UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

     Filed by the Registrant þ
     Filed by a Party other than the Registrant o
     Check the appropriate box:
     o     Preliminary Proxy Statement
     o     Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
     þ     Definitive Proxy Statement
     o     Definitive Additional Materials
     o     Soliciting Material Pursuant to Section 240.14a-12

Wabash National Corporation

 

  Payment of Filing Fee (Check the appropriate box):

     þ     No fee required.
     o     Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

 

     (1) Title of each class of securities to which transaction applies:

     (2) Aggregate number of securities to which transaction applies:

     (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the
          amount on which the filing fee is calculated and state how it was determined):

     (4) Proposed maximum aggregate value of transaction:

     (5) Total fee paid:

     o     Fee paid previously with preliminary materials.

     o     Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

     (1) Amount previously paid:

     (2) Form, Schedule or Registration Statement No.:

     (3) Filing Party:

     (4) Date Filed:

 

WABASH NATIONAL CORPORATION

1000 Sagamore Parkway South

Lafayette, Indiana 47905

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held On May 15, 2008

 

To the Stockholders of Wabash National Corporation:

 

The 2008 Annual Meeting of Stockholders of Wabash National Corporation will be held at the Holiday Inn Select City Centre located at 515 South Street, Lafayette, Indiana 47901 on Thursday, May 15, 2008, at 10:00 a.m. local time for the following purposes:

 

 

Each outstanding share of Wabash National Corporation Common Stock (NYSE:WNC) entitles the holder of record at the close of business on April 1, 2008, to receive notice of and to vote at the Annual Meeting or any adjournment or postponement of the Annual Meeting. Shares of our Common Stock can be voted at the Annual Meeting only if the holder is present in person or by valid proxy. Management cordially invites you to attend the Annual Meeting.

 

IF YOU PLAN TO ATTEND

 

Please note that space limitations make it necessary to limit attendance to stockholders and one guest. Registration and seating will begin at 9:00 a.m. Stockholders holding stock in brokerage accounts (“street name” holders) will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date. Cameras, recording devices and other electronic devices will not be permitted at the meeting.

 

By Order of the Board of Directors

 

LAWRENCE M. CUCULIC

Senior Vice President, General Counsel and

Corporate Secretary

 

April 15, 2008

 

 

 

 

WABASH NATIONAL CORPORATION

1000 Sagamore Parkway South

Lafayette, Indiana 47905

 

PROXY STATEMENT
Annual Meeting of Stockholders on May 15, 2008

 

This Proxy Statement is furnished on or about April 15, 2008 to stockholders of Wabash National Corporation (hereinafter, “we” “us” “Company” and “Wabash”), 1000 Sagamore Parkway South, Lafayette, Indiana 47905, in connection with the solicitation by our Board of Directors of proxies to be voted at the Annual Meeting of Stockholders to be held at the Holiday Inn Select City Centre located at 515 South Street, Lafayette, Indiana 47901, on Thursday, May 15, 2008 at 10:00 a.m. local time, (the “Annual Meeting”) and at any adjournments or postponements of the Annual Meeting.

 

ABOUT THE MEETING

 

What is The Purpose of the Annual Meeting?

 

At the Annual Meeting, stockholders will act upon the matters outlined in the accompanying Notice of Annual Meeting of Stockholders. In addition, our management will report on our performance during 2007 and respond to questions from our stockholders.

 

Who is Entitled to Vote?

 

Only stockholders of record at the close of business on April 1, 2008 (the “Record Date”) are entitled to receive notice of the Annual Meeting and to vote the shares of Common Stock that they held on the Record Date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting. Each share entitles its holder to cast one vote on each matter to be voted upon.

 

A list of stockholders of record as of the Record Date will be available for inspection during ordinary business hours at our offices located at 1000 Sagamore Parkway South, Lafayette, Indiana 47905, from May 5, 2008 to the date of our Annual Meeting. The list will also be available for inspection at the Annual Meeting.

 

Who can Attend the Annual Meeting?

 

All stockholders as of the close of business on the Record Date, or their duly appointed proxies, may attend the Annual Meeting.

 

Please note that if you hold your shares in “street name” (that is, through a broker or other nominee), you will need to bring a copy of a brokerage statement reflecting your stock ownership as of the Record Date and check in at the registration desk at the Annual Meeting. Alternatively, to vote, you may contact the person in whose name your shares are registered and obtain a proxy from that person and bring it to the Annual Meeting.

What Constitutes a Quorum?

 

The presence at the Annual Meeting, in person or by valid proxy, of the holders of a majority of the shares of our Common Stock outstanding on the Record Date will constitute a quorum, permitting us to conduct our business at the Annual Meeting. As of the Record Date, 30,708,781 shares of Common Stock, held by 1,012 stockholders of record, were outstanding and entitled to vote at the Annual Meeting. Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of shares considered to be present at the Annual Meeting.

 

How do I Vote?

 

You can vote on matters to come before the Annual Meeting in the following two ways:

 

 

What if I Vote and Then Change my Mind?

 

You may revoke your proxy at any time before it is exercised by:

 

 

Your last vote will be the vote that is counted.

 

What are The Board’s Recommendations?

 

The Board recommends that you vote FOR election of the nominated slate of directors (see page 5), and FOR ratification of the appointment of our auditors (see page 32). Unless you give other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the Board’s recommendation. With respect to any other matter that properly comes before the meeting, the proxy holders will vote in their own discretion.

 

What Vote is Required?

 

Our Bylaws provide that for the election of directors in uncontested elections, such as the one at the Annual Meeting, a nominee must receive a majority of the votes cast; accordingly, to be elected there must be more votes cast “FOR” a nominee than there are votes cast “AGAINST” such nominee.

 

The ratification of the appointment of Ernst & Young LLP (“E&Y”) as our independent registered public accounting firm for the year ending December 31, 2008 requires the affirmative vote of a majority of the shares of Common Stock present and entitled to vote at the Annual Meeting.

 

Abstentions will have no effect on the election of the directors, but will have the same effect as a vote against the vote for the ratification of the appointment of E&Y.

