def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
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(Name of Registrant as Specified In Its Charter)
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TABLE OF CONTENTS
BLACK BOX
CORPORATION
1000 Park Drive
Lawrence, Pennsylvania 15055
Notice of
Annual Meeting of Stockholders
to be held on August 9, 2011
To the Stockholders of
Black Box Corporation:
The Annual Meeting of Stockholders (the Annual
Meeting) of Black Box Corporation (the
Company) will be held at NASDAQ MarketSite, 4 Times
Square (at the corner of
43rd
Street and Broadway, with the entrance on Broadway between
42nd and
43rd
Streets), New York, New York 10036 on Tuesday, August 9,
2011, at 8:00 a.m. Eastern Daylight Time, to consider
and act upon the following matters:
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1.
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The election of the seven (7) persons nominated by our
Board of Directors and named in the attached proxy statement to
serve as members of our Board of Directors;
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2.
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The ratification of the appointment of BDO USA, LLP as the
independent registered public accounting firm of the Company for
the fiscal year ending March 31, 2012;
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3.
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A non-binding advisory vote on compensation of our named
executive officers, as disclosed in the proxy statement; and
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4.
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A non-binding advisory vote on whether an advisory vote on
compensation of named executive officers should be held every
one, two or three years.
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Stockholders also will be asked to consider such other matters
as may properly come before the Annual Meeting. Our Board of
Directors has established the close of business on Monday,
June 13, 2011 as the record date for the determination of
the stockholders entitled to notice of and to vote at the Annual
Meeting.
If you plan to attend the Annual Meeting in person, please
note that you will be required to present a valid picture
identification such as a drivers license or
passport.
IT IS REQUESTED, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, THAT YOU COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AND RETURN IT IN THE ENCLOSED ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
Michael McAndrew, Secretary
June 21, 2011
BLACK BOX
CORPORATION
1000 Park Drive
Lawrence, Pennsylvania 15055
PROXY
STATEMENT FOR ANNUAL MEETING
OF STOCKHOLDERS
August 9, 2011
This proxy statement is being furnished to the holders of common
stock, par value $.001 per share (Common Stock), of
Black Box Corporation, a Delaware corporation (the
Company, we, our or
us), in connection with the solicitation by our
Board of Directors (Board of Directors or
Board) of proxies to be voted at the Annual Meeting
of Stockholders (the Annual Meeting) scheduled to be
held on Tuesday, August 9, 2011, at
8:00 a.m. Eastern Daylight Time, at NASDAQ MarketSite,
4 Times Square (at the corner of
43rd
Street and Broadway), New York, New York 10036, or at any
adjournment thereof. This proxy statement and form of proxy were
first mailed to stockholders on or about June 23, 2011.
Important Notice Regarding the Availability of Proxy
Materials for the Annual Meeting to Be Held on August 9,
2011:
This proxy statement and the Companys 2011 Annual
Report to stockholders are available for you to review online at
www.proxydocs.com/bbox.
Only holders of Common Stock of record as of the close of
business on Monday, June 13, 2011 are entitled to notice of
and to vote at the Annual Meeting and at any adjournment
thereof. On that date, 18,041,526 shares of Common Stock,
each entitled to one vote per share, were outstanding.
All shares of Common Stock represented by valid proxies received
by the Secretary of the Company prior to the Annual Meeting will
be voted as specified in the form of proxy. If no specification
is made, the shares will be voted FOR each of the nominees named
below for election as director; FOR ratification of the
appointment of BDO USA, LLP as our independent registered public
accounting firm for the fiscal year ending March 31, 2012
(Fiscal 2012); FOR approval, on an advisory basis,
of the compensation of our named executive officers as required
to be disclosed in this proxy statement; and FOR, on an advisory
basis, a frequency of every year for future advisory votes on
the compensation of our named executive officers. Unless
otherwise indicated by the stockholder, the proxy card also
confers discretionary authority on the Board-appointed proxies
to vote the shares represented by the proxy on any matter that
is properly presented for action at the Annual Meeting of which
our management had no knowledge prior to the mailing of this
proxy statement. A stockholder giving a proxy has the power to
revoke it at any time prior to its exercise by delivering to the
Secretary of the Company a written revocation or a duly-executed
proxy bearing a later date (although no revocation shall be
effective until actual notice thereof has been given to the
Secretary of the Company) or by attending the meeting and voting
his or her shares in person.
Under our Second Restated Certificate of Incorporation, as
amended (Certificate of Incorporation), Amended and
Restated By-laws, as amended (By-laws), and
applicable state law, abstentions and broker non-votes (which
arise from proxies delivered by brokers and others, where the
record holder has not received direction on voting and does not
have discretionary authority to vote on one or more matters) are
each included in the determination of the number of shares
present for purposes of determining a quorum. At the Annual
Meeting, directors will be elected by a plurality vote, the
advisory vote on the frequency of future advisory votes on the
compensation of our named executive officers will be decided by
a plurality vote and all other matters will be decided by the
affirmative vote of a majority of the votes cast. Abstentions
and broker non-votes are not votes cast and will not be included
in calculating the number of votes necessary for approval of the
matter.
Our Board of Directors unanimously recommends a vote FOR each
of the nominees named below for election as director; FOR
ratification of the appointment of BDO USA, LLP as our
independent registered public accounting firm for the fiscal
year ending March 31, 2012; FOR approval, on an advisory
basis, of the compensation of our named executive officers as
required to be disclosed in this proxy statement; and FOR, on an
advisory basis, a frequency of every year for future advisory
votes on the compensation of our named executive officers.
ANNUAL
MEETING MATTERS
Proposal 1
Election of Directors
Our By-laws provide that the number of directors constituting
our entire Board shall be nine (9), or such other number as
shall be fixed by the stockholders or by our Board. At present,
our Board has fixed the number of directors at seven
(7) members. All of our directors stand for election each
year. Therefore, seven (7) directors are to be elected at
the Annual Meeting to hold office for a term of one
(1) year and until their respective successors are elected
and qualified, subject to the right of our stockholders to
remove any director as provided in our By-laws. Stockholders may
fill any vacancy in the office of a director. In the absence of
a stockholder vote, a vacancy in the office of a director may be
filled by the remaining directors then in office, even if less
than a quorum, or by the sole remaining director. Any director
elected by our Board to fill a vacancy will serve until his or
her successor is elected and qualified or until his or her
earlier death, resignation or removal. If our Board increases
the number of directors, it may fill any vacancy so created.
The holders of Common Stock have one vote for each share owned
as of the record date in the election of directors. The seven
(7) nominees receiving the greatest number of affirmative
votes will be elected as directors for terms expiring in 2012.
Upon recommendation of the Nominating Committee of our Board of
Directors (Nominating Committee), our Board has
nominated the following seven (7) persons for election to
the position of director at the Annual Meeting: William F.
Andrews, R. Terry Blakemore, Richard L. Crouch, Thomas W.
Golonski, Thomas G. Greig, William H. Hernandez and Edward A.
Nicholson, Ph.D. These nominees are all of the directors
currently on our Board. All of these nominees/directors are
independent under the listing standards of The NASDAQ Stock
Market (NASDAQ) except for R. Terry Blakemore as a
result of his position as our President and Chief Executive
Officer (CEO).
The persons named as proxies on the enclosed proxy card were
selected by our Board and have advised our Board that, unless
authority is withheld, they intend to vote the shares
represented by them at the Annual Meeting FOR the election to
our Board of Directors of each of our Boards nominees
named above.
Our Board knows of no reason why any nominee for director would
be unable to serve as director. If, at the time of the Annual
Meeting, any of the named nominees is unable or unwilling to
serve as a director, the persons named as proxies intend to vote
for such substitute as may be nominated by our Board of
Directors.
The following sets forth certain information concerning our
Boards nominees for election to our Board of Directors at
the Annual Meeting:
William F. Andrews, 79, was elected as a director
of the Company on May 18, 1992. Mr. Andrews currently
is Chairman of the Executive Committee of Corrections
Corporation of America (private prisons) and Chairman of Katy
Industries, Inc. (diversified manufacturing company). He has
been a principal with Kohlberg & Co., a private
investment company, since 1995. He is also a director of
Corrections Corporation of America, Katy Industries, Inc.,
OCharleys, Inc. and Trex Company, Inc., all
publicly-held companies, and SVP Holdings Limited.
Qualifications: Mr. Andrews has been a
director of the Company for over 19 years and provides the
Board with his vast knowledge and experience of the Company. He
is a respected business leader with a diverse business
background, bringing to the board multiple perspectives,
including those of an investor and an executive.
Mr. Andrews has served on the boards of over twenty
(20) public and private companies and has been the Chairman
of seven public companies, currently serving as Chairman for two
(2) public companies. Additionally, Mr. Andrews
service as a chief executive officer of other publicly-traded
companies and in leadership roles on public company boards has
resulted in valuable experience in the processes and policies
needed to effectively govern a publicly-traded enterprise.
R. Terry Blakemore, 54, was selected as a member
of the Board on October 13, 2007 and was named President
and Chief Executive Officer of the Company on the same date. He
was elected as a director by our stockholders on August 12,
2008. He had served in the capacity of Interim President and
Chief Executive Officer of the Company from May 21, 2007.
Previously, on May 15, 2007, the Board had named
Mr. Blakemore a Senior Vice President of
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the Company. Prior to becoming a Senior Vice President,
Mr. Blakemore served as a manager of business development
and, prior thereto, as a manager of the Companys Voice
Services business unit. Mr. Blakemore has been with the
Company for 12 years.
Qualifications: Mr. Blakemore is our
Chief Executive Officer and provides the Board with significant
insight and direction regarding the strategic development and
day-to-day
operations of the Company. He also provides the Board with his
more than 25 years of experience in the telephony services
industry, the Companys primary services offering.
Mr. Blakemore serves as a key liaison between the Board and
our key management and facilitates the implementation of the
Boards strategic decisions.
Richard L. Crouch, 64, was elected as a director
on August 10, 2004. Mr. Crouch was a General Partner
with the firm of PricewaterhouseCoopers LLP from 1979 to 2004,
having served as an Audit Partner principally assigned to public
companies. He served in various capacities for the firm,
including service as a regional accounting, auditing and
Securities and Exchange Commission (SEC) services
consultant. He retired from the firm on July 2, 2004.
Qualifications: Mr. Crouch adds
significant financial reporting and management expertise as a
result of his more than 25 years of experience with a large
public accounting firm which provided him with exposure to and
interaction with a variety of industries and companies. He is
one of our audit committee financial experts. His tenure as an
SEC services consultant for PricewaterhouseCoopers LLP gives
Mr. Crouch first-hand insight into the financial reporting
and disclosure obligations of the Company, which is a vitally
important qualification for service on our Board.
Thomas W. Golonski, 68, was selected to be a
director on February 11, 2003 and was elected by our
stockholders on August 12, 2003. Mr. Golonski served
as Chairman, President and Chief Executive Officer of National
City Bank of Pennsylvania and Executive Vice President of
National City Corporation from 1996 to 2005. He retired from
National City in 2005. Mr. Golonski is a director of
several educational and health care organizations and active in
other charitable organizations.
Qualifications: In Mr. Golonskis
18 years as the top executive for National City Bank, he
was directly responsible for all management functions including
human resources, financial and strategic planning and board
development. He also has substantial experience in
organizational governance issues gained during his tenure on the
boards of directors of a university and two regional hospitals.
He adds significantly to the collective financial, operational
and strategic planning expertise of our Board.
Thomas G. Greig, 63, was elected as a director on
August 10, 1999 and appointed as non-executive Chairman of
the Board in May 2004. Mr. Greig has been a Managing
Director of Liberty Capital Partners, a private equity
partnership, since 1998. He is also a director of publicly-held
Rudolph Technologies, Inc., a number of privately-held companies
and a public,
not-for-profit
foundation.
Qualifications: Mr. Greig brings
38 years of financial experience to our Board. His career
has included over 25 years in a corporate finance
environment and 13 years of investment management and
private equity experience. He has served as an audit committee
member for numerous companies, both privately-held and public,
and a public
not-for-profit
foundation. As a result, he has significant expertise and
insight into finance and corporate governance issues that are
invaluable to our Board.
William H. Hernandez, 63, was selected to be a
director on December 3, 2009 and was elected by our
stockholders on August 10, 2010. Mr. Hernandez was the
Senior Vice President, Finance and Chief Financial Officer of
PPG Industries, Inc. (PPG) from 1995 until
October 15, 2009. Prior to assuming those duties in 1995,
Mr. Hernandez served as PPGs Controller from 1990 to
1994 and as Vice President and Controller from 1994. From 1974
until 1990, Mr. Hernandez held a number of positions at
Borg-Warner Corporation. Mr. Hernandez is a Certified
Management Accountant. Mr. Hernandez is a director of USG
Corporation, Eastman Kodak Company and Albermarle Corporation,
all publicly-held companies.
Qualifications: Mr. Hernandez contributes
to the Boards broad experience in corporate finance, risk
management, operations, mergers and acquisitions, strategic
planning and executive compensation. In particular,
Mr. Hernandez is highly qualified in the fields of
accounting, internal controls, investor relations and economics,
all
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of which contribute to effective service on the Board and its
committees. Mr. Hernandez serves on the boards of other
public companies through which he has gained additional
experience in risk management and corporate governance.
Edward A. Nicholson, Ph.D., 71, was elected
as a director on August 10, 2004. Dr. Nicholson served
as President of Robert Morris University from 1989 to 2005 and
is presently a Professor of Management at Robert Morris
University. He is also a director of Brentwood Bank and several
regional economic, charitable and cultural organizations. He has
served a number of businesses and government agencies as a
consultant in the areas of long-range planning, organization
design and labor relations.
Qualifications: Dr. Nicholson brings to
our Board a broad range of academic, business and government
experience. As president of Robert Morris University,
Dr. Nicholson was directly responsible for all management
functions of the university. His experience as a consultant in
the areas of long-range planning, organization design and labor
relations, as well as his service as a director of many
organizations, provide valuable insights to our Board.
Our Board of Directors unanimously recommends that our
stockholders vote FOR each of our Boards nominees for
election to our Board.
Proposal 2
Ratification of the Appointment of the Independent Registered
Public Accounting Firm
In May 2011, the Audit Committee of our Board (Audit
Committee) appointed BDO USA, LLP (BDO) as our
independent registered public accounting firm for Fiscal 2012.
As a sound governance matter, our Audit Committee has determined
to submit the appointment to our stockholders for ratification
at the Annual Meeting.
The affirmative vote of a majority of the votes cast in person
or by proxy at the Annual Meeting is required for the
ratification by our stockholders of such appointment. Unless
otherwise directed by our stockholders, proxies will be voted
FOR the ratification of the appointment of BDO as our
independent registered public accounting firm for Fiscal 2012.
In the event that this appointment is not ratified by the
stockholders, our Audit Committee will consider this vote in
determining its future appointment of our independent registered
public accounting firm. Even if the appointment is ratified, our
Audit Committee, in its discretion, may change the appointment
at any time during the year if it determines that such change
would be in our and our stockholders best interests.
A representative of BDO is expected to be present at the Annual
Meeting, will not be making a statement but will be available to
respond to appropriate questions.
Our Board of Directors unanimously recommends that our
stockholders vote FOR approval of Proposal 2.
Proposal 3
Advisory Vote on Executive Compensation
The Dodd-Frank Wall Street Reform and Consumer Protection Act
(the Dodd-Frank Act), enacted in July 2010, requires
that we provide our stockholders with the opportunity to vote to
approve, on a nonbinding, advisory basis, the compensation of
our named executive officers as disclosed in this proxy
statement. This Say on Pay vote is not intended to
address any specific item of compensation, but rather the
overall compensation of our named executive officers and our
compensation philosophy, policies and practices as disclosed in
this proxy statement pursuant to the compensation disclosure
rules of the SEC, including the Compensation Discussion
and Analysis (CD&A) section set forth
in this proxy statement under the caption Executive
Compensation and Other Information and the
compensation tables and narrative following the CD&A.
We believe that our CD&A and other compensation disclosures
included in the proxy statement evidence a sound and prudent
compensation philosophy and set of policies and practices and
that our compensation decisions are consistent with that
philosophy and those policies and practices.
In light of the foregoing considerations, we are asking our
stockholders to indicate their approval, on an advisory basis,
of the compensation of our named executive officers as disclosed
in this proxy statement pursuant to the compensation disclosure
rules of the SEC, including the CD&A and the compensation
tables and narrative following the CD&A. Although this is
an advisory vote which will not be binding on the Compensation
Committee
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of the Board (Compensation Committee) or the Board,
the Compensation Committee and the Board will carefully review
the results of the stockholder vote and consider
stockholders concerns in future determinations concerning
executive compensation.
Our Board of Directors unanimously recommends that our
stockholders vote FOR approval of the compensation of our named
executive officers as disclosed in this proxy statement.
Proposal 4
Advisory Vote on Frequency of Advisory Vote on Executive
Compensation
The Dodd-Frank Act also requires that we give stockholders the
opportunity to inform us as to how often we should include a
Say on Pay proposal, similar to Proposal 3, in
our proxy statements for future annual stockholder meetings.
Under this Proposal 4, stockholders may indicate their
preference, on an advisory basis, for including a Say on
Pay proposal in our future proxy statements every year,
every two (2) years or every three (3) years, or may
abstain from voting on the frequency of future Say on
Pay proposals.
After careful consideration, our Board, upon the recommendation
of our Compensation Committee, has determined that an advisory
vote on executive compensation every year is the best approach
for the Company. The annual advisory vote on executive
compensation will allow our stockholders to provide timely,
direct input on the Companys most current executive
compensation philosophy, policies and practices and allow the
Compensation Committee and the Board to better understand our
stockholders views. The Company recognizes that
stockholders may have different opinions as to the appropriate
frequency for advisory votes on named executive officer
compensation, and we will carefully review the voting results on
this proposal.
This vote is advisory and not binding on the Company or the
Board, but the Board and the Compensation Committee will take
into account the outcome of the vote when making a decision as
to how often the Company will conduct its advisory votes on the
compensation of our named executive officers.
As noted above, stockholders will be able to specify one of four
choices for this proposal on the form of proxy:
1 Year, 2 Years,
3 Years or abstain. Stockholders are not voting
to approve or disapprove the Boards recommendation.
Our Board of Directors unanimously recommends that our
stockholders vote for 1 Year for the frequency
of future executive compensation advisory votes.
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BOARD OF
DIRECTORS AND CERTAIN BOARD COMMITTEES
Our Board of Directors held seven (7) meetings during the
fiscal year ended March 31, 2011 (Fiscal 2011).
During Fiscal 2011, each director attended not fewer than
seventy-five percent (75%) of the meetings of our Board and each
committee on which such director served during the period in
which such director served on our Board. Executive sessions of
the non-employee members of our Board are scheduled for each
regular Board meeting and many committee meetings and many
regular Board meetings and certain committee meetings include
such an executive session.
Stockholders can communicate with our Board or individual
directors by writing to the Companys Secretary at: Black
Box Corporation, 1000 Park Drive, Lawrence, Pennsylvania 15055.
Our Board believes that our annual meetings also are appropriate
for stockholder communications with our Board. Our Board
strongly encourages board member attendance at all meetings,
including annual meetings with stockholders. All current
directors attended the annual meeting of stockholders held in
August 2010.
Board
Leadership Structure and Role in Oversight of Risk
Management
We have separate Chief Executive Officer and Chairman of the
Board of Directors positions. Our Board believes this is
currently the most appropriate structure for us because it
allows each person to focus on their respective roles.
