def14a
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. )
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Filed by the Registrant þ |
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Filed by a Party other than the Registrant o |
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Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Section 240.14a-12 |
Intermec, 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)(4) 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.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee
was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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Time and Date |
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10:00 a.m. Pacific time, on Friday, May 23, 2008 |
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Place |
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Intermec Headquarters, 6001 36th Avenue West, Everett,
Washington
98203-1264 |
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Items of Business |
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To elect eight directors for a term expiring at the
2009 Annual Meeting of Stockholders or until their successors
are elected and qualified.
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To vote on an advisory proposal to ratify the
appointment of Deloitte & Touche LLP as the
Companys independent registered public accounting firm for
2008.
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To approve the Intermec, Inc. 2008 Employee Stock
Purchase Plan.
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To approve the Intermec, Inc. 2008 Omnibus Incentive
Plan.
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To transact such other business as may properly come
before the meeting or any postponement or adjournment thereof.
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Record Date |
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You are entitled to vote if you were a stockholder as of the
close of business on March 24, 2008. |
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Voting |
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We urge you to read this proxy statement and vote your shares
promptly, whether or not you expect to attend the meeting in
person. You can vote your shares by proxy over the Internet or
by telephone. You can also vote by proxy if you complete, sign
and date your voting instruction form and return it by mail (if
you are a beneficial owner) or if you request a printed proxy
card to complete, sign and return by mail (if you are a
stockholder of record). |
By order of the Board of Directors,
Janis L. Harwell
Senior Vice President, General Counsel and Corporate Secretary
Everett, Washington
April 11, 2008
TABLE OF
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A-1
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B-1
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back cover
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Intermec,
Inc.
6001 36th Avenue West
Everett, Washington
98203-1264
425.348.2600
PROXY
STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 23, 2008
QUESTIONS
AND ANSWERS ABOUT
THE PROXY MATERIALS AND THE ANNUAL MEETING
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1.
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Why am I
receiving these materials?
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We have made these materials available to you on the Internet
or, upon your request, have delivered printed copies of these
materials to you by mail because our Board of Directors, which
we refer to as our Board, is soliciting your proxy
to vote your shares at the Annual Meeting of Stockholders, (the
Annual Meeting or 2008 Annual Meeting)
to be held at 10:00 a.m., Pacific time, on May 23,
2008, at our headquarters, 6001 36th Avenue West, Everett,
Washington
98203-1264.
This proxy statement provides information that we are required
to provide you under the rules of the Securities and Exchange
Commission (SEC) to assist you in voting your shares.
On January 1, 2006, we changed our name to Intermec, Inc.
and our ticker symbol on the New York Stock Exchange
(NYSE) to IN. Before 2006, we were named
UNOVA, Inc. The change in our name did not affect
your ownership of shares in the company. If your ownership of
our stock is evidenced by certificates bearing the name
UNOVA, Inc., you own Intermec, Inc. shares.
Throughout this proxy statement, we refer to the company as
Intermec, including for periods prior to the name change, or as
the Company.
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3.
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Why did I
receive a one-page notice in the mail regarding the Internet
availability of proxy materials this year instead of a full set
of proxy materials?
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As permitted by the new rules recently adopted by the SEC, we
have elected to provide access to this proxy statement and our
2007 Report to Stockholders over the Internet. Accordingly, we
sent a Notice of Internet Availability of Proxy Materials (the
Notice of Internet Availability) to our stockholders
of record and beneficial owners, which contained instructions on
how to access this proxy statement and our 2007 Report to
Stockholders and how to vote.
Intermec expects to mail the Notice of Internet Availability to
stockholders on or about April 11, 2008. If you receive a
Notice of Internet Availability, you will not receive a printed
copy of the proxy materials, unless you specifically request
this. If you would like to receive a printed copy of our proxy
materials, you should follow the instructions for requesting
such materials included in the Notice of Internet Availability.
Most stockholders can elect to view future proxy materials via
email instead of receiving paper copies in the mail. Please see
the information included in the Notice of Internet Availability.
If you choose to receive future proxy materials by email, you
will receive an email next year with instructions containing a
link to our proxy materials and a link to the proxy voting
website. Your election to receive proxy materials by email will
remain in effect until you terminate it.
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4.
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How can I
obtain Intermecs 2007 Annual Report on
Form 10-K?
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The 2007 Annual Report on
Form 10-K
(including exhibits), as amended, which we refer to as our
Form 10-K,
is available at the following website
http://www.intermec.com/about_us/investor_relations/
compliance/index.aspx. Stockholders may request a free copy
of our
Form 10-K
by contacting Investor Relations at the address provided
under the caption Corporate Governance
Availability of Information and Communications with the
Board. We will furnish any exhibit to our
Form 10-K
if specifically requested.
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5.
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What
items of business will be voted on at the Annual
Meeting?
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(1) The election of eight directors, each for a one-year
term expiring at the annual meeting of stockholders to be held
in 2009 (the 2009 Annual Meeting) or until their
successors are elected and qualified;
(2) An advisory management proposal to ratify the
appointment of Deloitte & Touche LLP as our
independent registered public accounting firm for 2008;
(3) Approval of the Intermec, Inc. 2008 Employee Stock
Purchase Plan; and
(4) Approval of the Intermec, Inc. 2008 Omnibus Incentive
Plan.
We will also consider any other business that is properly
brought before the Annual Meeting.
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6.
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How does
the Board recommend I vote?
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Our Board recommends that you vote
for each of
the director nominees and
for the
management proposals to ratify the appointment of
Deloitte & Touche LLP as our independent registered
public accounting firm for 2008, to approve the Intermec, Inc.
2008 Employee Stock Purchase Plan, and to approve the Intermec,
Inc. 2008 Omnibus Incentive Plan.
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7.
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What
shares can I vote?
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Intermecs only class of stock outstanding is common stock,
par value $.01 per share (common stock). Each share
of common stock outstanding as of the close of business Eastern
time on the record date, March 24, 2008, is entitled to one
vote on all items of business at the Annual Meeting. You may
vote all shares you owned as of the close of business Eastern
time on the record date, which may be (1) shares held
directly in your name as the stockholder of record or
(2) shares held for you as beneficial owner through a
broker, trustee or other nominee, such as a bank, including
shares purchased through our Employee Stock Purchase Plan. On
the record date, there were 61,490,337 shares of common
stock outstanding and entitled to vote. There were 11,344
stockholders of record on the record date and approximately
23,856 beneficial owners. The last sale price of the common
stock for that date, as reported in The Wall Street
Journal, was $23.11.
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8.
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What is
the difference between holding shares as a stockholder of record
and as a beneficial owner?
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Most stockholders hold their shares through a broker, trustee or
other nominee (such as a bank) rather than directly in their own
names. As summarized below, there are some distinctions between
shares held of record and those owned beneficially.
Stockholder of Record. If your shares are
registered directly in your name with our transfer agent, Mellon
Investor Services, you are considered to be, with respect to
those shares, a stockholder of record, and the Notice of
Internet Availability has been sent, and, if specifically
requested, printed copies of these proxy materials will be sent,
directly to you by Intermec. You may have certificates for those
shares, or they may be registered in book-entry form. As the
stockholder of record, you have the right to grant your voting
proxy directly to our proxy holders or to vote in person at the
meeting. We have provided instructions on voting and granting
your voting proxy in the Notice of Internet Availability, and if
specifically requested, we will also send a printed proxy card
for your use.
Beneficial Owner. If your shares are held in a
brokerage account or by a trustee or other nominee, you are
considered to be the beneficial owner of shares held in street
name, and these proxy materials are being forwarded to you
together with a voting instruction form by the broker, trustee
or nominee, or an agent hired by the broker, trustee or nominee.
As a beneficial owner, you have the right to direct your broker,
trustee or nominee on how to vote, and you are also invited to
attend the Annual Meeting. You will be asked to show
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some evidence of your ownership (for example, on a brokerage
statement) to be admitted to the Annual Meeting.
Because a beneficial owner is not the stockholder of record, you
may not vote these shares directly at the meeting unless you
obtain a legal proxy from the broker, trustee or
nominee that holds your shares, giving you the right to vote the
shares at the meeting. Your broker, trustee or nominee has
enclosed or provided voting instructions for you to use in
directing the broker, trustee or nominee on how to vote your
shares.
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9.
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How can I
vote my shares in person at the Annual Meeting?
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We will provide a ballot to anyone who requests one at the
meeting. Shares held in your name as the stockholder of record
may be voted on that ballot. Shares held beneficially in street
name may be voted on a ballot only if you bring a legal proxy
from the broker, trustee or nominee that holds your shares
giving you the right to vote the shares. Even if you plan to
attend the Annual Meeting, we recommend that you also submit
your proxy or voting instruction form as described below so that
your vote will be counted if you later decide not to attend the
meeting.
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10.
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How can I
vote my shares without attending the Annual Meeting?
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Whether you hold shares directly as a stockholder of record or
beneficially in street name, you may direct how your shares are
voted without attending the meeting. If you are a stockholder of
record, you may vote by submitting a proxy. If you hold shares
beneficially in street name, you may vote by submitting voting
instructions to your broker, trustee or nominee. For directions
on how to vote, please refer to the instructions below and those
on the Notice of Internet Availability, proxy card or voting
instruction form provided.
By Internet. Stockholders of record may submit
proxies over the Internet by following the instructions on the
Notice of Internet Availability or, if printed copies of the
proxy materials were requested, the instructions on the printed
proxy card. Most beneficial stockholders may vote by accessing
the website specified on the voting instruction forms provided
by their brokers, trustees or nominees. Please check the voting
instruction form for Internet voting availability.
By Telephone. Stockholders of record may
submit proxies using any touch-tone telephone from within the
United States by following the instructions on the Notice of
Internet Availability or, if printed copies of the proxy
materials were requested, the instructions on the printed proxy
card. Most beneficial owners may vote using any touch-tone
telephone from within the United States by calling the number
specified on the voting instruction forms provided by their
brokers, trustees or nominees.
By Mail. Stockholders of record may submit
proxies by mail by requesting printed proxy cards and
completing, signing and dating the printed proxy cards and
mailing them in the accompanying pre-addressed envelopes.
Beneficial owners may vote by completing, signing and dating the
voting instruction forms provided and mailing them in the
accompanying pre-addressed envelopes.
Intermec is incorporated under Delaware law, which specifically
permits electronically transmitted proxies, provided that each
such proxy contains or is submitted with information from which
the inspector of election can determine that such proxy was
authorized by the stockholder. (Delaware General Corporation
Law, Section 212(c).) The electronic voting procedures
provided for the Annual Meeting are designed to authenticate
each stockholder by use of a Control Number, to allow
stockholders to vote their shares, and to confirm that their
instructions have been properly recorded.
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11.
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Can I
change my vote?
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If you are a stockholder of record and have submitted a proxy,
you can change your vote by attending the Annual Meeting and
voting in person. Attendance at the Annual Meeting will not
cause your previously granted proxy to be revoked unless you
vote again. You may also revoke your proxy at any time before it
is voted by sending a written notice of revocation or by
submitting a signed proxy card bearing a later date, in either
case to Intermec, Inc.,
c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717. Broadridge must receive any
such revocation of proxy by 5:00 p.m., Eastern time, on
May 22, 2008, for it to be effective. If
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you vote by telephone or on the Internet and wish to change your
vote, you should call the toll-free number or go to the Internet
site, as may be applicable in the case of your earlier vote, and
follow the directions for changing your vote. Broadridges
telephone and Internet voting sites will close at
11:59 p.m., Eastern time, on May 22, 2008.
For shares held beneficially, you may change your vote by
submitting new voting instructions to your broker, trustee or
nominee as permitted by the voting instruction form. If you have
obtained a legal proxy from your broker, trustee or nominee
giving you the right to vote your shares, you can change your
vote by attending the meeting and voting in person.
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12.
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What is
the quorum required in order to conduct business at the Annual
Meeting?
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A majority of the shares outstanding at the record date must be
present at the meeting in order to hold the meeting and conduct
business. Shares are counted as present at the
meeting if the stockholder attends the meeting or is represented
at the meeting by a duly authorized proxy.
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13.
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What is
the voting requirement to approve each of the proposals and how
are votes counted?
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In the election of directors, which is Proposal 1, you may
vote for all of the director nominees or you may withhold your
vote with respect to one or more of the director nominees. Our
Certificate of Incorporation provides that directors will be
elected by a majority of the votes cast at the meeting.
For Proposal 2, which is managements proposal that
stockholders express their advisory opinion as to whether they
ratify the appointment of Deloitte & Touche LLP as our
independent registered public accounting firm for 2008, you may
vote for or against Proposal 2, or you may abstain. Our
Certificate of Incorporation provides that approval of
Proposal 2 requires the affirmative vote of a majority of
the votes cast at the meeting. An abstention has the same effect
as a vote against the proposal.
For Proposal 3, which is managements proposal that
stockholders approve the Intermec, Inc. 2008 Employee Stock
Purchase Plan, you may vote for or against Proposal 3, or
you may abstain. Our Certificate of Incorporation provides that
approval of Proposal 3 requires the affirmative vote of a
majority of the votes cast at the meeting. An abstention has the
same effect as a vote against the proposal.
For Proposal 4, which is managements proposal that
stockholders approve the Intermec, Inc. 2008 Omnibus Incentive
Plan, you may vote for or against Proposal 4, or you may
abstain. Our Certificate of Incorporation provides that approval
of Proposal 4 requires the affirmative vote of a majority
of the votes cast at the meeting. An abstention has the same
effect as a vote against the proposal.
If you provide specific instructions (mark boxes) with regard to
certain proposals, your shares will be voted as you instruct. If
you sign and return your proxy card or voting instruction form
or otherwise submit your vote by proxy without giving specific
instructions, your shares will be voted in accordance with the
recommendations of the Board (i.e.,
for all of
the Boards nominees and
for the
management proposals). The proxy holders will vote in their
discretion on any other matters that properly come before the
meeting.
If you are a stockholder of record and do not submit your vote
by proxy or vote in person at the Annual Meeting, your shares
will not be voted. However, if you hold shares beneficially in
street name, the result may be different. If you do not return
the voting instruction form, your broker, trustee or nominee may
vote your shares in certain circumstances and on certain
proposals. The NYSE rules permit brokers to vote their
clients shares in their own discretion on the election of
directors if their clients have not given instructions as to how
they want their shares voted. The NYSE also considers a proposal
such as Proposal 2 to be routine and would permit brokers
to vote on Proposal 2 in their discretion if they have not
received instructions from their clients. The NYSE would
consider Proposal 3 and Proposal 4 to not be routine
and therefore non-discretionary, meaning that
brokers who hold shares for the accounts of their clients and
have not received instructions from their clients would not vote
their clients shares on either of these proposals. When a
broker votes a clients shares on some but not all of the
proposals at a meeting, the missing votes are referred to as
broker non-votes. Those shares will be included in
determining the presence of a quorum at the meeting, but are not
considered present for purposes of voting on
non-discretionary matters.
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14.
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What
happens if additional matters are presented at the Annual
Meeting?
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Other than the four proposals described in this proxy statement,
we are not aware of any other business to be acted upon at the
Annual Meeting. If you grant a proxy, the persons named as proxy
holders, Patrick J. Byrne, Lanny H. Michael and Janis L.
Harwell, will have the discretion to vote your shares on any
additional matters properly presented for a vote at the meeting.
If for any unforeseen reason any of our director nominees is not
available as a candidate for re-election as a director, the
proxy holders will vote your proxy for such other candidate or
candidates as may be nominated by the Board.
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15.
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Who will
count the votes?
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Broadridge Financial Solutions, Inc. will act as inspector of
elections and tabulate the votes cast at the meeting.
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16.
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What does
it mean if I receive more than one Notice of Internet
Availability or more than one set of voting materials?
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It means you have multiple accounts with the transfer agent
and/or with
brokers and banks. Please submit each Intermec proxy
and/or
voting instruction form you receive.
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17.
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Who will
pay the costs of soliciting votes for the Annual
Meeting?
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Intermec is making this solicitation and will pay the entire
cost of preparing, printing, mailing and distributing the Notice
of Internet Availability to stockholders of record and
beneficial owners and printed proxy materials to those who
specifically request them, as well as the cost associated with
soliciting votes. If you choose to access the proxy materials
and/or vote
over the Internet, you are responsible for Internet access
charges you may incur. If you choose to vote by telephone, you
are responsible for telephone charges you may incur. In addition
to posting the proxy materials on the Internet and mailing the
Notice of Internet Availability and, if specifically requested,
printed copies of these proxy materials, the solicitation of
proxies may be made in person, by telephone or by electronic
communication by our directors, officers and other employees,
who will not receive any additional compensation for such
activities. We have retained Georgeson Shareholder
Communications, Inc. (Georgeson) to assist us in the
distribution of proxy materials and the solicitation of votes.
We will pay Georgeson a fee of $7,000 plus customary costs and
expenses for these services. We will also reimburse brokerage
firms, banks, and other custodians, nominees and fiduciaries for
their reasonable
out-of-pocket
expenses in forwarding proxy and solicitation materials to the
beneficial owners of our common stock.
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18.
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Where can
I find the voting results of the Annual Meeting?
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We expect to announce preliminary voting results at the Annual
Meeting and publish final results in our quarterly report on
Form 10-Q
for the second quarter of 2008. You can access that
Form 10-Q,
and all of our other reports filed with the SEC, at our website,
http://www.intermec.com/InvestorRelations/,
or at the SECs website, www.sec.gov.
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19.
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Is a list
of stockholders entitled to vote at the Annual Meeting
available?
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The list of stockholders of record as of the record date will be
available at the Annual Meeting. It will also be available ten
days prior to the Annual Meeting, between the hours of
9 a.m. and 4 p.m., Pacific time, Monday through
Friday, at the offices of the Corporate Secretary, 6001
36th Avenue West, Everett, Washington
98203-1264.
Any holder of our common stock may examine the list for any
purpose germane to the Annual Meeting.
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20.
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What is
the deadline to propose actions for consideration at next
years Annual Meeting?
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There are two different procedures by which stockholders may
submit proposals for action at our annual meetings of
stockholders. The first procedure is provided by the SECs
rules and the second by our By-Laws.
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SEC
Rule 14a-8
permits stockholders to submit proposals they would like to have
included in our proxy statement and proxy card. In order for
such proposals to be considered for our 2009 Annual Meeting, our
Corporate Secretary must receive them no later than
December 12, 2008.
Section 2.7 of our By-Laws permits stockholders of record
to propose business to be considered at an annual meeting
without being included in the proxy statement and proxy card.
Such business must be a proper matter for stockholder action and
the stockholder proposing it must comply with the applicable
notice provisions of our By-Laws. For the 2009 Annual Meeting,
notice must be delivered to our Corporate Secretary no earlier
than January 23, 2009 and no later than February 22,
2009 (if, however, the date of the 2009 Annual Meeting is more
than 30 days before or more than 60 days after the
first anniversary of the 2008 Annual Meeting, then notice must
be delivered not earlier than 120 days before the 2009
Annual Meeting and not later than 90 days before the 2009
Annual Meeting or ten days following the day on which public
announcement of the date of the 2009 Annual Meeting is first
made).
Proposals should be sent to our Corporate Secretary at 6001
36th Avenue West, Everett, WA
98203-1264.
You may obtain a copy of the By-Law provisions regarding these
requirements by writing to the Corporate Secretary at that
address.
YOUR VOTE
IS IMPORTANT
Whether or not you plan to attend the 2008 Annual Meeting,
please promptly vote your shares on the Internet, by telephone
or by completing, signing and dating your voting instruction
form and returning it by mail (if you are a beneficial owner) or
request a printed proxy card and complete, sign, date and return
it by mail (if you are a stockholder of record).
CORPORATE
GOVERNANCE
Availability
of Information and Communications with the Board
We have established a Corporate Governance section on our
website, which can be accessed at
http://www.intermec.com/about_us/investor_relations/compliance/corporate_governance.aspx
(our Corporate Governance Webpage). The charters
of the Boards standing committees, the Standards of
Independence, the Corporate Governance Guidelines and the
Standards of Conduct that apply to all directors, officers and
other employees are posted there. We intend to disclose on our
Corporate Governance Webpage any amendment to the Standards of
Conduct and any waiver of the Standards related to executive
officers or directors. This proxy statement and the 2007 Report
to Stockholders (which includes our
Form 10-K)
are also available on our website, indicated above. Stockholders
may obtain free printed copies of these materials by contacting
Investor Relations as follows:
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Intermec, Inc.
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Telephone: 425.348.2600
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6001 36th Avenue West
Everett, WA 98203-1264
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E-mail: invest@intermec.com
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Stockholders or other interested parties who wish to communicate
with any individual director, including the Chairman of the
Board, our Board as a group, or a specified committee or group
of directors, such as our independent directors, can do so by
sending written communications by mail or courier, in care of
the Corporate Secretary at the street address above, or by
e-mail to
Board@intermec.com. All correspondence should indicate to whom
it is addressed.
Our annual meeting provides an opportunity for stockholders to
ask questions or otherwise communicate directly with members of
our Board on matters relevant to our Company. All directors are
expected to attend our annual meetings of stockholders, as
stated in the Charter of the Governance and Nominating
Committee. Eight of our directors attended the annual meeting of
stockholders held in 2007 (the 2007 Annual Meeting).
While all of our directors who were then members of the Board
planned to attend the 2007 Annual Meeting, Mr. Shaffer was
unable to do so.
6
Structure
of the Board of Directors
Our Board currently has eight members. The size of the Board was
reduced to its current number over the course of 2007, when one
of our directors, Stephen E. Frank, did not stand for
re-election at the 2007 Annual Meeting, and another of our
directors, Claire W. Gargalli, retired as of December 31,
2007. One of our independent, non-management directors, Allen J.
Lauer, became Chairman of the Board in 2007 when Larry D. Brady
stepped down as Chairman, Chief Executive Officer and President
in July 2007. At that time, Patrick J. Byrne became our Chief
Executive Officer, President and a member of the Board. The
Board has three standing committees, which are the Audit and
Compliance Committee, the Compensation Committee, and the
Governance and Nominating Committee.
Board
Independence
With the exception of Patrick J. Byrne, our Board consists of
non-management directors. The Board has adopted Standards of
Independence, which are posted on our Corporate Governance
Webpage, to help determine whether any of our non-management
directors has a material relationship with the Company. After
considering relevant facts and circumstances, the Board
determined that all of our non-management directors who served
during 2007, Stephen E. Frank, Claire W. Gargalli, Gregory K.
Hinckley, Lydia H. Kennard, Allen J. Lauer, Stephen P. Reynolds,
Steven B. Sample, Oren G. Shaffer and Larry D. Yost, are
independent within the meaning of SEC regulations, the NYSE
standards for director independence and our Standards of
Independence, and have either no relationship with the Company
(other than being a director
and/or
stockholder) or only immaterial relationships with the Company
that fell within the Standards of Independence. The Board
generally considered all relationships between the Company and
the directors and the other companies for which they or their
applicable family members are directors or employees, including
some that are not required to be disclosed in this proxy
statement as related person transactions. We transact business
with some of such other companies, in amounts that fall within
the permissible limits of our Standards of Independence.
Mr. Byrne is not an independent director because he also is
President and Chief Executive Officer of the Company.
The Board has determined that the standing committees consist
entirely of independent directors. The Board also has determined
that our Audit and Compliance Committee members meet the
particular SEC and NYSE requirements applicable to audit
committee membership.
Meetings
of the Board and Executive Sessions
Our Board met nine times during 2007, including three meetings
by telephone. Materials for our Board and committee meetings are
sent in advance to the appropriate participants. If a director
cannot attend a meeting, he or she generally communicates any
comments or questions through the relevant chair. All of our
incumbent directors attended more than 75% of the aggregate
number of Board meetings and meetings of committees of the Board
on which that director served during 2007. In addition to
executive sessions scheduled as part of regularly scheduled
Board meetings, our independent directors met five times in
2007. Before Mr. Lauer became our non-executive Chairman
and Chair of the Governance and Nominating Committee, pursuant
to Board designation all of these meetings were chaired by
Ms. Gargalli, the former Chair of that committee, who was
also an independent director. These meetings are now chaired by
Mr. Lauer.
Board
Committees
In 2007, our Board had three standing committees: the Audit and
Compliance Committee, the Compensation Committee and the
Governance and Nominating Committee. Independent directors other
than committee Chairs are generally expected to serve on two
committees.
7
The following table shows our current directors
memberships on the committees of the Board during 2007. Prior to
the expiration of Mr. Franks term as a director in
May 2007, Mr. Frank served as a member of our Compensation
Committee and our Governance and Nominating Committee. In
addition, prior to July 19, 2007, Ms. Gargalli served
as the Chair of our Governance and Nominating Committee.
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Audit and
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Governance and
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Director
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Compliance
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Compensation
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Nominating
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Gregory K. Hinckley
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Member
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Member
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Lydia H. Kennard
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Member
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Member
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Allen J. Lauer
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Chair
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(a)
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Chair
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(b)
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Stephen P. Reynolds
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Member
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Member
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Steven B. Sample
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Member
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Member
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Oren G. Shaffer
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Chair
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(b)
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Member
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Larry D. Yost
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Chair
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(a) |
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Prior to July 19, 2007. |
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(b) |
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July 19, 2007 to present. |
Audit and Compliance Committee. The Audit and
Compliance Committee (Audit Committee) consists of
four independent directors. The current members are
Mr. Shaffer (Chair), Mr. Hinckley, Mr. Reynolds
and Dr. Sample. Mr. Lauer served as the Chair of the
Audit Committee until July 19, 2007, when he was appointed
non-executive Chairman of the Board and Chair of the Governance
and Nominating Committee. On that date, Mr. Shaffer assumed
the role of Chair of the Audit Committee. The Board has
determined that, under the rules of the SEC and the NYSE, all of
the members of the Audit Committee are independent and
financially literate. The Board has also determined that
Mr. Hinckley and Mr. Shaffer each meet the SEC
criteria for audit committee financial expert. The
Committees authority and responsibilities are set forth in
a charter adopted by the Board and reviewed annually. That
charter is available on our Corporate Governance Webpage.
The Audit Committee, which met 12 times in 2007, evaluates the
performance and independence of our independent registered
public accounting firm, which reports directly to the Audit
Committee, and has the responsibility to retain or to terminate
the independent registered public accounting firm as our
independent auditors. The Audit Committee reviews and discusses
with the independent auditors and with management our annual
audited consolidated financial statements and quarterly
financial statements, the effects of regulatory and accounting
initiatives and any significant financial reporting issues and
judgments made in connection with the preparation of the
Companys financial statements. The Audit Committee also
reviews and discusses with the independent auditors, internal
auditors and management the adequacy of our system of internal
controls and procedures. Additionally, the Audit Committee
discusses with the independent auditors and management our
internal audit departments responsibilities, budget and
staffing as well as any recommended changes to the internal
audit scope and plan. The Audit Committees policy is that
all audit and non-audit services to be performed by our
independent auditors must be approved in advance. The Audit
Committee reviews with management and discusses proposed
earnings releases.
The Audit Committee reviews managements implementation and
enforcement of compliance with our Standards of Conduct. The
Audit Committee also considers other possible conflicts of
interest situations brought to its attention and makes
appropriate recommendations concerning these situations. In
addition, it oversees managements compliance with our
Related Person Transactions Policy, as described in
Certain Relationships and Related Persons
Transactions Policies, Procedures and
Practices.
The report of the Audit Committee appears under the caption
Report of the Audit and Compliance Committee.
Compensation Committee. The Compensation
Committee consists of four independent directors. They currently
are Mr. Yost (Chair), Mr. Hinckley, Ms. Kennard,
and Mr. Shaffer. Mr. Frank also served as a member the
Compensation Committee prior to the expiration of his term as
director in May 2007. The Committee met nine times in 2007. The
Board has determined that all of the members of the Committee
are
8
independent, non-employee, outside directors within the meanings
of SEC regulations, the NYSE listing standards, and the Internal
Revenue Code of 1986, as amended (the (Code). The
Committees authority and responsibilities are set forth in
a charter adopted by the Board of Directors and reviewed
annually. That charter is available on our Corporate Governance
Webpage.
The Compensation Committee recommends to the Board policies for
executive compensation and approves the remuneration of all
corporate officers, including our Chief Executive Officer
(CEO). It oversees the administration of the
employee equity and cash incentive plans, cash bonus plans,
Employee Stock Purchase Plan, and certain other compensation and
retirement arrangements.
The Compensation Committee acts on elements of executive officer
compensation at various times during the year. Shortly before
the end of each year, the Committee comprehensively reviews the
total compensation of each executive officer and relevant peer
group comparisons with the Committees outside compensation
consultant. Decisions on executive officer salaries for the
following year are made during the same meeting. In the first
quarter of each year, the Committee determines Management
Incentive Compensation Plan (MICP) payments based on
performance achieved during the preceding year. The MICP is our
annual cash bonus program for executive officers and other
employees. In the same quarter, the Committee sets the
performance metrics for the current years MICP. The
Committee considers stock option grants at the time of the
annual stockholder meeting, during the second quarter of the
year. Other equity incentive awards for executive officers and
other employees generally have been made during the second
quarter but, beginning in 2008, are being made in the first
quarter of the year.
The Compensation Committee considered findings by Hewitt
Associates, which served as its outside compensation consultant
prior to May 2007, in determining 2007 compensation levels for
the executive officers. In May 2007 the Committee retained
Frederic W. Cook & Co., Inc. (FWC) to
serve as its outside compensation consultant to advise it on
various aspects of executive compensation. Specifically, FWC
attended several scheduled Committee meetings and provided to
the Committee relevant market data, information on compensation
trends and advice on compensation levels for the executive
officers for 2008 as well as Mr. Byrnes compensation
for 2007. FWC has also assisted the Committee with a review of
the terms of its equity incentive plans and assisted the
Governance and Nominating Committee with a benchmarking review
for non-employee director compensation. FWC has not performed
any services on behalf of management, but works with management
with the express permission of the Committee. Each year, FWC
presents to the Compensation Committee a total compensation
analysis for each executive officer based on market data
provided by FWC at the Committees direction. This is the
Compensation Committees frame of reference for the
executive officer compensation decisions it will make in the
following year. Based on this data, FWC makes recommendations to
the Committee regarding CEO compensation. The CEO, with the
assistance of the Vice President of Human Resources, provides
recommendations to the Committee for the executive officers
(excluding the CEO) also based on the data provided by FWC.
The Compensation Committees charter allows it to delegate
its authority to subcommittees. In addition, the Compensation
Committee has delegated to our CEO the authority to make certain
equity grants to employees that are not executive officers; see
Compensation Discussion and Analysis Equity
Granting Practices below.
Governance and Nominating Committee. The
Governance and Nominating Committee (Governance
Committee) consists of four independent directors. The
members of this committee currently are Mr. Lauer (Chair),
Mr. Kennard, Mr. Reynolds and Dr. Sample.
Ms. Gargalli served as the Chair of this committee until
July 2007, at which time Mr. Lauer became the Chair of this
committee. Mr. Frank was also a member of this committee
prior to the expiration of his term as a director in May 2007.
The Governance Committee met eight times in 2007. The Board has
determined that, under the corporate governance rules of the
NYSE, all of the members of the Governance Committee are
independent. The Committees authority and responsibilities
are set forth in a charter adopted by the Board and reviewed
annually. That charter is available on our Corporate Governance
Webpage.
The Governance Committee reviews and recommends to the Board
practices and procedures relating to corporate governance,
including the evaluation and recommendation of criteria for
membership on the Board
9
and the composition and structure of the Board and its
committees. The Governance Committee also reviews succession
plans related to the Chief Executive Officer and recommends to
the Board the compensation of directors for Board and committee
service each year.
The Governance Committee evaluates the size of the Board and
considers the qualifications of persons recommended for election
to fill vacancies that may occur in the Board from time to time.
The Governance Committee also evaluates the qualifications of
persons recommended by the stockholders for election to the
Board, as disclosed under Consideration of Director
Nominees.
Consideration
of Director Nominees
The Governance Committee annually assesses the size, composition
and needs of the Board and whether any vacancies on the Board
are expected due to retirement or otherwise. In the event that
vacancies are anticipated or otherwise occur, the Governance
Committee consults with the full Board. The Board may decide
either to fill the vacancy or to reduce the size of the Board to
eliminate the vacancy. The Board may retain a professional
search firm to assist with the identification and evaluation of
candidates to fill any vacancy.
The Governance Committee has adopted general criteria for
nomination to the Board. These general criteria describe the
traits, abilities and experience that, at a minimum, the
Governance Committee considers in selecting candidates to
recommend for nomination to the Board. The following is a
summary of these criteria:
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Directors should be of the highest ethical character and share
the values of the Company, as represented in its Standards of
Conduct and in its Corporate Governance Guidelines;
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Directors should hold or have held a generally recognized
position of leadership that demonstrates the ability to exercise
sound judgment in a wide variety of matters;
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A majority of the members of the Board must be independent
within the meaning of applicable rules, regulations and listing
standards;
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Directors should be willing to devote a substantial amount of
time to Company business, understand the Companys business
and keep informed of its operations, understand the
Companys reporting system and its system of internal
controls, and exercise care, balance, fairness, and due
deliberation in the decision-making process;
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Directors should have the ability to attend Board meetings,
meetings of all committees of which they are members and annual
meetings of stockholders;
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Directors should be able to engage in a free and open exchange
of ideas and opinions with other directors at Board and
committee meetings;
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Directors should be able to serve for at least five years before
reaching the retirement age of 72;
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Directors are expected to comply with stock ownership guidelines
established by the Board; and
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Directors should be available to offer advice and guidance to
the Chief Executive Officer at times other than regularly
scheduled Board meetings.
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In addition, the Governance Committee considers specific
qualities needed to fill a particular vacancy, such as financial
expertise and literacy for potential members of the Audit
Committee, and other characteristics desired to achieve a
balance of knowledge, experience and capability on the Board.
The Governance Committee will consider candidates recommended by
stockholders if they meet the criteria referred to above.
Recommendations may be sent to the Governance Committee in care
of the Corporate Secretary at the address set out on the first
page of this proxy statement. They must include the following:
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the candidates name and address;
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10
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a brief biographical statement of the candidate, including his
or her occupation for at least the last five years, and a
description of his or her qualifications for Board
membership; and
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the candidates signed consent to be named in the proxy
statement and to serve as a director if elected.
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Any stockholder recommendation of a candidate for election at
the 2009 Annual Meeting must be received no later than
December 12, 2008, in order for the Governance Committee to
consider it.
Section 2.7 of our By-Laws establishes an alternative
procedure for stockholders of record to nominate persons for
election to our Board at an annual meeting. The By-Laws do not
provide for such nominations to be included in our proxy
statement and proxy card. A stockholder who intends to make a
nomination at the annual meeting must give timely notice in
writing to the Corporate Secretary as set out in our By-Laws.
For nominations to be made at the 2009 Annual Meeting, notice
must be delivered to the Corporate Secretary at the address set
out on the first page of this proxy statement no earlier than
January 17, 2009 and no later than February 16, 2009.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Directors who were members of our Compensation Committee in 2007
are Mr. Frank (until May 15, 2007), Mr. Hinckley,
Ms. Kennard, Mr. Shaffer and Mr. Yost. During
2007, there were no compensation committee interlocks or other
relationships to be reported under this item.
DIRECTOR
COMPENSATION
The Companys compensation program for non-employee
directors for 2007 consists of an annual retainer paid in stock,
meeting fees paid in cash (unless the director elects to be paid
in stock), and stock options. Directors may also elect to defer
retainers and cash fees. Directors who are employees of the
Company do not participate in the compensation program for
non-employee directors.
Our directors have been compensated under the 2002 Plan, which
was approved by our stockholders at our annual meeting of
stockholders held in 2002. The 2002 Plan, as amended effective
November 13, 2007, is listed as an exhibit to our
Form 10-K.
If our stockholders approve the 2008 Plan at the Annual Meeting,
directors will be compensated under the 2008 Plan. See
Proposal 4 Approval of the Intermec, Inc.
2008 Omnibus Incentive Plan below for a description of the
2008 Plan.
Retainers. Directors receive an annual
retainer for Board service. The non-executive Chairman of the
Board and each director who serves as Chair of a Board committee
also receive an additional annual retainer. Retainer fees are
denominated in cash and paid in shares of Intermec common stock
after the end of the quarter in which earned, except that the
retainer fee for the Chairman of the Board is paid in the form
of deferred stock units, subject to a mandatory deferral period.
The number of shares or deferred stock units is determined based
on the average market price of Intermec common stock for the
preceding quarter. In 2007, the annual retainer for Board
service was $30,000. The annual retainer for a non-executive
director serving as Chairman of the Board is $150,000 for the
12-month
period ending June 30, 2008 and will be $120,000 for each
12-month
period thereafter. The annual retainers for service as Chair of
the Audit Committee, Compensation Committee, and Governance
Committee were $10,000, $8,000 and $8,000, respectively, except
that the Chairman of the Board, when acting in the capacity of
the Chair of the Governance Committee, will not receive any
additional chair retainer.
Meeting Fees. Directors receive fees for
attendance at Board and committee meetings. The meeting
attendance fees are denominated in cash and paid, at the
election of the director, in cash or shares of Intermec common
stock after the end of the quarter in which earned. The number
of shares is determined based on the average market price of
Intermec common stock for the preceding quarter. In 2007 each
director received a fee of $2,000 for each meeting of the Board
and for each physical meeting of a committee of the Board that
the director attended, and an attendance fee of $1,000 for each
telephonic meeting of a committee of the Board in which the
director participated.
11
Deferred Compensation. Directors may defer all
or part of their retainers into a deferred stock account under
the 2002 Plan, and may defer all or part of their meeting
attendance fees into deferred cash or stock accounts under that
plan. Each directors deferred stock account is credited
with a number of deferred stock units determined based on the
dollar amount deferred divided by the average market price of
Intermec common stock for the preceding quarter. The cash
account is credited with the amount of cash deferred. Credits to
the deferred stock and cash accounts are made on the first
business day following the end of each quarter. Cash accounts
accrue interest at a rate equal to the prime rate. If the
Company paid regular cash dividends on the common stock, the
directors stock accounts would be credited with additional
share units based on the fair market value of the common stock
on the dividend payment date. Transfers between the stock
account and the cash account are not permitted. Payment of
deferred amounts begins in the January following the year in
which a director leaves the Board. Directors may elect in
advance to receive deferred amounts as a lump sum or in two to
15 substantially equal annual installments. The Companys
Director Deferred Compensation Plan, which will become effective
as of the date of the Annual Meeting if our stockholders approve
the 2008 Plan at that meeting, is intended to be a continuation
of the deferral components of the 2002 Plan. The Director
Deferred Compensation Plan will be effective with respect to all
amounts under the 2002 Plan deferred on or after January 1,
2005 that remain unpaid as of the date of the Annual Meeting.
Stock Options. For 2005 to 2007, on the first
business day following January 1 of each year, each director
automatically received a grant of an option to purchase
10,000 shares of common stock with an exercise price equal
to the fair market value on the date of grant under the 2002
Plan. Any director who joined the Board at any subsequent time
of the year received a pro-rata portion of the annual grant,
based on the length of his or her Board service that year.
Beginning in 2007, the annual grant vests and becomes
exercisable in four equal installments at the beginning of each
fiscal quarter, beginning with the date of grant. If a director
resigns from the Board, then all unvested options held by such
director are forfeited. If a director dies or becomes
permanently disabled while serving on the Board, or if the
director retires pursuant to the policy for mandatory retirement
of directors, or there is a change of control of the company (as
defined in the 2002 Plan) then all unvested options held by such
director become vested and exercisable in full. Beginning in
2006, annual options granted to directors have a fixed term of
ten years, which term is not affected by the retirement or other
departure of a director from the Board.
Our directors were compensated in 2007 only as described above
and do not participate in any Intermec pension or other benefit
plans. We pay or reimburse directors for lodging, travel and
other expenses incurred for the purpose of attending meetings of
the Board and its committees.
The following table sets forth information regarding the
compensation for each of the Companys non-employee
directors during 2007.