 

If you hold your shares in “street name” through a broker or other nominee, your broker or nominee may elect to exercise voting discretion with respect to the election of directors. Under New York Stock Exchange Rules, the proposals to elect directors and to ratify the appointment of our auditors are considered “discretionary” items. This means that brokerage firms may vote in their discretion on the election of directors and the ratification of our auditors on behalf of clients who have not furnished voting instructions at least 15 days before the date of the Annual Meeting. If you do not give your broker or nominee specific instructions, your broker or nominee may elect not to exercise its discretion on the election of directors and the ratification of our auditors, in which case your shares will not be voted

on those matters. Shares for which the broker does not exercise its discretion or for which it has no discretion, so-called broker “non-votes,” will be counted in determining whether there is a quorum but will have no effect on the proposals scheduled for the Annual Meeting.

 

Who will Bear the Costs of this Proxy Solicitation?

 

We will bear the cost of solicitation of proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of our outstanding Common Stock. We may solicit proxies by mail, personal interview, telephone or via the Internet through our officers, directors and other management employees, who will receive no additional compensation for their services.

 

PROPOSAL 1

 

Election of Directors

 

Our Bylaws provide that our Board of Directors, or the Board, shall be comprised of not less than three nor more than nine directors, with the exact number to be fixed by resolution of the Board. The Board has currently fixed the authorized number of directors at eight directors effective at our Annual Meeting.

 

At the Annual Meeting, eight directors are to be elected, each of whom shall serve for a term of one year or until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. Proxies representing shares held on the Record Date that are returned duly executed will be voted, unless otherwise specified, in favor of the eight nominees for the Board named below. In accordance with our Bylaws, each nominee, as a condition to nomination, has submitted to the Nominating and Corporate Governance Committee an irrevocable resignation from the Board that is effective only in the event a nominee does not receive the required vote of our stockholders to be elected to the Board and the Board accepts the nominee’s resignation. Each of the nominees has consented to be named in this Proxy Statement and to serve on the Board if elected. It is not anticipated that any nominee will become unable or unwilling to accept nomination or election, but, if that should occur, the persons named in the proxy intend to vote for the election in his or her stead, such other person as the Nominating and Corporate Governance Committee may recommend to the Board.

 

Corporate Governance Matters

 

Our Board has adopted Corporate Governance Guidelines (the “Guidelines”) and a Code of Business Conduct and Ethics (the “Code of Ethics”). The Guidelines set forth a framework within which the Board oversees and directs the affairs of Wabash. The Guidelines cover, among other things, the composition and functions of the Board, director independence, director stock ownership, management succession and review, Board committees, the selection of new directors, and director responsibilities and duties.

 

The Code of Ethics covers, among other things, compliance with laws, rules and regulations (including insider trading), conflicts of interest, corporate opportunities, confidentiality, protection and use of company assets, and the reporting process for any illegal or unethical conduct. The Code of Ethics is applicable to all of our directors, officers, and employees, including our Chief Executive Officer and Chief Financial Officer. The Code of Ethics includes provisions that are specifically applicable to our Chief Financial Officer and senior financial officers (as defined in the Code of Ethics).

 

Any waiver of the Code of Ethics for our directors or executive officers, including our Chief Executive Officer and Chief Financial Officer, may be made only by our Board or a Board committee consisting solely of disinterested and independent directors and will be promptly disclosed and posted on our website as required by law or the listing standards of the New York Stock Exchange.

 

The Guidelines and Code of Ethics are available on the Company Info/Investors page of our website at www.wabashnational.com and are available in print without charge by writing to: Wabash National Corporation, Attention: Corporate Secretary, P.O. Box 6129, Lafayette, Indiana 47903.

Related Persons Transactions

 

Related Persons Transactions Policy.  Our Board has adopted a Related Persons Transactions Policy. The Related Persons Transactions Policy sets forth our policy and procedures for review, approval and monitoring of transactions in which the Company and “related persons” are participants. Related persons include directors, nominees for director, officers, stockholders owning five percent or greater of our outstanding stock, and any immediate family members of the aforementioned. The Related Persons Transactions Policy is administered by a committee designated by the Board, which is currently the Audit Committee.

 

The Related Persons Transactions Policy covers any related person transaction that meets the minimum threshold for disclosure in our annual meeting proxy statement under the relevant Securities and Exchange Commission (the “SEC”) rules, which is currently transactions involving amounts exceeding $120,000 in which a related person has a direct or indirect material interest. Related person transactions must be approved, ratified, rejected or referred to the Board by the Audit Committee. The policy provides that as a general rule all related person transactions should be on terms reasonably comparable to those that could be obtained by the Company in arm’s length dealings with an unrelated third party. However, the policy takes into account that in certain cases it may be impractical or unnecessary to make such a comparison. In such cases, the transaction may be approved in accordance with the provisions of the Delaware General Corporation Law.

 

The Related Persons Transaction Policy provides that management or the affected director or officer will bring any relevant transaction to the attention of the committee. If a director is involved in the transaction, he or she will be recused from all discussions and decisions about the transaction, to the extent practicable. The transaction must be approved in advance whenever practicable, and if not practicable, must be ratified as promptly as practicable. All related person transactions will be disclosed to the full Board and in the Company’s proxy statement and other appropriate filings as required by the rules and regulations of the SEC and the New York Stock Exchange.

 

On January 1, 2007, we entered into an executive director agreement with William P. Greubel in connection with his retirement as our Chief Executive Officer. The agreement provides for Mr. Greubel to remain as our employee in order to provide additional services to us, including representing the Company at important events, strategic planning, and assisting with current and new account development. The agreement superseded his previous employment agreement and extends through January 1, 2009, unless earlier terminated. See “Director Compensation” below for a further discussion of the benefits to Mr. Greubel under the executive director agreement.

 

Director Independence

 

Under the rules of the New York Stock Exchange, the Board must affirmatively determine that a director has no material relationship with the Company in order for the director to be considered independent. As permitted by New York Stock Exchange rules, to assist the Board in making this determination, our Board has adopted categorical standards of independence. The Board has determined that, among other considerations, relationships are not material and would not impair a director’s independence when the aggregate amount of payments by us to, and to us from, any company of which a director is an executive officer or employee or of which a family member of a director is an executive officer, are less than the greater of $1 million or 2% of such other company’s consolidated gross revenues in any single fiscal year.

