UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
Filed by
the Registrant x
Filed by
a Party other than the Registrant ¨
Check the
appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to § 240.14a-12
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CENTURY
ALUMINUM COMPANY
(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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No
fee required.
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Fee
Computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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Title
of each class of securities to which transaction
applies:
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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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maximum aggregate value of transaction:
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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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NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
May
27, 2009
___________
To the
Stockholders of Century Aluminum Company:
We invite
you to attend our 2009 Annual Meeting of Stockholders on May 27, 2009, at 8:30
a.m., local time, at our executive offices located at 2511 Garden Road, Building
A, Suite 200, Monterey, California. At the meeting, we will:
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1.
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Elect
three Class I directors to our Board, each for a term of three
years;
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2.
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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;
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3.
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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;
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4.
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Ratify
the appointment of Deloitte & Touche LLP as our independent registered
public accounting firm for the fiscal year ending December 31, 2009;
and
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5.
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Transact
any other business that may properly come before the meeting or at any
adjournments or postponements of the
meeting.
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You may
vote at the meeting if you owned our common stock at the close of business on
March 31, 2009. Please note, there are three ways that you can vote
before the meeting — by telephone, by the Internet or by mailing the proxy
card.
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By
Order of the Board of Directors,
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Robert
R. Nielsen
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Executive
Vice President and Secretary
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Monterey,
California
April 17,
2009
YOUR VOTE IS
IMPORTANT
If
you do not plan to attend the 2009 Annual Meeting, please vote as
soon as possible by
telephone or over the Internet, as
described in the enclosed materials.
If
you received a copy of the proxy card by mail, please
sign, date and
mail
the proxy card in the envelope provided.
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___________
PROXY
STATEMENT
___________
ANNUAL
MEETING OF STOCKHOLDERS
May
27, 2009
Our
Board of Directors is soliciting proxies for the 2009 Annual Meeting of
Stockholders of Century Aluminum Company, which we refer to as Century or the
Company. This booklet of information contains information about the
items you will vote on at the Annual Meeting. Distribution of these documents is
scheduled to begin on or about April 17, 2009.
Q. When
and where is the Annual Meeting of Stockholders being held?
A. The
2009 Annual Meeting is being held on May 27, 2009 at 8:30 a.m. local time, at
our principal executive offices which are located at 2511 Garden Road, Building
A, Suite 200, Monterey, California 93940.
Q. Who
is entitled to vote and how many votes do I have?
A. You
may vote at the 2009 Annual Meeting if you owned shares of our common stock at
the close of business on March 31, 2009. Each stockholder is entitled
to one vote for each share of common stock held.
Q. How
many shares are available to vote in the Annual Meeting?
A. On
March 31, 2009, the record date for the meeting, there were 74,139,488 shares of
Century common stock outstanding.
Q. What
constitutes a quorum for the meeting?
A. The
holders of a majority of the outstanding shares of Century’s common stock will
constitute a quorum for the transaction of business at the 2009 Annual
Meeting. Only shares of Century common stock that are present at the
Annual Meeting, either in person or represented by proxy (including shares that
the holder abstains from voting or does not vote with respect to one or more of
the matters present for stockholder approval), will be counted for purposes of
determining whether a quorum exists at the meeting.
Q. Why
did I receive a notice in the mail regarding the Internet availability of proxy
materials this year instead of a paper copy of the proxy materials?
A. Pursuant
to rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), we
have elected to provide access to our proxy materials over the
Internet. We believe that internet delivery of our proxy materials
allows us to provide our stockholders with the information they need, while
lowering the costs of delivery and reducing the environmental impact of our
Annual Meeting. Accordingly, we are sending a Notice of Internet
Availability of Proxy Materials (the “Notice”) to our stockholders of record and
beneficial owners (other than those who previously requested printed copies or
electronic delivery of our proxy materials) on or about April 17,
2009. All stockholders will have the ability to access the proxy
materials on the website referred to in the Notice or request to receive a
printed set of proxy materials starting April 17, 2009. Instructions
on how to access the proxy materials over the Internet or to request a printed
copy may be found in the Notice.
Q. How do I request a paper copy of the proxy materials?
A. To
request a paper copy of the proxy materials, please choose one of the following
methods: (1) by internet at www.proxyvote.com;
(2) by telephone to 1-800-579-1639; (3) by e-mail to sendmaterial@proxyvote.com. If
requesting materials by e-mail, please send a blank e-mail with the 12-digit
control number located on the Notice in the subject line. For timely
delivery of the materials to meet the voting deadlines set forth below, please
make your request on or before May 13, 2009.
Q. How
do I vote?
A. There
are three ways that you can vote your shares. Please choose only one
of the following methods:
Internet. The website for
voting is http://www.ProxyVote.com. To
vote on the Internet, please have the control number on your Notice card
available. The voting system is available 24 hours a day, seven days
a week, until 11:59 p.m. Eastern Time on Tuesday, May 26,
2009.
Telephone. If you
are located in the United States or Canada, you can vote your shares by calling
1-800-690-6903. This is a toll-free number available 24 hours a day,
seven days a week, until 11:59 p.m. Eastern Time on Tuesday, May 26,
2009. Please have the control number on your Notice card available
and follow the voice prompts to vote your shares.
Mail. To vote by mail, request a paper copy of the
materials by following the instructions printed on the Notice. The
paper copy of the materials will contain a voting instruction
form. Follow the instructions on the instruction form. If
you mail your proxy card, we must receive it before 10:00 a.m. Eastern Time on
Tuesday, May 26, 2009.
In
Person. If you are the stockholder of record, you may
vote by attending the Annual Meeting on Wednesday, May 27, 2009 at 8:30 a.m.
local time, at our executive offices located at 2511 Garden Road, Building A,
Suite 200, Monterey, California. If your shares are held in “street
name,” you can vote in person at the Annual Meeting if you obtain a legal proxy
from your bank or broker. Please contact your bank or broker for
information.
Q. What
is the difference between holding shares as a stockholder of record and as a
beneficial owner?
A. Most
of our shareholders hold their shares through a stock broker, bank or other
nominee rather than directly in their own name. As summarized below, there are
some differences between shares held of record and those owned
beneficially.
Stockholder of Record. If
your shares are registered directly in your name with our transfer agent,
Computershare Investor Services LLC, you are considered the stockholder of
record of those shares. As the stockholder of record, you have the
right to grant your voting proxy directly to us or to vote in person at the
Annual Meeting.
Beneficial Owner. If
your shares are held in a stock brokerage account or by a bank or other nominee,
you are considered the beneficial owner of shares held in “street
name.” The Notice is being forwarded to you by your broker or
nominee, who is considered to be the stockholder of record for those
shares. As the beneficial owner, you have the right to direct your
broker, bank or nominee on how to vote. Your broker or nominee has
enclosed a voting instruction card for you to use in directing your broker or
nominee as to how to vote your shares. As a beneficial holder, you
are invited to attend the Annual Meeting; however, because you are not the
stockholder of record, you may not vote these shares in person at the Annual
Meeting unless you obtain a signed proxy from the record holder giving you the
right to vote the shares.
Q. How
do I vote my shares that are held in a Century 401(k) plan?
A. If
you participate in one of Century’s 401(k) plans, you must provide the trustee
of the 401(k) plan with your voting instructions in advance of the
meeting. You may do this by returning your voting instructions by
mail, or submitting them by telephone or electronically, using the
Internet. You cannot vote your shares in person at the Annual
Meeting; the trustee is the only one that can directly vote your
shares. The trustee will vote your shares as you have instructed. If
the trustee does not receive your instructions, your shares generally will be
voted in proportion to the way the other plan participants voted. To
allow sufficient time for voting by the trustee, your voting instructions must
be received before May 22, 2009.
Q.
May I change my vote?
A. Yes. If
you are the stockholder of record, you may revoke a proxy or change your voting
instructions by:
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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;
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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
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voting
in person at the Annual
Meeting.