Mr. Blakemore, as Chief Executive Officer, can focus on the
strategic direction of the Company and the
day-to-day
leadership and performance of the Company, while Mr. Greig,
as Chairman of our Board of Directors, focuses on providing
guidance to the Chief Executive Officer and presiding over
meetings of the Board. Our Board has adopted a resolution that
the Chairman of the Board shall be an independent director under
the applicable SEC and NASDAQ rules. Our Board believes this
leadership structure has enhanced our Boards oversight of,
and independence from, our management, the ability of our Board
to carry out its roles and responsibilities on behalf of our
stockholders and our overall corporate governance.
Our management is responsible for the
day-to-day
management of the risks we face, while our Board, as a whole and
through its committees, has responsibility for the oversight of
risk management. No single Board committee, however, is
responsible for overall risk oversight. Rather, each Board
committee identifies and assesses Company risk, as appropriate,
within its given area of responsibility, and any such identified
risk is reported to the Board as part of the governance process.
Our internal audit department conducts an annual risk assessment
to identify the most significant risks to which we are subject.
The results of this assessment are compiled and reported to our
Audit Committee and internal audit makes recommendations
regarding remedial actions where necessary. Our Audit Committee
subsequently reports the results of the assessment, as well as
any remediation of the material risks identified in the risk
assessment, to our Board.
Our Board of Directors has four (4) standing committees:
the Audit Committee, the Compensation Committee, the Nominating
Committee and the Governance Committee of the Board
(Governance Committee).
Audit
Committee
Our Audit Committee consists of Mr. Richard L. Crouch, as
chair, Mr. Thomas G. Greig and Mr. William H.
Hernandez. Each member of this committee is independent under
NASDAQs listing standards for audit committee members.
Our Audit Committees duties include:
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sole authority and direct responsibility over the selection
(subject to stockholder ratification if the committee so elects)
of our independent registered public accounting firm
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evaluation, retention and replacement of our independent
registered public accounting firm
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responsibility for determining the compensation and other terms
of engagement of such independent auditors
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Our Audit Committee has such other duties and responsibilities
as are set forth in its written charter adopted by our Board, a
copy of which is posted in the About Investor
Relations Corporate Governance section of our
Web site at
http://www.blackbox.com.
These other duties and responsibilities include pre-approval of
all audit
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services and permitted non-audit services, oversight of the
independent auditors, review of financial statements and SEC
filings, review of the lead audit partner, review of the
auditors independence, discussions with the auditors
regarding the planning and scope of the audit, discussions
regarding our internal controls over financial reporting and the
establishment of procedures for the receipt, retention and
treatment of complaints regarding accounting, internal controls
and auditing and the confidentiality thereof. Our Audit
Committee has delegated authority for pre- approval of audit
services and permitted non-audit services to its chair, subject
to subsequent ratification of such pre-approval at the next
subsequent regular meeting of our Audit Committee.
All services performed by BDO during Fiscal 2011 that were
required to be pre-approved under the SECs and
NASDAQs rules and the Audit Committees charter were
either pre-approved by our Audit Committee or pre-approved by
our Audit Committee chair and later ratified by our Audit
Committee.
Our Board has determined that all of the members of our Audit
Committee, Messrs. Crouch, Greig and Hernandez, qualify as
audit committee financial experts within the meaning of SEC
regulations and that they have the requisite level of financial
sophistication required under NASDAQs listing standards.
Our Board has also determined that Messrs. Crouch, Greig
and Hernandez are independent within the meaning of SEC
regulations.
Our Audit Committee met six (6) times in Fiscal 2011.
Compensation
Committee
Our Compensation Committee consists of Mr. Thomas W.
Golonski, as chair, Mr. William F. Andrews and Edward A.
Nicholson, Ph.D. Each member of this committee is
independent under NASDAQs listing standards.
Our Compensation Committees duties include:
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reviewing and recommending to our Board the total compensation
of our executive officers
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administering our stock option plans and our long-term incentive
plan
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Our Compensation Committee operates under a written charter
adopted by our Board, a copy of which is posted in the
About Investor Relations Corporate
Governance section of our Web site. For a description of
our Compensation Committees processes and procedures for
the consideration and determination of executive officer
compensation, see the Compensation Discussion and
Analysis section of this proxy statement.
In Fiscal 2011, our Compensation Committee continued to engage
Towers Watson & Co. (Towers Watson), as
its independent consultants, to assist in the further
development of our executive compensation programs. Such
services included (i) providing a competitive assessment of
the total direct compensation (e.g., sum of base salary,
annual bonus and long-term incentive opportunity) for our named
executive officers and other key employees relative to a peer
group and general survey data; (ii) providing an assessment
of the appropriateness of incentive plan targets;
(iii) advising our Compensation Committee regarding design
changes to compensatory programs and the development of new
programs based on the Companys strategic goals,
competitive assessment and regulatory changes;
(iv) assisting our Compensation Committee in analyzing the
effectiveness of the Companys compensation programs;
(v) a review of our managements proposals on behalf
of our Compensation Committee; (vi) an analysis of the
Companys share utilization for equity-based compensation
in view of institutional investor guidelines;
(vii) informing our Compensation Committee of emerging
trends in executive compensation; (viii) advising on stock
ownership or retention guidelines for our named executive
officers; and (ix) the other services described below in
the Compensation Discussion and Analysis
section of this proxy statement, including assisting our
Compensation Committee in conducting a risk assessment regarding
our compensation practices and policies. The scope of services
of any executive compensation consultants is approved by our
Compensation Committee or its chair. As noted below, Towers
Watson also was engaged by our Governance Committee during
Fiscal 2011 to provide information regarding competitive
director compensation data. During Fiscal 2011, Towers Watson
performed no other services for the Company except to assist us
with the valuation of certain of our performance share awards.
During Fiscal 2011, Towers Watsons compensation consulting
team advising the Company separated from Towers Watson and
joined a newly-formed compensation consulting firm, Pay
Governance, LLC (PayGovernance). For Fiscal 2012,
the Compensation Committee engaged PayGovernance to perform the
services previously provided by Towers Watson and other services
as described herein. During Fiscal
7
2012, Towers Watson was engaged to perform a calculation of the
results of the performance criteria of certain of our
performance share awards.
Our Compensation Committee met four (4) times in Fiscal
2011.
Nominating
Committee
Our Nominating Committee consists of Edward A.
Nicholson, Ph.D., as chair, Mr. Richard L. Crouch and
Mr. Thomas G. Greig. Each member of this committee is
independent under NASDAQs listing standards.
Our Nominating Committees duties include:
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identifying and evaluating potential candidates for any Board
vacancies, including any individuals recommended by committee
members, other Board members, our management or our current
stockholders or identified by third-party executive search firms
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recommending to our Board individuals to be nominated for
election as directors by stockholders at our annual meeting
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recommending to our Board, from time to time, individuals to be
elected by it to fill Board vacancies
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This committee considers the independence, experience relative
to our business and the needs of our Board, diversity and the
ability to represent our stockholders in evaluating potential
nominees. Potential Board members should show a willingness to
fully participate in Board meetings, a proven track record of
career accomplishments, the ability to make sound judgments and
leadership qualities. Although the Company does not have a
specific diversity policy as it relates to the evaluation of
potential Board members, the Nominating Committee charter
provides that the Nominating Committee is to consider diversity
when evaluating candidates. Accordingly, the Nominating
Committee strives to identify potential Board members with a
diverse array of talents, backgrounds and perspectives.
It is our Nominating Committees policy to consider
stockholder proposals for nominees for election as directors
that are nominated in accordance with our Certificate of
Incorporation and our By-laws, and other applicable laws,
including the rules and regulations of the SEC and any stock
market on which our stock is listed for trading or quotation.
Generally, such recommendations made by a stockholder entitled
to notice of, and to vote at, the meeting at which such proposed
nominee is to be considered are required to be written and
received by the Secretary of the Company within a prescribed
time period prior to the annual or special meeting. See the
Stockholder Nominations and Proposals section
of this proxy statement for a description of the procedures to
be followed in order to submit a recommendation for a nominee.
Our Nominating Committee operates under a written charter
adopted by our Board, a copy of which is posted in the
About Investor Relations Corporate
Governance section of our Web site.
Our Nominating Committee met three (3) times in Fiscal 2011.
Governance
Committee
Our Governance Committee consists of Mr. William F.
Andrews, as chair, Mr. Thomas W. Golonski and
Mr. William H. Hernandez. Each member of this committee is
independent under NASDAQs listing standards.
Our Governance Committees duties include:
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responsibility for reviewing, on an ongoing basis, the corporate
governance practices and principles established and implemented
by our Board and our management
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monitoring trends and regulatory requirements in corporate
governance and recommending to our Board any changes in our
corporate governance practices and functions based upon such
trends and regulatory requirements
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performing an annual evaluation of the objectives and
performance of the members of our Board in connection with its
review of the compensation paid to Board members
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overseeing our managements continuity planning process and
advising the Board regarding our managements succession
planning
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During Fiscal 2011, our Governance Committee engaged Towers
Watson to provide information regarding competitive director
compensation data, including identification of an appropriate
peer group for comparison purposes, an analysis of director
compensation levels and compensation vehicles and programs and
market-competitive compensation data. In Fiscal 2011, Towers
Watson also advised on stock ownership or retention guidelines
for our non-employee directors. For Fiscal 2012, our Governance
Committee engaged PayGovernance to provide these services.
Our Governance Committee operates under a written charter
adopted by our Board, a copy of which is posted in the
About Investor Relations Corporate
Governance section of our Web site.
Our Governance Committee met four (4) times in Fiscal 2011.
9
LITIGATION
INVOLVING DIRECTORS AND OFFICERS
In November 2006, two stockholder derivative lawsuits were filed
against the Company itself, as a nominal defendant, and several
of our current and former officers and directors, including
Michael McAndrew, Francis Wertheimber, William F. Andrews and
Thomas G. Greig, in the United States District Court for the
Western District of Pennsylvania (the District
Court). The two complaints were substantially identical
and contained allegations regarding and related to backdated
stock options. The two lawsuits were consolidated into a single
action as In re Black Box Corporation Derivative
Litigation, Master File
No. 2:06-CV-1531-JFC,
and plaintiffs filed an amended consolidated shareholder
derivative complaint on August 31, 2007. During the second
quarter of the fiscal year ended March 31, 2010
(Fiscal 2010), the Company recorded expense of
$3,992,000 in connection with an agreement in principle for
settlement of this action and related matters arising out of the
Companys review of its historical stock option practices.
During the third quarter of Fiscal 2010, certain of the parties
to this action and certain insurers entered into a Memorandum of
Understanding regarding this settlement. On January 22,
2010, the parties to this action and certain insurers executed a
Stipulation of Compromise and Settlement (the
Stipulation) and the parties to the action executed
a Joint Motion for Preliminary and Final Approval of Proposed
Settlement (the Joint Motion), and such documents
were filed with the District Court. On January 27, 2010,
the District Court entered an order preliminarily approving the
proposed settlement and setting forth a process and scheduling a
hearing for consideration of final approval of the proposed
settlement (the Preliminary Order). Pursuant to the
Preliminary Order, on February 1, 2010, the Company filed
with the SEC a Current Report on
Form 8-K
regarding the proposed settlement and filed, as exhibits to such
Form 8-K,
the Joint Motion, the Stipulation, the Preliminary Order, a
Notice of Proposed Settlement of Derivative Action and of
Settlement Hearing (the Notice) and a proposed Order
of Dismissal and Judgment. Also on February 1, 2010, the
Company issued a press release including the Notice. On
March 19, 2010, the District Court approved the settlement
and executed an Order of Dismissal and Judgment. On
April 20, 2010, no party having appealed the District
Courts Order of Dismissal and Judgment, the matter
concluded. Thereafter, the Company received and paid the amounts
due to and from it in accordance with the Stipulation.
Section 16(a)
Beneficial Ownership Reporting Compliance
During Fiscal 2011, one (1) report with respect to one
(1) transaction was not timely filed for each of
Messrs. Blakemore and McAndrew regarding the mandatory tax
withholding of shares of Common Stock by the Company upon the
vesting of restricted stock units.
POLICIES
AND PROCEDURES RELATED TO THE APPROVAL
OF TRANSACTIONS WITH RELATED PERSONS
Our policies and procedures for review, approval or ratification
of transactions with related persons are not contained in a
single policy or procedure; instead, relevant aspects of such
program are drawn from various corporate documents. Most
importantly, our Audit Committees charter provides that
our Audit Committee must review and, if appropriate, approve or
ratify all transactions between us and any related persons.
Our Standards of Business Conduct require that all of our and
our subsidiaries directors, officers and employees refrain
from activities that might involve a conflict of interest.
Additionally, our Code of Ethics provides that each of our and
our subsidiaries directors, officers and employees must
openly and honestly handle any actual, apparent or potential
conflict between that individuals personal and business
relationships and our interests. Before making any investment,
accepting any position or benefit, participating in any
transaction or business arrangement or otherwise acting in a
manner that creates or appears to create a conflict of interest,
such person must make a full disclosure of all relevant facts
and circumstances to, and obtain the prior written approval of,
our Chief Financial Officer or our General Counsel. Our Chief
Financial Officer and our General Counsel make reports to our
Audit Committee, pursuant to the terms of its charter, regarding
compliance with our Code of Ethics. Further, our Chief Financial
Officer makes reports to our Audit Committee with respect to
proposed related-party transactions for which that
committees approval would be required.
We did not participate in any transactions with related persons
during Fiscal 2011 and there are no currently-proposed
transactions with related persons.
10
COMPENSATION
OF DIRECTORS
The following table sets forth the compensation of our
non-employee directors in Fiscal 2011:
DIRECTOR
COMPENSATION FISCAL 2011
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Name(1)
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Fees Earned
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Stock
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Total
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or Paid
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Awards(4)(5)(6)
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($)
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in
Cash(2)(3)
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($)
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($)
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William F. Andrews
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57,000
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92,160
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149,160
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Richard L. Crouch
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75,000
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92,160
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167,160
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Thomas W. Golonski
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70,000
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92,160
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162,160
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Thomas G. Greig
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135,000
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92,160
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227,160
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William H. Hernandez
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61,000
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92,160
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153,160
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Edward A. Nicholson, Ph.D.
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60,000
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92,160
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152,160
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(1)
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R. Terry Blakemore was a director during Fiscal 2011. The
compensation received by Mr. Blakemore for Fiscal 2011 is
reported in the Summary Compensation Table
Fiscal 2011, Fiscal 2010 and Fiscal 2009 and other
tables in this proxy statement. He did not receive any
additional compensation in connection with his service on our
Board. |
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(2)
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For Fiscal 2011, each non-employee director received an annual
fee of $35,000, paid quarterly. Our non-executive Chairman of
the Board also received an annual fee of $75,000, paid
quarterly. The chairperson of each of our Audit Committee and
Compensation Committee received an annual fee of $15,000, paid
quarterly. The chairperson of each of our Nominating Committee
and Governance Committee received an annual fee of $5,000, paid
quarterly. In May 2011, the annual fee for the chairperson of
each of our Nominating Committee and Governance Committee was
increased to $7,500, paid quarterly. No other changes were made
to the fees to be paid to our non-employee directors as of the
date of this proxy statement. |
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(3)
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During Fiscal 2011, each director received a fee of $2,000 for
each Board meeting attended in person and a fee of $1,000 for
each Board meeting attended by telephone. Audit Committee
members received a fee of $1,500 for each meeting of the
committee attended in person or by telephone during Fiscal 2011.
Members of our Compensation Committee, Governance Committee and
Nominating Committee received a fee of $1,000 for each meeting
of the respective committee attended in person or by telephone
during Fiscal 2011. These fees remain in effect as of the date
of this proxy statement. |
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(4)
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These restricted stock unit awards were granted under the 2008
Long-Term Incentive Plan (the Incentive Plan). As of
March 31, 2011, there were 1,223,560 shares of Common
Stock available for issuance under the Incentive Plan (subject
to appropriate adjustments in the event of stock splits, stock
dividends and similar dilutive events). |
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(5)
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The values in this column are based on the aggregate grant date
fair values of these awards computed in accordance with
Financial Accounting Standards Board Accounting Standards
Codification Topic 718 (FASB ASC Topic 718),
excluding the effect of estimated forfeitures. In May 2011,
based on the advice of its compensation consultants as to the
majority practice, and to be consistent with the methodology to
be used by the Compensation Committee in determining the equity
awards to be made to our named executive officers, the
Governance Committee modified the methodology for determining
the size of the annual equity award for non-employee directors
to be recommended by the Governance Committee from a fixed
share-based number to a fixed dollar amount converted into
shares based on the fair market value of the Common Stock on the
date of grant. This methodology ensures that an increase in the
price of the Common Stock will not result in an automatic
increase in non-employee director compensation. Consistent with
the foregoing, in May 2011, our Compensation Committee approved,
based on the recommendation of our Governance Committee after
its review of information provided by its compensation
consultants, and after Board approval, an immediately-vested
restricted stock unit award with a value of $100,000 for each
non-employee |
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director. This amount is consistent with the value of the equity
award in Fiscal 2010. Based on the closing price of the Common
Stock on the date of grant (and rounding to the nearest ten
shares), this grant resulted in a restricted stock unit award to
each non-employee director for 3,090 shares of the Common
Stock which vested immediately upon grant. Such grant was
consistent with the recommendation of the compensation
consultants. |
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(6)
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The following table sets forth the outstanding stock options,
both exercisable and unexercisable, held by each non-employee
director as of March 31, 2011: |
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Name
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Outstanding
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Options
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(#)
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William F. Andrews
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42,000
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Richard L. Crouch
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26,000
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Thomas W. Golonski
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37,000
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Thomas G. Greig
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42,000
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William H. Hernandez
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Edward A. Nicholson, Ph.D.
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26,000
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To further achieve the objective of more closely aligning the
interests of our non-employee directors with those of our
stockholders, upon the recommendation of our Governance
Committee after discussions with our Governance Committees
compensation consultants, our Board has adopted stock retention
guidelines for our non-employee directors requiring them to
hold, until retirement, but subject to diversification at
age 60, 50% of the net, after-tax shares of Common Stock
issued to them pursuant to performance share awards and
restricted stock
awards/units.
All of our non-employee directors are in compliance with these
ownership guidelines.
12
EXECUTIVE
COMPENSATION AND OTHER INFORMATION
COMPENSATION
DISCUSSION AND ANALYSIS
Executive
Summary
The following provides an overview of our executive compensation
philosophy and programs as detailed further in this Compensation
Discussion and Analysis:
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The objectives of our executive compensation program are to link
pay with performance by rewarding the achievement of our short-
and long-range goals, recognizing individual executive
performance and contributions and promoting increased value
creation for our stockholders.
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We generally target base salaries below the market median, while
generally targeting annual cash incentives and long-term equity
incentives modestly above the market median, providing for total
compensation at slightly above the market median but with a
substantial amount of compensation at-risk.
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The compensation program for our named executive officers
consists of the following three primary components: base salary,
a cash-based annual incentive award with multiple performance
metrics and equity-based long-term incentive awards consisting
of stock options, restricted stock units and performance share
awards.
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Our Compensation Committee and other Board members attend and
participate in strategic planning meetings presented by our
named executive officers and other key business leaders prior to
the Board review and approval of the Companys operating
plan for the fiscal year. This reviewed and approved operating
plan then forms the basis for the determination of the
appropriate performance measures for our annual and certain
long-term incentive awards.