 

Our Board of Directors undertook its annual review of director independence in February 2008. The purpose of the review was to determine whether any such relationship or transaction existed that was inconsistent with a determination that the director or director nominee is independent. The Board considered transactions and relationships between each director and director nominee, and any member of his or her immediate family, and Wabash and its subsidiaries and affiliates. The Board also considered whether there were any transactions or relationships between directors or director nominees or any member of their immediate families (or any entity of which a director or director nominee or an immediate family member is an executive officer, general partner or significant equity holder) and members of our senior management or their affiliates. Finally, the Board considered charitable contributions to organizations with which directors or director nominees had relationships.

As a result of this review, the Board of Directors affirmatively determined that all of the directors nominated for election at the Annual Meeting are independent of Wabash and its management within the meaning of the rules of the New York Stock Exchange and the categorical standard described above, with the exception of Richard J. Giromini and William P. Greubel, who are employees of Wabash National Corporation.

 

The executive director agreement with Mr. Greubel requires that the Company use commercially reasonable efforts to cause Mr. Greubel to be nominated for election to our Board at the 2008 Annual Meeting of Stockholders.

 

On May 24, 2007, Dr. Martin Jischke assumed the position of Chairman of the Board. Because Dr. Jischke was an independent director, we no longer had a need for a separately designated Lead Director, which position had been held by Mr. David C. Burdakin since our 2006 Annual Meeting of Stockholders. Among his other responsibilities, our Chairman of the Board presides at the executive sessions of our independent directors and facilitates communication between our independent directors and management, which were responsibilities of our Lead Director prior to the Dr. Jischke becoming Chairman of the Board. As Chairman, Dr. Jischke also chaired each executive session of the independent directors.

 

Director Not Standing for Re-election

 

Mr. David C. Burdakin has notified the Board that he will resign as a director effective the day of the Annual Meeting. Mr. Burdakin has been a director since 2002 and was our Lead Director since our 2006 Annual Meeting. Mr. Burdakin and his leadership have been important to our success.

 

Information on Directors Standing for Election

 

The name, age, business experience, and directorships of each nominee for director, during at least the last five years, are set forth in the table below. For additional information concerning the nominees for director, including stock ownership and compensation, see “Director Compensation” and “Beneficial Ownership of Common Stock,” which follow:

 

 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES LISTED ABOVE.

 

Meetings of The Board of Directors and its Committees

 

Information concerning the Board and the four standing committees maintained by the Board is set forth below. With the exception of the Executive Committee, Board committees currently consist only of directors who are not employees of the Company and who are “independent” within the meaning of the listing standards of the New York Stock Exchange.

 

During 2007, our Board held seven meetings. All of our directors attended at least 75% of all Board meetings and meetings of committees on which they served. Our Board strongly encourages all of our directors to attend our Annual Meeting. In 2007, all of our directors attended the Annual Meeting.

 

The Board has four standing committees: the Nominating and Corporate Governance Committee; the Compensation Committee; the Executive Committee; and the Audit Committee. The charters for the Nominating and Corporate Governance, Compensation, and Audit Committees can be accessed electronically from the Company Info/Investors page of our website at www.wabashnational.com or by writing to us at Wabash National Corporation, Attention: Corporate Secretary, P.O. Box 6129, Lafayette, Indiana 47903.

 

The following table indicates each standing committee or committees on which our directors served in 2007 and all were effective as of the 2007 Annual Meeting:

 

 

Effective following the 2008 Annual Meeting, if all of the nominees for election at the Annual Meeting are elected, the directors serving on the Nominating and Corporate Governance Committee will be Messrs. Kelly, Magee and Stewart; the directors serving on the Compensation Committee will be Dr. Jischke, Ms. Kushner, and Messrs. Kelly, Magee, Sorensen, and Stewart; the directors serving on the Audit Committee will be Dr. Jischke, Ms. Kushner and Mr. Sorensen; and the directors serving on the Executive Committee will be Dr. Jischke, Ms. Kushner, and Messrs. Giromini, Magee, and Stewart.

Nominating and Corporate Governance Committee

 

The Nominating and Corporate Governance Committee, which we refer to as the Nominating Committee, met four times during 2007. The Board of Directors has determined that each member of the Nominating Committee is “independent” within the meaning of the rules of the New York Stock Exchange. The Nominating Committee’s responsibilities include:

 

 

Compensation Committee

 

The Compensation Committee met seven times during 2007. The Board has determined that each member of the Compensation Committee is “independent” within the meaning of the rules of the New York Stock Exchange. The Compensation Committee’s responsibilities include:

 

 

The Compensation Committee is responsible for determining our compensation policies for executive officers and for the administration of our equity and incentive plans, including our 2007 Omnibus Incentive Plan. The Compensation Committee works closely with our Senior Vice President of Human Resources in setting the compensation for our other executive officers. In addition, our Chief Executive Officer makes recommendations to the Compensation Committee for the other executive officers on the amount of base salary, target cash awards pursuant to our short-term incentive plan and target equity awards pursuant to our long-term incentive plan. Our Chief Executive Officer also discusses with and makes recommendations to the Compensation Committee performance targets for our short-term incentive plan and our long-term incentive plan before they are established and upon conclusion of the performance period. For purposes of that plan, the personal performance goals for the other executive officers are set by our Chief Executive Officer, who then reports to the Compensation Committee on, and makes recommendations as to, the achievement of those goals. For a discussion of our Chief Executive Officer’s role and recommendations with respect to compensation decisions affecting our Named Executive Officers, as set forth in the Summary Compensation Table below, during 2007, see the Compensation Discussion and Analysis below.

 

The Compensation Committee has historically engaged a compensation consultant. In 2007, Towers Perrin served as the consultant. At the request of the Compensation Committee, Towers Perrin worked with our Chief Executive Officer and Senior Vice President of Human Resources to conduct a competitive market assessment, which included a review of the responsibilities of our executive officers. Towers Perrin presented the Compensation Committee with the results of this review and participated in the discussion and review that was conducted by the Committee on recommendations made by our Chief Executive Officer. Towers Perrin, however, did not actually determine or recommend the compensation paid to our executive officers, including the Named Executive Officers during 2007.

 

Pursuant to the Compensation Committee’s charter, the Committee may form and delegate to subcommittees of the Committee its responsibilities. To date, however, the Compensation Committee has not formed or delegated any of its responsibilities to any subcommittees.

