UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
__________________________________________________________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported):
August
22, 2008
__________________________________________________________________
CELADON
GROUP, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
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000-23192
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13-3361050
|
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
|
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9503
East 33rd
Street
One
Celadon Drive, Indianapolis, IN
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46235
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(Address
of principal executive offices)
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(Zip
Code)
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(317)
972-7000
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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Compensatory Arrangements of
Certain Executive Officers and Directors
By action
unanimously approved on August 22 and August 25, 2008, the Compensation and
Nominating Committee (the "Compensation Committee") of the Board of Directors
(the "Board") of Celadon Group, Inc. (the "Company"), (i) awarded fiscal year
2008 bonuses for certain executive officers and directors and (ii) approved a
fiscal year 2009 compensation program for certain executive officers and
directors. The Compensation Committee reviewed and approved the
following compensation arrangements:
A. Fiscal
Year 2008 Cash Bonuses
The
Compensation Committee determined that the Company did not achieve the earnings
per share target established for fiscal year 2008 under the Company's Cash Bonus
Program. The Compensation Committee considered the reasons for the
shortfall, which were attributable in material part to record fuel prices,
currency exchange rates, and a slower economy. The Compensation
Committee also considered performance compared with peers, the growth of
Logistics operations, and certain internal management
accomplishments. Based on this evaluation, the Compensation Committee
approved discretionary bonuses as follows:
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Name
and Position
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2008
Fiscal Year Bonus
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|||
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Stephen
Russell,
Chairman
and CEO
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$ | 320,000 | ||
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Paul
Will,
Vice
Chairman, Executive Vice President,
CFO,
Treasurer, and Assistant Secretary
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$ | 200,000 | ||
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Chris
Hines,
President
and COO
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$ | 180,000 | ||
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Jonathan
Russell,
Executive
Vice President of Logistics
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$ | 135,000 | ||
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Kenneth
Core,
Vice
President and Secretary
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$ | 15,000 | ||
B. Fiscal
Year 2009 Senior Management Compensation Program
Following
the Compensation Committee's review of compensation data and discussion of,
among other things, the Company's current compensation of executive officers and
a proposed new program, the Compensation Committee approved a compensation
program for fiscal year 2009 (the "2009 Compensation Program"). The
2009 Compensation Program is comprised of three major compensation elements,
which include salary, cash bonus, and equity compensation. The 2009
Compensation Program is applicable to Stephen Russell, Paul Will, Chris Hines,
and Jonathan Russell. Although he is not a participant in the 2009
Compensation Program, information is also provided in this Form 8-K for Ken
Core, as required by Security and Exchange Commission rule, because he was a
named executive officer in the most recent proxy statement.
Executive Salary
Compensation
Pursuant
to the 2009 Compensation Program, the Compensation Committee approved annualized
salary increases, which will become effective September 1, 2008, for the
following named executive officers and other employees:
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Name
and Position
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Fiscal
Year 2008 Annualized Salary
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Fiscal
Year 2009 Annualized Salary1
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||||||
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Stephen
Russell,
Chairman
and CEO
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$ | 648,618 | $ | 700,000 | ||||
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Paul
Will,
Vice
Chairman, Executive
Vice
President, CFO,
Treasurer,
and Assistant
Secretary
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$ | 250,000 | $ | 300,000 | ||||
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Chris
Hines,
President
and COO
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$ | 250,000 | $ | 275,000 | ||||
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Jonathan
Russell,
Executive
Vice President of Logistics
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$ | 200,000 | $ | 225,000 | ||||
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Kenneth
Core,
Vice
President and Secretary
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$ | 127,400 | $ | 127,400 | ||||
| 1 |
Mr.
Russell's salary increase exceeds by approximately $15,000 the estimated
inflation adjustment that would be applicable effective January 21, 2009,
under his employment agreement. Messrs. Will, Hines, and Jon
Russell's salary increases were established by the Compensation Committee
action on August 22, 2008. Mr. Core's salary was last increased
from $122,400 to $127,400 on December 10,
2007.
