Edgar Filing: PERFORMANCE FOOD GROUP CO

Performance Food Group Company

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K/A

(Amendment No. 1)

(Mark One)


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 29, 2007


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No.: 0-22192

PERFORMANCE FOOD GROUP COMPANY

(Exact Name Of Registrant As Specified In Its Charter)


Tennessee		54-0402940

(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

12500 West Creek Parkway
Richmond, Virginia		23238

(Address of Principal		(Zip Code)
Executive Offices)

Registrant’s telephone number, including area code:
(804) 484-7700

Securities registered pursuant to Section 12(b) of the Act:


Title of each class		Name of each exchange on which registered

Common Stock, $0.01 par value per share		Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. þ Yes o No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes þ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


þ Large accelerated filer					o Accelerated filer
o Non-accelerated filer (Do not check if a smaller reporting company)					o Smaller Reporting Company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). o Yes þ No

The aggregate market value of the voting stock held by non-affiliates of the registrant on June 29, 2007 was $1,130,669,870. The market value calculation was determined using the closing sale price of the registrant’s common stock on June 29, 2007, as reported by the Nasdaq Stock Market. Shares of common stock outstanding on February 20, 2008 were 35,581,403.

EXPLANATORY NOTE

Performance Food Group Company. (the “Company”) is filing this Amendment No. 1 to Form 10-K to amend its Form 10-K for the year ended December 29, 2007, filed with the Securities and Exchange Commission on February 26, 2008 (“Original Filing”) to include the information omitted from Part III, Item 11 of the Original Filing as the Company has not yet scheduled an annual meeting of shareholders and may not hold such a meeting if the Company’s proposed merger with an indirect subsidiary of an entity controlled by private investment funds affiliated with The Blackstone Group, with a minority interest held by a private investment fund affiliated with Wellspring Capital Management LLC is consummated.

As a result of this amendment, the Company is also filing as exhibits to this Amendment No. 1 to Form 10-K portions of the certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Because no financial statements are contained within this Amendment No. 1 to Form 10-K the Company is not including certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Except for the amendments described above, this Amendment No. 1 to Form 10-K does not modify or update other disclosures in, or exhibits to, the Original Filing.

TABLE OF CONTENTS



Part III

Item 11. Executive Compensation			3

Part IV

Item 15. Exhibits, Financial Statement Schedules			40
Ex-31.3 Section 302 Certification of the CEO
Ex-31.4 Section 302 Certification of the CFO

Item 11. Executive Compensation.

EXECUTIVE AND DIRECTOR COMPENSATION

Compensation Discussion and Analysis

Overview of Compensation Program and Role of the Compensation Committee

The Compensation Committee of the Board of Directors has the responsibility for approving compensation policies designed to ensure that management is rewarded appropriately for its contributions to Company growth and profitability and that the executive officer compensation strategy supports the Company’s objectives and shareholder interests. The Compensation Committee seeks to enable the Company to attract and retain high quality leadership and to assure that the executive officers of the Company are compensated in a manner consistent with shareholder interests, the policies adopted by the Compensation Committee, internal equity considerations, competitive practice and the requirements of appropriate regulatory bodies. All of the members of the Compensation Committee are independent directors, and none of these persons has at any time been an officer or employee of the Company or any of its subsidiaries.

Goals of the Company’s Compensation Policies

A principal goal of the Compensation Committee is to compensate employees fairly for services performed. To that end, the Company has historically established a combination of base salary with a mix of short and long- term incentives designed to recognize outstanding efforts by rewarding performance at or above established goals. The Compensation Committee also seeks to provide an appropriate balance between cash and equity awards to increase executive officers’ loyalty to the Company and align executive officers’ interests with those of the shareholders - with the ultimate goal of increasing shareholder value over the long term.

Role of Executive Officers in Compensation Decisions

The Compensation Committee makes all compensation decisions for the Company’s executive officers (which includes all the named executive officers identified in the Summary Compensation Table below) and makes all equity awards (based upon recommendations received from the executive officers) to other officers and employees of the Company. Decisions regarding the non-equity compensation of other key employees is made by the Chief Executive Officer and reviewed with the Compensation Committee. The Compensation Committee annually evaluates the Chief Executive Officer’s performance and discusses in detail with the Chief Executive Officer his review of the other executive officers’ performance.

Establishing Compensation for Executive Officers

With these goals in mind, the Compensation Committee has designed a program to provide executive officers annual and long-term cash and non-cash compensation, a significant portion of which is designed to reward the executive officers for achieving goals established by the Compensation Committee. The Compensation Committee at times has engaged Mercer Human Resource Consulting, an outside human resources consulting firm, to review from time to time the total compensation program for the Company’s executive officers. Mercer provides the Compensation Committee with relevant market and other data and alternatives to consider when making compensation decisions. In making its compensation decisions, the Company from time to time compares the elements of its compensation programs against a group of comparable companies in the same or similar businesses, generally foodservice distribution or other distribution businesses. The companies comprising the peer group most recently utilized for these comparison purposes were:


Arrow Electronics Inc.		Owens & Minor Inc.
Avent Inc.		Henry Schein Inc.
C.H. Robinson Worldwide Inc.		Supervalu Inc.
Genuine Parts Co.		Synnex Corp.
Grainger (W.W.) Inc.		Sysco Corp.
Ingram Micro Inc.		Tech Data Corp.
CNF Inc.		United Stationers Inc.
Nash Finch Inc.		YRC Worldwide Inc.

The Compensation Committee has in the past used both information provided by Mercer and recommendations from the Company’s Chief Executive Officer to determine the appropriate level and mix of total compensation, including incentive compensation. In setting the 2007 compensation for the named executive officers, the Compensation Committee did not consult with Mercer or review the compensation programs of the above peer group, but rather based their decision on information previously provided by Mercer and the recommendation of the Chief Executive Officer.

Components of 2007 Compensation for Executive Officers

For the fiscal year ended December 29, 2007, the principal components of compensation for executive officers were:

Base Salary. The Company provides executive officers with their base salary to compensate them for services provided during the year. The Compensation Committee generally establishes base salaries for the executive officers on an annual basis at a meeting of the Compensation Committee held in the first quarter of the year. In general, base salaries are targeted to be near or just below the mid-point of the peer group, which the Company believes reflects its focus on linking compensation more closely to performance. In setting the 2007 compensation, the Compensation Committee considered not only the market data previously provided by Mercer in establishing base salary but also the executive officer’s performance and the level of base salary relative to other executive officers. Taking all of these factors into account, the Committee approved base salaries for our named executive officers in the following amounts:


Name	2007 Base Salary⁽¹⁾		2006 Base Salary⁽²⁾
Steven L. Spinner	$	655,000	$	600,000
Thomas Hoffman	$	360,000	$	340,000
John D. Austin	$	353,000	$	340,000
Joseph Paterak, Jr.	$	302,000	$	293,000
Joseph J. Traficanti	$	270,000	$	240,000


(1)		Effective March 1, 2007.

