SCHEDULE 14A | ||||
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 |
WINNEBAGO INDUSTRIES, INC. | ||
(Name of Registrant as Specified in Its Charter) | ||
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant) |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) | Proposed maximum aggregate value of transaction: |
5) | Total fee paid: |
1) | Amount previously paid: |
2) | Form, Schedule or Registration Statement No.: |
3) | Filing party: |
4) | Date filed: |
1. | to elect one Class III director to serve the remainder of the three year term and to elect one Class II director to hold office for a three-year term; |
2. | to provide advisory approval of executive compensation; |
3. | to ratify the appointment of Deloitte & Touche LLP as our independent registered public accountant for the fiscal year ending August 26, 2017; and |
4. | to transact such other business as may properly come before the meeting or any adjournment or adjournments thereof. |
By Order of the Board of Directors | |||
/s/ Scott C. Folkers | |||
Scott C. Folkers | |||
Secretary | |||
Forest City, Iowa | |||
October 19, 2016 |
TABLE OF CONTENTS | |
Page | |
A- 1 |
Name and Address of Beneficial Owner | Shares of Common Stock Owned Beneficially | % of Common Stock(1) | |
Royce & Associates, LLC 745 Fifth Avenue New York, New York 10151 | 3,041,377 | (2) | 11.3% |
BlackRock, Inc. 55 East 52nd Street New York, New York 10055 | 2,724,023 | (3) | 10.1% |
Invesco Ltd. 1555 Peachtree Street NE Suite 1800 Atlanta, GA 30309 | 2,420,556 | (4) | 9.0% |
Cooke & Bieler LP 1700 Market Street Suite 3222 Philadelphia, PA 19103 | 2,075,450 | (5) | 7.7% |
Franklin Resources, Inc. One Franklin Parkway San Mateo, California 94403 | 1,798,750 | (6) | 6.7% |
(1) | Based on 26,901,146 outstanding shares of Common Stock on October 10, 2016. |
(2) | The number of shares listed for Royce & Associates is based on a Schedule 13G/A filed with the SEC on January 28, 2016. |
(3) | The number of shares listed for BlackRock, Inc. is based on a Schedule 13G/A filed with the SEC on September 9, 2016. |
(4) | The number of shares listed for Invesco Ltd is based on a Schedule 13G filed with the SEC on February 12, 2016. |
(5) | The number of shares listed for Cooke & Bieler LP is based on a Schedule 13G/A filed with the SEC on February 10, 2016. |
(6) | The number of shares listed for Franklin Resources, Inc. is based on a Schedule 13G/A filed with the SEC on February 11, 2016. |
Name | Shares of Common Stock Owned Beneficially(1)(2) | Exercisable Stock Options | Winnebago Stock Units(2) | Total Shares of Common Stock Owned Beneficially(1) | % of Common Stock(3) | |||||
Christopher J. Braun (4) | — | — | — | — | (5) | |||||
Robert M. Chiusano | 19,960 | — | 22,412 | 42,372 | (5) | |||||
Jerry N. Currie | 21,000 | — | — | 21,000 | (5) | |||||
S. Scott Degnan | 33,860 | — | — | 33,860 | (5) | |||||
Lawrence A. Erickson | 18,000 | — | 32,613 | 50,613 | (5) | |||||
William C. Fisher | 6,000 | — | 3,427 | 9,427 | (5) | |||||
Scott C. Folkers | 33,717 | — | — | 33,717 | (5) | |||||
Michael J. Happe | 10,000 | — | — | 10,000 | (5) | |||||
Daryl W. Krieger | 40,981 | — | — | 40,981 | (5) | |||||
David W. Miles (4) | — | — | — | — | (5) | |||||
Sarah N. Nielsen | 53,830 | — | — | 53,830 | (5) | |||||
Martha T. Rodamaker | 11,500 | — | 8,449 | 19,949 | (5) | |||||
Mark T. Schroepfer | 29,500 | — | 2,549 | 32,049 | (5) | |||||
Directors and executive officers as a group (17 persons) | 341,215 | — | 69,450 | 410,665 | 1.5 | % |
(1) | Includes shares held jointly with or by spouse and shares held as custodian, beneficial ownership of which is disclaimed. |
(2) | Winnebago Stock Units held under our Directors' Deferred Compensation Plan as of October 10, 2016 (see further discussion of the plan in the Director Compensation section). These units are to be settled 100% in Common Stock upon the earliest of the following events: director's termination of service, death or disability or a "change in control" of the Company, as defined in the plan. |
(3) | Based on 26,901,146 outstanding shares of Common Stock on October 10, 2016, together with 0 shares that directors and executive officers as a group have the right to acquire within 60 days of October 10, 2016 through the exercise of stock options, and shares representing the 69,450 Winnebago Stock Units held by directors under our Directors' Deferred Compensation Plan as of October 10, 2016. |
(4) | Mr. Braun and Mr. Miles joined the Board in December 2015. |
(5) | Less than 1%. |
Committees of the Board | |||
Audit | Human Resources | Nominating and Governance | |
Christopher J. Braun (1) | X | ||
Robert M. Chiusano (Chair) (1)(2) | X | ||
Jerry N. Currie (1) | X | ||
Lawrence A. Erickson (3) | X | X | |
William C. Fisher (1) | Chair | ||
David W. Miles (1) | X | X | |
Martha T. Rodamaker (1) | X | Chair | |
Mark T. Schroepfer (1)(3) | Chair | ||
Number of meetings in Fiscal 2016 | 4 | 4 | 4 |
Conducted a self-assessment of its performance (4) | X | X | X |
(1) | Determined to be "independent" under listing standards of the NYSE and our Director Nomination Policy (defined below). |
(2) | As of September 25, 2015, Mr. Erickson became the interim CEO and was no longer considered independent and, therefore, did not serve on any of these mandatory committees. Upon Mr. Happe becoming President and CEO, Mr. Erickson resumed his role on the Human Resources Committee at the March and June meetings. |
(3) | Designated as an "audit committee financial expert" for purposes of Item 407, Regulation S-K under the Securities Act of 1933, as amended. |
(4) | For no compensation other than Board fees compensation |
(1) | competitively bid or regulated public utility services transactions, |
(2) | transactions involving trustee type services, |
(3) | transactions in which the Related Person's interest arises solely from ownership of our equity securities and all equity security holders received the same benefit on a pro rata basis, |
(4) | an employment relationship or transaction involving an executive officer and any related compensation solely resulting from that employment relationship or transaction if: |
(i) | the compensation arising from the relationship or transaction is or will be reported pursuant to the SEC's executive and director compensation proxy statement disclosure rules; or |
(ii) | the executive officer is not an immediate family member of another executive officer or director and such compensation would have been reported under the SEC's executive and director compensation proxy statement disclosure rules as compensation earned for services if the executive officer was a NEO, as that term is defined in the SEC's executive and director compensation proxy statement disclosure rules, and such compensation has been or will be approved, or recommended to our Board of Directors for approval, by the Human Resources Committee of our Board of Directors, or |
(5) | if the compensation of or transaction with a director is or will be reported pursuant to the SEC's executive and director compensation proxy statement disclosure rules. |
• | Certain transactions with other companies. Any transaction with another company at which a Related Person's only relationship is as an employee (other than |
• | Certain Company charitable contributions. Any charitable contribution, grant or endowment by Winnebago Industries or the Winnebago Industries Foundation to a charitable organization, foundation or university at which a Related Person's only relationship is as an employee (other than an officer), if the aggregate amount involved does not exceed $100,000. |
Director | Fees Earned or Paid in Cash(1) | Stock Awards(2) | All Other Compensation(3) | Total | ||||||||||||
Irvin E. Aal | $ | 16,168 | $ | 119,100 | $ | — | $ | 135,268 | ||||||||
Christopher J. Braun | 35,484 | — | — | 35,484 | ||||||||||||
Robert M. Chiusano | 63,853 | 119,100 | — | 182,953 | ||||||||||||
Jerry N. Currie | 49,000 | 119,100 | — | 168,100 | ||||||||||||
Lawrence A. Erickson | 83,172 | 119,100 | — | 202,272 | ||||||||||||
William C. Fisher | 53,533 | 119,100 | — | 172,633 | ||||||||||||
David W. Miles | 35,484 | — | — | 35,484 | ||||||||||||
Martha T. Rodamaker | 53,533 | 119,100 | — | 172,633 | ||||||||||||
Mark T. Schroepfer | 59,000 | 119,100 | — | 178,100 |
(1) | Our directors may elect to receive fees in cash or may defer their fees into the Directors' Deferred Compensation Plan. |
(2) | These awards are valued at $19.85 per share, the closing price on October 13, 2015, the date of the restricted stock grant. |
