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The following is an excerpt from a S-1 SEC Filing, filed by VANGUARD CAR RENTAL GROUP INC. on 8/2/2006.
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VANGUARD CAR RENTAL GROUP INC. - S-1 - 20060802 - MANAGEMENT


Management

The following table sets forth the names, ages and positions of our executive officers.

Executive officers


Name

  Age

  Position


William E. Lobeck   66   President, Chief Executive Officer and Director

Jeffry J. Parell

 

51

 

Executive Vice President and Chief Operating Officer

Thomas C. Kennedy

 

40

 

Executive Vice President and Chief Financial Officer

Jerrold A. Dow

 

41

 

Senior Vice President and Chief Marketing Officer

Tyler A. Best

 

39

 

Senior Vice President and Chief Information Officer

Wesley C. Fredenburg

 

55

 

Senior Vice President, General Counsel and Secretary

Ian Wardle

 

48

 

Senior Vice President and Chief Operating Officer of EMEA Operations

James H. Letang

 

67

 

Chairman of Canadian Operations

Gerard J. Kennell

 

61

 

Senior Vice President and Treasurer

Paula A. Kuykendall

 

47

 

Senior Vice President and Chief Accounting Officer

Omar K. Marchi

 

39

 

Senior Vice President, Revenue Management

Thomas J. Santorelli

 

64

 

Senior Vice President, Risk Management

William J. Frakes

 

58

 

Senior Vice President, Human Resources

John S. Leigh

 

61

 

Senior Vice President and General Manager of EMEA Operations



 

 

 

 

 

William E. Lobeck has been our President and Chief Executive Officer and a member of our board of directors since inception and of Worldwide since the Acquisition. From 1999 until 2003, Mr. Lobeck was involved in industry-related consulting and private investing. Prior to 1999, Mr. Lobeck served as the Chief Executive Officer and a principal owner of National Car Rental Systems, Inc., from 1995 until its sale to AutoNation in 1997, and the President and Chief Operating Officer of AutoNation's Rental Group from 1997 to 1999. Mr. Lobeck served as the Chief Executive Officer to Thrifty Rent-A-Car System, Inc. from 1981 until 1989, when Thrifty was sold to Chrysler Corporation. From 1989 until 1993, Mr. Lobeck remained with Chrysler Corporation as President and Chief Operating Officer of Pentastar Transportation Group, a Chrysler subsidiary that operated Thrifty, Dollar Rent-A-Car and Snappy Car Rental.

Jeffry J. Parell has been our Executive Vice President and Chief Operating Officer of U.S. operations since inception and of Worldwide since the Acquisition. Prior to joining Worldwide, Mr. Parell served as President, Chief Executive Officer and Director of Velocity Express Corporation, a logistics company. Mr. Parell joined Velocity Express in October 2000 as CEO and President of the operating company and was promoted to CEO and President of the holding company in January 2001. From 1998 to 2000, Mr. Parell served as President of North American Rental Group, a division of AutoNation. Prior to that, Mr. Parell was President and Chief

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Operating Officer of National Car Rental Systems, Inc. from 1997 to 1998, and served as Executive Vice President of Operations from 1995 to 1997.

Thomas C. Kennedy has been our Senior Vice President and Chief Financial Officer since inception and has been the Executive Vice President and Chief Financial Officer of Worldwide since December 2003. Prior to joining Worldwide, Mr. Kennedy served in various positions at Northwest Airlines, Inc., including as Senior Vice President and Controller in 2003; Vice President, Financial Planning and Analysis from 2000 to 2002; Managing Director, Corporate Planning in 1999; and Director, Finance and Information Services, Pacific Division, Tokyo, Japan from 1997 to 1999.

Jerrold A. Dow has been our Senior Vice President and Chief Marketing Officer since inception and of Worldwide since April 2005. Prior to joining Worldwide, Mr. Dow served as Managing Director, Worldwide Advertising and Promotions for United Airlines, Inc. from 2004 to 2005, and as Director, Worldwide Marketing Communications for United from 2000 to 2004. Before joining United Airlines, Mr. Dow worked for Pella Corporation as Senior Manager, Product Marketing from 1999 to 2000 and Senior Manager, Marketing Communications from 1996 to 1999. From 1989 to 1996, Mr. Dow held various positions at Leo Burnett Company, leaving as Senior Account Supervisor.

