SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934 (Amendment
No. )
Filed by the
Registrant
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Filed by a Party other than the
Registrant
o
Check the appropriate box:
o
Preliminary
Proxy Statement
o
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
o
Definitive
Additional Materials
o
Soliciting
Material Pursuant to
Section 240.14a-12.
SOVRAN SELF STORAGE, INC.
(Name of Registrant as Specified in
its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ
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No fee required.
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o
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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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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o
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Fee paid previously with preliminary materials.
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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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SOVRAN
SELF STORAGE, INC.
6467 Main Street
Williamsville, New York 14221
Dear Shareholder:
You are cordially invited to attend the 2008 Annual Meeting of
Shareholders of Sovran Self Storage, Inc. on Wednesday,
May 21, 2008 at the Courtyard by Marriott, 4100 Sheridan
Drive, Buffalo, New York 14221. The 2008 Annual Meeting will
begin promptly at 11:00 a.m. (E.D.T.).
The enclosed Notice and Proxy Statement contain details
concerning the business to come before the meeting. You will
note that the Board of Directors of the Company recommends a
vote FOR the election of six Directors to serve
until the 2009 Annual Meeting of Shareholders, FOR
the amendment to the Deferred Compensation Plan for Directors of
Sovran Self Storage, Inc., and FOR the ratification
of the appointment of Ernst & Young LLP as the
independent registered public accounting firm of the Company for
fiscal year 2008.
The vote of every Shareholder is important. You may vote your
shares via the toll free telephone number or via the Internet
(see instructions on the enclosed proxy card) or you may sign
and date the accompanying proxy card and return it in the
postage paid envelope provided. Returning your completed proxy
card will not prevent you from voting in person at the meeting
should you be present and wish to do so or from changing your
vote before the meeting. Please note that the telephone number
is available only for calls originating in the United States or
Canada. Please take the time to vote. As explained in the Proxy
Statement, you may withdraw your proxy at any time before it is
actually voted at the meeting.
If you plan to attend the meeting in person, please remember to
bring a form of personal identification with you and, if you are
acting as a proxy for another Shareholder, please bring written
confirmation from the record owner that you are acting as a
proxy. If you will need special assistance at the meeting,
please contact Sovran Investor Relations at
(716) 633-1850.
The Board of Directors and management look forward to greeting
those Shareholders who are able to attend the Annual Meeting.
Sincerely,
Secretary
April 10, 2008
TABLE OF CONTENTS
SOVRAN
SELF STORAGE, INC.
6467 Main Street
Williamsville, New York 14221
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF SOVRAN SELF STORAGE, INC.:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Shareholders
of Sovran Self Storage, Inc. (the Company) will be
held at the Courtyard by Marriott, 4100 Sheridan Drive, Buffalo,
New York 14221, on Wednesday, May 21, 2008, at
11:00 a.m. (E.D.T.), to consider and take action on the
following:
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1.
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The election of six Directors of the Company to hold office
until the next Annual Meeting of Shareholders and until their
successors are elected and qualified.
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2.
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An amendment to the Deferred Compensation Plan for Directors of
Sovran Self Storage, Inc. to increase the number of shares of
the Companys common stock that may be issued thereunder
from 45,000 to 75,000.
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3.
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The ratification of the appointment by the Board of Directors of
Ernst & Young LLP as the independent registered public
accounting firm for the Company for the fiscal year ending
December 31, 2008.
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4.
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The transaction of such other business as may properly come
before the meeting or any adjournments thereof.
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FURTHER NOTICE IS HEREBY GIVEN that the stock transfer books of
the Company will not be closed, but only Shareholders of record
at the close of business on March 24, 2008 will be entitled
to notice of the meeting and to vote at the meeting.
Shareholders who will be unable to attend the Annual Meeting
in person may attend the meeting by proxy. Such Shareholders are
requested to complete, date, sign and return the proxy card in
the envelope enclosed or to vote their shares by telephone or
via the Internet as described on the enclosed proxy card.
By Order of the Board of Directors,
Secretary
Williamsville, New York
April 10, 2008
Important Notice Regarding the Availability of Proxy
Materials for the Shareholder Meeting to
be held on May 21, 2008
The Proxy Statement,
Form 10-K
for the year ended December 31, 2007 and the Annual Report
to shareholders are available at
www.sovranss.com/2008annualmeeting
SOVRAN
SELF STORAGE, INC.
6467 Main Street
Williamsville, New York 14221
PROXY
STATEMENT
FOR
2008
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement and the enclosed form of proxy are
furnished in connection with the solicitation of proxies on
behalf of the Board of Directors of Sovran Self Storage, Inc.
(the Company) for the 2008 Annual Meeting of
Shareholders (the Annual Meeting) to be held on
Wednesday, May 21, 2008 at 11:00 a.m. (E.D.T.) at the
Courtyard by Marriott, 4100 Sheridan Drive, Buffalo, New York
14221, and at any adjournment thereof, for the purposes set
forth in the accompanying Notice of Annual Meeting of
Shareholders. This Proxy Statement and the enclosed form of
proxy are first being mailed to Shareholders on or about
April 10, 2008.
Shareholders of record may vote by (i) attending the
meeting, (ii) using the toll-free telephone number shown on
the proxy card, (iii) voting via the Internet at the
address shown on the proxy card, or (iv) marking, dating,
signing and returning the enclosed proxy card. Returning your
completed proxy will not prevent you from voting in person at
the meeting should you be present and wish to do so. The proxy
may be revoked at any time before it is voted by delivering to
the Secretary of the Company a written revocation or a duly
executed proxy (including a telephone or Internet vote) as of a
later date, or by attending the Annual Meeting and voting in
person.
The entire cost of preparing, assembling and mailing the proxy
material will be borne by the Company. The Company will
reimburse brokerage firms, banks and other securities custodians
for their expenses in forwarding proxy materials to their
principals. Solicitations other than by mail may be made by
officers or by employees of the Company without additional
compensation.
Only Shareholders of record at the close of business on
March 24, 2008 are entitled to notice of and to vote at the
Annual Meeting and at all adjournments thereof. At the close of
business on March 24, 2008, there were issued and
outstanding 21,801,855 shares of the Companys common
stock (Common Stock). Each share of Common Stock has
one vote. A majority of shares entitled to vote at the Annual
Meeting will constitute a quorum. If a share is represented for
any purpose at the meeting, it is deemed to be present for all
other purposes. Abstentions and shares held of record by a
broker or its nominee (Broker Shares) that are voted
on any matter are included in determining the number of votes
present. Broker Shares that are not voted on any matter at the
Annual Meeting will not be included in determining whether a
quorum is present.
The Company has enclosed with this Proxy Statement a copy of
the Companys Annual Report on
Form 10-K
filed with the Securities and Exchange Commission for the year
ended December 31, 2007, including the financial statements
and schedules thereto.
Important Notice Regarding the Availability of Proxy
Materials for the Shareholder Meeting to
be held on May 21, 2008
The Proxy Statement,
Form 10-K
for the year ended December 31, 2007 and the Annual Report
to shareholders are available at
www.sovranss.com/2008annualmeeting
1.
ELECTION OF DIRECTORS
It is intended that the proxies solicited by the Board of
Directors will, unless otherwise directed, be voted to elect the
nominees for Director named below. Assuming a quorum is present,
Directors are elected by a plurality of the affirmative votes
cast; accordingly, votes withheld and broker non-votes will have
no effect. The nominees proposed are all presently members of
the Board.
Nominees
for Election to the Board of Directors
The nominees named herein will hold office until the next
succeeding Annual Meeting of Shareholders and until their
successors are duly elected and qualified. In the event any
nominee becomes unavailable to stand for election, it is
intended that the persons named in the proxy may vote for a
substitute who will be recommended by the Nominating Committee
of the Board of Directors subject to Board approval. The Board
of Directors has no reason to believe that any of the nominees
will be unable to serve as Directors.
The following information with respect to business experience of
nominees for election to the Board of Directors has been
furnished by the respective directors or obtained from the
records of the Company.
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Name
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Age
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Independent
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Title and Principal Occupation
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Robert J. Attea
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66
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No
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Chairman of the Board and Director of the Company since 1995 and
Chief Executive Officer of the Company since March 1997.
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Kenneth F. Myszka
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59
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No
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President and Chief Operating Officer of the Company since March
1997 and Director of the Company since 1995.
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John E. Burns
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61
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Yes
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Director of the Company since 1995. Mr. Burns is President of
Altus Capital Inc., an investment management company. From 1998
through 2000, Mr. Burns was Chairman of Sterling, a division of
National City Bank, which provided tax and financial counseling
services to affluent families.
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Michael A. Elia
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56
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Yes
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Director of the Company since 1995. Mr. Elia is President,
Chief Executive Officer and a director of Sevenson Environmental
Services, Inc., from 1984 to present.
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Anthony P. Gammie
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73
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Yes
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Director of the Company since 1995. From 1985 through March of
1996, Mr. Gammie was Chairman of the Board and Chief Executive
Officer of Bowater Incorporated.
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Charles E. Lannon
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60
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Yes
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Director of the Company since 1995. Mr. Lannon is the President
of Strategic Capital, Inc., a consulting firm.
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THE BOARD
OF DIRECTORS RECOMMENDS A VOTE FOR
THE ELECTION OF THE NOMINEES NAMED ABOVE.
Director
Independence
The Board of Directors has reviewed all transactions or
relationships between each director, or any member of his or her
immediate family and the Company, its senior management and its
independent registered public accounting firm. There were no
transactions, relationships or arrangements with any
non-employee director that were required to be disclosed
pursuant to Item 404(a) of
Regulation S-K
under the Securities and Exchange Act of 1934 that the Board of
Directors considered as part of such review. The Board of
Directors did consider a certain facilities services agreement
between a business owned by Charles E. Lannon and the Company
involving payments of approximately $12,000 per annum, which it
did not regard as material. Based on this review and as required
by the independence standards of the New York Stock Exchange
(NYSE), the Board of Directors has affirmatively
determined that Messrs. Burns, Elia, Gammie and Lannon are
independent from management and its independent registered
public accounting firm within the meaning of the NYSE listing
standards and as defined in the rules and regulations of the
Securities and Exchange Commission (SEC).
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MEETINGS
OF THE BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors held five meetings during the fiscal year
ended December 31, 2007. Each incumbent director attended
at least 75% of the aggregate total number of meetings held by
the Board of Directors and all committees on which he served.
Our independent Directors who are all members of our board of
directors other than Messrs. Attea (our Chairman of the
Board and Chief Executive Officer) and Myszka (our President and
Chief Operating Officer), meet in executive session in
conjunction with regularly scheduled meetings of the Board of
Directors at least twice per year and on other occasions, as
necessary, in accordance with the Companys Corporate
Governance Principles. The presiding director at executive
sessions of our non-management directors rotates among the
non-management directors. The Companys policy is that all
directors should attend the Annual Meeting of Shareholders
absent a good reason. Four directors attended the 2007 Annual
Meeting of Shareholders, and two directors were excused for good
reason.
The Board of Directors has three committees with the principal
functions described below. The charter of each committee is
posted on the Companys website at
www.sovranss.com
.
A copy of each charter is available in print to any shareholder
upon request to the Company at 6467 Main Street, Williamsville,
New York 14221, Attention David L. Rogers, Secretary, or by
telephone
(716) 633-1850.
Audit Committee.
The Audit Committee is
composed of Messrs. Burns, Elia and Gammie. Mr. Burns
serves as Chair. The Audit Committee is established to oversee
the accounting and financial reporting processes and audits of
the financial statements of the Company. The Audit Committee
assists the Board of Directors in oversight of the quality and
integrity of the Companys financial reports, the
Companys compliance with legal and regulatory
requirements, the independent registered public accounting
firms qualifications and independence and the performance
of the Companys internal audit function, as well as
accounting and reporting processes.
