SCHEDULE
14A
(Rule
14A-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934
Filed by
the Registrant [X]
Filed by
a Party other than the Registrant [ ]
Check the
appropriate box:
[ ] Preliminary
Proxy Statement
[ ] Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive
Proxy Statement
[ ] Definitive
Additional Materials
[ ] Soliciting
Material under Rule 14a-12
PGT,
INC.
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X] No
fee required.
[ ] Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title
of each class of securities to which transaction applies:
(2)
Aggregate number of securities to which transaction applies:
(3) Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4)
Proposed maximum aggregate value of transaction:
(5) Total
fee paid:
[ ] Fee
paid previously with preliminary materials:
[ ] Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1)
Amount Previously Paid:
(2) Form,
Schedule or Registration State No.:
(3)
Filing Party:
(4) Date
Filed:
April 20,
2009
Dear
Fellow Stockholder:
I am
pleased to invite you to attend our 2009 annual meeting of stockholders, to be
held on May 12th at
12:00 p.m., local time, at the Roosevelt Hotel in New York City.
This
booklet includes the notice of meeting of stockholders and the proxy statement.
The proxy statement describes the various matters to be acted upon during the
annual meeting and provides other information concerning PGT, Inc. of which you
should be aware when you vote your shares.
You can
ensure that your shares are represented at the meeting by promptly voting and
submitting your proxy by completing and mailing your proxy or you may vote in
person by attending the annual meeting. If you hold shares through a broker or
other nominee in “street name,” you may also be able to vote using the internet
or telephone by following the voting instruction they provide in your
materials.
On behalf
of the Board of Directors of PGT, Inc., I would like to express our appreciation
for your ownership and continued interest in the affairs of PGT, and I hope you
will be able to join us on May 12th for our
2009 annual meeting of stockholders.
Sincerely,
Paul S.
Levy
Chairman
of the Board of Directors
PGT,
INC.
1070
TECHNOLOGY DRIVE
NORTH
VENICE, FLORIDA 34275
NOTICE
OF MEETING OF STOCKHOLDERS
Our 2009
annual meeting of stockholders (the “Meeting”) will be held at the Roosevelt
Hotel, Madison Avenue at 45th Street,
New York, New York 10017 on May 12th
beginning at 12:00 p.m., local time. The Meeting is being held to:
1. Elect
three directors, nominated by our Board of Directors, to serve until our 2012
annual meeting of stockholders and until their respective successors shall have
been duly elected and qualified;
2. Ratify
the appointment of Ernst & Young LLP as the Company’s independent registered
public accounting firm for the 2009 fiscal year; and to
3. Act
on any other matter that may properly come before the
Meeting.
Stockholders
of record at the close of business on April 14, 2009 are entitled to receive
notice of and to vote at the Meeting and any adjournments. A complete list of
stockholders entitled to vote at the Meeting will be open for examination by our
stockholders for any purpose germane to the Meeting, during regular business
hours, for a period of ten days prior to the Meeting, at the Company’s principal
place of business and at the Meeting.
The
enclosed proxy is solicited by the Board of Directors of the Company. Reference
is made to the attached proxy statement for further information with respect to
the business to be transacted at the Meeting.
Registration
will begin at 11:00 a.m., and each stockholder will be asked to present a valid
form of personal identification. Cameras, recording devices and other electronic
devices will not be permitted at the Meeting. Additional rules of conduct
regarding the Meeting will be provided.
IMPORTANT
NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS
PGT is
delivering one annual report and proxy statement in one envelope addressed to
all stockholders who share a single address unless they have notified us that
they wish to “opt out” of the program known as
“householding.” Householding is intended to reduce our printing and
postage costs. We will deliver
a separate copy of the annual report or proxy statement promptly upon written
request. Please send all requests to our Secretary at 1070 Technology Drive,
North Venice, Florida 34275.
If you
are a stockholder of record and wish to receive a separate copy of the annual
report and proxy statement in the future, please contact American Stock Transfer
& Trust Company, LLC, Operations Center, 6201 15th Avenue,
Brooklyn, NY 11219 or call toll-free at (800) 937-5449 or locally and
internationally at (718) 921-8124.
If you
are a beneficial stockholder and you choose not to have the aforementioned
disclosure documents sent to a single household address as described above, you
must “opt-out” by calling (800) 542-1061. Additional information
regarding householding of disclosure documents should have been forwarded to you
by your broker. If we do not receive instructions to remove your
account(s) from this service, your account(s) will continue to household until
we notify you otherwise.
By
Order of the Board of Directors,
Mario
Ferrucci III
Vice
President and General Counsel
April
20, 2009
This proxy
statement and the accompanying form of proxy are being sent to our stockholders
in connection with our solicitation of proxies for use at the 2009 Meeting or at
any adjournment(s) or postponement(s) of the Meeting.
|
Page
|
||
PROXY
STATEMENT
FOR
MEETING
OF STOCKHOLDERS
TUESDAY,
MAY 12, 2009
INTRODUCTION
The
annual meeting of stockholders (the “Meeting”) of PGT, Inc., a Delaware
corporation (“PGT,” “we,” “us,” “our,” or the “Company”) will be held on
Tuesday, May 12, 2009, beginning at 12:00 p.m., local time, at the Roosevelt Hotel, Madison Avenue at
45th Street, New York, New York 10017.
We encourage all of our stockholders to vote, and we hope that the
information contained in this document will help you decide how you wish to
vote.
The Board
of Directors does not intend to bring any matter before the Meeting except as
specifically indicated in the notice and does not know of anyone else who
intends to do so. If any other matters properly come before the Meeting,
however, the persons named in the enclosed proxy, or their duly constituted
substitutes acting at the Meeting, will be authorized to vote or otherwise act
thereon in accordance with their judgment on such matters. If the enclosed proxy
is properly executed and returned to, and received by, the Company prior to
voting at the Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. In the absence of instructions,
the shares will be voted “FOR” Proposal One, the nominees of the Board of
Directors in the election of the three directors whose terms of office will
extend until the 2012 annual meeting of stockholders and until their respective
successors are duly elected and qualified; and “FOR” Proposal Two, the
ratification of the appointment of Ernst & Young LLP as the Company’s
independent registered public accounting firm for the 2009 fiscal year. Any
proxy may be revoked at any time before its exercise by notifying the Secretary
of PGT in writing, by delivering a duly executed proxy bearing a later date, or
by attending the Meeting and voting in person.
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Stockholders to Be Held on May 12, 2009:
The
proxy statement for the Meeting, the Annual Report to Stockholders and our
Annual Report on Form 10-K for the 2008 Fiscal Year Ended January 3, 2009 are
available at www.pgtindustries.com/proxymaterials.
Why
did I receive these proxy materials?
We are
furnishing this proxy statement in connection with the solicitation by the
Company’s Board of Directors of proxies to be voted at the Meeting and at any
adjournment or postponement of the Meeting. At the Meeting, stockholders will
act upon the following proposals to:
· Elect
three directors, nominated by the Board of Directors, to serve until our 2012
meeting of stockholders and until their respective successors are duly elected
and qualified;
· Ratify
the appointment of Ernst & Young LLP as the Company’s independent
registered public accounting firm for the 2009 fiscal year; and to
· Act on
any other matter that may properly come before the Meeting.
These
proxy solicitation materials are being sent to our stockholders on or about
April 20, 2009.
What
do I need to attend the Meeting?
Attendance
at the Meeting is limited to stockholders. Registration will begin at 11:00
a.m., and each stockholder will be asked to present a valid form of personal
identification. Cameras, recording devices and other electronic devices will not
be permitted at the Meeting. Additional rules of conduct regarding the Meeting
will be provided at the Meeting.
Who
is entitled to vote at the Meeting?
The Board
of Directors has determined that those stockholders who are recorded in our
record books as owning shares of PGT common stock as of the close of business on
April 14, 2009, are entitled to receive notice of and to vote at the Meeting. As
of the record date, there were 35,688,584 shares of PGT common stock issued and
outstanding. Your shares may be (1) held directly in your name as the
stockholder of record and/or (2) held for you as the beneficial owner through a
stockbroker, bank or other nominee. Our common stock is our only class of
outstanding voting securities. Each share of common stock is entitled to one
vote on each matter properly brought before the Meeting. There are no
dissenters’ rights of appraisal in connection with any stockholder vote to be
taken at the Meeting.
What
is the difference between holding shares as a stockholder of record and as a
beneficial owner?
Most of
our stockholders hold their shares through a broker, bank or other nominee
rather than directly in their own name. As summarized below, there are some
distinctions between shares held of record and those owned
beneficially.
Stockholder
of Record
If your
shares are registered directly in your name with our transfer agent, American
Stock Transfer & Trust Company, LLC, you are considered, with respect to
those shares, the stockholder of record, and these proxy materials are being
sent directly to you by us. As the stockholder of record, you have the right to
grant your voting proxy directly to us or to vote in person at the Meeting. We
have enclosed or sent a proxy card for you to use.
Beneficial
Owner
If your
shares are held in a stock brokerage account or by a bank or other nominee, you
are considered the beneficial owner of shares held in street name, and these
proxy materials are being forwarded to you by your broker, bank or nominee which
is considered, with respect to those shares, the stockholder of record. As the
beneficial owner, you have the right to direct your broker on how to vote your
shares and are also invited to attend the Meeting. However, because you are not
the stockholder of record, you may not vote these shares in person at the
Meeting unless you obtain a signed proxy from the record holder giving you the
right to vote the shares. Your broker, bank or nominee has enclosed or provided
a voting instruction card for you to use in directing the broker or nominee how
to vote your shares. If you do not provide the stockholder of record with voting
instructions, your shares may constitute broker non-votes. The effect of broker
non-votes is more specifically described in "What vote is required to approve
each item?" below.
How
can I vote my shares in person at the Meeting?
Shares of
PGT common stock held directly in your name as the stockholder of record may be
voted in person at the Meeting.
SHARES
HELD BENEFICIALLY IN STREET NAME MAY BE VOTED IN PERSON BY YOU ONLY IF YOU
OBTAIN A SIGNED PROXY FROM THE RECORD HOLDER GIVING YOU THE RIGHT TO VOTE THE
SHARES.
EVEN IF
YOU CURRENTLY PLAN TO ATTEND THE MEETING, WE RECOMMEND THAT YOU ALSO SUBMIT YOUR
PROXY AS DESCRIBED BELOW SO THAT YOUR VOTE WILL BE COUNTED IF YOU LATER DECIDE
NOT TO ATTEND THE MEETING.
How
can I vote my shares without attending the Meeting?
Whether
you hold shares directly as the stockholder of record or beneficially in street
name, you may direct your vote without attending the Meeting. You may vote by
granting a proxy or, for shares held in street name, by submitting voting
instructions to your broker, bank or nominee.
Please
refer to the summary instructions below and those included on your proxy card
or, for shares held in street name, the voting instruction card included by your
broker, bank or nominee.
BY
INTERNET OR TELEPHONE – If you hold shares through a broker or other nominee in
“street name,” you may be able to vote by the internet or telephone as permitted
by your broker or nominee. The availability of internet and telephone
voting for beneficial owners will depend on the voting process of your broker,
bank or other holder of record. Therefore, we recommend that you
follow the voting instructions you receive.
BY MAIL —
You may vote by mail by marking, signing and dating your proxy card or, for
shares held in street name, the voting instruction card included by your broker,
bank or nominee and mailing it in the accompanying enclosed, pre-addressed
envelope. If you provide specific voting instructions, your shares will be voted
as you instruct. If the pre-addressed envelope is missing, please mail your
completed proxy card to American Stock Transfer & Trust Company, LLC, 6201
15th
Avenue, Brooklyn, NY 11219, Attn: Proxy Department.
If you
cast your vote in any of the ways set forth above, your shares of PGT common
stock will be voted in accordance with your voting instructions, unless you
validly revoke your proxy. We do not currently anticipate that any other matters
will be presented for action at the Meeting. If any other matters are properly
presented for action, the persons named on your proxy will vote your shares of
PGT common stock on these other matters in their discretion, under the
discretionary authority you have granted to them in your proxy.
IF YOUR
PROPERLY EXECUTED PROXY DOES NOT SPECIFY HOW YOUR SHARES ARE TO BE VOTED, YOUR
SHARES OF PGT COMMON STOCK WILL BE VOTED FOR THE ELECTION OF
EACH NOMINEE NAMED UNDER THE SECTION OF THIS DOCUMENT CAPTIONED “ELECTION OF
DIRECTORS,” AND FOR THE RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2009 FISCAL YEAR, AND WILL BE COUNTED
AS ABSTENTIONS WITH REGARD TO ANY STOCKHOLDER PROPOSAL. UNDER
DELAWARE LAW, ABSTENTIONS HAVE THE SAME EFFECT AS A VOTE AGAINST THE
PROPOSAL.
Can
I change my vote after I submit my proxy?
Yes. Even
after you have submitted your proxy, you may change your vote at any time prior
to the close of voting at the Meeting by:
· filing
with our Secretary at 1070 Technology Drive, North Venice, Florida 34275 a
signed, original written notice of revocation dated later than the proxy you
submitted,
· submitting
a duly executed proxy bearing a later date,
· voting by
telephone or internet on a later date, or
· attending
the Meeting and voting in person.
In order
to revoke your proxy, prior to the Meeting, we must receive an original notice
of revocation of your proxy at the address above sent by U.S. mail or overnight
courier. If you grant a proxy, you are not prevented from attending
the Meeting and voting in person. However, your attendance at the Meeting will
not by itself revoke a proxy that you have previously granted; you must vote in
person at the Meeting to revoke your proxy.
If your
shares of PGT common stock are held in a stock brokerage account or by a bank or
other nominee, you may revoke your proxy by following the instructions provided
by your broker, bank or nominee.
All
shares of PGT common stock that have been properly voted and not revoked will be
voted at the Meeting.
Is
there a list of stockholders entitled to vote at the Meeting?
A
complete list of stockholders entitled to vote at the Meeting will be available
for examination by PGT stockholders for any purpose germane to the Meeting,
during regular business hours, for a period of ten days prior to the Meeting,
at the Company’s principal place
of business and at the Meeting.
What
constitutes a quorum to transact business at the Meeting?
Before
any business may be transacted at the Meeting, a quorum must be present. The
presence at the Meeting, in person or by proxy, of the holders of a majority of
the shares of PGT common stock outstanding and entitled to vote on the record
date will constitute a quorum. At the close of business on the record date,
35,688,584 shares of our common stock were issued and outstanding. Proxies
received but marked as abstentions and broker non-votes will be included in the
calculation of the number of shares considered to be present at the Meeting for
purposes of a quorum.
