Risk and Compensation
We believe our compensation programs for executive officers are designed to encourage prudent risk taking to achieve long-term shareholder value. A variety of principles and practices contribute to the
alignment of our executive compensation programs with our overall risk profile, including:
|
|
|
|
|
Principle
|
|
|
|
Practice
|
|
|
Governance
|
|
all Compensation Committee members are independent, non-employee Board
members
|
|
|
Program Design
|
|
our programs are designed to drive achievement of our
strategic objectives, short- and long-term financial performance, and growth in shareholder value, while also promoting the attraction and retention of executive talent
our programs balance strategic, financial and shareholder measures
our programs balance
short- and long-term performance and cash and equity compensation
the vesting periods of long-term incentives provide long-term alignment with shareholders
maximum amounts payable are established under performance-based incentive
programs
|
|
|
Program Implementation and Management
|
|
our Compensation Committee establishes both strategic and
financial measures at the beginning of a performance period and evaluates them at the end of a performance period
our Compensation Committee annually reviews all elements of executive compensation, with
the assistance of our independent compensation consultant
base salaries and annual adjustments for executive officers other than Mrs. Boyle and Mr. Boyle generally are based on market practices and our financial condition and aim to
provide total compensation that is competitive with other companies in our industry
annual cash incentive payouts have varied over time, commensurate with business and individual executive performance
long-term incentive
payouts have varied over time based on both the companys financial performance and stock price performance, which align management interests with shareholder interests by tying executive officer compensation in part to long-term shareholder
returns
our executive compensation program processes are consistent with those established by the
Compensation Committee and are monitored by the companys human resources, finance and legal functions
|
23
Components of compensation
We have a relatively simple compensation program. For 2013, our compensation program for named executive officers included the following
four main components:
|
|
|
annual, short-term incentive compensation;
|
|
|
|
long-term cash incentive compensation; and
|
|
|
|
long-term, equity-based incentive compensation consisting of stock options and performance-based and time-based RSUs.
|
These components constitute what we refer to as total direct compensation with respect to each named executive officer. We
also provide compensation in the form of various other employee benefits and perquisites that are available to all our U.S. employees. Each of these elements helps us achieve the objectives of our compensation program, and we believe that, together,
they have been and will continue to be effective in achieving our overall objectives.
Compensation process
The Board of Directors or the Compensation Committee makes all executive officer compensation decisions. Each year, the Committee reviews
and evaluates the compensation paid to our executive officers and determines the base salary, target bonus and the long-term cash and equity related grants for each executive officer.
The use and weight of each compensation component is based on a subjective determination by the Compensation Committee of the importance
of each component in meeting our overall objectives. In general, we seek to put a significant amount of each named executive officers potential total direct compensation at risk based on corporate, individual and stock price
performance. As a result, compensation paid on an ongoing, current basis in the form of base salary, benefits and perquisites generally represents less than half of each named executive officers potential total direct compensation at target
performance levels. We believe annual compensation paid to our named executive officers, other than Mrs. Boyle and Mr. Boyle, in the form of cash generally should represent approximately 60% to 65%, and consequently non-cash compensation
generally should represent approximately 35% to 40%, of each named executive officers potential total compensation at target performance levels. Our President and CEO, who currently holds approximately 41% of our outstanding Common Stock, and
our Chairman, who currently holds approximately 15% of our outstanding Common Stock, have not historically received, and in 2013 did not receive, any equity compensation awards.
Although we do not engage in traditional benchmarking, as part of our process for determining compensation, we
review compensation analyses provided by our independent compensation consultant, PricewaterhouseCoopers LLP, as described in more detail below, that include an estimate of the 25
th
percentile, median and 75
th
percentile positions for base salary, target total cash compensation (base salary plus target bonus), and target total
direct compensation (base salary plus target bonus plus equity related grants) for each of our named executive officers. In determining competitive, reasonable and appropriate levels of compensation, the Compensation Committee subjectively considers
the relationship between the amount of compensation and the approximate median for each of these compensation measures. The Committee also considers several other factors when determining appropriate compensation levels for each executive officer,
including:
|
|
|
the Committees analyses of competitive compensation practices;
|
|
|
|
individual performance and contributions to financial goals such as sales revenue and operating margin;
|
|
|
|
individual leadership, expectations, expertise, skills and knowledge;
|
|
|
|
labor market conditions; and
|
|
|
|
advice from our independent compensation consultant.
|
24
The Committees approach to evaluating these factors is subjective and not formulaic,
and the Compensation Committee may place more or less weight on a particular factor when determining an executive officers compensation.
In determining the total compensation for each executive officer, the Compensation Committee considers the specific recommendations of our President and CEO and our Vice President of Global Human
Resources and other factors it deems relevant. Recommendations to the Committee typically include discussion of the role and responsibilities of the executive officer within the company, the performance of the executive officer, the expected future
contributions of the executive officer, the executive officers own expectations, and competitive and market considerations. Although our President and CEO and our Vice President of Global Human Resources make recommendations regarding the
executive officers, neither participates in the discussions concerning his or her own compensation. Our President and CEO typically does not make recommendations regarding his own compensation, which is solely the responsibility of the Committee.
However, in 2013, Mr. Boyle requested that his annual base salary be reduced to $1,000 in part in response to broad cost reduction measures implemented by the company in the first quarter of 2013, and the Committee agreed to this request.
The Compensation Committee considers, in addition to the factors described above:
|
|
|
the individuals accumulated vested and unvested equity awards;
|
|
|
|
the current value and potential value over time using stock appreciation assumptions for vested and unvested equity awards;
|
|
|
|
the vesting schedule of the individuals outstanding equity awards;
|
|
|
|
a comparison of individual equity awards between executive officers and in relation to other compensation elements;
|
|
|
|
total accounting expense as part of its annual evaluation of executive compensation; and
|
|
|
|
shareholders advisory votes on executive compensation.
|
The amount of past compensation, including annual bonus awards and amounts realized or realizable from prior equity awards, is considered
but is generally not the most significant factor in the Committees evaluation because bonuses are awarded for annual performance and equity awards are granted as part of the target total direct compensation the Committee establishes each year.
Competitive survey information
The Committee reviews multiple compensation survey sources analyzed by its independent compensation consultant, including general industry surveys, retail/wholesale surveys, and apparel industry surveys.
Data represented in these surveys are submitted confidentially by participating companies. Each survey provides a comprehensive list of all companies that participated in the survey, but compensation information is reported statistically without
identifying company participants by name. We do not benchmark against specific companies or a specific peer group of companies. We participate in the Towers Watson (retail/wholesale and general industry) and IPAS
®
(apparel/footwear retail industry) specialty surveys. Our independent compensation consultant compiles the data from
these sources and from surveys purchased from Mercer Human Resource Consulting (general industry) and Towers Watson (general industry). These surveys include participating companies that are both smaller and larger than us based on annual revenues
and market capitalization. We generally focus on a subset of companies within a comparable range of revenues (typically between 50% and 200% of our annual revenues) or apply revenue-based regression analysis to the survey data for comparability
purposes. The result of our analysis is an approximate market composite for each element of compensation for each executive officer. Although the Committee does not use this data formulaically, it considers the median, or 50
th
percentile, of the composite data as one among many factors in its
subjective analysis regarding the appropriate amounts and types of executive compensation.
25
Tax deductibility
Section 162(m) of the Internal Revenue Code limits the amount that we may deduct for compensation paid to our President and CEO and to each of our three most highly compensated officers (other than
the President and CEO and the Chief Financial Officer) to $1,000,000 per person in any year. Compensation that qualifies as performance-based is excluded for purposes of calculating the amount of compensation subject to the $1,000,000
limit.
The Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m)
when determining the compensation of executive officers. Compensation paid under our executive officer incentive plans is generally designed in a manner intended to satisfy the requirements under Section 162(m) for qualified performance-based
compensation. In some circumstances, however, the Committee may approve compensation that will not meet such requirements as a means to ensure competitive levels of total compensation for our executive officers and promote varying corporate goals.
For example, in 2011, the Committee awarded Mr. Timm, a one-time $1 million (grant date fair value) extraordinary long-term equity award of which a portion may not be deductible under Section 162(m). In any event, the Committee intends to
maintain an approach to executive officer compensation that strongly links pay to performance.
Analysis of 2013 named executive officer
compensation
General
Our competitive compensation analyses for 2013 identified relevant market survey data for all our named executive officers except Mrs. Boyle. The Compensation Committee, with the concurrence of our
independent compensation consultant, determined that the available competitive market survey data did not adequately reflect Mrs. Boyles role, scope of work and responsibilities. Mrs. Boyle plays a prominent role in our civic and
community relations activities. The Committee determined that establishing Mrs. Boyles target total direct compensation relative to that of our President and CEO is an appropriate approach in the absence of relevant competitive market
survey data. For 2013, the Committee determined that Mrs. Boyles target total direct compensation should be approximately between 60% and 70% of our President and CEOs target total direct compensation.
