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EXHIBIT 10.21
TCC INDUSTRIES, INC.
ANNUAL INCENTIVE PLAN
BASIC PLAN TEXT
AS AMENDED JANUARY 9, 1992,
JANUARY 12, 1995, AND
JANUARY 11, 1996
I. PURPOSE
The purpose of the Annual Incentive Plan (the "Plan") is to
maximize accomplishment of TCC Industries, Inc. ("TCC Industries"
or the "Corporation") and its subsidiaries' objectives by providing
additional monetary incentive to selected key managers who are
responsible for directing activities that have a significant and
direct impact on the success of the Corporation and/or its
subsidiary corporations. The Plan is further intended to:
o Reward these individuals for high performance;
o Provide motivation to achieve annual organizational goals; and
o Provide motivation to achieve sustained long-term
profitability and growth.
As a matter of compensation philosophy, TCC Industries intends to
provide an opportunity for its employees and the employees of its
subsidiaries to be paid at least equal to their peers in similar
jobs in competitive organizations. The Incentive Award is paid in
addition to base salary with the incentive amount to be determined
by the performance of the organization (Corporation and/or
subsidiary). Thus, the Plan is intended to focus the Participants'
attention primarily on the performance of their organizational
unit. The Plan is intended to share the risk and success of the
organization with the key managers.
II. DEFINITIONS
(a) "Basic Plan" - The general summary and statement of purpose
with regard to the Plan.
(b) "Committee" - Compensation Committee of the Board of Directors
of TCC Industries.
(c) "Incentive Award" - A cash payment, in addition to base
salary, paid to the Participants in the Plan as incentive
compensation, determined in accordance with the Operating
Rules of the Plan.
(d) "Incentive Compensation Accrual Account" - A bookkeeping
account on the Corporation's or its subsidiaries' "books"
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to which accrual entries are made to reflect earned Incentive
Awards.
(e) "Incentive Performance Factor(s)" - The specific measures used
for calculating each Participant's Incentive Award.
(f) "Incentive Unit" - An assignment of "points" to each
Participant intended to reflect: (1) the relative ability of a
position to impact end results and (2) the competitive
compensation market conditions.
(g) "Incentive Unit Value" - The dollar value of each Incentive
Unit earned by the Participant(s) based on the
Corporation/subsidiary performance for the fiscal year.
(h) "Operating Rules" - Specific Plan details adopted annually.
(i) "Participants" - Individuals selected to be eligible for
Incentive Awards.
(j) "Performance Factor Weighting" - The relative importance of
each Incentive Performance Factor used in calculating each
Participant's Incentive Award.
(k) "Plan" - The Annual Incentive Plan.
(l) "Potential Incentive Award" - The potential Incentive Award
that may be earned by a Participant(s) if the
Corporation/subsidiary's actual performance is equal to the
Target(s), prior to any adjustments as provided in the
Operating Rules.
(m) "Pro Rata Award" - An Incentive Award paid, under certain
circumstances described hereinafter, for a portion of the
fiscal year that a Participant is an employee.
(n) "Target" - The expected (or budgeted) performance.
(o) "Threshold" - The minimum accepted performance below which no
Incentive Award will be paid.
(p) "Variable Incentive Pool" (VIP) - An adjustment to individual
Incentive Awards which the President of TCC Industries and
each subsidiary President (for the employees of his/her
subsidiary) may elect to make based on an assessment of their
performance and contribution. This adjustment is contingent
upon the approval of the Committee.
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III. ADMINISTRATION
The Board of Directors has established a Compensation Committee
(the "Committee") for TCC Industries. The Committee shall, as part
of their duties, administer and interpret the Plan.
The actions of the Committee as to construction, interpretation and
administration of the Plan shall be final and binding on all
parties, except those actions which require approval by the Board
of Directors, as provided herein, or as may be governed by the
by-laws of the Corporation.
Matters before the Committee shall be determined according to the
rules established by the Board and, unless otherwise provided for,
shall be decided based upon a vote of the majority of the entire
Committee. Members of the Committee who are Participants shall not
vote on their compensation.
