def14a
International
Wire Group, Inc.
12 Masonic Avenue
Camden, New York 13316
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
To Be Held June 5,
2008
To the Stockholders of International Wire Group, Inc.:
An Annual Meeting of Stockholders of International Wire Group,
Inc. will be held on Thursday, June 5, 2008, at
8:30 a.m., Eastern Time, at the Doubletree Syracuse, 6301
State Route 298, East Syracuse, New York 13057, for the
following purposes (which are more fully described in the
accompanying Proxy Statement):
1. To elect the Board of Directors of International Wire
Group, Inc.;
2. To approve the Key Management Incentive Plan;
3. To ratify the Audit Committees selection of
Deloitte & Touche LLP as our independent registered
public accounting firm; and
4. To transact such other business as may properly come
before the Annual Meeting or any adjournment or postponement
thereof.
The affirmative vote of the holders of a plurality of the shares
of our outstanding common stock voting is required for the
election of each of the nominees for director (assuming a quorum
is present). The affirmative vote of the holders of a majority
of shares voted at the Annual Meeting, in person or by proxy, is
required for approval of the Key Management Incentive Plan, the
ratification of Audit Committees selection of
Deloitte & Touche LLP as our independent registered
public accounting firm or any other matters considered at the
Annual Meeting.
The Board of Directors unanimously recommends that you vote
to approve all the Proposals.
The Board of Directors has fixed the close of business on
April 16, 2008, as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual
Meeting (the Record Date) and any adjournment or
postponement thereof.
You are cordially invited to attend the Annual Meeting. However,
whether or not you expect to attend the Annual Meeting, to
assure your shares are represented at the Annual Meeting, please
date, execute and mail promptly the enclosed proxy in the
postage-paid enclosed envelope.
A copy of our Annual Report on
Form 10-K
for the year ended December 31, 2007 is enclosed for your
convenience.
By Order of the Board of Directors,
Glenn J. Holler
Senior Vice President, Chief Financial
Officer and Secretary
Camden, New York
April 29, 2008
Your vote is important.
Please execute and return promptly the enclosed proxy card in
the envelope provided.
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APPENDIX
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A-1
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INTERNATIONAL
WIRE GROUP, INC.
12 Masonic Avenue
Camden, New York 13316
PROXY
STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held On June 5, 2008
This Proxy Statement is provided to the stockholders of
International Wire Group, Inc. (International Wire,
we or our company) in connection with
the solicitation of proxies by the Board of Directors to be
voted at an annual meeting of stockholders (the Annual
Meeting) to be held at the Doubletree Syracuse, 6301 State
Route 298, East Syracuse, New York 13057, at 8:30 a.m.,
Eastern Time, on Thursday, June 5, 2008, and at any
adjournment or postponement thereof. This Proxy Statement and
the enclosed proxy is first being sent or given to stockholders
on or about May 6, 2008. This Proxy Statement provides
information that should be helpful to you in deciding how to
vote on the matters to be voted on at the Annual Meeting.
Your vote is important. Whether or not you
plan to attend the Annual Meeting, please take the time to vote
your shares of common stock as soon as possible. You can ensure
that your shares are voted at the Annual Meeting by completing,
signing, dating and returning the enclosed proxy card in the
postage-paid envelope provided. Submitting your proxy will not
affect your right to attend the meeting and vote. A stockholder
who gives a proxy may revoke it at any time before it is
exercised by notifying International Wires Secretary in
writing of such revocation, by voting in person at the Annual
Meeting or by delivering a later-dated proxy.
INFORMATION
ABOUT THE 2008 ANNUAL MEETING AND PROXY VOTING
What
matters are to be voted on at the 2008 Annual Meeting?
At the Annual Meeting, stockholders will be asked to:
(1) elect the Board of Directors of International Wire;
(2) approve the Key Management Incentive Plan;
(3) ratify the selection by the Audit Committee of our
Board of Directors of Deloitte & Touche LLP as the
independent registered public accounting firm for the year
ending December 31, 2008; and
(4) take action on any other business that may properly
come before the Annual Meeting or any adjournment or
postponement thereof.
What is
the Board of Directors recommendation?
The Board of Directors recommends votes FOR items 1, 2 and
3 on your proxy card.
Who is
entitled to vote?
All International Wire stockholders of record at the close of
business on the Record Date, April 16, 2008, are entitled
to vote at the Annual Meeting.
What
shares will be entitled to vote at the Annual Meeting?
As of April 16, 2008, 9,923,002 shares of our
companys common stock were outstanding. This is the only
class of capital stock issued by our company. Each holder of
common stock has one vote for each share held. As stated in the
notice of Annual Meeting, holders of record of the common stock
at the close of business April 16, 2008, may vote at the
Annual Meeting or any adjournment of the Annual Meeting.
Who can
attend the Annual Meeting?
All stockholders that were stockholders of International Wire as
of the record date April 16, 2008, or their authorized
representatives, may attend the Annual Meeting. Admission to the
Annual Meeting will be on a first-
come, first-served basis. If your shares are held in the name of
a bank, broker or other holder of record and you plan to attend
the Annual Meeting, you should bring proof of ownership to the
Annual Meeting, such as a bank or brokerage account statement,
to ensure your admission.
How do I
vote my shares?
Your shares may only be voted at the Annual Meeting if you are
present in person or are represented by proxy. Whether or not
you plan to attend the Annual Meeting, we encourage you to vote
by proxy to assure that your shares will be represented. To vote
by proxy, complete the enclosed proxy card and mail it in the
postage-paid envelope provided according to the instructions
provided on the enclosed proxy card.
You may revoke your proxy at any time before it is exercised by
timely submission of a written revocation to our Secretary,
submission of a properly executed later-dated proxy or by voting
at the Annual Meeting. Voting by proxy will in no way limit your
right to vote at the Annual Meeting if you later decide to
attend in person. Attendance at the Annual Meeting will not by
itself constitute a revocation of a proxy. If you vote by proxy
and also attend the Annual Meeting, there is no need to vote
again unless you wish to change your vote.
If your shares are held in the name of a bank, broker or other
holder of record (i.e., a street name), you will
receive instructions from the holder of record that you must
follow in order for your shares to be voted.
All shares entitled to vote that are represented by
properly-completed proxies received prior to the Annual Meeting
and not revoked will be voted at the Annual Meeting in
accordance with your instructions. If you sign and return your
proxy card but do not indicate how your shares should be voted,
the shares represented by your proxy will be voted FOR the
election of directors who have been nominated by our Board of
Directors, FOR the approval of the Key Management Incentive
Plan, FOR the ratification of the selection of
Deloitte & Touche LLP as the independent registered
public accounting firm for the year ending December 31,
2008 and in the discretion of the persons named in the proxy
(or, if none, the holder of the proxy) as to any other matter
that may properly come before the Annual Meeting.
What is a
quorum?
In order for business to be conducted at the Annual Meeting, a
quorum must be present. A quorum will be present if a majority
of the outstanding shares entitled to vote is represented in
person or by proxy at the Annual Meeting. Abstentions and broker
non-votes will be counted to determine whether a quorum is
present.
What vote
is necessary to pass the items of business at the Annual
Meeting?
The eight nominees for director receiving a plurality of the
votes cast by holders of common stock at the meeting, in person
or by proxy, shall be elected to our Board of Directors.
Currently there is one vacancy on the Board of Directors, which
is composed of nine directors.
Except with respect to the election of directors, holders of
common stock will vote as a single class and will be entitled to
one vote per share with respect to each matter to be presented
at the Annual Meeting. The favorable vote of the holders of a
majority of shares voted at the meeting, in person or by proxy,
is required for approval of the Key Management Incentive Plan,
the ratification of Deloitte & Touche LLP and all
other matters.
How are
abstentions and broker non-votes counted?
Abstentions and broker non-votes will be counted to determine
whether a quorum is present. Abstentions are treated as votes
against a proposal and broker non-votes will not be considered
present and entitled to vote. Thus, broker non-votes will not
affect the outcome of the voting on any of the proposals.
Who will
count the votes?
Our transfer agent, Computershare Trust Company, N.A., will
tally the vote, and will serve as inspector of the Annual
Meeting.
2
What are
the costs for soliciting proxies for the Annual
Meeting?
The solicitation is made on behalf of International Wires
Board of Directors. We will pay the cost of soliciting these
proxies. We will reimburse brokerage houses and other
custodians, nominees and fiduciaries for reasonable expenses
they incur in sending these proxy materials to you if you are a
beneficial holder of our shares.
Without receiving additional compensation, officers and regular
employees of our company may solicit proxies personally, by
telephone, fax or email from some stockholders if proxies are
not promptly received.
How can I
get a copy of International Wires annual report on
Form 10-K?
A copy of our Annual Report on
Form 10-K
for the year ended December 31, 2007 is enclosed. To obtain
another copy, without charge, of our Annual Report on
Form 10-K,
address your request to Glenn Holler, International Wire Group,
Inc., 12 Masonic Avenue, Camden, New York 13316. The annual
report on
Form 10-K
also may be accessed at
http://itwg.client.shareholder.com/index.cfm and at the website
of the Securities and Exchange Commission at www.sec.gov.
INFORMATION
ABOUT COMMUNICATIONS WITH INTERNATIONAL WIRE AND
OUR BOARD OF DIRECTORS
How may I
communicate directly with the Board of Directors?
The Board of Directors provides a process for stockholders to
send communications to the Board of Directors. You may
communicate with the Board of Directors, individually or as a
group, as follows:
By Mail
The Board of Directors
International Wire Group, Inc.
Attn: Glenn J. Holler, Secretary
12 Masonic Avenue
Camden, New York 13316
By Phone
314-416-8215
You should identify your communication as being from an
International Wire stockholder. The Secretary may require
reasonable evidence that your communication or other submission
is made by an International Wire stockholder before transmitting
your communication to the Board of Directors.
How may I
communicate directly with the Nonemployee Directors?
You may communicate with the Nonemployee Directors, individually
or as a group, by any of the means set forth above or by writing
to:
Nonemployee Directors of the Board of Directors
International Wire Group, Inc.
Attn: Glenn J. Holler, Secretary
12 Masonic Avenue
Camden, New York 13316
How do I
communicate directly with International Wire?
You may communicate with International Wire by writing to:
International Wire Group, Inc.
Attn: Glenn J. Holler, Secretary
12 Masonic Avenue
Camden, New York 13316
3
PROPOSAL 1:
ELECTION OF DIRECTORS
The Board of Directors has nominated eight people for election
as directors at the Annual Meeting. All nominees are currently
serving as directors of International Wire. If you elect these
nominees, they will hold office until the 2009 Annual Meeting
and until their successors have been duly elected and have
qualified. The eight nominees for election at the Annual Meeting
are listed on pages 8 to 10 with brief biographies.
The Board of Directors has determined that six of the eight
nominees are independent directors under NASDAQ listing
requirements. Those six independent directors are: Mark K.
Holdsworth, Peter Blum, David M. Gilchrist, Jr., David H.
Robbins, Lowell W. Robinson and John T. Walsh.
All of the nominees named on pages 8 to 10 have been nominated
by our Board of Directors to be elected by holders of our common
stock. We are not aware of any reason why any nominee would be
unable to serve as a director. If a nominee for election is
unable to serve, the shares represented by all valid proxies
will be voted for the election of any other person that our
Board of Directors may nominate.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE ELECTION OF THESE DIRECTORS.
4
PROPOSAL 2:
APPROVAL OF THE KEY MANAGEMENT INCENTIVE PLAN
On April 25, 2008, the Board of Directors adopted subject
to approval by our stockholders, the International Wire Group
Key Management Incentive Plan (the KMIP), a cash
bonus plan, that provides for payments to persons who may be
subject to Section 162(m) of the Internal Revenue Code of
1986, as amended (the Code), We are asking our
stockholders to approve the KMIP.
The persons eligible to participate in the KMIP are key members
of management of International Wire and its subsidiaries that
the Compensation Committee of the Board of Directors
and/or Board
of Directors in its discretion selects to participate.
We have traditionally offered management employees one or more
cash bonus plans. The purpose of adopting and seeking
stockholder approval of the KMIP is to permit us to grant cash
bonuses that satisfy the requirements of Section 162(m) of
the Code.
Section 162(m) of the Code generally provides that we may
not take a federal income tax deduction for compensation in
excess of $1 million paid to certain executive officers in
any one year. However, Section 162(m) does not preclude us
from taking a federal income tax deduction for qualifying
performance-based compensation paid to an executive
officer in a year even if that compensation (when combined with
other non-qualifying compensation paid) exceeds $1 million.
The KMIP is designed to pay cash bonuses that are
qualified performance-based compensation within the
meaning of Section 162(m) and related IRS regulations.
Section 162(m) of the Code requires that certain material
terms of the KMIP, including the business criterion and maximum
amounts payable, are approved by our stockholders.
The principal terms of the KMIP are summarized below. The
summary is qualified in its entirety by the full text of the
KMIP, which is attached to this Proxy Statement as Annex A.
Purpose. The purpose of the KMIP is to provide
our key senior executives with incentive based compensation upon
the achievement of established performance goals. There are
three types of bonuses that may be payable under the KMIP:
(i) an annual bonus (with a January 1 December
31 performance period), (ii) a performance bonus (with a
performance period designated by the Compensation Committee or
Board of Directors) and (iii) other bonuses (a
bonus with terms designated by the Compensation Committee or
Board of Directors). Only the annual and performance bonuses are
intended to comply with Section 162(m).
Administration. The Compensation Committee has
the full authority to interpret the Plan and to establish rules
for its administration, including, without limitation, rules
regarding the impact of employment termination during a
performance period and prior to the date a bonus under the plan
is otherwise paid.
Establishment of Performance Goals for Annual Bonuses and
Performance Bonuses. As required by
Section 162(m), no later than ninety (90) days after a
commencement of the performance period (but in no event after
twenty-five percent (25%) of the performance period has
elapsed), the Compensation Committee
and/or Board
of Directors shall establish (i) the performance goals
applicable to the performance period; (ii) the performance
measures to be used to measure the performance goals in terms of
an objective formula or standard; (iii) the method for
computing the amount of compensation payable to each participant
if such performance goals are obtained; and (iv) the
participants or class of participants to which such performance
goals apply. The Compensation Committee
and/or Board
of Directors has reserved the right to reduce or eliminate
bonuses even if performance goals are attained. Any such
reduction or elimination shall not increase annual bonuses or
performance bonuses payable to other KMIP participants.
Maximum Bonus. Under the KMIP, the maximum
bonus payable as an annual bonus for each calendar year is
$2 million per individual, and the maximum performance
bonus payable is $2 million multiplied by the number of
full and partial years in the performance period.
Performance Measures. Performance goals for
annual bonuses and performance bonuses under the KMIP will
primarily be based on earnings before interest, taxes,
depreciation, amortization and non-cash items based on the
performance of our company, or any business or division thereof
(EBITDA), but may also be based on one or
5
more of following performance measures, individually or in
combination, based on the performance of our company, or any
business or division thereof: (i) revenue growth;
(ii) earnings; (iii) operating income; (iv) pre-
or after-tax income; (v) cash flow (before or after
dividends); (vi) cash flow per share (before or after
dividends); (vii) earnings per share; (viii) return on
equity; (ix) return on capital (including return on total
capital or return on invested capital); (x) cash flow
return on investment; (xi) return on assets;
(xii) economic value added (or an equivalent metric);
(xiii) market share or penetration; (xiv) share price
performance; (xv) total shareholder return;
(xvi) improvement in or attainment of expense levels or
expenses ratios; (xvii) employee satisfaction;
(xviii) customer satisfaction; (xix) customer
retention; (xx) rating agency ratings and (xxi) attainment
of strategic
and/or
organizational development goals.
Performance goals may also be based on comparisons to the
performance of other companies or an index covering multiple
companies, measured by one or more of the foregoing performance
measures.
