¨ Preliminary Proxy Statement
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¨ Soliciting Material Under Rule 14a-12
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¨ Confidential, For Use of the
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Commission Only (as permitted
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by Rule 14a-6(e)(2))
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MFA Financial, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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1)
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Title of each class of securities to which transaction applies:
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2)
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Aggregate number of securities to which transaction applies:
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3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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4)
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Proposed maximum aggregate value of transaction:
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5)
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Total fee paid:
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¨
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Fee paid previously with preliminary materials:
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¨
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
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1)
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Amount previously paid:
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2)
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Form, Schedule or Registration Statement No.:
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3)
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Filing Party:
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4)
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Date Filed:
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(1)
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To elect the two directors named in the proxy statement to serve on MFA’s Board of Directors (the “Board”) until our 2014 Annual Meeting of Stockholders and until their successors are duly elected and qualify;
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(2)
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To approve the amendment to MFA’s charter to increase the number of authorized shares to 1,000,000,000 shares;
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(3)
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To approve, by advisory (non-binding) vote, MFA’s executive compensation;
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(4)
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To recommend, by advisory (non-binding) vote, the frequency of future votes on MFA’s executive compensation;
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(5)
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To ratify the appointment of Ernst & Young LLP as MFA’s independent registered public accounting firm for the fiscal year ending December 31, 2011; and
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(6)
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To transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof.
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By Order of the Board
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Timothy W. Korth
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General Counsel, Senior Vice President and Corporate Secretary
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·
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The majority of the compensation opportunity is in a balanced mix of annual incentive and long-term equity awards;
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·
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For our Senior Executive Officers (as defined in “Compensation Discussion and Analysis” of this Proxy Statement), the annual incentive awards are strongly linked to Return on Average Equity goals, but are subject to discretionary adjustment (upward or downward by as much as 30% in any given year) by the Compensation Committee to reflect other performance factors;
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·
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A significant portion of annual incentive awards are delivered in the form of restricted stock awards that vest over three to four years, which encourages our Named Executive Officers to focus on creating annual performance that delivers sustainable results;
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·
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For 2010, long-term incentive awards were made in a balanced mix of time-based and performance-based restricted stock units (“RSUs”) that “cliff” vest over a two to four-year period and, in the case of the performance-based awards, will vest only if our “return to stockholders” hits pre-established goals over the vesting period;
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·
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Our Senior Executive Officers must retain annual incentive equity compensation awards until meaningful levels of stock ownership are attained (generally, from three to five times base salary), which further strengthens the alignment of executive interests with long-term stockholder interests; and
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·
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Executives receive modest benefits consistent with all other salaried employees, very limited perquisites and no tax gross-ups.
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Fiscal Year Ended December 31,
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||||||||
2010
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2009
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|||||||
Audit Fees (1)
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$ | 846,228 | $ | 719,026 | ||||
Audit-Related Fees (2)
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— | — | ||||||
Tax Fees (3)
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43,960 | 12,700 | ||||||
All Other Fees (4)
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— | 10,000 | ||||||
Total
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$ | 890,188 | $ | 741,726 |
(1)
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2010 and 2009 Audit Fees include: (i) the audit of the consolidated financial statements included in our annual report on Form 10-K and services attendant to, or required by, statute or regulation; (ii) reviews of the interim consolidated financial statements included in our quarterly reports on Form 10-Q; and (iii) comfort letters, consents and other services related to Securities and Exchange Commission (“SEC”) and other regulatory filings and communications.
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Audit Fees for 2010 and 2009 also include the audit of the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002.
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(2)
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There were no Audit-Related Fees incurred in 2010 or 2009.
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(3)
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2010 and 2009 Tax Fees include tax compliance, tax planning, tax advisory and related tax services.
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(4)
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2009 All Other Fees include Ernst & Young LLP’s audit and consents and other services related to SEC and other regulatory filings for MFResidential Investments, Inc., a wholly-owned subsidiary of MFA. Except as described in the previous sentence, there were no other professional services rendered by Ernst & Young LLP in 2010 or 2009.
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Name
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Fees Earned or
Paid in Cash
($)(1)
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Stock Awards
($)(2)
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Option Awards
($)(3)
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Total
($)(4)
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||||||||||||
Stephen R. Blank
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$ | 72,500 | $ | 58,050 | $ | ¾ | $ | 130,550 | ||||||||
James A. Brodsky
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70,625 | 112,026 | ¾ | 182,651 | ||||||||||||
Edison C. Buchanan
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60,000 | 58,050 | ¾ | 118,050 | ||||||||||||
Michael L. Dahir
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67,500 | 58,050 | ¾ | 125,550 | ||||||||||||
Alan L. Gosule
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60,000 | 58,050 | ¾ | 118,050 | ||||||||||||
Robin Josephs
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67,500 | 58,050 | 6,731 | 132,281 | ||||||||||||
George H. Krauss
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60,000 | 58,050 | ¾ | 118,050 |
(1)
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Amounts in this column represent the annual board fees, annual committee chair fees and annual lead director fees earned or paid to non-employee directors for service in 2010. In addition to the lead director fees paid on the last business day of May and November in 2010, this column also includes lead director fees paid on May 28, 2010 with respect to the period of January 1, 2010 through May 20, 2010.
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(2)
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Amounts in this column represent the aggregate grant date fair value of such stock awards computed in accordance with FASB ASC Topic 718. During 2010, each non-employee director was granted (a) 3,750 Restricted Shares on May 28, 2010, which had a value of $7.33 per share (based on the fair market value of the Common Stock), and (b) 3,750 Restricted Shares on November 30, 2010, which had a value of $8.15 per share (based on the fair market value of the Common Stock). In addition, during 2010, the Lead Director was granted (x) an additional 4,584 Restricted Shares on May 28, 2010 (which included Restricted Shares granted to the Lead Director for the period of January 1, 2010 through May 20, 2010), which had a value of $7.33 per share (based on the fair market value of the Common Stock), and (y) an additional 2,500 Restricted Shares on November 30, 2010, which had a value of $8.15 per share (based on the fair market value of the Common Stock).
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(3)
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In connection with her appointment to the Compensation Committee in May 2010, Ms. Josephs was granted 5,000 non-qualified stock options (“NQSOs”) at a strike price of $6.99 per share on May 21, 2010. The amount in this column represents the aggregate grant date fair value of such stock option award computed in accordance with FASB ASC Topic 718, using the Black-Scholes-Merton option pricing model. As of December 31, 2010, our non-employee directors held the following number of unexercised NQSOs:
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Name
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Number of
Unexercised
NQSOs
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Stephen R. Blank
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5,000 | |||
James A. Brodsky
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5,000 | |||
Edison C. Buchanan
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5,000 | |||
Michael L. Dahir
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5,000 | |||
Alan L. Gosule
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5,000 | |||
Robin Josephs
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5,000 | |||
George H. Krauss
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5,000 |
(4)
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Total compensation for non-employee directors does not include aggregate distributions paid on dividend equivalent rights (“DERs”), which represent the right to receive a distribution on each DER equal to the cash dividend paid on a share of Common Stock. During 2010, each non-employee director (other than Ms. Josephs) received distributions on the 1,250 DERs which were attached to 1,250 of the 5,000 outstanding NQSOs held by such directors. For 2010, this resulted in cash payments of $1,156 to each such director. In connection with joining the Compensation Committee on May 21, 2010, Ms. Josephs was granted 5,000 NQSOs, of which 1,250 NQSOs had DERs attached. These NQSOs held by Ms. Josephs will become exercisable on the one-year anniversary of the date of grant (May 21, 2011). DERs are entitled to receive distributions only to the extent that the underlying NQSOs are exercisable.
