Exhibit 10.14
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JOHN WILEY & SONS, INC.
FY 1997 EXECUTIVE ANNUAL INCENTIVE PLAN
PLAN DOCUMENT
CONFIDENTIAL
MAY 1, 1996
CONTENTS
Section Subject Page
I. Definitions 2
II. Plan Objectives 3
III. Eligibility 3
IV. Performance Objectives and Measurement 3
V. Performance Evaluation 4
VI. Payouts 6
VII. Status Changes 6
VIII. Administration and Other Matters 6
I. DEFINITIONS
Following are definitions for words and phrases used in this
document. Unless the context clearly indicates otherwise,
these words and phrases are considered to be defined terms and
appear in this document in italicized print:
company
John Wiley & Sons, Inc.
plan
The company's FY (Fiscal Year) 1997 Executive Annual Incentive
Plan described in this document and any written amendments to
this document.
plan year
The twelve month period from May 1, 1996 to April 30, 1997.
executive compensation and development committee (ECDC)
The committee of the company's Board of Directors (Board)
responsible for reviewing executive compensation.
financial goals
A participant's objective to achieve specific financial
results for FY 1997, including interim revised financial
goals, if any, as approved and communicated in writing, as
described in Sections IV and V below.
financial results
Total company or division achievement against financial goals
set for FY 1997.
strategic milestone
A participant's objective to achieve specific results for FY
1997, including interim revised strategic milestones, if any,
as approved and communicated in writing, as described in
Sections IV and V below. Strategic milestones are leading
indicators of performance.
participant
Any person who is eligible to and is selected to participate
in the plan, as defined in Section III.
base salary
The participant's total amount of base salary, calculated as
follows: base salary as of June 24,1996, or the date of
hire, or promotion into the plan, if later, adjusted for any
increases or decreases during FY 1997, on a prorated basis and
adjusted for any amount of time the participant may not be in
the plan for reasons of hire, promotion, death, disability,
retirement and/or termination.
payout
Actual gross dollar amount paid to a participant under the
plan, if any, for achievement of financial goals and strategic
milestones, as further discussed in this plan.
target incentive percent
The percent applied to the participant's base salary to
determine the target incentive amount.
target incentive amount
The amount, if any, that a participant is eligible to receive
if a participant achieves 100% of his/her financial goals and
strategic milestones. The incentive for financial goals
should constitute at least 70% of the target incentive amount
for the participant.
performance levels
threshold
The minimum acceptable level of achievement of each
financial goal and strategic milestone. If threshold
performance is achieved against all financial goals and
strategic milestones, a participant may earn 50% of the
target incentive amount for which he/she is eligible.
target
Achievement in aggregate of target financial goals and
strategic milestones. Each individual financial goal and
strategic milestone is set at a level which is both
challenging and achievable.
outstanding
Superior achievement of financial goals and strategic
milestones, both in quality and scope, with limited time
and resources. If outstanding performance is achieved
against all financial goals and strategic milestones, the
maximum amount a participant may earn is 150% of the
target incentive amount.
payout factor
Percentage of financial goals and strategic milestones deemed
achieved, used to determine the payout for which a participant
is eligible.
II. PLAN OBJECTIVES
The purpose of the FY 1997 Executive Annual Incentive Plan is
to enable the company to reinforce and sustain a culture
devoted to excellent performance, emphasize performance at the
corporate and division levels, reward significant
contributions to the success of Wiley, and attract and retain
highly qualified executives.
III. ELIGIBILITY
The participant is selected by the President and CEO of the
company, from among those employees in key management
positions deemed able to make the most significant
contributions to the growth and profitability of the company,
with the approval of the ECDC. The President and CEO of the
company is a participant.
IV. PERFORMANCE OBJECTIVES AND MEASUREMENT
The plan employs two categories of objectives for performance
measurement: financial goals and strategic milestones. The
weighting of and between the two measures may vary, depending
upon the participant's position. Weighting is recommended by
the participant's manager and approved by the President and
CEO, if the President and CEO is not the participant's
manager.
A. Financial Goals
1. Financial goals for the company are determined near
the beginning of the plan year by the President and
CEO. The President and CEO's goals are reviewed and
approved by the Finance Committee of the Board and
ECDC, and approved by the Board.
2. Financial goals are set for the company as a whole
and for each division and may be revised in the
interim, as appropriate. The participant will be
given specific financial goals, based on an
appropriate mix of company and/or division
objectives.
3. Financial goals include defining levels of
performance (threshold, target and outstanding) and
the measures of each.
B. Strategic Milestones
1. Strategic milestones are non-financial individual
objectives over which the participant has a large
measure of control, which lead to, or are expected
to lead to improved performance for the company in
the future. Strategic milestones are determined
near the beginning of the plan year by the
participant, and approved by the participant's
manager, if the President and CEO is not the
participant's manager.
2. The strategic milestones for the President and CEO
are reviewed and approved by the Executive and
Policy Committee of the Board and by the Board.
3. The strategic milestones for the President and CEO
should be appropriately reflected in those of all
other employees at all levels. Each participant
collaborates with his/her manager in setting
strategic milestones. The strategic milestones may
be revised in the interim, as appropriate.
4. The determination of strategic milestones includes
defining a target level of performance and the
measure of such, and may include defining threshold
and outstanding levels of performance and the
measures of such.
V. PERFORMANCE EVALUATION
A. Financial Results
1. Actual financial results achieved by the company and
by each group and division will be calculated at the
end of the plan year, subject to adjustment for
audited results, and will be compared with
previously set financial goals.
2. Actual financial results will be reviewed by the
participant's manager and the President and CEO and
a payout factor determined. The payout factor is
based on a judgment of the relative importance of
financial results and the achievement compared to
the financial goals. This payout factor is subject
to the review and approval of the President and CEO.