The evaluation of performance measures against the performance
goals may (A) be adjusted consistent with exclusions or
adjustments provided for in our financing agreements, including
without limitation, the Loan and Security Agreement, dated as of
October 20, 2004, among International Wire, its domestic
subsidiaries, the lenders thereunder and Wachovia Capital
Finance Corporation (Central), formerly known as Congress
Financial Corporation (Central), as agent, or (B) exclude
or adjust for the impact of certain events or occurrences that
were not budgeted or planned for in setting the goals,
including, among other things, (i) asset write-downs;
(ii) litigation or claim judgments or settlements;
(iii) the effect of changes in tax laws, accounting
principles, or other laws or provisions affecting reported
results; (iv) any reorganization and restructuring
programs; (v) extraordinary nonrecurring items as described
in Accounting Principles Board Opinion No. 30 or in
managements discussion and analysis of financial condition
and results of operations appearing in our annual report to
stockholders for the applicable year; (vi) acquisitions or
divestitures; (vii) foreign exchange gains and losses;
(viii) discontinued operations; and (ix) changes in
metal prices.
We shall seek re-approval of the KMIP
and/or the
performance measures described every five years. If such
re-approval is not obtained, the only performance measurement
that may be used to establish a performance goal for those
participants who our company determines could become subject to
Section 162(m) shall be EBITDA. We do not anticipate using
the KMIP as our management incentive plan until 2009.
Payment of Bonuses. As soon as reasonably
practical following the completion of each performance period,
the Compensation Committee shall confirm which of the applicable
performance goals, if any, have been achieved and the amount of
bonuses payable as a result thereof.
Amendment or Termination. The KMIP may from
time to time be amended, suspended or terminated, in whole or in
part, by the Board of Directors, but no such action will be
effective without stockholder approval if such approval is
required to satisfy the requirements of Section 162(m) of
the Code or any other applicable laws, regulations or rules.
New Plan Benefits. Future grants of awards
that will be made to our key members of management are subject
to the discretion of the Chief Executive Officer, Board of
Directors and Compensation Committee and, therefore, are not
determinable at this time.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE
APPROVAL OF THE KEY MANAGEMENT INCENTIVE PLAN.
6
PROPOSAL 3:
RATIFICATION
OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Audit Committee of the Board of Directors has selected
Deloitte & Touche LLP (Deloitte) as our
independent registered public accounting firm for 2008. Deloitte
is a registered public accounting firm with the Public Company
Accounting Oversight Board (the PCAOB), as required
by the Sarbanes-Oxley Act of 2002 and the Rules of the PCAOB.
Deloitte representatives are expected to attend the 2008 Annual
Meeting. They will have an opportunity to make a statement if
they desire to do so and will be available to respond to
appropriate stockholder questions.
We are asking our stockholders to ratify the selection of
Deloitte as our independent registered public accounting firm.
Although ratification is not required by our Bylaws or
otherwise, the Board of Directors is submitting the selection of
Deloitte to our stockholders for ratification as a matter of
good corporate practice. Even if the selection is ratified, the
Audit Committee in its discretion may select a different
registered public accounting firm at any time during the year if
it determines that such a change would be in the best interests
of our company and our stockholders. If the stockholders do not
ratify the appointment, the Audit Committee will consider
whether it should appoint another registered public accounting
firm.
Deloitte was engaged as our independent registered public
accounting firm on July 14, 2006, and
PricewaterhouseCoopers LLP (PwC) was dismissed. The
decision to change independent accountants was approved by the
Audit Committee of the Board of Directors on July 14, 2006.
For the period from January 1, 2006 through July 14,
2006, there were no disagreements with PwC on any matter of
accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreements,
if not resolved to the satisfaction of PwC, would have caused
PwC to make reference thereto in its report on our financial
statements for such years.
For the period from January 1, 2006 through July 14,
2006, there were no reportable events with respect
to International Wire as that term is defined in
Item 304(a)(1)(v) of
Regulation S-K,
except that, as previously disclosed in Item 4 of our
Form 10-Q
for the quarter ended March 31, 2006, we concluded that a
material weakness in internal controls over financial reporting
related to our deferred income tax accounting existed as of
March 31, 2006 due to the absence of effective controls to
identify the differences between book and tax accounting for
fixed assets and certain inventory reserves and LIFO
inventories. We have authorized PwC to respond fully to the
inquiries of Deloitte concerning the subject matter of such
material weakness.
For the period from January 1, 2006 through July 14,
2006, we did not consult with Deloitte regarding (1) the
application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that
might be rendered on our financial statements or (2) any
matter that was either the subject of a disagreement as defined
in Item 304(a)(1)(iv) of
Regulation S-K
or a reportable event as defined in
Item 304(a)(1)(v) of
Regulation S-K.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE RATIFICATION OF
DELOITTE & TOUCHE LLP.
7
OUR
MANAGEMENT
Executive
Officers and Directors
Set forth below are the names and positions of the directors and
executive officers of our company as of December 31, 2007.
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Name
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Age
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Position(s)
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Rodney D. Kent
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60
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Director; Chief Executive Officer
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Glenn J. Holler
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60
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Senior Vice President, Chief Financial Officer and Secretary
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Donald F. DeKay
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53
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Vice President Finance
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Martin G. Dew
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45
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President of IWG High Performance Conductors, Inc.
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Chrysant E. Makarushka
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67
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Vice President Purchasing and Logistics
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Mark K. Holdsworth
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42
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Director; Chairman of the Board of Directors
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William Lane Pennington
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52
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Director; Vice-Chairman of the Board of Directors
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Peter Blum
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57
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Director
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David M. Gilchrist, Jr.
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59
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Director
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David H. Robbins
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32
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Director
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Lowell W. Robinson
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59
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Director
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John T. Walsh
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68
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Director
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Rodney D. Kent is Chief Executive Officer of our company
and has held such positions since June 1, 2005. Previously,
Mr. Kent served as our President and Chief Operating
Officer and he held that position from May 2000 to June 2005.
Mr. Kent has served as a director since June 1995. He
served as a director when we filed for bankruptcy under
Chapter 11 of the United States Bankruptcy Code and
throughout the bankruptcy proceedings. Prior to being named as
President and Chief Operating Officer, Mr. Kent served as
President of our Bare Wire segment from April 1995.
Mr. Kent also serves as director of Oneida Financial Corp.
and Chairman of the Board and director of Prime Materials
Recovery, Inc. (Prime).
Glenn J. Holler was named Senior Vice
President & Chief Financial Officer of our company in
July 2001, and Secretary of our company in October 2004. He also
served as Vice President Finance from August 1996
through July 2001. Prior to joining our company, Mr. Holler
was employed by Vigoro Industries, Inc. as Vice President,
Finance from 1994 to 1996. From 1983 to 1994, Mr. Holler
held several positions at Moog Automotive, Inc., including Vice
President Finance and Senior Vice
President Finance.
Donald F. DeKay is Vice President Finance of
our company and has held such position since July 2001. Prior to
being named Vice President Finance of our company,
Mr. DeKay served as Vice President Finance of
our Bare Wire segment since April 1995. Mr. DeKay served as
Vice President Finance of Omega Wire, Inc. (one of
our subsidiaries) from 1988 to 1995 and Controller of Omega
Wire, Inc. from 1983 to 1988. Prior to joining our company,
Mr. DeKay was employed by Price Waterhouse from 1978 to
1983. Mr. DeKay also serves as director of Prime.
Martin G. Dew is President of our subsidiary IWG High
Performance Conductors, Inc. (HPC) and has held this
position since we acquired HPC in March 2006 and under its
previous owner, Phelps Dodge Corporation, since 1999.
Mr. Dew joined HPC in 1986 as an Inside Sales
Representative and continued his career development serving as
Sales Supervisor, Regional Sales Representative, Product Manager
and Vice President of Sales.
Chrysant E. Makarushka is Vice President
Purchasing and Logistics of our company and has held such
position since July 2000. Prior to being named Vice
President Purchasing and Logistics,
Mr. Makarushka served as Director of Metals Management for
our company from 1995 to 2000. Mr. Makarushka served as
Director of Procurement and Human Resources for Omega Wire, Inc.
from 1989 to 1995. Prior to joining our company,
Mr. Makarushka was employed by Rome Cable from 1981 to 1989.
8
Mark K. Holdsworth has been Chairman of the Board of
Directors of our company since March 24, 2005 and has been
a director of our company since October 20, 2004.
Mr. Holdsworth is a Managing Partner of Tennenbaum Capital
Partners, LLC and is one of the firms founding members.
Prior to joining that firm in 1996, Mr. Holdsworth was a
Vice President, Corporate Finance, of US Bancorp Libra, a
high-yield debt securities investment banking firm. He also has
served as a generalist in Corporate Finance at Salomon Brothers
Inc. Mr. Holdsworth is currently Vice Chairman of
EaglePicher Corporation and a director of Parsons Corporation.
He is also a National Trustee of Boys & Girls Club of
America. He received a B.A. in Physics from Pomona College, a
B.S. with honors in Engineering and Applied Science
(concentration in Mechanical Engineering) from the California
Institute of Technology, and an MBA from Harvard Business School.
William Lane Pennington has been the Vice-Chairman of the
Board of Directors of our company since March 28, 2005, and
has been a director of our company since February 2003. He
served as a director when we filed for bankruptcy under
Chapter 11 of the United States Bankruptcy Code in 2004 and
throughout the bankruptcy proceedings. Mr. Pennington
founded Whiterock Affiliates LLC (now Pennington Allen Capital
Partners LLC), a private investment and advisory firm, in 2003
and serves as its Chief Executive Officer. From 2001 to 2003,
Mr. Pennington was the President of IMCO International,
Inc. and the Executive Vice President of IMCO Recycling, Inc.
From 1997 to 2001, Mr. Pennington served as the President
of Lennox Worldwide Heat Transfer and Lennox Asia Pacific Ltd.
and Executive Vice President of Lennox International Inc.
Mr. Pennington also held several senior executive positions
from 1988 to 1997 with Hilti International Corporation, a global
manufacturer and direct sales company, including President of
Hilti Asia Pacific Ltd. based in Hong Kong and as President of
Hilti Ltd. in Toronto, Ontario. He previously served as a
partner, a shareholder, and member of the Board of Directors of
Holliman, Langholz, Runnels & Dorwart, a private law
practice.
Peter Blum has been a director of our company since
October 20, 2004. Mr. Blum has served as the President
of Blum Consulting, LLC, a consulting firm, since 2002. Prior to
2002, Mr. Blum was a Managing Principal of Towers Perrin.
He was a consultant for the Wharton Center for Applied Research.
In addition, he served as the Business Development Manager and
Research and Development Manager for British Oxygen Company.
Mr. Blum received B.S. and M.S. degrees in Metallurgy and
Materials Science from Lehigh University, and an MBA from The
Wharton School of the University of Pennsylvania.
David M. Gilchrist, Jr. has been a director of our
company since October 20, 2004. Mr. Gilchrist
currently serves as the Chief Executive Officer of
Siegel-Robert, Inc, a manufacturing company. Prior to joining
Siegel-Robert, Inc. in 2007, Mr. Gilchrist was previously
the Chief Executive Officer of Jackson Products, Inc. from
2003-2007
and the President of VP Buildings from 1995 through 2003. Prior
to joining VP Buildings, he also served as the President of
Mid-South Industries and the Fusite Division of Emerson
Electric. He also serves as a director of Wolverine Tube.
Mr. Gilchrist received a B.S. in Mechanical Engineering
from the U.S. Naval Academy and an MBA from St. Francis
College.
David H. Robbins has been a director of our company since
November 9, 2006. Mr. Robbins joined GSC Group, an
investment advisor, at its inception in 1999 and is a Managing
Director responsible for sourcing, evaluating and executing
control distressed debt investments. He was previously with The
Blackstone Group, in the Principal Investment and Mergers and
Acquisitions Groups, where he worked on a variety of private
equity and advisory transactions. Mr. Robbins is on the
board of ATSI Holdings, Inc., Neucel Specialty Cellulose Ltd.
and Outsourcing Services Group, Inc. Mr. Robbins graduated
from the University of Pennsylvania with a B.S. degree in
Economics.
Lowell W. Robinson has been a director of our company
since October 20, 2004. Mr. Robinson has served as the
Chief Financial Officer and Chief Operating Officer of MIVA,
Inc., an online advertising network, since August 2007. He
joined MIVA in December 2006 as Chief Financial Officer and
Chief Administrative Officer. He previously served as the
President of LWR Advisors from 2004 to 2006, as Special Counsel
(and Interim Chief Financial Officer) to the President of
Polytechnic University from 2002 to 2004 and as Chairman of the
Audit Committee and Special Independent Committee of the Board
of Edison Schools from 2002 to 2003. From 2000 to 2002, he
served as the Senior Executive Vice President and Chief
Financial Officer of HotJobs.com. Previously, he held senior
financial positions at ADVO Inc., Kraft Foods, Inc. and
Citigroup Inc. Mr. Robinson also serves on the Board of
Directors of Jones Apparel Group and on the Board of Directors
of the University of Wisconsin School of Business.
Mr. Robinson has a B.A. in economics from the University of
Wisconsin and a MBA from Harvard Business School.
9
John T. Walsh has been a director of our company since
October 20, 2004. Mr. Walsh served as the President
and Chief Operating Officer of Columbian Chemicals Company, a
wholly-owned subsidiary of Phelps Dodge Corporation, from 1996
through 2001, and he retired in 2001. Mr. Walsh also held
several senior executive positions with Columbian Chemicals
Company prior to 1996. He received a B.S. in Chemistry from St.
Bonaventure University, an M.S. in Organic Chemistry from Xavier
University and an MBA (concentration in Marketing) from
Fairleigh Dickinson University.
INFORMATION
ABOUT THE BOARD AND ITS COMMITTEES
Generally
Our Board of Directors currently consists of nine directors,
with one vacancy. All directors will be elected by the holders
of our common stock at each Annual Meeting and are elected to
serve until their successors have been duly elected and have
qualified. Our Board of Directors met nine times in 2007. Each
of the directors attended at least 75% of all meetings held by
the Board of Directors and all meetings of each committee of the
Board of Directors on which such director served during the
fiscal year ended December 31, 2007.
We do not have a policy regarding Board of Director attendance
at our Annual Meeting. However, we expect that all directors
will attend the 2008 Annual Meeting unless extraordinary
circumstances prevent a directors attendance. All of our
directors attended the 2007 Annual Meeting.
Committees
of the Board of Directors
Our Board of Directors has established two standing committees:
the Audit Committee and the Compensation Committee. The charters
for each of our standing committees can be found on our website
at
http://itwg.client.shareholder.com/index.cfm.
Director Nominations. The Board of Directors
does not have a separate nominating committee or a nominating
committee charter. Rather, the entire Board of Directors acts as
nominating committee, and a majority of the directors, but not
all of the directors, are independent directors, as such term is
defined in the NASDAQ listing standards. As such, the director
nominees to be voted on at the 2008 Annual Meeting were selected
by the entire Board of Directors. The Board of Directors does
not believe we would derive any significant benefit from a
separate nominating committee, although the Board of Directors
may contemplate forming a Nominating Committee in the future.
Nominating Process. In recommending director
candidates in the future, the Board of Directors intends to take
into consideration such factors as it deems appropriate based on
our companys current needs. These factors may include
diversity, age, skills, decision-making ability, inter-personal
skills, experience with businesses and other organizations of
comparable size, community activities and relationships, the
interrelationship between the candidates experience and
business background and other directors experience and
business background, whether such candidate would be considered
independent, as such term is defined in the NASDAQ
listing standards, as well as the candidates ability to
devote the required time and effort to serve on the Board of
Directors.
The Board of Directors has never received a recommendation from
a stockholder as to a candidate for nomination to the Board of
Directors and therefore has not previously formed a policy with
respect to consideration of such a candidate. However, it is the
Board of Directors intent to consider any stockholder
nominees that may be put forth in the future.
Stockholders wishing to nominate a candidate for consideration
at the 2009 Annual Meeting should submit the nominees
name, affiliation and other pertinent information along with a
statement as to why such person should be considered for
nomination. Such nominations should be delivered to our
Secretary at our principal executive offices not less than 120
or more than 180 days prior to the first anniversary of the
date of the preceding years annual meeting. The Board of
Directors will evaluate any such nominees in a manner similar to
that for all director nominees.
10
Audit Committee. Our Audit Committee consists
of Mr. Robinson, Mr. Gilchrist and Mr. Walsh.
Mr. Robinson is the Chairman of the Audit Committee. Each
member of our Audit Committee is independent, as such term is
defined in the NASDAQ listing standards and
Section 10A-3(b)(1)(ii)
of the Securities Exchange Act of 1934. Further, the Board of
Directors has determined that all members of the Audit Committee
are financially literate and have financial management
expertise, as the Board of Directors has interpreted such
qualifications in its business judgment. In addition, the Board
of Directors has designated Mr. Robinson as the audit
committee financial expert as defined in the Securities Exchange
Act of 1934.
