EXHIBIT 10.3
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AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.]
AMENDED AND RESTATED
WRIGHT EXPRESS CORPORATION
SHORT-TERM INCENTIVE PROGRAM
ARTICLE 1- PURPOSE OF PROGRAM
Wright Express Corporation has adopted this Short-Term Incentive Program
("STIP") to attract and retain high-performing employees; to provide incentives
for eligible employees to achieve specified company, department and/or
individual performance goals; and to reward such employees for the achievement
of specified goals on an annual basis. The Short-Term Incentive Program is
intended to qualify as performance-based compensation under Section 162(m) of
the Internal Revenue Code.
ARTICLE 2- DEFINITIONS
Wherever used in this document, the following terms have the meanings set forth
below.
2.1 APPENDIX means an Appendix to this Program document containing targets,
payment metrics, and other terms of the Program (or modifications thereof)
applicable to a specific Plan Year. The Appendices shall be considered part of
the Program document.
2.2 COMPANY means Wright Express Corporation.
2.3 ELIGIBLE EARNINGS means total gross pay for the applicable Plan Year (or the
portion thereof during which the Participant is actively employed and eligible
to participate in the STIP), including, salary or wages classified by the
Company as regular; paid time off (PTO), whether planned or unplanned; holiday;
bereavement; jury duty; retroactive pay; overtime pay; shift differential;
language differential; and excluding, salary or wages classified by the Company
as disability pay, commission/incentive pay, and bonuses.
2.4 EFFECTIVE DATE means January 1, 2007.
2.5 MBO means management by objectives.
2.6 PARTICIPANT means an eligible employee who participates in the Program for a
Plan Year in accordance with Article 3.
2.7 PLAN YEAR means the fiscal year of the Company; as of the Effective Date,
the Plan Year is the calendar year.
2.8 PROGRAM means this Wright Express Corporation Short-Term Incentive Program,
as amended from time to time, including the provisions of any Appendix, which
are
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EXHIBIT 10.3
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incorporated herein.
ARTICLE 3- PARTICIPATION
3.1 ELIGIBLE EMPLOYEES
Each full-time regular or part-time regular employee of the Company who meets
the following requirements shall be a Participant for a Plan Year:
(a) The employee is not eligible for any other commission or incentive
variable pay plan of the Company.
(b) The employee commences employment on or before November 1 of the
applicable year; and
(c) Except as provided in Section 3.2, the employee is actively
employed on the bonus payment date for the applicable year.
3.2 SPECIAL RULES
(a) A Participant who dies or becomes totally disabled during a Plan
Year (as determined under the Company's Long-Term Disability program) may
receive a pro-rated bonus for the applicable year based on his or her
Eligible Earnings during the period of the Participant's active employment.
Any bonus payable to a deceased Participant shall be paid to his or her
personal representative.
(b) A Participant who is not actively employed on the bonus payment
date for a Plan Year due to an approved leave of absence may receive a
pro-rated bonus for the applicable year based on his or her Eligible
Earnings during the period of the Participant's active employment.
(c) A Participant who shall be the subject of a Performance
Improvement Plan at the time payments are made under Section 5.1 of the
Program with respect to any Plan Year shall not be eligible to receive a
payment under the Program for such Plan Year until he or she has
successfully met the requirements of the Performance Improvement Plan.
ARTICLE 4- ANNUAL INCENTIVES
The Corporate and Executive Officer MBOs for each Plan Year shall be approved by
the Compensation Committee of the Company's Board of Directors, or its delegate.
An Individual Effectiveness Factor ("IEF") shall be assigned to an employee
classified as an "associate" based on criteria established by the Company. The
IEF for each associate shall be initially established at 1.00. An associate's
IEF for a Plan Year may be adjusted
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EXHIBIT 10.3
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down, but not below 0.80, or up, but not above 1.20, by action of his or her
supervisor with the approval of his or her division Senior Vice President and
the Company's President and Chief Executive Officer. However, the foregoing
adjustments (in the aggregate) must not increase the total amount payable under
the Program for the given year.
The performance measures applicable to a Plan Year shall be set out in the
Appendix.
ARTICLE 5- PAYMENTS
5.1 TIME AND FORM
Bonuses shall be calculated and paid in a single payment for the applicable
year, by no later than March 31 of the following year.
5.2 POSITION CHANGES
"Position changes" for a Plan Year include promotions, demotions, and transfers
between positions and/or departments.
(a) For a non-Management Participant who is STIP eligible for the
entire year, the amount of the Participant's bonus is calculated based on
his or her position on December 31 of the applicable year.
(b) For a non-Management Participant who is an eligible employee for a
portion of the year and an ineligible employee for a portion of the year,
the amount of the Participant's bonus is calculated based on pro-ration for
the portion of the year in which he or she was an eligible employee.