(3) | None of the directors received perquisites and other personal benefits in an aggregate amount of $10,000 or more. |
Christopher J. Braun, 56, a self-employed management consultant, has been a director since 2015. Mr. Braun has over 30 years of leadership experience encompassing manufacturing, finance and sales. He founded Teton Buildings in 2008 and held the position of CEO through 2013. His previous experience includes CEO of Teton Homes, Executive Vice President - RV Group at Fleetwood Enterprises and various senior management positions within PACCAR Corporation, manufacturer of Kenworth and Peterbilt trucks. Based upon Mr. Braun's experience in the RV industry and his financial knowledge, the Board concluded that Mr. Braun should continue to serve as a non-employee director of Winnebago Industries at the time this Proxy Statement is filed with the SEC. |
David W. Miles, 59, a financial adviser, entrepreneur and investor, has been a director since 2015. Mr. Miles is chairman and principal owner of Miles Capital, Inc., a registered investment advisory firm with $4.3 billion in client assets under management, co-founder and Managing Principal of the venture capital firm ManchesterStory Group, LLC, and founder and Manager of The Miles Group, LLC, a firm focused on direct and indirect private equity investments. He is also president and director of the Miles Funds, Inc., and a director of Northwest Financial Corporation. He received his J.D. from Harvard Law School, a Master of Public Policy from Harvard’s Kennedy School of Government, and his B.A. from Drake University. Based upon Mr. Miles' financial and leadership experience, the Board concluded that Mr. Miles should continue to serve as a non-employee director of Winnebago Industries at the time this Proxy Statement is filed with the SEC. |
Martha (Marti) Tomson Rodamaker, age 54, has served as a director since 2012. Ms. Rodamaker has been the president, CEO, and a board member of First Citizens National Bank in Mason City, Iowa since 1997, and has been with First Citizens since 1992. Prior to that she worked five years as a commercial banker and internal auditor at Norwest Bank in Minneapolis. Her education includes a Bachelor of Arts degree in economics from the University of Northern Iowa and a MBA in finance from the University of St. Thomas in St. Paul, Minnesota. She has an extensive history of working with companies in northern Iowa and through her education and years of experience offers a broad base of knowledge about all facets of business. Based upon Ms. Rodamaker's financial experience and leadership experience, the Board concluded that Ms. Rodamaker should continue to serve as a non-employee director of Winnebago Industries at the time this Proxy Statement is filed with the SEC. |
Robert M. Chiusano, 65, has been a director since 2008. Mr. Chiusano is currently a principal in RMC Consulting, a company focused on leadership development and operational excellence. Additionally, Mr. Chiusano is a former Executive Vice President and Special Assistant to the CEO and a former Executive Vice President and Chief Operating Officer - Commercial Systems of Rockwell Collins, Inc. Based primarily upon Mr. Chiusano's extensive knowledge of strategic and organizational planning and acquisition management, his leadership experience as a former Executive Vice President at a communications and aviation electronics manufacturer, his tenure and contributions as a current Board and Board committee member, as well as his contributions as a community director to the University of Iowa Engineering Advisory Board and Coe College Board of Trustees, the Board concluded that Mr. Chiusano should be nominated to serve as a director of Winnebago Industries at the time this Proxy Statement is filed with the SEC. |
Michael J. Happe, 45, joined Winnebago on January 18, 2016, as the President, CEO and a director. He previously worked at the Toro Company (NYSE: TTC) headquartered in Bloomington, Minnesota, where he most recently served as an Executive Officer and Group Vice President of Toro’s Residential and Contractor businesses. A 19-year veteran of Toro, he held a series of senior leadership positions throughout his career across a variety of the company’s domestic and international divisions. Mr. Happe received his Master's degree in Business Administration from the University of Minnesota and a Bachelor of Science degree from the University of Kansas. Based upon Mr. Happe's business acumen, extensive experience at Toro and his exemplary service to the Company since joining in January 2016, the Board concluded that Mr. Happe should be nominated to serve as a Class III director for the remainder of the term at the time this Proxy Statement is filed with the SEC. |
William C. Fisher, 62, a retired business executive, has been a director since March 2015. Mr. Fisher was the Vice President and Chief Information Officer of Polaris Industries, Inc. from November 2007 until his retirement on December 31, 2014. During his tenure at Polaris he also served as the General Manager of Service overseeing all technical, dealer, and consumer service operations. Prior to joining Polaris, Mr. Fisher was employed by MTS Systems for 15 years in various positions in information services, software engineering, control product development, and general management. Before that time, Mr. Fisher worked as a civil engineer for Anderson-Nichols and he later joined Autocon Industries, where he developed process control software. Based upon Mr. Fisher's experience with information systems and his familiarity with highly discretionary consumer products, the Board concluded that Mr. Fisher should continue to serve as a director at the time this Proxy Statement is filed with the SEC. |
Mark T. Schroepfer, 69, a retired business executive, has been a director since 2011. Mr. Schroepfer is retired, but serves as an adjunct professor at the University of St. Thomas in St. Paul, MN. He previously served as President, CEO, and Chairman of Lincoln Industrial Corp, a world leading designer and supplier of highly engineered lubrication systems from 1996 to 2005. From 1987 to 1995, Mr. Schroepfer served as Pentair Inc.'s Vice President of Finance and MIS, Corporate Controller, and President of Penwald Insurance Company. Based upon Mr. Schroepfer's significant skills and experience in mergers and acquisitions, strategic planning, manufacturing and financial operations and his leadership experience, the Board concluded that Mr. Schroepfer should continue to serve as a director of Winnebago Industries at the time this Proxy Statement is filed with the SEC. Due to Mr. Schroepfer's relevant experience in finance, accounting and auditing, the Board determined that he is an audit committee financial expert. |
• | Fiscal 2016 annual incentive awards were earned and 1/3 of those awards were required to be paid in stock awards with a one-year holding period which were granted subsequent to Fiscal 2016 per the terms of this plan. |
• | Fiscal 2014-2016 Long-Term Incentive Plan incentive awards were earned, thus stock awards subject to a one year holding period were granted subsequent to Fiscal 2016 per the terms of this plan. |
• | Time-based restricted stock awards were also granted to executive officers during Fiscal 2016 as described below (see "Long-Term Incentives" below) vesting over a three year period. |
• | Michael J. Happe, CEO and President |
• | Robert J. Olson, Interim CEO |
• | Lawrence A. Erickson, Interim CEO |
• | Sarah N. Nielsen, Vice President, CFO |
• | S. Scott Degnan, Vice President, Sales and Product Management |
• | Scott C. Folkers, Vice President, General Counsel and Secretary |
• | Daryl W. Krieger, Vice President, Manufacturing |
• | align the interests of Management with those of shareholders; |
• | provide fair and competitive compensation; |
• | integrate compensation with our business plans; |
• | reward both business and individual performance; and |
• | attract and retain key executives critical to our success. |
Accuride Corp. | Johnson Outdoors |
Alamo Group Inc. | Polaris Industries |
American Railcar Industries, Inc. | Shiloh Industries, Inc. |
Arctic Cat Inc. | Spartan Motors, Inc. |
Columbus McKinnon Corp. | Standard Motor Products Inc. |
Drew Industries, Inc. | Standex International Corp. |
Federal Signal Corp. | Stoneridge Inc. |
Flexsteel Industries, Inc. | Tecumseh Products Company |
Freightcar America, Inc. | Tennant Company |