2007 Director
Compensation Table
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Fees Earned
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or Paid
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Stock
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Option
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All Other
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in Cash(a)
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Awards(b)
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Awards(c)
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Compensation(d)
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Total
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Name
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($)
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($)
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($)
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($)
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($)
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Gregory K. Hinckley
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$
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52,000
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$
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30,000
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$
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109,400
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$
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761
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$
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192,161
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Lydia H. Kennard
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47,000
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30,000
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109,400
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761
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187,161
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Allen J. Lauer
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51,000
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110,000
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109,400
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2,075
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272,475
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Stephen P. Reynolds
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48,000
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30,000
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109,400
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761
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188,161
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Steven B. Sample
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49,000
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30,000
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109,400
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761
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189,161
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Oren G. Shaffer
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56,000
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35,000
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109,400
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1,836
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202,236
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Larry D. Yost
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38,000
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38,000
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109,400
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1,715
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187,115
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Former Directors
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Stephen E. Frank
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15,000
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11,250
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109,400
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350
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136,000
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Claire W. Gargalli
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31,000
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34,000
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109,400
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947
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175,347
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12
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(a) |
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The amounts reported represent the total amount of meeting fees
for 2007, which are denominated in cash and payable in cash or,
at the election of the director, may be paid in the form of
stock, or may be deferred into a deferred cash account or a
deferred stock unit account under the 2002 Plan. Mr. Lauer,
Mr. Shaffer and Mr. Yost elected to receive their
meeting fees in the form of deferred stock units. The following
table sets forth the number of deferred stock units each
received, by quarter. Fractional shares are settled in cash. The
Grant Date Fair Value is the cash-denominated amount
of meeting fees due, divided by the average market price of
Intermec common stock for each quarter of 2007, which is set
forth in note (d), below. |
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Grant Date
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Deferred
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Fair Value
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Name
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Period
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Stock Units
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($)
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Mr. Lauer
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1st quarter 2007
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774.6934
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$
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18,000
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2nd quarter 2007
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302.3758
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7,000
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3rd quarter 2007
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578.9494
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15,000
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4th quarter 2007
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481.5437
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11,000
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Mr. Shaffer
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1st quarter 2007
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946.8474
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22,000
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2nd quarter 2007
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431.9654
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10,000
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3rd quarter 2007
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578.9494
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15,000
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4th quarter 2007
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393.9903
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9,000
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Mr. Yost
|
|
1st quarter 2007
|
|
|
645.5778
|
|
|
|
15,000
|
|
|
|
2nd quarter 2007
|
|
|
302.3758
|
|
|
|
7,000
|
|
|
|
3rd quarter 2007
|
|
|
463.1595
|
|
|
|
12,000
|
|
|
|
4th quarter 2007
|
|
|
175.1068
|
|
|
|
4,000
|
|
|
|
|
(b) |
|
The amounts reported represent the compensation expense
recognized by the Company during the year ended
December 31, 2007, in accordance with the provisions of
Financial Accounting Standards Board Statement of Financial
Accounting Standard No. 123 (revised 2004), Share-Based
Payment (FAS 123R), with respect to retainers paid
to directors in 2007. These retainers are specified as a dollar
amount but were paid in the form of shares or, at the
directors election, in deferred stock units. The number of
shares is calculated quarterly, by dividing the dollar amount of
the retainer by the average market price of Intermec common
stock for the applicable quarter, which constitutes the
FAS 123R fair value for these awards. |
The following table sets forth for each director the number of
shares of Intermec common stock or deferred stock units received
with respect to the directors annual retainer shown in
column (b) above, and the grant date fair value of such
shares computed in accordance with FAS 123R. In addition to
the annual retainer of $30,000 paid to each director, the
following directors received additional Chair retainers:
Mr. Lauer received $150,000 for his services as
non-executive Chairman prorated for the portion of the year he
served in that position; Mr. Lauer and Mr. Shaffer
each received $10,000 for their services as Chair of the Audit
Committee for the portion of the year they served in those
roles; Mr. Yost received $8,000 for his services as Chair
of the Compensation Committee; and Ms. Gargalli received
$8,000 for her services as Chair of the Governance Committee for
the portion of the year she served in that role. The following
table details these Chair retainers individually.
Mr. Hinckley, Ms. Kennard and Mr. Reynolds
received their retainers in the form of shares of Intermec
common stock. Mr. Frank, Ms. Gargalli, Mr. Lauer,
Dr. Sample, Mr. Shaffer and Mr. Yost elected to
receive their retainers in the form of deferred stock units.
Fractional shares are paid or settled in cash. The average
market price of Intermec common stock for each quarter of 2007
is set forth in note (d), below.
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
|
|
|
|
|
Shares or
|
|
Date Fair
|
|
|
|
|
Deferred
|
|
Value
|
Name
|
|
Period
|
|
Stock Units
|
|
($)
|
|
Each director (including Ms. Gargalli, Mr. Shaffer,
Mr. Yost and Mr. Lauer)
|
|
|
1st quarter 2007
|
|
|
|
322.7889
|
|
|
$
|
7,500
|
|
|
|
|
2nd quarter 2007
|
|
|
|
323.9741
|
|
|
|
7,500
|
|
|
|
|
3rd quarter 2007
|
|
|
|
289.4747
|
|
|
|
7,500
|
|
|
|
|
4th quarter 2007
|
|
|
|
328.3253
|
|
|
|
7,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Yost
|
|
|
1st quarter 2007
|
|
|
|
86.0770
|
|
|
|
2,000
|
|
|
|
|
2nd quarter 2007
|
|
|
|
86.3931
|
|
|
|
2,000
|
|
|
|
|
3rd quarter 2007
|
|
|
|
77.1933
|
|
|
|
2,000
|
|
|
|
|
4th quarter 2007
|
|
|
|
87.5534
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Gargalli
|
|
|
1st quarter 2007
|
|
|
|
86.0770
|
|
|
|
2,000
|
|
|
|
|
2nd quarter 2007
|
|
|
|
86.3931
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shaffer
|
|
|
3rd quarter 2007
|
|
|
|
96.4916
|
|
|
|
2,500
|
|
|
|
|
4th quarter 2007
|
|
|
|
109.4417
|
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Lauer
|
|
|
1st quarter 2007
|
|
|
|
107.5963
|
|
|
|
2,500
|
|
|
|
|
2nd quarter 2007
|
|
|
|
107.9913
|
|
|
|
2,500
|
|
|
|
|
3rd quarter 2007
|
|
|
|
1,447.3735
|
|
|
|
37,500
|
|
|
|
|
4th quarter 2007
|
|
|
|
1,641.6264
|
|
|
|
37,500
|
|
|
|
|
(c) |
|
The amounts reported represent the compensation expense that we
recognized during the year ended December 31, 2007, in
accordance with the provisions of FAS 123R with respect to
stock options granted in 2007. The options vest quarterly over a
one-year period beginning on the date of grant and have an
exercise price equal to the fair market value of Intermec common
stock on the date of grant, which pursuant to the 2002 Plan is
the average of the high and low prices per share of common stock
as reported on the NYSE on that date. The grant date fair value
for the options granted in 2007 was $9.87 per share. Refer to
Note F, Shareholders Investment, in the
Notes to Consolidated Financial Statements included in our
Form 10-K
for the relevant assumptions used to determine the FAS 123R
fair value of the stock options. |
|
|
|
The following table sets forth for each director the aggregate
number of stock options outstanding as of December 31, 2007. |
|
|
|
|
|
|
|
Number of
|
|
|
|
Stock Options
|
|
Name
|
|
(#)
|
|
|
Mr. Hinckley
|
|
|
47,500
|
|
Mr. Kennard
|
|
|
57,500
|
|
Mr. Lauer
|
|
|
60,000
|
|
Mr. Reynolds
|
|
|
30,000
|
|
Dr. Sample
|
|
|
70,000
|
|
Mr. Shaffer
|
|
|
23,151
|
|
Mr. Yost
|
|
|
60,000
|
|
Mr. Frank
|
|
|
65,000
|
|
Ms. Gargalli
|
|
|
70,000
|
|
|
|
|
(d) |
|
We calculate the number of shares or deferred stock units
received by directors with respect to cash-denominated retainers
and meeting fees using the average market price of Intermec
common stock for the applicable preceding quarter, which may be
less than the closing price of our common stock on the last
business day of the quarter. The amounts reported represent
(i) the positive difference, if any, between (A) the
closing market price of Intermec common stock on the last
business day of each fiscal quarter of 2007 and (B) the
average market price of Intermec common stock for each fiscal
quarter of 2007, |
14
|
|
|
|
|
(ii) multiplied by the number of shares or deferred shares
issued to each director in payment of his or her retainer and
meeting fees (if applicable) in that quarter. The following
table sets forth the calculation of the value represented by
(i) in the preceding sentence. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing Price on
|
|
|
Average Market
|
|
|
Positive
|
|
|
|
the Last Business
|
|
|
Price for the
|
|
|
Difference,
|
|
|
|
Day of the Quarter
|
|
|
Quarter
|
|
|
if any
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
1st quarter 2007
|
|
$
|
22.34
|
|
|
$
|
23.24
|
|
|
|
|
|
2nd quarter 2007
|
|
|
25.31
|
|
|
|
23.15
|
|
|
$
|
2.16
|
|
3rd quarter 2007
|
|
|
26.12
|
|
|
|
25.91
|
|
|
|
0.21
|
|
4th quarter 2007
|
|
|
20.31
|
|
|
|
22.84
|
|
|
|
|
|
|
|
|
|
|
At no cost to Intermec, our directors are eligible to obtain
matching contributions of up to $25,000 from The Intermec
Foundation for contributions they make to schools and
educational institutions. See The Intermec
Foundation following the Summary Compensation
Table, below. Not included in this column are the
following amounts for which The Intermec Foundation has made or
will make a matching contribution in 2007 or 2008 in respect of
contributions made by directors in 2007 to tax-exempt
educational institutions. |
|
|
|
|
|
|
|
Matching
|
|
|
|
Contribution to
|
|
|
|
Tax-Exempt
|
|
|
|
Educational
|
|
|
|
Institutions
|
|
Name
|
|
($)
|
|
|
Mr. Frank
|
|
$
|
25,000
|
|
Ms. Gargalli
|
|
|
25,000
|
|
Mr. Hinckley
|
|
|
22,100
|
|
Ms. Kennard
|
|
|
13,000
|
|
Dr. Sample
|
|
|
25,000
|
|
2008
Director Compensation
In 2007, our Governance Committee undertook a review of
compensation for non-employee directors. It was assisted in this
review by its outside compensation consultant, FWC, which
provided advice and perspective regarding peer group practices
(using the same companies that were used to benchmark 2008
executive compensation) and broader market trends. As a result
of this review, that committee recommended and the Board of
Directors adopted the revised Director Compensation Program (the
2008 Program) described below, which with respect to
equity awards is subject to stockholder approval of the 2008
Plan.
Under the 2008 Program, the annual retainer has been increased
to $40,000, and will be paid in cash unless the director elects
to receive the retainer in the form of Intermec common stock or
defers the retainer into a deferred cash or stock account under
the Director Deferred Compensation Plan. The annual retainer for
a non-executive director serving as Chairman of the Board
remains at $150,000 for the
12-month
period ending June 30, 2008 and $120,000 for each
12-month
period thereafter, and will be paid in the form of deferred
stock units subject to a mandatory deferral period. The annual
retainers for service as Chair of the Audit Committee,
Compensation Committee, and Governance Committee are increased
to $15,000, $10,000 and $10,000, respectively. The attendance
fee for each meeting of the Board and for each physical meeting
of a committee of the Board that the director attends remains at
$2,000, and the amount paid for each telephonic meeting of a
committee of the Board in which the director participates has
been increased to $2,000.
Under the 2008 Program, the prior stock option grant of
10,000 shares has been replaced by a combination of stock
options and restricted deferred stock units. Each director will
automatically receive at the Annual Meeting and at each annual
meeting of stockholders thereafter a grant of a stock option to
purchase shares of Intermec common stock with a Black-Scholes
value of $80,000 and a grant of restricted deferred stock units
with a value of $80,000, based on the fair market value of
Intermec common stock on the date of
15
grant. Any director who joined the Board at any subsequent time
of the year will receive pro rata portions of the annual stock
option grant and the annual restricted deferred stock unit
grant, roughly based on the time remaining until the next annual
meeting. For 2008 only, immediately after the Annual Meeting,
each director will also receive a stock option grant and a
restricted deferred stock unit award for a pro rata portion of
the value of the annual stock option grant and restricted
deferred stock unit grant made on the same date, based on the
time between January 1, 2008 and the date of the Annual
Meeting. These pro rata grants are being made to directors to
make up for the equity award that would have been granted on
January 1, 2008 under the prior director compensation
program, and will vest on December 31, 2008. Annual option
grants generally will vest and become exercisable in four equal
installments on the first business day of each fiscal quarter,
beginning on the date of grant, and generally will expire seven
years from the date of grant. Restricted deferred stock unit
grants become fully vested at the following annual meeting,
provided a director continues to serve on the Board during that
period. In the event of a directors termination of service
prior to vesting, all restricted deferred stock units are
automatically forfeited to the Company. All restricted deferred
stock unit grants to directors under the 2008 Program will
automatically be deferred into and subject to the Director
Deferred Compensation Plan.
Director
Ownership Guidelines
In July 2004, we adopted stock ownership guidelines for
directors. The guidelines suggest that directors retain from the
compensation paid to them by us a total of Intermec common stock
and derivatives of our common stock equal in value (calculated
at the current market price) to five times the current annual
retainer fee under the 2002 Plan, or $150,000 based on 2007
compensation levels; the amount would be $200,000 based on 2008
compensation levels. The guidelines also suggest that a new
director should accumulate this amount within five years from
the commencement of service on the Board.
PROPOSAL 1.
ELECTION
OF DIRECTORS
The Board, pursuant to our By-Laws, has set the current number
of directors at eight. Each director is subject to election at
each annual meeting of stockholders. Accordingly, if elected,
each director would serve a one-year term expiring at the 2009
Annual Meeting or until their successors are elected and
qualified. Our Certificate of Incorporation provides that the
directors will be elected by a majority of the votes cast at the
meeting. Our Board has a policy of mandatory retirement from the
Board at the annual meeting following a directors
72nd birthday.
The following information provides the age, business experience
and Board committee membership as of March 24, 2008, of the
nominees for election. All nominees have consented to being
named as such in this proxy statement and have agreed to serve
if elected. If, as a result of circumstances not presently
known, any of such nominees declines or is unable to serve as a
director, proxies will be voted for the election of such other
person as the Board may select, or the number of authorized
directors may be reduced.
RECOMMENDATION
The Board
of Directors unanimously recommends that you
vote FOR
the election of each of the following nominees:
PATRICK J. BYRNE, age 47. Mr. Byrne
is Chief Executive Officer and President of Intermec. Prior to
joining Intermec in these capacities in 2007, Mr. Byrne
served as a Senior Vice President and President of the
Electronic Measurement Group of Agilent Technologies Inc., a
bio-analytical and electronic measurement company, from February
2005 to March 2007. Prior to assuming that position,
Mr. Byrne served as Vice President and General Manager for
Agilents Electronic Products and Solutions Groups
Wireless Business Unit from September 2001 to February 2005. He
served as Vice President for Agilents Electronic Products
and Solutions Groups Product Generation Units from 1999 to
2001. He currently serves on the Board of Samuel Ginn College of
Engineering at Auburn University.
16
GREGORY K. HINCKLEY,
age 61. Mr. Hinckley is President and
director of Mentor Graphics Corporation, a provider of
electronic design automation software and systems, and has
served in that capacity since 1999. He joined Mentor Graphics as
Executive Vice President, Chief Operating Officer and Chief
Financial Officer in 1997. Prior to that, he served as Chief
Financial Officer of two other publicly traded companies. He
joined the Board of Intermec in 2004, and is a member of the
Audit Committee and the Compensation Committee. He also serves
on the board of Arc Soft Inc. and is an Advisory Director of
Portland State University, Engineering School.
LYDIA H. KENNARD, age 53. From 1999 to
2003 and again from October 2005 through January 2007,
Ms. Kennard served as Executive Director of Los Angeles
World Airports, a system of airports comprising Los Angeles
International, Ontario International, Palmdale Regional and Van
Nuys General Aviation Airports. She served as Deputy Executive
for Design and Construction for Los Angeles World Airports from
1994 to 1999. She has been a director of Intermec since 2003,
and is a member of the Compensation Committee and the Governance
Committee. Ms. Kennard is a director of URS Corp., AMB
Property Corporation, IndyMac Bank, the UniHealth Foundation,
the California Air Resources Board and Polytechnic School, and a
trustee for the University of Southern California and RAND
Corporation.
ALLEN J. LAUER, age 70. Mr. Lauer is
Chairman of the Board of Varian, Inc., a supplier of scientific
instruments and vacuum technologies, and has served in that
capacity since 2002. He served as Chief Executive Officer of
Varian from 1999 until his retirement from that position on
December 31, 2003, and as President from 1999 until 2002.
Prior to that, he was Executive Vice President of Varian
Associates, Inc., from which the capital stock of Varian, Inc.
was distributed to shareholders in 1999. He has been a director
of Intermec since 2003, and has served as the non-executive
Chair of the Board and the Chair of the Governance Committee
since July 2007. Until July 2007, Mr. Lauer served as the
Chair of the Audit Committee. He is also a director of Immunicon
Corporation.
STEPHEN P. REYNOLDS,
age 60. Mr. Reynolds is Chairman of the
Board, President and Chief Executive Officer of Puget Energy,
Inc. and of its wholly owned utility subsidiary, Puget Sound
Energy, Inc. He became Chairman of the Board in 2005, having
held the positions of President and Chief Executive Officer
since 2002. Prior to joining Puget Energy, Mr. Reynolds was
President and Chief Executive Officer of Reynolds Energy
International, an energy advisory firm, from 1997 to 2001, and
prior to that was President and Chief Executive Officer of
Pacific Gas Transmission Company. Mr. Reynolds has been a
director of Intermec since 2005 and serves on the Audit
Committee and the Governance Committee. He also serves on the
boards of the Edison Electric Institute, the American Gas
Association, the ArtsFund and the 5th Avenue Theatre, both
of Seattle, the Nature Conservancy of Washington, the Washington
Roundtable and Green Diamond Resources Company.
STEVEN B. SAMPLE, age 67. Dr. Sample
is President of the University of Southern California and has
held that position since 1991. He has been a director of
Intermec since 1997, and is a member of the Audit Committee and
the Governance Committee. From 1982 to 1991, Dr. Sample was
President of the State University of New York at Buffalo. He is
a director of the Wm. Wrigley Jr. Company, the Santa Catalina
Island Company, the AMCAP Fund, Inc. and the American Mutual
Fund, Inc. Dr. Sample is also founding Chairman of the
Association of Pacific Rim Universities, a trustee of the
University of Southern California and of the Regenstreif Medical
Foundation, and past Chairman and current member of the
Association of American Universities.
OREN G. SHAFFER, age 65. Mr. Shaffer
is the Retired Vice Chairman and Chief Financial Officer of
Qwest Communications International Inc., where he served in that
capacity from 2002 to 2007. He has been a director of Intermec
since 2005, and has served as the Chair of the Audit Committee
since July 2007. Mr. Shaffer has been a member of the Audit
Committee and the Compensation Committee since 2005. From 2000
to 2002, Mr. Shaffer was President and Chief Operating
Officer of Sorrento Networks, which develops intelligent optical
networking solutions for telecommunications applications. He
also serves on the boards of Belgacom S.A. and Terex Corporation.
LARRY D. YOST, age 70. Mr. Yost is
the Retired Chairman of the Board and Chief Executive Officer of
ArvinMeritor, Inc., a global supplier of a broad range of
integrated systems, modules and components to the
17
motor vehicle industry. He served in those positions from 2000
to August 2004. He has been a director of Intermec since 2002,
and is Chair of the Compensation Committee. From 1997 until the
2000 merger of Arvin, Inc. and Meritor Automotive, Inc.,
Mr. Yost was Chairman and Chief Executive Officer of
Meritor, a supplier of automotive components and systems. He is
the Lead Director of Kennametal, Inc. and a director of Milacron
Inc. and Actuant Corporation.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth the number of shares of common
stock beneficially owned, directly or indirectly, by the parties
that reported beneficial ownership of more than 5% of our
outstanding common stock, as indicated in the applicable
Schedule 13D or Schedule 13G, and by each director,
each executive officer named in the Summary Compensation Table
included in this proxy statement (the named executive
officers or NEOs), and all of our directors
and executive officers as a group, as of March 24, 2008,
unless otherwise noted.
The number and percentage of shares beneficially owned is
determined in accordance with
Rule 13d-3
of the Securities Exchange Act of 1934 (the Exchange
Act) and is not necessarily indicative of beneficial
ownership for any other purpose. Shares of common stock that a
person has a right to acquire within 60 days of
March 24, 2008, or, with respect to 5% beneficial owners,
as calculated in the applicable Schedule 13D/G, are deemed
outstanding for purposes of computing the percentage ownership
of that person, but are not deemed outstanding for purposes of
computing the percentage ownership of any other person, except
with respect to the percentage ownership of all directors and
executive officers as a group, if applicable.
Beneficial
Owners of More than 5%
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
and Nature
|
|
|
|
|
of Beneficial
|
|
Percent of
|
Name and Address of Beneficial Owner
|
|
Ownership
|
|
Class(g)
|
|
Unitrin, Inc.
|
|
|
12,657,764
|
(a)
|
|
|
20.59
|
%
|
One East Wacker Drive
Chicago, IL 60601
|
|
|
|
|
|
|
|
|
Artisan Partners Limited Partnership
|
|
|
6,976,235
|
(b)
|
|
|
11.35
|
%
|
875 East Wisconsin Avenue,
Suite 800 Milwaukee, WI 53202
|
|
|
|
|
|
|
|
|
Wells Fargo & Company
|
|
|
6,815,657
|
(c)
|
|
|
11.08
|
%
|
420 Montgomery Street
San Francisco, CA
|
|
|
|
|
|
|
|
|
FMR LLC
|
|
|
5,545,445
|
(d)
|
|
|
9.02
|
%
|
82 Devonshire Street
Boston, MA 02109
|
|
|
|
|
|
|
|
|
Lord, Abbett & Co. LLC
|
|
|
4,378,090
|
(e)
|
|
|
7.12
|
%
|
90 Hudson Street
Jersey City, NJ 07302
|
|
|
|
|
|
|
|
|
GAMCO Investors, Inc.
|
|
|
3,951,291
|
(f)
|
|
|
6.43
|
%
|
One Corporate Center
Rye, NY 10580
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Information presented is based on a Schedule 13D/A, filed
March 31, 2003, by Unitrin, Inc. (Unitrin) and
Trinity Universal Insurance Company, Unitrins wholly-owned
subsidiary. According to the Schedule 13D/A, as of
March 28, 2003, Unitrin and Trinity Universal Insurance
Company reported that they share power to vote and dispose of
these Intermec shares. |
|
(b) |
|
Information presented is based on a Schedule 13G/A, filed
on February 13, 2008, by Artisan Partners Limited
Partnership, Artisan Investment Corporation, ZFIC, Inc., Andrew
A. Zeigler, Carlene M. Ziegler and Artisan Funds, Inc. According
to the Schedule 13G/A, as of December 31, 2007,
Artisan Partners |
18
|
|
|
|
|
Limited Partnership, Artisan Investment Corporation, ZFIC, Inc.,
Andrew A. Zeigler and Carlene M. Ziegler reported that they each
beneficially owned 6,976,235 Intermec shares, of which they
shared power to vote 6,682,835 Intermec shares and to dispose of
6,976,235 Intermec shares. Artisan Funds, Inc. reported that it
beneficially owned 3,792,600 Intermec shares, of which it shared
power to vote and to dispose of all of these Intermec shares. |
|
(c) |
|
Information presented is based on a Schedule 13G/A, filed
on January 23, 2008, by Wells Fargo & Company,
Wells Capital Management Incorporated and Wells Fargo Funds
Management, LLC. According to the Schedule 13G/A, as of
December 31, 2007, Wells Fargo & Company reported
that it beneficially owned 6,815,657 Intermec shares, of which
it had sole power to vote 6,447,986 Intermec shares, had sole
power to dispose of 6,798,638 Intermec shares and shared power
to dispose of 1,000 Intermec shares. Wells Capital Management
Incorporated reported that it beneficially owned 6,608,281
Intermec shares, of which it had sole power to vote
1,629,200 shares and sole power to dispose of
6,608,281 shares. Wells Fargo Funds Management, LLC
reported that it beneficially owned 4,817,586 Intermec shares,
of which it had sole power to vote 4,817,586 shares and
sole power to dispose of 116,457 shares. |
|
(d) |
|
Information presented is based on a Schedule 13G/A filed on
February 14, 2008, by FMR LLC and Edward C.
Johnson, III. According to the Schedule 13G/A, FMR LLC
reported that it was beneficial owner of 5,545,445 Intermec
shares, of which it had sole power to dispose of
5,545,445 shares. Mr. Johnson reported that he
beneficially owned 5,545,445 Intermec shares, of which he had
sole power to dispose of 5,545,445 shares. FMR LLC and
Mr. Johnson reported that several entities under their
control have the sole power to dispose of or direct the
disposition of and the sole power to vote or direct the vote of
all or a portion of these Intermec shares. |
|
(e) |
|
Information presented is based on a Schedule 13G, filed on
February 14, 2008, by Lord, Abbett & Co. LLC.
According to the Schedule 13G, as of December 31,
2007, Lord, Abbett & Co. LLC reported that it
beneficially owned 4,378,090 Intermec shares, of which it had
sole power to vote 4,071,909 and had sole power to dispose of
4,378,090 shares. |
|
(f) |
|
Information presented is based on a Schedule 13D, filed on
November 20, 2007, by GAMCO Investors, Inc., Gabelli Funds,
LLC, GAMCO Asset Management Inc., Gabelli Securities, Inc., MJG
Associates, Inc., GGCP, Inc. and Mario J. Gabelli. According to
the Schedule 13D, as of November 16, 2007, GAMCO
Investors, Inc. reported that it beneficially owned and had sole
power to vote and dispose of 11,000 Intermec shares. Gabelli
Funds, LLC reported that it beneficially owned and had sole
power to vote and dispose of 467,456 Intermec shares. GAMCO
Asset Management Inc. reported that it beneficially owned
3,438,745 Intermec shares, of which it had sole power to vote
3,339,479 shares and sole power to dispose of
3,438,745 shares. Gabelli Securities, Inc. reported that it
beneficially owned and had sole power to vote and dispose of
8,000 Intermec shares. MJG Associates, Inc. reported that it
beneficially owned and had sole power to vote and dispose of
26,000 Intermec shares. GGCP, Inc. and Mario J. Gabelli each
reported beneficial ownership of zero Intermec shares. |
|
(g) |
|
The percent of class outstanding reported on this table is based
on 61,490,337 shares of our common stock outstanding as of
March 24, 2008. |
19
Beneficial
Ownership of Directors and Management
The following table sets forth information regarding the
beneficial ownership of our common stock as of March 24,
2008 for each of our directors, each of our named executive
officers and all of our directors and executive officers as a
group. Except as otherwise indicated, and except to the extent
that any transfers of shares of Restricted Stock and of
Restricted Stock Units are prohibited prior to the satisfaction
of the terms of the award, each director and named executive
officer either has sole investment and voting power with respect
to the securities shown or shares investment
and/or
voting power with that individuals spouse.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
Amount and Nature of
|
|
|
of Class
|
|
Directors and Officers
|
|
Beneficial Ownership
|
|
|
(i)
|
|
|
Fredric B. Anderson
|
|
|
129,711
|
(a)(b)(d)(g)
|
|
|
*
|
|
Patrick J. Byrne
|
|
|
5,000
|
(g)
|
|
|
*
|
|
Larry D. Brady
|
|
|
508,344
|
(a)(g)
|
|
|
*
|
|
Kenneth L. Cohen
|
|
|
214,131
|
(a)(b)(d)(g)
|
|
|
*
|
|
Janis L. Harwell
|
|
|
117,589
|
(a)(b)(g)
|
|
|
*
|
|
Gregory K. Hinckley
|
|
|
51,814
|
(a)(g)
|
|
|
*
|
|
Lydia H. Kennard
|
|
|
64,065
|
(a)(g)
|
|
|
*
|
|
Allen J. Lauer
|
|
|
77,564
|
(a)(c)(e)(g)
|
|
|
*
|
|
Lanny H. Michael
|
|
|
45,675
|
(a)(d)(g)
|
|
|
*
|
|
Stephen P. Reynolds
|
|
|
33,573
|
(a)(g)
|
|
|
*
|
|
Steven B. Sample
|
|
|
91,799
|
(a)(c)(f)(g)
|
|
|
*
|
|
Oren G. Shaffer
|
|
|
32,370
|
(a)(c)(g)
|
|
|
*
|
|
Steven J. Winter
|
|
|
27,619
|
(g)
|
|
|
*
|
|
Larry D. Yost
|
|
|
88,053
|
(a)(c)(g)
|
|
|
*
|
|
All directors and executive officers (20 persons)
|
|
|
1,613,182
|
(h)
|
|
|
2.59
|
%
|
|
|
|
* |
|
Less than 1%. |
|
(a) |
|
Includes the following shares of common stock subject to
outstanding options that were exercisable on March 24,
2008, or become exercisable within 60 days thereafter,
pursuant to stock options awarded under our plans: |
|
|
|
|
|
Board of Directors
|
|
Shares
|
|
Mr. Hinckley
|
|
|
47,500
|
|
Ms. Kennard
|
|
|
57,500
|
|
Mr. Lauer
|
|
|
60,000
|
|
Mr. Reynolds
|
|
|
30,000
|
|
Dr. Sample
|
|
|
70,000
|
|
Mr. Shaffer
|
|
|
23,151
|
|
Mr. Yost
|
|
|
60,000
|
|
|
|
|
|
|
Executive Officers
|
|
Shares
|
|
Mr. Anderson
|
|
|
38,900
|
|
Mr. Brady
|
|
|
184,000
|
|
Mr. Cohen
|
|
|
76,267
|
|
Ms. Harwell
|
|
|
60,000
|
|
Mr. Michael
|
|
|
14,200
|
|
|
|
|
(b) |
|
Includes 48,500 shares held by The Intermec Foundation (the
Foundation). Voting and investment power with
respect to these shares is exercised by the Foundations
officers, who are elected by the directors of the Foundation.
Mr. Anderson, Mr. Cohen and Ms. Harwell are the
directors of the Foundation. Such |
20
|
|
|
|
|
individuals, by virtue of their ability to elect the officers of
the Foundation, may be deemed indirectly to beneficially own
such shares for certain purposes within the meaning of the SEC
regulations referred to above. These shares are included only
once in the total of All directors and executive
officers. |
|
(c) |
|
Includes the following shares of common stock credited to the
directors deferred accounts as bookkeeping entries under
the 2002 Plan: |
|
|
|
|
|
Board of Directors
|
|
Shares
|
|
Mr. Lauer
|
|
|
16,564
|
|
Dr. Sample
|
|
|
21,299
|
|
Mr. Shaffer
|
|
|
7,219
|
|
Mr. Yost
|
|
|
24,053
|
|
|
|
|
(d) |
|
Includes 31,475 shares held by the Intermec Pension Plan.
Voting and investment power with respect to these shares is
exercised by a committee appointed by the Board of Directors.
The current members of this committee are Mr. Anderson,
Mr. Cohen, Mr. Michael and another employee of
Intermec. These shares are included only once in the total of
All directors and executive officers. |
|
(e) |
|
Includes 1,000 shares held by a family trust of which
Mr. Lauer is a trustee. |
|
(f) |
|
Includes 500 shares held by a family trust of which
Dr. Sample is a trustee. |
|
(g) |
|
Includes the following shares held by our directors and
executive officers pursuant to stock ownership guidelines
adopted by the Board. See Director Compensation. |
|
|
|
|
|
Board of Directors
|
|
Shares
|
|
Mr. Hinckley
|
|
|
4,314
|
|
Ms. Kennard
|
|
|
6,565
|
|
Mr. Lauer
|
|
|
17,564
|
|
Mr. Reynolds
|
|
|
3,573
|
|
Dr. Sample
|
|
|
21,799
|
|
Mr. Shaffer
|
|
|
9,219
|
|
Mr. Yost
|
|
|
28,053
|
|
|
|
|
|
|
Executive Officers
|
|
Shares
|
|
Mr. Anderson
|
|
|
13,503
|
|
Mr. Brady
|
|
|
324,344
|
|
Mr. Byrne
|
|
|
5,000
|
|
Mr. Cohen
|
|
|
57,889
|
|
Ms. Harwell
|
|
|
49,089
|
|
Mr. Michael
|
|
|
20,000
|
|
Mr. Winter
|
|
|
27,619
|
|
|
|
|
(h) |
|
Includes 880,778 shares issuable on exercise of outstanding
options that are held by all directors and executive officers
and are exercisable within 60 days of March 24, 2008. |
|
(i) |
|
The percent of class outstanding reported on this table is based
on 61,490,337 shares of our common stock outstanding as of
March 24, 2008. |
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that our
executive officers, directors and persons who own more than 10%
of a registered class of our equity securities file reports of
ownership and changes in ownership with the SEC and the NYSE.
SEC regulations also require us to identify in this proxy
statement any person subject to this requirement who failed to
file any such report on a timely basis.
21
Based on our review of the reports we have received and written
representations that no other reports were required for 2007, we
believe that all Section 16(a) reporting requirements
applicable to our executive officers, directors and persons who
own more than 10% of a registered class of our equity securities
in 2007 were satisfied in a timely fashion.
CERTAIN
RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS
Policies,
Procedures and Practices
In March 2007, our Board of Directors adopted a written policy
and procedure (the Procedure) for the Audit
Committees review and approval or ratification of
transactions with a related person that must be disclosed under
the SECs disclosure rule for related person transactions
(Item 404(a) of
Regulation S-K).
Under the Procedure, our directors, officers and employees are
required to promptly report related person transactions to our
General Counsel. There are special processes for transactions
involving the General Counsel or a member of the Audit Committee
so that these matters are addressed by disinterested persons.
The Procedure requires that a list of related person
transactions be compiled and reviewed regularly, and that our
directors and officers report any related person transactions
that are not on the list. We also regularly review our accounts
payable and accounts receivable data to determine whether there
are any previously unreported related person transactions. The
Procedure requires us to evaluate our controls and procedures
for reporting related person transactions and make changes as
appropriate.
A transaction covered by the Procedure and identified before
being entered into generally must be submitted to the Audit
Committee for approval before the transaction is consummated.
Otherwise, the transaction must be revocable in the event it is
not approved or ratified by the Audit Committee at its next
regular or special meeting. There are categories of transactions
that are deemed to be pre-approved, generally because they are
under $120,000 in value or are not required to be disclosed
pursuant to SEC rules. These latter transactions are disclosed
to the Audit Committee at least annually. Previously approved or
ratified related person transactions that remain ongoing also
are to be reviewed at least annually. In deciding whether to
approve or ratify a related person transaction, the Audit
Committee considers a number of factors to determine whether the
transaction is in the best interests of the Company, including,
among others, the purpose and potential benefit of the
transaction to us, the extent of the related persons
interest in the transaction and the terms of the transaction in
relation to doing such a transaction with an unrelated third
party.
REPORT OF
THE AUDIT AND COMPLIANCE COMMITTEE
The Board of Directors has adopted a written charter for the
Audit Committee (the Audit Charter). The Audit
Charter is available on our Corporate Governance Webpage, as
specified in Corporate Governance Availability
of Information and Communications with the Board.
In accordance with the provisions of our charter, we have
(i) reviewed and discussed the Companys audited
consolidated financial statements for the year ended
December 31, 2007, with management, (ii) discussed
with the Companys independent registered public accounting
firm, Deloitte & Touche LLP, the matters required to
be discussed by Statement on Auditing Standards No. 61
(Codification of Statements on Auditing Standards, AU
§ 380), as modified or supplemented,
(iii) received the written disclosures and the letter from
Deloitte required by Independence Standards Board Standard
No. 1 Independence Discussions with Audit
Committees, as modified or supplemented, and
(iv) discussed with Deloitte its independence from the
Company.
As part of our responsibilities under our charter, we reviewed
with the Companys General Counsel whether there were any
legal matters that have had or are likely to have a material
impact on the Companys financial statements. We also
reviewed the Companys compliance with the Intermec
Standards of Conduct.
In addition, we met with Deloitte prior to the filing of each of
the Companys quarterly reports on
Form 10-Q
to discuss the results of its review of the financial
information included in those reports.
22
Management has represented to the Committee, and Deloitte has
confirmed, that the Companys audited consolidated
financial statements were prepared in accordance with accounting
principles generally accepted in the United States.
In performing our oversight function, we relied on advice and
information received in our discussions with the Companys
management, internal auditors and Deloitte. This advice and
information was obtained at 12 Committee meetings held in person
or telephonically during the year, during which we engaged both
management and Deloitte in discussions. During five of these
meetings, we met separately with the Companys internal
auditors and then with Deloitte. Based on the review and
discussions referred to above, we recommended to the Board of
Directors that the Companys audited consolidated financial
statements for the year ended December 31, 2007, be
included in the Companys
Form 10-K.
The Audit and Compliance Committee
Oren G. Shaffer, Chair
Gregory K. Hinckley
Stephen P. Reynolds
Steven B. Sample
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
The aggregate fees we paid to Deloitte & Touche LLP,
the member firm of Deloitte Touche Tohmatsu and their respective
affiliates, for the years ended December 31, 2007 and 2006
were as follows (amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Audit Fees(a)
|
|
$
|
2,708
|
|
|
$
|
2,275
|
|
Audit-Related Fees
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Total Audit and Audit-Related Fees
|
|
$
|
2,708
|
|
|
$
|
2,275
|
|
|
|
|
|
|
|
|
|
|
Tax Fees(b)
|
|
|
309
|
|
|
|
572
|
|
Other Fees
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(a) |
|
Includes fees billed for the audit of our annual financial
statements for the years ended December 31, 2007 and 2006
included in our annual reports on
Form 10-K
and for the reviews of interim financial information included in
our quarterly reports on
Form 10-Q. |
|
(b) |
|
Includes fees for review of tax returns and consultations
related to tax matters for the years ended December 31,
2007 and 2006. |
The Audit Committees policy is that all audit and
non-audit services to be performed by our independent registered
public accounting firm must be approved in advance. The policy
permits the Audit Committee to delegate pre-approval authority
(except with respect to services related to internal controls)
to one or more of its members and requires any member who
pre-approves services pursuant to that authority to report the
decision to the full Committee no later than its next scheduled
meeting. The Audit Committee has delegated such authority to its
Chair.
PROPOSAL 2.
RATIFICATION
OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Audit Committee has reappointed the firm of
Deloitte & Touche LLP to serve as our independent
registered public accounting firm for 2008. Deloitte has served
as our independent auditors since we became a
23
public company in 1997, is familiar with our business and
operations and has offices in most of the countries in which we
conduct business. In making this appointment, the Audit
Committee considered whether the provision of the services other
than the services described under Audit Fees and
Audit-Related Fees is compatible with maintaining
the independence of Deloitte, and has concluded that the
provision of such services is compatible with maintaining their
independence.
As a matter of good corporate governance, the Audit Committee
has determined to submit its selection of the independent
registered public accounting firm to our stockholders for
ratification. In the event that this selection of Deloitte is
not ratified by a majority of the shares present or represented
at the Annual Meeting and entitled to vote on the matter, the
Audit Committee will review its future selection of an
independent registered public accounting firm.
Representatives of Deloitte are expected to be present at our
Annual Meeting. They will have the opportunity to make a
statement if they desire to do so and are expected to be
available to respond to appropriate questions.
RECOMMENDATION
The Board of Directors unanimously recommends that you vote
FOR Proposal 2.
EXECUTIVE
COMPENSATION
Executive
Summary
This Compensation Discussion and Analysis describes the
compensation policies and decisions of the Compensation
Committee (the Committee) with respect to
Intermecs executive officers, including the named
executive officers who are shown in the Summary Compensation
Table below.
Objectives. The focus of our executive
compensation program is to motivate and reward performance that
maximizes short-term and long-term stockholder value. The design
and operation of the program reflect the following objectives:
|
|
|
|
|
Performance. Motivate executives to achieve
superior performance by placing a significant portion of total
compensation at risk.
|
|
|
|
Stockholder value. Correlate compensation paid
to executives with short-term and long-term business and
financial performance.
|
|
|
|
Retention. Attract and retain executives by
offering a competitive total compensation package.
|
Elements of Compensation. The main components
of our executive compensation program are base salary and
variable annual and long-term incentives that are designed to
emphasize at-risk, performance-based compensation.
|
|
|
|
|
Annual incentives are based on financial objectives that
directly relate to our near-term financial goals.
|
|
|
|
The long-term incentive program is a combination of stock
options and performance shares. Stock options are designed to
align executives interest with those of stockholders by
providing an incentive to increase stock price through positive
business and financial performance. Performance shares are
three-year incentives that link payouts to achieving internal
financial objectives that directly relate to our long-term
business plan. The long-term compensation program also includes
stock ownership guidelines to ensure that our executives
maintain a meaningful stake in the equity of the Company and to
further align the interests of the executives with the long-term
interests of our stockholders.
|
24
Determining
Executive Compensation
The Compensation Committee is responsible for establishing our
executive officer compensation philosophy and related policies
and practices, and sets all executive officer compensation. The
Committee receives recommendations from the CEO with respect to
compensation of the other executive officers, and receives
support from the Vice President of Human Resources in
discharging its duties and responsibilities. The Committee works
with outside compensation consultants for advice and perspective
on various aspects of executive compensation. For more
information about the role and processes of the Committee, see
Corporate Governance Board Committees,
Compensation Committee above.
