EXHIBIT 10.30
SUMMARY OF 2006 EXECUTIVE COMPENSATION PLAN
The Company’s 2006 Executive Compensation Plan, as approved by the Compensation Committee of the Board of Directors is substantially consistent with the 2005 Plan and consists of cash bonuses and equity incentives. With the guidance of a compensation consultant, the Plan was derived from third-party compensation survey data for comparable companies and executive positions and is based upon performance targets and payments tied to a percentage of base pay. The key elements of the Plan include:
Bonus Incentive Compensation:
| • | The Plan provides for target bonus amounts for each executive officer, using a percentage of his or her base pay derived from third-party compensation survey data for comparable companies and executive positions. |
| • | The total bonus is comprised of three major components: |
- Executive’s personal qualitative performance appraisal | 20% of target | |
- Company’s quantitative financial performance | 40% of target | |
- Executive’s achievement of strategic goals | 40% of target | |
| • | The qualitative personal performance appraisal is paid annually based upon the executive officer’s accomplishment of qualitative goals that are established by the executive officer’s manager or by the Compensation Committee in the case of the Chairman and CEO. |
| • | The plan provides for a graduated scale of payment for the portion of the bonus that is based on the Company’s quantitative financial performance, so that an executive officer may earn no quantitative bonus, a fraction of his or her target, or up to 200% of the quantitative part of the target, depending upon the financial performance of the Company and, for those in a position with responsibility for certain parts of the Company’s financial operating results, performance for those results. |
| • | For the achievement of strategic goals component of the bonus, the potential amount to be earned is entirely funded by the financial performance of the Company, as described in the preceding paragraph. The amount earned by the executive officer is based upon the executive officer’s performance against strategic goals that are approved by the Compensation Committee. |
| • | Quantitative financial performance bonuses are based upon a combination of earnings and revenue achievement against targets, for the Company as a whole for all executives, except the general managers. The general manager’s quantitative financial performance bonuses are based solely on a combination of certain earnings and revenue achievements against targets for each general manager’s financial operating results for which they are responsible. Results are generally weighted more heavily on earnings than revenue. Non-cash adjustments and certain extraordinary items, as approved by the Compensation Committee, are excluded from earnings for purposes of making these bonus determinations. |
For the first three fiscal quarters of 2006, the applicable bonus payable for the quantitative financial performance with respect to each of these quarter’s results will be paid following the completion of the quarter. The applicable bonus payable with respect to the fourth quarter and year-end quantitative financial performance, as well as the executive’s qualitative personal performance appraisal and achievement of strategic goals, will be approved by the Compensation Committee and paid following the end of the Company’s fiscal year.
The following table sets forth the 2006 salary and bonus, assuming achievement of 100% of the target based on the foregoing criteria, for each of the Company’s named executive officers (as defined in Item 402(a)(3) of Regulation S-K):
Name of Executive Officer | 2006 Base Salary | Cash Bonus (Assuming Achievement of 100% of Target) | ||||
Paul J. Tobin | $ | 226,800 | $ | 113,400 | ||
E. Y. Snowden | $ | 384,300 | $ | 269,010 | ||
Karen A. Walker | $ | 244,524 | $ | 110,036 | ||
William Wessman | $ | 242,740 | $ | 109,233 | ||
Fritz von Mering | $ | 243,885 | $ | 109,748 | ||
Thomas Erskine | $ | 203,775 | $ | 71,321 | ||
Ersin Galioglu | $ | 175,725 | $ | 61,504 | ||
James J. Anderson | $ | 183,750 | $ | 64,313 | ||
Equity Incentive Compensation:
In determining the equity incentives for the named executive officers, the Compensation Committee considers numerous factors such as (i) the individual’s job responsibilities, (ii) the individual’s performance, including the expected contribution of the executive officer to the Company’s goals, (iii) the Company’s long-term needs and goals, including attracting and retaining key management personnel, (iv) the Company’s competitive position, which includes using third-party compensation survey data for executive positions at comparable companies, and (v) consultation from an independent outside consultant. To the extent determined to be appropriate, the Compensation Committee also considers general economic conditions and the historic compensation levels of the individual.
The stock option grants to each executive officer vest in three equal installments over a three-year period commencing on the first anniversary of the date of grant.
The following option grants to executives will be made at the closing price on January 12, 2006:
Name | 2006 Plan Stock Option Grants | |
Paul Tobin | 36,000 | |
E. Y. Snowden | 72,000 | |
Frederick von Mering | 33,000 | |
William Wessman | 30,000 | |
Karen A. Walker | 33,000 | |
James Anderson | 17,100 | |
Ersin Galioglu | 20,900 | |
Thomas Erskine | 15,200 |