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 (Amendment No.       )

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WOLVERINE WORLD WIDE, INC.

(Name of Registrant as Specified In Its Charter)

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

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SEC 1913 (02-02)

Wolverine World Wide, Inc.
9341 Courtland Drive, N.E.
Rockford, Michigan 49351

 

NOTICE OF ANNUAL MEETING

 

To our Stockholders:

 

You are invited to attend Wolverine’s Annual Meeting of Stockholders at Wolverine’s headquarters located at 9341 Courtland Drive, N.E., Rockford, Michigan, on Thursday, April 23, 2009, at 10 a.m. local time. At the meeting, we will:

 

(1) Elect four directors for three-year terms expiring in 2012.

 

 

(3) Conduct such other business as may properly come before the meeting.

 

You can vote at the meeting and any adjournment of the meeting if you were a stockholder of record on March 2, 2009. A list of stockholders entitled to vote at the meeting will be available for review by Wolverine stockholders at the office of Kenneth A. Grady, Secretary and General Counsel of Wolverine, located at 9341 Courtland Drive, N.E., Rockford, Michigan, during ordinary business hours for the 10-day period before the meeting.

 

A copy of Wolverine’s Annual Report to Stockholders for the year ended January 3, 2009, is enclosed with this Notice. The following proxy statement and enclosed proxy card are being sent to stockholders on and after March 13, 2009.

 

By Order of the Board of Directors

 

Kenneth A. Grady, Secretary and General Counsel

 

March 13, 2009

 

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 23, 2009.

 

Wolverine’s Proxy Statement for the 2009 Annual Meeting of Stockholders and the Annual
Report to Stockholders for the fiscal year ended January 3, 2009 are available at
www.wolverineworldwide.com/2009annualmeeting.asp

 

WOLVERINE WORLD WIDE, INC.

9341 Courtland Drive, N.E.

Rockford, Michigan 49351

 

ANNUAL MEETING OF STOCKHOLDERS

 

April 23, 2009

 

Proxy Statement

 

This proxy statement and enclosed proxy card are being furnished to you in connection with the solicitation of proxies by the Wolverine Board of Directors for use at the annual meeting. In this proxy statement, “we,” “us,” “our” and “Wolverine” refer to Wolverine World Wide, Inc. and “you” and “your” refer to Wolverine stockholders.

 

Questions and Answers About the Proxy Materials and Our 2009 Annual Meeting

 

 

 

 

Election of Directors

 

As recommended by the Governance Committee, the Board of Directors proposes that the following nominees be elected as directors for terms expiring at the 2012 annual meeting:

 

Alberto L. Grimoldi
Joseph R. Gromek
Brenda J. Lauderback
Shirley D. Peterson

 

All of the nominees are currently directors of Wolverine whose terms will expire at the annual meeting. Each proposed nominee is willing to serve as a director if elected. However, if a nominee is unable to serve or is otherwise unavailable for election, which is not contemplated, the incumbent Wolverine Board of Directors may or may not select a substitute nominee. If a substitute nominee is selected, your shares will be voted for the substitute nominee (unless you give other instructions). If a substitute nominee is not selected, your shares will be voted for the remaining nominees. Proxies will not be voted for more than four nominees.

 

Wolverine’s Board of Directors currently consists of 11 directors. Wolverine’s Amended and Restated Bylaws provide that the Board of Directors is divided into three classes, with each class to be as nearly equal in number as possible. Each class serves a term of office of three years, with the term of one class expiring at the annual meeting in each successive year.

 

Biographical information for each nominee and each current director who will continue to serve after the annual meeting is presented below. Except as otherwise indicated, all have had the same principal positions and employment for over five years.

 

Your Board of Directors recommends that you vote FOR each nominee.

 

Wolverine’s Board of Directors

 

Nominees for Terms Expiring in 2012

 

ALBERTO L. GRIMOLDI (age 67) has been a director since 1994. Mr. Grimoldi is Chairman of Grimoldi, S.A., a shoe manufacturer and retailer in Argentina. He has held that position since 1986. Mr. Grimoldi was previously a member of the Advisory Board of Ford Motor Company in Argentina, and has also held various positions in the Argentinean government.

 

 

JOSEPH R. GROMEK (age 62) was appointed to Wolverine’s Board of Directors on April 17, 2008. Mr. Gromek is President, Chief Executive Officer and a director of The Warnaco Group, Inc., which designs, sources, manufactures, markets, licenses and distributes a broad line of intimate apparel, sportswear and swimwear worldwide. He has held that position since 2003.

 

 

BRENDA J. LAUDERBACK (age 58) was appointed to the Board of Directors in 2003. From 1995 until her retirement in 1998, Ms. Lauderback was president of the Wholesale and Retail Group of Nine West Group, Inc., a footwear wholesaler and distributor. She was previously the President of the Wholesale Division of U.S. Shoe Corporation, a footwear manufacturer and distributor, and a Vice President of Dayton Hudson Corporation, a retailer. Ms. Lauderback is also a director of: Irwin Financial Corporation; Big Lots, Inc.; Denny’s Corporation; and Select Comfort Corporation.

 

SHIRLEY D. PETERSON (age 67) has been a director since 2005. From 1995 until her retirement in 2000, Ms. Peterson served as President of Hood College of Frederick, Maryland. From 1993 to 1995 she was a partner at the law firm Steptoe & Johnson LLP. She was previously the Commissioner of the Internal Revenue Service and an Assistant Attorney General of the Tax Division for the U.S. Department of Justice. Ms. Peterson is also a director of: The Goodyear Tire & Rubber Company; AK Steel Holding Corporation; and Champion Enterprises Inc.

Continuing Directors — Terms Expiring in 2011

 

WILLIAM K. GERBER (age 55) has been a director since 2008. Mr. Gerber is Managing Director of Cabrillo Point Capital LLC, a private investment fund. He has held that position since 2008. From 1998 to 2007, Mr. Gerber was Executive Vice President and Chief Financial Officer of Kelley Services, Inc., a global staffing solutions company. Mr. Gerber is also a director of AK Steel Corporation and Kaydon Corporation.

 

BLAKE W. KRUEGER (age 55) has been a director since 2006. Mr. Krueger is Chief Executive Officer and President of Wolverine, a position he assumed in April 2007. From October 2005 until April 2007, Mr. Krueger served as President and Chief Operating Officer of Wolverine. From 2004 to October 2005, he served as Executive Vice President and Secretary of Wolverine and President of the Heritage Brands Group. From 2003 to 2004, Mr. Krueger served as Executive Vice President and Secretary of Wolverine and President of the Caterpillar Footwear Group. He has also previously served as Executive Vice President, General Counsel and Secretary of Wolverine with various responsibilities including the human resources, retail, business development, accessory licensing, mergers and acquisitions, and legal areas.

 

MICHAEL A. VOLKEMA (age 53) has been a director since 2005. Mr. Volkema is Chairman of Herman Miller, Inc., a leading designer and manufacturer of furnishings for the office and home. He has held that position since 2000. Mr. Volkema became President and Chief Executive Officer of Herman Miller in 1995 and held those positions until 2003 and 2004, respectively.

 

Continuing Directors — Terms Expiring in 2010

 

JEFFREY M. BOROMISA (age 54) has been a director since 2006. Mr. Boromisa is Executive Vice President of Kellogg International, President of Latin America and Senior Vice President of Kellogg Company, a leading global cereal, snack and specialty foods company. He has held these positions since 2008. Mr. Boromisa is also a member of Kellogg Company’s Global Leadership Team. From 2006 until 2008, Mr. Boromisa served as Executive Vice President of Kellogg International, President of Asia Pacific and Senior Vice President of the Kellogg company. From 2004 until 2006, he was Senior Vice President and Chief Financial Officer of Kellogg Company. In 2002, Mr. Boromisa was promoted to Senior Vice President, Corporate Controller and Chief Financial Officer of Kellogg International. Mr. Boromisa served as Vice President and Corporate Controller of Kellogg Company from November 1999 until 2002. In 1997, he was promoted to Vice President — Purchasing of Kellogg North America, and since 1981, has served Kellogg Company in various financial positions.