Tyler A. Best has been our Senior Vice President and Chief Information Officer since inception and of Worldwide since the Acquisition. Prior to joining Worldwide, Mr. Best served as Chief Technology Officer of Budget Group, Inc., the parent company of Budget Rent-A-Car, Budget Rent-A-Truck and Ryder Truck, from July 2001 to March 2003. From November 2000 to July 2001, Mr. Best served as President and Executive Strategist of Best Associates. From January 1997 to November 2000, Mr. Best served as Chief Information Officer of Lifestyles Furnishings International. Prior to that, Mr. Best was Vice President—Corporate Distributed Operations of The Macmanus Group from April 1995 to January 1997.

Wesley C. Fredenburg has been our General Counsel and Secretary since inception and of Worldwide since June 2006. Prior to joining Worldwide, Mr. Fredenburg served as the Secretary and General Counsel of Velocity Express Corporation from November 2000 to June 2006. From 1997 to 2000, Mr. Fredenburg served as General Counsel for the Automotive Rental Group of AutoNation, Inc. From 1995 to 1997, Mr. Fredenburg served as the General Counsel of National Car Rental Systems, Inc. Prior to that, he was a partner in the law firm of Crowe and Dunlevy and served as an Assistant United States Attorney.

Ian Wardle has been our Senior Vice President and Chief Operating Officer of EMEA operations since inception and of Worldwide since October 2003. Mr. Wardle joined our predecessor when it was owned by Republic Industries, in 1998 as Senior Vice President Finance for International Operations. He held the same position with ANC from 1998 to 2003. Mr. Wardle was Director of Group Financial Control for Lex Service Plc from 1997 to 1998 and Director of Finance and Deputy Managing Director for Avis UK, part of Avis Europe Plc from 1991 to 1996.

James H. Letang has been the Chairman of our Canadian Operations since inception and of Worldwide since the Acquisition. He served as Chairman and CEO of National Car Rental (Canada) from 1996 to 2002. Mr. Letang has over 35 years experience as an owner and senior executive in the Canadian car rental industry. He was a founder of the Holiday and Thrifty Car Rental brands in Canada.

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Gerard J. Kennell has been our Senior Vice President and Treasurer since inception and of Worldwide since June 2004. Prior to joining Worldwide, Mr. Kennell was Vice President and Assistant Treasurer of Cendant Corporation and Senior Vice President and Treasurer of Avis Group Holdings, the parent company of Avis Rent A Car System, Inc. and Budget Rent-A-Car System, Inc. from February 2001 to June 2004. From March 1977 to February 2001, Mr. Kennell served in various positions with Avis including Vice President and Treasurer (1986-2001), Assistant Treasurer (1981-1986) and Manager Treasury Operations (1977-1981).

Paula A. Kuykendall has been our Senior Vice President and Chief Accounting Officer since inception and of Worldwide since January 2004. Prior to joining Worldwide, Ms. Kuykendall served as Vice President and Controller of True Value Hardware from October 2003 to January 2004. From December 2000 to September 2003, Ms. Kuykendall served as Vice President and Controller of Clark Retail Enterprises, an operator of 1,200 convenience stores in the upper Midwest. From December 1997 to December 2000, Ms. Kuykendall served as Vice President and Controller for Dollar Thrifty Automotive Group, the parent company of Dollar Rent A Car and Thrifty Car Rental. From April 1995 to December 1997, Ms. Kuykendall served as Controller for Snappy Car Rental. Prior to that, Ms. Kuykendall was with Arthur Andersen from December 1986 to April 1995.

Omar K. Marchi has been our Vice President of Revenue Management for Vanguard USA since inception and of Worldwide since the Acquisition and became the Senior Vice President of Revenue Management for our subsidiary Vanguard USA in December 2005. Prior to October 2003, Mr. Marchi held various positions with National/Alamo since September 1999 including Vice President of Strategic Initiatives (September 1999-December 2000); Vice President of Fleet Planning (December 2000-February 2003); and Vice President of Revenue Management (February 2003-October 2003).

Thomas J. Santorelli has been our Vice President of Risk Management and Claims since inception and of Worldwide since May 2004. Most recently his role has changed to Senior Vice President of Risk Management and Claims. From 1977 to 1994, Mr. Santorelli served in the roles of Vice President of Insurance, as well as President of Hertz Claims Management, for The Hertz Corporation. From 1994 to 2004, Mr. Santorelli served as Executive Vice President of Customer Service, and as the President, of GE Zurich Warranty Corporation for Zurich North American Insurance Group.