No later than fifteen (15) days after the beginning of each fiscal
year, the Committee shall adopt a set of Operating Rules for
implementing the Plan for the coming fiscal year.
IV. PARTICIPANTS
Eligibility for participation in this Plan shall be limited to
those key selected employees whose responsibilities, in the
judgement of the Committee, have a significant bearing on the
success and performance of the Corporation and its respective
subsidiaries.
Prior to the beginning of each fiscal year, the President of TCC
Industries shall submit to the Committee a list of employees
eligible for participation in the Plan for the upcoming fiscal
year, the Incentive Performance Factors, Performance Factor
Weightings, and the Incentive Units allocated to each Participant.
After approval by the Committee, but no later than thirty (30) days
after the beginning of each fiscal year, each Participant shall be
notified of his/her eligibility for participation in the Plan.
Participants may be added during the Fiscal Year in accordance with
Paragraph VIII.
V. INCENTIVE COMPENSATION ACCRUAL ACCOUNT
During the fiscal year, there shall be credited to an Incentive
Compensation Accrual Account the amounts determined by the
Committee as incentive compensation, based on the Operating Rules
adopted in accordance with Paragraph IX.
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The Incentive Compensation Accrual Account as provided above is to
be evidenced by appropriate bookkeeping entries only, and under no
circumstances is it intended, nor shall this Plan be construed,
that such accrual accounts shall constitute a trust or trust fund.
If, in the sole judgment of the Committee, the unawarded balance in
the Incentive Compensation Accrual Account is in excess of the
total requirements for Incentive Awards, the Committee may direct
that such excess be credited to income.
VI. DETERMINATION OF INDIVIDUAL PARTICIPANT INCENTIVE AWARD
Individual Incentive Awards shall be determined based on the
Participant's pre-established performance goals (Targets) and the
relative weighting of each Incentive Performance Factor. The
pre-established Incentive Performance Factors and goals shall be
based on one or a combination of:
a. Consolidated Corporation results
b. Individual subsidiary results
The specific Incentive Performance Factors and their weightings
shall be specified during the course of the annual adoption of
Operating Rules, in accordance with Paragraph IX.
The Incentive Award for a Participant(s) shall be calculated based
on a) actual performance as set out in the Operating Rules, b) the
relative weighting (importance) of each Incentive Performance
Factor, (c) the number of Incentive Units assigned to the
Participant(s) for the fiscal year and (d) the Incentive Unit
Value. These calculations shall be determined according to
organizational performance as provided in the formula(s) in the
Operating Rules for the fiscal year in question as adopted by the
Committee.
Should the earned Incentive Award not accurately reflect the
performance of the individual Participant, it may be adjusted
either up or down at the discretion of the President of TCC
Industries and each subsidiary President (for the employees of
his/her subsidiary), with approval by the Committee. The upward
adjustment is established through a Variable Incentive Pool equal
to 20% of the total dollars of earned Incentive Awards for all
Participants. There is no requirement that all, or any portion, of
the Variable Incentive Pool be paid. The downward adjustment may
be up to, but not more than, 20% of the individual's earned
Incentive Award. Any downward adjustments will not affect the
amount of the Variable Incentive Pool.
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In determining performance under the Plan, the Committee shall have
the discretion to make such adjustments in order to take into
account extraordinary situations or conditions so as to more
accurately reflect true performance of the Corporation and/or
subsidiary. The purpose of such discretionary adjustments shall be
to exclude from the performance calculations conditions, or
situations which the Committee, in their sole judgment, recognize
as outside the control or influence of the Participants, or
extraordinary to the operation of the Corporation and/or
subsidiary.
The aggregate of the amounts allocated as individual Incentive
Awards for each year shall be charged against the balance in the
Incentive Compensation Accrual Account.