Audit Committee

 

The Board has established a separately-designated standing Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit Committee met nine times during 2007. The Board has determined that each member of the Audit Committee is “independent” within the meaning of the rules of the New York Stock Exchange. The Board of Directors also determined that Ms. Kushner and Mr. Sorensen are “audit committee financial experts” as defined by the SEC and that they have accounting and related financial management expertise within the listing standards of the New York Stock Exchange.

 

The Audit Committee’s responsibilities include:

 

 

Executive Committee

 

The Executive Committee did not meet during 2007. The Executive Committee is responsible for exercising the authority of the Board of Directors, to the extent permitted by law and our Bylaws, in the intervals between meetings of the Board when an emergency issue arises or when scheduling makes it difficult to convene all directors.

 

Director Nomination Process

 

The Nominating Committee will consider stockholder recommendations for director nominees sent to the Nominating and Corporate Governance Committee, Attention: Corporate Secretary, Wabash National Corporation, P.O. Box 6129, Lafayette, Indiana 47903. Stockholder recommendations for director nominees should include:

 

 

To submit a candidate as a nominee for director for an upcoming annual stockholder meeting, it is necessary that you notify us not less than 90 days nor more than 120 days before the first anniversary of the date of the preceding year’s annual stockholders meeting. Thus, in order for any such nomination to be considered by us for the 2009 annual stockholders meeting, it must be received no earlier than January 15, 2009, but no later than February 14, 2009. Upon receipt by the Corporate Secretary of a stockholder notice of a director nomination, the Corporate Secretary will notify the stockholder that the notice has been received and will be presented to the Nominating Committee for review. Stockholders’ nominees that comply with these procedures will receive the same consideration as other candidates identified by or to the Nominating Committee.

 

Director Qualifications.  To be considered by the Nominating Committee, a director nominee must meet the following minimum criteria:

 

 

Identifying and Evaluating Nominees for Directors.  The Nominating Committee, with the assistance of our General Counsel and, as needed, a retained search firm, will screen candidates, perform reference checks, prepare a biography for each candidate for the Nominating Committee to review and conduct interviews. The Nominating Committee, the Chairman, the Lead Director and our Chief Executive Officer will interview candidates that meet the criteria, and the Nominating Committee will recommend to the Board of Directors nominees that best suit the Board’s needs.

 

Communications with the Board of Directors

 

Stockholders or other interested persons wishing to make known complaints or concerns about our accounting, internal accounting controls or auditing matters, or bring other concerns to the Board or the Audit Committee, or to otherwise communicate with our independent directors as a group or the entire Board, individually or as a group, may do so by sending an email to board@wabashnational.com or auditcommittee@wabashnational.com, or by writing to them care of Wabash National Corporation, Attention: General Counsel, P.O. Box 6129, Lafayette, Indiana 47903.

 

Pursuant to the direction of the Board, all correspondence will be received and processed by the General Counsel’s office. You will receive a written acknowledgment from the General Counsel’s office upon receipt of your written correspondence. You may report your concerns anonymously or confidentially. All communications received in accordance with the above procedures will be reviewed initially by the General Counsel, who will relay all such communications to the appropriate director, directors or committee.

Director Compensation

 

Directors who are not our employees are compensated for their service as a director as shown in the chart below:

 

Schedule of Director Fees
December 31, 2007

 

 

 

 

The following table summarizes the compensation paid to our directors during 2007, other than Mr. Giromini, whose compensation is discussed below under Executive Compensation.

 

Director Compensation for Year-End
December 31, 2007

 

 

 

 

 

		Vested				Unvested
David C. Burdakin			15,339				500
William P. Greubel			5,243				51,027
Martin C. Jischke			15,339				500
J.D. (Jim) Kelly			5,772				-
Stephanie K. Kushner			8,963				500
Larry J. Magee			7,302				500
Scott K. Sorensen			7,202				500
Ronald L. Stewart			8,388				500

 

 

Stock Ownership Guidelines.  Each non-employee director is required to beneficially own that number of shares of our common stock with an aggregate value equal to five times the amount of the annual cash retainer for non-employee directors within five years after he or she first becomes a director, and to continue to beneficially own at least this number of shares for as long as he or she serves as a director. As of December 31, 2007, all directors, with the exception of Dr. Jischke and Mr. Burdakin, were in compliance with the guidelines. Dr. Jischke and Mr. Burdakin owned 15,839 shares of Company common stock on December 31, 2007. They have each historically been in compliance with the Stock Ownership Guidelines and neither director has disposed of granted stock. The non-compliance results from the December 31, 2007 price for the Company’s common stock, which adversely affected the overall value of their holdings. Mr. Burdakin is not standing for re-election. If Dr. Jischke is re-elected as a director in 2008, the equity portion of his retainer will likely, once again, place him in compliance with the Stock Ownership Guidelines.

 

Other.  The Company reimburses all directors for travel and other reasonable, necessary business expenses incurred in the performance of their services for the Company and extends coverage to them under the Company’s travel accident and directors’ and officers’ liability insurance policies. In addition, the Company allocates to each director an annual allowance of $5,000 to reimburse costs associated with attending continuing education courses related to Board of Directors’ service.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and 10% stockholders to file reports of ownership of our equity securities. To our knowledge, based solely on review of the copies of such reports furnished to us related to the year ended December 31, 2007, all such reports were made on a timely basis, except for the Forms 4 for each of our non-employee directors reporting annual director compensation grants, the sale of stock by Mr. Bruce N. Ewald, Senior Vice President of Sales and Marketing, related to his March 21, 2007 sale of stock for tax purposes upon vesting of an equity grant reported on Form 4 dated February 8, 2008, the sale of stock by Mr. Giromini related to his May 21, 2007 sale of stock for tax purposes upon vesting of an equity grant reported on Form 4 dated February 8, 2008, and the sale of stock by Mr. Timothy J. Monahan related to his May 21, 2007 sale of stock for tax purposes upon vesting of an equity grant reported on Form 4 dated February 8, 2008.

 

Beneficial Ownership of Common Stock

 

The following table sets forth certain information as of April 1, 2008 (unless otherwise specified), with respect to the beneficial ownership of our Common Stock by each person who is known to own beneficially more than 5% of the outstanding shares of Common Stock, each person currently serving as a director, each nominee for director, each named executive officer (as defined below), and all directors and executive officers as a group:

 

 

 

 

Executive Compensation

 

Compensation Discussion and Analysis

 

The following compensation discussion and analysis provides information regarding the objectives and elements of our compensation philosophy and policies for the compensation of our Chief Executive Officer, Mr. Giromini, Chief Financial Officer, Mr. Smith, and our three other most highly-compensated executive officers in 2007, Messrs. Ehrlich, Ewald and Monahan, our Senior Vice President — Chief Technology Officer, Senior Vice President — Sales and Marketing, and Senior Vice President — Human Resources, respectively. We refer to these five individuals collectively as our Named Executive Officers, or NEOs.

