def14a
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Soliciting Material Pursuant to § 240.14a-12 |
CONSTAR INTERNATIONAL INC.
(Name of registrant as specified in its charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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by Exchange Act Rule 0-11(a)(2) and identify the filing for
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previous filing by registration statement number, or the Form
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CONSTAR INTERNATIONAL
INC.
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON NOVEMBER 16,
2010
Dear Stockholder:
You are cordially invited to attend the annual meeting of
stockholders of Constar International Inc. to be held on
November 16, 2010, beginning at 8:00 a.m., local time,
at the offices of Dechert LLP, Cira Centre, 2929 Arch Street,
Philadelphia, Pennsylvania. The purposes of the Annual Meeting
are:
1. to elect as members of the Companys Board of
Directors the six nominees named in the Companys proxy
statement and recommended by the Companys Board of
Directors;
2. to ratify the appointment of the independent registered
public accounting firm for the year ending December 31,
2010; and
3. to transact any other business that may properly come
before the meeting.
All holders of record of shares of Constar Common Stock at the
close of business on September 17, 2010 are entitled to
vote at the meeting and any postponements or adjournments of the
meeting.
We appreciate your ongoing interest and participation in our
company. Please take the time to complete, date, sign and
promptly return the enclosed proxy card to ensure that your
shares will be represented at the meeting. You may also attend
the meeting and vote in person.
By Order of the Board of Directors,
David Waksman
Senior Vice President, Human Resources,
General Counsel and Secretary
Philadelphia, Pennsylvania
October 4, 2010
PROXY
STATEMENT
This Proxy Statement and the accompanying proxy card are being
mailed on or about October 4, 2010, to owners of shares of
Constar International Inc. (Constar or the
Company) Common Stock in connection with the
solicitation of proxies by the Companys Board of Directors
for the 2010 Annual Meeting of Stockholders. Our Board of
Directors encourages you to read this document thoroughly and to
take this opportunity to vote on the matters to be decided at
the Annual Meeting.
Important Notice Regarding the Availability of Proxy
Materials for the Stockholder
Meeting to Be Held on November 16, 2010:
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The Proxy Statement and Annual Report to Security Holders are
available at
http://ir.constar.net/annuals.cfm.
Information included on the Companys website, other
than this Proxy Statement, the Proxy Card relating to the Annual
Meeting of Stockholders and the Annual Report to Stockholders,
is not part of the proxy soliciting materials.
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TABLE OF
CONTENTS
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A copy of the Companys Annual Report on
Form 10-K
for the year ended December 31, 2009, including the
financial statements and the financial statement schedules and a
list describing all of the exhibits not contained therein, will
be provided without charge to each person solicited for a proxy
upon the written request of such person directed to David
Waksman, Senior Vice President, Human Resources, General Counsel
and Secretary, at the following address:
Constar International Inc.
One Crown Way
Philadelphia, PA
19154-4599
(215) 552-3700
2
VOTING
PROCEDURES
Your vote is very important. Your shares can
be voted at the Annual Meeting only if you are present or
represented by proxy. Whether or not you plan to attend the
Annual Meeting, you are encouraged to vote by proxy to ensure
that your shares will be represented. You may revoke this proxy
at any time before it is voted by written notice to the
Secretary of the Company, by submission of a proxy bearing a
later date or by casting a ballot at the Annual Meeting.
Properly executed proxies that are received before the Annual
Meetings adjournment will be voted in accordance with the
directions provided. If no directions are given on a properly
executed and delivered proxy, your shares will be voted by one
of the individuals named on your proxy card in accordance with
his judgment.
Who can vote? Stockholders as of the close of business on
September 17, 2010 are entitled to vote. On that day,
1,750,000 shares of our Common Stock were outstanding and
eligible to vote. Each share is entitled to one vote on each
matter presented at the Annual Meeting. A list of stockholders
eligible to vote will be available at the offices of Constar
International Inc., One Crown Way, Philadelphia, Pennsylvania,
beginning November 6, 2010. Stockholders may examine this
list during normal business hours for any purpose relating to
the Annual Meeting.
What shares are included in the proxy card? The proxy
card represents all the shares of Common Stock registered to you
in a particular account. You may receive more than one proxy
card if you hold shares which are either registered differently
or in more than one account.
How are votes counted? The Annual Meeting will be held if
a quorum, consisting of a majority of the outstanding shares of
Common Stock entitled to vote, is represented in person or by
proxy. Broker non-votes and abstentions will be counted for
purposes of determining whether a quorum has been reached. When
nominees, such as banks and brokers, holding shares on behalf of
beneficial owners do not receive timely voting instructions from
the beneficial owners, the nominees may vote those shares only
on matters deemed routine under the rules that govern voting by
such nominees, such as the ratification of the appointment of
independent registered certified public accountants. On
non-routine matters, such as the election of directors, nominees
cannot vote and there is a so-called broker non-vote
on that matter.
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Directors are elected by a plurality of the votes present or
represented by proxy at the meeting and entitled to vote on the
election of directors. This means that the individuals who
receive the largest number of votes cast, even if less than a
majority, are elected as directors up to the maximum number of
directors to be chosen at the meeting. Because directors are
elected by a plurality of the votes cast, abstentions and broker
non-votes will not affect their election.
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The affirmative vote of a majority of the shares of common stock
present at the meeting, either in person or by proxy, and
entitled to vote is required to ratify the appointment of the
independent registered public accounting firm. Broker non-votes
will have no effect on the outcome of this matter because they
are not counted as shares entitled to vote. Abstentions will
have the same effect as a vote against this matter because they
are counted as shares entitled to vote but are not counted as
affirmative votes.
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Who will count the vote? Our Transfer Agent and
Registrar, American Stock Transfer &
Trust Company, will tally and certify the vote as our
Inspector of Elections.
Who is soliciting this proxy? This solicitation is made
on behalf of us and our Board of Directors. We will pay the cost
of preparing, assembling and mailing the notice of Annual
Meeting, proxy statement and proxy card. Proxies may be
solicited by our directors, officers and regular employees,
without additional compensation, in person or by telephone or
other electronic means. We will reimburse brokerage houses and
other nominees for their expenses in forwarding proxy materials
to beneficial owners of our Common Stock. In addition, we have
retained Mackenzie Partners & Co. to assist us in the
solicitation of proxies for a fee of $4,000 plus certain
expenses.
What if I cant attend the meeting? If you do not
attend the meeting in person you must vote your shares by proxy
if you intend to vote.
3
ELECTION
OF DIRECTORS
ITEM 1
ON PROXY CARD
Our Restated Certificate of Incorporation and our Amended and
Restated Bylaws provide that our business shall be managed by a
Board of Directors, with the number of directors to be from six
to thirteen as provided by the Board of Directors from time to
time. The size of the Board of Directors is currently set at six.
At the Annual Meeting, six directors are to be elected. Director
elections are determined by a plurality of the votes cast at the
Annual Meeting in person or by proxy. Each director elected will
hold office until the next annual meeting of stockholders and
the election of his or her successor.
Each of the nominees is currently a director of the Company.
Each of the nominees has consented to being named as a nominee
for director of the Company and has agreed to serve if elected.
If any nominee becomes unavailable to serve at the time of the
Annual Meeting, the shares represented by proxy may be voted for
any substitute nominee designated by the Board of Directors.
Set forth below is information regarding each nominee, including
their ages, term of service as directors, business experience,
and service on other boards of directors. We have also included
information about each nominees specific experience,
qualifications, attributes or skills that led the board to
conclude that he or she should serve as a director of the
Company, in light of our business and structure. The Board of
Directors recommends a vote FOR each of the listed nominees.
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Principal Occupation During at Least the Past Five Years
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Michael J. Balduino
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Mr. Balduino has served as a director since May 2009. Since
March, 2010 Mr. Balduino has been Executive Vice President of
NorthStar Partners, a business development consulting firm.
Mr. Balduino retired from International Paper Company at
the end of 2009, where he most recently served as Senior Vice
President-Consumer Packaging. Mr. Balduino previously served
with International Paper Company as Senior Vice President for
the consumer products converting businesses and
President-Shorewood Packaging Corp. (an International Paper
subsidiary) from 2004 to 2008; and as Senior Vice
President-Corporate Sales and Marketing from 2000 to 2003. Mr.
Balduino brings a career of extensive packaging experience to
the Board, having previous packaging assignments at Federal
Paperboard Company (1992-1996), James River Corporation
(1981-1991) and American Can Company
(1972-1981).
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Eric A. Balzer
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Mr. Balzer has served as a director since May 2009. Mr. Balzer
has been the Chief Financial Officer of Ramtron International
Corporation since 2004. Prior to that, he was Senior Vice
President, Operations of Advanced Energy Industries from 1990 to
1999. Mr. Balzer is a director of Ramtron International
Corporation and Cap Terra Financial Group. Mr. Balzer serves as
the Chair of our Audit Committee owing to his knowledge of
finance, accounting and auditing procedures gained through his
work experience, including as the Chief Financial Officer of a
publicly-traded company. Mr. Balzer has been designed as an
Audit Committee Financial Expert. Mr. Balzer has significant
experience operating manufacturing facilities and also brings a
knowledge of lean manufacturing techniques that are being
adopted by the Company.
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Principal Occupation During at Least the Past Five Years
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Grant H. Beard
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Mr. Beard has served as President and Chief Executive Officer,
and as a Director, since September 13, 2010. Prior to that Mr.
Beard served as a partner of Anderson Group, a private equity
firm, since February 2009. From January 2001 to January 2009,
Mr. Beard was President, CEO and Director of TriMas Corporation.
Prior to that, he served as President, CEO and Chairman of
Health Media Incorporated. The Board believes Mr. Beards
broad expertise in customer service, operations and finance, as
well as his insights as Chief Executive Officer of the Company,
will be an asset to the Company and the Board.
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Lawrence V. Jackson
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Mr. Jackson has served as a director since May 2009. Mr. Jackson
has been the Chairman of the Board of Directors of Sourcemark
LLC since 2008, the Chief Executive Officer of Sourcemark LLC
from 2007 to May 2010, and a Senior Advisor to New Mountain
Capital since 2008. Mr. Jackson was the President and Chief
Executive Officer, Global Procurement of Wal-Mart Stores, Inc.
from 2006 to 2007, and he was the Executive Vice President and
Chief People Officer of Wal-Mart Stores, Inc. from 2004 to 2006.
Mr. Jackson was the President and Chief Operating Officer of
Dollar General Stores, Inc. from 2003 to 2004, and the Senior
Vice President, Supply Operations of Safeway, Inc. from 1997 to
2003. Prior to that Mr. Jackson enjoyed a 16-year career at
PepsiCo, Inc., beginning as plant manager and ending as Senior
Vice President, Chief Operating Officer, Worldwide Operations of
PepsiCo Food Systems. Mr. Jackson is a director of ProLogis and
Assurant, Inc. Mr. Jackson is an experienced executive of
several notable companies. His history with major retailers and
consumer product companies allows him to offer perspectives on
important customers and markets.
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Ruth J. Mack
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Ms. Mack has served as a director since May 2009, and as
President and Chief Executive Officer from April 2010 until
September 13, 2010. Ms. Mack currently serves as Corporate
Advisor in a transition role. Ms. Mack was President, WinCup
Plastics and Executive Vice President, New WinCup Holdings from
2006 to 2009. From 1999 to 2006, she worked for Alcoa, Inc.,
most recently as Vice President, Alcoa and Group President Alcoa
Packaging & Consumer Products. Prior roles included Vice
President, Reynolds Metals Company and General Manager, Reynolds
Consumer Products and President Alcoa Consumer Products.