VII. PAYMENT OF INDIVIDUAL INCENTIVE COMPENSATION AWARDS
The Incentive Award shall, subject to further provisions of the
Plan and this paragraph, be paid in cash. The payment, shall be
made within forty-five (45) days of receipt of the audited
financial statement which reports the results of operations for the
fiscal year in which the award is earned.
VIII. PARTIAL PAYMENT: NEW HIRES AND TERMINATION OF EMPLOYMENT
DISCHARGE OR RESIGNATION
In the event a Participant is discharged or resigns before the end
of the fiscal year, he/she shall forfeit any Incentive Award that
would have been earned for that year.
RETIREMENT
In the event of the retirement of a Participant, as determined by
the Committee, a Pro Rata Award shall be calculated and paid in the
first quarter of the fiscal year following the fiscal year in which
the retirement takes place.
DEATH OR DISABILITY
In the event of death, the Committee shall have the option to a)
calculate a Pro Rata Award and accelerate payment of such Incentive
Award or b) calculate the Incentive Award on the same basis as if
the Participant had worked for the entire fiscal year. Payment in
such event shall be to his/her estate, or to such individual(s) as
the Participant may have previously designated in writing.
If a Participant is disabled and unable to return to work, the
Committee shall have the option to a) calculate a Pro Rata Award
and accelerate payment of such Incentive Award or
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b) calculate the Incentive Award on the same basis as if the
Participant had worked for the entire fiscal year.
NEW HIRE OR PROMOTION
Employees who are newly hired or promoted to eligible positions may
be able to receive a Pro Rata Award under the Plan in the fiscal
year that they are hired (or promoted) to such eligible position,
subject to approval by the committee.
RESPONSIBILITY FOR PAYMENT
The Corporation shall only be responsible for payment of Incentive
Awards to Participants who are employees of the Corporation and
shall not be responsible or liable for the payment of Incentive
Awards to Participants who are employees of any subsidiary
corporation that adopts the Plan. Each subsidiary of the
Corporation that adopts the Plan shall only be responsible for
payment of Incentive Awards to Participants that are employees of
that subsidiary.
GENERAL
In the event of discharge, resignation, disability, retirement, new
hire, or promotion, the Committee, at its sole discretion, may
elect to modify the payment of incentive compensation in the
manner, as they see fit, that best meets the needs of the
Corporation.
Pro rata, for the purposes of the Plan, shall mean one-twelfth of
the annual incentive compensation for each full month of employment
in the fiscal year for which a Pro Rata Award is earned, calculated
based on the performance for the entire fiscal year.
IX. INCENTIVE COMPENSATION OPERATING RULES
No later than fifteen (15) days after the beginning of each fiscal
year, the Committee shall adopt the Operating Rules through which
it proposes to implement the provisions of the Plan for the year
then beginning. The Operating Rules shall include the following:
A. Identification of employees selected under Paragraph IV for
participation in the Plan.
B. Incentive Units allocated to each Participant for Targeted
performance levels.
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C. Incentive Unit Value if performance is equal to Target.
D. Schedules, formulas, etc., for determining the amount of
Incentive Award for the fiscal year then beginning as
described under Paragraph VI (including the Threshold
performance point).
E. Procedures for allocation of awards to individual
Participants.
F. Other administration procedural rules which the Committee
considers appropriate.
After approval by the Committee, management shall, as soon as
practicable, inform each of the Participants of his/her Potential
Incentive Award under the Operating Rules adopted.
X. LIABILITY
In the absence of bad faith, no member of the Board of Directors or
the Committee, nor any officer, employee, or agent of the
Corporation, shall have any liability to any person, firm, or
corporation based on or rising out of the Plan.
XI. EXPENSES OF ADMINISTERING THE PLAN
All expenses of administering this Plan shall be borne by the
Corporation and/or its subsidiaries, and no part thereof shall be
charged against the Incentive Compensation Accrual Account or the
awards payable hereunder.
XII. REVISION, AMENDMENT, AND/OR TERMINATION OF THE PLAN
This Plan shall not create any rights of future participation
therein of any employee, nor limit in any way the right of the
Board of Directors, or the Committee, to modify or to rescind the
Plan in whole or in part. No person eligible to receive any
payment shall have any right to pledge, assign, or otherwise
dispose of any unpaid portion of such payments.
