DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o |
|
Preliminary Proxy Statement |
o |
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
þ |
|
Definitive Proxy Statement |
o |
|
Definitive Additional Materials |
o |
|
Soliciting Material Pursuant to §240.14a-12 |
Core Molding Technologies, Inc.
(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):
þ |
|
No fee required. |
o |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|
(1) |
|
Title of each class of securities to which transaction applies: |
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
Aggregate number of securities to which transaction applies: |
|
|
|
|
|
|
|
|
|
|
|
(3) |
|
Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined): |
|
|
|
|
|
|
|
|
|
|
|
(4) |
|
Proposed maximum aggregate value of transaction: |
|
|
|
|
|
|
|
|
|
|
|
(5) |
|
Total fee paid: |
|
|
|
|
|
|
|
|
|
o |
|
Fee paid previously with preliminary materials. |
|
o |
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing. |
|
(1) |
|
Amount Previously Paid: |
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
Form, Schedule or Registration Statement No.: |
|
|
|
|
|
|
|
|
|
|
|
(3) |
|
Filing Party: |
|
|
|
|
|
|
|
|
|
|
|
(4) |
|
Date Filed: |
|
|
|
|
|
|
|
|
|
CORE MOLDING TECHNOLOGIES, INC.
800 Manor Park Drive
Columbus, Ohio 43228
(614) 870-5000
April 11, 2011
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of Core Molding
Technologies, Inc. to be held at the Companys corporate headquarters, 800 Manor Park Drive,
Columbus, Ohio 43228, on May 11, 2011, at 9:00 a.m., Eastern Daylight Savings Time. Further
information about the meeting and the matters to be considered is contained in the formal Notice of
Annual Meeting of Stockholders and Proxy Statement on the following pages.
It is important that your shares be represented at this meeting. Whether or not you plan to
attend, we hope that you will sign, date and return your proxy promptly in the enclosed envelope.
|
|
|
|
|
|
|
Sincerely,
|
|
|
|
|
|
|
|
|
|
Malcolm M. Prine
Chairman of the Board |
|
|
TABLE OF CONTENTS
CORE MOLDING TECHNOLOGIES, INC.
800 Manor Park Drive
Columbus, Ohio 43228
(614) 870-5000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 11, 2011
To Our Stockholders:
Core Molding Technologies, Inc. (the Company) will hold its 2011 Annual Meeting of
Stockholders on May 11, 2011 at 9:00 a.m., Eastern Daylight Savings Time, at the Companys
corporate headquarters, 800 Manor Park Drive, Columbus, Ohio 43228 for the following purposes:
|
1. |
|
to elect six (6) directors to comprise the Board of Directors of the Company; |
|
|
2. |
|
to ratify the appointment of Crowe Horwath LLP as the independent registered public
accounting firm for the Company for the year ending December 31, 2011; and |
|
|
3. |
|
to consider and act upon other business as may properly come before the meeting and any
adjournments or postponements of the meeting. |
The foregoing matters are described in more detail in the Proxy Statement, which is attached
to this notice. Only stockholders of record at the close of business on March 31, 2011, the record
date, are entitled to receive notice of and to vote at the meeting.
We desire to have maximum representation at the meeting and respectfully request that you
date, execute and promptly mail the enclosed proxy in the postage-paid envelope provided. You may
revoke a proxy by notice in writing to the Secretary of the Company at any time prior to its use.
|
|
|
|
|
|
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
|
|
|
|
|
|
Herman F. Dick, Jr. |
|
|
|
|
Vice President, Secretary, Treasurer, |
|
|
|
|
and Chief Financial Officer |
|
|
April 11, 2011
CORE MOLDING TECHNOLOGIES, INC.
800 Manor Park Drive
Columbus, Ohio 43228
(614) 870-5000
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
May 11, 2011
To Our Stockholders:
Core Molding Technologies, Inc. (hereinafter referred to as the Company) is furnishing this
Proxy Statement in connection with the solicitation by its Board of Directors of proxies to be used
and voted at its annual meeting of stockholders, and at any adjournment of the annual meeting. The
Company will hold its annual meeting on May 11, 2011, at its corporate headquarters, 800 Manor Park
Drive, Columbus, Ohio at 9:00 a.m. Eastern Daylight Savings Time. The Company is holding the
annual meeting for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders.
The Company is first sending this Proxy Statement, the accompanying proxy card and the Notice
of Annual Meeting of Stockholders on or about April 11, 2011.
GENERAL INFORMATION
Solicitation
The Board of Directors of the Company is soliciting the enclosed proxy. In addition to the
use of the mail, directors and officers of the Company may solicit proxies, personally or by
telephone. The Company will not pay its directors and officers any additional compensation for the
solicitation.
In addition, the stock transfer agent of the Company, American Stock Transfer & Trust Company,
New York, New York will conduct proxy solicitations on behalf of the Company. The Company will
reimburse American Stock Transfer & Trust Company for reasonable expenses incurred by it in the
solicitation. The Company also will make arrangements with brokerage firms and other custodians,
nominees and fiduciaries for the forwarding of proxy solicitation material to beneficial owners of
the common stock of the Company. The Company will reimburse those brokerage firms, custodians,
nominees and fiduciaries for their reasonable expenses.
The Company will pay all expenses of the proxy solicitation. Except as otherwise provided,
the Company will not use specially engaged employees or other paid solicitors to conduct any proxy
solicitation.
Voting Rights and Votes Required
Holders of shares of the common stock of the Company at the close of business on March 31,
2011, the record date for the annual meeting, are entitled to notice of, and to vote at, the annual
meeting. On the record date, the Company had 7,102,343 shares of common stock outstanding.
Each outstanding share of common stock on the record date is entitled to one vote on all
matters presented at the annual meeting. The presence, in person or by proxy, of stockholders
entitled to cast a majority of all the votes entitled to be cast will constitute a quorum for the
transaction of business at the annual meeting. No business, other than adjournment, can be
conducted at the annual meeting unless a quorum is present in person or by proxy.
1
Abstentions will count as shares present in determining the presence of a quorum for a
particular matter. Abstentions, however, will not count as votes cast in determining the approval
of any matter by the stockholders. Broker non-votes are shares held of record by brokers or other
nominees that are present in person or by proxy at the meeting, but are not voted because
instructions have not been received from the beneficial owner with respect to a particular matter
over which the broker or nominee does not have discretionary authority to vote. Broker non-votes
are counted toward the establishment of a quorum. If you do not return a proxy card and your
shares are held in street name, your broker may be permitted, under applicable rules of the self
regulatory organizations of which it is a member, to vote your shares in its discretion on certain
matters that are deemed to be routine, such as ratification of the appointment of our independent
registered public accounting firm. Your broker does not have discretionary authority to vote your
shares in the election of directors. Accordingly, the Company requests that you promptly provide
your broker or other nominee with voting instructions if you want your shares voted in the election
of directors and to carefully follow the instructions your broker gives you pertaining to their
procedures.
In the election of directors, each of the six directors will be elected by a plurality of
votes cast by stockholders of record on the record date and present at the annual meeting, in
person or by proxy. Cumulative voting in the election of directors will not be permitted.
The Company is seeking stockholder ratification of the appointment of its independent
registered public accounting firm. While ratification is not required by law, the affirmative vote
of a majority of the votes cast by stockholders of record on the record date and present at the
annual meeting, in person, or by proxy, would ratify the selection of Crowe Horwath LLP (Crowe
Horwath) as the independent registered public accounting firm for the current fiscal year.
Voting of Proxies
Shares of common stock represented by all properly executed proxies received prior to the
annual meeting will be voted in accordance with the choices specified in the proxy. Unless
contrary instructions are indicated on the proxy, the shares will be voted:
|
|
|
FOR the election as directors of the nominees named in this Proxy Statement until
their successors are elected and qualified; and |
|
|
|
FOR the ratification of the appointment of Crowe Horwath as the independent
registered public accounting firm for the Company for the year ending December 31,
2011. |
Management of the Company and the Board of Directors of the Company know of no matters to be
brought before the annual meeting other than as set forth in this Proxy Statement. If, however,
any other matter is properly presented to the stockholders for action, it is the intention of the
holders of the proxies to vote at their discretion on all matters on which the shares of common
stock represented by proxies are entitled to vote.
Revocability of Proxy
A stockholder who signs and returns a proxy in the accompanying form may revoke it at any time
before the authority granted by the proxy is exercised. A stockholder may revoke a proxy by
delivering a written statement to the Secretary of the Company that the proxy is revoked.
Annual Report
The Annual Report on Form 10-K for the fiscal year ended December 31, 2010 of the Company,
which includes financial statements and information concerning the operations of the Company,
accompanies this Proxy Statement. The Annual Report is not to be regarded as proxy solicitation
materials.
2
Stockholder Proposals
Any stockholder who desires to present a proposal for consideration at the 2012 annual meeting
of stockholders must submit the proposal in writing to the Company. If the proposal is received by
the Company prior to the close of business on December 9, 2011, and otherwise meets the
requirements of applicable state and federal law, the Company will include the proposal in the
proxy statement and form of proxy relating to the 2012 annual meeting of stockholders. The Company
may confer on the proxies for the 2012 annual meeting of stockholders discretionary authority to
vote on any proposal, if the Company does not receive notice of the proposal by February 29, 2012.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Stockholders to be held on May 11, 2011
The Proxy Statement, proxy card, and Annual Report to stockholders, which includes the Form 10-K
for the year ended December 31, 2010, are available at http://colsec.coremt.com.
3
OWNERSHIP OF COMMON STOCK
Beneficial Owners
The table below sets forth, to the knowledge of the Company, the only beneficial owners, as of
March 31, 2011, of more than 5% of the outstanding shares of common stock of the Company.
Number of Shares of Common Stock Beneficially Owned
|
|
|
|
|
|
|
|
|
Name and Address of |
|
Amount and Nature of |
|
|
|
|
Beneficial Owner |
|
Beneficial Ownership |
|
|
Percent of Class(1) |
|
|
|
|
|
|
|
|
|
|
GAMCO Asset Management Inc. |
|
|
1,023,721 |
(2) |
|
|
14.4 |
% |
Gabelli Funds, LLC
GAMCO Asset Management Inc
Teton Advisors, Inc.
Mario J. Gabelli
|
|
|
|
|
|
|
|
|
One Corporate Center
Rye, NY 10580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rutabaga Capital Management LLC |
|
|
908,854 |
(3) |
|
|
12.8 |
% |
64 Broad St. Floor 3
Boston, MA 02109-4346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Navistar, Inc. |
|
|
664,000 |
(4) |
|
|
9.3 |
% |
Navistar International Corporation
4201 Winfield Drive
P.O. Box 1488
Warrenville, Illinois 60555 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The Percent of Class computation is based upon the total number of shares beneficially
owned by the named person or group divided by the sum of (i) 7,102,343 shares of common stock
outstanding on March 31, 2011, and (ii) the number of common shares, if any, as to which the
named person or group has the right to acquire beneficial ownership within 60 days of March
31, 2011. |
|
(2) |
|
The information presented is derived from Amendment No. 8 to Schedule 13D, as filed with
the SEC on February 7, 2011 by Mario J. Gabelli and certain entities which he directly or
indirectly controls or for which he acts as chief investment officer, including GGCP, Inc.,
GAMCO Investors, Inc., Gabelli Funds, LLC, GAMCO Asset Management, Inc. and Teton Advisors
Inc. According to the Schedule 13D filing, of these 1,023,721 shares of Common Stock, 430,300
shares are beneficially owned by GAMCO Asset Management, Inc., 330,000 shares are beneficially
owned by Gabelli Funds, LLC, 256,421 shares by Teton Advisors Inc., and 7,000 shares are
beneficially owned by Mario J. Gabelli. [GGCP, Inc., as the parent company of GAMCO
Investors, Inc., GAMCO Investors, Inc., as the parent company of the foregoing entities, and
Mario Gabelli, as the majority stockholder of GGCP, Inc. may be deemed to have beneficial
ownership of the 1,023,721 shares owned beneficially by Gabelli Funds, LLC, GAMCO Asset
Management, Inc. and Teton Advisors Inc.] and, except as otherwise provided in the Schedule
13D filing, each entity has the sole power to vote or direct the vote and sole power to
dispose or to direct the disposition of the shares reported for it, either for its own benefit
or for the benefit of its investment clients or its partners, as the case may be. |
|
(3) |
|
The information presented is derived from Amendment No. 3 to Schedule 13G, as filed with the
SEC on February 3, 2011 by Rutabaga Capital Management. According to the Schedule 13G filing,
Rutabaga Capital Management directly beneficially owns 908,854 shares of Common Stock of the
Company. |
|
(4) |
|
The information presented is derived from Amendment No. 1 to Schedule 13D, as filed with the
SEC on October 18, 2007 by Navistar, Inc., and Navistar International Corporation. Navistar
has the sole voting and investment power over the 664,000 shares. Navistar is a wholly-owned
subsidiary of Navistar International Corporation. By virtue of its ownership of |
4
|
|
|
|
|
all of the outstanding common stock of Navistar, Navistar International Corporation may be
deemed to beneficially own the shares of Common Stock beneficially owned by Navistar. |
Management
The table below sets forth, as of March 31, 2011 the number of shares of common stock
beneficially owned by each director of the Company, by each nominee for election as director of the
Company, by each executive officer named in the Summary Compensation Table contained in this Proxy
Statement, and by all of the foregoing directors, nominees and executive officers as a group. The
information concerning the persons set forth below was furnished in part by each of those persons.