The ECDC will evaluate the President and CEO's
financial results and will recommend to the Board
his/her financial results payout factor.
B. Strategic Milestones
1. Achievement of a participant's strategic milestones
will be determined at the end of the plan year by
comparing results achieved to previously set
objectives.
2. Each participant's manager will recommend a payout
factor for achievement of all strategic milestones
compared with the previously set objectives. In
determining the payout factor, the overall
performance on all strategic milestones will be
considered. This payout factor is subject to the
review and approval of the President and CEO, the
ECDC and the Board. The ECDC will recommend to the
Board for approval the payout factor for the
President and CEO's achievement of his/her strategic
milestones based on the Executive and Policy
Committee of the Board's evaluation of his/her
achievement compared with the previously set
objectives.
C. Award Determination
1. Financial goals, established for each participant,
may include one or more organizational level's
financial goals (e.g. company and division), and one
or more financial goal for a particular
organizational unit. At least threshold
performance, in aggregate, of a participant's
particular organizational level is necessary for the
participant to receive a payout for the particular
organizational level. However, once the overall
threshold is achieved, the non-achievement of any
one particular financial goal's target objective
does not preclude a payout for all the participant's
financial goals.
2. At least threshold performance of financial goals is
required of the participant's organizational level
for a payout of strategic milestones to be made. If
the participant is measured against more than one
organizational level, at least threshold performance
of financial goals, is required of the
organizational level which has the greatest percent
weighting of the organizational levels' target
incentive amount for a payout of strategic
milestones to be made. If the percent weighting of
the target incentive amount is equal for all the
organizational levels against which the participant
is measured, then at least threshold performance of
financial goals is required of all the participant's
organizational levels for a payout of strategic
milestones to be made.
3. Payout eligibility will be determined by calculating
the amount for achievement of financial goals and
strategic milestones and adding the two together, as
follows:
*************************************************************
EAIP PAYOUT ELIGIBILITY CALCULATION
FINANCIAL RESULTS PAYOUT AMOUNT
Base Salary X Target Incentive Percent
X Weighting of Financial Goals X Payout Factor
= Financial Goals Payout Eligibility
STRATEGIC MILESTONES PAYOUT AMOUNT
Base Salary X Target Incentive Percent
X Weighting of Strategic Milestones X Payout Factor
= Strategic Milestones Payout Eligibility
EAIP PAYOUT ELIGIBILITY
Financial Goals Payout Amount + Strategic Milestones Payout
Amount
= EAIP Payout Eligibility
**************************************************************
4. Notwithstanding anything to the contrary, the maximum
payout, if any, a participant may receive is 150% of the
target incentive amount.
5. The foregoing EAIP payout eligibility calculation is
intended to set forth general guidelines on how awards
are to be determined. The purpose of this plan is to
motivate the participant to perform in an outstanding
manner. The President and CEO has discretion under this
plan to take into consideration the contribution of the
participant, the participant's management of his/her
organizational unit and other relevant factors, positive
or negative, which impact the company's, the
participant's organizational unit(s), and the
participant's performance overall in determining whether
to recommend granting or denying an award, and the amount
of the award, if any. If the participant is the
President and CEO, such discretion is to be exercised by
the ECDC and the Board.
VI. PAYOUTS
Payouts will be made within 90 days after the end of the plan
year and will be based on audited financial results.
VII. STATUS CHANGES
A. In the event of a participant's death, disability,
retirement or leave of absence prior to payout from the
plan, the payout, if any, will be determined by the
President and CEO in his/her sole discretion, subject to
any approval of the ECDC in its sole discretion, subject
to any required Board approvals. If the participant is
the President and CEO, such approval is required by the
Board, in its sole discretion.
B. A participant who resigns, or whose employment is
terminated by the company, with or without cause, before
payout from the plan is distributed, will not receive a
payout. Exception to this provision shall be made only
with the approval of the ECDC, in its sole discretion,
subject to any required Board approvals. If the
participant is the President and CEO, such approval is
required by the Board in its sole discretion.
C. A participant who transfers between divisions of the
company, will have his/her payout prorated to the nearest
fiscal quarter for the time spent in each division, based
on the achievement of financial goals and strategic
milestones established for the position in each division,
and based upon a judgment of the participant's
contribution to the achievement of goals in each
position, including interim revisions, if appropriate.
D. A participant who is appointed to a position with a
different target incentive percent will have his/her
payout prorated to the nearest fiscal quarter for the
time spent in each position, based on the achievement of
financial goals and strategic milestones established for
each position.
E. A participant who is hired or promoted into an eligible
position during the plan year may receive a prorated
payout as determined by the President and CEO, in his/her
sole discretion, subject to the approval of the ECDC.
VIII. ADMINISTRATION AND OTHER MATTERS
A. The plan is effective for the plan year. It will
terminate, subject to payout, if any, in accordance with
and subject to the provisions of this plan unless renewed
by the company in writing in its sole discretion.
B. This plan will be administered by the President and CEO,
who will have authority to interpret and administer this
plan, including, without limitation, all questions
regarding eligibility and status of the participant,
subject to the approval of the ECDC required under this
plan or the by-laws of the company.
C. This plan may be withdrawn, amended or modified at any
time, and for any reason, in writing, in the company's
sole discretion.
D. The determination of an award and payout under this plan,
if any, is subject to the approval of the President and
CEO, the ECDC, and the Board in their sole discretion.
This plan does not confer upon any participant the right
to receive any payout, or payment of any kind whatsoever.
E. No participant shall have any vested rights under this
plan. This plan does not constitute a contract.
F. All deductions and other withholdings required by law
shall be made to the participant's payout, if any.