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Annual Cash
Bonus
The
Compensation Committee approved an annual cash bonus formula as part of the 2009
Compensation Program. Under the 2009 Cash Bonus Program, the
Compensation Committee adopted the following target bonus amounts for each of
the officers listed below:
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Name
and Position
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Target
Bonus as a Percentage of Salary
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Target
Bonus in Dollars
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||||||
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Stephen
Russell,
Chairman
and CEO
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65 | % | $ | 455,000 | ||||
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Paul
Will,
Vice
Chairman, Executive Vice President, CFO, Treasurer, and Assistant
Secretary
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65 | % | $ | 195,000 | ||||
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Chris
Hines,
President
and COO
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65 | % | $ | 180,000 | ||||
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Jonathan
Russell,
Executive
Vice President of Logistics
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65 | % | $ | 146,000 | ||||
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Kenneth
Core,
Vice
President and Secretary
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N/A | N/A | ||||||
The
Compensation Committee established the following criteria for attainment of the
fiscal year 2009 cash bonus:
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Bonus
Criteria
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Percentage
of Bonus
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|||
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Earnings
Per Share Target
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30 | % | ||
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Return
on Invested Capital Target
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30 | % | ||
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Safety
Target
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15 | % | ||
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Discretionary
Amount
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25 | % | ||
For each
criterion other than the Discretionary Amount, the recipients may earn between
0% and 200% of the portion of the Target Bonus Amount attributable to that
criterion, depending on the level of performance.
Restricted Stock
Awards
The Compensation Committee also
established annual equity compensation grant targets for
participants. For 2009, the grants were made 100% in the form of
restricted stock awards because of the number of shares remaining for issuance
under the Company's 2006 Omnibus Incentive Plan. In future years, a
combination of restricted stock and stock options may be used.
The
restricted stock awards were made to Messrs. Stephen Russell, Will, Hines, Jon
Russell, and Core on August 25, 2008. The restricted stock awards
vest one-third on each of the first three anniversaries of the grant date,
conditioned on continued employment.
The following table sets forth the
restricted stock awards under the 2009 Compensation Plan and to Mr.
Core.
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Name
and Position
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Dollar
Value at 08/25/08 Closing Price
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Shares
of Restricted Stock
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||||||
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Stephen
Russell,
Chairman
and CEO
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$ | 779,889 | 65,592 | |||||
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Paul
Will,
Vice
Chairman, Executive Vice President, CFO, Treasurer, and Assistant
Secretary
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$ | 289,676 | 24,363 | |||||
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Chris
Hines,
President
and COO
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$ | 267,394 | 22,489 | |||||
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Jonathan
Russell,
Executive
Vice President of Logistics
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$ | 231,736 | 19,490 | |||||
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Kenneth
Core,
Vice
President and Secretary
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$ | 41,615 | 3,500 | |||||
C. Non-Employee
Director Compensation
The Board
reviewed the compensation of non-employee directors. The target
compensation for the year ending with the 2008 annual meeting of stockholders is
approximately $100,000 per director, plus fees for committee
service. Upon review, the Board increased the compensation of our
three non-employee directors, Anthony Heyworth, Catherine Langham, and Michael
Miller, effective at the next annual meeting of stockholders. The new
target annual compensation will be approximately $110,000 per director, plus
fees for committee service. The Board approved cash compensation of
$45,000, plus $2,500 for serving on a committee, $2,500 for serving as a
committee chair, and $5,000 for serving as lead director. In
addition, the Board approved equity compensation of approximately $65,000,
consisting of a number of shares of restricted stock equal to $65,000 divided by
the closing stock price on the date of grant (rounded to the nearest
share). Under this arrangement, our non-employee directors will
receive restricted stock awards on the date of the next annual meeting of
stockholders. The restricted stock awards will vest entirely on the
date of the following annual meeting. The shares must be held for a
minimum of two years following the vesting date so long as the recipient remains
a director.
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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CELADON
GROUP, INC.
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Date:
August 28, 2008
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By:
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/s/
Kenneth Core
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Kenneth
Core
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Vice
President and Secretary
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