UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ | |
Filed by a Party other than the Registrant o | |
Check the appropriate box: |
o Preliminary Proxy Statement | |
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ Definitive Proxy Statement | |
o Definitive Additional Materials | |
o Soliciting Material Pursuant to §240.14a-12 |
American Axle & Manufacturing Holdings, Inc.
Payment of Filing Fee (Check the appropriate box):
þ No fee required. | |
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4) Date Filed: |
SEC 1913 (02-02) | Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
Time and Date | 3:00 p.m., local time, on Thursday, April 30, 2009 | |
Place | AAM World Headquarters Auditorium, One Dauch Drive, Detroit, Michigan | |
Items of Business |
(1) Elect five members of the Board of Directors: one to
serve until the Annual Meeting of Stockholders in 2010 and four
to serve until the Annual Meeting of Stockholders in 2012;
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(2) Ratify the appointment of Deloitte & Touche LLP as
AAMs independent registered public accounting firm for the
year ending December 31, 2009; and
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(3) Attend to other business properly presented at the
meeting.
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Record Date | You may vote if you were an AAM stockholder (NYSE: AXL) at the close of business on March 3, 2009. | |
Meeting Admission | Admission may be limited to AAM stockholders as of the record date and holders of valid proxies. Please be prepared to present identification for admittance. Stockholders holding stock in brokerage accounts will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date. Cameras and recording devices will not be permitted. | |
Proxy Materials | We have elected to furnish materials for the 2009 Annual Meeting of Stockholders via the Internet. We believe the use of the Securities and Exchange Commission (SEC) e-proxy rule will expedite stockholders receipt of the 2009 Proxy Statement, 2008 Annual Report and Form 10-K (proxy materials) and lower the costs of our annual meeting. On March 19, 2009, we mailed a notice of Internet availability (notice) to most stockholders containing instructions on how to access the proxy materials and to vote online. All other stockholders were sent a copy of the proxy materials by mail. See page 2 of this proxy statement for more information on e-proxy and instructions on how you can (1) receive a paper copy of the proxy materials if you received a notice by mail, or (2) elect to receive your proxy materials over the Internet if you received them by mail this year. |
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1
| In person attending the annual meeting and casting a ballot. | |
| By mail using the proxy and/or voting instruction card provided. | |
| By telephone or via the Internet following the instructions on your notice card, proxy and/or voting instruction card. |
2
| revoking it by written notice to AAMs Secretary at the address on the cover of this proxy statement; | |
| voting in person at the annual meeting; or | |
| delivering a later-dated proxy vote by mail, telephone or the Internet. |
Proposal 1 | FOR the election of the five nominees with one term expiring at the 2010 annual meeting and four terms expiring at the 2012 annual meeting. |
Proposal 2 | FOR ratification of the appointment of Deloitte & Touche LLP as the Companys independent registered public accounting firm for the year ending December 31, 2009. |
Proposal 1 | Requires a plurality of the votes cast to elect a director, which means that director nominees with the most affirmative votes are elected to fill the available seats. |
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SALVATORE J. BONANNO, SR. Age 67 Salvatore J. Bonanno, Sr. has served as Chairman and Chief Executive Officer of Bonanno Enterprises L.L.C. since 2000. The company provides discretionary capital, interim or transition management, and executive consulting services for industrial operations. While serving as President & Chief Executive Officer of Xymox Technologies, Inc., from 2003 to 2008, Mr. Bonanno led the companys restructuring efforts. He has also served in senior executive positions with Visionary Vehicles, Grove Worldwide L.L.C., Foamex International and with Chrysler Corporation. Mr. Bonanno currently serves on the Board of Directors of Xymox Technologies, Inc. and Waukesha Tool & Stamping L.L.C and has served on the boards of numerous manufacturing and engineering companies. |
DAVID C. DAUCH Age 44 David C. Dauch is President & Chief Operating Officer of AAM, a position he has held since June 2008. Previously, he served as Executive Vice President & COO. Mr. D.C. Dauch joined AAM in July 1995 as manager, Sales Administration. He subsequently held several positions with the Company, including Director, Sales - GM Full-Size Truck Programs; Vice President, Sales & Marketing, Vice President, Manufacturing, Driveline Division; Senior Vice President, Sales, Marketing & Driveline Division; Senior Vice President, Commercial; and Executive Vice President, Commercial & Strategic Development. Mr. D.C. Dauch served in several positions, including Sales Manager of Ford Programs, at Collins & Aikman Products Company, where he received the Presidents Award for leadership and innovation. Dauch also served on the Collins & Aikman Board of Directors from 2002 to 2007. Presently, he serves on the Miami University Business Advisory Council and the Board of Directors of the Boys & Girls Club of Southeast Michigan. |
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FOREST J. FARMER Age 68 Forest J. Farmer has served as Chairman of the Board, Chief Executive Officer & President of The Farmer Group, a holding company for four technology and manufacturing corporations, since 1998. Mr. Farmer is the President of Trillium Teamologies, an IT solutions provider located in Royal Oak, Michigan. In 1994, he retired from Chrysler Corporation after 26 years of service, which included six years as President of its Acustar automotive parts subsidiary. Mr. Farmer serves on the Boards of Directors of a number of corporations and organizations, including The Lubrizol Corporation, St. Johns Hospital System and Saturn Electronics Corporation. |
Director since 1999 |
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RICHARD C. LAPPIN Age 64 Richard C. Lappin has served as Chairman of the Board & Chief Executive Officer of Clear Sky Power, an alternative energy company, since January 2007. He retired in 2004 as Chairman of the Board of Haynes International, Inc. Previously, Mr. Lappin served as Senior Managing Director of The Blackstone Group L.P., where he was a member of the Private Equity Group from 1998 to 2002. He also helped monitor the operations of Blackstone Capital Partners portfolio companies and evaluated business strategy options. From 1989 to 1998, Mr. Lappin served as President of Farley Industries, which included West Point-Pepperell, Inc., Acme Boot Company, Inc., Tool and Engineering, Inc., Magnus Metals, Inc. and Fruit of the Loom, Inc. He also served as President and Chief Executive Officer of Doehler-Jarvis and Southern Fastening Systems, and he has held senior executive positions with Champion Spark Plug Company and RTE Corporation. |
Director since 1999 | |||
THOMAS K. WALKER Age 68 Thomas K. Walker is Chairman of the Board & Chief Executive Officer of Lackawanna Acquisition Corporation and is the former President of Amcast Automotive, where from 1995 to 1999 he directed all activities for the $300 million automotive group. Previously, he held senior executive positions with ITT Automotive and Allied-Signal Automotive Catalyst Co. He also served in various manufacturing and engineering leadership positions with Volkswagen of America and with General Motors Corporation, where he began his 40-year career in the automotive industry. Mr. Walker serves on the National Advisory Board for Michigan Technological University. |
Director since 1999 |
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ELIZABETH A. CHAPPELL Age 51 Elizabeth A. (Beth) Chappell has served as President and Chief Executive Officer of the Detroit Economic Club since 2002. Previously, she served as Executive Vice President, Corporate Communications & Investor Relations for Compuware Corporation. From 1995 to 2000, Ms. Chappell was President and Chief Executive Officer of a consulting firm she founded, The Chappell Group, Inc. For 16 years, Ms. Chappell held executive positions at AT&T. Since 1999, Ms. Chappell has served on the Board of Directors of the Handleman Company. She also serves on a number of civic boards, including Brother Rice High School, Citizens Research Council, Detroit Regional Chamber, Airport Authority-Citizens Review Council, United Way Tocqueville Committee and Michigan Economic Development Corporation. Ms. Chappell is a former board member of the Karmanos Cancer Institute, Michigan Economic Growth Authority and Hospice of Michigan. |
Director since 2004 | |||
DR. HENRY T. YANG Age 68 Dr. Henry T. Yang is the Chancellor at the University of California, Santa Barbara, where he also serves as professor of mechanical engineering. Formerly the Dean of Engineering and Neil Armstrong Distinguished Professor in Aerospace Engineering at Purdue University, Dr. Yang is a nationally recognized expert in automotive and aerospace engineering. He holds a Ph.D. degree in engineering from Cornell University as well as four honorary doctorates. He is a member of the National Academy of Engineering. He is an active member of the Executive Committee of the American Association of Universities, the Steering Committee of the Association of Pacific Rim Universities and the Board of Trustees of University Research Association. |
Director since 2004 |
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RICHARD E. DAUCH Age 66 Richard E. Dauch is Co-Founder, Chairman of the Board & Chief Executive Officer of AAM, and is also Chairman of the Executive Committee of the Board. He has been Chief Executive Officer and a member of the Board since AAM began operations in March 1994. In October 1997, he was named Chairman of the Board of Directors. He was also President of AAM from March 1994 through December 2000. Prior to March 1994, he spent 12 years at Chrysler Corporation, where he established the just-in-time materials management system and the three-shift manufacturing vehicle assembly process. He is a retired officer from the Chrysler Corporation. Mr. Dauchs last position at Chrysler, in 1991, was Executive Vice President of Worldwide Manufacturing. Mr. Dauch also served as Group Vice President of Volkswagen of America, where he established the manufacturing facilities and organization for the successful launch of the first major automotive transplant in the United States. Mr. Dauch has more than 44 years of experience in the automotive industry. Mr. Dauch was the 2006 recipient of the Shien-Ming Wu Foundation Manufacturing Leadership Award. In 2005, he received the CEO Legend Award from Automation Alley. In 2003, he received the Harvard Business School of Michigan Business Statesman Award, the Ernst & Young Entrepreneur of the Year Award, and the Northwood University Outstanding Business Leader Award. In 1999, he was named the Michiganian of the Year by The Detroit News and he was named the 1997 Manufacturer of the Year by the Michigan Manufacturers Association. In 1996, he was named Worldwide Automotive Industry Leader of the Year by the Automotive Hall of Fame. Mr. Dauch currently serves on the board of directors of the National Association of Manufacturers (N.A.M.), where he previously served as Chairman. He has lectured extensively on the subject of manufacturing and authored the book, Passion for Manufacturing, which is distributed in colleges and universities globally and in several languages. |
Director since 1994 |
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WILLIAM P. MILLER II Age 53 Mr. Miller is the Deputy Director of Investments and has been employed by the Ohio Public Employees Retirement System since August 2005. Previously, he served as Senior Risk Manager for the Abu Dhabi Investment Authority from April 2003. Mr. Miller was a risk management advisor for the Rockefeller Foundation, a non-profit foundation, and an advisor to Africa Global from June 2002 to April 2003. From September 1996 to May 2002, he served as Senior Vice President and Independent Risk Oversight Officer for Commonfund Group, an investment management firm for educational institutions. Mr. Miller previously served as Director, Trading Operations and Asset Mix Management with General Motors Investment Management Corp. and as a Financial Analyst with the U.S. Department of Transportation. |
Director since 2005 | |||
Mr. Miller is a director of the Chicago Mercantile Exchange and is a member of the Public Company Accounting Oversight Boards Standing Advisory Group. Previously, Mr. Miller was a member of the Financial Accounting Standards Boards User Advisory Council and a director of the Dubai International Financial Exchange. Mr. Miller is a Chartered Financial Analyst and member of the Institute of Chartered Financial Analysts. | ||||
LARRY K. SWITZER Age 65 Larry K. Switzer retired as Chief Executive Officer of DANKA PLC, London, England, a global independent distributor of office equipment, in 2000. From 1994 to 1998, Mr. Switzer was Senior Executive Vice President and Chief Financial Officer of Fruit of the Loom, Inc. Previously, he served as Executive Vice President and Chief Financial Officer for Alco Standard Corporation and, from 1989 to 1992, Senior Vice President and Chief Financial Officer for S.C. Johnson & Son, Inc. Mr. Switzer has also held senior executive positions at Bendix Corp., White Motor Corp. and Gencorp. |
Director since 2005 |
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| AAM is or is expected to be a participant; | |
| the amount involved exceeds $100,000; and | |
| a related person has or will have a direct or indirect material interest. |
| is available to all employees generally; | |
| involves less than $5,000 when aggregated with all similar transactions; or | |
| involves compensation of an executive officer that is approved by the Compensation Committee. |
| the Companys business reasons for entering into the transaction; | |
| the alternatives to entering into a related person transaction; |
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| the potential for the transaction to lead to an actual or apparent conflict of interest and any safeguards imposed to prevent such actual or apparent conflict; | |
| the extent of the related persons interest in the transaction; and | |
| the transaction is in the best interests of AAM. |
Nominating/ |
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Corporate |
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Audit |
Compensation |
Governance |
Executive |
Technology |
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Name of Director | Committee | Committee | Committee | Committee | Committee | ||||||||||
Richard E. Dauch
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Chairman | ||||||||||||||
John A.