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·
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Any covered related party transaction must be approved by the Board or by a committee of the Board consisting solely of disinterested directors. In considering the transaction, the Board or committee will consider all relevant factors, including, as applicable, (i) our business rationale for entering into the transaction; (ii) the available alternatives; (iii) whether the transaction is on terms comparable to those available to or from third parties; (iv) the potential for the transaction to lead to an actual or apparent conflict of interest; and (v) the overall fairness of the transaction to us.
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·
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On at least an annual basis, the Board or committee will monitor the transaction to assess whether it is advisable for us to amend or terminate the transaction.
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·
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Management or the affected director or executive officer will bring the matter to the attention of the Chairman of the Audit Committee or, if the Chairman of the Audit Committee is the affected director, to the attention of the Chairman of the Nominating and Corporate Governance Committee.
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·
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The appropriate Chairman shall determine whether the matter should be considered by the Board or by a committee of the Board consisting solely of disinterested directors.
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If a director is involved in the transaction, he or she will be recused from all discussions and decisions about the transaction.
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The transaction must be approved in advance whenever practicable and, if not practicable, must be ratified as promptly as practicable.
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If a transaction that has been entered into without prior approval is not ratified, the Board or committee may consider additional action, in consultation with counsel, including, but not limited to, with respect to transactions that are pending or ongoing, termination of the transaction on a prospective basis or modification of the transaction in a manner that would permit it to be ratified by the Board or committee, and with respect to transactions that are completed, rescission of such transaction and/or disciplinary action.
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Officer
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Age
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Position Held
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Stewart Zimmerman
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66
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Chairman of the Board and Chief Executive Officer
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William S. Gorin
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52
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President and Director
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Ronald A. Freydberg
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50
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Executive Vice President
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Craig L. Knutson
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51
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Executive Vice President
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Stephen D. Yarad
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41
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Chief Financial Officer
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Timothy W. Korth
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45
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General Counsel, Senior Vice President and Corporate Secretary
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Teresa D. Covello
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46
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Senior Vice President, Chief Accounting Officer and Treasurer
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Shira E. Finkel
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36
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Senior Vice President
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Kathleen A. Hanrahan
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45
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Senior Vice President
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·
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Extended the term of Mr. Zimmerman’s employment agreement through December 31, 2012;
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·
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Increased the amount of the annual performance-based bonus pool (the “Bonus Pool”), which is based on our achievement of pre-established Return on Average Equity (“ROAE”) targets, for Messrs. Zimmerman, Gorin and Freydberg (the “Senior Executives”) by 25.91% pursuant to the Compensation Committee’s discretionary authority;
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Increased the amount of the discretionary annual incentive bonus paid to Mr. Knutson; and
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Approved the issuance of time-based and performance-based RSUs that “cliff” vest over a two to four-year period and, in the case of the performance-based RSUs, will vest only if our “return to stockholders” hits pre-established goals over the vesting period.
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Attract, retain and motivate a highly-skilled senior executive team that will contribute to the successful performance of the Company;
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Align the interests of the senior executive team with the interests of our stockholders by motivating executives to increase long-term stockholder value;
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Provide compensation opportunities that are competitive within industry standards thereby reflecting the value of the position in the marketplace;
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Support a culture committed to paying for performance where compensation is commensurate with the level of performance achieved; and
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Maintain flexibility and discretion to allow us to recognize the unique characteristics of our operations and strategy and our prevailing business environment, as well as changing labor market dynamics.
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·
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Base salaries paid in cash which recognize the unique role and responsibilities of a position, as well as an individual’s performance in that role;
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·
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Annual cash awards which are meant to motivate and reward our short-term financial and operational performance, as well as individual performance; and
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·
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Long-term equity-based awards, including our RSU program, which are designed to support our objectives of aligning the interests of executive officers with those of our stockholders, promoting our long-term performance and value creation and retaining executive officers.
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Element
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Key Features
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Purpose
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1. Base Salary
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- Levels set periodically based on scope of the role, responsibilities of the position, individual performance and competitive market practices
- Annual discretionary increases may be considered based on performance and other factors
- Mr. Zimmerman receives a portion in an annual grant of restricted shares of Common Stock
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- Provides a base level of guaranteed compensation
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Element
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Key Features
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Purpose
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2. Annual Incentives
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- For the Senior Executives, based on the annual performance-based Bonus Pool determined by achievement of specified ROAE targets, subject to discretionary adjustments
- For Messrs. Yarad and Knutson, based on a discretionary determination of performance
- Delivered in a mix of cash and Restricted Shares that vest over a three to four year period
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- Provides an incentive to achieve annual financial and individual performance goals
- Portion delivered in Restricted Shares to ensure that annual performance is sustainable over time, further align interests with stockholders and encourage retention
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3. Long-Term Equity Awards
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- Periodic grants of stock-based awards with multi-year vesting requirements
- Available types of awards include stock options, Restricted Shares, RSUs, DERs and other stock-based awards
- Vesting may be time-based or performance-based
- RSU program includes an additional holding period after vesting until settlement
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- Provide long-term incentives tied to stock price
- Further aligns interests with stockholders and encourages retention
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·
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The Senior Executives participate in the performance-based Bonus Pool focused on the achievement of specified ROAE targets; and
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·
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The other Named Executive Officers are eligible for a discretionary annual incentive award based on a subjective assessment by the Compensation Committee of MFA’s annual performance and the annual performance of each individual executive.
