x
|
Preliminary
Proxy Statement
|
o
|
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
o
|
Definitive
Proxy Statement
|
||
o
|
Definitive
Additional Materials
|
||
o
|
Soliciting
Material Pursuant to § 240.14a-12
|
x
|
No
fee required.
|
|
o
|
Fee
Computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
|
(1)
|
Title
of each class of securities to which transaction
applies:
|
|
(2)
|
Aggregate
number of securities to which transaction applies:
|
|
(3)
|
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):
|
|
(4)
|
Proposed
maximum aggregate value of transaction:
|
|
(5)
|
Total
fee paid:
|
|
o
|
Fee
paid previously with preliminary materials.
|
|
o
|
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.
|
|
(1)
|
Amount
Previously Paid:
|
|
(2)
|
Form,
Schedule or Registration Statement No.:
|
|
(3)
|
Filing
Party:
|
1.
|
Elect
three Class I directors to our Board, each for a term of three
years;
|
2.
|
Approve
amending the Company’s Restated Certificate of Incorporation, as amended
(the “Restated Charter”) to increase the number of authorized shares of
the Company’s common stock, par value $0.01 per share to
250,000,000;
|
3.
|
Approve
amending the Company’s Amended and Restated 1996 Stock Incentive Plan (the
“1996 Plan”) to increase the number of shares authorized for issuance
under the 1996 Plan to 10,000,000 and extend its term through May 27,
2019;
|
4.
|
Ratify
the appointment of Deloitte & Touche LLP as our independent registered
public accounting firm for the fiscal year ending December 31, 2009;
and
|
5.
|
Transact
any other business that may properly come before the meeting or at any
adjournments or postponements of the
meeting.
|
By
Order of the Board of Directors,
|
Robert
R. Nielsen
|
Executive
Vice President and Secretary
|
Page
|
|
1
|
|
1
|
|
3 | |
14
|
|
26
|
|
35
|
|
36 | |
37 | |
42 | |
43 | |
43 | |
A-1 | |
Ÿ
|
delivering
a written notice of revocation or later-dated proxy to our Secretary at or
before the taking of the vote at the Annual Meeting;
|
Ÿ
|
changing
your vote instructions via the Internet up to 11:59 p.m. Eastern Time on
May 26, 2009 (the day before the 2009 Annual Meeting);
or
|
Ÿ
|
voting
in person at the Annual
Meeting.
|
Class
I Directors with Terms to Expire in 2012
|
|||
Name
and Age*
|
Business
Experience and Principal Occupation or
Employment
During Past 5 Years; Other Directorships
|
Director
Since
|
|
Logan
W. Kruger
|
58
|
Our
President and Chief Executive Officer since December 2005; Director of
Cleco Corporation since October 2008; President, Asia/Pacific Inco Limited
from September 2005 to November 2005; and Executive Vice President,
Technical Services for Inco Ltd. from September 2003 to September
2005.
|
2005
|
Willy R.
Strothotte (1)
|
64
|
Chairman
of the Board of Glencore International AG since 1994 and Chief Executive
Officer from 1993 to December 2001; Director of KKR Financial Holdings LLC
since January 2007; Director of Minara Resources Ltd. since 2000; and
Chairman of the Board of Xstrata AG since 1994.
|
1996
|
Jarl
Berntzen
|
42
|
Managing
Director and Portfolio Manager of Interlachen Capital Group from August
2008 through February 2009; Partner-Head of Mergers and Acquisitions,
ThinkEquity Partners LLC from March 2006 to August 2008; Director of
Universal Safety Response, Inc. since October 2007; Senior Vice President,
Barrington Associates, LLC from April 2005 to February 2006; and Founder,
Berntzen Capital Management, LLC from March 2003 to April
2005.
|
2006
|
Class
II Directors with Terms to Expire in 2010
|
|||
Name
and Age*
|
Business
Experience and Principal Occupation or Employment During Past 5 Years;
Other Directorships
|
Director
Since
|
|
John
C. Fontaine
|
77
|
Our
Lead Director from 2005 to 2008; Of Counsel, law firm of Hughes Hubbard
& Reed LLP since January 2000 and Partner from July 1997 to December
1999; Chairman of the Samuel H. Kress Foundation from 1994 to 2006;
Trustee of the National Gallery of Art from 2003 to 2007 and Chairman of
the Board of Trustees from 2006 to 2007.
|
1996
|
John
P. O’Brien
|
67
|
Our
Chairman of the Board since January 2008; Managing Director of Inglewood
Associates Inc. since 1990; Chairman of Allied Construction Products since
March 1993; Director of Preformed Line Products Company from May 2004 to
April 2008; Director of Globe Speciality Metals from May 2008 to October
2008; Director of Oglebay Norton Company from April 2003 to February 2008;
Member of the Board of Trustees of Saint Luke’s Foundation of Cleveland,
Ohio since 2006; Trustee of Cleveland Sight Center since 1990; Chairman,
Chagrin Falls Board of Zoning Appeals since 2005; and Trustee of Downtown
Chagrin Falls from 2000 to 2008.
|
2000
|
Peter
C. Jones
|
61
|
Chairman
of Lakota Resources Inc. since September 2008; Director of Royal Nickel
Corp. since December 2008; Director of Mizuho Corporate Bank (Canada)
since December 2006; Director IAMGOLD Corporation since May 2006;
Director, President and Chief Operating Officer of Inco Ltd. from April
2002 to November 2006; President Commissioner P.T. Inco. Tbk from 1999 to
2006; Chairman Goro Nickel SAS from 2003 to February 2007; Member of the
Board and Executive Committee, Mining Association of Canada from 1997 to
2006; and Member of the Board, Royal Ontario Museum from 2003 to
2006.
