-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PmYr9VykmtIyqeybytQCfr6GMNbVD3WVCbALUX+1IjQm/wERjt5BWIHTLDaXbC9g MJAJ6yDDIIwC90zukdC98g== 0000916540-10-000004.txt : 20100114 0000916540-10-000004.hdr.sgml : 20100114 20100114161313 ACCESSION NUMBER: 0000916540-10-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20100108 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20100114 DATE AS OF CHANGE: 20100114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DARLING INTERNATIONAL INC CENTRAL INDEX KEY: 0000916540 STANDARD INDUSTRIAL CLASSIFICATION: FATS & OILS [2070] IRS NUMBER: 362495346 STATE OF INCORPORATION: DE FISCAL YEAR END: 1208 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13323 FILM NUMBER: 10527785 BUSINESS ADDRESS: STREET 1: 251 O CONNOR RIDGE BLVD STREET 2: STE 300 CITY: IRVING STATE: TX ZIP: 75038 BUSINESS PHONE: 9727170300 MAIL ADDRESS: STREET 1: 251 OCONNOR RIDGE BLVD STREET 2: #300 CITY: IRVING STATE: TX ZIP: 75038 8-K 1 k8execomp.htm FORM 8K EXEC COMPENSATION k8execomp.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
 
 Date of report (Date of earliest event reported)             January 8, 2010                        
                    

 
DARLING INTERNATIONAL INC.
(Exact Name of Registrant as Specified in Charter)

 
Delaware
  
001-13323
 
  
36-2495346
  
(State or Other Jurisdiction
of Incorporation)
  
(Commission
File Number)
    
(IRS Employer
Identification No.)
 
  
 
 
 
251 O’CONNOR RIDGE BLVD., SUITE 300, IRVING, TEXAS                   75038
(Address of Principal Executive Offices)                                                      (Zip Code)

 
Registrant’s telephone number, including area code:                       (972) 717-0300
 
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):




 

1
 
 


 
Item 5.02.
  
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
    On January 8, 2010, the Compensation Committee (the “Committee”) of the Board of Directors of Darling International Inc. (the “Company”) approved the Company’s executive compensation program for fiscal 2010 for certain executives, including, without limitation, the Company’s Chief Executive Officer (the “CEO”) and the other named executive officers.  In connection with the development of this program, on January 8, 2010, the Committee adopted an Amended and Restated Executive Compensation Program Policy Statement (the “2010 Program”).  The 2010 Program modifies the Executive Compensation Program Policy Statement adopted by the Committee on January 15, 2009 (the “Prior Program”) by changing the manner in which the number of shares of restricted stock and stock options participant’s are eligible to receive under the long term incentive plan are calculated and by increasing the range as a percentage of base salary of the target dollar value of the equity grants available to the CEO under the long term incentive plan.  The 2010 Program supersedes the Prior Program; however, the Prior Program will remain in effect in respect of awards heretofore granted under the Prior Program.
 
    Set forth below is a brief description of the material terms and conditions of the 2010 Program.  The summary set forth below is not intended to be complete and is qualified in its entirety by reference to the full text of the 2010 Program attached hereto as Exhibit 10.1.

Elements of Compensation.
 
    Base Salary:  Base salary ranges will be determined for a program participant based on the participant’s position and responsibility and will generally be set at or near the 50th percentile of base salary paid to similarly situated executives of general industrial companies that have similar total revenue and market capitalization and/or compete with the Company for management talent (“Peer Companies”).  However, the Compensation Committee has the authority to deviate from such percentile target.
 
    For fiscal 2010, the Committee determined that the 2009 base salary of $675,000 per year for Randall C. Stuewe, the Company’s CEO, was still in line with the stated percentile target.  Accordingly, no changes were made to Mr. Stuewe’s fiscal 2010 base salary and it will remain at $675,000 per year.  Each of the other named executive officers received a two percent (2.0%) cost of living adjustment to base salary, which is consistent with the salary increase given to other members of the Company’s management.  The following table shows the new 2010 base salary for each of the Company’s other named executive officers:

Name and Title
2009 Base Salary
2010 Base Salary
     
John O. Muse
     Executive Vice President –
     Finance and Administration
$336,000
$342,700
     
