend the Annual Meeting unless you have a proxy card from your broker. You should contact your broker or nominee or refer to the instructions provided by your broker or nominee for further information.
If your shares are registered in your name or if you have stock certificates, they will not be voted if you do not vote by Internet or telephone, return your proxy card or vote at the Annual Meeting as described above, but, if you properly submit your proxy card without giving specific voting instructions, your shares will be voted in accordance with the Board's recommendations as specified below. The Company knows of no other matters to be presented at the Annual Meeting. However, if any other matters are properly presented, the proxy holders will be authorized to vote the shares represented by proxies according to their best judgment. Proxies will extend to, and be voted at, any adjournment or postponement of the Annual Meeting. You may revoke or change your proxy at any time before the Annual Meeting. To do this, send a written notice of revocation or another signed proxy with a later date to the Secretary of the Company at our principal executive office before the beginning of the Annual Meeting. You may also automatically revoke your proxy by attending the Annual Meeting and voting in person. All shares represented by a valid proxy received prior to the Annual Meeting will be voted.
If your shares are held in street name and you do not provide voting instructions to the bank, broker or other nominee that holds your shares as described above, the bank, broker or other nominee has the authority, even if it does not receive instructions from you, to vote your unvoted shares for Proposal 2, the ratification of our independent registered public accounting firm, but does not have authority to vote your unvoted shares for Proposal 1, the election of nominees to the Board or Proposal 3, the advisory vote on compensation of our named executive officers. If your broker cannot vote your shares on a particular matter because it has not received instructions from you and does not have discretionary voting authority on that matter or because your broker chooses not to vote on a matter for which it does have discretionary voting authority, this is referred to as a "broker non-vote." Please note that if your shares are held of record by a broker, bank or other nominee and if you
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provide instructions to that nominee on a form received from the nominee, you may revoke or change your voting instructions only by contacting the nominee who holds your shares. You may not vote in person at the Annual Meeting unless you obtain a legal proxy from the broker, bank or other nominee. In such event, your attendance at the Annual Meeting will not, by itself, revoke prior voting instructions.
Solicitation of Proxies
We will pay all of the costs of soliciting these proxies. Our employees may, without additional compensation, solicit proxies by mail, e-mail, facsimile, in person or by telephone or other forms of telecommunication. If your shares are held in "street name" (held in the name of a bank, broker or other nominee) and you have requested printed versions of these materials, we have requested that your bank, broker or other nominee forward this proxy statement to you and obtain your voting instructions. The Company may reimburse these persons for their expenses in so doing. Proxies are solicited to give all record holders of Common Stock an opportunity to vote on the matters to be presented at the Annual Meeting, even if they cannot attend the meeting.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
Six directors are being nominated for re-election to the Board of Directors by the holders of our Common Stock (the "Nominees"). These directors are Luis Manuel Ramírez, Charles Macaluso, Carl Bartoli, Terence J. Cryan, Michael E. Salvati and Frank E. Williams, Jr. In the event any Nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee designated by our present Board of Directors to fill the vacancy. As of the date of this proxy statement, the Board of Directors is not aware of any Nominee who is unable or will decline to serve as a director.
Our bylaws provide that the size of the Board shall be fixed by the directors, with a minimum of two directors. The Board's size is currently fixed at seven directors. All directors are elected annually. As previously disclosed, Eugene I. Davis, a current member of the Board of Directors, informed the Board that he will not stand for re-election at the Annual Meeting when his term expires. Therefore, effective upon election of the Board at the Annual Meeting, Mr. Davis will no longer be a member of the Board of Directors or any committee thereof. At such time, the Board has determined that the size of the Board will decrease to six to eliminate the vacancy.
Nominees for Directors
Set forth below are the name, age, position of and biographical information about each Nominee, as of the date of this proxy statement.
Nominees
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Age | Position(s) and Office(s) Held with the Company | |||
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Luis Manuel Ramírez |
47 | President, Chief Executive Officer and Director | |||
Charles Macaluso |
70 | Chairman of the Board and Director | |||
Carl Bartoli |
75 | Director | |||
Terence J. Cryan |
51 | Director | |||
Michael E. Salvati |
61 | Director | |||
Frank E. Williams, Jr. |
79 | Director |
Luis Manuel Ramírez has served as our President, Chief Executive Officer and Director since July 1, 2012.
Mr. Ramírez previously served 12 years with General Electric ("GE"), most recently as Chief Executive Officer of GE Energy Industrial Solutions, a more than $3 billion global electrical products and services business operating in over 60 countries. In 2012, he was named one of the Top 100 Movers and Shakers of the Smart Grid by Greentechmedia.com, and has also held a variety of leadership roles in industry associations. Prior to his employment with GE, Mr. Ramírez worked for more than a decade in a number of technology, financial and business roles with Siemens. Mr. Ramírez is also a member of the National Association of Corporate Directors.
Mr. Ramírez received his Bachelor's degree in Computer Information Systems, with a minor in Business Administration, from DeVry Institute of Technology, Atlanta, GA, and participated in the Executive Advanced Management Certificate Program at Duke University, Durham, NC.
Director Qualifications. Mr. Ramírez has comprehensive knowledge of the power generation and energy industry. He brings with him a career of experience and understanding in the businesses in which we engage. In addition to his breadth of knowledge in the industry, Mr. Ramírez also has significant executive management experience. Prior to joining us, Mr. Ramírez served as the Chief Executive Officer of GE Energy Industrial Solutions.
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Charles Macaluso has served as Chairman of our Board of Directors since January 2008. Since 1998, Mr. Macaluso has been a principal of Dorchester Capital LLC, a management consulting and corporate advisory service firm focusing on operational assessment, strategic planning and workouts.
Mr. Macaluso currently serves as a director of the following public companies: Darling International Inc., where he serves as chairman of its nominating and corporate governance committee, and Pilgrim's Pride Corporation, where he serves on the audit committee. During the past five years, Mr. Macaluso also served as a director of Elder-Beerman Stores Corp, FLAG Telecom Group Limited and Global Crossing Limited. Mr. Macaluso is also a member of the National Association of Corporate Directors.
Director Qualifications. Mr. Macaluso has had a career focused on operational assessment, strategic planning, crisis management and turnaround advisory services, most recently with Dorchester Capital LLC. Dorchester Capital also has a significant commitment to representing the interests of investor groups as a member of the boards of directors at a diverse array of companies, and Mr. Macaluso brings with him a strong commitment to stockholders' interests. He also has extensive executive and financial expertise. In addition, Mr. Macaluso brings significant board expertise, including service as Chairman on a number of public and private company boards and committees.
Carl Bartoli has served as our Director since January 2008. Mr. Bartoli previously served as President and Chief Executive Officer of Foster Wheeler USA Corporation and Executive Vice President of Foster Wheeler International Corporation for 13 years. As President and Chief Executive Officer of Foster Wheeler USA Corporation, he was responsible for the Process Plant Division, the Fire Heater Division, Foster Wheeler Constructors Corporation and Foster Wheeler Environmental Corporation. This followed a career in project and construction management at ABB Lummus Global (now CB&I/Lummus) and M.W. Kellogg Company (now KBR, Inc.) covering virtually all facets of the engineering, procurement, and construction of power generation, process, pharmaceutical and infrastructure facilities.
Since his retirement from Foster Wheeler, Mr. Bartoli has established and serves as President of C. Bartoli Consultants, LLC serving the utility and process industry in the development and execution of capital projects. He has also participated in the preparation of strategic plans, organizational restructuring and acquisition due diligence of engineering and construction firms. Mr. Bartoli has been affiliated with the Construction Industry Institute (CII), a research organization serving the engineering and construction industry, as a member of the Board of Advisors and Executive Committee. Mr. Bartoli is also a member of the National Association of Corporate Directors.
Mr. Bartoli holds a Master of Science degree in Mechanical Engineering from Columbia University and a Bachelor of Science degree in Mechanical Engineering from Fairleigh Dickinson University.
Director Qualifications. Mr. Bartoli is an engineering and construction business executive with over 35 years of domestic and international experience in the process and utility industry. His experience covers all facets of the engineering and construction industry, including project management, project development, senior line management and executive P&L positions. Mr. Bartoli has also served on the boards of directors of a number of Foster Wheeler Corporation affiliated companies. Since his retirement from Foster Wheeler and the establishment of C. Bartoli Consultants, LLC, he has participated in many consulting assignments for the power generation, process and energy industries. He is also a consultant leader with the Gerson Lehrman Group in the energy and industrials sector and is an advisor to Anellotech, Inc., a company developing a cellulosic biomass conversion technology for the production of petrochemicals, and Sundrop Fuels, Inc., a gasification-based advanced biofuels company.
Terence J. Cryan has served as our Director since January 2008. Mr. Cryan has over 20 years of international business experience as an investment banker based in both the United States and Europe.
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In 2001, Mr. Cryan co-founded Concert Energy Partners, an investment banking and private equity firm based in New York City, and continues to serve as Managing Director. He also served as President and Chief Executive Officer of Medical Acoustics LLC from 2007 through 2010. Prior to 2001, Mr. Cryan was a Senior Managing Director in the Investment Banking Division at Bear Stearns.
Earlier in his career, Mr. Cryan served as a Managing Director, Energy & Natural Resources Industry Group and member of the Investment Banking Operating Committee at Paine Webber. Mr. Cryan joined Paine Webber following its acquisition of Kidder, Peabody in 1994.
Mr. Cryan has been an adjunct professor at the Metropolitan College of New York Graduate School of Business and serves as a director of a number of international companies, including public companies such as Uranium Resources, Inc. (October 2006 to present) and Ocean Power Technologies Corporation (October 2012 to present). During the past five years, Mr. Cryan also served as a director of The Providence Service Corporation (May 2009 to May 2011) and Gryphon Gold Corporation (August 2009 to December 2012). Mr. Cryan is also a frequent speaker at finance and energy industry gatherings. Mr. Cryan is also a member of the National Association of Corporate Directors.
Mr. Cryan holds a Master of Science in Economics from the London School of Economics and a Bachelor of Arts degree from Tufts University.
Director Qualifications. Mr. Cryan possesses extensive expertise in financings, mergers and acquisitions. He also has a broad energy industry background and executive-level experience. Mr. Cryan has over 20 years of experience in international business as an investment banker in the United States and Europe. As a co-founder of Concert Energy Partners and as former Managing Director, Energy & Natural Resources Industry Group at Paine Webber, Mr. Cryan has in depth knowledge of the energy industry. In addition, Mr. Cryan brings extensive board-level experience, serving on the boards of a number of international companies.
Michael E. Salvati has served as our Director since August 2011. Since December 2000, Mr. Salvati has been President at Oakridge Consulting, Inc., which provides interim management, management consulting and corporate advisory services to companies ranging in size from start-ups to multinational corporations. From February 2004 to May 2004, Mr. Salvati served as Chief Financial Officer of AMI Semiconductor, Inc. From September 1998 to February 2000, Mr. Salvati was Executive Vice PresidentChief Operating Officer of National Financial Partners, Corp. From June 1996 to June 1998, Mr. Salvati was Chief Financial Officer of Culligan Water Technologies, Inc., where he oversaw the completion of nearly 50 acquisitions over a period of 18 months. Mr. Salvati was a partner at KPMG Peat Marwick LLP from 1990 to 1996.
Mr. Salvati is a Certified Public Accountant and member of the American Institute of Certified Public Accountants, Illinois CPA Society. He currently serves as a member of the board of directors and Chair of the Audit Committee and member of the Compensation Committee of Apollo Commercial Real Estate Finance Inc., positions he has held since September 2009. Mr. Salvati's previous board memberships include Things Remembered, Inc., Lazydays, Inc., NCH Nu World Marketing, Ltd., Coho Energy, Inc., Prime Succession, Inc., and Castle Holdco 4, Ltd. Mr. Salvati is also a member of the National Association of Corporate Directors.
Mr. Salvati received a Bachelor of Science degree in Microbiology and a Master of Science degree in Accounting from the University of Illinois at Champaign-Urbana.
Director Qualifications. Mr. Salvati has significant experience in the area of corporate advisory services, with an emphasis on strategic planning, capital structure and mergers and acquisitions. In his prior executive positions he was directly responsible for managing acquisition-led growth within the relevant companies which are skills that we believe bring value to the Company. Mr. Salvati's service on multiple public and private company boards over the last twelve years provides us with valuable insights into many of the issues that we face, and useful perspectives in relation to compensation and
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corporate governance matters. Mr. Salvati, as a former auditor, has significant experience and expertise in finance, controls, accounting and audit matters.