 

DAVID T. KOLLAT (age 70) has been a director since 1992. Mr. Kollat is Lead Director of Wolverine. Mr. Kollat is also President and Chairman of 22, Inc., a company specializing in research and management consulting for retailers and consumer goods manufacturers. Mr. Kollat is also a director of Limited Brands, Inc.; Big Lots, Inc.; and Select Comfort Corporation.

 

DAVID P. MEHNEY (age 69) has been a director since 1977. Mr. Mehney is President of The KMW Group, Inc., an importer and distributor of medical products and distributor of marine products in Michigan.

 

TIMOTHY J. O’DONOVAN (age 63) has been a director since 1993. Mr. O’Donovan is Chairman of the Board of Wolverine, and has served in that position since April 2005. In April 2007, Mr. O’Donovan retired as Chief Executive Officer of Wolverine, a position which he held since April 2000. Mr. O’Donovan served Wolverine as its Chief Executive Officer and President from April 2000 until April 2005. Before April 2000, Mr. O’Donovan was Chief Operating Officer and President of Wolverine since 1996. Before 1996, Mr. O’Donovan was Executive Vice President of Wolverine. Mr. O’Donovan is also a director of Spartan Stores, Inc. and Kaydon Corporation.

 

 

Board Committees and Meetings

 

During the 2008 fiscal year, the Board of Directors held five regular meetings. Each of the directors attended 75% or more of the aggregate of the total number of full Board meetings and the total number of meetings of committees on which he or she served (during the periods that he or she served).

The Board of Directors has three standing committees: the Audit Committee, the Compensation Committee and the Governance Committee. Members of each committee are appointed by the Board of Directors and the authority, duties and responsibilities of each committee are governed by written charters approved by the Board of Directors. In addition to regular Board and Committee meetings, Wolverine has regular scheduled executive sessions for non-management directors. Wolverine’s independent Lead Director, Mr. Kollat, presides at all non-management executive sessions. Interested parties may make concerns known to the non-management directors by communicating with Mr. Kollat or with the non-management directors as a group, through one of the Board communication mechanisms described later in this proxy statement under the heading “Corporate Governance Principles — Communication with the Board.”

 

The table below shows current membership for each of the standing committees:

 

 

 

Below is a description of each of the standing committees.

 

Audit Committee.  The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 and performs the following duties:

 

 

Only independent directors may serve on the Audit Committee. Each member of the Audit Committee satisfies the independence standards for such committee members established by the New York Stock Exchange (“NYSE”) and the Securities and Exchange Commission (“SEC”). Wolverine’s Board of Directors has determined that Jeffrey M. Boromisa and William K. Gerber are audit committee financial experts, as defined by the SEC. The Audit Committee met twelve times in 2008.

 

Compensation Committee.  The Compensation Committee:

 

 

 

Only independent directors may serve on the Compensation Committee. Each member of the Compensation Committee satisfies the independence standards for such committee members established by the NYSE. The Compensation Committee met five times during 2008.

 

Governance Committee.  The Governance Committee:

 

 

In evaluating the skills and characteristics required of Board members, the Governance Committee addresses issues such as experience, diversity, age and skills in the context of the current make-up of the Board. The Governance Committee will consider candidates for nomination that are recommended by stockholders, directors, officers, third-party search firms and other sources. Stockholders may recommend individual nominees for consideration by the Governance Committee by communicating with the Governance Committee through one of the Board communication mechanisms described under the heading “Corporate Governance Principles — Communication with the Board.” The Board of Directors ultimately determines individuals to be nominated at each annual meeting. Direct stockholder nominations may be made through the procedure described below under the subheading “Stockholder Nominations.” From time to time, Wolverine or the Governance Committee engages third-party search firms to assist with identifying and evaluating potential nominees.

 

In making nominee recommendations to the Board, the Governance Committee considers a potential nominee’s ability, judgment and personal and professional integrity. The Governance Committee seeks nominees who it believes are likely to be most effective, in conjunction with other nominees and Board members, in collectively serving the long-term interests of the stockholders. Based on the Governance Committee’s recommendation, the Board of Directors appointed Joseph R. Gromek as a new director in April 2008. Mr. Gromek was identified by a third-party search firm and recommended by the Governance Committee for appointment to the Board.

 

Only independent directors may serve on the Governance Committee. Each member of the Governance Committee satisfies the independence standards for such committee members established by the NYSE. The Governance Committee met five times during 2008.

 

Stockholder Nominations

 

Nominations may be made by a stockholder entitled to vote for the election of directors if, and only if, the stockholder submits advance notice of the proposed nomination to the Secretary of Wolverine and the notice is received by the Secretary of Wolverine not earlier than the

close of business on the 120^th day and not later than the close of business on the 90^th day prior to the anniversary of the prior year’s annual meeting. If Wolverine did not hold an annual meeting within the last year or the date of the upcoming annual meeting changed by more than 30 days from the date of the last preceding annual meeting, stockholders must give notice by the close of business not more than 10 days after the public disclosure of the date of the meeting. Each notice submitted by a stockholder must set forth each nominee’s name, age, business address, residence address and principal occupation and employment, the class and number of shares of common stock beneficially owned by each nominee, and any other information concerning each nominee required to be included in a proxy statement soliciting proxies for the election of the nominee under the rules of the SEC. In addition, the notice must state the name, record address and the class and number of shares of common stock beneficially owned by the stockholder submitting the notice, along with information, as of the date of notice and the record date for the annual meeting, about any agreement, arrangement or understanding that has the effect or intent of mitigating loss, managing risk or benefit from changes in the share price of any class or series of shares of Wolverine, or increasing or decreasing voting power with respect to shares of Wolverine, including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares. If the chairman of the meeting determines that a nomination was not made in accordance with these procedures, he or she must announce that determination at the meeting and the nomination will be disregarded.

 

Corporate Governance Principles

 

Wolverine has developed governance principles to assist the Board in fulfilling its responsibilities to stockholders and to provide a framework for the Board’s oversight responsibilities regarding the management of Wolverine. Wolverine’s governance principles are dynamic and have been developed and revised over a period of many years to reflect changing laws, regulations and best business practices. The governance principles also provide guidance and transparency to management, employees, investors and other stakeholders regarding the Board’s philosophy, high ethical standards, expectations for conducting business, and decision-making processes.

 

The following is a summary of certain of Wolverine’s policies, charters, guidelines and principles relating to corporate governance and financial reporting. You may access complete current copies of our Code of Conduct & Compliance, Corporate Governance Guidelines, Director Independence Standards, Accounting and Finance Code of Ethics, Audit Committee Charter, Governance Committee Charter and Compensation Committee Charter on the Corporate Governance section of the Investors section of Wolverine’s website at www.wolverineworldwide.com. Each of these is also available in print to any stockholder upon request to the Secretary of Wolverine, and the Director Independence Standards are attached as Appendix A to this Proxy Statement.

 

Independence

 

The Board believes that the independence of directors and Board committee members is important to assure that the Board and its committees operate only in the best interests of the stockholders and to avoid any appearance of conflict of interest. For over 15 years, Wolverine has functioned with not more than two active or former management employees as directors. The remainder of the Board’s 8 to 12 directors over this period have been non-management directors. Only two current or former management employees, Wolverine’s Chief Executive Officer and President, and Wolverine’s Chairman and former Chief Executive Officer, currently serve as directors. Wolverine’s formal Corporate Governance Guidelines require that a substantial majority of the directors be independent.

 

The Board has determined that the following 8 of its 11 directors meet the director independence standards adopted by the Board and the applicable NYSE standards for independence (including, with respect to audit committee members, the heightened independence criteria applicable to audit committee members under the NYSE and SEC independence standards), have no material relationship with Wolverine, and therefore are independent:

 

 

* See the discussion of indirect related party transactions under the caption “Related Matters,” subheading “Certain Relationships and Related Transactions.”

 

Mr. Phillip D. Matthews served as a director in 2008 until his retirement as a director in April 2008, and was determined to be independent by the Board of Directors in February 2008.