Neil Katchen
     Executive Vice President –
     Chief Operations Officer
$269,000
$274,400
     
John F. Sterling
     Executive Vice President –
     General Counsel and Secretary
$258,000
$263,200

 
 
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Annual Incentives:  Each program participant has the opportunity to receive an annual cash incentive award, which will be awarded upon the program participant’s achievement of both of two separate components:  the Company’s realization of certain financial measures (which will comprise 75% of the annual cash incentive award) and the achievement of specific strategic, operational and personal goals (“SOPs”) designed for each plan participant (which will comprise 25% of the annual cash incentive award).

The financial measures component of the annual cash incentive award will be based on the Company’s yearly return on gross investment (“ROGI”), which is defined as earnings before interest, taxes, depreciation and amortization divided by the sum of total assets plus accumulated depreciation minus other liabilities (other than those incurred to financing institutions), including, but not limited to, accounts payable, accrued expenses, pension liabilities, other non-current liabilities and deferred income taxes.  The Compensation Committee has the ability to adjust annual ROGI based on extraordinary events.  A program participant may receive between 25% and 400% of his/her target payout depending on the Company’s annual ROGI as compared to the ROGI of its Peer Companies during the same period.

The SOPs component of the annual cash incentive award is based on both the Company’s achievement of a minimum ROGI target and a program participant’s achievement of individual SOPs.  A program participant may receive between 0% and 100% of his/her target payout with respect to the SOPs component depending on such participant’s performance for the fiscal year.  Each program participant must achieve a minimum of 75% of his/her SOPs to receive any payout for the SOPs component of the annual cash incentive award.

Long Term Incentives:  The long term incentive element of compensation will be awarded to program participants in the form of a yearly equity grant, which will be composed of 75% restricted stock and 25% stock options; however, the Company will only award such yearly equity grants if the Company meets certain defined financial objective(s) for the relevant prior fiscal year as determined by the Compensation Committee.  A program participant’s target dollar value of his/her grant will be set at an amount equal to 125% of base salary for the CEO and an amount between 20% and 70% of his/her base salary for all other program participants, and the program participant can receive a grant equal to between 50% and 150% of such target dollar value depending on the Company’s trailing five-year ROGI as compared to the trailing five-year ROGI of Peer Companies.

Restricted stock grants will have no exercise price and will vest over a period of three years, with 25% vesting immediately upon issuance and 25% vesting on each of the next three anniversaries of the grant date.  Stock options will have an exercise price equal to the fair market value of the Company’s common stock on the third business day after the Company releases its annual financial results and will vest over a period of three years with 25% vesting immediately upon issuance and 25% on each of the next three anniversaries of the grant date.

Non-Employee Director Grants.

Non-employee directors will automatically be granted stock options for 4,000 shares of the Company’s common stock on the date of their initial election to the Board by the stockholders.  The stock options will have an exercise price equal to the grant date fair market value and will vest in 25% increments on the sixth month anniversary of the grant and on each of the first, second and third annual anniversaries of the date of the grant.
 
 
 
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Each non-employee director will automatically be granted stock options for 4,000 shares of the Company’s common stock if the Company achieves 90% of the 50th percentile for the Peer Group ROGI for the most recently completed fiscal year.  The stock options will have an exercise price equal to the fair market value of the Company’s common stock on the third business day after the Company releases its annual financial results and will vest in 25% increments on the sixth month anniversary of the grant date and on each of the first, second and third annual anniversaries of the grant date.


Item 8.01.
Other Events.

In accordance with its written charter, the Nominating and Corporate Governance Committee (the “Governance Committee”) of the Board of Directors of the Company is charged with evaluating annually the status of the Board’s compensation in relation to comparable U.S. companies and reporting its findings to the Board.  In December 2009, the Governance Committee retained Hewitt Associates (“Hewitt”), an outside global human resources consulting firm, to review the Company’s compensation program for its outside directors.  Based on Hewitt’s findings and recommendations, the Governance Committee recommended to the Board certain changes to the Company’s compensation program for its outside directors.  Consistent with these recommendations, the Board approved the following changes to the Company’s compensation program for its outside directors effective as of January 1, 2010:

·  
An increase in the annual retainers paid to the chairman of each of the audit, compensation and nominating and corporate governance committees to $12,000, $7,500 and $5,000, respectively.