Gentherm, Inc. | Thor Industries Inc. |
Graco, Inc. | Wabash National Corp. |
• | the company's focus on manufacturing; |
• | revenue and market capitalization size in comparison with ours; and |
• | participation in automotive, transportation, recreational or lifestyle industries. |
• | an evaluation of total compensation made to chief executive officers by certain issuers in the Company's Proxy Industry Group; |
• | an evaluation of the CEO's performance for the fiscal year and previous three fiscal years conducted by the Committee; |
• | an evaluation of the proposed total compensation of the CEO in comparison to other NEOs; |
• | a comparison of the differential of total compensation made to chief executive officers in certain issuers in the Company's Proxy Industry Group; and |
• | economic conditions, Company financial performance, shareholder return, financial condition and Company strategic goals. |
• | the executive's scope of responsibilities; |
• | a market competitive assessment of similar roles at certain issuers in the Proxy Industry Group; |
• | internal comparisons to the compensation of other NEOs, including the CEO; |
• | evaluations of performance for the fiscal year, as submitted by the CEO, and supported by performance evaluation documents, which may include feedback from the executive's peers, direct reports and other employees within the executive's division; |
• | the CEO's recommendations for each other NEO's base pay, incentive compensation and stock-based compensation amounts; and |
• | economic conditions, Company financial performance, financial condition, shareholder return and Company strategic goals. |
• | Fiscal 2016 annual and long-term incentive plans were approved at the June 2015 Committee meeting; |
• | the NEOs' base salaries for Fiscal 2016 were reviewed beginning at the October 2015 Committee meeting and throughout Fiscal 2016. |
• | the financial metrics for potential Fiscal 2016 annual and long-term incentive awards were established at the October 2015 Committee meeting; |
• | the final determinations of annual and long-term achievement for awards payable for Fiscal 2016 and Fiscal 2014-2016, respectively, were made at the October 2016 Committee meeting. |
• | significant elements of the compensation rewards under our annual and long-term incentive compensation plans include stock-based compensation with required retention periods; |
• | the financial metrics utilized under each of these plans are widely utilized measurements of shareholder value not subject to management discretion; |
• | excessive compensation payment opportunities are avoided by the establishment of maximum levels of incentive payment opportunities; and |
• | no changes to annual or long-term incentive program financial metrics have been made after the Committee initially establishes such metrics. |
• | base salary; |
• | annual incentive awards; and |
• | long-term incentives. |
Name | Fixed Compensation | Fixed Compensation | Performance-Based Compensation | ||
Michael J. Happe (1) | $ | 550,000 | 62% | 38% | |
Sarah N. Nielsen | 335,000 | 55% | 45% | ||
S. Scott Degnan | 305,000 | 54% | 46% | ||
Scott C. Folkers | 278,999 | 55% | 45% | ||
Daryl W. Krieger | 256,001 | 54% | 46% |
(1) | Mr. Happe's fixed compensation is shown on an annual basis. He began employment in January 2016. |
• | experience of the executive; |
• | time in position; |
• | individual performance; |
• | level of responsibility for the executive; |
• | economic conditions, Company financial performance, financial condition and Company strategic goals; and |
• | data from Willis Towers Watson 2015 Compensation Analysis. |
• | net income is a definitive "bottom line" indicator of the Company's performance; |
• | net income is a key performance metric clearly understood by our employees and our shareholders; |
• | net income is a solid historic measurement of the Company's performance; and |
• | net income is a good indicator of the rate at which the Company has grown profits. |
• | ROIC is a critical indicator of how effectively a company uses its capital invested in its operations; and |
• | ROIC is an important measurement for judging how much value the Company is creating. |
Financial Performance Metrics | Threshold | Target | Maximum | ||||||
Net Income (1) | $ | 36,429,040 | $ | 45,536,300 | $ | 54,643,560 | |||
ROIC (2) | 17.2 | % | 21.5 | % | 25.8 | % |
(1) | The net income target for Fiscal 2016 was established at $45.5 million, based upon the 2016 Fiscal Management Plan, approximately 10% over Fiscal 2015 net income of $41.2 million. The maximum net income goal was set at $54.6 million, which represents 120% of the target net income and approximately 32.6% over Fiscal 2015 net income. The threshold net income was set at $36.4 million, which represents 80% of the target net income. |
(2) | The ROIC target for Fiscal 2016 was established at 21.5% based on the 2016 Fiscal Management Plan. The maximum ROIC goal was set at 25.8%, which represents 120% of the ROIC target. The threshold ROIC was set at 17.2%, which represents 80% of the ROIC target. |
Bonus Oppor- tunity (2) | Net Income Financial Factors(3) | ROIC Financial Factors(3) | Total Financial Factors | |||||||
Officer (1) | Threshold | Target | Maximum | Threshold | Target | Maximum | Threshold | Target | Maximum | |
CEO and President | 100% | 12.25% | 75% | 150% | 4% | 25% | 50% | 16.25% | 100% | 200% |
Other NEOs | 60% | 12.25% | 75% | 150% | 4% | 25% | 50% | 16.25% | 100% | 200% |
(1) | A participant must be an employee at the end of the fiscal year to be eligible for the incentive except in connection with a Change in Control or as waived by the Committee for retirement, disability, or death. |
(2) | The bonus opportunity is calculated by multiplying the above percentages against the total base salary of the NEO earned in the fiscal year. As illustrated above, if the target net income and ROIC financial performance metrics are achieved, the total financial factor of 100% would be used and the entire bonus opportunity would be earned (e.g. 100% of base salary of the CEO and President). Any incentives earned under the Officers Incentive Compensation Plan are to be paid out in a mix of 2/3 cash and 1/3 restricted stock. The annual restricted stock grant portion is awarded as soon as practical after the final fiscal year-end compensation accounting is completed and upon approval by the Committee, subject to a one-year holding period. |
(3) | In calculating the financial performance metrics for incentive eligibility under the Officers Incentive Compensation Plan, the financial performance metrics in Fiscal 2016 were weighted 75% to net income and 25% to ROIC at the maximum incentive potential. The Committee has placed more weight on net income growth due to its belief that net income is an important measurement as to overall Company profitability and return for shareholders. |
• | Revenue Growth |
• | Market Share |
• | Product Quality |
• | Product Introductions |
• | Planning |
• | Customer Satisfaction |
• | Inventory Management |
• | Technical Innovation |
• | Ethical Businesses Practices |
• | Business Diversity Initiatives |
• | improvement in product quality measured by warranty claims |
• | inventory management targets measured by actual inventory balances and |
• | customer satisfaction targets measured by customer survey. |
Name | Bonus Opportunity | Net Income Incentive (1) | ROIC Incentive (2) | Strategic Modifier Incentive (3) | Total Incentive | Amount Paid in Cash (4) | Value Paid in Restricted Stock (4)(5) | ||||||||||||
Michael J. Happe (6) | $ | 338,461 | $ | 253,845 | $ | 71,077 | $ | 12,997 | $ | 337,920 | 225,280 | 112,640 | |||||||
Sarah N. Nielsen | 201,000 | 150,749 | 42,210 | 7,718 | 200,678 | 133,786 | 66,892 | ||||||||||||
S. Scott Degnan | 185,768 | 139,325 | 39,011 | 7,133 | 185,471 | 123,647 | 61,824 | ||||||||||||
Scott C. Folkers | 167,399 | 125,548 | 35,154 | 6,428 | 167,131 | 111,421 | 55,710 | ||||||||||||
Daryl W. Krieger | 153,601 | 115,200 | 32,256 | 5,898 | 153,355 | 102,237 | 51,118 |
(1) | A financial factor of 75.0% of the bonus opportunity was approved under the Officers Incentive Compensation Plan based on Fiscal 2016 net income performance of $45.5 million. |
(2) | ROIC incentive was 21.0% of the bonus opportunity for Fiscal 2016 as actual ROIC was 20.7%. |
(3) | Company strategic modifier award established at a positive 4.0% of Fiscal 2016 net income and ROIC incentive. |