 

The Compensation Committee is responsible for implementing our executive compensation policies and programs and works closely with management, in particular our Senior Vice President of Human Resources. To assist in identifying appropriate levels of compensation, the Compensation Committee has historically engaged a compensation consultant. In 2007, the Committee engaged Towers Perrin. More information on the Committee’s processes and procedures can be found above in “Compensation Committee.”

 

Philosophy and Objectives of Wabash National Compensation Programs

 

Overview

 

Our overall compensation philosophy is to provide compensation packages to our executives, including our NEOs, that are competitive with those of executives of similar status in the transportation industry while at the same time keeping our compensation program equitable and straightforward in structure.

 

 

While we provide a framework for compensation, we believe that the Compensation Committee must have the flexibility needed to attract and retain qualified candidates, as well as recognize individual contributions or performance over and above that which is expected.

 

In implementing this philosophy, we award compensation to meet our three principle objectives: aligning executive compensation with our Company’s annual and long-term performance goals, using equity-based awards to align executive and stockholder interests, and setting compensation at levels that assist us in attracting and retaining qualified executives.

 

Reflect Annual Performance Goals

 

As part of our executive compensation program, we reward the achievement, and surpassing, of corporate goals. Our short-term incentive program is designed to reward participants for the achievement of annual financial and personal performance goals by providing cash awards that are paid if annual financial goals are met and personal performance meets expectations. We believe that the use of performance goals provide our executives with an equitable message that when the Company does well, so do they. Similarly, because a significant portion of awards are tied to Company-wide goals, all of the participants in the plan are rewarded for superior Company performance. We also believe that the use of the performance goals we select helps us to have a straightforward structure because our executives can monitor Company performance and correlate their awards to improved Company operations and performance.

Utilize Equity-Based Awards

 

Our compensation program uses equity-based awards to provide our executives with a direct incentive to seek increased stockholder returns. Our stockholders receive value when our stock price increases, and by using equity-based awards our executives also receive increased value when our stock price increases. We believe that equity-based awards are an important part of an equitable structure because it is fair to our executives and to the Company that the level of rewards for our executives increase and decrease based on the return to stockholders. Similarly, equity-based awards represent our philosophy of having a straightforward structure by reminding executives that one of the best measures of long-term corporate success is increased stockholder value.

 

Attract and Retain Qualified Executives

 

We believe that the availability of qualified executive talent is limited and have designed our compensation program to help us attract qualified candidates by providing compensation that is competitive within the transportation industry and the broader market for executive talent. Perhaps more importantly, we believe that the design of our compensation program is important in helping us to keep the qualified executives we currently have.

 

Competitive Market Assessment

 

To assist in identifying and determining appropriate levels of compensation, the Compensation Committee considered Towers Perrin’s competitive market assessment. The assessment provided historical information and analysis on base salary, total cash compensation, target bonus percentages, annualized expected values of long-term incentives and total direct compensation for our NEOs. The assessment compared the compensation packages for the NEOs, other than Mr. Ehrlich for whom comparable data was not available due to the unique nature of his duties and responsibilities, to a size-based sample from general industry and a size-adjusted durable goods manufacturing sample.

 

In reviewing the competitive market data provided by Towers Perrin, the Compensation Committee has not historically, and did not in 2007, specifically “benchmark,” or target to pay a certain percentage or level of compensation to the NEOs. Instead, the Committee considered this information as an additional factor in setting pay levels and amounts. Consistent with our compensation objectives, the Compensation Committee retains the flexibility to also consider subjective factors. The Committee realizes that competitive alternatives vary from individual to individual and may extend beyond equivalent positions in our industry or at other publicly-traded or similarly-situated companies. The Committee considered subjective factors such as each executive’s contributions to our corporate performance, complexity and importance of role and responsibilities, cost of living adjustments, position tenure, and leadership and growth potential. When determining long-term incentive compensation, the Compensation Committee also considers the cost of the plan to the Company and the availability of shares under our equity plans.

 

Elements of Compensation

 

Base Salary

 

We believe that it is a necessity to provide our executives with a portion of compensation that is fixed and liquid, and we do this through base salaries. In addition, the Compensation Committee’s decisions on base salaries impact our short-term incentive plan because target awards are designed as multiples of base salary.

 

As discussed above, the Compensation Committee reviews competitive market assessments provided by Towers Perrin when setting base salaries and generally looks to the median of the salaries covered by the assessment as the starting point of this review. The Compensation Committee also considers “internal equity” and compares base salaries among all of our executive officers as part of our efforts to provide equitable levels of compensation both internally and externally.

 

Short-Term Incentive Plan

 

Our short-term incentive plan is designed to reward participants for meeting or exceeding financial and personal performance over the course of a calendar year, and in addition to our NEOs, it is available to other executives and key associates. If short-term incentive plan targets are met, participants receive a cash bonus. The short-term incentive plan motivates our NEOs to achieve goals that we believe are consistent with our current overall

goals and strategic direction. We believe that achievement of these current overall goals and strategic direction will translate into long-term success for the Company and increased stockholder value.

 

In 2007, for our NEOs other than Mr. Giromini, 80% of the target bonus under the short-term incentive plan was based on achieving financial goals of operating income and working capital, and 20% was based on the Compensation Committee’s and Mr. Giromini’s subjective assessment of their performance during the year. Mr. Giromini’s target bonus was 100% tied to achievement of the financial goals, operating income and working capital. . For the purpose of calculating the financial portion of the short-term incentive plan, operating working capital was determined by dividing net working capital by annual sales, while net working capital is calculated as the sum of accounts receivable and inventory less accounts payable, and all measures are calculated by averaging the results of each calculation for the prior 13 months.

 

We believe that operating income was an appropriate measure for short-term incentive plan awards because we believe that it is the most direct and appropriate measure to reflect our NEOs efforts to achieve profitability and short-term performance. Similarly, we believe that working capital is an appropriate measure for short-term incentive plan awards because it directly reflects the efforts of our employees to achieve improved operational performance. The overall effect of this is the selection of metrics and targets that are easy to understand. The 20% of the short-term incentive plan that is based on individual performances furthers our philosophy of having flexibility to reward an individual’s performance.