Previous to Alcoa, Ms. Mack held a series of general management,
marketing, sales, operations, product development, and supply
chain positions in multinational companies such as General
Mills, PepsiCo, Nestle, Pillsbury and WLR Foods. Ms. Mack brings
to our Board her experience as a senior executive with a variety
of companies spanning packaging, consumer products and food
service industries. These experiences have provided Ms. Mack
with a breadth of knowledge in such areas as strategic
development, marketing and general management.
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Principal Occupation During at Least the Past Five Years
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L. White Matthews, III
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64
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Mr. Matthews has served as a director and chairman of the Board
since May 2009. Mr. Matthews has been retired since September
2001. From July 1999 until September 2001, Mr. Matthews served
as Executive Vice President and Chief Financial Officer of
Ecolab, Inc., as well as a member of its Board of Directors. Mr.
Matthews was retired from May 1998 to July 1999. From February
1977 to May 1998, Mr. Matthews served in various financial
positions with Union Pacific Corporation. From November 1989 to
May 1998 he was Executive Vice President and Chief Financial
Officer of Union Pacific and he was a member of its Board of
Directors from 1994 to 1998. Mr. Matthews is a director of
Imation Corp. and Matrixx Initiatives, Inc. As Chairman of our
Board of Directors and Chairman of our Boards Nominating
and Governance Committee, Mr. Matthews brings his experience
from years of service on the boards of several public and
privately-held companies, as well as his experience as a senior
executive. These experiences have provided him with a depth and
breath of knowledge in dealing with governance, leadership,
strategic, financial and accounting matters.
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CORPORATE
GOVERNANCE
In accordance with the General Corporation Law of the State of
Delaware, our Restated Certificate of Incorporation and our
Amended and Restated Bylaws, our business, property and affairs
are managed under the direction of our Board of Directors.
Meetings of the Board of Directors. A new
Board of Directors was appointed in connection with our
emergence from Chapter 11 in May 2009. This proxy statement
refers to the pre-emergence Board of Directors as the former
Board or a former committee of the Board of Directors, as
applicable. Our former Board of Directors met seven times in
2009. Our new Board of Directors met five times in 2009. Each of
the incumbent directors attended at least 90% of the meetings of
the Board and each of the committees to which the director was
assigned. Each of the former directors attended at least 80% of
the meetings of the Board and each of the committees to which
the director was assigned.
Board Leadership Structure. The Board of
Directors does not have a formal policy on whether the roles of
Chief Executive Officer and Chairman of the Board of Directors
should be separate. However, the Company has historically had
separate individuals serve in those positions. The Board of
Directors has considered its leadership structure and believes
at this time that the Company and its stockholders are best
served by having the positions of Chairman of the Board of
Directors and Chief Executive Officer filled by different
individuals. This allows the Chief Executive Officer to focus on
the Companys
day-to-day
business, while allowing the Chairman to lead the Board of
Directors in its fundamental role of providing advice and
oversight of management. However, the Board of Directors
recognizes that depending on future circumstances, other
leadership models may become more appropriate. Accordingly, in
the future the Board of Directors may reconsider its leadership
structure.
Risk Oversight. The Company faces a number of
risks, including credit risk, liquidity risk, reputational risk
and risk from adverse fluctuations in interest rates. Management
is responsible for the
day-to-day
management of risks faced by the Company, while the Board of
Directors, as a whole and through its committees, has
responsibility for the oversight of risk management. In its risk
oversight role, the Board of Directors seeks to ensure that the
risk management processes designed and implemented by management
are adequate. The Board of Directors periodically consults with
management regarding the Companys risks. While the Board
of Directors is ultimately responsible for risk oversight, the
Companys Audit and Finance Committee assists the Board of
Directors in overseeing risk management in the areas of
financial reporting, internal controls and compliance with legal
and regulatory requirements.
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Committees of the Board of Directors. The
Board of Directors has established three standing committees.
Audit and Finance Committee maintains the
sole responsibility to appoint, determine funding for, and
oversee the independence and performance of our independent
auditors and has the authority to engage independent counsel and
other advisors to assist in such responsibility. In addition,
the Audit and Finance Committee assists the Board of Directors
in its general oversight of the Companys accounting and
financial reporting processes, audits of the financial
statements, internal control and audit functions, SEC reporting,
Sarbanes Oxley compliance, compliance with legal and regulatory
requirements and ethical standards adopted by the Company, and
issuances of securities and other financial matters. The former
members of this Committee were Frank J. Mechura, John P. Neafsey
and Angus F. Smith, and they met seven times in 2009. The
current members of the Audit and Finance Committee are
Messrs. Balzer, Jackson, and Matthews, each of whom is
independent under Nasdaq listing standards and
applicable SEC regulations. Mr. Balzer chairs the current
Committee, which met six times in 2009. The Board of Directors
has determined that Mr. Balzer is an audit committee
financial expert as defined by regulations promulgated
under the Securities Act of 1933.
Compensation and Benefits Committee oversees
the administration of the Companys compensation and
benefits plans, in particular all compensation for the Chief
Executive Officer, the executives that report to the Chief
Executive Officer and any other employee that the Compensation
and Benefits Committee deems appropriate; all compensation for
directors; all equity programs; any major compensation and
benefit implementation/redesign for the wider employee base; and
the annual performance review of the Chief Executive Officer.
The Compensation and Benefits Committee also oversees our equity
compensation and certain other benefit plans. The Compensation
and Benefits Committee considers the recommendations of the
Chief Executive Officer in setting the compensation of other
executive officers.
The Compensation and Benefits Committee works with independent
compensation consultants that are engaged directly by the
Compensation and Benefits Committee. Towers Watson is currently
engaged as the Compensation and Benefits Committees
independent compensation consultant. Towers Watson is not
engaged to perform any specific assignment, but rather to
provide general advice from time to time as requested by the
Compensation and Benefits Committee. Recent representative
assignments have involved executive and director compensation.
The former members of this Committee were Michael D. McDaniel,
Frank L. Mechura and A. Alexander Taylor, and they met five
times in 2009. The current members of the Compensation and
Benefits Committee are Messrs. Balduino, Balzer and
Jackson, each of whom is independent under Nasdaq
listing standards and applicable SEC regulations.
Mr. Jackson chairs the current Committee, which met seven
times in 2009.
Nominating and Corporate Governance Committee
develops and oversees corporate governance guidelines; and
identifies, reviews, evaluates and recommends potential
candidates to serve as directors of the Company. The Nominating
and Corporate Governance Committee will consider director
nominees recommended by stockholders who timely submit such
recommendations as outlined under Submission of Director
Nominations below. The former members of this Committee
were James A. Lewis, Michael D. McDaniel, and John P. Neafsey,
and they did not meet in 2009. The current members of the
Nominating and Corporate Governance Committee are
Messrs. Balduino, Balzer and Matthews, each of whom is
independent under Nasdaq listing standards and
applicable SEC regulations. Mr. Matthews chairs the current
Committee, which met twice in 2009.
Committee Charters. Each of our standing
Committees has a written charter delineating its
responsibilities. Each Committees charter is available on
the Investor Relations Corporate
Governance section of our web site at
www.constar.net.
7
Contacting our Directors. You may contact our
Board of Directors and any of our individual directors by
writing to them care of the Secretary, Constar International
Inc., One Crown Way, Philadelphia, Pennsylvania
19154-4599.
The Secretary will forward the communication to the Board of
Directors or the applicable director(s). In addition, it is the
Companys policy that any allegation of accounting or
financial impropriety must be brought to the attention of the
Audit and Finance Committee immediately.
Attendance at the Annual Meeting. We strongly
encourage each of our directors to attend our annual meeting of
stockholders. Each of the incumbent directors who was in office
at the time of the Companys last annual meeting of
stockholders attended such meeting.
Submission of Director Nominations. The
Nominating and Corporate Governance Committee will consider
stockholders suggestions for nominees for election to our
Board of Directors in 2011. Any such suggestion must be made in
writing, must include biographical data, a description of such
nominees qualifications and the other information required
by the Companys Amended and Restated Bylaws, and must be
accompanied by the written consent of such nominee to serve as
director if elected. Any such suggestion for nominees must be
mailed to the Nominating and Corporate Governance Committee,
c/o The
Secretary, Constar International Inc., One Crown Way,
Philadelphia, Pennsylvania
19154-4599.
For such suggested nominee to be eligible for election as a
director at the 2011 Annual Meeting of Stockholders in
compliance with the Companys Amended and Restated Bylaws,
the suggestion must be received at the above address no earlier
than 120 days, and no later than 90 days, prior to the
first anniversary of the 2010 Annual Meeting; provided, however,
that in the event that the date of the annual meeting is
advanced by more than 20 days, or delayed by more than
60 days, from the first anniversary of the preceding
years meeting, the notice must be received not earlier
than the 120th day prior to such meeting nor later than the
later of (A) the 90th day prior to such annual meeting
or (B) the tenth day following the day on which notice of
the date of such annual meeting was mailed or public disclosure
of the date of such annual meeting was made, whichever first
occurs. The 2011 Annual Meeting of Stockholders is currently
scheduled to be held on May 26, 2011. Accordingly, notice
must be received not earlier than January 26, 2011 and not
later than February 25, 2011.
Nominees for election to the Board of Directors should at a
minimum satisfy the following criteria:
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Possess the integrity and judgment essential to effective
decision making.
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Have the ability and willingness to commit necessary time and
energy to prepare for, attend and participate in meetings of the
Board and one or more of its standing committees and not have
other directorships, trusteeships or outside involvements that
would materially interfere with responsibilities as a director
of Constar.
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Have the willingness and availability to serve for a meaningful
period of time.
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Have the willingness and ability to represent the interests of
all stockholders of the Company rather than any special interest
or constituency while keeping in perspective the interests of
the Companys employees, customers, local communities and
the public in general.
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Have background and experience that complement or supplement the
background and experience of other Board members.
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Be free from interests that are or would present the appearance
of being adverse to, or in conflict with, the interests of the
Company.
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Have a proven record of competence and accomplishment through
demonstrated leadership in business, education, government
service or finance, including director, chief executive or
senior management experience; academic experience; manufacturing
experience; financial and accounting experience; or other
relevant experiences that will provide the Board with
perspectives that will enhance Board effectiveness, including
perspectives that may result from diversity in ethnicity, race,
gender, national origin or nationality.
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8
As noted above, the Nominating and Corporate Governance
Committee desires to maintain the Board of Directors
diversity through the consideration of factors such as
ethnicity, race, gender, national origin, nationality,
education, skills and relevant professional and industry
experience. The Nominating and Corporate Governance Committee
believes this diversity benefits the Board of Directors by
allowing it to draw on a wide variety of backgrounds and
experiences among its members. The Nominating and Corporate
Governance Committee does not intend to nominate
representational directors, but instead considers each
candidates credentials in the context of these standards
and the characteristics of the Board of Directors in its
entirety.
These criteria have been established as criteria that any
director nominee, whether suggested by a stockholder or
otherwise, should satisfy. A nominee for election to the Board
of Directors that is suggested by a stockholder will be
evaluated by the Nominating and Corporate Governance Committee
in the same manner that any other nominee for election to the
Board (other than directors standing for re-election) is
evaluated. The evaluation process will include a comprehensive
background and reference check, a series of personal interviews
by, at a minimum, the Chairman of the Board and the Chairman of
the Nominating and Corporate Governance Committee, and a
thorough review by the full committee of the nominees
qualifications and other relevant characteristics, taking into
consideration the criteria set forth above. Finally, if the
committee determines that a candidate should be nominated for
election to the Board of Directors, the committee will present
its findings and recommendation to the full Board of Directors
for approval.
Corporate Governance Practices. We regularly
monitor developments in the area of corporate governance and
review our processes and procedures in light of such
developments. In those efforts, we review any new federal laws
affecting corporate governance, rules adopted by the SEC and
Nasdaq, and best practices. We have implemented corporate
governance practices that we believe are in the best interest of
our company and our stockholders.