 

Our Board of Directors has adopted categorical Independence Standards, which are attached as Appendix A to this Proxy Statement and which are also available at our website. These Independence Standards comply with and, in some areas, exceed the director independence standards required by the NYSE. In summary, under these standards a director is considered independent only if the director and his or her immediate family members do not have, and generally have not had in the most recent three years, any material relationships with Wolverine, its subsidiaries or affiliates (including certain relationships with Wolverine’s independent auditors). The standards establish thresholds at which such relationships are deemed to be not material. In addition, the Board examines on a case-by-case basis transactions and relationships that are not of a nature addressed by the categorical standards.

 

Corporate Governance Guidelines

 

The Board has adopted Corporate Governance Guidelines that set forth the primary framework of governance principles applicable to Wolverine. The Corporate Governance Guidelines outline the general duties and functions of the Board and management, and set forth general principles regarding Board composition, independence, Board meetings and responsibilities, Board committees, expectations of directors, annual performance evaluations, management succession and ethical expectations.

 

Stock Ownership Requirements for Directors and Executive Officers

 

For many years, the Board has believed that directors and management should have a significant financial stake in Wolverine to align their interests with those of the stockholders. For that reason, several years ago the Board adopted formal requirements that directors and executive management own specified amounts of Wolverine stock (including ownership credit for stock units allocated to non-employee directors under the Deferred Compensation Plan) within five years of their respective election to the Board or appointment as a member of executive management. The ownership requirements necessitate holdings of a number of shares (including ownership credit for stock units allocated to non-employee directors under the Deferred Compensation Plan) of Wolverine stock with a value equal to at least (i) for directors, five times the current Board retainer, (ii) for the Chief Executive Officer, five times base salary, (iii) for other executive officers, between two and three times base salaries, and (iv) for other executive management, between one and two times base salaries.

 

Code of Conduct & Compliance

 

For years, Wolverine and its employees and directors have followed an extensive Code of Conduct & Compliance (“Code”). This comprehensive Code establishes basic guidelines to help employees and directors comply with applicable legal requirements and sets forth Wolverine’s expectations regarding business ethics, integrity, honesty and fairness. The Code contains Wolverine’s principles and procedures regarding conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of Wolverine’s assets, compliance with laws, rules and regulations, engagement criteria for Wolverine’s trading partners, “whistle blower” protection provisions, expectations regarding the integrity of books and records, and guidelines and procedures for many other subjects. Employees are surveyed annually to identify any areas of noncompliance with the Code, and the results of this survey are reported to the Board.

 

Accounting and Finance Code of Ethics

 

The Board has adopted an Accounting and Finance Code of Ethics (“Finance Ethics Code”). This is an ethics code focused on the financial reporting process and is intended to protect the interests of all of Wolverine’s constituents, including stockholders, employees, customers and the communities in which Wolverine conducts business. Many of the basic tenets of the Finance Ethics Code have been incorporated for many years in the Code. The Finance Ethics Code is applicable to Wolverine’s Chief Executive Officer, Chief Financial Officer and Corporate Controller and sets forth specific rules of conduct and expectations regarding the financial reporting process, protection of Wolverine’s assets, compliance with rules and regulations and honest and ethical conduct in connection with the financial reporting process and related disclosures. The Finance Ethics Code and the Code are available on the Corporate Governance section of the Investors section of Wolverine’s website at www.wolverineworldwide.com, where Wolverine will post any waiver of or amendment to these codes for directors or executive officers.

 

Board Committee Charters

 

The Board has organized and formed three committees, the Audit Committee, the Compensation Committee and the Governance Committee. The Board has approved a committee charter for each committee that contains

basic principles regarding the committee’s organization, purpose, authority and responsibilities. The performance of each committee is reviewed annually by committee members and the Board.

 

Leadership

 

Since 1993, the Board has operated with an independent Lead Director, who is selected by the independent directors. The duties of the independent Lead Director include: (a) working closely with the Chairman regarding the agenda and scheduling for Board and committee meetings; (b) overseeing information sent to the Board; (c) presiding over executive sessions; (d) serving as a liaison between the Chairman and the independent Directors; (e) presiding over Board meetings in the absence of the Chairman; and (f) being available for consultation and communications with stockholders as appropriate.

 

Attendance

 

The Board prides itself on its ability to recruit and retain directors who have a diversity of experience, who have the highest personal and professional integrity, who have demonstrated exceptional ability and judgment and who are effective (in conjunction with the other members of the Board) in collectively serving the long-term interests of the stockholders. Board and committee attendance is central to the proper functioning of the Board of Directors and is a priority. Directors are expected to make every effort to attend every Board meeting. Directors are also expected to attend the Annual Meeting of Stockholders in person. All then-current directors attended the 2008 annual meeting.

 

Communication with the Board

 

Stockholders and interested parties may communicate with members of Wolverine’s Board of Directors through various links provided on the Corporate Governance section of the Investors section of Wolverine’s website at www.wolverineworldwide.com or by sending correspondence to the Board, a specific Board committee or a Board member c/o General Counsel, Wolverine World Wide, Inc., 9341 Courtland Drive, N.E., Rockford, Michigan 49351. Any communications submitted by any of the above means (or the means described below) are received by Wolverine’s General Counsel and forwarded to the appropriate person or persons. Any suggestions, concerns or reports of misconduct at Wolverine or complaints or concerns regarding Wolverine’s financial statements and accounting, auditing, internal control and reporting practices can be reported (including anonymous and confidential submissions) by submitting a report on www.WolverineReportLine.com or by writing to the audit committee c/o the General Counsel at the above address.

 

Board and Company Culture

 

Wolverine’s comprehensive governance guidelines and principles are coupled with a robust, open and effective Board environment that promotes respect, trust and candor, fosters a culture of open dissent and permits each director to express opinions and contribute to the Board process. Directors are expected to have unrestricted access to management and any company information they desire. The participation of Board members and the open exchange of opinions is further encouraged at the Board committee level through the periodic rotation of Board members among its standing committees. This open and candid operating environment is shared by management and the Board and is essential to fully realize the benefits of Wolverine’s formal governance guidelines, principles, charters and policies.

 

Non-Employee Director Compensation

 

Wolverine pays each non-employee director an annual cash retainer of $30,000 plus $2,000 per full day for attendance at each regular meeting of the Board of Directors and $1,000 for attendance at each committee meeting, including meetings by teleconference. In addition, Wolverine pays the chairperson of the Audit Committee an annual fee of $7,500 and the chairpersons of the Compensation and Governance Committees annual fees of $5,000.

 

Wolverine also pays each non-employee director an annual equity retainer equal to $40,000 (increased from $15,000 in fiscal 2007) in the form of a contribution deferred in the form of Stock Units under the Amended and Restated Outside Directors’ Deferred Compensation Plan (the “Deferred Compensation Plan”). The terms of the Deferred Compensation Plan and Stock Units are described below. For fiscal year 2008, non-employee directors were credited with 1,402 Stock Units.

 

Under Wolverine’s current director compensation program, each newly appointed or elected non-employee director is also granted an option to purchase a number of shares of Wolverine common stock equal to six times the annual cash retainer fee then in effect divided by the closing market price of Wolverine’s stock on the date of his or her initial election or appointment. For 2008, newly appointed directors Mr. Gerber and Mr. Gromek received 6,891 and 6,309 options, respectively. On the date of each annual meeting after his or her initial appointment or election, each non-employee director is granted an option to purchase a number of shares equal to three times the annual cash retainer fee then in effect divided by the closing market price of Wolverine’s stock on the annual meeting date. For 2008, each non-management director received 3,155 options granted under the Stock Incentive Plan of 2005. These options were fully vested on the grant date and have a term of 10 years. The exercise price of options granted is equal to the closing market price of Wolverine’s common stock on the date each option is granted.

 

Directors who are also employees of Wolverine or any of its subsidiaries do not receive an annual cash or equity retainer and are not compensated for attendance at Board or committee meetings. Wolverine also pays director expenses associated with attending Board and committee meetings and other Wolverine matters (including spouse travel expenses in connection with strategic planning meetings every other year). Board members from time to time receive sample Wolverine products of nominal value for review and assessment. Board members are eligible to receive reimbursement for certain approved expenses relating to director education.