 

In 2007, we changed our incentive plan to decouple the payment of the personal performance portion of the short-term incentive plan from the financial performance portion. We determined it was appropriate to decouple these measures to be able to reward executives for success in areas of our business that were within their control, and to recognize that executives can have significant and positive impacts even when our financial performance targets are not met. Notwithstanding that determination, we still limited the personal performance portion of the award to only 20% of the target bonus to take into account that the overall success of our company is the most important measure. Because of Mr. Giromini’s role as our Chief Executive Officer and his responsibility for our company as a whole, we determined that it was appropriate that his short-term incentive award be tied exclusively to overall company measures. As a result, in 2007 Mr. Giromini’s short-term incentive bonus was based solely on financial measures — 80% for the operating income measure and 20% for the operating working capital measure.

 

The 2007 short-term incentive plan included a range from 50% to 200% of the financial portion of the target bonus based on corporate performance, with 50% paid at 60% of target, 100% paid at 100% of target and 200% paid at 150% of target, with amounts in between each level of performance interpolated accordingly. The target bonus under the short-term incentive plan was, as a percentage of each individual’s base salary, 80% for Mr. Giromini, 50% for Mr. Smith, and 45% for Messrs. Ehrlich, Ewald and Monahan. The Compensation Committee considered the competitive analysis received from Towers Perrin in determining each NEO’s target bonus opportunity for 2007, other than Mr. Giromini, whose incentive opportunity was set in his negotiated employment agreement.

 

In 2007, we did not achieve the threshold for payments under the financial portion of the plan. Consequently, no payments were made to our NEOs for the financial portion of the plan and thus no award was made to Mr. Giromini. The Compensation Committee determined to make awards to each NEO, other than Mr. Giromini, for the personal performance portion of the plan. In determining the size of each NEO’s short-term incentive plan award that relates to personal performance, the Compensation Committee reviewed each NEO’s contributions to achievement of our corporate goals, their performance managing and leading the Company, and the Compensation Committee’s view on the retention benefits of making these awards. Based on its subjective review and assessment, Mr. Smith received an incentive cash award of $36,000, and Messrs. Ehrlich, Ewald and Monahan each received incentive cash awards of $30,000.

 

Long-Term Incentive Plan

 

Our long-term incentive plan, or LTI Plan, is designed to reward our executives, including NEOs, for increasing stockholder value. As described above, we believe that a portion of executive compensation should be in the form of equity awards to align the interests of our executives and our stockholders. The LTI Plan consists of grants of two types of equity awards: stock options that vest equally over three years and restricted stock that vests in total at the end of three years, each based on the continued employment of the officer.

As mentioned above, under the LTI Plan, each NEO’s long-term incentive award target is generally established based on a percentage of the salary range midpoint from the competitive market assessment. To determine the size of the awards to be made, we multiply the respective NEO’s midpoint by the target LTI percentage from the competitive market assessment for that range. In 2007, it was 160% of midpoint for Mr. Giromini, 100% for Mr. Smith, and 80% of midpoint for our other NEOs.

 

Historically, we utilized binomial valuations of stock options and restricted shares to determine the numbers of each required to deliver the targeted dollar value. To manage dilution concerns, as well as to provide a more straightforward method of calculating our LTI awards, consistent with our compensation objectives, we determined the number of shares of restricted stock to award by dividing half of the target award value by the share price on the date of grant. We then awarded an equal number of options. The actual awards granted were reduced from the initial targeted award values in order to reduce the “burn rate” of the shares that are available under the 2007 Omnibus Incentive Plan to take into account our desire to use those shares over a three-year period.

 

The Company believes that the two types of equity awards in the LTI Plan were appropriate and provided the proper incentives for executives to remain with the Company while executing our strategic growth plans. Because 50% of each award in 2007 was composed of options that require an increase in stock price to have value to the NEO, a significant portion of the LTI Plan award is tied to stockholder returns. We concluded that solely relying on an increased stock price would not be sufficient for achieving the purposes of our long-term incentive plan. While stock price can be an indicator of corporate success, outside factors can cause the stock price to rise or fall regardless of the level of performance. Accordingly, we believe that the utilization of restricted stock is appropriate given the expectations of our executives based on our historical practices, the marketplace for executive talent, their impact on retention and the cyclical nature of our business.

 

Equity Grant Practices

 

Grants of equity awards are generally made to our executives, including NEOs, at one time each year pursuant to the LTI Plan. As discussed above, the Compensation Committee typically reviews and approves awards and award levels under the LTI Plan in February of each year in conjunction with regularly scheduled meetings of the Compensation Committee and Board of Directors. Subsequent to the Compensation Committee approval, equity awards for executives are subject to approval by the full Board of Directors. In 2007, awards under the LTI Plan were not made until after our 2007 Annual Meeting of Stockholders in May 2007, at which time our stockholders approved our new 2007 Omnibus Incentive Plan. While most of our option awards are made during that time period, we occasionally make grants of options to executives at other times, including in connection with the initial hiring of a new officer or a promotion. We do not have any specific program, plan or practice related to time equity award grants to executives in coordination with the release of non-public information.

 

Beginning September 24, 2007, Mr. Giromini, who also serves as a director of the Company, has the authority to grant awards under the 2007 Omnibus Incentive Plan to Company employees who are not officers or directors of the Company. Only Mr. Giromini has the authority to grant equity awards, such as inducement grants, within prescribed parameters — no other executive officer has the authority to grant such awards.

 

All options are granted with an exercise price equal to the closing market price on the date of grant. The date of grant for our equity awards is set by the Board of Directors and is a date that is on or after the Board action approving and ratifying the awards. We have never engaged in a practice of back-dating equity awards.

 

Stock Ownership Guidelines

 

In February 2005, we adopted stock ownership guidelines for our executive officers, including our NEOs. These guidelines are designed to encourage our executive officers to increase their equity stake in the Company and more closely align their interests with those of other stockholders. The stock ownership guidelines provide that within five years of adoption of the guidelines, the executive officer is required to own a number of shares roughly equivalent to what was then three times the executive’s salary, or five times in the case of Mr. Giromini. Being within five years of adoption, our NEOs are not currently required to meet the guidelines.

