ccrn_sc14a.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
 
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
 
Filed by the Registrant  þ
 
Filed by a Party other than the Registrant  o
 
Check the appropriate box:
 
o
Preliminary Proxy Statement
 
o
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
 
þ
Definitive Proxy Statement
 
o
Definitive Additional Materials
 
o
Soliciting Material Pursuant to §240.14a-12
 
CROSS COUNTRY HEALTHCARE, INC.
(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):
 
þ
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)
Filing Party:
 
 
(4)
Date Filed:
 


 
 

 
 
 
CROSS COUNTRY HEALTHCARE, INC.
6551 Park of Commerce Boulevard
Boca Raton, Florida 33487
 
March 22, 2013
 
Dear Cross Country Healthcare Stockholder:
 
I invite you to attend our Annual Meeting of Stockholders. The meeting will be held on Wednesday, May 1, 2013 at 11:00 a.m. Eastern Time at the offices of Proskauer Rose LLP at Eleven Times Square, New York, New York 10036-8299.
 
On the following pages, you will find the Notice of Meeting, which lists the matters to be considered and acted upon at the meeting, and the Proxy Statement. After the formal business session, we will discuss the financial results for 2012 and report on current operations.
 
Your vote is very important regardless of the number of shares you own. Detailed voting instructions appear on page 1 of the Proxy Statement. The Board of Directors unanimously recommends that you vote “FOR” Proposals I, II, III and IV described in the Proxy Statement.
 
 
Sincerely,
   
 
 
Joseph A. Boshart
 
President and Chief Executive Officer
 
 
 

 
 
CROSS COUNTRY HEALTHCARE, INC.
6551 Park of Commerce Boulevard
Boca Raton, Florida 33487
 
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 
TO BE HELD MAY 1, 2013
 
To the Holders of Common Stock:
 
The Annual Meeting of Stockholders of Cross Country Healthcare, Inc. (the “Company”) will be held at the offices of Proskauer Rose LLP at Eleven Times Square, New York, New York 10036-8299 on Wednesday, May 1, 2013, at 11:00 a.m. Eastern Time for the following purposes:
 
1.
The election of eight directors to the Company’s Board of Directors to hold office until the next Annual Meeting or until their respective successors are duly elected and qualified;
 
2.
To re-approve the Code Section 162(m) performance goals under the Company’s 2007 Stock Incentive Plan;
 
3.
The approval and ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2013;
 
4.
The non-binding advisory vote to approve compensation of the Company’s named executive officers, as described in this proxy statement; and
 
5.
To transact such other business, if any, as may properly come before the meeting or any adjournment thereof.
 
Stockholders of record at the close of business on March 5, 2013 are entitled to receive notice of, and to vote at, the Annual Meeting.
 
Important Notice Regarding the Availability of
Proxy Materials for the Annual Meeting of Stockholders
to be Held on May 1, 2013.
 
The Proxy Statement and the Annual Report to stockholders are available online at our website at http://ir.crosscountryhealthcare.com. We are pleased to take advantage of the Securities and Exchange Commission rules that allow us to furnish these proxy materials and our Annual Report to stockholders on the Internet. We believe that posting these materials on the Internet enables us to provide stockholders with the information that they need more quickly, while lowering our costs of printing and delivery and reducing the environmental impact of our Annual Meeting.
 
 
By Order of the Board of Directors,
   
   
 
Susan E. Ball
 
General Counsel and Secretary
   
 
March 22,2013
 
YOUR VOTE IS IMPORTANT. ACCORDINGLY, THE COMPANY URGES YOU TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD REGARDLESS OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING. STOCKHOLDERS CAN ALSO RETURN THEIR VOTE BY THE INTERNET OR BY PHONE – PLEASE SEE THE PROXY CARD FOR VOTING INSTRUCTIONS.
 
 
 

 
 
CROSS COUNTRY HEALTHCARE, INC.
6551 Park of Commerce Boulevard
Boca Raton, Florida 33487
 
PROXY STATEMENT
____________________________________
 
GENERAL INFORMATION
 
These proxy materials are furnished in connection with the solicitation by the Board of Directors of Cross Country Healthcare, Inc. (“Cross Country,” “the Company,” “our,” “we,” or “us”), a Delaware corporation, of proxies to be voted at our 2013 Annual Meeting of Stockholders (the “Annual Meeting”), or at any adjournment or postponement thereof.
 
You are invited to attend our Annual Meeting on Wednesday, May 1, 2013, beginning at 11:00 a.m. Eastern Time at the offices of Proskauer Rose LLP at Eleven Times Square, New York, New York 10036-8299.
 
Electronic Notice and Mailing. Pursuant to the rules promulgated by the Securities and Exchange Commission, or the Commission, we are making our proxy materials available to you on the Internet. Accordingly, we will mail a Notice of Internet Availability of proxy materials (which we refer to as the Notice of Internet Availability) to the beneficial owners of our common stock, par value $.0001 per share, or Common Stock, on or about March 22, 2013. From the date of the mailing of the Notice of Internet Availability until the conclusion of the Annual Meeting, all beneficial owners will have the ability to access all of the proxy materials at www.proxyvote.com. All stockholders will have an opportunity to request a paper or e-mail delivery of these proxy materials.
 
The Notice of Internet Availability will contain:
 
 
the date, time and location of the Annual Meeting, the matters to be acted upon at the Annual Meeting and the Board of Directors’ recommendation with regard to each matter;
 
 
the Internet address that will enable access to the proxy materials;
 
 
a comprehensive listing of all proxy materials available on the website;
 
 
a toll-free phone number, e-mail address and Internet address for requesting either paper or e-mail delivery of proxy materials;
 
 
the last reasonable date a stockholder can request materials and expect them to be delivered prior to the meeting; and
 
 
instructions on how to access the proxy card.
 
You may also request a paper or e-mail delivery of the proxy materials on or before the date provided in the Notice of Internet Availability by calling 1-800-579-1639. We will fill your request within three business days. You will also have the option to establish delivery preferences that will be applicable for all your future mailings.
 
How to Vote. Stockholders of record (that is, stockholders who hold their shares in their own name) can vote any one of four ways:
 
 
(1)
By Internet: Go to the website www.proxyvote.com to vote via the Internet. You will need to follow the instructions on your proxy card and the website. If you vote via the Internet, you may incur telephone and Internet access charges.
 
 
(2)
By Telephone: Call the toll-free number 1-800-690-6903 to vote by telephone. You will need to follow the instructions on your proxy card and the recorded instructions.
 
 
(3)
By Mail: If you prefer, you can contact us to obtain copies of all proxy materials, including proxy cards, by calling 1-800-579-1639, or by mail: Cross Country Healthcare, Inc., Investor Relations Department, at 6551 Park of Commerce Blvd., Boca Raton, Florida, 33487. If you contact us to request a proxy card, please mark, sign and date the proxy card and return it promptly in the self-addressed, stamped envelope, that we will provide. If you sign and return your proxy card but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board of Directors.
 
 
(4)
In Person: You can attend the Annual Meeting, or send a personal representative with an appropriate proxy, to vote by ballot. Record holders and other beneficial owners holding shares in the name of a bank, broker or other holder of record (“street name”) or their proxies may attend the Annual Meeting in person. When you arrive at the Annual Meeting, you must present photo identification, such as a driver’s license.
 
 
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If you vote via the Internet or by telephone, your electronic vote authorizes the named proxies to vote in the same manner as if you signed, dated and returned your proxy card. If you vote via the Internet or by telephone, do not mail a proxy card.
 
If your shares are held in street name you will receive instructions from the holder of record that you must follow in order for your shares to be voted. Internet and telephone voting also will be offered to stockholders owning shares through most banks and brokers.
 
Stockholders Entitled to Vote. Persons holding shares of our Common Stock at the close of business on March 5, 2013, the record date for the Annual Meeting, are entitled to receive notice of and to vote their shares at the Annual Meeting. As of that date, there were 31,523,769 shares of Common Stock outstanding. Each share of Common Stock is entitled to one vote on each matter properly brought before the Annual Meeting.
 
Revocability of Proxies. You may revoke your proxy and reclaim your right to vote up to and including the day of the Annual Meeting by giving written notice of revocation to us (to the attention of the Inspectors of Election), timely delivering a valid, later-dated proxy or voting by ballot at the Annual Meeting. Please note that attendance at the Annual Meeting will not by itself revoke a proxy.
 
Vote at the Annual Meeting. Your mail-in vote, your e-vote or vote by telephone will not limit your right to vote at the Annual Meeting if you later decide to attend in person. If your shares are held in “street name,” as described above, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote at the meeting.
 
All shares that have been properly voted and not revoked will be voted at the Annual Meeting in accordance with your instructions. If you sign and return your proxy card, or vote by internet or telephone but fail to give voting instructions, the shares represented by the proxy will be voted by the Proxy Committee as recommended by the Board of Directors. The Proxy Committee consists of Joseph A. Boshart and Thomas C. Dircks.
 
Other Matters. Proxy cards, unless otherwise indicated by the stockholder, confer upon the Proxy Committee discretionary authority to vote all shares of stock represented by the proxies on any matter which may be properly presented for action at the Annual Meeting even if not covered herein. If any of the nominees for director named in Proposal I—Election of Directors should be unavailable for election, the proxies will be voted for the election of such other person as may be recommended by the Board of Directors in place of such nominee. The Board of Directors is not aware of any matter for action by the stockholders at the Annual Meeting other than the matters described in the Notice.
 
Quorum. The presence, in person or by proxy, of the holders of a majority of the shares of Common Stock issued and outstanding entitled to vote at the Annual Meeting is required to constitute a quorum. Abstentions and broker non-votes (i.e., proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owner or other persons entitled to vote shares as to a matter with respect to which the brokers or nominees do not have discretionary power to vote) are counted as present for purposes of determining the presence or absence of a quorum for the transaction of business.
 
Required Vote; Abstentions and Broker Non-Votes. The affirmative vote of a plurality of the shares represented at the Annual Meeting, in person or by proxy and entitled to vote is required for the election of directors. The Board of Directors has amended the Company’s By-Laws so that effective with the Annual Meeting of Stockholders to be held in 2014, where there is an uncontested election, directors will be elected by a majority of the votes cast at such annual meeting. Votes withheld, abstentions and broker non-votes will not have any effect on the outcome of voting with respect to the election of directors, unless no affirmative votes are received for a nominee. The affirmative vote of holders of a majority of shares represented at the Annual Meeting, in person or by proxy and entitled to vote non binding advisory vote is required for the re-approval of the Code Section 162(m) performance goals under the Company’s 2007 Stock Incentive Plan, to approve the non-binding vote regarding the compensation of the Company’s named executive officers as described in this proxy statement and ratification of the Audit Committee selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2013. Abstentions have the same effect as a vote against any proposal. Broker non-votes are deemed not entitled to vote and are not counted as votes for or against any proposal.
 
 
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Proxy Solicitation. We will bear the cost of solicitation, including the preparation, assembly, printing and mailing of the proxy materials. Copies of solicitation materials will be furnished to brokerage houses, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward this solicitation material to such beneficial owners. In addition, we may reimburse such persons for their costs in forwarding the solicitation materials to such beneficial owners. The original solicitation of proxies by mail may be supplemented by a solicitation by telephone, telegram or other means by our directors, officers or employees. No additional compensation will be paid to these individuals for any such services. Except as described above, we do not presently intend to solicit proxies other than by mail.
 
Stockholder Communications. The Board of Directors has adopted a process by which stockholders may communicate with our directors. Any stockholder wishing to do so may call our toll-free phone number at 800-354-7197 or send an e-mail to governance@crosscountryhealthcare.com. All such communications will be kept confidential and forwarded directly to the Board of Directors or any individual director or committee of the Board of Directors, as applicable.
 
Code of Ethics and Business Ethics Policy. We have adopted a code of ethics and a business ethics policy that applies to all of our employees, including executive officers and the Board of Directors. The code of ethics and business ethics policy are available on our website at www.crosscountryhealthcare.com under “Investor Relations” and the code of ethics has been filed with the Commission as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2004 (filed as Exhibit 14.1 on March 16, 2005), and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2012, or 2012 Form 10-K.
 