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ROAE Targets
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Bonus Pool Range
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|||||||
Less than 4.5%
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$ | 750,000 | — | |||||
4.5% – 5%
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750,000 | $ | 950,000 | |||||
5% – 6%
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950,000 | 1,150,000 | ||||||
6% – 7%
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1,150,000 | 1,350,000 | ||||||
7% – 8%
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1,350,000 | 1,800,000 | ||||||
8% – 9%
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1,800,000 | 2,250,000 | ||||||
9% – 10%
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2,250,000 | 2,700,000 | ||||||
10% – 11%
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2,700,000 | 3,150,000 | ||||||
11% – 12%
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3,150,000 | 3,600,000 | ||||||
12% – 13%
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3,600,000 | 4,050,000 | ||||||
13% – 14%
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4,050,000 | 4,500,000 | ||||||
14% – 15%
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4,500,000 | 4,950,000 | ||||||
15% – 16%
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4,950,000 | 5,400,000 | ||||||
16% – 17%
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5,400,000 | 5,850,000 | ||||||
17% – 18%
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5,850,000 | 6,300,000 | ||||||
18% or more
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Minimum of $6,300,000
(subject to the
Discretionary Adjustment
of the Compensation
Committee)
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Portion of Bonus Pool
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Approximate Percentage of the
Bonus Pool Delivered in
Restricted Shares
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Less than $2,700,000
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25%
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$2,700,000 to $4,050,000
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35%
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Over $4,050,000
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50%
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2010 Base Salary
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||||||||
Cash
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Stock Grant
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|||||||
Stewart Zimmerman
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$ | 900,000 | $ | 100,000 | ||||
William S. Gorin
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800,000 | ¾ | ||||||
Stephen D. Yarad
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350,000 | ¾ | ||||||
Ronald A. Freydberg
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750,000 | ¾ | ||||||
Craig L. Knutson
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425,000 | ¾ |
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·
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As our Chief Executive Officer, Mr. Zimmerman was actively involved in the successful implementation of the investment and financing strategies which led to our double-digit 2010 ROAE (including the diversification of our residential MBS portfolio), exhibited key leadership skills in addressing our overall corporate management during 2010 and was responsible for the day-to-day oversight of our executives and other employees;
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·
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As our President, Mr. Gorin was actively involved in the successful implementation of the investment and financing strategies which led to our double-digit 2010 ROAE (including the diversification of our residential MBS portfolio), was instrumental in successfully establishing and executing our 2010
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·
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As one of our Executive Vice Presidents, Mr. Freydberg successfully performed the functions of head of information systems and operations and head of agency MBS and agency MBS execution in 2010 and was an integral part of successfully executing our 2010 business plan.
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Restricted Shares
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Cash
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Shares
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Value
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Total
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|||||||||||||
Stewart Zimmerman
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$ | 1,500,000 | 97,800 | $ | 800,000 | $ | 2,300,000 | |||||||||
William S. Gorin
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1,150,000 | 79,463 | 650,000 | 1,800,000 | ||||||||||||
Ronald A. Freydberg
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750,000 | 42,788 | 350,000 | 1,100,000 |
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·
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As one of our Executive Vice Presidents, Mr. Knutson successfully executed our non-agency MBS growth strategy in terms of contribution to earnings, asset performance and growth rate and, as head of our non-agency MBS portfolio, successfully managed our re-securitization activity as well as was in charge of the overall management of our non-agency financing activity.
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·
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For the Senior Executives, the Restricted Shares vest ratably over four years, with approximately 6.25% of the shares vesting on the last business day of each calendar quarter beginning with the quarter ended March 31, 2011 and ending with the quarter ending December 31, 2014. Dividends on these Restricted Shares accrue during the restriction period and are paid in full on the vesting date of the applicable shares.
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·
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For the other Named Executive Officers, the Restricted Shares vest ratably over three years, with 25% fully vested upon grant and the remaining 75% vesting equally on each of the next three anniversaries of the date of grant. Dividends are paid currently on all vested and unvested Restricted Shares.
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Time-Vested RSUs
(# of Units)
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Performance-Vested
RSUs
(# of Units)
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Stewart Zimmerman
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29,250 | 14,625 | ||||||
William S. Gorin
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56,500 | 28,250 | ||||||
Ronald A. Freydberg
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44,000 | 22,000 | ||||||
Stephen D. Yarad
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20,000 | 10,000 | ||||||
Craig L. Knutson
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54,500 | 27,250 |
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·
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Employment terms of reasonable length;
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·
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Cash severance benefits not exceeding three times salary and bonus and for our Senior Executives, other than Mr. Zimmerman, limited to one year of base salary for a pre-change in control qualifying termination; and
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·
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No tax gross-up payments, and a cutback of any “golden parachute” payments in case of a change in control to the extent necessary to avoid any golden parachute excise taxes.
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·
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annual base salaries for all employees, including the Named Executive Officers, are fixed in amount and determined or approved in advance by the Compensation Committee and/or the Board;
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·
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annual incentive compensation, which is discretionary and subjectively determined for all employees (other than the Bonus Pool for the Senior Executives), is determined or approved in advance by the Compensation Committee and/or the Board and is typically a balance of cash and, depending on employment position, time-vesting equity compensation, such as Restricted Shares, subject to forfeiture, in certain instances, upon termination of service; and
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·
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long-term incentive compensation is determined or approved in advance by the Compensation Committee and/or the Board and is typically time-vesting or performance-vesting equity compensation subject to forfeiture, in certain instances, upon termination of service and, in certain cases, subject to retention requirements.
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·
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the Compensation Committee’s right to apply, in any given year, the Discretionary Adjustment to adjust the aggregate Bonus Pool upward or downward in any year by as much as 30% based upon its assessment of certain company-related, market-related and individual performance factors;
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·
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the Bonus Pool is paid in a combination of cash and Restricted Shares with the specific allocation between cash and Restricted Shares based on the total size of the Bonus Pool (with more Restricted Shares being allocated as the size of the Bonus Pool increases);
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·
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these Restricted Shares are time vested and subject to forfeiture, in certain instances, upon termination of service and have specific retention requirements; and
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·
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the allocation of the Bonus Pool among the Senior Executives is based on the subjective evaluation of their leadership and performance by the Compensation Committee.
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Name and Principal Position
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Year
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Salary
($)(1)
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Bonus
($)(2)
|
Stock
Awards
($)(1)(3)(4)
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All Other
Compensation
($)(5)
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Total
($)
|
||||||||||||||||
Stewart Zimmerman,
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2010
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$ | 900,000 | $ | 1,500,000 | $ | 1,196,824 | $ | 9,800 | $ | 3,606,624 | |||||||||||
Chairman of the Board and
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2009
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900,000 | 1,607,003 | 984,888 | 9,800 | 3,501,691 | ||||||||||||||||
Chief Executive Officer
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2008
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900,000 | 1,029,375 | 458,315 | 9,200 | 2,396,890 | ||||||||||||||||
William S. Gorin,
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2010
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800,000 | 1,150,000 | 1,236,195 | 9,800 | 3,195,995 | ||||||||||||||||
President
|
2009
|
800,000 | 1,215,051 | 672,788 | 9,800 | 2,697,639 | ||||||||||||||||
2008
|
737,500 | 772,031 | 878,843 | 9,200 | 2,397,574 | |||||||||||||||||
Stephen D. Yarad,
|
2010(6)
|
100,625 | 40,000 | 227,500 | — | 368,125 | ||||||||||||||||
Chief Financial Officer
|
2009
|
— | — | — | — | — | ||||||||||||||||
2008
|
— | — | — | — | — | |||||||||||||||||
Ronald A. Freydberg,
|
2010
|
750,000 | 750,000 | 806,506 | 9,800 | 2,316,306 | ||||||||||||||||
Executive Vice President
|
2009
|
750,000 | 1,097,466 | 607,676 | 9,800 | 2,464,942 | ||||||||||||||||
2008
|
712,500 | 772,031 | 726,843 | 9,200 | 2,220,574 | |||||||||||||||||
Craig L. Knutson,
|
2010
|
425,000 | 750,000 | 915,443 | 9,800 | 2,100,243 | ||||||||||||||||
Executive Vice President
|
2009
|
406,250 | 400,000 | 762,719 | 9,800 | 1,578,769 | ||||||||||||||||
2008
|
237,500 | 165,000 | 102,350 | 9,200 | 514,050 |
(1)
|
Material terms of the employment agreements of the Named Executive Officers, other than Mr. Yarad who does not have an employment agreement, are provided under “Employment Contracts and Termination of Employment and Change-in-Control Arrangements” of this Executive Compensation section of the Proxy Statement.