 

Mr. Kollat serves as Lead Director of Wolverine. For his service as Lead Director, Mr. Kollat receives an annual fee of $60,000. These payments are in lieu of the annual director cash retainer fee of $30,000. Mr. Kollat receives the standard director fee for attendance at Board meetings and standard director stock options, but does not receive attendance fees for attending committee meetings.

 

In connection with his retirement as Chief Executive Officer in April 2007, Wolverine entered into a one-year consulting agreement with Mr. O’Donovan in order to retain his services after retirement. Under the consulting arrangement, Mr. O’Donovan received an annual fee of $350,000 in lieu of any director remuneration other than the standard director stock option grant for his services as Chairman of the Board. Under the consulting agreement, Wolverine continued to provide Mr. O’Donovan with office space, administrative support and continued estate and financial planning and tax preparation services. In addition, Mr. O’Donovan’s 2007 restricted stock grant vested upon his successful completion of his first year of duties as non-officer Chairman of the Board on April 17, 2008. In February 2008, Wolverine extended Mr. O’Donovan’s term as Chairman through April 2009. For the period from April 2008 to April 2009 Mr. O’Donovan received $150,000 for his services as Chairman and will also have office space and administrative staffing at Wolverine’s headquarters. He also received the standard annual non-management director stock option award for his services in fiscal 2008.

 

Deferred Compensation Plan. In 2008, Wolverine adopted the Deferred Compensation Plan, a supplemental nonqualified deferred compensation plan for directors who are not employees of Wolverine or its subsidiaries. Wolverine continues to maintain a prior plan that applies to benefits accrued before January 1, 2005. The Deferred Compensation Plan permits all non-employee directors to defer 25%, 50%, 75% or 100% of their directors’ fees. Amounts deferred and annual equity retainer amounts described above are credited on the books of Wolverine to an account established for that director as if the amounts had been invested in shares of Wolverine common stock using the closing

market price of common stock on the payment date (“Stock Units”). Stock Units are credited with dividend equivalents.

 

The accumulated Stock Units in a director’s account under the plan are distributed in shares of Wolverine common stock in a single lump-sum or annual installments over a period of up to 20 years (10 years under the prior plan) by converting each Stock Unit to one share of Wolverine common stock upon termination of service as a director or as of a date selected by the director.

 

Upon a “change in control” as defined in the current Deferred Compensation Plan, Wolverine shares of common stock equal to the Stock Units credited to a director’s account will be distributed to the director in a single lump sum payment. For purposes of the Deferred Compensation Plan, “change in control” is defined as:

 

 

Director Compensation for Fiscal 2008

 

The following table provides information concerning the compensation of directors for Wolverine’s last completed fiscal year.

 

		Fees
		Earned
		or				Stock				Option				All Other
		Paid in				Awards				Awards				Compensation				Total
Name		Cash(1)($)				(2)(3)($)				(3)($)				($)				($)
Jeffrey M. Boromisa			—				99,682				20,724				0				120,406
William K. Gerber(4)			41,500				40,309				61,032				0				142,841
Alberto L. Grimoldi			—				96,695				20,724				0				117,419
Joseph R. Gromek(4)			—				74,936				62,166				0				137,102
David T. Kollat			70,000				48,937				20,724				0				139,661
Brenda J. Lauderback			45,750				57,327				20,724				0				123,801
Phillip D. Matthews(5)			25,222				4,353				—				0				29,575
David P. Mehney			—				105,846				20,724				0				126,570
Timothy J. O’Donovan(6)			87,500				56,375				20,724				0				164,599
Shirley D. Peterson			57,000				40,794				20,724				0				118,518
Michael A. Volkema			52,500				40,794				20,724				0				114,018

 

 

		Fiscal 2008 Option				Option Awards
		Awards				Outstanding at
		Grant Date				January 3,
Name		Fair Value				2009
Jeffrey M. Boromisa		$	20,724				13,891
William K. Gerber			61,032				10,046
Alberto L. Grimoldi			20,724				45,939
Joseph R. Gromek			62,166				9,464
David T. Kollat			20,724				54,128
Brenda J. Lauderback			20,724				14,195
Phillip D. Matthews			—				50,973
David P. Mehney			20,724				54,128
Timothy J. O’Donovan			20,724				380,811
Shirley D. Peterson			20,724				22,758
Michael A. Volkema			20,724				18,058

 

 

Ownership of Wolverine Stock

 

Five Percent Stockholders

 

The following table sets forth information concerning the number of shares of Wolverine stock held by each entity known to Wolverine to be the beneficial owner of more than five percent of Wolverine’s outstanding shares of common stock:

 

		Amount and Nature of Beneficial
		Ownership of Common Stock
										Shared Voting				Total
Name and Address		Sole Voting				Sole Dispositive				or Dispositive				Beneficial				Percent
of Beneficial Owner		Power				Power				Power				Ownership				of Class
Barclays Global Investors, NA(1) 400 Howard St. San Francisco, CA 94105			2,349,499				3,106,708				0				3,106,708				6.35	%
Franklin Resources, Inc.(2) One Franklin Parkway San Mateo, CA 94403			2,864,451				2,864,451				0				2,864,451				5.9	%

 

 

 

Stock Ownership By Management

 

The following table sets forth the number of shares of common stock beneficially owned as of March 2, 2009, by each of Wolverine’s directors and nominees for director, each of the named executive officers and all of Wolverine’s directors, nominees for director and executive officers as a group. An asterisk in the column for “Percent of Class” means the individual beneficially owns less than one percent of the common stock:

 

		Amount and Nature of Beneficial
		Ownership of Common Stock(1)
		Sole Voting				Shared Voting								Total
Name of		and/or Dispositive				or Dispositive				Stock				Beneficial				Percent
Beneficial Owner		Power(2)				Power(3)				Options(4)				Ownership(4)				of Class
Jeffrey M. Boromisa			—				—				13,891				13,891			*
Kenneth A. Grady			19,413				—				9,401				28,814			*
William K. Gerber			1,000				—				10,046				11,046			*
Donald T. Grimes			38,991				—				—				38,991			*
Alberto L. Grimoldi			10,168				—				45,939				56,107			*
Joseph R. Gromek			—				—				9,464				9,464			*
Stephen L. Gulis, Jr.			2,260				500				251,966				254,726			*
David T. Kollat			86,135				—				54,128				140,263			*
Blake W. Krueger			333,426				—				302,397				635,823			1.3%
Brenda J. Lauderback			5,100				—				14,195				19,295			*
Pamela L. Linton			27,156				—				5,334				32,490			*
Phillip D. Matthews(5)			5,692				—				50,973				56,665			*
David P. Mehney			77,452				73,889				54,128				205,469			*
Timothy J. O’Donovan			288,358				136,265				380,811				805,434			1.6%
Nicholas P. Ottenwess			33,813				190				82,701				116,704			*
Shirley D. Peterson			3,000				—				22,758				25,758			*
Michael A. Volkema			5,000				—				18,058				23,058			*
James D. Zwiers			56,678				—				43,347				100,025			*
All directors and executive officers as a group (17 people)(6)			996,496				210,154				996,756				2,203,406			4.4%

 

 

Executive Compensation

 

COMPENSATION DISCUSSION AND ANALYSIS

 

Objectives of Wolverine’s Compensation Programs

 

The basic compensation philosophy of the Compensation Committee and Wolverine is to provide competitive salaries and incentives to achieve superior financial performance. Wolverine’s executive compensation policies are designed to achieve four primary objectives:

 

 

The Compensation Committee reviews and structures Wolverine’s compensation programs to balance employee salaries with compensation that is performance-based and reward annual performance while maintaining a focus on longer-term objectives. The mix of compensation elements varies based on an employee’s position and responsibilities. Wolverine’s objective is to balance the total compensation package among cash, non-cash, long-term, short-term and currently paid compensation in a way that meets the goals set forth above. Wolverine believes it serves the needs of its stockholders and key management employees to provide incentives commensurate with individual management responsibilities and past and future contributions to corporate objectives.