The Audit Committee is composed entirely of directors who are
not employees of the Company and have no relationship to the
Company that would interfere with a directors independence
from management and the Company, including independence within
the meaning of applicable NYSE listing standards and rules and
regulations of the SEC. Each member must be financially
literate under NYSE listing standards, or become
financially literate within a reasonable period of time after
appointment. The SEC has adopted rules to implement certain
requirements of the Sarbanes-Oxley Act of 2002 pertaining to
public company audit committees. One of the rules adopted by the
SEC requires a company to disclose whether it has an Audit
Committee Financial Expert serving on its audit committee.
The Board of Directors has determined that all members of the
Audit Committee are financially literate and that Audit
Committee member John E. Burns meets the definition of a
financial expert.
The Audit Committees duties are set forth in its charter,
which can be found on the Companys web site at
www.sovranss.com
. Additional information regarding the
Audit Committee and the Companys independent registered
public accounting firm is disclosed in the Report of the Audit
Committee below. The Audit Committee held four meetings during
the fiscal year ended December 31, 2007. At each of the
meetings, the Audit Committee met in private session with the
Companys independent registered public accounting firm.
Compensation Committee.
The Compensation
Committee is composed of Messrs. Burns, Elia and Gammie,
each of whom is independent within the meaning of applicable
NYSE listing standards. Mr. Elia serves as Chair. The
Compensation Committee makes decisions with respect to
compensation of Messrs. Attea, Myszka and Rogers (the
Executive Officers), reviews and recommends to the
full Board of Directors director compensation levels and
programs and administers the Companys 2005 Award and
Option Plan.
The Compensation Committee met three times during 2007.
Compensation Committee agendas are established by the Committee
Chair, and the Compensation Committee meets in executive session
only. Pursuant to its charter, the Compensation Committee has
the authority to engage advisors, including compensation
consultants, and the Compensation Committee has engaged
Longnecker & Associates as a consultant to assist in
evaluating compensation for the Executive Officers and
compensation programs generally. The consultant reports directly
to the Compensation Committee and does not perform services for
management. However, on occasion, at the request and direction
of the Compensation Committee, the consultant will review
compensation levels recommended by the Executive Officers for
other senior managers. The consultant advises the Compensation
Committee with respect to
3
compensation trends and best practices, plan design,
reasonableness of individual compensation awards and general
comparability with companies in the real estate investment trust
(REIT) industry.
The Executive Officers do not participate in deliberations of
the Compensation Committee. The Executive Officers, at the
Compensation Committees request, prepare performance and
operational data and financial information to assist the
Compensation Committee in reaching its compensation
determinations.
The Compensation Committees charter does not permit
delegation of its responsibilities or authority to others.
Accordingly, the Compensation Committee has not delegated any of
its responsibilities.
The functions of the Compensation Committee are further
described below under the caption Executive
Compensation and in its charter, which can be found on the
Companys web site at
www.sovranss.com
.
Governance Committee.
The Governance Committee
of the Board of Directors was formed in 2003 and serves as the
Companys nominating committee. The Governance Committee is
composed of Messrs. Burns, Elia, Gammie and Lannon, each of
whom is independent within the meaning of applicable NYSE
listing standards. Mr. Gammie served as Chair in 2006 and
Mr. Lannon was appointed Chair in February, 2007. The
Governance Committees functions are set forth in its
charter, which can be found on the Companys website at
www.sovranss.com
, and include assisting the Board of
Directors by identifying individuals qualified to become Board
members and recommending director nominees for the annual
meeting of shareholders, recommending to the Board the Corporate
Governance Principles applicable to the Company, leading the
Board of Directors in its annual review of the Boards
performance, and recommending the Board of Directors
director nominees for each committee. The Governance Committee
must annually review the adequacy of its charter and its own
performance. The Governance Committee does not have an express
policy with regard to consideration of director candidates
recommended by shareholders, but it will consider director
candidates proposed by shareholders. The Board of Directors does
not believe that it is necessary to have a policy regarding the
consideration of director candidates recommended by shareholders
due to the infrequency of such recommendations. In general, the
Board of Directors and the Governance Committee believe that
candidates must be highly qualified, exhibiting the experience
and expertise required of the Board of Directors own pool
of candidates and interest in the Companys businesses, and
also the ability to attend and prepare for Board of Directors,
committee and shareholder meetings. Any candidate must state in
advance his or her willingness and interest in serving on the
Board of Directors. Candidates should represent the interests of
all shareholders and not those of a special interest group. A
shareholder wishing to nominate a candidate should do so in
accordance with the guidelines set forth below under the caption
Proposals of Shareholders for the 2009 Annual
Meeting. One meeting of the Governance Committee was held
during 2007.
CORPORATE
GOVERNANCE
Corporate Governance Guidelines.
The Board of
Directors adopted Corporate Governance Principles which comply
with NYSE listing standards. These principles require, among
other things, that a majority of directors on the Board of
Directors meet the criteria for independence defined by the
NYSE. The Company meets this independence standard. From time to
time, the Board of Directors may revise the Corporate Governance
Principles in response to changing regulatory requirements,
evolving best practices and the concerns of the Companys
shareholders and other constituencies. The Corporate Governance
Principles are published on the Companys website at
www.sovranss.com
. A printed copy of the Corporate
Governance Principles will be provided to any shareholder upon
request to the Company at 6467 Main Street, Williamsville, New
York 14221, or by telephone
(716) 633-1850.
Code of Ethics and Code of Ethics for Senior Financial
Officers.
All of the Companys directors and
employees, including the Companys Executive Officers, are
required to comply with the Companys Code of Ethics to
help ensure that the Companys business is conducted in
accordance with the highest standards of moral and ethical
behavior. The Company also has a Code of Ethics for Senior
Financial Officers applicable to the Companys principal
executive officer, principal financial officer and principal
accounting officer and controller, each of whom is bound by the
provisions set forth in the Code of Ethics relating to ethical
conduct, conflicts of interest and compliance with the law. The
Code of Ethics and Code of Ethics for Senior Financial Officers
are published on the Companys web site at
www.sovranss.com
. A printed copy of the Code of Ethics
and the Code of
4
Ethics for Senior Financial Officers will be provided to any
shareholder upon request to the Company at 6467 Main Street,
Williamsville, New York 14221, or by telephone
(716) 633-1850.
Policies And Procedures Regarding Related Party
Transactions.
The Company has established
conflict of interest policies, to which all directors, Executive
Officers and key employees are subject. They are required to
disclose to the Companys Chief Compliance Officer (or, in
the event such person is a director or Executive Officer, to the
Chair of the Audit Committee) in writing each outside
relationship, activity and interest that creates a potential
conflict of interest. All directors, Executive Officers and
other key employees are required to disclose in writing each
year whether they are personally in compliance with such policy.
In addition each director and Executive Officer is required to
complete an annual questionnaire which calls for disclosure of
any transactions in which the Company is or is to be a
participant, on the one hand, and in which such director or
Executive Officer or any member of his family has a direct or
indirect material interest, on the other. The Board of Directors
is of the opinion that these procedures are sufficient to allow
for the review, approval or ratification of any transactions
with related persons that would be required to be disclosed
under applicable SEC rules.
Complaint Procedure; Communications with
Directors.
The Sarbanes-Oxley Act of 2002
requires companies to maintain procedures to receive, retain and
respond to complaints received regarding accounting, internal
accounting controls or auditing matters and to allow for the
confidential and anonymous submission by employees of concerns
regarding questionable accounting or auditing matters. The
Company currently has such procedures in place. Any employee of
the Company may report concerns regarding these matters in the
manner specified in the Companys Employee Complaint
Procedures for Accounting and Auditing Matters, which is
published on the Companys web site at
www.sovranss.com
. A printed copy of the Companys
Employee Complaint Procedures for Accounting and Auditing
Matters will be provided to any shareholder upon request to the
Company at 6467 Main Street, Williamsville, New York 14221, or
by telephone
(716) 633-1850.
The Board of Directors has also established a process for
shareholders or other interested parties to send communications
to the Companys independent directors. Shareholders or
other interested parties may communicate with the Board of
Directors by calling
(716) 633-1850
ext. 6116 or by writing to the Companys Corporate
Secretary. Communications sent to the Company addressed to the
Board of Directors by these methods will be screened by the
Corporate Secretary for appropriateness before either forwarding
or notifying the independent directors of receipt of a
communication.
DIRECTOR
COMPENSATION
The Company pays its Directors who are not also officers or
employees of the Company (an Outside Director) an
annual fee of $25,000. An additional $7,500 is paid to each
member of the Audit Committee, an additional $25,000 is paid to
the chair of the Audit Committee and an additional $5,000 is
paid to the chair of each of the Compensation and Governance
Committees. Outside Directors are also paid a meeting fee of
$1,000 for each special meeting of the Board of Directors
attended. In addition, the Company will reimburse all Directors
for reasonable expenses incurred in attending meetings.
Under the Deferred Compensation Plan for Directors, an Outside
Director may elect to have all or part of their fees credited to
a deferred compensation account in the form of units equivalent
to shares of the Companys Common Stock
(Units). The number of Units credited is equal to
the number of shares of Common Stock that could have been
purchased using the closing price of Common Stock on the day
immediately preceding the date on which the fees were payable.
When the Company declares cash dividends on its Common Stock,
additional Units are credited to the deferred compensation
accounts based on the reinvestment of the dividend on the
dividend record dates. Amounts credited to the deferred
compensation accounts will be paid to Directors in the form of
shares of Common Stock, the number of which shares will equal
the number of Units credited to the accounts.
Pursuant to the 1995 Outside Directors Stock Option Plan
(the Directors Plan), each Outside Director is
granted, effective as of the Outside Directors initial
election or appointment, an option to acquire 3,500 shares
of Common Stock at the fair market value of the Common Stock on
the date of grant. In addition, as of the close of each annual
shareholders meeting after initial appointment or
election, each Outside Director is granted an option to acquire
an additional 2,000 shares of Common Stock at the fair
market value of the Common Stock on the date of grant. The
initial options for 3,500 shares of Common Stock are
exercisable one year from the date of grant based on
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continued service; the Outside Directors options awarded
annually thereafter are exercisable immediately. The exercise
price is payable in cash or by delivery of shares of Common
Stock owned by the Outside Director, or a combination of cash
and shares. The option must be exercised within ten years from
the date of grant. One Outside Director exercised options for
2,000 shares of Common Stock during 2007.
In addition, under the Directors Plan, each Outside
Director is granted annually a number of shares of restricted
stock equal to the base annual fee paid to such Outside Director
multiplied by 0.8 and divided by the fair market value of a
share of Common Stock on the date of grant. Any restricted stock
granted vests one year following the date of grant based on
continued service.
The table below summarizes the compensation paid by the Company
to Outside Directors for the year ended December 31, 2007.
