Annual Reports

 
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Other

  • 15-12B (May 12, 2008)
  • SC 13D (Feb 11, 2008)
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  • SC 13G (Jan 4, 2008)
  • Form 3 (Dec 28, 2007)
  • Form 4 (Dec 21, 2007)
Sirva DEF 14A 2007

Documents found in this filing:

  1. Def 14A
  2. Graphic
  3. Graphic
  4. Graphic
  5. Graphic
  6. Graphic

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.              )

Filed by the Registrant  x

Filed by a Party other than the Registrant  o

Check the appropriate box:

o

Preliminary Proxy Statement

o

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x

Definitive Proxy Statement

o

Definitive Additional Materials

o

Soliciting Material Pursuant to §240.14a-12

 

SIRVA, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

x

No fee required.

o

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

(1)

Title of each class of securities to which transaction applies:

 

 

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

 

(4)

Proposed maximum aggregate value of transaction:

 

 

 

 

(5)

Total fee paid:

 

 

 

o

Fee paid previously with preliminary materials.

o

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

Amount Previously Paid:

 

 

 

 

(2)

Form, Schedule or Registration Statement No.:

 

 

 

 

(3)

Filing Party:

 

 

 

 

(4)

Date Filed:

 

 

 

 

 

 

 




GRAPHIC

To Our Stockholders:

On behalf of the Board of Directors, I am pleased to invite you to attend the 2007 annual meeting of stockholders of SIRVA, Inc.

The meeting will be held on Thursday, August 23, 2007 at 10:00 a.m., Central Daylight Time, at SIRVA, Inc.’s headquarters in Westmont, Illinois for the following purposes: (i) to elect three Class I directors to the Board of Directors of SIRVA, Inc. as described in the accompanying Proxy Statement; (ii) to approve the conversion of SIRVA, Inc.’s convertible notes into shares of its convertible perpetual preferred stock, the related issuance of the convertible perpetual preferred stock to certain investors of the company and the related issuance of shares of common stock underlying the convertible notes and convertible perpetual preferred stock; (iii) to approve the SIRVA, Inc. Amended and Restated Omnibus Stock Incentive Plan to (a) increase the number of shares available for awards under the plan to 15,000,000 from 7,600,000 and (b) comply with section 409A of the Internal Revenue Code of 1986, as amended; (iv) to ratify the Audit Committee’s appointment of Ernst & Young LLP, certified public accountants, as SIRVA, Inc.’s independent registered public accounting firm for the 2007 fiscal year; and (v) to consider such other business as may properly come before the meeting.

I urge you to participate in SIRVA, Inc.’s 2007 annual meeting by signing, dating and promptly mailing your enclosed proxy card. Your vote is important, whether or not you plan to attend. Should you prefer, you also may vote over the Internet, as well as by telephone. Voting over the Internet, by phone or by written proxy will ensure your representation at the annual meeting regardless of whether you attend in person. Please review the instructions on the proxy or voting instruction card regarding each of these voting options. Regardless of the size of your investment, your vote is important, so please act at your earliest convenience.

Thank you for your ongoing support of and continued interest in SIRVA, Inc.

Sincerely,

GRAPHIC

John R. Miller
Chairman of the Board




2007 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

TABLE OF CONTENTS

 

 

Notice of the 2007 Annual Meeting of Stockholders of SIRVA, Inc.

 

1

Questions and Answers About the Proxy Materials and the 2007 Annual Meeting

 

3

Proposals To Be Voted On:

 

8

Proposal No. 1: Election of Directors

 

8

Proposal No. 2: Approval of the Conversion of SIRVA’s Convertible Notes, the Related Issuance of Its Convertible Perpetual Preferred Stock and the Related Issuance of Shares of Common Stock Underlying the Convertible Notes and Convertible Perpetual Preferred Stock

 

11

Proposal No. 3: Approval to Amend and Restate SIRVA’s Omnibus Stock Incentive Plan

 

17

Proposal No. 4: Ratification of Independent Registered Public Accounting Firm

 

23

Board Structure and Corporate Governance Principles

 

24

Management

 

30

Security Ownership of Certain Beneficial Owners and Management

 

32

Executive Compensation

 

36

Director Compensation

 

54

Compensation Committee Interlocks and Insider Participation

 

56

Certain Relationships and Related Transactions

 

57

Audit Committee Report

 

59

Incorporation by Reference

 

63

Appendix A: Form of SIRVA, Inc. 12.0% Convertible Notes due June 1, 2011

 

A-1

Appendix B: Amended and Restated Certificate of Designations of 75,000 Shares of 8.0% Convertible Perpetual Preferred Stock of SIRVA, Inc.

 

B-1

Appendix C: SIRVA, Inc. Amended and Restated Omnibus Stock Incentive Plan

 

C-1

 

i




SIRVA, INC.

700 Oakmont Lane
Westmont, Illinois 60559
(630) 570-3000

Notice of the 2007 Annual Meeting of Stockholders of SIRVA, Inc.

Time and Date

 

10:00 a.m. Central Daylight Time on Thursday, August 23, 2007.

Place

 

SIRVA, Inc., 700 Oakmont Lane, Westmont, Illinois 60559.

Items of Business

 

(1)

To elect three Class I directors.

 

 

(2)

To approve the conversion of SIRVA, Inc.’s convertible notes into shares of its convertible perpetual preferred stock, the related issuance of the convertible perpetual preferred stock to certain investors of SIRVA, Inc. and the related issuance of shares of common stock underlying the convertible notes and convertible perpetual preferred stock.

 

 

(3)

To approve the SIRVA, Inc. Amended and Restated Omnibus Stock Incentive Plan to (a) increase the number of shares available for awards under the plan to 15,000,000 from 7,600,000 and (b) comply with section 409A of the Internal Revenue Code of 1986, as amended.

 

 

(4)

To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2007.

 

 

(5)

To consider such other business as may properly come before the meeting.

Adjournments and Postponements

 

Any action on the items of business described above may be considered at the annual meeting at the time and/or the date specified above or at any time and date to which the annual meeting may be properly adjourned or postponed.

Record Date

 

You are entitled to notice of and vote at the annual meeting and any adjournments or postponements thereof if you were a stockholder at
the close of business on July 16, 2007.

Annual Meeting Admission

 

The annual meeting will begin promptly at 10:00 a.m. In order to avoid any disruption for those in attendance, latecomers will not be seated. Please note that no cameras or recording devices will be permitted at the meeting. For your safety, we reserve the right to inspect all packages prior to admission to the annual meeting.

1




 

Voting by Proxy

 

Whether or not you attend the annual meeting in person, please submit a proxy as soon as possible so that your shares can be voted at the annual meeting in accordance with your instructions. For specific instructions on voting, please refer to the instructions on the proxy card. No postage is necessary if mailed in the United States. Any person giving a proxy has the power to revoke it at any time, and stockholders who are present at the meeting may withdraw their proxies and vote in person.

 

 

By Order of the Board of Directors,

 

 

GRAPHIC

 

 

Eryk J. Spytek

 

 

Senior Vice President, General Counsel and Secretary

 

This proxy statement and accompanying proxy card are being distributed on or about July 24, 2007.

2




QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE 2007 ANNUAL MEETING

Q:

Why am I receiving these materials?

A:

The Board of Directors (the “Board”) of SIRVA, Inc. (“SIRVA”) is providing these proxy materials for you in connection with SIRVA’s 2007 annual meeting of stockholders, which will take place on Thursday, August 23, 2007. Stockholders are invited to attend the annual meeting and are requested to vote on the proposals described in this proxy statement.

Q:

What information is contained in these materials?

A:

The information included in this proxy statement relates to the proposals to be voted on at the annual meeting, the voting process, and certain other required information. A proxy card and return envelope are also enclosed.

Q:

What proposals will be voted on at the annual meeting?

A:

There are four proposals scheduled to be voted on at the annual meeting:

·      the election of three Class I directors;

·      the approval of the conversion of SIRVA’s convertible notes into shares of its convertible perpetual preferred stock, the related issuance of the convertible perpetual preferred stock to certain investors of SIRVA and the related issuance of shares of common stock underlying the convertible notes and converible perpetual preferred stock;

·      the approval of SIRVA’s Amended and Restated Omnibus Stock Incentive Plan to (a) increase the number of shares available for awards under the plan to 15,000,000 from 7,600,000 and (b) comply with section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); and

·      the ratification of the Audit Committee’s appointment of Ernst & Young LLP as SIRVA’s independent registered public accounting firm for fiscal year 2007.

Q:

What is SIRVA’s voting recommendation?

A:

SIRVA’s Board recommends that you vote your shares “FOR” each of the nominees to the Board, “FOR” the approval of the conversion of SIRVA’s convertible notes into shares of its convertible perpetual preferred stock and the related issuances of the common and preferred stock, “FOR” the approval of SIRVA’s Amended and Restated Omnibus Stock Incentive Plan and “FOR” the ratification of the Audit Committee’s appointment of Ernst & Young LLP as SIRVA’s independent registered public accounting firm for fiscal year 2007.

Q:

What shares owned by me can be voted?

A:

Each share of SIRVA’s common stock outstanding as of the close of business on July 16, 2007 (the “Record Date”), is entitled to one vote at the annual meeting. On the Record Date, SIRVA had 73,964,515 shares of common stock issued and outstanding. All shares owned by you as of the close of business on the Record Date may be voted by you. You may cast one vote per share of common stock that you held on the Record Date. These shares include shares that are: (1) held directly in your name as the stockholder of record and (2) held for you as the beneficial owner through a stockbroker, bank or other nominee.

 

3




 

Q:

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

A:

Most stockholders of SIRVA hold their shares through a stockbroker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

Stockholder of Record

If your shares are registered directly in your name with SIRVA’s transfer agent, Mellon Investor Services LLC, you are considered, with respect to those shares, the stockholder of record, and these proxy materials are being sent directly to you by SIRVA. As the stockholder of record, you have the right to grant your voting proxy directly to SIRVA or to vote in person at the annual meeting. SIRVA has enclosed a proxy card for you to use. You may also vote by Internet or by telephone as described below under “How can I vote my shares without attending the annual meeting?”

Beneficial Owner

If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name, and these proxy materials are being forwarded to you by your broker or nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker on how to vote and are also invited to attend the annual meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the annual meeting. Your broker or nominee has enclosed a voting instruction card for you to use in directing the broker or nominee regarding how to vote your shares. You may also vote by Internet or by telephone as described below under “How can I vote my shares without attending the annual meeting?”

Q:

How can I vote my shares in person at the annual meeting?

A:

Shares held directly in your name as the stockholder of record may be voted in person at the annual meeting. If you choose to do so, please bring the enclosed proxy card or proof of identification. Even if you plan to attend the annual meeting, SIRVA recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the annual meeting. Shares held in street name may be voted in person by you only if you obtain a signed proxy from the record holder giving you the right to vote the shares.

Q:

How can I vote my shares without attending the annual meeting?

A:

Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct your vote without attending the annual meeting by Internet, telephone or completing and mailing your proxy card or voting instruction card in the enclosed pre-paid envelope.

Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. If you vote your proxy by Internet or by telephone, you do not need to mail back your proxy card. If you are located outside of the United States, the delivery of your proxy must be via the Internet or mail.

VOTE BY INTERNET—http://www.proxyvoting.com/sir

Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site. Internet voting is available through 11:59 p.m. Eastern Daylight Time on August 22, 2007 (the day prior to annual meeting day).

4




 

 

VOTE BY PHONE—1-866-540-5760

Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. Telephone voting is available through 11:59 p.m. Eastern Daylight Time on August 22, 2007 (the day prior to annual meeting day).

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to SIRVA, Inc., c/o Mellon Investor Services Proxy Processing, PO Box 1570, Manchester CT 06045-9973.

Q:

Can I revoke my proxy or change my vote?

A:

You may change your proxy instructions at any time prior to the vote at the annual meeting. Holders of record may accomplish this by timely entering a new vote by Internet or telephone or by granting a new proxy card or new voting instruction card bearing a later date (which automatically revokes the earlier proxy instructions) or by attending the annual meeting and voting in person. Attendance at the annual meeting will not cause your previously granted proxy to be revoked unless you specifically so request.

Beneficial owners should contact the broker, bank or other nominee to obtain instructions about how to revoke your proxy, or to obtain a “legal proxy” which will permit you to attend the annual meeting and vote in person.

Q:

How are votes counted?

A:

In the election of directors, you may vote “FOR” all of the nominees or your vote may be “WITHHELD” with respect to one or more of the nominees. For the approval of the conversion of the convertible notes and the related issuances of convertible perpetual preferred stock and common stock, the approval of SIRVA’s Amended and Restated Omnibus Stock Incentive Plan and the ratification of the appointment of Ernst & Young LLP, you may vote “FOR,” “AGAINST” or “ABSTAIN.” “ABSTAIN” has the same effect as a vote “AGAINST.” If you sign your proxy card or broker voting instruction card with no further instructions, your shares will be voted in accordance with the recommendations of the Board.

Q:

What is the voting requirement to approve each of the proposals?

A:

In the election for directors, directors will be elected by a favorable vote of a plurality of the shares of common stock present and entitled to vote, in person or by proxy, at the annual meeting. However, our corporate governance guidelines provide that in an uncontested election, any nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” such election is required to tender his or her resignation following certification of the stockholder vote. The Nominating and Governance Committee of our Board is required to make recommendations to the Board with respect to any such letter of resignation. The Board is required to take action with respect to this recommendation and to disclose their decision-making process.

The other proposals each require the affirmative “FOR” vote of a majority of those shares present and entitled to vote. If you are a beneficial owner and do not provide the stockholder of record with voting instructions, your shares may constitute broker non-votes. In tabulating the voting result for any particular proposal, shares, which constitute broker non-votes, are not considered entitled to vote.

 

5




 

Q:

What is the quorum requirement for the annual meeting?

A:

The quorum requirement for holding the annual meeting and transacting business is one-third of the outstanding shares entitled to be voted. The shares may be present in person or represented by proxy at the annual meeting.

Q:

Who will count the vote?

A:

A representative of Mellon Investor Services, LLC will tabulate the votes and act as the inspector of election.

Q:

Is my vote confidential?

A:

Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within SIRVA or to third parties except (1) as necessary to meet applicable legal requirements, (2) to allow for the tabulation of votes and certification of the vote, or (3) to facilitate a successful proxy solicitation by the Board. Occasionally, stockholders provide written comments on their proxy card, which are then forwarded to SIRVA’s management.

Q:

What does it mean if I receive more than one proxy or voting instruction card?

A:

It means your shares are registered differently or are in more than one account.

Q:

How can I obtain an admission ticket for the annual meeting?

A:

We are not requiring admission tickets for the 2007 annual meeting.

Q:

Where can I find the voting results of the annual meeting?

A:

SIRVA will announce preliminary voting results at the annual meeting and publish final results in SIRVA’s quarterly report on Form 10-Q for the third quarter of 2007.

Q:

What happens if additional proposals are presented at the annual meeting?

A:

Other than the four proposals described in this proxy statement, SIRVA does not expect any matters to be presented for a vote at the annual meeting. If you grant a proxy, the persons named as proxy holders, John R. Miller, SIRVA’s Chairman of the Board, and Eryk J. Spytek, SIRVA’s Senior Vice President, Secretary and General Counsel, will have the discretion to vote your shares on any additional matters properly presented for a vote at the annual meeting. If for any unforeseen reason any of SIRVA’s nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board.

Q:

Who will bear the cost of soliciting votes for the annual meeting?

A:

SIRVA will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic communication by SIRVA’s directors, officers, and employees, who will not receive any additional compensation for such solicitation activities. In addition, SIRVA may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation material to such beneficial owners.

 

6




 

Q:

May I propose actions for consideration at the 2007 annual meeting of stockholders or nominate individuals to serve as directors?

A:

You may submit proposals for consideration at future annual stockholder meetings, including director nominations.

Stockholder Proposals:   In order for a stockholder proposal to be considered for inclusion in SIRVA’s proxy statement for the 2008 annual meeting, the written proposal must be received by SIRVA at a reasonable time prior to the date on which SIRVA mails the proxy statement and proxy card relating to the 2008 annual meeting and should contain such information as is required under SIRVA’s Bylaws. Such proposals will need to comply with the regulations of the Securities and Exchange Commission (the “SEC”) regarding the inclusion of stockholder proposals in SIRVA-sponsored proxy materials.

SIRVA’s Bylaws permit stockholders to nominate directors at a stockholder meeting. In order to make a director nomination at an annual stockholder meeting or to bring other business before the annual meeting, it is necessary that you notify SIRVA at a reasonable time prior to the date on which SIRVA mails the proxy statement and proxy card relating the 2008 annual meeting. In addition, the notice must meet all other requirements contained in SIRVA’s Bylaws and include any other information required pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Proposals should be addressed to: Secretary, SIRVA, Inc., 700 Oakmont Lane, Westmont, Illinois 60559.

SIRVA will publish the deadline for receiving stockholder proposals in a quarterly report on Form 10-Q.

Copy of Bylaw Provisions:   You may contact the SIRVA Corporate Secretary at SIRVA’s corporate headquarters, SIRVA, Inc., 700 Oakmont Lane, Westmont, Illinois 60559, for a copy of the relevant Bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

Q:

How do I obtain a separate set of voting materials if I share an address with other stockholders?

A:

To reduce expenses, in some cases, we are delivering one set of voting materials to certain stockholders who share an address, unless otherwise requested by one or more of the stockholders. A separate proxy card is included in the voting materials for each of these stockholders. If you have only received one set, you may request separate copies of the voting materials at no additional cost to you by calling us at (630) 570-3000 or by writing to us at SIRVA, Inc., 700 Oakmont Lane, Westmont, Illinois 60559, Attn: Investor Relations. We will undertake to deliver such requested materials to you promptly. You may also contact us by calling or writing if you would like to receive separate voting materials for future annual meetings.

Q:

If I share an address with other stockholders of SIRVA, how can we get only one set of voting materials for future meetings?

A:

You may request that we send you and the other stockholders who share an address with you only one set of voting materials by calling us at (630) 570-3000 or by writing to us at: SIRVA, Inc., 700 Oakmont Lane, Westmont, Illinois 60559, Attn: Investor Relations.

Q:

Whom can I contact if I have other questions?

A:

You may call the SIRVA Investor Relations Department at (630) 570-3000 or by writing to us at: SIRVA, Inc., 700 Oakmont Lane, Westmont, Illinois 60559, Attn: Investor Relations.