 

Comparison Group

 

In reviewing 2008 compensation, the Compensation Committee compared the base salaries and total compensation levels of Wolverine’s Chief Executive Officer and Chief Financial Officer with those of executives with similar positions in companies of similar type, size and financial performance. Although some footwear companies are among the companies included in the comparison group, this group was not limited to footwear companies because Wolverine competes for executive talent with a wide range of corporations. The Compensation Committee reviews the group annually and updates the members in consideration of any mergers, acquisitions or business-related changes. Wolverine’s comparison group for fiscal 2008 included: Jones Apparel Group, Inc.; Brown Shoe Company, Inc.; The Timberland Company; Genesco, Inc.; Columbia Sportswear Company; Skechers U.S.A., Inc.; The Stride-Rite Corp.; Kenneth Cole Productions, Inc.; K-Swiss Inc.; Steven Madden, Ltd.; Rocky Brands, Inc.; Deckers Outdoor Corporation; and Weyco Group, Inc. (the “Peer Group”). For purposes of comparative total shareholder return under the Long-Term Incentive Plan for the 2006-2008 performance period, Puma AG replaces The Stride Rite Corp. in the Peer Group because of the acquisition of The Stride Rite Corp. by Collective Brands Inc. in 2007.

 

At the Compensation Committee’s direction, management collected and assembled the data from the Peer Group and provided the information to the Committee. In general, the Compensation Committee targeted 2008 base salaries for the Chief Executive Officer and Chief Financial Officer positions to be at the median to slightly below the median percentile of base salaries paid for comparable positions within the Peer Group. The Compensation Committee targeted this level of salary in recognition of the need to provide competitive base salaries to attract and retain executive talent, while allowing for a greater portion of compensation to come in forms that are at risk and dependent upon performance. This “pay for performance” approach allows potential overall compensation to exceed or fall below the median Peer Group levels, depending on Wolverine’s performance under the Annual Bonus Plan and Long-Term Incentive Plan and depending on whether Wolverine’s stock price has increased or decreased.

 

In addition to reviewing comparative data from the Peer Group when establishing the 2008 compensation of Wolverine’s Chief Executive Officer and Chief Financial Officer, the Compensation Committee reviewed aggregate compensation data publicly available for U.S. publicly traded companies with revenues ranging from $1 billion to $1.5 billion (excluding companies with overall compensation in excess of certain dollar

thresholds). The Compensation Committee focused its comparative analysis primarily on the Peer Group since it believed that the Peer Group represents companies that are most similarly-positioned to Wolverine.

 

Implementation of Wolverine’s Compensation Programs

 

The Compensation Committee administers and makes recommendations with respect to Wolverine’s compensation plans and reviews and approves (with input from the independent directors in the case of the Chief Executive Officer) the compensation of key senior executives. The Compensation Committee receives recommendations from Wolverine’s Chief Executive Officer regarding the compensation of senior executive officers (other than the Chief Executive Officer). Periodically, the Compensation Committee will engage a compensation consultant to conduct an assessment of the executive compensation program. The Compensation Committee did not engage a compensation consultant to assist the Compensation Committee with determining 2008 compensation of Wolverine’s named executive officers. However, the Compensation Committee engaged Towers Perrin in fiscal 2008 to conduct a market-based assessment of the primary elements of Wolverine’s executive compensation program for 2009. Towers Perrin did not provide any other services to Wolverine in 2008.

 

Elements of Compensation and Fiscal 2008 Amounts

 

Executive compensation at Wolverine consists primarily of the following elements:

 

 

These components, individually and in the aggregate, are designed to accomplish one or more of the four compensation objectives described above.

 

    Base Salary

 

To attract and retain well-qualified executives, the Compensation Committee seeks to establish competitive base salaries. In setting individual base salaries, the Compensation Committee considers the executive’s performance, the executive’s current compensation, the executive’s responsibilities and position within Wolverine and Wolverine’s or the applicable business unit’s performance (determined by reference to pre-tax levels of earnings and levels of revenue) and expected contributions to Wolverine. Management (including the Chief Executive Officer) recommends annual merit increases for consideration by the Compensation Committee.

 

The Compensation Committee also considers Peer Group base salary information for the Chief Executive Officer and Chief Financial Officer positions, and has generally sought to place these base salaries at the median to slightly below the median percentile of base salaries paid for comparable positions within the Peer Group. Although the Compensation Committee does not give specific weight to any particular factor, the most weight is given to an executive’s performance, and a significant but lesser weight is generally given to the comparative data. In general, a market review prepared by management for the Compensation Committee’s consideration showed that 2007 base salary levels for the Chief Executive Officer (Mr. Krueger) and the Chief Financial Officer (Mr. Gulis, at the time of review) were below the median compared to the Peer Group.

 

The following information summarizes each named executive officer’s annualized base salary for fiscal years 2007 and 2008:

 

 

Mr. Zwiers received a 16.3% base salary increase due to his promotion to Senior Vice President and the additional responsibilities he assumed in that role.

 

Mr. Ottenwess’s base salary was increased by 6.4%, reflecting his move to an operational role in connection

with his transition to Senior Vice President — Operations of Wolverine’s Outdoor Group in fiscal 2008. Mr. Gulis’ increase before his retirement reflected his move to an operational role as President of Wolverine’s Global Operations Group. All other base salary increases reflect merit increases based on individual performance.

 

In January 2009, the Compensation Committee determined to freeze the fiscal year 2009 base salary levels for any named executive officer as a result of a company-wide salary freeze for non-union employees. The length of the current salary freeze will depend on a number of factors, including general economic conditions.

 

    Annual Incentive Bonus

 

    Target Bonus and Plan Design.

 

The Annual Bonus Plan is designed to provide key employees with the opportunity for bonuses based on the performance of Wolverine, its subsidiaries, operating divisions and/or profit centers. A target bonus goal (the “target bonus”), expressed as a percentage of the participant’s base salary, is established by the Compensation Committee. The target opportunities for the named executive officers under the plan in fiscal 2008 were as follows:

 

		2008 Target Bonus
Name		(% of Base Salary)
Blake W. Krueger			48	%
Donald T. Grimes			28	%
Kenneth A. Grady			20	%
Pamela L. Linton			24	%
James D. Zwiers			24	%
Stephen L. Gulis, Jr.			32	%
Nicholas P. Ottenwess			20	%

 

In determining the target percentages, the Compensation Committee considered each named executive officer’s position and responsibilities, competitive incentives and the executive’s aggregate incentive compensation potential under all of Wolverine’s plans. The percentage of total compensation represented by annual bonuses is generally higher for more senior executives to reflect their greater influence on profits and sales and to put a larger percentage of their total potential cash compensation “at risk.” Accordingly, the target percentage for Wolverine’s Chief Executive Officer is larger than the target percentages for the other named executive officers.

 

The Compensation Committee did not increase the target bonus of any named executive officer from fiscal 2007 levels with the exception of the target bonus for Mr. Zwiers. For fiscal 2008 year, the Compensation Committee determined to increase Mr. Zwiers’ target bonus from 20% to 24% of base salary based on his promotion to Senior Vice President.

 

Within the first quarter of each fiscal year, the Compensation Committee establishes corporate and divisional performance objectives and the funding level for each objective based on the performance level. Actual payouts under the Annual Bonus Plan, if any, may range from 50% to 212.5% of the target percentage, based on performance. The performance levels required to achieve various payout levels in 2008 are set forth in the table below. Maximum payout under the Annual Bonus Plan and the annual discretionary bonus that is based on individual performance (described below), on a combined basis, is 200% of a named executive officer’s target bonus opportunity. The “Grants of Plan-Based Awards in Fiscal Year 2008” table following this Compensation Discussion and Analysis shows the range of possible awards under the Annual Bonus Plan for each named executive officer.

 

The Compensation Committee selected pre-tax earnings and revenue as the two primary measures of corporate and divisional performance for the Outdoor and Retail Group, with 80% of participants’ target amounts weighted on pre-tax earnings. The divisional performance measures selected for the Global Operations Group were pre-tax earnings and expense control, each with equal weighting.