26
The 2013 Target Total Direct Compensation table below summarizes the target total direct
compensation levels established by the Compensation Committee. Following the table, we discuss each compensation element summarized in the table.
2013 Target Total Direct Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Annual Salary
($)(1)
|
|
|
Target Bonus
(as a % of
Annual Salary)
|
|
|
Target Total Cash
Compensation(2)($)
|
|
|
Target Equity
Incentive
Compensation(3)($)
|
|
|
Target Total Direct
Compensation(4)($)
|
|
Timothy P. Boyle
President and CEO
|
|
|
1,000
|
|
|
|
95,150
|
%
|
|
|
1,257,000
|
|
|
|
|
|
|
|
1,257,000
|
|
|
|
|
|
|
|
Gertrude Boyle
Chairman of the Board
|
|
|
424,000
|
|
|
|
100
|
%
|
|
|
848,000
|
|
|
|
|
|
|
|
848,000
|
|
|
|
|
|
|
|
Bryan L. Timm
Executive Vice President and COO
|
|
|
550,800
|
|
|
|
70
|
%
|
|
|
936,360
|
|
|
|
700,086
|
|
|
|
1,636,446
|
|
|
|
|
|
|
|
Thomas B. Cusick
Senior Vice President and Chief Financial Officer
|
|
|
420,000
|
|
|
|
50
|
%
|
|
|
630,000
|
|
|
|
400,061
|
|
|
|
1,030,061
|
|
|
|
|
|
|
|
Peter J. Bragdon
Senior Vice President of Legal and Corporate Affairs, General Counsel and Secretary
|
|
|
355,000
|
|
|
|
50
|
%
|
|
|
532,500
|
|
|
|
300,073
|
|
|
|
832,573
|
|
(1)
|
Reflects adjustments made in connection with cost reduction measures, resulting in an annual base salary of $1,000 for Mr. Boyle. Mrs. Boyles annual
base salary remained at 50% of her 2011 annual base salary.
|
(2)
|
Target Total Cash Compensation equals the sum of annual salary plus target bonus. For Mr. Boyle, Target Total Cash Compensation equals the sum of annual salary,
the target long-term incentive cash award described below under Long-term cash and equity-based incentives, and target bonus based on pre-adjusted 2011 base salary levels. For Mrs. Boyle, Target Total Cash Compensation equals
the sum of annual salary and target bonus based on pre-adjusted 2011 base salary levels.
|
(3)
|
Target Equity Incentive Compensation equals the estimated and probable fair value of 2013 stock options and time-based and performance-based RSU awards.
|
(4)
|
Target Total Direct Compensation equals the sum of annual salary plus target bonus plus the estimated and probable fair value of 2013 stock options and time-based and
performance-based RSU awards. For Mr. Boyle, Target Total Direct Compensation equals the sum of annual salary, the target long-term incentive cash award described below under Long-term cash and equity-based incentives, and target
bonus based on pre-adjusted 2011 base salary levels. For Mrs. Boyle, Target Total Direct Compensation equals the sum of annual salary and target bonus based on pre-adjusted 2011 base salary levels.
|
As part of the Committees analysis in establishing 2013 compensation, it noted that, assuming that the target bonus levels and
equity-based incentives performance targets were achieved for Messrs. Timm, Cusick and Bragdon, total direct compensation (annual salary plus target bonus plus the estimated and probable fair value of equity incentives) was in a range between -7%
and 8% compared to the competitive median. Mr. Boyles total direct compensation was substantially below the competitive market median, reflecting the reduction in Mr. Boyles annual base salary to $1,000 for 2013 and the fact
that Mr. Boyle does not receive grants of equity-based incentives because he owns a substantial amount of our Common Stock.
27
Excluding our Chairman and our President and CEO, neither of whom received equity-based
incentives, the total direct compensation of our named executive officers for 2013 consisted, on average, of the following proportions of components: 38% in base salary, 22% in target short-term incentive compensation, and 40% in equity-based
incentives. We believe that our compensation program for named executive officers is aligned with shareholders interests as a result of the significant variable and long-term structure of target total direct compensation, and the manner in
which the variable compensation is determined.
Base salary
We provide an annual base salary to each named executive officer based in large part on job responsibility, experience level, individual performance, and the amount and nature of the other compensation
paid to the named executive officer. The Compensation Committee reviews each named executive officers salary annually and makes adjustments when appropriate to reflect competitive market factors and the individual factors described above under
Compensation process. In 2013, the Committee reduced the annual base salary of Mr. Boyle to $1,000 for 2013 and maintained Mrs. Boyles annual base salary at 50% of her 2011 annual salary. Mr. Boyle requested these
salary decisions in part in response to broad cost reduction measures implemented by the company in the first quarter of 2013, and the Committee agreed to these requests.
Short-term incentive compensation
We have established an Executive
Incentive Compensation Plan for executive officers that provides for the payment of annual cash bonuses to motivate and reward achievement of corporate and personal objectives. We may also award discretionary cash bonuses. Any discretionary cash
bonuses are made outside of the Executive Incentive Compensation Plan. The Compensation Committee elected to award discretionary cash bonuses to our named executive officers, other than our Chairman and our President and CEO, as an additional
component of our 2013 compensation program, as further described below in the paragraph immediately preceding the 2013 Actual Bonuses table.
The following table summarizes the various components of the potential 2013 bonus payouts under the plan as approved by the Committee.
2013 Target Bonus Components
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Target
Bonus
(as a % of
Annual
Salary)(1)
|
|
|
Company
Performance
Component
(as a % of
Actual
Bonus)
|
|
|
Individual
Performance
Component
(as a % of
Actual
Bonus)(2)
|
|
|
Individual
Performance
Component
(as a % of
Annual
Salary)(2)
|
|
|
Threshold
Company
Performance
Component
(as a %
of
Annual Salary)(3)
|
|
|
Target
Company
Performance
Component
(as a % of
Annual
Salary)
|
|
|
Stretch
Company
Performance
Component
(as a % of
Annual
Salary)(4)
|
|
Timothy P. Boyle
President and CEO
|
|
|
95,150
|
%
|
|
|
80
|
%
|
|
|
20
|
%
|
|
|
19,030
|
%
|
|
|
20,760
|
%
|
|
|
76,120
|
%
|
|
|
152,240
|
%
|
|
|
|
|
|
|
|
|
Gertrude Boyle
Chairman of the Board
|
|
|
100
|
%
|
|
|
80
|
%
|
|
|
20
|
%
|
|
|
20
|
%
|
|
|
40
|
%
|
|
|
80
|
%
|
|
|
160
|
%
|
|
|
|
|
|
|
|
|
Bryan L. Timm
Executive Vice President and COO
|
|
|
70
|
%
|
|
|
80
|
%
|
|
|
20
|
%
|
|
|
14
|
%
|
|
|
28
|
%
|
|
|
56
|
%
|
|
|
112
|
%
|
|
|
|
|
|
|
|
|
Thomas B. Cusick
Senior Vice President and Chief Financial Officer
|
|
|
50
|
%
|
|
|
80
|
%
|
|
|
20
|
%
|
|
|
10
|
%
|
|
|
20
|
%
|
|
|
40
|
%
|
|
|
80
|
%
|
|
|
|
|
|
|
|
|
Peter J. Bragdon
Senior Vice President of Legal and Corporate Affairs, General Counsel and Secretary
|
|
|
50
|
%
|
|
|
80
|
%
|
|
|
20
|
%
|
|
|
10
|
%
|
|
|
20
|
%
|
|
|
40
|
%
|
|
|
80
|
%
|
28
(1)
|
The annual base salary for Mr. Boyle was reduced, at his request in connection with general cost reduction measures, to $1,000, and the annual base salary of
Mrs. Boyle remained at 50% of her 2011 annual salary. The target bonus (as a percentage of annual base salary) for each of Mrs. Boyle and Mr. Boyle was preserved based on pre-adjusted base salary levels so that their 2013 total target
bonus payments would be comparable to their respective 2011 total target bonus payments if corporate and personal target objectives were achieved in 2013.
|
(2)
|
The Individual Performance Component is paid out to the extent individual performance objectives are met or exceeded and company performance is at least 65% of the
pre-tax income target established by the Compensation Committee.
|
(3)
|
The Threshold Company Performance Component is paid out if 80% of the pre-tax income target set by the Compensation Committee is achieved, and constitutes the minimum
company performance component required by the Compensation Committee.
|
(4)
|
The Stretch Company Performance Component is paid out if 120% of the pre-tax income target set by the Compensation Committee is achieved, and constitutes the maximum
company performance component.
|
We considered market composite data as one among many factors in our subjective
analysis regarding the appropriate bonus target for each executive officer. Our President and CEOs target bonus amount constitutes a greater percentage of his base salary than the other named executive officers in part because of the reduction
in his annual base salary to $1,000 for 2013, and in part because, unlike the other named executive officers (excluding our Chairman), our President and CEO to date has not received equity compensation awards. Assuming the target bonus levels were
achieved, Mr. Boyles total cash compensation (annual salary plus target long-term incentive cash award plus target bonus) for 2013 was 19% below the competitive market median total cash compensation. Mrs. Boyles total cash
compensation was set at approximately 67% of our President and CEOs total cash compensation and also maintained a 50% reduction in annual base salary compared to her 2011 annual salary. Total cash compensation for each of our other named
executive officers was in a range between
-4%
and 9% compared to the market median of the competitive market data reviewed by the Compensation Committee.