Our companys Audit Committee is generally responsible for,
among other things:
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overseeing the accounting and financial reporting processes of
our company and audits of the financial statements of our
company;
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assisting the Board of Directors in oversight and monitoring of
(i) the integrity of our companys financial
statements, (ii) our companys maintenance of
effective internal accounting, financial and disclosure controls
and procedures, including compliance with Section 404 of
the Sarbanes-Oxley Act of 2002, (iii) our companys
compliance with legal and regulatory requirements, and
(iv) the independent auditors qualifications,
compensation, independence, performance and engagement for other
services;
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preparing the report that the rules of the Securities and
Exchange Commission (the SEC) require be included in
our companys annual proxy statement;
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providing our companys Board of Directors with the results
of its monitoring and recommendations derived therefrom; and
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providing to the Board of Directors such additional information
and materials as it may deem necessary to make the Board of
Directors aware of significant financial matters that require
the attention of the Board of Directors.
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Our Audit Committee met thirteen times in 2007. A copy of our
Audit Committee Charter can be found on our website at
http://itwg.client.shareholder.com/index.cfm.
Compensation Committee. Our Compensation
Committee consists of Mr. Blum, Mr. Gilchrist and
Mr. Robbins, each of whom is a nonemployee member of the
Board of Directors. Mr. Blum is the Chairman of the
Compensation Committee. Each member of our Compensation
Committee is an independent director, as such term is defined in
the NASDAQ listing standards.
The Compensation Committee is generally responsible for, among
other things:
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reviewing and recommending to the full Board of Directors
compensation for the Chief Executive Officer and the four most
highly compensated executive officers of our company other than
the Chief Executive Officer and reviewing and approving
compensation for any of the other executive officers of our
company, including, without limitation, (a) the annual base
salary, (b) the annual incentive bonus, including the
specific goals and amount, (c) equity compensation,
(d) employment agreements, severance arrangements and
change in control agreements/provisions and (e) any other
benefits, compensation or arrangements;
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setting annual performance related goals for the Chief Executive
Officer and the four most highly compensated executive officers
of our company other than the Chief Executive Officer; and
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making recommendations to the Board of Directors with respect to
incentive compensation plans.
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Our Compensation Committee met two times in 2007. A copy of our
Compensation Committee Charter can be found on our website at
http://itwg.client.shareholder.com/index.cfm.
Code of
Ethics
We have adopted the Code of Business Conduct, a code of ethics
that applies to our Chief Executive Officer, Chief Financial
Officer and other salaried employees. The Code of Business
Conduct is publicly available on our website at
http://itwg.client.shareholder.com/index.cfm. If we make any
substantive amendments to the Code of Business Conduct or grant
any waiver from a provision of the code to our Chief Executive
Officer and Chief
11
Financial Officer, we will disclose the nature of such amendment
or waiver on that website or in a report on
Form 8-K.
In addition, we will make available, free of charge upon
request, a copy of the Code of Business Conduct. For a copy of
this code, please contact Glenn Holler, International Wire
Group, Inc., 12 Masonic Avenue, Camden, New York 13316.
Compensation
Committee Interlocks and Insider Participation in Compensation
Decisions
The Compensation Committee currently consists of Mr. Blum,
Mr. Gilchrist and Mr. Robbins. No member of the
Compensation Committee during the fiscal year ended
December 31, 2007 (i) was an officer or employee of
International Wire, (ii) was formerly an officer of
International Wire, or (iii) had any relationship requiring
disclosure under the SECs governing disclosure of related
person transactions (Item 404 of
Regulation S-K).
No executive officer of International Wire served as a director
or member of the compensation committee of another entity of
whose directors or executive officers served as a member of our
Board of Directors or a member of the Compensation Committee.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERSHIP
Security
Ownership of 5% Beneficial Owners
The following table sets forth information with respect to
beneficial ownership of our common stock by persons known by us
to beneficially own 5% or more of our common stock.
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Shares Beneficially Owned
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Number of
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Percent of
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Shares of
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Common
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Name
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Common Stock
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Stock(1)
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Tennenbaum Capital Partners, LLC; SVAR/ MM, LLC;
Tennenbaum & Co., LLC; and Michael E. Tennenbaum(2)
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2,772,490
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27.9
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%
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2951 28th Street
Suite 1000
Santa Monica, CA 90404
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James D. Bennett; Bennett Restructuring Fund, L.P.;
Bennett Offshore Restructuring Fund, Inc.;
and Restructuring Capital Associates(3)
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1,916,309
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19.3
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%
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c/o Bennett
Management Corporation
2 Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901
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GSC Recovery II, L.P. and GSC Recovery IIA, L.P., et al.(4)
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1,698,851
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17.1
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%
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500 Campus Drive, Suite 220
Florham Park, New Jersey 07932
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Mast Credit Opportunities I Master Fund, Ltd.(5)
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791,652
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8.0
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%
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c/o Goldman
Sachs (Cayman) Trust, Limited,
P.O. Box 896 GT
Harbour Centre, 2nd Floor, North Church, Street
George Town, Cayman Islands
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LC Capital Master Fund, Ltd.; Lampe, Conway & Co.,
LLC;
Steven G. Lampe; Richard F. Conway(6)
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536,523
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5.4
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%
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680 Fifth Avenue Suite 1202
New York, New York 10019
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Blackport Capital Fund Ltd.(7)
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498,999
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5.0
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%
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345 Park Avenue
New York, New York 10154
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12
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(1) |
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The percentages shown are calculated based upon
9,923,002 shares of common stock, the number of shares
outstanding as of February 29, 2008, plus the number of
shares that may be acquired pursuant to stock options that are
or will become exercisable within 60 days for that
particular person or group. |
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(2) |
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As reported on Schedule 13G filed by Tennenbaum Capital
Partners, LLC (TCP), SVAR/ MM, LLC (SVAR/
MM), Tennenbaum & Co., LLC (TCO) and
Michael E. Tennenbaum on February 7, 2006. TCP has a
beneficial interest in 2,772,490 shares. Special Value
Absolute Return Fund, LLC (SVAR) has the right to
receive and the power to direct the receipt of dividends from,
or the proceeds from the sale of, 2,135,319 shares of
common stock, and Special Value Opportunities Fund, LLC
(SVOF) has the right to receive and the power to
direct the receipt of dividends from, or the proceeds from the
sale of, 637,171 shares of common stock. |
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The managing member of SVAR is SVAR/ MM. The managing member of
SVAR/ MM is Tennenbaum & Co., LLC (TCO).
The managing member of TCP is TCO. The managing member of TCO is
Michael E. Tennenbaum. TCP is the investment advisor to SVAR.
TCP, SVAR/ MM, TCO and Mr. Tennenbaum share voting and
dispositive power for the shares owned of record by SVAR. TCP is
the investment advisor to SVOF. TCP, TCO and Mr. Tennenbaum
share voting and dispositive power for the shares owned of
record by SVOF. |
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(3) |
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As reported in the Form 13D filed by James D. Bennett,
Bennett Restructuring Fund, L.P. (BRF), Bennett
Offshore Restructuring Fund, Inc. (BORF) and
Restructuring Capital Associates, L.P. (RCA and
collectively with James D. Bennett, BRF and BORF, the
Bennett Persons) on October 26, 2006. As
reported in the Form 13D, each of the Bennett Persons
beneficially owns the following: (i) James D. Bennett
beneficially owns 1,916,309 shares of our common stock and
has shared voting and investment power with respect to such
shares, (ii) BRF beneficially owns 1,227,459 shares of
our common stock and has shared voting and investment power with
respect to such shares, (iii) BORF beneficially owns
688,850 shares of our common stock and has shared voting
and investment power with respect to such shares and
(iv) RCA beneficially owns 1,916,309 shares of our
common stock and has shared voting and investment power with
respect to such shares. |
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(4) |
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As reported in the Form 13G filed by GSC Recovery II, L.P.
and certain affiliated reporting persons on February 14,
2007, the Form 4 filed by GSC Recovery IIA, L.P. and
certain affiliated reporting persons on October 30, 2007,
the Form 4 filed by Robert A. Hamwee and certain affiliated
reporting personson October 30, 2007 and the Form 3
filed by GSC Group Inc. on October 30, 2007. As reported in
the Form 13G, the Form 4s and the Form 3, GSC
Recovery II, L.P. directly owns 685,733 shares of our
common stock and has shared voting and investment power with
respect to such shares, GSC Recovery IIA, L.P. directly owns
999,918 shares of our common stock and has shared voting
and investment power with respect to such shares and GSCP (NJ),
L.P. directly owns options to purchase 13,200 shares of our
common stock. |
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The Form 4s filed on October 30, 2007 provided that
GSC Recovery II GP, L.P. is the general partner of GSC
Recovery II, L.P., GSC RII, LLC is the general partner of GSC
Recovery II GP, L.P. and GSCP (NJ) Holdings, L.P. is the
managing member of GSC RII, LLC. GSC Recovery IIA GP, L.P. is
the general partner of GSC Recovery IIA, L.P.; GSC RIIA, LLC is
the general partner of GSC Recovery IIA GP, L.P.; and GSCP (NJ)
Holdings, L.P. is the sole member of GSC RIIA, LLC. GSCP (NJ),
L.P. is the manager of GSCP Recovery II, L.P. and GSCP Recovery
IIA, L.P. and GSCP (NJ), Inc. is the general partner of GSCP
(NJ), L.P. and GSCP (NJ) Holdings, L.P. GSC Group, Inc. owns all
of the outstanding capital stock of GSCP (NJ), Inc. GSCP Active
Partners Holdings, L.P. owns all of the Class A Common
Stock of GSC Group, Inc. GSC Active Partners, Inc. is the
general partner of GSC Active Partners Holdings, L.P. Each of
Robert F. Cummings, Jr., Alfred C. Eckert III, Robert A. Hamwee,
Richard M. Hayden, Andrew J. Wagner and Joseph H. Wender is an
executive officer and stockholder of GSC Active Partners, Inc. |
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GSCP (NJ) Holdings, L.P., GSCP (NJ), L.P., GSCP (NJ), Inc., GSC
Group, Inc., GSC Active Partners Holdings, L.P., GSC Active
Partners, Inc., , Alfred C. Eckert III, Robert A. Hamwee,
Richard M. Hayden and Andrew J. Wagner (collectively, the
Recovery Affiliates) by virtue of such persons
relationship with GSC Recovery II, L.P.,GSC Recovery IIA, L.P.
and GSCP (NJ), L.P. may be deemed to have shared voting and
investment power over, and be the indirect beneficial owner of
the 1,685,651 shares of our common stock owned in the
aggregate by GSC Recovery II, L.P. and GSC Recovery IIA, L.P.
and the options to purchase 13,200 shares of our common
stock owned by GSCP (NJ), L.P.. Each of the Recovery Affiliates
disclaims beneficial ownership of the common stock and options
except to the extent of each entitys and individuals
pecuniary interest in the securities. |
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GSC Recovery II GP, L.P. and GSC RII, LLC, by virtue of
such persons relationship with GSC Recovery II, L.P., may
be deemed to have shared voting and investment power over, and
be the indirect beneficial owner of the 685,733 shares of
Common Stock directly owned by GSC Recovery II, L.P.. Each of
the GSC Recovery II GP, L.P. and GSC RII, LLC disclaims
beneficial ownership of the common stock except to the extent of
such reporting persons pecuniary interest in the common
stock. |
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GSC Recovery IIA GP, L.P. and GSC RIIA, LLC, by virtue of such
persons relationship with GSC Recovery IIA, L.P, may be
deemed to have shared voting and investment power over, and be
the indirect beneficial owner of the 999,918 shares of
Common Stock directly owned by GSC Recovery IIA, L.P. Each of
GSC Recovery IIA GP, L.P. and GSC RIIA, LLC disclaims beneficial
ownership of the common stock except to the extent of such
reporting persons pecuniary interest in the common stock. |
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(5) |
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As reported in the Form 13G filed by Mast Credit
Opportunities I Master Fund, Ltd. (Mast Fund), Mast
Capital Management, LLC (Mast Capital), David J.
Steinberg and Christopher B. Madison (together with Mast Fund ,
Mast Capital and David J. Steinberg, the Mast
Persons) on February 14, 2008. As reported in the
Form 13G, each of the Mast Persons beneficially owns the
following: (i) Mast Fund beneficially owns
791,652 shares of our common stock and has sole voting and
investment power with respect to such shares, (ii) Mast
Capital beneficially owns 791,652 shares of our common
stock and has sole voting and investment power with respect to
such shares by virtue of its position as investment advisor to
Mast Fund, (iii) Christopher B. Madison beneficially owns
791,652 shares of our common stock and has shared voting
and investment power with respect to such shares by virtue of
his position as manager of Mast Capital and (iv) David J.
Steinberg beneficially owns 791,652 shares of our common
stock and has shared voting and investment power with respect to
such shares by virtue of his position as manager of Mast Capital. |
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(6) |
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As reported in the Form 13G filed by LC Capital Master
Fund, Ltd. (LC Capital), Lampe, Conway &
Co., LLC (Lampe Conway), Steven G. Lampe and Richard
F. Conway (together with LC Capital, Lampe Conway and Steven G.
Lampe, the Lampe Conway Persons) on February 7,
2007. As reported in the Form 13G, each of the Lampe Conway
Persons beneficially owns the following: (i) LC Capital
beneficially owns 536,523 shares of our common stock and
has shared voting and investment power with respect to such
shares, (ii) Lampe Conway beneficially owns
536,523 shares of our common stock and has shared voting
and investment power with respect to such shares,
(iii) Steven G. Lampe beneficially owns 536,523 shares
of our common stock and has shared voting and investment power
with respect to such shares, and (iv) Richard F. Conway
beneficially owns 536,523 shares of our common stock and
has shared voting and investment power with respect to such
shares. |
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(7) |
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As reported in the Form 13G filed by Blackport Capital
Fund Ltd. (Blackport), Blackstone Distressed
Securities Advisors LP (Blackstone Distressed),
Blackstone DD Advisors L.L.C. (Blackstone DD), Peter
G. Peterson and Stephen A. Schwarzman (together with Blackport,
Blackstone Distressed, Blackstone DD and Peter G. Peterson, the
Blackstone Persons) on March 4, 2008. As
reported in the Form 13G, each of the Blackstone Persons
beneficially owns the following: (i) Blackport beneficially
owns 498,999 shares of our common stock and has sole voting
and investment power with respect to such shares,
(ii) Blackstone Distressed beneficially owns
498,999 shares of our common stock and has sole voting and
investment power with respect to such shares by virtue of its
position as investment advisor to Blackport,
(iii) Blackstone DD beneficially owns 498,999 shares
of our common stock and has sole voting and investment power
with respect to such shares by virtue of its position as general
partner of Blackstone Distressed, (iv) Peter G. Peterson
beneficially owns 498,999 shares of our common stock and
has shared voting and investment power with respect to such
shares by virtue of his position as founding member of
Blackstone DD and (v) Stephen A. Schwarzman beneficially
owns 498,999 shares of our common stock and has shared
voting and investment power with respect to such shares by
virtue of his position as founding member of Blackstone DD. |
14
Security
Ownership of Directors and Management
The following table sets forth certain information with respect
to the beneficial ownership of our common stock, as of
February 29, 2008 for:
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each of our current directors and nominees to serve as director;
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each named executive officer; and
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all current directors and executive officers as a group.
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Shares Beneficially Owned
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Number of Shares of
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|
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Percent of
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Name(a)
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Common Stock(b)
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Common Stock(c)
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Rodney D. Kent
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214,651
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2.1
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%
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Glenn J. Holler
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75,000
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*
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Donald F. DeKay
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49,966
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*
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Chrysant E. Makarushka
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48,000
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*
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Martin G. Dew
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|
16,000
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|
*
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|
Peter Blum
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9,900
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|
*
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David M. Gilchrist, Jr.
