UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 (Amendment
No. )
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Filed by the Registrant
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Preliminary Proxy Statement
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Confidential, For use of the Commission Only (as permitted by
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §
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Aftermarket Technology Corp.
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(Name of Registrant as Specified In Its
Charter)
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Not Applicable
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(Name
of Person(s) Filing Proxy Statement, if Other Than the
Registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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Aggregate number of securities to which transaction
applies:
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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):
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filing by registration statement number, or the Form or Schedule and the
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Dear
Stockholders:
You are
cordially invited to attend the Annual Meeting of Stockholders of Aftermarket
Technology Corp. on Tuesday, June 3, 2008, at 9:30 a.m. Eastern time at the
NASDAQ MarketSite, 4 Times Square, 2nd Floor, New York, New York
10036. Your Board of Directors and management look forward to
greeting those stockholders who attend the meeting.
At this
meeting you will be asked to elect directors. Your Board of Directors
recommends a vote FOR the proposed nominees. The reason for the
Board’s recommendation, as well as other important information, is contained in
the accompanying Proxy Statement. You are urged to read the Proxy
Statement carefully.
This year
we are taking advantage of the new Securities and Exchange Commission rules that
allow companies to offer their stockholders the option of receiving their proxy
materials over the Internet. It is important that your shares be
represented and voted at the meeting, whether or not you plan to
attend. This year you may vote your shares via a toll-free telephone
number or over the Internet. If you receive a paper copy of the proxy
card by mail, you may sign, date and mail the proxy card in the envelope
provided. You will find instructions for all three methods of voting
on the proxy card.
Your
interest and participation in the affairs of Aftermarket Technology Corp. are
greatly appreciated.
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Donald
T. Johnson, Jr.
Chairman
of the Board,
President
and Chief Executive Officer
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April 15,
2008
1400
Opus Place – Suite 600, Downers Grove, IL 60515
Phone
(630) 271-8100 Fax (630) 271-9999
www.goATC.com
AFTERMARKET
TECHNOLOGY CORP.
1400
Opus Place, Suite 600
Downers
Grove, Illinois 60515
_____________________
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
_____________________
To the
Stockholders of
Aftermarket
Technology Corp.:
NOTICE IS
HEREBY GIVEN that the Annual Meeting of Stockholders of Aftermarket Technology
Corp. will be held at the NASDAQ MarketSite, 4 Times Square, 2nd Floor, New
York, New York 10036 on Tuesday, June 3, 2008, at 9:30 a.m., Eastern time,
for the purposes of considering and acting upon the following:
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1.
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election
of seven directors to hold office until the 2009 Annual Meeting of
Stockholders and thereafter until their successors are elected and
qualified; and
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2.
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transaction
of such other business as may properly come before the meeting or any
adjournment thereof.
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Only
stockholders of record at the close of business on April 7, 2008 will be
entitled to notice of, and to vote at, the meeting and any adjournments
thereof.
By Order
of the Board of Directors,
Joseph
Salamunovich
Secretary
Dated: April
15, 2008
PLEASE
EITHER VOTE YOUR SHARES BY TELEPHONE OR INTERNET (AS DESCRIBED IN THE ENCLOSED
MATERIALS) OR MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
AFTERMARKET
TECHNOLOGY CORP.
1400
Opus Place, Suite 600
Downers
Grove, Illinois 60515
_____________________
PROXY
STATEMENT
Annual
Meeting of Stockholders
June
3, 2008
This
Proxy Statement is furnished in connection with the solicitation of proxies by
the Board of Directors of Aftermarket Technology Corp. for use at its Annual
Meeting of Stockholders to be held at the NASDAQ MarketSite, 4 Times Square,
2nd
Floor, New York, New York 10036 on June 3, 2008 at 9:30 a.m., Eastern time, and
all adjournments thereof.
On or
about April 24, 2008 Aftermarket Technology Corp. either mailed its proxy
materials or provided Notice of Internet Availability of Proxy Materials to its
stockholders. If you received the Notice by mail, you will not
receive a printed copy of the proxy materials in the mail. The Notice
instructs you on how to access this Proxy Statement and our Annual Report on
Form 10-K and how to submit your proxy over the Internet. If you
received the Notice in the mail and would like to receive a printed copy of our
proxy materials, follow the instructions included on the Notice.
Aftermarket
Technology Corp. first made available the proxy solicitation materials at
www.proxyvote.com on or around April 20, 2008 to all stockholders entitled to
vote at the Annual Meeting. You may also request a printed copy of
the proxy materials by any of the following methods: via Internet at
www.proxyvote.com, by telephone at 1-800-579-1639, or by sending an e-mail to
sendmaterial@proxyvote.com. Our 2007 Annual Report on Form 10-K was
made available at the same time and by the same methods.
The cost
of preparing, assembling and mailing the Notice of Internet Availability, this Proxy Statement, the
accompanying Notice of Annual Meeting of Stockholders and form of proxy and the
solicitation of proxies will be paid by Aftermarket Technology
Corp. Proxies may be solicited by our directors, officers and
employees, none of whom will receive any additional compensation for such
solicitation. Proxies may be solicited in person or by
telephone. We will pay brokers or other persons holding stock in
their names or the names of their nominees for the expenses of forwarding
soliciting material to their principals.
The close
of business on April 7, 2008 has been fixed as the record date for the
determination of stockholders entitled to notice of, and to vote at, the annual
meeting. On that date, there were 21,541,646 shares of our common
stock outstanding. A majority of the shares entitled to vote, present
in person or represented by proxy, will constitute a quorum at the annual
meeting. Each share of common stock is entitled to one vote on any
matter that may be presented for consideration and action by the stockholders at
the annual meeting. In all matters other than the election of
directors, the affirmative vote of a majority of the shares of common stock
present in person or represented by proxies and entitled to vote will be the act
of stockholders. Directors will be elected by a plurality of the
votes of the shares of common stock present in person or represented by proxies
and entitled to vote on the election of directors. According to
applicable state law and Aftermarket Technology Corp.’s charter and bylaws,
abstentions will be treated as the equivalent of a negative vote for the purpose
of determining whether a proposal has been adopted and will have no effect for
the purpose of determining whether a director has been elected. If a
broker indicates on the proxy that such broker does not have discretionary
authority as to certain shares to vote on a particular matter, those shares will
be treated as present for purposes of determining the existence of a quorum but
will not be considered as present and entitled to vote with respect to that
matter.
Proxies
will be voted in accordance with the instructions on the proxies. In
the absence of instructions, proxies will be voted FOR Aftermarket Technology
Corp.’s nominees for election as directors. As of April 15, 2008, the
Board of Directors is not aware of any matters to be presented for action at the
annual meeting other than those specifically identified in the Notice of
Meeting. However, should any other matters come before the annual
meeting, proxies will be voted in the discretion of the persons named as proxies
thereon as to any other business that may properly come before the annual
meeting or any adjournment thereof.
Any
stockholder may revoke his or her proxy at any time before it is exercised by
(1) delivering to us a signed proxy card with a date later than the previously
delivered proxy, (2) voting in person at the annual meeting, (3) granting a
subsequent proxy through the Internet or telephone, or (4) sending a written
notice of revocation to our corporate secretary. The most current
proxy card or telephone or Internet proxy is the one that is
counted.
Our
directors are elected annually. The term of office of all present
directors expires on the date of the annual meeting at which seven directors are
to be elected to serve for the ensuing year and until their successors are
elected and qualified. The nominees for election as directors
are:
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Robert
L. Evans
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Michael
D. Jordan
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Curtland
E. Fields
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S.
Lawrence Prendergast
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Dr.
Michael J. Hartnett
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Edward
Stewart
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Donald
T. Johnson, Jr.
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All of
the nominees currently serve as directors of Aftermarket Technology
Corp. For information regarding each nominee, see
“Management—Directors and Executive Officers.”
Should
any nominees become unavailable to serve as a director or should any vacancy
occur before the election (which events are not anticipated), the proxies may be
voted for a substitute nominee selected by the Board of Directors or the
authorized number of directors may be reduced. If for any reason the
authorized number of directors is reduced, the proxies will be voted, in the
absence of instructions to the contrary, for the election of the remaining
nominees named in this Proxy Statement. To the best of our knowledge,
all nominees are and will be available to serve.
The
Board of Directors recommends a vote FOR each of the nominees.
Directors
and Executive Officers
Our
current directors and executive officers are as follows:
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Name
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Age
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Positions
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Donald
T. Johnson, Jr.
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56
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Chairman
of the Board, President and Chief Executive Officer
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Todd
R. Peters
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45
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Vice
President and Chief Financial Officer
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John
J. Machota
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56
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Vice
President, Human Resources
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John
M. Pinkerton
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50
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Vice
President and Controller
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Mary
T. Ryan
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54
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Vice
President, Communications and Investor Relations
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Joseph
Salamunovich
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48
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Vice
President, General Counsel and Secretary
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William
L. Conley, Jr.
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59
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President,
ATC Logistics
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Richard
L. Stanley
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51
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President,
ATC Drivetrain
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Robert
L. Evans
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55
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Director
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Curtland
E. Fields
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56
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Director
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Dr.
Michael J. Hartnett
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62
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Director
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Michael
D. Jordan
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61
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Lead
Director
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S.
Lawrence Prendergast
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66
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Director
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Edward
Stewart
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65
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Director
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Donald T. Johnson, Jr. joined
us as President and Chief Operating Officer in January 2004. In
February 2004 Mr. Johnson became Chief Executive Officer, and he became a
member of the Board of Directors in May 2004 and Chairman of the Board in June
2005. Before joining us, Mr. Johnson had been Global Director,
Parts, Supply and Logistics for Ford Motor Company since 1999. Prior
to that, Mr. Johnson spent 26 years working for Caterpillar, Inc. and its
subsidiaries, including serving as Vice President of Caterpillar Logistics
Services, Inc. from 1992 until he joined Ford. Mr. Johnson is
lead director and chairman of the compensation committee of the board of
directors of Accuride Corporation. Mr. Johnson holds a B.A. in
Management from the University of Illinois.
Todd R. Peters joined us as
Vice President, Finance in March 2004 and was appointed Chief Financial Officer
in May 2004. Before joining us, Mr. Peters served TriMas
Corporation, a manufacturer of automotive accessories and industrial products,
as Executive Vice President and Chief Financial Officer from 2002 to 2003 and as
Vice President of Finance from 2001 to 2002. From 1994 to 2001, he
held various positions with Dana Corporation, a manufacturer in the automotive,
commercial vehicle, and off-highway markets, including Global Working Capital
Team Leader from 2000 to 2001, Director of Operations – Long Manufacturing from
1999 to 2000 and Vice President of Finance from 1994 to 1999. Prior
to that, Mr. Peters worked for Coopers & Lybrand for over eight
years. Mr. Peters holds a B.S. in Business Administration from
Central Michigan University and is a certified public accountant.
John J. Machota joined us as
Vice President, Human Resources in 1997. From 1996 to 1997, he was a
self-employed human resources consultant. From 1995 to 1996,
Mr. Machota was Vice President, Compensation for Waste
Management, Inc. and from 1993 to 1995, served as Waste Management's Vice
President, Human Resource Services. From 1986 to 1993,
Mr. Machota was Vice President, Human Resources for a subsidiary of Waste
Management and prior to that held various other positions in the human resources
area. Mr. Machota holds an M.S. in Industrial Relations from
Loyola University, Chicago.
John M. Pinkerton joined us
as Manager, Planning and Analysis in 1999, became Corporate Controller in 2000
and became an executive officer in June 2005 when he was appointed Vice
President and Controller. Prior to joining us, he was an independent
financial consultant during 1998 and prior to that he spent ten years with
Grimes Aerospace Company, an international engineering, manufacturing and
distribution company, where he held various financial analysis and
planning-related positions, including Director, Strategic
Planning. From 1980 to 1988, Mr. Pinkerton worked for Cooper
Industries (Power Systems Division) in various accounting and related
positions. Mr. Pinkerton holds an M.B.A. from the University of
Wisconsin-Milwaukee and is a certified public accountant
(inactive).
Mary T. Ryan joined us as
Vice President, Communications and Investor Relations in 1999. From
1996 to 1998, Ms. Ryan served as Vice President, Corporate Affairs for
American Disposal Services, Inc. From 1995 to 1996, she was a
self-employed public relations consultant. Prior to that,
Ms. Ryan was employed for more than ten years with Waste
Management, Inc. Ms. Ryan holds an M.B.A. from DePaul
University.
Joseph Salamunovich joined us
as Vice President, General Counsel and Secretary in 1997. From 1986
to 1994 Mr. Salamunovich was an associate, and from 1995 to 1997 he was a
partner, in the law firm of Gibson, Dunn & Crutcher LLP, where he
specialized in corporate and securities law
matters. Mr. Salamunovich holds a J.D. from Loyola Law School,
Los Angeles.