Casesa(1)
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X | ||||||||||||||
Elizabeth A. Chappell
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X | ||||||||||||||
Forest J. Farmer
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Chairman | X | X | ||||||||||||
Richard C. Lappin
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X | X | |||||||||||||
William P. Miller II
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Chairman | X | |||||||||||||
Larry K. Switzer
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X | ||||||||||||||
Thomas K. Walker
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X | X | Chairman | X | X | ||||||||||
Dr. Henry T. Yang
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Chairman | ||||||||||||||
No. of Meetings in 2008
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4 | 9 | 4 | 2 | 4 | ||||||||||
(1) | Mr. Casesa resigned from the Board effective February 10, 2009. |
12
| Establishing and reviewing AAMs compensation philosophy and programs with respect to our executive officers; | |
| Approving executive officer compensation with a view to support AAMs business strategies and objectives; | |
| Approving corporate goals and objectives relevant to executive officer compensation and evaluating executive officer performance in light of these criteria, in consultation with the CEO (in the case of our other executive officers) and with input from other independent directors (in the case of the CEO); | |
| Recommending to the Board the approval, amendment and termination of incentive compensation and equity-based plans and certain other compensation matters; | |
| Overseeing the preparation of the Compensation Discussion and Analysis for inclusion in our annual proxy statement or in our annual report filed on Form 10-K; and | |
| Producing the Compensation Committee Report for inclusion in our annual proxy statement or in our annual report filed on Form 10-K in accordance with applicable regulations. |
| The CEO reports to the Committee with respect to his evaluation of the performance of the Companys executive officers, including the other named executive officers (NEOs). Together with the President & COO and the Human Resources department head, the CEO makes compensation recommendations for these individuals, including base salary levels and the amount and mix of incentive awards. | |
| The CEO, the President & COO, the CFO, and the Human Resources department head develop recommended performance objectives and targets for AAMs incentive compensation programs. The Human Resources Department also assists the Chairman of the Committee in developing meeting agendas and manages the preparation and distribution of pre-meeting informational materials on the matters to be considered. | |
| The CEO, the CFO and the Human Resources department head regularly attend Committee meetings. Management generally does not attend the executive session of the Committee. However, there are times when the Committee requests that certain members of management, including the CEO, the President & COO and the Human Resources department head, be present for all or a portion of an executive session. | |
| The CEO, President & COO and the Human Resources department head recommend long-term incentive grants for executive officers, other than the CEO, for approval by the Committee. |
13
| Provide independent input for the Committees decision-making with respect to executive compensation; | |
| Provide independent input related to non-employee director compensation; | |
| Provide market data as a reference for the Committee to consider in evaluating base salaries and incentive compensation for executive officers. |
| Identify qualified individuals to serve on the Board and committees; | |
| Review our Corporate Governance Guidelines and Code of Business Conduct and recommend changes as appropriate; and | |
| Oversee and approve the process for succession planning for the CEO and other executive officers. |
14
| High ethical character and shared values with AAM; | |
| Loyalty to AAM and concern for its success and welfare; | |
| High-level leadership experience and achievement at a policy-making level in business or in educational or professional activities; | |
| Knowledge of issues affecting AAM; | |
| The ability to contribute special competencies to Board activities, such as financial, technical, international business or other expertise, or industry knowledge; | |
| Willingness to apply sound, independent business judgment; | |
| Awareness of a directors vital role in AAMs good corporate citizenship and corporate image; and | |
| Sufficient time and availability to effectively carry out a directors duties. |
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Pay Component
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Target Percentile
Goal
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|
Base Salary
|
50th Percentile | |
Target Annual Incentive
|
Between 50th and 75th Percentiles | |
Long-Term Incentives
|
Between 50th and 75th Percentiles |
| Compensation and benefit programs should appropriately reflect the size and financial resources of our Company in order to maintain long-term viability. These programs should be increasingly market-based (rather than legacy) to be competitive relative to the compensation paid to similarly situated executives in our peer group. | |
| Compensation and benefit programs should attract, motivate and retain experienced executives who are vital to our short-term and long-term success, profitability and growth. AAM makes an effort to remain competitive by maintaining industry average pay levels and addressing pay adjustments for individuals under special circumstances. | |
| Compensation and benefit programs should reward Company and individual performance. Our programs should strive to deliver competitive compensation for exceptional Company and individual performance as compared to companies in our peer group. As associates progress to higher levels in the Company and assume key leadership positions, a greater portion of their compensation should be linked to Company performance and stockholder returns. Company performance is measured against financial and operational objectives and stockholder return. | |
| Compensation and benefit programs should foster the long-term focus required for success in the global automotive industry. We believe that long-term incentive compensation will motivate executive officers to deliver long-term value to our stockholders. Executives at higher levels should have a greater proportion of their compensation tied to longer-term performance because they are in a better position to influence longer-term results. | |
| Executive officers should be AAM stockholders. Stock ownership aligns our executive officers interests with those of stockholders and reinforces the importance of making sound long-term decisions. AAMs executive officers are required to maintain a certain level of stock ownership based on their position. The Company modified its stock ownership requirements in 2008 from a multiple of base salary to a set number of shares. This requirement is more predictable and is not subject to market fluctuations. | |
| The objectives of rewarding performance and retention should be balanced. In periods of temporary downturns in Company performance, particularly when driven by industry events or customer decisions, our compensation programs should continue to ensure that high-achieving, marketable executives remain motivated and committed to AAM. This principle is essential to our effort to encourage our strongest leaders to remain with AAM for long and productive careers. |
17
| Compensation and benefit programs should be fair in consideration of each executives level of responsibility and contribution to AAM. While the overall structure of compensation and benefit programs should be broadly similar across the Company, individual pay levels and benefit packages will necessarily reflect differences in job responsibilities, geography and marketplace considerations. |
| Operating/Industry Competitors Companies with which we compete with for the sale of products and services; | |
| Labor Market Competitors Companies with which we compete for executive talent; | |
| Competitors for Capital Companies with which we compete for investment dollars and against which investment performance is evaluated; and | |
| Revenue Size Companies with revenues within a relevant size range. |
A. O. Smith Corporation*
|
Joy Global Inc. x | |
Arvin Meritor, Inc.*
|
Kennametal Inc. * | |
Ball Corporation*
|
Lear Corporation * | |
BorgWarner Inc.
x
|
Navistar International * | |
Brady Corporation*
|
Owens-Illinois, Inc. * | |
Cameron International Corporation*
|
PACCAR Inc. x | |
Cummins Inc.
x
|
Polaris Industries Inc. x | |
Dana Corporation
x
|
Rockwell Automation * | |
Donaldson Company, Inc.*
|
Sauer-Danfoss Inc. x | |
Dover Corporation
x
|
Sonoco Products Company * | |
Eaton Corporation
x
|
Terex Corporation x | |
Federal Signal Corporation
x
|
Thomas & Betts Corporation * | |
Federal-Mogul Corporation
x
|
The Timken Company * | |
Fleetwood Enterprises, Inc.*
|
Trinity Industries, Inc. * | |
Flowserve Corporation*
|
TRW Automotive x | |
FMC Technologies
x
|
USG Corporation * | |
Genuine Parts Company
x
|
Valmont Industries, Inc. * | |
Harley-Davidson Motor Company*
|
Visteon Corporation * | |
Ingersoll-Rand Company
x
|
Woodward Governor Company x |
* | Included in both the 2008 peer group and the 2009 peer group. | |
x | Added to the 2009 peer group but not in the 2008 peer group. |
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A.O. Smith Corporation
|
MeadWestvaco Corporation ü | |
ArvinMeritor, Inc.
|
Monaco Coach Corporation ü | |
Ball Corporation
|
MSC Industrial Direct Co., Inc. ü | |
Brady Corporation
|
Navistar International Corporation | |
Cameron International Corporation
|
Owens-Illinois, Inc. | |
Cooper Tire & Rubber Company
ü
|
Rockwell Automation, Inc. | |
Donaldson Company, Inc.
|
Sonoco Products Company | |
Dresser-Rand Group Inc.
ü
|
Steelcase Inc. ü | |
Fleetwood Enterprises, Inc.
|
Thomas & Betts Corporation | |
Flowserve Corporation
|
The Timken Company | |
Harley-Davidson, Inc.
|
The Toro Company ü | |
Harsco Corporation
ü
|
Trinity Industries, Inc. | |
Hayes Lemmerz International, Inc.
ü
|
USG Corporation | |
HNI Corporation
ü
|
Valmont Industries, Inc. | |
IDEX Corporation
ü
|
Visteon Corporation | |
Johnson Controls, Inc.