 

The Compensation Committee determined that the weighting between revenue and earnings metrics reflected Wolverine’s goal to grow sales, but not at the expense of profits and shareholder return. Bonuses for Messrs. Krueger, Grimes and Grady and Ms. Linton were based solely on corporate performance. The annual bonus award for named executive officers heading an operational unit are based both on corporate and divisional performance objectives. The Annual Bonus Plan is designed to closely link the target bonus opportunity for the named executive officers to the performance of the specific divisions and operations over which they have substantial control and ability to impact results. This structure provides clear incentives and line-of-sight management to drive operational performance and divisional achievements on an annual basis. This complements the approach of the LTIP described below, which is focused on Wolverine’s long-term achievements in earnings-per-share and total stockholder return.

The target bonus for Mr. Ottenwess, who is Senior Vice President of Operations for the Outdoor Group, was based 75% on the performance of the Outdoor Group and 25% on corporate performance. The bonus opportunity for Mr. Zwiers, whose responsibilities include leading the Retail Group, was based 62.5% on corporate performance while 37.5% was based on performance of the Retail Group. The bonus opportunity for Mr. Gulis, who was President of the Global Operations Group before his retirement, was based 62.5% on the performance of the Global Operations Group and 37.5% on corporate performance.

 

For 2008, Wolverine’s corporate revenue and corporate pre-tax earnings performance goals were as follows:

 

 

 

Corporate performance goals are based on branded division performance goals. The level of difficulty in attaining threshold, target, goal and maximum performance goals for a division is intended to be substantially similar to the level of difficulty in attaining the comparable corporate goal. Performance goals for the Global Operations Group, the Outdoor Group and the Retail Group, which determine a portion of the bonus awarded to Messrs. Gulis, Ottenwess and Zwiers, respectively, (the “Divisions”) were set using this level-of-difficulty standard. Target performance goals for the Divisions were set at levels that the Compensation Committee believed to be achievable with strong management performance absent a change in overall economic or market conditions. Target goals for each Division were set based on a review of historical performance of the Division and the Division’s 2008 operating plan, with maximum performance goals set higher than the Division’s 2008 operating plan.

 

    2008 Performance Results and Payout.

 

Based on the achievement of the corporate and divisional measures, the named executive officers received the following payments under the Annual Bonus Plan for fiscal 2008 performance:

 

 

Wolverine’s revenue for fiscal year 2008 was $1.221 billion, falling between threshold and target level, resulting in a payout of 70% of target for this performance measure. Wolverine’s pre-tax earnings before the effect of acquisition divestitures, accounting changes, restructuring and other special charges or extraordinary items exceeded the stretch performance level, resulting in a payout of 212.5% of target for this performance measure. Because of the comparative performance levels and the weighting of revenue and pre-tax earnings, approximately 7.5% of the actual payout relating to corporate performance for these named executive officers related to revenue and approximately 92.5% related to pre-tax earnings.

 

For the Outdoor Group, the pre-tax earnings result was near the stretch goal, resulting in a payout of approximately 199% of target for this performance measure. The revenue result for the Outdoor Group fell between the threshold and target levels, resulting in a payout of 56% of target for this performance measure.

 

Mr. Zwiers’ bonus was based on both corporate performance and performance of the Retail Group. The Retail Group’s revenue and pre-tax earnings results fell below the threshold performance level, so there was no payout relating to Retail Group performance.

 

Mr. Gulis’ bonus was based on both corporate performance and performance of the Global Operations Group. The Global Operations Group pre-tax earnings fell slightly above threshold, resulting in a payout of 54.5% of target for this performance measure. The expense result of the Global Operations Group exceeded the maximum performance level, resulting in a payout of 212.5% of target for this performance measure.

 

    Discretionary Bonus

 

In addition to performance-based compensation under the Annual Bonus Plan, Wolverine generally pays annual

bonuses to key employees based on individual performance goals. In 2008, the Compensation Committee awarded a discretionary bonus to each named executive officer. Wolverine uses discretionary bonuses as a way to provide further incentive for support of corporate initiatives.

 

Bonuses based on individual performance are paid on a discretionary basis based on achievement of personal goals, which may include elements such as executing strategies to support Wolverine’s vision, developing people, supporting social and environmental responsibility, growing new business initiatives and driving operational excellence. The performance bonus for the Chief Executive Officer is paid only after the review and approval of the Compensation Committee and the independent directors.

 

During 2008, discretionary bonuses for named executive officers were targeted at the following percentages of annual salary:

 

 

These target bonus percentages remained the same for all named executive officers other than Mr. Zwiers, who received an increase from 5% of base salary for fiscal 2007 to 6% of base salary for fiscal 2008 due to his promotion to Senior Vice President and the additional duties he assumed in that role. In determining the percentages, the Compensation Committee considered the factors discussed above in connection with the Annual Bonus Plan and each named executive officer’s capacity to affect Wolverine’s performance.

 

Discretionary bonus payouts range from 75% of the target for 60-70% achievement of personal goals, to 100% of the target for 70-80% achievement of personal goals, to 135% of target for 80-90% achievement of personal goals, to 150% of target for 90-100% achievement of personal goals.

 

The Compensation Committee awarded the following discretionary bonuses to named executive officers for fiscal year 2008 performance, which are reflected in the “Bonus” column of the Summary Compensation Table:

 

 

 

    Long-Term Incentive Plan

 

The LTIP provides the opportunity for performance-based cash compensation based upon the achievement of company financial performance goals over a three-year period. The LTIP is intended to foster cooperation among all business units and provide significant incentive to achieve Wolverine’s long-term EPS performance goals and strong total stockholder return. The primary concept of the LTIP is to establish financial performance goals for each three-year time period for Wolverine. New performance periods begin each fiscal year and end three full fiscal years later.

 

Awards under the LTIP are based on a percentage of average annual earned salary during the three-year period, and performance is determined by reference to one or more of the performance factors listed in the plan. If the minimum three-year targeted goal is not achieved, no bonus will be paid.

 

    Fiscal 2006-2008 Performance and LTIP Payout.

 

For the 2006-2008 performance period, performance was determined 50% by reference to Wolverine’s aggregate Earnings Per Share (EPS) over the three-year period and 50% by reference to Total Shareholder Return (TSR) compared to the Peer Group. The Compensation Committee selected these performance goals as it believes it is important to provide a reward and incentive for increasing EPS, but also believes that such

reward must be gauged against the results achieved by the Peer Group.

 

 

Performance objectives for the 2006-2008 performance period under the LTIP relating to relative TSR against the Peer Group are as follows:

 

 

EPS performance objectives for the 2006-2008 period under the LTIP were as follows:

 

 

Wolverine exceeded maximum EPS performance and achieved a TSR ranking of fourth in its Peer Group, resulting in a performance level payout equal to 162.5%. Based on the achievement of the TSR and EPS long-term goals, the named executive officers received the following payments under the LTIP for the 2006-2008 performance period:

 

 

    Fiscal 2008 LTIP Opportunities.

 

The Compensation Committee established the bonus opportunities and the performance criteria for the 2008-2010 performance cycle at the beginning of fiscal 2008. The target bonus opportunity is based on job responsibilities and ability to affect EPS and add shareholder value. For the 2008-2010 performance cycle, the award targets for the named executive officers were as follows:

 

 

Similar to the prior two performance periods, the Compensation Committee established performance goals for the 2008-2010 period based 50% on aggregate Earnings Per Share (EPS) over the three-year period and 50% by reference to TSR compared to Wolverine’s peer group. The performance objectives and performance level payouts for the 2008-2010 performance period relative to TSR are the same as those for the prior two performance periods. The EPS performance goals for the performance period reflect a range of aggregate EPS, before the effect of acquisitions, divestitures, accounting changes, restructuring or other special charges or extraordinary items, from a threshold of $5.52 to a maximum goal of $6.42.

 

    Fiscal 2009 LTIP Plan Design.