The Board of Directors or the Committee may terminate, amend, or
modify this Plan at any time. In the event the Plan is terminated,
amended, or modified after the beginning of the fiscal year, such
change shall not affect the Participants' Incentive Award under the
Plan for that fiscal year.
If the Corporation or one or more of its subsidiaries should sell
all or substantially all of its assets, or if the stock of a
subsidiary(s) is sold before the end of the fiscal
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year, a calculation of the Incentive Award earned by the
Participants of the Corporation or such subsidiary will be made as
of the date of the sale. In this instance, the Targets for the
Incentive Performance Factors will be adjusted for the short period
by reducing the Targets by one-twelfth (1/12) times the number of
months remaining in the fiscal year of the sale. The actual
performance up until the time of the sale will be compared to the
adjusted Incentive Performance Factor Targets for a calculation of
the Pro Rata Award, as defined in Paragraph VIII. The obligation
of the organization that sells its assets, or whose stock is sold,
to pay incentive compensation to its respective
employee/Participants shall terminate for the remainder of the
fiscal year in which the sale occurs and for all subsequent fiscal
years.
XIII. PROHIBITION AGAINST ASSIGNMENT OR ENCUMBRANCE
No Participant shall have the power to anticipate, dispose or
transfer any right, title, interest or benefit in the Plan until
distributions are made in accordance with the terms of the Plan.
Nor shall any creditor of a Participant or person claiming under
the rights of a Participant be able to secure any title, interest
or benefit in the Plan until distributions are made in accordance
with the terms of the Plan.
XIV. EMPLOYMENT RELATIONSHIP
A Participant shall be considered to be in the employment of the
Corporation or its subsidiaries as long as he/she remains an
employee of the Corporation or its subsidiaries. Nothing in the
adopting of the Plan shall confer on any employee the right to
continued employment by the Corporation or a subsidiary
organization of the Corporation, or affect in any way the right of
the Company or such subsidiary to terminate his/her employment at
any time.
XV. GENDER AND NUMBER
Except when otherwise indicated by the context, any masculine
terminology used in this Plan shall also include the feminine
gender and the definition of any term herein in the singular shall
also include the plural.
XVI. GOVERNING LAW
The Plan shall be construed in accordance with and governed by the
laws of the state of Texas.
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TCC INDUSTRIES, INC.
ANNUAL INCENTIVE PLAN
OPERATING RULES
(AMENDED JANUARY 9, 1992,
JANUARY 12, 1995, AND
JANUARY 11, 1996)
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TCC INDUSTRIES, INC.
ANNUAL INCENTIVE PLAN
OPERATING RULES
(AMENDED JANUARY 9, 1992,
JANUARY 12, 1995, AND
JANUARY 11, 1996)
The following are the Operating Rules for the TCC Industries, Inc. Annual
Incentive Plan and shall apply until amended or modified. Unless otherwise
noted herein, capitalized terms will carry the same meaning as their definition
in Paragraph II of the Basic Plan Text.
I. PARTICIPANTS
At the beginning of each Plan year, the Participants will
be notified of their inclusion in the Plan in writing in
the form of an individual data sheet.
II. INCENTIVE UNITS
The number of Incentive Units allocated to each Participant
for targeted performance reflects the:
o Relative impact of each position on the performance
of the organization; and
o Competitive labor markets.
III. INCENTIVE PERFORMANCE FACTORS
A. The following Incentive Performance Factors shall be
the basis for incentive compensation determination
(see Paragraph VI for the specifics and definitions):
Corporate
1. Consolidated Net Income
2. Consolidated Gross Revenue
Subsidiaries
1. Subsidiary Net Income
2. Subsidiary Gross Revenue
See Section VI, Definitions, for specific
information regarding the calculation of Net Income.