|
(2)
|
Amounts in this column represent (a) for 2010, the cash component of the 2010 bonus awards that were paid to the Named Executive Officers on January 15, 2011, (b) for 2009, the cash component of the 2009 bonus awards that were paid to the Named Executive Officers on January 15, 2010 and (c) for 2008, the cash component of the 2008 bonus awards that were paid to the Named Executive Officers on January 15, 2009.
|
(3)
|
Amounts in this column represent the aggregate grant date fair value of such awards granted in the year indicated computed in accordance with FASB ASC Topic 718, but excluding the effect of estimated forfeitures. Amounts included in this column are comprised of (i) restricted shares of Common Stock granted by us on January 4, 2010 to Mr. Zimmerman pursuant to the terms of his employment agreement, (ii) Restricted Shares granted by us on December 16, 2010 and (iii) RSUs granted by us on December 15, 2010 under the 2010 Equity Compensation Plan. On December 16, 2010, each Named Executive Officer was granted Restricted Shares as a component of their incentive compensation. These Shares of Restricted Shares had a fair market value of $8.18 per share (based on the closing price of our Common Stock on the date of grant). The RSUs are comprised of (a) time-based (service condition) RSUs which are scheduled to vest in full on December 31, 2012 for Mr. Zimmerman and December 31, 2014 for the other Named Executive Officers (or earlier in the event of death, disability or termination of service with us for any reason other than cause or voluntary termination) and (b) performance-based RSUs which will only vest in full on December 31, 2012 for Mr. Zimmerman and on December 31, 2014 for the other Named Executive Officers provided that we have achieved a cumulative level of “return to stockholders” equal to (i) 20% over the two-year vesting period for Mr. Zimmerman and (ii) 40% over the four-year vesting period for the other Named Executive Officers. For purposes of this column, we have assumed such “return to stockholders” goal will be achieved. For a discussion of the assumptions underlying the calculation of the RSU values, see notes 2(i) and 12 in the consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2010.
|
(4)
|
Outstanding RSUs and vested unexercised stock options include DERs, which represent the right to receive a distribution on each DER equal to the cash dividend paid on a share of Common Stock. The right to receive these cash distributions was factored into the grant date fair value of these RSUs and stock options. The following sets forth the amount of cash distributions on DERs received by the Named Executive Officers in 2010:
|
Cash
Distributions on
DERs
|
||||
2010
|
($)
|
|||
Stewart Zimmerman
|
$ | 278,185 | ||
William S. Gorin
|
164,766 | |||
Stephen D. Yarad
|
¾ | |||
Ronald A. Freydberg
|
164,766 | |||
Craig L. Knutson
|
¾ |
(5)
|
Amounts in this column represent the employer matching contributions under the 401(k) Plan credited to the Named Executive Officers for 2010.
|
(6)
|
Mr. Yarad joined us on September 20, 2010. In July 2010, Mr. Yarad executed an offer of employment letter that, among other things, established the rate of his base salary and other elements of compensation, including certain guaranteed incentive awards for 2010 and 2011. Refer to the “Compensation Discussion and Analysis” of this Executive Compensation section of the Proxy Statement for additional information.
|
Type of
Award(1)
|
Grant Date
|
Date of
Compensation
Committee Action
|
Estimated
Future Payouts
Under Equity
Incentive Plan
Awards
Target(2)
(#)
|
All Other
Stock Awards:
Number of
Shares of
Stock or Units
(#)
|
Grant Date
Fair Value of
Stock and
Option
Awards(3)
(#)
|
|||||||||||||
Stewart Zimmerman
|
Salary
|
01/04/2010
|
04/26/2006(4)
|
¾ | 13,606 | $ | 100,957 | |||||||||||
RS
|
12/16/2010
|
12/15/2010(5)
|
¾ | 97,800 | 800,004 | |||||||||||||
TRSU
|
12/15/2010
|
12/15/2010(6)
|
¾ | 29,250 | 227,273 | |||||||||||||
PRSU
|
12/15/2010
|
12/15/2010
|
14,625 | ¾ | 68,591 | |||||||||||||
William S. Gorin
|
RS
|
12/16/2010
|
12/15/2010(5)
|
¾ | 79,463 | 650,007 | ||||||||||||
TRSU
|
12/15/2010
|
12/15/2010(6)
|
¾ | 56,500 | 439,005 | |||||||||||||
PRSU
|
12/15/2010
|
12/15/2010
|
28,250 | ¾ | 147,183 | |||||||||||||
Stephen D. Yarad
|
RS
|
12/16/2010
|
12/15/2010(7)
|
¾ | 2,445 | 20,000 | ||||||||||||
TRSU
|
12/15/2010
|
12/15/2010(6)
|
¾ | 20,000 | 155,400 | |||||||||||||
PRSU
|
12/15/2010
|
12/15/2010
|
10,000 | ¾ | 52,100 | |||||||||||||
Ronald A. Freydberg
|
RS
|
12/16/2010
|
12/15/2010(5)
|
¾ | 42,788 | 350,006 | ||||||||||||
TRSU
|
12/15/2010
|
12/15/2010(6)
|
¾ | 44,000 | 341,880 | |||||||||||||
PRSU
|
12/15/2010
|
12/15/2010
|
22,000 | ¾ | 114,620 | |||||||||||||
Craig L. Knutson
|
RS
|
12/16/2010
|
12/15/2010(7)
|
¾ | 42,788 | 350,006 | ||||||||||||
TRSU
|
12/15/2010
|
12/15/2010(6)
|
¾ | 54,500 | 423,465 | |||||||||||||
PRSU
|
12/15/2010
|
12/15/2010
|
27,250 | ¾ | 141,973 |
(1)
|
Type of Award:
|
|
Salary = annual stock grant paid as part of annual base salary
|
|
RS = Restricted Shares granted as part of annual incentive award
|
|
TRSU = Time-based RSUs granted as part of the 2010 RSU program
|
|
PRSU = Performance-based RSUs granted as part of the 2010 RSU program
|
(2)
|
This column shows the number of PRSUs granted as part of the 2010 RSU program. To become vested, the Company must achieve a specified level of “return to stockholders” for the applicable performance period beginning January 1, 2011 and ending December 31, 2012 for Mr. Zimmerman and December 31, 2014 for the other Named Executive Officers. The PRSUs provide for current payment of DERs paid during the vesting period. See “Compensation Discussion and Analysis” of this Executive Compensation section of the Proxy Statement for further discussion regarding the applicable “return to stockholder” goals and other material terms of the PRSU awards.