William L. Conley, Jr. joined
us in 2002 as President of our ATC Logistics business. Prior to
joining us Mr. Conley spent nearly 24 years with FedEx Corporation in a
series of increasingly responsible sales and leadership
positions. Most recently, Mr. Conley served as Vice President and
General Manager – Europe, Middle East and Africa for FedEx Supply Chain Services
(FedEx’s logistics operations). Mr. Conley holds a B.S. in
Aeronautics from Parks College of Aeronautical Technology of St. Louis
University.
Richard L. Stanley joined us
in July 2007 as President of our ATC Drivetrain business. From 1998
to 2006 Mr. Stanley was President of Remy Inc. (formerly Delco Remy America),
the largest division of Remy International, a global manufacturer/remanufacturer
of starters and alternators for both automotive/heavy duty/industrial OEMs and
the aftermarket (Remy International filed for protection under Chapter 11 of the
United States Bankruptcy Code in October 2007). From 1994 to 1998 Mr.
Stanley served as Senior Vice President and General Manager of Remy’s Automotive
Systems division. Between 1978 to 1994 he held increasingly
responsible engineering and operations management positions at the Delco Remy
division of General Motors Corporation. Mr. Stanley holds an
M.S. in Manufacturing Management from Kettering University.
Robert L. Evans became a director of
Aftermarket Technology Corp. in December 2004. Since August 2006, Mr.
Evans has served as President, Chief Executive Officer and a member of the Board
of Directors of Churchill Downs Inc., a publicly held owner and operator of
horse racing venues. Previously, Mr. Evans was Managing
Director of Symphony Technology Group (a strategic holding company that invests
primarily in software and services firms) and a predecessor firm, the Valent
Group, from 2001 until October 2004. Prior to that, he was President
and Chief Operating Officer of Aspect Development, Inc. from 1999 until its
acquisition by i2
Technologies, Inc. in 2000, after which he served as Chief Operating Officer of
i2
Technologies. Mr. Evans was employed by Accenture (formerly Andersen
Consulting) from 1993 to 1999, where he held a variety of positions, including
Managing Partner of the Americas Supply Chain practice. From 1990 to
1993 Mr. Evans served as Vice President, Customer Support (Parts &
Service) for Mazda Motor of America, and between 1975 and 1990 he held various
positions with Caterpillar Inc., including President of Caterpillar Logistics
Services. Mr. Evans
serves on our Compensation and Nominating Committee.
Curtland E. Fields became a director of
Aftermarket Technology Corp. in December 2004. Mr. Fields is also the
Executive Director and chief executive officer and a trustee of the
Turrell Fund, a $130 million foundation. Prior to joining the Turrell
Fund in 2003, Mr. Fields was employed by AT&T Corporation for over 30 years,
serving most recently as President of the Consumer Transactions Services Group
between 2000 and 2003, as President of the Consumer Markets Group (Central
Region) from 1999 to 2000 and Vice President, Strategy and Marketing for the
Business Markets Group from 1998 to 1999. Prior to that he held other
positions with AT&T including Financial Vice President for Investor
Relations. Mr. Fields
is Chairman of our Compensation and Nominating Committee.
Dr. Michael J. Hartnett
became a director of Aftermarket Technology Corp. in 1994. Since
1992, Dr. Hartnett has been President and Chief Executive Officer, and
since 2005 he has been Chairman of the Board, of RBC Bearings Incorporated, a
publicly held manufacturer of ball and roller bearings. Prior to
joining RBC in 1990 as General Manager of its Industrial Tectonics subsidiary,
he spent 18 years with The Torrington Company, a subsidiary of
Ingersoll-Rand. Dr. Hartnett serves on our Audit
Committee.
Michael D. Jordan became a
director of Aftermarket Technology Corp. in May 2004 and Lead Director in June
2005. Prior to retirement in 2001, he was employed by Ford Motor
Company for over 30 years, serving most recently as President of Ford’s
Automotive Consumer Services Group since 1997. Prior to that he was
President of the Ford Customer Service Division—Europe for three
years. Mr. Jordan serves on our Compensation and Nominating
Committee.
S. Lawrence Prendergast
became a director of Aftermarket Technology Corp. in May
2004. Between 1999 and his retirement in June 2005, he was Executive
Vice President of Finance of LaBranche & Co. Inc., a New York Stock
Exchange specialist firm. Prior to that he spent over 30 years with
AT&T Corporation, including serving as Chairman of the Board and Chief
Executive Officer of AT&T Investment Management Corp. from 1997 to 1999 and
as Vice President and Treasurer of AT&T Corporation for 14 years before
that. Mr. Prendergast is Chairman of our Audit
Committee.
Edward Stewart became a director of
Aftermarket Technology Corp. in December 2004. Prior to his
retirement in 2002, he was employed by General Electric Company for 37
years, serving most recently as Executive Vice President of GE Capital and Chief
Executive Officer of GE Card Services from 1997, and prior to that he was a Vice
President of General Electric since 1991. Mr. Stewart
serves on our Audit Committee.
Directors
serve one-year terms and are elected annually. Executive officers
serve until they resign or until replacements are appointed by the Board of
Directors.
Independence
of Directors
The Board
of Directors has determined that all of our current directors with the exception
of Mr. Johnson are independent as defined in the Nasdaq listing standards and
the regulations of the Securities and Exchange Commission. None of
the independent directors currently has or has had a material relationship with,
or is or has been employed by, Aftermarket Technology Corp. or any of its
subsidiaries.
Committees
of the Board of Directors and Board Meetings
We have
an Audit Committee and a Compensation and Nominating Committee.
Audit
Committee
The Audit
Committee, established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, provides assistance to the Board of Directors
in fulfilling its oversight role relating to our corporate accounting and
reporting practices and the quality and integrity of our financial
reports. The Committee is governed by a written charter approved by
the Board of Directors, which is available on our website at www.goATC.com. The
Audit Committee is composed of Messrs. Hartnett, Prendergast (Chairman)
and Stewart, each of whom is independent as defined in the Nasdaq listing
standards and the regulations of the Securities and Exchange
Commission.
Compensation
and Nominating Committee
The
Compensation and Nominating Committee establishes our general compensation
policies, establishes the specific compensation programs that we utilize with
respect to our executive officers, establishes salaries and bonuses for our
executive officers other than the Chief Executive Officer, makes stock awards
(e.g., stock options,
restricted stock) to all eligible employees other than our Chief Executive
Officer, makes recommendations to the Board of Directors regarding the salary
and bonus for and stock awards to our Chief Executive Officer and is responsible
for identifying, reviewing the qualifications of, and recruiting, as
appropriate, potential candidates for the Board of Directors.
For
information regarding the Compensation and Nominating Committee’s philosophy,
process and procedure in setting executive compensation policies, see “Executive
Compensation.”
In
identifying potential candidates for Board membership, the Compensation and
Nominating Committee may rely on suggestions and recommendations from the Board,
management and others. The Committee does not currently have a policy
with regard to the consideration of any director candidates recommended by
stockholders, but we expect that such a policy will be developed in the
future. The Board believes that the current absence of such a policy
is appropriate because we have never received such a stockholder
recommendation. In evaluating the suitability of individuals for
Board membership, the Compensation and Nominating Committee may take into
account many factors, including an individual’s business experience and skills,
independence, judgment, integrity, and ability to commit sufficient time and
attention to the activities of the Board of Directors. The Committee
has not established any specific minimum qualification standards for nominees to
the Board, although from time to time the Committee may identify certain skills
or attributes (e.g.,
financial experience, business experience) as being particularly desirable to
help meet specific Board needs that have arisen.
The
Compensation and Nominating Committee is governed by a written charter approved
by the Board of Directors, which is available on our website at www.goATC.com. The Compensation and
Nominating Committee is composed of Messrs. Evans, Fields (Chairman) and
Jordan, each of whom is independent as defined in the Nasdaq listing standards
and the regulations of the Securities and Exchange Commission.
Board
and Committee Meeting Attendance
During
2007 the Audit Committee met nine times, the Compensation and Nominating
Committee met eight times and the Board of Directors met six
times. Each director attended at least 75% of the meetings of the
Board of Directors and the committee of the Board on which he served during the
year. We do not have a formal policy regarding director attendance at
stockholder meetings. All of our directors except Mr. Evans attended
the 2007 annual meeting of stockholders.
Section
16(a) Beneficial Ownership Reporting Compliance
Section 16(a)
of the Exchange Act requires our officers, directors and persons who own more
than 10% of our outstanding common stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and to furnish
copies of these reports to us. Based solely on a review of the copies
of the forms that we have received, we believe that all such forms required
during 2007 were filed on a timely basis.
Compensation
Discussion and Analysis
Overview
of Compensation Program
Decisions
about the compensation of our executive officers are made by the Compensation
and Nominating Committee of our Board of Directors (the “Committee”), all the
members of which are independent of management. The Committee is appointed by
our Board of Directors and has responsibility for establishing, implementing and
monitoring adherence with our compensation philosophy. The Committee reviews
with the CEO the performance of the other executive officers, reviews and
approves the compensation for the Named Executive Officers (“NEOs”), conducts
the annual performance appraisal of our CEO, and recommends to the Board the CEO
compensation package including incentive compensation plans in which the CEO
participates. The Committee’s goal is that the total compensation
paid to our executive officers is fair, reasonable and
competitive. The types of compensation and benefits provided to the
actively employed NEOs are similar to those provided to other executive
officers.
Compensation
Philosophy and Objectives
Our
executive compensation philosophy is as follows:
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to
align compensation of our executive officers with stockholder value
creation;
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to
provide market competitive compensation to attract and retain talented
executives; and
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to
link incentive compensation to continuous improvements in strategic and
operating performance.
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The
Committee believes the current compensation arrangements provide an appropriate
level of incentive for the CEO and our other executive officers to perform at
superior levels and in a manner directly aligned with the economic interests of
our stockholders. The Committee approves and continually evaluates
our compensation policies applicable to the executive officers so that
(i) we maintain the ability to attract and retain excellent employees in
key positions, (ii) compensation provided to executive officers remains
competitive relative to the compensation paid to similarly situated executives
in the competitive market, and (iii) compensation encourages a
pay-for-performance environment. To this end, the Committee believes
that executive compensation should include both cash and stock-based
compensation that rewards performance as measured against established
goals.
Our
current executive compensation program consists of four basic
elements:
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Base
salary;
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Annual
performance based incentive
compensation;
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Long-term
incentive/equity-based awards; and
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Supplemental
benefits.
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Independent
Compensation Consultant
The
Committee periodically uses the services of an independent executive
compensation consulting firm (the “independent compensation consultant”),
currently Watson Wyatt Worldwide, which reports directly to the Committee and
works with management on behalf of the Committee as the Committee determines is
necessary. During 2007, the independent compensation consultant provided the
Committee with relevant market data and alternatives to consider when making
compensation decisions for the CEO and the other
executive
officers. Additionally, the independent compensation consultant provided
the Committee with input on executive compensation items such as executive
employment agreements, change-in-control, and long-term incentive
design.
2007
Compensation
Competitive Benchmarking –
Definition of Market
The
Committee periodically reviews compensation data for comparable executive
positions in the competitive market. The independent compensation
consultant assists with this analysis. An extensive competitive
compensation analysis was conducted during 2007 for all executive officers
including the CEO.
For
purposes of competitive market analysis, the Committee reviews competitive
market data for comparable executive positions as provided by the independent
compensation consultant. For purposes of executive compensation
benchmarking, our executive officers are matched based on job functions and
responsibilities. During 2007, we compared compensation at similarly
sized companies in general industry (the “comparator group”) as we feel this is
the industry segment in which we compete for executive talent. In
2006, the Committee utilized similarly sized general manufacturing companies
that produce both durable and nondurable goods for comparison
purposes. For 2007, the Committee determined it was appropriate
to expand the definition of the competitive market to include general industry
because this better reflects the increasing importance of the logistics side of
our business. Our decision to broaden the market definition to
include general industry did not have a material impact on the market data as
compared to the prior year. All compensation data is size-adjusted to
reflect our business size.
