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UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-K/A
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(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
December 31, 2008
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or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period
from to
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Commission file number
000-50448
Marlin Business Services
Corp.
(Exact name of Registrant as
specified in its charter)
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Pennsylvania
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38-3686388
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(State of
incorporation)
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(I.R.S. Employer Identification
No.)
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300
Fellowship Road, Mount Laurel, NJ 08054
(Address
of principal executive offices)
Registrants telephone number, including area code:
(888) 479-9111
Securities registered pursuant to Section 12(b) of the
Act:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $.01 par value
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The NASDAQ Stock Market LLC
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Securities
registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o No þ
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o No þ
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. Yes þ
No o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
is not contained herein, and will not be contained, to the best
of Registrants knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this
Form 10-K
or any amendment to this
Form 10-K.
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Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
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Large accelerated
filer o
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Accelerated
filer þ
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Non-accelerated
filer o
(Do not check if a smaller reporting company)
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Smaller reporting
company o
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Indicate by check mark whether the Registrant is a shell company
(as defined in Exchange Act
Rule 12b-2). Yes o No þ
The aggregate market value of the voting common stock held by
non-affiliates of the Registrant, based on the closing price of
such shares on the NASDAQ Global Select Market was approximately
$63,357,594 as of June 30, 2008. Shares of common stock
held by each executive officer and director and persons known to
us who beneficially owns 5% or more of our outstanding common
stock have been excluded from this computation in that such
persons may be deemed to be affiliates. This determination of
affiliate status is not necessarily a conclusive determination
for other purposes.
The number of shares of Registrants common stock
outstanding as of February 28, 2009 was
12,392,821 shares.
EXPLANATORY
NOTE
This Amendment No. 1 (the Amendment) on
Form 10-K/A
to the Annual Report on
Form 10-K
(the Initial Filing) of Marlin Business Services
Corp., a Pennsylvania corporation (the Corporation),
for the year ended December 31, 2008, which was filed with
the Securities and Exchange Commission on March 13, 2009,
is being filed solely for the limited purpose of amending
Items 10, 11, 12, 13 and 14 to reflect the inclusion of the
information required by the
Form 10-K.
The Initial Filing contemplated the incorporation of such
information from a Proxy Statement to be filed by the
Corporation within 120 days following the end of the
Corporations fiscal year ended December 31, 2008. The
Corporation does not believe that such Proxy Statement will be
filed within the requisite
120-day time
period and, accordingly, is including the information required
by Items 10, 11, 12, 13 and 14 of the
Form 10-K
through this Amendment as contemplated by instruction G(3)
to the
Form 10-K.
Pursuant to
Rule 12b-15
under the Securities Exchange Act of 1934, as amended (the
Exchange Act), the Company has filed the
certifications required by
Rule 13a-14(a)
or 15d-14(a)
of the Exchange Act.
Except as contained herein, this Amendment does not modify or
update disclosures contained in the Initial Filing. This
Amendment should be read in conjunction with the
Corporations other filings made with the Securities and
Exchange Commission subsequent to the date of the Initial Filing.
MARLIN
BUSINESS SERVICES CORP.
FORM 10-K/A
INDEX
1
FORWARD-LOOKING
STATEMENTS
Certain statements in this document may include the words or
phrases can be, expects,
plans, may, may affect,
may depend, believe,
estimate, intend, could,
should, would, if and
similar words and phrases that constitute forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are subject to
various known and unknown risks and uncertainties and the
Corporation cautions that any forward-looking information
provided by or on its behalf is not a guarantee of future
performance. Statements regarding the following subjects are
forward-looking by their nature: (a) our business strategy;
(b) our projected operating results; (c) our ability
to obtain external financing; (d) the effectiveness of our
hedges, (e) our understanding of our competition; and
(f) industry and market trends. The Corporations
actual results could differ materially from those anticipated by
such forward-looking statements due to a number of factors, some
beyond the Corporations control, including, without
limitation:
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availability, terms and deployment of funding and capital;
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general volatility of capital markets, in particular, the market
for securitized assets;
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changes in our industry, interest rates or the general economy
resulting in changes to our business strategy;
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the nature of our competition;
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availability of qualified personnel; and
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the factors set forth in the section captioned Risk
Factors in Item 1A of the Corporations
Form 10-K
for the fiscal year ended December 31, 2008, as filed with
the Securities and Exchange Commission on March 13, 2009.
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Forward-looking statements apply only as of the date made and
the Corporation is not required to update forward-looking
statements for subsequent or unanticipated events or
circumstances.
As used herein, the terms Corporation,
Marlin, we, us, or
our refer to Marlin Business Services Corp. and its
subsidiaries.
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PART III
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Item 10.
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Directors,
Executive Officers and Corporate Governance
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Executive
Officers
The following table provides information, as of March 1,
2009, about the Corporations executive officers.
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Principal Occupation for the Past Five Years and
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Name of Executive Officer
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Age
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Position Held with the Corporation and its Subsidiaries
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Daniel P. Dyer
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50
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Mr. Dyer has been Chief Executive Officer since co-founding our
Corporation in 1997. In December 2006, Mr. Dyer also assumed the
position of President of our Corporation. Mr. Dyer also served
as Chairman of the Board of Directors of the Corporation from
1997 to March 2009. From 1986 to 1997, Mr. Dyer served in a
number of positions, most recently as Senior Vice President and
Chief Financial Officer of Advanta Business Services, where he
was responsible for financial and treasury functions. Mr. Dyer
received his undergraduate degree in accounting and finance from
Shippensburg University and is a licensed certified public
accountant (non-active status).
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George D. Pelose
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Mr. Pelose has been with our Corporation since 1999, serving as
General Counsel and Secretary since 1999. In December 2006,
Mr. Pelose became the Chief Operating Officer of the
Corporation. From 1997 to 1999, Mr. Pelose was an attorney with
Merrill Lynch Asset Management, providing legal and
transactional advice to a portfolio management team that
invested principally in bank loans and high-yield debt
securities. From 1994 to 1997, Mr. Pelose was an associate at
Morgan, Lewis & Bockius LLP in the firms Business
& Finance section where he worked on a variety of corporate
transactions, including financings, mergers, acquisitions,
private placements and public offerings. From 1991 to 1994, Mr.
Pelose attended law school. From 1986 to 1991, Mr. Pelose was a
corporate loan officer in the commercial lending division of PNC
Bank. Mr. Pelose received both his undergraduate degree in
economics and his law degree from the University of
Pennsylvania, both with honors. Mr. Pelose is licensed to
practice law in New Jersey and Pennsylvania.
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Lynne C. Wilson
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Ms. Wilson has been our Chief Financial Officer since June 5,
2006. Prior to joining the Corporation, from 1999 to 2006, Ms.
Wilson was with General Electric Company, serving in a variety
of finance positions for different subsidiaries and divisions of
GE. From 2002 to 2006, Ms. Wilson worked for GE Equipment
Services-TFS/Modular Space, most recently serving as Manager of
Finance, Strategic Marketing (from 2005 to 2006) and previously
as Manager, Financial Planning and Analysis (from 2002 to 2005).
From 1999 to 2002, Ms. Wilson was the Global Controller for GE
Commercial Finance-Fleet Services. Prior to joining GE, Ms.
Wilson held senior financial positions at Bank One Corporation
(from 1996 to 1999) and Fleet National Bank of NY/Northeast
Savings (from 1989 to 1996), where she served as Senior Vice
President, Controller and Principal Accounting Officer. Ms.
Wilson started her career at Ernst & Young International
working from 1984 to 1989 as an Audit Manager. Ms. Wilson
obtained a BA in Business Administration from Siena College and
is a licensed certified public accountant (non-active status).
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Board of
Directors
The following table provides information as of March 1,
2009, about the members of the Corporations Board of
Directors:
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Director
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Name of Director
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Age
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Principal Occupation
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Since
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John J. Calamari
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Executive Vice President and
Chief Financial Officer of J.G. Wentworth
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2003
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Lawrence J. DeAngelo
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Partner with Roark Capital Group
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2001
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Daniel P. Dyer
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CEO of Marlin Business Services Corp.
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1997
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Edward Grzedzinski
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Former Chairman and CEO of NOVA Corporation
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2006
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Kevin J. McGinty
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Managing Director of Peppertree Partners LLC
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1998
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Matthew J. Sullivan
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Partner with Peachtree Equity Partners
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2008
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James W. Wert
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President & CEO of Clanco Management Corp.
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1998
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John J. Calamari has been a Director since November 2003.
Mr. Calamari is Executive Vice President and Chief
Financial Officer of J.G. Wentworth, a position he has held
since joining J.G. Wentworth in March 2007. Prior to that time,
Mr. Calamari was Senior Vice President, Corporate
Controller of Radian Group Inc. where he oversaw Radians
global controllership functions, a position he held after
joining Radian in September 2001. From 1999 to August 2001,
Mr. Calamari was a consultant to the financial services
industry, where he structured new products and strategic
alliances and established financial and administrative functions
and engaged in private equity financing for startup enterprises.
Mr. Calamari served as Chief Accountant of Advanta from
1988 to 1998, as Chief Financial Officer of Chase Manhattan Bank
Maryland and Controller of Chase Manhattan Bank (USA) from 1985
to 1988 and as Senior Manager at Peat, Marwick,
Mitchell & Co. (now KPMG LLP) prior to 1985. In
addition, Mr. Calamari served as a director of Advanta
National Bank, Advanta Bank USA and Credit One Bank.
Mr. Calamari received his undergraduate degree in
accounting from St. Johns University in 1976.
Lawrence J. DeAngelo has been a Director since July 2001.
Mr. DeAngelo is a Managing Director with Roark Capital
Group, a private equity firm based in Atlanta, Georgia. Prior to
joining Roark in 2005, Mr. DeAngelo was a Managing Director
of Peachtree Equity Partners, a private equity firm based in
Atlanta, Georgia. Prior to co-founding Peachtree in April 2002,
Mr. DeAngelo held numerous positions at Wachovia Capital
Associates, the private equity investment group of Wachovia
Bank, from 1996 to April 2002, the most recent of which was
Managing Director. From 1995 to 1996, Mr. DeAngelo worked
at Seneca Financial Group, and from 1992 to 1995,
Mr. DeAngelo worked in the Corporate Finance Department at
Kidder, Peabody & Co. From 1990 to 1992,
Mr. DeAngelo attended business school. From 1988 to 1990,
Mr. DeAngelo was a management consultant with
Peterson & Co. Consulting. Mr. DeAngelo received
his undergraduate degree in economics from Colgate University
and his MBA from the Yale School of Management.
Daniel P. Dyer has been Chief Executive Officer since
co-founding our Corporation in 1997. In December of 2006,
Mr. Dyer also assumed the role of President of the
Corporation. Mr. Dyer also served as Chairman of the Board
of Directors of the Corporation from 1997 to March 2009. From
1986 to 1997, Mr. Dyer served in a number of positions,
most recently as Senior Vice President and Chief Financial
Officer of Advanta Business Services, where he was responsible
for financial and treasury functions. Mr. Dyer received his
undergraduate degree in accounting and finance from Shippensburg
University and is a licensed certified public accountant
(non-active status).
Edward Grzedzinski has been a Director since May 2006.
Mr. Grzedzinski served as the Chairman and Chief Executive
Officer of NOVA Corporation from September 1995 to November
2004, and Vice Chairman of US Bancorp from July 2001 to
November 2004. Mr. Grzedzinski has 25 years of
experience in the electronic payments industry and was a
co-founder of the predecessor of NOVA Corporation, NOVA
Information Systems, in 1991. Mr. Grzedzinski served as a
member of the Managing Committee of US Bancorp, and was a
member of the Board of Directors of US Bank, N.A.
Mr. Grzedzinski also served as Chairman of euroConex
Technologies, Limited, a European payment processor owned by
US Bancorp until November 2004 and was a member of the
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Board of Directors of Indus International Inc., a global
provider of enterprise asset management products and services
until October 2004. Mr. Grzedzinski is also a director of
Neenah Paper, Inc.
