CRAWFORD & COMPANY
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14A-101)
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant þ
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Preliminary Proxy Statement |
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Crawford & Company
(Name of Registrant as Specified In Its Charter)
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March 28, 2007
Dear Shareholder:
You are cordially invited to attend the Companys 2007
Annual Meeting of Shareholders which will be held on Thursday,
May 3, 2007, beginning at 2:00 p.m. at the
Companys headquarters, 5620 Glenridge Drive, N.E.,
Atlanta, Georgia, 30342.
The official Notice of Annual Meeting of Shareholders, Proxy
Statement and form of Proxy are included with this letter and
contain information about the meeting and the various matters on
which the shareholders will act.
As is our custom, a brief report will be made at this meeting on
the Companys 2006 activities and the outlook for 2007. We
hope you will be able to attend the meeting. Whether or not you
plan to attend, it is important that you sign and return your
Proxy promptly, as your vote is important to the Company.
On behalf of our Board of Directors, officers, and employees, we
wish to thank you for your continued interest in and support of
Crawford & Company.
Sincerely,
Thomas W. Crawford,
President and Chief Executive Officer
TABLE OF CONTENTS
Crawford &
Company
P.O. Box 5047
Atlanta, Georgia 30302
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
May 3, 2007
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
of Crawford & Company (the Company) will be
held in the Home Office Building of the Company, 5620 Glenridge
Drive, N.E., Atlanta, Georgia, 30342, on Thursday, May 3,
2007, at 2:00 p.m. local time, for the following purposes:
1. To elect nine (9) Directors to serve until the next
Annual Meeting of Shareholders or until their successors are
elected and qualified;
2. To consider and vote on a Company proposal adopting the
2007 Non-Employee Director Stock Option Plan.
3. To consider and vote on a Company proposal adopting the
Management Team Incentive Compensation Plan.
4. To ratify the appointment of Ernst & Young LLP
as independent auditors for the Company for the 2007 fiscal year;
5. To consider and vote on a shareholder proposal entitled
the Maximize Value Resolution, and
6. To transact any and all other such business as may
properly come before the meeting or any adjournment or
postponement thereof.
Information relating to the above matters is set forth in the
accompanying Proxy Statement dated March 28, 2007. Only
shareholders of record of Class B Common Stock of the
Company as of the close of business on March 6, 2007 will
be entitled to vote at the meeting and any adjournment or
postponement thereof.
By Order of The Board of Directors,
Allen W. Nelson,
Secretary
Atlanta, Georgia
March 28, 2007
It is important that your shares of Class B Common Stock
be represented at the Meeting whether or not you are personally
able to be present. Accordingly, if you do not plan to attend
the Meeting, please complete and sign the enclosed Proxy and
return it in the accompanying postage prepaid envelope.
This Proxy is solicited by the Board of Directors. Proxies
are not being solicited with respect to the shares of
Class A Common Stock of the Company.
Crawford &
Company
P.O. Box 5047
Atlanta, Georgia 30302
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
To be
Held on May 3, 2007
You are receiving this Proxy Statement and the accompanying
Proxy Card (Proxy) from us because you own shares of
common stock in Crawford & Company (the
Company). Only shareholders of Class B Common
Stock of the Company are entitled to vote. The Proxy Statement
describes the proposals on which we would like you to vote. It
also gives you information so that you can make an informed
voting decision. We first mailed this Proxy Statement and the
form of Proxy to shareholders on or about March 28, 2007.
The Annual Report of the Company for the fiscal year ended
December 31, 2006 is also enclosed herewith.
VOTING AT
THE ANNUAL MEETING
Date,
Time and Place of the Annual Meeting
The Annual Meeting of Shareholders, and any adjournment or
postponement thereof, will be held in the Home Office Building
of the Company, located at 5620 Glenridge Drive, N.E., Atlanta,
Georgia, on Thursday, May 3, 2007 at 2:00 p.m., local
time.
Who May
Vote
Only shareholders of record of Class B Common Stock of the
Company as of the close of business on March 6, 2007 (the
Record Date) will be entitled to vote at the Annual
Meeting. As of that date, the Company had outstanding
24,697,172 shares of Class B Common Stock, each share
being entitled to one vote.
Additionally, for information only, this Proxy Statement is
being mailed to shareholders of Class A Common Stock of the
Company as of the Record Date. Shares of Class A Common
Stock are not entitled to vote at the Annual Meeting of
Shareholders. Accordingly, no Proxy is being requested and no
Proxy should be sent with respect to such shares.
Quorum
for the Annual Meeting and Votes Required
A majority of the issued and outstanding shares of Class B
Common Stock entitled to vote at the Annual Meeting will
constitute a quorum for the transaction of business at such
meeting. Proxies voted to withhold authority, abstentions and
broker non-votes will be treated as present for purposes of
determining the presence of a quorum.
Each share of Class B Common Stock is entitled to cast an
affirmative vote for up to nine (9) Director nominees.
Cumulative voting is not permitted. The nine nominees for
Director who receive the highest number of votes cast, in person
or by Proxy, at the Annual Meeting will be elected Directors.
Votes withheld, abstentions, and broker non-votes, will have no
effect on the outcome of the election of Directors.
The vote required under Georgia law for the proposal to approve
the 2007 Non-Employee Director Stock Option Plan is a majority
of the shares of Class B Common Stock present in person or
represented by Proxy. For this purpose, abstentions are neither
counted as votes cast for or against this proposal. In addition,
to satisfy the New York Stock Exchange (NYSE)
listing standards, the proposal must also receive the
affirmative vote of a majority of the votes cast on this
proposal provided that the total number of votes cast on this
matter represents greater than 50% of the Companys
outstanding shares entitled to vote. For purposes of the NYSE
listing standard, abstentions are counted as votes cast on this
proposal and, as a result have the same effect as a vote against
the
proposal. The vote required for the approval of the Management
Team Incentive Compensation Plan, the ratification of the
appointment of Ernst & Young LLP as the Companys
independent auditors for the year 2007 and to pass the
shareholder proposal entitled the Maximize Value
Resolution, is, respectively, a majority of the shares of
Class B Common Stock present in person or represented by
Proxy.
How to
Vote
You may attend the Annual Meeting and vote your shares in
person, or you may choose to submit your proxies by any of the
following methods:
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Voting by Mail. If you choose to vote by mail,
simply complete the enclosed Proxy, date and sign it, and return
it in the postage-paid envelope provided. Your shares will be
voted in accordance with the instructions on your Proxy unless
it is revoked. If you sign your Proxy and return it without
marking any voting instructions, your shares will be voted FOR
the election of all Director nominees, FOR the adoption of the
2007 Non-Employee Director Stock Option Plan, FOR the adoption
of the Management Team Incentive Compensation Plan, FOR the
ratification of the appointment of Ernst & Young LLP as
independent auditors for 2007, AGAINST the shareholder proposal
entitled Maximize Value Resolution, and in the
discretion of the persons named as proxies on all other matters
that may come before the Annual Meeting or any adjournment or
postponement thereof.
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Voting by Telephone. You may vote your shares
by telephone by calling the toll-free telephone number provided
on the Proxy. Telephone voting is available 24 hours a day,
and the procedures are designed to authenticate votes cast by
using a personal identification number located on the Proxy. The
procedures allow you to give a proxy to vote your shares and to
confirm that your instructions have been properly recorded. If
you vote by telephone, you should not return your Proxy.
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Voting by Internet. You also may vote your
shares through the Internet by signing on to the website
identified on the Proxy and following the procedures described
in the website. Internet voting is available 24 hours a
day, and the procedures are designed to authenticate votes cast
by using a personal identification number located on the Proxy.
The procedures allow you to give a proxy to vote your shares and
to confirm that your instructions have been properly recorded.
If you vote by Internet, you should not return your Proxy.
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If you are a shareholder whose shares are held in a street
name, (i.e., in the name of a broker, bank or other
record holder), you must either direct the record holder of your
shares how to vote your shares or obtain a Proxy, executed in
your favor, from the record holder to be able to vote at the
Annual Meeting.
The Company encourages shareholders who hold shares in a street
name to provide instruction to that record holder by voting
their Proxy. Providing voting instructions ensures that shares
will be voted at the meeting. If shares are held through a
brokerage account, the brokerage firm under certain
circumstances, may vote the shares without instructions. On
certain routine matters, such as the election of
directors, brokerage firms have authority under NYSE rules to
vote their customers shares if the customers do not
provide voting instructions. When a brokerage firm votes its
customers shares on a routine matter without receiving
voting instructions, these shares are counted both for
establishing a quorum to conduct business at the meeting and in
determining the number of shares voted for or against the
routine matter. The proposal relating to the election of
directors and the proposal to ratify the appointment of
Ernst & Young LLP as the Companys independent
auditors for the year 2007 are routine matters.
On non-routine matters, if the brokerage firm has
not received voting instructions from the shareholder, the
brokerage firm cannot vote the shares on that proposal, which is
considered a broker non-vote. Broker non-votes will
be counted for purposes of establishing a quorum to conduct
business at the meeting but not for determining the number of
shares voted for or against the non-routine matter. The
proposals to approve the 2007 Non-Employee Director Stock Option
Plan, the Management Team Incentive Compensation Plan, and the
Shareholder Proposal entitled Maximize Value
Resolution are non-routine matters.
Any shareholder giving a Proxy has the power to revoke it at any
time before it is voted by the execution of another Proxy
bearing a later date or by written notification to the Secretary
of the Company. Shareholders who are present at the Annual
Meeting may revoke their Proxy and vote in person if they so
desire.
2
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
and Voting
The Board of Directors of the Company has fixed the number of
Directors constituting the full Board at nine and has nominated
the nine persons listed below as Directors, to hold office until
the next Annual Meeting and until their successors are elected
and qualified. Each nominee was elected by the shareholders at
the last Annual Meeting on May 2, 2006. If, at the time of
the Annual Meeting, any of the nominees should be unable to
serve, the persons named in the Proxy will vote for substitute
nominees selected by the Board of Directors. The Company has no
reason to believe that any of the nominees will not be available
for election as a Director.
Nominee
Information
The following table gives certain information as to each person
nominated by the Board of Directors for election as a Director:
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Director
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Age
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Principal Occupation And Directorships
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Since
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J. Hicks Lanier
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66
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Chairman of the Board and Chief
Executive Officer of Oxford Industries, Inc., a manufacturer of
apparel products; Director of Genuine Parts Company, and
SunTrust Banks, Inc.
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1976
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Jesse C. Crawford
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58
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President of Crawford
Communications, Inc., a full-service provider of teleproduction
services including audio/video production and post production,
multimedia title design, satellite services, animation, and
special effects.
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1986
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Larry L. Prince
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68
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Chairman of the Executive
Committee of the Board of Directors of Genuine Parts Company, a
service organization engaged in automotive and industrial parts
and office products distribution; Director of Equifax, Inc.,
SunTrust Banks, Inc., and John H. Harland Co.
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1987
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E. Jenner Wood, III
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55
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Chairman of the Board, President
and Chief Executive Officer of SunTrust Bank, Central Group;
Director of Oxford Industries, Inc., and Georgia Power Company.
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1997
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Clarence H. Ridley
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64
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Chairman of the Board of Haverty
Furniture Companies, Inc. a furniture retailer, Director of STI
Classic Funds and Variable Trust.
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2004
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Robert T. Johnson
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71
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Retired Partner of Arthur Andersen
LLP.
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2004
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James D. Edwards
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63
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Retired Partner of Arthur Andersen
LLP, Director of IMS Health Incorporated, Transcend Services,
Inc., and Huron Consulting Group, Inc.
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2005
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Thomas W. Crawford
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64
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President and Chief Executive
Officer of the Company.
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2005
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P. George Benson
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60
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President of the College of
Charleston, Director of Nutrition 21, Inc., and AGCO, Inc.
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2005
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Mr. Prince retired as Chairman of the Board of Genuine
Parts Company on March 31, 2005, a position he had held
since 1990. He was also Chief Executive Officer of Genuine Parts
Company from 1990 until August 2004. Mr. Wood was appointed
to his present position in June 2002, was appointed Chairman of
the Board, President and Chief Executive Officer of SunTrust
Bank, Georgia in March 2001 and was appointed President of
SunTrust Bank, Georgia in October 2000. Mr. Johnson retired
as a partner of Arthur Andersen LLP in 1993. Mr. Edwards
retired in April 2002 as managing partner-global markets of
Arthur Andersen LLP, a position he had held since 1998.
Mr. Thomas W. Crawford was appointed President and Chief
Executive Officer of the Company on September 1, 2004. From
June 1998 until his retirement in January 2003 he was President
of the Retail Distribution division of Prudential Financial,
Inc., and from May 2004 until September 2004 he was Chairman of
The Bodie Group, Inc., a business consulting firm.
Dr. Benson was appointed to his present position February
of 2007. From June 1998 until
3
January 2007 he was Dean of the Terry College of Business at the
University of Georgia. The principal occupation or employment of
each of the other nominees during the past five years has been
as indicated in the above table.
Director
Independence
A majority of the directors will be independent directors under
the NYSE corporate governance listing standards, as in effect
from time to time. The Board believes that directors who do not
meet the NYSEs independence standards also make valuable
contributions to the board and to the Company by reason of their
experience and wisdom. To be considered independent under the
NYSE rules, the director must be determined, by resolution of
the Board as a whole, after due deliberation, to have no
material relationship with the Company other than as a director.
The board has established the following categorical independence
standards to assist it in determining director independence.
1. In no event will a director be considered
independent if, within the preceding three years:
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the director was employed by the Company or any of its direct or
indirect subsidiaries;
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an immediate family member of the director was employed by the
Company or any of its direct or indirect subsidiaries as an
executive officer;
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the director or any immediate family member received more than
$100,000 per year in direct compensation from the Company
or any of its direct or indirect subsidiaries, other than
director and committee fees and pension or other forms of
deferred compensation for prior service (as long as such
compensation is not contingent in any way on continued service);
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the director was employed by or affiliated with the
Companys present or former independent auditor or internal
auditor;
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an immediate family member of the director was employed in a
professional capacity by the Companys present or former
independent auditor or internal auditor;
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an executive officer of the Company was on the compensation
committee of the board of directors of a company that employed
either the director or an immediate family member of the
director as an executive officer; or
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the director was an executive officer or an employee, or an
immediate family member of the director was an executive
officer, of a company that made payments to, or received
payments from, the Company for property or services in an amount
which, in any single fiscal year, exceeded the greater of
$1 million, or 2% of the other companys consolidated
gross revenues.
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2. The following relationships will not be considered to be
material relationships that would impair a directors
independence:
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if a director is an executive officer of another company which
is indebted to the Company, or to which the Company is indebted,
and the total amount of the indebtedness is less than one
percent of the total consolidated assets of the indebted
company; and
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if a director serves as an executive officer, director or
trustee, or an immediate family member of the director serves as
an executive officer, of a charitable organization and the
Companys charitable contributions to the organization in
any of the last three fiscal years, in the aggregate, are less
than (1) one percent of that organizations latest
publicly available consolidated gross revenues (or annual
charitable receipts, if revenue information is not available) or
(2) $50,000, whichever is greater.
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The Board has determined, pursuant to the listing standards of
the NYSE, that all Directors standing for election are
independent for purposes of serving on the Board of Directors,
except Thomas W. Crawford. The companies with which
Mr. Prince and Mr. Wood are affiliated, Genuine Parts
Company and SunTrust Banks, Inc., respectively, are customers of
the Company and the Company is a customer of SunTrust Banks,
Inc. The Board has determined that the payments to the Company
or from the Company with respect to Genuine Parts Company and
SunTrust Banks, Inc., as a percentage of either entities
consolidated gross revenue are immaterial as affecting each
4
directors independence. In addition, SunTrust Banks, Inc.
is a lender to the Company. The Board has determined that these
loans do not affect the independence of Mr. Wood, since the
annual repayments and interest payments on the loans by the
Company, and the outstanding total loan balance itself, are not
material when compared to the consolidated gross annual revenues
of SunTrust Banks, Inc. For purposes of the Companys Audit
Committee, Mr. Johnson, Mr. Lanier, Mr. Edwards
and Mr. Prince are independent under the NYSE listing
standards and
Rule 10A-3
promulgated under the Securities Exchange Act of 1934, and
Mr. Johnson and Mr. Edwards are Audit Committee
Financial Experts as defined by Item 401(h) of
Regulation S-K
under the Securities Exchange Act of 1934. There are no family
relationships among the director nominees.
Standing
Committees and Attendance at Board and Committee
Meetings
The Board of Directors has three standing committees. The
Executive Committee consists of Jesse C. Crawford as Chairman,
and Larry L. Prince, Thomas W. Crawford and E. Jenner
Wood, III as members. The Audit Committee consists of
Robert T. Johnson as Chairman, and J. Hicks Lanier, Larry L.
Prince and since November 15, 2006 James D. Edwards as
members. The Nominating/Corporate Governance/Compensation
Committee consists of J. Hicks Lanier as Chairman, and E. Jenner
Wood, III, Clarence H. Ridley and since February 7,
2006, James D. Edwards and P. George Benson as members.
Mr. Robert T. Johnson was a member of the
Nominating/Corporate Governance/Compensation Committee from
April 27, 2004 to February 7, 2006.
The Executive Committee may exercise all the authority of the
Board of Directors between its meetings with respect to all
matters not specifically reserved by law to the Board of
Directors. The Executive Committee held five meetings during
2006.
The Audit Committee appoints or discharges the Companys
independent auditors, reviews with the independent auditors the
audit plan and results of the audit engagement, reviews the
scope and results of the Companys internal auditing
procedures and the adequacy of its accounting controls, approves
professional services provided by the independent auditors,
reviews the independence of the independent auditors, and
approves the independent auditors audit and non-audit
fees. The Committee also reviews and approves related party
transactions, in accordance with the Companys Related
Party Transactions Policy. The Companys Related Party
Transactions Policy is designed to eliminate conflicts of
interest and improper valuation issues, and applies to the
Companys directors, senior officers, shareholders holding
5% or more of the Companys stock and family members or
controlled affiliates of such persons. The Committee has adopted
a written charter, approved by the Board of Directors. The Audit
Committee held five meetings during 2006.
The Nominating/Corporate Governance/Compensation Committee
actively reviews and selects director nominees for the Board,
advises and makes recommendations to the Board on all matters
concerning corporate governance and directorship practices and
formulates and approves salaries, grants of stock options,
performance share units and restricted stock and other
compensation to the Chief Executive Officer and, upon
recommendation by the Chief Executive Officer, salaries, grants
of stock options, performance share units and restricted stock
and other compensation for all other officers of the Company.
The Board of Directors has determined that all members of the
Nominating/Corporate Governance/Compensation Committee are
independent pursuant to the NYSE Listing Rules. The
Nominating/Corporate Governance/Compensation Committee has
adopted a written charter, approved by the Board of Directors.
The Nominating/Corporate Governance/Compensation Committee
identifies and evaluates nominees for director according to the
guidelines stated in this written charter. The
Nominating/Corporate Governance/Compensation Committee will
consider director candidates recommended by shareholders. See
Communications with the Board, Board Attendance at Annual
Meetings, Shareholder Nominees below. This Committee held
two meetings in 2006. For additional information about the
Nominating/Corporate Governance/Compensation Committees
processes and the role of executive officers and compensation
consultants in determining compensation, see Compensation
Discussion and Analysis below.