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9,900
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|
*
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|
Mark K. Holdsworth(d)
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9,900
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*
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William L. Pennington
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19,900
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*
|
|
David H. Robbins(e)
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0
|
|
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|
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|
Lowell W. Robinson
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9,900
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*
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|
John T. Walsh
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9,900
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|
*
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|
All executive officers and directors as a group (12 persons)
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473,017
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4.6
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%
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* |
|
Represents beneficial ownership of less than one percent (1%) of
the outstanding shares of our common stock. |
|
(a) |
|
The address of each of the stockholders is
c/o International
Wire Group, Inc., 12 Masonic Avenue, Camden, New York 13316,
except for Mr. Robbins, whose address is
c/o GSC
Partners, 500 Campus Drive, Suite 220, Florham Park, NJ
07932. Beneficial ownership is determined in accordance with the
rules of the SEC and includes voting and investment power with
respect to the securities. Except as indicated by footnote, and
subject to applicable community property laws, each person
identified in the table possesses sole voting and investment
power with respect to all shares of common stock shown as held
by them. |
|
(b) |
|
In accordance with SEC rules, this column also includes shares
that may be acquired pursuant to stock options that are or will
become exercisable within 60 days of February 29, 2008
as follows: 195,000 shares for Mr. Kent,
75,000 shares for Mr. Holler, 48,000 shares for
Mr. DeKay, 48,000 shares for Mr. Makarushka,
16,000 shares for Mr. Dew, 9,900 shares for
Mr. Blum, 9,900 shares for Mr. Gilchrist,
9,900 shares for Mr. Holdsworth, 9,900 shares for
Mr. Robinson, 9,900 shares for Mr. Walsh and
19,900 shares for Mr. Pennington. |
|
(c) |
|
The percentages shown are calculated based upon
9,923,002 shares of common stock, the number of shares
outstanding as of February 29, 2008, plus the number of
shares that may be acquired pursuant to stock options that are
or will become exercisable within 60 days for that
particular person or group. |
|
(d) |
|
Does not include shares beneficially owned by TCP or its
affiliates as described in footnote (2) under
Security Ownership Of Certain Beneficial
Ownership Security Ownership of 5% Beneficial
Owners. Mr. Holdsworth is a Managing Partner of, and
has an equity interest in, TCP. |
|
(e) |
|
Does not include shares beneficially owned by GSC or its
affiliates as described in footnote (4) under
Security Ownership Of Certain Beneficial
Ownership Security Ownership of 5% Beneficial
Owners. Mr. Robbins is an employee of, and has an
indirect equity interest in, GSC. |
15
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
The following discussion and analysis may contain statements
regarding future individual and company performance targets and
goals. These targets and goals are disclosed in the limited
context of our companys compensation programs and should
not be understood to be statements of managements
expectations or estimates of results or other guidance. We
specifically caution investors not to apply these statements to
other contexts.
Overview
of International Wires Compensation
Program
Throughout this Proxy Statement, our Chief Executive Officer,
Chief Financial Officer and the three other most highly
compensated executive officers other than the Chief Executive
Officer and Chief Financial Officer, who are included in the
Summary Compensation Table, are referred to as the named
executive officers. The Compensation Committee reviews and
recommends to the Board of Directors compensation for the named
executive officers, including, without limitation, (a) the
annual base salary, (b) the annual incentive bonus,
including the specific goals and amount, (c) equity
compensation, (d) employment agreements, severance
arrangements, and change in control agreements/provisions and
(e) any other benefits, compensation or arrangements. The
full Board of Directors approves the compensation for the named
executive officers.
The Compensation Committees membership is determined by
the Board of Directors and is composed entirely of independent
directors of the Board of Directors. Mr. Blum, the
Compensation Committee chairman, reports on Compensation
Committee actions and recommendations from time to time at the
Board of Directors meetings.
Compensation
Program Objectives
The Compensation Committee believes that the most effective
executive compensation program is one that is designed to
attract and retain highly qualified and talented executives,
provide appropriate incentives to motivate those individuals to
maximize stockholder returns by producing sustained superior
performance and reward them for outstanding individual and team
contributions to the achievement of our companys near-term
and long-term business objectives.
Setting
Executive Compensation
Based on the foregoing objectives, executive compensation is
composed of two elements near-term compensation and
long-term compensation. Near-term compensation consists of base
salary, annual bonus awards and perquisites and other personal
benefits. Long-term compensation consists of stock option
grants, deferred compensation and retirement benefits. These
elements of compensation are discussed in more detail under the
heading Elements of Compensation for Fiscal 2007
below. We believe the combination of near-term and long-term
compensation strikes the right balance between steady pay and
highly leveraged performance-based rewards that promote
stockholders interests.
The ability of Compensation Committee members to judge
performance effectively is enhanced by the exposure they get to
our operations as members of our Board of Directors. The Board
of Directors participates in regular updates on our business
priorities, strategies and results. As a result, the Board of
Directors has frequent interaction with and open access to
executive officers. This gives them considerable opportunity to
ask questions and assess the performance of the executives and
our company. The Compensation Committee does not currently
engage the services of an independent outside consultant because
it has not made major changes in base salary, has implemented a
pay for performance bonus system, and, through the experiences
of members of the committee with other companies, believes it
has a good grasp of appropriate compensation approaches and
levels. The Compensation Committee has the ability to retain an
outside consultant if and when it believes it would be cost
effective to do so.
16
Elements
of Compensation for Fiscal 2007
For fiscal 2007, the elements of compensation for the named
executive officers were:
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base salary;
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annual bonus awards;
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stock option grants;
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retirement benefits; and
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perquisite and other personal benefits.
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In addition to these elements, our Chief Executive Officer is
provided additional compensation through a deferred compensation
program. Each of the elements of our companys executive
compensation program for fiscal 2007 is discussed in the
following paragraphs.
Base Salary. Our company provides named
executive officers with a base salary to compensate them for
services rendered during each fiscal year. This is the basic,
least variable form of compensation for the job an executive
officer does. We have employment agreements with Rodney D. Kent
and Glenn J. Holler, and, as a result, Mr. Kent and
Mr. Holler were guaranteed a minimum annual base salary of
$325,000 and $279,900 in 2007, respectively, during the term of
their employment agreement. (The employment agreements were
revised on April 25, 2008, and now provide a guaranteed
minimum annual base salary of $400,000 and $299,936 for
Mr. Kent and Mr. Holler, respectively.) Increases to
Mr. Kents and Mr. Hollers base salaries
and the determination of the base salary for the other named
executive officers are based on the employees knowledge
and experience in the industry, expected future contributions to
the growth and development of our company and the impact of the
position on our companys performance. Base pay is designed
to be competitive compared with prevailing market rates and
companies that compete with our company for management talent.
The Compensation Committee makes this determination based on its
knowledge and general experience, and the committee has not
engaged in specific benchmarking. Executive positions are
grouped by grades, which are part of our companys overall
salary structure.
The annualized base salary for 2007 for Mr. Kent,
Mr. Holler, Mr. DeKay, Mr. Makarushka and
Mr. Dew was $400,000, $291,200, $220,740, $140,660 and
$183,376, respectively. The current annualized base salary for
Mr. Kent, Mr. Holler, Mr. DeKay,
Mr. Makarushka and Mr. Dew is $400,000, $299,936,
$227,362, $144,880 and $188,822, respectively.
Annual Bonus Award. Annual bonus awards are
made to our named executive officers pursuant to our
companys Key Management Incentive Plan, Bare Wire Cash
Profit Sharing Plan (if applicable) and High Performance
Conductors Cash Profit Sharing Plan (if applicable). A
description of each follows.
Key Management Incentive Plan. Our
companys Key Management Incentive Plan is a non-equity
incentive cash bonus plan for certain of our companys key
management, including the named executive officers. The plan is
designed to reward operating performance results. Although the
plan provides significant discretion, the plan is basically a
pay-for-performance incentive plan because it is contingent upon
reaching our financial goals. The Compensation Committee views
pay-for-performance as a key element in its overall compensation
philosophy.
The annual incentive plan compensation under the Key Management
Incentive Plan is computed for all the named executive officers
as follows:
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At the beginning of the year, the Compensation Committee, based
on input from management, sets a target EBITDA (discussed
further below) for the current fiscal year. The target EBITDA is
designed to be a realistic target at the time it is determined
and is the same target used in our business for planning
purposes. The target EBITDA is also approved by the Board of
Directors.
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Also at the beginning of the year, the Compensation Committee
sets a target level (as a percentage of base salary) for each
named executive officer, which is then multiplied by the named
executive officers base
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17
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salary to determine his target payment amount. The Board of
Directors also approves the target level for each named
executive officer.
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The Compensation Committees ability to determine target
levels is partially limited by the employment agreements with
Mr. Kent and Mr. Holler, as these employment
agreements require that Mr. Kent and Mr. Holler be
eligible for an annual bonus of up to 65% and 50%, respectively,
of base salary. The target level (as a percentage of base
salary) is set based on the named executive officers
importance and the impact of his position within the
organization. To that end, Mr. Kent, our Chief Executive
Officer, is the individual with the greatest overall
responsibility for our companys performance and was
consequently assigned the highest target level of 75% of base
salary. Mr. Holler, our Chief Financial Officer, has the
second greatest overall responsibility for our companys
performance and was consequently assigned the second highest
target level of 55% of base salary. The remaining named
executive officers are assigned a target level of 50% of base
salary. The Compensation Committee relies on the general
experience and knowledge of the members of the Compensation
Committee to establish the target levels. (In 2008, we amended
Mr. Kents and Mr. Hollers employment
agreements to set their target levels to 75% and 55%, which
conforms to the practice in 2007.)
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After the end of the year, the companys performance
percentage is calculated by dividing our actual EBITDA by
the target EBITDA, and then multiplying the result by 100. The
performance percentage is then used to calculate the
percentage of the target bonus, which is determined
by referring to the bonus chart which lists the performance
percentage next to a corresponding percentage of target bonus.
Our bonus chart is a graduated scale of performance percentage
beginning with 80% of EBITDA achieved (which corresponds to a
percentage of the target bonus of 0%) and ending with a
performance percentage of 120% of EBITDA achieved (which
corresponds to a target percentage of 150%). The following is a
sample of our bonus chart:
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Performance Percentage
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(Percentage of EBITDA Achieved)
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Percentage of Target Bonus
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80%
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0%
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81%
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5%
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98%
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90%
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99%
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95%
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100%
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100%
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101%
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102.5%
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102%
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105%
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119%
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147.5%
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120%
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150%
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The percentage of the target bonus is then multiplied by each
named executive officers target payment amount. Once this
amount is calculated, the Chief Executive Officer reviews the
amounts and makes a recommendation to the Compensation Committee
(except for his own bonus) based on EBITDA, the performance of
each participant and any other factors that he deems appropriate.
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After reviewing the recommendations, the Compensation Committee
has discretion in determining the bonuses for each named
executive officer, subject to Board of Directors approval.
|
Performance is measured based on EBITDA because we believe it
offers the best measure of operational performance as it
provides a clearer picture of cash flow and results of
operations by removing items that can obscure true company
performance. EBITDA is an appropriate measure of performance as
it reflects results from operations before the effects of
financing and investing activities by excluding interest and
depreciation costs. EBITDA is not a recognized financial measure
under U.S. GAAP and has limitations because it excludes
certain results that are material to our consolidated results.
EBITDA is earnings before interest, taxes, depreciation,
amortization and non-cash items. The relevant EBITDA target for
all the named executive officers is the EBITDA of our whole
company, except for Mr. Dew,
18
whose relevant EBITDA target is the EBITDA of HPC. The
Compensation Committee
and/or the
Board of Directors has the right to make discretionary
adjustment to EBITDA:
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consistent with exclusions or adjustments provided for in our
financing agreements, including without limitation, the Loan and
Security Agreement, dated as of October 20, 2004, among
International Wire, its domestic subsidiaries, the lenders
thereunder and Wachovia Capital Finance Corporation (Central),
formerly known as Congress Financial Corporation (Central), as
agent, or
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for the impact of certain events or occurrences that were not
budgeted or planned for in setting the goals, including, among
other things:
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asset write-downs;
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litigation or claim judgments or settlements;
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the effect of changes in tax laws, accounting principles, or
other laws or provisions affecting reported results;
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any reorganization and restructuring programs;
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extraordinary nonrecurring items as described in Accounting
Principles Board Opinion No. 30 or in managements
discussion and analysis of financial condition and results of
operations appearing in our annual report to stockholders for
the applicable year;
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acquisitions or divestitures;
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foreign exchange gains and losses;
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discontinued operations; and
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changes in metal prices.
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In 2007, the target EBITDA for all the named executive officers
(other than Mr. Dew) was $52.9 million after
adjustments, and our company achieved an EBITDA of
$53.3 million after adjustments. This equals a performance
percentage of 100.8% and, in accordance with our bonus chart,
corresponds to a percentage of the target bonus of 100%. Our
Chief Executive Officer recommended to the Compensation
Committee that Mr. Holler, Mr. DeKay and
Mr. Makarushka receive 100% of their target bonus.
In 2007, the target EBITDA of HPC (which is the relevant EBITDA
measure for Mr. Dew) division was $16.7 million after
adjustments, and HPC achieved an EBITDA of $16.0 million
after adjustments. This equals a performance percentage of 95.8%
and, in accordance with our bonus chart, corresponds to a
percentage of the target bonus 75%. However, our Chief Executive
Officer recommended to the Compensation Committee that
Mr. Dew be paid 100% of his target bonus because HPCs
EBITDA was negatively affected by certain metal adjustments.
The Compensation Committee reviewed the recommendations of
Mr. Kent with respect to the named executive officers
(other than with respect to Mr. Kent) and determined to
accept his recommendations. With respect to Mr. Kent, the
Compensation Committee decided to follow the results of the
bonus chart and awarded Mr. Kent 100% of his target bonus.
The Board of Directors approved the bonuses for the named
executive officers.
For 2007, the bonus under the Key Management Incentive Plan for
Mr. Kent, Mr. Holler, Mr. DeKay,
Mr. Makarushka and Mr. Dew were $300,000, $160,160,
$110,370, $70,330 and $91,688, respectively. We are asking our
stockholders to approve a new Key Management Incentive Plan,
which is consistent with the approach previously followed in
awarding bonuses but which will permit us to satisfy the
requirements of Section 162(m) of the Internal Revenue Code
of 1986 in future years. See Proposal 2
Approval of Key Management Incentive Plan on
pages 5-6.
Bare Wire Cash Profit Sharing Plan. Our
companys Bare Wire Cash Profit Sharing Plan is
administered by the Compensation Committee and provides cash
bonuses to all employees of the Bare Wire division, including
the named executive officers that are employed in the Bare Wire
division, based on months of service and attendance. The purpose
of the plan is to encourage retention and attendance.
Mr. Kent, Mr. DeKay and Mr. Makarushka are
employed in the Bare Wire division.
19
Following the completion of each fiscal year, the Chief
Executive Officer recommends to the Board of Directors
and/or the
Compensation Committee an amount to be contributed to the Bare
Wire Cash Profit Sharing Plan for the Bare Wire division
participants. This amount is generally a percentage of EBITDA
earned by the Bare Wire division. The final amount is determined
in the discretion of the Board of Director
and/or the
Compensation Committee.
Generally, each participant earns one point for each whole month
of employment with the Bare Wire division since the beginning of
the participants service with the Bare Wire division.
However, a participant will not earn a point for a given month
of employment with the Bare Wire division if such participant is
absent from work (as further specified in the policy maintained
at each location).
The award of bonuses pursuant to the Bare Wire Cash Profit
Sharing Plan is discretionary. Each participants bonus, if
any, equals the number of points accrued by such participant
times the quotient of the profit sharing pool divided by the
total number of points accrued by all the participants. For
2007, the bonus under the Bare Wire Cash Profit Sharing Plan for
Mr. Kent, Mr. DeKay and Mr. Makarushka was
$5,854, $4,336 and $3,319, respectively.
High Performance Conductors Cash Profit Sharing
Plan. Our companys High Performance
Conductors Cash Profit Sharing Plan is administered by the
Compensation Committee and provides cash bonuses to all
employees of IWG High Performance Conductors, Inc., including
Mr. Dew, based on months of service and attendance. The
purpose of the plan is to encourage retention and attendance.
Following the completion of each fiscal year, the Chief
Executive Officer recommends to the Board of Directors
and/or the
Compensation Committee an amount to be contributed to the High
Performance Conductors Cash Profit Sharing Plan for the High
Performance Conductors division participants. This amount is
generally a percentage of EBITDA earned by the High Performance
Conductors division. The final amount is determined in the
discretion of the Board of Directors
and/or the
Compensation Committee.