Kevin J. McGinty has been a Director since February 1998
and has served as non-executive Chairman of the Board of
Directors of the Corporation since March 2009. Mr. McGinty
is Managing Director of Peppertree Capital Management, Inc.
Prior to founding Peppertree in January 2000, Mr. McGinty
served as a Managing Director of Primus Venture Partners during
the period from 1990 to December 1999. In both organizations
Mr. McGinty was involved in private equity investing, both
as a principal and as a limited partner. From 1970 to 1990,
Mr. McGinty was employed by Society National Bank, now
KeyBank, N.A., where in his final position he was an Executive
Vice President. Mr. McGinty received his undergraduate
degree in economics from Ohio Wesleyan University and his MBA in
finance from Cleveland State University.
Matthew J. Sullivan has been a Director since April 2008.
Mr. Sullivan is a Partner with Peachtree Equity Partners
(Peachtree). Mr. Sullivan co-founded Peachtree
in 2002. From 1994 to 2002, Mr. Sullivan held numerous
positions at Wachovia Capital Associates, the private equity
investment group of Wachovia Bank, the most recent of which was
Managing Director. From 1983 to 1994, Mr. Sullivan worked
in the Corporate Finance Department at Kidder,
Peabody & Co. and previously with Arthur
Andersen & Company where he earned his CPA (currently
non-active status). Mr. Sullivan received his undergraduate
degree in finance from the University of Pennsylvania and his
MBA from Harvard Business School.
James W. Wert has been a Director since February
1998. Mr. Wert is President and CEO of Clanco
Management Corp., which is headquartered in Cleveland, Ohio.
Prior to joining Clanco in May 2000, Mr. Wert served as
Chief Financial Officer and then Chief Investment Officer of
KeyCorp, a financial services company based in Cleveland, Ohio,
and its predecessor, Society Corporation, until 1996, after
holding a variety of capital markets and corporate banking
leadership positions spanning his 25 year banking career.
Mr. Wert received his undergraduate degree in finance from
Michigan State University in 1971 and completed the Stanford
University Executive Program in 1982.
Code of
Ethics and Business Conduct
All of the Corporations directors, officers and employees
(including its senior executive, financial and accounting
officers) are held accountable for adherence to the
Corporations Code of Ethics and Business Conduct (the
Code). The Code is posted on the investor relations
section of the Corporations website at www.marlincorp.com.
The purpose of the Code is to establish standards to deter
wrongdoing and promote honest and ethical behavior. The Code
covers many areas of professional conduct, including compliance
with laws, conflicts of interest, fair dealing, financial
reporting and disclosure, confidential information and proper
use of the Corporations assets. Employees are obligated to
promptly report any known or suspected violation of the Code
through a variety of mechanisms made available by the
Corporation. Waiver of any provision of the Code for a director
or executive officer (including the senior executive, financial
and accounting officers) may only be granted by the Board of
Directors or the Audit Committee. Our code of ethics and
business conduct is available free of charge within the investor
relations section of our Web site at www.marlincorp.com.
We intend to post on our Web site any amendments and waivers to
the code of ethics and business conduct that are required to be
disclosed by the rules of the Securities and Exchange
Commission, or file a
Form 8-K,
Item 5.05 to the extent required by NASDAQ listing
standards.
Section 16(a)
Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporations directors, executive officers
and shareholders who beneficially own more than 10% of the
Corporations outstanding equity stock to file initial
reports of ownership and reports of changes in ownership of
common stock and other equity securities of the Corporation with
the SEC. Based on a review of copies of the reports we received
and on the statements of the reporting persons, to the best of
the Corporations knowledge, all required reports in 2008
were filed on time except that the Corporation, on behalf of
John J. Calamari, Kevin J. McGinty, George D. Pelose, Matthew J.
Sullivan, and James W. Wert, failed to timely file a Form 4
to report a change in ownership of common stock. The Corporation
on the behalf of John J. Calamari failed to timely file a
Form 4 to report a grant of restricted stock on
June 2, 2008, as
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part of the Corporations Director compensation plan. The
Corporation filed the Form 4 for such grant, on behalf of
John J. Calamari, on June 10, 2008. The Corporation on the
behalf of Kevin J. McGinty failed to timely file a Form 4
to report the purchase of common stock on November 24,
2008. The Corporation filed the Form 4 for such grant on
December 3, 2008 on behalf of Kevin J. McGinty. The
Corporation on the behalf of George D. Pelose failed to timely
file a Form 4 to report the delivery of shares to pay a tax
liability associated with the vesting of certain shares of
restricted stock on May 19, 2008. The Corporation filed the
Form 4 for such delivery of shares on June 2, 2008 on
behalf of George D. Pelose. The Corporation on the behalf of
Matthew J. Sullivan failed to timely file a Form 4 to
report the grant of options made pursuant to the
Corporations Director compensation plan on April 17,
2008. The Corporation filed the Form 4 for such grant on
April 24, 2008 on behalf of Matthew J. Sullivan. The
Corporation on the behalf of James W. Wert failed to timely file
a Form 4 to report the exercise of options on
February 15, 2008. The Corporation filed the Form 4
for such grant on March 10, 2008 on behalf of James W. Wert.
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Item 11.
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Executive
Compensation
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Compensation
Discussion and Analysis
Compensation
Overview
The Compensation Committee of the Board of Directors sets and
administers the policies that govern our executive compensation,
including:
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establishing and reviewing executive base salaries;
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overseeing the Corporations annual incentive compensation
plans;
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overseeing the Corporations long-term equity-based
compensation plan;
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approving all bonuses and awards under those plans; and
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annually approving and recommending to the Board all
compensation decisions for executive officers, including those
for the Chief Executive Officer (CEO) and the other
officers named in the Summary Compensation Table (the
Executive Officers).
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The current Executive Officers of the Corporation are Daniel P.
Dyer, George D. Pelose and Lynne C. Wilson. All of them were
Executive Officers during 2008.
The Compensation Committee operates under a written charter
(accessible on the investor relations page of the
Corporations website at www.marlincorp.com) and only
independent directors serve on the Compensation Committee.
Compensation Philosophy. The Compensation
Committee believes that the most effective executive
compensation program is one that is designed to reward the
achievement of specific annual, long-term and strategic goals by
the Corporation, and which aligns executives interests
with those of the shareholders by rewarding performance against
established goals, with the ultimate objective of improving
shareholder value. The Compensation Committee evaluates both
performance and compensation to ensure that the Corporation
maintains its ability to attract and retain superior employees
in key positions and that compensation provided to key employees
remains competitive in the marketplace. To that end, the
Compensation Committee believes executive compensation packages
provided by the Corporation to its executives, including the
Executive Officers, should include both cash and equity-based
compensation that reward performance as measured against
established goals.
Managements Role in the Compensation-Setting
Process. The Compensation Committee makes all
compensation decisions relating to the Executive Officers;
however, management plays a significant role in the
compensation-setting process, including:
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evaluating employee performance;
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establishing performance targets and objectives; and
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recommending salary and bonus levels and equity awards.
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The CEO works with the Compensation Committee Chairman in
establishing the agenda for Compensation Committee meetings.
Management also prepares meeting information for each
Compensation Committee meeting. The CEO also participates in
Compensation Committee meetings at the Chairmans request
to provide:
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background information regarding the Corporations
strategic objectives;
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a tally sheet for each Executive Officer, setting forth total
compensation and aggregate equity awards for each Executive
Officer;
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an evaluation of the performance of the Corporations
officers, including the Executive Officers; and
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compensation and equity award recommendations as to the
Corporations officers, including the Executive Officers.
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The Compensation Committee can exercise its discretion in
modifying any recommended awards to the Corporations
officers, including the Executive Officers. At a Compensation
Committee meeting held on January 21, 2009, the Committee
approved the 2008 bonus recommendations put forth by the CEO.
External Consultants and Benchmarking. The
Compensation Committee utilizes the services of an independent
consulting firm, Watson & Wyatt. In 2004, the
Compensation Committee first engaged Watson & Wyatt,
to conduct a study of the Corporations Executive Officer
compensation programs and strategies (the 2004 Watson
Study). The 2004 Watson Study compared the
Corporations executive compensation levels with that of
(i) a peer group comprised of companies with a business
services and financing focus that are similar in size to the
Corporation (the peer group), (ii) compensation
details from various market surveys across several industries
(together with the peer group, the comparison
group), and (iii) broader financial services industry
practices. The 2004 Watson Study selected a compensation peer
group of companies consisting of eight publicly-traded companies
in a similar industry and size with executive positions with
responsibilities similar in breadth and scope as the
Corporation. The peer group used in the initial benchmark
analysis contained in the 2004 Watson Study consisted of:
California First National Bank (CFNB); Credit Acceptance Corp.
(CACC); Financial Federal Corp. (FIF); First Marblehead Corp.
(FMD); Medallion Financial Corp. (TAXI); Portfolio Recovery
Associates Inc. (PRAA); First Investors Financial Services Group
Inc. (FIFS); and World Acceptance Corp. (WRLD).
The 2004 Watson Study concluded that the Corporations
Executive Officers are paid conservatively relative to the
comparison group. The study noted that the Executive
Officers base salaries at the time of the report were
generally below the 50th percentile of the comparison
group, but the competitiveness of the Executive Officers
total annual cash compensation improved with above market bonus
opportunities. The 2004 Watson Study further noted that the
value of the existing long-term incentives granted to the
executives (primarily in the form of stock options) was below
market levels.
In response to the findings of the 2004 Watson Study and in
keeping with our philosophy of providing strong incentives for
superior performance, the Compensation Committee modified the
structure of the Corporations Executive Officer equity
compensation program. Based on recommendations contained in the
2004 Watson Study, effective in 2005, the Compensation Committee
modified the stock-based incentive award program for the
Executive Officers to include the three separate components set
forth below (i.e., stock option grants, restricted stock grants,
and the management stock ownership program). The 2004 Watson
Study suggested that this mix of stock-based awards will improve
the competitiveness of the Corporations long-term
incentive plan for its Executive Officers and will better serve
to align the overall interests of the Executive Officers with
the Corporations shareholders.
In October 2008, the Compensation Committee engaged
Watson & Wyatt to update the 2004 Watson Study
regarding the Corporations Executive Officer compensation
programs and strategies (the 2008 Watson Study). In
response to the findings of the 2008 Watson Study, the
Compensation Committee further modified the structure of the
Corporations Executive Officer compensation programs.
Based on recommendations contained in the 2008 Watson Study,
effective in 2009, the three components of the stock-based
incentive award program for the Executive Officers will consist
of performance share awards, time vesting restricted stock, and
the MSOP. Based on the 2008 Watson Study, stock options will be
eliminated from future grants and replaced with performance
based restricted stock.
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The annual equity grants made to the Executive Officers in 2008
were done under the program structure recommended in the 2004
Watson Study. The modified structure for the annual equity
grants recommended in the 2008 Watson Study becomes effective in
2009.
Compensation
Components
As part of their studies, Watson & Wyatt reviewed the
Corporations existing executive compensation structure and
assisted in the development of executive compensation programs
that (a) are competitive among companies in similar growth
and development stages to attract and retain talented
management, (b) provide incentives that focus on the
critical needs of the business on an annual and continuing
basis, and (c) reward management commensurate with the
creation of shareholder and market value.
The 2004 Watson Study included an initial benchmark analysis of
the Corporations executive compensation program, comparing
it to (i) the peer group, (ii) the comparison group,
and (iii) broader financial services industry practices.
The peer group used in the initial benchmark analysis in the
2004 Watson Study consisted of: California First National Bank
(CFNB); Credit Acceptance Corp. (CACC); Financial Federal Corp.
(FIF); First Marblehead Corp. (FMD); Medallion Financial Corp.