·  
An increase in the additional annual retainer paid to the lead director from $10,000 to $15,000.

·  
The payment of meeting attendance fees to non-committee Board members who attend committee meetings at the invitation of the committee chairman.

 
 
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Item 9.01.
  
Financial Statements and Exhibits.
 
 
 
(d)
Exhibits.
 
 
10.01
 
Darling International Inc. Compensation Committee Amended and Restated Executive Compensation Program Policy Statement adopted January 8, 2010.
 
   
 
   
 
 
   
 

 
 

 




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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
 
DARLING INTERNATIONAL INC.
     
Date:   January 14, 2010
 By:  
   /s/  John F. Sterling
     John F. Sterling
     Executive Vice President -
     General Counsel and Secretary


          

                



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EXHIBIT LIST
 
 
 
10.01
 
Darling International Inc. Compensation Committee Amended and Restated Executive Compensation Program Policy Statement adopted January 8, 2010.
 
   
 
   
 
 

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EX-10.1 2 execompolicy.htm AMEND EXEC COMP POLICY 1 8 10 execompolicy.htm


 
DARLING INTERNATIONAL INC. COMPENSATION COMMITTEE
AMENDED AND RESTATED EXECUTIVE COMPENSATION PROGRAM POLICY STATEMENT
 
(Revised January 8, 2010)
 
 
This policy is a statement of the plan for implementation of the Amended and Restated Executive Compensation Program (the “Program”) effective January 8, 2010 for certain executives of Darling International Inc. (the “Company”), pursuant to the Company’s 2004 Omnibus Incentive Plan (the “Omnibus Plan”) approved by its stockholders in May 2005.  This Program supersedes the prior executive compensation plans, which were adopted under the Omnibus Plan on June 16, 2005 and January 15, 2009, respectively (the “Prior Programs”); however, the Prior Programs will remain in effect in respect of awards heretofore granted under the Prior Programs.  Awards granted to employees under the Program are intended to be “qualified performance based compensation” under Article 12 of the Omnibus Plan.
 
Program Objectives
 
·  
Reward Company executives for the achievement of specific annual, long-term and strategic goals of the Company throughout business cycles;
 
·  
Align the short and long-term interests of Company executives with the interests of stockholders;
 
·  
Attract and retain superior executives;
 
·  
Provide compensation to Company executives that is competitive with the compensation paid to similarly situated executives; and
 
·  
Create retention incentives for Company executives and provide an opportunity for increased equity ownership by Company executives.
 
Eligibility and Participation
 
Participants of the Program (each, a “Program Participant” and collectively, the “Program Participants”) include the Company’s chief executive officer (the “CEO”), the Executive Vice President, Finance and Administration (the “CFO”), the Company’s Executive Vice Presidents the (“EVPs”), the three most highly compensated executive officers, if any, of the Company other than the CEO, the CFO and the EVPs (together with the CEO, the CFO, and the EVPs,  the “named executive officers”) and such other executive officers as the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) or the CEO may determine from time to time.
 
Non-employee directors of the Company will continue to receive formula-based equity compensation as more fully described below.
 
Structure and Implementation
 
The elements of compensation for each Program Participant are base salary, annual incentive bonus and long-term incentive equity awards.
 
 
1
Base Salary: The base salary element is intended to compensate the Program Participants for services rendered during each fiscal year.  Base salary ranges will be determined for a Program Participant based on his/her position and responsibility and should generally be set at or near the 50th percentile of base salary paid to similarly situated executives of general industrial companies that have similar total revenue and market capitalization and/or compete with the Company for management talent (“Peer Companies”); provided, that the Compensation Committee shall have authority to deviate from such percentile target as it deems necessary or appropriate to achieve the Program objectives.  Salary information of Peer Companies will be determined by using market data supplied by an outside global human resources consulting firm or other independent third party resource.
 