What
is the recommendation of the Board of Directors?
Our
Board of Directors recommends a vote “FOR” the election of our three nominees to
the Board of Directors, and “FOR” the ratification of the appointment of
Ernst & Young LLP as the Company’s independent registered public
accounting firm for the 2009 fiscal year.
Unless
you give other instructions either via your proxy card or your electronic vote,
the persons named as proxy holders on the proxy card will vote in accordance
with the recommendations of our Board of Directors.
With
respect to any other matter that properly comes before the Meeting, the proxy
holders will vote in accordance with their judgment on such matter.
What
vote is required to approve each item?
Directors
named in Proposal One are elected by a plurality of the votes present in person
or represented by proxy and entitled to vote, and the director nominees who
receive the greatest number of votes at the Meeting (up to the number of
directors to be elected) will be elected. You may vote “FOR” or “WITHHELD” with
respect to election of directors. Shares will be voted, if authority to do so is
not withheld, for election of the Board of Directors’ nominees named in Proposal
One. Only votes "FOR" or "WITHHELD" are counted in determining whether a
plurality has been cast in favor of a director. Broker non-votes, if any, will
not affect the outcome of the vote on the election of directors.
The
affirmative vote of at least a majority of our issued and outstanding common
stock present, in person or by proxy, and entitled to vote at the Meeting will
be required to ratify the appointment of Ernst & Young LLP as the Company’s
independent registered public
accounting firm for the 2009 fiscal year.
The
affirmative vote of at least a majority of our issued and outstanding common
stock present, in person or by proxy, and entitled to vote at the Meeting will
be required to approve any stockholder proposal. Under applicable Delaware law,
in determining whether any stockholder proposal has received the requisite
number of affirmative votes, abstentions and broker non-votes will be counted
and will have the same effect as a vote against any stockholder
proposal.
A “broker
non-vote” occurs when a bank, broker or other holder of record holding shares
for a beneficial owner does not vote on a particular proposal because that
holder does not have discretionary voting power for that particular item and has
not received instructions from the beneficial owner. If you are a beneficial
owner, your bank, broker or other holder of record is permitted to vote your
shares on the election of directors even if the record holder does not receive
voting instructions from you. Absent instructions from you, the record holder
may not vote on any “non-discretionary” matter which includes any stockholder
proposal. Without your voting instructions, a broker non-vote will occur. An
“abstention” will occur at the Meeting if your shares of PGT common stock are
deemed to be present at the Meeting, either because you attend the Meeting or
because you have properly completed and returned a proxy, but you do not vote on
any proposal or other matter which is required to be voted on by our
stockholders at the Meeting. You should consult your broker if you have
questions about this.
What
does it mean if I receive more than one proxy or voting instruction
card?
It means
your shares are registered differently or are in more than one account. Please
provide voting instructions for all proxy and voting instruction cards you
receive.
Where
can I find the voting results of the Meeting?
We will
announce preliminary voting results at the Meeting and intend to publish final
results in our quarterly report on Form 10-Q for the second quarter of fiscal
year 2009.
Who
will count the votes?
A
representative of American Stock Transfer & Trust Company, LLC, our transfer
agent, will both tabulate the votes and serve as the inspector of
election.
Who
will pay for the cost of this proxy solicitation?
We are
making this solicitation and will pay the entire cost of preparing, assembling,
printing, mailing and distributing these proxy materials. In addition
to the mailing of these proxy materials, the solicitation of proxies or votes
may be made in person, by telephone or by electronic communication by our
directors, officers and employees, who will not receive any additional
compensation for such solicitation activities. We will request banks, brokers,
nominees, custodians and other fiduciaries, who hold shares of PGT common stock
in street name, to forward these proxy solicitation materials to the beneficial
owners of those shares, and we will reimburse them the reasonable out-of-pocket
expenses they incur in doing so.
How
can I access the Company’s proxy materials and annual report
electronically?
A copy of
our Annual Report on Form 10-K for the fiscal year ended January 3, 2009 as
filed with the SEC on March 19, 2009 is being mailed concurrently with this
proxy statement to all stockholders entitled to notice of and to vote at the
Meeting. A copy of our Annual Report on Form 10-K and these proxy materials are
available without charge at www.pgtindustries.com/proxymaterials.
References to our website in this proxy statement are not intended to function
as hyperlinks, and the information contained on our website is not intended to
be incorporated into this proxy statement. These proxy materials are also
available in print to stockholders without charge and upon request, addressed to
PGT, Inc., 1070 Technology Drive, North Venice, Florida 34275, Attention:
Secretary. You are encouraged to access and review all of the important
information contained in the proxy materials before voting.
May
I propose actions for consideration at next year's annual meeting of
stockholders?
Any
proposals that our stockholders wish to have included in our proxy statement and
form of proxy for the 2010 annual meeting of stockholders must be received by us
no later than the close of business on December 18, 2009 and must otherwise
comply with the requirements of Rule 14a-8 under the Exchange Act. The Company's
bylaws provide that, in order for a stockholder to propose any matter for
consideration at an annual meeting of the Company other than matters set forth
in the Notice of Meeting such stockholder must have given timely prior written
notice to the Corporate Secretary of the Company of such stockholder's intention
to bring such business before the meeting. To be timely for the 2010 Annual
Meeting of Stockholders, notice must be received by the Company not less than
ninety days nor more than one hundred twenty days prior to May 12, 2010, which
will be the anniversary date of the prior year's meeting (or if the meeting date
for the 2010 annual meeting is not within thirty days before or after the
anniversary date of the prior year's meeting, then not later than the tenth day
following the first to occur of the day on which the notice of the date of the
meeting is mailed or public disclosure thereof is made). Such notice must
contain certain information about such business and the stockholder who proposes
to bring the business before the meeting, including a brief description of the
business the stockholder proposes to bring before the meeting, the reasons for
conducting such business at the annual meeting, the name and address of the
stockholder, the class and number of shares of common stock owned
beneficially or of record by such stockholder, any material interest
of such stockholder in the business so proposed and a representation that such
stockholder intends to appear in person or by proxy at the annual meeting to
bring such business before the Meeting. Any proposals should be sent
to:
|
PGT,
INC.
1070
TECHNOLOGY DRIVE
NORTH
VENICE, FLORIDA 34275
ATTENTION:
SECRETARY
|
NO
PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER
THAN THOSE CONTAINED IN THIS PROXY STATEMENT AND, IF GIVEN OR MADE, SUCH
INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED, AND THE DELIVERY
OF THIS PROXY STATEMENT SHALL, UNDER NO CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF
THIS PROXY STATEMENT.
ELECTION
OF DIRECTORS
There are
currently eleven members of our Board of Directors. Pursuant to the
Company’s Amended and Restated Certificate of Incorporation, the Board is
“classified,” which means it is divided into three classes of directors based on
the expiration of their terms. Under the classified board arrangement, directors
are elected to terms that expire on the annual meeting date three years
following the annual meeting at which they were elected, and the terms are
“staggered” so that the terms of approximately one-third of the directors expire
each year. At the Meeting, our stockholders will elect three directors to hold
office until the 2012 annual meeting of stockholders and until their respective
successors have been duly elected and qualified. Accordingly, this Proposal One
seeks the election of three directors (Messrs. Paul S. Levy, Rodney Hershberger,
and Floyd F. Sherman as Class III directors) whose terms expire in
2009.
The Board
of Directors has nominated Messrs. Levy, Hershberger and Sherman to serve again
as Class III directors until the 2012 annual meeting of stockholders and until
their respective successors have been duly elected and qualified. Each nominee
has consented to continue to serve as a director if elected at the Meeting.
Should a nominee become unavailable to accept election as a director, the
persons named in the enclosed proxy will vote the shares that such proxy
represents for the election of such other person as the Board of Directors may
nominate. We have no reason to believe that any of the nominees will
be unable to serve.
THE
BOARD OF DIRECTORS RECOMMENDS VOTING “FOR” THE ELECTION OF THE THREE CLASS III
DIRECTOR NOMINEES.
Set forth
below is certain information concerning each nominee for election as a director
at the Meeting and each director whose current term of office will continue
after the Meeting.
|
Name
|
Age
|
Class
and Position
|
Date
Elected or Appointed
Director
|
|||
|
Paul
S. Levy
|
61
|
Class
III Director
|
2004
|
|||
|
Floyd
F. Sherman*
|
69
|
Class
III Director
|
2005
|
|||
|
Rodney
Hershberger
|
52
|
Class
III Director
|
2004
|
|||
|
Brett
N. Milgrim
|
40
|
Class
II Director
|
2003
|
|||
|
Ramsey
A. Frank
|
48
|
Class
II Director
|
2003
|
|||
|
Richard
D. Feintuch*
|
56
|
Class
II Director
|
2006
|
|||
|
Daniel
Agroskin
|
32
|
Class
II Director
|
2007
|
|||
|
Alexander
R. Castaldi
|
59
|
Class
I Director
|
2004
|
|||
|
M.
Joseph McHugh*
|
71
|
Class
I Director
|
2006
|
|||
|
William
J. Morgan*
|
62
|
Class
I Director
|
2007
|
|||
|
Randy
L. White
|
63
|
Class
I Director
|
2004
|
|||
* Denotes
director about whom the Board of Directors has made an affirmative determination
regarding independence.
Paul S. Levy, Director.
Mr. Levy became a director in 2004. Mr. Levy is a Managing Director of
JLL Partners, Inc., which he founded in 1988. Mr. Levy serves as a director
of several companies, including IASIS Healthcare, LLC, J. G. Wentworth, LLC,
Education Affiliates, Inc., ACE Cash Express, Inc., C.H.I. Overhead Doors, Inc.,
McKechnie Holdings, LLC, Medical Card System, Inc., and Builders FirstSource,
Inc.
Floyd F. Sherman, Director.
Mr. Sherman became a director in 2005. Mr. Sherman is President, Chief
Executive Officer, and a director of Builders FirstSource, Inc., a leading
supplier and manufacturer of structural and related building products for
residential new construction. Before joining Builders FirstSource,
Mr. Sherman spent 28 years at Triangle Pacific/Armstrong Flooring, the
last nine of which he served as Chairman and Chief Executive Officer.
Mr. Sherman has over 40 years of experience in the building products
industry. A native of Kerhonkson, New York and a veteran of the U.S. Army,
Mr. Sherman is a graduate of the New York State College of Forestry at
Syracuse University. He also holds an M.B.A. degree from
Georgia State University.
Rodney Hershberger,
President, Chief Executive Officer, and Director. Mr. Hershberger, a
co-founder of PGT Industries, Inc., has served the Company for nearly
30 years. Mr. Hershberger was named President and Director in 2004 and
became our Chief Executive Officer in March 2005. Mr. Hershberger also
became President of PGT Industries, Inc. in 2004 and was named Chief Executive
Officer of PGT Industries, Inc. in 2005. In 2003, Mr. Hershberger became
executive vice president and chief operating officer and oversaw the Company’s
Florida and North Carolina operations, sales, marketing, and engineering groups.
Previously, Mr. Hershberger led the manufacturing, transportation, and
logistics operations in Florida and served as vice president of customer
service.
Alexander R. Castaldi,
Director. Mr. Castaldi became a director in 2004. Mr. Castaldi
is a Managing Director of JLL Partners, Inc., which he joined in 2003. He was
most recently Executive Vice President, Chief Financial Officer and
Administration Officer of Remington Products Company. Previously,
Mr. Castaldi was Vice President and Chief Financial Officer at Uniroyal
Chemical Company. From 1990 until 1995, he was Senior Vice President and Chief
Financial Officer at Kendall International, Inc. During the 1980s,
Mr. Castaldi was also Vice President, Controller of Duracell, Inc. and
Uniroyal, Inc. Mr. Castaldi serves as a director of several companies,
including Medical Card System, Inc., J. G. Wentworth, LLC, Education Affiliates,
Inc., McKechnie Holdings, LLC, FC-Holdings, Inc. and C.H.I. Overhead Doors,
Inc.
M. Joseph McHugh,
Director. Mr. McHugh became a director in 2006. Mr. McHugh
served as President and Chief Operating Officer of Triangle Pacific Corp., a
leading manufacturer of hardwood flooring and kitchen cabinets, until his
retirement in 1998. Previously, Mr. McHugh held a variety of positions at
Triangle Pacific in operations and finance, including Vice President — Finance
and Treasurer, Executive Vice President — Finance and Administration, and Senior
Executive Vice President. Prior to joining Triangle Pacific, Mr. McHugh
served as Vice President — Corporate Finance at Eppler, Guerin & Turner,
Inc., a large, regional investment banking and brokerage firm based in Dallas,
TX, where he advised on initial public offerings, mergers and acquisitions,
private placements and venture capital
investments. Mr. McHugh currently serves on the Board of
Directors of Union Drilling, Inc.
William J. Morgan,
Director. Mr. Morgan became a director in 2007.
Mr. Morgan is a retired partner of the accounting firm KPMG LLP (“KPMG”)
where he served clients in the industrial and consumer market
practices. From 2004 until 2006, he was the Chairman of KPMG’s Audit
Quality Council and, from 2002 until 2006, he was a member of its Independence
Disciplinary Committee. Mr. Morgan was the Lead Partner for the
Chairman’s 25 Partner Leadership Development Program, and continues to provide
services to KPMG as an independent consultant to its leadership development
group and as Dean of the current Chairman’s 25 Partner Leadership Development
Program. He previously served as the Managing Partner of the
Stamford, Connecticut office and as a member of the board of directors for KMPG
LLP and KMPG Americas. Mr. Morgan is a member of the board of
directors of Barnes Group, Inc. and is also a member of its Audit and Finance
committees.
Randy L. White, Director and
Former Chief Executive Officer. Mr. White became a director in 2004.
Mr. White has served on the Board of Directors of our subsidiary since 1996
and became president in 1997. Mr. White resigned as president in 2005.
Before joining the Company, Mr. White spent almost 30 years with
Reynolds Metals Company in a variety of manufacturing positions, including
director of manufacturing for the aluminum can division. Mr. White earned
an M.S. in business from the University of Richmond.
Brett N. Milgrim, Director.
Mr. Milgrim became a director in 2003. Mr. Milgrim is a director of
Builders FirstSource, Inc., McKechnie Holdings, LLC and C.H.I. Overhead Doors,
Inc. and is a Managing Director of JLL Partners, Inc., which he joined in
1997.
Ramsey A. Frank, Director.