(2)		Effective March 1, 2006. Mr. Spinner’s base salary became effective October 1, 2006, when he began serving as the Company’s Chief Executive Officer.

Performance-based cash incentive compensation. To closely align an executive officer’s compensation to the Company’s goals, the Compensation Committee believes that a substantial portion of an executive officer’s compensation should be incentive-based. Therefore, the Compensation Committee has implemented a cash incentive program that provides executive officers with the opportunity to earn cash incentive compensation for the achievement of annual goals as well as for the achievement of goals set for an intermediate period of two years. After consulting with the Company’s executive officers regarding the Company’s expected performance and operating goals for coming years, the Compensation Committee first established an earnings per diluted share

threshold that the Company was required to achieve in order for a named executive officer to be eligible to receive incentive payments, which payments were further conditioned on achieving specified individual goals. The earnings per diluted share threshold to be eligible to receive a cash incentive award was $1.28 for the one-year period ended December 29, 2007. The Compensation Committee also established a series of quantitative and qualitative performance measures for cash incentive compensation for each executive officer which, if achieved, would allow the executive officer to earn a specified portion of his or her cash incentive compensation opportunity. Given these targeted cash incentive compensation amounts, in general an executive officer would have the opportunity to earn cash incentive compensation equal to an additional percentage, which varies by officer, of his or her salary upon the attainment of all the performance objectives set forth for that individual. Those amounts could be increased upon the achievement of performance which substantially exceeds the performance goals. Information with respect to the amount of cash incentive plan compensation for the one- and two-year periods ended December 29, 2007 is set forth in Note 3 to the Summary Compensation Table.

One-Year Period Ended December 29, 2007

Set forth below are the specific quantitative and qualitative performance measures applicable to each named executive officer and used in determining the amount of cash incentive compensation payable to the named executive officer for the one-year period ended December 29, 2007.

Steven L. Spinner


				Cash
				Incentive
				Payout as a
				Percentage
				of Base
Performance measure	Applicable Target			Salary
Earnings per diluted share excluding, in the discretion of the Compensation Committee, the impact of acquisitions, write-offs from facility restructurings and acts of God as well as unusual one-time charges or earnings	$	1.33			0	%
	$	1.38			16	%
	$	1.42			32	%
	$	1.48			48	%

Internal sales	$	5,922,000,000			0	%
	$	6,111,000,000			6	%
	$	6,300,000,000			16	%
	$	6,426,000,000			26	%

Operating margin from continuing operations, including the impact of stock compensation expense, but excluding the impact of any acquisitions		1.31	%		0	%
		1.36	%		7	%
		1.40	%		11	%
		1.44	%		16	%

Return on capital from continuing operations including restricted share expense, but excluding the impact of any acquisitions		6.00	%		0	%
		6.16	%		5	%
		6.26	%		9	%
		6.36	%		13	%

Ensure satisfactory completion of key 2007 project-based objectives	Plan in place but behind schedule somewhat				7	%
	Plan in place and on schedule				12	%
	Plan in place and ahead of schedule				17	%

Thomas Hoffman


				Cash
				Incentive
				Payout as a
				Percentage of
Performance Measure	Applicable Target			Base Salary
Earnings before interest and taxes for the Company’s Customized segment	$	31,000,000			0	%
	$	31,400,000			7	%
	$	31,996,628			14	%
	$	32,800,000			21	%

Cumulative revenue from the Company’s Customized segment	$	2,495,000,000			0	%
	$	2,560,000,000			6	%
	$	2,619,574,000			12	%
	$	2,900,000,000			18	%

Earnings per diluted share excluding, in the discretion of the Compensation Committee, the impact of acquisitions, write-offs from facility restructurings and acts of God as well as unusual one-time charges or earnings	$	1.33			0	%
	$	1.38			6	%
	$	1.42			12	%
	$	1.48			18	%

Customized segment’s cumulative return on capital		16.7	%		0	%
		17.3	%		6	%
		17.8	%		12	%
		18.5	%		18	%

Customized segment’s earnings before interest and taxes as a percentage of the Customized segment’s net sales		1.20	%		0	%
		1.22	%		4	%
		1.24	%		8	%
		1.26	%		12	%

Assurance of adequate control environment	No material weaknesses				0	%
	No significant deficiencies				3	%

Service of $200 million of new customer business net of any loss	By November 15, 2007				0	%
	By August 30, 2007				5	%
	By June 30, 2007				10	%
	By April 30, 2007				15	%

Identified a possible successor chief executive officer for the Customized segment	By August 30, 2007				6	%
	By June 30, 2007				12	%
	By April 30, 2007				15	%

John D. Austin


				Cash
				Incentive
				Payout as a
				Percentage of
Performance Measure	Applicable Target			Base Salary
Earnings per diluted share excluding, in the discretion of the Compensation Committee, the impact of acquisitions, write-offs from facility restructurings and acts of God as well as unusual one-time charges or earnings	$	1.33			0	%
	$	1.38			12	%
	$	1.42			25	%
	$	1.48			38	%

Return on capital from continuing operations including restricted share expense, but excluding the impact of any acquisitions		6.00	%		0	%
		6.16	%		11	%
		6.26	%		25	%
		6.36	%		37	%

Ensure effective internal control environment	100% compliance with no significant deficiencies				3	%

Attainment of consolidated earned income objectives, net of programs moved from affiliated subsidiary of the Company	$	159,877,000			0	%
	$	163,684,000			4	%
	$	176,731,000			10	%
	$	185,568,000			14	%


Development of shared services model for cash application, earned income and accounts payable	Working model rolled out by the second quarter of 2008				3	%
	Working model rolled out by the first quarter of 2008				7	%
	One operating company converted				8	%

Joseph Paterak


				Cash
				Incentive
				Payout as a
				Percentage of
Performance Measure	Applicable Target			Base Salary
Broadline segment’s earnings before interest and taxes, excluding the impact of any acquisitions	$	87,300,000			0	%
	$	88,200,000			12	%
	$	89,361,000			25	%
	$	91,300,000			35	%


Broadline segment’s earnings before interest and taxes (excluding the impact of any acquisitions) as a percentage of Broadline segment’s net sales		2.25	%		0	%


