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CHASE CORPORATION
Long Term Incentive Plan
Award Design and Grant Process
Fiscal Year Ending August 31, 2007
Key Provisions
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- Long term incentive: performance shares
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- Eligibility: key executives and others
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- Performance measures: Earnings Before Tax (EBT) as approved by the Board of Directors
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- Vesting: August 31, 2009
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- Performance measurement period: September 1, 2006 through August 31, 2007
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- Grant date: first day of measurement period
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- Stock price for award: closing price for last trading day prior to grant date ($16.75)
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- Threshold: the point at which an award is earned (80% of target). Between threshold and target the award increases on a pro-rata basis.
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- Stretch area: performance in excess of target awarded at a higher rate (150% for 120% achievement) with no cap.
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- Termination provisions:
Termination Event | Vesting | Payment in Shares | ||
---|---|---|---|---|
Retirement | Pro-rated | Paid as scheduled | ||
Voluntary | All shares forfeit | No payment | ||
Without cause | Pro-rated | Paid as scheduled | ||
With cause | All shares forfeit | No payment | ||
Upon change of control | Acceleration at target | Paid at change of control | ||
Death or disability | Pro-rated | Paid as scheduled |
Example:
Grant 1000 performance shares
Stock price (8/31/06) is $16.75
Threshold is 80% of target
Stretch area pays out pro-rata at rate of 150% for 120% achievement.
Performance | EBT | Payout % of Target | Vesting Shares | |||
---|---|---|---|---|---|---|
Threshold | 80% of Target | 50 | % | 500 | ||
Target | 100% of Target | 100 | % | 1000 | ||
Stretch | 120% of Target | 150 | % | 1500 | ||
Recommended Award Levels @ Target for FY 2007 | ||||||
Peter R. Chase | 26,730 shares | |||||
Adam P. Chase | 7,563 shares | |||||
Terry M. Jones | 6,142 shares | |||||
Kenneth L. Dumas | 3,880 shares | |||||
44,315 total shares |
Pre-tax expense at target is 44,315 @ $16.75 = $742,276 spread over 3 years.
Participant | Annual Salary | % Salary | Target Award | Shares @ 100% | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Peter R Chase President & CEO | $ | 447,720 | 100 | % | $ | 447,720 | 26,730 | |||
Adam P Chase | $ | 178,000 | 50 | % | $ | 89,000 | 5313 ×5/12 = 2214 | |||
VP & COO | $ | 192,000 | 80 | % | $ | 153,600 | 9170 ×7/12 =5349 | |||
7563 | ||||||||||
Terry M Jones | $ | 178,000 | 50 | % | $ | 89,000 | 5313 ×5/12 = 2214 | |||
VP & CMO | $ | 188,000 | 60 | % | $ | 112,800 | 6734 ×7/12 =3928 | |||
6142 | ||||||||||
Kenneth L Dumas | $ | 120,000 | 25 | % | $ | 30,000 | 1791 ×5/12 = 746 | |||
Treasurer & CFO | $ | 150,000 | 60 | % | $ | 90,000 | 5373 ×7/12 =3134 | |||
3880 |
Share price is $16.75.
Salaries are as planned for promotional increases.
Award opportunities are set annually and the plan is subject to the approval of the Compensation and Management Development (C&MD) Committee and may be modified from time-to-time.
FY 2007 Schedule
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- 9/06 Goals and awards proposed by management for 2007
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- 9/06 C&MD Committee reviews and approves 2006 vesting and 2007 plan
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- 9/07 Management presents assessment of goal achievement and 2008 proposal
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- 9/07 C&MD Committee approves 2007 vesting and 2008 goals/awards
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- 8/09 Vested 2007 shares are released to participant