EXHIBIT 10.18
Bonus Plan
for
Senior Management Employees of G+G Retail, Inc.
I. Principles of the Plan
o The Bonus Plan is intended to recognize the critical importance of
senior management to the sustained growth of the Company by assuring
participants of an opportunity to achieve exceptional levels of
total cash compensation in years in which the Company achieves or
exceeds expectations as defined by the Board of Directors.
o Incentives are intended to reward growth in the Company's financial
performance measured by pre-tax operating income before interest,
depreciation and amortization (EBITDA.)
o Participants in the Bonus Plan will be selected at the
recommendation of the Company's President/Chief Operating Officer
and Chairman/Chief Executive Officer (and will include the CEO and
COO.)
II. Award Opportunities
o Award opportunities are established as percentages of each
participant's base salary. Each participant will have a threshold,
target and maximum level award opportunity under the Bonus Plan as
follows:
-----------------------------------------------
Performance Level Award Opportunity as
Percentage of Base
Salary Paid During
Year
-----------------------------------------------
Below Threshold Level 0%
-----------------------------------------------
At Threshold Level 20%
(but less than Target)
-----------------------------------------------
At Target Level (but 30%
less than Maximum)
===============================================
At Maximum Level or 40%
above
===============================================
Above Maximum
Bonus Level*
*(CEO & COO only) Additional 25%
-----------------------------------------------
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III. Performance Levels (as Percentages of EBITDA)
o Threshold, Target and Maximum Performance Levels are equal to sum of
(i) percentages (as set forth below) of projected EBITDA for each
fiscal year as established by the Company's Board of Directors, plus
(ii) total dollar amount of bonuses payable to all participants at
that Performance Level (i.e., total base salaries of all
participants in the Plan multiplied by Award Opportunity
(percentage) applicable to the given Performance Level.)
-------------------------------------------------
Performance Level EBITDA Amount Needed to
Pay Out Bonus
=================================================
Threshold 95% of Projected EBITDA
plus 20% of Total Base
Salaries of All Participants
-------------------------------------------------
Target 100% of Projected EBITDA
plus 30% of Total Base
Salaries of All Participants
-------------------------------------------------
Maximum 110% of Projected EBITDA
plus 40% of Total Base
Salaries of All Participants
=================================================
Above Maximum* More than 110% of Projected
(CEO and COO Only) EBITDA
plus 40% of Total Base
Salaries of All Participants
plus 25% of Total Base
Salaries of CEO and COO
-------------------------------------------------
IV. Payment of Awards
o Awards are payable in cash, subject to applicable withholding and
payroll taxes, as soon as practicable after fiscal year end audit is
complete.
o A participant must be employed through the last day of the fiscal
year in order to be eligible for payment of any award under the
Bonus Plan, except that participants leaving the Company's employ
prior to the last day of the fiscal year due to death, disability or
normal retirement with the consent of the Company will be entitled
to a bonus award based upon salary earned during the year prior to
termination of employment. Participants joining the Company or
promoted to eligible positions during the fiscal year will become
entitled to a bonus based upon salary earned during the fiscal year
from and after date of employment or eligibility.
o EBITDA targets may be reduced or adjusted in the Company's
discretion to reflect significant or unusual changes in the
Company's business.
V. Plan Amendment or Termination
o The Bonus Plan may be amended or terminated at any time upon the
recommendation of the Company's President/Chief Operating Officer
and Chairman/Chief Executive Officer.
o Upon termination of the Bonus Plan, other than as of the end of a
fiscal year, participants will be eligible to receive awards
determined in the same manner as awards made at year end, but based
upon salary earned by participants during the portion of the fiscal
year in which the Bonus Plan remained in effect.
o The Bonus Plan will be construed, interpreted and applied in the
good faith determination of the Company's Board of Directors.
o The Bonus Plan will be effective for fiscal years commencing
February 2, 1999.
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