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Fees Earned or
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Restricted Stock
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Option
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All Other
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Paid in Cash
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Awards
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Awards ($)
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Compensation
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Name
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($)(1)
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($)(2)
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(3)
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($)(4)
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Total ($)
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John E. Burns
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$
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58,500
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$
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20,000
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$
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13,120
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$
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992
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$
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92,612
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Michael A. Elia
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$
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38,500
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$
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20,000
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$
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13,120
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$
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992
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$
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72,612
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Anthony P. Gammie
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$
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33,500
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$
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20,000
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$
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13,120
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$
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992
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$
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67,612
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Charles E. Lannon
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$
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31,000
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$
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20,000
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$
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13,120
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$
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992
|
|
|
$
|
65,112
|
|
|
|
|
(1)
|
|
All Outside Directors elected to have their 2007 fees credited
to a deferred compensation account in the form of Units. The
Units credited to each Outside Director were 1,152 for
Mr. Burns, 757 for Mr. Elia, 659 for Mr. Gammie,
and 609 for Mr. Lannon.
|
|
(2)
|
|
Each Outside Director received an award of restricted stock with
a grant date fair value of $20,000. See footnote 2 to the
Companys financial statements included in the Annual
Report on Form
10-K
for the
year ended December 31, 2007 for a discussion of
assumptions used to value the restricted stock awards. In 2007,
each Outside Director was granted 391 shares of restricted
stock, which are not vested but will vest in full on
May 21, 2008.
|
|
(3)
|
|
The amounts in the options award column reflect the 2007 expense
recorded in the Companys financial statements related to
stock options granted, disregarding estimates relating to
service-based vesting conditions. All options are currently
exercisable. The full grant date fair value, in accordance with
FAS 123(R), of each option award in 2007 was $6.56 per share, or
$13,120 in the aggregate for each Outside Director. See footnote
2 to the Companys financial statements included in the
Annual Report on Form
10-K
for the
year ended December 31, 2007 for a discussion of the
assumptions used to value the stock options. Information
regarding the stock option awards outstanding are shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
Name
|
|
Grant Date
|
|
|
Expiration Date
|
|
|
Shares
|
|
|
John E. Burns
|
|
|
5/13/2004
|
|
|
|
5/13/2014
|
|
|
|
2,000
|
|
|
|
|
5/18/2005
|
|
|
|
5/18/2015
|
|
|
|
2,000
|
|
|
|
|
5/18/2006
|
|
|
|
5/18/2016
|
|
|
|
2,000
|
|
|
|
|
5/21/2007
|
|
|
|
5/21/2017
|
|
|
|
2,000
|
|
Michael A. Elia
|
|
|
5/13/2004
|
|
|
|
5/13/2014
|
|
|
|
2,000
|
|
|
|
|
5/18/2005
|
|
|
|
5/18/2015
|
|
|
|
2,000
|
|
|
|
|
5/18/2006
|
|
|
|
5/18/2016
|
|
|
|
2,000
|
|
|
|
|
5/21/2007
|
|
|
|
5/21/2017
|
|
|
|
2,000
|
|
Anthony P. Gammie
|
|
|
5/18/2005
|
|
|
|
5/18/2015
|
|
|
|
2,000
|
|
|
|
|
5/18/2006
|
|
|
|
5/18/2016
|
|
|
|
2,000
|
|
|
|
|
5/21/2007
|
|
|
|
5/21/2017
|
|
|
|
2,000
|
|
Charles E. Lannon
|
|
|
5/18/2005
|
|
|
|
5/18/2015
|
|
|
|
2,000
|
|
|
|
|
5/18/2006
|
|
|
|
5/18/2016
|
|
|
|
2,000
|
|
|
|
|
5/21/2007
|
|
|
|
5/21/2017
|
|
|
|
2,000
|
|
|
|
|
(4)
|
|
Dividends on restricted stock.
|
6
STOCK
OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth for each current Director, each
of whom is a nominee for Director and each of the Executive
Officers named in the Summary Compensation Table and for all
Directors and Executive Officers as a group, information
concerning beneficial ownership of Common Stock as of
March 24, 2008. Unless otherwise stated, to the best of the
Companys knowledge, each person has sole voting and
investment power with respect to the shares listed.
|
|
|
|
|
|
|
|
|
|
|
Shares of Common Stock
|
|
|
|
|
|
|
Beneficially Owned at
|
|
|
Percent of
|
|
|
|
March 24, 2008
|
|
|
Common Stock
|
|
Name
|
|
(1)(2)(3)
|
|
|
Owned
|
|
|
Robert J. Attea
|
|
|
195,138
|
|
|
|
*
|
|
Kenneth F. Myszka
|
|
|
186,814
|
|
|
|
*
|
|
Charles E. Lannon
|
|
|
129,835
|
|
|
|
*
|
|
John E. Burns
|
|
|
8,391
|
|
|
|
*
|
|
Michael A. Elia
|
|
|
9,835
|
|
|
|
*
|
|
Anthony P. Gammie
|
|
|
20,767
|
|
|
|
*
|
|
David L. Rogers
|
|
|
127,966
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Directors and Executive Officers As a Group (seven persons)
|
|
|
678,746
|
|
|
|
3.1
|
%
|
|
|
|
*
|
|
Represents beneficial ownership of less than 1% of outstanding
Common Stock on March 24, 2008.
|
|
(1)
|
|
Includes 6,000, 8,000, 8,000, and 6,000 shares of Common
Stock that may be acquired by Messrs. Lannon, Burns, Elia,
and Gammie, respectively, through the exercise, within sixty
days, of options granted under the 1995 Outside Directors
Stock Option Plan.
|
|
(2)
|
|
Excludes 4,609, 9,576, 8,827 and 5,806 shares of Common
Stock issuable to each of Messrs. Burns, Elia, Gammie and
Lannon, respectively, in payment of amounts credited to their
accounts under the Companys Deferred Compensation Plan for
Directors.
|
|
(3)
|
|
Includes 27,667, 27,102 and 27,761 shares of restricted
stock as to which Messrs. Attea, Myszka and Rogers,
respectively, have voting power but no investment power.
|
7
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to all persons or
groups known to the Company to be beneficial owners of more than
five percent of the outstanding Common Stock of the Company as
of March 24, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
Beneficially
|
|
|
Percent of
|
|
|
|
|
|
|
Owned as of
|
|
|
Common Stock
|
|
Title of Class
|
|
|
Name and Address of Beneficial Owners
|
|
March 24, 2008
|
|
|
Owned
|
|
|
|
Common
|
|
|
Cohen & Steers, Inc.(1)
280 Park Avenue
10th Floor New York, NY 10017
|
|
|
2,823,208
|
|
|
|
12.9
|
%
|
|
Common
|
|
|
FMR LLC(2)
82 Devonshire Street
Boston, MA 02109
|
|
|
2,342,602
|
|
|
|
10.7
|
%
|
|
Common
|
|
|
Morgan Stanley(3)
1585 Broadway
New York, NY 10036
|
|
|
2,040,396
|
|
|
|
9.4
|
%
|
|
Common
|
|
|
The Vanguard Group, Inc.(4)
100 Vanguard Boulevard
Malvern, PA 19355
|
|
|
1,372,694
|
|
|
|
6.3
|
%
|
|
Common
|
|
|
Barclays Global Investors, AG(5)
Apianstrasse 6
D-85774
Unterfohring, Germany
|
|
|
1,339,048
|
|
|
|
6.1
|
%
|
|
|
|
(1)
|
|
All information relating to Cohen & Steers, Inc.
(C&S) is derived from the Schedule 13G/A
filed by it and other entities on February 13, 2008.
According to C&S, of the 2,823,208 shares of the
Companys Common Stock owned by C&S, C&S has the
sole power to vote or direct the vote with respect to
2,746,508 shares and does not share voting power with
respect to any other shares. C&S has the sole power to
dispose or direct the disposition of all 2,823,208 shares
of the Companys Common Stock owned by C&S. The
Company has not independently verified this information.
|
|
(2)
|
|
All information relating to FMR LLC (Fidelity) is
derived from Schedule 13G/A filed by it on February 14,
2008. According to Fidelity, of the 2,342,602 shares of the
Companys Common Stock owned by Fidelity, Fidelity has the
sole power to vote or direct the vote with respect to
547,780 shares and does not share voting power with respect
to any other shares. Fidelity has the sole power to dispose or
direct the disposition of all 2,342,602 shares of the
Companys Common Stock owned by Fidelity. The Company has
not independently verified this information.
|
|
(3)
|
|
All information relating to Morgan Stanley is derived from the
Schedule 13G filed by it and other entities on February 14,
2008. According to Morgan Stanley, of the 2,040,396 shares
of the Companys Common Stock owned by Morgan Stanley,
Morgan Stanley has the sole power to vote or direct the vote
with respect to 1,031,711 shares and does not share voting
power with respect to any other shares. Morgan Stanley has the
sole power to dispose or direct the disposition of all
2,040,396 shares of the Companys Common Stock owned
by Morgan Stanley. The Company has not independently verified
this information.
|
|
(4)
|
|
All information relating to The Vanguard Group, Inc.
(Vanguard) is derived from Schedule 13G/A filed
by it on February 12, 2008. According to Vanguard, of the
1,372,694 shares of the Companys Common Stock owned
by Vanguard, Vanguard has the sole power to vote or direct the
vote with respect to 29,961 shares and does not share
voting power with respect to any other shares. Vanguard has the
sole power to dispose or direct the disposition of all
1,372,694 shares of the Companys Common Stock owned
by Vanguard. The Company has not independently verified this
information.
|
|
(5)
|
|
All information relating to Barclays Global Investors, AG
(Barclays) is derived from Schedule 13G filed
by it and other entities on February 6, 2008. According to
Barclays, of the 1,339,048 shares of the Companys
Common Stock owned by Barclays, Barclays has the sole power to
vote or direct the vote with respect to
|
8
|
|
|
|
|
992,149 shares and does not share voting power with respect
to any other shares. Barclays has the sole power to dispose or
direct the disposition of all 1,339,048 shares of the
Companys Common Stock owned by Barclays. The Company has
not independently verified this information.
|
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires the Companys Directors and officers, and persons
who own more than 10% of a registered class of the
Companys equity securities, to file reports of ownership
and changes in ownership with the SEC and the NYSE. Directors,
officers and greater-than-10% shareholders are required by SEC
regulation to furnish the Company with copies of all
Section 16(a) reports they file. Based solely on review of
information furnished to the Company and reports filed through
the Company, the Company believes that all Section 16(a)
filing requirements applicable to its Directors, officers and
greater-than-10% beneficial owners were complied with during
2007.
2.
AMENDMENT TO THE DEFERRED COMPENSATION PLAN FOR DIRECTORS OF
SOVRAN
SELF STORAGE, INC.
The Board of Directors has adopted a resolution recommending
that Shareholders consider and approve a proposal to amend the
Deferred Compensation Plan for Directors of Sovran Self Storage,
Inc. (the Deferred Compensation Plan) in order to
increase the number of shares available for issuance under the
Deferred Compensation Plan from 45,000 to 75,000 shares of
Common Stock.
The Deferred Compensation Plan is intended to provide Outside
Directors the opportunity to defer the receipt of their annual
retainer fees and fees for attendance at meetings of the Board
of Directors and its committees and to receive those deferred
fees in the form of shares of Common Stock. All Outside
Directors (currently, four persons) are eligible to participate
in the Deferred Compensation Plan. The maximum number of shares
that may be issued under the Deferred Compensation Plan
currently is 45,000, subject to adjustment to reflect certain
changes in capitalization, such as stock splits, stock dividends
or recapitalizations.
The following is a summary of the Deferred Compensation Plan.
The Deferred Compensation Plan permits Outside Directors to
defer to a later year receipt of all or a portion of their
annual retainer and meeting fees (Compensation) that
otherwise would be includible in income for tax purposes in the
year in which it would have been paid. Under current tax laws,
no income will be recognized by an Outside Director at the time
of deferral. Upon payment, an Outside Director will recognize
ordinary income in an amount equal to the sum of the fair market
value of the shares of Common Stock received and the cash
received for any fractional share. The Company will be entitled
to a deduction equal to the income recognized by the Outside
Director.
Under the Deferred Compensation Plan, Outside Directors may
defer all or part of their Compensation otherwise payable in
cash. Compensation which is deferred will be credited to each
Outside Directors account under the Deferred Compensation
Plan (Account) in the form of Units. The number of
Units credited is determined by dividing the amount of
Compensation deferred by the closing price of Common Stock on
the New York Stock Exchange (the Stock Price) on the
immediately preceding business day. When cash dividends are paid
on Common Stock the Outside Directors Account will be
credited with a number of Units determined by multiplying the
number of Units in the Account on the dividend record date by
the per-share dividend amount and then dividing the product by
the Stock Price on the dividend record date. In the case of
stock dividends, the Outside Directors Account will be
credited with a number of Units determined by multiplying the
number of Units in the Account by the stock dividend declared.
All amounts credited to an Outside Directors Account will
be paid to the Outside Director in the form of shares of Common
Stock, the number of which shares will equal the number of Units
credited to the Outside Directors Account. An Outside
Director may elect to receive the shares in a lump sum on a date
specified by such Outside Director or in quarterly or annual
installments over a specified period and commencing on a
specified date. If an Outside Director makes no election, shares
will be distributed in a lump sum within ten business days of
the cessation of the Outside Directors services as a
Director. In the event of an Outside Directors Disability
(as defined
9
in the Deferred Compensation Plan) or death, all amounts
credited to the Outside Directors Account as of the date
of disability or death will be paid to the Director or to the
beneficiary designated by the Outside Director, or if none, to
the Outside Directors estate in shares of Common Stock on
or before the later of the last day of the calendar year in
which the Outside Directors death or disability occurs or
the 90th day following the date on which such Outside
Directors death or disability occurs.