(TAXI); Portfolio Recovery Associates Inc. (PRAA); First
Investors Financial Services Group Inc. (FIFS); and World
Acceptance Corp. (WRLD). The Compensation Committee used this
benchmark data to set the Executive Officers compensation
levels in 2004. On an ongoing basis, the Compensation Committee
reviews a variety of factors in assessing and setting overall
executive compensation levels, including references to this peer
group and the market surveys, broader financial services
industry practices, tally sheets, executive performance, and the
2008 Watson Study.
The components of compensation paid to the Executive Officers in
2008 were as follows:
|
|
|
|
|
Base Salary. The Compensation Committee
establishes base salaries that it believes to be sufficient to
attract and retain quality Executive Officers who can contribute
to the long-term success of the Corporation. The Committee
determines the Executive Officers base salary through a
thorough evaluation of a variety of factors, including the
executives responsibilities, tenure, job performance and
prevailing levels of market compensation. The Compensation
Committee reviews these salaries at least annually for
consideration of increase based on merit and competitive market
factors. The 2008 Watson Study provided the Compensation
Committee with an updated competitive analysis regarding the
base salaries of the Corporations Executive Officers.
|
|
|
|
Bonus. The annual incentive bonus awards are
designed to reward the Executive Officer for the achievement of
certain corporate and individual performance goals. The
Compensation Committee sets threshold, target and maximum bonus
levels for each goal. As part of the 2004 Watson Study, the
Corporation sought to set the Executive Officers total
target compensation levels at levels that were near the median
of the data from the peer group and the broader industry
practices. This resulted in the setting of threshold, target and
maximum bonus levels (as a percentage of base salaries) as
follows: Daniel P. Dyer: 42.5% threshold, 85% target and 148.75%
maximum; George D. Pelose: 37.5% threshold, 75% target and
108.75% maximum; and Lynne C. Wilson: 22.5% threshold, 45%
target and 63% maximum. Based on the recommendations set froth
in the 2008 Watson Study, the target bonus levels for
Messrs. Dyer and Pelose were increased to 120% and 90%,
respectively, effective in 2009.
|
Prior to the beginning of each year, the Corporation sets target
levels for the items of corporate performance that are to be
measured that year for assessing the bonus opportunity for the
Executive Officers. Some of the target levels are standard for
each Executive Officer (such as corporate pre-tax income), and
some are specific to that Executive Officers primary area
of responsibility (such as unit performance and individual
development). The full matrix of performance measurements varies
by Executive Officer and by year, as do the weightings of each
item, which can range from 15%-75% of the total bonus
opportunity. To achieve the target bonus payout associated with
a performance measurement, the Executive Officer must achieve
100% of the plan for that performance measurement. If the
Executive Officer does not achieve 100% of the planned
performance measurements for that year,
he/she can
still achieve the threshold bonus payout if the performance
level exceeds certain minimum requirements (for example,
threshold payout for the pre-tax income component in 2008
required pre-tax income to be at least 13.5% greater than the
prior years figure).
8
Maximum bonus payout can be achieved if the Executive Officer
exceeds the planned levels for the performance measurements (for
example, in 2008, achieving greater than 104.5% of that
years planned pre-tax income measurement would have
resulted in maximum payout for that weighted component). Each
Executive Officer has a portion of his or her bonus opportunity
measured against individual roles (MBOs) and performance. The
weighting of the individual performance component varies by
Executive Officer and by year, and may range from 15%-75% of the
Executive Officers total bonus opportunity. Individual
performance goals typically include performance on specific
projects or initiatives assigned to the Executive Officer as
well as overall professional development.
|
|
|
|
|
Equity-Based Incentive Awards. The
Compensation Committee believes that share ownership provided by
equity-based compensation emphasizes and reinforces the
mutuality of interest among the Executive Officers and
shareholders. After each fiscal year, the Compensation Committee
reviews and approves stock-based awards for the Executive
Officers based primarily on the Corporations results for
the year and the executives individual contribution to
those results. The stock-based incentive awards adopted pursuant
to the 2004 Watson Study include three separate components:
(1) stock option grants, (2) restricted stock grants,
and (3) a management stock ownership program
(MSOP). Options are awarded at the NASDAQ closing
price of the Corporations common stock on the date of the
grant.
|
|
|
|
Other Benefits. The Executive Officers
participate in employee benefits plans generally available to
all of the Corporations employees, including medical and
health plans and 401(k) and ESPP programs. In addition,
Messrs. Dyer and Pelose received reimbursement of life and
disability insurance premiums pursuant to their employment
agreements, and each of the Executive Officers receive
reimbursement for physical examinations.
|
Components
of Equity-Based Incentive Awards
As mentioned above, the equity-based incentive awards adopted
pursuant to the 2004 Watson Study include three separate
components: (1) stock option grants, (2) restricted
stock grants, and (3) the MSOP.
|
|
|
|
|
Stock Option Grants. The stock option grants
are divided between Time Vested options and Performance Based
options. The Time Vested options have a term of seven years and
vest 25% per year for the first four years from the grant date.
The Performance Based options have a term of seven years and
vest four years from the grant date. The number of Performance
Based option shares that vest on such date is determined by the
Corporations EPS compounded average growth rate over the
four fiscal years following the grant date, as follows:
|
|
|
|
|
|
Four-Year EPS Compounded
|
|
% of Grant that shall
|
|
Average Growth Rate
|
|
Vest in Four Years
|
|
|
Less than 13.5%
|
|
|
0
|
%
|
13.5%-14.99%
|
|
|
33.33
|
%
|
15.0%-16.49%
|
|
|
66.66
|
%
|
16.5% or greater
|
|
|
100.00
|
%
|
|
|
|
|
|
Restricted Stock Grants. The restrictions on
the restricted stock grants lapse after seven years, but are
subject to accelerated performance vesting. Vesting of the
restricted stock shall immediately accelerate (and all
restrictions shall lapse) upon the Corporation reporting
compounded average net income growth of 15% or greater for a
period of four consecutive fiscal years after the grant date
(using the Corporations reported net income for the most
recently concluded fiscal year as the initial measurement point).
|
|
|
|
Management Stock Ownership Program. The MSOP
provides for a matching grant of restricted stock to a
participant who owns common stock of the Corporation (subject to
a maximum matching grant value determined by the Compensation
Committee). The restrictions on the matching MSOP restricted
shares lapse after ten years, but are subject to accelerated
vesting. Vesting of the matching MSOP restricted shares shall
immediately accelerate (and all restrictions shall lapse) after
three years if the grantee maintained continuous outright
ownership of a matching number of unrestricted shares of the
Corporation for the entire three year period.
|
9
Ownership
Guidelines
In an effort to ensure that the Executive Officers and other
officers and managers of the Corporation maintain sufficient
equity ownership so that their thinking and actions are aligned
with the interests of our shareholders, the Corporation adopted
in 2006 management ownership guidelines, which apply to all
participants in the equity-based incentive award program. The
ownership guidelines are summarized below:
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|
|
|
|
Ownership that counts toward the guidelines is (i) all
unrestricted stock of the Corporation owned outright by the
participant and (ii) the net value of vested, unexercised
options.
|
|
|
|
The ownership guideline is measured as a percentage of the
participants base salary.
|
|
|
|
Participants are divided into three tiers with different
guidelines. The ownership requirements for each tier over three
years are set forth below:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Ownership Guidelines (% of Salary)
|
|
Tier
|
|
|
Participants
|
|
Year 1
|
|
|
Year 2
|
|
|
Year 3
|
|
|
|
I
|
|
|
Senior Management
|
|
|
100
|
%
|
|
|
150
|
%
|
|
|
200
|
%
|
|
II
|
|
|
Officers
|
|
|
50
|
%
|
|
|
75
|
%
|
|
|
100
|
%
|
|
III
|
|
|
Managers
|
|
|
25
|
%
|
|
|
30
|
%
|
|
|
35
|
%
|
|
|
|
|
|
Compliance will be reviewed at least annually.
|
If an equity incentive program participant sells shares of the
Corporation while such participant is not in compliance with the
ownership guidelines, the Compensation Committee will take this
into account prior to making additional equity awards to such
participant.
As of January 9, 2009, none of the Executive Officers were
in compliance with the ownership guidelines.
Employment
Agreements
In November 2003, the Corporation entered into employment
agreements with Messrs. Dyer and Pelose, amended in
December 2008, the terms of which are substantially similar to
each other. The employment agreements establish minimum salary
and target bonus levels for the executives. The agreements
require the executives to devote substantially all of their
business time to their employment duties. Each agreement had an
initial two year term that automatically extends on each
anniversary of the effective date of the agreement for
successive one-year terms unless either party to the agreement
provides 90 days notice to the other party that he
does not wish to renew the agreement. The agreements currently
run through November 2010.
The Corporation may terminate the employment agreements for or
without cause, and the executive may terminate his employment
agreement with or without good reason. The employment agreements
terminate automatically upon a change in control. The employment
agreements provide for severance in the case of termination
without cause, resignation for good reason, termination upon
non-renewal of agreement, and termination on account of change
in control. The employment agreements are intended to comply
with the requirements of Section 409A of the Internal
Revenue Code, to the extent applicable, and the agreements shall
be interpreted to avoid any penalty sanctions under the Code.
Upon termination of the employment agreement, the executive will
be subject to certain protective non-competition and
non-solicitation covenants. In addition, for a
24-month
period after termination of employment, the executive is
prohibited from hiring the Corporations employees.
Compensation
for Executive Officers in 2008
Base Salary. Effective October 1, 2008,
based on the recommendations set forth in the 2008 Watson Study,
the Compensation Committee increased Mr. Dyers base
salary to $390,000 from $320,000 and Mr. Peloses base
salary to $325,000 from $295,000. The Executive Officers are
currently entitled to the following base salaries:
Mr. Dyer, $390,000, Mr. Pelose, $325,000, and
Ms. Wilson, $252,937; however, effective February 9,
2009, Messrs. Dyer and Pelose voluntarily agreed to reduce
their salaries by 5% for an unspecified period of time in light
of the difficult economic environment. For purposes of the 2008
bonus calculations, the base salaries in effect prior
10
to the October 2008 increases were used, which were:
Mr. Dyer, $320,000, Mr. Pelose, $295,000, and
Ms. Wilson, $252,937.
Annual Bonuses. In 2008, the Executive
Officers were eligible for annual bonuses at the following
threshold, target and maximum bonus levels (as a percentage of
base salaries): Daniel P. Dyer: 42.5% threshold, 85% target and
148.75% maximum; George D. Pelose: 37.5% threshold, 75% target
and 108.75% maximum; and Lynne C. Wilson: 22.5% threshold, 45%
target and 63% maximum. The annual incentive bonus awards are
designed to reward the Executive Officer for the achievement of
certain corporate and individual performance goals. Each year,
the Compensation Committee reviews and approves goals for each
Executive Officer, and in 2008 those goals consisted of a
corporate goal (i.e., growth in pre-tax income) and specific
individual goals. In 2008, the corporate goal weighting was 50%
of each Executive Officers bonus opportunity, and the
individual goal weighting represented the remaining 50% of the
bonus opportunity.
In 2008, the corporate goal for each Executive Officer was based
on the achievement of a certain level of pre-tax income.
Achieving 2008 pre-tax income that was at least 13.5% above the
pre-tax income for 2007 would yield the threshold payout for
that component of the bonus calculation, achieving the planned
pre-tax income for 2008 would yield the target payout for that
component, and achieving 104.5% of the planned pre-tax income
for 2007 would yield the maximum payout for that component. The
Corporations pre-tax income in 2008 did not meet the
threshold payout level, so the Executive Officers received no
bonus payout with respect to this half of their bonus
opportunity.