|
2007
|
Class
III Directors Standing with Terms to Expire in 2011
|
|||
Name
and Age*
|
Business
Experience and Principal Occupation or
Employment
During Past 5 Years; Other Directorships
|
Director
Since
|
|
Robert
E. Fishman, Ph.D.
|
57
|
President
and Chief Executive Officer of Ausra, Inc. since October 2007; Director of
Range Fuels, Inc. since November 2007; Executive Vice President, Power
Operations of Calpine Corporation from 2006 to 2007; Senior Vice President
of Calpine Corporation from 2001 to 2005.
|
2002
|
Jack
E. Thompson
|
59
|
Director
of Tidewater Inc. since 2005; Director of Rinker Group Ltd. from May 2006
to June 2007; Director of Phelps Dodge Corp. from January 2003 to March
2007; Director of Stillwater Mining Co. from 2002 to June 2006; Vice
Chairman of Barrick Gold Corporation from December 2001 to April 2005;
Member of the Advisory Board of Resource Capital Funds III and IV, LLP
from 2002 to January 2009; Member of the Industry Advisory Council for the
College of Engineering at the University of Arizona since
2002.
|
2005
|
Catherine
Z. Manning
|
55
|
Partner,
PricewaterhouseCoopers LLP from July 1986 to June 2008, Finance
Effectiveness and Merger Integration leader of PricewaterhouseCoopers’
Atlanta Advisory practice; Chairman, Atlanta Historical Society since
January 2007, Member since January 2002; member, Georgia Appleseed since
January 2006; Member, Museum of Contemporary Art of Georgia since February
2008.
|
2008
|
*
|
Age
as of March 31, 2009
|
(1)
|
Mr.
Strothotte was designated to serve as one of our directors by Glencore
International AG, or
Glencore.
|
Name
|
Audit
|
Compensation
|
Governance
&
Nominating
|
Health,
Safety &
Sustainability
|
Jarl
Berntzen
|
X
|
X
|
||
Robert
E. Fishman
|
X
|
X
|
X*
|
|
John
C. Fontaine
|
X
|
X
|
||
Peter
C. Jones
|
X
|
X*
|
X
|
|
Catherine
Z. Manning
|
X*
|
X
|
||
John
P. O’Brien
|
X
|
X
|
||
Jack
E. Thompson
|
X
|
X*
|
X
|
Ÿ
|
oversees
the financial reporting process for which management is
responsible;
|
Ÿ
|
approves
the engagement of the independent auditors for audit and non-audit
services;
|
Ÿ
|
monitors
the independence of the independent auditors;
|
Ÿ
|
reviews
and approves all audit and non-audit services and fees;
|
Ÿ
|
reviews
the scope and results of the audit with the independent
auditors;
|
Ÿ
|
reviews
the scope and results of internal audit procedures with our internal
auditors;
|
Ÿ
|
evaluates
and discusses with the independent auditors and management the
effectiveness of our system of internal accounting
controls;
|
Ÿ
|
reviews
and approves related party transactions pursuant to our Statement of
Company Policy Regarding Related Party Transactions;
and
|
Ÿ
|
makes
inquiries into other matters within the scope of its
duties.
|
Ÿ
|
evaluating
the size and composition of the Board;
|
Ÿ
|
identifying,
recruiting and recommending candidates for election to the Board and its
committees;
|
Ÿ
|
overseeing
corporate governance matters; and
|
Ÿ
|
reviewing
and making periodic recommendations concerning our corporate governance
policies and procedures.
|
Ÿ
|
significant
business or public company experience;
|
Ÿ
|
a
willingness and ability to make a sufficient time commitment to Century’s
affairs to perform effectively the duties of a director, including regular
attendance at Board and committee meetings;
|
Ÿ
|
skills
in finance, international business and knowledge about Century’s business
or industries;
|
Ÿ
|
personal
qualities of leadership, character, judgment and integrity;
and
|
Ÿ
|
requirements
relating to composition of the Board under applicable law and listing
standards.
|
Ÿ
|
annual
retainers for all non-employee directors were increased by $10,000 to more
closely align them with the mid-range of competitive practices; and
|
Ÿ
|
the
annual retainer for the Compensation Committee Chair was increased by
$5,000 to reflect the increased burden and complexity of Compensation
Committee oversight.
|
Name(a)
|
Fees
Earned or Paid in Cash ($)(b)
|
Stock
Awards ($)(c)
|
Option
Awards ($)(d)
|
All
Other Compensation ($)(e)
|
Total
($)
|
Jarl
Berntzen
|
95,000
|
51,874
|
25,108
|
—
|
171,982
|
Craig
A. Davis
|
6,011
|
387,318
|
25,108
|
930,000
|
1,348,437
|
Robert
E. Fishman
|
124,750
|
51,874
|
25,108
|
—
|
201,732
|
John
C. Fontaine
|
113,500
|
51,874
|
25,108
|
—
|
190,482
|
Peter
C. Jones
|
121,000
|
51,874
|
113,358
|
—
|
286,232
|
Catherine
Z. Manning
|
44,500
|
52,168
|
—
|
—
|
96,668
|
John
P. O’Brien
|
175,637
|
51,874
|
25,108
|
—
|
252,619
|
Willy
R. Strothotte
|
—
|
51,874
|
25,108
|
—
|
76,982
|
Jack
E. Thompson
|
114,000
|
51,874
|
25,108
|
—
|
190,982
|
(a)
|
Represents
all non-employee directors that served on the Board during
2008. Mr. Kruger did not receive additional compensation for
serving as a Board member. In January 2008, Mr. Davis resigned from
his position as Chairman and a member of the Board of
Directors. Mr. O’Brien was elected to succeed Mr. Davis as
Chairman.