If a Change In Control (as defined in the Deferred Compensation
Plan) occurs and an Outside Director ceases to be a Director
within two years thereafter, then all amounts credited to the
Outside Directors Account as of such date of termination
will be paid promptly in shares of Common Stock.
The Deferred Compensation Plan permits an Outside Director, with
the approval of the Board of Directors, to withdraw, in the form
of shares, amounts credited to the Outside Directors
Account in the case of financial hardship arising from an
unforeseeable emergency. However, the amount withdrawn cannot
exceed the amount reasonably necessary to meet the financial
hardship.
The Deferred Compensation Plan may be amended or terminated at
any time by the Board of Directors, but no amendment or
termination shall affect amounts previously credited to an
Outside Directors Account.
The additional shares of Common Stock issuable will be
registered pursuant to the Securities Act of 1933 prior to
issuance.
Only a Director who is an Outside Director is eligible to
participate in the Deferred Compensation Plan. The number of
persons currently eligible to participate in the Deferred
Compensation Plan is four. Because the aggregate benefits under
the Deferred Compensation Plan are dependent upon the number of
Outside Directors who elect to participate in the Deferred
Compensation Plan, the portion of their Compensation that
participating Outside Directors elect to defer and the market
price of Common Stock when deferred Compensation and dividends
are credited to their Accounts, it is not possible to predict
what benefits will be received under the Deferred Compensation
Plan.
New Plan
Benefits
Deferred Compensation Plan for Directors, as amended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar Value
|
|
Position
|
|
Number of Units
|
|
|
of Grant
|
|
|
Outside Directors as a Group
|
|
|
30,000
|
|
|
|
(1
|
)
|
|
|
|
(1)
|
|
The Deferred Compensation Plan provides that an Outside Director
may elect to defer all or part of their Compensation otherwise
payable in cash, and that Compensation which the Outside
Director elects to defer shall be converted into Units
determined by dividing the amount of such Compensation by the
Stock Price on the immediately preceding day. Since the amount
of Compensation deferrals during any given future period is
unknown and the Stock Price upon the effective time of deferral
unknown, it cannot be determined how many Units will be issued
in any given period. However, the grant of Units to each Outside
Director is an exchange of Compensation (that is otherwise
immediately payable in cash) for Units at the market price.
|
Approval of the amendment requires the affirmative vote of a
majority of the shares of Common Stock cast, provided that the
total vote cast on the proposal represents over 50 percent
of all of the shares of Common Stock entitled to vote on the
proposal. Abstentions will have the effect of a vote against the
proposal. Broker non-votes will not be counted as votes cast.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
PROPOSAL TO APPROVE THE AMENDMENT TO THE DEFERRED
COMPENSATION PLAN FOR DIRECTORS.
10
3.
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
Subject to ratification by the Shareholders and based upon the
recommendation of the Audit Committee, the Board of Directors
has reappointed Ernst & Young LLP as its independent
registered public accounting firm to audit the financial
statements of the Company for the current fiscal year. Fees
billed to the Company for fiscal years 2007 and 2006 by
Ernst & Young LLP were as follows:
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Audit Fees
|
|
$
|
344,343
|
|
|
$
|
451,690
|
|
Audit-Related Fees
|
|
$
|
10,015
|
|
|
$
|
9,250
|
|
Tax Fees
|
|
$
|
119,560
|
|
|
$
|
130,127
|
|
All Other Fees
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
TOTAL FEES
|
|
$
|
473,918
|
|
|
$
|
591,067
|
|
Audit fees include fees for the audit of the Companys
consolidated financial statements, interim reviews of the
Companys quarterly financial statements, and the audit of
the internal controls over financial reporting. In 2007, audit
fees also included $50,553 related to the audit of historical
summaries for certain 2007 acquisitions. In 2006, audit fees
also included $157,004 related to the Companys common
stock offering and the audit of historical summaries for certain
2006 acquisitions. Audit related fees include the audit of the
Companys 401(k) plan. Tax fees include fees for services
relating to tax compliance, tax planning and tax advice. These
services include assistance regarding federal and state tax
compliance, and return preparation.
The Audit Committee has adopted a policy that requires advance
approval of the Audit Committee for all audit, audit-related,
tax services, and other services to be provided by the
independent registered public accounting firm to the Company.
The Audit Committee has delegated to its Chairman authority to
approve permitted services, provided that the Chairman reports
any decisions to the Audit Committee at its next scheduled
meeting. During 2007, all fees for audit services, all fees for
audit-related services and all fees for tax services were
approved under this policy.
Representatives of the firm of Ernst & Young LLP are
expected to be present at the Annual Meeting and will have an
opportunity to make a statement if they so desire and will be
available to respond to appropriate questions.
Approval of the appointment requires the affirmative vote of a
majority of the shares of Common Stock cast, provided a quorum
is present at the meeting. Broker non-votes and abstentions will
have no effect on the outcome.
THE AUDIT
COMMITTEE AND THE BOARD OF DIRECTORS RECOMMEND A VOTE
FOR
THE PROPOSAL TO RATIFY THE APPOINTMENT OF
ERNST & YOUNG LLP AS
THE COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM.
REPORT OF
THE AUDIT COMMITTEE
Management has the primary responsibility for the integrity of
the Companys financial information and the financial
reporting process, including the system of internal control over
financial reporting. Ernst & Young LLP, the
Companys independent registered public accounting firm, is
responsible for conducting independent audits of the
Companys financial statements and managements
assessment of the effectiveness of internal controls over
financial reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United States) and
expressing an opinion on the financial statements and
managements assessment based upon those audits. The Audit
Committee is responsible for overseeing the conduct of these
activities by management and Ernst & Young LLP.
As part of its oversight responsibility, the Audit Committee has
reviewed and discussed the audited financial statements, the
adequacy of financial controls and the effectiveness of the
Companys internal controls over financial reporting with
management and Ernst & Young LLP. The Audit Committee
also has discussed with Ernst & Young LLP the matters
required to be discussed by Statement on Auditing Standards
No. 61 (Communication with Audit Committees). The Audit
Committee has received the written disclosures and the letter
from
11
Ernst & Young LLP required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit
Committees) and has discussed with Ernst & Young LLP
that firms independence.
Based upon these reviews and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial
statements be included in Sovran Self Storage, Inc.s
Annual Report on
Form 10-K
for the year ended December 31, 2007 for filing with the
Securities and Exchange Commission.
Members of the Audit Committee
JOHN E. BURNS, CHAIR
MICHAEL A. ELIA
ANTHONY P. GAMMIE
THE FOREGOING REPORT SHALL NOT BE DEEMED TO BE
SOLICITING MATERIAL OR TO BE FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION AND SHOULD NOT BE DEEMED
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING
BY REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE
AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
EXECUTIVE
COMPENSATION
EXECUTIVE
OFFICERS OF THE COMPANY
The following named persons are the Executive Officers of the
Company:
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Title
|
|
Robert J. Attea
|
|
|
66
|
|
|
Chairman of the Board and Chief Executive Officer
|
Kenneth F. Myszka
|
|
|
59
|
|
|
President and Chief Operating Officer
|
David L. Rogers
|
|
|
52
|
|
|
Chief Financial Officer and Secretary
|
David L. Rogers.
From 1995 to the present,
David L. Rogers has served as the Companys Chief Financial
Officer and Secretary.
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation Objectives.
As a real estate
investment and management company, the Companys long-term
success depends on its ability to acquire, improve, operate and
finance self-storage properties in a manner that will enhance
shareholder value, market presence and operational efficiency.
Competitive and marketplace pressures require constant
improvements to productivity, innovation in providing customer
service, and optimal allocation of capital resources. To achieve
these goals, it is critical that the Company be able to attract,
motivate, and retain highly talented individuals at all levels
of the organization with appropriate skill-sets who are
committed to the Companys core values of excellence,
integrity, and respect for people. The Companys
compensation philosophy is to provide compensation programs that
will motivate the Executive Officers to improve operating
results and profitability. Rewarding growth in funds from
operations (FFO) per share aligns the interests of
management and shareholders by increasing FFO per share growth.
The Companys incentive compensation also promotes growth
through selective acquisitions and improvements and enhancements
to existing properties, obtaining a low cost of funds and
improving operating efficiencies through technical innovation.
The Compensation Committee of the Board of Directors has
oversight responsibility in administering our executive
compensation programs, determines compensation of the Executive
Officers on an annual basis and provides guidance over the
Companys overall compensation programs.
The Compensation Committee historically has approached its
determination of the Chief Executive Officers compensation
in the same fashion as it determines compensation for the Chief
Operating Officer and Chief
12
Financial Officer. The Compensation Committee essentially treats
these three officers as a team with complimentary skill sets
and, despite their different roles, expects them to work as a
team to achieve Company objectives. Accordingly, compensation of
these three executive positions is very similar. This approach,
in the view of the Compensation Committee, motivates them to
work as a team to attain Company goals.
Components of Executive Compensation.
For
2007, the compensation of the Executive Officers consisted of
the same five primary components used in prior years:
(i) base salary, (ii) annual incentive awards for
performance, payable in cash and restricted stock,
(iii) long-term incentive compensation, (iv) severance
benefits, and (v) welfare benefits. The Compensation
Committee believes that its program encourages short and
long-term performance in a way that promotes Company objectives
and aligns their interests with those of shareholders. Following
is a discussion of the Compensation Committees
considerations in establishing each of these components for the
Executive Officers for 2007.
Base Salary.
Base salary is the guaranteed
element of the Executive Officers annual cash
compensation. The value of base salary generally reflects the
executives actual performance, skill set and the market
value of that skill set. A competitive salary structure is the
most fundamental component of executive compensation used by the
Compensation Committee to assist in attracting and retaining
qualified executives. In 2006, the Compensation Committee, in
setting salaries for the executive officers, considered
recommendations of its compensation consultant,
Longnecker & Associates, whose advice was based upon
its comparisons to executive officers of public real estate
companies with market capitalization and enterprise value
similar to that of the Company, such as EastGroup Properties
Inc., Lexington Realty Trust, Parkway Properties, Inc., PS
Business Parks, Inc., U-Store-It Trust and Tarragon Corporation.
This data was used to test for reasonableness and
competitiveness of base salaries but the Compensation Committee
did not specifically target or benchmark a certain
level of base salary within such peer group. In 2007, the
Compensation Committee proposed increases in the amount of 5% in
the salaries of Messrs. Attea, Myszka and Rogers, which
took into consideration the general range of percentage salary
increases initially proposed for other management employees of
the Company. However, Messrs. Attea, Myszka and Rogers each
elected to receive an increase of approximately 2% in order to
enable the Company to provide greater salary increases to other
management employees of the Company, which increases ranged from
approximately 8% to 13%. In 2008, the Compensation Committee
increased the salaries of Messrs. Attea, Myszka and Rogers
by approximately 5% which increase was consistent with the
increases being received by other management employees of the
Company.
Annual Incentive Awards.
The Company has
established annual bonus guidelines in order to align the
Executive Officers goals with the Companys sales and
earnings growth objectives for the current year. These
guidelines were established in 1995 with the assistance of the
Companys investment banker and have been modified from
time to time by the Compensation Committee upon the advice of
the Compensation Committees compensation consultant and to
respond to changes in industry conditions. The Compensation
Committee, consistent with historical practices and what it
believes are compensation best practices, is currently reviewing
the metrics of the guidelines to ensure the incentive awards are
appropriately motivating key employees and rewarding such key
employees for Company performance. The components of the
guidelines for 2007 related to growth in FFO per share and other
performance factors as described below.
FFO Growth Targets.