 
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
 
The following table sets forth certain information, as of March 1, 2013, regarding the beneficial ownership of our Common Stock by each person who is known by us to be the beneficial owner of 5% or more of our Common Stock, our Chief Executive Officer, Chief Financial Officer and the three most highly compensated persons (other than the CEO and CFO) who were serving as executive officers at December 31, 2012 (referred to herein as Named Executive Officers, or the NEOs), each of our directors and director nominees, and all directors and executive officers as a group. The percentages in the last column are based on 31,523,769 shares of Common Stock outstanding on March 5, 2013, plus the number of shares of Common Stock deemed to be beneficially owned by such individual or group pursuant to Rule 13d-3(d)(1) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. In each case, except as otherwise indicated in the footnotes to the table, the shares shown in the second column are owned directly by the individual or members of the group named in the first column and such individual or group members have sole voting and dispositive power with respect to the shares shown. For purposes of this table, beneficial ownership is determined in accordance with federal securities laws and regulations. Persons shown in the table disclaim beneficial ownership of all securities not held by such persons directly and inclusion in the table of shares not owned directly by such persons does not constitute an admission that such shares are beneficially owned by the director or officer for purposes of Section 16 of the Exchange Act or any other purpose. Shares of Common Stock subject to options that are currently exercisable or exercisable within 60 days of March 5, 2013 are deemed outstanding for computing the ownership percentage of the stockholder holding such options, but are not deemed outstanding for computing the ownership percentage of any other stockholder.
 
Name
 
Number of Shares of
Common Stock
Beneficially Owned
 
Percentage of Outstanding Common Stock Owned
 
Wells Fargo & Company
 
3,550,364
(a)(b)
 
11.3
%
 
BlackRock, Inc.
 
2,749,865
(a)(c)
 
8.7
%
 
Charterhouse Equity Partners III, L.P.
 
2,461,432
(a)(d)
 
7.8
%
 
Dimensional Fund Advisors LP
 
2,422,818
(a)(e)
 
7.7
%
 
Third Avenue Management LLC
 
2,352,804
(a)(f)
 
7.5
%
 
Royce & Associates, LLC
 
1,608,668
(a)(g)
 
5.1
%
 
Vickie Annenberg
 
196,487
(h)(i)
 
*
   
Susan E. Ball
 
142,966
(h)(i)
 
*
   
Joseph A. Boshart
 
711,283
(h)(i)(j)
 
2.2
%
 
W. Larry Cash
 
69,633
(h)(i)
 
*
   
Thomas C. Dircks
 
12,644
(a)(h)(i)(k)
 
*
   
Gale Fitzgerald
 
39,633
(h)(i)
 
*
   
William J. Grubbs
   
(i)
 
0
   
Emil Hensel
 
430,351
(h)(i)(l)
 
1.4
%
 
Richard M. Mastaler
 
20,006
(h)(i)
 
*
   
Joseph Trunfio
 
54,633
(h)(i)
 
*
   
Jonathan W. Ward
 
181,929
(h)(i)
 
*
   
All directors and executive officers as a group
 
2,044,872
(m)
 
6.4
%
 
_______________
*
Less than 1%
 
(a)
Addresses are as follows: Wells Fargo & Company, 420 Montgomery Street, San Francisco, CA 94104; BlackRock, Inc., 40 East 52nd Street, New York, New York 10022; Charterhouse Equity Partners III, L.P., 1105 N. Market Street, Suite 1300, Wilmington, DE 19899; Dimensional Fund Advisors LP, Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas 78746; Third Avenue Management LLC, 622 Third Avenue, 32nd Floor, New York, New York 10017; and Royce & Associates, LLC, 745 Fifth Avenue, New York, NY 10151.
 
(b)
The information regarding the beneficial ownership of shares by Wells Fargo & Company was obtained from its statement on Schedule 13G/A, filed with the Commission on February 13, 2013. Such statement discloses that Wells Fargo & Company possesses shared dispositive power over 6,381,410 shares and shared voting power over 3,580,391 shares.
 
 
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(c)
The information regarding the beneficial ownership of shares by BlackRock, Inc. was obtained from its statement on Schedule 13G/A, filed with the Commission on February 1, 2012. Such statement discloses that BlackRock, Inc. possesses sole voting power and sole dispositive power over 2,749,865 shares.
 
(d)
The general partner of Charterhouse Equity Partners III, L.P. (“CEP III”) is CHUSA Equity Investors III, L.P., whose general partner is Charterhouse Equity III, Inc., a wholly owned subsidiary of Charterhouse Group, Inc. (“Charterhouse”). The information regarding the beneficial ownership of shares by CEP III was obtained from its statement on Schedule 13G/A filed with the Commission on February 8, 2013. Such statement discloses that CEP III possesses sole dispositive and voting power over 2,461,432 shares.
 
(e)
The information regarding the beneficial ownership of shares by advisory clients of Dimensional Fund Advisors LP was obtained from its statement on Schedule 13G/A, filed with the Commission on February 11, 2013. In its role as investment advisor or manager, Dimensional Fund Advisors LP possesses sole investment and/or voting power over 2,387,822 shares and sole dispositive power over 2,422,818 shares.
 
(f)
The information regarding the beneficial ownership of shares by Third Avenue Management LLC was obtained from its statement on Schedule 13G/A, filed with the Commission on February 14, 2013. Such statement discloses that Third Avenue Management LLC possesses sole dispositive and voting power over 2,352,804 shares.
 
(g)
The information regarding the beneficial ownership of shares by Royce & Associates, LLC was obtained from its statement on Schedule 13G/A, filed with the Commission on January 7, 2013. Such statement discloses that Royce & Associates, LLC possesses sole dispositive and voting power over 1,608,668 shares.
 
(h)
Includes shares of Common Stock which such individuals have the right to acquire through the exercise of stock options within 60 days of March 5, 2013 as follows: Vickie Anenberg, 90,571; Susan E. Ball, 62,692; Joseph A. Boshart, 166,999; W. Larry Cash, 18,000; Thomas C. Dircks, 0; Gale Fitzgerald, 0; Emil Hensel, 131,387; Richard M. Mastaler, 0; Joseph Trunfio, 16,000 and Jonathan W. Ward, 95,124. Includes Restricted Shares as follows: Vickie Anenberg, 57,571; Susan E. Ball, 51,631; Joseph A. Boshart, 95,000; W. Larry Cash, 23,048; Thomas C. Dircks, 12,644; Gale Fitzgerald, 23,048; Emil Hensel, 72,931; Richard M. Mastaler, 18,166; Joseph Trunfio, 23,048 and Jonathan W. Ward, 60,800.
 
(i)
Address is c/o Cross Country Healthcare, Inc., 6551 Park of Commerce Boulevard, Boca Raton, Florida 33487.
 
(j)
Mr. Boshart holds 428,128 shares directly, his wife holds 78,377 shares and each of his three children holds 12,593 shares.
 
(k)
Thomas C. Dircks is an executive officer and director of Charterhouse.
 
(l)
Mr. Hensel holds 130,152 shares directly, his wife holds 168,812 shares.
 
(m)
Includes 656,215 shares of Common Stock which the directors and executive officers have the right to acquire through the exercise of stock options and 494,363 restricted shares within 60 days of March 5, 2013.
 
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
The members of our Board of Directors, our executive officers and persons beneficially owning 10% or more of our outstanding Common Stock are subject to the reporting requirements of Section 16(a) of the Exchange Act that requires them to file reports with respect to their ownership of our Common Stock and their transactions in such Common Stock. Based solely upon a review of (i) the copies of Section 16(a) reports that we have received from such persons or entities for transactions in our Common Stock and their Common Stock holdings for the year ended December 31, 2012 and (ii) the written representations received from one or more of such persons or entities that no annual Form 5 reports were required to be filed by them for such fiscal year, we believe that all reporting requirements under Section 16(a) for such fiscal year were met in a timely manner by our directors, executive officers and beneficial owners of 10% or more of our Common Stock.
 
 
5

 
 
PROPOSAL I
ELECTION OF DIRECTORS
 
The Board of Directors currently consists of seven members. All of the directors currently serving on the Board of Directors have been nominated by the Governance and Nominating Committee of the Board of Directors to stand for re-election at the Annual Meeting of Stockholders for one-year terms. In addition, the Governance and Nominating Committee has nominated Mr. William Grubbs, to stand for election as a director at the Annual Meeting of Stockholders. Effective April 1, 2013, Mr. Grubbs will become President and Chief Operating Officer of the Company. The Board of Directors unanimously approved these nominations. Each nominee elected will hold office until the Annual Meeting of Stockholders to be held in 2014 and until a successor has been duly elected and qualified unless, prior to such meeting a director shall resign, or his or her directorship shall become vacant due to his or her death, resignation or removal. All nominees except Mr. Grubbs were elected at the Annual Meeting of stockholders held in 2012.
 
Each nominee has agreed to serve, if elected, and management has no reason to believe that they will be unavailable to serve. If any of the nominees should be unavailable for election, the proxies will be voted for the election of such other person as may be recommended by the Board of Directors in place of such nominee. Shares represented by proxies that are returned properly signed will be voted FOR the nominees unless the stockholder indicates on the proxy that authority to vote the shares is withheld for one or more or for all of the nominees listed. A proxy cannot be voted for a greater number of persons than the seven nominees named below. Directors are elected by a plurality of the votes cast. Votes withheld, abstentions and broker non-votes will not have any effect on the outcome of voting with respect to the election of directors, unless no affirmative votes are received for a nominee. The following eight individuals have been nominated for election at the Annual Meeting of Stockholders for a one-year term ending upon the 2014 Annual Meeting of Stockholders:
 
Name
 
Age
 
Position
         
Joseph A. Boshart
 
56
 
Chief Executive Officer and Director
Emil Hensel
 
62
 
Chief Financial Officer and Director
William J. Grubbs
 
55
 
President, Chief Operating Officer and Director effective April 1, 2013
W. Larry Cash
 
64
 
Director
Thomas C. Dircks
 
55
 
Director
Gale Fitzgerald
 
62
 
Director
Richard M. Mastaler
 
67
 
Director
Joseph Trunfio
 
66
 
Director
 
The Board recommends that holders vote “FOR” the election of the nominees.
 
In selecting qualified individuals to serve on our Board of Directors, among other attributes, we look for those individuals who possess characteristics that include integrity, business experience, financial acumen and leadership abilities, familiarity with our business and businesses similar or analogous to ours, and the extent to which a candidate’s knowledge, skills, background and experience are already represented by other members of our Board of Directors. In addition, in composing a well-rounded Board of Directors, we look for those individuals possessing a diversity of complementary skills, core-competencies and expertise, including diversity with respect to age, gender, national origin and race, for the optimal functioning of the Board and with a view toward constituting a Board with the appropriate skills and experience necessary to oversee our business.
 
The following information sets forth the principal occupation and employment during at least the past five years of each director nominee, positions and offices with us, specific skills, attributes and qualifications and certain other information. In addition, we have summarized for each director nominee why such director nominee has been chosen to serve on our Board of Directors. No family relationship exists among any of the nominees or executive officers.
 
Joseph A. Boshart has served as President and Chief Executive Officer since July 1999, and formerly served in such capacities at our predecessor since 1994. It is anticipated that Mr. Boshart will retire from his position with the Company on or about July 29, 2013. He has served as a director since July 1999. Mr. Boshart holds a B.S. degree in Economics from the University of Michigan.
 
The Board has concluded that Mr. Boshart should serve as a director because of his extensive experience in executive management, corporate governance and strategic planning. Mr. Boshart’s day-to-day leadership as Chief Executive Officer enables him to understand the complexities of our business, provides him with intimate knowledge of our business and operations and offers the Board the critical expertise necessary to meet our specific needs.
 
 
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Emil Hensel has served as Chief Financial Officer since July 1999 and formerly served in such capacity at our predecessor since 1991. He has served as a director since July 1999. Mr. Hensel holds a B.S. degree in Electrical Engineering from Columbia University, a Masters degree in Engineering from Johns Hopkins University and a Masters of Business Administration from New York University.
 
The Board has concluded that Mr. Hensel should serve as a director due to his extensive experience in corporate financial management, fiscal oversight, corporate governance, risk management and specialized experience in accounting and tax matters. Additionally, Mr. Hensel provides strategic leadership through the implementation of our overall financial policies and procedures as well as ensuring such policies and procedures meet short- and long-term corporate objectives and regulatory requirements. Mr. Hensel has intimate knowledge of our business and operations and serves as the primary financial analytical leader to support our overall business objectives and to establish the most unified financial and administrative structure possible.
 