 

Wolverine has historically provided cash-based incentive bonus programs to certain executives based on Wolverine’s achievement of pre-determined performance goals over a three-year period. For the 2009-2011 performance period, the Compensation Committee determined to offer equity-based incentives under the three-year bonus program rather than cash-based incentives. Under the equity-based incentive program, shares of restricted Wolverine common stock were granted at the start of the performance period to Wolverine’s named executive officers. Instead of receiving a cash payment at the end of the 2009-2011 performance period based on Wolverine’s performance during the period, restrictions on these shares will lapse if, and only to the extent that, Wolverine meets certain

performance criteria for the period. In addition to meeting the performance criteria, the restrictions on the performance shares will only lapse if the executive continues to be employed by Wolverine at the time the restrictions would otherwise lapse, except in limited circumstances such as death, disability or retirement. Any remaining performance shares with respect to which the restrictions do not lapse will be forfeited. The Compensation Committee made this change to equity-based LTIP awards to further align management and shareholder interests.

 

The awards for the 2009-2011 performance period were granted in February 2009 pursuant to performance share award agreements under Wolverine’s Amended and Restated Stock Incentive Plan of 2005. The pre-determined performance goals for the 2009-2011 performance period are based on cumulative earnings per share and cumulative business value added (BVA), weighted 65% and 35%, respectively. BVA is a measure of economic value based on net after-tax operating income and asset utilization. A determination of the number of shares, if any, upon which the restrictions will lapse is scheduled to be made in February 2012.

 

    Equity-Based Incentive Plans

 

Wolverine generally grants restricted stock and stock options (including incentive stock options) to its named executive officers on an annual basis. These awards are designed to:

 

 

The Compensation Committee believes that stock ownership by management is beneficial to stockholders and stock incentives have been granted by Wolverine to executives and other key employees pursuant to various equity-based plans for several decades. The Compensation Committee administers all aspects of these plans and determines the amount of and terms applicable to any award under these plans. In additional to annual grants, the Compensation Committee may consider special grants to executives in connection with a new hire or promotion.

 

In determining the number of equity awards to be awarded to executives in fiscal 2008, the Compensation Committee took into consideration the executive’s level of responsibility and, with respect to the Chief Executive Officer and Chief Financial Officer positions, compensation practices of the companies within the Peer Group. As a general practice, both the number of shares and options granted and their proportion relative to the total number of shares and options granted under the plan in a fiscal year increase in some proportion to increases in each executive’s responsibilities. A named executive officer’s position and responsibilities are the primary factors that determine the number of equity awards granted to a named executive officer in the annual grant. Accordingly, the Chief Executive Officer generally receives more stock options and restricted stock than the other named executive officers. The Compensation Committee also considers the recommendations of management (except for awards to the Chief Executive Officer), the individual performance of the executive and the number of shares previously awarded to the executive.

 

Equity grants to named executive officers were targeted at approximately the following percentages of their respective annualized base salary: Mr. Grady: 60%; Mr. Gulis: 105%; Mr. Krueger: 115%; Ms. Linton: 80%; Mr. Ottenwess: 60%; and Mr. Zwiers: 80%. As Mr. Grimes commenced employment after the annual equity award grant, he received the same number of stock option and restricted stock awards granted to other executives with similar positions within Wolverine. The different levels of equity compensation reflect the level of responsibility and ability of an individual to impact Wolverine’s performance and stock price.

 

The number of stock option and restricted stock awards granted to named executive officers in fiscal 2008 are shown in the “Grants of Plan Based Awards” table on page 27. For fiscal 2008, approximately 60% of the value of the named executive officers’ total annual equity award was granted in the form of restricted stock and approximately 40% was granted in the form of stock options. The Compensation Committee has reviewed the mix of restricted stock and stock options and believes the mix is appropriate based on the retentive nature of restricted stock and the incentive nature of stock options. Due to the strong retentive nature of restricted stock, considering the extended vesting schedule, the value of equity award grants is weighted slightly more heavily toward restricted stock grants. Restrictions lapse with respect to 25% of the shares granted on the third anniversary of the date of grant, with restrictions lapsing on an additional 25% on the fourth anniversary. Restrictions on the final 50% of a restricted award do not lapse until the fifth anniversary of the date of grant. This schedule encourages retention

and long-term investment in Wolverine by participating executives.

 

The Compensation Committee also views the grant of stock options as having a retentive element because 1/3 of each option grant vests on each of the first three anniversaries of the date of grant. The Compensation Committee views stock options primarily as an incentive for the named executive officers to increase stockholder value and drive increased share prices.

 

Stock options vest and the restrictions on shares of restricted stock lapse upon a change in control of Wolverine. Change in control includes certain changes in the composition of the board of directors, certain acquisitions of 20% of Wolverine’s common stock and other specified reorganizations, mergers, consolidations, liquidations, dissolutions or disposition of substantial assets.

 

The Compensation Committee also maintains stock ownership guidelines that apply to all executive management, including the named executive officers. The ownership guidelines require, within certain time periods, ownership by the named executive officers of shares of Wolverine common stock with a value equal to the following amounts: two times base salary (Messrs. Grady, Grimes, Ottenwess and Zwiers and Ms. Linton) and five times base salary (Mr. Krueger). The Compensation Committee believes that these ownership guidelines bolster the goal of aligning management’s interests with stockholders’ interests under Wolverine’s restricted stock plans by requiring continued levels of ownership of Wolverine stock even after restrictions on the sale of stock lapse. Wolverine’s policy does not allow hedging by Wolverine officers.

 

Wolverine generally awards stock options and restricted stock in February of each year at the Compensation Committee’s regularly scheduled meeting. Scheduling decisions are made without regard to anticipated earnings or other major announcements by Wolverine. The exercise price of stock options is the fair market value of Wolverine’s common stock on the grant date. The fair market value is the closing price of our common stock on the grant date. When the Compensation Committee approves a special grant outside the annual-grant framework, such grants are made at a regularly scheduled meeting.

 

    Retirement Plans

 

The named executive officers participate in Wolverine’s qualified pension plan and 401(k) savings plan (including potential company matching) covering most salaried domestic employees. Certain named executive officers also participate in a supplemental executive retirement plan. The Compensation Committee believes that, through vesting and participation requirements and increased value based on years of service, Wolverine’s retirement plans encourage long-term commitment by Wolverine’s executives and assist Wolverine in attracting and retaining talented executives. For a description of the benefits under Wolverine’s qualified pension plan and SERP see the “Pension Benefits” table and the discussion thereafter.

 

Other Benefits

 

The named executive officers participate in Wolverine’s medical and dental plans and are provided with life and disability insurance. In addition, Wolverine provides some basic tax and estate planning services for the named executive officers.

 

Mr. Grimes’ 2008 compensation includes amounts relating to relocation costs that were paid and/or reimbursed by Wolverine in connection with Mr. Grimes’ relocation to Michigan after being hired by Wolverine in May 2008.

 

The Impact of Accounting and Tax Treatments on Compensation

 

Section 162(m) of the Internal Revenue Code provides that publicly held companies may not deduct compensation paid to the Chief Executive Officer and the three next highly-paid executive officers (other than the Chief Financial Officer) in excess of $1,000,000 annually, with certain exceptions for qualified “performance-based” compensation. Wolverine has obtained stockholder approval of the Annual Bonus Plan, the LTIP, and its stock incentive plans, which are intended to permit certain amounts payable under these plans to qualify as “performance-based” compensation for purposes of Section 162(m). Incentives under these plans, other than restricted stock awards, were not included in the $1,000,000 limit for purposes of calculating Wolverine’s deduction for compensation paid to its executive officers. Wolverine does not require all of its compensation programs to be fully deductible under Section 162(m) because Wolverine believes it is important to preserve flexibility in administering compensation programs in a manner designed to promote varying corporate goals. Certain compensation paid by Wolverine may not qualify as performance-based compensation that is excluded from the limitation on deductibility.

Post-Employment Compensation

 

All named executive officers who are currently employed by Wolverine are parties to an Executive Severance Agreement that provides for certain payments and benefits upon termination of employment after a change of control of Wolverine.