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If
you hold your shares in one of Century’s 401(k) plans, notify the plan trustee
in writing prior to May 22, 2009, that your voting instructions are revoked or
should be changed.
If
your shares are held in “street name,” you must follow the specific instructions
provided to you to change or revoke any instructions that you may have already
provided to your bank, broker or other nominee.
Q.
What are the voting requirements to elect the directors and to approve each of
the proposals discussed in this proxy statement?
A. Directors
are elected by a plurality of votes, which means that the three nominees that
receive the highest number of votes will be elected as directors, even if a
nominee does not receive a majority of the votes cast. The
affirmative vote of the holders of a majority of the issued and outstanding
shares of common stock is required for the approval of the amendment to the
Restated Charter. The other items submitted to stockholders for a
vote at the meeting require the affirmative vote of a majority of the votes
cast.
Your
shares will be voted in accordance with your
instructions. Abstentions will be treated as shares that are present
and entitled to vote for purposes of determining a quorum for a matter, but will
not be counted as a vote in favor of such matter. Accordingly, an
abstention from voting on a matter will not be counted for the purposes of
electing directors and will have the same effect as a vote against other
matters. If a bank, broker or other nominee holding stock in “street
name” indicates on the proxy that it does not have discretionary authority to
vote as to a particular matter, those shares will count for quorum purposes, but
are not counted as shares present and entitled to vote on any matter other than
to amend the Restated Charter. Broker non-votes will have the effect
of a vote against the proposal to amend the Restated Charter and the proposal to
amend the Company’s 1996 Plan.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 27, 2009
The
Notice of Annual Meeting, 2009 Proxy Statement and 2008 Annual Report are
available at http://investor.shareholder.com/cenx/annuals.cfm.
Our
Board of Directors is divided into three classes: Class I, Class II and Class
III. Directors in each class are elected to serve for three-year terms, with
each class standing for election in successive years. Three Class I
Directors will be elected at the 2009 Annual Meeting to serve a three-year term
that will expire at the 2012 Annual Meeting. The persons named as
proxies intend to vote for the election of each of the nominees listed below
unless you indicate on the proxy card that your vote should be withheld from any
or all of the nominees. If any nominee declines or is unable to
serve, the persons named as proxies will use their best judgment in voting for
any available nominee. Each of the nominees named below has indicated
their willingness to serve if elected and the Board of Directors has no reason
to believe that any of the nominees will not be available to
serve. Set forth below is background information for each of the
three nominees for election as well as the other members of our Board whose
terms expire in 2010 and 2011. Each nominee is currently a director
of Century.
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Class
I Directors with Terms to Expire in 2012
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Name
and Age*
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Business
Experience and Principal Occupation or
Employment
During Past 5 Years; Other Directorships
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Director
Since
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Logan
W. Kruger
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58
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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.
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2005
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Willy R.
Strothotte (1)
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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.
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1996
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Jarl
Berntzen
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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. from October 2007 to April 2009;
Senior Vice President, Barrington Associates, LLC from April 2005 to
February 2006; and Founder, Berntzen Capital Management, LLC from March
2003 to April 2005.
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2006
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Class
II Directors with Terms to Expire in 2010
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Name
and Age*
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Business
Experience and Principal Occupation or
Employment
During Past 5 Years; Other Directorships
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Director
Since
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John
C. Fontaine
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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.
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1996
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John
P. O’Brien
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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.
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2000
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Peter
C. Jones
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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.
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2007
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Class
III Directors Standing with Terms to Expire in 2011
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Name
and Age*
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Business
Experience and Principal Occupation or
Employment
During Past 5 Years; Other Directorships
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Director
Since
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Robert
E. Fishman, Ph.D.
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57
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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.
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2002
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Jack
E. Thompson
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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.
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2005
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Catherine
Z. Manning
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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.
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2008
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*
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Age
as of March 31, 2009
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(1)
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Mr.
Strothotte was designated to serve as one of our directors by Glencore
International AG, or
Glencore.
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Board
and Committee Meetings, Directors’ Compensation and Communication with
Directors
Our
Board of Directors presently consists of 9 directors. The Board, which is
responsible for supervision of the overall affairs of Century, establishes
corporate policies, sets strategic direction, and oversees management, which is
responsible for Century’s day-to-day operations. The Board met 8
times during 2008.
To
assist it in carrying out its duties, the Board has established various standing
committees. Each standing committee of the Board and its members are listed in
the table below. The Board designates the members of each committee
and the committee chair annually, based on the recommendations of the Governance
and Nominating Committee. The Board has adopted written charters for
each of its committees, which are available in the Investors section of our
website, www.centuryaluminum.com,
under the tab “Corporate Governance.” Each director attended
100% of all meetings of the Board and each Board committee on which such
director served. We encourage, but do not require, the attendance of
Board members at our Annual Meetings. All of our directors attended
in person or by telephone the 2008 Annual Meeting held on June 24,
2008.
Board
Committees and Meetings
The
table below identifies the name and current members of each standing committee
of our Board. Ms. Manning began serving on our Audit Committee
commencing July 1, 2008.
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Name
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Audit
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Compensation
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Governance
&
Nominating
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Health,
Safety &
Sustainability
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Jarl
Berntzen
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X
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X
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Robert
E. Fishman
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X
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X
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X*
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John
C. Fontaine
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X
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X
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Peter
C. Jones
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X
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X*
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X
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Catherine
Z. Manning
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X*
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X
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John
P. O’Brien
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X
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X
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Jack
E. Thompson
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X
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X*
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X
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*
Committee Chair
Independent
Directors
The
Board has determined that Jarl Berntzen, Robert E. Fishman, John C. Fontaine,
Peter C. Jones, John P. O’Brien, Jack E. Thompson and Catherine Manning are
independent directors under the criteria established by
NASDAQ.
Audit
Committee
The
Audit Committee:
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oversees
the financial reporting process for which management is
responsible;
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approves
the engagement of the independent auditors for audit and non-audit
services;
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monitors
the independence of the independent auditors;
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reviews
and approves all audit and non-audit services and fees;
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reviews
the scope and results of the audit with the independent
auditors;
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reviews
the scope and results of internal audit procedures with our internal
auditors;
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evaluates
and discusses with the independent auditors and management the
effectiveness of our system of internal accounting
controls;
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reviews
and approves related party transactions pursuant to our Statement of
Company Policy Regarding Related Party Transactions;
and
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makes
inquiries into other matters within the scope of its
duties.
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During
2008, the members of the Audit Committee were Messrs. Berntzen, Fishman,
O’Brien, Jones and Ms. Manning. Each member of the Audit Committee is
“independent,” as required under applicable NASDAQ listing standards and Rule
10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange
Act. In addition, the Board has determined that John P. O’Brien and
Catherine Z. Manning are each an “audit committee financial expert” within the
meaning set forth in regulations of the Securities and Exchange
Commission. In 2008, the Audit Committee held 5
meetings. Effective January 1, 2009, Mr. O’Brien was succeeded as
chair of the Audit Committee by Ms. Manning, who was elected as a director on
July 1, 2008.
Compensation
Committee
The
Compensation Committee reviews and establishes the compensation for our
executive officers and has oversight responsibility for administering and
awarding grants under our 1996 Stock Incentive Plan, as amended, which we refer
to as the 1996 Plan. Each member of the Compensation Committee is an
independent director as required under applicable NASDAQ listing
standards. During 2008, the members of the Compensation Committee
were Messrs. Fontaine, O’Brien, Thompson and Jones. Mr. Jones was
appointed Chair of the Compensation Committee on January 1, 2008. The
Compensation Committee held 9 meetings in 2008.
Governance
and Nominating Committee
The
Governance and Nominating Committee is responsible for:
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evaluating
the size and composition of the Board;
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identifying,
recruiting and recommending candidates for election to the Board and its
committees;
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overseeing
corporate governance matters; and
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reviewing
and making periodic recommendations concerning our corporate governance
policies and procedures.