William J. Grubbs will become President, Chief Operating Officer and a director of the Company on April 1, 2013. Mr. Grubbs will become Chief Executive Officer of the Company when Mr. Boshart retires on or about July 29, 2013. From October 2012 through March 2013, Mr. Grubbs was Executive Vice President and Chief Operating Officer of Trueblue, Inc., a staffing company. From 2005 through 2011, Mr. Grubbs held various senior executive positions with SFN Group, Inc., a staffing company formerly known as Spherion Corporation. Mr. Grubbs holds a B.S. degree in Computer Science from University of New Hampshire.
 
The Board has concluded that Mr. Grubbs serve as a director due to his extensive executive level management skills and operational experience.
 
W. Larry Cash has been a director and Audit Committee member since October 2001 and a Compensation Committee member since May 2006. He has served as Executive Vice President and Chief Financial Officer of Community Health Systems since September 1997 and a Director of Community Health Systems since May 2001. Prior to joining Community Health Systems, Mr. Cash served as Vice President and Group Chief Financial Officer of Columbia/HCA Healthcare Corporation from September 1996 to August 1997. Prior to Columbia/HCA, Mr. Cash spent 23 years at Humana, Inc., most recently as Senior Vice President of Finance and Operations from 1993 to 1996. He received his B.S. in Accounting from the University of Kentucky at Lexington.
 
The Board has concluded that Mr. Cash should serve as a director due to his extensive executive level management skills, corporate financial management and operational experience. Additionally, Mr. Cash has a vast understanding of many aspects of the healthcare industry and brings solid expertise and proven leadership skills to the Board.
 
Thomas C. Dircks has been a director since July 1999, a member of the Compensation Committee since October 2001 and a member of the Governance and Nominating Committee since March 2004. Mr. Dircks has been Managing Partner of Charterhouse since June 2002. Mr. Dircks served as President of Charterhouse from June 2001 until June 2002 and served as Executive Vice President of Charterhouse from July 2000 until June 2001. He has been employed as an executive officer of Charterhouse since 1983. He was previously employed as a Certified Public Accountant at a predecessor of PricewaterhouseCoopers, LLP. He holds a B.S. in Accounting and an M.B.A. from Fordham University.
 
The Board has concluded that Mr. Dircks should serve as a director due to his extensive executive management, accounting, tax and strategic planning expertise. Additionally, Mr. Dircks’ risk management skills and financial acumen add an important dimension to our Board’s composition.
 
Gale Fitzgerald has been a director and member of the Audit Committee since May 2007 and is a retired principal of TranSpend, Inc., a consulting company. Before co-founding TranSpend, Inc. in 2003, she served as the President of QP Group, Inc. Prior to joining QP Group, Inc., she served as the Chairman and Chief Executive Officer of Computer Task Group, Inc. from 1994 to 2000. She joined Computer Task Group, Inc. in 1991 as Senior Vice President and was promoted to President and Chief Operating Officer in July 1993. Prior to joining Computer Task Group, Inc., she was Vice President, Professional Services at International Business Machines Corporation, which evolved into IBM Global Services. Ms. Fitzgerald worked at IBM for 18 years in various technical, marketing and management positions. She is currently on the Boards of Health Net, Inc. and Diebold, Inc. Ms. Fitzgerald has a B.A. in Government from Connecticut College.
 
 
7

 
 
The Board has concluded that Ms. Fitzgerald should serve as a director because of her extensive executive leadership experience and management skills. Ms. Fitzgerald’s expertise provides an invaluable resource to the Board with respect to corporate and strategic planning and assessing and managing risks.
 
Richard M. Mastaler has been a director since June 21, 2011. Mr. Mastaler is the Chairman and Chief Executive Officer of Managed Health Venture, Inc., a managed care consulting firm, which he founded in 2002. He previously held executive-level positions with CCN Managed Care, Inc., Magellan Health Services, Inc., Preferred Health Networks, QualMed, Inc., Humana Medical Plan, Unilab Corporation, and three Humana hospitals. He also is a Fellow of the American College of Healthcare Executives. Mr. Mastaler holds a Bachelor of Science degree in Business Administration from Florida State University and a Master’s degree in Healthcare Administration from George Washington University.
 
The Board has concluded that Mr. Mastaler should serve as a director because of his extensive healthcare and management experience. Mr. Mastaler’s experience in the healthcare industry provides an excellent resource to the Board for strategic planning and leadership purposes.
 
Joseph Trunfio has been a director and Audit Committee member since October 2001 and Governance and Nominating Committee member since May 2006. He has served as President and Chief Executive Officer of Atlantic Health System, a not-for-profit hospital group, since March 1999, where he is a member of the Board of Trustees. From July 1997 to February 1999, Mr. Trunfio served as President and Chief Executive Officer of Via Caritas Health System, a not-for-profit hospital group. Prior to his position with Via Caritas Health System, he served as President and Chief Executive Officer of SSM Healthcare Ministry Corp., a not-for-profit hospital group. Mr. Trunfio received his B.A. from St. John’s University (N.Y.) and holds a Ph.D. in Clinical Psychology from the University of Miami.
 
The Board has concluded that Mr. Trunfio should serve as a director due to his extensive executive management and leadership experience. Mr. Trunfio brings to the Board a depth of understanding of our business and the various challenges we face in the current economic environment.
 
Pursuant to our Amended and Restated Stockholders Agreement dated August 23, 2001, CEP III had the right to nominate one director to our Board of Directors. CEP III’s nominee is Mr. Dircks who currently serves on our Board of Directors and has been nominated by the Governance and Nominating Committee to stand for re-election.
 
Affirmative Determinations Regarding Director Independence and Other Matters
 
The Board of Directors observes all criteria for independence established by the Nasdaq Stock Market, or Nasdaq, under its applicable Listing Rules. As such, the Board of Directors has determined each of the following directors and nominees to be an “independent director” under the meaning of Rule 5605(a) (2) of the Nasdaq Listing Rules:
 
W. Larry Cash
Thomas C. Dircks
Gale Fitzgerald
Richard M. Mastaler
Joseph Trunfio
 
The Board of Directors has also determined that each member of the Audit, Compensation and Governance and Nominating Committees meets the applicable independence requirements set forth by Nasdaq, the Commission and the Internal Revenue Service. The Board of Directors has further determined that W. Larry Cash, a member and Chairman of the Audit Committee, is an “audit committee financial expert” as defined in the rules promulgated by the Commission and, as such, Mr. Cash satisfies the requirements of Rule 5605(c)(2) of the Nasdaq Listing Rules.
 
Board Committees and Meetings
 
Meetings of the Board of Directors. During the year ended December 31, 2012, there were 14 meetings of the Board of Directors. Each director who served in such capacity during the year ended December 31, 2012 attended at least 90% of the aggregate number of meetings of the Board of Directors and of the committee or committees thereof on which he or she served. All of the directors nominated for election to the Board except Mr. Grubbs were members of the Board for the entire 2012 year. It is the practice of the Board of Directors to have the independent directors meet in an executive session at each meeting of the Board. It is also our practice that all directors should attend the Annual Meeting of Stockholders in person. All of the then directors attended the 2012 Annual Meeting in person.
 
 
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Board Leadership Structure and Role in Risk Oversight
 
Our Company is led by Mr. Joseph Boshart, who has served as our President and Chief Executive Officer since July 1999, and formerly served in such capacities at our predecessor since 1994. Our Board of Directors is comprised of Mr. Boshart, Mr. Emil Hensel, our Chief Financial Officer, and five independent directors. Each of our Audit, Compensation and Governance and Nominating Committees are comprised entirely of independent directors. In accordance with our by-laws, our Board of Directors has authority to, among other things, appoint a Chief Executive Officer and a Chairman, and each of these positions may be held by the same person. Currently, we do not have a Chairman of the Board of Directors nor do we have a lead director. Our Chief Executive Officer is also our President and, pursuant to our by-laws, has authority to act as Chairman in the absence of a Chairman of the Board.
 
While risk management is primarily the responsibility of our management team, the Board is responsible for the overall supervision of our risk management activities which occurs at both the full Board level and at the committee level. Our Audit Committee also has the responsibility to, among other things, review with management, the Company’s policies regarding major financial risk exposures and the steps management has taken to monitor and control such exposures. The Audit Committee also reviews with management, the policies governing the process by which risk assessment and risk management are undertaken and has oversight for the effectiveness of management’s enterprise risk management process that monitors key business risks facing us. In addition to our Audit Committee, the other committees of the Board consider the risks within their areas of responsibility. For example, the Compensation Committee assesses risk that could result from the structure and design of our executive compensation programs, our incentive compensation plans, director compensation, perquisites and compliance with the Sarbanes-Oxley Act of 2002 regarding prohibitions on loans to executive officers and directors. The Governance and Nominating committee evaluates risks with respect to succession planning, corporate governance matters and the background and suitability of director nominees. Additionally, the Board of Directors continually evaluates our risks related to liquidity, operations, credit, regulatory compliance and fiduciary risks, and the processes in place to monitor and control such exposures. Management also provides regular updates throughout the year to the respective committees regarding management of the risks they oversee, and each of these committees report their findings to the full Board, including any areas of risk that require Board attention. Additionally, through dedicated sessions, the full Board reviews our short- and long-term strategies, including consideration of risks facing us and their potential impact. The Board believes its oversight role provides our stockholders with a clear understanding of how management and the Board of Directors interface to ensure the ongoing assessment of the various risks facing us.
 
The Board of Directors has determined that our current board leadership structure is appropriate and helps to ensure proper risk oversight for us for a number of reasons, the most significant of which are as follows:
 
 
our Chief Executive Officer is the individual selected by the Board of Directors to manage us on a day-to-day basis and his direct involvement in our operations makes him best positioned to consult with our Board to create appropriate agendas for Board meetings and determine the time allocated to each agenda item in discussions of our short- and long-term objectives, as well as lead productive strategic planning sessions with the Board;
 
 
Members of the Board are kept informed of our business by various documents sent to them before each meeting and as otherwise requested, as well as through oral reports made to them during these meetings by our Chief Executive Officer, Chief Financial Officer and other senior executives;
 
 
our Board structure provides strong oversight by independent directors, in particular because non-management directors meet separately, the Board is advised of all actions taken by the various committees of the Board, they have full access to all of our books, records and reports and members of management are available at all times to answer their questions;
 
 
our Board has extensive management experience in business and particularly the healthcare industry; and
 
 
the continuity and tenure of our Board provide a valuable source of institutional knowledge regarding our evaluation and current makeup.
 
Committees of the Board of Directors. Our Board of Directors has three standing committees: Audit, Compensation and Governance and Nominating Committees. Each of these committees is comprised solely of independent directors under the meaning of Rule 5605(a) (2) of the Nasdaq Listing Rules. Each committee operates pursuant to a committee charter. The charters to each of the Audit, Compensation and Governance and Nominating Committees are available on our website at www.crosscountryhealthcare.com by choosing the “Investor Relations” link, clicking on the “Corporate Governance” section and selecting the respective charter under “View.”
 
 
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The current composition of our Board’s standing committees is as follows:
 
Audit Committee
 
The Audit Committee consists of Messrs. Cash and Trunfio and Ms. Fitzgerald. Messrs. Cash and Trunfio both joined the Audit Committee upon their appointment to the Board in October 2001; Ms. Fitzgerald joined the Audit Committee upon her appointment to the Board in May 2007. Mr. Cash is the Chairman of the Audit Committee. Messrs. Cash and Trunfio and Ms. Fitzgerald are independent directors under the Commission’s rules and Nasdaq’s Listing Rules for Audit Committees. The Audit Committee has adopted a written charter, which is available on our website as described under “Committees of the Board of Directors.” The Audit Committee is the principal agent of the Board of Directors in overseeing (i) the quality and integrity of our financial statements, (ii) legal and regulatory compliance, (iii) the independence, qualifications, and performance of our independent registered public accounting firm, (iv) the performance of our internal auditors and (v) the integrity of management and the quality and adequacy of disclosures to stockholders. The Committee also:
 
 
is solely responsible for hiring and terminating our independent registered public accounting firm and pre-approving all auditing, as well as any audit-related, tax advisory and any other non-auditing services to be performed by the independent registered public accounting firm;
 
 
reviews and discusses with our independent registered public accounting firm their quality control procedures and our critical accounting policies and practices;
 
 
regularly reviews the scope and results of audits performed by our independent registered public accounting firm and internal auditors;
 
 
meets with management to review the adequacy of our internal control framework and our financial, accounting, and reporting and disclosure control processes;
 
 
reviews our periodic filings and quarterly earnings releases;
 
 
reviews and discusses with our chief executive and financial officers the procedures they follow to complete their certifications in connection with our periodic filings with the Commission; and
 
 
discusses management’s plans with respect to our major financial risk exposures.
 
