def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
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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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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Thor Industries, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
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THOR INDUSTRIES, INC.
419 West Pike Street Jackson Center, Ohio 45334-0629
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
December 8, 2009
The 2009 Annual Meeting of Stockholders of Thor Industries, Inc. (the Company) will be held at
230 Park Avenue, Suite 618, New York, N.Y., on December 8, 2009, at 1:00 p.m., local time, for the
purpose of considering and voting upon the following:
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the election of three directors; and |
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such other business as may properly come before the meeting or any adjournment of the meeting. |
Stockholders of record at the close of business on October 16, 2009 will be entitled to receive
notice of the meeting and to vote at the meeting. A list of such stockholders will be available for
examination by any stockholder for any purpose germane to the meeting, during normal business
hours, at the office of the Company for a period of ten days prior to the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN YOUR PROXY CARD AS SOON AS POSSIBLE.
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By Order of the Board of Directors,
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Walter L. Bennett |
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Executive Vice President, Chief Administrative
Officer and Secretary |
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October 30, 2009
THOR INDUSTRIES, INC.
419 West Pike Street Jackson Center, Ohio 45334-0629
Proxy Statement
This proxy statement is furnished in connection with the solicitation of proxies by the Board of
Directors of Thor Industries, Inc. (the Company) for use at the 2009 Annual Meeting of
Stockholders to be held at 230 Park Avenue, Suite 618, New York City, on December 8, 2009, at 1:00
p.m., local time (the Meeting), and any adjournment thereof. The cost of such solicitation is
being borne by the Company. This proxy statement and the accompanying form of proxy are being sent
to stockholders on or about October 30, 2009.
Representatives of Deloitte & Touche LLP, the Companys principal independent registered public
accounting firm, will be present at the Meeting, will have the opportunity to make a statement if
they desire to do so, and will be available to respond to any stockholder questions that may be
asked.
Voting by Stockholders
Stockholders may vote their shares by proxy in any of the following three ways:
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By Proxy Card: You may vote by signing and returning the enclosed proxy card. |
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By Internet: You may vote by Internet 24 hours a day through 12:00 p.m., ET, on
December 8, 2009 by following the instructions that are included on your enclosed proxy
card. If you vote by Internet, you do not need to return your proxy card. |
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By Telephone: You may vote by telephone 24 hours a day through 12:00 p.m. ET, on
December 8, 2009 by following the instructions that are included on your enclosed proxy
card. If you vote by telephone, you do not need to return your proxy card. |
A proxy submitted by mail that is properly executed, duly returned to the Company and not revoked
prior to the Meeting will be voted in accordance with the instructions contained therein. If no
instructions are given with respect to the proposals to be voted upon, proxies will be voted in
favor of such proposals. Each proxy may be revoked by a stockholder at any time until exercised by
giving written notice to the Secretary of the Company, by voting in person at the Meeting, or by
submitting a later-dated proxy by mail, Internet or telephone.
The Common Stock of the Company constitutes its only outstanding security entitled to vote on the
matters to be voted upon at the Meeting. Each share of Common Stock entitles the holder to one
vote. Only stockholders of record at the close of business on October 16, 2009 are entitled to
notice of and to vote at the Meeting or any adjournment thereof. As of that date, 55,440,924 shares
of Common Stock were outstanding. The presence, in person or by proxy, of the holders of a majority
of all the issued and outstanding Common Stock is necessary to constitute a quorum at the Meeting.
Abstentions and broker non-votes (i.e., shares held by a broker for its customers that are not
voted because the broker does not receive instructions from the customer or because the broker does
not have discretionary voting power with respect to the item under consideration) will be counted
as present for purposes of determining the presence or absence of a quorum for the transaction of
business.
In accordance with the By-laws of the Company and the Delaware General Corporation Law, a plurality
of the votes duly cast is required for the election of directors. Under the Delaware General
Corporation Law, although abstentions and broker non-votes are deemed to be present for the purpose
of determining whether a quorum is present at a meeting, abstentions and broker non-votes are not
deemed to be votes duly cast. As a result, abstentions and broker non-votes will not be included in
the tabulation of voting results with respect to Proposal #1 and therefore will have no impact on
the voting on such proposal.
A copy of the Companys annual report for the fiscal year ended July 31, 2009 (fiscal 2009) is
being sent to each stockholder of record. The Annual Report is not to be considered a part of this
proxy soliciting material.
1
Stockholders Sharing an Address
The Company will deliver only one annual report and proxy statement to multiple stockholders
sharing an address unless the Company has received contrary instructions from one or more of the
stockholders. The Company will undertake to deliver promptly, upon written or oral request, a
separate copy of the annual report and/or proxy statement to a stockholder at a shared address to
which a single copy of the annual report and proxy statement are delivered. A stockholder can
notify the Company either in writing or by phone that the stockholder wishes to receive a separate
copy of the annual report and/or proxy statement, or stockholders sharing an address can request
delivery of a single copy of the annual report and/or proxy statement if they are receiving
multiple copies, by contacting the Company at Thor Industries, Inc., 419 W. Pike St., Jackson
Center, OH 45334, Attention: Corporate Secretary or at (937) 596-6849.
Proposal #1 Election of Directors
The Companys By-laws provide that the Board of Directors may set the number of directors at no
less than one (1) and no more than fifteen (15). The Board of Directors of the Company currently
consists of seven directors who are divided into three classes. Wade F. B. Thompson and Jan H.
Suwinski currently serve as Class A directors; their terms expire in 2011. Peter B. Orthwein and
William C. Tomson currently serve as Class B directors; their terms expire in 2010. Neil D.
Chrisman, Alan Siegel and Geoffrey A. Thompson currently serve as Class C directors; their terms
expire on the date of the Meeting.
In accordance with the Certificate of Incorporation of the Company, as amended, Neil D. Chrisman,
Alan Siegel and Geoffrey A. Thompson have been nominated to stand for election as Class C
directors. The Companys Nominating and Corporate Governance Committee has proposed these
nominations. If elected, Messrs. Chrisman, Siegel and Thompson will serve on the board until the
annual meeting in 2012 and until their successors are duly elected and qualified.
The persons named in the enclosed proxy intend to vote FOR the election of the nominees listed
below. In the event that a nominee becomes unavailable for election (a situation the Companys
management does not now anticipate), the shares represented by proxies will be voted, unless
authority is withheld, for such other persons as may be designated by the Nominating and Corporate
Governance Committee.
The nominees, as set forth below, are now directors of the Company and have continuously served in
such capacity since their first election or appointment to the Board.
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First Year |
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Neil D. Chrisman
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72 |
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Retired Managing Director of J.P. Morgan & Co.
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1999 |
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Alan Siegel
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74 |
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Retired partner of Akin Gump Strauss Hauer & Feld LLP
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1983 |
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Geoffrey A. Thompson
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69 |
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Partner, Palisades Advisors, LLC
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2003 |
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THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE ABOVE NOMINEES.
Business Experience of Directors and Executive Officers
Wade F. B. Thompson, age 69, has been the President and Chief Executive Officer and a Director of
the Company since its founding in 1980. He currently serves as Chairman, President, Chief Executive
Officer and Director of the Company. Mr. Thompson is not related to Geoffrey A. Thompson.
Peter B. Orthwein, age 64, has served as Treasurer and a Director of the Company since its founding
in 1980 and as Vice Chairman since 1986.
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Christian G. Farman, age 50, has been with the Company since May 2008, serving as Senior Vice
President and Chief Financial Officer. Prior to joining the Company, Mr. Farman served as Chief
Financial Officer of Deutsch, a leading manufacturer of electrical connectors, from May 2006 to May
2007. From December 2003 to December 2005, Mr. Farman served as Chief Financial Officer of
Insituform Technologies, Inc., a NASDAQ listed infrastructure company, first as Vice President,
from December 2003 to January 2005, and then as Senior Vice President, from January 2005 to
December 2005. From February 2003 to April 2003, Mr. Farman served as Chief Operating Officer of
the National Audubon Society. Prior to that, from 1989 to 2001, Mr. Farman was employed by Vivendi
North America (previously Anjou International), a water treatment and environmental services
company, which he joined as Controller and was ultimately promoted to Executive Vice President and
Chief Financial Officer. Prior to Vivendi North America, he was employed as a senior audit manager
at Price Waterhouse (now known as PricewaterhouseCoopers LLP), where he worked from 1979 to 1989.
Mr. Farman is a Certified Public Accountant.
Walter L. Bennett, age 63, has been with the Company and its predecessor since July 1977 and
currently serves as Executive Vice President, Chief Administrative Officer and Secretary of the
Company. He became Vice President, Finance, of Airstream, Inc. in September 1980; Vice President,
Finance, of the Company in September 1983; Chief Administrative Officer/Secretary of the Company in
November 1985; Senior Vice President of the Company in February 1989; Chief Financial Officer of
the Company in March 1999 and Executive Vice President of the Company in January 2004.
Richard E. Riegel, III, age 43, has been with the Company since May 1998. Mr. Riegel was appointed
as Chief Operating Officer of the Company in October 2007 and from August 2005 to September 2007
served as Group President. From 1998 through April 2002, Mr. Riegel served as Vice President,
Corporate Development of the Company, and from April 2002 through August 2005, he served as
President and CEO of Airstream, Inc. Mr. Riegel is the son-in-law of Wade F. B. Thompson.
Neil D. Chrisman, age 72, who was appointed as a Director in July 1999, is a retired Managing
Director of J. P. Morgan & Co. Mr. Chrisman retired from J. P. Morgan in 1993.
Alan Siegel, age 74, who became a Director in September 1983, is a retired partner of the law firm
of Akin Gump Strauss Hauer & Feld LLP. Mr. Siegel is also the Chairman of the Board of Directors of
The Wet Seal, Inc. and a director of Ermenegildo Zegna Corporation.
Jan H. Suwinski, age 68, who was appointed as a Director in July 1999, has been a Professor of
Business Operations at the Samuel Curtis Johnson Graduate School of Management, Cornell University
since July 1996. From 1990 to 1996, Mr. Suwinski was Executive Vice President, Opto Electronics
Group at Corning, Incorporated and Chairman of Siecor, a Siemens/Corning joint venture. Mr.
Suwinski is a director of Tellabs, Inc. and ACI Worldwide, Inc.
Geoffrey A. Thompson, age 69, who was appointed as a Director in September 2003, has been a partner
at Palisades Advisors, LLC, a private equity firm, since January 2004. From 1998 to 2004, Mr.
Thompson served as an independent business consultant. From 1995 to 1998, he served as a principal
at Kohlberg & Company. He retired as Chief Executive Officer of Marine Midland Banks, Inc. in 1992.
Mr. Thompson is a director of Guardian Trust Company and Stoneleigh Partners Acquisition Corp. Mr.
Thompson is not related to Wade F. B. Thompson.
William C. Tomson, age 73, who became a Director in June 1988, is the Vice Chairman of Board
Member, Inc. Mr. Tomson has been with the firm since 1995. Board Member, Inc. publishes Bank
Director and Corporate Board Member magazines.
Executive officers serve at the discretion of the Company.
Board of Directors, Committees and Attendance at Meetings
The Board of Directors has the responsibility for establishing broad corporate policies and for the
overall management of the business of the Company. Members of the Board are kept informed of the
Companys performance by various reports sent to them at regular intervals by management, as well
as by operating and financial reports presented by management at Board meetings.
3
It is the Companys policy that directors attend all Board meetings and the annual meeting of
stockholders, unless excused by the Chairman. All elected directors were in attendance at the 2008
Annual Meeting of Stockholders.
The Board has three committees with the principal functions described below. The charters of each
of these committees are posted on our website at www.thorindustries.com and are available in print
to any stockholder who requests them.
Audit Committee
The Company has a separately-designated standing Audit Committee established in accordance with
section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the Exchange Act). The
principal functions of the Audit Committee are to recommend engagement of the Companys independent
public accountants and to maintain communications among the Board of Directors, such independent
public accountants and the Companys internal accounting staff with respect to accounting and
auditing procedures, the implementation of recommendations by such independent accountants, the
adequacy of the Companys internal controls and related matters. During fiscal 2009, the Audit
Committee had private meetings with the Chief Financial Officer, the Internal Audit Director and
the outside audit partners. The Board of Directors has determined that Geoffrey A. Thompson, a
member of the committee, is an audit committee financial expert as defined in Section 407 of the
Sarbanes-Oxley Act of 2002. A copy of the Audit Committee Charter, reviewed and approved on
October 1, 2009 by the Board of Directors, is attached to this Proxy Statement as Appendix
A.
Compensation Committee
The principal functions of the Compensation Committee are to establish and review executive
compensation policies and guiding principles; review and approve the compensation of the Chief
Executive Officer and the other executive officers of the Company; evaluate the design of
compensation and benefit programs for named executive officers; and review all components of
compensation for independent directors. The Compensation Committee also acts as administrator under
several of the Companys compensation and benefits plans, including the Companys 2006 Equity
Incentive Plan and the Companys Select Executive Incentive Plan, and oversees the Companys
Management Incentive Plan. In its capacity as administrator of the 2006 Equity Incentive Plan, the
Compensation Committee is authorized to grant options and restricted stock, determine which
employees and other individuals performing substantial service for the Company may be granted
options and/or restricted stock, and determine the rights and limitations attendant to options and
restricted stock granted under these plans. In its capacity as administrator under the Select
Executive Incentive Plan, the Compensation Committee awards supplemental deferred compensation to
eligible employees in amounts determined by the Committee.