In 2007, the Committee reviewed tally sheets for each of our
executive officers, showing (i) the estimated value of each
element of the executive officers current, long-term,
deferred and post-retirement compensation, including base and
incentive, cash and equity compensation, and (ii) the
estimated total value of the executive officers
compensation. The Committee used the information in the tally
sheets together with peer group data and information about
individual contribution to assess the reasonableness of each
executive officers total direct compensation, each element
of that compensation and the mix of compensation elements. The
Committee intends to continue to use information presented in
this general format in its decision-making processes.
Competitiveness
of the Executive Compensation Program
Benchmarking. We use peer group benchmarking
data as a reference point to assess the competitiveness of each
executive officers at-target total direct compensation. In
selecting peer technology companies for executive compensation
benchmarking purposes, the Committee found that there are too
few comparable companies in the automated identification and
data collection (AIDC) market to provide a broad
sample for comparisons. Therefore the Committee also included
non-AIDC technology firms of similar size and scale and with
similar business and financial characteristics. For 2007, as for
2006, the Committee used two peer groups selected by its outside
compensation consultant, Hewitt Associates, because neither
group alone provided an adequate pool of comparable executive
positions for comparison purposes. One group, consisting of 24
selected companies (the Direct Peer Group), provided
a significant pool of CEO and Chief Financial Officer
(CFO) data for comparison purposes. The other group,
consisting of 48 companies from the Radford Technology
survey (the Survey Peer Group), increased the CEO
and CFO pool and allowed the Committee to match our other
executive officer positions with more precision. Twelve of the
Direct Peer Group companies were also in the Survey Peer Group,
and of the sixty total companies included in the two surveys,
eight were competitors in the AIDC market. The companies in the
two peer groups were substantially the same for 2007 as for 2006.
The criteria used to select companies for the Direct Peer Group
and the Survey Peer Group were the same in that the companies
included were in technology industries and had annual sales
similar to ours, falling within a range in which Intermecs
annual revenue is the midpoint. A peer company also had a market
capitalization and enterprise value (i.e., market capitalization
plus the book value of debt less cash) similar to
Intermecs.
In May 2007, the Committee retained Frederic W. Cook &
Co., Inc. as its outside compensation consultant. FWC
recommended and the Committee approved a peer group comprised of
16 publicly traded office electronics and computer storage and
peripheral companies listed below. As of the most recent fiscal
year-end, our market capitalization was at the
59th
percentile of this group. We believe these companies are broadly
comparable to us in terms of labor and capital market
competition, revenues, profit margins and market capitalization
value. This peer group was used by FWC to advise the Committee
on Mr. Byrnes compensation package in 2007, and 2008
compensation for Mr. Byrne and the other executive
officers. FWC
25
will review this peer group regularly and make adjustments as
necessary to ensure that the peer group continues to be
relevant. The companies included in the peer group were:
|
|
|
|
|
Adaptec
|
|
Komag
|
|
Synaptics
|
Brocade Communications
|
|
Novatel Wireless
|
|
Tektronix
|
Electronics for Imaging
|
|
Palm
|
|
Western Digital
|
Emulex
|
|
QLogic
|
|
Zebra Technologies
|
Hutchinson Technology
|
|
Quantum
|
|
|
Imation
|
|
Rackable Systems
|
|
|
Market Position. We benchmark each executive
officers total direct compensation (base salary and annual
and long-term incentives at the target level) relative to
approximately the 50th percentile for total direct
compensation among peer group companies. The Committee does not
set executive compensation solely by reference to peer group
data, but exercises its judgment in determining appropriate
compensation, giving consideration to the Companys overall
performance, the executives particular position and scope
of responsibility within our Company, the executives
performance, and the total direct compensation mix.
The Committees policies are consistently applied among all
of our executive officers, including the CEO. Our CEOs
compensation is reviewed in the context of the higher market
position of compensation for CEOs generally. The Committee
believes that the CEO position merits a higher level of
compensation relative to other named executive officers both
because of its critical role in the strategy and performance of
the business and because of the need to attract and retain
talented executives to fill this role.
Components
of the Executive Compensation Program
Total Direct Compensation Mix. The
Committees decisions about compensation for the named
executive officers are intended to emphasize performance-based
compensation. A majority of the total direct compensation of our
executive officers is at-risk, performance-based compensation.
For example, for our current named executive officers as a group
(other than Mr. Byrne), the percentage of their aggregate
2007 target total direct compensation that was at-risk at the
time it was initially approved was 69.1%; base salaries
comprised the other 30.9%. We define the at-risk components (and
their respective percentages) of 2007 target total direct
compensation to include: the 2007 target annual cash incentive
(18.4%); and the long-term incentive awards made in 2007
(50.7%), consisting of the fair value of the stock options and
the grant date value of the target number of performance shares
units (PSUs). These percentages were calculated by
dividing (i) the total at-risk compensation amount by
(ii) target total direct compensation, which includes the
at-risk compensation plus base salaries. This combination of
elements of total direct compensation when approved by the
Committee was consistent with practices among the peer group
companies. Mr. Byrnes compensation is discussed under
Named Executive Officer Compensation below.
Base Salary. Base salaries are a primary
executive retention and recruitment tool. The Committee believes
that it is essential to offer some form of non-contingent
compensation to attract and retain qualified executives. In
keeping with past practice, salaries for 2007 were determined in
November of 2006, with the increase becoming effective for each
named executive officer on the anniversary of his or her date of
hire or most recent promotion. For 2008, salaries were
determined in November 2007 for the following year, with the
increase becoming effective for each executive on January 1.
Generally, the Committee targets base salary for named executive
officers performing at expectation to be at
approximately the 50th percentile of compensation paid to
similar officers in our peer group companies. The Committee
believes that outstanding performers can be paid above median,
and truly exceptional performers can be paid well above median.
Although peer benchmarking establishes the median for total
compensation, whether a named executive officers base
salary is at, above or below that median for similar executive
positions in the peer groups is based in part on a subjective
assessment of the officers individual performance. The
Committee assesses the performance of the CEO, and discusses
with the CEO his assessment of the individual performance of the
other named executive officers. Generally, these assessments
consider such factors as the officers contribution (in his
or her area of responsibility) to business initiatives intended
to deliver financial or strategic value to the
26
Companys performance goals, or an officers strategic
leadership toward these goals, or whether an officer has assumed
a greater scope of responsibility than counterparts at peer
companies. No specific weight is given to any one objective or
performance factor. The Committees approval of salary
levels reflects an overall assessment of how well each named
executive officer performed his or her job. Regardless of any
subjective assessment of individual performance, Company
performance generally has been the overriding factor in setting
base salaries.
Base salary decisions with respect to individual named executive
officers are discussed under Named Executive Officer
Compensation below.
Annual Cash Incentive Program. The Management
Incentive Compensation Plan is an annual cash bonus program
designed to motivate participants to achieve short-term business
and financial goals. The participants in the MICP include the
named executive officers, other officers and specified
management employees. All participants are assigned individual
target opportunities for MICP payments that for our named
executive officers range from 50% to 100% of their annual
salaries. Consequently, increases or decreases in a
participants base salary affect his or her MICP
opportunity. Participants can earn from 0% to 150% of their
target payout, based on the Companys financial performance.
The MICP performance goals for the past three years have been
(1) earnings before tax from continuing operations
(EBT), which has represented 70% of the overall
goal, and (2) average net capital utilized as a percentage
of sales, which has represented 30% of the overall goal. Net
capital utilized (NCU) is defined as equity plus
debt and retirement obligations, less cash, cash equivalents and
short-term investments. Average NCU (ANCU) is the
average of the 12 month-end balances of NCU during the
year. ANCU as a percentage of revenue is a non-GAAP measure that
supplements traditional accounting measures to evaluate our
effectiveness at managing capital deployed and generate
liquidity as revenue fluctuates. The Committee and management
believe that these goals are appropriate measures of performance
in the operation of the business. They provide evidence of
efficient growth in our earnings and are closely linked to the
creation of stockholder value. When set, the specific annual
targets are intended to be achievable if the business performs
in a manner consistent with its plans.
Company performance alone determines whether MICP goals are
achieved and the extent to which the participants receive their
MICP payments. Individual performance is not a factor. However,
apart from the MICP, the Committee has discretion to award a
supplemental bonus payment based on individual performance
factors as it deems appropriate.
2007 MICP Goals and Payouts. In March 2007,
MICP target performance goals were assigned to all participants
as (1) earnings before tax from continuing operations of
$57.4 million and (2) ANCU as a percentage of sales of
45.6%.
When Mr. Byrne became CEO at approximately the midpoint of
the year, he was assigned performance targets based on our
updated plan for Company performance for the period July 1
through December 31, 2007 of (1) EBT of
$28.9 million and (2) ANCU as a percentage of sales of
44.1%. To align the performance objectives and incentives of
incumbent participants (other than Mr. Brady) with the
performance objectives and incentives established for the new
CEO, their performance targets were amended such that the
performance components for the first half of 2007 remained the
same as were expected under the original 2007 MICP performance
targets and the performance components for the second half of
2007 reflected the business performance expectations underlying
the targets set for Mr. Byrne. Since Mr. Brady stepped
down from the position of CEO at approximately the midpoint of
the year, his MICP performance targets were not adjusted for the
second half of the year.
27
2007 MICP
Goal Levels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
|
Weighted Actual
|
|
Metric (Weighting)
|
|
Target
|
|
|
Attainment
|
|
|
Attainment
|
|
|
|
(Dollars in millions)
|
|
|
|
|
|
Mr. Byrne
|
|
|
|
|
|
|
|
|
|
|
|
|
EBT (70%)
|
|
$
|
28.9
|
|
|
$
|
31.4
|
|
|
|
84.7
|
%
|
ANCU (30%)
|
|
|
44.5
|
%
|
|
|
42.6
|
%
|
|
|
41.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
125.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Named Executive Officers except Mr. Brady
|
|
|
|
|
|
|
|
|
|
|
|
|
EBT (70%)
|
|
$
|
41.3
|
|
|
$
|
39.2
|
|
|
|
63.8
|
%
|
ANCU (30%)
|
|
|
47.3
|
%
|
|
|
46.1
|
%
|
|
|
39.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
103.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Brady only
|
|
|
|
|
|
|
|
|
|
|
|
|
EBT (70%)
|
|
$
|
57.4
|
|
|
$
|
39.2
|
|
|
|
16.8
|
%
|
ANCU (30%)
|
|
|
45.6
|
%
|
|
|
46.1
|
%
|
|
|
26.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
43.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The payout is calculated using the actual amount of base salary
paid during the year, which has the effect of prorating the
payout to the amount of time during the year that the individual
was employed by the Company. In addition, under the 2007 MICP,
the employee also was required to be employed as of the date of
payment; an exception was made for Mr. Brady in connection
with his retirement arrangements.
2008 MICP. In the 2008 MICP, the Committee
used two matrices with the following weightings:
(1) operating profit relative to revenue (70%) and
(2) operating profit relative to average invested capital
(30%). The Committee believes that these are appropriate
measures of company performance because the value of a company
tends to increase when its revenue and operating profits are
growing while invested capital is flat or declining. Target
bonus opportunities for our named executive officers, expressed
as a percentage of base salary, are the same in the 2008 MICP as
they were in the 2007 MICP.
Long-Term
Equity Incentive Programs
General. The long-term equity incentive
program is designed to provide a direct link between executive
compensation and long-term stockholder value creation. The value
of the long-term incentive opportunity granted to an executive
officer in any year is divided between stock options and a
three-year performance-based program paid out in the form of
common stock. The number of stock options granted is calculated
by applying a Black-Scholes formula to a target value. The
number of performance shares at target that may be earned under
the performance share program is determined by the
Committees assessment of the overall value of the
long-term incentive opportunity relative to peer company
comparisons, and has been one-third the number of options
granted in some years and in 2007 was one-fourth the number of
options granted to our named executive officers.
Stock options are intended to align executives interests
with those of stockholders, by providing an incentive to
increase stock price through positive business and financial
performance. The stock options only have value to the recipients
if the price of the Companys stock appreciates after the
options are granted. The performance share opportunity provides
an incentive to achieve particular business and performance
metrics over a multi-year period.
In setting the value of the long-term incentive opportunity for
an individual executive officer and for the executive officers
as a group, the Committee considers Company performance, the
long-term incentive opportunities provided by our peer group
companies to their executive officers and the competitiveness of
our total direct compensation for executive officers relative to
total direct compensation of similar officers in our
28
peer group companies. The value set is the Committees
subjective determination after considering these factors.
Restricted stock units are granted from time to time as
retention or promotion awards.
Stock Option Grants. Stock options are granted
with an exercise price equal to the fair market value of the
Companys common stock on the grant date, generally vest in
equal annual installments over five years and expire ten years
after the date of grant. Stock options are granted as incentive
stock options to the extent permitted under applicable Code
rules, and the remaining options are granted as nonqualified
stock options.
2008 Stock Option Grants. Beginning in the
second quarter of 2008, we intend to grant only non-qualified
stock options that generally will vest in equal annual
installments over four years. We will continue to grant stock
options with an exercise price equal to the fair market value of
the Companys common stock on the grant date and that
expire ten years after the date of grant.
Performance Share Unit Program. The primary
purpose of PSUs is to provide a competitive long-term incentive
program that will reward executive officers and other
participants for overall success in the Companys financial
performance. Participants receive payouts in the form of common
stock at the end of the performance period, in an amount
dependent on the degree to which the assigned targets were
achieved.
The Committee establishes target awards of PSUs for each
participant at the beginning of each three-year performance
cycle; a new three-year performance period begins each year. The
performance targets relate to Company, rather than individual,
performance. In establishing the targets, the Committee takes
into account its subjective assessment of the degree of
difficulty in achieving the target values. The targets are
intended to be achievable if the business performs in a manner
which is consistent with its plans, but the achievement of the
at-target value is not intended to be a certainty. Participants
can earn from 0% to 200% of their target PSU award based on the
Companys performance against the assigned targets.
2007-2009
and Earlier PSU Programs. The performance
measures for the performance cycles beginning before 2008 were
the Companys cumulative three-year financial performance
on two equally weighted metrics: return on average net capital
utilized (RANCU) and diluted earnings per share from
continuing operations (EPS-CO). For the performance
cycles beginning in 2005 and 2006, the calculation of cumulative
RANCU has and will be made only with reference to continuing
operations of the Company for the relevant three-year
performance period. RANCU is calculated as operating
profit from continuing operations divided by ANCU. RANCU
is a non-GAAP measure that supplements traditional accounting
measures to evaluate our financial return in a given period,
relative to our ANCU.
The Committee believes that EPS-CO and RANCU are appropriate
measures of company performance since growth in EPS is direct
evidence that the value of the Company to stockholders has
increased and growth in RANCU demonstrates that the growth in
EPS was achieved in an efficient manner with respect to invested
capital. The Committee also believes that the PSU Program
targets it has established are achievable but quite challenging.
In fact, no payouts were made for the
2005-2007
performance cycle as the Company did not meet the minimum
cumulative three-year RANCU and EPS-CO targets.
RANCU and EPS-CO targets for the
2006-2008
and
2007-2009
performance cycles were amended in July 2007 to align the
performance objectives and incentives of incumbent participants
(other than Mr. Brady) with the performance objectives and
incentives established for Mr. Byrne based on our updated
plan for Company performance for the periods included in each of
the cycles. The amended performance targets of the
2006-2008
performance cycle were set such that performance consistent with
the plan used to set the performance targets for Mr. Byrne
would result in only a partial payout to incumbent participants.
Since Mr. Brady ceased being CEO in July 2007, his
performance targets for the
2006-2008
and
2007-2009
performance cycles were not adjusted, and no payout is expected.
2008 PSU Program. The Committee has revised
the PSU Program for 2008 to utilize the following two financial
goals weighted as follows: EPS-CO (70%) and revenues (30%). The
achievement of each goal will be separately determined as a
percentage of target as of the end of each fiscal year in the
three-year performance period. The total payout for the
performance period will be based on the three-year average of
29
results under the applicable goal. The structure and terms of
the PSU Program otherwise were not amended. The Committee
believes that the performance measures selected for 2008, EPS-CO
and revenues, are appropriate measures of Company performance
because they are aligned with the Companys desire to grow
revenue and profitability. Revenue is a key indicator of the
growth of our business, and EPS-CO is a key indicator of the
value of the business to stockholders. The Committee also
believes that the revised structure of the PSU Program is an
appropriate tool to encourage and reward consistent progress
toward the goals set at the inception of each
3-year
performance period, because the target is the average of annual
achievement levels, rather than a cumulative goal.
Named
Executive Officer Compensation
Mr. Byrne, CEO. Mr. Byrne joined the
Company in July 2007. In connection with his appointment as CEO
and President, the Committee approved an annual base salary of
$600,000, which is at the
50th percentile
of the compensation peer group companies used by the Committee
at the time of his appointment. The development of
Mr. Byrnes compensation package, including his base
salary, 300,000 stock options and 83,350 performance shares, was
consistent with the Committees understanding of market
practices for recruiting a senior level executive, and took into
consideration the findings and recommendations of the
Committees outside compensation consultant.
Mr. Brady, former CEO. Mr. Brady
resigned as Chairman, CEO and President in July 2007 and retired
from the Company in December 2007. His salary, which had been
decreased for 2006 at his request to better align with the base
salary of his peers in technology industries, was not increased
for 2007. Mr. Bradys base annual salary for 2007
remained at the
50th percentile
of the compensation peer group used by the Committee in 2006. In
connection with his retirement in December 2007, the Committee
accelerated the vesting of certain stock options held by
Mr. Brady and provided that these options may be exercised
for a three-year post-retirement period. Because of his
retirement, all other previously vested options may be exercised
by Mr. Brady through the end of the original ten-year term,
in accordance with the original terms of the grants.
Base Salaries. The base salaries set by the
Committee for the other named executive officers reflect the
peer group analysis and subjective assessment of the
executives performance described above. Because Company
performance was below expectations, most of the other named
executive officers received modest salary increases for 2007.
The aggregate increase in base salaries of all of the other
named executive officers was approximately 3.5% over the
aggregate of their 2006 base salaries.
Mr. Byrnes salary was not reviewed in November 2007
because he had recently joined the Company the previous July.
The aggregate increase in base salaries of all of the other
named executive officers was approximately 1% over the aggregate
of their 2007 base salaries. This percentage also reflects the
adjustments made to normalize the effective date of all
increases to January 1, 2008.
Annual Incentive Awards. In February 2008, the
Committee considered the extent to which we achieved the
performance goals under the 2007 MICP and determined that the
goals were achieved above the performance goal target for
Mr. Byrne and continuing management, and above the
performance goal threshold but below target for Mr. Brady.
All of the current named executive officers received a payment
as determined by the formula of the MICP, which has been
reported in the Non-Equity Incentive Plan
Compensation column of the Summary Compensation Table.
Mr. Brady also received a payment pursuant to the
arrangements made in connection with his retirement.
Mr. Winter was not eligible to receive a payment.
Long-Term Equity Incentive Grants. In 2007,
our named executive officers received stock option grants and
performance share unit awards for the
2007-2009
performance cycle. All of these grants and awards were made on
the same date. Mr. Byrnes grants and awards were made
on the date he was employed by the Company and elected an
officer by our Board. All of these grants are included in the
2007 Grants of Plan-Based Awards table and the
Outstanding Equity Awards at 2007 Fiscal Year-End
table, both below.
30
In addition to these grants, the Committee made a special grant
of restricted stock units to Mr. Anderson in February,
2007, to recognize his service to the Company as Acting Chief
Financial Officer and to provide a retention incentive.
Perquisites
Perquisites are not a material component of any named executive
officers compensation. The Committee eliminated a
previously available allowance for estate planning at the end of
the first quarter of 2007 and provided an allowance for
executive officers to complete pending estate planning
activities by that time.
Beginning in 1997, the Company entered into a program under
which we purchased life insurance coverage on management
employees, including certain of our executive officers. The
program provides a death benefit to beneficiaries of covered
individuals, but the covered individual and his or her
beneficiaries have no other ownership or beneficial interest in
or control over the policies or policy benefits. No additional
employees, including executive officers, have been added to the
program since 2000. The Company paid premiums in 2007 for
policies under this program related to the executive officers
out of the cash value of the program.
Post-Employment
Compensation and Benefits
Before 2006, we were a diversified enterprise with multiple
lines of business, including industrial businesses. At that
time, our post-retirement programs were more typical of our
predecessor industrial companies than technology companies. As
we implemented our plans to become a single line of business
enterprise, the Committee decided to align our executive
compensation programs with those of peer companies in technology
industries. As a result, in 2006, the Committee approved
amendments to our post-employment benefit plans that had the
effect of freezing benefit accruals under the then-current plans
for most participants. The rules used to decide whether the
benefit freeze applied to a named executive officer were the
same rules used to decide whether the benefit freeze applied to
other employees.
Defined Benefit Plans. Certain of our named
executive officers are eligible to participate in the Intermec
Pension Plan (the IPP), a tax-qualified defined
benefit plan, and in our Restoration Plan (the Restoration
Plan) and our Supplemental Executive Retirement Plan (the
SERP), both nonqualified defined benefit plans.
Prior to changes in the Companys structure discussed
above, these retirement plans were considered to be an
appropriate part of a competitive compensation for the kind of
large, diversified industrial business we were at that time. The
Restoration Plan and the SERP were designed to supplement the
benefit provided to executives under the IPP, such that our
executives were provided with a competitive retirement package
and did not receive lower percentages of replacement income
during retirement than other employees due to certain
limitations imposed by the Internal Revenue Code on the IPP and
on the Intermec Financial Security and Savings Program (the
FSSP), which is one of our 401(k) plans.
However, due to changes in the Companys structure and in
the competitive market place, these plans were frozen (and
further accruals ceased) for most employees as of June 30,
2006. In lieu of continued benefit accruals by affected
employees under the IPP, Restoration Plan and SERP, the Company
established a new 401(k) plan (the 401(k) Plan) that
offers a company matching contribution greater than was
available under the FSSP. Neither the freeze nor the increased
matching contribution under the new 401(k) Plan applies to those
employees who were already participating in the plans and whose
age and years of service as of June 30, 2006, when added
together, equaled or exceeded 70 (the Rule of 70).
Those employees who satisfied the Rule of 70 and wish to accrue
additional benefits under the IPP are required to make certain
employee contributions to the FSSP.
Of the Companys named executive officers, Mr. Cohen
is included in the group of employees who satisfied the Rule of
70, and so continues to accrue additional benefits under the
IPP, Restoration Plan and SERP. Mr. Brady and
Mr. Winter also met the Rule of 70 test but they stopped
accruing benefits under the IPP, Restoration Plan and SERP when
they left the Company in 2007. Mr. Anderson and
Ms. Harwell are in the group of employees whose IPP,
Restoration Plan and SERP benefits were frozen, except that
Mr. Anderson
31
was not eligible to participate in the SERP. Mr. Byrne and
Mr. Michael are not eligible to participate in the IPP,
Restoration Plan or SERP because they joined the Company after
June 30, 2006.
Further details regarding the IPP, Restoration Plan and SERP,
including the estimated value of the retirement benefits for
each of the Companys named executive officers, are found
in this proxy statement under the section entitled 2007
Pension Benefits, below. The change in the actuarial
pension value from 2006 to 2007 is presented in the Change
in Pension Value column of the Summary Compensation
Table.
Deferred Compensation Plan. Two of our named
executive officers, Mr. Anderson and Ms. Harwell, are
eligible to participate in the Intermec Deferred Compensation
Plan, which is intended to restore benefits not available to the
executive under the Companys 401(k) Plan due to Internal
Revenue Service limitations imposed on that plan. Mr. Byrne
and Mr. Michael were not eligible until 2008.
Mr. Brady and Mr. Winter were not, and Mr. Cohen
is not eligible to participate in the Deferred Compensation
Plan. Additional information regarding the Deferred Compensation
Plan is shown under 2007 Nonqualified Deferred
Compensation, below.
Post-Termination Benefits. The Company
provides change of control employment agreements to its named
executive officers and also maintains severance plans to provide
benefits following certain terminations of employment. The
change of control employment agreements were substantially
amended in 2006 and the severance plans were adopted in 2007.
Technical amendments also were made to these agreements and
plans in 2007 to conform the change of control definition to the
definition used other of our plans and to conform to new tax
rules regarding deferred compensation. The agreements
established in 2006 reduced the overall package of benefits as
compared with prior change of control employment agreements. The
severance plans require a qualifying termination of employment.
Benefits payable under the change of control employment
agreements and the severance plans are coordinated to avoid any
duplication. The change of control employment agreements and the
severance plans do not require us to retain the executives or to
pay them any specified level of compensation or benefits, and we
have certain rights to modify them without the consent of the
executives.
The 2006 amendments to the change of control employment
agreements and the severance plans were developed based on
benchmarking data provided by an outside consultant, Mercer
Human Resources Consulting. The Committee believes the amended
agreements and plans are competitive with those of peer
companies and that they serve to diminish the distraction of
personal uncertainties in periods of change. The Potential
Payments Upon Termination or Change of Control section,
below, provides additional information regarding the change of
control agreements and severance plans that would provide
compensation and benefits to named executive officers on
termination of employment.
2007
Executive Retention
In March 2007, we announced Mr. Bradys plan to retire
from his position as the Companys CEO following the Board
of Directors identification of his successor.
The Committee considered the extent to which the leadership
transition created significant retention risk with respect to
the Companys named executive officers or other key
managers and the impact that the departure of such individuals
could have on the Companys operations and its transition
to new leadership. The Committee concluded that a significant
retention risk existed with respect to Mr. Winter,
Mr. Michael and Ms. Harwell, and that the departure of
one or more these executives during the leadership transition
could adversely impact the Companys operations and could
complicate the Companys leadership transition. The
Committee also concluded that it was in the best interests of
the Company and its stockholders to try to reduce the retention
risk by putting appropriate retention arrangements in place with
respect to Mr. Winter, Mr. Michael and
Ms. Harwell. The Committee sought to diminish the
inevitable distraction for these individuals by virtue of
personal uncertainties and risks created by the impending
transition of the Companys leadership, to encourage their
full attention and dedication to the Company during that
transition, and to facilitate the transition of the
Companys leadership to a new CEO. Consequently, the
Committee took the following actions on March 30, 2007.
With respect to Mr. Michael and Ms. Harwell, these
actions are reflected
32
in the 2007 Grants of Plan-Based Awards table and
the Estimated Potential Incremental Payments Upon
Termination or Change of Control table below.
Mr. Michael. The Committee modified the
terms applicable to the 20,000 restricted stock units granted to
Mr. Michael on September 14, 2006, when he joined the
Company (the 2006 Grant). If the Company terminates
Mr. Michael prior to March 1, 2009, the 2006 Grant,
which otherwise vests (i.e., becomes unrestricted) on
September 14, 2011, will automatically vest on the date of
termination, unless the termination was for cause. In addition
to the general retention purposes described above, this
contingent acceleration feature is intended to encourage
Mr. Michael to remain with the Company until at least
March 1, 2009.
Ms. Harwell. The Committee modified the
terms applicable to the 20,000 restricted stock units granted to
Ms. Harwell on September 8, 2004, when she joined the
Company (the 2004 Grant). The Committee also
approved an additional grant to Ms. Harwell of 20,000
restricted stock units with a restriction period ending on
March 1, 2009 (the 2007 Grant). If the Company
terminates Ms. Harwell prior to March 1, 2009, the
2004 Grant, which otherwise vests on September 8, 2009, and
the 2007 Grant will both vest automatically on the date of
termination, unless the termination was for cause. In addition
to the general retention purposes described above, the
Committees purpose was to encourage Ms. Harwell to
remain with the Company until at least March 1, 2009.
Mr. Winter. The Committee approved a
future one-time, lump-sum cash payment of $500,000 to
Mr. Winter, to encourage Mr. Winter to remain with the
Company until March 1, 2008. Mr. Winter received this
cash payment when he left the Company in 2007 pursuant to the
terms of the retention arrangement approved by the Committee in
March 2007 which provided for earlier payment in circumstances
other than termination for cause or change of control.
In determining the details of these retention arrangements, the
Committee took into account the experience of the Committee
members and other members of the Board in structuring retention
arrangements under the same or similar circumstances and the
roles and responsibilities of the executives. The Committee also
exercised its judgment about types of arrangements that were
most likely to encourage these executives to remain with the
Company for an appropriate period of time given the
Companys transition to new leadership.
Stock
Ownership Guidelines
We adopted Executive Stock Ownership Guidelines in 2003 to
ensure that our officers (including named executive officers)
have a meaningful stake in the equity of the Company and to
further align the interest of the officers with the long-term
interest of our stockholders. The guidelines, which have been
amended and clarified from time to time, require our CEO
(Mr. Byrne) to retain an amount of Intermec common stock
equal in value to five times his annual base salary before
selling or otherwise transferring ownership of such stock. The
named executive officers who are Senior Vice Presidents
(Mr. Michael and Ms. Harwell) must retain an amount of
Intermec common stock equal in value to three times the
officers annual base salary. For all other named executive
officers and other officers, the stock retention level is one
times the officers annual base salary. Restricted stock
and time-based restricted stock units (which have not vested)
are included in the calculation to determine whether the
guidelines are met, but stock options (whether vested or
unvested), performance shares or other performance-based awards
are not included. As of January 1, 2008, Mr. Anderson,
Mr. Cohen and Ms. Harwell have met the guideline.
Equity
Granting Practices
The Committee makes annual PSU and stock option awards to named
executive officers at its meeting during the second quarter of
the year, which coincides with our annual stockholders
meeting. This Committee meeting also typically occurs during an
open trading window, which is a period when our
insider trading guidelines permit executive officers to engage
in trading in Intermec securities. The Committee meeting date,
or the next following trading day, is the effective date for the
grants. PSU Awards generally have been made at the same meeting
but, beginning in 2008, PSU Awards are made in the first quarter
of the year. The exercise price or strike price is
the fair market value of Intermec common stock on the date of
the grant. The Committee also may approve equity awards
throughout the year for newly hired executive officers or for
33
promotion or retention purposes. These awards are effective on
the date the Committee acts or a subsequent date determined by
the Committee. The exercise price is the fair market value on
the date of grant.
When the Committee makes its annual grant of options, it also
delegates to the CEO, who is also a director of the Company, the
authority to make an annual grant of stock options to employees
other than named executive officers. The number of shares
authorized for this purpose is set by the Committee, and the
grant by the CEO is made on the date the Committee meets to make
grants to named executive officers. At this same meeting, the
Committee delegates to the CEO the authority to grant stock
options and PSUs to employees other than named executive
officers, up to a specific number of shares, until the next
annual meeting of stockholders. The CEO generally uses this
authority to make grants of stock options to newly-hired or
promoted management employees at times other than the annual
stock option grants are made. These grants must be made by
written action of the CEO, and are made effective the
15th day of the month (or the next following trading day,
if a weekend or holiday).
Limits on
Deductibility of Compensation
Section 162(m) of the Code generally limits the tax
deductibility of compensation paid by a public company to its
CEO and certain other highly compensated executive officers who
are in office at the end of the fiscal year to $1 million
per officer in the year the compensation becomes taxable to the
executive. There is an exception to the limit on deductibility
for performance-based compensation that meets certain
requirements. We believe that all of the taxable compensation
for 2007 paid to those of our named executive officers who are
covered by Section 162(m) will be deductible.
The Committees policy is to provide annual incentive
awards, PSUs, stock options and other compensation that are
qualified and fully deductible by the Company under
Section 162(m). However, in order to maintain ongoing
flexibility of the Companys compensation programs, the
Committee has reserved the right to approve incentive and other
compensation, such as time-vested restricted stock units, that
exceeds the $1 million limitation set forth in
Section 162(m) and recognizes that the loss of the tax
deduction may be unavoidable under these circumstances.
REPORT OF
THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors has
reviewed and discussed the Compensation Discussion and Analysis
for fiscal year 2007 (CD&A) with management,
consultants and advisors and based on such review and
discussions, the Compensation Committee has recommended to the
Board of Directors that the CD&A be included in this Proxy
Statement for filing with the SEC.
The Compensation Committee
Larry D. Yost, Chair
Gregory K. Hinckley
Lydia H. Kennard
Oren G. Shaffer
34
SUMMARY
COMPENSATION TABLE
The following table sets forth information regarding the
compensation for each of our named executive officers for the
year 2007 and, where applicable, the year 2006. Pursuant to our
objectives for executive compensation, target direct
compensation for our executive officers consists of
approximately one-half salary and cash incentives and one-half
long-term equity awards. Therefore, the information contained in
the Summary Compensation Table should be viewed
together with the 2007 Grants of Plan-Based Awards
table, which includes target levels for annual incentive awards
and long-term performance share awards, to obtain the most
accurate representation of short-term and the long-term
incentive compensation elements and the total compensation
provided to our named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
|
|
|
|
Salary(a)
|
|
Bonus
|
|
Awards(b)
|
|
Awards(c)
|
|
Compensation(d)
|
|
Earnings(e)
|
|
Compensation(f)
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Byrne, Patrick J.
|
|
|
2007
|
|
|
$
|
246,923
|
|
|
$
|
0
|
|
|
$
|
535,255
|
|
|
$
|
223,647
|
|
|
$
|
320,454
|
|
|
$
|
0
|
|
|
$
|
89,374
|
|
|
$
|
1,415,653
|
|
CEO and President(g)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brady, Larry D.
|
|
|
2007
|
|
|
|
643,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1,760,539
|
|
|
|
278,049
|
|
|
|
152,280
|
|
|
|
3,250
|
|
|
|
2,837,118
|
|
Former Chairman and CEO(h)
|
|
|
2006
|
|
|
|
644,923
|
|
|
|
0
|
|
|
|
42,866
|
|
|
|
695,214
|
|
|
|
133,048
|
|
|
|
267,538
|
|
|
|
6,100
|
|
|
|
1,789,689
|
|
Michael, Lanny H.
|
|
|
2007
|
|
|
|
353,750
|
|
|
|
0
|
|
|
|
343,744
|
|
|
|
91,047
|
|
|
|
255,054
|
|
|
|
0
|
|
|
|
7,200
|
|
|
|
1,050,795
|
|
Senior Vice President and CFO
|
|
|
2006
|
|
|
|
90,192
|
|
|
|
60,139
|
|
|
|
32,502
|
|
|
|
24,401
|
|
|
|
13,025
|
|
|
|
0
|
|
|
|
2,154
|
|
|
|
222,413
|
|
Anderson, Fredric B.
|
|
|
2007
|
|
|
|
202,615
|
|
|
|
0
|
|
|
|
104,260
|
|
|
|
85,574
|
|
|
|
104,347
|
|
|
|
1,789
|
|
|
|
7,097
|
|
|
|
505,682
|
|
Vice President, Corporate Controller
|
|
|
2006
|
|
|
|
185,697
|
|
|
|
0
|
|
|
|
2,982
|
|
|
|
79,237
|
|
|
|
19,155
|
|
|
|
4,440
|
|
|
|
14,880
|
|
|
|
306,391
|
|
Cohen, Kenneth L.
|
|
|
2007
|
|
|
|
224,288
|
|
|
|
0
|
|
|
|
41,667
|
|
|
|
94,236
|
|
|
|
115,509
|
|
|
|
96,422
|
|
|
|
7,329
|
|
|
|
579,451
|
|
Vice President, Treasurer
|
|
|
2006
|
|
|
|
217,423
|
|
|
|
0
|
|
|
|
3,975
|
|
|
|
103,927
|
|
|
|
22,427
|
|
|
|
106,901
|
|
|
|
6,100
|
|
|
|
460,753
|
|
Harwell, Janis L.
|
|
|
2007
|
|
|
|
324,615
|
|
|
|
0
|
|
|
|
397,263
|
|
|
|
187,210
|
|
|
|
200,612
|
|
|
|
0
|
|
|
|
7,559
|
|
|
|
1,117,259
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
|
|
2006
|
|
|
|
303,192
|
|
|
|
0
|
|
|
|
57,752
|
|
|
|
169,666
|
|
|
|
37,529
|
|
|
|
47,992
|
|
|
|
18,050
|
|
|
|
634,181
|
|
Winter, Steven J.
|
|
|
2007
|
|
|
|
360,577
|
|
|
|
500,000
|
(i)
|
|
|
0
|
(j)
|
|
|
231,029
|
|
|
|
0
|
|
|
|
0
|
|
|
|
427,197
|
|
|
|
1,518,803
|
|
Former Senior Vice President, and Former President and Chief
Operating Officer, Intermec Technologies
|
|
|
2006
|
|
|
|
356,731
|
|
|
|
0
|
|
|
|
5,964
|
|
|
|
214,620
|
|
|
|
58,875
|
|
|
|
35,324
|
|
|
|
13,100
|
|
|
|
684,614
|
|
|
|
|
(a) |
|
Includes amounts deferred at the officers election. |
|
(b) |
|
Stock awards reflected in this column include PSUs pursuant to
our PSU Program and restricted stock units awarded to
Mr. Anderson, Mr. Michael and Ms. Harwell. These
amounts represent the compensation expense recognized by the
Company during the year ended December 31, 2007, in
accordance with the provisions of FAS 123R with respect to
stock awards granted in the year indicated and years prior to
such year. Refer to Note F, Shareholders
Investment, in the Notes to Consolidated Financial
Statements included in our
Form 10-K,
for the relevant assumptions used to determine the valuation of
our stock awards for all relevant years. The PSUs are discussed
in further detail under Compensation Discussion and
Analysis Components of the Executive Compensation
Program, Long-Term Equity Incentive Programs, Performance Share
Unit Program. The restricted stock units are discussed in
further detail under Compensation Discussion and
Analysis Named Executive Officer Compensation
and Compensation Discussion and Analysis 2007
Executive Retention. |
|
(c) |
|
This amount represents the compensation expense recognized by
the Company during the year ended December 31, 2007, in
accordance with the provisions of FAS 123R with respect to
option awards granted in the year indicated and years prior to
such year. Refer to Note F, Shareholders
Investment, in the Notes to Consolidated Financial
Statements included in our
Form 10-K,
for the relevant assumptions used to determine the valuation of
our option awards for all relevant years. |
35
|
|
|
(d) |
|
The amounts shown in this column constitute the annual incentive
awards paid to each named executive officer based on the
Compensation Committees evaluation of the Companys
performance. These awards are discussed in further detail in
Compensation Discussion and Analysis Annual
Cash Incentive Program, 2007 MICP Goals and Payouts. The
estimated possible payouts for these awards are reflected in the
2007 Grants of Plan-Based Awards table. |
|
(e) |
|
The amounts shown in this column for each of the named executive
officers show the aggregate increase in the actuarial present
value of the officers accumulated benefits under all
pension plans during the year, determined using interest rate
and mortality rate assumptions consistent with those used in the
Companys financial statements. Information regarding these
pension plans is described in 2007 Pension Benefits.
The amounts in this column do not reflect deferred compensation
earnings because above market earnings are not provided by the
Company. |
|
(f) |
|
The following table sets forth for each of the named executive
officers the amounts attributable to elements of All Other
Compensation for 2007. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites
|
|
|
Contributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Other
|
|
|
to Defined
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
|
|
|
Contribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits(i)
|
|
|
Plans(ii)
|
|
|
Severance
|
|
|
Relocation
|
|
|
Other
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Byrne, Patrick J.