(4) | The total award under the Plan was certified by the Committee on October 11, 2016, the 2/3 cash component was paid on October 14, 2016, and the 1/3 restricted stock component was determined based upon the closing price of the stock on October 11, 2016, all as presented above. |
(5) | For Fiscal 2017 the Annual Incentive Plan will be paid entirely in cash. It is currently paid 2/3 cash and 1/3 restricted stock. |
(6) | Mr. Happe became an officer for the Company in January 2016; the compensation shown is based on his length of employment. |
Long-Term Incentive Plans | Date Approved | Bonus Percentage | ROE (3 year cumulative) | Actual ROE | ||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||
Fiscal 2014-2016 (the "2014-2016 Plan") | 6/18/13 | 10% | 100% | 150% | 16.0% | 20.0% | 26.0% | 20.6% |
Fiscal 2015-2017 (the "2015-2017 Plan") | 6/17/14 | 10% | 100% | 150% | 16.3% | 20.4% | 26.0% | (1) |
Fiscal 2016-2018 (the "2016-2018 Plan") | 6/16/15 | 10% | 100% | 150% | 12.7% | 15.9% | 19.1% | (2) |
(1) | Estimated future payouts of plan-based awards under the 2014-2016 Plan were reported in the Company's 2014 proxy statement in the columns designated "Threshold," "Target" and "Maximum" in the Grants of Plan-Based Awards Table in the "Compensation Tables and Narrative Disclosure". |
(2) | Estimated future payouts of plan-based awards under the 2016-2018 Plan are reported in the columns designated "Threshold," "Target" and "Maximum" in the Grants of Plan-Based Awards Table in the "Compensation Tables and Narrative Disclosure" below. At its October 2015 meeting, the Committee approved the threshold, target and maximum ROE percentages under the 2016-2018 Plan which is illustrated above. The ROE target was based upon the 2016 Fiscal Management Plan along with projected performance in Fiscal 2017 and 2018. The threshold ROE was set at 12.7%, which represents 80% of the ROE target. The maximum ROE goal was set at 19.1% representing 120% of target. |
Name | Target Opportunity (1)(2) | Value of 2014-2016 Plan Award (3) | ||||
Sarah N. Nielsen | $ | 69,750 | $ | 73,238 | ||
S. Scott Degnan | 71,750 | 75,338 | ||||
Scott C. Folkers | 61,500 | 64,575 | ||||
Daryl W. Krieger | 60,000 | 63,000 |
(1) | The Long-Term Incentive Plan target for 2014-2016 provides for a bonus (Target) of 25% of the annualized base salary to be awarded in restricted stock if the Target ROE is achieved. The annualized salary figure utilized for measurement is the salary in place for each participant as of September 2013. |
(2) | Effective with the 2017-2019 Long Term Incentive Plan, the target opportunity will be 50% of the base salary (100% of base for CEO) converted to performance shares at beginning of performance period. |
(3) | Shares of common stock subject to a one-year holding period was awarded on October 11, 2016 based on the value as presented above and a closing price of $27.89 per share. |
Name | Shares granted in Fiscal 2016 | Value (1) | |||
Michael J. Happe | 10,000 | $ | 166,700 | ||
Sarah N. Nielsen | 15,000 | 297,750 | |||
S. Scott Degnan | 15,000 | 297,750 | |||
Scott C. Folkers | 15,000 | 297,750 | |||
Daryl W. Krieger | 15,000 | 297,750 |
(1) | Based on the closing price of the Company's common stock on October 13, 2015 of $19.85 and January 19, 2016 of $16.67. |
Name | Ownership Guidelines- Percentage of Annual Salary(1) | Value of Ownership Guidelines (1) | Actual Shares Beneficially Owned (2) | Value of Shares Beneficially Owned (2) | Percentage of Annual Salary Attained(2) | ||||||||||||
Michael J. Happe | 400 | % | $ | 2,200,000 | 10,000 | $ | 278,900 | 51 | % | (3) | |||||||
Sarah N. Nielsen | 250 | % | 837,500 | 53,830 | 1,501,319 | 448 | % | ||||||||||
S. Scott Degnan | 250 | % | 774,035 | 33,860 | 944,355 | 305 | % | ||||||||||
Scott C. Folkers | 250 | % | 697,498 | 33,717 | 940,367 | 337 | % | ||||||||||
Daryl W. Krieger | 250 | % | 640,003 | 40,981 | 1,142,960 | 446 | % |
(1) | Based upon the annual base salary in effect for each of the NEOs as of August 27, 2016. |
(2) | Based upon the closing market price of $27.89 per share, the Company's Common Stock as quoted on the NYSE on October 10, 2016. |
(3) | Mr. Happe became an officer for the Company in January 2016. The guidelines provide for a five year period in which to attain the guideline level of stock ownership. |
• | date certain (which must be selected by the participant in his or her participation agreement and which cannot be changed except as otherwise provided in the Executive Deferred Compensation Plan); |
• | separation from service; |
• | disability; |
• | death; or |
• | change in control. |
• | a lump-sum payment; or |
• | a monthly payment of a fixed amount which shall amortize the participant's Deferred Benefit in equal monthly payments of principal and interest over a period from 2 to 120 months (as selected by the participant on his or her participation agreement); in the event of death, disability or change in control, we are required to pay to the participant (or the participant's beneficiary) the total value of his or her Deferred Benefit in a lump-sum payment. |
• | has reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement and the 2016 Form 10-K with Management; and |
• | based on such review and discussions, the Human Resources Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and the 2016 Form 10-K. |
Name | Year | Salary | Stock Awards (1) | Incentive Plan Compensation(2) | All Other Compensation | Total | ||||||||||
Michael Happe | 2016 | $ | 338,461 | $ | 279,340 | $ | 225,280 | $ | 332,218 | $ | 1,175,299 | |||||
President, CEO | ||||||||||||||||
Robert J. Olson | 2016 | 35,982 | — | — | — | 35,982 | ||||||||||
Interim CEO | 2015 | 32,194 | — | — | — | 32,194 | ||||||||||
Lawrence A. Erickson(3) | 2016 | — | — | — | — | — | ||||||||||
Interim CEO | ||||||||||||||||
Sarah N. Nielsen | 2016 | 335,000 | 434,178 | 133,786 | 14,783 | 917,747 | ||||||||||
Vice President, CFO | 2015 | 287,370 | 231,677 | 59,074 | 8,660 | 586,781 | ||||||||||
2014 | 279,000 | 226,410 | 197,065 | 4,489 | 706,964 | |||||||||||
S. Scott Degnan | 2016 | 309,614 | 431,422 | 123,647 | 16,288 | 880,971 | ||||||||||
Vice President/General Manager, | 2015 | 295,611 | 237,010 | 60,769 | 5,375 | 598,765 | ||||||||||
Towables | 2014 | 287,000 | 166,520 | 202,716 | 4,486 | 660,722 | ||||||||||
Scott C. Folkers | 2016 | 278,999 | 414,782 | 111,421 | 16,043 | 821,245 | ||||||||||
Vice President, General Counsel | 2015 | 253,380 | 219,378 | 52,087 | 8,983 | 533,828 | ||||||||||
and Secretary | ||||||||||||||||
Daryl W. Krieger | 2016 | 256,001 | 408,704 | 102,237 | 14,718 | 781,660 | ||||||||||
Vice President, Manufacturing | 2015 | 247,200 | 213,680 | 50,817 | 7,909 | 519,606 |
(1) | The table below illustrates the three categories of stock awards as presented previously: |
Performance-Based Plans | ||||||||||||||
Name | Fiscal Year | Non-Performance- Based Restricted Stock Grant(a) | Annual Incentive Plans(b) | Long-Term Incentive Plans(c) | Total | |||||||||
Michael J. Happe | 2016 | $ | 166,700 | $ | 112,640 | $ | — | $ | 279,340 | |||||
Sarah N. Nielsen | 2016 | 297,750 | 66,678 | 69,750 | 434,178 | |||||||||
2015 | 109,650 | 57,474 | 64,553 | 231,677 | ||||||||||
2014 | 109,120 | 55,800 | 61,490 | 226,410 | ||||||||||
S. Scott Degnan | 2016 | 297,750 | 61,922 | 71,750 | 431,422 | |||||||||
2015 | 109,650 | 59,122 | 68,238 | 237,010 | ||||||||||
2014 | 109,120 | 57,400 | — | 166,520 | ||||||||||
Scott C. Folkers | 2016 | 297,750 | 55,532 | 61,500 | 414,782 | |||||||||
2015 | 109,650 | 50,676 | 59,052 | 219,378 | ||||||||||
Daryl W. Krieger | 2016 | 297,750 | 50,954 | 60,000 | 408,704 | |||||||||
2015 | 109,650 | 49,440 | 54,590 | 213,680 |
(a) | These amounts represent non-performance based restricted stock granted pursuant to the 2004 and 2014 Plans computed in accordance with ASC 718. The grant date fair value of each of the non-performance based awards was determined at the closing price of the Company's shares on the NYSE on the grant date without regard to estimated forfeitures related to service-based vesting conditions. |
