1
EXHIBIT 10.08
1996 G & A INCENTIVE
COMPENSATION PLAN
TABLE OF CONTENTS
Section 1 Plan Documents
Section 2 Announcement Memos and Graphs
Section 3 Cost Analysis
Section 4 Eligible Associate Lists
Section 5
Section 6
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Section 1
1996 GENERAL AND ADMINISTRATIVE STAFF
INCENTIVE COMPENSATION PLAN
FOR
NORTHERN AUTOMOTIVE CORPORATION
PURPOSE
1.0 PURPOSE: The 1996 General and Administrative Staff Incentive
Compensation Plan ("Plan") is a vital part of Northern Automotive
Corporation's ("Company") total compensation program. The purpose of
the Plan is to provide eligible associates with an opportunity to
directly share in the success of the Company by paying them bonuses
for outstanding achievement by the Company for the fiscal year 1996
(January 29, 1996 through February 2, 1997).
ELIGIBILITY
2.0 ELIGIBILITY: All associates in positions identified in Appendix A
who have an effective date of continuous employment no later than
the first day of the fourth fiscal period and are employed on the
day bonuses are paid are eligible to participate in the first half
portion of the Plan. Associates who have an effective date of
continuous employment no later than the first day of the seventh
fiscal period (the entire second half of the fiscal year) and are
employed on the day bonuses are paid are eligible to participate in
the year-end portion of the Plan.
2.1 DISQUALIFICATION FOR VIOLATION OF COMPANY POLICY: Notwithstanding
anything herein to the contrary, any associate who violates any
Company policy during the semi-annual bonus periods of the fiscal
year, or attempts to alter, manipulate, or falsely present any facts
which bear upon any aspect of this Plan may, at the sole discretion
of the Chief Executive Officer, forfeit any benefits hereunder, in
addition to any other disciplinary action to which such associate
may be subject.
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BONUSES
3.0 BONUS FACTORS: The calculation of an associate's bonus is based upon
the following four Factors:
3.01 POSITION: Each eligible associate is classified by position at
the end of the first half of the fiscal year and at the end of the
full fiscal year. In the event of a transfer from or to a store, an
associate's bonus will be calculated based upon the number of months
the associate was otherwise eligible under this Plan. Levels D and E
are determined by position job evaluation points. See Appendix B.
All eligible associates will be notified of their initial position
classification when this Plan is communicated.
3.02 COMPANY EBITDA: EBITDA (Earnings Before Interest, Taxes,
Depreciation, and Amortization) achieved for the first half of the
fiscal year and the full fiscal year, as reported on the internal
operating statements of the Company.
3.03 SALARY: The associate's base annual salary as of the end of the
first half of the fiscal year and as of the end of the full fiscal
year.
3.04 LENGTH OF SERVICE: The associate's length of service during the
plan year willdetermine whether the associate receives the full
bonus calculated or whether the bonus calculation will be pro-rated.
The first half bonus award will be pro-rated for associates who have
not been continuously employed for the entire first half of the
fiscal year provided they meet the eligibility requirements set
forth in Section 2.0. The year-end bonus will be pro-rated at six
(6) months for associates who meet the year-end eligibility
requirements set forth in section 2.0.
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3.1 BONUS CALCULATION: Each associate's bonus is calculated by
determining the associate's position and salary and the EBITDA
achieved. From Appendix A, the appropriate bonus percentage is
determined based upon the level of EBITDA achievement. The FIRST
HALF BONUS is calculated by multiplying the associate's base annual
salary times one-half of the corresponding percent assigned to each
EBITDA level for Executive/Vice President, and Director. Levels D
and E are based on one-half of a fixed dollar amount. Fifty percent
(one-half) of the first half bonus amount is paid out after the
first half results are determined. The balance is payable if the
Company achieves full fiscal year EBITDA targets. The YEAR-END BONUS
is calculated by first multiplying the associate's base annual
salary times the corresponding percent assigned to each EBITDA level
for Executive/Vice President, and Director. Levels D and E are based
on a fixed dollar amount. The amount of the first half bonus paid
out is subtracted from this bonus amount and the difference is the
year-end bonus due.