William J. Frakes has been our Senior Vice President, Human Resources since inception and of Worldwide since November 2004. Before joining Worldwide, Mr. Frakes worked as an industry consultant in the area of Human Resources and Change Management. From 1998 to 2001, Mr. Frakes served as Vice President of Human Resources for Lifestyle Furnishings International. From 1982 through 1998 he held a number of positions within Unilever, including Human Resources Regional Vice President for the Americas, DiverseyLever based in Amsterdam, Netherlands (1996-1998); Vice President, Human Resources, Unilever Canada, Ltd. (1990-1996); and Director of Administration, Unilever Research, United States (1987-1990).

John S. Leigh has been the Senior Vice President and General Manager of EMEA operations since October 2001. He joined our predecessor U.K. subsidiary in 1973 under its prior name of Swan National where he held a number of senior executive roles until his promotion to Managing Director of EuroDollar (Holdings) plc in 1990, which was ultimately acquired by Republic Industries in 1998. His long-standing career in the car rental industry started in 1966 and he now serves as Chairman of the British Vehicle Rental and Leasing Association (BVRLA).

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The following table sets forth the names and ages of our directors.

Directors


Name

  Age

  Position


William E. Lobeck   66   President, Chief Executive Officer and Director

Robert B. Allardice III

 

59

 

Director

James N. Chapman

 

44

 

Director

Howard S. Cohen

 

59

 

Director

Bradley A. Gold

 

34

 

Director

Charles M. Gurassa

 

50

 

Director

Stephen R. Kerrigan

 

53

 

Director

James J. Pike

 

63

 

Director

Timothy F. Price

 

53

 

Director

Lenard B. Tessler

 

54

 

Director



 

 

 

 

 

Information regarding Mr. Lobeck is provided under "—Executive officers" above.

Robert B. Allardice III has been a Director of Vanguard Car Rental Group Inc. since inception and of Worldwide since December 2004. Mr. Allardice was associated from 1974 until retirement in 1993 with Morgan Stanley & Company Incorporated. During an eight-year period of that time he was a member of its finance committee. Since retirement from Morgan Stanley, Mr. Allardice has worked from 1993 to 1995 in a consulting capacity for Smith Barney and from 1994 to 1999 for Deutsche Bank Americas Holding Corp. From 2000 to 2002, he was a director of Bankers Trust Company. Between 2002 and early 2006, he was a consultant to the Chairman of the Supervisory Board of Deutsche Bank and since March 2006, he has been an advisory consultant to the U.S. M&A Department of Deutsche Bank.

James N. Chapman has been a Director of Vanguard Car Rental Group Inc. since inception and of Worldwide since May 14, 2004. Mr. Chapman is the non-executive Vice Chairman of Jetworks Leasing, LLC, an aircraft management services company based in Greenwich, Connecticut which he joined in December 2004. Prior to Jetworks, Mr. Chapman was associated with Regiment Capital Advisors, LLC, a high-yield hedge fund based in Boston which he joined in January 2003. Prior to Regiment, Mr. Chapman acted as a capital markets and strategic planning consultant with private and public companies, as well as hedge funds (including Regiment), across a range of industries including aviation/airlines, metals, mining, manufacturing, service and healthcare. Prior to his consulting endeavors, Mr. Chapman was affiliated with the Renco Group, Inc. from December 1996 to December 2001. Presently, Mr. Chapman serves as a member of the board of directors of Coinmach Service Corp. as well as a number of private companies.

Howard S. Cohen has been a director of Vanguard Car Rental Group Inc. since inception and of Worldwide since March 2006. Mr. Cohen is currently a senior advisor to Cerberus Capital Management, L.P. Prior to joining Cerberus, Mr. Cohen was the President and CEO of Gtech Corporation from 2001 to 2003. Prior to joining Gtech, Mr. Cohen was President and CEO of

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the Bell and Howell Corporation from 2000-2001. Prior to Bell and Howell, Mr. Cohen was President and CEO of Sidus Systems Corporation from 1998-1999 and Peak Technologies from 1996-1998. From 1992 to 1996 Mr. Cohen was President of Oce' Corporation where he was responsible for the United States operations of the office systems division, an independent subsidiary of Oce' Corporation. Prior to joining Oce', Mr. Cohen was Senior Vice-President of Sprint Corporation, the international long distance company from 1988 to 1992, where he managed the headquarters sales and marketing organizations.