Codes of Conduct. We have adopted Corporate
Governance Guidelines for our company. These guidelines address
such matters as director qualifications, directors access
to management and advisors, conflicts of interest and
performance evaluations. We have also adopted a Code of Ethics.
Our Corporate Governance Guidelines and Code of Ethics are
available on the Investor Relations Corporate
Governance section of our web site at
www.constar.net.
Disclosure Committee. We have established a
Disclosure Committee, comprised of senior executives who are
actively involved in the disclosure process, to specify,
coordinate and oversee the review procedures that we use to
prepare our periodic SEC reports.
Ethics Hotline. We have established a
confidential hotline by which employees can communicate concerns
regarding unethical or illegal conduct at our company. The Audit
Committee has established procedures to receive, retain and
address these concerns.
Insider Trading. In addition to the insider
trading prohibitions of our Code of Ethics, we maintain an
additional insider trading policy that applies to our directors,
executive officers and certain other personnel. Our insider
trading policy prohibits these individuals from trading in our
securities at certain times when we would normally expect the
Company to have material non-public information regarding its
quarterly and annual earnings results. In addition, these
individuals are prohibited from trading without obtaining the
prior approval of a compliance officer.
Executive Sessions of the Independent
Directors. Our independent directors meet
regularly in executive session without members of management.
Resignation upon Change in Employment
Circumstances. It is our policy that a director
offer to resign upon a change in his or her employment
circumstances. The Board of Directors has the discretion whether
or not to accept any such resignation.
Director Independence. The Board of Directors
has considered transactions and relationships between each
director, on one hand, and the Company or its affiliates, on the
other. The purpose of this review was to determine whether any
such transactions or relationships were inconsistent with a
determination that the
9
director is independent under Nasdaq listing standards and
applicable SEC regulations. As a result of this review, the
Board determined that Messrs. Balduino, Balzer, Jackson and
Matthews are independent. In addition, the Board of Directors
had determined that Mr. Jason Pratt, who served as a
director from May 29, 2009 to November 4, 2009, was
independent. Mr. Beard and Ms. Mack are not
independent because of their employment by the Company.
Mr. Hoffman was not independent during his tenure as a
director because he was an employee of the Company. The former
Board of Directors had determined that its following members
were independent under Nasdaq listing standards and applicable
SEC regulations: James A. Lewis, A. Alexander Taylor, John P.
Neafsey, Angus F. Smith, Michael A. McDaniel and Frank J.
Mechura.
Stock Ownership Guidelines. The Companys
stock ownership guidelines for directors call for each director
to hold stock with a value equal to three times the annual
retainer paid to such director for his or her Board (but not
Board committee) service. Upon our emergence from
Chapter 11, none of our directors held any equity interests
in Constar. The Board of Directors has adopted a four-year
period for directors to accumulate equity towards the stock
ownership guidelines. There are no stock ownership guidelines
currently in effect for management.
APPOINTMENT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit and Finance Committee has appointed
PricewaterhouseCoopers LLP as the independent registered public
accounting firm to audit and report upon the Companys
financial statements for 2010.
One or more representatives of PricewaterhouseCoopers LLP are
expected to be at the Annual Meeting. They will have an
opportunity to make a statement and will be available to respond
to appropriate questions.
Audit Fees. The aggregate fees billed for
professional services rendered by PricewaterhouseCoopers LLP for
the year ended December 31, 2009 for the audit of our
financial statements and internal controls for the year ended
December 31, 2009 (including the delivery of reports
required by Section 404 of the Sarbanes-Oxley Act) and the
review of our quarterly financial statements filed on
Form 10-Q
in 2009 were $1,616,000. The aggregate fees billed for
professional services rendered by PricewaterhouseCoopers LLP for
the year ended December 31, 2008 for the audit of our
financial statements and internal controls for the year ended
December 31, 2008 (including the delivery of reports
required by Section 404 of the Sarbanes-Oxley Act) and the
review of our quarterly financial statements filed on
Form 10-Q
in 2008 were approximately $1,540,000.
Audit-Related Fees. In 2009,
PricewaterhouseCoopers LLP billed the Company $12,000 for
services rendered in connection with an SEC comment letter. In
2008, PricewaterhouseCoopers LLP billed the Company $9,000 for
services rendered in connection with their retention in
accordance with the applicable requirements of the Bankruptcy
Code, and $18,000 for services rendered in connection with an
SEC comment letter.
Tax Fees. For 2009 and 2008, the respective
aggregate fees billed for tax services rendered by
PricewaterhouseCoopers LLP were approximately $261,000 (of which
approximately $245,000 were tax-related reorganization fees and
the balance of which primarily related to the preparation of tax
returns for the Companys operations in the United Kingdom
and Holland) and $10,000 (primarily related to the preparation
of tax returns for the Companys operations in the United
Kingdom and Holland.)
All Other Fees. There were no fees billed by
PricewaterhouseCoopers LLP for the year ended December 31,
2009 for any services other than as described above, other than
subscription fees for an accounting and tax research program in
the amount of $3,000. There were no fees billed by
PricewaterhouseCoopers LLP for the year ended December 31,
2008 for any services other than as described above, other than
subscription fees for an accounting and tax research program in
the amount of $3,000.
All the services as described above were approved by our Audit
and Finance Committee. In accordance with the charter of our
Audit and Finance Committee, all auditing services and, except
as provided in the following sentence, all non-audit services to
be provided by any independent registered public accounting firm
of the Company shall be pre-approved by the Audit and Finance
Committee; in addition, the Audit and Finance Committee may
delegate such pre-approval duty to one or more designated
members of the Audit and
10
Finance Committee who are also independent directors of the
Board of Directors; provided, that any decisions of any
member of the Audit and Finance Committee to whom such duty has
been delegated shall also be presented to the full Audit and
Finance Committee at its next scheduled meeting. The
pre-approval requirement described in the preceding sentence
shall not apply to non-audit services for the Company if
(a) the aggregate amount of all such non-audit services
provided to the Company constitutes not more than five percent
of the total amount of revenues paid by the Company to its
independent registered public accounting firm during the fiscal
year in which the non-audit services are provided; (b) such
services were not recognized by the Company at the time of the
engagement to be non-audit services; and (c) such services
are promptly brought to the attention of the Audit and Finance
Committee and approved, prior to the completion of the audit, by
the Audit and Finance Committee or by one or more members of the
Audit and Finance Committee who are also independent directors
of the Board of Directors to whom authority to grant
pre-approvals has been delegated by the Audit and Finance
Committee. The Audit and Finance Committee will review and
consider all PricewaterhouseCoopers LLP professional services
when assessing auditor independence.
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
ITEM 2
ON PROXY CARD
The Audit and Finance Committee has appointed
PricewaterhouseCoopers LLP as the independent registered public
accounting firm to audit and report upon the Companys
financial statements for 2010.
Although the submission to stockholders of the appointment of
PricewaterhouseCoopers LLP is not required by law or the
Companys Amended and Restated Bylaws, the Audit and
Finance Committee believes it is appropriate to submit this
matter to stockholders to allow a forum for stockholders to
express their views with regard to the Audit and Finance
Committees selection. In the event stockholders do not
ratify the appointment, the Audit and Finance Committee may
reconsider the appointment of PricewaterhouseCoopers LLP.
The Board of Directors recommends a vote FOR the
ratification of the appointment of PricewaterhouseCoopers
LLP.
AUDIT AND
FINANCE COMMITTEE
REPORT OF
THE AUDIT AND FINANCE COMMITTEE
OF THE BOARD OF DIRECTORS
The Audit and Finance Committee appoints the independent
registered public accounting firm to be retained to audit the
Companys financial statements, and once retained, the
independent registered public accounting firm reports directly
to the Audit and Finance Committee. The Audit and Finance
Committee consults with and reviews recommendations made by the
independent registered public accounting firm with respect to
financial statements, financial records and internal controls of
the Company and makes recommendations to the Board of Directors
as it deems appropriate from time to time. The Audit and Finance
Committee is responsible for approving both audit and non-audit
services to be provided by the independent registered public
accounting firm. The Board of Directors has adopted a written
charter setting forth the functions of the Audit and Finance
Committee.
The Audit and Finance Committee assists the Board of Directors
in monitoring the integrity of the Companys financial
statements. Management is responsible for the Companys
financial reporting process, including the Companys system
of internal controls, and the preparation of consolidated
financial statements in accordance with accounting principles
generally accepted in the United States of America. The
Companys independent registered public accounting firm is
responsible for auditing those financial statements and
expressing an opinion on the conformity of those financial
statements with accounting principles generally accepted in the
United States of America. The Audit and Finance Committees
responsibility includes monitoring and reviewing these
processes. It is not the Audit and Finance Committees duty
or responsibility to conduct auditing or accounting reviews.
11
The Audit and Finance Committee met with management to consider
the adequacy of the Companys internal controls, and
discussed these matters and the overall scope and plans for the
audit of the Company with the Companys independent
registered public accounting firm, PricewaterhouseCoopers LLP.
The Audit and Finance Committee also discussed with senior
management and PricewaterhouseCoopers LLP the Companys
disclosure controls and procedures and the certifications by the
Companys Chief Executive Officer and Chief Financial
Officer, which are required by the Securities and Exchange
Commission under the Sarbanes-Oxley Act of 2002 for certain of
the Companys filings with the Securities and Exchange
Commission.
The Audit and Finance Committee reviewed and discussed the
audited financial statements for 2009 with management, including
a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant
judgments and the clarity of disclosures in the financial
statements.
The Audit and Finance Committee met with the independent
registered public accounting firm, with and without management
present, to discuss the results of their examination,
significant matters regarding the Companys internal
controls over financial reporting, and the overall quality of
the Companys financial reporting. In addition, the Audit
and Finance Committee reviewed with the independent registered
public accounting firm their judgments as to the quality, not
just the acceptability, of the Companys accounting
principles. The Audit and Finance Committee discussed with the
Companys independent registered public accounting firm the
matters required by professional standards.
The Audit and Finance Committee received the written disclosures
and the letter from the Companys independent registered
public accounting firm required by Independence Standards Board
Standard No. 1. In addition, the Audit and Finance
Committee discussed with the independent registered public
accounting firm the issue of auditor independence, including the
compatibility of non-audit services with the auditors
independence.
In reliance on the reviews and discussions referred to above,
the Audit and Finance Committee recommended that the audited
financial statements be included in the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2009 for filing with the
SEC.
The Audit and Finance Committee appointed PricewaterhouseCoopers
LLP as the independent registered public accounting firm to
audit and report upon the Companys financial statements
for 2010. In this connection, the Audit and Finance Committee
considered whether PricewaterhouseCoopers LLPs provision
of services other than audit services are compatible with
maintaining its independence.
RESPECTFULLY SUBMITTED BY:
Eric A. Balzer, Audit and Finance Committee Chairperson
Lawrence V. Jackson
L. White Matthews III
12
SUBMISSION
OF STOCKHOLDER PROPOSALS
AND DIRECTOR NOMINATIONS
The Securities and Exchange Commissions rules and our
Amended and Restated Bylaws set forth standards as to what
stockholder proposals are required to be included in a proxy
statement. Any proposal of a stockholder intended to be included
in our proxy statement and form of proxy card for the 2011
Annual Meeting of Stockholders must comply with the proxy
submission rules of the Securities and Exchange Commission
(SEC). Pursuant to
Rule 14a-8
of the SECs rules, because the 2011 Annual Meeting of
Stockholders is currently scheduled to be held more than
30 days prior to the anniversary of the 2010 Annual Meeting
of Stockholders, any such stockholder proposal must be received
by our Secretary at the address listed below within a reasonable
time before the Company begins to print and send its proxy
materials.