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Our annual incentive program is based on four (4) measures
of annual financial performance: operating earnings per share,
adjusted operating margin percent, adjusted EBITDA and days
sales outstanding (DSOs), which are critical to
successful performance of the business consistent with our
pay-for-performance
philosophy. This award is 100% at-risk.
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Our long-term incentive program is intended to drive the
achievement of critical long-term business objectives and align
our managements interests with those of our stockholders.
The mix of long-term awards serves a number of compensation
objectives, with 50% of the target value of each named executive
officers long-term incentive award granted in the form of
performance shares, 30% of the value granted in the form of
stock options and 20% of the value granted in the form of
time-vested restricted stock units. Thus, 80% of our long-term
incentive awards are at-risk.
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All of our long-term equity awards are settled in stock and, as
a result, link the named executive officers compensation
to future stock price performance and, if earned, increase the
named executive officers stock ownership. The named
executive officers are subject to stock retention guidelines
described herein with respect to these performance share awards
and restricted stock units, thus aligning the interests of our
named executive officers with those of our stockholders.
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Our named executive officers are not provided with perquisites
(other than an automobile benefit to the Senior Vice President
who is a local national in Japan, which is a customary practice
in that country).
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In Fiscal 2011, the Company achieved record revenues, continued
strong cash flows and increased earnings. Consequently, Company
performance relative to the performance metrics governing our
annual incentive awards resulted in appropriate rewards modestly
above target payout to each of our named executive officers. Our
stock price performance during Fiscal 2010 and Fiscal 2011,
however, while providing annualized stockholder returns of
approximately 30%, was below the
25th percentile
of a peer group of companies, resulting in no payout of our
total shareholder return (TSR) performance share
awards, thus demonstrating alignment with our
pay-for-performance
philosophy.
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For Fiscal 2012, at the request of our management, we increased
the performance requirements for our TSR-based performance
shares and provided a cap on payouts in the event that our TSR
is negative over the three-year performance period.
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Our Compensation Committee, with the assistance of our
compensation consultants, undertook a
pay-for-performance
analysis of our CEOs compensation in order to evaluate
alignment of our CEOs
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compensation with performance as measured by actual compensation
paid and performance relative to a peer group of companies. This
analysis is described below.
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Role of
Our Compensation Committee and Our Compensation
Philosophy
Our Compensation Committee evaluates and recommends to our Board
our compensation philosophy and practices and is charged with
administering our compensation program for our named executive
officers: R. Terry Blakemore, our President and Chief Executive
Officer; Michael McAndrew, our Executive Vice President, Chief
Financial Officer, Treasurer and Secretary; Kenneth P. Davis,
our Vice President Voice Services North, Europe and
Latin America and Francis W. Wertheimber, our Senior Vice
President. Mr. Davis became an executive officer on
November 1, 2010 and, thus, was not a named executive
officer with respect to the compensation decisions discussed
below made in May 2010.
Our Compensation Committee believes that the total executive
compensation package paid to our named executive officers should
be designed to
pay-for-performance
by rewarding the achievement of our short- and long-range goals,
recognizing individual executive performance and contributions
and promoting increased value creation for our stockholders.
Objectives
of Our Compensation Program
In line with our philosophy, our Compensation Committee has
developed the following objectives for our compensation program
which are to:
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attract, develop and retain high quality executives to manage
and grow our business
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link a significant portion of an executives pay to the
performance of the organization through the use of at-risk
performance-based compensation
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Our compensation program rewards our named executive officers
and other key employees for:
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outstanding contributions to the achievement of our goals and
overall success, particularly growth in stock price, annual
profits and cash flow
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successful completion of acquisitions of targeted companies and
their integration into the Company
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The Compensation Committee has identified a number of key
performance metrics that it believes represents value creation
for our stockholders. These metrics have been incorporated into
the incentive arrangements for our named executive officers in
Fiscal 2011 and Fiscal 2012 as follows:
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Performance Metric
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Annual Incentive Cash Bonus
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Equity-Based Long-Term
Incentive
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Operating Earnings Per Share
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X
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Adjusted Operating Margin Percent
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X
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Adjusted EBITDA
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X
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X
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DSOs
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X
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TSR
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X
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Components
of Our Executive Compensation Program
Our Compensation Committee has designed a compensation package
that includes the following elements positioned against the
competitive market as follows:
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base salary positioned below the market median
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annual incentive cash bonus opportunity positioned modestly
above the market median
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long-term incentive values positioned modestly above the market
median
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In designing our compensation program, our Compensation
Committee, in line with our
pay-for-performance
philosophy, had historically placed more emphasis upon at-risk,
variable compensation in the form of annual
14
performance cash bonuses
and/or
grants of stock options. Our Compensation Committees and
Boards philosophy has been to approve below-market base
salaries and modestly above-market incentive compensation
opportunities for our named executive officers. Our Compensation
Committees goal is to deliver total compensation to our
named executive officers (base salary plus annual cash bonus
plus long-term incentives) modestly above the market median with
a focus on performance-based incentives.
Beginning in the fiscal year ended March 31, 2008
(Fiscal 2008) our Compensation Committee extensively
re-evaluated the nature and structure of our executive
compensation program and the relative mix of cash and equity
incentives to be awarded to our named executive officers and
other key employees. In connection with this evaluation, our
Compensation Committee retained the services of outside
compensation consultants to assist with a review of peer and
broad market executive compensation data and to help us
determine how our executive compensation program, given our
philosophy and culture, should be structured to achieve our
objectives. The structure of our executive program that was
established for the fiscal year ended March 31, 2009
(Fiscal 2009), providing for a base salary, an
annual cash incentive and a long-term incentive, provided the
foundation for the executive compensation decisions made for
Fiscal 2011 and Fiscal 2012 described below. The elements and
objectives of our compensation program are presented in the
following chart:
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Compensation
Element
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Description
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Form
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Objective
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Base salary
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Fixed payment positioned below the median of competitive market
data as adjusted for level of responsibility, experience and
qualifications
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§ Cash
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§ Support
talent retention and attraction
§ Provide
a dependable source of income
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Annual
Incentive Plan
(AIP)
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Variable based on the achievement of annual financial objectives
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§ Cash
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§ Link
pay with Company performance
§ Drive
the achievement of short-term business objectives
§ Incent
the achievement of our annual operating plan
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Long-Term
Incentive
Program
Awards
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Variable based on the achievement of longer-term financial goals
and stockholder value creation
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§ 50%
- Performance share awards payable in Common Stock; 30% - stock
options granted at fair market value; 20% - time-vested
restricted stock units payable in Common Stock
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§ Link
pay with Company and stock price performance
§ Drive
the achievement of longer-term business objectives and goals and
focus on stock price appreciation
§ Align
with stockholder interests
§ Build
ownership in the Company through increased holdings of Common
Stock
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Overview
of Annual Setting of Executive Compensation
Beginning in Fiscal 2008, our Compensation Committee sought the
advice of outside compensation consultants to assist it with
collecting and reviewing information regarding the executive
compensation programs of a selected group of peer companies (the
list of which for Fiscal 2011 is below) and to provide it with
more general survey data regarding executive compensation
practices for Fiscal 2009 and beyond. The role of the outside
compensation consultants in our executive compensation processes
and procedures is described under Board of Directors
and Certain Board Committees Compensation
Committee. Our Chief Executive Officer and our Chief
Financial Officer also consult with our Compensation Committee
regarding each element of our executive compensation program. At
our Compensation Committees request, these executives
provide recommendations to our Compensation Committee related to
appropriate financial performance metrics and goals for the
Company to
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align compensatory programs with our overall business strategy.
Our Compensation Committee also reviews with our Chief Executive
Officer each element of compensation to be paid to our named
executive officers (other than our Chief Executive Officer) and
other key employees. Our Compensation Committee generally holds
special meetings to prepare for its annual compensation
recommendations. Our Compensation Committee is provided with and
reviews survey data provided by our compensation consultants,
our managements recommendations, tally sheets of our named
executive officers historical compensation and other data
and utilizes the committee members collective knowledge of
industry and market pay practices of similarly-situated
executives, along with our overall compensation philosophy, in
connection with determining its executive compensation
recommendations for each executive officer. At certain of its
meetings, the Compensation Committee holds executive sessions,
which exclude our management and, subject to the Compensation
Committees discretion, include its independent
consultants. Our Compensation Committee then submits its
recommendations to our Board for review and approval.
We do not have a policy of reducing awards based upon the
amounts realized from prior compensation. Our Compensation
Committee believes that the intended value of an award on its
grant date reflects both the possible upside and the possible
downside of any such award. Likewise, we do not have a policy of
increasing awards based upon amounts not realized from prior
compensation awards.
Relationship
between Pay and Performance
One of the main objectives of our compensation philosophy is to
align our named executive officers compensation with the
performance of the Company
(pay-for-performance).
Our Compensation Committee recently reviewed the relationship
between our Chief Executive Officers realizable
compensation and the Companys performance from Fiscal 2009
through Fiscal 2011. The analysis, which was prepared by the
Compensation Committees compensation consultants, compared
our Chief Executive Officers realizable compensation and
the Companys performance, relative to a peer group, in
order to assess whether the Companys performance and
realizable compensation for our Chief Executive Officer are
aligned. The peer group utilized for this analysis is the same
peer group utilized for the Fiscal 2012 compensation decisions
identified below.
Realizable compensation is defined as (i) base salary,
(ii) actual bonus earned, (iii) aggregate current
value of restricted stock grants made during the period,
(iv) aggregate
in-the-money
value of stock option grants made during the period and
(v) for performance plans, the actual payouts for awards
beginning and ending during the three-year performance period
and the estimated payout for unvested awards granted during the
three-year performance period. Realizable compensation was
calculated in the same manner for our CEO and the CEOs of our
peer group companies. The realizable value of long-term
equity-based awards was valued using each companys closing
stock price on March 31, 2011.
Financial and shareholder performance for the Company and the
peer group were evaluated over the same three-year period as
realizable compensation using the following four
(4) performance measures: TSR; revenue growth; EBITDA
growth; and operating margin. These measures were selected
because they are used in the Companys short-term
and/or
long-term incentive plans and were considered by the
Compensation Committees compensation consultants to be
reasonable indicators of Company performance. The Companys
percentile ranking for each performance measure relative to the
peer group was averaged to form a composite performance ranking.
Over the three-year period, our CEOs realizable
compensation ranked at the
25th
percentile of the peer group while our composite performance
ranked at the
43rd
percentile of the peer group. This means that our CEOs
realizable compensation is positioned well below the middle of
the peer group while our performance was ranked just below the
middle of the peer group. The Compensation Committee observed
that the relatively low positioning of realizable compensation
(i.e., the
25th
percentile) is attributable to the following factors:
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At March 31, 2011, the actual intrinsic value of stock
options granted to our CEO during the three-year period
(assuming none were exercised) is $1,352,480, or 43% of the
grant date fair value of $3,137,045. An increase in the
Companys stock price will improve the relative positioning
of realizable compensation for any outstanding stock options;
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The performance cash plan granted at the beginning of Fiscal
2009 for the two-year period Fiscal 2009 through Fiscal 2010
with a target grant value of $1,200,000 had a performance goal
(adjusted EBITDA) that was not met and, therefore, no payout was
made; and
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The performance share awards granted at the beginning of Fiscal
2010 for the two-year period Fiscal 2010 through Fiscal 2011
based on TSR performance resulted in no payout.
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Based on this analysis and the above observations, the
Compensation Committee is satisfied with the alignment of our
CEOs realizable compensation with the performance of the
Company. The chart below provides an illustration of this
realizable
pay-for-performance
analysis.
Summary
of Fiscal 2011 Executive Compensation Decisions
The following is a summary of significant compensation decisions
that were made in Fiscal 2011:
In making Fiscal 2011 compensation decisions relating to our
named executive officers, our Compensation Committee considered
our executive compensation philosophy of paying below-market
base salaries and modestly above-market incentive compensation.
Our compensation consultants provided a comprehensive, current
assessment of a peer group first developed in Fiscal 2009 and
modified in Fiscal 2011 as noted below (the Fiscal 2011
Peer Group) and survey data relating to these positions to
develop overall compensatory arrangements for these executives.
Our Compensation Committee also reviewed our managements
recommendations related to appropriate financial performance
metrics and goals for the Company to align compensatory programs
with our overall business strategy. Our Compensation Committee
considered summary information of the total compensation paid to
our named executive officers during the prior five
(5) fiscal years and summary data of each named executive
officers stock awards and stock options position. Our
Compensation Committee discussed with our Chief Executive
Officer proposals relating to the compensation of our named
executive officers (other than the Chief Executive Officer).
After discussions with our Chief Executive Officer and the
outside compensation consultants, our Compensation Committee
recommended to our Board for approval the Fiscal 2011 total
direct compensation of the named executive officers, other than
for our Chief Executive Officer, described below and, in the
case of our Chief Executive Officer, after review of the Fiscal
2011 Peer Group and survey data with the compensation
consultants in the absence of our Chief Executive Officer, our
Compensation Committee recommended to our Board for approval the
Fiscal 2011 total direct compensation of our Chief Executive
Officer described below. Our
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Compensation Committee believes that the incentive compensation
of the named executive officers (annual cash bonus and long-term
incentive compensation) described below, combined with Fiscal
2011 base salaries, provided for compensation opportunity for
each executive above median as compared to similarly-situated
executives as reflected in the data provided by our compensation
consultants, consistent with our executive compensation
philosophy.
Use of
Market Compensation Data
In order to make informed decisions regarding compensation
matters for our named executive officers, the Compensation
Committees compensation consultants provide market
compensation data for each executive position using a
combination of survey data and peer group data as disclosed in
each companys proxy statement.
A peer group of companies was first developed in Fiscal 2009,
after discussions among our Compensation Committee, the
compensation consultants and our management, for use, along with
survey data, to assess whether each of the named executive
officers total compensation (base salary, annual bonus and
long-term incentive compensation) was competitive relative to
similarly-situated executives. The Fiscal 2011 Peer Group, shown
below, is the same peer group utilized in Fiscal 2010 except
that Brocade Communications Systems, Inc. (Brocade)
and ManTech International Corporation (ManTech) were
removed because they were no longer considered comparable due to
their significant growth from acquisitions (including Brocade
and ManTech, the Fiscal 2010 Peer Group).
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Acxiom Corporation
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Gartner, Inc.
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ADC Telecommunications, Inc.
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GTSI Corp.
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ARRIS Group, Inc.
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MasTec, Inc.
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Belden Inc.
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MAXIMUS, Inc.
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CIBER, Inc.
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Novell, Inc.
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Ciena Corporation
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Nu Horizons Electronics Corp.
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Cincinnati Bell Inc.
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Plantronics, Inc.
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CommScope Inc.
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Polycom, Inc.
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Dycom Industries, Inc.
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SAVVIS, Inc.
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These companies were selected based on the following criteria
presented by our compensation consultants and agreed upon by our
Compensation Committee:
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similarity in industry (competitors for business
and/or
talent);
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size in terms of revenues (approximately one-half to twice our
revenues);
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number of employees;
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structure of the business defined in terms of asset turnover
(revenue/assets) and profit margin; and
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financial performance in relation to the Companys
financial performance in terms of market capitalization, total
shareholder return, return on capital and profitability.
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In selecting peer companies, the Compensation Committee takes a
collective view of the selection criteria and does not rely on
any single metric. The Compensation Committee believes that the
peer companies represent businesses that are our competitors and
represent companies of similar size and complexity to us.
The outside compensation consultants also presented our
Compensation Committee with broad survey data from consulting
firms Towers Watson and Mercer Inc. (and utilizing companies
with revenues less than $3 billion from the Towers Watson
High-Technology Compensation Database as supplemented with data
from the Fiscal 2011 Peer Group for the Chief Executive Officer
and the Chief Financial Officer positions for market target
annual and long-term incentives), which was based on
executive-position match, as another means by which our
Compensation Committee could assess and judge the compensation
paid to our named executive officers. The survey data is further
size adjusted using regression equations based on the revenue
responsibility of the executive position.
Base Salaries. A review was conducted of our
named executive officers base salaries in light of their
performance and the survey and Fiscal 2011 Peer Group data
presented by our compensation consultants and our compensation
philosophy to pay below-market base salaries. This review
revealed that, relative to the survey data, the base salary for
the Chief Executive Officer was positioned 18% below the market
median, the base salary for the Chief Financial Officer was
positioned 13% below the market median and the base salary for
the Senior Vice
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President was positioned 17% below the market median. A
determination was made, based on such review, that the base
salaries for our Chief Executive Officer and our Chief Financial
Officer (especially since our Chief Financial Officer also
performs some functions that are comparable to a chief operating
officer) should be increased but should remain below the market
median for base salaries. Accordingly, our Compensation
Committee recommended, and our Board approved, the following
base salaries for our named executive officers for Fiscal 2011:
$600,000 for our Chief Executive Officer, an increase of $50,000
over the prior fiscal year, $350,000 for our Chief Financial
Officer, an increase of $35,000 over the prior fiscal year, and
$265,000 for our Senior Vice President. Mr. Davis became an
executive officer on November 1, 2010 and, in connection
therewith, and after review of a compensation analysis prepared
by our compensation consultants, our Compensation Committee
recommended, and our Board approved, a base salary for
Mr. Davis, consistent with our philosophy, at an annual
rate of $330,000.
Fiscal 2011 Annual Cash Bonus Program. At the
recommendation of our Compensation Committee, in May 2010, our
Board approved an annual cash incentive bonus plan for Fiscal
2011 (the FY11 Annual Incentive Plan). The FY11
Annual Incentive Plan was similar to the annual cash incentive
plan for Fiscal 2010. The main objective of the FY11 Annual
Incentive Plan was to motivate our named executive officers to
achieve the Companys overall operating plan and was
implemented after strategic planning meetings attended by the
Compensation Committee and other Board members at which the
Companys operating plan for Fiscal 2011 was presented by
our management and then reviewed and approved by our Board. The
performance goals for the FY11 Annual Incentive Plan and the
actual Company achievement of such performance goals were as
follows:
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FY11 Annual Incentive Plan Performance Goals
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Actual FY11
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Actual FY11
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Threshold (80%
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Target
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Maximum (120% of
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Annual
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Performance as
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of Target,
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Target, except for
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Incentive
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a Percent of
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except for DSOs
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DSOs which is
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Plan
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Target Goal
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which is 90% of
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110% of Target)
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Performance
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Target)
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Operating Earnings Per Share
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$3.66
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111%
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$2.64
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$3.30
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$3.96
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Adjusted Operating Margin Percent
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10.7%
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105%
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8.2%
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10.2%
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12.2%
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Adjusted EBITDA
($ in millions)
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$119.6
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106%
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$90
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$113
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$136
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DSOs
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81
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94%
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84
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76
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68
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For the FY11 Annual Incentive Plan, operating earnings per
share was operating net income divided by
weighted average common shares outstanding (diluted) with
operating net income meaning net income plus
Reconciling Items (as defined below); adjusted
operating margin percent was operating income plus
Reconciling Items divided by total revenues; adjusted
EBITDA was EBITDA (defined as net income plus provision
for income taxes, interest, depreciation and amortization) plus
Reconciling Items; and DSOs was an internal
management calculation based on the balances in net accounts
receivable, cost in excess of billings and billings in excess of
costs at the end of the measurement period. DSOs essentially
measures the average number of days for the Company to receive
payment after revenue has been recognized. These performance
goals were equally weighted. For the FY11 Annual Incentive Plan,
Reconciling Items were: (i) amortization of
intangible assets on acquisitions; (ii) stock-based
compensation expense; (iii) asset
write-up
expense on acquisitions; (iv) expenses, settlements,
judgments and fines associated with material litigation
($500,000 or greater per matter); (v) changes in fair value
of any interest-rate swaps; (vi) certain pension plan
funding expenses; (vii) the impact of any goodwill
impairment; and (viii) the effect of changes in tax laws or
accounting principles affecting reported results. The
Compensation Committee considered revenue growth as a potential
performance measure for the FY11 Annual Incentive Plan but
concluded that revenue growth could be embodied within the
targets determined for the foregoing performance goals. The
Compensation Committee also discussed Reconciling Items for the
Fiscal 2011 compensation decisions and concluded that employee
severance costs should not be included in those Reconciling
Items. The Compensation Committee retained negative discretion
to decrease any payout that would otherwise be made under the
FY11 Annual Incentive Plan.