 

7




PROPOSALS TO BE VOTED ON

PROPOSAL NO. 1
ELECTION OF DIRECTORS

SIRVA’s Board is divided into four classes. Directors in three of the classes serve staggered three-year terms and are elected at the annual meeting of stockholders held in the year in which the term for their class expires. The director in the fourth class of the Board is elected by the holder of SIRVA’s series A preferred stock and serves until such director is removed or replaced by such holder or until such holder ceases to hold specified amounts of SIRVA’s convertible preferred stock and/or convertible notes, as set forth in the Certificate of Designations for the series A preferred stock. See also “Proposal No. 2: Approval of the Conversion of SIRVA’s Convertible Notes, the Related Issuance of Its Convertible Perpetual Preferred Stock and the Related Issuance of Shares of Common Stock Underlying the Convertible Notes and Convertible Perpetual Preferred Stock.”

The terms for three directors will expire at this annual meeting. Votes cannot be cast and proxies cannot be voted other than for the three nominees named below. Directors elected at this 2007 annual meeting will hold office for a three-year term expiring at the annual meeting in 2010 (or until their respective successors are elected and qualified, or until their earlier death, resignation or removal). All of the nominees are currently directors of SIRVA. There are no family relationships among SIRVA’s executive officers and directors.

The Board expects that all of the nominees will be available to serve as directors. In the event that any nominee should become unavailable, however, the proxyholders, John R. Miller and Eryk J. Spytek, would vote for a nominee or nominees designated by the Board, unless the Board chooses to reduce the number of directors serving on the Board. Information regarding the business experience and age of each nominee as of July 1, 2007 is provided below.

Nominees for Three-Year Terms That Will Expire at the 2010 Annual Meeting of Stockholders

Frederic F. Brace

 

Mr. Brace became a director of SIRVA in August 2004 and currently serves

Age 49

 

as Chairman of the Board’s Audit and Finance Committees. He has been Executive Vice President and Chief Financial Officer of UAL Corporation (United Airlines) since August 2002. Before assuming his current position, he had been United’s Senior Vice President and Chief Financial Officer from September 2001 to August 2002, and its Senior Vice President—Finance and Treasurer from July 1999 to September 2001. Mr. Brace is also a director of United Air Lines, Inc.

John R. Miller*

 

Mr. Miller became a director of SIRVA in December 2005 and has served as

Age 69

 

Chairman of the Board since January 2006. Mr. Miller is a retired oil industry executive. He spent 26 years with The Standard Oil Company (Sohio), most recently as its President, Chief Operating Officer and a member of its board of directors from 1980 to 1986. After leaving Sohio, Mr. Miller founded and served as Chairman and Chief Executive Officer of TBN Holdings Inc., a company engaged in resource recovery, from 1986 to 2000, and Petroleum Partners, Inc., a firm that provided management services to the petroleum industry, from 2000 to 2003. He was a director of the Federal Reserve Bank of Cleveland from 1986 to 1993 and served as its chairman during the last two years of his term. Mr. Miller is currently Non-Executive Chairman of the Board of Graphic Packaging Corporation and also serves as a director of Eaton Corporation and Cambrex Corporation.

 

8




 

Robert W. Tieken

 

Mr. Tieken became SIRVA’s Interim Chief Executive Officer on April 1,

Age 68

 

2007 and has served as a director of SIRVA since July 2006. Mr. Tieken served as the Chairman of the Audit Committee from December 2006 until March 2007. Mr. Tieken was the Executive Vice President and Chief Financial Officer of The Goodyear Tire & Rubber Company from 1994 until his retirement in May 2004. He serves as a director and chair of the audit committee of Graphic Packaging Corporation.


*                    Mr. Miller was formerly a Class III director. On July 9, 2007, pursuant to the rules of the New York Stock Exchange (the “NYSE”), the Board reclassified the members of the classes of the Board to provide for an equal number of directors in each class. As a result, Mr. Miller was redesignated a Class I director and therefore, stands for reelection at this 2007 annual meeting.

SIRVA’S BOARD RECOMMENDS A VOTE FOR THE ELECTION
TO THE BOARD OF EACH OF THE FOREGOING NOMINEES.

SIRVA’s directors listed below whose terms are not expiring at this annual meeting of stockholders will continue in office for the remainder of their terms. Information regarding the business experience and age of each such director as of July 1, 2007 is provided below.

Directors Whose Terms Will Expire at the 2008 Annual Meeting of Stockholders

Laban P. Jackson, Jr.
Age 64

 

Mr. Jackson became a director of SIRVA in July 2006. Mr. Jackson has been Chairman and Chief Executive Officer of Clear Creek Properties, Inc., a real estate development company, since 1989. He is also a director and chair of the audit committee of JP Morgan Chase & Co. and a director of The Home Depot, Inc.

General Sir Jeremy Mackenzie
Age 66

 

General Sir Jeremy Mackenzie became a director of SIRVA in June 2003 and currently serves as the Chairman of the Board’s Nominating and Governance Committee. Sir Jeremy retired from the British Army in 1999, after a long, decorated career, and served as the Governor of the Royal Hospital Chelsea from 1999 to October 2006, U.K. advisor to the governments of Slovenia and Bulgaria, and for the Department of International Development, to Uganda, and Deputy Lord Lieutenant of London. Sir Jeremy serves as a director of SELEX Communications Limited.

 

9




Directors Whose Terms Will Expire at the 2009 Annual Meeting of Stockholders

Robert J. Dellinger
Age 47

 

Mr. Dellinger became a director of SIRVA in March 2003. Since October 2005, Mr. Dellinger has been Executive Vice President and Chief Financial Officer of Delphi Corporation, a supplier of automotive systems and components. In October 2005, Delphi Corporation filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code. From June 2002 to October 2005, Mr. Dellinger served as Executive Vice President and Chief Financial Officer of Sprint Corporation, a global communications company, where he also was Executive Vice President—Finance from April 2002 to June 2002. Before joining Sprint, Mr. Dellinger served as President and Chief Executive Officer of GE Frankona Re based in Munich, Germany with responsibility for the European operations of General Electric’s Employers Reinsurance Corporation, a global reinsurer, from 2000 to 2002.

Thomas E. Ireland
Age 57

 

Mr. Ireland became a director of SIRVA in January 2007. Mr. Ireland is a principal of Clayton, Dubilier & Rice, Inc., a private equity investment firm. Prior to joining Clayton, Dubilier & Rice, Inc. in 1997, Mr. Ireland was a Senior Managing Director at Alvarez & Marsal, a management consulting services firm. Mr. Ireland is also a director of Remington Arms Company, Inc.

Joseph A. Smialowski
Age 58

 

Mr. Smialowski became a director of SIRVA in July 2006 and currently serves as Chairman of the Board’s Compensation Committee. Mr. Smialowski has served as the Executive Vice President of Operations and Technology of Freddie Mac, a real estate financing company, since December 2004. Before that, he was a consultant for New Frontier Partners, a strategic consulting and business development firm, from April 2004 to December 2004, Executive Vice President at Fleet Boston Financial, a financial services company, from 1998 to April 2004, and Chief Information Officer at Sears, Roebuck and Co. from 1993 to 1998.

 

Director Who Is Elected by the Holder of the Series A Preferred Stock

Peter H. Kamin
Age 45

 

Mr. Kamin became a director of SIRVA in September 2006. Mr. Kamin is a founding member and managing partner of ValueAct Capital Management, L.P., an asset management firm. Prior to founding ValueAct Capital Management, L.P. in 2000, he founded and managed Peak Investment L. P. Mr. Kamin is a director of Adesa, Inc., Seitel Inc. and Hanover Compressor, Inc.

 

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PROPOSAL NO. 2
APPROVAL OF THE CONVERSION OF SIRVA’S CONVERTIBLE NOTES,
THE RELATED ISSUANCE OF ITS CONVERTIBLE PERPETUAL PREFERRED STOCK
AND THE RELATED ISSUANCE OF SHARES OF COMMON STOCK UNDERLYING
THE CONVERTIBLE NOTES AND CONVERTIBLE PERPETUAL PREFERRED STOCK

Description of the Transaction

On September 29, 2006, we sold $75.0 million aggregate principal amount of our 10.0% convertible notes due 2011, pursuant to the terms of a securities purchase agreement, dated as of September 25, 2006 (the “Purchase Agreement”), among us, ValueAct Capital Master Fund, L.P. (“ValueAct Capital”) and MLF Offshore Portfolio Company, L.P. (“MLF” and, together with ValueAct Capital, the “Purchasers”). Pursuant to the terms of the Purchase Agreement, we also sold to ValueAct Capital one share of our series A preferred stock. The holders of our series A preferred stock, as a class, are entitled to representation on our Board. Currently, Peter H. Kamin, a managing partner of ValueAct Capital, serves on our Board as the series A preferred stock representative. For a more complete description of the rights of the holders of our series A preferred stock, see “—Series A Preferred Stock” below. Both Purchasers were and are current stockholders of SIRVA. The transaction was effected in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933 (the “Securities Act”). After considering various financing alternatives, we determined that the issuance of the “mezzanine” capital represented by the convertible notes and convertible perpetual preferred stock was in the best interests of our company. We used the proceeds from the sale of the convertible notes and series A preferred stock to repay existing debt under our credit facility and for general corporate purposes.

On June 27, 2007, we and the Purchasers amended the terms of the convertible notes (as amended, the “Notes”). Under the amended Notes, interest now accrues on the unpaid principal at a rate of 12% per annum, beginning on June 1, 2007, payable in the form of our common stock. The Notes are convertible into 75,000 shares of our 8.0% convertible perpetual preferred stock (the “Convertible Preferred Stock”) upon stockholder approval of the conversion of the Notes and related issuance of the Convertible Preferred Stock (the “Conversion Event”). On June 27, 2007, we also amended the terms of the Convertible Preferred Stock to reduce the initial conversion price applicable to the accretion amount in respect of unpaid dividends from $3.00 per share to the lesser of (a) $2.00 per share or (b) fair market value per share. The initial conversion price applicable to the aggregate $75 million stated amount of Convertible Preferred Stock remains at $3.00 per share. Pursuant to the terms of the Purchase Agreement and the rules of the NYSE, as described below, we are required to seek such stockholder approval prior to issuance of the Convertible Preferred Stock. Accordingly, we are seeking stockholder approval of the conversion of the Notes and related issuance of the Convertible Preferred Stock at this annual meeting. In addition, we are seeking stockholder approval of the related issuance of all shares of our common stock underlying the Notes and the Convertible Preferred Stock.

The following is a summary of the material terms of the Notes and the Convertible Preferred Stock, which summary is qualified in its entirety by the full text of the SIRVA, Inc. 12.0% Convertible Notes due June 1, 2011 attached hereto as Appendix A and the Amended and Restated Certificate of Designations of 75,000 Shares of 8.00% Convertible Perpetual Preferred Stock of SIRVA, Inc. attached hereto as Appendix B, both of which are incorporated herein by reference. Although we have summarized the material terms of the Notes and the Convertible Preferred Stock, we encourage you to carefully read the actual documents attached as appendices hereto as they may contain terms that are not summarized herein but are important to you.

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The Notes

Pursuant to its terms as recently amended, interest is payable on the Notes in the form of our common stock quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, with the first payment beginning on September 1, 2007. Interest is issued as common stock at a conversion value equal to the lesser of (a) $2.00 per share or (b) the fair market value per share, in each case rounding down to the next whole share amount. The Notes mature on June 1, 2011 and as described above, automatically convert into 75,000 shares of our Convertible Preferred Stock upon the Conversion Event. Upon conversion, any accrued and unpaid interest will be paid to the holder of the Notes up to and including the conversion date. Prior to the June 2007 amendment, the Notes had paid an additional 2.0% of interest because the Conversion Event did not occur before May 31, 2007. The Notes are no longer subject to the payment of additional interest if a Conversion Event does not occur by a specific date.

Holders of the Notes may require us to purchase their notes upon the occurrence of certain events at an amount equal to the principal amount of the Notes plus accrued and unpaid interest, if any, up to and including the payment date (the “Redemption Price”). The Redemption Price must be paid in cash (except for any accrued interest). Our obligation to purchase the Notes under these circumstances is subject to the terms of our other indebtedness. Pursuant to the Notes, subject to certain exceptions, we may not (1) incur additional debt that is senior to the Notes, (2) permit any liens on our or our subsidiaries’ properties or assets, (3) repurchase, redeem, or declare or pay any cash dividend or distribution on our common stock, or (4) distribute any material property or assets to common stockholders.

Convertible Preferred Stock

As described above, upon a Conversion Event, the Notes automatically convert into shares of Convertible Preferred Stock. The Convertible Preferred Stock is convertible into shares of SIRVA common stock, at the option of the holder, at an initial conversion price of $3.00 per share of common stock. The conversion rate of the Convertible Preferred Stock may be adjusted under certain circumstances. The Convertible Preferred Stock ranks senior to the common stock with respect to the payment of dividends and distribution of assets upon the liquidation, winding-up or dissolution of SIRVA. Dividends are payable on the Convertible Preferred Stock quarterly, when, as and if declared by our Board, on March 15, June 15, September 15 and December 15 of each year at a rate per annum of 8.00% per share on the liquidation preference. If we are unable to pay dividends on the Convertible Preferred Stock on a dividend payment date, the liquidation preference of the shares will be increased by the accretion amount in respect of the unpaid dividends and decreased to the extent we make any payments on previously accreted dividends, as described in the Amended and Restated Certificate of Designations (the “Certificate of Designations”) for the Convertible Preferred Stock. Pursuant to the terms of the Convertible Preferred Stock, as recently amended, the accretion amount in respect of unpaid dividends will be convertible into shares of our common stock at a conversion value equal to the lesser of (a) $2.00 per share or (b) the fair market value per share, in each case rounding down to the next whole share amount. The initial liquidation preference of a share of Convertible Preferred Stock is $1,000.

The dividend rate or accretion rate applicable to the Convertible Preferred Stock may be increased by 0.50% per annum if (1) we fail to comply with our obligations under the registration rights agreement, dated as of September 29, 2006 (as amended by Amendment No. 1 to Registration Rights Agreement, dated as of June 27, 2007, the “Registration Rights Agreement”), between SIRVA and the Purchasers or (2) our common stock ceases to be listed on a national securities exchange in the United States. The additional dividends will cease upon the termination of the applicable event of default.

Holders of the Convertible Preferred Stock are entitled to one vote for each share of common stock into which their Convertible Preferred Stock is convertible as of the record date for all matters voted upon by the holders of common stock, other than the right to vote for the election of directors (except upon a

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dividend default as described below). In addition, as long as any shares of Convertible Preferred Stock are outstanding, the approval or consent of two-thirds interest of the holders of the outstanding Convertible Preferred Stock, voting separately as a class, is required (1) for any amendment to the terms of the Convertible Preferred Stock or the Certificate of Designations for the Convertible Preferred Stock, (2) for any amendment of our Restated Certificate of Incorporation or bylaws if the amendment would alter or change the powers, preferences, privileges or rights of the holders of the Convertible Preferred Stock so as to affect them adversely, (3) to issue, authorize or increase the authorized amount of, or issue or authorize any obligation or security convertible into or evidencing a right to purchase, any stock that ranks senior to (“Senior Stock”) or pari passu with (“Parity Stock”) the Convertible Preferred Stock as to dividends and liquidation preference, or (4) to reclassify any authorized stock of SIRVA into any Parity Stock, Senior Stock, or any obligation or security convertible into or evidencing a right to purchase any Parity Stock or Senior Stock. However, no such vote is required for us to issue, authorize or increase the authorized amount of, or issue or authorize any obligation or security convertible into or evidencing a right to purchase, any stock junior to the Convertible Preferred Stock as to dividends and liquidation preference.

In addition, if we do not (1) pay dividends in full on the Convertible Preferred Stock for dividend periods, whether or not consecutive, containing in the aggregate a number of days equivalent to six calendar quarters, (2) repurchase shares of Convertible Preferred Stock upon the occurrence of certain fundamental changes, or (3) issue common stock upon a holder’s election to convert its Convertible Preferred Stock into common stock, then the number of directors constituting the Board will be increased by two and the holders of outstanding Convertible Preferred Stock, voting separately as a class, will have the right to elect those additional directors to the Board at the next annual meeting of stockholders and at each subsequent stockholders meeting at which directors are elected until (A) all accumulated dividends have been paid in full or funds have been set aside by SIRVA for the payment in full of such dividends or (B) all such shares have been repurchased or sufficient funds have been set aside by SIRVA for such repurchase. These additional directors will not be divided into classes of the Board.

At any time on or after September 25, 2008, we may cause the Convertible Preferred Stock to be automatically converted into shares of common stock at the then-effective conversion price if (1) there is an effective registration statement covering the resale of all shares of common stock issuable upon such conversion and (2) the closing sale price of the common stock equals or exceeds 200% of the conversion price for at least 20 trading days in any consecutive 30 trading day period, including the last trading day of that period, ending on the trading day prior to our issuance of a press release announcing our right to force conversion. At any time on or after September 25, 2009, the conversion premium will be 250%.

If certain fundamental changes occur, we must repurchase the Convertible Preferred Stock, at the holder’s option, in cash at a price equal to the liquidation preference, plus accrued and unpaid dividends, to, but excluding, the purchase date, subject to certain exceptions.

Series A Preferred Stock

Pursuant to the terms of the Purchase Agreement, we also issued to ValueAct Capital one share of our series A preferred stock on September 29, 2006. The series A preferred stock ranks senior to the common stock with respect to the distribution of assets upon the liquidation, winding-up or dissolution of SIRVA, and holders would receive, after any distribution on our indebtedness or stock that ranks senior to the series A preferred stock, an amount equal to $1.00. The series A preferred stock is not convertible into shares of common stock nor entitled to the payment of dividends.

Pursuant to the terms of the Certificate of Designations for the series A preferred stock, as long as the holder holds at least $6,000,000 in principal amount of the Notes or 6,000 shares of Convertible Preferred Stock, it may elect, remove or replace two directors (the “Designated Directors”) to the Board. The Designated Directors are a separate single class of directors and their terms are not divided into classes or

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staggered. If at any time the holder ceases to hold (1) at least $6,000,000 but continues to hold at least $3,000,000 principal amount of Notes or (2) at least 6,000 but continues to hold 3,000 shares of Convertible Preferred Stock, the number of Designated Directors will be permanently reduced to one, the terms of both Designated Directors will immediately terminate and the holder may elect, remove or replace one Designated Director. Finally, if at any time the holder ceases to hold at least $3,000,000 principal amount of Notes or 3,000 shares of Convertible Preferred Stock (the “Trigger Time”), the number of Designated Directors will be permanently reduced to zero and the terms of any Designated Directors will immediately terminate and the holder will not be entitled to elect any Designated Directors. A holder is not deemed to cease to hold Notes solely by reason of conversion into Convertible Preferred Stock or to cease to hold Convertible Preferred Stock prior to the issuance thereof. On and after the Trigger Time, we may redeem the series A preferred stock for $1.00.