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The
Governance and Nominating Committee solicits recommendations for potential Board
candidates from a variety of sources, including directors, officers, other
individuals with whom the Governance and Nominating Committee members are
familiar, through its own research, and third-party research. The
Governance and Nominating Committee will also consider nominees recommended by
stockholders who submit such recommendations in writing to our Corporate
Secretary. The qualifications and standards the Governance and
Nominating Committee will apply in evaluating any recommendations for nomination
to the Board include, but are not limited to:
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significant
business or public company experience;
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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;
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skills
in finance, international business and knowledge about Century’s business
or industries;
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personal
qualities of leadership, character, judgment and integrity;
and
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requirements
relating to composition of the Board under applicable law and listing
standards.
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During
2008, the members of the Governance and Nominating Committee were Messrs.
Berntzen, Fishman, Fontaine and Thompson. Mr. Thompson has served as
the Chairman of the Governance and Nominating Committee since March
2006. Each member of the Governance and Nominating Committee is
“independent” as required under applicable NASDAQ listing
standards.
The
Governance and Nominating Committee recommended to the Board that Logan W.
Kruger, Willy R. Strothotte and Jarl Berntzen be nominees for election as Class
I Directors at the 2009 Annual Meeting. After considering the
recommendations of the Governance and Nominating Committee, our Board approved
the slate of director nominees to stand for election at the 2009 Annual
Meeting. In 2008, the Governance and Nominating Committee held 4
meetings.
Lead
Director/Meetings of Independent Directors
On
the recommendation of the Governance and Nominating Committee, the Board
designated John C. Fontaine to serve as the Lead Director for meetings of the
independent Board members outside the presence of management. With
the appointment of Mr. O’Brien, an independent director, as Chairman of the
Board in January 2008, the Board determined that the Company no longer required
an additional independent lead director. Following the Annual Meeting
on June 24, 2008, Mr. Fontaine resigned as lead director. Our
independent directors are scheduled to meet in executive session without the
presence of management no fewer than two times each year. The independent
directors met 14 times during 2008.
Health,
Safety and Sustainability Committee
The
Health, Safety and Sustainability Committee (the “HSS Committee”) was formed in
2008 to assist the Board with regard to oversight of Century’s policies and
management systems with respect to health, safety and sustainability matters.
Specifically, the HSS Committee is responsible for the regular review of
Century’s health, safety and sustainability policies and related practices,
assessments, performance, compliance and reporting. The HSS Committee
must meet at least twice a year and provide recommendations to the
Board. The initial members of the HSS Committee are Messrs. Fishman,
Jones and Thompson. Ms. Manning became a member of the HSS Committee
when she was elected as a director on July 1, 2008.
Directors’
Compensation
Directors
who are full-time salaried employees of Century are not compensated for their
service on the Board. The Board’s general policy is that compensation
for non-employee directors should be a mix of cash and equity-based
compensation. Effective December 1, 2008, the Board determined that
non-employee, non-independent Board members will receive compensation only in
cash. This change affords the Company the ability to avoid indirectly
increasing the beneficial ownership of any stockholder at whose direction a
member of our Board serves. The Compensation Committee evaluates the
appropriate level and form of compensation for non-employee directors at least
annually and recommends changes to the Board when appropriate. The
Board reviews the committee’s recommendations and determines the amount of
director compensation.
Equity
Awards, Meeting Fees and Retainers. In 2008, each newly elected
non-employee independent director received a one-time grant of 1,000
time-based performance share units. These time-based performance
share units vest 50% on the one year anniversary of the grant date and 50% on
the second anniversary of the grant date. In addition, each
non-employee director continuing in office after the Annual Meeting of
stockholders received an annual grant of time-based performance share units
valued at $75,000. These time-based performance share units vest 100%
on the one year anniversary of the grant date. The shares were
granted on the business day following the Annual Meeting based on the average
closing price of Century’s common stock for the 60 trading days preceding the
grant date and exceeded the fair market value of our common stock as determined
in accordance with the 1996 Plan. Vesting of time-based performance
share unit awards are subject to acceleration under certain circumstances
pursuant to the terms of an award agreement.
During
2008, non-employee directors (other than the Chairman) received an annual
retainer of $45,000 for their services. The Chairman of the Board received an
annual retainer of $110,000. The Lead Director received an additional $25,000
annual retainer, the Chairs of the Audit and Compensation Committees each
received an additional $10,000 and the Chairs of the Governance and Nominating
and Health, Safety and Sustainability Committees each received an additional
$5,000 annual retainer. In addition, each non-employee director received a fee
of $2,000 for each Board or Board committee meeting attended. The Chair of the
Audit Committee received an additional $1,000 per Audit Committee meeting
attended.
The
equity awards, meeting fees and retainers above, were made based on a
competitive assessment in 2008 of director pay practices among the peer
companies used for our executive compensation benchmarking. Based on
the results of this study, in April 2008, the Board approved the following
modifications to non-employee director compensation, effective January 1,
2008:
|
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.
|
The
Board did not seek to modify the value of equity awards; however, the Board
decided to change the forms of future equity awards to non-employee
directors. Rather than stock options, continuing directors will now
receive annual grants of time-based performance share units that vest following
12 months of service with a targeted value of $75,000, and new directors will
receive a one-time initial award of 1,000 performance share units that vest 50%
following 12 months of service and 50% following 24 months of service for
2008. The annual performance share unit awards were calculated based
on the average closing price of Century’s common stock for the 60 trading days
preceding the grant date. Non-employee independent directors now also
have the option to elect to defer cash retainers into time-based performance
share units which would then vest at the termination of their service (subject
to acceleration due to death or disability), and may also elect to defer
settlement of the awards of time-based performance share units until their
termination of service. Effective December 1, 2008, non-employee
directors who are not independent will be paid the annual retainer in cash and
of the equivalent value the annual equity award in cash.
Expense Reimbursement. All
directors were reimbursed for their travel and other expenses incurred in
attending Board and Board committee meetings, other than Mr. Strothotte who
waived his right to receive expense
reimbursement.
The
following table sets forth the compensation paid to each director in
2008.
2008
Director Compensation
|
Name(a)
|
Fees
Earned or Paid in Cash ($)(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.
|
Stockholder
Communications with the Board of Directors
Stockholders may communicate with the Board or any individual director(s) by
sending a written communication in an envelope addressed to the Board or the
appropriate director(s) in care of our Corporate Secretary at the address for
our principal executive offices located on the cover page of this proxy
statement.
OWNERSHIP
OF CENTURY COMMON STOCK
Security
Ownership of Certain Beneficial Owners
The
following table sets forth certain information concerning the beneficial
ownership of our common stock as of March 31, 2009 (except as otherwise noted)
by each person known by us to be the beneficial owner of five percent or more of
the outstanding shares of our common stock. The percent of class
shown below is based on 74,139,488 shares of common stock outstanding as of
March 31, 2009.
|
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 223,252 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.
|
Security
Ownership of Directors and Executive Officers
The
following table sets forth certain information concerning the beneficial
ownership of our common stock as of March 31, 2009 by: (i) each of our current
directors, (ii) each executive officer named in the Summary Compensation Table
under the heading “Executive Compensation,” and (iii) all of our directors and
executive officers as a group. No director or executive officer
beneficially owned more than 1% of our outstanding common stock. All of our
directors and executive officers as a group beneficially owned 0.88% of our
outstanding common stock.
|
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.
|
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires our directors and executive officers, and
persons owning more than 10% of a registered class of our equity securities, to
file with the Securities and Exchange Commission reports of ownership and
changes in ownership of our equity securities. These same persons are
also required to furnish us with copies of all such forms. Based
solely on a review of the copies of the forms furnished to us and written
representations that no Form 5 filings were required, we believe that, with
respect to the 2008 fiscal year, all required Section 16(a) filings were timely
made, except each of our Section 16 officers, being Messrs. Logan W. Kruger,
Michael A. Bless, Wayne R. Hale, Robert R. Nielsen, Giulio Casello, Steve
Schneider, William J. Leatherberry and Jerry E. Reed, and Ms. Michelle M. Lair
filed late Form 4’s related to the granting of time-based performance share
units on April 7, 2008; Mr. Strothotte and Glencore filed late Form 4’s
with respect to Mr. Strothotte’s sale and Glencore’s purchase of Mr.