				Cash
				Incentive
				Payout as a
				Percentage of
Performance Measure	Applicable Target			Base Salary
		2.35	%		5	%
		2.40	%		8	%
		2.48	%		17	%

Total street sales	$	0			0	%
	$	1,650,000,000			3	%
	$	1,710,934,000			7	%
	$	1,800,000,000			11	%

Attainment of consolidated earned income objectives, net of programs moved from affiliated subsidiary of the Company	$	159,877,000			0	%
	$	163,684,000			7	%
	$	176,731,000			18	%
	$	185,568,000			21	%

Return on capital from continuing operations including restricted share expense, but excluding the impact of any acquisitions		6.00	%		0	%
		6.16	%		7	%
		6.26	%		11	%
		6.36	%		17	%

Earnings per diluted share excluding, in the discretion of the Compensation Committee, the impact of acquisitions, write-offs from facility restructurings and acts of God as well as unusual one-time charges or earnings	$	1.33			0	%
	$	1.38			4	%
	$	1.42			11	%
	$	1.48			15	%

Joseph J. Traficanti


				Cash
				Incentive
				Payout as a
				Percentage of
Performance Measure	Applicable Target			Base Salary
Attainment of consolidated earned income objectives, net of programs moved from affiliated subsidiary of the Company	$	159,877,000			0	%
	$	163,684,000			4	%
	$	176,731,000			7	%
	$	185,568,000			13.5	%

Individual objectives (5% reduction in the Company’s consolidated legal costs, standardized repository of MUA contracts that are greater than $5 million annually, implement a new code of conduct and perform audit and standardization of supplier contracts)	subjective				3	%
	subjective				6	%
	subjective				9	%

Ensure effective internal control environment	No significant deficiencies and 100% compliance				3	%

Return on capital from continuing operations including restricted share expense, but excluding the impact of any acquisitions		6.00	%		0	%


				Cash
				Incentive
				Payout as a
				Percentage of
Performance Measure	Applicable Target			Base Salary
		6.16	%		9	%
		6.26	%		17	%
		6.36	%		22	%

Earnings per diluted share excluding, the discretion of the Compensation Committee, the impact of acquisitions, write-offs from facility restructurings and acts of God as well as unusual one-time charges or earnings	$	1.33			0	%
	$	1.38			9	%
	$	1.42			20	%
	$	1.48			27	%

Two-year period ended December 29, 2007

For the two-year period ended December 29, 2007, each of the named executive officers other than Messrs. Spinner, Hoffman and Paterak, could earn cash incentive compensation based on the Company’s achieving certain earnings per diluted share levels within a targeted range established by the Compensation Committee in February 2006, which range was established based on growth assumptions over the earnings per diluted share estimates for the one-year period ended December 30, 2006 then available to the Compensation Committee. The targets for these named executive officers ranged from a low of $1.48 per diluted share (which would have resulted in no cash incentive payment) to a high of $1.69 per diluted share (which would have resulted in a cash incentive payment equal to 35% of the named executive officer’s base salary paid for 2007), with $1.60 per diluted share (and a cash incentive payment equal to 25% of the named executive officer’s base salary paid for 2007), established as the expected level of performance. These earnings per diluted share targets were established by the Compensation Committee without regard to the impact of stock compensation expense on the Company’s earnings per diluted share and the Compensation Committee determined that measurement of achievement of these targets for this purpose should also exclude the impact of stock compensation expense. Payments tied to the Company’s earnings per diluted share could be positively or negatively adjusted for actual performance within the established ranges. When comparing the Company’s 2007 actual performance to these targets, the Compensation Committee excluded the impact of stock compensation expense in accordance with its original criteria.

For the two-year period ended December 29, 2007, the cash incentive compensation opportunity for Mr. Spinner was impacted by his promotion on October 1, 2006 to chief executive officer of the Company. For the 15-month period that Mr. Spinner served as chief executive officer of the Company, his cash incentive payment opportunity was based on the Company’s targeted consolidated earnings per diluted share described above. For the nine-month period that he served as the chief executive officer of the Company’s broadline operating segment, his cash incentive payment opportunity was based one-half on the Company’s consolidated earnings per diluted share targets described above (with a 50% reduction in the payout targets described above) and one-half on the Company’s broadline operating segment achieving targeted earnings before interest and taxes ranging from a low of $101,000,000 (which would have resulted in no cash incentive payment) to a high of $115,000,000 (which would have resulted in a cash incentive payment equal to 17.5% of his base salary paid for 2007), with $108,500,000 (and a cash incentive payment equal to 12.5% of his base salary paid for 2007), established as the expected level of performance. Payments tied to the Company’s broadline operating segment’s earnings before interest and taxes could be positively or negatively adjusted for actual performance within the established ranges.

For the two-year period ended December 29, 2007, the cash incentive compensation opportunity for Mr. Paterak was impacted by his promotion on October 1, 2006 to senior vice president of the Company’s broadline operations. For the 15-month period that Mr. Paterak served as senior vice president of the Company’s broadline operations, his cash incentive payment opportunity was based one-half on the Company’s consolidated earnings per diluted share targets described above (with a 50% reduction in the payout targets described above) and one-half on the Company’s broadline operating segment achieving targeted earnings before interest and taxes ranging from a low of $101,000,000 (which would have resulted in no cash incentive payment) to a high of $115,000,000 (which would have resulted in a cash incentive payment equal to 17.5% of his base salary paid for 2007), with $108,500,000 (and a cash incentive payment equal to 12.5% of his base salary paid for 2007), established as the

expected level of performance. Payments tied to the Company’s broadline operating segment’s earnings before interest and taxes could be positively or negatively adjusted for actual performance within the established ranges.

For the two-year period ended December 29, 2007, Mr. Hoffman’s cash incentive compensation opportunity was based one-third on the consolidated earnings per diluted share targets described above (with a 66.6% reduction to the payout targets described above) and two-thirds on the Company’s customized operating segment achieving targeted earnings before interest and taxes ranging from a low of $30,000,000 (which would have resulted in no cash incentive payment) to a high of $34,000,000 (which would have resulted in a cash incentive payment equal to 23.3% of his base salary for 2007), with $32,200,000 (and a payment equal to 16.7% of his base salary paid for 2007), established as the expected level of performance. Payments tied to the Company’s customized operating segment’s earnings before interest and taxes could be positively or negatively adjusted for actual performance within the established ranges.

There were no individual performance goals for the two-year period ended December 29, 2007 for any of the named executive officers.