Frank E. Williams, Jr . has served as our Director since October 2009. Since 1969, Mr. Williams has served as Chairman and principal owner of Williams Enterprises of Georgia, Inc., a holding company controlling six subsidiaries active in various facets of the steel industry. Since 1995, he has also served as Chairman, Chief Executive Officer, and a 50 percent owner of Bosworth Steel Erectors, Inc. of Dallas, Texas, an erector of steel products in the Southwestern United States and as Chairman and a major shareholder of Willfab, Inc., a structural steel fabricator located in Cherokee County, Georgia. Mr. Williams is the Managing Partner and principal owner of Industrial Alloy Fabricators, LLC of Richmond, Virginia, a fabricator of alloy plate products for the pulp and chemical industries.
Mr. Williams also previously served on the Board of Directors of Diamondhead Casino Corporation, a public company.
Mr. Williams has served as Chairman and Chief Executive Officer of the Gulf States Steel Reorganization Group. He has been appointed by bankruptcy courts as an official representative serving in a pro bono capacity on behalf of investors and debt holders of public companies in bankruptcy and he represented holders of our equity securities during our bankruptcy in 2007 and 2008. Mr. Williams is also a member of the National Association of Corporate Directors.
Mr. Williams holds a Bachelor of Civil Engineering degree from the Georgia Institute of Technology.
Director Qualifications. Mr. Williams has over 53 years of experience in the steel industry. His in-depth experience and knowledge covers all facets of the steel industry, including steel fabrication and erection and fabrication of alloy plate products for the pulp and chemicals industries. Mr. Williams is the principal owner of Williams Enterprises of Georgia, Inc., a holding company controlling six subsidiaries active in various facets of the steel industry. In addition to his extensive knowledge of our industry, Mr. Williams brings significant public company experience.
Each of Messrs. Ramírez, Macaluso, Bartoli, Cryan, Williams and Salvati was recommended for nomination by the Nominating and Corporate Governance Committee, and was nominated for election by the full Board of Directors. Messrs. Macaluso, Bartoli and Cryan were appointed as our directors by the Bankruptcy Court upon our emergence from bankruptcy in January 2008. The Board appointed Mr. Williams as a director in October 2009. Mr. Salvati was recommended for nomination by a non-management director and was appointed as a director in August 2011. The Board appointed Mr. Ramírez as a director in July 2012 simultaneously with his employment as our President and Chief Executive Officer. All of our directors were re-elected for new one year terms at our Annual Meeting of Stockholders held on May 8, 2013.
Vote Required
The directors will be elected by a plurality of the votes cast by holders of the Company's Common Stock. The six nominees for director receiving the highest number of affirmative votes will be elected. Abstentions and broker non-votes will not be counted as having been voted for purposes of election of directors. Stockholders may not cumulate votes in the election of directors.
Recommendation of the Board of Directors
The Board recommends a vote FOR the election of each of the nominees.
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THE BOARD, ITS COMMITTEES AND ITS COMPENSATION
Our Board of Directors is responsible for establishing broad corporate policies and for overseeing the overall management of the Company. In addition to considering various matters which require its approval, our Board of Directors provides advice and counsel to, and ultimately monitors the performance of, our senior management.
Board Leadership Structure and Committee Composition
The Board of Directors takes a flexible approach to the issue of whether the offices of Chairman and Chief Executive Officer ("CEO") should be separated or combined. This approach allows the Board to regularly evaluate whether it is in the best interests of the Company for the CEO or another director to hold the position of Chairman. Currently, the Company has separated the position of Chairman of the Board and Chief Executive Officer since the Company emerged from bankruptcy in January 2008. We believe that this is the appropriate leadership structure, as it permits our Chief Executive Officer, Mr. Ramírez, to focus his attention on running the business and developing corporate strategy, while our Chairman of the Board, Mr. Macaluso, provides independent leadership to the Board of Directors in performing its advisory, governance and oversight functions.
The Board of Directors has three (3) standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee.
The current membership of the standing committees is as follows:
Board Member
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Audit | Compensation | Nominating/ Corporate Governance |
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Luis Manuel Ramírez | ||||||
Charles Macaluso | X | X | ||||
Carl Bartoli | X | X | ||||
Terence J. Cryan | Chairman | Chairman | ||||
Eugene I. Davis | X | |||||
Michael E. Salvati | Chairman | X | ||||
Frank E. Williams, Jr. | X | X |
Audit Committee. The Audit Committee assists the Board of Directors in overseeing our accounting and financial reporting processes and the audits of our consolidated financial statements and our internal control over financial reporting, including monitoring the integrity of our financial statements and the independence and performance of our independent registered public accounting firm. The Audit Committee appoints and oversees an independent registered public accounting firm to audit our financial statements and our internal control over financial reporting. In addition, the Audit Committee approves the scope of the annual audits and fees to be paid to our independent registered public accounting firm. The Audit Committee held four (4) meetings during 2013.
The Audit Committee regularly reviews and reassesses the adequacy of its Audit Committee Charter. A copy of the current Audit Committee Charter is available under the heading "Corporate Governance" of the Investor Relations section of our website at http://www.globalpower.com/.
Our Board of Directors has determined that:
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Compensation Committee. The Compensation Committee reviews the performance of our executive officers, establishes compensation programs for the executive officers (including salary and short and long-term incentive programs) and reviews the overall compensation programs of the Company. The Compensation Committee also administers our stock incentive plans and awards. During 2013, the Compensation Committee held seven (7) meetings.
The Compensation Committee regularly reviews and reassesses the adequacy of its Compensation Committee Charter. A copy of the current Compensation Committee Charter is available under the heading "Corporate Governance" of the Investor Relations section of our website at http://www.globalpower.com/.
The CEO, Chief Financial Officer, General Counsel and Chief Human Resources Officer of the Company generally attend portions of Compensation Committee meetings and provide input to the Compensation Committee with respect to issues affecting compensation, key responsibilities, corporate objectives and equity plan management and compliance. As discussed in the "Compensation Discussion and Analysis" section beginning on page 18 below, the CEO makes recommendations to the Compensation Committee regarding the compensation of our executives and participates in discussions of such compensation. From time to time, other members of management and Company personnel may attend Compensation Committee meetings to provide presentations and where subject matters involving their expertise are discussed. No member of management is present during discussions of his or her performance or compensation, and no member of management (including the CEO) is present during deliberations and voting with respect to the CEO's performance or compensation.
The Compensation Committee may, in its sole discretion, select, retain and obtain, at our expense, the advice of independent compensation consultants. The Compensation Committee has the authority to set the compensation and oversee the work of the compensation consultant. In 2013, the Compensation Committee appointed Meridian Compensation Partners ("Meridian") to provide it with advice in connection with our 2013 compensation program, as further described below under "Compensation Discussion and AnalysisCompensation Peer Group." The Compensation Committee has re-appointed Meridian to serve as its independent consultant in connection with our 2014 compensation program. Meridian reports directly to the Committee and serves at the sole discretion of the Committee. It does not perform any other services for the Company. The Compensation Committee has assessed the independence of Meridian pursuant to SEC rules and concluded that no conflict of interest exists that would prevent the consulting firm from providing independent advice to the Compensation Committee.
The Compensation Committee also may, in its sole discretion, retain and obtain, at our expense, the advice and assistance of outside counsel and such other advisors as it deems necessary.
The Compensation Committee Charter provides that the Compensation Committee may delegate its authority to one or more subcommittees. As of the date of this proxy statement, the Compensation Committee has not delegated such authority.
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Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee of the Board of Directors (the "Nominating and Corporate Governance Committee") oversees the nomination of directors for service on the Board of Directors and its committees, reviews and considers developments in corporate governance practices, and recommends to the Board of Directors policies and procedures with respect to corporate governance. During 2013, the Nominating and Corporate Governance Committee held three (3) meetings.
The Nominating and Corporate Governance Committee regularly reviews and reassesses the adequacy of its Nominating and Corporate Governance Committee Charter. A copy of the current Nominating and Corporate Governance Committee Charter is available under the heading "Corporate Governance" of the Investor Relations section of our website at http://www.globalpower.com/.
Director Independence
Our Board of Directors has reviewed the criteria for determining the independence of our directors under Nasdaq and Securities and Exchange Commission ("SEC") rules. It has affirmatively determined that each of Messrs. Macaluso, Bartoli, Cryan, Davis, Salvati and Williams is independent under such criteria. Accordingly, during 2013 and continuing through the date of this proxy statement, our Board of Directors has been comprised of a substantial majority of directors who qualify as independent directors under the rules adopted by the SEC and Nasdaq. As previously disclosed, Mr. Davis has decided not to stand for re-election at the Annual Meeting, and therefore, effective as of the date of the Annual Meeting, Mr. Davis will no longer be a member of the Board of Directors or any committee thereof.
In considering the independence of our directors, the Board of Directors specifically addressed those matters disclosed in "Certain Relationships and Related Transactions," beginning on page 48 below. Except as disclosed in that section, there were no specific transactions, relationships or arrangements that were considered by the Board of Directors in determining the independence of any of our directors.
Board's Role in Risk Oversight
The Board of Directors as a whole has ultimate responsibility for risk oversight and the standing committees of the Board of Directors assist in fulfilling this responsibility. In particular, the Audit Committee oversees risk management in the areas of internal control over financial reporting, disclosure controls and procedures, and legal and regulatory compliance. The Audit Committee also reviews with management our policies and practices with respect to risk assessment and management, and our exposure to material financial risk and management's efforts to monitor and control such exposure. The Compensation Committee oversees our compensation programs and reviews the conduct incented by those programs, including the impact on risk-taking by our executive officers and employees, as further described under "Compensation Discussion and AnalysisRisk Assessment" beginning on page 29 below. The Nominating and Corporate Governance Committee oversees the organization, membership and structure of our Board of Directors and our corporate governance practices. The committee members regularly report to the full Board of Directors on material developments in their areas of oversight.
Board Nomination Process
The Nominating and Corporate Governance Committee believes that members of the Company's Board must possess certain basic personal and professional qualities in order to properly discharge their fiduciary duties to stockholders, provide effective oversight of the management of the Company and monitor the Company's adherence to principles of sound corporate governance. The Nominating and Corporate Governance Committee has identified certain threshold criteria for Board nominees.
10
However, the Nominating and Corporate Governance Committee will also consider the contributions that a candidate can be expected to make to the collective functioning of the Board based upon the totality of the candidate's credentials, experience and expertise, the composition of the Board at the time, and other relevant circumstances.
11
The Nominating and Corporate Governance Committee also will consider properly submitted stockholder candidates for membership on the Board of Directors. Any stockholder of the Company wishing to submit a candidate for the Nominating and Corporate Governance Committee's consideration must provide a written notice recommending the candidate to the Corporate Secretary of Global Power Equipment Group Inc. at 400 East Las Colinas Boulevard, Suite 400, Irving, Texas 75039, by email to corporatesecretary@globalpower.com (with a confirmation copy sent by mail) or by fax to 1-214-574-2712 (with a confirmation copy sent by mail).
The written notice must be timely submitted and include required information in accordance with the Company's bylaws (see "Stockholder Proposals For 2015 Annual Meeting" below for more information). Candidates recommended by our stockholders will be evaluated against the same criteria and under the same policies and procedures applicable to the evaluation of candidates proposed by directors or management.
Board Meetings
The Board held eight (8) meetings during 2013. With the exception of the absence of one director at one meeting of the Board and one meeting of the Compensation Committee, each director serving on the Board in 2013 attended 100% of the meetings of the Board and committees on which he served. Each director is expected to devote the time necessary to appropriately discharge his responsibilities and to rigorously prepare for and attend and participate in all Board meetings and meetings of Board committees on which he serves.
Annual Meetings of Stockholders
Pursuant to our corporate governance guidelines and director nominations policy, directors are expected to attend the Annual Meeting of Stockholders. All of our directors attended the Annual Meeting of Stockholders held in May 2013 in person, with the exception of Mr. Davis.
Code of Business Conduct and Ethics
Our Board of Directors has adopted a Code of Business Conduct and Ethics, which outlines the principles of legal and ethical business conduct under which the Company does business. The Code of Business Conduct and Ethics is applicable to all of our directors, officers and employees. The Code of Business Conduct and Ethics is available under the heading "Corporate Governance" of the Investor Relations section of our website at http://www.globalpower.com/. Upon request to our Secretary, the Company will provide a copy of the Code of Business Conduct and Ethics free of charge. Any substantive amendment of the Code of Business Conduct and Ethics, and any waiver of the Code of Business Conduct and Ethics for executive officers or directors, will be made only after approval by our Board of Directors or a committee of the Board, and will be disclosed on our website. In addition, any such waiver will be disclosed within four days on a Form 8-K filed with the SEC if then required by applicable rules and regulations.