Generally, each participant earns one point for each whole month
of employment with the High Performance Conductors division
since the beginning of the participants service with the
High Performance Conductors division. However, a participant
will not earn a point for a given month of employment with the
High Performance Conductors division if such participant is
absent from work (as further specified in the policy maintained
at each location).
The award of bonuses pursuant to the High Performance Conductors
Cash Profit Sharing Plan is discretionary. Each
participants bonus, if any, equals the number of points
accrued by such participant times the quotient of the profit
sharing pool divided by the total number of points accrued by
all the participants. For 2007, the bonus under the High
Performance Conductors Cash Profit Sharing Plan for Mr. Dew
was $3,864.
Stock Option Grants. A stock option is a right
to purchase a specified number of shares of our common stock at
a set exercise price subject to the terms and conditions of an
option agreement. The exercise price is the fair market value of
our stock on the day the Compensation Committee granted the
option. Stock option grants are intended to motivate longer-term
business objective achievement as reflected in the stock price
and retain and motivate executives. An increase in the value of
our stock benefits all our stockholders, thus aligning executive
and stockholder interests. We did not issue any stock options to
our named executive officers in 2007, because in 2006 we issued
large grants of options to our named executive officers (some of
which vested in 2007) and generally believe that stock
option grants should only be made at a qualifying
employees commencement of employment and, occasionally,
following a significant change in job responsibilities or to
meet other special recruiting or retention objectives. In 2007,
the following options, which were issued in 2006, vested in
2007: 65,000 options for Mr. Kent, 25,000 options for
Mr. Holler, 16,000 options for Mr. DeKay, 16,000
options for Mr. Makarushka and 16,000 options for
Mr. Dew.
Retirement Benefits. Our companys named
executive officers also participate in our 401(k) plan available
to salaried and hourly employees. At the beginning of the year,
we funded 1% of each employees previous year base salary
into the 401(k) plan, including named executive officers.
Although we have generally funded an amount for 401(k) plans,
whether to make a contribution and the amount of the
contribution is discretionary. Throughout the year we also match
50% of employees contributions up to 6% of salary for all
participating employees.
20
Perquisites and Other Personal Benefits. Our
company provides named executive officers with perquisites and
other personal benefits, reflected in the All Other Compensation
column in the Summary Compensation Table on page 22, that
our company, the Compensation Committee and the Board of
Directors believe are reasonable and consistent with our overall
compensation program to better enable our company to attract and
retain superior employees for key positions.
Under Mr. Kents employment agreement with us, we are
obligated to pay certain insurance premiums for policies owned
by Mr. Kent. Additionally, Mr. Kents employment
agreement entitles him to an automobile allowance of $1,000 per
month (plus a gross up for taxes) and group medical coverage for
himself and his dependents. The Compensation Committee and the
Board of Directors has also approved executive medical for
Mr. Kent.
Under Mr. Hollers employment agreement with us
existing in 2007, Mr. Holler is entitled to benefits,
including group life, health, executive medical supplement and
other insurance, annual executive physical, reimbursement for
tax preparation costs, an automobile allowance of $1,000 per
month (plus a gross up for taxes) and reimbursement of certain
country club dues.
The perquisites received by the other named executive officers
include automobile allowances and executive medical.
Mr. Kent and Mr. DeKay own 75% and 5% of the equity of
Prime, respectively. See Certain Relationships and Related
Person Transactions for more information. Because our
sales to Prime are made at prices and terms comparable to those
of other companies in the industry, the Compensation Committee
does not consider those payments in determining the compensation
for Mr. Kent and Mr. DeKay.
Deferred Compensation Program. As required by
Mr. Kents employment agreement, in addition to
Mr. Kents base salary, we accrue 15% of his base
salary to an unfunded deferred compensation account on
December 31st of each year. In addition, we also
accrue 8% of the total balance in his deferred account as of the
end of the preceding December 31st, and this 8% return will
continue until all deferred compensation has been paid to
Mr. Kent. The deferred compensation account is an unsecured
claim and all amounts remain part of our operating assets,
subject to creditor claims. The current balance of
Mr. Kents deferred compensation is $2.1 million
as of December 31, 2007.
Compensation
Following Employment Termination or Change in
Control
Our company has entered into employment agreements with
Mr. Kent and Mr. Holler that provide certain
compensation following the termination of employment or a change
of control in certain circumstances. Stock options granted to
our named executive officers have provisions that are effective
upon the termination of employment or a change of control. See
Executive Compensation Employment
Agreements and Executive Compensation
Potential Payments upon Termination or Change in Control
on pages 28 to 30, respectively, for further information. The
Compensation Committee believes that compensation following
employment termination or a change of control is an important
part of the overall compensation for named executive officers.
The Compensation Committee also believes that these arrangements
are important as a recruitment and retention device.
Compensation
of Chief Executive Officer
The policies and decisions for compensating Mr. Kent, our
chief executive officer, are not materially different than the
other named executive officers. Unlike the other named executive
officers, Mr. Kent participates in a deferred compensation
program because Mr. Kent participated in a deferred
compensation program before he joined our company, and we have
concluded that maintaining his deferred compensation program is
important in order to retain Mr. Kents services.
Certain
Tax Consequences
In setting an executive officers compensation package, the
Compensation Committee considers the requirements of Internal
Revenue Code Section 162(m), which provides that
compensation in excess of $1 million paid to certain
executive officers is not deductible unless it is
performance-based and paid under a program that meets
21
certain other legal requirements. The Compensation Committee
retains the ability to evaluate the performance of our
executives and to pay appropriate compensation, even if it may
result in the non-deductibility of certain compensation under
federal tax law.
Accounting
Implications
Our companys stock option grant policies have been
impacted by the implementation of SFAS No. 123(R),
which we adopted in the first quarter of fiscal 2006. Under this
accounting pronouncement, we are required to value unvested
stock options granted prior to our adoption of
SFAS No. 123(R) as well as stock options granted
subsequent to our adoption of SFAS No. 123(R) under
the fair value method and expense those amounts in the income
statement over the stock options remaining vesting period.
Compensation
Committee Report
The Compensation Committee of the Board of Directors has
reviewed and discussed the Compensation Discussion and Analysis
required by Item 402(b) of
Regulation S-K
with management and, based on that review and those discussions,
the Compensation Committee recommends to the Board of Directors
that the Compensation Discussion and Analysis be included in
this Proxy Statement.
THE COMPENSATION COMMITTEE
Peter Blum, Chairman
David M. Gilchrist, Jr.
David H. Robbins
Summary
Compensation Table
The following shows the compensation for fiscal year 2007 and
fiscal year 2006 of our Chief Executive Officer, Chief Financial
Officer and each of the three other most highly compensated
executive officers for fiscal year 2007 and fiscal year 2006 who
were executive officers at the end of the fiscal year. See
Executive Compensation Employment
Agreements for a description of the employment agreements
with Mr. Kent and Mr. Holler.
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Change in
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Pension
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Non-Equity
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Value and
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Incentive
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Nonqualified
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Option
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Plan
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Deferred
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All Other
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Compensation
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)(1)
|
|
($)(2)
|
|
($)
|
|
($)
|
|
($)(3)
|
|
($)
|
|
Rodney D. Kent
|
|
|
2007
|
|
|
|
400,000
|
|
|
|
5,854
|
|
|
|
479,620
|
|
|
|
300,000
|
|
|
|
214,656
|
|
|
|
89,889
|
|
|
|
1,490,019
|
|
Chief Executive Officer(4)(5)
|
|
|
2006
|
|
|
|
400,000
|
|
|
|
6,350
|
|
|
|
1,247,019
|
|
|
|
420,000
|
|
|
|
198,756
|
|
|
|
97,112
|
|
|
|
2,369,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glenn J. Holler
|
|
|
2007
|
|
|
|
291,200
|
|
|
|
0
|
|
|
|
184,470
|
|
|
|
160,160
|
|
|
|
0
|
|
|
|
42,333
|
|
|
|
678,163
|
|
Senior Vice President, Chief Financial Officer and Secretary
|
|
|
2006
|
|
|
|
291,200
|
|
|
|
0
|
|
|
|
479,623
|
|
|
|
224,224
|
|
|
|
0
|
|
|
|
44,367
|
|
|
|
1,039,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald F. DeKay
|
|
|
2007
|
|
|
|
220,740
|
|
|
|
4,336
|
|
|
|
118,060
|
|
|
|
110,370
|
|
|
|
0
|
|
|
|
30,083
|
|
|
|
483,589
|
|
Vice President Finance(4)
|
|
|
2006
|
|
|
|
218,430
|
|
|
|
4,654
|
|
|
|
306,958
|
|
|
|
154,518
|
|
|
|
0
|
|
|
|
27,132
|
|
|
|
711,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chrysant Makarushka
|
|
|
2007
|
|
|
|
140,660
|
|
|
|
3,319
|
|
|
|
118,060
|
|
|
|
70,330
|
|
|
|
0
|
|
|
|
75,048
|
|
|
|
407,417
|
|
Vice President Purchasing and Logistics
|
|
|
2006
|
|
|
|
139,190
|
|
|
|
3,518
|
|
|
|
306,958
|
|
|
|
98,462
|
|
|
|
0
|
|
|
|
27,745
|
|
|
|
575,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin G. Dew
|
|
|
2007
|
|
|
|
183,376
|
|
|
|
3,864
|
|
|
|
141,672
|
|
|
|
91,688
|
|
|
|
0
|
|
|
|
32,540
|
|
|
|
453,140
|
|
President of IWG High Performance Conductors, Inc.(6)
|
|
|
2006
|
|
|
|
136,170
|
|
|
|
2,211
|
|
|
|
94,448
|
|
|
|
68,085
|
|
|
|
0
|
|
|
|
12,797
|
|
|
|
313,711
|
|
|
|
|
(1) |
|
Performance bonuses paid pursuant to the Key Management
Incentive Plan have been reported in the Non-Equity Incentive
Plan Compensation column. Bonuses under this column are pursuant
to the Bare Wire Cash Profits Sharing Plan or High Performance
Conductors Cash Profit Sharing Plan, as applicable. |
22
|
|
|
(2) |
|
Amounts reflect the compensation cost for the year ended
December 31, 2007 and December 31, 2006 of the named
executive officer. These amounts are calculated in accordance
with SFAS 123(R) using the assumptions set forth in the
footnotes to the financial statements in our Annual Report on
Form 10-K
for the year ended December 31, 2007, except that, as
required by the SEC, no estimates were made for forfeitures.
When granted on May 12, 2006, the option awards vest
equally on May 12, 2007, May 12, 2008 and May 12,
2009. However, on November 9, 2006, the option awards for
all named executive officers (except Mr. Dew) were amended
such that two-thirds of the options vested on November 9,
2006 and the remaining one-third vested on October 20, 2007. |
|
(3) |
|
Rodney D. Kents other compensation for 2007 consists of
$3,280 for premiums for disability insurance, $39,287 for
premiums for whole life insurance, $9,449 for term life
insurance, $18,600 for a car allowance, $11,138 for medical and
related benefits and $8,135 for International Wires
contributions to our company-sponsored 401(k) plan. Glenn J.
Hollers other compensation for 2007 consists of $700 for
premiums for disability insurance, $2,458 for term life
insurance, $18,600 for a car allowance, $4,775 for country club
dues, $7,665 for medical and related benefits and $8,135 for
International Wires contributions to our company-sponsored
401(k) plan. Donald F. DeKays other compensation for 2007
consists of $700 for premiums for disability insurance, $1,719
for term life insurance, $13,234 for a car allowance, $6,295 for
medical and related benefits and $8,135 for International
Wires contributions to our company-sponsored 401(k) plan.
Chrysant Makarushkas other compensation for 2007 consists
of $492 for premiums for disability insurance, $4,578 for term
life insurance, $13,234 for a car allowance, $48,609 for medical
and related benefits and $8,135 for International Wires
contributions to our company-sponsored 401(k) plan. Martin G.
Dews other compensation for 2007 consists of $635 for
premiums for disability insurance, $599 for term life insurance,
$6,558 for a car allowance, $18,620 for medical and related
benefits and $6,128 for International Wires contributions
to our company-sponsored 401(k) plan. |
|
(4) |
|
See Certain Relationships and Related Person
Transactions. |
|
(5) |
|
Rodney D. Kents son and brother are also employed by us as
the Corporate Director of Metals Procurement and a scheduling
manager, respectively. |
|
(6) |
|
2006 compensation for Mr. Dew reflects compensation for
Mr. Dew after March 31, 2006, the date we acquired IWG
High Performance Conductors, Inc. |
Grants of
Plan-Based Awards
The following provides information concerning each grant of an
award pursuant to any plan made to our Chief Executive Officer,
Chief Financial Officer and each of the three other most highly
compensated executive officers for fiscal year 2007 who were
executive officers at the end of the fiscal year. We did not
make any grants of equity incentives in 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts Under Non-Equity Incentive Plan
Award
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
Name
|
|
($)(1)
|
|
|
($)(1)
|
|
|
($)(1)
|
|
|
Rodney D. Kent
|
|
|
15,000
|
|
|
|
300,000
|
|
|
|
450,000
|
|
Glenn J. Holler
|
|
|
8,008
|
|
|
|
160,160
|
|
|
|
240,240
|
|
Donald F. DeKay
|
|
|
5,519
|
|
|
|
110,370
|
|
|
|
165,555
|
|
Chrysant Makarushka
|
|
|
3,517
|
|
|
|
70,330
|
|
|
|
105,495
|
|
Martin G. Dew
|
|
|
4,584
|
|
|
|
91,688
|
|
|
|
137,532
|
|
|
|
|
(1) |
|
Represents the threshold, target and maximum estimated possible
payouts under our Key Management Incentive Plan. Payouts under
the Key Management Incentive Plan, which were based on our 2007
actual EBITDA compared to our EBITDA target were made at 100% of
each named executive officers target opportunity and are
reflected in the Summary Compensation Table in the column
entitled Non-Equity Incentive Plan Compensation. The
threshold possible payout is computed by multiplying each
executive officers target by 5%. The target possible
payout for each executive officer is computed by multiplying the
target level (as a percentage of base salary) by the actual base
salary paid to each executive officer. For 2007, the target
level (assuming our EBITDA target was met) was 75%, 55%, 50% and
50% as a percentage of base salary |
23
|
|
|
|
|
for Mr. Kent, Mr. Holler, Mr. DeKay and
Mr. Makarushka, respectively. Mr. Dews target
level of 50% is tied to meeting the EBITDA target of our HPC
division. The maximum target amount is computed by multiplying
the target of each executive officer by 150%. See
Compensation Discussion and Analysis Elements
of Compensation For Fiscal 2007 Key Management
Incentive Plan for more information. |
Outstanding
Equity Awards at Fiscal Year-End
The following provides information concerning unexercised
options held by our Chief Executive Officer, Chief Financial
Officer and each of the three other most highly compensated
executive officers for fiscal year 2007 who were executive
officers at the end of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities Underlying
|
|
|
Securities Underlying
|
|
|
Option
|
|
|
Option
|
|
|
|
Unexercised Options
|
|
|
Unexercised Options
|
|
|
Exercise Price
|
|
|
Expiration
|
|
Name
|
|
(#) Exercisable
|
|
|
(#) Unexercisable(1)
|
|
|
($)
|
|
|
Date
|
|
|
Rodney D. Kent
|
|
|
195,000
|
|
|
|
0
|
|
|
|
15.00
|
|
|
|
5/11/16
|
|
Glenn J. Holler
|
|
|
75,000
|
|
|
|
0
|
|
|
|
15.00
|
|
|
|
5/11/16
|
|
Donald F. DeKay
|
|
|
48,000
|
|
|
|
0
|
|
|
|
15.00
|
|
|
|
5/11/16
|
|
Chrysant Makarushka
|
|
|
48,000
|
|
|
|
0
|
|
|
|
15.00
|
|
|
|
5/11/16
|
|
Martin G. Dew
|
|
|
16,000
|
|
|
|
32,000
|
|
|
|
15.00
|
|
|
|
5/11/16
|
|
|
|
|
(1) |
|
The unexercisable options for Mr. Dew become exercisable in
equal installments on May 12, 2008 and May 12, 2009. |
Option
Exercises and Stock Vested
There were no stock options exercised during fiscal year 2007.