Pursuant to annual
incentive guidelines, Executive Officers could earn a bonus of
up to 90% of their base salaries based upon the percentage
increase of FFO per share for the current year over the FFO per
share for the previous year. No bonus is earned unless FFO per
share growth is at least 5% over the prior year. To achieve the
maximum bonus, FFO per share growth must exceed 15%. The
Companys FFO per share is computed in accordance with
the National Association of Real Estate Investment Trusts
(NAREIT) guidelines. The Company believes that FFO
per share growth is an extremely important measurement of
successful performance. FFO is used by industry analysts and
investors as a supplemental operating performance measure of an
equity REIT. NAREIT created FFO as a supplemental measure of
REIT operating performance that excludes historical cost
depreciation, among other items, from net income determined in
accordance with generally accepted accounting principles, or
GAAP. FFO is a non-GAAP financial measure developed by NAREIT to
compare the operating performance of REITs. The most
comparable GAAP measure is net income (loss). FFO should not be
considered as a substitute for net
13
income or any other measures derived in accordance with GAAP.
For the 2007 year, no bonuses were earned by the Executive
Officers with respect to this element of the incentive
guidelines.
Comparative FFO.
In addition, each Executive
Officer could earn up to 22.5% of his base salary if the FFO per
share percentage growth exceeded the average FFO growth of
companies in the same industry segment over the same period. No
bonus for this criteria was earned in 2007.
Other Performance Factors.
In addition, the
Compensation Committee, in its discretion, may award a bonus up
to 50% of base salary based upon the Companys achievements
and overall performance during the preceding year. Each
Executive Officer was awarded a bonus of 33.5% of salary for
2007 pursuant to this component. The factors considered by the
Compensation Committee in making this award included the
quantity and quality of acquisitions, financial performance,
improvement of financial ratios, the successful implementation
of enhancements to existing properties, increases in operating
efficiency and productivity, improvements in same store sales,
decreases in the cost of funds and successful implementation of
technological innovations.
Form of Payment.
While the bonuses relating to
FFO targets are normally paid in cash, all or a substantial part
of the bonus relating to other performance factors
is paid in shares of restricted stock which have vesting periods
ranging from two to nine years, all as determined by the
Compensation Committee. The Compensation Committee determined
that 50% of the 2007 annual bonus relating to other performance
factors was to be awarded in shares of restricted stock. As
such, grants were made to Messrs. Attea, Myszka and Rogers
of 2,020, 1,966 and 1,966 shares of restricted stock,
respectively, on February 26, 2008. The shares granted to
Messrs. Attea, Myszka and Rogers vest ratably over a two
year period, a four year period and a seven year period,
respectively. In establishing the vesting periods, the
Compensation Committee considered the respective ages of the
recipients. The balance of such 2007 annual bonus was paid in
cash.
Long-Term Incentive Plan.
For several years,
the Compensation Committee has been considering various
alternatives of long-term incentive compensation programs that
would align the interest of management with shareholders,
provide retention incentives and minimize the impact on
earnings. The compensation consultant has recommended that the
Compensation Committee use restricted stock awards with a
four-year vesting period. In 2007, the Compensation Committee
determined to grant such awards to the Executive Officers;
however, in lieu of a four-year vesting period it decided to
provide for a ratable eight-year vesting period to minimize the
financial impact on the Company. Thus, the Compensation
Committee made grants in 2007 to Messrs. Attea, Myszka and
Rogers of 5,994, 5,837 and 5,837 shares of restricted
stock, respectively, with 12.5% of such shares vesting each
year. The Compensation Committee determined the number of shares
awarded by relying upon the recommendation of its compensation
consultant, which recommendation was based upon its experience
with similarly sized REITs. These awards were made under the
2005 Award and Option Plan previously approved by shareholders.
The Company has not granted stock options to Executive Officers
since 2001; however, stock options granted in the past and stock
options that might be granted in the future are granted
effective as of the date on which the Compensation Committee
authorizes such grant and the exercise price, consistent with
the 2005 Award and Option Plan (and predecessor plans), has been
and will be the average of the high and low price of the shares
on the date of grant. The Company does not have any programs,
plans or practices of awarding stock options and setting the
exercise price based on the stocks price on a date other
than the actual grant date. The Company does not plan to time,
and has not timed, its release of material non-public
information for the purpose of affecting the value of executive
compensation.
Severance Benefits.
Each of the Executive
Officers is a party to an employment agreement with severance
benefits. A description of the terms of the agreements can be
found under the heading Employment Agreements
beginning on page 19 of this Proxy Statement. In entering
into these agreements, the Compensation Committee desired to
assure that we would have the continued dedication of the
Executive Officers, notwithstanding the possibility of a change
in control, and to retain such Executive Officers in our employ.
The Compensation Committee believes that, should the possibility
of a change in control arise, the Company should be able to
receive and rely upon our Executive Officers advice as to
the best interests of our Company and without the concern that
such Executive Officer might be distracted by the personal
uncertainties and risks created by a potential change in
control. The actual benefits and payments to be made to the
Executive Officers, as set forth in the employment
14
agreements, were determined based on the Compensation
Committees business judgment, advice received by the
Compensation Committee from its compensation consultant and
negotiations with each officer at the time of entering into the
agreements.
Welfare Benefits.
The Executive Officers also
receive benefits offered to all full time employees of the
Company, including medical insurance coverage, disability
insurance, life insurance and matching contributions to the
Companys 401(k) Plan. Under the terms of the applicable
welfare benefit plans, the cost of these employee benefits is
partially borne by the employee, including each Executive
Officer. These plans are nondiscriminatory except that the
Executive Officers may be reimbursed for medical expenditures
not covered by the Companys standard plan. In 2007
Messrs. Attea and Myszka received reimbursements of $5,000
and $3,531, respectively. The benefits paid to the Executive
Officers in 2007 are included in the Summary Compensation Table
below.
Perquisites.
In addition, the Executive
Officers each receive $15,600 per year to be applied to
automobile allowance, club memberships and miscellaneous
expenses. These relatively inexpensive components of executive
compensation are primarily viewed as necessary to keep
compensation levels competitive and to assist in attracting and
retaining qualified executives. The dollar value of perquisites
is not significant relative to the other components of executive
compensation. These amounts are included in the Summary
Compensation Table below.
Tax Deductibility of
Compensation.
Section 162(m) of the Internal
Revenue Code limits to $1 million a publicly held
corporations tax deduction each year for compensation to
any covered employee, except for certain qualifying
performance-based compensation. Because the Company
qualifies as a REIT under the Internal Revenue Code, it is not
subject to Federal income taxes. Thus the payment of
compensation that does not satisfy the requirements of
Section 162(m) does not have a material adverse consequence
to the Company, provided the Company continues to distribute 90%
of its taxable income. A larger portion of shareholder
distributions may be subject to Federal income tax as dividend
income, rather than a return of capital, and any such
compensation allocated to the Companys taxable REIT
subsidiaries whose income is subject to Federal income tax would
result in an increase in income taxes due to the inability to
deduct such compensation. Although the Company will be mindful
of the limits imposed by Section 162(m), the Company
nevertheless reserves the right to structure the compensation
packages and awards in a manner that may exceed the limitation
on deduction imposed by Section 162(m).
15
SUMMARY
COMPENSATION TABLE
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Change in
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Pension Value
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and Nonquali-
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Non-Equity
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fied Deferred
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Stock
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Option
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Incentive Plan
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Compensation
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All Other
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Salary
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Bonus
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Awards
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Awards
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Compensation
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Earnings
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Compensations
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Total
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Name and Principal Position
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Year
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($)
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($)
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($)(1)(3)
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($)
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($)(2)(4)
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($)
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($)(5)
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($)
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Robert J. Attea
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2007
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$
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386,632
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$
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421,535
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$
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64,761
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$
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116,558
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$
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989,486
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Chairman of the Board and
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2006
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$
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379,168
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$
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292,895
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$
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151,668
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$
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109,044
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$
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932,775
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Chief Executive Officer
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Kenneth F. Myszka
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2007
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$
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376,456
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$
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314,769
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$
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63,056
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$
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111,309
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$
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865,590
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President and Chief
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2006
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$
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369,056
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$
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228,666
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$
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147,622
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$
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104,624
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$
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849,968
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Operating Officer
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David L. Rogers
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2007
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$
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376,456
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$
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279,528
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$
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63,056
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$
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108,928
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$
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827,968
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Chief Financial Officer
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2006
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$
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369,056
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$
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209,648
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$
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147,622
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$
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99,011
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$
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825,337
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and Secretary
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(1)
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The stock awards amounts shown for 2007 represent the dollar
value of the restricted stock earned by the Executive Officers
and recognized by the Company as expense in 2007 for financial
statement reporting purposes in accordance with FAS 123(R),
disregarding estimates relating to service-based vesting
conditions. See Footnote 2 to the Companys financial
statements included in the Annual Report on
Form 10-K
for the year ended December 31, 2007 for a discussion of
the assumptions used to value stock awards.
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(2)
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Amount for 2007 represents cash payment for 2007 performance
made in March 2008 to Messrs. Attea, Myszka and Rogers under the
Companys annual incentive award program. For more
information on these awards, see the Compensation
Discussion and Analysis-Components of Executive
Compensation and the Grants of Plan-Based Awards Table
below.
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(3)
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The stock awards amounts shown for 2006 represent the dollar
value of the restricted stock earned by the Executive Officers
and recognized by the Company as expense in 2006 for financial
statement reporting purposes in accordance with FAS 123(R),
disregarding estimates relating to service-based vesting
conditions. See Footnote 2 to the Companys financial
statements included in the Annual Report on
Form 10-K
for the year ended December 31, 2006 for a discussion of
the assumptions used to value stock awards.
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(4)
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Amount for 2006 represents cash payment for 2006 performance
made in March 2007 to Messrs, Attea, Myszka and Rogers under the
Companys annual incentive award program. For more
information on these awards, see the Compensation
Discussion and Analysis-Components of Executive
Compensation and the Grants of Plan-Based Awards Table
below.
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(5)
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All other compensation includes the following:
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Supplemental
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401(k)
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Health
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Medical and Life
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Dividends on
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Total All Other
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Name
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Allowances*
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Match
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Coverage
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Insurance Costs
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Restricted Stock
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Compensation
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Robert J. Attea
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2007
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$
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15,600
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$
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4,500
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$
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5,000
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$
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11,180
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$
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80,278
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$
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116,558
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2006
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$
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15,600
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$
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4,873
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$
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3,118
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$
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9,005
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$
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76,448
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$
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109,044
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Kenneth F. Myszka
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2007
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$
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15,600
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$
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4,500
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$
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3,531
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$
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11,253
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$
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76,425
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$
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111,309
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2006
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$
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15,600
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$
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6,230
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$
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4,738
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$
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8,980
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$
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69,076
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$
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104,624
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David L. Rogers
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2007
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$
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15,600
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$
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4,500
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$
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11,253
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$
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77,575
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$
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108,928
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2006
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$
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15,600
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$
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5,355
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$
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8,980
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$
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69,076
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$
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99,011
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*
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Includes an annual allowance for an automobile, club dues and
other miscellaneous expenses.
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16
Grant of
Plan-Based Awards for 2007
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All Other
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Option Awards:
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Grant Date
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Estimated Possible Payouts
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Estimated Future Payouts
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Number of
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Exercise or
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Fair Value
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Under Non-Equity Incentive
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Under Equity Incentive
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All Other
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Securities
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Base Price
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of Stock
|
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|
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Plan Awards
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Plan Awards
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Stock Awards:
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Underlying
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of Option
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and Option
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Grant
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Threshold
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Target
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Maximum
|
|
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Threshold
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Target
|
|
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Maximum
|
|
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Units
|
|
|
Options
|
|
|
Awards
|
|
|
Awards
|
|
Name
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)(2)
|
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|
(#)
|
|
|
($/sh)
|
|
|
($)(5)
|
|
|
Robert J. Attea
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|
|
2/26/07
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|
|
1,902
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(3)
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|
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|
113,749
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|
|
|
|
2/26/07
|
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|
|
|
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|
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5,994
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(4)
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|
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358,471
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|
|
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N/A
|
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|
|
|
|
|
|
|
|
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|
628,277
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|
|
|
|
|
|
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|
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(6)
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|
|
|
|
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Kenneth F. Myszka
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|
|
2/26/07
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,851
|
(3)
|
|
|
|
|
|
|
|
|
|
|
110,699
|
|
|
|
|
2/26/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,837
|
(4)
|
|
|
|
|
|
|
|
|
|
|
349,082
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
611,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Rogers
|
|
|
2/26/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,851
|
(3)
|
|
|
|
|
|
|
|
|
|
|
110,699
|
|
|
|
|
2/26/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,837
|
(4)
|
|
|
|
|
|
|
|
|
|
|
349,082
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
611,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
This is not the amount earned but is the maximum amount that
could have been earned under the Annual Incentive Award based
upon 2007 performance. The actual amount that was earned and
paid in cash is set forth in the Summary Compensation Table.