Long-term equity incentive compensation. The Company’s equity-based awards program encourages executive officers to focus on long-term Company performance and more closely aligns the interest of executive officers with shareholders by increasing their stake in the Company. All equity-based awards are made pursuant to the provisions of incentive plans approved by the Company’s shareholders. Equity-based awards for 2007 included a combination of stock-settled stock appreciation rights and grants of restricted stock. The Company values stock–settled stock appreciation rights by calculating their value at the date of grant using the Hull-White lattice binomial model and the value of restricted stock by calculating its aggregate market value as of the date of grant.

In March 2007, the Compensation Committee began awarding stock-settled stock appreciation rights to the Company’s named executive officers in lieu of stock options. The Compensation Committee made this change because it believed that it would be more cost effective and efficient to award stock-settled stock appreciation rights with a cap on their ultimate value. Like an option, a stock appreciation right is designed to reward increases in the Company’s share price over the exercise price. However, with a stock appreciation right, the Compensation Committee can impose a cap on the aggregate value awarded under the right. In the case of the awards granted in March 2007, the right will not have any value in excess of a $60 per share increase in the Company’s share price over the grant price. The Compensation Committee believed that this award will still have a meaningful motivating effect for the award recipients and at the same time significantly reduce the cost impact of the award on the Company’s net income. The Compensation Committee also considered that awarding stock appreciation rights, which will be settled in shares of the Company’s common stock, will offer increased administrative ease since in some cases no cash is required to be exchanged upon exercise and because these stock appreciation rights will generally be less dilutive than options when exercised since shares are issued for the net value of the award.

The Compensation Committee generally establishes a four-year cliff-vesting period for both stock-settled stock appreciation rights and restricted stock to encourage executive officers’ loyalty and continued service to the Company. In addition, the stock-settled stock appreciation rights provide for a maximum appreciation of $60 per right. During the 2005 and 2006 fiscal years, the Compensation Committee determined that it was appropriate to offer a group of key employees including executive officers the choice of the precise percentage (within a specified range) of his or her equity-based award which would consist of options on the one hand or restricted stock on the other. In making the choice, the executive officer was generally offered the opportunity to select one share of restricted stock or three stock options. In connection with the March 2007 grants, the Compensation Committee eliminated the ability of the named executive officer to exercise discretion in selecting the mix of awards that he or she could receive.

During March 2007, stock-settled stock appreciation rights and restricted shares of the Company’s common stock were granted to our named executive officers, pursuant to the Company’s 2003 Equity Incentive Plan, as follows:


	Stock-Settled Stock
	Appreciation Rights Subject to				Number of Time-Based
Name	Time-Based Vesting		Grant Price⁽¹⁾		Vesting Restricted Shares
Steven L. Spinner		37,800	$	29.46		9,000
Thomas Hoffman		10,500	$	29.46		3,500
John D. Austin		14,700	$	29.46		3,500
Joseph Paterak, Jr.		9,450	$	29.46		2,250
Joseph J. Traficanti		8,400	$	29.46		2,000


(1)		The grant price per share is equal to the fair market value of the Company’s common stock on the date of the grant.

Policies with respect to making equity-based awards. When awarding annual grants related to long-term equity incentive compensation, the Compensation Committee takes into consideration the Company’s results of operations for the prior fiscal year in relation to internally prepared forecasts for that year; the contributions and individual performance of award recipients in comparison to previously established goals and objectives, including operational initiatives; the contributions of award recipients to the creation of long-term shareholder value; the existing level of equity ownership of the award recipient; and overall levels of compensation for each individual. The Compensation Committee also considers the recommendations of members of senior management with respect to the mix of restricted shares and stock appreciation rights to be awarded in connection with the annual grant. The operational initiatives considered by the Compensation Committee when awarding equity-based incentives in March 2007 included increasing street sales as a percentage of broadline sales, strengthening internal controls and implementing a new technology platform.

It is the policy of the Compensation Committee to award eligible employees including named executive officers equity-based awards one time a year. That award is generally made during the first quarter or early in the second quarter of the year after the Compensation Committee has had the opportunity to review full year results for the prior year and consider the Company’s anticipated results for the succeeding year. Prior to this time, the Compensation Committee has also given the executive officer the opportunity to express his or her interest in the mix of restricted shares and options to be received. The Compensation Committee may make an exception to this general policy in the event that a new executive officer is hired or an executive officer receives a promotion. With respect to the date of awards, the Compensation Committee strives to ensure the grants are made following the public release of important information such as year-end results or anticipated results for the succeeding year.

Retirement Plans

The Company believes that an important aspect of attracting and retaining qualified individuals to serve as executive officers involves providing methods for those individuals to save for retirement. Some of those methods are available to the Company’s employees generally, and some are available to a smaller group recognizing the limitations on amounts that may be saved under the Company’s qualified plans included in the Employee Savings and Stock Ownership Plan.

Employee Savings and Stock Ownership Plan. All employees of the Company who complete sixty days of service are eligible to participate in this plan. This plan is a qualified plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan has two components: an Employee Stock Ownership Plan (the “ESOP”) and a Defined Contribution Plan (the “401(k) Plan”). In addition, this plan provides for a discretionary profit sharing component pursuant to which the Company may allocate contributions to participants that meet certain eligibility requirements. All shares of Company common stock held by the 401(k) Plan and subject to the ESOP component were allocated to participants prior to 2006 and no new participants in the ESOP component of the 401(k) Plan can be added. With respect to the 401(k) component of the 401(k) Plan, participants may elect to contribute specified percentages of their salary subject to an overall maximum of $11,216 in 2007. In 2007, the Company matched 200% of the first 1% of participant contributions, 100% of the next 1% of participant contributions and 50% of the next 2% of participant contributions. Also in 2008, the Company approved and recorded a discretionary profit-sharing allocation in the amount of $664 to each participant in that component of the 401(k) Plan based on the Company’s consolidated pre-tax profits during the 2007 fiscal year. Participants may direct their contributions to one or more of twenty-four investment options available to them.