Bradley A. Gold has been a director of Vanguard Car Rental Group Inc. since inception and of Worldwide since September 2003. Mr. Gold is a Managing Director of Cerberus Capital Management, L.P., which he joined in 2000. Prior to joining Cerberus, he spent two years at Jupiter Partners, a leveraged buyout firm, and two years in the private equity and mergers and acquisitions advisory areas of The Blackstone Company. Mr. Gold is a member of the Board of Directors of Netco Inc.

Charles M. Gurassa has been a director of Vanguard Car Rental Group Inc. since inception and of Worldwide since August 31, 2004. Mr. Gurassa was appointed as non-executive Chairman of Worldwide on March 28, 2005. He was appointed a non-executive director at Whitbread Plc in August 2000, a Trustee of Whizz-Kidz Charity in November 2003 and a director of Whizz-Kidz Trading Limited in June 2005, Chairman of 7 days Limited in the United Kingdom in May 2003, Chairman of National Trust Enterprises Ltd in January 2006 and a Trustee of The National Trust in July 2005, Member of the University of York Development Board in 2005, and Chairman of Lovefilm Int. Ltd in June 2006. Mr. Gurassa was Chairman of Virgin Mobile Holdings (UK) Plc from June 2004 to July 2006. Mr. Gurassa brings more than 25 years experience in the international corporate and leisure travel markets. He was Chief Executive of Thomson Travel Group Plc from December 1999 to May 2003 and a member of the board of directors of TUI AG from January 2001 to May 2003, where he was responsible for its travel and tourism business throughout northern Europe, and its European airlines. Mr. Gurassa spent 10 years (from 1989 to 1999) at British Airways, where he was the director responsible for its worldwide commercial operations.

Stephen R. Kerrigan has been a director of Vanguard Car Rental Group Inc. since inception and of Worldwide since December 2004. Mr. Kerrigan has been the Chairman of the Board, President and Chief Executive Officer of Coinmach Service Corp. since March 2004. Mr. Kerrigan has been Chief Executive Officer of Coinmach Laundry Corp. since May 1996, of Coinmach Corporation since November 1995 and of Coinmach Holdings, LLC since March 2003. Mr. Kerrigan was President and Treasurer of Solon Automated Services and Coinmach Laundry Corp. from April 1995 until May 1996, and Chief Executive Officer of The Coinmach Corporation, a predecessor of Coinmach Laundry Corporation, from January 1995 until November 1995. Mr. Kerrigan served as Vice President and Chief Financial Officer of Coinmach Corporation's predecessor, Coinmach Industries Co., L.P. from 1987 to 1994. Mr. Kerrigan serves as a member of the Board of Directors of Coinmach Service Corp. and Coinmach Corporation.

James J. Pike has been a director of Vanguard Car Rental Group Inc. since inception and of Worldwide since August 2004 and chairman of its compensation committee since August 2, 2004. Mr. Pike is a Managing Director of Cerberus Capital Management, L.P. Mr. Pike is an auto industry veteran with more than 30 years of experience in operations, marketing, acquisitions and finance. Mr. Pike is Chairman and Chief Executive Officer of CTA Acoustics, Inc. and Thermafiber, Inc., a position he assumed in October 2001. Mr. Pike is also Chairman and Chief

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Executive Officer for VHC Inc. and WMI Inc. From 1972 until 1997, Mr. Pike was an executive with MasoTech, starting as the Director of New Product Development.

Timothy F. Price has been a director of Vanguard Car Rental Group Inc. since inception and of Worldwide since August 2004. Mr. Price is managing member of Communications Advisory Group, LLC. Mr. Price is the former President and Chief Operating Officer of MCI Communications. In his 15-year history with MCI, Mr. Price held senior staff, line, field and headquarters positions. As President, Mr. Price was responsible for all of MCI's core communications businesses, including its units serving residential and business customers, domestically and globally, as well as network operations and information systems. Mr. Price serves on the board of directors of Velocita Wireless L.P., Teleglobe International Holdings Ltd and Anchor Glass Container Corporation and also serves on the advisory board of C&T Access Ventures. Mr. Price has served on the boards of MCI, SHL Systemhouse, the National Alliance of Business, the Woodruff Foundation and the Corporate 100 of the John F. Kennedy Center for the Performing Arts.