Non-management and independent directors meet regularly without
management participation. During 2006 there were four such
meetings. The Presiding Director for each of these meeting was
Jesse C. Crawford.
During 2006, the Board of Directors held seven meetings. Each of
the Companys Directors attended at least seventy-five
percent (75%) of the aggregate number of meetings of the Board
of Directors and committees thereof of which such Director was a
member, with the exception of Clarence H. Ridley, who attended
56%.
5
The Companys Corporate Governance Guidelines, Committee
Charters, and Code of Business Conduct are available on its
website at www.crawfordandcompany.com and are available without
charge in print to any shareholder who makes a request by
writing to Corporate Secretary, Legal Department,
Crawford & Company, 5620 Glenridge Drive, N.E.,
Atlanta, Georgia 30342.
Director
Compensation
The following table provides compensation information for the
one-year period ended December 31, 2006 for each
non-executive member of our Board of Directors.
DIRECTOR
COMPENSATION TABLE
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Change in
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Pension
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Value and
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Fees
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Nonqualified
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Earned
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Stock
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Deferred
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or Paid in
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Stock
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Option
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Compensation
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All Other
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Name
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Cash(1)
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Awards
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Awards(2)
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Compensation
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Earnings
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Compensation
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Total
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J. Hicks Lanier
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$
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52,000
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$
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5,704
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
57,704
|
|
Jesse C. Crawford
|
|
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50,000
|
|
|
|
|
|
|
|
5,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,704
|
|
Larry L. Prince(3)
|
|
|
37,000
|
|
|
|
|
|
|
|
5,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,704
|
|
E. Jenner Wood, III
|
|
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33,000
|
|
|
|
|
|
|
|
5,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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38,704
|
|
Clarence H. Ridley
|
|
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25,000
|
|
|
|
|
|
|
|
5,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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30,704
|
|
Robert T. Johnson
|
|
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57,000
|
|
|
|
|
|
|
|
5,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,704
|
|
James D. Edwards
|
|
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27,000
|
|
|
|
|
|
|
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5,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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32,704
|
|
P. George Benson
|
|
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28,000
|
|
|
|
|
|
|
|
5,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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33,704
|
|
|
|
|
(1) |
|
During 2006 each non-executive director of the Company received
a quarterly fee of $5,000 and $1,000 for each Board of Directors
and Committee meeting attended. The Chairman of each Committee
received an additional fee of $5,000 per quarter with the
exception of the Chairman of the Audit Committee, who received
$6,000 per quarter. See Summary Compensation Table for
Disclosure related to Thomas W. Crawford who is also an
Executive Officer of the Company |
|
(2) |
|
Amounts calculated utilizing the provisions of Statement of
Financial Accounting Standards (SFAS) No. 123R,
Share-based Payment. (SFAS 123(R))
See Note 16 of the consolidated financial statements in the
Companys Annual Report for year ended December 31,
2006 regarding assumptions underlying valuation of equity
awards. The full grant date fair value of the awards to each
director, computed in accordance with SFAS 123(R), is
$5,704. The awards were made pursuant to the terms of the 1997
Non-Employee Director Stock Option Plan, each non-employee
director elected at the 2006 Annual Meeting on May 2, 2006
received an option for 3,000 shares of the Companys
Class A Common Stock at a price of $6.00 per share,
the fair market value of the Class A Common Stock on that
date. The options are non-transferable; are exercisable at any
time after grant; and lapse on the date the holder is no longer
a Director, if that occurs on or before the fifth anniversary of
the grant date, or otherwise on the tenth anniversary of the
grant date. At fiscal year end December 31, 2006 the
aggregate number of option awards outstanding for each director
was as follows: J. Hicks Lanier 42,000; Jesse C. Crawford
36,000; Larry L. Prince 42,000; E. Jenner Wood, III 42,000;
Clarence H. Ridley 24,000; Robert T. Johnson 21,000; James D.
Edwards 21,000; P. George Benson18,000. |
|
(3) |
|
Mr. Prince elected to defer his compensation for 2006
pursuant to the Companys Deferred Compensation Plan. |
Communications
with the Board, Board Attendance at Annual Meetings, Shareholder
Nominees
Individuals may communicate with the Board by sending a letter
to Board of Directors, Crawford & Company, P. O.
Box 1261, Tucker, Georgia
30085-1261.
Your letter will be shared with all members of the Board and
may, at the discretion of the Board, be shared with Company
management, unless your letter requests otherwise.
Communications that are specifically intended for non-management
directors should be addressed to Presiding Director,
Board of Directors, Crawford & Company at this same
address.
6
The Company encourages all Directors to attend the
Companys Annual Meeting and facilitates the scheduling of
the Annual Meeting to accommodate all Directors. The Company
also holds a full Board meeting the same day as the Annual
Meeting to further encourage all Directors to attend the Annual
Meeting. At the last Annual Meeting all then current Directors
attended.
Any shareholder, who is the continuous record owner of at least
one percent (1%) of the common stock of the Company for at least
one year prior to the submission of the candidate and who
provides a written statement that he or she intends to continue
ownership of the shares through the Annual Meeting of
Shareholders, may submit a nomination for director. The
candidate must meet the qualifications stated in the
Companys By-laws and the submission must be made to the
Nominating/Corporate Governance/Compensation Committee at P. O.
Box 1261, Tucker, Georgia 30085, no more than 180 days
and no less than 120 days prior to the anniversary date of
this Proxy Statement. The Nominating/Corporate
Governance/Compensation Committee will review all candidates
submitted by Shareholders for consideration as nominees pursuant
to its general practices and the guidelines stated in its
charter before submitting any nominee to the full Board of
Directors for consideration.
Shareholder
Vote
Each share of Class B Common Stock may:
|
|
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|
|
vote FOR the election of the 9 nominees for director;
|
|
|
|
WITHHOLD AUTHORITY to vote for one or more of the nominees and
vote FOR the remaining nominees; or
|
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|
|
WITHHOLD AUTHORITY to vote for the 9 nominees.
|
The 9 nominees receiving the highest number of affirmative votes
will be elected as directors. This number is called a plurality.
Cumulative voting is not permitted. Votes withheld, or
abstentions, and broker non-votes, will have no effect on the
outcome of the election of directors.
The Board
of Directors unanimously recommends a vote FOR its nominees
for Directors.
EXECUTIVE
COMPENSATION
REPORT OF
THE NOMINATING/CORPORATE GOVERNANCE/COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Companys executive compensation is administered by the
Nominating/Corporate Governance/Compensation Committee (the
Committee) of the Board of Directors. The Committee
has received and discussed the Compensation Discussion and
Analysis required by Item 402(b) of
Regulation S-K
with management and based on this review and discussion, the
Committee has recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this Proxy
Statement.
J. HICKS LANIER, CHAIRMAN
E. JENNER WOOD, III
CLARENCE H. RIDLEY
JAMES D. EDWARDS
P. GEORGE BENSON
7
COMPENSATION
DISCUSSION AND ANALYSIS
The fundamental philosophy of the Committee is to ensure that
the compensation programs of the Company will attract and retain
key executives critical to its long-term success through the
establishment of a performance-oriented environment that rewards
the achievement of strategic management goals, with the
attendant enhancement of shareholder value. This Compensation
Discussion and Analysis focuses on compensation to the Named
Executive Officers of the Company listed on page 12 of this
Proxy Statement and provides additional information regarding
compensation to key executive officers of the Company.
Role of
the Committee
The role of the Committee among other responsibilities, is
(1) to annually review and approve the Companys goals
and objectives relevant to CEO and senior executive
compensation, including as the Committee deems appropriate,
consideration of the Companys performance and relative
stockholder return, the value of similar incentive awards to
officers at comparable companies, the awards given to the
officers in past years and such other factors as the Committee
deems relevant, and evaluate the CEOs and the other senior
executives performance in light of those goals and
objectives, (2) to review and approve the adoption, terms
and operation of the Companys compensation plans for all
directors, officers and other senior executives, including
incentive-compensation plans and equity-based plans, and
(3) to grant stock options, performance share units,
restricted stock and other discretionary awards under the
Companys incentive-compensation and equity-based plans.
Role of
Executive Officers in Executive Compensation Matters
Regarding most compensation matters, including executive and
director compensation, management provides recommendations to
the Committee and the Committee takes action with respect to
such compensation; however, the Committee does delegate some of
its functions to the Chief Executive Officer in setting
compensation.
Compensation
Consultants
The Committees Charter provides for the Committee to
retain and terminate, as deemed necessary, any compensation
consultant to be used to assist in the evaluation of director,
CEO or executive compensation. The Committee has the sole
authority to select such consultant and to approve the
consultants fees and other retention terms. Historically,
the Committee has not regularly engaged a consultant related to
executive and/or director compensation matters. However, in 2005
the Committee did engage Pearl Meyer of Steven Hall &
Partners for advice in designing the compensation of
Mr. Isaac and certain other lead executives of The Garden
City Group, Inc., a wholly-owned subsidiary of the Company.
Beginning in 2007, the Committee has engaged Mercer Human
Resource Consulting to review and advise it on executive and
general compensation matters.
Elements
of Compensation
The Company does not have an exact formula for allocating
between cash and non-cash compensation to its executive
officers. Compensation is generally paid as earned. Each
executives current and prior compensation is considered in
setting future compensation. In addition, the Company reviews
the compensation practices of other
8
companies. To some extent, our compensation plan is based on the
market and the companies we compete against for executives.
There are three key elements in the Companys executive
compensation program:
|
|
|
|
|
Pay Element
|
|
What the Element Rewards
|
|
Purpose of the Pay Element
|
|
Base Salary
|
|
Individual job performance and
merit.
|
|
Ensure internal equity among
executives. Provide competitive compensation. Align interests of
executives with interests of shareholders by setting overall
compensation in line with Companys pre-tax earnings.
|
Annual Incentives
|
|
Achievement of targeted operating
earnings.
|
|
Provides focus on meeting annual
earnings goals that lead to our long-term success.
|
Long-term Incentives
|
|
Increase in shareholder value.
Vesting periods designed to encourage employee retention.
|
|
The combination of options,
restricted stock and performance share units provides a blended
focus on:
Increase in stock price
Operating earnings
Executive ownership of stock
|
Base
Salary Compensation
The Company has established a comprehensive Wage and Salary
Administration Policy applicable to the Company and its
U.S. subsidiaries. This Policy includes a program for
grading each position, including those of the
U.S. Executive Officers of the Company, to ensure internal
equity. Additionally, the Policy sets forth grade levels and
salary ranges for those grade levels, and provides for annual
merit increases tied to individual job performance as measured
through annual performance reviews. Based on published national
surveys, the Company annually establishes merit increase budgets
as a percent of current salaries and any increases in salary
ranges for the next fiscal year. Generally, the Company is at
the midpoint of projected merit salary increases and salary
range adjustments as reflected in the national surveys, with
some adjustment up or down depending on prior year pre-tax
earnings and revenues of the Company. Consistent with the
overall merit increase percentage, the Company establishes
guidelines for individual salary adjustments based on the
individuals performance rating. The base salaries for all
employees other than the Chief Executive Officer are determined
in this manner.
The Committee initially establishes and re-evaluates the salary
of the Chief Executive Officer on an annual basis. In
re-evaluating the base salary for the Chief Executive Officer,
the Committee looks primarily at the pre-tax earnings of the
Company in the preceding fiscal year as compared to the prior
fiscal year. The Committee also takes into account external
circumstances which may have impacted that performance which
were not within the control of the Company or its Executive
Officers, the increases in the base salaries of other employees
of the Company, and the Committees assessment of the
personal performance of the Chief Executive Officer during the
preceding year. For both establishing and re-evaluating the base
salary of the Chief Executive Officer, the Committee also looks
at market conditions, both within the Companys industry
peer group and otherwise. For the 2006 fiscal year, the
Committee established the base salary of the Chief Executive
Officer, Mr. T. W. Crawford, at $700,000 per annum.
Annual
Incentive Compensation
Under the Companys 1996 Incentive Compensation Plan, which
covers all U.S. key employees of the Company (other than
the Chief Executive Officer, Chief Operating Officer Global
Property & Casualty, Executive Vice
President Financial Administrative Services and
employees of The Garden City Group, Inc. and Broadspire
Management Services, Inc.), at the beginning of each fiscal year
the Committee establishes pre-tax earnings and revenue
thresholds, as well as targeted pre-tax earnings. A bonus pool
is created for sales and marketing key employees based
principally on increases in revenues above the threshold amount,
while the bonus pool for other
9
participants is based primarily on growth in pre-tax earnings
from the threshold amount up to the targeted pre-tax earnings.
The Committee has the discretion to modify the formula for any
bonus pool. The bonus pool is allocated by Mr. T. W.
Crawford, the Companys Chief Executive Officer, to the
business units and staff departments based on his assessment of
performance of the business unit and staff participants, and to
each individual participant by the business unit or staff
manager based on the individuals personal performance and
salary grade. The Chief Executive Officer establishes the
bonuses for his direct reports.
The Committee sets the bonus for the Chief Executive Officer,
based primarily on pre-tax earnings and the bonuses paid under
the 1996 Incentive Compensation Plan, as a percentage of salary,
to the other Executive Officers of the Company. Historically,
the Chief Executive Officers bonus, as a percentage of his
base salary, has been higher than the average paid to the other
Executive Officers, expressed as a percentage of their base
salaries. The Committee awarded Mr. T. W. Crawford, a bonus
of $400,000 for 2006, to be paid in 2007. This bonus was based
upon Mr. T. W. Crawfords role in successfully
completing the acquisition of Broadspire Management Services,
Inc., as well as creating and implementing various operational
goals of the Company in order to position the Company to achieve
more beneficial financial results in the coming years.
A central element of the Companys annual incentive
compensation philosophy has been to link a significant portion
of cash compensation to the attainment of our annual financial
objectives. The proposed Crawford & Company Management
Team Incentive Compensation Plan, set forth in the third
proposal, is intended to continue this direct linkage between
our performance and compensation to the persons who are most
responsible for such performance.
Long-Term
Incentive Compensation
Under the Companys Executive Stock Bonus Plan, officers
and other key employees of the Company may be granted
performance share unit awards or restricted stock awards
(collectively Awards) by the Committee, payable in
shares of the Companys Class A Common Stock. The
Committee typically reviews and acts upon the recommendations of
the Chief Executive Officer for the grant of Awards, on a
discretionary basis, annually to the Companys other
officers and key employees. The number of shares of the
Companys Class A Common Stock covered by such Awards
is generally based upon the grade level of the officer or other
key employees position, but without regard to the
individuals stock ownership or the number of options
previously granted. In 2006, as part of the annual grant, the
Committee granted a performance share unit award to
Mr. T.W. Crawford. Based on the pre-defined performance
measures, Mr. T. W. Crawford earned 8,333 shares of
the Companys Class A Common Stock from this award,
payable subject to vesting requirements at a rate of 20% of the
earned award per year. Mr. Crawford was vested in 20% of
this award for 2006, and thus received payment of
1,667 shares of the Companys Class A Common
Stock. Mr. Crawford was also vested in the second 20%
traunch of his 2005 award and thus received the payment of
1,000 shares of the Companys Class A Common
Stock.
Impact of
Internal Revenue Code Section 162(m)
Internal Revenue Code Section 162(m) provides that
compensation in excess of $1 million paid to certain
executive officers is not deductible unless it is
performance-based. It is the policy of the Committee to
periodically review and consider whether particular compensation
and incentive payments to the Companys executives will be
deductible for federal income tax purposes. For the
Companys 2006 fiscal year, payments to both Mr. T.W.
Crawford and Mr. Isaac exceeded the $1 million limit
imposed by Section 162(m). The total compensation subject
to the Section 162(m) limitation paid to Mr. T.W.
Crawford for the period was $1,173,855, exceeding the limit by
$173,855. The total compensation subject to the
Section 162(m) limitation paid to Mr. Isaac for the
period was $1,228,000, exceeding the limit by $228,000. The
Crawford & Company Management Team Incentive
Compensation Plan set forth in the third proposal of this proxy,
if approved by the shareholders, is designed to allow the
Committee to structure awards under that plan so that the
resulting compensation would be qualified
performance-based compensation eligible for
deductibility without limitation under Code Section 162(m).
However, the Committee retains the ability to evaluate the
performance of the Companys executives, including the CEO,
and to pay appropriate compensation, even if it may result in
the non-deductibility of certain compensation under federal tax
law.
10
Accounting
Considerations
Our Compensation Committee and management take into
consideration the accounting effect of the forms of compensation
that the Compensation Committee determines to award. Most of our
stock option grants that are subject to expense recognition
under SFAS 123(R) were granted prior to 2005. Stock-based
compensation expense for performance share units and restricted
stock related to our executive stock bonus plan is allocated to
our operating segments and included in the determination of
segment operating earnings or loss. The amount allocated to the
operating segments was $2.3 million for the year ended
December 31, 2006. Stock-based compensation expense related
to the employee stock purchase plan, incentive stock options and
nonqualified stock options are not allocated to the operating
segments. The amount of stock-based compensation expense not
allocated to the operating segments was $1.2 million during
2006 under the provisions of SFAS 123(R). We adopted
SFAS 123(R) effective January 1, 2006. Prior to the
adoption of SFAS 123(R), we accounted for all stock-based
compensation under the provisions of Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to
Employees (APB 25). There was a diminimis
amount of stock-based compensation expense in 2005 recognized in
our Consolidated Statements of Income under the provisions of
APB 25 and none in 2004. Beginning January 1, 2006, we
began accounting for stock-based payments in accordance with the
requirements of SFAS 123(R).
Equity
Grant Practices
Our Compensation Committee selects the terms of our equity
compensation awards including grant date, exercise price of
options and vesting period in accordance with our equity
compensation plans. Equity awards are generally on an annual
basis.
At December 31, 2006, we had three types of stock-based
compensation plans: stock option plans, an executive stock bonus
plan which allows grants of performance share units and
restricted stock, and employee stock purchase plans. Our stock
option plans for key employees and directors provide for
nonqualified and incentive stock option grants. All stock
options are for shares of the Companys Class A common
stock. Option awards are granted with an exercise price equal to
the market price of our stock at the date of grant. Our stock
option plans are approved by shareholders. Under the key
employee stock option plan, incentive and nonqualified options
for up to 6,250,000 shares may be granted. Employee stock
options typically are subject to graded vesting over five years
(20% each year) and have a typical life of ten years.
Under our directors plan, board members are granted
options upon initial election to the Board and upon annual
re-election to the Board. Options for up to 450,000 shares
may be granted under the directors plan. Directors
options are fully vested at grant date and have a typical life
of ten years.
Under our executive stock bonus plan, we are authorized to issue
up to 4,000,000 shares of the Companys Class A
common stock. The plan has two components: a performance share
unit component and a restricted stock component. Under the
performance share unit component, key employees of the Company
are eligible to earn shares of stock upon the achievement of
certain individual and corporate objectives. Share grants are
subject to graded vesting over periods typically ranging from
three to five years. Shares are not issued until the vesting
requirements have lapsed. Dividends are not paid or accrued on
unvested shares. Under the restricted stock component, the Board
of Directors may elect to issue restricted shares of stock in
lieu of, or in addition to, cash bonus payments to certain key
employees. Employees receiving these shares have restrictions on
the ability to sell the shares. Such restrictions lapse ratably
over vesting periods ranging from several months to five years.