In addition, our Amended and Restated Bylaws require that we be
given advance notice of stockholder proposals containing
nominations for election to the Board of Directors or other
matters which stockholders wish to present for action at an
annual meeting. These requirements are separate from, and in
addition to, the requirements discussed above to have the
stockholder proposal included in our proxy statement and form of
proxy/voting instruction card pursuant to the SECs rules.
Our Amended and Restated Bylaws separately require that any
stockholder proposal, including a proposal nominating one or
more persons for election as directors, be received in writing
by our Secretary at the address listed below not less than
90 days, nor more than 120 days, prior to the first
anniversary of the preceding years annual meeting;
provided, however, that in the event that the date of the annual
meeting is advanced by more the 20 days, or delayed by more
than 60 days, from the first anniversary of the preceding
years meeting, the notice must be received not earlier
than the 120th day prior to such meeting nor later than the
later of (A) the 90th day prior to such annual meeting
or (B) the tenth day following the day on which notice of
the date of such annual meeting was mailed or public disclosure
of the date of such annual meeting was made, whichever first
occurs. The 2011 Annual Meeting of Stockholders is currently
scheduled to be held on May 26, 2011. Accordingly, notice
must be received not earlier than January 26, 2011 and not
later than February 25, 2011.
Stockholders must send such proposals to The Secretary, Constar
International Inc., One Crown Way, Philadelphia, Pennsylvania
19154-4599.
13
EXECUTIVE
OFFICERS OF THE REGISTRANT
Our executive officers, their ages and their positions are as
follows:
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Title
|
|
Grant H. Beard(1)
|
|
|
49
|
|
|
President, Chief Executive Officer and Director
|
J. Mark Borseth(2)
|
|
|
52
|
|
|
Executive Vice President and Chief Financial Officer
|
James C.T. Bolton(3)
|
|
|
55
|
|
|
Senior Vice President, Administration and Strategic Planning
|
Jerry A. Hatfield(4)
|
|
|
52
|
|
|
Senior Vice President, Operations
|
David Schroeder(5)
|
|
|
41
|
|
|
Senior Vice President, Sales and Marketing
|
David J. Waksman(6)
|
|
|
43
|
|
|
Senior Vice President, Human Resources, General Counsel and
Secretary
|
Christopher P. Phelan(7)
|
|
|
42
|
|
|
Vice President and General Manager, European Operations
|
Scott D. Stanton(8)
|
|
|
42
|
|
|
Vice President, Corporate Controller and Chief Accounting
Officer
|
|
|
|
(1) |
|
Grant H. Beard. Mr. Beard has served as
our President and Chief Executive Officer, and as a Director,
since September 2010. Mr. Beard served as a partner of
Anderson Group, a private equity firm, since February 2009. From
January 2001 to January 2009, Mr. Beard was President, CEO
and Director of TriMas Corporation. Prior to that, he served as
President, CEO and Chairman of Health Media Incorporated. |
|
(2) |
|
J. Mark Borseth. Mr. Borseth was
appointed as our Executive Vice President and Chief Financial
Officer in September 2009. Mr. Borseth was the Senior Vice
President, Chief Financial Officer of Eclipse Aviation, an
aircraft manufacturer, from May 2007 through August 2009.
Eclipse Aviation filed for bankruptcy in November 2008. Prior to
that, from 1984 to April 2007, Mr. Borseth held a series of
financial and general management positions with 3M, including
Vice President, Global Business Process from 2004 to 2007, and
Corporate Treasurer in 2003. |
|
(3) |
|
James C.T. Bolton. Mr. Bolton has been
Senior Vice President, Administration and Strategic Planning of
our Company since May 2002. Previously, Mr. Bolton had been
Senior Vice President, Strategic Planning and Information
Systems for the Americas Division of Crown Cork & Seal
Company, Inc. since 2001. Prior to that, Mr. Bolton was
Vice President, Finance of Constar, Inc. from 1996 to 2001.
Mr. Bolton was Vice President, Finance and Planning for the
International Division of Crown Cork & Seal Company,
Inc. from 1992 to 1996. Prior to that, Mr. Bolton was
Director of Insurance for Crown Cork & Seal Company,
Inc. and was responsible for all benefits and property/casualty
coverage in the U.S. from 1984 to 1992. Mr. Bolton also
worked in the Treasury and Audit departments of Crown
Cork & Seal Company, Inc. from 1978 to 1984. |
|
(4) |
|
Jerry A. Hatfield. Mr. Hatfield has been
Senior Vice President, Operations of our Company since September
2007. Mr. Hatfield was previously our Vice President,
Operations from March 2003 to September 2007 and our Western
Regional Manager from 2001 to 2003. |
|
(5) |
|
David Schroeder. Mr. Schroeder has served
as Senior Vice President of Sales and Marketing since March
2010. In 2009 Mr. Schroeder was the Chief Operating Officer
of Medical Instill Technologies, a provider of packaging and
dispensing solutions for aseptic, non-preserved products. From
1995 to 2008, Mr. Schroeder held a variety of sales,
business development and management positions with the Tetra
Laval Group. Most recently, from 2005 to 2008 Mr. Schroeder
was Managing Director, Zone Vice President North America for
Tetra Lavals Sidel business, a manufacturer of packaging
equipment. |
|
(6) |
|
David J. Waksman. Mr. Waksman has been
Senior Vice President, Human Resources, General Counsel and
Secretary of our Company since April 2008. Prior to that he, was
Vice President, General Counsel and Secretary of our Company
since July 2003. Previously, Mr. Waksman was a partner at
the law firm of Dechert LLP. |
14
|
|
|
(7) |
|
Christopher P. Phelan. Mr. Phelan has
been Vice President and General Manager, European Operations of
our Company since July 2007. Since January 2004, Mr. Phelan
had been Technical Director of our European operations. Prior to
that, Mr. Phelan was employed by Rexam as
Technical/Operations Director. |
|
(8) |
|
Scott D. Stanton. Mr. Stanton has been
Vice President, Corporate Controller and Chief Accounting
Officer of our Company since April 2010. From May 2009 to
November 2010, Mr. Stanton was Executive Vice President,
Finance and Chief Accounting Officer of Flotek Industries, Inc.
Prior to that, from September 2006 to December 2008
Mr. Stanton was Vice President, Finance and Assistant
Controller of Office Depot Inc. From April 2005 to September
2006, Mr. Stanton was Assistant Controller, Director Expert
Services at Novelis, Inc. |
EXECUTIVE
COMPENSATION
The following table provides certain summary information
concerning the compensation earned by our principal executive
officer and our two most highly paid executive officers (other
than our principal executive officer) employed by us or our
subsidiaries during the years ended December 31, 2009 and
2008. The following table also provides certain summary
information regarding one of our former executive officers.
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Incentive Plan
|
|
|
All other
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)
|
|
|
($)
|
|
|
Michael J. Hoffman(3)
|
|
|
2009
|
|
|
|
497,950
|
|
|
|
0
|
|
|
|
161,336
|
|
|
|
309,571
|
(4)
|
|
|
968,857
|
|
President and Chief Executive Officer
|
|
|
2008
|
|
|
|
474,238
|
|
|
|
229,500
|
|
|
|
2,915
|
|
|
|
43,512
|
(5)
|
|
|
750,165
|
|
James C.T. Bolton
|
|
|
2009
|
|
|
|
259,995
|
|
|
|
0
|
|
|
|
56,354
|
|
|
|
58,330
|
(6)
|
|
|
374,679
|
|
Senior Vice President, Administration and Strategic Planning
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher P. Phelan(7)
|
|
|
2009
|
|
|
|
230,190
|
|
|
|
0
|
|
|
|
124,303
|
|
|
|
34,020
|
(8)
|
|
|
388,513
|
|
Vice President and General Manager,
|
|
|
2008
|
|
|
|
259,270
|
|
|
|
0
|
|
|
|
0
|
|
|
|
36,907
|
(9)
|
|
|
296,177
|
|
European Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Walter S. Sobon(10)
|
|
|
2009
|
|
|
|
280,025
|
|
|
|
0
|
|
|
|
0
|
|
|
|
412,618
|
(11)
|
|
|
692,643
|
|
Executive Vice President and
|
|
|
2008
|
|
|
|
324,450
|
|
|
|
94,500
|
|
|
|
997
|
|
|
|
22,591
|
(12)
|
|
|
442,538
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The dollar amounts reported in this column represent the grant
date fair value calculated according to ASC 718 of
restricted stock awards granted in fiscal year 2008 pursuant to
the 2007 Stock-Based Incentive Compensation Plan. The fair value
of restricted stock awards is equal to the quoted market price
of the Companys common stock at the date of grant.
Restricted stock units (RSUs) are classified as
liabilities in the accompanying consolidated financial
statements. The fair value of the liabilities related to the
RSUs is remeasured at each balance sheet date. Adjustments to
the fair value of the RSU liabilities are recorded as
compensation expense. |
|
(2) |
|
Non-equity incentive plan compensation for 2009 represents
amounts earned under the 2009 Annual Incentive Plan. Non-equity
incentive plan compensation for 2008 represents interest earned
on deferred non-equity incentive plan compensation. See
Narrative Disclosure to Summary Compensation Table
for an explanation of the timing of payment of such amounts. |
|
(3) |
|
Mr. Hoffman resigned as an executive officer of the Company
on April 28, 2010. |
|
(4) |
|
Includes $265,658 paid in connection with termination of the
Companys Supplemental Executive Retirement Plan; a $12,000
car benefit; $9,987 country club expense reimbursement and
$5,779 gross up for such reimbursement; and $15,299 in
401(k) matching funds. |
|
(5) |
|
Includes a $12,000 car benefit, $9,623 country club expense
reimbursement and $5,587 tax
gross-up for
such reimbursement, and $15,500 in 401(k) matching funds. The
Company determined that excess matching funds in the amounts of
$5,150 and $4,274 were contributed to Mr. Hoffmans
401(k) account in |
15
|
|
|
|
|
2008 and 2009, respectively. These amounts were forfeited to the
Company in 2009 and 2010, respectively. |
|
(6) |
|
Includes $36,296 paid in connection with termination of the
Companys Supplemental Executive Retirement Plan; a $9,000
car benefit; and $12,105 in 401(k) matching funds. The Company
determined that excess matching funds of $1,080 were contributed
to Mr. Boltons 401(k) account in 2009. These amounts
were forfeited to the Company in 2010. |
|
(7) |
|
Payments to Mr. Phelan were made in British pounds.
Compensation data for 2009 has been converted to U.S. dollars
using the 2009 daily average exchange rate of 1.57 dollars per
pound. Compensation data for 2008 has been converted to U.S.
dollars using the 2008 daily average exchange rate of 1.85
dollars per pound. |
|
(8) |
|
Includes a $33,523 car benefit. |
|
(9) |
|
Includes a $36,289 car benefit. |
|
(10) |
|
Mr. Sobon resigned as an executive officer of the Company
on September 23, 2009. |
|
(11) |
|
Includes $360,000 paid in connection with the rejection of
Mr. Sobons employment agreement with the Company;
accrued but untaken vacation pay of $22,911; $12,369 paid in
connection with termination of the Supplemental Executive
Retirement Plan; $9,348 in 401(k) matching funds; and a $6,975
car benefit. |
|
(12) |
|
Includes a $9,000 car benefit and $12,415 in 401(k) matching
funds. The Company has determined that excess matching funds in
the amount of $2,065 were contributed to Mr. Sobons
401(k) account. This amount was forfeited to the Company in 2009. |
Narrative
Disclosure to Summary Compensation Table
The Annual Incentive Plan. One of the
Companys main vehicles of incentive compensation is the
Annual Incentive Plan (the AIP). Adopted in 2009,
the AIP replaced the Annual Incentive and Management Stock
Purchase Plan (the MSPP). In order to understand how
AIP awards are reported in the Summary Compensation Table, it is
important to understand how this plan works.