During 2012, there were 4 meetings of the Audit Committee. The Audit Committee regularly meets with our independent registered public accounting firm separate from management and regularly holds executive sessions without management.
 
The Board has determined that each member of the Audit Committee is able to read and understand fundamental financial statements, including our balance sheet, income statement and cash flow statement, as required by Nasdaq rules. In addition to determining that Mr. Cash is an “audit committee financial expert” under the Commission’s rules, the Board has determined that Mr. Cash satisfies the Nasdaq rule requiring that at least one member of the Audit Committee have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the member’s financial sophistication, including being, or having been, a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.
 
Compensation Committee
 
The Compensation Committee oversees the compensation of our executives, our executive management structure, the compensation related policies and programs involving our executive management and the level of benefits of officers and key employees. The members of the Compensation Committee are Messrs. Cash and Dircks who are both independent directors under Rule 5605(a) (2) of the Nasdaq Listing Rules. Mr. Dircks is the Chairman of the Compensation Committee. During 2012, there were 2 meetings of the Compensation Committee. The Compensation Committee has adopted a written charter, which is available on our website as described under “Committees of the Board of Directors.”
 
The agenda for meetings of the Compensation Committee is determined by its Chairman with the assistance of our Chief Executive Officer. Compensation Committee meetings are regularly attended by our Chief Executive Officer, except for portions of the meetings with respect to voting or deliberation. The Compensation Committee’s Chairman reports the Committee’s recommendations on executive compensation to the Board of Directors.
 
The Compensation Committee has the authority under its charter to retain, approve fees for and terminate advisors, consultants and agents as it deems necessary to assist in the fulfillment of its responsibilities.
 
 
10

 
 
Governance and Nominating Committee
 
The role of the Governance and Nominating Committee is to: (i) develop and recommend to the Board a set of corporate governance guidelines applicable to the Company, (ii) review at least annually the Company’s corporate governance guidelines and make any recommended changes, additions or modifications, (iii) determine the criteria for nominating new directors, identify individuals qualified to become Board members and evaluate and recommend for the Board’s selection nominees to fill positions on the Board, including any vacancies occurring between annual shareholder meetings, (iv) ensure that succession planning takes place for the position of Chief Executive Officer and other senior management positions the Committee finds advisable, (v) assist the Board by making recommendations regarding compensation programs for directors and (vi) lead the Board in its annual review of the Board’s performance. The Amended and Restated Charter of the Governance and Nominating Committee is available on our website as described under “Committees of the Board of Directors.” Our Governance Guidelines are also available on our website at www.crosscountryhealthcare.com by choosing the “Investor Relations” link, clicking on the “Governance Documents” section and selecting the guidelines under “View.” The Governance and Nominating Committee consists of Messrs. Dircks and Trunfio. Both Messrs. Dircks and Trunfio are independent directors under Rule 5605(a) (2) of the Nasdaq Listing Rules. Mr. Dircks is the Chairman of the Governance and Nominating Committee.
 
The Board’s current policy with regard to the consideration of director candidates recommended by stockholders is that the Governance and Nominating Committee will review and consider any director candidates who have been recommended by stockholders in compliance with the procedures established from time to time by the Board (the current procedures are described below), and conduct inquiries as it deems appropriate. The Governance and Nominating Committee will consider for nomination any such proposed director candidate who is deemed qualified by the Governance and Nominating Committee in light of the minimum qualifications and other criteria for Board membership approved by the Board from time to time. To date, we have not received any recommendation from stockholders requesting that the Governance and Nominating Committee consider a candidate for inclusion among the Governance and Nominating Committee’s slate of nominees in our Proxy Statement.
 
Certain identification and disclosure rules apply to director candidate proposals submitted to the Governance and Nominating Committee by any single stockholder or group of stockholders that has beneficially owned more than five percent of Common Stock for at least one year, referred to as a Qualified Stockholder Proposal. If the Governance and Nominating Committee receives a Qualified Stockholder Proposal with the necessary notice, information and consent provisions as referenced above, the proxy statement to which the Qualified Stock Proposal referred will disclose the name of the proposed candidate and the stockholder (or stockholder group) who recommended the candidate and will also disclose whether or not the Governance and Nominating Committee chose to nominate the proposed candidate. However, no such disclosure will be made without the written consent of both the stockholder (or stockholder group) and the proposed candidate to be so identified. The procedures described in this paragraph are not meant to replace or limit stockholders’ general nomination rights in any way.
 
In considering director nominees, the Nominating Committee will consider the following:
 
 
the needs of the Company with respect to particular areas of specialized knowledge;
 
 
the relevant business experience of the nominee including any experience in healthcare, business, finance, accounting, administration or public service;
 
 
the personal and professional integrity of the nominee;
 
 
the nominee’s ability to commit the resources necessary to be an effective director of a public company, including the nominee’s ability to attend meetings; and
 
 
the overall balance of the Board.
 
Other than the foregoing, there are no stated minimum criteria for nominees, although the Governance and Nominating Committee may also consider other facts as it may deem are in the best interests of the Company and its stockholders.
 
 
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All stockholder recommendations for director candidates must be submitted to our legal department at 6551 Park of Commerce Blvd., Boca Raton, Florida, 33487, who will forward all recommendations to the Governance and Nominating Committee. All stockholder recommendations for director candidates must be submitted to us not less than 120 calendar days prior to the first anniversary of the date of our proxy statement released to stockholders in connection with the previous year’s Annual Meeting. All stockholder recommendations for director candidates must include the following information:
 
 
The name and address of record of the stockholder;
 
 
A representation that the stockholder is a record holder of our securities or, if the stockholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b) (2) of the Exchange Act;
 
 
The name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the preceding five full fiscal years of the proposed director candidate;
 
 
A description of the qualifications and background of the proposed director candidate that addresses the minimum qualifications and other criteria for Board membership approved by the Board from time to time;
 
 
A description of all arrangements or understandings between any stockholder and the proposed director candidate;
 
 
The consent of the proposed director candidate (i) to be named in the proxy statement relating to our Annual Meeting of Stockholders and (ii) to serve as a director if elected at such Annual Meeting; and
 
 
Any other information regarding the proposed director candidate that is required to be included in a proxy statement filed pursuant to the rules of the Commission.
 
There have been no changes to the procedures by which stockholders may recommend nominees to our Board of Directors since our last disclosure of such procedures, which appeared in the definitive proxy statement for our 2012 Annual Meeting of Stockholders.
 
Except where we are legally required by contract or otherwise to provide third parties with the ability to nominate directors, the Governance and Nominating Committee is responsible for identifying and evaluating individuals qualified to become Board members, including nominees recommended by stockholders, and recommending to the Board the persons to be nominated by the Board for election as directors at the Annual Meeting of stockholders and the persons to be elected by the Board to fill any vacancies on the Board. Director nominees are selected by the Governance and Nominating Committee in accordance with the policies and principles in its charter and the criteria set forth above. There are no differences in the manner in which the Governance and Nominating Committee evaluates director nominees recommended by stockholders and a candidate that has been initially recommended by the Governance and Nominating Committee. The Nominating Committee has the authority to retain a search firm to identify or evaluate or assist in identifying and evaluating potential nominees.
 
During 2012, there were 2 meetings of the Governance and Nominating Committee.
 
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
 
The members of the Compensation Committee are Messrs. Cash and Dircks. During 2012:
 
 
none of the members of the Compensation Committee was an officer (or former officer) or employee of the Company or any of its subsidiaries;
 
 
none of the members of the Compensation Committee had a direct or indirect material interest in any transaction in which the Company was a participant and the amount involved exceeded $120,000, except that W. Larry Cash is the Executive Vice President and Chief Financial Officer of Community Health Systems and, during our fiscal year ended December 31, 2012, we provided healthcare staffing services to Community Health Systems resulting in revenues to us of $840,918;
 
 
none of our executive officers served on the Compensation Committee (or another Board committee with similar functions or, if there was no such committee, the entire Board of Directors) of another entity where one of that entity’s executive officers served on our Compensation Committee;
 
 
none of our executive officers was a director of another entity where one of that entity’s executive officers served on the our Compensation Committee; and
 
 
none of our executive officers served on the Compensation Committee (or another Board committee with similar functions or, if there was no such committee, the entire Board of Directors) of another entity where one of that entity’s executive officers served as a director on our Board.
 
 
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Director Compensation and Other Arrangements
 
Messrs. Cash, Dircks, Mastaler and Trunfio and Ms. Fitzgerald each received cash compensation in the amount of $2,000 per “in-person” board meeting attended and $1,000 per telephonic board meeting attended in 2012. In addition, Messrs. Cash, Dircks, Mastaler and Trunfio and Ms. Fitzgerald each received an annual retainer of $30,000. Mr. Cash received additional cash compensation of $15,000 during 2012 for serving as Audit Committee Chair. Messrs. Cash, Dircks and Trunfio and Ms. Fitzgerald also each received $1,500 per meeting of the Audit, Compensation and Governance and Nominating Committees attended.
 
In 2013, Messrs. Cash, Dircks, Mastaler and Trunfio and Ms. Fitzgerald will each receive cash compensation in the amount of $2,000 per “in-person” board meeting attended and $1,000 per telephonic board meeting attended. In addition, Messrs. Cash, Dircks, Mastaler and Trunfio and Ms. Fitzgerald will each receive an annual retainer of $30,000 (to be paid in equal quarterly installments). Mr. Cash will receive additional annual cash compensation of $15,000 during 2013 for serving as Audit Committee Chair (paid in equal quarterly installments). Messrs. Cash, Dircks and Trunfio and Ms. Fitzgerald will each receive $1,500 per meeting of the Audit, Compensation and Governance and Nominating Committees attended in 2013. Mr. Dircks’ fees are paid to Charterhouse.
 
All directors are also reimbursed for the expenses they incur in attending meetings of the Board or Board committees.
 
In accordance with the 2007 Stock Incentive Plan, Messrs. Cash, Dircks, Mastaler and Trunfio and Ms. Fitzgerald are each eligible to receive a grant of restricted shares of Common Stock as of the first day of the month following our Annual Meeting. Each such grant consists of a number of shares of restricted Common Stock equal to approximately $55,000, based on the closing price of our Common Stock on the date of grant.
 
2012 DIRECTOR COMPENSATION TABLE
 
The following table provides compensation information for our directors in 2012, except for Messrs. Boshart and Hensel. Compensation received by Messrs. Boshart and Hensel is included in the Summary Compensation Table.
 
Name
 
Fees Earned
or Paid
in Cash
($)
   
Stock
Awards
($)
(1)
   
Option
Awards
($)
(1)
   
Non-Equity
Incentive Plan
Compensation
($)
   
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
   
All Other
Compensation
($)
   
Total
($)
 
W. Larry Cash
    71,000       55,000                               126,000  
Thomas C. Dircks
    49,000       55,000                                       104,000  
Gale Fitzgerald
    52,000       55,000                               107,000  
Richard M. Mastaler
    47,000       55,000                               102,000  
Joseph Trunfio
    55,000       55,000                               110,000  
_______________
(1)
The grant date fair value of the stock awards granted in 2012 to each Director was approximately $55,000. The aggregate shares underlying option awards that were outstanding as of December 31, 2012 were: W. Larry Cash- 18,000 (all of which are exercisable within 60 days of March 5, 2013), Thomas C. Dircks – 0, Gale Fitzgerald - 0, and Richard M. Mastaler - 0, and Joseph Trunfio -16,000 (all of which are exercisable within 60 days of March 5, 2013).
 
 
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EXECUTIVE OFFICERS
 
The following table sets forth certain information with respect to our executive officers other than Messrs. Boshart, Grubbs and Hensel whose information is provided as part of Proposal I:
 
Name
 
Age
 
Position
         
Vickie Anenberg
 
48
 
President, Cross Country Staffing
Susan E. Ball, RN
 
49
 
General Counsel and Secretary
James Ginter
 
64
 
President, Medical Doctor Associates
Victor Kalafa
 
59
 
Vice President, Corporate Development and Strategy
Jonathan Ward
 
47
 
Chief Marketing and Strategy Officer
 
Vickie Anenberg has served as President of Cross Country Staffing since May 8, 2012. From January 2006 to May 8, 2012, she served as Executive Vice President of Cross Country Staffing. Ms. Anenberg had also served as President of Cross Country Staffing from August 2002 to December 2005. Prior to that, she served as Vice President of the Nursing Division since 1995. Prior to joining Cross Country Staffing in 1990, she worked at Proctor & Gamble since 1986.
 