Mr. Frank became a director in 2003. Mr. Frank is a Managing Director
of JLL Partners, Inc., which he joined in 1999. From January 1993 to July 1999,
Mr. Frank was a Managing Director at Donaldson, Lufkin & Jenrette,
Inc., where he headed the restructuring group and was a senior member of the
leveraged finance group. Mr. Frank serves as a director of several
companies, including Education Affiliates, Inc., C.H.I. Overhead Doors, Inc.,
Builders FirstSource, Inc., Patheon, Inc., FC-Holdings, Inc. and Medical Card
System, Inc.
Richard D. Feintuch,
Director. Mr. Feintuch became a director in 2006.
Mr. Feintuch was a partner of the law firm Wachtell, Lipton,
Rosen & Katz from 1984 until his retirement in 2004, specializing in
mergers and acquisitions, corporate finance, and the representation of creditors
and debtors in large restructurings. Mr. Feintuch earned a B.S. in
Economics from the Wharton School of the University of Pennsylvania and a
J.D. from New York University School of Law.
Daniel Agroskin,
Director. Mr. Agroskin became a director in 2007.
Mr. Agroskin is a Principal at JLL Partners, Inc., which he joined in 2005.
Prior to joining JLL, he worked at JP Morgan Partners and in Merrill Lynch’s
Mergers and Acquisitions Group. Mr. Agroskin is a graduate of Stanford
University and the Wharton School of the University of
Pennsylvania.
The
mission of the Board of Directors is to provide strategic guidance to the
Company’s management, to monitor the performance and ethical behavior of the
Company’s management, and to maximize the long-term financial return to the
Company’s stockholders, while considering and appropriately balancing the
interests of other stakeholders and constituencies. The Board is constituted of
eleven directors.
The Board
of Directors applies standards in affirmatively determining whether a director
is “independent,” in compliance with applicable SEC rules and the rules and
listing standards of The NASDAQ Stock Market LLC (the “NASDAQ”). The
Board of Directors, in applying the above-referenced standards, has
affirmatively determined that Messrs. Feintuch, McHugh, Morgan and Sherman are
“independent” directors. As part of the Board’s process in making such
determination, it also determined that each such director has no other “material
relationship” with the Company that could interfere with his ability to exercise
independent judgment.
In
addition to Messrs. Feintuch, McHugh, Morgan and Sherman, our Board of Directors
includes the following directors who are not independent: one management
director, Mr. Hershberger, who is the Company’s President and CEO; five
directors (Chairman Levy and Messrs. Agroskin, Castaldi, Frank and Milgrim)
who are affiliated with JLL Partners; and Mr. White.
As part
of its annual evaluation of director independence, the Board examined (among
other things) whether any transactions or relationships exist currently (or
existed during the past three years), between each independent director and the
Company, its subsidiaries, affiliates, equity investors, or independent auditors
and the nature of those relationships under the relevant NASDAQ and SEC
standards. The Board also examined whether there are (or have been within the
past year) any transactions or relationships between each independent director
and any executive officer of PGT or its affiliates. As a result of this
evaluation, the Board has affirmatively determined that each independent
director is independent under those criteria. Independent directors meet in
regularly scheduled executive sessions outside the presence of other directors
and management representatives. Interested parties, including stockholders, may
communicate with the Chairman of the Board of Directors or the independent
directors as a group through the process described in this Proxy Statement under
the heading “Corporate Governance — Director Nomination Process - Policy on
Stockholder Recommendations for Director Candidates and Stockholder-Director
Communication.”
In 2008,
including both regularly scheduled and special meetings, our Board of Directors
met a total of eight (8) times, the Audit Committee met a total of six (6) times
and the Compensation Committee met a total of three (3) times. During 2008, four
(4) of the meetings of the Board of Directors were attended by 100% of the
Company’s directors, three (3) were attended by all but one director and one (1)
was attended by all but three directors. Additionally, 100% of the members of
the Audit Committee attended all of the meetings of the Audit Committee held
during the period in which they served on such committee and 100% of the members
of the Compensation Committee attended all of the meetings of the Compensation
Committee held during the period in which they served on such committee.
Pursuant to the PGT, Inc. Policy on Director Attendance at the Annual Meeting of
Stockholders, which can be obtained without charge in the “Investors” section of
our Company website at www.pgtindustries.com
under the heading “Corporate Governance,” all directors are strongly encouraged
to attend the annual meeting in person. Any director who is unable to attend an
annual meeting of stockholders is expected to notify the Chairman of the Board
in advance of such meeting. All members of the Company’s Board of Directors,
including each nominee for election as a director and each director whose then
current term of office continued after the meeting, attended our 2008 annual
meeting of stockholders held on July 23, 2008. Item 407(b)(1) requires the
Company name each incumbent director who attended fewer than 75% of the
aggregate of the total meetings of the board of directors and the total meetings
held by all committees on which such director served. I don’t think
our current disclosure is clear re: whether any director attended fewer than 75%
of all meetings. If none of the directors attended fewer than 75% of
the aggregate of the total meetings of the board and applicable committee
meetings, we should make such an affirmative statement.
As of the
date hereof, we are a “Controlled Company” for purposes of Rule 4350(c)(5)
of the NASDAQ Marketplace Rules (the “NASDAQ Rules”) by virtue of the fact that
our majority stockholder holds approximately 53% of the voting power of our
common stock. As a Controlled Company, we are exempt from the provisions of the
NASDAQ Rules that require us to have a board of directors comprised of a
majority of independent directors and to maintain compensation and nominating
committees comprised solely of independent directors. Accordingly, the Board
does not have a standing nominating committee. The Board has two standing
committees: the Audit Committee and the Compensation Committee. The Board
believes that in light of its current status as a Controlled Company and its
adoption of the Policy Regarding Processes for Identifying and Evaluating
Director Nominees, it has in place adequate processes to identify, evaluate,
select and nominate qualified director candidates. If we cease to be a
Controlled Company under the NASDAQ Rules, we will come into full compliance
with all of the requirements thereof within the applicable transition periods
provided by the NASDAQ Rules.
The Audit
Committee’s purpose is to assist the Board of Directors in fulfilling its
responsibilities with respect to the oversight of the accounting and financial
reporting practices of PGT, including oversight of the integrity of our
financial statements and compliance with legal and regulatory requirements, the
qualifications and independence of our independent registered public accounting
firm, and the performance of our independent registered public accounting firm.
The Audit Committee also is charged with preparation of an audit committee
report, retention and termination of our independent registered public
accounting firm, annual review of the report of our independent registered
public accounting firm, and discussion with our independent registered public
accounting firm of the audited and quarterly financial statements of PGT and any
audit problems or difficulties and management’s response thereto. The Audit
Committee Charter can be obtained without charge in the “Investors” section
of our Company website at www.pgtindustries.com
under the heading “Corporate Governance.”
The Audit
Committee is comprised of three independent directors (as that term is defined
by the NASDAQ listing standards and SEC regulations), Messrs. Feintuch,
McHugh and Morgan. Mr. McHugh serves as the Chairman of the Audit
Committee. The Audit Committee met six times during 2008. During each meeting,
the Audit Committee met privately with the Company’s independent registered
public accounting firm. The Board of Directors has: (i) affirmatively determined
that all Audit Committee members are financially literate and possess “financial
sophistication” as defined by the NASDAQ listing standards; (ii) has designated
Messrs. McHugh and Morgan, as audit committee “financial experts” as defined by
SEC rules; and (iii) determined that Messrs. Feintuch, McHugh and Morgan
meet the independence standards of both the SEC rules and the NASDAQ Rules for
Audit Committee members.
The
Compensation Committee determines the compensation of our executive officers,
including our Chief Executive Officer and Chief Financial
Officer. The Compensation Committee also reviews and reassesses
the compensation paid to members of our Board for their service on our Board and
Board committees and recommends any changes in compensation to the full Board
for its approval. In addition, the Compensation Committee authorizes all stock
option and other equity-based awards to employees and non-employee directors
under our stock option and equity incentive plans. The Compensation Committee
met three times during 2008. For information about our compensation program, the
role of the Compensation Committee and the engagement of compensation
consultants in setting executive compensation, see "Executive Compensation -
Compensation Discussion and Analysis." The Compensation Committee charter can be
obtained without charge in the “Investors” section of our Company website at
www.pgtindustries.com
in the section titled “Corporate Governance.”
The
Compensation Committee is comprised of three directors, Messrs. Castaldi,
Feintuch and Sherman, of whom Messrs. Feintuch and Sherman are independent
directors (as that term is defined by the NASDAQ listing standards and SEC
regulations). Mr. Castaldi serves as Chairman of the Compensation Committee and,
given his experience and knowledge of the Company, the Board of Directors
determined that the service of Mr. Castaldi on the Compensation Committee is in
the best interests of the Company and its stockholders.
Non-management
directors, other than those affiliated with JLL Partners, Inc., (currently
Messrs. Feintuch, McHugh, Morgan, Sherman, and White) receive the following
compensation: (a) an annual cash retainer of $40,000; (b) a grant
under the Company’s 2006 Equity Incentive Plan of restricted shares of common
stock with a value at the time of issuance of approximately $40,000 per
year for each year of service as a director; (c) a fee of $1,000 per
day for each meeting of the Board of Directors (or committee thereof) attended;
(d) an annual cash retainer of $5,000 for each committee on which they
serve; and (e) reimbursement of reasonable travel expenses. We have not paid,
and currently do not intend to pay, compensation to individuals serving on our
Board who are employees or affiliates of the Company or JLL Partners, Inc. for
their service as directors.
There
were no material proceedings to which any of our directors, executive officers
or affiliates, or any owner of record or beneficially of more than five percent
of our common stock (or their associates), is a party adverse to the Company or
its subsidiary or has a material interest adverse to the Company or its
subsidiary.
We are
committed to conducting our business in a way that reflects best practices, as
well as the highest standards of legal and ethical conduct. We want to be a
company of integrity and to be perceived as such by everyone who comes in
contact with us. To that end, the Board of Directors has approved a
comprehensive system of corporate governance documents. These documents meet or
exceed the requirements established by the NASDAQ listing standards and by SEC
rules and are reviewed periodically and updated as necessary to reflect changes
in regulatory requirements and evolving oversight practices. These policies
embody the principles, policies, processes, and practices followed by the Board,
executive officers and employees in governing the Company, and serve as a
flexible framework for sound corporate governance.
Properly
reflecting PGT’s desire and commitment to conducting business in the highest
ethical and legal standards, on June 2, 2006 our Board of Directors adopted: (i)
a Code of Business Conduct and Ethics that applies to the Company’s directors,
officers and employees, (ii) a Supplemental Code of Ethics for our Chief
Executive Officer, President, and Senior Financial Officers, and (iii) a Policy
on Insider Trading. Our Compliance Committee, comprised of representatives from
our Legal, Finance, and Human Resources departments, administers our Code of
Business Conduct and Ethics, and our General Counsel administers our
Supplemental Code of Ethics and our Policy on Insider
Trading.
The
Company’s Code of Business Conduct and Ethics includes provisions ranging from
restrictions on gifts and respect for colleagues to conflicts of interest and
fraud. The Company’s Policy on Insider Trading relates to the confidentiality of
and prohibition on the use of material non-public information an employee may
come to possess in the course of conducting the Company’s business. Upon
employment with the Company, all employees are required to affirm in writing
their acceptance of these codes. Copies of these codes can be obtained without
charge in the “Investors” section of our Company website at www.pgtindustries.com
in the section titled “Corporate Governance” or by written request to the
Company at the address appearing on the first page of this proxy statement to
the attention of Director of Investor Relations.
Violations
of our Supplemental Code of Ethics may be reported to the Audit Committee.
Copies of the code and any waiver or amendment to such code can be obtained
without charge in the “Investors” section of our Company website at www.pgtindustries.com
in the section titled “Corporate Governance” or by written request to the
Company at the address appearing on the first page of this proxy statement to
the attention of Director of Investor Relations.
Our
employees are encouraged to anonymously report any suspected violations of laws,
regulations, unethical business practices, and/or the Code of Business Conduct
and Ethics, via a web-based reporting system or a continuously monitored
hotline.
In
addition, within five business days of: (i) any amendment to our Code
of Business Conduct and Ethics or our Supplemental Code of Ethics, or (ii)
the grant of any waiver, including an implicit waiver, from a provision of one
of these policies to one of these officers that relates to one or more of the
items set forth in Item 406(b) of Regulation S-K, we will provide
information regarding any such amendment or waiver (including the nature of any
waiver, the name of the person to whom the waiver was granted and the date of
the waiver) in the “Investors” section of our Company website at www.pgtindustries.com
in the section titled “Corporate Governance.” In addition, we will
disclose any amendments and waivers to our Code of Business Conduct and Ethics
and our Supplemental Code of Ethics as required by the listing standards of the
NASDAQ Global Market.
By-law
Provisions for Stockholder Recommendations for Director Candidates
PGT,
Inc.’s By-laws provide that no director may be nominated by a stockholder for
election at an annual meeting unless the stockholder (a) has delivered to
the Corporate Secretary within the time limits described in the By-laws a
written notice containing the information specified in the By-laws and
(b) was a stockholder of record at the time such notice was delivered to
the Corporate Secretary. Accordingly, in order for a stockholder’s nomination of
a person for election to the Board of Directors to be considered by the
stockholders at the 2010 annual meeting in accordance with the Company’s
By-laws, the required written notice must be received by our Corporate Secretary
on or after January 13, 2010 but no later than February 12, 2010. Only
individuals who are nominated in accordance with the procedures set forth in the
By-laws are eligible to stand for election as directors at a meeting of
stockholders and to serve as directors. A copy of the By-laws can be
obtained without charge in the “Investors” section of our Company website at
www.pgtindustries.com
in the section titled “Corporate Governance” or by written request to the
Corporate Secretary, 1070 Technology Drive, North Venice, Florida
34275.