|
(b)
|
Represents
retainer and meeting fees paid to each non-employee director during 2008
(other than Mr. Strothotte, who waived his right to receive cash
compensation).
|
(c)
|
Amounts
shown in this column reflect the expense recognized for financial
statement reporting purposes during 2008 in accordance with Statement of
Financial Accounting Standards 123(R), Share Based Payment, or
FAS 123(R), for equity award expenses, disregarding assumptions for the
forfeiture of awards. See note 14 to the financial statements
in our Annual Report on Form 10-K for the year ended December 31, 2008,
for the assumptions used in the valuation of these awards and related
disclosures. Pursuant to the terms of the Implementation
Guidelines to our 1996 Plan, following his retirement as our Chief
Executive Officer, Mr. Davis’s performance-based share awards vested on
March 19, 2008 for our 2005-2007 performance period on an approximate
one-third basis. As such, amounts included in this column
include the re-measurement of performance share expense in accordance with
FAS 123(R) that was awarded to Mr. Davis when he served as Chief Executive
Officer.
|
(d)
|
Amounts
shown in this column reflect the expense recognized for financial
statement reporting purposes during 2008 in accordance with FAS 123(R),
for equity award expenses, disregarding assumptions for the forfeiture of
awards. See note 14 to the financial statements in our Annual
Report on Form 10-K for the year ended December 31, 2008 for the
assumptions used in the valuation of these awards and related
disclosures. Presented below are the grant date fair value of
each equity award granted in 2008 (calculated in accordance with FAS
123(R) using the Black-Scholes option pricing model) and the aggregate
number of vested and unvested stock options and stock awards held by each
director (other than Mr. Kruger) as of December 31,
2008:
|
Name
|
Grant
Date Fair Value of 2008 Equity Awards ($)
|
Number
of Options Outstanding as of 12/31/08
|
Number
of Stock Awards Outstanding as of 12/31/08
|
Jarl
Berntzen
|
69,165
|
16,000
|
1,047
|
Craig
Davis
|
—
|
6,000
|
—
|
Robert
E. Fishman
|
69,165
|
3,000
|
1,047
|
John
C. Fontaine
|
69,165
|
19,000
|
1,047
|
Peter
C. Jones
|
69,165
|
13,000
|
1,047
|
Catherine
Z. Manning
|
137,968
|
—
|
2,049
|
John
P. O’Brien
|
69,165
|
14,000
|
1,047
|
Willy
R. Strothotte
|
69,165
|
22,500
|
1,047
|
Jack
E. Thompson
|
69,165
|
3,000
|
1,047
|
(e)
|
For
Mr. Davis, all other compensation includes $930,000 for payments made
under our retirement plans.
|
Name
|
Amount
and Nature of
Beneficial
Ownership(a)
|
Percent
of Class
|
Glencore
Investment Pty Ltd
|
28,285,638(b)
|
38.15%
|
Prudential
Financial, Inc.
|
7,374,596(c)
|
9.95%
|
(a)
|
Each
entity has sole voting and investment power, except as otherwise
indicated.
|
(b)
|
Based
on information set forth in a Schedule 13D/A filing dated February 4,
2009, by Glencore Investment Pty Ltd, Glencore Investments AG, Glencore
International AG and Glencore Holding AG
(“Glencore”). Glencore’s principal business address is
Baarermattstrasse 3, P.O. Box 666, CH 6341, Baar, Switzerland. The
principal business address of Glencore Investment Pty Ltd is Level 4,
30 The Esplanade, Perth, 6000, Australia. In addition, the above
information as to Glencore’s beneficial ownership of our outstanding
common stock includes 224,526 shares acquired through the automatic
conversion of our Series A Convertible Preferred Stock in the first
quarter of 2009 and excludes the 15,355,466 shares of our common
stock issuable upon conversion of Series A Convertible Preferred
Stock owned by Glencore Investment Pty Ltd, which are convertible only
upon the occurrence of events that have not transpired and that are
outside of the control of Glencore Investment Pty Ltd, or in circumstances
that would not result in an increase in the percentage of the outstanding
shares of our common stock beneficially owned by Glencore.
|
(c)
|
Based
on information set forth in a Schedule 13G/A filing dated February 6,
2009, by Prudential Financial, Inc., as the direct or indirect parent of
various registered investment advisors and broker dealers, including
Jennison Associates LLC (an investment advisor), may be deemed to have
direct or indirect voting and/or investment power over 7,374,596 shares of
our common stock held for its own benefit or for the benefit of its
clients by its separate accounts, externally managed accounts, registered
investment companies, subsidiaries and/or other affiliates. The principal
business address of Prudential Financial, Inc., is 751 Broad Street,
Newark, New Jersey 07102-3777. Based on information set forth in a
Schedule 13G/A filed on February 17, 2009, Jennison Associates LLC
has sole voting power over 5,730,420 shares of our common stock and
shared investment power over 5,915,320 shares. According to the
schedule, Jennison Associates LLC is a registered investment advisor 100%
of the equity interests of which are indirectly owned by Prudential
Financial, Inc.
|
Amount
and Nature of Beneficial Ownership(a)
|
|||
Name
|
Common
Stock
|
Exercisable
Stock Options(b)
|
|
Jarl
Berntzen
|
—
|
16,000
|
|
Michael
A. Bless
|
65,007
|
(c)
|
30,000
|
Giulio
Casello
|
28,553
|
15,000
|
|
Robert
E. Fishman
|
—
|
3,000
|
|
John
C. Fontaine
|
1,250
|
(c)
|
19,000
|
Wayne
R. Hale
|
49,024
|
50,000
|
|
Peter
C. Jones
|
2,000
|
13,000
|
|
Logan
W. Kruger
|
108,290
|
70,000
|
|
Catherine
Z. Manning
|
1,000
|
—
|
|
Robert
R. Nielsen
|
39,731
|
8,335
|
|
John
P. O’Brien
|
18,000
|
14,000
|
|
Willy
R. Strothotte
|
—
|
(d)
|
22,500
|
Jack
E. Thompson
|
3,500
|
3,000
|
|
All
directors and executive officers as a group (17 persons)
|
374,421
|
279,102
|
(a)
|
Each
individual has sole voting and investment power except as otherwise
noted.