In 2008, the individual goals for the Executive Officers
included the following: Mr. Dyer converting to
a bank holding company structure, leading our efforts to insure
adequate liquidity, and formulating and acting upon long-term
growth strategies; Mr. Pelose converting to a
bank holding company structure, recruiting and developing the
management talent in credit and collections, enhancing
collections tactics, and overseeing the risk management
function; and Ms. Wilson improving efficiencies
through the use of technology, streamlining the monthly close
process, improving the property tax and financial
analysis & planning functions, and improving the Audit
Committee quarterly review process. In 2008, the Compensation
Committee determined that Mr. Dyer achieved 85% of his
individual goals, Mr. Pelose achieved 85% of his individual
goals, and Ms. Wilson achieved 70% of her individual goals.
The weighted calculation of the bonus payable to each executive
in 2008 is as follows: Mr. Dyer corporate goal
(50% weighting times 0% achievement) plus individual goal (50%
weighting times 85% achievement) equals 42.5% payout of the
target bonus of $272,000, or $115,600;
Mr. Pelose corporate goal (50% weighting times
0% achievement) plus individual goal (50% weighting times 85%
achievement) equals 42.5% payout of the target bonus of
$221,250, or $94,031; and Ms. Wilson corporate
goal (50% weighting times 0% achievement) plus individual goal
(50% weighting times 70% achievement) equals 35% payout of the
target bonus of $113,805, or $39,832. The table below shows the
aggregate 2008 bonus opportunity at the threshold, target and
maximum levels and the actual bonus achieved:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 Annual Bonus Opportunity
|
|
|
Actual Bonus
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Achieved for 2008
|
|
|
Daniel P. Dyer
|
|
$
|
136,000
|
|
|
$
|
272,000
|
|
|
$
|
476,000
|
|
|
$
|
115,600
|
|
George D. Pelose
|
|
$
|
110,625
|
|
|
$
|
221,250
|
|
|
$
|
320,812
|
|
|
$
|
94,031
|
|
Lynne C. Wilson
|
|
$
|
56,902
|
|
|
$
|
113,805
|
|
|
$
|
160,625
|
|
|
$
|
39,832
|
|
Annual Equity-Based Incentives. In connection
with the Corporations annual equity-based incentive
program adopted based on the recommendations in the 2004 Watson
Study, on February 29, 2008, the Compensation Committee
reviewed and approved stock-based awards for the Executive
Officers based on the Corporations results for the year
and the executives individual contribution to those
results. Grants made under the annual equity-based incentive
plan to the Executive Officers in 2008 consisted of the
following:
|
|
|
|
|
Time Vested Options: These non-qualified stock
options were granted by the Compensation Committee on
February 29, 2008 at a strike price equal to $9.52 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest 25% per
year for the first four years from the
|
11
|
|
|
|
|
grant date. In 2008, the Corporation granted the following
amount of Time Vested options to the Executive Officers:
Mr. Dyer 22,642; Mr. Pelose
17,394; and Ms. Wilson 8,948.
|
|
|
|
|
|
Performance Based Options: These non-qualified
stock options were granted by the Compensation Committee on
February 29, 2008 at a strike price equal to $9.52 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. In 2008, the Corporation granted the
following amount of Performance Based options to the Executive
Officers: Mr. Dyer 31,034;
Mr. Pelose 23,842; and
Ms. Wilson 12,265. The number of Performance
Based option shares that vest on such date will be determined by
the Corporations EPS compounded average growth rate over
the four fiscal years following the grant date, as follows:
|
|
|
|
|
|
Four-Year EPS Compounded
|
|
% of Grant that shall
|
|
Average Growth Rate
|
|
Vest in Four Years
|
|
|
Less than 13.5%
|
|
|
0
|
%
|
13.5%-14.99%
|
|
|
33.33
|
%
|
15.0%-16.49%
|
|
|
66.66
|
%
|
16.5% or greater
|
|
|
100.00
|
%
|
|
|
|
|
|
Restricted Stock Awards: No bi-annual
restricted stock awards were made to the Executive Officers in
2008 (given that the last bi-annual award was made in 2007 and
the next bi-annual award is scheduled for 2009).
|
|
|
|
Matching Grant of MSOP Restricted
Stock: Pursuant to the Corporations MSOP
plan, the Compensation Committee made matching grants of
restricted stock to the Executive Officers. The restrictions on
the MSOP restricted stock will lapse ten years from the date of
grant; however, if the Executive Officer continuously maintains
ownership of an equal number of common shares for three years,
the vesting on the matching shares shall accelerate and fully
vest at the end of such three year period. In 2008, the
Corporation granted the following matching shares of restricted
stock to the Executive Officers: Mr. Dyer
6,050; Mr. Pelose 4,648; and
Ms. Wilson 2,391.
|
Restricted Stock Grants. On June 30,
2008, the Compensation Committee awarded Ms. Wilson
12,500 shares of restricted stock. On December 15,
2008 the Compensation Committee awarded 40,000 shares of
restricted stock to Mr. Dyer and 50,000 shares of
restricted stock to Mr. Pelose. On January 2, 2009,
the Compensation Committee awarded an additional
20,000 shares of restricted stock to Mr. Dyer. These
special grants of restricted shares were made by the
Compensation Committee to further align the interests of the
Executive Officers with those of the shareholders. These
restricted shares shall cliff vest three years from the grant
date.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis set forth above with
management and, based on such review and discussions, the
Compensation Committee recommended to the Board that the
Compensation Discussion and Analysis be included in the Proxy
Statement for the Corporations 2009 Annual Meeting of
Shareholders and included in the Corporations Annual
Report on
Form 10-K/A
for the year ended December 31, 2008.
This report is submitted by the members of the Compensation
Committee of the Board of Directors:
Lawrence J. DeAngelo (Chairman)
Edward Grzedzinski
Matthew J. Sullivan
Compensation
Committee Interlocks and Insider Participation
The members of the Corporations Compensation Committee are
named above. None of these individuals has ever been an officer
or employee or the Corporation or any of its subsidiaries and no
compensation committee interlocks existed during
2008.
12
Summary
Compensation Table
The following table sets forth the compensation awarded or paid,
or earned or accrued for services rendered to the Corporation in
all capacities during fiscal years 2008, 2007 and 2006 by the
Corporations Chief Executive Officer, Chief Financial
Officer and the other individual who was an executive officer
during fiscal year 2008. In accordance with SEC rules, the
compensation described in the table does not include medical,
group life insurance or other benefits which are available
generally to all our salaried employees.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Name & Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
|
Daniel Dyer
|
|
|
2008
|
|
|
$
|
334,808
|
|
|
|
|
|
|
$
|
142,770
|
|
|
$
|
111,562
|
|
|
$
|
115,600
|
|
|
$
|
11,441
|
|
|
$
|
716,181
|
|
Chief Executive Officer
|
|
|
2007
|
|
|
$
|
320,000
|
|
|
|
|
|
|
$
|
111,318
|
|
|
$
|
71,752
|
|
|
$
|
47,600
|
|
|
$
|
13,591
|
|
|
$
|
564,261
|
|
|
|
|
2006
|
|
|
$
|
302,077
|
|
|
|
|
|
|
$
|
244,893
|
|
|
$
|
124,942
|
|
|
$
|
72,750
|
|
|
$
|
12,391
|
|
|
$
|
757,053
|
|
George D. Pelose
|
|
|
2008
|
|
|
$
|
301,346
|
|
|
|
|
|
|
$
|
346,107
|
|
|
$
|
65,482
|
|
|
$
|
94,031
|
|
|
$
|
11,187
|
|
|
$
|
818,153
|
|
Chief Operating Officer and
|
|
|
2007
|
|
|
$
|
290,154
|
|
|
|
|
|
|
$
|
190,373
|
|
|
$
|
55,381
|
|
|
$
|
44,250
|
|
|
$
|
6,636
|
|
|
$
|
586,794
|
|
General Counsel
|
|
|
2006
|
|
|
$
|
270,048
|
|
|
|
|
|
|
$
|
360,847
|
|
|
$
|
85,501
|
|
|
$
|
105,497
|
|
|
$
|
8,787
|
|
|
$
|
830,680
|
|
Lynne C. Wilson
|
|
|
2008
|
|
|
$
|
252,937
|
|
|
|
|
|
|
$
|
85,389
|
|
|
$
|
16,970
|
|
|
$
|
39,832
|
|
|
$
|
6,485
|
|
|
$
|
401,613
|
|
Senior Vice President and
|
|
|
2007
|
|
|
$
|
245,812
|
|
|
|
|
|
|
$
|
52,672
|
|
|
$
|
5,691
|
|
|
$
|
24,147
|
|
|
$
|
2,451
|
|
|
$
|
330,773
|
|
Chief Financial
Officer(1)
|
|
|
2006
|
|
|
$
|
129,712
|
|
|
$
|
31,250
|
|
|
$
|
55,520
|
|
|
$
|
7,780
|
|
|
$
|
66,129
|
|
|
$
|
3,219
|
|
|
$
|
293,610
|
|
|
|
|
(1) |
|
Ms. Wilsons employment with the Corporation commenced
on June 5, 2006. She received a $31,250 starting bonus upon
the commencement of her employment. |
|
(2) |
|
Figures represent the cash portion of the bonuses earned for
that year (but paid in first quarter of the following year). For
fiscal 2007, the Compensation Committee approved the bonuses for
the Executive Officers that were recommended by the CEO, with
one exception: rather than paying the entire bonus amounts in
cash, the Compensation Committee decided to pay approximately
one-half in cash (which is reflected in the Non-Equity Incentive
Plan Compensation column for 2007) and the remainder in
restricted stock awards (Mr. Dyer
5,000 shares; Mr. Pelose
4,648 shares; and Ms. Wilson
2,245 shares) at a per share value equal to $9.52, which
was the closing price of the Corporations common stock on
that date. |
|
(3) |
|
Includes contributions made by the Corporation to the 401(k)
plan on behalf of the Executive Officers, and, except with
respect to Ms. Wilson, reimbursement of life and disability
insurance premiums pursuant to their employment agreements. The
2008 figures for Mr. Pelose and Ms. Wilson and the
2007 figure for Mr. Dyer include reimbursement of the cost
of a physical examination. Contributions made by the Corporation
to the 401(k) plan in 2008 were $3,450 for Mr. Dyer, $3,450
for Mr. Pelose and $3,135 for Ms. Wilson.