Target Awards. Under the AIP, each executive
officer has a target bonus amount expressed as a percentage of
the executive officers base salary. A portion of the
target bonus is tied to individual performance criteria for each
executive officer, and the remaining portion is generally tied
to financial performance criteria for the Company. Executives
with responsibilities over business units with distinct
financial goals may be assigned a third weighting based on unit
performance. Bonus award determinations are typically made
during the first quarter of each year, after audited financial
results for the previous year are available.
Under the 2009 AIP, the financial performance criteria included
EBITDA (as defined in the Companys then-current credit
facility) targets ranging from $45 million to
$56 million, the attainment of which would have resulted in
awards ranging from 20% to 100% of the portion of the target
bonus attributable to financial performance. If the Company was
not free cash flow positive in 2009, then the payout percentage
would have been reduced by 10 percentage points (for
example, a 30% payout would have been reduced to a 20% payout).
Based on the Companys results in 2009, executive officers
were awarded bonuses per the AIP.
Company financial performance made up 85%, 70%, and 40% of
Mr. Hoffmans, Mr. Boltons and
Mr. Phelans respective target bonuses. Based on 2009
EBITDA results, the named executives earned 30% of this portion
of their respective bonuses, and the cash flow deduction did not
apply. Personal goals made up 15% and 30% of
Mr. Hoffmans and Mr. Boltons respective
target bonuses. Both executives were awarded 100% of their
target bonuses attributable to personal performance.
Mr. Hoffmans personal goals were to complete the
Companys Chapter 11 while improving Company financial
performance. Mr. Boltons personal goals included the
preparation of information technology upgrades; promoting
business process changes to support certain internal reports;
and supporting the information and analysis initiatives of
certain Company departments. Mr. Phelans unit and
personal goals made up 50%
16
and 10%, respectively, of his target bonus. He was awarded 100%
of his target bonus attributable to these two measures.
Mr. Phelans unit goal was to achieve
$4.0 million of EBITDA from the Companys European
business. Mr. Phelans personal goals included such
matters as achieving operating income targets for the U.K. and
Holland plants, delivering increased business volume for the
Holland plant, introducing certain improvements to the
Companys inspection systems, achieving energy savings and
making certain changes to the European workforce.
Finally, during 2009 the Company imposed mandatory reductions to
AIP bonuses for all United States personnel under which
Mr. Hoffmans bonus was reduced by 20% and
Mr. Boltons bonus was reduced by 15%. The foregoing
components of the 2009 awards are summarized in the table below.
The table below does not include the matching feature described
under How awards are Paid.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Hoffman
|
|
Christopher Phelan
|
|
James Bolton
|
|
Maximum corporate portion of award
|
|
$
|
423,257
|
|
|
$
|
69,057
|
|
|
$
|
90,998
|
|
Actual corporate portion of award
|
|
$
|
126,977
|
|
|
$
|
20,717
|
|
|
$
|
27,300
|
|
Maximum unit portion of award
|
|
|
N/A
|
|
|
$
|
86,321
|
|
|
|
N/A
|
|
Actual unit portion of award
|
|
|
N/A
|
|
|
$
|
86,321
|
|
|
|
N/A
|
|
Maximum personal portion of award
|
|
$
|
74,693
|
|
|
$
|
17,264
|
|
|
$
|
38,999
|
|
Actual personal portion of award
|
|
$
|
74,693
|
|
|
$
|
17,264
|
|
|
$
|
38,999
|
|
Mandatory reduction
|
|
$
|
(40,334
|
)
|
|
|
N/A
|
|
|
$
|
(9,945
|
)
|
Maximum total award
|
|
$
|
497,950
|
|
|
$
|
172,642
|
|
|
$
|
129,997
|
|
Actual award
|
|
$
|
161,336
|
|
|
$
|
124,303
|
|
|
$
|
56,354
|
|
How Awards are Paid. Under the AIP, an award
is paid 50% in cash as soon as practicable, and the remaining
50% is deferred for one year at a 5% interest rate, compounded
on a daily basis. Plan participants are fully vested in the
deferred bonus and any interest credited to the deferred bonus.
Additionally, the deferred portion of the bonus is matched with
an equal amount of cash that is payable three years from the
award date plus 5% interest, compounded on a daily basis. The
match is not vested upon award. If a participant terminates
employment (i) due to death or disability, then the match
will fully vest; (ii) due to retirement or involuntary
termination, then the match vests on a pro-rata basis;
(iii) due to voluntary termination or an involuntary
termination for cause, then the match is forfeited.
What is Non-Equity Incentive Plan
Compensation? Payments under the AIP and MSPP are
categorized as Non-Equity Incentive Plan
Compensation in the Summary Compensation Table. The total
amount of the award is reported as compensation for the year in
which the award was earned, even though payment of 50% of the
awards is deferred for one year.
What is included in 2009 and 2008 Non-Equity Incentive Plan
Compensation? The amounts reported for 2009 represent the
amount awarded under the plan, excluding the match described
above because the match vests over time and was not earned in
2009. The amounts reported for 2008 represent interest earned on
deferred MSPP payments.
Stock Awards. No stock was granted to any of
the named executive officers in 2009. The 2008 stock awards
shown in the Summary Compensation Table were cancelled in
connection with the Companys bankruptcy. There were no
outstanding equity awards to any of the named executive officers
at fiscal year-end 2009.
17
Pension
Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present
|
|
Payments
|
|
|
|
|
Value of
|
|
During
|
|
|
|
|
Accumulated
|
|
Last
|
|
|
|
|
Benefit
|
|
Fiscal Year
|
Name
|
|
Plan Name
|
|
($)
|
|
($)
|
|
Michael J. Hoffman
|
|
Constar Pension Plan
|
|
|
142,889
|
|
|
|
0
|
|
Michael J. Hoffman
|
|
Constar Supplemental Executive Retirement Plan
|
|
|
0
|
|
|
|
265,658
|
|
James C.T. Bolton
|
|
Constar Pension Plan
|
|
|
297,195
|
|
|
|
0
|
|
James C.T. Bolton
|
|
Constar Supplemental Executive Retirement Plan
|
|
|
0
|
|
|
|
36,296
|
|
Walter S. Sobon
|
|
Constar Pension Plan
|
|
|
0
|
|
|
|
0
|
|
Walter S. Sobon
|
|
Constar Supplemental Executive Retirement Plan
|
|
|
0
|
|
|
|
12,369
|
|
Christopher Phelan(1)
|
|
Constar UK Retirement Benefits Scheme
|
|
|
130,737
|
|
|
|
0
|
|
|
|
|
(1) |
|
Because he is not a U.S. employee, Mr. Phelan was not
eligible to participate in the Constar Pension Plan or the
Constar Supplemental Executive Retirement Plan. We maintain a
separate stand-alone pension plan for the benefit of our
employees in the United Kingdom, called the Constar
International UK Limited Retirement Benefits Scheme (the
UK Plan), in which Mr. Phelan participates. |
United
States Pension Plans
The Constar Pension Plan. The Constar Pension
Plan is a tax-qualified defined benefit pension plan. For
purposes of eligibility, including eligibility for early
retirement, vesting and benefit accrual, the Constar Pension
Plan recognizes all service recognized on behalf of our
employees for pension purposes by Crown Holdings, Inc. (our
former parent company) prior to our initial public offering.
Prior to April 1, 2007, with respect to our executive
officers, the Constar Pension Plan provided normal retirement
benefits at age 65 determined generally as 1.25% of the
participants final five year average base rate of pay
multiplied by the participants years of service. This
formula applied to all eligible salaried employees employed at
our corporate headquarters, including our
U.S.-based
named executive officers. Other participants in the Constar
Pension Plan who were paid hourly
and/or
employed at other locations received benefits under different
formulas. Effective April 1, 2007, benefit accruals under
the Constar Pension Plan were discontinued for all participants
except those who (1) were actively employed on
April 1, 2007, (2) had at least 15 years of
service as of December 31, 2007 and (3) had a combined
age and years of service of at least 65 as of December 31,
2007. Participants who met these requirements are
grandfathered participants. Grandfathered salaried
participants, regardless of job location, will continue to
accrue benefits under a new, less generous benefit formula of 1%
of the participants final five year average base rate of
pay multiplied by the participants years of service after
March 31, 2007. The benefits of employees who are not
grandfathered were frozen as of March 31, 2007 and such
employees will accrue no additional benefits after that date.
Mr. Hoffman and Mr. Bolton are grandfathered
participants and Mr. Sobon is not a grandfathered
participant. Under federal law for 2009, benefits from the
Constar Pension Plan were limited to $195,000 per year and may
be based only on the first $245,000 of a participants
annual compensation.
Benefits are generally payable beginning at age 65 in the
form of a joint and 50% survivor annuity for married
participants and a single life annuity for unmarried
participants. Participants may elect other optional annuity
forms of benefit of equivalent actuarial value. Benefits may not
be paid in the form of a lump sum unless the actuarial present
value of the participants benefit is $1,000 or less. An
executive officer who has reached age 55 and completed at
least 15 years of service may elect to retire early with
reduced benefits. Mr. Bolton is the only officer named in
the above table eligible for early retirement from the Constar
Pension Plan.
18
The Supplemental Executive Retirement Plan. We
previously maintained the Constar Supplemental Executive
Retirement Plan (the SERP), a non-qualified
supplemental pension plan. The SERP was intended to provide
additional benefits to employees who were designated as
participants in writing by us and whose benefits under the
Constar Pension Plan were restricted by the federal limits on
annual benefits and compensation described above. The SERP
provided benefits to these participants on the same basis as the
Constar Pension Plan; however, the executives accrued benefits
without regard to the federal limits on annual benefits and
compensation imposed on the Constar Pension Plan. Effective
April 1, 2007, benefit accruals under the SERP were
discontinued for all participants other than grandfathered
participants (as defined above), and reduced as described above
for all grandfathered participants in the same manner as under
the Constar Pension Plan. In connection with the Companys
emergence from Chapter 11, the SERP was terminated. In
connection with such termination certain named executive
officers received lump sum payments as shown in the
Pension Benefits table above.
Offset of Crown Pension Plan
Benefits. Pursuant to an agreement with Crown
entered into in connection with our initial public offering,
benefits earned under the Constar Pension Plan and SERP will be
offset by any benefits the employee earned under the defined
benefit pension plans sponsored by Crown (the Crown
Pension Plans). Crown is responsible for the portion of
the pension benefits that accrued while our employees were
participants in the Crown Pension Plans prior to our initial
public offering. This offset is reflected in the numbers set
forth in the Pension Benefits table above.
Actuarial Assumptions. The values reported in
the table above for the Constar Pension Plan are the present
values as of December 31, 2009 of each named executive
officers normal retirement benefit payable at age 65,
calculated using a discount rate of 6.1% and mortality
assumptions based on the RP-2000 Mortality Table. These
assumptions are the same as the assumptions used for financial
reporting purposes in our Annual Report on
Form 10-K
for the year ended December 31, 2009.
Funded Status of Constar Pension Plan. As of
December 31, 2009, the Constar Pension Plan was underfunded
on a GAAP basis by approximately $24.4 million.
European Pension Plan. We also maintain the
Constar International UK Limited Retirement Benefit Scheme (the
UK Plan) covering eligible employees in the United
Kingdom who are at least age 21 and who elect to
participate in the UK Plan. The UK Plan provides normal
retirement benefits at age 65 determined generally under
the following formula: 1/60th of the participants highest
average salary over any three consecutive years during the last
ten years of employment, times years of service. Participating
employees pay into the UK Plan 5% of their pre-tax earnings and
we contribute the balance necessary to fund the benefit.