ü
|
W.W. Grainger, Inc. ü | |
Kennametal Inc.
|
Whirlpool Corporation ü | |
Lear Corporation
|
19
2009 Base Salary | ||||
Richard. E. Dauch
|
$ | 1,481,040 | ||
Michael K. Simonte
|
$ | 337,500 | ||
Yogendra N. Rahangdale
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$ | 387,000 | ||
David. C. Dauch
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$ | 414,000 | ||
Patrick S. Lancaster
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$ | 315,000 |
20
Annual Bonus |
|||||||||
Opportunity (New |
|||||||||
Prior Annual Bonus |
Compensation |
||||||||
Opportunity | Structure) | ||||||||
Richard E. Dauch
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300% | 300 | % (per contract) | ||||||
Michael K. Simonte
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100% | 80 | % | ||||||
Yogendra N. Rahangdale
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100% | 90 | % | ||||||
David C. Dauch
|
100% | 90 | % | ||||||
Patrick S. Lancaster
|
100% | 80 | % |
Net Income as a |
Net Operating |
|||||||||||||||||||||||
Percentage of Sales | ROIC | Cash Flow | ||||||||||||||||||||||
Performance | Payout | Performance | Payout | Performance | Payout | |||||||||||||||||||
Threshold | 1% | 30% | 4% | 30% | $ | 76 million | 50% | |||||||||||||||||
Target | 3% | 100% | 9% | 100% | $ | 152 million | 100% | |||||||||||||||||
Maximum | >3% | >100% | >9% | >100% | $ | 182 million | 120% |
| Align executive officer and stockholder interests; | |
| Reward achievement of long-term performance goals; and | |
| Provide incentives for executive retention. |
21
| The expiration of the 1999 Stock Incentive Plan on January 8, 2009; | |
| The lack of a replacement long-term equity incentive plan; | |
| The existing employment agreement with the CEO; | |
| The newly approved compensation structure; and | |
| Retention of key executive talent. |
Target Award |
||||
Amount | ||||
Richard E. Dauch
|
n/a | |||
Michael K. Simonte
|
$ | 506,250 | ||
Yogendra N. Rahangdale
|
$ | 870,750 | ||
David C. Dauch
|
$ | 931,500 | ||
Patrick S. Lancaster
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$ | 472,500 |
22
Percent of |
||||||||
3-Year Cumulative |
Target Award |
|||||||
Performance Level
|
EBITDA | Opportunity Earned | ||||||
Threshold
|
8 | % | 25 | % | ||||
Target
|
12 | % | 100 | % | ||||
Maximum
|
15 | % | 200 | % |
Percent of |
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Companys TSR |
Target Award |
|||||||
Percentile |
Opportunity |
|||||||
Performance Level
|
Rank | Earned | ||||||
Threshold
|
35th | 50 | % | |||||
Target
|
50th | 100 | % | |||||
Maximum
|
75th | 200 | % |
Percentage |
||||||||
Total |
of Base |
|||||||
Award Value | Salary | |||||||
Michael K. Simonte
|
$ | 415,300 | 154 | % | ||||
Yogendra N. Rahangdale
|
$ | 1,081,020 | 300 | % | ||||
David C. Dauch
|
$ | 501,460 | 152 | % | ||||
Patrick S. Lancaster
|
$ | 399,710 | 155 | % |
| Mr. Simonte and Mr. D. C. Dauch each received approximately 25 percent of the total award value in the form of stock options, 25% in cash performance awards, and 50 percent in restricted stock. | |
| Mr. Rahangdale and Mr. Lancaster each received approximately 25 percent of the total award value in the form of stock options and 75 percent in restricted stock. |
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Position | No. of Shares | |||
Chief Executive Officer
|
350,000 | |||
President & COO, Vice Chairman & CTO
|
50,000 | |||
Executive Vice President and Group Vice President
|
25,000 | |||
Vice President
|
15,000 |
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Change in |
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Pension Value |
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and |
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Nonqualified |
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Deferred |
All Other |
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Stock |
Options |
Compensation |
Compen- |
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Name and |
Salary |
Bonus(2) |
Awards(3)(5) |
Awards(4) |
Earnings(6) |
sation(7) |
Total |
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Principal Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||||||||
Richard E. Dauch(1) | ||||||||||||||||||||||||||||||||||||||||
Co-Founder, Chairman
|
2008 | 1,620,667 | | 196,696 | 73,938 | 3,081,360 | 105,673 | 5,078,334 | ||||||||||||||||||||||||||||||||
& Chief Executive
|
2007 | 1,473,336 | 8,500,000 | 5,597,764 | 2,401,038 | 608,372 | 94,684 | 18,675,194 | ||||||||||||||||||||||||||||||||
Officer
|
2006 | 1,344,164 | 3,900,000 | 2,566,059 | 210,979 | 1,209,400 | 85,640 | 9,316,242 | ||||||||||||||||||||||||||||||||
Michael K. Simonte | ||||||||||||||||||||||||||||||||||||||||
Group Vice President
|
2008 | 271,125 | | 20,325 | 61,028 | 59,884 | 44,235 | 456,597 | ||||||||||||||||||||||||||||||||
Finance & Chief Financial
|
2007 | 242,862 | 435,000 | 93,069 | 47,138 | 88,404 | 39,768 | 946,241 | ||||||||||||||||||||||||||||||||
Officer
|
2006 | 230,000 | 125,000 | 70,609 | 14,065 | 14,280 | 25,028 | 478,982 | ||||||||||||||||||||||||||||||||
Yogendra N. Rahangdale | ||||||||||||||||||||||||||||||||||||||||
Vice Chairman
|
2008 | 361,800 | | 133,336 | 239,286 | 194,156 | 14,756 | 943,334 | ||||||||||||||||||||||||||||||||
& Chief Technology
|
2007 | 327,687 | 525,000 | 315,015 | 192,103 | 213,563 | 14,966 | 1,588,334 | ||||||||||||||||||||||||||||||||
Officer
|
2006 | 313,101 | 165,000 | 167,862 | 59,074 | 116,917 | 13,742 | 835,696 | ||||||||||||||||||||||||||||||||
David C. Dauch | ||||||||||||||||||||||||||||||||||||||||
President &
|
2008 | 358,875 | | 36,094 | 82,520 | 96,222 | 21,460 | 595,171 | ||||||||||||||||||||||||||||||||
Chief Operating Officer
|
2007 | 292,047 | 525,000 | 119,653 | 64,832 | 195,198 | 80,797 | 1,277,527 | ||||||||||||||||||||||||||||||||
2006 | 277,749 | 150,000 | 91,499 | 21,098 | 14,444 | 40,187 | 594,977 | |||||||||||||||||||||||||||||||||
Patrick S. Lancaster | ||||||||||||||||||||||||||||||||||||||||
Vice President, Chief
|
2008 | 268,896 | | 53,493 | 60,703 | 145,474 | 33,979 | 562,545 | ||||||||||||||||||||||||||||||||
Administrative Officer
|
2007 | 258,600 | 378,000 | 95,698 | 47,446 | 222,013 | 31,874 | 1,033,631 | ||||||||||||||||||||||||||||||||
& Secretary
|
||||||||||||||||||||||||||||||||||||||||
(1) | Mr. R. E. Dauchs compensation is based solely on his role as an executive officer. He received no additional compensation for serving as a director. | |
(2) | No bonuses were paid to the NEOs for 2008. | |
(3) | Reflects the amounts recognized in accordance with Statement of Financial Accounting Standards No. 123 (restated December 2004), Share-Based Payment (SFAS 123R), disregarding estimated forfeitures, for the fiscal years ended December 31, 2008, December 31, 2007 and December 31, 2006 for PARS, RSUs and Restricted Stock granted in and prior to 2008, 2007 and 2006, respectively. For PARS and Restricted Stock, the amounts recognized are based on the grant date fair value, calculated using the closing market price of AAM common stock on the date of grant. For RSUs, the amounts recognized are based on the fair value, calculated using the closing market price of AAM common stock, on December 31, 2008, 2007 and 2006, respectively. | |
(4) | Reflects the amounts recognized in accordance with SFAS 123R, disregarding estimated forfeitures, for the fiscal years ended December 31, 2008, 2007 and 2006 for stock options granted in and prior to 2008, 2007 and in 2006, respectively. The amounts recognized are based on the grant date fair value, calculated using the Black-Scholes option pricing model. Assumptions used in the calculation of these amounts are shown in Note 9, Stock-Based Compensation, to our audited consolidated financial statements included in our 2008 Annual Report on Form 10-K filed with the SEC on March 13, 2009. |
27
(5) | For Mr. R.E. Dauch 2007 includes $3,627,945 for PARS and RSU awards and $1,989,538 for stock option awards recognized on his attaining normal retirement age, in accordance with SFAS 123R, due to retirement vesting provisions of the awards. | |
(6) | This column reflects the annualized increase in pension value under the Salaried Retirement Program and the Supplemental Executive Retirement Program (SERP). There are no above-market or preferential earnings on compensation deferred under our Executive Deferred Compensation Plan. | |
(7) | Includes, for 2008, employer contributions under the Salaried Savings Plan, our tax-qualified defined contribution retirement plan; executive life insurance premiums; and personal umbrella liability insurance premiums. Also includes meals provided during business hours and personal use of Company-provided vehicles for Mr. R.E. Dauch, Mr. Simonte and Mr. Lancaster, and executive physical examinations for Mr. R.E. Dauch and Mr. Lancaster. Employer contributions under the Companys 401(k) Plan consisted of matching contributions of $10,146 for Mr. R.E. Dauch and Mr. Lancaster; $11,104 for Mr. Simonte; $8,135 for Mr. Rahangdale and $7,750 for Mr. D.C. Dauch; retirement contributions of $11,500 for Mr. D.C. Dauch and $9,488 for Mr. Simonte. The total for Mr. R.E. Dauch includes $67,775 for executive life insurance premiums. |
All Other |
||||||||||||||||||||||||||||||||||||||||
Option Awards: |
||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under |
All Other Stock |
Number of |
Exercise or |
Grant Date |
||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Awards(1) |
Awards: Number of |
Securities |
Base Price of |
Fair Value of |
||||||||||||||||||||||||||||||||||||
Shares of Stock or |
Underlying |
Option Awards |
Stock and |
|||||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Units (#) | Options (#) | ($/Sh)(2) | Option Awards($)(3) | ||||||||||||||||||||||||||||||||
Richard E. Dauch
|
6/25/2008 6/25/2008 |
59,192 |
150,000 |
$ |
10.08 |
596,655 400,500 |
||||||||||||||||||||||||||||||||||
Michael K. Simonte
|
6/25/2008 | 52,500 | 105,000 | 210,000 | | |||||||||||||||||||||||||||||||||||
6/25/2008 | 10,000 | 100,800 | ||||||||||||||||||||||||||||||||||||||
6/25/2008 | 12,500 | $ | 10.08 | 33,375 | ||||||||||||||||||||||||||||||||||||
Yogendra N. Rahangdale
|
6/25/2008 6/25/2008 |
39,000 |
33,000 |
$ |
10.08 |
393,120 88,110 |
||||||||||||||||||||||||||||||||||
David C. Dauch
|