We have not issued any restricted stock.
Nonqualified
Deferred Compensation
The following provides information regarding the deferral of
compensation for Mr. Kent for fiscal year 2007. None of the
other named executive officers have deferred compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Earnings
|
|
|
Withdrawals/
|
|
|
Balance
|
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
Distributions
|
|
|
at Last FYE
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Rodney D. Kent(1)(2)
|
|
|
0
|
|
|
|
60,000
|
|
|
|
154,656
|
|
|
|
0
|
|
|
|
2,147,857
|
|
|
|
|
(1) |
|
See Executive Compensation Employment
Agreements for more information. |
|
(2) |
|
Our company contribution of $60,000 and the aggregate earnings
in the last fiscal year of $154,656 are included in the
nonqualified deferred compensation column in the Summary
Compensation Table on page 22. |
24
Director
Compensation
The following provides information concerning the compensation
of the directors of our company for fiscal year 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
|
Option
|
|
|
All Other
|
|
|
|
|
|
|
Paid in Cash
|
|
|
Awards
|
|
|
Compensation
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)
|
|
|
Mark K. Holdsworth
|
|
|
46,750
|
|
|
|
31,188
|
|
|
|
0
|
|
|
|
77,938
|
|
William Lane Pennington(2)
|
|
|
46,750
|
|
|
|
62,212
|
|
|
|
186,740
|
|
|
|
295,702
|
|
Peter Blum
|
|
|
53,750
|
|
|
|
31,188
|
|
|
|
0
|
|
|
|
84,938
|
|
David M. Gilchrist, Jr.
|
|
|
64,250
|
|
|
|
31,188
|
|
|
|
0
|
|
|
|
95,438
|
|
David H. Robbins(3)
|
|
|
51,750
|
|
|
|
31,188
|
|
|
|
0
|
|
|
|
82,938
|
|
Lowell W. Robinson
|
|
|
64,000
|
|
|
|
31,188
|
|
|
|
0
|
|
|
|
95,188
|
|
John T. Walsh
|
|
|
59,250
|
|
|
|
31,188
|
|
|
|
0
|
|
|
|
90,438
|
|
|
|
|
(1) |
|
Amounts reflect the compensation cost of the director for the
year ended December 31, 2007. These amounts are calculated
in accordance with SFAS 123(R) using the assumptions set
forth in the footnotes to the financial statements in our Annual
Report on
Form 10-K
for year ended December 31, 2007, except that, as required
by the SEC, no estimates were made for forfeitures. For all
outside directors, 9,900 options were issued in 2006 with
two-thirds of the options vesting in 2006 and the remaining
one-third vesting on October 20, 2007. On October 20,
2007, 3,300 additional options were issued to all outside
directors, and these options vest on October 20, 2008. |
|
(2) |
|
We provided Mr. Pennington compensation on an annualized
basis of $175,000, and company-provided medical and other
insurance benefits that were valued at $11,740 during 2007 for
his services as Vice-Chairman of the Board of Directors. See
Certain Relationships and Related Person
Transactions for a description of additional compensation
received by Mr. Pennington from us. |
|
(3) |
|
Cash compensation and option awards, in respect of the service
of Mr. Robbins as a director are paid directly to GSC or
its affiliates. |
Directors who are officers or employees of our company receive
no compensation for their services as directors. Each of our
directors who is not also an officer, employee or an affiliate
of our company (an Outside Director) received an
annual cash retainer of $37,000 in 2007.
Directors were granted an option to purchase 9,900 shares
of our common stock with one-third vesting on the date of grant
(May 19, 2006) and the remaining two-thirds vesting on
October 20, 2006 and October 20, 2007. Beginning on
October 20, 2007 and continuing annually thereafter,
Directors receive options to purchase 3,300 shares of our
common stock annually, which will vest on the first anniversary
of the date of grant. Our Directors are entitled to
reimbursement of their reasonable out-of-pocket expenses in
connection with their travel to and attendance at meetings of
the Board of Directors or committees thereof and for educational
training.
Additionally, each of our directors receives fees in the amount
of $1,500 for each Board of Directors meeting they attend in
person and $750 for telephonic participation. Directors also
receive annual cash retainers for committee positions in the
following amounts: Audit Committee Chairman ($10,000), Audit
Committee member ($4,000), Compensation Committee Chairman
($5,000) and Compensation Committee member ($3,000). Our
directors who serve on committees also receive committee meeting
fees of $1,000 for an in-person meeting and $500 for telephonic
participation.
See Certain Relationships and Related Person
Transaction Relationship with William Lane
Pennington for a description of additional compensation
received by Mr. Pennington from us.
25
Equity
Compensation Plan
The following table summarizes securities authorized for
issuance under our equity compensation plans as of
December 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
Remaining Available
|
|
|
|
Number of
|
|
|
Weighted-Average
|
|
|
for Future Issuance
|
|
|
|
Securities to Be
|
|
|
Exercise Price
|
|
|
Under Equity
|
|
|
|
Issued upon Exercise of
|
|
|
of Outstanding
|
|
|
Compensation Plans
|
|
|
|
Outstanding Options,
|
|
|
Options, Warrants
|
|
|
(Excluding Securities
|
|
|
|
Warrants and Rights
|
|
|
and Rights
|
|
|
Reflected in Column(a))
|
|
Plan Category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved by security holders
|
|
|
1,114,400
|
|
|
$
|
15.53
|
|
|
|
445,600
|
|
Equity compensation plans not approved by security holders(1)
|
|
|
10,000
|
|
|
$
|
11.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,124,400
|
|
|
$
|
15.49
|
|
|
|
445,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
On August 1, 2005, William Lane Pennington, Vice-Chairman
of the Board of Directors, was granted an option to purchase
25,000 shares at an exercise price of $11.00 per share.
One-third of the shares underlying the option became exercisable
on August 1, 2005, the second-third became exercisable on
August 1, 2006, and the remaining third became exercisable
on August 1, 2007. During 2007, he exercised options to
purchase 15,000 shares. The remaining options to purchase
10,000 shares expire on August 1, 2015. |
Employment
Agreements
Rodney
D. Kent Employment Agreement.
Mr. Kent entered into a third amended and restated
employment agreement with us on April 25, 2008. Pursuant to
such employment agreement, Mr. Kent serves as our Chief
Executive Officer. Mr. Kent is required to devote
substantially all of his business time and attention to the
performance of his duties under the employment agreement. Unless
otherwise terminated, the employment agreement expires on
March 31, 2009 and is extended automatically for one-year
periods provided that neither we nor Mr. Kent elect to
terminate the agreement.
The compensation provided to Mr. Kent under his employment
agreement includes an annual base salary of $400,000 or such
higher amount as may be prescribed by our Compensation Committee
or Board of Directors, and certain other benefits (including the
payment of insurance policy premiums for the benefit of
Mr. Kent) for as long as the employment agreement is in
force. In addition, we have agreed to provide lifetime medical
benefits covering Mr. Kent, his wife and his children until
age 27 under our group medical plan, or other similar plan,
as we may maintain for our executive employees, at our expense
during Mr. Kents employment with us or at any other
time, whether or not Mr. Kent is then employed by us.
Further, Mr. Kent is entitled to an annual bonus with a
target of seventy-five percent of his annual base salary.
In addition to the base salary, an amount equal to 15% of
Mr. Kents base salary is accrued annually under an
unfunded deferred compensation account. We also accrue 8% of the
previous years account balance as interest. The total
deferred compensation will generally be paid to Mr. Kent in
five substantially equal annual installments following the
termination of his employment, except that in the case of death,
it will be paid in one lump sum after his death, and in the case
of a change of control, it will be paid in one lump sum on the
later of his termination or change of control. Additionally, if
Mr. Kent experiences an unforeseeable emergency, as defined
in his employment agreement, Mr. Kent may petition our
Compensation Committee for a distribution from the deferred
compensation account. A change of control occurs upon
(i) acquisition of beneficial ownership of fifty percent
(50%) or more of the voting power of our outstanding securities
by any person or group during a twelve (12) month period
ending on the most recent acquisition by such person or group,
(ii) specified changes in the majority composition of our
Board, (iii) our merger or consolidation into any other
corporation other than a merger that would result in our current
stockholders maintaining greater than fifty percent (50%) of the
combined voting power of the combined entity or
26
(iv) our stockholders approving and effecting a plan of
complete liquidation of our company or an agreement for the sale
or disposition by our company of all or substantially all of our
assets.
If Mr. Kents employment is terminated due to
disability or death, Mr. Kent or his estate, heirs or
beneficiaries, as applicable, would receive
(i) Mr. Kents earned but unpaid base salary,
(ii) the payment of Mr. Kents deferred
compensation, (iii) benefits due under any employee benefit
programs and insurance arrangements, (iv) lifetime medical
coverage for Mr. Kent, his wife and his children until
age 27 and (v) subject to Mr. Kents
compliance with a confidentiality provision and two-year
non-competition and non-solicitation provisions in the case of
disability, Mr. Kents then current base salary,
benefits and car allowance for a period of 24 months from
the date of termination.
If Mr. Kents employment is terminated by us for cause
or if Mr. Kent voluntary terminates his employment (other
than on or during the one year period following a change of
control) or if the employment agreement terminates at the end of
its term, Mr. Kent would receive (i) his earned but
unpaid base salary, (ii) the payment of
Mr. Kents deferred compensation, (iii) benefits
due under any employee benefit programs and insurance
arrangements, and (iv) lifetime medical coverage for
Mr. Kent, his wife and his children until age 27. In
addition, in such a situation, we may elect to enforce the
two-year non-competition provision, in which case Mr. Kent
would also receive his then current base salary, certain
benefits and car allowance from the date of receiving a bona
fide offer of employment, that he is precluded from accepting,
until the two year anniversary of the termination of his
employment with us (or for such shorter period that we choose to
enforce these provisions). Cause, as defined in
Mr. Kents employment agreement, means a determination
by an affirmative vote of the majority of the directors of our
Board, acting in good faith, that Mr. Kent has engaged in
(i) intentional illegal or dishonest conduct or (ii) a
material breach of the terms of his employment agreement,
including a failure to properly perform the duties assigned to
Mr. Kent; provided, however, that in respect of clause
(ii), Cause shall be deemed to exist only in the
event that we provide reasonably specific notice to
Mr. Kent of the material breach, and such breach shall
remain uncured for a period of sixty (60) days thereafter;
and provided further, that if such breach is of such a nature
that it cannot be cured within sixty (60) days, then such
time period shall be extended for a reasonable additional time
if Mr. Kent has commenced to cure the breach within said
sixty (60) days and diligently proceeds thereafter to
effect the cure.
If Mr. Kents employment is terminated by us without
cause, Mr. Kent would receive (i) his earned but
unpaid base salary, (ii) the payment of
Mr. Kents deferred compensation, (iii) benefits
due under any employee benefit programs and insurance
arrangements, (iv) lifetime medical coverage for
Mr. Kent, his wife and his children until age 27 and
(v) subject to Mr. Kents compliance with a
confidentiality provision and two-year non-competition and
non-solicitation provisions, Mr. Kents then current
base salary, benefits and car allowance for a period of
24 months from the date of termination.
If Mr. Kent resigns on or within one year following a
change of control, Mr. Kent would receive (i) his
earned but unpaid base salary, (ii) the payment of
Mr. Kents deferred compensation, (iii) benefits
due under any employee benefit programs and insurance
arrangements, (iv) lifetime medical coverage for
Mr. Kent, his wife and his children until age 27 and
(v) subject to Mr. Kents compliance with a
confidentiality provision and two-year non-competition and
non-solicitation provisions, Mr. Kents then current
base salary, benefits and car allowance for a period of
24 months from the date of termination.
The non-competition provision in Mr. Kents agreement
provides that for a period of two years after his termination
with us, Mr. Kent will not (i) engage or enter into
employment by, or into self-employment or gainful occupation as
a competing business or (ii) act directly or indirectly as
an advisor, consultant, sales agent or broker for a competing
business. The non-solicitation provision in Mr. Kents
employment agreement provides that for a period of two years
following his employment with us, he shall not, on behalf of any
business, solicit or induce, or in any manner attempt to solicit
or induce, either directly or indirectly, any person employed by
us or any of our agents. The confidentiality provision in
Mr. Kents agreement provides that without prior
written consent, during his employment with us or any time
thereafter, he will not directly or indirectly reveal, divulge,
disclose or communicate confidential information to any person
or entity (other than our authorized officers, directors and
employees) in any manner whatsoever other than in the course of
carrying out his duties.
27
Glenn
J. Holler Employment Agreement.
Mr. Holler entered into a third amended and restated
employment agreement with us on April 25, 2008. Pursuant to
such employment agreement, Mr. Holler serves as our Senior
Vice President, Chief Financial Officer, and Secretary.
Mr. Holler is required to devote substantially all of his
business time and attention to the performance of his duties
under the employment agreement. Unless otherwise terminated, the
employment agreement expires on June 30, 2009 and is
extended automatically for one year periods provided that
neither we nor Mr. Holler elect to terminate the agreement
by the June 1st in the year immediately preceding the
expiration of the current term. For example, on July 1,
2008, the employment agreement term would be extended until
June 30, 2010.
The compensation provided to Mr. Holler under his
employment agreement includes an annual base salary of $299,936
or such higher amount as may be prescribed by our Compensation
Committee or Board of Directors, and certain other benefits for
as long as the employment agreement is in force. In addition,
Mr. Holler is entitled to an annual bonus with a target of
fifty-five percent of his base salary.
If Mr. Hollers employment is terminated due to
disability or death, Mr. Holler or his estate, heirs or
beneficiaries, as applicable, would receive
(i) Mr. Hollers earned but unpaid base salary,
(ii) benefits due under any employee benefit programs and
insurance arrangements and (iii) subject to
Mr. Hollers compliance with a confidentiality
provision, two-year non-competition and one-year
non-solicitation provisions in the case of disability,
Mr. Hollers then current base salary for a period of
12 months from the date of termination.
If Mr. Hollers employment is terminated by us for
cause or if Mr. Holler voluntary terminates his employment
or if the employment agreement terminates at the end of its
term, Mr. Holler would receive (i) his earned but
unpaid base salary and (ii) benefits due under any employee
benefit programs and insurance arrangements. In addition, in
such a situation, we may elect to enforce the two-year
non-competition provision, in which case Mr. Holler would
receive one-half of his then current salary from the date of
receiving a bona fide offer of employment, that he is precluded
from accepting, until the two year anniversary of the date of
termination of his employment with us (or for such shorter
period that we choose to enforce these provisions).
Cause, as defined in Mr. Hollers
employment agreement, means fraud by Mr. Holler,
dishonesty, competition with us, unauthorized use of any of our
trade secrets or confidential information, or a substantial
failure to properly perform the duties assigned to
Mr. Holler, in our reasonable judgment after giving
Mr. Holler written notice of such failure and a thirty day
period within which to cure such failure.
If Mr. Hollers employment is terminated by us without
cause, Mr. Holler would receive (i) his earned but
unpaid base salary, (ii) benefits due under any employee
benefit programs and insurance arrangements and
(iii) subject to Mr. Hollers compliance with a
confidentiality provision and one year non-solicitation
provision, Mr. Hollers then current base salary and
benefits for a period of the longer of 18 months from the
date of termination or until the termination date of his current
employment term.
The non-competition provision in Mr. Hollers
agreement provides that for a period of two years after his
termination with us, Mr. Holler will not, either directly
or indirectly, (i) engage or enter into employment by, or
into self-employment or gainful occupation as,
(ii) participate or make any financial investment in
whether for his own account or for the account of others or
(iii) render advisory services or otherwise assist in or be
interested in any capacity to any competing business in any
geographic area in which we are conducting business. The
non-solicitation provision in Mr. Hollers employment
agreement provides that for a period of one year following his
employment with us, he shall not, on behalf of any business,
solicit or induce, or in any manner attempt to solicit or
induce, either directly or indirectly, any person employed by us
or any of our agents. The confidentiality provision in
Mr. Hollers agreement provides that without prior
written consent, during his employment with us or any time
thereafter, he will not directly or indirectly reveal, divulge,
disclose or communicate confidential information to any person
or entity (other than our authorized officers, directors and
employees) in any manner whatsoever other than in the course of
carrying out his duties.