Effective February 28, 2010, the UK Plan was frozen.
Vesting will occur after a participant has completed two years
of service. If a participant terminates employment before
becoming vested, he or she will be refunded all employee
contributions and will forfeit the employer portion. Benefits
are generally payable beginning at age 65 in the form of a
monthly annuity, with a 50% survivor annuity payable to a spouse
or other dependent. In addition, if death occurs within five
years after retirement, a spouse or other dependent will receive
a lump sum payment equal to what the participants lifetime
monthly payments would have been had the participant lived for
the balance of the five years.
Participants may elect to receive a portion of their pension in
a lump sum, the amount of which is based on the
participants age at retirement; provided that the monthly
benefit payable after the lump sum is withdrawn is not less than
a government-required guaranteed minimum pension. A participant
who has reached age 55 but has not reached age 60 may
elect to retire early with reduced benefits. A participant who
is at least age 60 may elect to retire early with an
unreduced pension. A participant who is forced to retire due to
serious ill health is entitled to the amount of the pension he
or she would have received had he or she continued to work until
age 65. Early and ill health retirements require the
consent of the Company. Currently, none of the U.K.-based
officers named in the above table are eligible for early
retirement.
The value reported in the table above for the UK Plan is the
present value as of December 31, 2009 of
Mr. Phelans normal retirement benefit payable at
age 65, calculated using a discount rate of 5.75% and post-
retirement mortality assumptions based on the PA 92 tables and a
retirement age of 65. These assumptions are
19
the same as the assumptions used for financial reporting
purposes in the Companys this Annual Report on
Form 10-K.
Funded Status of UK Plan. As of
December 31, 2009, the UK Plan was underfunded on a GAAP
basis by approximately $3.6 million.
Potential
Payments Upon Termination or Change in Control
Messrs. Hoffman and Bolton. In connection
with the Companys emergence from Chapter 11, we
entered into amended and restated employment agreements with
Messrs. Hoffman and Bolton effective as of May 29,
2009. These agreements are described below. However, after the
completion of the Companys fiscal year, Mr. Hoffman
resigned from the Company effective April 28, 2010. Instead
of receiving the benefit and payments described below, the
Company and Mr. Hoffman agreed to amend
Mr. Hoffmans employment agreement pursuant to which
he is entitled to receive payments and benefits equal to
approximately $2,328,000 in connection with his resignation.
Please see Resignation of Mr. Hoffman below for
a discussion of the employment agreement amendment that was
executed in connection with Mr. Hoffmans resignation.
The term of employment pursuant to each executives
agreement will continue indefinitely unless his employment with
the Company is terminated under specific circumstances expressly
described in the agreement. If the executives employment
with the Company has not been terminated under the circumstances
expressly described in the agreement within three years after
the occurrence of a change in control, the employment agreement
will terminate, and the executive will become an at
will employee of the Company. The executive will not be
entitled to any severance payments as a result of any
termination of employment occurring after such third anniversary
of a change in control.
If we terminate the executives employment without cause or
he resigns for good reason prior to a change in control, he is
entitled to: (i) base salary earned but unpaid as of the
date of the termination; (ii) a lump sum payment equal to
one times base salary plus one times his target bonus and
matching incentive under the AIP in the case of Mr. Bolton,
and in the case of Mr. Hoffman, two times base salary
plus two times his target bonus and matching incentive
under the AIP, for the year in which such termination occurs;
(iii) continuation of medical benefits in effect as of the date
of termination for a period of one year in the case of
Mr. Bolton, and in the case of Mr. Hoffman, two years,
following the date of termination at the Companys sole
expense; (iv) immediate payment of any unpaid expense
reimbursements and unused accrued vacation days through the date
of termination; and (v) any other payments
and/or
benefits which he is entitled to receive under any employee
benefit plans or the AIP pursuant to the terms of such plans or
arrangements.
If we terminate the executives employment without cause or
he resigns for good reason within six months prior to or three
years following a change in control, the severance payable to
the executive described above increases to two times base salary
plus two times his target bonus and matching incentive
under the AIP in the case of Mr. Bolton, and in the case of
Mr. Hoffman, three times base salary plus three
times his target bonus and matching incentive under the AIP, for
the year in which such termination occurs; and the medical
benefits continuation period will be extended to two years in
the case of Mr. Bolton, and in the case of
Mr. Hoffman, three years, following termination of
employment. If the executive becomes subject to the golden
parachute excise tax imposed under Section 4999 of
the Internal Revenue Code, he will receive an additional payment
in an amount sufficient to offset the effects of such excise tax.
If the executives employment is terminated due to his
death or disability, we are required to pay him (i) any
base salary earned but unpaid as of the date of termination and
base salary continuation through the end of the month in which
termination occurs, (ii) a pro-rata payment equal to his
target bonus for the year of termination (including the matching
incentive of 50% of such target bonus) under the AIP multiplied
by a fraction, the numerator of which is the number of days in
the year up to the date of termination and the denominator of
which is 365, (iii) immediate payment of any unpaid expense
reimbursements and unused accrued vacation days through the date
of termination and (iv) any other payments
and/or
benefits which the executive is entitled to receive under any
employee benefit plans or the AIP pursuant to the terms of such
plans or arrangements.
20
Each executive is subject to non-solicitation and
non-competition covenants for a period of time following
termination of his employment (the restricted
period) as follows: (i) if we terminate his
employment without cause or he resigns for good reason prior to
a change in control, the restricted period is equal to twelve
months in the case of Mr. Bolton, and in the case of
Mr. Hoffman, twenty-four months, following termination of
employment, (ii) if we terminate his employment without
cause or he resigns for good reason within six months prior to
or three years following a change in control, the restricted
period is equal to twenty-four months in the case of
Mr. Bolton, or in the case of Mr. Hoffman, thirty-six
months, following termination of employment, or
(iii) otherwise, the restricted period is equal to twelve
months following termination of employment. Each executive is
also subject to an indefinite confidentiality covenant and a
covenant to assign to us any invention developed by him (or with
his participation) within one year after his termination of
employment. All severance payments are contingent on the
executives execution of a release of claims in favor of
the Company.
For purposes of the above-described agreement, cause
is generally defined as (i) a willful and material act of
gross misconduct, (ii) the conviction of the executive of,
or plea of guilty or nolo contendere by the executive to
(A) any felony or (B) a misdemeanor (involving moral
turpitude or fraud) either of which result in incarceration,
(iii) willful acts of moral turpitude by the executive that
result in material financial loss to the Company, (iv) any
willful and material failure to follow the lawful reasonable
instructions of the Board of Directors, (v) a material and
willful breach by the executive of his employment agreement or
any other written agreement between him and the Company,
(vi) the executives willful and material violation of
any of the Companys written employment policies,
(vii) the executives failure to cooperate with a bona
fide internal investigation or an investigation by regulatory or
law enforcement authorities, or (viii) after being advised
of the commencement of any such investigation, the willful
destruction or willful failure to preserve documents or other
materials known to be relevant to any such investigation or the
willful inducement of others to fail to cooperate or to produce
documents or other materials in connection with any such
investigation. Good reason is generally defined as a
change in the executives authority, duties,
responsibilities, reporting obligations or principal employment
location by more than 30 miles, a reduction in base salary,
a reduction in the aggregate benefits payable to the executive,
we discontinue the AIP without immediately replacing such plan
with a plan that is the substantial economic equivalent of such
plan, a failure by us to pay compensation or benefits to the
executive when due or a failure or refusal by our successor to
assume the executives employment agreement. Change
in control generally means (i) the acquisition by an
unrelated third party, pursuant to a sale, merger,
consolidation, reorganization or similar transaction, of more
than 30% of our common stock, (ii) the liquidation or
dissolution of us or a sale of substantially all of our assets,
or (iii) a change in the individuals who represent a
majority of the membership of our Board of Directors over a
24-month
period, provided that new directors approved by two-thirds of
the board shall be excluded from any such determination;
provided, however, that the confirmation of the Companys
Plan of Reorganization and the Companys emergence from
Chapter 11 did not constitute a change of
control for purposes of the employment agreement.
Resignation of Mr. Hoffman. Effective as
of April 28, 2010, Michael J. Hoffman resigned from his
positions as President and Chief Executive Officer of the
Company and from the Board of Directors of the Company. On
April 27, 2010, the Company entered into an amendment and
restatement of Mr. Hoffmans employment agreement.
Subject to the terms and conditions contained therein, in
connection with his resignation Mr. Hoffman will be
entitled to (i) base salary earned but unpaid as of the
date of the termination; (ii) a lump sum payment equal to
$2.2 million, paid in the seventh month following his
termination; (iii) continuation of medical benefits in
effect as of the date of termination for a period of two years
following the date of termination at an estimated cost for
premiums of approximately $47,000; (iv) payment of
approximately $81,000 in respect of the deferred portion of his
2009 Annual Incentive Plan award, paid in the seventh month
following his termination; and (v) immediate payment of any
unused accrued vacation days. Accordingly, Mr. Hoffman is
entitled to receive payments and benefits with an approximate
value of $2,328,000 in accordance with his resignation.
Mr. Phelan. We have also entered into a
change in control agreement with Mr. Phelan. This agreement
will extend for a one-year term each January 1 unless notice of
non-extension is delivered by either party no
21
later than June 30 of the preceding year. Notwithstanding the
above, this agreement will terminate on the earlier of
(i) the second anniversary of a change in control, or
(ii) the executives attainment of normal
retirement age as defined under our defined benefit
pension plan. This agreement provides that in the event the
executives employment is terminated without cause by us or
he resigns his employment for good reason within two years
following a change in control, or prior to a change in control
with the executive reasonably demonstrating that the termination
without cause or for good reason was in connection with the
change in control, the executive is entitled to: (i) a lump
sum payment equal to two times his then current base salary
plus two times his target annual bonus for the year of
termination (but not including the matching incentive of 50% of
such target bonus under the AIP); (ii) continuation of
medical benefits (at the same cost to the executive) for a
period beginning on the date of such termination of employment
and ending on the earlier of the
24-month
anniversary of such termination or the date that the executive
attains age sixty-five; (iii) immediate payment of all of
his deferred compensation; and (iv) immediate cash-out,
vesting or exercisability of all outstanding equity-based or
performance-based awards. The foregoing severance payments are
contingent on the executives execution of a release of
claims in favor of us. The executive is subject to six-month
non-solicitation and non-competition covenants following
termination of his employment. He is also subject to an
indefinite confidentiality covenant.
For purposes of the above-described agreement, cause
is generally defined as gross misconduct or negligence, theft of
company assets, continued failure to follow the lawful
instructions of the Company or conviction of a criminal offense
(other than a road traffic offense not involving a prison
sentence). Good reason is generally defined as a
change in the executives authority, duties,
responsibilities, reporting obligations or principal employment
location by more than 50 miles, a reduction in base salary
or benefits, a failure by us to pay compensation or benefits to
the executive when due or a failure or refusal by our successor
to assume the executives change in control agreement.
Change in control generally means (i) the
acquisition by an unrelated third party, pursuant to a sale,
merger, consolidation, reorganization or similar transaction, of
more than 30% of our common stock, (ii) the liquidation or
dissolution of us or a sale of substantially all of our assets,
or (iii) a change in the individuals who represent a
majority of the membership of our Board of Directors over a
24-month
period, provided that new directors approved by two-thirds of
the board shall be excluded from any such determination;
provided, however, that the confirmation of the Companys
Plan of Reorganization and the Companys emergence from
Chapter 11 did not constitute a change of
control for purposes of the employment agreement.