No proration is made of bonus percentages for EBITDA achieved
between applicable bonus percentages.
3.2 TIMING OF BONUS PAYMENT: Bonuses will be paid by check after the
completion of the Company's year-end audit and the bonus amounts
calculated. Appropriate payrolldeductions will be made.
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ADMINISTRATION
4.0 ADMINISTRATION: The plan is administered by the Chief Executive
Officer of the Company who will make such rules and regulations
regarding the Plan as deemed necessary to implement its terms. The
Chief Executive Officer shall be the sole arbiter of all
Plan-related questions, including eligibility, extent of
participation, and amount of bonuses paid hereunder. The Chief
Executive Officer may, at anytime and solely at his discretion,
change or adjust previously identified targets or amend or terminate
the Plan without obligation for results achieved to date.
4.1 LIFE OF PLAN: This Plan shall be effective for the Company's fiscal
year; January 29, 1996 through February 2, 1997.
4.2 Northern Automotive reserves the right to change, revise or rescind
the policies or statements described in this guide from time to
time, in its sole discretion, with or without prior notice.
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GENERAL PROVISIONS:
This plan is not a contract. No portion of the plan is to be construed as a
contract for compensation.
1. The designation of an employee as a participant will not give such employ
any right to continued employment with the Company. The Company reserves its
rights to suspend, demote, transfer or terminate the employee.
2. The Plan is an unfunded program. The Company does not have an obligation to
set aside, earmark or entrust any fund, policy or money with which to pay
obligations under the plan. The amount of money payable under the plan with
respect to participants will be paid from general revenues.
3. This program is completely discretionary on the part of Northern Automotive.
The guidelines presented are merely an attempt to inform participants about the
existence of the program and shall not be construed as a promise or guarantee
of payment or of payment in any amount. The Chief Executive Officer may, at any
time and solely at his discretion, change, modify, or terminate the program, or
deny monies to any participant, without obligation whatsoever for results which
may have been achieved to date. The amount of the program payout is expressly
subject to change in the sole and absolute discretion of the Chief Executive
Officer.
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4. The terms of the Plan are to be held strictly confidential and may not me
disclosed to anyone other than immediate family members. Any such disclosure
made by any associate in violation of the terms of the Plan may result in
forfeiture of said associate's benefits under the Plan.
TAX GUIDELINES:
All bonus awards are considered taxable income and subject to any and all taxes
required by law to be withheld.
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BONUS CALCULATION APPENDIX A
VICE PRESIDENT LEVEL
The following chart indicates how the bonus is calculated at each level of
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
achieved for first half of the fiscal year and the entire year.
1st half of fiscal year
at semi-annual EBITDA achieved
EBITDA Bonus Amount
$MMs % Achieved as % of Salary
- ---- ----------- --------------
28.5 100% One quarter of 50%
27.2 95% One quarter of 40%
26.0 90% One quarter of 30%
24.3 84% One quarter of 20%
22.3 78% One quarter of 10%
Full fiscal year
At fiscal year EBITDA achieved
EBITDA Bonus Amount
$MMs % Achieved as % of Salary
- ---- ----------- --------------
66.3 100% 50%
63.0 95% 40%
60.0 90% 30%
56.0 84% 20%
52.0 78% 10%
Example: VP at $100,000 Base Salary
1st half of EBITDA achieved = 95% Fiscal year EBITDA achieved = 90%
Bonus award = $10,000 A. Total year bonus eligible for = $30,000
B. First half bonus paid = $10,000
C. Year end bonus due = $20,000 (A-B)
D. Total bonus award for fiscal year = $30,000 (B+C)
Northern Automotive reserves the right to change, revise, or rescind the
policies or statements described in this guide from time to time, in its sole
discretion, with or without prior notice.
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BONUS CALCULATION APPENDIX A
DIRECTOR LEVEL
The following chart indicates how the bonus is calculated at each level of
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
achieved for first half of the fiscal year and the entire year.