Lenard B. Tessler has been a director of Vanguard Car Rental Group Inc. since inception and of Worldwide since September 2003. Mr. Tessler is a Managing Director of Cerberus Capital Management, L.P., which he joined in May 2001. Prior to joining Cerberus, he was a founding partner of TGV Partners, a private investment partnership formed in April 1990. Mr. Tessler serves as a member of the board of directors of BlueLinx Holdings Inc. and NewPage Holding Corporation.

Committees of the board of directors

Our board of directors has established an executive committee, an audit committee and a compensation committee.

Our executive committee consists of Messrs. Chapman, Lobeck and Tessler. Duties of the Executive Committee include reviewing and approving major operating, contractual and expenditure items.

Our audit committee consists of Messrs. Allardice, Chapman and Kerrigan. Mr. Chapman serves as the chairman of the audit committee. Mr. Chapman has been designated as our audit committee's "financial expert". Duties of the Audit Committee include; among other things:

    appointing or replacing the independent registered public accounting firm;

    meeting with our independent registered public accounting firm to discuss the planned scope of their examinations, the adequacy of our internal controls and our financial reporting;

    reviewing the results of the annual examination of our financial statements and periodic internal audit examinations;

    reviewing and approving the services and fees of our independent registered public accounting firm;

    authorizing special investigations and studies;

    monitoring and reviewing our compliance with applicable legal requirements; and

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    performing any other duties or functions deemed appropriate by our Board of Directors.

Our compensation committee consists of Messrs. Pike, Cohen and Lobeck. Mr. Pike serves as the chairman of the compensation committee. Duties of the Compensation Committee include administration of our stock incentive plans and approval of compensation arrangements for our executive officers and administration of programs and policies regarding employee benefit plans.

Because we are a "controlled company" within the meaning of NYSE rules, we qualify for and intend to rely on exemptions from certain corporate governance requirements. See "Risk factors—Risks related to the offering—We are a "controlled company" within the meaning of NYSE rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements."

Compensation of directors and other arrangements

Our independent directors receive an annual retention fee of $             , except that Mr. Charles Gurassa, our non-executive chairman, receives an annual retainer fee in the amount of $             . In addition, a fee of $             will be paid to these independent directors for each directors' meeting attended. Our independent directors also receive a fee of $             for serving as chairperson of the audit committee or $             for being a member of a committee.

In August 2005, the following non-employee directors were issued shares of Class B common stock of Worldwide which will represent the number of shares indicated below as of the consummation of this offering: Mr. Robert B. Allardice III (6,500 shares); Mr. James N. Chapman (6,500 shares); Mr. Charles M. Gurassa (8,500 shares); Mr. Stephen R. Kerrigan (6,500 shares); Mr. James J. Pike (6,500 shares); and Mr. Timothy F. Price (6,500 shares).

Mr. Gurassa is entitled to an automobile for personal use, an office and administrative support including 50% of the cost of a personal assistant. We are also required to provide Mr. Gurassa with 12 months notice prior to terminating his retainer arrangement with us.

Our other directors do not receive any additional consideration for serving as directors, except that all directors are entitled to reimbursement for travel and out-of-pocket expenses in connection with their attendance at board and committee meetings.

We permit our directors to use vehicles in our rental fleet for their personal use at a significantly reduced rate. There is no limit on these rentals by our directors. We do not provide directors insurance coverage or other products in connection with these rentals.

Compensation committee interlocks and insider participation

None of our compensation committee members and none of our executive officers have a relationship that would constitute an interlocking relationship with executive officers or directors of another entity or insider participation in compensation decisions.

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Summary executive compensation table

The following table contains information regarding compensation for the last two fiscal years awarded to, earned by or paid to our Chief Executive Officer and our other four most highly compensated executive officers serving on our company as of December 31, 2005. There were no option grants made to these executive officers during the last two fiscal years.


