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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 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) February 4, 2006
VISTEON
CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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1-15827
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38-3519512 |
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.) |
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One Village Center Drive, Van Buren Township, Michigan
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48111 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code (800)-VISTEON
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:
o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
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SECTION 1 REGISTRANTS BUSINESS AND OPERATIONS
Item 1.01. Entry into a Material Definitive Agreement.
On February 4, 2006,
the Organization and Compensation Committee (the Compensation
Committee) of the Board of Directors of Visteon Corporation (Visteon) authorized payments to
Visteons eligible employees of long-term incentive performance cash awards. These awards cover the
performance period of 2003 through 2005, and originally were made in 2003 pursuant to the Visteon
Corporation 2004 Incentive Plan (formerly known as the 2000 Incentive
Plan, the Incentive Plan). The final amounts that actually will be
paid, as authorized by the Compensation Committee, were not discretionary, but rather are based on
Visteons performance over the performance period with respect
to meeting a certain product quality
metric established in 2003 at the time of the original awards. Threshold performance of a
return-on-assets metric established in 2003 at the time of the original awards was not achieved,
and, thus, no payments in respect of approximately 75% of each
participants total target cash award will
be made. The following table sets forth the 2003-2005 long-term incentive performance cash payouts
for those current executive officers of Visteon who are expected to appear as the named executive
officers in Visteons 2006 proxy statement (the Named Executives):
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Performance |
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Name and Position |
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Period |
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LTI Cash Payout(1) |
Michael F. Johnston
Chairman and Chief Executive Officer |
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2003-2005 |
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$544,950 |
Dr. Heinz
Pfannschmidt
Executive Vice President and President,
Europe & South America |
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2003-2005 |
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133,592 |
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(1) |
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These cash payments are expected to be made February 2006. |
Further, the
Compensation Committee determined that no cash bonus
payments would be made in connection with the 2005 Annual Incentive awards made pursuant to the
Incentive Plan because Visteon did not achieve the threshold performance with respect to either a
profit-before-tax metric or a free cash flow metric for fiscal-year 2005 established at the time of
the original awards.
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On February 4, 2006, the Compensation Committee approved the performance criteria and relative
weighting of each criterion that will be used to determine awards to
eligible employees other than the Chairman and Chief Executive
Officer pursuant to
the annual incentive program for the 2006 fiscal year (the 2006 Annual Incentive) and the
long-term incentive program for the 2006-2008 performance period (the 2006-2008 Long-Term
Incentive), each in accordance with the terms of the Incentive
Plan. On February 9, 2006, based on the recommendations of the
Compensation Committee, all of the non-employee directors of Visteon
approved the performance criteria and relative weighting of each
criterion for the 2006 Annual Incentive and the 2006-2008 Long-Term
Incentive for the Chairman and Chief Executive Officer.
Pursuant
to the 2006 Annual Incentive, certain key employees other than the
Chairman and Chief Executive Officer are eligible to receive a cash
bonus based on Visteons financial performance relative to a target earnings before interest and
taxes (excluding certain non-cash impairment and other restructuring charges) (EBIT) metric and a
target free cash flow metric. Fifty percent (50%) of each eligible employees award will be based on the EBIT
metric and fifty percent (50%) will be based on the free cash flow
metric. The Chairman and Chief Executive Officer is eligible to
receive a cash bonus pursuant to his 2006 Annual Incentive solely
based on Visteons financial performance relative to a target
earnings before interest and taxes metric. The following table sets forth the 2006
Annual Incentive opportunity for the Named Executives:
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Target |
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2006 Annual Incentive Award as |
Name and Position |
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a Percentage of Base Salary(1) |
Michael F. Johnston
Chairman and Chief Executive Officer |
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130% |
Donald J. Stebbins
President and Chief Operating Officer |
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90% |
James F. Palmer
Executive Vice President and Chief Financial
Officer |
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65% |
Dr. Heinz Pfannschmidt
Executive Vice President and President,
Europe & South America |
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60% |
William G. Quigley III
Vice President, Corporate Controller
and Chief Accounting Officer |
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50% |
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(1) |
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Payments will be based on the base salary of the recipient as of December 31, 2006. Final
payments may be adjusted based on the recipients achievement of individual performance goals.