6/25/2008 | 62,500 | 125,000 | 250,000 | | |||||||||||||||||||||||||||||||||||
6/25/2008 | 12,000 | 120,960 | ||||||||||||||||||||||||||||||||||||||
6/25/2008 | 15,500 | $ | 10.08 | 41,385 | ||||||||||||||||||||||||||||||||||||
Patrick S. Lancaster
|
6/25/2008 6/25/2008 |
14,500 |
12,000 |
$ |
10.08 |
146,160 32,040 |
||||||||||||||||||||||||||||||||||
(1) | Performance awards were granted under the 1999 Stock Incentive Plan. Performance award grant targets were calculated based on a percentage of the NEOs base salary. The amount paid out will be determined by Relative Company TSR for the performance period April 1, 2008 through December 31, 2010. Relative TSR will be expressed as a percentile of the total shareholder returns for the companies in AAMs peer group as reported in the annual report to shareholders for the most recent fiscal year completed prior to the date of grant. | |
(2) | Equal to the closing market price of AAM common stock on June 25, 2008, the date of grant. | |
(3) | Grant date fair value is calculated in accordance with SFAS 123R and is generally the amount we would expense in our consolidated financial statements over the life of the award. The grant date fair value of option awards was $2.67 per share of common stock covered by the award, calculated using the Black-Scholes option pricing model. In determining the Black-Scholes value, the exercise price of $10.08 was used. The grant date fair value of stock awards was $10.08 per share of common stock covered by the award, the closing market price of AAM common stock on the date of grant. For additional information on the valuation assumptions, refer to Note 9, |
28
Stock-Based Compensation, to our audited consolidated financial statements included in our 2008 Annual Report on Form 10-K filed with the SEC on March 13, 2009. |
| Annual base salary (2008 $1,645,600), subject to annual adjustment by the Compensation Committee; | |
| Annual cash bonus in an amount determined by the Compensation Committee based on our financial performance, relative to our competitor peer group: |
| equal to 3 times annual base salary if we continue to outperform our competitor peer group; | |
| greater than 3 times annual base salary if we outperform our competitor peer group by greater than the historical amount; or | |
| up to the amount of Mr. R.E. Dauchs base salary if we do not outperform competitor peer group; |
| Annual equity awards consisting of options to purchase 150,000 shares each year and restricted stock having an equivalent value, determined based on AAMs standard valuation methodology for annual grant to the options granted for that year; | |
| Reimbursement of premiums under a $5 million life insurance policy purchased by Mr. R.E. Dauch; | |
| Annual executive physical examination and health and disability coverage as provided to other senior executives; and | |
| Use and maintenance of two Company-provided automobiles and the perquisites and other benefits provided to our senior executives. |
29
Total Shareholder |
Target Level |
|||||||
Return | Payout | |||||||
Threshold
|
35th percentile | 50 | % | |||||
Target
|
50th percentile | 100 | % | |||||
Maximum
|
75th percentile | 200 | % |
30
Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Market |
||||||||||||||||||||||||||||||
Number of |
Value of |
|||||||||||||||||||||||||||||
Shares |
Shares |
|||||||||||||||||||||||||||||
Number of |
Number of |
or Units |
or Units |
|||||||||||||||||||||||||||
Securities |
Securities |
of Stock |
of Stock |
|||||||||||||||||||||||||||
Underlying |
Underlying |
That |
That |
|||||||||||||||||||||||||||
Unexercised |
Unexercised |
Option |
Have |
Have |
||||||||||||||||||||||||||
Options |
Options |
Exercise |
Option |
Not |
Not |
|||||||||||||||||||||||||
Exercisable |
Unexercisable |
Price |
Expiration |
Vested |
Vested(12) |
|||||||||||||||||||||||||
Name | (#) | (#) | ($) | Date | (#) | ($) | ||||||||||||||||||||||||
Richard E. Dauch
|
215,000 | 15.32 | 5/19/2010 | 180,000 | (4) | 520,200 | ||||||||||||||||||||||||
240,000 | 8.85 | 4/2/2011 | 120,000 | (5) | 346,800 | |||||||||||||||||||||||||
300,000 | 24.15 | 1/23/2012 | 59,192 | (3) | 171,065 | |||||||||||||||||||||||||
300,000 | 23.73 | 1/22/2013 | ||||||||||||||||||||||||||||
300,000 | 38.70 | 2/2/2014 | ||||||||||||||||||||||||||||
150,000 | 26.65 | 3/15/2015 | ||||||||||||||||||||||||||||
100,500 | 49,500 | (1) | 15.58 | 3/15/2016 | ||||||||||||||||||||||||||
49,500 | 100,500 | (2) | 26.02 | 3/14/2017 | ||||||||||||||||||||||||||
150,000 | (3) | 10.08 | 6/25/2018 | |||||||||||||||||||||||||||
Michael K. Simonte
|
39,664 | 15.56 | 2/2/2011 | 3,300 | (6)(9) | 9,537 | ||||||||||||||||||||||||
7,500 | 15.32 | 5/19/2010 | 2,200 | (7)(9) | 6,358 | |||||||||||||||||||||||||
10,000 | 8.85 | 4/2/2011 | 3,600 | (6)(10) | 10,404 | |||||||||||||||||||||||||
9,500 | 24.15 | 1/23/2012 | 2,400 | (7)(10) | 6,936 | |||||||||||||||||||||||||
10,000 | 23.73 | 1/22/2013 | 3,600 | (6)(11) | 10,404 | |||||||||||||||||||||||||
8,500 | 38.70 | 2/2/2014 | 2,400 | (7)(11) | 6,936 | |||||||||||||||||||||||||
9,000 | 26.65 | 3/15/2015 | 10,000 | (8) | 28,900 | |||||||||||||||||||||||||
6,700 | 3,300 | (1) | 15.58 | 3/15/2016 | ||||||||||||||||||||||||||
3,300 | 6,700 | (2) | 26.02 | 3/14/2017 | ||||||||||||||||||||||||||
12,500 | (3) | 10.08 | 6/25/2018 | |||||||||||||||||||||||||||
Yogendra N. Rahangdale
|
40,000 | 24.15 | 1/23/2012 | 4,200 | (6)(9) | 12,138 | ||||||||||||||||||||||||
39,000 | 23.73 | 1/22/2013 | 2,800 | (7)(9) | 8,092 | |||||||||||||||||||||||||
45,000 | 38.70 | 2/2/2014 | 15,000 | (6)(10) | 43,350 | |||||||||||||||||||||||||
12,000 | 26.65 | 3/15/2015 | 10,000 | (7)(10) | 28,900 | |||||||||||||||||||||||||
28,140 | 13,860 | (1) | 15.58 | 3/15/2016 | 14,400 | (6)(11) | 41,616 | |||||||||||||||||||||||
13,200 | 26,800 | (2) | 26.02 | 3/14/2017 | 9,600 | (7)(11) | 27,744 | |||||||||||||||||||||||
33,000 | (3) | 10.08 | 6/25/2018 | 39,000 | (3) | 112,710 | ||||||||||||||||||||||||
David C. Dauch
|
7,260 | 8.85 | 4/2/2011 | 4,200 | (6)(9) | 12,138 | ||||||||||||||||||||||||
16,750 | 24.15 | 1/23/2012 | 2,800 | (7)(9) | 8,092 | |||||||||||||||||||||||||
28,000 | 23.73 | 1/22/2013 | 4,800 | (6)(10) | 13,872 | |||||||||||||||||||||||||
28,000 | 38.70 | 2/2/2014 | 3,200 | (7)(10) | 9,248 | |||||||||||||||||||||||||
12,000 | 26.65 | 3/15/2015 | 4,500 | (6)(11) | 13,005 | |||||||||||||||||||||||||
10,050 | 4,950 | (1) | 15.58 | 3/15/2016 | 3,000 | (7)(11) | 8,670 | |||||||||||||||||||||||
4,290 | 8,710 | (2) | 26.02 | 3/14/2017 | 12,000 | (8) | 34,680 | |||||||||||||||||||||||
15,500 | (3) | 10.08 | 6/25/2018 | |||||||||||||||||||||||||||
Patrick S. Lancaster
|
124,856 | 4.26 | 10/28/2009 | 3,600 | (6)(9) | $ | 10,404 | |||||||||||||||||||||||
18,000 | 15.32 | 5/19/2010 | 2,400 | (7)(9) | 6,936 | |||||||||||||||||||||||||
35,000 | 8.85 | 4/2/2011 | 3,900 | (6)(10) | 11,271 | |||||||||||||||||||||||||
40,000 | 24.15 | 1/23/2012 | 2,600 | (7)(10) | 7,514 | |||||||||||||||||||||||||
30,000 | 23.73 | 1/22/2013 | 3,300 | (6)(11) | 9,537 | |||||||||||||||||||||||||
25,000 | 38.70 | 2/2/2014 | 2,200 | (7)(11) | 6,358 | |||||||||||||||||||||||||
9,000 | 26.65 | 3/15/2015 | 14,500 | (3) | 41,905 | |||||||||||||||||||||||||
7,370 | 3,630 | (1) | 15.58 | 3/15/2016 | ||||||||||||||||||||||||||
3,135 | 6,365 | (2) | 26.02 | 3/14/2017 | ||||||||||||||||||||||||||
12,000 | (3) | 10.08 | 6/25/2018 | |||||||||||||||||||||||||||
31
(1) | Granted under the 1999 Stock Incentive Plan on March 15, 2006. The remaining the shares vest on March 15, 2009. | |
(2) | Granted under the 1999 Stock Incentive Plan on March 14, 2007. Approximately one half of the shares vest on each of March 14, 2009, and March 14, 2010. | |
(3) | Granted under the 1999 Stock Incentive Plan on June 25, 2008. Approximately one-third of the shares vest on each of June 25, 2009, June 25, 2010 and March 14, 2011. | |
(4) | Reflects restricted stock awarded in connection with Mr. R.E. Dauchs employment agreement extension in 2005. The restricted stock vests on December 31, 2009, contingent upon Mr. R.E. Dauchs serving the extended term of his employment agreement. | |
(5) | Reflects restricted stock units awarded in connection with Mr. R.E. Dauchs employment agreement extension. The restricted stock units vest on December 31, 2009, contingent upon Mr. R.E. Dauch serving the extended term of his employment agreement. | |
(6) | Reflects PARS granted under the 1999 Stock Incentive Plan. PARS vest on the fifth anniversary of the grant date, unless vesting is accelerated at the end of the third or fourth years after the grant date. Accelerated vesting is contingent upon our achievement of predetermined performance goals, measured by our total stockholder return relative to our competitor peer group. Vesting will not be accelerated unless stockholder return is positive. | |
(7) | Reflects RSUs granted under the 1999 Stock Incentive Plan. RSUs vest on the fifth anniversary of the grant date, unless vesting is accelerated at the end of the third or fourth years after the grant date. Accelerated vesting is contingent upon our achievement of predetermined performance goals, measured by our total stockholder return relative to our competitor peer group. Vesting will not be accelerated unless stockholder return is positive. | |
(8) | Reflects Restricted Stock granted under the 1999 Stock Incentive Plan on June 25, 2008. The restricted stock awards vest on March 14, 2011 | |
(9) | Granted on March 15, 2005. The PARS and RSUs vest on March 15, 2010. Vesting of these awards did not accelerate on March 15, 2009. | |
(10) | Granted on March 15, 2006. The PARS and RSUs vest on March 15, 2011, unless vesting is accelerated on March 15, 2009 or March 15, 2010. Vesting of these awards did not accelerate on March 15, 2009. | |
(11) | Granted on March 14, 2007. The PARS and RSUs vest on March 14, 2012, unless vesting is accelerated on March 14, 2010 or March 14, 2011. | |
(12) | Reflects the closing market value on December 31, 2008 ($2.89), of the number of shares of AAM common stock covered by outstanding PARS, RSUs, restricted stock and restricted stock unit awards on December 31, 2008. |
32
Number of |
Present |
||||||||||||
Years of |
Value of |
||||||||||||
Credited |
Accumulated |
||||||||||||
Service |
Benefit |
||||||||||||
Name | Plan Name | (#) | ($) | ||||||||||
Richard E.