B. Net Income and Gross Revenue shall each be weighted
equally at 50%. However, in calculating a
Participant's Incentive Award, that portion of the
award based on Gross Revenue performance shall not
exceed the award earned based on Net Income
performance.
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C. A Threshold amount of performance for Net Income and
Gross Revenue has been established for the
Corporation and each subsidiary. This Threshold
indicates the amount of Net Income and Gross Revenue
which must be achieved in order for the portion of
the Incentive Award attributable to these two
factors to be earned. Until amended or modified,
the Threshold will be seventy percent (70%) of the
Target for the Net Income and Gross Revenue
Incentive Performance Factors.
D. In the event the Corporation or a subsidiary's total
incentive compensation earned exceeds the Net Income
of the Corporation or subsidiary after deduction of
the total incentive compensation, each Participant's
incentive compensation shall be reduced
proportionately until the total of the Corporation's
or the subsidiary's Annual Incentive Plan payout
equals Net Income ("Subsidiary Performance
Adjustment"). IN NO EVENT WILL TOTAL INCENTIVE
COMPENSATION RESULT IN A GREATER THAN 50% REDUCTION
IN PRE-INCENTIVE NET INCOME.
IV. CALCULATING THE INDIVIDUAL INCENTIVE AWARD
Each Participant is assigned a "target" number of Incentive
Units based upon a combination of both his/her ability to
impact end results and competitive incentive amounts. At
Targeted performance levels, Participants will receive the
targeted number of incentive units, the value of which is
$100 each. Net Income and Gross Revenue performance which
does not meet the Targeted levels will result in a downward
adjustment of both the number of Incentive Units received
and the value of each Incentive Unit; conversely, Net
Income and Gross Revenue performance which exceeds targeted
levels will result in the number of Incentive Units and the
value of each Incentive Unit being increased.
To calculate a Participant's (potential) Incentive Award,
before any variable adjustment, complete the worksheet
labeled Exhibit I.
V. CALCULATING THE VARIABLE INCENTIVE POOL (VIP)
1. Summarize the unadjusted amount of potential
Incentive Awards (line 12 from Exhibit I - the
worksheet for calculating the Individual Incentive
Award) for all of the Participants covered by the
Plan (Corporation and all subsidiaries) (after any
adjustments made pursuant to Section III, Paragraph
D) and multiply by 20%--this is the VIP.
2. The President of TCC Industries and each subsidiary
President (for the employees of his/her subsidiary),
with the approval of the Committee, shall have the
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discretion to decide the allocation, if any, of the
VIP to individual Participants.
(An illustrative example is shown in Exhibit II.)
3. The President of TCC Industries and each subsidiary
President (for the employees of his/her subsidiary),
with the approval of the Committee, shall also have
the discretion to make a downward adjustment to
individual earned Incentive Awards by an amount not
to exceed 20% of the individual's total earned
Incentive Award ("Discretionary Individual
Adjustment"). In no event will the amount of
reduction be redistributed in any way.
VI. DEFINITIONS
CORPORATE
The Net Income and Gross Revenue figures used shall be
determined using Generally Accepted Accounting Principles
and will be those figures recorded on the organization's
audited Consolidated Income Statement.
A. GROSS REVENUE - Total consolidated sales volume, net
of returns allowances, etc., recorded by the
Corporation for products, services, etc.
B. NET INCOME - Consolidated pre-tax income, excluding
all extraordinary items and the amount recorded
during the Plan year in the Incentive Compensation
Accrual Account.
SUBSIDIARY
The Net Income and Gross Revenue figures used shall be
determined using Generally Accepted Accounting Principles
and will be those figures recorded on the organization's
audited Income Statement.
See also Section IV. for additional definitions.
A. GROSS REVENUE - Total sales volume, net of returns,
allowances, etc., recorded by the subsidiary for
products, services, etc.
B. NET INCOME - Pre-tax income, excluding all
extraordinary items, interest income, the amount
recorded during the Plan year in the Incentive
Compensation Accrual Account and management fees.