|
(b)
|
Represents
shares that are subject to options that are presently exercisable or
exercisable within 60 days of March 31, 2009.
|
(c)
|
Represents
shares that are jointly owned and subject to shared voting and investment
power.
|
(d)
|
Excludes
28,285,638 shares owned by Glencore, for which Mr. Strothotte serves as
Chairman.
|
Ÿ
|
Affirmed
the Company’s Compensation philosophy: After evaluating our
business needs, our pay competitiveness, our existing “mid-range” pay
philosophy, and the merits of establishing a more focused competitiveness
objective, we re-affirmed the appropriateness of our “mid-range”
philosophy and the flexibility that it provides the Committee in its
oversight of executive pay.
|
Ÿ
|
Benchmarking
of compensation: In assessing the competitiveness of our
executive pay levels, we have refined the process and approach used to
establish market pay levels; our focus is on the peer companies described
below in the Benchmarking Executive Compensation section, and our
assessment is complemented by a review of a compilation of data derived
from a broader sample of asset-intensive, comparably-sized industrial
companies.
|
Ÿ
|
Redesigned
the annual and long-term incentive plans effective in 2008: To emphasize
our operating, financial, and strategic goals, we revised the annual
incentive plan by incorporating three operating measures historically used
within the long-term incentive plan. At the same time, we revised the
long-term incentive plan to focus on strategic goals, free cash flow, and
relative total shareholder return. In each plan, we maintained
the flexibility of the prior plans through the retention of Committee
discretion in reviewing, making and modifying
awards.
|
Ÿ
|
Securing
operating licenses and power supply agreements for the Helguvik
smelter;
|
Ÿ
|
Entering
into a joint venture agreement whereby the Company acquired a 40% stake in
Baise Haohai Carbon Co., Ltd., an anode manufacturing facility in
China;
|
Ÿ
|
Launching
of two public common stock offerings, one of which closed in July 2008,
and the other in early 2009;
|
Ÿ
|
Significant
cost reduction actions in response to the declining price of aluminum;
and
|
Ÿ
|
Navigating
changing political and financial conditions in
Iceland.
|
Ÿ
|
Named
executive officer base salaries were frozen at their 2008
levels;
|
|
Ÿ
|
Incentives
for periods ending December 2008 were down 57% in total for the named
executive officers in comparison to incentives for periods ending December
2007;
|
|
°
|
Total
annual incentives for 2008 were down 34% from 2007 levels;
|
|
°
|
Awards
for the three-year period ending in 2008 were down 75% from 2007
levels.
|
Company
|
2007
Status
|
2008
Status
|
AK
Steel Holdings
|
NA
|
Added
|
Allegheny
Technologies
|
NA
|
Added
|
Arch
Chemicals
|
Included
|
Included
|
Carpenter
Technology Corp
|
Included
|
Included
|
Castle
(A.M.) & Co.
|
Included
|
Included
|
Chaparral
Steel Co.
|
Included
|
Removed,
acquired
|
Cleveland—Cliffs
Inc.
|
Included
|
Included
|
Commercial
Metals Company
|
NA
|
Added
|
Gibraltar
Industries Inc.
|
Included
|
Included
|
Kaiser
Aluminum Corp.
|
Included
|
Included
|
Martin
Marietta Materials
|
NA
|
Added
|
Metal
Management Inc.
|
Included
|
Removed,
acquired
|
Nucor
Corp.
|
Included
|
Removed,
size
|
Quanex
Corp.
|
Included
|
Removed,
re-organized
|
Reliance
Steel & Aluminum Co.
|
Included
|
Included
|
Schnitzer
Steel Industries Inc.
|
Included
|
Included
|
Steel
Dynamics Inc.
|
Included
|
Included
|
The
Timken Company
|
NA
|
Added
|
Titanium
Metals Corp.
|
Included
|
Included
|
Vulcan
Materials Company
|
NA
|
Added
|
Worthington
Industries
|
NA
|
Added
|
Ÿ
|
Salary:
Base salary is determined by our philosophy, the position (skills, duties,
responsibilities, etc.), market pay levels and trends, individual
performance, and prior salary.
|
Ÿ
|
Annual
incentive: Variable compensation is normally payable in cash following the
fiscal year the pay is earned; historically, this component was based on a
subjective evaluation of Company and individual
performance. Achievement of pre-set key operating goals became
an important component of the annual incentive in 2008. In
addition a portion of the incentive is dependent on a subjective review of
individual performance and contributions to our overall strategic
successes.
|
Ÿ
|
Long-term
incentives: Variable compensation based on sustained performance success;
historically based on the Committee’s assessment of operating performance
and strategic achievements and settled in shares of
stock. Effective for 2008, the long-term incentive includes a
cash and a stock component. For the 2008-2010 period,
strategic, financial, and relative total shareholder return measures
determine the cash portion of the long-term incentive. In
addition, time-vested performance share units are awarded to balance the
long-term incentive portfolio, contribute to our retention objectives and
recognize the important aspect of aligning compensation and shareholder
returns.
|
Ÿ
|
Retirement:
Tax qualified defined benefit and defined contribution plans apply to
salaried employees of our U.S. companies who meet eligibility
requirements. In addition, our nonqualified defined benefit plan provides
a select group of participants with benefits above the level permitted
under a qualified plan.