The amount of the actual cash bonus paid under the plan to each named executive officer is based on the extent to which the company meets
or exceeds a company performance target set by the Compensation Committee and the named executive officer meets or exceeds individual performance objectives. The company performance component for 2013 was based on achieving a specified level of
pre-tax net income, excluding bonus payments and specified extraordinary items, to align with our strategic plan and expectations regarding our performance. For 2013, the pre-tax income target set by the Committee was $154,835,000 before income tax
and bonus expense and excluding specific extraordinary items.
Over the past five years, we have achieved:
|
|
|
performance in excess of the company performance target three times, but have not achieved the maximum, stretch performance level; and
|
|
|
|
an average payout percentage of 104% of the company performance target award opportunity for the five years in which the minimum threshold was met and
a payout was made.
|
The Committee intends to set the threshold and stretch company performance target levels
so that the relative difficulty of achieving the company performance target level is consistent from year to year.
The
remaining 20% of the total bonus was based on the named executive officers individual performance during the year. The maximum individual performance component is limited to 20%. The individual performance objectives, other than those of the
President and CEO, were set early in 2013 by our President and CEO and consist of financial, operational, brand and product, and personal goals. The amount of actual cash bonus paid to each named executive officer under this portion of the bonus is
based in large part on our President and CEOs assessment of the named executive officers performance against those objectives. The Committee makes its own determination about whether Mr. Boyle has met or exceeded his individual
performance objectives, which were
29
set early in 2013 by the Committee and consist of short-term operational goals, long-term strategic goals, and leadership objectives. To the extent that a named executive officer has met or
exceeded the individual performance objectives and company performance was at least 65% of the pre-tax income target under the Executive Incentive Compensation Plan, the Committee may award to the named executive officer this portion of the bonus
amount based on achievement of the individual performance objectives. If the Committee determines that a named executive officer has not met the individual performance objectives, the corresponding bonus amount may be reduced or eliminated.
For 2013, we achieved net income of 117.1% of the company performance target set by the Compensation Committee. Accordingly,
the company performance component was earned and payable, and the individual performance component was eligible to be payable, under the plan. The table below summarizes the actual bonus payouts for 2013. Based on the President and CEOs
assessments, each of the named executive officers, other than the Chairman and the President and CEO, were awarded 100% of his individual performance component target bonus. Based on the Committees assessment of each of the Chairman and the
President and CEOs performance for 2013, the Committee awarded the Chairman 100% of her individual performance component target bonus, and the Committee awarded the President and CEO 100% of his individual performance component target bonus.
In 2014, the Compensation Committee elected to award discretionary cash bonuses, outside of the Executive Incentive
Compensation Plan, to our named executive officers, other than our Chairman and our President and CEO. These discretionary cash bonuses were awarded in acknowledgement of extraordinary events in the fourth quarter of 2013, primarily the negative
effect asset impairment charges had on our operating income, that in turn negatively affected our ability to achieve the pre-established minimum company performance targets for the long-term equity-based incentive awards for the 2011-2013
performance period, as further described below under Long-term cash and equity-based incentives. These discretionary bonuses are consistent with the earned and payable value related to the long-term equity incentive awards for the
performance period, had the asset impairment charge been excluded.
2013 Actual Bonuses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Individual
Performance
Component of
Plan Bonus ($)
|
|
|
Company
Performance
Component of
Plan Bonus ($)
|
|
|
Discretionary
Bonus ($)
|
|
|
Total Bonus ($)
|
|
Timothy P. Boyle
President and CEO
|
|
|
190,300
|
|
|
|
1,412,026
|
|
|
|
|
|
|
|
1,602,326
|
|
|
|
|
|
|
Gertrude Boyle
Chairman of the Board
|
|
|
84,800
|
|
|
|
629,216
|
|
|
|
|
|
|
|
714,016
|
|
|
|
|
|
|
Bryan L. Timm
Executive Vice President and COO
|
|
|
77,112
|
|
|
|
572,171
|
|
|
|
101,886
|
|
|
|
751,169
|
|
|
|
|
|
|
Thomas B. Cusick
Senior Vice President and Chief Financial Officer
|
|
|
42,000
|
|
|
|
311,640
|
|
|
|
73,334
|
|
|
|
426,974
|
|
|
|
|
|
|
Peter J. Bragdon
Senior Vice President of Legal and Corporate Affairs, General Counsel and Secretary
|
|
|
35,500
|
|
|
|
263,410
|
|
|
|
53,940
|
|
|
|
352,850
|
|
30
Long-term cash and equity-based incentives
Equity-based incentives represent a direct link between executive officer compensation and shareholder returns. In light of this, we
believe that offering equity incentives to our executive officers that become more valuable if the market price of our Common Stock increases provides an appropriate additional incentive to the executive officers to work toward this goal. Our equity
awards to named executive officers, excluding our Chairman and our President and CEO who do not receive equity awards, take the form of stock options and both performance-based and time-based RSUs.
Stock options are a primary component of our long-term incentive compensation awards. Stock options offer the possibility of substantial
gains if our stock appreciates significantly, but no value and little incentive if our stock price drops. Stock options granted under our equity compensation plan have exercise prices not less than 100% of the closing market price of our Common
Stock on the date of the option grant. RSUs, both time-based and performance-based, offer similar incentives to stock options since they reward increases in the market price of our Common Stock, and in that way tie the interests of executive
officers to our shareholders interests. Unlike stock options, however, these awards can provide retention value even if our stock price does not increase, and also subject executive officers to the same downside risk experienced by
shareholders. We also believe that RSUs and restricted stock are being used increasingly by other companies as significant equity incentives for executives and we need to offer these types of incentives to remain competitive in attracting and
retaining executive officers.
We have established appropriate written policies and practices regarding the timing and pricing
of equity awards and do not time equity incentive grants in connection with the release of material non-public information.
The Compensation Committee has established the following mix of forms of annual equity awards for named executive officers, other than
our Chairman and our President and CEO, for delivering the expected value of overall long-term incentives:
|
|
|
|
|
Expected % of Equity Value
|
Stock Options
|
|
45%
|
Performance-Based Restricted Stock Units
|
|
30%
|
Time-Based Restricted Stock Units
|
|
25%
|
Total
|
|
100%
|
We chose these types of awards and established this weighting based on the recommendation of our
independent compensation consultant to provide an effective incentive for the executive officers, particularly in light of prevailing economic uncertainty. The Compensation Committee awarded a competitive value of RSUs and stock options that, when
added to the particular named executive officers target total cash compensation, resulted in a target total direct compensation level that the Committee determined was reasonable and appropriate. We do not believe that the estimated fair value
of our equity-based incentives reflected in the Summary Compensation Table and the 2013 Grants of Plan-Based Awards Table is a measure of the compensation actually received or that may be received by our named executive officers. The potential
appreciation in the value of these equity-based incentives if the market price of our Common Stock increases is designed to motivate our executive officers.
In 2013, the Company comprehensively reviewed its go-to-market strategy and as part of that process, hired several key executives during the year. In light of these activities, and reflective of the
importance of awarding performance-based RSUs as a means of linking pay to multi-year operating performance for executive officers, the Committee delayed the 2013 grant of performance-based RSUs until December 2013, following the hiring of these key
positions and the development of a revised strategic plan. Because of the delayed timing of these grants, the performance-based RSUs granted to the named executive officers in 2013 are based on a two-year performance cycle, from 2014 through 2015
(instead of a three-year performance cycle).
31
The Committee also made a separate, long-term incentive cash award to our President and CEO
in December 2013. For the past two years, the Committee reduced Mr. Boyles base salary, but, as described above, has maintained his annual incentive compensation target. Further, as noted above, Mr. Boyle has never received any equity grants
under the Companys compensation programs. The long-term incentive cash award is intended to tie a portion of Mr. Boyles compensation to the same multi-year operating goals to which the vesting of performance-based RSU awards for other
executive officers are subject.