Susan E. Ball, RN has served as General Counsel since May 2004 and Secretary since March 2010. Prior to that, Ms. Ball served as our Corporate Counsel from March 2002 to May 2004. Ms. Ball has also served as a Director of Jamestown Indemnity, Ltd. since September 2008. Before joining us, Ms. Ball practiced law at Gunster, Yoakley & Stewart, P.A. from November 1998 to March 2002 and at Skadden, Arps, Slate, Meagher and Flom from 1996 to November 1998. Prior to practicing law, Ms. Ball was a registered nurse. Ms. Ball received her B.S. degree in Nursing from The Ohio State University and her Juris Doctor degree from New York Law School.
 
James Ginter joined Medical Doctor Associates shortly after it was founded in 1987 and has served as President since 1993. Mr. Ginter holds a B.S. Degree in Education from Bowling Green State University.
 
Victor Kalafa has served as Vice President of Corporate Development and Strategy since November 2002 and Vice President of Corporate Development since April 2001 and as an executive officer since February 2002. Mr. Kalafa also served as President of MedStaff, Inc. from October 2003 through October 2010. Mr. Kalafa holds a B.A. degree in History from Lafayette College and an M.B.A. from Columbia University.
 
Jonathan W. Ward has served as Chief Marketing and Strategy Officer of Cross Country Healthcare, Inc. since May 8, 2012. Prior to that, Mr. Ward served as President of Cross Country Staffing from January 2006 to May 2012. Mr. Ward served as Executive Vice President of Cross Country Staffing from August 2002 to December 2005, and Chief Marketing and Strategy Officer of Cross Country Healthcare, Inc. from 1999 to August 2002. Mr. Ward has been an executive officer since February 2002. He served as Vice President of Marketing at our predecessor since 1995 and Director of Marketing and Business Development since 1993. Mr. Ward holds a B.A. in Political Science from Drew University and an M.B.A. from Rutgers University Graduate School of Management.
 
 
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COMPENSATION DISCUSSION AND ANALYSIS
 
This Compensation Discussion and Analysis describes the compensation philosophy, principles, objectives, policies and practices with respect to our NEOs. Our NEOs for fiscal 2012 are Joseph A. Boshart, President and Chief Executive Officer, Emil Hensel, Chief Financial Officer, Vickie Anenberg, who in fiscal 2012 served as Executive Vice President of Cross Country Staffing from January 1, 2012 through May 13, 2012 and as President of Cross Country Staffing from May 14, 2012 through December 31, 2012, Susan E. Ball, General Counsel, and Jonathan W. Ward, who in fiscal 2012 served as President of Cross Country Staffing from January 1, 2012 through May 13, 2012 and as Chief Marketing and Strategy Officer from May 14, 2012 through December 31, 2012.
 
Executive Compensation Program Design and Oversight
 
The Compensation Committee, or the Committee, provides oversight of our executive compensation programs. The various programs and plans covering executive officers are reviewed and administered by the Committee. A detailed discussion of the Committee’s structure, roles and responsibilities and related matters can be found under the heading “Compensation Committee” above and in the Committee’s Charter on our website at www.crosscountryhealthcare.com by choosing the “Investor Relations” link, clicking on the “Corporate Governance” section and selecting the charter under “View.”
 
The purpose of our executive compensation programs is to (1) attract and retain executives, (2) reward the success of our executives in attaining key operating objectives, such as revenue growth, growth of operating earnings, earnings per diluted share, or EPS, or growth of market share, and ultimately, (3) align our executives interests with our stockholders to attain an increased market price for our stock. The performance of our executives, considered in light of general economic and specific company, industry and competitive conditions, serves as the primary basis for determining their overall compensation. It is also the Committee’s intention to set total executive compensation sufficiently high to attract and retain strong, motivated leadership who will not only strive to reach our key operating and strategic objectives, but also demonstrate the utmost integrity in doing so. The Committee uses a mix of compensation vehicles to generate a compensation program for our executives that rewards our short-term and long-term goals, thereby aligning the incentives of our executives with our stockholders
 
Philosophy and Executive Compensation Principles
 
With our diverse operations, we must attract and retain executive talent that has the competencies and skills to operate successfully on a multitude of levels. The compensation program is designed to incentivize executives to achieve our overall strategic and financial objectives by rewarding executives who meet certain targets and demonstrate their ability to lead through operational excellence. The Committee believes that these attributes lead to long-term stockholder value creation. While the Committee strives for consistency in creating compensation programs to attain these goals, sufficient flexibility is maintained to ensure that the overall philosophical intent of the program is met. The Committee’s executive compensation principles are to:
 
 
provide competitive compensation programs to attract and retain executive talent with high ethical standards and the capability to lead;
 
 
use cash incentives to reward executives for achieving our short-term operating goals;
 
 
use equity-based incentive plans to tie a portion of compensation to our long-term results and align the executives’ financial interests with those of the stockholders;
 
 
ensure that compensation in the aggregate is commensurate with our results;
 
 
provide a tool for focusing and directing the energies of key executives toward achieving individual and corporate objectives;
 
 
ensure that the total executive compensation program is affordable, including its impact on earnings; and
 
 
be transparent so that both executives and stockholders understand the executive compensation program and the objectives it seeks to achieve.
 
 
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These principles are implemented using various elements that offer the flexibility to adapt the compensation program, from time to time, in response to changing needs of the business. For 2012, the Committee used the following elements, the specific rationale and design of which are outlined in more detail below:
 
 
Base salary
 
 
Cash incentives
 
 
Equity incentives, consisting of restricted stock awards and stock appreciation rights
 
NEOs also participated in our employee benefit plans generally available to all of our employees.
 
NEO Compensation Policies
 
Market positioning. Generally, our policy has been to pay our NEOs base salaries below the 50th percentile of our peer group, but to offer them incentives to offset this. As a result of the structure of our program and the unfavorable business conditions in the recent past years, our overall compensation program has been below the median of our peer group. Incentive payouts, at a reduced level, begin upon achievement of a predetermined percentage of targeted objectives (generally 80% or higher) which can vary from year to year and from one performance metric to another, so that there is not a disincentive to the NEOs. We believe that an “all or nothing” approach could provide a disincentive compared to our tiered payout approach that is better aligned with our overall operating objectives. In determining competitive compensation levels for the NEOs, the Committee takes into account their responsibilities, past performance, external market practices and the economy.
 
Peer Group. For fiscal 2012, the Committee identified the following peer group of companies, the 2012 Peer Group: AMN Healthcare Services, Inc., On Assignment, Inc., KForce, Inc., IPC The Hospitalist Company, Inc., MedAssets, Inc., LHC Group, Alliance Healthcare Services, Inc., Corvel Corporation and US Physical Therapy, Inc. The 2012 Peer Group reflects changes from our 2011 Peer Group, which the Committee believed no longer reflected our market. Our 2012 Peer Group eliminated Amedisys, Inc., Gentiva Health Services, Inc., Healthways, Inc., and added IPC The Hospitalist Company, Inc., MedAssets, Inc., LHC Group, Inc., Alliance Healthcare Services, Inc., CorVel Corporation and US Physical Therapy, Inc.
 
The Committee believes that the 2012 Peer Group is appropriate as all nine members of the 2012 Peer Group have involvement in staffing and/or healthcare services and it expands beyond direct industry competitors to provide a meaningful sample size. The 2012 Peer Group ranges in size from $0.3 million to $1.2 million in revenue. Each 2012 Peer Group company is comparable to the Company in certain respects, however, factors such as revenue, business mix, as well as the way the companies structure their top=-management also affect executive compensation. The Committee looks at the practices of our Peer Group and uses their compensation levels as an indicator of the competitive market for our executives.
 
Other factors influencing compensation. When making NEO compensation decisions, the Committee takes many other factors into account, including the economy, the NEO’s performance, expected future contributions to the Company’s success, the financial and operational results of individual business units, our financial and operational results as a whole, the NEO’s historical compensation, any retention concerns and the CEO’s recommendations in the cases of NEOs other than the CEO. In looking at historical compensation, the Committee looks at the progression of salary increases over time, an NEO’s ability to meet targets in prior years, the value inherent in equity awards to be granted to complete the total compensation program for an NEO for a particular year, economic outlook and our stock performance. Historically, the Committee has disregarded whether the NEO has exercised options or sold shares so that these personal investment decisions do not skew the Committee’s understanding of the aggregate reward opportunity that has been provided. The Committee uses the same general factors in evaluating the CEO’s performance and compensation as it uses for the other NEOs.
 
Process. Our NEO compensation program is implemented yearly and it coincides with the completion of our annual financial statement audit and release of annual earnings, as well as the approval of the budget for the then current year. Annual cash incentives earned for the prior year, if any, are determined by the Committee and paid out at that time. Current year target objectives are also established at that time and any adjustments to base salaries are determined by the Committee either at that time or during the second quarter.
 
The CEO provides the Committee with his assessment of the CFO’s performance and the CEO delivers his perspective on the factors described above in developing his recommendation for the CFO’s compensation, including salary adjustments, cash incentives and equity grant guidelines for the then current year. The CEO also recommends the compensation structure for the other NEOs to the Committee for its review and approval. Upon receipt of this information, the Committee discusses proposed compensation plans for the CEO, CFO and other NEOs in detail, including how the compensation levels of the CEO and CFO compare to each other. Based on our Governance Guidelines, the Committee is required to annually approve the goals and objectives for compensating the CEO, evaluate the CEO’s performance in light of these goals before setting the CEO’s salary, bonus and other incentive and equity compensation and approve the compensation structure for the other NEOs.
 
 
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As discussed under “Employment Agreements,” we are a party to employment agreements with Mr. Boshart and Mr. Hensel. The salary and bonus given to Mr. Boshart are based on the Committee’s review of the compensation paid to chief executive officers of comparable healthcare staffing companies, an assessment of our revenue and earnings growth, as well as the Committee’s continued evaluation of Mr. Boshart’s leadership of the Company.
 
Pay Mix. The Committee adjusts the cash incentive portion of the NEOs’ compensation consistent with its philosophy to incentivize and reward executives to reach certain financial and strategic objectives and reward them based upon their performance. The Committee believes that maintaining the flexibility to make upward or downward adjustments to the various components of the NEOs compensation programs allows the Committee to appropriately provide incentives to individuals and further aligns the NEOs with the objectives of our stockholders.
 
Forms of Long-Term Incentive Compensation. At the end of December 2012, our long-term incentives consisted of stock options, stock appreciation rights and shares of restricted stock. The Compensation Committee intends that these equity grants incentivize executives to reach long-term goals through share price appreciation.
 
Components of the NEO Compensation Program
 
The Committee uses various compensation elements to provide an overall competitive total compensation and benefits package to the NEOs that is tied to creating stockholder value, is commensurate with our results and aligns with the business strategy. The Committee’s specific rationale, design, reward process and relating information are outlined below.
 
Base Salary
 
We provide the NEOs with a base salary to compensate them for services rendered during the fiscal year. Base salary ranges for NEOs are determined on the basis of each executive’s position, performance and level of responsibility. Salary levels are typically considered annually as part of the performance review process, as well as upon a promotion or other change in job responsibility. Base salaries for NEOs are benchmarked below the 50th percentile of the Peer Group. Our philosophy is that base salaries should meet the objective of compensating NEOs for their basic day-to day efforts. Historically, the value of long-term incentives granted has not been determined as a multiple of base salary. Therefore, an increase in base salary has not had any impact on the level of long-term incentive award levels.
 
In 2012, consistent with the Company’s temporary cost reduction initiatives in place for part of the year, no salary increases were recommended or approved for Messrs. Boshart and Hensel. Notwithstanding the general salary freeze, to reflect changes in responsibilities in connection with their position changes, the annual base salaries for Ms. Anenberg and Mr. Ward were increased to $325,000 and $308,948, respectively. Further, to more closely align her compensation with other similarly situated executives, Ms. Ball’s annual base compensation was increased to $279,000, which for 2012 was paid as a cash base salary at the annual rate of $270,000 and $9,000 in the form of restricted stock (See “Equity Awards” below).
 