|
Ÿ
|
working
with the Committee in its decisions regarding the approval of all general
compensation plans and policies, including pension, savings, incentive and
equity-based plans;
|
Ÿ
|
consulting
on the corporate and individual goals and objectives relevant to the
compensation of the CEO;
|
Ÿ
|
reviewing
and determining the respective corporate and individual goals and
objectives for the other named executive officers relevant to their
compensation;
|
Ÿ
|
providing
the Committee an evaluation of the performance of the other named
executive officers in light of their respective corporate and individual
goals and objectives; and
|
Ÿ
|
recommending
to the Committee the compensation levels of the other named executive
officers.
|
Ÿ
|
Operating
results determine 30% to 60% (varying by an officer’s position and duties)
of the award at target:
|
|
°
|
Operating
income: this operating measure has long been important, having
been a factor in our long-term incentive plan; in 2008 we believe we
improved our focus on this measure by shortening the performance
period;
|
|
°
|
Conversion
cost: measures our cost to convert alumina into aluminum; this
useful measure of operating efficiency has been used in our long-term
incentive plan; in 2008 we believe we improved our focus on this measure
by shortening the performance period;
|
|
° |
Safety: in
2008 we shifted the emphasis on this important measure from the long-term
plan to the annual plan.
|
|
Ÿ |
Subjective
evaluation of two elements determines the remainder of the
incentive:
|
|
°
|
Strategic: recognize
achievement of strategic milestones;
|
|
°
|
Discretionary/Individual: recognize
individual contributions to operating, financial, and strategic
success.
|
Name
|
Annual
Incentive Award Earned:
Change
from 2007 to 2008 Award
|
Mr.
Kruger
|
-43%
|
Mr.
Hale
|
-21%
|
Mr.
Bless
|
-22%
|
Mr.
Nielsen
|
-27%
|
Mr.
Casello
|
-43%
|
Ÿ
|
Performance
share awards were the primary form of long-term incentive for named
executive officers through 2007.
|
Ÿ
|
Beginning
in 2008 our long-term incentive compensation includes performance units
(generally payable in cash) and time-vested performance share units
(generally payable in shares).
|
Ÿ
|
Special
awards, such as stock options and time-vested performance shares, have
been awarded by the Committee on a selective basis generally in the case
of hiring and promotion.
|
Ÿ
|
Strategic
goals, which accounted for 50% of the award opportunity:
|
||
°
|
Growth;
|
||
°
|
Secure
competitive contracts for Company’s operations;
|
||
°
|
Decrease
leverage and improve liquidity;
|
||
°
|
Build
and maintain management team.
|
||
Ÿ
|
Operating/financial
goals, which accounted for 50% of the award opportunity:
|
||
°
|
Safety;
|
||
°
|
Free
cash flow;
|
||
°
|
Operating
income;
|
||
°
|
Conversion
costs.
|
Name
|
Long-Term
Incentive Award Earned:
Change
from Period Ending 2007
to
Period Ending 2008 Award
|
Mr.
Kruger
|
-80%
|
Mr.
Hale
|
-65%
|
Mr.
Bless
|
-72%
|
Mr.
Nielsen
|
-72%
|
Mr.
Casello
|
-72%
|
Ÿ
|
Performance
units are generally cash-settled awards based on the achievement of
strategic objectives, free cash flow goals, and Century’s total
shareholder return in relation to its peer group over a three-year
period. Moving three operating measures from the old
performance share plan into the annual incentive plan allows the Committee
to emphasize current operating focus on those operating measures and
permits the long-term program to focus on longer-term strategic
objectives. Moreover, the cash settlement provision is expected to help
executives retain the shares earned under the program described below;
however, the Committee retains the discretion to settle these awards in
stock.
|
Ÿ
|
Time-vested
performance share units are stock-settled awards that vest, in their
entirety, after three years. This program is intended to help
retain our executives and promote stock
ownership.
|
Category
|
Share
Guideline
|
|
Chief
Executive Officer
|
50,000
|
|
Executive
Vice Presidents
|
16,000
|
|
Senior
Vice Presidents
|
6,000
|
|
Vice
Presidents
|
2,000
|
|
Nonemployee,
independent directors
|
3,000
|
Peter
C. Jones (Chair)
|
John
P. O’Brien
|
John
C. Fontaine
|
Jack
E. Thompson
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)(a)
|
Option
Awards
($)(a)
|
Non-Equity
Incentive Plan Compensation
($)(b)
|
Change
in Pension Value and Nonqualified Deferred Compensation
($)
|
All
Other
Compensation
($)(c)
|
Total
($)
|
|||||||||
Logan
W. Kruger
President
and Chief Executive Officer
|
2008
|
855,000
|
637,000
|
|
1,842,997
|
389,542
|
(d
(d)
|
92,625 |
|
1,511,827
|
(e
(e)
|
14,435 |
|
5,343,426
|
|
|||
2007
|
815,000
|
1,115,000
|
|
1,105,627
|
493,402
|
—
|
|
2,514,868
|
178,630
|
|
6,222.527
|
|
||||||
2006
|
750,000
|
562,500
|
783,332
|
428,479
|
—
|
|
3,755,628
|
65,035
|
6,344,974
|
|
||||||||
Michael
A. Bless
Executive
Vice President and Chief Financial Officer
|
2008
|
422,000
|
270,000
|
|
869,203
|
(
(g)
|
—
|
26,375
|
|
27,513
|
915
|
1,616,006
|
|
|||||
2007
|
405,000
|
345,000
|
|
421,283
|
186,163
|
—
|
|
13,427
|
915
|
|
1,371,788
|
|
||||||
2006
|
352,397
|
(f)(f)
|
262,500
|
|
278,012