Communication with the Board of Directors
Interested parties, including stockholders, may contact the Board of Directors or any committee of the Board of Directors by sending correspondence to the attention of Corporate Secretary, c/o Global Power Equipment Group Inc., 400 East Las Colinas Boulevard, Suite 400, Irving, Texas 75039 or
12
corporatesecretary@globalpower.com. Any mail received by the Corporate Secretary will then be forwarded to the members of the Board of Directors or the appropriate committee for further action, if necessary. The non-management directors have requested that the Corporate Secretary not forward to them advertisements, solicitations for periodicals or other subscriptions, and other similar communications.
Director Compensation
The compensation of our directors is determined by the Nominating and Corporate Governance Committee subject to approval by the entire Board of Directors. The objectives for our non-employee director compensation program are to attract highly-qualified individuals to serve on the Board of Directors and align directors' interests with the interests of our stockholders. The Nominating and Corporate Governance Committee reviews the program periodically to ensure that it continues to meet these objectives. To determine whether the director compensation program is competitive, the Nominating and Corporate Governance Committee considers general market information on program design. In recommending director compensation levels, the Nominating and Corporate Governance Committee also considers the significant amount of time that directors expend in fulfilling their duties to the Company as well as the skill level required by the Company of members of the Board of Directors. The Nominating and Corporate Governance Committee recommends any change it considers appropriate to the full Board of Directors for its review and approval, and includes the relevant information and data for the Board of Directors to use in its considerations.
Directors who are employed by our Company or any of our subsidiaries do not receive compensation for serving as directors. Directors who are not employees of our Company or any of our subsidiaries are entitled to receive an annual retainer as follows:
In addition, directors are entitled to receive:
We provide directors with an annual allowance for continuing education, the amount of which is set by the Board of Directors from time to time. For 2013 the amount was $10,000. We also reimburse non-employee directors for out-of-pocket expenses incurred in connection with attending Board and committee meetings.
On January 22, 2013, each of the non-employee directors received 4,927 restricted shares of our Common Stock. Of the 4,927 restricted shares, 1,232 shares vested on January 22, 2014, 1,232 shares will vest on each of January 22, 2015 and 2016 and 1,231 shares will vest on January 22, 2017, subject to continued service as a director through the vesting dates.
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The Board recognizes that ownership by the non-employee directors in the Company's Common Stock will align their interests with the interests of the Company's stockholders. As a result, each non-employee director is required to own the lesser of (i) shares with a value of three times his or her annual cash retainer, or (ii) 8,000 shares. The target date for the existing directors to meet these stock ownership guidelines is January 1, 2015 and the target date for any new directors is five years from the date of his or her appointment. For purposes of these guidelines, the director will be deemed to "own" the Company's shares that are beneficially owned by such person, including equity awards that will payout within 60 days of the applicable measuring date. As of March 6, 2014, each non-employee director meets or exceeds the minimum ownership requirement.
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The following table provides information on the compensation awarded to, earned by, or paid to each person who served as a non-employee director during 2013.
Name
|
Fees Earned or Paid in Cash ($) |
Stock Awards ($)(1) |
All Other Compensation ($)(2) |
Total ($) | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Charles Macaluso |
143,000 | 80,015 | 22,892 | 245,907 | |||||||||
Carl Bartoli |
90,500 | 80,015 | | 170,515 | |||||||||
Terence J. Cryan |
101,500 | 80,015 | 8,279 | 189,794 | |||||||||
Eugene I. Davis |
72,500 | 80,015 | 21,986 | 174,501 | |||||||||
Michael E. Salvati |
125,500 | 80,015 | | 205,515 | |||||||||
Frank E. Williams, Jr. |
89,369 | 80,015 | | 169,384 |
Name
|
Unvested Restricted Shares (#) |
|||
---|---|---|---|---|
Charles Macaluso |
9,892 | |||
Carl Bartoli |
9,892 | |||
Terence J. Cryan |
9,892 | |||
Eugene I. Davis |
9,892 | |||
Michael E. Salvati |
7,342 | |||
Frank E. Williams, Jr. |
9,892 |
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PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed BDO USA, LLP as the Company's independent registered public accounting firm for 2014. The Board of Directors is asking stockholders to ratify this appointment. Although SEC regulations and the Nasdaq listing requirements require the Company's independent registered public accounting firm to be engaged, retained, and supervised by the Audit Committee, the Board considers the selection of an independent registered public accounting firm to be an important matter to stockholders. Accordingly, the Board considers a proposal for stockholders to ratify this appointment to be an opportunity for stockholders to provide input to the Audit Committee and the Board on a key corporate governance issue.
Representatives of BDO USA, LLP will be present at the Annual Meeting and will be offered the opportunity to make a statement if they so desire. They will also be available to answer questions.
Fees Paid to Auditors
The following table sets forth the fees accrued or paid by the Company to BDO USA, LLP for the years ended December 31, 2013 and 2012.
|
December 31, | ||||||
---|---|---|---|---|---|---|---|
|
2013 | 2012(4) | |||||
Audit Fees(1) |
$ | 785,000 | $ | 798,692 | |||
Audit-Related Fees(2) |
2,415 | 11,322 | |||||
Tax Fees(3) |
41,236 | 27,174 | |||||
All Other Fees |
| | |||||
| | | | | | | |
TOTAL |
$ | 828,651 | $ | 837,188 | |||
| | | | | | | |
Audit Committee Pre-Approval of Audit and Non-Audit Services
The Audit Committee's policy is to pre-approve all audit and non-audit services provided to the Company by its independent registered public accounting firm (except for items exempt from pre-approval requirements under applicable laws and rules). All audit and non-audit services for 2013 were pre-approved by the Audit Committee.
When considered necessary, management prepares an estimate of fees for the service and submits the estimate to the Audit Committee for its review and pre-approval. Any modifications to the
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estimates will be submitted to the Audit Committee for pre-approval at the next regularly scheduled Audit Committee meeting. All fees paid to our independent registered public accounting firm during 2013 were in accordance with this pre-approval policy.
Required Vote
Ratification of the appointment of BDO USA, LLP as our independent registered public accounting firm for the year ending December 31, 2014 requires the affirmative vote of a majority of the votes cast at the Annual Meeting. Abstentions will have no effect on the results of this vote. Brokerage firms have authority to vote customers' unvoted shares held by the firms in street name on this proposal. If a broker does not exercise this authority, such broker non-votes will have no effect on the results of this vote.
If the stockholders fail to ratify the appointment, the Audit Committee will reconsider its selection. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.
Recommendation of the Board of Directors
The Board recommends a vote FOR ratification of the appointment of BDO USA, LLP as the Company's independent registered public accounting firm for 2014.
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Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides an analysis of the compensation arrangements and decisions with respect to our named executive officers who include:
Luis Manuel Ramírez |
President and Chief Executive Officer | |
Raymond K. Guba |
Senior Vice President and Chief Financial Officer | |
Penny Sherrod-Campanizzi |
President of Electrical Solutions | |
Tracy D. Pagliara* |
General Counsel, Secretary and Vice President of Business Development | |
Melanie Barth |
Chief Human Resources Officer |
Our named executive officers also include three additional executives whose employment with the Company terminated during 2013:
David L. Willis |
former Senior Vice President and Chief Financial Officer | |
Dean J. Glover |
former President of our Products Division | |
Kenneth W. Robuck |
former President of our Services Division |
Executive Summary
In furtherance of the business strategies and compensation objectives outlined below, we have undergone several significant changes in 2013. These changes include:
|
Key Changes in 2013 | |
Short-Term Incentive Program |
In 2013, we adopted a new short-term incentive ("STI") plan, which is designed to motivate our named executive officers to achieve each year's business plan objectives and individual performance goals. The changes to the STI plan include: |
|
|
Greater Focus on Financial Objectives. Historically, the STI opportunity had been allocated 70% to financial goals and 30% to individual goals. For 2013, we increased the portion of the STI opportunity tied to financial goals from 70% to 80%, in order to enhance the link between the STI payout and the achievement of our short-term business objectives. For business unit executives, we increased the portion of the STI opportunity allocated to corporate-wide financial metrics, in order to focus them on integrating business unit performance. |
|
|
Greater Emphasis on Performance. Historically, the threshold performance level under the STI program was achievement of 80% of target. For 2013, we increased the threshold performance level for the financial goals from 80% to 90% to place a greater emphasis on a pay-for-performance. |
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Long-Term Incentive Program |
We also adopted a new long-term incentive ("LTI") program for 2013. These changes include: |
|
|
Greater Emphasis on Performance. Historically, the LTI opportunity was split equally between time-based and performance-based awards. In 2013, we allocated 2/3 of the LTI opportunity to performance-based awards to promote greater emphasis on pay-for-performance. |
|
|
Greater Emphasis on Long-Term Performance. Historically, our performance-based awards were subject to a 1-year performance period. For the new 2013 performance-based awards, we extended the performance period from 1-year to 3-years to focus our executives on achieving sustainable long-term results. |
|
|
Diversified the Performance Metrics. Historically, our performance-based awards were earned based on the achievement of a single financial goal (EBITDA, operating income or net income). For the new 2013 performance-based awards, we diversified the performance metrics by using two equally weighted goals: (i) operating margin and (ii) total stockholder return relative to the Russell 2000 Index. |
|
|
Address Retention Concerns. Historically, our time-based awards vested ratably over a 4-year period. For 2013, we shortened the vesting period to 3 years in order to compensate executives for the increased variability of our incentive program. |
|
Management Changes |
We underwent several changes to our management structure. These changes were made in an effort to better align our leadership structure to achieve our long-term strategic objectives. |
|
|
Mr. Robuck resigned as President of the Services Division and Mr. Glover resigned as President of the Products Division. In light of these departures, we reorganized into three segments: Product Solutions, Nuclear Services and Energy Services. This reorganization will help us to establish our $1 billion platform that will capture the fast growing natural gas trend while building a strong market-facing commercial organization, and support our long-term strategy. |
|
|
In November 2013, Mr. Willis resigned from all positions at the Company, including as Chief Financial Officer of the Company. Mr. Guba was hired as his replacement. |
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We are committed to providing total direct compensation that supports our business strategies and the compensation objectives. As a result, we have implemented the following policies and practices:
Our Compensation Policies and Practices
Our compensation objectives are outlined below.
Our Compensation Objectives
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Elements of Total Direct Compensation
A brief summary of our total direct compensationconsisting of base salary, STI opportunities and LTI opportunitiesfor our named executive officers is set forth below.
Annual Base Salaries
The Compensation Committee intends to provide our named executive officers with competitive base salaries that are commensurate with their job responsibilities, experience and performance.
As part of its annual management performance evaluation, the Compensation Committee reviewed the base salary levels of the named executive officers (other than Mr. Guba) to determine whether any adjustments were appropriate for 2013. The Compensation Committee reviewed the market data, performance evaluations conducted by Mr. Ramírez, and base salary histories. Based on this review, and in light of our financial performance, no changes to annual base salary were made for 2013. In November 2013, the Compensation Committee approved a base salary for Mr. Guba of $390,000, which was negotiated at the time of his hire.
For more information about the 2013 base salaries for each of our named executive officers, please refer to the "Salary" column of and the related footnotes to the "Summary Compensation Table" on page 31.
Short-Term Incentive Compensation
As part of its annual management performance evaluation, the Compensation Committee reviewed the threshold, target and maximum award opportunities for each of the named executive officers (other than Mr. Guba) under the STI plan, which were expressed as a percentage of base salary. During the annual review process the Committee did not adjust the target STI opportunity for the named executive officers, because the levels were already competitively positioned. Mr. Guba did not participate in the STI plan for 2013 because he joined in the middle of the final quarter. Instead, he was awarded a guaranteed bonus of $64,000 for the fourth quarter of 2013, which was negotiated at the time of his hire.
The threshold, target and maximum levels for the named executive officers (other than Mr. Guba) are set forth in the table below.