In accordance with the terms of the series A preferred stock, ValueAct Capital nominated, and our Board elected, Kelly J. Barlow and Peter H. Kamin to the Board as Designated Directors, effective as of September 29, 2006. Mr. Barlow resigned from the Board, effective as of April 30, 2007. After Mr. Barlow resigned, ValueAct Capital agreed to not immediately appoint a replacement to the Board, but reserved the right to designate an individual with Board observation rights and can appoint a new Designated Director at any time in accordance with the terms of the series A preferred stock.

Until the Trigger Time, the consent of the holder of the series A preferred stock is required for (1) any amendment to the terms of the series A preferred stock or (2) any amendment of our Restated Certificate of Incorporation or bylaws if the amendment would alter or change the powers, preferences, privileges or rights of the holders of the series A preferred stock so as to affect them adversely. Other than as described above or as required by applicable law, the holder of the series A preferred stock has no voting rights. The series A preferred stock is also subject to transfer restrictions as set forth in the Certificate of Designations for the series A preferred stock.

Registration Rights Agreement

In connection with the sale of the Notes, we also entered into the Registration Rights Agreement. The Registration Rights Agreement was amended on June 27, 2007 to make conforming changes necessary to extend the registration rights to the Notes and Convertible Preferred Stock as amended on that date. Pursuant to the terms of the amended Registration Rights Agreement, we agreed, for the benefit of the holders of the Convertible Preferred Stock, to use our reasonable best efforts to file with the SEC on the earlier of (a) 60 days after the Conversion Event and (2) 60 days after we have filed all materials required to be filed pursuant to Sections 13, 14 or 15(d) of the Exchange Act for a period of at least twelve calendar months, and cause to become effective within 120 days after that filing deadline, a shelf registration statement with respect to the resale of the Convertible Preferred Stock, the shares of common stock issued or issuable as interest payments on the Notes, and the shares of common stock issuable upon conversion of the Convertible Preferred Stock (the “Registrable Securities”).  Further, we are required to use our reasonable best efforts to keep the registration statement effective until the earliest of the following: (1) the sale pursuant to Rule 144 under the Securities Act or the shelf registration statement of all Registrable Securities, (2) solely with respect to persons that are not affiliates of SIRVA, two years from the last date of original issuance of the Convertible Preferred Stock (or for such period as may be required by Rule 144(k) of the Securities Act), and (3) the date on which the Convertible Preferred Stock and the shares of common stock issuable upon conversion thereof cease to be outstanding (the “Shelf Registration Period”). In addition, with our consent, which consent may not be unreasonably withheld, the resale of the Registrable Securities may be effected pursuant to an underwritten offering under the shelf registration statement. The holders of Registrable Securities are also entitled to piggy-back registration rights in underwritten public offerings of our equity securities, or securities or other obligations exercisable,

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exchangeable or convertible into equity securities, for a five-year period beginning on the earlier of the Conversion Event or the issuance of shares of common stock as an interest payment on the Notes.

As discussed above, the dividend rate or accretion rate applicable to the Convertible Preferred Stock may be increased by 0.50% per annum if (1) we do not file a shelf registration statement by the filing deadline described above, (2) the shelf registration statement has not been declared effective by the SEC within 120 days after that filing deadline, or (3) (A) after the shelf registration statement is declared effective, it ceases to be effective prior to the end of the Shelf Registration Period or (B) the shelf registration statement or the related prospectus ceases to be usable, in the case of both (A) and (B) in the aggregate, for more than 30 days in any three-month period or an aggregate of 120 days in any 12-month period, in connection with resales of Registrable Securities covered by the shelf registration statement prior to the end of the Shelf Registration Period.

We have also agreed to pay all fees and expenses of registration under the Registration Rights Agreement other than underwriting discounts and commissions.

Voting Agreement

In connection with the sale of the Notes pursuant to the Purchase Agreement, ValueAct Capital entered into a voting agreement, dated as of September 29, 2006, and amended by Amendment No. 1, dated as of October 10, 2006 (the “Voting Agreement”), with Clayton, Dubilier & Rice Fund V Limited Partnership and Clayton, Dubilier & Rice Fund VI Limited Partnership (together, the “Stockholders”). Pursuant to the terms of the Voting Agreement, the Stockholders agreed to vote all of their shares of our common stock in favor of approving the conversion of the Notes and related issuance of Convertible Preferred Stock. The Stockholders collectively own 42.3% of our outstanding shares of common stock as of July 2, 2007. This percentage does not include the shares of common stock issuable upon conversion of the Convertible Preferred Stock. See “Security Ownership of Certain Beneficial Owners and Management.”  In addition, the Stockholders agreed that they would not sell, transfer or otherwise dispose of their respective shares of our common stock or enter into any contract or other arrangement to transfer those shares to any person, unless that person agreed to be bound to the terms of the Voting Agreement. We are an express third-party beneficiary of the Voting Agreement.

NYSE Stockholder Approval Requirements

The NYSE requires stockholder approval prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, to a substantial stockholder of the company, if the number of shares of common stock into which the securities may be convertible or exercisable exceeds 5% of the number of shares of common stock or 5% of the voting power outstanding before issuance. ValueAct Capital and MLF own 9.64% and 8.49%, respectively, of our outstanding shares of common stock, as of July 2, 2007, and are considered substantial stockholders of SIRVA. These percentages do not include the shares of common stock issuable upon conversion of the Convertible Preferred Stock. See “Security Ownership of Certain Beneficial Owners and Management.”

Upon conversion of the Notes to Convertible Preferred Stock, ValueAct Capital and MLF would own an aggregate of 75,000 shares of our Convertible Preferred Stock. Based on the initial conversion price of $3.00 per share of common stock, the Convertible Preferred Stock would be convertible, at the option of the holder, into an aggregate of 25,000,000 shares of our common stock, representing 33.8% of the outstanding shares of our common stock as of July 2, 2007. Accordingly, we are submitting this proposal for stockholder approval to comply with the NYSE rules. In addition, we are seeking stockholder approval of the related issuance of all shares of our common stock underlying the Notes and the Convertible Preferred Stock.

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Effect of Not approving this Proposal

If we do not obtain stockholder approval for this proposal, the Notes would remain outstanding and could not be converted into Convertible Preferred Stock. The Notes would continue to accrue interest at 12.00% per annum, payable in shares of our common stock on each quarterly interest payment date until the Conversion Event occurs. As a result, we would continue to seek the approval of this proposal at special or subsequent annual meetings of stockholders, which will be time consuming and costly. In addition, we believe that the failure to obtain stockholder approval of this proposal could jeopardize our future financing prospects, because prospective purchasers of preferred stock or other securities convertible into our common stock might be reluctant to purchase securities deemed at risk for not becoming convertible into common stock.

SIRVA’S BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF
THE CONVERSION OF SIRVA’S NOTES, THE RELATED ISSUANCE OF ITS CONVERTIBLE PREFERRED STOCK AND THE RELATED ISSUANCE OF SHARES OF COMMON STOCK UNDERLYING THE NOTES AND CONVERTIBLE PREFERRED STOCK.

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PROPOSAL NO. 3
APPROVAL TO AMEND AND RESTATE
SIRVA’S OMNIBUS STOCK INCENTIVE PLAN

On July 9, 2007, our Board approved, subject to the approval of our stockholders, an Amended and Restated Omnibus Stock Incentive Plan (the “Amended Plan”) to increase the number of shares available for issuance under our Omnibus Stock Incentive Plan from 7,600,000 to 15,000,000 shares. Our Board believes that it is important to have additional shares available to provide us with the flexibility to meet future needs, in order to continue to provide incentives that motivate superior performance by participants, provide participants with an ownership interest in SIRVA, and attract and retain the services of outstanding employees. Without having additional shares of common stock available for grant under the plan, our ability to attract such new employees and directors could be negatively impacted, which would have an adverse effect on our future. Additionally, our Board believes that, should this amendment be approved, the ratio of the number of shares available for grant under the Amended Plan in relation to the number of outstanding shares would be within the range of ratios for comparable companies.

In addition, the Amended Plan includes changes which are intended to comply with section 409A of the Code. If certain awards granted under the Amended Plan are not compliant with Code Section 409A, a participant could be subject to a 20% excise tax (in addition to other penalties).

Below is a summary of the material terms of the Amended Plan. This summary does not purport to be a complete description of all of the Amended Plan’s provisions, and is qualified in its entirety by the full text of the Amended Plan, which is attached hereto as Appendix C.

General

The Amended Plan provides for the award to eligible participants of stock options, including incentive stock options (within the meaning of Code Section 422), stock appreciation rights, performance stock and performance units, restricted stock and restricted stock units, and deferred stock. Awards may be made to any non-employee member of our Board, officer or employee of our company or any of our subsidiaries, including any prospective employee, and any of our consultants or advisors.

The Amended Plan is administered by our Compensation Committee. Currently, 7,600,000 shares of our common stock are available for award under our existing Omnibus Stock Incentive Plan. If the proposed amendment is adopted by our stockholders, the number of shares of our common stock available for award under the Amended Plan will increase to 15,000,000. Shares subject to awards that are forfeited, canceled or otherwise terminated without the issuance of common stock under the Amended Plan will again be available for future awards under the Amended Plan. In addition, shares that are tendered to pay the exercise price for any option award or withheld to satisfy any withholding taxes with respect to any award will also return to the share reserve and be available for future grant. Also, shares issued in connection with awards that are assumed, converted or substituted pursuant to an adjustment event, a merger or an acquisition will not count against the share reserve. Under the Amended Plan, during any three-year period, no one person will be able to receive more than 1,000,000 options and/or stock appreciation rights. For stock awards subject to performance requirements, no one person will be able to receive more than 200,000 shares during any performance period of 36 months, with proportionate adjustment for shorter or longer periods not to exceed five years. In addition, no one person will be able to generally receive an award that is payable in cash of more than $5,000,000 for any performance period of 36 months, with proportionate adjustments for shorter or longer performance periods not to exceed five years.

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Options

Both “incentive stock options,” which satisfy the requirements of Code Section 422, or “nonqualified stock options,” which are not intended to satisfy the requirements of Code Section 422, may be granted under the Amended Plan. Under the terms of the Amended Plan, the exercise price of the options will not be less than the price at which our common stock was last sold on the grant date, except for options that are assumed, converted or substituted pursuant to an adjustment event, a merger or an acquisition. The exercise price of the options will be payable in cash or its equivalent or by other methods as permitted by our Compensation Committee. The options will have a term of no greater than seven years from the grant date and will become exercisable in accordance with the vesting schedule determined at the time the awards are granted.

Upon the death or disability of any option holder and unless otherwise determined at the time of grant by our Compensation Committee, the option holder (or his or her beneficiary or legal representative) will be able to exercise (i) any incentive stock option, regardless of whether then vested, until the earlier of (a) one year from the date of termination, or (b) the date the option would otherwise expire, and (ii) any nonqualified option, regardless of whether then vested, for a period of one year. Upon the retirement of any option holder and unless otherwise determined at the time of grant by our Compensation Committee, if the option holder agrees at the time of grant to be bound by certain customary restrictive covenants for a period of three years following the date of retirement, any options previously granted to the option holder will continue to vest in accordance with their terms as if such participant had not retired and, to the extent then vested and exercisable, will be able to be exercised by the option holder (or his or her beneficiary or legal representative) until the earlier of (i) three years from the date of retirement, or (ii) the date the option would otherwise expire.

Upon the termination of an option holder’s employment for cause, all options held by the option holder, whether or not vested, will be terminated and be canceled as of the date of termination. Upon the termination of an option holder’s employment for any other reason and unless otherwise determined by our Compensation Committee at the time of grant, the option holder will be able to exercise any vested option until the earlier of (i) 60 days after the date of termination, or (ii) the date the option would otherwise expire, and all unvested options will be terminated as of the date of termination.

Stock Appreciation Rights

Stock appreciation rights may be granted under the Amended Plan. Stock appreciation rights may be granted alone or together with options. Unless otherwise determined at the time of grant by our Compensation Committee, a stock appreciation right granted together with an option will have terms that are substantially identical to the option, to the extent applicable. Similarly and to the extent applicable, a stock appreciation right granted alone will have terms that are substantially identical to the options that are granted under the Amended Plan. Upon exercise of a stock appreciation right, the holder will be entitled to receive payment equal to the product of (i) the excess, if any, of the closing price of a share of common stock on the date of exercise over the closing price of a share of common stock on the grant date, multiplied by (ii) the number of shares of common stock with respect to which stock appreciation rights are exercised. Payments in respect of the exercise of a stock appreciation right may be made in cash, common stock or a combination thereof, as determined at the time of grant or subsequently by our Compensation Committee.

Performance Stock and Performance Units

Our Compensation Committee may award performance stock and performance units under the Amended Plan. Performance stock is an award of common stock that vests upon the achievement of certain performance objectives during a specified measurement period. A performance unit represents our

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contractual obligation to deliver our common stock or the cash equivalent to a participant upon the achievement of certain performance objectives during a specified measurement period. Performance stock and performance units may be payable in either cash and/or shares of our common stock. Performance stock will carry voting rights. Performance units will not carry voting rights until the underlying shares are issued.

Our Compensation Committee will determine the terms and conditions of awards, including the performance objectives to be achieved during the performance measurement period and the determination of whether and to what degree the specified objectives have been attained. The performance objectives will include revenue growth; EBITDA; EBITA; operating income; pre- or after-tax income; cash flow; cash flow per share; earnings per share; return on equity; return on invested capital; return on assets; economic value added (or an equivalent metric); share price performance; total shareholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels; and debt reduction. Performance measurements may be established on a corporate wide basis or with respect to one or more business units, subsidiaries, or divisions. Performance goals may be measured in either absolute terms or relative to a specified company, group of peers or other external index. Measurement of performance may exclude the impact of charges for restructurings, discontinued operations, extraordinary items and other unusual or non-recurring items.

Unless otherwise determined at the time of grant by our Compensation Committee, participants will be entitled to receive, either currently or at a future date, all dividends and other distributions paid with respect to the performance awards.

Upon termination of a participant’s employment due to death or disability during the performance measurement period and unless otherwise determined by our Compensation Committee, all of the participant’s performance stock and performance units will become vested and nonforfeitable as to that percentage of the award that would have been earned based on the attainment of performance objectives through the date of termination. Upon termination of a participant’s employment due to retirement during the performance measurement period and subject to satisfaction of customary restrictive covenants following such date for a period of three years, all of the participant’s performance stock and performance units will become vested and nonforfeitable as to the percentage of the award that would have been earned as of the date of retirement, and such amounts will become payable upon completion of the entire performance measurement period based on actual results as of the termination date. Unless otherwise determined at the time of grant or subsequently by our Compensation Committee, upon any other termination of a participant’s employment, all of the performance stock and performance units held by the participant will be forfeited.

Restricted Stock and Restricted Stock Units

Restricted stock and restricted stock units are also available for grant under the Amended Plan. Restricted stock is an award of common stock that vests upon the participant’s completion of a specified period of service with us. A restricted stock unit represents our contractual obligation to deliver our common stock or the cash equivalent to a participant upon the participant’s completion of a specified period of service with us. Unless otherwise determined at the time of grant or subsequently by our Compensation Committee, participants will be entitled to receive either currently or at a future date, dividends or other distributions paid with respect to restricted stock and restricted stock units. Restricted stock will carry voting rights, however, restricted stock units will not carry voting rights until the underlying shares are issued.

Upon termination of a participant’s employment due to death or disability during any restriction period and unless otherwise determined at the time of grant by our Compensation Committee, the participant’s restricted stock and restricted stock units will become vested and nonforfeitable as to that

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percentage of the award that would have been earned based on his or her service through the date of termination. Unless otherwise determined at the time of grant by our Compensation Committee, upon any other termination of a participant’s employment, all of the restricted stock and restricted stock units held by the participant that have not become vested will be forfeited.

Deferred Stock

Under the Amended Plan, a participant may receive an award of deferred stock. Deferred stock represents our contractual obligation to deliver shares of our common stock at the end of a specified deferral period. Deferred stock may also be settled in cash. Unless otherwise determined at the time of grant, participants will be entitled to receive additional deferred stock in respect of dividends or other distributions paid with respect to his or her deferred stock. Deferred stock will not carry voting rights until the underlying shares have been issued. Unless our Compensation Committee determines otherwise at the time of grant and unless a participant’s employment is terminated for cause, the participant would receive the shares of our common stock underlying his or her deferred shares (or cash in lieu thereof).

Forfeiture

In general, if a participant, directly or indirectly, competes with any business in which he or she was employed (or in which we have documented plans to become engaged of which the participant has knowledge at the time of his or her termination), solicits any of our employees, or discloses or misuses any confidential information during the participant’s employment with us, during any post-termination exercise period, or during the one-year period ending after the expiration of any post-termination exercise period, the participant would automatically forfeit all awards granted pursuant to the Amended Plan, to the extent they remained unexercised (in the case of options and stock appreciation rights) or subject to a restriction period (in the case of performance stock, performance units, restricted stock or restricted units), or pursuant to which any shares of common stock are to be issued in the future (in the case of deferred stock), and would be required to repay to us all financial gain he or she realized from exercising all or part of any option or stock appreciation rights, from the lapse of the restriction period on (and/or sale of) all or a portion of the participant’s performance stock, performance units, restricted stock or restricted units or from the issuance of (and/or sale of) all or a portion of the participant’s deferred stock, in each case, within the period commencing six months prior to termination of employment and generally ending one year thereafter.

Change in Control

In the event of a change in control (as defined in the Amended Plan), all outstanding options and stock appreciation rights shall become fully vested and exercisable, the restriction period applicable to any awards of restricted stock, restricted stock units and freestanding deferred stock shall lapse, and shares of our common stock underlying restricted units and deferred stock shall be issued.

Unless otherwise determined at the time of grant by our Compensation Committee, upon a change in control, (i) any performance period in progress at the time of the change in control for which performance stock or performance units are outstanding shall end, (ii) all participants granted such awards of performance stock or performance units shall be deemed to have earned a pro rata award equal to the product of (a) a participant’s target award opportunity for the performance period in question based on performance versus goals as of such date and (b) the percentage of performance objectives achieved as of the date of such change in control. Shares of common stock underlying such awards to the extent such awards are deemed to have been earned will be issued to each participant then holding such awards immediately before the change in control. All of the performance shares and performance units that have not been so earned shall be forfeited and canceled as of the date of the change in control.

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Notwithstanding the foregoing, if our Compensation Committee determines before the change in control either that all outstanding awards of options, stock appreciation rights or restricted stock will be honored or assumed by the acquirer, or alternative awards with equal or better terms will be made available, such outstanding awards of options, stock appreciation rights and restricted stock will not be canceled, their vesting and exercisability will not be accelerated, and there will be no payment in exchange for such awards. Any alternative awards offered must generally (i) be based on shares of voting common stock that are traded on an established U.S. securities market, (ii) have substantially equal terms than the outstanding awards, (iii) have substantially equivalent economic value to the outstanding awards, (iv) have terms which provide, upon the involuntary termination of a participant’s employment within two years of the change in control, for unrestricted exercisability and transferability of the alternative award, and (v) not be subject to the requirements of Code Section 409A. Alternative awards shall not be made available for deferred stock, restricted stock units, performance stock or performance units.