|
378,100
|
—
|
|
68,615
|
425,698 |
|
1,765,322
|
|
|||||
Wayne
R. Hale
Executive
Vice President and Chief Operating Officer
|
2008
|
472,000
|
278,000
|
|
963,191
|
(h
(h)
|
443,443
|
(i)
(i)
|
43,267
|
|
58,978
|
14,332
|
|
2,273,211
|
|
|||
2007
|
375,000
|
(f)(f)
|
650,000
|
|
502,979
|
886,912
|
—
|
|
339,823
|
107,056 |
|
2,861,770
|
|
|||||
Robert
R. Nielsen
Executive
Vice President, General Counsel and Secretary
|
2008
|
388,000
|
230,000
|
|
834,743
|
(j
(j)
|
93,695
|
(k
(k)
|
24,250
|
|
54,171
|
20,255
|
|
1,645,114
|
|
|||
2007
|
370,000
|
315,000
|
|
433,228
|
250,531
|
—
|
|
23,216
|
20,055
|
|
1,412,030
|
|
||||||
2006
|
233,333
|
(f)(f)
|
164,500
|
|
251,188
|
449,549
|
—
|
|
177,084
|
720
|
|
1,276,374
|
|
|||||
Giulio
Casello
Senior
Vice President of Business Development
|
2008
|
305,000
|
151,000
|
|
421,491
|
—
|
16,521
|
|
49,707
|
13,310
|
|
957,029
|
|
|||||
2007
|
275,000
|
265,000
|
|
139,435
|
—
|
—
|
|
9,487
|
43,109
|
|
732,031
|
|
(a)
|
These
amounts represent the expense recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2008, in accordance with
FAS 123(R) for awards pursuant to the 1996 Plan and thus includes amounts
from awards granted in and prior to 2008. Assumptions used in
the calculation of these amounts are included in note 14 to our audited
financial statements for the fiscal year ended December 31, 2008 included
in our Annual Report on Form 10-K.
|
|
(b)
|
These
amounts represent the expense recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2008, for performance unit
awards granted pursuant to our Long-term Incentive Plan for the 2008-2010
Plan period.
|
|
(c)
|
All
other compensation includes: (i) matching contributions under our
401(k) Plan for each of the named executive officers (except for Mr. Bless
who did not participate in the plan) and (ii) Company-paid life insurance
premiums in 2008.
|
|
(d)
|
Represents
the expense recognized for financial statement reporting purposes for the
fiscal year ended December 31, 2008, in accordance with FAS 123(R) for
awards pursuant to the 1996 Plan for 100,000 options to purchase our
common stock awarded to Mr. Kruger on December 14, 2005, based on the
Black-Scholes fair value calculation of the award on the grant date. Mr.
Kruger's options vested one-third each on December 14, 2006, December 14,
2007, and December 14, 2008.
|
|
(e)
|
The
value reflects the aggregate change in the actuarial present value of Mr.
Kruger's accumulated benefit under the Enhanced SERP. Mr.
Kruger is the only named executive officer currently participating in the
Enhanced SERP. If Mr. Kruger remains employed by Century until
December 13, 2015, he will be fully vested in the Enhanced SERP
benefit.
|
|
(f)
|
The
amounts reflected are prorated for the portion of the year the executive
was employed by us. Messrs. Hale, Bless and Nielsen commenced
their employment on March 1, 2007, January 23, 2006 and May 1, 2006,
respectively.
|
|
(g)
|
The
value shown includes $196,399 recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2008, in accordance with
FAS 123(R) for awards pursuant to the 1996 Plan for 20,000 service-based
performance shares awarded to Mr. Bless on January 23, 2006, based on the
Black-Scholes fair value calculation of the award on the grant date. Mr.
Bless’s service-based performance shares vested one-third each on January
22, 2007, January 22, 2008, and January 22, 2009. Although we
did not pay dividends on our common stock during the vesting period, to
the extent we pay dividends on our common stock, dividend equivalents will
accrue on the service-based performance shares from the date of grant and
will become payable upon vesting.
|
|
(h)
|
The
value shown includes $376,151 recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2008, in accordance with
FAS 123(R) for awards pursuant to the 1996 Plan for 25,000 service-based
performance shares awarded to Mr. Hale on March 1, 2007, based on the
Black-Scholes fair value calculation of the award on the grant date. Mr.
Hale’s service-based performance shares vested one-third each on March 1,
2008 and March 1, 2009 and the balance vests on March 1,
2010. To the extent we pay dividends on our common stock,
dividend equivalents will accrue on the service-based performance shares
from the date of grant and will become payable upon vesting.
|
|
(i)
|
Represents
the expense recognized for financial statement reporting purposes for the
fiscal year ended December 31, 2008, in accordance with FAS 123(R) for
awards pursuant to the 1996 Plan for 50,000 options to purchase our common
stock awarded to Mr. Hale on March 1, 2007, based on the Black-Scholes
fair value calculation of the award on the grant date. Mr. Hale’s options
vested one-third each on March 1, 2007, March 1, 2008, and March 1,
2009.
|
|
(j)
|
The
value shown includes $238,050 recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2008, in accordance with
FAS 123(R) for awards pursuant to the 1996 Plan for 15,000 service-based
performance shares awarded to Mr. Nielsen on May 1, 2006, based on the
Black-Scholes fair value calculation of the award on the grant date. Mr.