Nominating and Corporate Governance Committee
The principal functions of the Nominating and Corporate Governance Committee are to address all
matters of corporate governance; evaluate qualifications and candidates for positions on the Board
of Directors; evaluate the performance of the Chief Executive Officer and the Board of Directors;
review succession plans and senior management performance; establish criteria for selecting new
directors, nominees for Board membership and the positions of Chairman and Chief Executive Officer;
and to determine whether a director should be invited to stand for re-election. The committee
evaluates candidates on, among other things, possession of such knowledge, experience, skills,
expertise and diversity as may enhance the Boards ability to manage and direct the affairs and
business of the Company, and as applicable, the satisfaction of any independence requirements
imposed by law, regulation, the NYSE and the Companys Corporate Governance Guidelines. The
Nominating and Corporate Governance Committee does not have a formal process for identifying
director candidates. A copy of the Companys Corporate Governance Guidelines is available on the
Companys website at www.thorindustries.com and is available in print to any stockholder who
requests it.
The Board does not consider stockholder nominations of director candidates because it believes that
this is not an efficient or effective means of identifying qualified individuals. In addition, the
Board has a long history of being able to attract and maintain a membership with the variety of
skills necessary to properly oversee the affairs of the Company.
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Membership of Committees
The following table summarizes the current membership of the Board of Directors and each of its
committees.
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Nominating |
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and |
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Corporate |
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Audit |
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Compensation |
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Governance |
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Committee |
Wade F. B. Thompson
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Chairman |
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Peter B. Orthwein
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Vice Chairman |
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Neil D. Chrisman
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Alan Siegel
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Chair |
Jan H. Suwinski
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Chair |
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Geoffrey A. Thompson
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Lead Director
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William C. Tomson
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Chair
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The Board of Directors has affirmatively determined, by resolution of the Board of Directors as a
whole, that the following directors have no direct or indirect material relationship with the
Company and satisfy the requirements to be considered independent in accordance with the rules of
the New York Stock Exchange and the Companys Director Independence Standards which are set forth
on Appendix B to this Proxy Statement: Messrs. Neil D. Chrisman, Alan Siegel, Jan H.
Suwinski, Geoffrey A. Thompson and William C. Tomson. As a result, each of the Audit Committee, the
Compensation Committee and the Nominating and Corporate Governance Committee is comprised entirely
of independent directors, as determined by the Board.
Before the Board made the independence determination described in the previous paragraph, Mr.
Siegel and Mr. Wade F. B. Thompson advised the Board that Mr. Siegel has been named as a
co-executor and co-trustee under Mr. Thompsons will and trusts. In the event Mr. Siegel serves in
those capacities he will be entitled to the fees and expense reimbursement provided in those
documents. The Board concluded that the designation of Mr. Siegel as co-executor and co-trustee
under Mr. Thompsons will and trusts does not impair Mr. Siegels ability to exercise independent
judgment from management and is not material to the company or its management.
Board and Committee Meetings
The Board of Directors as a whole met in person, by telephone or took action by unanimous written
consent 11 times during fiscal 2009. The Audit Committee met in person or by telephone 8 times
during fiscal 2009. The Compensation Committee met in person or by telephone 5 times during fiscal
2009. The Nominating and Corporate Governance Committee met in person or by telephone 4 times in
fiscal 2009.
Each of the directors attended all meetings of the Board of Directors and the respective Board
committees on which they served during fiscal 2009.
In addition, regularly scheduled meetings of the non-management directors are held four times each
year. A non-management director is chosen to preside at these meetings.
Stockholder Communications
Although the Company has not to date developed formal processes by which stockholders may
communicate directly to directors, it believes that the informal process, pursuant to which any
communication sent to the Board of Directors in care of the Company is forwarded to the Board, has
served the Boards and its stockholders needs. Until any other procedures are developed, any
communications to the Board should be sent to it in care of the Secretary of the Company.
Any communications from interested parties directed toward non-management directors specifically
may be sent to Alan Siegel, one of the Companys non-management directors, who forwards any such
communications to each of the other non-management directors that, in the opinion of Mr. Siegel,
deal
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with the functions of the Board of Directors or the committees thereof or that he otherwise
determines require their attention. Mr. Siegels address for this purpose is c/o Thor Industries,
Inc., 419 West Pike St., Jackson Center, OH 45334.
Code of Ethics
The Company has adopted a written code of ethics, the Thor Industries, Inc. Business Ethics
Policy, which is applicable to all directors, officers and employees of the Company, including the
Companys principal executive officer, principal financial officer, principal accounting officer or
controller and other executive officers identified in this proxy statement who perform similar
functions (collectively, the Selected Officers). A copy of the code of ethics has been posted on
the Companys website and is available in print to any stockholder who requests it. The Company
intends to disclose any changes in or waivers from its code of ethics applicable to any Selected
Officer on its website or by filing a Form 8-K with the Securities and Exchange Commission.
Ownership of Common Stock
The following table sets forth information as of September 1, 2009 with respect to the beneficial
ownership, as defined in Rule 13(d) under the Exchange Act, of the Companys Common Stock by (i)
each person known by the Company to beneficially own, as defined in Rule 13d-3 under the Exchange
Act, 5% or more of the outstanding Common Stock; (ii) each director of the Company; (iii) each
executive officer of the Company named in the Summary Compensation Table below; and (iv) all
executive officers and directors of the Company as a group. As of September 1, 2009, there were
55,440,924 shares of Common Stock issued and outstanding.
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Beneficial Ownership (1) |
Name and Address of Beneficial Owner |
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Percent |
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Wade F. B. Thompson |
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28.4 |
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419 West Pike Street |
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Peter B. Orthwein |
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2,505,450 |
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4.5 |
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419 West Pike Street |
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Richard E. Riegel, III |
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582,457 |
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419 West Pike Street |
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Christian G. Farman |
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33,333 |
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419 West Pike Street |
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Jackson Center, Ohio 45334-0629 |
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Walter L. Bennett |
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18,225 |
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* |
419 West Pike Street |
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Jackson Center, Ohio 45334-0629 |
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Neil D. Chrisman |
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33,000 |
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419 West Pike Street |
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Jackson Center, Ohio 45334-0629 |
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Alan Siegel |
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2,000 |
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* |
419 West Pike Street |
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Jackson Center, Ohio 45334-0629 |
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Jan H. Suwinski |
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53,000 |
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* |
419 West Pike Street |
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Jackson Center, Ohio 45334-0629 |
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Geoffrey A. Thompson |
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17,400 |
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419 West Pike Street |
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Jackson Center, Ohio 45334-0629 |
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William C. Tomson |
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64,000 |
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419 West Pike Street |
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Royce & Associates, LLC |
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7,095,222 |
(12) |
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12.8 |
% |
82 Devonshire Street |
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Boston, MA 02109 |
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|
|
|
|
|
|
|
|
|
|
|
Artisan Partners Holdings LP |
|
|
2,972,450 |
(13) |
|
|
5.4 |
% |
875 East Wisconsin Avenue, Suite 8W |
|
|
|
|
|
|
|
|
Milwaukee, WI 53202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (ten persons) |
|
|
19,062,335 |
(14) |
|
|
34.2 |
% |
7
|
|
|
* |
|
less than 1%. |
|
(1) |
|
Except as otherwise indicated, the persons in the table have sole voting and
investment power with respect to all shares of Common Stock shown as beneficially
owned by them. |
|
(2) |
|
Excludes 550,000 shares held by a trust established for the benefit of Mr.
Thompsons family members. |
|
(3) |
|
Includes 61,350 shares owned by Mr. Orthweins wife, 124,000 shares owned of
record by a trust for the benefit of Mr. Orthweins children, of which Mr.
Orthwein is a trustee, 30,000 shares owned of record by a trust for the benefit
of Mr. Orthweins half brother, of which Mr. Orthwein is a trustee, 104,700
shares of record owned by Mr. Orthweins minor children for which Mrs. Orthwein
acts as custodian, 320,000 shares owned of record by the Orthwein Investment
Group D, L.P., in which Mr. Orthwein has a 0.51% economic interest but a 51%
general partnership interest, 122,500 shares held by a charitable annuity trust
of which Mr. and Mrs. Orthwein are the sole trustees, and 299,700 shares held in
a trust of which Mr. Orthwein is sole trustee for his three youngest children as
beneficiaries. |
|
(4) |
|
Includes 600 non-vested restricted shares issued under the Restricted Stock Plan,
options to acquire 28,000 shares issued under the 1999 Stock Option Plan and
options to acquire 33,333 shares issued under the Thor Industries, Inc. 2006
Stock Equity Incentive Plan which are currently exercisable or will become
exercisable within 60 days from September 1, 2009. Also includes 508,212 shares
owned by Mr. Riegels wife, and 4,900 shares of record owned by Mr. Riegels
minor children for whom Mr. Riegel acts as custodian. |
|
(5) |
|
Includes options to acquire 33,333 shares issued under the 2006 Stock Equity
Incentive Plan which are currently exercisable or will become exercisable within
60 days from September 1, 2009. |
|
(6) |
|
Includes 1,000 non-vested restricted shares issued under the Restricted Stock
Plan and options to acquire 15,225 shares issued under the 1999 Stock Option
Plan. |
|
(7) |
|
Includes options to acquire 25,000 shares issued under the 1999 Stock Option Plan. |
|
(8) |
|
Includes options to acquire 2,000 shares issued under the 1999 Stock Option Plan. |
|
(9) |
|
Includes options to acquire 43,000 shares issued under the 1999 Stock Option Plan. |
|
(10) |
|
Includes options to acquire 15,000 shares issued under the 1999 Stock Option Plan. |
|
(11) |
|
Includes options to acquire 45,000 shares issued under the 1999 Stock Option Plan. |
|
(12) |
|
The number of shares shown for Royce & Associates, LLC is based on a Schedule 13G
filed on January 30, 2009. |
|
(13) |
|
The number of shares shown for Artisan Partners Holdings LP is based on a
Schedule 13G/A on August 7, 2009. |
|
(14) |
|
Includes 239,891 shares issuable under stock options which are currently
exercisable or will become exercisable within 60 days from September 1, 2009. |
8
Compensation Discussion and Analysis
The following Compensation Discussion and Analysis provides information regarding the objectives
and elements of our compensation philosophy, policies and practices with respect to the
compensation of our named executive officers who appear in the Summary Compensation Table below.
Named Executive Officers
For fiscal 2009, our named executive officers and their respective titles are as follows:
|
|
|
Wade F. B. Thompson, Chief Executive Officer, Chairman and President |
|
|
|
|
Christian G. Farman, Senior Vice President and Chief Financial Officer |
|
|
|
|
Peter B. Orthwein, Vice Chairman and Treasurer |
|
|
|
|
Richard E. Riegel, III, Chief Operating Officer |
|
|
|
|
Walter L. Bennett, Executive Vice President, Chief Administrative Officer and
Secretary |
Messrs. Thompson and Farman are included as our named executive officers for fiscal 2009 based on
their positions as our Chief Executive Officer and Chief Financial Officer, respectively, and
Messrs. Orthwein, Riegel and Bennett are included based on their status as our three most highly
compensated executive officers as of the end of fiscal 2009, other than our Chief Executive Officer
and Chief Financial Officer.
Our Compensation Philosophy and Objectives
Our compensation structure focuses on cash compensation tied to current performance. We have
focused on cash compensation because we believe it has been the most important factor underlying
our success in attracting, motivating and retaining executive officers and other management
throughout our 30 year history. We expect our emphasis on cash compensation to continue in the
future. Although we do not generally award long-term incentive compensation to our executive
officers, we consider providing long-term incentive compensation, including equity awards under our
2006 Equity Incentive Plan, to the extent we believe that it will help us to attract, motivate or
retain particular individuals more so than cash compensation.
Our company consists of a corporate parent, Thor Industries, Inc., and several operating
subsidiaries. Executive officers of the corporate parent historically have received a majority of
their compensation in the form of cash bonuses based on the profitability of our company. In
particular, Messrs. Wade F. B. Thompson and Peter B. Orthwein receive low fixed salaries in
addition to discretionary cash bonuses relating to the profitability of our company, which are
reviewed and approved by our Compensation Committee.
The management of each operating subsidiary is provided with incentive based cash compensation
through our Management Incentive Plan (MIP), which provides for a bonus pool equal to a
percentage of the operating subsidiarys pre-tax profits in excess of a threshold established by
our Chief Executive Officer. Pre-tax profits of an operating subsidiary are determined by
reference to the income statement of the operating subsidiary after deducting an interest factor
based on the amount of capital, if any, utilized by the operating subsidiary during the relevant
measuring period. We believe that we have been successful in attracting, motivating and retaining
management of our operating subsidiaries in large part due to our policy of providing cash
compensation based upon the profitability of our operating subsidiaries.