Reimbursement of life and disability insurance premiums in 2008
was $7,991 for Mr. Dyer and $4,387 for Mr. Pelose. |
13
Current
Compensation Grants of Plan-Based Awards
Table
The following Grants of Plan-Based Awards table provides
additional information about stock and option awards and equity
incentive plan awards granted to our Executive Officers during
the year ended December 31, 2008. The Corporation does not
have any non-equity incentive award plans and has therefore
omitted the corresponding columns. The compensation plans under
which the grants in the following table were made are described
in the Compensation for Executive Officers in
2008 Equity-Based Incentives.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other
|
|
|
Option
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Awards:
|
|
|
|
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Number
|
|
|
|
|
|
Fair
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
of
|
|
|
Exercise
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
|
|
|
Securities
|
|
|
or Base
|
|
|
Stock
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
Shares
|
|
|
Under-
|
|
|
Price of
|
|
|
and
|
|
|
|
|
|
|
Equity Incentive Plan Awards
|
|
|
of Stock
|
|
|
lying
|
|
|
Option
|
|
|
Option
|
|
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
or Units
|
|
|
Options
|
|
|
Awards
|
|
|
Awards
|
|
Name
|
|
Grant Date
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($/sh)
|
|
|
($)
|
|
|
Daniel P. Dyer
|
|
|
02/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
$
|
47,600
|
|
|
|
|
02/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,050
|
|
|
|
|
|
|
|
|
|
|
$
|
57,596
|
|
|
|
|
02/29/2008
|
|
|
|
10,345
|
|
|
|
20,689
|
|
|
|
31,034
|
|
|
|
|
|
|
|
|
|
|
$
|
9.52
|
|
|
$
|
107,998
|
|
|
|
|
02/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,642
|
|
|
$
|
9.52
|
|
|
$
|
72,002
|
|
|
|
|
12/15/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
$
|
119,200
|
|
George D. Pelose
|
|
|
02/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,648
|
|
|
|
|
|
|
|
|
|
|
$
|
44,249
|
|
|
|
|
02/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,648
|
|
|
|
|
|
|
|
|
|
|
$
|
44,249
|
|
|
|
|
02/29/2008
|
|
|
|
7,947
|
|
|
|
15,895
|
|
|
|
23,842
|
|
|
|
|
|
|
|
|
|
|
$
|
9.52
|
|
|
$
|
82,970
|
|
|
|
|
02/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,394
|
|
|
$
|
9.52
|
|
|
$
|
55,314
|
|
|
|
|
12/15/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
149,000
|
|
Lynne C. Wilson
|
|
|
02/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,245
|
|
|
|
|
|
|
|
|
|
|
$
|
21,372
|
|
|
|
|
02/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,391
|
|
|
|
|
|
|
|
|
|
|
$
|
22,762
|
|
|
|
|
02/29/2008
|
|
|
|
4,088
|
|
|
|
8,177
|
|
|
|
12,265
|
|
|
|
|
|
|
|
|
|
|
$
|
9.52
|
|
|
$
|
42,682
|
|
|
|
|
02/29/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,948
|
|
|
$
|
9.52
|
|
|
$
|
28,455
|
|
|
|
|
06/30/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
|
|
|
|
|
|
|
$
|
86,625
|
|
Outstanding
Equity Awards at Fiscal Year-End 2008
The following table summarizes the equity awards we have made to
our Executive Officers which are outstanding as of
December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
or Payout
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
of
|
|
Value of
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
Market
|
|
Unearned
|
|
Unearned
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
Value of
|
|
Shares,
|
|
Shares,
|
|
|
|
|
|
|
Awards;
|
|
|
|
|
|
Number
|
|
Shares
|
|
Units or
|
|
Units or
|
|
|
Number of
|
|
|
|
Number
|
|
|
|
|
|
of Shares
|
|
or Units
|
|
Other
|
|
Other
|
|
|
Securities
|
|
Number of
|
|
of Securities
|
|
|
|
|
|
or Units of
|
|
of Stock
|
|
Rights
|
|
Rights
|
|
|
Underlying
|
|
Securities
|
|
Underlying
|
|
|
|
|
|
Stock That
|
|
that
|
|
That
|
|
that
|
|
|
Unexercised
|
|
Underlying
|
|
Unexercised
|
|
Option
|
|
|
|
Have
|
|
Have
|
|
Have
|
|
Have
|
|
|
Options
|
|
Unexercised
|
|
Unearned
|
|
Exercise
|
|
Option
|
|
Not
|
|
Not
|
|
Not
|
|
Not
|
|
|
(#)
|
|
Options (#)
|
|
Options
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Vested
|
|
Vested
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($)
|
|
Daniel P. Dyer
|
|
|
28,000
|
|
|
|
|
|
|
|
|
|
|
$
|
4.23
|
|
|
|
4/03/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,240
|
|
|
|
|
|
|
|
|
|
|
$
|
10.18
|
|
|
|
10/4/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.39
|
|
|
|
1/17/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.39
|
|
|
|
1/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,650
|
|
|
|
|
|
|
|
|
|
|
$
|
10.18
|
|
|
|
1/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,000
|
|
|
|
7,000
|
(1)
|
|
|
|
|
|
$
|
18.80
|
|
|
|
1/29/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
or Payout
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
of
|
|
Value of
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
Market
|
|
Unearned
|
|
Unearned
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
Value of
|
|
Shares,
|
|
Shares,
|
|
|
|
|
|
|
Awards;
|
|
|
|
|
|
Number
|
|
Shares
|
|
Units or
|
|
Units or
|
|
|
Number of
|
|
|
|
Number
|
|
|
|
|
|
of Shares
|
|
or Units
|
|
Other
|
|
Other
|
|
|
Securities
|
|
Number of
|
|
of Securities
|
|
|
|
|
|
or Units of
|
|
of Stock
|
|
Rights
|
|
Rights
|
|
|
Underlying
|
|
Securities
|
|
Underlying
|
|
|
|
|
|
Stock That
|
|
that
|
|
That
|
|
that
|
|
|
Unexercised
|
|
Underlying
|
|
Unexercised
|
|
Option
|
|
|
|
Have
|
|
Have
|
|
Have
|
|
Have
|
|
|
Options
|
|
Unexercised
|
|
Unearned
|
|
Exercise
|
|
Option
|
|
Not
|
|
Not
|
|
Not
|
|
Not
|
|
|
(#)
|
|
Options (#)
|
|
Options
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Vested
|
|
Vested
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($)
|
|
|
|
|
16,071
|
|
|
|
5,358
|
(2)
|
|
|
|
|
|
$
|
17.52
|
|
|
|
1/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,008
|
|
|
|
4,008
|
(3)
|
|
|
|
|
|
$
|
21.60
|
|
|
|
3/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,026
|
(4)
|
|
$
|
21.60
|
|
|
|
3/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,328
|
|
|
|
6,986
|
(5)
|
|
|
|
|
|
$
|
20.77
|
|
|
|
3/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,919
|
(6)
|
|
$
|
20.77
|
|
|
|
3/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,642
|
(7)
|
|
|
|
|
|
$
|
9.52
|
|
|
|
2/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,034
|
(8)
|
|
$
|
9.52
|
|
|
|
2/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,760
|
(9)
|
|
$
|
7,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
(10)
|
|
$
|
23,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,495
|
(11)
|
|
$
|
6,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,320
|
(12)
|
|
$
|
21,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,773
|
(13)
|
|
$
|
7,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
(14)
|
|
$
|
13,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,050
|
(15)
|
|
$
|
15,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(16)
|
|
$
|
104,400
|
|
|
|
|
|
|
|
|
|
George D. Pelose
|
|
|
5,050
|
|
|
|
|
|
|
|
|
|
|
$
|
5.01
|
|
|
|
7/27/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.39
|
|
|
|
8/22/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,700
|
|
|
|
|
|
|
|
|
|
|
$
|
10.18
|
|
|
|
10/4/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.39
|
|
|
|
1/17/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.39
|
|
|
|
1/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,055
|
|
|
|
|
|
|
|
|
|
|
$
|
10.18
|
|
|
|
1/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
$
|
14.00
|
|
|
|
11/11/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,125
|
|
|
|
4,375
|
(1)
|
|
|
|
|
|
$
|
18.80
|
|
|
|
1/29/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,934
|
|
|
|
2,312
|
(2)
|
|
|
|
|
|
$
|
17.52
|
|
|
|
1/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,945
|
|
|
|
1,946
|
(3)
|
|
|
|
|
|
$
|
21.60
|
|
|
|
3/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,838
|
(17)
|
|
$
|
21.60
|
|
|
|
3/28/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,789
|
|
|
|
5,367
|
(5)
|
|
|
|
|
|
$
|
20.77
|
|
|
|
3/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,924
|
(18)
|
|
$
|
20.77
|
|
|
|
3/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,394
|
(7)
|
|
|
|
|
|
$
|
9.52
|
|
|
|
2/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,842
|
(27)
|
|
$
|
9.52
|
|
|
|
2/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
712
|
(9)
|
|
$
|
1,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,883
|
(10)
|
|
$
|
10,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,211
|
(11)
|
|
$
|
3,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,100
|
(19)
|
|
$
|
60,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,500
|
(20)
|
|
$
|
66,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,391
|
(12)
|
|
$
|
16,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,130
|
(13)
|
|
$
|
5,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,648
|
(14)
|
|
$
|
12,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,648
|
(15)
|
|
$
|
12,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(16)
|
|
$
|
130,500
|
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
or Payout
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
of
|
|
Value of
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
Market
|
|
Unearned
|
|
Unearned
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
Value of
|
|
Shares,
|
|
Shares,
|
|
|
|
|
|
|
Awards;
|
|
|
|
|
|
Number
|
|
Shares
|
|
Units or
|
|
Units or
|
|
|
Number of
|
|
|
|
Number
|
|
|
|
|
|
of Shares
|
|
or Units
|
|
Other
|
|
Other
|
|
|
Securities
|
|
Number of
|
|
of Securities
|
|
|
|
|
|
or Units of
|
|
of Stock
|
|
Rights
|
|
Rights
|
|
|
Underlying
|
|
Securities
|
|
Underlying
|
|
|
|
|
|
Stock That
|
|
that
|
|
That
|
|
that
|
|
|
Unexercised
|
|
Underlying
|
|
Unexercised
|
|
Option
|
|
|
|
Have
|
|
Have
|
|
Have
|
|
Have
|
|
|
Options
|
|
Unexercised
|
|
Unearned
|
|
Exercise
|
|
Option
|
|
Not
|
|
Not
|
|
Not
|
|
Not
|
|
|
(#)
|
|
Options (#)
|
|
Options
|
|
Price
|
|
Expiration
|
|
Vested
|
|
Vested
|
|
Vested
|
|
Vested
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
(#)
|
|
($)
|
|
Date
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($)
|
|
Lynne C. Wilson
|
|
|
1,269
|
|
|
|
1,269
|
(21)
|
|
|
|
|
|
$
|
21.32
|
|
|
|
6/5/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,808
|
(22)
|
|
$
|
21.32
|
|
|
|
6/5/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
864
|
|
|
|
2,593
|
(5)
|
|
|
|
|
|
$
|
20.77
|
|
|
|
3/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,794
|
(23)
|
|
$
|
20.77
|
|
|
|
3/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,948
|
(7)
|
|
|
|
|
|
$
|
9.52
|
|
|
|
2/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,265
|
(28)
|
|
$
|
9.52
|
|
|
|
2/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,100
|
(24)
|
|
$
|
23,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,932
|
(25)
|
|
$
|
5,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,825
|
(26)
|
|
$
|
17,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,087
|
(12)
|
|
$
|
8,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,029
|
(13)
|
|
$
|
2,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,245
|
(14)
|
|
$
|
5,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,391
|
(15)
|
|
$
|
6,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
(29)
|
|
$
|
32,625
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.) |
|
The expiration date of the options is ten years after the grant
date. The options granted will vest and become exercisable over
an eight year period at the following annual increments: 2.5% in
first year; 5.0% in second year; 7.5% in third year; 10.0% in
fourth year; 15.0% in fifth year; and 20.0% in each of the
sixth, seventh and eighth years. On March 9, 2007 the
Corporation reported GAAP net income greater than
$17.0 million for a fiscal year, accelerating vesting of
the options so that the remaining amount of unexercised shares
from the seventh and eighth years of the vesting schedule became
immediately exercisable. |
|
(2.) |
|
Stock options vest at the rate of 25% per year, with vesting
dates for the remaining 25% at 1/11/2009. |
|
(3.) |
|
Stock options vest at the rate of 25% per year, with vesting
dates for the remaining 50% at 3/28/2009; and
3/28/2010. |
|
(4.) |
|
The Performance Based non-qualified stock options were granted
on March 28, 2006 at a strike price equal to $21.60 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 4,008; at 15.0%-16.49%, 8,017; at 16.5% or
greater, 12,026. |
|
(5.) |
|
Stock options vest at the rate of 25% per year, with vesting
dates for the remaining 75% at 3/16/2009; 3/16/2010; and
3/16/2011. |
|
(6.) |
|
The Performance Based non-qualified stock options were granted
on March 16, 2007 at a strike price equal to $20.77 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 4,306; at 15.0%-16.49%, 8,612; at 16.5% or
greater, 12,919. |
|
(7.) |
|
Stock options vest at the rate of 25% per year, with vesting
dates of 2/28/2009; 2/28/2010; 2/28/2011; and 2/28/2012. |
|
(8.) |
|
The Performance Based non-qualified stock options were granted
on February 29, 2008 at a strike price equal to $9.52 (the
closing price of the Corporations common stock on that
date). These options have a term of |
16
|
|
|
|
|
seven years and vest four years from the grant date. The number
of option shares that vest on such date will be determined by
the Corporations EPS compounded average growth rate over
the four fiscal years following the grant date, as follows: EPS
compounded average growth rate over the four fiscal years at
less than 13.5%, 0; at 13.5%-14.99%, 10,345; at 15.0%-16.49%,
20,689; at 16.5% or greater, 31,034. |
|
(9.) |
|
The shares were granted on March 9, 2004, and vest ten
years from the grant date. |
|
(10.) |
|
Represents grant of restricted shares made on January 11,
2005 (the grant date stock price was $17.52). The restrictions
on these shares shall lapse on January 11, 2012. Vesting
shall immediately accelerate (and all restrictions shall lapse)
upon the Corporation reporting certain minimum compounded
average net income growth for a period of four consecutive
fiscal years after the date of grant (using reported net income
for 2004 as the initial measurement point). |
|
(11.) |
|
Represents matching grant of restricted stock under MSOP made on
March 28, 2006 (the grant date stock price was $21.60). The
restrictions on these matching restricted shares shall lapse on
March 28, 2016. Vesting shall immediately accelerate (and
all restrictions shall lapse) after three years (on
March 28, 2009) if the grantee maintained continuous
outright ownership of a matching number of unrestricted shares
of the Corporation for the entire three year period. |
|
(12.) |
|
Represents grant of restricted shares made on March 16,
2007 (the grant date stock price was $20.77). The restrictions
on these shares shall lapse on March 16, 2014. Vesting
shall immediately accelerate (and all restrictions shall lapse)
upon the Corporation reporting certain minimum compounded
average net income growth for a period of four consecutive
fiscal years after the date of grant (using reported net income
for 2006 as the initial measurement point). |
|
(13.) |
|
Represents matching grant of restricted stock under MSOP made on
March 16, 2007 (the grant date stock price was $20.77). The
restrictions on these matching restricted shares shall lapse on
March 16, 2017. Vesting shall immediately accelerate (and
all restrictions shall lapse) after three years (on
March 16, 2010) if the grantee maintained continuous
outright ownership of a matching number of unrestricted shares
of the Corporation for the entire three year period. |
|
(14.) |
|
Represents grant of restricted shares granted in lieu of a
portion of the Executive Officers cash bonus. The
restrictions on these shares shall lapse on February 28,
2009. |
|
(15.) |
|
Represents matching grant of restricted stock under MSOP made on
February 29, 2008 (the grant date stock price was $9.52).