Annual Incentives:  The annual incentive bonus element for each Program Participant will be the possibility of a cash bonus that will be awarded upon the Program Participant’s achievement of both of two separate components:  the Company’s realization of certain financial measures, which will account for 75% of the annual incentive bonus, and the achievement of specific strategic, operational and personal goals (“SOPs”) designed for each Plan Participant based on his/her title and roles and responsibilities with the Company.  The SOPs will account for 25% of the annual incentive bonus.
 
The financial measures component will be based on the Company’s yearly return on gross investment (“ROGI”), which is defined as earnings before interest, taxes, depreciation and amortization divided by the sum of total assets plus accumulated depreciation minus other liabilities (other than those incurred to financing institutions), including, but not limited to, accounts payable, accrued expenses, pension liabilities, other non-current liabilities and deferred income taxes.  The Company’s yearly ROGI will be calculated as of the end of each fiscal year based on the Company’s financial statements prepared for and presented in Company’s Annual Report on Form 10-K; however, from time to time, the calculation of ROGI will be adjusted in the discretion of the Compensation Committee for excess cash on hand or in extraordinary circumstances.  A Program Participant will receive 100% of his/her target payout with respect to the financial measures component of the annual award if the Company attains an annual ROGI for the fiscal year equal to the 50th percentile of the Peer Companies ROGI as calculated by an outside global human resources firm.  The Compensation Committee will also set a threshold and maximum ROGI for each Program Participant between which Program Participants will receive a percentage of target payout between 25% (for achievement of the 25th percentile of the Peer Companies ROGI (the “ROGI Threshold”)) and 400% (for achievement of the 90th percentile of the Peer Companies ROGI) depending on the actual ROGI achieved.
 
The SOPs component of the annual incentive bonus will be based on both the Company’s achievement of the ROGI Threshold and a Program Participant’s achievement of individual SOPs.  A Program Participant may receive between 0% and 100% of his/her target payout with respect to the SOPs component depending on such participant’s performance for the fiscal year.  Prior to each fiscal year, the CEO will set individual, objective SOPs for each Program Participant (other than himself), which objectives will be approved by the Compensation Committee.  With respect to the CEO, the Compensation Committee will set and approve the CEO’s SOPs for each fiscal year.  Following the end of each fiscal year, each Program Participant’s performance will be evaluated against his/her SOPs by the CEO (except with respect to his/her own performance), and the Compensation Committee will determine the percentage of target payout to be awarded to such Program Participant.  In the case of the CEO, the Compensation Committee will evaluate the CEO’s performance against his/her SOPs and determine the payout for the SOPs component of the annual incentive bonus.  Each Program Participant must achieve a minimum of 75% of his/her SOPs to receive any payout for the SOPs component of the annual incentive bonus.
 
 
 
2
 
Long Term Incentives:  The long term incentive element of compensation will be awarded to Program Participants in the form of a yearly equity grant, which will be composed of 75% restricted stock and 25% stock options (together, the “Grant”); however, the Company will only award such yearly equity grants if the Company meets certain financial objective(s) for the relevant prior fiscal year as determined by the Compensation Committee from time to time.  The target dollar value of the Grant (the “Target Grant Dollar Value”) for the CEO will equal 125% of the CEO’s base salary and, for all other Plan Participants, will range from 20% to 70% of the Program Participant’s base salary.  The Target Grant Dollar Value for each Program Participant, including the CEO, will be set by the Compensation Committee.  The actual amount of the award will be based on the Company’s actual trailing five-year ROGI average and may range from between 50% and 150% of the Target Grant Dollar Value.  If the Company’s trailing five-year ROGI average is less than or equal to the 25 th percentile of the Peer Companies ROGI, a Program Participant will be eligible to receive Grants equivalent to 50% of his/her Target Grant Dollar Value; if the Company’s trailing five-year ROGI average is between the 25 th and 50 th percentile of Peer Companies ROGI, a Program Participant will be eligible to receive Grants equivalent to between 50% and 100% of his/her Target Grant Dollar Value; if the Company’s trailing five-year ROGI average is between the 50 th and 75 th percentile of Peer Companies ROGI, a Program Participant will be eligible to receive Grants equivalent to between 100% and 150% of his/her Target Grant Dollar Value; and if the Company’s trailing five-year ROGI average is over the 75 th percentile of Peer Companies ROGI, a Program Participant will be eligible to receive Grants equivalent to a maximum amount of 150% of his/her Target Grant Dollar Value.
 