Supplemental Executive Retirement Plan. In 2003, the Board of Directors, acting on the recommendation of the Compensation Committee, adopted the Supplemental Executive Retirement Plan (the “SERP”) in which

certain key employees of the Company, including the executive officers (other than Mr. Sledd, who voluntarily elected not to participate), could participate as determined by the Compensation Committee. Under the terms of the SERP as in effect prior to 2006, the Compensation Committee authorized the Company to contribute 5% of each participant’s salary and bonus to a participant’s SERP account and for every 1% that the Company achieves over 95% of a performance target established by the Compensation Committee during a fiscal year, an additional 1% of the participant’s salary and bonus. The maximum contribution that can be made for any participant for any fiscal year is 20% of the participant’s salary and bonus. Contributions made prior to 2006 vest upon six years of service. Contributions in and after 2006 vest upon ten years of service. On November 17, 2006, the Company’s Board of Directors approved certain amendments to the SERP which:

	•		change the contribution formula for contributions credited to a participant’s account for the period beginning on or after December 31, 2006 to eliminate the 5% base contribution and enhance the performance contribution under the SERP so that (1) a 2% performance contribution would be earned for each 1% of targeted earnings before interest and taxes achieved between 95% and 100% of the targeted amount, and (2) an additional 1% contribution would be earned for each 1% of targeted earnings before interest and taxes achieved in excess of 100% of the targeted amount, up to 110%;

	•		change the vesting schedule for contributions credited for periods beginning on or after December 31, 2006 such that 50% of such contributions vest after five years of service, with the remainder vesting 10% per year for each year of service thereafter; and

	•		change the timing of the payment of benefits under the Plan for participants who terminate participation or employment prior to retirement at age 65.

For the fiscal year ended December 29, 2007, the earnings before interest and taxes performance target established by the Compensation Committee was $89,428,000. More information with respect to the SERP is set forth on page 21 hereof.

Nonqualified Deferral of Compensation. The Company also affords key employees including executive officers an opportunity to save for retirement by electing to defer up to 100% of their cash compensation. The only direct compensatory aspect of this plan for the named executive officers is that participants in this plan are afforded the opportunity to select hypothetical investment alternatives tied to publicly available mutual funds as well as a fixed rate of return with an interest crediting rate of 7% currently. The amounts available for payment under this plan are increased or decreased as a result of new deferrals and the performance of these investment alternatives.

Certain Payments to Named Executive Officers upon Termination of Employment

The Company does not have in effect employment agreements with any of its named executive officers. However, pursuant to the Company’s Amended and Restated Senior Management Severance Plan, which is described in more detail on page 26, the Company provides severance benefits to executive officers who are terminated without cause based upon their length of service with the Company. In return for receiving such benefits, the former employee must agree to certain confidentiality, non-competition and non-solicitation provisions for the benefit of the Company as well as provide a general release to the Company.

The length of time that an executive officer would continue to receive his or her base salary under the Amended and Restated Senior Management Severance Plan is based on the person’s pay grade and length of service to the Company or any of its subsidiaries at the time of termination. The Compensation Committee has chosen to base the severance benefits on this formula rather than separately negotiated arrangements with each individual in an attempt to treat participants in the plan equitably based on their level of responsibility and years of service to the Company. In establishing the amount of the payments and the length of time that the payments will be made pursuant to this plan the Compensation Committee also took into account the need for these payments to be at competitive levels so that the Company is able to retain existing executive officers who are not a party to any employment agreement with the Company and to recruit experienced executives who may have concerns about giving up job security with their current employer and who also seek mitigation of the risk that the Company might terminate them without cause after they become employed without the protections of any employment agreement. When establishing the amount and length of these payments, the Compensation Committee also believed that the size and duration of the payments were important to ensuring that the terminated executive complied with the post-termination covenants related to confidentiality, non-competition and non-solicitation.

In addition, the Company has in effect for its named executive officers “Change in Control” Agreements. Those agreements are “double-trigger agreements,” which generally provide that if an employee is terminated without cause or resigns for good reason within a specified period of time following a change in control, then the employee will receive 2.99 times his or her highest base salary, either before or after the change in control and 2.99 times his or her average bonus for the three fiscal years prior to the change in control or after the change in control. In addition, the Change in Control Agreement provides for the payment to the executive of an amount necessary to reimburse the executive on an after-tax basis for any excise tax payable under Section 4999 of the Internal Revenue Code in connection with the change in control. Provisions in the Amended and Restated Senior Management Severance Plan provide that payments under that plan will not be duplicated by payments under the Change in Control Agreements.

In establishing the multiples of base salary and bonus that a terminated named executive officer would be entitled to receive following his or her termination after a change in control, the Compensation Committee considered the need to be able to competitively recruit and retain talented executive officers who often times seek protection against the possibility that they might be terminated without cause or be forced to resign for good reason following a change in control. When establishing the multiples, the Compensation Committee also sought to provide benefits at a level that it believed would provide appropriate compensation for the named executive officer in the event of consummating a transaction that, although possibly detrimental to the individual’s employment prospects with the resulting company, would be beneficial to the Company’s shareholders and for the limitations on the ability of the named executive officer to compete with the resulting company, and the resulting benefits to the Company as a result of these limitations.

Given the fact that the Company does not have employment agreements with its named executive officers, the Compensation Committee believes that the protections afforded in the Amended and Restated Senior Management Severance Plan and the Change in Control Agreements are reasonable and are an important element in retaining executive officers.

Compensation Decisions for 2008

On February 28, 2008, the Compensation Committee established base salaries for the named executive officers and criteria for the one-year and two-year cash incentive periods ending December 27, 2008 and January 2, 2010, respectively. When establishing these base salaries and setting these performance criteria, the Compensation Committee was limited by the terms of the agreement and plan of merger that the Company entered into with VISTAR Corporation on January 18, 2008, which requires that the Company approve base salary increases and establish cash incentive performance criteria and payout opportunities consistent with past practices. In addition, because the terms of the merger agreement prohibit the Compensation Committee from granting equity-based incentives to the Company’s employees, including the named executive officers, no such awards have been granted to the named executive officers in 2008. In lieu of these awards on February 28, 2008, the Compensation Committee approved awards to employees that are not named executive officers and to Mr. Paterak, that provide for the payment of cash incentives to these employees in the event that the merger with VISTAR Corporation is consummated and the employee continues to be employed by the surviving corporation following consummation of the merger. These payments will be made 25% per year on the first four anniversaries of the closing of the merger, contingent upon continued employment, and will not be accelerated as a result of consummation of the merger. The total amount of these cash payments is $8.0 million, with Mr. Paterak’s award totaling $300,000.

The table below summarizes the current base salary levels for the named executive officers that were approved by the Compensation Committee on February 28, 2008 and were effective as of March 1, 2008.


	2008 Base
Name	Salary
Steven L. Spinner	$	681,200
Thomas Hoffman	$	374,400
John D. Austin	$	367,120
Joseph Paterak, Jr.	$	314,080
Joseph J. Traficanti	$	280,800

In connection with the pending merger of the Company and VISTAR Corporation, the Compensation Committee approved the payment of cash bonuses totaling $1.0 million to certain of the Company’s employees on February 28, 2008. Payments under this plan were made on March 6, 2008 to employees identified by the Compensation Committee in recognition of these employees’ services provided in connection with the negotiation of the merger agreement and consummation of the merger, including assisting VISTAR’s efforts related to financing the transaction.