Policy
on Stockholder Recommendations for Director Candidates and Stockholder-Director
Communication
The Board
of Directors has adopted a Policy on Stockholder Recommendations for Director
Candidates and Stockholder-Director Communication which sets forth the process
by which the Board will consider candidates for director recommended by
stockholders in accordance with the Company’s By-laws. A current copy of the
Policy on Stockholder Recommendations for Director Candidates and
Stockholder-Director Communication is available in the “Investors” section of
our Company website at www.pgtindustries.com
in the section titled “Corporate Governance” or by written request to the
Corporate Secretary, 1070 Technology Drive, North Venice, Florida 34275. To have
a candidate considered by the Board, a stockholder must submit the
recommendation in writing and must include the following
information:
· The name
and record address of the stockholder and evidence of such stockholder’s
ownership of the Company’s stock, including the class or series and number of
shares owned;
· Whether
the stockholder intends to appear in person or by proxy at the meeting to make
the nomination;
· A
description of all arrangements or understandings between the stockholder and
the nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination is made;
· The name,
age, residence, business address and principal occupation of the candidate, the
class or series and number of shares of Company stock, if any, owned
beneficially or of record by the candidate, and the candidate’s consent to be
named as a director if selected and nominated by the
Board; and
· Any other
information relating to either the stockholder or the candidate that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
The
stockholder recommendation and information described above must be sent to the
Corporate Secretary at 1070 Technology Drive, North Venice, Florida 34275 and
must be delivered to or mailed and received by the Corporate Secretary
(a) in the case of an annual meeting, not less than ninety (90) days
nor more than one hundred twenty (120) days prior to the anniversary date
of the immediately preceding annual meeting of stockholders; provided, however,
that in the event that the annual meeting is called for a date that is not
within thirty (30) days before or after such anniversary date, notice by
the stockholder in order to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on which such notice
of the date of the annual meeting was mailed or such public disclosure of the
date of the annual meeting was made, whichever first occurs; and (b) in the
case of a special meeting of stockholders called for the purpose of electing
directors, not later than the close of business on the tenth (10th) day
following the day on which notice of the date of the special meeting was mailed
or public disclosure of the date of the special meeting was made, whichever
first occurs.
The
policy also describes the process for stockholders to send communications to the
Board. Stockholders, and other interested parties, may contact any member (or
all members) of the Board (including the non-management directors as a group,
any Board committee or any chair of any such committee) by mail at the address
below, electronically through the “Investors” section of our Company’s website
at www.pgtindustries.com
in the section titled “Corporate Governance” by clicking on “Contact the Board,”
or by calling the Company’s independent, toll-free Compliance Line at
877-483-7137. To communicate with the Board of Directors, any individual
directors or any group or committee of directors, correspondence should be
addressed to the Board of Directors or any such individual directors or group or
committee of directors by either name or title. All such correspondence should
be sent “c/o Corporate Secretary” at 1070 Technology Drive, North Venice,
Florida 34275. All communications received as set forth above will be opened by
the office of our General Counsel for the sole purpose of determining whether
the contents represent an appropriate message to our directors. Any contents
that are not in the nature of advertising, promotions of a product or service,
or patently offensive material will be forwarded promptly to the addressee. In
the case of communications to the Board or any group or committee of directors,
the General Counsel’s office will make sufficient copies of the contents to send
to each director who is a member of the group or committee to which the envelope
or e-mail is addressed.
Each
member of our Board of Directors participates in the consideration of director
nominees. The Board of Directors has adopted a Policy Regarding Processes for
Identifying and Evaluating Director Nominees that describes the process followed
by the Board to identify, evaluate, select and nominate director candidates. A
copy of the Policy Regarding Processes for Identifying and Evaluating Director
Nominees is available without charge in the “Investors” section of our Company
website at www.pgtindustries.com
under the heading “Corporate Governance.”
The Board
of Directors believes that the minimum qualifications for serving as a director
of the Company are that a nominee demonstrate, by significant accomplishment in
his or her field, an ability to make a meaningful contribution to the Board’s
oversight of the business and affairs of the Company and have a record and
reputation for honest and ethical conduct in both his or her professional and
personal activities. Nominees for director shall be those people who the Board
believes, after taking into account, among other things, their skills,
expertise, integrity, character, judgment, age, independence, corporate
experience, length of service, conflicts of interest and commitments, including,
among other things, service on the boards (or comparable governing bodies) of
other public companies, private business companies, charities, civic bodies or
similar organizations and other qualities, will enhance the Board’s ability to
manage and direct, in an effective manner, the affairs and business of the
Company, including, when applicable, to enhance the ability of committees of the
Board to fulfill their duties and satisfy any independence requirements imposed
by law, regulation or NASDAQ listing requirements.
The Board
will identify potential nominees by asking current directors and executive
officers to notify the Board if they become aware of persons meeting the
criterion described above or by engaging a firm or firms that specialize in
identifying director candidates. The Board also will consider candidates
recommended by stockholders as described above.
Notwithstanding
the foregoing, so long as the Company continues to be a Controlled Company
(within the meaning of NASDAQ Rule 4350(c)(5)), the Board will be guided by
the recommendations of the Company’s majority stockholder, in its nomination
process.
The Audit
Committee Charter, available in the “Investors” section of our Company’s website
at www.pgtindustries.com under the
heading “Corporate Governance”, tasks the Audit Committee with the
responsibility of appointing, compensating, retaining and overseeing the work of
the Company’s independent registered public accounting firm, and defines the
principles and procedures followed by the Audit Committee in overseeing the
annual audit, quarterly reviews, financial reporting process and internal
controls.
The Audit
Committee is responsible for pre-approving all audit services and permitted
non-audit services (including the fees and retention terms) to be performed for
us by Ernst & Young LLP prior to their engagement for such services.
The Audit Committee has adopted a pre-approval policy pursuant to which the
Audit Committee establishes detailed pre-approved categories of non-audit
services that may be performed by Ernst & Young LLP during the fiscal
year, subject to dollar limitations set by the Audit Committee. All of the fees
paid to Ernst & Young LLP and corresponding services provided under the
categories Audit-Related Fees, Tax Fees and All Other Fees were pre-approved by
the Audit Committee, and none of such fees were approved in reliance on the de
minimis exception established by the Securities and Exchange
Commission.
In
accordance with the Sarbanes-Oxley Act of 2002, the Audit Committee also has
established procedures for the receipt, retention, and treatment of complaints
regarding accounting, internal accounting controls, or auditing matters and for
the confidential, anonymous submission by our employees of concerns regarding
accounting or auditing matters.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit
Committee appointed Ernst & Young LLP, independent registered public
accounting firm, to audit the consolidated financial statements of the Company
for the 2009 fiscal year ending January 2, 2010. As a matter of good
corporate governance, the Company’s stockholders will be requested to ratify the
Audit Committee’s selection at the Meeting. Ernst & Young LLP has
audited the Company’s consolidated financial statements since 2001.
Although
there is no requirement that Ernst & Young LLP's appointment be terminated
if the ratification fails, the Audit Committee will consider the appointment of
other independent registered public accounting firms if the stockholders choose
not to ratify the appointment of Ernst & Young LLP. The Audit Committee may
terminate the appointment of Ernst & Young LLP as our independent registered
public accounting firm without the approval of the stockholders whenever the
Audit Committee deems such termination appropriate.
Amounts
paid by us to Ernst & Young LLP for audit and non-audit services rendered in
2008 and 2007 are disclosed on page 38.
Ernst
& Young LLP has affirmed that they are not aware of any relationships
between Ernst & Young LLP and the Company that may reasonably be thought to
bear on their independence.
The Audit
Committee approves the annual audit fee of the Company’s independent auditors.
The Audit Committee also establishes pre-approved limits for which the Company’s
management may engage the Company’s independent auditors for specific services.
Any work which exceeds these pre-approved limits in a quarter requires the
advance approval of the Audit Committee. Each quarter, the Audit Committee
reviews and approves all work done by the independent auditors during the
previous quarter and establishes any pre-approved limits for the current
quarter. All fees for fiscal 2008 were pre-approved by the Audit
Committee.
THE
BOARD OF DIRECTORS RECOMMENDS VOTING “FOR” THE RATIFICATION OF THE APPOINTMENT
OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM.
The
following table sets forth information regarding the beneficial ownership of our
common stock as of April 14, 2009, unless otherwise noted, for (a) each
person who is known by us to own beneficially more than 5% of the outstanding
shares of our common stock, (b) each of our incumbent directors named in
Proposal One—Election of Directors above, (c) each of our named executive
officers named in the Summary Compensation Table below, and (d) all of our
incumbent directors and executive officers as a group.
The
percentages of shares outstanding provided in the table below are based on
35,688,584 voting shares outstanding as of April 14, 2009. Beneficial ownership
is determined in accordance with SEC rules and generally includes voting or
investment power with respect to securities. Unless otherwise indicated, each
person or entity named in the table has sole voting and investment power, or
shares voting and investment power with his or her spouse, with respect to all
shares of stock listed as owned by that person. The number of shares shown does
not include the interest of certain persons in shares held by family members in
their own right. Shares issuable upon the exercise of options that are
exercisable within 60 days of April 14, 2009 are considered outstanding for the
purpose of calculating the percentage of outstanding shares of our common stock
held by the individual, but not for the purpose of calculating the percentage of
outstanding shares held by any other individual.
|
Name and Address of Beneficial Owner
(1)
|
Number of Shares of Common Stock Beneficially
Owned
|
Percentage of Common Stock
Outstanding
|
||||||
|
Beneficial
Owners of More Than 5%:
|
||||||||
|
JLL
Partners Fund IV, L.P.
|
18,758,934 |
(2)
(5)
|
52.6% | |||||
|
Wellington
Management Company, LLP
|
2,162,781 |
(3)
|
6.1% | |||||
|
Adage
Capital Partners, L.P.
|
2,731,053 |
(4)
|
7.7% | |||||
|
Paul
S. Levy
|
18,758,934 |
(5)
|
52.6% | |||||
|
Non-Employee
Directors and Nominees:
|
||||||||
|
Paul
S. Levy
|
18,758,934 |
(5)
|
52.6% | |||||
|
Daniel
Agroskin
|
1,500 |
(5)
|
* | |||||
|
Alexander
R. Castaldi
|
- |
(5)
|
* | |||||
|
Richard
D. Feintuch
|
31,268 | * | ||||||
|
Ramsey
A. Frank
|
- |
(5)
|
* | |||||
|
M.
Joseph McHugh
|
15,981 | * | ||||||
|
Brent
N. Milgrim
|
- |
(5)
|
* | |||||
|
William
J. Morgan
|
14,779 | * | ||||||
|
Floyd
F. Sherman
|
14,529 |
(6)
|
* | |||||
|
Randy
L. White
|
350,761 |
(7)
|
* | |||||
|
Named
Executive Officers:
|
||||||||
|
Rodney
Hershberger
|
1,055,867 |
(8)
|
3.0% | |||||
|
Jeffrey
T. Jackson
|
208,457 |
(9)
|
* | |||||
|
Mario
Ferrucci III
|
92,705 |
(10)
|
* | |||||
|
David
McCutcheon
|
819,818 |
(11)
|
2.3% | |||||
|
C.
Douglas Cross
|
59,827 |
(12)
|
* | |||||
|
Directors
and executive officers as a group
|
21,608,606 |
(13)
|
60.5% | |||||
|
*
Percentage does not exceed one percent of the total outstanding
class.
|
||||||||
|
(1)
Unless otherwise indicated, the business address of each person is PGT,
Inc., 1070 Technology Drive, North Venice, Florida,
34275.
|
|
(2)
The information reported is based on a Schedule 13D/A dated September 16,
2008, filed with the SEC, in which JLL Partners Fund IV, L.P.; JLL
Associates IV, L.P., the general partner of JLL Partners Fund IV, L.P.;
JLL Associates G.P. IV, L.L.C., the general partner of JLL Associates IV,
L.P.; and Paul S. Levy, the managing member of JLL Associates G.P. IV,
L.L.C. (collectively, the “JLL Reporting Persons”) reported that at
September 16, 2008, the JLL Reporting Persons had shared voting power and
shared dispositive power over 18,758,934 shares. The principal business
address of the JLL Reporting Persons is 450 Lexington Avenue, 31st Floor,
New York, New York 10017.
|
|
(3)
The information reported is based on a Schedule 13G/A dated February 17,
2009, filed with the SEC, in which Wellington Management Company, LLP
(“Wellington”) reported that at December 31, 2008, Wellington had shared
voting power over 1,278,484 shares and shared dispositive power over
2,162,781 shares in its capacity as investment advisor to clients of
Wellington. The principal business address of Wellington is 75 State
Street, Boston, Massachusetts
02109.
|
|
(4)
The information reported is based on a Schedule 13G/A dated February 17,
2009, filed with the SEC, in which Adage Capital Partners GP, L.L.C.
("ACPGP") reported that at December 31, 2008, Adage Capital Partners, L.P.
("ADP"), who has ACPGP as a general partner, had shared dispositive and
voting power over 2,731,053 shares. The principal business address of
ACPGP and ACP is 200 Clarendon Street, 52nd Floor, Boston, Massachusetts
02116.
|
|
(5)
JLL Partners Fund IV, L.P. is the direct record and beneficial owner of
18,758,934 shares of PGT, Inc.’s common stock. Messrs. Agroskin, Castaldi,
Frank, Levy, and Milgrim are all affiliates of JLL Partners, Inc. Mr. Levy
is the managing member of JLL Associates G.P. IV, L.L.C., the general
partner of JLL Associates IV, L.P., which in turn is the general partner
of JLL Partners Fund IV, L.P. As a result, Mr. Levy may be deemed to
beneficially own all of the shares of common stock owned by JLL Partners
Fund IV, L.P., and to have shared voting or investment power over the
shares of common stock owned by JLL Partners Fund IV, L.P. Messrs.
Agroskin, Castaldi, Frank, and Milgrim disclaim any beneficial ownership
of our common stock. Mr. Levy has a pecuniary interest in only
a portion of the shares set forth
herein.
|
|
(6)
Includes options outstanding to acquire 5,958 shares of common stock
exercisable currently or within 60 days of April 14,
2009.
|
|
(7)
Includes options outstanding to acquire 7,547 shares of common stock
exercisable currently or within 60 days of April 14,
2009.
|
|
(8)
Includes options outstanding to acquire 210,845 shares of common stock
exercisable currently or within 60 days of April 14,
2009.
|
|
(9)
Includes options outstanding to acquire 50,886 shares of common stock
exercisable currently or within 60 days of April 14,
2009.
|
|
(10)
Includes options outstanding to acquire 17,992 shares of common stock
exercisable currently or within 60 days of April 14,
2009.
|
|
(11)
Includes options outstanding to acquire 88,717 shares of common stock
exercisable currently or within 60 days of April 14,
2009.
|
|
(12)
Includes options outstanding to acquire 28,137 shares of common stock
exercisable currently or within 60 days of April 14,
2009.
|
|
(13)
This group is comprised of 16 individuals. Includes options outstanding to
acquire 551,414 shares of common stock by all current directors and
executive officers exercisable currently or within 60 days of April 14,
2009.
|
We know
of no arrangements, the operation of which may at a subsequent date result in
the change in control of the Company.