For grants of restricted stock, vested and unearned shares
issued are eligible to receive nonforfeitable dividends if
dividends are declared by the Companys Board of Directors.
Summary
of Cash and Certain Other Compensation
The following table includes information concerning compensation
for the one-year period ended December 31, 2006, concerning
compensation paid to or accrued by the Company for those persons
who were, at
11
December 31, 2006, (1) the Chief Executive Officer
(2) Chief Financial Officer (including anyone who served as
Chief Financial Officer during fiscal year 2006) and
(3) the other three most highly compensated Executive
Officers of the Company (hereinafter collectively referred to as
the Named Executive Officers):
SUMMARY
COMPENSATION TABLE
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Change in
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Pensions
|
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Value and
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Non-Equity
|
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Nonqualified
|
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Incentive
|
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Deferred
|
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All
|
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Plan
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Compen-
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Other
|
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Stock
|
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Option
|
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Compen-
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sation
|
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Compen-
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Salary
|
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Bonus
|
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Awards
|
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Awards
|
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sation
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Earnings
|
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sation
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Total
|
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Name and Principal Position
|
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Year
|
|
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($)
|
|
|
($)
|
|
|
($)(3)
|
|
|
($)(3)
|
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($)
|
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($)(4)
|
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($)(5)
|
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($)
|
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T. W. Crawford
|
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2006
|
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$
|
730,000
|
|
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$
|
400,000
|
|
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$
|
23,771
|
|
|
$
|
253,260
|
|
|
$
|
|
|
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$
|
67
|
|
|
$
|
69,075
|
|
|
$
|
1,476,173
|
|
President and Chief Executive
Officer
|
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|
|
|
|
|
|
|
|
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|
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|
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W. B. Swain(1)
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2006
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258,500
|
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20,000
|
|
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7,538
|
|
|
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9,620
|
|
|
|
|
|
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3,033
|
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23,235
|
|
|
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321,926
|
|
Executive Vice
President Chief Financial Officer
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J. F. Giblin(2)
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2006
|
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130,914
|
|
|
|
|
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|
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7,068
|
|
|
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5,259
|
|
|
|
|
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7,365
|
|
|
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289,979
|
|
|
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440,585
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|
Executive Vice
President Chief Financial Officer
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|
|
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J. T. Bowman
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2006
|
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500,000
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250,000
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75,900
|
|
|
|
90,266
|
|
|
|
|
|
|
|
16,524
|
|
|
|
55,822
|
|
|
|
988,512
|
|
Chief Operating Officer
Global Property & Casualty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. A. Isaac
|
|
|
2006
|
|
|
|
600,000
|
|
|
|
|
|
|
|
524,780
|
|
|
|
10,870
|
|
|
|
600,000
|
|
|
|
|
|
|
|
3,490,975
|
|
|
|
5,226,625
|
|
Chief Executive Officer
The Garden City Group, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
K. B. Frawley
|
|
|
2006
|
|
|
|
512,692
|
|
|
|
200,000
|
|
|
|
|
|
|
|
18,477
|
|
|
|
|
|
|
|
2,370
|
|
|
|
45,562
|
|
|
|
779,101
|
|
Executive Vice
President Financial Administrative Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Swain was appointed Executive Vice President and Chief
Financial Officer October 6, 2006 and acted as Interim
Chief Financial Officer from May 2, 2006 to October 6,
2006. |
|
(2) |
|
Mr. Giblin resigned as Executive Vice President and Chief
Financial Officer of the Company May 2, 2006. |
|
(3) |
|
Reflects the dollar amount recognized in accordance with
SFAS 123(R) and actual forfeitures and thus may include
amounts for awards granted in and prior to 2006. |
|
(4) |
|
Represents the following amounts for 2006:
(i) Mr. Crawford: $67 earnings on the Deferred
Compensation Plan; (ii) Mr. Swain: $1,835 earnings on
the Deferred Compensation Plan, and $1,198 actuarial increase in
pension value; (iii) Mr. Giblin: $2,776 earnings on
the Deferred Compensation Plan, and $4,589 actuarial increase in
pension value; (iv) Mr. Bowman: $16,524 earnings on
the Deferred Compensation Plan; (v) Mr. Frawley:
$2,370 earnings on the Deferred Compensation Plan. |
|
(5) |
|
Represents the following amounts for 2006:
(i) Mr. Crawford: $13,720 Company contribution to the
Deferred Compensation Plan under the Companys Supplemental
Executive Retirement Plan (SERP), $11,500 Company
contribution to the Crawford Savings and Investment Plan, $5,654
in country club dues, $25,959 apartment rent, $2,260 airfare for
spouse, $9,802 personal use of private jet, and $180 premium
payment on term life insurance; (ii) Mr. Swain: $2,893
Company contribution to the Deferred Compensation Plan under the
Companys SERP, $435 Companys contribution to the
Deferred Compensation Plan, $11,500 Company contribution to the
Crawford Savings and Investment Plan, $400 for country club
dues, $7,827 automobile allowance, and $180 premium payment on
term life insurance; (iii) Mr. Giblin: $239,524
severance, $31,494 value of company car given upon termination,
$10,000 paid for outplacement services, $395 for country club
dues, $8,491 in COBRA payments, and $75 premium payment on term
life insurance; (iv) Mr. Bowman: $22,980 Company
contribution to the Deferred Compensation Plan under the
Companys SERP, $11,500 |
12
|
|
|
|
|
Company contribution to the Crawford Savings and Investment
Plan, $2,682 for country club dues, $12,480 automobile
allowance, $6,000 dividends paid on restricted stock award, and
$180 premium payment on term life insurance;
(v) Mr. Isaac: $3,452,975 commissions, $16,000 country
club dues, $10,000 Company contribution to a Company Savings and
Investment Plan, and $12,000 automobile allowance;
(vi) Mr. Frawley: $19,854 Company contribution to the
Crawford Deferred Compensation Plan under the Companys
SERP, $4,900 Company contribution to the Crawford Savings and
Investment Plan, $9,108 for country club dues, $11,520
automobile allowance, and $180 premium payment on term life
insurance. |
Grant of
Plan-Based Awards Table
The Company maintains the Executive Stock Bonus Plan under which
awards of performance share units or restricted stock may be
granted to specified employees of the Company. The Company
previously sponsored stock option plans under which outstanding
option grants remain exercisable by prior participants in those
plans. The following table sets forth certain information with
respect to the non-equity incentive awards, restricted stock
awards, performance share unit awards and options granted during
or for the fiscal year ended December 31, 2006 to each of
our Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
or Base
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Number of
|
|
|
Number of
|
|
|
Price of
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan
Awards(6)
|
|
|
Under Equity Incentive Plan Awards(7)
|
|
|
Shares of
|
|
|
Securities
|
|
|
Option
|
|
|
of Stock
|
|
|
|
Grant Date
|
|
|
Grant Date
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Awards
|
|
|
and Option
|
|
Name and Position
|
|
(1)
|
|
|
(2)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
Units (#)
|
|
|
Options(#)
|
|
|
($/sh)
|
|
|
Awards
|
|
|
T. W. Crawford
|
|
|
2/7/06
|
|
|
|
2/7/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,700
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
48,900
|
|
W. B. Swain
|
|
|
2/7/06
|
|
|
|
2/7/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,335
|
|
|
|
|
10/6/06
|
(4)
|
|
|
10/24/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
|
|
|
|
|
|
|
|
36,120
|
|
J. F. Giblin(3)
|
|
|
2/7/06
|
|
|
|
2/7/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
4,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,005
|
|
J. T. Bowman
|
|
|
2/7/06
|
|
|
|
2/7/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
4,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,005
|
|
|
|
|
2/10/06
|
(4)
|
|
|
4/14/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
293,500
|
|
D. A. Isaac
|
|
|
12/1/05
|
(5)
|
|
|
10/24/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125,000
|
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,317,500
|
|
|
|
|
12/1/05
|
(5)
|
|
|
10/24/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
153,750
|
|
|
|
|
9/19/06
|
|
|
|
9/19/06
|
|
|
$
|
250,000
|
|
|
$
|
400,000
|
|
|
$
|
600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
K. B. Frawley
|
|
|
2/7/06
|
|
|
|
2/7/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
$
|
5.60
|
|
|
|
43,750
|
|
|
|
|
(1) |
|
Grant date as determined for financial statement reporting
purposes pursuant to Statement 123(R). See Note 4. |
|
(2) |
|
Grant date of award by Nominating/Corporate
Governance/Compensation Committee. See Note 4. |
|
(3) |
|
Mr. Giblins employment with the Company ended
May 2, 2006 and his awards were forfeited. |
|
(4) |
|
In 2006, two grants of restricted stock were made to
Messrs. Swain and Bowman on a day other than a meeting of
the Committee. The grants were made under letter agreements
negotiated by our CEO pursuant to authority delegated to him by
the Committee to offer Messrs. Swain and Bowman new positions
with the Company, which letter agreements were signed on
October 6, 2006 and February 10, 2006, respectively.
The Committee subsequently approved the grants of restricted
stock at its next meetings on October 24, 2006 and
April 14, 2006, respectively. The Company concluded that
the grant dates for financial reporting purposes under
SFAS 123(R) were October 6, 2006 and February 10,
2006, respectively because (i) those were the dates that
the Company and Messrs. Swain and Bowman had a mutual
understanding of the key terms and conditions of the awards,
(ii) Messrs. Swain and Bowman began to benefit from,
or adversely be affected by, changes in the price of the
Companys shares on those dates and (iii) the
authority to negotiate the agreements had been delegated to our
CEO by the Committee, approval by the Committee for these
particular agreements was considered perfunctory. |
|
(5) |
|
On December 1, 2005, the Committee approved an executive
compensation plan for the Garden City Group, Inc. including a
grant that would be made to Mr. Isaac subject to him entering
into the employment agreement with the Company. The employment
agreement with Mr. Isaac was signed on September 19,
2006 and approved by the Compensation Committee on
October 24, 2006. Because (i) the agreement with
Mr. Isaac fell within the parameters of the executive
compensation plan for the Garden City Group approved on
December 1, 2005, (ii) the Company and Mr. Isaac
had a mutual understanding of the key terms and conditions of
the awards, and (iii) Mr. Isaac began to |
13
|
|
|
|
|
benefit from, or adversely be affected by, changes in the price
of the Companys shares on that date, the Company concluded
that the grant date for financial reporting purposes under
SFAS 123(R) was December 1, 2005. |
|
(6) |
|
Mr. Isaacs employment agreement provides for annual
cash incentive bonus payments, provided certain targets are met. |
|
(7) |
|
These columns show the potential number of performance share
unit awards that would be awarded if the threshold, target or
maximum performance goals are satisfied. |
Outstanding
Equity Awards at December 31, 2006 Table
The following table sets forth certain information with respect
to the outstanding equity awards at December 31, 2006 for
each of our Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Number of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Unearned
|
|
|
Unearned
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
Number
|
|
|
Shares or
|
|
|
Shares,
|
|
|
Shares,
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Number of
|
|
|
|
|
|
|
|
|
of Shares
|
|
|
Units of
|
|
|
Units or
|
|
|
Units or
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Securities
|
|
|
|
|
|
|
|
|
or Units
|
|
|
Stock
|
|
|
Other
|
|
|
Other
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Underlying
|
|
|
Option
|
|
|
|
|
|
of Stock
|
|
|
That
|
|
|
Rights
|
|
|
Rights
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unexercised
|
|
|
Exercise
|
|
|
Option
|
|
|
That
|
|
|
Have Not
|
|
|
That Have
|
|
|
That Have
|
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Unearned
|
|
|
Price
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Vested
|
|
|
Not Vested
|
|
|
Not Vested
|
|
Name
|
|
(1)
|
|
|
(1)
|
|
|
Options(#)
|
|
|
($)
|
|
|
Date
|
|
|
Vested (#)
|
|
|
($)(4)
|
|
|
(#)
|
|
|
($)
|
|
|
T. W. Crawford
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
|
|
|
$
|
5.08
|
|
|
|
9/1/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
$
|
17,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
59,900
|
|
W. B. Swain
|
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
15.00
|
|
|
|
2/4/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
19.125
|
|
|
|
1/15/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
12.50
|
|
|
|
2/2/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
11.25
|
|
|
|
2/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(2)
|
|
|
|
|
|
|
|
|
|
|
11.25
|
|
|
|
2/1/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
10.00
|
|
|
|
1/30/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
1,500
|
|
|
|
|
|
|
|
8.82
|
|
|
|
1/29/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
2,000
|
|
|
|
|
|
|
|
4.70
|
|
|
|
1/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
6,000
|
|
|
|
|
|
|
|
6.66
|
|
|
|
2/3/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
35,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600
|
|
|
|
3,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500
|
|
|
|
8,985
|
|
J. F. Giblin(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. T. Bowman
|
|
|
4,500
|
|
|
|
|
|
|
|
|
|
|
|
15.00
|
|
|
|
2/4/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
19.125
|
|
|
|
1/15/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
12.50
|
|
|
|
2/2/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
11.25
|
|
|
|
2/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,000
|
|
|
|
|
|
|
|
|
|
|
|
10.00
|
|
|
|
1/30/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,000
|
|
|
|
4,500
|
|
|
|
|
|
|
|
8.82
|
|
|
|
1/29/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(2)
|
|
|
|
|
|
|
8.82
|
|
|
|
1/29/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
|
|
6,000
|
|
|
|
|
|
|
|
4.70
|
|
|
|
1/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
18,000
|
|
|
|
|
|
|
|
6.66
|
|
|
|
2/3/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,080
|
|
|
|
75,120
|
|
|
|
|
|
|
|
6.36
|
|
|
|
9/15/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
299,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,800
|
|
|
|
10,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
|
26,955
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Number of
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Unearned
|
|
|
Unearned
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
Number
|
|
|
Shares or
|
|
|
Shares,
|
|
|
Shares,
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Number of
|
|
|
|
|
|
|
|
|
of Shares
|
|
|
Units of
|
|
|
Units or
|
|
|
Units or
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Securities
|
|
|
|
|
|
|
|
|
or Units
|
|
|
Stock
|
|
|
Other
|
|
|
Other
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Underlying
|
|
|
Option
|
|
|
|
|
|
of Stock
|
|
|
That
|
|
|
Rights
|
|
|
Rights
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unexercised
|
|
|
Exercise
|
|
|
Option
|
|
|
That
|
|
|
Have Not
|
|
|
That Have
|
|
|
That Have
|
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Unearned
|
|
|
Price
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Vested
|
|
|
Not Vested
|
|
|
Not Vested
|
|
Name
|
|
(1)
|
|
|
(1)
|
|
|
Options(#)
|
|
|
($)
|
|
|
Date
|
|
|
Vested (#)
|
|
|
($)(4)
|
|
|
(#)
|
|
|
($)
|
|
|
D. A. Isaac
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
11.25
|
|
|
|
4/27/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
11.25
|
|
|
|
2/1/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
10.00
|
|
|
|
1/30/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
9.70
|
|
|
|
4/24/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,600
|
|
|
|
900
|
|
|
|
|
|
|
|
8.82
|
|
|
|
1/29/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,800
|
|
|
|
1,200
|
|
|
|
|
|
|
|
4.70
|
|
|
|
1/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
|
12,000
|
|
|
|
|
|
|
|
6.66
|
|
|
|
1/3/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
149,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
360
|
|
|
|
2,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000
|
|
|
|
1,497,500
|
|
K. B. Frawley
|
|
|
5,000
|
|
|
|
20,000
|
|
|
|
|
|
|
|
7.40
|
|
|
|
4/26/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
5.60
|
|
|
|
4/7/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
All options become exercisable 20% per year commencing on
first anniversary date of grant, except for Mr. T. W.
Crawfords which becomes exercisable 25% per year
commencing on first anniversary date of grant, and two special
options as footnoted. |
|
(2) |
|
Accelerated vesting terms for these options have expired and
they are exercisable on the sixth anniversary of the grant date
and expire on the seventh anniversary of the grant date. |
|
(3) |
|
Mr. Giblins employment with the Company ended
May 2, 2006. |
|
(4) |
|
Market value based on NYSE closing price on December 29,
2006 (which was the last business day for the NYSE during 2006)
of $5.99 for our Class A Common Stock. |
Option
Exercises and Stock Vested Table
The following table provides information concerning the exercise
of stock options during the last fiscal year and unexercised
options held as of the end of the fiscal year with respect to
the Named Executive Officers. It also provides information on
stock awards vested during the last fiscal year with respect to
the Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares Acquired
|
|
|
Value Realized
|
|
|
Shares Acquired
|
|
|
Value Realized
|
|
Name
|
|
on Exercise (#)
|
|
|
on Exercise ($)
|
|
|
on Vesting (#)
|
|
|
on Vesting ($)
|
|
|
T. W. Crawford
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
$
|
5,600
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
5,760
|
|
W. B. Swain
|
|
|
|
|
|
|
|
|
|
|
200
|
|
|
|
1,176
|
|
|
|
|
|
|
|
|
|
|
|
|
200
|
|
|
|
1,152
|
|
J. F. Giblin
|
|
|
9,000
|
|
|
$
|
12,900
|
|
|
|
450
|
|
|
|
2,646
|
|
J. T. Bowman
|
|
|
|
|
|
|
|
|
|
|
600
|
|
|
|
3,528
|
|
|
|
|
|
|
|
|
|
|
|
|
600
|
|
|
|
3,456
|
|
D. A. Isaac
|
|
|
|
|
|
|
|
|
|
|
120
|
|
|
|
719
|
|
|
|
|
|
|
|
|
|
|
|
|
120
|
|
|
|
691
|
|
K. B. Frawley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
Pension
Benefits at December 31, 2006 Table
The Company maintains a non-contributory Retirement Plan for the
benefit of substantially all of the U.S. employees of the
Company who were employed as of December 31, 2002. The
Retirement Plan provides for annual retirement benefits at
Normal Retirement Age (65) equal to 2% of the
participants total compensation (as defined in the
Retirement Plan) for all credited years of service under the
Plan. The benefits are not affected by Social Security benefits
payable to the participant; however, they are actuarially
reduced for retirements before the Normal Retirement Age or if
the retiree selects benefits other than an individual life-time
annuity. Credited years of service under the Retirement Plan for
Mr. Swain is 10 years and for Mr. Giblin is
12 years. Messrs. T. W. Crawford, Frawley, Bowman, and
Isaac do not participate in the Retirement Plan. Effective
December 31, 2002, accruals under the Retirement Plan were
frozen. In place of the accruals under the now frozen Retirement
Plan, the Company may make a discretionary contribution to the
Defined Contribution Plan for eligible employees based on years
of service and compensation as well as Company financial
results. The following table provides information concerning the
pension benefits at December 31, 2006 with respect to the
Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value of
|
|
|
Payments
|
|
|
|
|
|
Years of
|
|
|
Accumulated
|
|
|
During Last
|
|
|
|
|
|
Credited
|
|
|
Benefits
|
|
|
Fiscal Year
|
|
Name
|
|
Plan Name
|
|
Service (#)
|
|
|
($)
|
|
|
($)
|
|
|
T. W. Crawford
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
W. B. Swain
|
|
Crawford & Company
Retirement Plan
|
|
|
10
|
|
|
|
97,290
|
|
|
|
0
|
|
J. F. Giblin
|
|
Crawford & Company
Retirement Plan
|
|
|
12
|
|
|
|
186,305
|
|
|
|
0
|
|
|
|
Crawford & Company
Supplemental Executive Retirement Plan
|
|
|
12
|
|
|
|
65,519
|
|
|
|
0
|
|
|
|
Crawford & Company
Deferred Compensation Restoration Plan
|
|
|
12
|
|
|
|
1,079
|
|
|
|
0
|
|
J. T. Bowman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. A. Isaac
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
K. B. Frawley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
Deferred Compensation Table
The Company maintains an unfunded Supplemental Executive
Retirement Plan (SERP) for certain Executive
Officers to provide benefits that would otherwise be payable
under the Retirement Plan
and/or
Defined Contribution Plan but for limitations placed on covered
compensation and benefits under the Internal Revenue Code.