There is no maximum limit on the amount that may be paid in respect of a 2006 Annual Incentive
award, except that the Incentive Plan limits the amount payable in respect of all performance
cash awards to any Named Executive during a calendar year to $10 million. |
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The 2006-2008 Long-Term Incentive is comprised of several components designed to retain
key employees and to further align the interests of employees with Visteons long-term business
objectives and the interests of stockholders. For officers of Visteon, 25% of their total 2006-2008
Long-Term Incentive opportunity is awarded in the form of stock appreciation rights and an
additional 25% of the total is awarded in the form of restricted stock units. As a result, on
February 6, 2006 and February 9, 2006, Visteon granted stock appreciation rights, with an exercise
price equal to the fair market value of Visteons common stock on such date and vesting ratably
over three years, and restricted stock units, which will be paid in cash after three years based on
the fair market value of Visteons common stock on such date, to each of the Named Executives. In
addition, 37.5% of the total 2006-2008 Long-Term Incentive opportunity is awarded in the form of a
cash bonus based on Visteons financial performance relative to a target return on assets metric at
the end of the 2006-2008 performance period. Finally, 12.5% of the total 2006-2008 Long-Term
Incentive opportunity is awarded in the form of a cash bonus based on Visteons performance
relative to a target product quality metric at the end of the 2006-2008 performance period. The
following table sets forth the total 2006-2008 Long-Term Incentive opportunity for the Named
Executives:
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Target 2006-2008 |
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Long-Term Incentive Award |
Name and Position |
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as a Percentage of Base Salary(1) |
Michael F. Johnston
Chairman and Chief Executive Officer |
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475% |
Donald J. Stebbins
President and Chief Operating Officer |
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350% |
James F. Palmer
Executive Vice President and Chief
Financial Officer |
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250% |
Dr. Heinz Pfannschmidt
Executive Vice President and President,
Europe & South America |
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175% |
William G. Quigley III
Vice President, Corporate Controller
and Chief Accounting Officer |
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120% |
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(1) |
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Cash payments will be based on the base salary of the recipient as of December 31 of the
fiscal year preceding payment. There is no maximum limit on the amount that may be paid in
respect of the performance-based cash bonus components of a 2006-2008 Long-Term Incentive
award, except that the Incentive Plan limits the amount payable in respect of all performance
cash awards to any Named Executive during a calendar year to $10 million. |
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Also on
February 4, 2006, the Compensation Committee approved
increases in the 2006 annual base salary rates for the following Named Executives:
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2006 Annual Base |
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2005 Annual Base |
Name and Position |
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Pay Rate |
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Pay Rate |
Donald J. Stebbins
President and Chief Operating Officer |
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$ 890,000 |
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$ 850,000 |
James F. Palmer
Executive Vice President and Chief Financial
Officer |
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$ 775,000 |
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$ 735,000 |
William G. Quigley III
Vice President, Corporate Controller
and Chief Accounting Officer |
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$ 370,000 |
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$ 350,000 |
On February 9, 2006, the Board of Directors of Visteon, upon the recommendation of the
Corporate Governance and Nominating Committee, which, in consultation with an outside compensation
consultant, conducted a competitive pay analysis, approved changes to the compensation for
Visteons non-employee directors. Effective on such date, non-employee directors will receive an
annual retainer of $70,000 and, subject to shareholder approval at the 2006 annual meeting, an
annual restricted stock unit award of $70,000. In addition, committee chairs will receive an
additional annual committee retainer of $10,000, except the Chair of the Audit Committee who will
receive $15,000. Also, members of the Audit Committee other than the Chair will receive a $10,000
annual committee retainer. Previously, non-employee directors received an annual retainer of
$40,000 plus an additional $10,000 annual committee retainer for each committee on which they
served, as well as $500 ($1,000 for Audit Committee meetings) for
each committee meeting in which they
participated. Annually, non-employee directors also received a grant of 3,000 shares of restricted
stock, which would be eliminated upon shareholder approval of the increase in the restricted stock
unit award discussed above.
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SIGNATURE
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.
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VISTEON CORPORATION
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Date: February 9, 2006
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By:
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/s/ John Donofrio |
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John Donofrio
Senior Vice President
and General Counsel |