Estimated Payments. Estimated payments to each
of the named executive officers under the above-described
agreements upon termination without cause or for good reason
prior to a change in control are as follows (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
Amount of
|
|
|
|
|
Estimated
|
|
Continued
|
|
|
|
|
Cash
|
|
Health
|
|
|
|
|
Payment
|
|
Benefits
|
|
Total
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
Michael J. Hoffman(2)
|
|
|
2,489,750
|
(3)
|
|
|
46,837
|
(4)
|
|
|
2,536,587
|
|
James C.T. Bolton
|
|
|
454,992
|
(5)
|
|
|
23,419
|
(6)
|
|
|
478,411
|
|
Christopher P. Phelan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
All amounts above are based on the assumption that the
triggering event for the payments occurred on December 31,
2009. |
|
|
|
|
|
(2) |
|
The amount reflected in the above table sets forth the
approximate value Mr. Hoffman would receive assuming such
termination of employment occurred on December 31, 2009.
However, effective April 28, 2010, Mr. Hoffman
resigned and accordingly, would no longer be entitled to receive
the amount reflected in this table. Please see Resignation
of Mr. Hoffman above for a description of the
benefits Mr. Hoffman is entitled to receive in connection
with his resignation. |
|
(3) |
|
This amount is estimated to equal two times the executives
base salary plus two times the executives target bonus and
matching incentive under the AIP. |
22
|
|
|
(4) |
|
This amount is estimated to equal the premium payments for
24 months of health coverage at our sole expense. |
|
(5) |
|
This amount is estimated to equal one times the executives
base salary plus one times the executives target bonus and
matching incentive under the AIP. |
|
(6) |
|
This amount is estimated to equal premium payments for
12 months of health coverage at our sole expense. |
Estimated payments to each of the named executive officers under
the above-described agreements upon termination without cause or
for good reason in connection with a change in control are as
follows (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
|
|
|
|
|
|
Amount of
|
|
|
|
|
|
|
Estimated
|
|
Continued
|
|
Estimated
|
|
|
|
|
Cash
|
|
Health
|
|
Excise Tax
|
|
|
|
|
Payment
|
|
Benefits
|
|
Gross-Up
|
|
Total
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Michael J. Hoffman(2)
|
|
|
3,734,625
|
(3)
|
|
|
70,256
|
(4)
|
|
|
1,626,964
|
(5)
|
|
|
5,431,845
|
|
Walter S. Sobon
|
|
|
909,983
|
(6)
|
|
|
46,837
|
(7)
|
|
|
302,547
|
(8)
|
|
|
1,259,367
|
|
Christopher P. Phelan(9)
|
|
|
805,665
|
(10)
|
|
|
2,255
|
(11)
|
|
|
|
|
|
|
807,920
|
|
|
|
|
(1) |
|
All amounts above are based on the assumption that the
triggering event for the payments occurred on December 31,
2009. |
|
(2) |
|
The amount reflected in the above table sets forth the
approximate value Mr. Hoffman would receive assuming such
termination of employment occurred on December 31, 2009.
However, effective April 28, 2010, Mr. Hoffman
resigned and accordingly, would no longer be entitled to receive
the amount reflected in this table. Please see Resignation
of Mr. Hoffman above for a description of the
benefits Mr. Hoffman is entitled to receive in connection
with his resignation. |
|
(3) |
|
This amount is estimated to equal three times the
executives base salary plus three times the
executives target bonus and matching incentive under the
AIP. |
|
(4) |
|
This amount is estimated to equal premium payments for
36 months of health coverage at our sole expense. |
|
(5) |
|
This amount does not reflect the value of
Mr. Hoffmans three-year non-competition and
non-solicitation agreement with us. Such value may be offset
from the parachute payments attributed to Mr. Hoffman in
connection with a change in control. |
|
(6) |
|
This amount is estimated to equal two times the executives
base salary plus two times the executives target bonus and
matching incentive under the AIP. |
|
(7) |
|
This amount is estimated to equal premium payments for
24 months of health coverage at our sole expense. |
|
(8) |
|
This amount does not reflect the value of the executives
two-year non-competition and non-solicitation agreement with us.
Such value may be offset from the parachute payments attributed
to the executive in connection with a change in control. |
|
(9) |
|
Payments to Mr. Phelan are converted to US Dollars at the
average daily exchange rate for 2009 of $1.56593 to £1. |
|
(10) |
|
This amount is estimated to equal two times the executives
base salary plus two times the executives target bonus. |
|
(11) |
|
This amount is estimated to equal the employer-paid portion of
premium payments for 24 months of health coverage. |
23
Estimated payments to each of the named executive officers under
the above-described agreements upon his death or disability are
as follows (1):
|
|
|
|
|
|
|
Estimated
|
|
|
Cash
|
|
|
Payment
|
Name
|
|
($)(2)
|
|
Michael J. Hoffman(3)
|
|
|
746,925
|
|
James C.T. Bolton
|
|
|
194,996
|
|
Christopher P. Phelan
|
|
|
|
|
|
|
|
(1) |
|
All amounts above are based on the assumption that the
triggering event for the payments occurred on December 31,
2009. |
|
(2) |
|
This amount is equal to the executives target bonus and
matching incentive under the AIP. |
|
(3) |
|
The amount reflected in the above table sets forth the
approximate value Mr. Hoffman would receive assuming such
termination of employment occurred on December 31, 2009.
However, effective April 28, 2010, Mr. Hoffman
resigned and accordingly, would no longer be entitled to receive
the amount reflected in this table. Please see Resignation
of Mr. Hoffman above for a description of the
benefits Mr. Hoffman is entitled to receive in connection
with his resignation. |
Mr. Sobon. Mr. Sobons
employment agreement was rejected by the Company in connection
with its Chapter 11 proceeding. Payments made to
Mr. Sobon in respect of such rejection are described in the
footnotes to the Summary Compensation Table.
Risk
Assessment
The Company has reviewed its compensation policies and practices
for all employees and concluded that any risks arising from the
policies and programs are not reasonably likely to have a
material adverse effect on the Company.
Director
Compensation
Current Board of Directors. We paid the
following cash compensation to our current Board of Directors
for their 2009 service. These amounts include fees earned in
2009 that were paid in 2010. These directors assumed office upon
the Companys emergence from Chapter 11.
Mr. Hoffman, our Chief Executive Officer in 2009, was a
member of our Board of Directors but did not receive any
compensation for such service. Although Ms. Mack received
compensation for her services as a director with respect to
2009, she has not received any compensation for her Board
service since April 28, 2010, the date on which she became
the interim Chief Executive Officer of the Company.
|
|
|
|
|
|
|
Fees
|
|
|
Earned
|
|
|
or Paid
|
|
|
in Cash
|
Name
|
|
($)
|
|
Michael J. Balduino
|
|
|
40,580
|
|
Eric A. Balzer
|
|
|
53,486
|
|
Lawrence V. Jackson
|
|
|
45,080
|
|
Ruth J. Mack
|
|
|
50,486
|
|
L. White Matthews
|
|
|
89,832
|
|
24
The fees described above were paid on a pro-rata basis for each
directors time served on the board during 2009 in
accordance with the following schedule:
|
|
|
|
|
|
|
|
|
|
|
|
|
Attendance Fee for
|
|
|
Annual
|
|
Board or Applicable
|
|
|
Retainer
|
|
Committee Meeting
|
Position
|
|
($)
|
|
($)
|
|
Chairman of the Board of Directors
|
|
|
120,000
|
|
|
|
1,500
|
|
Non-Chairman Director
|
|
|
45,000
|
|
|
|
1,500
|
|
Chairman of the Audit Committee
|
|
|
10,000
|
|
|
|
1,000
|
|
Non-Chairman Member of the Audit Committee
|
|
|
0
|
|
|
|
1,000
|
|
Chairman of the Compensation and Benefits Committee
|
|
|
10,000
|
|
|
|
1,000
|
|
Non-Chairman Member of the Compensation and Benefits Committee
|
|
|
0
|
|
|
|
1,000
|
|
Chairman of the Nominating and Corporate Governance Committee
|
|
|
5,000
|
|
|
|
1,000
|
|
Non-Chairman Member of the Nominating and Corporate Governance
Committee
|
|
|
0
|
|
|
|
1,000
|
|
In addition, Directors are to annually receive $60,000 of
restricted stock. No awards have yet been made. All directors
will be reimbursed for travel expenses incurred in connection
with Board of Directors and committee meetings. Mr. Jason
Pratt joined the Companys Board of Directors upon the
Companys emergence from Chapter 11, and subsequently
resigned. Mr. Pratt was a Principal and Managing Director
of one of the Companys stockholders, and was not being
currently paid for his Board service other than reimbursement of
travel expenses. Upon his resignation from the Board of
Directors, Mr. Pratt was paid $10,000.
Mr. Matthews serves as the Chairman of our Board of
Directors and the Chairman of our Nominating and Corporate
Governance Committee. In recognition of this dual service,
commencing in 2010 no annual retainer has been payable to
Mr. Matthews for his service as Chairman of our Nominating
and Corporate Governance Committee.
Former Board of Directors. We paid the
following cash compensation to our former Board of Directors for
their 2009 service. These Directors resigned upon the
Companys emergence from Chapter 11. Our Chief
Executive Officer in 2009 was a member of the former Board of
Directors but did not receive any compensation for such service.
|
|
|
|
|
|
|
Fees
|
|
|
Earned
|
|
|
or Paid
|
|
|
in Cash
|
Name
|
|
($)
|
|
James A. Lewis
|
|
|
31,313
|
|
Michael D. McDaniel
|
|
|
34,343
|
|
Frank J. Mechura
|
|
|
47,755
|
|
John P. Neafsey
|
|
|
65,648
|
|
Angus F. Smith
|
|
|
51,552
|
|
A. Alexander Taylor
|
|
|
36,843
|
|
25
The fees described above were paid on a pro-rata basis for each
directors time served on the board during 2009 in
accordance with the following schedule:
|
|
|
|
|
|
|
|
|
|
|
|
|
Attendance Fee for
|
|
|
Annual
|
|
Board or Applicable
|
|
|
Retainer
|
|
Committee Meeting
|
Position
|
|
($)
|
|
($)
|
|
Chairman of the Board of Directors
|
|
|
91,500
|
|
|
|
2,000
|
|
Non-Chairman Director
|
|
|
56,500
|
|
|
|
1,000
|
|
Chairman of the Audit Committee
|
|
|
14,000
|
|
|
|
2,000
|
|
Non-Chairman Member of the Audit Committee
|
|
|
3,500
|
|
|
|
1,500
|
|
Chairman of the Compensation Committee
|
|
|
5,000
|
|
|
|
1,500
|
|
Non-Chairman Member of the Compensation Committee
|
|
|
2,500
|
|
|
|
1,000
|
|
Chairman of the Nominating and Corporate Governance Committee
|
|
|
5,000
|
|
|
|
1,500
|
|
Non-Chairman Member of the Nominating and Corporate Governance
Committee
|
|
|
2,500
|
|
|
|
1,000
|
|
Notwithstanding the foregoing, each Committee had a maximum
number of meetings per year for which attendance fees were
payable. Attendance fees were payable for up to 12 Audit
Committee meetings per year, up to three Compensation Committee
meetings per year, and up to two Nominating and Corporate
Governance Committee meetings per year.
In addition, all directors were reimbursed for travel expenses
incurred in connection with Board of Directors and committee
meetings.
Mr. Neafsey was the Chairman of our Board of Directors and
the Chairman of our Nominating and Corporate Governance
Committee. In recognition of this dual service, since the second
quarter of 2006 no annual retainer was payable to
Mr. Neafsey for his service as Chairman of our Nominating
and Corporate Governance Committee.