Effective December 31, 2002, accruals under the SERP were
also frozen as to the Retirement Plan. The SERP was amended to
allow the Company, when it elects to make the discretionary
contribution to the Defined Contribution Plan for eligible
employees, to also make an additional SERP Service Contribution
to the Deferred Compensation Plan for participants of the SERP.
The amounts contributed in 2006 for the Named Executive Officers
are reflected in the All Other Compensation column of the
Summary Compensation Table and footnote 4 thereto. The
following table provides information concerning the nonqualified
deferred compensation with respect to the Named Executive
Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
|
Contribution
|
|
|
Earnings
|
|
|
Withdrawals/
|
|
|
Balance
|
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
in Last FY
|
|
|
Distributions
|
|
|
at Last FYE
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
T. W. Crawford
|
|
$
|
|
|
|
$
|
13,720
|
|
|
$
|
67
|
|
|
$
|
|
|
|
$
|
13,787
|
|
W. B. Swain
|
|
|
10,431
|
|
|
|
3,328
|
|
|
|
1,835
|
|
|
|
|
|
|
|
40,215
|
|
J. F. Giblin
|
|
|
|
|
|
|
|
|
|
|
2,776
|
|
|
|
53,212
|
|
|
|
|
|
J. T. Bowman
|
|
|
|
|
|
|
22,980
|
|
|
|
16,524
|
|
|
|
|
|
|
|
312,137
|
|
D. A. Isaac
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
K. B. Frawley
|
|
|
66,269
|
|
|
|
19,854
|
|
|
|
2,370
|
|
|
|
|
|
|
|
88,494
|
|
16
EMPLOYMENT
AND
CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has entered into various agreements with certain of
the Named Executive Officers that contain provisions regarding
employment and
change-in-control,
as described below:
T. W. Crawford: Effective as of
September 1, 2004, the Company agreed to a compensation
package with Mr. Crawford. The compensation package set
Mr. Crawfords initial annual base salary at $600,000;
Mr. Crawfords annual base salary is currently
$721,600. The compensation package provided for annual incentive
compensation up to $400,000 at the discretion of the Board of
Directors, and a prorated first year limit of one-third of the
total allowable annual incentive compensation. The Board of
Directors approved a $400,000 incentive compensation payment to
Mr. Crawford for 2006. The compensation package provided
for a grant of options for 500,000 shares of the
Companys Class A Common Stock under the
Companys 1997 Key Employee Stock Option Plan, which grant
vests at a rate of 125,000 shares per year over a four-year
period. Mr. Crawfords compensation package also
provided that he would be eligible to participate in all other
executive benefit and incentive plans generally offered to the
Companys senior officers. On February 1, 2005, the
Company entered into a Change of Control and Severance Agreement
with Mr. Crawford. The agreement provides that in the event
that Mr. Crawfords employment with the Company is
terminated due to the Company being bought or sold such that
there is a material change in control, the Company agrees to
provide to Mr. Crawford eighteen (18) months of
Mr. Crawfords then current base salary. A
material change in control is defined in the
Severance Agreement as the acquisition of the Company by a third
party of greater than fifty (50) percent of the
Class B shares of the Company. Additionally, all stock
options granted to Mr. Crawford will immediately vest and
become exercisable for a ninety (90) day period following
the date of termination.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments and
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits upon
|
|
in
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
Termination
|
|
Control
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
Terminations
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
$
|
1,050,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Awards[5]
|
|
|
522,885
|
|
|
$
|
245,470
|
|
|
$
|
245,470
|
|
|
$
|
245,470
|
|
|
$
|
227,500
|
|
Unvested and accelerated
|
|
|
[1][2][3]
|
|
|
|
[1]
|
|
|
|
[1]
|
|
|
|
[1]
|
|
|
|
|
|
Benefits and
Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
Disability Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[4]
|
|
|
|
|
|
Accrued Vacation Pay
|
|
|
24,231
|
|
|
|
24,231
|
|
|
|
24,231
|
|
|
|
24,231
|
|
|
|
24,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,597,116
|
|
|
$
|
269,701
|
|
|
$
|
269,701
|
|
|
$
|
419,701
|
|
|
$
|
251,731
|
|
|
|
|
[1] |
|
Unvested, earned performance share unit awards are fully vested. |
|
[2] |
|
Unearned performance share units awards are deemed earned on a
pro-rata basis. |
|
[3] |
|
Unvested stock options are fully vested. |
|
[4] |
|
Mr. T.W. Crawford would be entitled to disability payments
totaling $11,500 per month, payable though age 65. |
|
[5] |
|
Based on the December 29, 2006 (which was the last business
day for the NYSE during 2006) closing price of $5.99 per
share for Class A common stock; assumes underwater options
are not exercised. |
W. B. Swain: On October 6, 2006, the
Company issued a letter agreement outlining employment terms
with Mr. Swain. The letter agreement set
Mr. Swains initial annual base salary at $290,000;
indicated his eligibility to participate in all other executive
benefit and incentive plans generally offered to the
Companys senior officers. Mr. Swains letter
agreement also tendered, subject to Board approval, a restricted
stock grant of 6,000 shares of Class A Common Stock
under the provisions of the Executive Stock Bonus Plan.
17
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments and
|
|
Change
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits upon
|
|
in
|
|
|
Without
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
Termination
|
|
Control
|
|
|
Cause
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
Terminations
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards[5]
|
|
$
|
49,394
|
|
|
$
|
39,810
|
|
|
$
|
43,404
|
|
|
$
|
43,404
|
|
|
$
|
43,404
|
|
|
$
|
3,870
|
|
Unvested and accelerated
|
|
|
[1][2][3]
|
|
|
|
[3]
|
|
|
|
[1][3]
|
|
|
|
[1][3]
|
|
|
|
[1][3]
|
|
|
|
|
|
Benefits and
Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
Disability Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[4]
|
|
|
|
|
|
Accrued Vacation Pay
|
|
|
22,029
|
|
|
|
22,029
|
|
|
|
22,029
|
|
|
|
22,029
|
|
|
|
22,029
|
|
|
|
22,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
71,423
|
|
|
$
|
61,839
|
|
|
$
|
65,433
|
|
|
$
|
665,433
|
|
|
$
|
65,433
|
|
|
$
|
25,899
|
|
|
|
|
[1] |
|
Unvested, earned performance share unit awards are fully vested. |
|
[2] |
|
Unearned performance share unit awards are deemed earned on a
pro-rata basis. |
|
[3] |
|
Unvested restricted stock awards are fully vested. |
|
[4] |
|
Mr. Swain would be entitled to disability payments totaling
$11,500 per month, payable though age 65. |
|
[5] |
|
Based on the December 29, 2006 (which was the last business
day for the NYSE during 2006) closing price of $5.99 per
share for Class A common stock; assumes underwater options
are not exercised. |
J. F. Giblin: On May 30, 2006 the Company
entered into a Severance Agreement and Release with
Mr. Giblin. Mr. Giblin was Executive Vice President
and Chief Financial Officer of the Company when he resigned on
May 2, 2006. Under the terms of the Agreement, the Company
will pay Mr. Giblin a total of $378,196.10 in twenty-six
equal payments over a twelve month severance period. If
Mr. Giblin is not employed at the end of the twelve month
severance period, the Company will pay him $31,516.34 per
month for up to six additional months, or until he becomes
employed during that six month period. Mr. Giblin will be
liable for any and all taxes on the amounts paid to him pursuant
to this Agreement. Pursuant to his applicable stock option
agreements, Mr. Giblin had 90 days from his
resignation to exercise his vested stock options.
Mr. Giblin elected COBRA coverage for himself
and/or his
eligible dependents, and the Company will pay the premiums for
such COBRA coverage for the lesser of twelve months or until
Mr. Giblin becomes eligible for other comparable insurance
coverage through a subsequent employer. During the twelve month
severance period the Company will continue to pay the premiums
on Mr. Giblins current life insurance, if permitted
by policy and applicable law, or will pay Mr. Giblin a
monthly sum equal to the monthly premiums for said insurance.
The Company agreed to make a lump sum payment of $18,909.80 to
Mr. Giblin in lieu of any annual contribution to his 401(k)
plan account. The Company transferred to Mr. Giblin his
company car free and clear of all liens, loans or debt. The
Company will pay for Mr. Giblin to receive outplacement
services for a period not to exceed six months. The Company will
pay Mr. Giblins attorneys fees and expenses up
to $3,000. In the Agreement Mr. Giblin releases the Company
from all claims, agrees to preserve all Confidential Information
regarding the Company and agrees to certain non-solicitation
provisions.
J. T. Bowman: On February 10, 2006, the
Company entered into an employment agreement with
Mr. Bowman. The agreement set his current annual base
salary at $500,000, indicated his eligibility to receive up to
$250,000 annually as incentive compensation at the sole
discretion of the Chief Executive Officer and tendered, subject
to Board approval, a restricted stock grant of
50,000 shares of Class A Common Stock under the
provisions
18
of the Executive Stock Bonus Plan. The agreement also provides
that in the event that Mr. Bowmans employment with
the Company is terminated for reasons other than
cause, or in the event of a
change-in-control
of the Company, both as solely defined by the Chief Executive
Officer, the Company agrees to provide one year of
Mr. Bowmans then current base salary. Additionally,
the Company will provide continuation of eligible medical
benefits, for a period of one year, under COBRA. Also, all stock
options granted to Mr. Bowman will immediately vest and
become exercisable for a ninety (90) day period following
the date of termination. The agreement also provides that, prior
to the severance amounts being paid and options vesting, that
the Company and Mr. Bowman agree to mutually acceptable
terms of confidentiality, non-solicitation, cooperation and
other reasonable and customary terms of a severance agreement at
the time of his termination of employment.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits upon
|
|
Change in
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
Termination
|
|
Control [5]
|
|
|
without Cause [5]
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
Terminations
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards [7]
|
|
|
352,095
|
|
|
|
318,850
|
|
|
$
|
321,892
|
|
|
$
|
321,892
|
|
|
$
|
321,892
|
|
|
$
|
11,610
|
|
Unvested and accelerated
|
|
|
[1][2][3][4]
|
|
|
|
[3][4]
|
|
|
|
[1][3]
|
|
|
|
[1][3]
|
|
|
|
[1][3]
|
|
|
|
|
|
Benefits and
Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
Disability Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[6]
|
|
|
|
|
|
Accrued Vacation Pay
|
|
|
48,077
|
|
|
|
48,077
|
|
|
|
48,077
|
|
|
|
48,077
|
|
|
|
48,077
|
|
|
|
48,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
900,172
|
|
|
$
|
866,927
|
|
|
$
|
369,969
|
|
|
$
|
969,969
|
|
|
$
|
369,969
|
|
|
$
|
59,687
|
|
|
|
|
[1] |
|
Unvested, earned performance share unit awards are fully vested. |
|
[2] |
|
Unearned performance share unit awards are deemed earned on a
pro-rata basis. |
|
[3] |
|
Unvested restricted stock awards are fully vested. |
|
[4] |
|
Unvested stock options are fully vested. |
|
[5] |
|
Prior to the compensation amounts being paid and options
vesting, the Company and Mr. Bowman must agree to mutually
acceptable terms of confidentiality, non-solicitation,
cooperation and other reasonable and customary terms of a
severance agreement at the time of his termination of employment. |
|
[6] |
|
Mr. Bowman would be entitled to disability payments
totaling $11,500 per month, payable though age 65. |
|
[7] |
|
Based on the December 29, 2006 (which was the last business
day for the NYSE during 2006) closing price of $5.99 per
share for Class A common stock; assumes underwater options
are not exercised. |
D. A. Isaac: Effective as of January 1,
2006, the Company agreed to an employment agreement with
Mr. Isaac. The employment agreement has an initial term
commencing on January 1, 2006 and ending on
December 31, 2010. The term automatically renews for
successive one year periods unless cancelled prior to the end of
the then current period pursuant to the terms of the employment
agreement. The employment agreement set Mr. Isaacs
initial annual base salary at $600,000. The employment agreement
provides for annual incentive compensation based on growth in
The Garden City Group, Inc.s (GCG) pretax
income. Mr. Isaac will earn the minimum annual incentive of
$250,000 if GCGs pretax income grows by at least 10%.
Mr. Isaac will earn the target annual incentive
compensation of $400,000 if GCGs pretax income grows by at
least 15%. Mr. Isaac will earn the maximum annual incentive
compensation of $600,000 if GCGs pretax income grows by at
least 20%. The employment agreement provides for a restricted
stock grant of 25,000 shares of the Companys
Class A Common Stock under the Companys Executive
Stock Bonus Plan, which grant vested as of January 1, 2007.
The employment agreement provides for a performance share unit
grant of 312,000 units under the Companys Executive
Stock Bonus Plan, with any earned portion of the award payable
in shares of the Companys Class A Common Stock.
Mr. Isaac was awarded 250,000 performance share units in
2006 and was awarded 62,000 performance share units in 2007.
Mr. Isaac may earn the performance share units based on
future GCG pre-tax
19
income growth for the period beginning on January 1, 2006
and ending on December 31, 2010. The employment agreement
provides for annual commission payments of 3% of gross fee
revenues. Mr. Isaacs employment agreement also
provides that he is eligible to participate in all other
executive benefit and incentive plans generally offered to the
Companys senior officers. The employment agreement
provides for (i) continued payment of Mr. Isaacs
base salary for a period of 6 months following his death or
disability, (ii) a continued payment of the commission
amounts on revenue derived from business initiated prior to
Mr. Isaacs death or disability for a period of
2 years following Mr. Isaacs death or
disability, and (iii) payment of a pro rata portion of
Mr. Isaacs annual incentive compensation and
performance share units through the date of his termination of
employment due to death or disability. The employment agreement
provides that in the event that Mr. Isaacs employment
with the Company is terminated either by Mr. Isaac for
good reason or by the Company without cause, and
such termination is not within 3 months prior to or
12 months after a change in control, the
Company will (i) continue payment of Mr. Isaacs
base salary for a period of 12 months following his
termination, continue payment of the commission amounts on
revenue derived from business initiated prior to
Mr. Isaacs termination for a period of 12 months
following Mr. Isaacs termination, and payment of a
pro rata portion of Mr. Isaacs performance share
units through the date of his termination of employment.
Additionally, the Company will provide continuation of eligible
medical benefits, for a period of 12 months, under COBRA.
The employment agreement provides that in the event that
Mr. Isaacs employment with the Company is terminated
either by Mr. Isaac for good reason or by the
Company without cause, and such termination is within
3 months prior to or 12 months after a change in
control, the Company will (i) continue payment of
Mr. Isaacs base salary for a period of 18 months
following his termination, continue payment of the commission
amounts on revenue derived from business initiated prior to
Mr. Isaacs termination for a period of 18 months
following Mr. Isaacs termination, and payment of a
pro rata portion of Mr. Isaacs performance share
units through the date of his termination of employment.
Additionally, the Company will provide continuation of eligible
medical benefits, for a period of 18 months, under COBRA.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits upon
|
|
Change in
|
|
|
Termination
|
|
|
Termination for
|
|
|
|
|
|
|
|
|
All Other
|
|
Termination
|
|
Control[4]
|
|
|
without Cause[4]
|
|
|
Good Reason[4]
|
|
|
Death[4]
|
|
|
Disability[4]
|
|
|
Terminations
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
$
|
900,000
|
|
|
$
|
600,000
|
|
|
$
|
600,000
|
|
|
$
|
300,000
|
|
|
$
|
300,000
|
|
|
|
|
|
Incentives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000
|
|
|
|
600,000
|
|
|
|
|
|
Commissions
|
|
|
[5]
|
|
|
|
[6]
|
|
|
|
[6]
|
|
|
|
[7]
|
|
|
|
[7]
|
|
|
|
|
|
Stock Awards [10]
|
|
|
901,780
|
|
|
|
901,780
|
|
|
|
901,780
|
|
|
|
901,780
|
|
|
|
901,780
|
|
|
|
|
|
Unvested and accelerated
|
|
|
[1][2][3]
|
|
|
|
[1][2][3]
|
|
|
|
[1][2][3]
|
|
|
|
[1][2][3]
|
|
|
|
[1][2][3]
|
|
|
|
|
|
Benefits and
Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500,000
|
|
|
|
|
|
|
|
|
|
Disability Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[8]
|
|
|
|
|
|
Accrued Vacation Pay
|
|
|
82,356
|
|
|
|
82,356
|
|
|
|
82,356
|
|
|
|
82,356
|
|
|
|
82,356
|
|
|
$
|
82,356
|
|
280G Tax
Gross-up
|
|
|
[9]
|
|
|
|
[9]
|
|
|
|
[9]
|
|
|
|
[9]
|
|
|
|
[9]
|
|
|
|
[9]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,884,136
|
|
|
$
|
1,584,136
|
|
|
$
|
1,584,136
|
|
|
$
|
3,384,136
|
|
|
$
|
1,884,136
|
|
|
$
|
82,356
|
|
|
|
|
[1] |
|
Unvested, earned performance share unit awards are fully vested. |
|
[2] |
|
Unearned performance share unit awards are deemed earned on a
pro-rata basis. |
|
[3] |
|
Unvested restricted stock awards are fully vested. |
|
[4] |
|
Mr. Isaacs compensation amounts are subject to a
clawback provision in the event he violates the terms of the
non-competition, non-disclosure or non-disparagement provisions
of his employment agreement. |
20
|
|
|
[5] |
|
Mr. Isaacs commission payments continue for a period
of 18 months following terminations related to a change in
control. |
|
[6] |
|
Mr. Isaacs commission payments continue for a period
of 1 year following terminations either without
cause or for good reason. |
|
[7] |
|
Mr. Isaacs commission payments continue for a period
of 2 years following terminations related to death or
disability. |
|
[8] |
|
Mr. Isaac would be entitled to short-term disability
payments of $30,000 per month for 6 months, followed by
long-term disability payments of $15,000 per month, payable
though age 65. |
|
[9] |
|
Termination payments are limited to the maximum amount payable
without triggering excise tax under section 280G. |
|
[10] |
|
Based on the December 29, 2006 (which was the last business
day for the NYSE during 2006) closing price of $5.99 per
share for Class A common stock; assumes underwater options are
not exercised. |
K. B. Frawley: On November 5, 2004, the
Company issued a letter agreement outlining employment terms
with Mr. Frawley. The letter agreement set
Mr. Frawleys initial annual base salary at $500,000;
Mr. Frawleys annual base salary is currently
$515,000. The letter agreement indicated his eligibility to
receive up to 1.4 times his base salary annually as incentive
compensation at the discretion of the Chief Executive Officer,
subject to approval by the Board of Directors, and provided a
guaranteed first year payment of 100% the allowable annual
incentive compensation. Mr. Frawley received a $600,000
incentive compensation payment for 2005. The letter agreement
provides for a grant of options for 100,000 shares of the
Companys Class A Common Stock under the
Companys 1997 Key Employee Stock Option Plan, with options
with respect to 25,000 shares of the grant awarded as of
April 26, 2005, and the balance of the grant awarded at a
rate of 25,000 shares per year over a three-year period.