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Exhibit I
TCC INDUSTRIES AND SUBSIDIARIES
WORKSHEET FOR CALCULATING THE INDIVIDUAL INCENTIVE AWARD
NOTE: please see Section VI, Definitions, of the Plan Operating Rules before
completing this worksheet.
Each Participant has been assigned a number of "target incentive units. This
number of Incentive Units will be paid to a Participant if the Corporation or
subsidiary meets Target performance levels (as indicated by a combination of
Net Income and Gross Revenue as described below). If Targets established for
the Incentive Performance Factor(s) are achieved, each Incentive Unit
represents $100 of incentive compensation ("Incentive Unit Value"). Both the
number of Incentive Units and the Incentive Unit Value related to Net Income
and Gross Revenue will be adjusted up or down based on the performance of the
Corporation or subisdiary as compared to the Targets established for the
Incentive Performance Factors.
(A) Net Income and Gross Revenue
1. What was the Corporation/subsidiary's $ __________
ACTUAL Net Income for the Plan year?
2. What was the Corporation/subsidiary's $ __________
TARGET Net Income for the Plan year?
3. Divide Response 1 by Response 2, then __________%
multiply by 100. THIS IS NET INCOME
PERFORMANCE (%).
IF RESPONSE 3 IS LESS THAN 70.0%, THEN THE MINIMUM ACCEPTABLE PERFORMANCE LEVEL
(THRESHOLD) HAS NOT BEEN MET AND NO INCENTIVE COMPENSATION WILL BE PAID.
4. What was the Corporation/subsidiary's $ __________
ACTUAL Gross Revenue for the Plan year?
5. What was the Corporation/subsidiary's $ __________
TARGETED Gross Revenue for the Plan year?
6. Divide Response 4 by Response 5, then __________%
multiply by 100. (IF LESS THAN 70.0%,
ENTER 0.0%) THIS IS PRELIMINARY GROSS
REVENUE PERFORMANCE (%).
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7. Preliminary Gross Revenue Performance
(Response 6) in excess of Net Income
Performance (Response 3) is not
recognized by the TCC Industries Annual
Incentive Plan. If Response 6 is
GREATER than Response 3, please enter
the result from Response 3. If Response
6 is LESS than Response 3, enter the
result from Response 6. THIS IS ADJUSTED
GROSS REVENUE PERFORMANCE. ___________%
8. A. Multiply Response 3 by .5 ___________%
B. Multiply Response 7 by .5 ___________%
C. Add Response 8A and 8B. THIS IS ___________%
COMBINED PERFORMANCE.
9. Enter number of Target Incentive Units. ___________
10. Multiply Response 9 by Response 8C. ___________
THIS IS THE NUMBER OF INCENTIVE
UNITS EARNED FOR THE PLAN YEAR.
11. Multiply $100 by Response 8C. $ ___________
THIS IS THE VALUE OF EACH INCENTIVE UNIT
FOR THE PLAN YEAR.
12. Multiply Response 10 by Response 11. $ ___________
13. Enter the total amount of any Interim
Payment(s) paid during the Plan year. $ ___________
14. Subtract Response 13 from Response 12. $ ___________
THIS IS THE UNADJUSTED AND UNPAID
AMOUNT OF INCENTIVE COMPENSATION EARNED
FOR THE PLAN YEAR.
The amount in Response 14 can be adjusted under any of a combination of the
following scenarios:
1. Adjusted upward as a result of payment from the Variable
Incentive Pool.
2. Adjusted downward by not more than 20% for below expected
individual performance.
3. Adjusted proportionately to ensure the operational unit does not
pay Incentive Awards exceeding post incentive net income.
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EXHIBIT II
TCC INDUSTRIES
VARIABLE INCENTIVE POOL
POOL CALCULATION
Employee A $20,000
Employee B 16,500
Employee C 13,000
Employee D 12,500
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TOTAL EARNED INCENTIVE $62,000
VARIABLE INCENTIVE PERCENTAGE x 20%
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VARIABLE INCENTIVE POOL $12,400 (1)
(1) Pool may be allocated to any individuals or no one based on the
recommendations of the President of TCC Industries and each subsidiary
President (for the employees of his/her subsidiary), with approval of the
Compensation Committee.