26
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
beneficial ownership of our Common Stock as of September 20,
2010. The table includes the number of shares beneficially owned
by (i) each person or group that is known to us to be the
beneficial owner of more than 5% of our outstanding Common
Stock, (ii) each of our directors and executive officers
named in the summary compensation table and (iii) all of
our directors and executive officers as a group. Beneficial
ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect
to securities.
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
Shares
|
|
Percent of
|
|
|
Beneficially
|
|
Shares
|
5% Beneficial Owners, Directors, Named Officers
|
|
Owned
|
|
Outstanding
|
|
Solus Alternative Capital Management LP, Solus GP LLC, and
Christopher Pucillo
|
|
|
425,280
|
|
|
|
24.3
|
%
|
430 Park Avenue, 9th Floor
New York, NY 10022(1)(2)
|
|
|
|
|
|
|
|
|
JP Morgan Chase & Co.
|
|
|
250,250
|
|
|
|
14.3
|
%
|
270 Park Avenue
New York, NY 10017(1)
|
|
|
|
|
|
|
|
|
FMR LLC
|
|
|
175,600
|
(3)
|
|
|
10.0
|
%
|
82 Devonshire Street
Boston, MA 02109(1)(3)
|
|
|
|
|
|
|
|
|
Trafelet Capital Management, L.P., Trafelet & Company
LLC and Remy Trafelet
|
|
|
159,600
|
|
|
|
9.1
|
%
|
590 Madison Avenue, 26th Floor
New York, NY 10022(1)(4)
|
|
|
|
|
|
|
|
|
Peritus Asset Management LLC
|
|
|
92,450
|
|
|
|
5.3
|
%
|
26 West Anapamu Street
Santa Barbara, CA 93101(1)
|
|
|
|
|
|
|
|
|
Michael J. Balduino
|
|
|
0
|
|
|
|
0
|
|
Eric A. Balzer
|
|
|
0
|
|
|
|
0
|
|
Grant H. Beard
|
|
|
0
|
|
|
|
0
|
|
Lawrence V. Jackson
|
|
|
0
|
|
|
|
0
|
|
Ruth J. Mack
|
|
|
0
|
|
|
|
0
|
|
L. White Matthews III
|
|
|
0
|
|
|
|
0
|
|
Michael J. Hoffman
|
|
|
0
|
|
|
|
0
|
|
James C.T. Bolton
|
|
|
0
|
|
|
|
0
|
|
Christopher P. Phelan
|
|
|
0
|
|
|
|
0
|
|
Walter S. Sobon
|
|
|
0
|
|
|
|
0
|
|
All directors and executive officers as a group (14 persons)
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(1) |
|
The number of shares beneficially owned is derived from reports
filed by each such beneficial owner under Section 13 or
Section 16 of the Securities Exchange Act of 1934. |
|
(2) |
|
According to the Schedule 13G filed by the named persons on
June 9, 2009, Solus GP LLC is the general partner of Solus
Alternative Asset Management LP and Christopher Pucillo is the
managing member of Solus GP LLC. |
|
(3) |
|
According to the Schedule 13G filed by the named person on
September 10, 2009, Fidelity Management &
Research Company is the beneficial owner of 169,100 shares
of Constar common stock (equal to 9.7% of the outstanding
shares), and Fidelity Capital & Income Fund is the
beneficial owner of 115,450 shares of Constar common stock
(equal to 6.6% of the outstanding shares). Additional
information regarding the beneficial ownership of such shares is
contained within such Schedule 13G. Based on communications |
27
|
|
|
|
|
from the named person, the Company believes that the named
person has sold some of its shares of Constar common stock. |
|
(4) |
|
According to the Schedule 13G filed by the named persons on
January 21, 2010, the reported shares are held by several
private investment funds for which Trafelet Capital Management,
L.P. serves as the investment manager. Trafelet &
Company, LLC serves as the general partner of Trafelet Capital
Management, L.P. and Remy Trafelet serves as managing member of
Trafelet & Company, LLC. |
The address of each director and executive officer is One Crown
Way, Philadelphia, Pennsylvania
19154-4599.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Policy
for Approval of Related Person Transactions
The Board of Directors has adopted a written policy for the
treatment of related person transactions. The policy defines a
Related Person Transaction as a transaction
(A) in which (1) the Company was, is or would be a
participant, and (2) any Related Person had, has or would
have a direct or indirect interest (other than solely as a
result of being a director or a less than 10 percent
beneficial owner (but not a general partner) of another entity
that is a party to the transaction); or (B) that is
required to be disclosed under Item 404(a) of
Regulation S-K.
The policy defines a Related Person as a person
(A) who is or was (at any time since the beginning of the
last fiscal year for which the Company has filed a
Form 10-K
and proxy statement, even if they are not presently such a
person) an (1) executive officer, director or nominee for
election as a director of the Company, or (2) Immediate
Family Member of any of the foregoing; or (B) who is or was
(at any time when the relevant transaction occurred or existed)
(1) a greater than 5 percent beneficial owner of the
Companys common stock; or (2) an Immediate Family
Member of such beneficial owner. The policy defines
Immediate Family Member as a persons spouse,
parents, stepparents, children, stepchildren, siblings, mothers-
and
fathers-in-law,
sons- and
daughters-in-law,
and brothers- and
sisters-in-law
and anyone residing in such persons home (other than a
tenant or employee).
Under the policy, the Audit Committee reviews the material facts
of each Related Person Transaction and either approves or
disapproves of the entry into the Related Person Transaction. If
advance approval of a Related Person Transaction is not feasible
or was not obtained, then the Audit Committee shall review the
material facts of the Related Person Transaction and either
ratify or disapprove of the entry into the Related Person
Transaction. The Audit Committee may approve or ratify only
those Related Person Transactions that are in, or are not
inconsistent with, the best interests of the Company and its
stockholders, as the Audit Committee determines in good faith.
In determining whether to approve or ratify a Related Person
Transaction, the Audit Committee shall take into account all of
the facts and circumstances that the Audit Committee deems
appropriate, including but not limited to whether the Related
Person Transaction is on terms no less favorable than terms
generally available to an unaffiliated third-party under the
same or similar circumstances, the nature of the Related
Persons interest in the transaction, the nature of the
relationship among the relevant Related Persons, the amount
involved, any benefit to the Company and any impact on director
independence.
No director may participate in any discussion or approval of a
Related Person Transaction for which he or she is a Related
Person, except that the director shall provide all material
information concerning the Related Person Transaction to the
Audit Committee.
If a Related Person Transaction will be ongoing, the Audit
Committee may establish guidelines for the Companys
management to follow in its ongoing dealings with the Related
Person. Thereafter, the Audit Committee, on at least an annual
basis, shall review and assess ongoing relationships with the
Related Person to see that they are in compliance with the
Committees guidelines and that the Related Person
Transaction remains appropriate.
A Related Person Transaction shall not be invalid, void or
voidable under applicable law solely because the Audit Committee
shall fail to approve or ratify such Related Person Transaction.
28
Director
Independence
Each member of the Board of Directors is independent under
NASDAQ listing standards, except that Mr. Beard and
Ms. Mack are not independent because of their employment by
the Company. All members of the Audit and Finance Committee,
Compensation and Benefits Committee, and Nominating and
Corporate Governance Committee are independent under NASDAQ
listing standards.
Relationship
with Crown
Constar was a wholly owned subsidiary of Crown Holdings, Inc.
(Crown) from 1992 until the closing of
Constars initial public offering on November 20,
2002. From November 20, 2002 until Constars emergence
from bankruptcy, Crown owned 1,255,000 shares, or
approximately 10%, of Constars outstanding common stock.
In connection with Constars reorganization and emergence
from bankruptcy, all then-existing shares of Constar capital
stock were canceled. Consequently, after May 1, 2009,
transactions between Crown and Constar are no longer related
party transactions.
For the four months ended April 30, 2009 the Company paid
rent to Crown of $0.2 million for its Philadelphia
headquarters.
Under a service agreement, Crown provided certain general and
administrative services to the Company. In connection with this
agreement, the Company recorded an expense of $0.7 million
for the four months ended April 30, 2009. $0.9 million
was due to Crown as of April 30, 2009 under this agreement.
In November 2007, the Company and Crown entered into a five year
supply agreement. Sales to Crown under the contract were
approximately $2.8 million for the four months ended
April 30, 2009. At April 30, 2009 the Company had a
net receivable from Crown of approximately $0.9 million
related to this agreement.
In 2002, the Company entered into a License and Royalty Sharing
Agreement with Crown under which the Company agreed to pay a
portion of any royalties earned on licenses of our
Oxbartm
technology. In connection with this agreement, the Company
recorded an expense of approximately $0.2 million for the
four months ended April 30, 2009. The Company had a net
payable to Crown of approximately $3.4 million related to
this agreement at April 30, 2009.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require the
Company to disclose late filings of stock transaction reports by
its executive officers, directors and greater than 10%
stockholders. Based solely upon a review of reports filed by
these persons, all Section 16(a) filing requirements have
been met during 2009, except that a Form 3 due on
June 8, 2009 filed by Sola Ltd, Solus GP LLC and
Christopher Pucillo was filed on June 9, 2009.
OTHER
BUSINESS
We are not aware of any other matters that will be presented for
stockholder action at the Annual Meeting. If other matters are
properly introduced, the persons named in the accompanying proxy
will vote the shares they represent in accordance with their
judgment.
By Order of the Board of Directors,
David Waksman
Senior Vice President, Human Resources,
General Counsel and Secretary
October 4, 2010
29
This Proxy is solicited on behalf of the Board of Directors
CONSTAR INTERNATIONAL INC.
2010 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 16, 2010
The undersigned stockholder of Constar International Inc., a Delaware corporation, hereby
acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement relating
to the 2010 Annual Meeting of Stockholders of Constar International Inc., each dated on or about
October 4, 2010, and hereby appoints J. Mark Borseth and David J. Waksman, and each of them,
proxies and attorneys-in-fact, with full power to each of substitution, on behalf and in the name
of the undersigned, to represent the undersigned at the 2010 Annual Meeting of Stockholders of
Constar International Inc. to be held on November 16, 2010 at 8:00 a.m., local time, at the offices
of Dechert LLP, Cira Centre, 2929 Arch Street, Philadelphia, Pennsylvania and at any adjournment or
postponement thereof, and to vote all shares of Constar Common Stock which the undersigned would be
entitled to vote if then and there personally present, on the matters set forth on this card.
SEE REVERSE SIDE
|
|
The Board of Director recommends a vote FOR all nominees listed in Item 1. |
|
1. |
|
Election of Directors: FOR all nominees listed below (except as indicated). If you wish to withhold
authority to vote for any individual nominee, strike a line through that nominees name in the
following list: Michael J. Balduino, Eric A. Balzer, Grant H. Beard, Lawrence V. Jackson, Ruth J. Mack,
L. White Matthews III. |
|
|
|
The Board of Directors recommends a vote FOR Item 2. |
|
|
|
|
|
|
|
|
|
|
|
|
|
For |
|
Against |
|
Abstain |
2.
|
|
To ratify the
appointment of
PricewaterhouseCoopers
LLP as the independent
registered public
accounting firm to
audit and report upon
the Companys
financial statements
for 2010.
|
|
o
|
|
o
|
|
o |
And, in their discretion, the proxies are authorized to vote upon such other matter or matters
which may properly come before the meeting or any adjournment or postponement thereof.
This Proxy will be voted as directed or, if no contrary direction is indicated, will be voted FOR
each of the nominees set forth above, FOR Item 2, and as said proxies deem advisable on such other
matters as may properly come before the meeting.
Signature:
Dated: , 2010
Signature (if held jointly or as community property):
This Proxy should be marked, dated and signed by the stockholder(s) as his or her name appears
hereon, and returned promptly in the enclosed envelope. Persons signing in a fiduciary capacity
should so indicate. If shares are held by joint tenants or as community property, both should sign.