The restrictions on these matching restricted shares shall lapse
on February 28, 2018. Vesting shall immediately accelerate
(and all restrictions shall lapse) after three years (on
February 28, 2011) if the grantee maintained
continuous outright ownership of a matching number of
unrestricted shares of the Corporation for the entire three year
period. |
|
(16.) |
|
Represents grant of restricted shares made on December 15,
2008 (the grant date stock price was $2.98). The restrictions on
these shares shall lapse on December 15, 2011. |
|
(17.) |
|
The Performance Based non-qualified stock options were granted
on March 28, 2006 at a strike price equal to $21.60 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 1,946; at 15.0%-16.49%, 3,892; at 16.5% or
greater, 5,838. |
|
(18.) |
|
The Performance Based non-qualified stock options were granted
on March 16, 2007 at a strike price equal to $20.77 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 3,308; at 15.0%-16.49%, 6,616; at 16.5% or
greater, 9,924. |
|
(19.) |
|
Represents an original grant of 33,000 of restricted shares
granted on May 19, 2006, that vested 15% on May 19,
2007 and 15% on May 19, 2008 and that will vest 70% on
May 19, 2009. |
17
|
|
|
(20.) |
|
Shares of performance based restricted stock granted on
May 19, 2006, whereby all or a portion of these shares may
vest three years after the issuance date depending on the
diluted EPS compound average growth rate over such three year
period (i.e., the number of shares that vest could be 0; 8,500;
17,000; or 25,500). |
|
(21.) |
|
Stock options vest at the rate of 25% per year, with vesting
dates for the remaining 50% at 6/5/2009; and 6/5/2010. |
|
(22.) |
|
The Performance Based non-qualified stock options were granted
on June 5, 2006 at a strike price equal to $21.32 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 1,269; at 15.0%-16.49%, at 2,539; at 16.5% or
greater, 3,808. |
|
(23.) |
|
The Performance Based non-qualified stock options were granted
on March 16, 2007 at a strike price equal to $20.77 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 1,598; at 15.0%-16.49%, 3,196; at 16.5% or
greater, 4,794. |
|
(24.) |
|
Represents grant of restricted shares made on June 5, 2006
(the grant date stock price was $21.32). The restrictions on
these shares shall lapse on June 5, 2010. |
|
(25.) |
|
Represents grant of restricted shares made on June 5, 2006
(the grant date stock price was $21.32). The restrictions on
these shares shall lapse on June 5, 2013. Vesting shall
immediately accelerate (and all restrictions shall lapse) upon
the Corporation reporting certain minimum compounded average net
income growth for a period of four consecutive fiscal years
after the date of grant (using reported net income for 2005 as
the initial measurement point). |
|
(26.) |
|
Shares of restricted stock granted on June 5, 2006, whereby
all or a portion of these shares may vest four years after the
issuance date depending on the diluted EPS compound average
growth rate over such four year period (i.e., the number of
shares that vest could be 0; 2,275; 4,550; or 6,825). |
|
(27.) |
|
The Performance Based non-qualified stock options were granted
on February 29, 2008 at a strike price equal to $9.52 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 7,947; at 15.0%-16.49%, 15,895; at 16.5% or
greater, 23,842. |
|
(28.) |
|
The Performance Based non-qualified stock options were granted
on February 29, 2008 at a strike price equal to $9.52 (the
closing price of the Corporations common stock on that
date). These options have a term of seven years and vest four
years from the grant date. The number of option shares that vest
on such date will be determined by the Corporations EPS
compounded average growth rate over the four fiscal years
following the grant date, as follows: EPS compounded average
growth rate over the four fiscal years at less than 13.5%, 0; at
13.5%-14.99%, 4,088; at 15.0%-16.49%, 8,177; at 16.5% or
greater, 12,265. |
|
(29.) |
|
Represents grant of restricted shares made on June 30, 2008
(the grant date stock price was $6.93). The restrictions on
these shares shall lapse on June 30, 2011. |
Option
Exercises and Stock Vested Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized on
|
|
|
Acquired on Vesting
|
|
|
Value Realized on
|
|
Name
|
|
Exercise (#)
|
|
|
Exercise ($)
|
|
|
(#)
|
|
|
Vesting ($)
|
|
|
Daniel P. Dyer
|
|
|
|
|
|
|
|
|
|
|
2,833
|
|
|
$
|
27,452
|
|
George D. Pelose
|
|
|
|
|
|
|
|
|
|
|
6,244
|
|
|
$
|
45,011
|
|
Lynne C. Wilson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
Potential
Payments Upon Termination of Employment or Change in
Control
The following tables show potential payments to
Messrs. Dyer and Pelose upon termination of employment,
including without limitation a change in control, assuming a
December 31, 2008 termination date. Stock option benefit
amounts are computed for each option as to which vesting will be
accelerated upon the occurrence of the termination event by
multiplying the number of shares underlying the option by the
difference between the $2.61 closing price per share of our
common stock on December 31, 2008 and the exercise price
per share of the option. Restricted stock benefit amounts are
computed by multiplying the number of restricted shares as to
which vesting will be accelerated by the $2.61 per share closing
price of our common stock on December 31, 2008.
A description of the applicable provisions of the employment
agreements for Messrs. Dyer and Pelose follows the tables.
Daniel P.
Dyer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control,
|
|
|
|
|
|
|
|
|
|
Non-Renewal by
|
|
|
|
|
|
|
|
|
|
Corporation,
|
|
|
|
|
|
|
|
|
|
Termination without
|
|
|
For Cause or
|
|
|
|
|
|
|
Cause or for Good
|
|
|
Voluntary
|
|
|
Death or
|
|
Benefit Type
|
|
Reason
|
|
|
Termination
|
|
|
Disability
|
|
|
Lump Sum Payments
|
|
$
|
1,173,984
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
$
|
199,399
|
|
|
|
|
|
|
$
|
199,399
|
|
Excise Tax
Gross-Ups
|
|
|
|
|
|
|
|
|
|
|
|
|
George D.
Pelose
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Control,
|
|
|
|
|
|
|
|
|
|
Non-Renewal by
|
|
|
|
|
|
|
|
|
|
Corporation,
|
|
|
|
|
|
|
|
|
|
Termination without
|
|
|
For Cause or
|
|
|
|
|
|
|
Cause or for Good
|
|
|
Voluntary
|
|
|
Death or
|
|
Benefit Type
|
|
Reason
|
|
|
Termination
|
|
|
Disability
|
|
|
Lump Sum Payment
|
|
$
|
979,259
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock
|
|
$
|
319,002
|
|
|
|
|
|
|
$
|
319,002
|
|
Excise Tax
Gross-Ups
|
|
|
|
|
|
|
|
|
|
|
|
|
The Corporation has employment agreements with Messrs. Dyer
and Pelose, which run through November 2010.
The Corporation may terminate the employment agreements for or
without cause. A termination for cause requires a vote of
two-thirds of our directors and prior written notice to the
executive providing an opportunity to remedy the cause. Cause
generally means: 1) willful fraud or material dishonesty by
the executive in connection with the performance of his
employment duties; 2) grossly negligent or intentional
failure by the executive to substantially perform his employment
duties; 3) material breach by the executive of certain
protective covenants (as described below); or 4) the
conviction of, or plea of nolo contendere to, a charge of
commission of a felony by the executive.
The Corporation may terminate the executives employment
upon non-renewal of the employment agreement. Upon non-renewal
of the employment agreement, the executives employment
with the Corporation will terminate as of the last day of the
agreement term, provided that the executive was willing and able
to execute a new contract providing terms and conditions
substantially similar to those in the employment agreement and
to continue providing services under the employment agreement.
The executive may terminate his employment agreement with or
without good reason. A termination by the executive for good
reason requires prior written notice providing the Corporation
with the opportunity to remedy
19
the good reason. Good reason means the occurrence of any one or
more of the following, without the consent of the executive:
(a) a material diminution in the executives
authority, duties or responsibilities; (b) the Corporation
requires that the executive report to an officer or employee of
the Corporation instead of reporting directly to the
Corporations Chief Executive Officer, in the case of
Mr. Pelose, and Board of Directors, in the case of
Mr. Dyer; (c) a material diminution in the
executives base compensation, which, for purposes of the
employment agreement, means the executives base salary and
target incentive bonus percentage in effect immediately prior to
the action taken to diminish the executives base salary or
target incentive bonus percentage; (d) a material change in
the geographic location at which the executive must perform
services, which shall include a change to a location that is
more than twenty-five (25) miles from the location at which
the executive performs services under the employment agreement
as of December 31, 2008; or (e) any other action or
inaction that constitutes a material breach by the Corporation
under the employment agreement.
If a change in control (as defined in the employment agreements)
occurs during the term of the employment agreements, then the
executives employment with the Corporation shall
automatically terminate without cause as of the date of the
change of control.