(b) | The amounts reported in this column do not reflect actual compensation realized by the NEOs and are not a guarantee of the amount that the NEO will actually receive. These amounts represent the fair value of each of the annual performance-based awards required to be paid in stock subject to a one-year holding period under the respective annual Officers Incentive Compensation Plan, as described under "Compensation Discussion and Analysis" above. The fair value was determined based on Management's estimate of the achievement levels of the performance measures related to the applicable awards for the applicable annual plan. For information regarding the terms of the awards, the criteria for determining the amounts payable and the accrual amount payable in Fiscal 2016, see "Compensation Discussion and Analysis-Annual Incentive Plan." The grant date fair value of the performance stock awards granted to NEOs for Fiscal 2016 assuming that the Company's performance will be at the levels that would result in a maximum payout under those awards is as follows: Mr. Happe - $225,641; Ms. Nielsen - $134,000; Mr. Degnan - $123,846; Mr. Folkers - $111,600; Mr. Krieger - $102,400. |
(c) | The amounts reported in this column do not reflect actual compensation realized by the NEOs and are not a guarantee of the amount that the NEO will actually receive. These amounts represent the fair value of each of the performance-based long-term awards required to be paid in stock under the respective Officers Long-Term Incentive Plan, as described under "Compensation Discussion and Analysis" above. The fair value was determined based on Management's estimate of the achievement level of the performance conditions measured as of the grant date. For information regarding the terms of the awards, the criteria for determining the amounts payable and the accrual amount payable in Fiscal 2016, see "Compensation Discussion and Analysis-Long-Term Incentives." The grant date fair value of the performance stock awards granted to NEOs for Fiscal 2016 assuming that the Company's performance will be at the levels that would result in a maximum payout under those awards is as follows: Mr. Happe - $0; Ms. Nielsen - $73,238; Mr. Folkers -$64,575 Mr. Krieger - $63,000. |
(2) | These amounts represent actual annual incentive plan award payouts made in cash to NEOs under the 2014, 2015 and 2016 Officers Incentive Compensation Plans. See “Compensation Discussion and Analysis” for further discussion on how amounts were determined for Fiscal 2016. |
(3) | Mr. Erickson was the Interim CEO from September 25, 2015 to January 17, 2016 and received no compensation for such service. |
Plan Name(1)(2) | Grant Date (3) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payments Under Equity Incentive Plan Awards | All Other Stock Awards (#) | All Other Option Awards Under-lying Securities (#) | Grant Date Fair Value of Stock and Option Awards | ||||||||||||||||
Name | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||
Michael J. Happe | 2014 Plan | 1/18/16 | 10,000 | $ | 16.67 | |||||||||||||||||
2014 Plan | 1/18/16 | 10,000 | 5.31 | |||||||||||||||||||
2016 OICP | 6/16/15 | 36,608 | 225,280 | 451,282 | 18,304 | 112,640 | 225,641 | |||||||||||||||
Sarah N. Nielsen | 2014 Plan | 10/13/15 | — | — | — | — | — | — | 15,000 | 19.85 | ||||||||||||
2016 OICP | 6/16/15 | 21,775 | 134,000 | 268,000 | 10,888 | 66,678 | 134,000 | — | — | |||||||||||||
2018 LTIP | 6/16/15 | — | — | — | 8,375 | 83,750 | 125,625 | — | — | |||||||||||||
S. Scott Degnan | 2014 Plan | 10/13/15 | — | — | — | — | — | — | 15,000 | 19.85 | ||||||||||||
2016 OICP | 6/16/15 | 20,125 | 123,846 | 247,691 | 10,063 | 61,922 | 123,846 | — | — | |||||||||||||
2018 LTIP | 6/16/15 | — | — | — | 7,740 | 77,404 | 116,105 | — | — | |||||||||||||
Scott C. Folkers | 2014 Plan | 10/13/15 | — | — | — | — | — | — | 15,000 | 19.85 | ||||||||||||
2016 OICP | 6/16/15 | 18,135 | 111,600 | 223,200 | 9,068 | 55,532 | 111,600 | — | — | |||||||||||||
2018 LTIP | 6/16/15 | — | — | — | 6,975 | 69,750 | 104,625 | — | — | |||||||||||||
Daryl W. Krieger | 2014 Plan | 10/13/15 | — | — | — | — | — | — | 15,000 | 19.85 | ||||||||||||
2016 OICP | 6/16/15 | 16,640 | 102,400 | 204,800 | 8,320 | 50,954 | 102,400 | — | — | |||||||||||||
2018 LTIP | 6/16/15 | — | — | — | 6,400 | 64,000 | 96,000 | — | — |
(1) | 2016 OICP targets annual performance against goals established by the Committee. Awards under the 2016 OICP are payable in 2/3 cash and 1/3 restricted stock. The applicable Threshold, Target and Maximum amounts presented above represent such cash and dollar value, respectively, of stock subject to a one-year holding period for the 2016 OICP. Under the 2016 OICP, the financial factors used in determining amounts payable may be modified by the Committee by plus or minus 20% based upon achievement of pre-determined strategic priorities. In October 2016 the Committee approved a 4.0% upward adjustment based on the achievement of certain objectives described under "Compensation Discussion and Analysis-Annual Incentive Plan" above. |
(2) | 2018 LTIP refers to our Officers Long-Term Incentive Plan Fiscal Three-Year Period 2016-2018. For each of the NEOs, the Threshold, Target and Maximum amounts under the 2018 LTIP represent potential restricted stock payments that are measured over a three-year performance period from August 30, 2015 through August 25, 2018. See “Compensation Discussion and Analysis-Long-Term Incentive Plans Fiscal 2014-2016” for information regarding the terms of the stock awards subject to a one-year holding period, the description of the performance-based vesting conditions and the criteria for determining the amounts payable. |
(3) | The Human Resource Committee approved the 2016 OICP and 2018 LTIP plans on June 16, 2015, effective as of August 30, 2015. |
Option Awards(1) | Stock Awards(2) | ||||||||||||
Name | Number of Securities Underlying Unexercised Exercisable Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(3) (#) | Market Value of Shares or Units of Stock That Have Not Vested(4) ($) | ||||||||
Michael J. Happe | 10,000 | $16.67 | 1/18/26 | 10,000 | $ | 239,100 | |||||||
Sarah N. Nielsen | — | — | — | 19,668 | 470,262 | ||||||||
S. Scott Degnan | — | — | — | 19,668 | 470,262 | ||||||||
Scott C. Folkers | — | — | — | 19,668 | 470,262 | ||||||||
Daryl W. Krieger | — | — | — | 19,668 | 470,262 |
(1) | Represents Company stock options awarded under the 2014 Plan. Exercise price is the closing stock price on the date of grant. |
(2) | Unvested restricted stock awarded to NEOs in Fiscal 2014, Fiscal 2015 and Fiscal 2016 pursuant to the 2014 and 2004 Plans. |
(3) | Shares of restricted stock generally vest in one-third increments beginning one year from the date of grant. A discussion of the vesting of awards provided for under various termination situations is set forth in the section “Potential Payments upon Termination or Change of Control” below. |
(4) | Amount is calculated by multiplying the number of restricted shares that have not vested by the closing price of the Company's Common Stock ($23.91) as quoted on the NYSE on August 26, 2016, the last trading day of Fiscal 2016. |
Option Awards | Stock Awards | ||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | |||||
Sarah N. Nielsen | — | — | 11,600 | 229,730 | |||||
S. Scott Degnan | — | — | 11,877 | 235,229 | |||||
Daryl W. Krieger | — | — | 10,756 | 212,977 | |||||
Scott C. Folkers | — | — | 11,074 | 219,289 |
(1) | Valued at the closing market price of the Company's Common Stock of $19.91, $19.85, $19.28, and $20.03 as quoted on the NYSE on the vesting dates of October 10, 2015, October 13, 2015, October 15, 2015, and October 16, 2015, respectively. |
FY 2016 Activity | ||||||||||||||||
Name | Plan Name | Aggregate Balance at Aug 29, 2015 | Executive Contributions | Aggregate Earnings | Aggregate Withdrawals/Distributions | Aggregate Balance at Aug 27, 2016(1) | ||||||||||
Sarah N. Nielsen | Executive Deferred Compensation Plan | $ | 27,581 | $ | 16,915 | $ | 2,671 | $ | — | $ | 47,167 | |||||
Daryl W. Krieger | Executive Deferred Compensation Plan | 43,468 | 35,609 | 4,225 | — | 83,302 |
(1) | Represents the market price of the financial instruments as of August 27, 2016. |
• | if the NEO's termination of employment is due to his or her retirement and occurs after at least five consecutive years of employment with the Company, any unvested awards of restricted stock immediately vest if the participant is at least 60 years of age; |
• | if the NEO's termination of employment is due to his or her disability (as defined in the applicable Plan) and occurs after at least five consecutive years of employment with the Company, any unvested awards of restricted stock immediately vest; and |
• | if the NEO's termination of employment is due to his or her death and occurs after at least five consecutive years of employment with the Company or any subsidiary, any unvested awards of restricted stock shall immediately vest. |