The amounts paid to the Company’s named executive officers were as follows:


Steven L. Spinner	$	315,000
John D. Austin	$	185,000
Joseph J. Traficanti	$	100,000

Tax and Accounting Implications

Deductibility of Executive Compensation. As part of its role, the Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue code, which provides that the Company may not deduct compensation of more than $1,000,000 that is paid to certain individuals. The Company believes that compensation paid under the incentive plans are generally fully deductible for federal income tax purposes. However, in certain situations, the Compensation Committee may approve compensation that will not meet these requirements in order to ensure competitive levels of total compensation for its executive officers.

Nonqualified Deferred Compensation. On October 22, 2004, the American Jobs Creation Act of 2004 was signed into law, changing the tax rules applicable to nonqualified deferred compensation arrangements. While the final regulations have not become effective yet, the Company believes it is operating in good faith compliance with the statutory provisions which were effective January 1, 2005.

Accounting for Stock-Based Compensation. Beginning on January 1, 2006, the Company began accounting for stock-based payments including its Stock Option Program, Long-Term Stock Grant Program, Restricted Stock Program and Stock Award Program in accordance with the requirements of FASB Statement 123(R).

Compensation Committee Report

The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Amendment No. 1 to the Company’s Annual Report on Form 10-K.


Charles E. Adair		Mary C. Doswell		Fred C. Goad, Jr.		Timothy M. Graven		John E. Stokely

The foregoing report of the Compensation Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Amendment No. 1 to the Company’s Annual Report on Form 10-K into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such acts.

2007 SUMMARY COMPENSATION TABLE

The table below summarizes the compensation paid or accrued by the Company during the fiscal years ended December 30, 2006 and December 29, 2007 for (i) the Company’s Chief Executive Officer; (ii) the Company’s Chief Financial Officer; and (iii) the three highest paid executive officers of the Company whose total compensation exceeded $100,000 for fiscal 2007 (collectively, the “named executive officers”). The Company has not entered into any employment agreements with any of the named executive officers. When setting total compensation for each of the named executive officers, the Compensation Committee reviews tally sheets which show the executive’s current compensation, including equity and non-equity based compensation.

The named executive officers were not entitled to receive payments which would be characterized as “Bonus” payments for the fiscal year ended December 29, 2007. Amounts listed under the column titled “Non-Equity Incentive Plan Compensation”, were determined by the Compensation Committee at its February 28, 2008 meeting and, to the extent not deferred by the executive, were paid out shortly thereafter.

Based on the fair value of equity awards granted to named executive officers in fiscal 2007 and the base salary of the named executive officers, “Salary” accounted for approximately 36% of the total compensation of the named executive officers, cash incentive compensation accounted for approximately 34% of the total compensation of the named executive officers, equity incentive compensation accounted for approximately 24% of the total compensation of the named executive officers and benefits accounted for approximately 6% of the total compensation of named executive officers.


													Change in Pension
													Value and
											Non-Equity		Nonqualified
							Stock		Option		Incentive Plan		Deferred
Name and							Awards		Awards		Compensation		Compensation		All Other
Principal			Salary		Bonus		(1)(2)		(1)(2)		(3)		Earnings(4)		Compensation
Position	Year		($)		($)		($)		($)		($)		($)		(5) ($)		Total ($)
Steven L. Spinner – Chief Executive Officer (6)		2007	$	644,846		—	$	197,896	$	390,244	$	681,179	$	94,559	$	97,504	$	2,106,228
		2006		496,847		—		130,139		166,628		88,170		10,328		37,776		929,888

Thomas Hoffman – Senior Vice President; President and Chief Executive Officer – Customized		2007		356,154		—		90,904		122,721		354,253		46,353		54,060		1,024,445
		2006		356,795		—		73,246		76,620		270,300		11,335		39,975		828,271

John D. Austin – Senior Vice President and Chief Financial Officer		2007		350,600		—		88,056		124,035		370,356		88,381		57,258		1,078,686
		2006		337,288		—		66,539		64,966		173,230		9,819		35,152		686,994

Joseph Paterak, Jr. – Senior Vice President Broadline Operations		2007		301,147		—		71,508		57,502		194,419		35,433		44,492		704,501
		2006		293,335		—		48,336		27,406		52,866		4,214		26,937		453,094

Joseph J. Traficanti – Senior Vice President and General Counsel		2007		264,462		—		67,866		39,976		223,397		22,966		44,790		663,457
		2006		234,577		—		44,913		13,272		99,120		10,634		9,238		411,754


1.		The amounts in the columns captioned “Stock Awards” and “Option Awards” reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 30, 2006, in accordance with FAS 123(R) of awards pursuant to the Company’s equity incentive plans and thus may include amounts from awards granted in and prior to 2007 or 2006, as the case may be. For a description of the assumptions used by the Company in valuing these awards for the fiscal years ended December 31, 2005, December 30, 2006 and December 29, 2007 please see “Note 16 – Stock Based Compensation” to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2007 filed with the Securities and Exchange Commission on February 26, 2008.

2.		In fiscal 2007, there were a total of 53,000 shares of restricted stock forfeited and 69,000 options that were cancelled for all equity award plans administered by the Company. In fiscal 2007, 5,700 stock appreciation rights were forfeited.


3.		Amounts for fiscal 2007 reflect those amounts earned for the two-year period ended December 29, 2007 pursuant to the Company’s 2006 Cash Incentive Plan and for the one-year period ended December 29, 2007 pursuant to the Company’s 2007 Cash Incentive Plan as follows:


Name	2-Year Period		1-Year Period		Total
Steven L. Spinner	$	98,238	$	582,941	$	681,179
Thomas Hoffman		99,603		254,650		354,253
John D. Austin		65,728		304,628		370,356
Joseph Paterak, Jr.		17,645		176,773		194,418
Joseph J. Traficanti		49,723		173,674		223,397


		For a description of both Company and individual performance criteria established under the Company’s 2006 and 2007 Cash Incentive Plans please see Compensation Discussion and Analysis above.

4.		Includes as set forth in the table below the change in the actuarial present value of each named executive officer’s account under the SERP between December 30, 2006 and December 29, 2007 and the above market earnings on amounts deferred by the named executive officers pursuant to the Company’s Executive Deferred Compensation Plan that are invested in the 7% fixed rate of return investment option under that plan. The change in actuarial present value under the SERP excludes contributions made in the first quarter of 2008 that related to 2007 performance.