Named Executive Officer
|
Threshold | Target | Maximum | |||||||
---|---|---|---|---|---|---|---|---|---|---|
L. Ramírez |
40 | % | 80 | % | 160 | % | ||||
P. Sherrod-Campanizzi |
27.5 | % | 55 | % | 110 | % | ||||
T. Pagliara |
27.5 | % | 55 | % | 110 | % | ||||
M. Barth |
27.5 | % | 55 | % | 110 | % | ||||
D. Willis |
32.5 | % | 65 | % | 130 | % | ||||
D. Glover |
32.5 | % | 65 | % | 130 | % | ||||
K. Robuck |
32.5 | % | 65 | % | 130 | % |
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Performance Objectives
The performance objectives for the short-term incentive opportunity for each named executive officer were allocated between financial objectives and individual objectives as follows:
|
Financial Objectives | |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Executive Level
|
Business Operating Income |
Corporate Operating Income |
Individual Objectives |
|||||||
Senior Corporate Executives(1) |
| 80 | % | 20 | % | |||||
Senior Business Unit Executives(2) |
50 | % | 30 | % | 20 | % |
Financial Objectives
The financial objectives were based on operating income. For this purpose, we define operating income as the subtotal of net income or (loss) for the year plus: (i) the following to the extent deducted in calculating net income for such period: interest charges; letter of credit fees; the provision for federal, state, local and foreign income taxes; other non-recurring, non-cash expenses; and any other non-cash write-downs or non-cash write-offs including fixed asset impairment or write-downs, intangible asset impairments, deferred tax asset write-offs and non-cash stock compensation expenses; and minus (ii) the following, to the extent included in calculating such net income: federal, state, local and foreign income tax benefits recorded by the Company; interest income; and all extraordinary, non-recurring, non-cash items increasing net income for such period.
The Compensation Committee established threshold, target and maximum performance levels for the operating income goals for both the corporate and divisional level executives. If actual performance for an operating income goal fell below the threshold level, then no bonus would be funded with respect to that goal. If actual performance for an operating income goal exceeded the maximum performance level, then the bonus for that goal would be capped.
The 2013 operating income ("OI") targets and actual performance results for purposes of the STI plan were as follows (in thousands):
Operating Income
|
Threshold (50% Payout) |
Target (100% Payout) |
Maximum (200% Payout) |
Actual Results |
Actual Payout Level |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Consolidated OI |
$ | 25,245 | $ | 28,050 | $ | 40,595 | $ | 16,189 | 0.00 | % | ||||||
EPCS OI |
$ | 5,256 | $ | 5,844 | $ | 7,671 | $ | 6,123 | 115.30 | % |
Individual Goals
The Compensation Committee bases a meaningful portion of the short-term incentive opportunity on the achievement of individual goals, in order to provide the flexibility to recognize, differentiate and
22
reward individual performance. The individual goals for each named executive officer, other than Mr. Guba, who did not participate in the STI plan for 2013, are summarized below.
Named Executive Officer
|
Individual Goals | |
---|---|---|
L. Ramírez | Maintain safety levels at or below certain thresholds; achieve reduction of selling, general, and administrative expenses; achieve certain leadership objectives for delivery of strategic imperatives; lead various roadshows/presentations and establish consistent performance record with key stakeholders; and achieve certain "transformation" objectives and establish long-term framework to achieve company strategies. |
|
T. Pagliara |
Achieve revenue growth and business development objectives; upgrade compliance program and integration processes and complete compliance training; and lead implementation of document retention system for the Legal Department and reduce associated legal costs. |
|
M. Barth |
Design and implement STI/LTI compensation plans; complete executive compensation benchmarking against peer proxy group; roll out new Performance Management Process, tools and training to enable performance culture; complete Global Power succession plan for key roles and establish long-term leadership development plans; design and implement variable compensation plan for Global Power Sales Force; achieve certain "transformation" objectives, and establish long-term transformation strategies. |
|
P. Sherrod-Campanizzi |
Maintain safety levels at or below certain thresholds; complete succession plan for key roles and other long-term leadership development objectives; complete integration of back-office requirements; develop and lead implementation of distributed LEAN manufacturing system; and deliver or exceed pro-forma plan for certain acquisitions. |
|
D. Willis |
Restructure finance organization for efficient scale and skill alignment and achieve other restructuring objectives; achieve reporting objectives; improve internal controls; achieve budgeted reduction of selling, general and administrative expenses; achieve certain "transformation" objectives and establish long-term cost out strategies. |
|
D. Glover |
Maintain safety levels at or below certain thresholds; reduce "cost of quality"; reduce controllable selling, general and administrative expenses; achieve certain "transformation" objectives and establish long-term organic product line strategies. |
|
K. Robuck |
Maintain safety levels at or below certain thresholds; establish project management COE and develop operational playbook; complete succession plan for key roles and establish long-term leadership development plan; integrate COO into organizational structure; expand revenue for natural gas and non-nuclear services segments; and achieve certain "transformation" objectives and establish long-term organic growth strategies. |
23
Payouts
The Compensation Committee reviewed Mr. Ramírez's performance with respect to his 2013 individual goals. With regard to the other named executive officers, Mr. Ramírez made recommendations to the Compensation Committee concerning the level of performance of each officer with respect to the person's goals for 2013. After taking Mr. Ramírez's recommendations into consideration, and after making its own assessment of each executive's performance, the Compensation Committee determined the payouts under the 2013 STI plan, based on aggregate corporate and individual performance.
The weighted-average achievement and payout levels for the named executive officers under the 2013 STI plan are set forth below.
Named Executive Officer
|
Weighted Average Achievement Level |
Payout | |||||
---|---|---|---|---|---|---|---|
L. Ramírez |
20.0 | % | $ | 88,000 | |||
P. Sherrod-Campanizzi |
80.5 | % | $ | 133,686 | |||
T. Pagliara |
21.2 | % | $ | 36,894 | |||
M. Barth |
19.1 | % | $ | 32,050 |
Ms. Sherrod-Campanizzi was also granted a special discretionary bonus of $50,000, grossed-up for applicable taxes, for her successful integration of acquisitions.
Mr. Guba did not participate in the STI plan for 2013, but was awarded a guaranteed bonus of $64,000 for the fourth quarter of 2013, which was negotiated at the time of his hire. Messrs. Glover and Willis, pursuant to the terms of their respective employment agreements, each received payouts of pro-rata portions of their target bonuses in connection with their terminations. Mr. Robuck participated in the STI plan for 2013, but his bonus opportunity was forfeited due to his termination.
The amount of the 2013 STI payments for each named executive officer is set forth in the "Non-Equity Incentive Plan Compensation" column of, and the related footnotes to, the "Summary Compensation Table" of this proxy statement at page 31. The amount of bonuses paid outside of the STI plan for each named executive officer is set forth in the "Bonus" column of the "Summary Compensation Table." For more information on the 2013 STI opportunities for our named executive officers, please refer to the table "2013 Grants of Plan-Based Awards" in this proxy statement on page 34.
Long-Term Incentive Compensation
Grants During Annual Grant Cycle
As part of its annual management performance evaluation, the Compensation Committee reviewed the LTI award levels for our named executive officers (other than Mr. Guba). When considering appropriate award levels, the Compensation Committee considered its assessment of each executive's general performance during the year, as well as his or her relative roles and responsibilities and potential within the Company, the estimated accounting expense, our burn rate, the potential dilution that will occur to our stockholders and the median levels of market surveys. Based on this information, the Committee decided not to make any changes in the 2013 LTI award levels for the named executive officers. In November 2013, the Compensation Committee approved the LTI grant for Mr. Guba, which was negotiated at the time of his hire.
As described in more detail in the Executive Summary, the number of RSUs granted to each named executive officer was allocated 1/3 to time-based RSUs and 2/3 to performance-based RSUs.
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The following chart illustrates the number of RSUs granted to each named executive officer in 2013.
Named Executive Officer
|
Time-Based RSUs |
Performance-Based RSUs |
Total RSUs |
|||||||
---|---|---|---|---|---|---|---|---|---|---|
L. Ramírez |
11,167 | 22,333 | 33,500 | |||||||
R. Guba |
4,667 | 9,333 | 14,000 | |||||||
P. Sherrod-Campanizzi |
1,833 | 3,667 | 5,500 | |||||||
T. Pagliara |
3,000 | 6,000 | 9,000 | |||||||
M. Barth |
3,474 | 6,949 | 10,423 | |||||||
D. Willis |
3,667 | 7,333 | 11,000 | |||||||
D. Glover |
3,667 | 7,333 | 11,000 | |||||||
K. Robuck |
3,667 | 7,333 | 11,000 |
Payouts
Mr. Ramírez received a grant of performance-based RSUs in 2012, Ms. Sherrod-Campanizzi received grants of performance-based RSUs in 2011 and 2012, and Mr. Pagliara received grants of performance-based RSUs in 2010, 2011 and 2012. The performance target for purposes of these performance-based RSUs allocated to the 2013 performance cycle was operating income (as defined under our STI program) of $28,050,000.
The performance-based RSUs for the 2013 performance cycle had separate payout levels for performance at 90% of target, 95% of target and 100% of target.
Percentage of Target Attained
|
Percentage of the Performance-Based RSUs Allocated to Each Performance Period Earned |
|||
---|---|---|---|---|
90% but less than 95% |
50 | % | ||
95% but less than 100% |
75 | % | ||
100% or more |
100 | % |
Our 2013 operating income (as defined above) was $16,189, which resulted in no payout level for units allocated to the 2013 performance period (i.e., 12.5% of the 2010, 2011 and 2012 grants).
Each of Messrs. Willis, Glover and Robuck also received grants of performance-based RSUs in 2010, 2011 and 2012. Pursuant to the terms of their employment agreements, each of Messrs. Willis and Glover received a payout of these units at 100%. Mr. Robuck forfeited his units upon his resignation.
For each named executive officer's actual payout, please refer to the "2013 Stock Vested" section on page 37 of this proxy statement.
Compensation Consultant and Peer Group
In 2013, the Compensation Committee retained Meridian Compensation Partners, LLC ("Meridian") to serve as its independent consultant to assist in developing and reviewing our executive compensation program. Meridian reports directly to the Committee and serves at the sole discretion of the Committee. It does not perform any other services for the Company. The Compensation Committee has assessed the independence of Meridian pursuant to Securities and Exchange Commission rules and concluded that no conflict of interest exists that would prevent the consulting firm from independently advising the Compensation Committee.
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We believe that each element of our compensation program should remain competitive in order to retain, and, if necessary, attract experienced, high-caliber executives. To achieve this objective, Meridian was asked to review competitive compensation data, compare current compensation levels to the market, and assist in establishing compensation levels. The market data was derived from several sources, including the companies in a compensation peer group established by the Compensation Committee, with the advice of Meridian, and selected compensation surveys. Each of these sources is described below.
Compensation Peer Group
Our compensation peer group consists of companies that have the same General Industry Classification and similar lines of business and operations as the Company. Based on these factors, and upon the advice and recommendation of Meridian, the Compensation Committee modified the compensation peer group to: (i) add Graham Corporation; (ii) add CECO Environmental Corp.; and (iii) remove Quanta Services Inc. These changes were made to reflect the evolving market in which we compete for executive talent and to decrease the median revenue size of the peer group.
The members of the compensation peer group for 2013 compensation decisions were as follows:
Compensation Peer Group | ||
---|---|---|
Aegion Corporation | Graham Corporation | |
Astec Industries, Inc. | Matrix Service Company | |
AZZ Incorporated | MYR Group Inc. | |
CECO Environmental Corp. | PMFG, Inc. | |
Chicago Bridge & Iron Company | Powell Industries, Inc. | |
Donaldson Company, Inc. | Team, Inc. | |
Dycom Industries, Inc. | The Babcock & Wilcox Company | |
Foster Wheeler AG | Willbros Group, Inc. |
Compensation data for the peer group was adjusted to reflect the Company's corporate or division revenue, where applicable, using regression analysis.
Compensation Surveys
Meridian supplemented the peer group data with published survey sources, with approximately 500 companies with revenues from $500 million to $2.5 billion, to provide the Committee with another perspective on market compensation levels.
Additional Compensation Matters
Severance and Change in Control Protections
In the past, the Company maintained employment agreements with each of its named executive officers. The Company, however, has made a strategic decision not to enter into further employment agreements with new hires, including named executive officers, in order to maintain the organizational flexibility needed in the continued evolution of our business.
Employment Agreements
We have entered into employment agreements with Messrs. Ramírez and Pagliara, which entitle them to severance benefits in the event of an involuntary termination of employment without "cause," termination by the executive for "good reason," (each as defined in his respective employment agreement) or if the Company elects not to renew the term of his agreement. In exchange for the severance benefits, the named executive officers must sign a release of claims against the Company,
26
agree not to disclose Company confidential information, and agree not to compete against the Company or solicit its employees or customers. These provisions protect the Company's interests and help to ensure its long-term success.
Offer Letter with Ms. Sherrod-Campanizzi
We have a letter agreement with Ms. Sherrod-Campanizzi which provides that upon a termination without cause by the Company and the execution of a release of claims against the Company, she would be entitled to receive severance benefits.
Offer Letter with Ms. Barth
We have a letter agreement with Ms. Barth which provides that upon a termination without cause by the Company and the execution of a release of claims against the Company, she would be entitled to receive severance benefits.