Each 25,000 share block of options vests at a rate of
20% per year, beginning on the first anniversary of each
grant. Effective as of March 2, 2007, the Committee awarded
Mr. Frawley 16,670 shares of restricted stock in lieu
of the remaining 50,000 option awards he would have otherwise
been entitled to under the letter agreement. The restricted
stock vests at a rate of 20% per year beginning on
December 31, 2007. Mr. Frawleys letter agreement
also provides that he will be eligible to participate in all
other executive benefit and incentive plans generally offered to
the Companys senior officers. On March 4, 2005, the
Company entered into a Change of Control and Severance Agreement
with Mr. Frawley. The agreement provides that in the event
Mr. Frawleys employment with the Company is
terminated due to the Company being bought or sold such that
there is a material change in control, the Company agrees to
provide eighteen (18) months of Mr. Frawleys
then current base salary. Additionally, all stock options
granted to Mr. Frawley will immediately vest and become
exercisable for a ninety (90) day period following the date
of termination. The agreement also provides that in the event
Mr. Frawley is terminated by Crawford in his first year of
employment, for reasons other than cause, he will be provided
severance compensation equal to six (6) months of his then
current base salary. The agreement also provides that, prior to
the severance amounts being paid and options vesting, that the
Company and Mr. Frawley agree to mutually acceptable terms
of confidentiality, non-solicitation, cooperation and other
reasonable and customary terms of a severance agreement at the
time of his termination of employment.
21
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments and
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits upon
|
|
in
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
Termination
|
|
Control
|
|
|
Retirement
|
|
|
Death
|
|
|
Disability
|
|
|
Terminations
|
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
$
|
769,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards [3]
|
|
|
9,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested and accelerated
|
|
|
[1]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and
Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance
|
|
|
|
|
|
$
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disability Benefits
|
|
|
|
|
|
|
|
|
|
|
[2]
|
|
|
|
|
|
|
|
|
|
Accrued Vacation Pay
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
778,788
|
|
|
$
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[1] |
|
Unvested stock options are fully vested. |
|
[2] |
|
Mr. Frawley would be entitled to disability payments
totaling $11,500 per month, payable though age 65. |
|
[3] |
|
Based on the December 29, 2006 (which was the last business
day for the NYSE during 2006) closing price of $5.99 per
share for Class A common stock; assumes underwater options
are not exercised. |
STOCK
OWNERSHIP INFORMATION
Security
Ownership of Management
The following table sets forth information, as of March 6,
2007, as to shares of Class A and Class B Common Stock
beneficially owned by each current Director or nominee for
election as a Director, each of the Named Executive Officers,
and all current Directors and Executive Officers as a group. As
of March 6, 2007, there were 25,756,739 shares of
Class A Common Stock and 24,697,172 shares of
Class B Common Stock outstanding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of
|
|
|
|
Amount and Nature of
|
|
|
Total Shares
|
|
|
|
Beneficial Ownership(1)
|
|
|
Outstanding(2)
|
|
Name
|
|
Class A
|
|
|
Class B
|
|
|
Class A
|
|
|
Class B
|
|
|
Jesse C. Crawford(3)(4)
|
|
|
12,089,158
|
|
|
|
12,783,181
|
|
|
|
46.9
|
%
|
|
|
51.8
|
%
|
J. Hicks Lanier(5)(6)
|
|
|
45,037
|
|
|
|
3,037
|
|
|
|
|
|
|
|
|
|
Larry L. Prince(5)(6)
|
|
|
43,125
|
|
|
|
1,125
|
|
|
|
|
|
|
|
|
|
E. Jenner Wood, III(5)(6)
|
|
|
42,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clarence H. Ridley(7)
|
|
|
24,000
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
Robert T. Johnson(8)
|
|
|
23,000
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
James D. Edwards(8)
|
|
|
21,000
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
P. George Benson(9)
|
|
|
18,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas W. Crawford(10)
|
|
|
273,264
|
|
|
|
40,000
|
|
|
|
1.1
|
|
|
|
|
|
W. Bruce Swain(11)
|
|
|
41,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey T. Bowman(12)
|
|
|
194,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David A. Isaac(13)
|
|
|
67,662
|
|
|
|
2,038
|
|
|
|
|
|
|
|
|
|
Kevin B. Frawley(14)
|
|
|
36,067
|
|
|
|
2,593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Directors and Executive
Officers as a Group
(20 persons)(15)
|
|
|
13,033,539
|
|
|
|
12,842,974
|
|
|
|
50.6
|
|
|
|
52.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Except as otherwise indicated in the following footnotes, the
persons possessed sole voting and investment power with respect
to all shares set forth opposite their names. |
22
|
|
|
(2) |
|
Except where a percentage is specified, the persons
ownership represents less than 1% of the outstanding shares. |
|
(3) |
|
Includes 36,000 shares of Class A Common Stock subject
to options exercisable within sixty (60) days of
March 6, 2007. |
|
(4) |
|
See Note (2) to the table set forth under Security
Ownership of Certain Beneficial Owners below with respect
to the Class B Common Stock. The shares of Class A
Common Stock shown as beneficially owned by Jesse C. Crawford
include 53,691 shares held in trust for his son over which
he has voting and shares investment power, 379,921 shares
held by Crawford Partners LP over which he shares voting and
investment power, and 8,192,091 shares held in the Estate
of Virginia C. Crawford over which he has voting power and
shares investment power. |
|
(5) |
|
Includes 42,000 shares of Class A Common Stock subject
to options exercisable within sixty (60) days of
March 6, 2007. |
|
(6) |
|
Messrs. Lanier and Prince are directors of SunTrust Banks,
Inc. Mr. Wood is Chairman, President and Chief Executive
Officer of SunTrust Bank, Central Group. Messrs. Lanier,
Prince and Wood disclaim any beneficial ownership in shares held
by SunTrust Banks, Inc. or any of its banking subsidiaries,
which shares are not reflected in the table. See
Information With Respect to Certain Business Relationships
and Related Transactions and Security Ownership of
Certain Beneficial Owners. |
|
(7) |
|
Includes 24,000 shares of Class A Common Stock subject
to options exercisable within sixty (60) days of
March 6, 2007. |
|
(8) |
|
Includes 21,000 shares of Class A Common Stock subject
to options exercisable within sixty (60) days of
March 6, 2007. |
|
(9) |
|
Includes 18,000 shares of Class A Common Stock subject
to options exercisable within sixty (60) days of
March 6, 2007. |
|
(10) |
|
Includes 250,000 shares of Class A Common Stock
subject to options exercisable within sixty (60) days of
March 6, 2007. |
|
(11) |
|
Includes 35,500 shares of Class A Common Stock subject
to options exercisable within sixty (60) days of
March 6, 2007. |
|
(12) |
|
Includes 131,580 shares of Class A Common Stock
subject to options exercisable within sixty (60) days of
March 6, 2007. |
|
(13) |
|
Includes 40,900 shares of Class A Common Stock subject
to options exercisable within sixty (60) days of
March 6, 2007. |
|
(14) |
|
Includes 15,000 shares of Class A Common Stock subject
to options exercisable within sixty (60) days of
March 6, 2007. |
|
(15) |
|
Includes 8,625,703 shares of Class A Common Stock and
10,901,081 shares of Class B Common Stock as to which
voting or investment power is shared and 825,680 shares of
Class A Common Stock subject to options exercisable within
sixty (60) days of March 6, 2007. |
23
Security
Ownership of Certain Beneficial Owners
The following table sets forth certain information concerning
each person known to the Company to be the beneficial
owner, as such term is defined by the rules of the
Securities and Exchange Commission (SEC), of more
than 5% of the outstanding shares of Class B Common Stock
of the Company as of March 6, 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of
|
|
|
|
Amount and Nature of
|
|
|
Class B Shares
|
|
Name and Address
|
|
Beneficial Ownership
|
|
|
Outstanding
|
|
|
SunTrust Bank
|
|
|
12,594,476
|
(1)
|
|
|
51.0
|
%
|
c/o SunTrust Bank
55 Park Place
Atlanta, Georgia 30303
|
|
|
|
|
|
|
|
|
Linda K. Crawford
|
|
|
1,459,977
|
|
|
|
5.9
|
%
|
57 N. Green Bay Road
Lake Forest, Illinois 60045
|
|
|
|
|
|
|
|
|
Crawford Partners, L.P.
|
|
|
10,466,931
|
(1)(2)
|
|
|
42.4
|
%
|
55 Park Place
Atlanta, Georgia 30303
|
|
|
|
|
|
|
|
|
Jesse C. Crawford
|
|
|
12,783,181
|
(1)(2)
|
|
|
51.8
|
%
|
Crawford Communications, Inc.
3845 Pleasantdale Rd.
Atlanta, Georgia 30340
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The shares are held by one or more bank subsidiaries of SunTrust
Bank in various fiduciary and agency capacities. SunTrust Bank
has sole voting power with respect to 1,644,157 of such shares.
SunTrust Bank has sole investment power with respect to
1,693,395 of such shares, shares investment power with respect
to 49,238 of such shares and shares voting and investment power
with respect to 384,912 of such shares. SunTrust Bank disclaims
any beneficial interest in any such shares. Included in the
shares beneficially owned by SunTrust Bank are
10,466,931 shares held by Crawford Partners, L.P. Jesse C.
Crawford is a general partner of Crawford Partners, L.P., owns
all of the units of the other general partner of Crawford
Partners, L.P., and directs the voting of the shares owned by
Crawford Partners, L. P. Also included in the shares
beneficially owned by SunTrust Banks are 384,912 shares
held in a trust over which SunTrust Bank and Jesse C. Crawford
share voting and investment power. |
|
(2) |
|
The shares shown as beneficially owned by Jesse C. Crawford
include 49,238 shares held in trust for his son over which
he has voting and shares investment power;
10,466,931 shares held by Crawford Partners, L.P. over
which he shares voting and investment power; and
384,912 shares in a trust over which he shares voting and
investment power. |
INFORMATION
WITH RESPECT TO CERTAIN BUSINESS RELATIONSHIPS AND
RELATED TRANSACTIONS
For information on the Companys Related Party Transactions
Policy, please refer to the Audit Committee discussion on
Page 5.
SunTrust Bank holds 12,594,476 shares of Class B
Common Stock of the Company as of March 6, 2007. See
Stock Ownership Information Security
Ownership of Certain Beneficial Owners. SunTrust Bank
exercises voting authority with respect to shares of
Class B Common Stock held in fiduciary capacities. SunTrust
Bank is also a lender to the Company. SunTrust Bank serves as
the administrative agent for the Companys
$310 million credit facility and participates in the
syndication of that debt. In addition the Company also maintains
a normal commercial banking relationship with SunTrust Bank,
which serves as trustee and investment manager for the
Crawford & Company Retirement Plan and the
Crawford & Company Employee Disability Income Plan.
SunTrust Bank also processes checks relating to loss fund
accounts, which are used for payment of the Companys
clients claims. E. Jenner Wood, III, a Director of
the Company, is Chairman of the Board, President and Chief
Executive Officer of SunTrust Bank, Central Group. The Board has
determined that these relationships do not affect
Mr. Woods independence.
24
EQUITY
COMPENSATION PLANS
The following table sets forth certain information concerning
securities authorized for issuance under equity compensation
plans as of December 31, 2006. Only the Companys
Class A Common Stock is authorized for issuance under these
plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities
|
|
|
|
|
|
|
|
|
|
remaining available for
|
|
|
|
Number of securities to
|
|
|
Weighted-average
|
|
|
future issuance under
|
|
|
|
be issued upon exercise
|
|
|
exercise price of
|
|
|
equity compensation plans
|
|
|
|
of outstanding options,
|
|
|
outstanding options,
|
|
|
(excluding securities
|
|
|
|
warrants and rights
|
|
|
warrants and rights
|
|
|
reflected in column (a))
|
|
Plan Category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved
by security holders
|
|
|
4,025,030
|
(1)
|
|
$
|
8.80
|
(2)
|
|
|
7,652,143
|
(3)
|
Equity compensation plans not
approved by security holders(4)
|
|
|
170,165
|
|
|
$
|
5.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,195,195
|
|
|
|
|
|
|
|
7,652,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Shares issuable pursuant to the outstanding options under the
Stock Option Plans (3,673,255), the Employee Stock Purchase Plan
(127,399 shares), and the approved portion of the U.K.
Sharesave Scheme (224,376). |
|
(2) |
|
Includes exercise prices for outstanding options under the Stock
Option Plans, the Employee Stock Purchase Plan and the U.K.
Sharesave Scheme. |
|
(3) |
|
Represents shares which may be issued under the Stock Option
Plans (2,872,745 shares), the Employee Stock Purchase Plan
(577,954 shares), the U.K. Sharesave Scheme (275,624). and
the Executive Stock Bonus Plan (3,925,820). |
|
(4) |
|
Represents shares under the unapproved portion of the U.K.
Sharesave Scheme (an employee stock purchase plan.) |
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires the Companys directors and officers, and greater
than ten percent (10%) beneficial owners of the Companys
equity securities, to file with the SEC and the NYSE reports of
ownership and changes in ownership of common stock and other
equity securities of the Company. Officers, directors and
greater than ten percent shareholders are required by the SEC
regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on a review of the copies of such reports furnished
to the Company or written representations that no other reports
are required, the Company believes that, during the year ending
December 31, 2006, all of its officers, directors and
greater than ten percent beneficial owners complied with
applicable filing requirements.
PROPOSAL 2
TO APPROVE THE 2007 NON-EMPLOYEE DIRECTOR STOCK OPTION
PLAN
General. On March 14, 2007 the Executive
Committee of the Board of Directors adopted the
Crawford & Company 2007 Non-Employee Director Stock
Option Plan (the Director Plan) in the form attached
as Appendix A hereto. The Director Plan provides for
the grant of options to non-employee directors of the Company
for a specified number of shares of the Companys
Class A Common Stock. A total of 450,000 shares of
Class A Common Stock are reserved for issuance under the
Director Plan. The purpose of the Director Plan is to tie a
portion of the non-employee director compensation directly to
increases in shareholder value. From February, 1997 until
February, 2007 when it expired, all non-employee Directors were
eligible to participate in the 1997 Non-Employee Director Stock
Option Plan.
Options. If the Director Plan is approved by
the Shareholders, each eligible director elected or re-elected
at the meeting at which the Director Plan is approved will
receive on that date on option for 15,000 shares of
Class A
25
Common Stock. At each subsequent Annual Meeting, each new
eligible director shall receive an option on that date for
15,000 shares of Class A Common Stock and each
re-elected eligible director shall receive an option on that
date for 3,000 shares of Class A Common Stock.
Eligibility. Only those directors who, at the
time of their election or re-election as directors, are neither
officers nor employees of the Company may receive options under
the Director Plan.
Exercise Price. The exercise price of the
options granted under the Director Plan is the fair market value
of the Class A Common Stock on the date the option is
granted. As defined in the Director Plan, the fair market
value of a share of Class A Common Stock on the date
an option is granted will be determined by reference to the
closing price of a share of such stock on the NYSE as accurately
reported for such date by The Wall Street
Journal. Options granted under the Director plan
provide for payment of the exercise price in cash, Class A
Common Stock, or a combination of cash and Class A Common
Stock. The Company will receive no payment upon the granting of
options pursuant to the Director Plan.
Exercise Period. Each option granted under the
Director Plan is exercisable in whole or in part at any time
after grant, but not after (i) the date the option holder
is no longer a director of the Company if such date occurs on or
before the fifth anniversary of the option grant date, or
(ii) the tenth anniversary of the option grant if the
optionee is and remains a director of the Company through the
fifth anniversary of the option grant date, subject to earlier
termination of the Option in either case in the event of the
sale or merger of the Company. See Sale or Merger of the
Company, below.
Non-Transferability. Options granted under the
Director Plan may not be transferred by the option holder and
during his or her lifetime, may be exercised only by him or her.
Adjustment of Shares. The Director Plan
provides for adjustments of the number of shares of Class A
Common Stock available for the grant of options under the
Director Plan, the number of shares of Class A Common Stock
covered by the options granted under the Director Plan, and the
exercise price to reflect any change in the capitalization of
the Company, including, but not limited to, changes such as
stock splits or stock dividends, mergers, consolidations or
other reorganizations.
Sale or Merger of the Company. If the Company
agrees to sell substantially all of its assets, or agrees to any
merger, consolidation, reorganization, division or other
corporate transaction in which Class A Common Stock is
converted into another security or into the right to receive
securities or other property and such agreement does not provide
for the assumption or substitution of the options granted under
the Director Plan, each outstanding option shall terminate
thirty (30) days after notice by the Board of Directors to
the Optionee of the pendency of such event.
Term of the Director Plan. No option shall be
granted under the Director Plan on or after March 14, 2017.
Amendment to the Director Plan. The Director
Plan may be amended by the Board of Directors from time to time
to the extent that the Board of Directors deems necessary or
appropriate; however, no amendment may be made without approval
of the shareholders of the Company (i) to increase the
number of shares reserved under the Director Plan, or
(ii) to change the class of directors eligible for options
under the Director Plan.
Federal Income Tax Consequences. A description
of the federal income tax consequences of participation in the
Director Plan under present law is set forth below. This
description is only a general summary based on current federal
income tax laws, regulations (including certain proposed
regulations), and judicial and administrative interpretations
thereof. The federal income tax laws and regulations are
frequently amended, and such amendments may or may not be
retroactive with respect to transactions described herein.
Grant or Exercise. The grant of an option to a
director is not a taxable event. The exercise of an option will
result in taxable ordinary income to the director, the amount of
such income being equal to the Spread, defined as
the excess of (i) the fair market value of the shares
acquired upon exercise of the option, over (ii) the
exercise price of such shares.
Tax Basis. The Tax Basis in shares acquired
upon exercise of any option differs depending on whether the
option exercise price is paid in cash or in stock. With a cash
exercise, the Tax basis of the acquired shares will be equal to
(i) the cash paid, increased by (ii) any amount
included in the directors gross income as compensation by
26
virtue of the exercise of the option. If shares of stock are
exchanged in full or partial payment of the exercise price, the
Tax Basis of the number of shares acquired equal to the number
exchanged shall be the Tax Basis of those exchanged shares. The
shares acquired as part of the exchange which are in excess of
the number surrendered have a Tax Basis equal to the amount
included in the directors gross income as compensation by
virtue of the exercise of the option.
Sale of Shares. Depending upon the period the
shares are held after exercise, the sale or other taxable
disposition of Class A Common Stock acquired upon the
exercise of an option will result in a short- or long- term
capital gain or loss equal to the difference between
(i) the amount realized on the disposition and
(ii) the Tax Basis of the shares sold.