(c) For a Participant who is, at any point during the year, a Manager,
Director, Vice President, Senior Vice President, or the President and Chief
Executive Officer, the amount of the Participant's bonus is calculated
based on the period of time in each STIP eligible position and the
associate's STIP target percentage for each position during the applicable
year.
5.3 TAXES
All federal, state or local taxes that the Program Administrator determines are
required to be withheld from any payments made under the Program shall be
withheld.
ARTICLE 6- ADMINISTRATION
6.1 PROGRAM ADMINISTRATOR
The Program shall be administered by the Compensation Committee of the Company's
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EXHIBIT 10.3
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Board of Directors, which may delegate administrative responsibility in whole or
in part to the President and Chief Executive Officer and/or the Senior Vice
President, Human Resources ("Administrators"), subject to any requirements for
review and approval that may be established by the Compensation Committee. In
all areas not specifically reserved for such review and approval, the decisions
of the applicable Administrator shall be binding on the Company and each
eligible employee under Article 3. Notwithstanding the foregoing, the
Compensation Committee may not modify MBOs or other performance criteria during
a Plan Year so as to increase the payment to a Section 162(m) Participant (as
defined below) or exercise its discretion to increase the amount of incentive
pay that would otherwise be due a Section 162(m) Participant upon attainment of
a performance goal.
6.2 CLAIMS
Claims regarding payments under the Program shall be directed to a Participant's
direct supervisor and/or the Company's Compensation Department. Any claim
regarding the amount of any bonus payment hereunder shall be made within 30 days
of the date of such payment, or shall be forfeited.
ARTICLE 7- AMENDMENT AND TERMINATION
The Company reserves the right to terminate, amend, modify and/or restate this
Program, in whole or in part, at will at any time, with or without advance
notice.
ARTICLE 8- MISCELLANEOUS
8.1 PAYMENT ADJUSTMENTS AND SPECIAL CIRCUMSTANCES
The Compensation Committee shall have the authority to adjust payments under the
Program (upward or downward) at its discretion. Subject to the approval of the
Compensation Committee, the President and Chief Executive Officer and the Senior
Vice President, Human Resources, acting together, shall have the power to adjust
payments under the Program (upward or downward) as and to the extent appropriate
to achieve the stated goals and purposes of the Program and may approve
exceptions to the Program under special circumstances, to avoid undue hardship
with respect to a Participant. Notwithstanding the foregoing, neither the
Compensation Committee, the President and CEO, the Senior Vice President, Human
Resources, nor any other person may increase or accelerate the payment due to
any Section 162(m) Participant with respect to any Plan Year. The term "Section
162(m) Participant" shall mean the President and CEO and each of the four
highest paid officers of the Company (other than the President and CEO) on the
last day of the taxable year, for purposes of the executive compensation
disclosure rules under the Securities Exchange Act of 1934.
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EXHIBIT 10.3
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AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.]
8.2 INFORMATION
The Program Administrators shall be responsible for ensuring effective
communication of the Program to eligible employees. Copies of the Program shall
be available to all Participants. All modifications and changes to the Program
shall be appropriately documented and communicated to Participants.
8.3 NO GUARANTEE OF PAYMENT
The Company does not guarantee payment of any bonus amounts hereunder, except to
the extent that payment is required by applicable law.
8.4 LIMITATION OF EMPLOYEES' RIGHTS
Nothing contained in the Program shall confer upon any person a right to be
employed or to continue in the employ of the Employer, or interfere in any way
with the right of the Employer to terminate the employment of a Participant at
any time, with or without cause.
IN WITNESS WHEREOF, Wright Express Corporation has caused this document to be
executed by its duly authorized officer this 30th day of March, 2007.
WRIGHT EXPRESS CORPORATION
By: /s/ Robert C. Cornett
---------------------------------
Robert C. Cornett
Its: Senior Vice President, Human
Resources
Date: March 30, 2007
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EXHIBIT 10.3
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APPENDIX I
2007 STIP FACTORS
STIP WEIGHTINGS
WEX Corporate MBOs
-------------------------------- Exec Shared, VP
Adj Net Income PPG Adj Revenue & Mgr MBOs
-------------- --------------- ---------------
CEO/SVPs 60% 20% 20%
Vice Presidents 60% 20% 20%
Managers 50% 20% 30%
Individual Contributors 50% 20% 30%
PPG: Price Per Gallon
PAYOUT LEVELS
In 2007, the Company must achieve at least threshold results for Adjusted Net
Income in order to pay out any portion of the Short Term Incentive Program.
