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The following is an excerpt from a DEF 14A SEC Filing, filed by BEACON ROOFING SUPPLY INC on 1/7/2008.
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BEACON ROOFING SUPPLY INC - DEF 14A - 20080107 - COMPENSATION_COMMITTEE

Report of the Compensation Committee

        The Compensation Committee has reviewed and discussed the "Compensation Disclosure and Analysis" section of this proxy statement with management, including our Chief Executive Officer, Chief Financial Officer and General Counsel. Based on this review and discussion, the Compensation Committee recommended to the board of directors that the "Compensation Discussion and Analysis" section be included in this proxy statement.

James J. Gaffney, Chairman                        Stuart A. Randle                        Wilson B. Sexton

26


Executive Compensation

        The following table sets forth all compensation earned during the fiscal year ended September 30, 2007, by each person who served as our Chief Executive Officer and our Chief Financial Officer during the year, and by our other executive officers who were serving as executive officers at the end of the fiscal year, collectively referred to as our named executive officers.

Summary Compensation Table

Name and Principal Position

  Fiscal
Year

  Salary
($)

  Bonus(1)
($)

  Option
Awards
($)(2)

  All
Other
Compensation
($)(3)

  Total
($)

Robert R. Buck
Chairman & Chief Executive Officer
  2007   515,000   180,250   234,536   36,310   966,096

David R. Grace
Senior Vice President, Chief
Financial Officer

 

2007

 

363,000

 

100,000

 

184,578

 

33,972

 

681,550

Ross D. Cooper
Senior Vice President, General
Counsel and Secretary

 

2007

 

330,000

 

80,500

 

117,930

 

19,287

 

547,717

C. Eric Swank
Senior Vice President

 

2007

 

286,000

 

27,500

 

126,668

 

44,630

 

484,798

(1)
The bonus amounts disclosed above for fiscal 2007 were paid during the first quarter of fiscal 2008.

(2)
Reflects the dollar amount recognized for financial statement reporting purposes with respect to stock options for fiscal 2007, in accordance with Statement of Financial Accounting Standards No. 123R, "Share-Based Payments" ("SFAS 123R"). Amounts therefore include expense related to stock options granted in and prior to fiscal 2007, as applicable, disregarding estimates of forfeitures related to service-based vesting conditions. Assumptions used in calculating these amounts are included in Note 2 of our audited financial statements included in our Annual Report on Form 10-K for fiscal 2007.

(3)
Includes Company matching and profit-sharing contributions to the 401(k) plan, auto allowances and fuel cost reimbursements. For Mr. Swank, also includes the value of a Company-sponsored trip for certain employees and customers of The Roof Center, the Company's mid-Atlantic region.

27


        The following table sets forth the individual grants of plan-based awards to the named executive officers during the fiscal year ended September 30, 2007.

Grants of Plan-Based Awards

 
   
  Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards (a)

  All Other
Awards:
Securities
Underlying
Options (b)
(#)

   
   
 
   
  Exercise or
Base Price of
Option Awards
($/sh)

  Grant Date
Fair Value of
Option Awards
($)

Name

  Grant Date
  Threshold
($)

  Target
($)

  Maximum
($)

Robert R. Buck   October 24, 2006   0   257,500   515,000   40,000   22.46   413,048

David R. Grace

 

October 24, 2006

 

121,550

 

143,000

 

217,800

 

21,000

 

22.46

 

216,850

Ross D. Cooper

 

October 24, 2006

 

97,750

 

115,000

 

198,000

 

10,000

 

22.46

 

103,262

C. Eric Swank

 

October 24, 2006

 

46,750

 

55,000

 

88,000

 

20,000

 

22.46

 

206,524

(a)
The non-equity incentive plan awards above were based on Company-wide EBITDA for Mr. Buck, primarily Company-wide income before taxes for Mr. Grace and Mr. Cooper, and primarily The Roof Center's income before taxes for Mr. Swank. The thresholds were not met and therefore these payments were not made. However, discretionary bonus amounts were awarded as described above under "Annual Cash Incentives."

(b)
These options vest ( i.e. , become exercisable) in three equal parts on the first, second and third anniversaries of the grant date and expire ten years from the date of grant.

28


        The following table sets forth details of all of the outstanding equity awards of the named executive officers as of September 30, 2007:

Outstanding Equity Awards at Fiscal Year-End(1)

 
  Option Awards
Name

  Number of
Securities
Underlying
Options
(#)
Exercisable

  Number of
Securities
Underlying
Options
(#)
Unexercisable

  Option
Exercise
Price
($)

  Option
Expiration
Date

Robert R. Buck   462,366
12,500
0
  0
25,000
40,000
  2.33
18.64
22.46
  October 20, 2013
November 2, 2015
October 24, 2016

David R. Grace

 

71,663
75,075
41,633
22,000
7,000
0

 

0
0
0
11,000
14,000
21,000

 

1.34
1.87
2.33
11.87
18.64
24.46

 

March 1, 2012
January 3, 2013
January 20, 2014
November 4, 2014
November 2, 2015
October 24, 2016

Ross D. Cooper

 

8,334
0

 

16,666
10,000

 

22.167
22.46

 

July 5, 2016
October 24, 2016

C. Eric Swank

 

6,000
5,500
0

 

3,000
11,000
20,000

 

11.87
18.64
22.46

 

November 4, 2014 November 2, 2015
October 24, 2016

(1)
All options were granted on the date which is ten years prior to the expiration date for such grants. All options vest in three equal parts on the first, second and third anniversary of the date of grant.

        No stock options were exercised by our named executive officers during the fiscal year ended September 30, 2007.

29


Potential Payments Upon Termination or Change-in-Control

Employment Contract

    Robert R. Buck

        On October 25, 2007, we extended the employment agreement with Robert Buck, our Chairman and CEO, through November 30, 2008. It provides for a base salary of $550,000 for fiscal year 2008. Our board reviews his base salary each year. Mr. Buck's base salary for 2007 had been set by the board at $515,000.

        Mr. Buck's employment agreement also entitles him to an annual bonus of up to 100% of base salary, depending on whether we reach the performance target that the board sets near the beginning of each fiscal year. The performance target for fiscal 2007 was based on EBITDA and will be based on EBITDA for fiscal 2008. The bonus varies from 0% of base salary (if we achieve 85% or less of the target for that fiscal year) to 100% of base salary (if we achieve 115% or more of the target for that year). In between 85% of the target and 115% of the target, the bonus varies on a straight line basis. Mr. Buck may receive discretionary incentive payments if the Compensation Committee determines that his individual performance and/or market conditions justify such payments.

        Mr. Buck also receives a $1,000 per month car allowance and reimbursement of fuel costs. Under his employment agreement, Mr. Buck is entitled to severance equal to 12 months base salary if we terminate his employment without cause, or if we are not willing to renew his employment agreement at the end of the term. The employment agreement limits Mr. Buck's ability to compete with us for 18 months after his employment ends. If Mr. Buck's employment was terminated without cause on September 30, 2007, he would have received severance of $515,000.

Stock Option Agreements

        Pursuant to stock option agreements with our named executive officers, all of their outstanding stock options will vest upon death or disability and in the event of a change in control. Based on the price of the Company's stock of $10.22 as of September 30, 2007, there would have been no value of unvested stock options as of that date.

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