Approval of Director Plan. The adoption of the
Director Plan must be approved by a favorable vote of a majority
of the shares of Class B Common Stock present and voting at
the Annual Meeting. Proxies solicited by the Board of Directors
will be voted in favor of this proposal unless the shareholders
specify in their proxies a contrary choice. Abstentions,
including broker non-votes, will not be counted.
The Board of Directors unanimously recommends a vote FOR
the approval of the 2007 Non-Employee Director Stock Option
Plan.
PROPOSAL 3
TO APPROVE THE MANAGEMENT TEAM INCENTIVE COMPENSATION
PLAN
General. On March 14, 2007 the Executive
Committee of the Board of Directors adopted the
Crawford & Company Management Team Incentive
Compensation Plan (the Incentive Plan) in the form
attached as Appendix B hereto.
The Board of Directors recommends that you vote to approve the
proposed 2007 Management Team Incentive Compensation Plan (the
Incentive Plan). The Board and the
Nominating/Corporate Governance/Compensation Committee (the
Committee) approved the Incentive Plan to help us:
|
|
|
|
|
Attract, retain, motivate and reward executive employees of
Crawford and its subsidiaries and affiliates.
|
|
|
|
Provide to our senior leadership an incentive to outstanding
performance.
|
|
|
|
Qualify incentive awards as performance-based compensation so
that we will be able to claim tax deductions without limitation
under Section 162(m) of the Internal Revenue Code the
(Code).
|
As discussed in the Compensation Discussion and Analysis above,
our compensation programs are based on a strong
pay-for-performance
philosophy. A central element of this philosophy has been to
link a significant portion of cash compensation to the
attainment of our annual financial objectives. The Incentive
Plan is intended to continue this direct linkage between our
performance and compensation to the persons who are most
responsible for such performance.
Code Section 162(m) generally disallows a federal income
tax deduction to any publicly held corporation for compensation
paid in excess of $1 million in any taxable year to the
chief executive officer or any of the four persons who are named
executive officers for proxy disclosure purposes. We intend to
structure awards under the Incentive Plan so that the resulting
compensation would be qualified performance-based
compensation eligible for deductibility without limitation
under Code Section 162(m). To enable compensation under the
Incentive Plan to so qualify for full tax deductibility, we are
asking shareholders to approve the Incentive Plan, which
approval will be deemed to include approval of the Incentive
Plans terms relating to eligibility, annual per-person
limitations on incentive awards, and the business criteria upon
which performance goals may be based.
Description
of the Incentive Plan
The following description of the Incentive Plan is qualified in
its entirety by the provisions of the Incentive Plan, a copy of
which is attached as Appendix B to this Proxy Statement.
The Incentive Plan authorizes the Committee to select
participants, designate performance periods, authorize
performance awards that may be earned by achievement of
performance goals during the performance periods, and
27
set the other terms of performance awards. Employees of the
Company and its subsidiaries and affiliates who are or may
become executive officers are eligible for selection for
participation in the Incentive Plan. Currently, we have sixteen
(16) employees who are or may become executive officers who
are eligible for participation in the Incentive Plan.
Particular restrictions will apply to any authorization of an
award intended to qualify as performance-based
compensation under Section 162(m). Performance goals
and related terms of such an award must be established during
the first 90 days of the performance period, and during the
first 25% of any performance period shorter than one year. The
Committee must specify the amounts that may be earned
corresponding to particular levels of performance. The Incentive
Plan permits the Committee to measure performance using a
variety of business criteria, including the following:
|
|
|
|
|
Revenues growth or revenues, including revenues from specified
sources (e.g., fee revenues) or by specified business units or
sales forces, and including revenues above a specified hurdle;
|
|
|
|
gross profit or pre-tax profit;
|
|
|
|
operating earnings, pre-tax income, earnings before or after
taxes, earnings before or after minority interests, earnings
before or after interest, depreciation, amortization, or
extraordinary or special items;
|
|
|
|
net income or net income per common share (basic or fully
diluted);
|
|
|
|
return measures, including, but not limited to, return on assets
(gross or net), return on investment, return on capital, or
return on equity;
|
|
|
|
|
|
cash flow, free cash flow, cash flow return on investment
(discounted or otherwise), operating cash flow, net cash
provided by operating activities, or cash flow in excess of cost
of capital;
|
|
|
|
interest expense after taxes;
|
|
|
|
economic value created or economic profit;
|
|
|
|
operating margin or profit margin;
|
|
|
|
shareholder value creation measures, including but not limited
to stock price or total shareholder return;
|
|
|
|
revenues from specific assets, projects or lines of business;
|
|
|
|
targets relating to expense or operating expense, working
capital targets, or operating efficiency; and
|
|
|
|
strategic business criteria, consisting of one or more
objectives based on meeting specified goals relating to client
satisfaction, market penetration, market share, geographic
business expansion, operating goals, cost targets, employee
satisfaction, human resources management, supervision of
litigation and information technology, and acquisitions or
divestitures of assets, subsidiaries, affiliates or joint
ventures.
|
The Committee retains discretion to set the level of performance
with respect to any business criteria that will determine the
amount earned under a performance award. Performance may be
measured in absolute terms, as a goal relative to performance in
prior periods (for example, growth in the performance measure
over the prior year), or as a goal compared to the performance
of one or more comparable companies or businesses or an index
covering multiple companies, or in other ways specified by the
Committee.
A participant may potentially earn incentive awards up to his or
her annual limit in any calendar year. The annual
limit for each individual is $10 million plus the amount of
the participants unused annual limit as of the close of
the previous calendar year. A participant uses up his or her
annual limit in a given year based on the maximum potential
amount of the incentive award authorized by the Committee, even
if the actual amount earned is less than the maximum.
Upon completion of a performance period, the Committee must
determine the level of attainment of the pre-set performance
goals and that other material requirements have been met before
any incentive award may be paid out. For participants whose
awards are intended to qualify for full tax deductibility under
Section 162(m) and in the absence of a termination of
employment or change in control, the Committee retains
discretion to adjust incentive
28
awards downward, but not upward to a level in excess of the
pre-set amount earned through actual performance, in determining
the final award amount. For other participants, both upward or
downward adjustments are permitted.
Payments under the Incentive Plan may be made either in cash,
common stock of any class, or other forms of equity awards, as
determined by the Committee, with any common stock or other
equity awards to be drawn from our Executive Stock Bonus Plan or
other compensation plan providing for share-based awards as may
then be in effect. No shares of common stock are specifically
reserved under the Incentive Plan itself.
The Committee generally can specify the circumstances in which
awards will be paid or forfeited in the event of a change in
control, termination of employment or other events. However, the
Incentive Plan provides that, in the event of death or
disability, the participant will receive a pro rated incentive
award, proportionate to the part of the performance period
worked by the participant, based on actual performance as
measured over the whole performance period, unless otherwise
determined by the Committee. For awards intended to qualify
under Section 162(m), the applicable regulations may
preclude authorizing a payout of awards upon retirement or a
voluntary termination of employment if the performance goal is
not in fact achieved.
The Committee has authority to amend, alter, suspend, or
terminate the Incentive Plan, but significant changes must be
approved by the Board. In addition, an amendment or modification
must be approved by shareholders if such approval is required to
preserve the qualification of the Incentive Plan under
Section 162(m). Under this standard, however, amendments
that might broaden eligibility or increase our cost in providing
the Incentive Plan would not necessarily require shareholder
approval.
The Incentive Plan contains provisions intended to promote the
protection of our business. A participant generally will forfeit
awards and certain gains resulting from awards if he or she has
taken actions harmful to Crawford. These forfeitures will be
triggered if we file financial statements that are in error and
must be corrected by a restatement, where the filing resulted
from misconduct caused by the participant or which the
participant failed to prevent through gross negligence.
Forfeitures will apply to incentive awards that the participant
earned either by performance during the period covered by the
erroneous financial report or during the
12-month
period following the filing of such report, and any award
granted during the 12 months after the filing of the
erroneous report and during any additional period until the
restatement is filed. The Incentive Plan authorizes the
Committee to impose other forfeiture provisions for the
protection of our business, including conditions relating to
non-competition, non-solicitation, confidentiality,
non-disparagement and other requirements for the protection of
the our business.
Nothing in the Incentive Plan would preclude the Committee or
Board from authorizing payment of other compensation, including
bonuses based upon performance, to executive officers and other
employees outside of the Incentive Plan. The Incentive Plan
provides that members of the Committee and the Board shall not
be personally liable, and shall be fully indemnified, in
connection with any action, determination, or interpretation
taken or made in good faith under the Incentive Plan.
Federal
Income Tax Consequences
Payment of cash or issuance of freely transferable shares to a
participant in settlement of an award generally will result in
recognition by the participant of ordinary income for federal
income tax purposes. In the case of shares delivered in
settlement, the ordinary income would be equal to the fair
market value of the shares at that settlement date. The
Committee may permit a participant to elect to defer settlement,
or may impose a deferral period beyond the date on which the
risk of forfeiture of the award lapses, which in most cases
would cause the award to be subject to additional requirements
under recently enacted Code Section 409A. We intend to
structure such awards in a way that would meet the applicable
requirements under Section 409A.
New Plan
Benefits Under the Incentive Plan
Awards under the Incentive Plan will be granted in the
discretion of the Committee. The recipients and other terms of
such awards cannot be determined at this time. Information
regarding our recent practices with respect to incentive awards
under the current programs is presented above in the
Summary Compensation Table and the Grants of
Plan-Based Awards Table, and in the text accompanying
those Tables and the Compensation Discussion and Analysis.
29
In the event shareholders disapprove the proposed Incentive
Compensation Plan, incentive awards will not be granted or paid
out under the Incentive Plan.
The Board of Directors unanimously recommends a vote FOR
the approval of the 2007 Management Team Incentive Compensation
Plan of Crawford & Company.
PROPOSAL 4
RATIFICATION OF INDEPENDENT AUDITORS
Ernst & Young LLP has been selected by the Audit
Committee of the Board of Directors to serve as independent
auditors for the Company for the fiscal year 2007. Although the
selection and appointment of independent auditors is not
required to be submitted to a vote of shareholders, the Board of
Directors has decided, as in the past, to ask the Companys
shareholders to ratify this appointment. Despite the selection
of Ernst & Young LLP as the Companys independent
auditors and the ratification by the shareholders of that
selection, the Audit Committee has the power at any time to
select another auditor for 2007, without further shareholder
action. A representative of Ernst & Young LLP
will be present at the meeting and will be given an opportunity
to make a statement, if he or she desires, and to respond to
questions. In addition, a report of the Audit Committee in
connection with the independence of the auditors, as well as
other matters, follows the Boards recommendation on this
matter below.
Fees Paid
to Ernst & Young LLP
In addition to performing the audit of the Companys
consolidated financial statements, Ernst & Young LLP
provides some other permitted services to the Company and its
foreign and domestic subsidiaries. Ernst & Young LLP
has advised the Company that it has billed or will bill the
Company the below indicated amounts for the following categories
of services for the years ended December 31, 2006 and 2005:
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
2005
|
|
|
Audit fees(1)
|
|
$
|
2,835,000
|
|
|
$
|
2,160,000
|
|
Audit related fees(2)
|
|
|
311,000
|
|
|
|
217,450
|
|
Tax fees(3)
|
|
|
237,000
|
|
|
|
256,000
|
|
All other fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,383,000
|
|
|
$
|
2,633,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Audit fees include annual financial statement audit, the audit
of internal control over financial reporting, and statutory
audits required internationally. |
|
(2) |
|
Audit related fees include: employee benefit plan audits, SAS 70
reports, accounting consultations, and attest services related
to acquisitions. |
|
(3) |
|
Tax fees consist principally of professional services rendered
by Ernst & Young LLP for tax compliance and tax
planning and advice. |
The Audit Committee reviews and pre-approves in addition to all
audit services, all non-audit services provided by the
independent auditor. On an ongoing basis, management
communicates specific projects and categories of services to the
Audit Committee on which advance approval is requested. The
Audit Committee reviews these requests and votes by resolution
its approval or rejection of such non-audit services after due
deliberation.
Shareholder
Vote
The proposal to ratify the appointment of Ernst & Young
LLP to serve as independent auditors for the year 2007 will be
adopted if the number of votes cast in favor of ratification
exceeds the number of votes cast against ratification. Votes
cast against and abstentions on this matter will be counted as
votes against the matter. Because this is a routine matter,
broker non-votes will not change the number of votes cast for or
against the matter. If the shareholders do not ratify the
selection of Ernst & Young LLP, the selection of the
independent auditors for 2007 will be determined by the Audit
Committee of the Board of Directors.
30
The Board of Directors unanimously recommends a vote FOR
the approval of Ernst & Young LLP as the Companys
independent auditors for 2007.
PROPOSAL 5
SHAREHOLDER PROPOSAL
William Steiner, 112 Abbottsford Gate, Piermont, N.Y., 10968, a
shareholder of Crawford & Company owning
4,150 shares of Class B Common Stock, proposes the
adoption of the following resolution, which is quoted verbatim
below.
MAXIMIZE
VALUE RESOLUTION
Resolved that the shareholders of Crawford & Co. B
Corporation urge the Crawford & Co. B Board of
Directors to arrange for the prompt sale of
Crawford & Co. B to the highest bidder.
The purpose of the Maximize Value Resolution is to give all
Crawford & Co. B shareholders the opportunity to send a
message to the Crawford & Co. B Board that they support
the prompt sale of Crawford & Co. B to the highest
bidder. I believe that a strong and or majority vote by the
shareholders would indicate to the board the displeasure felt by
the shareholders of the shareholder returns over many years and
the drastic action that should be taken. Even if it is approved
by the majority of the Crawford & Co. B shares
represented and entitled to vote at the annual meeting, the
Maximize Value Resolution will not be binding on the
Crawford & Co. B Board. The proponent however believes
that if this resolution receives substantial support from the
shareholders, the board may choose to carry out the request set
forth in the resolution:
The prompt auction of Crawford & Co. B should be
accomplished by any appropriate process the board chooses to
adopt including a sale to the highest bidder whether in cash,
stock or a combination of both.
The proponent further believes that if the resolution is
adopted, the management and the board will interpret such
adoption as a message from the companys stockholders that
it is no longer acceptable for the board to continue with its
current management plan and strategies.
I URGE
YOUR SUPPORT, VOTE FOR THIS RESOLUTION
The
Companys Statement in Opposition
The Board believes the proposed action is not in the best
interest of the Company or its shareholders and recommends a
vote against the resolution. The Board fully recognizes its
obligation to maximize long-term shareholder value; however, the
Board unanimously opposes the view that the way to maximize
value is to put the Company up for sale in an auction process.
Our shareholders concurred with our recommendation at the 2004
Annual Meeting where Mr. Steiner presented a similar
proposal, with 21,646,926 shares voting against such
proposal and only 833,360 shares in favor.
Shareholder
Vote
Approval of the Maximize Value Resolution requires
the affirmative vote of a majority of shares of the
Companys stock present in person or represented by proxy
and entitled to vote at the annual meeting.
The Board of Directors unanimously recommends a
vote AGAINST the Maximize Value Resolution.
AUDIT
COMMITTEE REPORT
In fulfilling its responsibilities to review the Companys
financial reporting process, the Audit Committee (the
Committee) has reviewed and discussed with the
Companys management and the independent auditors the
audited financial statements to be contained in the Annual
Report on
Form 10-K,
for the fiscal year ended December 31, 2006. Management is
responsible for the financial statements and the reporting
process, including the
31
system of internal controls. Independent auditors are
responsible for expressing an opinion on the conformity of those
audited financial statements with accounting principles
generally accepted in the United States.
The Committee discussed with the independent auditors the
matters required to be discussed by Statement on Audit Standards
No. 61, Communications with Audit Committee, as amended. In
addition, the Committee has discussed with the independent
auditors the auditors independence from the Company and
its management, including the matters in the written disclosure
required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committees. In determining
the independence of the auditors, the Committee has considered,
among other matters, whether the provision of services, other
than those related to the audit of the Companys annual
financial statements, is compatible with maintaining the
auditors independence.
The Committee discussed with the Companys internal and
independent auditors the overall scope and plans for their
respective audits. The Committee meets with the internal and
independent auditors, with and without management present, to
discuss the results of their examinations, their evaluations of
the Companys internal controls, and the overall quality of
the Companys financial reporting. The Committee further
discussed those items contained in NYSE Listing
Rules Section 303(A)(6) and otherwise complied with
the obligations stated therein. The Committee held five meeting
during fiscal year 2006.
In reliance on the reviews and discussions referred to above,
the Audit Committee recommended to the Board of Directors, and
the Board has approved, that the audited financial statements be
included in the Companys Annual Report on
Form 10-K
for the year ended December 31, 2006 for filing with the
Securities and Exchange Commission. The Audit Committee has
selected Ernst & Young LLP as the Companys
independent auditors for 2007, with this selection to be
ratified by the shareholders.
ROBERT T. JOHNSON, CHAIRMAN
J. HICKS LANIER
LARRY L. PRINCE
JAMES D. EDWARDS
FORM 10-K
The Crawford & Company Annual Report on
Form 10-K
for 2006, filed with the Securities and Exchange Commission, is
available free of charge upon written request to the Secretary,
Crawford & Company, P.O. Box 5047, Atlanta,
Georgia 30302 and on the Companys web site
www.crawfordandcompany.com.
SHAREHOLDER
PROPOSALS
Any shareholder proposal to be presented at the 2008 Annual
Meeting of the Shareholders must be received by the Company no
later than November 29, 2007 for inclusion in the proxy
statement for that meeting in accordance with
Rule 14a-8
under the Securities Exchange Act of 1934. Pursuant to
Rule 14a-4
under the Securities Exchange Act of 1934 and the By-laws of the
Company, the Board of Directors may exercise discretionary
voting authority at the 2008 Annual Meeting under proxies it
solicits to vote on a proposal made by a shareholder that the
shareholder does not seek to include in the Companys proxy
statement pursuant to
Rule 14a-8,
unless the Company is notified about the proposal prior to
November 29, 2007 and the shareholder satisfies the other
requirements of
Rule 14a-4(c).
OTHER
MATTERS
The minutes of the Annual Meeting of Shareholders held on
May 2, 2006 will be presented at the Annual Meeting, but it
is not intended that action taken under the Proxy will
constitute approval of the matters referred to in such minutes.
The Board of Directors knows of no other matters to be brought
before the Annual Meeting. If any other matters come before this
meeting, however, the persons named in the Proxy will vote such
Proxy in accordance with their judgment on such matters.
32
EXPENSES
OF SOLICITATION
The cost of solicitation of proxies will be borne by the
Company. In an effort to have as large a representation at the
Annual Meeting as possible, special solicitation of proxies may,
in certain instances, be made personally, or by telephone,
electronic mail or by mail by one or more employees of the
Company. The Company may also reimburse brokers, banks, nominees
or other fiduciaries for the reasonable clerical expenses of
forwarding the proxy material to their principals, the
beneficial owners of the Companys Class A or
Class B Common Stock.