 

Our insider trading policy prohibits our executive officers, including our NEOs, from engaging in selling short our Common Stock or engaging in hedging or offsetting transactions regarding our Common Stock.

Post-Termination Compensation

 

Severance and Change-in-Control Agreements

 

In 2007, we did not have employment or severance agreements with any of our NEOs, other than an employment agreement with Mr. Giromini.

 

Mr. Giromini’s agreement provides for payments and other benefits if his employment terminates based upon certain qualifying events, such as termination “without cause” or leaving employment for “good reason.” The Board believed these terms, which were negotiated when Mr. Giromini was initially hired, were necessary to hire Mr. Giromini and were consistent with industry practice.

 

We also have instituted a change-in-control policy applicable to a number of our senior executive officers, including Messrs. Giromini, Smith, Ewald and Monahan. We determined that this policy was appropriate based on the prevalence of similar policies within our industry, as well as the dynamic nature of the business environment in which we operate. We also believe the change-in-control policy, similar to the severance provisions of Mr. Giromini’s employment agreement, is an appropriate tool to motivate executive officers to exhibit the proper behavior when considering potential business opportunities. By defining compensation and benefits payable under various merger and acquisition scenarios, change-in-control agreements enable the NEOs to set aside personal financial and career objectives and focus on maximizing stockholder value. These agreements help to minimize distractions such as the officer’s concern about what may happen to his or her position, and help to keep the officer objective in analyzing opportunities that may arise. Furthermore, they ensure continuity of the leadership team at a time when business continuity is of paramount concern. Under the terms of his employment agreement as amended in January 2007, Mr. Giromini will receive the greater of the benefits pursuant to our change-in-control policy or his employment agreement, but not both.

 

Additional information regarding these provisions, including a definition of key terms and a quantification of benefits that would be received assuming a triggering event on December 31, 2007, is set forth below under the heading “Potential Payments upon Termination or Change-in-Control.”

 

Executive Severance Plan

 

We have adopted an Executive Severance Plan that provides for severance benefits for our officers, including our NEOs, in the event we terminate their employment without cause. Under the plan, in the absence of an employment agreement providing for superior benefits, our executives are eligible for a severance payment equal to the executive’s base salary for a period of one month or, if the executive executes a general release, for a period up to 18 months. In addition to the severance payment, our NEOs are entitled to a lump sum amount to cover post-termination healthcare premiums for the duration of the severance period. We determined this plan was appropriate based on the prevalence of similar plans within our industry and its importance in attracting and retaining qualified executives. For a quantification of the benefits that would be received assuming termination of eligible NEOs on December 31, 2007, see the heading “Potential Payments upon Termination or Change-in-Control” below.

 

Deferred Compensation Plan

 

We sponsor a non-qualified, unfunded deferred compensation plan that allows our directors and eligible highly-compensated employees, including the NEOs, to voluntarily elect to defer certain forms of compensation prior to the compensation being earned and vested. We make this opportunity available to our highly-compensated employees as a financial planning tool and as an additional method to save for retirement. Deferrals by executive officers generally result in the deferral of our obligation to make cash payments or issue shares of our Common Stock to those executive officers. Executive officers do not receive preferential earnings on their deferred compensation. As a result, we do not view earnings received on contributions to the deferred compensation plan as providing executives with additional compensation. Participants in the Deferred Compensation Plan are general creditors of the Company. See the Non-qualified Deferred Compensation Table below for additional information.

Executive Life Insurance Program

 

Pursuant to the terms of his employment agreement, we maintain a life insurance policy on Mr. Giromini. We have purchased and maintain this policy but provide Mr. Giromini with an interest in the death benefit. Mr. Giromini is responsible for taxes on the income imputed in connection with this agreement under Internal Revenue Service rules. Upon termination of employment, the life insurance policy will be assigned to Mr. Giromini or his beneficiary. This was a negotiated benefit entered into when Mr. Giromini began employment with the Company.

 

Deductibility Cap on Executive Compensation

 

Under Section 162(m) of the Internal Revenue Code of 1986, as amended, and applicable Treasury regulations, no tax deduction is allowed for annual compensation in excess of $1,000,000 to the NEOs (other than Mr. Smith, our Chief Financial Officer) listed in the Summary Compensation Table below. However, performance-based compensation, as defined in the tax law, is fully deductible if the programs, among other requirements, are approved by stockholders, the compensation is payable only upon attainment of pre-established, objective performance goals and the board committee that establishes such goals consists only of “outside directors” as defined for purposes of Section 162(m). For 2007, all of the members of the Compensation Committee qualified as “outside directors.” Our policy is to qualify our incentive compensation programs for full corporate deductibility to the extent feasible and consistent with our overall compensation goals.

 

Compensation Committee Report

 

The Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Proxy Statement. Based on the review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Wabash National Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (including through incorporation by reference to this Proxy Statement).

 

COMPENSATION COMMITTEE

 

David C. Burdakin
Martin C. Jischke
J.D. (Jim) Kelly
Stephanie K. Kushner
Larry J. Magee
Scott K. Sorensen
Ronald L. Stewart

 

Compensation Committee Interlocks and Insider Participation

 

The Compensation Committee of the Board of Directors in 2007 consisted of Dr. Jischke, Ms. Kushner, and Messrs. Burdakin, Kelly, Magee, Sorensen and Stewart. None of these individuals is currently, or has ever been, an officer or employee of Wabash or any of our subsidiaries. In addition, during 2007, none of our executive officers served as a member of a board of directors or on the compensation committee of any other entity that had an executive officer serving on our Board of Directors or on our Compensation Committee.

Summary Compensation Table
for the Year Ended December 31, 2007

 

The following table summarizes the compensation of the NEOs for the year ended December 31, 2007 and for the year ended December 31, 2006. The NEOs are the Company’s Chief Executive Officer, Chief Financial Officer, and the three other most highly compensated executive officers in 2007 as determined by taking the total compensation calculated pursuant to the table below.

 

 

 

 

						Executive Life
		NQP Match				Insurance Plan
Name		($)				($)
Richard J. Giromini			25,431				20,602	(a)
Robert J. Smith			13,828				-
Rodney P. Ehrlich			12,947				-
Bruce N. Ewald			10,569				-
Timothy J. Monahan			10,403				-

 

 

 

Grants of Plan-Based Awards
for the Year Ended December 31, 2007

 

 

Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table

 

For Mr. Giromini, the amounts disclosed in the tables above are in part a result of the terms of his employment agreement. We have no other employment agreements with our NEOs.