The number of performance-based RSUs that vest, and the percentage of
Mr. Boyles long-term incentive cash award that vests, are determined by reference to achievement of specified performance goals during the performance period. Similar to 2012, for performance-based RSU grants for the 2014 through 2015
performance period, if cumulative operating income and average return on invested capital are realized above minimum levels, each named executive officer may be awarded from 0% to 195% of the number of shares targeted, depending on the relative
achievement of the target levels. If minimum levels of cumulative operating income and average return on invested capital are not met, rather than the RSUs being forfeited, a percentage of the RSUs nonetheless will vest if our average operating
margin over the 2014 through 2015 period exceeds the 25
th
percentile rank relative to a two-year average operating margin of a specified peer group of companies. Generally, the Compensation Committee intends to set the minimum and maximum levels of cumulative operating income and average return on invested
capital so that the relative difficulty of achieving these levels is consistent over each performance period; however, volatile economic conditions and a significant shift in our business model have increased the uncertainty of our planning and
forecasts and the relative difficulty of establishing appropriate targets. The Committee intended that the secondary measure of relative two-year average operating margin performance against an industry peer group would provide a means of earning
performance shares during periods of significant volatility and provide a reward for managing through difficult business cycles, controlling for industry effects. Under this secondary performance measure, if Columbias two-year average
operating margin is below the 25
th
percentile of the peer
group, no RSUs vest. The percentage of the shares subject to the two-year average operating margin performance criteria that vest if this secondary measure is used and our two-year operating margin is above the 25
th
percentile of the peer group is as follows:
|
|
|
Columbias Percentile Rank
|
|
% of RSUs that Vest
|
25-39
|
|
20%
|
40-54
|
|
50%
|
55-69
|
|
80%
|
70-84
|
|
110%
|
85+
|
|
140%
|
The relative operating margin measure compares our two-year average operating margin to a peer group
consisting of the following companies: Carters, Inc., Deckers Outdoor Group, Hanesbrands Inc., Fifth and Pacific Co., Jones Apparel Group, NIKE Inc., Oxford Industries, Philips-Van Heusen Corporation, Polo Ralph Lauren Corp., Quiksilver, Under
Armour Inc., VF Corporation and Wolverine World Wide Inc. The companies in the peer group were approved by the Compensation Committee, and were chosen based on their comparability with our business.
If data becomes unavailable for any company during the two-year cycle, due to a transaction or otherwise, operating margin for that
company will be averaged over the period for which data is available.
32
In 2011, the Committee granted RSU awards for the performance period 2011-2013 with the
following targets:
|
(a)
|
100% of the award subject to increase or forfeiture based on cumulative operating income and average return on invested capital of Columbia in the performance period,
as defined below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Operating Income (2011-2013)
|
|
|
|
(dollars in millions)
|
|
|
|
|
At
Least
|
|
|
$
|
420
|
|
|
$
|
460
|
|
|
$
|
500
|
|
|
$
|
540
|
|
|
$
|
580
|
|
Average Return on Invested Capital (2011-2013)
|
|
|
9.0%
|
|
|
|
25%
|
|
|
|
40%
|
|
|
|
50%
|
|
|
|
55%
|
|
|
|
60%
|
|
|
|
|
10.0%
|
|
|
|
40%
|
|
|
|
65%
|
|
|
|
75%
|
|
|
|
80%
|
|
|
|
90%
|
|
|
|
|
12.0%
|
|
|
|
65%
|
|
|
|
90%
|
|
|
|
100%
|
|
|
|
110%
|
|
|
|
120%
|
|
|
|
|
14.0%
|
|
|
|
80%
|
|
|
|
105%
|
|
|
|
115%
|
|
|
|
125%
|
|
|
|
145%
|
|
|
|
|
16.0%
|
|
|
|
90%
|
|
|
|
120%
|
|
|
|
130%
|
|
|
|
140%
|
|
|
|
170%
|
|
|
(b)
|
If cumulative operating income and average return on invested capital results in forfeiture of 100% of the award, notwithstanding the forfeiture, 100% of the award is
subject to increase or forfeiture based on the average operating margin of the company relative to the average operating margin of companies in the companys peer group in the performance period under the criteria set forth above.
|
Primarily as a result of the negative effects of an extraordinary asset impairment charge recorded in the
fourth quarter of 2013, the minimum level of operating income required under the primary measure for the 2011-2013 performance period was not exceeded, although excluding the asset impairment charge would have resulted in achievement of the minimum
levels of the performance targets to the extent that 69.3% of each eligible named executive officers initial award would have been payable. Awards were payable, however, under the secondary measure of average operating margin against our peer
group. Each eligible named executive officer received 20% of his initial award following certification of results by the Compensation Committee on March 3, 2014. As a result, on March 3, 2014, Mr. Timm earned 497 shares,
Mr. Cusick earned 358 shares and Mr. Bragdon earned 264 shares of Columbia common stock.
Change in control severance plan
Specified key employees, including the named executive officers, based on level of position, are eligible to participate
in a change of control severance plan that offers income protection in the event that the participants employment with us is involuntarily terminated other than for cause. The plan also secures for the benefit of Columbia the services of the
eligible employees, including the named executive officers, in the event of a potential or actual change in control. Mr. Boyle and Mrs. Boyle are not eligible to participate in the plan. The Board believes these types of arrangements are
common for companies against which we compete for talented key personnel and are beneficial for management recruitment purposes. For a description of the benefits to which the participating named executive officers would be entitled under the plan,
see Potential Payments upon Termination or Change in Control, below.
33
2013 Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
|
Salary(1)
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards(2)
($)
|
|
|
Option
Awards(2)
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
All Other
Compensation(3)
($)
|
|
|
Total
($)
|
|
Timothy P. Boyle
|
|
|
2013
|
|
|
|
83,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,602,326
|
|
|
|
24,625
|
|
|
|
1,710,932
|
|
President and CEO
|
|
|
2012
|
|
|
|
515,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
684,388
|
|
|
|
29,701
|
|
|
|
1,229,762
|
|
|
|
|
2011
|
|
|
|
859,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,008,590
|
|
|
|
28,289
|
|
|
|
1,896,110
|
|
|
|
|
|
|
|
|
|
|
Gertrude Boyle
|
|
|
2013
|
|
|
|
424,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
714,016
|
|
|
|
18,626
|
|
|
|
1,156,642
|
|
Chairman of the Board
|
|
|
2012
|
|
|
|
505,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
365,488
|
|
|
|
63,476
|
|
|
|
934,502
|
|
|
|
|
2011
|
|
|
|
842,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
466,400
|
|
|
|
66,601
|
|
|
|
1,375,424
|
|
|
|
|
|
|
|
|
|
|
Bryan L. Timm
|
|
|
2013
|
|
|
|
564,139
|
|
|
|
101,886
|
|
|
|
385,076
|
|
|
|
315,010
|
|
|
|
649,283
|
|
|
|
49,468
|
|
|
|
2,064,862
|
|
Executive Vice President and COO
|
|
|
2012
|
|
|
|
529,615
|
|
|
|
|
|
|
|
275,066
|
|
|
|
225,003
|
|
|
|
307,734
|
|
|
|
51,841
|
|
|
|
1,389,259
|
|
|
|
2011
|
|
|
|
524,808
|
|
|
|
|
|
|
|
773,933
|
|
|
|
727,005
|
|
|
|
392,700
|
|
|
|
59,378
|
|
|
|
2,477,824
|
|
|
|
|
|
|
|
|
|
|
Thomas B. Cusick
|
|
|
2013
|
|
|
|
424,231
|
|
|
|
73,334
|
|
|
|
220,054
|
|
|
|
180,007
|
|
|
|
353,640
|
|
|
|
32,516
|
|
|
|
1,283,782
|
|
Senior Vice President and Chief Financial Officer
|
|
|
2012
|
|
|
|
407,692
|
|
|
|
|
|
|
|
198,029
|
|
|
|
162,010
|
|
|
|
172,400
|
|
|
|
34,277
|
|
|
|
974,408
|
|
|
|
2011
|
|
|
|
399,519
|
|
|
|
|
|
|
|
197,230
|
|
|
|
163,444
|
|
|
|
220,000
|
|
|
|
41,428
|
|
|
|
1,021,621
|
|
|
|
|
|
|
|
|
|
|
Peter J. Bragdon
|
|
|
2013
|
|
|
|
365,385
|
|
|
|
53,940
|
|
|
|
165,070
|
|
|
|
135,003
|
|
|
|
298,910
|
|
|
|
25,732
|
|
|
|
1,044,040
|
|
Senior Vice President of Legal and Corporate Affairs, General Counsel and Secretary
|
|
|
2012
|
|
|
|
351,000
|
|
|
|
|
|
|
|
145,780
|
|
|
|
119,258
|
|
|
|
145,678
|
|
|
|
27,069
|
|
|
|
788,785
|
|
(1)
|
For 2013, amounts include employee contributions deferred under our 401(k) Excess Plan as follows: Mr. Boyle, $0; Mrs. Boyle, $0; Mr. Timm, $87,187;
Mr. Cusick, $41,240; and Mr. Bragdon, $41,025.