The Company also issued shares of restricted stock as part of
such bonus earned. See item 6 below.
|
|
(2)
|
|
Holders of restricted shares are entitled to the same dividend
and voting rights as are holders of the Companys Common
Stock.
|
|
(3)
|
|
Restricted shares issued in 2007 as part of each
executives 2006 bonus. The shares granted to
Messrs. Attea, Myszka and Rogers vest ratably over a two
year period, a four year period and a seven year period,
respectively The cash portion of each executives 2006
bonus is included in the Summary Compensation Table as 2006
non-equity incentive plan compensation.
|
|
(4)
|
|
Restricted shares issued in 2007 as a long-term incentive
compensation award, with 12.5% of such shares vesting each year.
Such shares were issued under the 2005 Award and Option Plan.
|
|
(5)
|
|
Amount represents full grant date fair value of restricted stock
awards granted in 2007 computed in accordance with FAS 123R.
|
|
(6)
|
|
The Company also issued Messrs. Attea, Myszka and Rogers
2,020, 1,966 and 1,966 shares of restricted stock,
respectively, on February 26, 2008, as part of each
executives 2007 bonus. The shares granted to
Messrs. Attea, Myszka and Rogers vest ratably over a two
year period, a four year period and a seven year period,
respectively. The cash portion of each executives 2007
bonus is included in the Summary Compensation Table as 2007
non-equity incentive plan compensation.
|
17
Outstanding
Equity Awards At December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
Value or
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Unearned
|
|
|
Value of
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
Shares,
|
|
|
Unearned
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
Units or
|
|
|
Shares, Units
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
Other
|
|
|
or Other
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Stock that
|
|
|
Stock that
|
|
|
Rights that
|
|
|
Rights that
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options (#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested (#)
|
|
|
Vested ($)(1)
|
|
|
Vested (#)
|
|
|
Vested ($)
|
|
|
Robert J. Attea
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,581
|
|
|
$
|
263,898
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,017
|
|
|
$
|
80,882
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,346
|
|
|
$
|
94,075
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,320
|
|
|
$
|
52,932
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,040
|
|
|
$
|
81,804
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,208
|
|
|
$
|
88,541
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,812
|
|
|
$
|
273,161
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,902
|
|
|
$
|
76,270
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,994
|
|
|
$
|
240,359
|
(10)
|
|
|
|
|
|
|
|
|
Kenneth F. Myszka
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,175
|
|
|
$
|
207,518
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,017
|
|
|
$
|
80,882
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,296
|
|
|
$
|
92,070
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,282
|
|
|
$
|
51,408
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,985
|
|
|
$
|
79,599
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,215
|
|
|
$
|
128,922
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,029
|
|
|
$
|
241,763
|
(16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,851
|
|
|
$
|
74,225
|
(17)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,837
|
|
|
$
|
234,064
|
(18)
|
|
|
|
|
|
|
|
|
David L. Rogers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,175
|
|
|
$
|
207,518
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,017
|
|
|
$
|
80,882
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,296
|
|
|
$
|
92,070
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,282
|
|
|
$
|
51,408
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,985
|
|
|
$
|
79,599
|
(14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,675
|
|
|
$
|
147,368
|
(19)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,029
|
|
|
$
|
241,763
|
(16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,851
|
|
|
$
|
74,225
|
(20)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,837
|
|
|
$
|
234,064
|
(18)
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Market value of unvested shares is based on December 31,
2007 closing stock price.
|
|
(2)
|
|
Restricted shares vest at a rate of 2,194 shares per year
through 2010
|
|
(3)
|
|
Restricted shares vest at a rate of 673 shares per year
through 2010
|
|
(4)
|
|
Restricted shares vest at a rate of 782 shares per year
through 2010
|
|
(5)
|
|
Restricted shares vest at a rate of 659 shares per year
through 2009
|
|
(6)
|
|
Restricted shares vest at a rate of 1,020 shares per year
through 2009
|
|
(7)
|
|
Restricted shares vest at a rate of 2,208 shares per year
through 2008
|
|
(8)
|
|
Restricted shares vest at a rate of 973 shares per year
through 2014
|
|
(9)
|
|
Restricted shares vest at a rate of 951 shares per year
through 2009
|
|
(10)
|
|
Restricted shares vest at a rate of 749 shares per year
through 2015
|
|
(11)
|
|
Restricted shares vest at a rate of 1,725 shares per year
through 2010
|
18
|
|
|
(12)
|
|
Restricted shares vest at a rate of 765 shares per year
through 2010
|
|
(13)
|
|
Restricted shares vest at a rate of 640 shares per year
through 2009
|
|
(14)
|
|
Restricted shares vest at a rate of 993 shares per year
through 2009
|
|
(15)
|
|
Restricted shares vest at a rate of 1,072 shares per year
through 2010
|
|
(16)
|
|
Restricted shares vest at a rate of 861 shares per year
through 2014
|
|
(17)
|
|
Restricted shares vest at a rate of 463 shares per year
through 2011
|
|
(18)
|
|
Restricted shares vest at a rate of 730 shares per year
through 2015
|
|
(19)
|
|
Restricted shares vest at a rate of 612 shares per year
through 2013
|
|
(20)
|
|
Restricted shares vest at a rate of 264 shares per year
through 2014
|
Option
Exercises and Stock Vested In 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized
|
|
|
Acquired on
|
|
|
Value Realized
|
|
|
|
Exercise
|
|
|
on Exercise
|
|
|
Vesting
|
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)(1)
|
|
|
Robert J. Attea
|
|
|
|
|
|
|
|
|
|
|
8,509
|
|
|
$
|
467,302
|
|
Kenneth F. Myszka
|
|
|
|
|
|
|
|
|
|
|
6,729
|
|
|
$
|
365,823
|
|
David L. Rogers
|
|
|
|
|
|
|
|
|
|
|
6,269
|
|
|
$
|
340,372
|
|
|
|
|
(1)
|
|
Amounts reflect the market value of the Common Stock on the day
the Common Stock vested.
|
EMPLOYMENT
AGREEMENTS
In 1999, the Company entered into employment agreements with
Messrs. Attea, Myszka and Rogers. Each employment agreement
has an indefinite term but can be terminated by the Company
(a) in the event of the executives disability,
(b) for cause, or (c) upon 30 days
prior written notice to the executive. Each executive may
terminate his employment agreement (a) for good
reason, or (b) by providing 60 days prior
written notice to the Company. Each employment agreement may
also be terminated by agreement of the Company and the
executive. Each employment agreement prohibits the executive,
during employment and during the one-year period following
termination of employment, from engaging in the self-storage
business as an employee, consultant or owner.
The employment agreements each provide for severance payments in
the event the executives employment is terminated by the
Company without cause or he resigns for good
reason. Such severance payments would be made for a period
of 36 months following the termination of the
executives employment, and each monthly payment would be
an amount equal to one-twelfth of the sum of the highest
(i) base salary earned by such executive during any
calendar year, (ii) bonus and other incentive compensation
earned by such executive during any calendar year, and
(iii) value of any restricted stock awards during any
calendar year to such executive. No severance benefits are
payable if the executives employment is terminated for
cause or if the executive retires or voluntarily
terminates his employment without good reason.
In addition, if the Company undergoes a change in
control while severance is being paid, the remaining
severance payment would be paid to the executive in a lump sum
within 30 days after the change in control
occurs. Further, if the executive becomes entitled to severance
payments at any time following a change in control
of the Company, the severance payments would be paid to the
executive in a lump sum within 30 days of his termination
of employment. Each employment agreement provides that the
severance payments to the executive will be grossed
up if such severance payments are determined to be subject
to the excise tax imposed by Section 4999 of the Internal
Revenue Code to hold the executive harmless against the impact,
if any, of such excise tax. In addition, the Company must
reimburse the executive for his legal fees in connection with
any good faith claim for severance payments under the employment
agreement. Each employment agreement provides that the severance
payments will not be offset or mitigated by any income from
another source during the severance period.
19
The employment agreements also provide for payments in the event
of termination by reason of the executives death or
disability during the term of his employment agreement. Such
payments will be paid in eight quarterly installments following
the date of the executives death or disability. Each
quarterly payment shall be an amount equal to one-fourth of the
then effective annual base salary of the executive at the time
of his death or disability. In addition, the executive will be
paid a pro rata portion of the incentive compensation earned by
the executive during the calendar year in which he dies or
becomes disabled. In the case of the executives
disability, any payments to the executive would be reduced by
any amounts paid to the executive in connection with the
Companys disability insurance contracts.
In the event of termination without cause, for
good reason or death or disability or in the event
of a change in control, all unvested shares of
restricted stock or stock options shall vest.
For purposes of the employment agreements described above, the
terms have the meanings set forth below:
c
hange in control
generally includes:
(i) the acquisition by any person of 20% or more of the
outstanding stock of the Company;
(ii) approval by the shareholders of the Company of a
consolidation, merger or other business combination involving
the Company in which the Company is not the surviving entity,
other than a transaction in which the holders of the
Companys Common Stock immediately prior to the transaction
have substantially the same proportionate ownership of Common
Stock of the surviving corporation after the transaction;
(iii) approval by the shareholders of the Company of any
consolidation, merger or other business combination in which the
Company is the continuing or surviving corporation but in which
the common shareholders of the Company immediately prior to the
transaction do not own at least a majority of the outstanding
Common Stock of the continuing or surviving corporation;
(iv) approval by the shareholders of the Company of any
sale, lease or exchange of substantially all of the assets of
the Company and its subsidiaries;
(v) a change in the majority of the members of the Board of
Directors within a
24-month
period, unless the election or nomination for election by the
Companys shareholders of each new director was approved by
the vote of 2/3 of the directors then still in office who were
in office at the beginning of the
24-month
period; or
(vi) more than 50% of the assets of the Company and its
subsidiaries are sold, transferred or otherwise disposed of,
other than in the usual and ordinary course of its business.
cause
generally means a material breach of
the executives duties under his employment agreement, or
the fraudulent, illegal or other gross misconduct which is
materially damaging or detrimental to the Company.
good reason
generally means:
(i) a material change in the executives duties and
responsibilities or a change in his title or position without
his consent;
(ii) a change in the executives place of employment
or the principal executive offices of the Company more than
30 miles from Williamsville, NY;
(iii) a reduction by the Company in the executives
compensation or benefits;
(iv) a material breach of the employment agreement by the
Company;
(v) in the case of Messrs. Attea and Myszka, the
failure of the executive to be elected a director at any annual
shareholders meeting; or
(vi) the failure of any successor to the Company to
specifically assume responsibility for the employment agreement.
Potential Payments and Benefits upon Death or Disability or
upon Termination of Employment With No Change in Control of the
Company
. The tables below reflect the amount of
compensation to each of the Executive Officers in the event of
termination of such executives employment described below.
The amounts shown assume
20
that such termination was effective as of December 31, 2007
and uses the closing market price of the Company stock on such
date, and thus includes amounts earned through such time and are
estimates of the amounts that would be paid to such executives
upon their termination. The actual amounts to be paid can only
be determined at the time of such executives separation
from the Company.