Strothotte’s shares on June 9, 2008; and Mr. Steve Schneider filed a late Form 4
with respect to a rebalancing of shares held in his 401(k) account on November
4, 2008.
CERTAIN
RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Related
Person Transaction Policy
We
have a written policy and written procedures for the review, approval and
monitoring of transactions involving Century or its subsidiaries and “related
persons.” For the purposes of the policy, “related persons” include executive
officers, directors and director nominees and their immediate family members,
and stockholders owning five percent or greater of our outstanding stock and
their family members. Certain transactions are to be approved by the independent
directors acting as a separate body. A copy of our Related Person Transaction
Policy is available in the Investor section of our website,
www.centuryaluminum.com, under the tab “Corporate Governance.”
Our
Related Person Transaction Policy is administered by the Audit Committee and
applies to all related person transactions entered into after its adoption. This
policy applies, subject to certain specific exclusions, to any transaction,
arrangement or relationship or any series of similar transactions, arrangements
or relationships in which Century or any of its subsidiaries was or is to be a
participant and where any related person had or will have a direct or indirect
interest. Transactions involving less than $50,000 are not subject to review and
approval under the policy. In addition, the policy defines certain ordinary
course transactions with Glencore that are not material and not subject to
review and approval under the policy, although those transactions are otherwise
reviewed and approved by our Audit Committee. Pursuant to the policy, the Audit
Committee is responsible for reviewing qualifying related person transactions.
However, all transactions with Glencore for new long-term supply agreements are
subject to review under the policy and any other transaction the Audit Committee
Chair determines is material is reviewed by the independent directors, acting as
a separate body of our Board of Directors. Based on its consideration of all
relevant facts and circumstances, whether the transaction is on terms that are
fair and reasonable to Century and whether the transaction is in the business
interests of Century, the Audit Committee or independent directors, as the case
may be, will decide whether or not to approve or ratify such transaction. If a
related person transaction is submitted to the Audit Committee after the
commencement of the transaction, the Audit Committee or independent directors,
as the case may be, will evaluate all options available, including the
ratification, rescission or termination of such transaction.
Recent
Transactions with Glencore
As
of December 31, 2008, we had no outstanding forward financial sales contracts
with Glencore. In November 2004 and June 2005, we entered into forward financial
sales contracts with Glencore for the years 2006 through 2010 and 2008 through
2015, respectively (“Financial Sales Contracts”), for a minimum of 300,600 and
460,200 metric tons of primary aluminum, respectively, over the entire terms of
the contracts, which contained clauses that triggered additional shipment
volumes when the market price for a contract month was above the contract
ceiling price. These contracts were to be settled monthly. On July 7, 2008,
Century and Glencore agreed to terminate the Financial Sales
Contracts. The transaction consisted of the issuance by Century to
Glencore of 160,000 shares of non-voting preferred stock, which shares are
convertible under certain circumstances into our common stock at a conversion
ratio of 100 shares of common stock per each share of Series A Convertible
Preferred Stock, for $1,090.3 million, followed immediately by a cash payment by
Century to Glencore of $1,315 million (with an additional $505.3 million
cash payment being deferred). On July 16, 2008, we completed an
equity offering and used the net proceeds, after underwriter’s commissions and
discounts and offering expenses, of $442.1 million to pay a portion of the
deferred termination amount. In October 2008, we made the final $25 million
principal payment to Glencore of the deferred termination amount.
Financial Sales Contract Cash Settlement
Sensitivity
Cash
payments for the historical settlements of the recently terminated Financial
Sales Contracts with Glencore were based on the contract shipment volume,
contract price and the actual LME price for primary aluminum for the
corresponding period. In 2008 through the date of the termination transaction on
July 7, 2008, we settled 100,200 metric tons, which consisted of the original
contract volume plus the additional volume that was triggered when the LME
exceeded certain thresholds. Our cash payments for the contract settlements in
2008 were $115 million.
Approval of Transactions with
Glencore
During
2008, all transactions with Glencore, subject to our approval policy described
above, were approved by the Audit Committee or by a special committee comprised
solely of independent directors. As well, our independent directors were advised
by independent financial and legal advisors in connection with
the termination of the Financial Sales Contracts discussed
above.
Purchases from Glencore
In
2008, we purchased alumina from Glencore on both a spot and long-term contract
basis. In 2008, we purchased $137.2 million of alumina from Glencore under
negotiated long-term alumina supply contracts at prices that were based on the
LME price for primary aluminum. We believe that all of the alumina purchased
under these contracts was purchased at prices which approximated market. We also
purchased $9.2 million of alumina from Glencore in 2008 on a spot basis. We
determined the market price for the spot alumina we purchased based on a survey
of suppliers at the time that had the ability to deliver spot alumina on the
specified terms. Based on this survey, we believe that all of the
spot alumina purchased from Glencore in 2008 was purchased at market prices.
During 2008, we purchased from Glencore all of our alumina requirements for
Ravenswood. The supply agreement for Ravenswood runs through December
31, 2009.
Sales
to Glencore
We
sold primary aluminum and alumina to Glencore in 2008 on both a spot and
long-term contract basis. For the year ended December 31, 2008, net
sales to Glencore amounted to $496 million, excluding gains and losses realized
on the settlement of cash flow hedges. Sales of primary aluminum to Glencore
amounted to approximately 25.2% of our total revenues in
2008.
In
2008, we sold $310 million in primary aluminum under our long-term sales
contracts with Glencore at prices
based on the LME price for primary aluminum, as adjusted to reflect the Midwest
Premium (a premium typically added for deliveries of aluminum within the U.S.).
In addition, we received $186 million in tolling fees from Glencore in 2008
under tolling contracts that provide for delivery of primary aluminum produced
at Grundartangi. The fee paid by Glencore under these tolling contracts is based
on the LME price for primary aluminum, as adjusted to reflect the reduced
European Union import duty paid on Icelandic primary aluminum. We believe that
all of the transactions with Glencore under these contracts were at market
prices.
We
have a contract to sell Glencore approximately 50,000 metric tons of primary
aluminum each year through December 31, 2009, at a variable price determined by
reference to the LME. We have a long-term contract to sell Glencore 20,400 mtpy
of primary aluminum through December 31, 2013, at a variable price based on the
LME, adjusted by a negotiated U.S. Midwest market premium with a cap and floor
as applied to the current U.S. Midwest Premium.
Other Transactions with Glencore
We are
party to separate ten-year and seven-year LME-based alumina tolling agreements
with Glencore, for 90,000 and 40,000 metric tons of capacity per year,
respectively, at Grundartangi, which run through 2016 and 2014, respectively. In
December 2005, Glencore assigned 50% of its tolling rights under the ten-year
agreement to Hydro Aluminum AS for the period 2007 to 2010. Deliveries under
these agreements commenced in July 2006 and June 2007.
We
signed a long-term agreement to buy alumina from Glencore in April 2008.
Glencore has agreed to supply Century with 290,000 metric tons of alumina in
2010, 365,000 metric tons in 2011, 450,000 metric tons in 2012, 450,000 metric
tons in 2013, and 730,000 metric tons in 2014. The alumina price will be indexed
to the LME price of primary aluminum.
Prior
to our initial public offering in April 1996, we were an indirect, wholly-owned
subsidiary of Glencore. As of March 31, 2009, Glencore, our largest stockholder,
owned 38.15% of our outstanding common stock. Glencore is an
important business partner, as a customer, a supplier of alumina to our
facilities, and from time to time has been a counterparty to our metal hedges.