* * * *
Also, an individual's Incentive Award can be reduced by up to 20% if it is
determined that individual's performance is below expectations (called a
"Discretionary Individual Adjustment".)
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Exhibit III
TCC INDUSTRIES AND SUBSIDIARIES
WORKSHEET FOR INTERIM CALCULATION OF INDIVIDUAL INCENTIVE AWARD
NOTE: This worksheet is to be completed only upon the direction of the
Committee and any Interim Payment is solely at the discretion of the Committee.
Please see the 1996 Supplement to the TCC Industries, Inc. Annual Incentive
Plan Basic Plan Text and Operating Rules before completing this worksheet.
(A) Net Income and Gross Revenue
1. What is the Corporation/subsidiary's $ __________
PROJECTED Net Income for the Plan year?
2. What is the Corporation/subsidiary's $ __________
TARGET Net Income for the Plan year?
3. Divide Response 1 by Response 2, then __________%
multiply by 100. THIS IS INTERIM
NET INCOME PERFORMANCE (%).
IF RESPONSE 3 IS LESS THAN 70.0%, THEN THE MINIMUM ACCEPTABLE PERFORMANCE LEVEL
(THRESHOLD) HAS NOT BEEN MET AND NO Interim PAYMENTS WILL BE PAID.
4. What is the Corporation/subsidiary's $ __________
PROJECTED Gross Revenue for the Plan year?
5. What is the Corporation/subsidiary's $ __________
TARGETED Gross Revenue for the Plan year?
6. Divide Response 4 by Response 5, then __________%
multiply by 100. (IF LESS THAN 70.0%,
ENTER 0.0%) THIS IS THE INTERIM GROSS
REVENUE PERFORMANCE (%).
7. Preliminary Interim Gross Revenue
Performance (Response 6) in excess of
Interim Net Income Performance (Response 3)
is not recognized by the TCC Industries
Annual Incentive Plan. If Response 6 is
GREATER than Response 3, please enter
the result from Response 3. If Response
6 is LESS than Response 3, enter the
result from Response 6. THIS IS ADJUSTED
INTERIM GROSS REVENUE PERFORMANCE. __________%
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8. A. Multiply Response 3 by .5 ___________%
B. Multiply Response 7 by .5 ___________%
C. Add Response 8A and 8B. THIS IS COMBINED ___________%
INTERIM PERFORMANCE FOR PROJECTED NET
INCOME AND PROJECTED GROSS REVENUE.
9. A. Enter number of Target Incentive Units. ___________
B. Multiply line 9A by 1/12. ___________
C. Enter the number of months covered by
the Interim Calculation. ___________
D. Multiply response 9B by response 9C. ___________
E. Multiply line 9D by 25%. This is
the number of Incentive Units that
are subject to a Interim Payment. ___________
10. Multiply Response 9E by Response 8C. ___________
THIS IS THE NUMBER OF ADJUSTED INCENTIVE
UNITS SUBJECT TO A INTERIM CALCULATION.
11. Multiply $100 by Response 8C. $ ___________
THIS IS THE VALUE OF EACH INCENTIVE UNIT
FOR THE PLAN YEAR.
12. Multiply Response 10 by Response 11. $ ___________
13. Enter the total amount of any Interim Payment(s)
paid during the Plan year. $ ___________
14. Subtract Response 13 from Response 12. $ ___________
INTERIM PAYMENT OF THIS UNADJUSTED (SEE BELOW)
AND UNPAID AMOUNT OF INTERIM INCENTIVE COMPENSATION
IS SOLELY AT THE DISCRETION OF THE COMMITTEE.
The amount in Response 14 can be adjusted under any of a combination of the
following scenarios:
1. Adjusted downward by not more than 20% for below expected individual
performance.
2. Adjusted proportionately to ensure the operational unit does not pay
Incentive Awards exceeding post incentive net income.
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