Number of Shares of Common Stock Beneficially Owned
|
|
|
|
|
|
|
|
|
Name of |
|
Amount and Nature |
|
|
|
|
Beneficial Owner |
|
of Beneficial Ownership |
|
|
Percent of Class(1) |
|
|
|
|
|
|
|
|
|
|
Kevin L. Barnett |
|
|
168,538 |
(2) |
|
|
2.3 |
% |
Thomas R. Cellitti |
|
|
52,789 |
(3) |
|
|
* |
|
James F. Crowley |
|
|
38,189 |
(4) |
|
|
* |
|
Herman F. Dick, Jr. |
|
|
104,443 |
(5) |
|
|
1.5 |
% |
Ralph O. Hellmold |
|
|
75,539 |
(6) |
|
|
1.1 |
% |
Stephen J. Klestinec |
|
|
173,288 |
(7) |
|
|
2.4 |
% |
Terrence J. ODonovan |
|
|
39,844 |
(8) |
|
|
* |
|
Malcolm M. Prine |
|
|
180,353 |
(9) |
|
|
2.5 |
% |
James L. Simonton |
|
|
184,009 |
(10) |
|
|
2.6 |
% |
All directors, nominees and executive officers as a group
(9 persons) |
|
|
1,016,992 |
|
|
|
14.2 |
% |
|
|
|
* |
|
Less than 1 % of the outstanding shares of common stock. |
|
(1) |
|
The Percent of Class computation is based upon the total number of shares beneficially
owned by the named person or group divided by the sum of (i) 7,102,343 shares of common stock
outstanding on March 31, 2011, and (ii) the number of common shares, if any, as to which the
named person or group has the right to acquire beneficial ownership within 60 days of March
31, 2011. |
|
(2) |
|
Includes: (i) 75,000 shares of common stock, which Mr. Barnett has the right to acquire
within 60 days through the exercise of stock options; (ii) 21,502 shares of common stock as to
which Mr. Barnett has sole voting and investment power; (iii) 2,000 shares of common stock as
to which Mr. Barnett shares voting and investment power with his wife; (iv) 11,150 shares of
common stock held by Mr. Barnett in the Core Molding Technologies, Inc. Employee Stock
Purchase Plan; (v) 8,340 shares of common stock held by Mr. Barnett in the Core Molding
Technologies, Inc. 401(k) Plan; and (vi) 50,546 shares of restricted stock subject to future
vesting conditions. |
|
(3) |
|
Includes: (i) 33,250 shares of common stock, which Mr. Cellitti has the right to acquire
within 60 days through the exercise of stock options; (ii) 14,818 shares of common stock as to
which Mr. Cellitti has sole voting and investment power; and (iii) 4,721 shares of restricted
stock subject to future vesting conditions. |
|
(4) |
|
Includes: (i) 22,650 shares of common stock, which Mr. Crowley has the right to acquire
within 60 days through the exercise of stock options; (ii) 9,818 shares of common stock as to
which Mr. Crowley has sole voting and investment power; (iii) 1,000 shares of common stock as
to which Mr. Crowley shares voting and investment power with his wife; and (iv) 4,721 shares
of restricted stock subject to future vesting conditions. |
|
(5) |
|
Includes: (i) 42,700 shares of common stock, which Mr. Dick has the right to acquire
within 60 days through the exercise of stock options; (ii) 24,162 shares of common stock as
which Mr. Dick has sole voting and investment power; (iii) 10,290 shares of common stock held
by Mr. Dick in the Core Molding Technologies, Inc. Employee Stock Purchase Plan; (iv) 5,686
shares of common stock held by Mr. Dick in the Core Molding Technologies, Inc. 401(k) Plan;
and (v) 21,605 shares of restricted stock subject to future vesting conditions. |
|
(6) |
|
Includes: (i) 75,539 shares of common stock as to which Mr. Hellmold has sole voting and
investment power. |
5
|
|
|
(7) |
|
Includes: (i) 92,000 shares of common stock, which Mr. Klestinec has the right to acquire
within 60 days through the exercise of stock options; (ii) 38,837 shares of common stock as to
which Mr. Klestinec has sole voting and investment power; (iii) 2,984 shares of common stock
held by Mr. Klestinec in the Core Molding Technologies, Inc. Employee Stock Purchase Plan;
(iv) 7,478 shares of common stock held by Mr. Klestinec in the Core Molding Technologies, Inc.
401(k) Plan; and (v) 31,989 shares of restricted stock subject to future vesting conditions. |
|
(8) |
|
Includes: (i) 3,738 shares of common stock held by Mr. ODonovan in the Core Molding
Technologies, Inc. Employee Stock Purchase Plan; and (ii) 36,106 shares of restricted stock
subject to future vesting conditions. |
|
(9) |
|
Includes: (i) 99,750 shares of common stock, which Mr. Prine has the right to acquire
within 60 days through the exercise of stock options; (ii) 511 shares of common stock held by
Mr. Prines wife; and (iii) 80,092 shares of common stock as to which Mr. Prine has sole
voting and investment power. |
|
(10) |
|
Includes 184,009 shares of common stock as to which Mr. Simonton has sole voting and
investment power. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the following
persons to file initial statements of beneficial ownership on a Form 3 and changes of beneficial
ownership on a Form 4 or Form 5 with the Securities and Exchange Commission and to provide the
Company with a copy of those statements:
|
|
|
executive officers and directors of the Company; and |
|
|
|
persons who beneficially own more than 10% of the issued and outstanding shares of
common stock of the Company. |
The Company believes that its executive officers, directors and greater than 10% beneficial
owners complied with all applicable section 16(a) filing requirements for the fiscal year ended
December 31, 2010.
DIRECTORS AND EXECUTIVE OFFICERS OF CORE MOLDING TECHNOLOGIES, INC.
The following biographies provide information on the background and experience of the persons
nominated to become directors at the annual meeting and the executive officers of the Company. The
Company is not aware of any family relationships among any of the following persons or any
arrangements or understandings pursuant to which those persons have been, or are to be, selected as
a director or executive officer of the Company, other than arrangements or understandings with
directors or executive officers acting solely in their capacity as directors or executive officers.
|
|
|
|
|
|
|
Name |
|
Age |
|
Position(s) Currently Held |
|
|
|
|
|
|
|
Kevin L. Barnett
|
|
|
48 |
|
|
President, Chief Executive Officer and Director |
Thomas R. Cellitti
|
|
|
59 |
|
|
Director |
James F. Crowley
|
|
|
64 |
|
|
Director |
Herman F. Dick, Jr.
|
|
|
51 |
|
|
Vice President, Secretary, Treasurer, and Chief
Financial Officer |
Ralph O. Hellmold
|
|
|
70 |
|
|
Director |
Stephen J. Klestinec
|
|
|
61 |
|
|
Vice President and Chief Operating Officer |
Terrence J. ODonovan
|
|
|
51 |
|
|
Vice President Sales and Marketing |
Malcolm M. Prine
|
|
|
82 |
|
|
Chairman of the Board of Directors |
James L. Simonton
|
|
|
70 |
|
|
Director |
6
Kevin L. Barnett. Kevin L. Barnett joined the Company on April 1, 1997 and was elected Vice
President, Secretary, Treasurer and Chief Financial Officer on April 24, 1997. Mr. Barnett served
in this capacity until August 7, 2002, when he became Vice President-Manager Columbus Operations
and Secretary. On May 15, 2005 Mr. Barnett was promoted to Vice President, Business Development
and on January 3, 2006 Mr. Barnett was promoted to Group Vice President and then on January 1,
2007, Mr. Barnett was promoted to President and Chief Executive Officer. Mr. Barnett has served as
a director of the Company since January 1, 2007. Mr. Barnett joined the Company after
approximately five years of working with Medex Inc., a publicly held manufacturer and marketer of
injection molded products used for medical and surgical applications. Mr. Barnett served as Vice
President, Treasurer, and Corporate Controller of Medex Inc. from October 1995 through March 1997.
He served as Vice President and Corporate Controller of Medex Inc. from May 1994 to October 1995
and as Assistant Treasurer from April 1992 to May 1994. Prior to joining Medex Inc., Mr. Barnett
served as a certified public accountant with Deloitte & Touche LLP from August 1984 to April 1992.
As a result of these and other professional experiences, the Board of Directors has concluded that
Mr. Barnett should serve as a director because of his corporate management skills and experience,
the key role Mr. Barnett plays in facilitating the communication and the flow of information
between management and the directors on a regular basis, as well as his experience in the plastics
industry.
Thomas R. Cellitti. Thomas R. Cellitti has served as a director of the Company since February
10, 2000. Mr. Cellitti has been the Senior Vice President, Reliability and Quality, for Navistar
since 2008. Prior to such time, Mr. Cellitti served as Vice President and General Manager, Medium
Truck from 2004 to 2008 as well as Vice President and General Manager, Bus Vehicle Center from 1991
to 2004 for Navistar. Navistar is a 9.3% stockholder and a significant customer of the Company.
The relationship of Navistar to the Company is described below under Certain Relationships and
Related Transactions. As a result of these and other professional experiences, the Board of
Directors has concluded that Mr. Cellitti should serve as a director because of his in-depth
insight and knowledge about manufacturing operations and quality as well as his extensive
background in the medium and heavy duty truck industries.
James F. Crowley. James F. Crowley has served as a director of the Company since May 28, 1998
and is Chairman of the Audit Committee. Mr. Crowley is a private investor and Chairman and
Managing Partner of the Old Strategic LLC, headquartered in Connecticut. From October 2008, Mr.
Crowley has served as a Director of Green Plains Renewable Energy and is Chairman of its Audit
Committee. From 1993 to 2006, Mr. Crowley was a founding partner and Chairman of the Strategic
Research Institute LLC. From 1984 to 1992, Mr. Crowley served in various capacities with
Prudential Securities, Inc. including President of Global Investment & Merchant Banking. Prior to
joining Prudential Securities, Inc., Mr. Crowley was a First Vice President and Partner at Smith
Barney, Harris Upham & Co. in its Investment Bank and Capital Markets Division. Mr. Crowley has
also served on the board of various private organizations and universities. As a result of these
and other professional experiences, the Board of Directors has concluded that Mr. Crowley should
serve as a director because of his extensive business, investment banking, finance and corporate
management experience, as well as his in-depth understanding of the financial markets and insight
into the role of serving as Chair of the Companys Audit Committee.
Herman F. Dick, Jr. Herman F. Dick, Jr. joined the Company on September 10, 1999 as
Controller and was elected to the position of Treasurer and Chief Financial Officer on August 7,
2002. Mr. Dick was then elected Secretary on May 12, 2005. On, January 1, 2007 Mr. Dick was
elected as Vice President, in addition to his capacities as Secretary, Treasurer and Chief
Financial Officer. Mr. Dick joined the Company after approximately eleven years of working with
Boehringer Ingelheim, GMBH, a privately held research based manufacturer of pharmaceuticals and
other healthcare products.
Ralph O. Hellmold. Ralph O. Hellmold has served as a director of the Company since December
31, 1996. He is Managing Member of Hellmold & Co., LLC an investment banking boutique specializing
in doing mergers and acquisitions and working with troubled companies or their creditors. Prior to
forming Hellmold & Co., LLC in 2004, Mr. Hellmold was president of Hellmold Associates which was
formed in 1990, and Chairman of The Private Investment Banking Company which was formed in 1999.
Prior to 1990, Mr. Hellmold was a Managing Director at Prudential-Bache Capital Funding, where he
served as co-head of the Corporate Finance Group, co-head of the Investment Banking Committee and
head of the Financial Restructuring Group. Prior to 1987, Mr. Hellmold was a partner at Lehman
Brothers and its successors, where he worked in Corporate Finance since 1974 and co-founded
Lehmans Financial Restructuring Group. Mr. Hellmold is a Chartered Financial Analyst and has
served as director,
7
and on the audit committee, of other public corporations in the past. As a result of these
and other professional experiences, the Board of Directors has concluded that Mr. Hellmold should
serve as a director because of his extensive business, investment banking, finance and corporate
management experience, as well as his in-depth understanding of the financial markets and strong
background in mergers and acquisitions.