As of March 31, 2009, Glencore beneficially owned 153,555 shares of our Series A
Convertible Preferred Stock, that are convertible under certain circumstances
into 15,355,466 shares of our common stock. Together, the shares of our common
stock and preferred stock beneficially owned by Glencore give Glencore an
approximate 48.74% economic ownership of Century.
Certain
Business Relationships
During 2008, we retained PricewaterhouseCoopers
LLP to provide actuarial pension benefit, accounting, and human resource
consulting work. We paid $1,206,000 in fees to PricewaterhousCoopers
for this work. Ms. Manning, a director and the chair of our Audit
Committee, retired from PricewaterhouseCoopers in June 2008 prior to her
commencing service on the Board. In addition, during 2008 we retained the law
firm of Jones Day to provide legal services. We paid $1,204,000 in
fees to the Jones Day firm for this work. Ms. Manning’s spouse is a
partner of the Jones Day firm and managing partner of one of its U.S.
offices. We believe that all services were provided by
PricewaterhouseCoopers and the Jones Day firm at market rates and terms and on
an arms-length basis. Mr. Willy R. Strothotte, a director, is
Chairman of the Board of Directors of Glencore and served as its Chief Executive
Officer from 1993 through 2001.
EXECUTIVE
COMPENSATION
Introduction
Our
Compensation Committee (“Committee”) is a standing committee of our Board of
Directors. The Committee reviews and establishes the compensation for our
executive officers and is responsible for administering and awarding grants of
equity awards under our 1996 Stock Incentive Plan, which we refer to as the 1996
Plan.
The
Committee periodically reviews and modifies Century’s compensation and benefit
programs, and the principles and philosophies on which these programs are
based. Key matters recently addressed by the Committee include the
following:
|
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.
|
Challenging
Economic Climate
The
events of 2008 presented the Company with special challenges. While
the first half of 2008 represented a strong start to the year, during the second
half, the crisis in financial and credit markets led to a pronounced downturn in
global economic activity, producing an unprecedented decline in the LME price
for aluminum in late 2008. This rapid and substantial decline had a
negative impact on the Company’s performance and stock price. The
Committee believes that this decline in Company performance was primarily the
result of global economic forces beyond the control of executive
management. The Compensation Committee viewed favorably management’s
actions in 2008, prior to as well as in response to, the extraordinary
challenges which included:
|
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.
|
In deliberating pay decisions for the named executive officers, the Committee considered the challenging economic conditions in the U.S. and abroad, the decrease in demand for aluminum, the decline in the Company’s stock price, the reductions in the Company’s workforce in late 2008 and early 2009, management’s response to these challenges, actual performance versus goals, and the Company’s current financial position. Pay decisions in relation to the named executive officers are summarized below and described in more detail in subsequent sections of this analysis.
|
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.
|
|
In addition, management and the Committee continue to consider the role of stock compensation as a tool to reinforce key strategic, financial, and market-based successes and to retain those needed to lead Century out of the current economic climate, but decisions about any 2009 long-term incentive were yet to be made as of the date of this proxy statement.
Our
Philosophy on Executive Compensation
Our
compensation programs are designed to enable Century and its subsidiaries to
provide competitive compensation packages that attract, retain and motivate
talented executives and managers. The Committee and management
believe that our compensation programs must therefore remain flexible to afford
the Committee and management discretion in making awards that account for both
individual and corporate performance.
Our
compensation programs are structured as a balanced portfolio using multiple
elements to deliver the total package (base salary, annual cash incentive,
long-term performance awards, retirement, and other benefits). In
addition, the Committee retains discretion to make adjustments necessary to
balance the overall performance of Century and the individual performance of our
executive officers and to pay for performance by aligning management’s and
stockholders’ interests in the enhancement of stockholder value.
Benchmarking
Executive Compensation
Our
philosophy emphasizes competitive objectives for executive pay. Target total
compensation levels are managed around the mid-range of competitive practices,
i.e., the Committee generally targets annual base salaries that, together with
annual incentive cash compensation, long-term incentive compensation and
retirement, provide the named executive officers with total compensation, on
average, at or around the mid-range of the compensation ranges for similarly
situated officers at the surveyed companies. We prefer a competitive
range to a single point to provide the Committee the discretion needed to
discharge its duties, while being mindful of individual differences such as
tenure and performance, as well as the practical implications of pay, on
occasion, being the product of an arms-length negotiation at the time an
executive is hired. Elements of compensation that are benchmarked,
separately - and in total - include base salary, annual incentive, long-term
incentive, and retirement benefits.
Our
compensation programs are thus established to provide Century’s officers total
compensation that, in an average year, is positioned around the mid-range of the
market. Our incentive plans are designed to allow the Committee the
discretion to reward outstanding performance significantly above the mid-range
in the case of outstanding performance; conversely, when performance is below
expectations, our plans are designed to deliver compensation that is below the
mid-range. In addition, where management’s performance and Century’s
performance differ, in the Committee’s view due to market forces or otherwise,
our plans are flexible enough to allow the Committee discretion in the form of
compensation delivered.
With
respect to the named executive officers, we primarily focus on the practices of
a group of comparably-sized, asset-intensive, metals and other industrial
companies. We chose these parameters, and ultimately the companies
noted below, to permit pay to be evaluated in a context that considers
businesses with similar exposure to economic forces and business
cycles. The composition of this group is reviewed regularly, and at
least annually, and the group is refined to ensure its relevance in light of
Century’s position, as well as mergers, acquisitions, growth, etc. among the
companies. The table below identifies the companies that have been
included in the group in 2007 and 2008.
|
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
|
In
addition to evaluating the total cash compensation (salary and annual bonus) and
total compensation (salary, annual bonus, long-term incentive and retirement
benefits) of the peer companies, we compare the pay of our executives, including
the named executive officers, to the summary results of a survey-based
analysis. This secondary approach is useful because it provides a
broader market assessment (i.e., includes more than 30
companies). It allows us to benchmark more than five executives, and
it allows us to tailor our benchmarking based on the roles and responsibilities
of our executive officers. For our additional evaluations, we use
compensation for companies participating in Towers Perrin’s Executive
Compensation Data Bank, a proprietary survey, within the materials and
industrials sectors. Company size generally is accounted for by
regression or by limiting the size of the companies considered to under $5
billion in revenue. We evaluate the peer data and the survey data
independently and as a composite (average of the two), but there is no algorithm
that dictates pay at a precise level in comparison to these various data
points.
Overview
of Compensation Elements
The
list below summarizes the general elements and characteristics of our executive
compensation programs. Detailed narratives of these compensation
elements are provided in a later section.
|
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.
|
Our
Process for Executive Compensation
We
review market pay levels, with the help of consultants, on a regular basis. We
evaluate Company performance against our plans and budgets, pay levels at
comparable companies and in the context of the broader economy. The Committee
retains final discretion in determining annual incentive awards and the vesting
of performance share units. In general the Committee will make its final
determination of both annual incentive awards and awards earned based on
long-term performance in the first quarter following the end of the performance
period.
The
Committee has adopted a charter which is posted on the Company’s website. The
Committee maintains an annual agenda to help ensure that it discharges its
duties in a thoughtful and timely manner. Each meeting has a primary
purpose, e.g., reviewing market benchmarking, finalizing incentive awards,
approving salary adjustments and new incentive plan terms, reviewing market
trends or completing a self-assessment. Other matters may be added to the
agenda. As a general practice, the Committee makes significant decisions over
multiple meetings: discussing conceptual matters, reviewing
preliminary recommendations, and reviewing final recommendations before
acting.
Role
of the Chief Executive Officer
As
part of its review and determination of Century’s compensation objectives,
philosophy, programs and decisions, the Committee works with and receives advice
and recommendations from our CEO. The Committee’s charter formalizes the
working relationship with our CEO and includes the following actions to be taken
by the CEO:
|
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.
|
The
Committee considers the recommendations of our CEO, together with the review by
our compensation consultant in making independent determinations regarding
executive compensation.