1st half of fiscal year
at semi-annual EBITDA achieved
EBITDA Bonus Amount
$MMs % Achieved as % of Salary
- ---- ----------- --------------
28.5 100% One quarter of 35%
27.2 95% One quarter of 28%
26.0 90% One quarter of 21%
24.3 84% One quarter of 14%
22.3 78% One quarter of 7%
Full fiscal year
At fiscal year EBITDA achieved
EBITDA Bonus Amount
$MMs % Achieved as % of Salary
- ---- ----------- --------------
66.3 100% 35%
63.0 95% 28%
60.0 90% 21%
56.0 84% 14%
52.0 78% 7%
Example: Director at $60,000 Base Salary
1st half of EBITDA achieved = 95% Fiscal year EBITDA achieved = 90%
Bonus award = $4,200 A. Total year bonus eligible for = $12,600
B. First half bonus paid = $4,200
C. Year end bonus due = $8,400 (A-B)
D. Total bonus award for fiscal year = $12,600 (B+C)
Northern Automotive reserves the right to change, revise, or rescind the
policies or statements described in this guide from time to time, in its sole
discretion, with or without prior notice.
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BONUS CALCULATION APPENDIX A
LEVEL D
The following chart indicates how the bonus is calculated at each level of
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
achieved for first half of the fiscal year and the entire year.
1st half of fiscal year
at semi-annual EBITDA achieved
EBITDA Bonus Amount
$MMs % Achieved as % of Salary
- ---- ----------- --------------
28.5 100% One quarter of $6,000
27.2 95% One quarter of $4,800
26.0 90% One quarter of $3,600
24.3 84% One quarter of $2,400
22.3 78% One quarter of $1,200
Full fiscal year
At fiscal year EBITDA achieved
EBITDA Bonus Amount
$MMs % Achieved as % of Salary
- ---- ----------- --------------
66.3 100% $6,000
63.0 95% $4,800
60.0 90% $3,600
56.0 84% $2,400
52.0 78% $1,200
50% (one half) of the bonus amount is paid out after the first half fiscal year
results are determined.
The balance may be payable depending on the full fiscal year EBITDA level
achieved.
Example: Level D Associate at $42,000 Base Salary
1st half of EBITDA achieved = 95% Fiscal year EBITDA achieved = 90%
Bonus award = $1,200 A. Total year bonus eligible for = $3,600
B. First half bonus paid = $1,200
C. Year end bonus due = $2,400 (A-B)
D. Total bonus award for fiscal year = $3,600 (B+C)
Northern Automotive reserves the right to change, revise, or rescind the
policies or statements described in this guide from time to time, in its sole
discretion, with or without prior notice.
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BONUS CALCULATION APPENDIX A
LEVEL E
The following chart indicates how the bonus is calculated at each level of
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
achieved for first half of the fiscal year and the entire year.
1st half of fiscal year
at semi-annual EBITDA achieved
EBITDA Bonus Amount
$MMs % Achieved as % of Salary
- ---- ----------- --------------
28.5 100% One quarter of $3,000
27.2 95% One quarter of $2,400
26.0 90% One quarter of $1,800
24.3 84% One quarter of $1,200
22.3 78% One quarter of $ 600
Full fiscal year
At fiscal year EBITDA achieved
EBITDA Bonus Amount
$MMs % Achieved as % of Salary
- ---- ----------- --------------
66.3 100% $3,000
63.0 95% $2,400
60.0 90% $1,800
56.0 84% $1,200
52.0 78% $600
Example: Level E Associate at $30,000 Base Salary
1st half of EBITDA achieved = 95% Fiscal year EBITDA achieved = 90%
Bonus award = $ 600 A. Total year bonus eligible for = $1,800
B. First half bonus paid = $ 600
C. Year end bonus due = $1,200 (A-B)
D. Total bonus award for fiscal year = $1,800 (B+C)
Northern Automotive reserves the right to change, revise, or rescind the
policies or statements described in this guide from time to time, in its sole
discretion, with or without prior notice.