Section 16(a)
of the Securities Exchange Act of 1934 requires our executive officers,
directors, and persons who beneficially own more than 10% of a registered class
of our equity securities, to file with the Securities and Exchange Commission
(“SEC”) reports of ownership and changes in ownership of the Company’s equity
securities. Executive officers, directors, and beneficial owners of greater than
10% of our outstanding securities are required by SEC regulations to provide us
with copies of all Section 16(a) forms that they file. Based solely on
review of the copies of such forms furnished to us and written representations
from our executive officers and directors that no other reports were required,
we believe that through January 3, 2009, all of our executive officers,
directors and greater than 10% beneficial owners complied with all
Section 16(a) filing requirements applicable to them, except that one share
purchase transaction by Mr. McHugh was not reported on a timely filed Form 4,
but such transaction was subsequently reported on a Form 4, and all such
transactions are reflected herein.
COMPENSATION
DISCUSSION AND ANALYSIS
Our goal
in establishing the executive compensation structure is to attract, retain and
reward key leaders who drive both near-term and long-term value for our
stockholders. Our compensation structure is designed to reward leadership
skills, operating performance and financial
accomplishments. We also believe that successful
compensation programs for executive officers and other key employees, including
the named executive officers, must further the following primary
objectives:
|
·
|
ensure
employee interests are aligned with the enhancement of stockholder
value;
|
|
·
|
attract
and retain quality leaders;
|
|
·
|
reward
consistent and superior performance for exemplary company and
individual performance;
and
|
|
·
|
provide
incentives to enhance future performance and increased levels of
responsibility.
|
All
compensation policies and decisions are designed to reward employees, including
the named executive officers, who demonstrate the capacity to make significant
contributions to our operational, financial and competitive performance, thereby
furthering the first primary objective referred to above. Key factors to
increase or decrease compensation include:
|
·
|
the
nature, scope and level of the individual’s
responsibilities;
|
|
·
|
our
overall performance and profitability, which we primarily measure by net
sales, EBITDA, and return on operating
investment;
|
|
·
|
our
long-term stock price performance and total return to stockholders;
and
|
|
·
|
the employee’s
performance compared to goals and
objectives.
|
Compensation
to our named executive officers is intended to be competitive with that of
similar companies. As part of our assessment, we look to the compensation paid
to individuals with similar responsibilities at peer companies. Because peer
selection is somewhat difficult due to the lack of publicly-traded companies
with which we compete and the lack of available data for privately-held
competitors, we focus primarily on compensation levels within our relevant labor
market to ensure that PGT’s compensation arrangements are in line with companies
of its size.
Based on
our assessment, we believe our total direct annual compensation to senior
management (including our named executive officers), comprised of total cash
compensation and the annualized expected value of long-term incentive awards is
generally at or below the level of total direct compensation for our peer
group.
The
Compensation Committee of the Board of Directors (“Compensation Committee”) has
the primary responsibility for assisting the Board in the development,
evaluation, and approval of our executive compensation programs. Our
President and our Executive Vice President, assist the Compensation Committee in
administering our compensation programs. Matters considered by
the Compensation Committee such as competitive market information, current
industry trends, compensation practices and guidelines are also based on
research by independent compensation consultants. In general, the
roles are discussed below; additional details regarding the roles of each are
discussed throughout this Compensation Discussion and Analysis
section.
Compensation Committee - As
discussed above under “Information Regarding the Board and its Committees –
Controlled Company Exemption and Committees” on page 10, our Compensation
Committee was formed in 2007. As such, until the Compensation
Committee was formed, the Board maintained direct authority and responsibility
for the review, evaluation and approval of the compensation structure and level
for all of our executive officers. The Compensation Committee’s primary
responsibilities include: (1) establishing, in consultation with
management, the Company’s general compensation and incentive philosophy; (2)
establishing, reviewing and recommending approval of the Chief Executive
Officer's annual compensation, and evaluating his performance in light of the
goals and objectives of the Company’s executive compensation plans, (3)
evaluating the appropriate level of compensation for Board and committee service
by members of the Board, (4) reviewing incentive compensation programs to ensure
unnecessary risk is not encouraged, and (5) overseeing the long-term incentive
plan, the annual cash incentive plan and any other equity-based
awards.
Management - In collaboration
with the Compensation Committee and considering information provided by the
compensation consultants, our President and our Executive Vice President
coordinate the annual review of the compensation programs for senior management,
including certain named executive officers. Such review includes an evaluation
of individual and Company performance, competitive practices and trends, and
various compensation issues. Based on the outcomes of this review, management
makes recommendations to the Compensation Committee regarding the compensation
of each of the named executive officers, other than the Chief Executive
Officer.
Our
senior leadership team (which includes representation from each of the Company’s
major functional areas) sets our strategic business and operational objectives
and strives to design and develop compensation programs that motivate leadership
behaviors consistent with such objectives.
Compensation Consultant - In
2008, the Compensation Committee retained the services of Deloitte Consulting,
LLP (“Deloitte”), a compensation consultant, to assist in evaluating and
discussing our compensation structure. The role of the consultant was to advise
the Compensation Committee and management in the executive compensation design
process, provide independent compensation data and analysis to facilitate the
annual review of the Company’s compensation programs, and advise the
Compensation Committee in its oversight role. Deloitte attended meetings with
our Compensation Committee and management as needed. Specifically, Deloitte
analyzed our then-current incentive compensation arrangements for the executive
team, including each of the named executive officers; and utilized a group of
peer companies in recommending an appropriate structure for incentive
compensation, including a long-term incentive plan through which the interests
of management are directly aligned with those of our stockholders.
When
evaluating and setting the 2008 executive compensation relative to our
performance, the Compensation Committee and management took into account the
economic environment in which we are currently operating, the national credit
crisis, and sensitivity regarding executive pay. We believe our
programs have a balanced approach and properly reflect our views that, in
challenging times such as these, senior management, including the named
executive officers, should sacrifice in the interest of the Company with the
expectation that, in more profitable years, such sacrifices will be rewarded.
Recent, tangible examples of such sacrifices are evidenced by the fact that (i)
in the past two years, the Company has decreased its employment count by 35% and
its senior management team by almost 50%; (ii) in fiscal years 2007 and 2008,
the average salary increase (after factoring in increases solely due to
acquiring significant additional responsibilities) for members of the Company’s
senior management team was approximately 1%; and (iii)all salaried employees,
including the named executive officers, agreed to a 16% salary decrease
throughout the Company’s second and third quarters of 2009. The aggregate effect
of these actions has helped to strengthen our financial position, better
enabling us to compete in the long-term.
The
following items summarize the essential elements used as compensation tools to
reward and retain our named executives during fiscal 2008:
·
Annual Base
Salary. Base salaries for our executives depend on the scope of
their responsibilities and performance. Our objectives are to target
annual base salary at the median level and to make it competitive, when taken in
conjunction with the other compensatory elements;
·
Annual Cash
Incentive Plan. For each executive, we use annual cash bonuses for
the achievement of annual company and individual performance
objectives;
·
Long-Term
Equity-Based Incentives. Our long-term equity incentive program is
designed to recognize leadership accomplishments, scope of responsibilities and
performance, retain our executives and align their interest with long-term
stockholder value. We combine grants of both restricted stock and
stock options to effectively focus our executives on delivering long-term value
for PGT and its stockholders; and
·
Executive Benefit
and Perquisites. As the Company seeks to maintain a classless
culture in our facilities and operations, our executive compensation
program remains relatively free of executive benefits and perquisites. Such
benefits and perquisites which do exist, however, are described
below.
Our
Compensation Committee separately considers the salary and bonus of our
President. In determining his annual compensation, our Compensation
Committee considers the highly competitive industry in which we operate and the
unique experience he brings to the position as well as his contributions to our
long-term performance.
For our
other named executive officers, our President provides our Compensation
Committee with recommendations regarding compensation. Our Compensation
Committee reviews such recommendations and approves annual compensation for
named executive officers, consisting of base salary and target bonus (discussed
below), on an annual basis. Our Compensation Committee may request
additional information and analysis and ultimately determines in its discretion,
based on its own analysis and judgment and the recommendations of the President,
whether to approve any recommended changes in compensation.
Our goal
is to pay each named executive officer a base salary sufficient to remain
competitive in the market. Our base salaries are less performance based
than our annual cash bonuses and long term equity-based incentives. See the
“Summary Compensation Table” for a listing of our named executive
officers. At the end of fiscal 2008, Mr. Hershberger’s base salary was
$360,000 per year after an increase of $35,000 effective on August 1,
2008. At the end of fiscal 2008, Mr. Jackson’s base salary was
$300,000 per year after an increase of $27,000 effective on August 1, 2008. At
the end of fiscal 2008, Mr. Ferrucci’s base salary was $205,000 per year; Mr.
McCutcheon’s base salary was $185,000 per year; and Mr. Cross’s base salary was
$218,400 per year; none of which were increased from the prior
year. These salary increases were largely reflective of the Board of
Directors’ perception of individual performance, competitiveness of salary in
the marketplace and inflation adjustments. Base salary paid to the named
executive officers in 2008 constituted approximately the following percentages
of their total compensation as set forth in the Summary Compensation
Table: Mr. Hershberger: 85.1%; Mr. Jackson: 42.6%; Mr. Ferrucci: 41.3%;
Mr. McCutcheon: 76.3%; and Mr. Cross: 67.4%.
In order
to provide incentives for future annual performance, we believe that a
substantial portion of each named executive officer’s total potential
compensation should be in the form of a bonus, the amount of which is based upon
both individual and Company performance. Accordingly, our policy is to
allocate an amount equal to a target range of 40% to 70% of a named executive
officer’s annual base salary to performance based cash bonus awards. The target
percentage of each named executive officer’s annual base salary is determined by
comparing the total annual cash compensation, including cash incentives, paid to
individuals with similar responsibilities at peer companies, to the named
executive officer’s annual base salary.
Our Board
of Directors established annual cash bonus targets as a percentage of salary
under the 2008 Annual Incentive Plan (“2008 AIP”) for each named executive
officer. As a percentage of base salary, these targets were 70% for Mr.
Hershberger, 60% for Mr. Jackson and 40% for Messrs. Ferrucci, McCutcheon and
Cross, respectively, and were:
· 20% based
on net sales,
· 35% based
on EBITDA,
· 20% based
on return on operating investment, and
· 25% based
on discretionary factors.
No
amounts were earned under the portions of the 2008 AIP based on net sales,
EBITDA or return on operating investment. However, on January 28, 2009, our
Board of Directors approved a bonus under the portion of the 2008 AIP based on
discretionary factors including, among other things, management’s success in
actions taken to respond to the severe market and economic downturns that have
had a negative effect on our Company. All employees of the Company who
participated in the 2008 AIP were awarded bonuses under its discretionary
portion, including the named executive officers.
Payments
of cash bonuses to be made to participants in 2009 related to the 2008 AIP are
included in the Summary Compensation Table in the column titled "Non-Equity
Incentive Plan Compensation".
On
January 28, 2009, our Board of Directors approved the details of the 2009 AIP.
The 2009 AIP established annual cash bonus targets as a percentage of salary for
each named executive officer. As a percentage of base salary, these
targets are 70% for Mr. Hershberger, 60% for Mr. Jackson, and 40% for Messrs.
Ferrucci, McCutcheon and Cross, respectively, and are:
· 20% based
on net sales,
· 35% based
on EBITDA,
· 20% based
on return on operating investment, and
· 25% based
on discretionary factors.
If PGT achieves less than 100% of its
target for net sales, EBITDA, or return on operating investment, the
corresponding percentage of the opportunity based on such respective measurement
will be reduced accordingly. Conversely, if PGT achieves greater than 100%
of its target for net sales, EBITDA, or return on operating investment, the
corresponding percentage of the opportunity based on such respective measurement
will be increased, to a maximum of 175%. Specific targets, for each of the
above, are set so they can only be achieved through performance that exceeds
that which is generally expected in the current economic and industrial
environment. As such, Company-wide performance at these targeted levels,
which is required for an executive officer to obtain his/her target annual cash
bonus, is challenging.
We
believe the best way to align the interests of the named executive officers and
our stockholders are for such officers to own a meaningful amount of our common
stock. In order to reach this objective and to retain our executives, we
grant equity-based awards to named executive officers under the long-term
incentive portion of our 2006 Equity Incentive Plan. Accordingly, our policy is
to allocate an amount equal to a target range of 40% to 75% of a named executive
officer’s annual base salary to long-term equity-based incentives. The target
percentage of each named executive officer’s annual base salary allocated to
long-term equity-based incentives is determined by comparing the total direct
compensation, including long-term equity-based incentives, paid and awarded to
individuals with similar responsibilities at peer companies, to the named
executive officer’s total cash compensation and establishing the target
percentage which brings the named executive officer’s total potential direct
compensation to a median level.
Long-term
incentive compensation, rather than reflecting a single year’s results, is
intended to reward performance over the long-term. Our practice is to structure
this long-term incentive compensation in the form of options and restricted
stock granted under the Company’s Long-Term Incentive Plan, or LTIP. All
outstanding options have an exercise price equal to the fair market value of the
common stock on the date of grant. Options granted to officers and employees
have been granted on, or shortly after, the date that PGT’s Board of Directors
authorized the grant of the option.
In 2008,
stock options and restricted stock granted pursuant to the Company’s LTIP were
authorized by our Board of Directors and granted three market days after the
Company released its fiscal year earnings. From time to
time, options and restricted stock have been granted to officers on
the respective dates of commencement of their employment with the Company, and
restricted stock has been granted to non-management directors, other than
those affiliated with JLL Partners, Inc., in connection with commencement of
service on the Board.
Restricted
stock and options create a strong link between executive compensation and
stockholder return and contribute to the ability of our executives to develop a
meaningful ownership interest in PGT. In order to allow executive officers
to benefit from increases in common stock values and thus provide such officers
a continuing incentive to achieve results beneficial to the stockholders, we
generally award restricted stock and options on an annual basis on terms
providing for vesting over a period of time. In comparison with stock
option awards, restricted stock awards are less dilutive and still closely align
the interests of the named executive officers with those of our
stockholders.
The Board
of Directors of the Company determined that, as a result of economic conditions
that have adversely affected the Company and the industry in which the Company
competes, the options held by certain designated employees had exercise prices
that were significantly above the current market price of the Company’s common
stock and that the grants of replacement options would help the Company retain
and provide additional incentive to such designated employees and align their
interests with those of the Company’s stockholders.