Severance Arrangement with Mr. Guba
In connection with Mr. Guba's appointment and the Company's strategic decision to not enter into employment agreements with new hires, Mr. Guba entered into a "severance arrangement" with the Company. Pursuant to his severance arrangement, in the event that Mr. Guba's employment were terminated without "cause" or he resigned for "good reason" (both as defined in his severance arrangement), Mr. Guba would be eligible to receive severance benefits. Reduced severance levels would be available in the event of his death or "disability" (as defined in his severance arrangement). In exchange for the severance benefits, Mr. Guba must sign a release of claims against the Company, agree not to disclose Company confidential information, and agree not to compete against the Company or solicit its employees or customers.
Change in Control Protections
The RSUs granted to our named executive officers provide for full accelerated vesting of all RSUs (including both time-based and performance-based RSUs) if the Company undergoes a change in control. The committee believes that immediate vesting of RSUs upon a change in control is appropriate on the basis that our named executive officers should receive the full benefit of RSUs if the Company is sold or otherwise comes under the control of an outside party.
The named executive officers are not entitled to enhanced cash severance benefits as the result of a change in control, and we do not provide excise tax gross-up protection with respect to any benefits received in connection with a change in control.
Severance for Terminating Executives
We entered into severance agreements with Mr. Willis and Mr. Glover in connection with the termination of their employment. The severance agreements generally tracked the severance provisions of their employment agreements and re-affirmed the application of the restrictive covenants. We also entered into a consulting agreement with each of Mr. Willis and Mr. Glover to facilitate a smooth transition of their duties.
We entered into a severance agreement with Mr. Robuck in connection with his termination of employment. This agreement, however, was subsequently rescinded.
Please refer to the "Estimated Payments Upon Termination Without Cause or Related to a Change in Control" section of this proxy statement on page 39 for information regarding potential payments and benefits, if any, that each named executive officer would be entitled to receive under certain terminations (or, with respect to Messrs. Willis and Glover, the benefits they actually received upon termination).
27
Retirement and Welfare Benefits
We make available to each of our named executive officers certain benefits that are generally available to all salaried employees, including medical, dental, vision, life, accidental death and dismemberment, travel accident and short and long-term disability insurance. All of our named executive officers are entitled to participate in the Company's 401(k) plan and its flexible spending benefit plan and are entitled to four weeks of paid vacation each year. We make these benefits available so that we can provide a competitive compensation package to our salaried employees and our named executive officers.
Perquisites
We provided our named executive officers modest perquisites in 2013, such as (i) reimbursements for tax return preparation, which we believe are important to the financial stability of our executive team; (ii) reimbursement of country club dues for each of Messrs. Glover and Robuck, which was included in each executive's employment agreement (the Compensation Committee has decided to discontinue this practice for new hires); and (iii) an automobile allowance for Mr. Robuck. For more information about the perquisites provided in 2013 to each named executive officer, please refer to the "All Other Compensation" column of and the related footnotes to the "Summary Compensation Table" on page 31.
For more information about the perquisites provided in 2013 to our named executive officer, please refer to the "All Other Compensation" column of and the related footnotes to the "Summary Compensation Table" on page 31.
Stock Ownership Guidelines
In 2011, the Compensation Committee approved stock ownership guidelines for the Company's executive officers in order to further align the interests of the Company's executive officers with the interests of the Company's other stockholders. Under the guidelines, each named executive officer is expected to accumulate the lesser of the fixed and variable number of shares as follows:
Position
|
Fixed Number of Shares |
Variable Number of Shares |
|||
---|---|---|---|---|---|
Chief Executive Officer |
75,000 | 3x Base Salary | |||
Other Named Executive Officers |
40,000 | 2x Base Salary |
The target date for the existing named executive officers to meet these stock ownership guidelines is January 1, 2015 and the target date for any new named executive officers to meet these stock ownership guidelines is five years from the date of his or her appointment or hire date. For purposes of these guidelines, the named executive officer will be deemed to "own" shares of the Company's Common Stock that are beneficially owned by such person, including shares underlying equity awards that will pay out within 60 days of the applicable measuring date.
28
The following table summarizes the progress of our named executive officers toward satisfying the applicable stock ownership requirement as of March 6, 2014:
Named Executive Officer
|
Ownership Guidelines for Shares or Units by Target Date (based on 3/6/2014 stock price) |
Beneficial Ownership of Shares or Units (as of 3/6/2014) |
|||||
---|---|---|---|---|---|---|---|
L. Ramírez* |
75,000 | 18,181 | |||||
R. Guba* |
4,594 | 1,556 | |||||
P. Sherrod-Campanizzi |
30,832 | 12,553 | |||||
T. Pagliara |
32,335 | 46,711 | |||||
M. Barth |
31,138 | 1,158 |
The Compensation Committee will periodically review and adjust, if appropriate, the fixed number of shares based on stock price, adjustments to compensation, evolving market practices, and such other factors as it deems appropriate. In establishing a named executive officer's total direct compensation each year, the Compensation Committee may consider each named executive officer's compliance with these guidelines.
Claw-Back Policy
In 2010, the Board approved a compensation recovery policy applicable to executive officers that, in general, provides that for every STI or other performance-based compensation awarded to a named executive officer on or after January 1, 2011, the named executive officer must repay or forfeit compensation received by him or her from such award if:
The claw-back policy supports the accuracy of our financial statements and, in conjunction with our stock ownership guidelines, helps to align the interests of our named executive officers with those of our stockholders. In light of our pay-for-performance culture, we felt strongly that our executives should be held to this higher standard of accountability.
Risk Assessment
The Company believes that its compensation policies and practices for all employees, including executive officers, do not create risks that are reasonably likely to have a material adverse effect on the Company. Although a significant portion of our executive compensation program is performance-based, we have focused on aligning our compensation policies with the long-term interests of our stockholders
29
and avoiding rewards that could create excessive or inappropriate risks to the Company, as evidenced by policies and practices below.
Risk Reducing Policies and Practices
Section 162(m) of the Tax Code
Section 162(m) of the Internal Revenue Code provides that the Company generally may not deduct, for federal income tax purposes, annual compensation in excess of $1 million paid to certain named executive officers. Certain "performance-based compensation" paid pursuant to stockholder approved plans is not subject to the deduction limit.
Given our net operating loss carry forwards available to offset taxable income, the Compensation Committee has not adopted a policy that requires all compensation to be deductible. In this regard, the Compensation Committee wants to preserve the ability to award cash or equity compensation to an executive that is not deductible under Section 162(m) if we believe that it is in our stockholders' best interests.
The Compensation Committee, comprised of independent directors, reviewed and discussed the above Compensation Discussion and Analysis with the Company's management. Based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
Compensation
Committee:
Terence J. Cryan (Chair)
Carl Bartoli
Eugene I. Davis
Frank E. Williams, Jr.
30
2013 SUMMARY COMPENSATION TABLE
The following table presents information regarding the compensation earned by our Chief Executive Officer, Chief Financial Officer and the next three highest paid executive officers in each of 2011, 2012 and 2013. We sometimes refer to these individuals collectively as our "named executive officers."
Name and Principal Position
|
Year | Salary ($) |
Bonus ($) |
Stock Awards ($)(1) |
Non-Equity Incentive Plan Compensation ($)(2) |
All Other Compensation ($)(3) |
Total ($) |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Luis M. Ramírez |
2013 | 550,000 | | 705,973 | 88,000 | 8,750 | 1,352,723 | |||||||||||||||
Chief Executive Officer |
2012 | 275,000 | | 451,947 | 177,497 | 117,537 | 1,021,981 | |||||||||||||||
Raymond K. Guba(4) |
2013 |
45,000 |
64,000 |
(9) |
267,913 |
|
|
376,913 |
||||||||||||||
Chief Financial Officer |
||||||||||||||||||||||
Penny Sherrod-Campanizzi |
2013 |
302,000 |
74,074 |
(10) |
148,796 |
133,686 |
36,207 |
694,763 |
||||||||||||||
President of Electrical Solutions |
||||||||||||||||||||||
Tracy D. Pagliara(5) |
2013 |
316,725 |
|
277,180 |
36,894 |
7,045 |
637,844 |
|||||||||||||||
General Counsel, Secretary, and |
2012 | 316,725 | 100,000 | (11) | 296,968 | 186,878 | 12,143 | 912,714 | ||||||||||||||
Vice President of Business Development |
2011 | 309,000 | | 225,667 | 255,163 | 50,407 | 840,237 | |||||||||||||||
Melanie R. Barth |
2013 |
305,000 |
|
197,584 |
32,050 |
|
534,634 |
|||||||||||||||
Chief Human Resources Officer |
||||||||||||||||||||||
David L. Willis(6) |
2013 |
270,656 |
199,420 |
(12) |
453,418 |
|
376,974 |
1,300,469 |
||||||||||||||
Former Chief Financial Officer |
2012 | 306,800 | | 653,518 | 174,051 | 83,196 | 1,217,565 | |||||||||||||||
|
2011 | 294,998 | | 633,446 | 286,933 | 42,774 | 1,258,151 | |||||||||||||||
Dean J. Glover(7) |
2013 |
246,096 |
156,000 |
(13) |
399,326 |
|
399,335 |
1,200,757 |
||||||||||||||
Former President of Products |
2012 | 319,925 | | 554,280 | 146,771 | 17,941 | 1,038,917 | |||||||||||||||
Division |
2011 | 312,120 | | 521,847 | 355,783 | 15,439 | 1,205,189 | |||||||||||||||
Kenneth W. Robuck(8) |
2013 |
204,259 |
|
347,090 |
|
56,544 |
607,892 |
|||||||||||||||
Former President of Services |
2012 | 336,122 | | 599,386 | 167,964 | 22,229 | 1,125,701 | |||||||||||||||
Division |
2011 | 327,924 | | 700,791 | 269,859 | 23,325 | 1,321,899 |
31
"Note 2Summary of Significant Accounting PoliciesStock-Based Compensation Expense" in the notes to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2013.
Employment Agreements. The key terms of the employment agreements with each of our named executive officers are set forth below.
Effective as of July 1, 2012, we entered into a two-year employment agreement with Mr. Ramírez, our President and Chief Executive Officer, which shall automatically renew for successive one-year terms if not otherwise terminated by either party in accordance with the employment agreement. We also agreed to nominate him for election to our Board of Directors at each stockholder meeting at which the directors are elected during his term.
32
Pursuant to his employment agreement, Mr. Ramírez receives a salary of no less than $550,000 per year and is entitled to an annual bonus opportunity under our short-term incentive plan, with a target bonus equal to 80 percent, and a maximum bonus equal to 160 percent, of his base salary. The Company also granted Mr. Ramírez 33,500 restricted share units as of July 1, 2012, equally allocated between time-based restricted share units that generally vest in four equal annual installments commencing on March 31, 2013, and performance-based restricted share units that generally vest in four equal annual installments commencing on March 31, 2013, provided that the company achieves a pre-established performance goal with respect to the prior fiscal year. Future equity grants will be subject to the discretion of the Compensation Committee. Mr. Ramírez is eligible to participate in our 401(k) and flexible benefit plans and is entitled to four weeks of paid vacation per year. We also provide to Mr. Ramírez life, accidental death and dismemberment, short and long-term disability, business travel accident insurance, medical and dental insurance, cover the costs of certain reasonable relocation expenses, and reimburse his documented business expenses.
We also entered into an employment agreement with Tracy D. Pagliara on March 22, 2010. The agreement had an initial term of two years that automatically renews for a one-year term at the end of the initial or additional employment term, unless we have provided him with advance written notice of termination. Pursuant to his employment agreement, we pay Mr. Pagliara a base salary and provide him an annual cash bonus opportunity.
The employment agreements with Messrs. Ramírez and Pagliara also contain customary confidentiality, nonsolicitation and noncompetition covenants. The nonsolicitation and noncompetition obligations continue for twelve months after termination. The confidentiality obligations continue indefinitely.
On October 1, 2012, we entered into an offer letter with Ms. Sherrod-Campanizzi, which set forth her title, her base salary at $302,000 and target short-term incentive opportunity at 55% of base salary.
On November 12, 2012, we entered into an offer letter with Ms. Barth, which set forth her title, her base salary at $305,000 and target short-term incentive opportunity at 55% of base salary.
David L. Willis' Employment Agreement and Separation Agreement. Effective as of January 28, 2008, we entered into an employment agreement with Mr. Willis, our former Senior Vice President and Chief Financial Officer, with an initial term of two years that automatically renewed for one-year terms at the end of the initial or additional employment term.