March 28, 2007
33
APPENDIX A
CRAWFORD &
COMPANY
2007 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
Section 1. Plan
Established. Crawford & Company, a
Georgia corporation, hereby adopts as of the 14th day of
March, 2007, this 2007 Non-Employee Director Stock Option Plan,
pursuant to which Non-Employee Directors of the Company shall be
granted Options to purchase shares of the Class A Common
Stock of the Company; provided that no Option shall be granted
under the Plan until shareholder approval of the Plan has been
obtained and provided further that the Plan will terminate if
shareholder approval is not received for the Plan within twelve
(12) months after the date first written above.
Section 2. Purpose
of Plan. The purpose of the Plan is to strengthen
the Company by providing to Non-Employee Directors added
incentives for high levels of performance and to encourage stock
ownership in the Company on a basis consistent with that
provided to key employees, including employee directors, under
the Companys stock option and stock purchase plans. The
Plan seeks to accomplish these goals by providing a means
whereby these Non-Employee Directors shall be given an
opportunity to purchase, by way of option, shares of Stock of
the Company.
Section 3. Definitions:
(a) Board means the Board of Directors
of the Company.
(b) Code means the Internal Revenue Code
of 1986, as amended.
(c) Company means Crawford &
Company, a Georgia corporation and any successor to such
corporation.
(d) Fair Market Value means the closing
price for a share of Stock on the New York Stock Exchange (or if
Stock is no longer traded on the New York Stock Exchange, on the
exchange or quotation system which reports or quotes the closing
price for a share of Stock) as accurately reported for any date
(or, if no shares of Stock are traded on such date, for the
immediately preceding date on which shares of Stock were traded)
by The Wall Street Journal (or if The Wall Street
Journal no longer reports such price, in a newspaper or
trade journal selected by the Board).
(e) Non-Employee Director means any
member of the Board who is not, at the time of grant of an
Option, an employee or officer of the Company.
(f) Option means any option awarded
under this Plan.
(g) Optionee means any Non-Employee
Director awarded an Option.
(h) Plan means this Crawford &
Company 2007 Non-Employee Director Stock Option Plan, as amended
from time to time.
(i) Stock means the Class A Common
Stock of the Company.
Section 4. Eligibility. Each
Non-Employee Director shall be eligible to and shall receive
Options on (i) the day of the shareholder meeting of the
Company at which the Plan is approved for all Non-Employee
Directors elected or re-elected to the Board at that meeting;
(ii) the day of first election to the Board for all
individuals who are not members of the Board on the date of
shareholder approval of the Plan; and (iii) on the day of
each annual meeting of the shareholders of the Company following
shareholder approval of the Plan and in which the Non-Employee
Director is re-elected to the Board.
Section 5. Grant
of Options. Options shall be granted for the
indicated number of shares of Stock to each eligible
Non-Employee Director as follows:
(i) 15,000 shares on the day of first election to the
Board; and
(ii) 3,000 shares on the day of re-election to the
Board after shareholder approval of the Plan.
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Section 6. Shares Subject
to the Plan. The maximum aggregate number of
shares in respect to which Options may be granted is
450,000 shares of Stock. The maximum aggregate number of
shares is subject, however, to increase or decrease pursuant to
the provisions of Section 13. If any Option will terminate
for any reason without having been exercised in full, the shares
applicable to the unexercised portion of the Option will become
available for other Options under this Plan, unless the Plan is
then terminated.
Section 7. Term
of Plan. The Plan will continue for a period of
ten (10) years from the date upon which it is approved by
the Shareholders of the Company; provided, however, that the
Board or Shareholders may terminate the Plan at any time within
their absolute discretion. No such termination, other than as
provided for in Section 14, will in any way affect any
Option then outstanding.
Section 8. Option
Price. The option price of the shares under each
Option shall be the Fair Market Value of the shares on the date
of the grant of the Option.
Section 9. Exercise
of Options. Each Option shall be exercisable at
any time after grant and before termination in accordance with
Sections 11 and 14 by delivery to the Companys
Corporate Secretary of a notice of exercise, together with
payment in accordance with Section 10.
Section 10. Payment
of the Option Price.
(a) Full payment of the option price for the number of
shares specified in the notice of exercise delivered pursuant to
Section 9 shall accompany such notice of exercise.
(b) The option price may be paid (i) in cash or
certified check; (ii) by delivery to the Company of shares
of Stock with a Fair Market Value on the exercise date equal to
the option price; or (iii) by any combination of
(i) or (ii).
Section 11. Termination
of the Option. Subject to Section 14, each
Option shall terminate on:
(i) the date on which the Optionee is no longer a
Non-Employee Director, but only if such date occurs prior to the
fifth anniversary of the grant date of the Option; or
(ii) if the Optionee remains a Non-Employee Director
through the fifth anniversary of the grant date of the Option,
on the tenth anniversary of the grant date of the Option.
Section 12. Non-Transferable.
No Option will be assignable or transferable except by will or
by laws of descent and distribution. Any other attempted
assignment or transfer, or any attempted pledge, hypothecation
or other disposition of, or levy of any execution, attachment or
similar process upon any Option will be null and void and
without effect. During the lifetime of an Optionee, the Option
will be exercisable only by the Optionee.
Section 13. Change
in Capitalization. If the outstanding shares of
Stock are increased, decreased, or changed into, or exchanged
for a different number or kind of shares or securities of the
Company, without receipt of consideration by the Company,
through reorganization, merger, recapitalization,
reclassification, stock split, stock dividend, stock
consolidation, or otherwise, an adjustment will be made in the
number and kind of shares as to which Options may be granted and
a corresponding adjustment changing the number or kind of shares
and the exercise price per share allocated to unexercised
Options, or portions thereof, which will have been granted prior
to any such change will likewise be made. Any such adjustment,
however, in an outstanding Option will be made without change in
the total price applicable to the unexercised portion of the
Option, but with a corresponding adjustment in the number of
shares and price for each share subject to the Option.
Adjustments under this Section will be limited to and be on the
same basis as those made under the Companys 1997 Key
Employee Stock Option Plan. No fractional shares of Stock will
be issued under the Plan on account of any such adjustment.
Section 14. Mergers
or Consolidations. Not less than thirty
(30) days prior to the dissolution or liquidation of the
Company or a reorganization, merger or consolidation of the
Company with one or more corporations as a result of which the
Company will not be the surviving or resulting corporation, or a
sale of substantially all of the assets of the Company to
another person, or a reverse merger in which the Company is the
surviving corporation but the shares of the Stock outstanding
immediately preceding the merger are to be converted by virtue
of the merger to other property (a Terminating
Event), the Board shall notify each Optionee of the
pendency of the Terminating Event. Upon the date thirty
(30) days after delivery of the notice, any Option or
portion thereof not exercised will
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terminate, and upon the effective date of the Terminating Event,
the Plan will terminate, unless provision is made in connection
with the Terminating Event for assumption of Options previously
granted, or substitution for such Options of new options
offering stock of a successor employer corporation, or a parent
or subsidiary corporation thereof, solely at the option of the
successor corporation or parent or subsidiary corporation, with
appropriate adjustments as to the number and kind of shares and
prices.
Section 15. Disposition
of Shares. Any Optionee who acquires Stock
pursuant to an Option will, so long as he or she remains a
member of the Board, be obligated to advise the Company in the
case of each sale or other disposition of any Stock so acquired,
such advice to be given to the Companys Corporate
Secretary immediately upon the occurrence of any such sale or
other disposition.
Section 16. Option
Certificate. Each Option granted will be
evidenced by a written Option Certificate executed on behalf of
the Company in the form attached as Exhibit A hereto.
Section 17. Amendment
of Plan and Options. The Board may only make
changes in the Plan with the approval of the shareholders of the
Company, other than changes required by the Code, federal
securities laws, or rules and regulations promulgated
thereunder. No change in the terms and conditions of any Option
may be made without the consent of the Optionee.
Section 18. Applicable
Law; Severability; Interpretation. The Plan will
be construed, administered, and governed in all respects in
accordance with the laws of the State of Georgia. If any
provision of the Plan will be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining
provisions of the Plan will continue to be fully effective. For
purposes of this Plan, references to the masculine shall include
the feminine, reference to the singular shall include the
plural, and references to the plural shall include the singular.
Section 19. Shares Reserved.
The Company shall at all times during the term of the Plan
reserve and keep available the number of shares of Stock as will
be sufficient to satisfy the requirements of the Plan, and will
pay all fees and expenses necessarily incurred by the Company in
connection therewith.
Section 20. No
Shareholder Rights. No Optionee shall have any
rights as a shareholder of the Company as a result of the grant
of an Option to him or her under this Plan or his or her
exercise of such Option pending the actual delivery of Stock
subject to such Option to such Optionee.
Section 21. Titles.
Titles are provided in this Plan for convenience only and are
not to serve as a basis for interpretation or construction of
the Plan.
On this 14th day of March, 2007, I hereby certify that the
foregoing Plan was duly adopted by the Executive Committee of
the Board of Directors on this date.
Allen W. Nelson
Corporate Secretary
(Corporate Seal)
On this day of May, 2007, I hereby
certify that the foregoing Plan was duly approved by the
shareholders on May , 2007.
Allen W. Nelson
Corporate Secretary
(Corporate Seal)
A-3
APPENDIX B
CRAWFORD &
COMPANY
2007 MANAGEMENT TEAM INCENTIVE COMPENSATION PLAN
This 2007 Management Team Incentive Compensation Plan (the
Plan) of Crawford & Company (the
Company) authorizes the grant of annual incentive
and long-term incentive awards to executive officers and sets
forth certain terms and conditions of such Awards. The purpose
of the Plan is to help the Company attract and retain executive
officers of outstanding ability and to motivate such persons to
exert their greatest efforts on behalf of the Company and its
subsidiaries by providing incentives directly linked to the
measures of the financial success and performance of the Company
and its businesses. The Plan is intended to permit the Committee
to qualify certain Awards as performance-based
compensation under Code Section 162(m).
In addition to the terms defined in Section 1 and elsewhere
in the Plan, the following are defined terms under this Plan:
(a) Annual Incentive Award means an
Award earned based on performance in a Performance Period of one
fiscal year or a portion thereof.
(b) Award means the amount of a
Participants Award Opportunity in respect of a Performance
Period determined by the Committee to have been earned, and the
Participants rights to current or future payments in
settlement thereof.
(c) Award Opportunity means the
Participants opportunity to earn specified amounts based
on performance during a Performance Period. An Award Opportunity
constitutes a conditional right to receive settlement of an
Award.
(d) Code means the Internal Revenue Code
of 1986, as amended from time to time. References to any
provision of the Code include and successor provisions thereto
and regulations thereunder.
(e) Committee means the
Nominating/Corporate Governance/Compensation Committee of the
Board of Directors, or such other Board committee as the Board
may designate to administer the Plan.
(f) Covered Employee means a person
designated by the Committee as likely, with respect to a given
fiscal year of the Company, to be the Chief Executive Officer or
one of the other persons who will be named executive officers
whose compensation potentially will be subject to the
limitations on tax deductibility under Code Section 162(m)
for that year (or a later year in which an Award may be
settled). This designation generally is required at the time an
Award Opportunity is granted. This designation generally is
required at the time an Award Opportunity is authorized. The
Committee may designate more than five persons as Covered
Employees with respect to a given year.
(g) Participant means an employee
participating in this Plan.
(h) Performance Goal means the Company,
business unit or individual performance objectives or
accomplishments required as a condition to the earning of an
Award Opportunity.
(i) Performance Period means the period,
specified by the Committee, over which an Award Opportunity may
be earned.
(j) Termination of Employment means the
termination of a Participants employment with the Company
or a subsidiary immediately after which the Participant is not
employed by the Company or any subsidiary.
B-1
(a) Administration by the Committee. The
Plan will be administered by the Committee, provided that the
Committee may condition any of its actions on approval or
ratification by the Board of Directors or the independent
directors of the Board. The Committee shall have full and final
authority to take all actions hereunder, subject to and
consistent with the provisions of the Plan. This authority
includes authority to correct any defect or supply any omission
or reconcile any inconsistency in the Plan and to construe and
interpret the Plan and any plan rules and regulations,
authorization of an Award Opportunity, Award, Award agreement,
or other document hereunder; and to make all other decisions and
determinations as may be required under the terms of the Plan or
as the Committee may deem necessary or advisable for the
administration of the Plan.
(b) Manner of Exercise of Authority. Any
action by the Committee or the Board with respect to the Plan
shall be final, conclusive, and binding on all persons,
including the Company, subsidiaries or affiliates, Participants,
any person claiming any rights under the Plan from or through
any Participant, and shareholders. The express grant of any
specific power to the Committee, and the taking of any action by
the Committee, shall not be construed as limiting any power or
authority of the Committee. A memorandum signed by all members
of the Committee shall constitute the act of the Committee
without the necessity, in such event, to hold a meeting. At any
time that a member of the Committee is not an outside
director as defined under Code Section 162(m), any
action of the Committee relating to an Award intended by the
Committee to qualify as performance-based
compensation within the meaning of Section 162(m) may
be taken by a subcommittee, designated by the Committee or the
Board, composed solely of two or more outside
directors. Such action shall be the action of the
Committee for purposes of the Plan. The foregoing
notwithstanding, no action of the Committee shall be void or
deemed beyond the authority of the Committee solely because, at
the time such action was taken, one or more members of the
Committee failed to qualify as an outside director.
The Committee may delegate to specified officers or employees of
the Company authority to perform administrative functions under
the Plan, to the extent permitted by law, provided that no such
delegation shall be permitted if it (i) would cause Awards
intended to qualify as performance-based compensation under Code
Section 162(m) to fail to so qualify, and (ii) would
result in a related-party transaction with an executive officer
required to be disclosed under Item 404(a) of
Regulation S-K
(in accordance with Instruction 5.a.ii thereunder) under
the Securities Exchange Act of 1934.
(c) Limitation of Liability. Each member
of the Committee and the Board of Directors, and any person to
whom authority or duties are delegated hereunder, shall be
entitled to, in good faith, rely or act upon any report or other
information furnished to him or her by any officer or other
employee of the Company or any subsidiary, the Companys
independent certified public accountants, or any executive
compensation consultant, legal counsel, or other professional
retained by the Company to assist in the administration of the
Plan. No member of the Board or Committee, nor any person to
whom authority or duties are delegated hereunder, shall be
personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the
Plan, and any such person shall, to the extent permitted by law,
be fully indemnified and protected by the Company with respect
to any such action, determination, or interpretation.
Employees of the Company or any subsidiary who are or may become
executive officers of the Company may be selected by the
Committee as eligible to participate in this Plan.
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5.
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PER-PERSON
AWARD LIMITATION
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Award Opportunities granted to any one eligible employee shall
be limited such that the amount that may be potentially earned
under the Plan for performance in any one calendar year shall
not exceed the Participants Annual Limit. For this
purpose, the Annual Limit shall equal $10 million plus the
amount of the Participants unused Annual Limit as of the
close of the previous fiscal year. For this purpose,
(i) potentially earned means that, if the Performance
Goal or Goals are satisfied in that year, the Award Opportunity
is no longer subject to further risk of forfeiture related to
performance, without regard to whether it is to be paid
currently or on a deferred basis or continues to be subject to
any service requirement or other non-performance condition, and
(ii) a Participants
B-2
Annual Limit is used to the extent an amount may be potentially
earned under an Award, regardless of whether such amount is in
fact earned or paid.
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6.
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DESIGNATION
AND EARNING OF AWARD OPPORTUNITIES
|
(a) Designation of Award Opportunities and Performance
Goals. The Committee shall select employees to
participate in the Plan and shall designate the Performance
Period and, for each such Participant, the Award Opportunity
such Participant may earn for such Performance Period, the
nature of the Performance Goal the achievement of which will
result in the earning of the Award Opportunity, and the levels
of earning of the Award Opportunity corresponding to the levels
of achievement of the Performance Goal. The following terms will
apply to Award Opportunities:
(i) Specification of Amount Potentially
Earnable. Unless otherwise determined by the
Committee, the Award Opportunity earnable by each Participant
shall range from 0% to a specified maximum percentage of a
specified target Award Opportunity. The Committee shall specify
a table, grid, formula, or other information that sets forth the
amount of a Participants Award Opportunity that will be
earned corresponding to the level of achievement of a specified
Performance Goal.
(ii) Denomination of Award Opportunity; Payment of
Award. Award Opportunities will be denominated in
cash and Awards will be payable in cash, except that the
Committee may denominate an Award Opportunity in shares of any
class of the Companys common Stock
and/or to
settle an Award Opportunity in shares of such Common Stock if
and to the extent that shares of the Companys Common Stock
are authorized for use in incentive awards and available under
the Executive Stock Bonus Plan or another Company compensation
plan (approved by shareholders to the extent required under
applicable rules of the New York Stock Exchange).
(b) Limitations on Award Opportunities and Awards for
Covered Employees. If the Committee determines
that an Award Opportunity to be granted to an eligible person
who is designated a Covered Employee by the Committee should
qualify as performance-based compensation for
purposes of Code Section 162(m), the following provisions
will apply:
(i) Performance Goal. The Performance
Goal for such Award Opportunities shall consist of one or more
business criteria and a targeted level or levels of performance
with respect to each of such criteria, as specified by the
Committee consistent with this Section 6(b). The
Performance Goal shall be objective and shall otherwise meet the
requirements of Code Section 162(m) and regulations
thereunder (including Treasury Regulation
§ 1.162-27(e) and successor regulations thereto),
including the requirement that the level or levels of
performance targeted by the Committee result in the achievement
of performance goals being substantially uncertain.
The Committee may determine that the Award Opportunity will be
earned, or tentatively earned, based upon achievement of any one
measure of performance or that two or more measures of
performance must be achieved. The Committee may establish a
gate-keeper Performance Goal that conforms to this
Section 6(b) while specifying or considering other types of
performance (which need not meet the requirements of this
Section 6(b)) as a basis for reducing the amount of the
Award deemed earned upon achievement of the gate-keeper
Performance Goal. Performance Goals may differ for Award
Opportunities granted to any one Participant or to different
Participants.
(ii) Business Criteria. One or more of
the following business criteria for the Company, on a
consolidated basis,
and/or for
specified subsidiaries or affiliates or other business units of
the Company shall be used by the Committee in establishing the
Performance Goal for such Award Opportunities: (1) Revenues
growth or revenues, including revenues from specified sources
(e.g., fee revenues) or by specified business units or sales
forces, and including revenues above a specified hurdle;
(2) gross profit or pre-tax profit; (3) operating
earnings, pre-tax income, earnings before or after taxes,
earnings before or after minority interests, earnings before or
after interest, depreciation, amortization, or extraordinary or
special items; (4) net income or net income per common
share (basic or fully diluted); (5) return measures,
including, but not limited to, return on assets (gross or net),
return on investment, return on capital, or return on equity;
(6) cash flow, free cash flow, cash flow return on
investment (discounted or otherwise), operating cash flow, net
cash provided by operating activities, or cash flow in excess of
cost of capital; (7) interest expense after taxes;
(8) economic value created
B-3
or economic profit; (9) operating margin or profit margin;
(10) shareholder value creation measures, including but not
limited to stock price or total shareholder return;
(11) revenues from specific assets, projects or lines of
business; (12) targets relating to expense or operating
expense, working capital targets, or operating efficiency; and
(13) strategic business criteria, consisting of one or more
objectives based on meeting specified goals relating to client
satisfaction, market penetration, market share, geographic
business expansion, operating goals, cost targets, employee
satisfaction, human resources management, supervision of
litigation and information technology, and acquisitions or
divestitures of assets, subsidiaries, affiliates or joint
ventures. The targeted level or levels of performance with
respect to such business criteria may be established at such
levels and in such terms as the Committee may determine, in its
discretion, including in absolute terms, as a goal relative to
performance in prior periods (e.g., growth in the performance
measure), or as a goal compared to the performance of one or
more comparable companies or businesses or an index covering
multiple companies or an industry.