Stephen J. Klestinec. Stephen J. Klestinec joined the Company on April 1, 1998, was elected
to the position of Vice President, Sales and Marketing on May 28, 1998, and was promoted to Vice
President, Operations on January 3, 2006. On January 1, 2007, Mr. Klestinec was promoted to Vice
President and Chief Operating Officer. Mr. Klestinec was employed by Atlanta based Georgia-Pacific
Resin, Inc., a manufacturer of thermoset resins, from 1981 until joining the Company on April 1,
1998. At Georgia-Pacific, Mr. Klestinec served as market manager of fiber reinforced products. In
such capacity, Mr. Klestinec commercialized products for both the North American and international
markets in the aerospace, mass transit, electrical and electronic industries. Mr. Klestinec also
managed the abrasives, adhesives and specialty market segment. Mr. Klestinec also held positions
at Georgia-Pacific in market development, quality assurance and manufacturing. Prior to joining
Georgia-Pacific, Mr. Klestinec served as plant manager for Pacific Resins and Chemicals.
Terrence J. ODonovan. Terrence J. ODonovan joined the Company on January 1, 2009 and was
elected to the position of Vice President, Marketing and Sales on January 1, 2009. Prior to joining
the Company, Mr. ODonovan was employed by Q3 Industries in Columbus, Ohio, where he held the
position of Vice President of Sales and Marketing from 2006 to 2008 serving the OEM commercial
vehicle, automotive, and general industrial markets. Prior to serving in that capacity at Q3
Industries, Mr. ODonovan served as the Chief Operating Officer from 2003 to 2006. Mr. ODonovan
has also held Operations and Management positions at Hawk Corporation, The Auld Company and The
Timken Company.
Malcolm M. Prine. Malcolm M. Prine has served as a director and as Chairman of the Board of
Directors of the Company since December 31, 1996. Mr. Prine also served as a director of RYMAC
Mortgage Investment Corporation from May 1992 to December 31, 1996. RYMAC merged with the Company
on December 31, 1996, as described below under Certain Relationships and Related Transactions.
For the last five years, Mr. Prine has not been active with other businesses; however, Mr. Prine
has significant prior business experience as a Chief Executive Officer of both public and private
companies. Mr. Prine has also previously served on the boards of various public and private
organizations, along with various universities. As a result of these and other professional
experiences, the Board of Directors has concluded that Mr. Prine should serve as a director because
of his extensive business, finance and philanthropic experience, as well as his extensive knowledge
of the Company as a result of serving on the Board since inception.
James L. Simonton. James L. Simonton has served as a director of the Company since May 19,
2010. Mr. Simonton previously served as President and Chief Executive Officer of Core Molding
Technologies from January 15, 2000 until his retirement on January 1, 2007 and as a director of
Core Molding Technologies from May 28, 1998 to January 1, 2007. From January 1, 2007 through March
31, 2010, Mr. Simonton served as an advisor to our Board. From 1992 until December 31, 1999, Mr.
Simonton served as the Vice President of Purchasing and Supplier Development for International
Truck and Engine Corporation (now known as Navistar). In such capacity, Mr. Simonton was in charge
of purchasing of all production materials, in-bound and out-bound freight and logistics and the
development of suppliers. Navistar is a 9.3% stockholder and a significant customer of the Company.
As a result of these and other professional experiences, the Board of Directors has concluded that
Mr. Simonton should serve as a director because of his in-depth insight and knowledge about the
Companys markets and operations, as well as his extensive background in the medium and heavy duty
truck industries.
CORPORATE GOVERNANCE
The Board of Directors Independence
Of the directors who presently serve on the Companys Board of Directors, the Board has
affirmatively determined that each of Messrs. Crowley, Hellmold, Prine and Simonton meets the
standards of independence under NYSE AMEX exchange listing standards. In making this
determination, the Board of Directors considered the relationship of Mr. Cellitti, who is employed
by Navistar which has a 9.3% ownership in the Company, and all facts and circumstances the Board of
Directors deemed relevant from the standpoint of each of the directors and from that
8
of persons or organizations with which each of the directors has an affiliation, including
commercial, industrial, banking, consulting, legal, accounting, charitable and familial
relationships among others. In making this determination, the Board of Directors has relied upon
both information provided by the directors and information developed internally by the Company in
evaluating these facts.
Board Leadership Structure
The Chairman of the Board is a director and presides at meetings of the Board. The Chairman
is appointed on an annual basis by at least a majority vote of the remaining directors.
Historically, the offices of Chairman of the Board and Chief Executive Officer are separated. Such
separation enables the Chairman to devote his time to managing the Board and the Chief Executive
Officer to focus on the operations of the Company. The Company has no fixed policy with respect to
separation of the offices of the Chairman of the Board and Chief Executive Officer, however, the
Board believes it is in the best interests of the Company and its stockholders to separate these
positions.
Risk Oversight
The Board has an active role, as a whole and also at the committee level, in overseeing the
management of the Companys risks. The Board regularly reviews information regarding the Companys
operations and liquidity, as well as the risks associated with each. The Board reviews and approves
the Companys annual operating, organizational and capital plans. The Audit Committee oversees the
management of financial risks. The Nominating Committee manages risks associated with the
independence of the Board of Directors and potential conflicts of interest. While each committee
is responsible for evaluating certain risks and overseeing the management of such risks, the entire
Board of Directors is regularly informed about risks through committee minutes and reports at Board
meetings.
In addition to the risk oversight responsibilities described above, the Companys Chief
Executive Officer and Chief Financial Officer examine, on an annual basis, the compensation for all
employees, including named executive officers. As part of this process, the Companys Chief
Executive Officer and Chief Financial Officer determined in 2010 that the Companys policies and
practices with respect to compensation do not create risks that are reasonably likely to have a
material adverse effect on the Company.
While the Company does not have a separately constituted Compensation Committee, the
independent members of the Companys Board review, recommend, approve and set compensation policies
as it relates to the Companys named executive officers, and also consider the overall policies and
practices utilized by senior management with respect to establishing compensation for all other
employees. As part of that review process in 2010, the Board agreed with the assessments of the
Companys Chief Executive Officer and Chief Financial Officer, and as part of its determination to
approve the current compensation packages, determined that the Companys policies and practices
with respect to compensation are not reasonably likely to have a material adverse effect on the
Company. In reaching the foregoing conclusions, both the Board and the Chief Executive Officer and
Chief Financial Officer assessed the risks associated with the Companys compensation policies and
practices. The basis for these conclusions included: (i) consideration of the Companys existing
compensation programs, and the allocation between each primary component of compensation (base
salary, annual profit sharing and long-term equity based compensation); and (ii) a consideration of
the risks associated with the Companys business, and whether the Companys compensation policies
and practices increased those risks. Based on the foregoing, management and the independent
members of the Board approved the Companys compensation programs, and in connection with such
approval concluded that the risks associated with the Companys compensation policies and practices
are not reasonably likely to have a material adverse effect on the Company.
Board Meetings and Committees
The Board of Directors met six times during the fiscal year ended December 31, 2010. During
that period, each of the directors attended at least 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings of all committees of the Board
of Directors on which each director served.
9
Compensation Committee
The Company does not have a separate Compensation Committee. The entire Board of Directors
performed the functions of a Compensation Committee, including recommending the form and amount of
compensation to be paid to the executive officers and directors of the Company, with a majority of
directors who are independent under NYSE AMEX listing standards required to effect a decision. The
Companys non-management directors participate in the deliberations of the Board of Directors
concerning executive officer compensation. The Companys Board includes Mr. Barnett, who is the
President and Chief Executive Officer of the Company. However, Mr. Barnett is not involved in, and
abstains from, all discussions and decisions regarding his compensation. While Mr. Barnett
participates in discussions regarding compensation for the Companys other named executive
officers, Mr. Barnett is not involved in, and also abstains from, all final compensation decisions
regarding such other named executive officers.
The Board of Directors believes that a standing Compensation Committee is not necessary
because the Board of Directors as a whole determines the appropriate compensation levels, with a
majority of directors who are independent under NYSE AMEX listing standards required to effect a
decision. All of the directors are familiar with the standard compensation levels in similar
industries, and are knowledgeable regarding the current trends for compensating their executive
officers. The Board of Directors acts to establish the Companys compensation policy, determines
the compensation paid to the named executive officers and non-employee directors and recommends
executive incentive compensation and equity-based compensation.
Audit Committee
The Company has an Audit Committee, which during 2010 consisted of Messrs. Crowley, Hellmold
and Prine, each of whom was independent as that term is defined under NYSE AMEX listing
standards. The Board has determined that Mr. Crowley and Mr. Hellmold qualify as an audit
committee financial expert as defined in Section 407(d)(5)(ii) of Regulation S-K promulgated by
the Securities and Exchange Commission. The principal function of the Audit Committee is to review
and approve the scope of the annual audit undertaken by the independent registered public
accounting firm of the Company and to meet with them to review and inquire as to audit functions
and other financial matters and to review the year-end audited financial statements. For a more
detailed description of the role of the Audit Committee, see Report of the Audit Committee below.
The Audit Committee met four times during the fiscal year ended December 31, 2010. The Audit
Committee discussed the interim financial information contained in quarterly earnings announcements
with both management and the independent auditors prior to the public release of quarterly
information. The Audit Committee is governed by a charter as most recently reaffirmed by the Board
of Directors on March 17, 2011. A copy of the Audit Committee Charter was attached as Exhibit A to
the proxy statement for the Companys 2010 Annual Stockholders Meeting. In accordance with its
written charter, the Audit Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and financial reporting
practices of the Company.
Nominating Committee
The Company has a Nominating Committee consisting of all members of the Board of Directors,
with a majority of directors who are independent under NYSE AMEX listing standards required to
effect a decision. The principal function of the Nominating Committee is to recommend candidates
for membership on the Board of Directors. A copy of the Nominating Committee Charter was attached
as Exhibit B to the proxy statement for the Companys 2010 Annual Stockholders Meeting.
In identifying and evaluating nominees for director, the Nominating Committee seeks to ensure
that the Board possesses, in the aggregate, the strategic, managerial and financial skills and
experience necessary to fulfill its duties and to achieve its objectives, and seeks to ensure that
the Board is comprised of directors who possess knowledge in areas that are of importance to the
Company. In addition, the Nominating Committee believes it is important that at least one director
have the requisite experience and expertise to be designated as an audit committee financial
expert. The Nominating Committee looks at each nominee on a case-by-case basis regardless of who
recommended the nominee. While the Company does not have a formal diversity policy for Board
membership, the Nominating Committee evaluates and measures those skills and accomplishments which
should be possessed by a prospective member of the Board, including contribution of a diverse frame
of reference that will enhance the quality of the Boards deliberations and decisions. In addition,
the Nominating Committee considers,
10
among other factors, ethical values, personal integrity and business reputation of the
candidate, his or her financial acumen, reputation for effective exercise of sound business
judgment, strategic planning capability, indicated interest in providing attention to the duties of
a member of the Board, personal skills in marketing, manufacturing processes, technology or in
other areas where such persons talents may contribute to the effective performance by the Board of
its responsibilities.
The Nominating Committee will consider persons recommended by stockholders to become nominees
for election as directors. Recommendations for consideration by the Nominating Committee should be
sent to the Secretary of the Company in writing together with appropriate biographical information
concerning each proposed nominee as more detailed in Article III.D of the Nominating Committee
Charter.
The Bylaws of the Company set forth procedural requirements pursuant to which stockholders may
make nominations to the Board of Directors. The Board of Directors or the Nominating Committee may
not accept recommendations for nominations to the Board of Directors in contravention of these
procedural requirements.
In order for a stockholder to nominate a person for election to the Board of Directors, the
stockholder must give written notice of the stockholders intent to make the nomination either by
personal delivery or by United States mail, postage prepaid, to the Secretary of the Company not
less than fifty nor more than seventy-five days prior to the meeting at which directors will be
elected. In the event that less than sixty days prior notice or prior public disclosure of the
date of the meeting is given or made to stockholders, the Company must receive notice not later
than the close of business on the tenth day following the day on which notice of the date of the
meeting was mailed or public disclosure was made, whichever occurred first.