Pursuant to his employment agreement, Mr. Willis received a salary of no less than $253,000 per year and was entitled to an annual bonus opportunity under our short-term incentive plan, with a target bonus equal to 55 percent, and a maximum bonus equal to 110 percent, of his base salary. Mr. Willis was also eligible to participate in our 401(k) and flexible benefit and profit sharing plans and entitled to four weeks of paid vacation per year. We also provided to Mr. Willis medical, dental, life, accidental death and dismemberment, short and long-term disability, business travel accident insurance, and reimbursed his documented business expenses.
On November 18, 2013, Mr. Willis entered into a separation agreement with the Company, under which he resigned from all positions at the Company effective as of November 18, 2013. For a summary of his severance benefits, please see the "Estimated Payments Upon Termination or Related to a Change in Control" section on page 39.
Dean Glover's Employment Agreement and Separation Agreement. Effective as of September 1, 2008, we entered into an employment agreement with Mr. Glover, our former Senior Vice President and President of the Products Division, with an initial term of two years that automatically renewed for one-year terms at the end of the initial or additional employment term.
33
Pursuant to his employment agreement, Mr. Glover received a salary of no less than $306,000 per year and was entitled to an annual bonus opportunity under our short-term incentive plan, with a target bonus equal to 65 percent, and a maximum bonus equal to 130 percent, of his base salary. Mr. Glover was also eligible to participate in our 401(k) and flexible benefit and profit sharing plans and entitled to four weeks of paid vacation per year. We also provided to Mr. Glover medical, dental, life, accidental death and dismemberment, short and long-term disability, business travel accident insurance, and reimbursed his documented business expenses.
On September 20, 2013, Mr. Glover entered into a separation agreement with the Company, under which he resigned from all positions at the Company effective as of September 30, 2013. For a summary of his severance benefits, please see the "Estimated Payments Upon Termination or Related to a Change in Control" section on page 39.
Kenneth W. Robuck's Employment Agreement and Separation Agreement. Effective as of October 1, 2007, we entered into an employment agreement with Mr. Robuck, our former Senior Vice President and President of the Services Division, with an initial term of two years that automatically renewed for one-year terms at the end of the initial or additional employment term.
Pursuant to his employment agreement, Mr. Robuck received a salary of no less than $307,650 per year and was entitled to an annual bonus opportunity under our short-term incentive plan, with a target bonus equal to 55 percent, and maximum bonus equal to 110 percent, of his base salary. Mr. Robuck was also eligible to participate in our 401(k) and flexible benefit and profit sharing plans and entitled to four weeks of paid vacation per year. We also provided to Mr. Robuck medical, dental, life, accidental death and dismemberment, short and long-term disability, business travel accident insurance, and reimbursed his documented business expenses.
On June 24, 2013, Mr. Robuck entered into a separation agreement with the Company, under which he resigned from all positions at the Company effective as of July 1, 2013. This agreement, however, was subsequently cancelled.
2013 GRANTS OF PLAN-BASED AWARDS
The following table presents information relating to short-term incentives and RSUs granted to our named executive officers in 2013.
For 2013, the Compensation Committee granted cash bonus opportunities to each named executive officer under the short-term incentive plan.
The Compensation Committee also approved a RSU award for each of the named executive officers. One-third of each 2013 RSU award vests based on continued employment ("time-based RSUs" or "TRSUs"), one-third of the RSU award vests based on both continued employment and the satisfaction of a three-year company-specific performance goal ("performance-based RSUs" or "PRSUs") and the other one-third of the RSU award vests based on both continued employment and the satisfaction of a three-year market-based performance goal ("market-based RSUs" or "MRSUs").
In addition, Mr. Ramírez received a grant of RSUs in 2012, Ms. Sherrod-Campanizzi received grants of RSUs in 2011 and 2012, and Mr. Pagliara received grants of RSUs in 2010, 2011 and 2012 (collectively, the "legacy performance-based RSUs" or "LRSUs"). These performance awards were segregated into four separate vesting installments, each of which was dependent upon the satisfaction of separate annual performance goals for each installment. For 2013, the performance goal was our annual operating income target under the short-term incentive plan. Because the performance goals are set each year, we consider each installment as a separate annual grant for purposes of reporting the
34
value of stock awards. The LRSUs listed below are allocated to the 2013 performance period and therefore were treated as granted in 2013.
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
All Other Stock Awards: Number of Shares of Stock or Units (3) (#) |
|
||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
Grant Date Fair Value of Stock Awards(4) ($) |
|||||||||||||||||||||||||||
Name
|
Grant Date | Approval Date |
Type of Award |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
||||||||||||||||||||||
Luis M. Ramírez |
|||||||||||||||||||||||||||||||
Short-Term Incentive Plan |
N/A | N/A | STI | 220,000 | 440,000 | 880,000 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan |
3/28/2013 | 3/28/2013 | TRSUs | 11,167 | 196,763 | ||||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | MRSUs | 5,583 | 11,166 | 22,332 | 241,521 | ||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | PRSUs | 5,584 | 11,167 | 22,334 | 196,763 | ||||||||||||||||||||||||
|
3/5/2013 | 7/1/2012 | LRSUs | 2,094 | 4,187 | 70,928 | (5) | ||||||||||||||||||||||||
Raymond K. Guba |
|
|
|
||||||||||||||||||||||||||||
Short-Term Incentive Plan |
N/A | N/A | STI | 64,000 | N/A | ||||||||||||||||||||||||||
2011 Equity Incentive Plan |
11/18/2013 | 11/18/2013 | TRSUs | 4,667 | 89,653 | ||||||||||||||||||||||||||
|
11/18/2013 | 11/18/2013 | MRSUs | 2,333 | 4,666 | 9,332 | 88,607 | ||||||||||||||||||||||||
|
11/18/2013 | 11/18/2013 | PRSUs | 2,334 | 4,667 | 9,334 | 89,653 | ||||||||||||||||||||||||
Penny Sherrod-Campanizzi |
|
|
|
||||||||||||||||||||||||||||
Short-Term Incentive Plan |
N/A | N/A | STI | 83,050 | 166,100 | 332,200 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan |
3/28/2013 | 3/28/2013 | TRSUs | 1,833 | 32,297 | ||||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | MRSUs | 917 | 1,833 | 3,666 | 39,648 | ||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | PRSUs | 917 | 1,834 | 3,668 | 32,315 | ||||||||||||||||||||||||
|
3/5/2013 | 3/22/2012 | LRSUs | 344 | 687 | 11,638 | (6) | ||||||||||||||||||||||||
|
3/5/2013 | 7/21/2011 | LRSUs | 344 | 687 | 11,638 | (6) | ||||||||||||||||||||||||
|
3/5/2013 | 3/14/2011 | LRSUs | 628 | 1,255 | 21,260 | (6) | ||||||||||||||||||||||||
Tracy D. Pagliara |
|
|
|
||||||||||||||||||||||||||||
Short-Term Incentive Plan |
N/A | N/A | STI | 87,099 | 174,199 | 348,398 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan |
3/28/2013 | 3/28/2013 | TRSUs | 3,000 | 52,860 | ||||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | MRSUs | 1,500 | 3,000 | 6,000 | 64,890 | ||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | PRSUs | 1,500 | 3,000 | 6,000 | 52,860 | ||||||||||||||||||||||||
|
3/5/2013 | 3/22/2012 | LRSUs | 563 | 1,125 | 19,058 | (6) | ||||||||||||||||||||||||
|
3/5/2013 | 7/21/2011 | LRSUs | 500 | 1,000 | 16,940 | (6) | ||||||||||||||||||||||||
2008 Management Incentive Plan |
3/5/2013 | 4/5/2010 | LRSUs | 2,083 | 4,166 | 70,572 | (6) | ||||||||||||||||||||||||
Melanie R. Barth |
|
|
|
||||||||||||||||||||||||||||
Short-Term Incentive Plan |
N/A | N/A | STI | 83,875 | 167,750 | 335,500 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan |
3/28/2013 | 3/28/2013 | TRSUs | 3,474 | 61,212 | ||||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | MRSUs | 1,737 | 3,474 | 6,948 | 75,143 | ||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | PRSUs | 1,738 | 3,475 | 6,950 | 61,230 | ||||||||||||||||||||||||
David L. Willis |
|
|
|
||||||||||||||||||||||||||||
Short-Term Incentive Plan |
N/A | N/A | STI | 99,710 | 199,420 | 398,840 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan |
3/28/2013 | 3/28/2013 | TRSUs | 3,667 | 64,613 | ||||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | MRSUs | 1,833 | 3,666 | 7,332 | 79,296 | ||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | PRSUs | 1,834 | 3,667 | 7,334 | 64,613 | ||||||||||||||||||||||||
|
11/15/2013 | 3/22/2012 | LRSUs | 2,750 | 26,414 | (6) | |||||||||||||||||||||||||
|
11/15/2013 | 3/22/2012 | LRSUs | 2,750 | 52,828 | (6) | |||||||||||||||||||||||||
|
11/15/2013 | 7/21/2011 | LRSUs | 625 | 1,250 | 24,013 | (6) | ||||||||||||||||||||||||
|
11/15/2013 | 7/21/2011 | LRSUs | 1,250 | 24,013 | (6) | |||||||||||||||||||||||||
2008 Management Incentive Plan |
3/5/2013 | 3/23/2010 | LRSUs | 3,472 | 6,944 | 117,631 | |||||||||||||||||||||||||
Dean J. Glover |
|
|
|
||||||||||||||||||||||||||||
Short-Term Incentive Plan |
N/A | N/A | STI | 103,976 | 207,951 | 415,903 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan |
3/28/2013 | 3/28/2013 | TRSUs | 3,667 | 64,613 | ||||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | MRSUs | 1,833 | 3,666 | 7,332 | 79,296 | ||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | PRSUs | 1,834 | 3,667 | 7,334 | 64,613 | ||||||||||||||||||||||||
|
9/20/2013 | 3/22/2012 | LRSUs | 688 | 1,375 | 26,991 | (6) | ||||||||||||||||||||||||
|
9/20/2013 | 3/22/2012 | LRSUs | 2,750 | 53,983 | (6) | |||||||||||||||||||||||||
|
9/20/2013 | 7/21/2011 | LRSUs | 500 | 1,000 | 19,630 | (6) | ||||||||||||||||||||||||
|
9/20/2013 | 7/21/2011 | LRSUs | 1,000 | 19,630 | (6) | |||||||||||||||||||||||||
2008 Management Incentive Plan |
3/22/2012 | 3/23/2010 | LRSUs | 2,083 | 4,166 | 70,572 | |||||||||||||||||||||||||
Kenneth W. Robuck |
|
|
|
||||||||||||||||||||||||||||
Short-Term Incentive Plan |
N/A | N/A | STI | 109,240 | 218,479 | 436,959 | N/A | ||||||||||||||||||||||||
2011 Equity Incentive Plan |
3/28/2013 | 3/28/2013 | TRSUs | 3,667 | 64,613 | (7) | |||||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | MRSUs | 1,833 | 3,666 | 7,332 | 79,296 | (7) | |||||||||||||||||||||||
|
3/28/2013 | 3/28/2013 | PRSUs | 1,834 | 3,667 | 7,334 | 64,613 | (7) | |||||||||||||||||||||||
|
3/5/2013 | 3/22/2012 | LRSUs | 688 | 1,375 | 23,293 | (7) | ||||||||||||||||||||||||
|
3/5/2013 | 7/21/2011 | LRSUs | 625 | 1,250 | 21,175 | (7) | ||||||||||||||||||||||||
2008 Management Incentive Plan |
3/5/2013 | 3/23/2010 | LRSUs | 2,778 | 5,555 | 94,102 | (7) |
35
above the "target" performance level. Dividends paid on the underlying shares during the performance and vesting period are accumulated and paid in cash upon vesting.
2013 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth information regarding each unvested RSU award held by each of our named executive officers as of December 31, 2013.