Therefore,
on March 6, 2008, the Board of Directors approved the cancellation and
termination of the then-current option agreements of certain designated
employees of the Company, including Messrs. Jackson, Ferrucci and Cross, and the
grant of replacement options under the Company’s 2006 Equity Incentive
Plan. The replacement options were approved by the Company’s
shareholders at its annual meeting of shareholders held on July 23,
2008.
The
replacement options have an exercise price of $3.09 per share, which was the
closing price on the NASDAQ Global Market of the Company’s common stock on March
5, 2008, the day before the date on which the Board of Directors of the Company
granted the replacement options and the designated employees executed the
Replacement Option Agreements. The replacement options are
exercisable with respect to one third of the shares (rounded to the nearest
whole share) on each of the first, second, and third anniversaries of March 6,
2008. The replacement options expire on
March 6, 2015.
Mr.
Jackson was granted an option to purchase an aggregate of 152,675 shares of the
Company’s common stock at an exercise price of $3.09 per share. In
connection therewith, Mr. Jackson’s option to purchase 115,863 shares of the
Company’s common stock at an exercise price of $12.84 per share and his option
to purchase 36,812 shares of the Company’s common stock at an exercise price of
$12.77 per share were cancelled and terminated.
Mr.
Ferrucci was granted an option to purchase an aggregate of 53,984 shares of the
Company’s common stock at an exercise price of $3.09 per share. In
connection therewith, Mr. Ferrucci’s option to purchase 36,414 shares of the
Company’s common stock at an exercise price of $14.00 per share and his option
to purchase 17,570 shares of the Company’s common stock at an exercise price of
$12.77 per share were cancelled and terminated.
Mr. Cross
was granted an option to purchase an aggregate of 9,423 shares of the Company’s
common stock at an exercise price of $3.09 per share. In connection
therewith, Mr. Cross’s option to purchase 9,423 shares of the Company’s common
stock at an exercise price of $12.80 per share were cancelled and
terminated.
Our
executive compensation program remains relatively free of fringe benefits and
perquisites. Generally, benefits and perquisites available to executive officers
are available to all employees on similar terms.
The
Company does not provide its executive officers separate dining or other
facilities, company cars, club dues, or other similar perquisites.
Company-provided air travel for executive officers is for business purposes
only. The Company’s use of non-commercial aircraft on a rental basis is limited
to appropriate business-only travel. The Company’s health care, insurance,
401(k) plan, and other welfare and employee-benefit programs are the same for
all eligible employees, including the named executive officers. In certain
situations, we provide our named executive officers with expense reimbursement
relating to relocation. Additionally, the Company does, within certain limits,
provide our products free of charge to executive officers for installation in
their respective primary residences. The Company does not, however, pay for the
cost of installing such product.
We
provide the above-described executive benefits and perquisites in order to
attract and retain executive officers by offering compensation opportunities
that are competitive with those offered by similarly situated public companies.
However, such executive benefits and perquisites represent a relatively small
portion of their total compensation. The value of benefits and perquisites
provided are presented in the “All Other Compensation” column (and described in
the related footnotes) of the “Summary Compensation Table”.
Retirement/Post-Employment
Benefits. The Company does not provide any retirement
programs, pension benefits or deferred compensation plans to its named executive
officers other than its 401(k) plan, which is available to all
employees.
Equity Grant
Practices. The Company’s practice is to grant annual equity
awards to certain eligible employees, including the named executive officers,
following the release of earnings in February of each year to ensure that the
most current information regarding the Company’s financial position is properly
reflected in the fair market value for all such equity grants. We do not engage
in the practice of timing equity grants prior to the release of material
non-public information. We determine that the fair market value of equity grants
as the closing price of the Company’s common stock on the date immediately
preceding the grant date.
|
Non-Equity
|
|||||||||||||||||||||||||||
|
Incentive
|
|||||||||||||||||||||||||||
|
Equity Awards(4)
|
Plan
|
||||||||||||||||||||||||||
|
Stock
|
Restricted
|
Compen-
|
All
Other
|
||||||||||||||||||||||||
|
Name and Position
|
Year(1)
|
Salary(2)
|
Bonus(3)
|
Options
|
Stock
|
sation(5)
|
Compensation
|
Total
|
|||||||||||||||||||
|
Rodney
Hershberger
|
2008
|
$ | 339,269 |
(6)
|
$ | - | $ | - | $ | - | $ | 59,372 | $ | - | $ | 398,641 | |||||||||||
|
President
and Chief
|
2007
|
320,000 |
(7)
|
- | - | - | - | 5,850 |
(12)
|
325,850 | |||||||||||||||||
|
Executive
Officer
|
2006
|
325,000 | - | - | - | 76,700 | 2,223,388 |
(12)
|
2,625,088 | ||||||||||||||||||
|
Jeffrey
T. Jackson
|
2008
|
289,258 | - | 155,827 | 190,242 | 43,389 | - | 678,716 | |||||||||||||||||||
|
Executive
Vice
|
2007
|
265,500 |
(8)
|
- | 106,009 | 96,736 | - | 15,352 |
(13)
|
483,597 | |||||||||||||||||
|
President
and Chief
|
2006
|
260,000 | 160,000 | - | 31,488 | 55,224 | 717,780 |
(13)
|
1,224,492 | ||||||||||||||||||
|
Financial
Officer
|
|||||||||||||||||||||||||||
|
Mario
Ferrucci III
|
2008
|
208,943 | - | 116,605 | 116,919 | 20,894 | 42,908 |
(14)
|
506,269 | ||||||||||||||||||
|
Vice
President -
|
2007
|
201,923 | - | 172,393 | 63,028 | - | 24,405 |
(14)
|
461,749 | ||||||||||||||||||
|
Aluminum
Product
|
2006
|
138,750 |
(9)
|
40,000 | 86,183 | 23,617 | 19,647 | 57,445 |
(14)
|
365,642 | |||||||||||||||||
|
Stream
and General
|
|||||||||||||||||||||||||||
|
Counsel
|
|||||||||||||||||||||||||||
|
David
McCutcheon
|
2008
|
188,557 | - | - | - | 18,856 | 39,697 |
(15)
|
247,110 | ||||||||||||||||||
|
Vice
President -
|
2007
|
182,153 | (10) | - | - | - | - | 5,348 |
(15)
|
187,501 | |||||||||||||||||
|
Operations
|
2006
|
169,423 | - | - | - | 23,990 | 4,648,588 |
(15)
|
4,842,001 | ||||||||||||||||||
|
C.
Douglas Cross
|
2008
|
222,600 | - | 76,656 | 8,644 | 22,260 | - | 330,160 | |||||||||||||||||||
|
Vice
President -
|
2007
|
178,080 | (11) | - | 23,612 | 6,991 | - | 3,150 |
(16)
|
211,833 | |||||||||||||||||
|
Vinyl
Product
|
2006
|
- | - | - | - | - | - | - | |||||||||||||||||||
|
Stream
|
|||||||||||||||||||||||||||
|
(1)
PGT, Inc. became a public company on June 26,
2006.
|
|
(2)
Fiscal 2008 was composed of 53 weeks, compared to 52 weeks for each of
2007 and 2006.
|
|
(3)
This amount represents a sign-on
bonus.
|
|
(4)
These amounts reflect the dollar amount recognized by us for financial
statement reporting purposes in accordance with SFAS 123R for equity
awards. Assumptions used in the calculation of these amounts are included
in Note 16 to the Company’s audited financial statements for the fiscal
year ended January 3, 2009, included in the Company’s Annual Report on
Form 10-K filed with the Securities and Exchange Commission on March 19,
2009 (File No. 000-52059). Messrs. Hershberger and McCutcheon have no
compensation relating to equity awards in any year as their holdings of
stock-based compensation were awarded prior to the Company's adoption of
SFAS 123R.
|
|
(5)
Reflects annual cash incentive awards earned under the 2008, 2007 and 2006
Annual Incentive Plans. For information regarding our Annual Incentive
Plan, see the discussion in “Executive Compensation — Compensation
Discussion and Analysis.”
|
|
(6)
In lieu of taking earned paid time off, Mr. Hershberger elected to forgo
his salary during the Company's annual plant shut-down during the final
week of fiscal year 2007 resulting in his actual compensation for 2008
being $6,250 less than his stated annual salary of $360,000, which was
effective on August 1, 2008.
|
|
(7)
In lieu of taking earned paid time off, Mr. Hershberger elected to forgo
his salary during the Company's annual plant shut-down during the final
week of fiscal year 2006 resulting in his actual compensation for 2007
being $5,000 less than his then annual salary of
$325,000.
|
|
(8)
In lieu of taking earned paid time off, Mr. Jackson elected to forgo his
salary during the Company's annual plant shut-down during the final week
of fiscal year 2006 resulting in his actual compensation for 2007 being
$4,200 less than his then annual salary of $273,000, which was effective
on April 1, 2007.
|
|
(9)
Mr. Ferrucci's effective date of hire was April 10,
2006.
|
|
(10)
In lieu of taking earned paid time off, Mr. McCutcheon elected to forgo
his salary during the Company's annual plant shut-down during the final
week of fiscal year 2006 resulting in his actual compensation for 2007
being $2,846 less than his then annual salary of
$185,000.
|
|
(11)
Mr. Cross's effective date of hire was March 1,
2007.
|
|
(12)
For 2007, amount represents employer matching contribution under the PGT
Industries, Inc. 401(k) Savings Plan. For 2006, amount
includes: (i) one-time, pre-IPO cash payments made in lieu of adjusting
the exercise prices of stock options (as approved by our Board of
Directors, the Company made such payments on February 20, 2006, to all of
the Company’s stock option holders) of $2,217,288; and (ii) employer
matching contributions under the PGT Industries, Inc. 401(k) Savings Plan
of $6,100.
|
|
(13)
For 2007, amount includes employer matching contributions under the PGT
Industries, Inc. 401(k) Savings Plan of $5,850 and the value of free PGT
window and door products (installation paid for by employee) of
$9,502. For 2006, amount includes: (i) one-time, pre-IPO cash
payments made in lieu of adjusting the exercise prices of stock options
(as approved by our Board of Directors, the Company made such payments on
February 20, 2006, to all of the Company’s stock option holders) of
$614,175; (ii) reimbursement of relocation expenses of $99,855; and (iii)
employer matching contributions under the PGT Industries, Inc. 401(k)
Savings Plan of $3,750.
|
|
(14)
For 2008, amount includes reimbursement of relocation expenses of $36,166
and the value of free PGT window and door products (installation paid for
by employee) of $6,742. For 2007, amount includes employer
matching contributions under the PGT Industries, Inc. 401(k) Savings Plan
of $5,600 and reimbursement of relocation expenses of
$18,805. For 2006, amount includes employer matching
contributions under the PGT Industries, Inc. 401(k) Savings Plan of $788
and reimbursement of relocation expenses of
$56,657.
|
|
(15)
For 2008, amount includes the value of free PGT window and door products
(installation paid for by employee). For 2007, amount includes
employer matching contributions under the PGT Industries, Inc. 401(k)
Savings Plan. For 2006, amount includes: (i) one-time, pre-IPO
cash payments made in lieu of adjusting the exercise prices of stock
options (as approved by our Board of Directors, the Company made such
payments on February 20, 2006, to all of the Company’s stock option
holders) of $4,642,988; and (ii) employer matching contributions under the
PGT Industries, Inc. 401(k) Savings Plan of
$5,600.
|
|
(16)
For 2007, amount includes employer matching contributions under the PGT
Industries, Inc. 401(k) Savings
Plan.
|
The
following table contains information concerning the potential threshold, target
and maximum payments originally applicable to each of our named executive
officers under the 2008 AIP, as well as information concerning equity-based
awards granted to our named executive officers during fiscal
2008. Awards earned by our named executive officers under the 2008
AIP paid in 2009 are included in the Summary Compensation Table in the column
titled "Non-Equity Incentive Plan Compensation".
|
Estimated
Possible Payments Under Non-Equity Incentive Plan
Awards(1)
|
All
Other Stock Awards: Number of Shares of Stock
|
All
Other Option Awards: Number of Securities Underlying
|
Exercise
or Base Price of Option
|
Grant
Date Fair Value of Stock and Option
|
|||||||||||||||||||||||
|
Name and Position
|
Grant Date
|
Threshold
|
Target
|
Maximum
|
or Units
|
Options
|
Awards
|
Awards(5)
|
|||||||||||||||||||
|
Rodney
Hershberger
|
$ | 126,000 | $ | 252,000 | $ | 441,000 | - | - | $ | - | $ | - | |||||||||||||||
|
Jeffrey
T. Jackson
|
90,000 | 180,000 | 315,000 | - | - | - | - | ||||||||||||||||||||
|
03/06/08
|
- | - | - | - | 115,863 | (3) | 3.09 | 164,525 | |||||||||||||||||||
|
03/06/08
|
- | - | - | - | 36,812 | (3) | 3.09 | 39,021 | |||||||||||||||||||
|
05/06/08
|
- | - | - | 49,140 |
(2)
|
- | - | 174,447 | |||||||||||||||||||
|
Mario
Ferrucci III
|
43,000 | 86,000 | 150,500 | - | - | - | - | ||||||||||||||||||||
|
03/06/08
|
- | - | - | - | 53,984 | (3) | 3.09 | 57,223 | |||||||||||||||||||
|
05/06/08
|
- | - | - | 28,700 |
(2)
|
- | - | 101,885 | |||||||||||||||||||
|
David
McCutcheon
|
37,000 | 74,000 | 129,500 | - | - | - | - | ||||||||||||||||||||
|
C.
Douglas Cross
|
43,680 | 87,360 | 152,880 | - | - | - | - | ||||||||||||||||||||
|
03/04/08
|
- | - | - | - | 75,000 | (4) | 3.10 | 106,500 | |||||||||||||||||||
|
03/06/08
|
- | - | - | - | 9,423 | (3) | 3.09 | 9,988 | |||||||||||||||||||
|
(1)
These columns show the range of payouts targeted for 2008 performance
under the PGT, Inc. 2008 Annual Incentive Plan. The 2008 Annual Incentive
Plan is described in the section titled “Annual Cash Incentive Plan” in
the Compensation Discussion and Analysis. Payments of cash bonuses to be
made to participants in 2009 related to the 2008 AIP are included in the
Summary Compensation Table in the column titled "Non-Equity Incentive Plan
Compensation".
|
|
(2)
Represents options awarded relating to the named executive's efforts
towards the Company's successful first-year compliance with the
Sarbanes-Oxley Act of 2002. The number of options awarded was determined
based on a percentage of the named executive officer's then annual salary
and the closing price of the Company's common stock on the NASDAQ on April
23, 2008, the date of approvel of the award by the Compensation
Committee.
|
|
(3)
Represents replacement options pursuant to the Replacement Options
Agreements as approved by the Company's stockholders at its annual meeting
held on July 23, 2008.
|
|
(4)
Represents options awarded in lieu of guaranteed sign-on bonus payments
that were due to the named executive officer within the first and second
years of his date of employment, which was March 1,
2007.
|
|
(5)
The grant date fair value of stock awards was calculated in accordance
with SFAS 123R, based on the grant date fair market value of our common
stock, which we define as the closing price of our common stock
immediately prior to the grant
date.
|
During
fiscal 2008, the Company was party to employment agreements with each of our
named executive officers. Each of these agreements had a term of three years,
with automatic one-year renewals commencing on the first anniversary of the
effective date of the employment agreement. In addition to providing for an
annual base salary and employee benefits, these agreements provided, among other
things, that the executive was eligible for an annual performance bonus, as
determined by the President of the Company and the Board of Directors, in their
discretion.