• | if the NEO's termination of employment is due to his or her retirement, and occurs after at least five consecutive years of employment with the Company, the stock options become vested in full and immediately exercisable for a period of three months following such termination of employment for incentive stock options and for a period of ten years after any stock option grant date for non-qualified stock options; |
• | if the NEO's termination of employment is due to his or her disability and occurs after at least five consecutive years of employment with the Company, the stock options become vested in full and immediately exercisable for a period of one year following such termination of employment for incentive stock options and for a period of ten years after any stock option grant date for non-qualified stock options; and |
• | if the NEO's termination of employment is due to his or her death and occurs after at least five consecutive years of employment with the Company, the options shall become vested in full and immediately exercisable by the NEO's estate or legal representative for a period of one year following such termination of employment and shall thereafter, terminate, for both incentive and non-qualified stock options. |
Change of Control | ||||||||||||||||||
Executive Payments and Benefits Upon | Retirement(1) or Voluntary Separation | Involuntary Termination For Cause | Without Termination | Termination Without Cause / Good Reason | Death | Disability | ||||||||||||
Compensation: | ||||||||||||||||||
Severance Benefit (Change of Control)(2) | $ | — | $ | — | $ | — | $ | 3,025,797 | $ | — | $ | — | ||||||
Annual Incentives: | ||||||||||||||||||
Annual Incentive Plan(3) | 337,920 | 337,920 | 337,920 | (Included Above) | 337,920 | 337,920 | ||||||||||||
Long-Term Incentives: | ||||||||||||||||||
LTIP(4) | — | — | 542,929 | 542,929 | — | — | ||||||||||||
Restricted Stock:(5) | ||||||||||||||||||
Accelerated Vesting | — | 239,100 | 239,100 | 239,100 | 239,100 | 239,100 | ||||||||||||
Stock Options:(6) | ||||||||||||||||||
Accelerated Vesting | — | 72,400 | 72,400 | 72,400 | 72,400 | 72,400 | ||||||||||||
Total Benefits | $ | 337,920 | $ | 649,420 | $ | 1,192,349 | $ | 3,880,226 | $ | 649,420 | $ | 649,420 |
(1) | Retirement under the 2014 Plan is defined as attaining age 60 and five or more years of service with the Company. |
(2) | Severance upon a Change of Control equals an amount equal to three times the average of the aggregate annual compensation paid during our three fiscal years immediately preceding the Change of Control and excludes any payments required to cover IRC Section 280G obligations if applicable. |
(3) | Represents the annual incentive eligibility pursuant to the 2016 Officers Incentive Compensation Plan. |
(4) | Represents the LTIP incentive achieved pursuant to the 2014-2016 Officers Long-Term Incentive Plan, except by a termination pursuant to a Change of Control, which includes the full amount payable under the 2014-2016 Officers Long-Term Incentive Plan and the entire amount estimated to be payable under the 2015-2017 and the 2016-2018 Officers Long-Term Incentive Plans. |
(5) | Represents the intrinsic value of stock grants based on our closing stock price of $23.91 per share on August 26, 2016, the last trading day of Fiscal 2016. |
(6) | Represents the intrinsic value of stock options based on our closing stock price of $23.91 per share on August 26, 2016, the last trading day of Fiscal 2016. |
Change of Control | ||||||||||||||||||
Executive Payments and Benefits Upon | Retirement(1) or Voluntary Separation | Involuntary Termination For Cause | Without Termination | Termination Without Cause / Good Reason | Death | Disability | ||||||||||||
Compensation: | ||||||||||||||||||
Severance Benefit (Change of Control)(2) | $ | — | $ | — | $ | — | $ | 1,845,047 | $ | — | $ | — | ||||||
Annual Incentives: | ||||||||||||||||||
Annual Incentive Plan(3) | 200,678 | 200,678 | 200,678 | (Included Above) | 200,678 | 200,678 | ||||||||||||
Long-Term Incentives: | ||||||||||||||||||
LTIP(4) | 73,238 | 73,238 | 278,097 | 278,097 | 73,238 | 73,238 | ||||||||||||
Restricted Stock:(5) | ||||||||||||||||||
Accelerated Vesting | — | 470,262 | 470,262 | 470,262 | 470,262 | 470,262 | ||||||||||||
Deferred Compensation Plans: | ||||||||||||||||||
Executive Deferred Compensation Plan(6) | 47,167 | 47,167 | 47,167 | 47,167 | 47,167 | 47,167 | ||||||||||||
Total Benefits | $ | 321,083 | $ | 791,345 | $ | 996,204 | $ | 2,640,573 | $ | 791,345 | $ | 791,345 |
(1) | Retirement under the 2004 and 2014 Plans is defined as attaining age 60 and five or more years of service with the Company. |
(2) | Severance upon a Change of Control equals an amount equal to three times the average of the aggregate annual compensation paid during our three fiscal years immediately preceding the Change of Control and excludes any payments required to cover IRC Section 280G obligations if applicable. |
(3) | Represents the annual incentive eligibility pursuant to the 2016 Officers Incentive Compensation Plan. |
(4) | Represents the LTIP incentive achieved pursuant to the 2014-2016 Officers Long-Term Incentive Plan, except by a termination pursuant to a Change of Control, which includes the full amount payable under the 2014-2016 Officers Long-Term Incentive Plan and the entire amount estimated to be payable under the 2015-2017 and the 2016-2018 Officers Long-Term Incentive Plans. |
(5) | Represents the intrinsic value of stock grants based on our closing stock price of $23.91 per share on August 26, 2016, the last trading day of Fiscal 2016. |
(6) | Represents market value balance as of August 27, 2016. |
Change of Control | ||||||||||||||||||
Executive Payments and Benefits Upon | Retirement(1) or Voluntary Separation | Involuntary Termination For Cause | Without Termination | Termination Without Cause / Good Reason | Death | Disability | ||||||||||||
Compensation: | ||||||||||||||||||
Severance Benefit (Change of Control)(2) | $ | — | $ | — | $ | — | $ | 1,765,177 | $ | — | $ | — | ||||||
Annual Incentives: | ||||||||||||||||||
Annual Incentive Plan(3) | 185,471 | 185,471 | 185,471 | (Included Above) | 185,471 | 185,471 | ||||||||||||
Long-Term Incentives: | ||||||||||||||||||
LTIP(4) | 75,338 | 75,338 | 266,523 | 266,523 | 75,338 | 75,338 | ||||||||||||
Restricted Stock:(5) | ||||||||||||||||||
Accelerated Vesting | — | 470,262 | 470,262 | 470,262 | 470,262 | 470,262 | ||||||||||||
Total Benefits | $ | 260,809 | $ | 731,071 | $ | 922,256 | $ | 2,501,962 | $ | 731,071 | $ | 731,071 |
(1) | Retirement under the 2004 and 2014 Plans is defined as attaining age 60 and five or more years of service with the Company. |
(2) | Severance upon a Change of Control equals an amount equal to three times the average of the aggregate annual compensation paid during our three fiscal years immediately preceding the Change of Control and excludes any payments required to cover IRC Section 280G obligations if applicable. |
(3) | Represents the annual incentive eligibility pursuant to the 2016 Officers Incentive Compensation Plan. |
(4) | Represents the LTIP incentive achieved pursuant to the 2014-2016 Officers Long-Term Incentive Plan, except by a termination pursuant to a Change of Control, which includes the full amount payable under the 2014-2016 Officers Long-Term Incentive Plan and the entire amount estimated to be payable under the 2015-2017 and the 2016-2018 Officers Long-Term Incentive Plans. |
(5) | Represents the intrinsic value of stock grants based on our closing stock price of $23.91 per share on August 26, 2016, the last trading day of Fiscal 2016. |
Change of Control | ||||||||||||||||||
Executive Payments and Benefits Upon | Retirement(1) or Voluntary Separation | Involuntary Termination For Cause | Without Termination | Termination Without Cause / Good Reason | Death | Disability | ||||||||||||
Compensation: | ||||||||||||||||||
Severance Benefit (Change of Control)(2) | $ | — | $ | — | $ | — | $ | 1,592,885 | $ | — | $ | — | ||||||
Annual Incentives: | ||||||||||||||||||
Annual Incentive Plan(3) | 167,131 | 167,131 | 167,131 | (Included Above) | 167,131 | 167,131 | ||||||||||||
Long-Term Incentives: | ||||||||||||||||||
LTIP(4) | 64,575 | 64,575 | 237,121 | 237,121 | 64,575 | 64,575 | ||||||||||||
Restricted Stock:(5) | ||||||||||||||||||
Accelerated Vesting | — | 470,262 | 470,262 | 470,262 | 470,262 | 470,262 | ||||||||||||