Pursuant to the terms of their employment agreements, if the
employment of Messrs. Dyer or Pelose ends for any reason,
the Corporation will pay accrued salary, bonuses and incentive
payments already determined and other existing obligations. In
addition, in the event of a termination of employment due to
either termination by the Corporation without cause, the
resignation by the executive for good reason, non-renewal by the
Corporation or a change in control, the executive will receive a
lump sum payment equal to: (i) two times current base
salary; (ii) two times the average incentive bonus earned
for the preceding two fiscal years; (iii) two years of
medical and dental benefits for the executive and his family,
based on the current monthly COBRA premium plus an increase to
cover taxes; (iv) two years of life and long-term
disability insurance coverage, based on the current annual
premiums, plus an increase to cover taxes; and (v) any
incentive bonus earned but not yet paid. The lump sum amount is
payable within thirty (30) days following the termination
date (provided the executive executes and does not revoke a
standard release of employment claims). In the event that the
executives employment is terminated on account of the
executives death or disability, termination by the
Corporation without cause, the resignation by the executive for
good reason, non-renewal by the Corporation or a change in
control, then all of the options, restricted stock and other
stock incentives granted to the executive will become fully
vested, and the executive will have up to two years in which to
exercise all vested options. If any payments due to the
executive under the employment agreement would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue
Code, then the Corporation will be required to gross up the
executives payments for the amount of the excise tax plus
the amount of income and other taxes due as a result of the
gross up payment.
Notwithstanding the provisions described above, the employment
agreements are intended to comply with the requirements of
Section 409A of the Internal Revenue Code, to the extent
applicable, and the agreements shall be interpreted to avoid any
penalty sanctions under the Code, and therefore may require a
payment delay of severance benefits or reimbursements to be paid
to the executive.
Upon termination of the employment agreement, the executive will
be subject to certain protective covenants. If the Corporation
terminates the executives employment without cause or if
the executive terminates his employment with good reason, the
executive will be prohibited from competing with the Corporation
and from soliciting its customers for an
18-month
period; provided that such period shall be 12 months for
all other terminations. In addition, for a
24-month
period after termination of employment, the executive is
prohibited from hiring the Corporations employees.
Ms. Wilson does not have an employment agreement, but
pursuant to the terms of the Corporations 2003 Equity
Compensation Plan, as amended (the Plan), upon a
change of control (as defined in the Plan), all outstanding
options shall immediately vest and become exercisable, and the
restrictions and conditions on all outstanding restricted stock
awards shall immediately lapse. Based on this, in the event of a
change of control (as defined in the Plan), assuming a
December 31, 2008 change of control date, the benefit to
Ms. Wilson would be $102,075 in restricted stock and $0 in
options. Stock option benefit amounts are computed for each
option as to which vesting will be accelerated upon the
occurrence of the termination event by multiplying the number of
shares underlying the option by the difference between the $2.61
closing price per share of our common stock on
20
December 31, 2008 and the exercise price per share of the
option. Restricted stock benefit amounts are computed by
multiplying the number of restricted shares as to which vesting
will be accelerated by the $2.61 per share closing price of our
common stock on December 31, 2008.
Directors
Compensation
The non-employee independent members of the Board of Directors
receive a $30,000 annual retainer (payable in quarterly
installments) for their service on the Board of Directors.
Non-employee independent members of the Board of Directors are
granted an Option to purchase 5,000 shares of the
Corporations common stock upon their initial appointment
or election to the Board. These Options vest in four equal
annual installments. In addition, non-employee independent
members of the Board of Directors receive annual grants under
the Corporations 2003 Equity Compensation Plan, as
amended, of (i) restricted stock yielding a present value
of $27,000 at the Stock Award grant date and (ii) Options
yielding a present value of $9,000 at the grant date (using an
option pricing model). The annual restricted Stock Awards vest
at the earlier of (a) seven years from the grant date and
(b) six months following the non-employee independent
directors termination of Board service. The annual Option
grants cliff vest one year from the grant date. The per share
exercise price of all Options granted to non-employee
independent members of the Board of Directors is equal to the
fair market value per share on the date the Option is granted.
The chairman of the Audit Committee receives additional
compensation of $10,000 per year, the chairman of the
Compensation Committee receives additional compensation of
$4,000 per year, and the chairman of the Nominating Committee
receives additional compensation of $2,000 per year. These fees
are paid in quarterly installments.
In 2008, the Lead Independent Director received additional
compensation of $25,000 per year, paid in quarterly installments.
On March 31, 2009, the Board of Directors elected
Mr. McGinty to the role of Chairman of the Board and
eliminated the position of Lead Independent Director. In
connection therewith, the Board of Directors also approved the
following total Director compensation to be paid to the
non-employee Chairman of the Board of the Corporation:
(i) $100,000 total annual retainer (payable in quarterly
installments), (ii) an annual option grant yielding a
present value of $10,250 and (iii) an annual restricted
stock grant yielding a present value of $30,750. The annual
option grant will have a seven year term and will cliff vest one
year from the grant date, and the annual restricted stock grant
will vest at the earlier of (a) seven years from the grant
gate and (b) six months following the non-employee
Chairmans termination of Board service. Effective
April 13, 2009, Mr. McGinty voluntarily agreed to
reduce his annual retainer by 20% for an unspecified period of
time in light of the difficult economic environment.
21
The following table sets forth compensation from the Corporation
for the non-employee independent members of the Board of
Directors in 2008. The table does not include reimbursement of
travel expenses related to attending Board, Committee and
Corporation business meetings.
Director
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
in Cash
|
|
|
Awards
|
|
|
Awards
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Kevin J. McGinty
|
|
$
|
59,000
|
|
|
$
|
9,970
|
|
|
$
|
8,818
|
|
|
$
|
77,788
|
|
John J. Calamari
|
|
$
|
40,000
|
|
|
$
|
9,970
|
|
|
$
|
8,818
|
|
|
$
|
58,788
|
|
James W. Wert
|
|
$
|
30,000
|
|
|
$
|
9,970
|
|
|
$
|
8,818
|
|
|
$
|
48,788
|
|
Lawrence J. DeAngelo
|
|
$
|
32,000
|
|
|
$
|
9,970
|
|
|
$
|
8,818
|
|
|
$
|
50,788
|
|
Edward Grzedzinski
|
|
$
|
30,000
|
|
|
$
|
9,970
|
|
|
$
|
19,062
|
|
|
$
|
59,032
|
|
Matthew J.
Sullivan(1)
|
|
$
|
22,500
|
|
|
$
|
2,240
|
|
|
$
|
7,525
|
|
|
$
|
32,265
|
|
|
|
|
(1) |
|
Mr. Sullivan was appointed to the Corporations Board
of Directors in April 2008. |
Director
Ownership Requirements
Non-employee independent directors are subject to certain
ownership requirements. Within five years of joining the
Corporations Board of Directors (or five years from
May 26, 2005 for each individual who was a director on that
date), each non-employee independent director shall be required
to own stock of the Corporation with a value equal to five times
the directors annual retainer. Restricted shares may be
counted toward the ownership requirement. Non-employee
independent directors are also required to hold 50% of the net,
after tax profit realized on the exercise of stock
options in the form of shares of Corporation stock for a minimum
period of one year after the exercise.
22
|
|
Item 12.
|
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
|
The following table sets forth information with respect to the
beneficial ownership of our common stock as of March 1,
2009, by:
|
|
|
|
|
each person or entity known by us to own beneficially more than
5% of our stock;
|
|
|
|
each of our named executive officers in the Summary Compensation
Table below;
|
|
|
|
each of our directors; and
|
|
|
|
all of our executive officers and directors as a group.
|
Under the rules of the SEC, a person is deemed to be a
beneficial owner of a security if that person has or shares
voting power, which includes the power to vote or to direct the
voting of such security, or investment power, which includes the
power to dispose of or to direct the disposition of such
security. A person is also deemed to be a beneficial owner of
any securities for which that person has a right to acquire
beneficial ownership within 60 days. Under these rules,
more than one person may be deemed a beneficial owner of the
same securities and a person may be deemed to be the beneficial
owner of securities as to which such person has no economic
interest.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
Percent
|
|
Name of Beneficial Owner
|
|
Beneficially Owned
|
|
|
of Class
|
|
|
Executive Officers and Directors
|
|
|
|
|
|
|
|
|
Daniel P.
Dyer(1,2)
|
|
|
485,946
|
|
|
|
4.0
|
%
|
George D.
Pelose(1,2)
|
|
|
385,219
|
|
|
|
3.1
|
|
Lynne C.
Wilson(1,2)
|
|
|
84,899
|
|
|
|
*
|
|
John J.
Calamari(1,3)
|
|
|
19,626
|
|
|
|
*
|
|
Lawrence J.
DeAngelo(1,3)
|
|
|
27,613
|
|
|
|
*
|
|
Edward
Grzedzinski(1,3)
|
|
|
12,100
|
|
|
|
*
|
|
Kevin J.
McGinty(1,3)
|
|
|
72,853
|
|
|
|
*
|
|
James W.
Wert(1,3)
|
|
|
68,817
|
|
|
|
*
|
|
Matthew J.
Sullivan(4)
|
|
|
2,316,709
|
|
|
|
18.9
|
|
All executive officers and directors as a group
(9 persons)(1,5)
|
|
|
3,473,782
|
|
|
|
28.3
|
|
5% Shareholders
|
|
|
|
|
|
|
|
|
Peachtree Equity Investment Management,
Inc.(6)
1170 Peachtree St., Ste. 1610
Atlanta, GA 30309
|
|
|
2,309,934
|
|
|
|
19.6
|
|
Columbia Wanger Asset Management,
L.P.(7)
227 West Monroe Street, Suite 3000
Chicago, IL 60606
|
|
|
1,214,550
|
|
|
|
9.93
|
|
William Blair & Company,
LLC(8)
222 W. Adams Street
Chicago, IL 60606
|
|
|
1,046,465
|
|
|
|
8.56
|
|
Primus Venture Partners IV,
Inc.(9)
5900 Landerbrook Dr., Ste. 200
Cleveland, OH
44124-4020
|
|
|
823,713
|
|
|
|
6.7
|
|
Lord, Abbett & Co.
LLC(10)
90 Hudson Street
Jersey City, NJ 07302
|
|
|
727,791
|
|
|
|
5.95
|
|
|
|
|
* |
|
Represents less than 1%. |
|
(1) |
|
Does not include options vesting more than 60 days after
March 1, 2009, held by Mr. Dyer (83,622),
Mr. Pelose (59,701), Ms. Wilson (30,576),
Mr. Calamari (3,704), Mr. DeAngelo (3,704),
Mr. Grzedzinski (6,204), Mr. McGinty (3,704),
Mr. Sullivan (7,454), and Mr. Wert (3,704). Does
include, where applicable, |
23
|
|
|
|
|
shares held in the 2003 Employee Stock Purchase Plan and
restricted shares awarded under the 2003 Equity Compensation
Plan, as amended. |
|
(2) |
|
Includes options for Mr. Dyer (160,648), Mr. Pelose
(135,895) and Ms Wilson (5,234) to purchase shares that are
currently exercisable or will become exercisable within
60 days following March 1, 2009. |
|
(3) |
|
Includes options for Mr. Calamari (10,153),
Mr. DeAngelo (10,153), Mr. Grzedzinksi (4,992),
Mr. McGinty (41,344), Mr. Sullivan (1,250), and
Mr. Wert (19,953) to purchase shares that are currently
exercisable or will become exercisable within 60 days
following March 1, 2009. |
|
(4) |
|
Includes 2,000 unrestricted shares owned directly by
Mr. Sullivan and 3,525 restricted shares awarded to
Mr. Sullivan in connection with Board appointment and
membership in accordance with the Corporations Director
compensation program described above in Directors
Compensation. The remaining 2,309,934 shares are
reported as beneficially owned by Peachtree Equity Investment
Management, Inc. are based on a Schedule 13G filed jointly
by such entity, WCI (Private Equity) LLC (WCI) and
Matthew J. Sullivan with the Securities and Exchange Commission
(SEC) on February 17, 2004. The shares are
reported as directly owned by WCI, whose sole manager is
Peachtree Equity Investment Management, Inc. (the
Manager). The Manager could be deemed to be an
indirect beneficial owner of the reported shares, and could be
deemed to share such beneficial ownership with WCI. Matthew J.