Potential
Payments upon Termination or Change in Control
The options granted to the named executive officers become fully
exercisable immediately prior to a change of control. A change
in control, as defined in the 2006 Management Stock Option Plan,
occurs upon (i) beneficial
28
ownership of fifty percent (50%) or more of the voting power of
our outstanding securities by any person, (ii) specified
changes in the majority composition of our Board, (iii) our
merger or consolidation into any other corporation other than a
merger that would result in our current stockholders maintaining
greater than fifty percent (50%) of the combined voting power of
the combined entity or (iv) stockholder approval and effect
of a plan of complete liquidation or a sale or disposition of
all or substantially all of our assets. In the event of a
termination of a named executive officers employment with
us either due to the executives voluntary resignation or
our termination of the executive for cause, the option would
terminate 30 days after the termination of employment. In
the event of a termination of a named executive officer other
than as a result of the executives voluntary resignation
or the executives termination by us for cause, the
executives option would terminate on the later of
(i) the date the executive would no longer be entitled to
receive any benefits from us or our subsidiaries pursuant to an
employment agreement (if any) or (ii) 30 days after
the termination of employment (or 180 days after the
termination of employment if because of death or disability).
See Executive Compensation Employment
Agreements for a description of the provisions contained
in Mr. Kents employment agreement.
The table below reflects the amount of compensation to each of
the named executive officers of our company in the event of
termination of the executive officers employment or upon a
change in control. The amount of compensation payable to each
named executive officer upon termination for cause, termination
without cause, termination due to death or disability, or
termination upon a change in control is shown below. The amounts
shown assume that the termination was effective as of
December 31, 2007, and thus include amounts earned through
that date and are estimates of the amounts that would be paid to
each executive officer listed upon his termination. The actual
amounts to be paid can only be determined at the time of the
applicable executive officers separation from our company.
|
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
Executive after
|
|
|
|
For Cause
|
|
|
Without Cause
|
|
|
Disability
|
|
|
Death
|
|
|
Change in Control
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Rodney D. Kent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
800,000
|
(1)
|
|
|
800,000
|
|
|
|
800,000
|
(2)
|
|
|
800,000
|
|
|
|
800,000
|
|
Benefits
|
|
|
184,232
|
(3)
|
|
|
184,232
|
(4)
|
|
|
184,232
|
(4)
|
|
|
65,200
|
(5)
|
|
|
184,232
|
(4)
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Deferred compensation
|
|
|
2,653,538
|
(6)
|
|
|
2,653,538
|
(6)
|
|
|
2,653,538
|
(6)
|
|
|
2,147,857
|
|
|
|
2,147,857
|
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Stock options
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Total
|
|
|
3,637,770
|
|
|
|
3,637,770
|
|
|
|
3,637,770
|
|
|
|
3,013,057
|
|
|
|
3,132,089
|
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Glenn J. Holler
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
|
291,200
|
(7)
|
|
|
436,800
|
(8)
|
|
|
291,200
|
(9)
|
|
|
291,200
|
|
|
|
0
|
|
Benefits
|
|
|
0
|
|
|
|
15,966
|
(10)
|
|
|
10,644
|
(11)
|
|
|
5,448
|
(12)
|
|
|
0
|
|
Stock options
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Total
|
|
|
291,200
|
|
|
|
452,766
|
|
|
|
301,844
|
|
|
|
296,648
|
|
|
|
0
|
|
Donald F. DeKay
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Chrysant Makarushka
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Martin G. Dew
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
232,000
|
(13)
|
|
|
|
(1) |
|
If Mr. Kent receives a bona fide offer of employment and we
enforce the provisions of a 2 year non-compete,
Mr. Kent will receive his salary from the date of receiving
such offer until two years after the date of his termination
assuming he complies with the confidentiality and non-compete
provisions. We have assumed for purposes of this table that
Mr. Kent receives a bona fide offer of employment on the
day he is terminated and that he is precluded from accepting a
bona fide offer of employment. |
|
(2) |
|
In the case of disability, assumes compliance with
confidentiality provisions and two year non-compete and
non-solicitation provisions in Mr. Kents employment
agreement. |
|
(3) |
|
If Mr. Kent is terminated for cause, medical coverage will
be provided to Mr. Kent and his wife for their lifetimes
and one dependent until 2011. The cost of this medical coverage
is estimated at $43,000 for lifetime medical, which assumes
medical coverage (and when applicable, medicare coverage) for
Mr. Kent and his wife for their lifetimes and one dependent
until 2011, a 5.75% discount rate and increasing medical costs
at the |
29
|
|
|
|
|
rate of approximately 11% per year trending down to
approximately 6% per year after 6 years. If Mr. Kent
receives a bona fide offer of employment and we enforce the
provisions of a 2 year non-compete, Mr. Kent will
receive (i) his car allowance of $1,550 per month and
(ii) life insurance and disability insurance policy
premiums, from the date of receiving such offer until two years
after the date of his termination assuming he complies with the
confidentiality and non-compete provisions. We have assumed for
purposes of this table that Mr. Kent receives a bona fide
offer of employment on the day he is terminated and that he is
precluded from accepting a bona fide offer of employment. The
total cost of two years of life and disability insurance
premiums is $104,032, which assumes life and disability
insurance premiums of $52,016 per year. The total cost of a two
year car allowance is $37,200. |
|
(4) |
|
Includes life and disability insurance policy premiums of
$104,032, which assumes life and disability insurance premiums
of $52,016 per year. Includes $43,000 for lifetime medical,
which assumes medical coverage (and when applicable, medicare
coverage) for Mr. Kent and his wife for their lifetimes and
one dependent until 2011, a 5.75% discount rate and increasing
medical costs at the rate of approximately 11% per year trending
down to approximately 6% per year after 6 years. Includes a
two year car allowance total of $37,200, which assumes a car
allowance of $1,550 per month. |
|
(5) |
|
Includes $28,000 for lifetime medical, which assumes medical
coverage (and when applicable, medicare coverage) for
Mr. Kents wife for her lifetime and one dependent
until 2011, a 5.75% discount rate and increasing medical costs
at the rate of approximately 11% per year trending down to
approximately 6% per year after 6 years. Includes a two
year car allowance totaling of $37,200, which assumes a car
allowance of $1,550 per month. |
|
(6) |
|
Includes $505,681 in interest earnings on deferred compensation. |
|
(7) |
|
If Mr. Holler receives a bona fide offer of employment and
we enforce the provisions of a 2 year non-compete,
Mr. Holler will receive one-half of his salary from the
date of receiving such offer until two years after the date of
his termination assuming he complies with the confidentiality
and non-compete provisions. We have assumed for purposes of this
table that Mr. Holler receives a bona fide offer of
employment on the day he is terminated and that he is precluded
from accepting a bona fide offer of employment. |
|
(8) |
|
Assumes compliance with confidentiality provision and a one-year
non-solicitation provision in Mr. Hollers employment
agreement. |
|
(9) |
|
In the case of disability, assumes compliance with
confidentiality provision, two year non-compete and one-year
non-solicitation provisions in Mr. Hollers employment
agreement |
|
(10) |
|
Assumes health care benefits of $887 per month for
18 months. |
|
(11) |
|
Assumes health care benefits of $887 per month for
12 months. |
|
(12) |
|
Assumes health care benefits of $454 per month for
12 months. |
|
(13) |
|
Reflects the acceleration of vesting of the remaining 67% of
Mr. Dews option for 48,000 shares. The value is
calculated by multiplying these shares by the difference in the
price of the most recent closing price of our common stock as of
December 31, 2007 of $22.25 and the exercise price of
$15.00 per share. |
AUDIT
COMMITTEE REPORT
The Audit Committee of International Wires Board of
Directors is composed solely of independent directors and
operates under a written charter adopted by the Board of
Directors. A copy of the Audit Committees charter can be
found on our website at
http://itwg.client.shareholder.com/index.cfm.
The Audit Committee assists the Board of Directors in its
general oversight of the integrity of our companys
financial statements, the independent registered public
accountants qualifications and independence, the
performance of International Wires internal audit function
and independent registered public accountants and
International Wires compliance with legal and regulatory
requirements. The Audit Committee also oversees the review and
assessment process of our internal control over financial
reporting, including the framework used to evaluate the
effectiveness of such internal controls. The independent
registered public accountants report directly to the Audit
Committee.
30
International Wires management has primary responsibility
for the financial statements, for maintaining effective internal
control over financial reporting and for assessing the
effectiveness of internal control over financial reporting.
Deloitte is responsible for expressing an opinion on the
conformity of our companys audited financial statements
with accounting principles generally accepted in the United
States.
In this context, the Audit Committee hereby reports as follows:
1. The Audit Committee has reviewed and discussed the
audited financial statements with International Wires
management. The Audit Committee also reviewed with management
and Deloitte the reasonableness of significant estimates and
judgments made in preparing the financial statements as well as
the clarity of the disclosures in the financial statements.
2. The Audit Committee has discussed with the independent
auditors the matters required to be discussed by SAS 61, as
amended (AICPA, Professional Standards, Vol. 1 section AU
380), as adopted by the Public Company Accounting Oversight
Board in Rule 3200T.
3. The Audit Committee has received the written disclosures
and the letter from the independent accountants required by
Independence Standards Board Standard No. 1 (Independence
Standards Board Standard No. 1, Independence
Discussions with Audit Committees), as adopted by the
Public Company Oversight Board in Rule 3600T, and has
discussed with the independent accountants the independent
accountants independence.
In reliance on the reviews and discussions referred to in
paragraphs 1 through 3 above, the Audit Committee
recommended to the Board of Directors (and the Board of
Directors has approved) that the audited consolidated financial
statements be included in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007 for filing with
the SEC. The Audit Committee and the Board also have
recommended, subject to stockholder approval, the selection of
our independent registered public accounting firm.
Pursuant to Section 404 of the Sarbanes-Oxley Act,
management was required to prepare as part of our Annual Report
on
Form 10-K
for the year ended December 31, 2007 a report by management
on its assessment of our internal control over financial
reporting, including managements assessment of the
effectiveness of such internal control. Deloitte has issued an
audit report relative to internal control over financial
reporting. During the course of fiscal 2007, management
regularly discussed the internal control review and assessment
process with the Audit Committee, including the framework used
to evaluate the effectiveness of such internal controls, and at
regular intervals updated the Audit Committee on the status of
this process and actions taken by management to respond to
issues identified during this process. The Audit Committee also
discussed this process with Deloitte. Managements
assessment report and the auditors audit report are
included as part of our Annual Report on
Form 10-K
for the year ended December 31, 2007.
THE AUDIT COMMITTEE
Lowell W. Robinson Chair
David M. Gilchrist, Jr. Member
John T. Walsh Member
The foregoing Report of the Audit Committee shall not be deemed
to be soliciting material, to be filed with the SEC or to be
incorporated by reference into any of International Wires
previous or future filings with the SEC, except as otherwise
explicitly specified by us in any such filing.
INDEPENDENT
AUDITORS
One or more representatives of Deloitte are expected to be
present at the Annual Meeting. They will have an opportunity to
make a statement and will be available to respond to appropriate
questions.
The amount of audit and other fees for professional services
rendered by Deloitte during the last two fiscal years are set
forth below.
31
Audit Fees: Deloitte billed us an aggregate of
$1,452,832 and $655,000 in fees in 2007 and 2006, respectively.
The services provided in exchange for these fees in 2007 was the
audit of our consolidated annual financial statements and
reviews of our consolidated quarterly financial statements,
including statutory audit work for foreign operations and the
audit of internal controls over financial reporting as required
by Sarbanes-Oxley. The services provided in exchange for these
fees in 2006 was the audit of our consolidated annual financial
statements and reviews of our consolidated quarterly financial
statements, including statutory audit work for foreign
operations.
Audit-Related Fees: Deloitte billed us $12,000
and $0 for audit-related services in 2007 and 2006,
respectively. Fees for audit related services primarily
consisted of services provided in 2007 related to our
Form S-3
filing.
Tax Fees: No fees were billed by Deloitte in
2007 for tax services. In 2006, Deloitte billed us $5,785 for
tax compliance related to an expatriate. Fees for tax services
primarily consisted of fees for tax preparation and tax planning.
All Other Fees: Deloitte did not bill us for
any other professional services in either of the last two fiscal
years.
Pre-Approval
Policy
The Audit Committee is required to pre-approve the audit and
non-audit services to be performed by the independent registered
public accounting firm in order to assure that the provision of
such services does not impair the firms independence.
All audit services provided by Deloitte were pre-approved by the
Audit Committee, which concluded that the provision of such
services by Deloitte was compatible with the maintenance of that
firms independence in the conduct of its auditing
functions. The Audit Committee charter provides for pre-approval
of any audit or non-audit services provided to our company by
its independent auditors. The Audit Committee may delegate to
one or more designated members of the Audit Committee the
authority to pre-approve audit and permissible non-audit
services, provided such pre-approval decision is presented to
the full Audit Committee at its scheduled meetings.
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our directors and executive officers and any
persons who own more than ten percent of our common stock to
file with the SEC various reports as to ownership of such common
stock. Such persons are required by SEC regulation to furnish us
with copies of all Section 16(a) forms they file. To our
knowledge, based solely on our review of the copies of such
reports furnished to us, the aforesaid Section 16(a) filing
requirements were met on a timely basis during fiscal 2007 with
the exception of (a) one Form 4 for each of the
following directors: Peter Blum, David M. Gilchrist, Mark
Holdsworth, William Lane Pennington, Lowell W. Robinson and John
T. Walsh, that was filed one day late on October 24, 2007
and (b) one Form 4 for GSC and certain related
entities, Robert Hamwee, Alfred C. Eckert III, Richard M.
Hayden, Andrew Wagner, Robert F. Cummings Jr. and Joseph H.
Wender that was filed late on October 30, 2007.
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Our general policy (as described in our Code of Business
Conduct) is to avoid related person transactions. Nevertheless,
we recognize that there are situations where related person
transactions might be in, or might not be inconsistent with, our
best interests and those of our stockholders. Either the Audit
Committee or our Board of Directors reviews and approves or
ratifies any related person transactions. We do not have a
formal written policy regarding policies and procedures for
related party transactions generally but rather related party
transactions are reviewed on a
case-by-case
basis as discussed further below.
Relationship
with Rodney D. Kent and Donald F. DeKay
We sell a portion of our production scrap to Prime and Prime
also performs certain scrap processing services for our company.
Rodney D. Kent, the Chief Executive Officer of our company, owns
75% of Prime and is the chairman and a director of Prime. In
addition, Donald F. DeKay, the Vice President of Finance of our
company, owns 5% of Prime and is a director of Prime.
32
There is no formal written agreement between us and Prime.
Instead, the relationship is governed through purchase orders.
Sales to Prime for the years ended December 31, 2007 was
$17.9 million. We had outstanding accounts receivable from
Prime related to those sales of $3.5 million at
December 31, 2007. We incurred scrap processing services
costs from Prime of $0.8 million for the year ended
December 31, 2007. We had outstanding accounts payable to
Prime related to those purchases of $0.3 million at
December 31, 2007. We have continued this relationship in
2008. Sales to and purchases from Prime were made at prices and
terms comparable to those of other companies in the industry.
The Audit Committee has approved the following process for
selling our production scrap. Decisions regarding the sale of
production scrap, including sales to Prime, are made by
Mr. Makarushka, our Vice President of Purchasing and
Logistics. Before making any sales of production scrap,
Mr. Makarushka is required to solicit competitive bids from
scrap purchasers for the particular location or locations where
the production scrap materials are located. Generally, bids are
made by buyers of production scrap by specifying a margin with
respect to a market price for the raw material. For example, the
price per pound we receive for copper scrap is the price per
pound of copper quoted on the New York Mercantile Exchange, Inc.
less the margin per pound of copper. Mr. Makarushka decides
whether to request bids for production scrap currently held at
our facilities or whether to lock in the margin for a longer
period of time. If Mr. Makarushka receives multiple bids,
Mr. Makarushka selects the lowest bid. If
Mr. Makarushka receives only one bid, Mr. Makarushka
exercises his discretion whether to accept the bid. The purchase
of scrap processing services was also confirmed by a competitive
bid. After the end of the fiscal year, our Manager of Internal
Audit/SOX reviews a sample of the transactions with Prime and
reports his finding to the Audit Committee.