Non-U.S. Participants

Our Compensation Committee may, in order to conform with provisions of local laws and regulations in foreign countries in which our company or any of our subsidiaries operate, (i) modify the terms and conditions of awards granted under the Amended Plan to participants employed outside the United States, (ii) establish subplans with modified exercise procedures or other modifications as may be necessary or advisable under such local laws and regulations, and (iii) take any actions which it deems advisable to obtain or comply with any necessary governmental regulatory procedures, exemptions or approvals with respect to the Amended Plan or any subplan.

Nontransferability of Awards

Awards under the Amended Plan are generally not assignable or transferable other than by will or by the laws of descent and distribution, and all awards and rights are exercisable during the life of the participant only by the participant or his or her legal representative. Our Compensation Committee may, upon such terms and conditions as it determines appropriate, permit transfers to the participant’s family members or to entities of which the participant or his or her family members are the sole beneficiaries or owners.

Term and Amendment

Our Board may terminate or suspend the Amended Plan any time, and from time to time may amend or modify the Amended Plan, provided that without the approval by a majority of the votes cast at a meeting of stockholders at which a quorum representing a majority of the shares of common stock is present in person or by proxy, no amendment or modification to the Amended Plan may (i) materially increase the benefits accruing to participants under the Amended Plan, (ii) except as a result of an adjustment event, materially increase the number of shares of common stock subject to awards under the Amended Plan or the maximum number of awards or amount of cash that may be granted to a participant under the Amended Plan, (iii) materially modify the requirements for participation in the Amended Plan, or (iv) amend, modify, terminate or suspend the prohibition against repricing or the requirements relating to amending, modifying or terminating the Amended Plan. No amendment, modification, or termination of the Amended Plan shall in any manner adversely affect any award previously granted under the Amended Plan, without the consent of the participant; provided that without a participant’s consent the Board or our Compensation Committee may amend the Amended Plan, or any award or award agreement thereunder as may be appropriate to either (A) exempt the award from Code Section 409A in the case of options, stock appreciation rights, performance shares or restricted shares, or (B) comply with the requirements of Code Section 409A in the case of performance units, restricted stock units, or deferred

21




stock. The Amended Plan shall continue in effect, unless sooner terminated by the Board, until November 19, 2013.

Federal Income Tax Consequences

The following is a brief description of the material U.S. Federal income tax consequences generally arising with respect to awards issued pursuant to the Amended Plan.

The grant of an option will generally not give rise to tax consequences for the option holder or entitle us to a deduction. Upon exercising an option, other than an incentive stock option, the option holder will generally recognize ordinary income equal to the excess, if any, of the closing price of the shares acquired on the date of exercise over the exercise price, and we generally will be entitled to a tax deduction in the same amount in the year the income is so recognized. Generally, upon exercise of an incentive stock option, the participant would not recognize income upon exercise if the participant (i) does not dispose of the shares within two years after the date of grant or one year after the transfer of shares upon exercise, and (ii) is an employee of our company or one of our subsidiaries from the date of grant and through and until three months before the exercise date. Any gain would be taxed to the participant as long-term capital gain and we would not be entitled to a deduction. The excess of the market value on the exercise date over the exercise price is an item of tax preference, potentially subject to the alternative minimum tax.

With respect to other awards, upon the payment of cash or the issuance of shares or other property that is either not restricted as to transferability or not subject to a substantial risk of forfeiture, the participant will generally recognize ordinary income equal to the cash or the fair market value of shares or other property delivered. The fair market value of the shares delivered will be the product of the number of shares delivered and the closing price of a share of common stock on the date of delivery of the shares. We will be entitled to a deduction in an amount equal to the ordinary income recognized by the participant in the year the income is so recognized, except to the extent the compensation paid to certain of our executive officers is subject to the limitation contained in Code Section 162(m).

Code Section 409A

Code Section 409A imposes restrictions on nonqualified deferred compensation, and covers most arrangements that defer the receipt of compensation, and certain awards under the Amended Plan are subject to these rules. Failure to comply with the requirements of Code Section 409A and the related guidance and regulations may result in the early taxation of deferred compensation and the imposition of a 20% penalty. Code Section 409A is effective with respect to amounts deferred after December 31, 2004 and amounts deferred prior to 2005 that were not vested as of December 31, 2004. Code Section 409A may also apply to amounts deferred earlier under arrangements that are materially modified after October 3, 2004. Final guidance relating to Code Section 409A was issued in April of 2007 and employers are required to amend plan documentation for nonqualified deferred compensation by December 31, 2007. It is intended that the awards granted under the Amended Plan that are potentially subject to the requirements of Code Section 409A will comply with such requirements.

Plan Benefits

Because benefits under the Amended Plan will depend on our Compensation Committee’s actions, which may include determining performance goals applicable to performance stock and performance units, and the fair market value of our common stock at various future dates, it is not possible to determine the benefits that would be received by participants under the Amended Plan.

SIRVA’S BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF
THE AMENDED AND RESTATED OMNIBUS STOCK INCENTIVE PLAN.

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PROPOSAL NO. 4
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board has appointed Ernst & Young LLP as SIRVA’s independent registered public accounting firm to audit its consolidated financial statements for the 2007 fiscal year. Ernst & Young LLP also served as SIRVA’s independent registered public accounting firm for the 2006 fiscal year.

Although SIRVA is not required to seek stockholder approval of the appointment of Ernst & Young LLP as its independent registered public accounting firm, the Board believes it to be sound corporate governance to do so. If the stockholders do not ratify the appointment, the Audit Committee will investigate the reasons for stockholder rejection and will reconsider the appointment. Even if the stockholders ratify the selection, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of SIRVA and its stockholders.

Representatives of Ernst & Young LLP are expected to attend the annual meeting where they will be available to respond to questions and, if they desire, to make a statement.

SIRVA’S BOARD RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE AUDIT COMMITTEE’S APPOINTMENT OF ERNST & YOUNG LLP
AS SIRVA’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

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BOARD STRUCTURE AND CORPORATE GOVERNANCE PRINCIPLES

The Board is divided into four classes. Directors in three of the classes serve staggered three-year terms and are elected at the annual meeting of stockholders held in the year in which the term for their class expires. The director in the fourth class of the Board is elected by the holder of SIRVA’s series A preferred stock and serves until such director is removed or replaced by such holder or until such holder ceases to hold specified amounts of  the Convertible Preferred Stock and/or Notes, as described above under “Proposal No. 2 Approval of the Conversion of SIRVA’s Convertible Notes, the Related Issuance of its Convertible Perpetual Preferred Stock and the Related Issuance of Shares of Common Stock Underlying the Convertible Notes and Convertible Perpetual Preferred Stock—Description of the Transaction—Series A Preferred Stock.”

The Board has 9 directors and the following five standing committees: (1) Audit, (2) Compensation, (3) Nominating and Governance, (4) Executive and (5) Finance. The membership and the function of each committee are described below. During 2006, the Board held 8 meetings, and each director other than Robert J. Dellinger and General Sir Jeremy Mackenzie attended at least 75% of the aggregate of (1) the total number of meetings of the Board held during the period for which he or she has been a director and (2) the total number of meetings held by all committees of the Board on which he or she served during the periods that he or she served.

Name of Director

 

 

 

Audit

 

Compensation

 

Nominating and
Governance

 

Executive

 

Finance

 

Outside Directors:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Frederic F. Brace(1)

 

 

*

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

*

 

 

Robert J. Dellinger

 

 

X

 

 

 

X

 

 

 

X

 

 

 

 

 

 

 

 

 

 

Thomas E. Ireland(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

X

 

 

Laban P. Jackson, Jr.(3)

 

 

X

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

Peter H. Kamin(4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

X

 

 

General Sir Jeremy Mackenzie

 

 

 

 

 

 

X

 

 

 

*

 

 

 

 

 

 

 

 

 

 

John R. Miller(5)

 

 

(X)

 

 

 

X

 

 

 

 

 

 

 

*

 

 

 

 

 

 

Joseph A. Smialowski(6)

 

 

X

 

 

 

*

 

 

 

X

 

 

 

 

 

 

 

 

 

 

Employee Directors:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Robert W. Tieken(7)

 

 

(*)

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

X

 

 

Former Directors:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kathleen J. Affeldt(8)

 

 

 

 

 

 

(*)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kelly J. Barlow(9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(X)

 

 

Brian P. Kelley(10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(X)

 

 

 

(X)

 

 

Robert W. Nelson(11)

 

 

(*)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

James W. Rogers(12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(*)

 

 

 

 

 

 

Axel Rückert(13)

 

 

 

 

 

 

(X)

 

 

 

(X)

 

 

 

 

 

 

 

 

 

 

Richard J. Schnall(14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(X)

 

 

 

(X)

 

 

Carl T. Stocker(15)

 

 

(*)

 

 

 

(X)

 

 

 

 

 

 

 

 

 

 

 

(X)

 

 

Number of Meetings in 2006

 

 

11

 

 

 

7

 

 

 

3

 

 

 

3

 

 

 

15

 

 


X = Committee member; * = Chair; (X) = Former Committee member; (*) = Former Committee chair

       (1) Mr. Brace was appointed Chairman of the Audit Committee, effective March 8, 2007.

       (2) Mr. Ireland was appointed to the Board, effective January 1, 2007.

       (3) Mr. Jackson was appointed to the Board and the Audit Committee, effective July 1, 2006.

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       (4) Mr. Kamin was appointed to the Board, effective September 29, 2006.

       (5) Mr. Miller was appointed to the Board, effective December 1, 2005. He was appointed Chairman of the Board, effective January 1, 2006. Mr. Miller also served on the Audit Committee from January to February 2006.

       (6) Mr. Smialowski was appointed to the Board, effective July 1, 2006.

       (7) Mr. Tieken served as a member of the Audit Committee from July 2006 when he joined the Board until March 8, 2007, when he was appointed Interim Chief Executive Officer. He also served as Chairman of the Audit Committee from December 13, 2006 until March 8, 2007.

       (8) Ms. Affeldt served on the Board from August 2002 until April 30, 2007.

       (9) Mr. Barlow served on the Board from September 29, 2006 until April 30, 2007.

(10) Mr. Kelley resigned from the Board and as President and Chief Executive Officer in March 2007.

(11) Mr. Nelson served on the Board from December 1, 2005 until April 30, 2007. He also served as Chairman of the Audit Committee from January 1, 2006 until December 13, 2006.

(12) Mr. Rogers served on the Board from February 1999 until December 2006. Mr. Rogers served as Chairman of the Board from August 1999 to December 2005.

(13) Mr. Rückert served on the Board from August 2004 until June 2006.

(14) Mr. Schnall served on the Board from March 2002 until April 30, 2007.

(15) Mr. Stocker served on the Board from May 2000 until April 16, 2007. He also served as Chairman of the Audit Committee from May 2000 to December 2005.

Audit Committee

The Audit Committee has responsibility for, among other things:

·       assisting the Board in monitoring:

·        the quality of our financial reporting and other internal control processes,

·        the quality and integrity of our financial statements,

·        the independent auditor’s qualifications and independence,

·        the performance of our internal audit function and independent auditors, and

·        our compliance with legal and regulatory requirements and our code of conduct; and

·       preparing the report of the Audit Committee required to be included in our annual proxy statement under the rules of the SEC.

Mr. Nelson joined the Audit Committee in January 2006 as its Chairman. The Audit Committee also included Messrs. Brace, Dellinger and Miller. Mr. Miller resigned from the Audit Committee in February 2006, and Messrs. Jackson and Tieken joined the committee in July 2006. Mr. Nelson served as the Chairman of the Audit Committee until he resigned from the committee on December 13, 2006, at which time Mr. Tieken became the Chairman of the Audit Committee. Mr. Tieken resigned from the committee on March 8, 2007, when he was appointed Interim Chief Executive Officer (effective as of April 1, 2007), at which time Mr. Brace became Chairman of the Audit Committee. In addition, Mr. Smialowski joined the committee in May 2007. The Board has determined that all members of the Audit Committee are independent under both NYSE and SEC rules. The Board has also determined that

25




each member of the Audit Committee is financially literate within the meaning of the NYSE listing standards.

In addition, the Board has determined that Messrs. Dellinger and Brace are audit committee financial experts for purposes of the SEC rules, and that each of them has accounting or related financial management expertise for purposes of NYSE listing standards. Although designated as audit committee financial experts, Messrs. Dellinger and Brace are not accountants for SIRVA and, under SEC rules, are not “experts” for purposes of the liability provisions of the Securities Act or for any other purpose. Messrs. Dellinger and Brace do not have any responsibilities or obligations in addition to those of the other Audit Committee members; all Audit Committee members have identical duties and responsibilities.

Compensation Committee

The Compensation Committee has responsibility for the compensation of our Chief Executive Officer (“CEO”) and our other officers. Specifically, the committee:

·       reinforces and insures alignment to our general compensation philosophy and, in consultation with senior management, oversees the development and implementation of compensation programs;

·       in consultation with the Chairman of the Board (so long as the CEO is not the Chairman), reviews our CEO’s compensation, the corporate goals and objectives relevant to that compensation, our CEO’s performance in light of those goals and objectives, and makes recommendations to the Board with respect to our CEO’s compensation levels based on this evaluation;

·       reviews and approves all compensation arrangements for our other officers, including base salary level, annual incentive opportunity, and long-term incentive opportunity level;

·       reviews and makes recommendations to the Board with respect to SIRVA’s executive compensation plans, including incentive compensation plans and equity-based plans, and oversees the administration of these plans and discharges any responsibilities imposed on the committee by any of these plans; and

·       prepares the report on executive compensation required by the rules and regulations of the SEC.

Nominating and Governance Committee

The Nominating and Governance Committee has responsibility for, among other things, assisting the Board by identifying individuals qualified and suitable to be nominated as members of the Board and its committees and by recommending the director nominees for each annual meeting of stockholders. It is also responsible for determining the appropriate Board size and committee structure, determining the compensation of our directors, including evaluating our director compensation plans, policies and programs and insuring overall alignment of directors compensation to the corporate compensation philosophy, and developing and reviewing corporate governance principles applicable to SIRVA.

The committee will consider nominees recommended by stockholders provided that the recommendations are made in accordance with the procedures described in this proxy statement under “Questions and Answers About the Proxy Materials and the 2007 Annual Meeting.” Stockholder’s nominees that comply with these procedures will receive the same consideration that the committee’s nominees receive.

The committee evaluates whether the nominee’s skills are complementary to the existing Board members’ skills, and the Board’s needs for operational, management, financial, international, technological or other expertise. The committee and SIRVA’s CEO interview candidates that meet the criteria, and the committee selects nominees that best suit the Board’s needs.

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Executive Committee

The Executive Committee meets or takes written action when the Board is not otherwise meeting. The committee has full authority to act on behalf of the Board, except that it cannot:

·       take any action delegated to another Board committee;

·       amend the certificate of incorporation;

·       adopt an agreement of merger or consolidation or a certificate of ownership or merger;

·       recommend to the stockholders the sale, lease or exchange of all or substantially all of SIRVA’s property and assets;

·       declare a dividend;

·       authorize the issuance of stock;

·       authorize the borrowing of funds, other than under existing facilities, that is material to SIRVA’s capital structure;

·       appoint or discharge SIRVA’s independent public accountants;

·       authorize the annual operating plan, annual capital expenditure plan or strategic plan;

·       abolish or usurp the authority of the Board;

·       amend the Bylaws; or

·       exercise any other powers which under the Delaware General Corporation Law may not be delegated to a committee.

Finance Committee

The Finance Committee was established on January 1, 2006 and has responsibility for, among other things, assisting the Board in overseeing all areas of corporate finance for SIRVA, including capital structure, equity and debt financings, capital expenditures, cash management, banking activities and relationships, investments, and foreign exchange activities. The committee also provides guidance to the Board and management about all proposals concerning SIRVA’s major financial policies.

Other Committees

We also have a CEO Search Committee and a Class Action Committee. The CEO Search Committee consists of Messrs. Miller (Chairman), Ireland, Jackson, Kamin and Tieken and was established in March 2007 when Brian P. Kelley, our former President and Chief Executive Officer, resigned. The CEO Search Committee was established to conduct and oversee the search for a new Chief Executive Officer. The Class Action Committee consists of Messrs. Miller (Chairman), Brace, Smialowski and Tieken and was established in March 2007 to oversee and authorize any settlement or other resolution of our securities class action litigation.

Series A Preferred Stock Director Election Rights

In September 2006, pursuant to the terms of the Purchase Agreement, we issued to ValueAct Capital one share of our series A preferred stock. Such preferred stock gives the holder the right to elect up to two directors to our Board, as well as remove or replace those directors. For further information about the terms of the series A preferred stock and the director election rights, see “Proposal No. 2 Approval of the Conversion of SIRVA’s Convertible Notes, the Related Issuance of its Convertible Perpetual Preferred

27




Stock and the Related Issuance of Shares of Common Stock Underlying the Convertible Notes and Convertible Perpetual Preferred Stock—Description of the Transaction—Series A Preferred Stock.”

In accordance with the terms of the series A preferred stock, ValueAct Capital nominated, and our Board elected, Kelly J. Barlow and Peter H. Kamin to the Board as Designated Directors, effective as of September 29, 2006. Mr. Barlow resigned from the Board, effective as of April 30, 2007. After Mr. Barlow resigned, ValueAct Capital agreed to not immediately appoint a replacement to the Board, but reserved the right to designate an individual with Board observation rights and can appoint a new Designated Director at any time in accordance with the terms of the series A preferred stock.

Other than pursuant to the terms of our series A preferred stock, there are no arrangements or understandings between any executive officer or director and any other person pursuant to which the executive officer or director was elected.

Statement on Corporate Governance

We have had formal corporate governance standards in place since December 2002. We have reviewed internally and with the Board the provisions of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), the rules of the SEC and the corporate governance listing standards of the NYSE regarding corporate governance policies and processes. We are in compliance with the rules and listing standards of the NYSE.