Performance Results Payout %
- ------------------- --------
Threshold 50%
Target 100%
Max 200%
MBOS
Corporate MBOs
Threshold Target
Performance Goal Performance Performance Maximum Performance
---------------- ----------- ----------- -------------------
Adj Net Income(1) $[**] $[**] $[**]
PPG(2) Adj Revenue(3) $[**] $[**] $[**]
(1) NOTE: Adjusted Net Income means Adjusted Net Income for the year ended
December 31, 2007 as reported in the Corporation's Form 8-K filing
reporting the Corporation's results for the 4th Quarter of 2007, adjusted
to exclude the following items (if any):
- losses from discontinued operations;
- the cumulative effect of changes in Generally Accepted Accounting
Principles;
- any one-time charge or dilution resulting from any acquisition or
divestiture;
- the effect of changes to our effective federal tax rates;
- extraordinary items of loss or expense;
- and any other unusual or nonrecurring items of loss or expense,
including restructuring charges.
Notwithstanding the foregoing, the Compensation Committee may exercise
discretion to include all or part of an item of loss or expense or to
exclude all or part of an item of gain or income that the Compensation
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EXHIBIT 10.3
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Committee believes was not attributable to or does not accurately reflect
the current and continuing performance of the Corporation.
(2) PPG: Price Per Gallon
(3) PPG Adjusted Revenue is reported 2007 Revenue adjusted for the difference
between reported 2007 PPG and Board-approved budgeted 2007 PPG.
Executive Officer MBOs
CEO and SVPs share the following MBOs:
WEIGHT PERFORMANCE GOAL THRESHOLD PERFORMANCE TARGET PERFORMANCE MAXIMUM PERFORMANCE
- ------ ------------------------------ -------------------------- ------------------------------- --------------------------
10% By January 31, 2008, the Board $[**] MILLION REVENUE PLAN $[**] MILLION REVENUE PLAN $[**] MILLION REVENUE PLAN
of Directors will evaluate the
Executive Team on progress - 2.5 rating on - 3.0 rating on evaluation - 4.0 Rating on
towards achievement of the evaluation criteria criteria AND evaluation criteria
[**] Strategic Growth AND AND
Initiatives. - Achievement of 2007 Target
- Achievement of 2007 strategic revenue goals - Achievement of 2007
Threshold strategic Maximum strategic
revenue goals revenue goals
10% Operational Scale Cost per transaction Cost per transaction Cost per transaction
of $[**] of $[**] of $[**]
STRATEGIC INITIATIVES [**] REVENUE GOAL
- --------------------- -----------------
[**] $[**]m
[**] $[**]m
[**] $[**]m
[**] $[**]m
[**] TBD
[**] TBD
EVALUATION CRITERIA
- - Strategic initiative business plans are well developed and provide a
clear pathway for achievement of [**] revenue and income targets.
- - Appropriate resources (people, financial, technology) have been
assigned and committed to execute on each business plan.
- - Effective and timely communication is provided to the board
regarding progress against each initiative.
- - At least one initiative shows strong potential to achieve greater
than $[**] million in revenue by [**].
RATING SCALE
1 = Does not meet board expectations
2 = Partially meets board expectations
3 = Meets board expectations
4 = Exceeds board expectations
5 = Exceeds board expectations by a wide margin
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EXHIBIT 10.3
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2007 STRATEGIC REVENUE GOALS
THRESHOLD
PERFORMANCE GOAL PERFORMANCE TARGET PERFORMANCE MAXIMUM PERFORMANCE
- ---------------------- ------------------- ------------------- -------------------
2007 Strategic Revenue $[**]m revenue from $[**]m revenue from $[**]m revenue from
Achievement sources below sources below sources below
- ---------------------- ------------------- ------------------- -------------------
[**] $[**] $[**] $[**]
[**] $[**] $[**] $[**]
[**] $[**] $[**] $[**]
[**] $[**] $[**] $[**]
[**] $[**] $[**] $[**]
[**] $[**] $[**] $[**]
[**] $[**] $[**] $[**]
TOTAL $[**] $[**] $[**]
SVP Sales Additional Incentive
2007 SVP, Sales Special Incentive
Company Special Incentive
PPG Adj Revenue $(,000) Performance Level Performance Level SVP, Sales Payout
- ----------------------- ----------------- ----------------- -----------------
$[**] [**]% Miss $ 0
$[**] [**]% Threshold $ 50,000
[**]%
$[**] [**]% Target $100,000
[**]%
$[**] [**]% Target/Max $150,000
$[**] [**]% Max $200,000
No payout below Threshold level
Payout for performance between levels above threshold will be incrementalized
If results exceed maximum of special incentive, CEO can recommend higher payout
for approval
Vice President MBOs
Each Vice President generally has [**] MBOs. [**] of which will be an
organizational shared MBO. For 2007, these organizational shared MBOs generally
include a strategic revenue goal and a goal for organizational scale.
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EXHIBIT 10.3
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Department MBOs
Each Manager generally has [**] MBOs shared by all STIP-eligible members of
their department. Generally, [**] of these MBOs will mirror the organizational
shared MBO assigned to their VP.
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