Dauch(1)
|
AAM Retirement Program for Salaried Employees | 14.8333 | 672,838 | ||||||||||
AAM Supplemental Executive Retirement Program | 14.8333 | (2) | 13,266,174 | ||||||||||
Michael K. Simonte
|
AAM Retirement Program for Salaried Employees | 8.0833 | (3) | 83,428 | |||||||||
AAM Supplemental Executive Retirement Program | 10.0833 | 167,186 | |||||||||||
Yogendra N. Rahangdale(4)
|
AAM Retirement Program for Salaried Employees | 13.4167 | 603,021 | ||||||||||
AAM Supplemental Executive Retirement Program | 13.4167 | 408,872 | |||||||||||
David C. Dauch
|
AAM Retirement Program for Salaried Employees | 11.5000 | (3) | 125,230 | |||||||||
AAM Supplemental Executive Retirement Program | 13.5000 | 335,974 | |||||||||||
Patrick S.
Lancaster(5)
|
AAM Retirement Program for Salaried Employees | 14.5833 | 650,265 | ||||||||||
AAM Supplemental Executive Retirement Program | 14.5833 | 307,462 | |||||||||||
(1) | Mr. R.E. Dauch was eligible to retire on December 31, 2008 with full benefits under the Salaried Retirement Program and the SERP. | |
(2) | We agreed to credit Mr. R.E. Dauch with 20 years of service, effective December 31, 2009, provided he serves the extended term of his employment agreement extension dated November 3, 2005. | |
(3) | Benefits were frozen, effective December 31, 2006, under the Salaried Retirement Program for Mr. Simonte, and Mr. D.C. Dauch. | |
(4) | Mr. Rahangdale was eligible to retire on December 31, 2008 under both the Salaried Retirement Program and the SERP, as he is over 55 years of age and has more than 10 years of credited service. He qualifies for a reduced benefit of approximately 93% of the unreduced benefit under the Salaried Retirement Program and qualifies for the basic form of benefit under the SERP. | |
(5) | Mr. Lancaster was eligible to retire on December 31, 2008 under both the Salaried Retirement Program and the SERP, as he is over 55 years of age and has more than 10 years of credited service. He qualifies for a reduced benefit of approximately 95% of the unreduced benefit under the Salaried Retirement Program and qualifies for the basic form of benefit under the SERP. |
33
| Two percent of the executives average monthly salary (as determined for the Salaried Retirement Program excluding the limitations as specified under the Internal Revenue Code), multiplied by the executives years of credited service; less | |
| The benefit payable to the executive under the Salaried Retirement Program (without reduction for survivor benefits), plus two percent of the maximum monthly social security benefit payable at age 65 multiplied by the executives years of credited service. |
| 1.5 percent of the executives average monthly salary (as determined for the Salaried Retirement Program excluding the limitations as specified under the Internal Revenue Code) and average monthly incentive compensation (determined as the average of the highest five of the executives last 10 annual cash incentive awards, divided by 12) multiplied by the executives years of credited service; less | |
| The benefit payable to the executive under the Salaried Retirement Program (without reduction for survivor benefits), plus the maximum monthly social security benefit payable at age 65. |
34
Executive |
Registrant |
Aggregate |
Aggregate |
Aggregate |
|||||||||||||||||||||
Contributions |
contributions in |
Earnings |
Withdrawals |
Balance at |
|||||||||||||||||||||
in Last
FY(1) |
Last
FY(2) |
In Last
FY(3) |
Distributions(4) |
Last
FYE(5) |
|||||||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||
Richard E. Dauch
|
| | (765,135 | ) | | 3,729,918 | |||||||||||||||||||
Michael K. Simonte
|
| | | | | ||||||||||||||||||||
Yogendra N. Rahangdale
|
284,100 | 648 | (322,869 | ) | | 1,111,422 | |||||||||||||||||||
David C. Dauch
|
| | (56,943 | ) | | 186,046 | |||||||||||||||||||
Patrick S. Lancaster
|
| | 6,411 | 181,204 | 221,189 | ||||||||||||||||||||
(1) | For Mr. Rahangdale, reflects a portion of his 2008 base salary that was deferred in 2008 ($21,600) and a portion of his 2007 incentive compensation award paid June 25, 2008 ($262,500). Base salary amounts deferred in 2008 are included in the salary column of the Summary Compensation Table for 2008 and the 2007 bonus amount deferred is included in the bonus column in 2007. | |
(2) | Reflects a 3% Company match on 2008 base salary amounts deferred in 2008. Amount shown is included in the all other compensation column in the Summary Compensation Table. | |
(3) | Reflects hypothetical accrued earnings during 2008 on notional investments designed to track the performance of funds similar to those available to participants in the Companys 401(k) Plan. None of the earnings shown in this column are reported as compensation in the Summary Compensation Table. | |
(4) | For Mr. Lancaster, reflects a lump-sum interim distribution from his deferral of a portion of his 2000 base salary and bonus. | |
(5) | Reflects amounts that were previously reported in the Summary Compensation Table as compensation for 2007 or 2006 of $312,000 for Mr. Rahangdale and $16,170 for Mr. D.C. Dauch. |
35
Rate of |
Rate of |
||||||||
Name of Fund | Return | Name of Fund | Return | ||||||
Fidelity Retirement Money Market Portfolio
|
2.93% | Fidelity Freedom Income Fund | (12.14)% | ||||||
PIMCO Total Return Fund
|
4.82% | Fidelity Freedom 2000 Fund | (14.00)% | ||||||
PIMCO High Yield Fund
|
(23.69)% | Fidelity Freedom 2005 Fund | (24.45)% | ||||||
Fifth Third Disciplined Large Cap Value Fund
|
(36.37)% | Fidelity Freedom 2010 Fund | (25.32)% | ||||||
Domini Social Equity Fund
|
(37.81)% | Fidelity Freedom 2015 Fund | (27.15)% | ||||||
Spartan U.S. Equity Index Fund
|
(37.03)% | Fidelity Freedom 2020 Fund | (32.12)% | ||||||
American Funds Growth Fund of America
|
(38.88)% | Fidelity Freedom 2025 Fund | (33.66)% | ||||||
Fidelity Growth Company Fund
|
(40.90)% | Fidelity Freedom 2030 Fund | (36.93)% | ||||||
Fidelity Low-Priced Stock Fund
|
(36.17)% | Fidelity Freedom 2035 Fund | (37.76)% | ||||||
First American Mid Cap Growth Opportunities
|
(45.66)% | Fidelity Freedom 2040 Fund | (38.80)% | ||||||
American Beacon Small Cap Value Fund
|
(31.92)% | Fidelity Freedom 2045 Fund | (39.15)% | ||||||
Munder Small Cap Value Fund
|
(47.11)% | Fidelity Freedom 2050 Fund | (40.61)% | ||||||
Fidelity Diversified International Fund
|
(45.21)% | ||||||||
| a lump-sum severance payment equal to 3.5 times his (1) annual base salary plus (2) the highest of his average annual bonus for the three years preceding the year of termination or the three years preceding the year of the change in control, or his target bonus for the year of termination or the change in control; | |
| a prorated portion of his annual cash bonus for the year of termination and any unpaid portion of the bonuses earned for prior years; | |
| accelerated vesting of outstanding equity awards; |
36
| a lump-sum payment of $3 million in cash for each annual grant of equity awards that he would have received had he remained employed through December 31, 2009; | |
| continuation of medical, dental, vision, disability and life insurance coverage for 3.5 years; | |
| continuation of the perquisites under his employment agreement (including a Company-paid annual executive physical examination and reimbursement of premiums for his purchase of a $5 million executive life insurance policy for 3.5 years); | |
| 3.5 years of additional age and service credit under our nonqualified employee pension and welfare benefit plans for purposes of benefit accrual, matching contributions, vesting and retirement eligibility; | |
| continued use of two Company-provided vehicles for 3.5 years; | |
| outplacement services of up to 10 percent of annual base salary or, if greater, $40,000; and | |
| reasonable legal fees in connection with enforcement of the continuity agreement if he prevails in a dispute. |
| an acquisition of 20 percent or more of AAM stock by an unrelated third party; | |
| a merger, business combination, sale, liquidation or dissolution, where preexisting shareholders do not own at least 51 percent of the surviving entity; or | |
| a change in the majority of our incumbent Board within any 24-month period. |
| is convicted of a felony involving an intentional act; | |
| engages in dishonesty or fraud; or | |
| breaches any of his material obligations to AAM, including willful neglect or misconduct of his duties or willful and material breach of any of the terms and conditions of his employment agreement. |
| reduces his base salary or bonus opportunity; | |
| substantially reduces his duties, responsibilities or reporting responsibilities; or | |
| relocates him outside of the Detroit-metropolitan area. |
| severance payments equal to two years of his annual base salary; | |
| continuation of his health care benefits for two years; | |
| bonus payments accrued as of the termination date; and |
37
| reimbursement of premiums for his purchase of a $5 million executive life insurance policy for two years. |
| a non-disclosure and confidentiality provision which extends for the term of the agreement and for two years following termination or expiration of the agreement; | |
| a non-competition covenant, which prohibits him, throughout the term of the employment agreement and for two years following the termination or expiration of the agreement, from directly or indirectly engaging in any business competitive with AAM and our products and business plans; and | |
| a covenant prohibiting solicitation of our employees and customers for two years following the termination or expiration of the agreement. |
| a lump sum severance payment equal to 2.5 times his (1) annual base salary plus (2) the highest of his average annual bonus for the three years preceding the year of termination or the three years preceding the year of the change in control, or his target bonus for the year of termination or the change in control; | |
| a prorated portion of his incentive compensation award for the year of termination and any unpaid portion of the awards earned for prior years; | |
| acceleration of vesting of outstanding equity awards; | |
| continuation of medical, dental, vision, disability and life insurance coverage for 2.5 years; | |