Our
CEO attends all Committee meetings, other than those portions that are held in
executive session and he is not present during deliberations or when voting on
matters involving his compensation. As appropriate, the Committee
follows an executive session by reconvening with our CEO present.
Role of
Compensation Committee Consultants
The Company uses the services of a compensation consultant. The
Company first engaged Towers Perrin in 2007 to evaluate the Company’s executive
compensation programs: philosophy, objectives, plan designs, and market pay
levels. The analysis by Towers Perrin culminated in recommendations
that generally became effective in 2008 addressing our pay philosophy, and our
annual and long-term incentive plan designs. Towers Perrin continued
to be Century’s consultant in 2008, including participation at several Committee
meetings throughout the year. Towers Perrin also conducted compensation
consulting projects for management in 2008, with the Committee’s prior and
ongoing approval; the Committee is apprised of any and all projects for which
management engages Towers Perrin and monitors their status at each meeting as
part of its effort to ensure that it receives objective advice from the
Company’s consultant.
Compensation
Program Details
Base
Salary
The
Committee typically reviews the salaries of our named executive officers
annually (in the fourth quarter or early the following year). In
addition, the Committee may review the salaries of our named executive officers
in connection with a promotion or other change in responsibility. The
Committee generally targets annual base salaries that, together with annual
incentive cash compensation, long-term incentive compensation and retirement,
provide the named executive officers with total compensation that is, on
average, at or around the mid-range of the market. Actual salary
levels for each individual vary based upon an assessment of individual
performance, experience, level of responsibility, potential contribution to our
future growth and profitability, and our financial performance. The
Committee has not found it practicable to assign relative weights to specific
factors in determining base salary adjustments, and the specific factors used
may vary among individual executives.
At
the Committee’s meeting in December 2007, the Committee, based on its review of
competitive pay practices, the recommendation of the CEO with respect to the
other executive officers, and in its own judgment, approved salary increases of
4.8% in the aggregate for the named executive officers. The Committee authorized
base salary increases, effective January 1, 2008, of 4.9% in the case of Mr.
Kruger, 4.9% for Mr. Hale, 4.2% for Mr. Bless, 4.9% for Mr. Nielsen, and 5.2%
for Mr. Casello.
In
late 2008, management recommended and the Committee subsequently agreed to
freeze officers’ salaries for 2009 at their 2008 levels, other than in the case
of promotion-based adjustments. No named executive officer received
an adjustment in his base salary from his 2008 level.
Annual
Cash Incentive Awards
Under our
annual incentive plan, executives (including the named executive officers) are
eligible to receive an award, which is normally paid in
cash.
Effective in
2008, the annual incentive plan was redesigned to: (a) emphasize
operating results, (b) add a level of objective measurability into the
evaluation and determination of awards, and (c) allow the long-term incentive
plan to emphasize strategic goals rather than short-term operational
performance. The new design retains a significant element of
discretionary evaluation by the Committee but incorporates several operating
measures, as described below.
|
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.
|
|
The
Committee generally assigns different weights to these elements for each named
executive officer. For instance, the evaluation of the Chief
Executive Officer is generally weighted more heavily toward strategic
achievement while the evaluation of the Chief Operating Officer is generally
weighted toward operational results. In this way, the Committee can
focus its evaluation in areas where each executive has greater responsibility
and opportunity to influence results.
In
March 2009, the Committee and the CEO discussed his annual incentive award and
his recommendations for Century’s other officers. The recommendations
considered the level of prior cash incentive awards, expected market
compensation for 2008, operating results (operating income, conversion cost, and
safety), strategic results (access to bauxite, progress at Helguvik, long-term
access to anodes, terms of power supplies, and business development), and
individual performance. After its discussion with the CEO, in
executive session the Committee discussed Century’s performance, the potential
cash incentive award for the CEO, and the CEO’s recommendations for the other
officers.
The
Committee approved incentive awards for 2008 performance to the named executive
officers that totaled 34% below the awards earned in 2007 (as shown in the table
below). The amounts earned are shown in the bonus column of the
Summary Compensation Table.
|
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%
|
Long-term Incentive
Compensation
Overview
The
Committee has oversight responsibility for administering and awarding grants of
equity awards under the 1996 Plan. The following award types have
been used to address different purposes:
|
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.
|
Performance
Shares (through 2007)
Historically,
operating and strategic goals were established for overlapping sequential
three-year periods. The Committee, based on its review of performance
against those goals then determines the degree to which the shares awarded for
the performance period vest (which can range from 0% to
150%). Because our financial performance is highly dependent on the
price of aluminum, the Committee retains discretion to adjust the
operational/financial goals to reflect changes in the London Metals Exchange and
Midwest transactions prices of aluminum and other conditions affecting
performance during a performance program period, and regularly does
so.
At
the end of a three-year performance period, our CEO reports on
Century’s performance against goals set at the beginning of the three year
period and makes a recommendation to the Committee regarding the percentage at
which goals were achieved and the percentage of the shares awarded during that
period that should vest. The Committee reviews management’s
recommendation and performs an independent analysis. The Committee
then determines the appropriate vesting percentage for the three-year plan
period based on its assessment of Century’s achievement of the stated strategic,
operational and financial targets.
On
March 23, 2009, the Committee evaluated Century’s performance relative to the
criteria set for the 2006-2008 period, as noted below:
|
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.
|
||
The guidelines by
which the Committee administers the plan provide that from 0% to 150% of the
share units conditionally awarded may ultimately vest based on the Committee’s
assessment of Century’s performance, although the Committee retains the
discretion to adjust these awards. Based on its review of performance
and of competitive compensation, and reflecting its ongoing use of discretion
under these guidelines, the Committee determined that during the 2006-2008
period the Company had performed such that the named executive officers should
receive awards which total, 75% less than the value the named executive officers
earned under the three-year period that ended in 2007. The amounts
are included in the Option Exercise and Stock Vested Table.
|
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%
|
Performance
Units & Time-vested Performance Share Units (beginning in 2008)
We
changed the long-term incentive program, effective in January
2008. Rather than relying on a single type of award as the primary
incentive, we granted two types of awards. Half of each officer’s annual
long-term incentive opportunity was allocated to performance units and the
remainder to time-vested performance share units. In addition, the
Committee may still make special awards as described elsewhere.
|
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.
|
The
sizes of previous equity-based grants and current equity holdings do not affect
future grants and are not considered by the Committee when making long-term
incentive award decisions. The Committee does, however, consider the
combination of the major compensation and benefit offerings; for example, the
long-term incentive award for our Chief Executive Officer is determined, in
part, after accounting for the competitiveness of his Enhanced SERP benefit
(which is described below).
Stock
Options
Option
grants are made on a case-by-case basis to executive officers in connection with
hiring awards and to recognize promotions. It has been the
Committee’s practice to approve all option grants at Committee
meetings. For initial option grants to our executives made in
connection with their employment by Century, the Committee approves the options
at the time it approves the executive’s overall compensation arrangement and the
terms of his or her employment agreement, if any. All awards of stock
options on shares of Century common stock granted in 2008 were granted under the
1996 Plan with an exercise price equal to the average of the high and low sales
price for shares of our common stock on the date of grant.
Retirement
Plans
The
Century Aluminum 401(k) Plan is a tax-qualified retirement savings plan pursuant
to which our U.S. based salaried employees, including our named executive
officers, are able to contribute a percentage, up to the limits prescribed by
the Internal Revenue Service, of their annual compensation on a pre-tax
basis. In 2008, we match 100% of the first 3% of pay that is
contributed to the savings plan and 50% of the next 2% of pay contributed, and
all matching contributions are fully vested on
contribution. Effective January 1, 2009, Century indefinitely
suspended the company match due to market conditions.
