Exhibit 10.1
HUBBELL INCORPORATED INCENTIVE COMPENSATION PLAN
2006 ANNUAL INCENTIVE GUIDELINES
PROGRAM OBJECTIVES
- To encourage teamwork and individual performance by providing
rewards for the achievement of corporate and division goals and
individual performance objectives on an annual basis.
- To attract and retain key executives by delivering competitive
annual total cash compensation.
ELIGIBILITY FOR PARTICIPATION
Participation in the Hubbell Incorporated Incentive Compensation Plan is limited
to Key Corporate Group (KCG) Managers. This group numbers approximately 50
managers.
TARGET INCENTIVE LEVELS
The size of the potential cash award varies by employee group or position. Each
group's or individual's target incentive level, established by competitive
analysis, is a percentage of base salary. When financial and certain individual
goals are met, this target incentive level is paid at 100%. For example; Base
Salary $100,000:
Target % 30%
Bonus Target $ $30,000
If all financial and individual goals are met, the bonus payout is $30,000.
Should financial and individual goals be exceeded, the bonus payout can be
greater than 100% of target dollars, up to a maximum of 200% of target dollars.
In this example the maximum payout is $60,000.
Should any financial and/or individual goals not be met, bonus payouts will be
less than the target dollar amount. The minimum payout is 50% of target dollars,
or in this example $15,000.
Should financial results fall short of a predetermined threshold performance
level, no bonuses will be paid with respect thereto.
Representative target incentive levels are shown in the table below, expressed
as a percent of base salary:
CEO 100%
CFO 70%
Group V.P Lighting 70%
Other Group V.P.'s 60%
Other Officers 50%
PERFORMANCE MEASURES
The guidelines consist of primarily financial measures. Executives, however, may
be measured on the attainment of non-financial performance objectives when
appropriate.
- Corporate
Corporate executives will have one financial measure, the
corporation's Earnings Per Share (EPS). Current year EPS figures are
shown in Exhibit A.
- Group Vice Presidents
These executives have three (3) Financial Measures and one Strategic
Objective:
FINANCIAL MEASURES:
- Corporate Earnings Per Share (Exhibit A)
- Platform Operating Profit (Exhibit B)
- Platform Trade Working Capital (Exhibit C)
STRATEGIC OBJECTIVE:
- Varies By Platform (Exhibit D)
- Business Platform Executives
These executives have two (2) financial measures and One Strategic
Objective:
FINANCIAL MEASURES:
- Platform Operating Profit (Exhibit B)
- Platform Trade Working Capital (Exhibit C)
STRATEGIC OBJECTIVE:
- Varies by Platform (Exhibit D)
PLATFORM OBJECTIVE:
- Varies by Platform (Exhibit E)
- Business Unit Managers
These executives have two (2) financial measures:
- Business Unit Operating Profit
- Platform Operating Profit or Business Unit Cash Flow
- - Performance Measure Weighting
GROUP PERFORMANCE MEASURE WEIGHTING
----- ------------------- ---------
Corporate Executives - EPS 100%
Group Vice Presidents - Platform OP & Trade Working Capital 70%
- Corporate EPS 15%
- Strategic Objective 15%
Business - Platform OP & Trade Working Capital 70%
Platform Executives - Strategic Objective 15%
- Platform Objective 15%
Business Unit Executives - Business Unit OP 75%
- Platform OP or BU Cash Flow 25%
Note: The CEO will assess individual attainment of non-financial goals in
addition to those incorporated into the Strategic Objective, as appropriate, and
may add or subtract as much as 25% to the earned award, subject to Compensation
Committee approval; provided, however, that no addition will be made to any
award with respect to a covered individual under Section 162(m) of the Internal
Revenue Code of 1986.