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Pursuant to the FY11 Annual Incentive Plan design, the
achievement of the performance goals at the threshold level
would have resulted in a payout of 50% of targeted annual bonus,
the achievement of the performance goals at the target level
would have resulted in a payout of 100% of targeted annual bonus
and the achievement of the performance goals at the maximum
level would have resulted in a payout of 150% of targeted annual
bonus. The targeted annual bonus award levels under the FY11
Annual Incentive Plan for our named executive officers were as
follows: our Chief Executive Officer 100% of base
salary, or $600,000; our Chief Financial Officer
100% of base salary, or $350,000; and our Senior Vice
President approximately 50% of base salary, or
$133,000. At the time of the election of our new Vice President
in November 2010, our Compensation Committee recommended, and
our Board approved, a modification to his annual incentive plan
to make it subject to the performance criteria reflected above
and an award of 100% of base salary, or $330,000 (to be
pro-rated from the time of his election as an executive
officer). The foregoing amounts reflect the cash bonus that the
executive would have received if each performance goal was
achieved at the target level.
In Fiscal 2011, our operating earnings per share were
$3.66(1),
or 111% of the target, adjusted operating margin was
10.7%(2),
or 105% of the target, our adjusted EBITDA was
$119.6 million(3),
or 106% of the target, and our DSOs were
81 days(4),
or 94% of the target. In the first quarter of Fiscal 2012, our
Compensation Committee met to review our performance under the
FY11 Annual Incentive Plan and determined that such performance
resulted in a payout under the FY11 Annual Incentive Plan of
106% of each named executive officers targeted
compensation based on such performance. Our Compensation
Committee then recommended to our Board, and our Board approved,
the following payouts under our FY11 Annual Incentive Plan:
$636,000 to our Chief Executive Officer; $371,000 to our Chief
Financial Officer; $166,000 to our new Vice President (including
the amount earned prior to his election as an executive
officer); and $140,000 to our Senior Vice President.
Fiscal 2010 Long-Term Incentive Program
Payouts. The approval by our stockholders of the
Incentive Plan in August 2008 provided our Compensation
Committee with the ability, for the first time in Fiscal 2010,
to make a variety of equity and cash awards which most
appropriately fit with our compensation philosophy, achieve our
corporate objectives with the executive compensation program,
provide awards that are competitive to attract and retain
executive talent relative to our peer group, align our
compensation practices with market trends and provide tax
efficiencies. Given the flexibility of the Incentive Plan, our
Compensation Committee discussed with our management and the
outside compensation consultants various equity-based long-term
incentive awards that would be appropriate to achieve our
objectives consistent with our compensation philosophy. These
objectives for the long-term incentive program included
facilitating the achievement of long-range goals, promoting
value creation for our stockholders, providing certain long-term
incentive that is independent of the Companys stock price
and providing an overall above-median compensation opportunity
through the use of above-market long-term compensation along
with below-market base salaries. Our Compensation Committee also
discussed the overall uncertainty in the general economy, which
led to a discussion of the appropriate length of this long-term
program and a conclusion that a portion of the long-term
incentive should be earned based on Company performance relative
to a peer group.
Consistent with the foregoing, after discussions among our
Compensation Committee, our management and the outside
compensation consultants, our Compensation Committee
recommended, and our Board approved, the Long-Term Incentive
Program for Fiscal 2010 (the FY10 LTIP) which
included, for the first time, the use of
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(1)
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Operating earnings per share of $3.66 was computed as net income of
$52.9 million plus Reconciling Items, after-tax, of
$12.3 million, divided by weighted average common shares
outstanding (diluted) of approximately 17.8 million. |
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Adjusted
operating margin percentage of 10.7% was computed as operating
income of $91.1 million plus Reconciling Items, pre-tax, of
$22.8 million, divided by total revenues of
$1,068.2 million. |
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Adjusted
EBITDA of $119.6 million was computed as net income of
$52.9 million plus provision for income taxes of
$32.4 million, interest of $5.4 million, depreciation
and amortization of $18.2 million and Reconciling Items
(other than amortization costs already excluded) of
$10.7 million. |
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DSOs
of 81 days includes Costs/estimated earnings in
excess of billings on uncompleted contracts and
Billings in excess of costs/estimated earnings on
uncompleted contracts as reflected on our balance sheet at
March 31, 2011. |
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performance share awards (the Performance Awards)
that measure performance for the two fiscal years ended
March 31, 2011 (the FY10 LTIP Performance
Period). Our Compensation Committees intent was to
measure performance over a three-year period; however, given the
uncertainty in the economy and the Compensation Committees
ability to establish reliable long-term goals, our Compensation
Committee decided to measure performance over a two-year period
for FY10 LTIP performance share awards. Since the number of
shares payable under the Performance Awards was determined as of
the date of grant, the named executive officers were at risk for
market changes in the value of the Common Stock during the
performance period which affected the value of the Performance
Awards.
The performance criteria for the Performance Awards under the
FY10 LTIP were Adjusted EBITDA for 50% of the Performance Awards
and TSR relative to the Fiscal 2010 Peer Group for the other 50%
of such awards. In May 2011, the Compensation Committee reviewed
the Companys performance with respect to these metrics.
The Company achieved Adjusted EBITDA of $227.9 million for
the FY10 LTIP Performance Period against a target of
$226 million, resulting in a payout of 103% of the
Performance Shares based on this metric. With respect to the
Performance Shares based on relative TSR, although the Company
achieved annualized stockholder returns of approximately 30%
during the FY10 LTIP Performance Period, this placed the Company
slightly below the threshold level relative to the Fiscal 2010
Peer
Group(5)
for a payout of these awards and thus no payout was made on
these awards. This demonstrates the alignment of the
Companys compensation programs with its
pay-for-performance
philosophy. As a result of the foregoing, in May 2011, our
Compensation Committee recommended to our Board, and our Board
approved, the following payouts in the form of issuances of our
Common Stock under our FY10 LTIP Performance Awards which
represents just over fifty percent (50%) of the target award
payout: 20,600 shares to our Chief Executive Officer;
5,150 shares to our Chief Financial Officer;
3,090 shares to our Vice President; and 2,575 shares
to our Senior Vice President.
Fiscal 2011 Long-Term Incentive Program. In
connection with the Fiscal 2011 compensation decisions, the
Compensation Committee considered the elements used under the
FY10 LTIP described above and concluded that such elements
provided appropriate long-term incentives. After consideration
and input from our management and our compensation consultants,
our Compensation Committee recommended, and our Board approved,
the Long-Term Incentive Program for Fiscal 2011 (the FY11
LTIP) substantially similar to the FY10 LTIP, although it
was determined that the performance measurement period for the
Performance Awards should be extended from two (2) to three
(3) fiscal years. Accordingly, the FY11 LTIP was comprised
of a restricted stock unit grant payable in shares of Common
Stock representing 20% of the award, a stock option grant
representing 30% of the award and Performance Awards
representing, at the target level payout at the time of grant,
50% of the award and payable in shares of Common Stock. Since
the number of shares payable under Performance Awards was
determined as of the date of grant, the named executive officers
are at risk for market changes in the value of the Common Stock
during the performance period which will affect the value of the
Performance Award.
The restricted stock units and stock options granted pursuant to
the FY11 LTIP will vest in equal increments over three years.
The payout on the Performance Awards will be based on
(i) the Companys performance relative to a cumulative
adjusted EBITDA (as defined above) goal (the FY11 EBITDA
Goal) and (ii) the Companys TSR relative to the
Fiscal 2011 Peer Group, in each case for the three fiscal years
ending March 31, 2013. These two (2) performance goals
will be equally weighted. As a result, for purposes of
determining the payout of the Performance Awards: (A) the
achievement of 75% of the FY11 EBITDA Goal will result in a
payout of 25% of the targeted Performance Award, the achievement
of 100% of the FY11 EBITDA Goal will result in a payout of 50%
of the targeted Performance Award and the achievement of 120% of
the FY11 EBITDA Goal will result in a payout of 75% of the
targeted Performance Award; and (B) the ranking of the
Companys TSR in the
25th percentile
of the peer groups TSR will result in a payout of 25% of
the targeted Performance Award, the ranking of the
Companys TSR at the median level of performance of the
Companys TSR as compared to the peer groups TSR will
result in a payout of 50% of the targeted Performance Award and
the ranking of the Companys TSR in the
75th percentile
of the peer groups TSR will result in a payout of 75% of
the targeted Performance Award.
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(5)
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As
a result of being acquired during the FY10 LTIP Performance
Period, three (3) companies in the original peer group, ADC
Telecommunications, Inc., CommScope Inc. and Nu Horizons
Electronics Corp., were eliminated for this comparison. |
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Following Board review and approval, our Compensation Committee
approved the following awards under the FY11 LTIP to the
Companys then named executive officers: our Chief
Executive Officer received a restricted stock unit award of
16,000 shares of Common Stock, a stock option grant for
80,000 shares of Common Stock and a Performance Award of
27,000 shares of Common Stock; our Chief Financial Officer
received a restricted stock unit award of 8,000 shares of
Common Stock, a stock option grant for 40,000 shares of
Common Stock and a Performance Award of 13,500 shares of
Common Stock; and our Senior Vice President received a
restricted stock unit award of 2,500 shares of Common
Stock, a stock option grant for 12,000 shares of Common
Stock and a Performance Award of 4,000 shares of Common
Stock. Key, non-executive employees also participated in the
FY11 LTIP generally on the same relative basis as the named
executive officers. Our Compensation Committee also discussed
the timing of the grant of the stock option and determined that
the grant date (and, therefore, the determination of the
exercise price) should be after the Companys earnings
release regarding its Fiscal 2010 financial results.
Accordingly, such stock option awards were granted on
May 17, 2010. The stock options were granted with an
exercise price of $32.21 per share, the fair market value of the
Common Stock on the grant date.
The FY11 EBITDA Goal for the Performance Awards is likely to be
achieved at 75% of target, is challenging but achievable at 100%
of target (but will require successful implementation of our
mergers & acquisitions program) and is remotely
achievable at 120% of target.
Description
of Compensation Practices and Policies for Fiscal 2012
In connection with our Fiscal 2012 compensation decisions, our
Compensation Committee engaged our outside compensation
consultants to undertake a comprehensive market assessment to
provide our Compensation Committee with context and market
insights for making compensation decisions. This review included
a discussion of current market trends in executive compensation.
Similar to the decision-making process for Fiscal 2011, in
making Fiscal 2012 compensation decisions relating to our named
executive officers, our Compensation Committee considered our
executive compensation philosophy of paying below-market base
salaries and modestly above-market incentive compensation. In
connection with its comprehensive review, our compensation
consultants reviewed our prior compensation decisions and
advised our Compensation Committee that our executive
compensation decisions were aligned with this compensation
philosophy.
For the Fiscal 2012 compensation decisions, our Compensation
Committee reviewed peer group data developed by our compensation
consultants at the request of our Compensation Committee. The
peer group utilized for Fiscal 2012 compensation decisions was
the Fiscal 2011 Peer Group except that three (3) companies
(ADC Telecommunications, Inc., CommScope Inc. and Nu Horizons
Electronics Corp.) were removed as a result of being acquired
and a fourth company was removed as a result of a significant
disconnect from the Company based on market capitalization. In
their place, ADTRAN, Inc., Finisar Corporation, Qlogic
Corporation and Tellabs, Inc. were added for Fiscal 2012 after a
review and analysis of the peer group selection criteria
discussed earlier by our compensation consultants and
discussions among our Compensation Committee, the compensation
consultants and our management (the Fiscal 2012 Peer
Group). Our compensation consultants also presented and
our Compensation Committee reviewed broad survey data from
consulting firms Towers Watson and Mercer Inc. (and utilizing
companies with revenues less than $3 billion from the
Towers Watson High-Technology Compensation Database as
supplemented with data from the Fiscal 2012 Peer Group defined
below for the Chief Executive Officer, the Chief Financial
Officer and Vice President positions for market target annual
and long-term incentives). Our compensation consultants
presented this data to the Compensation Committee in relation to
the positions held by our named executive officers to develop
overall compensatory arrangements for these executives. Our
Compensation Committee also reviewed our managements
recommendations related to appropriate financial performance
metrics and goals for the Company to align compensatory programs
with our overall business strategy. Our Compensation Committee
considered summary information of the total compensation paid to
our named executive officers during the prior three
(3) fiscal years and summary data of each named executive
officers stock awards and stock options position. Our
Compensation Committee discussed with our Chief Executive
Officer proposals relating to the compensation of our named
executive officers (other than the Chief Executive Officer).
After discussions with our Chief Executive Officer and the
outside compensation consultants, our Compensation Committee
recommended to our Board for approval the Fiscal 2012 total
direct compensation of the named
22
executive officers, other than for our Chief Executive Officer,
described below and, in the case of our Chief Executive Officer,
after review of peer group and survey data with the compensation
consultants in the absence of our Chief Executive Officer, our
Compensation Committee recommended to our Board for approval the
Fiscal 2012 total direct compensation of our Chief Executive
Officer described below. Our Compensation Committee believes
that the incentive compensation of the named executive officers
(annual cash bonus and long-term incentive compensation)
described below, combined with Fiscal 2012 base salaries,
provides for compensation opportunity for each executive above
median as compared to similarly-situated executives as reflected
in the data provided by the consultants, consistent with our
executive compensation philosophy.
Base Salaries. A review was conducted of our
named executive officers base salaries in light of their
performance and the survey and peer group data presented by our
compensation consultants and our compensation philosophy to pay
below-market base salaries. Following such review, it was
determined that the current base salaries of our named executive
officers continued to align with our compensation philosophy of
paying base salaries below the market median and, therefore,
were considered appropriate for Fiscal 2012. Accordingly, no
change was made in the base salaries of our named executive
officers for Fiscal 2012. These base salaries are positioned
from 8 to 18% below the market median based on the survey data
presented by our compensation consultants.
Annual Cash Bonus Program. At the
recommendation of our Compensation Committee, in May 2011, our
Board approved an annual cash incentive bonus plan for Fiscal
2012 (the FY12 Annual Incentive Plan) similar to the
FY11 Annual Incentive Plan. The main objective of the FY12
Annual Incentive Plan is to motivate our named executive
officers to achieve the Companys overall operating plan.
The performance goals for the FY12 Annual Incentive Plan
(operating earnings per share, adjusted operating margin
percent, adjusted EBITDA and DSOs) are the same as for the FY11
Annual Incentive Plan. The FY12 Annual Incentive Plan
performance goals approved by the Compensation Committee
represent growth over the performance goals for the FY11 Annual
Incentive Plan and over the Fiscal 2011 actual results. The
Compensation Committee retained negative discretion to decrease
any payout that would otherwise be made under the FY12 Annual
Incentive Plan.
The performance goals for the FY12 Annual Incentive Plan will be
equally weighted. Under the FY12 Annual Incentive Plan, the
achievement of the performance goals at 80% of target (90% of
target for the DSOs performance goal) will result in a payout of
50% of targeted annual bonus, the achievement of the performance
goals at 100% of target will result in a payout of 100% of
targeted annual bonus and the achievement of the performance
goals at 120% of target (110% of target for the DSOs performance
goal) will result in a payout of 150% of targeted annual bonus.
These performance goals are likely to be achieved at 80% of
target (90% of target for the DSOs performance goal), are
challenging but achievable at 100% of target (but will require
successful implementation of our mergers &
acquisitions program) and are remotely achievable at 120% of
target (110% of target for the DSOs performance goal).
Our Board made targeted annual bonus awards under the FY12
Annual Incentive Plan to the Companys named executive
officers as follows: our Chief Executive Officer
100% of base salary, or $600,000; our Chief Financial
Officer 100% of base salary, or $350,000; our Vice
President 100% of base salary, or $330,000; and our
Senior Vice President approximately 50% of base
salary, or $133,000.
Total Cash Compensation. Total cash
compensation is comprised of base salary and annual cash bonus
opportunity. Based on the survey data discussed above, the
target total cash compensation for the Chief Executive Officer
is positioned 9% below the market median, the target total cash
compensation for the Chief Financial Officer is positioned 8%
above the market median (although, as noted above, our Chief
Financial Officer also performs some functions that are
comparable to a chief operating officer), the target total cash
compensation for the Vice President is positioned 15% above the
market median and the target total cash compensation for the
Senior Vice President is positioned 9% below the market median.
Key, non-executive employees are also participating in the FY12
Annual Incentive Plan generally on the same terms as the named
executive officers.
Fiscal 2012 Long-Term Incentive Program. In
connection with its Fiscal 2012 compensation decisions, the
Compensation Committee considered the elements used under the
FY11 LTIP described above and concluded that such elements
provided appropriate long-term incentives. After consideration
and input from our management and our compensation consultants,
our Compensation Committee recommended, and our Board approved,
the Long-Term Incentive Program for Fiscal 2012 (the FY12
LTIP) in a form substantially similar to the FY11 LTIP,
except for an increase in the performance standards under our
performance share program. Accordingly, the FY12 LTIP is
comprised
23
of a restricted stock unit grant payable in shares of Common
Stock representing 20% of the award, a stock option grant
representing 30% of the award and a Performance Award
representing, at the target level payout at the time of grant,
50% of the award and payable in shares of Common Stock. In a
change from prior years, based on the recommendation of its
compensation consultants as to the majority practice, the
Compensation Committee recommended, and the Board approved, the
FY12 LTIP awards based on a dollar value, and also approved the
methodology for determining the number of shares under each
award based on such dollar value. Since the number of shares
payable under these awards was determined as of the date of
grant, the named executive officers are at risk for market
changes in the value of Common Stock during the performance
period which will affect the value of the Performance Award.
The restricted stock units and stock options granted pursuant to
the FY12 LTIP will vest in equal increments over three years.
The payout on 50% of the dollar value of the Performance Awards
will be based on the Companys performance relative to a
cumulative adjusted EBITDA (as defined above) goal (the
FY12 EBITDA Goal) and the payout on the remaining
50% of the dollar value of the Performance Awards will be based
on the Companys TSR relative to the Fiscal 2012 Peer
Groups TSR, in each case for the three fiscal years ending
March 31, 2014. With respect to the Performance Awards
based on the FY12 EBITDA Goal, the achievement of 75% of the
FY12 EBITDA Goal will result in a payout of 50% of such
Performance Awards, the achievement of 100% of the FY12 EBITDA
Goal will result in a payout of 100% of such Performance Awards
and the achievement of 120% of the FY12 EBITDA Goal will result
in a payout of 150% of such Performance Awards. With respect to
the Performance Awards based on relative TSR, and in a change
from prior years, the ranking of the Companys TSR in the
35th percentile
(increased from the
25th percentile)
of the peer groups TSR will result in a payout of 50% of
such Performance Awards, the ranking of the Companys TSR
in the
55th percentile
(increased from the median or
50th percentile)
of the peer groups TSR will result in a payout of 100% of
such Performance Awards, the ranking of the Companys TSR
in the
75th percentile
of the peer groups TSR will result in a payout of 150% of
the targeted Performance Award and the ranking of the
Companys TSR in the
100th percentile
of the peer groups TSR will result in a payout of 200% of
the targeted Performance Award. Also new for Fiscal 2012, if the
Companys TSR over the performance period is negative, the
award is capped at 100% regardless of the Companys
performance relative to the peer group.
