This excerpt taken from the SMG DEF 14A filed Dec 19, 2008.
Approval of Retention Awards to NEOs
On October 8, 2008, the Compensation Committee approved an amendment to the ERP to authorize grants of discretionary retention awards under the ERP. Following its approval of this amendment, the Compensation Committee approved the granting of retention awards to certain key management employees of the Company, including Mr. Evans, Mr. Sanders and Ms. Stump. Consistent with the terms of the ERP, each executive officer who was granted a retention award has the right to elect an investment fund, including a Company stock fund, against which the retention award will be benchmarked. Mr. Evans, Mr. Sanders and
Ms. Stump elected the Company stock fund as the investment fund against which their respective retention awards will be benchmarked.
The retention awards approved by the Compensation Committee with respect to the executive officers identified above, as well as the retention award approved with respect to Mr. Lopez (described below), were each in the amount of $1.0 million. These awards reflected the Compensation Committees belief that retaining the institutional knowledge and overall talent possessed by the Companys key executive officers puts the Company in the best position to ensure that it continues to successfully achieve both its short-term and long-term goals during challenging economic times. The retention awards serve to further the Companys stated objective to retain the necessary leadership talent to sustain and expand upon its unique competencies and capabilities.
Each retention award was granted subject to the terms of a retention award agreement, a form of which the Compensation Committee approved prior to its approval of the individual retention awards. The retention award agreement provides that each executive officers interest in the retention award vests as follows:
Each retention award is subject to forfeiture if the executive officer is terminated for cause at any time or the executive officer engages in certain actions prohibited by the retention award agreement within 180 days before or 730 days after the executive officers employment is terminated for any reason. In the event of forfeiture, the executive officer must repay any amount previously distributed from the executive officers retention award account under the ERP.
Each retention award agreement provides for distribution of the retention award, to the extent vested, to the executive officer as follows:
Distributions will be paid in cash to the extent the vested retention award account is benchmarked against an investment fund other than the Company stock fund. To the extent the vested retention award account is
benchmarked against the Company stock fund, distributions will be made in whole Common Shares, plus cash for any fractional share.
On November 4, 2008, the Compensation Committee granted a restricted stock unit award to Mr. Lopez. Because Mr. Lopez is a French citizen and therefore not eligible to participate in the ERP, the restricted stock unit award is not subject to the terms of the ERP, and is instead governed by the terms of the Companys 2006 Plan. The restricted stock unit award was granted pursuant to an award agreement that contains terms and conditions substantially similar to those approved by the Compensation Committee in the form of retention award agreement, including terms and conditions relating to vesting, forfeiture and distribution.
On November 4, 2008, the Compensation Committee approved a one-time payment of $125,000 to Mr. Sanders in recognition of his continuing service in light of the recent organizational changes.