All financial and other objectives for individual Grants that are intended to be treated as "qualified performance-based compensation" under Article 12 of the Omnibus Plan and Section 162(m) of the Code (as defined in the Omnibus Plan) will be determined prior to the end of the first quarter of the fiscal year during which such performance will be determined.
 
Restricted stock granted under the Program will account for 75% of the total Grant.  Within the first fiscal quarter of each fiscal year, the Compensation Committee will determine both (i) the Target Grant Dollar Value for the target number of shares of restricted stock that each such Program Participant will be eligible to receive for such current fiscal year if the requisite ROGI performance is achieved and (ii) the number of shares of restricted stock that the participant is potentially eligible to receive.  In calculating the target number of shares of restricted stock that each Program Participant is eligible to receive, the Compensation Committee will divide the Target Grant Dollar Value for restricted stock determined for each Program Participant by the closing market price of the Company’s common stock on the last trading day of the immediately preceding fiscal year.  For fiscal 2010, the target number of shares of restricted stock that each Program Participant is eligible to receive will be based on the closing market price of the Company’s common stock on January 8, 2010, the date of adoption of this Program.  Restricted stock Grants will have no exercise price and will vest over a period of three years, with 25% vesting immediately upon issuance and 25% vesting on each of the next three anniversaries of the grant date.  Restricted stock will be granted on the fourth business day after the Company releases its annual financial results.
 
 
 
3
 
Stock options granted under the Program will account for 25% of the total Grant. Stock options will be granted on the fourth business day after the Company releases its annual financial results.  Within the first fiscal quarter of each fiscal year, the Compensation Committee will determine both (i) the Target Grant Dollar Value for the target number of stock options that each such Program Participant will be eligible to receive for such current fiscal year if the requisite ROGI performance is achieved and (ii) the number of stock options that the participant is potentially eligible to receive.  In calculating the target number of stock options that each Program Participant is eligible to receive, the Compensation Committee will divide the Target Grant Dollar Value for stock options determined for each Program Participant by the closing market price of the Company’s common stock on the last trading day of the immediately preceding fiscal year.  For fiscal 2010, the target number of stock options that each Program Participant is eligible to receive will be based on the closing market price of the Company’s common stock on January 8, 2010, the date of adoption of this Program.  The exercise price of all stock options granted under the LTIP will be the Fair Market Value of the Company’s common stock on the third business day after the Company releases its annual financial results for the relevant year.  Stock options will vest over a period of three years with 25% vesting immediately upon issuance and 25% on each of the next three anniversaries of the grant date.
 
The Compensation Committee has the discretion to award or withhold Grants or to provide additional grants outside the Program if it determines that it is in the best interests of the Company to do so.
 
Non Employee Director Grants
 
Non-Employee Directors will automatically be granted stock options for 4,000 shares of the Company’s common stock on the date of their initial election to the Board of Directors by the stockholders.  The exercise price will be the grant date Fair Market Value.  Such grants will vest in 25% increments on the sixth month anniversary of the grant and on each of the first, second and third annual anniversaries of the date of the grant.
 
Each Non-Employee Director will automatically be granted stock options for 4,000 shares of the Company’s common stock if the Company achieves 90% of the 50th percentile for the Peer Group ROGI for the most recently completed fiscal year.  Such grant will be made automatically on the fourth business day after the Company releases its annual financial results. The exercise price of such stock options will be the Fair Market Value of the Company’s common stock on the third business day after the Company releases its annual financial results.  The Non-Employee Director stock options will vest in 25% increments on the sixth month anniversary of the grant date and on each of the first, second and third annual anniversaries of the grant date.
 
Additional Award
 
The Compensation Committee will periodically evaluate the advisability of grants of long-term incentives to the executives and employees of the Company.  The Compensation Committee will make such awards as it determines are appropriate, advisable and in the best interests of the Company.
 
4
Fair Market Value
 
For purposes of this Program, the term “Fair Market Value” has the meaning ascribed to it in the Omnibus Plan.
 

 
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