Director Independence

SIRVA has adopted the following standards for director independence in compliance with the NYSE corporate governance listing standards:

1.      No director qualifies as “independent” unless the Board affirmatively determines that the director has no material relationship with SIRVA or any of its subsidiaries (either directly or as a partner, stockholder or officer of an organization that has a relationship with SIRVA or any of its subsidiaries);

2.      A director who is an employee, or whose immediate family member is an executive officer of SIRVA or any of its subsidiaries is not independent until three years after the end of such employment relationship;

3.      A director who receives, or whose immediate family member receives, more than $100,000 per year in direct compensation from SIRVA or any of its subsidiaries, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), is not independent until three years after he or she ceases to receive more than $100,000 per year in such compensation;

4.      A director who is affiliated with or employed by, or whose immediate family member is affiliated with or employed in a professional capacity by, a present or former internal or external auditor of SIRVA or any of its subsidiaries is not “independent” until three years after the end of the affiliation or the employment or auditing relationship;

5.      A director who is employed, or whose immediate family member is employed, as an executive officer of another company where any of SIRVA’s or any of its subsidiaries’ present executives serve on that company’s compensation committee is not “independent” until three years after the end of such service or the employment relationship; and

6.      A director who is an executive officer or an employee, or whose immediate family member is an executive officer, of a company that makes payments to, or receives payments from, SIRVA or any of its subsidiaries for property or services in an amount which, in any single fiscal year, exceeds the

28




greater of $1 million, or 2% of such other company’s consolidated gross revenues, is not “independent” until three years after falling below such threshold.

In 2006, Kathleen J. Affeldt, Kelly J. Barlow, Frederic F. Brace, Robert J. Dellinger, Laban P. Jackson, Jr., Peter H. Kamin, Brian P. Kelley, General Sir Jeremy Mackenzie, John R. Miller, Robert W. Nelson, James W. Rogers, Axel Rückert, Richard J. Schnall, Joseph A. Smialowski, Carl T. Stocker and Robert W. Tieken served as members of our Board. Mr. Rückert resigned from the Board in June 2006. Mr. Rogers resigned from the Board in December 2006 and was replaced by Thomas E. Ireland, effective January 1, 2007. In addition, Mr. Kelley resigned as SIRVA’s President and Chief Executive Officer and a director in March 2007, and Ms. Affeldt and Messrs. Barlow, Nelson, Schnall and Stocker resigned as directors in April 2007.

In 2006, the Board determined that each of Ms. Affeldt and Messrs. Brace, Dellinger, Jackson, Mackenzie, Miller, Nelson, Rückert, Smialowski and Stocker were independent directors. The Board also had determined that Mr. Tieken was an independent director until his appointment as Interim Chief Executive Officer in March 2007, which was effective as of April 1, 2007. Each of these directors meets the independence requirements of the NYSE and has no other material relationships with SIRVA that the Board, after considering all relevant facts and circumstances, believes would interfere with the exercise of independent judgment in carrying out such director’s responsibilities.

The majority of SIRVA’s directors, and each member of its Audit Committee, Compensation Committee and Nominating and Governance Committee, qualify as independent directors under the rules of the NYSE.

Presiding Director for Executive Sessions

SIRVA’s non-management directors meet at regularly scheduled executive sessions without management. John R. Miller, the Chairman of the Board, acts as the presiding director of these executive sessions of the Board.

Communication with Non-Management Directors

Stockholders and other interested parties may communicate with non-management directors by writing to John R. Miller, Chairman of the Board, c/o SIRVA General Counsel, 700 Oakmont Lane, Westmont, Illinois 60559. Inquiries will be reviewed by SIRVA’s General Counsel and if they are relevant to, and consistent with, SIRVA’s operations, policies and philosophies, they will be forwarded to Mr. Miller. All directors are expected to attend the annual stockholders’ meeting. Eight of our nine directors attended the 2006 annual meeting of stockholders.

Corporate Governance Guidelines, Code of Business Conduct and Committee Charters

SIRVA’s Corporate Governance Guidelines, Code of Business Conduct and charters for the Audit, Compensation, Nominating and Governance, Executive and Finance Committees are available on SIRVA’s website at www.sirva.com by following the links “Investor Relations” and then “Corporate Governance.”  Links to the relevant charters and guidelines appear under the headings “Committee Charters” and “Governance Documents.”  Copies of the Corporate Governance Guidelines, Code of Business Conduct and committee charters are also available to stockholders upon request, addressed to SIRVA, Inc., 700 Oakmont Lane, Westmont, Illinois 60559, Attention: Investor Relations. SIRVA will promptly disclose any waivers. SIRVA will post to its website any amendments to the Code of Business Conduct, or waivers to the provisions thereof for directors or executive officers. SIRVA’s website and the information contained therein or incorporated therein are not part of this proxy statement nor incorporated by reference in this proxy statement.

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Annual CEO Certification

The chief executive officer and chief financial officer certifications required under Section 302 of the Sarbanes-Oxley Act have been filed as exhibits to SIRVA’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. The certification by SIRVA’s chief executive officer required under Section 303A.12(a) of the NYSE corporate governance rules was submitted to the NYSE without qualification.

MANAGEMENT

The following table sets forth certain information with respect to our executive officers as of July 1, 2007.

Name

 

 

 

Age

 

Position

Robert W. Tieken

 

68

 

Director and Interim Chief Executive Officer

James J. Bresingham

 

39

 

Executive Vice President—Chief Accounting Officer and Acting Chief Financial Officer

Timothy P. Callahan

 

45

 

Senior Vice President, Global Sales

Douglas V. Gathany

 

51

 

Vice President, Treasurer

Rene C. Gibson

 

40

 

Senior Vice President, Human Resources

Michael B. McMahon

 

43

 

President, Global Relocation

Kevin D. Pickford

 

50

 

President and Managing Director, Europe

Eryk J. Spytek

 

39

 

Senior Vice President, General Counsel and Secretary

 

Robert W. Tieken.   See previous description under “Proposal No. 1 Election of Directors—Nominees for Three-Year Terms That Will Expire at the 2010 Annual Meeting of Stockholders.”

James J. Bresingham joined our company in July 2004 and has served as Executive Vice President—Chief Accounting Officer since January 2006. In June 2007, Mr. Bresingham was also appointed acting Chief Financial Officer. Mr. Bresingham was Vice President of Business Development from July 2004 to December 2005. Prior to joining us, Mr. Bresingham was Director of Business Development at Sears, Roebuck & Co., a broadline retailer, from 2001 until June 2004. He spent the previous seven years with PricewaterhouseCoopers LLP in various auditing and transaction services roles.

Timothy P. Callahan joined our company in May 2002 and has served as Senior Vice President, Global Sales since September 2005. Mr. Callahan joined us after our May 2002 purchase of the relocation services business of Cooperative Resource Services (“CRS”). From 1998 to May 2002, Mr. Callahan served CRS as Senior Vice President with responsibility for all sales, marketing and public relations. Mr. Callahan served as our Executive Vice President, Sales from May 2002 to March 2005 and as Senior Vice President, Sales and Marketing from March 2005 to September 2005.

Douglas V. Gathany joined our company in June 2001 and has served as Vice President, Treasurer since that time. Prior to joining our company, Mr. Gathany served in various positions with Montgomery Ward, a retail merchandising organization, since 1979, including as Vice President-Treasurer from 1996 to 2001.

Rene C. Gibson joined our company in May 2005 and has served as Senior Vice President, Human Resources since May 2007. Prior to that, Ms. Gibson served as Vice President of Human Resources since October 2006 and Director of Human Resources from May 2005 to October 2006. Prior to joining us,

30




Ms. Gibson was at PepsiAmericas where she served in various positions, including Project Manager and Chicago Regional Human Resource Manager, since April 2002.

Michael B. McMahon joined our company in April 2004 and has served as President, Global Relocation since May 2007. Mr. McMahon also served as President, Moving Services North America from April 2004 until April 2007 and continues to have responsibility for Moving Services North America until his successor is found. Prior to joining us, Mr. McMahon was General Manager, Product & Asset Management for GE Capital—Rail Services from June 2003 to March 2004 and its Chief Financial Officer from July 2001 to June 2003.

Kevin D. Pickford joined our company in 1999 as a result of our purchase of the Allied Pickfords business from NFC plc, now known as Exel Investments Limited, and has served as President and Managing Director, Europe since January 2005. Mr. Pickford served as President, European Operations from November 2004 to December 2005 and Managing Director, Asia Pacific for SIRVA from 1999 to December 2005.

Eryk J. Spytek joined our company in February 2006 and has served as Senior Vice President, General Counsel and Secretary since that time. Previously, he was a partner at Winston & Strawn LLP, where he served from 1996 through January 2006.

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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, at July 2, 2007, concerning:

·       each stockholder known to us to beneficially own more than 5% of our outstanding common stock;

·       beneficial ownership of our outstanding common stock by each of our current directors;

·       beneficial ownership of our outstanding common stock by each of our Named Executive Officers (as defined below); and

·       beneficial ownership of our outstanding common stock by all of our directors and executive officers as a group.

Name and Address of Beneficial Owner(1)

 

 

 

Number

 

Percent

 

Clayton, Dubilier & Rice Fund V Limited Partnership(2)

 

17,085,837

 

 

23.10

%

 

Clayton, Dubilier & Rice Fund VI Limited Partnership(3)

 

7,102,498

 

 

9.60

%

 

ValueAct Capital Master Fund, L.P.(4)

 

27,148,487

 

 

28.89

%

 

MLF Offshore Portfolio Company, L.P.(5)

 

11,276,800

 

 

14.28

%

 

Robert S. Pitts, Jr.(6)

 

4,000,000

 

 

5.41

%

 

Name of Directors and Named Executive Officers(1)

 

 

 

 

 

 

 

 

 

Frederic F. Brace(7)

 

33,329

 

 

*

 

 

Robert J. Dellinger(8)

 

78,642

 

 

*

 

 

Thomas E. Ireland (9)

 

 

 

 

 

Laban P. Jackson, Jr.(10)

 

36,795

 

 

*

 

 

Peter H. Kamin(11)

 

 

 

 

 

Sir Jeremy Mackenzie(12)

 

54,718

 

 

*

 

 

John R. Miller(13)

 

26,522

 

 

*

 

 

Joseph A. Smialowski(14)

 

29,959

 

 

*

 

 

Robert W. Tieken(15)

 

13,472

 

 

*

 

 

Brian P. Kelley(16)

 

866,960

 

 

1.16

%

 

J. Michael Kirksey(17)

 

 

 

 

 

Kevin D. Pickford(18)

 

98,922

 

 

*

 

 

Michael B. McMahon(19)

 

50,000

 

 

*

 

 

Timothy P. Callahan(20)

 

102,086

 

 

*

 

 

All directors and executive officers as a group (18 persons)(21)

 

1,556,034

 

 

2.07

%

 


*                    Less than 1%.

       (1) The number of shares beneficially owned by each entity, director or executive officer is determined under the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, an entity or person is deemed a “beneficial owner” of a security if it, he or she has or shares the power to vote or direct the voting of such security or the power to dispose or direct the disposition of such security. An entity or person is also deemed to be a beneficial owner of any securities which that entity or person has the right to acquire beneficial ownership of within 60 days of July 2, 2007 or August 30, 2007. Unless otherwise indicated, each person has sole investment and voting power, or shares such powers with his or her spouse, with respect to the shares set forth in the following table.

       (2) CD&R Associates V Limited Partnership, a Cayman Islands exempted limited partnership (“Associates V”), is the general partner of Clayton, Dubilier & Rice Fund V Limited Partnership (“Fund V”) and has the power to direct Fund V as to the voting and disposition of shares held by

32




Fund V. CD&R Investment Associates II, Inc., a Cayman Island exempted company (“Investment Associates II”), is the managing general partner of Associates V and has the power to direct Associates V as to its direction of Fund V’s voting and disposition of the shares held by Fund V. No person controls the voting and disposition of Investment Associates II, Inc. with respect to the shares owned by Fund V. Each of Associates V and Investment Associates II expressly disclaims beneficial ownership of the shares owned by Fund V. The business address for each of Fund V, Associates V and Investment Associates II, is 1403 Foulk Road, Suite 106, Wilmington, Delaware 19803.

       (3) CD&R Associates VI Limited Partnership, a Cayman Islands exempted limited partnership (“Associates VI”), is the general partner of Clayton, Dubilier & Rice Fund VI Limited Partnership (“Fund VI”) and has the power to direct Fund VI as to the voting and disposition of shares held by Fund VI. CD&R Investment Associates VI, Inc., a Cayman Island exempted company (“Investment Associates VI”), is the general partner of Associates VI and has the power to direct Associates VI as to its direction of Fund VI’s voting and disposition of the shares held by Fund VI. No person controls the voting and disposition of Investment Associates VI with respect to the shares owned by Fund VI. Each of Associates VI and Investment Associates VI expressly disclaims beneficial ownership of the shares owned by Fund VI. The business address for each of Fund VI, Associates VI and Investment Associates VI is 1403 Foulk Road, Suite 106, Wilmington, Delaware 19803.

       (4) The business address for ValueAct Capital is 435 Pacific Avenue, Fourth Floor, San Francisco, CA 94133. The address and number of shares of SIRVA common stock beneficially owned by ValueAct Capital is based on the Schedule 13D/A filed by ValueAct Capital with the SEC on July 2, 2007. The number of shares includes 20,000,000 shares of common stock issuable upon conversion of the Convertible Preferred Stock (the “Conversion Shares”), since issuance of such Convertible Preferred Stock could be approved by stockholders within 60 days of July 2, 2007. Upon receipt of stockholder approval, the Convertible Preferred Stock will be issued to ValueAct Capital in exchange for the Notes, which ValueAct Capital currently holds. There is no assurance that a Conversion Event will occur within 60 days of July 2, 2007. The number of shares also includes 16,587 shares of common stock issuable to Peter H. Kamin, a managing member, upon conversion of deferred stock granted to Mr. Kamin for serving on our Board. See note 11 below. In addition, as reported in the Schedule 13D/A, ValueAct Capital may be deemed to be the beneficial owner of 51,329,322 shares of common stock, representing approximately 54.6% of our outstanding common stock. Of those shares, 17,085,837 shares are owned of record by Fund V and 7,102,498 shares are owned of record by Fund VI (collectively, the “CD&R Shares” and together with Fund V, the “CD&R Entities”). Solely as a result of the voting agreement, dated September 29, 2006, by and among ValueAct Capital and the CD&R Entities, ValueAct Capital may be deemed to beneficially own the CD&R Shares. All dispositive power and pecuniary interest in the CD&R Shares are held by the CD&R Entities. ValueAct Capital expressly disclaims beneficial ownership of the CD&R Shares and the Conversion Shares. The number of shares does not include interest payable in common stock to ValueAct Capital that has accrued since June 1, 2007 under the Notes. ValueAct Capital will be issued additional shares of such accrued interest on the earlier of the date of the conversion of the Notes or September 1, 2007. The number of shares issued will vary depending on the payment date of the accrued interest and fair market value of the shares on that date. ValueAct Capital also beneficially owns one share of SIRVA’s series A preferred stock, representing all of the outstanding shares thereof. The series A preferred stock entitles ValueAct Capital to appoint two directors to our Board, subject to specified conditions. Holders of series A preferred stock have no other voting rights, except as provided by the Delaware general corporation law.

       (5) The business address for MLF is c/o Trident Trust Company (Cayman) Ltd., One Capital Place, P.O. Box 847, Grand Cayman, Cayman Islands, B.W.I. The number of shares of SIRVA common stock beneficially owned by MLF is based on the Schedule 13D/A filed by MLF with the SEC on

33




June 29, 2007. The number of shares includes 5,000,000 shares of common stock issuable upon conversion of the Convertible Preferred Stock, since issuance of such Convertible Preferred Stock could be approved by stockholders within 60 days of July 2, 2007. Upon receipt of stockholder approval, the Convertible Preferred Stock will be issued to MLF in exchange for the Notes, which MLF currently holds. There is no assurance that a Conversion Event will occur within 60 days of July 2, 2007. The number of shares does not include interest payable in common stock to MLF that has accrued since June 1, 2007 under the Notes. MLF will be issued additional shares of such accrued interest on the earlier of the date of the conversion of the Notes or September 1, 2007. The number of shares issued will vary depending on the payment date of the accrued interest and fair market value of the shares on that date.

       (6) The business address of Mr. Pitts is 767 Fifth Avenue, 6th Floor, New York, New York 10153. Mr. Pitts is the managing member of Steadfast Capital Management LLC, a Delaware limited liability company (the “Investment Manager”), and Steadfast Advisors LLC, a Delaware limited liability company (the “Managing General Partner”). The Managing General Partner has the power to vote and dispose of the securities held by Steadfast Capital, L.P., a Delaware limited partnership (“Steadfast Capital”). The Investment Manager has the power to vote and dispose of the securities held by American Steadfast, L.P., a Delaware limited partnership (“American Steadfast”), and Steadfast International Ltd., a Cayman Island exempted company (the “Offshore Fund”). Steadfast Capital, American Steadfast and Offshore Fund hold 654,447, 1,335,738 and 2,009,815 shares, respectively, of SIRVA common stock. The number of shares of SIRVA common stock beneficially owned by these parties is based on the Schedule 13G filed by the parties with the SEC on April 16, 2007.

       (7) Includes 31,329 deferred shares held by Mr. Brace pursuant to the SIRVA, Inc. Directors Compensation Policy (the “Directors Policy”).

       (8) Includes 55,755 deferred shares held by Mr. Dellinger pursuant to the SIRVA, Inc. Directors Compensation Plan (the “Directors Plan”) and the Directors Policy.

       (9) Does not include 17,085,837 shares owned by Fund V or 7,102,498 shares owned by Fund VI. Mr. Ireland may be deemed to share beneficial ownership of the shares owned of record by Fund V by virtue of his status as a shareholder of Investment Associates II, the managing general partner of Associates V, and by Fund VI by virtue of his status as a shareholder of Investment Associates VI, the general partner of Associates VI. However, Mr. Ireland expressly disclaims beneficial ownership of the shares owned by Fund V and Fund VI, respectively.

(10) Includes 36,795 deferred shares held by Mr. Jackson pursuant to the Directors Policy.

(11) Does not include 16,587 deferred shares held by Mr. Kamin pursuant to the Directors Policy. Under an agreement with ValueAct Capital, Mr. Kamin is deemed to hold the deferred stock for the benefit of ValueAct Capital and indirectly for (i) VA Partners, LLC as general partner of ValueAct Capital (ii) ValueAct Capital Management, L.P. as the manager of ValueAct Capital and (iii) ValueAct Capital Management, LLC as general partner of ValueAct Capital Management, L.P. Also does not include 27,131,900 shares of common stock and one share of series A preferred stock of SIRVA owned by ValueAct Capital. Mr. Kamin is a managing member of VA Partners, LLC and ValueAct Capital Management, L.P. Mr. Kamin expressly disclaims beneficial ownership of the shares owned by ValueAct Capital, except to the extent of his pecuniary interest therein.

(12) Includes 53,653 deferred shares held by Sir Jeremy Mackenzie pursuant to the Directors Plan and the Directors Policy.

(13) Includes 26,522 deferred shares held by Mr. Miller pursuant to the Directors Policy.