Under
each of these employment agreements, in the event that (a) the executive’s
employment was terminated by us without “cause” (as defined in the employment
agreement) or (b) the executive terminated his/her employment because of
(i) a material adverse diminution of his/her duties or responsibilities to
which he/she has not agreed in writing, (ii) the assignment of the
executive to a location outside of a fifty (50) mile radius from the
Company’s current headquarters, or (iii) conduct on the part of the Company
amounting to fraud against the executive; in addition to the benefits otherwise
due to the executive and as otherwise required by law, the executive was
entitled to continuation of his/her base salary for twelve months after the date
of termination. Should the executive have terminated his/her employment other
than for the reasons set forth above in clause (b), the Company was
obligated to continue to pay such executive’s salary for the shorter of thirty
days or the notice period provided by the executive with respect to his/her
termination. In addition, under these employment agreements, in the event that
the executive’s employment was terminated by his or her death or disability (as
defined in the employment agreement), in addition to the benefits otherwise due
to him or her, the Company was obligated to pay to the executive (or, in the
case of death, to his or her designated beneficiary) his/her base salary for a
period of twelve months.
The
following table summarizes the value of the termination payments and benefits
that our named executive officers would receive if they had terminated
employment on January 3, 2009 under the circumstances shown. The amounts shown
in the table exclude distributions under our 401(k) retirement plan and any
additional benefits that are generally available to all of our salaried
employees.
|
Mr. Hershberger
|
Mr. Jackson
|
Mr. Ferrucci
|
Mr. McCutcheon
|
Mr. Cross
|
||||||||||||||||
|
Reason
for Termination:
|
||||||||||||||||||||
|
By
Corporation Without
|
||||||||||||||||||||
|
Cause
or by the Executive
|
||||||||||||||||||||
|
for
"Good Reason"
|
||||||||||||||||||||
|
Cash
Severance(1)
|
$ | 360,000 | $ | 300,000 | $ | 215,000 | $ | 185,000 | $ | 218,400 | ||||||||||
|
Total
Estimated Value of
|
||||||||||||||||||||
|
Payments(2)
|
$ | 360,000 | $ | 300,000 | $ | 215,000 | $ | 185,000 | $ | 218,400 | ||||||||||
|
Death
or Disability(3)
|
||||||||||||||||||||
|
Cash
Severance(4)
|
$ | 180,000 | $ | 150,000 | $ | 107,500 | $ | 92,500 | $ | 109,200 | ||||||||||
|
Total
Estimated Value of
|
||||||||||||||||||||
|
Payments
|
$ | 180,000 | $ | 150,000 | $ | 107,500 | $ | 92,500 | $ | 109,200 | ||||||||||
|
(1)
Includes the dollar value of continuation of the executive’s then-current
base salary for a period of twelve
months.
|
|
(2)
Payments made in accordance with the Corporation’s regular payroll
practices.
|
|
(3)
Does not include the dollar value of potential short-term and/or long-term
disability payments.
|
|
(4)
Includes the dollar value of continuation of the executive’s then-current
base salary for a period of six
months.
|
Effective
on February 20, 2009, the named executive officers, individually, entered into
employment agreements with the Company that supersede and replace any prior
employment agreements entered into by each named executive and the
Company. The following table summarizes the value of the termination
payments and benefits that our named executive officers would receive under the
newly executed employment agreements under the circumstances shown. The amounts
shown in the table exclude distributions under our 401(k) retirement plan and
any additional benefits that are generally available to all of our salaried
employees. Each employment agreement provides for, among other things, an annual
base salary and benefits to the named executive who is a party
thereto.
Pursuant
to the new employment agreements, in the event that (a) the executive’s
employment is terminated by the Company without “cause” (as defined in the
employment agreement) or (b) the executive terminates his or her employment for
“good reason” (as defined in the employment agreement), the executive is
entitled to (1) continuation of his/her base salary for twelve months after the
date of termination (except in the case of Messrs. Hershberger and Jackson, for
whom the period is 24 months and 18 months, respectively), (2) payment by the
Company of applicable premiums for medical benefits for twelve months following
the date of termination (except in the case of Messrs. Hershberger and Jackson
for whom the period is 18 months); and (3) payment in a lump sum of an amount of
cash equal to 100% of the executive’s target incentive amount (except for
Messrs. Hershberger and Jackson form whom such percentage is 200% and 150%,
respectively) payable under the Company’s annual incentive plan for the award
period ending in which the termination of employment occurred.
Should
the executive terminate his/her employment other than for “good reason”, the
Company will continue to pay such executive’s salary for the shorter of thirty
days or the notice period provided by the executive with respect to his/her
termination. Further, under each employment agreement, in the event
that the executive’s employment is terminated by his or her death or disability
(as defined in the employment agreement), the Company will pay to the executive
(or, in the case of death, to his or her designated beneficiary) his or her base
salary for a period of twelve months.
Each
employment agreement also provides that during the executive’s employment with
the Company and at all times thereafter, he or she may not disclose any
confidential information of the Company and that all inventions of the executive
shall belong exclusively to the Company. In addition, each employment
agreement provides that during the executive’s employment with the Company and
for two years thereafter, unless the employment agreement is terminated by the
Company without “cause” or by such executive for “good reason”, in which case
the period will be the duration of the executive’s employment with the Company
and for one year thereafter, the executive may not directly or indirectly
compete with the Company or solicit employees of the Company.
|
Mr. Hershberger
|
Mr. Jackson
|
Mr. Ferrucci
|
Mr. McCutcheon
|
Mr. Cross
|
||||||||||||||||
|
Reason
for Termination:
|
||||||||||||||||||||
|
By
Corporation Without
|
||||||||||||||||||||
|
Cause
or by the Executive
|
||||||||||||||||||||
|
for
"Good Reason"
|
||||||||||||||||||||
|
Cash
Severance(1)
|
$ | 1,224,000 | $ | 720,000 | $ | 301,000 | $ | 259,000 | $ | 305,600 | ||||||||||
|
Total
Estimated Value of
|
||||||||||||||||||||
|
Payments
|
$ | 1,224,000 | $ | 720,000 | $ | 301,000 | $ | 259,000 | $ | 305,600 | ||||||||||
|
Death
or Disability(2)
|
||||||||||||||||||||
|
Cash
Severance(3)
|
$ | 360,000 | $ | 300,000 | $ | 215,000 | $ | 185,000 | $ | 218,400 | ||||||||||
|
Total
Estimated Value of
|
||||||||||||||||||||
|
Payments
|
$ | 360,000 | $ | 300,000 | $ | 215,000 | $ | 185,000 | $ | 218,400 | ||||||||||
|
(1)
Includes the dollar value of continuation of Mr. Hershberger’s current
base salary for a period of twenty four months and 200% of his target
incentive amount. Includes the dollar value of continuation of
Mr. Jackson’s current base salary for a period of eighteen months and 150%
of his target incentive amount. Includes the dollar value of
continuation of Mr. Ferrucci’s current base salary for a period of twelve
months and 100% of his target incentive amount. Includes the
dollar value of continuation of Mr. McCutcheon’s current base salary for a
period of twelve months and 100% of his target incentive
amount. Includes the dollar value of continuation of Mr.
Cross’s current base salary for a period of twelve months and 100% of his
target incentive amount.
|
|
(2)
Does not include the dollar value of potential short-term and/or long-term
disability payments.
|
|
(3)
Includes the dollar value of continuation of the executive’s then-current
base salary for a period of twelve
months.
|
PGT’s
2008 Annual Incentive Plan is discussed in “Compensation Discussion and
Analysis—Annual Cash Incentive Plan” on page 22.
PGT’s
LTIP is discussed in “Compensation Discussion and Analysis—Long-Term
Equity-Based Incentives” on page 23.
|
Option
Awards
|
Stock
Awards
|
||||||||||||||||||||||||
|
Number
of Securities Underlying Unexercised Options
|
Number
of Securities Underlying Unexercised Options
|
Option
Exercise
|
Option
Expiration
|
Number
of Shares or Units of Stock That Have
|
Market
Value of Shares or Units of Stock That Have
|
||||||||||||||||||||
|
Name
|
Exercisable
|
Unexercisable
|
Price
|
Date
|
Not Vested
|
Not Vested
|
|||||||||||||||||||
|
Rodney
Hershberger
|
85,051 | - | $ | 1.51 |
1/29/2014
|
- | $ | - | |||||||||||||||||
| 68,856 | 17,214 |
(1)
|
8.64 |
1/29/2014
|
- | - | |||||||||||||||||||
| 39,724 | 26,483 |
(2)
|
8.64 |
7/5/2015
|
- | - | |||||||||||||||||||
|
Jeffrey
T. Jackson
|
- | 152,675 |
(3)
|
3.09 |
3/6/2015
|
- | - | ||||||||||||||||||
| - | - | - | - | 13,241 |
(5)
|
15,624 |
(6)
|
||||||||||||||||||
| - | - | - | - | 7,838 |
(7)
|
9,249 |
(6)
|
||||||||||||||||||
| - | - | - | - | 49,140 |
(8)
|
57,985 |
(6)
|
||||||||||||||||||
|
Mario
Ferrucci III
|
- | 53,984 |
(3)
|
3.09 |
3/6/2015
|
- | - | ||||||||||||||||||
| - | - | - | - | 9,931 |
(5)
|
11,719 |
(6)
|
||||||||||||||||||
| - | - | - | - | 3,742 |
(7)
|
4,416 |
(6)
|
||||||||||||||||||
| - | - | - | - | 28,700 |
(8)
|
33,866 |
(6)
|
||||||||||||||||||
|
David
McCutcheon
|
58,262 | 14,566 |
(1)
|
8.64 |
1/29/2014
|
- | - | ||||||||||||||||||
| 15,890 | 10,593 |
(2)
|
8.64 |
7/5/2015
|
- | - | |||||||||||||||||||
|
C.
Douglas Cross
|
- | 75,000 |
(4)
|
3.10 |
3/4/2015
|
- | - | ||||||||||||||||||
| - | 9,423 |
(3)
|
3.09 |
3/6/2015
|
- | - | |||||||||||||||||||
| - | - | - | - | 2,058 |
(9)
|
2,428 |
(6)
|
||||||||||||||||||
|
(1)
Vested on January 29, 2009.
|
|
(2)
One-half vests on each of July 5, 2009 and
2010.
|
|
(3)
Represents replacement options approved by the Company's stockholders at
its annual meeting held on July 23, 2008, effective on March 6,
2008. One-third vests on each of March 6, 2009, 2010 and
2011.
|
|
(4)
One-third vests on each of March 4, 2009, 2010 and
2011.
|
|
(5)
Vests in full on June 27, 2009.
|
|
(6)
Based on the closing price of $1.18 of our common stock on January 2,
2009.
|
|
(7)
One-half vests on each of February 27, 2009 and
2010.
|
|
(8)
One-half vests on each of May 6, 2009 and
2010.
|
|
(9)
Vests in full on March 9, 2010.
|
On June
6, 2008, Mr. McCutcheon exercised options for 322,002 shares of the Company’s
common stock at an exercise price of $0.38 per share. The market
value of the Company’s stock on June 6, 2008 was $2.95 per share resulting in a
total value realized by Mr. McCutcheon of $949,906. No other named
executive officers exercised any options in 2008.
No stock
awards held by the named executive officers vested in 2008.
No
agreements exist between the Company and its named executive officers that could
trigger any payments in connection with a change in control.
As
previously discussed under “Information Regarding the Board and its
Committees-Information on the Compensation of Directors,” in connection with the
Company’s initial public offering of its common stock, on June 2, 2006, our
Board of Directors approved, for all non-management directors, other than those
affiliated with JLL Partners, Inc., (currently Messrs. Feintuch, McHugh,
Morgan, Sherman, and White) the following compensation: (i) an annual cash
retainer of $40,000; (ii) a grant under the Company’s 2006 Equity Incentive
Plan of restricted shares of common stock with a value at the time of issuance
of approximately $40,000 per year for each year of service as a director;
(iii) a fee of $1,000 per day for each meeting of the Board of
Directors (or committee thereof) attended; (iv) an annual cash retainer of
$5,000 for each committee on which they serve; and (v) reimbursement of
reasonable travel expenses. We have not paid, and currently do not intend to
pay, compensation to individuals serving on our Board who are employees or
affiliates of the Company for their service as directors. Mr. Hershberger
and directors who are affiliated with JLL Partners, Inc., (currently
Messrs. Levy, Castaldi, Frank, Milgrim and Agroskin) receive no
compensation for serving as a director of PGT or for serving on any committees
of our Board of Directors. They are, however, reimbursed for their reasonable
travel expenses.
|
Name
|
Fees
Earned or Paid in Cash(1)
|
Stock Awards(2)
|
Total
|
|||||||||
|
Paul
S. Levy
|
$ | - | $ | - | $ | - | ||||||
|
Daniel
Agroskin
|
- | - | - | |||||||||
|
Alexander
R. Castaldi
|
- | - | - | |||||||||
|
Richard
D. Feintuch
|
63,000 | 23,424 | 86,424 | |||||||||
|
Ramsey
A. Frank
|
- | - | - | |||||||||
|
Rodney
Hershberger
|
- | - | - | |||||||||
|
M.