Following Board review and approval, our Compensation Committee
approved the following targeted amounts and awards (rounded to
the nearest ten shares) under the FY12 LTIP to the
Companys named executive officers: our Chief Executive
Officer $2,324,000 comprised of a restricted stock
unit award for 14,350 shares of the Common Stock, a stock
option grant for 56,150 shares of the Common Stock and
Performance Awards for 34,030 shares of the Common Stock;
our Chief Financial Officer $1,162,000 comprised of
a restricted stock unit award for 7,180 shares of the
Common Stock, a stock option grant for 28,080 shares of the
Common Stock and Performance Awards for 17,010 shares of
the Common Stock; our Vice President $800,000
comprised of a restricted stock unit award for 4,940 shares
of the Common Stock, a stock option grant for 19,330 shares
of the Common Stock and Performance Awards for
11,710 shares of the Common Stock; and our Senior Vice
President $350,000 comprised of a restricted stock
unit award for 2,160 shares of the Common Stock, a stock
option grant for 8,460 shares of the Common Stock and
Performance Awards for 5,120 shares of the Common Stock.
Key, non-executive officer employees are also participating in
the FY12 LTIP generally on the same relative basis as the
executive officers. All such awards were granted on May 17,
2011.
The FY12 EBITDA Goal for the Performance Awards is likely to be
achieved at 75% of target, is challenging but achievable at 100%
of target (but will require successful implementation of our
mergers & acquisitions program) and is remotely
achievable at 120% of target.
Based on the survey data discussed above, the FY12 LTIP
opportunity for the Chief Executive Officer is positioned 11%
above the market median, the FY12 LTIP opportunity for the Chief
Financial Officer is positioned 58% above the market median, the
FY12 LTIP opportunity for the Vice President is positioned 46%
below the market median and the FY12 LTIP opportunity for the
Senior Vice President is positioned 189% above the market median.
Executive
Stock Ownership Guidelines
To further achieve the objective of building our named executive
officers ownership in shares of Common Stock, thereby more
closely aligning the interests of our named executive officers
with those of our stockholders, the Company has executive stock
ownership guidelines that utilize a retention approach. Under
these guidelines, our
24
named executive officers are required to hold, until retirement,
but subject to diversification at age 60, 50% of the net,
after-tax shares of Common Stock issued to them pursuant to
performance share awards and restricted stock awards/units. All
of our named executive officers are in compliance with these
ownership guidelines.
Retirement
Benefits
We generally do not have a Company-funded post-retirement
medical benefits program or a defined benefit pension program
for our key employees. Mr. Blakemore participates in the
Retirement and Security Program of the National
Telecommunications Cooperative Association (the NTCA
Plan), a multiple employer pension plan in which the
subsidiary of the Company that employs Mr. Blakemore
participates as a contributing employer. Mr. Blakemore
participated in such plan at the time of the Companys
acquisition of this subsidiary in 1999. Mr. Wertheimber is
a citizen of Japan and, under Japanese law, must enroll in
Japans national pension system to which we make
contributions. Messrs. Davis and McAndrew participate in a
defined contribution plan similar to most Company employees.
Perquisites
The Company does not provide any perquisites to executives who
reside in the United States. The Company does provide an
automobile benefit to the Senior Vice President who is a local
national in Japan, which is a customary practice in that country.
Change-in-Control
and Employment Termination Arrangements
We entered into agreements with Mr. Wertheimber in November
2004, with Messrs. McAndrew and Blakemore in May 2007 and
with Mr. Davis in January 2011 in connection with his
election as an executive officer of the Company (at which time
Mr. Davis voluntarily terminated a severance agreement that
generally provided for a severance payment equal to his annual
salary). In October 2007, our Board approved a revised
compensatory arrangement for Mr. Blakemore in connection
with his selection to the positions of President and Chief
Executive Officer. After discussion, our Compensation Committee
and Board determined to amend Mr. Blakemores
agreement to provide that severance would be due to
Mr. Blakemore upon termination of employment by us (other
than due to death, disability, retirement or for cause) or by
Mr. Blakemore for good reason, in each case prior to a
change-in-control
of the Company. Our Compensation Committee and Board approved
this amendment to our Chief Executive Officers agreement
as an inducement for him to accept the positions of President
and Chief Executive Officer with us. Mr. McAndrews
agreement was amended and restated in December 2008 to comply
with Section 409A (Section 409A) of the
Internal Revenue Code of 1986, as amended (the Code)
(or certain exceptions thereto).
The agreements with Messrs. Blakemore, Davis, McAndrew and
Wertheimber generally provide for certain benefits to these
named executive officers in the event that their respective
employment is terminated within two (2) years of a
change-in-control
either by (i) us for a reason other than cause, death,
disability or retirement or (ii) the named executive
officers resignation for good reason.
Our Compensation Committee and our Board approved these
agreements and
change-in-control
and employment termination provisions in our compensation
arrangements to reduce the distraction regarding the impact of
such a transaction on the personal situation of a named
executive officer and to provide incentives to them to remain
with us through the consummation of a
change-in-control
transaction, if any. The level of severance provided, should the
executive be terminated prior to or within two years following a
change-in-control,
aligns with the level commonly provided in the market.
For a more detailed description of the
change-in-control
arrangements with our named executive officers, see the
Potential Payments Upon Termination or
Change-in-Control
section of this proxy statement below.
Other
Matters
Section 409A generally provides that amounts deferred under
nonqualified deferred compensation arrangements will be subject
to accelerated income recognition, interest and substantial
penalties unless the arrangement
25
satisfies certain design and operational requirements. We have
modified our compensatory arrangements as necessary so that
compensation payable under the arrangements is not subject to
taxation under Section 409A. These amendments were not
intended to increase the benefits payable under our plans and
arrangements.
Section 162(m) provides that a publicly-traded corporation
may not deduct from its federal income taxes compensation in
excess of $1 million for amounts paid to each of its chief
executive officer or to any of the three highest compensated
officers other than the chief executive officer unless such
excess compensation is performance-based. Among
other requirements, for compensation to be
performance-based for purposes of
Section 162(m), the performance goals must be
pre-established and objective. The awards made pursuant to the
FY11 Annual Incentive Plan, the FY11 LTIP, the FY12 Annual
Incentive Plan and the FY12 LTIP were issued pursuant to the
Incentive Plan and, other than the restricted stock units, are
intended to be performance-based for purposes of
Section 162(m). Our Compensation Committee or Board also
may provide incentive compensation that is not
performance-based for purposes of
Section 162(m) and therefore not deductible for federal
income tax purposes to the extent that non-deductible
compensation is in excess of the $1 million limitation.
Risk
Assessment
In Fiscal 2011, the Compensation Committee reviewed our
compensation policies and practices in order to assess whether
such compensation policies and practices are reasonably likely
to have a material adverse effect on the Company. In order to
assist in such review, the Compensation Committee engaged our
compensation consultants. Our compensation consultants reviewed
our pay philosophy, program design, program governance and
administration and mitigating factors that offset risk. Our
compensation consultants concluded that:
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our compensation philosophy, while emphasizing above-market
variable compensation components, does not promote an
inappropriate level of risk;
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our incentive design is appropriate and serves to reward
appropriate risk taking;
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governance and plan administration is appropriate;
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mitigating factors, including a stock retention policy and
Compensation Committee discretion, are present;
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certain pay practices that may promote risk are not present;
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none of the elements reviewed indicate a critical issue or
appear to promote material risk; and
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appropriate levels of approval, review and governance exist to
mitigate the risk of inappropriate actions.
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Based on such review, in Fiscal 2011 our Compensation Committee
recommended to the Board, and our Board concluded, that our
compensation policies and practices are not reasonably likely to
have a material adverse effect on the Company. In Fiscal 2012,
our Compensation Committee confirmed with our compensation
consultants that, at the present time, there is no basis for a
contrary conclusion.
Report of
the Compensation Committee
Our Compensation Committee reviewed and discussed with our
management the Compensation Discussion and Analysis set
forth in this proxy statement. Based on the foregoing review and
discussions, our Compensation Committee recommended to our Board
that the Compensation Discussion and Analysis be included
in this proxy statement.
The information contained in this report does not constitute
soliciting material and should not be deemed filed or
incorporated by reference into any other Company filing under
the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent the
Company specifically incorporates it by reference into such
filing.
Compensation Committee:
Thomas W. Golonski, Chairman
William F. Andrews
Edward A. Nicholson, Ph.D.
26
SUMMARY
COMPENSATION TABLE FISCAL 2011, FISCAL 2010 and
FISCAL 2009
The following table sets forth cash compensation paid by us and
our subsidiaries, as well as other compensation paid or accrued
during Fiscal 2011, Fiscal 2010 and Fiscal 2009 to (i) R.
Terry Blakemore, our President and Chief Executive Officer,
(ii) our principal financial officer, Michael McAndrew,
(iii) Francis W. Wertheimber, an executive officer at the
end of Fiscal 2011 who received total compensation (determined
in accordance with SEC rules) in Fiscal 2011 that exceeded
$100,000 and (iv) Kenneth P. Davis, also an executive
officer at the end of Fiscal 2011 who received total
compensation (determined in accordance with SEC rules) in Fiscal
2011 that exceeded $100,000 (each, a Named Executive
Officer). Such compensation was paid for services rendered
in all capacities to us and our subsidiaries:
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Name and Principal Position
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Year
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Salary
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Bonus
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Stock
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Option
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Non-Equity
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Change in
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All Other
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Total
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($)
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($)
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Awards(1)
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Awards(2)
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Incentive
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Pension
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Compensation
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($)
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($)
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($)
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Plan
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Value and
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($)
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Compensation
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Nonqualified
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($)
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Deferred
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Compensation
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Earnings
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($)
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R. Terry Blakemore,
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2011
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598,077
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1,389,000
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934,848
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636,000
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239,320
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(3)
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25,434
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(4)
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3,822,679
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President and
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2010
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552,115
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600,000
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1,994,560
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882,028
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429,000
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149,986
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(3)
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20,656
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(4)
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4,628,345
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Chief Executive Officer
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2009
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526,731
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1,320,169
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330,000
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99,617
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(3)
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18,823
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(4)
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2,295,340
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Kenneth P. Davis,
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2011
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298,269
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75,000
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209,760
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140,227
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166,000
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5,636
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(6)
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894,892
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Vice President Voice Services North, Europe and
Latin
America(5)
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Michael McAndrew,
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2011
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358,750
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694,500
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467,424
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371,000
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5,373
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(6)
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1,897,047
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Executive Vice President,
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2010
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315,000
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150,000
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498,460
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223,798
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197,000
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4,980
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(6)
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1,389,418
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Chief Financial Officer,
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2009
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294,134
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594,936
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151,000
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5,358
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(6)
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1,045,428
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Treasurer and Secretary
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Francis W. Wertheimber,
|
|
|
|
2011
|
|
|
|
|
374,774
|
(7)
|
|
|
|
|
|
|
|
|
209,760
|
|
|
|
|
140,227
|
|
|
|
|
140,000
|
|
|
|
|
|
|
|
|
|
41,942
|
(7)(8)
|
|
|
|
906,703
|
|
Senior Vice President
|
|
|
|
2010
|
|
|
|
|
333,465
|
(7)
|
|
|
|
75,000
|
|
|
|
|
249,320
|
|
|
|
|
105,317
|
|
|
|
|
104,000
|
|
|
|
|
|
|
|
|
|
33,559
|
(7)(8)
|
|
|
|
900,661
|
|
|
|
|
|
2009
|
|
|
|
|
315,373
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
509,383
|
|
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
35,875
|
(7)(8)
|
|
|
|
940,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Reflects the aggregate grant date fair value with respect to
awards of restricted stock units and performance shares for each
named executive officer computed in accordance with FASB ASC
Topic 718. The assumptions underlying the valuation of these
awards is set forth in Note 13 of the Notes to the
Consolidated Financial Statements set forth in the
Companys Annual Report on
Form 10-K
for Fiscal 2011 (2011
Form 10-K).
The amount presented reflects the payout of the performance
share awards at target. If these awards were to be paid out at
the maximum amount, the value of these awards, for Fiscal 2011,
for Messrs. Blakemore, Davis, McAndrew and Wertheimber
would be $1,837,740, $276,240, $918,870 and $276,240,
respectively. |
|
(2)
|
|
Reflects the dollar amount recognized for financial statement
reporting purposes in accordance with FASB ASC Topic 718. For
Fiscal 2011, the weighted-average assumptions underlying the
valuation of the stock options under the Black-Scholes option
pricing model are as follows: expected life of 4.93 years;
volatility of 41.38%; a risk-free interest rate of 2.30%; and a
dividend yield of 0.819%. For Fiscal 2010, the weighted-average
assumptions underlying the valuation of the stock options under
the Black-Scholes option pricing model are as follows: expected
life of 4.96 years; volatility of 45.50%; a risk-free
interest rate of 2.70%; and a dividend yield of 0.881%. There
were two grants of stock options made in Fiscal 2009. For the
grants made on May 28, 2008, the weighted-average
assumptions underlying the valuation of the stock options under
the Black-Scholes option pricing model are as follows: expected
life of 4.72 years; volatility of 30.15%; a risk-free
interest rate of 3.34%; and a dividend yield of 0.664%. For the
grants made on May 27, 2008, the weighted-average
assumptions underlying the valuation of the stock options under
the Black-Scholes option pricing model are as follows: expected
life of 4.69 years; volatility of 30.22%; a risk-free
interest rate of 3.34%; and a dividend yield of 0.664%. |
27
|
|
|
(3)
|
|
Mr. Blakemore participates in the NTCA Plan. One of our
subsidiaries is a member of the National Telecommunications
Cooperative Association, which sponsors the NTCA Plan, a
multiple employer pension plan in which such subsidiary
participates as a contributing employer. The amount in this
column for Fiscal 2011 represents the aggregate change in
actuarial present value of his accumulated benefits under the
NTCA Plan from December 31, 2009 to December 31, 2010
(the last day of the NTCA Plans most-recently completed
fiscal year), the amount in this column for Fiscal 2010
represents the aggregate change in actuarial present value of
his accumulated benefits under the NTCA Plan from
December 31, 2008 to December 31, 2009 and the amount
in this column for Fiscal 2009 represents the aggregate change
in actuarial present value of his accumulated benefits under the
NTCA Plan from December 31, 2007 to December 31, 2008.
For more information regarding the NTCA Plan and the assumptions
used to calculate this amount, see the Pension Benefits
Table and Understanding Our Pension Benefits
Table in this proxy statement. The amount reported for
Fiscal 2009 reflects a correction from the amount previously
reported. |
|
(4)
|
|
Represents the Companys contributions to the NTCA Plan
($24,204 in Fiscal 2011) and payments for life insurance
premiums. |
|
(5)
|
|
Mr. Davis was elected an executive officer during Fiscal
2011 and, in accordance with the SECs rules, only his
compensation for Fiscal 2011 is presented in this proxy
statement. |
|
(6)
|
|
Represents amounts paid by us for the individual under a 401(k)
plan and payments for life insurance premiums. |
|
(7)
|
|
Represents amounts paid in Japanese yen and converted to U.S.
dollars using an exchange rate as of March 31, 2011 of
0.012021 U.S. dollars for each Japanese yen for Fiscal 2011, an
exchange rate as of March 31, 2010 of 0.010696 U.S. dollars
for each Japanese yen for Fiscal 2010 and an exchange rate as of
March 31, 2009 of 0.010106 U.S. dollars for each Japanese
yen for Fiscal 2009. The difference between the amount of base
salary as approved by the Compensation Committee and the Board
and the amount paid to Mr. Wertheimber as shown in this
table is due to the fact that Mr. Wertheimbers base
salary was approved in U.S. dollars and converted to and paid to
him in Japanese yen on the basis of a different fixed exchange
rate, but the amounts paid to him in Japanese yen were converted
to U.S. dollars for purposes of this table based on the exchange
rates noted above. |
|
(8)
|
|
Mr. Wertheimber is a resident of Japan and, under Japanese
law, must enroll in Japans national pension system to
which we make contributions. For Fiscal 2011, we contributed to
this pension system on his behalf and provided payments for life
insurance premiums. We also provided him with a vehicle
allowance and paid certain other vehicle-related expenses
totaling $34,479 for Fiscal 2011. |
28
GRANTS OF
PLAN-BASED AWARDS FISCAL 2011
The following table sets forth each grant of awards made to our
Named Executive Officers in Fiscal 2011 under plans established
by us:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Grant Date
|
|
|
Compen-
|
|
|
Estimated Future Payouts Under
|
|
|
Estimated Future Payouts Under
|
|
|
All Other
|
|
|
All Other
|
|
|
Exercise or
|
|
|
Grant Date
|
|
|
|
|
|
|
sation
|
|
|
Non-Equity Incentive Plan Awards
|
|
|
Equity Incentive Plan Awards
|
|
|
Stock
|
|
|
Option
|
|
|
Base
|
|
|
Fair Value of
|
|
|
|
|
|
|
Committee
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Price of
|
|
|
Stock and
|
|
|
|
|
|
|
Action
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Option
|
|
|
Option
|
|
|
|
|
|
|
Date
|
|
|
|
|
|
|
|
|
Shares of
|
|
|
Securities
|
|
|
Awards
|
|
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock or
|
|
|
Underlying
|
|
|
($/Sh)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
|
|
|
Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(#)(1)
|
|
|
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Terry Blakemore
|
|
|
|
05/17/2010
|
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
|
|
32.21
|
|
|
|
|
934,848
|
|
|
|
|
|
05/11/2010
|
(2)
|
|
|
|
05/11/2010
|
|
|
|
|
300,000
|
|
|
|
|
600,000
|
|
|
|
|
900,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/11/2010
|
(3)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,750
|
|
|
|
|
13,500
|
|
|
|
|
20,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
414,720
|
|
|
|
|
|
05/11/2010
|
(4)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,750
|
|
|
|
|
13,500
|
|
|
|
|
20,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
482,760
|
|
|
|
|
|
05/11/2010
|
(5)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
491,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth P. Davis
|
|
|
|
05/17/2010
|
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
32.21
|
|
|
|
|
140,227
|
|
|
|
|
|
05/11/2010
|
(6)
|
|
|
|
05/11/2010
|
|
|
|
|
37,917
|
|
|
|
|
75,833
|
|
|
|
|
113,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/01/2010
|
(7)
|
|
|
|
11/01/2010
|
|
|
|
|
68,750
|
|
|
|
|
137,500
|
|
|
|
|
206,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/11/2010
|
(3)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
2,000
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,440
|
|
|
|
|
|
05/11/2010
|
(4)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
2,000
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,520
|
|
|
|
|
|
05/11/2010
|
(5)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael McAndrew
|
|
|
|
05/17/2010
|
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
32.21
|
|
|
|
|
467,424
|
|
|
|
|
|
05/11/2010
|
(2)
|
|
|
|
05/11/2010
|
|
|
|
|
175,000
|
|
|
|
|
350,000
|
|
|
|
|
525,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/11/2010
|
(3)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,375
|
|
|
|
|
6,750
|
|
|
|
|
10,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
207,360
|
|
|
|
|
|
05/11/2010
|
(4)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,375
|
|
|
|
|
6,750
|
|
|
|
|
10,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
241,380
|
|
|
|
|
|
05/11/2010
|
(5)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
245,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Francis W.