We
also maintain a non-contributory defined benefit pension plan for our U.S. based
salaried employees who meet certain eligibility requirements, which we refer to
as our Qualified Plan. We have also adopted a Supplemental Retirement
Income Benefit Plan, or “SERP.” The SERP provides selected senior
executive officers with an additional retirement benefit equal to the amount
that would normally be paid under our Qualified Plan if there were no
limitations under Sections 415 and 401(a)(17) of the Internal Revenue Code of
1986, as amended (the “Code”). Final average monthly compensation for
purposes of calculating the supplemental benefit will be based on the greater of
(a) projected final annual compensation, assuming specified annual increases
until retirement age, or (b) the average of the highest three years’ annual
compensation over the last 10 years of employment. The SERP is an
unfunded Century obligation. Each named executive officer was
eligible to participate in these benefits in 2008.
On
selective occasions we have also provided enhanced retirement benefits, in the
form of an “Enhanced SERP”, which is designed to enhance the total retirement
income level, when, due to the executive’s age and potential years of service at
normal retirement age, benefits under the Qualified Plan and the SERP are
projected to be less than a specified percentage of the executive’s estimated
final average annual compensation. In developing the hiring package
that induced Mr. Kruger to join Century, we agreed to include him in the
Enhanced SERP. He is the only named executive officer currently
participating in the Enhanced SERP. If Mr. Kruger remains employed by
Century for a period of 10 years he will be fully vested in his Enhanced SERP
benefit. When fully vested, Mr. Kruger’s Enhanced SERP benefit will
be approximately 50% of his final average annual compensation.
We
have designed these retirement benefits to be competitive with industry
standards to attract and retain talented executive and management level
personnel. Benefits triggered by retirement are valued and described
below under the caption “Executive Compensation-Pension Benefits Table” and
“Executive Compensation-Potential Payments upon Termination or Change of
Control.”
Policies
& Other Technical Considerations
Stock
ownership guidelines
We
adopted stock ownership guidelines for our executives and nonemployee directors
effective March 26, 2008. We adopted them to further underscore our
belief that management’s interests should be aligned with those of the
stockholders. Moreover, the long-term incentive design changes, as
described earlier, added emphasis to the importance of retaining stock
awards.
The
guidelines for Century’s officers and directors are summarized in the table
below. The guidelines are based on a fixed number of shares, which was finalized
after giving consideration to the value of the fixed share guidelines as a
percent of pay (salary for executives and cash retainer for nonemployee
directors). The guidelines of peers and, on a broader basis, industry practices
were considered in developing this policy.
|
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
|
|
Nonemployee,
non-independent directors are not subject to these guidelines, although they are
urged to follow them.
Officers
and nonemployee directors have five years from the later of the date of hire or
the effective date of the guidelines to meet these ownership
guidelines. Officers who are subsequently promoted to a higher
category of participant level will have five years from the date of promotion to
achieve their increased share guideline.
Clawback
Effective
March 26, 2008, we adopted an Incentive Compensation Recoupment
Policy. Under this policy, our Board will, to the extent permitted by
applicable law, in all appropriate cases, require reimbursement of any bonus or
incentive compensation paid to an employee after January 1, 2008, cause the
cancellation of restricted or deferred stock awards and outstanding stock
options, and seek reimbursement of any gains realized on the exercise of stock
options attributable to such awards, if and to the extent that: (a)
the amount of incentive compensation was calculated based upon the achievement
of certain financial results that were subsequently reduced due to a
restatement, (b) our Board or an appropriate committee determines that the
employee engaged in any fraud or misconduct which caused or contributed to the
need for the restatement, and (c) the amount of the bonus or incentive
compensation that would have been awarded to the employee had the financial
results been properly reported would have been lower than the amount actually
awarded.
Timing
of Equity Awards
Generally,
the Committee makes incentive pay decisions at regularly scheduled Committee and
board meetings. The Committee may also make compensation determinations at other
times during the year for newly-hired executives or in connection with the
promotion of existing employees. The Committee does not time any form
of compensation award, including equity-based awards, to coincide with the
release of material non-public information.
Income
Tax Consequences
Section
162(m) of the Code generally disallows a tax deduction by Century for annual
compensation in excess of $1 million paid to certain executive officers;
however, compensation above $1 million is deductible if such compensation is
“performance based” and meets other criteria as specified under
Section 162(m) of the Code.
The
Committee agrees with the premise of pay for performance, and it has considered
the impact of Section 162(m) on the design of our compensation programs.
But the nature of our business, not the least of which is the impact of metal
prices on our results, limits the ability to pre-determine meaningful goals
without subsequent discretionary adjustments. The Committee believes that such
discretion is necessary and would not be available as a compensation management
tool if incentive payments were to be “performance based” as defined and
required under Section 162(m). Accordingly, it is not the
Committee’s goal for all compensation to be deductible by us under
Section 162(m).
The
Committee will continue to consider and weigh the potential loss of expense
deductions against its need for discretion in designing programs for the named
executive officers. The Committee does not expect the loss of any
such deductions to have a significant impact on Century.
Employment
Agreements
Historically
it has been our practice to enter into employment agreements with officers at
the executive vice president level and above. The terms of these
agreements, including base salary, initial equity grants, minimum guaranteed
bonuses, participation in Century benefit plans and other benefits, are approved
by the Compensation Committee. The amounts and types of such
compensation are negotiated terms with each officer. When reviewing
and negotiating these terms, the Committee is provided with market data by its
compensation consultants and considers practices of peer companies and, if
applicable, compensation earned and/or forfeited by the officer at a previous
employer.
We
have employment agreements with Messrs. Kruger, Hale, Bless and Nielsen.
Effective December 2008, the employment agreements with the named executive
officers were amended in connection with compliance with Section 409A of the
Code. The material provision of the employment agreements are
described below under the caption “Executive Compensation - Employment
Agreements."
Post-Termination
Compensation and Benefits
Other
Post-Termination Benefits
Selected
senior executive officers may also receive benefits triggered by death,
disability or termination without cause. Century has designed these
benefits to be competitive with industry standards to attract and retain
talented executive and management level personnel. Benefits triggered
by death, disability and termination without cause are valued and described
below under the caption “Executive Compensation-Potential Payments upon
Termination or Change of Control.”
It
is Century’s policy that accelerated benefits for executive officers should not
be triggered in circumstances where the executive is terminated for cause or
resigns voluntarily.
Change
in Control
Our
policy is to provide change in control protection to our named executive
officers based on competitive practice in the industry. Change in
control provisions are contained in various named executive officer employment
agreements, long-term compensation agreements, retirement plans and severance
protection agreements. We believe change in control protection is
particularly appropriate for executives who are unlikely to be retained in
comparable positions by the acquiring entity upon a change in
control. In addition, change in control protections are designed to
maximize stockholder value by creating incentives for named executive officers
to explore strategic transactions and work to bring such transactions to
fruition if appropriate. Our 1996 Plan and Severance Protection
Agreements and employment agreements are each intended to provide for certain
employee protections in the event of a change in control. These
arrangements are intended to attract and retain qualified executives that could
have other job alternatives that may appear to them to be less risky absent
these arrangements, particularly given the significant level of acquisition
activity in the primary aluminum and minerals sectors.
Under
our 1996 Plan, in the event of a change in control, any options and performance
shares outstanding upon the date of such change in control will have their
vesting accelerated as of the date of such change in control which is referred
to as a “single trigger” provision. These provisions are also
generally included in our employment agreements with certain named executive
officers. We believe these change of control arrangements, the value
of which are influenced significantly by the value obtained in a change of
control transaction, effectively create incentives for our executive officers to
build stockholder value and to obtain the highest value possible should we be
acquired in the future, despite the risk of losing employment and potentially
not having the opportunity to participate in future equity awards which comprise
a significant component of each executive’s compensation. As the
value of these awards will be significantly influenced by the change in control
and these awards will likely lose much of their purpose with respect to the
combined entity, we believe it is more appropriate for these awards to
accelerate immediately upon a change in control.