|
(3)
|
Amounts in this column represent the aggregate grant date fair value of such awards computed in accordance with FASB ASC Topic 718, but excluding the effect of estimated forfeitures. For PRSUs, the grant date fair value is based on the assumption that the performance vesting condition will be achieved. See footnote 3 of the Summary Compensation Table for additional details.
|
(4)
|
In accordance with the terms of Mr. Zimmerman’s employment agreement, originally approved by the Compensation Committee on April 24, 2006 and the second amended and restated employment agreement dated June 7, 2010, the date of his annual stock grant in 2010 was contractually set as the first business day of the year (January 4, 2010). In accordance with the terms of Mr. Zimmerman’s employment agreement, such shares of Common Stock became fully vested upon the date of grant; however, unless there is a termination of service, Mr. Zimmerman is not permitted to voluntarily or involuntarily sell, transfer, pledge, anticipate, alienate, encumber or assign such shares (or have such shares attached or garnished) until such time as the value of his stock holdings in us exceeds a multiple of five times his annual base compensation and, once this threshold is met, only in amounts having a value that exceeds that multiple.
|
(5)
|
In accordance with the terms of the applicable award agreements, the restriction period on such Restricted Shares shall lapse ratably, with respect to approximately 6.25% of such shares, on the last business day of each calendar quarter over a four-year period (beginning with the quarter ended March 31, 2011 and ending with the quarter ending December 31, 2014). Dividends on these Restricted Shares accrue during the restriction period and are paid in full on the vesting date of the applicable shares.
|
(6)
|
In accordance with the terms of the applicable award agreements, these TRSU awards “cliff” vest on (i) December 31, 2012, for Mr. Zimmerman and (ii) December 31, 2014 for the other Named Executive Officers. The TRSUs provide for current payment of DERs paid during the vesting period. See “Compensation Discussion and Analysis” of this Executive Compensation section of the Proxy Statement for further discussion regarding the other material terms of the TRSU awards.
|
(7)
|
In accordance with the terms of the applicable award agreements, 25% of such shares of Common Stock became fully vested upon the date of grant and, thereafter, with respect to the remaining 75%, restrictions will lapse on one-quarter of such shares on each of the next three anniversaries of the date of grant. Dividends on these Restricted Shares are paid in full on the vested and unvested portion of the applicable shares during the restriction period.
|
Outstanding Equity Awards at Fiscal 2010 Year End
|
||||||||||||||||||||||||||||||||
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
|
Equity
Incentive
Plan
Awards:
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)
|
Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(1)
|
||||||||||||||||||||||||
Stewart Zimmerman
|
185,000 | — | $ | 10.25 |
10/01/2013
|
— | — | — | — | |||||||||||||||||||||||
— | — | — | — | 33,752 | (3) | $ | 275,416 | — | — | |||||||||||||||||||||||
— | — | — | — | 88,392 | (4) | 721,279 | — | — | ||||||||||||||||||||||||
— | — | — | — | 97,800 | (5) | 798,048 | — | — | ||||||||||||||||||||||||
— | — | — | — | 29,250 | (6) | 238,680 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 14,625 | $ | 119,340 | ||||||||||||||||||||||||
William S. Gorin
|
100,000 | — | 10.25 |
10/01/2013
|
— | — | — | — | ||||||||||||||||||||||||
— | — | — | — | 37,500 | (7) | 306,000 | — | — | ||||||||||||||||||||||||
— | — | — | — | 25,313 | (3) | 206,554 | — | — | ||||||||||||||||||||||||
— | — | — | — | 66,834 | (4) | 545,365 | — | — | ||||||||||||||||||||||||
— | — | — | — | 79,463 | (5) | 648,418 | — | — | ||||||||||||||||||||||||
— | — | — | — | 56,500 | (6) | 461,040 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 28,250 | 230,520 | |||||||||||||||||||||||||
Stephen D. Yarad
|
— | — | — | — | 1,834 | (8) | 14,965 | — | — | |||||||||||||||||||||||
— | — | — | — | 20,000 | (6) | 163,200 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 10,000 | 81,600 | |||||||||||||||||||||||||
Ronald A. Freydberg
|
100,000 | — | 10.25 |
10/01/2013
|
— | — | — | — | ||||||||||||||||||||||||
— | — | — | — | 28,125 | (7) | 229,500 | — | — | ||||||||||||||||||||||||
— | — | — | — | 25,313 | (3) | 206,554 | — | — | ||||||||||||||||||||||||
— | — | — | — | 60,366 | (4) | 492,587 | — | — | ||||||||||||||||||||||||
— | — | — | — | 42,788 | (5) | 349,150 | — | — | ||||||||||||||||||||||||
— | — | — | — | 44,000 | (6) | 359,040 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 22,000 | 179,520 | |||||||||||||||||||||||||
Craig L. Knutson
|
— | — | — | — | 4,783 | (9) | 39,029 | — | — | |||||||||||||||||||||||
— | — | — | — | 11,621 | (10) | 94,827 | — | — | ||||||||||||||||||||||||
— | — | — | — | 46,878 | (11) | 382,524 | — | — | ||||||||||||||||||||||||
— | — | — | — | 32,091 | (8) | 261,863 | — | — | ||||||||||||||||||||||||
— | — | — | — | 54,500 | (6) | 444,720 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 27,250 | 222,360 | |||||||||||||||||||||||||
(1)
|
For purposes of this table, the market value of the unvested shares of restricted stock and unvested RSUs is deemed to be $8.16 per share, the closing price of the Company’s Common Stock on December 31, 2010 (the last trading day of the year).
|
(2)
|
In accordance with the terms of the applicable award agreements the PRSU awards “cliff” vest on (i) December 31, 2012 for Mr. Zimmerman and (ii) December 31, 2014 for the other Named Executive Officers provided that certain criteria related to “return to stockholders” are met. The PRSUs provide for current payment of the DERs paid during the vesting period. See “Compensation Discussion and Analysis” of this Executive Compensation section of the Proxy Statement for further discussion regarding the other material terms of the PRSU awards.
|
(3)
|
These stock awards were granted on December 11, 2008. Assuming continued employment with us, the restriction period on these shares shall lapse ratably, with respect to approximately 6.25% of such shares, on the last business day of each calendar quarter over a four-year period (beginning with the quarter ended March 31, 2009 and ending with the quarter ending December 31, 2012).