|
(2)
|
The amounts set forth in the Stock Awards and Option Awards columns reflects the aggregate grant date fair value computed in accordance with the
requirements of FASB ASC Topic 718Stock Compensation. These amounts may not correspond to the actual value eventually realized by each named executive officer, which depends on the extent to which performance conditions are ultimately met and
the market value of our Common Stock in future periods. The maximum payout amounts for the 2013 performance restricted stock units reported in the Stock Awards column above are as follows: Mr. Timm, $409,627; Mr. Cusick,
$234,053; and Mr. Bragdon $175,574. Assumptions used in the calculation of these amounts are described in the Notes to Consolidated Financial Statements for each of the years ended December 31, 2011, 2012 and 2013, included in
Columbias Annual Report on Form 10-K filed with the Securities and Exchange Commission.
|
(3)
|
The amounts set forth in the All Other Compensation column consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Year
|
|
|
Matching
Contributions
under the
Companys 401(k)
Profit
Sharing
Plan
|
|
|
Matching
Contributions
under the
Companys
401(k)
Excess Plan
|
|
|
Profit Sharing
Contributions
under the
Companys 401(k)
Profit
Sharing
Plan(a)
|
|
|
Executive
Officer
Excess
Disability
Insurance
Premium
Payments
|
|
|
Payments
for Health
Care
Benefits
Not
Provided
to Other
Employees
|
|
|
Miscellaneous
Club
Membership
Fees
|
|
Timothy P. Boyle
|
|
|
2013
|
|
|
$
|
12,750
|
|
|
|
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
Gertrude Boyle
|
|
|
2013
|
|
|
$
|
12,750
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
*
|
|
|
|
*
|
|
Bryan L. Timm
|
|
|
2013
|
|
|
$
|
12,750
|
|
|
$
|
31,115
|
|
|
|
*
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
Thomas B. Cusick
|
|
|
2013
|
|
|
$
|
12,750
|
|
|
$
|
17,201
|
|
|
|
*
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
Peter J. Bragdon
|
|
|
2013
|
|
|
$
|
12,750
|
|
|
$
|
12,803
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
The value of each of these items is less than $10,000, or less than the greater of $25,000 and 10% of the aggregate value of all personal benefits received by the named
executive officer, as applicable.
|
(a)
|
For 2013, the Board of Directors did not approve any profit sharing contributions. Amounts represent reallocated employee forfeitures.
|
34
2013 Grants of Plan-Based Awards Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant
Date
|
|
|
Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards
|
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
|
|
|
All Other
Stock
Awards:
Number
of
Securities
(#)
|
|
|
All Other
Option
Awards:
Number
of
Securities
Underlying
Units
(#)
|
|
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
|
|
Grant
Date
Fair
Value
of
Stock
and
Option
Awards
($)
|
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)(2)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
|
|
|
Timothy P. Boyle
|
|
|
|
|
|
|
207,600
|
|
|
|
761,200
|
|
|
|
1,522,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
190,300
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
(2)
|
|
|
304,500
|
|
|
|
593,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gertrude Boyle
|
|
|
|
|
|
|
169,600
|
|
|
|
339,200
|
|
|
|
678,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
84,800
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bryan L. Timm
|
|
|
|
|
|
|
154,224
|
|
|
|
308,448
|
|
|
|
616,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
77,112
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,669
|
|
|
|
|
|
|
|
|
|
|
|
175,011
|
|
|
|
|
1/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,774
|
|
|
|
51.09
|
|
|
|
315,010
|
|
|
|
|
12/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
3,026
|
|
|
|
5,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
210,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas B. Cusick
|
|
|
|
|
|
|
84,000
|
|
|
|
168,000
|
|
|
|
336,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
42,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,097
|
|
|
|
|
|
|
|
|
|
|
|
100,027
|
|
|
|
|
1/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,871
|
|
|
|
51.09
|
|
|
|
180,007
|
|
|
|
|
12/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
1,729
|
|
|
|
3,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter J. Bragdon
|
|
|
|
|
|
|
71,000
|
|
|
|
142,000
|
|
|
|
284,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
35,500
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,573
|
|
|
|
|
|
|
|
|
|
|
|
75,032
|
|
|
|
|
1/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,903
|
|
|
|
51.09
|
|
|
|
135,003
|
|
|
|
|
12/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
1,297
|
|
|
|
2,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,038
|
|
(1)
|
Amount represents individual component target for achieving individual performance objectives under the Executive Incentive Compensation Plan. The target amount for the
individual component also is a maximum amount under the plan.
|
(2)
|
At threshold performance no performance-based RSUs or long-term incentive cash compensation will be earned.
|
Narrative Disclosure to Summary Compensation Table and 2013 Grants of Plan-Based Awards Table
Salary
Salaries paid to
our named executive officers are set forth in the Summary Compensation Table. The amounts set forth in the Salary column of the Summary Compensation Table include payments in 2013 for cash-out of personal time off. As a result, the
salary paid to a named executive officer during the year (as reported on a cash basis in the Summary Compensation Table) may vary from the executive officers annualized salary. For fiscal 2013, salaries paid to our named executive officers
(including the cash-out for personal time off) accounted for the following percentages of each named executive officers total compensation, as reported in the total column of the Summary Compensation Table: Mr. Boyle (5%),
Mrs. Boyle (37%), Mr. Timm (27%), Mr. Cusick (33%), and Mr. Bragdon (35%). Any salary increases are effective in March of each respective year.
Bonus
Discretionary bonuses paid to our named executive officers are set
forth in the 2013 Summary Compensation Table. The discretionary bonuses are described in further detail under the caption Compensation Discussion and AnalysisOverview of Executive Compensation ProgramAnalysis of 2013 named
executive officer compensationShort-term incentive compensation above.
35
Stock Awards
We awarded time-based and performance-based RSUs to our named executive officers under our 1997 Stock Incentive Plan. The amounts set forth in the Estimated Future Payouts Under Equity Incentive
Plan Awards column of the 2013 Grants of Plan-Based Awards Table represent the threshold, target, and maximum number of performance-based RSUs that may be earned by each of the named executive officers during the January 1, 2014 through
December 31, 2015 performance period, depending on the extent to which company performance goals are met or exceeded. RSUs earned during the performance period will vest approximately in March 2016, upon approval by the Compensation Committee.
The amounts set forth in the All Other Stock Awards column of the 2013 Grants of
Plan-Based
Awards Table represent the number of time-based RSUs granted to each named executive officer, of which
25% of the RSUs shall vest annually (a) on the first anniversary of the first day of the first full calendar month following the Award Date (the Vest Date), and (b) on each of the subsequent three anniversaries following the
first anniversary of the Vest Date. The date on which RSUs vest is referred to as a vesting date. The RSUs shall become vested on a respective vesting date only to the extent the recipient is an employee of the company continuously from
the award date to the vesting date. If a vesting date falls on a weekend or any other day on which the Nasdaq Stock Market (NSM) or any national securities exchange on which the Common Stock then is principally traded (the
Exchange) is not open, affected RSUs will vest on the next following NSM or Exchange business day, as the case may be.
Option
Awards
We awarded stock options to our named executive officers under our 1997 Stock Incentive Plan. The options granted
to our named executive officers are set forth in the All Other Option Awards column of the 2013 Grants of Plan-Based Awards Table and vest and become exercisable with respect to 25% of the shares on each of the first four anniversaries
of the grant date.
Non-Equity Incentive Plan Compensation
The Executive Incentive Compensation Plan pursuant to which we grant non-equity incentive plan awards is designed in a manner intended to satisfy the requirements of Section 162(m) of the Internal
Revenue Code for qualified performance-based compensation. The Compensation Committee generally determines the structure of the overall short-term incentive program under the Executive Incentive Compensation Plan at the beginning of the year. In
setting the structure and the amount of the overall bonus target, the Committee considers the companys strategic goals and plan, its operational and financial budget, and other factors, all of which are designed to improve shareholder value.
The maximum bonus payable to any executive officer under the Executive Incentive Compensation Plan for a calendar year is $2 million.
We may or may not award an annual cash bonus under the Executive Incentive Compensation Plan, and any amount actually paid varies according to the achievement of company and individual performance
objectives.
The Compensation Committee establishes targets for our incentive programs early in the fiscal year based upon
current forecasts, business strategies and expectations. The Committee has the discretion, at or prior to the time it sets the performance target, to include or exclude any extraordinary items affecting the performance target and to adjust the
performance target to take into account changes in accounting.
The Compensation Committee also may reduce or completely
eliminate the amount payable under the Executive Incentive Compensation Plan to a named executive officer, based on factors that it determines warrant such a reduction or elimination. Historically, the Committee has not exercised this discretion to
any significant degree. Under the plan, the Committee has no discretion to increase any amount payable to a named executive officer.