Nielsen’s service-based performance shares vested one-third each on May 1,
2007, May 1, 2008, and May 1, 2009. Although we did not pay dividends
on our common stock during the vesting period, to the extent we pay
dividends on our common stock, dividend equivalents will accrue on the
service-based performance shares from the date of grant and will become
payable upon vesting.
|
|
(k)
|
Represents
the expense recognized for financial statement reporting purposes for the
fiscal year ended December 31, 2008, in accordance with FAS 123(R) for
awards pursuant to the 1996 Plan for 20,000 options to purchase our common
stock awarded to Mr. Nielsen on May 1, 2006, based on the Black-Scholes
fair value calculation of the award on the grant date. Mr. Nielsen’s
options vested one-third each on May 1, 2006, May 1, 2007, and April 30,
2008.
|
Estimated
Future Payouts Under
Non-Equity
Incentive Plan Awards
|
Estimated
Future Payouts Under
Equity
Incentive Plan Awards
|
Grant
Date Fair Value of Stock and Option Award($)(c)
|
|||||||
Name
|
Grant
Date
|
Threshold
($)
|
Target($)(a)
|
Maximum($)
|
Threshold
(#)
|
Target(#)(b)
|
Maximum(#)
|
||
Logan
W. Kruger
|
April
7, 2008
|
277,875
|
555,750
|
1,111,500
|
—
|
9,410
|
—
|
661,429
|
|
Michael
A. Bless
|
April
7, 2008
|
79,125
|
158,250
|
316,500
|
—
|
2,680
|
—
|
188,377
|
|
Wayne
R. Hale
|
April
7, 2008
|
129,800
|
259,600
|
519,200
|
—
|
4,400
|
—
|
309,276
|
|
Robert
R. Nielsen
|
April
7, 2008
|
72,750
|
145,500
|
291,000
|
—
|
2,460
|
—
|
172,913
|
|
Giulio
Casello
|
April
7, 2008
|
49,563
|
99,125
|
198,250
|
—
|
1,680
|
—
|
118,087
|
(a)
|
Represents
the value of the target award of Performance Units, valued at $1 per unit
under the 2008-2010 Long-term Incentive Plan. Units will be
awarded in 2011 after consideration by the Compensation
Committee.
|
(b)
|
Represents
the number of time-vested performance share units granted to the named
executive officer under the 2008-2010 Long-term Incentive
Plan. These performance share units will vest December 31,
2010.
|
(c)
|
Represents
the grant date fair value of equity awards determined in accordance with
FAS 123(R).
|
Option Awards
|
Stock
Awards
|
||||||||||||||
Name
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable
|
Number
of Securities Underlying Unexercised Options
(#)
Unexer-cisable
|
Equity
Incentive Plan Awards:
Number
of Securities Underlying Unexercised Unearned Options
(#)
|
Option
Exercise Price
($)
|
Option
Expiration
Date
|
Number
of Shares or Units of Stock That Have Not Vested
(#)
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)(g)
|
Equity
Incentive Plan Awards:
Number
of Unearned Shares, Units, or Other Rights That Have Not
Vested
(#)
|
Equity
Incentive Plan Awards:
Market
or Payout Value of Unearned Shares, Units or Other Rights That Have Not
Vested
($)(g)
|
||||||
Logan
W. Kruger
|
70,000
|
23.98
|
Dec.
14, 2015
|
—
|
—
|
|
|||||||||
9,410
|
(a)
|
94,100
|
|
||||||||||||
15,152
|
(b)
|
151,520
|
|
||||||||||||
Michael
A. Bless
|
30,000
|
29.92
|
Jan.
23, 2016
|
6,667
|
(d)
|
66,670
|
|
||||||||
2,680
|
(a)
|
26,800
|
|
||||||||||||
6,737
|
(b)
|
67,370
|
|
||||||||||||
Wayne
R. Hale
|
33,333
|
16,667(c)
|
45.14
|
March
1, 2017
|
16,667
|
(e)
|
166,670
|
|
|||||||
4,400
|
(a)
|
44,000
|
|
||||||||||||
7,485
|
(b)
|
74,850
|
|
||||||||||||
Robert
R. Nielsen
|
8,335
|
47.61
|
May
1, 2016
|
5,000
|
(f)
|
50,000
|
|
||||||||
2,460
|
(a)
|
24,600
|
|
||||||||||||
6,155
|
(b)
|
61,550
|
|
||||||||||||
Giulio
Casello
|
15,000
|
24.55
|
Sept.
12, 2015
|
—
|
— |
|
|||||||||
1,680
|
(a)
|
16,800
|
|
||||||||||||
4,256
|
(b)
|
42,560
|
|
(a)
|
Represents
the number of time-vested performance share units granted under the
2008-2010 Long-term Incentive Plan and vest on December 31,
2010.
|
(b)
|
Represents
the number of performance share units awarded to the named executive
officer for the 2007-2009 performance period which will be considered by
our Compensation Committee in 2010.
|
(c)
|
These
options vested on March 1, 2009.
|
(d)
|
These
service-based performance shares vested on January 22,
2009.
|
(e)
|
One
half of these service-based performance shares vested on March 1,
2009. The remaining shares will vest March 1,
2010.
|
(f)
|
These
service-based performance shares will vest on May 1,
2009.
|
(g)
|
Based
on the closing market price for shares of our common stock of $10.00 on
December 31, 2008, the last trading day for the fiscal
year.
|
Option
Awards
|
Stock
Awards
|
|||||
Name
|
Number
of Shares
Acquired
on Exercise
|
Value
Realized
on
Exercise ($)
|
Number
of Shares
Acquired
on Vesting(a)
|
Value
Realized
on
Vesting($)(b)
|
||
Logan
W. Kruger
|
—
|
162,611
|
802,452
|
|||
Michael
A. Bless
|
—
|
75,250
|
240,636
|
|||
Wayne
R. Hale
|
—
|
63,643
|
310,315
|
|||
Robert
R. Nielsen
|
16,665
|
342,211
|
65,177
|
245,578
|
||
Giulio
Casello
|
6,000
|
234,139
|
42,920
|
84,552
|
(a)
|
Includes
shares received pursuant to the long-term incentive program for the 2006 -
2008 performance program period by each named executive officer in March
2009.
