Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
(e) Adoption of Compensatory Plan.
On March 18, 2019, the Compensation Committee (the “Compensation Committee”) of the Board of Directors of Capital Senior Living Corporation (the “Company”) approved the Company’s 2019 Executive Incentive Compensation Plan (the “Plan”). The Plan provides performance bonus opportunities to the Company’s President and Chief Executive Officer (“CEO”), Executive Vice President and Chief Financial Officer (“CFO”), Senior Vice President, Secretary and General Counsel (“GC”), Senior Vice President, Human Resources (“SVP-HR”), and Senior Vice President, Chief Revenue Officer (“SVP-CRO”) (collectively, the “Participants”), based upon the Company’s achievement of three corporate goals and such Participant’s achievement of certain individual goals established by the Compensation Committee for the year ending December 31, 2019.
Pursuant to the Plan, the CEO, CFO, GC,SVP-HR, andSVP-CRO are eligible to receive a target cash performance bonus equal to 110%, 70%, 50%, 40%, and 40%, respectively, of their base salaries for 2019 as follows:
| | • | | First, 30% of the target cash bonus under the Plan is based on the Company’s achievement of a Cash Flow From Operations (“CFFO”) per outstanding share target for 2019. Achievement of the target level of CFFO per share will result in the CEO, CFO, GC,SVP-HR, andSVP-CRO receiving a bonus equal to 33%, 21%, 15%, 12%, and 12%, respectively, of their base salaries for 2019. |
| | • | | Second, 20% of the target cash bonus under the Plan is based on the Company’s achievement of an Adjusted EBITDAR target for 2019. Achievement of the target level of Adjusted EBITDAR will result in the CEO, CFO, GC,SVP-HR, andSVP-CRO receiving a bonus equal to 22%, 14%, 10%, 8%, and 8%, respectively, of their base salaries for 2019. |
| | • | | Third, 30% of the target cash bonus under the Plan is based on the Company’s achievement of a same-store facility net operating income (“Facility NOI”) target for 2019. Achievement of the target level of Facility NOI will result in the CEO, CFO, GC,SVP-HR, andSVP-CRO receiving a bonus equal to 33%, 21%, 15%, 12%, and 12%, respectively, of their base salaries for 2019. |
| | • | | Fourth, 20% of the target cash bonus under the Plan is based on the Participant’s achievement of certain individual goals for 2019, which are within such Participant’s sphere of influence, as determined in the discretion of the Compensation Committee. Achievement of the individual goals by the CEO, CFO, GC,SVP-HR, andSVP-CRO will result in such Participant receiving a bonus equal to 22%, 14%, 10%, 8%, and 8%, respectively, of their base salaries for 2019. |
With respect to the three corporate goals set forth above, achievement of 95% of the performance target will result in 50% of the portion of the award subject to such performance target being earned by the Participants, and if this threshold level is attained but the target level is not attained, the earned portion of the award subject to such performance target will be calculated using linear interpolation between 50% and 100% based upon the actual performance results. Achievement of 105% of the performance target will result in 150% of the portion of the award subject to such performance target being earned by the Participants, and if this maximum level is not attained but the target level is exceeded, the earned portion of the award subject to such performance target will be calculated using linear interpolation between 100% and 150% based upon the actual performance results.
With respect to the individual goals set forth above, the Compensation Committee may award between 0% and 150% of target cash bonus to each Participant based upon such Participant’s achievement of his or her individual goals, as determined in the discretion of the Compensation Committee.