|
(4)
|
These stock awards were granted on December 17, 2009. Assuming continued employment with us, the restriction period on these shares shall lapse ratably, with respect to approximately 6.25% of such shares, on the last business day of each calendar quarter over a four-year period (beginning with the quarter ended March 31, 2010 and ending with the quarter ending December 31, 2013).
|
(5)
|
These stock awards were granted on December 16, 2010. Assuming continued employment with us, the restriction period on these shares shall lapse ratably, with respect to approximately 6.25% of such shares, on the last business day of each calendar quarter over a four-year period (beginning with the quarter ended March 31, 2011 and ending with the quarter ending December 31, 2014).
|
(6)
|
In accordance with the terms of the applicable award agreements, the time-based RSU awards “cliff” vest on (i) December 31, 2012 for Mr. Zimmerman and (ii) December 31, 2014 for the other Named Executive Officers. The RSUs provide for current payment of the DERs paid during the vesting period. See “Compensation Discussion and Analysis” of this Executive Compensation section of the Proxy Statement for further discussion regarding the other material terms of the RSU awards.
|
(7)
|
These stock awards were granted on August 13, 2008. Assuming continued employment with us, the restriction period on these shares shall lapse ratably, with respect to approximately 6.25% of such shares, on the last business day of each calendar quarter over a four-year period (beginning with the quarter ended September 30, 2008 and ending with the quarter ending June 30, 2012).
|
(8)
|
These stock awards were granted on December 16, 2010. Assuming continued employment with us, the restriction period on these shares lapses annually, with respect to approximately 25% of such shares, on each anniversary of the date of grant beginning with the initial 25% vesting on December 16, 2010 and ending December 16, 2014.
|
(9)
|
These stock awards were granted on December 11, 2008. Assuming continued employment with us, the restriction period on these shares lapses annually, with respect to approximately 25% of such shares, on each anniversary of the date of grant beginning with the initial 25% vesting on December 11, 2008 and ending December 11, 2011.
|
(10)
|
These stock awards were granted on December 17, 2009. Assuming continued employment with us, the restriction period on these shares lapses annually, with respect to approximately 25% of such shares, on each anniversary of the date of grant beginning with the initial 25% vesting on December 17, 2009 and ending December 17, 2012.
|
(11)
|
These stock awards were granted on August 26, 2009. Assuming continued employment with us, the restriction period on these shares shall lapse ratably, with respect to approximately 6.25% of such shares, on the last business day of each calendar quarter over a four-year period (beginning with the quarter ended September 30, 2009 and ending with the quarter ending June 30, 2013).
|
Option Exercises and Stock Vested in 2010
|
||||||||||||||||
Option Awards
|
Stock Awards
|
|||||||||||||||
Name
|
Number of
Shares Acquired
on Exercise
(#)
|
Value Realized Upon
Exercise
($)
|
Number of
Shares Acquired
on Vesting
(#)
|
Value Realized
on Vesting
($)
|
||||||||||||
Stewart Zimmerman
|
— | — | 61,940 | $ | 471,171 | |||||||||||
William S. Gorin
|
— | — | 61,074 | 467,061 | ||||||||||||
Stephen D. Yarad
|
— | — | 611 | 4,998 | ||||||||||||
Ronald A. Freydberg
|
— | — | 52,668 | 402,860 | ||||||||||||
Craig L. Knutson
|
— | — | 40,038 | 317,760 |
Name
|
Plan Type
|
Executive
Contributions
in Last Fiscal
Year
($)
|
Registrant
Contributions
in Last Fiscal
Year
($)
|
Aggregate
Earnings in
Last Fiscal
Year
($)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance at
Last Fiscal
Year End
($)
|
||||||||||||||||
Stewart Zimmerman
|
Deferred Plan
|
— | — | $ | 2,968 | $ | 22,414 | $ | 28,224 | |||||||||||||
2007 RSU Grant
|
— | $ | 944,447 | — | — | 944,447 | ||||||||||||||||
William S. Gorin
|
Deferred Plan
|
— | — | — | — | — | ||||||||||||||||
2007 RSU Grant
|
— | 637,500 | — | — | 637,500 | |||||||||||||||||
Stephen D. Yarad
|
Deferred Plan
|
— | — | — | — | — | ||||||||||||||||
2007 RSU Grant
|
— | — | — | — | — | |||||||||||||||||
Ronald A. Freydberg
|
Deferred Plan
|
— | — | — | — | — | ||||||||||||||||
2007 RSU Grant
|
— | 637,500 | — | — | 637,500 | |||||||||||||||||
Craig L. Knutson
|
Deferred Plan
|
— | — | — | — | — | ||||||||||||||||
2007 RSU Grant
|
— | — | — | — | — |
Name
|
Total
Amount
Deferred (1)
|
Distribution
January 15,
2010
|
Remaining
Deferred Amount
After 2010
Distribution(2)
|
Fair Market
Value of
Remaining
Amount (3)
|
||||||||||||
Non-Employee Directors
|
||||||||||||||||
Stephen R. Blank
|
$ | 86,657 | $ | 36,300 | $ | 50,357 | $ | 56,136 | ||||||||
James A. Brodsky
|
29,310 | 29,310 | — | — | ||||||||||||
Edison C. Buchanan
|
129,814 | 64,647 | 65,167 | 72,646 | ||||||||||||
Alan L. Gosule
|
64,647 | 64,647 | — | — | ||||||||||||
George H. Krauss
|
228,790 | 74,891 | 153,899 | 171,559 | ||||||||||||
Total
|
$ | 539,218 | $ | 269,795 | $ | 269,423 | $ | 300,341 |
(1)
|
Amounts in this column represent total compensation deferred and cash dividend equivalents credited to outstanding stock units from the inception of the Non-Employee Directors Plan, less any cash distributions made at the termination of any elected deferral and payment period before distributions made in 2010.
|
(2)
|
Amounts in this column represent total compensation deferred and cash dividend equivalents credited to outstanding stock units under the Deferred Plans after 2010 distributions.
|
(3)
|
Amounts in this column represent fair market value of total compensation deferred and cash dividend equivalents credited to outstanding stock units (based upon the closing price of the Common Stock of $8.16 per share reported on the NYSE on December 31, 2010 (the last trading day of the year)) under the Non-Employee Directors Plan at December 31, 2010.