			Above Market Earnings on
	Change in Actuarial Present Value		Executive Deferred
Named Executive Officer	Under SERP		Compensation Plan
Steven L. Spinner	$	92,776	$	1,783
Thomas Hoffman		41,321		5,032
John D. Austin		86,587		1,794
Joseph Paterak, Jr.		35,433		-0-
Joseph J. Traficanti		22,812		154


5.		Includes allocations by the Company to each named executive officer’s (except Mr. Traficanti, who is not eligible to participate) ESOP account of $418 for 2007. Allocations to the ESOP accounts are based on the closing price of the Company’s common stock on The Nasdaq Global Select Market of $27.10 at December 28, 2007 for fiscal 2007. Also includes contributions by the Company to each named executive officer’s 401(k) account in fiscal 2007 as follows: Mr. Spinner – $8,021; Mr. Hoffman — $9,000; Mr. Austin — $9,000; Mr. Paterak — $9,000; and Mr. Traficanti - $9,000. Also includes contributions by the Company to the account of each named executive officer pursuant to the SERP for fiscal 2007 as follows: Mr. Spinner — $88,401; Mr. Hoffman — $43,978; Mr. Austin — $47,176; Mr. Paterak — $34,410; and Mr. Traficanti - $35,126; and contributions of $664 for Mr. Spinner, Mr. Hoffman, Mr. Austin, Mr. Paterak, and Mr. Traficanti for fiscal 2007 pursuant to the profit sharing component of the Company’s 401(k) plan.

6.		Mr. Spinner served as President and Chief Operating Officer until October 1, 2006, and thereafter as President and Chief Executive Officer.

The following table summarizes certain information regarding grants of plan based awards, including stock appreciation rights, to the named executive officers during fiscal 2007.

2007 GRANTS OF PLAN-BASED AWARDS


												All Other
												Stock		All Other
												Awards:		Option
												Number		Awards:
			Estimated Possible Payouts Under						Estimated Future Payouts			of Shares		Number of		Exercise or		Grant Date
			Non-Equity Incentive Plan						Under Equity Incentive Plan			of Stock		Securities		Base Price of		Fair Value
			Awards(1)						Awards			or		Underlying		Option		of Stock
			Threshold		Target		Maximum		Threshold	Target	Maximum	Units(2)		Options(3)		Awards		and Option
Name	Grant Date		($)		($)		($)		(#)	(#)	(#)	(#)		(#)		($/Sh)(4)		Awards ($)
Steven L. Spinner		3/2/07											9,000					$	265,140
		3/2/07													37,800		29.46		515,970
		N/A		257,938		515,877		773,815											N/A
		N/A		-0-		161,212		225,696											N/A

Thomas Hoffman		3/2/07											3,500					$	103,110
		3/2/07													10,500		29.46		143,325
		N/A		142,462		284,923		427,385											N/A
		N/A		-0-		89,039		124,654											N/A

John D. Austin		3/2/07											3,500					$	103,110
		3/2/07													14,700		29.46		200,655
		N/A		105,180		234,902		350,600											N/A
		N/A		-0-		87,650		122,710											N/A

Joseph Paterak, Jr.		3/2/07											2,250					$	66,285
		3/2/07													9,450		29.46		128,993
		N/A		114,436		240,918		349,331											N/A
		N/A		-0-		47,054		65,876											N/A

Joseph J. Traficanti		3/2/07											2,000						58,920
		3/2/07													8,400		29.46		114,660
		N/A		66,116		132,231		198,347											N/A
		N/A		-0-		66,298		92,817											N/A


1.		Amounts present separately the possible payouts for the one-year and two-year incentive periods ended December 29, 2007. Actual amounts paid in March 2008 are reflected in the Summary Compensation Table.

2.		Reflects shares of restricted stock awarded to the named executive officer for which the forfeiture restrictions lapse on May 2, 2011, the fourth anniversary of the date of grant. The named executive officer will be allowed to vote the shares and receive dividends declared thereon, if any, in the same amounts as other shares of Common Stock issued by the Company prior to the forfeiture restrictions lapsing.

3.		Reflects stock-settled stock appreciation rights awarded to the named executive officer that vest on May 2, 2011, the fourth anniversary of the date of grant.

4.		The grant price for each stock-settled stock appreciation right award is equal to the closing sales price of the Company’s common stock on the Nasdaq Global Select Market on the date of grant.

The following table sets forth certain information with respect to outstanding equity awards at December 29, 2007:

OUTSTANDING EQUITY AWARDS AT 2007 FISCAL YEAR END


	Option Awards										Stock Awards
															Equity
															Incentive
						Equity									Plan
	Number					Incentive Plan									Awards:	Equity Incentive
	of		Number of			Awards:							Market		Number of	Plan Awards:
	Securities		Securities			Number of					Number of		Value of		Unearned	Market or Payout
	Underlying		Underlying			Securities					Shares or		Shares or		Shares, Units	Value of
	Unexercised		Unexercised			Underlying					Units of		Units of		or Other	Unearned Shares,
	Options		Options			Unexercised	Option				Stock That		Stock That		Rights That	Units or Other
	(#)		(#)			Unearned	Exercise		Option		Have Not		Have Not		Have Not	Rights That Have
	Exercisable		Unexercisable			Options	Price		Expiration		Vested(3)		Vested(4)		Vested	Not Vested
Name	(1)(2)		(2)			(#)	($)		Date		(#)		($)		(#)	($)
Steven L. Spinner		4,800					$	12.88		04/01/09		25,825	$	699,858
		600						12.97		05/05/09
		5,200						9.78		03/14/10
		7,250						28.48		05/02/11
		25,000						32.35		08/09/11
				25,000				32.35		08/09/11
		13,000						36.45		02/05/12
		2,000						34.40		08/22/12
		15,000						31.62		02/26/13
		15,000						34.18		03/30/14

				7,700				28.02		04/21/15
				8,250				31.25		04/10/16
				50,000				26.05		08/17/16
				37,800	(5)			29.46		03/02/17

Thomas Hoffman		4,500					$	28.48		05/02/11		9,450	$	256,095
		11,000						36.45		02/05/12
		3,500						28.48		05/02/11
		15,000						31.62		02/26/13
		15,000						34.18		03/30/14

				9,300				28.02		04/21/15
				14,400				31.25		04/10/16
				10,500	(5)			29.46		03/02/17