Total Benefits | $ | 231,706 | $ | 701,968 | $ | 874,514 | $ | 2,300,268 | $ | 701,968 | $ | 701,968 |
(1) | Retirement under the 2004 and 2014 Plans is defined as attaining age 60 and five or more years of service with the Company. |
(2) | Severance upon a Change of Control equals an amount equal to three times the average of the aggregate annual compensation paid during our three fiscal years immediately preceding the Change of Control and excludes any payments required to cover IRC Section 280G obligations if applicable. |
(3) | Represents the annual incentive eligibility pursuant to the 2016 Officers Incentive Compensation Plan. |
(4) | Represents the LTIP incentive achieved pursuant to the 2014-2016 Officers Long-Term Incentive Plan, except by a termination pursuant to a Change of Control, which includes the full amount payable under the 2014-2016 Officers Long-Term Incentive Plan and the entire amount estimated to be payable under the 2015-2017 and the 2016-2018 Officers Long-Term Incentive Plans. |
(5) | Represents the intrinsic value of stock grants based on our closing stock price of $23.91 per share on August 26, 2016, the last trading day of Fiscal 2016. |
Change of Control | ||||||||||||||||||
Executive Payments and Benefits Upon | Retirement(1) or Voluntary Separation | Involuntary Termination For Cause | Without Termination | Termination Without Cause / Good Reason | Death | Disability | ||||||||||||
Compensation: | ||||||||||||||||||
Severance Benefit (Change of Control)(2) | $ | — | $ | — | $ | — | $ | 1,589,056 | $ | — | $ | — | ||||||
Annual Incentives: | ||||||||||||||||||
Annual Incentive Plan(3) | 153,355 | 153,355 | 153,355 | (Included Above) | 153,355 | 153,355 | ||||||||||||
Long-Term Incentives: | ||||||||||||||||||
LTIP(4) | 63,000 | 63,000 | 63,000 | 63,000 | 63,000 | 63,000 | ||||||||||||
Restricted Stock:(5) | ||||||||||||||||||
Accelerated Vesting | — | 470,262 | 470,262 | 470,262 | 470,262 | 470,262 | ||||||||||||
Deferred Compensation Plans: | ||||||||||||||||||
Executive Deferred Compensation Plan(6) | 83,302 | 83,302 | 83,302 | 83,302 | 83,302 | 83,302 | ||||||||||||
Total Benefits | $ | 299,657 | $ | 769,919 | $ | 769,919 | $ | 2,205,620 | $ | 769,919 | $ | 769,919 |
(1) | Retirement under the 2004 and 2014 Plans is defined as attaining age 60 and five or more years of service with the Company. |
(2) | Severance upon a Change of Control equals an amount equal to three times the average of the aggregate annual compensation paid during our three fiscal years immediately preceding the Change of Control and excludes any payments required to cover IRC Section 280G obligations if applicable. |
(3) | Represents the annual incentive eligibility pursuant to the 2016 Officers Incentive Compensation Plan. |
(4) | Represents the LTIP incentive achieved pursuant to the 2014-2016 Officers Long-Term Incentive Plan. |
(5) | Represents the intrinsic value of stock grants based on our closing stock price of $23.91 per share on August 26, 2016, the last trading day of Fiscal 2016. |
(6) | Represents market value balance as of August 27, 2016. |
• | The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended August 27, 2016 of Winnebago Industries, Inc. (the “Audited Financial Statements”) with Winnebago Industries, Inc.'s Management. |
• | The Audit Committee has discussed with Deloitte the matters required to be discussed by Auditing Standard No. 16, "Communications with Audit Committees", as adopted by the PCAOB. |
• | The Audit Committee has received the written disclosures from Deloitte required by applicable requirements of the PCAOB regarding Deloitte's communications with the Audit Committee concerning independence, and has discussed with Deloitte its independence. |
The Audit Committee: | ||
Mark T. Schroepfer, Chair | ||
David W. Miles | ||
Lawrence A. Erickson | ||
Christopher J. Braun |
Fiscal 2016 | Fiscal 2015 | ||||||
Audit Fees (1) | $ | 682,000 | $ | 585,000 | |||
Audit-Related Fees (2) | 171,000 | 23,000 | |||||
Tax Fees (3) | 6,670 | 76,371 | |||||
All Other Fees (4) | — | — | |||||
Total | $ | 859,670 | $ | 684,371 |
(1) | Represents fees for professional services provided for the audit of our annual financial statements, the audit of our internal control over financial reporting and review of our interim financial information and review of other SEC filings. |
(2) | Represents fees for professional services provided for the audit of our benefit plan and due diligence services. |
(3) | Represents fees for professional services related to tax compliance and tax planning. |
(4) | Represents fees for professional services provided to us not otherwise included in the categories above. |
By Order of the Board of Directors | |
October 19, 2016 | /s/ Scott C. Folkers |
Scott C. Folkers | |
Secretary |
1. | RECOMMENDED CANDIDATES. The Committee shall consider any and all candidates recommended as nominees for directors to the Committee by any directors, officers, shareholders of the Company, third-party search firms and other sources. Under the terms of our By-Laws, the Committee will consider director nominations from shareholders of record who provide timely written notice along with prescribed information to the Secretary of the Company. To be timely, the notice must be received by the Secretary at our principal executive offices not later than 90 or earlier than 120 days prior to the anniversary of the previous year’s annual meeting, except in the case of candidates recommended by shareholders of more than 5 percent of the Company’s Common Stock who may also submit nominations in accordance with the procedures in Section 2 under “5% SHAREHOLDER RECOMMENDATIONS” and except as otherwise provided in our By-Laws. The shareholder’s notice must set forth (1) all information relating to such director nominee that is required to be disclosed under the federal securities laws in solicitation of proxies for election of directors in an election contest, including the person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (2) the name and address of the shareholder and any beneficial owner giving the notice as they appear on our books together with the number of shares of the Company’s Common Stock which are owned beneficially and of record by the shareholder and any beneficial owner; and (3) a signed statement by the nominee agreeing that, if elected, such nominee will (a) represent all of our shareholders in accordance with applicable laws and By-Laws and (b) comply with our Code of Ethics. |
2. | 5% SHAREHOLDER RECOMMENDATIONS. For purposes of facilitating disclosure required in the Proxy Statement, the Committee and the Corporate Secretary shall identify any candidates recommended by shareholders owning more than 5 percent of the Company’s Common Stock, and identify the shareholder making such recommendation, as provided in and to the extent required by the federal securities laws. In addition to the procedures for shareholders to recommend nominees described in Section 1 above, shareholders or a group of shareholders who have owned more than 5 percent of the Company’s Common Stock for at least one year as of the date the recommendation was made, may recommend nominees for director to the Committee provided that (1) written notice from the shareholder(s) must be received by the Secretary of the Company at our principal executive offices not later than 120 days prior to the anniversary of the date our proxy statement was released to shareholders in connection with the previous year’s annual meeting, except as otherwise provided in our By-Laws; (2) such notice must contain the name and address of the shareholder(s) and any beneficial owner(s) giving the notice as they appear on our books, together with evidence regarding the number of shares of the Company’s Common Stock together with the holding period and the written consent of the recommended candidate and the shareholder(s) to being identified in our proxy statement; (3) such notice must contain all information relating to such director nominee that is required to be disclosed under federal securities laws in solicitation of proxies for election of directors in an election contest; and (4) such notice must contain a signed statement by the nominee agreeing that, if elected, such nominee will (a) represent all our shareholders in accordance with applicable laws and our By-Laws and (b) comply with our Code of Ethics. |