In
addition to reviewing general market data for the purpose of evaluating the
CEO’s total compensation, the Committee also reviewed market data for specific
logistics and manufacturing companies representing our business mix. This group
of companies was originally selected and is modified from time to time with
assistance from the independent compensation consultant. The named
companies used for benchmarking during 2007 include:
|
Accuride
Corporation
|
Jabil
Circuit Inc.
|
|
Agilysis,
Inc.
|
Keystone
Automotive Industries Inc.
|
|
BorgWarner
Inc.
|
LKQ
Corporation
|
|
Brightpoint,
Inc.
|
Richardson
Electronics Ltd.
|
|
CH
Robinson Worldwide Inc.
|
Ryder
System Inc.
|
|
Celestica
Inc.
|
Solectron
Corporation
|
|
Con-way
Inc.
|
Standard
Motor Products Inc.
|
|
Expeditors
International of Washington, Inc.
|
Tenneco,
Inc.
|
|
Hub
Group Inc.
|
UTi
Worldwide Inc.
|
|
Innotrac
Corporation
|
YRC
Worldwide
|
Competitive Compensation
Objectives
Our
executive compensation is based on a pay-for-performance philosophy, emphasizing
performance against measures that correlate with increases in stockholder
value. It is the policy of the Committee to set compensation
targets for fixed pay (base salary and benefits) at approximately the 50th
percentile of the market as defined by the comparator group. Variable
compensation (annual incentives and long-term incentives) is targeted at the
50th
to 75th
percentile of the market with awards above the 50th
percentile tied to the achievement of “stretch” performance goals.
We
believe that in order to emphasize a long-term perspective directly tied to
stockholder value, a significant portion of the executive’s compensation should
be in the form of incentive awards and long-term equity awards, or
“pay-at-risk.” The percentage of pay-at-risk increases as the level
of employment position increases. This provides additional upside potential and
downside risk for senior positions, recognizing that these roles have greater
influence on our overall performance.
The 2007
mix of total compensation for the NEOs is described in the table below. The
Committee believes this compensation structure aligns the financial interests of
the NEOs and other executive officers with the interests of our stockholders
because it rewards management for the achievement of long-term financial results
and stockholder value creation.
|
Named
Executive
Officers
|
Base
Salary
|
Annual
Incentive
Target
|
Long-Term
Incentive
Target
|
Total
|
||||
|
Donald
T. Johnson
|
21%
|
18%
|
61%
|
100%
|
||||
|
Todd
R. Peters
|
35%
|
21%
|
44%
|
100%
|
||||
|
William
L. Conley
|
36%
|
18%
|
46%
|
100%
|
||||
|
Joseph
Salamunovich
|
46%
|
20%
|
34%
|
100%
|
||||
|
Richard
L. Stanley
|
36%
|
18%
|
46%
|
100%
|
The Base
Salary percentage included in the table above was calculated using the amounts
disclosed in the Summary Compensation Table. The Annual Incentive
Target and Long-Term Incentive Target percentages were calculated using amounts
disclosed in the Grants of Plan-Based Awards table. The elements of
our executive compensation program are described in more detail
below.
Base
Salary
We
provide NEOs and other executive officers with base salary to compensate them
for services rendered during the fiscal year. For each position, the
Committee establishes a base salary range that takes into consideration the
position and its responsibility, level of experience and knowledge, the market
data on salaries, internal comparability, individual performance, and
recommendations provided by the independent compensation consultant. Within that
range a specific base salary is then determined. It is our policy to
provide a base salary for a given position that is between 75% and 125% of the
midpoint of the base salary range established for that position.
Each
year, the individual performance of the executive officers is reviewed by the
CEO. These performance assessments and the salary recommendations, if
any, are then reviewed with the Committee which, utilizing the provided market
data and existing officer salary data, either approves the recommendations or
revises them as it deems appropriate.
In the
case of the CEO, his performance is evaluated annually by the Committee against
a detailed list of performance objectives that have been mutually agreed upon by
the Committee and the CEO at the beginning of the year. These objectives include
specific measurable financial performance metrics, business strategy
implementation milestones, and leadership development/succession planning
goals. The Committee utilizes the performance review and the
competitive market data to determine the appropriate salary level for the
CEO. The salary for the CEO is then recommended by the Committee and
reviewed and approved by the full Board of Directors.
For 2007,
the CEO received a base salary increase of 4.7% effective January 1, which
reflected the Committee’s evaluation of his performance during the prior year
and the competitive market. The average salary increase in 2007 for
the other NEOs was 3.7%, which closely reflected the average salary movement
within the comparator group.
The CEO’s
salary was not adjusted for 2008. Base salary adjustments for 2008
for the other NEOs became effective January 1, 2008 and are noted in the
footnotes to the Summary Compensation Table below.
Performance-Based Incentive
Compensation
We
provide annual incentive opportunities through our Management Incentive
Compensation Plan (the “IC Plan”), which rewards executive officers and other
senior management for the achievement of annual financial results. We
believe this focuses the executives on achieving annual financial goals that are
indicative of improved year-over-year performance. The IC Plan
constitutes at-risk compensation which is payable only if the goals are achieved
and represents common market practice. All of the performance
measures in the IC Plan reflect our business strategy and key financial metrics
that we believe will drive stockholder value while rewarding the executive team
for exceptional individual and corporate performance.
Performance
Measures. We believe earnings per share (EPS) and adjusted
earnings before interest and taxes (EBIT) are key indicators of financial
performance. Therefore, the primary corporate financial measure in
the IC Plan for 2007 was EPS while EBIT served as the primary financial metric
for the business segment leadership. Corporate officer positions are
measured entirely on EPS while business segment leadership is measured 70% on
such segment’s adjusted EBIT and 30% on EPS. For business
segment leadership,
we believe this
weighting
provides the appropriate incentive to drive business segment
performance. For each of these metrics, it is necessary that a
minimum performance level be met before any payment is made for that
metric. For 2007, the threshold levels were as follows:
|
· EPS -
93% of target
|
|
· EBIT -
85% of target (both Drivetrain and
Logistics)
|
In
addition, we believe all employees must be fully committed to customer quality
and service. Therefore, the IC Plan includes a “quality and service”
component pursuant to which the Committee may reduce plan awards by up to 20% if
we or a business segment or a business unit do not achieve established quality
and service objectives. The quality and service objectives include items such as
service levels required by customer contracts, failure rates and warranty costs,
and are reviewed regularly by the CEO with the appropriate business
team. At the conclusion of the year, the Committee (or the Board of
Directors in the case of the CEO) reviews the quality and service performance
and, based on the recommendations from the CEO, determines whether any bonus
reduction is to be implemented.
Target Award
Opportunities. The target awards under the IC Plan have been
established based on recommendations from the independent compensation
consultant to reflect the 50th
percentile of annual target incentive awards for similar positions within the
market. For 2007, the target incentive award was 90% of base salary
for the CEO, 60% of base salary for the CFO, and 45% or 50% of base salary for
the other NEOs, in each case with a minimum “cut-off” award equal to 25% of the
target award and a maximum “stretch” award equal to 300% of the target
award.
Actual 2007 results. The actual financial
performance against targets for 2007 was as follows:
|
IC Plan |
||
|
Financial
Measure
|
2007 IC Goal
|
2007
Actual
|
|
Corporate
EPS
|
$1.45
|
$1.81
|
|
Drivetrain
adjusted EBIT
|
$27.996
million
|
$26.002
million
|
|
Logistics
adjusted EBIT
|
$35.362
million
|
$46.209
million
|
Based on
strong 2007 financial results, the IC Plan payments to the NEOs were as
follows:
|
Named
Executive
Officers
|
Payout
$
Related
to
Corporate
EPS
|
Payout
$ Related
to
Adjusted
Drivetrain
EBIT
|
Payout
Related
to
Adjusted Logistics EBIT
|
Total
2007 Payout under the IC Plan
|
|||||||||||
|
Donald
T. Johnson
|
$ | 1,512,000 | - | - | $ | 1,512,000 | |||||||||
|
Todd
R. Peters
|
$ | 607,500 | - | - | $ | 607,500 | |||||||||
|
William
L. Conley
|
$ | 117,000 | - | $ | 235,867 | $ | 352,867 | ||||||||
|
Joseph
Salamunovich
|
$ | 329,400 | - | - | $ | 329,400 | |||||||||
|
Richard
L. Stanley
|
$ | 72,691 | (1) | $ | 45,490 | (1) | - | $ | 118,181 | (1) | |||||
|
(1)
|
Prorated
from Mr. Stanley’s July 9, 2007 hire date. Based on a full year
of employment, his 2007 EPS, adjusted EBIT and total payouts would have
been $150,750, $94,340, and $245,090,
respectively.
|
There
were no discretionary adjustments to the bonus amounts made during 2007 for
quality and service performance.
The above
payments under the IC Plan are consistent with our strong EPS and EBIT
performance and provide the pay-for-performance alignment we are
seeking.
Long-Term
Incentives
Our
long-term incentive program is a key element of our total compensation
program. Long-term incentives are the largest component of variable
compensation and provide the strongest tie to long-term stockholder value by
linking a significant portion of executive compensation directly to stock price
growth or decline. As a result, our long-term incentive compensation
historically has consisted of awards of stock options and restricted
stock.
Effective
January 1, 2007 we implemented a new long-term incentive plan (LTIP) that
includes a stock component (both options and restricted stock) and a cash
component and rewards management for achieving value targets over a three-year
performance period.
LTIP Award
Opportunities. The target LTIP incentive opportunities have
been established based on the independent compensation consultant’s review of
comparator group long-term incentive practices and our compensation philosophy
described above. For 2007, the economic value of the total LTIP
incentive award was set at 300% of salary for the CEO, 125% of salary for the
CFO and Business Segment Presidents, and 75% of salary for the Vice President,
General Counsel and Secretary. These award sizes are consistent with
the 75th percentile of LTIP awards within the competitive
marketplace.
The
current value mix in the LTIP provides approximately 70% of the value through
the stock component and 30% of the value through the cash
component. Each of these components is discussed in more detail below
and the Grants of Plan-Based Award Table contains the long-term awards for each
of the NEOs.
Stock
Options. Stock options reward management for increases in our
stock price above the price at the time the options are granted and thus provide
a direct link to stockholder value creation. The annual awards of
stock options for 2007 for the NEOs other than the CEO and Mr. Stanley took
place at the Committee’s regularly scheduled meeting on June 5,
2007. These stock option grants have an exercise price of $30.44,
which represented our closing stock price on the date of
grant. With regard to the CEO, his grant was approved by the
Board on January 19, 2007, concurrent with the signing of a new employment
agreement. The CEO’s stock option grant has an exercise price of
$20.80, equal to the closing stock price on the date of grant. The Committee
granted options to Mr. Stanley at the time of his hiring on July 9,
2007. The exercise price of Mr. Stanley’s options is $30.17, the
closing stock price on the date of grant. The Committee and the Board
have never granted options with an exercise price that is less than the closing
price of our common stock on the grant date, nor have they granted options that
are priced on a date other than the grant date. Since the end of
1998, we have maintained a policy against repricing stock options without
stockholder approval. All awards of stock options require approval of
the Committee (or the Board of Directors in the case of an award to the
CEO).
All stock
option grants are granted in the form of nonqualified stock options and vest at
the rate of 33⅓% per year over the first three years of the ten-year option
term. Vesting and exercise rights cease in connection with
termination of employment except in the case of death or disability for the NEOs
other than the CEO. For the CEO, vesting will continue
post-employment if the Board determines there has been an orderly transition to
the CEO’s successor.
It is the
Committee’s intent to generally grant stock options at approximately the same
time each year – at the time of our annual meeting, which typically takes place
in late May or early June. We do not have a formal policy with
regards to the timing of stock option or restricted stock grants and the release
of material non-public information.
Restricted Stock. Restricted
stock grants build executive stock ownership and focus executives on long-term
company performance. Furthermore, awards of restricted stock are
consistent with current market practice. Restricted shares were
granted to the NEOs other than the CEO and Mr. Stanley on June 5, 2007 when
the stock price was $30.44. These restricted stock awards are
nontransferable and will vest at the rate of 33⅓% per year. The CEO, in
conjunction with the signing of a new employment agreement, was granted a
restricted stock award January 19, 2007 when the stock price was
$20.80. Mr. Stanley was granted a restricted stock award when he was
hired on July 9, 2007, when the stock price was $30.17. All
restricted stock awards have dividend and voting rights. Awards of
all restricted stock require approval of the Committee (or the Board of
Directors in the case of an award to the CEO).
Long-Term Cash. The cash
component of the LTIP is intended to focus the executives on financial and
strategic goals important to us over a three-year period. The
target opportunities for the cash component range from 90% of
base salary for the CEO to an average of 25% of base salary for the other
NEOs. In each case there is a “cut-off” award equal to 90% of the
target award and a “stretch” award equal to 150% of the target
award.
The
financial performance metrics for the 2006-2008 LTIP performance period are
compounded annual growth rate (CAGR) for both revenue and operating income and
return on invested capital (ROIC). These three financial metrics all
have equal weight. Utilizing the same approach as the annual plan,
corporate officer positions are measured entirely on our results while business
segment leadership is measured 70% on such segment’s results and 30% on our
results.