For management of our operating subsidiaries and executive officers of the corporate parent,
pre-tax profits has been chosen as the relevant performance measure because it is a key metric used
by management to direct and measure our business performance. Moreover, we believe that pre-tax
profits measures are clearly understood by both our employees and stockholders and that incremental
growth in
9
pre-tax profits leads to the creation of long-term stockholder value. Therefore, our performance
compensation programs historically have used pre-tax profits as a performance measure for
determining bonuses.
Our Compensation Committee has ultimate responsibility for overseeing all forms of compensation for
our named executive officers.
Elements of Compensation for Named Executive Officers
There are three basic elements of our executive compensation program for our named executive
officers, which are base salary, bonuses and other compensation and benefits. Historically, we have
not entered into employment agreements with our named executive officers. However, we entered into
an employment offer letter with Mr. Farman in May 2008 as an inducement to join our company.
Base Salary
Most of our named executive officers receive low base salaries relative to their bonuses,
reflecting our philosophy that short-term compensation should be based primarily on performance.
Base salaries of named executive officers are typically not adjusted except in connection with
promotions. Notwithstanding the foregoing, for fiscal 2008, Mr. Bennett, then our Chief Financial
Officer, received a one-time base salary increase, from $100,000 to $500,000, with the expectation
that his annual bonus would be reduced by a similar amount. This one-time adjustment reflected the
determination by our Chief Executive Officer and Compensation Committee that a smaller portion of
the total compensation of our finance executives should be tied to profitability going forward in
order to discourage excessive risk taking by those individuals. For the same reason, the base
salary of Mr. Farman, our current Chief Financial Officer, was set at $500,000 when he joined our
company in May 2008. In addition, Mr. Orthweins base salary was increased to $270,000 in December
2007 to better align the compensation packages of our Chairman and Vice Chairman.
During the first quarter of fiscal 2009, the following named executive officers volunteered to
reduce their base salaries for the remainder of fiscal 2009 as follows: (i) Mr. Thompson declined
to take any base salary for the remainder of fiscal 2009, (ii) Mr. Orthwein volunteered to reduce
his base salary by 15% from $270,000 to $229,500 for the remainder of fiscal 2009 and (iii) Mr.
Bennett volunteered to reduce his base salary by 20% from $500,000 to $400,000 for the remainder of
fiscal 2009. These decisions were made in light of the decline in our performance due to market
conditions.
Bonuses
Messrs. Thompsons and Orthweins bonuses take into account our profitability but are
discretionary; no formulas are used. For Messrs. Thompson and Orthwein, toward the end of each
fiscal year when profitability for the fiscal year can be reasonably estimated, our Chief Executive
Officer recommends to our Compensation Committee bonus amounts to be paid to himself and Mr.
Orthwein in recognition of their contributions to our company for the current fiscal year with due
regard to our profitability as a whole. In approving the bonus amounts for those named executive
officers, our Compensation Committee considers the reasonableness of the recommended bonus amounts
in relation to compensation paid to similarly situated executives in peer and comparably sized
companies. In drawing comparisons against peer and other companies, members of the Compensation
Committee individually and informally consult various publicly available sources, including
publicly available information from the SECs EDGAR database. While our Compensation Committee has
a general understanding of the compensation practices of other similarly situated companies and
does consider general marketplace information when making compensation decisions, we have not, to
date, felt it necessary to utilize the services of a compensation consultant or to do any formal
benchmarking. The bonus amounts historically requested for and paid to Messrs. Thompson and
Orthwein have been well below market based on our Compensation Committees informal review of
compensation paid to the top executives at peer and comparably sized companies.
10
For fiscal 2009 and 2008, Messrs. Thompson and Orthwein declined annual bonuses due to the decline
in our profits, resulting from market conditions.
For fiscal 2009, Mr. Bennett received a bonus of $50,000 on a discretionary, non-formula basis.
Mr. Riegels bonus for fiscal 2009 consisted of a guaranteed bonus of $75,000 per quarter, which
was a product of individual negotiations, plus an additional discretionary amount equal to
$275,000.
Pursuant to Mr. Farmans employment offer letter, Mr. Farman was eligible to receive an annual
discretionary bonus of up to $300,000 for fiscal 2009 based on his individual performance and our
overall performance. Mr. Farman received a bonus of $172,375 for fiscal 2009. Of this amount,
$12,375 was a performance award under our 2008 Annual Incentive Plan, calculated based on 0.15% of
our consolidated pre-tax profits for the first quarter of fiscal 2009. Mr. Farman was the only
named executive officer who received an award under our 2008 Annual Incentive Plan for fiscal 2009.
Bonuses for Messrs. Bennett, Riegel and Farman are approved and paid on a quarterly basis. For each
fiscal quarter, either following the completion of the quarter when profitability for the quarter
can be reasonably estimated or prior to (in general) the commencement of the quarter, in the case
of bonuses paid pursuant to the 2008 Annual Incentive Plan, our Chief Executive Officer recommends
to our Compensation Committee bonus amounts or, in the case of awards under the 2008 Annual
Incentive Plan, performance awards for the quarter. In approving the bonus amounts or performance
awards for these named executive officers, our Compensation Committee considers our overall
performance during the quarter and/or year to date, projected profits for the current year, the
individual performance of the executive and the reasonableness of the recommended bonus amounts in
relation to compensation paid to similarly situated executives in peer and comparably sized
companies. In drawing comparisons against peer and other companies, members of our Compensation
Committee individually and informally consult various publicly available sources, including
publicly available information from the SECs EDGAR database. While our Compensation Committee has
a general understanding of the compensation practices of other similarly situated companies and
does consider general marketplace information when making compensation decisions, we have not, to
date, felt it necessary to utilize the services of a compensation consultant or to do any formal
benchmarking.
Other Benefits
A limited number of additional benefits are also provided to our executive officers, including our
named executive officers, as part of our compensation package because we believe that it is
customary to provide such benefits or otherwise in our best interest to do so. In providing such
benefits, both the Chief Executive Officer and the Compensation Committee have determined that
these elements are appropriate for the attraction, motivation and retention of executive talent.
In this regard, we have established the Thor Industries, Inc. Deferred Compensation Plan for
executives who may be impacted by the compensation limits that restrict participation in our
qualified 401(k) plan. This plan allows executives to defer on a pre-tax basis a portion of their
compensation and to have the funds deemed invested in certain mutual fund investments selected by
us. When the deferred amounts are paid, executives receive the amount they invested plus any gains
or losses based on the performance of the investments.
We also grant long-term cash awards to certain named executive officers under our Select Executive
Incentive Plan, or SEIP. No named executive officer received an award under the SEIP during 2009.
The purpose of the plan was to provide eligible executives with supplemental deferred compensation
in addition to current bonus compensation. Awards were determined at the sole discretion of our
Compensation Committee upon the recommendation of our Chief Executive Officer. The amount(s)
credited to the account of an eligible executive generally vest following the completion of the
executives sixth year of participation in the plan. Historically, amounts awarded to named
executive officers under this plan have represented a small percent of the total annual
compensation of such officers. We terminated the Select Executive Incentive Plan effective
February 27, 2009 due to the low participation rate and the ongoing costs of maintaining the plan.
As a result of the termination, all participants in the
11
SEIP immediately vested in their awards and will be paid on March 31, 2010 or earlier in accordance
with the terms of the SEIP.
Long-term Incentive Compensation
Although we have not generally awarded long-term incentive compensation to our executive officers,
including our named executive officers, in recent years including fiscal 2009, we consider
providing long-term incentive compensation, including equity awards, to the extent we believe it
will help us to attract, motivate or retain particular individuals more so than cash compensation.
In this regard, to induce Mr. Farman to join our company in May 2008, we granted Mr. Farman options
to acquire 100,000 shares of common stock. We also granted Mr. Riegel options to acquire 100,000
shares of common stock in May 2008 to better align the compensation packages of our Chief Operating
Officer and Chief Financial Officer.
Several of our executive officers, including Messrs. Thompson and Orthwein, already own significant
amounts of our common stock, and, as a result, the Compensation Committee believes that the
financial interests of these executives are already aligned with those of our stockholders. The
Compensation Committee therefore believes there would be little incremental value in providing
these officers with additional equity.
Severance and Change-in-Control Benefits
We do not typically enter into employment or other agreements with our named executive officers
with provisions regarding severance or change-in-control benefits nor do we maintain a severance
plan or policy for our employees. The absence of these benefits reflects our emphasis on cash
compensation for current performance as opposed to other forms of compensation. Notwithstanding
the foregoing, when Mr. Farman joined our company in May 2008, pursuant to the terms of an
employment offer letter and as an inducement to join our company, we agreed to pay Mr. Farman
severance equal to nine months of Mr. Farmans base salary in the event Mr. Farman is terminated
for reasons other than cause. Mr. Farman is our only named executive officer who is eligible to
receive severance benefits.
Certain of our benefit plans include severance and change-in-control protections for plan
participants. For example, our 1999 Stock Option Plan and 2006 Equity Incentive Plan each specify
that upon the occurrence of a change-in-control, all options will automatically become vested and
exercisable in full and all restrictions or conditions, if any, on any options will automatically
lapse. Under our Restricted Stock Plan, restricted shares automatically vest upon (x) the
termination of the holders service other than for cause and (y) the holders death, disability or
retirement. These types of provisions are designed to ensure that plan participants receive the
benefits of prior plan awards in the event that a change-in-control occurs or they are terminated
other than for cause since these events are largely or entirely out of their control.
The aggregate value of change-in-control and termination benefits for each named executive officer
is summarized below under the subheading, Potential Payments Upon Termination or
Change-in-Control below.
Tax Deductibility
Section 162(m) of the Code denies a federal income tax deduction for certain compensation in excess
of $1 million per year paid to the chief executive officer and the three other most highly-paid
executive officers (other than the Companys chief executive officer and chief financial officer)
of a publicly-traded corporation. Certain types of compensation, including compensation based on
performance criteria that are approved in advance by shareholders, are excluded from the deduction
limit. Our Compensation Committees policy is to qualify compensation paid to our executive
officers for deductibility for federal income tax purposes to the extent it believes it is
practical and in our best interests and the best interests of our stockholders. However, to retain
highly skilled executives and remain competitive with other employers, our Compensation Committee
has the right to authorize compensation that would not otherwise be deductible under Section 162(m)
or otherwise.
12
Compensation Committee Report
We, the Compensation Committee of the Board of Directors of Thor Industries, Inc., have reviewed
and discussed the Compensation Discussion and Analysis contained in this proxy statement with
management. Based on such review and discussion, we have recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in this proxy statement and in Thor
Industries, Inc.s Annual Report on Form 10-K for the fiscal year ended July 31, 2009.
The Compensation Committee
William C. Tomson
Geoffrey A. Thompson
13
Summary Compensation Table
The following Summary Compensation Table summarizes the total compensation awarded to our named
executive officers in fiscal 2009, fiscal 2008 and fiscal 2007.
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
Nonqualified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
Deferred |
|
All Other |
|
|
Name and |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share |
|
Option |
|
Plan |
|
Compensation |
|
Compen- |
|
|
Principal |
|
|
|
|
|
Salary |
|
Bonus |
|
Awards |
|
Awards |
|
Compensation |
|
Earnings |
|
sation |
|
Total |
Position |
|
Year |
|
($) |
|
($)(2) |
|
($)(3) |
|
($)(4) |
|
($) |
|
($) |
|
($) |
|
($) |
Wade F. B.
Thompson, Chief
Executive Officer, |
|
|
2009 |
|
|
|
-0- |
(1) |
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
Chairman and |
|
|
2008 |
|
|
|
270,000 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
270,000 |
|
President |
|
|
2007 |
|
|
|
270,000 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
270,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christian G.
Farman, Senior Vice
President |
|
|
2009 |
|
|
|
500,000 |
|
|
|
160,000 |
|
|
|
-0- |
|
|
|
292,976 |
|
|
|
12,375 |
(6) |
|
|
-0- |
|
|
|
-0- |
|
|
|
965,351 |
|
and Chief |
|
|
2008 |
|
|
|
115,835 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
54,409 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
170,244 |
|
Financial
Officer (5) |
|
|
2007 |
|
|
NA |
|
NA |
|
NA |
|
NA |
|
NA |
|
NA |
|
NA |
|
NA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter B. Orthwein, |
|
|
2009 |
|
|
|
235,991 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
235,991 |
|
Vice Chairman and |
|
|
2008 |
|
|
|
204,618 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
204,618 |
|
Treasurer |
|
|
2007 |
|
|
|
100,000 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
100,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard E.