3. | DESIRED QUALIFICATIONS, QUALITIES AND SKILLS. The Committee shall endeavor to find individuals of high integrity who have a solid record of accomplishment in their chosen fields and who possess the qualifications, qualities and skills to effectively represent the best interests of all shareholders. Candidates will be selected for their ability to exercise good judgment and to provide practical insights and diverse perspectives. |
• | the highest professional and personal ethics; |
• | broad experience in business, government, education or technology; |
• | ability to provide insights and practical wisdom based on their experience and expertise; |
• | commitment to enhancing shareholder value; |
• | sufficient time to effectively carry out their duties; their service on other boards of public companies should be limited to a reasonable number; |
• | ability to develop a good working relationship with other Board members and contribute to the Board's working relationship with our senior management; and |
• | independence; a majority of the Board shall consist of independent directors, as defined in this Director Nomination Policy. |
4. | INDEPENDENCE. The Committee believes and it is our policy that a majority of the members of the Board meet the definition of “independent director” set forth in this Director Nomination Policy. The Committee shall annually assess each nominee for director by reviewing any potential conflicts of interest and outside affiliations, based on the criteria for independence set out below. |
(1) | has no material relationship with the Company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company; |
(2) | is not an employee of the Company and no member of his or her immediate family is an executive officer of the Company; |
(3) | has not been employed by the Company and no member of his or her immediate family has been an executive officer of the Company during the past three years; |
(4) | has not received and no member of his or her immediate family has received more than $120,000 per year in direct compensation from the Company in any capacity other than as a director during the past three years; |
(5) | (A) is not a current partner or employee of a firm that is the Company's internal or external auditor; (B) does not have an immediate family member who is a current partner of a firm that is the Company's internal or external auditor; (C) does not have an immediate family member who is a current employee of the Company's internal or external auditor and who personally works on the Company's audit; and (D) within the last three years was not and no member of his or her immediate family was a partner or employee of the Company's internal or external auditor and personally worked on the Company's audit within that time. |
(6) | is not and no member of his or her immediate family is currently, and for the past three years has not been, and no member of his or her immediate family has been, part of an interlocking directorate in which an executive officer of the Company serves on the compensation committee of another company that employs the director or an immediate family member of the director; |
(7) | is not an executive officer or an employee, and no member of his or her immediate family is an executive officer, of another company that makes payments to, or receives payments from, the Company for property or services in an amount which, in any single year, exceeds the greater of $1 million or 2 percent of such other company's consolidated revenues during any of the past three years; |
(8) | is free of any relationships with the Company that may impair, or appear to impair, his or her ability to make independent judgments; and |
(9) | is not and no member of his or her immediate family is employed by or serves as a director, officer or trustee of a charitable organization that receives contributions from the Company or a Company charitable trust, in an amount which exceeds the greater of $1 million or 2 percent of such charitable organization's total annual receipts. |
(1) | Any payments by the Company to a director's primary business affiliation or the primary business affiliation of an immediate family member of a director for goods or services, or other contractual arrangements, must be made in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons. |
(2) | The aggregate amount of such payments must not exceed 2 percent of the Company's consolidated gross revenues. |
5. | NOMINEE EVALUATION PROCESS. The Committee will consider as a candidate any director of the Company who has indicated to the Committee that he or she is willing to stand for re-election as well as any other person who is recommended by any shareholders of the Company in accordance with the procedures described under “RECOMMENDED CANDIDATES” in Section 1 and under “5% SHAREHOLDER RECOMMENDATIONS” in Section 2. The Committee may also undertake its own search process for candidates and may retain the services of professional search firms or other third parties to assist in identifying and evaluating potential nominees and, if fees are paid to such persons in any year, such fees shall be disclosed in the next annual Proxy Statement relating to such year. The Committee may use any process it deems appropriate for the |
6. | CATEGORIZE RECOMMENDATIONS. For purposes of facilitating disclosure required in the Proxy Statement, the Committee and the Corporate Secretary shall identify and organize the recommendations for nominees received by the Committee (other than nominees who are executive officers or who are directors standing for re-election) in accordance with one or more of the following categories of persons or entities that recommended that nominee: |
7. | MATERIAL CHANGES TO NOMINATION PROCEDURES. For purposes of facilitating disclosure required in Form 10-K and Form 10-Q, the Committee and the Corporate Secretary shall identify any material changes to the procedures for shareholder nominations of directors for the reporting period in which such material changes occur. |
8. | POSTING OF POLICY. This Director Nomination Policy shall be posted to the Company's Web Site in accordance with the Company's Corporate Governance Policy. |
9. | AMENDMENTS TO THIS POLICY. Any amendments to this Director Nomination Policy must be approved by the Committee and ratified by the Board. |
Shareowner ServicesSM P.O. Box 64945 St. Paul, MN 55164-0945 |
Three Ways to Appoint Your Proxy to Vote To appoint your proxy electronically by telephone: 1-866-883-3382 1) Read the Proxy Statement and have the proxy card below at hand. 2) Call 1-866-883-3382. 3) Follow the instructions. To appoint your proxy electronically via the Internet: www.proxypush.com/wgo 1) Read the Proxy Statement and have the proxy card below at hand. 2) Go to website www.proxypush.com/wgo. 3) Follow the instructions provided on the website. To appoint your proxy by mail 1) Read the Proxy Statement. 2) Check the appropriate boxes on the proxy card below. 3) Sign and date the proxy card. 4) Return the proxy card in the envelope provided. The deadline for voting is 12:00 p.m. (CST) on Monday, December 12, 2016. |
The Board of Directors Recommends a Vote FOR Items 1, 2, 3, and 4. | ||||||||
1. | Election of Class III director: | 01 Michael J. Happe | o | Vote FOR all nominees | o | Vote WITHHELD | ||
Election of Class II director: | 02 Robert M. Chiusano | (except as marked) | from all nominees | |||||
(Instructions: To withhold authority to vote any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.) | ||||||||
2. | Advisory approval of executive compensation, (the "say on pay" vote). | o For o Against o Abstain | ||||||
3. | Ratification of the appointment of Deloitte & Touche LLP as Winnebago Industries, Inc. Independent Registered Public Accountant for our fiscal year 2017. | o For o Against o Abstain | ||||||
4. | To transact such other business as may properly come before the meeting or any adjournment or adjournments thereof. | |||||||
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH PROPOSAL AND IN THE DISCRETION OF THE NAMED PROXIES ON ALL OTHER MATTERS. | ||||||||
Address Change? Mark Box o Indicate changes below: | Date | |||||||
Signature(s) in Box | ||||||||
Please sign exactly as your name(s) appears on the Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy. |
ANNUAL MEETING OF SHAREHOLDERS Tuesday, December 13, 2016 4:00 p.m. Central Standard Time Winnebago Industries' South Office Complex Theater, 605 W. Crystal Lake Road, Forest City, Iowa | |
Winnebago Industries, Inc. Forest City, Iowa | proxy |
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