|
|
|
|
05/17/2010
|
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
32.21
|
|
|
|
|
140,227
|
|
Wertheimber
|
|
|
|
05/11/2010
|
(2)
|
|
|
|
05/11/2010
|
|
|
|
|
66,250
|
|
|
|
|
132,500
|
|
|
|
|
198,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/11/2010
|
(3)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
2,000
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,440
|
|
|
|
|
|
05/11/2010
|
(4)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
2,000
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,520
|
|
|
|
|
|
05/11/2010
|
(5)
|
|
|
|
05/11/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
As of March 31, 2011, there were 1,223,560 shares of
Common Stock available for issuance under the Incentive Plan
(subject to appropriate adjustments in the event of stock
splits, stock dividends and similar dilutive events). No
dividends or dividend equivalents are paid on any of the awards
shown in this table. See the Compensation Discussion
and Analysis section of this proxy statement for a
more detailed discussion of the terms of the compensation awards
granted to our named executive officers. |
|
(2)
|
|
The amounts listed in this row represent the estimated future
payouts under the FY11 Annual Incentive Plan which was
recommended by our Compensation Committee and approved by our
Board on May 11, 2010. For the actual amount paid pursuant
to this award, see the 2011 row of the Non-Equity
Incentive Plan Compensation column of the
Summary Compensation Table Fiscal 2011,
Fiscal 2010 and Fiscal 2009. |
|
(3)
|
|
The amounts listed in this row represent the threshold, target
and maximum payments that may be made to Messrs. Blakemore,
Davis, McAndrew and Wertheimber pursuant to the Performance
Awards under the FY11 LTIP for the three fiscal years ending
March 31, 2013 based on achievement of the FY11 EBITDA
Goal. Those awards were recommended by our Compensation
Committee and approved by our Board on May 11, 2010 (other
than for Mr. Davis whose award was approved by our
Compensation Committee since he was not an executive officer at
the time of that award). For a description of the FY11 LTIP, see
the Compensation Discussion and Analysis
section of this proxy statement. |
|
(4)
|
|
The amounts listed in this row represent the threshold, target
and maximum payments that may be made to Messrs. Blakemore,
Davis, McAndrew and Wertheimber pursuant to the Performance
Awards under the FY11 LTIP for the three fiscal years ending
March 31, 2013 based on achievement of TSR. This award was
recommended by our Compensation Committee and approved by our
Board on May 11, 2010 (other than for |
29
|
|
|
|
|
Mr. Davis whose award was approved by our Compensation
Committee since he was not an executive officer at the time of
that award). For a description of the FY11 LTIP, see the
Compensation Discussion and Analysis section
of this proxy statement. |
|
(5)
|
|
The amounts reported in this row represent the number of
time-based restricted stock units granted in Fiscal 2011. These
awards vest ratably in three annual installments beginning one
year after the grant date. |
|
(6)
|
|
The amounts listed in this row represent Mr. Davis
annual incentive plan award from April 1, 2010 to
October 31, 2010, prior to his election as an executive
officer of the Company. |
|
(7)
|
|
On November 1, 2010, Mr. Davis was elected an
executive officer of the Company and his annual incentive plan
award was modified. The amounts listed in this row represent
Mr. Davis annual incentive plan award from
November 1, 2010 to March 31, 2011. |
30
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END FISCAL
2011
The following table sets forth all unexercised stock options and
stock awards which have been awarded by us to our Named
Executive Officers and are outstanding as of March 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
Name
|
|
|
Number of
|
|
|
Number of
|
|
|
Option
|
|
|
Option
|
|
|
Number of
|
|
|
Market
|
|
|
Equity
|
|
|
Equity
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Exercise Price
|
|
|
Expiration
|
|
|
Shares or
|
|
|
Value of
|
|
|
Incentive
|
|
|
Incentive
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
($)
|
|
|
Date
|
|
|
Units of
|
|
|
Shares or
|
|
|
Plan
|
|
|
Plan
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
|
|
|
|
|
|
Stock That
|
|
|
Units of
|
|
|
Awards:
|
|
|
Awards:
|
|
|
|
Options
|
|
|
Options
|
|
|
|
|
|
|
|
|
Have Not
|
|
|
Stock that
|
|
|
Number of
|
|
|
Market or
|
|
|
|
(#)
|
|
|
(#)
|
|
|
|
|
|
|
|
|
Vested
|
|
|
Have Not
|
|
|
Unearned
|
|
|
Payout
|
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
|
|
|
|
|
|
(#)(11)
|
|
|
Vested
|
|
|
Shares,
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($)(12)
|
|
|
Units or
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Rights
|
|
|
Shares,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
That Have
|
|
|
Units or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not Vested
|
|
|
Other Rights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(#)(13)
|
|
|
That Have
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($)(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Terry Blakemore
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67,000
|
|
|
|
|
2,355,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,667
|
|
|
|
|
937,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,667
|
|
|
|
|
|
|
|
|
|
34.290
|
|
|
|
|
08/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
39.770
|
|
|
|
|
10/31/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(1)
|
|
|
|
28.710
|
|
|
|
|
05/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,333
|
|
|
|
|
26,667
|
(2)
|
|
|
|
28.930
|
|
|
|
|
05/28/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,333
|
|
|
|
|
44,667
|
(3)
|
|
|
|
33.110
|
|
|
|
|
05/26/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
(4)
|
|
|
|
32.210
|
|
|
|
|
05/17/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth P. Davis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
351,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,100
|
|
|
|
|
144,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
41.450
|
|
|
|
|
09/21/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
29.815
|
|
|
|
|
04/01/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
40.260
|
|
|
|
|
09/29/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
36.035
|
|
|
|
|
08/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
39.770
|
|
|
|
|
10/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(1)
|
|
|
|
28.710
|
|
|
|
|
05/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,334
|
(2)
|
|
|
|
28.930
|
|
|
|
|
05/28/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,333
|
|
|
|
|
6,667
|
(5)
|
|
|
|
33.110
|
|
|
|
|
05/26/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
(6)
|
|
|
|
32.210
|
|
|
|
|
05/17/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael McAndrew
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,500
|
|
|
|
|
826,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,667
|
|
|
|
|
374,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
41.450
|
|
|
|
|
09/21/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
42.930
|
|
|
|
|
10/01/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
39.770
|
|
|
|
|
10/31/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
38.965
|
|
|
|
|
06/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,833
|
|
|
|
|
16,667
|
(1)
|
|
|
|
28.710
|
|
|
|
|
05/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,333
|
|
|
|
|
6,667
|
(2)
|
|
|
|
28.930
|
|
|
|
|
05/28/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,666
|
|
|
|
|
11,334
|
(7)
|
|
|
|
33.110
|
|
|
|
|
05/26/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(8)
|
|
|
|
32.210
|
|
|
|
|
05/17/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Francis W.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
|
|
|
316,350
|
|
Wertheimber
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,834
|
|
|
|
|
134,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
41.450
|
|
|
|
|
09/21/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
44.370
|
|
|
|
|
11/13/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
44.910
|
|
|
|
|
12/19/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
40.550
|
|
|
|
|
10/01/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
34.290
|
|
|
|
|
08/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
39.770
|
|
|
|
|
10/31/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,333
|
|
|
|
|
16,667
|
(1)
|
|
|
|
28.710
|
|
|
|
|
05/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,666
|
|
|
|
|
3,334
|
(2)
|
|
|
|
28.930
|
|
|
|
|
05/28/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,666
|
|
|
|
|
5,334
|
(9)
|
|
|
|
33.110
|
|
|
|
|
05/26/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
(10)
|
|
|
|
32.210
|
|
|
|
|
05/17/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
|
|
|
(1)
|
|
These options vested on May 27, 2011. |
|
(2)
|
|
These options vested on May 28, 2011. |
|
(3)
|
|
These options vested/vest in two (2) annual installments of
22,333 and 22,334 on May 26, 2011 and May 26, 2012,
respectively. |
|
(4)
|
|
These options vested/vest in three (3) annual installments
of 26,666, 26,667 and 26,667 on May 17, 2011, May 17,
2012 and May 17, 2013, respectively. |
|
(5)
|
|
These options vested/vest in two (2) annual installments of
3,333 and 3,334 on May 26, 2011 and May 26, 2012,
respectively. |
|
(6)
|
|
These options vested/vest in three (3) annual installments
of 4,000, 4,000 and 4,000 on May 17, 2011, May 17,
2012 and May 17, 2013, respectively. |
|
(7)
|
|
These options vested/vest in two (2) annual installments of
5,667 and 5,667 on May 26, 2011 and May 26, 2012,
respectively. |
|
(8)
|
|
These options vested/vest in three (3) annual installments
of 13,333, 13,333 and 13,334 on May 17, 2011, May 17,
2012 and May 17, 2013, respectively. |
|
(9)
|
|
These options vested/vest in two (2) annual installments of
2,667 and 2,667 on May 26, 2011 and May 26, 2012,
respectively. |
|
(10)
|
|
These options vested/vest in three (3) annual installments
of 4,000, 4,000 and 4,000 on May 17, 2011, May 17,
2012 and May 17, 2013, respectively. |
|
(11)
|
|
This column includes unvested restricted stock unit awards as of
March 31, 2011. Messrs. Blakemore, Davis, McAndrew and
Wertheimber were granted 16,000, 2,400, 4,000 and 2,000
restricted stock units, respectively, on May 26, 2009. Each
such award vests in three installments, 1/3 of which vested on
each of May 26, 2010 and May 26, 2011 and with 1/3
vesting on May 26, 2012. In addition,
Messrs. Blakemore, Davis, McAndrew and Wertheimber were
granted 16,000, 2,500, 8,000 and 2,500 restricted stock units,
respectively, on May 11, 2010. Each such award vests in
three installments, 1/3 of which vested on May 11, 2011 and
with 1/3 vesting on May 11, 2012 and 1/3 vesting on
May 11, 2013. |
|
(12)
|
|
These values are based on a market price of $35.15 per share,
the closing market price per share of the Common Stock on
March 31, 2011. |
|
(13)
|
|
This column shows the number of unvested performance shares (for
which the performance conditions had not been satisfied) as of
March 31, 2011 based on achieving performance goals at the
target levels. In the first quarter of Fiscal 2012, performance
share awards with respect to the following number of shares
shown in this column were either earned or forfeited:
Mr. Blakemore 40,000 shares;
Mr. Davis: 6,000 shares; Mr. McAndrew:
10,000 shares; and Mr. Wertheimber: 5,000 shares.
The remaining performance share awards are scheduled to vest in
the first quarter of Fiscal 2014, assuming the achievement of
the pre-approved performance objectives. |
32
OPTION
EXERCISES AND STOCK VESTED FISCAL 2011
This table shows the value (before applicable federal, state
and/or local
income taxes) realized by our Named Executive Officers from
stock options that were exercised and from stock awards that
vested during Fiscal 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
Name
|
|
|
Number of
|
|
|
Value Realized on
|
|
|
Number of
|
|
|
Value Realized
|
|
|
|
Shares
|
|
|
Exercise
|
|
|
Shares
|
|
|
on Vesting
|
|
|
|
Acquired
|
|
|
($)
|
|
|
Acquired on
|
|
|
($)(1)
|
|
|
|
on Exercise
|
|
|
|
|
|
Vesting
|
|
|
|
|
|
|
(#)
|
|
|
|
|
|
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Terry Blakemore
|
|
|
|
50,000
|
|
|
|
|
568,844
|
|
|
|
|
5,333
|
|
|
|
|
155,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth P. Davis
|
|
|
|
26,666
|
|
|
|
|
170,234
|
|
|
|
|
800
|
|
|
|
|
23,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael McAndrew
|
|
|
|
22,500
|
|
|
|
|
220,882
|
|
|
|
|
1,333
|
|
|
|
|
38,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Francis W. Wertheimber
|
|
|
|
|
|
|
|
|
|
|
|
|
|
666
|
|
|
|
|
19,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
These values are based on a market price of $29.25 per share,
the closing market price per share of the Common Stock on
May 25, 2010, the day prior to the date of vesting of these
stock awards. |
PENSION
BENEFITS FISCAL 2011
The following table provides information with respect to each
plan that provides for specified retirement payments or
benefits, or payments or benefits that will be provided
primarily following retirement, to our Named Executive Officers,
including tax-qualified defined benefit plans and supplemental
employee retirement plans, but excluding defined contribution
plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Plan Name
|
|
|
Number of
|
|
|
Present
|
|
|
Payments
|
|
|
|
|
|
|
Years
|
|
|
Value of
|
|
|
During Last
|
|
|
|
|
|
|
Credited
|
|
|
Accumulated
|
|
|
Fiscal Year
|
|
|
|
|
|
|
Service
|
|
|
Benefit
|
|
|
($)
|
|
|
|
|
|
|
(#)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Terry Blakemore
|
|
|
NTCA Plan
|
|
|
|
30
|
(1)
|
|
|
|
1,951,816
|
(2)
|
|
|
24,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth P. Davis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael McAndrew
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Francis W. Wertheimber
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Mr. Blakemore commenced participation in the NTCA Plan in
October 1985 and was granted service credit back to March 1981.
This additional service credit granted to him only has the
effect of making him retirement eligible, without any benefit
reduction, at an earlier date and does not result in any
augmentation of benefits paid to him. |
|
(2)
|
|
The actuarial present value of Mr. Blakemores
accumulated benefits under the NTCA Plan was computed as of
December 31, 2010 (the last day of the most recently
completed fiscal year of the NTCA Plan). The amount was computed
using the following assumptions and valuation methods:
(i) a retirement age of 55 (the earliest age at which he
could retire without any benefit reduction due to age),
(ii) an annual increase of 2.0% of compensation,
(iii) the 2011 mortality table provided in Internal Revenue
Service Notice
2008-85 and
(iv) a discount rate of 7.50%. |
33
UNDERSTANDING
OUR PENSION BENEFITS TABLE
The
Retirement and Security Program of the National
Telecommunications Cooperative Association
The NTCA Plan is a multiple employer pension plan which is the
main pension plan for over 380 employers who are members of the
National Telecommunications Cooperative Association (of which
one of our subsidiaries is a member). The NTCA Plan will pay
retirement benefits to Mr. Blakemore based on his years of
service with us and his compensation. As a qualified plan, the
NTCA Plan is subject to various requirements on coverage,
funding, vesting and the amount of compensation which may be
taken into account in calculating benefits.
Normal Retirement. The normal retirement
benefit under the NTCA Plan is the benefit which will be
received at the normal retirement date, which is the first day
of the month containing Mr. Blakemores
65th birthday.
The normal retirement benefit is expressed as a life annuity
with ten (10) years certain.
The normal retirement benefit is the sum of the basic normal
retirement benefit that Mr. Blakemore has accrued on the
basis of active participation and certain other types of
benefits such as fixed benefits, supplemental benefits and
benefit upgrades. The basic normal retirement benefit increases
as Mr. Blakemores average compensation increases and
is based on: (i) High-5 Compensation which
means the average of his
W-2+
Compensation (defined below) for the five (5) years of the
last ten (10) years during which his
W-2+
Compensation was the highest
(W-2+
Compensation means
W-2 wages,
including any bonuses, overtime and commissions, plus pre-tax
401(k) contributions, Section 125 contributions (cafeteria
plan contributions) and Section 457 contributions
(contributions to a non-qualified deferred compensation plan
adopted after 1986 by a tax-exempt employer) and, effective for
plan years beginning after December 31, 2000,
Section 132(f)(4) income (qualified transportation fringe
benefit income), but excluding income attributable to
employer-sponsored group term life insurance over $50,000),
(ii) total accruals, which is generally the sum of certain
contribution percentages (both employer and employee) made on
his behalf plus contribution percentages added through program
upgrades, rollovers and prior service benefits, (iii) the
applicable program actuarial factor and (iv) the applicable
uplift multiplier.
Additionally, the maximum annual pension which
Mr. Blakemore accrues may never exceed 100% of his average
W-2+
Compensation (taxable compensation prior to January 1,
1998) for his High-3 (High-3
compensation refers to the average of the highest three
(3) consecutive years of Mr. Blakemores
W-2+
Compensation) years before retirement.
Early Retirement. The NTCA Plan permits early
retirement on or after the first day of the month in which
Mr. Blakemore reaches the age of 55. At age 55,
Mr. Blakemore (assuming continued employment with us) will
be entitled to unreduced retirement benefits at that time
pursuant to the Rule-of-85. The Rule-of-85 allows
certain plan participants to retire early (before the age of 65
but not before age 55) without an actuarial reduction
in their accrued benefits for retiring before age 65. Under
this formula, the sum of a participants age at retirement
and number of years of service must equal or exceed 85 in order
for the participant to be eligible for Rule-of-85
benefits.
Late Retirement. The NTCA Plan permits late
retirement (retirement after the age of 65). If a participant
retires late, the participants retirement benefits
automatically will be increased by one-quarter of one percent
(.25%) for each month the participant delays retirement beyond
age 65. Additionally, if a participant continues working
after his
65th birthday,
benefits may increase through additional accruals and higher
High-5 Compensation.
Forms of Payment. The NTCA Plan provides for
the following forms of payment options:
(i) 10-years
certain and life thereafter,
(ii) 5-years
certain and life thereafter, (iii) life only, (iv) if
married, a qualified joint and survivor annuity (with 50% of the
monthly amount payable during the participants lifetime
continued after the participants death to his surviving
spouse for the life of the surviving spouse), (v) if
married, a qualified joint and survivor annuity (with
662/3%
of the monthly amount payable during the participants
lifetime continued after the participants death to his
surviving spouse for the life of the surviving spouse),
(vi) a qualified joint and survivor annuity (with 75% of
the monthly amount payable during the participants
lifetime continued after the participants death to his
surviving spouse for the life of the surviving spouse),
(vii) if married, a qualified joint and survivor annuity
(with 100% of the monthly amount payable during the
participants lifetime continued after the
participants death to his surviving spouse for the life of
the surviving spouse), (viii) if married, a qualified joint
34
and survivor annuity under (iii) (vii) (with the
annuity that is payable guaranteed for 10 years following
retirement and then payable at 50%,
662/3%,
75% or 100% to the spouse (if the participant predeceases the
surviving spouse)), (ix) an annuity under (i)
(viii) that is supplemented by a certain amount between the
time of retirement and either age 62 or normal social
security retirement age, and then actuarially reduced once that
age is reached, (x) a combination of a partial single sum
and any one of the foregoing annuity options, (xi) a
guaranteed annuity option or (xii) a single lump sum.
POTENTIAL
PAYMENTS UPON TERMINATION OR
CHANGE-IN-CONTROL
We do not have employment agreements with our Named Executive
Officers. We entered into an agreement with Francis W.
Wertheimber in November 2004, an agreement with Michael McAndrew
and R. Terry Blakemore in May 2007, an amended and restated
agreement with Mr. Blakemore in October 2007, an amended
and restated agreement with Mr. McAndrew in December 2008
and an agreement with Mr. Davis in January 2011, which
agreements provide for certain benefits to the Named Executive
Officers in the event of a qualifying termination of their
employment as described below. The original term of each of the
agreements is five (5) years with an automatic renewal on a
one-year basis thereafter absent notice of nonrenewal six
(6) months prior to the renewal date; provided, however,
that if a
Change-in-Control
(as defined below) occurs during the initial or any renewal
period, the agreement will survive until the second anniversary
of the date of the
Change-in-Control.