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
89,374
|
(iii)
|
|
|
|
|
|
$
|
89,374
|
|
Brady, Larry D.
|
|
|
|
|
|
|
3,250
|
|
|
|
|
|
|
|
|
|
|
|
|
(iv)
|
|
|
3,250
|
|
Michael, Lanny H.
|
|
|
|
|
|
|
7,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,200
|
|
Anderson, Fredric B.
|
|
|
|
|
|
|
7,097
|
|
|
|
|
|
|
|
|
|
|
|
|
(v)
|
|
|
7,097
|
|
Cohen, Kenneth L.
|
|
|
4,079
|
|
|
|
3,250
|
|
|
|
|
|
|
|
|
|
|
|
|
(iv)(v)
|
|
|
7,329
|
|
Harwell, Janis L.
|
|
|
|
|
|
|
7,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,559
|
|
Winter, Steven J.
|
|
|
|
|
|
|
3,250
|
|
|
|
423,947
|
|
|
|
|
|
|
|
|
(iv)(v)
|
|
|
427,197
|
|
|
|
|
(i) |
|
Represents financial planning assistance phased out during 2007. |
|
(ii) |
|
Company contributions to qualified and nonqualified deferred
compensation and retirement plans. |
|
(iii) |
|
Includes relocation costs for Mr. Byrne of $65,735 and
related tax
gross-ups of
$23,639. |
|
(iv) |
|
Premiums for life insurance coverage for Mr. Brady
($22,084), Mr. Cohen ($9,452) and Mr. Winter ($11,143)
were paid from the cash value of the policies, at no cost or
expense to the Company, and are not included in the table above. |
|
(v) |
|
Charitable donations were made by The Intermec Foundation under
programs available to the employees of the Company in connection
with Mr. Anderson ($15,000), Mr. Cohen ($10,000) and
Mr. Winter ($10,000), at no cost or expense to the Company,
and are not included in this table. See The Intermec
Foundation, following this table. |
|
|
|
(g) |
|
Mr. Byrne joined the Company as Chief Executive Officer and
President in July 2007. |
|
(h) |
|
Mr. Brady retired as Chairman, Chief Executive Officer and
President in July 2007. Mr. Bradys option award
expense amount of $1,760,539 includes $1,206,089 of
FAS 123R expense related to the acceleration of vesting of
options held by Mr. Brady, in connection with his
retirement arrangements. |
|
(i) |
|
Pursuant to a cash retention arrangement with Mr. Winter,
Mr. Winter was eligible for a one-time contingent payment
of $500,000 in the event that we terminated his employment prior
to March 1, 2008, unless such termination was for cause or
in connection with a change of control. Mr. Winter became
eligible for such payment upon his departure from the Company,
as reported in our Current Report on
Form 8-K
filed on August 7, 2007. |
|
(j) |
|
Mr. Winter had 37,917 shares of unvested PSUs, with a
FAS 123R value of $717,938, which were forfeited when he
left the Company. |
36
The
Intermec Foundation
The Intermec Foundation (the Foundation) is a
nonprofit, tax-exempt charitable foundation that was formed and
funded in 1993 by the Companys former parent company,
Litton Industries. At the time that the Company was spun off
from Western Atlas in 1997, the Foundations assets were
approximately $17.5 million. The Foundation currently has
assets of approximately $19.5 million. The Company has
never contributed any assets to the Foundation. All of the
Foundations donations have been made and all Foundation
costs have been paid using Foundation assets. The
Foundations Board of Directors is elected annually by the
Companys Board of Directors, usually at its May meeting.
The Foundations current directors are Mr. Anderson,
Mr. Cohen and Ms. Harwell.
The Foundation makes grants to schools (kindergarten through
grade 12, or K-12), supports a scholarship
competition for children of employees, makes a matching donation
to a community service organization, and makes donations to
other educational institutions and community charities or
projects. In one of these programs, the Foundation makes
non-discretionary contributions to tax-exempt K-12 schools and
educational institutions by matching donations made by our
employees and independent directors. The program requires the
employee or director to make a minimum donation of $1,000 and
provides for a Foundation match, per donation year, up to $5,000
for non-officer employees, $10,000 for operating company
officers, and $25,000 for corporate officers and non-management
directors.
37
2007
GRANTS OF PLAN-BASED AWARDS
The following table provides information regarding 2007 grants
of annual and long-term awards for the named executive officers,
including the range of estimated possible payouts under our
annual MICP and estimated future payouts under our PSU Program
(referred to in the table below as LTIP PSU) and the
exercise price and grant date fair value of stock options. These
award opportunities align executives interests with
stockholders, by providing an incentive to increase stock price
and improve the long-term financial performance of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
Option
|
|
|
|
|
|
|
|
|
Estimated Possible
|
|
Estimated Possible
|
|
Stock
|
|
Awards:
|
|
|
|
Grant Date
|
|
|
|
|
Payouts Under
|
|
Payouts Under
|
|
Awards:
|
|
Number of
|
|
Exercise or
|
|
Fair Value
|
|
|
|
|
Non-Equity Incentive
|
|
Equity Incentive
|
|
Number of
|
|
Securities
|
|
Base Price
|
|
of Stock
|
|
|
|
|
Plan Awards(a)
|
|
Plan Awards(b)
|
|
Shares of
|
|
Underlying
|
|
of Option
|
|
and Option
|
|
|
|
|
Target
|
|
Maximum
|
|
Target
|
|
Maximum
|
|
Stock or Units
|
|
Options
|
|
Awards(c)
|
|
Awards(d)
|
Name
|
|
Grant Date
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($/Sh)
|
|
($)
|
|
Byrne, Patrick, J.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual incentive
|
|
|
|
|
|
$
|
246,923
|
|
|
$
|
370,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
LTIP PSU
2007-08
|
|
|
7/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
33,350
|
|
|
|
66,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
912,123
|
|
LTIP PSU
2007-09
|
|
|
7/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,367,500
|
|
Option
|
|
|
7/19/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
(e)
|
|
|
27.35
|
|
|
|
3,324,000
|
|
Brady, Larry D. (f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual incentive
|
|
|
|
|
|
|
278,049
|
|
|
|
417,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael, Lanny H.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual incentive
|
|
|
|
|
|
|
247,625
|
|
|
|
371,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP PSU
2007-09
|
|
|
5/15/2007
|
|
|
|
|
|
|
|
|
|
|
|
8,750
|
|
|
|
17,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239,313
|
|
RSU
|
|
|
3/30/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(g)
|
|
|
|
|
|
|
|
|
|
|
448,700
|
|
Option
|
|
|
5/15/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
(g)
|
|
|
22.59
|
|
|
|
315,700
|
|
Anderson, Fredric B.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual incentive
|
|
|
|
|
|
|
101,308
|
|
|
|
151,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP PSU
2007-09
|
|
|
5/15/2007
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82,050
|
|
RSU
|
|
|
2/20/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
(h)
|
|
|
|
|
|
|
|
|
|
|
94,440
|
|
Option
|
|
|
5/15/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
(h)
|
|
|
22.59
|
|
|
|
108,240
|
|
Cohen, Kenneth L.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual incentive
|
|
|
|
|
|
|
112,144
|
|
|
|
168,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP PSU
2007-09
|
|
|
5/15/2007
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,700
|
|
Option
|
|
|
5/15/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
(i)
|
|
|
22.59
|
|
|
|
72,160
|
|
Harwell, Janis L.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual incentive
|
|
|
|
|
|
|
194,769
|
|
|
|
292,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP PSU
2007-09
|
|
|
5/15/2007
|
|
|
|
|
|
|
|
|
|
|
|
8,750
|
|
|
|
17,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239,313
|
|
RSU
|
|
|
3/30/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(j)
|
|
|
|
|
|
|
|
|
|
|
897,400
|
|
RSU
|
|
|
3/30/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
5/15/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
(j)
|
|
|
22.59
|
|
|
|
315,700
|
|
Winter, Steven J.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP PSU
2007-09
|
|
|
5/15/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
307,688
|
|
Option
|
|
|
5/15/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,000
|
(k)
|
|
|
22.59
|
|
|
|
405,900
|
|
|
|
|
(a) |
|
Represents the target and maximum potential payouts pursuant to
the MICP, which is a cash incentive plan under the Amended and
Restated 2004 Omnibus Incentive Compensation Plan (the
2004 Plan). The Compensation Committee established a
target payment for each named executive officer, based on a
percentage of that individuals salary, and assigned
Company performance goals for 2007. The assigned performance
targets for Mr. Byrne were based on our updated plan for
company performance for the period July 1 through
December 31, 2007, as disclosed in our Current Report on
Form 8-K
filed on July 25, 2007. For the other named executive
officers and certain other employees who participate in the
MICP, the performance targets were based on (i) the
performance components for the first half of 2007 as originally
established by the Compensation Committee and (ii) the
performance components for the second half of 2007 reflected in
the updated plan for Company performance used to set the
performance targets for |
38
|
|
|
|
|
Mr. Byrne. Participants could earn from 0% to 150% of their
target payment based on the Companys financial
performance. Because the lowest possible payment is 0, we have
not indicated a threshold payout amount. The MICP is described
in Compensation Discussion and Analysis Annual
Cash Incentive Program, 2007 MICP Goals and Payouts. |
|
(b) |
|
Represents awards made under the PSU Program, a subplan of the
2004 Plan. For participants other than Mr. Byrne, the
performance period under the PSU Program is three years, and a
new three-year performance period will begin annually. The
Compensation Committee established target awards of PSUs for
each participant other than Mr. Byrne at the beginning of
the cycle in 2007. As disclosed in our Current Report on
Form 8-K
filed on July 25, 2007, the performance goals for each
participant other than Mr. Byrne were modified by revising
the 2007 components to reflect the plan used to set the
performance targets for Mr. Byrne. Mr. Byrne was
awarded PSUs for the abbreviated performance periods of
July 1, 2007 to December 31, 2008 and July 1,
2007 to December 31, 2009. Participants can earn from 0% to
200% of their target shares, based on the Companys
financial performance. Because the lowest possible payment is 0,
we have not indicated a threshold payout amount. PSUs are
payable in shares of common stock. The performance measures for
the PSUs granted in the
2007-2009
period are Return on Net Capital Utilized and Earnings Per Share
from Continuing Operations. The PSU Program is described in
Compensation Discussion and Analysis Long-Term
Equity Incentive Programs, Performance Share Program. |
|
(c) |
|
The stock option program is described in Compensation
Discussion and Analysis Long-Term Equity Incentive
Programs, Stock Option Grants. The 2004 Plan provides that
the exercise price will be not less than the Fair Market
Value on the date of grant, and defines Fair Market Value
as the average of the highest and lowest sales price per share
of our common stock on the NYSE for that date. We have
consistently used this definition of Fair Market Value for our
equity plans since 1997, and believe that it is a fair
representation of the value of our common stock on the date of
grant. The exercise prices listed in this column are, in all
cases, higher than the closing price of our common stock on the
date of grant. |
|
(d) |
|
Refer to Note F, Shareholders Investment,
in the Notes to Consolidated Financial Statements included in
our
Form 10-K,
for the relevant assumptions used to determine the FAS 123R
grant date fair value of our stock and option awards. The grant
date fair value for PSUs was calculated based on the target
number of PSUs for the
2007-2009
performance period. |
|
(e) |
|
Mr. Byrne: Stock options for
300,000 shares 18,280 shares granted as
incentive stock options that become exercisable in five equal
installments of 3,656 shares each on July 19, 2008,
July 19, 2009, July 19, 2010, July 19, 2011 and
July 19, 2012, and the remainder granted as nonqualified
stock options that become exercisable in five equal installments
of 56,344 shares each on July 19, 2008, July 19,
2009, July 19, 2010, July 19, 2011 and July 19,
2012. |
|
(f) |
|
Mr. Brady did not receive stock options or PSUs in 2007 due
to his previously announced resignation as Chairman, Chief
Executive Officer and President effective on July 19, 2007.
In connection with Mr. Bradys December 14, 2007
retirement from the Company, Mr. Bradys then unvested
outstanding stock options accelerated in vesting, which resulted
in a FAS 123R expense of $1,206,089. |
|
(g) |
|
Mr. Michael: Stock options for
35,000 shares 4,426 shares granted as
incentive stock options that become exercisable in one
installment on May 15, 2012, and the remainder granted as
nonqualified stock options that become exercisable in four equal
installments of 7,000 shares each on May 15, 2008,
May 15, 2009, May 15, 2010 and May 15, 2011, and
one installment of 2,574 shares on May 15, 2012.
Restricted Stock Units this right to receive shares
of common stock, originally received on September 14, 2006
and modified on March 30, 2007, vests (i.e., the
restrictions expire) (i) on the fifth anniversary of the
date of grant, i.e., September 14, 2011, or (ii) on
the date of termination of Mr. Michaels employment if
he is terminated before March 1, 2009, unless the
termination is for cause. See Compensation Discussion and
Analysis 2007 Executive Retention. |
|
(h) |
|
Mr. Anderson: Stock options for
12,000 shares 2,400 shares granted as
incentive stock options that become exercisable in one
installment on May 15, 2012, and the remainder granted as
nonqualified stock options that become exercisable in four
installments of 2,400 shares each on May 15, 2008,
May 15, 2009, May 15, 2010 and May 15, 2011.
Restricted Stock Units this right to receive shares
of common stock |
39
|
|
|
|
|
vests (i.e., the restrictions expire) in three installments of
1,333 shares on February 20, 2008, 1,333 shares
on February 20, 2009 and 1,334 shares on
February 20, 2010. |
|
(i) |
|
Mr. Cohen: Stock options for
8,000 shares 3,200 shares granted as
incentive stock options that become exercisable in two
installments of 1,600 shares on May 15, 2011 and
May 15, 2012 and the remainder granted as nonqualified
stock options that become exercisable in three installments of
1,600 shares on May 15, 2008, May 15, 2009 and
May 15, 2010. Mr. Cohens grant includes a
provision that, upon his retirement at age 65 or later, all
of his then unvested stock options will vest immediately and
remain exercisable for three years thereafter. |
|
(j) |
|
Ms. Harwell: Stock options for
35,000 shares 4,426 shares granted as
incentive stock options that become exercisable in one
installment on May 15, 2012, and the remainder granted as
nonqualified stock options that become exercisable in four equal
installments of 7,000 shares each on May 15, 2008,
May 15, 2009, May 15, 2010 and May 15, 2011 and
one installment of 2,574 shares on May 15, 2012.
Restricted Stock Units this right to receive
20,000 shares of common stock, originally granted on
September 8, 2004 and modified on March 30, 2007,
vests in one installment on (i) September 8, 2009 or
(ii) the date of Ms. Harwells termination of
employment if she is terminated before March 1, 2009,
unless the termination is for cause. In a separate grant, the
right to receive 20,000 shares of common stock vests in one
installment on (i) March 1, 2009 or (ii) the date
of an earlier termination, unless such termination is for cause. |
|
(k) |
|
Mr. Winter: Stock options for
45,000 shares none of the shares granted will
become exercisable because Mr. Winter left the Company
before any of the shares vested. |
40
OUTSTANDING
EQUITY AWARDS AT 2007 FISCAL YEAR-END
The following table sets forth information regarding the
outstanding stock option awards and unvested or unearned stock
awards held by the named executive officers, as of
December 31, 2007. The market value of unvested stock
awards is based on the closing stock price of Intermec stock of
$20.31 on December 31, 2007, the last trading day of the
year. These holdings reflect the Companys long-term
incentive compensation policies, which grant stock awards and
stock options based on Company performance, the quality and
length of an executives service, and the achievement of
individual and Company goals.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards(a)
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Payout Value
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Market Value
|
|
|
Unearned
|
|
|
of Unearned
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
of Shares or
|
|
|
Shares, Units
|
|
|
Shares, Units
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
or Other
|
|
|
or Other
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
Stock That
|
|
|
Stock That
|
|
|
Rights That
|
|
|
Rights That
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested(b)
|
|
|
Vested(c)
|
|
|
Vested(b)(c)
|
|
Name
|
|
(#)
|
|
|
(#)
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
Byrne, Patrick J.(d)
|
|
|
|
|
|
|
300,000
|
|
|
$
|
27.35
|
|
|
|
7/19/2017
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,700
|
|
|
$
|
1,354,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
2,031,000
|
|
Brady, Larry D.(e)
|
|
|
20,000
|
|
|
|
|
|
|
$
|
7.72
|
|
|
|
12/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
|
|
|
|
|
|
|
17.23
|
|
|
|
12/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
|
|
|
|
19.99
|
|
|
|
5/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
27.25
|
|
|
|
5/19/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
|
|
|
|
|
27.25
|
|
|
|
12/14/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
Michael, Lanny H.(f)
|
|
|
7,200
|
|
|
|
28,800
|
|
|
|
27.48
|
|
|
|
9/14/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
22.59
|
|
|
|
5/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(g)
|
|
|
406,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
|
|
|
487,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,500
|
|
|
|
355,425
|
|
Anderson, Fredric B.(h)
|
|
|
10,000
|
|
|
|
|
|
|
|
5.38
|
|
|
|
8/26/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
1,000
|
|
|
|
7.72
|
|
|
|
5/08/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
|
3,000
|
|
|
|
17.23
|
|
|
|
5/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
7,500
|
|
|
|
19.99
|
|
|
|
5/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
16,000
|
|
|
|
27.25
|
|
|
|
5/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
22.59
|
|
|
|
5/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,334
|
|
|
|
270,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000(i
|
)
|
|
|
81,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
121,860
|
|
Cohen, Kenneth, L.(j)
|
|
|
7,000
|
|
|
|
|
|
|
|
16.59
|
|
|
|
11/19/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
4.19
|
|
|
|
11/17/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
7.38
|
|
|
|
5/07/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,334
|
|
|
|
1,333
|
|
|
|
7.72
|
|
|
|
5/08/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
4,000
|
|
|
|
17.23
|
|
|
|
5/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
9,000
|
|
|
|
19.99
|
|
|
|
5/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
8,000
|
|
|
|
27.25
|
|
|
|
5/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
22.59
|
|
|
|
5/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,666
|
|
|
|
135,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
81,240
|
|
Harwell, Janis L.(k)
|
|
|
18,000
|
|
|
|
12,000
|
|
|
|
14.33
|
|
|
|
9/08/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
|
21,000
|
|
|
|
19.99
|
|
|
|
5/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
28,000
|
|
|
|
27.25
|
|
|
|
5/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
35,000
|
|
|
|
22.59
|
|
|
|
5/15/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(l)
|
|
|
406,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,334
|
|
|
|
473,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(l)
|
|
|
406,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,500
|
|
|
|
355,425
|
|
Winter, Steven J.(m)
|
|
|
10,200
|
|
|
|
|
|
|
|
16.59
|
|
|
|
2/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
17.19
|
|
|
|
2/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
4.19
|
|
|
|
2/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
7.38
|
|
|
|
2/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
7.72
|
|
|
|
2/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
17.23
|
|
|
|
2/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
|
|
|
|
|
19.99
|
|
|
|
2/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
|
|
|
|
|
|
27.25
|
|
|
|
2/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41
|
|
|
(a) |
|
All option grants reflected in the table vest or vested (i.e.,
become exercisable) in five approximately equal increments on
the first five anniversary dates following the date of grant,
and expire ten years after the date of grant. The amount that
vests in any one year is further divided between incentive stock
options (ISOs) and nonqualified stock options
(NQs), to the extent permissible in accordance with
federal income tax rules. For each named executive officer, the
footnotes below detail the option grants not yet exercisable,
including the allocation between ISOs and NQs. |
|
(b) |
|
Based on the closing price of our common stock of $20.31 on
December 31, 2007. |
|
(c) |
|
Each named executive officer has received an award under the PSU
Program for the
2006-2008
and
2007-2009
performance cycles, which will vest and be settled in shares to
the extent earned as of December 31, 2008 and 2009,
respectively. Participants can earn from 0% to 200% of their
target shares, based on the Companys financial
performance. The lowest possible payment is $0. Except for
Mr. Brady and Mr. Winter, the shares and payout values
in the table above are the maximum amounts that could be
achieved. The PSU Program is described in Compensation
Discussion and Analysis Long-Term Equity Incentive
Programs, Performance Share Unit Program. |
|
(d) |
|
The vesting dates of Mr. Byrnes unvested option award
are further detailed on the following table: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
Type
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
7/19/2007
|
|
|
ISO
|
|
|
|
3,656
|
|
|
|
3,656
|
|
|
|
3,656
|
|
|
|
3,656
|
|
|
|
3,656
|
|
|
|
|
NQ
|
|
|
|
56,344
|
|
|
|
56,344
|
|
|
|
56,344
|
|
|
|
56,344
|
|
|
|
56,344
|
|
|
|
|
(e) |
|
Mr. Bradys unvested option awards that had not
already vested by his December 14, 2007 retirement from the
Company vested on that date and remain exercisable for three
years from that date. Mr. Brady remains eligible to receive
a pro rata portion of the 33,334 PSUs (at target performance
levels) awarded to him under the
2006-2008
PSU Program performance cycle, based upon the amount of the
performance cycle elapsed before his retirement. However, under
the performance targets applicable to Mr. Brady, no payout
is expected and these PSUs have a value of $0. |
|
(f) |
|
The vesting dates of Mr. Michaels unvested option
awards are further detailed on the following table: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
Type
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
9/14/2006
|
|
|
ISO
|
|
|
|
3,639
|
|
|
|
3,639
|
|
|
|
3,639
|
|
|
|
3,639
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
3,561
|
|
|
|
3,561
|
|
|
|
3,561
|
|
|
|
3,561
|
|
|
|
|
|
5/15/2007
|
|
|
ISO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,426
|
|
|
|
|
NQ
|
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
2,574
|
|
|
|
|
(g) |
|
Mr. Michaels award of 20,000 shares of
Restricted Stock Units (RSUs) granted in September 2006 was
amended on March 30, 2007 so that it will vest
(i) when the restriction expires on September 14, 2011
or (ii) on the date of termination of
Mr. Michaels employment if the Company terminates his
employment prior to March 1, 2009, unless the termination
is for cause. See Compensation Discussion and
Analysis 2007 Executive Retention. |
42
|
|
|
(h) |
|
The vesting dates of Mr. Andersons unvested option
awards are further detailed on the following table. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
Type
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
5/08/2003
|
|
|
ISO
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/06/2004
|
|
|
ISO
|
|
|
|
1,500
|
|
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/17/2005
|
|
|
ISO
|
|
|
|
2,500
|
|
|
|
2,500
|
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/16/2006
|
|
|
ISO
|
|
|
|
604
|
|
|
|
888
|
|
|
|
1,836
|
|
|
|
3,669
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
3,396
|
|
|
|
3,112
|
|
|
|
2,164
|
|
|
|
331
|
|
|
|
|
|
5/15/2007
|
|
|
ISO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,400
|
|
|
|
|
NQ
|
|
|
|
2,400
|
|
|
|
2,400
|
|
|
|
2,400
|
|
|
|
2,400
|
|
|
|
|
|
|
|
|
(i) |
|
Mr. Andersons award of 4,000 shares of RSUs,
made in February 2007, vests (i) in substantially equal
annual installments over three years, or (ii) on the date
of termination of Mr. Andersons employment in the
event of death, disability or change of control. See
Compensation Discussion and Analysis Named
Executive Officer Compensation. |
|
(j) |
|
The vesting dates of Mr. Cohens unvested option
awards are further detailed on the following table. The grants
made in 2005, 2006 and 2007 include a provision that, upon his
retirement at age 65 or later, all then unvested stock
options will vest immediately and remain exercisable for three
years thereafter. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
Type
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
5/08/2003
|
|
|
ISO
|
|
|
|
1,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/06/2004
|
|
|
ISO
|
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/17/2005
|
|
|
ISO
|
|
|
|
2,765
|
|
|
|
3,000
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/16/2006
|
|
|
ISO
|
|
|
|
|
|
|
|
205
|
|
|
|
1,469
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
2,000
|
|
|
|
1,795
|
|
|
|
531
|
|
|
|
|
|
|
|
|
|
5/15/2007
|
|
|
ISO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,600
|
|
|
|
1,600
|
|
|
|
|
NQ
|
|
|
|
1,600
|
|
|
|
1,600
|
|
|
|
1,600
|
|
|
|
|
|
|
|
|
|
|
|
|
(k) |
|
The vesting dates of Ms. Harwells unvested option
awards are further detailed on the following table: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
Type
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
9/08/2004
|
|
|
ISO
|
|
|
|
6,000
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/17/2005
|
|
|
ISO
|
|
|
|
701
|
|
|
|
701
|
|
|
|
5,003
|
|
|
|
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
6,299
|
|
|
|
6,299
|
|
|
|
1,997
|
|
|
|
|
|
|
|
|
|
5/16/2006
|
|
|
ISO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,669
|
|
|
|
|
|
|
|
|
NQ
|
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
3,331
|
|
|
|
|
|
5/15/2007
|
|
|
ISO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,426
|
|
|
|
|
NQ
|
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
2,574
|
|
|
|
|
(l) |
|
Ms. Harwells award of 20,000 shares of RSUs
granted in September 2004 was amended on March 30, 2007 so
that it will vest (i) when the restriction expires on
September 8, 2009 or (ii) on the date of termination
of Ms. Harwells employment if the Company terminates
Ms. Harwells employment prior to March 1, 2009,
unless the termination is for cause. In a separate grant, the
right to receive 20,000 shares of common stock vests in one
installment (i) when the restriction expires on
March 1, 2009 or (ii) on the |
43
|
|
|
|
|
date of termination of Ms. Harwells employment if the
Company terminates Ms. Harwells employment prior to
March 1, 2009, unless the termination is for cause. See
Compensation Discussion and Analysis 2007
Executive Retention. |
|
(m) |
|
Upon Mr. Winters separation from the Company, all of
his unvested option awards and PSUs were canceled. His vested
options remained exerciseable for 90 days after his
separation from the Company. |
2007
OPTION EXERCISES AND STOCK VESTED
For the year 2007, the following table provides, for each of our
named executive officers, the number of stock options exercised
and stock awards vested and the value realized due to the
exercise or vesting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized
|
|
|
Acquired
|
|
|
Value Realized
|
|
|
|
Exercise
|
|
|
on Exercise(a)
|
|
|
on Vesting
|
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
Byrne, Patrick J.
|
|
|
0
|
|
|
$
|
0
|
|
|
|
0
|
|
|
$
|
0
|
|
Brady, Larry D.
|
|
|
189,559
|
|
|
|
3,351,393
|
|
|
|
0
|
|
|
|
0
|
|
Michael, Lanny H.
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Anderson, Fredric B.
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Cohen, Kenneth L.
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Harwell, Janis L.
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Winter, Steven J.
|
|
|
4,800
|
|
|
|
18,198
|
|
|
|
11,470
|
(b)
|
|
|
254,863
|
(b)
|
|
|
|
(a) |
|
Represents the difference between the exercise price and the
fair market value of the common stock on the date of exercise,
multiplied by the number of options exercised. |
|
(b) |
|
Represents the number of restricted shares vested, and the
number of shares vested multiplied by the fair market value of
the common stock on the vesting date. |
44
2007
PENSION BENEFITS
The following table provides information for each of the named
executive officers regarding the actuarial present value of the
officers accumulated benefit and years of credited service
under the Intermec Pension Plan (the IPP), our
Restoration Plan (the Restoration Plan) and our
Supplemental Executive Retirement Plan (the SERP).
The present value of accumulated benefits was determined using
interest rate and mortality rate assumptions consistent with
those used in the Companys financial statements.
Effective July 1, 2006, these plans were frozen (i.e.,
benefit accruals ceased) with respect to all eligible employees,
except for those employees who were already participating in the
plans and whose age and years of service as of June 30,
2006, when added together, equaled or exceeded 70 (the
Rule of 70). The freeze also had the effect of
closing the plans to new participants after June 30, 2006.
Mr. Brady, Mr. Cohen and Mr. Winter satisfied the
Rule of 70, so they continued to accrue additional benefits
under the plans. Mr. Anderson and Ms. Harwell are in
the group of employees whose benefits were frozen.
Mr. Byrne and Mr. Michael are not eligible to
participate in the plans because they joined the Company after
June 30, 2006.
Descriptions of all our plans are qualified in all respects by
reference to the plan documents, which are listed as exhibits to
our
Form 10-K,
and by the description of certain amendments of the definition
of change of control reported in our Current Report
on
Form 8-K
filed on March 30, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of
|
|
|
|
|
|
|
|
|
Number of Years
|
|
|
Accumulated
|
|
|
Payments During
|
|
|
|
|
|
Credited Service
|
|
|
Benefit(a)
|
|
|
Last Fiscal Year
|
|
Name
|
|
Plan Name
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
|
Byrne, Patrick J.
|
|
IPP
|
|
|
0
|
|
|
|
N/A
|
|
|
|
|
|
|
|
Restoration Plan
|
|
|
0
|
|
|
|
N/A
|
|
|
|
|
|
|
|
SERP
|
|
|
0
|
|
|
|
N/A
|
|
|
|
|
|
Brady, Larry D.
|
|
IPP
|
|
|
8.08
|
|
|
$
|
323,840
|
|
|
$
|
2,158
|
|
|
|
Restoration Plan
|
|
|
8.08
|
|
|
|
406,406
|
|
|
|
|
|
|
|
SERP
|
|
|
25.00
|
(b)
|
|
|
4,760,730
|
(c)
|
|
|
|
|
Michael, Lanny H.
|
|
IPP
|
|
|
0
|
|
|
|
N/A
|
|
|
|
|
|
|
|
Restoration Plan
|
|
|
0
|
|
|
|
N/A
|
|
|
|
|
|
|
|
SERP
|
|
|
0
|
|
|
|
N/A
|
|
|
|
|
|
Anderson, Fredric B.
|
|
IPP
|
|
|
3.92
|
|
|
|
23,166
|
|
|
|
|
|
|
|
Restoration Plan
|
|
|
3.92
|
|
|
|
8,876
|
|
|
|
|
|
|
|
SERP
|
|
|
0
|
|
|
|
N/A
|
|
|
|
|
|
Cohen, Kenneth L.
|
|
IPP
|
|
|
18.41
|
|
|
|
571,762
|
|
|
|
|
|
|
|
Restoration Plan
|
|
|
18.41
|
|
|
|
414,830
|
|
|
|
|
|
|
|
SERP
|
|
|
18.41
|
|
|
|
N/A
|
|
|
|
|
|
Harwell, Janis L.
|
|
IPP
|
|
|
1.83
|
|
|
|
43,164
|
|
|
|
|
|
|
|
Restoration Plan
|
|
|
1.83
|
|
|
|
46,217
|
|
|
|
|
|
|
|
SERP
|
|
|
1.83
|
|
|
|
0
|
|
|
|
|
|
Winter, Steven J.
|
|
IPP
|
|
|
29.68
|
|
|
|
200,422
|
|
|
|
|
|
|
|
Restoration Plan
|
|
|
29.68
|
|
|
|
267,305
|
|
|
|
|
|
|
|
SERP
|
|
|
25.00
|
(b)
|
|
|
0
|
(d)
|
|
|
|
|
|
|
|
(a) |
|
Present values are calculated as of September 30, 2007 (the
pension measurement date for purposes of the Companys 2007
financial statements) based on benefits accrued through the 2007
fiscal year and payable at normal retirement age (age 65),
assuming no pre-retirement mortality or termination and no
future Part I Contributions (as defined below) or future
service or compensation increases. The discount rates and
mortality table are the same as those used for financial
reporting purposes. Discount rates for the IPP, Restoration Plan
and SERP as of the end of fiscal year 2007 were 6.40%, 6.30% and
6.20%, respectively. The present value factors are also based on
sex-distinct RP2000 combined healthy mortality tables (with no |
45
|
|
|
|
|
collar adjustments) projected to 2015 using scale AA. In order
to determine the change in pension values for the Summary
Compensation Table, the present values of the IPP, Restoration
Plan and SERP benefits were also calculated as of
September 30, 2006 (the pension measurement date for
purposes of the Companys 2006 financial statements) for
the benefits earned as of that date. Discount rates for the IPP,
Restoration Plan and SERP as of the end of fiscal year 2006 were
6.00%, 5.90% and 5.80%, respectively. The mortality tables used
to determine the value as of September 30, 2006 were the
same as those used for the calculation as of September 30,
2007. |
|
(b) |
|
Mr. Brady and Mr. Winter each accumulated
30 years of credited service under the SERP. However, in
accordance with the terms of the SERP, years of credited service
are capped at 25. |
|
(c) |
|
Pursuant to his employment agreement (amended May 2002),
Mr. Bradys years of credited service under the SERP
include 22 years during which Mr. Brady was employed
by FMC Corporation. The present value of his accrued SERP
benefit shown above reflects these additional years of credited
service and has been reduced by the amount of the benefits he
receives under FMC Corporations retirement plans. Of the
present value of his accrued SERP benefits shown above, the
value associated with this additional service and reduced
benefit is estimated to be net $2,704,362. |
|
(d) |
|
Mr. Winter was not vested in the SERP due to his age. |
Pension
Plan
The IPP is a broad-based, tax-qualified, funded defined benefit
plan. As noted above, the IPP was frozen as of June 30,
2006, except with respect to participants who had satisfied the
Rule of 70 as of that date. Mr. Brady, Mr. Anderson,
Mr. Cohen, Ms. Harwell and Mr. Winter participate
in the IPP. Mr. Andersons and Ms. Harwells
benefits under the IPP were frozen. Mr. Cohen continues to
accrue benefits under the IPP. Mr. Byrne and
Mr. Michael do not participate in the IPP. Mr. Brady
and Mr. Winter continued to accrue benefits under the IPP
after June 30, 2006 until their retirement and termination
dates, respectively. Mr. Brady retired in 2007 and began
receiving his benefits under the IPP.
Participant Annual IPP Retirement
Benefits. Under the IPP, a participants
annual retirement benefit is the greater of the amount produced
under the two formulas described below. Both formulas base
benefits on the amount of compensation contributed by the
participant to Part I of the Intermec Financial
Security and Savings Program (FSSP), which is one of
our 401(k) plans. (Part II of the FSSP consists
of elective deferrals in excess of 4% of compensation and the
Companys matching contributions on those deferrals.
Elective deferrals to Part II of the FSSP can only be made
once the participant has deferred the maximum amount permitted
under Part I of the FSSP, and are not taken into account in
calculating the participants benefit under the IPP.) A
participant who satisfied the Rule of 70 may contribute
from 0%-4% of his or her compensation, on a pre-tax basis (on an
after-tax basis if the participant is disabled), to Part I
(Part I Contributions) and can change his or
her Part I Contributions percentage at any time.
Part I Contributions are invested as directed by the
Companys Investment Committee. Participants who did not
satisfy the Rule of 70 (i.e., those employees whose IPP benefits
were frozen as of June 30, 2006) can no longer make
Part I Contributions and have not been permitted to do so
since June 30, 2006. The formulas also take into account
after-tax employee contributions made to the IPP prior to 1985
(Employee Contributions).
At any time after termination of employment but prior to the
commencement of benefit payments, a participant can elect to
transfer his or her Part I Contributions and any investment
earnings thereon to the IPP or to receive a distribution of such
amounts. Similarly, a terminated employee can elect to leave his
or her Employee Contributions in the IPP or to receive a
distribution of such contributions (together with interest on
such contributions). As the following formulas reflect, a
participants IPP benefit will be reduced, but not below
zero, if he or she does not transfer his or her Part I
Contributions to, or leave his or her Employee Contributions in,
the IPP.
The two IPP formulas are as follows:
(A) 60% of the participants Part I Contributions
and Employee Contributions made before June 1, 2001,
plus 62% of the participants Part I
Contributions made after May 31, 2001, reduced by
the sum of (i) the annuity equivalent of the
participants Part I Contributions and any investment
earnings on such
46
contributions at the time he or she retires or leaves the
Company or for a non-Rule of 70 participant, as of June 30,
2006 (unless the participant elects to transfer such amounts to
the IPP), and (ii) the annuity equivalent of any Employee
Contributions and related interest distributed to the
participant, and
(B) 85% of all Part I contributions minus 75%
of the participants estimated annual Social Security
benefit payable at age 65, further reduced as described in
(A) above.
For purposes of the IPP formulas, compensation
generally means all cash compensation paid by the Company,
including any portion of such compensation that is deferred by
the participant into the FSSP or any Code Section 125
(cafeteria) plan. It does not, however, include any prospective
payment, such as severance pay or pay under a salary
continuation plan. In addition, the amount of compensation taken
into account for any calendar year, the amount of compensation
that can be deferred under the FSSP in any calendar year and the
amount that can be paid from the IPP in any calendar year are
limited by the Code. However, none of our named executive
officers has accrued IPP benefits in excess of these limits.
The annuity equivalent of the participants
Part I Contributions (and related investment earnings) and
Employee Contributions is the amount that would be paid to the
participant each year under a straight life annuity that is
actuarially equivalent to such amounts.
Participants whose IPP benefits were frozen as of June 30,
2006 became 100% vested in their IPP benefits on that date.
Participants whose IPP benefits were not frozen as of
June 30, 2006 vest in their IPP benefits in accordance with
the following schedule (based on their years of service with the
Company and its affiliates):
|
|
|
|
|
Years of Service
|
|
Vested Percentage
|
|
|
Less than 2
|
|
|
0
|
%
|
2
|
|
|
25
|
%
|
3
|
|
|
50
|
%
|
4
|
|
|
75
|
%
|
5 or more
|
|
|
100
|
%
|
Such a participant will also become 100% vested in his or her
benefit under the IPP, regardless of the participants
years of service, if he or she attains age 70, dies or
becomes disabled while employed by the Company. Only the
participants vested benefit will be distributed. For
purposes of the IPP, a year of service means 12-consecutive
months of employment with the Company and its affiliates.
The benefit formula described above calculates the
participants annual normal retirement benefit assuming
that it will be paid in the form of a straight life annuity
beginning as of the participants normal retirement
date, which is the first day of a month coincident with or
immediately following the participants attainment of
normal retirement age. Normal retirement age is age 65 or,
if later, the age of the participant upon completion of five
years of service, but not later than age 70. Vested
participants who have attained age 55 and completed at
least five years of service may elect early retirement. However,
the amount of the participants early retirement benefit
payments will be reduced by one-half of one percent (0.5%) for
each month that the payment commencement date precedes the
participants 65th birthday. Mr. Cohen is
eligible for early retirement.
Form of Payments. The normal form of payment
for unmarried participants is the straight life annuity. The
normal form of payment for married participants is an
actuarially equivalent joint and 50% surviving spouse annuity.
In addition, the IPP provides several other annuity payment
options that are actuarially equivalent to the straight life
annuity.
Restoration
Plan
Our Restoration Plan was created to provide for annual
retirement benefits to a select group of management and highly
compensated employees to the extent that their benefits under
the IPP and FSSP are limited by the Code. The Restoration Plan
is a nonqualified, noncontributory and unfunded defined benefit
plan.
47
As noted above, the Restoration Plan was frozen as of
June 30, 2006, except with respect to participants who had
satisfied the Rule of 70 as of that date. Mr. Brady,
Mr. Anderson, Mr. Cohen, Ms. Harwell and
Mr. Winter are or were participants in the Restoration
Plan. Mr. Andersons and Ms. Harwells
benefits under the Restoration Plan were frozen. Mr. Cohen
continues to accrue benefits under the Restoration Plan.
Mr. Byrne and Mr. Michael do not participate in the
Restoration Plan. Mr. Brady and Mr. Winter continued
to accrue benefits under the Restoration Plan after
June 30, 2006, until their retirement and termination
dates, respectively. Mr. Brady is scheduled to receive his
first Restoration Plan payment in July 2008.
Participant Restoration Plan Benefits. A
participants Restoration Plan benefit is equal to the sum
of the participants Annual Benefit amounts for
each calendar year. A participant will earn an Annual
Benefit under the Restoration Plan for a calendar year if
|
|
|
|
|
8% of the participants compensation for that calendar year
exceeds the Codes limit on 401(k) plan elective deferrals
for that year (e.g., for 2007, this maximum was $15,500 for
participants who had not attained 50 by the end of 2007 and
$20,500 for participants who had attained age 50 by the end
of 2007; for 2008, this maximum remains $15,500 and $20,500,
respectively),
|
|
|
|
the participant is a participant in the FSSP, and
|
|
|
|
the participant contributed the legally permissible maximum
amount to the FSSP for such Plan Year.
|
The participants Annual Benefit amount for a calendar year
is computed as follows:
(A) 85% of the participants Part I
Restricted Amount (explained below) for such calendar
year, reduced by the actuarial lump sum value of the
participants Part I Restricted Amount with interest
projected to age; plus
(B) the participants Part II Restricted
Amount (explained below) for such Plan Year, reduced by
the actuarial lump sum value of the participants
Part II Restricted Amount with interest projected to age 65
(or the participants actual retirement date, if later.
The participants Part I Restricted Amount
for a calendar year is equal to the excess, if any, of 4% of the
participants compensation for that calendar year
(determined without regard to the Code annual compensation
limit) over the maximum amount of elective deferrals available
to the participant under Part I of the FSSP for such
calendar year.
