award in connection with our CEO transition. These awards were in the form of stock options and RSUs and were intended to provide an enhanced incentive to facilitate the continued service
of each respective executive.
Compensation of Gerald W. Deitchle
Gerald (Jerry) W. Deitchle served as our Chief Executive Officer for all of 2012. On April 6, 2010, we entered into a
new employment agreement with Mr. Deitchle that replaced his prior employment agreement and was deemed to commence on December 30, 2009. This employment agreement expired on January 4, 2013, but was extended until
Mr. Deitchles retirement in February 1, 2013, in order to assist in the transition of Chief Executive Officer responsibilities to Gregory A. Trojan. The terms and conditions of Mr. Deitchles employment agreement as in
effect for 2012 are presented below:
Base Salary. $500,000, subject to a minimum annual increase based on
increases in the Consumer Price Index and otherwise at the discretion of the Compensation Committee. In October 2010 and December 2011, the Compensation Committee engaged Aon Hewitt to evaluate the Companys executive compensation and
benchmarking. Based on the analysis provided by Aon Hewitt and in recognition of the performance of the Company, Mr. Deitchles annual base salary was increased to $550,000 for fiscal 2011. For fiscal 2012, the Compensation Committee
elected to increase Mr. Deitchles annual base salary to $600,000, in recognition of the continued outstanding performance of the Company and based on Aon Hewitts executive compensation benchmarking and peer group analysis for 2011.
Bonus Opportunity. Annual bonus opportunity was targeted at no less than 80% of his base salary. Actual
bonuses were determined by the Board of Directors based upon performance criteria established by the Compensation Committee after consultation with Mr. Deitchle.
Additional Benefits. Certain fringe benefits including up to $3,000 per year for unreimbursed out-of-pocket costs associated with an annual physical examination, the use of a company
automobile or automobile allowance of up to $1,800 per month, coverage under our group health insurance plan and the right to participate in our other executive benefit plans.
Option Grant. On December 30, 2009, Mr. Deitchle was granted an option under the 2005 Plan to acquire
232,702 shares of our Common Stock at an exercise price of $18.86 per share, which was the fair market value of our Common Stock on that date. Mr. Deitchle did not receive any new equity award subsequent to this grant. The options subject to
this grant have vested in full and expire on the tenth yearly anniversary of the date of grant.
Benefit. Mr. Deitchle will receive a retirement benefit of $125,000 per year for a period of five years following his separation of service (February 1, 2013) from us as our Chief Executive Officer. Mr. Deitchle and his
spouse are also entitled to receive certain post-retirement group health insurance benefits during the five-year period.
For fiscal 2012, we
achieved 82% of our targeted Consolidated Income from Operations amount and accordingly, Mr. Deitchle received his annual incentive bonus based on the terms and calculation in accordance with his employment agreement and the fiscal 2012 PIP.
In February 2013, Mr. Deitchle entered into a Consulting Agreement with us which is described in Certain Relationships and Related
Party Transactions in this Proxy Statement.
Compensation of Gregory A. Trojan
On October 28, 2012, we entered into an employment agreement with Gregory A. Trojan pursuant to which he was retained as our
President and Chief Executive Officer. Mr. Trojans employment as President