|
|
·
|
Without Cause or For Good Reason. If Mr. Zimmerman’s employment is terminated by us without Cause or by him for Good Reason, he will be entitled to (i) a payment equal to three times the greater of his combined annual base compensation and performance bonus for the preceding fiscal year or the average of his combined annual base compensation and performance bonus for the three preceding fiscal years, (ii) the immediate full vesting of all of his outstanding stock options, with such stock options and related DERs remaining outstanding until the earlier of 90 days after such termination or the contractual expiration of such instruments had such termination not occurred, (iii) the immediate full vesting of all of his outstanding Restricted Shares and the payment of all dividends on such Restricted Shares, (iv) the immediate full vesting and settlement of all of his outstanding time-based RSUs and the payment of all dividends on such RSUs and (v) the pro rata vesting of his outstanding performance-based RSUs subject to the achievement of certain performance goals measured through the date of termination. In the event that Mr. Zimmerman’s employment with us was terminated on December 31, 2010 under one of these two scenarios, he would have been entitled to receive from us a payment estimated to be $12,785,246.
|
|
·
|
Change In Control. If Mr. Zimmerman’s employment is terminated (i) by us without Cause within two months before a Change In Control and following the occurrence of a Pre-Change-In-Control Event, (ii) by his resignation for any reason within six months following a
|
|
·
|
Death or Disability. If Mr. Zimmerman’s employment is terminated by reason of his death or Disability, he (or his legal representative or estate) will be entitled to (i) a payment equal to two times his current annual base compensation, (ii) the immediate full vesting of all of his outstanding stock options, with such stock options and related DERs remaining outstanding until the earlier of 90 days after such termination or the contractual expiration of such instruments had such termination not occurred, (iii) the immediate full vesting of all of his outstanding Restricted Shares and the payment of all dividends on such Restricted Shares, (iv) the immediate full vesting and settlement of all of his outstanding time-based RSUs and the payment of all dividends on such RSUs, (v) the pro rata vesting of his outstanding performance-based RSUs subject to the achievement of certain performance goals measured through the date of termination and (vi) in the event of his Disability only, the continued participation, at our expense, in our health insurance for the balance of the duration of the Disability (subject to certain limitations). In the event that Mr. Zimmerman’s employment with us was terminated on December 31, 2010 (a) by reason of his death, his estate would have been entitled to receive from us a payment estimated to be $4,301,878 or (b) by reason of his Disability, he or his legal guardian would have been entitled to receive from us a payment estimated to be $4,445,978 (assuming payment of health insurance until age 70).
|
|
·
|
Cause, Voluntarily Without Good Reason or Retirement. If Mr. Zimmerman’s employment is terminated (i) by us for Cause or (ii) at his own volition other than for Good Reason or as a result of his Retirement, he will be entitled to receive from us a payment estimated to be $80,985 for the distributions paid on the outstanding DERs at December 31, 2010. In addition, if Mr. Zimmerman’s employment is terminated as a result of his Retirement, all of his vested stock options and related DERs will remain outstanding for a 24-month period following his Retirement. In the event that Mr. Zimmerman’s employment with us was terminated on December 31, 2010 as a result of his Retirement, he would have been entitled to receive from us a payment estimated to be $347,800.
|
|
·
|
Without Cause or For Good Reason. If Mr. Gorin’s employment is terminated by us without Cause (which would include our determination not to renew his employment at the end of any applicable term) or by him for Good Reason, he will be entitled to (i) a payment equal to his current annual base compensation that would be payable from the date of such termination through the later of the contractual expiration of the stated term set forth in his employment agreement or the first anniversary of such termination, (ii) the immediate full vesting of all of his outstanding stock options, with such stock options and related DERs remaining outstanding until the earlier of 90 days after such termination or the contractual expiration of such instruments had such termination not occurred, (iii) the immediate full vesting of all of his outstanding Restricted Shares and the payment of all dividends, including accrued dividends, on such Restricted Shares, (iv) the immediate full vesting and settlement of all of his outstanding time-based RSUs and the payment of all dividends on such RSUs, (v) the pro rata vesting of his outstanding performance-based RSUs subject to the achievement of certain performance goals measured through the date of termination and (vi) the continued participation, at our expense, in our health insurance until the later of the contractual expiration of the stated term set forth in his employment agreement or the first anniversary of such termination. In the event that Mr. Gorin’s employment with us was terminated on December 31, 2010 under one of these two scenarios, he would have been entitled to receive from us a payment estimated to be $3,286,624.
|
|
·
|
Change In Control. If Mr. Gorin’s employment is terminated (i) by us without Cause within two months before a Change In Control and following the occurrence of a Pre-Change-In-Control Event, (ii) by his resignation for any reason within two and one-half months following a Change In Control, or (iii) by us other than for Cause or by his resignation for Good Reason within 12 months following a Change In Control, he will be entitled to (a) a payment equal to 300% of the sum of his current annual base compensation and his highest performance bonus received during one of the two immediately preceding years, (b) the immediate full vesting of all of his outstanding stock options, with such stock options and related DERs remaining outstanding until the earlier of 90 days after such termination or the contractual expiration of such instruments had such termination not occurred, (c) the immediate full vesting of all of his outstanding Restricted Shares and the payment of all dividends, including accrued dividends, on such Restricted Shares, (d) the immediate full vesting and settlement of all of his outstanding time-based RSUs and the payment of all dividends on such RSUs, (e) the pro rata vesting of his outstanding performance-based RSUs subject to achievement of certain performance goals measured through the date of termination and (f) the continued participation, at our expense, in all of our health insurance, life insurance, retirement and other benefit programs for the balance of the term of his employment agreement. In the event that Mr. Gorin’s employment with us was terminated on December 31,
|
|
·
|
Death or Disability. If Mr. Gorin’s employment is terminated by reason of his death or Disability, he (or his legal representative or estate) will be entitled to (i) a payment equal to his current annual base compensation, (ii) the immediate full vesting of all of his outstanding stock options, with such stock options and related DERs remaining outstanding until the earlier of 90 days after such termination or the contractual expiration of such instruments had such termination not occurred, (iii) the immediate full vesting of all of his outstanding Restricted Shares and the payment of all dividends, including accrued dividends, on such Restricted Shares, (iv) the immediate full vesting and settlement of all of his outstanding time-based RSUs and the payment of all dividends on such RSUs, (v) the pro rata vesting of his outstanding performance-based PRSUs subject to the achievement of certain performance goals measured through the date of termination, and (vi) in the event of his Disability only, the continued participation, at our expense, in our health insurance for the balance of the duration of the Disability (subject to certain limitations). In the event that Mr. Gorin’s employment with us was terminated on December 31, 2010 (i) by reason of his death, his estate would have been entitled to receive from us payments estimated to be $3,248,897 or (ii) by reason of his Disability, he or his legal guardian would have been entitled to receive from us payments estimated to be $3,717,220 (assuming payment of health insurance until age 65).
|
|
·
|
Cause or Voluntarily Without Good Reason. If Mr. Gorin’s employment is terminated (i) by us for Cause or (ii) at his own volition other than for Good Reason, he will be entitled to receive from us a payment estimated to be $61,776 for the distributions paid on the outstanding DERs at December 31, 2010.