Under the terms of the Restoration Plan, the Chief Executive
Officer is deemed to have a Part I Restricted Amount of
zero for every plan year. Accordingly, Mr. Bradys
Part I benefit was frozen at $18,775 as of
September 1, 2002, when he became Chief Executive Officer,
and it has not increased since that date.
The participants Part II Restricted Amount for a
calendar year, if any, is equal to 2% of the participants
compensation for that calendar year (determined without regard
to the Code compensation limit), reduced by one-half of
the actual amount of elective deferrals made by the participant
to Part II of the FSSP during such calendar year.
For purposes of the Restoration Plan, compensation
generally means all cash compensation paid by the Company
(without regard to the Code compensation limit), including any
portion of such compensation that is deferred by the participant
into the FSSP or any Code Section 125 (cafeteria) plan, but
excluding reimbursed expenses and cash received pursuant to the
exercise of a stock option or stock appreciation right. For
2002, compensation also included compensation that was forgone
to receive stock options pursuant to a Board resolution. For
participants who met the Rule of 70, the Restoration Plan will
include compensation after June 30, 2006; for other
participants, no further compensation will be included after
June 30, 2006.
A participant vests in his or her benefit under the Restoration
Plan at the same time, and to the same extent, as the
participant vests in his or her benefit under the IPP. Only the
participants vested Restoration Plan benefit will be
distributed.
The benefit formula described above calculates the
participants annual normal retirement benefit assuming
that it will be paid in the form of a straight life annuity
beginning as of the participants normal
48
retirement date, which is generally the first day of month
coincident with or immediately following the participants
attainment of age 65. Participants who have attained
age 62 and completed five years of service may elect early
retirement. In addition, a participant whose employment with the
Company terminates on account of his or her total and permanent
disability and who has attained age 55 may elect early
retirement benefits. However, in either case, the amount of the
participants early retirement benefit payments will be
reduced by one-half of one percent (0.5%) for each month that
the payment commencement date precedes the participants
65th birthday. Mr. Cohen is eligible for early
retirement.
Form of Payments. The normal form of payment
for unmarried participants is the straight life annuity. The
normal form of payment for married participants is an
actuarially equivalent joint and 100% surviving spouse annuity.
For a description of the effects upon a change of control, refer
to Potential Payments Upon Termination or Change of
Control.
Supplemental
Executive Retirement Plan (the SERP)
Our SERP was established to provide retirement benefits to
selected officers and other key employees designated by the
Compensation Committee upon the recommendation of the Chief
Executive Officer. The SERP is a nonqualified, noncontributory
and unfunded defined benefit plan.
As noted above, the SERP was frozen as of June 30, 2006,
except with respect to participants who had satisfied the Rule
of 70 as of that date. Mr. Brady, Mr. Cohen,
Ms. Harwell and Mr. Winter are or were participants in
the SERP. Ms. Harwells benefit under the SERP was
frozen. Mr. Cohen continues to accrue benefits under the
SERP. Mr. Byrne, Mr. Michael and Mr. Anderson do
not participate in the SERP. Mr. Brady and Mr. Winter
continued to accrue benefits under the SERP after June 30,
2006, until their retirement and termination dates,
respectively. Mr. Brady is scheduled to receive his first
SERP payment in June 2008. Mr. Winter was not vested in the
SERP due to his age and will not receive a benefit.
A participants benefit under the SERP vests upon the later
of the participants completion of 15 years of service
or attainment of age of 60 while employed by the Company.
Mr. Cohen is vested in his SERP benefit by virtue of his
age and years of service with the Company. Mr. Brady is
vested in his SERP benefit because his employment agreement
dated June 16, 1999 and amended March 15, 2000 and
May 7, 2002 gave him credit for his 22 years of
service with his previous employer, FMC Corporation.
Participant SERP Benefits. The annual benefit
payable to a vested participant is equal to the sum of
(a) 1.6% of the participants average
earnings up to $125,000 (which amount is adjusted annually
for inflation and was $182,853 for 2007 and will be $192,142 for
2008) and (b) 2.2% of the participants
average earnings in excess of such amount,
multiplied by the participants number of years of credited
service (not to exceed 25). This amount is then reduced by the
offset amount. Average earnings for purposes of the
SERP is the average amount of compensation received or deemed to
have been received by the participant in the three consecutive
12-month
periods in which the participants compensation was highest
during the final 120 months of the participants
employment. For purposes of the SERP, compensation
generally means base salary (including any portion thereof that
is deferred by the participant into the FSSP, any Code
Section 125 (cafeteria) plan or any other plan of the
Company that permits the deferral of compensation and any
commissions that are payable as part of the participants
regular compensation) and bonuses paid by the Company (without
regard to the Code compensation limit). Compensation does not
include extraordinary items such as compensation recognized upon
exercise of employee stock options or bonuses paid for the
accomplishment of a particular non-ordinary course transaction
or circumstance. For participants who met the Rule of 70, the
SERP will include compensation paid after June 30, 2006;
for other participants, no further compensation will be included
in the SERP after June 30, 2006.
A year of service or a year of credited service is
12-consecutive months of employment with the Company and its
affiliates. Under limited circumstances the Compensation
Committee may grant a participant additional years of credited
service.
49
A participants offset amount is equal to the
amount of the benefits that the participant would have received
under the IPP and the Restoration Plan had he or she been
eligible to participate, and participated, at all times in those
plans to the maximum extent permitted (regardless of the degree
of actual participation). The offset amount also includes the
amount of the Social Security benefits payable to the
participant as of the calendar year in which the
participants SERP benefit payments commence or, if no
Social Security benefit is payable to the participant as of that
year, as of the earliest date that a Social Security benefit
would be payable to the participant.
As noted above, Mr. Brady was granted 22 additional years
of credited service for the period he was employed by FMC
Corporation and covered by FMC Corporations retirement
arrangements. The benefit Mr. Brady will receive under the
SERP will be reduced by the amount of the pension benefit he
receives under FMC Corporations retirement plans. In
addition, Mr. Bradys offset amount includes the
amount of the pension benefit he will receive under FMC
Corporations retirement plans.
The benefit formula described above calculates the
participants annual normal retirement benefit assuming
that it will be paid in the form of a straight life annuity
beginning as of the participants normal retirement
date, which is generally the first day of month coincident
with or immediately following the later of the
participants attainment of age 65 or termination of
employment. Vested participants may elect early retirement after
attaining age 62. However, the amount of a
participants early retirement benefit payments will be
actuarially reduced to reflect early commencement.
Mr. Cohen is eligible for early retirement. Benefit
payments will commence, whether at normal or early retirement,
only after the participant has executed a non-compete agreement
and agreed not to engage in any other activity that could damage
the Companys or its affiliates economic or business
interests (or contractual relationships).
Form of Payments. The normal form of payment
for unmarried participants is the straight life annuity. The
normal form of payment for married participants is an
actuarially equivalent joint and 100% surviving spouse annuity.
In addition, the SERP provides other annuity payment options
that are actuarially equivalent to the straight life annuity.
For a description of the effects upon a change of control, refer
to Potential Payments Upon Termination or Change of
Control.
2007
NONQUALIFIED DEFERRED COMPENSATION
The following table provides information for each of the named
executive officers regarding aggregate executive and Company
contributions and aggregate earnings on such contributions for
2007, as well as year-end account balances under the Intermec
Deferred Compensation Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Company
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Earnings
|
|
|
Balance
|
|
|
|
in Last Fiscal
|
|
|
in Last Fiscal
|
|
|
in Last Fiscal
|
|
|
at Last Fiscal
|
|
|
|
Year(b)
|
|
|
Year(c)
|
|
|
Year(d)
|
|
|
Year-End(e)
|
|
Name(a)
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Byrne, Patrick J.
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Brady, Larry D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael, Lanny H.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anderson, Fredric B.
|
|
|
0
|
|
|
|
0
|
|
|
|
(30
|
)
|
|
|
2,575
|
|
Cohen, Kenneth L.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harwell, Janis L.
|
|
|
10,972
|
|
|
|
4,389
|
|
|
|
(72
|
)
|
|
|
29,267
|
|
Winter, Steven J.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Mr. Brady, Mr. Cohen and Mr. Winter are not
eligible to participate in the Deferred Compensation Plan. As
described below, these executives fall within the Rule of 70 and
thus may not participate in this plan. Mr. Byrne and
Mr. Michael were not eligible to participate in the
Deferred Compensation Plan in 2007, but will become eligible in
2008. Mr. Anderson did not receive compensation over the
Internal Revenue |
50
|
|
|
|
|
Service limit in the 401(k) Plan ($225,000 in 2007), so was not
able to defer into the Deferred Compensation Plan in 2007. |
|
(b) |
|
The amounts reported in this column reflect the elective
deferrals made by executives of base salary paid for 2007. These
amounts are included in the compensation reported in the
Salary column of the Summary Compensation
Table. |
|
(c) |
|
The amounts reported in this column reflect matching
contributions made by the Company in 2008 for 2007
contributions. These amounts are included in the All Other
Compensation column of the Summary Compensation
Table, but not in the Aggregate Balance at Last
Fiscal Year-End column of this table because of the date
the contributions were distributed. |
|
(d) |
|
The amounts reported in this column reflect the earnings
credited to executives accounts for 2007. |
|
(e) |
|
Of the amounts reported in this column, the following amounts
have also been reported in the Salary column of the
Summary Compensation Table for 2007 and for 2006: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previously
|
|
|
|
|
|
|
Reported for 2007
|
|
|
Reported for 2006
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Anderson, Fredric B.
|
|
$
|
|
|
|
$
|
1,714
|
|
|
$
|
1,714
|
|
Harwell, Janis L.
|
|
|
10,972
|
|
|
|
12,375
|
|
|
|
23,347
|
|
Deferred
Compensation Plan
The Deferred Compensation Plan is designed as a nonqualified,
defined contribution, individual account plan for the elective
deferral of certain eligible compensation, to the extent that
such compensation exceeds the compensation limit for an
applicable year under Code Section 401(a)(17).
Participation in the Deferred Compensation Plan is limited to
select management and highly compensated employees of the
Company. Employees who met the Rule of 70 (age plus years of
service equals 70 or more as of June 30, 2006) are not
eligible to participate in the Deferred Compensation Plan. The
named executive officers currently eligible to participate in
the Deferred Compensation Plan are Mr. Anderson and
Ms. Harwell. Mr. Byrne and Mr. Michael are not
currently eligible to participate in the Deferred Compensation
Plan but will become eligible in 2008. The Deferred Compensation
Plan is available to approximately 50 other employees.
For 2007, eligible compensation includes up to 75% of base
salary, up to 100% of annual cash bonuses and up to 100% of
commissions or sales-based awards. Executives are not eligible
to defer any portion of any quarterly incentive payment or
quarterly sales commission that is based on performance in any
portion of the year prior to the year it becomes payable. The
Company matches 80% of the first 4% of eligible compensation
deferred by an executive. To receive this matching contribution,
the executive must be employed on the last day of the year. All
Deferred Compensation Plan accounts are 100% vested at all times.
Executives may choose how to credit deferred and matching
amounts among approximately 27 tracking funds that are based on
the investment performance of the corresponding investment funds
offered under the 401(k) Plan. Executives may change how
deferrals are allocation to the tracking funds at any time, with
changes generally effective as of the next trading day.
51
The table following shows the funds available under the Deferred
Compensation Plan and their annual rate of return for the
calendar year ended December 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
Investment
|
|
1 Year
|
|
|
Investment
|
|
1 Year
|
|
|
AF Grth Fund Amer A
|
|
|
10.95
|
%
|
|
FID Freedom 2010
|
|
|
7.43
|
%
|
Clipper Fund
|
|
|
0.05
|
%
|
|
FID Freedom 2015
|
|
|
7.82
|
%
|
FID Dividend Growth
|
|
|
1.11
|
%
|
|
FID Freedom 2020
|
|
|
8.54
|
%
|
Harbor Cap Appr Inst
|
|
|
12.25
|
%
|
|
FID Freedom 2025
|
|
|
8.64
|
%
|
Spartan US EQ Index
|
|
|
5.43
|
%
|
|
FID Freedom 2030
|
|
|
9.27
|
%
|
Columbia Acorn Z
|
|
|
7.69
|
%
|
|
FID Freedom 2035
|
|
|
9.27
|
%
|
FID Mid Cap Stock
|
|
|
8.20
|
%
|
|
FID Freedom 2040
|
|
|
9.31
|
%
|
Longleaf Partners
|
|
|
(0.44
|
)%
|
|
FID Freedom 2045
|
|
|
9.50
|
%
|
Oakmark Select I
|
|
|
(14.04
|
)%
|
|
FID Freedom 2050
|
|
|
9.77
|
%
|
ABF SM Cap Val PA
|
|
|
(6.64
|
)%
|
|
FID Freedom Income
|
|
|
4.83
|
%
|
FID Diversified Intl
|
|
|
16.03
|
%
|
|
PIMCO TOT Return Admn
|
|
|
8.81
|
%
|
Oakmark Intl I
|
|
|
(0.51
|
)%
|
|
Fidelity Cash Reserve
|
|
|
5.06
|
%
|
FID Freedom 2000
|
|
|
5.32
|
%
|
|
Fidelity Retire MMKT
|
|
|
5.12
|
%
|
FID Freedom 2005
|
|
|
7.27
|
%
|
|
|
|
|
|
|
An executive may receive a single lump sum payment equal to his
or her entire account balance when the executives
employment with the Company ends, subject to delays required by
law or the terms of the Deferred Compensation Plan. If the
executive dies while employed by the Company, his or her
beneficiary will receive a lump sum payment equal to the value
of his or her entire account balance. The executive may also
receive distributions upon request in the event of an
unforeseeable financial emergency. The Company reserves the
right to terminate the Plan and distribute all vested amounts
credited to participant accounts upon a change of control as
described in the Plan.
The Compensation Committee interprets and administers the
Deferred Compensation Plan. Generally, the Company reserves the
right to amend or terminate the Deferred Compensation Plan at
any time without the consent or agreement of the executives. The
Deferred Compensation Plans benefits are paid by the
Company out of its general assets. The Deferred Compensation
Plan is subject to the requirements of Code Section 409A.
The Company is currently administering the Deferred Compensation
Plan in good faith compliance with Code Section 409As
requirements, and the discussion above reflects such
administration.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The Estimated Potential Incremental Payments Upon
Termination or Change of Control table reflects the
estimated amount of incremental compensation that would be due
to the named executive officers under any of the following
circumstances: (i) an involuntary termination of the named
executive officer by the Company without cause or a termination
by the named executive officer for good reason; (ii) upon a
change of control of the Company, (iii) an involuntary
termination of the named executive officer by the Company
without cause or a termination by the named executive officer
for good reason in connection with a change of control of the
Company; or (iv) death.
The amounts shown in the table assume that the termination was
effective as of December 31, 2007, the last business day of
2007, and that the price of Intermec stock on which certain of
the calculations are made was the closing price of $20.31 on
that date. These amounts are estimates of the incremental
amounts that would be due as of December 31, 2007, to the
named executive officers under the foregoing circumstances. The
actual amounts that would be due to a named executive officer in
similar circumstances in the future can only be determined at
the time of his or her termination or a change of control of the
Company.
Certain of our benefit plans contain provisions that provide
incremental benefits or payments in the event of a change of
control. In addition, we also have Change of Control Employment
Agreements and Executive
52
Severance Plans that apply to our named executive officers,
which also provide benefits or payments in situations involving
termination from the Company or a change of control of the
Company. These plans and arrangements are described below to
assist in reading the following table. The following
descriptions of certain provisions of these plans and agreements
are qualified in all respects by reference to the provisions of
the actual plan or agreement, all of which are listed as
exhibits to our
Form 10-K.
Incentive
Compensation Plans
Our Amended and Restated 1999 Stock Incentive Plan, Amended and
Restated 2001 Stock Incentive Plan, and Amended and Restated
2004 Omnibus Incentive Compensation Plan (the Incentive
Plans) apply to all eligible employees, including our
named executive officers, our other officers and non-officer
employees. The Incentive Plans provide that an eligible employee
will be entitled to certain financial benefits upon a change of
control of the Company. The following is a brief description of
the provisions in the Incentive Plans relating to a change of
control. Other provisions of the Incentive Plans are described
in Compensation Discussion and Analysis
Components of the Executive Compensation Program.
The change of control provisions in the Incentive Plans are the
same for all eligible employees, including the named executive
officers. Unless defined below, the capitalized terms in the
following paragraphs are defined in the Incentive Plans.
Generally, a Change of Control occurs if: (a) the Incumbent
Directors cease to constitute a majority of the Board;
(b) another party becomes the beneficial owner of at least
30% of our outstanding voting stock, with certain exceptions;
(c) we consummate a merger, reorganization or consolidation
with another party, or the sale or other disposition of all or
substantially all of our assets, unless (x) after such
transaction the beneficial stockholders of the Companys
outstanding and voting securities entitled to vote on director
elections immediately prior to the transaction retain more than
60% of such common stock and voting securities of the
corporation resulting from the transaction; (y) no
beneficial stockholder owns 30% or more of the outstanding
common stock or voting securities of the corporation resulting
from the transaction; and (z) at least a majority of the
directors resulting from the transaction were Incumbent
Directors at the time of executing the initial agreement
providing for the transaction; or (d) we consummate the
complete liquidation or dissolution of the Company.
The financial benefits that would be extended to eligible
employees following a Change of Control are:
|
|
|
|
|
Stock Options outstanding as of the date of the Change of
Control that are not exercisable and vested would become fully
exercisable and vested as of the effective date of the Change of
Control;
|
|
|
|
Restrictions and deferral limitations on Restricted Stock or
Restricted Stock Units (RSUs) would lapse and such
Restricted Stock and RSUs will become free of all restrictions
and become fully vested and transferable as of the effective
date of the Change of Control;
|
|
|
|
The incentive pool used to determine Covered Employee Annual
Incentive Awards would, as of the effective date of the Change
of Control, generally be based on the gross profit, consolidated
operating earnings, operating cash flow or net income of the
Plan Year immediately preceding the year of the Change of
Control;
|
|
|
|
The target payout opportunities attainable under all outstanding
Awards of Restricted Stock or RSUs whose restrictions are based
on performance criteria, Performance Units and Performance
Shares would be deemed to have been fully earned based on
targeted performance being attained as of the effective date of
the Change of Control; and
|
|
|
|
The vesting of all Awards denominated in Shares would be
accelerated as of the effective date of the Change of Control.
|
Supplemental
Executive Retirement Plan
The terms of our Supplemental Executive Retirement Plan
(SERP), other than those relating to a change of
control of the Company, are described under the caption
2007 Pension Benefits Supplemental
53
Executive Retirement Plan. That description includes a
summary of the benefits of participants. The following is a
brief description of the provisions in the SERP relating to a
change of control. The definition of Change of
Control in the SERP is consistent with the definition of
Change of Control applicable to the Incentive Plans
and complies with Code Section 409A. Unless defined below,
the capitalized terms in the following paragraph are defined in
the SERP.
In the event of a Change of Control, a vested Participants
SERP benefit will be paid to him or her in a lump sum as soon as
practicable after such Change of Control. The lump sum payment
will be equal to the actuarial present value of the benefit that
would have been payable to the Participant at the later of
age 65 or the actual age of the Participant on the
effective date of the Change of Control. To receive payment upon
a Change of Control, a SERP Participant need not have attained
age 60, terminated employment or executed the non-compete
or other agreements required to obtain benefit payments at
normal or early retirement, as described in 2007 Pension
Benefits Supplemental Executive Retirement
Plan. Any condition concerning eligibility for Retirement
Benefits that requires (1) the filing of any election,
(2) the attainment of a specified age, (3) an
agreement not to compete with the Company, (4) benefit
reductions, or (5) the Participants termination of
employment with the Company would be waived.
Restoration
Plan
The terms of our Restoration Plan, other than those relating to
a change of control, are described in 2007 Pension
Benefits Restoration Plan. That description
includes a summary of the benefits of participants. The
following is a brief description of the provisions in the
Restoration Plan relating to a change of control. Upon a
Change of Control, the Restoration Plan benefit of
any participant who is a participant on the date of the Change
of Control will be distributed in a lump sum that is equal to
the actuarial present value of the Restoration Plan benefit
payable at the later of his or her attainment of age 65 or
his or her attained age at the time of the Change of Control.
Any condition concerning eligibility for Retirement Benefits
that requires (1) the filing of any election, (2) the
attainment of a specified age, (3) an agreement not to
compete with the Company, (4) benefit reductions, or
(5) the Participants termination of employment with
the Company would be waived. For purposes of the Restoration
Plan, Change of Control triggers are consistent with
the definition of Change of Control applicable to
the Incentive Plans and comply with Code Section 409A.
Change of
Control Employment Agreements
In 2006, we entered into Amended and Restated Change of Control
Employment Agreements (the COC Agreements) with our
officers, including the named executive officers. In 2007, the
COC Agreements were amended to conform the change of control
definition to the definition used in other of our plans (deeming
the change of control to be effective upon consummation of, not
agreement to, the relevant transaction) and to conform to new
tax rules regarding deferred compensation. The following is a
brief description of the terms of the COC Agreements. The COC
Agreements have the same terms for all the executives except for
our Chief Executive Officer, as described below. The capitalized
terms in the following paragraphs are defined in the COC
Agreements.
The COC Agreements become effective only upon the occurrence of
a Change of Control. Absent a Change of Control, the New COC
Agreements do not require us to retain the executives or to pay
them any specified level of compensation or benefits. The COC
Agreements do not supersede the provisions of the Incentive
Plans, SERP or Restoration Plan related to benefits upon a
Change of Control. As noted in Executive Severance
Plans, an executive may not receive the payment of
benefits from both a COC Agreement and any other Company
severance plans or agreements.
The definition of Change of Control in the COC
Agreements is consistent with the definition of Change of
Control applicable to the Incentive Plans and complies
with Code Section 409A. The COC Agreements provide that,
for a two-year period after a change of control, called the
Employment Period, there will be no material adverse
change in the executives position and duties, salary,
bonus opportunity,
54
benefits or location of employment. This includes continued
coverage under our welfare benefit plans and continued
contributions under applicable retirement and insurance benefits.
If, during the Employment Period, the executives
employment is terminated other than for Cause, or the executive
terminates his or her employment for Good Reason (each such
termination event, a trigger), the executive will be
entitled to certain financial benefits. Good Reason generally
includes the following actions taken by the Company:
(a) assigning duties inconsistent with, or taking actions
in diminution of, the executives position (including
status, offices, titles and reporting requirements), authority,
duties or responsibility; (b) failing to comply with the
provisions of the agreement regarding compensation during the
Employment Period; (c) requiring that the executive be
based at any location other than our current corporate
headquarters or relocating the corporate headquarters more than
25 miles from its current location, or requiring excessive
travel; and (d) failing to assign the agreement to a
successor corporation or the successor failing to expressly
assume and agree to perform the agreement. Good Reason is
triggered upon a reasonable determination by the executive that
any of the above events has occurred. In the case of our Chief
Executive Officer, Good Reason also includes his resignation or
termination for any reason within the
12-month
period following a Change of Control.
The financial benefits that would be extended to the executive
following a trigger are payment of:
|
|
|
|
|
accrued but unpaid salary;
|
|
|
|
a pro rata portion of the executives target bonus based on
the number of days worked during the year;
|
|
|
|
a lump-sum severance payment equal to a multiple of the sum of
the executives Annual Base Salary and Annual Bonus
(including any higher annual bonus paid with respect to a prior
fiscal year), with our Chief Executive Officers severance
payment equal to three times such sum and the other
executives severance payment equal to two times such sum;
|
|
|
|
a lump-sum amount equal to the actuarial equivalent of two
additional years of benefit under the Intermec Pension Plan
(IPP), Restoration Plan and SERP, assuming the
executives compensation remains unchanged;
|
|
|
|
a lump-sum payment for continuation coverage for the executive
and his or her family members under the Welfare Benefit Plans
for a period of two years, followed by any group health
continuation coverage mandated by applicable law; and
|
|
|
|
reasonable costs for outplacement services for the period
through the second calendar year following the year of the
executives termination.
|
Payment of benefits due under the COC Agreements would generally
occur within 30 days of the executives termination of
employment, as applicable, unless a further delay is required by
law or the terms of a benefit plan.
If any amounts payable or paid under a COC Agreement are
characterized as excess parachute payments within
the meaning of Code Section 280G and cause the
applicability of an excise tax, a provision of the COC
Agreements reduces the payments payable to an amount that will
not trigger the excise tax, unless the net after-tax benefit of
making the full payment exceeds the net after-tax benefit of
reducing the payment. All determinations under this provision
will be made by an independent accounting firm. The executive is
responsible for all taxes arising from payments and benefits
under the COC Agreements.
In the event of termination of an executives employment by
reason of death, Disability, for Cause or other than for Good
Reason, the COC Agreement terminates, and our sole obligation is
to pay any compensation and benefits accrued but unpaid through
the executives Termination Date. Termination of employment
by reason of death or Disability also entitles an executive or
the executives beneficiary, as applicable, to a pro rata
portion of target bonus and other benefits provided to Company
peer executives in similar situations.
55
The COC Agreements preclude an executive from receiving benefits
under both a COC Agreement and any other Company severance plan
or agreement. An executive cannot receive benefits under a COC
Agreement without waiving his or her rights under other Company
severance plans and agreements.
Executive
Severance Plans
Our Executive Severance Plans cover certain officers, including
the named executive officers, in the event of certain
terminations of employment (the Severance Plans).
The definition of Change of Control in the Severance
Plans is consistent with the definition of Change of
Control applicable to the Incentive Plans and complies
with Code Section 409A. Unless defined below, the
capitalized terms in the following paragraphs are defined in the
Severance Plans.
The Severance Plans set forth the payments that we will make to
an executive if we terminate the executives employment or
if the executive becomes disabled or dies while employed by the
Company. If an executives employment is terminated
(a) by the Company other than for Cause or by reason of
death or Disability or (b) in connection with a Change of
Control, we will make the following payments to the executive
generally within 30 days of the executives
Termination Date unless a further delay is required by law or
the terms of a benefit plan:
|
|
|
|
|
accrued but unpaid salary and the pro rata target bonus for the
year in which the termination occurs;
|
|
|
|
deferred compensation (and related accrued earnings), unpaid
bonus and other awards (if any), and accrued but unpaid vacation
pay;
|
|
|
|
a lump-sum severance payment equal to a multiple of the
executives annual base salary; and
|
|
|
|
in the event of a termination in connection with a Change of
Control, a lump-sum severance payment equal to a multiple of the
executives target bonus.
|
The lump-sum severance payment under the Severance Plan
applicable to our Chief Executive Officer would be two times his
annual base salary and, if applicable, his target bonus; the
lump-sum severance payment for all other executives would be one
times his or her annual base salary and, if applicable, his or
her target bonus.
If payment of any amounts under the Severance Plans would result
in the imposition of an excise tax because the amounts would be
characterized as excess parachute payments within
the meaning of Code Section 280G, then the amounts payable
under the Severance Plans may be reduced to an amount that will
not trigger the excise tax. However, if the executives net
after-tax benefit from payment of all amounts due under the
Severance Plans would exceed his or her net after-tax benefit
from payment of the reduced amount, we will pay the full benefit
under the Severance Plans. All determinations under this
provision in the Severance Plans will be made by an independent
accounting firm. The executive is responsible for all taxes
arising from payments and benefits under the Severance Plans.
In the event of termination of an executives employment by
reason of death or Disability or for Cause, our sole obligation
under the Severance Plans would be to pay the executives
accrued annual base salary, deferred compensation (and related
accrued earnings), unpaid bonus and other awards (if any), and
accrued but unpaid vacation pay.
An executive may not receive the payment of benefits from both a
Severance Plan and a COC Agreement or any other Company
severance plan or agreement. The executive cannot receive
benefits under the Severance Plans without waiving his or her
rights under other Company severance plans and agreements,
including any COC Agreement applicable to such executive.
The Severance Plans do not require us to retain the executives
or to pay them any specified level of compensation or benefits.
Generally, we may modify or terminate the Severance Plans at any
time at our discretion without the consent or agreement of the
executives. However, the Severance Plans may not be amended or
terminated within one year following a Change of Control as to
any executive employed by the Company as of the Change of
Control Date.
56
2007
Executive Retention
As discussed in the Compensation Discussion and
Analysis, on March 30, 2007, the Company adopted
arrangements that are intended to encourage Mr. Michael and
Ms. Harwell to remain with the Company during the
Companys transition to new leadership (the 2007
Retention Arrangements). The following description of
these retention arrangements is qualified in all respects by
reference to the relevant portion of our Current Report on
Form 8-K
filed on March 30, 2007. The definition of Change of
Control applicable to these arrangements is consistent
with the definition of Change of Control applicable
to the Incentive Plans and complies with Code Section 409A.
Mr. Michael. The 20,000 RSUs granted to
Mr. Michael on September 14, 2006, which otherwise
vest (i.e., become unrestricted) on September 14, 2011,
will vest on the date of the Companys termination of his
employment if the termination occurs prior to March 1,
2009, as long as the termination is not for cause.
Ms. Harwell. On March 30, 2007, the
Compensation Committee of our Board of Directors granted
Ms. Harwell 20,000 RSUs that will all vest on March 1,
2009 (the 2007 RSUs) if she is continuously employed
by the Company during the period ending February 28, 2009.
In addition, the 2007 RSUs and the 20,000 RSUs previously
granted to Ms. Harwell on September 8, 2004, which
otherwise vest on September 8, 2009, will vest on the date
of the Companys termination of her employment if the
termination occurs prior to March 1, 2009, as long as the
termination is not for cause.
The 2007 Retention Arrangements do not require us to retain the
covered executives or to pay them any specified level of
compensation or benefits during their employment with the
Company.
Tabular
Presentation
Other than for Mr. Brady and Mr. Winter, both of whom
left the Company during 2007, the table below presents estimated
incremental compensation payable to each of the named executive
officers as described above, as applicable to that named
executive officer. Footnotes follow the table.
The incremental compensation is presented in the following
benefit categories:
|
|
|
|
|
Cash (salary): a multiple of the
officers annual base salary; does not reflect salary paid
or earned in 2007.
|
|
|
|
Cash (current annual target incentive): a
multiple of the officers annual bonus incentive
opportunity at target; does not reflect actual incentive paid or
earned for 2007.
|
|
|
|
Cash (annual incentive opportunity): a pro
rata portion of the officers annual incentive opportunity
based on the number of days worked during the year; does not
reflect actual incentive paid or earned for 2007.
|
|
|
|
Stock options: market value, as of
December 31, 2007, of unvested, in-the-money stock options
that would vest.
|
|
|
|
Service-based stock awards: market value, as
of December 31, 2007, of unvested equity awards that would
vest (includes restricted stock and RSUs).
|
|
|
|
Performance-based stock awards: market value,
as of December 29, 2006, of unvested performance-based
restricted stock grants that would vest.
|
|
|
|
Performance shares: present market value, as
of December 31, 2007, of unvested performance-based shares
that would vest.
|
|
|
|
IPP: estimated actuarial present value of
additional years of credited service.
|
|
|
|
Restoration Plan: difference in net present
value based on change of control; estimated actuarial present
value of additional years of credited service.
|
|
|
|
SERP: estimated actuarial present value of
additional years of credited service.
|
57
|
|
|
|
|
Health and welfare benefits: estimated value
of continuing health coverage for officer and
his/her
family under the Welfare Benefit Plan based on elected coverage
as of December 31, 2007.
|
|
|
|
Supplemental life insurance: benefit paid to
estate upon death.
|
|
|
|
Perquisites: estimated value of outplacement
and financial planning services.
|
Mr. Brady. Upon Mr. Bradys
retirement from the Company on December 14, 2007, he
received accelerated option vesting for 168,378 shares
subject to outstanding options that had a value of $337,540
based on the difference between the exercise price of such
options and the closing price of our common stock on
December 14, 2007. Mr. Brady also received an annual
incentive award as reported in the Non-Equity Incentive
Plan Compensation column of the Summary Compensation
Table. If there is a payout under the
2006-2008
period of the PSU Program, Mr. Brady will be entitled to a
pro rata payout based on the portion of the performance cycle
during which he was employed by the Company.
Mr. Winter. In connection with his
termination of employment, Mr. Winter received an
additional one years salary of $375,000, a severance
payment of $500,000 pursuant to the terms of a cash retention
arrangement with Mr. Winter, and COBRA continuation worth
$48,947, all of which amounts are disclosed in the Summary
Compensation Table for 2007.
Estimated
Potential Incremental Payments Upon Termination or Change of
Control as of December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination in
|
|
|
|
|
|
|
Termination w/o
|
|
|
|
|
|
Connection with
|
|
|
|
|
|
|
Cause or for Good
|
|
|
Upon Change of
|
|
|
a Change of
|
|
|
|
|
Name and Benefit
|
|
Reason(a)
|
|
|
Control(a)(b)
|
|
|
Control(a)(b)
|
|
|
Death(c)
|
|
|
Byrne, Patrick J.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (salary)
|
|
$
|
1,200,000
|
(d)
|
|
$
|
|
|
|
$
|
1,800,000
|
(f)
|
|
$
|
|
|
Cash (annual target incentive)
|
|
|
|
|
|
|
|
|
|
|
1,800,000
|
(f)
|
|
|
|
|
Cash (current year annual incentive)
|
|
|
246,923
|
(d)
|
|
|
246,923
|
(e)
|
|
|
|
|
|
|
|
|
Stock Options:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
1,692,839
|
(g)
|
|
|
|
|
|
|
|
|
Performance Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health and Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
23,322
|
|
|
|
|
|
Supplemental Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
Perquisites(j)
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,446,923
|
|
|
$
|
1,939,762
|
|
|
$
|
3,633,322
|
|
|
$
|
0
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination in
|
|
|
|
|
|
|
Termination w/o
|
|
|
|
|
|
Connection with
|
|
|
|
|
|
|
Cause or for Good
|
|
|
Upon Change of
|
|
|
a Change of
|
|
|
|
|
Name and Benefit
|
|
Reason(a)
|
|
|
Control(a)(b)
|
|
|
Control(a)(b)
|
|
|
Death(c)
|
|
|
Michael, Lanny H.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (salary)
|
|
$
|
363,000
|
(d)
|
|
$
|
|
|
|
$
|
726,000
|
(f)
|
|
$
|
|
|
Cash (annual target incentive)
|
|
|
|
|
|
|
|
|
|
|
508,200
|
(f)
|
|
|
|
|
Cash (current year annual incentive)
|
|
|
247,625
|
(d)
|
|
|
247,625
|
(e)
|
|
|
|
|
|
|
|
|
Service-Based Stock Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
406,200
|
(g)
|
|
|
|
|
|
|
|
|
(k) retention
|
|
|
406,200
|
(g)(k)
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
421,433
|
(g)
|
|
|
|
|
|
|
|
|
Health and Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
17,213
|
|
|
|
|
|
Supplemental Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,402,000
|
|
Perquisites(j)
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,016,825
|
|
|
$
|
1,075,258
|
|
|
$
|
1,261,413
|
|
|
$
|
1,402,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination in
|
|
|
|
|
|
|
Termination w/o
|
|
|
|
|
|
Connection with
|
|
|
|
|
|
|
Cause or for Good
|
|
|
Upon Change of
|
|
|
a Change of
|
|
|
|
|
Name and Benefit
|
|
Reason(a)
|
|
|
Control(a)(b)
|
|
|
Control(a)(b)
|
|
|
Death(c)
|
|
|
Anderson, Fredric B.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (salary)
|
|
$
|
214,000
|
(d)
|
|
$
|
|
|
|
$
|
428,000
|
(f)
|
|
$
|
|
|
Cash (annual target incentive)
|
|
|
|
|
|
|
|
|
|
|
214,000
|
(f)
|
|
|
|
|
Cash (current year annual incentive)
|
|
|
101,308
|
(d)
|
|
|
101,308
|
(e)
|
|
|
|
|
|
|
|
|
Stock Options:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
24,283
|
(g)
|
|
|
|
|
|
|
|
|
Service-Based Stock Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
81,240
|
(g)
|
|
|
|
|
|
|
|
|
Performance Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
196,337
|
(g)
|
|
|
|
|
|
|
|
|
Restoration Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(h) difference in net present value
|
|
|
|
|
|
|
4,289
|
(h)
|
|
|
|
|
|
|
|
|
Health and Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
22,376
|
|
|
|
|
|
Supplemental Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
806,000
|
|
Perquisites(j)
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
315,308
|
|
|
$
|
407,457
|
|
|
$
|
674,376
|
|
|
$
|
806,000
|
|
59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination in
|
|
|
|
|
|
|
Termination w/o
|
|
|
|
|
|
Connection with
|
|
|
|
|
|
|
Cause or for Good
|
|
|
Upon Change of
|
|
|
a Change of
|
|
|
|
|
Name and Benefit
|
|
Reason(a)
|
|
|
Control(a)(b)
|
|
|
Control(a)(b)
|
|
|
Death(c)
|
|
|
Harwell, Janis L.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (salary)
|
|
$
|
336,000
|
(d)
|
|
$
|
|
|
|
$
|
672,000
|
(f)
|
|
$
|
|
|
Cash (annual target incentive)
|
|
|
|
|
|
|
|
|
|
|
403,200
|
(f)
|
|
|
|
|
Cash (current year annual incentive)
|
|
|
194,769
|
(d)
|
|
|
194,769
|
(e)
|
|
|
|
|
|
|
|
|
Stock Options:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
78,585
|
(g)
|
|
|
|
|
|
|
|
|
Service-Based Stock Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
812,400
|
(g)
|
|
|
|
|
|
|
|
|
(k) retention
|
|
|
812,400
|
(g)(k)
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
414,669
|
(g)
|
|
|
|
|
|
|
|
|
Restoration Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(h) difference in net present value
|
|
|
|
|
|
|
9,207
|
(h)
|
|
|
|
|
|
|
|
|
Health and Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
10,219
|
|
|
|
|
|
Supplemental Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,299,000
|
|
Perquisites(j)
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,343,169
|
|
|
$
|
1,509,630
|
|
|
$
|
1,095,419
|
|
|
$
|
1,299,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination in
|
|
|
|
|
|
|
Termination w/o
|
|
|
|
|
|
Connection with
|
|
|
|
|
|
|
Cause or for Good
|
|
|
Upon Change of
|
|
|
a Change of
|
|
|
|
|
Name and Benefit
|
|
Reason(a)
|
|
|
Control(a)(b)
|
|
|
Control(a)(b)
|
|
|
Death(c)
|
|
|
Cohen, Kenneth L.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (salary)
|
|
$
|
224,540
|
(d)
|
|
$
|
|
|
|
$
|
449,080
|
(f)
|
|
$
|
|
|
Cash (annual target incentive)
|
|
|
|
|
|
|
|
|
|
|
224,540
|
(f)
|
|
|
|
|
Cash (current year annual incentive)
|
|
|
112,144
|
(d)
|
|
|
112,144
|
(e)
|
|
|
|
|
|
|
|
|
Stock Options:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
31,971
|
(g)
|
|
|
|
|
|
|
|
|
Performance Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) vesting accelerated
|
|
|
|
|
|
|
108,313
|
(g)
|
|
|
|
|
|
|
|
|
IPP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) present value of additional years of credited service
|
|
|
|
|
|
|
|
|
|
|
134,276
|
(i)
|
|
|
|
|
Restoration Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(h) difference in net present value
|
|
|
|
|
|
|
65,815
|
(h)
|
|
|
|
|
|
|
|
|
(i) present value of additional years of credited service
|
|
|
|
|
|
|
|
|
|
|
83,210
|
(i)
|
|
|
|
|
Health and Welfare Benefits
|
|
|
|
|
|
|
|
|
|
|
15,393
|
|
|
|
|
|
Supplemental Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
849,000
|
|
Perquisites(j)
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
336,684
|
|
|
$
|
318,243
|
|
|
$
|
916,499
|
|
|
$
|
849,000
|
|
|
|
|
(a) |
|
Pursuant to the COC Agreements and Severance Plans, the amount
of benefit may be reduced to an amount that will not trigger the
excise tax on excess parachute payments within the
meaning of Code Section 280G. The amounts on this table
have not been reduced to reflect any such reduction. |
60
|
|
|
(b) |
|
Some of our plans provide benefits to the covered employees in
the event of a Change of Control, whether or not his or her
employment also is terminated. The amounts to which our named
executive officers would be entitled in that event are reflected
in the column captioned Upon Change of Control. If
an executives employment also is terminated within two
years following the Change of Control, the additional amounts to
which our named executive officers would be entitled as a result
of such termination are reflected in the column captioned
Termination in connection with a Change of Control.