34




(14) Includes 29,959 deferred shares held by Mr. Smialowski pursuant to the Directors Policy.

(15) Includes 13,472 deferred shares held by Mr. Tieken pursuant to the Directors Policy.

(16) Includes 645,060 shares issuable to Mr. Kelley upon exercise of options exercisable within 60 days. Mr. Kelley resigned as President and Chief Executive Officer of SIRVA, effective as of April 1, 2007.

(17) Mr. Kirksey’s employment as our Senior Vice President and Chief Financial Officer was terminated on June 7, 2007.

(18) Includes 75,147 shares issuable to Mr. Pickford upon exercise of options exercisable within 60 days.

(19) Includes 50,000 shares issuable to Mr. McMahon upon exercise of options exercisable within 60 days.

(20) Includes 75,720 shares issuable to Mr. Callahan upon exercise of options exercisable within 60 days.

(21) Includes 939,327 shares issuable upon exercise of options exercisable within 60 days, and 247,485 deferred shares held pursuant to the Directors Plan and the Directors Policy.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of SIRVA common stock to file reports with the SEC regarding their ownership and changes in ownership of our common stock. We believe that during 2006, our directors, executive officers and 10% stockholders complied with all Section 16(a) filing requirements. In making these statements, we have relied upon examination of the copies of Forms 3, 4 and 5 provided to us and the written representations of our directors and executive officers.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview of Compensation Program

The Compensation Committee (“Committee”) of SIRVA’s Board is responsible for establishing, implementing and monitoring adherence with SIRVA’s compensation philosophy and objectives, which are described below. The Committee is also responsible for ensuring that the total compensation paid to SIRVA’s “Named Executive Officers” and our other executive officers is fair, reasonable and competitive. SIRVA’s “Named Executive Officers” are those individuals who served as SIRVA’s Chief Executive Officer and Chief Financial Officer during 2006, as well as those other individuals included in the table under the heading “Summary Compensation Table” below, as determined under applicable SEC rules. While the Named Executive Officer group includes Brian P. Kelley, he resigned as our President and Chief Executive Officer and as a member of the Board effective April 1, 2007. Since that time, Robert W. Tieken, who has served on SIRVA’s Board since July 2006, has served as our Interim Chief Executive Officer. The Named Executive Officer group also includes J. Michael Kirksey, whose employment as our Senior Vice President and Chief Financial Officer was terminated on June 7, 2007. James J. Bresingham, our Executive Vice President and Chief Accounting Officer, has also served as our acting Chief Financial Officer since that time. The Board has engaged an outside search firm to assist in the recruitment of a permanent President and Chief Executive Officer and a permanent Senior Vice President and Chief Financial Officer.

Compensation Philosophy and Objectives

SIRVA’s compensation philosophy is that pay should be linked directly to, and highly differentiated as a result of, the success of SIRVA as a whole, its individual business segments, team and individual performance, and a desire to retain associates. Compensation design should foster a true meritocracy, and programs should promote superior performance. Compensation design should also be guided by, and supportive of, SIRVA’s Leadership Traits and Core Values. We believe that our success is dependant on each and every associate, particularly the Named Executive Officers, demonstrating these traits and embodying these values in everything that they do. They are a reflection of who we are and how we measure our performance. Our Leadership Traits and Core Values are:

Leadership Traits

 

 

Core Values

 

 

·

Energy—Bring strong personal passion and a bias for action

·

Unyielding Integrity—In everything we do, say and stand for

·

Energize—Positively mobilize others toward stretch goals

·

Customer Centric—Anticipate customer needs and meet rising expectations

·

Edge—Mental toughness to recognize and deal with reality

·

Associate Oriented—Fair, inclusive, upbeat work environment

·

Execute—Consistently deliver on commitments

·

Performance Based—Winning, relative to the external market

 

 

·

Leadership Based—A passion to be the best

 

Role of Executive Officers in Compensation Decisions

Our Chief Executive Officer and our Senior Vice President of Human Resources annually review the performance of each Named Executive Officer and our other executive officers (other than the Chief Executive Officer, whose performance is reviewed solely by the Committee after seeking input from the Board).

36




Following that process, in March of each year, the Senior Vice President of Human Resources presents an organizational review to the Board. During this review, succession planning is also considered, as well as strengths and development opportunities for the Named Executive Officers and our other executive officers. During this time, the Committee also determines annual bonus opportunities for the Named Executive Officers and our other executive officers and performance objectives for SIRVA, its business segments, and team and individual performance.

In June, our Senior Vice President of Human Resources presents to the Committee a competitive compensation review, along with relevant market compensation data and proposed adjustments to base salary and equity compensation levels and opportunities for the Named Executive Officers and our other executive officers. The Committee then considers all information presented, makes its decisions for the Named Executive Officers and our other executive officers, and seeks the ratification of the independent members of the Board on Chief Executive Officer compensation.

Setting Executive Compensation

The Committee has designed SIRVA’s compensation programs to motivate the Named Executive Officers and our other executive officers to achieve and exceed goals set by the Committee and to retain such individuals. To assist the Committee in setting these goals and monitor and review compensation levels and opportunities, the Committee has the ability to hire outside consultants and may terminate such consultants as necessary. In connection with this ability, the Committee has engaged Frederic W. Cook & Co., Inc. (the “Compensation Consultant”), an outside executive compensation consulting firm. The Compensation Consultant provides the Committee with, among other things, relevant market data and alternatives to consider when setting compensation levels and opportunities for the Named Executive Officers and our other executive officers. All of the Compensation Consultant’s work is performed at the direction of the Committee. Certain members of SIRVA’s management are involved in the work performed by the Compensation Consultant, and do so only at the direction of the Committee. Management does not retain an outside executive compensation consultant.

To assist it in making compensation decisions, the Committee has historically compared each element of total compensation against the compensation elements used by a peer group of publicly-traded companies of similar size to SIRVA, which are either direct business competitors (i.e., moving services, human resource outsourcing services, or mortgage/title/closing services) or companies that have one or more of the following characteristics:  business-to-business service provider; significant international operations; marketing, sales and account management focus; and/or customer service orientation (collectively, the “Compensation Peer Group”). The Committee annually reviews the Compensation Peer Group to determine if additions and/or deletions to the Compensation Peer Group are necessary. The companies comprising the Compensation Peer Group for 2006 were Affiliated Computer Service, Inc., ARAMARK, The Brink’s Company, Cintas, Dollar Thrifty Automotive Group, Inc., H&R Block, Hewitt Associates, IndyMac Bancorp, Inc., New Century Financial Corporation, PHH Corporation, Realogy Corporation, Inc. and ServiceMaster.

The Committee is currently working with the Compensation Consultant to revise the Compensation Peer Group for 2007 to reflect changes in SIRVA’s business portfolio and replace companies that are no longer independent, publicly traded companies.

The Committee does not have pre-established policies or targets for the allocation between either cash or equity, or short-term or long-term incentives, but instead annually determines the proper mix in light of SIRVA’s compensation philosophy and objectives. To attract and retain experienced talent, the Committee generally sets base salary for Named Executive Officers and our other executive officers at the 50th percentile of the base salary paid to similarly situated executives of the Compensation Peer Group. Total target cash compensation, comprised of base pay plus target annual bonus, has been generally set for Named Executive Officers and other executive officers at the 75th percentile. Variations to these

37




percentiles may occur due to the experience level of the individual and market factors, including the availability of experienced personnel for that position, competitive market data, and industry trends. Actual compensation paid to the Named Executive Officers and our other executive officers can fall below or exceed target levels depending upon the financial results of SIRVA and its business segments, and team and individual performance.

2006 Executive Compensation Components

For SIRVA’s fiscal year ended December 31, 2006, the principal components of compensation for the Named Executive Officers were base salary, annual bonuses and commissions, retirement and other separation benefits, and perquisites and other personal benefits.

For 2006, SIRVA’s compensation practices focused on cash and short-term incentives to reward and retain its associates, including the Named Executive Officers. This is because SIRVA has been unable to grant equity to any associate, including our Named Executive Officers, because it is not current in its financial reporting with the SEC. Our Named Executive Officers other than Mr. Kirksey do, however, hold equity that provide long-term incentives under our stock incentive plans, which are described in connection with the information provided by the table under the heading “Outstanding Equity Awards at Fiscal Year-End” and the discussion under the heading “Potential Payments Upon Termination Or Change-In-Control” below.

Base Salary

SIRVA provides the Named Executive Officers with a base salary to compensate them for services rendered during the fiscal year at a threshold level. The base salary range for 2006 was determined for each Named Executive Officer based on his position and level of responsibility through the use of market data. Also considered was an internal review of the Named Executive Officer’s compensation, both individually and relative to other executive officers, as well as the individual’s performance. Base salary ranges were designed so that base salary for a given position was between 80% and 120% of the midpoint of the base salary established for each range.

As previously noted, base salary levels are (and were for 2006) determined as part of SIRVA’s performance review process, which includes examining compensation levels upon an individual’s promotion or other change in job responsibility. The key factors for assessing an individual’s performance for 2006 included the achievement of goals and objectives established by the Committee, whether SIRVA met and/or exceeded financial objectives, and/or continued demonstration of SIRVA’s Leadership Traits and Core Values.

Annual Bonuses and Commissions

SIRVA grants annual bonus opportunities to the Named Executive Officers under its Management Incentive Plan (“MIP”). The MIP gives the Committee latitude to design annual bonus opportunities that promote the achievement of corporate goals, the growth of stockholder value, and the participation in the growth and profitability of SIRVA by Named Executive Officers. The Committee does this by establishing multiple performance objectives under the MIP for each Named Executive Officer. Additionally, one of our Named Executive Officers, Timothy P. Callahan, participates in our Global Sales Leader Compensation Plan, which is a commission-based plan and is more fully described below.

In March 2006, the Committee set minimum, target and maximum levels for each of the performance  objectives under the MIP and designed annual bonus opportunities so that Named Executive Officers could receive significant rewards for superior performance, smaller payments for performance that exceeded threshold levels but did not satisfy target levels, and no payments for performance that did not exceed threshold levels.

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For 2006, 90% of a Named Executive Officer’s annual bonus opportunity was based upon achievement of performance objectives relating to SIRVA’s Operating Income, business segment Operating Income and Corporate Cash Objectives, with each component accounting for 20%, 40% and 30%, respectively, of the annual bonus opportunity. SIRVA’s Operating Income is defined as gross profit minus operating expenses. It measures the pre-tax, pre-interest profit from SIRVA’s operations. Business segment Operating Income is defined as the applicable business gross profit minus operating expenses. Corporate Cash is defined as cash earnings (EBITDA) from continuing operations adjusted for net changes in working capital (including relocation financing facilities), net changes in other assets and liabilities, and capital expenditures. Corporate Cash does not include extraordinary items such as the sale of continental Europe moving operations (and the related fees and expenses), pension fund contributions, legal settlements, or other one-time, non-recurring items. The remaining 10% of a Named Executive Officer’s annual bonus opportunity was based upon individual performance against SIRVA’s Leadership Traits and Core Values as described above under the heading “—Compensation Philosophy and Objectives.”

As required by the MIP, following receipt of SIRVA’s financial results for 2006, the Committee assessed SIRVA’s performance against each performance objective by comparing the actual fiscal year results to the pre-determined minimum, target and maximum levels for each objective. An overall percentage amount for the total corporate performance objective is then calculated.

SIRVA failed to meet the threshold performance objectives for 2006, as determined by the Committee. However, to recognize individual achievements and for retention purposes, the Committee authorized the payment of discretionary annual bonuses to the Named Executive Officers. Given the efforts of Named Executive Officers in a difficult year, the Committee believed that the discretionary bonus payments were consistent with SIRVA’s compensation philosophy and objectives which, among other things, includes retaining, motivating, and rewarding executive officers by providing such individuals with an opportunity to earn compensation based on their contributions to and effects on behalf of SIRVA.

Each of the Named Executive Officers received the following payments in January for 2006, which are reflected in the Bonus column of the Summary Compensation Table below:

Named Executive Officer

 

 

 

Discretionary 2006 Bonus

 

Brian P. Kelley

 

 

$

325,000

 

 

J. Michael Kirksey

 

 

$

100,000

 

 

Kevin D. Pickford

 

 

$

125,000

 

 

Michael B. McMahon

 

 

$

135,000

 

 

Timothy P. Callahan

 

 

$

45,000

 

 

 

Mr. Callahan also participated in SIRVA’s Global Sales Leader Compensation Plan, which provided him with additional annual compensation of 37.5% (at target) of his base salary. This plan is a commission-based plan that targets sales and operational metrics. Commissions were paid based on the achievement of budgeted “eligible home sale transactions”, budgeted “domestic moving volume” and budgeted “international moving volume” (as each such term is defined below), with each component accounting for 60%, 35% and 5% of the target, respectively. Mr. Callahan received $89,057 under this plan for 2006, which is reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. “Eligible home sale transactions” are actual home sale closing, home sale assistance and home finding transactions. “Domestic moving volume” is the actual number of household goods shipments originating in the United States with a final destination in the United States, from either of our northAmerican or Allied van lines, generated by corporate accounts in excess of budget. “International moving volume” is the actual number of household goods shipments either originating from the United States with a final destination in another country or originating from another country with the final destination in the United States from either of our northAmerican or Allied van lines, generated by corporate accounts in excess of budget.

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On March 31, 2007, the Committee amended and restated the MIP, which resulted in certain non-material revisions. The revised MIP was approved by SIRVA’s stockholders at SIRVA’s 2006 annual meeting held on June 6, 2007. As approved, the MIP will permit awards to continue to qualify as “performance-based compensation” under section 162(m) of the Code. Also on March 31, 2007, the Committee established the 2007 bonus opportunities for the Named Executive Officers, as well as the 2007 target performance objectives, which were subject to stockholder approval of the revised MIP. The target performance objectives for 2007 are considered confidential, which could cause competitive harm to us if disclosed. The Committee believes that the target performance objectives in any given year should not be easily achievable and would not typically be achieved all of the time. As for obtaining the maximum performance objectives, the Committee believes that this would typically be achieved less often than the target performance objectives. However, the Committee recognizes that the likelihood of achievement of the performance objectives in any given year may be different, and believes that the payment under the MIP should be appropriate for the performance, regardless of how often it may happen.

Retirement and Other Benefits

Executive Retirement Savings Plan

SIRVA’s Executive Retirement Savings Plan (the “ERSP”) is a non-qualified retirement savings plan pursuant to which our senior executives, including the Named Executive Officers other than Kevin D. Pickford, who earned greater than $100,000 and were in Executive Salary bands in the previous year participate. This plan is unfunded and all benefits will be paid from the general assets of SIRVA. SIRVA has established the ERSP to provide additional deferral opportunities to associates to enhance their retirement savings opportunities and to increase retention. This plan is described in greater detail under the heading “Non-Qualified Deferred Compensation” below, and the amounts contributed by SIRVA on behalf of the Named Executive Officers are reflected in the Registrant Contributions in Last Fiscal Year column of the Non-Qualified Deferred Compensation table.

In lieu of participation in the ERSP, one of our Named Executive Officers, Mr. Pickford, participates in an Australian superannuation fund, which is a non-qualified retirement savings plan to which SIRVA contributes. This plan is similar to the ERSP, except that this fund’s assets are set aside from SIRVA’s general assets in a separate account to pay Mr. Pickford’s account balance at termination or other distribution event.  This fund also provides certain additional death benefits to Mr. Pickford and his beneficiaries. For example, if Mr. Pickford dies or becomes permanently disabled, he (or his beneficiaries) would be entitled to certain additional payments in addition to payment of his account balance. This fund is more fully described under the heading “Non-Qualified Deferred Compensation” below, and the amounts contributed by SIRVA on behalf of Mr. Pickford are reflected in the Registrant Contributions in Last Fiscal Year column of the Non-Qualified Deferred Compensation table.

Other Benefits

In addition, the Named Executive Officers may participate in company-wide plans and programs, such as the 401(k) plan (including company match), group medical and dental, vision, long- and short-term disability, group life insurance, accidental death and dismemberment insurance, business travel accident insurance, health care and dependent care spending accounts, retiree medical, and other benefits, in accordance with the terms of the programs.

Post-Termination Compensation

We have entered into employment agreements with our Named Executive Officers. These agreements provide for, among other things, certain payments and other benefits if the Named Executive Officer’s employment terminates under certain circumstances, including in the event of a “change in control”. See

40




the discussion under the heading “Potential Payments Upon Termination Or Change-In-Control” below. Other material provisions are described under the heading “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table.” The Committee believes that these agreements are an important part of overall compensation because they help to retain such individuals. The Committee also believes that these agreements are important as a recruitment device, as most of the companies with which we compete for executive talent have similar agreements in place for their senior employees.

Perquisites and Other Personal Benefits

SIRVA provides Named Executive Officers with perquisites and other personal benefits that the Committee believes are reasonable, consistent with SIRVA’s compensation philosophy and objectives, and better enable SIRVA to attract and retain superior individuals for key positions. The Committee periodically reviews and adjusts the levels of perquisites and other personal benefits provided to Named Executive Officers.  The value of these personal benefits to the Named Executive Officers for 2006, as calculated under applicable SEC rules, are included in the All Other Compensation column of the Summary Compensation Table below.

For 2006, the Named Executive Officers other than Mr. Pickford were provided an annual car allowance, financial planning assistance, and an executive physical allowance. The annual car allowance is intended to compensate Named Executive Officers for wear and tear and mileage on personal vehicles when used for SIRVA’s business purposes. The financial planning benefit is available to Named Executive Officers to assist them with certain issues, such as retirement planning, estate planning, asset management, tax preparation, and tax and/or wealth preservation planning. In addition, during 2006, SIRVA leased an apartment for Mr. Kelley and Mr. Callahan (which was shared with another executive officer). At the time Mr. Kelley was hired in 2002, because he chose not to relocate to Illinois for personal reasons, SIRVA agreed to lease an apartment for him in lieu of the relocation benefits that he would have otherwise been provided. Mr. Callahan’s apartment was provided to him because the relocation businesses, which are the businesses for whose sales he had responsibility during 2006, were based in Cleveland, Ohio, and because at various times through the year, SIRVA required him to be available at its headquarters in Illinois. For 2006, Mr. Pickford was provided with a leased company car in the United Kingdom, a U.K. housing allowance, the storage of household goods in Australia, and company-paid airfare to and from Australia.

