EXHIBIT 10.14
AIRGAS, INC.
FISCAL YEAR 2004 EXECUTIVE BONUS PLAN
PURPOSE OF THE PLAN
Airgas, Inc. (the "Company") believes in providing incentives to attract, retain
and reward Executive Officers who are responsible for providing leadership to
the Company in attaining established business objectives.
The purpose of the Company's Fiscal Year 2004 Executive Bonus Plan (the "Plan")
is to align management's efforts with the strategic goals of the Company through
competitive annual incentive opportunities. The Plan will be effective from
April 1, 2003 to March 31, 2004 (the "Plan Year") and will automatically renew
upon the anniversary date of the Plan unless terminated by the Governance and
Compensation Committee of the Board of Airgas, Inc. (the "Committee").
ELIGIBILITY
The Chief Executive Officer and Executive Officers ("Participants") are eligible
for participation in the Plan provided that such officers are employed by the
Company on the date Awards (as defined below) are paid pursuant to the Plan
(unless previously terminated due to retirement, disability or death as more
fully described herein). For purposes of the Plan, an Executive Officer is
defined as a President, COO, Division President, Senior Vice President, and any
other employee deemed to be a "covered employee" within the meaning of Section
162(m) of the Internal Revenue Code of 1986, as amended, as such section may be
amended.
TARGET AWARDS
Participants in the Executive Bonus Plan will be eligible for an annual cash
incentive award (the "Award") based on the achievement of predetermined goals as
set forth in the Performance Measurement section of the Plan. Participants will
have an assigned Award target equal to a specific percentage of salary earned
during the Plan Year. For this purpose, salary is defined as the base pay an
individual earns during the Plan Year. An annual Award target is determined
based on the Participant's position in the organization. The maximum Award that
may be paid in any single year to any Participant is $1,500,000.
PERFORMANCE MEASUREMENT
All Awards payable shall be based solely upon the achievement of specific
performance targets based on one or more of the following criteria:
- - Earnings per share (EPS)
- - Return on capital (ROC)
- - Return on average capital employed (RACE)
- - Earnings before interest, taxes, depreciation and amortization (EBITDA)
- - Sales
- - Return on equity (ROE)
- - After tax cash flow (ATCF)
- - Free cash flow (FCF)
- - Operating expense as a percentage of sales
- - Gross profit
- - Days purchases outstanding (DPO)
- - Operating income (OI)
- - Days sales outstanding (DSO)
- - Working capital
Final Award payments will vary based on the level of achievement measured
against pre-determined performance targets. Depending upon a Participant's
position and responsibilities, these various performance measures, assessed
based on different weightings, will determine the Award.
The Committee will establish the specific performance targets for the Plan
within each of the above criteria within 90 days after the beginning of the
respective Plan Year.
FUNDING
The Plan will be self-funding, as profitability targets will be established net
of target Award payments under the Plan. Therefore, achievement of profitability
targets will ensure that the Plan has funded itself.
EXECUTIVE BONUS PLAN PAYMENT
At the end of the Plan Year, after all financial results have been finalized,
the actual Award payment will be determined. The Award will be paid in cash no
later than 75 days following the end of the Plan Year.
ADMINISTRATION OF THE PLAN
The Committee shall have full power to administer and interpret the Plan and, in
its sole discretion, may establish or amend rules of general application for the
administration of the plan and may amend or terminate the Plan at any time.
PARTIAL YEAR ELIGIBILITY
Participants who are eligible for the Plan for a portion of the year will
receive a prorated Award based on the base salary earned while they are eligible
for the Plan or such other arrangement as agreed upon when hired.
- - New hires
-- Newly hired Participants will immediately be eligible for the Plan.
-- Base salary will be accumulated from the date of hire to the end of
the Plan Year, unless eligibility ceases prior to that date.
- - Transfers
-- For Participants who transfer from one job or employee status to
another, eligibility will depend on their award eligibility before
and after transferring.
-- If a Participant transfers from a position that is not Plan eligible
to a position that is eligible for an Award under the Plan, the
Award will be prorated based on the time in the Plan eligible
position. All calculations are done using Plan Year-end financial
data.
-- If a Participant transfers from a position that is eligible for an
Award under the Plan to a position that is not Plan eligible, the
Award will be prorated based on the length of time in the Plan
eligible position. All calculations are done using Plan Year-end
financial data.
-- If a Participant transfers from one position that is eligible for an
Award under the Plan to another position that is eligible for an
Award under the Plan, participation in the Plan will continue
uninterrupted. However, if the transfer involves a move that will
change the weightings used to
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determine a Participant's Award, the Award calculation will be based
on the pro-rated time spent in each position. All calculations will
be done using Plan Year-end data. Accountabilities must be
separately established and assessed for each position.
- - Promotions
-- If a Participant is promoted during the Plan Year, new
accountabilities must be established to reflect the new position.
- - Terminations
-- Employees who are not employed by the Company on the date the Award
is paid are not deemed to be Participants and therefore are
ineligible to receive any Award under the Plan, except for the
following circumstances:
- Participants who retire, become disabled or die during the
Plan Year will be eligible for a prorated Award. The Award
will be calculated from the date when they become eligible,
normally the beginning of the Plan Year to the date of
retirement, disability or death.
- - Leave of absence
-- If a Participant is on a leave of absence at the end of the Plan
Year, he or she will be eligible for an Award provided that he or
she returns to work as an active employee. Any Award paid will be
prorated based upon the length of time the Participant was actively
working during the Plan Year. The calculation will be made using
Plan Year-end financial data. The Award payment will be made in the
next regularly scheduled payroll cycle at the end of the
Participant's first month of employment following his or her return
from leave of absence.
-- If a Participant is on a leave of absence during the Plan Year and
returns during the Plan Year, he or she will be eligible for an
Award. Any Award paid will be prorated based upon the length of time
a Participant was actively working during the Plan Year. The
calculation will be made using Plan Year-end financial data.
TAX CONSIDERATIONS AND WITHHOLDING
Participants will be required to report taxable income in the year the Award is
received. The Company will withhold taxes in the appropriate amount on all
payouts.
BANKRUPTCY
In the event that The Company declares bankruptcy, the Committee, at its
discretion, may immediately discontinue the Plan. In the event that the Plan is
discontinued, all participants will forfeit the right to any payments under the
Plan.
FUTURE EMPLOYMENT
Payment of an Award under the Plan does not imply a contractual agreement to
extend or continue employment of a Participant beyond receipt of the Award.
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