The notice must set forth:
|
|
|
the name and address of record of the stockholder who intends to make the
nomination; |
|
|
|
a representation that the stockholder is a holder of record of shares of the capital
stock of the Company entitled to vote at the meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the notice; |
|
|
|
the name, age, business and residence addresses and principal occupation or
employment of each proposed nominee; |
|
|
|
a description of all arrangements or understandings between the stockholder and each
proposed nominee and any other person or persons, naming such person or persons,
pursuant to which the nomination or nominations are to be made by the stockholder; |
|
|
|
other information regarding each proposed nominee as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission; and |
|
|
|
the written consent of each proposed nominee to serve as a director of the Company
if elected. |
The Company may require any proposed nominee to furnish other information as it may reasonably
require to determine the eligibility of the proposed nominee to serve as a director. The presiding
officer of the meeting of stockholders may, if the facts warrant, determine that a stockholder did
not make a nomination in accordance with the foregoing procedure. If the presiding officer makes
such a determination, the officer shall declare such determination at the meeting and the defective
nomination will be disregarded.
Board Policies Regarding Communication with the Board of Directors and Attendance at Annual
Meetings
Stockholders may communicate with the full Board of Directors, non-management directors as a
group or individual directors, including the Chairman of the Board, by submitting such
communications in writing to the Companys Secretary, c/o the Board of Directors (or, at the
stockholders option, c/o a specific director or directors), 800 Manor Park Drive, Columbus, Ohio
43228. Such communications will be delivered directly to the Board.
11
The Company does not have a policy regarding Board member attendance at the annual meeting of
stockholders; however, all directors of the Company attended the 2010 annual meeting of
stockholders.
Code of Ethics
The Company has adopted a Code of Conduct and Business Ethics which applies to all employees
of the Company, including the Companys principal executive officer, principal financial officer
and principal accounting officer or persons performing similar functions. The Companys Board
believes that the Code of Conduct and Business Ethics complies with the code of ethics required by
the rules and regulations of the Securities Exchange Commission. The Company will provide a copy
of the Code of Conduct and Business Ethics without charge to any person upon written request to the
Company at its principal executive office at 800 Manor Park Drive, Columbus, Ohio 43228, Attention:
President.
Compensation Committee Interlocks and Insider Participation
The Companys Board of Directors performs the functions of a compensation committee, with a
majority of directors who are independent required to effect a decision. The Companys Board
includes Mr. Barnett, who is the President and Chief Executive Officer of the Company. However,
Mr. Barnett is not involved in, and abstains from, all discussions and decisions regarding his
compensation. While Mr. Barnett participates in discussions regarding compensation for the
Companys other named executive officers, Mr. Barnett is not involved in, and also abstains from,
all final compensation decisions regarding such other named executive officers.
Mr. Cellitti is a member of the Board of Directors of the Company and is currently an officer
of Navistar. Sales to Navistar represented approximately 55% of the total revenues of the Company
for the fiscal year ended December 31, 2010. Navistar is also a 9.3% stockholder in the Company.
EXECUTIVE COMPENSATION
Unless the context requires otherwise, in this Executive Compensation section, including the
Compensation Discussion and Analysis and the tables which follow it, references to we, us,
our or similar terms are to the Company and our subsidiaries.
Compensation Discussion and Analysis
This compensation discussion and analysis describes the following aspects of our compensation
system as it applies to our named executive officers as described in the summary compensation table
set forth below (the named executive officers):
|
|
|
Our compensation philosophy and objectives; |
|
|
|
The means we employ to achieve our compensation objectives, including the establishment
of total direct compensation and the mix within that compensation; |
|
|
|
The elements of compensation that are included within total direct compensation as well
as compensation items in addition to total direct compensation; and |
|
|
|
The reasons we have elected to pay these elements of compensation to achieve our
compensation objectives and how we determine the amount of each element. |
12
Compensation Philosophy and Objectives
Our compensation philosophy is focused on incentivizing executives through the use of base
salary, annual profit sharing incentives and long-term equity based incentive compensation in order
to attract, motivate, reward and retain executives.
The Board of Directors has established an articulated compensation philosophy with the
following primary objectives:
|
|
|
Attract, retain and encourage the development of highly qualified and motivated
executives; |
|
|
|
Provide compensation that is competitive with our peers and defined marketplace; |
|
|
|
Provide compensation on both an annual and long-term basis and in a fashion that aligns
the interests of executives with those of our stockholders in order to create long-term
stockholder value; and |
|
|
|
Enhance the connection between our business results and the compensation of executives,
linking a material portion of executive compensation with performance; |
To this end, the objectives of our compensation philosophy puts a strong emphasis on
correlating the long-term growth of stockholder value with managements most significant
compensation opportunities.
Means of Achieving Our Compensation Objectives
The three primary components of compensation for our named executive officers include base
salary, annual profit sharing opportunity and long-term equity based incentive compensation. Our
named executive officers also participate in our 401(k) plan and receive medical, dental, vision,
short-term disability, long-term disability and life insurance benefits.
Determination of Compensation
While we do not have a separately constituted Compensation Committee, the independent members
of our Board of Directors play a significant role in reviewing, recommending, approving and setting
compensation policies for our named executive officers. As a general matter, the Board of
Directors, excluding Mr. Barnett, determines the appropriate levels of compensation for our named
executive officers and are knowledgeable regarding current trends for compensating named executive
officers, provided however that the Chief Executive Officer is not involved in, and abstains from,
all discussions and decisions regarding his compensation as an executive officer. Historically, on
an annual basis, the Chief Executive Officer and Chief Financial officer develop initial
recommendations for the salary components of compensation for named executive officers excluding
the Chief Executive Officer, for review and approval by the board at the annual operating plan
review meeting. In December of each year, the Board then reviews salaries considering such
recommendations and in light of each named executive officers individual performance, the
compensation objectives described above and the peer group performance described below. The salary
adjustments are then typically effective at the beginning of the next calendar year. The Board
also establishes, at this time, the estimated Companys profit sharing performance threshold for
the following year. The profit sharing threshold is later recalculated using actual values
available at the end of the calendar year.
Stock grants are typically considered in May after the Companys annual meeting. The Board
made restricted stock grants to the named executive officers on May 19, 2010, May 28, 2009 and May
14, 2008 under the long-term equity incentive that was approved by stockholders based upon its
comprehensive review and analysis of the information provided by the sub-committee and the previous
opinion and evaluation of the consulting firm, Compensation Resources.
13
Peer Group Analysis
In order to establish appropriate levels of compensation for our named executive officers, we
collect competitive data for base salaries, annual bonuses, and long-term incentive awards.
Because our market for executive talent is national, competitive data is reflective of the
compensation levels of executives at companies of comparable size and complexity on both the local
and national level. In addition, the information that is collected relates to companies with
comparable manufacturing operation or geographic representation. When last reviewed in 2008, which
is the last time the Board authorized salary increases, the population of companies reviewed was
publicly traded in the United States and had an average market capitalization of approximately $90
million. The data reviewed for these peer companies was derived from the publicly available SEC
filings of these organizations. The companies comprising the peer group reviewed for establishing
2008 compensation levels were as follows:
|
|
|
Pinnacle Data Systems, Inc.
|
|
Airnet Systems, Inc. |
Atlantis Plastics, Inc.
|
|
Rocky Brands, Inc. |
Supreme Industries, Inc.
|
|
R.G. Berry |
Proliance International, Inc.
|
|
Dorman Products, Inc. (f/k/a R&B Inc.) |
Commercial Vehicle Group
|
|
Max & Ermas Restaurants, Inc. |
Strattec Security Corporation |
|
|
We used this competitive data to determine the applicable market median for executive base pay
and bonus compensation among the peer group, which serves as a benchmark for analyzing each of our
executive positions. For our named executives, we then established targeted total compensation,
following a review of this competitive data. We believe reviewing the approximate market median
amounts from our peer group is an appropriate guide for establishing our executive compensation,
because we expect to achieve at least median performance and that result balances the cost of the
compensation program with the expected performance.
While we target total direct compensation at the market median, an executives actual total
compensation could vary significantly depending upon the relationship between our actual
performance and target results. If our results are well above target performance, executives have
the opportunity to earn compensation that is well above the relevant market median. Conversely,
executives may earn compensation that is well below the relevant market median if our performance
is well below target levels.
Each element of compensation and total compensation for the Companys named executive officer
for 2010 is set forth below, along with the 2008 peer group average for comparison purposes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
Base Salary |
|
|
Compensation |
|
|
Equity Awards |
|
|
Compensation |
|
|
|
|
|
|
|
Peer |
|
|
|
|
|
|
|
|
|
|
|
|
|
Peer |
|
|
|
|
|
|
Peer |
|
|
|
|
|
|
|
Group |
|
|
|
|
|
Peer Group |
|
|
|
|
|
|
Group |
|
|
|
|
|
|
Group |
|
|
|
Actual |
|
|
Median |
|
|
Actual |
|
|
Median |
|
|
Actual |
|
|
Median |
|
|
Actual |
|
|
Median |
|
Kevin L. Barnett
President and Chief
Executive Officer |
|
$ |
270,000 |
|
|
$ |
402,000 |
|
|
$ |
120,278 |
|
|
$ |
109,000 |
|
|
$ |
81,000 |
|
|
$ |
83,000 |
|
|
$ |
490,878 |
|
|
$ |
669,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Klestinec
VP & Chief Operating
Officer |
|
$ |
220,000 |
|
|
$ |
289,000 |
|
|
$ |
98,004 |
|
|
$ |
44,000 |
|
|
$ |
65,998 |
|
|
$ |
48,000 |
|
|
$ |
401,602 |
|
|
$ |
393,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman F. Dick, Jr.
VP, Secretary,
Treasurer and Chief
Financial Officer |
|
$ |
200,000 |
|
|
$ |
258,000 |
|
|
$ |
89,095 |
|
|
$ |
49,000 |
|
|
$ |
47,330 |
|
|
$ |
47,000 |
|
|
$ |
352,425 |
|
|
$ |
379,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrence J. ODonovan
VP, Marketing and Sales |
|
$ |
165,000 |
|
|
$ |
192,000 |
|
|
$ |
73,503 |
|
|
$ |
0 |
|
|
$ |
49,499 |
|
|
$ |
72,000 |
|
|
$ |
301,202 |
|
|
$ |
282,000 |
|
14
This competitive data was not updated since 2008, as no salary increases were authorized by
the Board due to economic conditions for fiscal years 2009 and 2010.
In November, 2010, the Board engaged Mathews, Young Management Consulting, a compensation
and human resource firm, to assist the Board in reviewing and establishing appropriate 2011
compensation levels. As part of its review process, Mathews, Young proposed updating and expanding
the Companys previously established peer group described above, and compiled competitive data for
base salaries, non-equity compensation and equity awards for comparison purposes. The Board
utilized this data when establishing base salary levels for 2011, as discussed below under
Elements of Direct Compensation.
Compensation Mix
We compensated our named executive officers through a combination of base salary, annual
profit sharing incentive opportunity and long-term equity based incentive compensation. The amount
of total direct compensation for our named executive officers is allocated among the various types
of compensation in a manner designed to achieve our overall compensation objectives as described
above. This allocation is also structured so that the annual profit sharing and long-term equity
based incentive components targets 50% of the executive officers overall direct compensation
taking into account the cyclical nature of the markets we serve with the remaining 50% relating to
base salary. In years of higher profitability, the profit sharing and long-term equity amounts
awarded to our executive officers could result in a compensation mix of more than our 50% target.
In contrast, during years of lower profitability our compensation mix of profit sharing and long
term equity amounts is lower than our 50% target. The resulting compensation mix for our named
executive officers for 2010 was approximately 42% annual profit sharing and long-term equity and
58% base salary. The resulting compensation mix for our named executive officers for 2009 was
approximately 25% annual profit sharing and long-term equity and 75% base salary. The resulting
compensation mix for our named executive officers for 2008 was approximately 49% annual profit
sharing and long-term equity and 51% base salary. The Board considered the resulting compensation
mix reasonable and appropriate in light of the performance achieved for each fiscal year.
Elements of Direct Compensation
Base Salary
We use base salaries to provide a predictable level of current income for our named executive
officers. Our base salaries are designed to assist in attracting, retaining and encouraging the
development of qualified executives. The amount of each executives annual base salary is based on
that executives position, skills and experience, individual performance and the salaries of
executives with comparable positions and responsibilities at peer companies. When establishing
base salaries for our named executive officers, we do not take into account awards previously made,
including equity-based awards under our long-term incentive plans or profit sharing incentives.
Base salary adjustments are determined by the Board, typically on an annual basis, and take into
account the named executive officers individual performance and pay relative to other peer group
companies.
The Board typically reviews officer compensation as a part of the annual planning process
which occurs in December of each year. Base salary adjustments are typically effective the
following January. Even though base salaries were below the median of the peer group when last
reviewed no adjustments were made to base salaries in December 2008 or 2009 for calendar years 2009
and 2010 due to economic conditions.