 

Mr. Giromini’s Employment Agreement.  Effective January 1, 2007, the Board appointed Mr. Giromini, to serve as Chief Executive Officer and his employment agreement was amended. Below is a description of Mr. Giromini’s employment agreements in effect since 2002.

 

In June 2002, we entered into an employment agreement with Mr. Giromini to serve as Chief Operating Officer effective July 15, 2002 through July 15, 2003. The term of Mr. Giromini’s employment automatically renewed for successive one-year periods unless and until either party provided written notice, not less than 60 days prior to the end of the then current term, of their intent not to renew the agreement. Mr. Giromini’s initial base salary was $325,000 per year, subject to annual adjustments.

 

On January 1, 2007, in connection with Mr. Giromini becoming our Chief Executive Officer, we entered into an amendment to his employment agreement to provide that Mr. Giromini’s title and duties will be that of the President and Chief Executive Officer. The amendment provides that Mr. Giromini will receive an annual base salary of $620,000 and is eligible for an annual incentive bonus targeted at 80% of his base salary, and which may range from 0% to 160% of base salary. In addition, Mr. Giromini is entitled to payment of an additional sum to enable Mr. Giromini to participate in an executive life insurance program.

 

A description of the termination provisions, whether or not following a change-in-control, and a quantification of benefits that would be received by Mr. Giromini can be found under the heading “Potential Payments upon Termination or Change-in-Control.”

Outstanding Equity Awards at Fiscal Year-End
December 31, 2007

 

 

Expiration Date		Vesting Schedule and Date
3/07/2015		March 7, 2008
5/18/2016		Two equal installments on May 18, 2008 and 2009
5/24/2017		Three equal installments on May 24, 2008, 2009 and 2010

 

 

 

 

The following table sets forth information concerning the exercise of options and the vesting of stock awards during 2007 by each of the NEOs:

 

Option Exercises and Stock Vested

 

 

 

 

Eligible highly-compensated employees, including the NEOs, may defer receipt of all or part of their cash compensation (base salary and annual incentive compensation) under the non-qualified deferred compensation plan. Amounts deferred under this program are invested among the investment funds listed in the Service Agreement for the program from time to time pursuant to the participant’s direction and participants become entitled to the returns on those investments. Prior to 2008, participants could elect to receive the funds in a lump sum or in up to 10 annual installments following retirement, but could not make withdrawals during their employment, except in the event of hardship as approved by the Company. A new plan, effective January 1, 2008, allows limited in-service distributions. The deferred compensation plan is unfunded and subject to forfeiture in the event of bankruptcy.

 

The following table sets forth information concerning NEOs’ contributions and earnings with respect to the Company’s non-qualified deferred compensation plan:

 

Non-Qualified Deferred Compensation

 

 

 

 

		2007				2006
Name		($)				($)
Richard J. Giromini			56,431				40,590
Robert J. Smith			36,388				26,336
Rodney P. Ehrlich			41,114				68,413
Bruce N. Ewald			23,780				-
Timothy J. Monahan			22,965				21,576

Potential Payments on Termination or Change-in-Control

 

The section below describes the payments that may be made to NEOs in connection with a change-in-control or pursuant to certain termination events.

 

Executive Severance Plan.  In the absence of an employment agreement that provides for superior benefits, our Executive Severance Plan provides severance benefits to our officers, including our NEOs, in the event we terminate their employment without cause. Under this plan, our NEOs are eligible for a severance payment, on a bi-weekly basis, equal to the NEO’s base salary for a period of one month or, if the executive executes a general release, for a period of up to 18 months. In addition to the severance payment, the executive is entitled to receive a lump sum amount equal to his or her COBRA healthcare premiums for the duration of the severance period.

 

Change-in-Control.  We provide severance pay and benefits in connection with a “change-in-control” and Qualifying Termination, as defined below, to some of our executives, including all of the NEOs, in accordance with the terms of a change-in-control policy that we adopted in December 2005. Benefits under the policy are payable in the event of a termination within twelve months after a change-in-control that is either by Wabash without “cause” or by the executive for “good reason” (a “Qualifying Termination”). In the case of Mr. Giromini, he will not receive payments under our change-in-control policy if he is entitled to greater benefits under the terms of his employment agreement, as described below. An executive must execute a release in favor of the Company to receive benefits under the policy.

 

In the case of Mr. Giromini, the benefits under the policy upon a Qualifying Termination are a severance payment of two times base salary plus two times his target bonus for the year in which the Qualifying Termination occurs. In addition, a payment will be made for a pro-rata portion of his target bonus for the current year, and health benefits will be continued for two years (or until comparable coverage is obtained by him).

 

In the case of our NEOs, other than Mr. Giromini, the benefits under the policy upon a Qualifying Termination are a severance payment of one and one-half times base salary plus one and one-half times the executive’s target bonus for the year in which the Qualifying Termination occurs. In addition, a payment will be made for a pro-rata portion of the executive’s target bonus for the current year, and health benefits will be continued for one and one-half years (or until comparable coverage is obtained by the executive).

 

Mr. Giromini’s Agreement.  Mr. Giromini’s employment agreement has certain provisions that provide for payments to him in the event of the termination of his employment or in the event of a termination of his employment in connection with a change-in-control.

 

 

The payments and benefits payable to Mr. Giromini described above are contingent upon his execution of a negotiated general release of all claims. Mr. Giromini has agreed not to compete with us during the term of his agreement and for a period of two years after termination for any reason.

 

As provided for under the Company’s change-in-control policy and his employment agreement, Mr. Giromini, upon a change-in-control, is entitled to receive benefits under either the change-in-control policy or his employment agreement, but not both.

 

For purposes of Mr. Giromini’s employment agreement, the following definitions apply:

 

 

 

 

 

Payment and Benefit Estimates

 

The table below was prepared to reflect the estimated payments that would have been made pursuant to the policies and agreements described above. Except as otherwise noted, the estimated payments were calculated as though the applicable triggering event occurred and the NEO’s employment was terminated on December 31, 2007, using the share price of $7.69 of our Common Stock as of December 31, 2007.