| 2.5 years of additional age and service credit under our nonqualified employee pension and welfare benefit plans for purposes of benefit accrual, matching contributions, vesting, and retirement eligibility; | |
| continued use of a Company-provided vehicle for six months; | |
| outplacement services of up to 10 percent of annual base salary or, if greater, $40,000; and | |
| reasonable legal fees in connection with enforcement of the continuity agreement if the named executive prevails in a dispute. |
38
| willful and continued failure to perform substantially all of his duties for 10 days following written demand from the Board; | |
| conviction or no-contest plea with respect to a felony or a misdemeanor involving moral turpitude; or | |
| willful inaction or misconduct in connection with his duties, or any act or omission which is injurious to the financial condition or business reputation of AAM or our affiliates. |
| any material and adverse diminution in the named executives duties, title or responsibilities from those in effect immediately prior to the change in control; | |
| any reduction in annual base salary or annual cash bonus percentage target from those in effect immediately prior to the change in control; | |
| any requirement that the named executive be based at a location more that 50 miles from the location at which he was based immediately prior to the change in control; and | |
| any failure by the Company to obtain from any successor to the Company an agreement reasonably satisfactory to the named executive to assume and perform the continuity agreement. |
| directly or indirectly engaging in any business or activity that is in competition with AAM and its products for one year following termination; | |
| recruiting, soliciting or inducing (or attempting to recruit, solicit or induce) any of our employees to leave AAM, or offer employment to our employees or otherwise interfere with our relationship with our employees, agents or consultants; and | |
| using, exploiting, disclosing or communicating our confidential information to any third party without our prior written consent. |
39
Not for |
Involuntary/ |
||||||||||||||||||||||||
Cause/By |
Good Reason |
||||||||||||||||||||||||
Employee for |
Termination |
||||||||||||||||||||||||
For Cause |
Good Reason |
Disability |
(Change in |
||||||||||||||||||||||
Termination |
Termination |
Retirement(1) |
Retirement |
Control) |
|||||||||||||||||||||
($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Compensation:
|
|||||||||||||||||||||||||
Bonus(2)
|
| 5,033,333 | 5,033,333 | 5,033,333 | 5,033,333 | ||||||||||||||||||||
Severance(3)
|
| 3,291,200 | | | 23,376,267 | ||||||||||||||||||||
Retirement Plans:
|
|||||||||||||||||||||||||
Defined Benefit
|
|||||||||||||||||||||||||
Retirement
Program(4)
|
| | 672,838 | 672,838 | 672,838 | ||||||||||||||||||||
SERP(5)
|
| | 13,266,174 | 13,266,174 | 17,183,861 | ||||||||||||||||||||
Welfare
Benefit(6)
|
| | 806,148 | 806,148 | 806,148 | ||||||||||||||||||||
Equity:
|
|||||||||||||||||||||||||
Stock
Options(7)
|
| | | | 3,000,000 | ||||||||||||||||||||
11/3/2005
Awards(8)
|
| 867,000 | 867,000 | | 867,000 | ||||||||||||||||||||
Restricted
Stock(9)
|
| | 171,065 | | 171,065 | ||||||||||||||||||||
Other Benefits:
|
|||||||||||||||||||||||||
Deferred
Compensation(10)
|
3,729,918 | 3,729,918 | 3,729,918 | 3,729,918 | 3,729,918 | ||||||||||||||||||||
Health
care(11)
|
| 24,693 | | | 2,905 | ||||||||||||||||||||
Life
Insurance(12)
|
| 47,780 | 47,780 | 47,780 | 83,615 | ||||||||||||||||||||
Use of
Vehicles(13)
|
| | | | 215,758 | ||||||||||||||||||||
Other(14)
|
| | | | 164,560 | ||||||||||||||||||||
Effect of Modified
280G Tax Gross-Up |
| | | | (291,987 | ) | |||||||||||||||||||
Total
|
3,729,918 | 12,993,924 | 24,594,256 | 23,556,191 | 55,015,281 | ||||||||||||||||||||
(1) | Assumes retirement due to total and permanent disability on December 31, 2008. | |
(2) | Reflects a cash bonus earned in 2008 using the average of the last three cash bonuses for the years ending December 31, 2007, 2006 and 2005. | |
(3) | Upon termination without cause or for good reason (defined in employment agreement), Mr. R.E. Dauch would receive severance equal to two years annual base salary payable semimonthly. Upon termination under a change in control, Mr. R.E. Dauch would receive a lump-sum severance payment. | |
(4) | Reflects a present value of a joint and survivor annuity benefit payable monthly. | |
(5) | The present value calculated under the alternative formula assuming a joint and survivor annuity benefit payable monthly. The present value calculated with an additional 3.5 years of credited service under the alternative formula assuming a joint and survivor annuity benefit payable monthly under a change in control. |
40
(6) | Reflects benefits for Mr. R.E. Dauch and his spouse assuming retirement or disability on December 31, 2008 as set forth in his employment agreement. | |
(7) | Generally, stock option awards vest upon termination of employment due to death, disability, retirement or upon a change in control. At December 31, 2008, the fair market value of the underlying shares was less than the exercise or base price of unvested options. Upon a change in control, Mr. R.E. Dauch will receive $3 million in a lump sum for each grant of equity awards he would have received annually had he remained employed through December 31, 2009. | |
(8) | The November 3, 2005 awards vest on December 31, 2009, contingent upon Mr. R.E. Dauch serving the extended term of his employment agreement. Vesting is accelerated upon termination of employment without cause, disability or upon a change in control. The value of these grants reflects the fair market value of the unvested awards. | |
(9) | Vesting of restricted stock awards is accelerated upon disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEO of the Company or upon a change in control. | |
(10) | Assumed payable in a lump sum upon occurrence of termination event. | |
(11) | Upon termination without cause or for good reason (as defined in his employment agreement), Mr. R.E. Dauch would receive two years of health care benefits. Upon termination under a change in control, benefits for annual executive physical examination continue for 3.5 years. | |
(12) | Represents reimbursement for the premiums associated with Mr. R.E. Dauchs purchase of a $5 million executive life insurance policy for two years under all scenarios except upon a change in control. Upon termination under a change in control, reimbursement continues for 3.5 years. | |
(13) | Reflects lease payments and administrative fees for the use of two Company-provided vehicles for 3.5 years. | |
(14) | Reflects professional outplacement services equal to 10% of base salary. |
41
Involuntary/ |
|||||||||||||||||||||||||
Not for |
Good Reason |
||||||||||||||||||||||||
Cause/By |
Termination |
||||||||||||||||||||||||
For Cause |
Employee for Good Reason |
Disability |
(Change in |
||||||||||||||||||||||
Resignation |
Termination |
Termination |
Retirement(1) |
Control) |
|||||||||||||||||||||
($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Compensation:
|
|||||||||||||||||||||||||
Bonus(2)
|
| | | 283,500 | 283,500 | ||||||||||||||||||||
Severance(3)
|
| | | | 1,417,500 | ||||||||||||||||||||
Long Term Incentives:
|
|||||||||||||||||||||||||
Stock
Options(4)
|
| | | | | ||||||||||||||||||||
PARS and
RSUs(5)
|
| | | 50,575 | 50,575 | ||||||||||||||||||||
Restricted
Stock(6)
|
| | | 28,900 | 28,900 | ||||||||||||||||||||
Performance
Award(7)
|
| | | 105,000 | 105,000 | ||||||||||||||||||||
Other Benefits:
|
|||||||||||||||||||||||||
Health
care(8)
|
| | | 182,442 | 22,854 | ||||||||||||||||||||
Disability(9)
|
| | | 2,369,986 | | ||||||||||||||||||||
Life
Insurance(10)
|
| | | 38,383 | 3,135 | ||||||||||||||||||||
Use of
Vehicles(11)
|
| | | | 8,718 | ||||||||||||||||||||
Other(12)
|
| | | | 40,000 | ||||||||||||||||||||
280G Tax
Gross-Up
|
| | | | 810,965 | ||||||||||||||||||||
Total
|
| | | 3,058,786 | 2,771,147 | ||||||||||||||||||||
(1) | Assumes total and permanent disability on December 31, 2008. Because Mr. Simonte has more than 10 years of service, he is eligible to retire due to total and permanent disability and receive pension and postretiree health care benefits. Amount assumes Mr. Simonte remains on leave as an employee until retirement. | |
(2) | Reflects a cash bonus earned at target in 2008. | |
(3) | Reflects a lump-sum severance payment upon termination under a change in control. | |
(4) | Generally, stock option awards vest upon termination of employment due to death, disability, retirement or upon a change in control. At December 31, 2008, the fair market value of the underlying shares was less than the exercise or base price of unvested options. | |
(5) | PARS and RSU awards vest upon termination of employment due to death, disability or upon a change in control. The value for PARS and RSUs reflects the fair market value of unvested awards. | |
(6) | Vesting of restricted stock awards is accelerated upon disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEO of the Company or upon a change in control. | |
(7) | The performance awards are payable at target if the participants employment terminates during the performance period due to disability or upon a change in control. | |
(8) | Under the disability scenario, reflects health care benefits to retirement. Upon termination under a change in control, health care benefits continue for 2.5 years. |
42
(9) | Reflects benefits equal to 100% of base salary for year one and 662/3% of base salary to retirement. | |
(10) | Under the disability scenario, reflects basic and supplemental life insurance benefits to retirement. Upon termination under a change in control, basic and supplemental life insurance benefits continue for 2.5 years. | |
(11) | Reflects lease payments and administrative fees for the use of a Company-provided vehicle for six months. | |
(12) | Reflects professional outplacement services. |
Not for |
Involuntary/ |
||||||||||||||||||||||||
Cause/By |
Good Reason |
||||||||||||||||||||||||
Employee for |
Termination |
||||||||||||||||||||||||
For Cause |
Good Reason |
Disability |
(Change in |