As previously noted, in November, 2010, the Board engaged Mathews, Young Management
Consulting to assist the Board in reviewing and establishing appropriate 2011 compensation levels,
and to conduct a comprehensive compensation survey, updating and expanding the Companys previously
established peer group and compiling competitive data for comparison purposes. These findings led
the Board to conclude that the executive officers base salaries remained well below the peer group
median. The Board reviewed this competitive data at the December 2010 meeting and adjusted the
base salaries of Messrs. Barnett, Klestinec, Dick and ODonovan to $377,500, $270,000, $240,000 and
$180,000, respectively, effective January 1, 2011.
15
Profit Sharing Program
The Board has established an annual profit-sharing program (the Profit Sharing Plan) for all
non-represented and salaried employees, including its named executive officers. This program is
designed to align the interests of such individuals with those of our stockholders by directly
tying profit sharing payments to our overall financial performance. This program has historically
been used to create a profit sharing pool based upon fifty percent of our earnings before taxes
(EBT) above a threshold established by the Board. This threshold is based upon 8% of the
Companys adjusted average assets. Adjusted average assets include total assets, plus the net
present value of leased equipment, less cash, construction in process, deferred tax assets,
intangible assets, and total debt. The intent of such threshold is to begin creating a profit
sharing pool only after achieving a reasonable return on assets employed in the operations of the
Company for our shareholders. The profit sharing pool is limited to a maximum of 20% of EBT.
The profit sharing threshold was $3,802,000, $4,830,000 and $4,340,000 in 2010, 2009 and 2008,
respectively. In 2010, the profit sharing pool was $1,269,600 and was limited to 20% of EBT. In
2009, the profit sharing pool was zero, as EBT did not exceed the threshold. In 2008, the total
profit sharing pool was $2,125,000 and was limited to 20% of EBT.
In 2010, the Board allocated 30% of the profit sharing pool to our named executive officers,
with the remaining 70% allocated to participating employees. There was no profit sharing pool in
2009, due to earnings not meeting the established threshold. In 2008, the Board allocated 23% of
the profit sharing pool to our named executive officers with the remaining 77% allocated to
participating employees. Our named executive officers receive no other cash bonus compensation, as
the Board believes that the profit sharing program appropriately ties cash incentive compensation
to Company performance (as measured by EBT) and is the most effective means of incentivizing our
named executive officers and aligning the interests of such individuals with those of our
stockholders.
Long-Term Stock-Based Compensation
The Board administers the Core Molding Technologies, Inc. 2006 Long-Term Equity Incentive Plan
(the 2006 Plan) which replaced the Core Molding Technologies, Inc. Long-Term Equity Incentive
Plan which expired on December 31, 2006. The 2006 Plan allows for the grant of incentive and
nonqualified stock options, restricted stock, stock appreciation rights, performance shares,
performance units and other awards. The Board also administers the Core Molding Technologies, Inc.
2002 Employee Stock Purchase Plan, as amended by the stockholders in 2006 (as amended, the Stock
Purchase Plan). The Stock Purchase Plan provides eligible employees, including named executive
officers, with the opportunity to acquire our common stock, and thereby develop a further incentive
for such individuals to share in our future success and further link and align the personal
interests of such individuals to those of our stockholders. The 2006 Plan and the Stock Purchase
Plan are the primary methods for providing stock-based compensation to our named executive
officers.
Restricted Stock. In 2010, 2009 and 2008, the Board granted our named executive
officers, directors and other key managers shares of restricted common stock pursuant to the 2006
Plan. To reinforce the commitment to long-term results and retain named executive officers, each
restricted stock grant vests in three equal installments over the next three (3) years following
the date of the grant, with all restricted stock grants being fully time vested upon the date of
the recipients 65th birthday and accelerated vesting upon death, disability or
change-in-control (as described in the 2006 Plan). The restricted stock grants also contained
stock ownership vesting requirements, such that each restricted stock grant does not vest until the
recipient owns and retains shares of our common stock equal in value to 100% of the recipients
base salary at the date of grant, if a named executive officer. The Board believes that this stock
ownership requirement is a way to align more closely the interests of the named executive officers
with those of the stockholders, giving such named executive officers a more vested stake in our
long-term performance.
The Company has no established specific performance targets associated with restricted stock
grants; however all restricted stock grants are subject to recipients meeting overall individual
performance expectations. Annual restricted stock grants are consistently calculated at 30% of
each named executive officers annual base
16
salary, less any annual compensation expense associated with vesting of previous stock option
grants, divided by the Companys share price on the date of the restricted stock grant is issued.
Pro rata consideration is given to the date of hire for new named executive officers with respect
to the grant date for restricted stock. The Companys restricted stock grants are part of the
overall compensation mix for named executive officers and the Board believes that awarding
restricted stock equal to 30% of the named executive officers base pay helps to achieve the
Companys overall compensation objectives of incentivizing executives in order to attract, motivate
and reward their efforts on behalf of the Company and its stockholders. The Board also believes
that this amount sufficiently aligns the interests of the Companys named executive officers with
stockholders in order to achieve long-term growth.
Awards made to named executive officers in 2010, 2009 and 2008 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 Restricted |
|
|
2009 Restricted |
|
|
2008 Restricted |
|
Name |
|
Stock Awards |
|
|
Stock Awards |
|
|
Stock Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin L. Barnett |
|
|
15,577 |
|
|
|
31,641 |
|
|
|
9,984 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Klestinec |
|
|
12,692 |
|
|
|
25,781 |
|
|
|
6,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman F. Dick, Jr. |
|
|
9,102 |
|
|
|
16,130 |
|
|
|
5,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrence J. ODonovan |
|
|
9,519 |
|
|
|
26,587 |
|
|
|
|
|
In establishing the award levels for restricted stock grants in 2010, 2009 and 2008, the Board
did not consider the equity ownership levels of the recipients or compensation previously paid,
including prior stock-based awards that were fully vested, however they did consider and adjusted
accordingly for any unvested options that existed at the time of the restricted stock grant. The
Boards primary focus in granting such restricted stock awards is to focus on retention of
executives in light of prevailing competitive conditions and to motivate executives in ways that
support our strategic direction.
Our current and intended future practice is to use restricted stock awards in lieu of stock
options for the reasons discussed above, and to make such award determinations at the Board meeting
held in conjunction with the annual shareholder meeting. This meeting customarily is held in May,
and this practice permits us to consider the prior-year results and future expectations when making
new grants. From time to time, we also may grant awards in connection with new hires and
promotions, at the time of those events.
Employee Stock Purchase Program. We maintain the Stock Purchase Plan, as referenced
above, under which all of our employees, including our named executive officers, are permitted to
participate. Accumulated employee payroll deductions are used to purchase shares of our common
stock quarterly on or about February 1, May 1, August 1 or November 1 at a 15% discount to the
closing price of the common stock on the NYSE AMEX on the date of purchase. The Board believes
that this broad-based plan encourages stock ownership by all of our employees.
Other Elements of Compensation
Benefits
We provide our named executive officers with medical, dental, vision, short-term disability,
long-term disability and life insurance benefits under the same programs used to provide benefits
to salaried employees based in Columbus, Ohio and Gaffney, South Carolina.
401(k) Plan
We maintain a defined contribution tax-qualified retirement plan called the Core Molding
Technologies, Inc. 401(k) Retirement Savings Plan (the 401(k) Plan), which provides for
broad-based employee participation, including for our named executive officers. The 401(k) Plan is
designed to encourage savings for retirement, as we do not maintain a defined benefit plan that
provides a specified level of income following retirement for named executive officers or other
employees.
17
Under the 401(k) Plan, all of our eligible employees, including our named executive officers,
may contribute earnings on a pre-tax basis to the 401(k) Plan up to the maximum limit then in
effect under applicable law, and receive matching contributions from us that are subject to vesting
over time. The matching contribution equals 25% of the first 6% of earnings deferred by each
participant to the 401(k) Plan, which includes all salary and wages that are subject to income tax
withholding (except for overtime and disqualifying dispositions of stock options). Until December
31, 2007 our matching contributions were invested automatically into our common stock. Beginning
January 1, 2008 the 401(k) Plan was amended by the Board and matching contributions are no longer
invested in our common stock but are now invested ratably to the same funds elected by the
participant. In addition, we make an automatic employer contribution equal to 3% of each
participants base salary. This contribution is made for all eligible employees, regardless of
whether they make any pre-tax contributions. Finally, if a participant is at least age 35, we may
make a retirement contribution based upon such participants base salary, which equals 1.5% of such
participants earnings if such participant is age 35 to 44, and 3.5% of base salary if such
participant is age 45 or older. This contribution is made only if the participant is employed on
the last day of the year and is subject to board approval.
We offer the 401(k) Plan because it provides our employees, including our named executive
officers, with a way to save for retirement. We intend to evaluate the 401(k) Plan for
competitiveness in the marketplace from time to time, but we do not anticipate taking the level of
benefits provided into account in determining our executives overall compensation packages in the
coming years.
Perquisites
In general, we believe that perquisites should not constitute a consequential portion of any
named executive officers compensation. As a result, no named executive officer received
perquisites in excess of $10,000.
Executive Severance Arrangements
We have entered into executive severance agreements with Messrs. Barnett, Dick, Klestinec and
ODonovan that specify payments in the event the executive officers employment is terminated after
a change in control. We believe that such executive severance agreements serve to assure the
stability and continuity of our executive officers upon the occurrence of any change in control
event, as well as to assure the effectiveness of existing retention and incentive features of the
Companys compensation program. See further disclosure below under Potential Payments Upon Change
of Control or Termination for more information.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to publicly
held companies for compensation in excess of $1 million in any taxable year paid to the chief
executive officer or the four next most highly compensated executive officers. However,
compensation in excess of $1 million is deductible if it meets the criteria for being performance
based within the meaning of Section 162(m). Our stock option awards satisfy the conditions for
being performance based under Section 162(m). Time-based restricted stock awards and cash
payments paid under our informal profit sharing plan do not currently satisfy the Section 162(m)
performance based conditions.
We generally endeavor to award compensation in a manner that satisfies the conditions for tax
deductibility. However, we will not necessarily limit executive compensation to amounts deductible
under Section 162(m), but rather intend to maintain the flexibility to structure our compensation
programs so as to best promote our interests and the interests of our stockholders.
Conclusion
Our compensation programs are designed and administered in a manner consistent with our
executive compensation philosophy and objectives. Our programs emphasize the retention of key
executives and appropriate rewards for results. Our Board monitors these programs in recognition
of the marketplace in which we compete for talent, and will continue to emphasize
pay-for-performance and equity based incentive programs that reward our named executive officers
for results that are consistent with our shareholders interests.
18
Compensation Committee Report
The Board of Directors has reviewed and discussed the foregoing Compensation Discussion and
Analysis with management. Based upon our review and discussion with management, we hereby
authorize the inclusion of the foregoing Compensation Discussion and Analysis in this proxy
statement and the Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with
the Securities and Exchange Commission.
Malcolm M. Prine
Ralph O. Hellmold
James F. Crowley
Thomas R. Cellitti
James L. Simonton
Kevin L. Barnett
19
Summary Compensation Table
The table below summarizes the total cash and non-cash compensation paid or earned by each
named executive officer for the fiscal years ended December 31, 2010, 2009 and 2008.
The base salaries of the named executive officers of the Company are typically reviewed
annually in December for the upcoming year by the Companys Board of Directors and adjusted as
appropriate, as described above in Compensation Discussion and Analysis. No adjustments were
made to base salaries in December 2008 or 2009 for calendar years 2009 and 2010 due to the economic
conditions. Additionally, in light of the economic conditions in 2009, each named executive
voluntarily took a 15% pay reduction during the second and third quarters of 2009. In December
2010, the Board adjusted base salaries for the executive officers effective January 1, 2011 as more
fully described above under Elements of Direct Compensation.