The amounts set forth in the Estimated Possible Payouts Under Non-Equity Incentive Plan Awards column of the 2013 Grants of Plan-Based Awards Table include the threshold, target, and maximum
payout amounts payable for achieving the corporate and individual performance objectives under the companys Executive Incentive Compensation
36
Plan for 2013 awards. A discussion of the corporate performance targets that were achieved is set forth under the caption Compensation Discussion and AnalysisAnalysis of 2013 named
executive officer compensationShort-term incentive compensation above. For fiscal 2013, the aggregate value of bonuses paid under our Non-Equity Incentive Compensation Plan to our named executive officers accounted for the following
percentages of each named executive officers total compensation reported in the Total column of the Summary Compensation Table: Mr. Boyle (94%), Mrs. Boyle (62%), Mr. Timm (31%), Mr. Cusick (28%), and
Mr. Bragdon (29%).
For Mr. Boyle, the amounts set forth in the Estimated Possible Payouts Under Non-Equity
Incentive Plan Awards column of the 2013 Grants of Plan-Based Awards Table also include the threshold, target, and maximum payout amounts payable for the January 1, 2014 through December 31, 2015 performance period, depending on the
extent to which company performance goals are met or exceeded. The amount Mr. Boyle earns under his long-term incentive cash award for this performance period will be determined by the Compensation Committee approximately in March 2016.
All Other Compensation
All other compensation of our named executive officers is set forth in the Summary Compensation Table for Fiscal 2013 and described in greater detail in footnote 3 to the table.
Our 401(k) Profit Sharing Plan is our tax qualified retirement savings plan pursuant to which our U.S. employees, including the named
executive officers, are able to make pre-tax contributions from their cash compensation. Typically, we make matching contributions for all participants each year equal to 100% of their elective deferrals up to 4% of their total eligible compensation
and 50% of their elective deferrals from 4% to 6% of eligible annual compensation. We also may make annual profit sharing contributions to the accounts of our employees under the 401(k) Profit Sharing Plan. The contribution consists of amounts that
are allocated among eligible employees based on a percentage of their annual salary. The total profit sharing contribution, if any, is determined each year by the Board of Directors. For 2013, the Board of Directors did not approve any profit
sharing contribution. The Internal Revenue Code limits the amount of compensation that can be deferred under the 401(k) Profit Sharing Plan, and also limits the amount of salary and bonus with respect to which matching contributions and profit
sharing contributions can be made under that plan. Accordingly, we provide our executive officers and other highly compensated employees with the opportunity to defer their compensation, including amounts in excess of the tax law limit, under our
nonqualified 401(k) Excess Plan. Under the plan, the participants may elect to defer up to 70% of eligible compensation and we may make matching contributions for the participants equal to 100% of their elective deferrals up to 4% of their total
eligible compensation and 50% of their elective deferrals from 4% to 6% of their total eligible compensation, minus the matching contribution the participant would have been eligible to receive under the qualified 401(k) Profit Sharing Plan. See the
2013 Nonqualified Deferred Compensation table below.
We provide our named executive officers with competitive
benefits and, generally, we generally do not provide perquisites or tax reimbursements or other benefits to the named executive officers that are not available to other employees. In addition to our 401(k) Profit Sharing Plan and 401(k) Excess Plan
described above, in 2013, our named executive officers were offered other benefits that were substantially the same as those offered to all of our U.S. employees. These benefits included medical, dental and vision insurance. We also provide an
enhanced long-term disability benefit to our named executive officers. This benefit is designed to provide additional protection to our named executive officers in the event of catastrophic illness or disability. We provide our Chairman, our
President and CEO, and our President and CEOs qualifying family members with medical insurance at no cost to those individuals, and we reimburse our Chairman and our President and CEO for health care plan deductibles, co-payments, and other
out-of-pocket health care expenses up to a maximum aggregate amount of $100,000 per individual and each dependent per year. We also pay various club membership fees for our Chairman and our President and CEO.
37
2013 Outstanding Equity Awards at Fiscal Year-End Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(a)
|
|
Grant
Date
(b)
|
|
|
OPTION AWARDS
|
|
|
STOCK AWARDS
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable(1)
(c)
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(1)
(d)
|
|
|
Option
Exercise
Price
($)
(e)
|
|
|
Option
Expiration
Date
(f)
|
|
|
Number
of
Shares
or Units
of
Stock
That
Have
Not
Vested
(#)
(g)
|
|
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)(4)
(h)
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have Not
Vested
(#)(5)
(i)
|
|
|
Equity
Incentive
Plan
Awards:
Market
or Payout
Value
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(5)
(j)
|
|
Bryan L. Timm
|
|
|
09/06/05
|
|
|
|
15,000
|
|
|
|
|
|
|
|
45.88
|
|
|
|
09/05/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
07/20/06
|
|
|
|
5,200
|
|
|
|
|
|
|
|
43.83
|
|
|
|
07/19/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/18/07
|
|
|
|
9,500
|
|
|
|
|
|
|
|
58.26
|
|
|
|
01/17/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/24/08
|
|
|
|
35,000
|
|
|
|
|
|
|
|
40.49
|
|
|
|
01/23/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/21/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
676
|
(2)
|
|
|
53,235
|
|
|
|
|
|
|
|
|
|
|
|
|
01/21/10
|
|
|
|
20,046
|
|
|
|
6,681
|
|
|
|
41.23
|
|
|
|
01/20/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/29/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
122
|
(2)
|
|
|
9,608
|
|
|
|
|
|
|
|
|
|
|
|
|
01/20/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,118
|
(2a)
|
|
|
88,043
|
|
|
|
|
|
|
|
|
|
|
|
|
01/20/11
|
|
|
|
7,561
|
|
|
|
7,560
|
(1a)
|
|
|
59.97
|
|
|
|
01/19/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/20/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,910
|
(2b)
|
|
|
701,663
|
|
|
|
|
|
|
|
|
|
|
|
|
01/20/11
|
|
|
|
|
|
|
|
26,860
|
(1b)
|
|
|
59.97
|
|
|
|
01/19/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
497
|
(3)
|
|
|
39,139
|
|
|
|
|
|
|
|
|
|
|
|
|
01/26/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,115
|
|
|
|
166,556
|
|
|
|
|
|
|
|
|
|
|
|
|
01/26/12
|
|
|
|
4,983
|
|
|
|
14,948
|
|
|
|
47.70
|
|
|
|
01/25/22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/21/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
01/31/13
|
|
|
|
|
|
|
|
27,774
|
|
|
|
51.09
|
|
|
|
01/30/23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/31/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,669
|
|
|
|
288,934
|
|
|
|
|
|
|
|
|
|
|
|
|
12/17/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97,290
|
|
|
|
83,823
|
|
|
|
|
|
|
|
|
|
|
|
17,107
|
|
|
|
1,347,178
|
|
|
|
0
|
|
|
|
0
|
|
Thomas B. Cusick
|
|
|
01/18/07
|
|
|
|
5,219
|
|
|
|
|
|
|
|
58.26
|
|
|
|
01/17/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/23/09
|
|
|
|
3,094
|
|
|
|
|
|
|
|
31.21
|
|
|
|
01/22/19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/21/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
448
|
(2)
|
|
|
35,280
|
|
|
|
|
|
|
|
|
|
|
|
|
01/21/10
|
|
|
|
13,296
|
|
|
|
4,431
|
|
|
|
41.23
|
|
|
|
01/20/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/29/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81
|
(2)
|
|
|
6,379
|
|
|
|
|
|
|
|
|
|
|
|
|
01/20/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
805
|
(2a)
|
|
|
63,394
|
|
|
|
|
|
|
|
|
|
|
|
|
01/20/11
|
|
|
|
5,444
|
|
|
|
5,444
|
(1a)
|
|
|
59.97
|
|
|
|
01/19/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
358
|
(3)
|
|
|
28,193
|
|
|
|
|
|
|
|
|
|
|
|
|
01/26/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,523
|
|
|
|
119,936
|
|
|
|
|
|
|
|
|
|
|
|
|
01/26/12
|
|
|
|
3,588
|
|
|
|
10,763
|
|
|
|
47.70
|
|
|
|
01/25/22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/21/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
01/31/13
|
|
|
|
|
|
|
|
15,871
|
|
|
|
51.09
|
|
|
|
01/30/23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/31/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,097
|
|
|
|
165,139
|
|
|
|
|
|
|
|
|
|
|
|
|
12/17/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,641
|
|
|
|
36,509
|
|
|
|
|
|
|
|
|
|
|
|
5,312
|
|
|
|
418,321
|
|
|
|
0
|
|
|
|
0
|
|
Peter J. Bragdon
|
|
|
09/06/05
|
|
|
|
12,750
|
|
|
|
|
|
|
|
45.88
|
|
|
|
09/05/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
07/20/06
|
|
|
|
4,500
|
|
|
|
|
|
|
|
43.83
|
|
|
|
07/19/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/18/07