 

Under their respective Executive Severance Agreements, the named executive officers who are currently employed by Wolverine are eligible to receive compensation if their employment is terminated within two (Messrs. Grady, Grimes, Ottenwess and Zwiers and Ms. Linton) or three (Mr. Krueger) years following a change in control of Wolverine. The Compensation Committee believes that this “double trigger” requirement (change in control plus termination of employment rather than just a change in control) for triggering the payment of benefits is appropriate because the executive is not materially harmed by a change in control if there is no termination of employment.

 

The Executive Severance Agreements are intended to provide stability in management during the transition period accompanying a change in control by providing significant retention incentives for executives to remain with Wolverine during the period following a change in control.

 

No payment will be made under the Severance Agreement if:

 

 

The executive has no requirement to mitigate the payments made under the Executive Severance Agreement by seeking employment, but the compensation to be paid during the fourth and later months after termination will be reduced to the extent of any compensation earned by the officer during the applicable period.

 

Mr. Krueger also has a Separation Agreement that provides for certain payments and benefits to be paid upon termination of his employment by Wolverine other than for “cause” or voluntarily by him for “good reason.” These benefits are described in the Potential Payments Upon Termination or Change in Control section of this Proxy Statement.

 

In addition to benefits provided under the Executive Severance Agreement, named executive officers may also be eligible to receive certain payments and benefits upon termination of employment or in connection with a change in control under Wolverine’s retirement plans or equity plans. You will find information on benefits payable to each named executive officer and the specific elements comprising the payment under the Executive Severance Agreements and other retirement and equity plans of Wolverine in the Potential Payments Upon Termination or Change in Control section of this Proxy Statement.

 

 

 

 

Summary Compensation Table

																										Change in
																										Pension
																										Value and
																										Nonqualified
																						Non-Equity				Deferred
										Bonus				Stock				Option				Incentive Plan				Compensation				All other
Name and Principal						Salary				(1)(2)				Awards				Awards				Compensation				Earnings(5)				Compensation				Total
Position		Year				(1)($)				($)				(3)($)				(3)($)				(4)($)				($)				(6)($)				($)
Blake W. Krueger,			2008				728,269				117,980				588,493				348,518				1,144,545				537,240				11,592				3,476,637
CEO and President			2007				646,539				104,739				580,364				304,289				831,345				389,885				11,592				2,868,753
			2006				480,000				64,800				479,772				181,959				656,815				237,730				11,342				2,112,418
Donald T. Grimes, Senior Vice President, CFO, Treasurer and Chief Accounting Officer(7)			2008				222,115				20,990				18,825				21,761				156,322				11,392	(8)			138,943				590,348
Kenneth A. Grady,			2008				243,962				18,297				35,802				42,495				154,575				10,749				8,035				513,915
Secretary and			2007				236,058				15,934				17,303				18,704				112,370				12,568	(8)			37,641				450,578
General Counsel(9)
Pamela L. Linton, Senior Vice President, Human Resources(10)			2008				282,308				22,867				71,648				27,120				170,301				39,409	(8)			7,750				621,403
James D. Zwiers,			2008				283,462				50,512				79,134				63,196				179,259				10,896				10,395				676,854
Senior Vice President			2007				242,115				20,000				65,217				33,200				101,350				18,162				10,106				490,150
			2006				221,346				14,941				58,780				13,029				152,514				25,826				9,585				496,021
Stephen L. Gulis, Jr.,			2008				225,880				24,395				337,939				175,309				313,101				—				8,723				1,085,347
Former Exec. Vice			2007				382,115				41,268				456,598				213,560				410,720				69,739				9,696				1,583,696
President, President of			2006				367,404				39,680				302,836				69,160				458,530				204,881				9,446				1,451,937
Global Operations(11)
Nicholas P. Ottenwess,			2008				249,423				16,836				73,208				57,880				186,071				8,239				10,093				601,750
Senior Vice President —			2007				233,462				15,759				69,824				33,200				157,011				15,855				9,888				534,999
Operations, Outdoor			2006				225,269				15,206				79,398				13,029				176,064				53,534				9,638				572,138
Group(12)

 

 

 

										Total Non-Equity
		LTIP Payout				2008 Annual Bonus				Incentive Plan
Name		(2006-2008)				Plan Payout				Compensation
Blake W. Krueger		$	502,344			$	642,201			$	1,144,545
Donald T. Grimes			42,067				114,255				156,322
Kenneth A. Grady			64,938				89,637				154,575
Pamela L. Linton			45,829				124,472				170,301
James D. Zwiers			101,146				78,113				179,259
Stephen L. Gulis, Jr.			202,995				110,106				313,101
Nicholas P. Ottenwess			95,896				90,175				186,071

 

 

Grants of Plan-Based Awards During Fiscal 2008

 

The following table provides information concerning each grant of an award made to the named executive officers in the last completed fiscal year.

 

All Other

All Other

Grant

Stock

Option

Date

Awards:

Awards:

Fair

Number

Number

Exercise

Value of

of

of

or Base

Stock

Estimated Possible Payouts

Shares

Securities

Price of

and

Under Non-Equity Incentive Plan Awards(1)

of Stock

Underlying

Option

Option

Grant

Approval

Threshold

Target

Maximum

or Units

Options

Awards

Awards

Name

Award Type

Date

Date

($)

($)

($)

(2)(#)

(3)(#)

(4)($/Sh)

(5)($)

Blake W. Krueger

Annual Bonus

2/6/2008

2/6/2008

174,785

349,569

742,834

FY08-FY10 LTIP

2/6/2008

2/6/2008

219,827

439,654

879,308

Stock Option

2/6/2008

2/6/2008

60,000

25.05

335,736

Restricted Stock

2/6/2008

2/6/2008

20,000

501,000

Donald T. Grimes

Annual Bonus

5/27/2008

4/16/2008

31,096

62,192

132,158

FY08-FY10 LTIP

5/27/2008

4/16/2008

57,873

115,747

231,494

Stock Option

5/27/2008

4/16/2008

16,000

28.28

107,819

Restricted Stock

5/27/2008

4/16/2008

5,500

155,540

Kenneth A. Grady

Annual Bonus

2/6/2008

2/6/2008

24,396

48,792

103,684

FY08-FY10 LTIP

2/6/2008

2/6/2008

30,623

61,247

122,494

Stock Option

2/6/2008

2/6/2008

10,000

25.05

55,956

Restricted Stock

2/6/2008

2/6/2008

3,600

90,180

Pamela L. Linton

Annual Bonus

2/6/2008

2/6/2008

33,877

67,754

143,977

FY08-FY10 LTIP

2/6/2008

2/6/2008

43,315

86,631

173,262

Stock Option

2/6/2008

2/6/2008

16,000

25.05

89,930

Restricted Stock

2/6/2008

2/6/2008

5,500

137,375

James D. Zwiers

Annual Bonus

2/6/2008

2/6/2008

34,015

68,031

144,566

FY08-FY10 LTIP

2/6/2008

2/6/2008

42,673

85,346

170,692

Stock Option

2/6/2008

2/6/2008

16,000

25.05

89,930

Restricted Stock

2/6/2008

2/6/2008

5,500

137,375

Stephen L. Gulis, Jr.

Annual Bonus(6)

2/6/2008

2/6/2008

67,200

134,400

285,600

FY08-FY10 LTIP(7)

2/6/2008

2/6/2008

84,000

168,000

336,000

Stock Option

2/6/2008

2/6/2008

31,000

25.05

173,464

Restricted Stock

2/6/2008

2/6/2008

11,000

275,550

Nicholas P. Ottenwess

Annual Bonus

2/6/2008

2/6/2008

24,942

49,885

106,005

FY08-FY10 LTIP

2/6/2008

2/6/2008

31,226

62,452

124,904

Stock Option

2/6/2008

2/6/2008

10,000

25.05

55,956

Restricted Stock

2/6/2008

2/6/2008

3,600

90,180

 

 

Outstanding Equity Awards at Fiscal Year-End

 

The following table provides information concerning unexercised options, stock awards that have not vested and equity incentive plan awards for each named executive officer outstanding as of January 3, 2009.