Retirement
and Other Benefits
Retirement Savings Plan and
Deferral Plan
Unlike
many of our competitors, we do not offer a defined benefit retirement
plan. Executive officers participate in our Retirement Savings Plan,
a tax-qualified 401(k) plan pursuant to which all our U.S.-based employees,
including the NEOs, are able to contribute the lesser of (i) up to 75% of
their annual compensation (salary and bonus) or (ii) the limit prescribed
by the Internal Revenue Service. We match 50% on the first 6% of
compensation that is contributed by an employee to the plan. However,
due to the legal contribution limits on defined contribution retirement plans,
the actual benefit to executive officers under the plan is severely
limited. All employee contributions are fully vested upon
contribution, while the matching contribution vests at the rate of 20% per
year.
To
provide somewhat more competitive retirement benefits, we offer our executive
officers and selected U.S.-based key employees the right to participate in a
nonqualified deferred compensation plan. Under this plan, key
employees are eligible to defer up to 75% of annual base salary and 100% of
annual cash incentive compensation and/or commission awards. For
2007, the Committee (and the Board of Directors in the case of the CEO) approved
a matching contribution of 50% of the first 10% of base salary deferred during
the year. The matching contribution vests at the rate of 20% per
year. Outside directors are also eligible to defer up to 100% of
their annual retainer but without a matching contribution.
All of
the compensation associated with these plans for 2007 is included in the “Other
Compensation” column of the Summary Compensation Table below.
Perquisites and other
Personal Benefits
We
provide a car allowance of $24,000 per year for the CEO and $9,600 per year for
the other executive officers, except for two executive officers who have the use
of drive audit vehicles (i.e., a vehicle provided to an employee, without
charge, for the purpose of testing our remanufactured products). The
Committee believes this auto allowance is consistent with typical market
practice for company car programs and is part of offering a market-competitive
total compensation program.
Each
executive officer, other than the CEO, also receives an annual allowance equal
to 2% of base salary for expenses related to financial counseling, tax and legal
services, club dues, home office and the like. The CEO receives
$20,000 annually for such expenses. This flexible structure enables
executives to select benefits based on their specific circumstances and thereby
raises the perceived value of the program.
These
perquisites and benefits are offered in order to (i) provide executives
with certain conveniences so that they can focus more on our business matters,
and (ii) offer a market-competitive total compensation
package. The Committee periodically reviews the levels of perquisites
and other personal benefits to the NEOs and believes they are reasonable and
consistent with our overall compensation program.
All of
the compensation to the NEOs associated with these perquisites and other
personal benefits for 2007 is included in the “Other Compensation” column of the
Summary Compensation Table below.
Executive
Compensation Employment Agreements
We have
entered into written employment agreements with each of our executive officers,
which provide for various benefits, including severance payable under certain
circumstances. These employment agreements are designed to promote
stability and continuity among our senior management team. For
information regarding these agreements for the named executive officers, see
“Summary Compensation Table” and “Potential Payments Upon Termination or
Change-in-Control” below.
Tax
and Accounting Implications
Deductibility of Executive
Compensation - Section 162(m) Compliance
Section
162(m) of the Internal Revenue Code generally disallows the corporate tax
deduction for certain compensation paid in excess of $1 million annually to
each of the chief executive officer and the four other most highly compensated
executive officers of publicly-held companies. There is an exception
to this rule for “performance-based compensation.”
The
Committee’s long-term objective is that our compensation programs qualify as
performance-based compensation for purposes of Section 162(m) in order to
maximize our corporate tax deduction. Therefore, as required by
Section 162(m) both the annual incentive plans and long-term incentive plans
were approved by stockholders to qualify applicable compensation as “performance
based.” Furthermore, the incentive plans are administered by the
Committee in order to be compliant with Section 162(m). Since May
2004, the Committee has been composed solely of outside directors for purposes
of Section 162(m). While the Committee’s general policy is to
preserve the deductibility of most compensation paid to our covered executives,
it may from time to time authorize payments that might not be deductible if the
Committee believes that those payments are in the best interests of
stockholders.
Summary
Compensation Table
The
following table sets forth the compensation for 2007 and 2006, for services to
us in all capacities, of the NEOs:
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
(1)
|
Option
Awards
($)
(1)
|
Non-Equity
Incentive Plan Compensation
($)
(2)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
($)
|
All
Other
Compen-
sation
($)
|
Total
($)
|
||||||||||||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||||||||||||||||||||
|
Donald
T. Johnson Jr.
Chairman,
President, CEO
|
2007
|
$ | 560,000 | (3) | $ | 0 | $ | 618,324 | $ | 501,860 | $ | 1,512,000 | (4) | $ | 0 | $ | 79,443 | (5) | $ | 3,271,627 | |||||||||
|
2006
|
$ | 535,000 | (6) | $ | 0 | $ | 330,557 | $ | 281,421 | $ | 0 | $ | 0 | $ | 66,178 | (7) | $ | 1,213,156 | |||||||||||
|
Todd
R. Peters
Vice
President and CFO
|
2007
|
$ | 337,500 | (8) | $ | 0 | $ | 138,567 | $ | 120,864 | $ | 607,500 | $ | 0 | $ | 17,620 | (9) | $ | 1,222,051 | ||||||||||
|
2006
|
$ | 324,500 | $ | 0 | $ | 151,876 | $ | 125,414 | $ | 0 | $ | 0 | $ | 17,009 | (10) | $ | 618,799 | ||||||||||||
|
William
L. Conley, Jr.
President,
ATC Logistics & Electronics
|
2007
|
$ | 260,000 | (11) | $ | 0 | $ | 80,945 | $ | 71,964 | $ | 352,867 | (12) | $ | 0 | $ | 37,130 | (13) | $ | 802,906 | |||||||||
|
2006
|
$ | 252,000 | (14) | $ | 0 | $ | 55,964 | $ | 37,796 | $ | 159,472 | (12) | $ | 0 | $ | 36,680 | (15) | $ | 541,912 | ||||||||||
|
Joseph
Salamunovich
Vice
President, General
Counsel
and Secretary
|
2007
|
$ | 244,000 | (16) | $ | 0 | $ | 65,038 | $ | 54,523 | $ | 329,400 | $ | 0 | $ | 21,135 | (17) | $ | 714,096 | ||||||||||
|
2006
|
$ | 234,600 | $ | 0 | $ | 68,087 | $ | 37,796 | $ | 0 | $ | 0 | $ | 21,763 | (18) | $ | 362,246 | ||||||||||||
|
Richard
L. Stanley(19)
President,
ATC Drivetrain
|
2007
|
$ | 162,346 | (20) | $ | 50,000 | $ | 247,937 | $ | 82,354 | $ | 118,181 | $ | 0 | $ | 52,511 | (21) | $ | 713,329 | ||||||||||
|
2006
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||
|
(1)
|
The
assumptions used in the computation of our stock and option award fair
values are set forth in Note 2 – Stock-Based Compensation to our
consolidated financial statements set forth in Item 8 of our Annual Report
on Form 10-K for the year ended December 31,
2007.
|
|
(2)
|
Bonuses
are paid under our incentive compensation plan for a particular year if we
achieve or exceed specified EPS and other financial targets for the year,
and are paid during the first quarter of the following
year.
|
|
(3)
|
Mr.
Johnson deferred $420,000 of this amount pursuant to our executive
deferred compensation plan.
|
|
(4)
|
Mr.
Johnson deferred 100% of this amount pursuant to our executive deferred
compensation plan.
|
|
(5)
|
Consists
of $4,200 Company matching contribution under our 401(k) Plan, $28,876
Company matching contribution under our executive deferred compensation
plan, $24,000 automobile allowance, $18,939 in reimbursement for club dues
and personal financial planning costs, and $3,428 in Company-paid life
insurance premiums.
|
|
(6)
|
Mr.
Johnson deferred $267,500 of this amount pursuant to our executive
deferred compensation plan.
|
|
(7)
|
Consists
of $6,442 Company matching contribution under our 401(k) Plan, $28,076
Company matching contribution under our executive deferred compensation
plan, $20,000 automobile allowance, $10,700 in reimbursement for club dues
and personal financial planning costs, and $960 in Company-paid life
insurance premiums.
|
|
(8)
|
Mr.
Peters' base salary was increased to $344,500 effective January 1,
2008.
|
|
(9)
|
Consists
of $9,600 automobile allowance; $5,954 in reimbursement for club dues and
financial planning costs; and $2,066 in Company-paid life insurance
premiums.
|
|
(10)
|
Consists
of $9,600 automobile allowance; $6,490 in reimbursement for club dues and
financial planning costs; and $919 in Company-paid life insurance
premiums.
|
|
(11)
|
Mr.
Conley deferred $26,000 of this amount pursuant to our executive deferred
compensation plan. His base salary was increased to $280,000
effective January 1, 2008.
|
|
(12)
|
Mr.
Conley deferred 50% of this amount pursuant to our executive deferred
compensation plan.
|
|
(13)
|
Consists
of $6,750 Company matching contribution under our 401(k) Plan, $13,989
Company matching contribution under our executive deferred compensation
plan, $9,600 automobile allowance, $5,200 in reimbursement for club dues
and personal financial planning costs; and $1,591 in Company-paid life
insurance premiums.
|
|
(14)
|
Mr.
Conley deferred $25,200 of this amount pursuant to our executive deferred
compensation plan.
|
|
(15)
|
Consists
of $6,600 Company matching contribution under our 401(k) Plan, $14,550
Company matching contribution under our executive deferred compensation
plan, $9,600 automobile allowance, $5,040 in reimbursement for club dues
and personal financial planning costs; and $890 in Company-paid life
insurance premiums.
|
|
(16)
|
Mr.
Salamunovich's base salary was increased to $256,000 effective January 1,
2008.
|
|
(17)
|
Consists
of $6,750 Company matching contribution under our 401(k) Plan, $9,600
automobile allowance, $3,292 in reimbursement for club dues and personal
financial planning costs, and $1,493 in company-paid life insurance
premiums.
|
|
(18)
|
Consists
of $6,600 Company matching contribution under our 401(k) Plan, $9,600
automobile allowance, $4,692 in reimbursement for club dues and personal
financial planning costs, and $871 in company-paid life insurance
premiums.
|
|
(19)
|
Mr.
Stanley was hired July 9, 2007.
|
|
(20)
|
Mr.
Stanley deferred 10% of this amount pursuant to our executive deferred
compensation plan. His full year annual base salary is
$335,000.
|
|
(21)
|
Consists
of $1,392 Company matching contribution under our 401(k) Plan, $7,087
Company matching contribution under our executive deferred compensation
plan, $3,350 in reimbursement for club dues and personal financial
planning costs, $2,050 in Company-paid life insurance premiums, and
$38,632 in relocation costs.
|
We have a
written employment agreement with each of our NEOs. The agreement
with Mr. Johnson expires on December 31, 2008, subject to a single one-year
automatic renewal, while the agreement with each of the other NEOs is on a
year-to-year basis with unlimited automatic renewals.
Each
agreement provides for a base salary, participation in our various incentive and
benefit plans, and various perquisites, including an annual car allowance
($24,000 for Mr. Johnson, $9,600 for other executive officers), and
reimbursement of the executive’s expenses for financial planning, club dues and
similar matters (capped at $20,000 per year for Mr. Johnson and 2% of annual
base salary for other executives).
Each
agreement includes a noncompetition provision that runs for a specified period
after the executive ceases to be employed by Aftermarket Technology
Corp. The period is 24 months in the case of Messrs. Johnson and
Peters and 18 months in the case of the other executive
officers. Each agreement also contains a confidentiality provision
and a provision that prohibits the executive officer from soliciting our
employees for employment by other companies during a specified period after
leaving Aftermarket Technology Corp.
Each of
the employment agreements provides for severance payments to the executive
officer in certain circumstances. See “Potential Payments Upon
Termination or Change-in-Control” below.