The Company has not entered into any employment agreements with any of the named executive
officers although the Company has entered into certain executive severance agreements as further
described below under Potential Payments upon Change in Control or Termination. Additional
information related to each component of compensation for each named executive officer is provided
above in the Compensation Discussion and Analysis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Non- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
Option |
|
|
Incentive Plan |
|
|
Compensation |
|
|
All Other |
|
|
|
|
Name and Principal |
|
|
|
|
|
Salary(1) |
|
|
Bonus |
|
|
Awards(2) |
|
|
Awards |
|
|
Compensation(3) |
|
|
Earnings |
|
|
Compensation(4) |
|
|
Total |
|
Position |
|
Year |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin L. Barnett |
|
|
2010 |
|
|
|
270,000 |
|
|
|
|
|
|
|
81,000 |
|
|
|
|
|
|
|
120,278 |
|
|
|
|
|
|
|
19,600 |
|
|
|
490,878 |
|
President and Chief |
|
|
2009 |
|
|
|
251,619 |
|
|
|
|
|
|
|
81,001 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,600 |
|
|
|
352,220 |
|
Executive Officer |
|
|
2008 |
|
|
|
249,231 |
|
|
|
|
|
|
|
69,988 |
|
|
|
|
|
|
|
187,463 |
|
|
|
|
|
|
|
18,840 |
|
|
|
525,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Klestinec
Vice President & |
|
|
2010 |
|
|
|
220,000 |
|
|
|
|
|
|
|
65,998 |
|
|
|
|
|
|
|
98,004 |
|
|
|
|
|
|
|
17,600 |
|
|
|
401,602 |
|
Chief Operating |
|
|
2009 |
|
|
|
205,023 |
|
|
|
|
|
|
|
65,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,002 |
|
|
|
288,024 |
|
Officer |
|
|
2008 |
|
|
|
206,154 |
|
|
|
|
|
|
|
44,373 |
|
|
|
|
|
|
|
155,062 |
|
|
|
|
|
|
|
16,850 |
|
|
|
422,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman F. Dick, Jr.
Vice President,
Secretary, |
|
|
2010 |
|
|
|
200,000 |
|
|
|
|
|
|
|
47,330 |
|
|
|
|
|
|
|
89,095 |
|
|
|
|
|
|
|
16,000 |
|
|
|
352,425 |
|
Treasurer and Chief |
|
|
2009 |
|
|
|
186,385 |
|
|
|
|
|
|
|
41,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,790 |
|
|
|
243,468 |
|
Financial Officer |
|
|
2008 |
|
|
|
189,615 |
|
|
|
|
|
|
|
36,795 |
|
|
|
|
|
|
|
142,622 |
|
|
|
|
|
|
|
15,775 |
|
|
|
384,807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrence J.
ODonovan |
|
|
2010 |
|
|
|
165,000 |
|
|
|
|
|
|
|
49,499 |
|
|
|
|
|
|
|
73,503 |
|
|
|
|
|
|
|
13,200 |
|
|
|
301,202 |
|
Vice President, |
|
|
2009 |
|
|
|
151,864 |
|
|
|
|
|
|
|
68,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,130 |
|
|
|
232,057 |
|
Marketing and Sales |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
In 2009 base salary for each named executive was $270,000 for Mr. Barnett, $220,000 for Mr.
Klestinec, $200,000 for Mr. Dick and $165,000 for Mr. ODonovan. However, actual amounts paid
in 2009 reflect a voluntary pay reduction of 15% for the second and third quarter of 2009 for
each named executive officer. |
|
(2) |
|
The amounts in Stock Awards reflect the aggregate fair value of performance-based restricted
stock awards based on the fair value on the date of grant, in accordance with FASB ASC Topic
718, excluding the effects of estimated forfeitures. Assumptions used in the calculation of
this amount are included in the footnote titled Stock Based Compensation to the Companys
audited financial statements for the years ended December 31, 2010, 2009 and 2008, included in
the Companys Annual Reports on Form 10-K as filed with the Securities and Exchange
Commission. |
20
|
|
|
(3) |
|
The amounts in Non-Equity Incentive Plan Compensation represent compensation paid to our
named executive officers under the Companys Profit Sharing Plan. Such compensation is paid
to the named executive officers based upon the Companys earnings levels for the fiscal year
in excess of a base threshold, as described in the Compensation Discussion and Analysis
section above. The amounts in this column were earned for the year ended December 31, 2010,
2009 and 2008 were paid to each named executive officer in the year following the year earned.
Each named executive officer received a portion of the executive officer profit sharing pool
based upon the ratio of their base salary each year to the total base salaries for all named
executive officers in the aggregate. For 2010 the executive officer profit sharing pool
totaled $380,880. In 2009 the profit sharing pool was zero as earnings did not exceed the
threshold. For 2008 the Executive Officer Profit sharing Pool totaled $485,147. |
|
(4) |
|
Includes contributions by the Company to its 401(k) plan for salaried employees. The Company
makes contributions to its 401(k) Plan in several ways. The Company makes a matching
contribution equal to 25% of the first 6% of earnings deferred by each participant to the
401(k) Plan, which includes all salary and wages that are subject to income tax withholding
(except for overtime and disqualifying dispositions of stock options). Until December 31,
2007 our matching contributions were invested automatically into our common stock. Effective
January 1, 2008 the 401(k) Plan was amended and matching contributions are no longer invested
in our common stock but are now invested ratably to the same funds elected by employees. In
addition, the Company makes an automatic employer retirement contribution equal to 3% of each
participants base salary. This contribution is made for all eligible employees, regardless
of whether they make any pre-tax contributions. Finally, if a participant is at least age 35,
we may make a retirement contribution based upon such participants earnings, which equals
1.5% of such participants earnings if such participant is age 35 to 44, and 3.5% of earnings
if such participant is age 45 or older. This contribution is normally made only if the
participant is employed on the last day of the year. Matching contributions for the fiscal
year ended December 31, 2010 were $3,675 for Mr. Barnett, $3,300 for Mr. Klestinec, $3,000 for
Mr. Dick and $2,475 for Mr. ODonovan. Retirement contributions during the fiscal year ended
December 31, 2010 were $15,925 for Mr. Barnett, $14,300 for Mr. Klestinec, $13,000 for Mr.
Dick and $10,725 for Mr. ODonovan. Matching contributions for the fiscal year ended December
31, 2009 were $3,675 for Mr. Barnett, $3,675 for Mr. Klestinec, $3,675 for Mr. Dick and $2,259
for Mr. ODonovan. Retirement contributions during the fiscal year ended December 31, 2009
were $15,925 for Mr. Barnett, $13,327 for Mr. Klestinec, $12,115 for Mr. Dick, and $9,871 for
Mr. ODonovan. Matching contributions for the fiscal year ended December 31, 2008 were $3,450
for Mr. Barnett, $3,450 for Mr. Klestinec, and $3,450 for Mr. Dick. Retirement contributions
during the fiscal year ended December 31, 2008 were $14,950 for Mr. Barnett, $13,400 for Mr.
Klestinec, and $12,325 for Mr. Dick. |
21
Grants of Plan-Based Awards
The following table summarizes the 2010 grants of equity and non-equity incentive plan based
awards to the named executive officers. All of these equity and non-equity incentive plan awards
were granted under the 2006 Core Molding Technologies, Inc. Long-Term Equity Incentive Plan and the
Core Molding Technologies, Inc. Profit Sharing Plan, as further described above in the
Compensation Discussion and Analysis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All |
|
|
All |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
Other |
|
|
|
|
|
|
Grant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
|
Option |
|
|
|
|
|
|
Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
|
Awards: |
|
|
|
|
|
|
Fair |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number |
|
|
Number |
|
|
Exercise |
|
|
Value of |
|
|
|
|
|
|
|
Estimated Future Payouts |
|
|
Estimated Future Payouts |
|
|
of |
|
|
of |
|
|
or Base |
|
|
Stock |
|
|
|
|
|
|
|
Under Non-Equity |
|
|
Under Equity |
|
|
Shares |
|
|
Shares |
|
|
Price of |
|
|
and |
|
|
|
|
|
|
|
Incentive Plan Awards ($)(1) |
|
|
Incentive Plan Awards (#) |
|
|
of Stock |
|
|
of Stock |
|
|
Option |
|
|
Option |
|
|
|
Grant |
|
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
or Units |
|
|
or Units |
|
|
Awards |
|
|
Awards |
|
Name |
|
Date |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
(#) |
|
|
(#) |
|
|
(#) |
|
|
(#) |
|
|
(#) |
|
|
($/Sh) |
|
|
($)(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin L. Barnett |
|
|
|
|
|
|
|
|
|
|
120,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/19/10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,577 |
|
|
|
|
|
|
|
|
|
|
|
81,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Klestinec |
|
|
|
|
|
|
|
|
|
|
98,004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/19/10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,692 |
|
|
|
|
|
|
|
|
|
|
|
65,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman F. Dick, Jr. |
|
|
|
|
|
|
|
|
|
|
89,095 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/19/10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,102 |
|
|
|
|
|
|
|
|
|
|
|
47,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrence J. ODonovan, Sr. |
|
|
|
|
|
|
|
|
|
|
73,503 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/19/10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,519 |
|
|
|
|
|
|
|
|
|
|
|
49,499 |
|
|
|
|
(1) |
|
Represents amounts awarded under the Profit Sharing Plan for 2010 performance, as set forth
in the Summary Compensation Table and further described above in Compensation Discussion and
Analysis. The maximum and minimum thresholds are not applicable to the Profit Sharing Plan.
Such compensation is paid to the named executive officers based upon the Companys earnings
levels for the fiscal year in excess of a base threshold, as described in the Compensation
Discussion and Analysis section above, rather than upon the date of grant. Thus, the amounts
in this column were earned for the year indicated and were paid out to the named executive in
the subsequent year. |
|
(2) |
|
The Board of Directors awarded restricted stock grants in 2010 in accordance with the
Companys Long Term Equity Incentive Plan. Restricted stock granted under the plan require
the individuals receiving the grants to acquire and maintain certain common stock ownership
thresholds and vest over three years or upon the date of the participants sixty-fifth
birthday. All shares were granted based on a share price of $5.20 on May 19, 2010. |
22
Outstanding Equity Awards at December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
|
Plan |
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan |
|
|
Awards: |
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
|
Market or |
|
|
|
|
|
|
|
|
|
|
|
Plan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market |
|
|
Number of |
|
|
Payout |
|
|
|
|
|
|
|
|
|
|
|
Awards: |
|
|
|
|
|
|
|
|
|
|
Number |
|
|
Value of |
|
|
Unearned |
|
|
Value of |
|
|
|
Number of |
|
|
Number of |
|
|
Number of |
|
|
|
|
|
|
|
|
|
|
of Shares |
|
|
Shares or |
|
|
Shares, |
|
|
Unearned |
|
|
|
Securities |
|
|
Securities |
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
or Units |
|
|
Units of |
|
|
Units or |
|
|
Shares, |
|
|
|
Underlying |
|
|
Underlying |
|
|
Underlying |
|
|
|
|
|
|
|
|
|
|
of Stock |
|
|
Stock |
|
|
Other |
|
|
Units or |
|
|
|
Unexercised |
|
|
Unexercised |
|
|
Unexercised |
|
|
Option |
|
|
|
|
|
|
That |
|
|
That |
|
|
Rights |
|
|
Other Rights |
|
|
|
Options |
|
|
Options |
|
|
Unearned |
|
|
Exercise |
|
|
Option |
|
|
Have Not |
|
|
Have Not |
|
|
That Have |
|
|
That Have |
|
|
|
(#) |
|
|
(#) |
|
|
Options |
|
|
Price |
|
|
Expiration |
|
|
Vested |
|
|
Vested |
|
|
Not Vested |
|
|
Not Vested |
|
Name |
|
Exercisable |
|
|
Unexercisable(1) |
|
|
(#) |
|
|
($) |
|
|
Date |
|
|
(#)(2) |
|
|
($)(3) |
|
|
(#) |
|
|
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin L. Barnett |
|
|
75,000 |
|
|
|
|
|
|
|
|
|
|
|
3.21 |
|
|
|
02/02/2014 |
|
|
|
50,546 |
|
|
|
291,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Klestinec |
|
|
92,000 |
|
|
|
|
|
|
|
|
|
|
|
3.21 |
|
|
|
02/02/2014 |
|
|
|
31,989 |
|
|
|
184,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman F. Dick, Jr. |
|
|
19,900 |
|
|
|
|
|
|
|
|
|
|
|
3.21 |
|
|
|
02/02/2014 |
|
|
|
21,605 |
|
|
|
124,445 |
|
|
|
|
|
|
|
|
|
|
|
|
22,800 |
|
|
|
25,800 |
|
|
|
|
|
|
|
2.75 |
|
|
|
10/21/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrence J.