|
|
·
|
Without Cause or For Good Reason. If Mr. Freydberg’s employment is terminated by us without Cause (which would include our determination not to renew his employment at the end of any applicable term) or by him for Good Reason, he will be entitled to (i) a payment equal to his current annual base compensation that would be payable from the date of such termination through the later of the contractual expiration of the stated term set forth in his employment agreement or the first anniversary of such termination, (ii) the immediate full vesting of all of his outstanding stock options, with such stock options and related DERs remaining outstanding until the earlier of 90 days after such termination or the contractual expiration of such instruments had such termination not occurred, (iii) the immediate full vesting of all of his outstanding Restricted Shares and the payment of all dividends, including accrued dividends, on such Restricted Shares, (iv) the immediate full vesting and settlement of all of his outstanding time-based RSUs and the payment of all dividends on such RSUs, (v) the pro rata vesting of his outstanding performance-based RSUs subject to the achievement of certain performance goals measured through the date of termination and (vi) the continued participation, at our expense, in our health insurance until the later of the contractual expiration of the stated term set forth in his employment agreement or the first anniversary of such termination. In the event that Mr. Freydberg’s employment with us was terminated on December 31, 2010 under one of these two scenarios, he would have been entitled to receive from us a payment estimated to be $2,667,435.
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Change In Control. If Mr. Freydberg’s employment is terminated (i) by us without Cause within two months before a Change In Control and following the occurrence of a Pre-Change-In-Control Event, (ii) by his resignation for any reason within two and one-half months following a Change In Control, or (iii) by us other than for Cause or by his resignation for Good Reason within 12 months following a Change In Control, he will be entitled to (a) a payment equal to 300% of the sum of his current annual base compensation and his highest performance bonus received during one of the two immediately preceding years, (b) the immediate full vesting of all of his outstanding stock options, with such stock options and related DERs remaining outstanding until the earlier of 90 days after such termination or the contractual expiration of such instruments had such termination not occurred, (c) the immediate full vesting of all of his outstanding Restricted Shares and the payment of all dividends, including accrued dividends, on such Restricted Shares,
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Death or Disability. If Mr. Freydberg’s employment is terminated by reason of his death or Disability, he (or his legal representative or estate) will be entitled to (i) a payment equal to his current annual base compensation, (ii) the immediate full vesting of all of his outstanding stock options, with such stock options and related DERs remaining outstanding until the earlier of 90 days after such termination or the contractual expiration of such instruments had such termination not occurred, (iii) the immediate full vesting of all of his outstanding Restricted Shares and the payment of all dividends, including accrued dividends, on such Restricted Shares, (iv) the immediate full vesting and settlement of all of his outstanding time-based RSUs and the payment of all dividends on such RSUs, (v) the pro rata vesting of his outstanding performance-based RSUs subject to the achievement of certain performance goals measured through the date of termination and (vi) in the event of his Disability only, the continued participation, at our expense, in our health insurance for the balance of the duration of the Disability (subject to certain limitations). In the event that Mr. Freydberg’s employment with us was terminated on December 31, 2010 (i) by reason of his death, his estate would have been entitled to receive from us payments estimated to be $2,629,708 or (ii) by reason of his Disability, he or his legal guardian would have been entitled to receive from us payments estimated to be $3,170,080 (assuming payment of health insurance until age 65).
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Cause or Voluntarily Without Good Reason. If Mr. Freydberg’s employment is terminated (i) by us for Cause or (ii) at his own volition other than for Good Reason, he will be entitled to receive from us a payment estimated to be $57,369 for the distributions paid on the outstanding DERs at December 31, 2010.
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Without Cause or For Good Reason. If Mr. Knutson’s employment is terminated by us without Cause (which would exclude our determination not to renew his employment at the end of any applicable term), he will be entitled to (i) a payment equal to the sum of (A) his current annual base compensation and (B) the average performance bonus payable to him with respect to the three immediately preceding years; provided that, if Mr. Knutson was not an employee of the Company during one or more of such three preceding years, such year(s) shall not be taken into
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Change In Control. If Mr. Knutson’s employment is terminated (i) by us without Cause (which would include our determination not to renew his employment at the end of any applicable term) within two months before a Change In Control and following the occurrence of a Pre-Change-In-Control Event, (ii) by his resignation for any reason within two and one-half months following a Change In Control, (iii) by us other than for Cause (which would include our determination not to renew his employment at the end of any applicable term) or by his resignation for Good Reason within 12 months following a Change In Control, he will be entitled to (a) a payment equal to the sum of his current annual base compensation and the average performance bonus payable to him with respect to the three immediately preceding years; provided that, if Mr. Knutson was not an employee of the Company during one or more of such three preceding years, such year(s) shall not be taken into account, (b) the immediate full vesting of all of his outstanding Restricted Shares and stock options, with such stock options and related DERs remaining outstanding until the earlier of 90 days after such termination or the contractual expiration of such instruments had such termination not occurred, (c) the immediate full vesting and settlement of all of his outstanding time-based RSUs and the payment of all dividends on such RSUs and (d) the pro rata vesting of his outstanding performance-based RSUs subject to achievement of certain performance goals measured through the date of termination. In the event that Mr. Knutson’s employment with us was terminated on December 31, 2010 under one of these three scenarios, he would have been entitled to receive from us a payment estimated to be $2,154,249.
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Death or Disability. If Mr. Knutson’s employment is terminated by reason of his death or Disability, he (or his legal representative or estate) will be entitled to (i) a payment equal to the sum of (A) his current annual base compensation and (B) the average performance bonus payable to him with respect to the three immediately preceding years; provided that, if Mr. Knutson was not an employee of the Company during one or more of such three preceding years, such year(s) shall not be taken into account, (ii) the immediate full vesting of all of his outstanding Restricted Shares and stock options, with such stock options and related DERs remaining outstanding until the earlier of 90 days after such termination or the contractual expiration of such instruments had such termination not occurred, (iii) the immediate full vesting and settlement of all of his outstanding time-based RSUs and the payment of all dividends on such RSUs and (iv) the pro rata vesting of his outstanding performance-based RSUs subject to the achievement of certain performance goals measured through the date of termination. In the event that Mr. Knutson’s employment with us was terminated on December 31, 2010 (i) by reason of his death, his estate would have been entitled to receive from us payments estimated to be $2,154,249 or (ii) by reason of his Disability, he or his legal guardian would have been entitled to receive from us payments estimated to be $2,154,249.
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Cause or Voluntarily Without Good Reason. If Mr. Knutson’s employment is terminated (i) by us for Cause or (ii) at his own volition other than for Good Reason, he will be entitled to receive from us a payment estimated to be $19,211 for the distributions paid on the outstanding DERs at December 31, 2010.
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Common Stock Beneficially Owned
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Name and Business Address(1)
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Shares(2)(3)
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Shares Subject to
Stock Options(4)
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Total
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Percent of Class
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Directors and Officers
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Stewart Zimmerman
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593,982 | 185,000 | 778,982 | * | ||||||||||||
William S. Gorin
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514,445 |