Exhibit 10.19
FY’2006 Executive Incentive Plan
2006
Executive Incentive Plan
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June 22, 2005
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| The FY’2006 Executive Incentive Plan (EIP) provides an opportunity for executives of Cintas to share in the company’s success. Year-end bonus awards are paid if performance measures are met or exceeded. Awards are tied directly to the annual performance of Cintas and its divisions. |
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| Please note that the EIP is not just an individual incentive plan but rather, the recognition of both individual and organizational success. |
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| Every executive will have at least 50% of their targeted incentive bonus based on the relevant Corporate measure (profit as a % of sales, % of revenue growth or EPS growth. As such, we all “succeed or fail as One Team”. |
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| This plan applies to all Cintas Officers. |
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| This Plan year is effective from June 1, 2005 until the end of our fiscal year, May 31, 2006 and it supersedes all prior EIP or officer compensation plans. Cintas reserves the right to amend and/or adjust this plan based on the strategic needs of our business. Communication to our participating partners will be made in a timely fashion. |
Section B |
| Plan Design / Measures, & Objectives |
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| The FY’2006 EIP introduces the concept of “plan mix”. Each participating officer will share in the success of Cintas based on three (3) different compensation vehicles; base salary, incentive bonuses, and long term incentives (i.e. stock and stock options). |
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| Operations Officers will be eligible for cash incentive bonuses tied to the following; a business unit percent of Profit as a % of Sales objective and a business unit percent of Revenue Growth objective. These objectives will be linked to the Operations Officers’ individual level of responsibility. Additionally, Operations Officers will be eligible for long term incentives (LTI) based on the achievement of the combination of % of Sales Growth and Profit as a % of Sales in their areas of responsibility (Cintas Rule 35 calculation) and Cintas Earnings per Share (EPS) Growth. |
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| Staff Officers will be eligible for cash incentive bonuses tied to both a Cintas EPS Growth, and the Individual Goals linked to the Staff Officer’s individual area of responsibility. Additionally, Staff Officers will be eligible for long term incentives (LTI) based the same formula as their annual cash incentive bonus. |
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| For All Officers covered by the FY’2006 EIP, an officer could earn 0% up to a maximum of 200% of the cash bonus award depending on their overall performance in their two cash incentive bonus objectives. Additionally, depending on the results of the two LTI objectives, an officer could earn 0% LTI up to a maximum of 200% of the LTI award if that performance target is achieved. |
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| The “target incentive bonus” is the total cash incentive amount earned at the target objectives. Total Targeted Cash (TTC) represents an individuals base salary plus targeted cash incentives. Target bonus percentages may vary by position/level. |
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| For each measure, after the planned threshold is achieved, pay-out for that measure begins. If the “target” level is achieved, 100% of the bonus amount for that measure is earned, and if you achieve the level of maximum payout, 200% of the targeted award is earned. |
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| The following charts describe the Basis of Measures, Objectives, and Payout Schedules for Corporate Staff and Division Officers Annual Bonus and LTI Awards. |
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| Calculation of Bonus Payments |
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| Bonus calculations will be made using year-end actual results, subject to adjustment at the discretion of the CEO to exclude items that are not operational and therefore do not reflect the year’s performance against objectives, such as accounting principle changes or revenue from an acquisition that was not in the business plan. (See Section E for more detail). |
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| In addition, any automatic payroll deductions elected by the partners (e.g. 401K, or company loan repayments as the CEO deems necessary, etc) will be deducted from their bonus. |
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| Partners who receive an overpayment of their award are responsible for reimbursing Cintas the amount of the overpayment, except where prohibited by law |
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| No cash advances will be paid against EIP awards. |
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| Cash payments are treated as ordinary income, or according to local legislation, and are subject to withholding for all applicable taxes. |
| Transfers/New Hires/Terminations/Part Time Partners |
| Other Terms |
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FY’2006 Executive Incentive Plan
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