Annual Cash Incentive Program
 
The annual cash incentive program is a core component of our “pay-for-results” philosophy. The program is heavily weighted to our financial results or relevant business units and the goals are closely linked to business strategy. The components of this program have historically included the incentive and reward opportunity (expressed as a percentage of base salary) and the performance measures determined by the Committee (such as revenue, contribution income, EBITDA (earnings before interest, tax and depreciation) or EPS). To ensure the integrity of the goals and minimize the risk of unanticipated outcomes, each goal has had a performance range built around it with a commensurate increase or decrease in the associated award opportunity. The Compensation Committee may adjust performance measures for certain extraordinary or unusual items at its sole discretion.
 
Historically, the Committee has established performance goals and the weighting of each goal during its first Committee meeting each year. The process for setting the goals begin with the management team establishing preliminary goals based on prior year’s results, strategic initiatives, industry performance and projected economic conditions. The Committee assesses the difficulty of the goals and their implications for share price appreciation, revenue growth and other related factors. The iterative process results in final goals presented by management to the Committee at its March meeting.
 
Incentives and Award Opportunities. Each annual target cash incentive award opportunity is expressed as a percentage of base salary, which may be earned based on both the achievement of certain financial objectives (the “Objective Bonus” component) and subjective considerations (the “Subjective Bonus” component).
 
If results fall below pre-established threshold levels, no cash award is payable under the Objective Bonus component, although a Subjective Bonus may still be paid at the discretion of the Committee. If results exceed pre-established outstanding goals, the cash award payable under the Objective Bonus component is capped at a maximum award opportunity. The Committee believes that having a maximum cap serves to promote good judgment by the NEOs, reduce the likelihood of windfalls and makes the maximum cost of the plan predictable. The award opportunity is established for each position with the desired emphasis on pay at risk (more pay at risk for more senior executives) and internal equity (comparably positioned executives should have comparable award opportunities).
 
 
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The Subjective Bonus opportunity is capped at a maximum amount, expressed as a percentage of base salary, which varies for each position. The use of subjective criteria requires the Committee to weigh a multitude of subjective factors relative to specific responsibilities. This process allows the Committee to evaluate performance and to recognize contributions in light of our changing needs as the nation’s economy and the healthcare staffing industry evolve.
 
Annual Incentives for Mr. Boshart and Mr. Hensel . For 2012, Mr. Boshart and Mr. Hensel, based on their positions as chief executive officer and chief financial officer, respectively, were awarded an Objective Bonus component with a target cash bonus of 65% of their base salaries tied to the achievement of meeting certain EBITDA, EPS and revenue targets, with a lower payout if the target was not achieved but exceeded a minimum threshold and a higher payout if it exceeded the target, and an amount determined by linear interpolation between target levels. 40% of the Objective Bonus opportunity was weighted toward the EBITDA target, 40% was weighted toward achieving the EPS target and 20% was weighted towards the revenue target. A range of results was established for each of these goals, from a threshold to a maximum cash award. Messrs. Boshart and Hensel were entitled to receive a range of 6.5% to 39% of their base salaries based on the EBITDA component, 6.5% to 39% of their base salaries based on the EPS component and 3.25% to 19.5% based on the revenue component
 
Although the payout threshold based on the Revenue component was achieved, both Mr. Boshart and Mr. Hensel elected to forego any payment and did not receive any portion of their Objective Bonus in any form. The payout thresholds for the EBITDA and EPS target portions of their Objective Bonuses in 2012 were not achieved.
 
Although the Committee also established a Subjective Bonus component for Mr. Boshart and Mr. Hensel with a target cash bonus of up to 30% of their annual base salaries, consistent with our historical practice with regard to their compensation, neither Mr. Boshart nor Mr. Hensel were awarded any Subjective Bonus for 2012.
 
The chart below sets forth the total annual bonus potential for Mr. Boshart and Mr. Hensel for 2012 based on the level of Objective Bonus component achievement.
 
Joseph A Boshart
 
EBITDA Target
($000s)
   
Objective Bonus Based on EBITDA
   
%
Base Salary
   
EPS
Target
   
Objective Bonus Based on EPS
   
%
Base Salary
   
Revenue Target
   
Objective Bonus Based on Revenue
   
% Base Salary
   
Maximum Subjective Bonus
   
Total Eligible Bonus
 
                                                                                     
<$ 21,250     $ 0       0.0 %   <$ 0.200     $ 0       0.0 %   <$ 507,000     $ 0       0.0 %   $ 157,034     $ 157,034  
$ 21,250     $ 34,024       6.5 %   $ 0.200     $ 34.024       6.5 %   $ 507,000     $ 17,012       3.25 %   $ 157,034     $ 242,094  
$ 29,750     $ 136,096       26.0 %   $ 0.315     $ 136,096       26.0 %   $ 540,000     $ 68,048       13.0 %   $ 157,034     $ 497,274  
≥$ 33,700     $ 204,144       39.0 %   ≥$ 0.370     $ 204,144       39.0 %   ≥$ 563,000     $ 102,072       19.5 %   $ 157,034     $ 667,394  
 
Emil Hensel
 
EBITDA Target
($000s)
   
Objective Bonus Based on EBITDA
   
%
Base Salary
   
EPS
Target
   
Objective Bonus Based on EPS
   
%
Base Salary
   
Revenue Target
   
Objective Bonus Based on Revenue
   
% Base Salary
   
Maximum Subjective Bonus
   
Total Eligible Bonus
 
                                                                                     
<$ 21,250     $ 0       0.0 %   <$ 0.200     $ 0       0.0 %   <$ 507,000     $ 0       0.0 %   $ 107,312     $ 107,312  
$ 21,250     $ 23,251       6.5 %   $ 0.200     $ 23,251       6.5 %   $ 507,000     $ 11,625       3.25 %   $ 107,312     $ 165.439  
$ 29,750     $ 93,004       26.0 %   $ 0.315     $ 93,004       26.0 %   $ 540,000     $ 46,502       13.0 %   $ 107,312     $ 339,822  
≥$ 33,700     $ 139,505       39.0 %   ≥$ 0.370     $ 139,505       39.0 %   ≥$ 563,000     $ 69,753       19.5 %   $ 107,312     $ 456,075  
 
For 2012, actual EBITDA was $7.8 million, actual EPS was $(0.19) (excluding impairment charges) and actual revenue was $510 million. Accordingly, only the revenue threshold portion of the Objective Bonus was achieved. However, both Mr. Boshart and Mr. Hensel elected to forego any payment and did not receive any portion of their Objective Bonus opportunity in any form.
 
Annual Incentives for Mr. Ward and Ms. Anenberg. For 2012, the Committee established an annual incentive opportunity for the position of President of Cross Country Staffing, with an Objective Bonus component based solely on the financial results of that business unit. The target amount based on the level of achievement of the Objective Bonus component was 50% of base salary and the position was eligible for a Subjective Bonus component which could not exceed 30% of base salary.
 
 
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60% of the Objective Bonus opportunity, with a range of 7.5% to 45% of base salary, was weighted toward the level of achievement of an Adjusted Contribution Income target and 40% with a range of 5% to 30% of base salary, was weighted toward the level of achievement of a revenue target. A range of results was established for each of these goals, from a threshold to a maximum cash award, with an amount determined by linear interpolation between target levels. Adjusted Contribution Income consisted of contribution income adjusted to reflect an imputed tax charge related to the cost of providing per diem allowances to traveling field employees.
 
Mr. Ward was eligible for this incentive opportunity during the period he held the position of President of Cross Country Staffing from January 1, 2012 through May 13, 2012 and Ms. Anenberg was eligible for it during the period that she held the position from May 14, 2012 through December 31, 2012. The positions of Chief Strategy and Marketing Officer and Executive Vice President of Cross Country Staffing were not eligible for a 2012 annual incentive opportunity. Accordingly, Mr. Ward and Ms. Anenberg were not eligible for a 2012 annual incentive opportunity for the period they did not hold the position of President of Cross Country Staffing.
 
The charts below set forth the total bonus potential for the position of President of Cross Country Staffing for 2012 that Mr. Ward and Ms. Anenberg would have been eligible to receive had they held the position for the full year:
 
Jonathan Ward
 
Adjusted Contribution Income Target
   
Objective Bonus Based on Adjusted Contribution Income
   
%
Base Salary
   
Revenue
Target
   
Objective Bonus Based on Revenue
   
% Base Salary
   
Maximum Subjective Bonus
   
Total Eligible Bonus
 
                                                             
<$ 21,300     $ 0       0.0 %   <$ 274,000     $ 0       0.0 %   $ 92,684     $ 92,684  
$ 21,300     $ 23,171       7.5 %   $ 274,000     $ 15,447       5.0 %   $ 92,684     $ 131,302  
$ 28,300     $ 92,685       30.0 %   $ 325,000     $ 61,790       20.0 %   $ 92,684     $ 247,159  
≥$ 33,900     $ 139,027       45.0 %   ≥$ 358,000     $ 92,684       30.0 %   $ 92,684     $ 324,395  
 
Vickie Anenberg
 
Adjusted Contribution Income Target
   
Objective Bonus Based on Adjusted Contribution Income
   
%
Base Salary
   
Revenue
Target
   
Objective Bonus Based on Revenue
   
% Base Salary
   
Maximum Subjective Bonus
   
Total Eligible Bonus
 
                                                             
<$ 21,300     $ 0       0.0 %   <$ 274,000     $ 0       0.0 %   $ 97,500     $ 97,500  
$ 21,300     $ 24,375       7.5 %   $ 274,000     $ 16,250       5.0 %   $ 97,500     $ 138,125  
$ 28,300     $ 97,500       30.0 %   $ 325,000     $ 65,000       20.0 %   $ 97,500     $ 260,000  
≥$ 33,900     $ 146,250       45.0 %   ≥$ 358,000     $ 97,500       30.0 %   $ 97,500     $ 341,250  
 
For 2012, Cross Country Staffing’s actual Adjusted Contribution Income was $11.8 million, and its actual revenue was $277.8 million. Accordingly, none of the payout thresholds for any portion of the Objective Bonuses were achieved and neither Mr. Ward nor Ms. Anenberg received any portion of their Objective Bonus opportunity.
 
Annual Incentive for Susan E. Ball. Like the 2012 annual incentive opportunities for our CEO and CFO, the Objective Bonus component of Ms. Ball’s annual incentive plan, based on her position as our general counsel, was based upon our level of achievement of EBITDA, EPS and revenue targets established by the Committee for 2012. The remaining portion of her annual incentive plan for 2012 was a Subjective Bonus opportunity which could not exceed 30% of her base salary.
 
For 2012, the Objective Bonus portion of her incentive opportunity had a target cash bonus of 45% of her base annual compensation. 40% of the Objective Bonus opportunity was weighted toward the EBITDA target, 40% was weighted toward achieving the EPS target and 20% was weighted towards the revenue target. A range of results was established for each of these goals, from a threshold to a maximum cash award. In 2012, Ms. Ball was entitled to receive a range of 4.5% to 27% of her base compensation based on the EBITDA component, 4.5% to 27% of her base compensation based on the EPS component and 2.25 to13.5% on the revenue component, and an amount determined by linear interpolation between target levels.
 
 
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The chart below sets forth the total bonus potential for Ms. Ball for 2012 based on the level of her Objective Bonus component achievement:
 
Susan E. Ball
 
EBITDA Target (2012) ($000s)
   
Objective Bonus Based on EBITDA (2012)
   
%
Base Salary
   
EPS
Target (2012)
   
Objective Bonus Based on EPS (2012)
   
%
Base Salary
   
Revenue Target
(2012)
   
Objective Bonus Based on Revenue (2012)
   
% Base Salary
   
Maximum Subjective Bonus (2012)
   
Total Eligible Bonus (2012)
 
                                                                                     
<$ 21,250     $ 0       0.0 %   <$ 0.200     $ 0       0.0 %   <$ 507,000     $ 0       0.0 %   $ 81,000     $ 81,000  
$ 21,250     $ 12,150       4.5 %   $ 0.200     $ 12,150       4.5 %   $ 507,000     $ 6,075       2.25 %   $ 81,000     $ 111,375  
$ 29,750     $ 48,600       18.0 %   $ 0.315     $ 48,600       18.0 %   $ 540,000     $ 24,300       9.0 %   $ 81,000     $ 202,500  
≥$ 33,700     $ 72,900       27.0 %   ≥$ 0.3700     $ 72,900       27.0 %   ≥$ 563,000     $ 36,450       13.5 %   $ 81,000     $ 263,250  
 
For 2012, actual EBITDA was $7.8 million, actual EPS was $(0.19) (excluding impairment charges) and actual revenue was $510 million. Accordingly, only the revenue threshold portion of the Objective Bonus was achieved. However, Ms. Ball elected to forego any payment and did not receive any portion of her Objective Bonus opportunity in any form.
 
