EXHIBIT 10J
NATIONAL COMPUTER SYSTEMS
CORPORATE
MANAGEMENT INCENTIVE PLAN
1994
It is NCS' intent to compensate its senior management employees in a manner
which permits the Corporation to attract, retain, and motivate outstanding
people.
The NCS Corporate Management Incentive Plan (MIP) is designed to reward key
senior managers for achieving specific annual NCS financial goals and for
individual performance in accomplishing these goals. It aligns the interests of
NCS senior management with NCS business and financial plans.
PLAN ELIGIBILITY
Participation in the plan is determined by position. Eligible positions and
target bonus amounts are determined each year and may change from year to year.
Participants must be full-time NCS employees. Eligibility is limited and
includes those positions which significantly impact the corporate/ NCS
Business/Division financial results.
The eligible positions and participants will be reviewed annually and
approved by the CEO.
Positions and participants in the plan will be selected from the following:
- CEO,
- Corporate staff officers,
- NCS Business presidents and, on a selected basis, their direct management
reports,
- Division general managers.
Any position or participant exceptions, exclusions and inclusions, to the
above must be documented and approved by the CEO.
TARGET BONUS
Each approved position will be eligible for a specific target bonus award
percentage level. This target bonus opportunity will be a percentage of the May
31, 1994, annual base salary for the participant. The target bonus is tied
directly to the participant's unit financial performance and an overall
evaluation of each individual's performance. Potential earned payouts range from
0% at threshold minimum, to 100% at target bonus, to a pre-defined
overachievement percentage for each executive at maximum.
INCENTIVE COMPONENTS
Participants will have 70% of their potential target bonus based on
financial goals and objectives (20% Revenue and 50% Contribution). The remaining
30% of their potential target bonus will be based upon an overall evaluation of
the participant's performance during the fiscal year. This overall evaluation
will include performance against defined individual objectives and an overall
evaluation of performance relative to:
1) What you have done to improve shareholder value.
2) How you have improved customer satisfaction and NCS' ability to serve
the customer.
3) What you have done to make NCS more productive. (Re-engineering,
continuous improvements, cost reduction programs)
4) What you have done to develop the strength of your organization.
5) How well you deal with issues/problems.
51
6) How you demonstrate personal, quality leadership to the Corporation.
7) What you have done to make NCS a better place to work.
No bonus award payouts will be made to participants for achievement of the
70% financial performance if the individual's operating unit (Corporate or NCS
Business or Division) does not accomplish its minimum profit contribution
objective(s). (i.e., a division participant requires that the division achieve
its minimum profit contribution threshold.) Additionally, total earned bonus
payouts will be increased or decreased up to 20% based on actual achievement of
the NCS Corporate net income financial goal.
- If NCS overachieves its 1994 net income goal by 1% to 20%, earned MIP
payouts will be INCREASED, prorated, by 1% to 20% of the earned bonus
award.
- If NCS underachieves its 1994 net income goal, earned MIP bonus awards
will be DECREASED, prorated, by the same % amount as the net income
shortfall, up to 20%.
OVERALL EVALUATION
Each participant will have 30% of their target bonus award based upon an
overall evaluation of the participant's performance. These will be completed for
all MIP participants in accordance with the BASIS OF OVERALL EVALUATION IN 1994
(attached).
DETERMINATION OF MIP AWARDS
Generally speaking, actual financial results WILL NOT include extraordinary
gains or losses. In any such matters, including acquisitions, the CEO will make
the appropriate approval decisions where needed.
PAYOUTS AND PRO-RATA
Earned award payouts will be made no later than April 15, following the end
of the plan fiscal year. Any participant must be a full-time employee and be
actively employed by NCS on the last day of the fiscal year to be eligible to
receive a payout. In coming into or out of an MIP eligible position,
participants will be given pro-rata earned award payouts based upon the length
of time in such position, however, participants must be in the plan at least SIX
(6) FULL MONTHS during the fiscal year to be eligible to receive any pro-rata
award. Pro-rata payouts will be subject to review and approval by the CEO.
DISABILITY, DEATH, OR SPECIAL CIRCUMSTANCES
In the case of disability, death or other special circumstances impacting a
participant in the plan, the CEO may approve pro-rata award payouts.
PLAN EXCEPTIONS AND ADMINISTRATION
Exceptions and/or modifications to the plan must be approved by the CEO. All
decisions made are final.
DISCLAIMER
Participation in this plan is not to be construed as an employment contract
or agreement by the participant.
52
3/94
1994 CORPORATE MIP
BASIS OF OVERALL EVALUATION IN 1994
Thirty percent (30%) of each participant's 1994 target bonus award is based
on an overall evaluation of the individual's performance during the fiscal year.
Consideration should be given to the individual's performance against the seven
(7) factors listed below as well as how effectively the individual accomplished
all aspects of responsibilities and expectations in achieving the approved
business and financial plan.
This adds an element of subjectivity and judgement into the MIP process and
is useful because it allows for flexibility in determining earned bonus awards
instead of making awards based solely on defined objectives or based only "on
the numbers." The rating is to be made independent of financial performance
results achieved for the 70% portion.
It is recommended that prior to making a final determination, the MIP
participant should be given an opportunity to complete a self-appraisal rating
and comments on himself/herself for consideration by the evaluating manager.
BONUS
WEIGHTING BASIS OF OVERALL EVALUATION IN 1994
- -----------
1. What have you done to improve shareholder value?
2. How have you improved customer satisfaction and NCS' ability to serve the customer?
30% 3. What have you done to help NCS be more productive? (Re-engineering, continuous improvements, cost
reduction programs)?
4. What have you done to develop the strength of your organization?
5. How well did you deal with issues/problems?
6. How did you demonstrate personal, quality leadership to the Corporation?
7. What have you done to make NCS a better place to work?
53