Tax and Accounting Implications

Deductibility of Executive Compensation

When setting compensation levels and opportunities, the Committee reviews and considers the deductibility of executive compensation under section 162(m) of the Code, which provides that a company may not deduct compensation of more than $1,000,000 that is paid to the Named Executive Officers, unless an exception applies. Under a special rule that applies to corporations that become publicly held through an initial public offering, section 162(m) of the Code has not applied to the amounts paid or equity granted pursuant to the MIP or our Omnibus Stock Incentive Plan. However, this special rule expired at our 2006 annual meeting, which took place on June 6, 2007. To ensure that the compensation paid to the Named Executive Officers under the MIP and our Omnibus Stock Incentive Plan would continue to be deductible under a potentially applicable exemption, we sought and obtained the approval of the MIP and our Omnibus Stock Incentive Plan, including the material terms of the performance goals under the MIP and our Omnibus Stock Incentive Plan, by our stockholders at the 2006 annual meeting. SIRVA believes that the compensation paid under the MIP and our Omnibus Stock Incentive Plan will be generally exempt from section 162(m) of the Code and, therefore, be fully deductible for federal income tax purposes. However, in certain situations, the Committee may approve compensation that will not meet these requirements in order to meet other objectives.

41




Non-Qualified Deferred Compensation

On October 22, 2004, the American Jobs Creation Act of 2004 was signed into law, changing the tax rules applicable to non-qualified deferred compensation arrangements. SIRVA believes it is operating in good faith compliance with the statutory provisions, which were effective January 1, 2005. A more detailed discussion of the Company’s non-qualified deferred compensation arrangements for the Named Executive Officers is provided above under the heading “—Retirement and Other Benefits” above and under the Non-Qualified Deferred Compensation Table below.

Accounting for Stock-Based Compensation

Beginning on January 1, 2006, SIRVA began accounting for stock-based payments awarded under its Omnibus Stock Incentive Plan and its Stock Incentive Plan in accordance with the requirements of SFAS No. 123(R), Share-Based Payment. The accounting treatment of any stock-based payments, however, is not determinative of the type, timing, or amount of any particular grant of equity-based compensation to our associates.

Compensation Committee Report

The Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

The Compensation Committee*

Joseph A. Smialowski, Chairman (effective May 1, 2007)
Robert J. Dellinger
Sir Jeremy Mackenzie
John R. Miller


*                    As of December 31, 2006, the Compensation Committee consisted of Kathleen J. Affeldt, Sir Jeremy Mackenzie, Joseph A. Smialowski and Carl T. Stocker. These individuals were responsible for performing the Compensation Committee’s duties and responsibilities during 2006. Until their resignations from the Board in April 2007, Ms. Affeldt and Mr. Stocker continued to assist the Committee in performing its duties and responsibilities.

42




Summary Compensation Table

The table below summarizes the total compensation paid or earned by each of the Named Executive Officers during 2006. When setting total compensation for each of the Named Executive Officers, the Committee uses the process described above under the heading “Compensation Discussion and Analysis—Setting Executive Compensation.”

Name & Principal Position

 

 

 

Year

 

Salary

 

Bonus
(1)

 

Non-Equity 
Incentive Plan
Compensation
(2)

 

All Other
Compensation
(3)

 

Total

 

Brian P. Kelley(4)

 

2006

 

$

650,000

 

$

325,000

 

 

$

 

 

 

$

58,381

 

 

$

1,033,381

 

President and Chief Executive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

J. Michael Kirksey

 

2006

 

$

450,000

 

$

100,000

 

 

$

 

 

 

$

211,215

 

 

$

761,215

 

Senior Vice President and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chief Financial Officer(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kevin D. Pickford(6)

 

2006

 

$

324,878

 

$

125,000

 

 

$

 

 

 

$

172,501

 

 

$

622,379

 

President and Managing Director, Europe

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael B. McMahon(7)

 

2006

 

$

300,000

 

$

135,000

 

 

$

 

 

 

$

45,585

 

 

$

480,585

 

President, Global Relocation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timothy P. Callahan

 

2006

 

$

250,000

 

$

45,000

 

 

$

89,057

 

 

 

$

48,396

 

 

$

432,453

 

Senior Vice President,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


(1)          The amounts shown in this column are the discretionary annual bonuses paid to the Named Executive Officers that were authorized during December 2006 to recognize individual achievements and for retention purposes. These amounts were paid in January 2007. See the discussion under the heading “Compensation Discussion and Analysis—2006 Executive Compensation Components—Annual Bonuses and Commissions” above.

(2)          The amount shown in this column constitutes payments made under SIRVA’s Global Sales Leader Commission Plan. See the discussion under the heading “Compensation Discussion and Analysis—2006 Executive Compensation Components—Annual Bonuses and Commissions” above.

(3)          The amounts in this column include perquisites and other personal benefits unless the total amount of perquisites received by the Named Executive Officer does not exceed $10,000. In accordance with applicable SEC rules, where the perquisites received by a Named Executive Officer meet the reporting threshold, each perquisite is identified and each perquisite valued at the greater of $25,000 or 10% of total perquisites is also separately quantified in this footnote. The amounts shown in this column for Mr. Kelley include a car allowance, financial planning assistance, the cost of leasing a corporate apartment for Mr. Kelley, executive physical, and contributions to SIRVA’s 401(k) plan and to SIRVA’s ERSP, as described above under the heading “Compensation Discussion and Analysis—Retirement and Other Benefits—Executive Retirement Savings Plan.” The amounts shown in this column for Mr. Kirksey include a car allowance, financial planning assistance, executive physical, contributions to SIRVA’s 401(k) plan and to SIRVA’s ERSP, relocation services ($106,528), and reimbursement of income taxes paid in connection with the receipt of such relocation services ($66,799). The amounts shown in this column for Mr. Pickford include the cost of a leased company car in the United Kingdom, a housing allowance ($94,046), the storage of household goods in Australia, airline tickets for return flights to and from Australia, and contributions to Mr. Pickford’s

43




Australian superannuation fund ($37,537). The amounts shown in this column for Mr. McMahon include a car allowance, financial planning, executive physical, and contributions to SIRVA’s 401(k) plan and to SIRVA’s ERSP. The amounts shown in this column for Mr. Callahan include a car allowance, financial planning, the cost of leasing a corporate apartment for Mr. Callahan, executive physical, and contributions to SIRVA’s 401(k) plan and to SIRVA’s ERSP. See the discussion under the heading “Compensation Discussion and Analysis—2006 Executive Compensation Components—Perquisites and Other Personal Benefits” above.

(4)          Mr. Kelley resigned as a Director and our President and Chief Executive Officer, effective as of April 1, 2007.

(5)          Mr. Kirksey’s employment as our Senior Vice President and Chief Financial Officer was terminated on June 7, 2007.

(6)          Mr. Pickford’s salary and perquisites were paid in British pound sterling (“GBP”). These payments were converted into U.S. dollars using a conversion rate of 0.51048 GBP per U.S. dollar as of the close of business on December 29, 2006 as reported at www.oanda.com/convert/classic. The costs associated with the storage of Mr. Pickford’s household goods and the contributions to Mr. Pickford’s Australian superannuation fund were paid in Australian dollars (“AUD”). These costs were converted into U.S. dollars using a conversion rate of 1.27084 AUD per U.S. dollar as of the close of business on December 29, 2006 as reported at www.oanda.com/convert/classic.

(7)          Mr. McMahon deferred a portion of his reported salary under SIRVA’s ERSP, which is included in the Non-Qualified Deferred Compensation Table below.

Grants of Plan-Based Awards

The table below provides information about non-equity awards granted to the Named Executive Officers in 2006 under the MIP. As noted under the heading “Compensation Discussion and Analysis—2006 Executive Compensation Components—Annual Bonuses and Commissions” above, SIRVA failed to meet its threshold performance objectives in 2006, and none of these awards were paid. Reported in the Summary Compensation Table above are the discretionary annual bonus amounts that were authorized during December 2006 to recognize individual achievements and for retention purposes. These amounts were paid in January 2007. SIRVA did not make any equity incentive plan awards, stock awards or option awards to the Named Executive Officers in 2006.

 

 

Estimated Future Payouts Under Non-Equity Incentive Plan Awards

 

Name

 

 

 

Threshold

 

Target

 

Maximum

 

Brian P. Kelley

 

$

190,000

 

$

650,000

 

$

910,000

 

J. Michael Kirksey

 

$

135,000

 

$

360,000

 

$

450,000

 

Kevin D. Pickford

 

$

102,844

 

$

257,111

 

$

342,815

 

Michael B. McMahon

 

$

90,000

 

$

250,000

 

$

300,000

 

Timothy P. Callahan

 

37,500 (MIP)

 

93,750 (MIP)

 

$

125,000 (MIP)

 

 

 

No Minimum (CP)

 

$

93,750 (CP)

 

No Minimum (CP)

 


(1)          The amounts shown in the Threshold column reflect the minimum performance objectives under SIRVA’s MIP. The estimated future payout amounts are based on the individual’s current salary and position.

(2)          The amounts shown in this table for Mr. Callahan include grants under the SIRVA, Inc. Global Sales Leader Compensation Plan (“CP”). As noted under the heading “Compensation Discussion and Analysis—2006 Executive Compensation Components—Annual Bonuses and Commissions” above, Mr. Callahan receives a commission under this plan, which targets the achievement of sales and operational metrics.

44




Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

Brian P. Kelley.   Mr. Kelley served as our President and Chief Executive Officer until his resignation as of April 1, 2007. Mr. Kelley’s employment agreement provided for an annual base salary of $650,000 in 2005, as well as for participation in the MIP, with a maximum annual bonus opportunity of up to 100% of his annual base salary. Because Mr. Kelley resigned voluntarily, he was not entitled to any post-termination payments pursuant to his employment agreement or otherwise.

J. Michael Kirksey.   Mr. Kirksey served as our Senior Vice President and Chief Financial Officer until his departure on June 7, 2007. Mr. Kirksey’s employment agreement provided for a base salary of $450,000 and participation in the MIP, with a maximum annual bonus opportunity of up to 80% of his base salary. Mr. Kirksey was also entitled to the benefits and eligible for perquisites and other personal benefits described above under the headings “Compensation Discussion and Analysis—2006 Executive Compensation Components—Retirement and Other Benefits,” and “Compensation Discussion and Analysis—2006 Executive Compensation Components—Perquisites and Other Personal Benefits.” The termination provisions applicable to Mr. Kirksey are described under the heading “Potential Payments Upon Termination or Change-In-Control” below.

Kevin D. Pickford.   Mr. Pickford serves as our President and Managing Director, Europe pursuant to an employment agreement, which provides for an annual base salary (currently $324,878) and participation in the MIP, with a maximum annual bonus opportunity of up to 75% of his annual salary. Mr. Pickford is also entitled to the storage of household goods in Australia, certain relocation benefits (none provided during 2006), a U.K. housing allowance, company-paid airfare to and from Australia, an Australian superannuation fund and a leased company car in the United Kingdom. The termination provisions applicable to Mr. Pickford are described under the heading “Potential Payments Upon Termination or Change-In-Control” below.

Michael B. McMahon.   Mr. McMahon serves as President, Global Relocation pursuant to an employment agreement, which provides for an annual base salary (currently $400,000) and participation in the MIP, with a maximum annual bonus opportunity of up to 80% of his base salary. Mr. McMahon is also entitled to the benefits, and eligible for perquisites and other personal benefits, described above under the headings “Compensation Discussion and Analysis—2006 Executive Compensation Components—Retirement and Other Benefits” andCompensation Discussion and Analysis—2006 Executive Compensation Components—Perquisites and Other Personal Benefits.” The termination provisions applicable to Mr. McMahon are described under the heading “Potential Payments Upon Termination or Change-In-Control” below.

Timothy P. Callahan.   Mr. Callahan serves as our Senior Vice President, Global Sales with an annual base salary of $250,000. Mr. Callahan is also eligible for the benefits, and perquisites and other personal benefits, described above under the headings “Compensation Discussion and Analysis—2006 Executive Compensation Components—Retirement and Other Benefits” and “Compensation Discussion and Analysis—2006 Executive Compensation Components—Perquisites and Other Personal Benefits.” The termination provisions applicable to Mr. Callahan are described under the heading “Potential Payments Upon Termination or Change-In-Control” below.

45




Outstanding Equity Awards At Fiscal Year-End

The table below summarizes the outstanding equity awards held by each of the Named Executive Officers as of December 31, 2006. SIRVA did not make any equity incentive plan awards, stock awards or option awards to the Named Executive Officers in 2006.

 

Option Awards

 

Name

 

 

 

Number of 

Securities

 Underlying

 Unexercised 

Options 

Exercisable

 

Number of 

Securities 

Underlying 

Unexercised 

Options 

Unexercisable (1)

 

Equity 

Incentive Plan 

Awards: 

Number of 

Securities 

Underlying 

Unexercised

Unearned 

Options

 

Option 

Exercise Price

 

Option 

Expiration Date

 

Brian P. Kelley(2)

 

 

532,560

 

 

 

 

 

 

 

 

 

$

4.48

 

 

 

11/15/2012

 

 

 

 

112,500

 

 

 

 

 

 

 

 

 

$

18.50

 

 

 

11/24/2010

 

 

J. Michael Kirksey

 

 

 

 

 

 

 

 

 

 

 

$

 

 

 

 

 

Kevin D. Pickford

 

 

15,850

 

 

 

 

 

 

 

 

 

$

4.48

 

 

 

12/14/2011

 

 

 

 

5,000

 

 

 

5,000

 

 

 

 

 

 

$

19.90

 

 

 

12/01/2011

 

 

 

 

11,250

 

 

 

3,750

 

 

 

 

 

 

$

18.50

 

 

 

11/24/2010

 

 

 

 

43,047

 

 

 

4,503

 

 

 

 

 

 

$

4.48

 

 

 

12/22/2009

 

 

Michael B. McMahon

 

 

12,500

 

 

 

12,500

 

 

 

 

 

 

$

19.90

 

 

 

12/01/2011

 

 

 

 

 

37,500

 

 

 

12,500

 

 

 

 

 

 

$

24.33

 

 

 

4/19/2011

 

 

Timothy P. Callahan

 

 

50,720

 

 

 

12,680

 

 

 

 

 

 

$

4.48

 

 

 

11/15/2012

 

 

 

 

2,500

 

 

 

2,500

 

 

 

 

 

 

$

19.90

 

 

 

12/01/2011

 

 

 

 

22,500

 

 

 

7,500

 

 

 

 

 

 

$

18.50

 

 

 

11/24/2010

 

 


(1)          The vesting schedule is shown below based on the expiration dates of the above grants:

Option Expiration Date

 

 

 

Vesting Schedule

November 15, 2012

 

Vest in full on November 15, 2007

December 1, 2011

 

Vest in equal installments on December 1, 2007 and December 1, 2008

April 19, 2011

 

Vest in full on April 19, 2008

November 24, 2010

 

Vest in full on November 24, 2007

December 22, 2009

 

Vest in full on December 22, 2008

 

(2)          Upon his resignation of employment as of April 1, 2007, all unvested options were forfeited. Currently, Mr. Kelley’s ability to exercise his vested options is suspended until SIRVA becomes current with its SEC report filings. Once current, SIRVA anticipates that Mr. Kelley’s options will be exercisable for a limited period.

Option Exercises and Stock Vested

SIRVA’s Named Executive Officers did not exercise any options or vest in any stock awards during 2006.

Pension Benefits

SIRVA’s Named Executive Officers did not participate in any defined benefit pension plans during 2006.

46




Non-Qualified Deferred Compensation

Name

 

 

 

Executive 

Contributions in

Last Fiscal Year

 

Registrant 

Contributions 

in Last

Fiscal Year(1)

 

Aggregate

Earnings in

Last Fiscal Year

 

Aggregate 

Withdrawals/ 

Distributions(2)

 

Aggregate Balance 

at Last 

Fiscal Year-End

 

Brian P. Kelley

 

 

$

 

 

 

$

6,500

 

 

 

$

3,122

 

 

 

$

 

 

 

$

82,139

 

 

J. Michael Kirksey

 

 

$

 

 

 

$

4,500

 

 

 

$

27

 

 

 

$

 

 

 

$

2,811

 

 

Kevin D. Pickford

 

 

$

 

 

 

$

37,537

 

 

 

$

33,941

 

 

 

$

12,970

 

 

 

$

267,807

 

 

Michael B. McMahon

 

 

$

9,000

 

 

 

$

7,500

 

 

 

$

2,601

 

 

 

$

 

 

 

$

39,239

 

 

Timothy P. Callahan

 

 

$

 

 

 

$

2,500

 

 

 

$

72

 

 

 

$

 

 

 

$

6,401

 

 


(1)          These amounts are also included in the All Other Compensation column of Summary Compensation Table.

(2)          These amounts reflect distributions to cover taxes and insurance premiums under Mr. Pickford’s Australian superannuation fund.

SIRVA’s ERSP is a non-qualified retirement savings plan pursuant to which our senior executives, including the Named Executive Officers other than Mr. Pickford, who earned greater than $100,000 and were in Executive Salary bands in the previous year participate. This plan is unfunded and all benefits will be paid from the general assets of SIRVA. SIRVA has established the ERSP to provide additional deferral opportunities to associates to enhance their retirement savings opportunities and to increase retention.

Deferral elections are made by senior executives during November of each year for amounts to be earned in the following year. An executive may defer all or a portion of his annual bonus compensation and up to 50% of his annual salary. Under the ERSP, SIRVA matches 50% of the first 6% of pay that is contributed to the ERSP. In addition, SIRVA will make an annual contribution, regardless of whether or not he or she is enrolled in the ERSP, equal to 1% of annual base salary. All contributions by the senior executives are fully vested upon contribution, and all matching contributions become vested after three years of continuous service.

Account balances are hypothetically invested in various investment alternatives that are selected by SIRVA. There are ten investment alternatives currently available under the ERSP. The table below shows the funds available under the ERSP and their annual rate of return for 2006, as reported by the administrator of the ERSP.

Name of Fund

 

 

 

Rate of Return

 

ClearBridge Advisors Large Cap Value

 

 

17.6

%

 

BlackRock Equity Index

 

 

15.5

%

 

Capital Guardian Diversified Research

 

 

11.9

%

 

Capital Guardian Equity

 

 

8.7

%

 

BlackRock Small-Cap Index Fund

 

 

17.8

%

 

MFS International Large Cap

 

 

27.0

%

 

Oppenheimer Multi-Strategy

 

 

11.7

%

 

PIMCO Managed Bond

 

 

4.8

%

 

PIMCO Inflation Managed

 

 

0.5

%

 

Pacific Life Money Market

 

 

4.7

%

 

 

47




Benefits under the ERSP normally are paid upon retirement or termination of employment. Alternatively, a senior executive may elect to have his or her account balance paid at a specified year in the future if prior to a separation of service. The specified year must be at least five years after the deferral election.  Upon death or a showing of disability or financial hardship (as each such term is defined in the ERSP), a senior executive may be allowed to access funds in his deferred compensation account earlier than the five-year period. Benefits can be received as a lump sum payment or in substantially equal monthly or annual installments.