Grants
of Plan-Based Awards Table
The
following table sets forth information regarding each grant of an award made in
2007 to the NEOs under our various incentive plans:
|
Estimated
Future Payouts under Non-Equity Incentive Plan Awards
|
Estimated
Future Payouts Under Equity Incentive Plan Awards
|
All
Other Stock Awards: Number of Shares of Stock or Units
(#)
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
|
Exercise
or Base Price of Option Awards ($/Share)
|
Grant
Date
Fair Value of Stock and Option Awards
|
|||||||||||||||||||||||||
|
Name
|
Grant
Date
|
Threshold
$
|
Target
$
|
Maximum
$
|
Threshold
#
|
Target
#
|
Maximum
#
|
|||||||||||||||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
(l)
|
|||||||||||||||||||
|
Donald
T. Johnson Jr.
Chairman,
President
and
CEO
|
$ | 126,000 | $ | 504,000 | $ | 1,512,000 | (1) | - | - | - | ||||||||||||||||||||
| $ | 453,600 | $ | 504,000 | $ | 756,000 | (2) | ||||||||||||||||||||||||
|
1/19/07
|
29,400 | (3) | - | - | $ | 611,520 | ||||||||||||||||||||||||
|
1/19/07
|
- | 87,700 | (3) | $ | 20.80 | $ | 531,024 | |||||||||||||||||||||||
|
Todd
R. Peters
Vice
President and CFO
|
$ | 50,625 | $ | 202,500 | $ | 607,500 | (1) |
-
|
-
|
-
|
||||||||||||||||||||
| $ | 113,873 | $ | 126,525 | $ | 189,788 | (2) | ||||||||||||||||||||||||
|
6/05/07
|
4,849 | (3) | - | - | $ | 147,604 | ||||||||||||||||||||||||
|
6/05/07
|
- | 15,588 | (3) | $ | 30.44 | $ | 147,992 | |||||||||||||||||||||||
|
William
L. Conley, Jr.
President,
ATC Logistics & Electronics
|
$ | 32,500 | $ | 130,000 | $ | 390,000 | (1) |
-
|
-
|
-
|
||||||||||||||||||||
| $ | 87,750 | $ | 97,500 | $ | 146,250 | (2) | ||||||||||||||||||||||||
|
6/05/07
|
3,737 | (3) | - | - | $ | 113,754 | ||||||||||||||||||||||||
|
6/05/07
|
- | 12,012 | (3) | $ | 30.44 | $ | 114,042 | |||||||||||||||||||||||
|
Joseph
Salamunovich
Vice
President, General Counsel and Secretary
|
$ | 27,450 | $ | 109,800 | $ | 329,400 | (1) |
-
|
-
|
-
|
||||||||||||||||||||
| $ | 49,410 | $ | 54,900 | $ | 82,350 | (2) | ||||||||||||||||||||||||
|
6/05/07
|
2,104 | (3) | - | - | $ | 64,046 | ||||||||||||||||||||||||
|
6/05/07
|
- | 6,764 | (3) | $ | 30.44 | $ | 64,217 | |||||||||||||||||||||||
|
Richard
L. Stanley
President,
ATC Drivetrain
|
$ | 20,192 | $ | 80,767 | $ | 242,301 | (1) |
-
|
-
|
-
|
||||||||||||||||||||
| $ | 56,531 | $ | 62,813 | $ | 94,219 | (2) | ||||||||||||||||||||||||
|
7/09/07
|
28,000 | (4) | - | - | $ | 844,760 | ||||||||||||||||||||||||
|
7/09/07
|
- | 30,000 | (4) | $ | 30.17 | $ | 280,626 | |||||||||||||||||||||||
|
(1)
|
Established
under the annual IC Plan and payable if we achieve or exceed specified EPS
and other financial targets for the year ended December 31, 2007 (provided
that any bonus may be reduced by up to 20% if certain quality and service
metrics are not achieved). The amounts shown in column
(c) reflect the minimum payments under the IC Plan which are 25% of the
target amounts shown in column (d). The amounts shown in column
(e) are 300% of such target amounts. These amounts are based on
the individual's current salary, position and eligibility
period.
|
|
(2)
|
Established
under the LTIP (3-year) and payable if we achieve or exceed specified
financial targets (CAGR - Revenue, CAGR - EBIT, ROIC) for the three-year
period ending December 31, 2008. The amounts shown in
column (c) reflect the minimum payments under the LTIP which are 90% of
the target amounts shown in column (d). The amounts shown in
column (e) are 150% of such target amounts. These amounts are
based on the individual's 2007 salary, position and eligibility
period.
|
|
(3)
|
Awarded
under the 2006 Stock Incentive Plan. No consideration was paid
for the award.
|
|
(4)
|
Awarded
under the 2004 Stock Incentive Plan. No consideration was paid
for the award.
|
Outstanding
Equity Awards at Fiscal Year-End Table
The
following table sets forth information regarding unexercised stock options,
unvested restricted stock, and equity incentive plan awards for each NEO
outstanding as of December 31, 2007:
|
|
Options
Awards
|
Stock
Awards
|
||||||||||||||||||||
|
Name
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards: Number of Securities Underlying Unexercised Unearned
Options
(#)
|
Option
Exercise Price
($)
|
Option
Expi-ration Date
|
Number
of
Shares
or
Units
of
Stock That
Have
Not
Vested
(#)
|
Market
Value of Shares or Units of Stock
That
Have Not
Vested
($)
|
Equity
Incentive
Plan
Awards: Number of Unearned Shares, Units or Other Rights That Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards: Market or Payout Value
of
Unearned Shares, Units or Other Rights That Have Not Vested
($)
|
|||||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|||||||||||||
|
Donald
T. Johnson, Jr.
|
-
|
50,233 | (1) | $ | 1,369,352 |
-
|
-
|
|||||||||||||||
| 108,146 | 0 | $ | 14.0000 |
01/02/14
|
||||||||||||||||||
| 75,000 | 0 | $ | 15.8500 |
06/02/15
|
||||||||||||||||||
| 18,750 | 37,500 | (2) | $ | 24.6900 |
06/01/16
|
|||||||||||||||||
| 0 | 87,700 | (3) | $ | 20.8000 |
01/19/17
|
|||||||||||||||||
|
Todd
R. Peters
|
-
|
11,099 | (4) | $ | 302,559 |
-
|
-
|
|||||||||||||||
| 5,625 | 11,250 | (2) | $ | 24.6900 |
06/01/16
|
|||||||||||||||||
| 0 | 15,588 | (5) | $ | 30.4400 |
06/05/17
|
|||||||||||||||||
|
William
L. Conley, Jr.
|
-
|
6,862 | (6) | $ | 187,058 |
-
|
-
|
|||||||||||||||
| 25,000 | 0 | $ | 14.1100 |
08/07/12
|
||||||||||||||||||
| 10,000 | 0 | $ | 14.9000 |
05/12/14
|
||||||||||||||||||
| 11,250 | 0 | $ | 15.8500 |
06/02/15
|
||||||||||||||||||
| 2,813 | 5,624 | (2) | $ | 24.6900 |
06/01/16
|
|||||||||||||||||
| 0 | 12,012 | (5) | $ | 30.4400 |
06/05/17
|
|||||||||||||||||
|
Joseph
Salamunovich
|
-
|
5,229 | (7) | $ | 142,543 |
-
|
-
|
|||||||||||||||
| 20,000 | 0 | $ | 22.9000 |
05/08/12
|
||||||||||||||||||
| 10,000 | 0 | $ | 14.9000 |
05/12/14
|
||||||||||||||||||
| 11,250 | 0 | $ | 15.8500 |
06/02/15
|
||||||||||||||||||
| 2,813 | 5,624 | (2) | $ | 24.6900 |
06/01/16
|
|||||||||||||||||
| 0 | 6,764 | (5) | $ | 30.4400 |
06/05/17
|
|||||||||||||||||
|
Richard
L. Stanley
|
-
|
28,000 | (8) | $ | 763,280 |
-
|
-
|
|||||||||||||||
| 0 | 30,000 | (8) | $ | 30.1700 |
07/09/17
|
|||||||||||||||||
|
(1)
|
9,800
shares vested in January 2008; 14,583 shares vest in June 2008; 9,800
shares vest in January 2009; 6,250 shares vest in June 2009; and 9,800
shares vest in January 2010.
|
|
(2)
|
Vest
in equal installments in June 2008 and June
2009.
|
|
(3)
|
29,234
options vested in January 2008 and the balance vest in equal installments
in January 2009 and January 2010.
|
|
(4)
|
5,992
shares vest in June 2008; 3,491 shares vest in June 2009; and 1,616 shares
vest in June 2010.
|
|
(5)
|
Vest
in equal installments in June 2008, June 2009 and June
2010.
|
|
(6)
|
3,433
shares vest in June 2008; 2,183 shares vest in June 2009; and 1,246 shares
vest in June 2010.
|
|
(7)
|
2,889
shares vest in June 2008; 1,639 shares vest in June 2009; and 701 shares
vest in June 2010.
|
|
(8)
|
Vest
in equal installments in July 2008, July 2009 and July
2010.
|
Option
Exercise and Stock Vesting Table
The
following table sets forth information regarding the exercise of stock options
and vesting of restricted stock in 2007 for the NEOs:
|
|
Option
Awards
|
Restricted
Stock Awards
|
||||||||
|
Name
|
Number
of
Shares
Acquired
on
Exercise
(#)
|
Value
Realized
Upon
Exercise
($)
|
Number
of
Shares
Acquired
on
Vesting
(#)
|
Value
Realized
Upon
Vesting
($)
|
||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||||
|
Donald
T. Johnson, Jr.
|
31,854 | $ | 642,972 | 14,583 | $ | 442,886 | ||||
|
Todd
R. Peters
|
23,333 | $ | 371,683 | 12,708 | $ | 321,028 | ||||
|
William
L. Conley, Jr.
|
0 | $ | 0 | 3,021 | $ | 89,574 | ||||
|
Joseph
Salamunovich
|
15,000 | $ | 159,875 | 3,855 | $ | 112,725 | ||||
|
Richard
L. Stanley
|
0 | $ | 0 | 0 | $ | 0 | ||||
Nonqualified
Defined Contribution and Other Nonqualified Deferred Compensation
Plans
The
following table sets forth information regarding the NEOs’ participation in our
deferred compensation plan during 2007:
|
Name
|
Executive
Contributions
in
Last FY
($)(1)
|
Registrant
Contributions in Last FY
($)(2)(3)
|
Aggregate
Earnings
in
Last FY
($)(4)
|
Aggregate
Withdrawals/ Distributions
($)
|
Aggregate
Balance
at
Last
FYE
($)
|
|||||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
|||||||||||||
|
Donald
T. Johnson Jr.
Chairman,
President, CEO
|
$ | 420,000 | $ | 28,876 | (5) | $ | (3,999 | ) | $ |
0
|
$ | 1,699,095 | ||||||
|
Todd
R. Peters
Vice
President and CFO
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
|
William
L. Conley, Jr.
President,
ATC Logistics & Electronics
|
$ | 105,705 | $ | 13,989 | (6) | $ | 20,013 | $ | 0 | $ | 316,324 | |||||||
|
Joseph
Salamunovich
Vice
President, General Counsel and Secretary
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
|
Richard
L. Stanley
President,
ATC Drivetrain
|
$ | 14,173 | $ | 7,087 | $ | 232 | $ | 0 | $ | 21,492 | ||||||||
|
(1)
|
All
of these amounts are reported as 2007 compensation in the Summary
Compensation Table.
|
|
(2)
|
All
of these amounts are reported as "All Other Compensation" in the Summary
Compensation Table.
|
|
(3)
|
In
2007, the Company provided a matching contribution of 50% of the first 10%
of base salary deferred.
|
|
(4)
|
None
of these amounts are reported as 2007 compensation in the Summary
Compensation Table.
|
|
(5)
|
Includes
special Company contribution of $876 to replace a forfeited 401(k) Plan
Company matching contribution.
|
|
(6)
|
Includes
special Company contribution of $1,004 to replace a forfeited 401(k) Plan
Company matching contribution.
|
Our
nonqualified deferred compensation plan, which is designed to comply with the
requirements of Section 409A of the Internal Revenue Code, enables our
executive officers and directors to defer a portion of the cash compensation
payable to them. Officers may defer up to 75% of base salary and up
to 100% of annual incentive bonus and directors may defer up to 100% of annual
retainer. The plan provides for a Company contribution of 50 cents
for each dollar of the first 10% of base salary deferred by an
officer. Plan participants elect to invest contributions in assorted
mutual funds available under the plan. Distributions from the plan
can be made in a lump sum payment or in annual payments over a period not to
exceed 15 years. “In-service” distributions (i.e., distributions made
while the participant is still employed by us) may not be made prior to two
years after the establishment of the in-service account in
question. “Post-separation” distributions (i.e., distributions made
after the participant ceases to be employed by us) may not be made until six
months after the separation. A participant may also receive a
one-time distribution of some or all of such participant’s deferred account in
the event of financial hardship caused by certain “unforeseen emergencies” (as
defined in the plan).
The
following table shows the funds available under the deferred compensation plan
and their annual rate of return for the year ended December 31, 2007, as
reported by the administrator of the plan:
|
Name of Fund
|
Rate
of
Return
|
Name of Fund
|
Rate
of
Return
|
|||||
|
American
Century Equity Income Adv. Fund
|
1.43 | % |
Principal
Investors Money Market Pfd. Fund
|
4.76 | % | |||
|
American
Funds EuroPacific Growth R3 Fund
|
18.58 | % |
Principal
Investors Partners MidCap Value Pfd. Fund
|
(2.04 | )% | |||
|
American
Funds Growth Fund of America R3 Fund
|
10.59 | % |
Principal
Investors Real Estate Securities Pfd. Fund
|
(17.74 | )% | |||
|
Calvert
Social Investment Bond A Fund
|
6.66 | % |
Principal
Investors SmallCap Blend Pfd. Fund
|
1.63 | % | |||
|
Lord
Abbett All Value P Fund
|
7.39 | % |
Principal
Investors SmallCap Value Pfd. Fund
|
(7.67 | )% | |||
|
Principal
Investors International Growth Pfd. Fund
|
12.16 | % |
Russell
LifePoints® Balanced Strategy E Fund
|
6.78 | % | |||
|
Principal
Investors LargeCap Growth Pfd. Fund
|
22.73 | % |
Russell
LifePoints® Equity Growth Strategy E Fund
|
7.38 | % | |||
|
Principal
Investors MidCap Blend Pfd. Fund
|
9.16 | % | ||||||
Potential
Payments Upon Termination or Change-in-Control
Each of
the employment agreements with our NEOs provides that we will make severance
payments and provide severance benefits to the executive if his employment with
us terminates under certain circumstances. For purposes of the
following discussion, the “termination date” means the date the executive ceases
to be our employee, whether due to nonrenewal of the employment agreement,
termination by us, or the executive’s resignation, death or
disability.
