THG » Topics » Incentive Compensation Deferral and Conversion Program

This excerpt taken from the THG DEF 14A filed Mar 27, 2009.

Incentive Compensation Deferral and Conversion Program

The Company has established a short-term incentive compensation deferral and conversion program (the “IC Deferral Program”) (see page 53 for additional information) that permits certain officers of the Company, including the NEOs, to defer and convert a portion of their IC Program award into a number of restricted stock units. The amount converted cannot exceed the greater of $50,000 or 20% of base salary. An additional grant of restricted stock units is made on the conversion date having a fair market value equal to 15% of the deferred and converted incentive compensation award amount. After three years, the restricted stock units convert into shares of Common Stock. If the officer is not continuously employed by the Company through the vesting date, all such restricted stock units are forfeited, although the Company will pay the officer for the amount of incentive compensation initially deferred and converted, plus interest, compounded annually, based on the GATT rate (4.52% in 2008; 4.00% in 2009). The primary purpose of this program is to encourage stock ownership by senior level officers. Secondarily, this program encourages executive retention because the restricted stock units vest over time.

Under this program, Mr. Eppinger elected to defer and convert $100,000 of his 2008 IC Program award, and Mr. Tranter elected to defer and convert $25,000 of his 2008 IC Program award. Since the restricted stock units granted in lieu of such deferred amounts were issued on March 6, 2009, the Summary Compensation Table (see page 42), Grants of Plan-Based Awards Table (see page 45) and IC Deferral Program Table (see page 53) do not reflect the issuance of such restricted stock units, but the amount of the award deferred (excluding the 15% additional award) is included in Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.

This excerpt taken from the THG DEF 14A filed Mar 28, 2008.

Incentive Compensation Deferral and Conversion Program

The Company has established a deferral and conversion program (the “IC Deferral Program”) (see page 47 for additional information) that permits certain officers of the Company, including the NEOs, to defer and convert a portion of their IC Program award into a number of restricted stock units. The amount converted cannot exceed the greater of $50,000 or 20% of base salary. An additional grant of restricted stock units is made on the conversion date having a fair market value equal to 15% of the deferred and converted incentive compensation award amount. After three years, the restricted stock units convert into shares of Common Stock. If the officer is not continuously employed by the Company through the vesting date, all such restricted stock units are forfeited, although the Company will pay the officer for the amount of incentive compensation initially deferred and converted, plus interest, compounded annually, based on the GATT rate (4.69% in 2007; 4.52% in 2008). The primary purpose of this program is to encourage stock ownership by senior level officers. Secondarily, this program encourages executive retention because the restricted stock units vest over time.

Under this program, Mr. Eppinger elected to defer and convert $170,000 of his 2007 IC Program award, and Mr. Tranter elected to defer and convert $25,000 of his 2007 IC Program award. Since the restricted stock units granted in lieu of such deferred amounts were issued on March 7, 2008, the Summary Compensation Table (see page 35), Grants of Plan-Based Awards Table (see page 38) and IC Deferral Program Table (see page 47) do not reflect the issuance of such restricted stock units, but the amount of the award deferred (excluding the 15% additional award) is included in Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.

This excerpt taken from the THG DEF 14A filed Apr 5, 2007.

Incentive Compensation Deferral and Conversion Program

The Company has established a deferral and conversion program (the “IC Deferral Program”) that permits certain officers of the Company, including the NEOs, to defer and convert a portion of their Annual IC Program award (not to exceed the greater of $50,000 or 20% of base salary) into a number of restricted stock units determined based on the fair market value of the underlying shares at the time such compensation would otherwise have been paid. An additional grant of restricted stock units is made on the conversion date having a fair market value equal to 15% of the deferred and converted incentive compensation award amount (the “Additional RSU Award”). Such restricted stock units convert into shares of Common Stock upon vesting, which is three years after the date of grant. In the event the officer is not continuously employed by the Company through the vesting date, then all such restricted stock units are forfeited, although the Company will pay the officer for the amount of incentive compensation initially deferred and converted, plus interest, compounded annually, based on the GATT rate (4.73% in 2006; 4.69% in 2007). These restricted stock units do not have voting rights, but do carry deferred dividend equivalency rights to the extent dividends are declared on the underlying shares of Common Stock (see “Potential Payments Upon Termination or Change In Control” on page 42 below for vesting provisions in the event of a change in control of the Company). The primary purpose of this program is to encourage stock ownership by senior level officers.

Pursuant to this program, Mr. Eppinger elected to defer and convert $170,000 of his 2006 Annual IC Program award, and Mr. Tranter elected to defer and convert $25,000 of his 2006 Annual IC Program award. Since the restricted stock units granted in lieu of such deferred amounts (including the Additional RSU Award) were issued on March 9, 2007, the Summary Compensation Table (see page 31), Grants of Plan-Based Awards Table (see page 33) and IC Deferral Program Table (see page 41) do not reflect the issuance of such restricted stock units, but the amount of the award deferred (excluding the Additional RSU Award) is included in Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.

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