The first column of each table below sets forth the payments to
which the executive would be entitled, other than accrued but
unpaid base salary and any benefits payable or provided under
broad-based employee benefit plans and programs, in the event of
a termination of the executives employment for any reason
other than for cause by the Company or by the
executive without good reason, and assuming such
termination occurred prior to, or did not otherwise arise in
connection with, a change in control of the Company.
The second column of each table reflects payments that would be
due in the event of the executives termination of
employment due to death or disability prior to a change in
control of the Company. No benefits are paid, other than earned
but unpaid compensation, upon a termination of employment by the
Company for cause or for termination by the
executive upon retirement or without good reason.
|
|
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
|
|
|
|
Company without
|
|
|
|
|
|
|
Cause or
|
|
|
|
|
|
|
Termination by
|
|
|
|
|
|
|
Executive for
|
|
|
Death or
|
|
|
|
Good Reason
|
|
|
Disability
|
|
|
Robert J. Attea
|
|
|
|
|
|
|
|
|
Cash Severance(1)
|
|
$
|
5,072,361
|
|
|
$
|
773,264
|
|
Acceleration of Equity Awards
|
|
|
1,329,652
|
|
|
|
1,329,652
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
6,402,013
|
|
|
$
|
2,102,916
|
|
|
|
|
|
|
|
|
|
|
Kenneth F. Myszka
|
|
|
|
|
|
|
|
|
Cash Severance(1)
|
|
$
|
4,664,040
|
|
|
$
|
752,912
|
|
Acceleration of Equity Awards
|
|
|
1,266,103
|
|
|
|
1,266,103
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,930,143
|
|
|
$
|
2,019,015
|
|
|
|
|
|
|
|
|
|
|
David L. Rogers
|
|
|
|
|
|
|
|
|
Cash Severance(1)
|
|
$
|
4,664,040
|
|
|
$
|
752,912
|
|
Acceleration of Equity Awards
|
|
|
1,284,549
|
|
|
|
1,284,549
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,948,589
|
|
|
$
|
2,037,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Cash severance for disability is reduced by any amounts paid to
the officer under the Companys disability insurance
contract.
|
Cash severance for the Executive Officers is paid in
36 monthly installments unless a change in
control occurs after payments have commenced in which case
the remaining payments are then made in a lump sum. Death or
disability cash severance is paid in eight quarterly payments.
Accelerated equity awards are paid upon the termination of
employment, death or disability of the Executive Officer.
Potential Payments and Benefits Following, or in Connection
With a Change In Control of the Company.
Upon a
termination of an Executive Officers employment without
cause or a termination by the executive for
good reason
21
following a change in control, the executive is
entitled to receive the following benefits in a lump sum within
30 days after the effective date of termination:
|
|
|
|
|
Robert J. Attea
|
|
|
|
|
Cash Severance
|
|
$
|
5,072,361
|
|
Acceleration of Equity Awards
|
|
|
1,329,652
|
|
Gross-up
for
excise tax and additional income taxes
|
|
|
2,991,101
|
|
|
|
|
|
|
Total
|
|
$
|
9,393,114
|
|
|
|
|
|
|
Kenneth F. Myszka
|
|
|
|
|
Cash Severance
|
|
$
|
4,664,040
|
|
Acceleration of Equity Awards
|
|
|
1,266,103
|
|
Gross-up
for
excise tax and additional income taxes
|
|
|
2,995,926
|
|
|
|
|
|
|
Total
|
|
$
|
8,926,069
|
|
|
|
|
|
|
David L. Rogers
|
|
|
|
|
Cash Severance
|
|
$
|
4,664,040
|
|
Acceleration of Equity Awards
|
|
|
1,284,549
|
|
Gross-up
for
excise tax and additional income taxes
|
|
|
2,995,989
|
|
|
|
|
|
|
Total
|
|
$
|
8,944,578
|
|
|
|
|
|
|
SHARE
RETENTION POLICY
The Compensation Committee has not established guidelines or
requirements for the ownership of shares of the Companys
common stock by Executive Officers because each of such
executives has had and continues to have a significant equity
interest in the Company.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is or has been an
officer or employee of the Company or any of its subsidiaries.
In addition, no member of the Compensation Committee had any
relationships with the Company or any other entity that require
disclosure under the proxy rules and regulations promulgated by
the SEC.
COMPENSATION
COMMITTEE REPORT
The Compensation Committee evaluates and establishes
compensation for Executive Officers and oversees the
Companys stock plans, and other management incentive,
benefit and perquisite programs. Management has the primary
responsibility for the Companys financial statements and
reporting process, including the disclosure of executive
compensation. With this in mind, the Compensation Committee
reviewed and discussed with management the Compensation
Discussion and Analysis found on pages
12-15
of
this proxy statement. The Compensation Committee is satisfied
that the Compensation Discussion and Analysis fairly and
completely represents the philosophy, intent, and actions of the
Company with regard to executive compensation. Based upon this
review and discussion with management, we recommended to the
Board of Directors that the Compensation Discussion and Analysis
be included in this proxy statement for filing with the
Securities and Exchange Commission, and incorporated by
reference into the 2007 Annual Report on
Form 10-K.
Compensation Committee
John Burns
Anthony Gammie
22
THE FOREGOING REPORT SHALL NOT BE DEEMED TO BE
SOLICITING MATERIAL OR TO BE FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION AND SHOULD NOT BE DEEMED
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING
BY REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE
AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
EQUITY
COMPENSATION PLAN INFORMATION
The following table sets forth certain information as of
December 31, 2007, with respect to equity compensation
plans under which shares of Common Stock may be issued.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Exercise
|
|
|
|
|
|
|
|
|
|
Price of
|
|
|
|
|
|
|
Number of Securities to
|
|
|
Outstanding
|
|
|
|
|
|
|
be Issued Upon Exercise
|
|
|
Options,
|
|
|
Number of Securities
|
|
|
|
of Outstanding Options,
|
|
|
Warrants
|
|
|
Remaining Available
|
|
|
|
Warrants and Rights
|
|
|
and Rights
|
|
|
For Future Issuance
|
|
Plan Category
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
Equity compensation plans approved by shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 Award and Option Plan
|
|
|
87,000
|
|
|
$
|
50.96
|
|
|
|
1,327,520
|
|
1995 Award and Option Plan
|
|
|
53,125
|
|
|
$
|
26.80
|
|
|
|
0
|
|
1995 Outside Directors Stock Option Plan
|
|
|
28,000
|
|
|
$
|
46.25
|
|
|
|
9,160
|
|
Deferred Compensation Plan for Directors(1)
|
|
|
34,959
|
|
|
|
N/A
|
|
|
|
10,041
|
|
Equity compensation plans not approved by Shareholders
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
(1)
|
|
Under the Deferred Compensation Plan for Directors, Outside
Directors may defer all or part of their Directors fees
that are otherwise payable in cash. Directors fees that
are deferred under such Deferred Compensation Plan will be
credited to each Outside Directors account under such
Deferred Compensation Plan in the form of Units. The number of
Units credited is determined by dividing the amount of
Directors fees deferred by the closing price of Common
Stock on the New York Stock Exchange on the day immediately
preceding the day upon which Directors fees otherwise
would be paid by the Company. An Outside Director is credited
with additional Units for dividends on the shares of Common
Stock represented by Units in such Outside Directors
account. An Outside Director may elect to receive the shares in
a lump sum on a date specified by the Outside Director or in
quarterly or annual installments over a specified period and
commencing on a specified date.
|
CERTAIN
TRANSACTIONS
Edward Killeen, the Companys Senior Executive Vice
President of Operations is the
brother-in-law
of the Chief Executive Officer. Mr. Killeens total
compensation for 2007 was $194,626.
The Company has engaged Locke Acquisition Group, LLC as a broker
to purchase real property. During 2007 the Company paid Locke
Acquisition Group LLC $2,122,700 in commissions. Jonathan Attea,
son of the Chief Executive Officer, is an employee of Locke
Acquisition Group, however, he does not hold any equity in that
company nor is he an officer or director.
Frederick G. Attea, brother of the Companys Chief
Executive Officer, is a partner of the law firm of Phillips
Lytle LLP, which has represented and is currently representing
the Company. Phillips Lytle LLPs legal fees for services
rendered to the Company for 2007 totaled $762,903.
23
The Company has entered into indemnification agreements with
each of its Executive Offices and Directors containing
provisions that may require the Company, among other things, to
indemnify those officers and Directors against liabilities that
may arise by reason of their status or service as officers or
directors. The agreements also provide for the Company to
advance to the officers and directors expenses that they expect
to incur as a result of any proceeding against them as to which
they could be indemnified. The Company also intends to execute
such agreements with its future directors and executive officers.
PROPOSALS OF
SHAREHOLDERS FOR THE 2009 ANNUAL MEETING
To be considered for inclusion in the proxy materials for the
2009 Annual Meeting of Shareholders, Shareholder proposals must
be received by the Secretary of the Company, 6467 Main Street,
Williamsville, New York 14221, no later than December 11,
2008.
The Companys By-Laws set forth the procedure to be
followed by a Shareholder who wishes to recommend one or more
persons for nomination to the Board of Directors or present a
proposal at an Annual Meeting (other than a proposal submitted
for inclusion in the Companys proxy materials). Only a
Shareholder of record entitled to vote at an Annual Meeting may
present a proposal and must give timely written notice thereof
to the Secretary of the Company at the address noted above.
Generally, such notice must be received by the Company not less
than 75 days nor more than 180 days prior to the
anniversary date of the immediately preceding Annual Meeting.
However, if such meeting is called for a date more than seven
days prior to the anniversary date, then the notice must be
received not later than the close of business on (i) the
20th day following the earlier of (a) the date on
which notice of the date of the meeting was mailed to
Shareholders or (b) the date on which the date of such
meeting was publicly disclosed, or (ii) if the date of
notice or public disclosure occurs more than 75 days prior
to the scheduled date of the meeting, then the later of
(a) the 20th day following the first to occur of such
notice or public disclosure or (b) the 75th day prior
to the scheduled date of the meeting.
OTHER
MATTERS
At the time of the preparation of this Proxy Statement, the
Board of Directors of the Company did not contemplate or expect
that any business other than that pertaining to the subjects
referred to in this Proxy Statement would be brought up for
action at the meeting, but in the event that other business
calling for a Shareholders vote does properly come before
the meeting, the Proxies will vote thereon according to their
best judgment in the interest of the Company.
A COPY OF SOVRAN SELF STORAGE, INC.S ANNUAL REPORT ON
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2007 FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS AVAILABLE WITHOUT CHARGE TO THOSE
SHAREHOLDERS WHO WOULD LIKE MORE DETAILED INFORMATION CONCERNING
THE COMPANY. TO OBTAIN A COPY, PLEASE WRITE TO: DAVID L. ROGERS,
SECRETARY, SOVRAN SELF STORAGE, INC., 6467 MAIN STREET,
WILLIAMSVILLE, NEW YORK, 14221. THE
10-K
IS ALSO
AVAILABLE ON THE COMPANYS WEBSITE
(
www.sovranss.com
).
By Order of the Board of Directors,
Secretary
April 10, 2008
24
SOVRAN SELF-STORAGE, INC.
DEFERRED COMPENSATION PLAN FOR DIRECTORS
Amended Plan Document
1. Purpose and Eligibility
Sovran Self Storage, Inc. (the Corporation) hereby establishes the Deferred Compensation
Plan for Directors (the Plan) the purpose of which is to provide Directors of the Corporation who
are not employees of the Corporation the opportunity to defer to a future date the receipt of their
annual retainer fees and fees for attendance at Board and Committee meetings (Compensation).
Nothing contained in this Plan shall be deemed to constitute an employment contract or agreement
between the Directors and the Corporation.
2. Election
A Director may at any time elect to defer receipt of all or a portion of Compensation not yet
earned. For 1999, an election shall be made by May 25, 1999. For new Directors, an election for
the first year of service shall be made within fifteen (15) days of becoming a Director. For each
subsequent year, an election must be made prior to the start of the year for which the election is
to be applicable. Such election shall be in writing, shall specify the method of payment of
deferred amounts in accordance with Paragraph 5, and shall continue until amended or terminated by
written notice delivered to the Corporation. Such notice of amendment or termination shall not
affect previously deferred Compensation.