Mr.
Johnson’s severance is equal to two years of base salary and 2.0 times his
target bonus under our annual IC Plan, plus a prorated portion of any cash bonus
under our LTIP. Severance is payable if (i) he is terminated
without cause or resigns for “good reason” (see below), (ii) his employment
agreement is not renewed within 18 months after a “change in control” (see
below), or (iii) he becomes disabled. Severance payments will be
made over the 24-month period following his termination date unless the
termination date occurs within 18 months after a change in control, in
which case the severance will be made in a single payment within ten days after
the termination date. Mr. Johnson’s medical coverage runs for five
years after termination. In February 2008 his employment agreement
was amended to increase his severance if, within 18 months after a change in
control, he is terminated without cause, he resigns for good reason, or his
agreement is not renewed, in which case his severance will equal three years of
base salary, 3.0 times his target bonus under our annual IC Plan, and a prorated
portion of any cash bonuses under our annual IC Plan and our
LTIP.
Mr.
Johnson’s unvested stock options and restricted stock as of his termination date
will continue to vest according to their vesting schedules after the termination
date under the following circumstances: (i) the expiration of his
employment agreement without renewal; (ii) his termination without cause or
resignation for good reason; (iii) his permanent disability; or
(iv) his voluntary resignation if the Board determines that
Mr. Johnson has provided an orderly transition to his
successor. If Mr. Johnson ceases
to be our employee due to his death, then all his unvested stock options and
restricted stock will immediately vest. If he is terminated for cause
or voluntarily resigns without providing an orderly transition, then his stock
options and restricted stock that are unvested as of the termination date will
terminate. His options that are vested on his termination date or
that subsequently vest will be exercisable until the tenth anniversary of the
date of their grant.
Mr.
Johnson’s severance payments are subject to a tax “gross-up” of up to $5,000,000
to offset the “parachute” excise tax under Internal Revenue Code
Section 4999 if a change in control occurs within 18 months prior to his
termination date.
Severance
is payable to an executive officer other than Mr. Johnson if (i) the
executive is terminated without cause or resigns for good reason, or
(ii) his or her employment agreement is not renewed. Severance
is equal to 12 months of base salary (18 months for Mr. Peters) plus a
prorated portion of the cash bonus that would be payable under our annual IC
Plan for the year in which the termination date occurs. If the
termination date occurs within 18 months after a change in control, the
executive officer would also receive a payment equal to his target bonus under
the IC Plan for the year in which the termination date occurs. The
severance also includes continued medical benefits during the severance
period. In February 2008 our Compensation Committee increased the
severance payable to each of Messrs. Peters, Conley, Salamunovich and three
other executive officers in the event of termination within 18 months after a
change in control. In that event, severance will equal 18 months of
base salary (24 months for Mr. Peters), 1.5 times the target bonus under our
annual IC Plan (2.0 times for Mr. Peters) and a prorated portion of any cash
bonuses under our annual IC Plan and our LTIP.
Severance
payments to an executive officer will ordinarily be made over the severance
period unless the termination date occurs within 18 months after a change
in control, in which case the severance will be made in a single payment within
ten days after the termination date.
If the
employment of an executive officer (other than Mr. Johnson) terminates, all of
his unvested stock options and shares of restricted stock will terminate on the
termination date, unless either (i) a change in control has occurred within
18 months prior to the termination date or (ii) termination is due to the
executive’s death or permanent disability, in which case all such unvested
options and restricted stock will vest on the termination
date. Generally an executive will have 30 days after his or her
termination date in which to exercise any stock options that vested on or before
the executive’s termination date, except in the case of termination without
cause within 18 months after a change in control, upon death or disability, in
which case the executive (or his estate) has one year from the termination date
in which to exercise such vested options.
None of
the executive employment agreements in place at December 31, 2007 provides
for any payments or benefits upon a change in control unless the executive’s
employment terminates at the time of the change in control.
None of
the executive employment agreements, other than Mr. Johnson’s, provide for
a tax “gross-up” to offset the “parachute” excise tax under Internal Revenue
Code Section 4999.
It is a
condition to receiving severance payments and benefits that the executive
officer release us from all legal claims of any nature that he or she has or may
have as of the termination date.
“Change
in control” (CIC) occurs if (i) a reorganization, merger or consolidation
of Aftermarket Technology Corp. or sale of all or substantially all of our
assets occurs unless after such transaction at least 85% of the total voting
power of the entity surviving or resulting from such transaction is beneficially
owned by persons who prior to the transaction beneficially owned 100% of the
total voting power of Aftermarket Technology Corp., (ii) any stockholder
(or group of stockholders) becomes the beneficial owner of more than 35% of the
total voting power of Aftermarket Technology Corp., or (iii) during any 12
month period individuals who at the beginning of such 12-month period
constituted our Board of Directors (together with any new directors whose
election by such Board or whose nomination for election by our stockholders was
approved by a vote of a majority of the directors
then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of our Board of Directors.
“Good
reason” means (i) a material diminution in the executive officer’s
compensation, authority or responsibilities that is not justified by the
executive’s performance, or (ii) our material breach of the employment
agreement, where such diminution or breach is not cured within 30 days after
notice from the executive officer.
The
following tables show the payments and benefits that the NEOs could receive in
the event of certain termination events, based on their employment agreements as
in effect on December 31, 2007:
|
Donald
T. Johnson Jr.
|
|||||||||||||||||||||
|
Executive
Benefits and Payments
Upon
Termination
|
Voluntary
Termination Without Board- approved Transition
|
Voluntary
Termination With
Board-
approved
Transition
|
For
Cause Termination
|
Involuntary
Termination Without
Cause(1)
|
Involuntary
Termination Without Cause Within 18
Months
after
CIC(1)
|
Death
|
Disability
|
||||||||||||||
|
Compensation:
|
|||||||||||||||||||||
|
Severance
Allowance
|
- | - | - | $ | 2,128,000 | $ | 2,128,000 | - | $ | 1,120,000 | |||||||||||
|
Short-term
Incentive
|
|||||||||||||||||||||
|
Earned
Annual Incentive Award
|
$ | 1,512,000 | $ | 1,512,000 | $ | 1,512,000 | $ | 1,512,000 | $ | 1,512,000 | $ | 1,512,000 | $ | 1,512,000 | |||||||
|
Long-term
Incentives
|
|||||||||||||||||||||
|
3-year
Incentive Award
|
$ | 336,000 | - | - | $ | 336,000 | $ | 336,000 | $ | 336,000 | $ | 336,000 | |||||||||
|
Stock
Options(2)
|
- | $ | 662,917 | - | $ | 662,917 | $ | 662,917 | $ | 662,917 | $ | 662,917 | |||||||||
|
Restricted
Stock(3)
|
- | $ | 1,369,352 | - | $ | 1,369,352 | $ | 1,369,352 | $ | 1,369,352 | $ | 1,369,352 | |||||||||
|
Benefits
and Perquisites:
|
|||||||||||||||||||||
|
Medical
Plan Coverage(4)
|
- | - | - | $ | 30,461 | $ | 30,461 | $ | 30,461 | $ | 30,461 | ||||||||||
|
Life
Insurance Proceeds
|
- | - | - | - | - | $ | 1,680,000 | - | |||||||||||||
|
Vested
Portion of Company
Match of Deferred Comp. |
$ | 42,424 | $ | 42,424 | $ | 42,424 | $ | 42,424 | $ | 70,707 | $ | 70,707 | $ | 70,707 | |||||||
|
Accrued
Vacation Pay
|
$ | 2,057 | $ | 2,057 | $ | 2,057 | $ | 2,057 | $ | 2,057 | $ | 2,057 | $ | 2,057 | |||||||
|
Outplacement
Assistance
|
- | - | - | $ | 25,000 | $ | 25,000 | - | - | ||||||||||||
|
280G
Tax Gross Up
|
- | - | - | - | - | - | - | ||||||||||||||
|
Total:
|
$ | 1,892,481 | $ | 3,588,750 | $ | 1,556,481 | $ | 6,108,211 | $ | 6,136,494 | $ | 5,663,494 | $ | 5,103,494 | |||||||
|
(1)
|
Includes
resignation for good reason.
|
|
(2)
|
Unvested
awards that either (a) continue to vest according to its terms or (b)
accelerate upon the terminating event multiplied by (i) our closing stock
price on December 31, 2007 minus (ii) the exercise price of such
awards.
|
|
(3)
|
Unvested
awards that accelerate upon the terminating event multiplied by our
closing stock price on December 31,
2007.
|
|
(4)
|
Estimated
employer subsidy.
|
|
Todd
R. Peters
|
||||||||||||||||||
|
Executive
Benefits and Payments
Upon
Termination
|
Voluntary
Termination
|
For
Cause Termination
|
Involuntary
Termination Without
Cause(1)
|
Involuntary
Termination Without Cause Within 18 Months after CIC(1)
|
Death
|
Disability
|
||||||||||||
|
Compensation:
|
||||||||||||||||||
|
Severance
Allowance
|
- | - | $ | 506,250 | $ | 708,750 | - | - | ||||||||||
|
Short-term
Incentive
|
||||||||||||||||||
|
Earned
Annual Incentive Award
|
$ | 607,500 | $ | 607,500 | $ | 607,500 | $ | 607,500 | $ | 607,500 | $ | 607,500 | ||||||
|
Long-term
Incentives
|
||||||||||||||||||
|
3-year
Incentive Award
|
$ | 84,350 | ||||||||||||||||
|
Stock
Options(2)
|
- | - | - | $ | 28,913 | $ | 28,913 | $ | 28,913 | |||||||||
|
Restricted
Stock(3)
|
- | - | - | $ | 302,559 | $ | 302,559 | $ | 302,559 | |||||||||
|
Benefits
and Perquisites:
|
||||||||||||||||||
|
Medical
Plan Coverage(4)
|
- | - | $ | 12,342 | $ | 12,342 | - | - | ||||||||||
|
Life
Insurance Proceeds
|
- | - | - | - | $ | 1,013,000 | - | |||||||||||
|
Vested
Portion of Company
Match
of Deferred
Comp.
|
- | - | - | - | - | - | ||||||||||||
|
Accrued
Vacation Pay
|
$ | 1,298 | $ | 1,298 | $ | 1,298 | $ | 1,298 | $ | 1,298 | $ | 1,298 | ||||||
|
Outplacement
Assistance
|
- | - | $ | 25,000 | $ | 25,000 | - | - | ||||||||||
|
280G
Tax Gross Up
|
- | - | - | - | - | - | ||||||||||||
|
Total:
|
$ | 608,798 | $ | 608,798 | $ | 1,152,390 | $ | 1,770,712 | $ | 1,953,270 | $ | 940,270 | ||||||
|
(1)
|
Includes
nonrenewal of agreement and resignation for good
reason.
|
|
(2)
|
Unvested
awards that accelerate upon the terminating event multiplied by (i) our
closing stock price on December 31, 2007 minus (ii) the exercise price of
such awards.
|
|
(3)
|
Unvested
awards that accelerate upon the terminating event multiplied by our
closing stock price on December 31,
2007.
|
|
(4)
|
Estimated
employer subsidy.
|
|
William
L. Conley Jr.
|
||||||||||||||||||
|
Executive
Benefits and Payments
Upon
Termination
|
Voluntary
Termination
|
For
Cause Termination
|
Involuntary
Termination Without
Cause(1)
|
Involuntary
Termination Without Cause Within 18 Months after
CIC(1)
|
Death
|
Disability
|
||||||||||||
|
Compensation:
|
||||||||||||||||||
|
Severance
Allowance
|
- | - | $ | 260,000 | $ | 390,000 | - | - | ||||||||||
|
Short-term
Incentive
|
||||||||||||||||||
|
Earned
Annual Incentive Award
|
$ | 352,867 | $ | 352,867 | $ | 352,867 | $ | 352,867 | $ | 352,867 | $ | 352,867 | ||||||
|
Long-term
Incentives
|
||||||||||||||||||
|
3-year
Incentive Award
|
$ | 65,000 | ||||||||||||||||
|
Stock
Options(2)
|
- | - | - | $ | 14,454 | $ | 14,454 | $ | 14,454 | |||||||||
|
Restricted
Stock(3)
|
- | - | - | $ | 187,058 | $ | 187,058 | $ | 187,058 | |||||||||
|
Benefits
and Perquisites:
|
||||||||||||||||||
|
Medical
Plan Coverage(4)
|
- | - | $ | 6,092 | $ | 6,092 | - | - | ||||||||||
|
Life
Insurance Proceeds
|
- | - | - | - | $ | 780,000 | - | |||||||||||
|
Vested
Portion of Company
Match
of Deferred Comp.