Riegel, III, |
|
|
2009 |
|
|
|
100,500 |
|
|
|
575,000 |
|
|
|
6,160 |
|
|
|
295,549 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
294 |
(7) |
|
|
977,503 |
|
Chief |
|
|
2008 |
|
|
|
100,500 |
|
|
|
360,000 |
|
|
|
7,429 |
|
|
|
36,943 |
|
|
|
477,040 |
|
|
|
-0- |
|
|
|
20,744 |
(7) |
|
|
1,002,656 |
|
Operating Officer |
|
|
2007 |
|
|
|
100,500 |
|
|
|
900,000 |
|
|
|
15,668 |
|
|
|
9,824 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
23,006 |
(7) |
|
|
1,048,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Walter L. Bennett,
Executive Vice
President, Chief
Administrative |
|
|
2009 |
|
|
|
419,231 |
|
|
|
50,000 |
|
|
|
10,267 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
490 |
(8) |
|
|
479,988 |
|
Officer and |
|
|
2008 |
|
|
|
500,000 |
|
|
|
150,000 |
|
|
|
14,463 |
|
|
|
-0- |
|
|
|
198,850 |
|
|
|
-0- |
|
|
|
34,260 |
(8) |
|
|
897,573 |
|
Secretary |
|
|
2007 |
|
|
|
100,000 |
|
|
|
900,000 |
|
|
|
35,224 |
|
|
|
14,034 |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
41,485 |
(8) |
|
|
1,090,743 |
|
|
|
|
(1) |
|
Mr. Thompson elected to forego payment of base salary in fiscal 2009 due to the decline in
our performance due to market conditions. He was not provided with any equity or non-cash
compensation in exchange for his decision to forego his base salary. |
|
(2) |
|
For fiscal 2009, the amounts in this column reflect the payment of guaranteed bonuses of
$75,000 per quarter to Mr. Riegel (totaling $300,000) and discretionary bonuses to all of the
named executive officers as more fully described in Compensation Discussion and Analysis
above. |
|
(3) |
|
All share awards were granted under our Restricted Stock Plan which we describe below. We
account for the plan under SFAS No. 123R Share Based Payments. The values reported in the
Share Awards column are the amounts we expensed during fiscal 2007, fiscal 2008 and fiscal
2009 for each named executive officers share award. All share awards are expensed on a pro
rata basis over the six year vesting period for the awards. The amounts included in this
column include expenses related to share awards issued prior to fiscal 2007. |
|
(4) |
|
All stock options were granted under our 1999 Stock Option Plan or our 2006 Equity Incentive
Plan. We account for these plans under SFAS No. 123R Share Based Payments. The values
reported in the Option Awards column are the amounts we expensed during fiscal 2007, fiscal
2008 and fiscal 2009 for each named executive officers stock options. All option awards are
expensed ratably over
their three year vesting period. The amounts included in this column include expenses related
to option awards granted in fiscal 2008 and in earlier years. |
14
|
|
|
(5) |
|
Mr. Farman was hired in May 2008. The base salary shown for Mr. Farman for fiscal year 2008
reflects the amount paid to Mr. Farman in base salary from the date Mr. Farman joined our
company through the end of fiscal 2008. Mr. Farmans annual base salary for fiscal 2008 was
$500,000. |
|
(6) |
|
This amount reflects a bonus paid to Mr. Farman pursuant to our 2008 Annual Incentive Plan
with respect to the first quarter of fiscal 2009 based on the achievement of a pre-established
performance goal relating to our pre-tax profits. Mr. Farmans bonus was equal to 0.15% of
our consolidated pre-tax profits for that quarter. |
|
(7) |
|
Consists of $12,500 and $12,500 credited to Mr. Riegel under our Select Executive Incentive
Plan for 2008 and 2007, respectively, and $294, $8,244 and $10,506 of dividends paid to Mr.
Riegel in respect of restricted stock awards held by Mr. Riegel for 2009, 2008 and 2007
respectively. |
|
(8) |
|
Consists of $15,000 and $15,000 credited to Mr. Bennett under our Select Executive Incentive
Plan for 2008 and 2007, respectively, and $490, $19,260 and $26,485 of dividends paid to Mr.
Bennett in respect of restricted stock awards held by Mr. Bennett for 2009, 2008 and 2007
respectively. |
Grants of Plan-Based Awards for Fiscal 2009
The following table sets forth the non-equity incentive plan award granted to Mr. Farman in fiscal
2009. None of our named executive officers were granted option awards or share awards in fiscal
2009.
GRANTS OF PLAN-BASED AWARDS FOR
FISCAL 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts |
|
|
|
|
|
|
Under Non-Equity Incentive |
|
|
|
|
|
|
Plan Awards |
|
|
|
|
|
|
|
|
|
|
Target |
|
|
Name |
|
Grant Date |
|
Threshold ($) |
|
($) |
|
Maximum ($) |
Christian G. Farman |
|
|
|
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
|
(1) |
|
As shown under the column Non-Equity Incentive Plan Compensation in the Summary
Compensation Table and as described in Compensation Discussion and Analysis, Mr. Farman
received a non-equity incentive plan award under our 2008 Annual Incentive Plan for the first
quarter of fiscal 2009. Because this award is based on a percentage of our consolidated
pre-tax profits, it is impossible to calculate thresholds, targets or maximum amounts for such
awards. |
Executive Employment Agreements
Historically, we generally have not entered into employment agreements with our named executive
officers. However, in May 2008, in order to incentivize Mr. Farman to join our company as Chief
Financial Officer, we entered into an employment offer letter with Mr. Farman.
The material terms of the employment offer letter with Mr. Farman are as follows:
|
|
|
Mr. Farmans annual base salary is set at $500,000. |
|
|
|
|
Mr. Farman was eligible for an annual bonus of up to $300,000 for fiscal 2009
based on Mr. Farmans performance and our performance. Mr. Farman received a
bonus of $172,375 for fiscal 2009. |
|
|
|
|
We agreed to grant Mr. Farman options to purchase 100,000 shares of our common
stock pursuant to our 2006 Equity Incentive Plan. The stock options will vest over
a three year period in one-third increments on the first, second and third
anniversaries of the date |
15
|
|
|
of grant. The stock options were priced on May 5, 2008,
the date Mr. Farman commenced employment with us. |
|
|
|
|
We agreed to reimburse Mr. Farman for (i) reasonable temporary living expenses
in the Elkhart, Indiana area for up to six months from the date Mr. Farman
commences employment with us and (ii) reasonable moving expenses. |
|
|
|
|
We agreed to pay Mr. Farman severance equal to nine months of Mr. Farmans base
salary in the event Mr. Farman is terminated for reasons other than cause. For
purposes of Mr. Farmans offer letter, cause means (i) the commission of or plea
of guilty or no contest to, a felony or a crime involving moral turpitude or the
commission of any other act involving willful malfeasance or material fiduciary
breach with respect to our company or an affiliate, (ii) conduct tending to bring
our company into substantial public disgrace, or disrepute, (iii) gross negligence
or willful misconduct with respect to our company or an affiliate or (iv) material
violation of state or federal securities laws. |
Mr. Farman also participates in the compensation and benefit programs generally available to our
executive officers.
2008 Annual Incentive Plan
The 2008 Annual Incentive Plan became effective on October 3, 2008, and was approved by the
stockholders at the 2008 Annual Meeting.
The 2008 Annual Incentive Plan is administered by our Compensation Committee. Under the 2008 Annual
Incentive Plan, our Compensation Committee has the power to: (i) designate eligible executives to
participate in the 2008 Annual Incentive Plan for a designated Performance Period (as defined
below), as defined below (the 2008 Participants); (ii) determine the terms and conditions of any
Award; (iii) determine whether, to what extent, and under what circumstances Awards may be
canceled, forfeited, or suspended; (iv) interpret, administer, reconcile any inconsistency,
correct any defect and/or supply any omission in the 2008 Annual Incentive Plan and any instrument
or agreement relating to, or Award granted under, the 2008 Annual Incentive Plan; (v) establish,
amend, suspend, or waive any rules and regulations; and (vi) make any other determination and take
any other action that the Compensation Committee deems necessary or desirable for the
administration of the 2008 Annual Incentive Plan.
Under the 2008 Annual Incentive Plan, our Compensation Committee has the authority to grant Awards
which represent the conditional right of a 2008 Participant to receive a cash award following a
Performance Period based upon performance in respect of a Performance Goal (as defined below). For
purposes of the 2008 Annual Incentive Plan, a Performance Period is a fiscal quarter during which
performance is measured in order to determine a 2008 Participants entitlement to receive payment
of an Award, and Performance Goal is, with respect to each Performance Period, consolidated
pre-tax profits of our company (Pre-Tax Profits) of $15,000,000.
Prior to, or reasonably promptly following the inception of, a Performance Period but, to the
extent required by Code Section 162(m), by no later than the day prior to the date on which
twenty-five percent (25%) of the Performance Period has elapsed, our Compensation Committee will
allocate in writing, on behalf of each 2008 Participant, the portion of Pre-Tax Profits (not to
exceed 3% on behalf of any 2008 Participant), if any (an Award), to be paid to the 2008
Participant if the Performance Goal is achieved. With respect to any single 2008 Participant, the
maximum Award that can be paid with respect to any Performance Period is $5,000,000.
Our Compensation Committee is authorized at any time during or after a Performance Period to reduce
or eliminate an Award allocated to any 2008 Participant for any reason, including, without
limitation, changes in the position or duties of any 2008 Participant with our company during or
after a Performance Period,
whether due to any termination of employment (including death, disability, retirement, voluntary
termination, or termination with or without cause) or otherwise. However, no reduction or
elimination will increase the amount otherwise payable to any other 2008 Participant if a reduction
or elimination would
16
cause the Awards to fail to qualify as qualified performance-based
compensation under Code Section 162(m), as determined by the Committee. In addition, to the
extent necessary to preserve the intended economic effects of the 2008 Annual Incentive Plan to our
company and the 2008 Participants, the Compensation Committee will adjust the calculation of
Pre-Tax Profits and Awards and the allocation thereof to take into account: (i) a change in
corporate capitalization, (ii) a corporate transaction, such as any merger of our company or any
subsidiary into another corporation, any consolidation of our company or any subsidiary into
another corporation, any separation of our company or any subsidiary (including a spin-off or the
distribution of stock or property of the Company or any subsidiary), any reorganization of our
company or any subsidiary (whether or not the reorganization comes within the definition of Code
Section 368), (iii) any partial or complete liquidation of our company or any subsidiary or a
large, special and non-recurring dividend paid or distributed by our company, or (iv) a change in
accounting or other relevant rules or regulations; provided, however, that no
adjustment will be authorized or made if and to the extent that the Compensation Committee
determines that the adjustment would cause the Awards to fail to qualify as qualified
performance-based compensation under Code Section 162(m).
Following the completion of each Performance Period, the Compensation Committee certifies in
writing, in accordance with the requirements of Code Section 162(m), the achievement of the
Performance Goal and the Awards payable to 2008 Participants.
The Board of Directors or the Compensation Committee may, at any time, terminate or, from time to
time, amend, modify or suspend the 2008 Annual Incentive Plan and the terms and provisions of any
Award granted to any 2008 Participant which has not been paid. No Award may be granted during any
suspension of the 2008 Annual Incentive Plan or after its termination.
Summaries of Equity Compensation Plans
Thor Industries, Inc. 2006 Equity Incentive Plan
On December 5, 2006, we adopted the Thor Industries, Inc. 2006 Equity Incentive Plan, which we
refer to as the Equity Incentive Plan or the Plan, which is designed to enable us and our
affiliates to obtain and retain the services of the types of employees, consultants and directors
who will contribute to the Companys long range success and to provide incentives that are linked
directly to increases in share value which will inure to the benefit of all stockholders of the
Company.
The Equity Incentive Plan is designed, among other things, to replace the Companys 1999 Stock
Option Plan (the 1999 Plan) and the Companys 1997 Restricted Stock Plan (the 1997 Plan). When
the Board approved the Equity Incentive Plan, it also approved the termination of the 1999 Plan and
the 1997 Plan, each effective upon the approval of the Equity Incentive Plan by the stockholders of
the Company. As a result, there will be no further grants of options, restricted stock or other
equity-based awards pursuant to either the 1999 Plan or the 1997 Plan.
The maximum number of shares available for the grant of awards under the Equity Incentive Plan is
1,100,000 subject to adjustment in accordance with the terms of the Equity Incentive Plan, which is
approximately the same number of shares that were available for issuance under the 1999 Plan and
the 1997 Plan when those plans were terminated.
The Equity Incentive Plan is administered by the Compensation Committee, which has the power and
authority to select Participants (as defined below) in the Plan and grant Awards (as defined below)
to such Participants pursuant to the terms of the Plan.
Awards may be granted to employees, directors and, in some cases, consultants and those individuals
whom the Compensation Committee determines are reasonably expected to become employees, directors
or consultants following the date of the grant of the Award (Participants), provided that
incentive stock options may be granted only to employees. Awards may be in the form of options
(incentive stock options and nonstatutory stock options), restricted stock, restricted stock units,
performance compensation awards and stock appreciation rights (collectively, Awards).