ODonovan, Sr. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,106 |
|
|
|
207,971 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Dicks grant of options vest 5,700 shares each October 21, 2011 through 2013 and 8,700
shares vesting April 21, 2014. |
|
(2) |
|
All grants vest one-third each year after they are issued assuming required stock ownership
thresholds are met, as further described above in Compensation Discussion and Analysis. As
of December 31, 2010, Mr. Barnett, Mr. Klestinec and Mr. Dick have met the ownership
requirements required by the plan. |
|
(3) |
|
The market value of the restricted shares is based on the closing sales price of the
Companys common stock on the NYSE AMEX as of the last business day of its fiscal year ended
December 31, 2010, which was $5.76 per share. |
23
The following table shows the number of shares of common stock acquired by the named executive
officers upon the exercise of options and the vesting of restricted stock during 2010:
Option Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards |
|
|
|
Number of Shares |
|
|
Value Realized on |
|
|
Number of Shares |
|
|
Value Realized on |
|
|
|
Acquired on Exercise |
|
|
Exercise |
|
|
Acquired on Vesting |
|
|
Vesting |
|
Name |
|
(#) |
|
|
($)(1) |
|
|
(#) |
|
|
($)(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin L. Barnett |
|
|
|
|
|
|
|
|
|
|
16,440 |
|
|
|
84,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Klestinec |
|
|
|
|
|
|
|
|
|
|
12,963 |
|
|
|
67,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman F. Dick, Jr. |
|
|
6,500 |
|
|
|
7,605 |
|
|
|
17,995 |
|
|
|
92,095 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrence J. ODonovan, Sr. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Value represents the difference between the exercise price and closing price stock
price on the date exercised, multiplied by the number of shares exercised. Shares are
still held by Mr. Dick. |
|
(2) |
|
Calculated using the average of the high and low stock selling price on the date shares
vested. |
Potential Payments upon Change in Control or Termination
Payments upon a Termination in connection with a Change in Control
We have entered into an amended and restated executive severance agreement with each of our
named executive officers that provides for certain benefits upon the occurrence of a change in
control. The following describes and quantifies the payments that each named executive officer
would receive if we had a change in control and such named executive officers employment was
terminated following the change in control. The summaries assume that the change in control
occurred on December 31, 2010 and the relevant stock price is the closing market price of our
common stock on the NYSE AMEX on December 31, 2010, which was $5.76.
Under each executive severance agreement, upon a change in control, each named executive
officer shall be entitled to continue to receive his then-current base salary for the remainder of
the term of the agreement, as may be extended from time to time, as well as continuing to receive
all benefits under any plans or programs in which the named executive officer then participates
(including our annual cash profit sharing plan, long-term equity incentive plan, stock purchase
plan, 401(k) plan, vacation, dental, life, health and accident, disability or deferred compensation
plans). A change in control is defined as any of the following (a) the consummation of a
reorganization, merger or other consolidation or sale of substantially all of our assets, resulting
in less than 50% of the combined voting power of such resulting entity being held by the holders of
our voting stock immediately prior to such transaction; (b) the filing of a beneficial ownership
report disclosing that any person has become a beneficial owner of securities representing 50% or
more of our voting stock; or (c) over a period of 2 consecutive years, the members of the board of
directors in place at beginning of any such period cease to constitute a majority of the board,
subject to certain circumstances.
In addition, if within the two-year period following a change in control, we terminate the
employment of a named executive officer other than for cause (as described in the agreement) or
for death or disability, or the named executive officer terminates his employment for good reason
(as described in the agreement), each named executive officer shall be entitled to the following:
24
|
|
|
Full base salary earned through date of termination at the rate then in effect at the
time notice for termination is given; |
|
|
|
In lieu of any further salary payments for periods subsequent to the date of
termination, a lump-sum payment equal to 2.99 times the sum of (a) the average of base
salary as reported on such named executive officers W-2 form for the 5 calendar years
prior to the year in which termination occurs and (b) the average of the cash profit
sharing incentives earned by the named executive officer as reported on the named executive
officers W-2 form for the 5 calendar years prior to the year in which such termination
occurs; provided, however that the sum of the amounts in clauses (a) and (b) above shall
not exceed 2.99 times of the base amount as defined in Section 280G(b)(3) of the Internal
Revenue Code of 1986, or any successor provision; and |
|
|
|
The immediate vesting of all unvested stock options, stock appreciation rights and
restricted stock awards. |
The payments that would have been made to the named executive officers, assuming a change in
control and related termination occurred on December 31, 2010, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of |
|
|
Value on |
|
|
|
|
|
|
|
|
|
|
Accelerated |
|
|
Accelerated |
|
|
Total Value of |
|
|
|
Lump Sum |
|
|
Stock Option |
|
|
Restricted Stock |
|
|
Change In Control |
|
|
|
Payment |
|
|
Exercise |
|
|
Vesting |
|
|
Severance |
|
Name |
|
($) |
|
|
($)(1) |
|
|
($)(2) |
|
|
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin L. Barnett |
|
|
1,094,052 |
|
|
|
191,250 |
|
|
|
291,145 |
|
|
|
1,576,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Klestinec |
|
|
927,518 |
|
|
|
234,600 |
|
|
|
184,257 |
|
|
|
1,346,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herman F. Dick, Jr. |
|
|
841,262 |
|
|
|
197,031 |
|
|
|
124,445 |
|
|
|
1,162,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrence J. ODonovan, Sr. |
|
|
473,712 |
|
|
|
|
|
|
|
207,971 |
|
|
|
681,683 |
|
|
|
|
(1) |
|
The amounts in Value of Accelerated Stock Option Exercise represent the value
between the closing stock price on December 31, 2010 and the strike price for all
vested and unvested in the money stock options. |
|
(2) |
|
The amounts in Value of Accelerated Restricted Stock Vesting represent the
value of all unvested restricted stock at December 31, 2010. |
25
Payments upon a Termination not in connection with a Change in Control
Restricted Stock. Assuming the employment of a named executive officer was terminated
for death, disability, or retirement at age 65 as of December 31, 2010, each named executive
officer would be entitled, under the 2006 Plan, to the amounts set forth under Value of
Accelerated Restricted Stock Vesting in the table above. All named executive officers who
terminate for any reason other than death, disability or retirement at age 65 shall forfeit all
rights to any unvested restricted stock awards.
Stock Options. Assuming we terminated the employment of a named executive officer
for any reason as of December 31, 2010, each named executive officer would be able to exercise any
vested stock option awards but shall forfeit all rights to any unvested stock option awards.
26
DIRECTOR COMPENSATION
The Company uses a combination of cash and equity-based incentive awards to attract and retain
qualified candidates to serve on the Board of Directors. The Company from time to time reviews the
adequacy and competitiveness of the amount of the annual directors fee, committee fees and meeting
attendance fees and makes adjustments as it deems appropriate. As previously noted, in November
2010, the Board engaged Mathews, Young -Management Consulting to complete a comprehensive
compensation survey, which included peer group analysis of non-employee director compensation. In
December 2010 the Board of Directors reviewed this survey informations and adjusted director fees
for 2011. All committee fees and meeting attendance fees remained the same. Only non-employee
directors receive director compensation.
During 2010, each non-employee director of the Company, other than Mr. Prine, receives a
directors fee of $3,500 per quarter. Mr. Prine receives a directors fee of $13,000 per quarter
to reflect his role as chairman. Mr. Crowley receives an additional $1,000 fee per quarter, to
reflect his role as audit committee chairman.
Each non-employee director receives a $1,000 fee for each regularly scheduled board meeting
that they were in attendance and each audit committee member receives a $1,000 fee for each audit
committee meeting that they were in attendance.
Beginning in 2011, each non-employee director of the Company, other than Mr. Prine, receives a
directors fee of $5,750 per quarter. Mr. Prine receives a directors fee of $8,500 per quarter to
reflect his role as chairman.
In May 2010, the Board granted our non-employee directors shares of restricted common stock
pursuant to the 2006 Plan. Each restricted stock grant vests in 3 equal installments over the next
three (3) years following the date of the grant, with all restricted stock grants being fully time
vested upon the date of the recipients 65th birthday and accelerated vesting upon
death, disability or change-in-control (as described in the 2006 Plan). Awards made to directors
(excluding Mr. Barnett who does not receive a separate restricted stock award in his capacity as a
director) in 2010 were as follows:
|
|
|
|
|
|
|
2010 Restricted |
|
Name |
|
Stock Awards (#) |
|
|
|
|
|
|
Thomas R. Cellitti |
|
|
1,719 |
|
|
|
|
|
|
James F. Crowley |
|
|
1,719 |
|
|
|
|
|
|
Ralph O. Hellmold |
|
|
1,719 |
|
|
|
|
|
|
Malcolm M. Prine |
|
|
3,438 |
|
|
|
|
|
|
James L. Simonton |
|
|
1,719 |
|
The restricted stock grants also contained stock ownership vesting requirements, such that
each restricted stock grant does not vest until the director owns and retains shares of our common
stock equal in value to 100% of the average annual director fee. All non employee directors have
met this stock ownership requirement. The restricted stock grants did consider and was adjusted
accordingly for any unvested options that existed.
27
The table below summarizes the compensation paid by the Company to non-employee directors for
the fiscal year ended December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Pension |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified |
|
|
|
|
|
|
|
|
|
Fees Earned |
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
|
Deferred |
|
|
|
|
|
|
|
|
|
or |
|
|
Stock |
|
|
Options |
|
|
Incentive Plan |
|
|
Compensation |
|
|
All Other |
|
|
|
|
|
|
Paid in Cash |
|
|
Awards |
|
|
Awards |
|
|
Compensation |
|
|
Earnings |
|
|
Compensation |
|
|
Total |
|
Name(1) |
|
($) |
|
|
($)(2) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
($) |
|
Thomas R. Cellitti |
|
|
19,000 |
|
|
|
8,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James F. Crowley |
|
|
27,000 |
|
|
|
8,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ralph O. Hellmold |
|
|
23,000 |
|
|
|
8,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Malcolm M. Prine |
|
|
61,000 |
|
|
|
17,878 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
78,878 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James L. Simonton |
|
|
14,500 |
|
|
|
8,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,439 |
|
|
|
|
(1) |
|
Kevin L. Barnett, the Companys President and Chief Executive Officer during the fiscal year
ended December 31, 2010 is not included in this table, as he was an employee of the Company and
thus received no compensation for his services as a director. The compensation received by Mr.
Barnett as an employee of the Company is shown above in the Summary Compensation Table. |
|
(2) |
|
The amounts in Stock Awards reflect the aggregate fair value of the performance-based
restricted stock awards based on the fair value on the date of grant, in accordance with FASB ASC
Topic 718, excluding the effects of estimated forfeitures. Assumptions used in the calculation of
this amount are included in the footnote titled Stock Based Compensation to the Companys audited
financial statements for the year ended December 31, 2010, as included in the Companys Annual
Report on Form 10-K filed with the Securities and Exchange Commission on March 29, 2011. |
28
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors (the Audit Committee) is composed of three
directors, none of whom is an employee of the Company. The Audit Committee is governed by a
charter as reassessed and approved by the Board of Directors on March 17, 2011. In accordance with
its written charter, the Audit Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and financial reporting
practices of the Company.
During the year ended December 31, 2010, the Audit Committee met four times. The Audit
Committee discussed the interim financial information contained in quarterly earnings announcements
with both management and the independent registered public accounting firm prior to the public
release of quarterly information.
In discharging its oversight responsibility as to the audit process, the Audit Committee
obtained from Crowe Horwath LLP a formal written statement describing all relationships between
Crowe Horwath LLP and the Company that might bear on Crowe Horwath LLPs independence consistent
with Independence Standards Board Standard No. 1 Independence Discussions with Audit Committees,
discussed with Crowe Horwath LLP any relationships that may impact their objectivity and
independence and satisfied itself as to their independence. The Audit Committee also discussed
with management and Crowe Horwath LLP the quality and adequacy of the Companys internal controls.
The Audit Committee reviewed with Crowe Horwath LLP their audit scope and their identification of
audit risks.
The Audit Committee discussed and reviewed with Crowe Horwath LLP all communications required
by auditing standards generally accepted in the United States of America, including those matters
required by Statement on Auditing Standards No. 114, as amended The Auditors Communication with
those Charged with Governance and, with and without management present, discussed and reviewed the
results of Crowe Horwaths examination of the financial statements. Management also discussed with
Crowe Horwath LLP those matters required to be discussed under the Securities and Exchange
Commission and U.S. Public Company Accounting Oversight Board.
The Audit Committee reviewed the audited consolidated financial statements of the Company as
of and for the year ended December 31, 2010, with management and Crowe Horwath LLP. Management has
the responsibility for the preparation of the Companys financial statements and Crowe Horwath LLP
has the responsibility for the examination of those statements.
Based on the above-mentioned review and discussions with management and the independent
auditors, the Audit Committee recommended to the Board that audited consolidated financial
statements be included in its Annual Report on Form 10-K for the fiscal year ended December 31,
2010, for filing with the Securities and Exchange Commission.
Audit Committee
James F. Crowley, Chairman
Malcolm M. Prine
Ralph O. Hellmold
29
AUDIT FEES
The Audit Committee engaged Crowe Horwath as it independent registered accounting firm on
August 17, 2009. The aggregate fees paid or accrued to Crowe Horwath for professional services
rendered for the audit of the Companys annual financial statements and the review of financial
statements included in Core Molding Technologies Forms 10-Q were $122,150 and $105,830 for the
years ended December 31, 2010 and 2009, respectively.