|
$ | 38,299 | $ | 38,299 | $ | 38,299 | $ | 38,299 | $ | 38,299 | $ | 38,299 | ||||||
|
Accrued
Vacation Pay
|
$ | 14,000 | $ | 14,000 | $ | 14,000 | $ | 14,000 | $ | 14,000 | $ | 14,000 | ||||||
|
Outplacement
Assistance
|
- | - | $ | 25,000 | $ | 25,000 | - | - | ||||||||||
|
280G
Tax Gross Up
|
- | - | - | - | - | - | ||||||||||||
|
Total:
|
$ | 405,166 | $ | 405,166 | $ | 696,258 | $ | 1,092,770 | $ | 1,386,678 | $ | 606,678 | ||||||
|
(1)
|
Includes
nonrenewal of agreement and resignation for good
reason.
|
|
(2)
|
Unvested
awards that accelerate upon the terminating event multiplied by (i) our
closing stock price on December 31, 2007 minus (ii) the exercise price of
such awards.
|
|
(3)
|
Unvested
awards that accelerate upon the terminating event multiplied by our
closing stock price on December 31,
2007.
|
|
(4)
|
Estimated
employer subsidy.
|
|
Joseph
Salamunovich
|
||||||||||||||||||
|
Executive
Benefits and Payments
Upon
Termination
|
Voluntary
Termination
|
For
Cause Termination
|
Involuntary
Termination Without
Cause(1)
|
Involuntary
Termination Without Cause Within 18 Months after CIC(1)
|
Death
|
Disability
|
||||||||||||
|
Compensation:
|
||||||||||||||||||
|
Severance
Allowance
|
- | - | $ | 244,000 | $ | 353,800 | - | - | ||||||||||
|
Short-term
Incentive
|
||||||||||||||||||
|
Earned
Annual Incentive Award
|
$ | 329,400 | $ | 329,400 | $ | 329,400 | $ | 329,400 | $ | 329,400 | $ | 329,400 | ||||||
|
Long-term
Incentives
|
||||||||||||||||||
|
3-year
Incentive Award
|
$ | 36,600 | ||||||||||||||||
|
Stock
Options(2)
|
- | - | - | $ | 14,454 | $ | 14,454 | $ | 14,454 | |||||||||
|
Restricted
Stock(3)
|
- | - | - | $ | 142,543 | $ | 142,543 | $ | 142,543 | |||||||||
|
Benefits
and Perquisites:
|
||||||||||||||||||
|
Medical
Plan Coverage(4)
|
- | - | $ | 8,228 | $ | 8,228 | - | - | ||||||||||
|
Life
Insurance Proceeds
|
- | - | - | - | $ | 732,000 | - | |||||||||||
|
Vested
Portion of Company
Match
of Deferred Comp.
|
- | - | - | - | - | - | ||||||||||||
|
Accrued
Vacation Pay
|
$ | 938 | $ | 938 | $ | 938 | $ | 938 | $ | 938 | $ | 938 | ||||||
|
Outplacement
Assistance
|
- | - | $ | 25,000 | $ | 25,000 | - | - | ||||||||||
|
280G
Tax Gross Up
|
- | - | - | - | - | - | ||||||||||||
|
Total:
|
$ | 330,338 | $ | 330,338 | $ | 607,566 | $ | 910,963 | $ | 1,219,335 | $ | 487,335 | ||||||
|
(1)
|
Includes
nonrenewal of agreement and resignation for good
reason.
|
|
(2)
|
Unvested
awards that accelerate upon the terminating event multiplied by (i) our
closing stock price on December 31, 2007 minus (ii) the exercise price of
such awards.
|
|
(3)
|
Unvested
awards that accelerate upon the terminating event multiplied by our
closing stock price on December 31,
2007.
|
|
(4)
|
Estimated
employer subsidy.
|
|
Richard
L. Stanley
|
||||||||||||||||||
|
Executive
Benefits and Payments
Upon
Termination
|
Voluntary
Termination
|
For
Cause Termination
|
Involuntary
Termination
Without
Cause(1)
|
Involuntary
Termination Without Cause Within 18 Months after
CIC(1)
|
Death
|
Disability
|
||||||||||||
|
Compensation:
|
||||||||||||||||||
|
Severance
Allowance
|
- | - | $ | 335,000 | $ | 502,500 | - | - | ||||||||||
|
Short-term
Incentive
|
||||||||||||||||||
|
Earned
Annual Incentive Award
|
$ | 118,181 | $ | 118,181 | $ | 118,181 | $ | 118,181 | $ | 118,181 | $ | 118,181 | ||||||
|
Long-term
Incentives
|
||||||||||||||||||
|
3-year
Incentive Award
|
$ | 20,938 | ||||||||||||||||
|
Stock
Options(2)
|
- | - | - | $ | 0 | $ | 0 | $ | 0 | |||||||||
|
Restricted
Stock(3)
|
- | - | - | $ | 763,280 | $ | 763,280 | $ | 763,280 | |||||||||
|
Benefits
and Perquisites:
|
||||||||||||||||||
|
Medical
Plan Coverage(4)
|
- | - | $ | 3,241 | $ | 3,241 | - | - | ||||||||||
|
Life
Insurance Proceeds
|
- | - | - | - | $ | 1,005,000 | - | |||||||||||
|
Vested
Portion of Company
Match
of Deferred Comp.
|
- | - | - | $ | 7,164 | $ | 7,164 | $ | 7,164 | |||||||||
|
Accrued
Vacation Pay
|
- | - | - | - | - | - | ||||||||||||
|
Outplacement
Assistance
|
- | - | $ | 25,000 | $ | 25,000 | - | - | ||||||||||
|
280G
Tax Gross Up
|
- | - | - | - | - | - | ||||||||||||
|
Total:
|
$ | 118,181 | $ | 118,181 | $ | 481,422 | $ | 1,440,304 | $ | 1,893,625 | $ | 888,625 | ||||||
|
(1)
|
Includes
nonrenewal of agreement and resignation for good
reason.
|
|
(2)
|
Unvested
awards that accelerate upon the terminating event multiplied by (i) our
closing stock price on December 31, 2007 minus (ii) the exercise price of
such awards.
|
|
(3)
|
Unvested
awards that accelerate upon the terminating event
multiplied by our closing stock price on December 31,
2007.
|
|
(4)
|
Estimated
employer subsidy.
|
Compensation
of Directors
The
following table sets forth the compensation for 2007 for those persons who
served as members of our Board of Directors during 2007 (other than the Chairman
of the Board, whose compensation is included in the above tables as a named
executive officer):
|
Name
|
Fees
earned
or
paid
in
cash
($)
|
Stock
Awards
($)(1)
|
Option
Awards
($)(1)
|
Non-Equity
Incentive Plan Compen-
sation ($)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
($)
|
All
Other Compen-sation
($)
|
Total
($)
|
|||||||||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|||||||||||||||||
|
Robert
L. Evans
|
$ | 50,000 | (2) | $ | 43,775 | (3) (4) | $ | 48,225 | (5) (6) | $ | 0 | $ | 0 | $ | 0 | $ | 142.000 | |||||||
|
Curtland
E. Fields
|
$ | 50,000 | $ | 43,775 | (3) (4) | $ | 48,225 | (5) (6) | $ | 0 | $ | 0 | $ | 0 | $ | 142,000 | ||||||||
|
Michael
J. Hartnett
|
$ | 50,000 | $ | 43,775 | (3) (4) | $ | 48,225 | (5) (7) | $ | 0 | $ | 0 | $ | 0 | $ | 142,000 | ||||||||
|
Michael
D. Jordan
|
$ | 50,000 | (2) | $ | 43,775 | (3) (4) | $ | 53,668 | (5) (6) | $ | 0 | $ | 0 | $ | 0 | $ | 147,443 | |||||||
|
S.
Lawrence Prendergast
|
$ | 50,000 | $ | 43,775 | (3) (4) | $ | 53,668 | (5) (6) | $ | 0 | $ | 0 | $ | 0 | $ | 147,443 | ||||||||
|
Edward
Stewart
|
$ | 50,000 | (2) | $ | 43,775 | (3) (4) | $ | 48,225 | (5) (6) | $ | 0 | $ | 0 | $ | 0 | $ | 142,000 | |||||||
(1)
The assumptions used in the computation of our stock and option award fair
values are set forth in Note 2 – Stock-Based Compensation to our consolidated
financial statements set forth in Item 8 of our Annual Report on Form 10-K for
the year ended December 31, 2007.
(2)
Entire 2007 cash retainer has been deferred in Company's Nonqualified Deferred
Compensation Plan.
(3)
The grant date fair value of 2,000 shares of restricted stock granted in 2007 is
$60,960.
(4)
As of December 31, 2007, the director held 3,833 shares of restricted
stock.
(5)
The grant date fair value of 6,000 options to purchase common stock granted in
2007 is $78,522.
(6)
As of December 31, 2007, the director held 29,000 options to purchase common
stock.
(7)
As of December 31, 2007, the director held 124,000 options to purchase common
stock.
We pay
our outside directors an annual fee of $50,000 for serving on the Board and we
reimburse them for their expenses in connection with attending Board and
committee meetings. Directors do not receive any compensation for
serving on a committee or serving as lead director or a committee
chairman. In addition to the annual fee, each outside director
receives an annual grant of restricted stock and options to purchase our common
stock. For 2007 the grant was 2,000 shares of restricted stock and
6,000 stock options. Each director’s restricted stock (for which no
consideration was paid) vests in one-third increments on the first, second and
third anniversaries of the date of grant. The option exercise price
is $30.48 (the closing price of our common stock on Nasdaq on the date the
options were granted), the options vest in one-third increments on the first,
second and third anniversaries of the date of grant, and they expire in
2017.
Stock
Incentive Plans
Pursuant
to our 1998, 2000, 2002, 2004 and 2006 stock incentive plans, officers,
directors, employees and consultants of Aftermarket Technology Corp. and its
affiliates are eligible to receive stock options, annual incentive bonuses and
incentive stock. In addition, we have stock options outstanding under
a 1996 stock incentive plan under which awards may no longer be
made.
The stock
incentive plans are administered by the Compensation and Nominating Committee of
our Board of Directors, although the Board of Directors makes decisions with
respect to awards for our Chief Executive Officer and may exercise any of the
Committee’s other authority under the plans in lieu of the Committee’s exercise
thereof. Subject to the express provisions of the stock incentive
plans, the Committee has broad authority in administering and interpreting the
plans. Awards to employees may include a provision terminating the
award upon termination of employment under certain circumstances or accelerating
the receipt of benefits upon the occurrence of specified
events. Restricted stock granted under the stock incentive plans are
subject to vesting provisions. Stock options are also subject to
vesting provisions and expire on the tenth anniversary of the date of
grant.
As of
February 15, 2008, there
were 236,123 shares of restricted stock issued to our directors, officers and
employees and 1,586,002 options to purchase common stock granted to our
directors, officers and employees pursuant to the plans, and the number of
shares available for future issuance pursuant to the plans was
749,372.
For
information regarding the number of shares of restricted stock and stock options
held by our directors and officers, see "Security Ownership of Certain
Beneficial Owners and Management."
Compensation
Committee Interlocks and Insider Participation
The
Compensation and Nominating Committee of our Board of Directors is composed of
Robert L. Evans, Curtland E. Fields (Chairman) and Michael D.
Jordan, none of whom are or have ever been an officer or employee of Aftermarket
Technology Corp. or its subsidiaries and each of whom is, and at all times
during 2007 was, independent as defined in the Nasdaq listing standards and the
regulations of the Securities and Exchange Commission. During 2007
none of our executive officers served on the board of directors or compensation
committee of any entity with which any of Messrs. Evans, Fields or Jordan or any
other member of our Board of Directors had any affiliation.
Compensation
Committee Report
The
Compensation and Nominating Committee of our Board of Directors has reviewed and
discussed the Compensation Discussion and Analysis at the beginning of this
Executive Compensation section with management and based on such review and
discussions, the Compensation and Nominating Committee has recommended to the
Board of Directors that the Compensation Discussion and Analysis be included in
the Annual Report on Form 10-K for the year ended December 31, 2007 and
this Proxy Statement.