In addition to the cash incentive plan described above, Ms. Ball is also eligible to receive bonuses related to work performed on each acquisition, divestiture and/or financing completed by us in 2012. Ms. Ball is responsible for conducting legal due diligence and negotiations for these transactions, as well as documenting and closing these transactions. Any such bonus is based on the size and complexity of the deal. We did not complete any such transactions in 2012 and, accordingly, Ms. Ball did not receive any cash bonus for this work in 2012.
 
Although the Committee established a Subjective Bonus component for the positions of President of Cross Country Staffing and General counsel, no Subjective Bonuses were awarded to Mr. Ward, Ms. Anenberg or Ms. Ball for 2012 due to our temporary cost reduction initiative in place for part of the year.
 
Equity Awards
 
The Committee uses equity based awards from time to time to focus executives on long-term performance and to align executives’ financial interests with those of shareholders. In 2012, equity awards were also used in part as a retention tool. During the past five years, the Committee has granted senior executives stock options, stock appreciation rights and/or restricted stock awards which vest over time. For 2012, equity awards were granted under our 2007 Stock Incentive Plan (referred to as the Plan).
 
Equity-based awards for NEOs are generally made based on the executive’s position, experience and performance, prior equity-based compensation awards and competitive equity-based compensation levels. Further, the Committee determines the terms and conditions of equity grants taking into account market practices and the objectives of the compensation program. Retaining key talent is a key factor for the Committee in considering the level of equity awards and the vesting schedule.
 
Equity awards are typically approved by the Committee at its regularly scheduled meeting in May of each fiscal year (immediately following the Annual Meeting of Stockholders). The grant date of such awards is the first day of the first month immediately following the Annual Meeting. The Committee may make grants at other times during the year as it deems appropriate. All equity awards must be approved by the Committee. Our current practice is to set the exercise price at the closing price on the date of grant.
 
At the Committee’s May 2012 meeting, the Committee granted the following equity awards to the NEOs with a grant date of June 1, 2012 to supplement their compensation for retention purposes. For 2012, Ms. Ball’s equity grant included an additional grant of $9,000 in the form of restricted stock as part of her annual compensation.
 
 
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Name
Number of Stock Appreciation Rights
Number of Restricted Shares of Common Stock
Joseph A. Boshart
40,000
40,000
Emil Hensel
30,000
30,000
Vickie Anenberg
30,000
30,000
Jonathan Ward
30,000
30,000
Susan E. Ball
25,000
27,000
 
The stock appreciation rights were issued with an exercise price of $4.35, which was the closing price of our Common Stock on the grant date. Stock appreciation rights and restricted shares granted in 2012 vest 25% per year over four years. Any unexercised stock appreciation rights will expire in seven years (or earlier in the case of termination of employment).
 
Deferred Compensation Plan
 
We maintain the Deferred Compensation Plan, an unfunded non-qualified deferred compensation arrangement, intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, or the Code. Designated executives, including our NEOs, may elect to defer the receipt of a portion of their annual base salary, bonus and commission to our Deferred Compensation Plan. We may also make a discretionary contribution to the Deferred Compensation Plan on behalf of certain participants, which generally become vested after three years from the date such contribution is made to the plan, upon the occurrence of a change in control or upon a participant’s retirement, death during employment or disability. Generally, payments under the Deferred Compensation Plan automatically commence upon a participant’s retirement, termination of employment or death during employment. Under certain limited circumstances described in the Deferred Compensation Plan, participants may receive distributions during employment. To enable us to meet our financial commitment under the Deferred Compensation Plan, assets may be set aside in a corporate-owned vehicle, which assets remain available to all our general creditors in the event of our insolvency. Participants of the Deferred Compensation Plan are our unsecured general creditors with respect to the Deferred Compensation Plan benefits. Currently, none of our NEOs have any amounts deferred under the Deferred Compensation Plan.
 
401(k) Plan
 
We maintain a 401(k) plan. The plan permits eligible employees to make voluntary, pre-tax contributions to the plan up to a specified percentage of compensation, subject to applicable tax limitations. We may make a discretionary matching contribution to the plan equal to a pre-determined percentage of an employee’s voluntary, pre-tax contributions and may make an additional discretionary profit sharing contribution to the plan, subject to applicable tax limitations. Eligible employees who elect to participate in the plan are generally vested in any matching contribution after three years of service with us and fully vested at all times in their employee contributions to the plan. The plan is intended to be tax-qualified under Section 401(a) of the Code, so that contributions to the plan and income earned on plan contributions are not taxable to employees until withdrawn from the plan, and so that our contributions, if any, will be deductible by us when made. Our 401(k) matching contribution has a matching contribution rate equal to 25% of the first 6% of compensation contributed to the plan by eligible participants during each payroll period.
 
Other Benefits
 
Executives participate in the health and dental coverage, company-paid term life insurance, disability insurance, paid time off and paid holidays programs applicable to other employees in their locality. These benefits are designed to be competitive with overall market practices and are in place to attract and retain the necessary talent in the business. In 2012, Ms. Ball received a one-time lump sum service award of $200 in recognition of her 10 years of service to the Company.
 
 
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Employment Agreements
 
We are party to employment agreements with each of Joseph A. Boshart and Emil Hensel, pursuant to which Mr. Boshart serves as our President and CEO and Mr. Hensel serves as our CFO. The initial term of each agreement expired on July 29, 2002. Upon expiration of such initial term, each agreement automatically renewed for a one-year term, and will continue to renew for successive one-year terms unless prior to the end of such renewal term either party has given at least 90 days prior written notice of its intention not to renew the agreement. Mr. Boshart’s agreement will expire on July 29, 2013. Messrs. Boshart and Hensel currently receive annual base salaries of $523,446 and $357,706, respectively. These salaries are subject to an annual review by the Compensation Committee of the Board of Directors, and each of Messrs. Boshart and Hensel is eligible to receive an annual bonus. Messrs. Boshart and Hensel are eligible to participate in all benefit plans and fringe benefit arrangements available to our senior executives. If either executive’s employment is terminated without cause, the executive will be entitled to the greater of (x) base salary, for the balance of the renewal term, certain other benefits provided in the agreement and bonus for the fiscal year in which termination occurs or (y) one year’s base salary in effect as of the date of termination. Each of Messrs. Boshart and Hensel is subject to a two-year post-termination noncompetition covenant. However, if either executive’s employment is terminated without cause, then the noncompetition agreement will be effective only if we continue to pay the executive’s base salary, bonus and other benefits provided in the agreement for the term of the noncompetition covenant. We are permitted to terminate the noncompetition covenant, and related payments, upon 30 days’ prior written notice.
 
On March 20, 2013, we entered into an employment agreement with William J. Grubbs pursuant to which, on April 1, 2013, Mr. Grubbs will initially become our President and Chief Operating Officer. On or before July 31, 2013, Mr. Grubbs will become Chief Executive Officer, replacing Mr. Boshart in such position. The initial term for the agreement expires on March 31, 2016, subject to automatic renewal for successive one-year terms unless prior to the end of any renewal term either party has given at least 90 days prior written notice of the intention not to renew the agreement. The agreement provides for an annual base salary of $500,000 increasing to $550,000 on the date Mr. Grubbs becomes Chief Executive Officer. The salary is subject to annual review by the Committee and Mr. Grubbs is eligible to receive an annual bonus of up to 100% of his base salary based on the level of achievement of performance goals to be established by the Committee. Mr. Grubbs is eligible to participate in all benefit plans and fringe benefit arrangements available to our senior executives. If Mr. Grubbs’ employment is terminated by us without cause or Mr. Grubbs terminates his employment for good reason (as defined in the Agreement), he will be entitled to a severance payment equal to one year’s base salary plus a pro rata portion of the bonus, if any, earned with respect to the year in which such termination occurred. Effective with the commencement of Mr. Grubbs employment, the Committee will grant Mr. Grubbs restricted shares with a value of $250,000 as well as $50,000 stock appreciation rights.
 
Severance/Change of Control Arrangements
 
We maintain an Executive Severance Policy, or the Severance Policy pursuant to which, subject to executing a release, each NEO is entitled to severance payments and benefits if within 90 days prior to, or within 18 months after, a “Change of Control” (as defined in the Severance Policy) of the Company, such NEO was terminated without cause or incurred an “involuntary termination” (i.e. a resignation for good reason). Under the Severance Policy, the NEOs are entitled to receive continued base salary for a period of two years following termination, plus two times the amount of the NEO’s target bonus for the year in which a Change of Control occurs. In addition, during such periods, we would continue to make group health, life or other similar insurance plans available to such NEO and his or her dependents, and we would pay for such coverage to the extent we paid for such coverage prior to the termination of employment. The severance benefits payable under the Severance Policy are subject to: (1) the six-month delay under Section 409A of the Code; (2) the execution and non-revocation of a general release of claims in favor of the Company within a specified time period; and (3) reduction to avoid any excise tax on “parachute payments” if the NEO would benefit from such reduction as compared to paying the excise tax.
 
In addition, under our general severance pay policy for all of our eligible employees, if an NEO (other than Messrs. Boshart, Hensel and Grubbs, whose arrangements are included in their respective employment agreements) is terminated without cause (as defined in our general severance pay policy) other than in connection with a Change of Control, the NEO, subject to executing a release, would be entitled to one week’s base salary for each full year of continuous service with us.
 
10b5-1 Plans
 
The Committee believes that executives should be able to plan for their own financial security, including diversifying their investment portfolio. Therefore, the Committee has approved using 10b5-1 plans to facilitate the planned exercise of options and the sale of shares. These plans facilitate sales of the executives’ shares through a broker without the executive’s direct involvement in such sales, subject to minimum price thresholds, such that such sales are not subject to the executive’s access to material non-public information. Currently, none of our NEOs maintain a 10b5-1 plan.
 
 
22

 
 
Perquisites
 
Our executives are not entitled to any perquisites that are not otherwise available to all of our employees. In this regard, it should be noted that we do not provide pension arrangements, post-retirement health coverage or similar benefits for our executives or employees.
 
Disclosure on the 2012 Say-On-Pay and Say-On-Frequency Voting Results
 
Stockholders Non-Binding Voting Results of Say-On-Pay
 
We reviewed and considered the results of stockholders voting on the most recent say-on-pay vote in determining compensation policies and decisions and how that consideration affected our executive compensation decisions and policies. 80.8% of stockholders represented at the 2012 Annual Meeting of Stockholders in person or by proxy entitled to vote, affirmatively voted to adopt the Non-Binding Advisory Vote to Approve Compensation of our NEOs as included in Proposal III of our 2012 proxy statement.
 
Risk Mitigation
 
Our Board has reviewed and considered whether our compensation programs and policies create risks that are reasonably likely to have a material adverse effect on us. In that regard, we design our programs in a balanced and diversified manner while also creating significant, yet appropriate, incentives for strong performance based on our business and strategic plan. In most cases, each component of our performance-based compensation program is subject to a limit on the amount paid. We believe that our compensation programs reflect a balance of short-term, long-term, guaranteed and performance based compensation in order not to encourage excessive risk-taking. A significant portion of our compensation program includes performance-based compensation. We believe that this ensures that our NEOs and other employees focus on the health of our business and that will deliver stockholder value over time and discourages excess risk-taking by our NEOs and other employees.
 
Impact of Accounting and Tax Matters
 
As a general matter, the Committee reviews and considers the various tax and accounting implications of compensation vehicles that we utilize. With respect to accounting matters, the Committee examines the accounting cost associated with equity compensation in light of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718.
 
With respect to tax matters, the Committee considers the impact of Section 162(m) of the Code, which generally prohibits any publicly-held corporation from taking a Federal income tax deduction for compensation paid in excess of $1 million in any taxable year to the chief executive officer and any other executive officer (other than the chief financial officer) employed on the last day of the taxable year whose compensation is required to be disclosed to stockholders under SEC rules. Exceptions include qualified performance-based compensation, among other things. It is the Committee’s policy to maximize the effectiveness of our executive compensation plans in this regard. Nonetheless, the Committee retains the discretion to grant awards (such as restricted stock with time-based vesting) that will not comply with the performance-based exception of 162(m) if it is deemed in the best interest of the Company to do so.
 