|
(b)
|
Computed
by multiplying the number of shares vested by the market value of the
shares on the date of
vesting.
|
Name
|
Plan
|
Number
of Years Credited
|
Present
Value of
Accumulated
Benefit ($)
|
Payments
During
Last
Fiscal Year ($)
|
|
Logan
W. Kruger
|
Non-contributory
Defined Pension Plan
|
3.08
|
288,162
|
|
—
|
Supplemental
Retirement Income Benefit Plan (SERP)
|
9,940,632
|
|
—
|
||
Michael
A. Bless
|
Non-contributory
Defined Pension Plan
|
2.92
|
99,515
|
|
—
|
Supplemental
Retirement Income Benefit Plan (SERP)
|
10,040
|
|
—
|
||
Wayne
R. Hale
|
Non-contributory
Defined Pension Plan
|
1.83
|
398,801
|
|
—
|
Supplemental
Retirement Income Benefit Plan (SERP)
|
—
|
—
|
|||
Robert
R. Nielsen
|
Non-contributory
Defined Pension Plan
|
2.67
|
245,498
|
|
—
|
Supplemental
Retirement Income Benefit Plan (SERP)
|
8,972
|
|
—
|
||
Giulio
Casello
|
Non-contributory
Defined Pension Plan
|
3.33
|
65,087
|
|
—
|
Supplemental
Retirement Income Benefit Plan (SERP)
|
17,217
|
—
|
Type
of Termination
|
||||||||||||||
Name
|
Voluntary
|
By
Company
without
Cause
or
by Officer with Good Reason
|
By
Company
with
Cause
|
Retirement
|
Disability
|
Death
|
Following
a
Change
in Control
|
|||||||
Logan
W. Kruger
|
||||||||||||||
Salary
|
$ —
|
$
2,565,000
|
$
—
|
$ —
|
$ 1,710,000
|
$
—
|
$ 2,565,000
|
|||||||
Bonus
(c)
|
—
|
3,345,000
|
—
|
—
|
2,230,000
|
—
|
3,345,000
|
|||||||
Qualified
Retirement Benefits
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||
SERP
|
614,409
|
(a)
|
614,409
|
(a)
|
614,409
|
(a)
|
614,409
|
(a)
|
614,409
|
(a)
|
307,204
|
(b)
|
1,134,948
|
(f)
|
SERP
with Enhancement
|
—
|
5,526,715
|
(a)(k)
|
2,498,050
|
(a) |
1,294,025
|
(b) |
5,981,386
|
(f)
|
|||||
Performance
Shares
|
—
|
—
|
—
|
—
|
94,100
|
(d) |
94,100
|
(d) |
245,620
|
(g)
|
||||
Service
Based Performance Shares
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||
Performance
Units
|
—
|
—
|
—
|
—
|
—
|
(e)
|
—
|
(e)
|
556,000
|
(j)
|
||||
Excise
Tax Gross Up
|
—
|
—
|
—
|
—
|
—
|
—
|
6,940,000
|
|||||||
Insurance
Continuation
|
—
|
—
|
—
|
—
|
—
|
—
|
52,000
|
|||||||
Total
|
$
614,409
|
$ 12,051,124
|
$ 614,409
|
$ 614,409
|
$7,146,559
|
$
1,650,329
|
$ 20,819,954
|
|||||||
Michael
A. Bless
|
||||||||||||||
Salary
|
$ —
|
$ 1,266,000
|
$
—
|
$
—
|
$ 844,000
|
$ —
|
$
1,266,000
|
|||||||
Bonus
(c)
|
—
|
1,035,000
|
—
|
—
|
690,000
|
—
|
1,035,000
|
|||||||
Qualified
Retirement Benefits
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||
SERP
|
109,555
|
(a)
|
109,555
|
(a)
|
109,555
|
(a)
|
109,555
|
(a)
|
109,555
|
(a)
|
54,777
|
(b)
|
168,514
|
(f)
|
SERP
with Enhancement
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||
Performance
Shares
|
—
|
—
|
—
|
—
|
26,800
|
(d)
|
26,800
|
(d)
|
94,170
|
(g)
|
||||
Service
Based Performance Shares
|
—
|
—
|
—
|
—
|
66,670
|
(h)
|
66,670
|
(h)
|
66,670
|
(h)
|
||||
Performance
Units
|
—
|
—
|
—
|
—
|
—
|
(e)
|
—
|
(e)
|
158,500
|
(j)
|
||||
Excise
Tax Gross Up
|
—
|
—
|
—
|
—
|
—
|
—
|
1,235,000
|
|||||||
Insurance
Continuation
|
—
|
—
|
—
|
—
|
—
|
—
|
52,000
|
|||||||
Total
|
$ 109,555
|
$
2,410,555
|
$ 109,555
|
$ 109,555
|
$1,737,025
|
$
148,247
|
$
4,075,854
|
|||||||
Wayne
R. Hale
|
||||||||||||||
Salary
|
$ —
|
$
1,416,000
|
$
—
|
$
—
|
$ 944,000
|
$
—
|
$
1,416,000
|
|||||||
Bonus
(c)
|
—
|
1,050,000
|
—
|
—
|
700,000
|
—
|
1,050,000
|
|||||||
Qualified
Retirement Benefits
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||
SERP
|
163,880
|
(a)
|
163,880
|
(a)
|
163,880
|
(a)
|
163,880
|
(a)
|
163,880
|
(a)
|
81,940
|
(b)
|