Sullivan is a director of the Manager, and could be deemed to be
an indirect beneficial owner of the reported shares, and could
be deemed to share such indirect beneficial ownership with the
Manager and WCI. Mr. Sullivan disclaims beneficial
ownership of the reported shares except to the extent of his
pecuniary interest therein. |
|
(5) |
|
Includes options to purchase 389,622 shares that are
currently exercisable or will become exercisable within
60 days following March 1, 2009. |
|
(6) |
|
The shares reported as beneficially owned by Peachtree Equity
Investment Management, Inc. are based on a Schedule 13G
filed jointly by such entity, WCI (Private Equity) LLC
(WCI) and Matthew J. Sullivan with the SEC on
February 17, 2004. The shares are reported as directly
owned by WCI, whose sole manager is Peachtree Equity Investment
Management, Inc. (the Manager). The Manager could be
deemed to be an indirect beneficial owner of the reported
shares, and could be deemed to share such beneficial ownership
with WCI. Matthew J. Sullivan is a director of the Manager, and
could be deemed to be an indirect beneficial owner of the
reported shares, and could be deemed to share such indirect
beneficial ownership with the Manager and WCI. Mr. Sullivan
disclaims beneficial ownership of the reported shares except to
the extent of his pecuniary interest therein. |
|
(7) |
|
The shares reported as beneficially owned by Columbia Wanger
Asset Management, L.P. (Columbia) are reported as of
December 31, 2008, based on a Schedule 13G/A filed by
Columbia on February 6, 2009. Columbia is the beneficial
owner of 1,214,550 shares and these shares include shares
held by Columbia Acorn Trust (CAT), a Massachusetts business
trust that is advised by the reporting person and that holds
9.73% of the shares of issuer. |
|
(8) |
|
The shares reported as beneficially owned by William
Blair & Company, L.L.C. (Blair) are
reported as of December 31, 2008, based on a Schedule 13G/A
filed by Blair on January 12, 2009. |
|
(9) |
|
The shares reported as beneficially owned by Primus Venture
Partners IV, Inc. are based on an amendment to a
Schedule 13G/A filed jointly by Primus Capital Fund IV
Limited Partnership (PCF IV LP), Primus Venture
Partners IV Limited Partnership (PVP IV LP) and
Primus Venture Partners IV, Inc. (PVP IV Inc.) with
the SEC on January 30, 2009. Each such reporting person has
reported that, as of December 31, 2008, they held shared
power to vote or to direct the vote and shared power to dispose
or to direct the disposition of the shares as follows:
(i) PCF IV LP has shared power to vote and to dispose of
790,764 shares currently held by PCF IV LP; (ii) PVP
IV LP, as the sole general partner of PCF IV LP, may be deemed
to have shared power to vote and to dispose of
790,764 shares currently held by PCF IV LP. In addition,
PVP IV LP is also the sole general partner of Primus Executive
Fund Limited Partnership (PEF LP) and, in such
capacity, may be deemed to have shared power to vote and dispose
of the 32,949 shares currently held by PEF LP;
(iii) PVP IV Inc., as the sole general partner of PVP IV
LP, may be deemed to have the shared power to vote and to
dispose of 790,764 shares currently held by PCF IV LP and
the 32,949 shares currently held by PEF LP. PVP IV Inc. has
four shareholders and directors: Loyal W. Wilson, William C.
Mulligan, Jonathan E. Dick and Steven |
24
|
|
|
|
|
Rothman. Each of PCF IV LP, PVP IV LP and PVP IV Inc. disclaims
beneficial ownership of any shares beneficially owned by each
other entity. |
|
(10) |
|
The shares reported as beneficially owned by Lord,
Abbett & Co. LLC are reported as of December 31,
2008, based on a Schedule 13G filed by Lord,
Abbett & Co. LLC on February 13, 2009. Lord,
Abbett & Co. LLC is the beneficial owner of
727,791 shares held on behalf on investment advisory
clients, which may include investment companies registered under
the Investment Company Act, employee benefit plans, pension
funds or other institutional clients. |
Securities
Authorized for Issuance under Equity Compensation
Plans
The following table discloses, as of December 31, 2008, the
number of outstanding options and other rights granted by the
Corporation to participants in equity compensation plans, as
well as the number of securities remaining available for future
issuance under these plans. The table provides this information
separately for equity compensation plans that have and have not
been approved by shareholders.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Remaining
|
|
|
|
|
|
|
|
|
|
Available
|
|
|
|
|
|
|
|
|
|
for
|
|
|
|
Number of
|
|
|
|
|
|
Future Issuance
|
|
|
|
Securities
|
|
|
Weighted
|
|
|
Under
|
|
|
|
to be Issued Upon
|
|
|
Average
|
|
|
Equity
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
Compensation
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Plans Excluding
|
|
|
|
Options
|
|
|
Options
|
|
|
Securities
|
|
|
|
and Other
|
|
|
and Other
|
|
|
Reflected in
|
|
|
|
Rights
|
|
|
Rights
|
|
|
Column (a)
|
|
Plan Category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity Compensation Plans Approved by Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 Equity Compensation Plan, as amended
|
|
|
885,459
|
|
|
$
|
12.32
|
|
|
|
982,146
|
|
2003 Employee Stock Purchase Plan
|
|
|
None
|
|
|
|
n/a
|
|
|
|
70,999
|
|
Equity Compensation Plans Not Approved by Shareholders
|
|
|
None
|
|
|
|
n/a
|
|
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
|
885,459
|
|
|
$
|
12.32
|
|
|
|
1,053,145
|
|
|
|
Item 13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
Certain
Relationships and Related Transactions
Under the Corporations Code of Ethics and Business
Conduct, the Audit Committee must review and approve
transactions with related persons (directors,
director nominees and executive officers or their immediate
family members, or stockholders owning 5% or greater of the
Corporations outstanding stock) in which the amount
exceeds $120,000 and in which the related person has a direct or
indirect material interest. Under this policy, full written
disclosure must be submitted in writing to the
Corporations General Counsel, who will submit it to the
Audit Committee for review. The transaction must receive Audit
Committee approval prior to the consummation of the transaction.
The Corporation obtains all of its commercial, healthcare and
other insurance coverage through The Selzer Company, an
insurance broker located in Warrington, Pennsylvania. Richard
Dyer, the brother of Daniel P. Dyer, the Chairman of our Board
of Directors and Chief Executive Officer, is the President of
The Selzer Company. We do not have any contractual arrangement
with The Selzer Company or Richard Dyer, nor do we pay either of
them any direct fees. Insurance premiums paid to The Selzer
Company totaled $584,000 in 2008.
Joseph Dyer, the brother of Daniel P. Dyer, the Chairman of our
Board of Directors and Chief Executive Officer, is a vice
president in our treasury group and was paid compensation in
excess of $120,000 for such services in 2008.
25
On March 11, 2008, the Corporation received approval from
the Federal Deposit Insurance Corporation (FDIC) for
federal deposit insurance for its wholly-owned subsidiary,
Marlin Business Bank, an industrial bank chartered by the State
of Utah (the Bank), and approved the Bank to
commence operations effective March 12, 2008. As a result
of the approval, the Corporation became subject to the terms,
conditions and obligations of a Letter Agreement, dated as of
June 18, 2007 (the Letter Agreement), by and
among the Corporation, Peachtree Equity Investment Management,
Inc. (Peachtree) and WCI (Private Equity) LLC
(WCI). On March 26, 2007, the Corporation
announced that it had received correspondence from the FDIC
approving the application for federal deposit insurance for the
Bank, subject to certain conditions set forth in the order
issued by the FDIC, dated as of March 20, 2007 (the
Order). The Order provided that the approval of the
Corporations Bank application was conditioned on Peachtree
and WCI, whose sole manager is Peachtree, executing a passivity
agreement with the FDIC to eliminate Peachtree and WCIs
ability to control the Bank. Therefore, Peachtree, WCI and the
FDIC entered into a Passivity Agreement, dated as of
June 18, 2007 (the Passivity Agreement), which
would be deemed effective on the date of issuance from the FDIC
of the federal deposit insurance for the Bank. In connection
with the execution of the Passivity Agreement, the Corporation
entered into the Letter Agreement, which is also deemed
effective on the date of issuance from the FDIC of the federal
deposit insurance for the Bank. Therefore, the effective date
for both the Passivity Agreement and the Letter Agreement is
March 11, 2008. Under the terms of the Letter Agreement,
the Corporation agreed to create one vacancy on the
Corporations Board of Directors by increasing the size of
the Board from six to seven directors. The Corporation also
agreed to take all necessary action to appoint one individual
proposed by Peachtree and WCI as a member of the Board who will
serve as a director until the expiration of the term at the
Annual Meeting. In addition, the Corporation agreed to include
an individual proposed by Peachtree and WCI on the Boards
slate of nominees for election as a director of the Corporation
and to use its best efforts to cause the election of such
individual so long as Peachtree and WCI are subject to the terms
and conditions of the Passivity Agreement.
Board of
Directors Independence
Currently, our Board of Directors has seven (7) members.
The Board has affirmatively determined that John J. Calamari,
Lawrence J. DeAngelo, Edward Grzedzinski, Kevin J. McGinty,
Matthew J. Sullivan and James W. Wert are each independent
directors. This constitutes more than a majority of our Board of
Directors. Only independent directors serve on our Audit
Committee, Compensation Committee and Nominating and Governance
Committee. The standards applied by the Board in affirmatively
determining whether a director is independent are
those objective standards set forth in the listing standards of
the Nasdaq Stock Market LLC (Nasdaq). The Board is
responsible for ensuring that independent directors do not have
a material relationship with us or any of our affiliates or any
of our executive officers or his or her affiliates.
|
|
Item 14.
|
Principal
Accountant Fees and Services
|
The following sets forth the fees paid to the Corporations
independent registered public accountants for the last two
fiscal years:
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
Audit Fees
|
|
$
|
1,009,707
|
|
|
$
|
911,270
|
|
Audit-Related Fees
|
|
$
|
35,000
|
|
|
$
|
31,335
|
|
Tax Fees
|
|
$
|
7,578
|
|
|
$
|
19,500
|
|
All Other Fees
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,052,285
|
|
|
$
|
962,105
|
|
Audit Fees. Consists of fees related to the
performance of the audit or review of the Corporations
financial statements and internal control over financial
reporting, including services in connection with assisting the
Corporation in its compliance with its obligations under
Section 404 of the Sarbanes-Oxley Act and related
regulations. This category also includes annual agreed upon
procedures relating to servicer reviews and the issuance of term
asset-backed securitizations.
26
Audit-Related Fees. Consists of fees related
to audits of the Corporations 401(k) Plan by
Deloitte & Touche LLP.
Tax Fees. Consists of assistance rendered in
preparation of various state corporate tax returns and proxy
disclosures.
The Audit Committee has the sole authority to consider and
approve in advance any audit, audit-related and tax work to be
performed for the Corporation by its independent registered
public accountants.
PART IV
|
|
Item 15.
|
Exhibits
and Financial Statement Schedules
|
(b) Exhibits.
|
|
|
|
|
Number
|
|
Description
|
|
31
|
.1
|
|
Certification of the Chief Executive Officer of Marlin Business
Services Corp. required by Rule
13a-14(a)
under the Securities Exchange Act of 1934, as amended. (Filed
herewith)
|
|
31
|
.2
|
|
Certification of the Chief Financial Officer of Marlin Business
Services Corp. required by Rule
13a-14(a)
under the Securities Exchange Act of 1934, as amended. (Filed
herewith)
|
|
32
|
.1
|
|
Certification of the Chief Executive Officer and Chief Financial
Officer of Marlin Business Services Corp. required by Rule
13a-14(b) under the Securities Exchange Act of 1934, as amended.
(This exhibit shall not be deemed filed for purposes
of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liability of that section.
Further, this exhibit shall not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended.).
(Furnished herewith)
|
27
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: April 30, 2009
Marlin Business Services
Corp.
Daniel P. Dyer
Chief Executive Officer
28