||||||||||||||||||||||
Termination |
Termination |
Retirement(1) |
Retirement |
Control) |
|||||||||||||||||||||
($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Compensation:
|
|||||||||||||||||||||||||
Bonus(2)
|
| | 381,600 | 381,600 | 381,600 | ||||||||||||||||||||
Severance(3)
|
| | | | 1,908,000 | ||||||||||||||||||||
Retirement Plans:
|
|||||||||||||||||||||||||
Defined Benefit
|
|||||||||||||||||||||||||
Retirement
Program(4)
|
| | 664,882 | 608,035 | 608,035 | ||||||||||||||||||||
SERP(5)
|
| | 230,364 | 286,218 | 912,137 | ||||||||||||||||||||
Welfare
Benefit(6)
|
| | 141,744 | 141,744 | 146,197 | ||||||||||||||||||||
Equity:
|
|||||||||||||||||||||||||
Stock
Options(7)
|
| | | | | ||||||||||||||||||||
PARS and
RSUs(8)
|
| | 161,840 | | 161,840 | ||||||||||||||||||||
Restricted
Stock(9)
|
| | 112,710 | | 112,710 | ||||||||||||||||||||
Other Benefits:
|
|||||||||||||||||||||||||
Deferred
Compensation(10)
|
1,111,422 | 1,111,422 | 1,111,422 | 1,111,422 | 1,111,422 | ||||||||||||||||||||
Use of
Vehicles(11)
|
| | | | 18,567 | ||||||||||||||||||||
Other(12)
|
| | | | 40,000 | ||||||||||||||||||||
280G Tax
Gross-Up
|
| | | | 1,157,195 | ||||||||||||||||||||
Total
|
1,111,422 | 1,111,422 | 2,804,562 | 2,529,019 | 6,557,703 | ||||||||||||||||||||
(1) | Assumes retirement due to total and permanent disability on December 31, 2008. | |
(2) | Reflects a cash bonus earned at target in 2008. | |
(3) | Reflects a lump-sum severance payment upon termination under a change in control. |
43
(4) | Reflects the present value of a joint and survivor annuity benefit payable monthly. Under the retirement and change in control scenarios, reflects a reduced benefit of approximately 93% of the unreduced benefit based on Mr. Rahangdales age at December 31, 2008. | |
(5) | The present value calculated under the basic formula assuming a joint and survivor annuity benefit payable monthly under the disability and retirement scenarios. The present value calculated with an additional 2.5 years of credited service under the alternative formula assuming a joint and survivor annuity benefit payable monthly under a change in control. | |
(6) | Reflects benefits for Mr. Rahangdale and his spouse assuming retirement on December 31, 2008 under the welfare plan effective January 1, 2008. | |
(7) | Generally, stock option awards vest upon termination of employment due to death, disability, retirement or upon a change in control. At December 31, 2008, the fair market value of underlying shares was less than the exercise or base price of unvested options. | |
(8) | PARS and RSU awards vest upon termination of employment due to death, disability or upon a change in control. The value for PARS and RSUs reflects the fair market value of unvested awards. | |
(9) | Vesting of restricted stock awards is accelerated upon disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEO of the Company or upon a change in control | |
(10) | Assumed payable in a lump sum upon occurrence of termination event. | |
(11) | Reflects lease payments and administrative fees for the use of a Company-provided vehicle for six months. | |
(12) | Reflects professional outplacement services. |
44
Involuntary/ |
|||||||||||||||||||||||||
Not for |
Good |
||||||||||||||||||||||||
Cause/By |
Reason |
||||||||||||||||||||||||
Employee for |
Termination |
||||||||||||||||||||||||
For Cause |
Good Reason |
Disability |
(Change in |
||||||||||||||||||||||
Resignation |
Termination |
Termination |
Retirement(1) |
Control) |
|||||||||||||||||||||
($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Compensation:
|
|||||||||||||||||||||||||
Bonus(2)
|
| | | 379,500 | 379,500 | ||||||||||||||||||||
Severance(3)
|
| | | | 1,897,500 | ||||||||||||||||||||
Long Term Incentives:
|
|||||||||||||||||||||||||
Stock
Options(4)
|
| | | | | ||||||||||||||||||||
PARS and
RSUs(5)
|
| | | 65,025 | 65,025 | ||||||||||||||||||||
Restricted
Stock(6)
|
| | | 34,680 | 34,680 | ||||||||||||||||||||
Performance
Award(7)
|
| | | 125,000 | 125,000 | ||||||||||||||||||||
Other Benefits:
|
|||||||||||||||||||||||||
Deferred
Compensation(8)
|
186,046 | 186,046 | 186,046 | 186,046 | 186,046 | ||||||||||||||||||||
Health
care(9)
|
| | | 185,065 | 22,854 | ||||||||||||||||||||
Disability(10)
|
| | | 2,913,696 | | ||||||||||||||||||||
Life
Insurance(11)
|
| | | 52,561 | 4,197 | ||||||||||||||||||||
Use of
Vehicles(12)
|
| | | | 17,003 | ||||||||||||||||||||
Other(13)
|
| | | | 40,000 | ||||||||||||||||||||
280G Tax
Gross-Up
|
| | | | | ||||||||||||||||||||
Total
|
186,046 | 186,046 | 186,046 | 3,941,573 | 2,771,805 | ||||||||||||||||||||
(1) | Assumes total and permanent disability on December 31, 2008. Because Mr. D.C. Dauch has more than 10 years of service, he is eligible to retire due to total and permanent disability and receive pension and postretiree health care benefits. Amounts assume Mr. D.C. Dauch remains on leave as an employee until retirement. | |
(2) | Reflects a cash bonus earned at target in 2008. | |
(3) | Reflects a lump-sum severance payment upon termination under a change in control. | |
(4) | Generally, stock option awards vest upon termination of employment due to death, disability or retirement or upon a change in control. At December 31, 2008, the fair market value of the underlying shares was less than the exercise or base price of unvested options. | |
(5) | PARS and RSU awards vest upon termination of employment due to death, disability or upon a change in control. The value for PARS and RSUs reflects the fair market value of unvested awards. | |
(6) | Vesting of restricted stock awards is accelerated upon disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEO of the Company or upon a change in control. | |
(7) | The performance awards are payable at target if the participants employment terminates during the performance period due to disability or upon a change in control. |
45
(8) | Assumed payable in a lump sum upon occurrence of termination event. | |
(9) | Under the disability scenario, reflects health care benefits to retirement. Upon termination under a change in control, health care benefits continue for 2.5 years. | |
(10) | Reflects benefits equal to 100% of base salary for year one and 60% of base salary to retirement. | |
(11) | Under the disability scenario, reflects basic and supplemental life insurance benefits to retirement. Upon termination under a change in control, basic and supplemental life insurance benefits continue for 2.5 years. | |
(12) | Reflects lease payments and administrative fees for the use of a Company-provided vehicle for six months. | |
(13) | Reflects professional outplacement services. |
Not for |
Involuntary/ |
||||||||||||||||||||||||
Cause/By |
Good Reason |
||||||||||||||||||||||||
Employee for |
Termination |
||||||||||||||||||||||||
For Cause |
Good Reason |
Disability |
(Change in |
||||||||||||||||||||||
Termination |
Termination |
Retirement(1) |
Retirement |
Control) |
|||||||||||||||||||||
($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Compensation:
|
|||||||||||||||||||||||||
Bonus(2)
|
| | 268,900 | 268,900 | 268,900 | ||||||||||||||||||||
Severance(3)
|
| | | | 1,344,500 | ||||||||||||||||||||
Retirement Plans:
|
|||||||||||||||||||||||||
Defined Benefit
|
|||||||||||||||||||||||||
Retirement
Program(4)
|
| | 692,456 | 654,226 | 654,226 | ||||||||||||||||||||
SERP(5)
|
| | 78,771 | 115,569 | 694,834 | ||||||||||||||||||||
Welfare
Benefit(6)
|
| | 106,001 | 106,001 | 110,460 | ||||||||||||||||||||
Equity:
|
|||||||||||||||||||||||||
Stock
Options(7)
|
| | | | | ||||||||||||||||||||
PARS and
RSUs(8)
|
| | 52,020 | | 52,020 | ||||||||||||||||||||
Restricted
Stock(9)
|
| | 41,905 | | 41,905 | ||||||||||||||||||||
Other Benefits:
|
|||||||||||||||||||||||||
Deferred
Compensation(10)
|
221,189 | 221,189 | 221,189 | 221,189 | 221,189 | ||||||||||||||||||||
Use of
Vehicles(11)
|
| | | | 7,393 | ||||||||||||||||||||
Other(12)
|
| | | | 40,000 | ||||||||||||||||||||
280G Tax
Gross-Up
|
| | | | 900,557 | ||||||||||||||||||||
Total
|
221,189 | 221,189 | 1,461,242 | 1,365,885 | 4,335,984 | ||||||||||||||||||||
(1) | Assumes retirement due to total and permanent disability on December 31, 2008. | |
(2) | Reflects a cash bonus earned at target in 2008. |
46
(3) | Reflects a lump-sum severance payment upon termination under a change in control. | |
(4) | Reflects a joint and survivor annuity benefit payable monthly. Under the retirement and change in control scenarios, reflects a reduced benefit of approximately 95% of the unreduced benefit based on Mr. Lancasters age at December 31, 2008. | |
(5) | The present value calculated under the basic formula assuming a joint and survivor annuity benefit payable monthly under the disability and retirement scenarios. The present value calculated with an additional 2.5 years of credited service under the alternative formula assuming a joint and survivor annuity benefit payable monthly under a change in control. | |
(6) | Reflects benefits for Mr. Lancaster and his spouse assuming retirement on December 31, 2008 under the welfare benefit plan effective January 1, 2008. | |
(7) | Generally, stock option awards vest upon termination of employment due to death, disability or retirement or upon a change in control. At December 31, 2008, the fair market value of the underlying shares is less than the exercise or base price of unvested options. | |
(8) | PARS and RSU awards vest upon termination of employment due to death, disability or upon a change in control. The value for PARS and RSUs reflects the fair market value of unvested awards. | |
(9) | Vesting of restricted stock awards is accelerated upon disability, termination of employment by the Company pursuant to a reduction in force or similar program approved by the CEO of the Company or upon a change in control | |
(10) | Assumed payable in a lump sum upon occurrence of termination event. | |
(11) | Reflects lease payments and administrative fees for the use of a Company-provided vehicle for six months. | |
(12) | Reflects professional outplacement services. |
Fees Earned or |
Stock |
Option |
||||||||||||||||||
Paid in Cash |
Awards(2) |
Awards(3) |
Total |
|||||||||||||||||
Name | ($) | ($) | ($) | ($) | ||||||||||||||||
John A.