Each of the above-mentioned agreements contains a provision
prohibiting the respective Named Executive Officer from
competing with us during his employment with us and for five
(5) years thereafter. Specifically, without our prior
written consent, the Named Executive Officers may not directly
or indirectly engage in, assist or have an active interest in
(whether as proprietor, partner, investor, stockholder, officer,
director or any type of principal whatsoever), or enter the
employ of or act as agent for, or advisor or consultant to, any
person, firm, partnership, association, corporation or business
organization, entity or enterprise which is or is about to
become directly or indirectly engaged in any business that is
competitive with any of our businesses in which the Named
Executive Officer is or was engaged.
Our Named Executive Officers are also bound, during the term of
their agreement and at all times thereafter, by restrictive
covenants with respect to confidential information, as more
fully described in their respective agreements. They are not
permitted, unless authorized in writing by us, to disclose or
cause to be disclosed such confidential information or to
authorize or permit such disclosure of the confidential
information to any unauthorized third party, or to use the
confidential information (i) for their own benefit or
advantage, (ii) for the benefit or advantage of any third
party or (iii) in any manner which is intended to injure or
cause loss, whether directly or indirectly, to us. At any time
upon our request, and immediately upon termination, the Named
Executive Officers must surrender all written or otherwise
tangible documentation representing such confidential
information to us.
A description of the other material terms of these agreements
and estimates of the payments and benefits which each Named
Executive Officer would receive upon a qualifying termination
are set forth below. The estimates have been calculated assuming
a termination date of March 31, 2011, and are based upon
the closing price of our Common Stock on that date ($35.15). Due
to the number of factors that affect the nature and amount of
any benefits provided upon the events discussed below, such as
the timing during the year of any triggering event and our stock
price, the actual amounts to be paid or distributed may be
different.
Termination
Payments and Benefits Outside of a
Change-in-Control
R. Terry
Blakemore:
If Mr. Blakemores employment with the Company is
terminated (i) due to his death or Disability (as defined
below), (ii) by Mr. Blakemore other than for Good
Reason for Termination (as defined below) or (iii) by us
due to Cause for Termination or in accordance with Retirement
(each as defined below), then, except as otherwise set forth
below, we have no payment obligations to him other than as
provided by our various policies, procedures and practices
generally applicable to all employees.
35
If, however, Mr. Blakemores employment with the
Company is involuntarily terminated during the term of his
agreement and prior to a
Change-in-Control
(i) by us other than due to his death or Disability or in
accordance with Retirement or (ii) by Mr. Blakemore
for Good Reason for Termination other than at a time when we
could have terminated him due to Cause for Termination (as
defined below), then Mr. Blakemore is entitled to receive a
payment equal to his base salary at the rate in effect on the
termination date for the period equal to twelve (12) months
from the termination date. Such payment is to be made to
Mr. Blakemore in the form of a lump sum, subject to all
applicable withholdings, within sixty (60) days following
the termination date; provided, however, that in order
for Mr. Blakemore to terminate his employment for Good
Reason for Termination, (i) he must deliver a notice of
termination to us within ninety (90) days of the event
constituting Good Reason for Termination, (ii) the event
must remain uncorrected for thirty (30) days following the
date on which Mr. Blakemore gives us notice of his intent
to terminate (the Notice Period) and (iii) the
termination date must occur within sixty (60) days after
the expiration of the Notice Period.
Named
Executive Officers other than Mr. Blakemore:
The agreements with Messrs. Davis, McAndrew and Wertheimber
do not provide for any benefits outside of a
change-in-control
context. If their respective employment is terminated due to
death or Disability or by them or by us at any time prior to a
Change-in-Control,
then we have no payment obligations to them other than as
provided by our various policies, procedures and practices
generally applicable to all employees.
Certain
Definitions:
The following definitions are contained in the agreements with
Messrs. Blakemore, Davis, McAndrew and Wertheimber:
Cause for Termination: Named Executive Officers
deliberate and intentional failure to devote his best efforts to
the performance of duties, gross misconduct materially and
demonstrably injurious to us, conviction of criminal fraud,
embezzlement against us or a felony involving moral turpitude,
continuing failure after notice to adhere to the nondisclosure
and noncompete portions of the agreements (described above) or
willful failure to follow instructions of our Board. For
purposes of this definition, no act, or failure to act, on the
Named Executive Officers part shall be considered
deliberate and intentional or to constitute gross
misconduct unless done, or omitted to be done, by the Named
Executive Officer not in good faith and without reasonable
belief that the Named Executive Officers action or
omission was in the best interests of the Company.
Change-in-Control:
a
change-in-control
of the Company is deemed to occur if:
|
|
|
|
i.
|
it is reportable as such by SEC rules;
|
|
ii.
|
twenty percent (20%) or more of the combined voting power of our
then-outstanding capital stock is acquired, coupled with or
followed by a change in a majority of the members of our
Board; or
|
|
iii.
|
we sell all or substantially all of our assets or merge,
consolidate or reorganize with another company and (x) upon
conclusion of the transaction less than fifty-one percent (51%)
of the outstanding securities entitled to vote in the election
of directors of the acquiring company or resulting company are
owned by the persons who were our stockholders prior to the
transaction, and following the transaction there is a change in
a majority of the members of our Board or (y) following the
transaction, a person or group would be the owner of twenty
percent (20%) or more of the combined voting power of the
acquiring company or resulting company, and there is a change in
a majority of the members of our Board.
|
Disability: incapacity due to physical or mental illness
or injury which causes a Named Executive Officer to be unable to
perform his duties to us during ninety (90) consecutive
days or one hundred twenty (120) days during any six
(6) month period.
Good Reason for Termination (with respect to
Mr. Blakemore): a material negative change in
Mr. Blakemores service relationship with us and any
Affiliate of ours, taken as a whole, without his consent, on
account of one or more of the following conditions: (i) a
material diminution in his base compensation; (ii) a
material diminution in his authority, duties or
responsibilities; or (iii) after a
Change-in-Control
has occurred, a change in the geographic
36
location at which Mr. Blakemore must report to and perform
the majority of his services of more than fifty (50) miles.
For purposes of Mr. Blakemores agreement,
Affiliate means, with respect to any person or legal
entity, any other person or legal entity controlling, controlled
by or under common control with such person or legal entity.
Good Reason for Termination (with respect to
Messrs. Davis and McAndrew): a material negative change
in Mr. Davis or Mr. McAndrews service
relationship with us and any Affiliate of ours, taken as a
whole, without his consent, on account of one or more of the
following conditions: (i) a material diminution in his base
compensation; (ii) a material diminution in his authority,
duties or responsibilities; or (iii) a change in the
geographic location at which Mr. Davis or Mr. McAndrew
must report to and perform the majority of his services of more
than fifty (50) miles. For purposes of Mr. Davis
and Mr. McAndrews agreements, Affiliate
means, with respect to any person or legal entity, any other
person or legal entity controlling, controlled by or under
common control with such person or legal entity.
Good Reason for Termination (with respect to
Mr. Wertheimber): our failure to have any successor
assume the agreement or the occurrence of any of the following
after a
Change-in-Control:
(i) the assignment of new duties materially and
substantially inconsistent with prior duties, responsibilities
and status, or a material change in reporting responsibilities,
titles or offices, (ii) reduction in base salary,
(iii) failure to continue comparable incentive
compensation, (iv) failure to continue comparable stock
option and other fringe benefits, (v) relocation beyond
fifty (50) miles or (vi) any purported termination of
the Named Executive Officer other than for Cause for
Termination, Disability or Retirement or made without a
specified written notice of termination.
Retirement: termination of the Named Executive
Officers employment after age sixty-five (65) or in
accordance with any mandatory retirement arrangement with
respect to an earlier age agreed to by such Named Executive
Officer.
Termination
Payments and Benefits After a
Change-in-Control
The agreements with Messrs. Blakemore, Davis, McAndrew and
Wertheimber provide for payments and other benefits if such
Named Executive Officer is terminated within two (2) years
following a
Change-in-Control
either by (i) us other than for Cause for Termination,
death, Disability or Retirement or (ii) the
individuals resignation for Good Reason for Termination.
In addition to any accrued but unpaid benefits, the agreements
entitle each Named Executive Officer to an amount of cash equal
to the sum of:
|
|
|
|
|
two (2) times (three (3) times in the case of
Mr. Blakemore) the sum of his then current annual base
salary in the year of termination (or, if greater, (x) in
the case of termination for Good Reason for Termination, the
Named Executive Officers salary preceding the date giving
rise to his Good Reason for Termination or (y) the Named
Executive Officers salary for the year in effect on the
date of the
Change-in-Control)
|
|
|
two (2) times (three (3) times in the case of
Mr. Blakemore) the greatest of (x) one third (1/3) of
the aggregate cash bonuses or awards received by the Named
Executive Officer as incentive compensation or bonus during the
three (3) calendar years immediately preceding the date of
termination, (y) in the case of termination for Good Reason
for Termination, one third (1/3) of the aggregate cash bonuses
or awards received by the Named Executive Officer as incentive
compensation or bonus during the three (3) calendar years
preceding the date giving rise to the Named Executive
Officers Good Reason for Termination or (z) one third
(1/3) of the aggregate cash bonuses or awards received by the
Named Executive Officer as incentive compensation or bonus
during the three (3) calendar years preceding the date of
the
Change-in-Control
|
|
|
an amount equal to the total cash award or bonus that would have
been received by the Named Executive Officer under any long-term
incentive plan, assuming that, in addition to any goals met
prior to the termination date, all goals that were to be
measured after such date were achieved and the Named Executive
Officer remained employed, less any portion of the cash award or
bonus for that award period previously paid to the Named
Executive Officer
|
37
|
|
|
|
|
medical insurance and other similar benefits for the period of
eighteen (18) months (two (2) years in the case of
Mr. Wertheimber) following the termination date, as if such
Named Executive Officer remained in our continuous employ during
such period
|
|
|
unvested options will vest and remain outstanding in accordance
with their respective terms
|
Such payments are to be made to Messrs. Blakemore, Davis,
McAndrew and Wertheimber on or before the sixtieth
(60th)
day following the termination date.
In addition, the restricted stock unit awards granted under the
FY11 LTIP vest immediately prior to a
change-in-control
(as defined in the Incentive Plan). Similarly, the performance
share awards granted under the FY11 LTIP provide that, if a
change-in-control
(as defined in the Incentive Plan) occurs prior to the
conclusion of the applicable performance period, then the
employee is entitled to one share of Common Stock for each
performance share, and if the
change-in-control
occurs following the conclusion of the applicable performance
period but before the settlement of the performance share award,
then the employee is entitled to receive the number of shares of
Common Stock determined based upon achievement of the applicable
performance goals.
Estimated
Termination and
Change-in-Control
Payments
R. Terry
Blakemore:
The following table sets forth the potential
payments(1),
in addition to accrued benefits, that Mr. Blakemore would
be entitled to receive assuming that his employment was
terminated on March 31, 2011 pursuant to the terms
described above:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of Termination
|
|
|
Salary
|
|
|
Bonus
|
|
|
LTIP Payment
|
|
|
Medical and
|
|
|
Acceleration of
|
|
|
Acceleration of
|
|
|
Total
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Other Similar
|
|
|
Unvested Stock
|
|
|
Unvested Stock
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit
|
|
|
Options(2)(3)
|
|
|
Awards(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuation
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying termination prior to a
Change-in-Control
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualifying termination following a
Change-in-Control
|
|
|
1,800,000
|
|
|
1,402,000
|
|
|
|
|
|
26,339(5)
|
|
|
653,189
|
|
|
3,292,395
|
|
|
7,173,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The payments shown reflect the maximum amount that would have
been paid. Mr. Blakemores agreement contains a
provision which could have the effect of reducing such payments
based on the effect of excise taxes applicable to such payments
under the Code. |
|
(2)
|
|
Represents the value of the acceleration of unvested options as
of March 31, 2011 based on the difference between the
exercise price of the unvested options and $35.15, the closing
price of the Common Stock on NASDAQ on March 31, 2011. |
|
(3)
|
|
In addition, each of the Companys 1992 Stock Option Plan,
as amended (the Employee Plan), and the Incentive
Plan provides that, regardless of employment termination, in the
event of a
change-in-control,
all then-outstanding options will vest immediately and become
exercisable. For purposes of the Employee Plan and the Incentive
Plan, a
change-in-control
of the Company occurs if (i) any person becomes the
beneficial owner, directly or indirectly, of our securities
representing (a) fifty percent (50%) or more of the
combined voting power of our then-outstanding securities or
(b) twenty-five percent (25%) or more but less than fifty
percent (50%) of the combined voting power of our
then-outstanding securities if such transaction(s) giving rise
to such beneficial ownership are not approved by our Board; or
(ii) at any time a majority of the members of our Board
have been elected or designated by any such person; or
(iii) our Board approves a sale of all or substantially all
of our assets or any merger, consolidation, issuance of
securities or purchase of assets, the result of which would be
the occurrence of any event described in clause (i) or
(ii) above. |
38
|
|
|
(4)
|
|
The numbers in this column represent 26,667 shares of
Common Stock to be received upon vesting of outstanding
restricted stock units and 67,000 shares of Common Stock to
be received upon vesting of outstanding performance share
awards, assuming a payout at the target performance level, at a
value of $35.15 per share, the closing price of the Common Stock
on NASDAQ on March 31, 2011. |
|
(5)
|
|
Represents the value of continued health, dental and vision
benefits for an eighteen (18) month period based on COBRA
(Consolidated Omnibus Budget Reconciliation Act) rates as of
March 31, 2011. |
Estimated
Change-in-Control
Payments
The following table sets forth the potential
payments(1),
in addition to accrued benefits, that the Named Executive
Officers, other than Mr. Blakemore, would be entitled to
receive assuming that the Named Executive Officers
employment was terminated on March 31, 2011 pursuant to the
terms described above in connection with a
Change-in-Control:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Salary
|
|
|
Bonus
|
|
|
LTIP Payment
|
|
|
Medical and
|
|
|
Acceleration of
|
|
|
Acceleration of
|
|
|
Total
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Other Similar
|
|
|
Unvested Stock
|
|
|
Unvested Stock
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit
|
|
|
Options(2)(3)
|
|
|
Awards(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuation
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth P. Davis
|
|
|
|
660,000
|
|
|
|
|
243,567
|
|
|
|
|
|
|
|
|
|
19,380
|
(5)
|
|
|
|
134,018
|
|
|
|
|
495,615
|
|
|
|
|
1,552,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael McAndrew
|
|
|
|
700,000
|
|
|
|
|
360,373
|
|
|
|
|
|
|
|
|
|
19,380
|
(5)
|
|
|
|
289,526
|
|
|
|
|
1,200,970
|
|
|
|
|
2,570,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Francis W. Wertheimber
|
|
|
|
749,547
|
(6)
|
|
|
|
230,510
|
(6)
|
|
|
|
|
|
|
|
|
13,964
|
(7)
|
|
|
|
174,234
|
|
|
|
|
451,115
|
|
|
|
|
1,619,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The payments shown reflect the maximum amount that would have
been paid. The agreement with each of Messrs. Davis,
McAndrew and Wertheimber contains a provision which could have
the effect of reducing such payments based on the effect of
excise taxes applicable to such payments under the Code. |
|
(2)
|
|
Represents the value of the acceleration of unvested options as
of March 31, 2011 based on the difference between the
exercise price of the unvested options and $35.15, the closing
price of the Common Stock on NASDAQ on March 31, 2011. |
|
(3)
|
|
In addition, each of the Employee Plan and the Incentive Plan
provides that, regardless of employment termination, in the
event of a
change-in-control,
all then-outstanding options will vest immediately and become
exercisable. For purposes of the Employee Plan and the Incentive
Plan, a
change-in-control
of the Company occurs if (i) any person becomes the
beneficial owner, directly or indirectly, of our securities
representing (a) fifty percent (50%) or more of the
combined voting power of our then-outstanding securities or
(b) twenty-five percent (25%) or more but less than fifty
percent (50%) of the combined voting power of our
then-outstanding securities if such transaction(s) giving rise
to such beneficial ownership are not approved by our Board; or
(ii) at any time a majority of the members of our Board
have been elected or designated by any such person; or
(iii) our Board approves a sale of all or substantially all
of our assets or any merger, consolidation, issuance of
securities or purchase of assets, the result of which would be
the occurrence of any event described in clause (i) or
(ii) above. |
|
(4)
|
|
The numbers in this column represent (1) for
Mr. Davis, 4,100 shares of Common Stock to be received
upon vesting of outstanding restricted stock units and
10,000 shares of Common Stock to be received upon vesting
of outstanding performance share awards, assuming a payout at
the target performance level, at a value of $35.15 per share,
the closing price of the Common Stock on NASDAQ on
March 31, 2011; (2) for Mr. McAndrew,
10,667 shares of Common Stock to be received upon vesting
of outstanding restricted stock units and 23,500 shares of
Common Stock to be received upon vesting of outstanding
performance share awards, assuming a payout at the target
performance level, at a value of $35.15 per share, the closing
price of the Common Stock on NASDAQ on March 31, 2011; and
(3) for Mr. Wertheimber, 3,834 shares of Common
Stock to be received upon vesting of outstanding restricted
stock units and 9,000 shares of Common Stock to be received
upon vesting of outstanding performance share awards, assuming a
payout at the target performance level, at a value of $35.15 per
share, the closing price of the Common Stock on NASDAQ on
March 31, 2011. |
39
|
|
|
(5)
|
|
Represents the value of continued health, dental and vision
benefits for an eighteen (18) month period based on COBRA
rates as of March 31, 2011. |
|
(6)
|
|
For Mr. Wertheimber, this value represents a conversion
from Japanese yen to U.S. dollars using an exchange rate on
March 31, 2011. |
|
(7)
|
|
Represents the value of continued medical and similar benefits
for a two (2) year period beginning on March 31, 2011
based on rates determined under the Japanese health care system
and is converted from Japanese yen to U.S. dollars using an
exchange rate on March 31, 2011. |
REPORT OF
THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The following is the report of our Audit Committee with respect
to the audited financial statements for Fiscal 2011 included in
the
Form 10-K.
The information contained in this report shall not be deemed to
be soliciting material or to be filed
with the SEC, nor shall such information be incorporated by
reference into any future filing under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as
amended, except to the extent that the Company specifically
incorporates it by reference in such filing.
Review
with Management
Our Audit Committee has reviewed and discussed the
Companys audited financial statements with our management.
Review
and Discussions with Independent Registered Public Accounting
Firm
Our Audit Committee has discussed with BDO, the Companys
independent registered public accounting firm for Fiscal 2011,
the matters required to be discussed by SAS 61, as amended
(Codification of Statements on Accounting Standards), which
includes, among other items, matters related to the conduct of
the audit of the financial statements.
Our Audit Committee has also received written disclosures and
the letter from BDO required by applicable requirements of the
Public Company Accounting Oversight Board (which relates to the
accountants independence from the Company and its related
entities) and has discussed with BDO its independence from the
Company.
Conclusion
Based on the review and discussions referred to above, our Audit
Committee recommended to our Board that the Companys
audited financial statements be included in its 2011
Form 10-K.