Pursuant to his COC Agreement, Mr. Byrne would receive the
amounts listed in the Termination in Connection with a
Change of Control column if he resigns or is terminated
for any reason within the
12-month
period following a Change of Control. |
|
(c) |
|
For all named executive officers other than Mr. Byrne, the death
benefit is four times the previous years salary (rounded
up to nearest $1,000), minus $50,000. When this benefit was
designed, the $50,000 reduction was intended as an offset for
the coverage of group term life insurance. Mr. Byrne is not
eligible for this death benefit. |
|
(d) |
|
In the event of Termination without Cause or for Good Reason,
the executive is entitled to a payment that includes a multiple
of his or her base salary. For Mr. Byrne, that multiple is
two times base salary. For all other named executive officers,
that multiple is one times base salary. In addition, the
executive is entitled a pro rata portion of his or her target
bonus for that year, based on the number of days worked during
the existing year. Mr. Byrne is the only one of our named
executive officers whose amount reflects less than a full
years employment with the Company. The amounts reported on
this table are the amounts reported for annual incentive awards
at target in the 2007 Grants of Plan-Based Awards
table. |
|
(e) |
|
Pursuant to the Incentive Plans, in the event of a Change of
Control, the employee is entitled a pro rata portion of his or
her target bonus based on the number of days worked during the
existing year. Mr. Byrne is the only one of our named
executive officers whose amount reflects less than a full
years employment with the Company. The amounts reported on
this table are the amounts reported for annual incentive awards
at target in the 2007 Grants of Plan-Based Awards
table. |
|
(f) |
|
In the event of Termination in connection with a Change of
Control, the executive is entitled to a payment that includes a
multiple of his or her base salary and annual incentive
opportunity, the latter of which is calculated based on
the highest monthly salary in a
12-month
period. For Mr. Byrne, that multiple is three times base
salary and annual incentive opportunity. For all other named
executive officers, that multiple is two times base salary and
annual incentive opportunity. |
|
(g) |
|
Pursuant to the Incentive Plans, in the event of a Change of
Control, all outstanding stock options will be deemed to be
fully vested as of the effective date of the Change of Control;
this table reflects the value of in-the-money options. All
outstanding awards of Restricted Stock or RSUs will be deemed to
be fully vested and restrictions removed as of the effective
date of the Change of Control. In addition, all outstanding
Awards of Restricted Stock or RSUs whose restrictions are based
on performance criteria, Performance Units and Performance
Shares, will be deemed to have been fully earned based on
performance at target being attained as of the effective date of
the Change of Control. The amounts on this table include the
payout of shares of our common stock, at target, of the PSU
performance cycles for
2005-2007,
2006-2008
and
2007-2009,
as applicable to each named executive officer. To calculate
these values as of December 31, 2007, we used $20.31 per
share of our common stock, which was the closing price on the
last business day of 2007. |
|
(h) |
|
Upon a Change of Control, participants in the Restoration Plan
and the SERP receive a lump-sum payment of the net present value
of their vested benefit. All of our named executive officers who
participate in the Restoration Plan are vested in the benefit
for that plan disclosed on the table in 2007 Pension
Benefits. Our Restoration Plan and SERP provide that we
use a different discount factor to calculate the net present
value in the event of a Change of Control than the discount
factor we use to calculate the net present value of the benefit
for financial reporting purposes. (The value used for financial
reporting purposes is the amount reflected for these plans on
the table in 2007 Pension Benefits.) The amounts
reported on this table for these plans Upon a Change of Control
represent the positive difference, as of December 31, 2007,
between (1) the net present value of the participants
benefit as calculated Upon Change of Control (using 4.85% rate
of interest and GATT2003 mortality), and (2) the net
present value of the participants |
61
|
|
|
|
|
benefit as calculated for financial reporting purposes (using
6.3% rate of interest for the Restoration Plan and 6.2% interest
rate for the SERP, and RP2000 combined healthy mortality
projected to 2015 (sex-distinct without collar adjustment). |
|
(i) |
|
If an executive experiences a Termination connection with a
Change of Control, pursuant to the IPP, Restoration Plan and
SERP, he or she is entitled a benefit reflecting two additional
years of service under such plan. The benefit payable is a
lump-sum payment equal to the present value of the increase in
the executives benefits from such plans due to the two
additional years of service. For the two additional years of
service, we assume that the executives compensation is his
or her most recent base salary and target bonus, and that no
future increases are made to the qualified plan limits or Social
Security wage base rules. To calculate the present value of the
additional benefit, we used the factors applicable to the 2007
plan year (4.85% rate of interest and GATT2003 mortality).
Mr. Cohen is the only executive who would benefit from the
provisions of this agreement. |
|
(j) |
|
In the event of a Termination in Connection with a Change of
Control the executives would be entitled to the reasonable cost
of outplacement services. The amount of services is not fixed,
but we do not expect them to exceed $10,000 in the aggregate per
executive. |
|
(k) |
|
In connection with the 2007 Executive Retention arrangements,
RSUs held by Mr. Michael and Ms. Harwell,
respectively, will be deemed to have vested (i.e., become
unrestricted) upon Termination without Cause or for Good Reason. |
PROPOSAL 3.
APPROVAL
OF THE INTERMEC, INC.
2008
EMPLOYEE STOCK PURCHASE PLAN
Our Board of Directors has approved the Intermec, Inc. 2008
Employee Stock Purchase Plan, or the 2008 ESPP, subject to
stockholder approval. At the time our Board approved the 2008
ESPP, it directed that the plan be submitted to our stockholders
for approval at the Annual Meeting. If the stockholders approve
the 2008 ESPP, it will become effective as of July 1, 2008.
Stockholders are being asked to approve the 2008 ESPP, which
provides for the issuance to our employees of shares of our
common stock pursuant to options granted under:
|
|
|
|
|
an employee stock purchase plan that is intended to qualify
under the terms of Code Section 423(b), or the 423
Plan; and
|
|
|
|
an employee stock purchase plan that is not intended to qualify
under Code Section 423(b), or the Non-423 Plan.
|
Our stockholders are also being asked to approve
1,500,000 shares to be authorized and reserved for issuance
under the 2008 ESPP.
The current Intermec, Inc. Employee Stock Purchase Plan, or the
Current ESPP, will expire at the earliest of
(a) December 31, 2008 (the current termination date of
the plan), (b) when all of the currently available shares
have been purchased under the Current ESPP, and (c) when we
implement a new employee stock purchase plan. We believe that an
employee stock purchase plan is necessary for us to maintain and
compete for qualified employee talent in our markets, including
markets outside the United States, and to enable the broad range
of our employees to continue to purchase our shares under a
company-sponsored program.
Stockholders are requested in this Proposal 3 to approve
the 2008 ESPP.
The principal features of the 2008 ESPP are summarized below,
but the summary is qualified in its entirety by reference to the
full text of the 2008 ESPP. A copy of the 2008 ESPP is attached
to this proxy statement as Appendix A and is incorporated
herein by reference.
62
Background
In September 1997, our Board adopted, and our stockholders
subsequently approved, the Current ESPP. As of March 31,
2008, an aggregate of 4,425,245 shares had been issued
under the Current ESPP since 1997, and 574,755 shares
remained available for purchase under the Current ESPP. As noted
above, the Current ESPP will expire no later than
December 31, 2008. If the stockholders approve the 2008
ESPP, the Current ESPP will expire on July 1, 2008, and the
shares remaining available under the Current ESPP will be
canceled and no longer available for purchase.
In order to give our Company increased flexibility in the
granting of options under an employee stock purchase program,
especially to
non-U.S. employees,
in March 2008, our Board adopted the 2008 ESPP, subject to
stockholder approval, which provides for, among other things,
the ability to grant options that do not comply with Code
Section 423(b).
Our Board believes that the 2008 ESPP is necessary in light of
the limited number of shares remaining under the Current ESPP
and the impending expiration of the Current ESPP. Our Board
firmly believes that the 2008 ESPP is in the best interests of
our Company and our stockholders, as it will enable employees to
continue to purchase shares of our Company at a discount, and
thereby align our employees interests with those of our
stockholders. Further, the 2008 ESPP provides our Company with
increased flexibility to allow broad-based, international
participation.
As of March 24, 2008, we had outstanding
61,490,337 shares of our common stock. The
1,500,000 shares requested for the 2008 ESPP represent
approximately 2.4% of these outstanding shares. The closing
price of our common stock, as reported on the New York Stock
Exchange on March 24, 2008, was $23.11 per share.
As of March 24, 2008, approximately 2,350 employees
were eligible to participate in the 2008 ESPP.
Key
Provisions
The purpose of the 2008 ESPP is to provide employees of our
Company and its designated subsidiaries or affiliates with a
convenient means of acquiring an equity interest in our Company
in order to enhance such employees sense of participation
in the affairs of our Company.
The rights to purchase common stock granted under the 2008 ESPP
are intended to be treated as either:
|
|
|
|
|
options issued under an employee stock purchase
plan, as that term is defined in Code Section 423(b)
(i.e., the 423 Plan), although our Company makes no
representation or warrant to maintain such qualification; or
|
|
|
|
options issued under an employee stock purchase plan that is not
subject to the terms and conditions of Code Section 423(b)
(i.e., the Non-423 Plan).
|
Our company will retain the discretion to grant options under
either the 423 Plan or the Non-423 Plan.
Administration
The 2008 ESPP will be administered by the Compensation Committee
appointed by our Board that has the discretion to determine all
matters related to options granted under the 2008 ESPP,
including all terms, conditions, restrictions and limitations.
However, all participants granted options under the 423 Plan
must have the same rights and privileges within the meaning of
Code Section 423(b)(5), except as may be required by
applicable law. The Compensation Committee has the discretion to
adopt rules, procedures or subplans regarding the 2008 ESPP
administration to conform to local laws or to enable employees
of our Company or certain subsidiaries or affiliates to
participate in the Non-423 Plan.
Offerings
The 2008 ESPP will be implemented by offering options to
eligible employees of our Company or its designated subsidiaries
or affiliates from time to time, at the discretion of the
Compensation Committee. Unless otherwise specified by the
Compensation Committee, each offering period is three months and
will
63
consist of one three-month purchase period. In no case may any
offering period have a duration exceeding 27 months.
Shares
Subject to the 2008 ESPP
Upon approval by the stockholders, an aggregate of
1,500,000 shares of common stock will be authorized for
issuance under the 2008 ESPP. If options under the 2008 ESPP
expire, lapse or otherwise terminate without being exercised,
the shares of common stock not purchased under such options
again become available for issuance under the 2008 ESPP.
Eligibility
Generally, any person who is employed by the Company or by a
subsidiary or affiliate of the Company that has been designated
by the Compensation Committee may participate in the 2008 Plan.
For the 423 Plan, the subsidiary must be at least 50% owned by
our Company. The Compensation Committee may, in its sole
discretion, designate whether the Company and that of its
subsidiaries or affiliates will participate in the 2008 ESPP and
whether they will participate in the 423 Plan or the Non-423
Plan.
Notwithstanding the foregoing, no employee is eligible for the
grant of any rights under the 2008 ESPP if, immediately after
such grant, the employee would own, directly or indirectly,
stock possessing 5% or more of the total combined voting power
or value of all classes of stock of our Company or of any
subsidiary (including any stock that such employee may purchase
under all outstanding rights and options), nor will any employee
be granted options to buy more than $25,000 worth of stock (such
limit to be determined based on the fair market value of the
shares) under all of our employee stock purchase plans in any
calendar year.
Participation
in the 2008 ESPP
An eligible employee becomes a participant in the 2008 ESPP by
delivering an enrollment form to the plan administrator. During
such enrollment process, the employee will authorize payroll
deductions or, if payroll deductions are not permitted under
local law, such other means of contribution (specified by the
Compensation Committee pursuant to the Non-423 Plan). An
employees payroll deductions or other contributions under
the 2008 ESPP may be up to 15% (or such lower percentage as the
Compensation Committee may determine) of such employees
compensation (as defined in the 2008 ESPP).
Purchase
Price
The purchase price per share at which shares are sold in an
offering period under the 2008 ESPP cannot be less than 85% of
the fair market value of a share of common stock on the purchase
date (i.e., the last date of the purchase period). The
purchase price will be determined at the discretion of the
Compensation Committee.
Payment
of Purchase Price; Payroll Deductions
The purchase price of the shares is accumulated by payroll
deductions or if payroll deductions are not
permitted under applicable local law, such other method of
contribution as specified by the Compensation Committee under
the Non-423 Plan over the purchase period. A
participant may reduce (but not increase) such payroll
deductions or other contributions at any time during an offering
period by filing a form with the plan administrator. The
reduction will take effect in the next payroll period. All
payroll deductions made for a participant are credited to his or
her account under the 2008 ESPP and deposited with our general
funds, unless otherwise required under applicable local law.
Purchase
of Stock
On the last day of the purchase period, the Company will
automatically apply the funds in the participants account
to purchase at the designated purchase price any whole or
fractional shares of our common stock. Under no circumstance
will a participant be entitled to purchase more than $25,000
worth of
64
stock (determined at the fair market value of the shares at the
time the option is granted) under all our employee stock
purchase plans in any calendar year. In the event that the
limits are exceeded, the participants payroll deductions
or other contributions will be returned, generally without
interest, unless otherwise required under applicable law.
Withdrawal
A participant may withdraw from an offering period by delivering
a withdrawal form to the administrator at any time up to the
purchase date, unless otherwise specified by the Compensation
Committee under the Non-423 Plan. Upon an employees
withdrawal from an offering period, we will distribute to the
employee all accumulated payroll deductions or other
contributions, without interest (unless the terms of the
offering provide otherwise). An employees withdrawal from
an offering period will not have any effect on the
employees eligibility to participate in subsequent
offering periods under the 2008 ESPP.
Restrictions
on Transfer
Rights granted under the 2008 ESPP are not transferable by a
participant other than by will and the laws of descent and
distribution.
Duration,
Amendment and Termination
Our Board may amend, suspend or terminate the 2008 ESPP at any
time. However, stockholder approval is required within
12 months of an amendment by our Board to the extent such
amendment requires stockholder approval in order for the 2008
ESPP to obtain employee stock purchase plan treatment under Code
Section 423 or to comply with the requirements of
Rule 16b-3
under the Securities Exchange Act of 1934, as amended, or any
securities exchange listing requirements.
Adjustments
upon Changes in Stock
In the event of a stock dividend, stock split, spin-off,
recapitalization, merger or certain other capital changes that
result in outstanding securities being exchanged for a different
number or class of securities, or, if new, different or
additional securities of our Company or another corporation are
received, then the Compensation Committee, in its sole
discretion, will make equitable adjustments as it deems
appropriate in the circumstances to the maximum number and kind
of shares of stock subject to the options under the 2008 ESPP
and the purchase price.
Participation
by our Named Executive Officers
Future benefits under the 2008 ESPP are not currently
determinable, as they will depend on the actual purchase price
of our shares of common stock in future offering periods, the
market value of our common stock on various future dates, the
amount of contributions eligible employees elect to make under
the 2008 ESPP and similar factors. However, our named executive
officers will be subject to the same purchase restrictions as
all other participants.
Federal
Income Tax Information
The following summary briefly describes U.S. federal income
tax consequences of rights under the 2008 ESPP, but is not a
detailed or complete description of all U.S. federal tax
laws or regulations that may apply, and does not address any
local, state or other country laws. Therefore, no one should
rely on this summary for individual tax compliance, planning or
decisions. Participants in the 2008 ESPP should consult their
own professional tax advisors concerning tax aspects of rights
under the 2008 ESPP. Nothing in this proxy statement is written
or intended to be used, and cannot be used, for the purposes of
avoiding taxpayer penalties. The discussion below concerning tax
deductions that may become available to us under
U.S. federal tax law is not intended to imply that we will
necessarily obtain a tax benefit or asset from those deductions.
Taxation of equity-based payments in other countries is complex,
does not generally correspond to federal tax laws and is not
covered by the summary below.
65
423 Plan. Options to purchase shares granted
under the 423 Plan are intended to qualify for favorable federal
income tax treatment associated with rights granted under an
employee stock purchase plan that qualifies under the provisions
of Code Section 423(b). Under these provisions, no income
will be taxable to a participant until the shares purchased
under the 2008 ESPP are sold or otherwise disposed of. If the
shares are disposed of within two years from the offering date
or within one year from the purchase date of the shares, a
transaction referred to as a disqualifying
disposition, the participant will realize ordinary income
in the year of such disposition equal to the difference between
the fair market value of the stock on the purchase date and the
purchase price. The amount of such ordinary income will be added
to the participants basis in the shares, and any
additional gain or resulting loss recognized on the disposition
of the shares after such basis adjustment will be a capital gain
or loss. A capital gain or loss will be long-term if the
participant holds the shares for more than one year after the
purchase date.
If the stock purchased under the 2008 ESPP is sold (or otherwise
disposed of) more than two years after the beginning of the
offering period and more than one year after the stock is
transferred to the participant, then the lesser of (a) the
excess of the fair market value of the stock at the time of such
disposition over the purchase price and (b) the excess of
the fair market value of the stock as of the beginning of the
offering period over the purchase price (determined as of the
beginning of the offering period) will be treated as ordinary
income. The amount of such ordinary income will be added to the
participants basis in the shares, and any additional gain
recognized on the disposition of the shares after such basis
adjustment will be long-term capital gain. If the fair market
value of the shares on the date of disposition is less than the
purchase price, there will be no ordinary income and any loss
recognized will be a capital loss.
Our company will generally be entitled to a deduction in the
year of a disqualifying disposition equal to the amount of
ordinary income realized in the United States by the participant
as a result of such disposition, subject to the satisfaction of
any tax-reporting obligations. In all other cases, no deduction
is allowed.
Non-423 Plan. If the option is granted under
the Non-423 Plan, then the amount equal to the difference
between the fair market value of the stock on the purchase date
and the purchase price will be treated as ordinary income at the
time of such purchase. In such instances, the amount of such
ordinary income will be added to the participants basis in
the shares, and any additional gain or resulting loss recognized
on the disposition of the shares after such basis adjustment
will be a capital gain or loss. A capital gain or loss will be
long-term if the participant holds the shares for more than one
year after the purchase date.
Our company will generally be entitled to a deduction in the
year of purchase equal to the amount of ordinary income realized
by the participant in the United States as a result of such
disposition, subject to the satisfaction of any tax-reporting
obligations. For U.S. participants, FICA/FUTA taxes will be
due in relation to ordinary income earned as a result of
participation in the Non-423 Plan.
RECOMMENDATION
The Board of Directors unanimously recommends that you
vote FOR the approval of the Intermec, Inc. 2008 Employee
Stock Purchase Plan.
PROPOSAL 4.
APPROVAL
OF THE INTERMEC, INC.
2008
OMNIBUS INCENTIVE PLAN
Our Board of Directors believes that the effective use of
stock-based long-term incentive compensation is vital to our
ability to achieve continued strong performance in the future by
providing a direct link between executive compensation and
long-term stockholder value creation. Accordingly, we are
seeking stockholder approval of the Intermec, Inc. 2008 Omnibus
Incentive Plan, or the 2008 Plan. The Board approved the 2008
Plan, subject to stockholder approval at the Annual Meeting.
If the 2008 Plan is approved by stockholders, it will replace
our 2004 Omnibus Incentive Compensation Plan, the
2002 Director Stock Option and Fee Plan, the 2001 Stock
Incentive Plan, and the 1999 Stock
66
Incentive Plan, all of which we refer to collectively in this
Proposal as the Current Incentive Plans and in the
text of the 2008 Plan as the Prior Plans. Following
stockholder approval of the 2008 Plan, no new awards will be
granted under the Current Incentive Plans. If stockholders do
not approve the 2008 Plan, the Current Incentive Plans will
remain available for new grants.
The 2008 Plan authorizes the issuance of 3,650,000 shares
of our common stock. In addition, up to 4,764,363 shares
authorized under the Current Incentive Plans may become
available for issuance under the 2008 Plan to the extent that
such shares:
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are not subject to awards under the Current Incentive Plans as
of the date of stockholder approval of the 2008 Plan (up to a
maximum of 1,943,257 shares); or
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on or after the date of stockholder approval of the 2008 Plan,
cease to be subject to awards outstanding under the Current
Incentive Plans as of the date of such stockholder approval
(such as by expiration, cancellation or forfeiture of the
awards) (up to a maximum of 2,821,106 shares).
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The maximum number of shares that may be issued under the 2008
Plan is 8,414,363 shares, including shares that may become
available from the Current Incentive Plans. As of March 24,
2008, we had outstanding 61,490,337 shares of common stock.
The shares authorized for issuance under the 2008 Plan,
including shares that may become available from the Current
Incentive Plans, represent approximately 13.68% of these
outstanding shares. This percentage calculation is not on a
fully diluted basis; for example, the number of outstanding
shares does not include shares subject to outstanding awards
under the Current Incentive Plans.
Stockholder approval of the 2008 Plan will also permit certain
performance-based awards described below to qualify for tax
deductibility under Code Section 162(m).
Stockholders are requested in this Proposal 4 to approve
the 2008 Plan.
The following description of the 2008 Plan is a summary, does
not purport to be a complete description of the 2008 Plan and is
qualified in its entirety by reference to the full text of the
2008 Plan. A copy of the 2008 Plan is attached to this proxy
statement as Appendix B and is incorporated herein by
reference.
DESCRIPTION
OF THE 2008 PLAN
Purpose
The purpose of the 2008 Plan is to attract, retain and motivate
our employees, officers and directors by providing them with the
opportunity to acquire a proprietary interest in the Company and
to align their interests and efforts to the long-term interests
of our stockholders. The 2008 Plan would also allow us to
provide the same opportunity to consultants, agents, advisors
and independent contractors.
Administration
Our Compensation Committee of the Board of Directors will
administer the 2008 Plan, except that our Governance Committee
will administer the 2008 Plan with respect to our non-employee
directors. The Board or the Compensation Committee may delegate
administration of the 2008 Plan in accordance with its terms.
References to the Committee below are, as
applicable, to the Compensation Committee, the Governance
Committee or other delegate, including a senior executive
officer of the Company authorized by our Board or Compensation
Committee to make grants to certain eligible employees of the
Company.
Eligibility
Awards may be granted under the 2008 Plan to employees,
officers, directors, consultants, agents, advisors and
independent contractors of the Company and its subsidiaries and
affiliates. As of March 24, 2008, approximately 2,350
employees, including seven executive officers, and seven
non-employee directors were eligible to receive awards under the
2008 Plan.
67
Number of
Shares
The number of shares of common stock authorized for issuance
under the 2008 Plan is 3,650,000. In addition, (a) any
shares not subject to awards under the Current Incentive Plans
as of the date of stockholder approval of the 2008 Plan plus
(b) any shares subject to outstanding awards under the
Current Incentive Plans as of the date of stockholder approval
of the 2008 Plan that cease to be subject to such awards (other
than from exercise or settlement of the awards in shares, such
as from awards expiring, terminating or being forfeited) will
automatically become available for issuance under the 2008 Plan,
up to an aggregate maximum of up to 4,764,363 shares.
Including the number of shares that may become available for
issuance under the 2008 Plan from the Current Incentive Plans,
the total number of shares that may be issued under the 2008
Plan is 8,414,363 shares.
The shares of common stock issuable under the 2008 Plan will
consist of authorized and unissued shares or shares now held or
subsequently acquired by us as treasury shares.
Shares of common stock covered by an award granted under the
2008 Plan will not be counted as used unless and until they are
issued and delivered to a participant.
The following shares will be available again for issuance under
the 2008 Plan:
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shares subject to awards that lapse, expire, terminate or are
canceled prior to issuance of the underlying shares;
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shares subject to awards that are subsequently forfeited to or
otherwise reacquired by us;
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shares withheld by or tendered to us as payment for the purchase
price of an award or to satisfy tax withholding obligations
related to an award; and
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shares related to an award that is settled in cash or in another
manner where some or all of the shares covered by the award are
not issued.
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Awards granted in assumption of or substitution for previously
granted awards in acquisition transactions will not reduce the
number of shares authorized for issuance under the 2008 Plan.
The maximum number of shares of common stock that may be issued
pursuant to the exercise of incentive stock options is the same
as the total number of shares authorized under the 2008 Plan.
If any change in our stock occurs by reason of any stock
dividend, stock split, spin-off, recapitalization, merger,
consolidation, combination or exchange of shares, distribution
to stockholders other than a normal cash dividend or other
change in our corporate or capital structure, the Committee will
make proportional adjustments to the maximum number and kind of
securities (a) available for issuance under the 2008 Plan,
(b) issuable as incentive stock options, (c) issuable
to certain individuals subject to Code Section 162(m), and
(d) that are subject to any outstanding award, including
the per share price of such securities.
Types of
Awards
The 2008 Plan permits the grant of any or all of the following
types of awards.
Stock Options. The Committee may grant either
incentive stock options, which must comply with Code
Section 422, or nonqualified stock options. The Committee
sets option exercise prices and terms, except that the exercise
price of stock options granted under the 2008 Plan must be at
least 100% of the fair market value of the common stock on the
date of grant, except in the case of options granted in
connection with assuming or substituting options in acquisition
transactions. At the time of grant, the Committee determines
when stock options are exercisable and when they expire, except
that the term of a stock option cannot exceed ten years. Unless
the Committee otherwise determines, fair market value means, as
of a given date, the closing price of our common stock during
regular session trading on the New York Stock Exchange.
Stock Appreciation Rights (SARs). The
Committee may grant SARs as a right in tandem with the number of
shares underlying stock options granted under the 2008 Plan or
on a stand-alone basis. SARs are the right to receive payment
per share of an exercised SAR in stock or cash, or a combination
of stock and
68
cash, equal to the excess of the shares fair market value
on the date of exercise over its fair market value on the date
the SAR was granted. Exercise of an SAR issued in tandem with
stock options will result in the reduction of the number of
shares underlying the related SAR to the extent of the SAR
exercised. The term of a stand-alone SAR cannot be more than ten
years, and the term of a tandem SAR will not exceed the term of
the related option.
Stock Awards, Restricted Stock and Stock
Units. The Committee may grant awards of shares
of common stock, or awards designated in units of common stock,
under the 2008 Plan. These awards may be made subject to
repurchase or forfeiture restrictions at the Committees
discretion. The restrictions may be based on continuous service
with us or the achievement of specified performance criteria, as
determined by the Committee.
Performance Awards. The Committee may grant
performance awards in the form of performance shares or
performance units. Performance shares are units valued by
reference to a designated number of shares of common stock, and
performance units are units valued by reference to a designated
amount of cash. Either may be payable in stock or cash, or a
combination of stock and cash, upon the attainment of
performance criteria and other terms and conditions as
established by the Committee.
Other Stock or Cash-Based Awards. The
Committee may grant other incentives payable in cash or in
shares of common stock, subject to the terms of the 2008 Plan
and any other terms and conditions determined by the Committee.
Award Limitations. No more than 10% of the
shares available under the 2008 Plan may be used for the grants
of awards, other than stock options or stock appreciation
rights, that have no restrictions or that vest based solely on
continuous employment or services over less than three years,
other than in the event of termination of employment or
services. In addition, other than stock options or stock
appreciation rights, any awards subject to performance goals
must have a minimum performance period of a year.
Repricing
Without stockholder approval, the Board or the Compensation
Committee may not (a) cancel or amend outstanding options
or stock appreciation rights for the purpose of repricing,
replacing or regranting such awards with options or stock
appreciation rights that have a purchase or grant price that is
less than the purchase or grant price for the original option or
stock appreciation right, except in connection with certain
adjustments, or (b) issue an option or amend an outstanding
option to provide for the grant or issuance of a new option on
exercise of the original option. To date we have not repriced
stock options in that manner.
Performance-Based
Compensation under Code Section 162(m)
Performance Goals and Criteria. Under Code
Section 162(m), we are generally prohibited from deducting
for U.S. federal income tax purposes compensation paid to
our Chief Executive Officer and our three other most highly
compensated executive officers (other than the chief financial
officer) in excess of $1 million per person in any year.
However, compensation that qualifies as performance-based is
excluded for purposes of calculating the amount of compensation
subject to the $1 million limit.
If the Compensation Committee intends to qualify an award under
the 2008 Plan as qualified performance-based
compensation under Code Section 162(m), the
performance goals selected by the Compensation Committee may be
based on the attainment of specified levels of one, or any
combination, of the following performance criteria for the
Company as a whole or any business unit, as reported or
calculated by the Company: net earnings or net income (before or
after taxes); earnings per share (basic or fully diluted); net
sales growth or bookings growth; revenues; operating profit or
income (including or excluding depreciation, amortization,
extraordinary items, restructuring charges or other expenses);
return measures (including, but not limited to, return on
assets, capital, net capital utilized, equity or sales); working
capital; cash flow (including, but not limited to, operating
cash flow, free cash flow or cash flow return on capital);
earnings before or after taxes, interest, depreciation
and/or
amortization; gross or operating profit; cost control; strategic
initiatives; market share; improvements in capital structure;
productivity ratios; share price (including, but not
69
limited to, growth measures and total stockholder return);
expense targets; margins; operating efficiency or margins;
capital efficiency; strategic targets; economic profit; employee
or customer satisfaction, services performance, subscriber, cash
management or asset management metrics; working capital targets;
cash value added (CVA); or market or economic value
added (EVA).
The performance goals also may be based on the achievement of
specified levels of performance for the Company as a whole or
any business unit or applicable affiliate under one or more of
the performance goals described above relative to the
performance of other corporations.
The Compensation Committee may provide in any award that any
evaluation of performance may include or exclude any of the
following events that occur during a performance period: asset
write-downs; litigation or claim judgments or settlements; the
effect of changes in tax laws, accounting principles, or other
laws or provisions affecting reported results; any
reorganization and restructuring programs; extraordinary
nonrecurring items as described in Accounting Principles Board
Opinion No. 30 or in Managements Discussion and
Analysis of Financial Condition and Results of Operations
appearing in the Companys annual report to stockholders
for the applicable year; acquisitions or divestitures; foreign
exchange gains and losses; and gains and losses on asset sales.
Adjustments and Certification. The
Compensation Committee may adjust the amount payable pursuant to
an award under the 2008 Plan that is intended to qualify as
performance-based compensation under Code
Section 162(m) downward but not upward. The Compensation
Committee may not waive the achievement of performance goals
related to an award except in the case of a participants
death or disability. Code Section 162(m) requires that the
Compensation Committee certify that performance goals were
achieved before the payment of the performance-based
compensation.
Limitations. Subject to certain adjustments,
participants who are granted awards intended to qualify as
performance-based compensation under Code
Section 162(m) may not be granted awards, other than
performance units, for more than 2,250,000 shares of common
stock in any
36-month
period. The maximum dollar value payable to any participant with
respect to performance units or other awards payable in cash
that are intended to qualify as performance-based
compensation cannot exceed $5,000,000 in any calendar year.
Change of
Control
Under the 2008 Plan, unless otherwise provided in the instrument
evidencing an award or in a written employment, services or
other agreement between the participant and us, in the event of
a change of control:
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All outstanding awards, other than performance shares,
performance units, and stock awards and stock units with
restrictions based on performance criteria, will become fully
and immediately exercisable, and all applicable deferral and
restriction limitations or forfeiture provisions will lapse,
immediately prior to the change of control and such awards will
terminate at the effective time of the change of control.
However, upon certain changes of control, such as certain
reorganizations, mergers or consolidations, such awards will
become fully and immediately exercisable, and all applicable
deferral and restriction limitations or forfeiture provisions
will lapse, only if and to the extent such awards are not
converted, assumed or replaced by a successor company.
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All performance shares, performance units, and stock awards or
stock units with restrictions based on performance criteria will
be payable based on targeted performance being attained as of
the effective date of the change of control and will be paid
within sixty days following the effective date of the change of
control.
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In the event of certain reorganizations, mergers or
consolidations, the Committee may in its discretion instead
provide that a participants outstanding awards will be
cashed out.
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Definition of Change of Control. Unless the
Committee determines otherwise with respect to an award at the
time it is granted or unless otherwise defined for purposes of
an award in a written employment, services or other agreement
between a participant and us, a change of control of the Company
generally means the occurrence of any of the following events:
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an acquisition by any individual, entity or group of beneficial
ownership of 30% or more of either (a) the then outstanding
shares of common stock or (b) the combined voting power of
the then outstanding voting securities of the Company entitled
to vote generally in the election of directors
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(excluding generally any acquisition directly from the Company,
any acquisition by the Company, any acquisition by any employee
benefit plan of the Company or an affiliate, or the consummation
of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company pursuant to which certain requirements are met);
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a change in the composition of the Board such that the incumbent
board members cease to constitute at least a majority of the
Board (not including directors whose election, or nomination for
election by stockholders, was approved by a majority of the
incumbent board);
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consummation of certain reorganizations, mergers or
consolidations or other disposition of all or substantially all
of the assets of the Company; or
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consummation of a complete liquidation or dissolution of the
Company.
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Amendment
and Termination
The Board or the Compensation Committee may amend the 2008 Plan,
except that if any applicable statute, rule or regulation
requires stockholder approval for an amendment to the 2008 Plan,
then to the extent so required, stockholder approval will be
obtained. The Board or the Compensation Committee may also
suspend or terminate all or any portion of the 2008 Plan at any
time, but any suspension or termination may not, without a
participants consent, materially adversely affect any
rights under any outstanding award. Unless sooner terminated by
the Board or Compensation Committee, the 2008 Plan will
terminate ten years after the date of stockholder approval of
the 2008 Plan.
Federal
Income Tax Information
The following is a brief summary of the U.S. federal income
tax consequences of the 2008 Plan generally applicable to us and
to participants in the 2008 Plan who are subject to
U.S. federal taxes. The summary is based on the
U.S. Internal Revenue Code of 1986, as amended, applicable
Treasury Regulations and administrative and judicial
interpretations thereof, each as in effect on the date of this
proxy statement and is, therefore, subject to future changes in
the law, possibly with retroactive effect. The summary is
general in nature and does not purport to be legal or tax
advice. Furthermore, the summary does not address issues
relating to any U.S. gift or estate tax consequences or the
consequences of any state, local or foreign tax laws.
Stock
Options.
Nonqualified Stock Options. A participant
generally will not recognize taxable income upon the grant or
vesting of a nonqualified stock option with an exercise price at
least equal to the fair market value of the common stock on the
date of grant and no additional deferral feature. When a
nonqualified stock option is exercised, a participant generally
will recognize compensation taxable as ordinary income in an
amount equal to the difference between the fair market value of
the shares underlying the option on the date of exercise and the
option exercise price. When a participant sells the shares, the
participant will have short-term or long-term capital gain or
loss, as the case may be, equal to the difference between the
amount the participant received from the sale and the tax basis
of the shares sold. The tax basis of the shares generally will
be equal to the greater of the fair market value of the shares
on the exercise date or the option exercise price.
Incentive Stock Options. A participant
generally will not recognize taxable income upon the grant of an
incentive stock option. If a participant exercises an incentive
stock option during employment as an employee or within three
months after his or her employment ends (12 months in the
case of permanent and total disability), the participant will
not recognize taxable income at the time of exercise for regular
U.S. federal income tax purposes (although the participant
generally will have taxable income for alternative minimum tax
purposes at that time as if the option were a nonqualified stock
option). If a participant sells or otherwise disposes of the
shares acquired upon exercise of an incentive stock option after
the later of (a) one year from the date the participant
exercised the option and (b) two years from the grant date
of the option, the participant generally will recognize
long-term capital gain or loss equal to the difference between
the amount the participant received in the disposition and the
option exercise price. If a participant sells or otherwise
disposes
71
of shares acquired upon exercise of an incentive stock option
before these holding period requirements are satisfied, the
disposition will constitute a disqualifying
disposition, and the participant generally will recognize
taxable ordinary income in the year of disposition equal to the
excess of the fair market value of the shares on the date of
exercise over the option exercise price (or, if less, the excess
of the amount realized on the disposition of the shares over the
option exercise price). The balance of the participants
gain on a disqualifying disposition, if any, will be taxed as
short-term or long-term capital gain, as the case may be.
With respect to both nonqualified stock options and incentive
stock options, special rules apply if a participant uses shares
of common stock already held by the participant to pay the
exercise price.
Stock Appreciation Rights. A participant
generally will not recognize taxable income upon the grant or
vesting of an SAR with a grant price at least equal to the fair
market value of the common stock on the date of grant and no
additional deferral feature. Upon the exercise of an SAR, a
participant generally will recognize compensation taxable as
ordinary income in an amount equal to the difference between the
fair market value of the shares underlying the SAR on the date
of exercise and the grant price of the SAR.
Unrestricted Stock Awards. Upon receipt of an
unrestricted stock award, a participant generally will recognize
compensation taxable as ordinary income in an amount equal to
the excess of the fair market value of the shares at such time
over the amount, if any, paid by the participant with respect to
the shares.
Restricted Stock Awards, Restricted Stock Units, Performance
Shares and Performance Units. A participant
generally will not have taxable income upon the grant of
restricted stock, restricted stock units, performance shares or
performance units. Instead, the participant will recognize
ordinary income at the time of vesting or payout equal to the
fair market value (on the vesting or payout date) of the shares
or cash received minus any amount paid. For restricted stock
only, a participant may instead elect to be taxed at the time of
grant.
Tax Consequences to the Company. In the
foregoing cases, we generally will be entitled to a deduction at
the same time and in the same amount as a participant recognizes
ordinary income, subject to certain limitations imposed under
the Code.
Code Section 409A. We intend that awards
granted under the 2008 Plan comply with, or otherwise be exempt
from, Code Section 409A, but make no representation or
warranty to that effect.
Tax Withholding. We are authorized to deduct
or withhold from any award granted or payment due under the 2008
Plan, or require a participant to remit to us, the amount of any
withholding taxes due in respect of the award or payment and to
take such other action as may be necessary to satisfy all
obligations for the payment of applicable withholding taxes. We
are not required to issue any shares of common stock or
otherwise settle an award under the 2008 Plan until all tax
withholding obligations are satisfied.
Plan
Benefits
All awards to employees, officers, directors and consultants
under the 2008 Plan are made at the discretion of the Committee.
Therefore, the benefits and amounts that will be received or
allocated under the 2008 Plan are not determinable at this time.
However, please refer to the description of grants made to our
named executive officers in the last fiscal year described in
the 2007 Grants of Plan-Based Awards table. Grants
made to our non-employee directors in the last fiscal year are
described in Director Compensation. The closing
price of our common stock, as reported on the New York Stock
Exchange on March 24, 2008, was $23.11 per share.
RECOMMENDATION
The Board of Directors unanimously recommends that you
vote FOR the approval of the Intermec, Inc. 2008 Omnibus
Incentive Plan.
72
EQUITY
COMPENSATION PLAN INFORMATION
The table below provides information, as of December 31,
2007, concerning securities authorized for issuance under equity
compensation plans of the Company.
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Number of
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Number of Securities
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Securities to
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Remaining Available
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be Issued Upon
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for Future Issuance
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Exercise
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Weighted Average
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Under Equity
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of Outstanding
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Exercise Price of
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Compensation Plans
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Options, Warrants
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Outstanding Options,
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(Excluding Securities
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and Rights
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Warrants and Rights
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Reflected in Column(a))
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Plan category
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(a)
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(b)
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(c)
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Equity compensation plans approved by stockholders
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2,947,456
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*
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$
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19.31
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2,690,144
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**/***
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Equity compensation plans not approved by stockholders
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Not included here are 64,000 RSUs issued under the 2004 Plan,
which, if vested, will be paid in the form of unrestricted
shares of common stock. This number also does not include PSUs,
which, if vested, must be paid in shares of common stock, as
provided in the PSU Program. The number of PSUs that have been
granted, at target, for the
2006-2008
and
2007-2009
performance periods, is 207,181. Participants can earn from 0%
to 200% of their target shares based on the Companys
financial performance. The terms of PSUs are described in
Compensation Discussion and Analysis. |
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Includes 370,750 shares available under the 1999 and 2001
Stock Incentive Plans, which provide for incentive awards in the
form of stock options, with or without related stock
appreciation rights, or in the form of restricted stock. The
total of 2,690,144 also includes 1,615,580 shares available
under the 2004 Plan, which provides for awards of RSUs,
performance shares and units, and other types of incentive
awards, in addition to stock options, stock appreciation rights
and restricted stock. It also includes 621,839 shares
available under the Employee Stock Purchase Plan and
81,975 shares available under the 2002 Director Stock
Option and Fee Plan. The director plan allows for certain annual
retainer fees and meeting fees to be paid in the form of common
stock or deferred stock units. See the information provided in
Director Compensation. |
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Excludes 3,650,000 shares that will become available for
issuance upon stockholder approval of the 2008 Omnibus Incentive
Plan and 1,500,000 shares that will become available for
issuance upon stockholder approval of the 2008 Employee Stock
Purchase Plan. |
73
APPENDIX A
TO PROXY STATEMENT
INTERMEC, INC.