Joseph McHugh
|
56,000 | 28,560 | 84,560 | |||||||||
|
Brent
N. Milgrim
|
- | - | - | |||||||||
|
William
J. Morgan
|
56,000 | 53,510 | 109,510 | |||||||||
|
Floyd
F. Sherman
|
51,000 | 23,424 | 74,424 | |||||||||
|
Randy
L. White
|
48,000 | 23,424 | 71,424 | |||||||||
|
(1)
Differences in fees earned reflect the number of committees of the Board
of Directors and meetings thereof attended by each director and duration
of service as a director (Mr. Feintuch is a member of both the audit and
compensation committees. Mr. McHugh is chairman of the audit
committee. Mr. Morgan is a member of the audit
committee).
|
|
(2)
These amounts reflect the dollar amount recognized by us for financial
statement reporting purposes in accordance with SFAS 123R for stock awards
during the fiscal year ended January 3, 2009. Assumptions used in the
calculation of these amounts are included in Note 16 to the Company’s
audited financial statements for the fiscal year ended January 3, 2009,
included in the Company’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 19,
2009.
|
The
following table shows: (i) the aggregate grant date fair value of
restricted shares received by members of our Board of Directors as determined in
accordance with SFAS 123R and (ii) the total number of restricted
shares held as of January 3, 2009.
|
Name
|
Grant
Date Fair Value of Restricted Shares
|
Total
Number of Restricted Shares Held as of January 3, 2009
|
|||||
|
Paul
S. Levy
|
$ |
-
|
-
|
||||
|
Daniel
Agroskin
|
-
|
-
|
|||||
|
Alexander
R. Castaldi
|
-
|
-
|
|||||
|
Richard
D. Feintuch
|
119,994
|
(1)
|
8,571
|
(4)
|
|||
|
Ramsey
A. Frank
|
-
|
-
|
|||||
|
M.
Joseph McHugh
|
119,994
|
(2)
|
7,910
|
(4)
|
|||
|
Brent
N. Milgrim
|
-
|
-
|
|||||
|
William
J. Morgan
|
120,003
|
(3)
|
11,823
|
(5)
|
|||
|
Floyd
F. Sherman
|
119,994
|
(1)
|
8,571
|
(4)
|
|||
|
Randy
L. White
|
119,994
|
(1)
|
8,571
|
(4)
|
|||
|
(1)
Grant date was June 27, 2006, based on the fair market value of our common
stock of $14.00 per share.
|
|
(2)
Grant date was September 20, 2006, based on the fair market value of our
common stock of $15.17 per share.
|
|
(3)
Grant date was August 7, 2007, based on the fair market value of our
common stock of $10.15 per share.
|
|
(4)
The restrictions on two-thirds of these shares have been
lifted.
|
|
(5)
The restrictions on one-third of these shares have been
lifted.
|
The
following table summarizes information, as of January 3, 2009, relating to
equity compensation plans of PGT pursuant to which stock options, restricted
stock or other rights to acquire shares may be granted from time to
time.
|
Number
of Securities to be Issued Upon Exercise of Outstanding
|
Weighted-Average
Exercise Price of Outstanding
|
Number
of Securities Remaining Available for Future Issuance Under Equity
Compensation
|
|||||||||||
|
Options(3)
|
Options
|
Plans
|
|||||||||||
|
Equity
compensation plans approved
|
|||||||||||||
|
by
security holders(1)
|
392,317 |
(4)
|
$ | 3.13 | 2,423,294 | ||||||||
|
Equity
compensation plans not approved
|
|||||||||||||
|
by
security holders(2)
|
1,178,643 |
(5)
|
$ | 8.64 | 838,887 | ||||||||
|
(1)
Includes securities to be issued upon exercise under the 2006 Equity
Incentive Plan of PGT approved by the stockholders in June 2006. A
description of the 2006 Equity Incentive Plan is included in Note 16 to
the Company’s audited financial statements for the fiscal year ended
January 3, 2009, included in the Company’s Annual Report on Form 10-K
filed with the Securities and Exchange Commission on March 19,
2009.
|
|
(2)
Includes securities to be issued upon exercise under the 2004 Stock
Incentive Plan of PGT. No grants have been made under this plan since the
Company’s initial public offering. A description of the 2004 Stock
Incentive Plan is included in Note 16 to the Company’s audited financial
statements for the fiscal year ended January 3, 2009, included in the
Company’s Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 19,
2009.
|
|
(3)
Excludes outstanding options to purchase 866,338 shares of common stock
issued pursuant to a roll over agreement executed in conjunction with the
acquisition of PGT Holding Company on January 29,
2004.
|
|
(4)
Represents outstanding options to purchase common stock, issued under the
2006 Equity Incentive Plan.
|
|
(5)
Represents outstanding options to purchase common stock, issued under the
2004 Stock Incentive Plan.
|
Section
162(m) of the Internal Revenue Code limits the tax deduction for public
companies to $1 million for compensation paid to a company’s chief executive
officer or any of the four other most highly compensated executive
officers. Qualifying performance-based compensation is not subject to the
deduction limit if Internal Revenue Code requirements are met. We believe
that stock options granted under our long-term incentive plans would qualify as
performance-based compensation. While such stock options vest over a
specified period of time contingent upon the option holder’s continued
employment with the Company, such stock options only have value if the Company’s
performance results in a stock price higher than the price on the date of
grant. In addition, we believe that annual cash bonus awards would qualify
as performance-based compensation. In contrast, restricted stock awards,
do not qualify as performance-based compensation because they have immediate
value (at a minimum, once the restrictions are released) irrespective of the
Company’s performance.
While we
seek to take advantage of favorable tax treatment for executive compensation
where appropriate, the primary drivers for determining the amount and form of
executive compensation must be the retention and motivation of superior
executive talent rather than tax-based considerations.
The
Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis included in this proxy statement. Based on
its review and these discussions, the Compensation Committee has recommended to
the Board of Directors that the Compensation Discussion and Analysis be included
in this proxy statement and in PGT, Inc.’s Annual Report on Form 10-K for
the fiscal year 2008.
Submitted by the Compensation
Committee
Alexander R.
Castaldi (Chairman)
Richard D.
Feintuch
Floyd F.
Sherman
* The Compensation Committee Report
does not constitute soliciting material, and shall not be deemed to be filed or
incorporated by reference into any other filing of PGT under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except
to the extent that PGT specifically incorporates the Compensation Committee
Report by reference therein.
Our
Compensation Committee consists of non-employee directors only. No
interlocking relationship existed during 2008 between our Executive
Officers, members of our Board of Directors or members of our Compensation
Committee, and the executive officers, members of the board
of directors or members of the compensation committee of
the board of directors of any other company.
All
related party transactions are reviewed and, as appropriate, may be approved or
ratified by the Board of Directors. If a Director is involved in the
transaction, he may not participate in any review, approval or ratification of
such transaction. Related party transactions are approved by the Board of
Directors only if, based on all of the facts and circumstances, they are in, or
not inconsistent with, the best interests of the Company and the best interests
of our stockholders, as the Board of Directors determines in good faith. The
Board of Directors takes into account, among other factors it deems appropriate,
whether the transaction is on terms generally available to an unaffiliated
third-party under the same or similar circumstances and the extent of the
related party's interest in the transaction. The Board of Directors may also
impose such conditions as it deems necessary and appropriate on the Company or
the related party in connection with the transaction.
In the
case of a transaction presented to the Board of Directors for ratification, the
Board of Directors may ratify the transaction or determine whether rescission of
the transaction is appropriate.
Since
December 30, 2007 (the first day of the Company’s 2008 fiscal year), there has
not been, nor is there currently proposed, any transaction or series of similar
transactions to which we were or are to be a party in which the amount involved
exceeds $120,000 and in which any director, nominee for director, executive
officer or holder of more than 5% of our common stock, or an immediate family
member of any of the foregoing, had or will have a direct or indirect interest
other than compensation arrangements, which are described above.
In the
ordinary course of business, we sell windows to Builders FirstSource, Inc., a
company controlled by affiliates of JLL Partners, Inc. One of our directors,
Floyd F. Sherman, is the president, chief executive officer, and a director of
Builders FirstSource, Inc. In addition, Ramsey A. Frank, Brett
N. Milgrim, and Paul S. Levy are directors of Builders FirstSource,
Inc. Total net sales to Builders FirstSource, Inc. were $2.7 million for
the year ended January 3, 2009. During the first two months of our 2009 fiscal
year, we sold $0.5 million in windows and related products Builders
FirstSource, Inc. We will most likely continue making such sales in the
foreseeable future.
The Board
of Directors has ultimate authority and responsibility for effective corporate
governance, including the role of oversight of the management of PGT. The Audit
Committee’s purpose is to assist the Board of Directors in fulfilling its
responsibilities to the Company and its stockholders by overseeing the
accounting and financial reporting processes of PGT, the audits of PGT’s
consolidated financial statements and the qualifications, selection and
performance of the Company’s independent registered public accounting
firm.
The Audit
Committee reviews our financial reporting process on behalf of the Board. The
Audit Committee relies on the expertise and knowledge of management and the
independent auditor in carrying out its oversight responsibilities. Management
has the primary responsibility for establishing and maintaining effective
systems of internal and disclosure controls, for preparing financial statements,
and for the public reporting process. Ernst & Young LLP, PGT’s
independent registered public accounting firm for 2008, is responsible for
expressing opinions on the conformity of the company’s audited financial
statements with generally accepted accounting principles and on our internal
controls over financial reporting.
With
respect to the fiscal year ended January 3, 2009, the Audit Committee, among
other things: oversaw the integrity of the Company’s financial statements and
financial reporting processes, oversaw compliance with legal and regulatory
requirements, reviewed the external auditors’ qualifications and independence
(including auditor rotation), and evaluated the external auditors’
performance.
The Audit
Committee has reviewed and discussed with management and Ernst & Young
LLP the audited consolidated financial statements for the year ended January 3,
2009. The Audit Committee also discussed with Ernst & Young LLP all
matters required to be discussed by the statement on Auditing Standards
No. 61 (Communication with Audit Committees), as amended (AICPA,
Professional Standards, Vol. 1. AU section 380), as adopted by the Public
Company Accounting Oversight Board in Rule 3200T. In addition, the Audit
Committee has received from Ernst & Young LLP the written disclosures
and letter required by the applicable requirements of the Public Company
Accounting Oversight Board regarding Ernst & Young LLP’s communications with
the Audit Committee concerning independence, and the Audit Committee has had
discussions with Ernst & Young LLP regarding its independence from the
Company and its management.
Based on
the reviews and discussions described above, the Audit Committee recommended to
our Board of Directors, and the Board of Directors approved, inclusion of the
audited consolidated financial statements for the fiscal year ended January 3,
2009 in our Annual Report on Form 10-K for 2008 for filing with the SEC.
The Audit Committee and the Board of Directors have selected Ernst &
Young LLP as the company’s independent accountant for fiscal 2009.3
Submitted by the Audit
Committee
M. Joseph McHugh
(Chairman)
Richard D.
Feintuch
William J.
Morgan
* The Audit Committee Report does
not constitute soliciting material, and shall not be deemed to be filed or
incorporated by reference into any other filing of PGT under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except
to the extent that PGT specifically incorporates the Audit Committee Report by
reference therein.
Principal
Accountant Fees and Services
The Audit
Committee of our Board of Directors is responsible for the appointment,
oversight, and evaluation of our independent registered public accounting firm.
The Audit Committee has the sole and direct authority to engage, appoint, and
replace our independent auditors. In addition, the Audit Committee has
established in its charter a policy that every engagement of the Company’s
independent registered public accounting firm to perform audit or permissible
non-audit services on behalf of the Company or any of its subsidiaries requires
pre-approval from the Audit Committee or its designee before such independent
registered public accounting firm is engaged to provide those services. Our
independent registered public accounting firm may not be retained to perform the
non-audit services specified in Section 10A(g) of the Exchange Act.
Pursuant to the Audit Committee Charter, the Audit Committee reviews and, in its
sole discretion, approves in advance the Company’s independent registered public
accounting firm’s annual engagement letter, including the proposed fees
contained therein, as well as all audit and, as provided in the Sarbanes-Oxley
Act of 2002 and the SEC rules and regulations promulgated thereunder, all
permitted non-audit engagements and relationships between the Company and such
independent registered public accounting firm (which approval should be made
after receiving input from the Company’s management, if desired).
With
respect to the audits for the year ended January 3, 2009 and December 29, 2007,
the Audit Committee approved the audit services performed by Ernst & Young
LLP as well as certain categories and types of audit-related, tax, and permitted
non-audit services.
Fees
Paid to Ernst & Young LLP
Aggregate
fees for professional services rendered by Ernst & Young LLP for the years
ended January 3, 2009 and December 29, 2007, were (in thousands):
|
Type of Fee
|
2008
|
2007
|
|||||
|
Audit
Fees (1)
|
$ | 852 | $ | 1,010 | |||
|
Audit-Related
Fees (2)
|
36 | 188 | |||||
|
Tax
Fees (3)
|
87 | 149 | |||||
|
All
Other Fees (4)
|
2 | 2 | |||||
|
Total
Fees
|
$ | 977 | $ | 1,349 | |||
|
(1)
Audit fees for 2008 and 2007 consisted of the audit of the consolidated
financial statements included in the Annual Report on Form 10-K, reviews
of Quarterly Reports on Form 10-Q and the audit of internal control over
financial reporting.
|
|
(2)
Audit-related fees include the required audits of the Company’s employee
benefit plans and, in 2007, transaction advisory
fees.
|
|
(3)
Tax fees were for services related to tax compliance, including the
preparation of tax returns and claims for refund; and tax planning and tax
advice, including assistance with tax
audits.
|
|
(4)
All other fees represent a subscription to Ernst & Young Online, their
accounting and auditing research tool for
clients.
|
We know
of no other matters to be submitted at the Meeting. By submitting the proxy, the
stockholder authorizes the persons named on the proxy to use their discretion in
voting on any matter brought before the Meeting.
A copy of our annual report to
stockholders for the fiscal year ended January 3, 2009 is being mailed
concurrently with this proxy statement to all stockholders entitled to notice of
and to vote at the Meeting. Our annual report to stockholders is not
incorporated into this proxy statement and shall not be deemed to be
solicitation material. A copy of our Annual Report on Form 10-K and these proxy
materials are available without charge on our Company website at www.pgtindustries.com/proxymaterials. These proxy materials are also
available in print to stockholders without charge and upon request, addressed to
PGT, Inc., 1070 Technology Drive, North Venice, Florida 34275, Attention:
Secretary.
We have
not incorporated by reference into this proxy statement the information included
on or linked from our website, and you should not consider it to be part of this
proxy statement.
If you
have any questions, or need assistance in voting your shares, please call
American Stock Transfer & Trust Company, LLC toll-free at (800) 937-5449 or
locally and internationally at (718) 921-8124.
By
Order of the Board of Directors,
Mario
Ferrucci III
Vice
President and General Counsel
April
20, 2009