Audit Committee:
Richard L. Crouch, Chairman
Thomas G. Greig
William H. Hernandez
40
EQUITY
PLAN COMPENSATION INFORMATION
The following table sets forth information about our equity
compensation plans as of March 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
Plans
|
|
|
Number of Securities to Be
|
|
|
Weighted-Average
|
|
|
Number of Securities
|
|
|
|
Issued Upon Exercise of
|
|
|
Exercise Price of
|
|
|
Remaining Available for
|
|
|
|
Outstanding Options,
|
|
|
Outstanding Options,
|
|
|
Future Issuance Under Equity
|
|
|
|
Warrants and Rights
|
|
|
Warrants and Rights
|
|
|
Compensation Plans
|
|
|
|
(#)
|
|
|
($)
|
|
|
(Excluding Securities
|
|
|
|
|
|
|
|
|
|
Reflected in Column (a))
|
|
|
|
|
|
|
|
|
|
(#)
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans approved by security holders
|
|
|
|
3,327,043
|
(1)
|
|
|
|
35.65
|
(2)
|
|
|
1,223,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
3,327,043
|
(1)
|
|
|
|
35.65
|
(2)
|
|
|
1,233,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes both vested and unvested options. Also includes
outstanding restricted stock units and performance share awards
at the target level of performance. See the
Compensation Discussion and Analysis section
of this proxy statement for a discussion of our restricted stock
units and performance share awards. |
|
(2)
|
|
Does not take into account the outstanding restricted stock
units and performance share awards. |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information publicly available in
Schedules 13D and 13G as filed with the SEC, as of
March 31, 2011, regarding the beneficial ownership of our
Common Stock by all stockholders known by us to be beneficial
owners of more than five percent (5%) of our outstanding Common
Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Percent of
|
|
|
|
Shares
|
|
|
Shares(4)
|
|
|
|
|
|
|
|
FMR LLC(1)
|
|
|
|
1,685,039
|
|
|
|
9.4%
|
82 Devonshire Street, Boston, MA 02109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dimensional Fund Advisors
LP(2)
|
|
|
|
1,413,593
|
|
|
|
7.9%
|
Palisades West, Building One, 6300 Bee Cave Road, Austin, TX,
78746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock,
Inc.(3)
|
|
|
|
1,373,776
|
|
|
|
7.7%
|
40 East 52nd Street, New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes 1,685,039 shares beneficially owned by Fidelity
Management & Research Company (Fidelity),
a wholly-owned subsidiary of FMR LLC and a registered investment
adviser, of which 1,675,239 shares are owned by one
investment company, Fidelity Low-Priced Stock Fund. Edward C.
Johnson 3d, Chairman of FMR LLC, FMR LLC and the funds each has
sole power to dispose of the 1,685,039 shares owned by the
funds. Neither FMR LLC nor Edward C. Johnson 3d has the sole
power to vote or direct the voting of the shares owned directly
by the funds, which power resides with the funds Boards of
Trustees. Fidelity carries out the voting of the shares under
written guidelines established by the funds Boards of
Trustees. This information is derived from Amendment No. 13
to FMR LLCs Schedule 13G filed with the SEC on
February 14, 2011. |
41
|
|
|
(2)
|
|
Dimensional Fund Advisors LP (Dimensional) is a
registered investment adviser that furnishes investment advice
to four registered investment companies and serves as investment
manager to certain other commingled group trusts and separate
accounts. Dimensional beneficially owns 1,413,593 shares,
of which it has sole voting power with respect to
1,388,572 shares and sole dispositive power with respect to
1,413,593 shares. This information is derived from
Amendment No. 5 to Dimensionals Schedule 13G
filed with the SEC on February 2, 2011. |
|
(3)
|
|
Includes 1,373,776 shares beneficially owned by BlackRock,
Inc., of which it has sole voting power with respect to
1,373,776 shares and sole dispositive power with respect to
1,373,776 shares. This information is derived from
Amendment No. 1 to BlackRock, Inc.s Schedule 13G
filed with the SEC on February 3, 2011. |
|
(4)
|
|
Based on 17,918,094 shares outstanding as of March 31,
2011. |
42
SECURITY
OWNERSHIP OF MANAGEMENT
The following table sets forth certain information available to
us, as of March 31, 2011, regarding the shares of our
Common Stock beneficially owned by (i) each of our
directors; (ii) each of our Named Executive Officers and
(iii) all of our directors and executive officers as a
group:
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Percent of
|
|
|
|
Shares
|
|
|
Shares(4)
|
|
|
|
|
|
|
|
William F.
Andrews(1)
|
|
|
|
58,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
R. Terry
Blakemore(2)
|
|
|
|
257,588
|
|
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
Richard L.
Crouch(1)
|
|
|
|
33,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
Kenneth P.
Davis(2)
|
|
|
|
73,226
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
Thomas W.
Golonski(1)
|
|
|
|
43,500
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
Thomas G.
Greig(1)
|
|
|
|
79,001
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
William H. Hernandez
|
|
|
|
3,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
Michael
McAndrew(2)
|
|
|
|
172,105
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
Edward A.
Nicholson, Ph.D.(1)
|
|
|
|
32,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
Francis W.
Wertheimber(2)
|
|
|
|
261,500
|
|
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group of ten
(10) persons(3)
|
|
|
|
1,012,920
|
|
|
|
5.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes for Messrs. Andrews, Crouch, Golonski and Greig
and Dr. Nicholson: 42,000, 26,000, 37,000, 42,000 and
26,000 shares, respectively, pursuant to rights to acquire
such shares as a result of vested options, as of March 31,
2011 or within sixty (60) days thereafter, granted under
the Companys 1992 Director Stock Option Plan, as
amended (the Director Plan). |
|
(2)
|
|
Includes for Messrs. Blakemore, Davis, McAndrew and
Wertheimber: 242,999, 71,028, 167,166 and 259,333 shares,
respectively, pursuant to rights to acquire such shares as a
result of vested options, as of March 31, 2011 or within
sixty (60) days thereafter, granted under the Employee Plan
and the Incentive Plan. Also includes for
Messrs. Blakemore, Davis, McAndrew and Wertheimber 10,666,
1,633, 3,999 and 1,500 shares, respectively, pursuant to
grants of restricted stock units under the Incentive Plan, which
vested within sixty (60) days from March 31, 2011. |
|
(3)
|
|
Includes for all directors and executive officers as a group
931,324 shares pursuant to rights to acquire such shares as
a result of vested options and restricted stock units, as of
March 31, 2011 or within sixty (60) days thereafter,
granted under the Employee Plan, the Director Plan and the
Incentive Plan. |
|
(4)
|
|
Based on 17,918,094 shares outstanding as of March 31,
2011. |
The difference between the amounts set forth in the above table
and the amounts indicated in the footnotes are shares owned
outright either directly or indirectly.
|
|
|
* |
|
Represents less than 1% of our outstanding Common Stock. |
43
INDEPENDENT
PUBLIC ACCOUNTANTS
Fees
Billed to Us by BDO during Fiscal 2011 and Fiscal 2010
Audit Fees: An aggregate of $1,770,000
was billed for professional services rendered and for expenses
for the audit of our annual financial statements for Fiscal 2011
and our internal controls over financial reporting, statutory
audits required internationally and the review of financial
statements included in our quarterly reports on
Form 10-Q
during Fiscal 2011. An aggregate of $1,822,970 was billed for
professional services rendered and for expenses for the audit of
our annual financial statements for Fiscal 2010 and our internal
controls over financial reporting, statutory audits required
internationally and the review of financial statements included
in our quarterly reports on
Form 10-Q
during Fiscal 2010.
Audit-Related Fees: No audit-related
fees were billed by BDO during Fiscal 2011 or Fiscal 2010.
Tax Fees: A tax fee of $47,500 was
billed by BDO in Fiscal 2011. No tax fees were billed by BDO
during Fiscal 2010.
All Other Fees: BDO did not render any
other professional services to us during Fiscal 2011 or Fiscal
2010.
All services performed by BDO that are required to be
pre-approved under the SECs and NASDAQs rules and
the Audit Committees charter are approved by our Audit
Committee or its chair prior to BDOs engagement for such
services. In the case of an approval by the chair of our Audit
Committee, such approval is presented for ratification by our
Audit Committee at its next regular meeting.
ADDITIONAL
INFORMATION
FORM 10-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION
A copy of the 2011
Form 10-K
is available to stockholders. A stockholder may obtain such copy
free of charge on our Web site at
http://www.blackbox.com
or by writing to the Investor Relations Department, Black Box
Corporation, 1000 Park Drive, Lawrence, Pennsylvania 15055 (a
copy of any exhibits thereto will be provided upon payment of a
reasonable charge limited to our cost of providing such
exhibits).
SOLICITATION
OF PROXIES
We will pay the expenses in connection with the printing,
assembling and mailing to the holders of our Common Stock the
Notice of Annual Meeting of Stockholders, this proxy statement
and the accompanying form of proxy. In addition to the use of
the mails, our directors, officers or regular employees may
solicit proxies personally or by telephone, facsimile or email.
We may request the persons holding stock in their names, or in
the names of their nominees, to send proxy material to, and
obtain proxies from, their principals, and will reimburse such
persons for their expense in so doing.
STOCKHOLDER
NOMINATIONS AND PROPOSALS
Stockholders who believe they are eligible to have their
proposals included in our proxy statement for the annual meeting
expected to be held in August 2012, in addition to other
applicable requirements established by the SEC, must ensure that
their proposals are received by the Secretary of the Company not
later than February 25, 2012.
Our By-laws establish an advance notice procedure for
stockholders to make nominations for the position of director
and to propose business to be transacted at an annual meeting.
Our By-laws provide that notice of nominations for director and
proposals for business must be given to the Secretary of the
Company not later than 150 days prior to the anniversary
date of the prior years annual meeting. For the annual
meeting expected to be held in August 2012, notice of
nominations and proposals under this provision must be received
by March 12, 2012.
44
Such notice must set forth in reasonable detail information
concerning the nominee (in the case of a nomination for election
to our Board) or the substance of the proposal (in the case of
any other stockholder proposal), and shall include: (i) the
name and residence address and business address of the
stockholder who intends to present the nomination or other
proposal or of any person who participates or is expected to
participate in making such nomination and of the person or
persons, if any, to be nominated and the principal occupation or
employment and the name, type of business and address of the
business and address of the corporation or other organization in
which such employment is carried on of each such stockholder,
participant and nominee; (ii) a representation that the
proponent of the proposal is a holder of record of our stock
entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to present the nomination or other
proposal specified in the notice, including the number of shares
of each class of our stock which are beneficially owned by the
proponent as of the date of the notice and the proponents
agreement to notify us in writing of the number of shares of
each class of our stock which are beneficially owned by the
proponent as of the record date promptly (but in no event later
than five (5) business days) after the later of the record
date or the date that the record date is first publicly
disclosed along with a description of any agreement, arrangement
or understanding (including any derivative securities or short
positions, profit interests, options, warrants, stock
appreciation or similar rights, hedging transactions, swaps or
borrowed or loaned shares, the effect or intent of which is to
mitigate loss to, manage risk or benefit of share price changes
for or increase or decrease the voting power of the proponent or
any of the proponents affiliates or associates with
respect to any shares of our stock) that has been entered into
as of the date of the proponents notice, by or on behalf
of such proponent or any affiliate or associate of such
proponent, with respect to any shares of our stock, and the
proponents agreement to notify us in writing of any such
agreement, arrangement or understanding in effect as of the
record date for the meeting promptly (but in no event later than
five (5) business days) after the later of the record date
or the date that the record date is first publicly disclosed;
(iii) a description of all agreements, arrangements or
understandings between the proponent and any other person or
persons (naming such person or persons) pursuant to which the
nomination or other proposal is to be made by the proponent;
(iv) such other information regarding each proposal and
each nominee as would have been required to be included in a
proxy statement filed pursuant to the proxy rules of the SEC had
the nomination or other proposal been made by our Board and
(v) the consent of each nominee, if any, to serve as a
director on our Board, if elected. Within fifteen (15) days
following the receipt by the Secretary of a notice of nomination
or proposal pursuant hereto, the Secretary will advise the
proponent in writing of any deficiencies in the notice and of
any additional information we require to determine the
eligibility of the proposed nominee or the substance of the
proposal. A proponent who has been notified of deficiencies in
the notice of nomination or proposal
and/or of
the need for additional information must cure such deficiencies
and/or
provide such additional information within fifteen
(15) days after receipt of the notice of such deficiencies
and/or the
need for additional information. The presiding officer of a
meeting of stockholders may, in his or her sole discretion,
refuse to acknowledge a nomination or other proposal presented
by any person that does not comply with the foregoing procedure
and, upon his or her instructions, all votes cast for such
nominee or with respect to such proposal may be disregarded.
Our By-laws do not limit or restrict the ability of a
stockholder to present any proposal made by such stockholder in
accordance with SEC requirements. A copy of our By-laws is
available upon request.
OTHER
MATTERS
Our management does not intend to present nor, in accordance
with our By-laws, has it received proper notice from any person
who intends to present, any matter for action by stockholders at
the Annual Meeting to be held on August 9, 2011, other than
as stated in the Notice of Annual Meeting of Stockholders
accompanying this proxy statement. The enclosed proxy, however,
confers discretionary authority with respect to the transaction
of any other business that properly may come before the meeting,
and it is the intention of the persons named in the enclosed
proxy to vote on any such matters in accordance with their best
judgment.
45
BLACK BOX CORPORATION P R 1000 Park Drive 0 Lawrence, Pennsylvania 15055 X This Proxy is
Solicited on Behalf of the Y Board of Directors of the Company The undersigned stockholder hereby
appoints R. Terry Blakemore and Thomas G. Greig, and each of them, as proxies for the undersigned,
each with full power of substitution for and in the name of the undersigned to act for the
undersigned and to consider and vote, as designated on the reverse, all of the shares of stock of
Black Box Corporation (the Company) that the undersigned is entitled to vote at the 2011 Annual
Meeting of Stockholders of the Company (the Annual Meeting) to be held on Tuesday, August 9, 2011
at 8:00 a.m. Eastern Daylight Time, at NASDAQ MarketSite, 4 Times Square (at the corner of 43rc
Street and Broadway, with the entrance on Broadway between 42nc and 43rc Streets), New York, New
York 10036, on the following matters: Unless otherwise specified in the squares provided, the
proxies shall vote in the election of directors FOR the nominees listed, FOR proposal number 2, FOR
proposal number 3 and for 1 Year on proposal number 4, and shall have discretionary power to vote
upon such other matters as may properly come before the meeting or any adjournment thereof.
(Continued and to be signed on the reverse side) |
ANNUAL MEETING OF STOCKHOLDERS OF BLACK BOX CORPORATION August 9, 2011 IMPORTANT NOTICE REGARDING
INTERNET AVAILABILITY OF PROXY MATERIALS: The proxy statement and Companys 2011 Annual Report to
stockholders are available at www.proxydocs.com/bbox Please sign, date and mail your proxy card in
the envelope provided as soon as possible. Should you require directions to the Annual Meeting,
please call Investor Relations at 724-873-6788. T Please detach along perforated line and mail in
the envelope provided, f ¦ ED73D3DMDDDDDDDDDDDD 1 DflDTll The Board of Directors recommends a vote
FOR each of the nominees listed, FOR proposal number 2, FOR proposal number 3 and for 1
Year on proposal number 4. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [x] FOR AGAINST ABSTAIN 1. Election of seven (7)
members of the Board of Directors: 2. Ratification of the appointment of BDO USA, LLP as the I II
II I independent registered public accounting firm of the Company NOMINEES: for (ne
fisca| year end|ng Marcn 31 2012. for all nominees O William F. Andrews ¦ O R. Terry
Blakemore ,, AJ . ,, ,_ . ,, for ag«st abstain ^withhold authority O Richard L
Crouch 3. Advisory Vote on Executive Compensation. ??? I I for all nominees o Thomas W.
Golonski O Thomas G. Greig I I FORALLEXCEPT O William H. Hernandez 1 Year 2Years 3Years ABSTAIN |
1( ee instructions eow) Q ^^vvardA. Nicholson, Ph.D. 4. Advisory Vote on Frequency of Advisory Vote
on Executive | | | | | | | | Compensation. The Board of Directors has established the close of
business on Monday, June 13, 2011 as the record date for the determination of the stockholders
entitled to notice of and to vote at the Annual Meeting. INSTRUCTIONS: To withhold authority to
vote for any individual nominee(s), mark FOR ALL EXCEPT and fill in the circle next to each
nominee you wish to withhold, as shown here: ^ To change the address on your account, please check
the box at right and indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via I 1 this method. Signature of
Stockholder Date: Signature of Stockholder Date: Note: Please sign exactly as your name or names
appear on this Proxy. When shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full ^H title as such. If the
signer is a corporation, please sign by duly authorized officer, giving full title as such. If
signer is a partnership, please sign in partnership name by authorized person. ^H |
ANNUAL MEETING OF STOCKHOLDERS OF BLACK BOX CORPORATION August 9, 2011 PROXY VOTING INSTRUCTIONS
INTERNET Access www.voteproxy.com and follow the on-screen instructions. Have your proxy card
available when you access the web page. TELEPHONE Call toll-free 1-800-PROXIES (1-800-776-9437)
in the United States or 1-718-921-8500 from foreign countries from any COMPANY NUMBER touch-tone
telephone and follow the instructions. Have your proxy card available when you call. Vote online/
by phone until 12:00 AM EDTthe day of the meeting. ACCOUNT NUMBER MAIL Sign, date and mail your
proxy card in the envelope provided as soon as possible. IN PERSON You may vote your shares in
person by attending the Annual Meeting. Should you require directions to the Annual Meeting, please
call Investor Relations at 724-873-6788. IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY
MATERIALS: The proxy statement and Companys 2011 Annual Report to stockholders are available at
www.proxydocs.com/bbox f Please detach along perforated line and mail in the envelope provided IF
you are not voting via telephone or the Internet. f ¦ 20730304000000000000 1 080911 The Board of
Directors recommends a vote FOR each of the nominees listed, FOR proposal number 2, FOR
proposal number 3 and for 1 Year on proposal number 4. PLEASE SIGN, DATE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x FOR AGAINST
ABSTAIN 1. Election of seven (7) members of the Board of Directors: 2. Ratification of the
appointment of BDO USA, LLP as the independent registered public accounting firm of the Company ?
NOMINEES: for the fiscal year ending March 31, 2012. for all nominees O William F. Andrews
O R. Terry Blakemore FORAGAINST ABSTAIN m withhold authority O Richard L. Crouch 3.
Advisory Vote on Executive Compensation. DDR for all nominees o Thomas W. Golonski O
Thomas G. Greig FOR ALLEXCEPT O William H. Hernandez 1 Year 2Years 3 Years ABSTAIN (See
instructions below) . V V <> Edward A. Nicholson, Ph.D. 4. Advisory ote on Frequency of
Advisory ote on Executive Compensation. The Board of Directors has established the close of
business on Monday, June 13, 2011 as the record date for the determination of the stockholders
entitled to notice of and to vote at the Annual Meeting. INSTRUCTIONS: To withhold authority to
vote for any individual nominee(s), mark FOR ALL EXCEPT and fill in the circle next to each
nominee you wish to withhold, as shown here: # To change the address on your account, please check
the box at right and indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via this method. Signature of
Stockholder Date: Signature of Stockholder Date: Note: Please sign exactly as your name or names
appear on this Proxy. When shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full H title as such. If the signer is a corporation,
please sign by duly authorized officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person. H |