2008 EMPLOYEE STOCK PURCHASE PLAN
(Effective July 1, 2008)
Intermec, Inc., a Delaware corporation (the
Company), proposes to grant options
(Options) for purchase of the
Companys common stock, $.01 par value
(Common Stock), to eligible employees
of the Company and its Designated Subsidiaries (as hereinafter
defined) pursuant to this Employee Stock Purchase Plan (this
Plan). This Plan includes two
components: a Code (as defined below) Section 423(b) Plan
and a non-Code Section 423(b) Plan. For purposes of this
Plan, parent corporation and subsidiary
(collectively, Subsidiaries) shall
have the same meanings as parent corporation and
subsidiary corporation set forth in
Sections 424(e) and 424(f), respectively, of the Internal
Revenue Code of 1986, as amended (the
Code). In addition, for purposes of
this Plan, Affiliate shall mean an
entity, other than a Subsidiary, in which the Company has a
controlling interest.
The Company intends this Plan to qualify as an employee
stock purchase plan under Section 423 of the Code
(including any amendments or successor provisions to such
Section), but makes no representation of such status nor
undertaking to maintain such status. In addition, this Plan
document authorizes the grant of options under a non-Code
Section 423(b) Plan which does not qualify under
Section 423(b) of the Code pursuant to rules, procedures or
subplans adopted by the Committee (as defined in Section 4
of this Plan) (or its designate) designed to achieve tax,
securities law or other objectives for eligible employees and
the Company. Except as otherwise indicated herein, the non-Code
Section 423(b) Plan will operate and be administered in the
same manner as the Code Section 423(b) Plan.
A total of 1,500,000 shares of the Common Stock is reserved
for issuance under this Plan. Such number shall be subject to
adjustments effected in accordance with Section 16 of this
Plan. Any shares of Common Stock that have been made subject to
an Option that cease to be subject to the Option (other than by
means of exercise of the Option), including, without limitation,
in connection with the cancellation or termination of an Option,
shall again be available for issuance in connection with future
grants of Options under this Plan.
The purpose of this Plan is to provide employees of the Company
and its designated Subsidiaries or Affiliates, as that term is
defined in Section 5 of this Plan (Designated
Subsidiaries), with a convenient means of
acquiring an equity interest in the Company through payroll
deductions (or, if payroll deductions are not permitted under
local laws, through other means specified by the Committee and
as part of the non-Code Section 423(b) Plan), to enhance
such employees sense of participation in the affairs of
the Company and Subsidiaries and Affiliates.
This Plan shall be administered by a committee (the
Committee) appointed by the
Companys Board of Directors (the
Board) consisting of at least two
members, who need not be members of the Board and who may be
eligible to participate in the Plan. The Committee shall
initially be the Compensation Committee of the Board. Subject to
the provisions of this Plan, the Committee shall have exclusive
authority, in its discretion, to determine all matters relating
to Options granted under this Plan, including all terms,
conditions, restrictions, and limitations of Options and to
determine all factual matters relevant to the Plan and its
administration; provided, however, that all participants granted
Options under an offering pursuant to the Code
Section 423(b)(5) shall have the same rights and privileges
within the meaning of Code Section 423(b)(5) except as
required by applicable law. The Committee shall also have
exclusive authority to interpret this Plan and may from time to
time adopt rules and regulations of general application for this
Plans administration.
A-1
The Committee shall have the discretion to determine whether
eligible employees of the Company or a Designated Subsidiary
shall participate in the Code Section 423(b) Plan or the
non-Code Section 423(b) Plan. Additionally, the Committee
has the discretion to adopt rules regarding the Plan
administration to conform to local laws or to enable eligible
employees of the Company and Designated Subsidiaries to
participate in the Plan. The Committee may also adopt rules,
procedures or
sub-plans
applicable to particular Designated Subsidiaries or locations,
which
sub-plans
may be designed to be outside the scope of Code
Section 423. Without limiting the generality of the
foregoing, the Committee is specifically authorized to adopt
rules and procedures regarding the handling of payroll
deductions, payment of interest and handling of stock
certificates which vary according to local requirements as part
of the non-Code Section 423(b) Plan. The Committee has the
authority to suspend or limit participation in the non-Code
Section 423(b) Plan for any reason, including
administrative or economic reasons. The Committees
exercise of discretion and interpretation of this Plan, its
rules and regulations, and all actions taken and determinations
made by the Committee pursuant to this Plan shall be conclusive
and binding on all parties involved or affected. The Committee
may delegate administrative duties to employees of the Company
or to independent contractors, as it deems advisable. All
expenses incurred in connection with the administration of this
Plan shall be paid by the Company and the Designated
Subsidiaries; provided, however, that the Committee may require
a participant to pay any costs or fees in connection with the
sale by the participant of shares of Common Stock acquired under
this Plan.
For all purposes of this Plan, the term Designated
Subsidiaries shall mean those entities of the
Company, including any Subsidiaries or Affiliates, which may
hereafter be determined by the Committee or the Board to be
Designated Subsidiaries for participation in the Plan. For
purposes of the Code Section 423(b) Plan only, such
Designated Subsidiaries must be Subsidiaries as defined in
Section 1 of the Plan. Such determination of Designated
Subsidiaries may permit participation in this Plan of all of the
eligible employees working for the Designated Subsidiary or,
with respect to the non-Code Section 423(b) Plan, only
those eligible employees who work for a Designated Subsidiary in
a particular country or countries as determined by the Committee
or the Board. A Designated Subsidiary will cease to be a
Designated Subsidiary on the earlier of (i) the date the
Committee or the Board determines that such entity is no longer
a Designated Subsidiary or (ii) with respect to the Code
Section 423(b) Plan only, such Designated Subsidiary ceases
for any reason to be a parent corporation or
subsidiary corporation as defined in
Sections 424(e) and 424(f), respectively, of the Code.
Any employee of the Company or the Designated Subsidiaries is
eligible to participate in the Plan for any Offering Period (as
hereinafter defined) under this Plan except the following:
(a) employees who, together with any other person whose
stock would be attributed to such employee pursuant to
Section 424(d) of the Code, own stock or hold options to
purchase stock possessing five percent or more of the total
combined voting power or value of all classes of stock of the
Company or any of its Subsidiaries or who, as a result of being
granted Options under this Plan would own stock or hold options
to purchase stock possessing five percent or more of the total
combined voting power or value of all classes of stock of the
Company or any of its Subsidiaries;
(b) employees whose employment terms are covered by a
collective bargaining agreement in situations where the
applicable union or other collective bargaining unit has either
refused to bargain with respect to this Plan as an employee
benefit (having been specifically requested to do so by the
Company or a Subsidiary) or has considered this Plan as a
potential employee benefit and has rejected this Plan or has
otherwise determined that employees which such union or other
bargaining unit represents may not participate in this Plan,
provided the exclusion of such employees is not prohibited under
applicable local law;
(c) employees who are citizens of a country which prohibits
foreign corporations from granting stock options to any of its
citizens; and
(d) no employee of the Company or a Designated Subsidiary
shall be eligible to participate in the non-Code
Section 423(b) Plan if he or she is an officer or director
of the Company subject to the
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requirements of Section 16 of the U.S. Securities
Exchange Act of 1934, as amended (the Exchange
Act) with respect to the Companys securities.
The offering periods of this Plan (individually, an
Offering Period) shall be of periods
not to exceed the maximum period permitted by Section 423
of the Code. Unless and until determined otherwise by the
Committee or the Board, (a) Offering Periods shall commence
on January 1, April 1, July 1 and October 1 of each
calendar year, and (b) each Offering Period shall consist
of one three-month purchase period (individually, a
Purchase Period) during which payroll
deductions of the participants are accumulated under this Plan
or, if payroll deductions are not permitted under local law,
during which other means of contribution, specified by the
Committee pursuant to the non-Code Section 423(b) Plan, are
collected. The first day of each Offering Period is referred to
as the Offering Date. The last day of
each Purchase Period is referred to as the Purchase
Date. Subject to the requirements of
Section 423 of the Code, the Committee or the Board shall
have the power to change the duration of Offering Periods or
Purchase Periods with respect to future offerings.
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7.
|
Participation
in this Plan
|
Eligible employees may become participants in an Offering Period
under this Plan on the first Offering Date by delivering an
enrollment form provided by the Company to the administrator for
this Plan at the facility of the Company or the Designated
Subsidiary by which the participant is employed (the
Local Administrator) not later than
the 15th day of the month (or if such day is not a business
day for the Company or the applicable Subsidiary, on the
immediately preceding business day) before such Offering Date
unless a later time for filing the enrollment form authorizing
payroll deductions or other contributions is set by the
Committee for all eligible employees with respect to a given
Offering Period. Once an employee becomes a participant in the
Plan with respect to an Offering Period, such employee will
automatically participate in the Offering Period commencing
immediately following the last day of the prior Offering Period
unless the employee withdraws from this Plan or terminates
further participation in the Offering Period as set forth in
Sections 13 and 14 below. Such participant is not required
to file any additional enrollment form in order to continue
participation in this Plan, except that the Committee may
require the filing of new enrollment forms by participants who
transfer to another facility of the Company or a Designated
Subsidiary.
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8.
|
Grant of
Option on Enrollment
|
Enrollment by an eligible employee in this Plan with respect to
an Offering Period will constitute the grant by the Company to
such employee of an Option to purchase on the Purchase Date up
to that number of shares of Common Stock of the Company, and any
fraction of a share, determined by dividing (a) the amount
accumulated in such employees payroll deduction account
during the Purchase Period ending on such Purchase Date by
(b) the Purchase Price as that term is defined in
Section 9; provided, however, that the number of shares
which may be purchased pursuant to an Option may in no event
exceed the number of shares determined in the manner set forth
in Section 11(b) of the Plan or such other maximum number
of shares as may be specified in the future by the Committee in
lieu of the limitation set forth in Section 11(b).
The purchase price per share (the Purchase
Price) at which a share of Common Stock will be
sold in any Purchase Period shall be no less than
85 percent of the fair market value of such share on the
Purchase Date; provided that the Committee may change the
Purchase Price to be anywhere from eighty-five percent (85%) to
one hundred percent (100%) of the fair market value of a Share
on the Offering Date or the Purchase Date.
For purposes of this Plan, the term fair market
value on a given date shall be the closing price for the
Common Stock on that date during regular session trading on the
New York Stock Exchange, or if not trading on that date, such
price on the last preceding date on which the Common Stock was
traded. If there is no
A-3
regular trading market for the Common Stock, the fair market
value of the Common Stock shall be as determined by the
Committee in its sole discretion, exercised in good faith. The
Committee may change the manner in which the Purchase Price is
determined with respect to future offerings if such changed
manner of computation is announced prior to the first day of the
first Offering Period to be affected by such change.
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10.
|
Purchase
of Shares; Changes in Payroll Deductions; Issuance of
Shares
|
(a) Funds contributed by each participant for the purchase
of shares under this Plan shall be accumulated by regular
payroll deductions made during each Offering Period, unless
payroll deductions are not permitted under local laws as
determined by the Committee, in which case the participant may
contribute by such other means as specified by the Committee and
as part of the non-Code Section 423(b) Plan. The deductions
shall be made as a percentage of the participants
Compensation in 1 percent increments comprising not less
than 1 percent and not more than 15 percent of
Compensation, provided that the Committee may, in its sole
discretion, set a lower percentage of Compensation as the
maximum allowable deduction. As used herein, except as provided
in the following sentence,
Compensation shall mean all base
salary, wages, cash bonuses, commissions, and overtime;
provided, however, that, for purposes of determining a
participants Compensation, any election by such
participant to reduce his or her regular cash remuneration under
Sections 125 or 401(k) of the Code or pursuant to a
nonqualified deferred compensation plan shall be treated as if
the participant did not make such election.
Compensation does not include
severance pay, hiring and relocation allowances, pay in lieu of
vacation, automobile allowances, imputed income arising under
any Company group insurance or benefit program, income received
in connection with stock options, or any other special items of
remuneration including any bonus, commission, or fee which, in
the judgment of the Committee, is paid to a participant for the
accomplishment of a particular non-ordinary course transaction
or circumstance. The Committee shall have the discretion to
determine what constitutes Compensation for participants outside
the United States. Payroll deductions shall commence on the
first payday following the Offering Date and shall continue
through the last payday of the Offering Period unless sooner
altered or terminated as provided in this Plan.
(b) A participant may lower (but not increase) the rate of
payroll deductions or contribution during an Offering Period by
filing with the Local Administrator a new authorization for
payroll deductions or other contributions, in which case the new
rate shall become effective for the next payroll period
commencing more than 15 days after the Local
Administrators receipt of the authorization and shall
continue for the remainder of the Offering Period unless changed
as described below. Such change in the rate of payroll
deductions or contribution may be made at any time during an
Offering Period, but not more than one change may be made
effective during any Offering Period. Notwithstanding the
foregoing, a participant may lower the rate of payroll
deductions or contribution to zero for the remainder of the
Offering Period. A participant may increase or decrease the rate
of payroll deductions or contribution for any subsequent
Offering Period by filing with the Local Administrator a new
authorization for payroll deductions or other contributions not
later than the 15th day of the month (or if such date is
not a business day, the immediately preceding business day)
before the beginning of such Offering Period. A participant who
has decreased the rate of withholding or contribution to zero
will be deemed to continue as a participant in the Plan until
the participant withdraws from the Plan in accordance with the
provisions of Section 13 or his or her participation is
terminated in accordance with the provisions of Section 14.
A participant shall have the right to withdraw from this Plan in
the manner set forth in Section 13 regardless of whether
the participant has exercised his or her right to lower the rate
at which payroll deductions or contributions are made during the
applicable Offering Period.
(c) All payroll deductions made for or contributions
received from a participant will be credited to his or her
account under this Plan and deposited with the general funds of
the Company, except as may be required by applicable law. No
interest will accrue on payroll deductions or contributions,
except as may be required by applicable law. All payroll
deductions or contributions received or held by the Company may
be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll
deductions or contributions, except as may be required by
applicable law.
(d) On each Purchase Date, provided that the participant
has not terminated employment in accordance with Section 14
or has not submitted to the Local Administrator a signed and
completed withdrawal form, in
A-4
either case on or before the 15th day (or if such day is
not a business day, on the immediately preceding business day)
of the last month of the Offering Period in accordance with
Section 10(b) or Section 13 of this Plan, or the Plan
has not been terminated prior to the date referred to in the
foregoing clause, the Company shall apply the funds then in the
participants account to the purchase at the Purchase Price
of whole and any fractional share of Common Stock issuable under
the Option granted to such participant with respect to the
Offering Period to the extent that such Option is exercisable on
the Purchase Date.
(e) During a participants lifetime, such
participants Option to purchase shares hereunder is
exercisable only by him or her. The participant will have no
interest or voting right in shares covered by his or her Option
until such Option has been exercised.
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11.
|
Limitations
on Rights to Purchase
|
(a) No participant shall be entitled to purchase stock
under this Plan at a rate which, when aggregated with his or her
rights to purchase stock under all other employee stock purchase
plans of the Company or any Subsidiary, exceeds $25,000 in fair
market value determined as of the Offering Date (or such other
limit as may be imposed by the Code) for each calendar year in
which the employee participates in this Plan. The Company shall
have the authority to take all necessary action, including but
not limited to, suspending the payroll deductions of any
participant, in order to ensure compliance with this Section.
(b) The number of shares which may be purchased by any
employee on the first Purchase Date to occur in any calendar
year may not exceed the number of shares determined by dividing
$25,000 (or such other limit as may be imposed by the Code) by
the fair market value (as defined in Section 9) of a
share of Common Stock on the first day of the Offering Period in
which such Purchase Date occurs. The number of shares which may
be purchased by any employee on any subsequent Purchase Date
which occurs in the same calendar year (as that referred to in
the preceding sentence) shall not exceed the number of shares
determined by performing the calculation described below, with
all computations to be made to the nearest ten thousandth of a
whole share of Common Stock or one hundredth of one cent, as the
case may be.
Step One: The number of shares purchased by
the employee during any previous Offering Period which occurred
in the same calendar year shall be multiplied by the fair market
value (as defined in Section 9) of a share of Common
Stock on the first day of such previous Offering Period in which
such shares were purchased.
Step Two: The amount determined in Step One
shall be subtracted from $25,000.
Step Three: The amount determined in Step Two
shall be divided by the fair market value (as defined in
Section 9) of a share of Common Stock on the first day
of the Offering Period in which the subsequent Purchase Date
(for which the maximum number of shares which may be purchased
is being determined by this calculation) occurs. The quotient so
obtained shall be the maximum number of shares which may be
purchased by any employee on such subsequent Purchase Date.
Subject to the limitations of Section 423 of the Code, the
Committee may from time to time determine that a lower maximum
number of shares may be purchased on any given Purchase Date in
lieu of the maximum amounts described above in this
Section 11, in which case the number of shares which may be
purchased by any employee on such Purchase Date may not exceed
such different limitation.
(c) If the number of shares to be purchased on a Purchase
Date by all employees participating in this Plan exceeds the
number of shares then available for issuance under this Plan,
then the Company will make a pro rata allocation of the
remaining shares in as uniform a manner as shall be reasonably
practicable and as the Committee shall determine to be
equitable. In such event, the Company shall give written notice
of such reduction of the number of shares to be purchased under
a participants Option to each participant affected thereby.
(d) Any payroll deductions or contributions accumulated in
a participants account which are not used to purchase
stock due to the limitations in this Section 11 shall be
returned to the participant as soon as practicable after the end
of the applicable Purchase Period without interest, except as
otherwise required by local law.
A-5
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12.
|
Evidence
of Stock Ownership
|
Promptly following each Purchase Date, the number of full and
fractional shares of Common Stock purchased by each participant
shall be deposited into an account established in the
participants name at a stock brokerage or other financial
services firm designated or approved by the Committee (the
Plan Financial Agent). Unless
otherwise provided by law, unless a participant elects to sell
or gift shares acquired under the Plan, such shares must be
retained in an account with the Plan Financial Agent for a
period of twenty-one (21) months following the Purchase
Date, or some other time period required by the Code or
specified by the Committee, even in the event that the
participant terminates his or her employment with the Company;
provided, however, that if the Option was granted under the
non-Code Section 423(b) Plan, the shares of Common Stock
acquired under the Option are not subject to such holding
period. With respect to full (but not fractional) shares for
which the Code Section 423(a) holding period has been
satisfied, the participant may move those shares to another
account of the participants choosing or request those
shares be transferred to the participant in book entry form
through the Companys direct registration system or that a
stock certificate for full (but not fractional) shares be issued
and delivered to him or her.
(a) Each participant may withdraw from an Offering Period
under this Plan by signing and delivering to the Local
Administrator a written notice to that effect on a form provided
for such purpose. Such withdrawal may be elected at any time on
or prior to the 15th day of the last month (or if such date
is not a business day, the immediately preceding business day)
of an Offering Period, provided that a later withdrawal may be
permitted by the Committee under the non-Code
Section 423(b) Plan, if necessary or advisable under local
law.
(b) Upon withdrawal from this Plan, the accumulated payroll
deductions or contributions of the participant not theretofore
utilized for the purchase of shares of Common Stock on a
Purchase Date shall be returned to the withdrawn participant,
without interest (except as otherwise required under local
laws), and his or her participation in this Plan shall
terminate. In the event a participant voluntarily elects to
withdraw from this Plan, he or she may not resume his or her
participation in this Plan during the same Offering Period, but
he or she may participate in any subsequent Offering Period by
filing a new authorization for payroll deductions or other
contributions in the same manner as set forth above for initial
participation in this Plan.
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14.
|
Termination
of Employment; Leave of Absence
|
Termination of a participants employment for any reason,
including retirement, death, or the failure of a participant to
remain an eligible employee, immediately terminates his or her
participation in this Plan. In such event, except as provided in
Section 15, the payroll deductions or contributions
credited to the participants account will be returned to
him or her or, in the case of his or her death, to his or her
beneficiary or heirs, without interest, except as otherwise
required under local laws. For purposes of this Section 14,
an employee will not be deemed to have terminated employment or
failed to remain in the continuous employ of the Company or any
of its Subsidiaries in the case of any leave of absence approved
by the Committee, provided that (a) such leave does not
exceed 3 months, or (b) if such leave is longer than
3 months, the employees right to reemployment is
provided either by statute or by contract. If the period of
leave exceeds 3 months and the employees right to
reemployment is not provided either by statute or by contract,
the employment relationship is deemed to terminate on the first
day immediately following such three-month period. For purposes
of this Section 14, an employee will not be deemed to have
terminated employment or failed to remain in the continuous
employ of the Company or any of its Subsidiaries in the case of
transfer between or amongst the Company and any Subsidiary.
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15.
|
Return of
Payroll Deductions
|
In the event a participants interest in this Plan is
terminated by withdrawal, termination of employment, or
otherwise, or in the event this Plan is terminated by the Board,
the Company shall promptly deliver to the participant all
payroll deductions and contributions of the participant to the
Plan which have not yet been applied to the purchase of stock
unless such termination of participation occurs later than the
15th day of the
A-6
final month of the Offering Period (or if such date is not a
business day, on the preceding business day), or the latest date
permitted for withdrawal by the Committee in which event such
payroll deductions and contributions will be utilized to
purchase Common Stock for the participant. No interest shall
accrue on the payroll deductions of a participant in this Plan,
except as otherwise required under local laws.
In the event that at any time or from time to time a stock
dividend, stock split, spin-off, combination or exchange of
shares, recapitalization, merger, consolidation, distribution to
stockholders other than a normal cash dividend, or other change
in the Companys corporate or capital structure results in
(a) the outstanding shares of Common Stock or any
securities exchanged therefor or received in their place being
exchanged for a different number or class of securities of the
Company or of any other corporation or (b) new, different,
or additional securities of the Company or of any other
corporation being received by the holders of shares of Common
Stock, then the Committee, in its sole discretion, shall make
such equitable adjustments as it shall deem appropriate in the
circumstances in the maximum number and kind of shares of stock
subject to this Plan as set forth in Sections 1 and 2, the
number and kind of shares subject to outstanding Options, and
the Purchase Price. The determination by the Committee as to the
terms of any of the foregoing adjustments shall be conclusive
and binding.
Neither payroll deductions nor other contributions credited to a
participants account nor any rights with regard to the
exercise of an Option or to receive shares under this Plan may
be assigned, transferred, pledged, or otherwise disposed of in
any way (other than by will, the laws of descent and
distribution, or as provided in Section 24 hereof) by the
participant. Any such attempt at assignment, transfer, pledge,
or other disposition shall be void and without effect.
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18.
|
Reports
and Status of Accounts
|
Individual accounts will be maintained by the Plan Financial
Agent for each participant in this Plan. The Plan Financial
Agent shall send to each participant promptly after the end of
each Purchase Period a report of his or her account setting
forth with respect to such Purchase Period the total payroll
deductions or other contributions accumulated, the number of
whole and any fractional share purchased, and the per share
price thereof, and also setting forth the total number of shares
(including any fractional share) then held in his or her
account. Neither the Company nor any Designated Subsidiary shall
have any liability for any error or discrepancy in any such
report.
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19.
|
No Rights
to Continued Employment; No Implied Rights
|
Neither this Plan nor the grant of any Option hereunder shall
confer any right on any employee to remain in the employ of the
Company or any Subsidiary or restrict the right of the Company
or any Subsidiary to terminate such employees employment.
The grant of any Option hereunder during any Offering Period
shall not give a participant any right to similar grants
thereafter.
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20.
|
Equal
Rights and Privileges
|
All eligible employees shall have equal rights and privileges
with respect to the Code Section 423(b) Plan except as
required by applicable law so that the Code Section 423(b)
Plan qualifies as an employee stock purchase plan
within the meaning of Section 423 or any successor
provision of the Code and the related regulations.
All notices or other communications by a participant to the
Company under or in connection with this Plan shall be deemed to
have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the
Company for the receipt thereof.
A-7
This Plan may be amended by the stockholders of the Company. The
Board may also amend this Plan in such respects as it shall deem
advisable; however, stockholder approval will be required for
any amendment that will increase the total number of shares as
to which Options may be granted under this Plan, or, but for
such shareholder approval, cause the Code Section 423(b)
Plan to fail to continue to qualify as an employee stock
purchase plan under Section 423 of the Code.
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23.
|
Termination
of the Plan
|
The Companys stockholders or the Board may suspend or
terminate this Plan at any time. No Options shall be granted
during any period of suspension of this Plan.
In the event of a participants death prior to the delivery
to him or her (or to the Plan Financial Agent on his or her
behalf) of any shares or cash held by the Company for the
account of the participant, and to the extent permitted by local
law, the Company shall deliver such shares or cash to the
executor or administrator of the estate of the participant.
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25.
|
Conditions
Upon Issuance of Shares; Limitation on Sale of Shares
|
The Company shall not be required to issues Shares with respect
to an Option unless the exercise of such Option and the issuance
and delivery of such shares pursuant thereto shall comply with
all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the
rules and regulations promulgated thereunder, and the
requirements of any stock exchange or automated quotation system
upon which the shares may then be listed, and shall be further
subject to the approval of the Company with respect to such
compliance.
The Plan which has been adopted by the Companys Board of
Directors shall become effective on July 1, 2008, subject
to stockholder approval.
Except to the extent that provisions of this Plan are governed
by applicable provisions of the Code or any other substantive
provision of federal law, this Plan shall be construed in
accordance with, and shall be governed by, the substantive laws
of the State of Delaware without regard to any provisions of
Delaware law relating to the conflict of laws.
* * * * *
A-8
APPENDIX B
TO PROXY STATEMENT
INTERMEC,
INC.
2008 OMNIBUS INCENTIVE PLAN
SECTION 1.
PURPOSE
The purpose of the Intermec, Inc. 2008 Omnibus Incentive Plan is
to attract, retain and motivate employees, officers, directors,
consultants, agents, advisors and independent contractors of the
Company and its Related Companies by providing them with the
opportunity to acquire a proprietary interest in the Company and
to align their interests and efforts to the long-term interests
of the Companys stockholders.
SECTION 2.
DEFINITIONS
Certain capitalized terms used in the Plan have the meanings set
forth in Appendix A.
SECTION 3.
ADMINISTRATION
3.1 Administration
of the Plan
The Plan shall be administered by the Board or the Compensation
Committee, which shall be composed of two or more directors,
each of whom shall qualify as a non-employee
director within the meaning of
Rule 16b-3(b)(3)
promulgated under the Exchange Act (or any successor definition
adopted by the Securities and Exchange Commission), an
outside director within the meaning of
Section 162(m), and an independent director as
defined under the New York Stock Exchange listing standards.
3.2 Delegation
Notwithstanding the foregoing, the Board or the Compensation
Committee may delegate responsibility for administering the
Plan, including with respect to designated classes of Eligible
Persons, to different committees consisting of one or more
members of the Board, subject to such limitations as the Board
deems appropriate, except with respect to Awards to Participants
who are subject to Section 16 of the Exchange Act or Awards
to officers who are or may become Covered Employees. Members of
any committee shall serve for such term as the Board may
determine, subject to removal by the Board at any time. To the
extent consistent with applicable law, the Board or the
Compensation Committee may authorize one or more officers of the
Company to grant Awards to designated classes of Eligible
Persons, within limits specifically prescribed by the Board or
the Compensation Committee; provided, however, that no such
officer shall have or obtain authority to grant Awards to
himself or herself or to any person subject to Section 16
of the Exchange Act. All references in the Plan to the
Committee shall be, as applicable, to the Board, the
Compensation Committee or any other committee or any officer to
whom the Board or the Compensation Committee has delegated
authority to administer the Plan.
3.3 Administration
and Interpretation by Committee
(a) Except for the terms and conditions explicitly set
forth in the Plan and to the extent permitted by applicable law,
the Committee shall have full power and exclusive authority,
subject to such orders or resolutions not inconsistent with the
provisions of the Plan, to (i) select the Eligible Persons
to whom Awards may from time to time be granted under the Plan;
(ii) determine the type or types of Award to be granted to
each Participant under the Plan; (iii) determine the number
of shares of Common Stock to be covered by each Award granted
under the Plan; (iv) determine the terms and conditions of
any Award granted under the Plan; (v) approve the forms of
notice or agreement for use under the Plan; (vi) determine
whether, to what extent and under what circumstances Awards may
be settled in cash, shares of Common Stock or other property or
canceled or suspended; (vii) determine whether, to what
extent and under what circumstances cash, shares of Common
Stock, other property and other amounts payable with respect to
an Award shall be deferred either automatically or at the
election of the Participant, subject to Section 409A and in
accordance with Section 6.3
B-1
of the Plan; (viii) interpret and administer the Plan and
any instrument or agreement entered into under the Plan;
(ix) establish such rules and regulations as it shall deem
appropriate for the proper administration of the Plan, including
as described in Section 17.6 of the Plan; (x) delegate
ministerial duties to such of the Companys employees as it
so determines; and (xi) make any other determination and
take any other action that the Committee deems necessary or
desirable for administration of the Plan.
(b) In no event, however, shall the Board or the Committee
have the right, without stockholder approval, to (i) cancel
or amend outstanding Options or SARs for the purpose of
repricing, replacing or regranting such Options or SARs with
Options or SARs that have a purchase or grant price that is less
than the purchase or grant price for the original Options or
SARs except in connection with adjustments provided in
Section 14, or (ii) issue an Option or amend an
outstanding Option to provide for the grant or issuance of a new
Option on exercise of the original Option.
(c) The effect on the vesting of an Award of a
Company-approved leave of absence or a Participants
reduction in hours of employment or service shall be determined
by the Companys chief human resources officer or other
person performing that function or, with respect to directors or
executive officers subject to the reporting requirements of
Section 16(a) of the Exchange Act, by the Compensation
Committee, whose determination shall be final.
(d) Decisions of the Committee shall be final, conclusive
and binding on all persons, including the Company, any
Participant, any stockholder and any Eligible Person. A majority
of the members of the Committee may determine its actions.
SECTION 4. SHARES
SUBJECT TO THE PLAN
4.1 Authorized
Number of Shares
Subject to adjustment from time to time as provided in
Section 14.1, the aggregate maximum number of shares of
Common Stock available for issuance under the Plan shall be:
(a) 3,650,000 shares; plus
(b) (i) any authorized shares not issued or subject to
outstanding awards under the Companys 2004 Omnibus
Incentive Compensation Plan, the 2002 Director Stock Option
and Fee Plan, the 2001 Stock Incentive Plan and the 1999 Stock
Incentive Plan (the Prior Plans) as of
the Effective Date and (ii) any shares subject to
outstanding awards under the Prior Plans as of the Effective
Date that subsequently cease to be subject to such awards (other
than by reason of exercise or settlement of the awards to the
extent they are exercised for or settled in vested and
nonforfeitable shares), up to an aggregate maximum of
4,764,363 shares.
Shares issued under the Plan shall be drawn from authorized and
unissued shares or shares now held or subsequently acquired by
the Company as treasury shares.
4.2 Share
Usage
(a) Shares of Common Stock covered by an Award shall not be
counted as used unless and until they are actually issued and
delivered to a Participant. If any Award lapses, expires,
terminates or is canceled prior to the issuance of shares
thereunder or if shares of Common Stock are issued under the
Plan to a Participant and thereafter are forfeited to or
otherwise reacquired by the Company, the shares subject to such
Awards and the forfeited or reacquired shares shall again be
available for issuance under the Plan. Any shares of Common
Stock (i) tendered by a Participant or retained by the
Company as full or partial payment to the Company for the
purchase price of an Award or to satisfy tax withholding
obligations in connection with an Award, or (ii) covered by
an Award that is settled in cash, or in a manner such that some
or all of the shares of Common Stock covered by the Award are
not issued, shall be available for Awards under the Plan. The
number of shares of Common Stock available for issuance under
the Plan shall not be reduced to reflect any dividends or
dividend equivalents that are reinvested into additional shares
of Common Stock or credited as additional shares of Common Stock
subject or paid with respect to an Award.
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(b) The Committee shall also, without limitation, have the
authority to grant Awards as an alternative to or as the form of
payment for grants or rights earned or due under other
compensation plans or arrangements of the Company.
(c) Notwithstanding anything in the Plan to the contrary,
the Committee may grant Substitute Awards under the Plan.
Substitute Awards shall not reduce the number of shares
authorized for issuance under the Plan. In the event that an
Acquired Entity has shares available for awards or grants under
one or more preexisting plans not adopted in contemplation of
such acquisition or combination, then, to the extent determined
by the Committee, the shares available for grant pursuant to the
terms of such preexisting plan (as adjusted, to the extent
appropriate, using the exchange ratio or other adjustment or
valuation ratio or formula used in such acquisition or
combination to determine the consideration payable to holders of
common stock of the entities that are parties to such
acquisition or combination) may be used for Awards under the
Plan and shall not reduce the number of shares of Common Stock
authorized for issuance under the Plan; provided, however, that
Awards using such available shares shall not be made after the
date awards or grants could have been made under the terms of
such preexisting plans, absent the acquisition or combination,
and shall only be made to individuals who were employees of the
Acquired Entity prior to such acquisition or combination. In the
event that a written agreement between the Company and an
Acquired Entity pursuant to which a merger or consolidation is
completed is approved by the Board and that agreement sets forth
the terms and conditions of the substitution for or assumption
of outstanding awards of the Acquired Entity, those terms and
conditions shall be deemed to be the action of the Committee
without any further action by the Committee, except as may be
required for compliance with
Rule 16b-3
under the Exchange Act, and the persons holding such awards
shall be deemed to be Participants.
(d) Notwithstanding the other provisions in this
Section 4.2, the maximum number of shares that may be
issued upon the exercise of Incentive Stock Options shall equal
the aggregate share number stated in Section 4.1, subject
to adjustment as provided in Section 14.1.
4.3 Limitations
Subject to adjustment as provided in Section 14.1, the
aggregate number of shares that may be issued pursuant to Awards
granted under the Plan (other than Awards of Options or Stock
Appreciation Rights) that contain no restrictions or
restrictions based solely on continuous employment or services
over fewer than three years (except in the event of Termination
of Service) shall not exceed 10% of the aggregate maximum number
of shares specified in Section 4.1.
SECTION 5.
ELIGIBILITY
An Award may be granted to any employee, officer, director,
consultant, agent, advisor or independent contractor of the
Company or a Related Company whom the Committee from time to
time selects. The foregoing are Eligible Persons.
SECTION 6.
AWARDS
6.1 Form,
Grant and Settlement of Awards
The Committee shall have the authority, in its sole discretion,
to determine the type or types of Awards to be granted under the
Plan. Such Awards may be granted either alone or in addition to
or in tandem with any other type of Award. Any Award settlement
may be subject to such conditions, restrictions and
contingencies as the Committee shall determine.
6.2 Evidence
of Awards
Awards granted under the Plan shall be evidenced by a written,
including an electronic, instrument that shall contain such
terms, conditions, limitations and restrictions as the Committee
shall deem advisable and that are not inconsistent with the Plan.
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6.3 Deferrals
The Committee may permit or require a Participant to defer
receipt of the payment of any Award if and to the extent set
forth in the instrument evidencing the Award at the time of
grant. If any such deferral election is permitted or required,
the Committee, in its sole discretion, shall establish rules and
procedures for such payment deferrals, which may include the
grant of additional Awards or provisions for the payment or
crediting of interest or dividend equivalents, including
converting such credits to deferred stock unit equivalents;
provided, however, that the terms of any deferrals under this
Section 6.3 shall comply with all applicable law, rules and
regulations, including, without limitation, Section 409A.
6.4 Dividends
and Distributions
Participants holding Awards may, if the Committee so determines,
be credited with dividends paid with respect to the underlying
shares or dividend equivalents while the Awards are so held in a
manner determined by the Committee in its sole discretion. The
Committee may apply any restrictions to the dividends or
dividend equivalents that the Committee deems appropriate. The
Committee, in its sole discretion, may determine the form of
payment of dividends or dividend equivalents, including cash,
shares of Common Stock, Restricted Stock or Stock Units.
Notwithstanding the foregoing, the right to any dividends or
dividend equivalents declared and paid on the number of shares
underlying an Option or Stock Appreciation Right may not be
contingent, directly or indirectly, on the exercise of the
Option or a Stock Appreciation Right, and an Award providing a
right to dividends or dividend equivalents declared and paid on
the number of shares underlying an Option or a Stock
Appreciation Right, the payment of which is not contingent upon,
or otherwise payable on, the exercise of the Option or a Stock
Appreciation Right, must comply with or qualify for an exemption
under Section 409A.
SECTION 7.
OPTIONS
7.1 Grant
of Options
The Committee may grant Options designated as Incentive Stock
Options or Nonqualified Stock Options.
7.2 Option
Exercise Price
The exercise price for shares purchased under an Option shall be
at least 100% of the Fair Market Value of the Common Stock on
the Grant Date, except in the case of Substitute Awards.
7.3 Term
of Options
Subject to earlier termination in accordance with the terms of
the Plan and the instrument evidencing the Option, the maximum
term of an Option shall be ten years from the Grant Date.
7.4 Exercise
of Options
The Committee shall establish and set forth in each instrument
that evidences an Option the time at which, or the installments
in which, the Option shall vest and become exercisable, any of
which provisions may be waived or modified by the Committee at
any time.
To the extent an Option has vested and become exercisable, the
Option may be exercised in whole or from time to time in part by
delivery, as directed by the Company, to the Company or a
brokerage firm designated or approved by the Company of a
properly executed stock option exercise agreement or notice, in
a form and in accordance with procedures established by the
Company, setting forth the number of shares with respect to
which the Option is being exercised, the restrictions imposed on
the shares purchased under such exercise agreement or notice, if
any, and such representations and agreements as may be required
by the Committee, accompanied by payment in full as described in
Sections 7.5 and 12. An Option may be exercised only for
whole shares and may not be exercised for less than a reasonable
number of shares at any one time, as determined by the Committee.
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7.5 Payment
of Exercise Price
The exercise price for shares purchased under an Option shall be
paid in full, as directed by the Company, to the Company or a
brokerage firm designated or approved by the Company by delivery
of consideration equal to the product of the Option exercise
price and the number of shares purchased. Such consideration
must be paid before the Company will issue the shares being
purchased and must be in a form or a combination of forms
acceptable to the Committee for that purchase, which forms may
include:
(a) cash;
(b) check or wire transfer;
(c) having the Company withhold shares of Common Stock that
would otherwise be issued on exercise of the Option that have an
aggregate Fair Market Value equal to the aggregate exercise
price of the shares being purchased under the Option;
(d) tendering (either actually or, so long as the Common
Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, by attestation) shares of Common Stock owned by
the Participant that have an aggregate Fair Market Value equal
to the aggregate exercise price of the shares being purchased
under the Option;
(e) so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, and to the
extent permitted by law, delivery of a properly executed
exercise agreement or notice, together with irrevocable
instructions to a brokerage firm designated or approved by the
Company to deliver promptly to the Company the aggregate amount
of proceeds to pay the Option exercise price and any withholding
tax obligations that may arise in connection with the exercise,
all in accordance with the regulations of the Federal Reserve
Board (i.e., a cashless exercise); or
(f) such other consideration as the Committee may permit.
7.6 Effect
of Termination of Service
The Committee shall establish and set forth in each instrument
that evidences an Option whether the Option shall continue to be
exercisable, and the terms and conditions of such exercise,
after a Termination of Service, any of which provisions may be
waived or modified by the Committee at any time, provided that
any such waiver or modification shall satisfy the requirements
for exemption under Section 409A.
If the exercise of the Option following a Participants
Termination of Service, but while the Option is otherwise
exercisable, would be prohibited solely because the issuance of
Common Stock would violate either the registration requirements
under the Securities Act or the Companys insider trading
policy, then the Option shall remain exercisable until the
earlier of (a) the Option Expiration Date and (b) the
expiration of a period of three months (or such other period of
time as determined by the Committee in its sole discretion)
after the Participants Termination of Service during which
the exercise of the Option would not be in violation of the
Securities Act or the Companys insider trading policy
requirements.
7.7 Incentive
Stock Option Limitations
Notwithstanding any other provisions of the Plan, the terms and
conditions of any Incentive Stock Options shall in addition
comply in all respects with Section 422 of the Code, or any
successor provision, and any applicable regulations thereunder.