17
Options
Options may be granted as incentive stock options (stock options intended to meet the requirements
of Section 422 of the Code) or nonstatutory stock options (stock options not intended to meet such
requirements) and will be granted in such form and will contain such terms and conditions as the
Compensation Committee deems appropriate. The term of each option will be fixed by the Compensation
Committee but no incentive stock option may be exercisable after the expiration of ten years from
the grant date; provided, that, in the case of incentive stock options granted to a 10%
stockholder, the term of such option may not exceed five years from the grant date. The exercise
price of each incentive stock option may not be less than 100% of the fair market value of the
common stock subject to the option on the date of grant; provided, that, in the case of incentive
stock options granted to a 10% stockholder, the exercise price may not be less than 110% of the
fair market value on the date of grant. The exercise price of each nonstatutory stock option may
not be less than 100% of the fair market value of the common stock subject to the option on the
date of grant unless such nonstatutory stock option satisfies the additional conditions applicable
to nonqualified deferred compensation under Section 409A of the Code. The Compensation Committee
will determine the time or times at which, or other conditions upon which, an option will vest or
become exercisable.
Restricted Stock and Restricted Stock Units
The Compensation Committee may award actual shares of common stock (Restricted Stock) or
hypothetical common stock units having a value equal to the fair market value of an identical
number of shares of common stock (Restricted Stock Units), which award may, but need not, provide
that such Restricted Stock or Restricted Stock Units may not be sold, assigned, transferred or
otherwise disposed of, pledged or hypothecated as collateral for a loan or as security for the
performance of an obligation or for any other purpose for such period as the Compensation Committee
shall determine. Subject to the restrictions set forth in the Award, Participants who are granted
Restricted Stock generally will have the rights and privileges of a stockholder as to such
restricted stock, including the right to receive dividends and vote such restricted stock.
Performance Compensation Awards
The Plan provides the Compensation Committee with the authority to designate certain Awards as
performance compensation awards in order to qualify such Awards as performance-based compensation
under Section 162(m) of the Code. In addition, the Plan provides the Compensation Committee with
the authority to make an Award of a cash bonus to any Participant and designate such Award as a
performance compensation award in order to qualify such Award as performance-based compensation
under Section 162(m) of the Code.
The maximum performance compensation award payable to any one Participant under the Plan for a
Performance Period is 1,100,000 shares of common stock or, in the event such performance
compensation award is paid in cash, the equivalent cash value thereof, as determined by the
Compensation Committee. The maximum amount that can be paid in any calendar year to any Participant
pursuant to a Performance Compensation Award in the form of a cash bonus is $10,000,000.
Stock Appreciation Rights
Stock appreciation rights may be granted either alone (Free Standing Rights) or, provided the
requirements of the Plan are satisfied, in tandem with all or part of any option granted under the
Plan (Related Rights). Upon exercise thereof, the holder of a stock appreciation right would be
entitled to receive from us an amount equal to the product of (i) the excess of the fair market
value of our common stock on the date of exercise over the exercise price per share specified in
such stock appreciation right or its related option, multiplied by (ii) the number of shares for
which such stock appreciation right is exercised. The exercise price of a Free Standing Right shall
be determined by the Compensation
Committee, but shall not be less than 100% of the fair market value of the Companys common stock
on the date of grant of such Free Standing Right. A Related Right granted simultaneously with or
subsequent to the grant of an option shall have the same exercise price as the related option,
shall be transferable
18
only upon the same terms and conditions as the related option, and shall be
exercisable only to the same extent as the related option. A stock appreciation right may be
settled, at the sole discretion of the Compensation Committee, in cash, shares of our common stock
or a combination thereof.
Change in Control
In the event of a change in control, unless otherwise provided in an Award agreement, all options
and stock appreciation rights will become immediately exercisable with respect to 100 percent of
the shares subject to such option or stock appreciation rights, and the restrictions will expire
immediately with respect to 100 percent of such shares of Restricted Stock or Restricted Stock
Units subject to such Award (including a waiver of any applicable Performance Goals). In addition,
unless otherwise provided in an Award agreement, all incomplete Performance Periods in respect of a
performance compensation award will end upon a change in control, and the Compensation Committee
will (a) determine the extent to which performance goals with respect to each such Performance
Period have been met, and (b) cause to be paid to the applicable Participant partial or full
performance compensation awards with respect to performance goals for each such Performance Period
based upon the Compensation Committees determination of the degree of attainment of performance
goals. Further, in the event of a change in control, the Compensation Committee may in its
discretion and upon advance notice to the affected persons, cancel any outstanding Awards and pay
to the holders thereof, in cash or stock, or any combination thereof, the value of such Awards
based upon the price per share of our common stock received or to be received by other shareholders
in the event.
Amendment and Termination
The Board at any time, and from time to time, may amend or terminate the Plan. However, except as
provided otherwise in the Plan, no amendment shall be effective unless approved by our stockholders
to the extent stockholder approval is necessary to satisfy any applicable law of securities
exchange listing requirements. The Compensation Committee at any time, and from time to time, may
amend the terms of any one or more Awards; provided, however, that the Compensation Committee may
not effect any amendment which would otherwise constitute an impairment of the rights under any
Award unless we request the consent of the Participant and the Participant consents in writing.
1999 Stock Option Plan
The Thor Industries, Inc. 1999 Stock Option Plan (which we refer to as the 1999 Plan) was adopted
by our Board of Directors in July 1999 and by our shareholders in September 1999 and provided for
the grant of incentive stock options and nonstatutory options to our employees and directors. The
1999 Plan was frozen effective as of December 5, 2006.
Upon the occurrence of a change in control, all options granted pursuant to the 1999 Plan will
automatically become vested and exercisable in full.
Under certain circumstances, in the event option holders engage in certain prohibitive behavior,
options can be forfeited at the discretion of the Committee. In addition, any gains realized by
option holders may have to be repaid under certain circumstances.
Restricted Stock Plan
We adopted the Thor Industries, Inc. Restricted Stock Plan (which we refer to as the Restricted
Stock Plan) effective September 29, 1997. The Restricted Stock Plan was frozen as of December 5,
2006.
No shares granted under the Restricted Stock Plan may be transferred by the recipient thereof until
such shares have vested. Any nonvested shares will automatically vest upon the earliest of (x)
termination other than for cause and (y) the recipients death, disability or retirement. The
Restricted Stock Plan
contains non-competition and non-solicitation provisions which restrict recipients from competing
with us. Non-compliance with such provisions will result in the forfeiture of non-vested shares.
19
Outstanding Equity Awards at 2009 Fiscal Year-End
The following table sets forth information concerning option awards and share awards held by our
named executive officers as of July 31, 2009. All share amounts and exercise prices have been
adjusted to reflect the 2 for 1 split in our stock effective January 26, 2004.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
|
|
Number of |
|
Number of |
|
|
|
|
|
|
|
|
|
Number |
|
|
|
|
Securities |
|
Securities |
|
|
|
|
|
|
|
|
|
of Shares |
|
|
|
|
Underlying |
|
Underlying |
|
|
|
|
|
|
|
|
|
or Units |
|
Market Value of |
|
|
Unexercised |
|
Unexercised |
|
Option |
|
|
|
|
|
That |
|
Shares or Units |
|
|
Options |
|
Options |
|
Exercise |
|
Option |
|
Have Not |
|
That Have Not |
|
|
Exercisable |
|
Unexercisable |
|
Price |
|
Expiration |
|
Vested |
|
Vested |
Name |
|
(#) |
|
(#) |
|
($) |
|
Date |
|
(#) (1) |
|
($) (2) |
Wade F. B. Thompson |
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
-0- |
|
|
|
-0- |
|
Christian G. Farman |
|
|
33,333 |
|
|
|
66,667 |
(3) |
|
$ |
26.30 |
|
|
|
5/5/2018 |
|
|
|
-0- |
|
|
|
-0- |
|
Peter B. Orthwein |
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
N/A |
|
|
|
-0- |
|
|
|
-0- |
|
Richard E. Riegel, III |
|
|
14,000 |
|
|
|
-0- |
|
|
$ |
26.91 |
|
|
|
12/8/2013 |
|
|
|
600 |
(5) |
|
$ |
14,346 |
|
|
|
|
14,000 |
|
|
|
-0- |
|
|
$ |
12.86 |
|
|
|
7/23/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
33,333 |
|
|
|
66,667 |
(4) |
|
$ |
26.79 |
|
|
|
5/23/2018 |
|
|
|
|
|
|
|
|
|
Walter L. Bennett |
|
|
15,225 |
|
|
|
-0- |
|
|
$ |
26.91 |
|
|
|
12/8/2013 |
|
|
|
1,000 |
(6) |
|
$ |
23,910 |
|
|
|
|
(1) |
|
Mr. Bennett and Mr. Riegel, as holders of restricted shares, are entitled to receive
dividends and other distributions paid with respect to such shares while they are restricted. |
|
(2) |
|
Assumes stock price of $23.91, the closing price on July 31, 2009. |
|
(3) |
|
Mr. Farman received an option award for 100,000 shares on May 5, 2008. 33,333 options vested
on May 5, 2009, 33,333 options will vest on May 5, 2010 and 33,334 options will vest on May 5,
2011. |
|
(4) |
|
Mr. Riegel received an option award for 100,000 shares on May 23, 2008. 33,333 options vested
on May 23, 2009. 33,333 options will vest on May 23, 2010 and 33,334 options will vest on May
23, 2011. |
|
(5) |
|
Mr. Riegel received a restricted stock award of 1,200 shares on December 8, 2003. 600 of
those shares vested on December 8, 2008 and the remaining 600 of those shares vest on December
8, 2009. |
|
(6) |
|
Mr. Bennett received a restricted stock award of 2,000 shares on December 8, 2003. 1,000 of
those shares vested on December 8, 2008 and the remaining 1,000 of those shares vest on
December 8, 2009. |
20
Option Exercises and Shares Vested in Fiscal 2009
The following table summarizes information regarding the vesting of share awards for each named
executive officer in fiscal 2009. None of our named executive officers exercised any stock options
in fiscal 2009.
|
|
|
|
|
|
|
|
|
|
|
Share Awards(1) |
|
|
Number of |
|
|
|
|
Shares |
|
|
|
|
Acquired on |
|
Value Realized |
|
|
Vesting |
|
on Vesting |
Name |
|
(#) |
|
($) (2) |
Wade F. B. Thompson |
|
|
0 |
|
|
|
0 |
|
Christian G. Farman |
|
|
0 |
|
|
|
0 |
|
Peter B. Orthwein |
|
|
0 |
|
|
|
0 |
|
Richard E. Riegel, III |
|
|
1,200 |
|
|
|
19,146 |
|
Walter L. Bennett |
|
|
2,000 |
|
|
|
31,910 |
|
|
|
|
(1) |
|
Represents restricted stock awards granted under our Restricted Stock Plan. |
|
(2) |
|
Represents the amount realized based on the market price of our common stock on the vesting
date. |
Non-Qualified Deferred Compensation for Fiscal 2009
The following table shows the contributions, earnings and account balances for the named executive
officers participating in the two non-qualified deferred compensation plans sponsored by us in
2009: the Select Executive Incentive Plan and the Deferred Compensation Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
Registrant |
|
Aggregate |
|
Aggregate |
|
Aggregate |
|
|
Contributions |
|
Contributions |
|
Earnings in |
|
Withdrawals/ |
|
Balance at |
|
|
in fiscal 2009 |
|
in fiscal 2009 |
|
fiscal 2009 |
|
Distributions |
|
7/31/09 |
Name |
|
($) |
|
($) |
|
($) |
|
($)(1) |
|
($) |
Wade F. B. Thompson |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Christian G. Farman |
|
|
27,074 |
(2) |
|
|
0 |
|
|
|
4,242 |
(3) |
|
|
0 |
|
|
|
34,374 |
(4) |
Peter B. Orthwein |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Richard E. Riegel, III |
|
|
23,298 |
(5) |
|
|
0 |
|
|
|
(825 |
) (6) |
|
|
0 |
|
|
|
266,610 |
(7) |
Walter L. Bennett |
|
|
0 |
|
|
|
0 |
|
|
|
(60,028 |
) (8) |
|
|
0 |
|
|
|
342,707 |
(9) |
|
|
|
(1) |
|
There were no withdrawals by, or distributions to, any of our named executive officers in
fiscal 2009. |
|
(2) |
|
Consists of amounts contributed by Mr. Farman under the Deferred Compensation Plan. |
|
(3) |
|
Consists of aggregate earnings under the Deferred Compensation Plan. |
|
(4) |
|
Consists of Mr. Farmans aggregate balance (all of which is vested) under the Deferred
Compensation Plan. |
|
(5) |
|
Consists of amounts contributed by Mr. Riegel to the Deferred Compensation Plan. This amount
consists of deferred bonus amounts which are also reported in the Bonus column of the Summary
Compensation Table. |
21
|
|
|
(6) |
|
Consists of $(4,502) earned under the Select Executive Incentive Plan and $3,677 earned under
the Deferred Compensation Plan. |
|
(7) |
|
Consists of an aggregate balance of $34,372 under the Select Executive Incentive Plan (all of
which is vested) and an aggregate balance of $232,238 under the Deferred Compensation Plan
(all of which is vested). |
|
(8) |
|
Consists of $(40,448) earned under the Select Executive Incentive Plan and $(19,580) earned
under the Deferred Compensation Plan. |
|
(9) |
|
Consists of an aggregate balance of $160,115 under the Select Executive Incentive Plan (all
of which is vested) and an aggregate balance of $182,592 under the Deferred Compensation Plan
(all of which is vested). |
The Select Executive Incentive Plan and the Deferred Compensation Plan are described below. The
Company terminated the Select Executive Incentive Plan effective February 27, 2009. Amounts under
the Select Executive Incentive Plan vested as of such date for all participants in the Select
Executive Incentive Plan and will be paid out on March 31, 2010 or, if earlier, in accordance with
the Select Executive Incentive Plan.
Summaries of Deferred Compensation Plans
Select Executive Incentive Plan
We adopted the Thor Industries, Inc. Select Executive Incentive Plan (the Select Executive
Incentive Plan) effective September 29, 1997. The Select Executive Incentive Plan is administered
by the Compensation Committee. The purpose of the Select Executive Incentive Plan is to provide
eligible executives with supplemental deferred compensation in addition to the current compensation
earned under our Management Incentive Plan. The Select Executive Incentive Plan is intended to be
an unfunded deferred compensation arrangement for the benefit of a select group of management or
highly compensated employees.
For each year of participation, eligible executives are credited with the amount(s), if any,
determined by the Compensation Committee in its sole discretion. The amount(s) are credited to an
account maintained for each eligible executive, which is also credited with earnings and losses as
if the amounts were invested in specific investment funds selected by the Compensation Committee
(or by the eligible executive if the Compensation Committee establishes a procedure permitting the
eligible executive to select from amongst the index funds selected by the Compensation Committee).
The amount(s) credited to the account of an eligible executive remain unvested until the conclusion
of the executives sixth year of participation in the Select Executive Incentive Plan, at which
time the amount(s) become 100% vested. However, the amounts immediately become 100% vested upon the
eligible executives death or attainment of age 65. The Select Executive Incentive Plan contains
non-competition and non-solicitation provisions which prohibit eligible executives from competing
with us within the United States or Canada during the term of such eligible executives
participation and for a period of eighteen months after termination of employment with us for any
reason. Non-compliance with these provisions will result in a total forfeiture of vested benefits.
Amounts become payable upon an eligible executives separation from service or, if earlier, upon
the eligible executives death or disability or the occurrence of an unforeseen emergency. Payments
made upon an eligible executives death or disability or an unforeseen emergency are made in a lump
sum. Payments made in connection with an eligible executives separation from service will commence
eighteen months following the eligible executives separation from service and payment is made in
equal annual installments over five years or ten years or in another actuarially equivalent form of
payment, as elected by the executive at the commencement of participation in the plan.
We terminated the Select Executive Incentive Plan effective February 27, 2009. On such date, all
balances for all participants under the Select Executive Incentive Plan vested and, in accordance
with
22
Section 409A of the Code, will be paid out on March 31, 2010 or, if earlier, in accordance
with the terms of the Select Executive Incentive Plan.
Deferred Compensation Plan
On December 9, 2008, the Board approved and adopted the amended and restated Thor Industries, Inc.
Deferred Compensation Plan (the Deferred Compensation Plan), which was amended and restated
primarily to comply with Section 409A of the Code. The general purpose of the Deferred Compensation
Plan is to provide our key selected employees with the benefits of an unfunded, non-qualified
deferred compensation program.
Under the Deferred Compensation Plan, participants may elect to defer portions of their salary and
bonus amounts. The amounts are credited to the participants individual account, which is credited
with earnings and losses based on the performance of certain investment funds selected by us and
elected by the participant.
Participants are 100% vested in their elective deferrals at all times. Vested benefits become
payable under the Deferred Compensation Plan (i) upon the participants separation from service,
(ii) upon the occurrence of a change of control, (iii) upon the participants death or disability
or (iv) in connection with a severe financial hardship due to an unforeseen emergency (but in this
case amounts payable are limited to the amount necessary to satisfy the emergency plus anticipated
taxes). In each case, payment will be made within ninety (90) days following the event triggering
the payment unless the participant is determined by the Board to be a specified employee under
Section 409A of the Code and the payment trigger is the participants separation from service, in
which case the payment will be delayed for a period of six (6) months.
Prior to a participants attainment of age fifty-five (55), all benefits are paid in lump sum.
Benefits paid following the participants attainment of age fifty-five (55) may be paid in lump sum
or in equal installments not to exceed five years, as elected by the participant in his or her
initial election. Payments of amounts under the Deferred Compensation Plan are paid in cash from
our general funds and any right to receive payments from us under the Deferred Compensation Plan
will be no greater than the right of one of our unsecured creditors.
The Compensation Committee administers the Deferred Compensation Plan. The Compensation Committee
has the ability to modify or terminate the plan, provided that any modification or termination does
not adversely affect the rights of any participant or beneficiary as to amounts under the plan. The
Compensation Committee also has the ability to terminate the Deferred Compensation Plan and
accelerate the payments of all vested accounts in connection with certain corporate dissolutions or
changes of control, provided that the acceleration is permissible under Section 409A of the Code.
The Deferred Compensation Plan is intended to comply with Section 409A of the Code.
Potential Payments Upon Termination or Change-in-Control
The narrative and tables that follow describe potential payments and benefits to our named
executive officers or their beneficiaries under existing plans or arrangements, whether written or
unwritten, for various scenarios including change-in-control and termination of employment. The
amounts shown assume a termination or change-in-control, as applicable, effective as of July 31,
2009, as well as a closing price of our common stock on July 31, 2009 of $23.91 per share, and thus
include amounts earned through such time and are estimates of amounts that would be paid out to the
named executive officers upon a change-in-control or their separation or termination. Unless
otherwise noted, all cash benefits are stated as the total present value of the obligation. Note
that these amounts are estimates only, as the actual obligation can only be determined at the time
of a change-in-control or the named executive officers separation from us.
Except for the May 2008 employment offer letter with Mr. Farman summarized above, we have not
entered into any agreements with any named executive officer with provisions regarding severance or
change-in-control benefits nor do we maintain a severance plan or policy for its employees.
23
The following presentation has been keyed to four general events upon which a named executive
officer or his beneficiary would be entitled to a benefit: death, disability, termination by us
other than for cause and change-in-control.
In addition to the amounts reported in the tables below, the Select Executive Incentive Plan and
the Deferred Compensation Plan provide for payments of the vested deferred amounts upon termination
of employment and, in the case of the Deferred Compensation Plan, following a change in control.
Under the Select Executive Incentive Plan, if a named executive officers employment terminated on
July 31, 2009, he would receive his entire vested account balance (reported in the Aggregate
Balance at 7/31/09 column of the Non-Qualified Deferred Compensation table above) commencing after
the end of the eighteenth complete calendar month following termination of employment (assuming he
did not violate the plans non-compete, non-solicitation or non-disclosure provisions). However,
in connection with the termination of the Select Executive Incentive Plan, effective February 27,
2009, to the extent not paid earlier in connection with a permissible payment event, all amounts
accrued under the Select Executive Incentive Plan will be paid on March 31, 2010.
Under the Deferred Compensation Plan, if a named executive officers employment terminated on July
31, 2009, or if the named executive officer died or became disabled, he would receive his entire
vested account balance (reported in the Aggregate Balance at 7/31/09 column of the Non-Qualified
Deferred Compensation table above). A change in control would also trigger payment to the named
executive officer.
Benefits and Payments Upon Death
The table below reflects the benefits payable in the event of death of our named executive officers
on July 31, 2009:
|
|
|
|
|
|
|
Value of Stock Acceleration |
Name |
|
($) (1) |
Wade F. B. Thompson |
|
|
0 |
|
Christian G. Farman |
|
|
0 |
|
Peter B. Orthwein |
|
|
0 |
|
Richard E. Riegel, III |
|
|
14,346 |
|
Walter L. Bennett |
|
|
23,910 |
|
|
|
|
(1) |
|
The Restricted Stock Plan provides that restrictions on restricted shares lapse upon the
death of a grant recipient. Amounts represent the value of accelerated vesting of such
shares, calculated as the product of: (i) the number of restricted shares becoming vested upon
the named executive officers death and (ii) the closing price of our common stock on July 31,
2009 ($23.91). |
Benefits and Payments Upon Termination Due to Disability or Change-in-Control
The table below reflects the benefits payable to our named executive officers had either of the
following events occurred as of July 31, 2009: (i) termination due to disability, or (ii)
change-in-control.
|
|
|
|
|
|
|
Value of Stock Acceleration |
Name |
|
($) (1) |
Wade F. B. Thompson |
|
|
0 |
|
Christian G. Farman |
|
|
0 |
|
Peter B. Orthwein |
|
|
0 |
|
Richard E. Riegel, III |
|
|
14,346 |
|
Walter L. Bennett |
|
|
23,910 |
|
24
|
|
|
(1) |
|
Under the terms of our Restricted Stock Plan, the restrictions on restricted stock held by
our named executive officers lapse upon the permanent and total disability of our named
executive officers. In addition, this table assumes that the Committee, as administrator of
the Restricted Stock Plan,
would exercise discretionary authority to accelerate the vesting of restricted stock upon a
change-in-control. Amounts represent the value of accelerated vesting of such shares. |
Benefits and Payments Upon Termination by the Company Other Than for Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Value of Stock Acceleration ($)(1) |
|
Severance ($) |
|
Total ($) |
|
Wade F. B. Thompson |
|
|
|
|
|
|
|
|
|
|
|
|
Peter B. Orthwein |
|
|
|
|
|
|
|
|
|
|
|
|
Richard E. Riegel, III |
|
|
14,346 |
|
|
|
|
|
|
|
14,346 |
|
Walter L. Bennett |
|
|
23,910 |
|
|
|
|
|
|
|
23,910 |
|
Christian G. Farman |
|
|
|
|
|
|
375,000 |
(2) |
|
|
375,000 |
|
|
|
|
(1) |
|
Under the terms of our Restricted Stock Plan, the restrictions on restricted shares held by
our named executive officers lapse upon termination of employment of our named executive
officers by us other than for cause. Amounts represent the value of accelerated vesting of
such restricted shares, calculated as the product of: (i) the number of restricted shares
becoming vested upon such termination of employment and (ii) the closing price of our common
stock on July 31, 2009 ($23.91). |
|
(2) |
|
In accordance with the employment offer letter between us and Mr. Farman, Mr. Farmans
severance amount consists of nine months of his base salary of $500,000. |
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information as of July 31, 2009 about the Companys Common Stock that
may be issued upon the exercise of options, warrants and rights granted to employees or members of
the Board of Directors under all the Companys existing equity compensation plans, including the
2006 Equity Incentive Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
Number of securities |
|
|
securities to be |
|
|
|
|
|
remaining available for |
|
|
issued upon |
|
Weighted-average |
|
future issuance under |
|
|
exercise of |
|
exercise price of |
|
equity compensation |
|
|
outstanding |
|
outstanding |
|
plans (excluding |
|
|
options, warrants |
|
options, warrants |
|
securities reflected in |
|
|
and rights |
|
and rights |
|
column (a) |
Plan category |
|
(a) |
|
(b) |
|
(c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation
plans approved by
security holders |
|
|
513,561 |
(1) |
|
$ |
23.47 |
|
|
|
900,000 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation
plans not approved
by security holders |
|
|
|
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
513,561 |
|
|
$ |
23.47 |
|
|
|
900,000 |
|
|
|
|
(1) |
|
Represents shares underlying stock options granted pursuant to the Thor Industries, Inc. 1999
Stock Option Plan and the Thor Industries, Inc. 2006 Equity Incentive Plan. The 1999 Stock
Option Plan was frozen in 2006 upon the adoption of the 2006 Equity Incentive Plan. As a
result, no further grants may be made under the 1999 Stock Option Plan. |
|
(2) |
|
Represents shares authorized for issuance pursuant to the 2006 Equity Incentive Plan. |
25
Director Compensation
Each of our non-employee directors receives an annual cash retainer of $170,000, payable quarterly,
plus expenses. The lead director and the chair of the Audit Committee each receive an additional
annual cash retainer of $20,000, payable quarterly. Currently, we do not anticipate awarding
additional equity compensation to non-employee directors.
For fiscal 2009, each of our non-employee directors volunteered to forgo 15% of his fees due to the
decline in our profits in fiscal 2008 resulting from market conditions.
The following table summarizes the compensation paid to our non-employee directors in fiscal 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees |
|
|
|
|
|
|
Earned or |
|
|
|
|
|
|
Paid in |
|
Option |
|
|
|
|
Cash |
|
Awards |
|
Total |
Name |
|
($)(1) |
|
($)(2) |
|
($) |
Neil D. Chrisman |
|
|
144,500 |
|
|
|
0 |
|
|
|
144,500 |
|
Alan Siegel |
|
|
144,500 |
|
|
|
0 |
|
|
|
144,500 |
|
Jan H. Suwinski |
|
|
161,500 |
|
|
|
0 |
|
|
|
161,500 |
|
Geoffrey A. Thompson |
|
|
161,500 |
|
|
|
0 |
|
|
|
161,500 |
|
William C. Tomson |
|
|
144,500 |
|
|
|
0 |
|
|
|
144,500 |
|
|
|
|
(1) |
|
Fees consist of an annual cash retainer for board and committee service and an additional
annual cash retainer paid to the lead director and the chair of the Audit Committee. |
|
(2) |
|
The aggregate number of outstanding stock options, all of which are exercisable, held by each
of the non-employee directors on July 31, 2009 was as follows: Mr. Chrisman 25,000, Mr.
Siegel 2,000, Mr. Suwinski 43,000, Mr. Thompson 15,000 and Mr. Tomson 45,000. |
Certain Relationships and Transactions with Management
Messrs. Wade Thompson and Peter Orthwein own all the stock of Cash Flow Management, Inc. The
Company pays Cash Flow Management a fee of $192,000 per annum, which is used to defray expenses,
including the rent of offices used by Messrs. Thompson and Orthwein.
The Audit Committee is required to review and approve all related party transactions that are
required to be disclosed under Item 404 of Regulation S-K promulgated by the SEC. All such related
party transactions must also be approved by the disinterested members of the Board of Directors if
required by Delaware General Corporation Law.
Report of the Audit Committee
Working under the guidance of a written charter approved by the Board of Directors, the Audit
Committee, which is comprised of Messrs. Neil D. Chrisman, Jan H. Suwinski and Geoffrey A.
Thompson, is primarily responsible for assisting the Board in overseeing the Companys financial
reporting process as well as the internal controls that management and the Board have established.
Management is responsible for the financial reporting process, including the system of internal
control, and for the preparation of consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America. The Companys independent registered
public accounting firm is responsible for auditing those financial statements. The Audit
Committees responsibility is to monitor and review these processes, acting in an oversight
capacity. The Audit Committee relies, without independent verification, on the information provided
to it and on the representations made by management and the independent registered public
accounting firm.
26
During the past fiscal year, the Audit Committee met quarterly in person or by telephone and met in
separate executive sessions with the Companys Chief Financial Officer, the Internal Audit Director
and the independent auditing partner for the Company. The Audit Committee also met privately on a
quarterly basis.
In carrying out its duties, the Audit Committee has reviewed and discussed the Companys audited
consolidated financial statements for the fiscal year ended July 31, 2009 with the Companys
management and Deloitte & Touche LLP (Deloitte), the Companys independent registered public
accounting firm. The Audit Committee has also discussed with Deloitte the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as
amended. In addition, the Audit Committee has received the written disclosures and the letter from
Deloitte required by Independence Communications with Audit Committees Required by PCAOB Ethics and
Independence Rule 3526, Communication with Audit Committees Concerning Independence and has
discussed with Deloitte its independence from the Company and its management. Based on the
foregoing reports and discussions and subject to the limitations on the role and responsibilities
of the Audit Committee referred to above and in the Charter of the Audit Committee, the Audit
Committee recommended to the Board of Directors, and the Board of Directors has approved, that the
audited consolidated financial statements be included in the Companys Annual Report on Form 10-K
for the fiscal year ended July 31, 2009.
The Board of Directors has affirmatively determined that each of the members of the Audit Committee
is independent as defined under the rules of the New York Stock Exchange.
The Audit Committee
Neil D. Chrisman
Jan H. Suwinski
Geoffrey A. Thompson
The foregoing report of the Audit Committee shall not be deemed to be incorporated by reference in
any previous or future documents filed by the Company with the Securities and Exchange Commission
under the Securities Act or the Exchange Act, except to the extent that the Company incorporates
the report by reference in any such document.
Independent Registered Public Accounting Firm Fees
The following table represents aggregate fees billed to the Company for fiscal 2009 and 2008 by
Deloitte and Touche, LLP, the Companys principal independent registered public accounting firm.
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2009 |
|
Fiscal 2008 |
|
|
|
|
|
|
|
|
|
Audit Fees |
|
$ |
2,088,490 |
|
|
$ |
2,145,791 |
|
|
|
|
|
|
|
|
|
|
Audit-Related Fees |
|
|
35,102 |
|
|
|
520,002 |
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
2,123,592 |
|
|
|
2,665,793 |
|
|
|
|
|
|
|
|
|
|
Tax Fees |
|
|
1,225,710 |
|
|
|
1,663,717 |
|
|
|
|
|
|
|
|
|
|
All Other Fees |
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
Total Fees |
|
$ |
3,349,302 |
|
|
$ |
4,329,510 |
|
Audit Fees. Represents fees for professional services provided for the audit of the Companys
annual financial statements and review of the Companys quarterly financial statements, and audit
services provided in connection with other statutory or regulatory filings.
27
Audit-Related Fees. Represents fees for assurance services related to the audit of the Companys
financial statements. The amount shown consists of fees for benefit plan audits and, for fiscal
2008, due diligence for potential transactions involving the Company.
Tax Fees. Represents fees for professional services related to taxes including the preparation of
domestic and international returns, tax examinations assistance and tax planning.
All Other Fees. Represents fees for products and services provided to the Company not otherwise
included in the categories above. The amounts shown consist of fees for benefit plan tax
consultation.
The Audit Committee has considered whether performance of services other than audit services is
compatible with maintaining the independence of Deloitte.
The Audit Committee has adopted a formal policy concerning the approval of audit and non-audit
services to be provided by the independent registered public accounting firm to the Company. The
policy requires that all services Deloitte, the Companys independent registered public accounting
firm, may provide to the Company, including audit services and permitted audit-related and
non-audit services, be pre-approved by the Audit Committee. The Audit Committee approved all audit
and non-audit services provided by Deloitte during fiscal 2009.
Additional Corporate Governance Matters
Section 16(a) Beneficial Ownership Reporting Compliance
The federal securities laws require the filing of certain reports by officers, directors and
beneficial owners of more than ten percent (10%) of the Companys securities with the Securities
and Exchange Commission and the New York Stock Exchange. Specific due dates have been established
and the Company is required to disclose in this Proxy Statement any failure to file by these dates.
Based solely on a review of copies of the filings furnished to the Company, or written
representations that no such filings were required, the Company believes that all filing
requirements were satisfied by each of the Companys officers, directors and ten percent (10%)
stockholders for fiscal 2009.
Stockholder Proposals
Proposals by stockholders that are intended to be presented at the 2010 annual meeting must be
received by the Company on or before July 2, 2010 to be included in the proxy statement and form of
proxy for the 2010 annual meeting.
Notice of a shareholder proposal for the 2010 annual meeting submitted outside the processes of
Rule 14a-8 of the Securities Exchange Act of 1934, as amended, which is not received on or before
August 11, 2010 will be considered untimely. The Company reserves the right to reject, rule out of
order or take other appropriate action with respect to any proposal that does not comply with
applicable requirements.
28
Other Matters
Management knows of no other matters that will be presented for consideration at the Meeting.
However, if any other matters are properly brought before the Meeting, it is the intention of the
persons named in the proxy to vote the proxy in accordance with their best judgment.
|
|
|
|
|
|
By Order of the Board of Directors,
|
|
|
|
|
|
WALTER L. BENNETT |
|
|
Executive Vice President, Chief
Administrative Officer and Secretary |
|
|
October 30, 2009
29
Appendix A
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OF THOR INDUSTRIES, INC. - CHARTER
As reviewed and approved by the Board of Directors, October 1, 2009
The Audit Committee (the Audit Committee or the Committee) of the Board of
Directors (the Board of Directors or the Board) of Thor Industries, Inc. (the
Company) is established by and among the Board of Directors for the primary purpose of
assisting the Board in:
|
|
|
Overseeing the integrity of the Companys financial statements, |
|
|
|
|
Overseeing the Companys compliance with legal and regulatory requirements, |
|
|
|
|
Overseeing the independent auditors qualifications, independence and performance, |
|
|
|
|
Overseeing the performance of the Companys independent auditor and internal audit
function, |
|
|
|
|
Overseeing the Companys system of disclosure controls and procedures, internal controls
over financial reporting, and compliance with ethical standards adopted by the Company. |
Consistent with this function, the Audit Committee should encourage continuous improvement of, and
should foster adherence to, the Companys policies, procedures, and practices at all levels. The
Audit Committee should also provide for open communication among the independent auditor, financial
and senior management, the internal auditing function, and the Board of Directors. The Audit
Committee has the authority to obtain advice and assistance from outside legal, accounting, or
other advisors as deemed appropriate to perform its duties and responsibilities.
The Company will provide appropriate funding, as determined by the Audit Committee, for
compensation to the independent auditor, to any advisors that the Audit Committee chooses to
engage, and for payment of ordinary administrative expenses of the Audit Committee that are
necessary or appropriate in carrying out its duties.
The independent auditor is ultimately accountable to the Committee, which has the sole authority to
appoint, oversee and, where appropriate, replace the independent auditor. The Committee has direct
responsibility for the compensation and oversight of the work of the independent auditor (including
resolution of disagreements between management and the independent auditor regarding financial
reporting) in connection with preparing or issuing an audit report or performing other audit,
review or attest services for the Company. The independent auditor shall report directly to the
Committee.
The Audit Committee will primarily fulfill its responsibilities by carrying out the activities
enumerated in Section III of this Charter. The Audit Committee will report regularly to the Board
of Directors regarding the execution of its duties and responsibilities.
While the Committee has the responsibilities and authority set forth in this Charter, it is not the
duty of the Committee to plan or conduct audits or to determine that the Companys financial
statements are complete and accurate and are in accordance with generally accepted accounting
principles. It is the responsibility of management and the responsibility of the independent
auditor to audit managements conclusions. Nothing contained in this Charter is intended to expand
applicable standards of liability under statutory or regulatory requirements for the directors of
the Company or members of the Committee.
A-1
II. |
|
COMPOSITION AND MEETINGS |
The Audit Committee will comprise three or more directors as determined by the Board of Directors.
Each Audit Committee member will have no material relationship with the Company (either directly or
as a partner, shareholder, or officer of an organization that has a relationship with the Company
other than as a Board member), as affirmatively determined by the Board of Directors. All committee
members must meet the independence requirements of the New York Stock Exchange and Rule 10A-3(b)(1)
under the Securities Exchange Act of 1934, as amended (the Exchange Act).
All members of the Committee must comply with all financial literacy requirements of the New York
Stock Exchange. At least one member of the Committee shall be an audit committee financial expert
in compliance with the criteria established by the SEC. The existence of such a member, including
his or her name and whether or not he or she is independent, will be disclosed in periodic filings
as required by the SEC. Committee members are encouraged to enhance their familiarity with finance
and accounting by participating in educational programs, including those conducted by the Company
or outside consultants.
The members of the Committee will be elected by the Board at the annual organizational meeting of
the Board of Directors to serve until their successors are elected. Unless a Chairperson is elected
by the full Board, the members of the Committee may designate a Chairperson by majority vote. A
Committee member may be removed at any time (with or without cause) by the Board.
If any director serving on the Committee is also serving on the audit committee of three or more
other public companies, the Board of Directors must make a determination, as promptly as
practicable following the time when the Company first becomes aware of such circumstances and
thereafter on a periodic basis but no less frequently than annually, that such simultaneous service
does not impair the ability of such director to effectively serve on the Committee, and such
determination must be disclosed in the Companys proxy statement issued in connection with the
Companys annual meeting of stockholders.
If a member of the Committee ceases to be independent for reasons outside the members reasonable
control, his or her membership on the Committee may, if so permitted under then applicable NYSE
rules, continue until the earlier of the Companys next annual meeting of shareholders or one year
from the occurrence of the event that caused the failure to qualify as independent.
The Committee will meet four times annually, or more frequently as it deems necessary to fulfill
its responsibilities. Each regularly scheduled meeting will include an executive session of the
Committee absent members of management. As part of its responsibility to foster open communication,
the Committee will meet periodically with management, the director of the internal auditing
function, and the independent auditor in separate executive sessions. In addition, the Committee
will meet with the independent auditor and management to discuss the annual audited financial
statements and quarterly financial statements, including the Companys disclosure under
Managements Discussion and Analysis of Financial Condition and Results of Operations.
The Committee may meet by telephone conference call or by any other means permitted by law or the
Companys Bylaws. A majority of the members of the Committee shall constitute a quorum. The
Committee shall act on the affirmative vote of a majority of members present at a meeting at which
a quorum is present. Subject to the Companys Bylaws, the Committee may act by unanimous written
consent of all members in lieu of a meeting. The Committee shall determine its own rules and
procedures, including designation of a chairperson pro tempore in the absence of the Chairperson,
and designation of a secretary. The secretary need not be a member of the Committee and shall
attend Committee meetings and prepare minutes. The Committee shall keep written minutes of its
meetings, which shall be recorded or filed with the books and records of the Company. Any member
of the Board of Directors shall be provided with copies of such Committee minutes if requested.
The Committee may ask members of management, employees, outside counsel, the independent auditors,
internal auditors or others whose advice and counsel are relevant to the issues then being
A-2
considered by the Committee, to attend any meetings and to provide such pertinent information as
the Committee may request.
The Chairperson of the Committee shall be responsible for leadership of the Committee, including
preparing the agenda, presiding over Committee meetings, making Committee assignments and regularly
reporting the Committees actions to the Board of Directors.
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RESPONSIBILITIES AND DUTIES |
To fulfill its responsibilities and duties, the Audit Committees policies and procedures should
remain flexible to enable the Committee to react to changes in circumstances and conditions so that
it can fulfill its oversight responsibilities. In addition to such other duties as the Board of
Directors may assign from time to time, the Committee will:
Documents/Reports/Accounting Information Review
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Review this Charter periodically, at least annually, and recommend to the Board
of Directors any necessary amendments. |
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Review and discuss with management and the independent auditor the Companys
annual financial statements, quarterly financial statements (prior to the Companys
10-Q filings or release of earnings), and all internal controls reports (or summaries
thereof). Review other relevant reports or financial information submitted by the
Company to any governmental body or the public, including management certifications as
required by the Sarbanes-Oxley Act of 2002 and relevant reports rendered by the
independent auditors (or summaries thereof). |
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Prepare the audit committee report for inclusion in the Companys annual proxy
statement as required by the applicable rules and regulations of the Securities and
Exchange Commission. |
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Recommend to the Board of Directors whether the financial statements should be
included in the Companys Annual Report on Form 10-K. |
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Discuss with management and the independent auditor significant financial
reporting issues and judgments made in connection with the preparation of the Companys
financial statements, including any significant changes in the Companys selection or
application of accounting principles, and the judgments of each of management and the
independent auditor as to the quality and appropriateness of the Companys accounting
principles as applied in its financial reporting. |
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Review and discuss with management and the independent auditor Managements
Report on Internal Control Over Financial Reporting to be included in the Companys
Form 10-K. |
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Discuss earnings press releases, including the type and presentation of
information, paying particular attention to any pro forma or adjusted non-GAAP
information. Such discussions may be in general terms (i.e., discussion of the types of
information to be disclosed and the type of presentations to be made). |
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Discuss financial information and earnings guidance provided to analysts and
ratings agencies. Such discussions may be in general terms (i.e., discussion of the
types of information to be disclosed and the type of presentations to be made). |
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Review the regular internal reports to management (or summaries thereof)
prepared by the internal auditing function, as well as managements response. |
A-3
Independent Auditors
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Appoint (and recommend that the Board of Directors submit for shareholder
ratification, if applicable), compensate, retain (and, where appropriate, replace) and
oversee the work performed by the independent auditor for the purpose of preparing or
issuing an audit report or related work. Review the performance of the independent
auditors and remove the independent auditors if circumstances warrant. The independent
auditor will report directly to the Audit Committee, which has the sole authority to
oversee the resolution of disagreements between management and the independent auditors
if they arise. Discuss with the independent auditor the matters required to be
discussed under Statement on Auditing Standards (SAS) No. 61, as amended by SAS No. 84
and SAS No. 90. |
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In evaluating the independent auditors qualifications, performance and
independence, the Committee should discuss with the independent auditor the
independent auditors independence, take into account the opinions of management
and the internal auditors and consider whether the independent auditors quality
controls are sufficient and whether the provision of permitted non-audit services
is compatible with maintaining the auditors independence. The Committee shall
present its conclusions with respect to the independent auditor to the Board. |
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Review with the independent auditor any problems or difficulties and
managements response; review the independent auditors attestation and report on
managements internal control report prior to the filing of the Companys Form 10-K;
and hold timely discussions with the independent auditors regarding the following: |
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All critical accounting policies and practices; |
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All alternative treatments of financial information within generally accepted
accounting principles that have been discussed with management, ramifications of
the use of such alternative disclosures and treatments, and the treatment
preferred by the independent auditor; and |
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Other material written communications between the independent auditor and
management, including, but not limited to, the management letter and schedule of
unadjusted differences. |
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At least annually, obtain and review a report by the independent auditor
describing: |
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The firms internal quality-control procedures; |
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Any material issues raised by the most recent internal quality-control review
or peer review, or by any inquiry or investigation conducted by governmental or
professional authorities during the preceding five years with respect to
independent audits carried out by the firm, and any steps taken to deal with any
such issues; and |
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All relationships between the independent auditor and the Company, addressing
the matters set forth in Independence Standards Board Standard No. 1. |
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This report should be used to evaluate the independent auditors qualifications,
performance, and independence. Further, the Committee will review the experience and
qualifications of the lead partner and other senior members of the independent audit
team each year and determine that all partner rotation requirements, as promulgated by
applicable rules and regulations, are executed. The Committee will also consider
whether there should be rotation of the firm itself. |
A-4
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Actively engage in dialogue with the independent auditor with respect to any
disclosed relationships or services that may affect the independence and objectivity of
the auditor and take, or recommend that the full Board of Directors take, appropriate
actions to oversee the independence of the outside auditor. |
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Ensure the rotation of the lead audit partner having primary responsibility for
the Companys audit and the audit partner responsible for reviewing the audit as
required by law. |
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Consider whether there should be regular rotation of the Companys independent
auditor. |
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Review and pre-approve (which may be pursuant to pre-approval policies and
procedures) both audit and nonaudit services to be provided by the independent auditor.
The authority to grant pre-approvals may be delegated to one or more designated members
of the Audit Committee whose decisions will be presented to the full Audit Committee at
its next regularly scheduled meeting. Approval of nonaudit services will be disclosed
to investors in periodic reports required by Section 13(a) of the Exchange Act. |
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Set clear hiring policies, compliant with governing laws and regulations, for
employees or former employees of the independent auditor. |
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Discuss with the independent auditor material issues on which the national
office of the independent auditor was consulted by the Companys audit team. |
Financial Reporting Processes, Accounting Policies, and Internal Control Structure
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In consultation with the independent auditor and the internal auditor, review
the integrity of the Companys financial reporting processes (both internal and
external), and the internal control structure (including disclosure controls and
procedures and internal control over financial reporting). |
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Receive and review any disclosure from the Companys CEO or CFO made in
connection with the certification of the Companys quarterly and annual reports filed
with the SEC of: a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting; and b) any fraud, whether or
not material, that involves management or other employees who have a significant role
in the Companys internal controls. |
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Review major issues regarding accounting principles and financial statement
presentations, including any significant changes in the Companys selection or
application of accounting principles; major issues as to the adequacy of the Companys
internal control over financial reporting; any special audit steps adopted in light of
material control deficiencies; and the adequacy of disclosures about changes in
internal control over financial reporting. |
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Review analyses prepared by management (and the independent auditor as noted in
item 12 above) setting forth significant financial reporting issues and judgments made
in connection with the preparation of the financial statements, including analyses of
the effects of alternative GAAP methods on the financial statements. |
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Review the effect of regulatory and accounting initiatives, as well as
off-balance-sheet structures, on the financial statements of the Company. |
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Review and approve all related-party transactions, defined as those
transactions required to be disclosed under item 404 of Regulation S-K. |
A-5
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Establish procedures for the receipt, retention, and treatment of complaints
regarding accounting, internal accounting controls, or auditing matters. |
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26. |
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Establish procedures for the confidential, anonymous submission by Company
employees regarding questionable accounting or auditing matters. |
Internal Audit
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Review and advise on the selection and removal of the internal audit director. |
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Review activities, organizational structure, and qualifications of the internal
audit function. |
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Annually, review and recommend changes (if any) to the internal audit charter. |
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Periodically review, with the internal audit director any significant
difficulties, disagreements with management, or scope restrictions encountered in the
course of the functions work. |
Ethical Compliance, Legal Compliance, and Risk Management
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Establish, review and update periodically a code of business conduct and ethics
and determine whether management has established a system to enforce this code.
Determine whether the code is in compliance with all applicable rules and regulations. |
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Review managements monitoring of the Companys compliance with its code of
business conduct and ethics, and determine whether management has the proper review
system in place such that the Companys financial statements, reports, and other
financial information disseminated to governmental organizations, and the public,
satisfy legal requirements. |
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Review, with the Companys counsel, legal compliance matters, including
corporate securities trading policies. |
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34. |
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Review, with the Companys counsel, any legal matter that could have a
significant impact on the Companys financial statements. |
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Discuss policies with respect to risk assessment and risk management, including
appropriate guidelines and policies to govern the process, as well as the Companys
major financial risk exposures and the steps management has undertaken to control them. |
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36. |
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Obtain from the independent auditor assurance that Section 10A(b) of the
Securities Exchange Act of 1934 has not been implicated. |
Other Responsibilities
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37. |
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Review with the independent auditor, the internal auditing function, and
management the extent to which changes or improvements in financial or accounting
practices have been implemented. |
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38. |
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Conduct an annual performance assessment relative to the Committees purpose,
duties, and responsibilities outlined herein. |
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39. |
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Perform any other activities consistent with this Charter, the Companys
by-laws, and governing law, as the Board of Directors deems necessary or appropriate. |
A-6
IV. |
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MISCELLANEOUS |
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In discharging its responsibilities, the Committee shall have the authority to engage and
determine funding for independent legal, accounting or other advisors (without seeking Board
approval) as the Committee determines necessary or appropriate to carry out its duties. The
Committee may conduct or authorize investigations into or studies of matters within the
Committees scope of responsibilities as described herein. The Company shall provide
appropriate funding, as determined by the Committee, for the payment of (i) compensation to
the independent auditor, and legal, accounting or other advisors engaged by the Committee
and (ii) ordinary administrative expenses of the Committee that are necessary or appropriate
in carrying out its duties. |
A-7
Appendix B
Director Independence Standards
As adopted by the Board of Directors of Thor Industries, Inc.
A director will not be considered independent if, within the preceding three years:
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The director is an employee, or whose immediate family member is an executive officer, of the
Company. |
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The director receives, or whose immediate family member receives, more than $100,000 per year
in direct compensation from the Company, other than director and committee fees and pension
or other forms of deferred compensation for prior service (provided such compensation is not
contingent in any way on continued service). |
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The director is affiliated with or employed by, or whose immediate family member is affiliated
with or employed in a professional capacity by, a present or former internal or external
auditor of the Company. |
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The director is employed, or whose immediate family member is employed, as an executive
officer of another company where any of the Companys present executives serve on that
companys compensation committee. |
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The director is an executive officer or an employee, or whose immediate family member is an
executive officer, of another company that makes payments to, or receives payments from, the
Company for property or services in an amount which, in any single fiscal year, exceeds the
greater of $1 million or 2% of such other companys consolidated gross revenues. |
For relationships not covered by the guidelines above, or for relationships that are covered, but
as to which the Board believes a director may nonetheless be independent, the determination of
independence shall be made by the Board. However, any determination of independence for a director
who does not meet these standards must be specifically explained in the Companys proxy statement
for a meeting of shareholders at which directors are to be elected.
B-1
Proxy Thor Industries, Inc.
ANNUAL MEETING OF STOCKHOLDERS, DECEMBER 8, 2009
The undersigned stockholder of Thor Industries, Inc. hereby appoints WADE F. B.
THOMPSON and PETER
B. ORTHWEIN or each of them, with power of substitution and revocation to each, as proxies to
appear and vote all shares of the Company which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders to be held at 230 Park Avenue, Suite 618,
New York, N.Y., on December 8, 2009, at 1:00 p.m., local time, and any adjournments or
postponements thereof, hereby revoking any proxy heretofore given, notice of which meeting and
related proxy statement have been received by the undersigned.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND SHALL BE VOTED AS
SPECIFIED HEREIN.
IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL #1.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(Continued and to be signed on reverse side.)
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000000000.000000 ext 000000000.000000 ext |
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000000000.000000 ext 000000000.000000 ext |
MR A SAMPLE |
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000000000.000000 ext 000000000.000000 ext |
DESIGNATION (IF ANY) |
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ADD 1
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Electronic Voting Instructions |
ADD 2 |
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You can vote by Internet or telephone! |
ADD 3 ADD 4 ADD 5 ADD 6 |
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Available 24 hours a day, 7 days a week! |
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Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your
proxy. |
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VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. |
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Proxies submitted by the Internet or telephone must be received by 12:00 p.m., ETC, on December 8,
2009. |
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Vote by Internet |
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Log on to the Internet and go to |
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www.envisionreports.com/THO2009 |
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Follow the steps outlined on the secured website. |
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Vote by the telephone |
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Call toll free 1-800-652-VOTE (8683) within the USA, US |
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territories & Canada any time with a touch tone telephone. |
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There is NO CHARGE to you for the call. |
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Follow the instructions provided by the recorded message. |
Using a black ink pen, mark you votes with an X as shown
in this example. Please do not write outside the designated areas. |
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Annual Meeting Proxy Card
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IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
6
A
Proposals The Board of Directors recommends a vote FOR all the nominees listed.
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1. Election of Directors:
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For
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Withhold
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For
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Withhold
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For
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Withhold
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01 Neil D. Chrisman
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o
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02 Alan Siegel
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03 Geoffrey A. Thompson
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In their discretion, upon the transaction of such other business as may come before the meeting.
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B Non-Voting Items
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Change of Address Please print new address below.
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C Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below
Please sign exactly as name(s) appear hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
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Date (mm/dd/yyyy) Please print date below. |
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Signature 1 Please keep signature within the box. |
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Signature 2 Please keep signature within the box. |
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