Our
Severance Protection Agreements are “double trigger,” meaning that payment of
severance benefits is not awarded upon a change in control unless the
executive’s employment is terminated involuntarily (other than for cause) within
36 months following the transaction. We believe this structure
strikes a balance between the incentives and the executive hiring and retention
effects described above, without providing these benefits to executives who
continue to enjoy employment with an acquiring company in the event of a change
of control transaction. We also believe this structure is more
attractive to potential acquiring companies, who may place significant value on
retaining members of our executive management and who may perceive this goal to
be undermined if executives receive significant acceleration payments in
connection with such a transaction and are no longer required to continue
employment to earn these payments.
Benefits
triggered by a change in control are valued and described below under the
caption “Executive Compensation - Potential Payments upon Termination or
Change of Control.”
The
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis set forth in this proxy statement with Century management and based
on such review and discussions, the Compensation Committee recommended to
Century’s Board of Directors that the Compensation Discussion and Analysis be
included in Century’s 2008 Annual Report on Form 10-K and this proxy
statement.
Respectfully
Submitted,
|
Peter
C. Jones (Chair)
|
John
P. O’Brien
|
John
C. Fontaine
|
Jack
E. Thompson
|
SUMMARY
COMPENSATION TABLE
The
following table sets forth the compensation earned by our Chief Executive
Officer, our Chief Financial Officer and each of our three other most highly
compensated executive officers for services rendered to us in all capacities in
2008.
2008 Summary
Compensation Table
|
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 $238,050 recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2008, in accordance with
FAS 123(R) for awards pursuant to the 1996 Plan for 15,000 service-based
performance shares awarded to Mr. Nielsen on May 1, 2006, based on the
Black-Scholes fair value calculation of the award on the grant date. Mr.
Nielsen’s service-based performance shares vested one-third each on May 1,
2007, May 1, 2008, and May 1, 2009. Although we did not pay dividends
on our common stock during the vesting period, to the extent we pay
dividends on our common stock, dividend equivalents will accrue on the
service-based performance shares from the date of grant and will become
payable upon vesting.
|
|
|
(k)
|
Represents
the expense recognized for financial statement reporting purposes for the
fiscal year ended December 31, 2008, in accordance with FAS 123(R) for
awards pursuant to the 1996 Plan for 20,000 options to purchase our common
stock awarded to Mr. Nielsen on May 1, 2006, based on the Black-Scholes
fair value calculation of the award on the grant date. Mr. Nielsen’s
options vested one-third each on May 1, 2006, May 1, 2007, and April 30,
2008.
|
|
Grants
of Plan Based Awards
The
following table sets forth information regarding the estimated future payouts
under our 1996 Plan to our named executive officers.
2008
Grants of Plan Based Awards Table
|
Estimated
Future Payouts Under
Non-Equity
Incentive Plan Awards
|
Estimated
Future Payouts Under
Equity
Incentive Plan Awards
|
Grant
Date Fair Value of Stock and Option Award($)(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).
|
Narrative
to the Summary Compensation Table and Grants of Plan-Based Awards
Table
Employment
Agreements
We
have employment agreements with Mr. Logan W. Kruger, our President and CEO; Mr.
Wayne R. Hale, our EVP and COO; Mr. Michael A. Bless, our EVP and CFO and Mr.
Robert R. Nielsen, our EVP, General Counsel and Secretary. These
agreements provide for automatic extensions on each January 1 for an
additional one-year period unless timely notice of termination is delivered by a
party pursuant to the terms of the employment
agreement. Effective January 1, 2009, each of these agreements
was so extended to December 31, 2011. These agreements provide that
Messrs. Kruger’s, Hale’s, Bless’s and Nielsen’s base salaries shall not be
reduced below the executives’ prior year’s base salary and that such salaries
shall be subject to increase from time to time at the discretion of the
Compensation Committee. These agreements also provide that these
executive officers are eligible to receive an annual performance-based cash
bonus under our incentive compensation plan, subject to the discretion of the
Compensation Committee and they are also eligible for stock option grants and
performance share awards under the 1996 Plan and participation in the
SERP.
Our
employment agreements with Messrs. Kruger, Hale, Bless and Nielsen each provide
that upon termination of employment for any reason other than voluntary
resignation without cause, death or “for cause”, the terminated executive will
be entitled to receive termination payments equal to 100% of his base salary and
bonus (based on the highest annual bonus payment within the prior three years)
for the remainder of the term of the agreement (with a minimum of one year’s
salary plus bonus). If the executive is terminated as a result of the
executive’s disability, the payments due to the executive will be reduced by any
payments he receives under our disability plans. Also, any
termination payments under the employment agreements may not be duplicated under
the severance compensation agreements described below under “Executive
Compensation-Potential Payments upon Termination or Change of
Control.” Effective December 2008, the employment agreements
with each of these executive officers was amended to conform the employment
agreements with Section 409A of the Code. The amended agreements now
require that amounts payable to each officer by reason of his termination of
employment that are determined to constitute payments of “non-qualified deferred
compensation” as that term is used for purposes of 409A, shall be payable,
together with interest thereon, on the first business day following the
six-month anniversary of his termination of employment.
Outstanding
Equity Awards at Fiscal Year-End
The
following table sets forth information regarding outstanding equity awards for
our named executive officers as of December 31, 2008.
2008
Outstanding Equity Awards at Fiscal Year-End Table
|
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 $10.00 on
December 31, 2008, the last trading day for the fiscal
year.
|
Option
Exercises and Stock Vested
The
following table sets forth information regarding option exercises and vesting of
performance shares for our named executive officers as of December 31,
2008.
2008
Option Exercise and Stock Vested Table
|
Option
Awards
|
Stock
Awards
|
|||||
|
Name
|
Number
of Shares
Acquired
on Exercise
|
Value
Realized
on
Exercise ($)
|
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.
|
Post
Employment Compensation
Pension
Benefits
As discussed
above under the heading “Retirement Plans,” we maintain both the Qualified Plan
and the SERP as retirement plans for our U.S. based salaried employees. The
Qualified Plan provides lifetime annual benefits starting at age 62 equal to 12
multiplied by the greater of: (i) 1.5% of final average monthly
compensation multiplied by years of credited service (up to 40 years), or
(ii) $22.25 multiplied by years of credited service (up to 40 years), less
the total monthly vested benefit payable as a life annuity at age 62 under
predecessor plans which we acquired. We determine final average monthly
compensation under the qualified plans as the highest monthly average for 36
consecutive months in the 120-month period ending on the last day of the
calendar month completed at or prior to a termination of service. Participants’
pension rights vest after a five-year period of service, or earlier if the
participant has reached the age of 62. An early retirement benefit (actuarially
reduced beginning at age 55) and a disability benefit are also available. The
compensation covered by the plan includes all compensation, subject to certain
exclusions, before any reduction for 401(k) contributions, subject to the
maximum limits under the Code.
The
SERP provides selected senior executives with supplemental benefits in addition
to those benefits they are entitled to receive under the Qualified Plan. More
information about the SERP can be found under the heading “Retirement
Plans.”
The
following table sets forth the present value of accumulated benefits payable to
each of the named executive officers, including the number of years of service
credited to each such named executive officer, under the Qualified Plan and the
SERP, determined using interest rate and mortality rate assumptions consistent
with those used in our consolidated financial statements.
2008
Pension Benefits Table
|
Name
|
Plan
|
Number
of Years Credited
|
Present
Value of
Accumulated
Benefit ($)
|
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
|
—
|
|||
Potential Payments upon Termination or Change of Control
The
following table sets forth the amount of compensation payable to each of our
named executive officers upon termination of such executive’s employment. The
amount of compensation payable to each named executive officer following:
termination following a change of control, involuntary termination for cause,
involuntary termination not-for-cause, death, disability, retirement and
voluntary resignation is shown. The amounts shown assume that such termination
was effective as of December 31, 2008, and thus includes amounts earned
through such time and are estimates of the amounts that would be paid out to the
executives on their termination. The actual amount to be paid can only be
determined at the time of such executive’s termination.
2008
Potential Payments upon Termination or Change of Control Tables
|
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
|
</ | |||||||||||