In lieu of participation in the ERSP, Mr. Pickford participates in an Australian superannuation fund, which is a non-qualified retirement savings plan to which SIRVA contributes approximately 11% of his base salary. This plan is similar to the ERSP, except that this fund’s assets are set aside from SIRVA’s general assets in a separate account to pay Mr. Pickford’s account balance at termination or other distribution event.  Mr. Pickford is fully vested in his account balance. Benefits are generally paid upon retirement or termination of employment in a lump sum or in installments. This fund also provides certain additional death benefits to Mr. Pickford and his beneficiaries. For example, if Mr. Pickford dies or becomes permanently disabled, he (or his beneficiaries) would be entitled to certain additional payments in addition to payment of his account balance.

There are four investment alternatives currently available under this fund. The table below shows the funds available under this fund and their annual rate of return for 2006, as reported by the administrator of this fund.

Name of Fund

 

 

 

Rate of Return

 

AMP Cash Plus

 

 

3.2

%

 

AMP Secure Choice

 

 

4.7

%

 

Lazard Global Thematic

 

 

10.3

%

 

AMP Balanced Growth

 

 

15.7

%

 

 

Potential Payments Upon Termination or Change-In-Control

The narrative and tables below describe the potential payments to each Named Executive Officer in the event of termination of such Named Executive Officer’s employment. The amount of payments to each Named Executive Officer upon any termination of employment and upon his death or disability, retirement, voluntary termination, involuntary not-for-cause termination, for cause termination and termination upon or following a change of control are shown below. The amounts shown below assume that such termination was effective as of December 29, 2006, and thus include amounts earned through such time. These amounts are only estimates of the amounts that would actually be paid to the Named Executive Officers upon termination, and it is possible that different arrangements could be negotiated in connection with an actual termination of employment or change in control. The actual amounts to be paid can only be determined at the time of such executive’s separation from SIRVA, and they could be more or less than those disclosed here.

As described above in the narrative disclosure to the Summary Compensation Table and the Grant of Plan-Based Awards Table, SIRVA has entered into employment agreements with each Named Executive Officer. Where applicable, the material terms of these employment agreements are described below. In addition, SIRVA maintains two separate stock incentive plans:  the SIRVA, Inc. Omnibus Stock Incentive Plan (the “Omnibus Plan”) and the SIRVA, Inc. Stock Incentive Plan (the “Incentive Plan”). Where applicable, the material terms of these plans are described below.

As noted above, Mr. Kelley voluntarily resigned as a Director and as our President and Chief Executive Officer effective as of April 1, 2007. As a result of Mr. Kelley’s voluntary resignation, he was not entitled to any severance from SIRVA, except that he was entitled to a distribution of his account balance under the ERSP, which was approximately $86,000. As a result, we have not described Mr. Kelley’s severance arrangements with SIRVA.

48




In addition, as noted above, Mr. Kirksey’s employment with SIRVA was terminated on June 7, 2007. As a result of Mr. Kirksey’s termination, under his employment agreement, he is entitled to receive a lump sum payment equal to a pro rata portion of his annual bonus under the MIP for the year of termination, based on performance through Mr. Kirksey’s termination date, and continued payment of his then current base salary and benefits for the period ending on the earlier of (a) twelve months after the termination date and (b) the date he accepts new employment or a consulting arrangement with a base salary or consulting fee equal to or greater than 80% of his base salary. Mr. Kirksey is also entitled to a distribution of his account balance under the ERSP, which is approximately $1,800. Mr. Kirksey is required to enter into a general release of claims and separation agreement with us in order to receive any of compensation and benefits described above.

Payments Made Upon Any Termination of Employment

Regardless of the manner in which a Named Executive Officer’s employment terminates, he will be entitled to receive amounts earned and unpaid during his term of employment in lump sum. Such amounts include: accrued and unpaid base salary, and accrued and unpaid annual bonus for the year completed prior to termination (no annual bonus is paid for the year of termination unless contractually required); accrued vacation pay; and  amounts accrued and vested under the ERSP.

Payments Made Upon Death or Disability

In the event of death or disability, a Named Executive Officer, in addition to the payments identified above under the heading “—Payments Made Upon Any Termination of Employment,” will immediately vest in full in all options under the Omnibus Plan and those options may be exercised until the first anniversary of such termination. If the Named Executive Officer holds any options under the Incentive Plan, the Named Executive Officer will have to exercise his vested options under the Incentive Plan by the six-month anniversary of such termination and their normal expiration date, whichever is earlier.

Payments Made Upon Retirement

In the event of the retirement of a Named Executive Officer, in addition to the payments identified above under the heading “—Payments Made Upon Any Termination of Employment,” the Named Executive Officer will have to exercise his vested options under the Omnibus Plan by the first anniversary of such termination or their normal expiration date, whichever is earlier. If, however, the Named Executive Officer agrees to be bound by and complies with certain restrictive covenants, including customary non-competition, non-solicitation, non-disclosure and non-disparagement covenants, during the three-year period following his retirement, the Named Executive Officer will continue to vest in all options outstanding under the Omnibus Plan, and those options may generally be exercised until the earlier of the third anniversary of such termination and their normal expiration date. If the Named Executive Officer holds any options under the Incentive Plan, the Named Executive Officer will have to exercise his vested options under the Incentive Plan by the six-month anniversary of such termination or their normal expiration date, whichever is earlier.

Payments Made Upon Voluntary Termination

In the event of the voluntary termination of a Named Executive Officer, the Named Executive Officer will only be entitled to the payments identified above under the heading “—Payments Made Upon Any Termination of Employment.”  In addition, the Named Executive Officer will have to exercise his vested options under the Omnibus Plan by the 90th day after such termination or their normal expiration date, whichever is earlier. If the Named Executive Officer holds any options under the Incentive Plan, the Named Executive Officer will have to exercise his vested options under the Incentive Plan by the 90th day after such termination or their normal expiration date, whichever is earlier.

Under Mr. Pickford’s employment agreement, Mr. Pickford must provide SIRVA with six months’ prior notice to terminate his employment.

49




Payments Made Upon Involuntary Not-For-Cause Termination

In the event of an involuntary not-for-cause termination of a Named Executive Officer (which includes a termination by SIRVA without cause or by the Named Executive Officer for good reason (to the extent applicable)), the Named Executive Officer will only be entitled to the payments identified above under the heading “—Payments Made Upon Any Termination of Employment.”  In addition, the Named Executive Officer will have to exercise his vested options under the Omnibus Plan by the 90th day after such termination or their normal expiration date, whichever is earlier. If the Named Executive Officer holds any options under the Incentive Plan, the Named Executive Officer will have to exercise his vested options under the Incentive Plan by the 90th day after such termination or their normal expiration date, whichever is earlier.

In addition, with respect to options granted under the Omnibus Plan, if the Named Executive Officer, directly or indirectly, competes with any business in which he was employed (or in which we have documented plans to become engaged of which the Named Executive Officer has knowledge at the time of his termination), solicits any of our employees, or discloses or misuses any confidential information during the Named Executive Officer’s employment with us, during any post-termination option exercise period, or during the one-year period ending after the expiration of any post-termination option exercise period, the Named Executive Officer would automatically forfeit any options then held and would be required to repay to us all financial gain he realized from exercising all or part of any option within the period commencing six months prior to termination of employment and ending on the date of expiration of the one-year period following any post-termination option exercise period. These provisions apply to Named Executive Officers upon any termination of employment.

Under Mr. Pickford’s employment agreement, SIRVA may only terminate his employment upon twelve months’ prior notice.

Under Mr. McMahon’s employment agreement, upon a termination without “cause” or for “good reason” (as each such term is defined in his employment agreement), he will generally continue to receive continued payment of his then current base salary and benefits for the period ending on the earlier of (a) twelve months after the termination date and (b) the date he accepts new employment or a consulting arrangement with a base salary or consulting fee equal to or greater than 95% of his base salary.

Under Mr. Callahan’s employment agreement, upon a termination without “cause” (as such term is defined in his employment agreement), Mr. Callahan will receive continued payment of his then current base salary for twelve months after the termination date (less the amount, if any, payable to him under the terms of any other severance plan, policy, or program).

Payments Made Upon For Cause Termination

In the event of termination of a Named Executive Officer for cause, the Named Executive Officer will only be entitled to the payments identified above under the heading “—Payments Made Upon Any Termination of Employment.”  All vested and unvested stock options under the Omnibus Plan and the Incentive Plan will be automatically forfeited.

Payments Made Upon or Following a Change of Control

In the event of a “change of control” (as defined under the Omnibus Plan), all options outstanding under the Omnibus Plan will become fully vested and exercisable or, at the discretion of the Committee, the options shall be canceled in exchange for a payment in cash equal to the product of (i) the excess of the change in control price over the exercise price, and (ii) the number of shares of common stock covered by such options. In addition, all restricted stock outstanding under the Omnibus Plan will vest. Notwithstanding the foregoing, if the Committee may determine before the change in control that all outstanding options and restricted stock will be honored or assumed by the acquirer, or alternative awards with equal or better terms will be made available, such outstanding options and restricted stock will not be canceled, their vesting and exercisability will not be accelerated, and there will be no payment in exchange

50




for such awards. Any alternative awards offered must generally have (i) equal or better terms than the outstanding awards, (ii) substantially equivalent economic value to the outstanding awards, and (iii) terms which provide, upon the involuntary termination of a participant’s employment within two years of the change in control, for unrestricted exercisability and transferability of the alternative award.

In the event of a “change of control” (as defined under the Incentive Plan), all options outstanding under the Incentive Plan will be canceled in exchange for a payment in cash equal to the product of (i) the excess of the change in control price over the exercise price, and (ii) the number of shares of common stock covered by such options. Notwithstanding the foregoing, if the Committee may determine before the change in control that all outstanding options will be honored or assumed by the acquirer, or alternative awards with equal or better terms will be made available, such outstanding options will not be canceled, their vesting and exercisability will not be accelerated, and there will be no payment in exchange for such awards. Any alternative awards offered must generally have (i) equal or better terms than the outstanding awards, (ii) substantially equivalent economic value to the outstanding awards, and (iii) terms which provide, upon the involuntary termination of a participant’s employment within two years of the change in control, for unrestricted exercisability and transferability of the alternative award or for the ability to surrender such alternative awards to SIRVA in exchange for a cash payment equal to the product of (i) the excess of the fair market value over the exercise price (if any), and (ii) the number of shares of common stock covered by such alternative award.

Under Mr. Pickford’s employment agreement, SIRVA may only terminate his employment upon 12 months’ prior notice.

Under Mr. McMahon’s employment agreement, if Mr. McMahon is terminated without “cause” (as defined in Mr. McMahon’s employment agreement) within two years following a change of control, he will be entitled to receive continued payment of his base salary for twelve months, plus a pro-rata annual bonus for the year that includes the year of termination.

Under Mr. Callahan’s employment agreement, if Mr. Callahan’s employment is terminated without “cause” following a sale, merger or other corporate transaction, Mr. Callahan will receive continued payment of his then current base salary for twelve months after the termination date (less the amount, if any, payable to him under the terms of any other severance plan, policy, or program), unless he receives an offer of comparable employment in connection with the transaction.

Tables Reflecting Potential Payments Upon Termination Or Change-In-Control

These tables quantify the amounts described under the heading “Potential Payments Upon Termination or Change-In-Control.”  As noted above, Mr. Kelley voluntarily resigned as a Director and as our President and Chief Executive Officer effective as of April 1, 2007. As a result of Mr. Kelley’s voluntary resignation, he was not entitled to any severance from SIRVA, except that he was entitled to a distribution of his account balance under the ERSP, which was approximately $86,000. As a result, we have not quantified Mr. Kelley’s severance arrangements with SIRVA.

In addition, as noted above, Mr. Kirksey’s employment with SIRVA was terminated on June 7, 2007. As a result of Mr. Kirksey’s termination, under his employment agreement, he is entitled to receive a lump sum payment equal to a pro rata portion of his annual bonus under the MIP for the year of termination, based on performance through Mr. Kirksey’s termination date, and continued payment of his then current base salary and benefits for the period ending on the earlier of (a) twelve months after the termination date and (b) the date he accepts new employment or a consulting arrangement with a base salary or consulting fee equal to or greater than 80% of his base salary. Mr. Kirksey is also entitled to a distribution of his account balance under the ERSP, which is approximately $1,800. Mr. Kirksey is required to enter into a general release of claims and separation agreement with us in order to receive any of compensation and benefits described above.

51




With respect to the tables for the other Named Executive Officers, we have assumed (which may or may not be accurate at the time of actual termination) that:  (a) there is no accrued base salary or annual bonus and (b) all accrued paid time off (PTO) had been used during the calendar per our PTO policy, which states accrued PTO must be used by the end of the year in which it was earned. Unused PTO days are not paid out or carried over into the next calendar year.

Kevin D. Pickford

 

 

 

Death

 

Disability

 

Retirement

 

Voluntary

 

Involuntarily
Not For
Cause

 

For Cause

 

Following
Change In
Control

 

Australian Superannuation(1)

 

$

267,807

 

 

$

267,807

 

 

 

$

267,807

 

 

 

$

267,807

 

 

 

$

267,807

 

 

 

$

267,807

 

 

 

$

267,807

 

 

Annual Bonus

 

$

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

Stock Options(2)

 

$

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

Health & Welfare Benefits

 

$

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

(4)

 

 

$

 

 

 

$

(4)

 

Cash Severance

 

$

 

 

$

 

 

 

$

 

 

 

$

(3)

 

 

$

(4)

 

 

$

 

 

 

$

(4)

 


(1)             Represents Mr. Pickford’s account balance as of December 31, 2006, converted into U.S. dollars using a conversion rate of 1.27084 Australian dollars per U.S. dollar as of the close of business on December 29, 2006 as reported at www.oanda.com/convert/classic.

(2)             This table does not reflect any value with respect to Mr. Pickford’s options because all of his options were “underwater” as of December 31, 2006 (i.e., the exercise price of each option exceeded the closing price of our common stock, which is listed on the NYSE).

(3)             Mr. Pickford is required to give 6 months’ written notice upon a voluntary termination under his employment agreement. Mr. Pickford is expected to work the full notice period.

(4)             SIRVA is required to give Mr. Pickford 12 months’ written notice upon an involuntary not for cause, termination. Mr. Pickford is expected to work the full notice period. However, if the company were to relieve Mr. Pickford of his duties immediately, his salary, $324,878, and the cost of his benefits, $4,410, would be payable immediately.

Michael B. McMahon

 

 

 

Death

 

Disability

 

Retirement

 

Voluntary

 

Involuntarily
Not For
Cause

 

For Cause

 

Following
Change In
Control

 

ERSP(1)

 

$

39,239

 

 

$

39,239

 

 

 

$

39,239

 

 

 

$

39,239

 

 

 

$

39,239

 

 

 

$

39,239

 

 

 

$

39,239

 

 

Annual Bonus(2)

 

$

 

 

$

 

 

 

$

 

 

 

 

 

 

$

 

 

 

$

 

 

 

$

 

 

Stock Options(3)

 

$

 

 

$

 

 

 

$

 

 

 

 

 

 

$

 

 

 

$

 

 

 

$

 

 

Health & Welfare Benefits

 

$

 

 

$

132,504

(4)

 

 

$

 

 

 

 

 

 

$

11,350

(5)

 

 

$

 

 

 

$

11,350

(5)

 

Cash Severance

 

$

 

 

$

 

 

 

$

 

 

 

 

 

 

$

300,000

(6)

 

 

$

 

 

 

$

300,000

(6)

 


(1)             Represents Mr. McMahon’s account balance as of December 31, 2006.

(2)             Based on company performance, Mr. McMahon would not have been eligible to receive a pro-rata bonus as detailed in his employment agreement. See discussion under “Annual Bonuses and Commissions” in “Compensation Discussion and Analysis” above. As noted in that discussion, the Committee had authorized discretionary annual bonuses to the Named Executive Officers. However, if Mr. McMahon was terminated prior to the payment date, he would not have received such payment.

(3)             This table does not reflect any value with respect to Mr. McMahon’s options because all of his options were “underwater” as of December 31, 2006 (i.e., the exercise price of each option exceeded the closing price of our common stock, which is listed on the NYSE).

(4)             Represents the estimated lump-sum valued of all future premiums that would be paid on behalf of Mr. McMahon until age 65 under SIRVA’s health and welfare benefit plans should he become disabled.

(5)             Represents the estimated lump-sum valued of one year’s premiums that would be paid on behalf of Mr. McMahon under SIRVA’s health and welfare benefit plans should he be terminated involuntarily not for cause, whether before or after a change of control.

(6)             Represents the value of continued salary per Mr. McMahon’s employment agreement as discussed above.

52




 

Timothy P. Callahan

 

 

 

Death

 

Disability

 

Retirement

 

Voluntary

 

Involuntarily
Not For
Cause

 

For Cause

 

Following
Change In
Control

 

ERSP(1)

 

$

6,401

 

 

$

6,401

 

 

 

$

6,401

 

 

 

$

6,401

 

 

 

$

6,401

 

 

 

$

6,401

 

 

 

$

6,401

 

 

Annual Bonus

 

$

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

Stock Options(2)

 

$

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

Health & Welfare Benefits

 

$

 

 

$

165,761

(3)

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

Cash Severance

 

$

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

250,000

(4)

 

 

$

 

 

 

$

250,000

(4)

 


(1)             Represents Mr. Callahan’s account balance as of December 31, 2006.

(2)             This table does not reflect any value with respect to Mr. Callahan’s options because all of his options were “underwater” as of December 31, 2006 (i.e., the exercise price of each option exceeded the closing price of our common stock, which is listed on the NYSE).

(3)             Represents the estimated lump-sum valued of all future premiums that would be paid on behalf of Mr. Callahan until age 65 under SIRVA’s health and welfare benefit plans should he become disabled.

(4)             Represents the value of continued salary per Mr. Callahan’s employment agreement as discussed above.

53




DIRECTOR COMPENSATION

The following table provides information on SIRVA’s compensation practices during 2006 for its outside directors. Directors who are employed by SIRVA or Clayton Dubilier & Rice, Inc. do not receive any compensation for their Board activities.

Name

 

 

 

Fees Earned or
Paid in Cash(1)

 

Stock Awards(2)

 

Total

 

Kathleen J. Affeldt(3)

 

 

$

66,500

 

 

 

$

60,000

 

 

$

126,500

 

Kelly J. Barlow(4)

 

 

$

11,823

 

 

 

$

15,484

 

 

$

27,307

 

Frederic F. Brace

 

 

$

79,421

 

 

 

$

60,000

 

 

$

139,421

 

Robert J. Dellinger(5)

 

 

$

27,000

 

 

 

$

100,000

 

 

$

127,000

 

Laban P. Jackson, Jr.(6)

 

 

$

21,000

 

 

 

$

50,000

 

 

$

71,000