Relationship
with William Lane Pennington
In addition to fees received as a director of International
Wire, during 2007 William Lane Pennington received compensation
of $175,000, and company-provided medical and other insurance
benefits for his services as Vice-Chairman of the Board of
Directors. In addition, in 2005 Mr. Pennington received an
option to acquire 25,000 shares of our common stock.
Mr. Pennington provided, among other things, assistance
with strategic planning, corporate governance and
communications. Our Board of Directors reviewed and approved the
compensation for Mr. Pennington. Mr. Pennington
stopped receiving benefits as Vice-Chairman as of
December 31, 2007, except that we are providing medical
benefits to Mr. Pennington until June 30, 2008.
ADDITIONAL
INFORMATION
Stockholder
Proposals for Inclusion in our 2009 Annual Meeting Proxy
Statement and Proxy Card
Stockholders who, in accordance with SEC
Rule 14a-8
wish to present proposals for inclusion in the proxy materials
to be distributed in connection with next years Annual
Meeting must submit their proposals so that they are received at
our principal executive offices no later than the close of
business on February 5, 2009. As the rules of the SEC make
clear, simply submitting a proposal does not guarantee that it
will be included.
In accordance with our companys Bylaws, in order to be
properly brought before the 2009 Annual Meeting, a
stockholders notice of the matter the stockholder wishes
to present, or the person or persons the stockholder wishes to
nominate as a director, must be delivered to our Secretary (at
the address below) not less than 120 nor more than 180 days
before the first anniversary of the date of the 2008 Annual
Meeting. As a result, any notice given by a stockholder pursuant
to these provisions of our Bylaws (and not pursuant to the
SECs
Rule 14a-8)
must be received no earlier than December 7, 2008, and no
later than February 5, 2009, unless our Annual Meeting date
is more than 30 days before or 60 days after
June 5, 2009. If our 2009 Annual Meeting date is advanced
by more than 30 days (May 6, 2009) or delayed by
more than 60 days (August 4, 2009) from the first
anniversary of this years meeting date, then notice by the
stockholder to be timely must be delivered to our Secretary not
later than the close of business on the later of the
90th day before the 2009 Annual Meeting or the
15th day following the date on which the meeting date is
publicly announced.
To be in proper form, a stockholders notice must include
the specified information concerning the proposal or nominee as
described in our Bylaws. A stockholder who wishes to submit a
proposal or nomination is encouraged to seek independent counsel
about our Bylaw and SEC requirements. Our company will not
consider any proposal or nomination that does not meet the Bylaw
requirements and the SECs requirements for submitting a
proposal or nomination.
33
Notices of intention to present proposals at the 2009 Annual
Meeting should be addressed to Secretary, International Wire
Group, Inc., 12 Masonic Avenue, Camden, New York 13316. We
reserve the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not
comply with these and other applicable requirements.
Other
Stockholder Proposals for Presentation at our 2009 Annual
Meeting
For any proposal that is not submitted for inclusion in next
years proxy statement (as described above) but is instead
sought to be presented directly at the 2009 Annual Meeting, SEC
rules permit management to vote proxies in its discretion if we:
(a) receive notice of the proposal more than 45 days
prior to the anniversary of the mailing date of this Proxy
Statement and we advise stockholders in next years proxy
statement about the nature of the matter and how management
intends to vote on such matter; or (b) do not receive
notice of the proposal at least 45 days prior to the
anniversary of the mailing date of this Proxy Statement. Notices
of intention to present proposals at the 2009 Annual Meeting
should be addressed to our Secretary at 12 Masonic Avenue,
Camden, New York 13316.
Other
Matters
Management is not aware of any other matters that will be
presented at the Annual Meeting, and our companys Bylaws
do not allow proposals to be presented at the meeting unless
presented to our company prior to the date of this Proxy
Statement. However, if any other matter is properly presented at
the meeting, the persons named in the proxy (or, if none, the
holder of the proxy) will vote as recommended by the Board of
Directors or, if no recommendation is given, in their own
discretion.
34
ANNEX A
INTERNATIONAL
WIRE GROUP
KEY MANAGEMENT INCENTIVE PLAN
The purpose of the International Wire Group Key Management
Incentive Plan (the Plan) is to provide key
senior executives of International Wire Group, Inc. (the
Company) and its subsidiaries, including
individuals who may be characterized as covered employees within
the meaning of Section 162(m) of the Internal Revenue Code
of 1986, as amended (the Code) (such
employees, Covered Employees) with incentive
based compensation upon the achievement of established
performance goals.
Participants in the Plan will consist of such key members of
management of the Company and its subsidiaries that the
Compensation Committee of the Company (as defined in
Section 7 hereof)
and/or Board
of Directors of the Company (the Board) in
its sole discretion selects to participate. An employee who is a
Participant for one annual performance period shall not have the
right to be a Participant in any subsequent annual performance
period.
3.1 Annual Bonuses. A Participant
may be designated as being eligible to receive an incentive cash
bonus with respect to an annual performance period (the
Annual Bonus), subject to the procedure and
requirements of Section 4 below; provided, however, that
the Compensation Committee
and/or Board
shall at all times have the authority and discretion to reduce
or eliminate the Annual Bonus of any Participant to the extent
it deems appropriate, even if performance goals are attained.
Any reduction of one Participants Annual Bonus will not
result in an increase of another Participants Annual Bonus.
3.2 Performance Bonuses. A
Participant may be designated as being eligible to receive an
incentive cash bonus with respect to a performance period (the
Performance Bonus), subject to the procedure
and requirements of Section 4 below; provided, however,
that the Compensation Committee
and/or Board
shall at all times have the authority and discretion to reduce
or eliminate the Performance Bonus of any Participant to the
extent it deems appropriate, even if performance goals are
attained.
3.3 Other Bonuses. The
Compensation Committee
and/or Board
may award cash bonuses in such amounts and on such terms and
conditions as it determines in its sole discretion, without
regard to the procedure and requirements set forth in
Section 4 below, to any individual who is or has been hired
to be a key management employee of the Company or any of its
subsidiaries.
4.1 Performance Period. Unless
otherwise determined by the Compensation Committee
and/or
Board, the annual performance period with respect to an Annual
Bonus shall be the calendar year (January 1 December
31). The Compensation Committee
and/or the
Board shall designate the performance period with respect to
Performance Bonuses.
4.2 Establishment of Goal. No
later than ninety (90) days after the commencement of the
performance period (but in no event after twenty-five percent
(25%) of the performance period has elapsed), the Compensation
Committee
and/or Board
shall establish (i) the performance goals applicable to the
performance period; (ii) the performance measures to be
used to measure the performance goals in terms of an objective
formula or standard; (iii) the method for computing the
amount of compensation payable to each Participant if such
performance goals are obtained; and (iv) the Participants
or class of Participants to which such performance goals apply.
4.3 Performance Measures. The
performance goals to be achieved to earn an Annual Bonus or
Performance Bonus shall primarily be based on earnings before
interest, taxes, depreciation, amortization and non-cash items
based on the performance of the Company, or any business or
division thereof (EBITDA), but may also be
based
A-1
on one or more of following performance measures, individually
or in combination, based on the performance of the Company, or
any business or division thereof, (i) revenue growth,
(ii) earnings, (iii) operating income; (iv) pre-
or after-tax income; (v) cash flow (before or after
dividends); (vi) cash flow per share (before or after
dividends); (vii) earnings per share; (viii) return on
equity; (ix) return on capital (including return on total
capital or return on invested capital); (x) cash flow
return on investment; (xi) return on assets;
(xii) economic value added (or an equivalent metric);
(xiii) market share or penetration; (xiv) share price
performance; (xv) total shareholder return;
(xvi) improvement in or attainment of expense levels or
expenses ratios; (xvii) employee satisfaction;
(xviii) customer satisfaction; (xix) customer
retention; (xx) rating agency ratings and (xxi) attainment
of strategic
and/or
organizational development goals.
4.4 Relative Performance
Measures. Performance goals may also be based
on comparisons to the performance of other companies or an index
covering multiple companies, measured by one or more of the
foregoing performance measures.
4.5 Certain Events. The evaluation
of performance measures against the performance goals may
(A) be adjusted consistent with exclusions or adjustments
provided for in the Companys financing agreements,
including without limitation, the Loan and Security Agreement,
dated as of October 20, 2004, among the Company, its
domestic subsidiaries, the parties to the Loan and Security
Agreement and Wachovia Capital Finance Corporation (Central),
formerly known as Congress Financial Corporation (Central), as
agent or (B) exclude or adjust for the impact of certain
events or occurrences that were not budgeted or planned for in
setting the goals, including, among other things, (i) asset
write-downs; (ii) litigation or claim judgments or
settlements; (iii) the effect of changes in tax laws,
accounting principles, or other laws or provisions affecting
reported results; (iv) any reorganization and restructuring
programs; (v) extraordinary nonrecurring items as described
in Accounting Principles Board Opinion No. 30 or in
managements discussion and analysis of financial condition
and results of operations appearing in the Companys annual
report to stockholders for the applicable year;
(vi) acquisitions or divestitures; (vii) foreign
exchange gains and losses; (viii) discontinued operations
and (ix) changes in metal prices.
4.6 Maximum Bonus. The maximum
Annual Bonus payable under the Plan to any Participant for any
one calendar year is $2 million. The maximum Performance
Bonus payable under the Plan to any Participant for any
performance period is $2 million multiplied by the number
of full and partial years in the performance period.
4.7 Determination of Bonuses
Amounts. As soon as reasonably practical
following the completion of each performance period, the
Compensation Committee shall confirm which of the applicable
performance goals, if any, have been achieved and the amount of
bonuses payable as a result thereof. The Annual Bonus or
Performance Bonus shall be paid to each Participant within a
reasonable period of time after the end of the performance
period; provided, however, that no Annual Bonus or Performance
Bonus will be paid for any performance period to any Participant
who is subject to the limitations of Section 162(m) of the
Code with respect to any Performance Period until such
confirmation is made by the Compensation Committee.
4.8 Reapproval of Performance
Measurements. The Company shall seek
re-approval of the Plan
and/or the
performance measures listed in Section 4.3 after the first
shareholder meeting that occurs in the fifth year following the
year in which stockholders first approve the Plan (and every
fifth year following any a re-approval thereafter). If such
re-approval is not obtained, the only performance measurement
that may be used to establish a performance goal for those
Participants who the Company determines to be Covered Employees
shall be EBITDA. The EBITDA performance goal may be based on a
comparison to other companies as provided in Section 4.4
and the EBITDA measurement and performance goal may be adjusted
for certain events as described in Section 4.5.
5.1 Compensation Committee. The
Plan shall be administered by the compensation committee of the
Company which shall consist solely of at least two
(2) outside directors within the meaning of
Section 162(m) of the Code (the Compensation
Committee). The Compensation Committee may delegate
any of its duties and powers, in whole or in part, to any
subcommittee thereof, provided such subcommittee consists solely
of at least two (2) outside directors within
the meaning of Section 162(m) of the Code.
A-2
5.2 Authority. The Compensation
Committee shall have full power to administer and interpret the
Plan and to establish rules for its administration, including,
without limitation, rules regarding the impact of employment
termination during the performance period and prior to the date
the Annual Bonus, Performance Bonus or Other Bonus is paid. Any
rule adopted by the Compensation Committee with respect to
Covered Employees shall be consistent with the provisions of
Section 162(m) of the Code.
5.3 Reliance on Advice. The
Compensation Committee
and/or
Board, in making any determination under or referred to in the
Plan shall be entitled to rely on opinions, reports or
statements of officers or employees of the Company and other
entities and of counsel, public accountants and other
professional expert persons.
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6.
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AMENDMENT
AND TERMINATION OF THE PLAN
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The Board may at any time, or from time to time, suspend or
terminate the Plan, in whole or in part, or amend it in such
respects as the Board may determine; provided, however, that any
amendment of the Plan shall be subject to the approval of the
Companys stockholders to the extent required to comply
with the requirements of Section 162(m) of the Code, or any
other applicable laws, regulations or rules.
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7.
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MISCELLANEOUS
PROVISIONS
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7.1 No Right to Continued
Employment. Neither the Plan nor any action
taken hereunder shall be construed as giving any Participant any
right to continue to be employed by or perform services for the
Company or any subsidiary.
7.2 Nontransferable. Except as may
be approved by the Compensation Committee, a Participants
rights and interests under the Plan may not be assigned or
transferred, hypothecated or encumbered, in whole or in part,
either directly or by operation of law or otherwise (except in
the event of the Participants death).
7.3 Withholding. The Company and
its subsidiaries shall have the right to deduct from any payment
made under the Plan any federal, state, local or foreign income
or other taxes required to be withheld with respect to such
payment.
7.4 Compliance with
Section 162(m). This Plan shall be
administered and interpreted in accordance with
Section 162(m) of the Code, to ensure the deductibility by
the Company or its subsidiaries of the payment of the Annual
Bonuses.
7.5 Governing Law. The Plan shall
be governed by, and construed and enforced in accordance with,
the laws of the State of New York.
This Plan is adopted as of April 25, 2008; provided,
however, the right of any Participant who is a Covered Employee
to an Annual Bonus under this Plan shall be subject to approval
of the Plan by the Companys stockholders.
A-3
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C123456789
Using a black ink pen, mark your votes with an X as shown in
this example. Please do not write outside the designated areas. X
International Wire Group, Inc.
00WL1B
1 U P X +
___PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
_
Annual Meeting Proxy Card
Authorized Signatures This section must be completed for your vote to be counted. Date and Sign
Below C
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as
attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give
full title.
Signature 1 Please keep signature within the box. Signature 2 Please keep signature within the
box. Date (mm/dd/yyyy) Please print date below.
+
B Non-Voting Items |
A Proposals The Board of Directors recommends a vote FOR all the nominees listed and FOR
Proposals 2 and 3.
Meeting Attendance
Mark box to the right if
you plan to attend the
Annual Meeting.
Change of Address Please print new address below.
01 Rodney D. Kent 02 Mark K. Holdsworth 03 William Lane Pennington
04 Peter Blum 05 David M. Gilchrist, Jr. 06 David H. Robbins
07 Lowell W. Robinson 08 John T. Walsh
1. Election of Directors:
01 02 03 04 05 06 07 08
Mark here to WITHHOLD vote from all nominees
Mark here to vote FOR all nominees
For All EXCEPT - To withhold a vote for one or more nominees, mark
the box to the left and the corresponding numbered box(es) to the right.
For Against Abstain
2. Approval of Key Management Incentive Plan
For Against Abstain
3. Ratification of Deloitte & Touche LLP as Independent
Registered Public Accounting Firm for the year ending
December 31, 2008 |
![(PROXY CARD)](d56176dd5617603.gif)
___PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
_
Proxy for 2008 Annual Meeting of Stockholders
Vote by Mail
· Mark, sign and date your proxy form
· Detach your proxy form
· Return your proxy form in the postage-paid envelop provided
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned stockholder of International Wire Group,
Inc., a Delaware corporation (the Company),
does hereby constitute and appoint Rodney D. Kent and Glenn J. Holler, or either one of them, with
full power to act alone and to designate substitutes, the
true and lawful proxies of the undersigned for and in the name and stead of the undersigned, to
vote all shares of common stock of the Company which the
undersigned would be entitled to vote if personally present at the 2008 Annual Meeting of
Stockholders of the Company, on all matters that may come before
such Annual Meeting. Said proxies are instructed to vote on the matters in the manner herein
specified.
IF THIS PROXY IS PROPERLY EXECUTED, THE SHARES OF COMMON STOCK COVERED HEREBY WILL BE VOTED AS
SPECIFIED HEREIN. IF NO
SPECIFIC ACTION IS MADE, SUCH SHARES WILL BE VOTED FOR PROPOSAL NO. 1, 2 AND 3 AND AS RODNEY D.
KENT AND GLENN J. HOLLER
DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERTY COME BEFORE THE ANNUAL MEETING.
The undersigned hereby revokes all previous Proxies and acknowledges receipt of the Notice of
Annual Meeting, the Proxy Statement attached thereto and
the Annual Report of the Company on Form 10-K for the fiscal year ended December 31, 2007 forwarded
therewith.
(CONTINUED AND TO BE MARKED, DATED AND SIGNED ON THE OTHER SIDE)
Proxy INTERNATIONAL WIRE GROUP, INC. |