Name
|
Number of Shares or Units That Have Not Vested (#)(1)(4) |
Market Value of Shares or Units That Have Not Vested ($)(2) |
Equity Incentive Plan Awards: Number of Unearned Shares or Units That Have Not Vested (#)(3)(4) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units That Have Not Vested ($)(2) |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Luis M. Ramírez |
23,730 | 464,396 | 19,543 | 382,469 | |||||||||
Randy Guba |
4,667 | 91,333 | 4,667 | 91,333 | |||||||||
Penny Sherrod-Campanizzi |
7,783 | 152,313 | 5,150 | 100,786 | |||||||||
Tracy D. Pagliara |
12,542 | 245,447 | 6,250 | 122,313 | |||||||||
Melanie R. Barth |
3,474 | 67,986 | 3,475 | 68,006 | |||||||||
David L. Willis |
| | 1,079 | 21,178 | |||||||||
Dean J. Glover |
| | 915 | 17,959 | |||||||||
Kenneth W. Robuck |
| | | |
36
Name
|
March 31, 2014 |
March 31, 2015 |
March 31, 2016 |
|||||||
---|---|---|---|---|---|---|---|---|---|---|
Luis M. Ramírez |
7,910 | 12,098 | 23,265 | |||||||
Randy Guba |
1,556 | 1,556 | 6,222 | |||||||
Penny Sherrod-Campanizzi |
3,242 | 5,871 | 3,820 | |||||||
Tracy D. Pagliara |
7,292 | 5,250 | 6,250 | |||||||
Melanie R. Barth |
1,158 | 1,158 | 4,633 | |||||||
David L. Willis |
| | 1,079 | |||||||
Dean J. Glover |
| | 915 |
The following table sets forth certain information concerning the vesting of time-based and performance-based RSUs held by our named executive officers during 2013.
|
Stock Awards | ||||||
---|---|---|---|---|---|---|---|
Name
|
Number of Shares Acquired on Vesting (#)(1) |
Value Realized on Vesting ($)(2) |
|||||
Luis M. Ramírez |
8,374 | 147,550 | |||||
Penny Sherrod-Campanizzi |
5,261 | 92,699 | |||||
Tracy D. Pagliara |
12,583 | 221,712 | |||||
Melanie Barth(3) |
| | |||||
David L. Willis(4) |
64,712 | 1,185,090 | |||||
Dean J. Glover(5) |
50,781 | 948,291 | |||||
Kenneth W. Robuck |
32,561 | 573,725 |
37
Equity Compensation Plan Table
As of December 31, 2013
The following table provides information as of December 31, 2013 with respect to the shares of our Common Stock that may be issued under our existing equity compensation plans, plus certain non-stockholder approved plans.
Plan Category
|
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a)(1) |
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) |
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)(2)(3) |
|||||||
---|---|---|---|---|---|---|---|---|---|---|
Equity compensation plans approved by security holders |
292,598 | $ | | 601,342 | ||||||
Equity compensation plans not approved by security holders |
N/A | N/A | N/A | |||||||
| | | | | | | | | | |
Total |
292,598 | $ | | 601,342 | ||||||
| | | | | | | | | | |
| | | | | | | | | | |
Pension Benefits
We do not sponsor or maintain any pension plans for our named executive officers.
Non-qualified Deferred Compensation
We have not adopted any non-qualified deferred contribution plans or other deferred compensation plans.
38
ESTIMATED PAYMENTS UPON TERMINATION
OR RELATED TO A CHANGE IN CONTROL
The table below reflects the amount of incremental compensation to which each named executive officer would have been entitled as a consequence of certain terminations or in connection with a change in control. The amounts shown in the table below assume that such termination or change in control was effective as of December 31, 2013 and that the price of our Common Stock upon which certain of the calculations are made was the closing price of $19.57 per share on the last trading day of 2013. Because the incremental amount of payments to be made depends on several factors, the actual amounts to be paid out upon termination of employment or a change in control can only be determined at the time of the event. None of the payments set forth below would be grossed-up for taxes. The estimated payments upon termination and change in control are as follows:
Event(1)
|
Luis M. Ramírez |
Raymond Guba | Penny Sherrod- Campanizzi |
Melanie Barth | Tracy D. Pagliara |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Disability(2) |
||||||||||||||||
Annual Bonus |
88,000 | 64,000 | 133,686 | 32,050 | 36,894 | |||||||||||
Disability Benefit |
268,000 | 204,000 | 168,800 | 109,000 | 111,345 | |||||||||||
Accelerated Vesting of Restricted Stock Units |
309,597 | 60,902 | 126,863 | 45,344 | 285,389 | |||||||||||
| | | | | | | | | | | | | | | | |
Total: |
665,597 | 328,902 | 429,349 | 186,394 | 433,628 | |||||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Death(3) |
||||||||||||||||
Annual Bonus |
88,000 | 64,000 | 133,686 | 32,050 | 36,894 | |||||||||||
Accelerated Vesting of Restricted Stock Units |
309,597 | 60,902 | 126,863 | 45,344 | 285,389 | |||||||||||
| | | | | | | | | | | | | | | | |
Total: |
397,597 | 124,902 | 260,549 | 77,394 | 322,283 | |||||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Termination Without Cause(4) |
||||||||||||||||
Salary |
550,000 | 390,000 | 302,000 | 152,500 | 316,725 | |||||||||||
Annual Bonus |
88,000 | 64,000 | 133,686 | 32,050 | 36,894 | |||||||||||
Benefit Continuation |
990 | | | | | |||||||||||
Club Dues |
| | | | | |||||||||||
Legal Fees |
| | | | | |||||||||||
Consulting Fees |
| | | | | |||||||||||
Accelerated Vesting of Restricted Stock Units |
309,597 | 60,902 | 126,863 | 45,344 | 285,389 | |||||||||||
| | | | | | | | | | | | | | | | |
Total: |
948,587 | 514,902 | 562,549 | 229,894 | 639,008 | |||||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Termination for Good Reason(4) |
||||||||||||||||
Salary |
550,000 | 390,000 | 302,000 | 152,500 | 316,725 | |||||||||||
Annual Bonus |
88,000 | 64,000 | 133,686 | 32,050 | 36,894 | |||||||||||
Benefit Continuation |
990 | | | | | |||||||||||
Club Dues |
| | | | | |||||||||||
Accelerated Vesting of Restricted Stock Units |
309,597 | 60,902 | 126,863 | 45,344 | 285,389 | |||||||||||
| | | | | | | | | | | | | | | | |
Total: |
948,587 | 514,902 | 562,549 | 229,894 | 639,008 | |||||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Change in Control |
||||||||||||||||
Accelerated Vesting of Restricted Stock Units |
1,147,311 | 273,980 | 340,420 | 203,978 | 549,584 | |||||||||||
| | | | | | | | | | | | | | | | |
Total: |
1,147,311 | 273,980 | 340,420 | 203,978 | 549,584 | |||||||||||
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
39
The amounts shown in the table assume a December 31, 2013 termination and, therefore, include 100 percent of the annual incentive that would have been payable had the executive remained employed through the annual incentive payment date in 2014. The named executive officers generally are subject to restrictive covenants, such as confidentiality, non-solicitation and non-compete provisions.
We have granted restricted stock unit and restricted share unit awards to our executive officers pursuant to our 2008 Management Incentive Plan and our 2011 Equity Incentive Plan. The termination provisions of the award agreements are described below.
40
Definitions for Mr. Ramírez and Mr. Guba. "Cause" means: (i) the continued failure to perform duties or disregard of the directives of the Board; (ii) willful material misrepresentation; (iii) commission of any act of fraud, misappropriation or embezzlement; (iv) conviction, guilty plea or plea of nolo contendere for any crime involving dishonesty or for any felony; (v) a material breach of fiduciary duties of loyalty or care or a material violation of the Company's Code of Business Conduct and Ethics or any other Company policy; (vi) the engaging in illegal conduct, gross misconduct, gross insubordination or gross negligence that is materially and demonstrably injurious to the Company's business or financial condition; or (vii) a material breach by Executive of his representations under the employment agreement or his restrictive covenants. "Good Reason" means (i) a material reduction in title, duties, responsibilities or reporting relationship; (ii) a material reduction in base salary (other than certain across-the-board reductions) or target annual incentive opportunity; or (iii) with respect to Mr. Ramírez only, failure to initially appoint him as a member of the Board or thereafter to nominate him for re-election as a member of the Board.
Definitions for the Other Officers. "Cause" generally means: (i) a material breach of confidentiality, noncompetition or nonsolicitation covenants; (ii) commission of a felony or any crime involving theft, dishonesty or moral turpitude; (iii) commission of one or more acts or omissions that are willful and deliberate acts intended to harm or injure our business, operations, financial condition or reputation; (iv) disregard of the directives of our Board of Directors; (v) drunkenness or use of drugs that interferes with the performance of duties under the employment agreement; or (vi) any attempt to secure any personal profit in connection with our business without prior written approval by unanimous consent of our Board of Directors. For purposes of Mr. Pagliara's employment agreement, "good reason" means (i) a material diminution of duties, responsibilities or authority, or (ii) a material breach of our obligations under the employment agreement, in each case subject to notice requirements and cure provisions. For the other named executive officers, "good reason" generally means: (i) a material reduction in the annual base salary, employee benefits or percentage participation in our short-term incentive plan; (ii) subject to limited exceptions, a material modification to our short-term incentive plan that materially and adversely affects the determination of the officer's bonus; (iii) a requirement to be based at any office or location more than 50 miles from their principal place of employment; or (iv) a removal of the officer from the position specified in his employment agreement by action of the Board of Directors without cause and without the officer's consent.
Change in Control. A "change in control" generally means any of the following: (i) the acquisition of 50% or more of the voting stock of the Company, other than an acquisition by certain related parties or an acquisition pursuant to a transaction the primary purpose of which is to effect an equity financing of the Company; (ii) turnover of a majority of the incumbent members of our Board of Directors (other than the election of certain new directors whose election or nomination was approved by a majority of the incumbent Board of Directors); (iii) a reorganization, merger or consolidation, unless our stockholders immediately prior to the transaction own more than 50% of the Common Stock of the resulting corporation as a result of their prior ownership of the Common Stock of the Company; (iv) a complete liquidation or dissolution of the Company; or (v) the sale or other disposition of all or substantially all of the Company's assets (other than a sale or disposition to a subsidiary).
41
Severance for Messrs. Glover and Willis
On September 20, 2013, Mr. Glover entered into a separation agreement with the Company, under which he resigned from all positions at the Company effective as of September 30, 2013. Under the terms of the separation agreement, Mr. Glover received (i) one year of base salary and his pro-rated target short-term incentive; (ii) the cost of medical, dental, life insurance, travel/accident insurance for 12 months, and country club dues for 3 months; (iii) the restricted share units granted to him in 2010, 2011 and 2012 vested in full and without pro-ration; and (iv) the restricted share units granted to him in 2013 vested on a pro-rata basis (with performance-based and market-based RSUs payable based on actual performance through the end of December 31, 2015). In addition, Mr. Glover entered into a consulting agreement with the Company through October 31, 2013 in exchange for a retainer of $25,000.
On November 18, 2013, Mr. Willis entered into a separation agreement with the Company, under which he resigned from all positions at the Company effective as of November 18, 2013. Mr. Willis also received (i) one year of base salary and his pro-rated target short-term incentive; (ii) the cost of medical, dental, life insurance, travel/accident insurance for 12 months, and country club dues for 3 months; (iii) the restricted share units granted to him in 2010, 2011 and 2012 vested in full and without pro-ration; and (iv) the restricted share units granted to him in 2013 vested on a pro-rata basis (with performance-based and market-based RSUs payable based on actual performance through the end of December 31, 2015). In addition, Mr. Willis entered into a consulting agreement with the Company through December 31, 2013 in exchange for a monthly retainer of $12,784.
The following table quantifies the severance benefits provided to Messrs. Willis and Glover in connection with their separation from the Company.
Description of Payment/Benefit
|
Mr. Willis | Mr. Glover | |||||
---|---|---|---|---|---|---|---|
Severance paymentone year salary |
$ | 306,800 | $ | 320,000 | |||
Pro-rated 2013 short-term incentive |
$ | 199,420 | $ | 156,000 | |||
Cost of medical, dental, life, travel/accident insurance for 12 months, and country club dues for 3 months |
$ | 14,192 | $ | 14,303 | |||
Equity vesting(1) |
$ | 563,165 | $ | 450,222 | |||
Consulting fee |
$ | 17,898 | $ | 25,000 | |||
| | | | | | | |
Total |
$ | 1,101,475 | $ | 965,525 |
42
PROPOSAL NO. 3
ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, we included a stockholder vote on the frequency of future votes on named executive officer compensation in our 2011 proxy statement which was advisory and nonbinding. Our stockholders approved the frequency of future votes on the recommendation of our Board of Directors to hold future say-on-pay votes on an annual basis. The next stockholder vote on the frequency of future votes on named executive officer compensation will occur at our 2017 annual meeting of stockholders.
As a result, our stockholders are entitled to vote at the Annual Meeting to approve the compensation of our named executive officers (commonly referred to as a "say on pay" vote), as disclosed in this proxy statement. Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the stockholder vote on executive compensation is an advisory vote only, and it is not binding on the Company or the Board of Directors.