 
 
   
  Annual Compensation

   
  Long-Term
Compensation
Stock Options
and Restricted
Stock Awards(2)

   
 
Name and Principal Position(1)

   
  Other Annual
Compensation

  All Other
Compensation(3)

 
  Year

  Salary

  Bonus

 

 
William E. Lobeck
President, Chief Executive Officer and Director
  2005
2004
  $
500,001
500,001
  $
500,001
1,543,507
  $
14,507
13,864
(4)
(5)
$

  $
4,033
283,011
(6)
(7)

Jeffry J. Parell
Executive Vice President and Chief Operating Officer

 

2005
2004

 

 

400,000
400,000

 

 

300,000
914,804

 

 

11,051
10,756

(4)
(5)

 



 

 

4,507
227,023

(6)
(7)

Thomas C. Kennedy
Executive Vice President and Chief Financial Officer

 

2005
2004

 

 

350,000
350,000

 

 

262,500
676,403

 

 

993,178
9,206

(4)
(5)

 



 

 

42,366
258,110

(6)
(7)

Howard D. Schwartz
Senior Vice President and General Counsel

 

2005
2004

(1)
(1)

 

340,000
340,000

 

 

170,000
616,363

 

 

15,423
15,536

(4)
(5)

 



 

 

31,299
208,298

(6)
(7)

Tyler A. Best
Senior Vice President and Chief Information Officer

 

2005
2004

 

 

275,000
275,000

 

 

137,500
473,927

 

 

12,227
10,848

(4)
(5)

 



 

 

6,418
191,650

(6)
(7)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(1)
Mr. Schwartz left Worldwide on March 31, 2006, but was one of our five most highly compensated executive officers in 2005.

(2)
See "—Long-term incentive plan."

(3)
Represents amounts for: (a) Worldwide's contribution to the 401(k) plan, (b) relocation benefits, (c) amounts deferred pursuant to a non-qualified deferred compensation plan in 2004 and (d) interest earnings on the non-qualified deferred compensation plan in 2005

(4)
Represents amounts which consist of: (a) imputed income related to company cars for Mr. Lobeck ($8,256), Mr. Parell ($7,226), Mr. Kennedy ($7,248), Mr. Schwartz ($10,248) and Mr. Best ($10,752); (b) imputed income on long-term disability insurance premiums for Mr. Lobeck ($6,251), Mr. Parell ($3,825), Mr. Kennedy ($1,980), Mr. Schwartz ($5,175) and Mr. Best ($1,475); and (c) for Mr. Kennedy, the difference between the price paid for Worldwide's Common B shares and the fair market value of the Common B shares of $983,950.

(5)
Represents amounts which consist of: (a) imputed income related to company cars for Mr. Lobeck ($8,256), Mr. Parell ($6,948), Mr. Kennedy ($7,752), Mr. Schwartz ($9,960) and Mr. Best ($9,394); (b) imputed income on long-term disability insurance premiums for Mr. Lobeck ($5,607), Mr. Parell ($3,807); Mr. Kennedy ($1,454); Mr. Schwartz ($5,575) and Mr. Best ($1,454).

(6)
Represents interest earnings on non-qualified deferred compensation plans for Mr. Lobeck ($4,033), Mr. Parell ($3,227), Mr. Kennedy ($2,823), Mr. Schwartz ($9,954) and Mr. Best ($2,217), and amounts paid for relocation benefits to Mr. Kennedy ($35,342) and Mr. Schwartz ($17,145).

(7)
Amounts deferred under the non-qualified deferred compensation plan for Mr. Lobeck ($283,011), Mr. Parell ($226,408), Mr. Kennedy ($198,107), Mr. Schwartz ($192,447) and Mr. Best ($155,655), and amounts paid for relocation to Mr. Kennedy ($59,561), Mr. Schwartz ($11,751) and Mr. Best ($34,937).

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Employment agreements, termination of employment and change of control agreements

William E. Lobeck.     Mr. Lobeck's employment agreement extends through December 31, 2008, unless his employment agreement is terminated earlier as discussed below. His agreement provides for an annual base salary of $500,001, which is reviewed annually and may be increased by our board of directors. Mr. Lobeck is eligible to receive an annual bonus of between 75% and 100% of his base salary based on the achievement by us of worldwide and U.S. targets derived from the annual business plan presented by management and approved by our board of directors but may also receive bonuses in the discretion of our board of directors. In the event of Mr. Lobeck's termination of employment due to his death or "disability," termination of his employment by us with or without "cause," his resignation with or without "good reason," in each case as such terms are defined in his employment agreement, or upon expiration of the term of his employment agreement, Mr. Lobeck will be entitled to his base salary and benefits accrued through the termination date, any unpaid bonus relating to the year prior to the year of his termination and accrued but unpaid expenses. In the case of termination based on death or disability, Mr. Lobeck will also be entitled to a pro-rated bonus based on the bonus received by Mr. Lobeck for the year prior to his termination for death or disability. If we terminate Mr. Lobeck without cause or if he terminates his employment for good reason, unless Mr. Lobeck elects not to be subject to the non-competition provision contained in his employment agreement, Mr. Lobeck is entitled to receive, in addition to the payments described above, upon his execution without revocation of a release, his base salary for a period of the greater of the remainder of the original term of his employment agreement or twelve months, and aggregate bonus payments equal to the bonus amount he received for the prior fiscal year, payable in twelve equal monthly installments.