Casesa(1)
|
75,500 | 68,176 | | 143,676 | ||||||||||||||||
Elizabeth A. Chappell
|
75,500 | 84,208 | | 159,708 | ||||||||||||||||
Forest J. Farmer
|
96,500 | 84,208 | | 180,708 | ||||||||||||||||
Richard C. Lappin
|
69,500 | 84,208 | | 153,708 | ||||||||||||||||
William P. Miller II
|
77,500 | 84,208 | 8,750 | 170,458 | ||||||||||||||||
Larry K. Switzer
|
65,500 | 84,208 | 8,750 | 158,458 | ||||||||||||||||
Thomas K. Walker
|
107,500 | 84,208 | | 191,708 | ||||||||||||||||
Dr. Henry T. Yang
|
69,500 | 84,208 | | 153,708 | ||||||||||||||||
(1) | Mr. Casesa resigned from the Board effective February 10, 2009. | |
(2) | Reflects the amount recognized in accordance with SFAS 123R for the fiscal year ended December 31, 2008 for restricted stock units granted in 2008 and earlier. Grant date fair value is calculated using the closing market price of AAM common stock on the date of grant. The grant date fair value of awards granted in 2008 was $21.83 per share. As of December 31, 2008, each non-employee director had the following number of restricted stock units outstanding: Mr. Casesa 7,967; Ms. Chappell 11,100; Mr. Farmer 7,850; Mr. Lappin 7,117; Mr. Miller 14,350; Mr. Switzer 14,350; Mr. Walker 7,850; and Dr. Yang 11,100. |
47
(3) | Reflects the amount recognized in accordance with SFAS 123R for the fiscal year ended December 31, 2008 for stock options granted prior to 2008. Grant date fair value is calculated using a modified Black-Scholes option pricing model. Grants of stock options to non-employee directors ceased after 2005. As of December 31, 2008, each non-employee director had the following number of stock options outstanding: Mr. Casesa -0-; Ms. Chappell 5,000; Mr. Farmer 13,500; Mr. Lappin 7,500; Mr. Miller 7,500; Mr. Switzer 7,500; Mr. Walker 7,500; and Dr. Yang 7,500. |
Annual retainer
|
$ | 50,000 | ||
Board meeting attendance fee
|
1,500 | |||
Committee meeting attendance fee
|
||||
Committee chairman
|
3,000 | |||
Other committee members
|
2,000 | |||
Committee chairman attendance at meetings at the Company for
committee-related business
|
1,000 |
48
49
| each person known to us who beneficially owns more than 5 percent of AAM common stock; | |
| each of our non-employee directors and nominees; | |
| our Co-Founder, Chairman of the Board & Chief Executive Officer and the other named executive officers; and | |
| all directors, nominees and executive officers (as of March 3, 2009) as a group. |
Shares of |
||||||||
Common Stock |
Percent of |
|||||||
Beneficially |
Shares |
|||||||
Name and Address
|
Owned | Outstanding | ||||||
Barrow, Hanley, Mewhinney & Strauss, Inc.(1) | 4,805,090 | 8.85 | ||||||
2200 Ross Avenue, 31st Floor | ||||||||
Dallas, TX 75201 | ||||||||
Capital Research Global Investors(2) | 5,560,000 | 10.2 | ||||||
333 South Hope Street | ||||||||
Los Angeles, CA 90071 | ||||||||
Dimensional Fund Advisors LP(3) | 3,683,594 | 6.78 | ||||||
Palisades West, Building One | ||||||||
6300 Bee Cave Road | ||||||||
Austin, TX 78746 | ||||||||
FMR LLC(4) | 7,841,349 | 14.44 | ||||||
82 Devonshire Street | ||||||||
Boston, MA 02109 |
(1) | Based on the Schedule 13G/A filed by Barrow, Hanley, Mewhinney & Strauss, Inc., reporting shared voting power over 2,652,100 shares, sole voting power over 2,152,990 shares, and sole investment power over 4,805,090 shares. | |
(2) | Based on the Schedule 13G/A filed by Capital Research Global Investors, reporting sole voting and investment power over 5,560,000 shares. | |
(3) | Based on the Schedule 13G/A filed by Dimensional Fund Advisors LP, reporting sole voting power over 3,596,277 shares and sole investment power over 3,683,594 shares. | |
(4) | Based on the Schedule 13G/A filed jointly by FMR LLC and Edward C. Johnson 3d, reporting sole voting power over 1,250,200 shares and sole investment power over 7,841,349 shares. |
50
Percent |
||||||||||||
Shares |
of |
|||||||||||
Beneficially |
Shares |
|||||||||||
Owned(2)(3) | Outstanding | |||||||||||
Directors/Nominees(1)
|
||||||||||||
Salvatore J. Bonanno, Sr.
|
12,000 | * | ||||||||||
Elizabeth A. Chappell
|
13,116 | * | ||||||||||
Forest J. Farmer
|
35,616 | * | ||||||||||
Richard C. Lappin
|
20,483 | * | ||||||||||
William P. Miller II
|
20,616 | * | ||||||||||
Larry K. Switzer
|
15,616 | * | ||||||||||
Thomas K. Walker
|
20,616 | * | ||||||||||
Dr. Henry T. Yang
|
15,616 | * | ||||||||||
Named Executive
Officers(3)(4)
|
||||||||||||
Richard E.
Dauch(5)
|
10,058,807 | 18.1 | ||||||||||
Michael K.
Simonte(6)
|
159,776 | * | ||||||||||
Yogendra N. Rahangdale
|
292,400 | * | ||||||||||
David C.
Dauch(7)
|
165,864 | * | ||||||||||
Patrick S. Lancaster
|
324,521 | * | ||||||||||
Directors/Nominees and Executive Officers as a Group
(25 persons)(8)
|
12,300,526 | 22.2 |
(*) | Less than 1 percent of the outstanding shares of AAM common stock. | |
(1) | John A. Casesa resigned as a director effective February 10, 2009, therefore, shares owned by Mr. Casesa have been excluded. | |
(2) | Includes restricted stock units (RSUs) awarded to non-employee directors that have vested or will vest within 60 days. For the number of RSUs held by each non-employee director, see footnote (2) to the 2008 Compensation of Non-Employee Directors Table. | |
(3) | Includes the following number of shares of common stock which may be acquired upon exercise of options that were exercisable or would become exercisable within 60 days: 5,000 for Ms. Chappell; 13,500 for Mr. Farmer; 7,500 for Messrs. Lappin, Miller, Switzer, Walker and Yang; 1,755,500 for Mr. R.E. Dauch; 110,864 for Mr. Simonte; 204,800 for Mr. Rahangdale; 115,720 for Mr. D.C. Dauch and 299,221 for Mr. Lancaster. | |
(4) | Includes shares of restricted stock held by named executive officers over which they have sole voting power but no investment power: 298,830 for Mr. R.E. Dauch; 20,500 for Mr. Simonte; 72,600 for Mr. Rahangdale; 25,500 for Mr. D.C. Dauch; and 25,300 for Mr. Lancaster. | |
(5) | Includes 1,332,065 shares of AAM common stock held in family trusts and 411,710 held in a charitable family foundation. Mr. R.E. Dauch shares voting and investment power over shares held by the family trusts and the charitable family foundation. Also includes 6,260,702 shares held by the Sandra J. Dauch Gift Trust, of which Mr. R.E. Dauch is trustee. | |
(6) | Includes 28,412 shares held in AAMs 401(k) Plan. | |
(7) | Includes 516 shares held in trusts for the benefit of Mr. D.C. Dauchs children. Mr. D.C. Dauch is also a nominee for election to the Board. | |
(8) | Includes shares held jointly with family members over which a director, nominee or executive officer shares voting and/or investment power. |
51
PROPOSAL 2: | RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2009 |
52
53
December 31, | ||||||||
2008 | 2007 | |||||||
Audit
Fees(1)
|
$ | 1,507,000 | $ | 1,427,000 | ||||
Audit Related
Fees(2)
|
| 20,000 | ||||||
Tax
Fees(3)
|
465,000 | 621,000 | ||||||
All Other Fees
|
| | ||||||
Total
|
$ | 1,972,000 | $ | 2,068,000 | ||||
(1) | Includes fees for the audit of annual consolidated financial statements, reviews of quarterly consolidated financial statements, statutory audits, consents and comfort letters, reviews of documents filed with the SEC and other services related to SEC matters. Audit fees also include fees incurred in connection with an audit of internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act. | |
(2) | Audit-related fees are for services that are reasonably related to the performance of the audit or review of the Companys consolidated financial statements. This category includes fees related to internal control, financial accounting and reporting standards. | |
(3) | Fees for tax services in 2008 and 2007 consisted of fees for tax compliance, tax advice and tax planning services. |
54
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C123456789 000004 000000000.000000 ext 000000000.000000 ext NNNNNNNNN 000000000.000000 ext 000000000.000000 ext MR A SAMPLE DESIGNATION (IF ANY) 000000000.000000 ext 000000000.000000 ext ADD 1 Electronic Voting Instructions ADD 2 ADD 3 You can vote by Internet or telephone! ADD 4 Available 24 hours a day, 7 days a week! ADD 5 Instead of mailing your proxy, you may choose one of the two voting ADD 6 methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on April 30, 2009. Vote by Internet Log on to the Internet and go to www.envisionreports.com/axl Follow the steps outlined on the secured website. Vote by telephone Call toll free 1-800-652-VOTE (8683) within the United States, Canada & Puerto Rico any time on a touch tone telephone. There is NO CHARGE to you for the call. Using a black ink pen, mark your votes with an X as shown in X Follow the instructions provided by the recorded message. this example. Please do not write outside the designated areas. Annual Meeting Proxy Card 123456 C0123456789 12345 3 IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 3 A Proposals The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposal 2. 1. Election of Directors: For Withhold For Withhold For Withhold + 01 Salvatore J. Bonanno, Sr. 02 - David C. Dauch 03 Forest J. Farmer 04 Richard C. Lappin 05 Thomas K. Walker For Against Abstain 2. Ratification of the appointment of Deloitte & Touche LLP as the Companys independent registered public accounting firm for year ending December 31, 2009. In their discretion, the proxies are authorized to the extent permitted by law to vote on any and all other matters as may properly come before the meeting, including the authority to vote to adjourn the meeting. B Non-Voting Items Change of Address Please print new address below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting. C Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. This section must be completed for your instructions to be executed. Date (mm/dd/yyyy) Please print date below. Signature 1 Please keep signature within the box. Signature 2 Please keep signature within the box. C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND NNNNNNN5 1 C V 0 2 1 1 4 6 1 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + <STOCK#> 010KFA |
3 IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 3 Proxy American Axle & Manufacturing Holdings, Inc. PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON APRIL 30, 2009 SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS Richard E. Dauch and Patrick S. Lancaster, or either of them, with full power of substitution, are authorized to vote all of your shares as if you were present at the Annual Meeting of Stockholders of American Axle & Manufacturing Holdings, Inc. to be held in the Auditorium at AAMs World Headquarters Complex, One Dauch Drive, Detroit, Michigan, at 3:00 p.m. on April 30, 2009 or at any adjournments of the meeting. This proxy will be voted as you specify on the reverse side. If you do not make a choice, this proxy will be voted for the director nominees in Proposal 1 and ratification of the appointment of Deloitte & Touche LLP as the Companys independent registered public accounting firm in Proposal 2. Voting by the Internet or by telephone reduces costs to AAM. If you vote over the Internet or by telephone, please do not mail this card. (Items to be voted appear on reverse side.) |