Since Global Power emerged from bankruptcy in January 2008, we have followed a compensation policy that has had the objectives of attracting and retaining talented individuals, motivating our executive team to achieve the Company's goals and objectives, and aligning the interests of our executives with those of our stockholders. As described in detail in "Executive CompensationCompensation Discussion and Analysis," we have sought to reward our named executive officers through an executive compensation program including base compensation that is competitive within our industry, short-term incentives conditioned upon the achievement of specific annual earnings goals, and long-term incentives conditioned upon the achievement of specific long-term financial, strategic and corporate objectives. As a result of these programs, we have been able to retain highly capable individuals in key Company positions, and retain others whose work is critical to the continued growth and success of our business. At the same time, we believe our programs do not encourage excessive risk-taking by management. The Board of Directors believes that our philosophy and practices have resulted in executive compensation decisions that are appropriate and that have benefited the Company over time.
For these reasons, the Board of Directors recommends that stockholders approve the compensation of the Company's executive officers as described in this proxy statement by approving the following advisory resolution:
RESOLVED, that the stockholders of Global Power Equipment Group Inc. (the "Company") approve, on an advisory basis, the compensation of the individuals identified in the Summary Compensation Table, as disclosed in the Company's 2014 proxy statement pursuant to the compensation disclosure rules of the SEC (which disclosure includes the Compensation Discussion and Analysis section, the compensation tables and the accompanying footnotes and narratives within the Executive Compensation section of the 2014 proxy statement).
Required Vote
The advisory vote regarding the compensation of the named executive officers described in this Proposal 3 will be approved if the votes cast in favor of the proposal exceed the votes cast against the proposal. Abstentions and broker non-votes will not be counted as having been voted for purposes of this proposal.
Because this vote is advisory, it will not be binding upon the Board of Directors. However, our Board values the opinions that our stockholders express in their votes and will take into account the outcome of the vote when and as it deems appropriate when making determinations regarding executive compensation.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR the approval of the compensation of the Company's named executive officers.
43
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Except as indicated otherwise, the following table sets forth certain information, as of March 6, 2014, regarding the beneficial ownership of our Common Stock by holders of greater than five percent of our Common Stock that have filed ownership reports with the SEC, each of our current directors, each of our named executive officers named in the Summary Compensation Table, and all of our directors and named executive officers as a group. Except as otherwise indicated, addresses are c/o Global Power Equipment Group Inc., 400 East Las Colinas Boulevard, Suite 400 Irving, Texas 75039.
|
Common Stock Beneficially Owned |
||||||
---|---|---|---|---|---|---|---|
Name of Beneficial Owner
|
Number of Shares (#) |
Percentage of Class (%)(1) |
|||||
Greater than Five Percent Holders: |
|||||||
Royce & Associates, LLC(2) |
1,883,905 | 11.0 | % | ||||
NSB Advisors LLC(3) |
1,548,564 | 9.0 | % | ||||
Wellington Management Company, LLP(4) |
1,133,170 | 6.6 | % | ||||
Zesiger Capital Group LLC(5) |
1,020,451 | 6.0 | % | ||||
PPM America Private Equity Fund LP(6) |
906,597 | 5.3 | % | ||||
Directors(7): |
|||||||
Carl Bartoli |
23,054 | * | |||||
Terence J. Cryan |
23,054 | * | |||||
Eugene I. Davis |
24,054 | * | |||||
Charles Macaluso |
24,054 | * | |||||
Michael E. Salvati |
9,342 | * | |||||
Frank E. Williams, Jr.(8) |
33,322 | * | |||||
Named Executive Officers: |
|||||||
Luis M. Ramírez |
18,181 | (9) | * | ||||
Raymond K. Guba |
1,556 | (10) | * | ||||
David L. Willis |
138,768 | (11) | * | ||||
Dean J. Glover |
154,394 | (12) | * | ||||
Kenneth W. Robuck |
101,565 | * | |||||
Tracy D. Pagliara |
46,711 | (13) | * | ||||
Penny Sherrod-Campanizzi |
12,553 | (14) | * | ||||
Melanie Barth |
1,158 | (15) | * | ||||
Directors and named executive officers as a group (14 persons)(16): |
611,766 |
(17) |
3.6 |
% |
44
investment power with respect to all shares shown as beneficially owned by that stockholder. We have omitted percentages of less than 1% from the table.
45
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that the Company's executive officers, directors and persons who own beneficially more than 10% percent of the Company's outstanding Common Stock, file reports of ownership and changes in ownership and furnish the Company with copies of all Section 16(a) reports so filed. Based solely on a review of these reports filed with the SEC and certain written representations furnished to the Company, the Company believes that its executive officers and directors complied with all applicable Section 16(a) filing requirements during 2013.
46
The Audit Committee operates under a written charter that the Board of Directors has adopted. The Audit Committee reviews the charter. The charter is available under the heading "Corporate Governance" in the Investor Relations section our website at http://www.globalpower.com/.
The Board of Directors has the ultimate authority for effective corporate governance, including the role of oversight of the management of our Company. The Audit Committee's purpose is to assist the Board of Directors in fulfilling its responsibilities by overseeing our accounting and financial reporting processes, the audits of our consolidated financial statements and the effectiveness of internal control over financial reporting, the independence, qualifications and performance of the independent registered public accounting firm engaged as our independent auditor, and the performance of our internal auditors.
The Audit Committee relies on the expertise and knowledge of management, the internal auditors and the independent auditor in carrying out its oversight responsibilities. Management is responsible for the preparation, presentation, and integrity of our consolidated financial statements, accounting and financial reporting principles, internal control over financial reporting and disclosure controls, and procedures designed to ensure compliance with accounting standards, applicable laws, and regulations. Management is responsible for objectively reviewing and evaluating the adequacy, effectiveness, and quality of our system of internal control. Our independent registered public accounting firm, BDO USA, LLP, is responsible for performing an independent audit of the consolidated financial statements and for expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States of America. Our independent registered public accounting firm is also responsible for expressing an opinion on the effectiveness of our internal control over financial reporting as of December 31, 2013.
During 2013, the Audit Committee fulfilled its duties and responsibilities generally as outlined in the charter. The Audit Committee held four (4) meetings in 2013. Specifically, the Committee, among other actions:
The Audit Committee has relied on management's representation that the Financial Statements have been prepared in conformity with generally accepted accounting principles and on the opinion of BDO USA, LLP included in their report on the Financial Statements. Based upon the aforementioned review, discussions and representations of BDO USA, LLP, and the unqualified audit opinion presented by BDO USA, LLP on the Financial Statements and effectiveness of internal control over financial reporting, the Audit Committee recommended to the Board of Directors that the Financial Statements be included in our Annual Report on Form 10-K for the year ended December 31, 2013 for filing with the SEC.
Submitted by the following members of the Audit Committee: | ||
Michael E. Salvati (Chair) Charles Macaluso Frank E. Williams, Jr. |
47
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Approval of Related Party Transactions
The Board of Directors has adopted a formal written policy governing the review and approval of related person transactions, which is posted under the heading "Corporate Governance" of the Investor Relations section of our website at http://www.globalpower.com/. For purposes of this policy, consistent with the Nasdaq rules, the terms "related person" and "transaction" are as defined in Item 404(a) of Regulation S-K under the Securities Act of 1933, as amended. The policy provides that each director, director nominee and executive officer shall promptly notify the Corporate Secretary of any transaction involving the Company and a related person. Such transaction will be presented to and reviewed by the Audit Committee for approval, ratification or such other action as may be appropriate. On an annual basis, the Audit Committee reviews any previously approved related party transaction that is continuing, as well as any related party transaction disclosed in response to our annual directors' and officers' questionnaire. The policy itself is annually reviewed and was last reviewed in March 2014.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 2013 were Messrs. Cryan, Bartoli, Williams and Davis. None of Messrs. Cryan, Bartoli, Williams, or Davis was at any time an officer or employee of the Company. None of our executive officers serve as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.
Annual Report
The Company will mail without charge, upon written request from any stockholder, a copy of our Annual Report on Form 10-K for the year ended December 31, 2013, including the financial statements, schedules and list of exhibits. Requests should be sent to Global Power Equipment Group Inc., 400 East Las Colinas Boulevard, Suite 400, Irving, Texas 75039, Attn: Investor Relations.
Delivery of Documents to Stockholders Sharing an Address
A number of brokers with account holders who are stockholders of the Company will be "householding" our proxy materials, including the Notice of Internet Availability of Proxy Materials. A single set of the proxy materials, including the Notice of Internet Availability of Proxy Materials, will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be "householding" communications to your address, "householding" will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in "householding" and would prefer to receive separate proxy materials, please notify your broker, direct a written request to Global Power Equipment Group Inc., 400 East Las Colinas Boulevard, Suite 400, Irving, Texas 75039, Attn: Secretary, or contact our Corporate Secretary by telephone at 1-214-574-2709 or by email at corporatesecretary@globalpower.com. Stockholders who currently receive multiple copies of the proxy materials at their address and would like to request "householding" of their communications should contact their broker.
Stockholder Proposals For 2015 Annual Meeting
In order to be included in the Company's proxy materials for the 2015 Annual Meeting of Stockholders, a stockholder proposal must be received in writing by the Company at 400 East Las Colinas Boulevard, Suite 400, Irving, Texas 75039 by no later than November 20, 2014, provided that
48
the 2015 annual meeting date is not advanced or delayed by more than 30 days, and otherwise comply with all requirements of the SEC for stockholder proposals.
In addition, the Company's bylaws provide that any stockholder who desires to nominate a person for election as a director or bring a proposal before an annual meeting must give timely written notice of such nomination or proposal to the Company's Secretary. To be timely, the notice must be delivered to the above address not less than 90 nor more than 120 calendar days prior to the anniversary of the preceding year's annual meeting. If the annual meeting date is advanced more than 30 days, or delayed by more than 30 days from the anniversary date of the preceding year's annual meeting, notice by the stockholder, to be timely, must be so delivered not later than the close of business on the 90th day prior to the annual meeting and the 10th day following the day on which notice of the date of such annual meeting is first given to the stockholders, and not earlier than the 120th day prior to such annual meeting. For our annual meeting to be held in 2015, a notice recommending a director candidate must be received no earlier than January 1, 2015 and no later than January 31, 2015, provided that the 2015 annual meeting date is not advanced or delayed by more than 30 days.
Any such stockholder's notice shall set forth:
A copy of the Company's bylaws is available upon request from the Company's Secretary and is available under the heading "Corporate Governance" of the Investor Relations section of our website at http://www.globalpower.com/.
49
The Board of Directors knows of no other matters to be presented for stockholder action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting or any adjournments or postponements thereof, the Board of Directors intends that the persons named in the proxies will vote upon such matters in accordance with their best judgment.
THE BOARD OF DIRECTORS
Irving,
Texas
March 20, 2014
Whether or not you plan to attend the Annual Meeting, please vote via the Internet by following the instructions on the Notice or, if you received printed copies of the proxy materials, by telephone by following the instructions on the enclosed proxy card or by completing, signing, dating and promptly returning the enclosed proxy card. You may revoke your vote by the Internet or telephone or your proxy at any time prior to the Annual Meeting. If you are the record holder of the shares and attend the Annual Meeting, you may change your proxy vote automatically by voting in person at the meeting.
Thank you for your attention to this matter. Your prompt response will greatly facilitate arrangements for the Annual Meeting.
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fi duciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized offi cer. GLOBAL POWER EQUIPMENT GROUP INC. M69405-P48616 GLOBAL POWER EQUIPMENT GROUP INC. 400 E. LAS COLINAS BLVD, STE #400 IRVING, TX 75039-5579 ATTN: CORPORATE SECRETARY 2. To ratify the appointment of BDO USA, LLP as the Company's independent registered public accounting fi rm for 2014; 3. To consider an advisory vote on the compensation of our named executive offi cers; and 4. To transact such other business as may properly come before the meeting or any adjournment thereof. ! ! ! 01) Luis Manuel Ramírez 02) Charles Macaluso 03) Carl Bartoli 04) Terence J. Cryan 05) Michael E. Salvati 06) Frank E. Williams, Jr. 1. Election of Directors 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. 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. 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. The Board of Directors recommends you vote FOR all nominees and FOR proposals 2, 3 and 4. ! ! ! ! ! ! For All Withhold All For All Except For Against Abstain To withhold authority to vote for any individual nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below. ! ! ! |
GLOBAL POWER EQUIPMENT GROUP INC. Annual Meeting of Stockholders May 1, 2014 9:00 AM This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Tracy D. Pagliara and Stuart Welburn, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of GLOBAL POWER EQUIPMENT GROUP INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of stockholders to be held at 9:00 AM, CDT on May 1, 2014, at 400 East Las Colinas Boulevard, Irving, TX 75039, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Form 10-K and Notice & Proxy Statement are available at www.proxyvote.com. Continued and to be signed on reverse side M69406-P48616 |