Individuals who are not employees of the Company or one of its
parent or subsidiary corporations (as such terms are defined for
purposes of Section 422 of the Code) may not be granted
Incentive Stock Options. To the extent the aggregate Fair Market
Value of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by a Participant
during any calendar year exceeds $100,000 (or, if different, the
maximum limitation in effect at the time of grant under the
Code), such portion in excess of $100,000 shall be treated as a
Nonqualified Stock Option. If any Participant shall make any
disposition of shares of Common Stock issued pursuant to the
exercise of an Incentive Stock Option under the circumstances
described in Section 421(b) of the Code (relating to
certain disqualifying dispositions), such Participant shall
notify the Company of such disposition within ten days thereof.
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SECTION 8.
STOCK APPRECIATION RIGHTS
8.1 Grant
of Stock Appreciation Rights
The Committee may grant Stock Appreciation Rights to
Participants at any time on such terms and conditions as the
Committee shall determine in its sole discretion. An SAR may be
granted in tandem with an Option or alone
(freestanding). The grant price of a
tandem SAR shall be equal to the exercise price of the related
Option. The grant price of a freestanding SAR shall be
established in accordance with procedures for Options set forth
in Section 7.2. An SAR may be exercised upon such terms and
conditions and for the term as the Committee determines in its
sole discretion; provided, however, that, subject to earlier
termination in accordance with the terms of the Plan and the
instrument evidencing the SAR, the maximum term of a
freestanding SAR shall be ten years, and in the case of a tandem
SAR, (a) the term shall not exceed the term of the related
Option and (b) the tandem SAR may be exercised for all or
part of the shares subject to the related Option upon the
surrender of the right to exercise the equivalent portion of the
related Option, except that the tandem SAR may be exercised only
with respect to the shares for which its related Option is then
exercisable.
8.2 Payment
of SAR Amount
Upon the exercise of an SAR, a Participant shall be entitled to
receive payment in an amount determined by multiplying:
(a) the difference between the Fair Market Value of the
Common Stock on the date of exercise over the grant price of the
SAR by (b) the number of shares with respect to which the
SAR is exercised. At the discretion of the Committee as set
forth in the instrument evidencing the Award, the payment upon
exercise of an SAR may be in cash, in shares, in some
combination thereof or in any other manner approved by the
Committee in its sole discretion.
8.3 Post-Termination
Exercise
The Committee shall establish and set forth in each instrument
that evidences a freestanding SAR whether the SAR shall continue
to be exercisable, and the terms and conditions of such
exercise, after a Termination of Service, any of which
provisions may be waived or modified by the Committee at any
time, provided that any such waiver or modification shall
satisfy the requirements under Section 409A.
SECTION 9.
STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS
9.1 Grant
of Stock Awards, Restricted Stock and Stock Units
The Committee may grant Stock Awards, Restricted Stock and Stock
Units on such terms and conditions and subject to such
repurchase or forfeiture restrictions, if any, which may be
based on continuous service with the Company or a Related
Company or the achievement of any performance goals, as the
Committee shall determine in its sole discretion, which terms,
conditions and restrictions shall be set forth in the instrument
evidencing the Award. Notwithstanding the foregoing, any Stock
Awards, Restricted Stock and Stock Units subject to performance
goals shall have a performance period of at least one year.
9.2 Issuance
of Shares
Upon the satisfaction of any terms, conditions and restrictions
prescribed with respect to Restricted Stock or Stock Units, or
upon a Participants release from any terms, conditions and
restrictions of Restricted Stock or Stock Units, as determined
by the Committee, and subject to the provisions of
Section 12, (a) the shares of Restricted Stock covered
by each Award of Restricted Stock shall become freely
transferable by the Participant, and (b) Stock Units shall
be paid in shares of Common Stock or, if set forth in the
instrument evidencing the Awards, in cash or a combination of
cash and shares of Common Stock. Any fractional shares subject
to such Awards shall be paid to the Participant in cash.
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SECTION 10.
PERFORMANCE AWARDS
10.1 Performance
Shares
The Committee may grant Awards of Performance Shares, designate
the Participants to whom Performance Shares are to be awarded
and determine the number of Performance Shares and the terms and
conditions of each such Award. Performance Shares shall consist
of a unit valued by reference to a designated number of shares
of Common Stock, the value of which may be paid to the
Participant by delivery of shares of Common Stock or, if set
forth in the instrument evidencing the Award, of such property
as the Committee shall determine, including, without limitation,
cash, shares of Common Stock, other property, or any combination
thereof, upon the attainment of performance goals, as
established by the Committee, and other terms and conditions
specified by the Committee. Performance Shares shall have a
performance period of at least one year.
Subject to Section 15 and Section 17.5, the amount to
be paid under an Award of Performance Shares may be adjusted on
the basis of such further consideration as the Committee shall
determine in its sole discretion.
10.2 Performance
Units
The Committee may grant Awards of Performance Units, designate
the Participants to whom Performance Units are to be awarded and
determine the number of Performance Units and the terms and
conditions of each such Award. Performance Units shall consist
of a unit valued by reference to a designated amount of property
other than shares of Common Stock, which value may be paid to
the Participant by delivery of such property as the Committee
shall determine, including, without limitation, cash, shares of
Common Stock, other property, or any combination thereof, upon
the attainment of performance goals, as established by the
Committee, and other terms and conditions specified by the
Committee. Performance Units shall have a performance period of
at least one year.
Subject to Section 15 and Section 17.5, the amount to
be paid under an Award of Performance Units may be adjusted on
the basis of such further consideration as the Committee shall
determine in its sole discretion.
SECTION 11.
OTHER STOCK OR CASH-BASED AWARDS
Subject to the terms of the Plan and such other terms and
conditions as the Committee deems appropriate, the Committee may
grant other incentives payable in cash or in shares of Common
Stock under the Plan.
SECTION 12.
WITHHOLDING
The Company may require the Participant to pay to the Company
the amount of (a) any taxes that the Company is required by
applicable federal, state, local or foreign law to withhold with
respect to the grant, vesting or exercise of an Award
(tax withholding obligations) and
(b) any amounts due from the Participant to the Company or
to any Related Company (other
obligations) to the extent such amounts are not
deferred compensation within the meaning of
Section 409A. The Company shall not be required to issue
any shares of Common Stock or otherwise settle an Award under
the Plan until such tax withholding obligations and other
obligations are satisfied.
The Committee may permit or require a Participant to satisfy all
or part of the Participants tax withholding obligations
and other obligations by (a) paying cash to the Company,
(b) having the Company withhold an amount from any cash
amounts otherwise due or to become due from the Company to the
Participant, (c) having the Company withhold a number of
shares of Common Stock that would otherwise be issued to the
Participant (or become vested, in the case of Restricted Stock)
having a Fair Market Value equal to the tax withholding
obligations and other obligations, or (d) surrendering a
number of shares of Common Stock the Participant already owns
having a value equal to the tax withholding obligations and
other obligations. To the extent required to avoid adverse
financial accounting consequences to the Company, the
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value of the shares so withheld or tendered may not exceed the
employers minimum required tax withholding rate.
SECTION 13.
ASSIGNABILITY
No Award or interest in an Award may be sold, assigned, pledged
(as collateral for a loan or as security for the performance of
an obligation or for any other purpose) or transferred by a
Participant or made subject to attachment or similar proceedings
otherwise than by will or by the applicable laws of descent and
distribution, except to the extent permitted by the Company, the
Participant may designate one or more beneficiaries on a
Company-approved form who may exercise the Award or receive
payment under the Award after the Participants death.
During a Participants lifetime, an Award may be exercised
only by the Participant. Notwithstanding the foregoing and to
the extent permitted by Section 422 of the Code, the
Committee, in its sole discretion, may permit a Participant to
assign or transfer an Award subject to such terms and conditions
as the Committee shall specify.
SECTION 14.
ADJUSTMENTS
14.1 Adjustment
of Shares
In the event, at any time or from time to time, a stock
dividend, stock split, spin-off, combination or exchange of
shares, recapitalization, merger, consolidation, distribution to
stockholders other than a normal cash dividend, or other change
in the Companys corporate or capital structure results in
(a) the outstanding shares of Common Stock, or any
securities exchanged therefor or received in their place, being
exchanged for a different number or kind of securities of the
Company or (b) new, different or additional securities of
the Company or any other company being received by the holders
of shares of Common Stock, then the Committee shall make
proportional adjustments in (i) the maximum number and kind
of securities available for issuance under the Plan;
(ii) the maximum number and kind of securities issuable as
Incentive Stock Options as set forth in Section 4.2;
(iii) the maximum number and kind of securities set forth
in Section 15.4; and (iv) the number and kind of
securities that are subject to any outstanding Award and the per
share price of such securities, without any change in the
aggregate price to be paid therefor. The determination by the
Committee, as to the terms of any of the foregoing adjustments,
shall be conclusive and binding.
Notwithstanding the foregoing, the issuance by the Company of
shares of stock of any class, or securities convertible into
shares of stock of any class, for cash or property, or for labor
or services rendered, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to,
outstanding Awards. Also notwithstanding the foregoing, a Change
of Control shall not be governed by this Section 14.1 but
shall be governed by Section 14.2.
14.2 Change
of Control
Notwithstanding any other provision of the Plan to the contrary,
unless the Committee shall determine otherwise in the instrument
evidencing the Award or in a written employment, services or
other agreement between the Participant and the Company or a
Related Company, in the event of a Change of Control:
(a) All outstanding Awards, other than Awards identified in
Section 14.2(b), shall become fully and immediately vested
and exercisable, and all applicable deferral and restriction
limitations or forfeiture provisions shall lapse, immediately
prior to the Change of Control and shall terminate at the
effective time of the Change of Control, and any such Awards
constituting deferred compensation within the
meaning of Section 409A shall be paid within 60 days
following the effective date of the Change of Control; provided,
however, that with respect to a Change of Control that is a
Business Combination, such Awards, other than Awards
constituting deferred compensation within the
meaning of Section 409A, shall become fully and immediately
vested and exercisable, and all applicable deferral and
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restriction limitations or forfeiture provisions shall lapse,
only if and to the extent such Awards are not converted, assumed
or replaced by the Successor Company.
For the purposes of this Section 14.2(a), an Award shall be
considered converted, assumed or replaced by the Successor
Company if following the Business Combination the option or
right confers the right to purchase or receive, for each share
of Common Stock subject to the Award immediately prior to the
Business Combination, the consideration (whether stock, cash or
other securities or property) received in the Business
Combination by holders of Common Stock for each share held on
the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares);
provided, however, that if such consideration received in the
Business Combination is not solely common stock of the Successor
Company, the Committee may, with the consent of the Successor
Company, provide for the consideration to be received upon the
exercise of the Option, for each share of Common Stock subject
thereto, to be solely common stock of the Successor Company
substantially equal in fair market value to the per share
consideration received by holders of Common Stock in the
Business Combination. The determination of such substantial
equality of value of consideration shall be made by the
Committee, and its determination shall be conclusive and binding.
(b) The target payout opportunities attainable under all
outstanding Stock Awards and Stock Units with restrictions based
on performance criteria, Performance Shares, and Performance
Units shall be deemed to have been fully earned based on
targeted performance being attained as of the effective date of
the Change of Control, and such Awards shall be paid within
60 days following the effective date of the Change of
Control.
(c) Notwithstanding the foregoing, the Committee, in its
sole discretion, may instead provide in the event of a Change of
Control that is a Business Combination that a Participants
outstanding Awards shall terminate upon or immediately prior to
such Business Combination and that such Participant shall
receive, in exchange therefor, a cash payment equal to the
amount (if any) by which (x) the value of the per share
consideration received by holders of Common Stock in the
Business Combination, or, in the event the Business Combination
does not result in direct receipt of consideration by holders of
Common Stock, the value of the deemed per share consideration
received, in each case as determined by the Committee in its
sole discretion, multiplied by the number of shares of Common
Stock subject to such outstanding Awards (to the extent then
vested and exercisable or whether or not then vested and
exercisable, as determined by the Committee in its sole
discretion) exceeds (y) if applicable, the respective
aggregate exercise price or grant price for such Awards.
14.3 Further
Adjustment of Awards
Subject to Section 14.2, the Committee shall have the
discretion, exercisable at any time before a sale, merger,
consolidation, reorganization, liquidation, dissolution or
change of control of the Company, as defined by the Committee,
to take such further action as it determines to be necessary or
advisable with respect to Awards. Such authorized action may
include (but shall not be limited to) establishing, amending or
waiving the type, terms, conditions or duration of, or
restrictions on, Awards so as to provide for earlier, later,
extended or additional time for exercise, lifting restrictions
and other modifications, and the Committee may take such actions
with respect to all Participants, to certain categories of
Participants or only to individual Participants. The Committee
may take such action before or after granting Awards to which
the action relates and before or after any public announcement
with respect to such sale, merger, consolidation,
reorganization, liquidation, dissolution or change of control
that is the reason for such action.
14.4 No
Limitations
The grant of Awards shall in no way affect the Companys
right to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its
business or assets.
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14.5 Fractional
Shares
In the event of any adjustment in the number of shares covered
by any Award, each such Award shall cover only the number of
full shares resulting from such adjustment.
14.6 Section 409A
Notwithstanding anything in this Plan to the contrary,
(a) any adjustments made pursuant to this Section 14
to Awards that are considered deferred compensation
within the meaning of Section 409A shall be made in
compliance with the requirements of Section 409A and
(b) any adjustments made pursuant to this Section 14
to Awards that are not considered deferred
compensation subject to Section 409A shall be made in
such a manner as to ensure that after such adjustment the Awards
either (i) continue not to be subject to Section 409A
or (ii) comply with the requirements of Section 409A.
SECTION 15.
SECTION 162(m) PROVISIONS
15.1 Terms
of Section 162(m) Awards Generally
Notwithstanding any other provision of the Plan, the
Compensation Committee may, at the time of grant of an Award
(other than an Option or Stock Appreciation Right) to a
Participant who is then a Covered Employee or is likely to be a
Covered Employee as of the end of the tax year in which the
Company would claim a tax deduction in connection with such
Award, specify that all or any portion of such Award is intended
to satisfy the requirements for performance-based compensation
under Section 162(m). With respect to each such Award,
subject to Section 15.2, the Compensation Committee shall
establish, in writing, that the vesting
and/or
payment pursuant to the Award shall be conditioned on the
attainment for the specified Performance Period of specified
performance targets related to designated performance goals for
such period selected by the Compensation Committee from among
the Performance Criteria specified in Section 15.2. Such
performance goals shall be set by the Compensation Committee
within the time period prescribed by, and shall otherwise comply
with the requirements of, Section 162(m), or any successor
provision thereto, and the regulations thereunder.
15.2 Performance
Criteria
If an Award is subject to this Section 15, then the lapsing
of restrictions thereon and the distribution of cash, shares of
Common Stock or other property pursuant thereto, as applicable,
shall be subject to the achievement of one or more objective
performance goals established by the Committee, which shall be
based on the attainment of specified levels of one of or any
combination of the following performance criteria
for the Company as a whole or any business unit of the Company,
as reported or calculated by the Company: net earnings or net
income (before or after taxes); earnings per share (basic or
fully diluted); net sales growth or bookings growth; revenues;
operating profit or income (including or excluding depreciation,
amortization, extraordinary items, restructuring charges or
other expenses); return measures (including, but not limited to,
return on assets, capital, net capital utilized, equity or
sales); working capital; cash flow (including, but not limited
to, operating cash flow, free cash flow or cash flow return on
capital); earnings before or after taxes, interest, depreciation
and/or
amortization; gross or operating profit; cost control; strategic
initiatives; market share; improvements in capital structure;
productivity ratios; share price (including, but not limited to,
growth measures and total stockholder return); expense targets;
margins; operating efficiency or margins; capital efficiency;
strategic targets; economic profit; employee or customer
satisfaction, services performance, subscriber, cash management
or asset management metrics; working capital targets; cash value
added (CVA); or market or economic value added
(EVA) (together, the Performance
Criteria).
Such performance goals also may be based on the achievement of
specified levels of Company performance (or performance of an
applicable affiliate or business unit of the Company) under one
or more of the Performance Criteria described above relative to
the performance of other corporations. The Compensation
Committee may provide in any such Award that any evaluation of
performance may include or exclude any of the following events
that occurs during a Performance Period: (a) asset
write-downs, (b) litigation or claim judgments or
settlements, (c) the effect of changes in tax laws,
accounting principles, or other laws or
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provisions affecting reported results, (d) any
reorganization and restructuring programs,
(e) extraordinary nonrecurring items as described in
Accounting Principles Board Opinion No. 30
and/or in
Managements Discussion and Analysis of Financial Condition
and Results of Operations appearing in the Companys annual
report to stockholders for the applicable year,
(f) acquisitions or divestitures, (g) foreign exchange
gains and losses, and (h) gains and losses on asset sales.
To the extent such inclusions or exclusions affect Awards to
Covered Employees, they shall be prescribed in a form that
satisfies the requirements for performance-based
compensation within the meaning of Section 162(m), or
any successor provision thereto.
15.3 Compensation
Committee Certification and Authority
After the completion of each Performance Period, the
Compensation Committee shall certify the extent to which any
Performance Criteria has been satisfied, and the amount payable
as a result thereof, prior to payment, settlement or vesting of
any Award subject to this Section 15. Notwithstanding any
provision of the Plan other than Section 14, with respect
to any Award that is subject to this Section 15, the
Compensation Committee may adjust downward, but not upward, the
amount payable pursuant to such Award, and the Compensation
Committee may not waive the achievement of the applicable
performance goals except in the case of the death or Disability
of the Covered Employee.
The Compensation Committee shall have the power to impose such
other restrictions on Awards subject to this Section 15 as
it may deem necessary or appropriate to ensure that such Awards
satisfy all requirements for performance-based
compensation with the meaning of Section 162(m).
15.4 Maximum
Awards
Subject to adjustment from time to time as provided in
Section 14.1, no Covered Employee may be granted Awards
other than Performance Units subject to this Section 15 in
any thirty-six month period with respect to more than
2,250,000 shares of Common Stock for such Award, and the
maximum dollar value payable with respect to Performance Units
or other awards payable in cash subject to this Section 15
granted to any Covered Employee in any one calendar year is
$5,000,000.
The Committee shall have the power to impose such other
restrictions on Awards subject to this Section 15 as it may
deem necessary or appropriate to ensure that such Awards satisfy
all requirements for performance-based compensation
within the meaning of Section 162(m), or any successor
provision thereto.
SECTION 16.
AMENDMENT AND TERMINATION
16.1 Amendment,
Suspension or Termination
The Board or the Compensation Committee may amend, suspend or
terminate the Plan or any portion of the Plan at any time and in
such respects as it shall deem advisable; provided, however,
that, to the extent required by applicable law, regulation or
stock exchange rule, stockholder approval shall be required for
any amendment to the Plan; and provided, further, that any
amendment that requires stockholder approval may be made only by
the Board. Subject to Section 16.3, the Committee may amend
the terms of any outstanding Award, prospectively or
retroactively.
16.2 Term
of the Plan
Unless sooner terminated as provided herein, the Plan shall
terminate ten years from the Effective Date. After the Plan is
terminated, no future Awards may be granted, but Awards
previously granted shall remain outstanding in accordance with
their applicable terms and conditions and the Plans terms
and conditions. Notwithstanding the foregoing, no Incentive
Stock Options may be granted more than ten years after the
earlier of (a) adoption of the Plan by the Board and
(b) the Effective Date.
16.3 Consent
of Participant
The amendment, suspension or termination of the Plan or a
portion thereof or the amendment of an outstanding Award shall
not, without the Participants consent, materially
adversely affect any rights under any
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Award theretofore granted to the Participant under the Plan. Any
change or adjustment to an outstanding Incentive Stock Option
shall not, without the consent of the Participant, be made in a
manner so as to constitute a modification that would
cause such Incentive Stock Option to fail to continue to qualify
as an Incentive Stock Option. Notwithstanding the foregoing, any
adjustments made pursuant to Section 14 shall not be
subject to these restrictions.
SECTION 17.
GENERAL
17.1 No
Individual Rights
No individual or Participant shall have any claim to be granted
any Award under the Plan, and the Company has no obligation for
uniformity of treatment of Participants under the Plan.
Furthermore, nothing in the Plan or any Award granted under the
Plan shall be deemed to constitute an employment contract or
confer or be deemed to confer on any Participant any right to
continue in the employ of, or to continue any other relationship
with, the Company or any Related Company or limit in any way the
right of the Company or any Related Company to terminate a
Participants employment or other relationship at any time,
with or without cause.
17.2 Issuance
of Shares
Notwithstanding any other provision of the Plan, the Company
shall have no obligation to issue or deliver any shares of
Common Stock under the Plan or make any other distribution of
benefits under the Plan unless, in the opinion of the
Companys counsel, such issuance, delivery or distribution
would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act or the laws
of any state or foreign jurisdiction) and the applicable
requirements of any securities exchange or similar entity.
The Company shall be under no obligation to any Participant to
register for offering or resale or to qualify for exemption
under the Securities Act, or to register or qualify under the
laws of any state or foreign jurisdiction, any shares of Common
Stock, security or interest in a security paid or issued under,
or created by, the Plan, or to continue in effect any such
registrations or qualifications if made.
To the extent the Plan or any instrument evidencing an Award
provides for issuance of stock certificates to reflect the
issuance of shares of Common Stock, the issuance may be effected
on a noncertificated basis, to the extent not prohibited by
applicable law or the applicable rules of any stock exchange.
17.3 Indemnification
Each person who is or shall have been a member of the Board, or
a committee appointed by the Board, or an officer of the Company
to whom authority was delegated in accordance with
Section 3 of the Plan, shall be indemnified and held
harmless by the Company against and from any loss, cost,
liability or expense that may be imposed upon or reasonably
incurred by such person in connection with or resulting from any
claim, action, suit or proceeding to which such person may be a
party or in which such person may be involved by reason of any
action taken or failure to act under the Plan and against and
from any and all amounts paid by such person in settlement
thereof, with the Companys approval, or paid by such
person in satisfaction of any judgment in any such claim,
action, suit or proceeding against such person; provided,
however, that such person shall give the Company an opportunity,
at its own expense, to handle and defend the same before such
person undertakes to handle and defend it on such persons
own behalf, unless such loss, cost, liability or expense is a
result of such persons own willful misconduct or except as
expressly provided by statute.
The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such person may be
entitled under the Companys Certificate of Incorporation
or Bylaws, as a matter of law, or otherwise, or of any power
that the Company may have to indemnify or hold harmless.
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17.4 No
Rights as a Stockholder
Unless otherwise provided by the Committee or in the instrument
evidencing the Award or in a written employment, services or
other agreement, no Award, other than a Stock Award, shall
entitle the Participant to any cash dividend, voting or other
right of a stockholder unless and until the date of issuance
under the Plan of the shares that are the subject of such Award.
17.5 Compliance
with Laws and Regulations
(a) In interpreting and applying the provisions of the
Plan, any Option granted as an Incentive Stock Option pursuant
to the Plan shall, to the extent permitted by law, be construed
as an incentive stock option within the meaning of
Section 422 of the Code, although the Company makes no
representations that Options granted as Incentive Stock Options
will maintain such qualification.
(b) Notwithstanding anything contained in the Plan to the
contrary, the Company intends that any and all Awards and
compensation payable under the Plan shall satisfy the
requirements for exemption from, or compliance with,
Section 409A and that all terms and provisions shall be
interpreted to satisfy such requirements. If the Committee
determines that an Award, payment, distribution, deferral
election, transaction or any other action or arrangement
contemplated by the provisions of the Plan would, if undertaken,
cause a Participant to become subject to Section 409A, the
Committee, to the extent it deems necessary or advisable in its
sole discretion, reserves the right, but shall not be required,
to unilaterally amend or modify the Plan and any Award granted
under the Plan so that the Award qualifies for exemption from,
or compliance with, Section 409A. Awards not deferred under
Section 6.3 and not otherwise exempt from the requirements
of Section 409A are intended to qualify for the short-term
deferral exemption to Section 409A, and payment shall be
made as soon as administratively feasible after the Award became
vested, but in no event shall such payment be made later than
21/2
months after the end of the calendar year in which the Award
becomes vested unless otherwise permitted under the exemption
provisions of Section 409A.
Furthermore, any payment or distribution that is to be made
under the Plan (or pursuant to an Award under the Plan) to a
Participant who is a specified employee of the
Company within the meaning of that term under Section 409A
and as determined by the Committee, on account of a
separation from service within the meaning of that
term under Section 409A, may not be made before the date
which is six months after the date of such separation from
service, unless the payment or distribution is exempt from
the application of Section 409A of the Code by reason of
the short-term deferral exemption or otherwise.
Notwithstanding any other provision in the Plan, the Committee
makes no representations that Awards granted under the Plan
shall be exempt from, or comply with, Section 409A and
makes no undertaking to preclude Section 409A from applying
to Awards granted under the Plan.
17.6 Participants
in Other Countries or Jurisdictions
Without amending the Plan, the Committee shall have the
authority to adopt, amend or rescind such modifications,
procedures or subplans under the Plan as may be necessary or
desirable to comply with provisions of the laws or regulations
of other countries or jurisdictions in which the Company or any
Related Company may operate or where Participants may reside.
17.7 No
Trust or Fund
The Plan is intended to constitute an unfunded plan.
Nothing contained herein shall require the Company to segregate
any monies or other property, or shares of Common Stock, or to
create any trusts, or to make any special deposits for any
immediate or deferred amounts payable to any Participant, and no
Participant shall have any rights that are greater than those of
a general unsecured creditor of the Company.
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17.8 Successors
All obligations of the Company under the Plan with respect to
Awards shall be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all
or substantially all the business
and/or
assets of the Company.
17.9 Severability
If any provision of the Plan or any Award is determined to be
invalid, illegal or unenforceable in any jurisdiction, or as to
any person, or would disqualify the Plan or any Award under any
law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable laws, or,
if it cannot be so construed or deemed amended without, in the
Committees determination, materially altering the intent
of the Plan or the Award, such provision shall be stricken as to
such jurisdiction, person or Award, and the remainder of the
Plan and any such Award shall remain in full force and effect.
17.10 Choice
of Law and Venue
The Plan, all Awards granted thereunder and all determinations
made and actions taken pursuant hereto, to the extent not
otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Washington without giving
effect to principles of conflicts of law. Participants
irrevocably consent to the nonexclusive jurisdiction and venue
of the state and federal courts located in the State of
Washington.
SECTION 18.
EFFECTIVE DATE
The effective date (the Effective
Date) is the date on which the Plan is approved by
the stockholders of the Company. If the stockholders of the
Company do not approve the Plan within 12 months after the
Boards adoption of the Plan, any Incentive Stock Options
granted under the Plan will be treated as Nonqualified Stock
Options.
B-14
Appendix A
to 2008 Omnibus Incentive Plan
Definitions
As used in the Plan,
Acquired Entity means any entity
acquired by the Company or a Related Company or with which the
Company or a Related Company merges or combines.
Award means any Option, Stock
Appreciation Right, Stock Award, Restricted Stock, Stock Unit,
Performance Share, Performance Unit, dividend equivalent,
cash-based award or other incentive payable in cash or in shares
of Common Stock as may be designated by the Committee from time
to time.
Board means the Board of Directors of
the Company.
Business Combination has the meaning
set forth in the definition of Change of Control.
Cause, unless otherwise defined in the
instrument evidencing an Award or in a written employment,
services or other agreement between the Participant and the
Company or a Related Company, means dishonesty, fraud, serious
or willful misconduct, unauthorized use or disclosure of
confidential information or trade secrets, or conduct prohibited
by law (except minor violations), in each case as determined by
the Companys chief human resources officer or other person
performing that function or, in the case of directors and
executive officers, the Compensation Committee, whose
determination shall be conclusive and binding.
Change of Control, unless the
Committee determines otherwise with respect to an Award at the
time the Award is granted or unless otherwise defined for
purposes of an Award in a written employment, services or other
agreement between the Participant and the Company or a Related
Company, means the occurrence of any of the following events:
(a) an acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a Person) of beneficial
ownership (within the meaning of
Rule 13d-3
promulgated under the Exchange Act) of 30% or more of either
(i) the then outstanding shares of Common Stock (the
Outstanding Company Common Stock) or
(ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in
the election of directors (the Outstanding Company
Voting Securities); excluding, however, the
following: (1) any acquisition directly from the Company,
other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was
itself acquired directly from the Company, (2) any
acquisition by the Company, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any entity controlled by the Company, or
(4) any acquisition pursuant to a transaction which
complies with clauses (i), (ii) and (iii) set forth in
subsection (c) of this definition of Change of
Control;
(b) Individuals who, as of the Effective Date, constitute
the Board (the Incumbent Board) cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual who becomes a member of
the Board subsequent to the Effective Date, whose election, or
nomination for election by the Companys stockholders, was
approved by a vote of at least a majority of directors then
comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board; but,
provided further, that any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest (as such terms are used in
Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board shall not be
considered a member of the Incumbent Board; or
(c) The consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a
Business Combination); excluding,
however, such a Business Combination pursuant to which
(i) all or substantially all of the individuals and
entities who are the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Company Transaction will
beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the
B-15
combined voting power of the outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which
as a result of such transaction owns the Company or all or
substantially all of the Companys assets either directly
or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be;
(ii) no Person (other than any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
entity controlled by the Company or such corporation resulting
from such Business Combination) will beneficially own, directly
or indirectly, 30% or more of, respectively, the outstanding
shares of the corporation resulting from such Business
Combination or the combined voting power of the outstanding
voting securities of such corporation entitled to vote generally
in the election of directors except to the extent that such
ownership existed with respect to the Company prior to the
Business Combination; and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination will have been members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action
of the Board, providing for such Business Combination; or
(d) The consummation of a complete liquidation or
dissolution of the Company.
Where a series of transactions undertaken with a common purpose
is deemed to be a Business Combination, the date of such
Business Combination shall be the date on which the last of such
transactions is consummated. Notwithstanding the foregoing, with
respect to any Award or Awards constituting deferred
compensation within the meaning of Section 409A, an
event otherwise constituting a Change of Control (as defined
above) shall not constitute a Change of Control for purposes of
payment of an Award unless such event is also a change in
control event within the meaning of Section 409A.
Code means the U.S. Internal
Revenue Code of 1986, as amended from time to time.
Committee has the meaning set forth in
Section 3.2.
Common Stock means the common stock,
par value $.01 per share, of the Company.
Company means Intermec, Inc., a
Delaware corporation.
Compensation Committee means the
Compensation Committee of the Board.
Covered Employee means a covered
employee as that term is defined for purposes of
Section 162(m)(3) of the Code or any successor provision.
Disability, unless otherwise defined
by the Committee for purposes of the Plan in the instrument
evidencing an Award or in a written employment, services or
other agreement between the Participant and the Company or a
Related Company, means permanent and total disability as
determined for purposes of the Companys Long-Term
Disability Plan or such other plan under which the Participant
is covered. Notwithstanding the foregoing, with respect to
Incentive Stock Options, Disability shall have the
meaning attributed to that term for purposes of Section 422
of the Code.
Early Retirement, unless otherwise
defined in the instrument evidencing the Award or in a written
employment, services or other agreement between the Participant
and the Company or a Related Company, means retirement from
employment with the Company or a Related Company in
circumstances in which the employee would be entitled to receive
such retirement benefits under the pension plan of the Company
or a Related Company under which such employee is covered, as
applicable.
Effective Date has the meaning set
forth in Section 18.
Eligible Person means any person
eligible to receive an Award as set forth in Section 5.
B-16
Exchange Act means the
U.S. Securities Exchange Act of 1934, as amended from time
to time.
Fair Market Value means the closing
price for the Common Stock on any given date during regular
session trading on the New York Stock Exchange, or if not
trading on that date, such price on the last preceding date on
which the Common Stock was traded, unless determined otherwise
by the Committee using such methods or procedures as it may
establish. In the absence of an established market for the
Common Stock, Fair Market Value shall be determined in good
faith by the Committee. Notwithstanding the preceding, for
federal, state, and local income tax withholding and reporting
purposes and for such other purposes as the Committee deems
appropriate, Fair Market Value shall be determined by the
Committee in accordance with uniform and nondiscriminatory
standards adopted by it from time to time.
Grant Date means the later of
(a) the date on which the Committee completes the corporate
action authorizing the grant of an Award or such later date
specified by the Committee and (b) the date on which all
conditions precedent to an Award have been satisfied, provided
that conditions to the exercisability or vesting of Awards shall
not defer the Grant Date.
Incentive Stock Option means an Option
granted with the intention that it qualify as an incentive
stock option as that term is defined for purposes of
Section 422 of the Code or any successor provision.
Incumbent Board has the meaning set
forth in Change of Control.
Nonqualified Stock Option means an
Option other than an Incentive Stock Option.
Normal Retirement, unless otherwise
defined in the instrument evidencing the Award or in a written
employment, services or other agreement between the Participant
and the Company or a Related Company, means retirement from
active employment with the Company or a Related Company in
circumstances in which the employee would be entitled to receive
such retirement benefits under the retirement or pension plan of
the Company or a Related Company under which such employee is
covered, as applicable.
Option means a right to purchase
Common Stock granted under Section 7.
Option Expiration Date means the last
day of the maximum term of an Option.
Parent Company means a company or
other entity which as a result of a Change of Control owns the
Company or all or substantially all of the Companys assets
either directly or through one or more subsidiaries.
Participant means any Eligible Person
to whom an Award is granted.
Performance Award means an Award of
Performance Shares or Performance Units granted under
Section 10.
Performance Criteria has the meaning
set forth in Section 15.2.
Performance Period means the period of
time during which the Performance Criteria must be met in order
to determine the degree of payout
and/or
vesting with respect to an Award. The Compensation Committee may
establish different Performance Periods for different
Participants, and the Compensation Committee may establish
concurrent or overlapping Performance Periods.
Performance Share means an Award of
units denominated in shares of Common Stock granted under
Section 10.1.
Performance Unit means an Award of
units denominated in cash or property other than shares of
Common Stock granted under Section 10.2.
Plan means the Intermec, Inc. 2008
Omnibus Incentive Plan.
Related Company means any corporation
in which the Company owns, directly or indirectly, at least 50%
of the total combined voting power of all classes of stock, or
any other entity (including, but not limited to, partnerships
and joint ventures) in which the Company owns, directly or
indirectly, at least 50% of the combined equity thereof.
Notwithstanding the foregoing, for purposes of determining
whether any individual
B-17
may be a Participant for purposes of any grant of Incentive
Stock Options, the term Related Company shall have
the meaning ascribed to the term subsidiary in
Section 424(f) of the Code, and for purposes of determining
whether any individual may be a Participant for purposes of any
grant of Options or Stock Appreciation Rights, the term
Related Company shall mean any Service
Recipient as that term is defined for purposes of
Section 409A.
Restricted Stock means an Award of
shares of Common Stock granted under Section 9, the rights
of ownership of which are subject to restrictions prescribed by
the Committee.
Retirement, unless otherwise defined
in the instrument evidencing the Award or in a written
employment, services or other agreement between the Participant
and the Company or a Related Company, means Normal or Early
Retirement.
Section 162(m) means
Section 162(m) of the Code, including any proposed and
final regulations and other guidance issued thereunder by the
Department of the Treasury
and/or the
Internal Revenue Service.
Section 409A means
Section 409A of the Code, including any proposed and final
regulations and other guidance issued thereunder by the
Department of the Treasury
and/or the
Internal Revenue Service.
Securities Act means the
U.S. Securities Act of 1933, as amended from time to time.
Stock Appreciation Right or
SAR means a right granted under
Section 8.1 to receive the excess of the Fair Market Value
of a specified number of shares of Common Stock over the grant
price.
Stock Award means an Award of shares
of Common Stock granted under Section 9, the rights of
ownership of which are not subject to restrictions prescribed by
the Committee.
Stock Unit means an Award denominated
in units of Common Stock granted under Section 9.
Substitute Awards means Awards granted
or shares of Common Stock issued by the Company in assumption
of, or in substitution or exchange for, awards previously
granted by an Acquired Entity.
Successor Company means the surviving
company, the successor company or Parent Company, as applicable,
in connection with a Change of Control.
Termination of Service, unless
otherwise defined in the instrument evidencing the Award or in a
written employment, services or other agreement between the
Participant and the Company or a Related Company, means a
termination of employment or service relationship with the
Company or a Related Company for any reason, whether voluntary
or involuntary, including by reason of death, Disability, Early
Retirement, Normal Retirement or for Cause. Any question as to
whether and when there has been a Termination of Service for the
purposes of an Award and the cause of such Termination of
Service shall be determined by the Companys chief human
resources officer or other person performing that function or,
with respect to directors and executive officers subject to the
reporting requirements of Section 16(a) of the Exchange
Act, by the Compensation Committee, whose determination shall be
conclusive and binding. Transfer of a Participants
employment or service relationship between the Company and any
Related Company shall not be considered a Termination of Service
for purposes of an Award. Unless the Compensation Committee
determines otherwise, a Termination of Service shall be deemed
to occur if the Participants employment or service
relationship is with an entity that has ceased to be a Related
Company. A Participants change in status from an employee
of the Company or a Related Company to a non-employee director,
consultant, advisor, or independent contractor of the Company or
a Related Company, or a change in status from a non-employee
director, consultant, advisor or independent contractor of the
Company or a Related Company to an employee of the Company or a
Related Company, shall not be considered a Termination of
Service.
Vesting Commencement Date means the
Grant Date or such other date selected by the Committee as the
date from which an Award begins to vest.
B-18
Intermec,
Inc.
2008 Annual Meeting of Stockholders
May 23, 2008, 10:00 a.m. Pacific time
6001
36th Avenue West
Everett, Washington 98203
Directions
and Parking
From the
North or South on I-5:
Take exit #189 Mukilteo/Whidbey Island Ferry
onto Hwy. 526. Take the Seaway Boulevard exit and follow it to
the end (approximately 1.25 miles). At the end of Seaway
Boulevard, turn right onto 36th Avenue West, which ends at
the Intermec headquarters building.
From Hwy
99:
Turn West onto Hwy. 526. Take the Seaway Boulevard exit and
follow it to the end (approximately 1.25 miles). At the end
of Seaway Boulevard, turn right onto 36th Avenue West,
which ends at the Intermec headquarters building.
Visitor parking is available in front of the circular drive.
Please enter the building through the front doors, behind the
circular drive.
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Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Intermec, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FORnumber(s) of the nominee(s) on the line below. ITEMS 1, 2, 3 AND 4.
Vote on Directors
1.ELECTION OF DIRECTORS
Nominees:
01) Patrick J. Byrne05) Stephen P. Reynolds 02) Gregory K. Hinckley 06) Steven B. Sample 03) Lydia H. Kennard07) Greg G. Shaffer 04) Allen J. Lauer08) Larry D. Yost
For Against Abstain Vote on Proposals
2.RATIFY SELECTION OF DELOITTE & TOUCHE LLP AS INTERMEC, INC.s INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2008.
3.APPROVE THE INTERMEC, INC. 2008 EMPLOYEE STOCK PURCHASE PLAN.
4.APPROVE THE INTERMEC, INC. 2008 OMNIBUS INCENTIVE PLAN.
The shares represented by this proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder(s). If no direction is made, this proxy will be voted FOR items 1, 2, 3 and 4. If any other matters properly come before the meeting, or if cumulative voting is required, the persons named in this proxy will vote in their discretion.
For address changes and/or comments, please check this box and write them on the back where indicated.
Please indicate if you plan to attend this meeting.
Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or
Yes No guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer.
Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)Date |
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting:
The Annual Report, Notice of Annual Meeting and Proxy Statement are available at www.proxyvote.com. |
INTERMEC, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
MAY 23, 2008
The undersigned stockholder(s) hereby appoint(s) Patrick J. Byrne, Lanny H. Michael and Janis L. Harwell, and each of them with power to act without the other and with power of substitution, as proxies, and hereby authorizes them to represent and to vote, as designated on the reverse side of this proxy card, all of the shares of Common Stock of Intermec, Inc. that the stockholder(s) is/are entitled to vote at the 2008 Annual Meeting of Stockholders to be held at 10:00 A.M., Pacific Time on Friday, May&
nbsp;23, 2008, at the headquarters offices of Intermec, Inc., located at 6001 36th Avenue West, Everett, Washington, and any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the 2008 Annual Meeting of Stockholders.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS AND FOR EACH PROPOSAL.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE.
Address Changes/Comments: |
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE |