DEF 14A 1 a08-13557_2def14a.htm DEF 14A

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

(Rule 14a-101)

 

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )

 

Filed by the Registrant  x

 

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))

x

Definitive Proxy Statement

o

Definitive Additional Materials

o

Soliciting Material Pursuant to §240.14a-12

 

PHILLIPS-VAN HEUSEN CORPORATION

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

x

No fee required.

o

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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)

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(4)

Date Filed:

 

 

 

 



 

PHILLIPS-VAN HEUSEN CORPORATION

 


 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 


 

The Annual Meeting of Stockholders of PHILLIPS-VAN HEUSEN CORPORATION (the “Company”), a Delaware corporation, will be held at The Graduate Center - City University of New York, 365 Fifth Avenue, Proshansky Auditorium, Concourse Level, New York, New York, on Tuesday, June 19, 2008, at 10:00 a.m., for the following purposes:

 

(1)          to elect 10 directors of the Company to serve for a term of one year;

 

(2)          to ratify the appointment of auditors for the Company to serve for the current fiscal year; and

 

(3)          to consider and act upon such other matters as may properly come before the meeting.

 

Only stockholders of record at the close of business on April 24, 2008 are entitled to vote at the meeting.

 

Attendance at the meeting will be limited to holders of record as of the record date of the Company’s Common Stock or their proxies, beneficial owners having evidence of ownership and guests of the Company.  If you hold stock through a bank or broker, a copy of an account statement from your bank or broker as of the record date will suffice as evidence of ownership.  Attendees also must present a picture ID to be admitted to the meeting.

 

You are requested to fill in, date and sign the enclosed proxy, which is solicited by the Board of Directors of the Company, and to mail it promptly in the enclosed envelope.

 

 

 

By order of the Board of Directors,

 

 

MARK D. FISCHER

 

Secretary

New York, New York

 

May 7, 2008

 

 

IMPORTANT: The prompt return of proxies will save the Company the expense of further requests for proxies. A self-addressed envelope is enclosed for your convenience. No postage is required if mailed within the United States.

 



 

TABLE OF CONTENTS

 

GENERAL INFORMATION

1

 

 

VOTING INFORMATION

1

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

2

 

 

ELECTION OF DIRECTORS

5

 

 

Directors

5

Committees and Meetings

7

Other Corporate Governance Policies

9

 

 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

9

 

 

COMPENSATION COMMITTEE REPORT

10

 

 

COMPENSATION DISCUSSION AND ANALYSIS

10

 

 

EXECUTIVE COMPENSATION

24

 

 

Summary Compensation Table

24

Grants of Plan-Based Awards

27

Narrative Disclosure to Summary Compensation Table and

 

Grants of Plan-Based Awards Table

28

Outstanding Equity Awards at Fiscal Year-End

33

Option Exercises and Stock Vested

36

Pension Benefits

36

Nonqualified Deferred Compensation

41

Potential Payments Upon Termination and Change In Control Provisions

42

 

 

DIRECTOR COMPENSATION

47

 

 

TRANSACTIONS WITH RELATED PERSONS

49

 

 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

49

 

 

AUDIT COMMITTEE REPORT

50

 

 

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

51

 

 

RATIFICATION OF THE APPOINTMENT OF AUDITORS

51

 

 

Fees Paid to Auditors

52

 

 

SUBMISSION OF STOCKHOLDER PROPOSALS

52

 

 

MISCELLANEOUS

53

 



 

PHILLIPS-VAN HEUSEN CORPORATION

 


 

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

June 19, 2008

 


 

GENERAL INFORMATION

 

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of PHILLIPS-VAN HEUSEN CORPORATION to be used at the Annual Meeting of Stockholders, which will be held at The Graduate Center - City University of New York, 365 Fifth Avenue, Proshansky Auditorium, Concourse Level, New York, New York, on Tuesday, June 19, 2008, at 10:00 a.m., and at any adjournments thereof.

 

Our principal executive offices are located at 200 Madison Avenue, New York, New York 10016-3903.  The approximate date on which this Proxy Statement and the enclosed proxy card were first sent or given to stockholders was May 7, 2008.

 

Disclosures in this Proxy Statement generally pertain to matters related to our most recently completed fiscal year, which ended on February 3, 2008.  References herein to “2007” refer to that fiscal year, as the fiscal year commenced in calendar 2007.  Similarly references to “2006,” “2008” and “2009” are to our fiscal years that commenced or will commence in the referenced calendar year.

 

Our Annual Report on Form 10-K for our fiscal year ended February 3, 2008, this Proxy Statement and all other proxy materials are available at http://www.pvhannualmeetingmaterials.com.

 

VOTING INFORMATION

 

Stockholders who execute proxies retain the right to revoke them at any time by notice in writing to the Secretary of the Company, by revocation in person at the meeting or by presenting a later dated proxy.  Beneficial owners of our Common Stock who are not holders of record and wish to revoke their proxy should contact their bank, brokerage firm or other custodian, nominee or fiduciary to inquire about how to revoke their proxy.  Unless so revoked, the shares represented by proxies will be voted at the meeting.  The shares represented by the proxies solicited by our Board of Directors will be voted in accordance with the directions given therein.   Shares will be voted FOR the election of the 10 nominees for director and FOR the ratification of the appointment of Ernst & Young LLP as our auditors for our current fiscal year if no directions are given in a valid proxy.

 

Stockholders vote at the meeting by casting ballots (in person or by proxy) which are tabulated by a person who is appointed by the Board of Directors before the meeting to serve as inspector of elections at the meeting and who has executed and verified an oath of office.  Abstentions and broker “non-votes” are included in the determination of the number of shares present at the meeting for quorum purposes.  Abstentions will have the same effect as negative votes, except that abstentions will have no effect on the election of directors because directors are elected by a plurality of the votes cast.  Broker “non-votes” are not counted in the tabulations of the votes cast on proposals presented to stockholders because shares held by a broker are not considered to be entitled to vote on matters as to which broker authority is withheld.  A broker “non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.  Banks, brokers and other nominees have discretionary voting power with respect to the election of directors and the ratification of the appointment of our auditor, as the proposals are considered to be “routine matters” under existing New York Stock Exchange rules.

 

Common stockholders of record at the close of business on April 24, 2008 will be entitled to one vote for each share of our Common Stock then held.  There were outstanding on such date 51,372,066 shares of Common Stock.  The Common Stock is the only class of voting stock outstanding as of the record date.

 

1



 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table presents certain information with respect to the persons who are known by us to be the beneficial owners of more than five percent of our Common Stock as of April 30, 2008.  The persons listed below have advised by us that they have sole voting and investment power with respect to the shares listed as owned by them, except as otherwise indicated.

 

Name and Address of
Beneficial Owner

 

Amount
Beneficially
Owned

 

Percent of
Class

 

FMR LLC(1)

 

 

 

 

 

82 Devonshire Street

 

 

 

 

 

Boston, Massachusetts 02109

 

5,009,500

 

9.8

 

 

 

 

 

 

 

Earnest Partners, LLC(2)

 

3,916,853

 

7.6

 

75 Fourteenth Street, Suite 2300

 

 

 

 

 

Atlanta, Georgia 30309

 

 

 

 

 

 


(1)          FMR LLC may be deemed to be the beneficial owner of 5,009,500 shares of Common Stock, including 1,429,128 shares with respect to which it has sole voting power. Fidelity Management & Research Company (“Fidelity”), 82 Devonshire Street, Boston, Massachusetts 02109, a wholly-owned subsidiary of FMR LLC, 82 Devonshire Street, Boston, Massachusetts 02109, and an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, is the beneficial owner of 4,533,700 shares of Common Stock as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940.  Pyramis Global Advisors Trust Company (“PGATC”), 53 State Street, Boston, Massachusetts 02109, an indirect wholly-owned subsidiary of FMR LLC and a bank as defined in Section 3(a)6 of the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”), is the beneficial owner of 35,800 shares of Common Stock as a result of its serving as investment manger of institutional accounts owning such shares.  Fidelity International Limited (“FIL”), Pembroke Hall, 42 Crow Lane, Hamilton, Bermuda, and various foreign-based subsidiaries provide investment advisory and management services to a number of non-U.S. investment companies and certain institutional investors.  FIL, which is a qualified institution under Section 240.13d-l(b)(1) pursuant to an SEC No-Action Letter dated October 5, 2000, is the beneficial owner of 440,000 shares of Common Stock, including 449,200 shares with respect to which it has sole voting power.  Each of Edward C. Johnson 3rd and FMR LLC, through control of Fidelity Management & Research Company and the Fidelity funds, has sole power to dispose of the 4,533,700 shares owned by the Fidelity funds. Members of the family of Edward C. Johnson 3rd, Chairman of FMR LLC, may be deemed to form a controlling group with respect to FMR LLC.  Each of Edward C. Johnson 3rd and FMR LLC, through control of PGATC, has sole dispositive power and sole voting power over 35,800 shares of Common Stock owned by the institutional accounts managed by PGATC.  FMR LLC and FIL are of the view that they are not acting as a “group” for purposes of Section 13(d) under the Exchange Act and that they are not otherwise required to attribute to each other the beneficial ownership of securities beneficially owned by the other corporation. However, FMR LLC filed the Schedule 13G on a voluntary basis as if all of the shares are beneficially owned by FMR LLC and FIL on a joint basis. Information as to the shares of Common Stock that may be deemed beneficially owned by FMR LLC, Edward C. Johnson 3rd, PGATC and FIL (other than percentage ownership) is as of December 31, 2007, as set forth in a Schedule 13G dated February 14, 2008 and filed with the Securities and Exchange Commission (which we refer to as the “SEC”).

 

(2)          Earnest Partners, LLC, a registered investment adviser, may be deemed to be the beneficial owner of 3,916,853 shares of Common Stock, including 1,371,650 shares with respect to which it has sole voting power, 1,153,703 shares with respect to which it has shared voting power and as to all 3,916,853 of which it has sole dispositive power.  Information as to the shares of Common Stock that may be deemed to be owned beneficially by Earnest Partners, LLC (other than percentage ownership) is as of December 31, 2007, as set forth in a Schedule 13G/A dated January 31, 2008 and filed with the SEC.

 

2



 

The following table presents certain information with respect to the number of shares of Common Stock beneficially owned as of April 30, 2008 by the following persons:

 

·                  each of our directors;

·                  each of the nominees for director;

·                  our Chief Executive Officer, our Chief Financial Officer and our four most highly compensated executive officers with respect to our most recently completed fiscal year, other than our Chief Executive Officer and Chief Financial Officer; and

·                  our directors, the nominees for director and our executive officers, as a group.

 

Each of the persons named below has sole voting and investment power with respect to the shares listed as owned by him or her except as otherwise indicated below.

 

Name

 

Amount
Beneficially
Owned(1)

 

Percent of
Class

 

Mary Baglivo

 

500

 

*

 

Emanuel Chirico

 

437,350

 

*

 

Edward H. Cohen

 

46,600

 

*

 

Francis K. Duane

 

101,261

 

*

 

Joseph B. Fuller

 

69,500

 

*

 

Margaret L. Jenkins

 

3,000

 

*

 

Bruce Maggin

 

79,875

 

*

 

V. James Marino

 

1,500

 

*

 

Paul Thomas Murry

 

36,640

 

*

 

Henry Nasella

 

12,500

 

*

 

Rita M. Rodriguez

 

13,000

 

*

 

Craig Rydin

 

2,500

 

*

 

Michael A. Shaffer

 

56,455

 

*

 

Allen E. Sirkin

 

246,581

 

*

 

Michael Zaccaro

 

97,517

 

*

 

All directors, nominees for director and executive officers as a group

 

 

 

 

 

(15 persons)

 

1,204,779

 

2.3

 

 


*                       Less than 1% of class.

 

(1)          The figures in the table are based upon information furnished to us by our directors, nominees for director and executive officers and upon company records.  The figures include the shares held for the benefit of our executive officers in the Master Trust for the PVH Stock Fund. The PVH Stock Fund is one of the investment options under our Associates Investment Plans, which are employee benefit plans under Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.   We refer to the Associates Investment Plans as the “AIPs.”  Participants in the AIPs who make investments in the PVH Stock Fund may direct the vote of shares of Common Stock held for their benefit in the Master Trust for the PVH Stock Fund.

 

As of April 24, 2008, the following persons have the right to cast votes equal to the following number of shares held in the Master Trust for the PVH Stock Fund (which have been rounded to the nearest full share): Emanuel Chirico, 7,006 shares; Francis K. Duane, 341 shares; Michael A. Shaffer, 6,455 shares; Allen E. Sirkin, 17,831 shares; and all of our directors, nominees for director and executive officers as a group, 31,633 shares.

 

The Trustee of the Master Trust has the right to vote shares in the Master Trust that are unvoted as of two days prior to the meeting in the same proportion as the vote by all other participants in the AIPs who have cast votes with respect to their investment in the PVH Stock Fund.  The committee that administers the AIPs makes all decisions regarding the disposition of Common Stock held in the Master Trust, other than the limited right of a participant to receive a distribution of shares held for his or her benefit.  As such, the committee may be deemed to be a beneficial owner of the Common Stock held in the Master Trust.  Mr. Shaffer is a member of that committee.  The figures in the table do not include shares in the Master Trust (other than applicable to Mr. Shaffer’s investment in the PVH Stock Fund) to the extent that, as a member of the committee, he may be deemed to have beneficial ownership of the shares held in the Master Trust.  There were 831,465 shares of Commons Stock (1.6% of the outstanding shares) held in the Master Trust as of April 24, 2008.

 

The table also includes the following shares which the persons on the table have the right to acquire within 60 days of April 30, 2008 upon the exercise of options granted to them: Emanuel Chirico, 417,505 shares; Edward H. Cohen, 40,500 shares; Francis K. Duane, 92,250 shares; Joseph B. Fuller, 60,500 shares; Margaret L. Jenkins, 2,500 shares; Bruce Maggin, 60,500 shares;  Paul Thomas Murry, 28,750 shares; Henry Nasella, 12,500 shares; Rita M. Rodriguez, 12,500 shares; Craig Rydin, 2,500 shares;

 

(Footnote continued on following page)

 

3



 

(Footnote continued from previous page)

 

 

Michael A. Shaffer, 50,000 shares; Allen E. Sirkin, 206,186 shares; Michael Zaccaro, 78,686; and all of our current directors, nominees for director and executive officers as a group, 1,064,877 shares.

 

The table also includes the following shares which the persons on the table have the right to acquire within 60 days of April 30, 2008 upon the issuance of shares underlying restricted stock units granted to them: Mary Baglivo, 500 shares; Margaret L. Jenkins, 500 shares; Bruce Maggin, 500 shares; V. James Marino, 500 shares; Rita M. Rodriguez, 500 shares; and all of our current directors, nominees for director and executive officers as a group, 2,500 shares.

 

4



 

ELECTION OF DIRECTORS

 

Directors

 

Our Board of Directors has established 10 as the number of directors constituting the entire Board.

 

All members of the Board of Directors elected by the stockholders at the Annual Meeting of Stockholders of the Company will serve for a term of one year or until their successors are elected and qualified.  All of the nominees for director have been previously elected directors of the Company.

 

The election of directors requires the affirmative vote of a plurality of the votes cast in person or by proxy at the meeting.  At this time, the Board of Directors knows of no reason why any nominee might be unable to serve.  There is no arrangement or understanding between any director or nominee and any other person pursuant to which such person was selected as a director or nominee.

 

The Board of Directors recommends a vote FOR the election of the 10 nominees named below.  Proxies received in response to this solicitation will be voted FOR the election of the nominees unless otherwise specified in a proxy.

 

Name

 

Principal Occupation

 

Age

 

Year
Became a
Director

Mary Baglivo

 

Chairman and Chief Executive Officer, The Americas, Saatchi & Saatchi Worldwide, an advertising agency

 

50

 

2007

 

 

 

 

 

 

 

Emanuel Chirico

 

Chief Executive Officer of the Company

 

50

 

2005

 

 

 

 

 

 

 

Edward H. Cohen

 

Retired; Counsel, Katten Muchin Rosenman LLP, a law firm

 

69

 

1987

 

 

 

 

 

 

 

Joseph B. Fuller

 

Founder, Director and Vice-Chairman, Monitor Group LLC, an international management consulting firm

 

51

 

1991

 

 

 

 

 

 

 

Margaret L. Jenkins

 

Former Senior Vice President and Chief Marketing Officer, Denny’s Corporation, a full-service family restaurant chain

 

56

 

2006

 

 

 

 

 

 

 

Bruce Maggin

 

Principal, The H.A.M. Media Group, LLC, a media investment company, Executive Vice President and Secretary, Media & Entertainment Holdings, Inc.

 

65

 

1987

 

 

 

 

 

 

 

V. James Marino

 

President and Chief Executive Officer, Alberto-Culver Company, a personal care products company

 

57

 

2007

 

 

 

 

 

 

 

Henry Nasella

 

Partner and Co-Founder, LNK Partners, a private equity investment firm

 

61

 

2003

 

 

 

 

 

 

 

Rita M. Rodriguez

 

Senior Fellow, Woodstock Theological Center at Georgetown University

 

65

 

2005

 

 

 

 

 

 

 

Craig Rydin

 

Chairman and Chief Executive Officer, Yankee Holding Corp. and The Yankee Candle Company, Inc., a designer, manufacturer and branded marketer of premium scented candles

 

56

 

2006

 

5



 

Additional Information

 

Several of our directors also serve as directors of other public companies:

 

·                  Mr. Chirico is a director of Dick’s Sporting Goods, Inc.

·                  Mr. Cohen is a director of Franklin Electronic Publishers, Incorporated, Gilman Ciocia, Inc. and Merrimac Industries, Inc.

·                  Mr. Maggin is a director of Central European Media Enterprises, Ltd.

·                  Mr. Marino is a director of Alberto-Culver Company

·                  Dr. Rodriguez is a director of Affiliated Managers Group, Inc. and ENSCO International Incorporated

·                  Mr. Rydin is a director of priceline.com Incorporated

 

Each of our directors has been engaged in the principal occupation indicated in the foregoing table for more than the past five years, except:

 

·                  Ms. Baglivo, who was President of Arnold Worldwide from April 2002 to July 2004;

·                  Mr. Chirico, who had been our President and Chief Operating Officer from June 2005 to February 27, 2006 and our Chief Financial Officer from February 1999 to June 2005;

·                  Mr. Marino, who was President of Alberto-Culver Consumer Products Worldwide, a division of Alberto-Culver Company, from October 2004 to November 2006, and President of Alberto Personal Care Worldwide, a division of Alberto-Culver Company, from July 2002 to October 2004;

·                  Mr. Nasella, who was a Venture Partner of Apax Partners, an international private equity investment group, from 2001 until 2005; and

·                  Dr. Rodriguez, who has also been self-employed in the field of international finance since 1999 and was a full-time member of the Board of Directors of the Export-Import Bank of the United States from 1982 to 1999.

 

Our Board of Directors has determined the independence (or lack thereof) of each of the directors and nominees for director and, as a result thereof, concluded that a majority of our directors are independent, as required under the rules of the New York Stock Exchange, on which exchange our Common Stock is listed for trading.  Specifically, our Board determined that Dr. Rodriguez, Ms. Baglivo and Ms. Jenkins, and each of Messrs. Cohen, Fuller, Maggin, Marino, Nasella and Rydin are independent under Section 303A(2) of the New York Stock Exchange rules.  In making such determinations, the Board considered (i) whether a director had, within the last three years, any of the relationships under Section 303A(2)(b) of the New York Stock Exchange rules with us which would disqualify a director from being considered independent, (ii) whether the director had any disclosable transaction or relationship with us under Item 404 of Regulation S-K of the Exchange Act, which relates to transactions and relationships between directors and their affiliates, on the one hand, and us and our affiliates (including management), on the other, and (iii) the factors suggested in the New York Stock Exchange’s Commentary to Section 303A(2), such as a commercial, consulting and other relationship, or other interactions with management that do not meet the absolute thresholds under Section 303A(2) or Item 404(a) but which, nonetheless, could reflect upon a director’s independence from management.  In considering the materiality of any transactions or relationships that do not require disqualification under Section 303A(2)(b), the Board considered the materiality of the transaction or relationship to the director, the director’s business organization and us and whether the relationship between (i) the director’s business organization and the Company, (ii) the director and the Company and (iii) the director and his business organization interfered with the director’s business judgment.

 

The Board of Directors considered that during 2007 and prior years we received legal services from Katten Muchin Rosenman LLP and its predecessors in making its independence decision with respect to Mr. Cohen.  Mr. Cohen is a retired partner of the law firm and receives a pension and retirement benefits, as well as consulting fees from the firm.  Mr. Cohen does no legal work for us and there is no relation between the amounts received by Mr. Cohen and the amounts that we pay in fees to Katten Muchin or our engagement of the law firm to provide legal services.

 

The Board of Directors considered that Monitor Group, LLC, of which Mr. Fuller serves as Vice-Chairman, has, in the past, provided to us market research and consulting services in making its independence decision with respect to Mr. Fuller.  No such services were performed in 2007, nor are any expected to be used in the future, and, when services were provided in the past, fees were generally in amounts that did not require disclosure under SEC rules.

 

The Board of Directors, in making its decision regarding the independence of Ms. Baglivo, considered that during 2007 Saatchi & Saatchi Great Wall/Zenith Optimedia China placed magazine advertisements and outdoor advertising in the Far East for our Calvin Klein subsidiary for which they received fees.  Saatchi & Saatchi Great Wall/Zenith

 

6



 

Optimedia China is an affiliate of Saatchi & Saatchi Worldwide located in China.  Ms. Baglivo serves as Chairman and Chief Executive Officer, The Americas, Saatchi & Saatchi Worldwide.

 

No family relationship exists between any director or executive officer of the Company.

 

Committees and Meetings

 

Our Corporate Governance Guidelines provide that each member of our Board of Directors is expected to use reasonable efforts to attend, in person, or by telephone, all meetings of the Board and of any committees of which they are a member, as well as the annual meeting of stockholders.  All of the current members of the Board attended the 2007 Annual Meeting of Stockholders.

 

There were six meetings of the Board of Directors during 2007.  All of the directors attended at least 75% of the aggregate number of meetings of the Board of Directors and the Committees of the Board of Directors on which they served held during the fiscal year.

 

Our non-management directors, all of whom are independent, meet regularly in executive sessions or in separate meetings without management or the management directors.  Mr. Nasella presides at the executive sessions of the non-management directors.

 

Our Board of Directors has a standing Audit Committee, a standing Compensation Committee, a standing Nominating & Governance Committee and a standing Performance Evaluation Committee.

 

Audit Committee

 

The Audit Committee is currently composed of Dr. Rodriguez and Messrs. Cohen and Maggin (Chairman), each of whom served on the Committee for the entirety of 2007.  Each of Dr. Rodriguez and Messrs. Cohen and Maggin has been determined by the Board to be independent for purposes of audit committee service under the New York Stock Exchange’s listing standards and Rule 10A-3 of the Exchange Act and an “audit committee financial expert,” as defined in Item 407 of Regulation S-K under the Exchange Act.

 

Our Board of Directors has adopted a written charter for the Audit Committee.  A copy of the charter is available without charge on our website, www.pvh.com, or by requesting a copy from the Secretary of the Company at the address listed on the last page of this Proxy Statement.  Pursuant to its charter, the Committee is charged with providing assistance to the Board of Directors in fulfilling the Board’s oversight functions relating to the quality and integrity of our financial reports, monitoring our financial reporting process and internal audit function, monitoring the outside auditing firm’s qualifications, independence and performance and performing such other activities consistent with its charter and our By-laws, as the Committee or the Board deems appropriate.  The Committee will also have such additional functions as are required by the New York Stock Exchange, the SEC and federal securities law.  The Committee is directly responsible for the appointment, compensation and oversight of the work of the outside auditing firm.

 

The Audit Committee held eight meetings during 2007.

 

Compensation Committee

 

The Compensation Committee is currently composed of Ms. Baglivo and Messrs. Nasella (Chairman) and Rydin.  Ms. Baglivo was appointed to the Committee upon her election to the Board in June 2007.   Mr. Marc Grosman, a former director of the Company, served as a member of the Committee until his retirement from the Board in June 2007.  Messrs. Nasella and Rydin were continuing members and served on the Committee for the entirety of 2007.  Our Chief Executive Officer, Chief Financial Officer, Senior Vice President, Human Resources and General Counsel regularly attend and participate in meetings, although they generally excuse themselves from the meetings during discussions or votes on sensitive or personal matters.

 

The Board of Directors has adopted a written charter for the Compensation Committee, which is available without charge on our website, www.pvh.com, or by requesting a copy from the Secretary of the Company at the address listed on the last page of this Proxy Statement.  The charter provides for the Committee to be composed of three or more directors.  All Committee members must be independent under the rules of the New York Stock Exchange, and must qualify as “outside” directors under Section 162(m) of the Internal Revenue Code of 1986, as amended, and as “non-employee” directors under Rule 16b-3 under the Exchange Act.  The Board has determined that all current members

 

7



 

satisfy (and Mr. Grosman satisfied) such requirements.  The Committee is charged with discharging the Board of Director’s responsibilities relating to the compensation of our Chief Executive Officer and all of our other “executive officers” as defined under New York Stock Exchange rules and covers both “executive officers” and “officers” under the Exchange Act.  The Committee also has overall responsibility for approving or recommending to the Board approval of and/or evaluating all of our compensation plans, policies and programs and is responsible for producing the annual report on executive compensation required to be included in the Proxy Statement for each annual meeting of stockholders.

 

Our Chief Executive Officer provides significant input on the compensation, including annual salary adjustments and grants of awards under our incentive plans, of the other executive officers.  As discussed below in “Compensation Disclosure and Analysis — Administration of Compensation Programs,” the Compensation Committee approves the compensation of these officers, taking into consideration the recommendations of the Chief Executive Officer.

 

The Compensation Committee has delegated limited authority to the Company’s Chief Executive Officer to make equity awards under our 2006 Stock Incentive Plan.  Pursuant to this authority, the Chief Executive Officer may grant, on an annual basis, a maximum of 100,000 shares, with each option treated as one share and each restricted stock unit granted treated as three shares, and may grant up to 5,000 options and 1,700 restricted stock units to each grantee.  The authority to grant equity awards to individuals whose compensation is set by the Compensation Committee, such as Section 16 officers and employees who are, or could be, a “covered employee” within the meaning of Section 162(m) of the Internal Revenue Code, however, rests with the Compensation Committee.

 

The Compensation Committee meets regularly throughout each year.  Compensation decisions regarding the most recently completed fiscal year (i.e., determination of bonuses under our Performance Incentive Bonus Plan and payouts under our Long-Term Incentive Plan, as well as discretionary bonuses) and the current fiscal year (i.e., establishing base salary, setting bonus and performance share targets and granting of option and restricted stock unit awards) are generally made at the meetings during the first quarter of the year.  In addition, the Committee considers and approves at these meetings any new incentive compensation plans or arrangements that need to be approved by our Board and/or our stockholders.  The other meetings are typically focused on reviewing our compensation programs generally and discussing potential changes to the program, including replacement or additional incentive compensation plans, as well as specific issues that arise during the course of the year (such as the need to amend plans as a result of regulatory changes or to address compensation issues relating to changes in and promotions among the executive officers).

 

The Compensation Committee held eight meetings during 2007.

 

Nominating & Governance Committee

 

The Nominating & Governance Committee currently consists of Ms. Jenkins and Messrs. Fuller (Chairman) and Marino.  Mr. Marino was appointed to the Committee upon his election to the Board in June 2007.  Mr. Grosman served as a member of the Committee until his retirement from the Board in June 2007.  Mr. Fuller and Ms. Jenkins were continuing members and served on the Committee for the entirety of 2007.  The Board of Directors has adopted a written charter for the Committee, which is available without charge on our website, www.pvh.com, or by requesting a copy from the Secretary of the Company at the address listed on the last page of this Proxy Statement.  The charter provides for the Committee to be composed of three or more directors, all of whom must meet the independence requirement under the rules of the New York Stock Exchange.  Our Board has determined that all current members satisfy (and Mr. Grosman satisfied) such requirement.

 

Pursuant to the charter, the Nominating & Governance Committee is charged with (1) assisting the Board of Directors by identifying individuals qualified to become Board members and recommending to the Board director nominees for the next annual meeting of stockholders, (2) recommending to the Board Corporate Governance Guidelines applicable to us, (3) overseeing the annual evaluation of the Board and management and (4) recommending to the Board director nominees for each committee.

 

The Nominating & Governance Committee will consider for election to the Board of Directors a nominee recommended by a stockholder if the recommendation is made in writing and includes (i) the qualifications of the proposed nominee to serve on the Board of Directors, (ii) the principal occupations and employment of the proposed nominee during the past five years, (iii) each directorship currently held by the proposed nominee and (iv) a statement that the proposed nominee has consented to the nomination.  The recommendation should be addressed to our Secretary.

 

The Nominating & Governance Committee seeks and evaluates individuals qualified to become Board members for recommendation to the Board when and as appropriate.  In evaluating potential candidates, and the need for new directors, the Committee may consider such factors, including, without limitation, professional experience and business,

 

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charitable or educational background, performance, age, service on other boards of directors and years of service on our Board, as the members deem appropriate.

 

In 2007, we paid fees to Heidrick & Struggles International, Inc., an executive search firm, to assist the Committee in identifying potential candidates to fill vacancies on the Board.

 

The Nominating & Governance Committee held five meetings during 2007.

 

Performance Evaluation Committee

 

The Performance Evaluation Committee is currently composed of Messrs. Fuller, Maggin and Nasella.

 

The Board of Directors has adopted a written charter for the Performance Evaluation Committee, which is available without charge on our website, www.pvh.com, or by requesting a copy from the Secretary of the Company at the address listed on the last page of this Proxy Statement.  The charter provides for the Committee to be composed of three or more directors, including the Chairman of each of the Audit, Compensation and Nominating & Governance Committees of the Board or their designees from their respective committees.  All Committee members must be independent under the rules of the New York Stock Exchange.  The Board has determined that all current members satisfy such requirements.  The Performance Evaluation Committee is charged with discharging the Board’s responsibilities under the rules of the New York Stock Exchange relating to the evaluation of our Chief Executive Officer or other person serving as the principal executive officer of the Company.

 

The Performance Evaluation Committee, which was established in 2007, did not formally meet during 2007.  However, the members of the Committee worked with each other and the Senior Vice President, Human Resources throughout the fiscal year to engage an outside consultant and conduct an evaluation of our Chief Executive Officer and his performance.

 

Other Corporate Governance Policies

 

Corporate Governance Guidelines

 

Our Board of Directors has adopted Corporate Governance Guidelines applicable to us.  The Nominating & Governance Committee reviews the Guidelines annually to determine whether to recommend changes to the Board to reflect new laws, rules and regulations and developing governance practices.  The Guidelines address several key areas of corporate governance, including director qualifications and responsibilities, Board committees and their charters, director independence, director access to management, director compensation, director orientation and education, evaluation of the Chief Executive Officer, management development and succession planning, and annual performance evaluations for the Board.  The Guidelines are available on our website, www.pvh.com.  Stockholders may also contact the Secretary of the Company at the address listed on the last page of this Proxy Statement to obtain a copy of the Guidelines without charge.

 

Code of Ethics; Code of Business Conduct and Ethics

 

We have a Code of Ethics for our Chief Executive Officer and our senior financial officers.  In addition, we have a Code of Business Conduct and Ethics for our directors, officers and employees.  These codes are posted on our website, www.pvh.com.  Stockholders may contact the Secretary of the Company at the address listed on the last page of this Proxy Statement to obtain a copy of either of these codes without charge.  We intend to disclose on our website any amendments to, or waivers of, the Code of Ethics that would otherwise be reportable on a current report on Form 8-K.  Such disclosure would be posted within four days following the date of the amendment or waiver.

 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 

Based upon our review of the filings furnished to us pursuant to Rule 16a-3(e) promulgated under the Exchange Act and on representations from our executive officers and directors, all filing requirements of Section 16(a) of the Exchange Act were complied with during the fiscal year ended February 3, 2008.

 

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COMPENSATION COMMITTEE REPORT

 

The Compensation Committee of our Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis section of this Proxy Statement. Based on this review and discussion, the Committee has recommended to the Board that the Compensation Discussion and Analysis section be included in this Proxy Statement.

 

Compensation Committee

 

Henry Nasella, Chairman

Mary Baglivo

Craig Rydin

 

COMPENSATION DISCUSSION AND ANALYSIS

 

Overview

 

The following discussion and analysis is intended to provide you with an explanation of our current compensation program, with particular regard towards the compensation of our Chief Executive Officer, our Chief Financial Officer and our four most highly compensated executive officers, other than our Chief Executive Officer and Chief Financial Officer. We refer to these executive officers, collectively, as the “Named Executive Officers” throughout this Proxy Statement. We have included an additional officer in order to present compensation information for all of our executive officers, all of whom are members of the our operating committee, and in order to have a consistent group of “Named Executive Officers” from year to year.

 

The discussion includes our compensation philosophy and the program’s objectives, the elements of compensation used to pay our executives, and historical information regarding how our program has developed and how that relates to how our executive officers are currently compensated. We also address the particulars of the compensation we paid to the Named Executive Officers in 2007 and how our compensation program is administered. Although the discussion and analysis contained in this section is framed in terms of “our” (i.e., management’s) approach to compensation and also speaks to actions taken by the Compensation Committee of our Board of Directors, it should be noted that the entirety of our compensation program is a cooperative effort among management, the Compensation Committee and the full Board of Directors, with advice from an outside, independent compensation consultant, and the discussion and analysis is a reflection of that cooperative effort.

 

Compensation Committee Purpose and Function

 

The Compensation Committee is responsible for fulfilling its responsibilities relating to the compensation of our Chief Executive Officer and all of our other “executive officers.”  “Executive officers” is defined for these purposes by a New York Stock Exchange rule as all “officers” and “executive officers” under Rule 16a-1(f) of the Exchange Act and includes all of our Named Executive Officers, as well as four other senior executives. The Committee is also the administrative committee for all of our incentive compensation plans. The Committee also has overall responsibility for approving or recommending to our Board approval of and/or evaluating all of our compensation plans, policies and programs.

 

Compensation Consultant

 

The Compensation Committee has engaged a compensation consultant, Executive Compensation Advisors, an affiliate of Korn/Ferry International, to advise it on all matters related to the compensation of our Chief Executive Officer and the other executive officers and our compensation plans. The Committee used Executive Compensation Advisors in establishing compensation for 2007 and the current year and Mercer Human Resource Consulting for 2006 (and for several prior years).

 

The Compensation Committee directs the compensation consultant. The compensation consultant meets and works with the Committee, and the Chairman of the Committee, as well as with our Chief Executive Officer and our Senior Vice President, Human Resources, in developing each year’s compensation packages and any compensation plans to be considered by the Committee. Each year, the Committee identifies the aspects of the compensation program on which the compensation consultant should focus its efforts. In 2007, the Committee requested that the compensation consultant focus on the use of restricted stock units in lieu of, or in addition to, stock options and the use of performance share awards under our stock incentive plan instead of cash awards under our long-term incentive plan. The Senior Vice President,

 

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Human Resources provides additional guidance to the Committee and reviews drafts of the materials the compensation consultant prepares for distribution to the Committee. The compensation consultant is used primarily to compile peer data, prepare tally sheets, help identify the appropriate types and terms of incentive compensation plans (e.g., in 2006, when our stock option plan had only a small number of shares available for grants, the consultant provided guidance on whether the awards under the replacement plan should be strictly options, as had been our practice until that time, or include other types of equity awards) and address developments in executive compensation. Additionally, the consultant is used to address specific issues identified by the Committee.

 

Executive Compensation Advisors also advises our Board’s Nominating & Governance Committee on director compensation. We have established a policy that management will not retain Executive Compensation Advisors, Korn/Ferry International or any other affiliate of Korn/Ferry International for any purpose without first informing and obtaining the approval of the Compensation Committee. No such approval has been sought by management.

 

Compensation Objectives

 

Our compensation program has four objectives:

 

(i)    to compensate our executive officers on an annual basis with a stable, secure cash salary at a market competitive level to retain and motivate these individuals and to attract new executives when necessary;

 

(ii)   to provide short-term and long-term incentives to our executive officers to attain certain financial targets and to reward certain accomplishments or activities;

 

(iii)  to link a portion of our executive officers’ compensation to long-term increases in value created for our stockholders by the efforts of these individuals; and

 

(iv)  to be consistent with our high ethical standards.

 

Our compensation program is structured to incentivize our executive officers to improve our performance, grow our business and increase stockholder value and to reward them if they attain these objectives. Consistent with this pay-for-performance philosophy, the incentive components listed in items (ii) and (iii) comprise the largest portions of the compensation packages and require improved performance levels of our stock (in the case of stock options and restricted stock units) and the attainment of earnings per share, return on equity and/or divisional earnings improvement (in the case of other incentives) in order for our Named Executive Officers to earn the majority of their potential compensation.

 

Both objective and subjective factors are considered in making compensation decisions for individuals and in establishing compensation plans, policies and programs. These factors include, but are not limited to, compensation practices of competitors, relative compensation within our executive group, individual, business unit and corporate performance, tenure with the Company, job responsibility, potential for advancement and the recommendations of the top executive officers, including the Chief Executive Officer. There is no specific weight assigned to these factors and no one factor nor group of factors is dispositive in establishing the compensation packages for our Named Executive Officers.

 

Compensation Procedure and Philosophy

 

The compensation of our executive officers is based upon the philosophy that executive compensation should be aligned with financial performance and stockholder value. We strive to attract and retain highly qualified talent by rewarding superior, measurable performance. The Compensation Committee annually reviews practices within our peer group and the marketplace to ensure that our practices are consistent with stockholder interests, applicable compliance requirements and the ability to recruit, retain and motivate qualified associates.

 

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Compensation Components

 

Compensation for our executive officers includes the following:

 

(i)    short-term components consisting of base salary and annual cash bonuses, principally under our Performance Incentive Bonus Plan;

 

(ii)   long-term components consisting of time-based stock options and restricted stock units, cash awards under our Long-Term Incentive Plan and performance share awards; and

 

(iii)  a benefits component.

 

Our Stock Incentive Plan permits the granting of the equity awards identified above, as well as restricted stock, stock appreciation rights and other stock-based awards. Prior to 2006, our only permissible form of equity-based compensation had been stock options. As discussed below, the Compensation Committee began granting restricted stock units and performance share awards in 2007. In establishing future executive officer compensation packages, the Committee may utilize the other types of awards available under the Stock Incentive Plan and/or adopt additional long-term incentive and/or annual incentive plans to meet the needs of changing employment markets and economic, accounting and tax conditions. It is anticipated that any such new plans would be submitted to stockholders for approval.

 

Our compensation program does not rely to any significant extent on pension and welfare benefits or perquisites. However, we believe that, taken as a whole, our pension and welfare benefit plans are generally competitive. We also believe that the benefits offered under these plans and programs to executive officers serve a different purpose than do the other components of compensation. In general, they are designed to provide a safety net of protection against the financial catastrophes that can result from illness, disability or death, and to provide a reasonable level of retirement income based on compensation and years of service. Benefits offered to executive officers are those that are offered to the general employee population, with some variation, including to promote tax efficiency and replacement of benefit opportunities lost due to regulatory limits.

 

Administration of Compensation Programs

 

Our management, the Compensation Committee, our Board of Directors and the compensation consultant work in a cooperative fashion. The compensation consultant advises the Committee on compensation developments, plan design and similar matters, as well as in developing compensation packages and providing market data. New plans, plan amendments and the overall compensation program are presented to the Board by the Committee, which then reviews and considers them for approval. The Board also reviews annually the proposed compensation package for our Chief Executive Officer, prior to its approval by the Committee, and approves any material changes in our Chief Executive Officer’s compensation arrangements. Management works with the Committee and the compensation consultant to report on executive performance, particular business issues facing an executive or his or her division, and management’s views on the efficacy of and incentives behind the compensation program in order to assist in the establishment of performance goals, the adjustment of salaries, the award of discretionary bonuses and related matters.

 

Our Chief Executive Officer provides input on and makes recommendations with respect to the compensation, including annual salary adjustments and grants of awards under our incentive plans, of the officers whose compensation is set by the Compensation Committee, including the other Named Executive Officers. The Committee approves the compensation of these officers taking into consideration his input and recommendations. Our Chief Executive Officer also discusses his own compensation with the Chairman of the Committee and makes a request regarding any salary increase and change in incentive awards. These requests are considered by the Committee in connection with the Committee’s annual compensation decisions with respect to our Chief Executive Officer.

 

Our executive officer compensation program and the compensation package of each executive officer are reviewed annually by the Compensation Committee. On a program-wide basis, the Committee considers whether our incentive plans provide appropriate means of compensating our executives (e.g., cash versus stock, time-based versus performance-based incentives, etc.), the proximity of the expiration of existing plans, stock availability under existing plans and developments in the field of incentive compensation. We seek to use generally accepted and commonly used types of plans and awards that provide clear accounting treatment and that are understandable to stockholders and executives alike. We have designed our newest plans to be flexible in their application so that we have the tools available to develop compensation packages with the appropriate mix of fixed and at-risk components, short- and long-term incentives, and cash and equity awards with appropriate terms. In making decisions regarding changes to our compensation program and our executive officers’ compensation packages, the Committee is guided by the philosophy that a majority of our

 

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executive officers’ compensation packages should consist of components that are linked to business, corporate and/or stock performance.

 

The Compensation Committee’s annual review also includes consideration of the various elements of our executive compensation packages, including whether there should be general or specific salary increases, whether potential payouts as a percentage of salary should change, and whether to alter the mix between cash and equity compensation. This review also addresses the more specific issues of setting targets under our incentive plans and whether an individual executive’s performance, promotion or change in circumstances warrant changes to his or her compensation package that are different from the other executives as a group.

 

Industry Peer Group

 

The Compensation Committee considers a study compiled by its compensation consultant of compensation packages for an industry peer group, generally culled from public filings, and published compensation benchmark surveys as part of its review when considering the packages. The companies in the peer group are identified by the compensation consultant and approved by the Committee on an annual basis. The peer group is used to provide market context for compensation decisions, both because these are the companies with which we compete for executive talent and because their general similarity in size, business and economics aid the Committee in assessing the reasonableness of our compensation packages. In formulating the peer group, the consultant identifies companies with a similar business mix and of a comparable size to us. The peer group for 2007 consisted of the following public companies in the apparel and footwear industry:

 

·

 

Burberry Limited;

·

 

Coach, Inc.;

·

 

Guess?, Inc.;

·

 

Jones Apparel Group, Inc.;

·

 

Kellwood Co.;

·

 

Kenneth Cole Productions, Inc.;

·

 

Liz Claiborne Inc.;

·

 

Oxford Industries, Inc.;

·

 

Perry Ellis International, Inc.;

·

 

Polo Ralph Lauren Corporation;

·

 

Quicksilver, Inc.;

·

 

The Timberland Company;

·

 

VF Corp.; and

·

 

Warnaco Group, Inc.

 

Although VF Corp. and Kenneth Cole Productions, Inc. may not be considered to be of comparable size, we included them because their businesses are similar to ours and the compensation consultant has advised us that their inclusion is preferable in creating a proper sized group for benchmarking.

 

The peer group is reviewed annually, and companies have come into or out of the group over the years due to going public, going private, being acquired, or emerging from bankruptcy. For example, Tommy Hilfiger Corporation, which was our peer group in 2006, was removed for 2007 because it ceased to be a public company in May 2006. Another example is Hanesbrands Inc., which became a public company in 2006. Hanesbrands did not have sufficient compensation data publicly available when compensation data was considered in 2007 but has been added to the peer group for 2008, as there is now sufficient data available as we make decisions regarding 2008 compensation.

 

Use of Tally Sheets

 

We instituted the practice of using tally sheets when reviewing the compensation packages for our Named Executive Officers beginning in 2006. The tally sheets cover prior year compensation, proposed compensation for the then current year and eight different termination of employment scenarios, including termination with or without cause or for good reason, voluntary termination, normal and early retirement and termination after a change in control, and 12 elements of compensation, including severance, value receivable under cash incentive, equity, pension, savings and deferred compensation plans, as well as the value of any tax gross-ups.

 

The tally sheets provide both a snapshot of current compensation opportunities and benefits and a quantification of payments and other value an executive would receive in various termination of employment scenarios. As such, they

 

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enable the Compensation Committee to see and evaluate the full range of executive compensation, understand the magnitude of potential payouts as a result of retirement, change in control and other events resulting in termination of employment, and consider changes to our compensation program, arrangements and plans in light of “best practices” and emerging trends. The Committee considers the information provided through the tally sheets, along with financial and market performance, individual performance, internal pay equity and peer and market data in making its compensation decisions.

 

Consideration of Wealth Accumulation

 

While the Compensation Committee does look at “wealth accumulation” calculations – how much an executive is projected to accrue over time or receive through certain benefits – it does not believe it to be a determinative factor on its own, but rather must be looked at considering all relevant factors. The reason for this view is two-fold. First, we believe it both necessary and appropriate to continue to compensate our executives for their on-going individual performance and the Company’s on-going performance and provide pension and other post-employment benefits that properly reflect years of service. We believe that were we to discontinue incentive compensation awards, benefit accruals or other components of compensation, there could be less of an incentive for our executives to continue to perform at the high levels at which we believe they have performed and could even cause them to seek alternative employment at a competitor who would offer a full range of incentive compensation. Reducing an executive’s compensation as a result of the amount of prior compensation (which is largely dependent upon our financial and stock performance) would unfairly penalize an executive for the executive’s and the Company’s past success. Moreover, because the most significant vehicle for wealth accumulation is equity awards, and the amount of the benefit of equity awards is largely dependent on creating stockholder value through increases in the price of our stock, executives receive the full benefit from equity awards only with improved company performance and the resulting improvement in share price. This is consistent with aligning stockholder and management’s interests. We do, of course, consider factors such as whether the mix of compensation needs to change over time to reflect changes relative to the Company (such as a change in growth trajectory), and the individual executive (such as proximity to retirement). We also consider whether existing long-term awards already provide sufficient incentives to retain and motivate our executives, such that an additional award is not warranted with respect to an overlapping period, and whether existing awards payout as expected and produce the desired results. In addition, other adjustments will be made as the need arises, for instance as a result of changes in applicable tax or accounting rules, to encourage different desirable results.

 

Second, we historically have had executives with long tenures. All of our prior chief executive officers were employed with the Company for more than 30 years. The average tenure (including, in one case, service with a business we acquired) of our Named Executive Officers is over 14 years. The remaining 26 members of our senior executive team have an average tenure (including, in two cases, service with a business we acquired) of over 17 years. As a result, retirement plan values are significant. Although some of these plans, such as the AIPs (our 401(k) plan) and Supplemental Savings Plan (a non-qualified deferred compensation plan), are largely funded by the executive through payroll deductions, those plans also include Company matching contribution, and we also provide Company-funded pension plans.

 

Targeted Compensation

 

The compensation levels of our top two executives, Messrs. Chirico and Sirkin, are targeted to approximate the peer group median if we achieve our budget, to exceed the median and approach the 75th percentile of competitive compensation levels if we exceed our budget and to be below the competitive median if our budget is not attained. A similar approach is taken with respect to the other Named Executive Officers. We focus on the median and refer to the 25th and 75th percentiles of the peer group data to understand the market range. We use this approach, as our consultant has demonstrated that it diminishes the disproportionate affect caused by the “outliers” that pay well above or well below the balance of the group. This benchmarking explains the differences in the compensation among our Named Executive Officers, including the differences in the percentage of base salary payable under our incentive awards. Other than these differences, our policies and decisions relating to our Named Executive Officers are not materially different among these officers.

 

When establishing annual compensation for our Named Executive Officers, the Compensation Committee considers the following as constituting total potential compensation:

 

·

 

base salary (for the one year period that begins on June 1 of each year, which is when base salary increases generally take effect);

 

 

 

·

 

potential bonus under the Performance Incentive Bonus Plan for the then current fiscal year;

 

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·

 

potential value to be received under cash long-term incentive awards and performance share awards;

 

 

 

·

 

stock option grants, valued based upon the methodology provided by the compensation consultant (with the value of certain grants, such as special grants made in connection with promotions, being spread over multiple years); and

 

 

 

·

 

restricted stock unit grants, valued based on the current price of our Common Stock.

 

Payouts under our Performance Incentive Bonus Plan and our cash-based Long-Term Incentive Plan and of performance share awards under our Stock Incentive Plan are dependent upon, and vary with, our performance. As such, the value of these awards, as well as each Named Executive Officer’s total compensation, is considered at threshold, target and maximum levels.

 

We compare the potential total compensation that a Named Executive Officer can earn to the comparable peer group positions to ensure that the amounts are consistent with the desired benchmarking for the Named Executive Officers’ compensation.

 

We look at the total compensation paid or expected to be paid to the Named Executive Officers for a fiscal year when establishing the compensation package for the immediately following fiscal year. We then compare the total compensation to that of the most comparable executives at the companies in the peer group and how our financial performance (based on earnings per share and return on equity over a one-year and three-year period) compares to that of the peer group. We then compare each Named Executive Officer’s compensation percentile to our financial performance percentile against the peer group. This is done because we believe that the compensation of a Named Executive Officer to that of the peer group should be aligned with our relative financial performance. In the event that these measures are not aligned, the Compensation Committee will consider this when setting the following year’s compensation.

 

Key Elements of Compensation

 

Allocation Among Compensation Components

 

Our compensation program does not provide for a specific mix of base salary, annual incentive and long-term incentive components. Ideally, we would like salaries to approximate the median, while the other components would provide for annual cash compensation and total compensation to reach the levels discussed above based on short-term and long-term performance.

 

For most of our history, we had no bonus or other incentive compensation plans, other than stock options. Furthermore, we were limited (and continue to be limited) in the number of options and other equity awards we could grant to individuals, as we had relatively small option plans due to a small market capitalization and the need to temper possible dilution. Also limiting our ability to give large grants is our long-standing practice of awarding options to a relatively large group of our associates. As a result, salaries were generally increased annually (other than the chief executive officer’s salary) and tended to be higher than otherwise might have been desired for the fixed portion of our compensation packages. Base salaries being a higher percentage of the total compensation package has also been the result of our good fortune of generally having a long-tenured executive management team that we believe is highly qualified and responsible for our success, as we had to award raises continuously on top of base salaries that were higher than the peer group data would suggest they should be because of the lack of other compensation elements to award performance and achievement.

 

We instituted annual performance-based bonus plans in an effort to slow down increases of base salaries and provide for performance-based incentive compensation in addition to the long-term incentive provided through stock options. In addition, we instituted for certain of our executive officers a cash-based long-term incentive plan to address further the base salary issue, as well as shortfalls in total compensation (when comparing our executive officer compensation to our peer group) due, in part, to the inability to use stock-based awards. In 2007, we began to make awards of performance shares, which serve the same purpose as the long-term incentive plan awards but payout in stock in lieu of making awards under the cash-based Long-Term Incentive Plan. The performance share awards were made only to the Named Executive Officers.

 

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Base Salaries

 

Annual salaries are determined by evaluating our overall performance, the performance of each individual executive officer, and the performance of their division for operational executives, as well as by considering market forces, peer data and other general factors believed to be relevant, including time between salary increases, promotion (and, if applicable, the base salary of the predecessor in the position), expansion of responsibilities, advancement potential, and the execution of special or difficult assignments. Additionally, the Compensation Committee takes into account the relative salaries of the Named Executive Officers and determines what it believes are appropriate compensation level distinctions between our Chief Executive Officer and the other Named Executive Officers and among each of the other Named Executive Officers. There is no specific relationship between achieving or failing to achieve budgeted estimates or our stock or financial performance and the annual salaries determined by the Committee for any of the executive officers. No specific weight is attributed to any of the factors considered by the Committee; the Committee considers all factors and makes a subjective determination, based upon the experience of its members, the information and analysis provided by the compensation consultant and the recommendations of the Chief Executive Officer and the Senior Vice President, Human Resources. The information provided by the compensation consultant includes both publicly available data of the peer group and third party compensation surveys.

 

We have made a concerted effort to hold down base salaries in recent years and have, instead, increased the opportunity under both the short-term and long-term performance-based components of compensation. However, we have continued to grant salary increases to the Named Executive Officers related to promotions, expansion of responsibilities, and advancement potential, and to take into account the relative salaries of the Named Executive Officers. Under this practice, Mr. Shaffer and Mr. Zaccaro each received an increase of $50,000 in 2007. These increases were made as part of their annual reviews to bring their salaries more closely in line with comparable positions in the peer group, as well as the relative salaries among the Named Executive Officers. In addition, Mr. Sirkin received a $10,000 increase in 2007 to defray the cost of certain of his perquisites that were eliminated.

 

Short-Term Incentives

 

Performance Incentive Bonus Plan. The purpose of our 2005 Performance Incentive Bonus Plan is to provide cash compensation on an annual basis that is at-risk and contingent on the achievement of overall Company performance or divisional performance, as appropriate. The Plan allows for goals to be set based upon numerous different performance criteria, but to date the Compensation Committee has only set targets based on our earnings per share or the net earnings of our businesses during the applicable year. These goals were chosen based on the advice of the compensation consultant as to what measures of performance are used by the companies in our industry peer group and are accepted by investors and analysts as performance measures that contribute to stockholder value.

 

The Named Executive Officers can receive bonuses under our 2005 Performance Incentive Bonus Plan. Bonuses for the Chief Executive, Chief Operating and Chief Financial Officers are based on annual earnings goals for the Company as a whole. Typically, to pay out at the target level, the Company must have earnings per share that falls within the guidance management provides to the financial market based on the budget approved by the Board of Directors. Bonus compensation in the case of the Vice Chairmen and the President of Calvin Klein are principally based on the annual earnings goals for their respective divisions, but also have a component based on annual earnings targets for the Company as a whole. The divisional earnings goals are the budgeted earnings included in the annual budget approved by the Board and upon which management provides earnings and revenues guidance to the financial market. The goals exclude special items identified at the time the awards are made.

 

As discussed below, Messrs. Shaffer, Murry and Zaccaro were granted increased performance incentive bonus payouts for 2007 in lieu of a performance share award for a one-year performance cycle. See “– Key Elements of Compensation – Long-Term Incentives – Long-Term Incentive Plan Awards and Performance Share Awards.”

 

The Compensation Committee established targets for 2007 for the Named Executive Officers in April 2007. The targets, which are based on our annual corporate earnings guidance, were as follows:

 

Threshold
Earnings
Per Share

 

Increase
Over Prior
Year EPS(1)

 

Target
Earnings
Per Share

 

Increase
Over Prior
Year EPS(1)

 

Maximum
Earnings Per
Share

 

Increase
Over Prior
Year EPS(1)

 

($)

 

(%)

 

($)

 

(%)

 

($)

 

(%)

 

2.92

 

11

 

3.02

 

15

 

3.42

 

31

 

 

(Footnote appears on following page)

 

 

16



 

(Footnote to table on previous page)

 


(1)

 

Our 2006 earnings per share to which the above amounts are compared excluded special items. The excluded items included (but were not limited to) the costs of the secondary offering of our Common Stock completed in May 2006, costs associated with our closing in May 2006 of our dress shirt facility in Ozark, Alabama, costs relating to the departure of our former Chief Executive Officer, and a one time pre-tax gain associated with our sale of minority interests in certain entities that operate various licensed Calvin Klein jeans and sportswear businesses in Europe and Asia. As such, our 2006 earnings per share constitutes a “non-GAAP financial measure,” which is how we look at our performance as compared to other periods. The above amounts were based upon the budget reviewed and approved by our Board for 2007.

 

Our 2007 actual earnings per share were $3.21, representing a 22.5% increase over 2006 non-GAAP earnings per share. Each of the Named Executive Officers who received payouts with respect to our annual corporate earnings earned bonuses with respect to this component for 2007 at an amount between the target and maximum levels as a result.

 

The potential payouts (as percentage of base salary) and actual payouts (as percentage of base salary and in dollar amounts) were as follows with respect to Messrs. Chirico, Sirkin and Shaffer, the Named Executive Officers who received payouts based solely on our annual corporate earnings:

 

Name

 

Threshold

 

Target

 

Maximum

 

Actual

 

Actual

 

 

 

(%)

 

(%)

 

(%)

 

(%)

 

($)

 

Mr. Chirico

 

50

 

100

 

200

 

147.5

 

1,475,000

 

Mr. Sirkin

 

40

 

75

 

195

 

132.0

 

1,201,200

 

Mr. Shaffer

 

40

(1)

80

(1)

190

(1)

132.3

(1)

628,188

(1)

 


(1)          Includes 10%, 20% and 40% of base salary that was payable in lieu of a grant of a performance share award for a one-year performance cycle at the threshold, target and maximum levels, respectively, and 29.5% (a payment of $140,125) actually paid in lieu of such performance share award.

 

Messrs. Duane, Murry and Zaccaro received bonus payouts based upon our total corporate earnings and the net earnings of the businesses or divisions for which each has overall responsibility - our wholesale dress shirt and sportswear divisions for Mr. Duane, our Calvin Klein licensing, advertising and retail businesses for Mr. Murry, and our IZOD, Van Heusen, Geoffrey Beene and Bass retail businesses for Mr. Zaccaro.

 

The divisional targets based on net earnings, which include an interest charge and exclude certain corporate charges used for segment reporting, for these executives were as set forth below. We would typically expect to award bonuses based only on growth of a business. However, the 2007 target level of earnings for our wholesale dress shirt and sportswear divisions combined was lower than actual 2006 earnings primarily due to the expected start-up costs associated with our Timberland wholesale sportswear business, and the 2007 target level for our Calvin Klein licensing, advertising and retail businesses was lower than actual 2006 earnings primarily due to the expected start-up costs associated our Calvin Klein specialty retail stores. The 2007 target level for our IZOD, Van Heusen, Geoffrey Beene and Bass retail businesses was lower than actual 2006 earnings due to conservative expected increases in comparable store sales.

 

 

Name

 

Threshold

 

Increase Over
Prior Year
Net Earnings

 

Target

 

Increase Over
Prior Year
Net Earnings

 

Maximum

 

Increase Over
Prior Year
Net Earnings

 

 

 

($)

 

(%)

 

($)

 

(%)

 

($)

 

(%)

 

Mr. Duane

 

149,124,000

 

(6.1

)

151,754,000

 

(4.4

)

167,534,000

 

5.5

 

Mr. Murry

 

118,105,000

 

(4.3

)

120,680,000

 

(2.2

)

136,127,000

 

10.3

 

Mr. Zaccaro

 

37,721,000

 

(12.8

)

39,614,000

 

(8.5

)

50,969,000

 

17.8

 

 

17



 

The potential payouts (as percentages of base salary) and actual payouts (as percentage of base salary and in dollar amounts) for these executives were as follows:

 

Name

 

Earnings
Component

 

Threshold

 

Target

 

Maximum

 

Actual

 

Actual

 

 

 

 

 

(%)

 

(%)

 

(%)

 

(%)

 

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Duane

 

Company

 

5.0

 

10.0

 

25.0

 

17.1

 

137,000

 

 

 

Division

 

25.0

 

50.0

 

125.0

 

48.8

 

390,000

 

 

 

Total

 

30.0

 

60.0

 

150.0

 

65.9

 

527,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Murry

 

Company

 

12.5

(1)

25.0

(1)

55.0

(1)

39.3

(1)

333,625

(1)

 

 

Division

 

25.0

 

50.0

 

125.0

 

125.0

 

1,062,500

 

 

 

Total

 

37.5

 

75.0

 

180.0

 

164.3

 

1,396,125

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Zaccaro

 

Company

 

12.5

(1)

25.0

(1)

55.0

(1)

39.3

(1)

294,375

(1)

 

 

Division

 

25.0

 

50.0

 

125.0

 

0.0

 

0

 

 

 

Total

 

37.5

 

75.0

 

180.0

 

39.3

 

294,375

 

 


(1)

 

Includes 7.5%, 15% and 30% of base salary that was payable in lieu of a grant of a performance share award for a one-year performance cycle at the threshold, target and maximum levels, respectively, and 22.1% (a payment of $188,063 for Mr. Murry and $165,938 for Mr. Zaccaro) actually paid in lieu of such performance share award.

 

Discretionary Bonuses. The Compensation Committee has the authority to award annual bonuses to executive officers on a discretionary basis. The Committee typically awards discretionary bonuses for undertaking additional duties or accomplishing specific projects or achieving specific benefits for the Company, such as special efforts in connection with a transaction, the disposition on favorable terms of corporate assets and special efforts in connection with corporate initiatives. The Committee may also award discretionary bonuses based on other factors. The Committee has the authority to place restrictions, such as a vesting period, on any discretionary bonus it awards to an executive officer.

 

We paid discretionary bonuses for 2007 to Messrs. Zaccaro and Duane to recognize accomplishments not reflected in the financial performance that drives the formulaic bonuses payable to them in respect of the businesses or divisions for which each has overall responsibility.

 

We paid Mr. Zaccaro a $100,000 discretionary bonus to recognize his role in the improved economic performance of the Bass retail business, the development of a concept for a specialty retail store test for our heritage brands and providing guidance to the Van Heusen and IZOD brand teams assembled as part of an initiative to maintain the focus of each of our owned brands and to address changes in consumer habits and attitudes and the retail landscape.

 

We paid Mr. Duane a $330,000 discretionary bonus to recognize his oversight and guidance of our newly assembled Timberland and IZOD women’s sportswear teams in connection with the upcoming launch of our Timberland line and the successful launch of the in-house IZOD women’s sportswear business. This bonus also reflects Mr. Duane’s role in the development and successful roll-out of the new Calvin Klein sportswear shop-in-shop concepts and successful expansion of the distribution of the collection, in guiding the ARROW and IZOD brand teams in connection with the brand initiative described above, and in executing an initiative to improve dress shirt inventories with certain accounts designed to increase sales and turnover.

 

The Compensation Committee considered the recommendations of the Chief Executive Officer, the compensation paid to Messrs. Duane and Zaccaro in prior years, and the targeted compensation for Messrs. Duane and Zaccaro for 2008 in establishing the amount of the discretionary bonuses.

 

Long-Term Incentives

 

Stock Options and Restricted Stock Units. We grant stock options and/or restricted stock units to the Named Executive Officers. These awards are made based on the fair value of the grant. These awards are granted to the Named Executive Officers in an amount such that the value of the award, when combined with base salaries, potential bonuses under the Performance Incentive Bonus Plan and potential payouts under the Long-Term Incentive Plan and/or as a result of the vesting of performance shares awards, would generally provide for compensation consistent with our compensation philosophy described above.

 

18



 

Our sole equity-based compensation through 2006 had been stock options granted under various stock option plans approved by stockholders. Stock options are designed to align the interests of grantees with those of our stockholders and their value is at-risk. Generally, the options we have granted may not be exercised until the first anniversary of the date of grant and become fully exercisable in equal annual installments through the fourth anniversary of the date of the grant. The stock options granted to our Named Executive Officers typically remain exercisable during employment until the tenth anniversary of the date of grant. We believe that this approach provides an incentive to the executive to increase stockholder value over the long term, since the full benefit of the options granted cannot be realized unless stock price appreciation occurs over a number of years.

 

We began to issue restricted stock units in 2007. Restricted stock units represent the right to receive one share of Common Stock for each unit awarded, subject to vesting. The restricted stock unit grants vest in increments of 25%, 25% and 50% on the second, third and fourth anniversaries of the date of grant, respectively, and are settled by the delivery of stock as soon as practicable after the vesting date. Our decision to grant restricted stock units was based on our belief that while stock options have their benefits, restricted stock units generally better align the interests of grantees with stockholders, as both increases and decreases in our stock price have the same effect on associates holding restricted stock units as they do on stockholders. We use a different vesting schedule for restricted stock units than we do with options because we believe the later start to the commencement of vesting of restricted stock units better aligns associates’ interests with those of longer-term stockholders and provides an effective retention tool, which we believe further benefits stockholders. We believe that associates generally place more value on restricted stock units and are better incentivized to increase stockholder value because restricted stock units have a clear value – market price – at the time of grant and are clearly affected by the rise and fall of our stock price. This is compared to stock options, which may be perceived by some to have little or no value at the time of grant as they may never be realized as compensation unless the stock price exceeds the exercise price. Our decision to award restricted stock units also helped reinforce the Board’s decision to adopt ownership guidelines for the Named Executive Officers in 2008, as discussed below. The decision to grant restricted stock units was made in consultation with our compensation consultant, who advised us that other comparable companies were granting restricted stock units in lieu, of or in addition to stock options.

 

With one exception, we granted both options and restricted stock units to the Named Executive Officers. This decision was made to obtain the benefits of both restricted stock units, which we believe better align grantees’ interests to that of stockholders, and stock options, which we believe better capture pay for performance by providing a reward only if our stock price increases. We did not grant stock options to Mr. Sirkin in 2007. In connection with his promotion to Chief Operating Officer, Mr. Sirkin received a grant of 135,000 stock options in January 2006 which vests in three unequal installments (of which 15,000 shares underlying the grant vested six months after the grant date, 60,000 shares underlying the grant vested on the second anniversary of the grant and 60,000 shares underlying the grant will vest on the third anniversary of the grant) and was intended to replace his option grants for the following three years. The reason for the different vesting terms from the standard vesting terms is to reflect the proximity Mr. Sirkin is to retirement age and to ensure that he completes his expected and desired service over this time period.

 

Timing of Equity Awards. Our equity award policy provides that the annual equity grant to Named Executive Officers generally will be approved by the Compensation Committee at a Committee meeting held during the period commencing two days after the public release of the prior year’s earnings results and ending two weeks prior to the end of the first fiscal quarter of the current year. Equity awards may be made to the Named Executive Officers outside of the annual grant process in connection with a promotion, assumption of new or additional duties or other appropriate reason. All such grants to Named Executive Officers must be approved by the Committee and will generally be made on the first business day of the month following the effective date of the promotion or the assumption of new or additional duties or the date of the precipitating event, as applicable. The Committee retains the discretion not to make grants at the times provided in the policy if the members determine it is not appropriate to make a grant at such time. Additionally, the Committee retains the discretion to make grants, including an annual equity grant, at times other than as provided in the policy if the members determine circumstances, such as changes in accounting and tax regulations, warrant making a grant at such other times.

 

The exercise price of options granted is required to be equal to the “fair market value” of a share of our Common Stock on the date of grant. Fair market value is currently defined as the closing price of our Common Stock on the date of grant.

 

Long-Term Incentive Plan Awards and Performance Share Awards. Our Named Executive Officers are eligible to receive awards under our 2005 Long-Term Incentive Plan. The LTIP provides for cash payouts upon the achievement of goals established by the Compensation Committee at the beginning of each performance cycle. Performance cycles typically consist of three consecutive fiscal year periods, although the LTIP permits cycles of any

 

19



 

length in excess of 12 months. The purpose of the LTIP is to provide cash compensation that is at-risk and contingent on the achievement of the selected performance criteria over an extended period.

 

Our Named Executive Officers are also eligible to receive awards of performance shares under our 2006 Stock Incentive Plan. In 2007, we began using performance shares in lieu of awards under the Long-Term Incentive Plan. These performance share awards use the same cycles and performance measures as the LTIP, but provide for payouts in shares of our Common Stock instead of cash upon the achievement of the goals established by the Compensation Committee at the beginning of each performance cycle. Although performance cycles are expected to typically consist of three consecutive fiscal year periods, as was the case with LTIP awards, Messrs. Shaffer, Murry and Zaccaro were also given awards of performance shares for a two fiscal year period covering 2007 and 2008, as explained below. The purpose of performance share awards is to provide compensation in the form of Common Stock that is at-risk and contingent on the achievement of the selected performance criteria over an extended period.

 

The awards made under the Long-Term Incentive Plan and the performance share awards require the Company to achieve both cumulative earnings growth and improvement in return on equity over the applicable performance cycle. (The LTIP and the 2006 Stock Incentive Plan allow for goals to be set based upon numerous different performance criteria, but to date the Compensation Committee has only set targets based on the criteria noted.)  The goals exclude special items identified at the time the awards are made and typically would include most, if not all of the same special items as are excluded for awards given the same year under our Performance Incentive Bonus Plan.

 

Payouts under the Long-Term Incentive Plan are equal to a percentage of base salary based on the achievement of the targets established by the Compensation Committee. Performance share award payouts are in the form of Common Stock and are determined by taking a percentage of the recipient’s base salary and converting the dollar amount to a number of shares issuable, based on the value of our Common Stock when the award is granted. The targets provide for threshold goals (performance below which would result in no payout being made), target goals, and maximum goals (performance above which no additional payout is earned), with achievement of levels between goals equal to a percentage of base salary or number of shares that is on a straight-line basis between the two goals. The amount of a participant’s payout, if any, is determined by the Committee prior to the end of the first quarter of the fiscal year immediately following the end of the performance cycle. Payouts of LTIP and performance share awards have been weighted towards the achievement of earnings growth, while the return on equity serves as a check to prevent any “engineering” of earnings and ensure that the participant’s interests are aligned with those of our stockholders. Our decision to issue performance shares was based on our belief that performance share awards have an additional link to performance; if the financial targets are not met or met only at the lower levels, recipients would be adversely affected as a result of receiving fewer or no shares and any shares received will have a lower value if our stock price falls as a result of our financial performance. Therefore, we believe that performance shares further align the interests of our Named Executive Officers with stockholder interests as compared to the cash LTIP awards.

 

Messrs. Shaffer, Murry and Zaccaro were added in 2007 to the group of Named Executive Officers receiving long-term incentive awards covering multiple-year periods. These individuals were included in the group to put them in a comparable position to others on the operating committee (which consists of all of our Named Executive Officers) and because it was determined that providing a higher percentage of long-term compensation that is equity based is a more appropriate compensation structure for these officers based upon peer group data. The structure of the awards provided to these three individuals consisted of increased performance incentive bonus payouts for 2007, in lieu of a performance share award for a one year performance cycle; awards of performance shares covering the 2007 through 2008 performance cycle, which corresponds to the remaining portion of a performance cycle for which the other Named Executive Officers have outstanding awards under our Long-Term Incentive Plan; and awards of performance shares covering the 2007 through 2009 performance cycle, which were given to all Named Executive Officers.

 

The decision to provide increased performance incentive bonus payouts for 2007 in lieu of a performance share award for the one-year performance cycle was made because bonuses were considered as most closely emulating the risk and goals associated with a performance share award for a one-year performance cycle. This approach is similar to that taken in 2006 when two other Named Executive Officers became part of the group eligible to received awards under the Long-Term Incentive Plan, which serve a similar purpose as performance share awards and were replaced in 2007 with performance share awards.

 

20



 

Payouts under 2005 – 2007 LTIP Performance Cycle

 

Mr. Chirico received a payout at the maximum level in the current fiscal year with respect to the three-year performance cycle ended February 3, 2008 based on our attainment of $7.86 cumulative three year earnings per share and a return on equity of 16.7%.  Mr. Chirico is the only Named Executive Officer who received an award under the Long-Term Incentive Plan for this performance cycle.  The earnings per share growth targets with respect to the three-year performance cycle ended February 3, 2008 were as follows:

 

Threshold
Cumulative
Earnings Per
Share

 

Compound
Growth

 

Target
Cumulative
Earnings Per
Share

 

Compound
Growth

 

Maximum
Cumulative
Earnings Per
Share

 

Compound
Growth

 

($)

 

(%)

 

($)

 

(%)

 

($)

 

(%)

 

5.00

 

10

 

5.49

 

15

 

6.53

 

25

 

 

The average return on equity goals were 11.4% at threshold, 12.4% at target and 14.4% at maximum.

 

Potential payouts (as percentages of base salary) and actual payouts (as a percentage of base salary and in dollar amount) were as follows:

 

Threshold

 

Target

 

Maximum

 

Actual

 

Actual

 

(%)

 

(%)

 

(%)

 

(%)

 

($)

 

50

 

80

 

160

 

160

 

1,600,000

 

 

Payouts under 2006 – 2007 LTIP Performance Cycle

 

Messrs. Sirkin and Duane received a payout at the maximum level in the current fiscal year with respect to the two-year performance cycle ended February 3, 2008 based on our attainment of $5.83 per share and a return on equity of 17.2%.  They are the only Named Executive Officers who were eligible to receive a payout under the Long-Term Incentive Plan with respect to that cycle.  The earnings per share growth targets with respect to the two-year performance cycle ended February 3, 2008 were as follows:

 

Threshold
Cumulative
Earnings
Per Share

 

Compound
Growth

 

Target
Cumulative
Earnings
Per Share

 

Compound
Growth

 

Maximum
Cumulative
Earnings
Per Share

 

Compound
Growth

 

($)

 

(%)

 

($)

 

(%)

 

($)

 

(%)

 

4.34

 

10

 

4.65

 

15

 

5.29

 

25

 

 

The average return on equity goals were 13.1% at threshold, 14.0% at target and 15.6% at maximum.

 

Potential payouts (as percentages of base salary) and actual payouts (as percentages of base salary and in dollar amounts) were as follows:

 

Name

 

Threshold

 

Target

 

Maximum

 

Actual

 

Actual

 

 

 

(%)

 

(%)

 

(%)

 

(%)

 

($)

 

Mr. Sirkin

 

10

 

25

 

55

 

55

 

500,500

 

Mr. Duane

 

10

 

20

 

40

 

40

 

320,000

 

 

21



 

Performance Share Awards

 

All of the Named Executive Officers received awards of performance shares in 2007 with respect to a performance cycles covering 2007 through 2009.  Messrs. Murry, Shaffer and Zaccaro received awards of performance shares in 2007 with respect to a performance cycle covering 2007 and 2008.  The earnings per share growth targets with respect to the performance cycle are as follows:

 

Performance
Cycle

 

Threshold
Cumulative
Earnings
Per Share

 

Compound
Growth

 

Target
Cumulative
Earnings
Per Share

 

Compound
Growth

 

Maximum
Cumulative
Earnings
Per Share

 

Compound
Growth

 

 

 

($)

 

(%)

 

($)

 

(%)

 

($)

 

(%)

 

2007-2009

 

9.54

 

10

 

10.48

 

15

 

12.49

 

25

 

2007-2008

 

6.05

 

10

 

6.49

 

15

 

7.37

 

25

 

 

The average return on equity goals for the 2007-2009 performance cycle are 14.4% at threshold, 15.6% at target and 18.0% at maximum.  The average return on equity goals for the 2007-2008 performance cycle are 14.9% at threshold, 15.8% at target and 17.7% at maximum.

 

Potential payouts in shares of Common Stock (and the approximate percentage of salary used to calculate the number of shares issuable) are as follows:

 

 

 

 

 

2007-2009 Performance Cycle

 

2007-2008 Performance Cycle

 

Name

 

 

 

Threshold

 

Target

 

Maximum

 

Threshold

 

Target

 

Maximum

 

Mr. Chirico

 

Shares (#)

 

10,200

 

18,500

 

40,700

 

 0

 

 0

 

 0

 

 

 

% of Salary

 

55

 

100

 

220

 

0

 

0

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Sirkin

 

Shares (#)

 

1,700

 

4,200

 

9,200

 

 0

 

 0

 

 0

 

 

 

% of Salary

 

10

 

25

 

55

 

0

 

0

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Shaffer

 

Shares (#)

 

900

 

1,800

 

3,600

 

900

 

1,800

 

3,600

 

 

 

% of Salary

 

10

 

20

 

40

 

10

 

20

 

40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Duane

 

Shares (#)

 

1,500

 

3,000

 

6,000

 

 0

 

 0

 

 0

 

 

 

% of Salary

 

10

 

20

 

40

 

0

 

0

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Murry

 

Shares (#)

 

1,200

 

2,400

 

4,800

 

1,200

 

2,400

 

4,800

 

 

 

% of Salary

 

7.5

 

15

 

30

 

7.5

 

15

 

30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mr. Zaccaro

 

Shares (#)

 

1,050

 

2,100

 

4,200

 

1,050

 

2,100

 

4,200

 

 

 

% of Salary

 

7.5

 

15

 

30

 

7.5

 

15

 

30

 

 

Other Benefits

 

Our Named Executive Officers are participants in our Pension Plan, Supplemental Pension Plan, Associates Investment Plan for Salaried Associates, Supplemental Savings Plan and Executive Medical Reimbursement Insurance Plan.  In addition, Messrs. Chirico, Sirkin and Duane are parties to capital accumulation program agreements with the Company.  See “Executive Compensation – Defined Benefit Plans” for a description of these programs.

 

Perquisites are limited and generally consist of discounts in Company retail stores available to all employees and, in certain cases, clothing allowances, gym memberships, and travel, hotel and recreational activities of executives’ spouses during our annual off-site budget, planning and strategy meetings.  Additionally, as part of certain of our marketing activities, including as the naming rights sponsor of the IZOD Center sports and entertainment arena and of the lifeguards at the Walt Disney World Resorts, we have a limited number of tickets to all events at the IZOD Center and to certain professional football games at Giants Stadium, which is located in the same complex, as well as a limited number of complimentary passes to the Walt Disney World theme parks.  These are provided at no cost to the Company and may, at times, be used personally by the Named Executive Officers, as they are available to all of our employees on a non-discriminatory basis.

 

22



 

Change In Control Provisions in Employment Agreements

 

We have entered into employment agreements containing change in control provisions with our Named Executive Officers.  These arrangements are intended to attract and retain qualified executives who could have other job alternatives that might appear to them to be less risky absent these arrangements.  The change in control benefits also mitigate a potential disincentive for executives when they are evaluating a potential acquisition of the company, particularly when it appears that the services of the executive officers may not be required by the acquiring company.  The change in control arrangements for our Named Executive Officers are “double trigger,” meaning that severance payments are not awarded upon a change in control unless the executive’s employment is terminated involuntarily (other than for cause) or voluntarily for good reason within the two year period following the transaction.  We believe this structure strikes a balance between the incentives and the executive hiring and retention effects described above, without providing these benefits to executives who continue to enjoy employment with an acquiring company in the event of a change in control transaction.  We also believe this structure is more attractive to potential acquiring companies, who may place significant value on retaining members of our executive team and who may perceive this goal to be undermined if executives receive significant acceleration payments in connection with such a transaction and are no longer required to continue employment to earn the remainder of their equity awards.  In connection with our entering into these agreements, the compensation consultant reviewed the severance benefits provide by other companies and determined that the agreements we provided were “market,” particularly within our industry peer group.  For a detailed description of these change in control benefits, please see the discussion below under “Executive Compensation – Employment Contracts.”

 

Federal Income Tax Deductibility of Executive Compensation

 

Section 162(m) of the Internal Revenue Code limits the amount of compensation a publicly held corporation may deduct as a business expense for Federal income tax purposes.  The deductibility limit, which applies to a company’s chief executive officer and the four other most highly compensated executive officers (as defined in the Exchange Act) is $1 million, subject to certain exceptions.  The exceptions include the general exclusion of performance-based compensation from the calculation of an executive officer’s compensation for purposes of determining whether his or her compensation exceeds the deductibility limit.  Compensation paid or received under our Performance Incentive Bonus Plan, our Long-Term Incentive Plan, our stock option plans, and our 2006 Stock Incentive Plan is generally intended to satisfy the requirements for full deductibility.  Nonetheless, the Compensation Committee recognizes that in certain instances it may be in our best interest to provide compensation that is not fully deductible and has done so, such as with the base salaries that were paid in the past to our two immediate former Chief Executive Officers and with the restricted stock units granted in 2007.

 

Stock Ownership

 

To ensure that management’s interests remain aligned with stockholders’ interests, we encourage our key executives to retain shares acquired pursuant to the exercise of stock options and acquired upon the vesting of restricted stock units.  In addition, our associates, including the Named Executive Officers, may acquire our Common Stock through our AIPs subject to certain limitations on the amount an employee can contribute to or hold in the PVH Stock Fund.  Many of our Named Executive Officers have significant investments in the PVH Stock Fund investment option under the AIPs.

 

We did not have stock ownership guidelines for our Named Executive Officers through 2007 due, in part, to our compensation packages being weighted towards cash and not having a significant equity component.  We adopted in 2008 stock ownership guidelines that require our Chief Executive Officer to hold, directly or indirectly, Common Stock with a value equal to three times his annual base salary and that require our other Named Executive Officers to hold Common Stock with a value equal their annual base salary.  The stock ownership guidelines require the Named Executive Officers to meet these guidelines within five years of the adoption of these guidelines.

 

23



 

EXECUTIVE COMPENSATION

 

SUMMARY COMPENSATION TABLE

 

The Summary Compensation Table includes the 2006 and 2007 compensation data for our Named Executive Officers.

 

Name and
Principal Position

 

Fiscal
Year

 

Salary

 

Bonus

 

Stock
Awards (1)

 

Option
Awards (2)

 

Non-Equity
Incentive
Plan
Compensation (3)

 

Change in
Pension Value
and
Nonqualified
Deferred
Compensation

Earnings (4)

 

All
Other
Compensation (5)

 

Total 

 

 

 

 

 

($)

 

($)

 

($)

 

($)

 

($)

 

($)

 

($) 

 

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emanuel Chirico

 

2007

 

1,000,000

 

 0

 

657,058

 

1,744,019

 

3,075,000

 

117,258

 

102,708

 

6,696,043

 

Chairman and Chief Executive Officer, Phillips-Van Heusen Corporation

 

2006

 

992,436

 

0

 

0

 

1,659,629

 

3,500,000

 

400,255

 

126,428

 

6,678,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael A. Shaffer

 

2007

 

458,333

 

 0

 

173,949

 

288,605

 

628,188

 

31,588

 

46,130

 

1,626,793

 

Executive Vice President and Chief Financial Officer, Phillips-Van Heusen Corporation

 

2006

 

419,712

 

0

 

0

 

210,150

 

637,500

 

44,751

 

38,389

 

1,350,502

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Francis K. Duane

 

2007

 

800,000

 

330,000

 

142,343

 

406,209

 

847,000

 

126,551

 

72,750

 

2,724,853

 

Vice Chairman, Wholesale, Phillips-Van Heusen Corporation

 

2006

 

794,711

 

0

 

0

 

420,934

 

1,520,000

 

215,868

 

63,608

 

3,015,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paul Thomas Murry

 

2007

 

850,000

 

 0

 

180,782

 

50,328

 

1,396,125

 

180,680

 

99,845

 

2,757,760

 

President and Chief Operating Officer, Calvin Klein, Inc.

 

2006

 

850,000

 

0

 

0

 

395,264

 

1,275,000

 

199,302

 

96,187

 

2,815,753

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allen E. Sirkin

 

2007

 

906,667

 

 0

 

539,628

 

692,550

 

1,701,700

 

526,051

 

81,852

 

4,448,448

 

President and Chief Operating Officer, Phillips-Van Heusen Corporatio

 

2006

 

889,423

 

0

 

0

 

586,433

 

1,890,000

 

530,953

 

68,312

 

3,965,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Zaccaro

 

2007

 

733,336

 

100,000

 

215,294

 

137,667

 

294,375

 

246,926

 

66,469

 

1,794,067

 

Vice Chairman, Retail, Phillips-Van Heusen Corporation

 

2006

 

694,712

 

0

 

0

 

467,218

 

1,050,000

 

232,155

 

56,883

 

2,500,968

 

 


(1)          The Stock Awards column represents the aggregate compensation costs recognized in the fiscal year listed and included in our financial statements in accordance with Financial Accounting Standards Board (FASB) Statement No. 123R for the fair value of restricted stock units and performance share awards granted to each Named Executive Officer.  Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service based vesting conditions.  The fair value of the restricted stock units is equal to the closing price of our Common Stock on the date of grant.  The compensation expense related to the fair value of an award of restricted stock units is recognized on a straight-line basis over the award’s vesting period.  The fair value of an award of performance shares is equal to the closing price of our Common Stock on the date of grant, reduced for the present value of any dividends expected to be paid on our Common Stock during the performance cycle, as the performance shares do not accrue dividends prior to being earned.  The compensation expense related to the fair value of performance shares is recognized ratably based on the current expectations of the probable number of shares that will ultimately be issued.  No restricted stock unit or performance share awards were made prior to 2007 and, therefore, this column consists of the expense related to such stock awards made in 2007 only.  The following sets forth table for each Named Executive Officer the breakdown of the expense for the restricted stock unit and performance share awards granted in 2007.

 

Name

 

2007 Expense Related to
Awards of Restricted
Stock Units

 

2007 Expense
Related to Awards of
Performance Shares

 

Total 2007 Expense
Reported in the Stock
Awards Column

 

 

 

($)

 

($)

 

($)

 

 

 

 

 

 

 

 

 

Emanuel Chirico

 

214,830

 

442,228

 

657,058

 

Michael A. Shaffer

 

61,380

 

112,569

 

173,949

 

Francis K. Duane

 

73,656

 

68,687

 

142,343

 

Paul Thomas Murry

 

30,690

 

150,092

 

180,782

 

Allen E. Sirkin

 

439,425

 

100,203

 

539,628

 

Michael Zaccaro

 

83,950

 

131,344

 

215,294

 

 

(Footnotes continued on following page)

 

24



 

(Footnotes continued from previous page

 

(2)          This column represents the aggregate compensation costs recognized in the fiscal year listed and included in our financial statements in accordance with FASB Statement No. 123R for the fair value of all outstanding stock option awards granted to each Named Executive Officer.  Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service based vesting conditions.  The following table sets forth for each Named Executive Officer the breakdown of the expense for the stock option awards granted in the listed fiscal year and in prior years.

 

Name

 

Fiscal
Year

 

Expense Related to
Awards Granted in the
Listed Year

 

Expense Related to
Awards Granted in
Prior Years

 

Total Expense Reported
in the Option Awards
Column

 

 

 

 

 

($)

 

($)

 

($)

 

Emanuel Chirico

 

 

 

 

 

 

 

 

 

 

 

2007

 

352,293

 

1,391,726

 

1,744,019

 

 

 

2006

 

665,141

 

994,488

 

1,659,629

 

Michael A. Shaffer

 

 

 

 

 

 

 

 

 

 

 

2007

 

100,655

 

187,950

 

288,605

 

 

 

2006

 

66,514

 

143,636

 

210,150

 

Francis K. Duane

 

 

 

 

 

 

 

 

 

 

 

2007

 

120,786

 

285,423

 

406,209

 

 

 

2006

 

33,257

 

387,677

 

420,934

 

Paul Thomas Murry

 

 

 

 

 

 

 

 

 

 

 

2007

 

50,328

 

0

 

50,328

 

 

 

2006

 

0

 

395,264

 

395,264

 

Allen E. Sirkin

 

 

 

 

 

 

 

 

 

 

 

2007

 

0

 

692,550

 

692,550

 

 

 

2006

 

586,433

 

0

 

586,433

 

Michael Zaccaro

 

 

 

 

 

 

 

 

 

 

 

2007

 

137,667

 

0

 

137,667

 

 

 

2006

 

0

 

467,218

 

467,218

 

 

Under FASB Statement No. 123R, the fair value of each stock option award is estimated as of the grant date using the Black-Scholes-Merton option valuation model.  The compensation expense related to the fair value of an award of stock options is recognized on a straight-line basis over the award’s vesting period.  The following table sets forth the assumptions used in the model for option awards that were recognized as compensation expense in 2007 and 2006 in our financial statements, but were granted in 2007, 2006, 2005 and 2004:

 

 

 

2007

 

2006

 

2005

 

2004

 

Weighted average fair value

 

$

24.02

 

$

15.59

 

$

10.19

 

$

5.84

 

Weighted average risk-free interest rate

 

4.68

%

4.69

%

4.15

%

3.76

%

Weighted average dividend yield

 

0.26

%

0.38

%

0.48

%

0.79

%

Weighted average expected volatility

 

33.30

%

33.20

%

25.90

%

26.90

%

Weighted average expected life, in years

 

6.3

 

6.1

 

6.0

 

6.0

 

 

(3)          The compensation reported in this column includes payouts under our Performance Incentive Bonus Plan and payouts under our Long-Term Incentive Plan, as detailed in the table below.

 

Name

 

Fiscal
Year

 

Performance Incentive
Bonus Plan

 

Long-Term Incentive
Plan

 

Total Non-Equity
Incentive Plan
Compensation

 

 

 

 

 

($)

 

($)

 

($)

 

Emanuel Chirico

 

2007

 

1,475,000

 

1,600,000

 

3,075,000

 

 

 

2006

 

2,000,000

 

1,500,000

 

3,500,000

 

Michael A. Shaffer

 

2007

 

628,188

 

0

 

628,188

 

 

 

2006

 

 637,500

 

 0

 

637,500

 

Francis K. Duane

 

2007

 

527,000

 

320,000

 

847,000

 

 

 

2006

 

1,520,000

 

 0

 

 1,520,000

 

Paul Thomas Murry

 

2007

 

1,396,125

 

0

 

1,396,125

 

 

 

2006

 

1,275,000

 

 0

 

1,275,000

 

Allen E. Sirkin

 

2007

 

1,201,200

 

500,500

 

1,701,700

 

 

 

2006

 

1,890,000

 

 0

 

1,890,000

 

Michael Zaccaro

 

2007

 

294,375

 

0

 

294,375

 

 

 

2006

 

 1,050,000

 

 0

 

 1,050,000

 

 

(Footnotes continued on following page)

 

25



 

(Footnotes continued from previous page)

 

(4)          The amounts reported in this column consist of the changes in values under our Pension Plan and Supplemental Pension Plan and under the Named Executive Officer’s capital accumulation program agreement, if any, as follows:

 

Name

 

Fiscal
Year

 

Change in
Pension Plan
Value

 

Change in
Supplemental
Pension Plan
Value

 

Change in
Capital
Accumulation
Program Value

 

Nonqualified
Deferred
Compensation
Earnings†

 

 

 

 

 

($)

 

($)

 

($)

 

($)

 

Emanuel Chirico

 

2007

 

1,008

 

116,250

 

(68,182

)

117,258

 

 

 

2006

 

15,841

 

275,043

 

109,371

 

400,255

 

Michael A. Shaffer

 

2007

 

(3,206

)

31,588

 

N/A

 

31,588

 

 

 

2006

 

10,896

 

33,855

 

N/A

 

44,751

 

Francis K. Duane

 

2007

 

4,675

 

83,540

 

38,336

 

126,551

 

 

 

2006

 

14,800

 

119,909

 

81,159

 

215,868

 

Paul Thomas Murry

 

2007

 

14,093

 

166,587

 

N/A

 

180,680

 

 

 

2006

 

19,711

 

179,591

 

N/A

 

199,302

 

Allen E. Sirkin

 

2007

 

7,302

 

518,749

 

(255,856

)

526,051

 

 

 

2006

 

56,183

 

394,228

 

80,542

 

530,953

 

Michael Zaccaro

 

2007

 

21,772

 

225,154

 

N/A

 

246,926

 

 

 

2006

 

31,770

 

200,385

 

N/A

 

232,155

 

 

  Pursuant to SEC rules, the amounts reported in this column and, accordingly, in the Summary Compensation Table, do not include any negative amounts set forth in this table.  Additional information regarding our Pension Plan and Supplemental Pension Plan is included in this section under the Pension Benefits table.  Additional information regarding our capital accumulation program is in included in this section under the heading Termination of Employment and Change In Control Arrangements.

 

(5)          All Other Compensation includes perquisites and payments or contributions required to be made by us under our Associates Investment Plan for Salaried Associates, Supplemental Savings Plan and Executive Medical Reimbursement Insurance Plan.

 

In 2007, we made contributions under our AIP for Salaried Associates and our Supplemental Savings Plan in the amounts of $88,958 for Mr. Chirico; $32,380 for Mr. Shaffer; $59,000 for Mr. Duane; $63,469 for Mr. Murry; $68,102 for Mr. Sirkin; and $52,719 for Mr. Zaccaro.  In 2006, the amounts of the contributions were $114,598 for Mr. Chirico; $26,559 for Mr. Shaffer; $51,778 for Mr. Duane; $57,037 for Mr. Murry; $56,482 for Mr. Sirkin; and $45,053 for Mr. Zaccaro.

 

Our Executive Medical Reimbursement Insurance Plan covers eligible employees, including the Named Executive Officers, for most medical charges not covered by our basic medical plan, up to a specified annual maximum.  We incurred $13,750 during 2007 and $11,830 during 2006 as annual premiums for coverage for each of the Named Executive Officers.

 

Perquisites received from time to time have included clothing allowances, gym memberships, parking and travel, hotel and recreational activities of our executive officers’ spouses during our annual off-site budget, planning and strategy meetings.  These amounts are not included in the table as they do not meet the threshold for disclosure, except in the case of Mr. Murry.  Mr. Murry received in 2006 a clothing allowance for purchases at our Calvin Klein Collection store and additional discounts at our Calvin Klein Collection store above the discount provided to all our associates.  In 2007, Mr. Murry received a clothing allowance for purchases at our Calvin Klein Collection store.  In addition, Mr. Murry’s spouse traveled to and had use of recreational facilities and services in connection with our annual off-site budget, planning and strategy meetings.  These perquisites provided him with a benefit of $22,626 in 2007 and $27,320 in 2006, which is included in his compensation in this column.

 

26



 

GRANTS OF PLAN-BASED AWARDS

 

 

 

Grant

 

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards

 

Estimated Future Payouts
Under Equity Incentive Plan
Awards

 

All Other
Stock
Awards:
Number
of Shares
of Stock

 

All Other
Option
Awards:
Number of
Securities
Underlying

 

Exercise
or Base
Price of
Option

 

Grant Date
Fair Value
of Stock
and Option

 

Name

 

Date

 

Threshold

 

Target

 

Maximum

 

Threshold

 

Target

 

Maximum

 

or Units

 

Options

 

Awards

 

Awards(1)

 

 

 

 

 

($)

 

($)

 

($)

 

(#)

 

(#)

 

(#)

 

(#)

 

(#)

 

($/sh)

 

($)

 

Emanuel Chirico

 

4/12/2007

(2)

 

 

 

 

 

 

 

 

 

 

 

 

17,500

 

 

 

 

 

1,025,325

 

 

 

4/12/2007

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70,000

 

58.57

 

1,681,400

 

 

 

5/2/2007

(4)

500,000

 

1,000,000

 

2,000,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/2/2007

(5)

 

 

 

 

 

 

10,200

 

18,500

 

40,700

 

 

 

 

 

 

 

989,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael A. Shaffer

 

4/5/2007

(2)

 

 

 

 

 

 

 

 

 

 

 

 

5,000

 

 

 

 

 

292,950

 

 

 

4/5/2007

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,000

 

58.60

 

480,400

 

 

 

5/2/2007

(4)

142,500

 

285,000

 

712,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/2/2007

(6)

47,500

 

95,000

 

190,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/2/2007

(5)

 

 

 

 

 

 

900

 

1,800

 

3,600

 

 

 

 

 

 

 

96,318

 

 

 

5/2/2007

(7)

 

 

 

 

 

 

900

 

1,800

 

3,600

 

 

 

 

 

 

 

96,552

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Francis K. Duane

 

4/5/2007

(2)

 

 

 

 

 

 

 

 

 

 

 

 

6,000

 

 

 

 

 

351,540

 

 

 

4/5/2007

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24,000

 

58.60

 

576,480

 

 

 

5/2/2007

(4)

240,000

 

480,000

 

1,200,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/2/2007

(5)

 

 

 

 

 

 

1,500

 

3,000

 

6,000

 

 

 

 

 

 

 

160,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paul Thomas Murry

 

4/5/2007

(2)

 

 

 

 

 

 

 

 

 

 

 

 

2,500

 

 

 

 

 

146,475

 

 

 

4/5/2007

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,000

 

58.60

 

240,200

 

 

 

5/2/2007

(4)

255,000

 

510,000

 

1,275,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/2/2007

(6)

63,750

 

127,500

 

255,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/2/2007

(5)

 

 

 

 

 

 

1,200

 

2,400

 

4,800

 

 

 

 

 

 

 

128,424

 

 

 

5/2/2007

(7)

 

 

 

 

 

 

1,200

 

2,400

 

4,800

 

 

 

 

 

 

 

128,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allen E. Sirkin

 

4/5/2007

(2)

 

 

 

 

 

 

 

 

 

 

 

 

7,500

 

 

 

 

 

439,425

 

 

 

5/2/2007

(4)

364,000

 

682,500

 

1,774,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5/2/2007

(5)

 

 

 

 

 

 

1,700

 

4,200

 

9,200

 

 

 

 

 

 

 

224,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Zaccaro

 

4/5/2007

(2)

 

 

 

 

 

 

 

 

 

 

 

 

3,000

 

 

 

 

 

175,770

 

 

 

4/5/2007

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,000

 

58.60

 

288,240

 

 

 

5/2/2007

(4)

225,000

 

450,000

 

1,125,000