Compensation
and Nominating Committee
Curtland
E. Fields, Chairman
Robert L.
Evans
Michael
D. Jordan
The
foregoing report of the Compensation and Nominating Committee shall not be
deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act of 1933
or under the Exchange Act, except to the extent that we specifically incorporate
this information by reference, and shall not otherwise be deemed filed under
such Acts.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth the beneficial ownership of our common stock (the
only class of our issued and outstanding voting securities), as of
February 15, 2008 by each of our directors, our Chief Executive Officer,
our Chief Financial Officer, each of our three other most highly compensated
executive officers as of December 31, 2007, our directors and executive
officers as a group, and each person who at February 15, 2008 was known to
us to beneficially own more than 5% of our outstanding common
stock.
|
Beneficial
Owner(1)
|
Number
of
Shares(2) |
|
Voting
Percentage
|
|
|
FMR
Corp.(3)
|
2,875,527
|
13.0
|
||
|
Wells
Fargo & Company(4)
|
1,485,704
|
6.7
|
||
|
Daruma
Asset Management, Inc.(5)
|
1,358,400
|
6.1
|
||
|
Barclays
Global Investors(6)
|
1,341,644
|
6.1
|
||
|
Donald
T. Johnson, Jr.(7)
|
318,177
|
1.4
|
||
|
Todd
R. Peters(8)
|
38,738
|
*
|
||
|
William
L. Conley, Jr.(9)
|
61,863
|
*
|
||
|
Richard
L. Stanley(10)
|
28,000
|
*
|
||
|
Joseph
Salamunovich(11)
|
58,763
|
*
|
||
|
Robert
L. Evans(12)
|
35,000
|
*
|
||
|
Curtland
E. Fields(12)
|
35,000
|
*
|
||
|
Dr.
Michael J. Hartnett(13)
|
130,000
|
*
|
||
|
Michael
D. Jordan(12)
|
35,000
|
*
|
||
|
S.
Lawrence Prendergast(12)
|
36,000
|
*
|
||
|
Edward
Stewart(12)
|
52,000
|
*
|
||
|
All
directors and officers as a group (15 persons)(14)
|
998,137
|
4.4
|
_______________
* Less
than 1%.
|
(1)
|
Unless
otherwise noted, the address of each beneficial owner is 1400 Opus Place,
Suite 600, Downers Grove, IL
60515.
|
|
(2)
|
The
shares of common stock underlying options granted under our stock
incentive plans that are exercisable as of February 15, 2008 or that
will become exercisable within 60 days thereafter (such options being
referred to as “exercisable”) are deemed to be outstanding for the purpose
of calculating the beneficial ownership of the holder of such options, but
are not deemed to be outstanding for the purpose of computing the
beneficial ownership of any other
person.
|
|
(3)
|
FMR
Corp.’s address is 82 Devonshire Street, Boston, MA
02109.
|
|
(4)
|
Wells
Fargo & Company’s address is 420 Montgomery Street, San Francisco, CA
94104.
|
|
(5)
|
Daruma
Asset Management, Inc.’s address is 80 West 40th
Street, 9th
Floor, New York, NY 10018.
|
|
(6)
|
Barclays
Global Investors’ address is 45 Fremont Street, San Francisco, CA
94105.
|
|
(7)
|
Includes
62,664 shares of restricted stock and 231,130 shares subject to
exercisable options. Excludes 167,241 shares subject to options
that are not exercisable.
|
|
(8)
|
Includes
11,099 shares of restricted stock and 5,625 shares subject to exercisable
options. Excludes 26,838 shares subject to options that are not
exercisable. 20,000 shares are pledged as security for a
personal loan from The Northern
Trust.
|
|
(9)
|
Includes
6,862 shares of restricted stock and 49,063 shares subject to exercisable
options. Excludes 17,636 shares subject to options that are not
exercisable.
|
|
(10)
|
Consists
of 28,000 shares of restricted stock. Excludes 30,000 shares
subject to options that are not
exercisable.
|
|
(11)
|
Includes
5,229 shares of restricted stock and 44,063 shares subject to exercisable
options. Excludes 12,388 shares subject to options that are not
exercisable.
|
|
(12)
|
Includes
3,833 shares of restricted stock and 29,000 shares subject to exercisable
options. Excludes 9,000 shares subject to options that are not
exercisable.
|
|
(13)
|
Includes
3,833 shares of restricted stock and 124,000 shares subject to exercisable
options. Excludes 9,000 shares subject to options that are not
exercisable.
|
|
(14)
|
Includes
156,322 shares of restricted stock and 735,300 shares subject to
exercisable options. Excludes 353,002 shares subject to options
that are not exercisable.
|
Since the
beginning of 2007, we have not engaged in, nor is there any current proposal
that we engage in, any transaction or series of related transactions with any of
our directors, executive officers, anyone known by us to own (of record or
beneficially) more than 5% of our outstanding common stock, or any member of the
immediate family of any of the foregoing.
The Audit
Committee of our Board of Directors is responsible for reviewing and approving
all “related party transactions” (as defined in the applicable Nasdaq listing
standards). Before approving such a transaction, the Audit Committee
would take into account all relevant factors that it deems appropriate,
including whether the related party transaction is on terms no less favorable to
us than terms generally available from an unaffiliated third party under the
same or similar circumstances, and the extent of the related person’s interest
in the transaction. The Audit Committee’s responsibility for related
party transactions is set forth in the Committee’s written charter (a copy of
which is available on our website at www.goATC.com). The
Audit Committee’s policy regarding related party transactions is not in writing,
but is the result of the oral consensus of the members of the
Committee.
We have
entered into separate but identical indemnification agreements with each of our
directors and executive officers. These agreements provide for, among
other things, indemnification to the fullest extent permitted by law and
advancement of expenses.
Independent
Auditor
Ernst
& Young LLP was our independent auditor for the year ended December 31,
2007. The appointment of the independent auditor is approved by the
Audit Committee of our Board of Directors. Consistent with past
years, the Audit Committee will not take action regarding the appointment of our
auditor for fiscal 2008 until the fourth quarter of this
year. Stockholder approval is not sought in connection with the
selection of auditors.
Representatives
of Ernst & Young will be present at the annual meeting and will be given an
opportunity to make a statement if they desire to do so and will respond to
appropriate questions from stockholders.
Fees
Paid to Independent Auditor
Set forth
below are the fees and expenses for Ernst & Young for each of the last
two years for the following services provided to us:
|
2007
|
2006
|
||||
|
Audit
Fees
(1)
|
$ | 1,078,263 | $ | 1,140,510 | |
|
Audit-Related
Fees
(2)
|
359,907 | 178,896 | |||
|
Tax
Fees
(3)
|
67,016 | 44,958 | |||
|
All
Other Fees
(4)
|
– | 6,600 | |||
|
Total
Fees
|
$ | 1,505,186 | $ | 1,370,964 | |
_______________
|
(1)
|
The
fees for 2007 are $53,698 higher than reported in our Annual Report on
Form 10-K for the year ended December 31, 2007 due to audit fees incurred
but not communicated until after the filing of the 2007 Annual Report on
Form10-K.
|
|
(2)
|
For
2007 consists of fees and expenses for services relating to a Statement of
Auditing Standards No. 70 review ($134,907) and fees related to certain
due diligence services ($225,000). For 2006 consists of fees
and expenses for services relating to a Statement of Auditing Standards
No. 70 review ($128,896) and diligence for a potential acquisition
($50,000).
|
|
(3)
|
Consists
of fees and expenses for assistance with (i) state, federal and
foreign tax returns ($67,016 for 2007 and $35,939 for 2006) and
(ii) other foreign tax related assistance ($9,019 for
2006).
|
|
(4)
|
Consists
of fees and expenses for assurance-related services for a
customer.
|
The Audit
Committee of our Board of Directors pre-approves each non-audit engagement or
service with or by our independent auditor. Prior to pre-approving
any such non-audit engagement or service, it is the Committee's practice to
first receive information regarding the engagement or service that (i) is
detailed as to the specific engagement or service, and (ii) enables the Audit
Committee to make a well-reasoned assessment of the impact of the engagement or
service on the auditor’s independence. In addition, the Chairman of
the Audit Committee is authorized to pre-approve any non-audit service between
regularly scheduled meetings of the Audit Committee, provided that the fees for
such service do not exceed $50,000 and that the Chairman’s approvals are
reported to the full Audit Committee at the next Audit Committee
meeting. The Audit Committee or the Audit Committee Chairman
pre-approved all non-audit engagements with, and services provided by, our
independent auditor during 2007 and 2006.
Audit
Committee Report
The Audit
Committee reviews the financial reporting process on behalf of the Board of
Directors. Management has the primary responsibility for the
financial statements, the reporting process and internal
controls. The independent auditor is responsible for auditing the
financial statements and expressing an opinion on the conformity of the audited
financial statements to generally accepted accounting principles.
In this
context, the Audit Committee has reviewed and discussed with management and the
independent auditor the audited financial statements. The Committee
has discussed with the independent auditor the matters required to be discussed
by Statement on Auditing Standards No. 61 (Communication with Audit
Committees). In addition, the Committee has received from the
independent auditor the written disclosures and the letter required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees) and discussed with the auditor its independence from
Aftermarket Technology Corp. and its management. The Committee has
also considered whether the independent auditor’s provision of non-audit
services is compatible with the auditor’s independence and has concluded that
the independent auditor is independent from Aftermarket Technology Corp. and its
management.
In its
oversight role for these matters, the Audit Committee relies on the information
and representations made by management and the independent
auditors. Accordingly, the Committee’s oversight does not provide an
independent basis to certify that the audit of the financial statements has been
carried out in accordance with generally accepted auditing standards, that the
financial statements are presented in accordance with generally accepted
accounting principles or that the independent auditor is in fact
“independent.”
In
reliance on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors, and the Board approved, that the audited
financial statements be included in the Annual Report on Form 10-K for the year
ended December 31, 2007.
|
|
The
Audit Committee
|
|
|
Dr.
Michael J. Hartnett
|
|
|
S.
Lawrence Prendergast, Chairman
|
|
|
Edward
Stewart
|
Any
stockholder who has not received a copy of the Annual Report may obtain one
without charge by writing to us at 1400 Opus Place, Suite 600, Downers
Grove, Illinois 60515. The Annual Report is also available on our
website at www.goATC.com. 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.
WITH
THE BOARD OF DIRECTORS
Stockholders
wishing to communicate with one or more of our directors may do so by sending a
letter addressed to the director or directors care of the Secretary, Aftermarket
Technology Corp., 1400 Opus Place, Suite 600, Downers Grove, Illinois
60515. At the direction of the Board, mail will be opened and
screened for security purposes. All mail, other than items deemed
obscene, will be forwarded to the appropriate director or
directors. Mail addressed to the directors generally or to the entire
Board will be forwarded to the Chairman of the Board. Any mail
regarding our financial statements, financial records, accounting practices or
internal controls or alleging any violation of our code of ethics will be
forwarded to the Audit Committee to be handled in accordance with the
Committee’s established procedures.
To reduce
the expenses of delivering duplicate proxy materials, we are taking advantage of
the Securities and Exchange Commission’s “householding” rules that permit us to
deliver a single Notice of Internet Availability or one set of proxy materials
to stockholders who share an address, unless otherwise requested. If
you share an address with another stockholder and have received only one Notice
or one set of proxy materials, you may request a separate copy of the Notice or
proxy materials at no cost to you by contacting us at (630) 271-8100, or by
writing to us at 1400 Opus Place, Suite 600, Downers Grove, Illinois
60515. For future annual meetings, you may request a separate Notice
or separate proxy materials for each stockholder within your household, or, in
the alternative, request that we send only one Notice or one set of proxy
materials to you if you are receiving multiple copies, by calling or writing to
Aftermarket Technology Corp. at the phone number and address given
above.
FOR
THE 2009 ANNUAL MEETING OF STOCKHOLDERS
Stockholder
proposals submitted pursuant to Rule 14a-8 of the Exchange Act must be received
by us on or before December 17, 2008 to
be considered for inclusion in the proxy statement for our 2009 annual meeting
of stockholders, which is expected to be held on or about June 3,
2009. Generally, a stockholder is eligible to present proposals under
Rule 14a-8 if he or she has been for at least one year the record or beneficial
owner of at least $2,000 in market value or 1% of securities entitled to be
voted at the 2009 annual meeting and he or she continues to own such securities
through the date on which the meeting is held.
If we
receive notice after March 10, 2009 of a stockholder’s intent to present a
proposal at the 2009 annual meeting, we will have the right to exercise
discretionary voting authority with respect to such proposal at the meeting,
without including information regarding the proposal in our proxy
materials.
By Order
of the Board of Directors,
Joseph
Salamunovich
Secretary
April 15,
2008
APPENDIX
A