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G AND A BONUS LEVEL
DETERMINATION GUIDELINES
LEVEL CLASSIFICATION JEP GUIDELINES
- ----------- -------------------------- ----------------------------------
D Manager (or 450-799
equivalent JEPs)
- ----------- -------------------------- ----------------------------------
E Supervisor/Individual 295-449
Contributor Specialist
- ----------- -------------------------- ----------------------------------
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Section 2
ANNOUNCING THE 1996
GENERAL AND ADMINISTRATIVE
INCENTIVE COMPENSATION PLAN
Northern Automotive believes in providing eligible associates with the
opportunity to directly share in the success of the Company. The 1996 General
and Administrative Staff Incentive Compensation Plan is a vital part of the
Company's total compensation program. Each year, as we strive to reach new
profit goals, each associate plays an essential role in the achievement of
these goals.
Bonuses will be paid semi-annually after final determination of the first half
and full fiscal year results.
This Plan offers rewards for Company achievement of earnings goals. Your bonus
will be determined by the EBITDA (Earnings Before Interest, Taxes,
Depreciation, and Amortization) achieved and by your position and salary as
described on the attached chart.
To be eligible for a first half semi-annual award, you must have an effective
date of continuous employment no later than first day of the fourth fiscal
period and be employed by the Company on the day the bonus is paid. The bonus
award paid will be pro-rated for an associate who has not been continuously
employed for the entire first half of the fiscal year. To be eligible for a
year-end award, you must have an effective date of continuous employment no
later than the first day of the seventh fiscal period (the entire second half
of the fiscal period) and be employed by the Company on the day the bonus is
paid. The year-end award will be pro-rated based on the number of months of
continuous service.
This communication is intended as a brief description of the Incentive
Compensation Plan. The formal Plan Document shall govern in determining
eligibility, ans award levels and resolving any disputes involving the plan.
If you would like a copy of the Plan Document or any additional information,
please contact your Department Head or the Human Resources Department for
details.
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Section 3
1996 G&A BONUS COST PROJECTION 04/15/96
$$
First Half EBITDA 28,550,000 27,200,000 26,000,000 24,300,000 22,300,000
Second Half EBITDA 37,750,000 35,800,000 34,000,000 31,700,000 29,700,000
EBITDA 66,300,000 63,000,000 60,000,000 56,000,000 52,000,000
% OF PLAN 100% 95% 90% 84% 78%
==================================================================================================
BONUS BONUS BONUS BONUS BONUS BONUS BONUS BONUS BONUS BONUS
POSITION % COST % COST % COST % COST % COST
- --------------------------------------------------------------------------------------------------------------------------
EXECUTIVE (A) 50.0% 350,000 40.0% 280,000 30.0% 210,000 20.0% 140,000 10.0% 70,000
VICE PRES (B) 50.0% 705,000 40.0% 564,000 30.0% 423,000 20.0% 282,000 10.0% 141,000
DIRECTOR/BUYER(C) 35.0% 140,000 28.0% 112,000 21.0% 84,000 14.0% 56,000 7.0% 28,000
BUYERS (D) 6,000 18,000 4,800 14,400 3,600 10,800 2,400 7,200 1,200 3,600
MANAGERS (D) 6,000 660,000 4,800 528,000 3,600 396,000 2,400 264,000 1,200 132,000
SUPERVISORS (E) 3,000 375,000 2,400 300,000 1,800 225,000 1,200 150,000 600 75,000
HR MGRS (D) 6,000 30,000 4,800 24,000 3,600 18,000 2,400 12,000 1,200 6,000
TOTAL --------- --------- --------- --------- ---------
EBITA PLAN 2,813,675 2,250,940 1,688,205 1,125,470 562,735
One-half is 1,406,838 1,125,470 844,103 562,735 281,368
Payout at mid-year: 703,419 562,735 422,051 281,368 140,684
==========================================================================================================================
DIRECTOR OF R.E 10,000 30,000 10,000 30,000 10,000 30,000 10,000 30,000 10,000 30,000
RSM/DSM COMM'L 5,000 60,000 5,000 60,000 5,000 60,000 5,000 60,000 5,000 60,000
OTHER 0 0 0 0 0 0 0 0 0 0
TOTAL --------- --------- --------- --------- ---------
OTHER PLANS 90,000 90,000 90,000 90,000 90,000
(estimate)
==========================================================================================================================
2,903,675 2,340,940 1,778,205 1,215,470 652,735
========= ========= ========= ========= =========