Mr. Lobeck's employment agreement includes non-competition and non-solicitation provisions whereby he may not compete with us if he is terminated without cause or if he resigns with good reason or solicit our employees and customers for twelve months following his termination of employment. If Mr. Lobeck elects not to be subject to the non-competition provision, he will receive only salary and benefits accrued through the termination date, any unpaid bonus relating to the year prior to the year of his termination and accrued but unpaid expenses. Under his employment agreement, Mr. Lobeck may elect to resign his position as our chief executive officer and assume the position of chairman of our board of directors, at a salary equal to 80% of his base salary at the time of such election.

Jeffry J. Parell.     Mr. Parell's employment agreement extends through December 31, 2008, unless his employment agreement is terminated earlier as discussed below. His agreement provides for an annual base salary of $400,000, which will be reviewed annually and may be increased by our chief executive officer and our board of directors. Mr. Parell is eligible to receive an annual bonus of between 75% and 100% of his base salary based on the achievement by us of worldwide and U.S. targets derived from the annual business plan presented by management and approved by our board of directors but may also receive bonuses in the discretion of our board of directors. In the event of Mr. Parell's termination of employment due to his death or "disability," termination of his employment by us with or without "cause," or his resignation with or without "good reason," in each case as such terms are defined in his employment agreement, Mr. Parell will be entitled to salary and benefits accrued through the termination date, any unpaid bonus relating to the year prior to the year

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of his termination and accrued but unpaid expenses. If we terminate Mr. Parell's employment without cause or if he terminates his employment for good reason, in addition to the payments described above, upon his execution without revocation of a release, Mr. Parell is entitled to receive his base salary for a period of twelve months, payment for accrued unused vacation days and reimbursement of COBRA costs for up to twelve months. Mr. Parell's employment agreement includes non-competition and non-solicitation provisions that prohibit him from competing with us or soliciting our employees and customers for twelve months after the termination of his employment.

Thomas C. Kennedy.     Mr. Kennedy's employment agreement extends through December 31, 2008, unless his employment agreement is terminated earlier as discussed below. His agreement provides for an annual base salary of $350,000, which will be reviewed annually and may be increased by our chief executive officer and our board of directors. Mr. Kennedy is eligible to receive an annual bonus up to 75% of his base salary based on the achievement by us of worldwide targets derived from the annual business plan presented by management and approved by our board of directors but may also receive bonuses in the discretion of our board of directors. In the event of Mr. Kennedy's termination of employment due to his death or "disability," termination of his employment by us with or without "cause," or his resignation with or without "good reason," in each case as such terms are defined in his employment agreement, Mr. Kennedy will be entitled to salary and benefits accrued through the termination date, any unpaid bonus relating to the year prior to the year of his termination and accrued but unpaid expenses. If we terminate Mr. Kennedy without cause or if he terminates his employment for good reason, Mr. Kennedy is entitled to receive, in addition to the payments described above, upon his execution without revocation of a release, his base salary for twelve months, payment for accrued unused vacation days and reimbursement of COBRA costs for up to twelve months. Mr. Kennedy's employment agreement includes non-competition and non-solicitation provisions that prohibit him from competing with us or soliciting our employees and customers for twelve months after the termination of his employment.

Howard D. Schwartz.     Mr. Schwartz resigned from our company effective March 31, 2006. Mr. Schwartz was subject to a four-year employment agreement with us, under which he was paid an annual base salary of $340,000 and was eligible to receive an annual bonus based on the achievement by us of worldwide and U.S. targets derived from the annual business plan presented by management and approved by our board of directors. Under his separation agreement, Mr. Schwartz received salary and benefits accrued through the termination date, any unpaid bonus relating to the year prior to the year of his termination and accrued but unpaid expenses. In addition, Mr. Schwartz received or will receive the following severance benefits: (i) an amount equal to one and one-half times his base salary, payable in eighteen equal monthly installments, his bonus for the year prior to his termination of employment and a payment in the amount of $100,000; (ii) reimbursement of COBRA costs for up to eighteen months; (iii) a pro-rated payout under our long term incentive plan for the 2005 plan year equal to 15 / 36 of the total amount he would have been eligible to receive if he had remained employed with us through December 31, 2007; (iv) an automobile and expenses related to the automobile for a period of eighteen months; (v) relocation benefits; and (vi) outplacement services for a period of twelve months.