|
|
|
|
7,000
|
|
|
|
|
|
|
|
58.26
|
|
|
|
01/17/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/24/08
|
|
|
|
14,000
|
|
|
|
|
|
|
|
40.49
|
|
|
|
01/23/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/21/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
365
|
(2)
|
|
|
28,744
|
|
|
|
|
|
|
|
|
|
|
|
|
01/21/10
|
|
|
|
10,842
|
|
|
|
3,613
|
|
|
|
41.23
|
|
|
|
01/20/20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/29/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66
|
(2)
|
|
|
5,198
|
|
|
|
|
|
|
|
|
|
|
|
|
01/20/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
592
|
(2a)
|
|
|
46,620
|
|
|
|
|
|
|
|
|
|
|
|
|
01/20/11
|
|
|
|
4,008
|
|
|
|
4,007
|
(1a)
|
|
|
59.97
|
|
|
|
01/19/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
264
|
(3)
|
|
|
20,790
|
|
|
|
|
|
|
|
|
|
|
|
|
01/26/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,121
|
|
|
|
88,279
|
|
|
|
|
|
|
|
|
|
|
|
|
01/26/12
|
|
|
|
2,641
|
|
|
|
7,923
|
|
|
|
47.70
|
|
|
|
01/25/22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/21/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
01/31/13
|
|
|
|
|
|
|
|
11,903
|
|
|
|
51.09
|
|
|
|
01/30/23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/31/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,573
|
|
|
|
123,874
|
|
|
|
|
|
|
|
|
|
|
|
|
12/17/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,741
|
|
|
|
27,446
|
|
|
|
|
|
|
|
|
|
|
|
3,981
|
|
|
|
313,505
|
|
|
|
0
|
|
|
|
0
|
|
38
|
|
|
|
|
(1)
|
|
Option Grant Date
|
|
Vesting Schedule
|
|
|
September 6, 2005
|
|
100% vested on September 6, 2006
|
|
|
July 20, 2006
|
|
25% vested on August 7, 2007, and the remaining 75% vest ratably over the following 36 months
|
|
|
January 18, 2007
|
|
25% vested on January 18, 2008, and the remaining 75% vest ratably over the following 36 months
|
|
|
January 24, 2008
|
|
25% vested on January 24, 2009, and the remaining 75% vest ratably over the following 36 months
|
|
|
January 23, 2009
|
|
25% vest on each anniversary date over four years
|
|
|
January 21, 2010
|
|
25% vest on each anniversary date over four years
|
|
|
January 20, 2011 (a)
|
|
25% vest on each anniversary date over four years
|
|
|
January 20, 2011 (b)
|
|
100% vest on the fifth anniversary date
|
|
|
January 26, 2012
|
|
25% vest on each anniversary date over four years
|
|
|
January 31, 2013
|
|
25% vest on each anniversary date over four years
|
|
|
|
|
|
(2)
|
|
Time-based RSU Grant Date
|
|
Vesting Schedule
|
|
|
January 21, 2010
|
|
25% vest on each anniversary date over four years
|
|
|
March 29, 2010
|
|
25% vest on each anniversary date over four years
|
|
|
January 20, 2011 (a)
|
|
25% vest on each anniversary date over four years
|
|
|
January 20, 2011 (b)
|
|
100% vest on the fifth anniversary date
|
|
|
January 26, 2012
|
|
25% of the RSUs shall vest annually (a) on the first anniversary of the first day of the first full calendar month following the Award Date (the Vest Date), and (b) on
each of the subsequent three anniversaries following the first anniversary of the Vest Date.
|
|
|
January 31, 2013
|
|
25% of the RSUs shall vest annually (a) on the first anniversary of the first day of the first full calendar month following the Award Date (the Vest Date), and (b) on
each of the subsequent three anniversaries following the first anniversary of the Vest Date.
|
|
|
(3)
|
|
These performance-based RSUs have been earned under the company performance component of the equity-based incentive compensation plan, but have not yet vested. These
RSUs vested on March 3, 2014.
|
|
|
(4)
|
|
Based on a value of $78.75 per share, the closing market price of our Common Stock on December 31, 2013, the last trading day of 2013.
|
|
|
(5)
|
|
At threshold performance no performance-based RSUs will be earned. Assuming target performance objectives are met and approved by the Compensation Committee, the
performance-based RSUs would vest as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
Performance Period
|
|
Number of Shares
|
|
Market Value(A)
|
|
Vesting Schedule
|
|
|
March 21, 2012
|
|
2012-2014
|
|
7,310
|
|
$575,663
|
|
March 2015, upon Compensation Committee approval
|
|
|
December 17, 2013
|
|
2014-2015
|
|
6,052
|
|
$476,595
|
|
March 2016, upon Compensation Committee approval
|
|
|
(A)
|
|
Based on a value of $78.75 per share, the closing market price of our Common Stock on December 31, 2013, the last trading day of 2013, multiplied by the indicated
number of performance-based RSUs granted that may be earned during the applicable performance period. This value may not correspond to the actual value that will be realized by the named executive officers, which depends on the extent to which
performance conditions are ultimately met and the value of our Common Stock in future periods.
|
2013 Option Exercises and Stock Vested Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
Stock Awards
|
|
Name
|
|
Number of Shares
Acquired on Exercise
(#)
|
|
|
Value Realized on
Exercise
($)
|
|
|
Number of Shares
Acquired on Vesting
(#)(1)
|
|
|
Value Realized on
Vesting
($)
|
|
Bryan L. Timm
|
|
|
37,840
|
|
|
|
1,064,724
|
|
|
|
8,571
|
|
|
|
451,870
|
|
Thomas B. Cusick
|
|
|
28,087
|
|
|
|
446,345
|
|
|
|
5,888
|
|
|
|
309,785
|
|
Peter J. Bragdon
|
|
|
14,523
|
|
|
|
177,035
|
|
|
|
3,903
|
|
|
|
208,270
|
|
(1)
|
Represents full number of shares vested and does not exclude shares surrendered for tax payment.
|
39
2013 Nonqualified Deferred Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in 2013(1)
|
|
|
Matching
Company
Contributions
in 2013(1)
|
|
|
Aggregate
Earnings in
2013(1)
|
|
|
Aggregate
Balance at
12/31/2013(1)
|
|
Timothy P. Boyle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gertrude Boyle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bryan L. Timm
|
|
$
|
87,187
|
|
|
$
|
31,115
|
|
|
$
|
95,703
|
|
|
$
|
847,096
|
|
Thomas B. Cusick
|
|
$
|
41,240
|
|
|
$
|
17,201
|
|
|
$
|
45,995
|
|
|
$
|
382,763
|
|
Peter J. Bragdon
|
|
$
|
41,025
|
|
|
$
|
12,803
|
|
|
$
|
50,930
|
|
|
$
|
412,796
|
|
(1)
|
All amounts reported in the Executive Contributions column are also included in amounts reported in the Salary column of the Summary Compensation Table. The amounts
reported in the Matching Company Contributions column represent matching contributions made by us in early 2014 based on 2013 executive contributions; these amounts are also included in amounts reported for 2013 in the All Other Compensation column
of the Summary Compensation Table. None of the amounts in the Aggregate Earnings column are included in amounts reported in the Summary Compensation Table because the company does not pay guaranteed, above-market or preferential earnings on deferred
compensation. Except for $296,033 of Mr. Bragdons aggregate balance, all other amounts included in the Aggregate Balance column have been reported in the Summary Compensation Table in this proxy statement or in prior year proxy
statements.
|
Nonqualified Deferred Compensation Plan
The named executive officers are eligible to participate in our 401(k) Excess Plan. Contributions based on salary and bonus in excess of
the current tax law limit applicable for our qualified 401(k) Profit Sharing Plan are made as company contributions under the 401(k) Excess Plan. Under the plan, the participants may elect to defer up to 70% of eligible compensation and we may make
matching contributions for the participants equal to 100% of their elective deferrals up to 4% of their total eligible compensation and 50% of their elective deferrals from 4% to 6% of their total eligible compensation, minus the matching
contribution the participant would have been eligible to receive under the qualified 401(k) Profit Sharing Plan. The Board or the companys CEO may change or eliminate matching contributions to the 401(k) Excess Plan at any time, and such
change or elimination may, to the extent designated by the Board or the CEO, be retroactive to the first day of the Excess Plan year in which the change or elimination is adopted by the Board or the CEO. Our matching contribution for 2013 to the
accounts of the named executive officers under the qualified and nonqualified plans are included under the heading All Other Compensation in the Summary Compensation Table above.
Amounts deferred under the 401(k) Excess Plan are credited to a participants account under the 401(k) Excess Plan. Each participant
may allocate his or her account among a combination of six investment funds available under the 401(k) Excess Plan. Participants accounts are adjusted to reflect the investment performance of the funds selected by the participants.
Participants can change the allocation of their account balances quarterly. The funds available under the 401(k) Excess Plan consist of a money market fund and five mutual funds ranging from a conservative to growth investment objective. The money
market fund had an annualized return of .01% and the mutual funds had annualized returns ranging from 3.12% to 19.93% in 2013. Amounts credited to participants accounts are invested by us in actual investments matching the investment options
selected by the participants to ensure that we do not bear any investment risk related to participants investment choices.