An election to defer Compensation earned with respect to services provided in a given year,
including an election that automatically continues from year to year until amended or terminated,
shall become irrevocable with respect to such year on the last day of the preceding year.
In the event that a Director makes two or more elections specifying different methods of
payment of amounts deferred in different years, the Corporation shall establish separate
subaccounts within the Directors Account established in accordance with Paragraph 4 in order to
identify deferred amounts subject to different payment elections.
3. Shares Subject to Plan
(a) Subject to adjustment as provided in subparagraph (b), the number of shares of the
Corporations common stock (the Stock) reserved for issuance pursuant to Paragraph 5 of the Plan
is 75,000 shares. Stock issued under the Plan may consist, in whole or in part, of authorized and
unissued shares or treasury shares.
SOVRAN SELF-STORAGE, INC. DEFERRED COMPENSATION PLAN FOR DIRECTORS
Amended Plan Document
Page 2
(b) The number of shares of Stock reserved for issuance under the Plan shall be appropriately
adjusted to take into account any changes in the number of outstanding shares of Stock resulting
from split-ups or combinations of shares or recapitalizations.
4. Maintenance of Deferred Account
(a) Compensation which is deferred shall be credited, in accordance with each Directors
election, to his or her account (Account) as of the date on which current payment otherwise would
have been made (the Payment Date). The amount deferred shall be converted into Units based on
the value of the Stock as hereinafter provided. The number of Units credited from time to time to
each Account shall be:
- With Respect to Compensation Deferred: The number obtained by dividing the amount of
deferred Compensation otherwise payable on the Payment Date by 100% of the closing price of the
Stock on the New York Stock Exchange (such closing price being the Stock Price) on the
immediately preceding business day;
- With
Respect to Cash Dividends: The number obtained by multiplying the number of
Units in the Account on the dividend record date by any cash dividends declared by the Corporation
on the Stock and dividing the product by 100% of the Stock Price on the related dividend record
date; and
- With
Respect to Stock Dividends: The number obtained by multiplying the number of
Units in the Account on the dividend record date by the stock dividend declared.
(b) The number of Units credited to each Account shall be appropriately adjusted to take into
account any changes in the number of outstanding shares of Stock resulting from split-ups or
combinations of shares or recapitalizations.
(c) The Plan is intended to constitute an unfunded plan for deferred compensation. The
establishment of or allocation to Accounts shall not vest in any participant any right, title or
interest in or to any specific assets of the Corporation nor shall the Corporation be required to
purchase any Stock.
However, in the event the Corporation should purchase such Stock, it shall not be required to
exercise any option or right with respect to such Stock, or if it wishes to exercise any option or
right under such Stock, it shall not be required to exercise such option or right in any particular
manner. With respect to the Corporations obligations under the Plan, the participant shall have
no rights that are greater than those of a general creditor of the Corporation.
(d) Within forty-five (45) days after the end of a calendar year, the Corporation shall
provide each Director who is participating in the Plan with a statement listing the balance of such
Directors Account as of the end of the year.
SOVRAN SELF-STORAGE, INC. DEFERRED COMPENSATION PLAN FOR DIRECTORS
Amended Plan Document
Page 3
5. PAYMENT OF DEFERRED AMOUNTS
(a) All amounts credited to an Account shall be paid to the Director in shares of Stock (other
than cash in lieu of fractional shares) either:
(i) in a lump sum on a date specified by the Director on his election form and in a number of
shares equal to the number of Units then credited to the Directors Account, or
(ii) in quarterly or annual installments over such number of quarters or years and commencing
on such date as the Director shall have elected, on his or her election form, each installment
being equal to a number of shares equal to the number of Units then credited to the Directors
Account divided by the number of installments remaining to be paid; or
(iii) in a lump sum within ten (10) business days of the separation from service of the
Director as a director if the Director has not elected a different payment date on his election
form and in number of shares equal to the number of Units then credited to the Directors Account.
For the purpose of this Paragraph 5(iii), a Director shall be deemed to have a separation from
service as a director on the date determined in accordance with Treasury regulations promulgated
under Internal Revenue Code (Code) Section 409A, which may include the effective date of the
Directors resignation or removal as a director, or the last day of the Directors term if the
Director has not been elected to a succeeding term.
In the event that a Director has different method of payment elections in effect with respect to
different subaccounts, the foregoing provisions of this Paragraph 5(a) shall be applied with
respect to the Directors subaccount rather than his or her Account, as applicable.
(b) Notwithstanding any election made by the Director to have amounts deferred under the Plan
paid at a different time or in a different manner, in the event of a Directors death or Disability
(as defined below), all amounts credited to his or her Account shall be paid in a lump sum on or
before the later of (i) the last day of the calendar year in which the death or Disability occurs,
or (ii) the 90th day following the date on which the death or Disability occurs, in shares of Stock
equal to the number of Units as of such date of death or Disability. In the event of payment under
this Paragraph 5(b), the Director or his or her Beneficiary (if applicable) shall not have the
right to designate the taxable year of payment.
In the event of the Directors death, the payment shall be made to the Beneficiary designated on
the Directors election form or, if none, to his estate.
SOVRAN SELF-STORAGE, INC. DEFERRED COMPENSATION PLAN FOR DIRECTORS
Amended Plan Document
Page 4
Disability means the Director is unable to engage in any substantial gainful activity be reason
of any medically determinable physical or mental impairment that can be expected to result in death
or can be expected to last for a continuous period of not less than 12 months. The date of
Disability shall be the date on which the Director is determined to be totally disabled by the
Social Security Administration or the date as of which the Director is determined to be disabled
within the meaning of the previous sentence by a majority of the Board of Directors (excluding the
Director).
(c) Notwithstanding any election made by the Director to have amounts deferred under the Plan
paid at a different time or in a different manner, if a Change in Control occurs and the
participant ceases to be a Director (other than by reason of death, Disability, retirement or
Termination for Cause) within two years thereafter, then upon the date of any such occurrence, all
amounts credited to the participants Account as of such date shall be paid promptly in a lump sum,
in shares of Stock equal to the number of Units as of such date, to the Director. A Change in
Control shall occur only if there is a change in the ownership or effective control of the
Corporation, or a change in the ownership of a substantial portion of the assets of the
Corporation within the meaning of Code Section 409A and Treasury regulations promulgated
thereunder. Termination for Cause means termination which is effected by reason of fraud,
deceit, or other gross misconduct by the Director performed within the scope of his duties as
Director.
(d) Upon approval of the Board of Directors, a Director participating in the Plan may withdraw
all or a portion of the balance of Units in such Directors Account, in shares of Stock equal to
the number of Units withdrawn, in the case of an unforeseeable emergency within the meaning of
Code Section 409A and Treasury regulations promulgated thereunder (Unforeseeable Emergency);
provided however that the amount of such withdrawal cannot exceed the amount reasonably necessary
to meet the Unforeseeable Emergency as provided in applicable Treasury regulations. The Board of
Directors shall have the sole discretion to determine whether an Unforeseeable Emergency has
occurred with respect to a Director and, if so, the amount of withdrawal reasonably necessary to
meet the emergency.
6. Non-Assignment
(a) No right to receive payments under this Plan shall be transferable or assignable by a
Director except by will or in accordance with the laws of descent and distribution. All amounts of
Compensation deferred under this Plan, all property and rights which may be purchased by the
Corporation with such amounts and all income attributable to such amounts, property and rights
shall remain the sole property and rights of the Corporation (without being restricted to the
provision of benefits under this Plan) subject only to the claims of the Corporations general
creditors.
(b) No modification of the time or manner of payment under the Plan shall be authorized if and
to the extent that such authorization or the making of such modification would constitute
constructive receipt on the part of a participant of amounts credited to
SOVRAN SELF-STORAGE, INC. DEFERRED COMPENSATION PLAN FOR DIRECTORS
Amended Plan Document
Page 5
his or her Account under the federal income tax laws or would result in a failure to comply with
any requirement of Code Section 409A and the Treasury regulations promulgated thereunder.
7. Effective Date and Termination
This Plan was originally established and made effective with respect to compensation earned by
a Director on and after May 25, 1999 (the Original Plan Document). This amended Plan document
includes provisions to comply with new deferred compensation rules enacted in Code Section 409A and
is effective with respect to, and governs, all compensation deferred on and after January 1, 2005.
To the extent any compensation was deferred by a Director and credited to such Directors account
prior to January 1, 2005, the terms of Section 5 of the Original Plan Document shall continue to
apply with respect to the payment of such deferred amounts.
The Plan may be amended or terminated at any time by resolution of the Board, but no amendment
or termination shall affect amounts previously credited to a Directors Account.
8. Miscellaneous
(a) As used in this Plan, the term year means the calendar year unless the context clearly
indicates a different meaning.
SOVRAN SELF STORAGE, INC.
SOLICITED BY THE BOARD OF DIRECTORS
for the Annual Meeting of Shareholders May 21, 2008
Robert J. Attea, Kenneth F. Myszka and David L. Rogers, and each of them with full power of
substitution, are hereby appointed proxies to vote all shares (unless a lesser number is specified
on the other side) of the stock of Sovran Self Storage, Inc. that are held of record by the
undersigned on March 24, 2008 at the Annual Meeting of Shareholders of Sovran Self Storage, Inc.,
to be held at the Courtyard by Marriott, 4100 Sheridan Drive, Buffalo, New York 14221, on May 21,
2008 at 11:00 a.m., local time, and any adjournments thereof, with all powers the undersigned would
possess if personally present, for the election of directors, on each of the other matters
described in the Proxy Statement and otherwise in their discretion.
The shares represented by this Proxy will be voted as directed by the shareholders. If no
direction is given, such shares will be voted for election of all nominees for directors listed in
Proposal 1 and for Proposals 2 and 3.
Please return this proxy card promptly using the enclosed envelope.
(To be Signed on Reverse Side)
Annual Meeting of Shareholders
SOVRAN SELF STORAGE, INC.
May 21, 2008
PROXY VOTING INSTRUCTIONS
TO VOTE BY MAIL
Please date, sign and mail your proxy card in the envelope provided as soon as possible.
TO VOTE ELECTRONICALLY
To vote by internet or telephone, have the voting form in hand and call toll-free 1-800-PROXIES or
access the web page at www.voteproxy.com and follow the instructions.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to
be held on May 21, 2008
The Proxy Statement, Form 10-K for the year ended December 31, 2007 and the Annual Report to
shareholders are available at www.sovranss.com/2008annualmeeting
Please Detach and Mail in the Envelope provided
þ
Please mark your
votes as in this
example.
PLEASE MARK, SIGN, DATE & RETURN THIS PROXY IN THE ENCLOSED ENVELOPE. THE PROXY IS SOLICITED BY THE
BOARD OF DIRECTORS OF THE COMPANY. The Directors recommend a vote FOR election of all nominees and
FOR proposals 2
and 3.
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1.
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ELECTION OF DIRECTORS: Nominees:
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Robert J. Attea
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Kenneth F. Myszka
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John E. Burns
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Michael A. Elia
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Anthony P. Gammie
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Charles E. Lannon
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o
FOR ALL NOMINEES
o
WITHHELD FOR ALL NOMINEES
For, except vote withheld from the following nominee(s):
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2.
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Approval of amendment to the Deferred Compensation Plan for Directors of Sovran Self Storage, Inc.
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o
FOR
o
AGAINST
o
ABSTAIN
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3.
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Ratification of the appointment of Ernst & Young LLP as the Companys independent registered
public accounting firm for fiscal
year 2008.
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o
FOR
o
AGAINST
o
ABSTAIN
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4.
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In their discretion, the proxies are authorized to vote upon any other matters of business
which may properly come before the meeting, or, any adjournment(s) thereof.
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Change of Address/comments on reverse side
o
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I plan to attend the meeting
o
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I do not plan to attend the meeting
o
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SIGNATURE(S)
Date
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full by President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
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