AUDIT RELATED FEES
The aggregate fees billed to the Company for assurance related services by Crowe Horwath for
fiscal years ended December 31, 2010 and 2009 were $47,500 and $0, respectively. The services
rendered by Crowe Horwath in 2010 were related to research and analysis related to post-retirement
health and life insurance plan accounting relating to a curtailment, negative plan amendment and
partial settlement of that liability as well as the related impact caused by the passage of the
Patient Protection and Affordability Care Act.
ALL OTHER FEES
The aggregate fees billed for professional services rendered by Crowe Horwath for all other
products and services provided for the fiscal years ended December 31, 2010 and 2009 were $3,150
and $0, respectively. The services rendered by Crowe Horwath in 2010 relate to assistance in
conducting an hourly wage and benefit survey. There were no fees billed to the Company for tax
related services by Crowe Horwath for the fiscal years ended December 31, 2010 and 2009.
30
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
On October 8, 1996, RYMAC Mortgage Investment Corporation, a Maryland corporation, formed the
Company as a wholly owned subsidiary under the laws of the State of Delaware. RYMAC incorporated
the Company in order to acquire substantially all of the assets of the Columbus Plastics operating
unit of Navistar, Inc.
Pursuant to the terms of the asset purchase agreement with Navistar (formerly International
Truck and Engine Corporation), the Company acquired substantially all of the assets and liabilities
of Columbus Plastics on December 31, 1996. As consideration, Navistar received a secured note in
the principal amount of $25,504,000. Navistar also received 4,264,000 shares of newly issued
common stock of the Company, representing approximately 43% of the total number of shares of common
stock issued and outstanding at the time of the acquisition. The principal amount of the secured
note and the number of shares of common stock received by Navistar were subject to adjustment
pursuant to the terms of the asset purchase agreement.
Navistars acquisition of common stock of the Company made it the largest stockholder of the
Company. The certificate of incorporation of the Company protects this position by limiting the
possibility of a change in ownership or control. For instance, the certificate of incorporation
requires a super-majority vote to remove directors or to approve certain extraordinary corporate
transactions, including mergers and acquisitions. The certificate of incorporation also restricts
transfers of securities, which could result in a change of ownership of a specified percentage in
the Company. This restrictive transfer provision is discussed below under the heading Limitation
on Ownership.
On July 18, 2007, the Company entered into a stock repurchase agreement with Navistar,
pursuant to which the Company repurchased 3,600,000 shares of the Companys common stock, from
Navistar in a privately negotiated transaction at $7.25 per share, for a total purchase price of
$26,100,000. Navistar continues to be a significant stockholder of the Companys common stock with
664,000 shares, or approximately 9.3% of the shares outstanding after the repurchase.
Navistar is also the Companys largest customer, accounting for approximately 55% of the
Companys 2010 sales. Sales to Navistar are made on substantially the same terms as any significant
customer that is not affiliated with the Company. The terms to Navistar are negotiated on an arms
length basis, and are consistent with terms that are made with other similar significant customers.
Other than the transaction described above there has not been any transaction or series of
similar transactions since 2007 to which we were or will be a party in which the amount involved
exceeded or will exceed $120,000 and in which any Board member, executive officer, holder of five
percent or more of any class of our capital stock or any member of their immediate family had or
will have a direct or indirect material interest (as defined in Item 404 of Regulation S-K). It is
our internal policy that all related party transactions required to be disclosed pursuant to Item
404 of Regulation S-K under the Securities Exchange Act of 1934, as amended, be reviewed and
approved by the Board of Directors. Under Item 404 of Regulation S-K, this requirement would
generally apply to transactions exceeding $120,000 between us and any related persons.
Stockholder Rights Agreement
On July 16, 2007, the Board of Directors approved a Shareholders Rights Plan (the Plan) in
conjunction with the approval of the repurchase of shares of stock from Navistar. The Plan was
implemented to protect the interests of the Companys stockholders by encouraging potential buyers
to negotiate directly with the Board prior to attempting a takeover. Under the Plan, each
shareholder received a dividend of one right per share of common stock of the Company owned on the
record date, July 18, 2007. The rights will not initially be exercisable until, subject to action
by the Board of Directors, a person acquires 15% or more of the voting stock without approval of
the Board. If the rights become exercisable, all holders except the party triggering the rights
shall be entitled to purchase shares of the Company at a discount. Each right entitles the
registered holder to purchase from the Company a unit consisting of one one-thousandth of a share
of Series A Junior Participating Preferred Stock, par value $0.01 per share. In connection with the
adoption of the stockholder rights agreement, on July 18, 2007, the Company filed a Certificate of
Designations of Series A Junior Participating Preferred Stock with the Secretary of State of the
State of Delaware.
31
LIMITATION ON OWNERSHIP
The certificate of incorporation of the Company contains a prohibited transfer provision,
which was designed at the time of the merger and acquisition to help assure the continued
availability of the Companys substantial net operating losses by seeking to prevent an ownership
change in the Company.
The prohibited transfer provision prohibits a transfer of stock of the Company if the transfer
will cause the transferee to hold a prohibited ownership percentage or if the transferees
ownership percentage already exceeds the prohibited ownership percentage. The prohibited transfer
provision defines stock as including all classes of stock, options to purchase stock or any other
interest in the Company that could be treated as stock. A prohibited ownership percentage
generally means direct and indirect ownership of 4.5% or more of the stock or any other percentage
that would cause a transferee to be considered a five percent stockholder under the federal income
tax rules referenced in the certificate of incorporation.
The prohibited transfer provision did not apply to the issuance of stock to Navistar pursuant
to the asset purchase agreement and will not restrict certain transfers that are made in compliance
with exceptions set forth in the prohibited transfer provision.
In addition, the Companys Certificate of Incorporation and Bylaws contain certain provisions
designed to discourage specific types of transactions involving an actual or threatened change of
control of the Company. These provisions, which are designed to make it more difficult to change
majority control of the Board of Directors without its consent, include the following:
Removal of Directors This provision provides that a director of the Company may be removed with or without cause only upon the vote of
the holders of at least 80% of the voting power of the outstanding shares of capital stock entitled to vote generally in the election of
directors.
Supermajority Approval This provision requires that a merger and certain other transactions
(as outlined in the Certificate of Incorporation) be approved by the affirmative vote of the holders of at least 66 2/3% of the
then outstanding shares of the Companys common stock. Such affirmative vote is required notwithstanding the fact that no vote may
be required, or that a lesser percentage may be specified by law.
Amendments This provision requires that any amendment to the provisions relating to the removal of
directors be approved by the holders of at least 80% of the then outstanding shares of voting stock, and any
amendment to provisions requiring the approval of the holders of at least 66 2/3% of the then outstanding
shares of voting stock be approved by the holders of at least 66 2/3% of the then outstanding shares of
voting stock.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Composition of the Board of Directors
The Board of Directors currently consists of six (6) members. At the annual meeting, the
stockholders will elect six (6) directors to hold office until the election and qualification of
their successors or until their earlier resignation, death, disqualification or removal from
office.
The intention of the proxies is to vote the shares of common stock they represent for the
election of Kevin L. Barnett, Thomas R. Cellitti, James F. Crowley, Ralph O. Hellmold, Malcolm M.
Prine and James L. Simonton, unless the proxy is marked to indicate that such authorization is
expressly withheld. Each nominee is currently a member of the Board of Directors. All of the
nominees have stated their willingness to serve and the Company is not aware of any reason that
would cause any of the nominees to be unavailable to serve as a director should they be elected at
the annual meeting. If any of the nominees should become unavailable for election, the proxies may
exercise discretionary authority to vote for a substitute nominee proposed by the Board of
Directors. Information
32
with respect to the background and experience of each of the six nominees currently serving on
the Board of Directors is set forth above under the heading Directors and Executive Officers of
the Company.
Under Delaware law and the Bylaws of the Company, the stockholders will elect as directors the
six (6) nominees receiving the greatest number of votes. The Company will count shares of common
stock as to which voting authority is withheld for quorum purposes but will not count those shares
toward the election of directors or toward the election of individual nominees specified in the
form of proxy.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MESSRS. BARNETT, CELLITTI, CROWLEY,
HELLMOLD, PRINE AND SIMONTON.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors has appointed the firm of Crowe Horwath to audit the financial
statements of the Company for the fiscal year ending December 31, 2011. The Company expects a
representative of Crowe Horwath to attend the annual meeting. The Company will provide the
representative with an opportunity to make a statement if he or she desires to do so. The Company
expects that the representative will be available to respond to appropriate questions.
The Company is presenting the appointment of Crowe Horwath as independent registered public
accounting firm for ratification at the annual meeting. While ratification by stockholders of this
appointment is not required by law or the Certificate of Incorporation or Bylaws of the Company,
the Board believes that such ratification is desirable. In the event this appointment is not
ratified by a majority vote of stockholders, the Board of Directors will consider that fact when it
appoints an independent registered public accounting firm for the next fiscal year. The Board has
adopted policies requiring the Audit Committee to pre-approve all audit and non-audit services
provided by the Companys independent registered public accounting firm. All auditing services and
non-audit services provided by Crowe Horwath for the year ended December 31, 2010 have been
approved by the Audit Committee.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE APPOINTMENT OF CROWE
HORWATH.
OTHER MATTERS
The management of the Company and the Board of Directors of the Company know of no matters to
be brought before the annual meeting other than as set forth above. If, however, any other matters
are properly presented to the stockholders for action, it is the intention of the persons named in
the proxy to vote at their discretion on all matters on which the shares of common stock
represented by such proxies are entitled to vote.
|
|
|
|
|
BY ORDER OF THE BOARD OF DIRECTORS |
|
|
|
|
|
Malcolm M. Prine |
April 11, 2011
|
|
Chairman of the Board |
33
CORE MOLDING TECHNOLOGIES, INC.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS
For The Annual Meeting of Stockholders
To be held on May 11, 2011
The undersigned stockholder appoints Kevin L.
Barnett and Herman F. Dick, Jr., as proxies with full power of substitution, to vote the shares of
voting securities of Core Molding Technologies, Inc. (the Company) that the undersigned is entitled
to vote at the Annual Meeting of Stockholders to be held at the Companys corporate headquarters,
800 Manor Park Drive, Columbus, Ohio 43228, on May 11, 2011, at 9:00 a.m., Eastern Daylight Savings Time,
and at any adjournments thereof, upon matters properly coming before the meeting, as set forth in the Notice
of Annual Meeting of Stockholders and Proxy Statement, both of which have been received by the undersigned.
Without otherwise limiting the general authorization given hereby, such proxies are instructed to vote as follows:
(Continued and to
be signed on the reverse side)
ANNUAL MEETING OF STOCKHOLDERS OF
CORE MOLDING TECHNOLOGIES, INC.
May 11, 2011
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, Annual Report, Proxy Statement and Proxy Card
are available at http://colsec.coremt.com
Please sign, date and mail
your proxy card in the
envelope
provided as soon
as possible.
â Please detach along perforated line and mail
in the envelope
provided. â
|
|
|
|
|
n |
20630000000000000000 6
|
|
051111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE x
|
|
|
|
|
|
(1) |
|
Election of Directors |
|
|
|
|
|
|
|
|
FOR |
|
AGAINST
|
|
ABSTAIN |
|
|
|
(2) |
|
To ratify the appointment of Crowe Horwath, LLP as
the independent registered public accounting firm for the Company for
the year ending December 31, 2011.
|
o |
|
o |
|
o |
|
|
|
|
NOMINEES: |
|
|
|
|
|
|
|
|
o
o
o |
|
FOR ALL NOMINEES
WITHHOLD AUTHORITY FOR ALL
NOMINEES
FOR ALL EXCEPT (See instructions below) |
|
O |
|
KEVIN L. BARNETT
|
|
|
|
|
|
|
|
O |
|
THOMAS R. CELLITTI
|
|
|
|
|
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO
CONTRARY DIRECTION IS INDICATED, WILL BE VOTED FOR THE PROPOSALS INDICATED ON THIS
CARD AND AS SUCH PROXIES DEEM ADVISABLE WITH DISCRETIONARY AUTHORITY ON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR ADJOURNMENTS
THEREOF.
|
|
|
O O O
O |
|
JAMES F. CROWLEY
RALPH O. HELLMOLD
MALCOLM M. PRINE JAMES L. SIMONTON
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTION: To withhold authority to vote
for any individual nominee(s), mark FOR ALL EXCEPT and fill in
the circle next to each nominee you wish to withhold, as shown
here: l |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To change the address on your account, please check the
box at right and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the account may not
be submitted via this method. |
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of
Stockholder |
|
Date: |
|
Signature of Stockholder |
|
Date: |
|
|
|
|
Note: |
|
Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized
person. |
n
n