COMPENSATION COMMITTEE REPORT
 
The Compensation Committee of the company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Proxy Statement.
 
THE COMPENSATION COMMITTEE
 
W. Larry Cash
Thomas C. Dircks
 
 
23

 
 
SUMMARY COMPENSATION TABLE
 
Name and Principal Position
 
Year
 
Salary
($) (a)
   
Bonus ($)
   
Stock Awards ($)(b)
   
Option Awards ($)(c)
   
Non-Equity Incentive Plan Compensation ($)
   
Change in Pension
Value and Nonqualified Deferred Compensation Earnings ($)
   
All Other Compensation ($)(d)
   
Total ($)
 
                                                                   
Joseph A. Boshart,
 
2012
    513,379             174,000       67,712                   3,125       758,216  
President and Chief
 
2011
    514,064             223,200       78,978       149,267             3,063       968,572  
Executive Officer
 
2010
    508,200             242,700       83,025                         833,925  
                                                                     
Emil Hensel,
 
2012
    350,827               130,500       50,784                   3,125       535,236  
Chief Financial
 
2011
    351,295             186,000       65,815       102,004             3,563       708,677  
Officer
 
2010
    347,287             202,250       69,188                         618,725  
                                                                     
Vickie Anenberg,
 
2012
    269,816               130,500       50,784                     3,125       454,225  
President of Cross
 
2011
    233,818             133,920       47,387       140,367             2,923       558,415  
Country Staffing (e)
 
2010
    227,115             121,350       41,537                   500       390,002  
                                                                     
Susan E. Ball,
 
2012
    256,822               117,450       42,320                   3,325       419,917  
General Counsel
 
2011
    233,665             111,600       39,489       46,972             2,921       434,647  
   
2010
    231,000             145,620       41,513                         418,133  
                                                                     
Jonathan W. Ward,
 
2012
    299,477               130,500       50,784                         480,761  
Chief Marketing and
 
2011
    297,258             148,800       52,652       142,601             840       642,151  
Strategy Officer (f)  
2010
    291,200             137,530       47,048                         475,778  
____________
(a)
The 2012 reported salary excludes the following amounts for furlough days taken by the NEOs in 2012: Anenberg -- $7,500; Ball -- $2,077; Boshart -- $10,066; Hensel -- $6,879 and Ward -- $5,914.
 
(b)
Amounts in this column reflect the aggregate grant date fair value of awards of restricted stock granted under our 2007 Stock Incentive Plan and computed in accordance with FASB Topic 718. The aggregate grant date fair value per share of restricted stock granted on June 1, 2012, June 1, 2011 and June 1, 2010 was $4.35, $7.44 and $8.09, respectively.
 
(c)
Amounts in this column for all grants to the NEOs included in the table and for all periods reflect the aggregate grant date fair value of Option Awards consisting of stock appreciation rights to be settled in stock, granted under the 2007 Stock Incentive Plan and computed in accordance with FASB ASC 718. The aggregate grant date fair value per share of stock appreciation rights granted on June 1, 2012, June 1, 2011 and June 1, 2010 was $1.69, $2.63 and $2.77, respectively. The assumptions used in determining the grant date fair values of these restricted stock awards are set forth in note 14 to our consolidated financial statements included in our 2012 Form 10-K.
 
(d)
Amounts consist of employer matching contributions to the 401(k) plan. See the discussion of our matching contributions under “401(k) Plan” above in the Compensation and Discussion Analysis. In addition, it includes a $500 service award for Ms. Anenberg in 2010, a $200 service award for Ms. Ball in 2012 and a $500 service award to Ms. Anenberg in 2012.
 
(e)
Ms. Anenberg served as Executive Vice President of Cross Country Staffing from January 1, 2012 through May 13, 2012 and as President of Cross Country Staffing from May 14, 2012 through December 31, 2012.
 
(f)
Mr. Ward served as President of Cross Country Staffing from January 1, 2012 through May 13, 2012 and as Chief Marketing and Strategy Officer from May 14, 2012 through December 31, 2012.
 
 
24

 
 
GRANTS OF PLAN-BASED AWARDS
 
   
Grant
    Committee  
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards (1)
   
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 Awards
   
Grant
Date
Fair Value
of Stock
and Options
 
Name
(a)
 
Date
(b)
 
Action Date
 
Threshold
($)(c)
   
Target
($)(d)
   
Maximum
($)(e)
   
Threshold
($)(f)
   
Target
($)(g)
   
Maximum
($)(h)
   
Or Units
(i)
   
Options
(j)
   
($/Sh)
(k)
   
Awards($)
(2)
 
                                                                           
Joseph A.   Boshart
 
 
3/1/2012
        85, 060       340,240       667,394                                            
   
6/1/2012
 
 5/8/2012
                                        40,000                   174,000  
   
6/1/2012
 
5/8/2012
                                                40,000       4.35       67,712  
                                                                                         
Emil
  Hensel
 
3/1/2012
        58,127       232,509       456,075                                                          
   
6/1/2012
 
5/8/2012
                                        30,000                       130,500  
   
6/1/2012
 
5/8/2012
                                                            30,000       4.35       50,784  
                                                                                         
Vickie   Anenberg
 
3/1/2012
        40,625       162,500       341,250                                                          
   
6/1/2012
 
5/8/2012
                                        30,000                       130,500  
   
6/1/2012
 
5/8/2012
                                                            30,000       4.35       50,784  
                                                                                         
Susan E.   Ball
 
3/1/2012
        31,388       125,520       272,025                                                          
   
6/1/2012
 
5/8/2012
                                        27,000                       117,450  
   
6/1/2012
 
5/8/2012
                                                            25,000       4.35       42,320  
                                                                                         
Jonathan W.   Ward
 
3/1/2012
        38,619       154,474       324,395                                                          
   
6/1/2012
 
5/8/2012
                                        30,000                       130,500  
   
6/1/2012
 
5/8/2012
                                                            30,000       4.35       50,784  
_______________
(1)
Amounts relate to the NEOs individual annual cash incentive as described in the Compensation Discussion and Analysis contained herein. The Subjective Component of the plans was not included in the threshold or target columns (columns (c) and (d) but was included in the maximum column (column (e)).
 
(2)
Grant date fair value is calculated by multiplying the number of shares times the fair value per award. Refer to the footnotes to the Summary Compensation Table above.
 
 
25

 
 
OUTSTANDING EQUITY AWARDS AT 2012 YEAR-END
 
       
Option Awards
 
Stock Awards
Name
(a)
 
Grant
Date
 
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(b)
 
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(c) (1)
 
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)
 
Option
Exercise
Price
($)
(e)
 
Option
Expiration
Date
(f)
 
Number of
Shares
or Units
of Stock
That Have
Not Vested
(#)
(g)(1)
 
Market
Value
of Shares
or Units
of Stock
That Have
Not Vested
($)
(h) (2)
 
Equity
Incentive
Plan
Awards:
Number
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)
(i)
 
Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares, Units or
Other Rights
That Have
Not Vested
($)
(j)
                                                   
Joseph A. Boshart
   
04/11/2003
 
9,000
   
 
   
10.38
 
04/11/2013
   
 
   
 
     
02/16/2005
 
25,000
   
 
   
15.60
 
02/16/2015
   
 
   
 
     
10/01/2007
 
8,400
   
 
   
18.25
 
10/01/2014
   
 
   
 
     
05/06/2008
 
8,349
       
   
13.02
 
05/06/2015
             
 
     
06/01/2009
 
93,750
   
31,250
 
   
8.56
 
06/01/2016
   
17,500
 
84,000
   
 
     
06/01/2010
 
15,000
   
15,000
 
   
8.09
 
06/01/2017
   
15,000
 
72,000
   
 
     
06/01/2011
 
7,500
   
22,500
 
   
7.44
 
06/01/2018
   
22,500
 
108,000
   
 
     
06/01/2012
 
   
40,000
 
   
4.35
 
06/01/19
   
40,000
 
192,000
   
 
                                                   
Emil Hensel
   
04/11/2003
 
15,000
   
 
   
10.38
 
04/11/2013
   
 
   
 
     
02/16/2005
 
23,000
   
 
   
15.60
 
02/16/2015
   
 
   
 
     
10/01/2007
 
5,460
   
 
   
18.25
 
10/01/2014
   
 
   
 
     
05/06/2008
 
5,427
       
   
13.02
 
05/06/2015
             
 
     
06/01/2009
 
63,750
   
21,250
 
   
8.56
 
06/01/2016
   
11,681
 
56,069
   
 
     
06/01/2010
 
12,500
   
12,500
 
   
8.09
 
06/01/2017
   
12,500
 
60,000
   
 
     
06/01/2011
 
6,250
   
18,750
 
   
7.44
 
06/01/2018
   
18,750
 
90,000
   
 
     
06/01/2012
 
   
30,000
 
   
4.35
 
06/01//19
   
30,000
 
144,000
   
   
                                                   
Vickie Anenberg
   
04/11/2003
 
14,000
   
 
   
10.38
 
04/11/2013
   
 
   
 
     
02/16/2005
 
21,000
   
 
   
15.60
 
02/16/2015
   
 
   
 
     
10/01/2007
 
2,940
   
 
   
18.25
 
10/01/2014
   
 
   
 
     
05/06/2008
 
3,131
       
   
13.02
 
050/6/2015
             
 
     
06/01/2009
 
37,500
   
12,500
 
   
8.56
 
06/01/2016
   
6,571
 
31,541
   
 
     
06/01/2010
 
7,500
   
7,500
 
   
8.09
 
06/01/2017
   
7,500
 
36,000
   
 
     
06/01/2011
 
4,500
   
13,500
 
   
7.44
 
06/01/2018
   
13,500
 
64,800
   
 
     
06/01/2012
 
   
30,000
 
   
4.35
 
06/01/2019
   
30,000
 
144,000
   
   
                                                   
Susan E. Ball
   
04/11/2003
 
3,500
   
 
   
10.38
 
04/11/2013
   
 
   
 
     
02/16/2005
 
20,000
   
 
   
15.60
 
02/16/2015
   
 
   
 
     
10/01/2007
 
2,520
   
 
   
18.25
 
10/01/2014
   
 
   
 
     
05/06/2008
 
2,922
       
   
13.02
 
05/06/2015
             
 
     
06/01/2009
 
22,500
   
7,500
 
   
8.56
 
06/01/2016
   
4,381
 
21,029
   
 
     
06/01/2010
 
7,500
   
7,500
 
   
8.09
 
06/01/2017
   
9,000
 
43,200
   
 
     
06/01/2011
 
3,750
   
11,250
 
   
7.44
 
06/01/2018
   
11,250
 
54,000
   
 
     
06/01/2012
 
   
25,000
 
   
4.35
 
06/01/2019
   
27,000
 
129,600
   
   
                                                   
Jonathan W. Ward
   
04/11/2003
 
12,000
   
 
   
10.38
 
04/11/2013
   
 
   
 
     
02/16/2005
 
20,000
   
 
   
15.60
 
02/16/2015
   
 
   
 
     
10/01/2007
 
4,200
   
 
   
18.25
 
10/01/2014
   
 
   
 
     
05/06/2008
 
4,174
       
   
13.02
 
05/06/2015
             
 
     
06/01/2009
 
41,250
   
13,750
 
   
8.56
 
06/01/2016
   
7,300
 
35,040
   
 
     
06/01/2010
 
8,500
   
8,500
 
   
8.09
 
06/01/2017
   
8,500
 
40,800
   
 
     
06/01/2011
 
5,000
   
15,000
 
   
7.44
 
06/01/2018
   
15,000
 
72,000
   
 
     
06/01/2012
 
   
30,000
       
4.35
 
06/01/2019
   
30,000
 
144,000
   
   
_______________
(1)
Awards vest in four equal installments on the anniversary of the grant date, provided that the officer continues to be employed with us through each vesting date.
 
(2)
Market value of shares is measured by reference to our closing stock price as of December 31, 2012 of $4.80.
 
 
26

 
 
OPTION EXERCISES AND STOCK VESTED IN 2012
 
   
Option Awards
   
Stock Awards
 
Name (a)
 
Number of Shares
Acquired on Exercise
(#)
(b)
   
Value Realized
on Exercise
($)
(c) (1)
   
Number of Shares
Acquired on Vesting
(#)
(d)
   
Value Realized
on Vesting
($)
(e) (2)
 
Joseph A. Boshart
                37,500       163,725  
Emil Hensel
                27,431       119,715  
Vickie Anenberg
                16,696