John D. Austin		7,766					$	12.88		04/01/09		10,934	$	296,311
		234						12.97		05/05/09
		9,000						9.78		03/14/10
		4,000						13.19		04/28/10
		6,250						28.48		05/02/11
		2,000						28.08		10/15/11
		11,000						36.45		02/05/12
		13,000						31.62		02/26/13
		15,000						34.18		03/30/14

				5,200				28.02		04/21/15
				15,377				31.25		04/10/16
				14,700	(5)			29.46		03/02/17

Joseph Paterak, Jr.		7,000					$	28.48		05/02/11		9,950	$	269,645
		5,000						36.45		02/05/12
		6,000						31.62		02/26/13
		8,000						34.18		03/30/14

				5,150				28.02		04/21/15
				3,000				31.25		04/10/16
				9,450	(5)			29.46		03/02/17

Joseph J. Traficanti		5,000					$	26.20		11/15/14		9,300	$	252,030

				1,500				28.02		04/21/15
				2,625				31.25		04/10/16
				8,400	(5)			29.46		03/02/17


1.		On February 22, 2005, the Compensation Committee voted to accelerate the vesting of certain unvested options, including options awarded to the named executive officers, which had exercise prices greater than $25.00, the closing price of the Company’s Common Stock on February 22, 2005.

2.		The options and stock-settled stock appreciation rights vest on the fourth anniversary of the ten year term.

3.		The forfeiture restrictions for each restricted stock award, which all have ten year terms, lapse on the fourth anniversary of the date of grant except for awards granted on March 15, 2005, for which 50% of the forfeiture restrictions lapse on the first anniversary of the date of grant, 25% lapse on the second anniversary of the date of grant and 25% lapse on the third anniversary of the date of grant.

4.		Market value is determined by multiplying the closing market price of the Company’s common stock at December 28, 2007 by the number of shares.

5.		Represents a stock-settled stock appreciation right with a cap on appreciation of $60 per share.

The following table sets forth certain information with respect to options exercised by the named executive officers in fiscal 2007 and shares of restricted stock for which forfeiture restrictions lapsed in fiscal 2007:

2007 OPTION EXERCISES AND STOCK VESTED TABLE


	Option Awards				Stock Awards
	Number of				Number of
	Shares				Shares
	Acquired		Value Realized		Acquired		Value Realized
	on Exercise		on Exercise⁽¹⁾		on Vesting		on Vesting⁽²⁾
Name	(#)		($)		(#)		($)
Steven L. Spinner		—		—		875		25,716
Thomas Hoffman		—		—		1,250		36,738
John D. Austin		—		—		625		18,369
Joseph Paterak, Jr.		14,800		274,195		—		—
Joseph J. Traficanti		—		—		—		—


1.		With respect to exercised stock options, value realized on exercise is determined by multiplying the number of shares of common stock issued upon exercise of stock options by the difference between the option exercise price and the trading price of the Company’s common stock at the time of exercise.

2.		With respect to vested restricted stock, value realized upon vesting is determined by multiplying the number of shares of restricted stock vesting by the closing price of the Company’s common stock on the vesting date.

Supplemental Executive Retirement Plan

In November 2003, the Board of Directors adopted the SERP in which certain key executives, including the named executive officers, could participate beginning in fiscal 2004, as determined by the Compensation Committee. Pursuant to the terms of the SERP, the Compensation Committee authorized the Company to contribute 5% of each participant’s salary and bonus to a participant’s SERP account and for every 1% that the Company achieves over 95% of a performance target established by the Compensation Committee during the fiscal year, an additional 1% of the participant’s salary and bonus will be added to such participant’s account. The maximum contribution that could be made for any participant for any fiscal year is 20% of the participant’s salary and bonus. Under the original terms of the SERP, as described above, a participant vested in his or her SERP account at a rate of 20% per year, beginning after the second year of service with the Company or any acquired company, and will be fully vested after six years of service, provided that the participant will vest in the entire account upon his or her death or upon a Change in Control (as defined in the SERP) or, if determined by the Compensation Committee, upon a Potential Change in Control (as defined in the SERP) of the Company. Under the original terms of the SERP, if a participant’s employment with the Company is terminated for Cause (as defined in the SERP) or if the participant becomes employed within one year following his or her termination of employment with an entity that is deemed to be in competition with this Company, a participant will forfeit his or her entire interest in the SERP. For 2006, the Company contributed 5% of each participant’s salary and bonus to the account of each participating executive, including the named executive officers. Account balances are credited with interest at an interest crediting rate of 8%.

In November 2006, the Compensation Committee recommended, and the Board of Directors approved, amendments to the SERP which:

	•		change the contribution formula for contributions credited to a participant’s account for the period beginning on or after December 31, 2006 to eliminate the 5% base contribution and enhance the performance contribution under the SERP so that (1) a 2% performance contribution would be earned for each 1% of targeted earnings before interest and taxes achieved between 95% and 100% of the targeted amount, and (2) an additional 1% contribution would be earned for each 1% of targeted earnings before interest and taxes achieved in excess of 100% of the targeted amount, up to 110%;

	•		change the vesting schedule for contributions credited for periods beginning on or after December 31, 2006 such that 50% of such contributions vest after five years of service, with the remainder vesting 10% per year for each year of service thereafter; and

	•		change the timing of the payment of benefits under the Plan for participants who terminate participation or employment prior to retirement at age 65.

Under the terms of the SERP, as amended, benefits are payable to a participant upon his or her early, normal or delayed retirement, in a lump sum on the later of sixty days following the January 1 following such retirement date or the first day of the seventh month following such retirement date. Payment of disability retirement benefits shall commence sixty days after the disability retirement date and must be made by the later of December 31 of the calendar year in which payment was scheduled or the 15^th day of the third month following the scheduled payment date. Payment of the pre-retirement death benefit shall commence sixty days after the participant’s death and must be made by the later of December 31 of the calendar year in which payment was scheduled or the 15^th day of the third month following the scheduled payment date. Payment of the vested portion of a participant who was removed from participation or who terminated employment prior to reaching his or her retirement date shall commence sixty days after what would have been the participant’s normal retirement date and must be made by the later of sixty days following the January 1 following what would have been the participant’s normal retirement date. If the participant is a key employee (as determined under Section 409A of the Code), any payments made on account of retirement or termination of employment may or may not be made earlier than the first day of the month following the six-month anniversary of such participant’s termination of employment or retirement.

The following table sets forth certain information with respect to the SERP:

2007 PENSION BENEFITS

Present Value of

Number of Years

Accumulated

Payments During Last

Credited Service

Benefit (1)(2)

Fiscal Year

Name

Plan Name

(#)

($)

(a)

(b)

(c)

(d)

(e)

Steven L. Spinner (3)