Mr. Schwartz is subject to non-competition and non-solicitation restrictions for twelve months following his resignation.

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Tyler A. Best.     Mr. Best's employment agreement extends through December 31, 2008, unless his employment agreement is terminated earlier as discussed below. His agreement provides for an annual base salary of $275,000, which will be reviewed annually and may be increased by our chief executive officer and our board of directors. Mr. Best is eligible to receive an annual bonus up to 50% of his base salary based on the achievement by us of worldwide and U.S. targets derived from the annual business plan presented by management and approved by our board of directors but may also receive bonuses in the discretion of our board of directors. In the event of Mr. Best's termination of employment due to his "death" or "disability," termination of his employment by us with or without "cause," or his resignation with or without "good reason," in each case as such terms are defined in his employment agreement, Mr. Best will be entitled to salary and benefits accrued through the termination date, any unpaid bonus relating to the year prior to the year of his termination and accrued but unpaid expenses. If we terminate Mr. Best without cause or if he terminates his employment for good reason, Mr. Best is entitled to receive, in addition to the payments described above, upon execution without revocation of a release, his base salary for twelve months, payment for accrued unused vacation days and reimbursement of COBRA costs for up to twelve months. Mr. Best's employment agreement includes non-competition and non-solicitation provisions whereby he may not compete with us or solicit our employees and customers for twelve months after the termination of his employment.

Equity incentive plan

Prior to the consummation of this offering, we intend to adopt the 2006 Equity Incentive Plan. The plan is designed to motivate and retain certain individuals who are responsible for achieving our long-term performance goals and covers our employees, directors and consultants. The plan provides for the grant of nonqualified stock options and incentive stock options for common stock and stock appreciation rights or other stock-based awards to participants selected by our board of directors or a committee of the board of directors in its capacity as administrator of the plan.             shares of our common stock have been reserved for awards under the plan. The terms and conditions of awards are determined by the administrator for each grant and are to be evidenced by an award agreement.

Unless otherwise determined by the administrator or as otherwise set forth in an award agreement, all unvested awards will vest upon a "Liquidity Event" and the administrator may determine the treatment of all exercisable or vested awards, in its sole discretion. A "Liquidity Event" is defined as:

    if any person who is not a "permitted holder" (defined as Cerberus Capital Management, L.P. or any of its affiliates, William E. Lobeck or other management shareholders) becomes the beneficial owner, directly or indirectly, of 50% or more of the combined voting power of our then issued and outstanding securities, or

    the sale, transfer or other disposition of all or substantially all of our business and assets, whether by sale of assets, merger or otherwise (determined on a consolidated basis) to a person other than a "permitted holder."

Long term incentive plan

The Long Term Incentive Plan is a rolling three year performance plan designed to reward participants for outstanding performance measured by global performance metrics established

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by the compensation committee of the board of directors. Achievement during the three year cycle is assessed within a pre-determined matrix using target performance levels for each performance metric. Performance levels may change for each performance cycle. Participants within the plan have target value awards for each cycle. The actual value of the awards is determined by the actual performance levels during the cycle versus the target performance level within the matrix.

Management lock-up agreements

Prior to the consummation of this offering, each of our executive officers who owns shares of our common stock immediately prior to the consummation of this offering will enter into a lock-up agreement with us, under which they will agree, subject to certain limited exceptions, not to sell or otherwise transfer the shares of our common stock beneficially owned by such executive officer for the two-year period commencing on the date that this offering is consummated without our prior written consent. Pursuant to these agreements, if Cerberus and its affiliates sell any of their shares of common stock, these executive officers will be entitled to sell the same percentage of their shares as are sold by Cerberus and its affiliates. The shares owned by trusts for the benefit of Mr. Lobeck's children are not subject to this two-year lock up agreement.

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Principal and selling stockholders

The following table sets forth information regarding the beneficial ownership of our common stock, after giving effect to the Incorporation Transactions and the Offering Transactions by:

BROKERAGE PARTNERS