40
Potential Payments Upon Termination or Change in Control
Pursuant to our Change in Control Severance Plan we have agreed to provide certain benefits to some of our named
executive officers in the event that the executives employment with Columbia is involuntarily terminated without cause other than in connection with a change in control, or in the event that, in connection with a change in control,
the executives employment with Columbia is terminated by us other than for cause or by the executive for good reason. Neither our President and CEO nor our Chairman is eligible to participate in the plan. The Board
believes that these types of arrangements are common for companies against which we compete for talented key personnel and are beneficial for management recruitment purposes.
In our plans and agreements, cause generally includes personal dishonesty intended to result in substantial personal enrichment, conviction of a felony that is injurious to Columbia, willful
acts that constitute gross misconduct that is injurious to Columbia, continued substantial violations of employment duties that are willful and deliberate and other substantial violations of the plan, including violation of Columbias Code of
Conduct or other restrictive covenants agreed to under the plan. Good reason generally includes a change in position or responsibilities that does not represent a promotion, a decrease in compensation, or a home office relocation of over
75 miles.
Termination without cause or for good reason, following a change in control
Cash Severance Benefit.
The change in control severance plan provides that each named executive officer, other than Mr. Boyle
and Mrs. Boyle, would receive cash severance benefits payable if the officers employment is terminated by us without cause or by the officer for good reason within 12 months following a change in control. In the
event of a qualifying termination in connection with a change in control, the cash severance payment for Mr. Timm would be equal to 3.75 times, and for Mr. Cusick and Mr. Bragdon would be equal to 3.0 times the sum of their respective
base annual salary. These amounts are payable in a lump sum following the participants signing of a waiver and release of claims and no later than two and one half months after the end of the fiscal year in which the termination occurred.
Insurance Continuation.
In the event of a qualifying termination in connection with a change in control, each of
Mr. Timm, Mr. Cusick and Mr. Bragdon would receive health insurance benefits for the shorter of 18 months or the COBRA coverage period.
Equity Acceleration
. In the event of a qualifying termination in connection with a change in control, outstanding options and time-based RSUs would accelerate in full, and performance-based RSUs
would accelerate to the extent earned as of that date, determined on a pro-rated basis for the applicable performance period.
The following table shows the estimated change in control benefits that would have been payable to each of the eligible named executive
officers if the named executive officer were terminated by us without cause, or if the named executive officer terminated his employment for good reason, within 12 months following a change in control, as of December 31, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Cash
Severance
Benefit
|
|
|
Insurance
Continuation(1)
|
|
|
Option
Acceleration(2)
|
|
|
Time-based
Restricted
Stock Unit
Acceleration(3)
|
|
|
Performance-
based
Restricted
Stock Unit
Acceleration(4)
|
|
|
Total Lump
Sum
Payments
|
|
Bryan L. Timm
|
|
$
|
2,065,500
|
|
|
$
|
20,049
|
|
|
$
|
2,129,443
|
|
|
$
|
1,308,038
|
|
|
$
|
201,364
|
|
|
$
|
5,724,394
|
|
Thomas B. Cusick
|
|
$
|
1,260,000
|
|
|
$
|
20,049
|
|
|
$
|
1,041,672
|
|
|
$
|
390,128
|
|
|
$
|
144,979
|
|
|
$
|
2,856,828
|
|
Peter J. Bragdon
|
|
$
|
1,065,000
|
|
|
$
|
20,049
|
|
|
$
|
786,057
|
|
|
$
|
292,714
|
|
|
$
|
106,785
|
|
|
$
|
2,270,605
|
|
(1)
|
The amounts in the column represent the present value of 18 months of health insurance benefit payments to each officer at the rates paid by us as of December 31,
2013.
|
41
(2)
|
The amounts in the column represent the value that would be realized on acceleration of outstanding options based on the difference between the exercise price and
$78.75, the closing market price of our Common Stock on December 31, 2013, the last trading day of 2013.
|
(3)
|
The amounts in the column represent the number of shares that would be issued under the time-based RSU awards, multiplied by a stock price of $78.75 per share, the
closing market price of our Common Stock on December 31, 2013, the last trading day of 2013. See 2013 Outstanding Equity Awards at Fiscal Year End table and Compensation Discussion and AnalysisAnalysis of 2013 named
executive officer compensationEquity-based incentives, above.
|
(4)
|
The amounts in the column were calculated using a value of $78.75 per share, the closing market price of our Common Stock on December 31, 2013, the last trading
day of 2013, multiplied by the number of RSUs earned as of that date, determined on a pro-rated basis for the applicable performance period. This value may not correspond to the actual value that will be realized by the named executive officers,
which depends on the extent to which performance conditions are ultimately met and the value of our Common Stock in future periods.
|
Termination without cause
Cash Severance Benefit.
The Change
in Control Severance Plan provides that each named executive officer, other than Mr. Boyle and Mrs. Boyle, would receive cash severance benefits payable if the officers employment is terminated by us at any time without
cause. In the event that a named executive officers employment is terminated by us without cause and not in connection with a change in control, the cash severance benefit payment for Mr. Timm would be equal to 3.0
times, and for Mr. Cusick and Mr. Bragdon would be equal to 2.25 times their respective base annual salary. These amounts are payable in a lump sum following the participants signing of a waiver and release of claims and no later
than two and one half months after the end of the fiscal year in which the termination occurred.
Insurance Continuation.
In the event of a termination other than in connection with a change in control, each of Mr. Timm, Mr. Cusick and Mr. Bragdon would receive health insurance benefits for the shorter of 18 months or the COBRA coverage period.
Equity Acceleration
. In the event of a termination other than in connection with a change in control, the vesting of
neither options nor RSUs would accelerate.
The following table shows the estimated severance benefits that would have been
payable to each of the eligible named executive officers if his employment was terminated by us without cause on December 31, 2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Cash
Severance
Benefit
|
|
|
Insurance
Continuation(1)
|
|
|
Total Lump
Sum
Payments
|
|
Bryan L. Timm
|
|
$
|
1,652,400
|
|
|
$
|
20,049
|
|
|
$
|
1,672,449
|
|
Thomas B. Cusick
|
|
$
|
945,000
|
|
|
$
|
20,049
|
|
|
$
|
965,049
|
|
Peter J. Bragdon
|
|
$
|
798,750
|
|
|
$
|
20,049
|
|
|
$
|
818,799
|
|
(1)
|
The amounts in the column represent the present value of 18 months of health insurance benefit payments, at the rates paid by us as of December 31, 2013.
|
42
Termination due to Death or Disability
The following table shows the estimated payout for each named executive officer had his or her employment terminated on December 31,
2013 as a result of death or disability. The time-based RSU award agreement generally requires the officer to be employed by us on the date of issuance to receive an award payout, but provides that if employment terminates earlier as a result of
death or disability the officer will be entitled to acceleration of all unvested shares.
|
|
|
|
|
|
|
|
|
Name
|
|
Time-based
Restricted
Stock Unit
Acceleration(1)
|
|
|
Payout under
Non-Equity
Incentive
Plan Awards(2)
|
|
Timothy P. Boyle
|
|
|
|
|
|
$
|
1,602,326
|
|
Gertrude Boyle
|
|
|
|
|
|
$
|
714,016
|
|
Bryan L. Timm
|
|
$
|
1,308,038
|
|
|
$
|
649,283
|
|
Thomas B. Cusick
|
|
$
|
390,128
|
|
|
$
|
353,640
|
|
Peter J. Bragdon
|
|
$
|
292,714
|
|
|
$
|
298,910
|
|
(1)
|
The amounts in the column represent the number of shares that would be issued under the time-based RSU awards, multiplied by a stock price of $78.75 per share, which
was the closing price of our Common Stock on December 31, 2013, the last trading day of 2013. See 2013 Outstanding Equity Awards at Fiscal Year End table and Compensation Discussion and AnalysisAnalysis of 2013 named
executive officer compensationEquity-based incentives, above.
|
(2)
|
The amounts in this column represent the estimated payouts that would be made under our Executive Incentive Compensation Plan.
|
Termination due to Retirement
The following table shows the estimated payout for each named executive officer had his or her employment terminated on December 31, 2013 as a result of retirement.
|
|
|
|
|
Name
|
|
Payout under
Non-Equity
Incentive
Plan Awards(1)
|
|
Timothy P. Boyle
|
|
$
|
1,602,326
|
|
Gertrude Boyle
|
|
$
|
714,016
|
|
Bryan L. Timm
|
|
$
|
649,283
|
|
Thomas B. Cusick
|
|
$
|
353,640
|
|
Peter J. Bragdon
|
|
$
|
298,910
|
|
(1)
|
The amounts in this column represent the estimated payouts that would be made under our Executive Incentive Compensation Plan.
|