(iii) Performance Period and Timing for Establishing
Performance Goals. The Committee will specify the
Performance Period over which achievement of the Performance
Goal in respect of such Award Opportunities shall be measured. A
Performance Goal shall be established by the date which is the
earlier of (A) 90 days after the beginning of the
applicable Performance Period or (B) the time 25% of such
Performance Period has elapsed.
(iv) Annual Incentive Awards Granted to Covered
Employees. The Committee may grant an Annual
Incentive Award, intended to qualify as performance-based
compensation for purposes of Code Section 162(m), to
an eligible person who is designated a Covered Employee for a
given fiscal year.
(v) Changes to Amounts Payable and Other Award
Terms. Any acceleration of earning or settlement,
deferral of settlement, or other event that would change the
risk of forfeiture, performance period, or form or timing of
payment from that originally specified shall be implemented in a
manner such that the Award does not, solely for that reason,
fail to qualify as performance-based compensation
for purposes of Code Section 162(m).
(c) Additional Participants and Award Opportunity
Designations During a Performance Period. At any
time during a Performance Period the Committee may select a new
employee or a newly promoted employee to participate in the Plan
for that Performance Period
and/or
designate, for any such Participant, an Award Opportunity (or
additional Award Opportunity) amount for such Performance
Period. In determining the amount of the Award Opportunity for
such Participant under this Section 6(c), the Committee may
take into account the portion of the Performance Period already
elapsed, the performance achieved during such elapsed portion of
the Performance Period, and such other considerations as the
Committee may deem relevant.
(d) Determination of Award. Within a
reasonable time after the end of each Performance Period, the
Committee shall determine the extent to which the Performance
Goal for the earning of Award Opportunities was achieved during
such Performance Period and the resulting Award to the
Participant for such Performance Period. The Committee may
adjust upward or downward the amount of an Award, in its sole
discretion, in light of such considerations as the Committee may
deem relevant, except that (i) no such discretionary upward
adjustment of the Award to a level exceeding the level of actual
earning of the Award Opportunity (i.e., based on actual
achievement of the Performance Goal subject Section 6(b))
is permitted, and (ii) any discretionary adjustment is
subject to Section 5, Section 8 and other applicable
limitations of the Plan. Unless otherwise determined by the
Committee or as provided under Section 8(a), the Award
shall be deemed earned and vested at the time the Committee
makes the determination pursuant to this Section 6(d), and
no Participant shall have a legal right to receive an Award
until such determination has been made.
(e) Written
Determinations. Determinations by the Committee
as to the establishment of Performance Goals, the amount
potentially payable in respect of Award Opportunities, the level
of actual achievement of the Performance Goals and the amount of
any final Award earned shall be recorded in writing in the case
of Performance Awards intended to qualify under
Section 162(m). Specifically, the Committee shall certify
in writing, in a manner conforming to applicable regulations
under Section 162(m), with respect to any Covered Employee
prior to any settlement of each such Award, that the Performance
Goal relating to the Award and other material terms of the Award
upon which settlement was conditioned have been satisfied.
B-4
(f) Other Terms of Award Opportunities and
Awards. Subject to the terms of this Plan, the
Committee may specify the circumstances in which Award
Opportunities and Awards shall be paid or forfeited in the event
of a change in control, Termination of Employment, or other
event prior to the end of a Performance Period or settlement of
an Award, provided that, without the consent of an affected
Participant, a change to a previously specified term, if such
change is materially adverse to the Participant, is authorized
only to the extent the Committee preserved its discretion to
make such change. With respect to Award Opportunities and Awards
under Section 6(b), any payments resulting from a change in
control or Termination of Employment need not qualify as
performance-based compensation under Section 162(m) if the
authorization of such non-qualifying payments would not
otherwise disqualify the Award Opportunity or Award from
Section 162(m) qualification in cases in which no change in
control or Termination of Employment occurred.
(g) Adjustments. The Committee is
authorized to make adjustments in the terms and conditions of,
and the criteria included in, Award Opportunities and related
Performance Goals in recognition of unusual or nonrecurring
events, including stock splits, stock dividends,
reorganizations, mergers, consolidations, large, special and
non-recurring dividends, and acquisitions and dispositions of
businesses and assets, affecting the Company and its
subsidiaries or other business unit, or the financial statements
of the Company or any subsidiary, or in response to changes in
applicable laws, regulations, accounting principles, tax rates
and regulations or business conditions or in view of the
Committees assessment of the business strategy of the
Company, any subsidiary or affiliate or business unit thereof,
performance of comparable organizations, economic and business
conditions, personal performance of a Participant, and any other
circumstances deemed relevant; provided, however, that no such
adjustment shall be authorized or made if and to the extent that
the existence or exercise of such authority (i) would cause
an Award Opportunity or Award granted under Section 6(b)
and intended to qualify as performance-based
compensation under Code Section 162(m) and
regulations thereunder to otherwise fail to so qualify, or
(ii) would cause the Committee to be deemed to have
authority to change the targets, within the meaning of Treasury
Regulation 1.162-27(e)(4)(vi),
under the Performance Goals relating to an Award Opportunity
under Section 6(b) intended to qualify as
performance-based compensation under Code
Section 162(m) and regulations thereunder. In the event of
an equity restructuring, as defined in Statement of Financial
Accounting Standards 123R, which affects the Common Stock, a
Participant shall have a legal right to an adjustment to the
Participants Award Opportunity
and/or Award
(including any performance goal based on market price per share
and any Award Opportunity or Award denominated in Common Stock)
which shall preserve without enlarging the value of the Award
Opportunity or Award, with the manner of such adjustment to be
determined by the Committee in its discretion, and subject to
any limitation on this right set forth at the time of initial
authorization of the Award Opportunity in any document or
controlling pronouncement of the Committee limiting this right.
(a) Deferrals. The Committee may specify,
at the time the Award Opportunity is authorized, that an Award
will be deferred as to settlement after it is earned. In
addition, a Participant will be permitted to elect to defer
settlement of an Award if and to the extent such Participant is
selected to participate in a Company deferral program covering
such Awards and the Participant has made a valid deferral
election in accordance with that plan. Deferrals must comply
with applicable requirements of Section 409A of the Code.
(b) Settlement of Award. Any non-deferred
Award shall be paid and settled by the Company within
60 days after the date of determination by the Committee
under Section 6(d) hereof. With respect to any deferred
amount of a Participants Award, such amount will be
credited to the Participants deferral account under the
governing deferral plan of the Company as promptly as
practicable at or after the date of determination by the
Committee under Section 6(d) hereof.
(c) Tax Withholding. The Company shall
deduct from any payment in settlement of a Participants
Award or other payment to the Participant any Federal, state, or
local withholding or other tax or charge which the Company is
then required to deduct under applicable law with respect to the
Award. The Committee may specify other withholding terms
relating to an Award that will be settled by delivery of shares
of Common Stock or other property.
(d) Non-Transferability. An Award
Opportunity, any resulting Award, including any deferred cash
amount resulting from an Award, and any other right hereunder
shall be non-assignable and non-transferable, and shall not
B-5
be pledged, encumbered, or hypothecated to or in favor of any
party or subject to any lien, obligation, or liability of the
Participant to any party other than the Company or a subsidiary
or affiliate.
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8.
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EFFECT OF
TERMINATION OF EMPLOYMENT.
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Except to the extent set forth in subsections (a) and
(b) of this Section 8 and subject to
Section 6(f), upon a Participants Termination of
Employment prior to completion of a Performance Period or, after
completion of a Performance Period but prior to the
Committees determination of the extent to which an Award
has been earned for such Performance Period, the
Participants Award Opportunity relating to such
Performance Period shall cease to be earnable and shall be
canceled, and the Participant shall have no further rights or
opportunities hereunder:
(a) Disability or Death. If Termination
of Employment of the Participant is due to the
Participants permanent disability or death, the
Participant or his or her beneficiary shall be deemed to have
earned and shall be entitled to receive an Award for any
Performance Period for which Termination occurs prior to the
date of determination under Section 6(d) hereof equal to
the Award which would have been earned had Participants
employment not terminated multiplied by a fraction the numerator
of which is the number of calendar days from the beginning of
the Performance Period to the date of Participants
Termination of Employment and the denominator of which is the
number of calendar days in the Performance Period (but such
fraction shall in no event be greater than one). Such pro rata
Award will be determined at the same time as Awards for
continuing Participants are determined (i.e., normally following
the end of the Performance Period in accordance with
Section 6(d) hereof). Upon its determination, such pro rata
Award shall be paid and settled promptly in cash, except to the
extent the settlement has been validly deferred in accordance
with Section 7(a). The portion of the Participants
Award Opportunity not earned will cease to be earnable and will
be canceled. For purposes of the Plan, the existence of a
permanent disability shall be determined by, or in
accordance with criteria and standards adopted by, the
Committee. The foregoing notwithstanding, the Committee may
limit or expand the Participants rights upon disability or
death with respect to a given Award Opportunity.
(b) Other Terminations. In connection
with any Termination of Employment other than due to death or
disability, the Committee may determine that the Participant
shall be deemed to have earned none, a portion, or all of an
Award Opportunity for a Performance Period for which the
Committee has not yet determined the extent to which an Award
has been earned, in the Committees sole discretion. This
determination may be specified at the time the Award Opportunity
is established or made at any time thereafter, subject to
Section 6(f).
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9.
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ADDITIONAL
FORFEITURE PROVISIONS APPLICABLE TO AWARDS.
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(a) General. The Committee may impose as a condition
of Award Opportunities and Awards, and as a condition of a
Participants right to receive or retain cash, Stock, or
other property in connection with an Award,
(i) requirements that the Participant comply with specified
conditions relating to non-competition, confidentially of
information relating to or possessed by the Company,
non-solicitation of customers, suppliers, and employees of the
company, cooperation in litigation, non-disparagement of the
Company and its subsidiaries and affiliates and the officers,
directors and affiliates of the Company and its subsidiaries and
affiliates, and other restrictions upon or covenants of the
Participant, including during specified periods following
Termination of Employment or service to the Company, and
(ii) requirements that, if any such amounts were earned
based on performance that is thereafter adversely affected by a
restatement of financial statements or financial information,
that such amounts shall be subject to forfeiture as specified by
the Committee. Any forfeiture or related provisions authorized
under this Section 9 shall be specified as a term of the
Award by the Committee not later than the expiration of 25% of
the relevant Performance Period, except as consented to by the
Participant.
(b) Forfeitures Resulting from Financial Reporting
Misconduct. Unless otherwise provided by the
Committee under Section 9(a), if the Company is required to
prepare an accounting restatement due to the material
noncompliance of the Company, as a result of misconduct, with
any financial reporting requirement under the securities laws,
and if a Participant, knowingly or through gross negligence,
caused or failed to prevent such misconduct, the Participant
(i) shall forfeit any Award Opportunity or Award that was
or would be deemed to be earned in whole or in part based on
performance during either the period covered by the noncompliant
financial
B-6
report or during the
12-month
period following the first public issuance or filing with the
Securities and Exchange Commission (whichever first occurs) of
the non-compliant financial report; and (ii) shall forfeit
any other Award that was granted hereunder during the
12-month
period following such first public issuance or filing of the
non-compliant financial report and thereafter until the
accounting restatement correcting such non-compliant financial
report has been filed. For purposes of this Section 9(b),
(A) if an Award subject to forfeiture has become vested or
settled, the Participant will be liable to repay the net gain he
or she realized from the Award, and (B) the term
misconduct and other terms shall have meanings and
be interpreted in a manner consistent with the meanings and
interpretation of such terms under Section 304 of the
Sarbanes-Oxley Act of 2002.
(a) Changes to this Plan. The Committee
may at any time amend, alter, suspend, discontinue, or terminate
this Plan without the consent of shareholders or Participants;
provided, however, that any such action beyond the scope of the
Committees authority shall be subject to the approval of
the Board of Directors; provided further, that any such action
shall be submitted to the Companys shareholders for
approval not later than the earliest annual meeting for which
the record date is at or after the date of such Committee or
Board action if such shareholder approval is required by any
federal or state law or regulation or the rules of the New York
Stock Exchange or any other stock exchange or automated
quotation system on which the Stock may then be listed or
quoted, and the Board may otherwise, in its discretion,
determine to submit other amendments to the Plan to shareholders
for approval; and provided further, that, without the consent of
an affected Participant, no such Committee or Board action may
materially and adversely affect the legal rights of such
Participant under any outstanding Award (this restriction does
not apply to an Award Opportunity, however, which remains
subject to the discretion of the Committee).
(b) Long-Term Incentives Not Annual Bonus for Purposes
of Other Plans. Amounts earned or payable under
the Plan in connection with Awards not designated by the
Committee as Annual Incentive Awards shall not be
deemed to be annual incentive or annual bonus compensation
(regardless of whether an Award is earned in respect of a period
of one year or less or disclosed as annual bonus compensation
under Securities and Exchange Commission disclosure rules) for
purposes of any retirement or supplemental pension plan of the
Company or any employment agreement or change in control
agreement between the Company and any Participant, or for
purposes of any other plan, unless the Company shall in writing
specifically identify this Plan by name and specify that amounts
earned or payable hereunder shall be considered to be annual
incentive or annual bonus compensation.
(c) Unfunded Status of Participant
Rights. Awards, accounts, deferred amounts, and
related rights of a Participant represent unfunded deferred
compensation obligations of the Company for ERISA and federal
income tax purposes and, with respect thereto, the Participant
shall have rights no greater than those of an unsecured creditor
of the Company.
(d) Nonexclusivity of the Plan. The
adoption of this Plan shall not be construed as creating any
limitations on the power of the Board or Committee to adopt such
other compensation arrangements as it may deem desirable for any
Participant.
(e) No Right to Continued
Employment. Neither the Plan, the authorization
of an Award Opportunity, the grant of an Award nor any other
action taken hereunder shall be construed as giving any employee
the right to be retained in the employ of the Company or any of
its subsidiaries or affiliates, nor shall it interfere in any
way with the right of the Company or any of its subsidiaries or
affiliates to terminate any employees employment at any
time.
(f) Severability. The invalidity of any
provision of the Plan or a document hereunder shall not deemed
to render the remainder of this Plan or such document invalid.
(g) Successors. The Company shall require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise, and whether or not the corporate
existence of the Company continues) to all or substantially all
of the business
and/or
assets of the Company to expressly assume and agree to perform
the Companys obligations under the Plan in the same manner
and to the same extent that the Company would be required to
perform it if no such succession had taken place; provided,
however, that such successor may replace the Plan with a plan
substantially equivalent in opportunity and achievability, as
determined by a nationally recognized compensation consulting
firm, and covering the participants at the time of such
succession. Any successor and the
B-7
ultimate parent company of such successor shall in any event be
subject to the requirements of this Section 10(g) to the
same extent as the Company. Subject to the foregoing, the
Company may transfer and assign its rights and obligations
hereunder.
(h) Governing Law. The validity,
construction, and effect of the Plan and any rules and
regulations or document hereunder shall be determined in
accordance with the laws of the State of Georgia, without giving
effect to principles of conflicts of laws, and applicable
provisions of federal law.
(i) Effective Date of Plan; Shareholder Approval;
Termination of Plan. This Plan shall be effective
as of March , 2007. The Company shall submit
the Plan, including the material terms of the Plan specified in
Treasury Regulation § 1.162-27(e)(4), to shareholders
for approval at the Companys 2007 Annual Meeting of
Shareholders, and the Plan shall be terminated without any Award
being deemed earned in the event shareholders decline to approve
it at that Annual Meeting. If approved by shareholders, the Plan
will terminate at such time as may be determined by the Board of
Directors or the Committee (provided that reapproval of the
business criteria specified in Section 6(b)(ii) may be
required under Code Section 162(m) every five years in
order for compensation to Covered Employees thereafter to be
fully deductible).
B-8
CRAWFORD &
COMPANY
PROXY
Annual Meeting of
Shareholders To Be Held May 3, 2007. This Proxy is
Solicited by the Board of Directors.
The
undersigned hereby appoints T. W. Crawford, W. B. Swain and A.
W. Nelson, and each of them, proxies with full power of
substitution, for and in the name of the undersigned, to vote
all shares of Class B Common Stock of Crawford &
Company which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Shareholders of
Crawford & Company to be held in the Home Office
Building of Crawford & Company, 5620 Glenridge Drive,
N.E., Atlanta, Georgia on May 3, 2007 at 2:00 P.M.,
and at any adjournment or postponement thereof, upon the matters
described in the accompanying Notice of Annual Meeting and Proxy
Statement and upon any other business that may properly come
before the meeting or any adjournment or postponement thereof,
hereby revoking any proxy heretofore executed by the undersigned
to vote at said meeting. Said proxies are directed to vote on
the matters described in the accompanying Proxy Statement as
follows, and otherwise in their discretion:
THE BOARD
UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSALS 1,
2, 3 AND 4. AND AGAINST PROPOSAL 5.
1. Proposal
to elect the nine (9) nominees listed below as Directors
(except as indicated to the contrary below).
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o
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FOR
all
nominees listed below
(except as indicated to the contrary)
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o
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WITHHOLD
AUTHORITY to vote for all
nominees listed below
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NOMINEES: J.
H. Lanier, J. C. Crawford, L. L. Prince, E. J. Wood, III, C. H.
Ridley, R. T. Johnson, J. D. Edwards, T. W. Crawford, and P. G.
Benson.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write the name of nominee in the space provided below)
2. Proposal
to approve the adoption of the Crawford & Company 2007
Non-Employee Director Stock Option Plan.
o FOR o AGAINST o ABSTAIN
3. Proposal
to approve the adoption of the Crawford & Company 2007
Management Team Incentive Compensation Plan.
o FOR o AGAINST o ABSTAIN
4. Proposal
to approve the ratification of Ernst & Young LLP as the
independent auditors of the Company for the 2007 fiscal year.
o FOR o AGAINST o ABSTAIN
5. Shareholder
Proposal entitled the Maximize Value Resolution.
o FOR o AGAINST o ABSTAIN
THIS
PROXY WILL BE VOTED AS DIRECTED ABOVE, OR IF NO DIRECTION IS
INDICATED,
WILL
BE VOTED IN ACCORDANCE WITH THE BOARDS RECOMMENDATIONS AS
SET FORTH ABOVE.
The
undersigned acknowledges receipt with this Proxy of a copy of
the Notice of Annual Meeting of Shareholders and the Proxy
Statement dated March 28, 2007.
Dated:
_
_,
2007
Signature of Shareholder
IMPORTANT:
Please
date this Proxy and sign exactly as your name or names appear
hereon. If shares are held jointly, signatures should include
both names. Executors, administrators, trustees, guardians and
others signing in a representative capacity, please give your
full title. If a corporation, please sign in full corporate name
by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.